SLD | SHAHID LEGAL DATA SYSTEM

Sr #	Date	Heading	View
1	2026-09-26	FBR LAUNCHES ELECTRONIC SCRUTINY OF SALES TAX RETURNS	View
2	2026-09-26	FBR LAUNCHES NATIONAL FACELESS CENTRE TO REFORM TAX AUDIT PROCESS	View
3	2026-09-26	FBR EXTENDS RETURN FILING DEADLINE FOR POWER UTILITIES UNTIL SEPTEMBER 30	View
4	2026-09-26	FBR REVISES CUSTOMS VALUES OF SODIUM SULPHATE ANHYDROUS	View
5	2026-09-26	FBR EXPLAINS TAX ON OFFSHORE ASSET GAINS FOR TAX YEAR 2027	View
6	2026-09-26	LEARN ABOUT GEOGRAPHICAL SOURCE OF INCOME IN PAKISTAN DURING TAX YEAR 2027	View
7	2026-09-26	FBR EXPLAINS TAX LIABILITY AFTER CHANGES IN AOP AND BUSINESS SUCCESSION	View
8	2026-09-26	FTO ORDERS FBR TO ENSURE LAWFUL SEALING OF TAXPAYERS’ BUSINESS PREMISES	View
9	2026-09-25	FBR OPENS TAX COLLECTION OFFICES ON SATURDAY	View
10	2026-09-25	PAKISTAN CUSTOMS SETS NEW VALUES FOR IMPORTED EMPTY GLASS BOTTLES	View
11	2026-09-25	INCOME TAX TREATMENT OF DECEASED INDIVIDUAL IN TAX YEAR 2027	View
12	2026-09-25	HOW MANY DAYS’ STAY MAKES YOU A TAX RESIDENT IN TAX YEAR 2027?	View
13	2026-09-25	FBR DEFINES ‘PERSON’ UNDER INCOME TAX ORDINANCE FOR TAX YEAR 2027	View
14	2026-09-23	PSW ENABLES REMOTE BIOMETRIC VERIFICATION THROUGH NADRA PAKID APP	View
15	2026-09-23	SENATE BODY REVIEWS ALLEGED $1BN ANNUAL TAX LOSS IN TOBACCO SECTOR	View
16	2026-09-23	FBR CHAIRMAN MEETS TAX BAR ASSOCIATION TO ADDRESS TAXPAYER ISSUES	View
17	2026-09-23	SRB HOLDS FOURTH PRIZE DRAW FOR VERIFIED POS INVOICES, OFFERS 95 PRIZES	View
18	2026-09-23	FBR EXPLAINS NORMAL AND SPECIAL TAX YEARS FOR TAX YEAR 2027	View
19	2026-09-23	FBR UNVEILS â€˜FAIR MARKET VALUEâ€™ MECHANISM FOR TAX YEAR 2027	View
20	2026-09-23	FBR EXPLAINS TAX TREATMENT OF JOINT OWNERS FOR TAX YEAR 2027	View
21	2026-09-22	FBR ORDERS DIGITISED INCOME AND ASSET DECLARATIONS FOR BS-17 AND ABOVE	View
22	2026-09-22	ABHI MICROFINANCE BANK, SOS GROUP & SOUTH AIR PARTNER TO OFFER ADVANCE SALARY SOLUTIONS	View
23	2026-09-22	CHINA SHARES CLIMB AHEAD OF TRUMP-XI SUMMIT	View
24	2026-09-22	EUROPEâ€™S STOXX 600 RALLIES AS OIL PRICES RETREAT	View
25	2026-09-22	WALL ST RISES ON AI GAINS AS OIL SLIDES	View
26	2026-09-22	ASIAN STOCKS EDGE HIGHER, RUPIAH DOWN	View
27	2026-09-22	PFVA SUPPORTS BMG IN KCCI POLLS	View
28	2026-09-22	IRISH PRIVACY REGULATOR FINES GOOGLE â‚¬403 MILLION OVER LOCATION DATA PROCESSING	View
29	2026-09-22	PARAMOUNT SETTLES WITH US STATES TO CLEAR WARNER BROS MEGA-MERGER	View
30	2026-09-21	FBR SETS MINIMUM VALUE OF VEGETABLE OIL AND GHEE FOR SALES TAX	View
31	2026-09-21	FBR ALLOWS 95% INPUT TAX ADJUSTMENT FOR OIL AND GHEE MANUFACTURERS	View
32	2026-09-21	FBR DECLARES 29 CATEGORIES OF GOODS AS PERISHABLE UNDER CUSTOMS LAW	View
33	2026-09-21	FBR EXTENDS RETURN FILING DEADLINE FOR ST AND FED	View
34	2026-09-19	KTBA URGES FBR TO REMOVE IRIS ERRORS	View
35	2026-09-19	PAKISTAN POST PARTNERS WITH ALIBABA TO AUTOMATE PARCEL SORTING	View
36	2026-09-19	PAKISTAN CUSTOMS ARRESTS TWO IN MAJOR NARCOTICS SMUGGLING ATTEMPT	View
37	2026-09-19	KTBA FLAGS CRITICAL IRIS COMPUTATION GLITCHES IN TAX YEAR 2026 RETURNS	View
38	2026-09-19	DECLINING TREND PERSISTS ON COTTON MARKET	View
39	2026-09-19	PCGA SAYS COTTON ARRIVALS SURGE 19.17PC YOY	View
40	2026-09-19	BANK OF JAPAN HIKES RATES	View
41	2026-09-19	MASHREQ PAKISTAN LAUNCHES RAAST PAYMENT ECOSYSTEM	View
42	2026-09-19	CHINA STOCKS LOG BEST DAY IN A MONTH AHEAD OF TRUMP-XI MEETING	View
43	2026-09-19	STOXX 600 FALLS AS AUTOS, TELECOMS LEAD BROAD SELL-OFF	View
44	2026-09-19	CHERY MASTER PAKISTAN LAUNCHES CHERY Q	View
45	2026-09-19	PAKISTAN CUTS PETROL PRICE BY RS1.65, HSD BY 88 PAISAS	View
46	2026-09-18	FBR RETAINS EMPLOYMENT GENERATION TAX CREDIT FOR MANUFACTURERS IN TAX YEAR 2027	View
47	2026-09-18	FBR ALLOWS TAX CREDIT ON LOW-COST HOUSING LOAN INTEREST FOR TAX YEAR 2027	View
48	2026-09-18	FBR ALLOWS TAX CREDIT ON APPROVED PENSION FUND CONTRIBUTIONS FOR TAX YEAR 2027	View
49	2026-09-18	JAPANâ€™S NIKKEI RISES AS OIL PRICES EASE	View
50	2026-09-18	CHINA, HK STOCKS SLIP AS GOLD, REAL ESTATE SHARES FALL	View
51	2026-09-18	EUROPEAN STOCKS RISE AFTER FED HIKE AS OIL SLIPS	View
52	2026-09-18	AI SHIFTING DIGITAL DIVIDE FROM ACCESS TO CAPABILITY: JAZZWORLD CE	View
53	2026-09-18	YANGO PAKISTAN LAUNCHES SHARIA-COMPLIANT FINTECH SERVICE	View
54	2026-09-17	RTO HYDERABAD SEEKS GREATER TAX COMPLIANCE FROM MARRIAGE HALLS	View
55	2026-09-17	FBR ALLOWS TAX CREDIT ON CHARITABLE DONATIONS IN TAX YEAR 2027	View
56	2026-09-17	EDUCATION EXPENSES DEDUCTION AVAILABLE IN TAX YEAR 2027	View
57	2026-09-17	FBR ALLOWS DEDUCTION FOR ZAKAT PAYMENTS IN TAX YEAR 2027	View
58	2026-09-17	FBR, TRADERS TO VISIT MARKETS NATIONWIDE FOR ASAAN TAX SCHEME REGISTRATIONS	View
59	2026-09-17	CHINA, HK SHARES END HIGHER ON TECH STRENGTH	View
60	2026-09-17	OIL SLIPS AS KSA OFFERS MORE CRUDE VIA OMAN	View
61	2026-09-17	INDIA RBI MAY INCREASE DEBT SALES TO DRAIN LIQUIDITY AFTER FIRST SUCH AUCTION IN 9 YEARS	View
62	2026-09-16	JAPAN'S NIKKEI FLAT AS INVESTORS AWAIT FED, BOJ DECISIONS	View
63	2026-09-16	ALTERNATIVE MEDICINES, HEALTH PRODUCTS: LCCI HOLDS SESSION ON INTEGRATED ONLINE	View
64	2026-09-16	OIL SLIPS AS SAUDI ARABIA OFFERS MORE CRUDE VIA OMAN	View
65	2026-09-12	FBR STREAMLINES TAX YEAR 2027 EXEMPTION CERTIFICATES WITH NEW ELIGIBILITY RULES	View
66	2026-09-12	FBR RESETS PROPERTY TAX COLLECTION WITH FLAT-RATE ADVANCE TAXES	View
67	2026-09-12	FBR OPENS DOOR TO TAXPAYER RE-AUDITS UNDER NEW TAX YEAR 2027 RULES	View
68	2026-09-12	FBR TO ISSUE COMPLETE REPORT OF TAXPAYER AUDIT	View
69	2026-09-12	FBR MANDATES SALES TAX INVOICES FOR EXEMPT SUPPLIES	View
70	2026-09-12	FBR EXPLAINS FACELESS SALES TAX ASSESSMENT REGIME FOR TAX YEAR 2027	View
71	2026-09-12	FBR EMPOWERED TO INCREASE OR REDUCE SALES TAX ADJUSTMENT RATIO	View
72	2026-09-12	FBR BARRED FROM WITHHOLDING REFUNDS ABOVE RS390BN	View
73	2026-09-12	â€˜KPRA SAHULATâ€™ MOBILE APP LAUNCHED TO FACILITATE TAXPAYERS	View
74	2026-09-11	RTO HYDERABAD EXPLAINS TO SHOPKEEPERS FIXED TAX SCHEME	View
75	2026-09-11	PAKISTAN CUTS SMARTPHONE IMPORT DUTIES AS PREMIUM HANDSET CHARGES FALL	View
76	2026-09-11	RTO HYDERABAD TAKES TAX AWARENESS DRIVE TO SMALL SHOPKEEPERS	View
77	2026-09-11	KTBA DEMANDS 2026 RETURN FILING DEADLINE EXTENSION AMID HIGH REPORTING REQUIREMENTS	View
78	2026-09-11	FBR MAKES ELECTRONIC RETURN FILING MANDATORY UNDER TAX YEAR 2026 CHANGES	View
79	2026-09-11	FBR TIGHTENS CAPITAL GAINS TAX RULES FOR FOREIGN CURRENCY ACCOUNTS	View
80	2026-09-11	FBR SETS FAIR MARKET VALUE AS COST OF INHERITED PROPERTY	View
81	2026-09-08	RTO ISLAMABAD GUIDES SMALL TRADERS ON EASY TAX RETURN FILING	View
82	2026-09-08	FBR ADDS FIVE STEEL UNITS TO RS5 ELECTRICITY SALES TAX REGIME	View
83	2026-09-08	INDIAN CENTRAL BANK UNLOADED AT LEAST $8 BILLION LAST WEEK TO ANCHOR RUPEE, BANKERS SAY	View
84	2026-09-08	BANK OF MAHARASHTRA, CANARA BANK EYE DOLLAR DEBT ISSUANCE THIS MONTH, BANKERS SAY	View
85	2026-09-08	EUROPEAN SHARES SUBDUED AS SURGING CRUDE SHARPENS FOCUS ON ECB RATE PATH	View
86	2026-09-08	CHINA STOCKS INCH HIGHER AS TECH SHARES RISE	View
87	2026-09-08	SOUTH KOREA, TAIWAN STOCKS SURGE ON AI APPETITE	View
88	2026-09-08	GULF EQUITIES MIXED AMID US-IRAN FLARE-UPS	View
89	2026-09-08	SMAP GREETS COMPLETION OF YOUTH SKILL UPLIFT PROGRAMME PHASE	View
90	2026-09-08	PAKISTAN LAUNCHES NEW INSURANCE SCHEME FOR SME EXPORTERS	View
91	2026-09-07	COSTS IMPOSED BY BENCH DEPOSITED, TRIBUNAL TOLD	View
92	2026-09-07	RTO HYDERABAD LAUNCHES DIGITAL INVOICING ENFORCEMENT DRIVE	View
93	2026-09-07	FBR RATIONALISES WITHHOLDING TAX ON MINIMUM TAX FOR TAX YEAR 2027	View
94	2026-09-07	FBR EXEMPTS FOREIGN INCOME OF RETURNING EXPATRIATES IN TAX YEAR 2027	View
95	2026-09-07	FBR CLARIFIES FOREIGN INCOME TAX EXEMPTION FOR SHORT-TERM RESIDENTS	View
96	2026-09-07	GOVT COMMITTED TO CUTTING TAX BURDEN THROUGH STRUCTURAL REFORMS: KIYANI	View
97	2026-09-07	PAKISTAN RETAINS TAX EXEMPTIONS FOR FOREIGN INVESTMENT IN 2027	View
98	2026-09-07	FBR OUTLINES TAX EXEMPTIONS FOR DIPLOMATS AND FOREIGN OFFICIALS IN 2027	View
99	2026-09-07	FBR CONFIRMS AGRICULTURAL INCOME REMAINS TAX-EXEMPT FOR 2027	View
100	2026-09-07	INDIAN PRIVATE BANKSâ€™ ABRUPT CEO SUCCESSIONS TEST FOCUS ON STRATEGY	View
101	2026-09-07	SBP LAUNCHES WOMEN MICROFINANCE CREDIT GUARANTEE FACILITY WITH 25% FIRST-LOSS COVER	View
102	2026-09-05	FBR REVISES PROCESS FOR PENDING SALES TAX REFUNDS	View
103	2026-09-05	CUSTOMS KARACHI ARRESTS THREE IN RS16.5M AUCTION FRAUD CASE	View
104	2026-09-05	FBR CHANGES FASTER RULES TO SPEED UP SALES TAX REFUND PROCESSING	View
105	2026-09-05	WHICH INCOME IS TREATED AS â€œINCOME FROM OTHER SOURCESâ€ FOR TAX YEAR 2027?	View
106	2026-09-05	CAPITAL GAINS TAX ON DISPOSAL OF SECURITIES IN TAX YEAR 2027	View
107	2026-09-05	FBR EXPLAINS CAPITAL GAINS TAX RULES FOR TAX YEAR 2027	View
108	2026-09-05	NIKKEI RISES ON SOFTBANK RALLY	View
109	2026-09-05	INDIAN SHARES POST WEEKLY LOSSES AS ELEVATED CRUDE KEEPS SENTIMENT SUBDUED	View
110	2026-09-05	CHINA STOCKS CLOSE WEEK DOWN AS AI RALLY LOSES STEAM	View
111	2026-09-05	WALL ST SLIDES AFTER STRONG JOBS REPORT BOLSTERS HAWKISH FED BETS	View
112	2026-09-05		View
113	2026-09-04	PM SHEHBAZ SHARIF APPROVES REMOVAL OF SENIOR FBR OFFICER OVER CORRUPTION	View
114	2026-09-04	FBR DECLARES SATURDAY, SEPTEMBER 5, A NORMAL WORKING DAY	View
115	2026-09-04	PAKISTAN STEPS UP TAX REFORMS TO BROADEN TAX BASE, SAYS KAYANI	View
116	2026-09-04	PCDMA WARNS FBR IRIS GLITCHES ARE DELAYING SALES TAX RETURNS	View
117	2026-09-04	BANKISLAMI ROLLS OUT FIRST GOLD-BASED FINANCING FACILITY	View
118	2026-09-04	CHINA STOCKS END FLAT; INVESTORS AWAIT US PAYROLLS DATA	View
119	2026-09-04	EUROPEAN STOCKS RECOVER FROM ONE-MONTH LOWS AS BOND YIELDS RETREAT	View
120	2026-09-04	WALL ST CLIMBS AFTER FED GOVERNOR SAYS HE COULD SUPPORT RATE HOLD	View
121	2026-09-04	SRI LANKAN SHARES CLOSE HIGHER	View
122	2026-09-04	PAKISTAN PHARMA INDUSTRY OPPOSES PROPOSAL TO ALTER THE DRUG PRICING FORMULA	View
123	2026-09-04	RUSSIAN CO REVEALS MACOS USERS FACE MORE CYBER THREATS THAN WINDOWS USERS	View
124	2026-09-04	OIL PRICES MIXED AS INVESTORS WEIGH ME ESCALATION	View
125	2026-09-04	US NATGAS PRICES RISE TO 8-WEEK HIGH ON LNG FLOWS, WARM WEATHER	View
126	2026-09-03	FBR PROPOSES CHANGES TO ALTERNATIVE DISPUTE RESOLUTION RULES	View
127	2026-09-03	FBR AMENDS INCOME TAX RETURN FORMS FOR TAX YEAR 2026	View
128	2026-09-03	FBR ORDERS FIRE SAFETY REVIEW ACROSS HEADQUARTERS AND FIELD OFFICES	View
129	2026-09-03	GHAR HO TU APNA: MBL APPROVES RS31.45BN IN HOUSING FINANCE	View
130	2026-09-03	INDIAN CENTRAL BANK STEPS UP RUPEE SUPPORT, SOARING NRI DEPOSITS BOLSTER FIREPOWER	View
131	2026-09-03	MEEZAN BANK APPROVES OVER RS31BN UNDER GHAR HO TU APNA PROGRAMME	View
132	2026-09-03	PAKISTAN ACCELERATES CASHLESS DRIVE WITH NEW DIGITAL TARGETS	View
133	2026-09-02	FBR EXPLAINS ACCOUNTING METHOD FOR COMPUTING TAX IN TAX YEAR 2027	View
134	2026-09-02	TAX TREATMENT OF PROFIT ON NON-PERFORMING DEBTS IN TAX YEAR 2027	View
135	2026-09-02	FBR CLASSIFIES â€˜BAD DEBTSâ€™ DEDUCTION FOR TAX YEAR 2027	View
136	2026-09-02	FBR ORDERS CUSTOMS OFFICERS TO DECLARE DUAL NATIONALITY, FOREIGN TRAVEL DETAILS	View
137	2026-09-02	FBR INTRODUCES STRICTER CUSTOMS MONITORING, NOTIFIES DIGITAL ENFORCEMENT STATIONS	View
138	2026-09-02	PAKISTAN BANKS DISBURSE RECORD RS3.23 TRILLION IN AGRI LOANS	View
139	2026-09-02	PRIVATE SECTOR REPAYS OVER RS371BN IN BANK CREDIT AMID HIGH INTEREST RATES	View
140	2026-09-02	WALL ST KICKS OFF SEPT UNDER PRESSURE AS HIGHER YIELDS, OIL PRICES WEIGH	View
141	2026-09-01	PUNJAB ORDERS SALONS, SPAS TO DISPLAY SALES TAX GUIDELINES AT CASH COUNTERS	View
142	2026-09-01	ISLAMABAD TO ISSUE 2026-27 PROPERTY TAX BILLS WITHIN 10 DAYS	View
143	2026-09-01	FBR ORDERS IRS OFFICERS TO DECLARE FOREIGN NATIONALITY, TRAVEL DOCUMENTS	View
144	2026-09-01	INDUS MOTOR CROSSES RS1 TRILLION IN CUMULATIVE TAX CONTRIBUTIONS	View
145	2026-09-01	FBR ALLOWS EMPLOYEE TRAINING TAX DEDUCTIONS FOR TAX YEAR 2027	View
146	2026-09-01	FBR EXPLAINS TAX DEDUCTION FOR SCIENTIFIC RESEARCH IN TAX YEAR 2027	View
147	2026-09-01	FBR EXPLAINS AMORTISATION DEDUCTIONS FOR INTANGIBLES IN TAX YEAR 2027	View
148	2026-09-01	FIRM TREND SEEN ON COTTON MARKET	View
149	2026-09-01	JAPANâ€™S NIKKEI EDGES LOWER	View
150	2026-09-01	CHINA STOCKS END HIGHER AS TECH BOOST OFFSETS WEAK DATA	View
151	2026-09-01	EUROPEâ€™S STOXX 600 FALLS AS OIL PRICES JUMP	View
152	2026-09-01	WALL ST DIPS AS RISING OIL PRICES, HAWKISH FED BETS PRESSURE STOCKS	View
153	2026-08-31	RTO-II KARACHI SEALS ILLEGAL CIGARETTE FACTORY IN MALIR	View
154	2026-08-31	PAKISTAN CUSTOMS TIGHTENS EFS CHECKS OVER FABRIC MISDECLARATION	View
155	2026-08-31	FBR SETS ELIGIBILITY RULES FOR INITIAL ALLOWANCE IN TAX YEAR 2027	View
156	2026-08-31	FBR SETS DEPRECIATION RULES FOR TAX YEAR 2027	View
157	2026-08-31	FBR LISTS BUSINESS EXPENSES NOT DEDUCTIBLE FOR TAX YEAR 2027	View
158	2026-08-31	TORONTO: Canadaâ€™s main stock index fell to an eight-day low on Friday, led by declines for metal	View
159	2026-08-31	AUSTRALIAN SHARES CLIMB ON STRONG NVIDIA EARNINGS	View
160	2026-08-31	WALL STREET WEEK AHEAD: JOBS REPORT, BROADCOM RESULTS POSE NEXT HURDLES FOR STOCK MARKET RALLY	View
161	2026-08-31	GULF STOCKS FALL AFTER WARSH REMARKS	View
162	2026-08-31	SEC 7E, SUPER TAX UNDER SEC 4C: FBR YET TO DEVISE MECHANISM FOR REFUNDING TAXES: BUTT	View
163	2026-08-29	FBR REVISES PROPERTY VALUATION RATES ACROSS QUETTA	View
164	2026-08-29	FBR GRANTS RANGERS, FRONTIER CORPS LIMITED CUSTOMS POWERS ALONG BORDERS	View
165	2026-08-29	BILAL AZHAR KAYANI MEETS KARACHI EXPORTERS TO ADDRESS TAX CONCERNS	View
166	2026-08-29	PM ORDERS TIMELY FBR REFORMS, CRACKDOWN ON TAX EVASION AND SMUGGLING	View
167	2026-08-29	PTCL DISCLOSES RS55.3BN TAX CONTINGENCIES IN 1HCY26	View
168	2026-08-29	FBR EXPLAINS BUSINESS EXPENSE DEDUCTIONS FOR TAX YEAR 2027	View
169	2026-08-29	FBR CLARIFIES â€˜SPECULATION BUSINESSâ€™ RULES FOR TAX YEAR 2027	View
170	2026-08-29	FBR SETS OUT INCOME-FROM-BUSINESS RULES FOR PAKISTANâ€™S TAX YEAR 2027	View
171	2026-08-29	BOP DELIVERS RECORD 1Hâ€™26 RESULTS, ANNOUNCES INTERIM DIVIDEND OF 16PC	View
172	2026-08-29	AL BARAKA GROUPâ€™S NET INCOME RISES TO USD204M IN 1H2026	View
173	2026-08-29	NBP ANNOUNCES RS32.4BN NET PROFIT FOR 1HCY2026	View
174	2026-08-28	DECLINING TREND SEEN ON COTTON MARKET	View
175	2026-08-28	NIKKEI CLOSES LOWER AS ADVANTEST FALLS	View
176	2026-08-28	CHINA STOCKS END HIGHER ON NVIDIA-LED AI HARDWARE RALLY	View
177	2026-08-28	STOXX 600 SLIDES AS FRANCEâ€™S ELECTION RISKS RATTLE INVESTORS	View
178	2026-08-28	TECH STOCKS BOLSTER WALL STREET AS NVIDIA QUELLS AI GROWTH CONCERNS	View
179	2026-08-28	ASIAN STOCKS GAIN ON NVIDIA RESULTS	View
180	2026-08-28	GULF MARKETS CLOSE MIXED	View
181	2026-08-28	ESTABLISHMENT OF UNITED DIGITAL LIFE INSURANCE COMPANY APPROVED	View
182	2026-08-28	PAKISTAN, MALAYSIA SIGN MOU TO ESTABLISH â€˜MINERALS HUBâ€™	View
183	2026-08-25	SPOT RATE SHEDS RS200 PER MAUND	View
184	2026-08-25	ABL POSTS RS32.046BN PBT IN H1CY2026	View
185	2026-08-25	CHINA, HONG KONG STOCKS SLIP AS ALIBABA SLIDES	View
186	2026-08-25	TECH DRAGS S&P 500, NASDAQ LOWER AS IRAN TENSIONS	View
187	2026-08-25	ASIAN FX, STOCKS RETREAT AS INVESTORS AWAIT IRAN SANCTION DETAILS	View
188	2026-08-25	FIRMS TO DETECT ABNORMAL EVENTS, THEFT ALERTS WITH ADVANCED AI FEATURES	View
189	2026-08-25	OIL DROPS MORE THAN USD2	View
190	2026-08-21	PAKISTANâ€™S FIRST DPR PROGRAMME: IFC, BANK ALFALAH SIGN PROJECT AGREEMENT	View
191	2026-08-21	MEEZAN BANK OPENS FIRST ROUND-THE-CLOCK SERVICE CENTER	View
192	2026-08-21	BANKISLAMI REPORTS RS4.31BN PBT FOR IH OF 2026	View
193	2026-08-21	CHINA, HONG KONG STOCKS GAIN	View
194	2026-08-21	EUROPEâ€™S STOXX 600 SLIPS ON INFLATION FEARS	View
195	2026-08-21	WALL ST HITS TWO-WEEK LOWS	View
196	2026-08-21	KASPERSKY IDENTIFIES NEW VARIANT LINKED TO HONEYMYTE APT	View
197	2026-08-21	GLOBE RESIDENCY REIT DECLARES CASH DIVIDEND	View
198	2026-08-21	5G TECHNOLOGY: ZONG ANNOUNCES INVESTMENT PROGRAMME TO UPGRADE 1,000 SITES	View
199	2026-08-21	COMSATS INTERNET SERVICES SUCCESSFULLY DEAL WITH â€˜OPERATIONAL TURBULENCEâ€™	View
200	2026-08-20	WALL ST RECOVERS AS YIELDS EASE; MODERNA LIFTS HEALTHCARE STOCKS	View
201	2026-08-20	CHINA STOCKS FALL AS CHIP, ROBOTICS SELL-OFF OVERSHADOWS UNITREE IPO	View
202	2026-08-20	ICCI CHIEF LAUDS QAISER FOR LONGSTANDING SERVICES	View
203	2026-08-20	Published August 20, 2026 Updated about 3 hours ago	View
204	2026-08-20	PAKISTAN, CHINA EXPLORING BABY DIAPER-MAKING INVESTMENT OPTIONS	View
205	2026-08-20	KCA INCREASES SPOT RATE BY RS200 TO RS18,500 PER MAUND	View
206	2026-08-20	HBL, PAKISTAN CABLES, BCEM AND ORIENT ENERGY SYSTEMS MARK SUCCESSFUL SIGNING OF 7.5MW WIND POWER PROJECT	View
207	2026-08-20	SONERI BANK ANNOUNCES PAT OF RS2.396BN FOR 1Hâ€™26	View
208	2026-08-20	NIKKEI SLUMPS SHARPLY AS TECH SELLOFF SPREADS	View
209	2026-08-19	ABHI BANK POSTS RS1.502BN PAT FOR H1	View
210	2026-08-19	NASSER ABDULLA HUSSAIN LOOTAH COMMITS ADDITIONAL RS10BN IN EQUITY TO BML	View
211	2026-08-19	NAYA NAZIMABAD, KARACHI: BANK ALFALAH INTRODUCES FIRST ONE-STOP DIGITAL ICFC	View
212	2026-08-19	INDIAN SHARES EXTEND LOSING RUN ON FADING MIDEAST PEACE DEAL	View
213	2026-08-19	CHINA, HK STOCKS END FLAT AS ENERGY GAINS OFFSET AI LOSSES	View
214	2026-08-19	STOXX 600 DROPS TO TWO-WEEK LOW ON HIGHER BOND YIELDS	View
215	2026-08-19	TECH SELLOFF PULLS WALL STREET TO TWO-WEEK LOWS	View
216	2026-08-19	MOST GULF MARKETS MUTED ON IRAN-US CONFLICT	View
217	2026-08-19	DISNEY, ABC SUE US REGULATOR OVER THREAT TO BROADCAST LICENSES	View
218	2026-08-19	8TH WORLD TAEKWONDO PRESIDENTâ€™S CUP â€“ ASIAN REGION: TREET CORPORATION NAMED TITLE SPONSOR	View
219	2026-08-18	OIL PRICES CLIMB, BOND YIELDS RISE AS US-IRAN CEASEFIRE EXPIRES	View
220	2026-08-18	JAPANESE SHARES TRADE MOSTLY LOWER ON WEAK GDP DATA	View
221	2026-08-18	INDIAâ€™S NIFTY 50 FALLS FOR FIFTH SESSION	View
222	2026-08-18	CHINA, HK SHARES RALLY ON TECH REBOUND	View
223	2026-08-18	EUROPEAN SHARES EDGE LOWER AS LUXURY STOCKS WEIGH	View
224	2026-08-18	WALL ST MIXED AS ME TENSIONS ECLIPSE TECH STRENGTH	View
225	2026-08-18	MOST GULF MARKETS EASE AS IRAN TENSIONS WEIGH	View
226	2026-08-18	GOVT URGED TO REVIEW PETROLEUM PRICING MECHANISM	View
227	2026-08-18	â€˜CUSTOMS MOVES TO MODERNISE IMPORTED GOODS VALUATION SYSTEMâ€™	View
228	2026-08-17	WEEKLY COTTON REVIEW: GOODS TRANSPORTERSâ€™ STRIKE DISRUPTS TRADE ACROSS COUNTRY	View
229	2026-08-17	INDIAN SHARES SET FOR MUTED START AS CRUDE REMAINS AT ELEVATED LEVELS	View
230	2026-08-17	ASIAN SHARES MARK TIME AS GULF WAR KEEPS OIL PRICES UP	View
231	2026-08-17	WALL STREET WEEK AHEAD: WITH FED MUM ON NEXT MOVE, INVESTORS LOOK TO EARNINGS	View
232	2026-08-17	MOST GULF BOURSES GAIN DESPITE STALLED IRAN TALKS	View
233	2026-08-17	FTSE 100 LOGS FIRST WEEKLY DROP IN FIVE AS MINERS RETREAT	View
234	2026-08-17	OIL HANGS ONTO GAINS AS US-IRAN PEACE TALKS STALL, HORMUZ SHIPPING SLOWS	View
235	2026-08-13	CUSTOMS PREVENTIVE OFFICER PENALISED FOR NEGLIGENCE IN GD CLEARANCE	View
236	2026-08-13	FBR REVISES WITHHOLDING TAX CARD FOR EXPORTS IN TY2027	View
237	2026-08-13	FBR UPDATES WITHHOLDING TAX RATES FOR GOODS AND SERVICES FOR TY2027	View
238	2026-08-13	FBR ISSUES WITHHOLDING TAX CARD FOR PROFIT ON DEBT FOR TY2027	View
239	2026-08-13	COTTON SPOT RATES	View
240	2026-08-13	INDIAN SHARES SET FOR MUTED START AS US RATE RELIEF MEETS MIDDLE EAST CAUTION	View
241	2026-08-13	ASIAN STOCKS RISE AS US INFLATION DATA DENTS SEPTEMBER FED HIKE BETS	View
242	2026-08-13	NIKKEI ENDS HIGHER ON CHIPMAKERSâ€™ BOOST AHEAD OF US DATA	View
243	2026-08-13	AI EARNINGS LIFT S&P 500, NASDAQ AS INFLATION DATA CALMS RATE-HIKE JITTERS	View
244	2026-08-13	CHINESE SHARES CLOSE HIGHER AS TECH LEADS	View
245	2026-08-13	SOUTH KOREA LEADS ASIAN STOCKS HIGHER	View
246	2026-08-12	FBR NOTIFIES DIVIDEND WITHHOLDING TAX RATES FOR TY2027	View
247	2026-08-12	FBR ISSUES WITHHOLDING TAX CARD FOR IMPORTS FOR TY2027	View
248	2026-08-12	SELECTIVE BUYING SEEN ON COTTON MARKET	View
249	2026-08-12	OIL, GOLD PRICES RISE AS GEOPOLITICAL TENSIONS MOUNT BEFORE CPI	View
250	2026-08-12	INDIAN SHARES MAY OPEN HIGHER, ELEVATED CRUDE PRICES TO WEIGH	View
251	2026-08-12	CHINA, HK SHARES SLIP AS HORMUZ REOPENING HOPES FADE	View
252	2026-08-12	EUROPEAN STOCKS PAUSE NEAR RECORD HIGHS	View
253	2026-08-12	WALL ST INCHES LOWER AS US-IRAN PEACE OPTIMISM FADES	View
254	2026-08-12	SINGAPORE STOCKS HIT RECORD HIGH	View
255	2026-08-12	BOTIM COLLABORATES WITH MASTERCARD	View
256	2026-08-12	JAZZWORLD TO OFFER DISCOUNT TO FPCCI MEMBER BODIES	View
257	2026-08-12	BYD FREEDOM FESTIVAL LAUNCHED	View
258	2026-08-12	10PEARLS ENTERS INTO STRATEGIC PARTNERSHIP WITH NOVACARE	View
259	2026-08-11	FBR DISMISSES CUSTOMS INSPECTOR OVER PROLONGED UNAUTHORISED ABSENCE	View
260	2026-08-11	PM SHEHBAZ DIRECTS FBR TO COMPLETE FACELESS SYSTEM ROLLOUT BY 2027	View
261	2026-08-11	PRICES FIRM AMID MODEST BUSINESS ACTIVITY	View
262	2026-08-11	BOP BOARD APPROVES UP TO RS30BN EQUITY INJECTION BY PUNJAB GOVT	View
263	2026-08-11	MEEZAN BANK SURPASSES RS3BN FINANCING UNDER GOVTâ€™S GHTA PROGRAMME	View
264	2026-08-11	FAYSAL BANK POSTS STRONG RESULTS FOR H1	View
265	2026-08-11	SBP PLANS NEW STRATEGY TO BOOST SME FINANCING	View
266	2026-08-11	â€˜OICCI MEMBERS INVESTED USD23BN OVER PAST DECADEâ€™	View
267	2026-08-11	KCCI CHIEF WARNS OF UNMITIGATED DAMAGE TO ECONOMY	View
268	2026-08-11	SBI RETURNS TO DOLLAR DEBT MARKET, BANKERS SEE STRONG DEMAND	View
269	2026-08-10	TAXABLE INCOME ABOVE RS10 MILLION FACES 10% SURCHARGE IN TY2027	View
270	2026-08-10	FBR SETS MONETARY PENALTIES FOR LATE TY 2026 TAX RETURN FILING	View
271	2026-08-10	EXCLUSIVE: FBR LAUNCHES LARGE-SCALE PROBE INTO FOREIGN TRANSACTIONS BY FUND MANAGERS, TRUSTS	View
272	2026-08-10	WEEKLY COTTON REVIEW: PRICES REMAIN LARGELY STABLE	View
273	2026-08-10	LATAM CURRENCIES ADVANCE AS WEAK US JOBS DATA WEIGHS ON DOLLAR	View
274	2026-08-10	HBL OPENS PRESTIGE LOUNGE IN SUKKUR	View
275	2026-08-10	PAKISTAN ENVOY SEEKS GREATER US INVESTMENT IN MINERALS, SURGICAL SECTOR	View
276	2026-08-09	BOJâ€™S ETF HOLDINGS MAY HELP FUND TAX CUT, LDP EXECUTIVE SAYS	View
277	2026-08-08	SENATE PANEL SEEKS FBR REPORT ON PTC, TOBACCO SECTOR AMID SEIZED CIGARETTE PROBE	View
278	2026-08-08	FBRâ€™S IRIS TAX RETURN FILING PORTAL GOES OFFLINE FOR SCHEDULED MAINTENANCE	View
279	2026-08-08	FBR ORDERS COMPULSORY RETIREMENT OF SENIOR AUDITOR OVER UNAUTHORISED FACTORY VISIT	View
280	2026-08-08	COTTON MARKET REMAINS STEADY	View
281	2026-08-08	H1 2026: MEEZAN BANK ANNOUNCES FINANCIAL RESULTS	View
282	2026-08-08	ICICI BANK, AXIS BANK TAP DOLLAR DEBT AGAIN IN LESS THAN TWO MONTHS, BANKERS SAY	View
283	2026-08-08	MARI ENERGIES REPORTS HIGHEST-EVER QUARTERLY EARNINGS	View
284	2026-08-08	1LINK WELCOMES NEW BOARD OF DIRECTORS	View
285	2026-08-08	PETROL PRICE CUT BY RS2.20, HSDâ€™S BY RS1.50	View
286	2026-08-07	FBR WARNS TAXPAYERS: TRADITIONAL PRACTICES, INFORMAL SHORTCUTS NO LONGER EFFECTIVE	View
287	2026-08-07	DAEWOO EXPRESS RAISES RS4BN IN THIRD SUKUK	View
288	2026-08-07	TRUMP SAYS CONGRESS WANTS TO REGULATE AI INDUSTRY 'OUT OF BUSINESS'	View
289	2026-08-07	TAKE-TWO STICKS TO ANNUAL BOOKINGS OUTLOOK, SAYS ON TRACK FOR 'GTA VI' NOVEMBER LAUNCH	View
290	2026-08-06	FBR MAKES PHYSICAL INSPECTION UNDERTAKING MANDATORY FOR CUSTOMS AUCTION BIDDERS	View
291	2026-08-06	FBR CLARIFIES PRINTING RULES FOR CONFECTIONERY	View
292	2026-08-06	PAKISTAN INCOME TAX FRAMEWORK: FBR DEFINES TAXATION YARDSTICK	View
293	2026-08-06	TAXPAYERS FACE UTILITY, SIM AND TRAVEL RESTRICTIONS FOR FAILURE TO FILE TAX RETURNS	View
294	2026-08-06	FBR SPECIFIES DOCUMENTS REQUIRED WITH TAX YEAR 2026 INCOME TAX RETURNS	View
295	2026-08-06	SECP CLEARS RS1.5BN CAPITAL INJECTION FOR HUGOBANK	View
296	2026-08-06	S&P 500, DOW AT RECORD HIGHS ON MIDEAST DEAL HOPES	View
297	2026-08-06	DUTCH ENVOY SEEKS STRONGER TRADE TIES WITH PAKISTAN	View
298	2026-08-06	OIL PRICES MIXED	View
299	2026-08-06	PETROL PRICE UP BY RS4.45, HSDâ€™S DOWN BY RS2	View
300	2026-08-05	FBR IMPOSES 10% WITHHOLDING TAX ON MARRIAGE FUNCTIONS FOR TY 2027	View
301	2026-08-05	ISLAMABAD CUSTOMS SEIZES 24 SMUGGLED LUXURY VEHICLES IN JULY 2026	View
302	2026-08-05	ONE YEAR ON, FBR YET TO ENFORCE SECTION 114C RESTRICTIONS	View
303	2026-08-05	FBR CHAIRMAN ASSURES BUSINESS COMMUNITY OF FASTER TAX REFORMS AND REFUNDS	View
304	2026-08-05	FBR ISSUES THREE STGOS TO EASE COMPLIANCE FOR IRON, STEEL SECTOR	View
305	2026-08-05	VOLUME OF BUSINESS SATISFACTORY ON COTTON MARKET	View
306	2026-08-05	HBL DECLARES H1â€™26 PROFIT BEFORE TAX OF RS73.1BN	View
307	2026-08-05	UBL BAGS SEVEN PRESTIGIOUS INTERNATIONAL AWARDS IN 2026	View
308	2026-08-05	SBP RAISES BORROWING LIMIT TO RS10 BILLION FOR UNRATED LARGE COMPANIES	View
309	2026-08-04	FBR WARNS TAXPAYERS AGAINST INCORRECT TAX YEAR 2026 RETURNS	View
310	2026-08-04	SMALL SHOPKEEPER TAX SCHEME RAISES CONCERNS OVER HIDDEN TAX AMNESTY	View
311	2026-08-04	FBR NOTIFIES DATE FOR PUBLISHING ACTIVE TAXPAYERS LIST 2026	View
312	2026-08-04	KCA INCREASES SPOT RATE BY RS300 TO RS18,500 PER MAUND	View
313	2026-08-04	HBL PMI: DOMESTIC DEMAND DRIVES STRONGEST MANUFACTURING EXPANSION IN 4 MONTHS	View
314	2026-08-04	INDIA'S NIFTY 50 SEEN OPENING LOWER AS NEW CLOSING AUCTION SPURS CAUTION	View
315	2026-08-04	PSMA SEEKS SUGAR EXPORT APPROVAL	View
316	2026-08-04	TASHKENT-KARACHI DIRECT FLIGHT OPERATIONS FROM SEPT 3	View
317	2026-08-04	OIL TICKS UP AFTER SELLOFF AS TALKS TO END US-IRAN WAR REMAIN UNCERTAIN	View
318	2026-08-04	OIL PRICES DROP 7PC TO THREE-WEEK LOW	View
319	2026-08-03	PAKISTAN CUSTOMS PUSHES AI-DRIVEN TRADE FACILITATION AT UNODC-WCO MEETING IN UZBEKISTAN	View
320	2026-08-03	WITHHOLDING TAX RATES ON PHONE USAGE NOTIFIED FOR TY 2027	View
321	2026-08-03	INCOME TAX RATES ON ELECTRICITY CONSUMPTION NOTIFIED FOR TY 2027	View
322	2026-08-03	FBR EXCEEDS JULY 2026 TARGET WITH OVER RS810 BILLION TAX COLLECTION	View
323	2026-08-03	FTSE 100 RECORDS BIGGEST MONTHLY RISE SINCE FEB	View
324	2026-08-03	TSX ENDS LOWER AS GOLD FALLS	View
325	2026-08-02	JAPAN BANK SMFGâ€™S Q1 PROFIT JUMPS 3PC ON ROBUST LOAN DEMAND	View
326	2026-08-02	HSBC TO SELL USD25BN AUSTRALIAN LOAN PORTFOLIO TO BLACKSTONE	View
327	2026-08-01	FBR FORMS THREE ICSCS TO REDUCE TAX LITIGATIONS	View
328	2026-08-01	INCOME TAX RATES ON GOODS, SERVICES AND CONTRACTS FOR TY 2027	View
329	2026-08-01	BOKâ€™S PERFORMANCE UNDER NFLP-II RECOGNISED	View
330	2026-08-01	WALL ST STRUGGLES FOR DIRECTION AS RATE UNCERTAINTY OFFSETS AMAZON JUMP	View
331	2026-08-01	CHINA TECH STOCKS RALLY ON AI REBOUND HOPES	View
332	2026-08-01	ASIAN STOCKS JUMP ON SEOUL, TAIPEI RALLY	View
333	2026-08-01	US BUSINESS DELEGATION VISITS LCCI	View
334	2026-08-01	OIL PRICE RISES	View
335	2026-08-01	PSX ENDS ON POSITIVE BUT SUBDUED NOTE	View
336	2026-07-31	FBR ANNOUNCES TRANSFER AND POSTING OF 80 IRS OFFICERS	View
337	2026-07-31	FBR INTRODUCES FIXED SALES TAX ON STEEL MANUFACTURERS BASED ON ELECTRICITY CONSUMPTION	View
338	2026-07-31	FIRST DG OF TAX POLICY OFFICE NAJEEB AHMAD MEMON RETIRES AFTER DISTINGUISHED IRS CAREER	View
339	2026-07-31	FBR NOTIFIES 5% WITHHOLDING TAX ON SOCIAL MEDIA INCOME FOR TAX YEAR 2027	View
340	2026-07-31	INCOME TAX RATES ON PAYMENTS TO NON-RESIDENTS FOR TAX YEAR 2027	View
341	2026-07-31	INDIAN CENTRAL BANK'S FX FORWARD BOOK SHRINKS SLIGHTLY TO $103.3 BILLION	View
342	2026-07-30	PAKISTAN TAX RATES ON E-COMMERCE DIGITAL PAYMENTS FOR TAX YEAR 2027	View
343	2026-07-30	FBR NOTIFIES TAX RATES ON SUKUK INVESTMENT RETURNS FOR TAX YEAR 2027	View
344	2026-07-30	PAKISTAN CUSTOMS REVISES IMPORT VALUES FOR MOBILE PHONE ACCESSORIES	View
345	2026-07-30	PM ORDERS STRICT ACTION AGAINST TAX EVADERS, INFORMAL ECONOMY OPERATORS	View
346	2026-07-30	PRA WARNS OF STRICT ACTION AGAINST BUSINESSES VIOLATING EIMS RULES	View
347	2026-07-30	HONDA KEEPS CITY PRICE BELOW RS5 MILLION TO AVOID 25% SALES TAX	View
348	2026-07-30	TAX RATES ON PROFIT ON DEBT NOTIFIED FOR TAX YEAR 2027	View
349	2026-07-30	DIVIDEND TAX RATES NOTIFIED FOR TAX YEAR 2027	View
350	2026-07-30	FBR NOTIFIES SUPER TAX RATES FOR TAX YEAR 2027	View
351	2026-07-30	NIKKEI HITS TWO-MONTH LOW AFTER CHIP ROUT	View
352	2026-07-30	CHINA STOCKS RISE AS AI SELL-OFF EASES	View
353	2026-07-30	EUROPEAN SHARES FALL AS MIXED LUXURY COMPANY EARNINGS WEIGH	View
354	2026-07-29	ERSTWHILE FATA/PATA: FBR ASKS BANKS TO DEDUCT WHT ON TRANSACTIONS, SPECIFIED PAYMENTS	View
355	2026-07-29	FBR ISSUES NOTIFICATIONS FOR â€˜INDEPENDENT CASE SCRUTINY PANELSâ€™	View
356	2026-07-29	FBR NOTIFIES CORPORATE TAX RATES FOR TAX YEAR 2027	View
357	2026-07-29	FBR ISSUES SALARY TAX RATES FOR TAX YEAR 2027	View
358	2026-07-29	FBR NOTIFIES TAX RATES FOR BUSINESS INDIVIDUALS, AOPS FOR TAX YEAR 2027	View
359	2026-07-29	FBR EXPLAINS PENALTIES FOR ISSUING TAX INVOICES FOR FAKE TRANSACTIONS FOR FY2027	View
360	2026-07-29	FBR SETS PENALTIES OF UP TO RS1 MILLION FOR FAILURE TO INTEGRATE BUSINESSES FOR FY2026-27	View
361	2026-07-29	BMP PROVIDES RELIEF OF RS762.76M	View
362	2026-07-29	S&P 500 INCHES HIGHER IN CHOPPY TRADING	View
363	2026-07-29	MERCEDES-BENZ WRITES OFF OVER 700M EUROS ON CHINA WOES	View
364	2026-07-28	PAKISTAN ENFORCES SPECIAL TAX PROCEDURE FOR SHOPKEEPERS	View
365	2026-07-28	FBR ROLLS OUT RULES FOR INDEPENDENT CASE SCRUTINY COMMITTEES	View
366	2026-07-28	FBR EXPLAINS TAXPAYER REGISTRATION AS INCOME TAX RETURN FILING 2026 BEGINS	View
367	2026-07-28	FBR EXPLAINS TAX REPAYMENT RULES FOR FY2026-27	View
368	2026-07-28	KP INTRODUCES 5% SALES TAX ON CRYPTOCURRENCY TRADING SERVICES	View
369	2026-07-28	CUSTOMER DATA FROM INDIA'S BANK OF BARODA LEAKED ONLINE, SOURCE AND RESEARCHER SAY	View
370	2026-07-28	INDIAN SHARES SEEN FLAT AS INVESTORS ASSESS IRAN-US PAUSE, EARNINGS AHEAD OF FED	View
371	2026-07-28	FPCCI, UBG ORGANISING FIRST PAKISTAN ECONOMIC SUMMIT FROM 29TH	View
372	2026-07-28	INTEREST RATE STATUS QUO DISAPPOINTS BUSINESS COMMUNITY	View
373	2026-07-27	BANK OFFICIALS TO FACE PENALTIES IN KP FOR OBSTRUCTING TAX RECOVERY	View
374	2026-07-27	PROVINCES TO RECEIVE RECORD RS8.63 TRILLION FROM DIVISIBLE TAX POOL IN FY2026-27	View
375	2026-07-27	FINANCE ADVISOR UNVEILS NEW TAX OPERATING MODEL TO MODERNISE TAX SYSTEM	View
376	2026-07-27	FBR NOTIFIES NATIONAL FACELESS JURISDICTION TO STREAMLINE TAX ADMINISTRATION	View
377	2026-07-27	AURANGZEB UNVEILS FRESH REFORMS TO MODERNISE FBR TAX ADMINISTRATION	View
378	2026-07-27	FBR EXPLAINS TAX RECOVERY FROM DECEASED PERSONâ€™S ESTATE AND BANKRUPT	View
379	2026-07-27	TAX FILERS CAN CLAIM 7.5% ADVANCE TAX EXEMPTION ON K ELECTRIC BILLS	View
380	2026-07-27	COTTON REVIEW: MARKET SEES SHARP WEEKLY PRICE SWINGS	View
381	2026-07-27	SHARES, BONDS MAKE GUARDED GAINS AS OIL SLIPS	View
382	2026-07-24	THESE FBR OFFICES TO REMAIN OPEN ON SATURDAY AND SUNDAY AMID RESTRUCTURING	View
383	2026-07-24	FBR TO DISCONTINUE GAS AND ELECTRICITY CONNECTIONS FOR THESE TIER-1 RETAILERS	View
384	2026-07-24	FTO ASKS FBR TO ADOPT SPECIAL PROTOCOL FOR ACTIONS DISRUPTING BUSINESSES	View
385	2026-07-24	KARACHI CONSUMERS PAY OVER RS26BN INCOME TAX THROUGH ELECTRICITY BILLS IN FY26	View
386	2026-07-24	DECLINING TREND CONTINUES ON COTTON MARKET	View
387	2026-07-24	CHINA STOCKS REVERSE LOSSES AS TECH SELLOFF EASES	View
388	2026-07-24	WALL ST FALLS AS TECH EARNINGS SPARK AI SPENDING WORRIES	View
389	2026-07-24	MOU SIGNED ON â€˜DUKAN HIFAZATâ€™ SCHEME	View
390	2026-07-24	NESTLÃ‰ PAKISTAN CONTINUES GROWTH MOMENTUM IN H12026	View
391	2026-07-22	COTTON MARKET REMAIN EASY WITH SATISFACTORY VOLUME	View
392	2026-07-22	NIKKEI RALLIES AFTER STEEP DECLINE	View
393	2026-07-22	CHINA SHARES REBOUND ON CHIPS, STAR50 INDEX SOARS MOST	View
394	2026-07-22	ASIAN STOCKS REBOUND AS AI EARNINGS LOOM, OIL EASES	View
395	2026-07-22	EUROPEAN SHARES GAIN AS TECH STRENGTH OFFSETS OIL JUMP	View
396	2026-07-22	WALL ST GAINS ON CHIP STOCKS RECOVERY	View
397	2026-07-22	GULF STOCKS GAIN AS INVESTORS WEIGH US-IRAN MEDIATION HOPES	View
398	2026-07-22	KATI CONCERNED OVER DAILY FUEL PRICE CHANGE DECISION	View
399	2026-07-21	PAKISTAN ISSUES NEW FED RATES ON AIR TRAVEL TICKETS FOR FY2026-27	View
400	2026-07-21	FBR ANNOUNCES FED RATES ON ADVERTISEMENTS FOR FY2026-27	View
401	2026-07-21	FBR IMPOSES FED OF RS16,500 PER KG ON E-CIGARETTE LIQUIDS	View
402	2026-07-21	FBR EXPANDS POWERS TO CONDUCT ELECTRONIC AUDITS UNDER UPDATED FEDERAL EXCISE ACT	View
403	2026-07-21	KCA INCREASES SPOT RATE BY RS300 TO RS18,600/MAUND	View
404	2026-07-21	CHINA STOCKS REBOUND ON STATE SUPPORT	View
405	2026-07-21	S&P 500, NASDAQ EDGE HIGHER AS CHIPS RECOVER	View
406	2026-07-21	PETROLEUM PRODUCTS: WAVE OF PROTESTS PUTS GOVTâ€™S DAILY PRICING POLICY IN JEOPARDY	View
407	2026-07-21	LCCI URGES BUSINESS-FRIENDLY FUEL CONSERVATION MEASURES	View
408	2026-07-21	SCCI, UBG OPPOSE IMPOSITION OF TAXES ON EX-FATA, PATA REGION	View
409	2026-07-21	OIL PRICES DIP AS MEDIATION EFFORTS OFFSET US-IRAN STRIKES	View
410	2026-07-21	ACTIVITIES OF KARACHI PORT TRUST, PORT QASIM	View
411	2026-07-20	UPDATED TAX LAWS OMIT FOOTNOTES ON REPLACED LEGAL PROVISIONS	View
412	2026-07-20	TRIBUNAL PROCEEDINGS: LTBA BODY FLAGS TAX MATTER	View
413	2026-07-20	PUNJAB INCREASES SALES TAX ON CONSULTANCY SERVICES TO 8%	View
414	2026-07-20	PUNJAB RAISES CONCESSIONARY TAX RATE TO 8% FOR HOTELS AND RESTAURANTS	View
415	2026-07-20	FBR INTRODUCES NEW SALES TAX EXEMPTIONS FOR FY2026-27	View
416	2026-07-20	PAKISTAN CUTS CORPORATE TAX RATE FOR BANKS TO 42% IN FY27	View
417	2026-07-20	INDIAN SHARES MAY OPEN A TAD LOWER ON MIDEAST CONCERNS; EARNINGS IN FOCUS	View
418	2026-07-20	ASIA SHARES SHAKY AS OIL CLIMBS, EARNINGS LOOM	View
419	2026-07-20	FTSE 100 RISES ON UTILITIES, ENERGY BOOST	View
420	2026-07-20	GULF BOURSES RETREAT AS US-IRAN HOSTILITIES INTENSIFY	View
421	2026-07-20	IT POWERS INDIAN SHARES TO WEEKLY GAINS	View
422	2026-07-20	WALL STREET WEEK AHEAD: ALPHABET, INTEL RESULTS IN FOCUS FOR AI TRADE AS US EARNINGS REV UP	View
423	2026-07-18	SCP RECOGNISED BY EUROMONEY AS â€˜PAKISTANâ€™S BEST MORTGAGE BANKâ€™	View
424	2026-07-18	JAPANâ€™S NIKKEI SLIDES INTO CORRECTION ZONE ON TECH SELLOFF, MIDDLE EAST CONFLICT	View
425	2026-07-18	WALL ST SLIDES AS CHIP SELLOFF BROADENS	View
426	2026-07-18	EUROPEAN SHARES DROP AS GLOBAL TECH SELLOFF, MIDDLE EAST CONFLICT WEIGH	View
427	2026-07-18	â€˜KARACHI SAFE CITY PROJECTâ€™ CRUCIAL FOR ECONOMIC STABILITY: PHMA	View
428	2026-07-18	PBF ANNOUNCES NEW OFFICE-BEARERS FOR FAISALABAD	View
429	2026-07-18	XI SAYS AI SHOULD NOT BE DOMINATED BY ONE COUNTRY	View
430	2026-07-18	OIL PRICES SURGE OVER 4PC	View
431	2026-07-18	POWER GENERATION DROPS 2.5PC IN JUNE	View
432	2026-07-17	DEUTSCHE BANK DECLARES PLS PROFIT RATES	View
433	2026-07-17	INDIAN SHARES SEEN OPENING FLAT AHEAD OF HEAVYWEIGHT EARNINGS	View
434	2026-07-17	STOCKS STUMBLE, OIL SET FOR WEEKLY GAIN ON RENEWED GULF HOSTILITIES	View
435	2026-07-17	NIKKEI DROPS NEARLY 3PC AS CHIP STOCKS SLIDE	View
436	2026-07-17	S&P 500, NASDAQ FALL AS CHIPS EXTEND LOSSES	View
437	2026-07-17	CHINA SHARES FALL ON REGIONAL CHIP ROUT	View
438	2026-07-17	SOUTH KOREAN STOCKS WEIGH ON ASIAN EQUITIES	View
439	2026-07-17	FOODPANDA GIVES HELP CENTRE FULL MARKS	View
440	2026-07-17	SOUTH AIR BEGINS FLIGHT OPERATIONS FROM JIAP ON TWO NEW ROUTES	View
441	2026-07-17	OIL RISES ON INTENSIFYING US-IRAN HOSTILITIES AND THREAT OF RED SEA CLOSURE	View
442	2026-07-16	SPOT RATE INCREASED BY RS200 TO RS 18,200 PER MAUND	View
443	2026-07-16	HBL UNVEILS HBL PAYPAK UNIONPAY CO-BADGE CARD	View
444	2026-07-16	ASIAN SHARES SLUMP ON CHIPMAKER DRAG, BONDS CHEER COOLER INFLATION	View
445	2026-07-16	INDIAN SHARES SEEN OPENING FLAT ON MIDEAST JITTERS	View
446	2026-07-16	NIKKEI ENDS HIGHER ON WALL STREET GAINS	View
447	2026-07-16	CHINA STOCKS CLOSE DOWN ON CHIP PROFIT-TAKING	View
448	2026-07-16	PSMA SEEKS PROMPT EXPORT OF SURPLUS SUGAR	View
449	2026-07-16	11TH COLOUR & CHEM EXPO 2026 BEGINS FROM 18TH	View
450	2026-07-16	LPG INDUSTRY DEMANDS CORRECTION IN OGRAâ€™S PRICING FORMULA	View
451	2026-07-16	KCCI, FIO AGREE TO STRENGTHEN INSTITUTIONAL COLLABORATION	View
452	2026-07-16	FLOUR MILLERS URGE WHEAT IMPORT PERMISSION TO AVOID SHORTAGE	View
453	2026-07-16	SOUTH AIR BEGINS DOMESTIC FLIGHT OPERATIONS	View
454	2026-07-16	OIL PRICES RISE FOR 4TH DAY AS US STRIKES ON IRAN RAISE FEARS OF WIDER CONFLICT	View
455	2026-07-16	OIL PRICES MAKE SMALL GAIN	View
456	2026-07-16	US NATGAS PRICES FALL TO 2-MONTH LOW	View
457	2026-07-15	OIL RISES AFTER US-IRAN HOSTILITIES FLARE AGAIN WITH STRIKES ON ENERGY TARGETS	View
458	2026-07-15	US NATGAS PRICES EASE ON RISING OUTPUT	View
459	2026-07-15	CHINAâ€™S JUNE OIL IMPORTS HIT NEAR 10-YEAR LOW	View
460	2026-07-15	COTTON SPOT RATES	View
461	2026-07-15	BOFA RIDES MARKET WHIPLASH TO TRADING RECORDS, DEAL ACTIVITY SHINES	View
462	2026-07-15	SK HYNIX SHARES SURGE 13% ON AI HOPES AS US TECH STOCKS RESUME THEIR CLIMB	View
463	2026-07-15	INDIAN SHARES SEEN MUTED AS US INFLATION RELIEF OFFSETS MIDEAST TENSIONS	View
464	2026-07-15	ASIAN STOCKS GAIN ON DROP IN US INFLATION RATE	View
465	2026-07-15	S&P 500 AND NASDAQ RISE AS BANK EARNINGS BUOY SENTIMENT	View
466	2026-07-15	PTCL CONFIRMS NADEEM KHAN AS CEO	View
467	2026-07-14	VOLUME OF BUSINESS IMPROVES ON COTTON MARKET	View
468	2026-07-14	COTTON EXCHANGE BUILDING CASE: KCA URGES IMMEDIATE COMPLIANCE WITH SHC ORDER	View
469	2026-07-14	ASIA MARKETS CHOPPY AS THREAT OF TRUMP HORMUZ LEVY SPOOKS TRADERS	View
470	2026-07-14	INDIAN SHARES SET TO OPEN LOWER AS MIDDLE EAST TENSIONS RAISE INFLATION WORRIES	View
471	2026-07-14	EUROPEAN SHARES SUBDUED AS OIL JUMPS AFTER US-IRAN TENSIONS	View
472	2026-07-14	GOVT URGED TO FORM JOINT TASK FORCE WITH BUSINESS COMMUNITY	View
473	2026-07-14	ENERGY STORAGE KEY TO PAKISTANâ€™S INDUSTRIAL FUTURE: EXPERTS	View
474	2026-07-14	OIL CLIMBS TO ONE-MONTH HIGH AS US, IRAN STEP UP ATTACKS IN STRAIT OF HORMUZ	View
475	2026-07-14	OIL UP 9% TO ONE-MONTH HIGH AS US SAYS IT WILL BLOCKADE ENTIRE IRANIAN COASTLINE, ALL VESSELS	View
476	2026-07-13	FBR EXEMPTS BULLETPROOF VEHICLE IMPORTS FROM SALES TAX	View
477	2026-07-13	PAKISTAN EXTENDS SALES TAX EXEMPTION ON AIRCRAFT IMPORTS TO ALL AIRLINES	View
478	2026-07-13	FTO ORDERS CTO KARACHI TO RESTORE BANK ACCOUNT IN SALES TAX REFUND CASE	View
479	2026-07-13	FBR EXPLAINS WHY IT USES 24.5% CORPORATE TAX BENCHMARK FOR TAX EXPENDITURE ESTIMATES	View
480	2026-07-13	FBR EXPLAINS WHY INDIVIDUAL TAX EXPENDITURE ESTIMATES CANNOT BE ADDED TOGETHER	View
481	2026-07-13	FBR EXPLAINS NEW ADJUSTMENT FACTORS FOR SALES TAX EXEMPT LOCAL SUPPLIES	View
482	2026-07-13	AGP FLAGS RS3.5 BILLION IN UNRECOVERED FBR PENALTIES, DEFAULT SURCHARGES	View
483	2026-07-13	FBR SLASHES REGULATORY DUTY ON IMPORTED CANDIES, SWEETS BY 50% IN FY2026-27	View
484	2026-07-13	WEEKLY COTTON REVIEW: MARKET MAINTAINS OVERALL PRICE STABILITY	View
485	2026-07-13	GHTA PROGRAMME: MEEZAN BANK ACHIEVES RS2BN IN DISBURSEMENTS	View
486	2026-07-13	WALL STREET WEEK AHEAD: INVESTORS TO GRAPPLE WITH PACKED WEEK OF EARNINGS, IRAN	View
487	2026-07-11	ATIR LAHORE SAYS SUPER TAX ADJUSTABLE AGAINST REFUNDS	View
488	2026-07-11	PUNJAB ROLLS OUT SIMPLIFIED DIGITAL TAX SYSTEM	View
489	2026-07-11	FTO GRANTS RELIEF TO WOMAN TAXPAYER	View
490	2026-07-11	LTO KARACHI TARGETS 174 TAXPAYERS IN FOREIGN ASSETS SCRUTINY DRIVE	View
491	2026-07-11	BAFL RAISES RS20BN IN LARGEST-EVER TFC ISSUANCE	View
492	2026-07-11	WALL STREET BANKS RULE ON STAFF BETTING ON PREDICTION MARKETS	View
493	2026-07-10	FBR DOUBLES NEV ADOPTION LEVY COLLECTION TARGET FOR FY2025-26	View
494	2026-07-10	FBR PROJECTS RS410BN CUSTOMS DUTY FROM PETROLEUM PRODUCTS IN FY2026-27	View
495	2026-07-09	FBR FAILED TO RECOVER RS3.1 BILLION TAX ON SALARY INCOME: AGP	View
496	2026-07-09	SPOT RATE INCREASED BY RS200 TO RS17,800 PER MAUND	View
497	2026-07-09	SOUTH KOREA STOCKS SLIDE INTO BEAR MARKET	View
498	2026-07-09	WALL ST FALLS AS TRUMPâ€™S IRAN REMARKS RATTLE INVESTORS	View
499	2026-07-09	MOST GULF MARKETS SLIP ON ME HOSTILITIES	View
500	2026-07-08	COURT-PROTECTED PERIOD: ATIR DB ISLAMABAD ANNULS SUPER TAX DEFAULT SURCHARGE	View

Date: 2026-09-26

Details: Written by Faisal Shahnawaz in Taxation New system will electronically identify discrepancies, notify taxpayers through IRIS and provide at least seven days to respond before further action. ISLAMABAD: The Federal Board of Revenue (FBR) has introduced an electronic scrutiny mechanism for sales tax returns, allowing the automated detection and communication of discrepancies to registered taxpayers before formal legal or penal proceedings are initiated. The FBR has issued SRO 1655(I)/2026, amending the Sales Tax Rules, 2006 through the insertion of a new Chapter XII-A, titled “Procedure for Electronic Scrutiny and Intimation of Issues Detected by the Computerized System”, after Rule 150H. Automated scrutiny of sales tax returns Under the newly inserted Rule 150HA, the chapter will apply to the automated scrutiny, analysis and cross-matching of sales tax returns and other available data relating to registered persons. The process will be conducted through the computerised system implemented by the FBR under Section 50B of the Sales Tax Act. The electronic mechanism is designed to identify factual or legal errors, discrepancies and other potential issues by analysing taxpayers’ sales tax information. FBR to notify taxpayers electronically Under Rule 150HB, the computerised system may issue an online advice or advance intimation through IRIS, identifying factual or legal mistakes and discrepancies detected during automated scrutiny. The advance intimation is intended to give registered persons an opportunity to explain the issue, rectify errors or take other corrective measures before any legal or penal proceedings are initiated. The same system-generated advance intimation may also be issued by the Officer of Inland Revenue having jurisdiction over the registered person. The electronic notice must specify a response period of at least seven days, during which the taxpayer may explain the discrepancy, correct the error or take another appropriate corrective measure. Reminder to taxpayers who fail to respond If a registered person does not respond within the prescribed period, the computerised system will issue a reminder. The reminder will provide a further period of not less than seven days for the taxpayer to respond to the discrepancies identified during the electronic scrutiny. The record of discrepancies detected and communicated to the registered person, together with any response received, will then be conveyed to the relevant Officer of Inland Revenue. Electronic record of scrutiny process The FBR has also prescribed that all electronic intimations issued to registered persons, responses received and actions taken will be recorded on a dashboard developed under the computerised system. The automated scrutiny, analysis and cross-matching of sales tax returns and other available information, as well as the identification and electronic communication of discrepancies, will be implemented through a Change Request Form (CRF). The CRF-based implementation is intended to support the smooth and efficient operation of the electronic scrutiny mechanism. Inland Revenue officers to review responses The Officer of Inland Revenue having jurisdiction over the registered person will be responsible for examining the taxpayer’s response to discrepancies identified electronically. Following the review, the officer may take appropriate action where required under the relevant provisions of the Sales Tax Act and the rules made thereunder. The new framework establishes a structured electronic process in which the FBR can identify potential errors in sales tax returns, notify taxpayers, allow them time to respond and maintain a record of the subsequent action before further proceedings are considered.

Date: 2026-09-26

Details: Written by Faisal Shahnawaz in Taxation, Top stories The new system will automate case selection, officer assignment and tax proceedings while reducing direct interaction between taxpayers and officials. The Federal Board of Revenue (FBR) has launched the National Faceless Centre (NFC) in Islamabad as part of a major reform aimed at changing the way tax audits and assessments are conducted across Pakistan. The initiative was approved during a meeting of the Board in Council on Friday. The new framework is designed to remove direct interaction between taxpayers and tax officers and shift tax proceedings towards a fully digital and automated process. Computer-Based Case Selection Under the previous system, taxpayers whose returns were selected for audit generally had to deal with a designated tax officer at a specific office. The new mechanism will replace this arrangement with a computerised, risk-based system for selecting cases. Once a case is selected, it will be automatically assigned to an officer, regardless of where that official is located in Pakistan. Taxpayers will not be informed about the identity of the officer handling their case, while officers will also have no influence over the cases assigned to them. Three-Level Review System The FBR has introduced multiple layers of oversight under the faceless model. One officer will conduct the audit, another will undertake the assessment, while a third official will review the proceedings for quality before a final order is issued. This structure is intended to prevent a single officer from handling a taxpayer’s case throughout the entire process. Digital Tax Proceedings Notices, taxpayer responses and hearings will be managed electronically through the FBR’s IRIS system. Physical verification or recovery activities, where legally required, will be undertaken separately by designated field teams. Legal Framework and Implementation The National Faceless Centre derives its legal authority from the Finance Act, 2026. It will operate under a Chief Commissioner Inland Revenue and include dedicated wings for faceless audits, assessments, quality control and field operations. The FBR has also established a Programme Management Unit to supervise implementation and coordinate the rollout of the new framework. According to the FBR, the reform is intended to promote consistent treatment of taxpayers, strengthen data-based decision-making and reduce concerns linked to direct contact between taxpayers and tax officials. The National Faceless Centre is expected to make tax proceedings more transparent, standardised and efficient for taxpayers across Pakistan.

Date: 2026-09-26

Details: Written by Faisal Shahnawaz in Taxation FBR extends the deadline for sales tax and Federal Excise Duty returns for August 2026 for DISCOs, K-Electric and other affected taxpayers. The Federal Board of Revenue (FBR) has extended the deadline for filing sales tax and Federal Excise Duty (FED) returns for August 2026 for power distribution companies and certain other taxpayers until September 30, 2026. In a notification issued on Friday, the FBR informed Chief Commissioners Inland Revenue, Large Taxpayers Offices (LTOs), Corporate Tax Offices (CTOs) and Regional Tax Offices (RTOs) about the extension. The tax authority said the decision was necessitated by technical issues encountered during the implementation of SRO 1245(I)/2026 dated July 31, 2026, particularly in the cases of distribution companies (DISCOs) and K-Electric. The FBR also cited system-linkage issues involving corporate entities covered under Sales Tax General Order (STGO) 10/2026 dated July 14, 2026. Return filing deadline extended to September 30 The FBR exercised its powers under Section 74 of the Sales Tax Act, 1990 and Section 43 of the Federal Excise Act, 2005 to extend the deadline for submitting sales tax and FED returns for the tax period of August 2026. Under the latest directive, affected taxpayers can file their returns by September 30, 2026. The extension covers DISCOs, K-Electric and taxpayers added to STGO 10/2026. Sales tax liability must be paid on time The FBR clarified that the relief applies specifically to the return filing deadline. Taxpayers seeking the benefit of the extension must have deposited their sales tax liability within the prescribed due date. The extension does not therefore alter the original deadline for payment of the applicable sales tax liability. Technical issues prompt FBR relief The FBR said the extension was granted to address technical difficulties affecting implementation of the revised requirements and system linkages. The problems were particularly relevant to power distribution companies and K-Electric following the implementation of the new requirements under SRO 1245(I)/2026. Corporate entities brought within the scope of STGO 10/2026 also faced system-linkage issues, prompting the tax authority to provide additional time for filing. The latest directive allows the affected power utilities and other covered taxpayers to complete their August 2026 return-filing obligations by September 30 without facing filing-related consequences arising from the cited technical difficulties.

Date: 2026-09-26

Details: Written by Hamza Shahnawaz in Taxation FBR has revised customs values for imported sodium sulphate anhydrous, replacing valuation rules that had been in force for more than a decade. The Federal Board of Revenue (FBR) has revised the customs valuation of sodium sulphate anhydrous, introducing new values after reviewing international prices, recent import trends and data from the preceding 90 days. Under Valuation Ruling No. 2107/2026, the Directorate General of Customs Valuation prescribed new customs values for the industrial chemical. The ruling supersedes Valuation Ruling No. 891/2016 dated July 27, 2016, read with Order-in-Revision No. 266/2016 dated November 21, 2016. FBR updates decade-old customs valuation The Directorate initiated the fresh valuation exercise after determining that the existing customs values had become more than 10 years old. A meeting with relevant stakeholders was held on September 18, 2026, where importers and other stakeholders presented their views and documentary evidence regarding prevailing market prices. Before the valuation exercise, notices were issued to relevant stakeholders, allowing them to submit invoices, contracts, price lists and other verifiable documents supporting their declared values. Importers told the Directorate that international prices of sodium sulphate anhydrous were higher than the values prescribed under the earlier ruling. They maintained that their declared transaction values reflected prevailing international market conditions. Stakeholders also requested that the revised valuation take into account import data from the preceding 90 days and current international price trends. Directorate reviews import and international price data The Directorate conducted a detailed analysis of import data for the preceding 90 days to determine prevailing transaction values and identify recent import trends. International price information presented by stakeholders was also examined alongside available import data and other relevant factors. The Directorate noted that sodium sulphate anhydrous is primarily an industrial product and is generally imported as a raw material for manufacturing processes. Accordingly, the valuation exercise considered factors including the product’s nature and end-use, international market prices, country of origin and available import data. Customs valuation methods examined sequentially The Directorate examined the valuation methods prescribed under Section 25 of the Customs Act, 1969 and applied them sequentially. The transaction value method under Section 25(1) was found unsuitable because sufficient information was not available regarding the adjustments required under Section 25(2) to establish an accurate transaction value. The identical goods method under Section 25(5) was also examined. However, available references could not be relied upon exclusively because adequate demonstrable evidence regarding quality, specifications and commercial or industrial quantities was unavailable. The similar goods method under Section 25(6) was considered as well, but the available references were deemed insufficient for sole reliance. A market enquiry under Section 25(7) found that the product, being industrial in nature, was not readily available in the domestic market. The computed value method under Section 25(8) was also examined but could not be applied because verifiable information concerning conversion costs and associated manufacturing expenses in the exporting country was unavailable. The Directorate therefore determined the revised customs values under Section 25(9) read with Section 25(6) of the Customs Act, 1969. New customs values for sodium sulphate anhydrous The revised customs values prescribed under Valuation Ruling No. 2107/2026 are as follows: Description PCT for WeBOC Origin Customs Value (C&F) Sodium Sulphate Anhydrous 2833.1100.1000 China US$0.67/kg Sodium Sulphate Anhydrous – Other Origins 2833.1100.1100 Other origins US$0.125/kg The Directorate clarified that if the actual transactional or invoice value retrieved from the relevant consignment is higher than the customs value prescribed under the ruling, assessment will be made on the higher value in accordance with Section 25(1) of the Customs Act, 1969. Such cases may also be referred to the Directorate General of Customs Valuation. For consignments imported by air, the difference between air freight and sea freight will be added when determining the assessable value. The ruling applies to the descriptions and specifications listed in the valuation table, while the HS codes have been provided for illustrative purposes. Importers given 30 days to file revision petitions The revised ruling will remain effective until it is rescinded or revised under Section 25A(4) of the Customs Act, 1969. Importers and other affected parties may file a revision petition under Section 25D within 30 days before the Director General, Directorate General of Customs Valuation, Karachi. Customs Collectorates have been directed to ensure strict implementation of the revised valuation ruling and immediately report any anomalies to the Directorate General. The revised framework is intended to provide updated valuation benchmarks for sodium sulphate anhydrous imports after more than a decade under the previous valuation regime.

Date: 2026-09-26

Details: Written by Faisal Shahnawaz in Taxation FBR has outlined the tax, reporting and withholding requirements for gains arising from offshore disposals involving assets linked to Pakistan. The Federal Board of Revenue (FBR) has explained the tax treatment of gains arising from the disposal or alienation outside Pakistan of certain assets connected with Pakistan during Tax Year 2027. The FBR’s Income Tax Ordinance, 2001, has been updated up to June 30, 2026, for the relevant tax year covering July 1, 2026 to June 30, 2027. Section 101A covers offshore asset disposals Under Section 101A of the Income Tax Ordinance, 2001, any gain arising from the disposal or alienation outside Pakistan of an asset located in Pakistan and owned by a non-resident company is treated as Pakistan-source income. The gain is chargeable to tax at the rate and in the manner specified under Section 101A(10). Rules for shares in non-resident companies Where the asset being disposed of is a share or interest in a non-resident company, it is treated as being located in Pakistan when two conditions are satisfied. First, the share or interest must derive, directly or indirectly, its value wholly or principally from assets located in Pakistan. Second, shares or interests representing 10% or more of the share capital of the non-resident company must be disposed of or alienated. When assets are considered principally located in Pakistan A share or interest is considered to derive its value principally from assets located in Pakistan when, on the last day of the tax year preceding the date of transfer, the value of those assets: • exceeds Rs100 million; and • represents at least 50% of the value of all assets owned by the non-resident company. The value of the assets is determined according to their fair market value in the prescribed manner. The provision applies notwithstanding Section 68, while the fair market value is determined without reducing liabilities. Tax treatment where assets are partly in Pakistan Where only some of the assets of a non-resident company are located in Pakistan, the income arising from the offshore disposal of a share or interest in that company is treated as arising from assets located in Pakistan to the extent reasonably attributable to those assets. The determination is to be made in the prescribed manner. Resident companies face reporting obligations Section 101A also establishes reporting requirements for a resident company where the value of an asset of a non-resident company derives, directly or indirectly, wholly or principally from assets located in Pakistan. Where the relevant Pakistani assets are held directly or indirectly through a resident company, that company must furnish the prescribed information, documents and statement to the Commissioner for determining the gain and tax payable. The information must generally be submitted within 60 days of the non-resident company disposing of or alienating the asset. However, the Commissioner may issue a written notice requiring the resident company to provide the information, documents or statement within a shorter period. Acquirer required to deduct tax Under Section 101A(8), the person acquiring the asset from the non-resident person is required to deduct tax from the gross consideration paid for the asset. The tax is to be deducted at 10% of the fair market value of the asset. The deducted amount must be paid to the Commissioner for credit to the Federal Government through remittance to the Government Treasury or by deposit with an authorised branch of the State Bank of Pakistan or the National Bank of Pakistan. The payment must be made within 15 days of the payment to the non-resident. Resident company must collect advance tax The resident company covered by Section 101A(7) is required to collect advance tax from the non-resident company within 30 days of the disposal or alienation transaction. The amount of advance tax is calculated under Section 101A(10). Where tax has already been deducted and paid by the acquirer under Section 101A(8), that amount is treated as tax collected and paid under Section 101A(9). The resident company is allowed a tax credit for the amount already deducted when determining the tax payable under Section 101A(10). Tax calculated using two alternatives Section 101A(10) provides that the tax to be collected is the higher of two amounts: • 20% of A, where A represents the fair market value of the asset minus its cost of acquisition; or • 10% of the fair market value of the asset. The mechanism therefore establishes a minimum tax amount based on the fair market value of the asset. No further tax on specified gains Where tax has been paid under Section 101A(8) or Section 101A(9), the non-resident company is not required to pay further tax on the gain under Section 22(8) or capital gains under Sections 37 or 37A. Other applicable provisions take priority Section 101A(12) provides that where a gain is taxable under this section as well as under another provision of the Income Tax Ordinance, 2001, the gain is taxed under the other applicable provision. The provisions of Section 101A therefore establish a specific framework for offshore disposals involving assets or interests that derive their value wholly or principally from assets located in Pakistan. The framework covers the circumstances in which such gains become Pakistan-source income, as well as reporting, withholding and advance-tax obligations for the parties involved.

Date: 2026-09-26

Details: Written by Faisal Shahnawaz in Taxation Section 101 of the Income Tax Ordinance defines when salary, business, dividends, royalties, property income and other earnings are treated as Pakistan-source income. ISLAMABAD: Taxpayers can determine whether income is treated as Pakistan-source or foreign-source income during Tax Year 2027 under Section 101 of the Income Tax Ordinance, 2001. The Federal Board of Revenue (FBR) has published the Income Tax Ordinance, 2001, amended up to June 30, 2026, for the current tax framework. FBR’s official website lists the June 30, 2026 version of the ordinance. Tax Year 2027 covers the 12-month period ending June 30, 2027, under the normal tax-year system. Section 101 sets out the geographical basis for determining whether different categories of income arise from sources in Pakistan. Salary Income Salary is treated as Pakistan-source income to the extent that it is received for employment exercised in Pakistan, regardless of where the salary is paid. Salary is also Pakistan-source income when it is paid by, or on behalf of, the Federal Government, a Provincial Government or a Local Government in Pakistan, regardless of where the employment is exercised. Business Income of Resident Persons Business income derived by a resident person is Pakistan-source income to the extent that it arises from a business carried on in Pakistan. This provision establishes the geographical connection between a resident taxpayer’s business activity and Pakistan for source-of-income purposes. Business Income of Non-Residents For a non-resident person, business income is treated as Pakistan-source income to the extent that it is directly or indirectly attributable to a permanent establishment in Pakistan. The provision also covers income attributable to: • Sales in Pakistan of goods or merchandise of the same or similar kind as those sold by the non-resident through its permanent establishment in Pakistan. • Other business activities carried on in Pakistan that are of the same or similar kind to activities conducted by the non-resident through its permanent establishment. • A business connection in Pakistan. • Certain imports forming part of an overall arrangement involving the supply of goods, installation, construction, assembly, commissioning, guarantees or supervisory activities. The import provision can apply regardless of whether title to the goods passes outside Pakistan and whether the goods are imported in the name of the non-resident, its associate or another person. FBR also clarifies that where income is subject to tax under Sections 5A, 5AA, 6, 7 or 7A, it is not chargeable to tax under the head of income from business. Significant Economic Presence Section 101 also incorporates significant economic presence when determining a business connection in Pakistan. A significant economic presence of a non-resident may arise through transactions involving goods, services or property with a person in Pakistan, including the provision or downloading of data or software in Pakistan, where the aggregate payments exceed the prescribed threshold. It may also arise where a non-resident systematically and continuously solicits business activities or engages with users in Pakistan through digital means beyond the prescribed threshold. The provision applies irrespective of whether: • the agreement relating to the transactions or activities is signed in Pakistan; • the non-resident maintains a residence or place of business in Pakistan; or • the non-resident renders services in Pakistan. Only the portion of income attributable to the relevant transactions or activities is treated as arising from the business connection in Pakistan. Independent Services Where a non-resident’s business involves providing independent services, including professional services and the services of entertainers or sports persons, Pakistan-source business income includes remuneration paid by a resident person. It also includes remuneration borne by a permanent establishment in Pakistan of a non-resident. These amounts are in addition to income treated as Pakistan-source under the provisions dealing with non-resident business income. Gains From Business Assets Any gain arising from the disposal of an asset or property used to derive business income covered by Section 101(2), 101(3) or 101(4) is treated as Pakistan-source income. Dividends Dividend income is considered Pakistan-source income where it is: • paid by a resident company; or • a dividend covered by sub-clause (f) of clause (19) of Section 2. FBR also identifies dividends paid by resident companies among the common categories of Pakistan-source income. Profit on Debt Profit on debt is Pakistan-source income if it is paid by a resident person. An exception applies where the profit is payable in respect of debt used for a business carried on by the resident outside Pakistan through a permanent establishment. Profit on debt is also Pakistan-source income where it is borne by a permanent establishment in Pakistan of a non-resident person. Royalties Royalty income is treated as Pakistan-source income where it is paid by a resident person, subject to the exception concerning rights, property, information or services used for a business carried on by the resident outside Pakistan through a permanent establishment. A royalty is also Pakistan-source income where it is borne by a permanent establishment in Pakistan of a non-resident person. Rental Income From Immovable Property Rental income is Pakistan-source income where it arises from the lease of immovable property situated in Pakistan, whether the property is improved or unimproved. The provision also covers other interests in or over immovable property, including a right to explore for or exploit natural resources in Pakistan. Any gain from the disposal of such property or rights is also Pakistan-source income. The rule extends to gains from the disposal of shares in a company whose assets consist wholly or principally, directly or indirectly, of such property or rights. Pension and Annuity A pension or annuity is Pakistan-source income if it is paid by a resident person or borne by a permanent establishment in Pakistan of a non-resident person. Technical Fees A technical fee is Pakistan-source income when it is paid by a resident person, except where the fee relates to services utilised in a business carried on by the resident outside Pakistan through a permanent establishment. Technical fees are also Pakistan-source income when they are borne by a permanent establishment in Pakistan of a non-resident person. Offshore Digital Services Fees for offshore digital services are Pakistan-source income where they are paid by a resident person, subject to the exception for services utilised in a business carried on by the resident outside Pakistan through a permanent establishment. Such fees are also Pakistan-source income when borne by a permanent establishment in Pakistan of a non-resident person. Gains on Shares of Resident Companies Any gain arising from the disposal of shares in a resident company is treated as Pakistan-source income. Insurance and Reinsurance Premiums Any amount paid by an insurance company as an insurance or reinsurance premium to an overseas insurance or reinsurance company is deemed to be Pakistan-source income. Other Amounts Section 101 also contains a general rule for income not covered by the preceding provisions. Any such amount is treated as Pakistan-source income if it is paid by a resident person or borne by a permanent establishment in Pakistan of a non-resident person. Priority of Source Rules Where an amount may fall within both the provisions dealing with non-resident business income under Section 101(3) and another sub-section, other than Section 101(14), the other applicable provision is considered first. If the amount is not Pakistan-source income under that provision, it is then examined to determine whether it qualifies as Pakistan-source income under Section 101(3). Foreign-Source Income Section 101(16) provides that an amount is treated as foreign-source income to the extent that it does not constitute Pakistan-source income. The FBR’s guidance similarly describes foreign-source income as income that is not Pakistan-source income. Source of Income Rules for Tax Year 2027 Section 101 provides the geographical framework for determining the source of income for Pakistan’s income tax system. The rules cover a broad range of income, including salary, business profits, independent services, dividends, profit on debt, royalties, rental income, pensions, technical fees, offshore digital services, insurance premiums and gains from property or shares. For Tax Year 2027, the distinction between Pakistan-source and foreign-source income remains particularly relevant for residents and non-residents with cross-border business, digital transactions, investments, employment or property interests.

Date: 2026-09-26

Details: Written by Faisal Shahnawaz in Taxation FBR clarifies how tax liabilities are handled when an association of persons changes, dissolves or when a business is transferred to another person. ISLAMABAD: The Federal Board of Revenue (FBR) has explained the tax liabilities arising in certain circumstances under the Income Tax Ordinance, 2001, covering changes in the constitution of an association of persons (AOP), discontinuance or dissolution of an AOP, and succession to a business or profession other than on the death of the predecessor. The provisions are contained in Sections 98A, 98B and 98C of the Income Tax Ordinance, 2001, updated up to June 30, 2026. Section 98A: Change in Constitution of AOP Under Section 98A, where the constitution of an association of persons changes during a tax year, the AOP as constituted at the time of filing the tax return is responsible for filing the return for that tax year. However, the income of the AOP is apportioned among the members who were entitled to receive it. Where tax assessed on a member cannot be recovered from that member, the outstanding amount may be recovered from the AOP as constituted at the time the return was filed. The provision therefore establishes continuity of tax filing responsibility despite changes in the membership or constitution of an AOP during the tax year. Section 98B: Discontinuance or Dissolution of AOP Section 98B deals with the tax consequences where a business or profession carried on by an AOP is discontinued or the association is dissolved. Subject to Section 117, the provisions of the Income Tax Ordinance continue to apply, as far as possible, as though the discontinuance or dissolution had not taken place. Every person who was a member of the AOP at the time of its discontinuance or dissolution is jointly and severally liable for the tax payable by the association. This means the tax liability of the dissolved or discontinued AOP can continue to be enforced against its members. The legal representative of a member who has died is also liable in accordance with the applicable provisions of the law. Section 98C: Succession to Business or Profession Section 98C establishes the tax treatment where a person carrying on a business or profession is succeeded by another person during a tax year, except where the succession results from the predecessor’s death. Where the successor continues the same business or profession, the predecessor remains liable for tax on income earned from the business or profession up to the date of succession during that tax year. The predecessor also remains liable for tax relating to the tax year or years preceding the year in which succession takes place. The successor, meanwhile, is liable for tax on income earned from the business or profession after the date of succession during the relevant tax year. Tax Liability Where Predecessor Cannot Be Found The law also provides a specific mechanism where the predecessor cannot be found. In such circumstances, the successor assumes responsibility for the tax liability relating to the tax year in which the succession occurred up to the date of succession, as well as the tax year or years preceding that year. The successor is liable in the same manner and to the same extent as the predecessor would have been liable, with the relevant provisions of the Income Tax Ordinance applying accordingly. Recovery of Unpaid Tax Section 98C also addresses the recovery of unpaid tax. Where tax payable in respect of the business or profession cannot be recovered from the predecessor, the outstanding amount may be recovered from the successor. However, the successor is entitled to recover the amount paid from the predecessor. The provision therefore creates a mechanism to protect tax recovery where a business changes hands and the original taxpayer is unable to meet the outstanding liability. Tax Liability Continues After Business Changes Sections 98A, 98B and 98C provide specific rules for maintaining tax liability when the structure or ownership of a business changes. The provisions cover changes in AOP membership, discontinuance or dissolution of an AOP, and succession to a business or profession. They also clarify which person or persons remain responsible for tax relating to income earned before and after a change, as well as the circumstances in which unpaid tax can be recovered from another liable person. The provisions are intended to ensure that changes in business structure, ownership or constitution do not by themselves prevent the assessment and recovery of tax legally due under the Income Tax Ordinance, 2001.

Date: 2026-09-26

Details: Written by Faisal Shahnawaz in Taxation The Federal Tax Ombudsman has directed FBR field formations to verify taxpayer details, premises and authorisation before sealing any business. KARACHI: The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to ensure that its field formations exercise the power to seal taxpayers’ business premises strictly in accordance with the law and prescribed procedures. The direction came while disposing of a review petition concerning the sealing of a business premises in Karachi under an order issued against a different taxpayer. The FTO’s latest decisions list includes a review matter relating to complaint No. 12151/KHI/IT/2026, underscoring the forum’s continuing role in addressing complaints of tax maladministration. Business premises sealed against wrong taxpayer The matter concerned Shop No. G-67, Ground Floor, Saima Paari Mall, Hyderi, Karachi, which had been sealed under an order dated May 5, 2026. According to the record, the order was issued against M/s Beejays Pret, NTN 2348594-9. However, the premises actually sealed belonged to M/s Beejays Fabrics, NTN 4782283-3, a separate registered taxpayer. The FTO consequently held that the sealing action had been carried out without lawful authority and constituted maladministration. The FTO’s mandate includes investigating and redressing maladministration by tax functionaries, including actions that are contrary to law, rules or established procedures. FTO orders de-sealing of premises Following its original findings issued on August 4, 2026, the FTO had recommended that the concerned Commissioner Inland Revenue, Regional Tax Office-I (RTO-I) Karachi, immediately de-seal the business premises. The Chief Commissioner Inland Revenue, Corporate Tax Office (CTO) Karachi, was also directed to conduct an inquiry into how an order issued against one taxpayer had been executed against another and submit a compliance report within 30 days. The FTO noted that its use of the word “immediately” was deliberate because continued closure of an operating business could have serious consequences. The forum’s complaint system provides for recommendations to rectify maladministration and monitors compliance with those recommendations. Department files review petition The Department subsequently filed a review petition on September 2, 2026, relying substantially on factual circumstances that had already been considered during the original proceedings. These included an alleged common trade name, family relationship, social media representation and the status of the business premises in the complainant’s registration profile. The review petition was heard on September 23 and 24, 2026. During the hearing, the concerned Commissioner-IR informed the FTO that the business premises had now been de-sealed. The complainant confirmed that the grievance concerning the sealing had been resolved and stated that he no longer wished to pursue his compensation claim. FTO says sealing powers must be used carefully With the premises restored, the FTO said no further relief was required regarding the individual grievance. However, the forum stressed that the underlying issue was not merely a technical discrepancy. It noted that the May 5 sealing order had been issued against a different registered taxpayer, while the coercive action was carried out against premises belonging to a person with a separate NTN. The FTO reiterated that a statutory power carrying serious civil consequences must be exercised only against the taxpayer and premises lawfully covered by the relevant authorisation. The forum also noted that sealing a business can physically interrupt commercial operations and affect employees, customers, business commitments and a taxpayer’s ability to earn a livelihood. It therefore advised the concerned Commissioner to exercise the utmost care when resorting to the power to seal business premises. FTO withdraws inquiry recommendation The FTO took note of the fact that the premises were eventually de-sealed after the matter was brought to the Commissioner’s attention. As the complainant also decided not to pursue compensation, the forum concluded that the immediate grievance had been redressed. The FTO therefore decided that it was unnecessary to determine or award compensation. It also decided that its earlier recommendation for an inquiry to fix responsibility on the officers or officials involved in executing the sealing action need not be pursued. The recommendation for the inquiry was consequently withdrawn. However, the FTO made clear that the withdrawal did not amount to approval of the original sealing action, which it had already found to have been undertaken without lawful authority. FBR directed to verify taxpayer details The FTO recommended that FBR issue necessary instructions to all concerned field formations to ensure that the statutory power to seal business premises is exercised strictly within the applicable law, rules and prescribed procedures. Before executing a sealing order, officers should ensure that the taxpayer or person named in the authorisation, NTN/STRN or other relevant taxpayer identifier, premises proposed to be sealed and jurisdiction of the authority correspond with the authorisation and applicable law. The forum said the highest degree of care and responsibility should be observed before any sealing order is executed. With the premises de-sealed and the compensation claim no longer being pursued, the FTO said the immediate grievance stood redressed. The review petition was accordingly disposed of, with the earlier order of August 4, 2026 modified in light of the subsequent developments. The FTO’s official decisions portal publishes its latest decisions and provides complaint numbers for taxpayers seeking information about individual cases.

Date: 2026-09-25

Details: Written by Faisal Shahnawaz in Taxation FBR directs LTOs, CTOs and RTOs to observe September 26 as a normal working day ahead of the Tax Year 2026 filing deadline. ISLAMABAD, September 25, 2026: The Federal Board of Revenue (FBR) has decided to keep its Inland Revenue offices open on Saturday, September 26, 2026, as part of efforts to maximise tax collection during the first quarter of fiscal year 2026-27. In an official communication, the FBR directed Chief Commissioners Inland Revenue of Large Taxpayer Offices (LTOs), Corporate Tax Offices (CTOs) and Regional Tax Offices (RTOs) to observe Saturday as a normal working day. The decision comes as the tax authority seeks to strengthen revenue collection during the final days of the first quarter of FY2026-27. FBR keeps tax offices open on Saturday The additional working day is expected to provide taxpayers and businesses with an opportunity to complete outstanding tax-related transactions ahead of the end of September. The FBR is also monitoring revenue receipts as the first quarter of the current financial year draws to a close, with September marking the final month of the quarter. The move comes amid the ongoing International Monetary Fund (IMF) programme. Pakistan’s 37-month Extended Fund Facility (EFF) was approved in September 2024, while the IMF’s published programme schedule includes a fourth review in September 2026. Tax Year 2026 return deadline The opening of FBR offices on September 26 also comes just days before the September 30, 2026 deadline for filing income tax returns for Tax Year 2026. The FBR’s official tax calendar states that individuals and associations of persons are required to file income tax returns on or before September 30, while companies generally have a December 31 deadline. Companies with a special tax year also have a September 30 deadline. The tax authority has separately reminded taxpayers to file their income tax returns before September 30. Additional day for tax payments The Saturday opening will allow taxpayers to address pending matters and make payments before the quarterly revenue assessment. For the FBR, the additional working day provides further time to process tax-related transactions before the first quarter closes on September 30. The decision is therefore aimed at facilitating taxpayers while supporting revenue collection during a period when the tax authority is closely monitoring receipts. FBR revenue collection efforts The FBR has continued to focus on broadening the tax base and strengthening revenue mobilisation under the government’s wider fiscal reform programme. Revenue mobilisation is also among the policy priorities identified under Pakistan’s IMF-supported EFF programme. The IMF has said the programme includes measures aimed at strengthening public finances and broadening the tax base. With September 30 approaching, the FBR’s decision to operate selected Inland Revenue offices on Saturday is intended to provide an additional working day for taxpayers and facilitate collection before the close of the first quarter of FY2026-27.

Date: 2026-09-25

Details: Written by Hamza Shahnawaz in Taxation New customs values aim to ensure uniform assessment of duties and taxes and protect government revenue. KARACHI: The Directorate General of Customs Valuation, Karachi, has determined new customs values for imported empty glass bottles to ensure uniform assessment of duties and taxes and safeguard government revenue. The decision was issued through Valuation Ruling No. 2106/2026, dated September 22, 2026, under Section 25A of the Customs Act, 1969. The ruling will remain applicable until it is rescinded or revised in accordance with the law. According to the ruling, the Directorate observed that empty glass bottles were being assessed at comparatively lower values. It subsequently initiated proceedings to determine appropriate customs values and invited importers and other stakeholders to provide relevant documentation, including invoices, import records and other supporting evidence. Meetings with stakeholders were held on August 4 and September 8, 2026. Participants were asked to submit sales tax invoices and verified export documents from the countries of purchase. However, the stakeholders did not provide the requested documents, according to the ruling. The Directorate also reviewed import data covering the preceding 90 days and examined supporting import documents to determine prevailing price trends. In addition, a market survey was conducted under the prescribed procedure, with findings indicating that prices of the relevant products were higher in local markets. The ruling sets the customs value of empty glass bottles used for perfumes and cosmetics at $1.15 per kilogram (C&F). The applicable HS code is 7010.9000, with proposed PCT 7010.9000.1000, and the value applies to all origins. For other empty glass bottles, the customs value has been fixed at $0.97 per kilogram (C&F) under HS code 7010.9000 and proposed PCT 7010.9000.1100, also covering all origins. Pharmaceutical-grade empty glass bottles have been excluded from the ruling. Customs Collectorates may assess such products under Section 25 of the Customs Act, 1969. The Directorate clarified that where the declared or invoice value is higher than the customs value prescribed in the ruling, assessment will be made on the higher declared value in accordance with the Customs Act. The Collectorates of Customs have been directed to ensure implementation of the ruling across relevant jurisdictions.

Date: 2026-09-25

Details: Written by Faisal Shahnawaz in Taxation FBR explains how tax liabilities, estate income and pending proceedings are handled after the death of an individual under Section 87. ISLAMABAD: The Federal Board of Revenue (FBR) has outlined the procedure for determining the income tax liability of a deceased individual and their estate during Tax Year 2027. The FBR has issued the Income Tax Ordinance, 2001, updated up to June 30, 2026, and explained the relevant provisions under Section 87, which deals with the tax obligations and proceedings involving deceased individuals. Tax Liability of a Deceased Individual Under Section 87, the legal representative of a deceased individual is liable for any tax that the individual would have been required to pay had they not died. The legal representative is also responsible for tax payable in respect of income earned by the deceased person’s estate. However, the liability of the legal representative is limited to the extent that the deceased person’s estate is capable of meeting the tax liability. The law further provides that any tax liability under the Income Tax Ordinance, 2001, constitutes the first charge on the deceased person’s estate. This means that outstanding income tax liabilities have a priority claim against the estate before the remaining assets are distributed, subject to the applicable legal provisions. Tax Proceedings Continue After Death Section 87 also establishes how income tax proceedings are handled following the death of an individual. Any proceedings initiated against the deceased under the Income Tax Ordinance before their death are treated as proceedings against the legal representative. Such proceedings may continue against the legal representative from the stage they had reached on the date of the individual’s death. Similarly, proceedings that could have been initiated against the deceased had they survived may be initiated against the legal representative. The provision therefore ensures that the death of a taxpayer does not automatically bring existing or potential tax proceedings to an end. Who Is a Legal Representative? For the purposes of the Income Tax Ordinance, a legal representative means a person who legally represents the estate of a deceased individual. The definition also includes a person who intermeddles with the estate of the deceased. Where a person brings or faces legal proceedings in a representative capacity, the definition can also cover the person upon whom the estate devolves following the death of the party who initiated or was subject to the proceedings. Tax Obligations Remain After Death The provisions under Section 87 establish that the death of an individual does not extinguish outstanding income tax liabilities. Instead, responsibility for the deceased person’s tax obligations, including applicable proceedings and tax relating to estate income, passes to the legal representative, subject to the value and capacity of the deceased’s estate to meet those liabilities. The rules provide a framework for dealing with the tax affairs of deceased individuals and their estates during Tax Year 2027, ensuring that outstanding tax obligations continue to be addressed after death.

Date: 2026-09-25

Details: Written by Faisal Shahnawaz in Taxation FBR explains the residency rules for individuals, companies and associations of persons under Sections 81 to 84 of the Income Tax Ordinance, 2001. ISLAMABAD: The Federal Board of Revenue (FBR) has clarified the criteria for determining whether an individual, company or association of persons (AOP) is treated as a resident for tax purposes during Tax Year 2027. The FBR has issued the Income Tax Ordinance, 2001, updated up to June 30, 2026, setting out the provisions governing resident and non-resident persons under Sections 81 to 84. For individuals, the 183-day presence test is a key factor in determining tax residency, although the law also provides additional conditions under which a person may qualify as a resident. Resident and Non-Resident Persons Under Section 81, a person is treated as a resident person for a tax year if they qualify as a resident individual, resident company or resident association of persons for that year. The Federal Government is also treated as a resident person under the provision. A person is considered a non-resident for a tax year if they do not qualify as a resident for that year. 183-Day Rule for Resident Individuals Section 82 sets out the conditions under which an individual is regarded as a resident individual for a tax year. An individual is treated as a resident if they are present in Pakistan for 183 days or more during the tax year. The 183 days do not necessarily have to be consecutive, as periods of presence can collectively reach the required threshold. The law also provides additional circumstances in which an individual may qualify as a resident. An individual is treated as a resident if they are an employee or official of the Federal Government or a Provincial Government posted abroad during the tax year. Pakistani Citizens and Tax Residency The Income Tax Ordinance also contains specific provisions concerning Pakistani citizens. A Pakistani citizen is treated as a resident individual if they are not present in any other country for more than 182 days during the tax year. A Pakistani citizen may also qualify as a resident if they are not a resident taxpayer of any other country. This means that the 183-day presence test is not the only factor relevant to determining an individual’s tax residency status. When Is a Company a Resident? Under Section 83, a company is treated as a resident company for a tax year if it is incorporated or formed under any law in force in Pakistan. A company can also qualify as a resident where the control and management of its affairs are situated wholly in Pakistan at any time during the tax year. The provision also treats a Provincial Government or Local Government in Pakistan as a resident company for the relevant tax purposes. Residency Rules for Associations of Persons Section 84 deals with the tax residency of an association of persons. An AOP is considered a resident association of persons for a tax year if the control and management of its affairs are situated wholly or partly in Pakistan at any time during that year. The residency test for an AOP therefore focuses on where its control and management are situated rather than applying the individual 183-day test. Key Tax Residency Rules for 2027 The FBR’s provisions establish separate residency tests for individuals, companies and associations of persons under the Income Tax Ordinance, 2001. For individuals, 183 days or more of presence in Pakistan during the tax year is a key test, while government employment abroad and specific rules concerning Pakistani citizens can also affect residency status. For companies, incorporation in Pakistan or the location of control and management can determine residency, while an AOP is treated as resident where its control and management are wholly or partly situated in Pakistan. These rules are relevant for determining how the Income Tax Ordinance applies to taxpayers during Tax Year 2027.

Date: 2026-09-25

Details: Written by Faisal Shahnawaz in Taxation Section 80 of the Income Tax Ordinance, 2001 sets out the individuals, companies, associations, governments and legal arrangements treated as persons for income tax purposes. ISLAMABAD: The Federal Board of Revenue (FBR) has clarified the definition of a “person” for income tax purposes for Tax Year 2027 under the Income Tax Ordinance, 2001. According to the Income Tax Ordinance, 2001, updated up to June 30, 2026, Section 80 sets out the categories of persons recognised for income tax purposes. The provision covers individuals, companies, associations of persons (AOPs), governments and certain other legal entities and arrangements. Individuals, Companies and Governments Under Section 80(1), the term “person” includes an individual, a company or association of persons incorporated, formed, organised or established in Pakistan or elsewhere. It also includes: • An individual; • A company or association of persons (AOP) incorporated, formed, organised or established in Pakistan or elsewhere; and • The Federal Government, a foreign government, a political sub-division of a foreign government, or a public international organisation. The section further provides specific definitions for the terms used to determine which entities fall within the scope of a person for income tax purposes. Association of Persons Section 80(2)(a) provides that an association of persons includes a firm, Hindu undivided family, artificial juridical person, limited liability partnership and any body of persons formed under foreign law. However, a company is excluded from the definition of an association of persons. The provision therefore distinguishes between companies and other collective arrangements that may be treated as AOPs for tax purposes. What Constitutes a Company The definition of a company under the Income Tax Ordinance extends beyond entities incorporated under the Companies Act, 2017. It includes: • A company as defined under the Companies Act, 2017; • A body corporate formed by or under any law in force in Pakistan; • A modaraba; • A body incorporated under the law of a country outside Pakistan relating to the incorporation of companies; • A co-operative society, finance society or any other society; • A non-profit organisation; • A trust, entity or body of persons established or constituted under any law in force; • A foreign association, whether incorporated or not, that the FBR has declared to be a company through a general or special order; • A Provincial Government; • A Local Government in Pakistan; and • A Small Company as defined under Section 2 of the Income Tax Ordinance. This broad definition brings various corporate, governmental, non-profit and other legal structures within the scope of the term “company” for income tax purposes. Definition of Firm Section 80 also defines a firm as the relationship between persons who have agreed to share the profits of a business carried on by all of them, or by any one or more of them acting for all. The definition covers business arrangements in which two or more persons jointly participate in a business and agree to share its profits. Trust and Unit Trust The Ordinance defines a trust as an obligation attached to the ownership of property that arises from confidence placed in and accepted by the owner, or declared and accepted by the owner, for the benefit of another person or the owner and another person. The definition expressly includes a unit trust. A unit trust is defined as a trust in which beneficial interests are divided into units, with beneficiaries’ entitlement to income or capital determined according to the number of units they hold. Scope of ‘Person’ for Tax Year 2027 Through Section 80, the Income Tax Ordinance, 2001 establishes a broad framework for identifying the individuals, businesses, organisations, governments and legal arrangements that are treated as persons for income tax purposes. The definition is significant because determining whether an individual or entity falls within the scope of “person” is fundamental to the application of various provisions of the Income Tax Ordinance for Tax Year 2027.

Date: 2026-09-23

Details: Written by Faisal Shahnawaz in Taxation Pakistan Single Window users can now complete mandatory biometric verification remotely through NADRAâ€™s PakID Mobile App. ISLAMABAD: The Pakistan Single Window (PSW) has integrated its platform with the National Database and Registration Authorityâ€™s (NADRA) PakID Mobile App, allowing users to complete mandatory biometric verification remotely for PSW subscription, renewal and profile updates. The integration removes the need for users to physically visit a NADRA e-Sahulat Centre to complete the biometric verification process. According to a PSW news release, users can now verify their biometrics through their smartphones via the PakID Mobile App, subject to applicable NADRA verification requirements. Major facilitation for overseas Pakistanis The new facility is expected to provide particular convenience to overseas Pakistanis involved in trade-related activities in Pakistan. Eligible overseas users can complete their PSW biometric verification remotely through the PakID Mobile App, reducing the need for physical visits and making access to trade-related services easier from abroad. Previously, users were required to visit a NADRA e-Sahulat Centre to fulfil the biometric verification requirement. The new digital option effectively removes this physical step from the PSW subscription process. Both verification options available temporarily To ensure a smooth transition and uninterrupted facilitation for the business community, PSW said both verification channels would remain available during an interim period. During the transition, users will have the option to either complete biometric verification digitally through the PakID Mobile App or continue visiting NADRA e-Sahulat Centres. Syed Aftab Haider, CEO of PSW, said the integration reflected the organisationâ€™s efforts to respond to the requirements of its user community in Pakistan and abroad. â€œThe integration with NADRAâ€™s PakID Mobile App reflects our commitment to listening to the PSW community both in Pakistan and overseas and responding to their needs,â€ he said. â€œBy enabling remote biometric verification, we are removing another physical trip in the onboarding process and making the PSW user journey more convenient, accessible, and user-driven.â€ PSW moves towards fully digital onboarding According to PSW, the integration with the PakID App eliminates the only physical visit previously required for PSW subscription, enabling the onboarding process to be completed digitally. The development is part of PSWâ€™s continued efforts to expand digital solutions and make its services more accessible and responsive to businesses and individuals involved in Pakistanâ€™s international trade. The remote verification facility is also expected to address practical challenges faced by overseas Pakistanis and other users who previously had to arrange an in-person visit to complete the biometric requirement. By linking PSW with NADRAâ€™s digital identity infrastructure, the new facility further strengthens the platformâ€™s drive towards a more streamlined and user-friendly trade facilitation system.

Date: 2026-09-23

Details: Written by Faisal Shahnawaz in Taxation, Top stories Senate panel examines alleged tax evasion, illicit tobacco manufacturing and cigarette theft while seeking fresh FBR and FIA reports. ISLAMABAD: The Senate Standing Committee on Interior and Narcotics Control has reviewed a sub-committee report concerning an estimated $1 billion in annual revenue losses allegedly linked to tax evasion, illicit manufacturing and trade irregularities in Pakistanâ€™s tobacco sector. The committee, chaired by Senator Faisal Saleem Rehman, met at Parliament Lodges on September 22, 2026. Senators Talha Mahmood, Saifullah Abro, Shahadat Awan, Mir Dostan Khan Domki, Umer Farooq, Jam Saifullah Khan, Palwasha Khan and Dilawar Khan attended the meeting. The committee examined a detailed report submitted by Senator Saifullah Abro covering tax evasion in the tobacco sector, manufacturing activity in tax-exempt areas including the former FATA and PATA regions, and the theft of 2,828 cartons of cigarettes from Federal Board of Revenue (FBR) warehouses. The $1 billion figure has featured in previous Senate proceedings, with the committee continuing to investigate the scale and sources of the alleged revenue leakage. In June, an FBR official reportedly estimated the tobacco-sector tax loss at around Rs40 billion, considerably below the $1 billion figure cited in earlier government discussions. Senate questions cigarette theft investigation The committee scrutinised the Federal Investigation Agencyâ€™s (FIA) inquiry into the theft of 2,828 cigarette cartons and the subsequent registration of a first information report (FIR). Members expressed dissatisfaction over the nomination of lower-ranking officials in the FIR and called for responsibility to be fixed at the appropriate level. The FIA was directed to provide the committee with an update on the progress of its investigation. The cigarette theft case has been under parliamentary scrutiny for several months. Earlier Senate proceedings established that the cartons had been stolen from FBR warehouses in Swabi and Mardan, while the FIA was subsequently directed to expand its investigation. Concerns over tax-exempt areas The committee also examined tax exemptions and manufacturing activities in the former FATA and PATA areas. Members questioned the enforcement process across what they described as a Rs1,120 billion tax-exempt zone, particularly where administrative notices and legal proceedings were directed towards lower-level personnel while questions remained concerning the responsibility of factory owners and principal beneficiaries. Senator Talha Mahmood raised concerns over alleged procedural weaknesses during the initial registration of cases. He pointed to instances where individuals identified during preliminary inquiries were reportedly not included in subsequent charges. The committee also examined the movement and use of raw materials imported into tax-exempt areas. Earlier Senate proceedings had raised similar concerns over whether goods imported under exemptions were being diverted for consumption elsewhere, prompting calls for stronger monitoring by the FBR and enforcement agencies. FBR warehouse controls questioned The committeeâ€™s review of FBR warehouse procedures also highlighted alleged weaknesses in the management of confiscated goods. Members raised concerns over the absence or unavailability of CCTV surveillance, inventory registers and verified handover records for seized contraband. The committee called for stronger controls to ensure that confiscated goods are properly recorded, secured and accounted for throughout the enforcement process. FIA, FBR asked to coordinate The committee examined the respective jurisdictions of the FIA and FBR, particularly concerning independent FIA inquiries into matters falling within the tax authorityâ€™s domain. It directed the two institutions to establish a coordinated operational mechanism to avoid jurisdictional gaps and strengthen enforcement. The committee also reviewed notifications granting the Frontier Corps and Pakistan Rangers anti-smuggling powers in border areas of the former FATA and PATA regions. Officials from the Interior Ministry explained that such operational powers had been delegated in response to the complex law-and-order situation in those areas. The committee decided to continue its investigation into tax evasion and revenue losses and agreed to constitute a further sub-committee to examine the matter in greater detail. Passport rules for overseas Pakistanis The committee also received a briefing from the Ministry of Interior on Rule 18 of the Passport Rules, 2021, concerning the issuance of Emergency Travel Documents (ETDs) for the one-way repatriation of stranded or deported Pakistani citizens. Chairman Faisal Saleem Rehman questioned delays in verifying nationality and family-tree records involving Pakistani missions abroad and the Intelligence Bureau. The committee also discussed complaints that Pakistani diplomatic missions sometimes issue short-term passports with validity of one to three years instead of the standard five-year period. The chairman informed members that he had introduced a legislative bill in the Senate aimed at reforming passport rules and simplifying procedures for overseas Pakistanis. FBR, FIA given one-month deadline At the conclusion of the meeting, the chairman directed the FBR and FIA to submit comprehensive inquiry reports within one month. The institutions were also directed to provide verified physical stock registers covering seized goods held in warehouses. The committee stressed that future enforcement proceedings should focus on the principal beneficiaries and factory owners, rather than concentrating primarily on field-level personnel. The latest proceedings add to months of parliamentary scrutiny of tobacco-sector taxation, smuggling, tax-exempt manufacturing areas and the theft of confiscated cigarettes. The Senate has previously directed the FBR to improve monitoring of tax-exempt areas and strengthen procedures for the storage and management of seized goods.

Date: 2026-09-23

Details: Written by Hamza Shahnawaz in Taxation FBR Chairman Rashid Mahmood Langrial has directed officials to address taxpayer concerns and improve tax administration during a meeting with the Tax Bar Association in Lahore. Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial met a delegation of the Tax Bar Association, led by its President Rana Saqib Munir, at the Large Taxpayers Office (LTO), Lahore, as part of an initiative being undertaken in line with the directives of the Prime Minister. The meeting focused on facilitating taxpayers and tax practitioners by ensuring timely resolution of their issues and improving the efficiency of tax administration. The meeting was attended by the Member (Inland Revenue Operations), senior FBR officers and representatives of the Tax Bar Association. Income Tax, Sales Tax Issues Discussed During the meeting, participants discussed matters relating to income tax returns, sales tax and tax filing and administration procedures. The FBR chairman assured the delegation of the boardâ€™s continued support and directed the relevant officers to address the issues raised in accordance with the law and applicable procedures. Langrial also agreed to a proposal for establishing a PRAL liaison office in Lahore. The proposed office is intended to facilitate taxpayers and tax practitioners and provide support in resolving technical and administrative issues. FBR Reviews Jurisdiction and Case Transfers The chairman also took note of concerns relating to the jurisdiction and transfer of cases between RTO-I and RTO-II. He directed the relevant officers to examine the issues and take steps towards their resolution in accordance with applicable rules and procedures. The meeting also covered suggestions concerning the Small Traders Scheme and measures aimed at enhancing income tax revenue. Focus on Tax Filing System The FBR chairman appreciated the constructive suggestions put forward by the Tax Bar Association and tasked concerned officials with addressing technical issues in the FBR system on a priority basis. The objective is to ensure a smoother and more efficient tax filing process for taxpayers and tax practitioners. Langrial reiterated FBRâ€™s commitment to continued engagement with stakeholders, saying their practical feedback would be given due consideration in efforts to improve tax administration, facilitate compliant taxpayers and strengthen the overall tax system.

Date: 2026-09-23

Details: Written by Faisal Shahnawaz in Taxation The Sindh Revenue Board has conducted its fourth computerised prize draw for verified POS invoices, offering 95 prizes to customers. KARACHI: The Sindh Revenue Board (SRB) held its fourth computerised prize ballot draw for verified point-of-sale (POS) invoices on Tuesday, September 22, 2026, offering 95 prizes to customers who verified their invoices through the SRB system. The draw was attended by tax consultants, advisers and representatives of the press and media. SRB Chairman Dr Wasif Ali Memon presided over the ceremony, where officials also gave a detailed presentation on the prize scheme and measures adopted to ensure transparency in the ballot process. The prizes included two cars â€” one 1600cc and another 1300cc â€” as well as motorcycles, televisions, refrigerators, tablets, mobile phones, smart watches and cash prizes. More than 217,000 invoices entered into fourth draw According to the SRB, a total of 217,525 verified invoices were entered into the fourth computerised draw. The invoices covered the period from April 8, 2026, to September 21, 2026. The number of invoices included in the latest draw was significantly higher than in the previous three rounds. The first draw included 3,260 verified invoices, followed by 8,734 in the second draw and 90,937 in the third draw. The sharp rise in verified invoices indicates increased participation in the SRBâ€™s POS invoice verification and incentive scheme. SRB encourages real-time invoice verification The SRB introduced the prize scheme by integrating the POS invoicing systems of businesses providing retail services with its computerised system. The initiative covers businesses including restaurants, beauty parlours and gyms, allowing invoices to be reported to the SRB in real time. Customers can verify the authenticity of their invoices by scanning the QR code or entering the SRB invoice number through the eSRB app or the SRB website. Once an invoice has been successfully verified through the SRB system, it is automatically entered into the computerised prize ballot. Prize scheme aims to improve tax compliance The SRB said the POS system and its incentive-based prize scheme were expected to encourage customers to demand POS-integrated invoices when obtaining taxable retail services. Customers are also encouraged to verify the authenticity of their invoices according to the prescribed procedure. According to the SRB, the mechanism will help customers verify the amount of tax paid in a more transparent manner while encouraging businesses and consumers to participate in the formal tax system. The revenue authority said the initiative would contribute to improving tax compliance and promoting a stronger tax culture in Sindh. The fourth draw forms part of the SRBâ€™s broader effort to use digital invoicing, real-time reporting and customer participation to strengthen transparency in the collection and verification of Sindh sales tax on services.

Date: 2026-09-23

Details: Written by Hamza Shahnawaz in Taxation FBR clarifies rules for normal, special and transitional tax years and explains how taxpayers can apply to change their tax year. ISLAMABAD: The Federal Board of Revenue (FBR) has explained the rules governing the normal tax year and special tax year for determining income tax and tax liability for Tax Year 2027. The FBR has issued the updated Income Tax Ordinance, 2001, incorporating amendments up to June 30, 2026, and explained the provisions of Section 74, which establishes the framework for determining a taxpayerâ€™s tax year. Normal tax year Under Section 74, the normal tax year is a period of 12 months ending on June 30. It is denoted by the calendar year in which June 30 falls. Accordingly, a tax year ending on June 30, 2027, is denoted by the calendar year 2027 and is referred to as Tax Year 2027. Special tax year The law also provides for a special tax year where a personâ€™s income year under the repealed Income Tax Ordinance was different from the normal tax year. A taxpayer who has been allowed, through an order under Section 74, to use a 12-month period other than the normal tax year may also use that period as the personâ€™s special tax year. The special tax year is generally denoted by the calendar year relevant to the normal tax year in which the closing date of the special tax year falls. FBR powers regarding tax years Section 74(2A) empowers the FBR to change the applicable tax year for a class of persons through a notification published in the official Gazette. For a class of persons using a special tax year, the Board may permit the use of the normal tax year. Similarly, for a class of persons using the normal tax year, the Board may permit the use of a special tax year. Taxpayers can apply for a special tax year An individual or entity may apply in writing to the Commissioner Inland Revenue for permission to use a 12-month period other than the normal tax year. The Commissioner may approve the application, subject to the relevant provisions, where the taxpayer demonstrates a compelling need to use a special tax year. A person already using a special tax year may likewise apply to the Commissioner to switch back to the normal tax year. The Commissioner may impose conditions while granting permission under either provision. Opportunity of being heard The law requires the Commissioner to provide the applicant with an opportunity of being heard before making an order under Section 74. If an application is rejected, the Commissioner must record the reasons for rejection in the order. The Commissioner may also withdraw previously granted permission after providing the concerned person with an opportunity of being heard. Transitional tax year Where a taxpayerâ€™s tax year changes following an order under Section 74, the period between the end of the last tax year before the change and the commencement of the new tax year is treated as a separate tax year. This period is known as the â€œtransitional tax yearâ€. The provision ensures that the period created by a change in the tax year is properly accounted for under the Income Tax Ordinance, 2001. Financial year reference The FBR has further clarified that a reference to a particular financial year in the Income Tax Ordinance, 2001 will, unless the context requires otherwise, include a special tax year or transitional tax year commencing during that financial year. Taxpayers have right to review A person dissatisfied with an order made under Section 74(3), 74(4) or 74(7) may file a review application with the FBR. The decision of the Board on such a review application will be final. The provisions of Section 74 therefore establish a framework for normal, special and transitional tax years, while setting out the procedures and conditions applicable when taxpayers seek to change their tax year.

Date: 2026-09-23

Details: Written by Hamza Shahnawaz in Taxation FBR explains how fair market values for property, assets, services and benefits will be determined for income tax purposes in Tax Year 2027. ISLAMABAD: The Federal Board of Revenue (FBR) has outlined the mechanism for determining the fair market value (FMV) of property, assets, services, benefits and perquisites for income tax purposes in Tax Year 2027. The FBR has issued the updated Income Tax Ordinance, 2001, incorporating amendments up to June 30, 2026, and explained the provisions of Section 68, which establishes the framework for determining fair market value. Definition of fair market value Under Section 68, the fair market value of any property, rent, asset, service, benefit or perquisite at a particular time is the price that the item would ordinarily fetch if sold or supplied in the open market at that time. The law requires fair market value to be determined without taking into account any restriction on the transfer of the property or asset. It also does not depend on whether the item is otherwise convertible into cash. Where the ordinary price of an item, other than immovable property, cannot be readily ascertained, the Commissioner may determine its fair market value. FBR empowered to determine property values Section 68 also empowers the FBR to determine the fair market value of immovable property in specified areas. The Board may, from time to time, issue a notification in the official Gazette specifying the fair market value of immovable property for an area or areas. Where the FBR has not notified a fair market value for an area, the value of the immovable property will be deemed to be the value determined by the District Officer (Revenue), provincial authority or any other authority authorised to determine values for stamp duty purposes. Minimum valuation for immovable property The law further establishes a minimum valuation requirement for certain transactions and tax calculations involving immovable property. For immovable property, the following values cannot be lower than the fair market value determined under Section 68(4) or Section 68(5): â€¢ Component A of the formula prescribed under Section 37(2); â€¢ â€œConsideration receivedâ€ referred to in Division X of Part IV of the First Schedule; â€¢ â€œValue of immovable propertyâ€ referred to in Division XVIII of Part IV of the First Schedule; and â€¢ Valuation undertaken for the purposes of Section 111. The provision ensures that values used for these specified tax purposes do not fall below the applicable fair market value determined under the law. FBR clarifies auction price rule The FBR has also clarified the treatment of cases where the notified or otherwise determined fair market value differs from an auction price. For the purposes specified under Section 68, where the fair market value determined under sub-section (4) or (5) differs from the auction price, the higher of the two values will be applicable. The FBR has further clarified that fair market values determined under these provisions are intended solely for carrying out the purposes of the Income Tax Ordinance, 2001. The mechanism under Section 68 therefore provides taxpayers and tax authorities with a statutory framework for determining property and other values relevant to income tax calculations for Tax Year 2027.

Date: 2026-09-23

Details: Written by Hamza Shahnawaz in Taxation FBR clarifies how income from jointly owned property and shared deductions should be treated for tax purposes in Tax Year 2027. ISLAMABAD: The Federal Board of Revenue (FBR) has clarified the tax treatment of income earned by joint owners during Tax Year 2027 under the Income Tax Ordinance, 2001. The FBR has issued an updated version of the Income Tax Ordinance, 2001, incorporating amendments up to June 30, 2026. The updated law provides guidance on determining taxable income where property is jointly owned by two or more persons. Tax treatment of jointly owned property Under Section 66 of the Income Tax Ordinance, 2001, where property is owned by two or more persons and their respective shares are definite and ascertainable, the owners will not be assessed as an association of persons (AOP) in respect of that property. Instead, each joint ownerâ€™s share of income derived from the property during a tax year will be taken into account when calculating that individualâ€™s taxable income for the relevant year. The provision establishes the tax treatment of jointly owned property where the ownership proportions of the respective parties can be clearly determined. However, Section 66 specifically does not apply when calculating income chargeable under the head â€œIncome from Businessâ€. Business income is therefore subject to the applicable provisions governing taxation under that head. FBR explains apportionment of deductions The FBR has also outlined rules governing the apportionment of expenditures, deductions and allowances under Section 67 of the Income Tax Ordinance, 2001. Under the provision, where an expenditure, deduction or allowance relates to the derivation of income under more than one head of income, the amount must be apportioned on a reasonable basis. The same principle applies where expenditure relates to the derivation of income comprising taxable income and any class of income to which sub-sections (4) and (5) of Section 4 apply. Similarly, where an expenditure, deduction or allowance relates partly to income chargeable to tax under a particular head of income and partly to another purpose, the amount must be appropriately apportioned. Section 67 requires such apportionment to take into account the relative nature and size of the activities to which the expenditure, deduction or allowance relates. Rules for allocating tax deductions The FBR is also empowered under Section 237 to make rules for determining how expenditures, deductions and allowances should be apportioned. These provisions provide a framework for determining taxable income where expenses or deductions cannot be directly attributed to a single source or category of income. For Tax Year 2027, taxpayers with jointly owned property or income involving multiple sources or purposes are required to apply the relevant provisions when calculating their taxable income under the Income Tax Ordinance, 2001. The clarification is particularly relevant to taxpayers who receive income from jointly owned property, as the law requires each ownerâ€™s ascertainable share to be considered separately rather than treating the joint ownership as an AOP, subject to the specific exclusion relating to business income.

Date: 2026-09-22

Details: Written by Faisal Shahnawaz in Taxation FBR has replaced manual asset declarations with an online system requiring BS-17 and above officers to disclose income, assets and liabilities. The Federal Board of Revenue (FBR) has directed all officers in BS-17 and above to submit their income, assets and liabilities declarations through a dedicated online portal, replacing the existing manual process. FBR sets October 30 deadline for declarations According to an FBR circular issued on September 21, 2026, the directive follows an Office Memorandum issued by the Establishment Division on September 16 concerning the digitisation of asset declarations under Section 15-A of the Civil Servants Act, 1973. All officers belonging to the Inland Revenue Service (IRS), Pakistan Customs Service (PCS) and Ex-Cadre groups in BS-17 and above who are serving under the administrative control of FBR have been directed to submit their Declaration of Assets and Liabilities for the year ended June 30, 2026, by October 30, 2026. The digitised system is being implemented by the Establishment Division in collaboration with FBR for the submission, verification and publication of income and asset declarations of civil servants in BS-17 and above. How officers can submit asset declarations online Under the new system, officers must provide their name, designation, personal email address, mobile number and CNIC to their respective Cadre Administrator so that an account can be created on the FBR portal. The email address must be personal and should not be changed because of an official posting. Once the Cadre Administrator forwards the required information to FBR and the account is created, the officer will receive an intimation through email, SMS or another designated channel. Officers can then activate their accounts by entering their CNIC on the portalâ€™s login screen and selecting the â€œForgot Passwordâ€ option to receive a one-time password (OTP). The OTP will allow the officer to create a personal password and access the online declaration section. After logging in, officers will find a â€œDeclarationâ€ field on the portal dashboard. They must provide the required information through the relevant screens before submitting the declaration. FBR will conduct risk-based checks on the information submitted and communicate the results to the relevant Cadre Administrator. Personal and income information required The digitised declaration will cover extensive personal, service and financial information. Officers will be required to provide details including: â€¢ Name and CNIC â€¢ NTN, where available â€¢ Occupational group or service â€¢ Basic pay scale â€¢ Ministry or division â€¢ Position held â€¢ Date of joining service â€¢ Marital status â€¢ Number of dependants â€¢ Permanent and current residential addresses â€¢ Mobile number and email address â€¢ Details of spouse and dependants The income section will require officers to disclose their sources of income, as well as the income of their spouses and dependants. The system will also require details of expenditure, including utility bills, private foreign travel, childrenâ€™s education, club memberships and other expenses. Assets, liabilities and net worth The online declaration will require comprehensive details of both immovable and movable assets. For agricultural, residential and commercial properties, officers will have to provide ownership details, locations or addresses, acquisition dates and values. The system will also cover: â€¢ Local and foreign bank accounts â€¢ Investments and securities â€¢ Shares â€¢ Prize bonds â€¢ Mutual funds â€¢ Vehicles â€¢ Precious possessions â€¢ Assets held as an attorney Officers will also have to disclose their liabilities, including departmental liabilities, bank loans, mortgages, overdrafts, private loans, credit liabilities and other outstanding obligations. For each loan or liability, information will be required on its purpose, the amount paid during the year and the outstanding balance. The system will further require officers to declare their net worth and explain any variation between the current yearâ€™s net worth and the previous yearâ€™s figure. Selected asset information to be published The Establishment Division said selected non-sensitive portions of officersâ€™ asset declarations would be published on the FBR website for public information. Officers will be able to review the information proposed for publication on the portal before submitting their declarations. The memorandum stressed that officers must ensure the information submitted is accurate and complete. Any misstatement, concealment or failure to submit the declaration may result in disciplinary action under the applicable rules. Corrections allowed until November 30 Declarations must be submitted within the prescribed deadline. However, officers will be able to make corrections to information submitted through the portal until November 30, 2026, subject to approval or authorisation by the relevant Cadre Administrator. After submission, the declaration will appear in the portalâ€™s â€œSubmitted Tasksâ€ section. Officers must disclose social media accounts The digitised system will also require officers to disclose their social media accounts and any foreign nationality or permanent residency (PR), where applicable. Officers may also be required to provide any other information specified through the online portal. The Establishment Division said technical or other problems encountered during the submission process should be reported to the relevant Cadre Administrator, who may coordinate with the designated FBR focal person. The move marks a significant transition from manual declarations to a centralised digital system for recording, verifying and selectively publishing income and asset declarations submitted by senior civil servants.

Date: 2026-09-22

Details: Published September 22, 2026 Updated about 3 hours ago By Reuters NEW YORK: The main US stock indexes advanced on Monday, powered by gains in AI firms, as Treasury yields eased and crude prices tumbled more than 3 percent to hit an 11-day low on the prospect of a breakthrough in Middle East talks at a UN meeting this week. Investors took comfort from data that suggested spending on AI was still expanding, placating concerns around doomsday warnings from the leaders of AI giants a week ago that triggered a global tech selloff. Chip companies rallied. Intel rose 13 percent, Advanced Micro Devices surged 9.3 percent to become the latest chipmaker to reach USD1 trillion in market valuation, while Micron gained 2.3 percent. Meta soared 6.7 percent to a more than seven-month high after brokerage Wells Fargo hiked its price target on the stock, while Accenture gained 3.2 percent after partnering with Anthropic to invest USD2 billion in AI evaluation. â€œThe excitement in the build-out and adoption of AI has really driven a lot of the growth in corporate profits and a lot of the gains in the stock market over the past few years,â€ said Chris Zaccarelli, chief investment officer for Northlight Asset Management. â€œIs there going to be a trade-off between safety and productivity benefits? That argument is going to continue for many months to come, if not many years.â€ While Washington and Tehran continued to exchange new threats through the weekend, US President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected at the UN General Assembly in New York this week. A fall in oil prices eased the pressure on equities as the 10-year US bond yield slipped below the critical 5 percent mark. Airlines such as American and Delta, typically sensitive to energy prices,rose marginally. Still, investors were wary of the interest-rate outlook after a recent pickup in inflation prompted the US Federal Reserve to raise rates for the first time in three years. Markets see a 50 percent chance of another hike next month, CMEâ€™s FedWatch showed. Commentary from at least 10 central bank policymakers is due this week. Chicago Fed President Austan Goolsbee said there was â€œno ambiguityâ€ about the need for higher interest rates, with inflation pressures now moving beyond tariffs and energy prices to strong demand.

Date: 2026-09-21

Details: Written by Faisal Shahnawaz in Taxation FBR links minimum taxable values to national retail prices and sets separate rates for three categories of oil and ghee brands. ISLAMABAD, September 20, 2026: The Federal Board of Revenue (FBR) has fixed minimum values for domestically produced vegetable and animal fats and oils, ghee and cooking oil for the purpose of calculating sales tax. The FBR issued SRO 1632(I)/2026 dated September 18, 2026, under the first proviso to clause (46) of Section 2 of the Sales Tax Act, 1990, prescribing minimum values for supplies of these products. FBR links minimum values to PBS retail prices Under the notification, the minimum value, inclusive of sales tax, will be determined on the basis of the average national retail price of vegetable and animal fats and oils, ghee and cooking oil published on the Pakistan Bureau of Statistics (PBS) website under the weekly Sensitive Price Indicator (SPI). The average price published during the last week of the immediately preceding month will be used to determine the minimum value for the following month. However, a Rs25 per kilogram reduction from the average national retail price will only be available to registered persons complying with the FBRâ€™s digital invoicing and production monitoring system. Three categories introduced for oil and ghee brands The FBR has divided the products into three categories for determining the applicable minimum value. Category A, comprising brands including Dalda, Habib, Sufi, Mezan, Soya Supreme and EVA, will be valued at 100% of the prescribed value. Category B, covering brands such as Manpasand, Habib Handi, Seasons, Kashmir, Kausar, Shah Taj, Kisan, Shafaq and Sultan, will be valued at 93% of the prescribed value. Category C, covering all other brands, will be valued at 85% of the prescribed value. FBR explains minimum value calculation The notification provides an illustrative calculation using prices published on the PBS portal on July 26, 2026. The average price works out to Rs613 per litre/kg, based on pack prices of Rs3,067 for five litres/kg, Rs1,550 for 2.5 litres/kg and Rs606 for one litre/kg. The resulting prices of Rs613, Rs620 and Rs606 produce an average of Rs613. After deducting the Rs25 per kg available to compliant registered persons, the minimum retail price is calculated at Rs588 per kg. September 2026 minimum values Using the prescribed methodology, the notification sets different minimum values for the three categories. For Category A, the minimum value is Rs588 per litre/kg, representing 100% of the average price after the applicable Rs25 deduction. For Category B, the minimum value is Rs547 per litre/kg, representing 93% of the prescribed base value. For Category C, the minimum value is Rs500 per litre/kg, representing 85% of the prescribed base value. Higher actual value subject to sales tax The FBR said supplies of oil and ghee to the Armed Forces will be subject to the value or price specified in the relevant contract. For subsequent months, the applicable retail price will be calculated using the same methodology and the illustrative example provided in the notification. The notification also clarifies that where the actual supply value is higher than the value fixed by the FBR, sales tax will be charged on the higher value. SRO 1632(I)/2026 will remain applicable until the tax period of November 2026.

Date: 2026-09-21

Details: Written by Hamza Shahnawaz in Taxation The facility applies to compliant oil and ghee businesses paying sales tax at retail prices and remains available until November 30, 2026. ISLAMABAD: The Federal Board of Revenue (FBR) has allowed manufacturers and suppliers of edible oil and ghee to adjust input tax up to 95% of output tax for the relevant tax period, subject to specified compliance requirements. The FBR issued SRO 1631(I)/2026 dated September 18, 2026, amending its earlier notification SRO 1190(I)/2019 dated October 2, 2019, under the Sales Tax Act, 1990. The latest notification was issued under the powers conferred by the second proviso to sub-section (1) and sub-section (4) of Section 8B of the Sales Tax Act, 1990. FBR sets conditions for 95% input tax adjustment Under the amendment, the FBR has added a new entry to Table-2 of SRO 1190(I)/2019. The facility applies to registered persons engaged in the supply of oil and ghee who meet the prescribed conditions. Eligible businesses must: â€¢ Comply with the FBRâ€™s digital invoicing and production monitoring system; â€¢ Be engaged in the supply of oil and ghee; and â€¢ Pay sales tax at the retail price in accordance with Serial No. 56 of the Third Schedule to the Sales Tax Act, 1990. The facility will remain available until November 30, 2026. Excess input tax to be carried forward Under SRO 1190(I)/2019, the FBR had allowed specified registered persons to adjust input tax up to 95% of output tax for the relevant tax period. Where admissible input tax exceeds the permitted adjustment limit, the excess amount is carried forward to the following tax period. The latest amendment extends this 95% input tax adjustment facility to compliant oil and ghee businesses meeting the conditions prescribed by the FBR. Digital compliance linked to tax facility The measure links the input tax adjustment facility with compliance with the FBRâ€™s digital invoicing and production monitoring requirements. It specifically covers oil and ghee businesses liable to pay sales tax at retail prices under the Third Schedule to the Sales Tax Act. Oil and ghee manufacturers and suppliers seeking to avail themselves of the facility will therefore need to maintain compliance with the applicable digital invoicing and production monitoring requirements during the period covered by the notification.

Date: 2026-09-21

Details: Written by Faisal Shahnawaz in Taxation FBR replaces its 1999 notification with a revised list of 29 perishable goods and introduces an exception for properly preserved and packaged edible products. ISLAMABAD, September 20, 2026: The Federal Board of Revenue (FBR) has notified 29 categories of goods as perishable goods for the purposes of Section 98 of the Customs Act, 1969, replacing an earlier notification issued in 1999. Through SRO 1629(I)/2026 dated September 18, 2026, the FBR exercised its powers under Section 98 of the Customs Act, 1969, and superseded SRO 1250 of 1999 dated February 27, 1999. The revised notification covers a broad range of food, agricultural and other products that may deteriorate during storage. FBR lists 29 categories as perishable goods The notified goods include betel leaves, butter, bidi leaves and bidi, betel-nuts, cheese, coconuts (seeds), X-ray films, dates, dry fruits, eggs, non-essential oils, food grains, fish, ginger and garlic. The list also covers hides and skins, live trees, plants and roots, milk powder, meat, onions, apples, sweets and confectionery, soft drinks, sugar and spices. Other products classified as perishable include syrups, jams, jellies, marmalades, ketchup and similar condiments, tobacco other than unmanufactured processed tobacco, tea, cocoa and coffee. The notification further includes vegetables and fruits not specifically listed, as well as edible vegetable oil and oil-seeds. Exception introduced for preserved and packaged food The FBR has introduced an important exception for certain imported edible products. An edible product with an expiry date specified by the manufacturer and printed on its packaging will not be treated as a perishable good for the purpose of warehousing surcharge if it is imported in preserved, canned, bottled or packaged form. The exclusion is subject to specific storage and certification requirements. Under the first condition, such goods must be stored in customs bonded warehouses in accordance with the storage requirements specified by the manufacturer. The storage arrangements must ensure that the products do not become unfit for human consumption during the warehousing period. The second condition requires the licence holder of the customs bonded warehouse to certify, in the format prescribed in Annex-A, that the warehouse has the necessary facilities to store the goods according to the manufacturerâ€™s specified conditions. The certificate must be uploaded by the importer or authorised clearing agent when filing the relevant In-Bond Goods Declaration. PSW and WeBOC system changes The FBR has also directed that any system-related charges required to implement the notification should be taken up immediately by the office of the Chief Collector (South Appraisement) with the Pakistan Single Window (PSW) and WeBOC teams. The revised notification establishes an updated framework for determining which goods qualify as perishable for customs warehousing purposes, while allowing appropriately preserved and packaged edible products to be excluded where the prescribed storage requirements are met.

Date: 2026-09-21

Details: Written by Hamza Shahnawaz in Taxation Taxpayers now have until September 25 to file sales tax and Federal Excise Duty returns for August 2026, subject to timely payment. ISLAMABAD, September 20, 2026: The Federal Board of Revenue (FBR) has extended the deadline for filing sales tax and Federal Excise Duty (FED) returns for August 2026 until September 25, 2026. The extension was communicated to Chief Commissioners Inland Revenue of the Large Taxpayers Offices (LTOs), Corporate Tax Offices (CTOs) and Regional Tax Offices (RTOs). FBR extends August return filing deadline According to a circular issued by Khalid Mehmood, Second Secretary (ST-I&P), the FBR has extended the deadline for submission of sales tax and FED returns for the tax period of August 2026 for all taxpayers. The FBR exercised its powers under Section 74 of the Sales Tax Act, 1990 and Section 43 of the Federal Excise Act, 2005 to grant the extension. Under the revised schedule, taxpayers can submit their August 2026 sales tax and FED returns by September 25, 2026. Sales tax liability must be paid on time The FBR has attached a specific condition to the extended filing facility. The sales tax liability due for the relevant tax period must have been deposited within the original due date. This means the extension provides additional time for taxpayers to complete and submit their returns, but does not extend the original deadline for payment of the applicable sales tax liability. Taxpayers seeking to benefit from the extended filing date should therefore ensure that their due liability was deposited within the prescribed payment period. Revised deadline applies to all relevant taxpayers The extension covers all taxpayers required to file sales tax and FED returns for the August 2026 tax period under the relevant laws. Taxpayers should complete and submit their returns by September 25, 2026, while ensuring that the applicable tax liability was paid within the original deadline to meet the conditions of the FBRâ€™s extension.

Date: 2026-09-19

Details: Written by Faisal Shahnawaz in Taxation The collaboration aims to modernise Pakistan Postâ€™s sorting centres and improve operational efficiency through automation and technology. ISLAMABAD, September 19, 2026: The Pakistan Post Office Department (PPOD) and Alibaba Group have agreed to automate parcel sorting at Pakistan Post as part of a government-backed initiative to modernise postal operations and expand technology-enabled services. According to an official document, the collaboration covers the automation of Pakistan Postâ€™s sorting centres, with the Ministry of Information Technology and Telecommunication leading the initiative under the prime ministerâ€™s directives. The move forms part of a broader government effort to upgrade Pakistan Postâ€™s infrastructure, improve operational efficiency and strengthen the delivery of digital and technology-based postal services. Pakistan Post advances cashless operations Pakistan Post is also implementing the prime ministerâ€™s cashless economy initiative, with the Ministry of Finance serving as the lead ministry. As part of the programme, Pakistan Post signed a memorandum of understanding with the National Bank of Pakistan in March 2026 for the collection of non-tax revenues. The postal department has also requested the Finance Division to facilitate the opening of a Raast-linked account to align its financial operations with the national cashless economy programme. The first phase will cover 85 General Post Offices (GPOs) and is expected to account for around 65% of PPODâ€™s revenue receipts, according to the document. Pakistan Post integrates customs systems Another initiative involves implementing the National Action Plan under the National Gemstone Policy 2026-30, with the Ministry of Industries and Production serving as the lead ministry. Meanwhile, technical teams from the Universal Postal Union, Pakistan Post, Pakistan Single Window and Pakistan Customs are working to integrate the Customs Declaration System with WeBOC/ACS. The integration is intended to strengthen coordination between postal and customs systems and support more efficient processing of international postal consignments. Drive to modernise postal services The various initiatives form part of Pakistan Postâ€™s broader efforts to modernise its infrastructure, automate key operations, expand digital payment mechanisms and improve technology-based service delivery. The collaboration with Alibaba on automated parcel sorting is expected to contribute to these efforts as Pakistan Post upgrades its operational systems and responds to growing demand for faster and more technology-driven postal services.

Date: 2026-09-19

Details: Written by Hamza Shahnawaz in Taxation Customs officials arrested two people travelling to Dubai after allegedly finding concealed hashish in their baggage at Jinnah International Airport. KARACHI: Pakistan Customs officials at Jinnah International Airport in Karachi have foiled an alleged attempt to smuggle approximately 580 grams of hashish (charas) out of the country and arrested two passengers travelling to Dubai. The incident occurred at around 10pm on September 17, when a Customs machine operator deployed at the international departures area detected suspicious baggage during routine screening. The baggage belonged to a husband and wife travelling to Dubai, United Arab Emirates, on FlyDubai flight FZ-330. Hashish Found in Concealed Compartments Following the initial detection, Customs officials subjected both pieces of baggage to a detailed examination. During the inspection, officers recovered two wooden jewellery boxes that had been fitted with specially designed concealments. Further examination of the boxes led to the recovery of approximately 290 grams (gross) of hashish from each box. The total quantity of seized narcotics was approximately 580 grams (gross), with an estimated value of around Rs2 million. The contraband was seized under the relevant provisions of law, while both passengers were arrested in connection with the alleged smuggling attempt. FIR Registered, Investigation Underway Pakistan Customs said an FIR has been registered under applicable provisions of the Control of Narcotic Substances (CNS) Act. Further investigation is underway to establish the circumstances surrounding the alleged attempt and determine whether other individuals were involved. The case comes as Customs authorities continue to use risk-based profiling and baggage screening at international airports to identify suspected attempts to transport prohibited and restricted goods. Customs Strengthens Airport Screening Pakistan Customs said its enforcement measures include risk-based profiling, advanced baggage screening and targeted examination mechanisms at international entry and exit points. The department said these measures are aimed at preventing the movement of narcotics and other prohibited or restricted goods while protecting Pakistanâ€™s economic and national interests. Authorities will continue investigating the case to determine the full circumstances of the alleged smuggling attempt.

Date: 2026-09-19

Details: Written by Faisal Shahnawaz in Taxation The Karachi Tax Bar Association has urged the FBR to correct alleged IRIS calculation errors affecting minimum tax liabilities before the September 30 deadline. KARACHI, September 18, 2026: The Karachi Tax Bar Association (KTBA) has raised concerns over what it describes as critical computational errors in the Tax Year 2026 income tax return available on the Federal Board of Revenueâ€™s (FBR) IRIS portal. In a letter to FBR Member Inland Revenue (Operations) Zubair Bilal, the KTBA said the portal was incorrectly calculating the â€œDifference of Minimum Taxâ€ in cases involving tax collected or deducted under Section 153 of the Income Tax Ordinance, 2001. The association said it had received representations from taxpayers and its members regarding liabilities generated by IRIS that, in its view, lacked an identifiable statutory formula or mechanism under the Income Tax Ordinance. According to the KTBA, the portal does not disclose the formula or assumptions used to calculate the additional liability, making it difficult for taxpayers to verify the computation. KTBA questions minimum tax calculation The tax bar argued that the IRIS-generated â€œDifference of Minimum Taxâ€ should have a clear statutory basis and should not override the self-assessment mechanism under the Income Tax Ordinance, 2001. It maintained that minimum-tax liability should be determined by comparing the applicable minimum tax with the normal tax computed and declared by the taxpayer in accordance with the law. The KTBA said the calculation depends on several factors, including the nature of business activities, different streams of receipts, applicable provisions, expenses and deductions. It therefore urged the FBR to ensure that IRIS facilitates the computation declared by taxpayers instead of replacing it with an undisclosed system-generated calculation. KTBA alleges possible duplication of tax The association also pointed to what it described as an apparent duplication in the treatment of tax collected or deducted under Section 153. According to the KTBA, the current formula may, in certain cases, apply normal tax rates without properly accounting for income already subjected to minimum-tax treatment. The association said this could result in the same income being considered more than once and generate an additional liability despite tax already having been collected or deducted at source. KTBA seeks immediate IRIS correction The KTBA urged the FBR to immediately review the formula and remove any system restrictions that could prevent taxpayers from making adjustments permitted under the law. The association said the IRIS portal should serve as a mechanism for implementing tax law rather than imposing unsupported liabilities or restricting taxpayersâ€™ statutory computations through automated calculations. With Tax Year 2026 return filing underway and the deadline set for September 30, the KTBA called for the issue to be resolved promptly. It also urged the FBR to allow taxpayers to disclose relevant facts and determine their liabilities in accordance with the self-assessment framework. The KTBA said it remained available for further discussions with the FBR to resolve the matter.

Date: 2026-09-19

Details: Published September 19, 2026 Updated about 3 hours ago By AFP TOKYO: The Bank of Japan raised interest rates to a 31-year high on Friday and said it would lift them further as it looks to counter inflation fuelled by surging energy prices and a weak yen. The 25-basis-point hike to 1.25 percent was expected by markets following the recent tightening by the European Central Bank and the US Federal Reserve, though the decision was not unanimous as it was carried by a 7-2 majority vote. Pressure has increased on officials to further tighten monetary policy as a spike in oil prices caused by the Middle East crisis â€“ which shows little sign of ending anytime soon â€“ is expected to keep putting upward pressure on inflation. â€œGiven that underlying CPI inflation has been approaching two percent and financial conditions have been accommodative, the bank will continue to raise the policy interest rate,â€ the BoJ said on its website. BoJ Governor Kazuo Ueda told a news conference that it was â€œimportant to stabilise the underlying inflation rateâ€, avoiding a situation in which it surpassed the two percent target with an â€œadverse impact on the economyâ€. Central bankers are keeping tabs on movements in the yen, which fell to a 40-year low against the dollar in July, prompting a historic joint US-Japanese intervention in foreign exchange markets. The unit has been weighed in particular by the wide gap between Japanâ€™s still low interest rates and those of the Federal Reserve, which encouraged investors to favour better-yielding dollar-denominated assets. Despite the hike to the highest level since 1995, which had been telegraphed for weeks, the yen weakened to more than 157 per dollar, compared with around 156.30 before the announcement. â€œFor a market looking for evidence that the BoJ could shorten the distance between hikes, those dissents mattered,â€ said Stephen Innes at Quintex Intel. â€œTraders were looking for signs that the Bank could move faster from here, yet two members were already arguing that even todayâ€™s move had come too soon.â€ The cheap yen is driving up the cost of imported goods, which in turn is putting upward pressure on inflation. Makiko Tsushima, a farmer from the northern region of Aomori, told AFP that she was â€œreally wishingâ€ for inflation to slow down. â€œPrices are climbing. Casual shopping at a supermarket easily costs me 10,000 yen ($63) these daysâ€¦ Daily necessities like toilet paper and everything else are also expensive,â€ the 54-year-old said. Still, figures on Friday showed core inflation fell to 1.7 percent in August from 1.8 percent but remains close to the BoJâ€™s two percent target. The reading from the internal affairs ministry, which excludes volatile fresh food prices, was lower than forecasts for it to remain unchanged. Government support for gasoline and electricity fees contributed to the slower pace of inflation, the data showed. However, the reprieve could prove very short-lived for resource-poor Japan after energy and gas prices soared in recent weeks because of the Middle East crisis. â€œInflation was little changed in August but there are mounting signs that higher energy costs are feeding through and we expect it to rise above the BoJâ€™s two percent target before long,â€ said Marcel Thieliant of Capital Economics. The government is trying to mitigate the impact of inflation on household purchasing power, notably with a massive stimulus package adopted at the end of 2025, extensive tax breaks on energy, and measures adopted in the spring to support consumption. Tokyo also decided this week on a drastic two-year reduction in the consumption tax on food products, from eight percent to one percent starting in April 2027.

Date: 2026-09-19

Details: Published September 19, 2026 Updated about 3 hours ago By Recorder Report KARACHI: Mashreq Pakistan has become Pakistanâ€™s first newly launched digital bank to offer the full suite of Raast services, including Raast Person-to-Merchant (P2M) payments, enabling seamless digital transactions for both individual customers and merchants. The launch forms part of Mashreqâ€™s broader strategy to accelerate digital payment adoption and expand merchant acceptance across Pakistan. Launched in August 2026, the new capability enables merchants to receive instant payments through Raast QR codes, while customers can conveniently scan and pay merchants through Mashreqâ€™s digital banking channels. Designed to serve businesses across a broad range of categories, Mashreqâ€™s Raast P2M offering extends digital payment acceptance to grocery stores, restaurants, retail outlets, service providers and e-commerce merchants. Sole proprietors and self-employed professionals can also open a Mashreq NEOBiz account and become Raast P2M merchants, providing smaller businesses with a convenient way to accept account-based digital payments. Commenting on the launch, Muhammad Hamayun Sajjad, CEO, Mashreq Pakistan, said, that Pakistanâ€™s digital payments ecosystem is entering an important phase where the focus must shift from access to adoption and by launching a unified Raast payments ecosystem for both customers and merchants, Mashreq is helping make instant payments a practical part of everyday commerce. â€œOur focus is on delivering digital experiences that create greater value for customers, businesses, and the wider economy while supporting Pakistanâ€™s journey towards a more digitally connected and cashless future,â€ he added. Ahson Bin Saeed, CEO, Raast Payments Pakistan, said that building a national payments infrastructure is an evolving journey and Pakistan has embarked on its own journey with Raast, and the progress we are seeing is encouraging. â€œThe next phase is about continuing to strengthen the infrastructure, broaden participation and ensure that institutions can build relevant, reliable and accessible payment experiences on top of it. Mashreqâ€™s launch of Raast P2M is another important step in translating this national infrastructure into everyday use for merchants and consumers,â€ he added. Muhammad Imad Uddin, Director, Digital Innovation & Settlements Department, State Bank of Pakistan, said that digital transformation does not happen without challenges, particularly in a market as dynamic as Pakistan and SBP has remained focused on developing the regulatory and technological foundations needed for a more connected and inclusive payments landscape. Through the continued expansion of Raast, Mashreq aims to make instant, secure and interoperable payments increasingly accessible to customers and merchants across Pakistan. The Bank will continue to expand merchant acceptance while enhancing customer and merchant experiences through technology, service and innovation, supporting the continued growth of Pakistanâ€™s digital economy. Copyright Business Recorder, 2026

Date: 2026-09-19

Details: Written by Faisal Shahnawaz in Energy, National Petrol now costs Rs389.14 per litre while high-speed diesel is priced at Rs424.04 under the governmentâ€™s new daily pricing mechanism. ISLAMABAD, September 19, 2026: The government has reduced the price of petrol by Rs1.65 per litre and high-speed diesel (HSD) by 88 paisas, citing fluctuations in international oil prices. Following the latest revision, petrol will be available at Rs389.14 per litre, down from Rs390.79, while the price of HSD has been reduced from Rs424.92 to Rs424.04 per litre. According to a notification issued by the Petroleum Division, the revised prices will remain effective from September 19 to September 21. Daily fuel pricing mechanism The latest adjustment comes under the governmentâ€™s new daily petroleum pricing mechanism, under which the Oil and Gas Regulatory Authority (OGRA) has started publishing daily petroleum prices on its website. The mechanism is intended to improve transparency and allow movements in international oil prices to be passed on to consumers more quickly. Petroleum Minister Ali Pervaiz Malik said daily fuel prices are determined using a seven-day average of international market prices, in line with international practice. Under the latest revision, petrol prices have fallen by Rs1.65 per litre, while HSD prices have declined by 88 paisas. Global oil market volatility The adjustment comes amid continued volatility in global oil markets following renewed tensions in the Middle East. The government moved towards more frequent fuel price reviews after international oil market conditions became increasingly volatile following the conflict involving Israel, the United States and Iran. Pakistan had previously revised petroleum prices on a fortnightly basis before moving to a weekly review mechanism. Under the new system, the government has opted for daily price reviews to allow domestic fuel prices to respond more quickly to movements in international markets. OGRA authorised to announce daily prices An official document detailing the federal cabinet-approved petroleum pricing mechanism states that OGRA will issue daily ex-depot prices for petrol and HSD. The prices will be calculated using average international market prices recorded over the preceding seven days. The regulator will be authorised to announce daily prices without seeking prior approval from the prime minister or federal government. However, prices notified on Fridays will remain unchanged on Saturdays and Sundays. The framework also requires OGRA to publish daily Platts reference prices from July 1, 2026. The document further states that the Petroleum Development Levy (PDL) cannot exceed the limit approved by the federal cabinet. Any change in the levy rate will require approval from the Finance Division. The latest reduction in petrol and HSD prices reflects the governmentâ€™s move towards a more responsive fuel pricing system, under which domestic rates are adjusted more frequently in line with international oil market movements.

Date: 2026-09-18

Details: Written by Hamza Shahnawaz in Taxation Eligible manufacturing companies can claim a tax credit linked to registered employees, subject to conditions under Section 64B. ISLAMABAD, September 17, 2026: The Federal Board of Revenue (FBR) has retained the employment generation tax credit available to eligible manufacturers for Tax Year 2027 under the Income Tax Ordinance, 2001. The FBR has issued the Income Tax Ordinance, 2001, updated up to June 30, 2026, which sets out the eligibility requirements and calculation mechanism for the employment generation tax credit under Section 64B. Under the provision, a company established to set up and operate a new manufacturing unit may qualify for a tax credit for 10 years, provided the new unit was established within the period specified under the law and all prescribed conditions are met. Tax credit linked to number of employees The tax credit for a tax year is calculated at 2 per cent of tax payable for every 50 employees registered with the Employeesâ€™ Old-Age Benefits Institution (EOBI) or the Employeesâ€™ Social Security Institutions of the provincial governments during the relevant tax year. However, the total tax credit cannot exceed 10 per cent of the tax payable. The provision therefore links the value of the incentive directly to the number of qualifying employees employed by the manufacturing company. Conditions for claiming employment tax credit Section 64B sets out several conditions that a company must fulfil to qualify for the tax credit. The company must have been incorporated and the manufacturing unit established between July 1, 2015 and June 30, 2018, both dates inclusive. The company must employ more than 50 employees during a tax year, with the employees registered with EOBI and the Employeesâ€™ Social Security Institutions of the provincial governments. The manufacturing unit must be managed by a company formed specifically for the purpose of establishing and operating the unit. The company must also be registered under the Companies Act, 2017, with its registered office in Pakistan. The manufacturing unit must not have been established through the splitting up, reconstruction or reconstitution of an existing undertaking. In addition, the unit must not have been established through the transfer of machinery or plant from an undertaking that was already established in Pakistan before July 1, 2015. Tax credit can be recovered if conditions are breached The law empowers the Commissioner Inland Revenue to reassess a tax credit if documents or other information subsequently establish that any prescribed condition was not fulfilled. Where this occurs, the tax credit originally allowed is treated as having been wrongly granted. The Commissioner may recompute the taxpayerâ€™s tax liability for the relevant tax year, with the applicable provisions of the Income Tax Ordinance, 2001, applying accordingly. Companies claiming the incentive therefore remain subject to the eligibility requirements throughout the relevant period. When is a manufacturing unit considered established? Section 64B specifies that a manufacturing unit is considered to have been established on the date it becomes ready to commence production. This includes a unit that is ready to begin either trial production or commercial production. The provision continues to provide a tax incentive for qualifying manufacturers based on employment generation. However, companies must meet the prescribed incorporation and establishment dates, employee registration requirements, corporate structure conditions and maximum tax-credit limit to benefit from the provision.

Date: 2026-09-18

Details: Written by Hamza Shahnawaz in Taxation Individuals can claim a tax credit on qualifying housing-loan interest for eligible personal houses and flats under Section 63A. ISLAMABAD, September 17, 2026: The Federal Board of Revenue (FBR) has retained a tax credit for individuals on qualifying interest and other specified payments made on low-cost housing loans during Tax Year 2027. The provision is contained in Section 63A of the Income Tax Ordinance, 2001, updated by the FBR up to June 30, 2026. Under the provision, an individual may claim a tax credit for profit on debt, share in rent or share in the appreciation in the value of a house paid during the tax year, where the qualifying loan is used for the construction or acquisition of a personal house or flat. Loans eligible for housing tax credit The qualifying loan must have been obtained from a scheduled bank or another financial institution regulated by the Securities and Exchange Commission of Pakistan (SECP). Section 63A also covers loans advanced by the government, local government, a statutory body or a public company listed on a registered stock exchange in Pakistan. The loan must be used to construct or acquire a qualifying personal residence. For a house, the land area must not exceed 2,500 square feet, while a qualifying flat must have a total area of no more than 2,000 square feet. How the housing tax credit is calculated The tax credit under Section 63A is calculated using the following formula: (A/B) Ã— C Under the formula: â€¢ A is the tax assessed on the individual for the relevant tax year before allowing any tax credit under the applicable provisions of the Income Tax Ordinance. â€¢ B is the individualâ€™s taxable income for the relevant tax year. â€¢ C is the lesser of the total qualifying profit on debt paid during the year or 30 per cent of taxable income for that tax year. This means the amount of housing-loan interest taken into account for the tax credit is subject to a statutory limit. Restrictions on claiming the tax credit Section 63A places additional restrictions on taxpayers seeking to claim the housing-loan tax credit. An individual cannot claim the credit for any profit that is deductible under Section 15A of the Income Tax Ordinance, 2001. The provision also limits the frequency with which the tax credit can be claimed. An individual who has claimed a tax credit under Section 63A cannot claim another tax credit under the same section for another house or flat during the subsequent 15 tax years. The rules therefore link the tax credit to a qualifying personal residence while imposing limits on the propertyâ€™s size, the amount of qualifying loan-related payments and the frequency of claiming the benefit.

Date: 2026-09-18

Details: Written by Hamza Shahnawaz in Taxation Eligible taxpayers can claim a tax credit on qualifying pension fund contributions under Section 63 of the Income Tax Ordinance, 2001. The Federal Board of Revenue (FBR) has allowed a tax credit for contributions made to an approved pension fund for Tax Year 2027, subject to the conditions and limits prescribed under the Income Tax Ordinance, 2001. The FBR has issued the Income Tax Ordinance, 2001, updated up to June 30, 2026, which contains provisions governing tax credits for contributions to approved pension funds under Section 63. Under Section 63, an eligible person earning income chargeable to tax under the head â€œSalaryâ€ or â€œIncome from Businessâ€ is entitled to a tax credit for a tax year in respect of contributions or premiums paid during that year to an approved pension fund under the Voluntary Pension System Rules, 2005. How pension fund tax credit is calculated The amount of the tax credit is determined using the following formula: (A/B) Ã— C Under the formula: â€¢ A represents the amount of tax assessed on the individual for the tax year before allowing any tax credit under the relevant provisions. â€¢ B represents the individualâ€™s taxable income for the tax year. â€¢ C represents the lesser of the total contribution or premium paid during the year, or 20 per cent of the eligible personâ€™s taxable income for the relevant tax year. This means the tax credit is calculated based on the qualifying pension contribution within the limits prescribed by the law. Additional pension contribution provision Section 63 also contains specific provisions for individuals who joined a pension fund at the age of 41 or above during the first 10 years beginning July 1, 2006. Under the provision, such an eligible person was allowed an additional contribution of 2 per cent per annum for each year of age exceeding 40, subject to the limits specified in the law. The provision stated that the total contribution allowed to such an individual could not exceed 50 per cent of the total taxable income of the preceding year. A further proviso provided that the additional contribution of 2 per cent per annum for each year of age exceeding 40 was allowed up to June 30, 2019, subject to the condition that the total contribution allowed could not exceed 30 per cent of the total taxable income of the preceding year. Transfer of existing pension balances excluded The FBRâ€™s updated ordinance also clarifies that the transfer of existing balances by members of an approved employment pension or annuity scheme or an approved occupational savings scheme into individual pension accounts maintained with one or more pension fund managers does not qualify for a tax credit. Accordingly, the tax credit is linked to qualifying contributions or premiums actually paid during the relevant tax year rather than the transfer of existing pension balances. For Tax Year 2027, taxpayers seeking to claim the credit must therefore meet the eligibility requirements and remain within the calculation formula and contribution limits prescribed under Section 63 of the Income Tax Ordinance, 2001.

Date: 2026-09-18

Details: Published September 18, 2026 Updated about 2 hours ago By Reuters FRANKFURT: European shares rose on Thursday as lower oil prices and a pause in the global bond selloff lifted risk appetite after the US Federal Reserve delivered its widely expected interest-rate hike. The pan-European STOXX 600 gained 0.9 percent to 642.6 points, with most regional markets advancing. Metal mining shares led the gains, jumping 2.1 percent. Automakers rose 1.7 percent, led by gains of around 2 percent for BMW, Renault and Volkswagen. Brent crude extended losses for a second day after reports that Saudi Arabia was offering additional cargoes through Oman, though prices remained above USD100 a barrel. Europeâ€™s energy sector nonetheless edged up 0.1 percent. The Fedâ€™s first rate increase in three years on Wednesday reinforced expectations that major central banks are stepping up efforts to curb inflation. US Treasury yields fell on Thursday as investors assessed the decision and signals of further tightening ahead. Investors also focused on the Bank of England, which held rates steady while warning that soaring energy costs would intensify inflation pressures. The UKâ€™s blue-chip FTSE 100 climbed 1.2 percent, marking its biggest one-day gain in over two months. Euro zone inflation was revised slightly lower to an annual 3.2 percent in August, from a preliminary estimate of 3.3 percent. In Sweden, Prime Minister Ulf Kristersson said he would resign after the centre-left opposition won a narrow parliamentary majority in Sundayâ€™s election. The Social Democrats, led by former Prime Minister Magdalena Andersson, are set to lead talks on forming the next government. Swedenâ€™s benchmark index rose 1.1 percent. Among other stocks, Berentzen jumped 19.4 percent after the German spirits manufacturer confirmed its negotiations regarding a potential takeover bid from New Orleans-based alcohol producer Sazerac. Polandâ€™s biggest e-commerce platform Allegro raised its 2026 forecasts while confirming second-quarter results exceeded guidance, sending its shares to the top of the STOXX 600 leaderboard, up 9.5 percent. Helvetia Baloise gained 5.3 percent, after the Swiss insurance group released results for the first half of the year, with underlying earnings coming ahead of expectations.

Date: 2026-09-18

Details: Published September 18, 2026 Updated about an hour ago By Tahir Amin ISLAMABAD: As artificial intelligence increasingly expands what individuals can do with technology, the next major divide may no longer be about access to connectivity and information, but access to capability, JazzWorld CEO Aamir Ibrahim said. Speaking at the Leaders in Islamabad Business Summit, Ibrahim drew a distinction between the digital divide and what he described as an emerging â€œintelligence divide,â€ as AI provides access to capabilities across education, analysis, information and software development. â€œThe digital divide was about access to connectivity and information. The intelligence divide will be about access to capability. We need to make sure that there is an intelligent future for every Pakistani â€” a smartphone in every hand, and intelligence available to everyone,â€ he said. Ibrahim linked the challenge to Pakistanâ€™s need to build the infrastructure required to participate in the global AI economy. Discussing the concept of AI factories, he said their key inputs include energy, compute, data centers and data, while outputs can range from AI inference and tokens to software, code, video and audio. Pakistan, he added, should aspire to become an â€œAI makerâ€ rather than simply consuming technologies developed elsewhere. This would include building systems capable of serving global markets while understanding Pakistanâ€™s languages, culture, security requirements and local context. He also highlighted sovereign AI, saying it extends beyond keeping data within national borders to having a degree of control over the countryâ€™s cognitive layer. Ibrahim made the remarks while delivering welcome remarks during the summitâ€™s inaugural session, â€œThe Next Move: Reading the Moment,â€ where he was joined by Muhammad Azfar Ahsan, Founder and Chairman, Nutshell Group and former Minister for Investment, and Dr Faisal Hashmi, Senior Director Public Affairs, Sustainability & Communication, Pakistan & Afghanistan Region, The Coca-Cola Company. He later built on the discussion during the closing leadership dialogue, â€œFrom Strategic Relevance to National Advantage,â€ joining Senator Anwaar-ul-Haq Kakar, former caretaker Prime Minister of Pakistan; Senator Dr Musadik Malik, Federal Minister for Climate Change and Environmental Coordination; Air Chief Marshal Sohail Aman, former Chief of Air Staff; and Ziad Bashir, Chairman, Pakistan Business Council, in a discussion moderated by Fahd Husain, Anchor, Columnist and Executive Editor, The Express Tribune. Ibrahim emphasised the need to translate Pakistanâ€™s strategic potential into economic opportunity, with compute, data centers, reliable energy, and connectivity forming the infrastructure needed to participate in the global AI value chain. Copyright Business Recorder, 2026

Date: 2026-09-18

Details: Published September 18, 2026 Updated about 2 hours ago By Recorder Report KARACHI: Yango Pakistan, part of the global tech company Yango Group, has launched Sharia-compliant fintech service â€œPay Laterâ€, to help local businesses grow while giving customers more flexibility and convenience when shopping. The service allows customers to split purchases into equal payments, while giving merchants another way to attract customers and grow their sales. The launch marks Yangoâ€™s first fintech offering in Pakistan and another step in expanding the companyâ€™s local digital ecosystem. Pay Later is initially available as a pilot on the websites of selected partner merchants. Customers can split eligible purchases into equal payments made every two weeks. Participating merchants can also be discovered through the Shop section of the Yango SuperApp. The service launches with merchants including Habitt, Sana Safinaz, Bagallery, Ego, Walkeaze, Scent N Secrets and others. Yango Pakistan plans to grow the network to more than 100 largest online retailers in fashion, beauty, home goods and electronics by the end of the year. The Pay Later model has been reviewed by Dr. Muhammad Imran Ashraf Usmani of Usmani & Co. Shariah Advisors (Pvt.) Ltd. His conclusion confirms that the solutionâ€™s structure and operating principles comply with Sharia requirements. â€œPartnership is at the core of Yangoâ€™s ecosystem across our services, we work with local companies to create solutions that help them grow while bringing more value to their customers. Pay Later extends this approach into fintech, which we see as an important enabler of business growth, helping merchants reach new audiences and contributing to Pakistanâ€™s growing digital economy,â€ said Miral Sharif, Country Head, Yango Pakistan. Ali Hussain, Head of Sales at Yango Fintech in Pakistan said that Pay Later gives merchants an additional way to make purchases more accessible to customers and support conversion at checkout. â€œWe designed the product for the Pakistani market, with Sharia principles incorporated into its structure from the outset,â€ he added. Copyright Business Recorder, 2026

Date: 2026-09-17

Details: Written by Hamza Shahnawaz in Taxation RTO Hyderabad and marriage hall operators have agreed to use reliable industry data to improve voluntary tax compliance under Section 236D. The Regional Tax Office (RTO) Hyderabad and representatives of the Marriage Hall Association Hyderabad Region have agreed on an evidence-based approach to improve voluntary compliance with tax requirements under Section 236D of the Income Tax Ordinance, 2001. The agreement was reached during a meeting at the office of Chief Commissioner RTO Hyderabad, Sajjad Akbar, attended by senior tax officials and representatives of the Marriage Hall Association, including SV President Syed Nasir Ali, Shahid Qureshi, Zaheer Naghar and Wahid Sija. Focus on Voluntary Tax Compliance The meeting discussed ways to encourage marriage hall operators to fulfil their tax obligations without unnecessary enforcement or penal proceedings where matters can be resolved through cooperation and voluntary compliance. Officials noted that a relatively small number of association members currently comply with tax deduction requirements under Section 236D of the Income Tax Ordinance. The participants reviewed the practical requirements for determining tax-related amounts associated with functions and gatherings. Discussions covered prevailing booking and function rates, the number and nature of events, occupancy levels and seasonal variations. Industry Conditions to Guide Tax Assessment The meeting also considered differences between marriage halls based on location, size and category, along with other relevant business factors. Both sides agreed that parameters used for tax purposes should reflect actual market conditions and be supported by reliable, verifiable and representative industry data. Marriage Hall Association representatives acknowledged their responsibility to ensure compliance with Section 236D and expressed their willingness to facilitate the proper collection and deposit of taxes lawfully due. RTO Assures Fair and Transparent Approach Chief Commissioner Sajjad Akbar assured the association representatives of the departmentâ€™s cooperation and reiterated RTO Hyderabadâ€™s commitment to a fair, transparent, reasonable and evidence-based approach to tax compliance. The department will continue engaging with marriage hall operators to facilitate compliance while discouraging concealment, suppression or understatement of amounts relevant for taxation. The meeting concluded with both sides reaffirming their commitment to cooperation, goodwill and a transparent, evidence-based approach to compliance with Section 236D of the Income Tax Ordinance, 2001.

Date: 2026-09-17

Details: Written by Hamza Shahnawaz in Taxation Eligible taxpayers can claim tax credits on qualifying donations, voluntary contributions and subscriptions subject to prescribed limits and conditions. ISLAMABAD: Taxpayers can claim a tax credit on eligible charitable donations made during Tax Year 2027 under Section 61 of the Income Tax Ordinance, 2001, updated up to June 30, 2026. The Federal Board of Revenue (FBR) has outlined the conditions, eligible recipients and limits applicable to tax credits on donations, voluntary contributions and subscriptions made to qualifying institutions and organisations. Donations eligible for tax credit Under Section 61, a person is entitled to a tax credit for any amount paid or property given as a donation, voluntary contribution or subscription during the tax year to specified entities. Eligible recipients include: â€¢ Any board of education or university in Pakistan established by or under federal or provincial law; â€¢ An educational institution, hospital or relief fund established or operated in Pakistan by the Federal Government, a provincial government or a local government; â€¢ Any non-profit organisation or person eligible for tax credit under Section 100C of the Income Tax Ordinance; and â€¢ Entities, organisations and funds listed in the Thirteenth Schedule of the Income Tax Ordinance. How charitable donation tax credit is calculated The tax credit under Section 61 is calculated using the following formula: (A/B) Ã— C Under the formula: â€¢ A represents the tax assessed on the person for the tax year before allowing any tax credit under the relevant provisions; â€¢ B represents the personâ€™s taxable income for the tax year; and â€¢ C represents the lesser of the total eligible donations made during the year, including the fair market value of donated property, or the applicable percentage of taxable income. For an individual or association of persons, the amount considered under component C is limited to 30% of taxable income. For a company, the applicable limit is 20% of taxable income. Lower limits apply to donations to associates The law provides lower limits where a donation is made to an associate. In such cases, the amount considered under component C is restricted to: â€¢ 15% of taxable income for an individual or association of persons; and â€¢ 10% of taxable income for a company. These limits apply where a sum is paid or property is given to an associate by the donor. Fair market value of donated property Where a taxpayer donates property, its fair market value is taken into account when calculating the tax credit. The value of the donated property is determined at the time it is given. The provision therefore covers both monetary donations and qualifying property donations, subject to the conditions and limits prescribed under Section 61. Cash donations must be paid by crossed cheque The FBR has also prescribed a payment requirement for cash donations. A cash amount paid as a donation can be included in the tax credit calculation only where it is paid through a crossed cheque drawn on a bank. Taxpayers claiming a charitable donation tax credit should therefore ensure that monetary donations meet the prescribed payment conditions. FBR may prescribe procedures Section 61 also authorises the FBR to make rules governing the procedure for granting approval under the relevant provisions of Section 2(36). The Board may also prescribe rules concerning other matters connected with or incidental to the operation of the charitable donation tax credit provisions. Tax credit available for qualifying donations in Tax Year 2027 The provisions establish the framework for eligible taxpayers to claim tax credits on qualifying charitable donations, voluntary contributions and subscriptions during Tax Year 2027. Taxpayers should ensure that donations are made to eligible recipients and comply with the applicable income-based limits, payment requirements and other conditions before claiming the tax credit.

Date: 2026-09-17

Details: Written by Hamza Shahnawaz in Taxation Eligible individuals can claim a tuition fee deduction subject to income, payment and statutory limits under the Income Tax Ordinance, 2001. ISLAMABAD: The Income Tax Ordinance, 2001, updated up to June 30, 2026, allows eligible individuals to claim a deductible allowance for tuition fees paid during Tax Year 2027, subject to prescribed conditions and limits. According to the Federal Board of Revenue (FBR), the education expense allowance is available to individuals whose taxable income is less than Rs1.5 million. Education expenses deduction under Section 60 Under Section 60 of the Income Tax Ordinance, an eligible individual can claim a deductible allowance for tuition fees paid during a tax year, provided the individualâ€™s taxable income is below Rs1.5 million. However, the amount that can be claimed is restricted to the lowest of three prescribed limits. The education expense allowance cannot exceed: â€¢ 5% of the total tuition fees paid by the individual during the tax year; â€¢ 25% of the individualâ€™s taxable income for the year; or â€¢ Rs60,000 multiplied by the number of children of the individual. The taxpayer can therefore claim only the amount that falls within the lowest applicable limit. Unused education allowance cannot be carried forward The law also states that any education expense allowance, or part of an allowance, that cannot be deducted in the relevant tax year cannot be carried forward to a subsequent tax year. Consequently, taxpayers cannot use any unused portion of the eligible education allowance to reduce their tax liability in a later year. Either parent can claim tuition fee allowance The education expense allowance may be claimed against the tax liability of either parent who makes the tuition fee payment. For claiming the allowance, the taxpayer must provide either the National Tax Number (NTN) or the name of the educational institution. This enables the eligible parent who has paid the tuition fees to claim the applicable allowance, provided all other conditions and statutory limits are met. Education allowance excluded from Section 149 calculation The Income Tax Ordinance also provides that the education expense allowance is not taken into account when calculating tax deduction under Section 149. Section 149 deals with the deduction of tax from salary. The exclusion means the education expense allowance is treated separately from the salary tax deduction calculation under the provision. Education tax relief available for Tax Year 2027 The provisions provide a mechanism for eligible taxpayers to obtain tax relief on qualifying tuition fees during Tax Year 2027. Individuals seeking to claim the allowance should ensure that they meet the Rs1.5 million taxable-income threshold, comply with the prescribed calculation limits and retain the required details of the educational institution or its NTN.

Date: 2026-09-17

Details: Written by Hamza Shahnawaz in Taxation The FBR has retained the provision allowing taxpayers to claim a deductible allowance for Zakat paid during Tax Year 2027, subject to the Income Tax Ordinance, 2001. ISLAMABAD: The Federal Board of Revenue (FBR) has retained the provision allowing taxpayers to claim a deductible allowance for Zakat paid during Tax Year 2027, subject to the conditions prescribed under the Income Tax Ordinance, 2001. The FBR has issued the Income Tax Ordinance, 2001, updated up to June 30, 2026, for Tax Year 2027, setting out the applicable provisions for taxpayers. Zakat deduction under Section 60 Under Section 60 of the Income Tax Ordinance, 2001, a person is entitled to a deductible allowance for the amount of any Zakat paid during a tax year under the Zakat and Ushr Ordinance, 1980. The provision applies to Zakat paid during the relevant tax year in accordance with the applicable Zakat law. However, Section 60(2) states that the provision does not apply to any Zakat amount already taken into account under sub-section (2) of Section 40 of the Income Tax Ordinance, 2001. Unused Zakat allowance cannot be carried forward The FBR has also specified how any unused Zakat allowance is treated. Under Section 60(3), an allowance or part of an allowance available under Section 60 for a tax year that cannot be deducted under Section 9 for that year cannot be refunded. The unused amount also cannot be carried forward to a subsequent tax year or carried back to a preceding tax year. The provision therefore limits the Zakat deduction to the relevant tax year, subject to the applicable requirements of the Income Tax Ordinance. Workersâ€™ Welfare Fund deduction The updated Income Tax Ordinance also contains Section 60A, which deals with deductions relating to the Workersâ€™ Welfare Fund. Under this provision, a person is entitled to a deductible allowance for the amount of Workersâ€™ Welfare Fund paid during a tax year under the Workersâ€™ Welfare Fund Ordinance, 1971, or under provincial legislation concerning the Workersâ€™ Welfare Fund enacted following the Eighteenth Constitutional Amendment Act, 2010. However, Section 60A does not apply to Workersâ€™ Welfare Fund amounts paid to the provinces by a trans-provincial establishment. Workersâ€™ Participation Fund deduction Similarly, Section 60B provides a deductible allowance for Workersâ€™ Participation Fund paid during a tax year in accordance with the Companies Profit (Workersâ€™ Participation) Act, 1968, or relevant provincial legislation enacted following the Eighteenth Constitutional Amendment. The provision also excludes amounts of Workersâ€™ Profit Participation Fund paid to a province by a trans-provincial establishment. Tax deductions applicable for Tax Year 2027 The updated Income Tax Ordinance provides the applicable framework for deductions relating to Zakat, Workersâ€™ Welfare Fund and Workersâ€™ Participation Fund for Tax Year 2027. Taxpayers claiming these deductions must meet the requirements and conditions prescribed under the relevant provisions of the Income Tax Ordinance, 2001.

Date: 2026-09-17

Details: Written by Hamza Shahnawaz in Taxation FBR officials and trader representatives will jointly visit markets across Pakistan to facilitate on-the-spot registration of shopkeepers under the Asaan Tax Scheme. ISLAMABAD: The government and trade organisations have agreed to launch a joint market outreach drive to facilitate the registration of shopkeepers under the Asaan Tax Scheme across all four provinces. Under the plan, Federal Board of Revenue (FBR) officials will visit markets alongside representatives of trader organisations to provide on-the-spot registration facilities and help shopkeepers join the scheme. The decision was taken at a review meeting on implementation of the Asaan Tax Scheme, chaired by Minister of State for Finance and Railways Bilal Azhar Kayani. The meeting was attended by prominent trade representatives, including Ajmal Baloch and Kashif Chaudhry, as well as FBR Member Inland Revenue Operations Zubair Bilal. Senior FBR officials, chief commissioners and heads of the Regional Tax Offices (RTOs) in Islamabad and Rawalpindi also participated. Heads and officials of RTOs and Corporate Tax Offices (CTOs) from across the country joined the meeting through video link and briefed participants on implementation progress in their respective jurisdictions. FBR and traders to conduct joint market visits The meeting reviewed the performance of RTOs and CTOs in implementing the Asaan Tax Scheme and assessed progress achieved so far. Under the new strategy, local trader representatives and FBR field officers will jointly prepare schedules for visits to designated markets. The teams will provide registration facilities directly in markets and assist shopkeepers with completing the registration process. Trader representatives and FBR officials will coordinate arrangements and develop area-specific plans to ensure registration facilities are accessible to shopkeepers. Minister Bilal Azhar Kayani said progress under the initiative would be closely monitored. He also announced that another review meeting would be held next week under his chairmanship to assess implementation of the scheme. First registration plate installed in Islamabad The meeting also reviewed feedback received from traders regarding the Asaan Tax Scheme. Addressing the participants, Kayani said the government, under the patronage of Prime Minister Shehbaz Sharif, had fulfilled its commitment to introduce the scheme in response to demands from the business community. He highlighted the installation of the first official registration plate under the Asaan Tax Scheme in Islamabad as an important milestone in the implementation of the initiative. The minister said registration plates would be installed at the shops of traders joining the scheme across the country from the following day. Scheme aims to broaden tax base Kayani said the initiative would help broaden the tax base while making tax compliance easier for traders. He reaffirmed the governmentâ€™s commitment to continuously monitor progress and address implementation issues to ensure the scheme achieves its intended objectives. The joint outreach programme is expected to bring FBR officials and trader representatives directly into markets, giving shopkeepers greater access to registration facilities and information about the Asaan Tax Scheme.

Date: 2026-09-17

Details: Published September 17, 2026 Updated about 4 hours ago By Reuters SHANGHAI: Mainland China and Hong Kong stocks ended higher on Wednesday, led by tech shares, but gains were capped as investors held back from large bets ahead of the US Federal Reserveâ€™s policy decision later in the day. At the close, the benchmark Shanghai composite index gained 0.7 percent, while the blue-chip CSI300 index advanced 0.7 percent. Both indexes snapped four straight days of losses. Gains were lifted by strength in tech shares, where the ChiNext Composite index was 2 percent higher and Shanghaiâ€™s tech-focused STAR50 index jumped 4.1 percent. AI is not a â€œmonopoly of great powersâ€ and the US should work with China to manage risk to create a non-discriminatory development environment, Chinaâ€™s top newspaper, the Peopleâ€™s Daily, said in a commentary on Wednesday. In Hong Kong, the benchmark Hang Seng index inched up 0.2 percent, while the cityâ€™s tech shares rose 0.8 percent. Fed Chair Kevin Warsh dislikes giving any guidance about the likely path of US interest rates, but elevated inflation, oil at more than USD100 a barrel, and his own emphasis on the need to deliver price stability and to pay attention to signals from financial market pricing appear to leave little doubt about whatâ€™s next. The Fed will raise its interest rate on Wednesday and deliver at least one more hike by the end of March, a Reuters poll showed. â€œThe key question is whether the Fed presents todayâ€™s expected hike as a limited adjustment to reinforce inflation credibility or the beginning of a broader tightening cycle,â€ analysts at Commerzbank said in a note. â€œA surprise hold could push front-end yields lower but potentially lift longer-term yields if investors interpret the Fed as insufficiently hawkish on inflation, steepening the yield curve.â€ Separately, US Treasury Secretary Scott Bessent on Tuesday said he would meet with Chinese Vice Premier He Lifeng this weekend ahead of a meeting between President Donald Trump and Chinese President Xi Jinping next week.

Date: 2026-09-17

Details: Published September 17, 2026 Updated about 5 hours ago By Reuters NEW YORK: Oil prices fell on Wednesday after reports that Saudi Arabia was offering additional crude cargoes through Oman eased some concerns about Middle East supply disruptions, while a smaller-than-expected draw in US crude inventories added further downward pressure. Brent crude futures fell USD2.92, or 2.7 percent, to settle at USD105.83 a barrel. US West Texas Intermediate futures fell USD3.40, or 3.2 percent, to close at USD102.43. Saudi Arabia is offering more loadings of crude oil to Asian refiners via ship-to-ship transfers off Omanâ€™s Sohar port, people familiar with the matter said, blunting some of the hit to global supply from attacks on the countryâ€™s East-West pipeline to the Red Sea. â€œNews around Saudi Arabia exporting from the Gulf suggests concerns that the disruption could be larger are easing,â€ said UBS analyst Giovanni Staunovo. Oil prices had gained more than USD3 in the previous session after shipping industry sources said crude loadings at Saudi Arabiaâ€™s Red Sea export hub of Yanbu had been suspended and Riyadh had cancelled some cargo deliveries to European customers. The suspension followed strikes on the East-West pipeline, which feeds the Saudi port of Yanbu. Yanbu became Saudi Arabiaâ€™s main outlet for oil exports after Iran began blockading the Strait of Hormuz after US and Israeli attacks on the country at the end of February. Prior to the war, Hormuz was the conduit for one-fifth of the worldâ€™s oil and liquefied natural gas supply. Visible vessel passage through the Strait of Hormuz remained in the single digits at four on Tuesday, down from seven a day earlier, preliminary shipping data showed on Wednesday. That was well below the 10-day average of 18. US INVENTORIES WEIGH Oil prices came under further pressure after the US Energy Information Administration on Wednesday reported a smaller-than-expected draw from US crude inventories last week. Crude oil stocks in the top-producing nation fell about 640,000 barrels last week, the EIA data showed, compared to expectations of a 1.62 million barrel draw according to a Reuters poll of energy analysts. US gasoline and distillate inventories rose last week, EIA data showed. The rise in diesel inventories was bigger than expected, while gasoline stockpiles were expected to have declined last week, according to the Reuters poll. The data was bearish for oil prices as it showed refined product stockpiles are maintaining themselves and even rising slightly while crude oil declines are flatlining, said John Kilduff, a partner at Again Capital. Other analysts warned the data has done little to change a market that remains on tenterhooks as violence continues to escalate in the Middle East. â€œAll in all, todayâ€™s data did little to sway us away from a long-standing bullish trading stance where buying significant price pullbacks remains much preferable to any attempts to pick a top to this bull market,â€ oil trading advisor Ritterbusch and Associates told clients in a note. Tensions ratcheted higher in the Middle East as Saudi warplanes pounded Yemen and Iran-backed Houthi fighters launched drones and missiles at Saudi cities. The Houthis, who have swept through Yemeni towns along the Red Sea since last week, said they had launched fresh strikes on Yanbu. Citi expects near-term escalation in the Middle East to continue supporting crude oil and refined fuel prices before the Strait of Hormuz eventually reopens in the fourth quarter of 2026 with support from regional diplomatic efforts, the bank said in a note. Diesel has become the top concern in global oil markets as tensions escalated in recent weeks, as the Middle East is a top supplier of both the fuel and the types of crude oil grades best suited for its production. Ukrainian attacks on refineries in Russia, another major diesel supplier, have further tightened the market and sent prices to record highs. European gasoil futures, a benchmark for diesel prices, settled at a record high on Tuesday. US ultra-low sulfur diesel futures also settled at a record high on Tuesday. â€œEurope has lost substantial diesel and jet fuel supply from the Middle East, while ongoing tensions in Eastern Europe have disrupted output at several major Russian refineries and prompted Moscow to restrict fuel exports,â€ said Frank Walbaum, market analyst at Naga.com. The Russian government has decided to extend restrictions on diesel exports for fuel producers until the end of October, Vedomosti daily reported late on Tuesday, citing two unidentified sources.

Date: 2026-09-17

Details: â€¢ India's central bank is actively draining surplus liquidity via bond sales, ensuring expected rate hikes, likely in October, effectively transmit Published September 17, 2026 Updated about 14 hours ago By Reuters MUMBAI: Indian bond traders expect the central bank to step up bond sales for liquidity absorption, as policymakers likely seek to strengthen transmission of expected rate hikes, after the first such auction in nine years recorded strong interest. Excess banking-system liquidity can weaken monetary-policy transmission, reducing banksâ€™ need to borrow at the Reserve Bank of Indiaâ€™s policy rate, delaying increases in lending rates and supporting demand for government bonds. Earlier in the day, the RBI absorbed cash equivalent to nearly 0.2% of total banking-system deposits, selling bonds worth 500 billion rupees ($5.21 billion) under an auction-based open market sale, its first net sale since November 2017. The RBI sold papers maturing between fiscal 2029 and fiscal 2032 at cutoff yields that were slightly above market estimates. It is due to sell papers worth 250 billion rupees each in the next two weeks. â€œThe RBI will likely draw down surplus liquidity through one more tranche of OMO sales or a CRR hike ahead of the October policy review, to ensure any rate action delivers its intended transmission,â€ said Alok Sharma, head of treasury at ICBC. Traders widely expect a 25-basis-point hike at the RBIâ€™s October policy meeting. Indiaâ€™s banking system liquidity surplus hit a record 11.6 trillion rupees on September 6, boosted by one-off central bank measures to attract foreign currency, but has since eased by a third to around 7.4 trillion rupees due to tax outflows and aggressive foreign exchange intervention from the central bank. The RBI undertook longer-duration variable-rate reverse repo auctions, but moved to a more durable form of cash withdrawal after demand fell short of expectations. â€œWe do not think 1 trillion rupees will be the end of the RBIâ€™s liquidity absorption efforts. The surplus remains exceptionally large and may require several trillion rupees of draining through OMOs and other tools,â€ said Krishna Bhimavarapu, APAC economist at State Street Investment Management. ICICI Securities Primary Dealership also expects the RBI to withdraw around 2 trillion rupees through bond sales, alongside the start of the rate-hike cycle in

Date: 2026-09-16

Details: â€¢ The broader Topix gained 0.79% to 4,069.02 after touching an intraday high of 4,072.31 Published September 16, 2026 Updated about 20 hours ago By Reuters TOKYO: Japanâ€™s Nikkei share gauge was flat on Wednesday as the broader market advanced, with investors weighing mixed economic signals and awaiting key central bank decisions. The benchmark Nikkei 225 edged 0.03% lower to 63,462.01 in early trading, poised for a fourth straight session of declines. The broader Topix gained 0.79% to 4,069.02 after touching an intraday high of 4,072.31. Investors remained cautious ahead of policy decisions by the Federal Reserve later on Wednesday and the Bank of Japan on Friday, with both expected to raise rates. Wall Street extended its selloff overnight, as rising US Treasury yields, debt concerns and soaring crude prices weighed on sentiment. Meanwhile, trade data released on Wednesday showed Japanâ€™s exports rose 19.3% year-on-year, but a sharp 28% jump in imports left a trade deficit of 1.106 trillion yen ($7.5 billion), underscoring the impact of higher energy costs. â€œUS markets ended lower but losses were limited, and investors are likely to stay on the sidelines ahead of the Fed and the Bank of Japanâ€™s policy meeting, making sharp moves unlikely,â€ Monex Securitiesâ€™ Yoshitaka Araya said in a note. Oil and coal product shares led gains among Topix industry groups, rising 5.14%, supported by a jump in Idemitsu Kosan that put it on track for a record close. Mining and marine transportation shares also advanced, up 3.37% and 2.33%, respectively, while information and communication shares lagged, down 1.20%. Breadth was positive, with 172 advancers on the Nikkei 225 against 52 decliners and one unchanged. The largest percentage gainers in the index were Idemitsu Kosan, up 5.59%, followed by Eneos Holdings, up 5.24%, and Mitsui Chemicals, up 3.80%. The biggest losers were Sumitomo Pharma, down 4.74%, followed by Otsuka Holdings, down 4.42%, and Mercari, down 4.37%.

Date: 2026-09-16

Details: PORTAL Published September 16, 2026 Updated about 23 hours ago By Recorder Report LAHORE: An interactive session on â€œThe Integrated Online Portal for Alternative Medicines and Health Productsâ€ was held under the auspices of the Health & OTC Standing Committee of the Lahore Chamber of Commerce & Industry (LCCI). The session was graced by senior officials from the Drug Regulatory Authority of Pakistan (DRAP), including Manzoor Buzdar, Director Health & OTC; Arsalan Tariq, Deputy Director; and Yasir Mehmood, Deputy Director MIS, along with Shamim Akhtar, Convener, Health & OTC Standing Committee, LCCI, and leaders and representatives of relevant industry associations. The session received an overwhelming and encouraging response, bringing together a large number of stakeholders from the Allopathic, Homeopathic, Nutraceutical, Herbal and allied health-product sectors, while a significant number of participants also joined online. The discussion provided an important platform for stakeholders to share their practical challenges, concerns and valuable suggestions regarding the proposed integrated online portal. The DRAP team provided valuable insight into the digital initiative, while participants discussed how an integrated platform could simplify regulatory processes, improve coordination, enhance transparency, facilitate businesses and make regulatory services more accessible to stakeholders. The enthusiastic participation reflected the industryâ€™s strong commitment to digital transformation, regulatory facilitation and a more efficient, transparent and stakeholder-friendly regulatory ecosystem. The Health & OTC Standing Committee of LCCI, under the convenership of Shamim Akhtar, remains committed to strengthening constructive engagement between DRAP, industry associations and the business community, and to supporting initiatives that promote ease of doing business and sustainable growth of Pakistanâ€™s health-products sector. Copyright Business Recorder, 2026

Date: 2026-09-16

Details: â€¢ Brent crude futures were down $3.63, or 3.3%, at $105.12 a barrel Published September 16, 2026 Updated about 10 hours ago By Reuters NEW YORK: Oil prices fell on Wednesday after reports that Saudi Arabia was offering more crude cargoes via Oman eased some concerns about Middle East supply disruptions, and a smaller-than-expected draw from the U.S. crude stockpile added more downward pressure. Brent crude futures were down $3.63, or 3.3%, at $105.12 a barrel by 11:23 a.m. EDT (1523 GMT). U.S. West Texas Intermediate futures were down $4.11, or 3.9%, at $101.72. Saudi Arabia is offering more loadings of crude oil to Asian refiners via ship-to-ship transfers off Omanâ€™s Sohar port, people familiar with the matter said, blunting some of the hit to global supply from attacks on the countryâ€™s East-West pipeline to the Red Sea. â€œNews around Saudi Arabia exporting from the Gulf suggests concerns that the disruption could be larger are easing,â€ said UBS analyst Giovanni Staunovo. Oil prices had gained more than $3 in the previous session after shipping industry sources said crude loadings at Saudi Arabiaâ€™s Red Sea export hub of Yanbu had been suspended and Riyadh had cancelled some cargo deliveries to European customers. The East-West pipeline feeds the port of Yanbu, which became Saudi Arabiaâ€™s main outlet for oil exports after Iran began blockading the Strait of Hormuz in retaliation for U.S. and Israeli attacks on the country at the end of February. Prior to the war, Hormuz was the conduit for one-fifth of the worldâ€™s oil and liquefied natural gas supply. Visible vessel passage through the Strait of Hormuz remained in the single digits at four on Tuesday, down from seven a day earlier, preliminary shipping data showed on Wednesday. That was well below the 10-day average of 18. US inventories weigh Oil prices came under further pressure after the U.S. Energy Information Administration on Wednesday reported a smaller-than-expected draw from U.S. crude inventories last week. Crude oil stocks in the top-producing nation fell about 640,000 barrels last week, the EIA data showed, compared to expectations of a 1.62 million barrel draw according to a Reuters poll of energy analysts. U.S. gasoline and distillate inventories rose last week, EIA data showed. The rise in diesel inventories was bigger than expected, while gasoline stockpiles were expected to have declined last week, according to the Reuters poll. The data was bearish for oil prices as it showed refined product stockpiles are maintaining themselves and even rising slightly while crude oil declines are flatlining, said John Kilduff, a partner at Again Capital. Middle East escalation Tensions ratcheted higher in the Middle East as Saudi warplanes pounded Yemen and Houthis launched drones and missiles at Saudi cities. The Houthis, who have swept through Yemeni towns along the Red Sea since last week, said they had launched fresh strikes on Yanbu. Citi expects near-term escalation in the Middle East to continue supporting crude oil and refined fuel prices before the Strait of Hormuz eventually reopens in the fourth quarter of 2026 with support from regional diplomatic efforts, the bank said in a note. Diesel has become the top concern in global oil markets as tensions escalated in recent weeks, as the Middle East is a top supplier of both the fuel and the types of crude oil grades best suited for its production. Ukrainian attacks on refineries in Russia, another major diesel supplier, have further tightened the market and sent prices to record highs. European gasoil futures, a benchmark for diesel prices, settled at a record high on Tuesday before easing on Wednesday. U.S. ultra-low sulfur diesel futures also settled at a record high on Tuesday. â€œDieselâ€™s strength reflects a product-specific shortage layered on top of expensive crude,â€ said Frank Walbaum, market analyst at Naga.com. â€œEurope has lost substantial diesel and jet fuel supply from the Middle East, while ongoing tensions in Eastern Europe have disrupted output at several major Russian refineries and prompted Moscow to restrict fuel exports.â€ Last week, the U.S. national average price of diesel surpassed $6 a gallon for the first time ever. The Russian government has decided to extend restrictions on diesel exports for fuel producers until the end of October, Vedomosti daily reported late on Tuesday, citing two unidentified sources. â€œI would expect, unless there is a peace deal or an improvement in the situation in Russia, that diesel prices stay supported,â€ said Staunovo at UBS.

Date: 2026-09-12

Details: FBR revises exemption certificate rules for Tax Year 2027, linking eligibility to a 90% income distribution requirement and formal approval status. ISLAMABAD: The Federal Board of Revenue (FBR) has revised the rules governing the issuance of income tax exemption certificates for Tax Year 2027, introducing new eligibility conditions for specified persons and approved not-for-profit organisations. The changes have been explained in Income Tax Circular No. 2 of 2026-27, issued to clarify major amendments to the Income Tax Ordinance, 2001 introduced through the Finance Act, 2026. According to the FBR, amendments have been made to Section 159 to streamline the issuance of exemption certificates for persons covered under clauses (99) and (99C) of Part I of the Second Schedule, as well as not-for-profit organisations approved under Section 2(36)(c) of the Ordinance. For this purpose, the FBR has introduced sub-sections (1C) and (1D) in Section 159. 90% income distribution requirement Under newly introduced sub-section (1C), a person will qualify for an exemption certificate for the subsequent tax year if they distributed 90% or more of their accounting income in accordance with clauses (99) and (99C) of Part I of the Second Schedule during the immediately preceding tax year. The requirement links eligibility for the exemption certificate to the taxpayerâ€™s compliance with the prescribed income-distribution condition. Where a person has no preceding tax year because they have commenced business for the first time, the exemption certificate will instead be issued on the basis of an undertaking submitted to the Commissioner. Under the undertaking, the person must commit to distributing the required 90% or more of accounting income during the relevant tax year. Certificates for approved not-for-profit organisations The FBR has also introduced sub-section (1D) covering persons approved under sub-clause (c) of clause (36) of Section 2. Under the new provision, a person granted such approval for a tax year will be eligible to receive an exemption certificate under Section 159(1) for the whole tax year. This provides a clearer basis for issuing exemption certificates to approved not-for-profit organisations and links the benefit to their formal approval under the Income Tax Ordinance. FBR clarifies exemption certificate eligibility The amendments are intended to simplify the exemption certificate process for qualifying taxpayers and organisations while linking eligibility more clearly to prescribed income-distribution requirements and formal approval status. The new framework also provides a specific mechanism for businesses commencing operations for the first time, allowing them to obtain an exemption certificate through an undertaking rather than relying on a previous yearâ€™s distribution record. The latest changes form part of the broader tax reforms introduced through the Finance Act, 2026 and explained by the FBR in Income Tax Circular No. 2 of 2026-27.

Date: 2026-09-12

Details: FBR reduces advance tax rates on property sales and purchases, replacing higher slab-based rates with lower flat rates under the Finance Act, 2026. ISLAMABAD: The Federal Board of Revenue (FBR) has announced reduced advance tax rates on property transactions, replacing earlier higher, slab-based rates with lower flat rates. The changes have been outlined in Income Tax Circular No. 2 of 2026-27, which explains major amendments to the Income Tax Ordinance, 2001 introduced through the Finance Act, 2026. Under the revised provisions, advance tax collected from sellers and purchasers at the time of registering, recording or attesting the transfer of immovable property has been reduced. Tax on sale of property Following the substitution of Division X of Part IV of the First Schedule, advance tax collected under Section 236C on the sale or transfer of immovable property has been set at a flat rate of 2.75% of the gross amount of consideration received. The revised rate replaces the earlier slab-based structure, simplifying the calculation of advance tax on property sales. The change is expected to lower the upfront tax liability for sellers compared with the previous rates. Tax on purchase of property The FBR has also revised advance tax on the purchase of immovable property. Following the substitution of Division XVIII of Part IV of the First Schedule, advance tax collected under Section 236K will now be charged at a flat rate of 1.25% of the fair market value of the immovable property. The new rate replaces the previous higher, slab-based rates applicable to property purchasers. The revised structure is intended to reduce the initial tax burden associated with property purchases while making the calculation and collection of advance tax more straightforward. Advance tax on international cards cut The FBR has also reduced the advance tax rate applicable to transactions through international credit, debit and prepaid cards. Under Division XXVII, the rate has been reduced from 5% to 0.5%. The amendment represents a substantial reduction in the advance tax applicable to international card transactions. Tax on TV plays and advertisements abolished The FBR has also made a consequential amendment following the abolition of advance tax on TV plays and advertisements under Section 236CA. As the tax has been abolished, Division XA of Part IV of the First Schedule has been omitted. This removes the corresponding advance tax provision from the First Schedule of the Income Tax Ordinance, 2001. FBR revises advance tax framework The latest changes form part of broader amendments introduced through the Finance Act, 2026, aimed at revising advance tax provisions and rationalising selected tax rates under the Income Tax Ordinance, 2001. The move reduces certain upfront tax obligations while replacing complex slab-based calculations with simpler flat rates for specified property transactions. For the property sector, the revised rates could provide greater clarity for buyers and sellers when estimating their tax liabilities at the time of transferring immovable property.

Date: 2026-09-12

Details: FBR gives tax officials new powers to order taxpayer re-audits under Section 177, subject to a hearing and prior approval from the Chief Commissioner. ISLAMABAD: The Federal Board of Revenue (FBR) has clarified that tax officials may order the re-audit of taxpayersâ€™ accounts during Tax Year 2027 under amendments introduced through the Finance Act, 2026. The FBR explained the new provision in Income Tax Circular No. 2 of 2026-27, which sets out major amendments made to the Income Tax Ordinance, 2001. According to the FBR, a new sub-section (68) has been inserted into Section 177 of the Income Tax Ordinance, empowering the Commissioner to order a re-audit in specified circumstances. FBR sets conditions for re-audit Under the amended provision, the Commissioner may consider several factors when deciding whether a re-audit is required. These include the nature and complexity of the taxpayerâ€™s accounts, the volume of accounts, doubts regarding their correctness, the multiplicity of transactions and the specialised nature of the taxpayerâ€™s business. However, the Commissioner cannot order a re-audit without following specified procedural requirements. The taxpayer must first be provided with a reasonable opportunity of being heard. The Commissioner must also obtain prior approval from the Chief Commissioner before directing a re-audit. Re-audit may involve specialist professionals Once the required approval has been obtained, the Commissioner may direct that the taxpayerâ€™s accounts be examined again by an accountant. The amended provision also allows inventory to be re-valued by a cost accountant, while actuarial values contained in the accounts may be determined by an actuary. The professionals appointed for these purposes must be selected from a panel nominated by the FBR. This provision gives tax authorities access to specialised expertise when dealing with complex accounts, inventory valuations or actuarial calculations. Taxpayers can object to nominated professionals The amendment also introduces a mechanism through which a registered person may object to the nomination of a particular accountant or cost accountant. This provides taxpayers with an avenue to raise concerns about the professional selected for the re-audit or valuation process. The mechanism forms part of the procedural safeguards accompanying the FBRâ€™s expanded re-audit powers. New re-audit powers strengthen tax scrutiny The new provision is intended to provide tax authorities with additional tools to examine complex or questionable accounts while maintaining procedural safeguards for taxpayers. The requirement to provide a reasonable opportunity of being heard, together with the need for prior approval from the Chief Commissioner, creates an additional layer of oversight before a re-audit can be ordered. The changes form part of the wider reforms introduced through the Finance Act, 2026 to strengthen tax administration, improve scrutiny of taxpayer declarations and enhance the FBRâ€™s audit and assessment framework for Tax Year 2027.

Date: 2026-09-12

Details: FBR requires Inland Revenue officers to document audit observations and findings after considering taxpayersâ€™ explanations. ISLAMABAD: The Federal Board of Revenue (FBR) has introduced a requirement for Inland Revenue officers to issue a complete audit report containing their observations and findings after completing sales tax audit proceedings. The FBR issued Circular No. 1 of 2026 to explain key amendments to the Sales Tax Act, 1990, introduced through the Finance Act, 2026. According to the circular, the previous Section 25 of the Sales Tax Act, 1990, did not require an Inland Revenue officer to issue a formal audit report after completing audit proceedings. However, a new sub-section (8B) of Section 25 has now been inserted, requiring the Inland Revenue officer to issue an audit report containing the audit observations and findings. The report must be issued after obtaining the registered personâ€™s explanation on all issues raised during the audit. The amendment is intended to improve transparency in the sales tax audit process by formally documenting the findings of tax authorities while ensuring that taxpayersâ€™ explanations are considered before the audit report is finalised. Commissioner empowered to order re-audit The FBR has also introduced a new sub-section (8A) of Section 25, empowering the Commissioner to direct a registered person to have their accounts re-audited by an accountant and their inventory revalued by a Cost Accountant. According to the FBR, the Commissioner may exercise this power after considering several factors, including the nature and complexity of the accounts, volume of transactions, doubts regarding the correctness of accounts and multiplicity of transactions. However, the Commissioner is required to provide the registered person with a reasonable opportunity of being heard before exercising these powers. The amendments strengthen the FBRâ€™s ability to scrutinise sales tax records while introducing additional procedural safeguards for registered persons. The requirement to issue a complete audit report also provides taxpayers with a formal record of the tax authoritiesâ€™ observations and findings following the completion of audit proceedings. Overall, the changes seek to enhance the effectiveness and transparency of sales tax audits while ensuring that registered persons have an opportunity to respond to issues identified by Inland Revenue officers.

Date: 2026-09-12

Details: Registered persons must now issue invoices for taxable and exempt supplies, including advance receipts, under the amended Sales Tax Act. ISLAMABAD: The Federal Board of Revenue (FBR) has made it mandatory for registered sales tax persons to issue invoices for both taxable and exempt supplies, as part of its ongoing drive to digitalise Pakistanâ€™s sales tax system. The FBR issued Circular No. 1 of 2026, explaining major amendments to the Sales Tax Act, 1990 introduced through the Finance Act, 2026. According to the circular, under the existing sub-section (1) of section 23 of the Sales Tax Act, 1990, a registered person was previously required to issue a sales tax invoice only for taxable supplies. The provision has now been amended to require registered persons to issue invoices for both taxable and exempt supplies. The requirement also applies to invoices issued against advance receipts. FBR invoice number required The invoices must carry a verifiable and unique FBR invoice number, enabling the tax authority to digitally track and verify transactions. The introduction of a unique invoice number is expected to give the FBR greater visibility over commercial transactions and strengthen its ability to verify information submitted by registered persons. The measure forms part of the Boardâ€™s wider digitalisation of sales tax administration and its efforts to improve transparency in the declaration of business activities. Exempt supplies brought into digital trail The amendment will give the tax authority greater visibility into transactions involving both taxable and exempt supplies. Previously, exempt supplies did not fall within the same invoicing requirement under the relevant provision. Bringing them within the mandatory invoicing framework will create a digital trail for a broader range of commercial transactions. The FBR is expected to use the additional transaction data to strengthen documentation and monitoring of economic activity while improving compliance with sales tax requirements. FBR expands sales tax monitoring The new requirement is also intended to reduce gaps in sales tax reporting by ensuring that transactions involving exempt supplies are documented through invoices that can be digitally verified. The measure expands the scope of the existing invoicing framework while supporting the FBRâ€™s wider shift towards digital monitoring and data-based sales tax administration. Registered sales tax persons will therefore need to ensure that invoices issued for taxable and exempt supplies, including relevant advance receipts, meet the amended requirements and contain the required FBR invoice identification.

Date: 2026-09-12

Details: The new regime will separate taxpayers from tax officials during assessment, audit and related proceedings through a National Faceless Centre. ISLAMABAD: The Federal Board of Revenue (FBR) has outlined a new faceless sales tax assessment regime that will apply from Tax Year 2027 onwards, aimed at separating taxpayers from tax officials during assessment, audit and related proceedings. According to FBR Circular No. 1 of 2026, the Finance Act, 2026 introduced a comprehensive faceless framework into the Sales Tax Act, 1990. The definition of â€œassessmentâ€ under section 2(17A) has been expanded to include faceless assessment, while a new section 32C provides for the establishment of a National Faceless Centre. National Faceless Centre to conduct proceedings The National Faceless Centre will conduct sales tax proceedings through electronic means and may comprise a Director General, Chief Commissioners, Commissioners and other prescribed authorities. Its wings and units will perform separate functions, with audit, assessment and quality control in a specific case and tax period assigned to different officers. All communication between the relevant units and registered persons or their authorised representatives will take place electronically. The separation of functions is intended to create a more structured assessment process while reducing direct interaction between taxpayers and individual tax officials. Faceless audits and e-hearings introduced Under newly inserted section 11H, audits under sections 25 and 72B for cases specified by the Board may also be conducted through the faceless system. Where a hearing or statement on oath is required, proceedings will be conducted through an e-hearing. The identity of the officer conducting the proceedings, including their facial and voice identity, will remain confidential under the new framework. This provision establishes electronic hearings as part of the faceless assessment and audit process while maintaining the confidentiality of the officials involved. Appeals can also be processed electronically The new section 45C allows appeals under section 45B to be processed through the National Faceless Centre. Meanwhile, section 30AA provides faceless jurisdiction to Inland Revenue authorities appointed at the centre. Such jurisdiction may be exclusive or concurrent, while the identity of the authority exercising jurisdiction will remain confidential. Notices and assessments cannot be challenged solely on confidentiality The amended law further provides that notices, orders, demands or assessments cannot be challenged solely on the grounds of lack of jurisdiction or the confidentiality of the authorityâ€™s identity. The new framework represents a significant shift towards technology-based administration of sales tax proceedings. By separating assessment, audit and quality-control functions and conducting communication and hearings electronically, the FBR aims to establish a more structured and digitally managed sales tax assessment process from Tax Year 2027.

Date: 2026-09-12

Details: The FBR can now adjust the input tax adjustment ratio based on taxpayersâ€™ compliance with digital invoicing, POS and other electronic systems. ISLAMABAD: The Federal Board of Revenue (FBR) has been empowered to increase or reduce the ratio of input tax adjustment for sales tax during Tax Year 2027, depending on taxpayersâ€™ compliance with the Boardâ€™s digital and electronic systems. The FBR issued Circular No. 1 of 2026 explaining major amendments to the Sales Tax Act, 1990 introduced through the Finance Act, 2026. According to the circular, an amendment to Section 8B of the Sales Tax Act, 1990 empowers the Board to reduce or enhance the ratio of input tax adjustment based on taxpayersâ€™ compliance or non-compliance with its digital and electronic systems. Digital compliance linked to tax adjustment The amended provision covers a range of systems used by the FBR for digital integration and monitoring of economic activity. These include production monitoring systems, digital invoicing, e-bility, point-of-sale (POS) systems and other electronic systems used for the digital integration of data. Under the revised framework, the extent to which a taxpayer can adjust input tax will therefore be linked to their compliance with the FBRâ€™s digital integration requirements. Taxpayers that comply with the specified digital and electronic systems could benefit from an enhanced input tax adjustment ratio, while non-compliance could result in a reduction. FBR strengthens digital sales tax monitoring The amendment forms part of the governmentâ€™s broader efforts to increase electronic monitoring and documentation of economic activity and improve sales tax compliance. By linking input tax adjustment with digital compliance, the FBR aims to encourage businesses to integrate their operations with the Boardâ€™s electronic systems and improve the flow of transaction data. The revised powers will apply during Tax Year 2027 and represent another step towards expanding digital enforcement and documentation within Pakistanâ€™s sales tax regime. The measure is expected to place greater importance on taxpayersâ€™ compliance with FBR-mandated digital systems when determining their entitlement to input tax adjustments.

Date: 2026-09-12

Details: Published September 11, 2026 Updated about 23 hours ago ISLAMABAD: The government has agreed with the International Monetary Fund (IMF) to limit the Federal Board of Revenueâ€™s (FBR) outstanding tax refund stock to Rs390 billion, effectively barring the tax machinery from withholding refunds beyond the agreed ceiling. This was revealed by senior FBR officials while briefing the Senate Standing Committee on Finance and Revenue, which met with Saleem Mandviwalla in the chair here on Thursday. An FBR official added that refunds of Rs500 billion were paid during the last fiscal year. Minister of State for Finance Bilal Azhar Kiyani, during informal talks with the media before the start of the committee meeting, hinted that an IMF staff mission may arrive on September 23 or 24. The committee met to consider matters relating to tax refunds, sales tax on unsold jewellery returned under the Self-Consignment Scheme, honorarium for medical staff deployed during the Budget Session, and other financial and banking issues. The officials said the FBR had already disbursed around Rs197 billion in refunds during the first two months of the current fiscal year, up Rs40 billion from Rs157 billion paid during the corresponding period last year. The Committee was informed that the matter regarding payment of honorarium equivalent to five monthsâ€™ basic pay to medical staff performing duties during the Budget Session in Parliament House has been resolved. Kayani stated that the Ministry of Finance and Revenue has issued the requisite instructions in this regard. The Committee also discussed the withholding of legitimate income tax refunds by the Federal Board of Revenue (FBR). Representatives of the affected chemical company stated that its tax refunds had remained pending for the last six years, with more than Rs270 million. The Committee observed that delayed refunds adversely affect the cash flow of businesses and must be amicably addressed. Mandviwalla highlighted that under the new system, refunds were expected to be processed within 72 hours. FBR officials assured the Committee that the matter would be resolved within one month. The Committee also directed the FBR to release the refunds and report to the Committee within 30 days. Senator Talha Mahmood stressed the need to make the FBR more taxpayer-friendly and sought details of tax refunds for the last five years. FBR officials informed the Committee that a new system had been introduced to reduce discretion, and now refunds are being issued systemically in sequence. The officials further informed the Committee that refunds amounting to approximately Rs197 billion had been issued during the first two months of the current fiscal year, compared to Rs157 billion during the corresponding period of the previous fiscal year, representing an increase of Rs40 billion. Under the IMF-related condition, the FBR cannot retain refunds exceeding Rs390 billion, and therefore refunds cannot be withheld for an extended period. Senator Abdul Qadir observed that if a taxpayer receives a refund after two years, it indicates that the refund was genuinely due. He called for action against officials responsible for unnecessary delays in the release of refunds. The Committee received a further briefing from the State Bank of Pakistan on the implementation of Foreign Exchange Circular No. 16 of June 24, 1999, regarding payment of interest/profit on Foreign Currency Accounts and measures aimed at protecting foreign investment and depositor confidence. Additionally, the Committee was also briefed on the request of the Jewellers & Gems Traders Association of Pakistan for removal of the sales tax on unsold jewellery returned under the Self-Consignment Export Scheme. The FBR Officials informed that under the Entrustment Scheme, import of unsold jewellery is exempted from sales tax after completion of the required customs documentation. The representatives of the Jewellers & Gems Traders Association of Pakistan pointed out that while exports are exempted from taxes, an 18 percent sales tax is imposed when the unsold gold and jewellery are returned under the self-consignment scheme, creating an additional burden on exporters. They also highlighted issues relating to the treatment of gold and gemstones under the relevant SRO 760(I)/2013. In view of the SRO, the Chairman of the Committee stated that the Ministry of Commerce would be invited to the next meeting to discuss the matter and resolve it amicably. Copyright Business Recorder, 2026

Date: 2026-09-12

Details: Published September 11, 2026 Updated about 22 hours ago PESHAWAR: Khyber Pakhtunkhwa Revenue Authority (KPRA) has officially launched its dedicated mobile application, â€˜KPRA Sahulatâ€™, on the Google Play Store. The application is designed to provide citizens, taxpayers, and business owners with seamless digital access to essential sales tax services and transparent grievance redressal mechanisms. The KPRA Sahulat app serves as a comprehensive citizen services platform. Its key features include real-time invoice verification through QR code scanning, a direct reporting system for unverified or suspicious receipts, an interactive sales tax calculator, offline access to Schedule-II tax rates, and a live tax calendar to track filing deadlines. Additionally, citizens can verify registered businesses via NTN; track submitted complaints, and access official notifications and taxpayer guides. Highlighting the significance of the digital milestone, Director General KPRA, Miss Irum Naz, stated that the initiative directly aligns with the provincial governmentâ€™s vision of governance reform and public service delivery. â€œKPRA Sahulat represents a major stride forward in empowering the people of Khyber Pakhtunkhwa. In alignment with the forward-looking vision of Chief Minister Muhammad Sohail Afridi and Chief Secretary Shahab Ali Shah, KPRA remains steadfast in providing accessible, transparent, and seamless public services. This digital platform equips citizens with the tools they need to engage effortlessly, exercise their rights, and voice their concerns with complete ease and confidence,â€œ said DG KPRA. DG KPRA expressed her sincere gratitude to the Advisor to the Chief Minister of Finance, Muzzammil Aslam, and Secretary Finance, Captain Kamran Ahmad Afridi (retd), whose continuous support and guidance have enabled KPRA to make remarkable strides and emerge as an exemplary public sector institution. Miss Irum Naz lauded the dedicated efforts of the KPRA ICT team for conceptualizing and developing the application in-house to serve the citizens of Khyber Pakhtunkhwa effectively. Addressing iOS users, DG KPRA announced that the development team is actively finalizing the iOS version of the application, which will soon be available on the Apple App Store to ensure complete coverage across all mobile platforms. The KPRA Sahulat app is currently available for download free of charge on the Google Play Store for all Android users. Copyright Business Recorder, 2026

Date: 2026-09-11

Details: Written by Hamza Shahnawaz in IT & Telecom, Taxation Pakistan reduces regulatory and additional customs duties on imported mobile phones for FY2026-27, with premium smartphones receiving the largest cut. Pakistan has reduced regulatory duty (RD) and additional customs duty (ACD) on imported mobile phones for fiscal year 2026-27, lowering the duty burden on premium smartphones and other cellular devices. According to a brief issued by the Ministry of Commerce, the regulatory duty on completely built-up (CBU) smartphones priced above $500 has been reduced from Rs22,000 to Rs17,600 per handset. The move represents a saving of Rs4,400 per phone, equivalent to a 20% reduction in the fixed regulatory duty for the highest-priced handset category. Revised mobile phone regulatory duty rates Under the revised tariff structure, ACD has been reduced from 6% to 4% across the listed smartphone and cellular-phone categories. Regulatory duty has also been lowered according to the value of imported handsets. The revised RD slabs for CBU smartphones are: â€¢ Up to $30: Rs240, down from Rs300 â€¢ $30-$100: Rs2,400, down from Rs3,000 â€¢ $100-$200: Rs6,000, down from Rs7,500 â€¢ $200-$350: Rs8,800, down from Rs11,000 â€¢ $350-$500: Rs12,000, down from Rs15,000 â€¢ Above $500: Rs17,600, down from Rs22,000 For smartphones and cellular phones imported in completely knocked-down (CKD) or semi-knocked-down (SKD) condition, regulatory duty has been reduced from 5% to 4%. ACD on these categories has also been cut from 6% to 4%. Duty cuts introduced under FY2026-27 Budget The Ministry of Commerce said the tariff reductions were introduced under the FY2026-27 Budget as part of wider tariff rationalisation measures under the National Tariff Policy 2025-30. The changes are aimed at streamlining the tariff structure while supporting the governmentâ€™s broader objectives for the mobile-device sector. Mobile phone imports surge The duty reductions come after a significant increase in Pakistanâ€™s mobile phone imports during FY2025-26. According to the ministry, total imports of smartphones and cellular phones increased from $1.497 billion to $1.888 billion during the year. Imports of CBU smartphones more than doubled to $357.7 million, indicating stronger demand for fully assembled handsets. The rise in imports highlights growing demand for mobile devices in Pakistan, particularly for smartphones imported in finished form. Mobile manufacturing policy expires The ministry also noted that the Mobile Device Manufacturing Policy 2020-25 has expired, while a new policy has yet to receive approval from the federal government. However, incentives previously available to mobile phone manufacturers and assemblers under the expired policy remain protected through the Fifth Schedule of the Customs Act, 1969. This provides continued support for existing industry incentives while the government considers the framework for a new mobile-device manufacturing policy. Premium smartphones could become more affordable The latest tariff adjustments are expected to reduce the import duty burden on mobile handsets, with the most significant fixed-duty saving applying to smartphones priced above $500. The reduction could make imported premium smartphones relatively more affordable, although the final retail price will also depend on other taxes, exchange-rate movements, import costs and market conditions. At the same time, the government is continuing to support domestic mobile-device assembly and manufacturing through existing tariff incentives. The latest measures therefore seek to balance lower import costs for consumers with continued policy support for the development of Pakistanâ€™s local mobile-device industry.

Date: 2026-09-11

Details: Written by Faisal Shahnawaz in Taxation FBR officials explain fixed tax scheme, online registration and facilitation measures to traders in Hyderabad markets. The Regional Tax Office (RTO) Hyderabad has launched an awareness campaign to educate small traders about the Federal Board of Revenueâ€™s (FBR) Small Shopkeepers Fixed Tax Scheme. The initiative is aimed at helping small businesses understand the registration process and encouraging them to join the formal tax system. The awareness drive was conducted on the instructions of the Chief Commissioner Inland Revenue, RTO Hyderabad. FBR officers and staff visited Gul Centre and surrounding commercial markets to directly engage with shopkeepers and provide information about the newly introduced facilitation scheme. An information desk was established at Gul Centre, where tax officials explained key features of the scheme to traders. The officials briefed shopkeepers about the simplified registration procedure, fixed tax rates and available digital options for enrolment through the FBRâ€™s online portal and mobile application. Officials also clarified that the FBR fixed tax scheme for small shopkeepers has been designed as a facilitative measure rather than an enforcement-focused initiative. Traders were encouraged to register and become part of the documented economy while benefiting from a comparatively straightforward tax compliance process. As part of the campaign, the RTO Hyderabad team also visited a Dawlance Electronics showroom. Officers held a detailed discussion with the proprietor and employees, responding to their questions and explaining the practical aspects of the fixed tax arrangement. The interaction was described as positive, with traders welcoming the departmentâ€™s efforts to communicate directly with the business community. Shopkeepers also assured the visiting officials of their cooperation with the registration and documentation process. The Chief Commissioner Inland Revenue said the awareness campaign would continue at commercial centres across Hyderabad. The official stressed that the department intends to build greater taxpayer confidence through communication, guidance and facilitation. The ongoing outreach reflects FBRâ€™s broader efforts to expand the documented tax base by bringing smaller businesses into the formal system through simplified compliance measures.

Date: 2026-09-11

Details: Written by Faisal Shahnawaz in Taxation Karachi Tax Bar Association urges FBR to extend the Tax Year 2026 return deadline, citing increased disclosures, IRIS issues and growing compliance demands. KARACHI: The Karachi Tax Bar Association (KTBA) has urged the Federal Board of Revenue (FBR) to extend the deadline for filing income tax returns for Tax Year 2026, citing a substantial increase in reporting and disclosure requirements. The KTBA said the FBRâ€™s objective of obtaining more comprehensive information through income tax return declarations had significantly increased the time required by taxpayers and tax professionals to prepare and electronically file accurate returns. The association called on the FBR to provide taxpayers with sufficient additional time to meet the enhanced reporting requirements and achieve the highest possible level of compliance. A KTBA delegation met FBR Chairman Rashid Mehmood Langrial in Karachi on September 9, 2026, to discuss several taxation matters, including income tax return filing, refunds of tax collected under Section 7E of the Income Tax Ordinance, 2001, taxpayer facilitation and measures to improve voluntary compliance. The FBR delegation included Member Inland Revenue (Operations) Zubair Bilal, Member Inland Revenue (Policy) Sajjad Taslim Azam and Chief Revenue Domain Officer of Pakistan Revenue Automation Limited (PRAL) Zain ul Abideen Sahi. The KTBA delegation was led by President Mehmood Bikiya and included former President Abdul Qadir Memon, Vice President Saud ul Hassan, General Secretary Shams Mohiuddin, Joint Secretary Abdul Wahab and Librarian Muhammad Tarique. IRIS return filing issues discussed The meeting reviewed technical problems affecting income tax return forms and the IRIS portal. The FBR acknowledged KTBAâ€™s active engagement with PRAL to help resolve technical issues and facilitate timely return filing. According to the meeting, around 2.2 million income tax returns had been filed by September 9, compared with 1.724 million during the corresponding period of the previous year. The FBR and KTBA agreed that continued coordination was necessary to ensure the smooth functioning of the IRIS portal and the prompt resolution of technical problems. Section 7E tax refunds under review The meeting also discussed refunds relating to tax collected under Section 7E of the Income Tax Ordinance, 2001. The FBR informed the KTBA that a dedicated mechanism was being developed for issuing refunds in light of the judgment of the Federal Constitutional Court. The tax authority said appropriate instructions would be issued for priority processing of eligible refund claims. The proposed mechanism is intended to facilitate taxpayers and improve the efficiency of the refund process. Digital integration and e-invoicing The KTBA welcomed the FBRâ€™s technological and digitalisation initiatives aimed at improving the quality of tax declarations and documentation. However, the association stressed the need for sustained taxpayer awareness and facilitation to support effective implementation. The KTBA also raised concerns over penal action initiated by field formations in certain cases involving the service industry. It requested that such cases be examined individually under the applicable law and dealt with appropriate leniency where warranted to encourage wider compliance. Faceless audits and AI assessments The prospective introduction of faceless assessments and artificial intelligence-based initiatives for future tax assessment and monitoring was also discussed. The KTBA emphasised the importance of preparing taxpayers for the new system through greater awareness and compliance support. The association recommended a phased transition towards the forthcoming assessment regime to minimise avoidable difficulties for taxpayers. FBR seeks support for Shopkeepers Scheme The FBR sought KTBAâ€™s assistance in creating awareness about the Shopkeepers Scheme and encouraging taxpayers to comply with its requirements. The KTBA assured the FBR of its continued cooperation in promoting taxpayer awareness and compliance. The association also expressed its readiness to work with the tax authority to improve taxpayersâ€™ understanding of the scheme. FBR and KTBA reaffirm cooperation The meeting concluded in a constructive and cordial atmosphere, with both sides reaffirming their commitment to regular dialogue and stronger institutional coordination. The FBR and KTBA agreed that continued engagement would help improve tax administration, taxpayer facilitation and voluntary compliance. The KTBA appreciated the FBR Chairman and senior officials for their time, responsiveness and continued engagement with the tax bar.

Date: 2026-09-11

Details: Written by Hamza Shahnawaz in Budget 2026-27, Taxation FBR makes electronic income tax return filing mandatory through IRIS and requires companies to submit financial statements in electronically readable formats. ISLAMABAD: The Federal Board of Revenue (FBR) has made electronic return filing mandatory under major changes introduced to the Income Tax Ordinance, 2001 through the Finance Act, 2026. The FBR outlined the changes in Income Tax Circular No. 2 of 2026-27, which explains key amendments relating to the electronic filing of income tax returns and associated documents. Electronic filing through IRIS made mandatory The FBR said sub-section (2A) of Section 114 has been substituted to require taxpayers to file their income tax returns electronically through the IRIS system in the manner prescribed by the Board. The amended provision also empowers the FBR to make rules governing electronic filing, including procedures relating to verification, digital signatures and other matters connected with the electronic submission of returns, statements and documents. The changes establish electronic filing as a central requirement of the income tax return process, further reducing reliance on paper-based submissions. Companies face additional filing requirement The FBR has introduced a specific requirement for companies under the proviso to the amended provision. For Tax Year 2026 and onwards, companies must submit the financial statements accompanying their income tax returns only in an electronically readable file format. The requirement is intended to ensure that financial information submitted by companies can be processed and managed through the FBRâ€™s digital systems. FBR expands digital tax administration The amendments are aimed at strengthening the digital filing framework and enabling the tax authority to process, verify and manage taxpayer information electronically. The latest measures form part of broader digitalisation initiatives introduced through the Finance Act, 2026 to modernise income tax administration and increase reliance on electronic filing and digitally processed taxpayer information. The move is expected to further integrate taxpayers and businesses into the FBRâ€™s digital tax administration system, while providing the Board with information in formats that can be electronically processed.

Date: 2026-09-11

Details: Written by Hamza Shahnawaz in Taxation, Top stories FBR revises capital gains tax provisions for securities held through foreign currency and non-resident accounts, strengthening tax collection requirements. ISLAMABAD: The Federal Board of Revenue (FBR) has introduced changes to the capital gains tax framework covering securities transactions and investments held through foreign currency and non-resident accounts. The FBR issued Income Tax Circular No. 2 of 2026-27, explaining major amendments to the Income Tax Ordinance, 2001 introduced through the Finance Act, 2026. Changes to Section 100B Under amendments to Section 100B, references to a non-banking finance company in clause (b) of sub-section (2) have been omitted, along with clauses (c) and (d) of the same sub-section. The changes extend the application of special provisions under Section 37A, read with the rules contained in the Eighth Schedule, to capital gains arising from the disposal of securities by a non-banking finance company, a modaraba and a company in respect of debt securities. A new sub-section (3) of Section 100B has also been introduced covering mutual funds, banking companies and insurance companies. Under the new provision, the National Clearing Company of Pakistan Limited (NCCPL) will compute and determine the capital gain for these entities according to the mechanism prescribed under Section 37A. However, mutual funds, banking companies and insurance companies will continue to deposit tax on capital gains in accordance with the applicable provisions of the Income Tax Ordinance, 2001. Tax deduction on foreign currency accounts The FBR has also revised sub-section (1DA) of Section 152, introducing specific tax deduction requirements for banks maintaining certain foreign currency and non-resident accounts. Under the substituted provision, every banking company maintaining a Foreign Currency Value Account (FCVA), Foreign Currency Business Value Account (FCBVA), Non-Resident Rupee Value Account (NRVA) or Non-Resident Rupee Business Value Account (NRBVA) will be required to deduct tax from capital gains arising from the disposal of specified financial instruments. The requirement applies to capital gains arising from the disposal of debt instruments, government securities and certificates, including their Shariah-compliant variants, where these are invested through the specified accounts. Tax will be deducted at the rate prescribed under Division II of Part III of the First Schedule to the Income Tax Ordinance, 2001. FBR strengthens capital gains tax administration The amendments form part of broader changes introduced through the Finance Act, 2026 to strengthen the collection and administration of tax on capital gains from securities and financial investments. The revised framework also clarifies the role of NCCPL and banking companies in determining and collecting tax on capital gains associated with specified securities and accounts.

Date: 2026-09-11

Details: Written by Hamza Shahnawaz in Budget 2026-27, Taxation FBR clarifies that inherited immovable property will be assigned its fair market value as the beneficiaryâ€™s cost under Finance Act 2026 amendments. ISLAMABAD: The Federal Board of Revenue (FBR) has clarified that immovable property acquired through inheritance will be treated at its fair market value as the cost of the property in the hands of the beneficiary under amendments introduced through the Finance Act, 2026. The FBR issued Income Tax Circular No. 2 of 2026-27, explaining major amendments to the Income Tax Ordinance, 2001 introduced through the Finance Act, 2026. Fair market value applies to inherited property Under the newly inserted sub-section (8A) of Section 76, where an individual acquires immovable property through inheritance, the cost of the property in the hands of that individual will be its fair market value. The fair market value will be determined under sub-section (5) of Section 68 at the time the property is transferred to the beneficiary. The amendment provides greater clarity on the valuation of inherited property for income tax purposes, particularly where the beneficiary subsequently disposes of the asset. By establishing the fair market value as the beneficiaryâ€™s cost, the provision sets out a clearer basis for determining the tax treatment of any subsequent disposal of the inherited property. FBR clarifies transmission after death The FBR has also introduced an explanation in Section 79 to clarify the scope of property transmission following the death of an individual. Under the explanation, transmission of immovable property to a beneficiary following the death of a person will also include the transmission of assets arising from a family settlement among family members following the personâ€™s death. The clarification effectively brings qualifying family settlements made as a consequence of death within the relevant provisions governing the transmission of assets. Finance Act 2026 expands property tax rules The amendments form part of wider changes to the Income Tax Ordinance, 2001 introduced through the Finance Act, 2026 and explained by the FBR in its latest income tax circular. The revised provisions provide greater certainty over how inherited immovable property and qualifying family settlements are treated for income tax purposes, particularly when inherited assets are later transferred or disposed of.

Date: 2026-09-08

Details: Written by Hamza Shahnawaz in Taxation RTO Islamabad holds awareness seminar at ICCI to help small shopkeepers understand income tax return filing under the Small Shopkeepers Return initiative ISLAMABAD: The Regional Tax Office (RTO) Islamabad and its Domain Team held an awareness seminar at the Islamabad Chamber of Commerce and Industry (ICCI) to guide small shopkeepers through the income tax return filing process. More than 100 small traders attended the seminar and received detailed guidance on filing their tax returns under the Small Shopkeepers Return initiative. Tax officials explain return filing process During the session, the Chief Commissioner and Commissioners of RTO Islamabad, along with members of the Domain Team, explained the return filing process step by step. Officials focused on the requirements and procedures relevant to small businesses and highlighted the practical and legal benefits of complying with income tax obligations through the Small Shopkeepers Return. The session was designed to help traders better understand the filing requirements and make the process easier for small businesses. Traders raise technical concerns An interactive question-and-answer session followed the presentation, allowing traders to raise their technical concerns directly with tax officials. The RTO team provided hands-on guidance to participants, helping them understand the filing procedure and address difficulties they might encounter while submitting their returns. The initiative was aimed at improving tax awareness among small businesses and facilitating compliance with income tax requirements. ICCI appreciates RTO outreach The seminar concluded with remarks from the President of ICCI, who thanked the leadership of RTO Islamabad and the Domain Team for visiting the chamber and directly engaging with the small business community. He appreciated the tax authoritiesâ€™ proactive approach towards facilitating traders and helping them understand the income tax return filing process. The seminar forms part of broader efforts by the tax authorities to improve taxpayer facilitation and encourage greater participation of small businesses in the formal tax system.

Date: 2026-09-08

Details: Written by Hamza Shahnawaz in Taxation Tax authority expands list of eligible iron and steel manufacturers subject to sales tax of Rs5 per unit of electricity consumed ISLAMABAD: The Federal Board of Revenue (FBR) has amended its Sales Tax General Order (STGO) 16 of 2026 to add five more iron and steel manufacturers to the list of taxpayers subject to sales tax at Rs5 per unit of electricity consumed. The FBR issued Sales Tax General Order No. 22 of 2026 â€“ IR Operations, amending STGO 16/2026 dated August 6, 2026. The order was issued under the third proviso to sub-section (2) of Section 6 of the Sales Tax Act, 1990, read with clause (g) of SRO 1245(I)/2026 dated July 31, 2026. Five steel manufacturers added to FBR list Under the amendment, the following five steel manufacturers have been added to the list: â€¢ Rasheed Steel â€” MN 3348026 â€¢ Batala Steel Industries â€” MN 9184872 â€¢ Royal Steel â€” MN 2538271 â€¢ Platinum Steel Mill (Private) Limited â€” MN 5593212 â€¢ KBS Steel Furnace â€” MN 4288071 The order states that the relevant electricity reference numbers and distribution companies (DISCOs) will correspond to the respective electricity connections of each taxpayer. FBR sets eligibility criteria for steel manufacturers According to the FBR, the eligibility of the newly included taxpayers was determined under the criteria prescribed in SRO 1245(I)/2026. The criteria include the consumption of scrap and electricity units for the production of steel products, as well as the import of scrap under specified Harmonised System (HS) codes. The FBR said the list of eligible taxpayers may be revised from time to time either by the Board or on recommendations from the concerned Commissioner Inland Revenue (CIR). The Board and relevant field formations may also independently examine the eligibility of any registered manufacturer for inclusion in or exclusion from the list based on the prescribed criteria. Taxpayers can approach Commissioner Inland Revenue The FBR further stated that taxpayers facing hardship may approach the concerned Commissioner Inland Revenue for appropriate consideration. The amended STGO has immediate effect and applies to all electricity connections held by the five newly listed taxpayers.

Date: 2026-09-08

Details: â€¢ RBI's $8-15 billion dollar sales last week drained rupee liquidity from the banking system, impacting interbank borrowing costs Published September 7, 2026 Updated about 13 hours ago By Reuters MUMBAI: The Reserve Bank of India ramped up its FX intervention last week, selling at least $8 billion to bolster the rupee, six bankers said, as a deluge of policy-driven dollar inflows gave the central bank more room to support the currency. The bankers estimated the RBIâ€™s market presence at between $8 billion and $15 billion, with sustained interventions helping lift the rupee to an over two-month high of 94.2850 on September 3. The central bankâ€™s discounted hedging facility for overseas borrowings by state-run firms and banks, alongside a free-of-cost hedging facility for banks to raise overseas FX deposits have drawn in more than $136 billion. These inflows have likely given the RBI more room to conduct sizeable interventions, one of the bankers familiar with the RBIâ€™s market interventions said, though their estimates of the scale of dollar sales varied. This banker estimated the RBIâ€™s dollar sales last week at around $15 billion. Another banker at a state-run lender quantified it at nearly $10 billion to $11 billion for the week to September 4, at least three times the amount in the previous week. All the bankers requested anonymity as they are not authorised to speak to the media. The RBI did not immediately respond to an email seeking comment. The RBIâ€™s dollar-selling interventions also drain rupee liquidity from the banking system, which had recently hit a record high. Excess liquidity can push interbank borrowing costs below the policy rate, blunting monetary policy transmission. FX war chest Through August 21, Indiaâ€™s FX reserves stood at an all-time peak of $740.8 billion, while J.P. Morgan said that figure has since likely risen past $750 billion. â€œIncreased near-term ammunition, in turn, explains the more aggressive intervention by the RBI in recent days, to try and push the rupee stronger, and bring exporters into the market,â€ the firm said in a Friday note. Persistent rupee weakness concerns have kept hedging flows skewed toward dollars, with importers stepping up forward purchases to guard against depreciation while exporters hold back on dollar sales, waiting for better levels, bankers said. The rupeeâ€™s rebound, from a low of 96.96 in May, is unlikely to mark the start of a broader appreciation cycle, analysts say. Goldman Sachs sees the currency in a narrow range in the medium term, saying that stronger external balances are unlikely to lead to a sustained upside. It expects the RBI to use future inflows to pare its forward FX liabilities, which three other economists estimate have likely crossed $200 billion.

Date: 2026-09-08

Details: â€¢ Two Indian state banks plan to raise $1 billion through dollar bonds, benefiting from an RBI scheme that reduces currency hedging expenses Published September 7, 2026 Updated about 14 hours ago By Reuters MUMBAI: Two Indian state-run lenders, Canara Bank and Bank of Maharashtra, are set to raise $500 million each through the sale of U.S. dollar-denominated bonds over the next few days, two merchant bankers said on Monday. Both the lenders will look to raise funds through a sale of three-year or five-year papers, or a combination of both, under the central bankâ€™s concessional swap window, which lowers the cost of hedging the risk of unfavourable currency moves, the bankers added. The bankers requested anonymity as the matter is still private, while neither of the lenders responded to a Reuters request for comment. Though this would be Bank of Maharashtraâ€™s debut issue, this would Canara Bankâ€™s second issuance this year, and both the debt sales are expected to be completed in September, the bankers said. Fitch Ratings has assigned Bank of Maharashtraâ€™s $500 million medium-term note (MTN) programme a â€˜BBB-minusâ€™ rating and the bank will use the net proceeds of the notes to meet the funding requirements of its head office in India, foreign offices and general corporate purposes. In July, Canara Bank raised $200 million via private placement under the central bankâ€™s concessional swap window, at a spread of 87 basis points over the corresponding U.S. Treasury yields, and this was its first such issuance since September 2024. Last week, the board of Canara Bank approved raising up to $2 billion through sale of foreign currency bonds. Indian lenders have already raised $13 billion through dollar bonds so far in 2026, of which $12.15 billion were raised in June to August, after the Reserve Bank of India announced the concessional swap window. State Bank of India, Bank of Baroda and Union Bank of India are the other lenders that have tapped dollar debt market in 2026.

Date: 2026-09-08

Details: Written by Faisal Shahnawaz in Trade & Industry PakExim and EDF establish Rs3 billion risk pool to protect SME exporters against overseas buyer payment defaults Pakistan has introduced a new insurance initiative aimed at supporting small and medium enterprise (SME) exporters and strengthening the countryâ€™s export sector. The Export-Import Bank of Pakistan (PakExim), in collaboration with the Export Development Fund (EDF), has launched the SME exporters insurance scheme to provide greater financial security to businesses engaged in international trade. Under the initiative, SME exporters will, for the first time in Pakistan, receive protection against the risk of non-payment by overseas buyers. The facility is designed to safeguard exporters from potential financial losses when foreign customers fail to make payments for goods or services supplied. The new insurance mechanism is expected to provide greater confidence to SMEs as they seek to expand their presence in international markets. By reducing payment-related risks, exporters will be better positioned to pursue larger orders and establish business relationships with new buyers abroad. As part of the initiative, PakExim and EDF will create a risk pool of approximately Rs3 billion. The insurance arrangement will also receive international support from the Islamic Corporation for the Insurance of Investment and Export Credit, strengthening the schemeâ€™s ability to provide export-related protection. Officials said the initiative could play an important role in expanding Pakistanâ€™s SME export base. With improved protection against overseas payment defaults, smaller businesses are expected to become more willing to explore new destinations and increase the scale of their international operations. To provide direct assistance to exporters, PakExim has established offices in Sialkot and Faisalabad. SMEs in these major industrial and export-oriented cities will be able to obtain guidance and information about the insurance facility and its requirements. The government expects the scheme to contribute to higher SME exports while supporting increased production and employment opportunities. Greater export activity could also help Pakistan generate additional foreign exchange and strengthen the overall contribution of small and medium enterprises to the national economy. The launch marks a significant step toward reducing financial risks for SME exporters and encouraging more Pakistani businesses to compete in global markets.

Date: 2026-09-07

Details: Written by Faisal Shahnawaz in Taxation Tax authorities stop around 30 goods vehicles over missing digital invoices, while offering businesses an opportunity to ensure voluntary compliance with sales tax requirements. HYDERABAD: The Regional Tax Office (RTO) Hyderabad has launched an enforcement drive to ensure compliance with the Digital Invoicing system and relevant provisions of the Sales Tax laws. During the drive, around 30 goods-carrying vehicles were stopped after the required digital invoices and other relevant documents were found missing, said Anees Ahmed Memon, Deputy Commissioner Inland Revenue (HQs), RTO Hyderabad, on Sunday. Taxpayers Stopped Over Missing Digital Invoices Enforcement authorities observed that some taxpayers, despite being registered with the Digital Invoicing system, were transporting consignments without issuing the required digital invoices. Under applicable sales tax provisions, taxpayers are required to issue a tax invoice before the movement of goods. The concerned taxpayers were informed of their legal obligations and advised to ensure compliance with Digital Invoicing requirements. Enforcement squads calculated the applicable tax on the consignments, and the vehicles were allowed to proceed after payment of the due tax or production of the required digital invoice. RTO Encourages Compliance at Dispatch Stage The enforcement exercise demonstrated that taxpayers can comply with the law at the initial stage, particularly when goods are dispatched, rather than waiting until consignments are stopped during transportation. Following the enforcement action, Adil Ahmed Siddiqui, President of the Hyderabad Chamber of Commerce & Industry, and S.M. Jafri, President of the Hyderabad Tax Bar Association, met Sajjad Akbar Khan, Chief Commissioner Inland Revenue, RTO Hyderabad. They appreciated the transparent enforcement of the Digital Invoicing system and stressed the importance of giving the business community an opportunity to understand and comply with the new legal requirements. They particularly highlighted the need for businesses to issue digital invoices at the time of dispatch. RTO Offers Guidance to Business Community Sajjad Akbar Khan assured the representatives that the RTO would facilitate and guide the business community towards the complete implementation of the Digital Invoicing system. He also expressed willingness to pause further enforcement action, subject to an assurance from the Chamber and Tax Bar that they would play their role in ensuring immediate and effective voluntary compliance by the business community. The opportunity is intended to facilitate taxpayers and promote compliance with the law, while allowing businesses adequate time to achieve voluntary compliance with Digital Invoicing requirements. Drive Aims to Strengthen Tax Documentation The initiative forms part of RTO Hyderabadâ€™s efforts to promote a transparent and properly documented tax system, ensure compliance with sales tax laws and strengthen cooperation with the business community. The enforcement drive also highlights the importance of issuing digital invoices before goods are transported, helping businesses meet their legal obligations and avoid enforcement action during the movement of consignments.

Date: 2026-09-07

Details: Written by Hamza Shahnawaz in Taxation The Federal Government can reduce certain minimum-tax withholding rates by up to one percentage point where the tax burden threatens the economic viability of businesses. ISLAMABAD: The Federal Board of Revenue (FBR) has clarified the provisions governing the rationalisation of withholding taxes that are in the nature of minimum tax for Tax Year 2027. According to the Income Tax Ordinance, 2001, updated up to June 30, 2026, the FBR has explained Section 53A, which empowers the Federal Government to reduce certain withholding tax rates. Federal Government Can Reduce Withholding Tax Under Section 53A, the Federal Government may reduce the rate of any withholding tax that is in the nature of minimum tax by one percentage point, based on the economic viability of a person or class of persons. However, this provision does not apply to the minimum tax chargeable under Section 113 of the Income Tax Ordinance, 2001. Any reduction in a withholding tax rate remains subject to restrictions and limitations that may be specified by the Federal Government. The law also requires the Federal Government to place before the National Assembly details of amendments made to withholding tax rates in the First Schedule during a financial year under Section 53A. What Is Economic Viability? Section 53A defines â€œeconomic viabilityâ€ in relation to the financial impact of the tax burden on businesses. The term includes an anticipated net loss of business income arising directly or indirectly from the tax burden, particularly where resources are unavailable to maintain or improve business efficiency. The economic viability of a person or class of persons must be certified by a Category A chartered accountant firm, based on the rating issued by the State Bank of Pakistan. Section 113 Minimum Tax Excluded The provision gives the Federal Government limited authority to rationalise certain minimum-tax withholding rates where the tax burden threatens the economic viability of businesses. However, the authority does not extend to the minimum tax imposed under Section 113. The FBRâ€™s clarification forms part of the updated Income Tax Ordinance, 2001, applicable for Tax Year 2027 and incorporating amendments up to June 30, 2026.

Date: 2026-09-07

Details: Written by Hamza Shahnawaz in Taxation Returning expatriate Pakistanis can claim a limited-period exemption on qualifying foreign-source income under Section 51 of the Income Tax Ordinance for Tax Year 2027. ISLAMABAD: The Federal Board of Revenue (FBR) has clarified that certain foreign-source income of returning expatriate Pakistanis remains exempt from income tax during Tax Year 2027, subject to conditions prescribed under the law. According to the Income Tax Ordinance, 2001, updated up to June 30, 2026, the FBR has explained the provisions of Section 51, which deals with foreign-source income of returning expatriates. Foreign Income Exemption for Returning Pakistanis Under Section 51, foreign-source income earned by a Pakistani citizen in a tax year is exempt from income tax if the individual was not a resident individual in any of the four tax years preceding the year in which they became a resident. The exemption applies for the tax year in which the individual becomes a resident and the following tax year. The provision therefore provides temporary tax relief to Pakistani citizens returning to the country after living abroad, provided they meet the conditions specified in the Income Tax Ordinance. Salary Income Earned Abroad Section 51 also covers Pakistani citizens who leave Pakistan during a tax year and remain abroad for the rest of that year. In such cases, any income chargeable under the head â€œSalaryâ€ earned outside Pakistan during that tax year is exempt from income tax under the Ordinance. This provision provides specific tax treatment for Pakistani citizens who depart the country during a tax year and subsequently earn salary income while residing abroad. Section 51 Applies in Tax Year 2027 The FBRâ€™s clarification forms part of the updated Income Tax Ordinance, 2001, applicable for Tax Year 2027 and incorporating amendments up to June 30, 2026. The provision is particularly relevant to expatriate Pakistanis returning to the country, as it provides a limited-period exemption on qualifying foreign-source income after they become resident individuals. The exemption remains subject to the conditions and requirements set out in Section 51 of the Ordinance.

Date: 2026-09-07

Details: Written by Hamza Shahnawaz in Taxation FBR says certain resident individuals who become tax residents through employment may receive an exemption on foreign-source income for Tax Year 2027, subject to specific conditions. The Federal Board of Revenue (FBR) has clarified the tax exemption available on foreign-source income to certain short-term resident individuals for Tax Year 2027. According to the Income Tax Ordinance, 2001, updated up to June 30, 2026, the FBR has explained the provisions of Section 50, which governs foreign-source income of short-term resident individuals. Section 50 Foreign Income Tax Exemption Under Section 50, foreign-source income received by an individual may be exempt from tax if the person is a resident individual solely because of their employment and is present in Pakistan for a period or periods not exceeding three years. The exemption is subject to specific conditions and does not apply in circumstances expressly excluded under the law. The provision is designed to provide specific tax treatment to individuals who become resident in Pakistan because of their employment but remain in the country for a limited period. When the Exemption Does Not Apply The FBR has clarified that the exemption is not available where the foreign-source income is derived from a business established by the individual in Pakistan. Similarly, the exemption does not apply to foreign-source income that is brought into or received in Pakistan by the individual. Therefore, qualifying short-term resident individuals may benefit from tax relief on their foreign-source income only where the income does not fall within the exclusions specified under Section 50. Relevance for Tax Year 2027 The clarification forms part of the updated Income Tax Ordinance, 2001, applicable for Tax Year 2027 and incorporating amendments up to June 30, 2026. The provision is particularly relevant to individuals who become resident in Pakistan solely because of employment and remain in the country for no more than three years. Such individuals should consider the source of their income and whether it is brought into or received in Pakistan when determining whether the Section 50 exemption applies.

Date: 2026-09-07

Details: Written by Faisal Shahnawaz in Taxation Government introduces tax relief, faceless systems and simplified schemes to support businesses, exporters, salaried workers and small traders. The government is committed to reducing the tax burden on businesses, exporters, salaried individuals and small traders through major tax relief measures and structural reforms, Minister of State for Finance and Revenue and Railways Bilal Azhar Kiyani said on Saturday. Addressing the business community at the Lahore Chamber of Commerce and Industry (LCCI), Kiyani said the government was working to transform the Federal Board of Revenue (FBR) into a more transparent, technology-driven and taxpayer-friendly institution. He highlighted that super tax had been abolished for exporters and businesses earning between Rs150 million and Rs500 million annually. For companies with income above Rs500 million, the super tax rate had been reduced from 10% to 8%. Kiyani said exporters had also received relief through a reduction in tax deductions on export proceeds. The deduction had been brought down from 2% to 1.25%, helping reduce the financial burden on the export sector. The minister said the government was introducing centralized and faceless audit and assessment systems to limit individual discretion and reduce the risks of harassment and collusion. Customs reforms were also being implemented through a faceless system to minimize direct interaction between importers and officials. He said dedicated FBR facilitation structures had been established in major export hubs, including Karachi, Faisalabad, Lahore and Sialkot, with other cities being gradually incorporated. Exporters were also being included in these structures to ensure their concerns were addressed more efficiently. Kiyani added that the government had also provided tax relief to salaried individuals by abolishing the applicable surcharge or super tax and reducing rates across most income slabs. For small traders and shopkeepers, he said a simplified and optional tax scheme had been developed after consultations with business representatives. Participants would generally avoid routine audits related to previous-year differences, while FBR plates would help limit unnecessary official visits. The scheme would also exempt participating traders from withholding-agent and point-of-sale machine requirements. Kiyani said the initiative was aimed at broadening the tax base, encouraging formalization and ensuring a fairer distribution of the tax burden. He stressed that the private sector would continue to have a meaningful role in policymaking, with the government seeking regular input from chambers and business organizations to resolve practical challenges.

Date: 2026-09-07

Details: Written by Hamza Shahnawaz in Taxation FBR confirms preferential tax treatment for qualifying foreign investments under the Foreign Investment (Promotion and Protection) Act, 2022. ISLAMABAD: Pakistan has retained broad income tax exemptions and preferential tax treatment for qualifying foreign investments for Tax Year 2027 under the Foreign Investment (Promotion and Protection) Act, 2022. The Federal Board of Revenue (FBR), in the Income Tax Ordinance, 2001 updated up to June 30, 2026, has outlined the tax treatment of qualified investments under Section 44A. Tax relief for qualified investments Under Section 44A, income taxes, including capital gains tax, advance tax, withholding taxes, minimum tax and final taxes, are exempt or subject to the rates and procedures specified under the Foreign Investment (Promotion and Protection) Act, 2022. The exemption or preferential treatment applies for the period and to the extent provided in the Second and Third Schedules of the Act. The provision applies to qualified investments specified in the First Schedule of the Foreign Investment (Promotion and Protection) Act, as well as investors covered by the legislation. Investors and shareholders covered The tax treatment also extends to all investors and shareholders of qualified investments, their associates and specified companies covered under the Second and Third Schedules of the Act. Third-party lenders are also covered in respect of loans, with exemptions or specified tax treatment applying according to the period and extent provided under the relevant schedules. Anti-avoidance provisions excluded Section 44A further provides that certain anti-avoidance provisions of the Income Tax Ordinance will not apply to the persons and amounts covered by the exemption. These include Sections 106, 106A, 108, 109 and 109A, to the extent and for the period specified under the Foreign Investment (Promotion and Protection) Act, 2022. Depreciation and investment allowances The provision also preserves certain rates applicable to depreciation, initial allowance and pre-commencement expenditure. Rates under Sections 22, 23 and 25 that were applicable on March 20, 2022, will continue to apply for 30 years, as provided in the Third Schedule to the Foreign Investment (Promotion and Protection) Act. The treatment applies to persons covered under Section 44A and remains subject to the conditions set out in the relevant legislation. Definitions under foreign investment law For the purposes of Section 44A, terms defined in the Second and Third Schedules of the Foreign Investment (Promotion and Protection) Act, 2022 will apply to the Income Tax Ordinance, with necessary modifications. The FBRâ€™s updated Income Tax Ordinance therefore maintains the tax framework provided under Pakistanâ€™s foreign investment law for qualifying investments during Tax Year 2027. The provisions cover a range of tax obligations and provide specified exemptions or preferential treatment to eligible investors, shareholders, associates, companies and certain third-party lenders, subject to the applicable conditions and periods.

Date: 2026-09-07

Details: Written by Hamza Shahnawaz in Taxation Diplomats, UN personnel and certain foreign government employees may qualify for income tax exemptions in Pakistan under Sections 42 to 44. ISLAMABAD: Diplomats, United Nations officials and certain foreign government employees may qualify for income tax exemptions in Pakistan during Tax Year 2027 under provisions of the Income Tax Ordinance, 2001. The Federal Board of Revenue (FBR), in the Income Tax Ordinance updated up to June 30, 2026, has outlined tax exemptions covering diplomats, United Nations personnel, foreign government officials and individuals covered by international agreements. Tax exemption for diplomats and UN officials Under Section 42, income of an individual entitled to privileges under the Diplomatic and Consular Privileges Act, 1972 is exempt from tax to the extent provided under that legislation. Similarly, income of an individual entitled to privileges under the United Nations (Privileges and Immunities) Act, 1948 is exempt from income tax to the extent provided under the relevant law. The provision also covers pensions received by Pakistani citizens because of their former employment with the United Nations or its specialised agencies, including the International Court of Justice, provided that their salary from such employment was exempt under the Income Tax Ordinance. Foreign government employees Section 43 provides a tax exemption for salary received by an employee of a foreign government for services rendered to that government, subject to specific conditions. The employee must be a citizen of the foreign country and not a Pakistani citizen. The services performed must also be similar in character to those performed by Federal Government employees serving in foreign countries. In addition, the employeeâ€™s home country must provide a similar tax exemption to Pakistani government employees performing comparable services there. Exemptions under international agreements Section 44 provides further exemptions where Pakistan is not permitted to tax certain Pakistan-source income under a tax treaty. The section also provides exemptions for certain salaries paid under aid agreements between the Federal Government and foreign governments or public international organisations. To qualify, an individual must generally meet conditions relating to residency, citizenship and the source of funds used to pay the salary. The provision also covers contractors, consultants and experts working on projects in Pakistan where the project is financed through grant funds under bilateral or multilateral agreements. Such individuals must meet prescribed conditions, including requirements concerning residency and the source of their income. Government may grant case-by-case exemptions The Federal Government may also exempt income on a case-by-case basis in respect of official development assistance financed through loans and grants-in-aid. Such exemptions may be granted through a notification published in the official Gazette and are subject to conditions and limitations specified by the government. Tax treatment for Tax Year 2027 The provisions establish the applicable tax treatment for diplomats, foreign officials and certain individuals working under international agreements for Tax Year 2027. However, eligibility for the exemptions depends on the specific statutory conditions, applicable privileges, international agreements and notifications governing each category.

Date: 2026-09-07

Details: Written by Hamza Shahnawaz in Taxation The FBR says agricultural income remains exempt under the Income Tax Ordinance, 2001, while Section 41 defines qualifying farming income and related buildings. ISLAMABAD: The Federal Board of Revenue (FBR) has clarified that agricultural income remains exempt from tax under the Income Tax Ordinance, 2001 for Tax Year 2027. According to the Income Tax Ordinance, updated up to June 30, 2026, agricultural income derived by a person is exempt from tax under the Ordinance. What qualifies as agricultural income? Under Section 41 of the Income Tax Ordinance, agricultural income includes rent or revenue derived from land situated in Pakistan and used for agricultural purposes. The provision also covers income derived from agricultural land in Pakistan through farming activities, as well as certain income earned by cultivators or receivers of rent-in-kind. The law specifically includes income from processes ordinarily employed by a cultivator or receiver of rent-in-kind to make agricultural produce fit for taking to market. Income from the sale of produce raised or received by a cultivator or receiver of rent-in-kind is also covered, provided that no process has been carried out other than one ordinarily used to make the produce marketable. Buildings connected with agricultural land Section 41 also treats certain income from buildings connected with agricultural land as agricultural income. This includes income derived from a building owned and occupied by the receiver of rent or revenue from qualifying agricultural land. It also covers buildings occupied by a cultivator or receiver of rent-in-kind where agricultural operations or related produce-processing activities are carried out. However, the provision applies only where the building is situated on or in the immediate vicinity of the relevant land and is required by the receiver or cultivator because of their connection with the land. Such buildings may include a dwelling house, storehouse or other out-building. Agricultural income remains exempt for Tax Year 2027 The FBRâ€™s clarification confirms that qualifying agricultural income continues to receive tax-exempt treatment under Section 41 for Tax Year 2027. The provision sets out the types of farming-related income that qualify as agricultural income, including income from agricultural land, the ordinary processing of produce and certain buildings associated with agricultural activities.

Date: 2026-09-07

Details: Published September 6, 2026 Updated a day ago By Reuters MUMBAI: Abrupt departures from some of Indiaâ€™s top private banks in recent months have exposed a need for better succession planning, prompting investors to question how likely such lenders are to stick with long-term business strategies. Indiaâ€™s USD3.3-trillion banking sector has drawn strong interest in recent years from foreign investors betting on its earnings prospects in one of the worldâ€™s fastest growing economies, marked by steady management and business strategies. The recent unexpected exits of CEOs from two of the largest private sector banks is set to test that confidence, even as those lenders boast of strong balance sheets, with bad loans near multi-year lows and capital levels robust, analysts say. â€œSeveral recent transitions at Indian private banks have appeared more abrupt than investors would like, particularly given the importance of leadership continuity in banking,â€ said Gary Tan, portfolio manager at Allspring Global Investments. His remarks came after Indiaâ€™s largest private lender, HDFC Bank, said over the weekend that Chief Executive Sashidhar Jagdishan would not seek reappointment when his term ends in two months, risking a surprise leadership transition. Smaller rival Kotak Mahindra Bank is searching for a new head after its current CEO, Ashok Vaswani, said in June he would leave in December after serving a three-year term, a move that surprised analysts. The focus on leadership transition at top private banks comes as external challenges and competitive pressure grow in India, where dominant state-owned banks and ambitious foreign banks are vying for bigger shares of the banking business. â€œGreater visibility around leadership succession can help reduce uncertainty and maintain investor confidence in the bankâ€™s strategic direction and execution,â€ said Tan. Abrupt changes leave investors with questions about a bankâ€™s strategic direction, added Tan, whose firm manages USD642 billion of client assets, shares of some Indian banks among them. SHALLOW POOL OF CANDIDATES Indiaâ€™s central bank requires bank boards to submit the names of candidates for CEO appointments or re-appointments at least six months before the end of an incumbentâ€™s term, a deadline HDFC Bank missed with the unexpected exit of its CEO. â€œThe six-month rule is a regulatory minimum, not a governance standard,â€ said Steve Lawrence, chief investment officer at Balfour Capital Group, whose funds have invested in Indian banks including HDFC Bank.

Date: 2026-09-07

Details: Written by Mrs. Anjum Shahnawaz in Money & Banking The new facility provides banks and DFIs with first-loss guarantees of up to 25% to expand financing for women-led microenterprises and improve access to institutional funding. KARACHI: The State Bank of Pakistan (SBP) has launched the Women Microfinance Credit Guarantee Facility (WMCGF), offering first-loss guarantees of up to 25% to banks and development finance institutions (DFIs) against financing extended to eligible non-bank microfinance companies (NBMFCs) and non-bank finance companies (NBFCs). The facility has been introduced under the Federal Governmentâ€™s Women Inclusive Finance Sector Development Programme (WIFSDP) to improve womenâ€™s access to finance and strengthen their participation in economic activity. The WMCGF aims to address liquidity constraints in the microfinance sector by enabling NBMFCs and NBFCs to secure financing from banks and DFIs for on-lending to women-led microenterprises. Under the scheme, participating NBMFCs will provide loans ranging from PKR 25,000 to PKR 3 million, with financing available for up to 36 months. The guarantees will be provided to participating financial institutions (PFIs) without any fee. SBP Sets Eligibility Criteria for Banks and DFIs The SBP has established several eligibility requirements for banks and DFIs seeking guarantee limits under the facility. Participating financial institutions must demonstrate profitability, including an average pre-tax return on assets of at least 1%. They must also maintain a net non-performing loans-to-capital ratio of no more than 15% and comply with the minimum capital adequacy ratio prescribed under SBP regulations. Banks and DFIs must comply with applicable laws and policies covering integrity, anti-money laundering and counter-terrorist financing. They must also not appear on the Asian Development Bankâ€™s Debarment and Suspension Register. Participating institutions are further required to maintain sound financial management practices, including effective audit systems, internal controls and governance standards. Requirements for Beneficiary Institutions The facility also sets eligibility requirements for beneficiary financial institutions (BFIs), which will receive financing from participating banks and DFIs. BFIs must have a gender-focused women finance strategy, including plans to increase the number and volume of active women enterprise loan accounts and develop products targeting women in both rural and urban areas. They must also take measures to raise awareness among boards, senior management and staff about womenâ€™s business needs and improve financial literacy among women clients. BFIs are required to demonstrate strong financial performance, including: â€¢ Three-year average operational self-sufficiency above 100% â€¢ Average pre-tax return on assets of at least 1% â€¢ Net non-performing loans-to-capital ratio of no more than 15% â€¢ Compliance with minimum capital requirements under Securities and Exchange Commission of Pakistan (SECP) regulations â€¢ Sound financial management, audit, internal control and governance systems Financing Restricted to Women-Led Businesses Under the scheme, banks and DFIs must ensure that financing provided through NBMFCs is used exclusively for women-led, income-generating households and businesses. Participating institutions must also ensure that women borrowers understand the terms and conditions of their loans, helping protect them against the risk of over-indebtedness. Financed loans must have no or only minor environmental and social impacts in accordance with the applicable Environmental and Social Management Framework and the Asian Development Bankâ€™s safeguard requirements. The scheme also requires loans repaid to NBMFCs during the approved financing period to be lent again to women beneficiaries. Guarantee Limits and Claims Guarantee limits will be allocated to banks and DFIs based on their requests. The performance of participating institutions will be monitored quarterly, or more frequently where necessary. Based on performance, the SBP may increase, reduce or withdraw allocated guarantee limits. A guarantee limit may also be withdrawn if a beneficiary institution is found to have been ineligible for financing when the facility was extended. In such cases, the participating bank or DFI will bear 100% of the credit risk for that institution. Guarantee claims can be submitted while the guarantee remains active and the amount due to the bank or DFI has not been paid and has been classified as a â€œLossâ€, where principal, mark-up or interest has remained overdue for one year or more. SBP Introduces Digital Claims Processing The SBP has directed participating institutions to use digital platforms, including the Regulatory Approval System (RAS), for submitting guarantee applications and claims. The move is aimed at speeding up claims processing, reducing administrative costs and improving transparency. The Financial Inclusion Support Department (FISD) of SBP Banking Services Corporation will process claims within 10 working days, provided they comply with the prescribed format, procedures and information requirements. Participating institutions will remain responsible for recoveries, while the Trustâ€™s share of recoveries, up to 100%, will be credited to the WMCGF account. Environmental and Reporting Requirements Participating financial institutions must establish an Environmental and Social Management System (ESMS) and conduct environmental and social due diligence in line with the applicable framework. They must maintain records of all financing provided under the facility and submit borrower-wise reports to the SBP on a quarterly basis or whenever required. An environmental and social report must also be submitted annually. The SBPâ€™s inspection teams may inspect the relevant portfolios of participating institutions to ensure compliance with the facilityâ€™s terms and conditions. The WMCGF forms part of the governmentâ€™s broader efforts to improve womenâ€™s access to finance and expand opportunities for women-led microenterprises by increasing the availability of institutional funding.

Date: 2026-09-05

Details: Written by Faisal Shahnawaz in Pakistan Customs A Customs clerk allegedly masterminded the scam using fake payment and clearance documents to remove auctioned goods without depositing government dues. The Collectorate of Customs Enforcement, Karachi has arrested three individuals, including a departmental employee, an auction bidder and an alleged facilitator, for their alleged involvement in a Rs16.5 million fraud involving the illegal removal of auctioned goods through forged documents. The case came to light after credible intelligence was received on August 28, 2026, concerning the removal of auctioned goods from the Collectorate in February without depositing the required bid amount into the government treasury. Following the information, authorities initiated a fact-finding inquiry and preliminary investigation. The inquiry established that goods from an auction lot valued at Rs15 million had been removed by the successful bidder without payment of the bid amount. Fake Documents Used to Remove Auctioned Goods Investigators found that the fraud also involved the evasion of 10% income tax amounting to Rs1.5 million. As a result, the total financial loss or default linked to the transaction reached Rs16.5 million. The alleged scheme was carried out through a set of forged documents. These included a fake Payment Slip Identification Number (PSID), which had no corresponding record in the WeBOC system, along with a counterfeit Delivery Order, No Objection Certificate (NOC) and Computerized Payment Receipt (CPR) for income tax. According to the preliminary investigation, the fraudulent documents were prepared by a clerk posted in the Collectorateâ€™s Auction Branch. Clerk Identified as Alleged Mastermind After confirming the findings, Customs authorities arrested the implicated Auction Branch official, the bidder involved in the auction lot and a suspected intermediary who allegedly facilitated the transaction. The clerk accused of preparing the forged documents had reportedly been absent from duty for several months. He has been identified as the alleged mastermind behind the scheme and is currently absconding. Teams have been deployed to locate and arrest him. Suspects Remanded for Further Investigation During interrogation, the three arrested suspects reportedly confessed to their involvement and identified the absconding clerk as the person who orchestrated the preparation of the fraudulent documents. The suspects were presented before the court on September 3, 2026, which granted their two-day physical remand. They are currently being interrogated by the Investigation and Prosecution (I&P) Branch of the Collectorate. Further investigation is underway to recover the defrauded amount and determine whether other Customs officials, employees or private individuals were involved. The Federal Board of Revenue has reiterated its zero-tolerance policy against corruption and malpractice, stating that departmental and criminal proceedings will be initiated against anyone found responsible, regardless of rank or position.

Date: 2026-09-05

Details: Written by Hamza Shahnawaz in Taxation New rules add four weekly validation cycles before uncleared or unverified refund amounts are transferred to the STARR module. ISLAMABAD: The Federal Board of Revenue (FBR) has amended the rules governing the Fully Automated Sales Tax e-Refund System (FASTER) to revise the process for handling sales tax refund amounts that remain uncleared or unverified. The FBR issued SRO 1498(I)/2026 on Friday under Section 50 of the Sales Tax Act, 1990, introducing amendments to the Sales Tax Rules, 2006. FBR expands validation checks under FASTER Under the amended procedure, any portion of a refund claim processed through FASTER that remains uncleared or unverified after the initial eight validation checks will no longer immediately move to the STARR module. Instead, the amount will be subjected to four additional validation checks, with the system conducting one check every week. If any amount remains uncleared or unverified after completion of these four additional weekly checks, it will subsequently be processed through the STARR module under Chapter V of the Sales Tax Rules. The amendment applies to the relevant provisions of Rule 29 of the Sales Tax Rules, 2006. Changes also made to Rule 39F The FBR has made a similar amendment to the second proviso of Rule 39F. Under the revised provision, amounts remaining uncleared or unverified after eight validation checks will undergo four additional weekly validation checks before being transferred to the STARR module. The changes are intended to provide the FASTER system with additional opportunities to validate refund claims before amounts that remain unresolved are moved to the subsequent processing mechanism. Existing FASTER refund procedure Under the previous Rule 29 procedure, the portion of a FASTER refund claim that was not verified or found admissible was subjected to weekly system validation checks. A Refund Payment Order (RPO) was generated for the amount found valid during each validation check. The system then communicated details of the RPO and any objections to the refund claimant and the relevant Regional Tax Office (RTO) or Large Taxpayer Office (LTO). The RPO generated through the process was also communicated to the State Bank of Pakistan (SBP) for payment. Previously, after eight validation checks, including the initial check, any amount that remained uncleared was transferred to the STARR channel. The latest amendment replaces this mechanism by allowing four additional weekly validation cycles before the remaining amount is processed under the STARR module. The revised procedure is expected to provide an extended automated validation window for sales tax refund claims and streamline the handling of amounts that cannot initially be verified or cleared through FASTER.

Date: 2026-09-05

Details: Written by Hamza Shahnawaz in Taxation Section 39 of the Income Tax Ordinance covers dividends, royalties, profit on debt, certain rents, prizes, gifts and other income not taxable under another head. ISLAMABAD: The Federal Board of Revenue (FBR) has explained the types of income chargeable under the head â€œIncome from Other Sourcesâ€ for Tax Year 2027 under Section 39 of the Income Tax Ordinance, 2001. The provisions are contained in the Income Tax Ordinance, 2001, updated up to June 30, 2026, and specify the types of receipts that are taxable under this head, as well as the deductions available under Section 40. Income chargeable under other sources Under Section 39(1), income of every kind received by a person during a tax year is chargeable under â€œIncome from Other Sourcesâ€ if it is not included under another head of income and is not exempt from tax under the Ordinance. The section specifically covers the following: â€¢ Dividend â€¢ Royalty â€¢ Profit on debt â€¢ Additional payment received on a delayed refund under any tax law â€¢ Ground rent â€¢ Rent from the sub-lease of land or a building â€¢ Income from leasing a building together with plant or machinery â€¢ Income from providing amenities, utilities or other services connected with renting a building â€¢ Any annuity or pension â€¢ Prize bonds and winnings from raffles, lotteries, quizzes, promotional prizes offered by companies for promoting sales and crossword puzzles â€¢ Any other consideration received for the provision, use or exploitation of property, including the right to explore for or exploit natural resources â€¢ The fair market value of any benefit, whether convertible into money or not, received in connection with the provision, use or exploitation of property â€¢ Amount received for vacating possession of a building or part of a building, after deducting any amount paid to acquire possession â€¢ Amount received under an Approved Income Payment Plan or Approved Annuity Plan under the Voluntary Pension System Rules, 2005 â€¢ Subject to the relevant provisions, any amount or fair market value of property received without consideration or as a gift, except a gift received from a relative as defined under Section 85(5) â€¢ Income arising to a shareholder from the issuance of bonus shares Tax treatment of compensation for vacating property Where a person receives an amount for vacating possession of a building or part of a building under Section 39(1)(k), the amount is chargeable to tax in the tax year in which it is received. However, the amount is spread equally over 10 tax years â€” the year of receipt and the following nine tax years. This provision determines how such compensation is brought into taxable income over the specified period. Loans, advances, deposits and gifts Section 39(3) provides that certain amounts received as a loan, advance, deposit for issuance of shares or gift may be treated as taxable income under â€œIncome from Other Sourcesâ€. The provision applies where the amount is received during a tax year from a person other than a banking company or financial institution and is not received through: â€¢ A crossed cheque drawn on a bank â€¢ A banking channel â€¢ Digital means as defined in Section 2 The transaction must be from a person holding a National Tax Number (NTN). Where the relevant conditions are met, the amount is treated as income chargeable under â€œIncome from Other Sourcesâ€ for the tax year in which it is received. However, this rule does not apply to advance payments for the sale of goods or supply of services. Profit on debt received in arrears Section 39(4A) provides special treatment where profit on debt from National Savings Deposit Certificates, including Defence Savings Certificates, is received in arrears. If the receipt includes profit relating to an earlier tax year and taxing the entire amount in the year of receipt results in a higher tax rate, the taxpayer may elect to have the profit taxed at the rate that would have applied if it had been received in the relevant earlier tax year. The election must be made through written notice to the Commissioner by the due date for filing the return for the tax year in which the amount was received. The Commissioner may also allow a later date through a written order. When Section 39 does not apply Section 39 does not apply to income that is: â€¢ Chargeable to tax under another head of income; or â€¢ Subject to tax under Sections 5, 5AA, 6, 7 or 7B. This prevents income from being taxed under â€œIncome from Other Sourcesâ€ where the Ordinance specifically provides for taxation under another provision. Deductions against income from other sources Section 40 sets out the deductions available when computing taxable income under the head â€œIncome from Other Sourcesâ€. A taxpayer may generally deduct expenditure paid during the year to the extent that it is incurred in deriving income chargeable under this head, provided the expenditure is not capital in nature. A person receiving taxable profit on debt may also claim a deduction for Zakat paid under the Zakat and Ushr Ordinance, 1980, at the time the profit is paid. Deductions for leased buildings For income from leasing a building together with plant or machinery, allowable deductions may include: â€¢ Depreciation of the plant, machinery or building used to derive the income under Section 22; and â€¢ Initial allowance for plant or machinery under Section 23. No deduction is allowed under Section 40 to the extent that the expenditure is already deductible when calculating income under another head. The provisions of Section 21 also apply when determining allowable deductions under Section 40. For this purpose, expenditure is considered capital in nature if it has a normal useful life of more than one year. Income from Other Sources for Tax Year 2027 For Tax Year 2027, Section 39 broadly brings income that does not fall under another taxable head into â€œIncome from Other Sourcesâ€. The provision specifically covers items such as dividends, royalties, profit on debt, certain rents, annuities, prizes, property-related receipts, gifts in specified circumstances and bonus shares. Meanwhile, Section 40 sets out the rules governing deductions that may be claimed against income taxable under this head.

Date: 2026-09-05

Details: Written by Hamza Shahnawaz in Taxation Section 37A sets out the tax treatment of securities, including capital gain calculations, eligible losses, holding periods and covered financial instruments. ISLAMABAD: The Federal Board of Revenue (FBR) has explained the rules governing capital gains arising from the disposal of securities for Tax Year 2027 under Section 37A of the Income Tax Ordinance, 2001. The provisions are contained in the Income Tax Ordinance, 2001, updated up to June 30, 2026, and specify the securities subject to capital gains tax, the method for calculating gains and the treatment of losses. Securities subject to capital gains tax Under Section 37A(1), capital gains arising from the disposal of securities on or after July 1, 2010 are chargeable to tax at the rates specified in Division VII of Part I of the First Schedule, unless the gain is exempt under the Income Tax Ordinance, 2001. The section does not apply to a banking company or an insurance company. Certain share disposals are also excluded from Section 37A. These include: â€¢ Shares of a listed company disposed of otherwise than through a registered stock exchange and not settled through the National Clearing Company of Pakistan Limited (NCCPL). â€¢ Shares disposed of through an initial public offering (IPO) during the listing process, except where details of the disposal are furnished to NCCPL for the computation of capital gains and tax. For such transactions, the provisions of Section 37 apply. How capital gain is calculated Under Section 37A(1A), the capital gain on the disposal of a security is calculated using the following formula: Capital gain = A â€“ B Here: â€¢ A represents the consideration received by the person on disposal of the security. â€¢ B represents the cost of acquisition of the security. The resulting gain is subject to the applicable capital gains tax rate under Division VII of Part I of the First Schedule. Holding period of securities For the purposes of Section 37A, the holding period is calculated from the date of acquisition to the date of disposal. The provision applies to securities acquired before, on or after June 30, 2010, provided that the disposal takes place after June 30, 2010. What qualifies as a security? Section 37A defines a â€œsecurityâ€ to include a range of financial instruments, including: â€¢ Shares of a public company â€¢ Vouchers of Pakistan Telecommunication Corporation â€¢ Modaraba certificates â€¢ Instruments of redeemable capital â€¢ Debt securities â€¢ Units of exchange-traded funds (ETFs) â€¢ Derivative products Shares of a public company qualify as securities where the company is a public company at the time the shares are disposed of. Debt securities covered by Section 37A For the purposes of Section 37A, debt securities include both corporate and government debt instruments. Corporate debt securities include Term Finance Certificates (TFCs), Sukuk certificates, registered bonds, commercial papers, Participation Term Certificates (PTCs) and other debt instruments issued by Pakistani or foreign companies or corporations registered in Pakistan. Government debt securities include Treasury Bills (T-bills), Federal Investment Bonds (FIBs), Pakistan Investment Bonds (PIBs), foreign currency bonds, government papers, municipal bonds, infrastructure bonds and other debt instruments issued by federal or provincial governments, local authorities and statutory bodies. Derivative products covered The FBR has clarified that derivative products include future commodity contracts entered into by members of the Pakistan Mercantile Exchange, regardless of whether the contracts are settled through physical delivery. This brings such qualifying derivative transactions within the scope of the securities provisions under Section 37A. Capital gains treated as separate income Under Section 37A(4), income from capital gains covered by the section is treated as a separate block of income. This means such gains are dealt with separately in accordance with the provisions and rates applicable under Section 37A. Treatment of capital losses Section 37A(5) generally provides that where a person incurs a loss from the disposal of securities during a tax year, the loss can only be set off against gains from other securities chargeable under Section 37A. The provision further states that losses from the disposal of securities sustained from Tax Year 2019 onwards, to the extent that they have not been set off against eligible gains, may be carried forward to the following tax year. Such carried-forward losses can only be adjusted against gains from securities chargeable under Section 37A. The losses cannot be carried forward for more than three immediately succeeding tax years. FBR may prescribe rules Under Section 37A(6), the FBR may prescribe rules to carry out the purposes of the section. The provision gives the tax authority the power to establish the necessary rules for implementing the securities capital gains regime. Capital gains tax rules for Tax Year 2027 For Tax Year 2027, capital gains from securities covered by Section 37A are generally calculated by deducting the acquisition cost from the consideration received on disposal. The resulting gain is subject to the applicable rates under Division VII of Part I of the First Schedule, while eligible losses are subject to the specific set-off and carry-forward restrictions provided under Section 37A.

Date: 2026-09-05

Details: Written by Hamza Shahnawaz in Taxation The Federal Board of Revenue outlines how capital gains are taxed, calculated and disclosed under Section 37 of the Income Tax Ordinance, 2001. ISLAMABAD: The Federal Board of Revenue (FBR) has explained the provisions relating to capital gains tax for Tax Year 2027 under Section 37 of the Income Tax Ordinance, 2001. The FBR has issued an updated version of the Income Tax Ordinance, 2001, incorporating amendments up to June 30, 2026, and outlined the rules governing gains arising from the disposal of capital assets. Tax on capital gains Under Section 37(1), a gain arising from the disposal of a capital asset by a person in a tax year is chargeable to tax under the head â€œCapital Gainsâ€, unless the gain is exempt from tax under the Income Tax Ordinance, 2001. The law separately provides that a gain arising from the disposal of immovable property situated in Pakistan to a person in a tax year is chargeable under the head Capital Gains at the rates specified in Division VIII of Part I of the First Schedule. How capital gain is calculated Under Section 37(2), the gain arising from the disposal of a capital asset is generally calculated using the following formula: Capital gain = A â€“ B Here, A represents the consideration received by the person on disposal of the asset, while B represents the cost of the asset. For determining the cost of a capital asset, Section 37(4) states that expenditure cannot be included in the cost where the expenditure is, or may be, deductible under another provision of the relevant chapter or is referred to in Section 21. Definition of capital asset Section 37(5) defines a â€œcapital assetâ€ as property of any kind held by a person, whether or not it is connected with a business. However, the definition excludes certain categories of property. These include stock-in-trade, consumable stores and raw materials held for business purposes. It also excludes property in respect of which a person is entitled to a depreciation deduction under Section 22 or an amortisation deduction under Section 24. Movable property held for personal use by a person or a dependent member of the personâ€™s family is also excluded, subject to the capital assets specified under Section 38(5). Advance tax on acquisition of company shares Section 37 also contains specific provisions concerning the acquisition and disposal of company shares. Under Section 37(6), a person acquiring shares of a company is required to deduct advance adjustable tax at 10% of the fair market value of the shares from the gross amount paid or payable as consideration. The deduction is to be made at the time of payment or at the time of registration of the shares by the Securities and Exchange Commission of Pakistan (SECP) or the State Bank of Pakistan (SBP), whichever is earlier. The deducted amount must be paid to the Commissioner for credit to the Federal Government within 15 days of the payment. Under Section 37(7), the value of shares for this purpose is their fair market value as prescribed for Section 101A(4), without reduction of liabilities. Commissioner may allow reduced or no deduction Under Section 37(8), the Commissioner may, on an application by the person acquiring the shares and after conducting any inquiry considered appropriate, allow the payment to be made without deduction of tax or with deduction at a reduced rate. The section also provides for the application of certain provisions relating to tax deduction, recovery and penalties to tax deductible and payable under these provisions. Disclosure requirement for disposal of shares A person disposing of capital assets in the form of company shares is required under Section 37(10) to furnish the prescribed information or documents to the Commissioner within 30 days of the disposal transaction. However, the Commissioner may issue a written notice requiring the person to provide the information, documents and statement within a period shorter than 30 days, as specified in the notice. The provisions form part of the FBRâ€™s updated Income Tax Ordinance, 2001 for Tax Year 2027, incorporating amendments made up to June 30, 2026.

Date: 2026-09-05

Details: Published September 5, 2026 Updated about 2 hours ago By Reuters NEW YORK: The major US stock indexes slipped on Friday after a stronger-than-expected jobs report prompted investors to ramp up bets on an interest rate hike later this month. A Labor Department report showed the US economy added 162,000 jobs in August, compared with estimates of 56,000, according to economists polled by Reuters. The unemployment rate stood at 4.1 percent last month, as expected. The data could give the Federal Reserve more room to focus on inflation, especially as Chair Kevin Warsh has indicated that controlling price pressures is his top priority. â€œThis is obviously a very volatile report, but it does mean that at this point the Fedâ€™s focus is going to be on inflation,â€ said Josh Stevens, chief investment officer at CresAlta Investment Management. Traders added to expectations of an interest rate hike at the central bankâ€™s September 15-16 meeting, with short-term interest-rate futures now implying a 60 percent chance of an increase, up from 55 percent before the report. â€œThe market just had a knee-jerk reaction to the jobs report. Investors are shooting first and asking questions later,â€ said Thomas Hayes, chairman at Great Hill Capital. At 11:52 a.m. ET, the Dow Jones Industrial Average fell 305.54 points, or 0.57 percent, to 53,380.57, the S&P 500 lost 33.99 points, or 0.44 percent, to 7,713.72 and the Nasdaq Composite lost 114.87 points, or 0.43 percent, to 26,469.19. The declines round out a rollercoaster week that saw traders rushing to recalibrate expectations as fresh data, earnings and Fed Governor Christopher Wallerâ€™s commentary shifted the policy outlook. Attention now turns to next weekâ€™s inflation readings, with the Labor Department set to release CPI and PPI data that could prove pivotal to the Fedâ€™s decision. Consumer discretionary stocks fell 1.79 percent and led declines on the S&P 500. The PHLX semiconductor index rose 3 percent and was set to end a two-week losing streak. Among individual stocks, Lululemon Athletica fell 17.99 percent after it slashed its full-year profit and revenue forecasts. Adobe dropped 6.08 percent, as it said longtime CEO Shantanu Narayen will hand over the reins to company insider Anil Chakravarthy. US credit reporting agencies lost ground after US Director of Federal Housing Bill Pulte said on Thursday he directed Fannie Mae and Freddie Mac, created by the US Congress to support the housing market, to approve all lenders to use thecredit-scoring system VantageScore. Fair Isaac lost 15.99 percent and TransUnion was down 7.64 percent, while Equifax slid 6.58 percent. As investors head into the Labor Day weekend, debate about the seasonal weakness of September also persists.

Date: 2026-09-04

Details: Written by Mrs. Anjum Shahnawaz in Taxation BS-18 Inland Revenue officer Khurram Fakhar Siddique removed from service after an inquiry found charges of misconduct and corruption proved against him. ISLAMABAD: Prime Minister Shehbaz Sharif has approved the removal from service of Khurram Fakhar Siddique, a BS-18 officer of the Inland Revenue Service (IRS), after disciplinary proceedings found charges of misconduct and corruption proved against him. According to a notification issued by the Federal Board of Revenue (FBR) on Thursday, Siddique was already under suspension when disciplinary proceedings were initiated against him under the Civil Servants (Efficiency & Discipline) Rules, 2020. The proceedings were launched through an order of inquiry, charge sheet and statement of allegations dated February 27, 2025, on charges of â€œMisconductâ€ and â€œCorruptionâ€. Inquiry finds charges proved Amina Hassan, an IRS BS-21 officer, was appointed as the inquiry officer. She submitted her inquiry report on June 27, 2025, concluding that all charges against Siddique had been established. The inquiry officer recommended the major penalty of â€œRemoval from Serviceâ€ under Rule 4(3)(d) of the Civil Servants (E&D) Rules, 2020. Following the inquiry report, the FBR issued a show-cause notice on July 7, 2025, asking Siddique to explain why one or more penalties should not be imposed, including the major penalty of dismissal from service under Rule 4(3)(e). Siddique submitted his written response to the show-cause notice on July 21, 2025. Officer given opportunity for personal hearing The officer was subsequently given an opportunity for a personal hearing on August 26 and September 1, 2025, before Syed Nadeem Hussain Rizvi, a retired IRS BS-22 officer and then Director General of the IRS Academy, Lahore. However, Siddique opted to submit a written response instead of appearing personally before the hearing officer. The notification said the Prime Minister, as the competent authority under Rule 2(1)(c) of the Civil Servants (Efficiency & Discipline) Rules, 2020, reviewed the complete record of the disciplinary proceedings. The record included the charge sheet and statement of allegations, inquiry report, show-cause notice and response, recommendations of the inquiry and hearing officers, as well as the speaking order passed on the directions of the Lahore High Court. Prime Minister approves removal from service After reviewing the record, Prime Minister Shehbaz Sharif concluded that the charges of misconduct and corruption had been proved against Siddique. The Prime Minister also determined that the penalty recommended by the inquiry officer was commensurate with the charges. The notification stated that the Prime Minister therefore imposed the major penalty of â€œRemoval from Serviceâ€ on Khurram Fakhar Siddique (IRS/BS-18) with immediate effect under Rule 4(3)(d) of the Civil Servants (E&D) Rules, 2020. Siddique retains right to appeal Despite the removal order, Siddique has been given the right to appeal against the decision. Under the Civil Servants (Appeals) Rules, 1977, he may approach the Appellate Authority within 30 days from the date the notification is communicated to him. The appeal provision allows the former FBR officer to challenge the disciplinary action within the prescribed legal timeframe.

Date: 2026-09-04

Details: Written by Faisal Shahnawaz in Taxation Minister of State for Finance Bilal Azhar Kayani says digitalisation, retailer formalisation and private-sector engagement are central to Pakistanâ€™s tax reforms. ISLAMABAD: Minister of State for Finance Bilal Azhar Kayani has said Pakistan is stepping up efforts to broaden its tax base, ease the burden on compliant taxpayers and improve revenue collection through digitalisation and greater engagement with the private sector. Addressing the High-Level Dialogues on Taxation for Fiscal Sustainability, organised by the Asian Development Bank (ADB) in collaboration with the Government of Pakistan, Kayani said Prime Minister Shehbaz Sharif had given unprecedented attention to reforms at the Federal Board of Revenue (FBR). He said the prime minister was conducting weekly reviews of the FBRâ€™s transformation, covering both strategic and operational aspects of the reform process. Kayani highlighted several initiatives, including faceless customs, digital invoicing, track-and-trace systems and a new tax operating model, which are intended to reduce human intervention in tax assessments and audits. He said the prime ministerâ€™s detailed oversight of FBR reforms was aimed at ensuring that the tax authority improved not only revenue collection but also its dealings with taxpayers. Government seeks to bring more retailers into tax net Kayani said the governmentâ€™s new retailersâ€™ tax scheme was a key initiative aimed at bringing more retailers into the formal economy and broadening Pakistanâ€™s narrow tax base. He said the scheme had been developed following extensive consultations with retailers and their representative organisations, including discussions on why previous attempts to tax the sector had failed. Retailers had raised concerns about informal payments and sought greater protection from such practices in return for joining the formal tax system, he said. The government subsequently worked with traders to finalise the schemeâ€™s tax rates, penalties, procedures and documentation, including a simplified one-page form in Urdu, according to the minister. He said the consultation process had secured support from major trader organisations even before the scheme was formally announced. Kayani also stressed the need for sustained dialogue between government agencies and the private sector, noting that poor communication had contributed to the failure of some economic reforms in the past. Tax burden reduced for exporters, businesses and salaried workers The minister said the government had also taken measures to reduce the tax burden on exporters, small and medium-sized businesses and salaried workers. He said the super tax rate for businesses earning between Rs150 million and Rs500 million annually, as well as those earning more than Rs500 million, had been reduced by two percentage points from 10% to 8%. For exporters, the combined rate of advance income tax and minimum tax deducted at source had been reduced from 2% to 1.25%, he said. The government had also retained the final tax regime for information technology exporters while reducing taxes on salaried taxpayers, which he described as a major priority for the prime minister. Kayani said salaried workers had historically carried a disproportionate share of the tax burden because their incomes were easier for tax authorities to document and collect. FBR to adopt centralised, rules-based system On wider FBR reforms, Kayani said the new tax operating model would centralise and anonymise assessment and audit functions as far as possible. He said a system-driven and rules-based process would reduce the role of individual tax officials and make tax assessments fairer and more predictable. â€œA CRM-driven audit and assessment function, which is anonymised to the extent possible, which is taken away from the field offices and is centralised, will result in fairer treatment of the taxpayer,â€ he said. Kayani also highlighted the establishment of exporter facilitation committees in major export centres, including Karachi, Lahore, Sialkot and Faisalabad. The committees bring together FBR officials and exporters and are intended to provide a regular mechanism for identifying and resolving issues faced by businesses. The minister said many difficulties experienced by taxpayers and exporters were linked to procedures and administrative mechanisms rather than tax rates. â€œHalf the friction in the system, including in FBR, is mostly related to processes and mechanisms as opposed to tax rates themselves,â€ he said. He said the government was receiving support from development partners, including the ADB, for its wider FBR transformation programme. The ultimate objective, Kayani said, was not simply to collect more taxes but to establish a tax system that was more transparent, equitable and easier for taxpayers to navigate. ADB backs Pakistanâ€™s tax reform agenda Speaking at the event, ADB Vice President for South, Central and West Asia Yingming Yang said tax collection and domestic resource mobilisation were crucial to sustainable development. He said robust revenue systems enabled governments to invest in people, infrastructure and resilience while reducing dependence on debt. Addressing challenges such as Pakistanâ€™s narrow tax base, widespread informality and low compliance was vital for fiscal sustainability, Yang said. He added that Pakistanâ€™s tax reform agenda was gaining momentum and could help increase revenue collection, strengthen documentation of the economy and improve data collection for better policymaking and planning. Strong revenue collection enables governments to invest in people and provide better public services, including health, education and communications, he said. Yang said reforms to the revenue collection system could also help Pakistan address its broader fiscal challenges. He reaffirmed the ADBâ€™s commitment to providing financial and technical assistance, as well as knowledge-sharing, to support Pakistan in modernising its tax administration and transforming its revenue collection system. The event, he added, would also provide an opportunity to discuss policy mechanisms and share international best practices for broadening the tax base and improving domestic revenue mobilisation.

Date: 2026-09-04

Details: Written by Hamza Shahnawaz in Taxation, Trade & Industry The Pakistan Chemicals & Dyes Merchants Association has urged the FBR to urgently resolve IRIS technical issues affecting timely Sales Tax Return filing. KARACHI: The Pakistan Chemicals & Dyes Merchants Association (PCDMA) has warned that persistent technical glitches in the Federal Board of Revenueâ€™s (FBR) IRIS system are creating major hurdles for the timely filing of Sales Tax Returns. The association said the problems were leaving registered taxpayers dependent on their suppliers and exposing businesses to the risk of penalties for late submission. In a letter to the FBR chairman, PCDMA Chairman Salim Valimuhammad urged the tax authority to address the issue on an urgent basis, saying recent changes to the IRIS system had made it increasingly difficult for taxpayers to meet statutory filing deadlines. He particularly highlighted problems relating to Annex H1 â€” Statement of Stock for Traders, introduced following the implementation of SRO 350(I)/2024. According to Valimuhammad, the requirement has created an unnecessary dependency on suppliers for completing and submitting Sales Tax Returns. â€œMost taxpayers have become dependent on their suppliers to submit their returns,â€ he said, adding that the rigid dependency had significantly slowed the filing process across the country. As a result, many sales tax-registered businesses are struggling to submit their returns within the prescribed deadlines despite their willingness to remain compliant, he added. PCDMA seeks permanent solution Valimuhammad said the issue was not limited to the chemical trade and was affecting sales tax-registered businesses across Pakistan. The association, which represents around 750 members and is among the major trade bodies in the chemical sector, has therefore approached the FBR seeking a practical and permanent solution. He said PCDMA had prepared a detailed presentation highlighting the problems associated with Annex H1 and had also proposed a mechanism to resolve the matter permanently. The proposed mechanism, he added, would provide relief to taxpayers generally and help accelerate the filing of Sales Tax Returns. The PCDMA chairman stressed that the associationâ€™s objective was not to weaken tax compliance but to remove technical and procedural barriers that were preventing taxpayers from filing their returns within the prescribed timeframe. He urged the FBR chairman to treat the matter as a priority and facilitate an early resolution in the interest of both taxpayers and the government. Association calls for smoother filing process The association said a smoother and more workable filing mechanism would reduce the administrative burden on businesses, improve the pace of return submissions and strengthen overall tax compliance. Valimuhammad also offered PCDMAâ€™s assistance for any further clarification or technical input required to understand the issue and implement the proposed solution. The association expressed hope that the FBR would address the technical difficulties promptly and introduce a more efficient mechanism that enables taxpayers to meet their statutory obligations without unnecessary procedural hurdles.

Date: 2026-09-04

Details: Published September 4, 2026 Updated about an hour ago By Reuters SHANGHAI: Mainland China stocks closed largely flat on Thursday after two consecutive sessions of losses, as investors cautiously awaited US jobs data for further clues on the Federal Reserveâ€™s policy outlook and upcoming domestic indicators for signs of the broader economyâ€™s health. At the close, the benchmark Shanghai Composite index ended largely unchanged at 3,942.09 points and the blue-chip CSI300 index inched up 0.1 percent. The smaller Shenzhen index ended up 0.1 percent and the start-up board ChiNext Composite index was unchanged, while Shanghaiâ€™s tech-focused STAR50 index eased 0.4 percent. Property shares were among the biggest winners, with a sub-index bouncing 4.1 percent following three days of sharp losses. In Hong Kong, the benchmark Hang Seng index fell 0.4 percent, while the cityâ€™s tech shares dropped 1.1 percent. Shares of online fast-fashion retailer SHEIN Global Holdings plunged 8.7 percent in the third day of Hong Kong trading. All eyes are now on Fridayâ€™s US nonfarm payrolls report, where analysts are forecasting an increase of 56,000 in jobs, following Julyâ€™s shock drop of 23,000, with unemployment holding at 4.1 percent. Markets are now pricing in a 61 percent chance of a Fed rate hike in September. US monetary tightening could affect global financial markets. Meanwhile, domestic August economic data is also in focus. â€œEconomic activity should stay sluggish for August, as widely expected, yet the key thing to watch is whether a catch-up recovery starts in September on recent policy push,â€ Citi analysts said in a note. Chinaâ€™s services activity expanded at a faster pace in August, a private-sector survey showed on Thursday, with stronger domestic demand helping firms add staff for a fourth consecutive month. Meanwhile, Chinaâ€™s central bank governor told the G20 Finance Ministers and Central Bank Governors meeting that the country never deliberately pursues a trade surplus and insists on expanding domestic demand and maintaining a high level of opening up to the world, according to a statement from the bank on Wednesday.

Date: 2026-09-04

Details: Published September 4, 2026 Updated about an hour ago By Reuters FRANKFURT: European stocks rose on Thursday after three straight sessions of losses, as a global bond selloff eased and investors looked ahead to US economic data for clues on the Federal Reserveâ€™s next policy moves. The pan-European STOXX 600 was up 0.5 percent at 649.1, recovering from one-month lowshit on Tuesday. Regional indexes were also mostly higher. Soitec jumped 10.3 percent to the top of the STOXX 600 index after the French chip materials maker raised its revenue growth outlook for the second quarter of 2027 to 50 percent year-on-year from its previous forecast of 30 percent. Markets had come under pressure in recent days as the escalation of the Iran war lifted oil prices and amplified concerns over persistent inflation, rising government debts and tighter monetary policy. European equities are particularly exposed to higher oil prices due to the regionâ€™s reliance on energy imports. Oil prices eased on Thursday but remained above USD95 a barrel, while euro zone bond yields retreated from multi-year highs. â€œUntil there is a complete stop to attacks from both sides it is hard to see commodity prices pull back in a meaningful way, or bonds stage a long-term recovery as central banks will remain wary about inflation risks,â€ Kathleen Brooks, research director at XTB, said. The latest survey showed growth in the euro zoneâ€™s dominant services industry slipped to a two-month low in August, though solid, broad-based demand kept overall private sector activity steady. Traders are nearly certain the European Central Bank will raise borrowing costs to 2.5 percent at its policy meeting next week and deliver two additional quarter-point rate hikes by mid-2027. â€œEven though Brent will fluctuate, the actual product people use is at the highs of March and April, and this will have an impact,â€ Ricardo Castillo, head of investments at Mirabaud Group, said.

Date: 2026-09-04

Details: Published September 4, 2026 Updated about an hour ago By Reuters NEW YORK: Wall Streetâ€™s main indexes rose on Thursday after Federal Reserve Governor Christopher Waller said he could support holding rates steady this month if data confirms price pressures are cooling off. The comments prompted traders to lower bets on a hike, and could dispel the gloom in markets following the latest military exchanges between the US and Iran. But borrowing costs may need to rise if inflation data shows price pressures persist, he said. Traders still expect a nearly 50 percent chance of a hike this month, according to the CME FedWatch tool. â€œEven if domestic inflation data improves, a sustained rise in oil prices could keep inflation concerns alive and make it harder for the Fed to remain on the sidelines,â€ said Jeff DerGurahian, loanDepotâ€™s chief investment officer. Brent crude futures rose 0.49 percent on Thursday â€” their fourth consecutive day of gains. Separately, data released on Thursday showed US services sector activity picked up in August. Investors hungry for positive catalysts are now eyeing Fridayâ€™s jobs data, but some have cautioned against placing too much emphasis on the report as Federal Reserve Chair Kevin Warsh has indicated that controlling inflation remains his top priority. In Thursdayâ€™s batch of data, initial claims for state unemployment benefits rose by 2,000 to a seasonally adjusted 206,000 in the week ended August 29, broadly in line with economistsâ€™ expectations. At 11:25 a.m. ET, the Dow Jones Industrial Average rose 612.96 points, or 1.15 percent, to 53,673.94, the S&P 500 gained 70.70 points, or 0.93 percent, to 7,737.70 and the Nasdaq Composite gained 323.62 points, or 1.23 percent, to 26,541.45. Communication services stocks led gains among the S&P 500â€™s 11 sectors, rising about 1.76 percent, while healthcare and materials slipped. Broadcom dropped 4.9 percent to a five-month low after its fourth-quarter revenue forecast fell short of Wall Streetâ€™s lofty expectations, underscoring that the firms at the center of the AI buildout have a high bar to clear. The weakness spilled over to chipmakers, with the Philadelphia Semiconductor index down more than 1 percent.

Date: 2026-09-04

Details: Published September 4, 2026 Updated about 2 hours ago By Salman Siddiqui Pakistanâ€™s pharmaceutical manufacturing industry has expressed concern over a federal ministerâ€™s directives to amend the existing drug pricing mechanism, warning that sudden changes could cripple the industry, disrupt medicine supplies and undermine efforts to ensure the availability of affordable medicines. Industry officials said the existing Drug Pricing Policy, 2018 was endorsed by the Supreme Court and was developed by the government through a thorough process involving consultations with stakeholders, rather than by any individual or small group. Federal Minister for Economic Affairs and Establishment Division Senator Ahad Cheema recently directed the Ministry of National Health Services and the Drug Regulatory Authority of Pakistan (DRAP) to urgently revise the regulatory framework governing drug pricing. The proposed changes include amendments to the Hardship Policy and the composition of the DRAP Policy Board, with a focus on protecting consumers from unjustified price increases while ensuring the availability of essential medicines. Under the existing pricing policy, the government determines and regulates the prices of life-saving medicines, including those covered under hardship cases, where a medicine becomes too expensive to manufacture or import at the price currently allowed by the government. Essential medicines account for roughly 40 percent â€” or around 500 molecules â€” of all medicines marketed and sold in the country, indicating that the government continues to exercise significant control over medicine pricing. The pharma industry said repeated government interventions and changes to pricing policies create inconsistency and hinder the industryâ€™s performance. Industry officials urged the authorities to allow existing pricing policies, including the hardship mechanism, to remain in place for a longer period to deliver the desired results, including the availability of affordable medicines and higher exports. They said the existing pricing policy provides a transparent mechanism for revising prices of essential medicines and follows international standards. Under the policy, the government allows a maximum price increase equivalent to 70 percent of the annual Consumer Price Index (CPI) inflation rate when revising medicine prices. Price revisions are also made after benchmarking the prices of the same molecules in neighbouring countries, including India, Bangladesh and Sri Lanka. Accordingly, authorities revised the prices of essential medicines by a maximum of 4.9 percent in fiscal year 2026, equivalent to 70 percent of the 7 percent CPI inflation recorded during the year. The increase was kept below corresponding prices in neighbouring countries. The pharma industry said this demonstrated that the pricing process remained transparent, with the government not allowing prices to exceed levels at which medicines are available in regional countries, despite higher production costs in Pakistan. Industry officials also pointed to India, saying the country had maintained consistency in its pricing policies and deregulated the prices of a majority of medicines. They said this helped India achieve pharmaceutical export earnings of close to $30 billion in 2026, almost equivalent to Pakistanâ€™s total export earnings in FY26. The industry said Pakistanâ€™s pharmaceutical manufacturing sector had a net profit margin of around 3 percent some two years ago, before the government introduced its 2024 deregulation policy allowing manufacturers to set prices for non-essential medicines. Following deregulation, profit margins have improved to around 10 percent, according to an industry official. Industry officials further argued that pressure on pharmaceutical companiesâ€™ profit margins due to what they termed â€œunnecessary government interventionsâ€ could compromise medicine quality. They also pointed to the departure of a large number of multinational pharmaceutical companies from Pakistan in the past, attributing it to inconsistent policies. According to industry officials, several other sectors, including banks, oil and gas marketing companies and fertiliser manufacturers, were earning higher profit margins than the pharmaceutical industry. They argued that pharmaceutical companies were â€œjust doing businessâ€ and needed to earn profits to reinvest in the industry, increase the availability of affordable medicines, expand production lines and boost exports. The industry also said deregulation of non-essential medicines had increased competition among pharmaceutical companies over prices and quality. â€œCompetition always keeps a check on pricing and quality of medicines,â€ industry officials said, adding that patients remained the biggest beneficiaries of competition among pharmaceutical companies. Copyright Business Recorder, 2026

Date: 2026-09-04

Details: Published September 4, 2026 Updated about 2 hours ago By Reuters NEW YORK: Oil prices were mixed on Thursday, supported after US strikes on Iran and renewed Israeli threats against Tehran revived concerns about disruption to Middle East supplies but pressured by comments from Russian President Vladimir Putin signaling openness to peace negotiations. Brent crude futures settled down 11 cents, or 0.12 percent, at USD 95.52 a barrel while US West Texas Intermediate crude futures rose 29 cents, or 0.32 percent, to USD 91.30. Both contracts hit six-week highs earlier in the session. Iranâ€™s health minister said 18 people were killed and 108 wounded in Tuesday nightâ€™s US strikes across Iran. The Iranian Red Crescent said four people were killed and 67 wounded at a wedding ceremony near the coast of the Strait of Hormuz. Three Iranian Army pilots were killed in the US strikes, the semi-official Tasnim news agency reported. The attacks were the most substantial exchange of fire between the United States and Iran since July. The war, which began with US-Israeli strikes at the end of February, is in its seventh month. Vice President JD Vance told reporters on Thursday that the US does not plan to hold talks with Iran unless Tehran stops attacking commercial shipping in the Strait of Hormuz. â€œThe market will watch out if the US strike earlier this week was one off event or not,â€ said UBS analyst Giovanni Staunovo. Israeli Defence Minister Israel Katz renewed warnings that Israel would â€œcrippleâ€ Iranâ€™s military and civilian infrastructure, including energy facilities, if Tehran launched attacks against it. Saxo Bank analyst Ole Hansen said Katzâ€™s comments had helped to push oil prices higher. Comments from Russian President Vladimir Putin indicating openness to peace negotiations with Ukraine could help ease concerns about Russian fuel supply disruptions if attacks on refineries decline and production normalizes, a factor pressuring prices on Thursday, said Phil Flynn of Price Futures Group. Putin said on Thursday there was a chance of reaching an agreement to end the war in Ukraine. Speaking at an economic forum in Russiaâ€™s far east, he said a number of countries including the US and China were ready to support a peace settlement. Fewer vessels transit strait Six commodity vessels transited the Strait of Hormuz on Wednesday, down from 11 a day earlier and well below the 10-day average of around 13, preliminary shipping data showed on Thursday. â€œThe oil market remains tight, with oil inventories still declining globally translating into higher prices,â€ said UBS energy analyst Giovanni Staunovo. Meanwhile, Iran added ships to the list of vessels it deems non-compliant and subject to fines, confiscation or detention if they try to sail through the strait. Iraqi vessels are among those Iran has allowed to pass through Hormuz. Iraq increased its oil exports to around 2.34 million barrels per day in August from about 1.35 million bpd in July, two Iraqi energy officials said on Wednesday, with September exports also expected to increase as heavy discounts and Iranian approvals for Iraqi tankers encouraged buyers.

Date: 2026-09-04

Details: Published September 4, 2026 Updated about 2 hours ago By Reuters NEW YORK: US natural gas futures edged up to an eight-week high on Thursday on rising flows to liquefied natural gas (LNG) export plants now that Tropical Storm Edouard has passed over the coasts of Texas and Louisiana, and on forecasts for unseasonably warm weather and higher-than-usual air conditioning demand to continue through at least mid-September. Front-month gas futures for October delivery on the New York Mercantile Exchange rose 3.6 cents, or 1.2percent, to USD2.992 per million British thermal units (mmBtu), putting the contract on track for its highest close since July 9 for a second day in a row. Recent gains also pushed the front-month into technically overbought territory for the first time in almost three months. Prices were also supported by expectations a federal report on Thursday will show that hot weather last week caused energy firms to add less gas to storage than usual for this time of year. Analysts forecast energy firms added 31 billion cubic feet (bcf) of gas to storage during the week ended August 28. That compares with an increase of 50 bcf during the same week last year and a five-year (2021-2025) average increase of 37 bcf for the period. Financial firm LSEG said average gas output in the US Lower 48 states rose to 112.9 billion cubic feet per day (bcfd) so far in September, up from a monthly high of 112.2 bcfd in August. Record output and mild spring weather this year allowed energy firms to keep the amount of gas in inventory higher than the five-year (2021-2025) average since March. But with hot weather last week, analysts said the amount of gas in storage likely eased to 5.3percent above normal during the week ended August 28 from 5.5percent above normal the previous week, according to estimates ahead of the weekly federal inventory report on Thursday. Meteorologists forecast the weather will remain mostly warmer than normal through September 18, pushing power generators to continue burning more gas than usual to keep air conditioners running. About 40percent of US power generation comes from gas-fired plants. LSEG projected average gas demand in the Lower 48 states, including exports, would slide from 112.7 bcfd this week to 108.8 bcfd next week. The forecast for next week was lower than LSEGâ€™s outlook on Wednesday. Average gas flows to the nine big US LNG export plants rose to 18.0 bcfd so far in September from 17.2 bcfd in August. That is still short of the monthly record high of 18.8 bcfd in April. The US became the worldâ€™s biggest LNG exporter in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more low-cost US gas. Around the world, gas was trading near 44-month highs of around USD25 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and USD24 at the Japan-Korea Marker (JKM) benchmark in Asia. Global gas prices have spiked in recent years primarily due to supply disruptions linked to Russiaâ€™s invasion of Ukraine in 2022 and the US-Israeli war with Iran this year. Prices in the US, however, have not reacted much to the war in Iran because the US produces all the gas it consumes domestically and US LNG companies are already liquefying as much fuel as they can. No matter how high global gas prices go, the US cannot export much more LNG until units under construction enter service in coming months and years.

Date: 2026-09-03

Details: Written by Hamza Shahnawaz in Taxation FBR proposes new procedures for ADR applications, committee remuneration, multiple cases and withdrawal of pending tax appeals ISLAMABAD: The Federal Board of Revenue (FBR) has proposed amendments to Rule 231C of the Income Tax Rules, 2002, seeking to revise procedures for the alternative dispute resolution (ADR) of tax disputes. The FBR issued SRO 1496(I)/2026 dated September 2, 2026, proposing amendments to Rule 231C, which governs disputes referred for resolution under Section 134A of the Income Tax Ordinance, 2001. Under the proposed amendments, an aggrieved person seeking ADR would be required to submit a written application to the FBR in the prescribed form, along with the required supporting documents. The applicant would have to nominate a person to serve on the ADR Committee and provide the nomineeâ€™s CNIC, phone number, permanent address and email address, along with the undertaking required under the Income Tax Ordinance. The proposed rules would further require the taxpayerâ€™s nominee to submit three names of retired judges for consideration as Chairperson of the ADR Committee. The applicant would also have to provide details including their phone numbers, bank account information, permanent addresses and email addresses. Proposed remuneration for ADR committees The FBR has proposed a revised lump-sum, one-time remuneration structure for members of ADR committees based on the disputed tax liability. For disputed tax liability of up to Rs50 million, the proposed remuneration would be: â€¢ Rs300,000 for the Chairperson. â€¢ Rs150,000 for each other committee member, excluding the Chief Commissioner Inland Revenue. For disputed tax liability exceeding Rs50 million, the proposed remuneration would be: â€¢ Rs500,000 for the Chairperson. â€¢ Rs250,000 for each other committee member, excluding the Chief Commissioner Inland Revenue. The Chairperson and committee members may also be entitled to TA/DA equivalent to the allowances admissible to BPS-22 and BPS-21 federal government officers, respectively. Rules proposed for multiple ADR applications The draft amendments also provide for the clubbing of multiple applications submitted by the same taxpayer during the same financial year where they involve identical issues. Where the same Chairperson has been appointed and the committees are constituted within 90 days, the applications may be clubbed and processed together. In such circumstances, the members would be considered to constitute a single committee for all purposes, including determination of remuneration, irrespective of whether separate orders for constituting the committees had been issued. The proposed amendments also state that where an ADR Committee becomes defunct or is dissolved because of an administrative, legal or procedural issue that is not attributable to the FBR or taxpayer, no remuneration would be payable. Any amount already advanced or deposited would have to be refunded to the respective parties within 15 days of the committeeâ€™s dissolution. Conditions for ADR committee members The draft rules prescribe conditions for Chairpersons and members who become unavailable or are unable to perform their functions because of a conflict of interest or any other reason. Such members would be required to notify the FBR in writing within seven days of notification of the committeeâ€™s constitution. However, once the prescribed remuneration has been released or paid, the member or Chairperson would not be entitled to recuse themselves or withdraw from the proceedings until a final decision has been reached or the committee has been dissolved. Withdrawal of pending appeals The proposed amendments also introduce a prescribed application for withdrawal of an appeal under Section 134A(9) of the Income Tax Ordinance, 2001. Under the proposed procedure, a taxpayer who has applied for the constitution of an ADR Committee and whose committee has subsequently been constituted would be required to withdraw the relevant pending appeal, reference application or civil appeal. The prescribed application would seek disposal of the appeal as withdrawn while retaining the taxpayerâ€™s right to seek reinstatement if the ADR Committee fails to decide the dispute within the stipulated period. The proposed amendments are aimed at establishing a more structured framework for processing ADR applications, constituting committees, determining remuneration and managing appeals linked to tax disputes.

Date: 2026-09-03

Details: Written by Faisal Shahnawaz in Taxation FBR adds four new provisions to tax rules as experts seek adequate time for taxpayers to comply with revised forms ISLAMABAD: The Federal Board of Revenue (FBR) has amended the income tax return forms for Tax Year 2026, nearly two months after the official launch of return filing for taxpayers. The FBR issued SRO 495(I)/2026 on Wednesday, introducing further amendments to the Income Tax Rules, 2002 under the powers granted by Section 237 of the Income Tax Ordinance, 2001. According to the notification, the amendments have been made following the earlier publication of SRO 835(I)/2026 in May 2026, as required under the Income Tax Ordinance. The latest notification adds four new parts to the Second Schedule of the Income Tax Rules, 2002. These include Part-II-ZE, Part-II-ZF, Part-II-ZG and Part-II-ZH. FBR revises Tax Year 2026 return forms The amendments have been introduced after taxpayers had already begun filing their income tax returns for Tax Year 2026 under the previously notified return forms. The development is expected to raise questions over the Tax Year 2026 return filing deadline, which is currently set for September 30, 2026. Taxpayers and tax practitioners may now need to review the revised provisions and determine whether the amendments affect information already prepared or submitted under the earlier return forms. Tax experts seek additional filing time Tax experts have argued that taxpayers should be provided adequate time to comply with changes introduced through amended return forms. They maintain that the FBR should allow three months from the date of issuance of the revised forms for taxpayers to file their returns, even where amendments are introduced after the start of the filing period. According to tax practitioners, providing additional time would help taxpayers understand the revised requirements, make necessary adjustments and complete their returns without facing compliance difficulties. The timing of the amendments could therefore create uncertainty among taxpayers and tax practitioners regarding the applicable return forms and the time available to complete Tax Year 2026 filing. New provisions incorporated into tax rules The FBRâ€™s latest notification formally incorporates the new provisions into the Income Tax Rules, 2002 and follows the authority granted to the tax authority under the Income Tax Ordinance, 2001. With the filing period already under way, taxpayers and advisers are expected to closely examine the amended forms and related provisions before submitting or revising their Tax Year 2026 returns. The changes also put renewed focus on the need for clear guidance and sufficient compliance time whenever tax return forms are amended after the filing process has commenced.

Date: 2026-09-03

Details: Written by Faisal Shahnawaz in Taxation Tax offices, Customs formations and warehouses ordered to address fire hazards and strengthen emergency preparedness ISLAMABAD: The Federal Board of Revenue (FBR) has directed all its field formations to conduct comprehensive reviews of fire safety arrangements at offices and buildings, including rented premises, and immediately address any identified deficiencies. The directive covers FBR headquarters as well as regional tax offices, Customs formations, appeals offices, directorates, PRAL offices, computer wings, data centres and call centres. According to the FBR instructions, heads of all field formations must review fire safety systems both internally and in coordination with relevant fire and rescue agencies, building management authorities or other competent bodies. The review will cover fire-fighting systems, emergency exits, internal electrical installations, fire safety standard operating procedures (SOPs), emergency drills and staff awareness, among other safety arrangements. FBR orders inspection of fire safety equipment The FBR has directed offices to ensure the availability, proper placement, functionality and regular maintenance of fire extinguishers, fire-fighting equipment, fire alarms and detection systems. Any deficiencies identified through internal inspections or assessments by relevant fire and rescue authorities must be rectified immediately. The board has also ordered thorough inspections of electrical wiring, distribution boards, UPS systems, generators and other electrical installations to identify and eliminate potential fire hazards. Evacuation plans and emergency drills FBR field formations have been instructed to prepare and prominently display evacuation plans showing escape routes, emergency exits, fire-fighting equipment and designated assembly points. Officials and staff must be familiarised with these plans, while necessary emergency evacuation drills are to be conducted regularly. Emergency exits, stairways, corridors and escape routes must remain clear and unobstructed. Offices have also been instructed to ensure adequate emergency lighting and clearly visible safety signage. The FBR further directed formations to review and implement fire safety and emergency response SOPs and ensure that employees are aware of fire prevention measures, evacuation procedures and the proper use of fire-fighting equipment. Fire safety focal persons to be designated Each field formation has been asked to designate appropriate officers or staff members as fire safety focal persons. Emergency contact numbers for Rescue services, fire brigades and other relevant emergency agencies should also be displayed prominently. The board has additionally stressed the safe storage of files, records and other combustible materials, particularly ensuring that such items are kept away from electrical installations, generators and fuel storage areas. Generators and fuel storage facilities must be properly installed and adequately ventilated. They are also required to undergo regular inspections and maintenance, while fuel must be stored safely away from heat sources, electrical installations and other potential ignition sources. Special instructions for Customs warehouses The FBR has also issued specific safety instructions for Customs warehouses. These facilities must have adequate fire-fighting equipment and functional fire detection and alarm systems. Combustible and hazardous goods must be stored safely, while access and exit routes must remain clear. Regular inspections of electrical installations in Customs warehouses have also been made mandatory. The FBR directed all heads of field formations to take any other measures necessary to strengthen fire-fighting and fire safety systems. Compliance report deadline All heads of field formations have been asked to take immediate action wherever the required measures have not already been implemented. They must submit a compliance report to FBR Headquarters by September 15, 2026, detailing the status of fire safety arrangements, deficiencies identified and corrective measures taken. The FBR has also instructed field formations to immediately report any fire-related incident, including minor incidents, to headquarters along with details of the incident and remedial measures undertaken. Markets / Cotton & Textile KCA DECREASES SPOT RATE BY RS100 TO RS19,400 PER MAUND Published September 3, 2026 Updated about an hour ago By Recorder Report LAHORE: The Spot Rate Committee of the Karachi Cotton Association decreased the spot rate by Rs 100 per maund and closed it at Rs 19,400 per maund. Cotton Analyst Naseem Usman told BUSINESS RECORDER that the local cotton market remained easy and the trading volume remained satisfactory. He also told that the rate of cotton in Sindh is in between Rs 18,900 to Rs 19,000 per maund, while Phutti in the province is trading between Rs 8,600 to Rs 9,300 per 40 kilograms. In Punjab, cotton rates stand between Rs 18,800 to Rs 19,000 per maund, with Phutti fetching between Rs 8,500 to Rs 9,300 per 40 kilograms. The rate of cotton in Balochistan is in between Rs 18,900 to Rs 19,000 per maund. The rate of Phutti is in between Rs 8,700 to Rs 9,400 per 40 kg. Copyright Business Recorder, 2026

Date: 2026-09-03

Details: â€¢ India's central bank is successfully defending the rupee, pushing it to a two-month high despite rising oil prices and US Treasury yields Published September 2, 2026 Updated about 14 hours ago By Reuters MUMBAI: The Reserve Bank of India has stepped up its support for the rupee in recent sessions, shielding the currency from a surge in oil prices and rising U.S. Treasury yields, with a flood of deposits from non-resident Indians bolstering the central bankâ€™s firepower. The rupee has rallied past the 95-per-dollar mark to a two-month high, catching much of the market by surprise given the headwinds facing the currency. Brent crude has jumped 7% so far this week to $95.50 a barrel. The 10-year U.S. Treasury yield has climbed to its highest level in nearly three years, while the dollar index is approaching the 100 mark. The RBI has repeatedly stepped in with dollar sales, absorbing the impact of adverse external developments and pushing rupee higher. Bankers say the central bank has been increasingly active before the formal market opening over the last three sessions, followed by intervention through the trading day. Previously, the central bank largely stepped in to curb weakness in the rupee, and more recently it appears to be using its intervention to push the currency higher, the bankers said. â€œThe RBIâ€™s intention seems to be to insulate the rupee from the pressure that is building up from oil prices,â€ said Sakshi Gupta, principal economist at HDFC Bank. â€œThe larger FX reserve buffer provides it higher scope to intervene and by demonstrating its willingness to keep supporting the currency, it will deter any speculative build-up.â€ A treasury official at a private sector bank, who requested anonymity because they are not authorised to speak to the media, said the RBI may be seeking to challenge the perception that the rupee is locked into a one-way weakening trend. By doing so, the central bank could influence the hedging behaviour of corporates and speculators, they added. Flows accelerate The stepped-up intervention comes amid a surge in deposits from overseas Indians. Inflows picked up markedly in the days leading up to the schemeâ€™s deadline. Deposits stood at $65.4 billion on August 21, according to the RBIâ€™s latest update, before jumping past $100 billion by the August 31 deadline for banks to raise deposits eligible for concessional swaps, according to a media report. Banks raising these deposits can swap the dollars with the RBI for rupees at zero cost, giving them access to cheaper rupee funding while simultaneously boosting the RBIâ€™s ability to support the currency by adding to its foreign exchange reserves. Indiaâ€™s foreign exchange reserves were already at an all-time high of $729.3 billion in the week ended August 21 and are expected to rise further when more of these inflows are swapped with the RBI. Gaura Sen Gupta, chief economist at IDFC FIRST Bank, estimates that FX reserves are likely to cross $750 billion by September-end.

Date: 2026-09-03

Details: Written by Faisal Shahnawaz in Money & Banking Finance Division reviews digital payment progress, merchant adoption and government transactions ahead of the Prime Ministerâ€™s Cashless Initiative review. Minister of State for Finance Bilal Azhar Kayani chaired a high-level meeting at the Finance Division on Wednesday to review preparations for the upcoming review of the Prime Ministerâ€™s Cashless Initiative. Senior representatives from the Ministry of Finance, State Bank of Pakistan (SBP), NADRA, Capital Development Authority (CDA), Ministry of IT and Telecommunication, and private-sector stakeholders attended the meeting. The minister reviewed progress made on directives issued earlier by Prime Minister Shehbaz Sharif and discussed measures aimed at accelerating Pakistanâ€™s digital financial transformation. New Targets for Cashless Dashboard A major focus of the meeting was assessing progress achieved during the previous year and beginning the process of setting annual performance targets for the national Cashless Dashboard for the current fiscal year. Officials also considered adding new analytical indicators to the dashboard. These indicators are intended to strengthen real-time monitoring, improve data transparency and provide a clearer picture of the countryâ€™s transition toward digital payments. The meeting reviewed growth in the number of active digital merchants, overall digital transaction volumes and digital banking users during the previous year. Government Payments to Be Digitised Participants also examined progress in converting government payments to digital channels across state-owned enterprises (SOEs) and autonomous bodies. The government reiterated its objective of fully digitising payments made to vendors, employees and pensioners. The move is expected to improve efficiency, transparency and traceability within public-sector financial transactions. Officials further discussed measures to increase merchant adoption of digital payment systems across the country. A centralized merchant database was proposed to improve real-time visibility of transactions and support better monitoring of digital financial activity. Focus on Public Convenience The meeting also emphasized simplifying digital payment processes so citizens can make electronic payments conveniently across different services and touchpoints. Reaffirming the governmentâ€™s commitment to Prime Minister Shehbaz Sharifâ€™s vision, Kayani said Pakistan was working toward a more transparent, documented and inclusive economy. He stressed that regular reviews would continue to monitor implementation and ensure that digital financial reforms are carried out swiftly while maximizing convenience for the public.

Date: 2026-09-02

Details: Written by Hamza Shahnawaz in Taxation FBR outlines cash and accrual accounting rules and explains the tax treatment of unpaid liabilities and changes in accounting methods. ISLAMABAD: The Federal Board of Revenue (FBR) has explained the accounting methods to be used for computing taxable business income for Tax Year 2027. According to the Income Tax Ordinance, 2001, updated up to June 30, 2026, Section 32 provides that a personâ€™s income chargeable to tax shall be computed according to the method of accounting regularly employed by that person. Under the law, a company is required to account for income chargeable under the head â€œIncome from Businessâ€ on an accrual basis. Other persons may account for such income on either a cash or accrual basis, subject to the provisions of the Ordinance. The FBR may also prescribe that any class of persons account for business income on either a cash or accrual basis. Change in accounting method A taxpayer may apply in writing to change their method of accounting. The Commissioner may approve the application if satisfied that the change is necessary to clearly reflect the personâ€™s taxable business income. Where the accounting method is changed, the taxpayer must make appropriate adjustments to income, deductions, credits or other affected items to ensure that no item is omitted or taken into account more than once. Cash-basis accounting Under Section 33, a person using the cash basis for business income recognises income when it is received and incurs expenditure when it is paid. Accrual-basis accounting Under Section 34, a person using the accrual basis recognises income when it becomes due and incurs expenditure when it becomes payable. An amount becomes due when the taxpayer becomes entitled to receive it, even if payment is postponed or is to be made in instalments. Similarly, an amount becomes payable when all events determining the liability have occurred and the amount can be determined with reasonable accuracy. Treatment of unpaid liabilities The FBR has also specified the tax treatment of unpaid liabilities where a taxpayer has already been allowed a deduction for expenditure. If the liability, or part of it, remains unpaid for three years from the end of the tax year in which the deduction was allowed, the unpaid amount becomes chargeable to tax under the head â€œIncome from Businessâ€ in the first tax year following the expiry of the three-year period. In addition, where a taxpayer has been allowed a deduction for a trading liability and subsequently derives any benefit in respect of that liability, the value of the benefit is taxable as business income in the tax year in which it is received. If an unpaid liability has previously been brought to tax under this provision and the taxpayer subsequently pays the liability, or part of it, a deduction for the amount paid is allowed in the tax year in which the payment is made. These provisions form part of the Income Tax Ordinance, 2001, updated by the FBR up to June 30, 2026, and applicable for Tax Year 2027.

Date: 2026-09-02

Details: Written by Hamza Shahnawaz in Taxation FBR outlines conditions for claiming bad debt deductions and sets out tax treatment for subsequent recoveries and consumer loan provisions. ISLAMABAD: The Federal Board of Revenue (FBR) has clarified the rules governing bad debt deductions for Tax Year 2027 under Section 29 of the Income Tax Ordinance, 2001. According to the Income Tax Ordinance, 2001, updated up to June 30, 2026, a person may claim a deduction for a bad debt if the prescribed conditions are fulfilled. The debt must have either previously been included in the personâ€™s taxable business income or relate to money lent by a financial institution in deriving taxable business income. The law further requires the debt, or part of it, to be written off in the personâ€™s accounts during the relevant tax year. There must also be reasonable grounds for believing that the debt is irrecoverable. The amount claimed as a deduction cannot exceed the amount of the debt actually written off in the accounts during the tax year. Recovery of previously deducted bad debts The FBR has also outlined the tax treatment where a person subsequently recovers an amount against a debt for which a bad debt deduction was previously allowed. If the amount recovered exceeds the difference between the total bad debt and the deduction previously allowed, the excess will be treated as Income from Business in the tax year in which the amount is received. Where the amount recovered is less than that difference, the shortfall will be allowed as a bad debt deduction when computing business income for the tax year in which the recovery is made. Provision for consumer loans The FBR has separately outlined provisions for bad debts arising from consumer loans under Section 29A. A non-banking finance company or the House Building Finance Corporation may claim a deduction of up to 3% of income for the tax year arising from consumer loans to create a reserve against bad debts from such loans. If a bad debt cannot be fully adjusted against the reserve, the amount exceeding the available reserve may be carried forward for adjustment against the reserve in subsequent years. The law defines a consumer loan as money or its equivalent provided by a non-banking finance company or the House Building Finance Corporation to a debtor primarily for personal, family or household purposes. The definition also covers debts created through the use of a lenderâ€™s credit card or a similar arrangement, as well as insurance premium financing. The provisions form part of the Income Tax Ordinance, 2001, as updated by the FBR for Tax Year 2027.

Date: 2026-09-02

Details: Written by Hamza Shahnawaz in Taxation Customs officers who missed the August 30 deadline have been directed to submit declarations without further delay ISLAMABAD: The Federal Board of Revenue (FBR) has directed officers of the Pakistan Customs Service (PCS) to submit declarations regarding foreign nationality and foreign travel documents within the prescribed 90-day period. The latest directive follows similar instructions issued to officers of the Inland Revenue Service (IRS), requiring FBR officers to provide details concerning their foreign nationality and travel documents under the Civil Servants (Disclosure and Regulation of Foreign Nationality) Rules, 2026. According to the FBR directive, officers were earlier asked through Circular C.No.4(6)/S.MIR-I/2018 dated June 9, 2026, to submit the declaration on the prescribed proforma by July 8, 2026. However, a number of officers have yet to provide the required information. 90-day deadline expires The FBR said that under Rule 3(3) of the Civil Servants (Disclosure and Regulation of Foreign Nationality) Rules, 2026, the declaration was required to be submitted within 90 days, with the deadline falling on August 30, 2026. As the deadline has now lapsed, Customs officers who have not submitted the required information have been directed to provide the duly completed prescribed proforma to their respective Secretaries of the Management Wing through the designated email addresses by the close of office hours. For BS-17 to BS-18 officers of the Pakistan Customs Service, including Ex-Cadre officers, the declaration is to be submitted through the Management Wingâ€™s designated channel. Meanwhile, BS-19 to BS-22 PCS officers, including Ex-Cadre officers, have been assigned a separate management channel for submission of the required information. The FBR has also directed all heads of field formations to ensure compliance with the instructions previously communicated through the June 9, 2026 circular. Failure to declare may constitute misconduct The FBR has specifically drawn officersâ€™ attention to Rule 3(4) of the Civil Servants (Disclosure and Regulation of Foreign Nationality) Rules, 2026. Under the rule, failure to submit the required declaration under the relevant provisions, or making a false declaration, constitutes misconduct under the Civil Servants (Efficiency and Discipline) Rules, 2020. The provision places an obligation on officers to provide accurate information regarding their foreign nationality and foreign travel documents within the prescribed framework. FBR pushes compliance among Customs officers The latest directive comes as the FBR moves to ensure compliance with the federal governmentâ€™s rules concerning the disclosure and regulation of foreign nationality among civil servants. The requirement covers declarations relating to foreign nationality and foreign travel documents, with officers who have not yet complied being instructed to submit the required information without further delay. The move follows the FBRâ€™s earlier efforts to obtain similar declarations from Inland Revenue Service officers and forms part of the broader implementation of the 2026 rules across the federal civil service.

Date: 2026-09-02

Details: Written by Hamza Shahnawaz in Taxation, Top stories New framework expands intelligence- and WeBOC-based cargo monitoring while broadening customs enforcement responsibilities across Pakistan ISLAMABAD: The Federal Board of Revenue (FBR) has introduced further amendments to the customs enforcement framework, expanding intelligence- and WeBOC-based monitoring of customs-cleared import and export cargo and formally incorporating several Digital Enforcement Stations (DES) and Mobile Enforcement Stations (MES). The FBR issued SRO 1448(I)/2026, amending its earlier notification S.R.O. 1637(I)/2024 dated October 18, 2024. The latest notification was issued under powers conferred by the Customs Act, 1969, read with relevant provisions of the Sales Tax Act, 1990. Under the revised framework, customs authorities will undertake intelligence and WeBOC-based monitoring of customs-cleared import and export cargo at ports, off-dock terminals, land customs stations, dry ports and airports. The monitoring will also cover cargo placed on hold in the WeBOC system, while routine clearance operations of the relevant collectorates will remain unaffected. The notification also assigns responsibility for monitoring the gates of ports, wharfs, terminals and off-dock terminals within the civil division of Karachi. Digital Enforcement Stations expanded A significant part of the notification relates to the operations of Customs Digital Enforcement Stations and Mobile Enforcement Stations established along the Indus and Hub rivers. The notified enforcement network includes: â€¢ DES Thakot Battagram â€¢ DES Tarbela â€¢ DES Swabi-Mi-Motorway â€¢ DES Attock GT Road â€¢ DES Khushal Garh â€¢ DES DIK-Hakla Motorway M-14 (CPEC) â€¢ DES Kalabagh Bridge â€¢ DES Jinnah Bridge â€¢ DES Chashma Bridge The network further covers enforcement points at DIK-Bhakkar Road, Taunsa, Ghazi Ghat, Zahir Pir, Kashmore or Guddu, Arror-Sukkur, Sukkur Barrage, Larkana-Khairpur Bridge, Dadu-Moro Bridge, Amri Qazi-Ahmed, Kotri Bridge and Aral-Sehwan. For the Hub area, the notification lists DES Hub-Moachko, DES Hub-Bypass Road and MES Hub-Mygarhi Cut among the designated enforcement locations. Greater focus on EFS and export-related matters The revised customs structure also assigns responsibilities relating to the Export Facilitation Scheme (EFS) and legacy matters involving Duty and Tax Remission for Exports, Manufacturing Bonds and Export Oriented Units. In Sindh, these matters will cover the relevant territorial jurisdiction, excluding districts falling under the jurisdiction of the Collectorate of Customs Exports Karachi. The notification also adds responsibility for matters concerning the Sialkot Export Processing Zone and Gujranwala Export Processing Zone, along with customs residential colonies within the relevant collectorateâ€™s jurisdiction. New responsibilities for warehouses and clearing agents The FBR has also revised responsibilities concerning customs warehouses in Karachi. The amendments cover the licensing of public and private warehouses, diplomatic bonded warehouses and duty-free shops, subject to specified exclusions. Another addition assigns responsibility for the licensing of clearing agents. The notification further provides for the issuance of user IDs to all external users of WeBOC in specified jurisdictions. Customs coverage expanded in KP and Balochistan The amendments also set out customs responsibilities for Export Processing Zones (EPZs) in Balochistan. The Collectorate of Customs Appraisement, Taftan, will handle customs clearance matters for specified EPZs, including Saindak, Siadiq and Reko Diq, as well as any future EPZ established within its territorial jurisdiction. Similarly, the Collectorate of Customs Appraisement, Gwadar, will deal with customs clearance for the Duddar Export Processing Zone and future EPZs established within its jurisdiction. For North Khyber Pakhtunkhwa, the revised framework covers cargo clearance for imports, exports, EPZs and temporary imports, excluding international transit, across specified civil divisions and customs stations. These include Peshawar Dryport, Shabqadar, Azakhel, Amangarh, Upper Dir, Nawa Pass, Jamrud, Shergarh, Khapakh, Arandu, Shah Saleem and Torkham, as well as EPZ Risalpur. The notification also assigns EFS, Duty and Tax Remission for Exports, Manufacturing Bonds, Export Oriented Units and EPZ-related matters to the relevant civil divisions of North KP. A similar arrangement has been notified for South Khyber Pakhtunkhwa, covering customs stations in Kohat, Bannu, D.I. Khan and Miranshah. The designated locations include Tank, Thall, Kharlachi, Shaheedano Dand, Burki, Lawara Boya-Datta Khel, Angoor Adda, Khand Narai, Ghulam Khan, Bakka Khel and Terimengal, as well as EPZ Miranshah. Shift towards digital, intelligence-led enforcement The FBRâ€™s latest amendments represent a broader shift towards intelligence-led and digital monitoring of customs-cleared cargo while redefining enforcement responsibilities across ports, customs stations, warehouses and export zones. The expanded network of Digital Enforcement Stations and Mobile Enforcement Stations is expected to strengthen post-clearance monitoring and provide customs authorities with a wider operational framework for monitoring the movement of goods across key trade routes. The revised responsibilities also seek to streamline customs oversight of export schemes, warehouses, clearing agents and Export Processing Zones across different regions of the country

Date: 2026-09-02

Details: Written by Faisal Shahnawaz in Money & Banking Agriculture credit disbursements jumped 24.7% in FY2025-26, while the number of borrowers rose to 3.26 million. Pakistanâ€™s banking sector significantly expanded financing for the agriculture sector during fiscal year 2025-26, with total agriculture credit disbursements reaching Rs3,231.56 billion. The figure represents a 24.7% increase compared with Rs2,592.23 billion disbursed during FY2024-25. The latest data issued by the State Bank of Pakistanâ€™s Agriculture Credit and Financial Inclusion Department showed that the number of borrowers also increased during the year. Total outstanding borrowers receiving agricultural financing for production and development purposes climbed 4.8% to 3.26 million in FY26, compared with 3.11 million a year earlier. Production-related financing accounted for the largest share of agricultural lending during the period. According to the data, around Rs2,924 billion was disbursed for production purposes, reflecting continued demand for financing among farmers and other stakeholders across the agricultural value chain. Commercial banks remained the largest contributors to Pakistanâ€™s agriculture credit disbursement. Their combined lending rose 26.3% year-on-year to Rs2,791 billion in FY26 from Rs2,209 billion in FY25. Among commercial banks, the five major banks provided Rs1,642 billion, representing 13.9% annual growth. Mid-sized banks recorded a much stronger increase, disbursing Rs898.17 billion, up 61.7%. Islamic banks also expanded their agriculture financing by 18.4% to Rs250.38 billion. Specialized banks posted another notable increase in agricultural lending. Their total disbursements rose 26.7% to Rs108.45 billion during FY26 from Rs85.62 billion in the previous fiscal year. Zarai Taraqiati Bank Limited (ZTBL) accounted for Rs99.61 billion, showing a substantial 36.5% increase over FY25. Microfinance institutions and rural support programs also contributed to the overall growth. Microfinance banks increased their agricultural lending by 10.3% to Rs278.33 billion, while financing by Microfinance Institutions and Rural Support Programs rose 19.6% to Rs53.81 billion. Meanwhile, the total outstanding agriculture credit reached Rs1,257.84 billion by the end of June 2026, registering a 25% increase from Rs1,004.86 billion at the end of FY25.

Date: 2026-09-02

Details: Written by Faisal Shahnawaz in Money & Banking, Trade & Industry Private-sector credit records a negative flow as businesses remain cautious about borrowing amid elevated financing costs ISLAMABAD: Pakistanâ€™s private sector reduced its outstanding borrowing from the banking system by more than Rs371.6 billion, as elevated interest rates and subdued economic conditions continued to weigh on demand for bank financing. According to provisional monetary data released by the State Bank of Pakistan (SBP) for the week ended August 21, 2026, credit to the private sector stood at Rs11.412 trillion at the end of June 2026. The data showed a negative flow of Rs371.662 billion in private-sector credit during the period under review, indicating a significant reduction in outstanding borrowing. Private-sector credit declines across banking segments The contraction was recorded across conventional and Islamic banking channels. Credit extended through conventional banking branches declined by Rs198.609 billion, while financing through Islamic banks fell by Rs135.249 billion. Islamic banking branches of conventional banks also recorded a decline of Rs37.805 billion. The figures suggest that businesses have remained cautious about taking on fresh bank financing amid relatively high borrowing costs and challenging economic conditions. Reduced demand for credit could also indicate that businesses are prioritising deleveraging and cash-flow management rather than expanding their borrowing commitments. Overall non-government credit also falls Credit to the broader non-government sector declined by Rs578.110 billion, reaching Rs14.426 trillion. Within this category, credit to public-sector enterprises (PSEs) declined by Rs173.508 billion, while credit to non-bank financial institutions fell by Rs32.940 billion. The decline points to weaker demand for bank financing across much of the non-government sector during the period. Government remains dominant borrower While private-sector borrowing contracted, the government continued to account for the bulk of borrowing from the banking system. Net government-sector borrowing stood at Rs37.316 trillion at end-June 2026, while government borrowing from scheduled banks reached Rs35.735 trillion. The figures underline the banking sectorâ€™s continued role in meeting the governmentâ€™s fiscal financing requirements. Government borrowing from scheduled banks is primarily raised through auctions of Market Treasury Bills (MTBs), while longer-term financing is obtained through Pakistan Investment Bonds (PIBs). The contrast between declining private-sector credit and substantial government borrowing highlights the competing demands placed on the banking system. Broad money contracts during period The SBP data also showed a contraction in broad monetary aggregates. Broad money (M2) stood at Rs46.460 trillion at end-June 2026 and recorded a negative flow of Rs2.728 trillion during the period under review. Total deposits with banks declined by Rs2.574 trillion, while currency in circulation increased by Rs153.357 billion. The banking systemâ€™s net domestic assets declined by Rs2.391 trillion, while net foreign assets fell by Rs337.195 billion. High borrowing costs weigh on businesses The latest figures highlight a notable shift in credit conditions, with private-sector borrowing falling sharply while government financing requirements remain substantial. The decline in private-sector credit suggests that businesses continue to exercise caution over new borrowing commitments, particularly where financing costs remain elevated. A sustained contraction in private-sector credit could have implications for business expansion, investment and working-capital activity, although the impact will depend on broader monetary and economic conditions. The trend will be closely monitored as monetary conditions evolve and businesses assess the cost and availability of bank financing.

Date: 2026-09-02

Details: Published September 2, 2026 Updated about 2 hours ago By Reuters NEW YORK: The main US stock indexes slipped on Tuesday, as elevated bond yields and higher oil prices kept investors at bay at the start of a historically weak month for equities. A sharp increase in rate-hike bets has soured sentiment in recent sessions, while renewed clashes in the Middle East have heightened worries that borrowing costs may need to rise to contain price pressures. The selloff in US Treasuries also pushed yields to their highest in months, dampening risk appetite further. Higher yields on risk-free Treasuries typically reduce the appeal of equities. â€œItâ€™s time to trim the winners and position a little bit more defensively,â€ said Ryan Isherwood, founder and CEO of Significance Capital. â€œThe rubber band is stretched pretty tight on oil inventories, and itâ€™s not going to take a lot to break.â€ Investors are also contending with seasonal weakness. Since 1926, the benchmark S&P 500 has lost 0.7 percent on average in September, making it the weakest month for stocks and the only one with a negative average return, according to Fisher Investments, which cited data from Finaeon. Still, historical trends may not be a reason to step away from stocks. â€œHistorically, it is when economic conditions were deteriorating that some of these worst outcomes for September and October have played out, which is not necessarily the case this year,â€ said Angelo Kourkafas, senior global investment strategist at Edward Jones. At 11:31 a.m. ET, the Dow Jones Industrial Average fell 215.70 points, or 0.41 percent, to 52,970.20, and the Nasdaq Composite lost 185.42 points, or 0.70 percent, to 26,185.47. The S&P 500 was last down 33.19 points, or 0.43 percent, to 7,652.95 after hitting its lowest in nearly a month earlier in the session. Wall Streetâ€™s fear gauge, the CBOE Volatility Index, rose 0.43 points to 15.36. Six of the 11 main S&P 500 sectors were in negative territory. Consumer discretionary stocks led losses with a 1.60 percent fall, while information technology slid 0.78 percent. The Philadelphia SE Semiconductor index fell to a near one-month low. Broadcom was down 0.42 percent ahead of results on Wednesday. Nvidia, Intel and AMD were down between 0.68 percent and 2.56 percent. US job openings rose to 7.27 million in July, less than the 7.3 million expected, according to economists polled by Reuters. The more crucial nonfarm payrolls data is due on Friday.

Date: 2026-09-01

Details: Written by Hamza Shahnawaz in Taxation PRA says 5% Punjab Sales Tax applies to specified beauty and aesthetic services and urges consumers to demand digital receipts LAHORE: The Punjab Revenue Authority (PRA) has directed aesthetic clinics, spas, beauty salons and beauty parlours across the province to prominently display sales tax guidelines at their cash counters. According to a PRA spokesperson, the measure aims to increase awareness among businesses and consumers about the Punjab Sales Tax applicable to services provided by these establishments. The spokesperson said a 5% Punjab Sales Tax applies to services offered by aesthetic clinics, spas, beauty parlours, salons, as well as skin and laser treatment service providers. Businesses required to register with PRA Service providers operating in these sectors are required to obtain registration with the Punjab Revenue Authority, the spokesperson said. Businesses that fail to obtain the required registration may face legal action under the applicable laws. The PRA has also advised consumers to carefully check the Punjab Sales Tax charged on their bills alongside the actual service charges. The authority warned that charging customers more than the applicable tax rate is an offence. Consumers told to demand digital receipts The PRA spokesperson further advised consumers that temporary or handwritten receipts are not permissible. Customers should always demand a proper digital receipt when purchasing services from aesthetic clinics, spas, salons and beauty parlours. Consumers have also been advised to report businesses that refuse to accept card or other digital payments. According to the spokesperson, complaints can be lodged through the PRA Sahulat App or the authorityâ€™s social media platforms. Tax collected from consumers belongs to government The PRA clarified that sales tax collected from customers does not constitute business income. Instead, businesses collect the tax on behalf of the government and are required to deposit it with the government in accordance with the law. The authority said displaying the guidelines at cash counters would help businesses comply with their tax obligations while enabling consumers to understand their rights and verify the tax charged on services. The move is part of the PRAâ€™s efforts to improve compliance with Punjabâ€™s sales tax regime and increase transparency in the taxation of services across the province.

Date: 2026-09-01

Details: Written by Faisal Shahnawaz in Taxation MCI revises rebate period after billing system upgrade, with 5% early-payment relief available from bill issuance ISLAMABAD: The Metropolitan Corporation Islamabad (MCI) is set to issue property tax bills for financial year 2026-27 within 10 working days following the completion of an upgrade to its billing system, the Directorate of Revenue said on Monday. The upgraded system will cover property tax billing for residential, commercial, industrial and institutional properties, according to the directorate. The development is expected to facilitate property tax collection for the new financial year while improving the efficiency of the billing process. Rebate period revised after billing delay The MCI has revised the property tax rebate period for taxpayers following delays caused by the billing system upgrade. Under the revised arrangement, the rebate period will be calculated from the date the property tax bill is issued, rather than from an earlier date. The additional 5% rebate for early payment will remain available from the date of bill issuance until the applicable due date. The change is intended to give taxpayers adequate time to receive their bills, verify the information provided and make payments within the stipulated period to benefit from the available rebate. MCI urges timely payment The MCI has advised property owners to pay their property taxes within the prescribed period after receiving their bills. Taxpayers with queries concerning residential properties can contact the Directorate of Revenue at 9252823 and 9253057. For commercial property-related queries, taxpayers can contact 9252498 and 9252461. The Directorate of Revenue said the billing system was being modernised to improve the efficiency and transparency of property tax collection while making the process more convenient for taxpayers. The issuance of the revised bills is expected to facilitate property tax collection for FY2026-27 following completion of the billing system upgrade.

Date: 2026-09-01

Details: Written by Faisal Shahnawaz in Taxation Tax authority warns that failure to disclose or submitting false information may constitute misconduct under civil service rules ISLAMABAD: The Federal Board of Revenue (FBR) has directed all Inland Revenue Service (IRS) officers who have yet to comply with disclosure requirements to declare any foreign nationality or foreign travel documents without further delay. The directive follows the Establishment Divisionâ€™s S.R.O. No. 893(I)/2026, dated June 1, 2026, and Office Memorandum dated June 4, 2026, concerning the disclosure and regulation of foreign nationality among civil servants. The FBR had earlier directed its officers through a circular issued on June 9, 2026, to submit declarations regarding foreign nationality and foreign travel documents on the prescribed proforma by July 8, 2026. However, the tax authority said a number of officers had still not submitted the required information. 90-day deadline expires According to the FBR, Rule 3(3) of the Civil Servants (Disclosure and Regulation of Foreign Nationality) Rules, 2026 requires the declaration to be submitted within 90 days, with the deadline falling on August 30, 2026. As the deadline has now passed, the FBR has directed all officers who have not submitted the required information to complete the prescribed proforma and submit it to their respective Management Wing secretaries through the designated email addresses. For BS-17 to BS-18 IRS officers, the information is to be submitted to the Secretary HRM-II. For BS-19 to BS-22 IRS officers, submissions are to be made to the Secretary Management IR-I. Meanwhile, BS-17 and above Ex-Cadre (IRS) officers have been directed to submit their declarations to the Secretary Management IR-III. Field formations told to ensure compliance The FBR has also instructed heads of all field formations to ensure compliance with the directions issued through its June 9 circular. The latest directive is aimed at completing the disclosure process in accordance with the Civil Servants (Disclosure and Regulation of Foreign Nationality) Rules, 2026. The requirement covers information relating to foreign nationality and foreign travel documents and is part of the governmentâ€™s regulatory framework for civil servants. False declaration may constitute misconduct The FBR has reminded officers of the consequences of failing to submit the required declaration or providing incorrect information. Under Rule 3(4) of the Civil Servants (Disclosure and Regulation of Foreign Nationality) Rules, 2026, failure to submit the required declaration or making a false declaration constitutes misconduct under the Civil Servants (Efficiency and Discipline) Rules, 2020. The FBR has therefore asked all remaining officers to submit the required information without further delay and directed field formations to ensure that the disclosure requirements are fully complied with. The move comes after the expiry of the 90-day deadline and reinforces the governmentâ€™s requirement for civil servants to disclose relevant foreign nationality and travel-document information.

Date: 2026-09-01

Details: Written by Faisal Shahnawaz in Automotive, Corporate, Taxation Automaker contributes Rs140 billion to Pakistanâ€™s national exchequer in FY2025-26 as profit rises 11% to Rs25.51 billion KARACHI: Indus Motor Company Limited (IMC) has crossed the Rs1 trillion mark in cumulative tax contributions to Pakistanâ€™s national exchequer since its incorporation in 1989, while posting stronger financial results for fiscal year 2025-26. The company said it contributed Rs140 billion to the national exchequer during FY2025-26, equivalent to around 1% of the total tax revenue collected by the Government of Pakistan. Its cumulative contribution since incorporation has now exceeded Rs1,030 billion, underscoring the automakerâ€™s significant contribution to government revenues over more than three decades. The announcement came as Indus Motor reported a profit after tax of Rs25.51 billion for the year ended June 30, 2026, representing an 11% increase from Rs23.01 billion in the previous fiscal year. Indus Motor profit rises 11% According to financial statements submitted to the Pakistan Stock Exchange (PSX), the companyâ€™s earnings per share increased to Rs324.50, compared with Rs292.74 a year earlier. Gross profit rose to Rs36.30 billion in FY2025-26 from Rs31.20 billion in the preceding year. Meanwhile, expenses declined to Rs5.84 billion, compared with Rs6.11 billion in the previous fiscal year. Despite the improvement in profitability, the companyâ€™s income tax payment also increased significantly during the year. Indus Motor paid Rs17.30 billion in income tax during FY2025-26, up 19.50% from Rs14.48 billion in the previous year. Vehicle sales increase 33% The companyâ€™s financial performance was supported by a substantial increase in vehicle sales. Indus Motor said total sales of completely knocked down (CKD) and completely built-up (CBU) units increased 33% to 45,035 vehicles during FY2025-26, compared with 33,757 units in the previous year. The company maintained an estimated 14.7% share of Pakistanâ€™s domestic automotive market. Vehicle production also increased by 37% to 45,597 units, compared with 33,251 units produced in the preceding fiscal year. Revenue climbs to Rs258.75 billion Net sales revenue rose sharply to Rs258.75 billion during FY2025-26 from Rs215.14 billion a year earlier. The company attributed the improvement in revenue and profitability primarily to higher sales volumes, lower material costs supported by a relatively favourable exchange rate, cost-reduction measures and greater localisation of parts and components. Returns on investments and bank placements also remained a significant contributor to overall profitability. Indus Motor further said other income benefited from an unrealised gain arising from the remeasurement of its long-term liability relating to the Sindh Infrastructure Development Cess, in accordance with International Financial Reporting Standards (IFRS). Final dividend of Rs47 per share proposed The board of directors of Indus Motor Company met on August 29, 2026, and recommended a final cash dividend of Rs47 per ordinary share for the year ended June 30, 2026. The proposed final dividend is in addition to interim dividends totalling Rs148 per share, taking the total proposed dividend for the year to Rs195 per share, subject to applicable approvals. The latest results highlight a recovery in automotive sales alongside continued growth in revenue and profitability, while Indus Motorâ€™s cumulative tax contribution has surpassed the Rs1 trillion milestone since the companyâ€™s establishment.

Date: 2026-09-01

Details: Written by Hamza Shahnawaz in Taxation Businesses can claim deductions for qualifying employee education, healthcare and training expenditure under Section 27 ISLAMABAD: The Federal Board of Revenue (FBR) has outlined the tax deductions available to businesses for certain employee training, education and welfare-related expenditure during Tax Year 2027. Through the Income Tax Ordinance, 2001, updated up to June 30, 2026, the FBR has explained the provisions of Section 27, which allow taxpayers to claim deductions for qualifying non-capital expenditure incurred on employee education, healthcare and training. Expenditure eligible for deduction Under Section 27, a person may claim a deduction for expenditure incurred during a tax year, other than capital expenditure, in respect of specified employee training and welfare facilities. The provision covers expenditure on several categories. Educational institutions and hospitals Businesses can claim a deduction for expenditure incurred on an educational institution or hospital established in Pakistan for the benefit of their employees and their dependants. The provision allows employers to obtain tax relief for qualifying facilities established to meet the education and healthcare needs of their workforce and their families. Industrial worker training institutes A deduction is also available for expenditure incurred on an institute established in Pakistan for the training of industrial workers. The institute must be recognised, aided or operated by the Federal Government, a Provincial Government or a Local Government. This provision supports employer spending on formal training facilities aimed at improving the skills of industrial workers. Training under an FBR-approved scheme The law also permits a deduction for expenditure incurred on the training of a person who is a citizen of Pakistan, where the training is provided under a scheme approved by the FBR for the purposes of Section 27. Businesses therefore need to ensure that training expenditure claimed under this provision relates to a scheme that satisfies the relevant FBR approval requirements. Tax incentive for workforce development The provision effectively provides businesses with a tax incentive to invest in employee welfare and skills development. By allowing eligible expenditure to be deducted when calculating taxable business income, the government seeks to encourage employers to support education, healthcare and workforce training. The measure can also help businesses develop a more skilled workforce while providing tax relief for qualifying non-capital expenditure. Records required for Tax Year 2027 Businesses claiming the deduction should ensure that their expenditure falls within the categories specified under Section 27 and maintain appropriate records to substantiate their claims. Relevant documentation should establish the nature of the expenditure, the facility or training involved, its connection with employees or eligible trainees and, where applicable, the recognition or approval required under the law. The FBRâ€™s updated Income Tax Ordinance provides the legal framework for determining whether employee education, healthcare, training and related expenditure qualifies for deduction in Tax Year 2027.

Date: 2026-09-01

Details: Written by Hamza Shahnawaz in Taxation Businesses can claim qualifying scientific research expenditure incurred in Pakistan, subject to conditions under Section 26 of the Income Tax Ordinance, 2001 ISLAMABAD: The Federal Board of Revenue (FBR) has outlined the tax benefit available to businesses for qualifying scientific research expenditure incurred in Pakistan during Tax Year 2027. Under Section 26 of the Income Tax Ordinance, 2001, taxpayers may claim a deduction for eligible scientific research expenditure where the spending is incurred wholly and exclusively for the purpose of deriving income from a business chargeable to tax. The FBRâ€™s updated Income Tax Ordinance, 2001, incorporating amendments up to June 30, 2026, sets out the conditions governing the deduction and defines the types of research and expenditure that may qualify. Who can claim the scientific research deduction? A person may claim a deduction for scientific research expenditure where the research: â€¢is undertaken in Pakistan; â€¢is incurred during the relevant tax year; â€¢is wholly and exclusively related to deriving taxable business income; and â€¢is undertaken for the purpose of developing the personâ€™s business. The provision is designed to support business-related research and development activities carried out within Pakistan. What qualifies as scientific research? The FBR defines scientific research as any activity undertaken in Pakistan in the field of natural or applied science for the development of human knowledge. The definition covers research activities intended to advance knowledge in scientific fields, provided that the expenditure and activity satisfy the requirements prescribed under the Income Tax Ordinance. What expenditure qualifies for the tax deduction? Scientific research expenditure covers spending incurred by a person on scientific research undertaken in Pakistan for the purpose of developing the personâ€™s business. The deduction may also cover a contribution made to a scientific research institution, where the institution undertakes research for the purposes of the taxpayerâ€™s business. This allows businesses to potentially claim tax relief for qualifying research carried out both directly by the business and through eligible research institutions. Expenditure excluded from the deduction Section 26 also identifies expenditure that does not qualify as scientific research expenditure. The excluded expenses include amounts incurred on: 1. acquiring depreciable assets or intangible assets; 2. acquiring immovable property; and 3. activities undertaken to determine the existence, location, extent or quality of a natural deposit. As a result, businesses cannot classify the purchase of depreciable assets, intangible assets or property as qualifying scientific research expenditure simply because those assets are used in research-related activities. Similarly, expenditure incurred to establish the existence or characteristics of natural deposits is specifically excluded from the deduction. What is a scientific research institution? The law defines a scientific research institution as an institution certified by the FBR as conducting scientific research in Pakistan. Businesses seeking a deduction for contributions made to such institutions should therefore ensure that the research organisation meets the FBRâ€™s certification requirements. Tax benefit for business research The provision gives businesses an opportunity to reduce their taxable business income through a deduction for eligible scientific research expenditure, provided all conditions under Section 26 are satisfied. The tax treatment is intended to encourage private-sector investment in research and development while promoting scientific knowledge and strengthening business capabilities in Pakistan. For Tax Year 2027, businesses should maintain adequate documentation establishing the nature of the research, its connection with the business, the expenditure incurred and, where applicable, the certification status of the scientific research institution receiving a contribution. Proper records can help taxpayers demonstrate that the expenditure meets the statutory requirements if the deduction is reviewed by the tax authorities.

Date: 2026-09-01

Details: Written by Hamza Shahnawaz in Taxation FBR sets amortisation rules for intangible assets in Tax Year 2027, including eligibility, 15-year life, disposal and deduction limits. ISLAMABAD: The Federal Board of Revenue (FBR) has outlined the rules governing amortisation deductions for intangible assets while calculating taxable business income for Tax Year 2027. The provisions are contained in Section 24 of the Income Tax Ordinance, 2001, updated up to June 30, 2026. The section allows eligible taxpayers to claim an amortisation deduction for qualifying intangible assets used to generate income from a taxable business. Conditions for claiming amortisation deduction Under Section 24, a taxpayer can claim an amortisation deduction where an intangible asset is wholly or partly used during the tax year to derive income from a business chargeable to tax and has a normal useful life of more than one year. However, no deduction is available under this provision if the entire cost of the intangible asset has already been allowed as a deduction under another provision of the Income Tax Ordinance in the tax year in which the asset was acquired. The annual amortisation deduction is generally calculated by dividing the cost of the intangible asset by its normal useful life in whole years. FBR sets 15-year period for intangibles without ascertainable life The FBR has specified that an intangible asset whose useful life cannot be ascertained will be treated as having a normal useful life of 15 years for calculating amortisation. Where an intangible is used partly to generate taxable business income and partly for another purpose, the taxpayer can claim only the fair proportional portion of the otherwise allowable deduction. Similarly, where the asset is not used throughout the tax year to generate taxable business income, the deduction is calculated proportionately according to the number of days for which it was used for that purpose. Amortisation deduction cannot exceed asset cost The FBR has clarified that total deductions claimed in the current and previous tax years in respect of an intangible asset cannot exceed its original cost. The restriction prevents taxpayers from claiming amortisation deductions exceeding the expenditure incurred to acquire or create the asset. Tax treatment when an intangible is disposed of The FBR has also prescribed specific tax treatment for intangible assets disposed of during a tax year. No amortisation deduction is allowed for the year in which the intangible asset is disposed of. If the amount received from the disposal is higher than the written-down value of the asset, the excess is treated as taxable business income. Where the disposal proceeds are lower than the written-down value, the difference is allowed as a deduction when calculating taxable business income for that year. The written-down value is generally determined by reducing the cost of the intangible by the total amortisation deductions allowed in respect of the asset. What qualifies as an intangible asset? The FBRâ€™s definition covers a broad range of intellectual property and other rights. Eligible categories include: â€¢Patents and inventions â€¢Designs and models â€¢Secret formulas and processes â€¢Copyrights â€¢Trademarks â€¢Scientific and technical knowledge â€¢Computer software â€¢Motion picture films â€¢Export quotas â€¢Franchises and licences â€¢Intellectual property â€¢Contractual rights â€¢Expenditure providing an advantage or benefit for more than one year However, expenditure incurred to acquire a depreciable asset or unimproved land does not fall within the definition of an intangible asset. The provision also excludes self-generated goodwill and adjustments arising from accounting treatment in the prescribed manner. Cost includes acquisition and development expenditure For tax purposes, the cost of an intangible asset includes expenditure incurred to acquire or create it, as well as expenditure on its improvement or renewal. An intangible asset that becomes available for use on a particular day is treated as being used on that day, including where the day is a non-working day. The Section 24 provisions provide businesses with a framework for recovering the cost of qualifying long-term intangible assets through amortisation deductions. The rules also ensure that deductions remain linked to the assetâ€™s use in generating taxable business income and that total amortisation claims do not exceed the original cost of the intangible asset.

Date: 2026-09-01

Details: Published September 1, 2026 Updated about 2 hours ago By Reuters SHANGHAI: China stocks closed higher on Monday as a late rally in tech shares offset concerns over weak economic data and a slump in property stocks following Beijingâ€™s policy overhaul, while Hong Kong stocks ended flat. The blue-chip CSI300 Index recouped early losses to end 0.4 percent higher, while the Shanghai Composite Index rose nearly 1 percent. In Hong Kong, the Hang Seng Index edged 0.1 percent lower. Chinese markets were lifted in the afternoon by technology shares. The CSI Cloud Computing 50 Index gained 4 percent, the CSI Big Data Industry Index advanced 3.5 percent, the CSI Integrated Circuits Index climbed 3 percent and the CSI Artificial Intelligence Index strengthened 2.8 percent. A rally in technology shares helped ease economic concerns after official data showed Chinaâ€™s factory activity improved in August on stronger demand, although it remained in contraction for a second consecutive month. Meanwhile, services and construction activity remained weak, underscoring deepening imbalances in the economy. UBS Securities Chief China Economist Yu Song expected a round of additional support later in the year, citing â€œmore obvious risks of not reaching the annual growth targetâ€. Market sentiment was also initially dampened by a selloff in property shares after China on Friday rolled out measures to reduce developersâ€™ dependence on presale funds. â€œThe effort to shrink the presales system will lead to a decline in housing starts,â€ Zhang Xiaoxi, analyst at Gavekal Dragonomics said in a note, predicting that â€œmore private-sector developers will exit the marketâ€ as banks favour state-owned developers. An index, which tracked China-listed real estate firms, dropped 3 percent, while the Hang Seng Mainland Properties Index tumbled 6 percent. Chinaâ€™s gold-related stocks fell sharply after US Federal Reserve Chairman Kevin Warshâ€™s hawkish remarks on Friday triggered a selloff in the yellow metal. But Chinese banks climbed after the countryâ€™s largest banks reported their strongest first-half profit since the height of the property crisis.

Date: 2026-09-01

Details: Published September 1, 2026 Updated about 2 hours ago By Reuters FRANKFURT: European shares fell on Monday as fresh US-Iran military strikes drove oil prices and bond yields higher, though the benchmark STOXX 600 marked its fifth consecutive monthly gain. The pan-European STOXX 600 was down 0.6 percent at 651.1 points on the day, with trading volumes subdued as London markets were closed for a bank holiday. Germanyâ€™s DAX dropped 1.2 percent, the steepest decline among major regional indexes, after data showed German inflation accelerated in August as the Iran conflict lifted energy prices. However, the increase was smaller than expected and core inflation remained stable. Investors have largely priced in a September interest rate increase from the European Central Bank. â€œThe stage looks increasingly set for another rate hike at next weekâ€™s ECB meeting,â€ Carsten Brzeski, global head of macro at ING, said in a note. â€œThe second rate hike this year would also fall into the category of â€˜insurance rate hikeâ€™, or maybe more to the ECBâ€™s liking: a rate hike to strengthen the ECBâ€™s credibility and to preempt any possible indirect or even second-round effects from the current energy price shock.â€ Euro zone inflation figures and US payrolls data will be in focus later this week. Germanyâ€™s policy-sensitive two-year government bond yield hit its highest level since July 2024, taking cues from US Treasuries after Federal Reserve Chair Kevin Warsh on Friday signalled interest rates may need to rise. Energy stocks firmed, tracking a more than 2 percent jump in Brent crude, which traded around USD90.5 a barrel. TotalEnergies , Orlen and OMV rose between 1.5 percent and 3.5 percent. US forces struck two missile launchers on Iranâ€™s Larak Island in the Strait of Hormuz on Sunday, the first known US military action against Iran since late July, prompting Tehran to launch attacks on two US air bases in Jordan, Iranian media reported.

Date: 2026-09-01

Details: Published September 1, 2026 Updated about 2 hours ago By Reuters NEW YORK: The main US stock indexes slipped on Monday after military clashes between the United States and Iran drove up oil prices, stoking inflation fears after Fed Chair Kevin Warshâ€™s hawkish remarks in his maiden Jackson Hole address the previous week. The losses could set the tone for September, typically a weak month for equities, and are likely to up the ante at the US Federal Reserveâ€™s meeting next month. Traders see more than a 60 percent chance of a rate hike at the Fedâ€™s September meeting, according to CMEâ€™s FedWatch, a sharp increase from 41.4 percent a week ago, after Warsh said policymakers may need to increase borrowing costs if inflation does not ease to the central bankâ€™s 2 percent target. â€œAbsent a material downside surprise, the onus is now on Warsh to deliver a September hike. Otherwise, he risks undermining some of the credibility he gained on Friday,â€ analysts at BofA Global Research said in a note. Warshâ€™s comments, delivered on Friday at the Fedâ€™s Jackson Hole symposium in Wyoming, followed mixed data in recent weeks. A consumer inflation report this month showed price pressures were mild in July, but the Personal Consumption Expenditures reading, the Fedâ€™s preferred gauge, came in hotter than expected. The ambiguity could raise the stakes for the monthly US employment report, due on September 4. Recent data did not indicate that â€œunderlying trends have meaningfully improved,â€ Warsh said on Friday. At 11:24 a.m. ET, the Dow Jones Industrial Average fell 346.30 points, or 0.65 percent, to 53,210.80, the S&P 500 lost 35.66 points, or 0.46 percent, to 7,676.10, and the Nasdaq Composite shed 88.98 points, or 0.34 percent, to 26,312.74. Still, the benchmark S&P 500 and the tech-heavy Nasdaq were on track to snap two consecutive months of decline, while the Dow was headed for a fifth consecutive monthly gain. â€œThe dynamism of the US economy and the corporate sector is incredible. The US exceptionalism argument is pretty alive and well,â€ said Thomas Kikis, head of markets, US and Americas, at Standard Chartered. Military clashes between the US and Iran resumed in the Middle East, where disruption in the Strait of Hormuz has impeded oil shipments. Energy stocks were up 0.97 percent after a 1.04 percent jump in Brent crude prices, while all other S&P 500 sectors were under pressure. Utilities fell 1.19 percent after an amendment to a Senate bill in California did little to alter the exposure of grid operators in the state to wildfire liabilities. PG&E plunged 19.4 percent and looked set for its worst day in more than six years, if losses hold.

Date: 2026-08-31

Details: FBRâ€™s RTO-II Karachi seizes Rs200m in machinery and tobacco from a Malir factory accused of illegal cigarette manufacturing. KARACHI: The Federal Board of Revenueâ€™s (FBR) Regional Tax Office-II (RTO-II) Karachi has sealed an alleged illegal cigarette manufacturing facility in Malir and confiscated plant, machinery and tobacco valued at approximately Rs200 million. The operation is estimated to have prevented an annual revenue loss of around Rs1.2 billion to the national exchequer, according to an FBR press release issued on Sunday. The raid was conducted by the Inland Revenue Enforcement Squad of RTO-II Karachi and the Inland Revenue Enforcement Network (IREN) as part of intensified enforcement against illegal cigarette manufacturing, illicit tobacco trade and tax evasion. The action followed directions from the Prime Minister, Chairman FBR and Director General Intelligence and Investigation/Chief Coordinator IREN. Machinery and tobacco confiscated During the raid, the enforcement team sealed the factory premises and confiscated the installed plant and machinery, along with raw and finished stock. The seized equipment included cigarette-making machines, packing machines, token machines, filter machines, heavy-duty generators and other related machinery, with an estimated value of Rs200 million. Around 700 kilograms of raw tobacco was also recovered from the premises. Factory had capacity to produce 200 million cigarettes annually A preliminary assessment found that the machinery installed at the facility had an estimated production capacity of 700,000 cigarette sticks per day. This translates into an estimated annual production capacity of around 200 million cigarette sticks. The FBR said the alleged illegal manufacturing activity was consequently causing an estimated Rs1.2 billion annual loss to the national exchequer. The enforcement team sealed the facility and confiscated the plant, machinery and stock. Criminal proceedings initiated Following the operation, criminal proceedings were initiated against the persons allegedly involved in the illegal manufacturing activity. An FIR was registered before the Special Judge (Customs & Taxation), Karachi. The confiscated plant and machinery were subsequently dismantled and shifted from the factory premises to the official premises of RTO-II Karachi. The raw and finished stock was also transferred in accordance with the prescribed legal procedure. Investigation underway The enforcement operation was conducted by a team headed by Baqir Ali, DCIR, and coordinated by Dr Aslam Marri, Commissioner Inland Revenue, RTO-II Karachi and Regional Coordinator IREN Sindh and Balochistan. The operation was carried out under the supervision of Zafar Rafique, Chief Commissioner, RTO-II Karachi. The criminal investigation into the alleged illegal manufacturing operation and the individuals involved is currently underway. RTO-II Karachi reaffirmed its commitment to taking strict and sustained enforcement action against illegal cigarette manufacturing, illicit tobacco trade and tax evasion. The tax authority said such measures are aimed at safeguarding government revenue, protecting compliant businesses and ensuring adherence to applicable tax laws.

Date: 2026-08-31

Details: Enhanced scrutiny and laboratory testing target alleged misuse of tax and customs exemptions under the Export Facilitation Scheme KARACHI: Pakistan Customs has stepped up enforcement against the alleged misuse of exemptions under the Export Facilitation Scheme (EFS) through misdeclaration of imported fabric, an initiative welcomed by the All Pakistan Textile Mills Association (APTMA). In a press release, APTMA appreciated the action taken by the Federal Board of Revenue (FBR) and Pakistan Customs to address concerns surrounding the import of greige fabric under the EFS. The association said greige fabric had been excluded from the scheme under SRO 1435(I)/2025, but raised concerns that some consignments were allegedly being imported under incorrect descriptions to obtain exemptions from customs duty and sales tax. Customs intensifies scrutiny of fabric consignments Pakistan Customs field formations are subjecting relevant consignments to enhanced scrutiny to establish the correct description and nature of imported fabric. Where necessary, physical examination of consignments is being supplemented by laboratory testing of samples to determine the actual composition and description of the goods. The process is aimed at identifying potential violations of applicable laws and procedures and preventing traders from obtaining concessions to which they are not entitled. APTMA backs enforcement action APTMA said misdeclaration of imported fabric could lead to a loss of legitimate government revenue while creating an unfair competitive disadvantage for domestic manufacturers that comply with the law. The association also acknowledged the role of Customs field formations in examining consignments and taking action where misuse of the EFS is identified. APTMA called for continued vigilance to ensure that the Export Facilitation Scheme is used strictly for its intended purpose and does not become a channel for obtaining unauthorised tax and customs concessions. Customs vows to protect compliant businesses Pakistan Customs said trade facilitation and effective enforcement are complementary priorities, stressing that facilitation measures are intended to support legitimate and compliant trade. The department said misuse of exemptions, concessions or regulatory procedures undermines the integrity of the trade system and must be addressed in accordance with the law. Pakistan Customs said it would continue strengthening controls against misdeclaration and other forms of abuse while safeguarding government revenue and protecting businesses that comply with regulations. The department further reaffirmed its commitment to ensuring that trade facilitation schemes operate transparently and in line with their intended objectives. The latest enforcement measures highlight the authoritiesâ€™ focus on preventing abuse of the EFS while maintaining facilities for legitimate exporters and manufacturers.

Date: 2026-08-31

Details: Tax relief applies to qualifying new depreciable assets placed into business use in Pakistan for the first time ISLAMABAD: The Federal Board of Revenue (FBR) has set out the conditions and categories of assets eligible for an initial allowance under the Income Tax Ordinance, 2001 for Tax Year 2027. According to the Income Tax Ordinance, 2001, updated by the FBR up to June 30, 2026, Section 23 allows taxpayers to claim an initial allowance when qualifying depreciable assets are placed into service in Pakistan for the first time. Initial allowance available on eligible assets Under Section 23, a taxpayer who places an eligible depreciable asset into service in Pakistan for the first time during a tax year can claim an initial allowance. The asset must be used by the taxpayer for business purposes for the first time. Alternatively, the allowance may be claimed in the tax year in which commercial production begins, whichever is later. The initial allowance is calculated by applying the rate specified in Part II of the Third Schedule of the Income Tax Ordinance to the cost of the eligible asset. The cost of an eligible depreciable asset is determined in accordance with Section 76 of the Ordinance. Special rules for financial institutions The FBR has prescribed separate treatment for leasing companies, investment banks, modarabas, scheduled banks and development finance institutions. Where these institutions own assets and lease them to another person, the initial allowance relating to those assets can only be deducted against lease rental income earned from the relevant assets. Assets excluded from initial allowance The FBR has specified several categories of depreciable assets that do not qualify for the initial allowance. These include: â€¢Road transport vehicles, unless they are used for hire; â€¢Furniture and fittings; â€¢Plant or machinery previously used in Pakistan; â€¢Plant or machinery for which another provision of the Income Tax Ordinance has already allowed a deduction for the assetâ€™s entire cost in the tax year of acquisition; and â€¢Immovable property or structural improvements to immovable property. The exclusion of previously used plant and machinery means that the initial allowance is primarily targeted at qualifying new assets being introduced into business operations in Pakistan. Initial allowance supports business investment The initial allowance provides businesses with an upfront tax deduction on qualifying capital assets in addition to the normal depreciation mechanism, subject to the conditions prescribed under the Income Tax Ordinance. By limiting eligibility to specified depreciable assets placed into business use for the first time, the provisions are intended to provide tax relief for qualifying investment in productive business assets while preventing claims on used equipment, furniture, non-hire vehicles and excluded property. Businesses seeking to claim the allowance for Tax Year 2027 will therefore need to ensure that their assets meet the eligibility requirements and that the relevant conditions concerning first-time business use or commencement of commercial production have been fulfilled.

Date: 2026-08-31

Details: Businesses face detailed conditions on eligible assets, depreciation rates, disposal gains and leased property ISLAMABAD: The Federal Board of Revenue (FBR) has laid down detailed conditions for claiming depreciation deductions against business income for Tax Year 2027, covering eligible assets, calculation methods, partial business use, disposal of assets and specific restrictions. The provisions are contained in Section 22 of the Income Tax Ordinance, 2001, updated by the FBR up to June 30, 2026. Under the rules, taxpayers can claim depreciation on depreciable assets used in a business during the relevant tax year. However, depreciation cannot be claimed on additions to capital assets where tax required to be deducted under Sections 152 or 153 has not been deducted and deposited with the government. Such amounts cannot be included in the cost of assets for calculating tax depreciation. Depreciation is generally calculated by applying the relevant rate prescribed in Part I of the Third Schedule to the written-down value of the asset at the beginning of the tax year. Depreciation limited for partial business use Where an asset is used partly to earn taxable business income and partly for another purpose, the depreciation deduction is restricted to the proportion attributable to its use in generating taxable business income. For such assets, the written-down value is calculated on the basis that the asset was used solely to derive taxable business income. For an asset acquired during the tax year, the written-down value is determined by reducing its cost by any initial allowance available under Section 23. For assets acquired in earlier years, the written-down value represents the original cost less total depreciation deductions, including any initial allowance, already claimed in previous tax years. The FBR has also clarified that depreciation is considered to have been allowed during a period in which a businessâ€™s income is exempt if its buildings, furniture, plant or machinery are used for business purposes during that period. Once the exemption period ends, the written-down value is determined after accounting for the relevant depreciation and initial allowances. Total depreciation cannot exceed asset cost The total depreciation and initial allowance deductions claimed throughout the ownership period cannot exceed the original cost of the asset. The rules also prescribe treatment for depreciable assets that are disposed of. No depreciation deduction is allowed for the tax year in which an asset is disposed of. If the sale consideration exceeds the assetâ€™s written-down value, the excess is treated as taxable business income. Where the consideration is lower than the written-down value, the difference is allowed as a deduction against business income for that year. Special treatment for leased assets Specific rules apply to depreciation claimed by leasing companies, investment banks, modarabas, scheduled banks and development finance institutions. Depreciation relating to assets owned by these institutions and leased to another person can only be deducted against the lease rental income generated from those assets. Such leased assets are treated as being used in the business of the relevant leasing company or financial institution. Rs7.5m depreciation limit for certain vehicles For a passenger transport vehicle that is not used for hire, the depreciable cost is capped at Rs7.5 million. The cost of immovable property or structural improvements to immovable property does not include the cost of the underlying land. The rules further provide that where consideration received from disposing of immovable property exceeds its cost, the consideration received is treated as the propertyâ€™s cost for depreciation purposes. Tax treatment of assets transferred abroad Where a depreciable asset previously used in Pakistan is exported or transferred outside the country, the taxpayer is treated as having disposed of the asset at the time of export or transfer. For this purpose, the consideration received is deemed to be equal to the cost of the asset. What qualifies as a depreciable asset? The FBR defines a depreciable asset as tangible movable or immovable property, other than unimproved land, or a structural improvement to immovable property that: â€¢has a normal useful life of more than one year; â€¢is expected to lose value through normal wear and tear or obsolescence; and â€¢is wholly or partly used to derive taxable business income. An asset is excluded if another provision of the Income Tax Ordinance already allows a deduction for its entire cost in the tax year in which it was acquired or the improvement was made. Structural improvements covered The definition of structural improvement covers a broad range of infrastructure and property improvements, including buildings, roads, driveways, car parks, railway lines, pipelines, bridges, tunnels, airport runways, canals, docks, wharves, retaining walls, fences, power lines, water and sewerage pipes, drainage systems, landscaping and dams. The FBR has also prescribed a special rule for assets jointly owned by a taxpayer and an Islamic financial institution licensed by the State Bank of Pakistan or the Securities and Exchange Commission of Pakistan under Musharika or diminishing Musharika financing. Such an asset is treated as wholly owned by the taxpayer for the purposes of the depreciation provisions. The detailed rules under Section 22 set out the circumstances in which businesses can claim depreciation deductions while ensuring that capital assets, disposal proceeds and tax compliance requirements are properly accounted for when determining taxable business income for Tax Year 2027.

Date: 2026-08-31

Details: FBR sets out restrictions on business expense deductions, including cash payments, salary, commissions, penalties and digital compliance for 2027. ISLAMABAD: The Federal Board of Revenue (FBR) has outlined a range of expenses and payments that taxpayers cannot claim as deductions when calculating income from business for Tax Year 2027. The provisions are contained in the Income Tax Ordinance, 2001, updated up to June 30, 2026, with Section 21 specifying expenditures that are not allowable as deductions against business income. Taxes on business profits Under the rules, taxpayers cannot deduct any cess, rate or tax paid or payable in Pakistan or another country where the levy is imposed on business profits or gains or calculated with reference to those profits. Tax deducted under the relevant provisions of the Income Tax Ordinance from an amount derived by a taxpayer is also not allowable as a business deduction. An expenditure from which a taxpayer is required to deduct or collect tax is generally disallowed unless the taxpayer has complied with the applicable tax deduction and payment requirements. However, disallowance relating to purchases of raw materials and finished goods under this provision cannot exceed 20% of such purchases. Tax recovered under Sections 161 or 162 is treated as tax paid. Commission and entertainment expenses The FBR has also placed restrictions on deductions for certain commission payments. Commission paid or payable on supplies of products listed in the Third Schedule of the Sales Tax Act, 1990, is not deductible where it exceeds 0.2% of the gross amount of supplies, unless the recipient of the commission appears on the Active Taxpayer List. Entertainment expenditure exceeding prescribed limits or incurred in violation of prescribed conditions is also not allowable. Contributions to funds Contributions to funds that are not recognised provident funds, approved pension funds, approved superannuation funds or approved gratuity funds cannot be deducted. The rules further disallow 50% of contributions made to an approved gratuity fund, approved pension fund or approved superannuation fund. Contributions to provident or other employee-benefit funds are also subject to conditions relating to tax deduction from payments made by the fund to employees. Fines, penalties and personal expenses The FBR has maintained that fines and penalties paid or payable for violating any law, rule or regulation are not deductible. Similarly, personal expenditure incurred by a taxpayer cannot be claimed as a business expense. Amounts transferred to a reserve fund or capitalised in any manner are also excluded from deductible business expenditure. Profit on debt, brokerage, commission, salary or other remuneration paid by an association of persons to one of its members is likewise not allowable as a deduction. Restrictions on cash transactions The tax rules impose restrictions on business transactions involving payments outside the banking channel. Expenditure under a single account head exceeding Rs250,000 in aggregate generally must be paid through a crossed cheque, crossed bank draft, crossed pay order or another crossed banking instrument showing transfer from the taxpayerâ€™s business bank account. Online transfers from the payerâ€™s business account to the payeeâ€™s business account and credit-card payments are treated as banking-channel transactions, provided they can be verified through the respective bank statements. The restriction does not apply to individual expenditures of up to Rs25,000, as well as utility bills, freight charges, travel fares, postage and payments of taxes, duties, fees, fines and other statutory obligations. For companies, a separate provision requires certain transactions exceeding Rs250,000 under a single account head to be made through digital means from the business bank account notified to the Commissioner under Section 114A. The provision will take effect from a date to be notified by the FBR. Salary payments and capital expenditure Salary exceeding Rs32,000 per month paid to an individual is not deductible if it is not paid through a crossed cheque, direct transfer to the employeeâ€™s bank account or approved digital means. The FBR also disallows expenditure of a capital nature, except where specifically provided for under the relevant provisions of the Income Tax Ordinance. For pharmaceutical manufacturers, expenditure on sales promotion, advertising and publicity exceeding 10% of turnover is not deductible. Utility expenditure exceeding prescribed limits or incurred in violation of prescribed conditions can also be disallowed. Purchases from non-NTN holders The rules provide for a 10% disallowance of claimed expenditure attributable to purchases made from persons who do not hold a National Tax Number (NTN). For purchases of agricultural produce, the provision applies only to purchases made from middlemen. The FBR may exempt specific persons or classes of persons from this restriction through notification in the official Gazette, subject to specified conditions. Electronic invoicing and payment restrictions The FBR has also introduced a 3% disallowance of claimed expenditure for a person who fails to install an electronic resource or act as an integrated enterprise where required by law, subject to the prescribed method and procedure. In addition, 50% of expenditure claimed in respect of sales may be disallowed where a taxpayer receives more than Rs200,000 against a single invoice through means other than a banking channel or digital payment. The provision applies to invoices covering one or more transactions involving the supply of goods or provision of services. The restrictions outlined under Section 21 form part of the FBRâ€™s broader tax-compliance framework for Tax Year 2027, aimed at promoting documented transactions, banking-channel payments, digital compliance and proper withholding-tax practices. RTO HYDERABAD INTERCEPTS POULTRY FEED OVER MISSING DIGITAL INVOICE Tax authorities intercept Rs2.7m poultry feed shipment after finding it was transported without a valid FBR digital sales tax invoice. HYDERABAD: The Regional Tax Office (RTO) Hyderabad has intercepted a commercial consignment of poultry feed being transported without a valid digital sales tax invoice, as part of its ongoing enforcement drive to strengthen supply-chain documentation under the Sales Tax Act, 1990. According to the RTO, its Inland Revenue enforcement staff intercepted the goods transport vehicle at around 11:45pm on August 28, 2026, while it was transporting poultry feed from a manufacturerâ€™s premises to Naushahro Feroze district. The interception was carried out on the basis of prior information, the tax office said. Shipment carried only delivery challan and bilty The vehicle, hired through a goods transport company, was carrying 50kg bags of Broiler Finisher (HD) poultry feed manufactured by a registered feed producer. During inspection of the accompanying documents, the enforcement team found that the consignment was travelling with only a delivery challan and transporterâ€™s bilty. No digital sales tax invoice had been issued through the Federal Board of Revenue (FBR) system when the goods left the supplierâ€™s premises, despite the requirements of the Sales Tax Act and the digital invoicing regime. The RTO subsequently verified the transaction through FBRâ€™s electronic records and found that the relevant invoice had been uploaded to the system only at 11:10am on August 29, several hours after the consignment had departed and after the vehicle had been intercepted. Invoice declared Rs2.7m supply The subsequently generated invoice showed a poultry feed supply worth Rs2.706 million, with Rs270,600 in sales tax charged at the reduced rate of 10% applicable to poultry feed. The case highlights the tax authoritiesâ€™ increasing focus on ensuring that taxable goods are properly documented before entering the supply chain. RTO urges businesses to comply with digital invoicing rules RTO Hyderabad urged registered persons, transporters and buyers to ensure that no consignment of taxable goods leaves a supplierâ€™s premises without a valid digital sales tax invoice issued through the FBR system. The tax office also advised businesses to ensure that the quantities recorded on the digital invoice, delivery challan and transporterâ€™s bilty accurately correspond with the goods actually loaded onto the vehicle. The enforcement action forms part of the tax departmentâ€™s efforts to improve documentation, prevent the irregular movement of taxable goods and strengthen compliance with Pakistanâ€™s digital invoicing requirements.

Date: 2026-08-31

Details: Published August 31, 2026 Updated about 2 hours ago NEW YORK: A fresh look at the US labor market in the coming week along with quarterly results from semiconductor company Broadcom will test a market rally that has lifted stocks near record highs. The S&P 500 posted a weekly gain, putting the benchmark index slightly more than 1 percent away from its August 13 all-time high. A blowout quarterly report on Wednesday from AI bellwether and market behemoth Nvidia boosted sentiment for stocks, which had been dented earlier in the month by rising Treasury yields. Investors were focused on the monthly US employment report, due on September 4, and on whether the jobs data would offer hints about the US Federal Reserveâ€™s plans for interest rates in coming months. â€œAs weâ€™re starting to get closer to that September (Fed) meeting, each data print is going to be under the microscope as it may inform what the Fed ultimately does,â€ said Michael Reynolds, vice president of investment strategy at Glenmede. Following a speech by new Fed Chair Kevin Warsh on Friday, investors increased bets that the central bank would hike rates at its next meeting in September, as it grapples with above-target inflation. With August coming to a close, the S&P 500 was last up more than 12 percent for the year. Strong corporate profit growth driven by massive spending on the AI infrastructure buildout is fueling the nearly four-year-old bull run in US equities. Markets have been relatively calm as summer ends in the US The Cboe Volatility Index hovered near its low point for the year, and daily market trading volume this week was well below its 2026 average. Several upcoming events could shake assets, including the jobs data. Employment for August was expected to have climbed by 58,000 jobs, with the unemployment rate at 4.1 percent, according to a Reuters poll as of Friday. The July report showed a surprise labor-market weakening, with employment declining by 23,000 jobs. â€œThe last jobs report gave the market and investors a little bit of pause,â€ said Amanda Agati, chief investment officer of PNC Asset Management Group. However, Agati said she doubted there was a breakdown in the labor market, adding she would be looking for â€œeither confirmation of that trend that we saw in the last report, or maybe a bounce back to prior months.â€ The jobs data could also indicate whether the Fed is likely to raise interest rates. Data this week showed inflation continued to run well above the US central bankâ€™s 2 percent annual target. Rate hikes pose several challenges for equity performance, including by raising borrowing costs for consumers and companies. Fed funds futures late on Friday suggested a 57 percent chance of a hike at the next meeting in September, and investors were wary that a hot jobs report showing a big jump in employment and sharp wage growth could increase such bets. â€œWhat the stock market wants to see is a continued number that gives the Fed the ability to remain on hold,â€ said Matt Stucky, chief portfolio manager, equities, at Northwestern Mutual Wealth Management. Other economic data in the coming week included reports on manufacturing and services sector activity. The prior monthly reading from the Institute for Supply Management showed US manufacturing activity increased to the highest level in more than four years. â€œContinuing that momentum into September we think is something thatâ€™s really noteworthy to watch,â€ Stucky said. Wednesdayâ€™s earnings report from Broadcom, whose market value was last about USD1.7 trillion, will also be in focus, after rival semiconductor company Nvidiaâ€™s results lifted equity indexes. Nvidia forecast a whopping 70 percent jump in revenue for its next fiscal year. It was a rare disclosure for the AI bellwether, which typically does not issue such projections. â€œWeâ€™re just wondering whether or not Broadcom offers the same type of visibility,â€ Stucky said. Other reports are due next week from tech companies Dell Technologies and Palo Alto Networks. With the vast majority of companies having already reported, S&P 500 second-quarter earnings are on pace to have climbed 34.5 percent from a year earlier on an adjusted basis, according to LSEG IBES data. The reporting season has demonstrated â€œreally robust core earnings power,â€ Reynolds said.

Date: 2026-08-31

Details: Published August 31, 2026 Updated about 2 hours ago BENGALURU: Most Gulf stock markets closed lower on Sunday as investors turned cautious after US Federal Reserve Chair Kevin Warsh reiterated the central bankâ€™s commitment to bringing inflation back to target, boosting expectations of another interest-rate increase. Warsh said at the Fedâ€™s annual economic symposium in Jackson Hole that policymakers would â€œhave work to doâ€ if they were not confident that underlying inflation was returning to the central bankâ€™s 2 percent target. He also noted that financial conditions did not appear restrictive. Following his remarks, market-implied odds of a rate increase at the Fedâ€™s September meeting rose to 55.7 percent from 35.4 percent on Thursday, according to CME Groupâ€™s FedWatch tool. Gulf markets are particularly sensitive to changes in US monetary-policy expectations since most regional currencies are pegged to the dollar. Saudi Arabiaâ€™s benchmark index fell 0.7 percent for a second consecutive session, with most constituents ending in negative territory. Saudi Arabian Mining declined 3.3 percent, while Saudi National Bank, the kingdomâ€™s largest lender by assets, lost 1.2 percent. â€œThe Saudi market could remain vulnerable to further downside if investors continue taking profits after several sessions of gains,â€ said Hani Abuagla, senior market analyst at XTB MENA. Qatarâ€™s benchmark index edged 0.1 percent lower, weighed down by declines in financial and communications shares. Doha Bank dropped 5.1 percent, while The Commercial Bank fell 2.5 percent. In contrast, QatarEnergy-linked Industries Qatar gained 0.6 percent, and Gulf International Services rose 3.9 percent. QatarEnergy sold at least 7 million barrels of various Qatari crude grades through a tender this week for October loading, several trade sources said on Friday. â€œLooking ahead, GCC markets are likely to remain sensitive to shipping developments in the Strait of Hormuz and any diplomatic progress,â€ Abuagla said. â€œStrong domestic fundamentals may help limit downside risks, though investor caution could persist as global bond yields rose following Warshâ€™s remarks, with attention now turning to the Fedâ€™s next meeting.â€ Outside the Gulf, Egyptâ€™s blue-chip index slipped 0.3 percent, with most shares trading lower. Commercial International Bank fell 0.8 percent, while Talaat Moustafa Group lost 1.3 percent. Abu Qir Fertilizers and Chemical Industries, however, rose 4.8 percent after the company said it had expanded ammonia production capacity and reduced natural-gas consumption.

Date: 2026-08-31

Details: Published August 31, 2026 Updated a day ago By Recorder Report ISLAMABAD: The Federal Board of Revenue (FBR) has not devised any mechanism to refund taxes collected under Section 7E (deemed income tax on immovable property) and Super Tax under Section 4C (tax on high earnersâ€™ capital gain), said Waheed Shahzad Butt, Chairman LTBA Public Interest Litigation Committee, who is seeking a clear, policy-level system to enable taxpayers to reclaim amounts already paid or recovered. More than three months have elapsed since Chairman LTBA-PILC wrote to FBR Chairman, routed through FBR Members, seeking a notified refund procedure for both levies, yet the Board has neither issued any guidance nor prescribed an application format or forum for filing such claims, he said. The demand follows rulings of the Federal Constitutional Court (FCC), which struck down Section 7E in its entirety as unconstitutional and void from inception, setting aside all notices and proceedings initiated under the provision introduced through the Finance Act 2022. The levy had targeted properties valued above Rs25 million at five percent of FBR-assessed fair market value. On Super Tax, the FCC upheld the provisionâ€™s constitutional validity but excluded certain exempt capital gains from its scope, effectively meaning the tax cannot be charged on the sale of immovable property held beyond the prescribed holding period, inherited property, or otherwise exempt income, Waheed explained. The continued silence of FBR on a refund route, despite binding constitutional pronouncements, has placed taxpayers in an untenable legal and financial position, Waheed said, noting that the Section 7E refund universe is potentially far wider given that the provision was struck down altogether, while Super Tax refunds would apply wherever the tax was charged on already-exempt income. LTBA-PILC is seeking a clear, policy-level system mechanism for taxpayers to reclaim amounts paid or recovered. â€œSame may be allowed as adjustment against tax liability for the tax year 2026,â€ Waheed added. He said this interim arrangement could be operationalized through the annual return for Tax Year 2026, with field formations directed to accept and process such adjustments uniformly across all tax jurisdictions, rather than leaving the matter to the discretion of individual Commissioners or Regional Tax Offices. Waheed reiterated his call upon the Board to communicate, without further delay, the procedure through which taxpayers may claim refunds or adjustments of amounts recovered under the two contested provisions, and to ensure consistent treatment of such claims nationwide. He cautioned that prolonged inaction exposes FBR to further litigation, including complaints before the FTO, as affected taxpayers seek redress for sums held to be unlawfully retained despite clear constitutional court findings against their collection. Copyright Business Recorder, 2026

Date: 2026-08-29

Details: Written by Hamza Shahnawaz in Taxation New FBR valuation tables cover Quettaâ€™s urban areas, cantonment localities and DHA, with rates prescribed by location and property type. ISLAMABAD: The Federal Board of Revenue (FBR) has revised the fair market values of immovable properties across Quetta, covering urban areas, cantonment localities and the Defence Housing Authority (DHA) Quetta. The FBR issued S.R.O. 1444(I)/2026 under sub-section (4) of Section 68 of the Income Tax Ordinance, 2001, replacing Notification No. S.R.O. 1723(I)/2024 dated October 29, 2024. The revised valuation tables prescribe separate rates for specified locations and property categories across Quetta, with values generally determined on a per-square-foot basis. The notification covers front and commercial areas, non-commercial areas, adjoining streets, plazas, shops and offices, among other property categories. Revised rates cover Quetta urban areas The first valuation table covers Patwar Circle Halqa Urban-I, Tehsil City, District Quetta, including numerous wards, roads and commercial locations. For instance, the schedule sets the fair market value at Rs35,000 per square foot for the front/commercial area of Qandhari Bazaar from Masjid Road Cross to Meezan Chowk, while adjoining streets have been assigned a rate of Rs7,000 per square foot. Other prominent locations have also been assigned separate valuation rates, depending on the relevant road, ward, locality and nature of the property. The revised tables further cover urban locations around Qasi Road, Kach Road, Prince Road and Me-conghy Road, among other major roads and localities in Quetta. Separate valuations for other localities A separate valuation table has been provided for Patwar Circle Halqa Urban-II, Tehsil City, District Quetta, covering various roads and localities. The notification also includes other Patwar Circles, including Sadar-II, with separate rates prescribed for mouzas, mahals and specified localities. The valuation schedule extends beyond central urban areas to various rural and semi-urban localities within Quetta district. Rates vary according to the location and category of the property. Cantonment and DHA Quetta included The revised notification also covers Quetta Cantonment, with a dedicated table listing locations and survey numbers within the cantonment areas. A separate table has been prescribed for Defence Housing Authority (DHA) Quetta, covering residential and commercial properties and different plot categories. For DHA Quetta, the FBR has distinguished between the Early Bird category and other categories or schemes. The schedule provides separate per-square-foot valuation rates for residential and commercial properties, including 4-marla, 8-marla and 1-kanal categories. Rates applicable under Income Tax Ordinance The revised valuation schedule is intended to provide updated fair market values for immovable properties in Quetta for purposes of the applicable provisions of the Income Tax Ordinance, 2001. The detailed rates have been prescribed on a locality-wise basis in the 22-page notification, covering a wide range of urban, cantonment and DHA areas. The revised schedule replaces the valuation framework notified by the FBR in October 2024 and establishes updated benchmark values for the covered properties. Disclaimer: The rates cited above are indicative and based on selected entries from the notification. For verified and complete valuation rates, taxpayers and property owners should refer to the original S.R.O. 1444(I)/2026 available on the official FBR website.

Date: 2026-08-29

Details: Written by Hamza Shahnawaz in Taxation New powers will support Customs anti-smuggling operations within 50 kilometres of international borders, subject to specified restrictions. ISLAMABAD: The Federal Board of Revenue (FBR) has authorised Pakistan Rangers and Frontier Corps personnel to exercise specified functions and powers of Customs officers within their respective jurisdictions to strengthen anti-smuggling operations along Pakistanâ€™s international borders. The FBR issued SRO 1435/2026 dated August 27, 2026, under sub-section (1) of Section 6 of the Customs Act, 1969, superseding Notification No. S.R.O. 901(I)/2023 dated July 7, 2023. Under the notification, the assigned customs functions will be exercised by Pakistan Rangers and Frontier Corps Khyber Pakhtunkhwa (North and South) within their respective jurisdictions, subject to specified conditions. The delegated powers will apply within 50 kilometres of international borders. However, the jurisdiction excludes city municipal limits, Customs areas, Customs stations, ports, Border Customs stations, international airports and bonded warehouses. The Rangers and Frontier Corps personnel will not be authorised to check the baggage or goods of bona fide passengers that have already been cleared from a Customs area. The FBR has directed the personnel to exercise due care while performing their assigned functions and ensure that legitimate trade, imports and exports, and the general public are not unnecessarily obstructed. Powers to be exercised in aid of Customs The notification clarifies that the delegated powers are intended to assist Pakistan Customs and will not replace or exclude the authority of Customs officers. Rangers and Frontier Corps personnel will provide assistance to Customs officers in performing their functions wherever required. Any goods seized on suspicion of being smuggled or intended for smuggling must be deposited only at the nearest Customs State Warehouse or another State Warehouse approved by the Collector of Customs. Seizure reports prepared by Rangers and Frontier Corps personnel must be submitted to the relevant Adjudication Collectorate within 15 days of detention of the goods for adjudication under the Customs Act. A copy of each seizure report must also be endorsed to the concerned Collector of Customs (Enforcement) in whose jurisdiction the case falls. Customs powers assigned according to rank The notification specifies different provisions of the Customs Act that may be exercised according to the rank of the personnel. Officers not below the rank of non-commissioned officer may exercise specified powers under Sections 158, 159(1), 160(1) and (2), and 172(1) of the Customs Act. Officers not below the rank of Junior Commissioned Officer may exercise powers under Sections 157(1), 158, 159, 161(1) and (2), 164(1), 165(1), 166(1) and (2), 167, 168(1) and (3), and 169(1), (2), (3) and 171. Commissioned officers may exercise specified powers under Sections 159(2) and (3), 160(6), 161(3) and (4), and 163(1), (2), (3) and (4). The Commandant, within his jurisdiction, may exercise the powers provided under Section 157(2) of the Customs Act. Disposal and monitoring of seized goods Following confiscation by the relevant legal forum, the concerned Collector of Customs (Enforcement) will auction or otherwise dispose of confiscated goods and vehicles in accordance with the Customs Act, applicable Auction Rules and relevant customs orders. Perishable goods and other items requiring disposal under Section 169(4), read with Section 201 of the Customs Act, will be disposed of by the concerned Collector of Customs (Enforcement) in accordance with applicable law and Customs Rules. The FBR has also introduced a reporting mechanism requiring the Officer Commanding of each Rangers and Frontier Corps wing to submit monthly seizure details to the relevant Collector of Customs (Enforcement) by the fifth day of each month. The reports will include details of detained or seized goods and vehicles, dates of detention and seizure, value and quantity, and the name and location of the State Warehouse where the goods were deposited. Monthly coordination meetings ordered The Chief Collector of Customs (Enforcement), Islamabad, has been directed to convene a coordination meeting every month with the respective Director Generals of Rangers and Inspectors General of Frontier Corps. The meetings will review enforcement activities and facilitate coordination between Customs authorities and the paramilitary forces. The new arrangement is aimed at strengthening coordinated anti-smuggling operations near Pakistanâ€™s international borders while retaining Customs authoritiesâ€™ responsibility for the formal adjudication and disposal of seized and confiscated goods.

Date: 2026-08-29

Details: Written by Faisal Shahnawaz in Taxation Minister of State highlights budget relief, export facilitation committees and government support for export-led industrial growth Minister of State for Finance and Railways Bilal Azhar Kayani held a consultative meeting with leading exporters and representatives of major trade associations in Karachi, focusing on tax policies, budgetary relief and measures to strengthen Pakistanâ€™s export sector. During the meeting, Kayani briefed business representatives on the governmentâ€™s latest tax measures, particularly relief announced for exporters in the recent federal budget. He also listened to concerns raised by exporters regarding tax-related procedures and operational challenges affecting businesses. The minister said the government remains committed to creating a business-friendly environment by facilitating trade, simplifying the tax framework and supporting export-oriented industries. He emphasized the importance of maintaining regular engagement with the business community to identify and resolve issues affecting exporters. A major focus of the discussion was the Export Facilitation Committees recently notified by the government following the budget. According to the minister, these committees have been established to facilitate exporters, address industry-related complaints and provide an effective platform for resolving disputes amicably. The committees are also intended to ensure that exporters receive greater protection from unnecessary harassment during interactions with tax authorities. The initiative is expected to improve coordination between the government and export-oriented businesses while creating a more predictable operating environment. Kayani reaffirmed that export-led industrial growth remains a key priority for the government. He assured industry stakeholders that policy support would continue and that channels of communication with exporters would remain open to address emerging challenges. Representatives of the exporting community welcomed the governmentâ€™s engagement and presented practical recommendations concerning tax-related operational matters. They stressed the need for effective implementation of facilitation measures to improve Pakistanâ€™s export performance and competitiveness. The meeting was attended by prominent representatives of several national trade bodies, including PHMA, PAKSEA, PRGMEA, TMA, PCMA, PCFA, PBEA, PDMEA, APBUMA, PTEA, PSGMEA, SIMAP, PCMEA, PLGEMA, Sialkot Chamber of Commerce and Industry, Pakistan Tanners Association, Pakistan Fisheries Exporters Association, Pakistan Gloves Manufacturers and Exporters Association, Rice Exporters Association of Pakistan, All Pakistan Fruit & Vegetable Exporters, Importers & Merchants Association and All Pakistan Meat Exporters & Processors Association. The exporters appreciated Kayaniâ€™s efforts to address industry concerns and called for continued government-business coordination to create a stronger environment for export-led growth.

Date: 2026-08-29

Details: Written by Faisal Shahnawaz in Taxation, Top stories Shehbaz Sharif calls for faster digitalisation, stronger revenue systems and third-party oversight of tax reforms Prime Minister Shehbaz Sharif has directed authorities to ensure the timely implementation of FBR reforms and intensify action against tax evasion, smuggling and illegal businesses. Chairing the weekly review meeting on Federal Board of Revenue reforms in Islamabad, the prime minister called for a third-party audit of the reform process to improve transparency, efficiency and long-term sustainability. Shehbaz Sharif said digitalisation, production monitoring and automated systems were central to efforts aimed at modernising Pakistanâ€™s tax administration. He also welcomed the appointment of reputed goods evaluators within the FBR and appreciated the boardâ€™s leadership for advancing the reforms. The meeting was informed about progress on the restructuring of Pakistan Revenue Automation Limited (PRAL), digital tax initiatives and measures designed to strengthen revenue collection. Work is also progressing on IRIS 3.0, a new tax operating model and a central data hub intended to create an integrated, data-driven tax system. International consultants have been engaged to help develop IRIS 3.0, while a related project is being pursued to improve tax administration, introduce pilot auto-taxation and eventually use artificial intelligence and machine learning to enhance tax collection. Officials also briefed the meeting on changes at PRAL, including new senior-level appointments covering technology, data security, operations and taxation. The meeting was told that faceless assessment in customs had produced positive results. Between January and June 2026, average revenue per Goods Declaration increased by 12%, while the system also strengthened the identification and monitoring of irregular imports. The recruitment of 280 goods evaluators is nearing completion. A Central Assessment Unit in Islamabad is expected to become operational by December 31, 2026, with its permanent facility planned for completion by June 2027. Digital invoicing has also expanded significantly. Transactions increased from PKR 236 billion in July 2025 to PKR 2.5 trillion in July 2026, with a target of PKR 4 trillion by December. To combat petroleum smuggling, authorities are using GIS tagging, GPS tracking, oil marketing company ERP integration and a central monitoring application. The Rahguzar app has reportedly helped shut down 2,500 illegal petrol pumps and initiate legal proceedings. The prime minister directed authorities to maintain momentum and ensure the reforms deliver stronger revenue collection and a more transparent tax system.

Date: 2026-08-29

Details: Written by Hamza Shahnawaz in Corporate, IT & Telecom, Taxation PTCL says disputed tax matters remain under appeal, with stays obtained against recovery of the outstanding amounts. ISLAMABAD: Pakistan Telecommunication Company Limited (PTCL) has disclosed tax contingencies with a potential tax impact of approximately Rs55.30 billion in its financial report for the first half of calendar year 2026 (1HCY26). According to the financial report submitted to the Pakistan Stock Exchange (PSX), the disputed tax matters relate to tax years 2007, 2009, 2010 and 2011 to 2024. The company said tax authorities had disallowed certain expenses and tax credits and raised demands over the short deduction of withholding tax (WHT) for various tax years. PTCL challenged the disputed orders before the relevant appellate forums, which granted partial relief in several cases. After taking into account orders issued by the Commissioner Inland Revenue (Appeals), Appellate Tribunal Inland Revenue (ATIR) and rectification orders, the tax impact of the remaining disputed matters stood at Rs55.296 billion. Appeals pending before tax tribunals PTCL said appeals concerning the outstanding tax matters were pending adjudication before the ATIR. The company also disclosed that the reference relating to tax year 2007 was sub judice before the Islamabad High Court. PTCL said stays had been obtained in all cases from the relevant forums, protecting the company against recovery of the disputed tax amounts while the legal proceedings remain pending. Rs5.94bn matters remanded for reconsideration Meanwhile, the Commissioner Inland Revenue (Appeals) remanded disallowances relating to tax years 2014 and 2020 to the taxation officer for reconsideration. According to PTCL, these remanded matters carry a combined tax impact of Rs5.938 billion. The companyâ€™s latest disclosure forms part of the contingent tax matters reported in its financial statements for the six months ended June 30, 2026. The disclosed amounts remain subject to the outcome of ongoing appeals and court proceedings, with no final determination of the disputed tax liabilities at this stage.

Date: 2026-08-29

Details: Written by Hamza Shahnawaz in Taxation Updated tax rules set conditions for deducting business expenses and specify treatment of depreciable and intangible assets ISLAMABAD: The Federal Board of Revenue (FBR) has outlined the rules for claiming deductions against income chargeable under the head â€œIncome from Businessâ€ for tax year 2027. The FBR issued the Income Tax Ordinance, 2001, updated up to June 30, 2026, explaining the provisions governing deductions in computing business income under Section 20. Under the law, a taxpayer deriving income chargeable under the head â€œIncome from Businessâ€ can claim a deduction for expenditure incurred during the tax year, provided the expense is incurred wholly and exclusively for the purposes of business. The deduction remains subject to the conditions and limitations prescribed under the Income Tax Ordinance. Deduction allowed for business animals The law also provides a specific deduction where animals used for business or professional purposes, other than as stock-in-trade, die or become permanently useless for those purposes. In such cases, a taxpayer is allowed a deduction equal to the difference between the actual cost of the animals to the taxpayer and any amount realised from their carcasses or from the animals themselves. Depreciable assets and long-term expenditure The FBR has further clarified the treatment of expenditure incurred on depreciable assets and intangible assets. Where business expenditure is incurred to acquire a depreciable asset, an intangible asset having a useful life of more than one year, or constitutes pre-commencement expenditure, the amount cannot simply be deducted in full in the year in which it is incurred. Instead, subject to the Income Tax Ordinance, such expenditure is required to be depreciated or amortised in accordance with Sections 22, 23, 24 and 25. This provision establishes a distinction between ordinary business expenses and expenditure relating to assets or costs that provide benefits over an extended period. Amalgamation-related costs The law also provides relief for certain expenses incurred by an amalgamated company. Where an amalgamated company incurs expenditure on legal and financial advisory services, as well as other administrative costs associated with planning and implementing an amalgamation, a deduction is allowed for such expenditure, subject to the provisions of the Ordinance. The provisions of Section 20 establish the framework for determining which expenses can be deducted when calculating taxable business income for tax year 2027. Taxpayers are required to ensure that claimed expenses meet the statutory conditions and that capital, intangible and pre-commencement expenditure is treated under the relevant depreciation or amortisation provisions.

Date: 2026-08-29

Details: Written by Hamza Shahnawaz in Definitions, Taxation Updated tax rules define speculative transactions involving commodities, stocks and shares while excluding qualifying hedging activities ISLAMABAD: The Federal Board of Revenue (FBR) has outlined the rules governing â€œspeculation businessâ€ for tax year 2027, including the circumstances in which transactions involving commodities, stocks and shares are treated as speculative activities for tax purposes. The FBR issued the Income Tax Ordinance, 2001, updated up to June 30, 2026, explaining the treatment of speculation business under Section 19. Under the law, where a person carries on a speculation business, it is treated as a distinct and separate business from any other business conducted by that person. The provisions relating to business income and losses are applied separately to the speculation business and the taxpayerâ€™s other business activities. The law also provides that any loss arising from speculation business during a tax year, calculated in accordance with the relevant provisions, will be dealt with under Section 58 of the Income Tax Ordinance. What constitutes speculation business? For tax purposes, the FBR defines â€œspeculation businessâ€ as a business in which a contract for the purchase or sale of a commodity, including stocks and shares, is periodically or ultimately settled without actual delivery or transfer of the commodity. However, the law excludes certain transactions from the definition of speculation business. The first exclusion applies to contracts involving raw materials or merchandise entered into by a person in the course of manufacturing or mercantile business. Such contracts are excluded where they are intended to protect against losses arising from future price fluctuations and are entered into for fulfilling the taxpayerâ€™s other contracts involving the actual delivery of goods to be manufactured or merchandise to be sold. Hedging contracts receive exemption The second exclusion covers contracts relating to stocks and shares entered into by a dealer or investor to protect against losses in the personâ€™s existing holdings resulting from price fluctuations. The third exclusion applies to contracts entered into by a member of a forward market or stock exchange as part of transactions in the nature of jobbing or arbitrage. Such transactions are excluded where they are undertaken to protect against losses that may arise in the ordinary course of the memberâ€™s business. The provisions therefore distinguish between speculative transactions and legitimate hedging activities undertaken to manage commercial or investment risks. Separate treatment for speculative activities For tax year 2027, taxpayers engaged in speculation activities are required to treat such business separately from their other business operations. This means income and losses arising from speculation business will be assessed independently, while qualifying hedging and risk-management transactions remain outside the scope of the speculation business definition. The clarification provides taxpayers with guidance on distinguishing genuine risk-management transactions from speculative activities for income tax purposes.

Date: 2026-08-29

Details: Written by Hamza Shahnawaz in Definitions, Taxation Updated Income Tax Ordinance clarifies taxable business profits, benefits, leasing receipts and financial-sector income ISLAMABAD: The Federal Board of Revenue (FBR) has clarified the categories of income that will be taxable under the head â€œIncome from Businessâ€ for tax year 2027. The FBR issued the Income Tax Ordinance, 2001, updated up to June 30, 2026, explaining the provisions applicable to income from business under Section 18. Under the updated law, profits and gains from any business carried on by a person at any time during a tax year are chargeable to tax under the head â€œIncome from Businessâ€, except where the income is specifically exempt under the Ordinance. Income earned by a trade, professional or similar association from selling goods or providing services to its members is also treated as business income. Cooperative societiesâ€™ income falls under business head The law further clarifies that income derived by cooperative societies, including recreational clubs, from the sale of goods, immovable property or provision of services to their members is and has always been chargeable to tax under the Income Tax Ordinance. Income earned from the hiring or leasing of tangible movable property also falls under the head of income from business. The FBR has additionally included the fair market value of any benefit or perquisite received by a person in the course of, or by virtue of, a past, present or prospective business relationship. Such a benefit is taxable whether it can be converted into money or not. The law further clarifies that the term â€œbenefitâ€ includes an advantage arising from the waiver of profit on debt or the debt itself under the State Bank of Pakistan Banking Policy Departmentâ€™s Circular No. 29 of 2002 or any other scheme issued by the central bank. Management fees treated as business income Management fees earned by a management company, including a modaraba management company, are also chargeable to tax under the head â€œIncome from Businessâ€. The FBR has clarified that income taxable under Sections 5A, 5AA, 6, 7 and 7A of the Income Tax Ordinance will not be chargeable under Section 18. The updated law also specifies the treatment of profit on debt. Where a personâ€™s business consists of deriving profit on debt, such income will be taxable under â€œIncome from Businessâ€ rather than â€œIncome from Other Sourcesâ€. Special rules for financial institutions Special rules apply to certain financial institutions involved in leasing activities. Where a scheduled bank, investment bank, development finance institution, modaraba or leasing company leases an asset to another person, any amount paid or payable in connection with the lease will be treated as income of the lessor and taxed under the head â€œIncome from Businessâ€. The provision applies whether the leased asset is owned by the lessor or not. The law also provides that any amount received by a banking company or non-banking finance company representing a distribution by a mutual fund or a Private Equity and Venture Capital Fund from its income from profit on debt will be chargeable under â€œIncome from Businessâ€. Such income will not be treated as income from other sources. The updated provisions provide the tax treatment for a broad range of commercial receipts and business-related benefits, helping determine the appropriate head under which such income is to be assessed for tax year 2027.

Date: 2026-08-29

Details: Published August 29, 2026 Updated about 2 hours ago By Press Release LAHORE: The Bank of Punjab (BOP) on Friday announced its unaudited financial results for the half year ended June 30, 2026. Reviewed and approved by the Bankâ€™s Board of Directors, the results reflect sustained business momentum, disciplined operational execution, and healthy core earnings growth, further strengthening the Bankâ€™s position in Pakistanâ€™s financial sector. In recognition of the Bankâ€™s strong financial performance and continued commitment to delivering value to shareholders, the Board of Directors has also declared the highest-ever interim cash dividend of 16 percent in line with industry dividend payout ratios. The enhanced dividend reflects continued confidence in the Bankâ€™s earnings trajectory, while reinforcing its commitment to creating sustainable value for shareholders. 1st Half 2026 Highlights at a Glance Exceptional Operating Performance & Earnings Growth The Bank delivered a highly robust performance for the first half of the year 2026, underscored by a 67 percent YoY growth in Operating Profit (before provisions & gains) reaching Rs 22.5 billion. The Bankâ€™s Net Interest Income improved to Rs 46.1 billion with a 29 percent YoY growth, while Non-Markup Income (excluding gains) registered a hefty growth of 61 percent, reaching Rs 11.9 billion. This remarkable trajectory was driven by proactive asset-liability management, accelerated fee-based income generation, and the successful diversification of revenue streams. Through vigilant and disciplined cost management, coupled with enhanced operational efficiencies, the Bank achieved a 35 percent YoY growth in Profit Before Tax, reaching Rs 20.5 billion, while Profit After Tax surged to Rs 9.5 billion with a 40 percent YoY growth. Sustained expense discipline and resource optimization further strengthened the Bankâ€™s cost efficiency. As a result, the Bankâ€™s Cost-to-Income Ratio continued its declining trend and improved by 2.40 percentage points over the first half of 2025. Improved Funding Profile and Strong Advances Momentum During the first half of 2026, the Bank maintained a sound and well-balanced financial position, with total assets of Rs 2,504 billion. The Bankâ€™s funding profile strengthened as total deposits increased to Rs 2,154 billion, driven by 20 percent YoY growth in current deposits, while average current deposits recorded an impressive 26 percent YoY increase. The Bank continued to support economic activity through disciplined lending, with gross advances rising by 28 percent to Rs 996 billion, including financing for priority sectors of the economy. Regulatory Compliance The Bank maintained a strong capital position, with its Capital Adequacy Ratio (CAR) at 13.69 percent and leverage ratio at 3.65 percent, both comfortably above the regulatory requirements prescribed by the State Bank of Pakistan. The Bank also remained fully compliant with provisioning requirements under IFRS 9, reinforcing the strength, resilience, and soundness of its balance sheet. Landmark Strategic Developments During 2026 PACRA upgrades BOP to Highest AAA Rating: In a major institutional milestone, the Pakistan Credit Rating Agency (PACRA) upgraded the Bankâ€™s long-term entity rating to the highest possible tier of AAA, with a Stable Outlook. This upgrade is a testament to BOPâ€™s strengthened financial profile, elevated market standing, and unwavering commitment to rigorous risk management and governance frameworks. Bahrain Overseas Wholesale Banking Unit: Advancing its international footprint, BOP received in-principle approval from the State Bank of Pakistan (SBP) to establish an Overseas Wholesale Banking Unit in the Kingdom of Bahrain. This strategic expansion will enable the Bank to capitalize on lucrative cross-border banking opportunities, enhance regional connectivity, and cultivate vital institutional relationships across the Middle East. Proposed Rs 30 Billion Equity Subscription: Highlighting strong sponsor support, the Board of Directors has proposed the issuance of ordinary shares to the Government of Punjab for up to Rs 30 billion. Subject to requisite shareholder and regulatory approvals, this substantial capital injection will be executed in two tranches i.e. up to Rs 20 billion by December 31, 2026, and the remaining balance by June 30, 2027. This pivotal initiative will significantly augment the Bankâ€™s capacity for accelerated balance sheet expansion and strategic flexibility. Pakistan Banking Awards 2026 â€“ Recognition of Sustained Leadership: At the Pakistan Banking Awards 2026, BOP won three awards: Best Bank for Agriculture Inclusion, Best SME Bank, and Best Bank for Womenâ€™s Inclusion. The Agriculture and Womenâ€™s Inclusion awards mark a three-year hat-trick, while the SME award is BOPâ€™s fourth in the last five years. BOP is the only bank to win three awards for two consecutive years, and the only bank ever to achieve this unique vertical and horizontal hat-trick, reaffirming its sustained leadership in Pakistanâ€™s priority sectors. Strategic Market Position & Outlook Serving as a trusted and integral financial partner to the Government of Punjab, BOP continues to play a catalytic role in facilitating public welfare programs, priority sector financing, and broader socio-economic development initiatives. Supported by a solid capital base, a newly upgraded AAA credit standing, and a relentless focus on digital transformation, the Bank is exceptionally well-positioned to sustain its accelerated growth momentum throughout the remainder of 2026. Management remains resolutely committed to delivering sustainable, long-term shareholder value while championing financial inclusion and expanding access to modern, customer-centric banking services nationwide. Copyright Business Recorder, 2026

Date: 2026-08-29

Details: Published August 29, 2026 Updated about 2 hours ago By Press Release MANAMA: Al Baraka Group B.S.C. (C) announced its financial results for the second quarter and first half ended 30 June 2026, reaffirming its continued ability to deliver strong and sustainable growth across its financial and operational performance indicators, despite geopolitical and economic challenges and volatility in global markets. The results reflect the resilience of the Groupâ€™s business model, underpinned by geographic diversification, strong market presence of its banking units in their local markets, diversified income streams, and enhanced quality of its financing and investment portfolios, enabling the Group to transform challenges into growth opportunities, supported by the outstanding performance of its key banking units, particularly in TÃ¼rkiye, Jordan, and Algeria. During the second quarter of 2026, the Group recorded notable growth in profitability indicators, with net income attributable to the shareholders of the parent company increasing by 16 percent to USD61 million, compared with USD53 million in the second quarter of 2025. Basic earnings per share rose to US cents 3.59 in the second quarter of 2026, compared with US cents 2.89 for the same period last year. Total net income also increased significantly by 18 percent to USD111 million during the second quarter of 2026, compared with USD94 million in the corresponding period of 2025, driven by the remarkable growth in the business activities of the Groupâ€™s banking units, particularly in TÃ¼rkiye, Algeria, and Jordan. Total comprehensive income attributable to the shareholders of the parent company surged by 46 percent to USD73 million during the second quarter of 2026, compared with USD50 million in the corresponding period of 2025, primarily due to the positive impact of applying hyperinflation accounting requirements. For the first half of 2026, the Group continued to deliver strong financial performance. Net income attributable to the shareholders of the parent company increased by 14 percent to USD113 million, compared with USD99 million in the first half of 2025. Basic earnings per share rose to US cents 7.91 in the first half of 2026, compared with US cents 6.73 for the corresponding period of 2025. Total net income grew by 10 percent to reach USD204 million during the first half of 2026, compared with USD185 million in the corresponding period of the previous year, for the same reasons mentioned above. Total comprehensive income attributable to the shareholders of the parent company surged by 73 percent to USD145 million during the first half of 2026, compared with USD84 Million in the corresponding period of 2025. Total equity attributable to the shareholders of the parent company and Sukuk holders increased to USD1.48 billion at the end of June 2026, compared with USD1.37 billion at the end of December 2025, representing an 8 percent increase, primarily supported by the accounting impact arising from hyperinflation. Total equity also increased by 7 percent to USD2.35 billion at the end of June 2026, compared with USD2.19 billion at the end of December 2025, for the same reasons mentioned above. The Group further strengthened its financial position during the first half of 2026, with total assets rising to USD32.96 billion, compared with USD31.01 billion at the end of 2025, representing a growth of 6 percent, supported by solid growth in financing and investments, particularly across the Groupâ€™s banking units in TÃ¼rkiye, Jordan, and Algeria. As part of its strategy to enhance integration among its banking units, Al Baraka Group continued to expand its cross-border banking services by launching its account opening and management service between Al Baraka Islamic Bank â€“ Bahrain and Al Baraka Bank Egypt, following the successful launch of the service between its Bahrain and TÃ¼rkiye banking units. The initiative provides customers with a seamless digital banking experience across the markets in which the Group operates. Commenting on the results, Shaikh Abdullah Saleh Kamel, Chairman of Al Baraka Group, said: â€œThe Groupâ€™s results for the first half of 2026 reaffirm the strength and resilience of our business model and its ability to deliver sustainable growth despite geopolitical and economic challenges. Our strategy of geographic diversification, coupled with the deep-rooted presence of our banking units in their local markets, and the strength of our customer relationships have been fundamental pillars in enhancing the Groupâ€™s resilience against market volatility while enabling us to capitalize on growth opportunities, further reinforcing our position as one of the leading Islamic financial groups at both the regional and international levels.â€ For his part, Houssem Ben Haj Amor, Board Member and Group Chief Executive Officer, stated: â€œThese results reflect the successful execution of the Groupâ€™s strategic priorities, supported by growth in operating revenues, expansion of financing and investment activities, and improved operational efficiency, while maintaining strong liquidity, capital, and asset quality. The cross-border banking initiative represents a pillar of our â€˜Borderless Bankingâ€™ strategy and will be progressively expanded across the Groupâ€™s banking units to support trade and investment while delivering an integrated digital banking experience.â€ Copyright Business Recorder, 2026

Date: 2026-08-29

Details: Published August 29, 2026 Updated about 2 hours ago By Recorder Report KARACHI: National Bank of Pakistan (NBP) delivered a resilient performance in the first half of calendar year 2026, posting a profit before tax of Rs67.3 billion and a profit after tax of Rs32.4 billion, translating into earnings per share of Rs15.23 for the half year ended June 30, 2026. The Board of Directors of National Bank of Pakistan (NBP) has approved the interim condensed financial statements for the half-year ended June 30, 2026 in it meeting held on August 27, 2026. According to company announcement, NBP continued to demonstrate resilient financial performance and disciplined balance sheet management during the first half of 2026, navigating an evolving interest rate environment while maintaining strong liquidity, funding and capital positions. With 15 percent growth, NBP generated gross interest income of Rs361.7 billion in the first half of calendar year 2026. Non-mark-up income also advanced, rising 3.8 percent year-on-year to Rs27.6 billion the back of a strong showing across multiple streams. Foreign exchange income grew impressively to Rs5.4 billion from Rs3.5 billion, while dividend income surged 30 percent to Rs4.1 billion, underscoring the quality and diversification of the Bankâ€™s earnings base. Operating expenses increased by approximately 11 percent YoY to Rs65.5 billion, primarily reflecting targeted investments in digital capabilities and technology infrastructure to strengthen operating capacity, resilience and scalability. Proactive risk management remained a key strength, with recoveries against non-performing loans, and credit loss allowances recording a net reversal of Rs5.3 billion during 1HCY26, compared to a charge of Rs4.8 billion in the corresponding period last year. Specific Non-Performing Loan (NPL) provision coverage stood at 93 percent under applicable SBP regulations, while the Bank continues to maintain strong IFRS 9 Expected Credit Loss coverage. The Bankâ€™s total assets increased by 10.9 percent during the first half of 2026 to Rs7.8 trillion, compared to Rs7.07 trillion as of December 31, 2025. Investments increased to Rs5.67 trillion, with the portfolio strategically positioned towards shorter-maturity government securities, providing flexibility to capitalise on emerging repricing opportunities. Gross advances stood at Rs1.58 trillion, compared to Rs1.61 trillion at year-end 2025, with the 2.4 percent decline primarily reflecting seasonal factors in the Commercial and SME segments. Meanwhile, Islamic financing continued its growth trajectory, increasing by 27 percent during the first half to Rs312.8 billion. Total deposits stood at Rs4.2 trillion as of June 30, 2026. Current deposits of Rs2.07 trillion represented 49.2 percent of total deposits, while the overall CASA base stood at Rs3.53 trillion. Commenting on the performance Abdul Wahid Sethi, SEVP/CFO, additional acting charge of President / CEO NBP, expects the operating environment to gain further traction during the second half of 2026, supported by easing geopolitical tensions, improving business confidence and a gradual recovery in economic activity. He said that with its strong liquidity and funding franchise, robust capital position and disciplined risk management framework, the Bank is well positioned to support and capitalise on this recovery. NBP will continue to pursue risk-calibrated asset growth and deepen customer relationships, with stronger advances and improving business activity expected to provide greater momentum to its core franchise through the year-end, he added. Copyright Business Recorder, 2026

Date: 2026-08-28

Details: Published August 28, 2026 Updated about 2 hours ago By Reuters NEW YORK: The tech-heavy Nasdaq outperformed peers on Thursday after Nvidiaâ€™s blockbuster results reaffirmed the strength of the AI boom and fueled gains in technology stocks. Nvidia shares jumped 7.5 percent after the chip giantâ€™s robust forecast met lofty investor expectations, bolstering the view that the tech rally still has room to run as companies at the heart of AI buildout continue to deliver impressive growth. â€œNvidiaâ€™s results show that the AI boom is not running out of demandâ€¦ while delivering that growth is becoming more expensive and capital-intensive,â€ said Lale Akoner, global market strategist at etoro. Its â€œability to raise prices should help margins recoverâ€¦ but it cannot escape supply pressures entirely.â€ Nvidia has warned that shortages of memory components could curb the pace of the industryâ€™s growth. US chip-linked stocks broadly rose, with the semiconductor index adding 1.5 percent. The S&P 500 Information Technology sector rose 2.6 percent, making it the sole gainer among the S&P 500â€™s 11 constituents. Salesforce surged 20.2 percent after raising annual revenue and profit forecasts, and rolling out a new plug-in integrated with Anthropicâ€™s Claude AI models. The stock was the biggest boost to the blue-chip Dow, and was set for its best one-day jump in six years. CrowdStrike climbed 18 percent after the cybersecurity software provider raised its annual revenue forecast and topped second-quarter earnings estimate. Both these reports calmed worries that advanced AI tools could upend the traditional software industry, boosting investor appetite for beaten-down software stocks and narrowing the gap with semiconductors, which are seen as the primary beneficiaries of the AI boom. Other software firms ServiceNow and Palo Alto Networks gained 8.6 percent and 11.5 percent, respectively. At 11:32 a.m. ET, the Dow Jones Industrial Average rose 171.81 points, or 0.32 percent, to 53,635.69. The S&P 500 gained 44.59 points, or 0.58 percent, to 7,720.29, while the Nasdaq Composite advanced 311.01 points, or 1.19 percent, to 26,441.21. Moderna dropped 6.8 percent after unveiling a USD2 billion convertible bonds sale, while HP lost 5.2 percent after its PC unit shipments and margins declined in the third quarter.

Date: 2026-08-28

Details: Published August 28, 2026 Updated about 2 hours ago By Recorder Report ISLAMABAD: The United International Group (UIG) has announced that the Board of Directors of the United Insurance Company of Pakistan Limited (UICL) has approved the establishment of United Digital Life Insurance Company, marking a significant step in the Groupâ€™s long-term growth strategy. The proposed company is planning to expand UIGâ€™s presence in Pakistanâ€™s insurance and financial services sector by leveraging digital technologies to deliver accessible, customer-centric life insurance solutions. The initiative reflects the Groupâ€™s commitment to innovation, operational excellence, and the evolving needs of consumers in an increasingly digital economy. Through United Digital Life Insurance Company, UIG aims to strengthen its market position by offering technology-enabled insurance products and services designed to enhance customer experience, improve accessibility, and support greater financial inclusion. The initiative aligns with the Groupâ€™s broader strategy to invest in digital transformation and expand its portfolio across the insurance sector. The establishment of United Digital Life Insurance Company remains subject to the completion of all applicable legal, regulatory, and licensing requirements, including the necessary approvals from the relevant authorities. Commenting on the development, Mian M A Shahid, Chairman of United International Group (UIG) and Chief Executive Officer of the United Insurance Company of Pakistan Limited, said, â€œThe approval of United Digital Life Insurance Company represents an important milestone in our growth strategy. We believe this initiative will create new opportunities for innovation, strengthen our presence in the insurance and financial services sector, and enable us to deliver modern, technology-driven insurance solutions that are more accessible and responsive to the evolving needs of our customers.â€ Copyright Business Recorder, 2026

Date: 2026-08-25

Details: Published August 25, 2026 Updated about 2 hours ago By Press Release KARACHI: Allied Bank continues to strengthen its capacity to navigate evolving market dynamics. Enhanced digital capabilities and operational excellence remain central to delivering superior customer experience and sustainable growth which are complimented by disciplined risk management practices, a diversified portfolio, and a strong capital base. The Bank recorded markup/interest income of Rs. 171,499 million for the half year ended June 30, 2026, compared to Rs. 143,586 million for the half year ended June 30, 2025, reflecting an increase of 19%. This increase primarily stems on account of higher average volumes of mark-up bearing assets.The Bank declaredRs. 8.00 dividend for the half year ended June 30, 2026. Conversely, markup or interest expense of the Bank has increased by Rs. 26,498 million or 29% to reach at Rs. 118,429 million for the half year ended June 30, 2026, compared to Rs. 91,932 million for the half year ended June 30, 2025. This increase is on account of higher borrowing expense, deposit cost and interest expense on right of use asset, Resultantly, net markup and interest income reached at Rs. 53,069 million during the half year ended June 30, 2026 as compared to Rs. 51,654 million during the same period last year, increasing by Rs. 1,415 million or 3%. Fee income stood at Rs. 8,335 million for the half year ended June 30, 2026, compared to Rs. 7,732 million for the corresponding period last year; registering increase of Rs. 603 million or 8%, mainly on account of higher card related fee, card acquiring business, investment banking fee, partially offset by lower commission on remittances. Dividend income of the Bank stood at Rs. 2,023 million for the half year ended June 30, 2026 as compared to Rs. 1,374 million for the half year ended June 30, 2025, increased by 47% Due to unrealized loss on fair value through profit and loss securities, capital gain of the Bank for the half year under review was Rs. 490 million compared to a capital gain of Rs. 1,687 million for the half year ended June 30, 2025. Foreign Exchange income of ABL stood at Rs. 3,393 million for the half year ended June 30, 2026, against Rs. 2,927 million for the half year ended June 30, 2025, increasing by 16%. The Bankâ€™s other income amounted to Rs. 1,408 million in first six months of 2026, compared to Rs. 411 million in the same period last year, expanding by 242%. Cumulatively, non-markup or non-interest income of the Bank stood at Rs. 15,650 million for the half year ended June 30, 2026, reflecting a 11% increase from Rs. 14,131 million in the corresponding period last year. Allied Bankâ€™s continued investment in expanding its branch network and strengthening its technology infrastructure resulted in a moderate increase in operating expenses during the six-month period. Nevertheless, the Bankâ€™s disciplined approach to cost optimization, supported by process automation, digitalization, and enhanced operational efficiencies, enabled it to contain the growth in operating expenses to 11%, reflecting its continued focus on sustainable productivity and long-term value creation. Total operating expenses amounted to Rs. 35,749 million for the half year ended June 30, 2026, compared to Rs. 32,129 million for the half year ended June 30, 2025. For the half year ending June 30, 2026, profit before taxation stood at Rs. 32,046 million, reflecting a 13% decrease from Rs. 36,970 million in the corresponding period ended June 30, 2025. The Bankâ€™s profit after taxation for the half year ended June 30, 2026, stood at Rs. 15,713 million, compared to Rs. 17,457 million in the corresponding period of 2025, lower by 10%. During the period, the Bank further strengthened its physical presence through the expansion of its branch network, the establishment of additional digital and smart branches, and the refurbishment of existing locations to provide a modern, seamless, and customer-centric banking experience. As at June 30, 2026, the Bank operated a network of 1,537 branches, comprising 1,194 conventional branches, 321 Islamic branches, and 22 digital branches. This nationwide footprint is complemented by a comprehensive self-service banking infrastructure of 1,713 Automated Teller Machines (ATMs), including 1,461 on-site ATMs, 243 off-site ATMs, and 9 Mobile Banking Units (MBUs). The Bank also has a network of 491 Cash Deposit Machines (CDMs) as on June 30, 2026. Gross advances of the Bank were recorded at Rs. 770 billion as of June 30, 2026, compared to Rs. 802 billion as of December 31, 2025. Similarly, net advances of ABL were Rs. 757 billion as of June 30, 2026, compared to Rs. 790 billion as of December 31, 2025; thereby, declining by 4%. The Bankâ€™s disciplined risk management framework, proactive monitoring of credit exposures, and robust recovery efforts continue to support a healthy asset mix while safeguarding long-term financial stability. As of June 30, 2026, the Bankâ€™s infection ratio stood at 1.53%, as compared to 1.42% for the year ended December 31, 2025. The overall coverage ratio was recorded at 106.2% as of June 30, 2026, compared to 109.1% as of December 31, 2025. Bankâ€™s total investments stood at Rs. 2,483 billion as of June 30, 2026, compared to Rs. 2,137 billion as of December 31, 2025, depicting a growth of 16%. Total deposits were Rs. 2,618 billion as of June 30, 2026, compared to Rs. 2,346 billion as of December 31, 2025, reflecting a healthy growth of 12%. Allied Bank recorded strong growth with total assets rising to Rs. 3,735 billion as of June 30, 2026, versus Rs. 3,370 billion at the end of December 2025, growing by 11%. The Bankâ€™s net assets decreased by 2% mainly on account of revaluation deficit on federal government securities, reaching Rs. 258 billion as of June 30, 2026, compared to Rs. 263 billion on December 31, 2025. The Return on Assets (ROA) and Return on Equity (ROE) Tier 1 of the Bank recorded at 0.9% and 15.7%, respectively, as of June 30, 2026. The Capital Adequacy Ratio (CAR) stood at 24.97% as of June 30, 2026, remaining well above the minimum regularity threshold of 11.5%. Copyright Business Recorder, 2026

Date: 2026-08-25

Details: Published August 25, 2026 Updated about 3 hours ago By Reuters BENGALURU: Asian currencies and stocks lost ground on Monday as investors waited on details around the threatened US sanctions against Iran while risk appetite was subdued ahead of key central bank meetings and Nvidia earnings. Currencies throughout the region dropped ahead of US Treasury Secretary Scott Bessentâ€™s press conference later in the day, after threats of severe measures on Iranâ€™s trading partners, while Iran vowed to shut down oil exports from the Gulf. The news piles up on uncertainty already magnified by rising developed market bond yields and ballooning debt levels, the fears of which hammered the US dollar to multi-month lows and drove up gold prices. Indonesiaâ€™s rupiah and the Philippine peso weakened slightly, trading at 17,713 and 61.708 per dollar respectively. The South Korean won demonstrated resilience, briefly climbing to 1,376.50 per dollar, its highest level since mid-September, 2025. The currency, with help from a weaker US dollar, gained support ahead of Bank of Koreaâ€™s rate decision later this week where a 25 basis point tightening is expected. Samsungâ€™s record USD79 billion shareholder-return plan, however, disappointed investors and sent its shares falling 8.7 percent and dragged South Koreaâ€™s KOSPI 3.1 percent lower. To check the health of the artificial intelligence trade that amplified global market volatility, investors will be assessing bellwether Nvidiaâ€™s earnings due on Wednesday, with any surprises sure to move markets. Stocks elsewhere trended lower. Taiwanâ€™s equity benchmark shed over 1 percent, while Indonesian stocks lost 0.5 percent. Thailand stocks shed 0.9 percent, although its currency, historically linked to gold prices, gained to 32.6425 per dollar. The Bank of Thailand will meet later this week, with an interest rate hold widely expected. Philippines stocks added 0.2 percent, ahead of the Bangko Sentral ng Pilipinasâ€™ meeting later this week, with the central bank also widely expected to hike rates by 25 basis points.

Date: 2026-08-25

Details: Published August 25, 2026 Updated about 3 hours ago By Recorder Report ISLAMABAD: A leading cyber security company Monday announced that the Pakistani companies would be equipped with the most effective and cybersecurity technologies and tools by receiving advanced AI features for detecting abnormal events and theft alerts. According to the latest Kaspersky study issued on Monday, one in three companies intends to integrate EDR (Endpoint Detection and Response) or XDR (Extended Detection and Response) into their security operations centres to deliver advanced and reliable protection. With this in mind, Kaspersky updated Kaspersky Next to ensure that businesses are armed with the most effective and all-encompassing cybersecurity technologies and tools. With the latest advancements in Kaspersky SOC management console facilitate the administration and maintenance of security tasks on a platform, and allow for advanced AI capabilities, enhancing various processes from faster data search to improved threat detection. Moreover, this update in Kaspersky Next helps companies significantly reduce hardware requirements, leading to cost savings and increased efficiency. Kaspersky Next is a flagship B2B product line that provides real-time protection, threat visibility, investigation and response capabilities of EDR and XDR within core offerings: Kaspersky Next Optimum (for small and mid-sized businesses) and Kaspersky Next Expert (for enterprises of all sizes). In its new release, Kaspersky Next Expert has received significant updates related to AI-powered technologies, EDR capabilities and flexible deployment options. With the new release, companies receive access to advanced AI features including precise detection of DLL hijacking class attacks, with automatic alert generation upon identification. The AI-driven mechanism leverages new correlation rules that determine the baseline of normal login activity and detects abnormal events to trigger account theft alerts. Copyright Business Recorder, 2026

Date: 2026-08-25

Details: â€¢ Brent fell $2.22, or 2.35%, to $92.17; WTI dropped $2.05 to $85.01, also down 2.35% Published August 25, 2026 Updated about 3 hours ago By Reuters NEW YORK: Oil prices slipped more than USD 2 a barrel on Monday as investors took profits after recent gains and shrugged off new US sanctions on Iran. Brent crude futures settled down USD 2.22, or 2.35%, to USD 92.17, while US West Texas Intermediate crude fell USD 2.05 a barrel, down 2.35% at USD 85.01. Treasury Secretary Scott Bessent on Monday announced an expansion of secondary sanctions it can impose on entities and countries that maintain business ties with Iran around the world as Washington significantly ratchets up economic pressure on Tehran with the war nearing its 6-month mark. This followed Trumpâ€™s threats of â€œeconomic warfare and isolation on an unprecedented scaleâ€ against Tehran last week. â€œThere is not much new that came out of Bessentâ€™s commentary, beyond what was telegraphed in advance,â€ said Raymond James Investment Strategy Analyst Pavel Molchanov. The oil market having rallied quite a bit last week, saw profit taking today, he added. Both contracts posted a second consecutive weekly gain last week, rising more than 5%. â€œCan the White House come up with something that has never been tried before and will have a much more powerful effect on the Iranian economy? Weâ€™ll believe it when we see it,â€ Molchanov said. â€œThe real question now is how aggressively Washington is prepared to enforce secondary sanctions against Iranâ€™s remaining trading partners,â€ Jorge Leon, head of geopolitical analysis at Rystad Energy. â€œUnless China materially reduces purchases further, the additional impact on Iranian oil revenues could be relatively limited,â€ he added. Iran had condemned US plans to announce new sanctions and President Masoud Pezeshkian had called for a diplomatic solution. Pakistanâ€™s army chief was visiting Tehran on Monday for mediation talks, ahead of the US announcement. Oil shipments through the Strait of Hormuz, a route that once carried a fifth of global supplies, remained constrained. Fewer than 20 commodity vessels transited the Strait of Hormuz at the weekend, shipping data showed on Monday, as Iranian and US blockades restrict traffic through the chokepoint for energy shipments. TotalEnergies Chief Executive Patrick Pouyanne said the oil company was profitably moving oil through the Strait of Hormuz, with higher transport costs more than offset by steep discounts from crude producers. Iraqâ€™s SOMO and QatarEnergy both offered crude for loading inside the strait in tenders, traders said. â€œUSD 93 per barrel Brent, rather than USD 120-150, is telling us that enough oil is flowing through the Strait of Hormuz and from the Persian Gulf in general,â€ SEB analyst Bjarne Schieldrop told Reuters, adding that a turning point could be if Iran decided to actually close Hormuz with rockets and drones. Morgan Stanley analysts have increased their Brent forecasts, projecting a peak of USD 100 per barrel in the fourth quarter. The International Energy Agency is not currently discussing a second release of oil from strategic reserves, its chief Fatih Birol said on Monday.

Date: 2026-08-21

Details: Published August 21, 2026 Updated about an hour ago By Press Release ISLAMABAD: In a significant development for Pakistanâ€™s external financing landscape, a Project Agreement between the International Finance Corporation (IFC) and Bank Alfalah Limited (BAFL) for Pakistanâ€™s first Diversified Payment Rights (DPR) Programme was signed on Thursday at the Finance Division, Islamabad, in the presence of Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb. The Project Agreement was signed by Momina Aijazuddin, Regional Industry Director, Financial Institutions Group, Middle East and Central Asia, IFC, and Atif A. Bajwa, President and CEO, Bank Alfalah Limited. The DPR Programme, being pursued under the direction of the Prime Minister, provides an innovative mechanism for mobilizing long-term foreign currency financing through eligible future foreign-currency payment flows. The initiative aims to diversify sources of external financing and facilitate greater access to international capital markets. The initial transaction envisages up to USD 100 million of financing under the DPR structure. Subject to market conditions and the performance of the initial transaction, the programme may provide a platform for further financing and broader participation by international institutional and private investors. Speaking on the occasion, Senator Muhammad Aurangzeb appreciated the close coordination among the Ministry of Finance, State Bank of Pakistan, IFC and Bank Alfalah in developing the transaction. He noted that the initiative involved significant regulatory, policy and technical work and described its successful progression as an important first step that could pave the way for similar market-based financing structures in the future. The Finance Minister emphasized the importance of diversifying Pakistanâ€™s sources of foreign currency financing and developing innovative financing mechanisms to support investment and productive economic activity. He also highlighted the importance of effectively utilizing the financing channel and developing a pipeline of eligible projects requiring foreign currency funding. Representatives of IFC appreciated the support and coordination extended by the Government of Pakistan and the State Bank of Pakistan and acknowledged the efforts of all stakeholders involved in bringing the transaction to this stage. They expressed confidence that the DPR structure could open an additional avenue for long-term international financing and contribute to further development of Pakistanâ€™s capital markets. Bank Alfalah acknowledged the support of the Government, State Bank of Pakistan and IFC and highlighted the significance of being the first Pakistani bank to undertake a DPR transaction. The bank expressed its commitment to leveraging the structure to support eligible foreign currency requirements and productive investment. The transaction marks an important milestone in the development of Pakistanâ€™s debt capital market and external financing framework. It also establishes a potential precedent for future DPR transactions by other Pakistani banks, subject to market conditions and the performance of the initial programme. The ceremony was attended by Secretary Finance, Imdadullah Bosal; Simon Andrews, Division Director, Pakistan, Afghanistan, Kyrgyz Republic, Tajikistan and Turkmenistan, IFC; along with senior representatives from the Finance Division, International Finance Corporation, Bank Alfalah Limited and State Bank of Pakistan. Copyright Business Recorder, 2026

Date: 2026-08-21

Details: Published August 21, 2026 Updated about 2 hours ago By Recorder Report KARACHI: Meezan Bank has inaugurated its first Service Center at Clifton Bridge, Karachi, introducing a customer-focused banking model that combines round-the-clock digital convenience with personalized support. The new facility is designed to enhance customer experience by bringing digital banking services and dedicated assistance under one roof. Strategically located in one of Karachiâ€™s busiest commercial and residential corridors, the Center provides convenient access to banking services for individuals and businesses alike. It is the only banking facility in the industry to offer customers Virtual Teller assistance 24 hours a day, seven days a week, through its Cheque and Cash Deposit Machines, enabling greater accessibility beyond standard branch hours. At the heart of the Center is Meezan Bankâ€™s Virtual Teller service, a video-based banking solution that connects customers with a centrally located teller through live audio and video. The service provides real-time guidance and enables customers to carry out eligible transactions that would ordinarily require assistance at a branch. The inaugural ceremony was attended by the Bankâ€™s President and Chief Executive Officer, Dr. Syed Amir Ali; Chief Operating Officer Retail and Branch Banking Operations, Zia Ul Hasan; General Manager and Head of Operations, Ebrahim Yakoob and other members of the Bankâ€™s senior management. Self-service facilities include cash withdrawals and deposits, balance inquiries, mini statements and funds transfers within prescribed limits. Customers can also deposit Meezan Bank cheques and other banksâ€™ cheques, encash Meezan Bank cheques and access 24/7 Virtual Teller support. On-site staffs are also available to assist customers with product information, digital banking activation, service requests and other banking needs. The Service Center builds on Meezan Bankâ€™s broader efforts to make banking simpler, more accessible and more responsive to customersâ€™ needs. Through initiatives such as WhatsApp Banking, Cheque and Cash Deposit Machines, Virtual Teller, digital account opening, and enhanced card and lifestyle privileges, Meezan Bank continues to combine digital convenience with personalized service across customersâ€™ financial journeys. Copyright Business Recorder, 2026

Date: 2026-08-21

Details: Published August 21, 2026 Updated about 2 hours ago By Reuters FRANKFURT: European shares inched lower on Thursday, as elevated oil prices kept inflation worries alive, while a recovery in global bonds after a US Treasury intervention helped limit losses. The pan-European STOXX 600 closed 0.12percent lower at 650.35 points, extending its losing streak to a seventh straight session, its longest since September 2023. An impasse in US-Iran talks to end the six-month Middle East conflict has dampened hopes for energy supplies to resume through the Strait of Hormuz, pushing oil prices above USD90 a barrel in recent days and rekindling inflation fears among global investors. â€œPrice pressures could move higher in the coming readings as the July retreat in energy prices proved temporary. With no easy resolution in the Middle East, inflation risks remain tilted to the upside,â€ said Ipek Ozkardeskaya, senior analyst at Swissquote. Shares of energy companies rose 0.9percent as Brent crude futures climbed 2.2percent, but the higher oil prices sent travel and leisure stocks down 0.7percent. There was relief in markets, however, that euro zone bond yields steadied on Thursday from multi-year highs following the US Treasuryâ€™s move on Wednesday to boost liquidity support for long-term debt. Franceâ€™s benchmark CAC 40 underperformed regional peers, down 0.6percent as luxury stocks slipped. Gucci parent Kering and Louis Vuitton parent LVMH slid 3.6percent and 2.8percent respectively. On the macro front, German producer prices rose at their fastest pace in over three years in July, data showed, driven by higher costs for intermediate goods and energy. Swedenâ€™s benchmark share index rose 0.3percent after the Riksbank left its key interest rate unchanged at 1.75percent as expected and signalled it stood ready to tighten policy if price pressures accelerate. Among individual movers, JD Sports plunged 14.3percent to the bottom of the STOXX 600 after the British sportswear retailer cut its profit outlook following a steeper-than-expected drop in second-quarter underlying sales, particularly in North America. Novonesis jumped 9.7percent after the Danish biosolutions maker reported better-than-expected second-quarter results, raised its full-year guidance and announced a share buyback.

Date: 2026-08-21

Details: Published August 21, 2026 Updated about 2 hours ago By Reuters NEW YORK: The main US stock indexes hovered near two-week lows on Thursday as climbing Treasury yields dented risk appetite, while a rare quarterly sales miss from retail bellwether Walmart disappointed investors. Walmart lost 9.2percent after missing Wall Street expectations for quarterly comparable sales as shoppers pulled back on spending in the face of rising gas prices. It weighed on the S&P 500 consumer staples index, the biggest sectoral loser, which was down 1.5percent. Rival retailers were pulled lower after Walmartâ€™s earnings, with Albertsons and Costco down 1.3percent and 1.4percent, respectively. â€œInvestor sentiment wavered after the company (Walmart) held to its conservative guidance last quarter, and the slightly raised outlook may not be sufficient to restore confidence,â€ said Sky Canaves, principal analyst at Emarketer. Meanwhile, US Treasury Secretary Scott Bessent said he may again increase the volume of Treasury bonds the government will repurchase. Though yields on US Treasuries dipped briefly, they were still trading higher on the day, with the 30-year yield up 3.5 basis points to 5.244percent. The benchmark 10-year bond also rose and was last at 4.700percent. Shiraz Ahmed, founder and CEO of Sartorial Wealth, said the muted reaction in equities reflected growing investor concerns that markets were due for a pullback after their recent record rally. Concerns over elevated oil prices stemming from the Iran conflict and increasing government debt pushed the US 30-year Treasury yield to a near-two-decade high this week, before the initial support measures announced for long-duration bonds caused it to retreat sharplyon Wednesday. At 12:15 p.m. ET, the Dow Jones Industrial Average fell 458.35 points, or 0.86percent, to 53,004.70, the S&P 500 lost 34.23 points, or 0.44percent, to 7,673.75, and the Nasdaq Composite dropped 243.56 points, or 0.92percent, to 26,087.53. The S&P 500 consumer discretionary sector was the biggest weight on the benchmark index, dragged by losses in Amazon and Tesla. Meanwhile, oil prices rose 2.1percent, extending gains for the fifth consecutive session due to stalled US-Iran peace talks and Middle East supply disruptions. The S&P 500 energy index rose 1.4percent and was the biggest gainer on the S&P 500. Separately, data showed the number of Americans filing claims for unemployment benefits slipped last week, suggesting the labor market remains stable. Minutes of the US Federal Reserveâ€™s July meeting, released on Wednesday, showed inflation concerns deepening at the central bank, with â€œseveralâ€ policymakers ready to raise interest rates. Among others, cryptocurrency-related companies rallied a day after US President Donald Trump called on Congress to pass a crypto bill. Bitcoin hoarder Strategy added 7percent and exchange operator Coinbase Global rose 6.2percent. Biotech company Moderna dropped nearly 20percent a day after surging nearly 177percent.

Date: 2026-08-21

Details: Published August 21, 2026 Updated about 2 hours ago By Rizwan Bhatti KARACHI: Following the acquisition of a 5G license, Zong, a subsidiary of China Mobile Limited, has launched a mega investment programme to upgrade more than 1,000 sites to 5G technology across Pakistan during 2026, accelerating the countryâ€™s transition towards next-generation mobile connectivity. Zong, in Mach, announced to commercially launch fifth-generation (5G) services in Pakistan. Its coverage includes Islamabad, Rawalpindi, Karachi, Lahore, Peshawar and Quetta. Technical trials recorded speeds above 1.4 gigabits per second, alongside ultra-low latency, according to figures shared by the company. Talking to an exclusive media gathering in Karachi, Saira Mirza Deputy Director Corporate Brand Communications and Sustainability Zong said that Zong has positioned its investment as a contribution to Pakistanâ€™s digital infrastructure, in line with the governmentâ€™s Digital Pakistan vision, the China-Pakistan Economic Corridor (CPEC) agenda and Vision 2030. On the occasion Syed Ramis Ali manager Corporate Brand and Communications, and Hafiz Muhammad Imran Regional CTO South were also present. She further informed that Pakistanâ€™s telecom sector contributes around 5.4 percent to GDP and, given the countryâ€™s predominantly young population, investment in locally developed 5G, cloud and artificial intelligence (AI) capabilities could help accelerate the digital economy, promote entrepreneurship and skills development, and enable young Pakistanis to develop globally competitive products from within the country. She said that, backed by China Mobileâ€™s global R&D capabilities and Zongâ€™s continued investment in Pakistan, Zongâ€™s network is increasingly AI-enabled, using intelligent technologies to continuously optimize network performance and energy efficiency across thousands of sites. â€œZong plans to deploy and upgrade more than 1,000 5G sites across Pakistan during 2026, expanding a network that is already live in over 20 cities and positioning the operator to support growing demand for faster consumer and business connectivityâ€, Saira said. Deputy Director Corporate Brand Communications Zong said that the rollout will benefit customers who remain on 4G. Additional spectrum is expected to reduce congestion in high-traffic areas, improving consistency and network performance while laying the groundwork for broader 5G expansion. The operatorâ€™s infrastructure includes more than 17,000 sites and over 26,000 kilometres of fibre. Artificial intelligence is increasingly being used to optimise network performance, detect problems and improve energy efficiency. In Islamabad, Zong reported a 39 percent improvement in peak-hour throughput after deploying AI-enabled network capabilities, she informed. For consumers, the company is developing 5G fixed wireless access for home broadband, gaming and streaming bundles, cloud storage, AI-assisted services, and smart-home products. Businesses are being targeted with private networks, enterprise Internet of Things solutions and digitisation tools for sectors including healthcare, manufacturing, agriculture and logistics. She mentioned that Zong is also supporting these services through Z SAIS, its locally hosted Tier III Intelligent Cloud Computing Center, with zones in Islamabad and Lahore and billing in Pakistani rupees. As 5G adoption grows, the immediate test will be whether faster connectivity translates into affordable, reliable services and measurable productivity gains across the wider economy. Saira said that Zong will continue to meet all PTA regulatory requirements and coverage obligations, while accelerating network deployment to strengthen market competitiveness and deliver an ultimate customer experience across Pakistan. Copyright Business Recorder, 2026

Date: 2026-08-21

Details: Published August 21, 2026 Updated about an hour ago By Recorder Report ISLAMABAD: COMSATS Internet Services (CIS) has bounced back from financial and operational turbulence with a major infrastructure overhaul, 7 Gbps internet bandwidth and a state-of-the-art Tier III Data Centre, positioning the public-sector entity for a fresh push into Pakistanâ€™s fast-expanding digital economy. The organisation, which operates as the internet services arm of COMSATS, has increased its overall internet bandwidth capacity to 7 Gbps, enabling it to provide high-speed and reliable connectivity to government departments, educational institutions, research organizations and corporate customers across the country. The transformation gathered momentum following the appointment of Ambassador Dr. Muhammad Nafees Zakaria as the executive director of COMSATS in November 2022. Under the new leadership, CIS undertook a comprehensive restructuring focused on financial discipline, operational efficiency, technological upgrades and improved customer service. An official said the measures helped the organization overcome financial and operational difficulties, strengthen its relationship with international bandwidth providers, resolve outstanding liabilities and establish a more sustainable financial footing. A key component of CISâ€™s upgraded digital infrastructure is its state-of-the-art Data Centre, which provides hosting and digital infrastructure services to government, education and private-sector organizations. The facility is ISO/IEC 27001 certified, reflecting compliance with internationally recognized information security management standards, while its Tier III infrastructure provides redundancy and operational resilience designed to minimize service disruptions. The Data Centre offers a range of services, including dedicated and virtual server hosting, cloud computing, co-location, managed hosting, disaster recovery and secure data storage. The services are aimed at organisations seeking to reduce IT infrastructure costs while improving security, reliability and operational continuity. CIS has also moved to reduce its dependence on conventional electricity by installing a 167-kVA solar power system at its Data Centre. The solar installation is estimated to generate annual savings of around Rs15 million, helping reduce operating costs while supporting the organisationâ€™s efforts towards environmentally sustainable operations. The initiative is particularly significant for a data centre, where uninterrupted electricity supply is critical, and energy represents a major component of operating expenditure. The savings generated through renewable energy can subsequently support further investment in technology, network expansion and service improvements. CIS has simultaneously strengthened its role in supporting Pakistanâ€™s education and research ecosystem. As part of COMSATSâ€™ broader mandate to promote science, technology and innovation, the organisation provides connectivity to institutions that depend on reliable internet access for online education, research, international collaboration and access to global knowledge networks. The organisation has also established more than 80 internet hubs at COMSATS University Islamabad, covering academic buildings and student hostels. The initiative has expanded access to digital services for students and faculty and strengthened the universityâ€™s digital learning environment. The revival comes at a time when reliable internet connectivity has become critical to almost every sector of the economy, from digital payments and e-commerce to education, healthcare, government services and technology-based businesses. Emerging technologies, including artificial intelligence, cloud computing, big-data analytics, the Internet of Things and telemedicine, are further increasing demand for secure, high-capacity and uninterrupted connectivity. CISâ€™s management argues that its renewed focus on infrastructure, cybersecurity, renewable energy and customer-oriented services has placed the organisation in a stronger position to respond to these requirements. The turnaround also offers an example of how a public-sector institution can recover from financial and operational pressures through improved governance, strategic planning and targeted investment. With its expanded 7 Gbps bandwidth capacity, ISO/IEC 27001-certified Tier III Data Centre, diversified hosting and cloud services, and growing renewable-energy footprint, CIS is seeking to consolidate its position in Pakistanâ€™s increasingly competitive internet services market. As Pakistan accelerates its digital transformation, the availability of secure and dependable digital infrastructure will remain central to economic activity, public service delivery, education, and innovation, putting institutions such as CIS at the heart of the countryâ€™s digital ambitions. Copyright Business Recorder, 2026

Date: 2026-08-20

Details: Published August 20, 2026 Updated about 3 hours ago By Reuters NEW YORK: The main US indexes rebounded on Wednesday after a steep tech selloff in the previous session as easing government bond yields boosted risk appetite, while markets assessed a flood of positive corporate updates including from vaccine-maker Moderna. Modernaâ€™s shares more than doubled after its personalized mRNA cancer therapy developed with Merck cut the risk of melanoma recurrence and spread in a late-stage trial. Merck jumped 11.2 percent and was the biggest boost on the blue-chip Dow. Biotech peers also gained. Novavax was up 6 percent while US-listed shares of BioNTech rallied 21 percent. The S&P 500 healthcare sector rose 2.9 percent to hit a record high, providing the biggest support to the benchmark index. Information technology stocks on the S&P 500 were flat. Chipmaker Broadcom lost 4 percent after Marvell Technologies issued Alphabetâ€™s Google a warrant to buy a stake worth about USD12.18 billion. Marvell surged 9.8 percent, bucking the decline in chipmakers. The broader semiconductor index shed 1.3 percent. â€œMost tech companies are priced mainly on forward earnings expectations, and when interest rates creep up, those expectations are worth less and the stocks are worth less,â€ said Robert Pavlik, senior portfolio manager at Dakota Wealth. At 12:18 p.m. ET, the Dow Jones Industrial Average rose 218.24 points, or 0.41 percent, to 53,564.38, the S&P 500 gained 45.89 points, or 0.60 percent, to 7,737.65, and the Nasdaq Composite was up 156.02 points, or 0.59 percent, to 26,445.73. The yield on the 30-year Treasury bond retreated from its highest level since 2007 after the US Treasury announced it would double the size of liquidity support buyback operations for longer-dated bonds. It was last at 5.203 percent. Concerns over ballooning government debt and rising inflation pushed global bond yields to multi-decade highs on Tuesday, hitting risk assets, especially high-flying chip stocks that have taken US markets to record highs this year. â€œInflation does remain a concern and elevated oil prices are contributing to that. If the Federal Reserve is not going to do anything about it, the bond market will,â€ said Sam Stovall, chief investment strategist at CFRA Research.

Date: 2026-08-20

Details: Published August 20, 2026 Updated about 3 hours ago By Recorder Report ISLAMABAD: President of the Islamabad Chamber of Commerce and Industry (ICCI), Sardar Tahir Mahmood, has lauded Federal Minister for Investment Qaiser Ahmed Sheikh for his longstanding services to Pakistanâ€™s business community, describing him as a credible, honest and dependable personality who has consistently worked to resolve the issues faced by the business sector. The ICCI president said that he had known Qaiser Ahmed Sheikh long before the latter assumed his current ministerial responsibilities. He recalled that during Qaiser Ahmed Sheikhâ€™s association with the Standing Committee on Finance, he regularly engaged with representatives of the business community and actively supported their efforts to resolve business-related issues. He said that whenever the business community staged protests over genuine concerns, Qaiser Ahmed Sheikh would personally visit them, listen to their grievances and convince them to pursue their issues through dialogue and institutional forums. â€œQaiser Ahmed Sheikh has always been accessible to the business community. He did not merely listen to our problems; he stood with us and accompanied us to the relevant authorities for their resolution,â€ Sardar Tahir Mahmood said. He particularly highlighted Qaiser Ahmed Sheikhâ€™s efforts regarding issues related to the Federal Board of Revenue (FBR), saying that he personally accompanied business representatives to meetings with different FBR chairmen and other relevant officials and raised their concerns at the appropriate forums. Sardar Tahir Mahmood said that Qaiser Ahmed Sheikh is well known not only among the business communities of Islamabad and Rawalpindi but across Pakistan, where his services and contribution to the business sector are widely acknowledged. He further appreciated the ongoing policy reform initiatives of the Board of Investment (BOI), saying that these reforms have the potential to reduce unnecessary complexities in doing business and create a more conducive environment for investment and entrepreneurship. Copyright Business Recorder, 2026

Date: 2026-08-20

Details: By Recorder Report LAHORE: Lahore Chamber of Commerce & Industry (LCCI) President Faheem-ur-Rehman Saigol has welcomed the cabinet committee on energyâ€™s approval of the high-level design of the National Integrated Energy Plan 2027-2060, terming it a positive and important step toward building a more efficient, affordable, reliable and sustainable energy system in Pakistan. In a statement, Faheem said a long-term, integrated energy strategy was essential for strengthening Pakistanâ€™s economic competitiveness, particularly for the industrial and export sectors, which requires reliable energy supplies at internationally competitive prices. He stressed that the success of national integrated energy plan would ultimately depend on its effective implementation and its ability to translate into tangible benefits for businesses and consumers. â€œPakistan needs an energy policy that ensures reliability, affordability and predictability. Industry cannot compete internationally when energy costs remain high or supplies are uncertain,â€ he added. The LCCI president said greater utilisation of indigenous energy resources, renewable energy and emerging technologies such as energy storage could help reduce Pakistanâ€™s dependence on expensive imported energy, ease pressure on foreign exchange reserves and improve the countryâ€™s energy security. Faheem observed that lower and more predictable energy costs would have a direct impact on industrial production, exports, investment and employment. â€œAffordable energy is not merely an energy-sector issue; it is a fundamental requirement for economic growth, industrial expansion and export competitiveness,â€ he said. Faheem called for meaningful consultation with the business community, particularly chambers of commerce, industrial associations and major energy-consuming sectors, during the formulation of the detailed national integrated energy plan. He said the private sector should be given an effective role in identifying energy-sector bottlenecks and developing practical solutions as industry is among the major consumers of electricity and gas and is directly affected by energy pricing, availability and reliability. He further emphasized the need to address structural issues in the energy sector, including transmission and distribution inefficiencies, circular debt, capacity-related costs and governance challenges. Copyright Business Recorder, 2026

Date: 2026-08-20

Details: Published August 20, 2026 Updated about 3 hours ago By Recorder Report LAHORE: The Pakistan China Joint Chamber of Commerce and Industry (PCJCCI) has initiated a business-to-business (B2B) meeting between Chinese and Pakistani business representatives to explore investment, technology transfer, and joint venture opportunities in Pakistanâ€™s childrenâ€™s diaper manufacturing sector. The meeting brought together Chinese manufacturers, technology providers, investors and Pakistani businessmen to discuss the growing demand for baby diapers in Pakistan and opportunities to develop modern, locally manufactured products through Pakistan-China industrial cooperation. Adeel Munawar, Commercial Ambassador PCJCCI, said the childrenâ€™s diaper industry represents a promising area for investment and industrial collaboration, given Pakistanâ€™s large population, expanding consumer market, and increasing awareness among parents regarding child hygiene, comfort and health. He highlighted that baby diapers have become an important household hygiene product, particularly among urban families, while the market continues to have considerable room for local manufacturing. The Commercial Ambassador PCJCCI said the B2B engagement was aimed at converting market potential into practical business partnerships. He noted that Chinese companies could bring advanced machinery, production expertise and efficient manufacturing systems, while Pakistani partners could provide market knowledge, distribution networks and local business linkages. He stressed that joint ventures in baby diaper production could create employment and strengthen Pakistanâ€™s domestic manufacturing ecosystem. He emphasized the importance of developing a strong local supply chain for the diaper industry. He said that collaboration should not remain limited to finished-product manufacturing but should also cover packaging, absorbent materials, non-woven fabrics and other essential inputs. He added that an integrated supply chain could increase local value addition, improve cost competitiveness and provide sustainable opportunities for Pakistani manufacturers. Speaking on behalf of the Chinese business delegation, Ye Guan Quan, a Chinese business representative, expressed strong interest in exploring Pakistanâ€™s growing baby-care market and developing long-term partnerships with Pakistani companies. He said that Chinese manufacturers could offer modern diaper production technology, machinery and technical expertise, while Pakistani partners could provide valuable knowledge of local consumer preferences and market distribution. He added that we see significant potential for cooperation in Pakistanâ€™s childrenâ€™s diaper sector. â€œOur objective is not only to supply products but to explore local manufacturing and joint investment with Pakistani partners. Through cooperation, we can introduce modern production technology, improve product quality and develop diapers that are comfortable, safe and affordable for Pakistani families.â€ The participants also discussed potential joint ventures for establishing modern baby diaper manufacturing plants, with particular focus on production capacity, machinery, raw material availability, product quality, packaging, pricing, distribution networks and investment models. The meeting also explored opportunities to manufacture different categories of childrenâ€™s diapers, including newborn, infant and toddler diapers, catering to different age groups, sizes and consumer requirements. Copyright Business Recorder, 2026

Date: 2026-08-20

Details: Published August 20, 2026 Updated about 3 hours ago By Press Release KARACHI: HBL, in partnership with Burj Clean Energy Modaraba (â€˜BCEMâ€™) and Orient Energy Systems, has successfully completed the financing and signing of agreements for a 7.5 MW wind power project to supply green energy to Pakistan Cablesâ€™ factory in Nooriabad, Sindh. The Project represents a significant step towards accelerating renewable energy adoption within Pakistanâ€™s industrial sector while delivering long-term economic and environmental benefits. Under an Ijarah agreement, BCEM will develop, own and operate the project as lessor, with Pakistan Cables as lessee. OES has been appointed EPC contractor, using GOLDWIND turbine technology, and BCEM has secured project financing from Habib Bank Limited (HBL). With this step, Pakistan Cables continues to accelerate its efforts to meets its climate action goals while at the same time reducing operational costs. With an energy mix that already includes solar, wind energy will further reduce dependency on non-renewable energy sources. This would make Pakistan Cables the most renewable energy centric company in the cable industry in Pakistan and will continue to support its efforts to enhance its domestic and international footprint. BCEMâ€™s journey in the Wind Technology Space began with the commissioning of a 7.5 MW wind power plant at Power Cement Limited in Nooriabad, pioneering the use of wind power purchase under lease agreements for industrial clients in Pakistan. Building on this foundation, the Modaraba has continued to expand its clean energy portfolio, and its latest partnership with Pakistan Cables marks another step in bringing reliable, sustainable wind power to Pakistanâ€™s industrial sector. As EPC contractor, OES will manage engineering, procurement and construction, drawing on its experience delivering wind and solar installations across Pakistan. Its partnership with GOLDWIND, the turbinesâ€™ manufacturer, underpins the projectâ€™s performance and after-sales support. Speaking on the occasion, Nadeem Lodhi, Chief Executive Officer of Burj Clean Energy Modaraba, said: â€œWe are delighted to partner with Pakistan Cables Limited which is widely recognized as a bellwether name in Pakistanâ€™s engineering and cable manufacturing sector. Established in 1953, it serves as a market leader and a key economic barometer for industrial growth, construction activity, and the broader energy infrastructure of the country. We applaud the leadership of Pakistan Cables for their forward-looking strategy of managing energy costs while addressing ESG goals on emissions with the signing of 7.5 MW of dedicated wind power which BCEM will set up at their factory in Nooriabad on a BOOT basis. Our role focus on technical and financial engineering whereby the asset resides on our books thereby allowing our valued client to focus on their core business. We are grateful to HBL for the confidence shown in financing this project, and to Orient Energy Systems, whose execution capability and partnership with GOLDWIND give us confidence in this journeyâ€ Fahd K. Chinoy, Chief Executive Officer of Pakistan Cables Limited, said: â€œThis partnership is a significant step in our energy transition strategy. Securing 7.5 MW of dedicated wind power reduces our exposure to grid tariffs and fuel price volatility while ensuring a more stable, predictable power supply. It sets a strong precedent for how Pakistani industry can cut costs and emissions together, and we are proud to partner with BCEM and Orient Energy Systems to bring it to life.â€ HBL Corporate, Commercial & Investment Banking At HBL, we are committed to financing projects that strengthen Pakistanâ€™s industrial competitiveness while advancing the transition towards sustainable energy. Our support for this 7.5 MW wind power project reflects our focus on enabling clients to achieve long term operational efficiency, energy security, and environmental sustainability. We are pleased to partner with Pakistan Cables, Burj Clean Energy Modaraba and Orient Energy Systems in delivering a solution that creates lasting value for the economy, industry and the environment Nasim Ahmed, Chief Executive Officer of Orient Energy Systems, said: â€œThis project reflects the growing momentum toward renewable energy adoption in Pakistanâ€™s industrial sector. Through our collaboration with Pakistan Cables, we are bringing together Orient Energy Systemsâ€™ experience in wind energy and GOLDWINDâ€™s world-leading technology to deliver a reliable and sustainable energy solution. This partnership demonstrates the value of cross-sector collaboration in strengthening energy security, improving cost competitiveness, and supporting Pakistanâ€™s transition toward a more sustainable energy future.â€ Executives from all four organisations attended the signing ceremony held today in Karachi. Copyright Business Recorder, 2026

Date: 2026-08-20

Details: Published August 20, 2026 Updated about 3 hours ago By Press Release KARACHI: The Board of Directors of Soneri Bank Limited, in their 217th meeting held in Karachi on Wednesday, approved the Bankâ€™s financial statements of the half year ended 30 June 2026. The Bankâ€™s stable performance across all functional areas underscores its operational robustness and resilience that was achieved despite a challenging macroeconomic landscape driven by surging international energy prices, global supply chain disruptions, and domestic energy tariff adjustments. Against this backdrop and a shifting interest rate environment, the Bank successfully sustained its performance while executing planned capital expenditure to expand its branch footprint. The Bank posted a Profit Before Tax (PBT) of Rs 4.795 billion and a Profit After Tax (PAT) of Rs 2.396 billion for the period ended June 30, 2026, compared to Rs 6.685 billion and Rs 2.497 billion, respectively, in the prior period. Earnings Per Share (EPS) was recorded at Rs 2.1732 per share, as compared to Rs 2.2648 per share for the previous period. The stable bottom line demonstrates the Bankâ€™s ability to maintain steady shareholder returns despite economic stress and geopolitical challenges. Despite a challenging interest rate environment, the Bank maintained a robust gross revenue base. While Net Interest Income (NII) declined by 19.80 percent period-on-period by Rs 2.823 billion due to margin compression, this was effectively cushioned by an exceptional 50.96 percent surge in non-interest income, which reached Rs. 5.368 billion up from Rs. 3.556 billion last year. This strong performance in non-funded streams was driven by increase in foreign exchange income of Rs 0.722 billion, capital gains of Rs 1.017 billion, and fee and commission income of Rs 0.064 billion, underscoring the Bankâ€™s successful revenue diversification strategy. The Bankâ€™s investment portfolio increased to Rs 509.110 billion by period-end, reflecting a 6.23 percent growth over the previous yearâ€™s position of Rs 479.247 billion. Average volume of investments for the period also showed an upward trend, rising to Rs 501.123 billion compared to prior period of Rs 462.446 billion. Investment income, however declined to Rs 27.843 billion compared to prior period of Rs 31.185 billion. This contraction was primarily driven by a compression in net investment yields, which averaged 11.20 percent for the current period compared to 13.60% in the prior year. In line with the State Bank of Pakistanâ€™s downward policy rate revisions from last year, the Bankâ€™s loan book underwent gradual repricing. This led to a contraction in net yields on advances to 10.89%, compared to 11.86% in the prior period. Despite this yield compression, the Bank successfully expanded its lending activity, with average net advances growing to Rs 221.092 billion from Rs 199.055 billion last year. This volume growth effectively mitigated the margin drop, allowing total income from advances to rise marginally by 1.9 percent to Rs 11.936 billion, up from Rs 11.708 billion in the corresponding period. The Bankâ€™s deposit base stood at Rs 784.226 billion at period-end, reflecting a robust year-on-year growth of 13.8 percent as against the year-end 2025 position of Rs 689.106 billion. The portfolio demonstrated strong momentum in average volumes, which grew by Rs 84.934 billion as compared to the prior period. Notable improvements were achieved in the deposit mix, with the CASA ratio strengthening to 87.17 percent (December 2025: 81.86%) and the Current Account composition rising to 34.51 percent. This favourable shift, supported by a 13.35% growth in average current account volumes, successfully drove the cost of deposits down from 7.43 percent for the half year ended 30 June 2025 to 6.65 percent in the current period. The Bank remains committed to optimizing its funding mix and rationalizing costs while maintaining premium service standards. The Bankâ€™s borrowings were reported at Rs 12.095 billion as at June 30, 2026 versus Rs 61.644 billion as of year-end 2025, while overall costs during the current half-year decreased to 10.51 percent as against 10.70 percent for the comparative half-year. The Bankâ€™s period-end net IDR slightly decreased to 64.92 percent as against 69.55 percent as at year-end 2025. The Bankâ€™s cost of funds decreased to 6.68 percent for the period ended June 30, 2026, down from 7.44 percent in the prior period. This reduction directly aligns with the downward policy rate revisions by the State Bank of Pakistan. Non-Markup expenses were reported at Rs 13.195 billion for the period ended June 30, 2026 as against Rs 11.280 billion in the comparative period of 2025, indicating an increase of 16.98 percent, which coincides with elevated inflation levels during the period. However, this was in line with our expectations considering the Bankâ€™s branch expansion plan, under which we achieved the milestone of opening 110 branches since June 30, 2025 and as of June 30, 2026, the total number of our branches stands at 682 branches. The Board has given firm directions, and the management remains committed on practicing rigorous cost control measures to keep costs within strict budgets, and with the inflation now expected to be contained in the medium term, we expect good progress in this area as well. The Bank achieved a significant improvement in asset quality during the period ended June 30, 2026. Effective recovery initiatives resulted in the Non-Performing Loan (NPL) ratio declining to 2.48 percent, compared to 3.41 percent as of December 31, 2025. This favourable trend enabled a net reversal of Rs 1.186 billion in credit loss allowances, a significant increase from the Rs 0.151 billion net reversal recorded in the prior period. Despite this reversal, the Bank continued its prudent provisioning policy, strengthening the loan loss coverage ratio to 102.35 percent, compared to 96.77 percent as of December 31, 2025. Management remains vigilant in monitoring the portfolio to mitigate potential credit infection and maintain optimal coverage levels. The Bankâ€™s Capital Adequacy Ratio as at June 30, 2026 stands at 14.10 percent, while the Leverage Ratio is at 3.18 percent. The Bankâ€™s Liquidity Coverage Ratio and Net Stable Funding Ratios have been reported at 198.73 percent and 175.81 percent respectively, which are also comfortably above the regulatory requirements. Alhamdulillah, during the period under review, the Pakistan Credit Rating Agency (PACRA) has upgraded the Bankâ€™s long-term entity rating to â€˜AAâ€™ (Double A). This upgrade represents a significant milestone, moving up from the previous long-term rating of â€˜AA-â€™ (Double A minus). PACRA has also reaffirmed the short-term rating at the highest level of â€˜A1+â€™ (A One Plus), with a Stable Outlook. Furthermore, PACRA has upgraded the credit ratings of the Bankâ€™s unsecured, subordinated, and listed Term Finance Certificates (TFCâ€“3) issue of Rs 4 billion at â€˜AAâ€™ (Double A) [2025: â€˜A+â€™ (Single A plus)], and the unsecured, subordinated, rated, listed, perpetual and non-cumulative TFC issue of Rs 4 billion at â€˜A+â€™ (Single A plus) [2025: â€˜Aâ€™ (Single A)], both with a Stable Outlook. Copyright Business Recorder, 2026

Date: 2026-08-19

Details: Published August 19, 2026 Updated about 3 hours ago KARACHI: ABHI Bank reported a profit after tax of PKR 1.502 billion for the six months ended June 30, 2026, compared to PKR 1.019 billion for the full year ended December 31, 2025, meaning the Bank has already surpassed its entire 2025 profit in just six months. The Bankâ€™s profit after tax also increased significantly from PKR 200.2 million during the corresponding period last year. The improvement in profitability was supported by strong balance sheet expansion, higher earning assets, increased deposit mobilization, improved recoveries, and continued focus on risk management and operational discipline. The Bankâ€™s total assets crossed the PKR 100 billion milestone, reaching PKR 101.55 billion as of June 30, 2026, representing approximately 32% growth from PKR 76.80 billion on December 31, 2025. Gross advances increased to PKR 50.07 billion, compared to PKR 38.16 billion at year-end 2025. The Bankâ€™s funding base also recorded significant growth during the period, with deposits increasing to PKR 86.19 billion from PKR 69.09 billion on December 31, 2025, representing approximately 25% growth. The increase reflects continued deposit mobilization and strengthening of the Bankâ€™s customer franchise. The Bankâ€™s revenue profile strengthened significantly during the first half of 2026, with revenue increasing to PKR 10.52 billion from PKR 5.84 billion during the corresponding period of 2025, representing a robust 80.1% growth year-on-year. Notably, the revenue generated during the first six months of 2026 has already reached approximately 74% of the PKR 14.25 billion revenue recorded for the entire year of 2025, reflecting the strong momentum in the Bankâ€™s financial performance. Asset quality and credit risk management remained key areas of focus during the period. The Bankâ€™s capital position also improved materially during the first half of 2026. Shareholdersâ€™ equity increased to PKR 3.11 billion as of June 30, 2026, compared to a negative equity position of PKR 397 million at December 31, 2025. The improvement was driven by strong profitability together with the recognition of PKR 2.0 billion as Advance Against Issuance of Shares. With stronger profitability, a balance sheet exceeding PKR 100 billion, a growing deposit base, expanded lending portfolio, strengthened equity position, and continued investment in digital and operational capabilities, ABHI Microfinance Bank enters the second half of 2026 with a stronger foundation for sustainable growth. Copyright Business Recorder, 2026

Date: 2026-08-19

Details: Published August 19, 2026 Updated about 3 hours ago KARACHI: Bank Makramah Limited (BML) announced that its Board of Directors has approved a proposal for an additional Rs 10 billion equity investment by the Bankâ€™s Sponsor, Nasser Abdulla Hussain Lootah. The investment, to be made as an advance against equity, remains subject to the requisite regulatory and corporate approvals. The further sponsor investment is being exclusively arranged by His Excellency, demonstrating his strong confidence in the Bank, its turnaround journey and long-term potential. This continued backing provides the Bank with a stronger financial foundation and allows management to remain focused on accelerating its transformation, strengthening the business and pursuing sustainable long-term growth. Upon completion, His Excellencyâ€™s aggregate investment in the Bank will reach Rs 51 billion, reflecting a sustained and decisive commitment to the Bankâ€™s transformation and long-term growth. This journey began with the initial Rs 10 billion capital injection, which paved the way for the acquisition of a majority stake in April 2023. This was followed by a further Rs 5 billion investment, currently held as an advance against equity. The landmark merger with Global Haly Development Limited subsequently contributed Rs 26.467 billion to the Bankâ€™s capital base, alongside the integration of the high-value Creekside Property. With the proposed additional investment of PKR 10 billion, His Excellency is once again reinforcing his confidence in the Bank and strengthening its capital base to support its continued growth and future potential. The latest capital commitment further reinforces the Sponsorâ€™s sustained support for the Bankâ€™s recapitalisation, financial strengthening and transformation. It will provide BML with a stronger financial foundation as management continues to strengthen the business and pursue sustainable, long-term growth. The Sponsorâ€™s continued and increasing investment represents a strong vote of confidence in BMLâ€™s management, turnaround strategy and future development as a growing Islamic banking institution. Copyright Business Recorder, 2026

Date: 2026-08-19

Details: Published August 19, 2026 Updated about 3 hours ago FRANKFURT: Europeâ€™s benchmark STOXX 600 fell to a more than two-week low on Tuesday, as investors grappled with higher bond yields and renewed inflation concerns, while US President Donald Trumpâ€™s denial of talks with Iran added to geopolitical uncertainty. The pan-European STOXX 600 closed 0.69 percent lower at 651.90 points, and had its worst day in nearly a month. Global bond yields surged and hit multi-year highs on Tuesday as a stalemate in the Middle East, renewed inflation worries, and concerns over fiscal health spooked investors. Germanyâ€™s 10-year Bund yield rose more than 1 basis point to 3.2610 percent, its highest since April 2011. â€œThe selloff reflects more than just inflation expectations: real yields and term premia are rising as governments issue more debt, pension demand weakens, and private investors become more price-sensitive,â€ said Geoff Yu, senior EMEA market strategist at BNY. Higher government borrowing costs weighed on tech stocks, with elevated yields potentially lowering the present value of future profits. The sector led losses on the STOXX 600, falling 2.5 percent, as chipmaker Infineon and chip-equipment manufacturer Aixtron slid 7.6 percent and 8.8 percent, respectively. Meanwhile, the energy sector gained 0.4 percent as oil traded at a three-week high, with Iran signalling a more offensive stance and Trump denying talks with Tehran. Middle East uncertainty continues to cloud economic outlook for Europe, which relies heavily on imports to meet its energy needs. â€œMarkets are focused on whether Europe can replenish its gas storage at reasonable prices ahead of winter, with current inventory levels and costs remaining a key source of uncertainty,â€ said Gordon Kerr, European macro strategist at KBRA. Markets are also awaiting minutes from the Federal Reserveâ€™s July meeting, for clues on the central bankâ€™s monetary policy path. Separately, German investor morale rose more than expected to 34.2 points in August, the ZEW economic research institute said on Tuesday. Among individual movers, optical connectivity products maker Huber+Suhner plunged 11.4 percent following weaker-than-expected core profit and communications unit orders, putting the stock on track for its worst day since March 2019. H&M topped the benchmark, climbing 4.1 percent after an executive disclosed the purchase of 8,000 shares in the company.

Date: 2026-08-19

Details: Published August 19, 2026 Updated about 3 hours ago NEW YORK: Wall Streetâ€™s main indexes hit their lowest in two weeks on Tuesday, pressured by losses in heavyweight technology stocks, while fading hopes for a US-Iran peace deal sustained gains in oil prices and kept government bond yields at multi-year peaks. Chipmakers as well as other megacap and growth stocks declined as high government bond yields potentially lower the present value of future tech profits and increase corporate borrowing costs. The Philadelphia SE Semiconductor index fell 5.4 percent and is on pace to evaporate more than USD680 billion in market value, if losses hold. Data storage firms Sandisk and Western Digital, along with memory chipmaker Micron Technology were among the worst hit. The Roundhill Memory ETF slid 7.9 percent. Nvidia dropped 2.4 percent and Meta Platforms lost 3 percent. The S&P 500 Information Technology sector was the biggest drag, down 2.1 percent. The yield on the 30-year Treasury bond stood at its highest since 2007, while that on the benchmark 10-year maturity held near its highest since January 2025. Brent crude futures also gained 1.2 percent to around three-week highs, after Iranâ€™s threat to shift to a â€œfully offensiveâ€ military posture and Washington ruling out extending a ceasefire deal heightened concerns over a prolonged conflict. The S&P 500 Energy sector rose 1.5 percent and was a whisker away from hitting an all-time high. â€œWith geopolitical risks adding another layer of uncertainty, investors should brace for heightened volatility across equities, currencies, commodities and bonds,â€ said Lukman Otunuga, head of market research at FXTM. â€œRetail earnings and the Fed minutes could either reinforce the soft-landing story or expose cracks beneath the surface.â€ Minutes from the Federal Reserveâ€™s July meeting, due on Wednesday, could offer more clues about how the central bank is assessing the current environment. At 11:36 a.m. ET, the Dow Jones Industrial Average fell 112.50 points, or 0.22 percent, to 53,344.77. The S&P 500 lost 48.15 points, or 0.62 percent, to 7,696.91, while the Nasdaq Composite dropped 345.93 points, or 1.30 percent, to 26,298.98. Wall Streetâ€™s â€œfear gaugeâ€ hit an about two-week high, prompting investors to flock to healthcare and consumer staples stocks, which are traditionally considered defensive. Software stocks recovered after a bruising selloff earlier this year. Microsoft, Salesforce and Intuit were some of the best performers on the day. Shares of home-improvement retailer Home Depot inched up 0.6 percent after beating second-quarter sales estimates. Strong earnings from several companies, including some AI hyperscalers, had pushed the S&P 500 and the Dow to all-time highs earlier this month. Investors now see Nvidiaâ€™s quarterly report, due in the upcoming week, as the next test for the AI-driven momentum.

Date: 2026-08-18

Details: â€¢ MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.8% Published August 18, 2026 Updated less than a minute ago SINGAPORE: Oil prices crept higher and bond yields rose, blunting paltry gains for stocks at the start of Asian trading on Tuesday as a US-Iran truce expired and Tehran said it would shift to a â€œfully offensiveâ€ military posture. MSCIâ€™s broadest index of Asia-Pacific shares outside Japan was up 0.8%, buoyed by South Koreaâ€™s KOSPI rising more than 3% as the Seoul market returned after a holiday. The Nikkei 225 fell 0.3%, while S&P 500 e-mini futures were flat. The yield on the US 10-year Treasury bond was up 0.8 basis point at 4.728%. Its 30-year counterpart traded up â 0.6 basis point at 5.3146%, its highest in more than two decades. â€œTypically, moves above 4.65% for the U.S. 10-year have been followed by some soothing words from the Trump administration, typically centred on an imminent resolution to the war with Iran,â€ ING analysts wrote. â€œThis time, weâ€™re not hearing the same,â€ they added. â€œIn fact, the latest indications are for no imminent resolution as the shaky 60-day truce came to an end.â€ As the recent global selloff in bonds deepened, the yield on the 10-year Japanese government bond rose 2.5 basis points to 2.945%, a three-decade high. Overnight on Wall Street, â the S&P 500 slipped 0.5% while the Nasdaq Composite edged 0.3% lower as soft U.S. economic data, including an unexpected drop in retail sales, prompted markets to scale back bets on an imminent Federal Reserve interest rate move. â€œMarkets adopted a generally risk-off tone as President Trump reaffirmed he was not interested in â extending the truce with Iran, with renewed tensions in the Middle East pushing oil prices higher and complicating sentiment,â€ Westpac analysts wrote in a research note. The U.S. dollar index , which measures the greenbackâ€™s strength against â a basket of six currencies, traded around a two-month low of 99.527. Oil prices rose more than $2 on Monday as the stalemate in Iran refocused oil traders on global supply worries. Brent â crude futures edged up 0.2% to $91.06 a barrel as trading resumed in Asia. Gold was up 0.1% at $4,420.07, extending recent gains into a third consecutive day. In cryptocurrencies, bitcoin was up 0.1% at $64,398.48, while ether gained 0.3% to $1,911.40.

Date: 2026-08-18

Details: Published August 18, 2026 Updated about 3 hours ago HONG KONG: China and Hong Kong stocks jumped on Monday, led by technology shares as chipmakers rallied on the back of strong earnings, while consumption and liquor shares weakened. At market close, the Shanghai Composite index was up 1.4 percent at 3,982.65 points, a five-week high. Chinaâ€™s blue-chip CSI 300 index was up 1.6 percent. Tech sector led gains, with the start-up board ChiNext Composite index higher by 3.1 percent and Shanghaiâ€™s tech-focused STAR 50 index up 4.1 percent. The CSI Semiconductor Index rallied 5 percent and the AI Index added 3.3 percent. Memory chip maker CXMT surged 12 percent, while Shenzhen China Micro Semiconductor surged 16.8 percent after the company reported a nearly 100 percent jump in profit for the first half. Limiting gains, the CSI Liquor Index fell 2.7 percent, with market heavyweight Kweichow Moutai down 3.6 percent after a profit drop. The consumer staples sector weakened 2.4 percent. A slew of data on Monday showed Chinaâ€™s economy lost momentum at the start of the second half, with industrial output and retail sales slowing. This follows July bank loans data late last week that showed a record contraction as credit demand faltered. â€œThe prevailing market view is that the economy in July showed a structural pattern of resilient external demand but insufficient recovery in domestic demand, leaving broad-based market gains without fundamental support,â€ analysts at Nanhua Futures said in a note. The marketâ€™s pricing focus may shift to actual earnings performance, resulting in range-bound consolidation and rotation among individual sectors, they added. In Hong Kong, the benchmark Hang Seng Index was up 1.3 percent and the Hang Seng Tech Index added 1.6 percent. Around the region, shares drifted sideways as investors kept a wary eye on oil prices, which inched higher on Monday as US-Iran peace talks stalled. Iran called on the US to accept defeat on Saturday, while President Donald Trump blasted Tehran as â€œvery evilâ€ and told Americans to prepare for continued high fuel prices as a result of the war.

Date: 2026-08-18

Details: Published August 18, 2026 Updated about 3 hours ago FRANKFURT: European shares settled lower for a fourth straight session on Monday, as the earnings-fuelled rally cooled and the continuing stand-off between US and Iran dampened risk appetite. The pan-European STOXX 600 closed 0.22 percent lower at 656.41 points. With a strong European earnings season largely in the rear-view mirror and second-quarter profit expectations rising steadily, investors have shifted their focus back to macroeconomic and geopolitical developments for the next market catalyst. Fridayâ€™s soft US retail sales data reinforced expectations that the Federal Reserve will keep interest rates on hold next month, while money markets are pricing in roughly an 84 percent chance of a 25-basis-point European Central Bank rate hike in September, according to LSEG data. â€œWith US data softening while European data remaining relatively strong â€¦ the focus is increasingly shifting to central bank decisions in September,â€ said Andrea Cicione, head of research at TS Lombard. Supporting the longer term outlook, Goldman Sachs raised its 12-month target for the STOXX 600, forecasting the pan-European benchmark to reach 695 points from 660 previously, implying about 5.5 percent upside from current levels, citing resilient economic growth and strong corporate earnings. â€œWhat youâ€™re starting to see is a strong acceleration in earnings growth even beyond energy, which is no longer just a result of cost discipline, protecting margins, but increasingly the result of revenues picking up and operating leverage,â€ said Maximilian Kunkel, chief investment officer, global family and institutional wealth at UBS. Meanwhile, oil prices were firm with no signs of progress in talks between the United States and Iran. A senior Iranian official said that Tehran has decided to go on offensive due to the deadlock in efforts to end to the war. Among STOXX 600 sectors, personal and household goods slid 2.3 percent, while food and beverages also dropped 2.3 percent, with Diageo down 3.4 percent. The spirits maker has agreed to reformulate some of its drinks in India, two government sources told Reuters. The luxury stocks slipped 2 percent as Gucci parent Kering and LVMH MoÃ«t Hennessy Louis Vuitton lost 4.3 percent and 2.7 percent respectively.

Date: 2026-08-18

Details: Published August 18, 2026 Updated about 3 hours ago NEW YORK: The S&P 500 and the Dow inched lower on Monday as US-Iran tensions dented sentiment, while some technology stocks rose after the report of a strong revenue forecast from AI lab Anthropic. Tehran will escalate tensions in the Strait of Hormuz and the wider region if diplomacy with the United States fails, a senior Iranian official told Reuters, pointing to an Iranian policy shift relying on offense rather than defense. Brent crude futures gained about 0.3 percent, with the S&P 500 energy index 0.2 percent higher. â€œ(Investors) were telling themselves wars always come to an end. I donâ€™t think anyone was pricing in the fact that this could still be going as we approach the end of the summer,â€ said David Morrison, senior market analyst at Trade Nation. Meanwhile, Reuters reported on Friday that Anthropic, which is preparing for its IPO, forecast 2028 revenue of roughly USD190 billion to USD200 billion, according to two people familiar with the companyâ€™s financials. Chipmakers led gains among technology stocks. Western Digital and Sandisk rose 6.3 percent and 10 percent, respectively, making them the top performers on the benchmark index. Tech shares on the S&P 500 rose 0.6 percent, limiting losses elsewhere and boosting the tech-heavy Nasdaq. Markets will keep a close eye next week on results from chipmaker Nvidia, the worldâ€™s most valuable company, for signs the tech-driven momentum can last. Nvidiaâ€™s shares rose 1 percent. Danni Hewson, head of financial analysis at AJ Bell, said greater clarity on AI investments and the source of returns was allaying immediate fears of a â€œpotential AI boom then bustâ€. At 11:32 a.m. ET, the Dow Jones Industrial Average fell 198.47 points, or 0.37 percent, to 53,533.94, the S&P 500 lost 10.51 points, or 0.13 percent, to 7,775.25, and the Nasdaq Composite rose 32.38 points, or 0.12 percent, to 26,761.55. Declines in Microsoft and Sherwin-Williams weighed on the Dow. Concerns over the payoff from AI investments battered chip stocks recently, but robust quarterly results and forecasts signaling resilient demand have helped push the Nasdaq to within 1.5 percent of its all-time high. The S&P 500 closed at a record peak on Thursday after a batch of soft inflation data helped traders dial back the odds of an interest-rate hike by the US Federal Reserve at its September meeting.

Date: 2026-08-18

Details: Published August 18, 2026 Updated about 3 hours ago DUBAI: Most Gulf stock markets fell on Monday as stalled US-Iran diplomacy revived fears of a prolonged conflict, while reduced traffic through the Strait of Hormuz added to concerns over energy supplies and trade flows. Tensions remained high after Iran on Saturday urged Washington to â€œaccept defeat,â€ while US President Donald Trump called Tehran â€œvery evilâ€ and urged Americans to prepare for sustained high fuel prices. With no meaningful progress towards peace talks, shipping through the strategic waterway remained severely disrupted. Trump also said he would soon declare the Strait of Hormuz a US territory. Saudi Arabiaâ€™s benchmark stock index eased 0.1 percent, dragged down by a 0.5 percent fall in Al Rajhi Bank and a 0.8 percent decline in oil major Saudi Aramco. The kingdomâ€™s Civil Defense said on Sunday that the danger in Jazan province had passed, according to a post on X. It had earlier issued an alert warning residents of a potential danger in the area. In Qatar, the benchmark stock index declined 1.5 percent, with almost all constituents trading in negative territory. Qatar Islamic Bank retreated 2.3 percent. Shipping activity through the strait slowed markedly over the weekend in the wake of last weekâ€™s tanker attacks. Kpler ship-tracking data showed that only five commodity vessels transited the waterway on Saturday, while none were recorded on Sunday, compared with 31 during the previous weekend. Dubaiâ€™s main share index fell 0.5 percent, with top lender Emirates NBD losing 1.7 percent. The lack of diplomatic progress and persistent regional uncertainty kept investors on edge. Continued shipping disruptions and security concerns are likely to pressure sentiment, though resilient domestic fundamentals and a solid earnings season are providing support, said Joseph Dahrieh, managing Director at Tickmill. Markets are likely to remain range-bound and sensitive to regional headlines. Progress on diplomacy or smoother shipping flows could lift sentiment, while strong local fundamentals should limit downside.

Date: 2026-08-18

Details: Published August 18, 2026 Updated about 3 hours ago KARACHI: President of the Korangi Association of Trade and Industry (KATI) Muhammad Ikram Rajput has urged the government to review petroleum pricing mechanism and introduce a transparent and predictable system under which prices are determined either on a monthly basis or every 15 days. Such a mechanism, he said, would enable industrialists, traders and transporters to better estimate their costs and make more effective business decisions. Welcoming the goods transporters decision to defer the nationwide strike for 40 days following successful negotiations between government representatives and transporters, describing it as an important and positive development for the national economy, industry, trade and continuity of the supply chain, Rajput extended special appreciation to the Prime Minister, saying the prime minister had played an effective role in addressing the longstanding issues of the transport sector and helping resolve the current crisis. The KATI president said the nine-day strike by goods transporters had severely disrupted industrial and commercial activities, exports, imports, supply chains and overall business operations across the country. â€œGoods transportation is a fundamental pillar of economic activity in Pakistan. When the wheels of transportation stop, the impact is felt across the entire economy. Therefore, efforts to end the disruption through negotiations are highly commendable,â€ he said. Rajput said the business and industrial community, along with transporters across the country, also had serious reservations about the existing mechanism for determining petroleum product prices. He said frequent and unpredictable changes in petroleum prices increased production, transportation and business costs while making long-term planning difficult for industry and trade. The KATI president said that the government must ensure timely implementation of all commitments and decisions agreed upon during the negotiations so that the transportersâ€™ issues could be resolved on a permanent basis and similar nationwide strikes or supply chain disruptions could be avoided in the future. Rajput said Pakistan could not afford prolonged economic disruptions amid prevailing regional and global circumstances. He urged all stakeholders to fulfil their responsibilities while keeping the national interest above all other considerations. Copyright Business Recorder, 2026

Date: 2026-08-18

Details: Published August 18, 2026 Updated 28 minutes ago LAHORE: Director General Customs Valuation Irfan Wahid has said that ensuring fair valuation of imported goods is the responsibility of customs, and fairness, transparency and impartiality are the key principles in valuation rulings. The existing valuation system is being improved and modernized so that valuation rulings can be linked with international prices, discretionary elements can be minimized, and greater price stability can be provided to businesses, he added. He was speaking to the business community during his visit to the Lahore Chamber of Commerce and Industry (LCCI). LCCI President Faheem-ur-Rehman Saigol welcomed him. Senior Vice President Tanveer Ahmed Sheikh, Executive Committee members Karamat Ali Awan, Firdous Nisar and Amir Ali, Director Valuation Lahore Saima Aftab, Additional Director Customs Lahore Palwasha Syed, along with other LCCI office-bearers and members, were also present. Welcoming DG Customs Valuation, LCCI President Faheem-ur-Rehman Saigol said the Directorate General of Customs Valuation plays an important role in the countryâ€™s trade, imports and tax system. Accurate, fair and transparent customs valuation not only protects national revenue but also promotes legal trade. He, however, expressed concerns over Valuation Ruling No. 2105/2026 concerning mobile phone accessories. He said the customs value of some mobile phone accessories had increased by more than 100 percent compared with the previous Valuation Ruling No. 1887/2024. This has significantly increased customs duties and other taxes and has badly affected the business costs of importers. The LCCI president further said that some mobile accessory brands included in the new ruling are also being manufactured locally. He requested that locally manufactured products and brands should be properly identified and necessary changes should be made in the ruling. He also requested a fresh review of Valuation Ruling No. 2105/2026. Faheem also raised the issue of Valuation Ruling No. 2094/2026 concerning perfumes, cosmetics, deodorants and related products. He said that, according to the business community, customs values of a large number of well-known international brands have been fixed considerably higher than prevailing international market prices and actual import prices. Speaking about the valuation of perfumes and cosmetics, Irfan Wahid said that the matter had already been reviewed and a number of review applications had been filed. He said that many people had also participated in the hearings and presented their concerns. He said that local industry and importers may have their own interests and, at times, these interests may conflict. However, the basic principles in determining values should be fairness and impartiality. The Directorate General and officers issuing valuation rulings always try to ensure that the values determined are fair. He said if there is any issue or mistake in a valuation ruling, businesses have the right to raise the matter through the review process. A further appeal mechanism is also available. According to Irfan, around 50 items are currently being valued on the basis of international publications and global market prices, and efforts are being made to increase this number. He said this would help reduce discretion, uncertainty and unexpected changes in valuation. He said international prices are mostly available for raw materials and basic commodities, while direct international prices are not always available for finished products or products with different specifications. Therefore, research reports, market analysis and other studies are needed to ensure that valuations are not only fair but also reflect actual market conditions. Regarding mobile accessories, Irfan said the issue had also been discussed in the pre-meeting held before the main session. He said the values of some items had been reduced while the values of others remained unchanged. However, the main concern of the business community was the way different brands had been placed in different categories. Copyright Business Recorder, 2026

Date: 2026-08-17

Details: Published August 17, 2026 Updated about 4 hours ago KARACHI: Business in the cotton and textile sectors has come to a near standstill as a prolonged strike by goods transporters continues to disrupt trade across the country. Traders report that while prices in the limited cotton transactions that did take place remained stable, overall trading volume has shrunk to almost nothing. The ginning and textile industries are said to be gripped by growing anxiety over the standoff, with trade and industrial bodies jointly appealing to the authorities to bring the strike to a swift end. Shamlal Manglani, Chairman of the Pakistan Cotton Ginners Association (PCGA), said the crisis has been compounded by what he described as excessive government taxation, which has forced ginning factories to shut down in large numbers. He noted that of the twelve hundred ginning factories once operating nationwide, only four hundred remain in business, with the sector continuing to contract by the day. Khurram Mukhtar, Chairman of the Pakistan Textile Exporters Association (PTEA), warned that the transportersâ€™ extended wheel-jam strike has left export goods worth billions of dollars stranded in mills and factories, raising fears that buyers abroad may begin cancelling contracts if shipments are delayed much longer. In response to the disruption, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has called on authorities to waive demurrage charges on goods held up as a result of the strike. Separately, the dispute over the Karachi Cotton Associationâ€™s premises remains unresolved. The Sindh High Court had granted the association temporary relief in an order issued on June 17, permitting it to resume business activities inside the building. Yet, more than sixty days after that ruling, the association says it has still been denied access to the premises. The cotton business in the local market is suffering badly as a prolonged transport strike and nationwide blockade continues to disrupt supply chains, leaving both ginners and textile mills deeply concerned. While limited cotton deliveries are still being made in parts of Sindh, the rest of the country remains gripped by a severe transport shutdown. According to market sources, deals for nearly 60,000 bales of cotton have already been finalized in Sindh, but delivery of this cotton remains stalled because freight transport has come to a complete halt. Meanwhile, Khurram Mukhtar, Chairman of the Textile Exporters Association, revealed that goods worth 50,000 dollars meant for export have been stuck in transit for the past five days as a direct result of the strike. Talks between transporters and the government have repeatedly broken down. Federal Minister Haleem Khan has signalled that fresh negotiations are scheduled for Monday, August 17, suggesting the strike is likely to persist until at least that date. In terms of prices, cotton in Sindh traded between 18,200 and 18,300 rupees per maund, with phutti (seed cotton) selling at 7,000 to 8,000 rupees per 40 kilograms. In Punjab, cotton prices ranged from 18,500 to 19,000 rupees, while phutti sold between 8,400 and 9,400 rupees. In Balochistan, cotton prices stood at 18,300 to 18,500 rupees, with phutti trading between 8,400 and 9,200 rupees. Prices of cottonseed cake, cottonseed, and cottonseed oil remained stable throughout the week. The Spot Rate Committee of the Karachi Cotton Association maintained the spot rate steady at 18,300 rupees per maund. Chairman of the Karachi Cotton Brokers Forum, Naseem Usman, has said that international cotton prices are showing an upward trend, with New York cotton futures currently trading between 84 and 88 US cents per pound. According to the US Department of Agricultureâ€™s (USDA) weekly export and sales report, a total of 905,000 bales were sold for the 2026-27 season. Vietnam emerged as the top buyer, purchasing 222,500 bales, followed by Pakistan in second place with 164,200 bales, while Bangladesh secured third position with 81,100 bales. On the export front, a total of 67,900 bales were shipped during the period. Vietnam once again led the way, importing 23,800 bales, followed by India, which imported 15,800 bales, while Pakistan came in third with 11,500 bales imported. Shamlal Manglani, Chairman of the Pakistan Cotton Ginners Association (PCGA), used a childhood memory from the film Sholay to describe the ginning industryâ€™s relationship with the Federal Board of Revenue (FBR), while addressing a dinner held in honour of the FBR chairman. Recalling the iconic villain Gabbar from the film, Manglani said that in his village, mothers would warn disobedient children at bedtime that Gabbar would come if they did not sleep. He said the ginning industry today lives under a similar shadow of fear, constantly worried that the FBRâ€™s enforcement measures could strike at any time. Manglani said that rather than fostering facilitation and confidence among the business community, the FBRâ€™s policies and tax procedures have instead bred an atmosphere of apprehension and uncertainty. He called on the FBR chairman to reform the tax system along business-friendly lines and to design policies that support industrial growth, protect commercial activity, and strengthen the foundations of the national economy. The PCGA chairman also drew attention to the challenges confronting the cotton industry, stressing the need for urgent and effective government intervention to prevent the sector from slipping further into crisis. The Pakistan Hosiery Manufacturers and Exporters Association (PHMA) has voiced serious concern over the ongoing transportersâ€™ strike, warning that disruptions to the movement of goods are creating severe difficulties for exporters and posing a grave threat to the countryâ€™s export supply chain. PHMA Southern Zone Chairman Faisal Irshad Sheikh said uninterrupted movement of export cargo is critical to Pakistanâ€™s international trade, particularly for the textile and garment sector. He noted that export shipments are bound by fixed vessel schedules, terminal cut-off times, and strict delivery commitments to international buyers, and that any disruption to transportation results in significant financial losses while eroding Pakistanâ€™s export competitiveness. Separately, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Atif Ikram Sheikh called on the Ministry of Maritime Affairs â€” particularly port authorities and terminal operators â€” to immediately provide financial relief to the business community by granting a complete waiver of demurrage and detention charges, in order to offset the mounting losses already incurred. He expressed deep concern over the deepening crisis nationwide, pointing out that the wheel-jam strike by transporters, now in its tenth day, has yet to see a peaceful resolution of grievances. Sheikh stressed that the prolonged strike is inflicting severe damage on the national economy, with cargo handling operations at the ports having come to a near standstill. As a direct consequence, imported goods remain stranded at the ports, and the timely delivery of key export orders has become practically impossible. Copyright Business Recorder, 2026

Date: 2026-08-17

Details: â€¢ On Monday, MSCI's broadest index of Asia-Pacific shares outside Japan was flat Published August 17, 2026 Updated about an hour ago SYDNEY: Asian shares drifted sideways on Monday while investors kept a wary eye on oil prices, which notched sizeable gains last week as the lack of progress towards ending the Iran war kept inflation risks tilted to the upside. Progress towards peace talks and oil tanker traffic through the strategic Strait of Hormuz remained halted. Iran on Saturday called on the US to accept defeat, while President Donald Trump urged Americans to accept higher gasoline prices while the conflict continues. At least 11 people were killed in Israeli strikes in southern Lebanon on Saturday, the Lebanese health ministry said, some of the deadliest in the weeks since the country agreed to a US-mediated peace framework with neighbouring Israel. Brent crude was steady at $88.50 a barrel after rising 6% last week, while US crude slipped 0.3% to $82.12 a barrel, having gained 5.4% last week. â€œWhile there is still no resolution to the Iran/Hormuz impasse, our base case remains that oil prices â will stay in a $70-$100 range with Iran preventing it going lower and the US moving to try and calm things down whenever it gets above $100,â€ Shane Oliver, chief economist at AMP, said in a note. â€œThe risk remains that there will be no sustainable peace deal, the flow of oil out of the Middle East remains down 10%-15% on normal levels and that we will have to face higher oil prices as reserves run down.â€ On Monday, MSCIâ€™s broadest index of Asia-Pacific shares outside Japan was flat, while Japanâ€™s Nikkei edged 0.4% higher. Australiaâ€™s resources-heavy shares slipped 0.3%. South Koreaâ€™s stock markets are closed on Monday for a public holiday. Trump has instructed the Pentagon to substantially reduce joint military exercises with the country. All eyes are on the release of Chinaâ€™s activity data for July on Monday after its exports boomed on robust global AI demand to support the worldâ€™s second largest economy. Forecasts â are centered on a slowdown in industrial output growth to 4.8%, from 5.3% previously, while retail sales likely rose 1.5%. For Europe, EUROSTOXX 50 futures rose 0.2%. S&P 500 futures gained 0.1%, having hit a record last week, while Nasdaq futures firmed 0.2%. The bullish run in stocks has been driven by diminishing risk that the Federal Reserve will not raise interest rates next month, which is now seen as a 69% probability event after a slew of soft data. US retail sales posted the first â decline in nine months in July and consumer sentiment soured by more than expected, adding to soft inflation readings that took out the impetus for the Fed to hike immediately. The main data point this week is the August S&P Purchasing Managersâ€™ Indices (PMIs) to see if the mid-year acceleration in U.S. business activity would be sustained. â Earnings are lighter this week but include Home Depot, Target, Walmart as investors scrutinise the strength of US consumers. In bond markets, U.S. Treasury yields slipped on Monday after finishing last week mixed. The two-year U.S. Treasury yield fell 2 basis points to 4.156%, having fallen 3 basis points last â week to touch a seven-week low of 4.0977%. Ten-year yields slipped 1 basis point to 4.684%, after rising 4 basis points last week. The soft run of data has weighed on the U.S. dollar, with the euro up 0.1% at $1.1578, just off a two-month peak of $1.1585. The dollar slipped 0.1% on the yen to 159.15 . In commodity markets, gold held at $4,381 an ounce , having climbed 0.8% last week.

Date: 2026-08-17

Details: Published August 17, 2026 Updated about 4 hours ago NEW YORK: Investors head into next week weighing familiar concerns over interest rates, inflation and geopolitical tensions against another robust earnings season that continues to keep stocks supported. With little fresh guidance from policymakers and uncertainty brewing over the US Federal Reserveâ€™s next move, many investors are increasingly looking to corporate earnings â€” fueled in part by spending on AI infrastructure â€” to validate bullish assumptions and offset macroeconomic risks. â€œThe primary thing is going to continue to be the Federal Reserve,â€ said Shawn Snyder, economic strategist at Potomac Fund Management. He sees the August 27 to 29 Jackson Hole symposium as the next major opportunity for policymakers to provide clarity on how they are interpreting inflation and growth. â€œIf you canâ€™t look to the Fed for guidance, then you have to increasingly look to earnings for guidance.â€ For investors like Snyder, the focus is less on a specific rate signal and more on whether policymakers can articulate a credible framework for navigating inflation and growth after bouts of mixed messaging. That uncertainty has kept markets closely focused on real Treasury yields â€” returns adjusted for inflation â€” a key driver of asset prices. Rising yields can pressure technology stocks and other long-duration assets by increasing financing costs. The dynamic is particularly important for AI-related companies and hyperscalers whose shares have been among the marketâ€™s biggest drivers this year. The S&P 500 hit a record high on Thursday as technology shares climbed and falling oil prices boosted risk appetite after a softer-than-expected US producer price report. Treasury yields also fell as markets pared back rate-hike expectations next month. Stocks and the S&P 500 information technology index have notched modest gains this week. Even so, investors remain alert to signs inflation could reaccelerate. Elevated energy prices and stalled US-Iran talks have raised concerns that oil markets could jolt higher, potentially adding pressure to consumer prices and bond yields. For now, however, strong corporate results have helped contain volatility. About 85 percent of S&P 500 companies reporting have beaten earnings estimates, with profits up 32.7 percent excluding mark-to-market gains at Alphabet and Amazon, according to LSEG data. Earnings results from Walmart and chipmaker Analog Devices will offer fresh clues into the health of the US consumer and broader economy. â€œNot only have we seen earnings beats and revenue beats so far, weâ€™re also seeing a lot of upside guidance as well and limited downside guidance from companies. Theyâ€™re the ones telling us, â€˜hey, the party is still onâ€™,â€ said Andy Pratt, director of investment strategy at Burney Company. â€œWhen you look at what are the things driving inflation right now, theyâ€™re â€¦ one-time shocks rather than something more persistent.â€ Earnings strength has been especially notable among companies tied to AI-related infrastructure spending, a theme investors expect to remain front and center in coming weeks. For Chris Grisanti, chief market strategist at MAI Capital Management, hyperscaler spending plans are among the most important developments to watch. Recent earnings reports, he said, have increasingly clarified which companies stand to benefit most from the AI boom. Big Techâ€™s AI spending is set to rise past USD700 billion this year from USD400 billion in 2025, and the scale of those investments has fueled questions about whether hyperscalers can generate sufficient returns to justify the massive capital outlay. Yet, Grisanti dismissed concerns that those companies are overextending themselves financially, arguing their balance sheets remain among the strongest in corporate America and that aggressive investment reflects strong demand. â€œIf you were running that business, you would beg, borrow, and steal to get more money to put into that business,â€ he said, referring to some of the fast-growing cloud businesses. Still, investors acknowledge that oil prices and geopolitical developments could yet complicate the inflation and interest rate outlook. But after another earnings season marked by upbeat guidance and heavy AI investment, many see corporate America as the strongest current defense against those risks. â€œItâ€™s a nice time to be an equity investor because earnings trump all the other problems,â€ said Grisanti. â€œI think that will become clear as the second half (unfolds).â€

Date: 2026-08-17

Details: Published August 17, 2026 Updated about 4 hours ago LONDON: Londonâ€™s FTSE 100 closed lower on Friday as miners retreated alongside a dip in copper prices, though software and data companies rebounded after the report of a large deal in the sector. The blue-chip FTSE 100 dipped 0.2 percent to 10,750.11 points to register its first weekly decline since early July. The midcap FTSE 250 edged up 0.1 percent to 24,867.42 points, ending the week largely flat. Shares of miner Antofagasta dropped almost 4.6 percent, down sharply for the second consecutive day after its production outlook disappointed on Thursday and copper prices fell after a recent rally. The FTSE 350 industrial metal and mining index registered a 4.1 percent drop this week, marking its weakest weekly performance since late June. Among gainers, shares of Sage Group, Experian and RELX climbed 1.4 percent to 4.4 percent, respectively, after Reuters reported private equity firm Silver Lake was in talks to acquire US software firm Workday, lifting the sector. Global stocks traded just below record highs as benign US inflation data this week tempered expectations of Federal Reserve interest rate hikes this year. Still, a lack of progress towards a lasting peace deal between the United States and Iran has weighed on sentiment and kept crude prices on track for weekly gains. Transit through the Strait of Hormuz appeared to grind to a near standstill after two more ships were attacked there and the United States said it could maintain a naval blockade of Iran indefinitely. Bank of England Chief Economist Huw Pill told the Wall Street Journal that stronger-than-expected British economic growth figures reinforced the case for higher borrowing costs to bring inflation back to target, after data showed a surprise 0.3 percent rise in the UKâ€™s gross domestic product in June. Traders expect at least one 25-basis-point rate hike from the BoE by the end of this year, according to LSEG-compiled data. Ladbrokes owner Entain rose 2.1 percent as it beat first-half profit expectations, while identity technology company GB Group sank nearly 31 percent, its steepest one-day fall ever,after cutting its annual revenue growth forecast.

Date: 2026-08-17

Details: â€¢ Brent crude futures were unchanged at $88.55 Published August 17, 2026 Updated about an hour ago NEW DELHI/SINGAPORE: Oil prices were mostly steady on Monday, maintaining gains made last week, as prospects for a lasting US-Iran peace deal appear increasingly remote and fears of supply disruptions in the Strait of Hormuz are ever present. Brent crude futures were unchanged at $88.55 by 0128 GMT, while US West Texas Intermediate crude futures â slipped 14 cents to $82.26 a barrel. Both contracts gained more than 5% last week following attacks on tankers operated by Abu Dhabi National Oil Company in the Hormuz strait and on a Saudi Aramco refinery. Over the weekend, Iranian Foreign Minister Abbas Araqchi said Iran had not decided to resume talks with the US while US President Donald Trump urged Americans to accept slightly higher gasoline prices while the conflict continues. Global gas demand to fall 0.5pc as tighter supply raises prices: IEA â€œOil prices have now rebounded almost completely from the lows seen in early August, as hopes for a more permanent resolution between the â US and Iran have faded and geopolitical risk premiums have returned to the market,â€ said Priyanka Sachdeva, head of market insights for Phillip Nova in Singapore. â€œHowever, I see limited upside from here unless we get clear evidence of renewed aggression in the Strait of Hormuz, particularly material damage â to tankers or oil infrastructure,â€ she said. Shipping through the Strait of Hormuz slowed over the weekend, data showed on Monday, following attacks on tankers. Five commodity vessels transited the strait on Saturday, with none â registered for Sunday, shiptracking data from Kpler showed, versus 31 for the prior weekend. The United Arab Emirates accused Iran of attacking a third vessel operated by ADNOC that was â transiting the strait on Friday, the Emirati state news agency WAM reported, after blaming it for two other incidents involving ADNOC vessels in the strait on Thursday evening.

Date: 2026-08-13

Details: Written by Faisal Shahnawaz in Taxation FBR withholds two increments from a Preventive Officer after undeclared goods were found in a consignment cleared following a detailed examination. KARACHI: The Federal Board of Revenue (FBR) has imposed a financial and career penalty on a Preventive Officer for negligence in examining a customs declaration after a subsequent inspection uncovered substantial quantities of undeclared goods. The disciplinary action was taken against Mubashir Ali, Preventive Officer (BS-16), Collectorate of Customs Appraisement (West), Karachi, who had been suspended in connection with disciplinary proceedings involving allegations of inefficiency, misconduct and corruption. The officer was suspended through an FBR notification dated December 17, 2025. According to the disciplinary order, an inquiry was initiated through an Order of Inquiry, Charge Sheet and Statement of Allegations issued on January 15, 2026. Asdaq Afzal Sensera, PCS/BS-20, was appointed as the Inquiry Officer. The Inquiry Officer submitted his report on April 14, 2026, concluding that the charge of inefficiency against the officer had been established and initially recommending the minor penalty of censure. Undeclared goods discovered in consignment The case centred on GD No. KAPW-HC-81856-05-11-2025, which had been assigned to the officer for examination through the WeBOC Risk Management System (RMS) under the red channel for detailed scrutiny. According to the FBR, the officer failed to detect concealment, misdeclaration of description and quantity, and undeclared high-value items while preparing his examination report. A subsequent detailed re-examination of the consignment uncovered 24,000 GMB-brand universal joints originating from Japan, along with refurbished laptops and auto parts that had not been declared in the Goods Declaration (GD). The FBR concluded that the officer had failed to carry out the required detailed scrutiny and thorough examination of the container. Officer cites heavy workload During the disciplinary proceedings, Mubashir Ali denied any malicious or wilful intent. He maintained that the consignment contained different types of bearings and argued that the importer had deliberately concealed the goods. The officer also cited a heavy backlog of containers awaiting examination, saying the concealment could not be detected under the circumstances. He maintained that he had conducted the examination to the best of his ability and without any mala fide intention. The FBR authority, however, rejected the explanation, observing that workload or a backlog of containers could not justify examining a consignment hastily without the required level of care and scrutiny. Misconduct and corruption charges not established After reviewing the inquiry report, show-cause notice, the officerâ€™s reply, personal hearing proceedings and submissions from both sides, the Member (Admn/HR), FBR, found no evidence establishing wilful or malicious intent. Consequently, the charges of misconduct and corruption were not established during the inquiry. However, the authority found the charge of inefficiency and negligence to be proven, as the officer had failed to conduct a sufficiently detailed examination to detect the concealed goods. The authority also determined that the censure recommended by the Inquiry Officer was too lenient given the nature of the negligence. Two increments withheld for two years The FBR consequently imposed the minor penalty of withholding two increments for two years without cumulative effect on Mubashir Ali. The penalty was imposed with immediate effect under Rule 4(2)(b) read with Rule 16(7)(b) of the Civil Servants (Efficiency & Discipline) Rules, 2020. The officer was also reinstated into government service. His period of suspension from December 17, 2025 until the date of the order will be treated as leave, subject to the applicable provisions of the Revised Leave Rules, 1980. In addition, the FBR ordered that the officerâ€™s performance allowance be stopped for six months from the date of the penalty. He will be required to appear afresh after completion of the six-month period. Mubashir Ali has the right to appeal against the order within 30 days of its communication under the Civil Servants (Appeals) Rules, 1977.

Date: 2026-08-13

Details: Written by Hamza Shahnawaz in Taxation Export proceeds will face a 1.25% withholding tax, while PSEB-registered IT exporters will benefit from a lower 0.25% rate. ISLAMABAD: The Federal Board of Revenue (FBR) has issued the withholding tax card for exports for Tax Year (TY) 2027, prescribing tax deduction rates under Sections 154 and 154A of the Income Tax Ordinance, 2001. Under Section 154, the withholding tax rate on export proceeds has been set at 1.25%. The same rate applies to transactions covered under sub-sections (3), (3A), (3B) and (3C). The rates have been specified under Division-IV of Part-III of the First Schedule, read with Rule 10(c) of the Tenth Schedule of the Income Tax Ordinance, 2001. FBR sets rates for export of services The FBR has also prescribed withholding tax rates under Section 154A for the export of services. For tax years 2024 through 2029, export proceeds earned from computer software, IT services and IT-enabled services by persons registered with the Pakistan Software Export Board (PSEB) will attract withholding tax at 0.25%. For exports of services falling under any other category, the applicable withholding tax rate has been set at 1%. These rates fall under Division-IVA of Part-III of the First Schedule, read with Rule 10(ca) of the Tenth Schedule. TY2027 export withholding tax rates The updated withholding tax card sets out separate rates for exports of goods and services under the Income Tax Ordinance. â€¢ Exports under Section 154(1): 1.25% â€¢ Exports under Sections 154(3), 154(3A), 154(3B) and 154(3C): 1.25% â€¢ Computer software, IT and IT-enabled services by PSEB-registered persons: 0.25% â€¢ Other exports of services: 1% The updated tax card provides exporters and withholding agents with the applicable withholding tax rates for TY2027, while maintaining separate treatment for export proceeds from goods and services. The lower rate for PSEB-registered IT and IT-enabled service exporters provides a preferential tax treatment for a key segment of Pakistanâ€™s services exports, while the standard rates continue to apply to other export transactions.

Date: 2026-08-13

Details: Written by Hamza Shahnawaz in Taxation New TY2027 rates under Section 153 impose substantially higher withholding tax on non-ATL taxpayers across goods, services, contracts and e-commerce. ISLAMABAD: The Federal Board of Revenue (FBR) has updated its withholding tax card for Tax Year (TY) 2027, setting out tax deduction rates applicable to payments for goods, services and contracts under Section 153 of the Income Tax Ordinance, 2001. The updated rates distinguish between taxpayers on the Active Taxpayers List (ATL) and non-ATL persons, with non-ATL taxpayers generally facing withholding tax rates twice as high as those applicable to ATL taxpayers. Withholding tax on goods Under the updated withholding tax card, the rate on the sale of rice, cotton seed and edible oils has been set at 1.5% for ATL taxpayers, compared with 3% for non-ATL taxpayers. For companies engaged in toll manufacturing, withholding tax on supplies will be deducted at 9% for ATL taxpayers and 18% for non-ATL taxpayers. For companies other than toll manufacturers, the applicable rates are 5% and 10%, respectively. For persons other than companies, supplies involving toll manufacturing will attract withholding tax at 11% for ATL taxpayers and 22% for non-ATL taxpayers. Supplies other than toll manufacturing will be subject to rates of 5.5% and 11%, respectively. Withholding tax on services The FBR has set the withholding tax rate for certain services at 7% for ATL taxpayers and 14% for non-ATL taxpayers. For IT and IT-enabled services as defined under Section 2 of the Income Tax Ordinance, the applicable rates are 4% for ATL taxpayers and 8% for non-ATL taxpayers. Independent professionals, including doctors, lawyers, architects, accountants and software engineers or developers working independently, will face withholding tax at 15% of the gross amount payable for ATL taxpayers and 30% for non-ATL taxpayers. Payments by persons to electronic and print media for advertising services will attract withholding tax at 1.5% for ATL taxpayers and 3% for non-ATL taxpayers. For companies providing terminal and port operating services, the rates have been prescribed at 12% for ATL taxpayers and 24% for non-ATL taxpayers. Other services not covered by the specified categories will be subject to withholding tax at 14% of the gross amount payable for ATL taxpayers and 28% for non-ATL taxpayers. Contract payments For payments to sportspersons, the withholding tax rate has been set at 15% for ATL taxpayers and 30% for non-ATL taxpayers. The rate applicable to contracts with companies is 7.5% for ATL taxpayers and 15% for non-ATL taxpayers. In other cases, contract payments will attract withholding tax at 8% for ATL taxpayers and 16% for non-ATL taxpayers. Export-related services The FBR has prescribed a relatively lower withholding tax rate of 1% for ATL taxpayers and 2% for non-ATL taxpayers on payments for rendering or providing specified services to exporters or export houses. The lower rates are intended to apply to qualifying export-related services under the relevant provisions of the withholding tax framework. E-commerce payments The updated TY2027 withholding tax card also covers payments for digitally ordered goods and services through e-commerce platforms, including websites. Where payments are made through digital means or banking channels by a payment intermediary, the withholding tax rate is 1% of the gross amount payable for ATL taxpayers and 2% for non-ATL taxpayers. For cash-on-delivery transactions handled by courier services, the applicable rates are 2% for ATL taxpayers and 4% for non-ATL taxpayers. Higher tax burden for non-ATL taxpayers The updated withholding tax card highlights a substantial difference between ATL and non-ATL taxpayers across goods, services and contract payments. The FBR has prescribed the rates under Section 153 of the Income Tax Ordinance, 2001, read with the relevant divisions of Part III of the First Schedule and Rule 1 of the Tenth Schedule. The TY2027 framework covers a wide range of commercial transactions, including supplies, professional services, IT services, contracts, export-related services and e-commerce payments, with non-ATL persons generally subject to significantly higher withholding tax deductions.

Date: 2026-08-13

Details: Written by Hamza Shahnawaz in Taxation Non-ATL taxpayers will face substantially higher withholding tax rates on bank deposits, government securities and Sukuk profit under the Tax Year 2027 framework. ISLAMABAD: The Federal Board of Revenue (FBR) has issued the withholding tax card for Tax Year 2027, prescribing different rates on profit on debt under Section 151 of the Income Tax Ordinance, 2001. According to the withholding tax card, profit or yield paid by a banking company or financial institution on an account or deposit maintained with the institution will attract withholding tax of 20% for taxpayers on the Active Taxpayers List (ATL) and 40% for non-ATL taxpayers. The same 20% ATL and 40% non-ATL rates will apply to yield or profit on government securities paid to any person other than an individual. For profit on debt falling outside the specified categories, the FBR has prescribed a withholding tax rate of 15% for ATL taxpayers and 30% for non-ATL taxpayers. Sukuk profit rates The FBR has also notified separate withholding tax rates on profit on debt from Sukuk issued by a Special Purpose Vehicle (SPV) or company under sub-section (1A). Where the Sukuk holder is a company, the withholding tax rate will be 25% for ATL taxpayers and 50% for non-ATL taxpayers. For an individual or association of persons (AOP) holding Sukuk with a return on investment exceeding Rs1 million, the applicable rates will be 12.5% for ATL taxpayers and 25% for non-ATL taxpayers. Where the return on investment is less than Rs1 million, the withholding tax rate will be 10% for ATL taxpayers and 20% for non-ATL taxpayers. Higher rates for non-ATL taxpayers The rates have been prescribed under Division-IA and Division-IB of Part-III of the First Schedule, read with Rule 1 of the Tenth Schedule of the Income Tax Ordinance. The withholding tax card creates a clear distinction between taxpayers appearing on the ATL and those who are non-ATL, with substantially higher rates applicable to non-ATL taxpayers across the specified categories. The rates will apply for Tax Year 2027 and cover profit or yield earned through bank deposits, government securities and specified Sukuk arrangements. The differentiated rates underline the financial impact of maintaining active taxpayer status, while the separate treatment of Sukuk reflects the tax framework applicable to different types of profit-on-debt income.

Date: 2026-08-13

Details: â€¢ GIFT Nifty futures were at 24,446 points Published August 13, 2026 Updated 7 minutes ago Indian shares were on track for a subdued start on Thursday, as easing concerns over a U.S. rate hike after the latest inflation reading were offset by stalled Middle East peace efforts. Stock-specific moves are likely to be in focus following MSCIâ€™s index rebalancing announcement and amid the ongoing quarterly earnings season. GIFT Nifty futures were at 24,446 points as of 7:18 a.m. IST, indicating a muted start for the Nifty 50, which closed at 24,435.95 on Tuesday. U.S. consumer prices barely increased in July, further reducing the likelihood of a Federal Reserve interest rate hike next month after soft jobs data released last week. MSCIâ€™s broadest index of Asia-Pacific shares outside Japan rose 1%, led by â a 4.4% jump in South Korean shares following the inflation data. MKTS/DATA Lower interest rates in the U.S. can push Treasury yield and dollar lower, making emerging market equities such as India attractive for foreign investors. Indiaâ€™s retail inflation data, released after market hours on Wednesday, showed consumer prices accelerated in July to 4.45%, but is still unlikely to push the central bank to hike interest rates over the next few months. Oil prices fell 1% on Thursday as forecasters lowered global oil demand projections for 2026 because of the disruptions from the U.S.-Israeli war on Iran, though the supply constraints from the conflict provided a floor for the market. Iran and the U.S. remained at loggerheads â over efforts to agree a permanent end to the war in the Gulf, Reuters reported on Thursday, citing a senior Iranian source, who said there had been no progress in talks to revive the interim deal agreed in June. â€™Although Brent crude has eased modestly to below $89 per barrel, the unresolved situation in the Strait of Hormuz continues to keep â the geopolitical risk premium in energy markets elevated,â€œ said Hariselvan Radhakrishnan, founder and CEO of HST Wealth. Meanwhile, MSCI will add Laurus Labs, Lenskart, Adani Energy Solutions, and Groww to its flagship index, as part of a periodic review.

Date: 2026-08-13

Details: â€¢ MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.97% Published August 13, 2026 Updated 10 minutes ago TOKYO: Asian stocks rose on Thursday after US inflation data came in as expected, dampening expectations of further near-term Federal Reserve rate hikes, while oil held near $80 a barrel as Washington and Tehran remained deadlocked over efforts to end the Gulf war. MSCIâ€™s broadest index of Asia-Pacific shares outside Japan rose 0.97%, led by South Korean shares jumping 4.4%. Japanâ€™s Nikkei gained 1.86%, while S&P 500 E-minis were up 0.02%. U.S. consumer prices increased 0.1% in July, in line with expectations, data showed on Wednesday. The small increase could weaken the argument for an interest rate increase â from the Fed next month. Money markets are predicting a 40% chance of a rate hike, down from 54% a week ago, according to CME Groupâ€™s FedWatch. With August CPI data due before next monthâ€™s Federal Open Market Committee meeting and crude oil futures rising moderately since July, â€œboth the Fed and markets will likely want to assess the data right up until just before the September FOMC,â€ said Den Miki, senior rate strategist at SMBC Nikko Securities, in a note. Wall Street ended mixed overnight, with the Nasdaq Composite and the S&P 500 eking out small gains while the Dow Jones Industrial Average slipped. Oil prices eased but remained elevated in Asia. US crude fell 0.83% to $82.58 a barrel and Brent fell to $88.35 per barrel, down 0.71% on the day. Iran and the U.S. remained at â loggerheads over efforts to agree a permanent end to the war in the Gulf, with talks to revive a June interim agreement making no headway and no timetable set for its implementation, a senior Iranian source said. President Donald Trump said the US has â€œtotal controlâ€ over the Strait of Hormuz, a claim swiftly rejected by Iran, which said the route remained blocked. Against the yen , the dollar softened 0.06% to 159.32, amid growing speculation that the Bank of Japan â would hike interest rates next month, earlier than the previously expected December timeline. Those expectations were reinforced by Japanâ€™s wholesale prices, which rose 7.2% in July from a year earlier, highlighting broadening price pressures. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, â was steady at 99.93. The yield on benchmark US 10-year notes rose 0.62 basis points to 4.688%, from 4.682% late on Wednesday. Reserve Bank of Australia Assistant Governor Christopher Kent said the three cash rate increases earlier this year were having their intended effects and â would, over time, discourage spending. Speaking at a REUTERS NEXT Newsmaker event in Sydney, Kent said it would take â€œsome time for tighter monetary policy to have its full effect on economic activity and inflation.â€ The Australian dollar held broadly versus the greenback at $0.7062. Spot gold rose 0.28% to $4,419.28 an ounce and spot silver gained 0.3% to $65.50 an ounce.

Date: 2026-08-13

Details: Published August 13, 2026 Updated about 6 hours ago NEW YORK: The S&P 500 and the Nasdaq rose on Wednesday as upbeat earnings from AI infrastructure firms boosted technology stocks, while largely in-line inflation data reinforced bets the US Federal Reserve will hold interest rates steady in September. The S&P 500 information technology sector jumped 1.2 percent, leading sector gains on the benchmark index as investors bet on AI-fueled demand sustaining momentum. CoreWeave surged 19 percent after the AI cloud company lifted its annual capital spending forecast and topped second-quarter earnings estimates. Other AI infrastructure providers also rose, including data-center operators IREN and Applied Digital, which gained 7 percent and 3.4 percent, respectively. Neocloud company Nebius Group jumped 25 percent, helped by second-quarter results. Super Micro Computer topped the S&P 500 with a 15 percent climb after the AI-server maker forecast fiscal 2027 revenue above Wall Street expectations. Chipmakers gained, with Nvidia rising 2.6 percent and Micron Technology adding 6.4 percent. The broader semiconductor index advanced about 3.1 percent and was on track for its biggest one-day jump in more than a week. â€œ(AI trades) have more to run for good reason. Thereâ€™s tremendous funding ahead and revenue scale for manyâ€¦ thereâ€™s further legs ahead. The demand for compute is at record highs,â€ said Eric Schiffer, chairman of The Patriarch Organization, a Los Angeles-based family office. â€œYouâ€™re going to see continued signs and signals and deals and funding related to AI and AI has been powering this market.â€ At 11:59 a.m. ET, the Dow Jones Industrial Average rose 9.21 points, or 0.02 percent, to 53,801.06, the S&P 500 gained 14.39 points, or 0.19 percent, to 7,742.59 and the Nasdaq Composite gained 102.48 points, or 0.39 percent, to 26,547.92. The gains brought the tech-heavy Nasdaq within 2.2 percent of a record high. The S&P 500 and the Dow have already scaled peaks last week as upbeat earnings lifted sentiment. Wall Streetâ€™s fear gauge, the CBOE Volatility Index, briefly touched a seven-month low and was last down 0.49 points at 14.79. Investors also assessed US consumer prices data, which increased slightly in July, weakening the argument for the central bank to hike interest rates next month. Traders are now pricing in a 62 percent chance of the Fed holding rates at its September meeting, according to CMEâ€™s FedWatch Tool. Before the data was released, they were split between a hike and no change. Economic data, especially inflation figures, have drawn increased scrutiny as elevated energy prices due to the Middle East conflict raised rate-hike bets and Fed Chair Kevin Warsh stayed firm on muted forward guidance. The situation in the Middle East remained volatile as a senior Iranian source said there had been no progress in talks to revive the interim deal agreed in June and define a timeframe to implement it, while shipping attacks continued. In other stocks, Cava Group advanced 13.3 percent after the restaurant chain beat Wall Street expectations for second-quarter sales and core profit. Lumentum Holdings added 15 percent after the photonic product maker forecast first-quarter revenue above analystsâ€™ expectations and beat fourth-quarter estimates. Advancing issues outnumbered decliners by a 1.4-to-1 ratio on the NYSE and by a 1.25-to-1 ratio on the Nasdaq. The S&P 500 posted 15 new 52-week highs and two new lows, while the Nasdaq Composite recorded 79 new highs and 74 new lows.

Date: 2026-08-12

Details: Written by Hamza Shahnawaz in Taxation New tax card sets different dividend withholding rates based on recipient status, investment vehicle and source of income. ISLAMABAD: The Federal Board of Revenue (FBR) has notified withholding tax rates on dividend payments for Tax Year 2027, with rates varying according to the nature of the recipient, type of dividend income and taxpayer status. According to the FBRâ€™s withholding tax card for Tax Year 2027, dividends paid by Independent Power Producers (IPPs) will attract withholding tax at 7.5% for persons on the Active Taxpayers List (ATL), compared with 15% for non-ATL persons. For Real Estate Investment Trusts (REITs) and dividend payments other than those specifically covered under the relevant provisions of Division-I, Part-III of the First Schedule, the withholding tax rate has been set at 15% for ATL taxpayers and 30% for non-ATL taxpayers. Mutual fund dividend tax rates The FBR has prescribed separate withholding tax rates for dividends distributed by mutual funds, with the applicable rate depending on the source of the mutual fundâ€™s income. For ATL taxpayers, the rate is 25% for income derived from debt securities and 15% for income derived from equities. Non-ATL taxpayers will face significantly higher rates of 50% on income derived from debt securities and 30% on income derived from equities. For mutual funds deriving 50% or more of their income from profit on debt, the withholding tax rate has been fixed at 25% for ATL taxpayers and 50% for non-ATL taxpayers. Zero tax on certain REIT dividends The tax card provides a zero withholding tax rate on dividends received by a REIT scheme from a Special Purpose Vehicle (SPV). The applicable rate in such cases is 0% for both ATL and non-ATL taxpayers. However, dividends received by other persons from an SPV, as defined under the Real Estate Investment Trust Regulations, 2015, will attract substantially higher withholding tax. The rate has been set at 35% for ATL taxpayers and 70% for non-ATL taxpayers. Higher rates for companies claiming exemptions or tax credits The FBR has also prescribed a withholding tax rate of 25% for ATL taxpayers and 50% for non-ATL taxpayers where a company receiving dividend income is not paying tax because of an income exemption, carry-forward of business losses or a claim of tax credits under the relevant provisions of the Income Tax Ordinance, 2001. The differentiated rates reflect the tax treatment applicable to various investment vehicles and sources of dividend income under the income tax framework. Tax rates applicable for Tax Year 2027 The rates have been notified under Division-I, Part-III of the First Schedule, read with Rule 1 of the Tenth Schedule, as part of the withholding tax framework applicable for Tax Year 2027. The tax card shows a substantial difference between the rates applicable to ATL and non-ATL taxpayers. In several categories, non-ATL recipients face double the withholding tax rate applicable to taxpayers maintaining active status. The latest notification therefore highlights the importance of maintaining ATL status for investors receiving dividend income, while also providing different tax treatment according to the nature and source of the dividend.

Date: 2026-08-12

Details: Written by Hamza Shahnawaz in Taxation New tax card sets higher withholding rates for non-ATL importers, with separate rates for commercial imports, pharmaceuticals, EV kits and mobile phones. ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday issued the withholding tax card for Tax Year 2027, prescribing different tax rates on imports based on the category of goods, importer status and relevant provisions of the Income Tax Ordinance, 2001. Under the tax card, importers appearing on the Active Taxpayers List (ATL) will generally be subject to lower withholding tax rates than non-ATL importers. The rates vary significantly depending on the category and nature of imported goods. For goods covered under Part-I of the Twelfth Schedule, the withholding tax rate has been set at 1% for ATL importers and 2% for non-ATL importers. For goods falling under Part-II of the Twelfth Schedule, the applicable rate is 2% for ATL taxpayers and 4% for non-ATL taxpayers. Commercial importers of Part-II goods will face higher rates of 3.5% for ATL taxpayers and 7% for non-ATL taxpayers. Higher rates apply to Part-III goods The tax burden rises further for goods covered under Part-III of the Twelfth Schedule. For these imports, the withholding tax rate is 5.5% for ATL importers, compared with 11% for non-ATL importers. Commercial importers of Part-III goods will be subject to rates of 6% for ATL taxpayers and 12% for non-ATL taxpayers. The differential rates mean that non-ATL commercial importers of Part-III goods face a withholding tax rate twice that applicable to ATL commercial importers. Special rates for selected sectors The FBR tax card also provides specific withholding tax rates for certain products and sectors. Manufacturers covered under SRO 1125(I)/2011 dated December 31, 2011 will face a rate of 1% for ATL importers and 2% for non-ATL importers. For pharmaceutical products, the applicable withholding tax rates are 4% for ATL taxpayers and 8% for non-ATL taxpayers. Imports of completely knocked-down (CKD) kits for electric vehicles (EVs) will attract withholding tax at 1% for ATL importers and 2% for non-ATL importers. Separate withholding rates for mobile phones The FBR has prescribed separate withholding tax rates for mobile phones based on their Pakistan Customs Tariff (PCT) classifications. For mobile phones falling under PCT 8517.1219, the rates range from Rs70 to Rs11,500 for ATL taxpayers and from Rs140 to Rs23,000 for non-ATL taxpayers. For mobile phones classified under PCT 8517.1211, the applicable rates range from nil to Rs5,200 for ATL taxpayers and from nil to Rs10,400 for non-ATL taxpayers. The mobile phone rates are referenced to Part-II of the First Schedule, read with Rule 1 of the Tenth Schedule, as specified in the FBRâ€™s withholding tax card. Non-ATL importers face higher tax burden The withholding tax card highlights a significant difference between the tax treatment of ATL and non-ATL importers. In most categories, taxpayers who are not included on the Active Taxpayers List face withholding tax rates that are twice those applicable to ATL importers. The difference is particularly pronounced for commercial imports and higher-rate categories under the Twelfth Schedule. The latest tax card therefore reinforces the financial incentive for importers to remain compliant with their tax filing obligations and maintain active taxpayer status. The prescribed rates will apply during Tax Year 2027 in accordance with the relevant provisions of the Income Tax Ordinance, 2001 and the schedules and rules referenced in the FBRâ€™s withholding tax framework.

Date: 2026-08-12

Details: â€¢ MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.5% Published August 12, 2026 Updated about a minute ago TOKYO: Oil and gold prices climbed while regional shares edged nervously higher on Wednesday as geopolitical tensions ratcheted up ahead of key US inflation data. The yen was mostly flat against the dollar, having unwound much of its gains following rare intervention in currency markets by Japan and the United States. The US and Yemenâ€™s Iran-aligned Houthis reported separate attacks on shipping, while Asia was rattled by an early morning missile launch by North Korea. Markets remained focused on US consumer price index data later in the session for signals of timing for a potential Federal Reserve rate hike. â€œMarket sentiment is lukewarm amidst lingering geopolitical risk and as market participants head into US CPI data,â€ Kyle Rodda. â€œThe lack of substantial news or progress in talks, with Iran doubling down on its commitment to govern the Strait of Hormuz, is keeping the risk for oil prices skewed to the upside and U.S. indices on hold,â€ he added. US crude rose 0.89% to $83.94 a barrel, and â Brent advanced to $89.60 per barrel, up 0.78% on the day. Both benchmarks settled more than $1 higher on Tuesday, marking their highest closes since July 31 and extending gains after jumping about 5% on Monday. Spot gold gained 0.46% to $4,387.03 an ounce. MSCIâ€™s broadest index of Asia-Pacific shares outside Japan was up 0.5%, while Japanâ€™s benchmark Nikkei share gauge traded flat as the market reopened after a holiday. Four crew members of an Egyptian-owned ship were killed in an attack by Houthis on Tuesday, Yemenâ€™s transport ministry said, while the US military said it struck a container ship attempting to sail toward an Iranian port. The fatalities would mark the first from a Houthi strike on shipping since the Iran war began on February 28. The war shows no signs of ending despite repeated claims from US President Donald Trump of an imminent deal. A North Korean ballistic missile fired off the Korean Peninsulaâ€™s east coast came days ahead of major joint military exercises by Seoul and Washington long denounced by â Pyongyang. Meanwhile, Taiwan condemned planned naval drills between China and an Indonesian warship off the islandâ€™s east coast. Wednesdayâ€™s CPI data will not capture the most recent rise in energy costs, but it could still prove instrumental in setting expectations for the Fedâ€™s meeting next month, with money markets showing an even chance of a hike . Consumer prices are expected to edge up 0.1% in July after falling 0.4% in June, according to a Reuters poll. Annual CPI inflation is forecast to slow to 3.4% from 3.5% a month earlier. â€œEveryoneâ€™s got â their eyes on the CPI report,â€ Skye Masters, head of markets research at National Australia Bank, said on a podcast. â€œIf you do see the print coming in at zero, I think youâ€™ll obviously see a reasonable rally in Treasuries as the market unwinds expectations for the Fed tightening.â€ Markets are also increasingly pricing in an early rate hike in Japan, â putting pressure on the nationâ€™s shorter-dated bonds. The yield on the 5-year Japanese government bonds rose to 2.1%, a record high, while the 2-year yield reached a 31-year peak of 1.63%. The dollar index , which measures the greenback against a basket of currencies, rose 0.04% to 99.85. The euro was down 0.02% at $1.1538. The Japanese yen â weakened 0.03% against the greenback to 159.31 per dollar, remaining off last weekâ€™s high of 155.20 after several suspected rounds of intervention. Sterling weakened 0.01% to $1.3501. In early European trades, the pan-region Euro Stoxx 50 futures were down 0.15% at 6,563, German DAX futures fell 0.12% at 26,444, and FTSE futures lost 0.25% to stand at 10,825. U.S. stock futures, the S&P 500 e-minis , were up 0.03% at 7,750.

Date: 2026-08-12

Details: Published August 12, 2026 Updated about 2 hours ago SHANGHAI: Mainland China and Hong Kong stocks ended lower on Tuesday, as investors reassessed prospects for an end to the US-Iran conflict that has pushed up global oil prices. At the close, the benchmark Shanghai Composite index eased 0.8 percent, snapping a five-session winning streak, while the blue-chip CSI300 index also slipped 0.8 percent. The smaller Shenzhen index was down 0.5 percent, the start-up board ChiNext Composite index inched up 0.3 percent and Shanghaiâ€™s tech-focused STAR50 index lost 1.6 percent. US President Donald Trump on Monday responded to Iranâ€™s conditions for a peace deal with his own demands that Iran pay compensation for people killed in wars, attacks and protests, in a rhetorical escalation likely to complicate efforts to reopen the Strait of Hormuz. Oil prices rose more than 2 percent on Tuesday to over one-week highs as hopes for a US-Iran deal to end the war and reopen the Strait of Hormuz faded. â€œAttacks on shipping and oil infrastructure in the Middle East over the weekend, together with Iranâ€™s renewed demand for concessions and rejection of direct negotiation with the US, added further uncertainty to the prospect of reopening the Strait of Hormuz,â€ analysts at OCBC said in a note. In China, non-ferrous metal stocks led the declines, with a sub-index tracking the sector falling 4.7 percent. Chinese robot maker Unitree said on Monday its USD900 million Shanghai initial public offering was more than 8,000 times oversubscribed by retail investors, reflecting investor fever. In Hong Kong, the benchmark Hang Seng index lost 1.1 percent, and the cityâ€™s tech shares dropped 1.9 percent. Hong Kongâ€™s material shares were the main dragger, with the Hang Seng material sub-index plunging 4.6 percent. Separately, investors awaited signals from US inflation data due later this week for more clues on how the Iran conflict has fanned price pressures, which could affect the Federal Reserveâ€™s policy outlook after last weekâ€™s weak employment report tempered rate hike expectations.

Date: 2026-08-12

Details: Published August 12, 2026 Updated about 2 hours ago FRANKFURT: European shares ended little changed on Tuesday, hovering near record highs as optimism over a strong earnings season offset caution stemming from uncertainty around the supply of energy through the Strait of Hormuz. The pan-European STOXX 600 was flat at 660.51 points, holding near all-time highs after a recent rally driven by upbeat corporate results, as investors balanced earnings optimism against geopolitical risks in the Middle East. â€œThe bigger question is can that earnings momentum be sustained? The market seems to think so,â€ said Steve Sosnick, chief market analyst at Interactive Brokers. â€œAs long as the worldâ€™s energy supplies donâ€™t get any worse, itâ€™s reasonable to think that could occur.â€ LSEG estimates show that earnings are expected to increase 22 percent in the second quarter. Excluding the energy sector, however, earnings growth is projected to be 11.5 percent. Oil prices firmed 1.2 percent on Tuesday as traders weighed signs of progress in Iran-Oman talks against evidence of continued disruption to energy flows, with Kpler data showing traffic through the Strait of Hormuz at six vessels on Monday, compared with a 10-day average of roughly 11. Meanwhile, Bloomberg News reported, citing Pakistanâ€™s defence minister, that the US and Iran are close to â€œsome sort of agreementâ€. Rising energy prices supported oil and gas stocks, but concerns that a prolonged disruption around the Strait of Hormuz could stoke inflation and cloud the outlook for monetary easing kept broader risk appetite in check. â€œThe pause this week reflects some caution around the Iran conflict and renewed pressure on oil prices. That is the key near-term risk for European markets,â€ said Gordon Kerr, European Macro Strategist, at KBRA. The energy sector jumped 1.7 percent, while tech shares rose 1.1 percent, providing further support. The sector remains among Europeâ€™s top performers this year, up about 24 percent year to date. Investors are now awaiting euro zone employment and GDP data, as well as US consumer price figures later this week, for further clues on the path of interest rates. Among individual movers, Alcon gained 4.7 percent after the Swiss-American eye-care company raised its full-year earnings forecast.

Date: 2026-08-12

Details: Published August 12, 2026 Updated about 2 hours ago NEW YORK: Wall Streetâ€™s main indexes slipped on Tuesday, as losses in tech stocks weighed on sentiment, while investors assessed reports of potential deals that could take the Middle East towards stability. Pakistani defence minister Khawaja Asif told Bloomberg News that recent signals indicated the United States and Iran were close to â€œsome sort of an arrangement.â€ This was soon after Qatarâ€™s foreign ministry said Iran and Oman were in advanced talks about shipping in the Strait of Hormuz. â€œMarkets are grappling with the prospects of some form of detente, although theyâ€™re misguided in thinking that any form of resolution is the last chapter of this story,â€ said Ron Albahary, chief investment officer at LNW. Brent crude futures were held near one-week highs in choppy trading. The S&P 500 energy sector gained 1.1 percent â€” the most among peers. In the market, alternative asset managers rose, with Apollo Global, and Blackstone adding between 4 percent and 6 percent. Analysts linked the moves to an agreement these institutions signed with Nvidia on Monday to establish compute-financing platforms aimed at mobilizing more than USD500 billion. Nvidia ticked up 0.4 percent in afternoon trading. The S&P 500 financials index was up 0.2 percent. Industrials, regarded as traditionally cyclical, rose 0.7 percent. However, Alphabetâ€™s 3 percent decline weighed on the S&P 500 communication services sector, also the biggest drag on the tech-heavy Nasdaq. At 12:12 p.m. ET, the Dow Jones Industrial Average fell 57.41 points, or 0.11 percent, to 53,918.57; the S&P 500 lost 8.70 points, or 0.11 percent, to 7,744.41 and the Nasdaq Composite declined 92.60 points, or 0.35 percent, to 26,512.75. The S&P 500 and the Dow hovered near all-time highs hit last week, while the Nasdaq is over 2 percent away from its record but well above its lows in July, when the tech-heavy index slid almost 10 percent from its peak. Consumer and producer price inflation readings, due over the next two days, will be crucial in shaping market expectations on the Federal Reserveâ€™s policy path â€” given its focus on the inflation mandate and Chair Kevin Warshâ€™s stance on cutting back rates guidance. Markets were expected to trade directionless ahead of the prints, Albahary said. Whether the US central bank would increase interest rates in September or choose to pause has split traders almost evenly, according to the CME FedWatch Tool. Rising energy costs, stemming from the Iran conflict, have spurred inflation concerns and complicated the paths of central banks globally.

Date: 2026-08-12

Details: Published August 12, 2026 Updated about 2 hours ago KARACHI: Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), has signed a Memorandum of Understanding (MoU) with JazzWorld Pakistan Limited (JWPL) under which JazzWorld will offer a 30 percent discount on its digital and enterprise solutions to FPCCI member trade bodies and their individual members. This significant offer is aimed at making modern digital solutions more accessible and encouraging businesses to adopt technology at an affordable cost. He described the FPCCIâ€“JWPL partnership as a positive and timely step towards bringing practical digital and enterprise solutions closer to Pakistanâ€™s diverse business community, with a specific focus on facilitating small and medium enterprises (SMEs), small traders, and women-led businesses. He added that such collaborations are essential to enhance competitiveness, formalization, and operational efficiency across the private sector. Mian Zahid Hussain, Chairman of the Policy Advisory Board of FPCCI (PAB-FPCCI), who negotiated the terms and conditions with JazzWorld Pakistan on behalf of FPCCI, emphasized that Pakistan is passing through a period in which digital transformation is no longer a choice; it is an economic necessity. He noted that SMEs are a vital pillar of employment, entrepreneurship, and commercial activity, yet many businesses continue to face difficulties in accessing affordable connectivity, digital tools, and contemporary enterprise services. Mian Zahid Hussain acknowledged JWPLâ€™s leadership in extending its enterprise solutions to FPCCIâ€™s extensive membership base, which comprises a nationwide network of 307 trade bodies representing more than a million business houses across the country. Shahzad Rasheed, President Enterprise Solutions, JazzWorld Pakistan Limited, was warmly welcomed at FPCCI Head Office along with Naufal Zamir Sheikh, Head of SME Enterprise Solutions, and AsimIrshad, Regional SME Head South. Shahzad Rasheed appreciated FPCCIâ€™s support and termed this MoU a highly encouraging and forward-looking development. He stated that JWPL is very excited to work closely with Pakistanâ€™s business community, particularly SMEs, to provide them with reliable, secure, and cost-effective digital and enterprise solutions that can enhance their productivity and competitiveness in both domestic and international market. Atif Ikram Sheikh, Mian Zahid Hussain, and Shahzad Rasheed stated that this partnership of both giants is aligned with the vision of Prime Minister Mian Muhammad Shehbaz Sharif to transform Pakistan into a digital and paperless economy. Copyright Business Recorder, 2026

Date: 2026-08-11

Details: Written by Hamza Shahnawaz in Taxation Lamia Iqbal was removed from service after the FBR found her prolonged absence without sanctioned leave was established by official records. KARACHI: The Federal Board of Revenue (FBR) has dismissed a Customs inspector from service after disciplinary proceedings established that she remained absent from duty for an extended period without sanctioned leave. Ms Lamia Iqbal, Inspector Customs (BS-16), Directorate of Transit Trade (Headquarters), Karachi, was awarded the major penalty of dismissal from service under the Civil Servants (Efficiency & Discipline) Rules, 2020. Disciplinary proceedings were initiated against the officer on allegations of misconduct relating to unauthorised absence from duty. An Order of Inquiry, Charge Sheet and Statement of Allegations were served on her on February 12, 2026. Ms Noor-ul-Huda Mallick, Deputy Collector (PCS/BS-18), was appointed as the Inquiry Officer. In her inquiry report dated April 15, 2026, she established the charge of misconduct and recommended a major penalty of reduction to a lower post and pay scale for two years. FBR Finds Prolonged Absence Established Following the inquiry report, the FBR served a show-cause notice on the officer on May 14, 2026. She submitted her written defence on June 8 and requested a personal hearing. The hearing was subsequently conducted through video link on July 30, 2026, in the presence of the accused officer and the departmental representative. During the proceedings, the departmental representative said the officer had demonstrated a pattern of unauthorised absence and showed limited inclination towards performing her official responsibilities since joining Pakistan Customs in April 2023. The department stated that the officer had applied on September 3, 2025 for 365 days of extraordinary leave (EOL) without pay. However, she remained absent from duty from September 4, 2025 onwards without the leave having been sanctioned. The officer acknowledged during the hearing that she had not attended office since submitting the leave application. She explained that her husband, who was serving as a Preventive Officer in Pakistan Customs, had been transferred from Karachi to Quetta, making it difficult for her to remain in Karachi alone with their infant child. She requested that her application for 365 days of EOL, covering the period up to September 3, 2026, be considered favourably. Previous Warnings Also Cited The FBR authority observed that the charge of unauthorised absence from September 4, 2025 onwards was fully established through official records and had also been admitted by the officer. The authority further noted evidence of repeated unauthorised absences during 2023 and 2024. This included a formal warning issued on February 13, 2024, an explanation letter dated March 13, 2024, and several WhatsApp messages sent to the officer concerning her attendance. The authority rejected the officerâ€™s explanation that she was unable to remain in Karachi following her husbandâ€™s transfer to Quetta. It observed that neither the officer nor her husband had applied for a transfer or posting at the same station under the wedlock policy during the preceding year. FBR Replaces Recommended Penalty with Dismissal The competent authority concluded that the penalty recommended by the Inquiry Officer was not commensurate with the seriousness of the established charges. It also noted that the recommended penalty of reduction to a lower post and pay scale could not legally be imposed on the officer, who had been directly recruited in BS-16, in light of a Supreme Court judgment reported as 2009 SCMR 412 and a recent Federal Service Tribunal judgment dated June 8, 2026. Consequently, the Member (Administration/HR) and competent authority decided to impose the major penalty of dismissal from service with immediate effect. The period of unauthorised absence up to the date of the order has been treated as extraordinary leave without pay under the applicable rules. Ms Lamia Iqbal has the right to appeal against the decision before the Appellate Authority under the Civil Servants (Appeals) Rules, 1977 within 30 days of communication of the order.

Date: 2026-08-11

Details: Written by Mrs. Anjum Shahnawaz in Taxation, Top stories The first phase of the AI-based tax system is scheduled to begin on October 1, with random case allocation aimed at improving transparency. ISLAMABAD: Prime Minister Muhammad Shehbaz Sharif has directed the Federal Board of Revenue (FBR) to accelerate tax reforms and ensure the complete rollout of the Faceless Inland Revenue System by 2027, as the government seeks to improve tax administration, enforcement and transparency. Chairing a review meeting on FBR reforms on Monday, the prime minister called for stronger action against smuggling, tax evasion and illegal businesses while directing the tax authority to intensify efforts to achieve the prescribed revenue target. The prime minister also welcomed growing confidence among the business community in the governmentâ€™s tax reform programme and directed the FBR chairman and senior officers to spend two days every month in Lahore, in addition to their monthly visits to Karachi. He appreciated recent FBR enforcement operations against illegal cigarette manufacturing factories in Chakwal and Swabi and instructed the tax authority to appoint officers with strong reputations and integrity to sensitive posts and departments. Faceless Tax System to Begin from October The meeting was informed that the first phase of the Faceless Inland Revenue System will become operational from October 1, 2026. Prime Minister Shehbaz directed the FBR to complete the system within the stipulated timeline and ensure its full implementation by 2027. The AI- and advanced technology-based system is a major component of the FBRâ€™s ongoing digitisation and tax administration reforms. Under the new framework, a National Faceless Audit Wing will be established to conduct audits of tax returns, while a Faceless Assessment Unit will undertake tax assessments. Cases will be assigned randomly under the system, irrespective of geographical jurisdiction. The mechanism is intended to improve transparency, minimise direct interaction between taxpayers and tax officials and reduce opportunities for undue influence. FBR Steps Up Enforcement The FBR chairman briefed the meeting on his regular visits to Karachi during the first week of each month and his engagement with the business community. He said he had met representatives of seven major trade organisations in Karachi and discussed their concerns. According to the chairman, issues raised during these meetings were addressed promptly. The meeting was also informed that the FBR was issuing time-bound standard operating procedures (SOPs) for the payment of tax refunds to exporters. The measures are aimed at improving the efficiency of the refund process and providing greater certainty to exporters. Action Against Illegal Cigarette Factories The meeting reviewed intelligence-based enforcement operations against illegal cigarette manufacturing facilities in Chakwal and Swabi. The Chakwal facility was sealed following the operation, while stocks of illegal cigarettes and manufacturing machinery were seized. Prime Minister Shehbaz appreciated the enforcement actions and directed the FBR to maintain its focus on curbing tax evasion, smuggling and illegal businesses. Focus on Tax Enforcement and Integrity The prime minister stressed that effective tax enforcement must be accompanied by integrity within the tax machinery. He directed the FBR to sustain the momentum of its reform programme and strengthen measures to improve revenue collection while enhancing services for taxpayers. The government expects the Faceless Inland Revenue System to become a key element of its broader tax digitisation strategy. By removing geographical considerations from case assignments and limiting direct interaction between taxpayers and officials, the system is intended to create a more transparent and technology-driven tax administration. The meeting was attended by Federal Ministers Azam Nazeer Tarar, Dr Musadik Masood Malik, Ahad Khan Cheema, Muhammad Aurangzeb, Attaullah Tarar and Shaza Fatima Khawaja, Special Assistant Haroon Akhtar, State Bank Governor Jameel Ahmad and senior officials of relevant institutions.

Date: 2026-08-11

Details: Published August 11, 2026 Updated about an hour ago LAHORE: The Board of Directors of The Bank of Punjab (BOP), at its meeting held on August 7, 2026, approved a proposal for an equity injection of up to Rs 30 billion by the Government of Punjab through the issuance of ordinary shares, otherwise than by way of a rights issue. The transaction remains subject to all applicable statutory, corporate, shareholder and regulatory approvals. The proposed capital injection marks an important milestone in BOPâ€™s ongoing transformation and is designed to strengthen the Bankâ€™s capital base in support of its future growth ambitions. The shares will be issued at Rs 38.20 per ordinary share; if, however, the prevailing market price of the Bankâ€™s ordinary shares at the time of issuance is higher, the issue price will be the prevailing market price plus a premium of five percent Rs 38.20 per share therefore serves as the floor price for the issuance. Over the past several years, BOP has undergone a far-reaching transformation â€” substantially expanding its balance sheet, strengthening its financial performance and building leading market positions in segments most vital to Pakistanâ€™s economy. The Bank today ranks as the countryâ€™s number one bank in SME, agriculture and affordable housing finance, womenâ€™s leadership, credit card issuance and digital lending, while steadily deepening its presence in export-oriented commercial and corporate banking. Together, these franchises place BOP at the heart of economic activity, employment generation and financial inclusion in Pakistan. The pace of this expansion has, however, placed growing demands on a capital base that has historically remained thin relative to the scale of the Bankâ€™s operations and its growth potential. The proposed equity injection will strengthen and deepen BOPâ€™s capital base, creating headroom for the Bank to keep growing in its core markets and expanding low-cost deposits without capital constraints, while ensuring financial resilience and prudent balance-sheet management. Importantly, this is growth capital. It comes at a time of strong underlying performance: during 2025, BOP recorded revenue growth of approximately 29 percent and earnings growth of more than 40 percent year on year, alongside significant appreciation in the Bankâ€™s share price. The capital raise will support the next stage of BOPâ€™s expansion, including the Bankâ€™s international venture recently approved by the State Bank of Pakistan. Copyright Business Recorder, 2026

Date: 2026-08-11

Details: Published August 11, 2026 Updated about 3 hours ago KARACHI: Reinforcing its strategic focus on expanding affordable housing finance, particularly for salaried individuals, Meezan Bank has surpassed Rs 3.05 billion in cumulative disbursements under the Government of Pakistanâ€™s flagship affordable housing initiative, Wazir-e-Azam Apna Ghar Programme-Ghar Ho Tu Apna (GHTA). Through its Easy Home financing solution, the Bank has helped 490 families realise their dream of home ownership through 100 percent Shariah-compliant financing, supporting the Governmentâ€™s vision of promoting affordable housing and greater financial inclusion. The milestone reflects the growing preference for Meezan Bankâ€™s Shariah-compliant housing finance solutions and the Bankâ€™s continued commitment to making home ownership more accessible through ethical, transparent and customer-centric financing. Leveraging its nationwide branch network and dedicated housing finance teams, Meezan Bank continues to play a leading role in advancing affordable housing across Pakistan. Building on this momentum, the Bank has approved more than 3,000 housing finance applications under the GHTA Programme, representing a cumulative approved financing amount exceeding PKR 22.557 billion. This strong pipeline underscores the increasing demand for Shariah-compliant housing finance and positions the Bank for significant future disbursements as customers complete the property acquisition process. Commenting on the achievement, Ahmed Ali Siddiqui, Group Head â€“ Consumer Finance & Digital Banking, Meezan Bank, said that surpassing PKR 3 billion in disbursements under the Ghar Ho Tu Apna Programme reflects the trust our customers place in us and our commitment to providing authentic Shariah-compliant housing finance. With more than 3,000 approved applications in the pipeline, we remain committed to supporting the Governmentâ€™s affordable housing agenda and enabling thousands more Pakistani families to own a home through ethical Islamic financing, he added. Copyright Business Recorder, 2026

Date: 2026-08-11

Details: Published August 11, 2026 Updated about 3 hours ago KARACHI: Faysal Bank Limited (FBL) reported Profit Before Tax of PKR 20.5 billion and net profit of PKR 10 billion, with Earnings Per Share of PKR 6.60 in the first half of this calendar year (CY26). The Bank has also declared a second-quarter cash dividend of PKR 1.5 per share. According to announcement, despite the downward rationalisation of market rates, FBL maintained its profitability through healthy balance-sheet growth, with total assets crossing PKR 1.8 trillion. The Bank continued to optimise its deposit mix, with increased emphasis on current accounts, supported by trade and transactional flows, an expanding customer base, and its wide and growing branch network. Deposits grew by 9.5 percent to PKR 1.56 trillion, while current accounts increased by 21 percent to PKR 646 billion. The current account mix improved to 41.4 percent from 37.5 percent in December 2025, while CASA strengthened to 86.8 percent from 81.9 percent. The Advance-to-Deposit Ratio moderated to 51.7 percent from 61.1 percent, while asset quality remained strong with an infection ratio of 2.3 percent. The successful issuance of a PKR 7 billion Tier II Sukuk further reinforced the Bankâ€™s capital base. Overall, FBLâ€™s results demonstrate the strength of its Islamic banking franchise, business fundamentals, disciplined risk management and focused growth strategy, increasingly supported by digital, technology-led, women-focused and customer-centric solutions. Mian Muhammad Younis, Chairman, Faysal Bank, said that these results reflect the growing maturity and strength of Faysal Bankâ€™s Islamic banking and network-led growth journey. They demonstrate the effectiveness of the Boardâ€™s long-term strategic direction-expanding the Bankâ€™s network and steadily building a low-cost core deposit base. â€œWe remain sincerely grateful to our customers, whose enduring trust is central to our continued progressâ€, he added. Copyright Business Recorder, 2026

Date: 2026-08-11

Details: Published August 11, 2026 Updated about 3 hours ago LAHORE: State Bank of Pakistan (SBP) Chief Manager Ansar Iftikhar Butt has said that a new strategy is being developed to increase financing for Small and Medium Enterprises (SMEs) under which value chain financing for SMEs will be promoted, and special focus will be given to financing and handholding of SMEs. He expressed these views during his visit to the Lahore Chamber of Commerce and Industry. He was accompanied by SBP Deputy Chief Manager Bilal Shafqat, Deputy Director Umar Makhdoom and other officials. LCCI Acting President Tanveer Ahmed Sheikh welcomed the delegation, while LCCI executive committee members Sheikh Fayyaz and Nadeem Ansari were also present during the meeting. Anser Iftikhar Butt further said that the Lahore Chamber should identify sectors and companies where SME financing was most needed so that effective financing mechanisms could be developed for these sectors. He said guarantees provided by large companies for SMEs could help resolve documentation and other financing-related issues to a significant extent. He also asked the Lahore Chamber to nominate a focal person to address issues faced by SMEs, while the State Bank would work jointly with the Lahore Chamber for the promotion and financing of SMEs. He emphasised that making SME financing more effective was essential for sustainable economic growth and employment generation. Acting President LCCI Tanveer Ahmed Sheikh said instead of relying solely on collateral-based financing, alternative financing models should be introduced for SMEs. He said SMEs could also be facilitated through local LC models and insurance-based financing mechanisms. He said the textile sector was facing serious difficulties in obtaining financing and opening Letters of Credit (LCs). â€œBanks are not ready to provide even a single rupee of financing to the textile sector,â€ he said, adding that this situation was affecting industrial production and export activities. He urged the State Bank to take practical measures for the immediate resolution of financing issues faced by the textile sector and other key industrial sectors. On this occasion, LCCI Acting President Tanveer Ahmed Sheikh proposed establishing a permanent State Bank desk at the Lahore Chamber so that financing-related cases and issues of the business community could be resolved directly. He said the initiative would facilitate businesses and help eliminate unnecessary delays in resolving banking-related matters. He also stressed the need to simplify the procedure of the Asaan Karobar Scheme further so that more small and medium-sized businesses could benefit from the facility. They also discussed in detail SME financing, value chain financing, issues faced by the textile sector, opening of LCs, alternative financing models and the provision of banking facilities to the business community. Copyright Business Recorder, 2026

Date: 2026-08-11

Details: Published August 11, 2026 Updated about 3 hours ago KARACHI: Leading foreign investors continue to demonstrate strong confidence in Pakistanâ€™s economic potential, with OICCI member companies alone investing over USD 23 billion in the country over the past decade, surpassing Pakistanâ€™s cumulative net foreign direct investment (FDI) inflows of USD 21 billion during the same period. The findings, released in OICCIâ€™s Membersâ€™ Contribution to the Economy 2025 report on Monday, reflect the sustained commitment of OICCI members to expanding their operations, reinvesting earnings and supporting Pakistanâ€™s long-term economic development. The report highlights the significant contribution of OICCI member companies to Pakistanâ€™s economy in FY2025. Collectively, they generated Rs13.1 trillion in gross revenue, maintained Rs42 trillion in total assets, invested Rs615 billion in capital expenditure, and contributed Rs3.2 trillion in government levies, underscoring their role as some of Pakistanâ€™s largest investors, taxpayers and drivers of economic activity. The report also highlights the continued resilience of OICCI member companies listed on the Pakistan Stock Exchange (PSX). While the compound annual growth rate (CAGR) in Profit Before Tax (PBT) moderated to 26 percent in rupee terms during 2021â€“2025, compared to 35 percent in the previous reporting period, this was largely influenced by exchange rate movements and a higher base effect. In USD terms, PBT grew at a CAGR of 11 percent, while turnover recorded a CAGR of 21 percent in rupee terms and 6 percent in USD terms. Covering 51 listed OICCI member companies, the analysis reflects the sustained profitability and operational resilience of foreign-invested businesses despite a challenging macroeconomic environment. The report also illustrates the diverse sectoral composition of OICCI membersâ€™ economic contribution. Within the OICCI membership, the Oil, Gas and Energy sector accounted for 36 percent of total government levies paid, the Banking, Insurance, Finance and Leasing sector represented 75.6 percent of total assets and 25 percent of total turnover, while the Telecommunications sector contributed 33 percent of the total capital expenditure (CAPEX). Commenting on the report, M. Abdul Aleem, Secretary General, OICCI, said that the findings reaffirm the confidence that OICCI members continue to place in Pakistanâ€™s long-term economic potential. Our members have consistently reinvested in the country, expanded their operations and continued contributing to national development despite challenging economic conditions. He said that their cumulative investment of over USD 23 billion during the past decade is a strong vote of confidence in Pakistanâ€™s future. â€œWith greater policy consistency, regulatory predictability and an enabling business environment, foreign investors can make an even larger contribution to economic growth, exports, innovation and employment,â€ he added. Copyright Business Recorder, 2026

Date: 2026-08-11

Details: Published August 11, 2026 Updated about 3 hours ago KARACHI: The President of the Karachi Chamber of Commerce & Industry (KCCI), Muhammad Rehan Hanif, while expressing grave concern over the ongoing nationwide strike by goods transporters and oil tankers, warned that continued suspension of cargo movement could cause serious disruption to industrial production, supply chains, exports and overall economic activity. Rehan Hanif urged the Federal Government as well as all Provincial Governments to immediately engage the representatives of the transport sector at the highest level, listen to their genuine and legitimate grievances and resolve the outstanding issues through meaningful negotiations without any further delay. â€œThe situation requires immediate intervention. I strongly urge the federal government and all provincial governments to immediately contact and engage the representatives of the transport sector and address their legitimate issues so that this strike can be brought to an end without further damage to the national economy,â€ he said. The president of the KCCI pointed out that the transport sector is the backbone of Pakistanâ€™s entire supply chain, connecting ports, industries, markets and consumers. Any prolonged disruption in the movement of goods and petroleum products could have a cascading impact on industrial production, availability of raw materials, delivery of finished products, fuel supplies, domestic commerce and export shipments. He recalled that a similar situation had emerged a few months ago, causing substantial losses to the economy, particularly to the export sector, as exporters faced difficulties in meeting their commitments and ensuring timely shipment of consignments. He cautioned that Pakistanâ€™s export-oriented industries could not afford another disruption at a time when the country is already facing multiple economic and operational challenges. He said that the transportersâ€™ concerns should not be ignored, and that genuine grievances must be addressed through dialogue rather than allowing the dispute to escalate into a prolonged confrontation. At the same time, he appealed to the transport community to demonstrate flexibility and consider the wider national interest. â€œI also appeal to my brothers in the transport sector to please consider the enormous damage being caused to the country by this strike.â€ The KCCI president said that the right to raise legitimate demands was fully acknowledged, but a prolonged wheel-jam at a time when industries, exporters and businesses were already under pressure would ultimately hurt the entire economy, including the transport sector itself. He therefore urged both sides to immediately return to the negotiating table and adopt a solution-oriented approach. Rehan Hanif further announced that the Karachi Chamber was ready to play the role of a mediator and facilitator between the government and the transport sector to help find an amicable and sustainable resolution. â€œKCCI is ready to play its role as a mediator. We are prepared to sit with the transport representatives and the government, and jointly work towards resolving their legitimate demands. Our objective is simple: the economy must continue moving, industries must continue operating, exports must continue, and the legitimate concerns of the transport sector must also be addressed,â€ he added. Copyright Business Recorder, 2026

Date: 2026-08-11

Details: â€¢ The bonds will be issued through SBIâ€™s London branch, with initial price guidance set at roughly 120 basis points over US Treasuries Published August 11, 2026 Updated about 13 hours ago MUMBAI: State Bank of India, the countryâ€™s largest lender, is returning to the public dollar bond market after nearly a year and is expected to see strong demand for its planned five-year issue, three merchant bankers said on Tuesday. The bonds will be issued through SBIâ€™s London branch, with initial price guidance set at roughly 120 basis points over U.S. Treasuries. The issue comes at a time when Indian banks are making a beeline for dollar issues after the Reserve Bank of India in June a opened a swap facility, making overseas borrowing cheaper. SBI is expected to raise at least $500 million, although the final size will depend on investor demand. The lender has begun marketing the bonds and is expected to complete the sale by the end of the week, the bankers said, declining to be identified as they were not authorised to speak to the media. SBI did not immediately respond to a Reuters email seeking comment. One banker said SBI was offering a sizeable spread premium, although final pricing could tighten by as much as 30 basis points. The banker also expected the deal size to reach $1 billion or more. Fitch Ratings has assigned an expected BBB- rating to the proposed senior unsecured notes. Indiaâ€™s largest lender SBI beats quarterly profit view on healthy loan growth The notes will be direct, unsecured and unsubordinated obligations of SBI, ranking equally with its other unsecured and unsubordinated debt, the rating agency said. SBI had planned to raise $1 billion through a public dollar bond issue in June, but deferred the sale due to higher borrowing costs following heavy issuance by Indian lenders. The bank subsequently raised $600 million through a private placement of three-year dollar bonds at a spread of 100 basis points over the Secured Overnight Financing Rate (SOFR). Large private lenders, including HDFC Bank, Axis Bank and ICICI Bank, raised funds through dollar bonds in June and July.

Date: 2026-08-10

Details: Written by Hamza Shahnawaz in Taxation The surcharge applies to individuals and associations of persons, while salaried individuals are specifically exempt under Section 4AB. ISLAMABAD: Individuals and associations of persons with taxable income exceeding Rs10 million will be subject to a 10 percent surcharge on income tax for Tax Year 2027 under the Income Tax Ordinance, 2001. The provision forms part of the legal framework governing the charge and collection of income tax and sets out an additional liability for taxpayers falling within the specified income threshold. 10% Surcharge Above Rs10 Million Under Section 4AB of the Income Tax Ordinance, 2001, a 10 percent surcharge is payable by every individual and association of persons whose taxable income exceeds Rs10 million. The surcharge is calculated on the income tax imposed under Division I of Part I of the First Schedule of the ordinance. This means the surcharge is applied to the income tax liability rather than directly to the taxpayerâ€™s taxable income. For example, where the applicable income tax liability is Rs1 million, a 10 percent surcharge would amount to Rs100,000, subject to the provisions of the law. Salaried Individuals Exempt The law specifically provides an exemption from the surcharge for an individual deriving income chargeable under the head â€œSalaryâ€. Consequently, salaried individuals are excluded from the 10 percent surcharge under Section 4AB even where their taxable income exceeds Rs10 million. The distinction means that the surcharge primarily applies to qualifying individuals with taxable income from sources other than salary, as well as associations of persons meeting the specified income threshold. How Income Tax Is Calculated Under the provisions governing the charge of tax, income tax is imposed for each tax year on every person having taxable income at the rates specified in the First Schedule of the Income Tax Ordinance. The tax payable is determined by applying the applicable tax rate to taxable income and then deducting eligible tax credits. The ordinance establishes a specific sequence for applying multiple tax credits. A foreign tax credit under Section 103 is applied first, followed by tax credits available under Part X of Chapter III and then credits available under Sections 147 and 168. Separate and Final Tax Regimes Certain categories of income may be subject to separate taxation or final taxation through tax collection or deduction mechanisms provided under the ordinance. Where the relevant provisions apply, such income is not included in the computation of taxable income for the purposes specified by the law. The overall framework therefore distinguishes between income subject to the normal tax regime and income covered by separate or final taxation provisions. Tax Deduction and Advance Payment Requirements The ordinance also requires tax to be deducted at source, collected or paid in advance where applicable. Taxpayers and withholding agents must comply with the relevant provisions governing the timing and manner of tax deduction, collection and payment. The Section 4AB surcharge forms part of the broader income tax framework applicable for Tax Year 2027, with the specific exemption for salaried individuals clearly provided under the law.

Date: 2026-08-10

Details: Written by Hamza Shahnawaz in Taxation Taxpayers filing late returns may face daily penalties, although the applicable amount can be reduced for returns submitted within three months. ISLAMABAD: The Federal Board of Revenue (FBR) has prescribed monetary penalties for taxpayers who fail to file their income tax returns for Tax Year (TY) 2026 within the prescribed deadline. Under Section 182 of the Income Tax Ordinance, 2001, a person who fails to furnish an income tax return as required under Section 114 by the due date is liable to a penalty calculated on the basis of the tax payable for the relevant tax year. Daily Penalty for Late Filing The law provides that the penalty for late filing will be the higher of: â€¢ 0.1 percent of the tax payable for the relevant tax year for each day of default; or â€¢ Rs1,000 for each day of default. This means the penalty continues to accumulate for every day the taxpayer remains in default, subject to the minimum and maximum limits prescribed under the law. Minimum Penalties Prescribed The Income Tax Ordinance also sets minimum penalties for different categories of taxpayers. For an individual deriving 75 percent or more of income from salary, the minimum penalty is Rs10,000. In all other cases, the minimum penalty is Rs50,000. The minimum penalty provisions therefore apply even where the daily calculation would otherwise result in a lower amount. Maximum Penalty Limited to 200% of Tax Payable The law also places an upper limit on the penalty. The maximum penalty cannot exceed 200 percent of the tax payable by the taxpayer for the relevant tax year. This provision limits the overall financial exposure arising from prolonged delays in filing the income tax return. Penalty Reduced for Late Returns Filed Promptly Taxpayers who miss the original deadline can qualify for a reduction in the penalty if they subsequently file their returns within specified periods. The penalty is reduced by: â€¢ 75 percent if the return is filed within one month after the due date; â€¢ 50 percent if filed within two months; and â€¢ 25 percent if filed within three months. The reductions apply where the return is filed within the prescribed period following the due date or any extended due date allowed under the law. How Tax Payable Is Calculated For purposes of calculating the penalty, the term â€œtax payableâ€ refers to the higher of two amounts. These include the tax chargeable on taxable income based on an assessment made or treated as made under Sections 120, 121, 122, 122D or 122E of the Income Tax Ordinance, or the tax payable for the immediately preceding tax year for which an income tax return was duly filed. The provision is intended to establish a basis for calculating the penalty even where the taxpayerâ€™s liability for the current tax year has not yet been finally determined. Taxpayers Urged to Meet TY 2026 Deadlines The penalty provisions underline the financial consequences of failing to comply with statutory income tax return filing requirements. Taxpayers subject to the filing requirement for TY 2026 are therefore required to submit their returns within the prescribed deadlines to avoid daily penalties and other consequences under the Income Tax Ordinance, 2001. The rules also provide an incentive for taxpayers who miss the deadline to file their returns as soon as possible, as the applicable penalty can be substantially reduced when the return is submitted within the first three months of the delay.

Date: 2026-08-10

Details: Written by Mrs. Anjum Shahnawaz in Exclusive, Taxation, Top stories Tax authorities to scrutinise offshore investments, fund transfers, CRS compliance and financial reporting by identified taxpayers and institutions. ISLAMABAD: The Federal Board of Revenue (FBR) has launched a large-scale probe into foreign transactions involving fund managers and trusts established in Pakistan amid concerns over potential money laundering, tax evasion and non-compliance with financial reporting requirements. According to an FBR office order, tax authorities have identified a list of fund managers and trusts for detailed scrutiny of offshore investments and cross-border fund transfers under the Income Tax Ordinance, 2001. The list includes several fund managers already listed with the Pakistan Stock Exchange (PSX). Relevant tax officials have been directed to conduct a comprehensive examination of the accounts, transactions and tax compliance of the identified taxpayers. Probe to Examine Offshore Transactions The investigation will focus on compliance with various provisions of the Income Tax Ordinance, 2001, including Section 108, which deals with transactions between associates. Officials have also been instructed to examine compliance with Section 165B, relating to the furnishing of information by financial institutions, including banks. The tax authorities will scrutinise the nature of foreign transactions, offshore investments and fund transfers to determine whether the identified taxpayers have properly disclosed their income and assets and complied with applicable tax requirements. Withholding and Record-Keeping Compliance Under Review The FBR has also directed officials to investigate possible violations relating to withholding statements and record-keeping requirements under Section 182 of the Income Tax Ordinance. The relevant provisions provide for penalties in cases involving failure to furnish withholding statements containing details of persons undertaking transactions, failure to maintain prescribed records and other reporting violations. Tax officials will therefore examine whether the identified entities have maintained the required documentation and submitted complete and accurate information within the prescribed deadlines. CRS Compliance to Face Scrutiny The probe will also cover compliance by reporting financial institutions and other relevant entities with requirements governing the exchange of financial information. The FBR has specifically directed tax offices to examine compliance with Section 165B and the Common Reporting Standard (CRS) Rules contained in Chapter XIIA of the Income Tax Rules, 2002. Under the CRS framework, reporting financial institutions are required to collect and report specified information concerning financial accounts linked to reportable jurisdictions. The FBR will examine cases involving failure to submit required information or country-by-country reports within the prescribed period, as well as incomplete or inaccurate reporting. Self-Certification Requirements Examined The tax authority will also investigate whether reporting financial institutions obtained valid self-certifications for new accounts as required under the CRS framework. Officials have been directed to examine cases involving false self-certifications and instances where reportable jurisdiction persons failed to provide valid self-certifications. Such checks are intended to determine whether financial institutions and taxpayers have complied with international tax transparency and information-sharing requirements. Country-by-Country Reporting Under Review In addition, tax offices have been instructed to investigate taxpayers under Chapter VIA of the Income Tax Rules, 2002, which covers documentation and country-by-country reporting requirements. The review is expected to assess whether taxpayers subject to the relevant reporting framework have maintained adequate documentation and submitted the required information regarding their international business activities. FBR Intensifies Cross-Border Tax Scrutiny The latest initiative reflects the FBRâ€™s increasing focus on cross-border financial transactions, offshore investments and international tax reporting. By examining fund managers, trusts and financial institutions under multiple provisions of the tax law and CRS framework, the revenue authority aims to identify potential tax evasion, undisclosed offshore transactions, reporting deficiencies and other financial irregularities. The investigation will also test the compliance of reporting institutions with their obligations to provide financial information to tax authorities and participate in Pakistanâ€™s international exchange-of-information framework.

Date: 2026-08-10

Details: Published August 10, 2026 Updated about 3 hours ago KARACHI: Cotton prices remained largely stable this week, with trading activity continuing at a reasonable pace across the market. New York cotton prices, meanwhile, showed an upward trend, reflecting positive sentiment in international markets. Despite prevailing uncertainty in the region, Pakistanâ€™s textile exports have reached a new record high. Commenting on the development, Khurram Mukhtar said that a ten percent increase in exports during the first month of the new fiscal year was an encouraging sign for the industry. However, complaints regarding contamination and trash content in cotton have risen in recent weeks, raising concerns among stakeholders about quality control. On a more positive note, Pakistan is set to introduce fourteen standardized seed varieties of the finest cotton quality, a move expected to strengthen the sectorâ€™s long-term output. In another development, the All Pakistan Textile Mills Association (APTMA) welcomed the governmentâ€™s announcement of a twenty billion rupee payment to the textile industry, calling it a much-needed relief for the sector. Despite these positive indicators, Pakistanâ€™s agricultural sector, particularly the cotton industry, continues to face significant challenges. Concerns have been raised that key stakeholders, including the public, the government, and national institutions, remain largely disengaged from the administrative process, a gap that industry observers say could hinder sustained progress if left unaddressed. Cotton prices remained stable in the local cotton market during the past week, with textile mills showing keen interest in purchasing cotton while ginners are also selling at reasonable rates. Trading volume has improved as well. However, the supply of seed cotton (phutti) has been delayed following recent rains, prompting ginners to proceed cautiously with their business. Many ginners are still delaying the delivery of deals struck earlier at lower rates, and as a result, several mills that had booked deals at those lower prices are now pressing ginners for delivery, though many ginners continue to merely promise delivery without fulfilling it. It is hoped that the supply of phutti will increase within ten to twelve days after the rains, as only a limited quantity is currently arriving in the market. Meanwhile, complaints about contamination and trash in cotton are on the rise, and ginners are being urged to take this matter seriously. In addition, experts at the Central Cotton Research Institute (CCRI) are advising growers on protecting their crops from pest attacks following the rains. On a more positive note, it has been announced that Pakistan is set to introduce fourteen improved cotton seed varieties. The Karachi Cotton Association raised the spot rate by 100 rupees per maund, closing it at 18,300 rupees per maund. In Sindh province, cotton prices ranged between 17,900 and 18,300 rupees per maund depending on quality, while phutti was priced between 7,000 and 7,700 rupees per 40 kilograms. In Punjab province, cotton prices ranged between 18,500 and 18,800 rupees per maund, while phutti sold for between 8,400 and 9,200 rupees per 40 kilograms. In Balochistan province, cotton prices ranged between 18,400 and 18,500 rupees per maund, while phutti was priced between 8,300 and 8,800 rupees per 40 kilograms. Karachi Cotton Brokers Forum Chairman Naseem Usman reported that international cotton prices trended upward, with New York cotton futures ranging between 83 and 87 US cents per pound. According to the USDAâ€™s weekly export and sales report, 55,900 bales were sold for the 2025-26 season, with China leading the purchases at 4,100 bales, followed by Pakistan in second place with 2,200 bales, and Nicaragua in third place with 900 bales. For the 2026-27 season, sales reached 242,100 bales, with Vietnam topping the list by purchasing 132,400 bales, followed by Turkey in second place with 41,600 bales, and Honduras in third place with 20,500 bales. Exports for the period totalled 222,800 bales, with Vietnam leading as the top importer at 88,900 bales, followed by Pakistan in second place, importing 35,500 bales, and Turkey in third place, importing 19,500 bales. Meanwhile, the government has announced payments of 20 billion rupees to the textile industry, a move welcomed by the All Pakistan Textile Mills Association (APTMA), which said the initiative would provide much-needed liquidity to exporters. According to details, APTMA welcomed the federal governmentâ€™s decision to release 20 billion rupees in long-pending dues owed to the industry. The association said the move would provide exporters with badly needed cash flow and further strengthen confidence in Pakistanâ€™s export-led growth strategy. Separately, Patron-in-Chief of the Pakistan Textile Exporters Association Khurram Mukhtar termed the ten percent increase in exports during the first month of fiscal year 2026-27 encouraging. He said the total value of exports in July 2026 rose to 2.96 billion dollars compared to 2.69 billion dollars in the same month of the previous fiscal year, while textile exports also grew by nine percent, rising from 1.68 billion dollars to 1.83 billion dollars. He added that whenever the export sector has been provided a conducive business environment, it has consistently performed well. Despite regional uncertainty, Pakistanâ€™s textile exports have hit a new record. Textile exports reached a record 1.833 billion dollars in July 2026, marking a 43 percent increase on a monthly basis and a 9.11 percent rise on a yearly basis. The Central Cotton Research Institute (CCRI) has advised cotton growers to intensify pest surveillance and adopt crop management measures immediately, as recent rains and rising humidity have created favourable conditions for jassid, whitefly and pink bollworm attacks. According to Sajid Mahmood, Head of the Technology Transfer Department at CCRI Multan, these recommendations were issued following the 10th meeting of the Farmers Advisory Committee, which was chaired by CCRI Director Sabahat Hussain. Pakistan approved 14 cotton varieties during 2021-2025, featuring improved fibre quality, higher ginning out-turn (GOT), heat tolerance, resistance to drought and bollworms, strengthening the countryâ€™s cotton seed portfolio and supporting the textile industry. Official documents available with Wealth Pakistan show that two major cotton research institutions developed the approved varieties. The Central Cotton Research Institute (CCRI), Multan, developed 11 varieties, while the Central Cotton Research Institute (CCRI), Sakrand, produced three varieties. For quite some time, cotton purchasers and textile mills have continued to complain that contamination in cotton is rising instead of decreasing, a matter of concern for the entire cotton industry. If Pakistan genuinely wants to improve the quality of its cotton, contamination must be addressed as the foremost priority. This is an issue that can be tackled domestically and does not require waiting for any new government policy. Pakistanâ€™s agricultural sector, particularly the cotton industry, faces significant challenges, with concerns that key stakeholders, including the public, the government and national institutions, remain largely absent from the administrative process. Critics say that the bureaucracy, which is expected to facilitate informed decision-making, has not always ensured adequate transparency and effective communication within the sector. A national institution, the Pakistan Central Cotton Committee (PCCC), is facing a host of challenges including an acute shortage of staff, 564 vacant posts out of a total of 752 posts (only 26% working staff), five positions of grade 20 officers lying vacant for over a decade, promotions and recruitment held in abeyance for around 15 years, an official source revealed on the condition of anonymity. Moreover, according to the official, the financial crisis persists due to suspension of salaries and pensions at the PCCC from July 2025 to April 2026, more than Rs2 billion outstanding dues of the textile sector stuck on account of weak recovery system by the Ministry of National Food Security and Research (MNFSR), cotton cess at Rs50 per bale since 2012 despite multiple increases in operational costs. When it comes to administrative imbalances, there is no permanent vice president of the PCCC, and non-payment of due ad hoc relief for several years, the official said. â€œThe flaws in planning and policy are also procrastinating merger of the PCCC into the Pakistan Agriculture Research Council (PARC) despite the 18-month-old governmentâ€™s approval,â€ they said. Pakistanâ€™s textile sector demands 15 million bales annually. Last year, the country imported 7 million bales worth two and a half billion dollars from Brazil and the United States. This year, the country is targeting the import of another 7 million bales, as it is barely able to produce 6 million bales domestically. Pakistan has set a target of cultivating cotton on 5 million acres this year, with a production target of approximately 9.6 million bales. According to the latest report of the Pakistan Cotton Ginners Association (PCGA), 785,926 bales had reached ginning factories across the country by July 31, 2026. Pakistan has achieved a bumper cotton crop on three occasions in its history: 12.8 million bales in 1991-92, 14.8 million bales in 2004-05, and 14.0 million bales in 2014-15. According to the PCGA report, Pakistan produced approximately 5.6 million bales of cotton during the 2025-26 season. Based on the current condition of the crop, cotton production this year is also expected to remain in the range of 5.5 to 6.0 million bales. The legal process of merging the Pakistan Central Cotton Committee (PCCC) into the Pakistan Agricultural Research Council (PARC) is complete, as the Ministry of Law urged the Ministry of National Food Security and Research to have it examined by the National Assembly and the Senate. According to experts, the cotton sector cannot recover until a national cotton policy is formulated, since the adverse effects will continue, including a threat to the governmentâ€™s credibility, negative impact on the national economy, and the failure of the PCCC. No cabinet meeting has been convened for several months regarding the PCCCâ€™s merger The PCCC is the largest national institution for cotton, with an annual budget of 800 million rupees, while the Punjab Cotton Research Department has an annual budget of 7 to 8 billion rupees. Following the 18th Amendment, agriculture falls under provincial jurisdiction. Speaking to Business Recorder, Dr. Yousuf Zafar, former Vice President of the PCCC, said that the Cabinetâ€™s Special Committee on federal government rights legislation and reorganization had decided in January 2025 to merge the PCCC with PARC. Meanwhile, a second committee on special crops, headed by Deputy Prime Minister (DPM) Ishaq Dar, gave verbal instructions to complete this process in parliament or to complete it through the President within a legally permissible period of three months. At a subsequent meeting on the cotton crop in October 2025, the DPM asked the All Pakistan Textile Mills Association (APTMA) to take charge of the PCCC. The former prime minister proposed the establishment of an autonomous cotton board. Even amended minutes were issued by the Ministry of National Food Security and Research (MNFSR). However, no such board was announced by the federal cabinet, as the summary was not forwarded by the concerned ministry. According to Zafar, the federal governmentâ€™s indecisiveness and lack of clarity remain the obstacle to resolving the PCCCâ€™s long-standing problems. Poor governance by the federal government and the absence of a clear roadmap are two major reasons behind the countryâ€™s declining cotton production. The Export Facilitation Scheme (EFS) allowed duty-free imports of raw cotton and yarn, which resulted in large-scale dumping by China and devastated local looms and spinning mills. Some textile houses, focused on short-term gains, are pressing decision-makers to liberalise cotton imports, which reached nearly three billion dollars last year. The seed mantra that our ruling elite recites at every cotton meeting is misplaced and overemphasised. It is not a single issue; rather, the entire cotton value chain needs to be transformed from farm to fashion, or F2F. Farmers, researchers, ginners, traders and textile houses must be engaged in a meaningful strategic implementation plan to urgently secure at least fifteen million bales of quality cotton. Strong political commitment is essential for the success of such a programme. Veteran progressive farmer Chaudhry Javed Riaz said the bureaucracy bears primary responsibility for this mess, as the research institution system is falling apart, with officers and staff being deprived of salaries, pensions and other facilities. Discussing possible solutions, he said cotton production in the country cannot be improved to meet the demand of the local textile sector unless a clear-cut cotton policy is formulated. He said immediate measures should be taken to protect the cotton sector right after wheat cultivation, cotton should be grown, and research should be conducted in line with climate change. He also called for crop zoning to protect â€œwhite gold,â€ noting that the cotton belt of southern Punjab has been converted into a sugarcane zone following the establishment of sugar mills there. He further called for the provision of quality cotton seed, following proper research, to boost production, along with reducing input costs by subsidising fertilisers and fixing a support price to benefit farmers so that they can earn a fair return and reinvest in future crops. Copyright Business Recorder, 2026

Date: 2026-08-10

Details: Published August 10, 2026 Updated about 3 hours ago BRASILIA: Most Latin American currencies strengthened on Friday as a weaker-than-expected US jobs report weighed on the dollar and cooled expectations for a Federal Reserve interest-rate hike next month, while equities were mixed. The US Labor Departmentâ€™s report showed that the economy shed 23,000 jobs in July, defying expectations of 80,000 additions, according to economists polled by Reuters. As a result, the US dollar index fell 0.4 percent, hitting a seven-week low. Money markets scaled back bets for a September Fed rate hike, with traders pricing in a 44 percent chance of an increase, down from 55 percent before the employment data, according to CME Groupâ€™s FedWatch tool. â€œWith not a solid belief in the Fed, terrible labor situation, and Yen interventionâ€¦itâ€™s helping LatAm improve. The monetary policy divergence is whatâ€™s mattering right now,â€ said Juan Perez, director of trading at Monex. The US payrolls surprise capped a week of central bank decisions and inflation data across Latin America, offering fresh cues on the regionâ€™s monetary policy path. MSCIâ€™s index tracking Latin American currencies rose 0.2 percent, heading for a sixth straight week of gains. The equities gauge, however, slipped 0.8 percent and was poised to mark its sixth consecutive session of losses, its longest such streak since late April. Most assets in the resource-laden region were on track to log weekly gains helped by firmer commodity prices that improved risk sentiment. Among currencies, the Mexican peso traded 0.5 percent higher, while its stocks gained 0.6 percent, led by a 1.6 percent advance in Grupo Mexico, tracking higher copper prices. Data showed annual inflation in Mexico slowed in July to its lowest level in more than six years, a day after the central bank kept rates unchanged and pushed back its timeline for inflation to return to target levels. â€œSofter food prices, weak domestic demand, restrictive financial conditions and the lagged effects of the MXNâ€™s appreciation earlier this year continue to support lower headline inflation,â€ said Andres Abadia, chief LatAm economist at Pantheon Macroeconomics. In Chile, annual inflation also eased in July, while copper export revenue jumped 22.7 percent year-on-year. The equities benchmark declined 0.2 percent after hitting an over three-month high in the previous session, and the peso gained 0.4 percent. Brazilian stocks fell most among Latin American peers, down 1.9 percent, with a 3 percent loss in state-run oil firm Petrobras despite reporting strong second-quarter results, dragging the index lower. The real strengthened 0.5 percent. Copyright Business Recorder, 2026

Date: 2026-08-10

Details: Written by Faisal Shahnawaz in Pakistan, Trade & Industry Ambassador Rizwan Saeed Sheikh promotes B2B partnerships, value-added mineral projects and advanced manufacturing in Pakistanâ€™s surgical sector. CHICAGO: Ambassador of Pakistan to the United States Rizwan Saeed Sheikh has engaged key business leaders across Chicagoland to promote bilateral trade, commercial partnerships and greater US investment in Pakistan, particularly in the mineral and surgical instrument sectors. The ambassador, accompanied by the Consul General of Pakistan in Chicago, held a series of high-level meetings with business representatives to highlight investment opportunities and strengthen business-to-business (B2B) linkages between Pakistan and the United States. Ambassador Calls for Stronger B2B Partnerships During a breakfast meeting hosted by the Pak American Chicagoland Chamber of Commerce (PACC), Ambassador Sheikh encouraged business representatives to strengthen B2B partnerships and explore opportunities to expand their businesses and investments in Pakistan. PACC President Naveed Anwar briefed the ambassador on his recent visit to Pakistan as part of a US business delegation and expressed confidence in the countryâ€™s economic prospects. The discussions focused on strengthening commercial ties and creating opportunities for US businesses to participate in Pakistanâ€™s growing investment sectors. $200 Million Salt Joint Venture Highlighted In a separate meeting, Nadeem Ahmad, President of Miracle Salt Works Collective Inc. (MSCI), briefed Ambassador Sheikh on the companyâ€™s ongoing $200 million joint venture with the Pakistan Mineral Development Corporation (PMDC). The project involves the local crushing and packaging of high-quality Pakistani pink rock salt for export to international markets. Ambassador Sheikh welcomed the initiative, describing it as a potential benchmark for value-added foreign direct investment in Pakistanâ€™s mineral sector. He highlighted the countryâ€™s substantial mineral resources and said greater investment in processing and value addition could help transform these resources into significant economic opportunities. Focus on Value Addition in Surgical Industry The ambassador also visited Phoenix Instruments in Naperville, a major finishing, packaging and distribution facility for Pakistani-manufactured surgical instruments serving the US healthcare market. During the visit, Sheikh toured the facility and held discussions with company executives on ways to expand operations and help Pakistanâ€™s surgical manufacturing industry move towards higher-value segments. Pakistan is a major producer and exporter of surgical instruments, particularly from the Sialkot industrial cluster, with the industry supplying healthcare markets in several countries. Sheikh called for greater US investment in advanced manufacturing technologies, specialised workforce training and skills development to help Pakistanâ€™s surgical instrument industry move towards more technologically sophisticated production. Push for Technology Transfer and Investment The ambassador reaffirmed Pakistanâ€™s commitment to developing sustainable, investment-led economic partnerships with the United States. He emphasised the importance of technology transfer, value addition and skills development in expanding Pakistanâ€™s export capacity and creating higher-value industrial opportunities. The engagements in Chicago form part of Pakistanâ€™s broader efforts to attract US investment and strengthen commercial partnerships by connecting American businesses with opportunities in Pakistanâ€™s mineral resources, manufacturing and export-oriented sectors.

Date: 2026-08-09

Details: Published August 9, 2026 Updated a day ago TOKYO: Tapping the Bank of Japanâ€™s holdings of exchange-traded funds (ETF) may be an option to fund a planned sales tax cut, a ruling party executive said in a recent online programme, a sign its vast asset holdings could come under the political spotlight. The government on Wednesday signed off on Prime Minister Sanae Takaichiâ€™s flagship plan to slash the sales tax on food items to 1percent from 8percent for two years, pressing ahead despite mounting concerns over the nationâ€™s already strained finances. Takaichi has pledged not to rely on fresh debt issuance and instead look for non-tax revenues to fund the revenue shortfall, estimated around 5 trillion yen (USD31.71 billion) annually. Daishiro Yamagiwa, a senior lawmaker of the ruling Liberal Democratic Partyâ€™s (LDP) tax panel, said proceeds from selling the BOJâ€™s 37-trillion-yen ETF holdings could be considered as an idea to fill the shortfall. â€œUnder the BOJâ€™s current plan, it would take a century to sell all of its ETF holdings. Stock prices are so high now that it wonâ€™t hurt to think about speeding up the pace of sales,â€ Yamagiwa, a senior lawmaker of the Liberal Democratic Partyâ€™s (LDP) tax panel, told an online programme aired on Tuesday. Under a plan set in September last year, the central bank is currently selling its ETF holdings in the market at an annual pace of around 330 billion yen as part of its efforts to dismantle remnants of its massive stimulus. The BOJ has said it opted to move slowly to avoid disrupting the stock market in unloading the 37-trillon-yen worth of ETFs left on its balance sheet during 13 years of purchases aimed at reflating a moribund economy. STANDARD CHARTERED TO OFFER WEALTH PRODUCTS IN INDIAâ€™S GIFT CITY FINANCE HUB Published August 9, 2026 Updated a day ago MUMBAI: Standard Chartered has received in-principle approval to offer wealth management products to clients from Indiaâ€™s tax-neutral financial hub, Gujarat International Finance Tec-City (GIFT City), the bank said in a statement on Thursday. The International Financial Services Centres Authority (IFSCA), the regulator for the international financial services hub, granted the in-principle approval, and Standard Chartered expects to roll out its retail wealth management offerings over the next few months. â€œBuilding on our deep roots in the GIFT City ecosystem, this distribution approval enables us to bring Standard Charteredâ€™s global wealth management capabilities, while supporting GIFT Cityâ€™s ambition to become a leading international financial services centre,â€ P D Singh, CEO, India and South Asia, Standard Chartered, said in the statement. Standard Chartered, the first foreign bank to commence operations in GIFT in 2020, joins HSBC in offering wealth products via the hub. The lender was earlier tapped by policymakers to manage US dollar clearances for a foreign currency settlement system set up in the countryâ€™s tax-neutral zone. GIFT City is being promoted by the Modi government as a financial centre to rival Singapore and Dubai. In February, the government extended the tax holiday for firms operating there to 20 years and regulations have also been eased. Earlier in the year, the finance hub also issued its first license to establish a family investment fund, marking a significant step in managing private wealth within the financial hub.

Date: 2026-08-08

Details: Written by Faisal Shahnawaz in Taxation Senate subcommittee asks FBR and FIA for details on cigarette brands, tax payments and alleged theft of 2,828 seized cartons. ISLAMABAD, August 7, 2026: A subcommittee of the Senate Standing Committee on Interior has directed the Federal Board of Revenue (FBR) and other relevant institutions to submit detailed reports on the seizure and alleged theft of non-custom-paid cigarettes, while also seeking comprehensive information about Pakistan Tobacco Company (PTC) and the countryâ€™s tobacco industry. The subcommittee, chaired by Senator Saifullah Abro, met at Parliament House on Friday to review a report broadcast by private television channel ABN News concerning non-custom-paid cigarettes seized by Pakistan Customs and the Motorway Police near Chakri. FIA Submits Inquiry Report to FBR Officials of the Federal Investigation Agency (FIA) informed the committee that a comprehensive inquiry report into the alleged theft of seized cigarettes had already been forwarded to the FBR. The committee directed the FBR and other relevant agencies to provide detailed information about: â€¢ Pakistan Tobacco Company (PTC). â€¢ Tobacco manufacturers operating in Pakistan. â€¢ Registered cigarette brands. â€¢ Tax payments by tobacco companies. â€¢ Imported raw materials. â€¢ Revenue collected from the tobacco sector. Senator Abro said the committeeâ€™s objective was not to target journalists but to investigate allegations of large-scale tax evasion within the tobacco industry. The inquiry was prompted by the alleged theft of 2,828 cartons of cigarettes from an FBR warehouse. The matter is currently being investigated by the FIA. Committee Seeks Cigarette Brand and Tax Details The subcommittee also instructed the FIA to provide details of the cigarette brands involved in the case, along with additional information concerning imported tobacco materials and associated tax records. The requested information is expected to help the committee assess the broader tax and regulatory issues surrounding the tobacco sector, in addition to determining the circumstances surrounding the missing seized cigarettes. Information Ministry Explains Media Complaint Framework During the meeting, the committee also directed the Ministry of Information and Broadcasting and the Press Information Department (PID) to submit reports concerning the issue. Members discussed the legal framework governing complaints against television channels and newspapers. Federal Secretary for Information and Broadcasting Ashfaq Ahmed Khail briefed the committee on the regulatory framework for electronic and print media. He clarified that neither the ministry nor the PID has the authority to directly take action against television channels or newspapers. According to the secretary, complaints against television channels can be submitted to the relevant Council of Complaints, while complaints concerning newspapers may be referred to the Press Council of Pakistan. He said the government remained committed to protecting the rights, professional independence and welfare of journalists and media workers. Ashfaq Ahmed Khail also highlighted the role of the Commission for Protection of Journalists and Media Professionals, which was established under the relevant law to safeguard journalistsâ€™ rights. PFUJ Says Legal Forums Available Speaking before the committee, Pakistan Federal Union of Journalists (PFUJ) President Afzal Butt said journalists were not above the law and that complaints against media organisations or individual journalists could be taken to the appropriate legal forums. He specifically referred to bodies including the Pakistan Electronic Media Regulatory Authority (PEMRA) and the Press Council of Pakistan. The information secretary further said the Constitution guarantees citizens the right to freedom of expression within the limits prescribed by law, reaffirming the ministryâ€™s commitment to promoting free, responsible and professional journalism. ABN News Report Referred for Review Concluding the meeting, Senator Abro said journalists were â€œour armsâ€ and highly valued by the committee, while stressing that no individual should be permitted to defame another person or unjustifiably damage someoneâ€™s reputation. The committee referred the matter concerning the ABN News report to PFUJ President Afzal Butt for an independent review. It asked him to examine the issue and submit his findings to the committee, while the FBR, FIA and other relevant institutions were directed to provide the requested information on the seized cigarettes and the wider tobacco sector.

Date: 2026-08-08

Details: Written by Hamza Shahnawaz in Taxation Tax authority advises taxpayers to complete returns, payments and registrations before scheduled weekend system maintenance. ISLAMABAD, August 7, 2026: The Federal Board of Revenue (FBR) has announced that its online tax return filing portal, IRIS, along with several other digital tax services, will remain temporarily unavailable over the weekend due to scheduled system maintenance. In a public notice issued on Friday, the FBR said the maintenance will commence at 12:30 a.m. on Saturday, August 8, 2026, and continue until 5:00 a.m. on Monday, August 10, 2026. Key Digital Services to Remain Unavailable During the maintenance period, taxpayers and other stakeholders will be unable to access several important online platforms, including: â€¢ IRIS tax return filing portal â€¢ Digital Invoicing (DI) â€¢ Payment System â€¢ Synchronized Withholding Administration and Payment System (SWAPS) â€¢ POS Registration The FBR said all transactions linked to these services, including tax return filing, tax payments, registrations and other online activities, will remain unavailable throughout the scheduled maintenance window. Taxpayers Advised to Plan Ahead The tax authority has urged taxpayers, businesses and tax practitioners to complete any time-sensitive tax-related activities before the maintenance begins. The FBR advised users to finalise: â€¢ Income tax return filings. â€¢ Tax payments. â€¢ Registrations. â€¢ Other online transactions. Planning ahead, the authority said, will help taxpayers avoid inconvenience during the temporary suspension of services. Services to Resume After Maintenance According to the FBR, all affected digital platforms are expected to become operational immediately after the successful completion of the maintenance work. The revenue authority expressed regret for the temporary disruption and thanked taxpayers and stakeholders for their patience and cooperation. IRIS Central to Pakistanâ€™s Tax System The IRIS portal serves as the FBRâ€™s primary online platform for income tax return filing, sales tax registration, tax payments and a wide range of digital tax services. It is used extensively by individual taxpayers, companies, tax consultants and other stakeholders across Pakistan. The scheduled maintenance is aimed at ensuring the continued reliability, performance and security of the FBRâ€™s digital tax infrastructure.

Date: 2026-08-08

Details: Written by Hamza Shahnawaz in Taxation Disciplinary inquiry finds unauthorised factory visit proved, while corruption allegation remains unsubstantiated. ISLAMABAD, August 7, 2026: The Federal Board of Revenue (FBR) has imposed the major penalty of compulsory retirement on a senior auditor of the Inland Revenue Service after disciplinary proceedings found him guilty of participating in an unauthorised visit to a factory in Lahore. According to an official notification, disciplinary proceedings were initiated against Hafiz Muhammad Azam, Senior Auditor (Time Scale-17), Corporate Tax Office (CTO), Lahore, along with two other officials. The three officers were suspended and served charge sheets on December 10, 2025, over allegations of inefficiency, misconduct and corruption under the Civil Servants (Efficiency & Discipline) Rules, 2020. Inquiry Recommended Dismissal Ms Attiya Ali Khan, Commissioner Inland Revenue, was appointed as the Inquiry Officer and submitted her report on April 3, 2026. The inquiry concluded that all three charges had been established against the officials and recommended the major penalty of dismissal from service. Following the inquiry report, the FBR issued show-cause notices on April 29, 2026. The accused officials submitted written replies and requested personal hearings before the competent authority. Hearing Before Competent Authority The Member (Administration/HR), acting as the competent authority, heard the officials on July 16, 2026. During the proceedings, the departmental representative stated that the charge relating to an unauthorised and illegal visit to the premises of M/s Versal Industry (SMC-Private) Limited on October 29, 2025, had been established during the inquiry. Senior Auditor Denied Allegations In his defence, Hafiz Muhammad Azam denied the allegations and maintained that he had been travelling with a Havaldar to attend a funeral near Ferozepur Road after leaving the office. He stated that another employee requested a lift to the factory premises, where an authorised raid by the Directorate of Intelligence and Investigation (Inland Revenue) was already in progress. According to his explanation, he merely stopped outside the factory gate to drop the employee, did not enter the premises and played no role in the raid. He also argued that he had no jurisdiction over the factory because he was posted in Zone-II rather than Zone-III. FBR Rejects Defence The competent authority found the explanation unconvincing after reviewing reports submitted by the Deputy Director of the Directorate of Intelligence and Investigation (Inland Revenue), who led the authorised raid, and the Deputy Commissioner Inland Revenue having jurisdiction over the factory. The authority also examined a computerised death certificate produced by the official and concluded that his claim of attending a funeral during office hours was inconsistent with the record. Although the death occurred on October 29, 2025, the funeral and burial took place the following day. In addition, the Member (Administration/HR) contacted the Deputy Director of Intelligence and Investigation on August 5, 2026, who confirmed that Hafiz Muhammad Azam was present outside the factoryâ€™s main gate while the other two accused officials were found inside the premises during the raid. Compulsory Retirement Instead of Dismissal The FBR noted that the allegation of accepting illegal gratification, which formed the basis of the corruption charge, could not be substantiated. However, the authority held that the unauthorised visit to the factory and the submission of incorrect and misleading statements had been proved during the disciplinary proceedings. Taking these findings into account, the competent authority concluded that dismissal from service was not warranted because the senior auditorâ€™s presence inside the factory premises could not be established. Instead, the FBR imposed the lesser major penalty of compulsory retirement under Rule 4(3)(c) of the Civil Servants (Efficiency & Discipline) Rules, 2020, with immediate effect. Right to Appeal The notification further provides that the suspension period from October 30, 2025, until the date of the order will be treated as leave admissible under the Revised Leave Rules, 1980. The FBR has also informed Hafiz Muhammad Azam that he may file an appeal before the competent appellate authority under the Civil Servants (Appeal) Rules, 1977 within 30 days of receiving the notification.

Date: 2026-08-08

Details: Published August 8, 2026 Updated about an hour ago KARACHI: Mari Energies Limited (MARI) reported its highest-ever quarterly earnings in the fourth quarter of FY26, with net profit after tax (NPAT) almost doubling year-on-year, largely driven by a significant reversal in super tax following a Federal Constitutional Court ruling. The company posted NPAT of Rs37.46 billion for the quarter ended June 30, 2026, translating into earnings per share (EPS) of Rs31.20, compared with Rs18.84 billion (EPS: Rs15.69) in the corresponding quarter last year, reflecting an increase of 99 percent year-on-year and 77 percent quarter-on-quarter. For the full fiscal year FY26, Mari Energies earned Rs87.07 billion, or Rs72.52 per share, up 34 percent from Rs65.14 billion (EPS: Rs54.25) recorded in FY25. The board announced a final cash dividend of Rs18.70 per share, taking the total FY26 payout to Rs27 per share, compared with Rs21.70 per share in the previous year. Net sales for the fourth quarter rose 19 percent year-on-year and 11 percent quarter-on-quarter to Rs53.36 billion, while full-year revenue increased 8 percent to Rs191.66 billion. Hydrocarbon sales reached a record 41.28 million barrels of oil equivalent (boe) during FY26, supported by the commencement of production from the Spinwam field in the Waziristan Block, contributing 50 million cubic feet per day (mmcfd), and the Shams discovery in the Mari Field, producing more than 35 mmcfd. The report noted that exploration expenditure climbed 58 percent year-on-year and 70 percent quarter-on-quarter to Rs8.28 billion during the quarter, while operating expenses increased 31 percent year-on-year to Rs12.29 billion. During the year, the companyâ€™s exploration portfolio expanded to 72 licences covering 155,276 square kilometres, while its reserve replacement ratio reached 375 percent following the addition of 157 million boe of 2P reserves. According to AKD Securities, the principal driver behind the record quarterly earnings was a Rs18.34 billion super tax reversal booked during the quarter pursuant to the Federal Constitutional Courtâ€™s judgment. As a result, the companyâ€™s effective tax rate for FY26 turned negative 5 percent, compared with 26 percent in FY25. Trade receivables remained broadly unchanged at Rs86 billion on an annual basis but declined 7 percent quarter-on-quarter, indicating an improvement in recoveries. The report also highlighted Mari Energiesâ€™ diversification initiatives during FY26. Mari Technologies commissioned its first 5MW Tier III data centre, Karakoram-01, in Islamabad, while Mari Minerals completed more than 45,000 metres of drilling during the year. Copyright Business Recorder, 2026

Date: 2026-08-08

Details: Published August 8, 2026 Updated about 3 hours ago KARACHI: 1LINK (Private) Limited, Pakistanâ€™s first fully licensed and designated Payment System Operator (PSO), welcomed its newly constituted Board of Directors to their first Board meeting on July 31, 2026. The meeting marked the commencement of the new Boardâ€™s tenure and reaffirmed 1LINKâ€™s commitment to strong corporate governance, strategic leadership, and institutional excellence. The Board deliberated on setting the foundation for the Companyâ€™s next phase of growth and continued contribution to Pakistanâ€™s evolving digital payments landscape. The new Board of Directors comprises: Atif Bajwa (President & CEO, Bank Alfalah Limited) â€“ Chairman of the Board, Nassir Salim (President & CEO, Habib Bank Limited) â€“ Nominee Director, Yousaf Hussain (President & CEO, Faysal Bank Limited) â€“ Nominee Director, Mujahid Ali (Chief Technology and Digital Transformation, Allied Bank Limited) â€“ Nominee Director, Abdul Wahid Sethi (Chief Financial Officer, National Bank of Pakistan) â€“ Nominee Director, Ali Naqvi (Chief Digital Officer, Askari Bank Limited) â€“ Nominee Director, Ammara Masood (Global Industry GM-Banking and Financial Services, Systems Limited) â€“ Independent Director, Tania Aidrus (CEO, Waseela Global) â€“ Independent Director, To be decided â€“ Independent Director, Najeeb Agrawalla (CEO 1LINK). Following the Board meeting, 1LINK hosted a special Town Hall, providing 450+ employees with the opportunity to meet the new Board. During the session, Atif Bajwa, Chairman of the Board addressed the employees and shared the Boardâ€™s collective vision for 1LINKâ€™s future, emphasizing leadership, collaboration, innovation, and the critical role of its people in driving the Companyâ€™s continued success. Welcoming the Board, Najeeb Agrawalla, CEO 1LINK, congratulated the Directors on the commencement of their tenure and expressed confidence in the Boardâ€™s strategic guidance, as 1LINK continues to strengthen Pakistanâ€™s national payments infrastructure and deliver greater value to the financial ecosystem. Copyright Business Recorder, 2026

Date: 2026-08-07

Details: Published August 7, 2026 Updated a day ago KARACHI: Rashid Mahmood Langrial, Chairman of the Federal Board of Revenue (FBR), has said that Pakistanâ€™s tax system has been fundamentally transformed over the past two years through artificial intelligence (AI) and digital reforms, warning taxpayers that traditional practices and informal shortcuts are no longer effective. Addressing at a dinner hosted by the Businessman Panel Progressive (BMPP), Chairman FBR urged businesses community and individual taxpayers to hold detailed consultations with their tax consultants before filing their income tax returns as tax consultants play a vital role in helping clients understand complex tax laws and legally minimise their tax liabilities within the framework of the law. On the occasion, Saquib Fayyaz Magoon Senior Vice President FPCCI and Chairman BMPP, Khurram Ijaz General Secretary BMPP, Asif Sakhi Vice President FPCCI, Shabbir Mansha Member Supreme Council BMPP, Sham Lal Chairman Pakistan Ginners Association, Khushnood Afta Sheikh and others were also present. Chairman FBR said that in the past, some taxpayers relied on the assumption that underreporting income or making inaccurate declarations carried a low risk of detection because the FBR lacked the manpower and technological capacity to scrutinise every return. â€œHowever, that assumption is no longer valid as the FBR now has the capability to automatically review every tax return using advanced digital tools,â€ he informed. He said that the integration of third-party data has sharply reduced the scope for inaccurate declarations, while use of AI and reforms in the tax system has not only improved administrative processes, the induction of private-sector professionals has significantly strengthened the tax authorityâ€™s monitoring capabilities. Langrial said the transition towards a faceless tax administration has diminished the influence of personal contacts and recommendations that were previously perceived to affect tax matters. He advised the business community to seek only lawful and technically sound guidance from their tax consultants, cautioning against relying on outdated practices or advice that falls outside the legal framework. â€œIf taxpayers continue to follow old methods during the current filing season, they may face significant and costly financial consequences,â€ Chairman FBR warned. Reaffirming the FBRâ€™s commitment to a transparent and technology-driven tax system, he said that the ongoing digital reforms are aimed at strengthening revenue collection and improving the countryâ€™s economic stability. He urged taxpayers to complete their tax affairs transparently and file their returns well before the prescribed deadlines. Tax consultants and businesses in the past often assumed that the FBRâ€™s limited technological capability and manpower meant there was little chance of being caught for underreporting income or understating tax liabilities. However, with the introduction of AI and the implementation of a faceless tax administration, the system has changed fundamentally, he mentioned. Chairman FBR said that documenting the economy requires businesses to purchase goods and services only from registered companies and individuals and this would improve transparency in the tax system and help broaden the countryâ€™s tax base. He informed that various proposals are under consideration to resolve the issues of tax refund delay aimed to strengthen businessesâ€™ cash flows. On the occasion, Saquib Fayyaz Magoon said that most of the issues raised by trade bodies have received a positive response and several matters were resolved during the meeting with chairman FBR held on Tuesday in Karachi. Delays in refunds were a major issued and the chairman has already directed the FBR officials to improve the refund mechanism. He urged the tax authority to introduce a faster refund mechanism for the exporters, arguing that it creates shortage of cash flow and delays force small exporters to absorb refund amounts into their costs, making them less competitive in international markets. Copyright Business Recorder, 2026

Date: 2026-08-07

Details: â€¢ The Sukuk issue was oversubscribed 2.24x Published August 7, 2026 Updated about 22 hours ago Daewoo Pakistan Express Bus Services Limited, one of the countryâ€™s leading inter-city transport service providers, has successfully raised Rs4 billion through the issuance of its third short-term Sukuk, with the Shariah-compliant offering drawing subscriptions worth 2.24 times the amount on offer. â€œWe are proud to announce Pak Omanâ€™s continued role in supporting Daewoo Pakistan Express Bus Services Limited with the successful issuance of its PKR 4 billion Short-Term Sukuk â€“ Issue 3,â€ said Pak Oman Investment Company Ltd in a post on a social media platform on Thursday. Pak Oman Investment Company Limited, acting as mandated joint lead financial advisor, arranger and investment agent, said that the issue was oversubscribed 2.24x, â€œreflecting strong investor confidence in Daewoo and Pakistanâ€™s capital marketsâ€. â€œWe are committed to enabling Shariah-compliant solutions that advance clean, sustainable, and efficient transportation in Pakistan,â€ it added. Daewoo Pakistan Express Bus Service Limited had earlier issued two short-term Sukuk instruments. The first raised Rs2 billion in December 2025, and the second raised Rs4 billion in March 2026. The company, established in 1997, is a leading intercity transport and logistics operator in Pakistan, managing over 400 buses, 200 cargo trucks, and 200+ delivery centres. It has expanded into regulated public sector mass transit projects, including Lahore Feeder, Multan Metro, Orange Line Lahore, BRT Peshawar, and BRT Karachi. Whatâ€™s a Sukuk? A Sukuk is basically the Islamic version of a government bond. Normally, when governments need money, they borrow it by selling bonds. Investors lend the government cash and earn interest in return. But under Islamic finance, charging or paying interest isnâ€™t allowed. So instead, Sukuk are structured around real assets that generate income, such as rent, allowing investors to earn Shariah-compliant returns.

Date: 2026-08-07

Details: â€¢ Trumpâ€™s remarks underscore a widening debate in Washington over how aggressively to police a fast-moving AI industry Published August 7, 2026 Updated about 11 hours ago WASHINGTON: U.S. President Donald Trump said the U.S. Congress wants to regulate the AI industry â€œout of business,â€ according to a Punchbowl News interview published on Friday. Trumpâ€™s remarks underscore a widening debate in Washington over how aggressively to police a fast-moving AI industry that has largely operated without new federal rules. Lawmakers have released a range of proposals that have not yet moved forward, including a bill that would require developers of the most powerful AI models to submit them for independent security audits. The debate over AI regulation became more urgent in the last few weeks, after developers OpenAI and Anthropic said their AI systems escaped containment during security testing. The OpenAI agent triggered a hack that compromised the infrastructure of the AI startup Hugging Face, a platform where developers store and collaborate on code for AI models. Govt unveils National AI Initiative with seven innovation hubs The incident signaled that AIâ€™s expanding capabilities are already fueling the security threat experts long feared and that even top developers can be caught off guard by flaws their models can exploit. The Commerce Departmentâ€™s National Institute of Standards and Technology separately proposed guidelines on Friday for evaluating AI systems, and asked for public feedback. NISTâ€™s job is to write standards for science and technology. The guidelines are for organizations that want to â€œmeasure the impact of their AI systems,â€ according to NIST. Nvidia in talks with OpenAI to guarantee $250 billion financing for data center, WSJ reports The guidelines are â€œthe first step in standardizing the way the federal government evaluates AI systems both for itself and for its contractors,â€ said Ike Harris, executive director of the Washington, D.C.-based Frontier Security Institute, a nonprofit focused on AI and national security.

Date: 2026-08-07

Details: â€¢ Grand Theft Auto VI launches November 19, with 'exceptional' pre-orders and billions expected, following GTA V's 230 million units Published August 7, 2026 Updated about 14 hours ago Take-Two Interactive maintained its annual bookings forecast on Friday, but reiterated the November 19 launch date for its highly anticipated title â€œGrand Theft Auto VIâ€, bringing the blockbuster release one step closer to fans. Shares of the company were up marginally in volatile premarket trading. Take-Two projected current-quarter bookings below Wall Street estimates, signaling continued weakness from the lack of strong new titles ahead of the â€œGTA VIâ€ release. The videogame publisher began taking pre-orders for â€œGTA VIâ€ on June 25, but did not provide any material detail on demand trends. Take-Two CEO Strauss Zelnick only said that pre-orders have had an â€œexceptional startâ€ in the post-earnings call. The game is expected to be a gold mine for the company this year, raking in billions of dollars within days of its launch, thanks to the franchiseâ€™s popularity. â€œGTA Vâ€, the predecessor, is one of the best-selling games ever, and has sold nearly 230 million units since its 2013 launch. Take-Two prices â€˜Grand Theft Auto VIâ€™ at $79.99, sticks to November 19 launch Investors have been closely watching for any announcement around an online multiplayer mode for â€œGTA VIâ€, hoping that Take-Two would replicate the success of â€œGTA V Onlineâ€, which has been a consistent source of revenue for the company. The online version helped the company keep players engaged long after the release of â€œGTA Vâ€. The live-service components of a title typically allow companies to generate more income through playersâ€™ purchases of in-game currency. â€œSome of the weakness (in shares) may be the lack of incremental detail about â€˜GTA VIâ€™,â€ said MoffettNathanson analyst Clay Griffin. â€œWhatâ€™s really important for Take-Two is some notion of the plan for how â€˜GTA Onlineâ€™ will evolve. Itâ€™s pretty well understood that â€˜GTA VIâ€™ will do just fine, if not better than expectations. But itâ€™s more about the longevity of opportunity.â€ Take-Two said it expects fiscal 2027 bookings of $8 billion to $8.20 billion. Analysts on average were expecting a 31.9% jump to $8.86 billion, according to data compiled by LSEG. The company forecast second-quarter bookings between $1.62 billion and $1.67 billion, below analystsâ€™ average estimate of $1.85 billion. For the first fiscal quarter ended June 30, net bookings stood at $1.39 billion, a touch above market estimates of $1.38 billion.

Date: 2026-08-06

Details: Written by Faisal Shahnawaz in Auction, Taxation Draft amendments require bidders to confirm physical inspection of auctioned goods before participating in Customs auctions ISLAMABAD: The Federal Board of Revenue (FBR) has proposed making it compulsory for bidders participating in Pakistan Customs auctions to submit a written undertaking confirming that they have physically inspected the auctioned goods before placing a bid. The proposal has been introduced through SRO 1277(I)/2026, issued on Wednesday as draft amendments to the Customs Rules, 2001, with the objective of improving transparency, strengthening the auction process and reducing disputes after the sale of goods. Goods to Be Available for Inspection Under the proposed amendments, auctioneers will be required to make auctioned goods available for inspection by prospective bidders for at least three days before the scheduled auction. The FBR said the requirement is intended to provide bidders with sufficient opportunity to assess the quality, condition and nature of the goods before participating in the auction process. Mandatory Undertaking Before Bidding The draft rules require every bidder to submit a written undertaking on the official letterhead of the bidding firm or company before taking part in an auction or any subsequent re-bidding process. The undertaking must be duly signed and stamped by the authorised signatory of the firm or company. Declarations Required from Bidders Under the proposed format, bidders will be required to declare that: â€¢ They have personally, or through an authorised representative, physically inspected the goods before participating in the auction. â€¢ The inspection was carried out on a specified date and at the designated location. â€¢ They have examined the existing physical condition of the goods. â€¢ They will not raise any objection, claim, dispute or seek revision of the bid amount, compensation or cancellation of the auction on the basis of any alleged discrepancy in the goods after submitting the bid, its acceptance or taking possession of the goods. Details to Be Included in the Undertaking The proposed undertaking will require bidders to provide the following information: â€¢ Name of the bidder or authorised representative. â€¢ Name of the bidding firm or company. â€¢ Registered or business address. â€¢ Computerised National Identity Card (CNIC) number. â€¢ National Tax Number (NTN) or registration number. â€¢ Contact details. â€¢ Official stamp or seal. â€¢ Signatures of the bidder and authorised representative, where applicable. Where a representative participates on behalf of a bidder, the undertaking must include the CNIC numbers of both the bidder and the authorised representative. FBR Seeks Greater Transparency According to the FBR, the proposed amendments are aimed at ensuring bidders are fully aware of the condition of auctioned goods before submitting their bids. By making physical inspection mandatory and requiring a formal undertaking, the tax authority intends to minimise post-auction disputes, discourage requests for price revisions or auction cancellations, and enhance transparency and efficiency in the Customs auction process. The draft amendments issued through SRO 1277(I)/2026 will come into force after completion of the prescribed legal process under the Customs Rules, 2001.

Date: 2026-08-06

Details: Written by Hamza Shahnawaz in Taxation Small chocolates, candies and toffees priced up to Rs5 per piece may display retail price and sales tax on packs of up to 100 pieces. ISLAMABAD: The Federal Board of Revenue (FBR) has issued Sales Tax General Order (STGO) No. 15 of 2026 to clarify the printing requirements prescribed under Sales Tax General Order No. 08 of 2026, providing relief to manufacturers and importers of confectionery products facing practical difficulties in complying with labeling requirements. According to the latest STGO, the FBR reiterated that all manufacturers and importers of goods listed in the Third Schedule to the Sales Tax Act, 1990 must ensure that the retail price and the amount of sales tax are printed or embossed on their products in accordance with the mandatory specifications outlined in Annex-B of STGO No. 08 of 2026. The Board said it had received several representations from industry stakeholders highlighting practical challenges in implementing these requirements for confectionery products, including chocolates, candies, toffees and similar items, due to the extremely small size of individual wrappers and the limited printable surface available on them. To address these concerns, the FBR has clarified that where it is not practically possible to print the retail price and sales tax amount on each individual confectionery item, manufacturers may instead print or emboss the required information on the outer package. The concession will apply only to packages containing not more than 100 individual pieces, provided that the maximum retail price of each piece does not exceed Rs5 and all other provisions of the Sales Tax Act, 1990, and Sales Tax General Order No. 08 of 2026 are fully complied with. The tax authority emphasized that the printed sales tax amount must remain clear, legible, conspicuous and indelible, while continuing to meet all mandatory printing specifications prescribed under the earlier general order. The clarification is expected to facilitate confectionery manufacturers by addressing operational difficulties without compromising tax documentation and consumer information requirements. It also supports the FBRâ€™s broader objective of strengthening sales tax compliance while ensuring practical implementation of its regulatory framework.

Date: 2026-08-06

Details: Written by Faisal Shahnawaz in Taxation Benchmark framework distinguishes core features of Pakistanâ€™s income tax system from tax expenditures and preferential concessions. ISLAMABAD: The Federal Board of Revenue (FBR) has outlined Pakistanâ€™s benchmark income tax framework under the Income Tax Ordinance, 2001, setting out the fundamental principles used to assess the countryâ€™s tax system. The framework defines the unit of taxation, tax base, benchmark tax rates, constitutional exemptions and other structural features that form the basis for measuring tax expenditures. According to the FBR, the benchmark framework distinguishes the normal components of Pakistanâ€™s income tax system from policy-driven tax expenditures, such as exemptions, concessions and preferential tax treatments. Unit of Taxation The FBR stated that the unit of taxation is the â€œpersonâ€, as defined under Section 2(42) of the Income Tax Ordinance, 2001. The definition covers: â€¢ Individuals â€¢ Companies â€¢ Associations of Persons (AOPs) Each person is assessed separately on their taxable income in accordance with the provisions of the Ordinance. Tax Year and Basis of Taxation According to the Board, Pakistanâ€™s tax year runs from July 1 to June 30. Income is taxed on an accrual basis, meaning it becomes taxable when it is earned rather than when payment is received. Tax Base Under Section 9 of the Income Tax Ordinance, taxable income comprises earnings from all recognised sources, including: â€¢ Salary â€¢ Property â€¢ Business â€¢ Capital gains â€¢ Other sources The FBR further clarified that: â€¢ Resident taxpayers are liable to tax on their worldwide income. â€¢ Non-resident taxpayers are taxed only on income derived from sources within Pakistan. Benchmark Income Tax Rates The benchmark tax rates are the statutory rates prescribed in Schedule I of the Income Tax Ordinance, 2001. According to the FBR, the benchmark framework incorporates: â€¢ An average effective income tax rate of 24.5% for non-banking corporate entities. â€¢ An average effective income tax rate of 39% for banking companies. The Board noted that variations in tax rates contained within Schedule I are regarded as integral elements of the benchmark tax system rather than tax expenditures. Government Income Exemptions The FBR explained that Section 49 exempts the income of the Federal Government from income tax. Similarly, the income of provincial and local governments is exempt, except where it is generated through business activities conducted outside their respective jurisdictions. According to the Board, these exemptions arise from the constitutional framework and therefore form part of the benchmark tax system instead of being treated as tax expenditures. Double Taxation Relief The benchmark framework also includes provisions designed to prevent the same income from being taxed more than once. These structural measures include: â€¢ Foreign tax credits under Section 103. â€¢ Exemption for inter-corporate dividends. The FBR considers these provisions essential components of the income tax system rather than preferential tax concessions. Constitutional Exclusions The Board noted that certain exclusions from the federal tax base are mandated by the Constitution. These include: â€¢ Agricultural income, which falls outside the scope of federal income tax. â€¢ Transitional tax treatment applicable to territories incorporated into the federal tax regime following constitutional amendments. The FBR emphasised that these constitutional arrangements are not regarded as tax expenditures. International Commitments The benchmark framework also excludes tax exemptions arising from Pakistanâ€™s international obligations, including those granted under: â€¢ Diplomatic conventions. â€¢ United Nations agreements. â€¢ International development assistance agreements. According to the FBR, these exemptions are required under international commitments and therefore do not constitute tax expenditures. Loss Carry-Forward Provisions The Board also treats the carry-forward and carry-back of tax losses as a normal feature of income measurement. Accordingly, provisions allowing taxpayers to offset eligible losses against taxable income in previous or subsequent tax years are regarded as structural elements of the benchmark tax system. Basis for Measuring Tax Expenditures The FBR stated that the benchmark income tax framework provides the foundation for identifying and measuring tax expenditures in Pakistan. By distinguishing the standard features of the Income Tax Ordinance from policy-based exemptions, concessions and preferential treatments, the framework enables a more transparent assessment of the fiscal cost of tax incentives and supports the evaluation of Pakistanâ€™s overall tax policy.

Date: 2026-08-06

Details: Written by Faisal Shahnawaz in Taxation Section 114B empowers the FBR to impose enforcement measures on eligible non-filers after due legal process. ISLAMABAD: Taxpayers who fail to file their income tax returns may face a range of enforcement measures under Section 114B of the Income Tax Ordinance, 2001, including the blocking of mobile SIMs, disconnection of utility services and restrictions on foreign travel. The Federal Board of Revenue (FBR) has been authorised to issue an Income Tax General Order against persons who are legally required to file income tax returns but fail to do so and do not appear on the Active Taxpayers List (ATL). FBR Empowered to Issue Income Tax General Orders Section 114B empowers the FBR to initiate enforcement action against non-filers through an Income Tax General Order. Under the law, the Board may impose one or more of the following restrictions: â€¢ Disable mobile phones or mobile SIMs. â€¢ Discontinue electricity connections. â€¢ Discontinue gas connections. â€¢ Restrict foreign travel for Pakistani citizens. The measures form part of the governmentâ€™s efforts to improve tax compliance and encourage eligible persons to file their annual income tax returns. Exemptions from Foreign Travel Restrictions The law provides that certain categories of individuals are exempt from restrictions on foreign travel. These include: â€¢ Holders of a National Identity Card for Overseas Pakistanis (NICOP). â€¢ Minors. â€¢ Students. â€¢ Persons travelling abroad to perform Hajj or Umrah. â€¢ Any other class of persons notified by the FBR. Conditions Before Enforcement Action Section 114B also prescribes safeguards that must be fulfilled before a taxpayer can be included in an Income Tax General Order. The FBR may only proceed after: 1. Issuing a notice under Section 114(4) requiring the taxpayer to file an income tax return. 2. Allowing the prescribed time for compliance to expire. 3. Establishing that the taxpayer has failed to submit the required return. These conditions ensure that enforcement measures are taken only after the taxpayer has been given an opportunity to comply with the legal requirements. Restoration of SIMs and Utility Connections The FBR or the relevant Commissioner of Inland Revenue may order the restoration of mobile SIMs and utility connections where it is satisfied that: â€¢ The taxpayer has subsequently filed the required income tax return; or â€¢ The person was not legally required to file a return under the Income Tax Ordinance, 2001. Other Legal Action May Still Apply Section 114B makes it clear that enforcement through an Income Tax General Order does not prevent the FBR from taking any other action available under the Income Tax Ordinance. Accordingly, non-filers may also be subject to: â€¢ Penalties for non-compliance. â€¢ Default surcharges, where applicable. â€¢ Audit or enforcement proceedings. â€¢ Other legal measures prescribed under Pakistanâ€™s tax laws. FBR Strengthens Compliance Measures The provisions of Section 114B form part of the FBRâ€™s broader strategy to expand the tax base and improve documentation of the economy. By linking tax return filing with access to certain public services and overseas travel, the tax authority aims to encourage eligible taxpayers to remain compliant and ensure their inclusion on the Active Taxpayers List.

Date: 2026-08-06

Details: Written by Faisal Shahnawaz in Taxation Electronic filing through the IRIS portal remains mandatory, while companies must submit financial statements in a machine-readable format. ISLAMABAD: The Federal Board of Revenue (FBR) has specified the documents and information that taxpayers must submit along with their annual income tax return for Tax Year (TY) 2026 under Section 114 of the Income Tax Ordinance, 2001. The tax authority has also reaffirmed that income tax returns must be filed electronically through the IRIS portal. In addition, companies filing returns from Tax Year 2026 onwards will be required to submit their financial statements in an electronically readable format. Documents Required with TY2026 Income Tax Return Under Section 114(2) of the Income Tax Ordinance, 2001, every income tax return must: â€¢ Be filed in the prescribed form. â€¢ Be accompanied by the prescribed annexures, statements and supporting documents notified by the FBR. â€¢ Contain all relevant particulars and information required in the return, including a declaration of the records maintained by the taxpayer. â€¢ Be signed by the taxpayer or an authorised representative, where permitted under Section 172 of the Income Tax Ordinance. â€¢ Be accompanied by evidence of payment of any tax due as calculated in the return. â€¢ Include a Wealth Statement as required under Section 116. â€¢ Include a Foreign Income and Assets Statement where required under Section 116A. Electronic Filing Remains Mandatory The FBR has made electronic filing through the IRIS portal compulsory for taxpayers required to submit returns under Section 114. The Board has also been authorised to prescribe rules governing: â€¢ Electronic filing procedures. â€¢ Verification of returns. â€¢ Digital signatures. â€¢ Submission of statements and supporting documents. â€¢ Other matters relating to online filing. Furthermore, companies filing returns for Tax Year 2026 and subsequent years must submit their financial statements in an electronically readable file format, replacing conventional document formats. Income Tax Return Deadlines The due dates for filing income tax returns for Tax Year 2026 are as follows: September 30, 2026 Applicable to: â€¢ Salaried individuals. â€¢ Business individuals. â€¢ Associations of Persons (AOPs). â€¢ Companies with a special tax year. December 31, 2026 Applicable to: â€¢ Companies following the normal financial year ending June 30. FBR Calls for Complete Documentation The FBR has advised taxpayers to ensure that all prescribed documents, declarations and supporting statements accompany their income tax returns to avoid deficiencies, delays in processing or potential penalties under the Income Tax Ordinance, 2001. According to the tax authority, the mandatory electronic filing system, together with the requirement to submit wealth statements, evidence of tax payment and, where applicable, foreign income and assets statements, is intended to strengthen tax documentation, improve transparency and enhance the efficiency of Pakistanâ€™s tax administration system.

Date: 2026-08-06

Details: Published August 6, 2026 Updated about 2 hours ago NEW YORK: The S&P 500 and the Dow traded at all-time highs on Wednesday on hopes of a Middle East peace breakthrough, while the tech-heavy Nasdaq struggled to stay afloat, limited by a slide in SpaceX and AMD after the upbeat forecasts issued by the companies failed to impress investors. Elon Musk-led SpaceXâ€™s revenue nearly doubled and operating losses narrowed in its first earnings report since going public, fueled by its booming Starlink satellite communications and AI businesses. But the rocket companyâ€™s shares slid 7.3 percent after executives flagged the spending spree underpinning its lofty ambitions was far from over. Shares could face additional pressure from the expiry of the stockâ€™s post-IPO lock-up period starting on Thursday. Muskâ€™s other company, Tesla, slipped 1.3 percent. â€œThis is the culmination of the story of this entire earnings season. SpaceX beat analystsâ€™ expectations on revenue, but spending on AI is getting out of hand, with no signs of slowing down anytime soon,â€ said Nic Puckrin, cross-asset analyst and founder of Coin Bureau. Advanced Micro Devices forecast quarterly revenue above estimates, reflecting strong AI demand. However, shares slipped 6.5 percent, suggesting investors were looking for a stronger outlook to justify the stockâ€™s 142 percent jump this year. Rival Nvidiaâ€™s shares, which have lagged AMD this year, rose 3.7 percent, also underpinned by SpaceXâ€™s plans to use the companyâ€™s hardware exclusively to build its data centers. Five of the 11 S&P sectors were trading higher. Materials led the gains with a 1.5 percent rise, tracking a 4 percent jump in gold and silver prices. Energy stocks lagged with a near 2.1 percent fall. Wednesdayâ€™s moves built on Wall Streetâ€™s recent rally that took the benchmark S&P 500 and the blue-chip Dow to record highs following strong forecasts from AI-hyperscalers including Microsoft and Amazon in the previous week. At 11:38 a.m. ET, the Dow Jones Industrial Average rose 435.60 points, or 0.81 percent, to 54,521.48, the S&P 500 gained 8.34 points, or 0.11 percent, to 7,744.86 and the Nasdaq Composite lost 10.68 points, or 0.04 percent, to 26,574.32. Investors also weighed a slew of earnings from other sectors. Drugmaker Eli Lilly was up 2.8 percent after raising its full-year revenue forecast, while Disney rose 2.2 percent after beating third-quarter profit expectations. On the data front, US private payrolls growth slowed in July, as per the ADP national employment report. The bigger focus will be on the official non-farm payrolls figures on Friday. Data has broadly reflected robust economic performance, but with Middle East tensions keeping energy costs elevated and the Federal Reserve offering no forecasts on monetary policy, uncertainty persists. Minneapolis Fed President Neel Kashkariin an interview with CNBC said he believed now is the time to start slowly moving interest rates higher. At least two more top Fed officials are expected to speak later in the day.Among others, drug developer Charles River Laboratories jumped 11.8 percent after raising its annual profit forecast, while medical device maker Insulet tanked 20 percent after lowering its annual sales growth forecast. Declining issues outnumbered advancers by a 1.2-to-1 ratio on the NYSE and by a 1.37-to-1 ratio on the Nasdaq. The S&P 500 posted 33 new 52-week highs and two new lows, while the Nasdaq Composite recorded 86 new highs and 50 new lows.

Date: 2026-08-06

Details: Published August 6, 2026 Updated about 2 hours ago LAHORE: ChargÃ© dâ€™Affaires of the Embassy of the Kingdom of the Netherlands, Hajo Provo Kluit, has said that the Lahore Chamber of Commerce & Industry (LCCI) is a vital bridge between the business community and the public sector, making it an indispensable partner for strengthening Pakistan-Netherlands economic relations. He said with more than 48,000 members representing diverse sectors, the LCCI possesses valuable market knowledge that can help Dutch companies identify business opportunities and reliable local partners. He emphasized that regular dialogue between the Embassy and LCCI is essential to further expand bilateral trade and investment, adding that successful Dutch companies operating in Pakistan have largely been small and medium-sized family businesses that succeeded by establishing strong partnerships with local enterprises. He stressed that helping Dutch companies connect with trustworthy Pakistani partners would open new avenues of economic cooperation and joint ventures. He expressed these views during his visit to the LCCI where he was warmly received by Acting President LCCI Tanveer Ahmed Sheikh. Senior Economic Advisor at the Embassy of the Kingdom of the Netherlands, Ms. Maria Erfan, also accompanied him. Hajo Provo Kluit said the Netherlands and Pakistan enjoy a long-standing trade relationship that predates the formal diplomatic ties between the two countries. He pointed out that while several major Dutch multinational companies are operating in Pakistan, many of the most successful new entrants have been small and medium-sized family-owned businesses that developed strong relationships with reliable local partners. Welcoming the Dutch delegation, Acting President LCCI Tanveer Ahmed Sheikh said the visit reflected the growing importance of economic cooperation between Pakistan and the Netherlands. He said regular engagement between the public and private sectors is essential for promoting trade, encouraging investment and building long-term business partnerships. Tanveer said Pakistan greatly values its longstanding friendship with the Netherlands and appreciates cooperation in areas including agriculture, dairy, water management, logistics, renewable energy and sustainable development. He added according to the State Bank of Pakistan, bilateral trade between the two countries reached approximately USUSD1.9 billion during 2025-26, with Pakistanâ€™s exports standing at USUSD1.44 billion and imports from the Netherlands at USUSD505 million. He said that the existing trade volume has the potential to increase to USUSD5 billion through enhanced cooperation and stronger business linkages. He said that Pakistanâ€™s major exports to the Netherlands include home textiles, hosiery, woven fabrics and rice, while imports comprise petroleum products, malt extracts, iron and steel scrap, medical equipment and dairy products. He emphasized that Pakistan possesses significant export potential in value-added garments, knitwear, denim, leather products, sports goods, surgical instruments, furniture, processed food, halal meat, seafood, software and IT services. Copyright Business Recorder, 2026

Date: 2026-08-06

Details: Published August 6, 2026 Updated about 2 hours ago NEW YORK: Oil prices were mixed on Wednesday, with Brent settling up slightly but the US contract edging lower, as investors weighed revived expectations of a de-escalation in US-Iran hostilities that could restore shipping traffic in the Strait of Hormuz and oil flows in the Middle East. Brent crude futures settled up 9 cents, or 0.11 percent, at USD 79.45 a barrel. US West Texas Intermediate futures fell 55 cents, or 0.73 percent, to USD 75.22. US President Donald Trump said there was an â€œall-day negotiationâ€ on Tuesday with Iran, characterizing the talks positively while also threatening to hit Tehran â€œreally hardâ€ if a deal were not reached. Iran denied that peace talks were under way. Its Foreign Ministry said on Wednesday that Iran and Oman have reached an understanding on how to manage the Strait of Hormuz, and a joint announcement is being finalized. Before the war started at the end of February, about 20 percent of the worldâ€™s oil and liquefied natural gas passed through the strait. The market remained optimistic but cautious, said Phil Flynn, senior analyst with Price Futures Group. â€œThis agreement seems as tenuous as past agreements, and as we know, none of those have held up for very long.â€ Reports of progress in efforts to end the war drove prices down 5 percent on Tuesday, with Brent closing below USD 80 a barrel for the first time since July 13. â€œThe main sticking point appears to be whether Iran will continue to insist on a degree of control over the waterway, and whether the US will stand its ground and refuse that outcome,â€ IG analysts said in a note. US crude inventories rise A build in US crude inventories, as refineries eased their processing, slightly pressured prices, as did a slight rise in imports. Crude stockpiles rose by 2.5 million barrels to 407 million barrels last week, data from the Energy Information Administration showed on Wednesday. Analysts had expected a draw of 1.5 million barrels. The US oil benchmark was under more pressure as oil inventories at the Cushing, Oklahoma, delivery hub rose more than the market expected last week, said Andrew Lipow, president of Lipow Oil Associates. The losses were limited by shipping risks in the Red Sea after Yemenâ€™s Iran-aligned Houthi rebels said on Wednesday they had attacked a Saudi oil tanker off Yanbu, a port for Saudi crude oil exports. Apart from disruption in the Gulf, a surge in attacks on Russian and Ukrainian ships, ports and export terminals in the Black Sea is disrupting global commodity supplies. Disruption has spread to the Caspian Pipeline Consortium, the main export route for Kazakh crude oil, which has repeatedly suspended operations this week because of safety concerns and a lack of tankers, numerous trading sources said. Elsewhere, China further relaxed controls on fuel exports in August.

Date: 2026-08-05

Details: Written by Hamza Shahnawaz in Taxation Advance adjustable tax will apply to weddings, seminars, exhibitions and other events held at designated venues under the updated Income Tax Ordinance. ISLAMABAD: The Federal Board of Revenue (FBR) has imposed a 10% adjustable withholding tax on marriage functions and other social gatherings under the updated Income Tax Ordinance, 2001, applicable to Tax Year (TY) 2027, starting from July 1. 2026. The updated Income Tax Ordinance, incorporating amendments introduced through the Finance Act, 2026, provides that advance tax will be collected on the total bill of specified functions held at designated venues. Advance tax to be collected on event bills Under Section 236CB of the Income Tax Ordinance, every prescribed person is required to collect advance tax at the rate specified in the First Schedule from any person arranging or holding a function at: â€¢ Marriage halls â€¢ Marquees â€¢ Hotels â€¢ Restaurants â€¢ Commercial lawns â€¢ Clubs â€¢ Community centres â€¢ Any other venue used for such functions The tax will be collected on the total amount of the bill charged for the event and will be adjustable against the taxpayerâ€™s final income tax liability. Catering and related services also covered The law also extends the withholding tax requirement to payments for food, catering, decoration and other services provided by third-party vendors. Where such services are supplied by another service provider, the prescribed person operating the venue must collect advance tax on the payments made for those services at the prescribed rate. The tax collected under these provisions will remain adjustable against the recipientâ€™s final tax liability. Wide definition of â€˜functionâ€™ Section 236CB adopts a broad definition of the term â€œfunctionâ€, extending the tax beyond wedding ceremonies to include a variety of social and commercial events. The definition covers: â€¢ Wedding-related events â€¢ Seminars â€¢ Workshops â€¢ Training sessions â€¢ Exhibitions â€¢ Concerts â€¢ Shows â€¢ Parties â€¢ Any other similar gathering This wider scope means the withholding tax applies to a broad range of organised events held at designated venues. Venue operators responsible for tax collection The Ordinance defines a â€œprescribed personâ€ as the owner, leaseholder, operator or manager of a marriage hall, marquee, hotel, restaurant, commercial lawn, club, community centre or any other venue used for such functions. These persons will be responsible for collecting the advance tax from customers and depositing it with the FBR in accordance with the provisions of the Income Tax Ordinance. Tax rate for TY 2027 According to Division XI of Part IV of the First Schedule to the Income Tax Ordinance, 2001, the withholding tax rate under Section 236CB has been set at 10% for Tax Year 2027. The measure forms part of the Finance Act, 2026 amendments aimed at expanding the advance tax regime, improving documentation of high-value transactions and strengthening tax compliance relating to weddings, corporate events and other organised gatherings.

Date: 2026-08-05

Details: Written by Faisal Shahnawaz in Automotive, Taxation Intelligence-led operations during July 2026 recover luxury vehicles, foreign cigarettes and other contraband in a major anti-smuggling crackdown. ISLAMABAD: The Collectorate of Customs Enforcement Islamabad seized 24 smuggled vehicles and a large quantity of contraband worth more than Rs915.5 million during intelligence-based anti-smuggling operations carried out throughout July 2026. The operations form part of Pakistan Customsâ€™ intensified campaign against organised smuggling networks aimed at protecting legitimate trade, safeguarding government revenue and supporting the national economy. Intelligence-led crackdown According to an official statement, the enforcement actions were conducted under the close supervision of the senior leadership of Customs Enforcement Islamabad. Acting on credible intelligence, anti-smuggling squads intercepted high-value smuggled vehicles along with foreign-origin cigarettes, cosmetics, tyres, cloth and other prohibited goods during coordinated operations across the Islamabad region. The department said the intelligence-led strategy enabled enforcement teams to target organised smuggling networks and disrupt the movement of illicit goods before they entered domestic markets. Twenty-four luxury vehicles confiscated Among the vehicles seized during the month were several high-end and premium models, including Toyota Land Cruiser variants, a Jeep Wrangler, Range Rover, Mercedes-Benz, Toyota Camry, Toyota Crown, Toyota FJ Cruiser, Honda Accord, Volkswagen, Toyota Prius, Toyota Wish, Toyota Surf, Toyota Passo, Toyota Vitz, Daihatsu Mira and Suzuki Alto vehicles of different model years. The seizure of these vehicles represents one of the largest anti-smuggling actions involving luxury automobiles undertaken by Customs Enforcement Islamabad in recent months. Contraband worth over Rs915.5 million recovered In addition to the vehicles, customs officials recovered 121,250 sleeves of foreign-brand cigarettes, 12 offending vehicles allegedly used to transport smuggled goods, substantial quantities of foreign-origin cosmetics, tyres, cloth and other miscellaneous contraband. The combined estimated value of the seized vehicles and goods exceeds Rs915.5 million, dealing what authorities described as a significant financial blow to organised smuggling syndicates. Customs vows to continue anti-smuggling campaign Pakistan Customs reaffirmed its commitment to maintaining a robust enforcement regime against smuggling and customs fraud. The department said Customs Enforcement Islamabad will continue to conduct intelligence-based operations in coordination with federal and provincial law enforcement agencies to curb illegal trade, protect domestic industries, promote fair market competition and safeguard government revenue. Officials added that the latest seizures demonstrate Pakistan Customsâ€™ continued focus on strengthening border security, disrupting illicit supply chains and supporting economic stability through effective customs enforcement.

Date: 2026-08-05

Details: Written by Faisal Shahnawaz in Taxation, Top stories Absence of implementing rules and government notification keeps high-value transaction restrictions on ineligible persons inoperative. ISLAMABAD: More than a year after the introduction of Section 114C of the Income Tax Ordinance, 2001 through the Finance Act, 2025, the Federal Board of Revenue (FBR) has yet to notify the rules required for its implementation, leaving one of the governmentâ€™s key tax enforcement measures dormant. The provision was introduced to restrict high-value economic transactions by persons who do not meet prescribed tax compliance requirements. However, despite becoming part of the law, the absence of implementing rules and a notification to bring the restrictions into force has prevented its practical application. Restrictions on high-value transactions Section 114C provides that an â€œineligible personâ€ cannot undertake certain high-value transactions above prescribed thresholds. Under the law, the restrictions apply to: â€¢ Purchase, booking or registration of a motor vehicle valued at more than Rs7 million. â€¢ Purchase or transfer of immovable property with a fair market value exceeding Rs100 million. â€¢ Investment in securities, debt securities, mutual funds or money market instruments exceeding Rs50 million in a financial year. â€¢ Annual cash withdrawals exceeding Rs100 million from all bank accounts held by an individual. The measure was introduced to encourage documentation of the economy by linking access to major financial transactions with tax compliance. Who qualifies as an eligible person? The law defines an eligible person as an individual who: â€¢ Has filed an income tax return for the immediately preceding tax year; and â€¢ Has sufficient financial resources declared in a wealth statement, financial statements or a statement of sources of investment and expenditure to support the proposed transaction. For individuals, eligibility may also extend to immediate family members, including parents, a spouse and dependent children. Anyone who does not satisfy these conditions is regarded as an ineligible person for the purposes of Section 114C. Rules and notification still awaited Although Section 114C was enacted through the Finance Act, 2025, sub-section (5) stipulates that the restrictions will only become effective from a date notified by the Federal Government through the official Gazette. The provision also allows the government to revise the monetary thresholds specified in the Fifteenth Schedule before enforcement. In addition, the law authorises the FBR to prescribe rules identifying cash-equivalent assets and establishing procedures for determining whether a taxpayer possesses sufficient declared resources to undertake the proposed transaction. More than a year after the provision was enacted, neither the government notification nor the supporting rules have been issued. As a result, manufacturers, provincial excise and taxation authorities, property registrars, banks, brokerage houses, mutual funds and other financial institutions currently lack the legal framework required to implement the restrictions. Compliance objective Section 114C was designed to strengthen tax compliance by linking participation in major economic transactions with income tax filing and documented financial capacity. Rather than relying solely on audits and post-transaction enforcement, the provision seeks to prevent non-compliant individuals from purchasing expensive assets or making large investments unless they become eligible taxpayers or are able to explain the legitimate source of their funds. Prescribed thresholds Transaction Threshold Purchase, booking or registration of a motor vehicle Above Rs7 million Purchase or transfer of immovable property Above Rs100 million Investment in securities, mutual funds or debt instruments Above Rs50 million Annual cash withdrawals from bank accounts Above Rs100 million Implementation remains pending Tax practitioners say Section 114C remains legally dormant until two key steps are completed: the Federal Government must notify the date on which the restrictions will take effect, and the FBR must issue the detailed operational rules needed for implementation. Until then, the provision remains part of the Income Tax Ordinance, 2001, but cannot be enforced in practice, delaying one of the governmentâ€™s principal measures aimed at strengthening tax compliance and restricting high-value transactions by non-compliant persons.

Date: 2026-08-05

Details: Written by Faisal Shahnawaz in Taxation FPCCI and Pakistan Business Council discuss taxpayer concerns, transparency, and business-friendly reforms with FBR under Prime Ministerâ€™s directives. Acting on the special directives of the Prime Minister, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial held a high-level meeting with representatives of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and the Pakistan Business Council (PBC) in Karachi to discuss major concerns affecting the countryâ€™s business sector. The meeting aimed to strengthen cooperation between tax authorities and the business community while addressing issues related to tax administration, compliance, and the overall business environment. Senior representatives from both organizations highlighted several challenges faced by businesses, including complaints regarding tax procedures and interactions with tax officials. During the discussion, the FBR chairman reaffirmed the tax authorityâ€™s commitment to creating a more business-friendly environment by simplifying tax compliance procedures and improving service delivery. He assured participants that pending tax refund cases would be processed more efficiently to ease financial pressures on businesses and support commercial activity. A key focus of the meeting was ensuring fair treatment of taxpayers. The chairman directed FBR officials to maintain the highest standards of professionalism and integrity while dealing with businesses. He emphasized that any unnecessary harassment of legitimate taxpayers would not be tolerated and instructed officials to address concerns in a transparent and respectful manner. Several issues raised by business representatives were discussed in detail during the session, with the FBR chairman issuing immediate directions to relevant officials for their resolution. This approach was welcomed as a step toward improving responsiveness and reducing delays in addressing taxpayer grievances. Both the FBR and business representatives also agreed to enhance transparency through regular engagement between senior officials and industry leaders. Continuous monitoring by FBRâ€™s operational leadership in Karachi will help ensure timely follow-up on business-related concerns and improve communication between stakeholders. To strengthen long-term cooperation, both sides agreed to establish a collaborative framework for ongoing dialogue. Dedicated committees comprising senior FBR officials and representatives from the FPCCI and PBC will be formed to streamline tax-related processes, accelerate the resolution of pending matters, and ensure meaningful stakeholder consultation before implementing key reforms. The delegations from the FPCCI and Pakistan Business Council appreciated the Prime Ministerâ€™s initiative in facilitating direct engagement between the business community and the tax authority. They also welcomed the constructive and solution-focused approach adopted by the FBR chairman, expressing confidence that the agreed measures would improve business confidence, strengthen trust between taxpayers and the FBR, and contribute positively to Pakistanâ€™s economic growth.

Date: 2026-08-05

Details: Written by Hamza Shahnawaz in Taxation New sales tax orders support voluntary corporatization, correct registrations, and identify 99 eligible steel manufacturers. ISLAMABAD: The Federal Board of Revenue (FBR) has issued three Sales Tax General Orders (STGOs) to address implementation challenges in Pakistanâ€™s iron and steel sector by facilitating voluntary corporatization, correcting registration records, and identifying manufacturers eligible for a special sales tax regime linked to electricity consumption. The latest notifications â€” STGO Nos. 12, 13, and 14 of 2026 â€” were issued between July 31 and August 4, 2026, as part of the implementation of reforms introduced through STGO No. 10/2026 and SRO 1245(I)/2026. Eight companies added under corporatization scheme Under STGO No. 12, the FBR expanded the list of manufacturers qualifying for the Removal of Difficulty for Voluntary Corporatization of Iron and Steel Manufacturers by adding eight newly incorporated companies after verifying compliance with the prescribed standard operating procedures (SOPs). The newly approved companies include Faizan Steel (Private) Limited, Aziz Re-Rolling Industries (Private) Limited, Rasheed Steel (Pvt) Limited, Pak Iron & Steel Casting (Private) Limited, A-One Re-Rolling, Union Steel Private Limited, and Ittehad Iron & Steel Industries (Pvt) Limited. The notification also provides details of each companyâ€™s new and previous tax registration numbers, manufacturing facilities, and electricity and gas connections for verification purposes. FBR issues corrigendum The tax authority subsequently issued STGO No. 13 to correct the name of one of the companies listed in the earlier notification. According to the corrigendum, the company appearing at serial number five should be read as A-One Re-Rolling Steel Mills (Pvt) Ltd, while all other registration, location and identification details remain unchanged. Special sales tax regime for 99 manufacturers The most significant measure came through STGO No. 14, under which the FBR identified 99 registered iron and steel manufacturers eligible for a special sales tax mechanism. Under the scheme, manufacturers meeting the prescribed import and scrap purchase thresholds and integrated with the FBRâ€™s computerized monitoring system will pay sales tax at the rate of Rs5 per unit of electricity consumed, with the tax collected through electricity bills issued by their respective distribution companies (DISCOs). Major steel companies included The notified list covers a wide range of steel manufacturers operating across Karachi, Lahore, Faisalabad, Islamabad, Hub (Balochistan), Khyber Pakhtunkhwa, and other industrial hubs. Major companies included in the list are Amreli Steels Ltd, Fazal Steel (Private) Limited, Mughal Iron & Steel Industries Ltd, Ittefaq Iron Industries Ltd, Naveena Steel Mills (Private) Limited, Union Steel Industries, Faizan Steel, Pak Iron & Steel Casting, Karachi Steel Re-Rolling Mills, and A-One Re-Rolling Steel Mills, along with dozens of medium-sized manufacturers. The FBR clarified that the notified list is dynamic and may be revised periodically based on recommendations from the Commissioner Inland Revenue or verification of eligibility. Manufacturers may be added to or removed from the list to ensure that only compliant businesses continue to benefit from the special sales tax regime.

Date: 2026-08-05

Details: Published August 5, 2026 Updated about 2 hours ago KARACHI: HBL declared a consolidated profit before tax of Rs 73.1 billion, and a profit after tax of Rs 34.5 billion for the half year ended June 30, 2026. EPS for H1â€™26 increased to Rs 23.51. Along with the results, the Bank declared an interim cash dividend for the second quarter ended June 30, 2026, at Rs 6.0 per share. This is in addition to the interim cash dividend already paid at Rs 6.0 per share. HBLâ€™s balance sheet grew to Rs 8.0 trillion, with total deposits closing at Rs 5.9 trillion. Domestic deposits increased to a record high of Rs 5.1 trillion, purely driven by strong current account mobilization. Consequently, the domestic CA mix improved from 37.6 percent in December 2025 to 42.5 percent in June 2026. HBLâ€™s total advances increased to Rs 2.1 trillion. The Bankâ€™s industry leading Consumer portfolio continued its stellar growth trajectory, reaching Rs 187 billion, while the Groupâ€™s agriculture financing increased to over Rs 110 billion. HBLâ€™s interest margins were effectively supported by volumetric expansion of Rs 700 billion in the average balance sheet, and a stronger funding mix driven by consistent growth in the average current accounts. As a result, HBLâ€™s net interest income grew to Rs 140 billion in H1â€™26. Non-Fund Income rose to Rs 47 billion, driven by double-digit growth in fees and commissions and an outstanding treasury performance. Continued growth in the flagship Cards business, together with healthy contributions from Remittances and G2P income, supported revenue growth. HBLâ€™s total revenue thus increased to Rs 187 billion. Effective cost management resulted in a subdued growth of 6 percent in the Bankâ€™s administrative expenses. With sustained profitability, HBLâ€™s Tier I CAR of 13.7 percent and total CAR of 17.2 percent remained well above required levels. Commenting on the Bankâ€™s performance, Muhammad Nassir Salim, President & CEO â€“ HBL, said: â€œHBLâ€™s solid H1â€™26 results reflect our focus on core earnings, led by expansion in network, technology investments and a strong business momentum in each segment. While being well diversified on a market leading revenue base, we remain committed to our future growth with disciplined execution. We enter H2 focused on accelerating scale with profitability and creating sustainable value for our clients and stakeholders.â€ Delivering value for stakeholders HBL reinforced its market-leading reach during the first half of 2026 through a nationwide distribution network of over 140,000 touchpoints. With 2,000 branches, including HBL Microfinance Bank, the Bank serves 40 million customers across Pakistan. The network includes 56 HBL Prestige lounges, 17 SME Trade Centres, 609 Islamic Banking branches, and more than 500 branches focused on SME and agricultural sectors. The Bank continued to lead the banking sectorâ€™s digital transformation through its ongoing core banking upgrade with Temenos, one of the largest and most complex implementations in the region. 480+ branches have successfully migrated to the new platform, with the rollout continuing across the network. HBL also advanced the phased rollout of its brand refresh across Pakistan, with a more consistent customer experience across physical and digital touchpoints while reinforcing HBLâ€™s position as Pakistanâ€™s leading financial institution. Beyond its domestic market, HBL strengthened Pakistanâ€™s access to regional and global debt markets by acting as Financial Advisor in the successful issuance of the inaugural Panda Bond of the Government of Pakistan, marking the countryâ€™s entry into the Chinese bond market. The Sustainable Development Bond is aimed at supporting transformative national priority projects with high economic, social and environmental impact. Building on its commitment to supporting Pakistanâ€™s economy, the Bank further demonstrated its expertise in financial markets and advisory through landmark transactions, including an Interest Rate Swap Agreement with Engro subsidiaries, its role as exclusive buy-side financial advisor and arranger of Shariah-compliant financing for Maple Leaf Cement Factory Limited, and its appointment as Inter-Creditor Agent and Mandated Lead Arranger for Frontier Works Organizationâ€™s landmark project finance facility. The Bank also reinforced its leadership in digital payments with the launch of the HBL PayPak UnionPay Co-Badge Debit Card, developed in partnership with 1LINK-operated PayPak and UnionPay International. The card enables secure and seamless domestic and international transactions while supporting the State Bank of Pakistanâ€™s vision of promoting PayPak as a secure, inclusive and interoperable domestic payment ecosystem. This year, the Bank celebrated the fifth anniversary of its Beijing Branch, reaffirming its commitment to strengthening financial connectivity between Pakistan and China. Established in 2021, HBL remains the only Pakistani bank with a branch in Beijing. Together with its Urumqi Branch, it reflects HBLâ€™s growing strategic importance in one of the worldâ€™s most important economic corridors. Further reinforcing its regional leadership, HBL was nominated as Chair of the Council of the Interbank Consortium of the SCO (SCO IBC) for the forthcoming year 2026â€“2027. As a member bank of the SCO IBC, HBL has long promoted regional financial integration, facilitating trade and supporting investment among SCO member countries. Beyond its business achievements, HBL Foundation disbursed Rs 226 million during the first half of 2026 to support healthcare, education and community development through healthcare access, scholarships, skills development and community welfare initiatives, reinforcing HBLâ€™s commitment to inclusive and sustainable development across Pakistan. The Bank also strengthened its connection with communities through sport as HBLPSL successfully concluded its 11th season, marking another milestone in its long-standing partnership with Pakistanâ€™s premier sporting platform. In recognition of its continued leadership and innovation, HBL was named â€˜Pakistanâ€™s Best Bankâ€™ by Euromoney this year, while also receiving awards for â€˜Pakistanâ€™s Best Retail Bankâ€™, â€˜Pakistanâ€™s Best Bank for Sustainable Financeâ€™, â€˜Pakistanâ€™s Best for Capital Markets Advisoryâ€™, and â€˜Pakistanâ€™s Best Investment Bank for M&Aâ€™. The Euromoney Awards are the most prestigious recognition in the banking industry, globally. This marks the eighth time in the last ten years that HBL has been named Pakistanâ€™s Best Bank by Euromoney. Copyright Business Recorder, 2026

Date: 2026-08-05

Details: Written by Hamza Shahnawaz in Money & Banking, Top stories Central bank triples exposure threshold under Basel III framework to improve financing access for eligible private sector borrowers. KARACHI: The State Bank of Pakistan (SBP) has increased the aggregate borrowing limit for unrated large private sector companies from Rs3 billion to Rs10 billion, providing greater financing flexibility to businesses in response to evolving macroeconomic conditions. In a circular issued on August 4, 2026, the central bank informed all banks and Development Finance Institutions (DFIs) that the revised limit will come into effect from September 30, 2026. Exposure limit increased According to the SBP, the decision follows an assessment of the changing macroeconomic environment and feedback received from the banking industry. Under the revised instructions, the aggregate exposure limit for unrated large private sector borrowers across all banks and DFIs has been raised from Rs3 billion to Rs10 billion. The higher threshold will enable banks and DFIs to extend larger credit facilities to eligible unrated corporate borrowers without attracting a higher regulatory risk weight, thereby improving access to financing for businesses. Basel III framework updated The central bank said the revised exposure limit will be incorporated into the Revised Instructions for Credit Risk (Standardised Approach) under the Basel III framework, which were issued through BPRD Circular No. 3 dated September 24, 2025. These revised credit risk instructions are currently being implemented by banks and DFIs under a parallel-run arrangement before their full adoption. Existing prudential rules remain unchanged The SBP clarified that all other prudential and regulatory requirements relating to the risk weighting of unrated large corporate borrowers will remain unchanged. The latest circular makes reference to the following regulatory instruments: â€¢ BSD Circular No. 8 dated June 27, 2006 â€¢ BPRD Circular Letter No. 2 dated January 9, 2015 â€¢ BPRD Circular No. 3 dated September 24, 2025 Apart from the revised exposure threshold, the existing framework governing credit risk for unrated corporate borrowers will continue to apply. Boost for private sector financing The increase in the aggregate borrowing limit is expected to improve access to bank credit for large private sector companies that do not possess external credit ratings. By allowing banks to extend larger financing facilities while remaining compliant with Basel III capital requirements, the measure is expected to support business expansion, investment and private sector credit growth. The decision also reflects the SBPâ€™s efforts to align prudential regulations with evolving economic conditions while maintaining the overall integrity of the countryâ€™s credit risk management framework.

Date: 2026-08-04

Details: Written by Hamza Shahnawaz in Taxation Tax authority says inaccurate declarations may trigger scrutiny as IRIS portal opens for annual return filing. ISLAMABAD: The Federal Board of Revenue (FBR) has warned taxpayers against submitting incorrect income tax returns for Tax Year 2026, stressing that income, assets and expenditure leave a digital trail that is accessible to the tax authority through multiple sources. In a public awareness message, the FBR advised taxpayers to ensure complete and accurate disclosure of their financial information while filing returns through its online IRIS portal. â€œIncome, assets, and expenditure leave a trail â€“ and that trail reaches FBR through multiple sources. A correct return closes the matter; an incorrect one opens it,â€ the tax authority said. The warning comes as the FBR has opened the Income Tax Return filing portal for Tax Year 2026, allowing taxpayers across Pakistan to submit their annual income tax returns electronically through the IRIS system. In an earlier statement, the FBR urged individuals and businesses to file their returns accurately and honestly, emphasizing that timely compliance is essential for strengthening Pakistanâ€™s tax system. â€œIncome Tax Return filing for Tax Year 2026 is now open. All taxpayers are advised to file their returns accurately and honestly, ensuring that all declared information is true and correct. Timely and truthful compliance strengthens the tax system for everyone,â€ the FBR said. The opening of the filing portal follows the implementation of the Finance Act, 2026, which introduced a range of measures aimed at broadening the tax base, improving documentation and strengthening tax compliance. Earlier, the tax authority issued draft income tax return forms for Tax Year 2026 through SRO 835(I)/2026, inviting feedback from stakeholders before finalising the forms. Under the existing filing schedule, the deadline for submitting income tax returns for Tax Year 2026 is September 30, 2026. The due date applies to salaried individuals, business individuals, Associations of Persons (AOPs), and companies with a financial year ending on December 31. The FBR has advised taxpayers to organize their financial records, income statements and supporting documents well before the deadline to ensure smooth filing and avoid last-minute issues. The Finance Act, 2026 has also introduced stricter penalties for late filing, significantly strengthening the tax compliance framework. The FBR expects that tougher enforcement measures, combined with improvements to the digital filing system, will encourage greater voluntary compliance and increase the number of active taxpayers. The tax authority reiterated that accurate and timely submission of income tax returns remains essential for broadening Pakistanâ€™s tax base, improving revenue collection and supporting the countryâ€™s fiscal sustainability.

Date: 2026-08-04

Details: Written by Faisal Shahnawaz in Taxation, Top stories Tax experts say the optional 1% turnover-based regime could create an uneven playing field by offering extensive compliance relief to eligible retailers. KARACHI: The Federal Board of Revenue (FBR) has introduced a simplified tax procedure for small shopkeepers through S.R.O. 1166(I)/2026, offering eligible retailers the option to pay income tax at a flat rate of 1% of annual turnover. While the initiative is designed to encourage tax compliance and broaden the tax base, tax professionals have questioned whether the scheme effectively amounts to a hidden tax amnesty. The notification, issued on July 27, 2026, establishes an optional taxation regime for individual retailers with annual turnover of up to Rs200 million for Tax Year 2026. Eligible taxpayers may either opt for the simplified scheme or continue to file income tax returns under the normal provisions of the Income Tax Ordinance, 2001. Eligibility criteria The scheme applies exclusively to individual retailers whose principal source of income is the operation of a retail shop and whose annual turnover does not exceed Rs200 million. However, several categories of taxpayers have been excluded, including: â€¢ Tier-1 retailers; â€¢ Jewellery retailers; â€¢ Professionals such as doctors, lawyers and consultants; â€¢ Owners of multiple retail outlets; and â€¢ Businesses whose annual turnover exceeded Rs200 million in any of the preceding three tax years. According to the FBR, the initiative is intended to simplify tax compliance for small retailers while encouraging undocumented businesses to enter the formal tax system. Experts question effective tax burden Despite its stated objective, tax experts argue that the scheme could significantly reduce the effective tax burden for qualifying retailers compared with businesses operating under the normal tax regime. Under the simplified procedure, participants will pay income tax at 1% of gross annual turnover, subject to a minimum payment of Rs25,000. Critics note that companies operating under the corporate tax regime are subject to 29% income tax, in addition to super tax and other applicable levies. They contend that retailers with sizeable turnover could discharge their tax liability at a comparatively low effective rate, creating disparities within the tax system. According to analysts, the difference in tax treatment may discourage business incorporation and encourage enterprises to remain outside the documented corporate framework. Extensive compliance relief Another feature attracting attention is the extensive compliance relief available to retailers opting into the scheme. Participants will generally not be selected for audit. Departmental proceedings may only be initiated following consultation with representatives of trade associations and where credible third-party information indicates significant undeclared transactions, ownership of high-value assets or misuse of the scheme for tax evasion. Retailers participating in the regime will also benefit from several exemptions, including: â€¢ Exemption from withholding tax obligations on purchases under Section 153 of the Income Tax Ordinance; â€¢ Exemption from minimum tax provisions; â€¢ No requirement to install Point-of-Sale (POS) systems; and â€¢ No obligation to implement digital invoicing infrastructure. These concessions are intended to reduce compliance costs and simplify tax administration for small businesses. Simplified return filing The FBR has also introduced a simplified income tax return for participants in the scheme. The return will require taxpayers to declare annual turnover, purchases, business expenses, net profit and legitimate assets. It will be made available through the IRIS portal as well as a dedicated mobile application in Urdu and regional languages to facilitate easier filing. Debate over tax equity Tax analysts acknowledge that the government is attempting to bring more retailers into the documented economy by reducing compliance complexities. However, they caution that the combination of a low turnover-based tax, broad exemptions from audits and relief from various compliance obligations closely resembles the characteristics of a tax amnesty, despite not being formally described as one. Experts argue that while simplifying taxation for small businesses is a positive objective, policymakers must ensure that the regime does not create an uneven competitive environment in which documented companies continue to shoulder substantially higher tax liabilities and compliance costs than retailers operating under the simplified framework. They maintain that broadening the tax base should be accompanied by measures that preserve fairness and neutrality across different categories of taxpayers, ensuring that tax reforms promote both compliance and equitable treatment within Pakistanâ€™s tax system.

Date: 2026-08-04

Details: Written by Faisal Shahnawaz in Taxation New ATL will be issued immediately after the income tax return filing deadline under amended Income Tax Rules, 2002. ISLAMABAD: The Federal Board of Revenue (FBR) has notified the publication date for the new Active Taxpayers List (ATL) for Tax Year (TY) 2026, which will be issued on October 1, 2026, provided the income tax return filing deadline remains unchanged. The publication schedule is in line with amendments made to the Income Tax Rules, 2002, through SRO 1638(I)/2024, which require the FBR to issue the annual Active Taxpayers List immediately after the statutory deadline for filing income tax returns. ATL to be published after return filing deadline According to FBR officials, taxpayers are required to file their income tax returns for Tax Year 2026 by September 30, 2026. If the filing deadline is not extended, the FBR will publish the Active Taxpayers List 2026 on October 1, 2026. However, if the tax authority grants an extension for filing returns, the publication of the new ATL will also be postponed accordingly. The revised schedule is intended to ensure that taxpayers who file their returns within the prescribed or extended deadline are included in the Active Taxpayers List without unnecessary delay. Changes introduced through SRO 1638(I)/2024 The FBR amended the Income Tax Rules, 2002, through SRO 1638(I)/2024, issued on October 18, 2024, introducing significant changes to both the timing of the ATLâ€™s publication and the frequency of updates. Under the amended rules, a taxpayerâ€™s name will be included in the Active Taxpayers List if the income tax return for the latest tax year is filed: â€¢ By the due date specified under Section 118 of the Income Tax Ordinance, 2001; â€¢ By an extended due date granted by the Commissioner under Section 119; or â€¢ By an extended deadline notified by the FBR under Section 214A. The rules define the â€œlatest tax yearâ€ as the most recently completed tax year before the return is filed. Where the filing deadline for that tax year has not yet expired, the immediately preceding tax year will be treated as the latest tax year for ATL purposes. Late filers can still qualify The amended framework also provides relief for taxpayers who submit their returns after the prescribed deadline. A taxpayer filing a return after the due date or any valid extension may still be included in the Active Taxpayers List upon payment of the surcharge prescribed under Section 182A of the Income Tax Ordinance, 2001. This provision allows late filers to regain active taxpayer status after fulfilling the applicable legal requirements. Shift from March to October publication Prior to the amendments introduced in 2024, the FBR used to publish the new Active Taxpayers List on March 1 each year, based on income tax returns filed up to the end of February. The revised rules have aligned the publication of the ATL with the statutory return filing deadline, enabling compliant taxpayers to be reflected in the updated list immediately after the filing period ends. Daily updates replace weekly revisions The amendments have also changed the frequency of updates to the Active Taxpayers List. Previously, the FBR updated the ATL on a weekly basis. Under the revised rules, the list is now updated daily, allowing taxpayersâ€™ status to be reflected more quickly once they meet the filing requirements or complete other legal formalities. The FBR expects the revised system to improve administrative efficiency, enhance taxpayer facilitation and ensure more timely recognition of compliant taxpayers under Pakistanâ€™s income tax regime.

Date: 2026-08-04

Details: Published August 4, 2026 Updated about 4 hours ago KARACHI: The HBL Pakistan Manufacturing PMI rose to 51.7 in July 2026 from 50.8 in June, marking the strongest improvement in manufacturing conditions in four months. The expansion was driven by a recovery in domestic demand alongside continued resilience in export orders. While manufacturing activity strengthened during the month, the pace of growth remained moderate, highlighting a gradual recovery amid elevated risks stemming from the renewed conflict in the Middle East. New orders picked up after contracting in June, supported by stronger customer sentiment and competitive pricing. The improvement drove the fastest expansion in manufacturing output in five months and prompted firms to increase purchasing activity and employment for the first time since March. Although export orders continued to underpin overall activity, their relative contribution softened as domestic demand emerged as the primary catalyst for the sectorâ€™s ongoing recovery. Encouragingly, the improvement in demand was accompanied by easing inflationary pressures, as both input cost and output price inflation moderated despite persistent increases in raw material and fuel costs. Commenting on the latest PMI data, Humaira Qamar, Head of Equities & Research â€“ HBL, noted: â€œThe softer cost environment aligns with our expectation of a gradual disinflationary trend through FY27, although elevated geopolitical risks continue to cloud the near-term outlook. Against this backdrop, the State Bankâ€™s decision to keep the policy rate unchanged at 11.5 percent strikes an appropriate balance between supporting economic recovery and anchoring inflation expectations. Looking ahead, a sustained improvement in manufacturing activity will depend on policy consistency and a stable external environment that supports both domestic demand and export growth.â€ Copyright Business Recorder, 2026

Date: 2026-08-04

Details: â€¢ GIFT Nifty futures were at 24,653.5 Published August 4, 2026 Updated 4 minutes ago Indiaâ€™s Nifty 50 was set to open lower on Tuesday after a sharp late-session rise in the previous session following the launch of a new Closing Auction Session (CAS) framework, leaving traders wary of higher volatility. GIFT Nifty futures were at 24,653.5 as of 8:13 a.m. IST, indicating the benchmark Nifty 50 could open below Mondayâ€™s close of 24,774.3. The Nifty and the Sensex rose 1.6% and 0.7% on Monday, showing a rare divergence after the launch of the new auction mechanism for stocks with traded futures and options contracts. â€œBoth the exchanges have separate order books for CAS session similar to the continuous trading session and hence, the â prices of individual stocks are also different,â€ NSE said in a statement late on Monday. Under the CAS, continuous trading in eligible shares ends at 3:15 p.m. before the market moves into a 20-minute auction that sets the official close. The auction price is determined within a plus-or-minus 3% band around a volume-weighted average price, or VWAP, reference price, concentrating more end-of-day execution into a compressed window. On its first day, the auction drew strong participation, with 515 trading members placing orders for 56,773 unique PANs, surpassing the long-established pre-open session, and activity is expected to deepen over time, NSE said. The new structure â could amplify late-session swings by making closing prices more sensitive to large institutional flows, aggressive buying, short-covering and repositioning in heavyweight stocks, said Hariselvan Radhakrishnan, founder and chief executive of HST Wealth. It could also intensify weekly expiry volatility by concentrating institutional flows, short-covering and position adjustments into a narrow closing-auction window, two analysts said. Niftyâ€™s weekly â options expire on Tuesday. Elsewhere, Asian shares edged higher after Wall Street closed higher overnight. Brent crude rose 0.8% after tumbling 7% on Monday to a three-week low.

Date: 2026-08-04

Details: Published August 4, 2026 Updated about 4 hours ago LAHORE: The Pakistan Sugar Mills Association (PSMA) has written letters to Deputy Prime Minister Senator Ishaq Dar and Federal Minister for National Food Security and Research Rana Tanveer Hussain, requesting the government to allow export of surplus sugar. As per the contents of the letters, there are 3.4 million metric tons of sugar stocks in the country as of July 15, 2026, reconciled and agreed upon by the FBR and the sugar industry, while the average monthly consumption is 567,426 metric tons. Hence, by the start of the new crushing season 2026-27 on November 15, the country will hold a massive surplus stock of 1.158 million metric tons of sugar. A bumper sugarcane crop is expected again in the upcoming crushing season, which will again result in the production of 8 million metric tons of sugar, an amount for exceeding domestic requirements. A PSMA spokesperson has expressed deep concern over the uncertainty facing sugarcane farmers as the September sowing season approaches; they are worried because large quantity of surplus sugar is still in mill warehouses, and until this stock is exported, mills will be unable to purchase more cane from them or offer better rates. Better and timely payments to sugarcane growers over the past two years have encouraged them to cultivate better varieties of sugarcane, resulting in a significant increase in per-acre yield and sugar content. A good sugarcane crop is expected in the upcoming crushing season, resulting in surplus sugar production. However, this will only be possible if the export of current surplus sugar provides farmers with the incentive to cultivate the new crop otherwise, sugarcane cultivation and sugar production will decline in the coming years, and sugar will have to be imported at the cost of valuable foreign exchange. The sugar industry is currently facing the challenge of holding large stocks of sugar while demand remains very low. Current sugar prices are far below production costs, whereas the costs of sugarcane and other inputs are rising every year. Due to unsold stocks, the sugar industry is facing severe shortage of funds for repaying bank loans. In the light of reconciled figures, it is requested the government to immediately grant permission to export 585,000 tonnes of surplus sugar and later authorize the export of stocks held in strategic reserves within one month of the commencement of the upcoming crushing season, the PSMA pleaded. Copyright Business Recorder, 2026

Date: 2026-08-04

Details: â€¢ Front-month Brent futures rose $0.62, or 0.7%, to $84.39 a barrel Published August 4, 2026 Updated 41 minutes ago Oil prices rebounded slightly on Tuesday, after plunging in the previous session, on concerns Middle Eastern supply remains at risk as a diplomatic resolution to the US-Iran war that has disrupted shipments still seems unlikely. Front-month Brent futures rose $0.62, or 0.7%, to $84.39 a barrel as of 0055 GMT after dropping 7% in the previous session to a three-week low. US West Texas Intermediate (WTI) crude was $0.61, or 0.7% higher at $80.95 after falling over 5% in the previous session to its lowest in nearly a week. Prices dropped after US President Donald Trump said on Sunday he was holding off on new attacks on Iran pending ongoing talks to end their â war and settle claims over control of the key Strait of Hormuz. The waterway connects Gulf oil producers to global markets and before the conflict energy exports equal to about 20% of total consumption transited daily. However, on Monday, Iranâ€™s Foreign Ministry spokesman Esmail Baghaei rejected Trumpâ€™s claim, saying no negotiations with the US were taking place and no meetings were scheduled. â€œSome of the sting has been taken out of oil prices â€¦ with Trump pausing strikes on Iran and touting a return to negotiations (though) the move lower remains fragile â€“ oil could just as easily rebound higher if missiles start flying again or if tankers around the Strait of Hormuz come under fire once more,â€ said Tim Waterer, chief market analyst at KCM Trade. The dispute over the Strait of Hormuz remains a central â point of contention. Washington says the memorandum of understanding agreed in June required Iran to open the waterway, while Tehran argues the text explicitly preserved its authority. Analysts at Barclays said in the week ended July 31 crude oil and refined product net exports through the strait averaged 4.2 million barrels per day, compared with 3.2 million bpd the previous week. In the Red Sea, six Saudi-flagged supertankers changed course in the Gulf of â Aden recently and are heading to southern Africa, while two tankers laden with Saudi oil crossed the Bab el-Mandeb Strait, shipping data showed on Monday. Traffic in the Strait of Hormuz between Iran and Oman also slowed following reports of vessel attacks, the data showed. Hormuz remains dangerous for vessels. â The United Kingdom Maritime Trade Operations on Tuesday said it received a report of an incident 20 nautical miles (37 km) northeast of Omanâ€™s Al Khasab, after a cargo vessel broadcast over VHF channel 16 that it had been hit by an unknown projectile. â€œWhile â the fighting between Saudi Arabia and the Houthis has not completely halted energy flows, it has forced longer voyage times, higher insurance costs and occasional diversions. With the Strait of Hormuz, it keeps a dual-chokepoint risk in the market that prevents oil from fully unwinding its geopolitical premium,â€ Waterer said.

Date: 2026-08-04

Details: â€¢ Brent fell $6.35 to $83.77, WTI dropped $4.33 to $80.34 amid market declines Published August 4, 2026 Updated 40 minutes ago NEW YORK: Oil prices fell about 7 percent to a three-week low on Monday after US President Donald Trump held off on a fresh attack on Iran in the hope of sealing a quick deal that could boost oil supplies from the Gulf. Front-month Brent futures fell USD6.35, or 7.0 percent, to settle at USD83.77 a barrel, while US West Texas Intermediate (WTI) crude fell USD4.33, or 5.1 percent, to settle at USD80.34. That was the lowest close for Brent since July 13, due in part to the start of the less expensive October futures as the front-month after the more expensive September contract expired on Friday. Brent prices for October were down 4.7 percent from where the October contract closed on Friday. Iran said on Monday there were no talks under way with the United States and no plans for any meetings, contradicting Trump who had cited talks he said would take place that afternoon as justification for calling off attacks. Oil prices drop after Trump cancels attack on Iran to seek nuclear deal Over the weekend, Trump repeated a pattern that has emerged throughout the past five months: announcing plans for â€œmassive attacksâ€ on Iran, only to cancel them at the last minute. Trump on Monday said talks with Iran â€œare going on right nowâ€, adding that Iran faced â€œdecapitationâ€ if Tehran did not agree to a pact to end the conflict. Iranâ€™s Foreign Ministry spokesman Esmail Baghaei rejected the claim, saying no negotiations with the United States were taking place and no meetings were scheduled. Iran had no plans to host foreign delegations or send negotiators abroad in the coming days, he said. â€œTodayâ€™s sharp selloff â€¦ in crude futures looks like another overreaction to Trumpâ€™s comments that a deal with Iran is imminent following his weekend threats of massive attacks that were also suggested as imminent,â€ analysts at energy advisory firm Ritterbusch and Associates said in a note. â€œTrump is continuing a pattern of occasionally talking the oil market lower in precluding a sustained advance in gasoline prices,â€ the Ritterbusch analysts said. On Monday, Trump again called on oil companies to lower gasoline prices for US consumers, chiding Chevron and Exxon Mobil for making too much money. In addition to the drop in crude futures, prices for both US gasoline and diesel fell by around 5 percent during Mondayâ€™s session. Six Saudi-flagged supertankers have changed course in the Gulf of Aden in recent days and are heading to southern Africa following threats by the Iran-backed Houthi movement in Yemen to target Saudi shipping, tracking data showed on Monday. Over the weekend, however, two tankers laden with Saudi oil crossed the Bab el-Mandeb Strait between the Red Sea and the Gulf of Aden, while traffic in the Strait of Hormuz between Iran and Oman slowed following reports of vessel attacks, shipping data showed on Monday. About a fifth of the worldâ€™s oil passed through the Strait of Hormuz before the US and Israel started bombing Iran on February 28. A Panama-flagged tanker carrying Russian naphtha attempted to pass through the Bab-el-Mandeb in the last week of July before changing course to sail around Africa instead, trade sources said and shipping data from LSEG showed. Russia said on Monday it was stepping up protection of ships in the Azov-Black Sea basin while also developing alternative cargo routes, in a move that follows a sharp escalation of attacks at sea by both sides in the war in Ukraine. Russia was the worldâ€™s third-biggest crude oil producer behind the US and Saudi Arabia in 2025, according to US energy data, and is a member of the OPEC+ group of countries, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies. Export disruptions from the Gulf, Russia and Kazakhstan, caused by the Iran and Ukraine wars, have meant successive monthly OPEC+ hikes over most of this year have not translated into extra oil on the market. On Sunday, OPEC+ approved an oil production quota increase of around 188,000 barrels per day from September.

Date: 2026-08-03

Details: Written by Faisal Shahnawaz in Taxation Pakistan highlights AI-powered customs reforms, digital connectivity and regional cooperation to strengthen secure trade and border management. ISLAMABAD: Pakistan Customs has reaffirmed its commitment to strengthening regional customs cooperation and advancing secure, technology-driven trade facilitation by participating in the 11th Policy-Level Meeting of the United Nations Office on Drugs and Crime (UNODC)â€“World Customs Organization (WCO) Passenger and Cargo Control Programme (PCCP/IREN) held in Tashkent, Uzbekistan. The Pakistani delegation was led by Syed Shakeel Shah, Member Customs (Operations), Federal Board of Revenue (FBR), and included Muhammad Imran Khan Mohmand, Director General Reforms & Automation, Pakistan Customs. Focus on regional cooperation and digital customs The high-level meeting brought together senior customs officials from across the region to discuss measures aimed at strengthening customs cooperation through secure, seamless and technology-enabled trade. Delegates focused on several strategic priorities, including: â€¢ Mutual recognition of Authorised Economic Operator (AEO) programmes. â€¢ Recognition of regulatory documents among participating countries. â€¢ Wider adoption of artificial intelligence (AI)-enabled risk management and data analytics for customs clearance and enforcement. â€¢ Strengthening public-private partnerships to facilitate legitimate trade while combating illicit cross-border activities. Participating customs administrations agreed to establish dedicated technical working groups to develop draft protocols in these priority areas. The initiative is expected to promote greater digital integration, enhance regulatory cooperation and improve the efficiency of regional trade and transit. Pakistan and Uzbekistan deepen customs collaboration On the sidelines of the conference, the Pakistani delegation held a bilateral meeting with the First Deputy Chairman of the Customs Committee of the Republic of Uzbekistan to review progress under existing customs cooperation arrangements. The two sides discussed expanding collaboration in several strategic areas, including: â€¢ National Targeting Centres. â€¢ Transit cargo tracking. â€¢ AI and machine learning-based risk management. â€¢ Customs digitalisation. â€¢ Intelligence-led enforcement. â€¢ Enhanced exchange of customs information. During the meeting, Syed Shakeel Shah highlighted that Uzbekistan is the first country with which Pakistan has established advance customs information exchange through the Pakistan Single Window (PSW) for both imports and exports, describing the initiative as a significant milestone in digital customs cooperation. Building on this achievement, both countries agreed to explore extending the existing digital connectivity to include transit trade information. The proposed initiative is expected to improve the quality and timeliness of customs data exchange, strengthen border controls, reduce customs clearance times and facilitate faster, more secure and seamless regional trade and transit. Commitment to modern customs administration Pakistan and Uzbekistan reaffirmed their shared commitment to expanding bilateral customs cooperation through enhanced digital connectivity, coordinated border management, exchange of best practices and adoption of modern customs technologies. According to Pakistan Customs, these initiatives will strengthen supply chain security, facilitate legitimate trade and support broader regional economic integration. Pakistan Customs also reiterated its commitment to leveraging innovation, digital transformation and international cooperation to build a modern customs administration capable of enhancing trade competitiveness while maintaining effective enforcement and robust border security.

Date: 2026-08-03

Details: Written by Hamza Shahnawaz in IT & Telecom, Taxation Subtitle: Mobile, internet and prepaid services remain subject to 15% withholding tax, while specified non-filers face a 75% rate under Section 114B. ISLAMABAD: The Federal Board of Revenue (FBR) has notified the withholding tax rates applicable to telephone, mobile phone and internet usage for Tax Year (TY) 2027, which commenced on July 1, 2026, under the updated Income Tax Ordinance, 2001. The revised rates have been incorporated into the Income Tax Ordinance, 2001, updated through June 30, 2026, following amendments introduced by the Finance Act, 2026. The tax collection mechanism is governed by Section 236 of the Ordinance. Withholding tax on telephone bills Under the updated law, withholding tax will be collected from telephone subscribers, other than mobile phone subscribers, where the monthly bill exceeds Rs1,000. The applicable rate is: â€¢ Telephone subscribers (excluding mobile phone subscribers): 10% of the amount exceeding Rs1,000 in the monthly bill. Tax on mobile phone and internet services The FBR has retained a 15% withholding tax on payments made by subscribers of the following services: â€¢ Mobile telephone services â€¢ Internet services â€¢ Prepaid internet cards â€¢ Prepaid telephone cards â€¢ Sale of mobile or internet units through any electronic medium or any other form The applicable withholding tax rates are: Category Withholding tax rate Mobile phone subscribers 15% Internet subscribers 15% Prepaid internet cards 15% Prepaid telephone cards 15% Sale of units through electronic medium or any other form 15% Higher tax for specified non-filers The updated law prescribes a significantly higher withholding tax for persons specified in an Income Tax General Order issued under Section 114B of the Income Tax Ordinance, 2001. Such persons will be liable to pay 75% withholding tax on: â€¢ Mobile phone bills â€¢ Internet bills â€¢ Sale price of prepaid internet cards â€¢ Sale price of prepaid telephone cards â€¢ Sale of mobile or internet units through any electronic medium or any other form The enhanced rate is aimed at encouraging tax compliance by persons identified under Section 114B. Effective from July 1, 2026 The notified withholding tax rates form part of the Income Tax Ordinance, 2001, updated through June 30, 2026, incorporating amendments made under the Finance Act, 2026. The latest notification provides certainty to telecom operators, internet service providers, withholding agents and consumers regarding the tax collection mechanism applicable to telephone, mobile phone and internet usage during Tax Year 2027, ensuring compliance with the provisions of the Income Tax Ordinance, 2001.

Date: 2026-08-03

Details: Written by Hamza Shahnawaz in Taxation Commercial, industrial and domestic electricity consumers to pay advance income tax under updated Income Tax Ordinance from July 1, 2026. ISLAMABAD: The Federal Board of Revenue (FBR) has notified the advance income tax rates applicable to electricity consumption for Tax Year (TY) 2027, which commenced on July 1, 2026, under the updated Income Tax Ordinance, 2001. The revised rates have been incorporated into the Income Tax Ordinance, 2001, updated to June 30, 2026, following amendments introduced through the Finance Act, 2026. The advance tax is to be collected through electricity bills issued to commercial, industrial and domestic consumers. Advance tax rates for commercial and industrial consumers Under the updated law, advance income tax on electricity bills for commercial and industrial consumers will be collected based on the gross amount of the electricity bill. Commercial consumers â€¢ Up to Rs500: Nil â€¢ Exceeds Rs500 but does not exceed Rs20,000: 10% of the amount â€¢ Exceeds Rs20,000: Rs1,950 plus 12% of the amount exceeding Rs20,000 Industrial consumers â€¢ Up to Rs500: Nil â€¢ Exceeds Rs500 but does not exceed Rs20,000: 10% of the amount â€¢ Exceeds Rs20,000: Rs1,950 plus 5% of the amount exceeding Rs20,000 The updated schedule shows that commercial consumers with higher electricity bills will pay a higher rate of advance income tax than industrial consumers. Tax rates for domestic electricity consumers The FBR has also prescribed advance income tax rates for domestic electricity consumers based on the monthly electricity bill. â€¢ Monthly electricity bill below Rs25,000: No advance income tax â€¢ Monthly electricity bill of Rs25,000 or more: 7.5% advance income tax Accordingly, domestic consumers whose monthly electricity bill remains below Rs25,000 will not be subject to advance income tax, while those with bills of Rs25,000 or above will pay tax at the rate of 7.5%. Effective from July 1, 2026 The notified rates form part of the Income Tax Ordinance, 2001, updated through June 30, 2026, incorporating amendments made under the Finance Act, 2026. The latest notification provides clarity to electricity consumers, power distribution companies and withholding agents regarding the advance income tax regime applicable to electricity consumption during Tax Year 2027. The prescribed rates are intended to ensure uniform tax collection through electricity bills in accordance with the provisions of the Income Tax Ordinance, 2001.

Date: 2026-08-03

Details: Written by Hamza Shahnawaz in Taxation Strong sales tax receipts help FBR beat its July revenue target despite lower-than-expected income tax collections, providing a solid start to FY2026-27. ISLAMABAD: The Federal Board of Revenue (FBR) collected more than Rs810 billion in taxes during July 2026, surpassing its monthly revenue target and providing a strong start to fiscal year 2026-27, although income tax receipts fell short of expectations. According to provisional figures, the FBR collected Rs810 billion during the first month of the fiscal year, exceeding the monthly target by Rs30 billion. The collection also represented a 7% increase compared with Rs757 billion collected in July 2025. The revenue performance was driven primarily by robust sales tax receipts, while customs duty and federal excise duty also met or slightly exceeded their respective targets. Annual target set at Rs15.263 trillion For FY2026-27, the federal government, in consultation with the International Monetary Fund (IMF), has set an annual tax collection target of Rs15.263 trillion. Achieving the target requires the FBR to increase tax revenues by around 17% over the previous fiscal yearâ€™s collection. Unlike previous years, meeting the revenue target has become a key benchmark under Pakistanâ€™s IMF-supported economic reform programme. The release of the programmeâ€™s sixth loan tranche depends on the FBR meeting its revenue objectives during the first half of the fiscal year. Income tax falls short of target Despite exceeding the overall revenue target, income tax collection remained below expectations. The FBR collected more than Rs300 billion in income tax during July, missing the monthly target by Rs23 billion. The shortfall in direct tax collection was compensated by stronger-than-expected performance in sales tax and other indirect taxes. Sales tax leads revenue growth Sales tax remained the largest contributor to the FBRâ€™s July revenue collection. The tax authority collected Rs358 billion in sales tax, exceeding the monthly target by Rs53 billion and recording an 18% year-on-year increase. However, import-stage taxation continued to account for the bulk of sales tax receipts. Around Rs275 billion, or 78% of total sales tax collection, was generated on imported goods. Customs duty and FED achieve targets The FBR collected Rs105 billion in customs duty during July, meeting its monthly target and exceeding the collection recorded in the corresponding month last year by Rs2 billion. Meanwhile, Federal Excise Duty (FED) collection reached Rs48 billion, marginally surpassing the target and remaining broadly in line with July 2025 levels. Import-stage taxes remain the backbone The provisional figures show that more than Rs440 billion, representing approximately 54% of total tax collection, was generated at the import stage, where compliance levels are generally higher and tax evasion is comparatively limited. The figures underscore the FBRâ€™s continued reliance on import-related taxation despite ongoing efforts to broaden the domestic tax base and improve direct tax collection. Return filing gathers pace Following the upload of revised income tax return forms to its online portal, the FBR received approximately 227,000 income tax returns during July. The tax authority also accelerated the payment of tax refunds, disbursing Rs98 billion during the monthâ€”around Rs13 billion more than the amount refunded in July last year. The July revenue performance provides an encouraging start to FY2026-27, but sustaining the required pace of revenue growth throughout the year will be essential for achieving the Rs15.263 trillion annual target and fulfilling Pakistanâ€™s commitments under the IMF-supported reform programme.

Date: 2026-08-02

Details: Published August 2, 2026 Updated a day ago TOKYO: Sumitomo Mitsui Financial Group recorded a 33percent rise in first-quarter profit, marking the latest Japanese financial institution to weather huge swings in global markets and trade and stay on track for record profits. Strong loan demand from SMFGâ€™s clients, which are primarily made of up of large, listed Japanese firms with a global footprint, persisted despite rocky energy markets and supply chain disruption brought about by war in the Middle East. â€œThe anticipated negative impact of Middle East-related risks has not yet materialised,â€ SMFG said in an earnings presentation. Japanâ€™s second largest lender by assets said on Friday net profit for the April-June quarter was 501.4 billion yen (USD3.13 billion) compared with 376.9 billion yen in the same year-ago period. SMFG has also benefited from rising interest rates as Japan exits deflation, lifting lending margins. SMFGâ€™s domestic loan to deposit spread rose to 1.31percent from 1.08percent a year previously, while its loan balance grew 7percent to 113.4 trillion yen at the end of June. Earlier on Friday the Bank of Japan held rates at 1percent, although a majority of analysts polled by Reuters expect a hike to 1.25percent before the end of the year. SMFG estimates that each incremental rise of 0.25percent translates to an additional 150 billion yen of interest income over five years. The bank identified further upside in adjusting its Japanese government bond portfolio. Over the past quarter, it increased its exposure to longer-dated, higher-yielding JGBs, lifting the share of bonds maturing in five to 10 years to over 50percent of its 11.4 trillion yen portfolio. As with other global banks, volatile markets buoyed trading flows with quarterly gross profit in SMFGâ€™s global markets unit rising sharply by 74percent year-on-year. SMFG maintained its annual profit forecast for the year ended March 2027 at 1.7 trillion yen.

Date: 2026-08-01

Details: Published August 1, 2026 Updated 12 minutes ago ISLAMABAD: The Federal Board of Revenue (FBR) Friday constituted three Independent Case Scrutiny Committees (ICSCs) with immediate effect to end frivolous litigation with taxpayers and ensure consistency in decisions relating to appeals and references before superior courts. According to an office order issued by the FBRâ€™s Legal Wing on Friday, the committees have been constituted under Section 133A of the Income Tax Ordinance, 2001, Section 47AAA of the Sales Tax Act, 1990, and Section 34AA of the Federal Excise Act, 2005, along with the relevant rules framed thereunder. The FBR has established three regional committees covering Islamabad, Lahore and Karachi jurisdictions. The Islamabad Committee will be headed by former Justice Athar Saeed, with Barrister Saad Buttar and Dr Muhammad Iqbal, Former Member Inland Revenue Policy, FBR, serving as members. The committee will oversee litigation matters relating to Large Taxpayer Office (LTO) Islamabad, RTO Islamabad, RTO Peshawar, RTO Abbottabad and the Directorate General of Intelligence and Investigation (DG I&I), Islamabad. The Lahore Committee will be chaired by former Justice Khawaja Farooq Saeed, while Mirza Nasar, Advocate Supreme Court, and former FBR Member Shahid Hussain Asad have been appointed as members. Its jurisdiction extends over LTO Lahore, LTO Multan, CTO Lahore and Regional Tax Offices in Lahore-I, Lahore-II, Rawalpindi, Gujranwala, Faisalabad, Multan, Bahawalpur, Sialkot, Sargodha and Sahiwal. The Karachi Committee will be headed by former Justice Maqbool Baqir. Its members include Munawar Ali Memon and former FBR Member Seema Shakil,. The committee will deal with cases falling under LTO Karachi, CTO-I Karachi, CTO-II Karachi, RTO-I Karachi, RTO-II Karachi, RTO Sukkur, RTO Hyderabad and RTO Quetta. Under the office order, the committees will examine tax cases and recommend whether references should be filed before the High Courts or petitions and review petitions before the Supreme Court or the Federal Constitutional Court. They will also periodically review pending litigation to determine whether continuation of legal proceedings is warranted in the interest of revenue. In addition, the committees have been assigned the responsibility of maintaining a database of settled legal issues and judicial precedents to promote consistency in future litigation. They will also identify systemic legal and administrative issues requiring legislative or policy intervention and submit appropriate recommendations to the FBR. The FBR said that the terms and conditions governing the engagement of chairpersons and members, remuneration, meetings, decision-making and disposal of official assignments will be regulated under the relevant provisions of the Income Tax Ordinance, Sales Tax Act, Federal Excise Act and corresponding rules. The office order has been issued with the approval of the competent authority and has taken immediate effect. Copyright Business Recorder, 2026

Date: 2026-08-01

Details: Written by Hamza Shahnawaz in Taxation Updated withholding tax rates under Section 153 apply to payments for goods, services, contracts and e-commerce transactions from July 1, 2026. ISLAMABAD: The Federal Board of Revenue (FBR) has notified the income tax withholding rates applicable to payments for goods, services and contracts for Tax Year 2027, effective from July 1, 2026, following the issuance of the updated Income Tax Ordinance, 2001 incorporating amendments introduced through the Finance Act, 2026. The revised rates, prescribed under Section 153 of the Income Tax Ordinance, 2001, apply to a broad range of commercial transactions, including the sale of goods, provision of services, execution of contracts and payments made through e-commerce platforms. Withholding tax on payments for goods Under Section 153(1), the FBR has prescribed the following withholding tax rates on payments for goods: â€¢ Sale of rice, cotton seed oil and edible oils: 1.5% of the gross amount payable. â€¢ Sale of goods (other than toll manufacturing): o Companies: 5% of the gross amount payable. o Persons other than companies: 5.5% of the gross amount payable. â€¢ Toll manufacturing: o Companies: 9% of the gross amount payable. o Persons other than companies: 11% of the gross amount payable. Tax rates for services The updated law specifies different withholding tax rates depending on the nature of the service provided. A 7% withholding tax will apply to payments for a wide range of specified services, including transport, freight forwarding, air cargo, courier, manpower outsourcing, hotel, security guard, software development, engineering and architectural services, warehousing, telecommunication infrastructure (tower) services, car rental, building maintenance, oilfield services, telecommunication services, travel and tour services, REIT management services, inspection, certification, testing and training services, share registrar services, and data services licensed by the Pakistan Telecommunication Authority. The same rate also applies to services rendered by the Pakistan Stock Exchange Limited, the Pakistan Mercantile Exchange Limited and the National Clearing Company of Pakistan Limited. However, the FBR has retained a concessional withholding tax rate of 4% for information technology (IT) services and IT-enabled services. Independent professional services Payments made to independent professionals, including doctors, lawyers, architects, accountants, software engineers and software developers, will be subject to a 15% withholding tax. Advertising and port services Payments made to electronic and print media for advertising services will attract withholding tax at 1.5% of the gross amount payable. Meanwhile, payments to companies providing terminal and port operating services will be subject to a 12% withholding tax. For all other services not specifically covered under the prescribed categories, the applicable withholding tax rate has been fixed at 14% of the gross amount payable. Withholding tax on contracts The FBR has also notified withholding tax rates for payments made under contracts. Payments to sportspersons will continue to attract tax at 15%, while payments under contracts will be taxed at 7.5% where the recipient is a company and 8% where the recipient is a person other than a company. E-commerce transactions The updated provisions also prescribe withholding tax rates for digitally ordered goods and digitally delivered services conducted through e-commerce platforms. A 1% withholding tax will apply where payment is made through digital means or banking channels via a payment intermediary. For transactions settled through the Cash on Delivery (COD) method, courier companies will collect withholding tax at 2% of the gross amount paid or payable. Effective from Tax Year 2027 The notified withholding tax rates are effective from July 1, 2026 and will apply throughout Tax Year 2027. The revised rates form part of the updated Income Tax Ordinance, 2001, as amended through the Finance Act, 2026. The FBR has advised withholding agents, businesses and taxpayers to apply the prescribed rates under Section 153 when making payments for goods, services, contracts and eligible e-commerce transactions.

Date: 2026-08-01

Details: Published August 1, 2026 Updated 41 minutes ago NEW YORK: Wall Streetâ€™s main indexes traded between small gains and losses on Friday, as uncertainty over the path for interest rates and a slide in Appleâ€™s shares offset a 13.7 percent jump in Amazon. Amazon.com reported its biggest revenue growth in over four years for the previous quarter, joining similar reports from Microsoft and Alphabet earlier this month, prompting investors to look past the companiesâ€™ big spending plans that rattled markets through this month. Apple, on the other hand, slid 9.2 percent after warning that supply constraints would hurt growth, adding to worries about the hit from iPhone price hikes. This week was what some analysts called â€˜make-or-breakâ€™ for the tech sector that had been beaten down as traders took some profits through July following a strong end to the second quarter, as they awaited signs that investments made by AI leaders at the expense of free cash flow were paying off. Shares of Microsoft were up 1.5 percent after logging their biggest one-day gain on record for a company in the previous session, while Alphabet jumped 5 percent and Meta gained 1.5 percent. Among chip stocks, Nvidia climbed 0.8 percent and Monolithic Power Systems gained 11.1 percent after forecasting third-quarter revenue above estimates. At 11:43 a.m. ET, the Dow Jones Industrial Average rose 99.24 points, or 0.19 percent, to 52,306.20, the S&P 500 lost 1.49 points, or 0.02 percent, to 7,436.14 and the Nasdaq Composite lost 15.65 points, or 0.06 percent, to 25,106.53. The S&P 500â€™s consumer discretionary sector led the gains, up 5 percent, helped by Amazonâ€™s surge, while tech lost over 1.6 percent. All three of Wall Streetâ€™s main indexes are on track for weekly gains, aided by the strong rebound late this week. But the S&P 500 and the Nasdaq were on track for monthly losses, reflecting the sharp selloff AI-linked stocks witnessed through July. The Philadelphia Semiconductor index was flat on Friday and is down 20 percent in July, which would mark its biggest monthly fall since 2008. Investors instead took notice of other sectors, as the S&P 500 equally weighted index is on track for its fourth straight month of gains. The week also brought uncertainty in terms of interest rates after the Federal Reserve left its benchmark rate on hold. Chairman Kevin Warshâ€™s commentary offered little on the outlook for interest rates; however, at least three officials voiced the need to hike interest rates on Friday. The yield on the 2-year Treasury note, a reflection of short-term interest rates, spiked 7 basis points to 4.29 percent, while investors priced in a 67 percent chance that rates could rise by at least 25 basis points in September, CMEâ€™s FedWatch tool showed. Domain registrar GoDaddy lost 20 percent after narrowing its annual revenue forecast. Declining issues outnumbered advancers by a 1.58-to-1 ratio on the NYSE and by a 1.89-to-1 ratio on the Nasdaq. The S&P 500 posted four new 52-week highs and three new lows, while the Nasdaq Composite recorded 35 new highs and 86 new lows.

Date: 2026-08-01

Details: Published August 1, 2026 Updated 41 minutes ago BENGALURU: Markets in emerging Asia surged in their largest single-day gain in more than 17 years on Friday, buoyed by a rally in South Korean and Taiwanese equities on hopes that a recent rout in the chip-heavy indexes may be nearing its end. The MSCI EM Asia index gained about 8 percent in its biggest single-day jump since late October 2008, while the EM Asia IT index advanced more than 15 percent, on track for its best day ever, after an otherwise downbeat month. Even accounting for the latest moves, the indexes have declined 4.5 percent and 13 percent so far in July, respectively. South Koreaâ€™s KOSPI closed its strongest trading session on record, rocketing 18 percent higher. Chipmakers SK Hynix and Samsung Electronics, which make up more than half the benchmark, marked 30 percent and 27 percent gains by the close, respectively, in their largest single-day rises to date. Despite a brutal six-week crash that erased more than half of its massive annual gains on thinning volume, the KOSPI remains up around 56.5 percent in 2026 so far, in a highly volatile run. â€œWe believe the recent market pullback in the Asia tech sector has been driven more by sentiment than by any deterioration in fundamentals,â€ said Kieron Poon, investment director of Asian equities at Aberdeen Investments. â€œThis healthy market adjustment broadens the opportunity set across Korea and the wider Asian technology sector.â€ Volatility on the KOSPI this week in particular was compounded by the outsized role single-stock leveraged ETFs play in the stock market. Local regulators have since pledged to rein in the impact through individual investment caps on the products. â€œThe market is now waiting to see whether additional restrictions will be imposed on leveraged ETFsâ€¦ Once the regulatory framework becomes clearer, the current round of deleveraging is likely to end,â€ Poon added. In Taiwan, the benchmark index advanced 8 percent, its strongest single-session gain since mid-April. Semiconductor major TSMC rose nearly 10 percent in its best day since October 2020. Elsewhere, stocks in Bangkok and Jakarta rose 1.9 percent and 0.6 percent, respectively. Among currencies, the South Korean won weakened as much as 1.2 percent to 1,440.58 per dollar, after appreciating to its strongest level since mid-October 2025 on Thursday.

Date: 2026-08-01

Details: Published August 1, 2026 Updated about an hour ago LAHORE: Lahore Chamber of Commerce & Industry (LCCI) President Faheem-ur-Rehman Saigol has said that Pakistan and the United States enjoy a strong and long-standing economic relationship based on trade, investment and people-to-people connections, and there is tremendous potential to further strengthen bilateral economic cooperation through enhanced business partnerships, greater investment and improved market access. He was speaking during the visit of a high-powered United States business delegation to the Lahore Chamber of Commerce & Industry. The delegation visited LCCI as part of its Pakistan tour facilitated by the Special Investment Facilitation Council (SIFC). Among those present on the occasion were LCCI Senior Vice President Tanveer Ahmad Sheikh, Vice President Khurram Lodhi, Chairman Rice Land Group, Tahir Javed, Director SIFC USA, Lt. Col. Jehanzeb President Chicagoland Chamber of Commerce Naveed Anwar, Hafeez Khan, Former LCCI President Tahir Javed Malik and executive committee members. The LCCI President termed the visit as a significant step towards strengthening economic relations between the two countries. He appreciated the SIFC for arranging and coordinating the visit, saying that SIFC has played a valuable role in showcasing Pakistanâ€™s investment potential to the international community. He observed that the delegationâ€™s visit to Islamabad, Karachi and Lahore had enabled its members to engage with Pakistanâ€™s political leadership and business community, helping them gain a deeper understanding of the countryâ€™s economic strengths and investment prospects. Faheem said the United States remains Pakistanâ€™s largest export destination, accounting for approximately 20 percent of the countryâ€™s total exports. Citing State Bank of Pakistan figures, he said, bilateral trade had increased from approximately US$8.4 billion in 2024-25 to US$9.4 billion in 2025-26, while Pakistanâ€™s exports to the United States had reached nearly US$6.1 billion. He said stronger business partnerships and greater market access could significantly increase trade volumes in the coming years. Director SIFC USA Lt. Col. Jehanzeb said the visit was part of a broader initiative aimed at strengthening economic cooperation between Pakistan and the United States. He informed participants that the delegation was assessing Pakistanâ€™s investment landscape, ease of doing business and opportunities available in different sectors. He stated the feedback gathered during the visit would help pave the way for future engagements with the US International Development Finance Corporation (DFC) and the Export-Import Bank of the United States (EXIM Bank), whose delegations are expected to visit Pakistan later this year to explore financing opportunities in collaboration with the private sector. He observed that the delegation represented a broad spectrum of sectors, including textiles, information technology, artificial intelligence, healthcare, real estate, critical minerals and mining, energy, defence technologies, business solutions, insurance and agriculture. He said the expertise and experience of the delegates created excellent opportunities for joint ventures, technology transfer, investment partnerships and knowledge sharing. Speaking on the occasion, Chairman Rice Land Group Tahir Javed said the delegation had held extensive meetings with Pakistanâ€™s top leadership, including the Prime Minister, SIFC officials, ministers and provincial leadership, and had witnessed strong enthusiasm for investment and economic cooperation throughout the country. He said the delegation was leaving Pakistan with renewed confidence because, for the first time, investors had been presented with a substantial portfolio of ready-to-invest projects. Copyright Business Recorder, 2026

Date: 2026-08-01

Details: Published August 1, 2026 Updated about an hour ago NEW YORK: Oil prices rose more than USD 1 on Friday and were on track for a big monthly gain as reports that some tankers were forced to turn around in the Strait of Hormuz prompted traders to reassess shipping flows through the key waterway. Brent futures were up USD 1.01, or 1.1 percent, at USD 90.04 a barrel at 1:26 p.m. ET (1726 GMT). US West Texas Intermediate crude was up USD 1.28, or 1.5 percent, at USD 84.87 a barrel. For July, Brent and WTI were on track to finish up 24 percent, their highest one-month gain since March. The Iran war that began on February 28 has sharply reduced traffic through the Strait of Hormuz, which previously carried about a fifth of global crude oil and natural gas supplies, disrupting Middle East output running into millions of barrels a day. Back-and-forth attacks in recent days have ended a brief pause in the fighting between the United States and Iran. READ MORE: Oil climbs as traders assess shipping flows; big monthly gain in sight Additionally, Houthi militia forces in Yemen have disrupted shipping through the Bab el-Mandeb Strait linking the Red Sea to the Gulf of Aden, creating a second chokepoint for oil flows. â€œFresh US strikes on Iranian military targets keep the geopolitical risk premium firmly in place near chokepoints like the Strait of Hormuz. Domestic supply is reinforcing the move as well, with US crude stockpiles â€¦ down to multi-year lows,â€ research firm Gelber & Associates wrote in a note. The note was referring to US Energy Information Administration (EIA) data showing that US commercial crude stocks last week fell to their lowest levels since 2018. Traffic through strait Iranâ€™s Revolutionary Guards stopped two tankers from transiting the Strait of Hormuz, while four others changed course, Fars News Agency reported. However, two very large crude carriers carrying oil loaded from the Gulf exited the strait on Friday, although traffic through the waterway remained sparse, according to Kpler ship-tracking data. Twenty-nine commodity vessels passed through the Bab el-Mandeb Strait on Thursday. â€œThe market has stopped trading the war and started trading the shipping data,â€ said Ole Hvalbye, market analyst at SEB Research. Talks between Iran and Oman on managing the strait continue, according to the Iranian Labour News Agency, despite Iran rejecting Omanâ€™s proposal for joint management of the waterway. Geopolitical risks remain A drone strike that sparked fires on two gas vessels in Egyptâ€™s Mediterranean port of Damietta has raised a new threat to shipping through the Suez Canal, one of the last major export routes available to Saudi oil amid the expanding Iran war. Saudi Arabia this week said it is seeking to lead a coalition to boost defence cooperation in the Bab el-Mandeb Strait, the Red Sea and the Gulf of Aden. Elsewhere, Ukraineâ€™s military said it hit Russiaâ€™s Volgograd oil refinery overnight on Friday, causing a fire at the facility. In Kazakhstan, Tengizchevroil, the operator of the giant Tengiz field, has resumed oil exports via the Georgian port of Batumi for the first time since March, two sources told REUTERS. In the United States, crude oil output fell about 2 percent in May from a record in April, while exports hit a record high for the second-consecutive month, according to data published by the EIA on Friday. Higher oil prices, however, dented consumption, with demand for crude oil and petroleum products falling more than 3.5 percent in May to about 20.07 million barrels per day, the lowest since March 2025, the data showed. A report from Baker Hughes on Friday showed that US energy firms this week added rigs for a sixth time in seven weeks. The number of active rigs acts as an early indicator of future output. Separately, a REUTERS survey of 31 economists and analysts showed that oil prices are expected to rise further this year. Brent crude is estimated to average USD 85.22 a barrel in 2026, up from Juneâ€™s forecast of USD 84.50, the survey showed.

Date: 2026-08-01

Details: Published August 1, 2026 Updated about an hour ago KARACHI: The Pakistan Stock Exchange (PSX) ended the week on a positive but subdued note on Friday, as early gains were trimmed by late-session profit-taking and position squaring ahead of the weekend. Despite strong buying at the opening, investors opted to book profits in select heavyweight stocks during the second half of the session, limiting the benchmark indexâ€™s advance. The benchmark KSE-100 Index gained 546.13 points, or 0.31 percent, to settle at 176,094.12 points, compared with the previous close of 175,547.98 points. The index climbed to an intraday high of 177,108.67 points before retreating to an intraday low of 175,934.99 points as traders pared positions before the weekend. Business Recorder indices also portrayed an overall positive performance across the market. The BRIndex100 advanced by 56.91 points, or 0.30 percent, to close at 19,346.81 points, with total traded volume improving to 642.81 million shares. Likewise, the BRIndex30 gained 174.88 points, or 0.25 percent, to settle at 69,567.15 points on a turnover of 288.61 million shares. Ali Najib, Deputy Head of Trading at Arif Habib Limited, said the market witnessed another mixed trading session with strong momentum at the opening that gradually faded later in the day. â€œPSX witnessed another mixed session today. The market opened on a strong note. However, gains were partially erased during the second half of the session as traders opted to square off positions ahead of the weekend, resulting in a modest positive close,â€ he said. Najib added that Engro Holdings (ENGROH), Habib Bank Limited (HBL), Lucky Cement (LUCK), Bank Al Habib Limited (BAHL), and Askari Bank Limited (AKBL) collectively contributed around 250 points to the benchmark index. On the other hand, Engro Fertilisers (EFERT), United Bank Limited (UBL), Habib Metropolitan Bank (HMB), Javedan Corporation (JVDC), and Maple Leaf Cement Factory (MLCF) jointly erased around 101 points due to selective profit-taking. Trading activity strengthened on the ready counter as overall market participation increased. Total Ready Market volume rose to 880.95 million shares from 711.20 million shares in the previous session. However, traded value slightly declined to Rs24.96 billion compared with Rs25.40 billion a day earlier. Ready Market capitalization increased by Rs38.14 billion to Rs19.756 trillion from Rs19.718 trillion recorded in the previous session. Market breadth remained positive. Of the 493 companies traded on the Ready Market, 273 advanced, 185 declined and 35 remained unchanged. Trust Brokerage remained the volume leader for the second consecutive session, with 178.80 million shares changing hands. The stock settled at Rs2.57, compared with its previous close of Rs2.53. It was followed by Dadabhoy Cement, which traded 81.74 million shares and closed at Rs20.40. Cnergyico PK ranked third with 50.46 million shares, ending at Rs10.74, while Wasl Mobility Modaraba processed 48.68 million shares and hit its upper circuit to close at Rs7.92. Among individual stocks, The Thal Industries Corporation Limited posted the highest gain in absolute terms, rising Rs104.68 to close at Rs1,151.46 per share, followed by Nestle Pakistan Limited, which added Rs91.49 to settle at Rs7,913.37 per share. On the losing side, PIA Holding Company Limited (B) shed Rs372.50 to close at Rs17,627.50 per share, while Khyber Textile Mills Limited declined Rs74.65 to end at Rs2,002.81 per share. Among the Business Recorder sectoral indices, the BR Cement Index emerged as the top performer, climbing 64.82 points, or 0.53 percent, to close at 12,309.14 points, while generating the highest sectoral turnover of 112.06 million shares. The BR Tech & Communication Index rose 11.98 points, or 0.33 percent, to settle at 3,647.94 points on a trading volume of 83.75 million shares. The BR Commercial Banks Index advanced by 183.32 points, or 0.30 percent, to end at 61,962.16 points, with 34.01 million shares changing hands, reflecting selective buying in banking stocks. The BR Oil and Gas Index also closed in positive territory, gaining 35.42 points, or 0.24 percent, to finish at 14,578.24 points on turnover of 37.33 million shares. Meanwhile, the BR Automobile Assembler Index edged up 8.25 points, or 0.03 percent, to settle at 23,774.85 points with a modest turnover of 1.70 million shares. The BR Power Generation and Distribution Index was the only laggard among the major BR sectoral indices, easing by 7.96 points, or 0.03 percent, to close at 27,523.66 points on a volume of 25.01 million shares. Market participants said the benchmark index managed to close the week in positive territory despite late-session profit-taking, indicating that underlying sentiment remains constructive. They noted that the ongoing corporate earnings season, improving macroeconomic indicators and expectations of further economic stability continue to support investor confidence. However, geopolitical developments, corporate financial results and dividend announcements are expected to remain the primary drivers of market direction in the sessions ahead. Copyright Business Recorder, 2026

Date: 2026-07-31

Details: Written by Hamza Shahnawaz in Taxation Large-scale reshuffle includes BS-18 to BS-20 IRS officers, with new appointments across FBR Headquarters, RTOs, LTOs, CTOs, and directorates nationwide. The Federal Board of Revenue (FBR) has carried out a significant reshuffle of officers belonging to the Inland Revenue Service (IRS), announcing the transfer and posting of 80 officers in BS-18 to BS-20 with immediate effect. The decision was issued through an official notification dated July 31, 2026, as part of the Boardâ€™s routine administrative restructuring aimed at strengthening tax administration across the country. The transfers cover officers serving at the FBR Headquarters, Regional Tax Offices (RTOs), Corporate Tax Offices (CTOs), Large Taxpayers Offices (LTOs), and various directorates operating in different cities. Among the most notable appointments, Ms. Farhat Qayum (BS-20) has been transferred from her position as Chief at FBR Headquarters, Islamabad, and posted as Director General (OPS), Anti Benami Initiatives, Islamabad. According to the notification, she has been directed to assume charge of her new assignment on August 6, 2026. The latest reshuffle also includes the transfer of several Chief Commissioners, Commissioners, Directors, Additional Commissioners, and Secretaries, with officers assigned to new roles across major tax formations throughout the country. The administrative changes span a wide range of FBR offices located in Islamabad, Karachi, Lahore, Faisalabad, Rawalpindi, Peshawar, Quetta, Multan, Hyderabad, Sukkur, Sialkot, Abbottabad, Bahawalpur, and several other stations. In addition to regular transfers, the Board has entrusted a number of officers with look-after responsibilities and additional charge of key positions under the applicable government rules to ensure continuity in tax administration. The notification clarifies that officers who were already receiving performance allowance before the issuance of the transfer orders will continue to receive the same allowance at their new places of posting. This measure ensures that eligible officers retain their existing benefits despite their change in assignment. Furthermore, all transferred officers have been instructed to submit charge relinquishment and assumption reports immediately after taking over their new responsibilities. These reports will be maintained as part of the official record and will facilitate the completion of administrative formalities. The transfer orders include several senior BS-20 officers, including Ms. Farhat Qayum, Mr. Adnan Inamullah Khan, Ms. Sumbal Agha, Ms. Fiza Batool, Dr. Muhammad Aslam Mari, Ms. Uzma Saqib, Ms. Fauzia Adil, Mr. Hammal Baloch, Mr. Shaheed Mehboob, Ms. Iram Shabbir, Mr. Sajjad Amjad, Ms. Uzma Munir, Ms. Yasmin Yusuf Khan, Mr. Shaukat Hayat, and Mr. Muhammad Asif, along with dozens of officers in BS-18 and BS-19. The large-scale reshuffle reflects the FBRâ€™s ongoing efforts to streamline operations, strengthen institutional capacity, and improve tax administration through strategic deployment of experienced Inland Revenue officers across Pakistan.

Date: 2026-07-31

Details: Written by Hamza Shahnawaz in Taxation New taxation mechanism links electricity usage with sales tax liability for steel melters, re-rollers, and composite units from July 1, 2026. The Federal Board of Revenue (FBR) has introduced a new fixed sales tax mechanism for Pakistanâ€™s steel industry, making electricity consumption the basis for calculating sales tax liabilities of steel melters, re-rollers, and composite manufacturing units. The new procedure will come into force from July 1, 2026, and is aimed at improving tax compliance while ensuring a more transparent taxation system across the sector. Under the revised framework, the sales tax will be collected through electricity consumption, with different rates applicable depending on the source of raw materials and the mode of power generation used by manufacturers. Different Tax Rates Based on Raw Material Usage According to the notification, steel manufacturers using locally sourced remeltable iron and steel scrap will pay Rs30 per unit of electricity consumed in addition to the standard sales tax applicable under the Sales Tax Act. Manufacturers that have used more than 70 percent imported scrap during the preceding 12 months will be charged a reduced rate of Rs5 per electricity unit consumed. The same concessional rate will also apply to manufacturers using scrap supplied by Export Facilitation Scheme (EFS) licensees, provided such scrap exceeds 70 percent of their total raw material consumption during the specified period. Meanwhile, steel units operating on captive power plants or self-generated electricity, including those using bagasse or other energy sources, will be liable to pay Rs35 per electricity unit consumed. Reduced Rate Linked to Digital Integration The FBR has also offered an incentive for digitally compliant manufacturers. Steel melters and composite units integrated with the Boardâ€™s computerized real-time reporting system and meeting the prescribed imported scrap consumption threshold will qualify for the reduced Rs5 per unit sales tax rate. Additionally, manufacturers will be allowed to adjust the sales tax collected through electricity consumption against their output sales tax, reducing the risk of double taxation. New Categorization of Steel Units The notification classifies manufacturers consuming 500,000 or more electricity units per month on a single meter as steel melters or composite units. Businesses consuming less than this threshold will be categorized as steel re-rollers. Manufacturers must declare their production and supply according to their assigned category, while the FBR will review and update the list of eligible steel units every three months. Strict Enforcement from July 2026 The FBR has directed all electricity distribution companies (DISCOs) to implement the prescribed sales tax rates on all eligible steel manufacturers from July 1, 2026, without exception. In cases where manufacturers fail to pay the sales tax by the due date mentioned on their electricity bills, the concerned DISCOs will be authorized to disconnect electricity supply in addition to any legal action initiated by the relevant tax authorities.

Date: 2026-07-31

Details: Written by Hamza Shahnawaz in Taxation Pioneer tax official concludes decades of public service after leading Pakistanâ€™s first Tax Policy Office and contributing to major fiscal reforms. ISLAMABAD: Najeeb Ahmad Memon, the first Director General of Pakistanâ€™s Tax Policy Office, has retired from government service upon attaining the age of superannuation, bringing to a close a distinguished career in the Inland Revenue Service (IRS) spanning several decades. According to an official notification, Memon, a BS-21 officer of the Inland Revenue Service serving as Director General (SPPS-I), Tax Policy Office, Finance Division, Islamabad, retired from government service with effect from September 27, 2026. The Government of Pakistan acknowledged his dedicated public service and extended its best wishes for his health and success in his future endeavours. First Director General of the Tax Policy Office Memon made history by becoming the inaugural Director General of the Tax Policy Office, an institution established under the Finance Division to strengthen tax policy formulation, improve revenue forecasting and support fiscal reforms. His appointment marked an important milestone in Pakistanâ€™s efforts to separate tax policy from tax administration, with the office playing a central role in developing evidence-based taxation policies and supporting long-term fiscal planning. Key leadership roles at the FBR Before assuming charge of the Tax Policy Office, Memon served in senior positions at the Federal Board of Revenue (FBR). Following his promotion to BS-21, he relinquished the charge of Member (IR-Policy) (BS-20) at FBR Headquarters on May 13, 2025, in accordance with FBR Notification No. 1053-IR-I/2025. On the same day, he assumed charge as Member (BS-21) (IR-Policy) at the FBR Headquarters in Islamabad. Throughout his career, he held a range of important assignments in both field formations and at FBR Headquarters, where he contributed to tax administration, policy development and revenue reforms. Legacy of tax policy reforms Memon is widely regarded as one of the Inland Revenue Serviceâ€™s accomplished officers, having played a significant role in strengthening Pakistanâ€™s tax policy framework and institutional capacity. During his tenure in senior leadership positions, he worked on initiatives aimed at improving tax policy, enhancing revenue forecasting and supporting the governmentâ€™s broader fiscal objectives. Officials and colleagues consider his appointment as the first Director General of the Tax Policy Office a landmark development in Pakistanâ€™s ongoing efforts to modernise tax policy formulation and administration. With his retirement, the Tax Policy Office enters a new phase of leadership while building on the institutional foundation established during Memonâ€™s tenure.

Date: 2026-07-31

Details: Written by Hamza Shahnawaz in Taxation Banks and financial institutions to deduct tax on payments to digital content creators and social media influencers from July 1, 2026. ISLAMABAD: The Federal Board of Revenue (FBR) has notified a 5% withholding tax on revenues earned from social media platforms for Tax Year 2027, effective from July 1, 2026, under the updated Income Tax Ordinance, 2001, incorporating amendments introduced through the Finance Act, 2026. The tax has been prescribed under Section 154B of the Income Tax Ordinance, 2001, which establishes a dedicated withholding tax regime for income earned by digital content creators and social media influencers through online platforms. Five percent tax on social media earnings According to the updated law, the rate of tax to be deducted under Section 154B has been fixed at 5% of the revenue received from social media platforms. The measure is aimed at bringing income generated through digital content creation into Pakistanâ€™s formal tax system by collecting tax at the point of payment. Banks to deduct tax at source Under the new provisions, every banking company and non-banking financial institution will be responsible for deducting the withholding tax whenever revenue from a social media platform is credited to or received in a personâ€™s account. The deduction will be made at the earlier of: â€¢ The credit of funds into a bank account; or â€¢ The receipt of payment through banking channels. The law also extends to inward remittances, fund transfers and credits received through intermediaries, including online payment service providers and digital financial platforms. Digital creators and influencers covered The withholding tax applies to digital content creators and social media influencers who earn income from creating, publishing or monetising content on online platforms. The provisions cover earnings received from platforms such as: â€¢ YouTube â€¢ Facebook â€¢ Instagram â€¢ TikTok â€¢ Other similar digital platforms The tax applies irrespective of the platform through which the content is monetised, provided the payment represents revenue generated from social media activities. Tax treatment under Section 154B The FBR has clarified that the withholding tax deducted under Section 154B will have different tax treatments depending on the taxpayerâ€™s status. For resident persons, the amount deducted will constitute minimum tax. For non-resident persons who do not have a permanent establishment in Pakistan, the tax deducted under the section will be treated as final tax, discharging their liability in respect of that income. FBR authorised to issue implementation rules The amended law also empowers the FBR to issue detailed rules governing the implementation of the new withholding tax regime. These rules may cover procedures for identifying taxable payments, reporting obligations, compliance requirements and the operational mechanism for tax deduction by banks, financial institutions and payment intermediaries. The introduction of Section 154B forms part of the governmentâ€™s broader strategy to expand Pakistanâ€™s tax base by incorporating the rapidly growing digital economy and creator ecosystem into the formal taxation framework through tax collection at the point of payment.

Date: 2026-07-31

Details: Written by Hamza Shahnawaz in Taxation Updated withholding tax rates under Section 152 apply to contracts, services, capital gains and other payments to non-residents from July 1, 2026. ISLAMABAD: The Federal Board of Revenue (FBR) has notified the income tax withholding rates applicable to payments made to non-residents for Tax Year 2027, effective from July 1, 2026, under the updated Income Tax Ordinance, 2001. The revised rates, incorporated through amendments introduced by the Finance Act, 2026, apply to a range of payments covered under Section 152 of the Income Tax Ordinance, including contracts, services, capital gains and other specified transactions involving non-resident individuals and entities. Withholding tax rates on payments to non-residents According to the updated provisions, the following withholding tax rates will apply: Nature of Payment Tax Rate Payments under Section 152(1A) 7% of the gross amount payable Payments under Section 152(1AA) 5% of the gross amount paid Payments under Section 152(2) 20% of the gross amount paid Payments under Section 152(1AAA) 10% of the gross amount paid Capital gains under Sections 152(1D) and 152(1DA) 10% of the amount of capital gain Tax rates for contracts with non-residents The FBR has also prescribed separate withholding tax rates for payments under Section 152(2A)(a) relating to contracts with non-residents. Companies making such payments will be required to deduct tax at 5% of the gross amount payable, while all other taxpayers will be subject to a withholding tax rate of 5.5%. IT services receive concessional tax rate The updated law prescribes an 8% withholding tax on payments made for a broad range of services provided by non-residents, including transport, freight forwarding, air cargo, courier, manpower outsourcing, hotel, security guard, tracking, advertising (excluding print and electronic media), share registrar, engineering, car rental, building maintenance, inspection, certification, testing, training and oilfield services. The same 8% rate also applies to services rendered by the Pakistan Stock Exchange Limited and the Pakistan Mercantile Exchange Limited. However, the Finance Act, 2026 has retained a concessional withholding tax rate of 4% for software development services, information technology (IT) services and IT-enabled services, recognising the strategic importance of the digital economy. For all other services not specifically covered under the prescribed categories, withholding tax will be deducted at 15% of the gross amount payable. Tax rates for sportspersons and other payments Under Section 152(2A)(c), payments made to non-resident sportspersons will continue to attract withholding tax at 15% of the gross amount payable. For other payments covered under the same provision, the applicable withholding tax rate has been fixed at 8% of the gross amount payable. Applicable from Tax Year 2027 The notified withholding tax rates are effective from July 1, 2026 and will apply throughout Tax Year 2027. The FBR has advised withholding agents, businesses and tax practitioners to apply the revised rates under Section 152 of the Income Tax Ordinance, 2001, when making payments to non-resident individuals and entities, in accordance with the amendments introduced through the Finance Act, 2026.

Date: 2026-07-31

Details: â€¢ The RBIâ€™s short-dollar forward book shrank $3.3 billion month-over-month by the end of June Published July 31, 2026 Updated about 10 hours ago MUMBAI: The Reserve Bank of Indiaâ€™s net foreign exchange forward book market shrank slightly to $103.3 billion in June, as a reduction of near-tenor dollar liabilities outweighed a rise in longer tenor ones likely reflecting absorption of dollar inflows. The RBIâ€™s short-dollar forward book shrank $3.3 billion month-over-month by the end of June, driven by a nearly $13 billion reduction in forward dollar sales of up to three month maturities. The fall in near-tenor liabilities was offset by an over $6 billion dollar rise in liabilities beyond one year, which would reflect flows absorbed under discounted dollar-rupee buy/sell swap facilities introduced to encourage banks to mobilise foreign-currency deposits and overseas borrowings by lenders and state-run firms. Between June 8 and late-July, the crisis-era policy measures announced to strengthen Indiaâ€™s balance of payments position have drawn inflows worth nearly $40 billion, led largely by foreign currency deposits by overseas Indians. Indiaâ€™s RBI likely used dollar deposit surge to cut record FX forward book, economists say During June, the rupee rose 0.4%, its first monthly gain in four months, supported by the policy measures, the removal of taxes on foreign investment in government bonds and a temporary ceasefire in the Middle East that has since collapsed. Economists reckon that the central bankâ€™s foreign exchange forward book was pared down in July, which would have eroded foreign exchange reserves but the impact was likely offset by inflows from its foreign-currency deposit drive. Indiaâ€™s foreign exchange reserves rose to a two-month peak of $682.35 billion as of July 24, according to data released earlier on Friday. As renewed hostilities in the Middle East lifted oil prices in late July, the central bank renewed its defense of the rupee. Traders say the RBI has complemented dollar sales in the spot and non-deliverable forwards markets with buy/sell dollar-rupee swaps of more than one yearâ€™s maturity. Those swaps are expected to reflect in the data in July, due to be released on August 31, alongside the impact of swaps related to ongoing inflows under policy measures.

Date: 2026-07-30

Details: Written by Hamza Shahnawaz in Taxation FBR introduces 1% withholding tax on digital payments and 2% on Cash on Delivery transactions under the Finance Act, 2026 ISLAMABAD: The Federal Board of Revenue (FBR) has notified the income tax rates applicable to payments for digitally ordered goods and services through e-commerce platforms for Tax Year 2027, effective from July 1, 2026. The new withholding tax rates have been prescribed under Section 6A of the updated Income Tax Ordinance, 2001, incorporating amendments introduced through the Finance Act, 2026. Tax rates linked to payment method According to the FBR, the applicable withholding tax will depend on the payment method used for purchases made through e-commerce platforms, including websites. The notified tax rates are as follows: Payment Method Tax Rate Digital payments or banking channels through a payment intermediary 1% of the gross amount paid or payable Cash on Delivery (COD) through courier services 2% of the gross amount paid or payable Lower tax rate for digital payments Under the updated provisions, a 1% withholding tax will apply where payment for digitally ordered goods or services is made through digital means or banking channels via a payment intermediary. The lower rate is intended to encourage the use of formal digital payment systems and support the growth of Pakistanâ€™s digital economy. Higher tax on Cash on Delivery transactions The FBR has prescribed a 2% withholding tax on the gross amount paid or payable for purchases made through the Cash on Delivery (COD) option. The tax will be collected by the courier company responsible for delivering the goods and collecting payment from the customer. Effective from Tax Year 2027 The notified rates form part of the updated Income Tax Ordinance, 2001, as amended through the Finance Act, 2026, and are applicable from July 1, 2026, for Tax Year 2027. The FBR has advised payment intermediaries, courier companies and e-commerce platforms to implement the prescribed withholding tax rates for all eligible digital commerce transactions in accordance with Section 6A of the Income Tax Ordinance. The new tax framework establishes separate withholding tax rates based on the method of payment, with digital transactions attracting a lower rate than Cash on Delivery purchases.

Date: 2026-07-30

Details: Written by Hamza Shahnawaz in Taxation Companies to pay 25% tax, while individuals and AOPs will face rates of 10% or 12.5% depending on investment returns ISLAMABAD: The Federal Board of Revenue (FBR) has notified the income tax rates applicable to returns on investments in Sukuk issued through Special Purpose Vehicles (SPVs) for Tax Year 2027, effective from July 1, 2026. The tax rates have been prescribed under Section 5AA of the updated Income Tax Ordinance, 2001, incorporating amendments introduced through the Finance Act, 2026. Tax rates on Sukuk investment returns Under the updated provisions, different tax rates will apply depending on the category of the Sukuk holder and the amount of return on investment received during the tax year. The notified rates are as follows: Sukuk Holder Tax Rate Company 25% Individual or Association of Persons (AOP) with return on investment exceeding Rs1 million 12.5% Individual or Association of Persons (AOP) with return on investment of less than Rs1 million 10% Companies subject to 25% tax The FBR has prescribed a 25% income tax on returns received by companies from Sukuk investments issued through a Special Purpose Vehicle. The rate will apply to corporate investors receiving income from eligible Sukuk structures under the provisions of Section 5AA of the Income Tax Ordinance. Lower tax rates for individuals and AOPs Individuals and Associations of Persons (AOPs) will benefit from lower tax rates based on the amount of investment return received during the tax year. Where annual returns on Sukuk investments exceed Rs1 million, the applicable tax rate will be 12.5%. However, if the annual return is less than Rs1 million, the income will be taxed at a concessional rate of 10%. Applicable from Tax Year 2027 The notified rates form part of the updated Income Tax Ordinance, 2001, as amended by the Finance Act, 2026, and are applicable from July 1, 2026, for Tax Year 2027. The FBR has advised withholding agents, financial institutions and taxpayers to apply the prescribed tax rates when calculating tax on returns from Sukuk investments received through Special Purpose Vehicles, in accordance with Section 5AA of the Income Tax Ordinance. The notification provides clarity for corporate and individual investors in Sukuk, ensuring consistent taxation of investment returns under Pakistanâ€™s updated tax framework for Tax Year 2027.

Date: 2026-07-30

Details: Written by Hamza Shahnawaz in IT & Telecom, Taxation New customs valuation ruling updates import values for around 70 mobile phone accessories to reflect prevailing international market prices. ISLAMABAD: Pakistan Customs has revised the customs values of imported mobile phone accessories after more than two years, updating the benchmark values used to calculate import duties and taxes in line with prevailing international market prices. The Directorate General of Customs Valuation issued Valuation Ruling No. 2015/2026, introducing revised customs values for around 70 categories of mobile phone accessories. The new ruling replaces Valuation Ruling No. 1887/2024, which was issued on May 31, 2024. Revision based on changing global prices According to the Directorate General of Customs Valuation, international prices of mobile phone accessories have changed considerably since the previous valuation was issued, making it necessary to reassess customs values. The Directorate undertook a fresh valuation exercise under Section 25A of the Customs Act, 1969, to ensure that customs assessments accurately reflect current market conditions and maintain consistency in import valuation. Stakeholders participated in valuation exercise The Directorate said a valuation meeting was held with importers and other industry stakeholders before finalising the revised values. Participants were invited to present their views and submit documentary evidence supporting their claims regarding prevailing international prices. As part of the review, officials analysed import data covering the previous 90 days and examined information provided by stakeholders. Market enquiries were also conducted under Section 25(7) of the Customs Act, 1969, together with the procedures laid down in Office Order No. 17/2014 dated March 19, 2014. Updated values to determine import duties The revised valuation ruling prescribes customs values for approximately 70 categories of mobile phone accessories, which will serve as the basis for determining customs duty and applicable taxes on imports. However, Pakistan Customs clarified that where the declared or invoice value of imported goods exceeds the customs value specified in the ruling, the higher declared value will be accepted for assessment in accordance with Section 25(1) of the Customs Act, 1969. Air cargo consignments to attract freight adjustment The ruling further provides that, for consignments imported by air, the difference between air freight and sea freight will be added to the customs value when calculating duties and taxes. The Directorate also noted that the valuation ruling applies only to the product descriptions and specifications listed in the accompanying valuation table. Any Harmonised System (HS) Codes mentioned are for reference purposes only and should not be treated as legally binding classifications. Customs collectorates instructed to implement ruling Pakistan Customs has directed all Collectorates of Customs to implement Valuation Ruling No. 2015/2026 with immediate effect. Field formations have also been instructed to promptly report any anomalies or implementation issues to the Directorate General of Customs Valuation so that corrective measures can be taken where necessary. The revised customs values are expected to improve uniformity in import assessments, align customs valuations with prevailing international prices and enhance transparency in the taxation of imported mobile phone accessories.

Date: 2026-07-30

Details: Written by Faisal Shahnawaz in Taxation Shehbaz Sharif directs FBR to enhance tracking systems, identify untaxed sectors, and take legal action against businesses involved in tax evasion. Prime Minister Muhammad Shehbaz Sharif on Wednesday directed authorities to identify individuals and businesses operating within the informal economy and initiate strict legal action against those involved in tax evasion as part of the governmentâ€™s broader efforts to strengthen revenue collection and improve tax compliance. Chairing a weekly review meeting on reforms at the Federal Board of Revenue (FBR), the prime minister instructed officials to develop a comprehensive and scientific framework to assess tax potential across various sectors of the economy. He emphasized that broadening the tax base and ensuring fair taxation remained key priorities of the government. During the meeting, Shehbaz Sharif highlighted that, for the first time in Pakistanâ€™s history, sugar production data had been successfully aligned with FBR records. He described this achievement as evidence that the production tracking system installed by the FBR was functioning effectively and delivering tangible results. The prime minister also commended the FBR chairman and his team for their efforts in improving tax administration. He stressed that taxpayers who consistently comply with tax laws are valuable national assets and deserve recognition. The prime minister noted that the government has provided significant facilitation to both export-oriented and domestic industries and intends to continue supporting the business community. To strengthen engagement with businesses, he directed the FBR chairman and senior officials to spend the first week of every month in Karachi to hear and resolve concerns raised by the business sector. He also instructed authorities to operationalize digital production monitoring systems by December in key sectors, including textiles, beverages, steel, poultry, edible oil and ghee, and tyres. The prime minister reiterated that all appointments and transfers within the FBR would be based strictly on merit. He praised the recently introduced performance evaluation system for FBR officers and ordered the preparation of a list of high-performing officials for recognition on Independence Day. Officials informed the meeting that the FBRâ€™s production tracking system is fully operational in the sugar, cement, tobacco, tiles, and fertilizer sectors. Implementation is nearing completion in five additional sectors with an estimated tax potential exceeding Rs700 billion. Work is also underway in nine more manufacturing sectors, which could generate an additional Rs560 billion in tax revenue. Shehbaz Sharif directed authorities to complete the rollout of indirect tax collection tracking systems across the manufacturing sector by the end of the current year. He also ordered an immediate third-party audit of Customs bonded warehouses to identify and address any irregularities. The meeting was further briefed on ongoing human resource reforms, including international-standard training programs for newly recruited and existing officers, a performance-based accountability system, and measures to improve transparency. Officials reported that the faceless customs clearance system has reduced cargo processing times while improving revenue collection, supporting the governmentâ€™s efforts to modernize Pakistanâ€™s tax administration.

Date: 2026-07-30

Details: Written by Faisal Shahnawaz in Taxation Punjab Revenue Authority intensifies enforcement of the Electronic Invoice Monitoring System to improve tax compliance and expand the provincial tax base. The Punjab Revenue Authority (PRA) has announced stricter enforcement measures against businesses that fail to comply with the mandatory Electronic Invoice Monitoring System (EIMS), reaffirming its commitment to improving tax compliance and strengthening revenue collection across the province. The directive was issued by PRA Chairman Moazzam Iqbal Sipra during a performance review meeting focused on business registration, EIMS implementation, and tax collection across various divisions. During the meeting, officials were instructed to accelerate the campaign aimed at ensuring mandatory adoption of the Electronic Invoice Monitoring System by all eligible businesses. The Chairman also directed field officers to intensify efforts to register new businesses and bring more commercial entities into the provincial tax network. According to the PRA, expanding the tax base remains one of its top priorities, alongside improving compliance with existing tax regulations. Sipra stressed that businesses found violating EIMS requirements would face strict legal action. He instructed officials to promptly investigate complaints related to fake, unauthorised, or QR code-less invoices and impose heavy penalties on those found responsible under the relevant tax laws. The PRA further warned that businesses involved in tax evasion or other violations would remain under continuous monitoring. The Authority believes that stronger enforcement will help discourage illegal practices while ensuring a level playing field for compliant taxpayers. Highlighting the importance of digital transformation, the Chairman said the Electronic Invoice Monitoring System plays a vital role in promoting transparency, improving taxpayer services, and enhancing the efficiency of tax administration. He noted that digital tax systems enable better monitoring of business transactions while reducing opportunities for tax fraud. The PRA maintained that the combination of effective enforcement and wider adoption of digital tax solutions is essential for sustainable growth in provincial tax revenues. Officials were also encouraged to continue awareness campaigns to educate businesses about the benefits and legal requirements of the EIMS platform. With stricter compliance measures now in focus, businesses operating in Punjab are being urged to ensure timely implementation of the Electronic Invoice Monitoring System and issue valid QR code-enabled invoices to avoid penalties and remain compliant with provincial tax regulations.

Date: 2026-07-30

Details: Written by Faisal Shahnawaz in Automotive, Taxation Honda Atlas says strategic pricing helps buyers benefit from 18% sales tax while supporting demand for its best-selling sedan KARACHI: Honda Atlas Cars (Pakistan) Limited (HCAR) has revealed that it is deliberately keeping the price of its best-selling Honda City below Rs5 million to enable customers to benefit from the lower 18% sales tax, rather than the 25% rate applicable to higher-priced vehicles. The disclosure was made during an analyst briefing in which the companyâ€™s management discussed its financial performance for MY26 and shared its outlook for Pakistanâ€™s automobile industry. Honda City strategically priced below tax threshold Honda Atlas management said the Honda City continues to be priced at approximately Rs4.9 million, allowing it to remain below the Rs5 million threshold that attracts the standard 18% sales tax. Passenger vehicles priced above Rs5 million are subject to a 25% sales tax, making the pricing strategy a key factor in preserving affordability and sustaining demand for the companyâ€™s flagship model. The company acknowledged that maintaining the Cityâ€™s price below the tax threshold has affected profitability, with Honda Atlas absorbing part of the increase in production costs instead of passing the full burden on to customers. As a result, gross margins have remained relatively lower than they might otherwise have been. Vehicle sales record strong growth Honda Atlas reported a sharp recovery in sales during MY26, with total vehicle sales increasing to 25,621 units, compared with 16,100 units in the previous year. Management expects the positive trend in Pakistanâ€™s automotive sector to continue, forecasting industry sales growth of around 25% year-on-year during the next fiscal year. The company said it aims to expand at least in line with overall market growth while continuing to strengthen its market position. Honda City remains the companyâ€™s best-selling model The Honda City continues to dominate Honda Atlasâ€™ sales portfolio, accounting for around 70% of total vehicle sales. Within the City range, the 1.2-litre variant contributes approximately 85% of City sales, while the 1.5-litre model represents the remaining 15%. Meanwhile, the Honda Civic and HR-V each contribute roughly 15% of total company sales. The company also confirmed that the BR-V has been discontinued from its product line-up. Hybrid vehicles remain the preferred strategy Discussing future product plans, Honda Atlas said hybrid electric vehicles (HEVs) are better suited to Pakistanâ€™s current market conditions than battery electric vehicles (BEVs). Under the Automotive Industry Development and Export Policy (AIDEP) 2021â€“26, hybrid-specific components attract a 4% customs duty, which management expects could increase to 5% under the proposed Auto Policy 2026â€“31. The company is also advocating equal tax treatment for HEVs, plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs) through uniform customs duty and sales tax policies. Although Honda Atlas has the technological capability and localisation expertise to manufacture electric vehicles, management said the company currently has no plans to enter the battery electric vehicle segment. New models and industry outlook Honda Atlas confirmed that it is developing new products for the Pakistani market but declined to reveal whether these would be facelifts of existing models or entirely new vehicle launches. The company expects its production utilisation, currently operating at around 52% of installed capacity, to improve over the medium term as production volumes increase and new models are introduced. Management also highlighted a significant decline in used vehicle imports over the past three to four months, attributing the trend to the discontinuation of the personal baggage scheme and stricter regulations, including restrictions on the transfer of ownership of imported vehicles during the first year after import. Regarding the governmentâ€™s proposal to permit the commercial import of used vehicles, Honda Atlas said the policy remains under development and that further details are needed before assessing its potential impact on Pakistanâ€™s domestic automobile industry.

Date: 2026-07-30

Details: Written by Hamza Shahnawaz in Taxation Updated Income Tax Ordinance sets withholding tax rates on bank deposits, government securities and other debt income ISLAMABAD: The Federal Board of Revenue (FBR) has notified the tax rates applicable to profit on debt for Tax Year 2027, effective from 1 July 2026, through the updated Income Tax Ordinance, 2001, incorporating amendments introduced by the Finance Act, 2026. The revised provisions under Section 7B of the Income Tax Ordinance prescribe separate tax rates on income earned from bank deposits, government securities and other debt instruments. The updated rates will be used by banks, financial institutions and other withholding agents when deducting tax from payments of profit on debt during Tax Year 2027. Tax rates on profit on debt for Tax Year 2027 The notified tax rates are as follows: Source of profit on debt Tax rate Yield or profit paid by a banking company or financial institution on an account or deposit maintained with it 20% Yield or profit on government securities paid to any person other than an individual under clause (c) of sub-section (1) of Section 151 20% Profit on debt in all other cases 15% Bank deposits and government securities Under the updated law, a 20% tax will be deducted from the yield or profit paid by a banking company or financial institution on accounts or deposits maintained by customers. The same 20% rate will apply to the yield or profit earned on government securities where the payment is made to any person other than an individual in accordance with clause (c) of sub-section (1) of Section 151 of the Income Tax Ordinance, 2001. The revised provisions are intended to ensure consistent taxation of returns earned on deposits and government debt instruments by entities covered under the law. Other profit on debt For all other categories of profit on debt not specifically covered by the above provisions, the applicable tax rate has been fixed at 15%. This rate applies to debt-related income that falls outside the categories of bank deposits and specified government securities. Effective from 1 July 2026 The notified rates form part of the updated Income Tax Ordinance, 2001, as amended through the Finance Act, 2026, and are applicable for Tax Year 2027, beginning on 1 July 2026. Banks, financial institutions and other withholding agents are required to deduct tax at the prescribed rates when making payments of profit on debt. Taxpayers should also take the revised rates into account when calculating their tax liabilities and preparing their income tax returns for Tax Year 2027.

Date: 2026-07-30

Details: Written by Hamza Shahnawaz in Taxation Updated Income Tax Ordinance sets revised withholding tax rates for dividends from IPPs, REITs, mutual funds and SPVs ISLAMABAD: The Federal Board of Revenue (FBR) has notified the dividend tax rates applicable for Tax Year 2027, effective from July 1, 2026, through the updated Income Tax Ordinance, 2001, incorporating amendments introduced by the Finance Act, 2026. The updated law prescribes different withholding tax rates on dividend income depending on the nature of the company distributing the dividend and the status of the recipient. The revised provisions retain concessional tax treatment for certain dividends paid by Independent Power Producers (IPPs), while specifying separate rates for Real Estate Investment Trusts (REITs), mutual funds, Special Purpose Vehicles (SPVs) and companies benefiting from tax exemptions. Dividend tax rates for Tax Year 2027 Under the updated Income Tax Ordinance, the following withholding tax rates will apply: â€¢ 7.5% on dividends paid by Independent Power Producers (IPPs), where the dividend is a pass-through item under an Implementation Agreement, Power Purchase Agreement or Energy Purchase Agreement and is reimbursed by the Central Power Purchasing Agency (CPPA-G) or its predecessor or successor. â€¢ 15% on dividends distributed by Real Estate Investment Trusts (REITs) and all other dividend payments not covered under specific provisions. â€¢ 15% on dividends received from the equity component of mutual funds. â€¢ 25% on dividends attributable to the debt securities component of mutual funds. â€¢ 29% where a corporate entity receives dividends from the debt securities component of a mutual fund. â€¢ 0% on dividends received by a REIT Scheme from a Special Purpose Vehicle (SPV) under the Real Estate Investment Trust Regulations, 2015. â€¢ 35% on dividends received by any other person from a Special Purpose Vehicle (SPV). â€¢ 25% on dividends paid by a company that has no income tax liability because of tax exemptions, carried-forward business losses or tax credits. Special provisions retained The updated law continues to provide preferential tax treatment for dividends distributed by Independent Power Producers (IPPs). The concessional 7.5% tax rate will apply only where the dividend qualifies as a pass-through item under an Implementation Agreement, Power Purchase Agreement or Energy Purchase Agreement and is reimbursed by CPPA-G or its predecessor or successor entity. The FBR has also retained the 15% withholding tax on dividends distributed by Real Estate Investment Trusts (REITs) and on dividend income that does not fall within any other specified category. Mutual fund dividend taxation The taxation of dividends received from mutual funds will continue to depend on the composition of the fundâ€™s income. Dividends attributable to the equity component of a mutual fund will be taxed at 15%, while income arising from the debt securities component will be subject to 25% tax. However, where the recipient is a corporate entity, dividends attributable to the debt securities component will be taxed at the higher rate of 29%. Treatment of SPV and tax-exempt company dividends The updated provisions maintain the exemption for dividends received by a REIT Scheme from a Special Purpose Vehicle (SPV) established under the Real Estate Investment Trust Regulations, 2015. In contrast, dividends received from an SPV by any other person will attract a 35% withholding tax. The law also provides that a 25% tax will apply to dividends distributed by companies that have no income tax liability due to tax exemptions, carried-forward business losses under Part VIII of Chapter III, or tax credits claimed under Part X of Chapter III of the Income Tax Ordinance. The notified dividend tax rates form part of the updated Income Tax Ordinance, 2001, as amended through the Finance Act, 2026, and are applicable from July 1, 2026 for Tax Year 2027. Taxpayers and withholding agents are required to apply the relevant withholding tax rate based on the nature of the dividend, the distributing entity and the status of the recipient when determining tax liabilities and ensuring compliance with the law.

Date: 2026-07-30

Details: Written by Hamza Shahnawaz in Taxation Banking companies, fertiliser businesses and other high-income taxpayers remain subject to super tax under updated Income Tax Ordinance ISLAMABAD: The Federal Board of Revenue (FBR) has notified the super tax rates applicable for Tax Year 2027, effective from July 1, 2026, following the release of the updated Income Tax Ordinance, 2001, incorporating amendments introduced through the Finance Act, 2026. The revised provisions under Section 4C of the Income Tax Ordinance prescribe separate super tax rates for banking companies, certain specified sectors and other high-income taxpayers based on their taxable income. Under the updated law, banking companies with taxable income exceeding Rs150 million will continue to pay a 10 percent super tax on their income. The same 10 percent rate will also apply to taxpayers whose income is computed under Part I of the Fifth Schedule, up to the limit specified in Rule 4, as well as businesses deriving income from the sale of any kind of fertiliser, provided their taxable income exceeds Rs150 million. For all other persons, including companies and taxpayers not falling within the specified categories, a super tax of 8 percent will apply where taxable income exceeds Rs500 million. Super tax structure for Tax Year 2027 The notified super tax rates are as follows: â€¢ Banking companies: 10 percent where taxable income exceeds Rs150 million â€¢ Persons covered under Part I of the Fifth Schedule: 10 percent where taxable income exceeds Rs150 million â€¢ Persons deriving income from the sale of fertiliser: 10 percent where taxable income exceeds Rs150 million â€¢ All other persons: 8 percent where taxable income exceeds Rs500 million The FBR said these rates will apply in determining tax liabilities for Tax Year 2027, which commenced on July 1, 2026, for most taxpayers. Historical provisions retained The updated Income Tax Ordinance also retains historical provisions relating to super tax applicable in previous tax years. These include the 10 percent super tax imposed for Tax Year 2022 on specified sectors where taxable income exceeded Rs300 million. The sectors covered included airlines, automobiles, beverages, cement, chemicals, cigarettes and tobacco, fertiliser, iron and steel, LNG terminals, oil marketing, oil refining, petroleum and gas exploration and production, pharmaceuticals, sugar and textiles. Similarly, banking companies remained liable to pay a 10 percent super tax for Tax Year 2023 where taxable income exceeded Rs300 million. Finance Act 2026 amendments The notified rates form part of the updated Income Tax Ordinance, 2001, reflecting all amendments made up to June 30, 2026, through the Finance Act, 2026. The updated provisions provide clarity on the super tax obligations of banking companies, fertiliser businesses and other high-income taxpayers. Eligible taxpayers are required to incorporate the applicable super tax into the computation of their income tax liabilities for Tax Year 2027 and ensure compliance with the revised provisions while preparing their tax returns.

Date: 2026-07-30

Details: Published July 30, 2026 Updated about 2 hours ago FRANKFURT: European shares edged lower on Wednesday, as diverging results from French luxury groups weighed on the broader sector, while investors stayed on the sidelines ahead of the Federal Reserveâ€™s monetary policy decision and earnings from US Big Tech. The pan-European STOXX 600 index closed down 0.3 percent at 645.01 points, snapping a three-session winning streak. The luxury sector gauge fell 2.4 percent, leading sectoral losses. Shares in Kering jumped nearly 17 percent to the top of the STOXX 600 index, and clocked their biggest one-day gain since 2002, after second-quarter sales at its flagship brand, Gucci, fell less than expected. â€œWe believe the strong marketing effort planned for late August could help boost fourth-quarter sales and return Gucci to positive growth,â€ HSBC Global Research analysts said in a note. In contrast, Hermes shares tumbled 11 percent, logging their steepest one-day slide since 2010, after the Birkin bag maker posted second-quarter sales growth in line with expectations but said it had yet to see a fundamental rebound in China, its biggest market. Technology stocks dipped 0.4 percent, for a third straight day, led by a 4.8 percent drop in semiconductor equipment maker ASM International despite an upbeat forecast. Microsoft and Meta will report after US markets close, with investors laser-focussed on evidence of returns on their AI investments and whether the profits justify these companiesâ€™ lofty valuations. Energy stocks rose 2.2 percent, following a near 8 percent jump in Brent crude to over USD90 a barrel, as major airstrikes resumed in the Middle East and dashed hopes for an imminent end to the US-Israeli war with Iran. â€œThe reporting season is driving markets, but has been overshadowed by developments in the Middle East. Then there is general market weakness as investors remain quite nervous about capex in data centres, particularly related to AI,â€ said Andrea Cicione, head of research at TS Lombard.

Date: 2026-07-29

Details: Published July 29, 2026 Updated about an hour ago ISLAMABAD: The Federal Board of Revenue (FBR) has directed all commercial banks to start deducting withholding taxes on financial transactions/ specified payments in the erstwhile Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA) following the withdrawal of tax exemptions under the Finance Act, 2026. In a letter issued to the chief executives of banks, the FBRâ€™s Regional Tax Office (RTO) Peshawar stated that the Finance Act, 2026 has amended the Income Tax Ordinance, 2001, abolishing the tax exemptions previously available to the erstwhile FATA/ PATA. As a result, income arising in these areas is now taxable in accordance with the applicable provisions of the Ordinance. The tax authority instructed banks to ensure deduction of withholding tax on profit on debt paid to residents of the erstwhile FATA/PATA under section 151, rent payments made to landlords of bank premises in these areas under section 155 and withholding tax deduction on salary payments under section 149 of the Income Tax Ordinance, 2001. The FBR urged banks to implement the statutory changes across their branch networks and ensure full compliance with the amended tax regime, adding that its offices would provide any necessary clarification regarding the implementation of the new provisions. Meanwhile, the FBR has formally notified local government offices in Ex-PATA that, following the Finance Act, 2026, the income tax exemptions have been withdrawn and withholding tax provisions under the Income Tax Ordinance, 2001 are now fully applicable. Authorities have been directed to immediately begin deducting, depositing, and reporting withholding taxes. The Office of the Inland Revenue Officer, Unit-03, Mardan Zone has been written to the Tehsil Municipal Officer (TMA), Samarbagh, Lower Dir on the implementation of Withholding Tax Provisions in ex-PATA. The letter informs the TMA that an FTN (Free Tax Number) has been issued to TMA Samarbagh. The FTN is to be used for the deduction, collection, deposit, and reporting of withholding taxes under the Income Tax Ordinance, 2001. Under the Finance Act, 2026, the income tax exemptions previously available to former-PATA areas have been withdrawn. Consequently, the withholding tax provisions now apply in Ex-PATA, and all withholding agents must deduct applicable withholding taxes; collect and deposit them into the government treasury and report the taxes in accordance with the law. The TMA is directed to deposit all applicable withholding taxes using its allocated FTN, submit copies of the relevant Computerized Payment Receipts (CPRs) to the Inland Revenue Office, and comply immediately, Mardan Tax Office added. Copyright Business Recorder, 2026

Date: 2026-07-29

Details: Published July 29, 2026 Updated about an hour ago ISLAMABAD: Federal Board of Revenue (FBR) has issued four notifications for creation of the â€œIndependent Case Scrutiny Committeesâ€ in all federal taxes to end filing of frivolous appeals at the higher courts by the tax department. The FBR has issued four notifications; i.e., SRO.1138 (I)/2026 (income tax); S.R.O1168 (1)/2026 (Federal Excise); SRO.1169 (1)/2026 (Sales Tax) and SRO.1141 (I)/2026 (Customs). The Independent Case Scrutiny Committees will examine the legal merits of tax cases before references are filed before High Courts or petitions are instituted before the Supreme Court or the Federal Constitutional Court. According to the procedure, the proposed framework seeks to institutionalise an independent mechanism for scrutinising litigation under tax laws with the objective of ensuring that only legally sustainable cases involving substantial questions of law or significant revenue implications are pursued before superior courts. The initiative is also intended to improve the quality of tax litigation, minimise avoidable legal disputes, promote consistency in legal positions adopted by the tax department and strengthen overall litigation management within the FBR. The notification provides for the constitution of three Independent Case Scrutiny Committees with specified territorial jurisdictions. Each committee will comprise a retired judge of the Supreme Court, the Federal Constitutional Court or a High Court as Chairman, an advocate having at least 15 yearsâ€™ experience in tax and commercial litigation before superior courts, and a senior serving or retired Inland Revenue Service officer in BS-20 or above as the third member. The committees will examine every case referred to them and determine whether the matter merits filing of a reference before a High Court or a petition before the Supreme Court or the Federal Constitutional Court. Besides recommending whether litigation should be initiated, the committees will periodically review pending references and petitions to assess whether continuation of litigation remains justified in the interest of revenue. They will also maintain a comprehensive database of settled legal questions and judicial precedents to ensure consistency in future litigation while identifying systemic legal and administrative issues requiring legislative intervention by the government. Copyright Business Recorder, 2026

Date: 2026-07-29

Details: Written by Hamza Shahnawaz in Taxation Banking tax rate reduced to 42% as FBR confirms corporate income tax rates effective from July 1, 2026 ISLAMABAD: The Federal Board of Revenue (FBR) has notified the corporate income tax rates applicable for Tax Year 2027, effective from July 1, 2026, following the release of the updated Income Tax Ordinance, 2001, incorporating amendments made up to June 30, 2026. For banking companies, however, Tax Year 2027 commenced on January 1, 2026, in accordance with the provisions of the Income Tax Ordinance. The updated law prescribes separate income tax rates for banking companies, small companies and other corporate entities. Corporate tax rates for Tax Year 2027 The applicable corporate income tax rates are as follows: Type of Company Tax Rate Banking companies 42% Small companies 20% Any other company 29% The FBR said these rates will be used to determine the corporate income tax liability of companies for the relevant tax year under the amended provisions of the Income Tax Ordinance, 2001. Banking sector tax rate reduced The updated law continues the phased reduction in the corporate income tax rate applicable to banking companies. The tax rates for banks over the past three tax years are: Tax Year Tax Rate 2025 44% 2026 43% 2027 and onwards 42% The reduction to 42% for Tax Year 2027 represents a one-percentage-point decrease from the 43% rate applicable in Tax Year 2026, in line with the phased tax policy introduced under the Finance Act. Concession for small companies Small companies will continue to benefit from a concessional corporate income tax rate of 20%, aimed at supporting smaller businesses and encouraging investment and growth. Meanwhile, all other corporate entities will remain subject to a 29% corporate income tax rate for Tax Year 2027. Effective for Tax Year 2027 The notified rates form part of the updated Income Tax Ordinance, 2001, as amended through the Finance Act, 2026, and will govern the computation of corporate income tax liabilities for the relevant tax year. The FBR has advised corporate taxpayers to apply the revised tax rates when estimating advance tax liabilities, preparing financial statements and filing income tax returns for Tax Year 2027.

Date: 2026-07-29

Details: Written by Hamza Shahnawaz in Taxation New income tax slabs effective from July 1, 2026, include lower rates for salaried individuals and tax relief for pensioners ISLAMABAD: The Federal Board of Revenue (FBR) has notified the income tax rates applicable to salaried individuals for Tax Year 2027, effective from July 1, 2026, following the release of the updated Income Tax Ordinance, 2001, incorporating amendments made up to June 30, 2026. The revised tax rates apply to individuals whose income chargeable under the head â€œSalaryâ€ constitutes more than 75% of their total taxable income. The updated tax slabs reflect the amendments introduced through the Finance Act, 2026, and will be used to determine the annual income tax liability of salaried taxpayers during Tax Year 2027. Salary tax rates for Tax Year 2027 The applicable income tax rates are as follows: Annual Taxable Income Tax Payable Up to Rs600,000 Nil Exceeds Rs600,000 but does not exceed Rs1,200,000 1% of the amount exceeding Rs600,000 Exceeds Rs1,200,000 but does not exceed Rs2,200,000 Rs6,000 + 11% of the amount exceeding Rs1,200,000 Exceeds Rs2,200,000 but does not exceed Rs3,200,000 Rs116,000 + 20% of the amount exceeding Rs2,200,000 Exceeds Rs3,200,000 but does not exceed Rs4,100,000 Rs316,000 + 25% of the amount exceeding Rs3,200,000 Exceeds Rs4,100,000 but does not exceed Rs5,600,000 Rs541,000 + 29% of the amount exceeding Rs4,100,000 Exceeds Rs5,600,000 but does not exceed Rs7,000,000 Rs976,000 + 32% of the amount exceeding Rs5,600,000 Exceeds Rs7,000,000 Rs1,424,000 + 35% of the amount exceeding Rs7,000,000 The FBR said employers are required to apply these revised tax slabs while deducting income tax from employeesâ€™ salaries during Tax Year 2027. Tax relief for pensioners The updated law also provides significant tax relief for pensioners by exempting pension income up to a specified threshold. Under the revised provisions: Annual Pension Income Tax Rate Up to Rs10 million Nil Exceeds Rs10 million 5% of the amount exceeding Rs10 million Accordingly, pension income of up to Rs10 million received from a former employer during a tax year will remain fully exempt from income tax. Any amount exceeding Rs10 million will be taxed at 5% on the excess. The revised pension taxation framework is intended to provide greater financial relief to retired individuals while maintaining a modest tax on exceptionally high pension incomes. Effective from July 1, 2026 The updated salary tax rates and pension provisions form part of the FBRâ€™s revised Income Tax Ordinance, 2001, incorporating all amendments introduced through the Finance Act, 2026 up to June 30, 2026. Salaried individuals, employers and payroll administrators are expected to implement the revised tax slabs for salary withholding and annual tax computation from July 1, 2026, in accordance with the provisions applicable to Tax Year 2027.

Date: 2026-07-29

Details: Written by Hamza Shahnawaz in Taxation Revised income tax slabs effective from July 1, 2026, include up to 45% tax rate and concession for eligible professional firms ISLAMABAD: The Federal Board of Revenue (FBR) has notified the income tax rates applicable to business individuals and Associations of Persons (AOPs) for Tax Year 2027, effective from July 1, 2026, following the enactment of the Finance Act, 2026. The FBR has released the updated Income Tax Ordinance, 2001, incorporating all amendments made up to June 30, 2026, including revised tax slabs for non-salaried individuals and AOPs. Under the updated provisions, the prescribed rates will apply to every business individual and association of persons, except salaried individuals, based on their annual taxable income. Revised tax slabs for business individuals and AOPs The updated tax rates for Tax Year 2027 are as follows: Annual Taxable Income Tax Payable Up to Rs600,000 Nil Exceeds Rs600,000 but does not exceed Rs1,200,000 15% of the amount exceeding Rs600,000 Exceeds Rs1,200,000 but does not exceed Rs1,600,000 Rs90,000 + 20% of the amount exceeding Rs1,200,000 Exceeds Rs1,600,000 but does not exceed Rs3,200,000 Rs170,000 + 30% of the amount exceeding Rs1,600,000 Exceeds Rs3,200,000 but does not exceed Rs5,600,000 Rs650,000 + 40% of the amount exceeding Rs3,200,000 Exceeds Rs5,600,000 Rs1,610,000 + 45% of the amount exceeding Rs5,600,000 The revised tax structure maintains a progressive taxation system, with higher income brackets attracting higher marginal tax rates. Relief for professional firms The updated law also provides a concession for certain professional firms operating as Associations of Persons. Under the amended provisions, where an AOP is a professional firm that is legally prohibited from incorporating under the laws or regulations governing its profession, the highest applicable tax rate will be 40% instead of 45%. The concession is intended to benefit professional partnerships regulated by statutory professional bodies that do not permit incorporation, ensuring they are not subject to the highest marginal tax rate applicable to other business entities. Effective from July 1, 2026 The notification forms part of the FBRâ€™s updated Income Tax Ordinance, 2001, reflecting amendments introduced through the Finance Act, 2026, and provides clarity on the tax liabilities of business individuals and AOPs for the tax year commencing on July 1, 2026. The FBR has advised taxpayers falling within these categories to review the revised tax slabs carefully to ensure accurate calculation of their income tax liability and timely compliance with return filing requirements for Tax Year 2027.

Date: 2026-07-29

Details: Written by Faisal Shahnawaz in Taxation Fake or simulated tax invoices may attract penalties equal to invoice value, public listing, and automatic reversal of input tax credits under amended Sales Tax Act. The Federal Board of Revenue (FBR) has explained the penalties and enforcement measures applicable to registered taxpayers involved in issuing fake or simulated tax invoices during fiscal year 2026-27. The explanation has been provided under the amended Sales Tax Act, 1990, updated through June 30, 2026, as part of the governmentâ€™s efforts to strengthen tax compliance and curb fraudulent practices. According to the amended provisions, strict action will be taken against any registered person who issues a tax invoice for a transaction that is found to be simulated, fictitious, or unsupported by an actual supply of goods or services. Such violations will be determined through a formal process involving notice and adjudication by the relevant tax authorities. The FBR stated that taxpayers found guilty of issuing fake invoices will face a financial penalty equal to the total face value of the simulated or fictitious invoice or invoices. This measure is intended to discourage the use of fraudulent documentation and ensure greater transparency in commercial transactions. In addition to the monetary penalty, the tax authority will place the name and sales tax registration number of the offending taxpayer on a publicly accessible register of simulated invoice issuers. The listing will be made after the issuance of a show-cause notice and after providing the taxpayer with an opportunity to present a defense. The register will be maintained on the FBRâ€™s computerized system and will be available for public access. The consequences of being listed on the register extend beyond the offending taxpayer. Any input tax credit claimed by another taxpayer on the basis of invoices issued by a person included in the simulated invoice issuers register will be automatically reversed. Such input tax credits will be treated as inadmissible from the date the issuerâ€™s name is placed on the register. The FBR further explained that removal from the register will only be possible after full payment of the imposed penalty and any applicable default surcharge. Additionally, the taxpayer must satisfactorily demonstrate compliance with tax laws and regulations before being removed from the list. The latest clarification highlights the FBRâ€™s commitment to combating tax fraud and ensuring the integrity of Pakistanâ€™s sales tax system during FY2027.

Date: 2026-07-29

Details: Written by Faisal Shahnawaz in Taxation Businesses failing to comply with FBR integration requirements under the Sales Tax Act may face hefty fines and possible sealing of premises. The Federal Board of Revenue (FBR) has introduced strict penalties for businesses that fail to integrate their operations with the tax authorityâ€™s computerized monitoring and reporting system under the amended Sales Tax Act, 1990, updated through June 30, 2026. According to Section 40C of the law, businesses required to connect their operations with the FBR for monitoring, tracking, reporting, recording of sales, production, and other commercial transactions must ensure compliance within the timeframe specified by the tax authority. The provision applies to both businesses that have yet to register under the Act and those already registered but have not completed the required integration process. Under the revised legal framework, any person or business entity that fails to register and integrate its business systems with the FBR as mandated by law can face a penalty of up to Rs1 million. The move is aimed at improving tax compliance, enhancing transparency, and enabling real-time monitoring of business activities through digital systems. The law further states that if a business continues to violate the integration requirements for more than one month after the first penalty is imposed, it may be subjected to a second penalty of up to Rs5 million. This significantly increases the financial consequences for continued non-compliance. In addition to monetary fines, the FBR has been granted the authority to take enforcement action against defaulting businesses. Under the amended provisions, business premises may be sealed by an Inland Revenue officer, either alongside the imposition of penalties or independently, in accordance with procedures prescribed by the Board. Tax experts believe the stricter enforcement measures reflect the governmentâ€™s broader strategy to strengthen tax administration and expand the use of digital monitoring tools across various sectors of the economy. Businesses falling within the scope of the integration requirements are therefore advised to complete registration and system integration promptly to avoid financial penalties and operational disruptions. The latest amendment underscores the FBRâ€™s commitment to ensuring greater compliance with tax laws and improving documentation of economic activities through technology-driven oversight mechanisms.

Date: 2026-07-29

Details: Published July 29, 2026 Updated about an hour ago KARACHI: The Banking Mohtasib Pakistan (BMP) has granted monetary relief amounting to Rs 762.76 million to the banking customers by disposing of over eighteen thousand (18,482) complaints against commercial banks during the first half (January to June) of the current calendar year (CY26). The number of complaints being lodged against commercial banks is on the increase. The Banking Mohtasib Office received 21,392 new complaints from 1st January to 30th June, 2026, including 4,005 from the Prime Ministerâ€™s Portal as against 16,915 complaints received during the same period last year. With a view to protecting the banking customers from fraud and forgeries, the Banking Mohtasib Pakistan, Sirajuddin Aziz has stressed upon the banking customers not to disclose their personal and financial credentials to any third person. He has also advised that on receipt of suspicious calls, they should immediately approach the nearest branch of their bank or contact the Helpline of the bank. He emphasised that customers must know that â€˜Call Centresâ€™ of the banks cannot make outbound calls from their respective Helplines hence calls showing UAN numbers of banks should not be attended. Copyright Business Recorder, 2026 ASKARI BANK SECURES LONG-TERM ENTITY RATING â€˜AAAâ€™ FROM PACRA Published July 29, 2026 Updated about an hour ago ISLAMABAD: Askari Bank has secured the Long-Term Entity Rating of Triple-A (AAA) by Pakistan Credit Rating Agency Limited (PACRA). During 2025, the Bank delivered strong financial performance, with continued growth in profitability, total assets, deposits, and shareholdersâ€™ equity while maintaining a Capital Adequacy Ratio significantly above regulatory requirements. The Bankâ€™s digital transformation journey also continues to strengthen its market position through innovative banking solutions, an expanding digital ecosystem, and enhanced customer experience, thereby reinforcing its commitment to delivering secure, convenient, and future-ready financial services. Commenting on the achievement, Zia Ijaz, President & CEO, Askari Bank, said: â€œSecuring PACRAâ€™s highest Long-Term Entity Rating of Triple-A (AAA) is a significant milestone that reflects Askari Bankâ€™s institutional strength, financial resilience, and the trust placed in us by our customers, regulators, and stakeholders. This achievement is a testament to the dedication of our employees and reinforces our ambition to build the bank of first choice by delivering long-term value with excellence and integrity.â€ Copyright Business Recorder, 2026

Date: 2026-07-29

Details: Published July 29, 2026 Updated about an hour ago NEW YORK: The benchmark S&P 500 edged higher in a choppy session on Tuesday, as gains in other sectors offset a decline in chip stocks ahead of key earnings reports from some of Wall Streetâ€™s â€œMagnificent Sevenâ€ companies. Global markets have become increasingly volatile this month as investors scrutinize the need for more corporate spending on AI infrastructure such as semiconductors that underpinned strong gains in chip stocks in the previous quarter. Reflecting the volatility on Tuesday, the tech-heavy Nasdaq was trading off session lows after hitting levels last seen in late April earlier in the session. Chip majors such as Micron slid 8.8 percent, Intel shed 4.6 percent, while Nvidia wobbled and was last up 1 percent. SanDisk fell 13 percent, while Dell and Seagate lost over 10 percent each. The Philadelphia SE Semiconductor Index was down 3.5 percent, while Roundhillâ€™s Memory Exchange Traded Fund fell 7.2 percent to an over two-month low. Signs that Wall Streetâ€™s biggest companies such as Alphabet and Tesla are running out of cash to fund their ambitions have also made markets nervous, while China showcases cheaper AI models and deepens its presence in the competitive semiconductor industry. â€œInvestors are becoming less willing to reward higher AI spending on its own and are increasingly looking for progress in earning a return on that investment,â€ Brian Therien, a senior analyst at Edward Jones, said. When AI hyperscalers Amazon.com, Meta, Apple and Microsoft report earnings later this week, investors will be keen to see if their investments, worth over several hundred billion dollars, are yielding returns. Investors instead favored more cash-laden tech companies. Apple rose 0.8 percent, sending its market capitalization briefly above USD5 trillion for the first time and making it only the second company ever to achieve that milestone after Nvidia. At 12:10 p.m. ET, the Dow Jones Industrial Average rose 648.32 points, or 1.24 percent, to 52,858.40, the S&P 500 gained 26.61 points, or 0.36 percent, to 7,439.79 and the Nasdaq Composite lost 3.47 points, or 0.01 percent, to 24,928.61.

Date: 2026-07-28

Details: Written by Hamza Shahnawaz in Taxation, Top stories New FBR scheme offers 1% turnover tax, simplified returns, audit relief and Green Plate recognition for eligible retailers ISLAMABAD: Pakistan has formally enforced a special income tax procedure for small shopkeepers with an annual turnover of up to Rs200 million, introducing a simplified tax regime that offers a 1% turnover tax, exemption from routine audits and relief from several withholding tax obligations. The Federal Board of Revenue (FBR) issued SRO 1166(I)/2026 on July 27, 2026, notifying the Special Procedure for Small Shopkeepers under Section 99B, read with Section 237 of the Income Tax Ordinance, 2001. The scheme will apply to Tax Year 2026. Eligibility criteria According to the notification, the scheme is available to individuals deriving income primarily from retail shops with an annual turnover of up to Rs200 million. However, the following categories are excluded: â€¢ Retailers whose turnover exceeded Rs200 million in any of the preceding three tax years. â€¢ Owners of more than one retail shop. â€¢ Tier-1 retailers. â€¢ Jewellers. â€¢ Professionals, including doctors, engineers and lawyers. The special procedure applies only to income earned from the retail shop, while any other sources of income will remain subject to the normal provisions of the Income Tax Ordinance. Optional tax regime The FBR clarified that participation in the scheme is voluntary. Eligible shopkeepers may register through: â€¢ The IRIS web portal. â€¢ The Shopkeepersâ€™ Mobile Application. â€¢ The nearest FBR tax office. Participants may either opt for the simplified procedure or continue filing a regular income tax return under the existing tax regime. Under the new procedure, tax will be charged at 1% of gross annual turnover. Shopkeepers will be allowed to adjust withholding taxes already deducted against their tax liability. However, no refund will be available if the withholding tax exceeds the amount payable under the scheme. To qualify, taxpayers must pay a minimum cash tax of Rs25,000 with their annual income tax return, or the tax payable after adjustment of withholding taxes, whichever is higher. Simplified returns and audit relief The notification provides significant compliance relief for participants. Shopkeepers opting for the special procedure will generally not be selected for audit. Departmental proceedings may only be initiated, in consultation with representatives of recognised trade associations, where third-party information indicates: â€¢ Significant or unusual financial transactions. â€¢ Acquisition of expensive assets inconsistent with declared income. â€¢ Gross misuse or abuse of the special tax scheme. Eligible retailers will file a simplified income tax return through the IRIS portal or the mobile application. The return will require disclosure of: â€¢ Annual sales. â€¢ Purchases. â€¢ Business expenses. â€¢ Net profit. â€¢ Legitimate business assets. To improve accessibility, the simplified return form will also be available in Urdu and regional languages. Exemptions under the scheme The FBR has granted several tax concessions to participants. Retailers registered under the special procedure will be: â€¢ Exempt from withholding tax obligations under Section 153 of the Income Tax Ordinance. â€¢ Excluded from the application of minimum tax under Section 113. â€¢ Exempt from the 1.25% tax otherwise applicable under the Ordinance. These concessions are intended to simplify tax compliance for small retailers while encouraging greater voluntary registration. Penalties for non-compliance The notification prescribes escalating penalties for eligible shopkeepers who neither file a regular income tax return nor opt into the special procedure by the prescribed due date. The penalties are: â€¢ Rs10,000 for the first default. â€¢ Rs25,000 for the second default. â€¢ Rs50,000 for the third default. The FBR has specified that at least one month must elapse between each default proceeding before a subsequent penalty may be imposed. Green Plate for compliant retailers A notable feature of the scheme is the introduction of the â€œGreen Plateâ€ for compliant shopkeepers. Each eligible retailer will receive a Green Plate displaying: â€¢ An FBR-issued QR code. â€¢ The shopkeeperâ€™s National Tax Number (NTN). â€¢ The shopkeeperâ€™s name. â€¢ The business address. The Green Plate must be displayed prominently outside the business premises. According to the notification, the QR code will contain information relating to the shopâ€™s ownership and location. It further provides that no FBR officer or official shall enter the premises of a bona fide shopkeeper displaying the Green Plate in relation to tax matters, providing an additional safeguard for compliant retailers. The special procedure forms part of the FBRâ€™s broader strategy to expand the tax base, encourage voluntary compliance among small retailers and simplify tax administration through a more business-friendly framework.

Date: 2026-07-28

Details: Written by Hamza Shahnawaz in Taxation New committees led by retired judges will review tax litigation before references are filed in higher courts ISLAMABAD: The Federal Board of Revenue (FBR) has formally notified rules for the establishment and functioning of Independent Case Scrutiny Committees, introducing a new mechanism to review tax litigation before references are filed in higher courts. The FBR issued SRO 1165(I)/2026 on July 27, 2026, inserting Rule 231CB into the Income Tax Rules, 2002. The notification has been issued under Section 133A, read with Section 237 of the Income Tax Ordinance, 2001. Under the newly notified rules, the committees will independently examine tax cases before recommendations are made to file references before the High Courts or petitions before the Supreme Court or the Federal Constitutional Court. The initiative is aimed at strengthening litigation management, ensuring consistency in legal positions and reducing unnecessary tax disputes. Three independent scrutiny committees established The FBR has constituted three Independent Case Scrutiny Committees, each comprising: â€¢ A retired judge of the Supreme Court, Federal Constitutional Court or a High Court as Chairman. â€¢ An advocate with at least 15 yearsâ€™ experience in tax and commercial litigation. â€¢ A serving or retired Inland Revenue Service (IRS) officer of BS-20 or above. Each committee has been assigned jurisdiction over designated Inland Revenue offices and territorial areas across Pakistan. Committees assigned key litigation functions Under the new rules, the committees will: â€¢ Examine every eligible case before recommending whether a reference or petition should be filed. â€¢ Periodically review pending references and petitions to determine whether litigation should continue. â€¢ Maintain a database of settled legal issues and judicial precedents to promote consistency in future litigation. â€¢ Identify systemic issues requiring legislative or administrative intervention and submit recommendations to the FBR. The FBR expects the committees to improve the quality of litigation decisions while reducing avoidable appeals. Strict timelines for case review The rules require Commissioners to refer eligible cases to the relevant committee within 10 days of receiving an order from the Appellate Tribunal Inland Revenue (ATIR) or the High Court. Each referral must include: â€¢ Relevant case documents. â€¢ Revenue implications. â€¢ Questions of law involved. â€¢ Applicable judicial precedents. â€¢ Appellate orders. â€¢ The Commissionerâ€™s recommendations. The committees will meet daily, either physically or through online sessions, and must finalise their recommendations within 15 days of receiving a case. This period may only be extended where justified in writing and within the applicable statutory limitation period. In urgent cases where limitation periods are close to expiring or significant revenue loss is anticipated, the Chairman may authorise the immediate filing of a reference or petition, subject to a post-facto review by the full committee within 30 days. Transparency and governance measures The notification also introduces governance and transparency requirements for the committees. They will be required to publish anonymised annual summaries of their recommendations, excluding confidential taxpayer information, and maintain a searchable database of legal decisions to encourage consistency in future litigation. Committee members will serve one-year terms, which may be extended based on satisfactory performance. In addition, each committee must submit an annual report to the FBR by 31 March every year, detailing litigation outcomes, revenue implications and recurring legal issues identified during the review process. The notification also prescribes remuneration for committee members, including monthly retainers and case-based payments. However, serving FBR Board members and the committee Secretary will not be entitled to additional remuneration except where permitted under the governmentâ€™s existing reward and honorarium rules. The introduction of the Independent Case Scrutiny Committees marks a significant reform in Pakistanâ€™s tax litigation framework, with the FBR seeking to improve the quality of legal decision-making, reduce unnecessary court cases and promote greater consistency in the interpretation and application of tax laws.

Date: 2026-07-28

Details: Written by Hamza Shahnawaz in Taxation Tax authority urges individuals, companies and AOPs to complete IRIS e-enrolment before filing annual income tax returns ISLAMABAD: The Federal Board of Revenue (FBR) on Monday issued fresh guidelines on taxpayer registration as the filing of Income Tax Returns for Tax Year 2026 officially commenced across Pakistan. The FBR urged individuals, companies, associations of persons (AOPs) and foreign nationals to complete their registration through its online system before submitting their annual income tax returns. E-enrolment mandatory for taxpayer registration According to the FBR, an individual, company, association of persons (AOP) or foreign national becomes a registered taxpayer after successfully completing e-enrolment on the IRIS portal. The tax authority said the e-enrolment process provides taxpayers with a National Tax Number (NTN) or Registration Number, along with login credentials required to access the online tax filing system. For individual taxpayers, the 13-digit Computerised National Identity Card (CNIC) serves as the National Tax Number (NTN) or Registration Number. For companies and associations of persons, the seven-digit NTN issued after successful e-enrolment functions as their official Registration Number. IRIS portal for tax filing The FBR said the registration credentials enable taxpayers to log in to the IRIS portal, the authorityâ€™s online income tax management system. The IRIS portal is the only platform through which taxpayers can electronically: â€¢ File their Income Tax Return for Tax Year 2026 â€¢ Submit wealth statements â€¢ Fulfil other statutory tax obligations The tax authority advised all eligible taxpayers to complete their registration well before the filing deadline and keep their login credentials secure to ensure a smooth and uninterrupted return filing process. Filing season officially begins The launch of the annual return filing season marks the start of the FBRâ€™s nationwide exercise to collect Income Tax Returns for Tax Year 2026 from salaried individuals, businesses, companies, associations of persons and other eligible taxpayers. The FBR is expected to issue additional guidelines, reminders and facilitation measures throughout the filing season to help taxpayers comply with their legal obligations and improve voluntary tax compliance.

Date: 2026-07-28

Details: Written by Hamza Shahnawaz in Taxation Updated law outlines repayment of sales tax on production inputs and zero-rated supplies in Azad Jammu and Kashmir ISLAMABAD: The Federal Board of Revenue (FBR) has clarified the provisions governing the repayment of sales tax in certain cases for the fiscal year 2026-27 (FY27) under the Sales Tax Act, 1990, updated up to June 30, 2026. According to the updated law, the FBR has the authority to authorise the repayment of sales tax paid on specified goods used in manufacturing, processing, repair or refitting activities in Pakistan, subject to prescribed conditions, limitations and restrictions. Repayment of tax on production inputs Under the provision titled â€œRepayment of tax in certain cases,â€ the Board may authorise the repayment, either in full or in part, of sales tax paid on goods of a class or description specified by the FBR. The law provides that the goods must have been used in the production, manufacture, processing, repair or refitting of other goods in Pakistan that are also specified by the Board. However, such repayments remain subject to conditions, limitations and restrictions imposed by the FBR to ensure compliance with the applicable sales tax framework. Repayment for zero-rated supplies in AJK The updated legislation also includes a separate provision for taxpayers registered in Azad Jammu and Kashmir (AJK). Under the law, the FBR may authorise the repayment, wholly or partly, of input tax paid on goods acquired within Pakistan or imported into the country by persons registered in AJK. The repayment facility is available to registered persons engaged in making zero-rated supplies, provided they satisfy all conditions, limitations and restrictions prescribed by the Board. Legal framework for FY27 The FBR said these provisions form part of the Sales Tax Act, 1990, as amended up to June 30, 2026, and establish the legal framework governing the repayment of sales tax to eligible businesses and taxpayers during FY27. The clarification is intended to provide certainty to manufacturers, processors and exporters regarding the circumstances under which sales tax paid on eligible goods may be repaid, while ensuring that repayments are made in accordance with the requirements laid down under the updated law.

Date: 2026-07-28

Details: Written by Faisal Shahnawaz in Budget 2026-27, Taxation Finance Act 2026 brings cryptocurrency exchanges, wallet providers and digital asset intermediaries into the provincial tax net PESHAWAR: The Government of Khyber Pakhtunkhwa (KP) has introduced a 5% sales tax on cryptocurrency and digital asset trading services, marking a significant step towards bringing the provinceâ€™s rapidly growing virtual asset ecosystem into the tax net. The measure has been introduced through the Khyber Pakhtunkhwa Finance Act, 2026, which inserts a new taxable service under Serial No. 45 of Part II of the Second Schedule to the Khyber Pakhtunkhwa Sales Tax on Services Act. Under the new provision, services provided through any digital, electronic or online platform, exchange, application or interface that enables, facilitates, intermediates or executes the buying, selling, exchange, forecasting, transfer or trading of virtual assets and other financial instruments will be subject to sales tax at the rate of 5% without input tax adjustment. Broad range of digital trading services covered The amendment applies to services involving transactions between two or more persons relating to: â€¢ Virtual assets â€¢ Digital assets â€¢ Financial instruments â€¢ Commodities â€¢ Securities â€¢ Derivatives â€¢ Other tradable instruments The taxable consideration includes fees, commissions, spreads, mark-ups and any other similar charges collected by service providers for facilitating these transactions. Cryptocurrency exchanges and wallet providers included The Finance Act further clarifies that the terms â€œvirtual assetâ€ and â€œvirtual asset servicesâ€ will carry the meanings assigned under the Virtual Assets Act, 2026, or as defined by the relevant management committee. The legislation also states that the taxability of these services will be determined by their economic substance and functional nature, irrespective of their nomenclature, legal form or designation. As a result, the new tax regime extends to a wide range of digital asset service providers, including: â€¢ Cryptocurrency exchanges â€¢ Digital asset brokers â€¢ Wallet service providers â€¢ Custodial platforms â€¢ Other intermediaries facilitating virtual asset transactions Major policy shift towards digital economy taxation The introduction of the reduced 5% sales tax represents a significant policy shift by the Khyber Pakhtunkhwa government towards formalising the taxation of the digital economy. By adopting broad legislative language, the province aims to capture a wide spectrum of intermediaries operating in cryptocurrency and digital trading markets while applying a lower tax rate than the standard provincial sales tax on services. Tax experts believe the measure reflects the governmentâ€™s recognition of the growing role of virtual assets in Pakistanâ€™s digital economy and its intention to establish a formal taxation framework for cryptocurrency-related services. They also expect the move to encourage greater regulatory compliance and improve documentation within the emerging digital asset sector while expanding the provincial tax base.

Date: 2026-07-28

Details: â€¢ GIFT Nifty futures were at 23,962 Published July 28, 2026 Updated 4 minutes ago Indian shares are set to open flat on Tuesday, after snapping a five-session losing run in the previous session on a slide in crude oil prices, as investors weigh a pause in the Middle East strikes ahead of the crucial U.S. Federal Reserve rate decision. GIFT Nifty futures were at 23,962 as of 8:04 a.m. IST, indicating the benchmark Nifty 50 could open near Mondayâ€™s close of 23,995.95. Brent crude fell 0.9% to about $87.6 a barrel, after dropping 8.7% in the previous session. â U.S. President Donald Trump said on Monday that Washington was having â€œgood talksâ€ with Iran and that there was a chance of resolution. Trump, however, said U.S. strikes would resume if negotiations failed, while Iran issued similar comments about retaliation, keeping geopolitical risks intact. The volatility in crude prices could influence the Fedâ€™s inflation assessment in its rate decision and commentary due on Wednesday. The Fed is expected to keep rates unchanged, but expectations of a 25-basis-point hike have increased to 37.9% from 16% â a week ago, according to theCME FedWatch tool. Domestic benchmark indexes rose about 1% each on Monday, paring back some of last weekâ€™s losses of 2.3% and 2.7% in the Nifty 50 and Sensex, respectively. Domestic institutional investors purchased stocks worth 23.29 billion rupees ($242.86 million), while foreign institutional investor â outflows stood at 16.88 billion rupees, according to provisional NSE data. Quarterly earnings have also driven stock-specific moves over the past two weeks. Bharat Electronics reported a rise in June quarter profit, with â brokerages saying that strong execution offset its margin miss. Tata Power posted a rise in first-quarter profit, aided by higher operating earnings and growth in transmission and distribution. Coal India â its first-quarter profit view on weak volumes and higher costs, while airline operator IndiGo will also be in focus after appointing insider Kiran Thadimarri as chief financial officer, effective Tuesday.

Date: 2026-07-28

Details: Published July 28, 2026 Updated about 3 hours ago KARACHI: Business and industrial community has termed maintaining the interest rate at 11.5 percent as harmful to the industry and exports. Saquib Fayyaz Magoon, Acting President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), expressed his profound disappointment over the State Bank of Pakistanâ€™s (SBP) decision to maintain status quo on its key policy rate following the Monetary Policy Committee (MPC) meeting on Monday. The apex trade body termed the decision as â€œcontractionaryâ€, warning that holding the benchmark interest rate at an elevated level would continue to stifle economic activity, hamper access to finance, and severely undermine industrial revival efforts across the country. Saquib Fayyaz Magoon categorically denounced the central bankâ€™s cautious approach, emphasizing that the business community had anticipated some reduction to help bring down the exorbitant cost of doing business â€” and facilitate trade and industry to cope with the economic challenges. The acting FPCCI chief said that maintaining status quo on the policy rate in the current economic scenario was a setback to the business communityâ€™s expectations as Pakistani industry and exporters had already been battling an existential crisis due to elevated energy tariffs and sky-high financing costs. Magoonsaid, â€œWe cannot run our industries or compete in global markets under such punishing financial burdens. A single-digit interest rate is absolutely critical right now to lower production costs, make goods and services more affordable, and effectively kick start the economy.â€ Abdul Mohamin Khan, VP and Regional Chairman (Sindh) of the FPCCI, said that with core inflation stabilizing, keeping the interest rate persistently high reflected an unjustified premium that made no economic sense. The continued high cost of capital remained the primary driver of industrial closures and the inability of Pakistani exporters to remain globally competitive. Abdul Mohamin Khan warned the government of the immediate negative impact the MPCâ€™s decision would have on commercial hubs and overall economic stability. Keeping the interest rate unchanged would undermine the business environment, discourage essential investment, and hinder any hopes of a swift economic recovery, he added. The FPCCI maintained that the business community was the backbone of Pakistanâ€™s economy, and a conducive monetary policy with a reduced, single-digit interest rate was essential to boost industrial output, create jobs, and stabilize prices. The FPCCI urged the SBP to urgently reconsider its stance and adopt measures that genuinely supported business continuity and growth. The President of the Korangi Association of Trade and Industry (KATI), Ikram Rajput, termed the State Bank of Pakistanâ€™s decision to maintain the benchmark policy rate at 11.5 per cent as detrimental to the countryâ€™s industrial sector, warning that it could further slow the recovery of industrial activity, investment and exports. Rajput said that while the growing geopolitical tension in the Middle East, concerns over rising global crude oil prices and external economic uncertainties could not be ignored, Pakistanâ€™s domestic economic indicators present an equally challenging picture. He said that escalating production costs, higher electricity and gas tariffs, and the recent trend of daily increases in petroleum prices have placed severe pressure on the industrial sector. He said the central bank should have adopted a more accommodative monetary policy by initiating a gradual reduction in the policy rate to encourage investment and ease the financial burden on industries. He urged the State Bank to announce a clear roadmap for bringing the policy rate down to a single-digit as soon as global economic conditions stabilize. The KATI president observed that persistently high interest rates are discouraging fresh industrial investment, delaying capacity expansion and constraining production, while export-oriented industries are steadily losing their competitiveness in international markets. He warned that if the cost of financing remains elevated, the country could face slower industrial growth, declining investment and rising unemployment, with serious consequences for the broader economy. Rajput said that small and medium-size enterprises (SMEs), which form the backbone of Pakistanâ€™s economy, employment and exports, are under significant financial stress due to expensive borrowing. He said high financing costs have adversely affected their expansion plans, production capacity and competitiveness, ultimately weighing on overall industrial growth. He called on the State Bank of Pakistan to ensure the availability of concessionary financing for SMEs, export-oriented industries and the manufacturing sector. He emphasized that monetary policy should not focus solely on controlling inflation but should also give equal priority to industrial development, investment, exports and strengthening the private sector. â€œBusiness-friendly interest rates are essential to restoring investor confidence and laying the foundation for sustainable economic growth,â€ Rajput concluded. Copyright Business Recorder, 2026

Date: 2026-07-27

Details: Written by Hamza Shahnawaz in Budget 2026-27, Taxation Finance Act 2026 strengthens KPRAâ€™s recovery powers and makes bank-wide compliance with recovery notices mandatory` PESHAWAR: The Government of Khyber Pakhtunkhwa (KP) has strengthened its tax recovery framework by introducing tougher penalties for bank officials who obstruct the recovery of provincial sales tax under the Khyber Pakhtunkhwa Finance Act, 2026. The new legislation amends Section 74 of the Khyber Pakhtunkhwa Sales Tax on Services Act, enhancing the recovery powers of the Khyber Pakhtunkhwa Revenue Authority (KPRA), particularly in relation to the attachment of taxpayersâ€™ bank accounts. Bank-wide compliance made mandatory Under the amended provisions, any recovery notice issued by the KPRA to a bank operating in Khyber Pakhtunkhwa will be binding on the entire banking institution. Banks will no longer be permitted to refuse or delay compliance on the grounds that the relevant taxpayerâ€™s account is maintained at a branch located outside the province. The amendment is intended to eliminate administrative hurdles that previously slowed tax recovery when taxpayers maintained accounts in branches beyond Khyber Pakhtunkhwa. Stricter penalties for non-compliance The Finance Act, 2026 also introduces tougher sanctions for bank officials who fail to comply with valid recovery notices or deliberately obstruct the recovery process. Under the revised law, any bank official who refuses to comply with a lawful recovery notice or is found to have manipulated its execution may face a personal penalty of up to Rs500,000 or five per cent of the amount of tax involved, whichever is higher. The government expects the enhanced penalties to ensure timely compliance with recovery orders and discourage attempts to delay or frustrate the collection of provincial taxes. KPRAâ€™s enforcement powers strengthened The amendment forms part of the Khyber Pakhtunkhwa governmentâ€™s broader strategy to modernise tax administration, strengthen enforcement mechanisms and improve provincial revenue collection. By making recovery notices enforceable across an entire banking institution rather than a single branch, the government aims to accelerate the recovery of outstanding tax liabilities and prevent tax defaulters from exploiting branch-specific technicalities to avoid enforcement. Tax experts believe the revised provisions will enhance the KPRAâ€™s ability to recover unpaid provincial sales tax while increasing accountability within the banking sector for complying with lawful tax recovery orders. The latest measures are expected to support stronger tax administration in the province by improving enforcement efficiency, reducing procedural delays and reinforcing compliance with provincial tax laws.

Date: 2026-07-27

Details: Written by Mrs. Anjum Shahnawaz in Budget 2026-27, Taxation, Top stories Punjab to receive the largest allocation as higher federal tax revenues boost NFC transfers to all four provinces ISLAMABAD: Pakistanâ€™s four provinces are set to receive a record Rs8.63 trillion from the federal divisible tax pool during FY2026-27, reflecting higher revenue projections and increased fiscal transfers under the National Finance Commission (NFC) Award. According to the Federal Budget 2026-27 documents, the provincial share in divisible taxes has increased from Rs7.40 trillion in the previous fiscal year, representing a substantial rise in transfers to provincial governments. The divisible pool comprises collections from major federal taxes, including income tax, sales tax (excluding General Sales Tax on services), customs duties, federal excise duty (FED) and capital value tax (CVT). Provincial share by tax category The estimated provincial allocation from each tax category during FY2026-27 is: â€¢ Income tax: Rs4.25 trillion â€¢ Sales tax (excluding GST on services): Rs2.82 trillion â€¢ Customs duties: Rs946.78 billion â€¢ Federal Excise Duty (net of gas): Rs611.70 billion â€¢ Capital Value Tax: Rs15.24 billion The higher allocations reflect the federal governmentâ€™s ambitious tax collection targets for the fiscal year, which are expected to generate greater resources for distribution under the NFC formula. Punjab to receive the largest allocation Punjab will remain the largest beneficiary of the divisible tax pool, with an estimated allocation of Rs4.39 trillion during FY2026-27. The provinceâ€™s share includes: â€¢ Income tax: Rs2.16 trillion â€¢ Sales tax: Rs1.43 trillion â€¢ Customs duties: Rs481.41 billion â€¢ Federal Excise Duty: Rs311.00 billion â€¢ Capital Value Tax: Rs7.75 billion Sindhâ€™s share exceeds Rs2 trillion Sindh is projected to receive Rs2.08 trillion from the divisible tax pool. Its allocation comprises: â€¢ Income tax: Rs1.02 trillion â€¢ Sales tax: Rs679.00 billion â€¢ Customs duties: Rs228.42 billion â€¢ Federal Excise Duty: Rs147.58 billion â€¢ Capital Value Tax: Rs3.68 billion Khyber Pakhtunkhwa allocated Rs1.39 trillion Khyber Pakhtunkhwa has been allocated approximately Rs1.39 trillion under the NFC framework. The provincial distribution includes: â€¢ Income tax: Rs683.42 billion â€¢ Sales tax: Rs453.06 billion â€¢ Customs duties: Rs152.37 billion â€¢ Federal Excise Duty: Rs98.45 billion â€¢ Capital Value Tax: Rs2.45 billion Balochistan to receive Rs771 billion Balochistan is expected to receive Rs771.39 billion from the divisible tax pool during FY2026-27. The allocation comprises: â€¢ Income tax: Rs379.34 billion â€¢ Sales tax: Rs251.47 billion â€¢ Customs duties: Rs84.58 billion â€¢ Federal Excise Duty: Rs54.64 billion â€¢ Capital Value Tax: Rs1.36 billion Higher transfers to strengthen provincial finances The record transfers are expected to strengthen the fiscal position of provincial governments and provide additional resources for spending on key sectors, including healthcare, education, infrastructure and public services. The increased allocations also underscore the federal governmentâ€™s expectation of stronger tax revenues in FY2026-27, enabling larger fiscal transfers under the NFC Award and supporting greater development spending across Pakistanâ€™s four provinces.

Date: 2026-07-27

Details: Written by Hamza Shahnawaz in Budget 2026-27, Taxation Advisor says NTOM will transform FBR into a data-driven, technology-enabled and transparent tax administration MURREE: The Advisor to the Federal Minister for Finance and Revenue has unveiled the New Tax Operating Model (NTOM), describing it as a landmark reform that will modernise Pakistanâ€™s tax administration through digitalisation, data analytics and risk-based compliance. Addressing the four-day National Tax Seminar, jointly organised by the Pakistan Tax Bar Association (PTBA) and the Lahore Tax Bar Association (LTBA) in Murree, the advisor outlined Pakistanâ€™s improving macroeconomic outlook, the governmentâ€™s structural reform agenda, priorities of the FY2026-27 Budget, and the implementation of the NTOM. He said Pakistan has made significant progress in restoring macroeconomic stability through prudent fiscal management and the implementation of key structural reforms. According to the advisor, stronger fiscal discipline, improved debt management, rebuilding external financial buffers and renewed investor confidence have enabled the country to move beyond economic stabilisation towards sustainable, private sector-led growth. Government highlights economic reforms The advisor said the governmentâ€™s reform programme has received international recognition through improved sovereign credit ratings, successful reviews under the International Monetary Fund (IMF) programme, renewed access to international capital markets, growing investor confidence and favourable assessments from global financial institutions. He added that these developments reflect the governmentâ€™s commitment to strengthening Pakistanâ€™s economic fundamentals while creating a stable environment for investment and long-term growth. FY2026-27 Budget focuses on growth Highlighting the federal budget for FY2026-27, the advisor described it as a balanced, responsible and growth-oriented financial plan aimed at encouraging investment, boosting exports, supporting industrial development and creating employment opportunities while maintaining fiscal discipline. He said the budget provides meaningful tax relief for the salaried class and introduces measures to improve business competitiveness and support exporters. The budget also advances tariff reforms, promotes documentation of the economy and reinforces the governmentâ€™s commitment to broadening the tax base instead of placing additional burdens on compliant taxpayers. The advisor noted that the wider reform agenda also includes public debt management, privatisation, restructuring of state-owned enterprises (SOEs), pension reforms, energy sector reforms, Digital Pakistan initiatives, capital market development and improved access to finance. He said these reforms are strengthening public institutions, improving governance, enhancing productivity and creating a more competitive and investment-friendly business environment. NTOM to transform FBR operations A central focus of the seminar was the introduction of the New Tax Operating Model (NTOM), which the advisor described as a major structural transformation of the Federal Board of Revenue (FBR). He explained that the NTOM will shift the FBR from a traditional officer-driven system to a data-led, technology-enabled, faceless and accountable tax administration. Under the new framework, audit, assessment and field operations will be separated into specialised functions, supported by centralised data analytics, digital technologies and risk-based compliance systems. The advisor said the reforms are designed to reduce administrative discretion, minimise direct interaction between taxpayers and tax officials, strengthen taxpayer rights and improve transparency, consistency and operational efficiency across the tax administration. Experts discuss tax reforms The seminar also featured discussions on tax policy and digital transformation by leading experts. Economist Dr Nadeem Ul Haque delivered the keynote address on tax policy reforms, while FCA Muhammad Rehan Siddiqui presented a session on faceless jurisdiction and the digitalisation of tax administration. Speaking at the event, Pakistan Tax Bar Association President Ehsan-ul-Haq Sheikh, Lahore Tax Bar Association President Rana Saqib Munir, and Patron of the Pakistan Tax Bar Association and Chairman of the Pakistan Tax Bar Academy Abdul Qadir Memon welcomed the governmentâ€™s continued engagement with the tax community. They reaffirmed their commitment to constructive dialogue with policymakers to help develop a simpler, more transparent, technology-driven and business-friendly tax system that supports sustainable economic growth and encourages voluntary tax compliance.

Date: 2026-07-27

Details: Written by Faisal Shahnawaz in Taxation New framework enables Inland Revenue authorities to perform assigned functions through algorithm-based systems while maintaining confidentiality. The Federal Board of Revenue (FBR) has officially notified the implementation of the National Faceless Jurisdiction framework under the amended provisions of the Sales Tax Act, 1990, updated through June 30, 2026. The move is aimed at modernizing tax administration by allowing designated Inland Revenue authorities to perform assigned functions through a centralized and technology-driven system. According to the notification, Inland Revenue officers appointed at the National Faceless Centre will be authorized to exercise powers and perform functions assigned to them for specific taxpayers, categories of taxpayers, or designated tax periods. These assignments will be made through algorithms developed by the FBR, introducing a more automated and data-driven approach to tax administration. The notified framework states that the jurisdiction allocated to officers at the National Faceless Centre may either be exclusive or concurrent. This means tax-related proceedings can be handled solely by the designated authorities or shared with other relevant Inland Revenue officers, depending on the nature of the case and administrative requirements. The FBR has also retained the authority to transfer jurisdiction from the National Faceless Centre to an Inland Revenue officer who otherwise has territorial jurisdiction over a taxpayer. Such transfers may be made either on the recommendation of the Chief Commissioner or on the Boardâ€™s own initiative for a specific tax period. Under the new arrangement, the Chief Commissioner at the National Faceless Centre may seek assistance from field formations for physical verification when required. These verifications may include assessment of business operations, assets, investments, expenditures, and other relevant information needed for ongoing proceedings. The Board may also allocate verification assignments through an algorithm-based mechanism. A key feature of the framework is the confidentiality of officers handling cases. The law provides that the identity of authorities exercising jurisdiction at the National Faceless Centre will remain confidential from registered persons, their authorized representatives, and any unauthorized individuals. This provision is intended to strengthen impartiality and reduce direct interaction during proceedings. Furthermore, the notification clarifies that notices, orders, or communications issued by authorities at the National Faceless Centre cannot be challenged solely on the grounds of jurisdictional issues, delegation concerns, or the confidentiality of the officerâ€™s identity. The measure is expected to support greater efficiency, transparency, and consistency in tax administration across Pakistan.

Date: 2026-07-27

Details: Written by Hamza Shahnawaz in Taxation, Top stories Muhammad Aurangzeb urges FBR officers to leverage artificial intelligence as government accelerates tax reforms LAHORE: Federal Minister for Finance Muhammad Aurangzeb on Saturday announced fresh initiatives to modernise the Federal Board of Revenue (FBR) and strengthen Pakistanâ€™s tax administration as part of the governmentâ€™s broader economic reform agenda. Addressing the graduation ceremony of FBR officers in Lahore, the finance minister said the government is working collectively to improve tax policy and make the countryâ€™s tax system more efficient, transparent and technology-driven. He said providing relief and convenience to taxpayers remains one of the governmentâ€™s top priorities, adding that comprehensive reforms are being implemented to promote a cashless economy and improve the overall efficiency of tax administration. Aurangzeb said the positive impact of these reforms has already started to emerge within the FBR, reflecting the governmentâ€™s commitment to building a modern and digitally enabled tax system. AI to play key role in tax administration Highlighting the growing importance of technology, the finance minister said the world has entered the era of artificial intelligence (AI) and urged FBR officers to fully utilise AI-powered tools to improve operational efficiency, strengthen tax administration and enhance public service delivery. He said adopting advanced digital technologies would enable the tax authority to deliver better services to taxpayers while improving compliance, transparency and governance. Aurangzeb encouraged newly graduated FBR officers to continuously enhance their professional skills and embrace innovation to meet the evolving challenges of tax administration. Government committed to economic reforms The finance minister reiterated that improving market conditions and strengthening Pakistanâ€™s economic stability remain among the governmentâ€™s key priorities. He said the ongoing tax reforms are designed to create a more efficient and transparent taxation system, support sustainable economic growth and facilitate businesses and taxpayers through modern administrative practices. Aurangzeb added that the governmentâ€™s reform agenda aims to strengthen revenue collection while making tax compliance simpler and more convenient for individuals and businesses across the country.

Date: 2026-07-27

Details: BUSINESSES Written by Hamza Shahnawaz in Taxation Sales Tax Act clarifies tax liability on inherited estates and businesses operating under bankruptcy ISLAMABAD: The Federal Board of Revenue (FBR) has clarified the legal procedure for recovering outstanding sales tax liabilities from the estate of a deceased registered person and businesses operating under bankruptcy, according to the Sales Tax Act, 1990, updated up to June 30, 2026. The updated law outlines how tax liabilities are to be treated in both circumstances, ensuring that government tax claims remain enforceable even after the death or bankruptcy of a registered taxpayer. Tax liability on estate of a deceased person Under the Sales Tax Act, the outstanding sales tax liability of a deceased registered person becomes the first charge on the deceasedâ€™s estate in the hands of the legal heirs or successors. This means any unpaid sales tax must be recovered from the estate before the remaining assets can be distributed among the heirs or beneficiaries. The provision gives the FBR priority in recovering outstanding sales tax from the assets left by the deceased taxpayer. Tax recovery from bankrupt businesses The updated law also prescribes the procedure for recovering sales tax from businesses declared bankrupt. According to the Act: If a registered person is declared bankrupt, the sales tax liability passes to the estate in bankruptcy, provided the estate continues to operate the business. Any sales tax liability incurred during the administration of the bankrupt estate is treated as a current operating expense. Such tax must be paid before the claims of other creditors are settled, giving sales tax obligations priority over most other financial liabilities. Revenue protection measures The FBR said these provisions are designed to safeguard government revenue by ensuring that outstanding sales tax obligations do not lapse because of the death or bankruptcy of a registered taxpayer. The updated provisions form part of the Sales Tax Act, 1990, as amended up to June 30, 2026, and provide the legal framework for recovering unpaid sales tax from deceased estates and bankrupt businesses while protecting the governmentâ€™s tax claims.

Date: 2026-07-27

Details: Written by Faisal Shahnawaz in Taxation Karachi electricity consumers listed on the FBR Active Taxpayer List can continue to avail exemption by updating their CNIC with their KE account. Karachi electricity consumers who are registered tax filers can continue to benefit from the 7.5 percent Advance Income Tax exemption on their K-Electric (KE) electricity bills in 2026, provided their customer records are properly updated. K-Electric has once again reminded its customers that eligible tax filers can avoid the deduction of the 7.5 percent Advance Income Tax by ensuring their Computerised National Identity Card (CNIC) is linked with their current KE account number. While the company recently highlighted the facility through a customer awareness campaign, it is important to note that this is not a new policy and has been in effect since the implementation of the Finance Act 2021. Under the provisions of the Finance Act 2021, residential electricity consumers who are not included in the Federal Board of Revenueâ€™s (FBR) Active Taxpayer List (ATL) are subject to a 7.5 percent Advance Income Tax on monthly electricity bills of Rs25,000 or more. The measure came into force on July 1, 2021, and continues to apply under the existing tax framework unless revised by the government. Customers who are active tax filers are exempt from this advance tax. However, to receive the exemption automatically, they must ensure that their CNIC is correctly registered against their existing KE electricity account. If the CNIC is missing or outdated, the system may not identify the customer as an eligible tax filer, resulting in the advance tax being charged on the monthly bill. K-Electric has advised customers to verify and update their account information whenever necessary to avoid unnecessary tax deductions. Once the CNIC is linked with the correct electricity connection and the customer appears on the FBRâ€™s Active Taxpayer List, the applicable exemption can be availed in accordance with government tax regulations. Consumers are also encouraged to regularly check their taxpayer status and keep their personal details updated with both the FBR and K-Electric. Doing so can help ensure that eligible customers continue to receive the available tax relief without delays or billing discrepancies.

Date: 2026-07-27

Details: Published July 27, 2026 Updated about 3 hours ago By Naseem Usman KARACHI: Cotton market witnessed a volatile week as prices swung sharply downward, reversing last weekâ€™s gains, even as fresh rains in key growing regions raised fresh concerns for the crop and industry leaders warned of a looming import bill running into billions of dollars. Cotton prices fell by a significant 300 to 400 rupees per maund this week, as last weekâ€™s upward trend gave way to a sharp downturn. The spot rate also declined by 100 rupees per maund. Over the past two weeks, cotton prices have swung by a notable 800 to 1000 rupees overall, though trading activity is reported to have improved despite the volatility. Meanwhile, the Overseas Investors Chamber of Commerce and Industry (OICCI) has voiced deep concern over the continuing decline in domestic cotton production. The chamber warned that if the trend continues, Pakistan may be forced to import cotton worth 2 to 3 billion dollars, placing a heavy burden on the national economy. On a more positive note, the â€œCotton Mela 2026â€ held in Khanpur emerged as a notable success story, with delegations from the Pakistan Cotton Brokers Association (PCBA) and the Pakistan Cotton Ginners Association (PCGA) holding productive discussions on the cotton trade, a development seen as encouraging for the sector. On the legal front, the Sindh High Court has granted temporary relief to the Karachi Cotton Association (KCA), permitting it to continue business operations in its building. However, the association says that despite the court order, it has still not been allowed to return to the premises, a matter over which it has expressed strong reservations. Adding to the industryâ€™s concerns, rains have begun in the cotton growing areas of Sindh and Punjab, raising fears of a possible impact on the standing crop. Cotton prices in the local market witnessed a volatile week, with a bearish trend ultimately prevailing even as sharp swings pushed rates to fresh highs before pulling back sharply, industry sources reported. The week began on an upward note as a shortage in the supply of phutti (seed cotton) drove prices higher. Market sources attributed this partly to the actions of several ginners who had earlier sold large quantities of cotton at lower rates. In a bid to delay deliveries on those low-priced deals, these ginners shut down their factories entirely or ran them only partially, triggering panic across the market. As a result, cotton prices surged abruptly by 500 to 600 rupees per maund within a short span. The situation shifted, however, once the supply of phutti registered a marginal improvement. Ginners, gripped by the same panic that had earlier driven prices up, began offloading their cotton stocks. This selling pressure sent prices tumbling from their peak. In Sindh province, cotton had climbed to a high of 18,500 to 18,600 rupees per maund before retreating to 17,800 to 18,000 rupees per maund. Punjab province saw a similar pattern, with prices rising to 19,200 to 19,500 rupees per maund before easing back to 18,600 to 18,700 rupees per maund. The spot rate mirrored this volatility, fluctuating up and down through the week in line with the broader market movement. Market sources further disclosed that deliveries of nearly 25,000 bales of the lower-priced cotton remain outstanding, a backlog that continues to weigh on trading sentiment as buyers and sellers await resolution. Cotton prices across Pakistan continued to see fluctuations this week, with both lint and seed cotton (phutti) rates moving unevenly as rainfall in key growing regions disrupted the pace of arrivals and a fresh production report pointed to a significant shortfall compared to last year. According to the Pakistan Cotton Ginners Associationâ€™s (PCGA) production report up to the 15th of the month, one of the key factors behind the decline in cotton prices, output stood at approximately 528,000 bales, marking a drop of nearly 77 percent compared to production recorded during the same period last year. Meanwhile, rains have been reported across almost all cotton-growing districts of Punjab, delaying the arrival of seed cotton in the market. Sindh province also received light showers in several areas, though market observers say the region still urgently needs more substantial rainfall. Industry sources note that if adequate rains occur in the coming days, the overall crop outlook could improve. In terms of pricing, cotton lint in Sindh settled between Rs 17,800 and Rs 18,000 per maund after fluctuations, while seed cotton traded between Rs 8,200 and Rs 8,600 per 40 kilograms. In Punjab, lint prices fell from an earlier range of Rs 19,300 to Rs 19,500 per maund to Rs 18,600 to Rs 18,700 per maund. Seed cotton in the province ranged between Rs 8,300 and Rs 8,800, while rain-affected seed cotton fetched a lower price of around Rs 7,000. In Balochistan, cotton prices settled between Rs 17,900 and Rs 18,000 per maund following fluctuations, with seed cotton trading between Rs 8,400 and Rs 8,800. Meanwhile, the Spot Rate Committee of the Karachi Cotton Association reduced the spot rate by Rs 100 per maund, closing it at Rs 18,200 per maund. Karachi Cotton Brokers Forum Chairman Naseem Usman stated that international cotton prices showed an overall mixed trend. The New York cotton futures rate remained between 78 to 80 American cents per pound. According to the USDA weekly export and sales report, 51,300 bales were sold for the year 2025-26, with China topping the list by purchasing 15,500 bales, followed by Vietnam in second place with 12,300 bales, and India in third place with 7,100 bales. For the year 2026-27, 16,100 bales were sold, with Vietnam topping the list by purchasing 7,100 bales, followed by India in second place with 4,700 bales, and Pakistan in third place with 2,200 bales. Exports stood at 276,300 bales, with Vietnam topping the list by importing 96,300 bales, followed by Pakistan in second place by importing 42,700 bales, and Turkey in third place by importing 31,800 bales. Pakistanâ€™s cotton production has collapsed to less than half its peak level, falling from 14 million bales to just 6.85 million bales in fiscal year 2025-26, a decline that is costing the country an estimated two to three billion dollars annually in additional imports and lost export earnings, according to a new report by the Overseas Investors Chamber of Commerce and Industry (OICCI). The report, titled â€œSeeds of Growth,â€ is based on the views and observations of OICCI member companies linked to the agricultural sector. It notes that while cotton has suffered a severe downturn, other areas of agriculture have shown mixed results: the use of hybrid seeds has tripled maize yield per acre, even as nearly 20 percent of the countryâ€™s milk output continues to go to waste because of inadequate cold chain infrastructure. The report underscores the broader importance of agriculture to Pakistanâ€™s economy, noting that the sector contributes around 23 percent to the countryâ€™s Gross Domestic Product (GDP) and employs 37 percent of the national workforce. Meanwhile, in a development that could offer some relief to cotton growers, light to moderate rainfall has been reported in the districts of Sanghar, Mirpurkhas, Hyderabad and Nawabshah. Agricultural sources say the rain is expected to benefit the cotton crop significantly, aiding its growth and health while improving the future quality of the harvest. Meanwhile, the â€œCotton Mela 2026,â€ held at the Cotton Research Institute in Khanpur, emerged as a shining example of success, proving true the well-known saying that one should start from where one is, with what one has, and do what one can. Despite its limited resources, the institute has demonstrated that the genuine revival of cotton does not depend on large-scale projects but on true passion and firm resolve. More than 100 distinguished guests from across Punjab, including Lahore, Faisalabad, Multan and Wahari, attended this historic event. The program saw enthusiastic participation from the Agriculture Extension Department, the Plant Protection Department, various seed companies, researchers, students, and particularly the dedicated farmers of the Khanpur belt, all of whom lent strength to this national mission. The organizers expressed heartfelt gratitude to all participants and stakeholders whose constructive suggestions and presence lent dignity to the event, adding that this journey, which began from the soil of Khanpur, would, God willing, serve as a precursor to the revival of cotton across the entire country. In a separate development, the Chairman and Executive Committee members of the Pakistan Cotton Brokers Association met with the Chairman of the Pakistan Cotton Ginners Association. During the meeting, detailed discussions were held regarding the challenges faced by cotton brokers in the cotton trade. The Chairman of the PCGA assured the delegation of his full cooperation and commitment to resolving these issues. Karachiâ€™s Cotton Exchange building, a red-brick structure located on I I Chundrigar Road, served as the hub of Pakistanâ€™s cotton trade for more than a century, where cotton deals were struck daily, prices were determined, and brokers and individuals associated with the textile industry from across the country would gather. However, the building was sealed last year, after which all activities came to a halt, and cotton traders have since relocated to various parts of the city. Although the Sindh High Court granted temporary relief to the Karachi Cotton Association (KCA), allowing it to continue business activities within the building, the association says that despite the court order, it has not yet been permitted to return to the premises. Copyright Business Recorder, 2026

Date: 2026-07-27

Details: â€¢ MSCI's broadest index of Asia-Pacific shares outside Japan held steady Published July 27, 2026 Updated 32 minutes ago SYDNEY: Share markets gave a guarded response on Monday as a pause in fighting in the Gulf dragged oil prices lower, easing inflation risks and boosting bonds ahead of a packed week of central bank meetings and earnings reports. Iran said on Sunday it would halt its own attacks as long as the United States did the same, with the U.S. military reportedly concerned about dwindling supplies of ammunition. Yet, Yemenâ€™s Iran-aligned Houthis had still attacked Saudi oil installations along the Red Sea coast, threatening another waterway vital to the global oil trade. â€œNet, it looks as if developments in the Middle East have moved in a positive direction over the weekend, adding some credibility to the notion that oil above $100 a barrel seems to induce de-escalatory behaviour from both sides,â€ said Sally Auld, group chief economist at NAB. The lull in fighting over the Strait of Hormuz saw Brent crude slide 5.2% to $91.73 a barrel, while U.S. crude â dropped 5.4% to $84.45. The pullback in oil provided some relief from inflation fears and led markets to slightly pare the probability of rate hikes from the Federal Reserve. The central bank meets on Wednesday and markets imply around a one-in-three chance of a rate rise, though most analysts doubt Chair Kevin Warsh would be in favour of a move. â€œInvestors see the outcome of the July meeting as unusually uncertain, likely because the Fed has been split recently, Warshâ€™s own position remains unclear, and some of the re-escalation with Iran occurred during the blackout period,â€ noted analysts at Goldman Sachs. â€œThere will likely be at least one dissent in favour of a hike, but most voters appear unlikely to push for a move this week after the softer June inflation data.â€ The Bank of England holds its meeting on Thursday and the Bank of Japan on Friday, and both are expected to hold steady while remaining cautious about inflation risks ahead. Tech earnings to test bulls Equities took comfort in the drop in oil and yields, sending S&P 500 futures up 0.7%, while Nasdaq futures jumped 1.1%. In Europe, EUROSTOXX â 50 futures gained 0.4%, while DAX futures rose 0.6% and FTSE futures went flat. Japanâ€™s Nikkei edged up 0.1%, while South Koreaâ€™s chip-heavy index eased 1.1%. MSCIâ€™s broadest index of Asia-Pacific shares outside Japan held steady. Chinese blue chips firmed 0.4% as chipmaker surged 470% in its Shanghai trading debut after raising $8.6 billion in Asiaâ€™s biggest initial public offering this year. About one-third of S&P 500 companies are due to report this week with earnings on track to boast a 26.5% increase on last year, according to LSEG IBES data. With expectations so high and mounting unease over the vast cost â of AI capex, even blockbuster results may not be enough to please investors on the day. The massive sums involved were underlined by a WSJ report that Nvidia was in talks to provide a roughly $250 billion backstop for OpenAI as part of a data center project. Companies reporting include tech darlings Microsoft, Meta Platforms, Amazon, Apple and Qualcomm , along with a host of industrial, defence and healthcare stocks. Data â highlights include U.S. advance Q2 GDP where growth is seen picking up to an annualised 1.5% after a soft start to the year. The June PCE price index, personal income and consumption, weekly jobless claims, Q2 employment cost index and July Michigan consumer sentiment round out the diary. The euro zoneâ€™s schedule includes flash Q2 GDP, July economic sentiment, consumer â confidence, flash inflation and June unemployment. The pullback in oil helped 10-year Treasury yields fall 4 basis points to 4.63%, and nudged the dollar broadly lower. The euro added 0.3% to $1.1408 , while the dollar dipped 0.2% on the yen to 163.54 . The Singapore dollar nudged up after the countryâ€™s central bank unexpectedly tightened monetary policy by allowing a slightly faster appreciation in the currency. In commodity markets, the drop in yields helped non-interest-paying gold climb 1.3% to $4,103 an ounce.

Date: 2026-07-24

Details: Six Inland Revenue field formations to operate over the weekend to complete record transfers and support organisational restructuring ISLAMABAD: The Federal Board of Revenue (FBR) has announced that several of its key Inland Revenue field formations will remain open on Saturday, July 25, and Sunday, July 26, 2026, to facilitate the transfer of official records and complete activities related to the ongoing restructuring of its field offices. According to an official notification, the designated offices will operate over the weekend exclusively to ensure the timely transfer of records, case files and other official documents under the organisational restructuring exercise. The FBR said the temporary weekend operation is intended to ensure a smooth transition and prevent delays in administrative work. FBR offices to remain open The following Inland Revenue field formations will remain operational on July 25 and 26: Corporate Tax Office-I, Karachi Corporate Tax Office-II, Karachi Regional Tax Office-I, Lahore Regional Tax Office-II, Lahore Regional Tax Office, Islamabad Regional Tax Office, Rawalpindi The tax authority said the offices will focus on completing the transfer of physical records and official business associated with the restructuring process. PRAL to provide technical support To facilitate the electronic transfer of records and data, the Pakistan Revenue Automation Limited (PRAL) will provide technical assistance throughout the two-day exercise. According to the notification, PRAL resource persons will remain available to assist Inland Revenue officers with data migration and resolve any technical issues that arise during the transfer process. Officers directed to ensure attendance The FBR has instructed all concerned officers and officials to remain present on both days and actively participate in completing the transfer of records. The Board directed that the entire process be finalised by Sunday, July 26, 2026, enabling the newly restructured Inland Revenue formations to begin functioning without administrative disruptions. Part of broader tax reforms The restructuring of Inland Revenue field formations forms part of the FBRâ€™s broader reform agenda aimed at improving organisational efficiency, strengthening tax administration and streamlining operational processes. The FBR said completing the transfer of records and digital data without interruption will help maintain continuity in taxpayer services while supporting the implementation of the new organisational structure. Officials have been directed to ensure full compliance with the notification and complete all assigned tasks within the prescribed timeframe to facilitate a seamless transition.

Date: 2026-07-24

Details: Sales Tax Act empowers FBR to suspend utility connections for unregistered or non-integrated Tier-1 retailers ISLAMABAD: The Federal Board of Revenue (FBR) has the legal authority to order the disconnection of gas and electricity connections of certain Tier-1 retailers that fail to comply with mandatory sales tax registration and point-of-sale (POS) integration requirements under the Sales Tax Act, 1990, updated up to June 30, 2026. Under the amended law, the FBR may issue a Sales Tax General Order (STGO) directing gas and electricity distribution companies to disconnect utility services of specified businesses, notwithstanding any other provision of the Sales Tax Act or any other law. Which businesses are affected? The provision applies to two categories of businesses: Persons, including Tier-1 retailers, that fail to register for sales tax. Notified Tier-1 retailers that are registered for sales tax but fail to integrate their outlets with the FBRâ€™s Computerised Point-of-Sale (POS) System. According to the law, the measure is designed to strengthen tax compliance by ensuring that retailers fulfil mandatory registration obligations and report sales transactions to the FBR in real time. Utility connections can be restored The updated legislation also provides a mechanism for restoring utility services once businesses become compliant. If an unregistered retailer completes sales tax registration or a notified Tier-1 retailer successfully integrates its outlet with the FBRâ€™s Computerised System, the Board may issue another Sales Tax General Order instructing the relevant utility companies to restore the gas or electricity connection. Digital enforcement to improve compliance The mandatory POS integration programme enables the FBR to receive real-time sales data from large retailers, helping improve documentation of the economy, reduce tax evasion and strengthen sales tax collection. The FBR has increasingly expanded the use of digital monitoring and enforcement tools in recent years, with utility disconnections forming part of its legal framework to ensure compliance among large retailers. Tax experts say the latest provisions reinforce the governmentâ€™s efforts to improve transparency in the retail sector while encouraging businesses to comply with registration and digital reporting requirements under the Sales Tax Act.

Date: 2026-07-24

Details: Tax Ombudsman proposes stricter safeguards and supervisory oversight before enforcement actions that interrupt lawful business operations ISLAMABAD: The Federal Tax Ombudsman (FTO) has recommended that the Federal Board of Revenue (FBR) formulate and notify a special administrative protocol for tax enforcement actions that could disrupt the continuity of lawful businesses, stressing that such measures should be exercised only as a last resort. The recommendation was made in an order issued while deciding a review petition concerning the suspension of a taxpayerâ€™s sales tax registration. The Ombudsman observed that actions such as suspending sales tax registration, sealing business premises or taking other enforcement measures capable of bringing legitimate commercial activities to a standstill require stronger procedural safeguards and greater supervisory oversight. FTO calls for comprehensive enforcement protocol The FTO recommended that the Chairman FBR ensure the introduction of a Special Administrative Protocol governing all administrative actions that may interrupt lawful business operations. According to the Ombudsman, the proposed protocol should require: â€¢ Strict verification that all statutory preconditions have been fulfilled before enforcement action is initiated; â€¢ Proper and legally verifiable service of all mandatory notices in accordance with applicable laws; â€¢ A meaningful opportunity to be heard unless immediate action is expressly authorised by law; â€¢ Recording of reasons demonstrating the legality, necessity and proportionality of the proposed action; â€¢ Prior approval from an appropriately senior supervisory officer before implementing measures capable of disrupting business operations; â€¢ Expeditious internal review where business disruption is alleged to have resulted from factual errors, procedural irregularities or maladministration; and â€¢ Periodic supervisory reviews to ensure extraordinary measures remain in force only for as long as legally necessary. The Ombudsman further recommended that the protocol should expressly recognise that administrative actions capable of bringing lawful businesses to a halt should ordinarily be treated as measures of last resort. Where multiple lawful enforcement options are available, preference should be given to the approach that secures compliance while causing the least disruption to business continuity. New category for â€˜Business Continuity Casesâ€™ In a significant institutional recommendation, the FTO proposed that complaints involving the suspension of sales tax registration, sealing or locking of business premises, or similar actions that substantially interrupt lawful commercial activities should be treated as a separate category titled â€œBusiness Continuity Cases.â€ The Ombudsman directed the FTO Secretariat to prepare a dedicated Business Continuity Cases Protocol within 30 days to ensure: â€¢ Immediate identification of such complaints; â€¢ Priority processing; â€¢ Continuous monitoring; â€¢ Expeditious investigation and adjudication; and â€¢ Timely relief, wherever legally permissible, before commercial losses become irreversible. Constitutional right to conduct business The FTO observed that Article 18 of the Constitution guarantees every citizen the right to carry on any lawful trade, business or profession, subject to regulation by the state. While acknowledging that tax authorities possess legal powers to suspend registrations or seal premises, the Ombudsman noted that such actions may have consequences extending well beyond tax disputes, affecting: â€¢ Commercial viability; â€¢ Employment; â€¢ Contractual obligations; and â€¢ Business reputation. The order emphasised that the more severe the consequences of an administrative action, the greater the need for procedural discipline, fairness and supervisory care before such powers are exercised. Case highlights concerns over legal remedies The review petition arose after a taxpayerâ€™s sales tax registration was suspended, disrupting its normal business operations. Although the taxpayer later sought to withdraw the petition after securing restoration of the registration by making payment under protest, the FTO decided to examine the broader institutional issues raised by the case. According to the order, the taxpayer maintained that the payment was made solely to preserve business continuity and without prejudice to its legal rights. The Ombudsman observed that the case highlighted an important concern: businesses facing immediate operational disruption may be compelled to comply with disputed tax demands simply to avoid irreversible commercial losses, thereby reducing the practical effectiveness of available legal remedies. The FTO concluded that complaints involving interruptions to lawful business activities deserve the highest institutional priority to ensure that meaningful relief can be provided before commercial necessity overtakes the legal process.

Date: 2026-07-24

Details: Advance income tax collection falls 23% as growing rooftop solar adoption reduces grid electricity consumption KARACHI: Consumers in Karachi paid more than Rs26 billion in advance income tax through their electricity bills during fiscal year 2025-26 (FY26), according to provisional data available with PkRevenue. (Note: The revenue figures have been rounded off to prevent direct reproduction by other websites and media outlets.) Despite the substantial collection, the Federal Board of Revenue (FBR) recorded a 23 percent decline compared with the previous fiscal year, reflecting lower electricity consumption from the national grid as more consumers switched to rooftop solar systems. K-Electric, the sole electricity distribution company serving Karachi, collects advance income tax from consumers through monthly electricity bills on behalf of the FBR. The tax is administered by the Large Taxpayers Office (LTO) Karachi. Rooftop solar reduces tax receipts FBR officials attributed the decline in tax collection mainly to the rapid adoption of rooftop solar installations by industrial, commercial and residential consumers. â€œThe consumers, including industrial, commercial and domestic users, have increasingly shifted to rooftop solar, significantly reducing electricity consumption from the national grid and, consequently, the amount of advance income tax collected through electricity bills,â€ a senior FBR official said. Officials also noted that changes in electricity tariffs during the fiscal year influenced the overall collection of advance income tax under this category. Lower electricity costs may boost economic activity According to FBR officials, lower electricity costs could support industrial production and economic activity over the longer term, potentially leading to stronger tax revenues from business expansion and higher output. They added that improving industrial activity during the latter part of FY26, coupled with higher international oil prices, contributed to better monthly tax collections towards the end of the fiscal year. June collections post year-on-year growth Despite the overall annual decline, advance income tax collection through Karachiâ€™s electricity bills increased during the final month of the fiscal year. The FBR collected Rs2.81 billion under this head in June 2026, compared with Rs2.51 billion in June 2025, representing a 12 percent year-on-year increase. The latest figures highlight the evolving energy consumption pattern in Karachi, where rising investment in rooftop solar energy is reducing dependence on the national electricity grid while also affecting government revenues linked to electricity consumption.

Date: 2026-07-24

Details: Published July 24, 2026 Updated about 3 hours ago HONG KONG: Chinese stocks reversed earlier losses to close higher on Thursday as sentiment recovered from the recent AI-led correction, while investors continued to rotate into defensive plays. The Shanghai Composite Index closed up 0.3 percent at 3,876.78 points. The blue-chip CSI300 index was up 0.2 percent. The banking sector added 0.6 percent, leading gains. The defence sector strengthened 2 percent and rare earth stocks added nearly 3 percent. Among other gainers, the CSI Shanghai-Shenzhen-Hong Kong Gold Industry Equity Index jumped 1.6 percent as gold rallied. The new energy vehicle sector climbed 3.6 percent despite new US restrictions, while new energy stocks jumped 3.7 percent. The correction in the tech sectors also eased, with the tech-focused STAR 50 Index narrowing losses to 3.8 percent. The AI sector declined 2.5 percent. â€œThe recent drop in A-shares is mostly a â€˜passiveâ€™ reaction to external risks,â€ analysts at Datong Securities said in a note. â€œLooking at market conditions, the pullback has already released a lot of pressure from leveraged trading and negative sentiment, and technical indicators suggest stocks may be oversold.â€ Meanwhile, regulators have been holding frequent meetings to signal stability, and listed companies are actively buying back shares and increasing their holdings. With support building on multiple fronts, market confidence should get a boost, they added. In Hong Kong, the Hang Seng Index was up 1.3 percent at 25,210.81. The Hang Seng Tech Index added 0.7 percent. Market heavyweight Tencent bounced 1 percent after shedding more than 7 percent in the previous session. Around the region, stocks rose on Thursday after US technology firms outlined significant capital spending plans that are likely to benefit chipmakers in the region, while the escalating war in the Middle East sent oil prices to six-week highs.

Date: 2026-07-24

Details: Published July 24, 2026 Updated about 3 hours ago NEW YORK: US stocks fell to multi-week lows on Thursday, as disappointing early Big Tech earnings revived concerns about heavy AI spending, while another jump in oil prices added to inflation worries. The tech-heavy Nasdaq led losses, briefly hitting its lowest level in over two months and falling more than 7 percent below its early-June record high. The S&P 500 and the Dow also touched about one-month lows. Second-quarter results from Alphabet and Tesla, the first of the so-called â€œMagnificent Sevenâ€ megacap companies to report this season, failed to impress investors. â€œThe concern about spending among these larger technology companies has been brewing for a while,â€ said Chris Oâ€™Keefe, managing director and lead portfolio manager at Logan Capital Management. â€œGoogleâ€™s capex plans were one of those data points that really freaked people out, and the fact that cash flow has gone negative is something investors are circling.â€ Shares of Googleâ€™s parent fell 7.3 percent after the results did little to reassure investors as attention shifted to its higher spending plans and its first ever cash burn. The stockâ€™s fall dragged the communication services sector 5.6 percent lower, leading sector-wise losses on the benchmark S&P 500. Tesla dropped 12.2 percent after reporting negative free cash flow for the second quarter for the first time in more than two years. Other megacap stocks also weakened. Investors will closely watch capital spending plans from major technology companies reporting next week, as questions grow over whether massive AI investments can deliver returns strong enough to justify elevated valuations. Geopolitical concerns added to the pressure. After months of investor focus on the Strait of Hormuz, attention has shifted to the Red Sea, where Iranian-aligned Houthis, who control areas near the Bab el-Mandeb strait, have opened a new front in the Middle East crisis. US President Donald Trump vowed â€œmajor military punishmentâ€ for Iran and Houthis, after the Yemeni fighters struck two Saudi oil tankers in the Red Sea. Brent crude futures rose past USD100 a barrel, their highest level since late May. Wall Streetâ€™s fear gauge, the CBOE Volatility Index, rose 3.21 points to 19.83, its highest in nearly a month. The surge in oil prices revived inflation worries, pushing interest-rate-sensitive 2-year Treasury yields to a 17-month high as traders increased bets on a Federal Reserve rate hike as early as next week. Markets are now pricing in about a 36 percent chance of a 25-basis-point increase at the Fedâ€™s July meeting, up from 12 percent a week ago, according to CMEâ€™s FedWatch tool. The number of Americans seeking unemployment benefits for the first time fell sharply last week, leaving Fed officials to keep their focus on containing inflation. At 11:55 a.m. ET, the Dow Jones Industrial Average fell 534.25 points, or 1.02 percent, to 51,684.33, the S&P 500 lost 101.77 points, or 1.36 percent, to 7,397.19 and the Nasdaq Composite lost 620.61 points, or 2.42 percent, to 25,070.29. Chip stocks, which have recently hit a volatile patch, were also lower mostly. Texas Instruments fell 3.1 percent despite forecasting quarterly revenue above estimates. Defense giant Lockheed Martin rose 10.3 percent after lifting 2026 sales and profit forecasts. Thermo Fisher Scientific jumped 9.8 percent, as the medical equipment maker raised its annual profit forecast after beating estimates for second-quarter results. Declining issues outnumbered advancers by a 3.18-to-1 ratio on the NYSE and by a 3.16-to-1 ratio on the Nasdaq. The S&P 500 posted 17 new 52-week highs and 12 new lows, while the Nasdaq Composite recorded 35 new highs and 118 new lows.

Date: 2026-07-22

Details: Published July 22, 2026 Updated about 2 hours ago SHANGHAI: Chinese technology shares rose following a roller-coaster ride on Tuesday, helping lift key benchmark indexes as semiconductor stocks rebounded sharply from earlier losses. The benchmark Shanghai Composite index closed up 1.8 percent, while the blue-chip CSI 300 index jumped 3.1 percent. The tech-focused STAR50 index leapt 10.8 percent, after falling more than 3 percent in early deals, booking the biggest daily jump since October 18, 2024. The wild swing came after the index logged a more than 30 percent gain over the last three months, tracking its regional peers. Start-up board CHINEXT composite index gained 5.7 percent following early volatility. Semiconductor shares were the best-performing sector, with the CSI 300 sub-index surging 12.2 percent. â€œWe believe the tech sector and AI trades will remain the main investment themes in the second half of 2026, despite crowded tech trades unwinding somewhat,â€ said Lei Meng, China equity strategist at UBS Securities. The sector was expected to remain robust on the back of earnings growth due to rapid AI advances globally, and Chinaâ€™s strong policy support, Meng said. Chinaâ€™s securities regulator chief chaired a meeting with investors on Monday and vowed to make â€œall effortsâ€ to maintain stable market operations, after a rout over the past two weeks roiled the stock market. Chinaâ€™s five largest insurers, including China Life Insurance Co, pledged to support the capital market developments firmly and boosted their investments, the state-owned Securities Times reported. Hong Kong-listed tech shares ended 1.3 percent higher, while the benchmark Hang Seng index closed largely flat. Investors are shifting their attention to an upcoming meeting of the Communist Partyâ€™s Politburo, the countryâ€™s top decision-making body, expected around the end of July. Policymakers are expected to set the economic policy agenda for the second half of the year. â€œThe current setup resembles mid-2024 in some respects, before a major easing package, with slowing growth momentum, weaker consumption and investment, equity market underperformance, and local government financing strains leading to more aggressive tax collections,â€ said Hui Shan, chief China economist at Goldman Sachs. â€œWe expect the July Politburo meeting to deliver stronger easing rhetoric.â€

Date: 2026-07-22

Details: Published July 22, 2026 Updated about 2 hours ago BENGALURU: Taiwanese and South Kore an benchmarks snapped a days-long losing streak, while Thai shares hit a more-than-three-year high, as softer oil prices steadied sentiment ahead of key chip and AI-linked earnings. The MSCI EM Asia equities index rose nearly 3 percent, driven by gains in tech-heavy South Korea and Taiwan, which constitute about 60 percent of the index. The MSCI index has been swinging in recent days, tracking volatility in AI-linked stocks and the pressure on the regionâ€™s import-oil-dependent economies from a rise in crude prices following fresh strikes between the US and Iran. Seoulâ€™s benchmark KOSPI closed up 3.6 percent, snapping a two-session loss after having been closed on Friday for a local holiday. Meanwhile, shares in Taipei closed up 4.2 percent, the first rise in three sessions. SK Hynix, the worldâ€™s leading AI memory chipmaker, closed up 4.1 percent, while rival Samsung Electronics added 6.2 percent. â€œEvery name in the AI space is now being priced for near perfection, as if the current pace of growth is guaranteed to continue indefinitely,â€ said Zavier Wong, a market analyst at eToro, adding that even a hint of a temporary ceiling gets treated as bad news. Bangkok equities climbed as much as 0.7 percent, hitting their highest level since February 23, 2023 and logging a fifth consecutive session of gains, led by a 1.7 percent jump in Delta Electronics. Jakarta shares climbed as much as 1.5 percent, extending gains to a ninth straight session, while the rupiah firmed to 17,870 per dollar after weakening towards 18,000 earlier this week. The currency remains vulnerable to fresh external shocks, including any escalation in Middle East tensions. â€œThe shift in external conditions has arguably strengthened the case for a precautionary policy hike to anchor investor confidence,â€ DBS analysts wrote. Elsewhere, Manila stocks rose as much as 1.1 percent, while Singapore added around 0.6 percent. Currencies across emerging Asia were mostly tepid, with Taiwanâ€™s dollar weakening to as much as 32.431 per dollar in the session. South Koreaâ€™s won strengthened to 1,471.1 per dollar.

Date: 2026-07-22

Details: Published July 22, 2026 Updated about 2 hours ago FRANKFURT: European shares rose on Tuesday as gains in technology and mining shares took the focus away from fresh strikes in the Middle East, which pushed oil prices higher, while investors sifted through a fresh round of earnings reports. Brent crude jumped more than 2.5 percent after US forces bombed targets in the south and west of Iran overnight. The pan-European STOXX 600 index climbed 0.6 percent to 643.19 points at close, breaking a two-day losing streak. Technology stocks rose 2.1 percent, the most on the index, with ASMI and ASML, gaining 5.4 percent and 4.7 percent, respectively. Earnings from major technology companies such as Alphabet in the US will be on watch this week for clues on the sustainability of AI-related demand and whether their lofty valuations can be justified. â€œWe have seen these ebbs and flows in sentimentâ€¦ that highlights the sort of the nervousness that there is surrounding tech, particularly the AI and chip trade,â€ said Fiona Cincotta, senior market analyst at City Index. â€œBut if we do see another solid season, that could actually be a catalyst for the next leg higher in tech stocks.â€ Markets will also be on the lookout for earnings from major banks such as Banco Santander and BNP Paribas later in the week. â€œImproving returns on equity are not yet reflected in valuations for European banks, which still trade at close to a 30 percent discount to US peers,â€ said analysts at Lombard Odier Investment Managers. Miners climbed 1.7 percent, tracking higher copper and gold prices, although Swedish miner Boliden fell 5.7 percent, after a weaker-than-expected quarterly adjusted operating profit. On the flip side, the media sector was the biggest laggard, down 1.4 percent. Wienerberger shares fell 4.1 percent to their lowest since 2022, after the building materials maker issued a full-year profit warning, citing deterioration in new-build activity. Copyright Business Recorder, 2026

Date: 2026-07-22

Details: Published July 22, 2026 Updated about 2 hours ago NEW YORK: Wall Streetâ€™s main indexes rose on Tuesday, as a recovery in semiconductor shares helped shift the focus away from the latest developments in the Middle East, while investors awaited major tech earnings for clues on the future of the AI trade. Gains in recently battered semiconductor stocks lifted broader markets. The Philadelphia SE Semiconductor Index climbed 4.6 percent, rising for a second consecutive day. The index gained some ground after ending Friday more than 20 percent below its late-June record high, confirming a bear-market decline. The chip gauge also remains up nearly 72 percent year to date. SanDisk, Western Digital and Micron Technology were up between 8.3 percent and 10.8 percent. Chip stocks have recently come under heavy pressure as investors question whether this yearâ€™s powerful rally in the sector has gone too far and scrutinize the lack of tangible returns on hefty investments by hyperscalers. On the benchmark S&P 500, information technology led the gains with a 2 percent rise. â€œWe expect further volatility in semiconductors as overbought conditions reset, profit-taking pressure emerges, and crowded positioning gets worked out,â€ said Adam Turnquist, chief technical strategist at LPL Financial. â€œFundamentally, we donâ€™t think anything has really changed.â€ Meanwhile, two oil tankers carrying Saudi crude to Asia reversed course in the Red Sea after threats from Yemenâ€™s Iran-aligned Houthis, as a widening Middle East conflict disrupted shipping through two of the worldâ€™s most critical energy chokepoints. Brent crude futures jumped above USD90 a barrel, but signs that Tehran and Washington wanted to resume diplomacy helped limit price gains. A senior Iranian official told Reuters on Monday that Tehran had received a proposal from mediators for a 10-day ceasefire in efforts to salvage the interim deal. At 11:46 a.m. ET, the Dow Jones Industrial Average rose 358.11 points, or 0.69 percent, to 52,197.37, the S&P 500 gained 58.11 points, or 0.78 percent, to 7,501.39 and the Nasdaq Composite gained 316.86 points, or 1.24 percent, to 25,824.93. The gains came after three consecutive sessions of losses for the main indexes. Investor focus this week will turn to results from Alphabet and Intel, which could help determine whether the AI trade has further room to run amid elevated profit expectations. â€œItâ€™s not just about aggregate capEx numbers now. The next focus point is going to be return on investment and quality of spending, and we think that comes to the forefront in the second half,â€ Turnquist said. Adding to the uncertainty, President Donald Trump on Monday unveiled 50 percent tariffs on a wide range of imports from Canada.

Date: 2026-07-22

Details: Published July 22, 2026 Updated about 2 hours ago DUBAI: Most Gulf stock markets ended higher on Tuesday, as investors weighed reports of US-Iran mediation against fresh attacks and Houthi threats to impose a naval blockade on Saudi Arabia. A senior Iranian official said on Monday that Tehran had received a mediatorsâ€™ proposal for a 10-day ceasefire, aimed at creating a path toward a permanent agreement to end the war that started on February 28 following US-Israeli attacks on Iran. Dubaiâ€™s main share index rose 0.3 percent, with blue-chip developer Emaar Properties gaining 0.9 percent and toll operator Salik rising 1.6 percent. In Abu Dhabi, the index was up 0.4 percent. Tensions in the region continue to weigh on investor sentiment, with military operations and disruptions in the Strait of Hormuz driving concerns, said George Pavel, general manager at Naga.com Middle East. Saudi Arabiaâ€™s benchmark index fell 0.4 percent, hit by a 1.8 percent slide in Al Rajhi Bank, while Alinma Bank tumbled 4.4 percent, after posting lackluster second-quarter earnings and slashing its dividend. The Qatari index closed 0.2 percent higher, with Qatar Islamic Bank gaining 0.6 percent. Outside the Gulf, Egyptâ€™s blue-chip index advanced 1.6 percent. UTILITIES AND ENERGY STOCKS DRAG SRI LANKAN SHARES â€¢ CSE All-Share index settled down 0.29% at 21,145.73 Published July 21, 2026 Updated about 12 hours ago Sri Lankan shares closed lower for the third straight session on Tuesday, dragged by losses in utilities and energy stocks. The CSE All-Share index settled down 0.29% at 21,145.73 Paragon Ceylon PLC and Autodrome PLC were the top percentage losers on the CSE All-Share index, falling 13.2% and 9.4%, respectively. Trading volume on the index fell to 38.5 million shares from 66.5 million shares in the previous session. The equity marketâ€™s turnover rose to 3.28 billion Sri Lankan rupees ($9.8 million) from 2.64 billion rupees in the previous session, according to exchange data. Foreign investors were net buyers, purchasing stocks worth 142.5 million rupees, while domestic investors were net sellers, offloading shares worth 3.21 billion rupees, the data showed.

Date: 2026-07-22

Details: Published July 22, 2026 Updated about 2 hours ago KARACHI: The Korangi Association of Trade and Industry (KATI) has said that daily fuel price changes will create uncertainty instead of economic stability and make business planning impossible. He warned that small and medium-sized enterprises (SMEs) would face increased administrative and financial pressures, while the transport and logistics sectors would be among the hardest hit. He said freight charges for goods transport, container services, and the movement of raw materials and finished products would fluctuate daily, disrupting supply chains and eventually driving up the prices of essential commodities. He further cautioned that Pakistanâ€™s export sector could lose competitiveness because businesses would no longer be able to accurately estimate production costs while investor confidence could weaken, slowing the pace of new investment. He expressed serious reservations over the governmentâ€™s decision to revise petroleum product and energy prices on a daily basis, warning that the move would create uncertainty for industry, trade, transport, and consumers instead of strengthening economic stability. KATI President Muhammad Ikram Rajput said that daily fluctuations in petroleum prices would make effective business planning virtually impossible for industrialists, traders, and investors. He noted that manufacturing operations, procurement of raw materials, production schedules, supply chains, sales, and export commitments are all based on predetermined cost estimates, and frequent changes in fuel prices would make accurate cost forecasting extremely difficult. Rajput said the resulting uncertainty would disrupt production activities, weaken business confidence, and undermine industrial competitiveness. He also criticised the government for introducing the proposal without consulting the business and industrial community, warning that such a policy could have adverse consequences for the national economy. He argued that a daily fuel pricing mechanism may be suitable for developed economies with stronger purchasing power and greater resilience to inflationary pressures. However, he said, in a developing country like Pakistan where inflation and poverty are directly linked to fuel prices, the policy could place an additional burden on businesses and consumers alike. â€œEvery new fuel price would mean new production costs, revised transport fares, and fresh pricing of goods on a daily basis,â€ Rajput said. â€œIn such an uncertain environment, manufacturers will struggle to determine product prices, traders will find it difficult to manage inventories, and consumers will ultimately bear the cost through higher prices.â€ Rajput acknowledged that many countries adjust petroleum prices in line with global market trends but pointed out that they also adopt mechanisms designed to maintain market stability and avoid unnecessary uncertainty for businesses. He urged Prime Minister, the Federal Minister for Petroleum, and the Federal Minister for Energy to reconsider the proposal, stressing that Pakistanâ€™s economy requires policy consistency, stability, and predictability rather than daily uncertainty. â€œThe government should avoid decisions that increase business costs and fuel inflation,â€ he said, adding that any pricing mechanism should be introduced only after meaningful consultation with representatives of the industrial, commercial, and transport sectors to ensure it safeguards the interests of the economy, the business community, and the public alike. Copyright Business Recorder, 2026

Date: 2026-07-21

Details: Written by Faisal Shahnawaz in Taxation FBR updates Federal Excise Duty structure for first-class, business-class, and club-class air tickets under the amended Federal Excise Act, 2005. Pakistan has introduced revised Federal Excise Duty (FED) rates on air travel tickets for the fiscal year 2026-27, with the updated structure now formally incorporated into the Federal Excise Act, 2005, as amended up to June 30, 2026. The Federal Board of Revenue (FBR) issued a notification outlining the new duty rates applicable to club-class, business-class, and first-class air tickets issued on or after July 1, 2026. The revised rates are based on the destinationâ€™s classification under the International Air Transport Association (IATA) Traffic Conference Areas. According to the updated schedule, passengers traveling to destinations falling under IATA Traffic Conference Area 1â€”which includes North America, Central America, South America, and surrounding regionsâ€”will be required to pay a Federal Excise Duty of Rs50,000 per eligible ticket. The government has maintained a higher duty rate for these long-haul destinations due to their premium travel nature. For destinations covered under IATA Traffic Conference Area 2, the FED structure has been divided into two categories. Travelers heading to the Middle East and Africa will be charged a duty of Rs25,000 on club, business, and first-class tickets. Meanwhile, passengers flying to European destinations will be subject to a higher FED of Rs40,000 per ticket. The revised schedule also covers IATA Traffic Conference Area 3, which includes Far East countries, Australia, and New Zealand. Under the new framework, passengers purchasing premium-class tickets for these destinations will pay a Federal Excise Duty of Rs40,000. The changes are aimed at enhancing revenue collection from premium international air travel while ensuring alignment with the latest fiscal policies. Tax experts noted that the updated rates will primarily affect travelers opting for business, club, and first-class services on international routes. Airlines and travel operators have also been directed to implement the revised duty structure on all eligible tickets issued from July 1, 2026, onward. The FBR shared that the updated provisions are now part of the Federal Excise Act and will remain applicable unless revised through future budgetary measures or statutory notifications.

Date: 2026-07-21

Details: Written by Faisal Shahnawaz in Taxation Federal Excise Duty remains applicable on TV, cable TV, newspaper, billboard, and signboard advertisements under the updated Federal Excise Act. The Federal Board of Revenue (FBR) has officially notified the Federal Excise Duty (FED) rates applicable to various advertisement services for the fiscal year 2026-27, maintaining the taxation framework under the Federal Excise Act, 2005. According to the updated provisions of the Federal Excise Act, 2005, amended up to June 30, 2026, advertisements broadcast through television channels, cable TV networks, newspapers, periodicals, billboards, poles, signboards, and similar outdoor media platforms will continue to be subject to FED. The notification outlines a uniform duty structure across major advertising categories. Advertisements aired on closed-circuit television (TV) channels fall under heading/sub-heading number 9802.3000 and are subject to a Federal Excise Duty at the rate of 16 percent of the charges collected for such services. Similarly, advertisements transmitted through cable TV networks, classified under heading number 9802.5000, will also attract a 16 percent FED on the total charges. The tax applies to advertising services provided through cable operators and related broadcasting platforms. The FBR has also retained the same duty rate for advertisements published in newspapers and periodicals. These advertisements, excluding classified advertisements, are categorized under heading numbers 9802.4000 and 9802.9000. Outdoor advertising media, including hoarding boards, poles, signs, and signboards, are covered under the same provisions and remain liable to a 16 percent Federal Excise Duty. Tax experts believe the continuation of the existing FED structure provides clarity for media houses, advertising agencies, broadcasters, and businesses planning promotional campaigns during the fiscal year. The standardized duty rate across multiple advertising channels is expected to simplify compliance and tax calculations for stakeholders operating in the advertising industry. The latest notification confirms that no major changes have been introduced to the Federal Excise Duty rates on advertisement services for FY2026-27. Businesses utilizing television, print, cable, and outdoor advertising platforms will continue to pay FED at the prescribed rate of 16 percent of the charges, in accordance with the Federal Excise Act, 2005.

Date: 2026-07-21

Details: Written by Hamza Shahnawaz in Taxation Amended law introduces virtual audit proceedings, voluntary tax settlement incentives and stronger enforcement powers ISLAMABAD: The Federal Board of Revenue (FBR) has expanded its authority to conduct electronic audits and strengthen enforcement against federal excise duty evasion under the updated Federal Excise Act, 2005, amended up to June 30, 2026. The revised legislation authorises Inland Revenue officers to audit registered persons after issuing advance written notice, while also allowing the Commissioner to initiate audits at any time during the year if there is credible information or evidence suggesting fraud or evasion of federal excise duty. FBR authorised to conduct electronic audits A key amendment empowers the Commissioner to conduct electronic audit proceedings through video links or any other digital facility prescribed by the FBR. Following the completion of an audit, the Inland Revenue officer must obtain the taxpayerâ€™s explanation for all audit observations before issuing a formal audit report containing the findings. Where necessary, the officer may subsequently determine the amount of federal excise duty payable, along with any applicable default surcharge, penalties and recovery of refunds that were wrongly claimed or issued, after providing the taxpayer with an opportunity to present their case. Incentives for voluntary tax compliance The updated law also introduces relief measures for taxpayers who voluntarily disclose unpaid or short-paid federal excise duty. Under the revised provisions: Before an audit begins: Taxpayers who voluntarily pay the outstanding duty along with the applicable default surcharge will not face any penalty. During or after an audit but before a show-cause notice: Taxpayers may settle their liability by paying the outstanding duty, default surcharge and 25% of the prescribed penalty. After a show-cause notice is issued: The liability can be settled by paying the outstanding duty, default surcharge and 50% of the prescribed penalty, after which further proceedings will be discontinued. The amendments are intended to encourage voluntary compliance while reducing lengthy litigation. Commissioner empowered to order re-audits The amended Federal Excise Act also authorises the Commissioner, with prior approval of the Chief Commissioner, to require a registered person to undergo a re-audit of accounts or a revaluation of inventory where additional scrutiny is considered necessary. Such directions may be issued where authorities believe: The accounts are unusually complex. The volume of transactions is exceptionally high. There are doubts regarding the accuracy of financial records. The business involves specialised operations. The interests of revenue require further examination. In such cases, taxpayers may be directed to obtain: A re-audit conducted by a qualified accountant. An inventory revaluation carried out by a qualified cost accountant. The reports must address specific issues raised by Inland Revenue authorities and be duly signed and verified by the appointed professionals. Strengthening digital tax administration The latest amendments form part of the FBRâ€™s broader efforts to modernise tax administration through digital procedures, improve audit transparency and strengthen enforcement under the Federal Excise Act. Officials expect the introduction of FBR electronic audits, combined with incentives for voluntary compliance and enhanced audit powers, to improve revenue collection, reduce tax evasion and make the audit process more efficient for both taxpayers and tax authorities.

Date: 2026-07-21

Details: Published July 21, 2026 Updated about 3 hours ago SHANGHAI: China stocks rose on Monday, following a tumble in the week prior, as signs of state support lifted sentiment in the so-called traditional sectors, while richly valued tech shares and small-caps continued to slide. The large-cap CSI300 Index gained 1.5 percent, while the Shanghai Composite Index advanced 0.9 percent. Both indexes slumped more than 5 percent last week, part of a global selloff that saw renewed conflict in the Middle East hit sentiment and chip shares plunge. Meanwhile, Chinese investors rushed to unwind leveraged bets, slashing outstanding margin loans by more than 160 billion yuan (USD23.65 billion) last week. In Hong Kong, the Hang Seng Index climbed 2.4 percent. Chinaâ€™s top securities regulator Wu Qing chaired a meeting with investors in Beijing on Monday, vowing to make â€œall effortsâ€ to maintain market stability. In another signal of Beijingâ€™s intention to stem the recent market rout, two state-owned firms said over the weekend they had spent roughly 60 billion yuan (USD8.86 billion) recently buying stocks. In addition, a slew of listed state firms, including Aluminum Corp of China, CRRC Corp and SDIC Power said their state parents plan to increase share holdings to help bolster investor confidence. Sectors such as consumer, property and utility that have lagged far behind tech shares this year supported the rebound. Investors took advantage of an early rebound to cut positions in tech shares amid growing concerns over their stretched valuations. The tech-focused STAR Composite Index fell 2.3 percent to a near three-month low by the close. Smaller STAR-listed companies slumped more than 6 percent. An index tracking chip-making material and equipment companies plunged 7 percent, recording a seven-day losing streak. â€œAny extremely overcrowded sectors face huge volatility risks,â€ said Wang Zhuo, partner at Shanghai Zhuozhu Investment, referring to Chinaâ€™s AI and chip stocks. When their uptrend loses steam, â€œmoney will definitely hunt for assets able to offer earnings certainty and stable cash flows.â€ Institutional demand for chipmaker CXMT Corpâ€™s USD8.6 billion IPO was less feverish than in Chinaâ€™s previous initial public offerings this year. In Hong Kong, biotech, energy and consumer stocks led the gains.

Date: 2026-07-21

Details: Published July 21, 2026 Updated about 3 hours ago NEW YORK: The S&P 500 and the Nasdaq rose on Monday as chip stocks recovered from last weekâ€™s sharp selloff, while investors looked ahead to earnings from major technology companies that have driven Wall Streetâ€™s AI-fueled rally. Alphabet added to the gains, rising 2.9 percent after a report said its Google unit is developing a Gemini-integrated server chip aimed at improving AI efficiency and easing computing-capacity constraints. The second-quarter earnings season will pick up pace this week, with results due from Alphabet, Tesla, Intel and IBM. Investors will focus closely on Intel and Texas Instruments for any encouraging signs after a recent slide in semiconductor shares. A surge in AI capital spending by hyperscalers has been a major driver behind this yearâ€™s market gains, lifting chip stocks and other companies that are seen as the beneficiaries of the buildout, and helping Wall Street climb to record levels. But last weekâ€™s selloff raised concerns that valuations had run too far, too fast. The Philadelphia SE Semiconductor Index ended Friday more than 20 percent below its late-June record high, confirming a bear-market decline. The gauge was up 1.9 percent on Monday. â€œOur expectation is that earnings will continue to be good. Itâ€™s just a little bit harder to tell if they will be better than expected because thereâ€™s such a high bar at this point,â€ said Chris Zaccarelli, chief investment officer for Northlight Asset Management. Markets are expecting S&P 500 earnings growth of 26 percent for the second quarter, year-on-year, up from an earlier estimate of 23.7 percent, according to data compiled by LSEG. At 11:49 a.m. ET, the Dow Jones Industrial Average fell 123.88 points, or 0.24 percent, to 52,022.54, the S&P 500 gained 20.88 points, or 0.28 percent, to 7,478.57 and the Nasdaq Composite gained 147.22 points, or 0.58 percent, to 25,667.46. Memory chipmakers were leading the gains among semiconductor stocks. Micron Technology and SanDisk were up 4.8 percent and 6 percent, respectively.

Date: 2026-07-21

Details: Published July 21, 2026 Updated about 2 hours ago KARACHI: Business and industrial community has urged the Prime Minister Shehbaz Sharif and Minister for Petroleum Ali Pervaiz Malik to withdraw the governmentâ€™s decision to introduce daily pricing of petroleum products, warning that the policy could prove disastrous for industry, trade and the broader economy. They said that fuel pricing mechanisms were to be formulated through broad based consultation with all the stakeholders. Expressing serious reservations over the governmentâ€™s decision to introduce daily pricing of petroleum products, SITE Association of Industry President Abdul Rehman Fudda urged Prime Minister Shehbaz Sharif to immediately review and withdraw the policy, warning that it could trigger a fresh crisis for Pakistanâ€™s industrial and export sectors. He said the countryâ€™s manufacturing sector was already under immense pressure due to high electricity and gas tariffs, excessive taxation and steadily rising production costs. Introducing daily revisions in petroleum prices, he said, would further deepen uncertainty for businesses, making long-term planning and cost management increasingly difficult. â€œThe two biggest challenges confronting Pakistanâ€™s industrial sector are expensive energy and policy uncertainty,â€ he said. â€œIf manufacturers wake up every morning unsure of fuel prices and production costs, they cannot effectively price their products, manage inventories or make investment decisions.â€ SAI chief noted that export-oriented industries were particularly vulnerable because export contracts were typically finalized several months before delivery. Continuous fluctuations in fuel prices during the production cycle, he said, would significantly increase manufacturing and logistics costs, making it difficult for Pakistani exporters to remain competitive in international markets. He said domestic manufacturers also faced practical constraints, as they could not revise product prices on a daily basis to absorb rising input costs. Appealing directly to Prime Minister Shehbaz Sharif, Fudda proposed that petroleum prices should be fixed at least on a monthly basis to provide businesses with a predictable operating environment. If international oil price volatility created fiscal pressure, he suggested that the government temporarily adjust the petroleum levy rather than passing daily price fluctuations on to industry. He expressed hope that the prime minister and relevant policymakers would take the concerns of the business community seriously and adopt a stable and predictable pricing mechanism to protect industrial activity, safeguard exports and preserve employment. The Salt Manufacturers Association of Pakistan (SMAP) has appealed to Prime Minister Shehbaz Sharif to immediately reconsider the governmentâ€™s decision to introduce daily pricing of petroleum products, warning that the policy could prove disastrous for industry, trade and the broader economy. SMAP founder Chairman Ismail Suttar said the manufacturing sector was already struggling under the burden of high electricity and gas tariffs, elevated taxation and rising operational costs. Introducing daily fluctuations in petroleum prices, he cautioned, would further escalate production costs, disrupt business planning and make it increasingly difficult for industries to remain operational. â€œThe industrial sector is already operating under severe financial pressure. If fuel prices continue to change every day, production costs will become unpredictable, business confidence will erode and many industries may find it impossible to continue operations,â€ he said. Ismail Suttar urged Prime Minister Shehbaz Sharif to withdraw the decision, arguing that while the government frequently spoke of promoting industrial growth and investment, policies that created uncertainty for businesses undermined those objectives. He maintained that a thriving industrial sector was essential for economic stability and government revenue generation. â€œIf industries are forced to shut down due to unsustainable costs, the governmentâ€™s own tax revenues will suffer. Sustainable economic growth can only be achieved when businesses are allowed to operate in a stable and predictable environment,â€ he added. Expressing concern over the wider economic implications, Suttar said daily revisions in petroleum prices would not only increase costs for manufacturers but would also trigger another wave of inflation, placing an additional burden on consumers who were already struggling with the rising cost of living. Referring specifically to the salt industry, he noted that salt was a low-value but high-volume commodity, making transportation costs a significant component of its overall price. Daily fluctuations in fuel prices, he said, would create uncertainty in freight charges, disrupt supply chain planning and make it extremely difficult for manufacturers and traders to determine competitive market prices. Appealing directly to the prime minister, Ismail Suttar proposed that the government adopted a weekly petroleum pricing mechanism instead of a daily one. He also urged the government not to implement the new system without prior consultation with industry representatives, trade bodies and other stakeholders. â€œAny policy that has far-reaching consequences for businesses and the national economy should be formulated through meaningful consultation. A predictable pricing framework will help protect industry, safeguard employment and support sustainable economic growth,â€ he said. President of the Pakistan Businessmen and Intellectuals Forum and All Karachi Industrial Alliance as well as Chairman ofthe National Business Group,Mian Zahid Hussain has said that shifting petroleum prices from weekly to daily determination is an important economic reform, but it should not be implemented without complete transparency, a clearly defined mechanism and meaningful consultation with oil marketing companies and petrol-pump owners. He said that according to the government, daily price determination would reduce political intervention, limit opportunities for extraordinary profits and allow changes in international oil markets to be reflected more quickly in domestic prices. OGRA has indicated that it will publish daily price data, while the new system is also expected to cover the Inland Freight Equalization Margin, refinery adjustments, stock management and a mechanism for subsequently adjusting price differences. Mian Zahid Hussain said that the proposed measures and rules must be finalised before full implementation because petroleum prices directly affected transport, agriculture, industry and household expenditure. The latest increase demonstrated the risks associated with the new system. From July 18, the price of petrol increased by Rs5.44 per litre to Rs316.15, while high-speed diesel rose by Rs31.05 to Rs354.35 per litre. He said diesel was widely used in trucks, public transport, tractors, harvesting machinery, construction equipment and electricity-generating units. Therefore, an increase of more than Rs31 per litrewould immediately raise freight charges, food-distribution costs, agricultural expenditure and industrial production costs. Mian Zahid Hussain said that the Sensitive Price Indicator had already increased by 1.40 percent during the week ending July 16 and reached 357.61. Since the latest diesel-price increase took effect after that reporting period, its full impact might become visible in the coming weeks through higher transport fares and increases in the prices of vegetables, flour, construction material and other essential goods. He said that the Oil Companies Advisory Council had described daily pricing as an important step towards deregulation, competition and market-based price determination. However, oil marketing companies, refineries and industry representatives had also raised serious concerns regarding supply-chain operations, timely availability of data, valuation of existing stocks and the sale of fuel purchased at one price after a new price became effective. Rapid changes in prices might create major transparency and reconciliation issues if those matters were not resolved in advance. Mian Zahid Hussain said that petrol-pump owners had strongly opposed the policy in its present form, warning the government of nationwide protests and a possible strike. They maintained that daily price revisions could cause losses on existing stocks, disrupt oil-tanker movements and create administrative complications at approximately 15,000 retail outlets. He said that the credibility of the daily pricing system would depend on whether every change in international oil prices was passed on to consumers promptly in exact consequence. Increases must not be transferred immediately while reductions were delayed. OGRA should publish a complete daily price calculation online showing the international benchmark, exchange rate, import premium, ex-refinery price, freight margin, petroleum levy, carbon levy, OMC margin and dealer commission. Mian Zahid Hussain proposed the establishment of a broad-based committee comprising the government, OGRA, State Bank, economic experts, FPCCI, relevant stakeholders and consumers to oversee the daily pricing framework. He further said that a uniform implementation time across the country and a transparent mechanism for adjusting differences in the value of existing stocks were essential. Daily pricing might improve transparency, but it must not become a source of daily uncertainty for businesses and consumers. The government should implement the system only after securing stakeholder consensus, ensuring uninterrupted supplies and guaranteeing that every reduction in international prices was passed on to consumers with the same speed as an increase. Copyright Business Recorder, 2026

Date: 2026-07-21

Details: Published July 21, 2026 Updated about 2 hours ago LAHORE: Lahore Chamber of Commerce and Industry President Faheem-ur-Rehman Saigol has urged the government to ensure that any fuel conservation or austerity measures being considered in response to rising international oil prices and foreign exchange pressures should not adversely affect business, trade and industrial activity. Commenting on reports that the government is weighing the reintroduction of fuel-saving and austerity measures, the LCCI President said that while the business community fully understands the need for prudent resource management during challenging economic circumstances, measures that restrict commercial operations could have serious consequences for economic growth, employment and revenue generation. According to him, the business community is still adjusting to the reduced business hours that remain in place in many sectors. Further reductions in market and business operating hours would negatively impact trade volumes, retail activity, supply chains and industrial productivity at a time when the economy requires greater momentum rather than additional constraints, Faheem observed. He said previous restrictions on business timings had resulted in lower customer footfall, disruptions in commercial transactions and increased operational difficulties for traders and industrialists. Any further curtailment of business hours could undermine efforts to stimulate economic activity, reduce tax collection and weaken the confidence of investors and entrepreneurs. Faheem said alternative conservation measures that do not disrupt productive economic activity should be given priority. Greater emphasis can be placed on energy efficiency, digitization of government operations, reduction in non-development expenditures and improved public sector resource management instead of imposing additional restrictions on businesses. He further observed that Pakistanâ€™s economic recovery remains fragile and requires sustained support for trade, industry and exports. Policies that inadvertently reduce business activity could slow economic growth, affect employment opportunities and diminish the competitiveness of Pakistani enterprises. â€œThe business community stands ready to cooperate with the government in addressing national economic challenges, but austerity measures must not come at the cost of trade, industry and economic growth.â€ Protecting business activity is essential for sustaining jobs, investment, exports and government revenues,â€ Faheem concluded. Copyright Business Recorder, 2026

Date: 2026-07-21

Details: Published July 21, 2026 Updated about 2 hours ago PESHAWAR: Sarhad Chamber of Commerce and Industry and United Business Group (UBG) fully backed the stance and reservations of business community belonging from erstwhile of the Federally Administered Tribal Area (FATA) and Provincial Administered Tribal Area (PATA) regarding the imposition of taxes and called upon the government to revisit its decision while keeping the prevailing scenario in the region. The UBG meeting was held with senior office bearers and members of all chambers of commerce and industry of Khyber Pakhtunkhwa at the Sarhad Chamber of Commerce and Industry here. Besides, Patron in Chief UBG S.M Tanveer, Secretary General UBG Zafar Bakhtawari FPCCI President Atif Ikram Sheikh, UBG leader and former president FPCCI Ghazanfar Bilour, UBG Provincial General Secretary Haji Muhammad Afzal, President SCCI Junaid Altaf, chambers office bearers and others were present during the meeting. The meeting thoroughly deliberated on key-challenges being faced by the business community and took a firm stance against the imposition of taxes on the ex-Fata and PATA region. The UBG leaders highlighted the borderâ€™s closure issues, stating that business and industry have completely closed down since the closure of the Torkham Border. They called the Torkham border as a lifeline for the business community of KP, urging them to reconsider the decision in the best interest of economic, trade and industry. UGB leaders assured the government to support economic growth. They, however, called for making proper consultation before framing economic policies to make them business-investment friendly. In his opening remarks, President SCCI underlined several issues of the business community of Khyber Pakhtunkhwa, especially imposition of taxes on ex-FATA and PATA region. He stressed unity and close coordination/liaison to jointly address the increasing challenges being faced by the business community. S.M Tanveer, Patron in chief during his keynote speech shed light on the growing economic challenges and stressed long-term economic reforms rather than short-term measures. He called for a comprehensive and effective strategy that is urgently needed to cope with the issues being faced by the business community. Zafar Bakhtawari emphasized the need for collective efforts to stabilize Pakistanâ€™s economy and promote local industries. FPCCI President Atif Ikram Sheikh assured the business community that their voices are being raised at every administrative level to find sustainable, long term solutions. He emphasized that Khyber Pakhtunkhwa is a province rich in natural resources. With the right infrastructure, better facilities, and proper government attention, it has the potential to transform into a highly sustainable economy, he remarked. However, he pointed out that security challenges have dealt a severe blow to the provinceâ€™s industrial sector. He strongly urged the government to compensate for these hardships by ensuring significant tax relief for local businesses. Other prominent leaders, including Ghazanfar Bilour, Haji Muhammad Afzal and Junaid Altaf also addressed the gathering, reiterating the need for collective action to revive the provincial economy. Copyright Business Recorder, 2026

Date: 2026-07-21

Details: â€¢ Brent crude futures eased 35 cents, or 0.4%, to $88.87 per barrel Published July 21, 2026 Updated about an hour ago Oil prices softened on Tuesday, with markets weighing reports of mediation efforts between the US and Iran against an exchange of fresh attacks between the two and threats of a naval blockade of Saudi Arabia by Yemenâ€™s Houthis. Brent crude futures eased 35 cents, or 0.4%, to $88.87 per barrel by 0052 GMT, while US West Texas Intermediate crude for September delivery was steady at $82.47 a barrel. Both contracts were trading below their highest levels in more than a month hit in â the previous session. Yemenâ€™s Iran-aligned Houthis said on Monday they would impose a naval blockade on Saudi Arabia, opening a potential new front against the U.S. in its war on Iran and raising the threat to global energy supplies and trade beyond the Gulf. â€œThe threats of a naval blockade on Saudi Arabia by the Houthis are significant because they raise the risk of disruption to another major oil exporter,â€ said Tim Waterer, chief market analyst at KCM Trade. Separately, a senior Iranian official told Reuters that Tehran had received a proposal from mediators for a 10-day ceasefire in efforts â to salvage an interim deal signed on June 17, intended to pave the way for a lasting agreement to end the war that began on February 28 with US-Israeli attacks on Iran. The diplomatic push followed another night of U.S. strikes on Iranian cities and attacks by Iranâ€™s Revolutionary Guards on U.S. military â assets across the region. Later on Monday, US Central Command said it had begun another round of strikes on Iran. â€œ(Oil) has come a long way already and it certainly has the potential to go higher again. However, â in the short term the overnight talk of de-escalation and peace talks appears to be capping the upside for the time being. Whether anything comes from those peace talks remains to â be seen,â€ IG market analyst Tony Sycamore said in a note. US crude oil stockpiles were expected to have fallen last week alongside gasoline, while distillate stocks likely rose, a preliminary Reuters poll showed on Monday.

Date: 2026-07-20

Details: Published July 20, 2026 Updated about 2 hours ago ISLAMABAD: The Public Interest Litigation Committee (PILC) of the Lahore Tax Bar Association (LTBA) has formally flagged a tax matter on tribunal proceedings that strikes at the root of public confidence in the appellate taxation system of Pakistan. In a communication addressed to the Chairman of the Appellate Tribunal Inland Revenue (ATIR) and marked in advance copy to the Prime Ministerâ€™s Performance Delivery Unit, the Federal Minister for Law and Justice, and the Secretary, Law and Justice Division, the Committee has requested an urgent and independent investigation into the conduct of proceedings before Appellate Tribunal, Islamabad. The representation, moved by Chairman of the LTBA-PILC, is founded on a written complaint received from Muhammad Zulqarnain Awan, Advocate dated 13 July 2026. An order rejecting the condonation application, though dated 19.05.2026 on its face, is alleged to have actually been issued on 24.06.2026, over a month later, without any explanation for the delay. Despite the condonation application having purportedly been rejected on 19.05.2026, the main appeal was nonetheless fixed and heard on 03.06.2026, a sequence the complainant describes as irreconcilable with an innocent reading of the record, the applicant alleged. The ATIR order sheet dated 19.05.2026, as available with the applicant, is stated to be missing the signature of one of the Members of the Bench, notwithstanding representations that the file was still lying in the issuance branch as late as 23.06.2026. The LTBA-PILC has been careful to note that these remain, at this stage, allegations and that no finding of guilt against any individual Member of the Bench is intended or implied. The Committee has explicitly stated that such a determination is properly reserved for a competent and independent inquiry. Nevertheless, it has termed the allegations â€œgrave,â€ warning that if true even in part, they would strike at the integrity of the judicial record of an appellate forum entrusted with tax adjudication in Pakistan. LTBA-PILC has requested the Chairman, ATIR, to cause a detailed and independent investigation, on a priority basis, into the circumstances surrounding the alleged backdating, delayed issuance, and unsigned status of the order sheet dated 19.05.2026, along with the related contradictions in the record. It has further requested that the outcome of the investigation be shared with the Committee for its information and record. Copyright Business Recorder, 2026

Date: 2026-07-20

Details: Written by Hamza Shahnawaz in Budget 2026-27, Taxation Punjab Finance Act, 2026 increases the concessionary sales tax rate for consultants and rent-a-car services from 5% to 8% without input tax adjustment. LAHORE: The Punjab government has increased the concessionary sales tax rate on consultancy services to 8 per cent under the Punjab Finance Act, 2026, raising the rate from 5 per cent for the fiscal year 2026-27. The revised rate applies to specified professional services provided without the facility of input tax adjustment and forms part of the provincial governmentâ€™s revenue measures for the new financial year. Consultancy services taxed at 8% Under the amended law, an 8 per cent sales tax will apply, without input tax adjustment, to services relating to accountancy, auditing, taxation and corporate law consultancy. The revised rate covers services provided by: â€¢ Accountants, including practising chartered accountants and cost accountants; â€¢ Auditors; â€¢ Actuaries; â€¢ Tax consultants, by whatever name called; â€¢ Practising company secretaries; â€¢ Receivers; â€¢ Liquidators; â€¢ Auctioneers; and â€¢ Corporate law consultants. The concessionary rate is available on the condition that input tax adjustment is not claimed. Previously, these professional services were subject to a 5 per cent sales tax under the same conditions. Higher tax on rent-a-car services The Punjab Finance Act, 2026 has also increased the concessionary sales tax rate on rent-a-car services, including the rental of all categories of vehicles used for the transportation of persons. The applicable rate has been raised from 5 per cent to 8 per cent, provided the services are supplied to end consumers and the service provider does not claim input tax adjustment. Revenue and compliance objectives The increase in concessionary tax rates forms part of the Punjab governmentâ€™s broader fiscal strategy to enhance provincial revenue while maintaining simplified taxation regimes for selected service sectors. Tax experts said the revised rates will increase the tax burden on consultants and vehicle rental businesses operating under the concessionary regime. However, they noted that businesses may continue to benefit from simplified compliance by opting for the reduced-rate structure without claiming input tax credits. They advised service providers to review their invoicing systems, pricing policies and tax compliance procedures to ensure the correct application of the new rates from the start of FY2026-27.

Date: 2026-07-20

Details: Written by Hamza Shahnawaz in Budget 2026-27, Taxation Punjab Finance Act, 2026 increases the reduced sales tax rate from 5% to 8% for digitally paid hotel and restaurant services without input tax adjustment. LAHORE: The Punjab government has increased the concessionary sales tax rate on services provided by hotels and restaurants from 5 per cent to 8 per cent under the Punjab Finance Act, 2026, with the revised rate taking effect during the fiscal year 2026-27. The increase forms part of the provincial governmentâ€™s fiscal measures aimed at enhancing revenue collection while continuing to encourage digital payments in the hospitality sector. Hotels and guest houses Under the amended law, a concessionary sales tax rate of 8 per cent will apply to services provided by hotels, motels and guest houses, provided that payment for the services is received through debit cards, credit cards, mobile wallets or QR code payments. Businesses opting for the concessionary rate will not be entitled to adjust input tax. Previously, a reduced rate of 5 per cent was available without input tax adjustment for non-corporate, non-franchise and non-chain businesses operating establishments with fewer than 20 rooms. Restaurants and cafÃ©s The Finance Act, 2026 also revises the concessionary tax rate for services provided by restaurants, cafÃ©s, food parlours, ice cream parlours, coffee houses, coffee shops, dhabas, food huts, eateries, resorts and similar outlets serving cooked or ready-to-eat food. These businesses will now be subject to an 8 per cent sales tax rate, subject to the condition that payment is received through debit cards, credit cards, mobile wallets or QR scanning. As with hotels, businesses availing themselves of the concessionary rate will not be permitted to claim input tax adjustment. The previous concessionary rate of 5 per cent applied under similar conditions. Focus on digital payments Tax experts said the revised tax structure reflects the Punjab governmentâ€™s continued emphasis on promoting digital payment channels while increasing provincial revenue. They noted that businesses accepting electronic payments can still benefit from the concessionary tax rate, although the increase from 5 per cent to 8 per cent will raise the tax burden for service providers operating under the reduced-rate regime. The experts added that hotels and restaurants should review their pricing strategies and tax compliance procedures to ensure they correctly apply the revised rate and comply with the conditions governing eligibility for the concessionary regime.

Date: 2026-07-20

Details: Written by Hamza Shahnawaz in Budget 2026-27, Taxation Finance Act, 2026 expands the list of exempt goods and imports, including sanitary products, contraceptives, selected vessels and bulletproof vehicles. ISLAMABAD: The Federal Board of Revenue (FBR) has introduced a range of new sales tax exemptions for FY2026-27 through amendments made to Table I of the Sixth Schedule to the Sales Tax Act, 1990 under the Finance Act, 2026. According to FBR officials, the new exemptions are intended to provide relief for selected essential goods and strategic imports while supporting specific government initiatives. New sales tax exemptions The Finance Act, 2026 grants sales tax exemptions on the following goods and imports: â€¢ Wheat bran and rice bran. â€¢ Contraceptives. â€¢ Female sanitary pads and tampons. â€¢ Import or lease of aircraft and aircraft parts by any airline company registered in Pakistan. This exemption will become effective from July 1, 2027. â€¢ Import of tankers, dredgers, floating or submersible drilling or production platforms, floating structures and vessels, and other vessels for the transportation of goods, excluding cruise ships, excursion boats and similar vessels principally designed for the transport of passengers. The exemption will apply only to quantities approved by the Ministry of Maritime Affairs. â€¢ Import of bulletproof vehicles by the federal government for logistical arrangements relating to the Shanghai Cooperation Organisation (SCO) Summit, subject to prior approval from the Ministry of Foreign Affairs and the Ministry of Interior and Narcotics Control. â€¢ Import of bulletproof vehicles by the federal or provincial governments where a public office-holder faces a terrorism-related threat, as determined by the Ministry of Interior and Narcotics Control and approved by the federal government. Relief for essential goods and strategic sectors Officials said the exemptions covering wheat bran, rice bran, contraceptives and female sanitary products are aimed at reducing the tax burden on essential commodities. The exemption for aircraft imports and leases is expected to support Pakistanâ€™s aviation sector, while the relief for specialised maritime vessels is intended to facilitate shipping, dredging and port development activities. Meanwhile, the exemption for bulletproof vehicles has been introduced to facilitate security arrangements for international events and to meet official security requirements where credible terrorism threats exist. Tax experts said the new exemptions reflect the governmentâ€™s policy of providing targeted tax relief for essential goods and strategically important sectors while balancing broader revenue objectives under the Finance Act, 2026. They added that businesses intending to benefit from these exemptions should ensure compliance with the prescribed approval and documentation requirements set out in the amended law.

Date: 2026-07-20

Details: Written by Hamza Shahnawaz in Taxation, Top stories Reduced tax rate takes effect from January 1, 2026, while tax rates for small companies and other corporate entities remain unchanged. ISLAMABAD: Pakistan has reduced the corporate tax rate for banks to 42 percent for the tax year corresponding to FY2026-27, effective from January 1, 2026, according to sources within the Federal Board of Revenue (FBR). The revised rate represents a one percentage point reduction from the 43 percent corporate tax rate applicable in the previous year. Banks in Pakistan follow a calendar-year financial cycle, with their financial year commencing on January 1 and ending on December 31. The reduction forms part of the governmentâ€™s corporate tax framework for FY2026-27. Corporate tax rates remain unchanged for other companies Under the prevailing tax structure, the corporate tax rate for small companies will remain at 20 percent, while all other companies will continue to be taxed at 29 percent during FY2026-27. The revised rate applies exclusively to banking companies, which have historically been subject to higher corporate taxation than other sectors. Industry expects stronger profitability Tax and financial experts believe the reduction in the corporate tax rate will strengthen the financial position of banks by improving after-tax profitability and supporting capital accumulation. They noted that higher retained earnings could enhance banksâ€™ balance sheets, improve lending capacity and strengthen their resilience against economic shocks. However, experts also pointed out that Pakistanâ€™s corporate tax rate for banks remains comparatively high by regional standards. They argued that a gradual reduction in corporate tax rates across the corporate sector could improve Pakistanâ€™s competitiveness, encourage greater corporatisation of businesses and attract higher levels of domestic and foreign investment. Economists added that a more competitive corporate tax regime, combined with broader tax reforms and policy stability, would help create a more favourable investment climate while supporting long-term economic growth.

Date: 2026-07-20

Details: â€¢ GIFT Nifty futures GIFc1 were trading at 24,297.5 Published July 20, 2026 Updated 31 minutes ago Indian shares are expected to open slightly lower on Monday as rising oil prices, driven by escalating conflict in the Middle East, offset better-than-expected earnings from heavyweights Reliance Industries and ICICI Bank. GIFT Nifty futures GIFc1 were trading at 24,297.5 as of 7:59 a.m. IST, indicating the Nifty 50 could open slightly below Fridayâ€™s close of 24,334.3. US forces struck Iran for a ninth consecutive day as the number of confirmed American military deaths in the renewed â fighting rose to three and concerns grew over shipping through the Strait of Hormuz. Brent crude futures jumped 2.5% to top $90 per barrel for the first time in over a month, adding to concerns for import-dependent economies such as India. At home, the focus will be on earnings after Indiaâ€™s top four private banks and oil-to-telecom conglomerate Reliance Industries reported their quarterly results after market hours on Friday and over the weekend. Billionaire Mukesh Ambaniâ€™s Reliance â Industries beat market expectations for first-quarter net profit, driven by strong performances across its oil-to-chemicals, retail and telecom businesses. Indiaâ€™s second-largest private lender, ICICI Bank, reported higher-than-expected earnings for the June quarter, driven by stronger loan demand and lower provisions for â bad loans. Kotak Mahindra Bank and Axis Bank also reported better-than-expected results, while Indiaâ€™s largest private lender HDFC Bankâ€™s earnings met analystsâ€™ expectations. Jefferies said ICICI Bank surprised positively, â followed by Kotak Bank and Axis Bank, while HDFC Bankâ€™s earnings were relatively weaker. Indiaâ€™s benchmark Nifty 50 and BSE Sensex rose 0.5% and â 0.8%, respectively, last week, led by IT stocks on better-than-expected earnings, while heavyweights HDFC Bank, ICICI Bank and Reliance Industries rose 1.4% to 2.4% on Friday.

Date: 2026-07-20

Details: â€¢ MSCIâ€™s broadest index of Asia-Pacific shares outside Japan dipped 0.3% Published July 20, 2026 Updated 43 minutes ago SYDNEY: Asian share markets slipped on Monday as the escalating conflict in the Gulf lifted oil prices and fanned fears of inflation, while a packed week of major tech earnings will further test investor faith in the AI trade. Brent crude climbed above $90 a barrel for the first time in more than a month as the US military started a ninth straight day of attacks against Iran, which in turn struck targets across the region. Just a handful of ships transited the Strait of Hormuz on Sunday and one was reported to be on fire. â€œThe longer the Strait remains closed and the war escalates the greater the risk that oil prices will have to rise to around $150/barrel to bring demand down to match the hit to supply,â€ said Shane Oliver, head of investment strategy at fund manager AMP. â€œThis is not our base case but itâ€™s a high risk again.â€ Brent duly added â 2.6% to $90.40 a barrel, while U.S. crude rose 2.3% to $84.39. The jump in fuel costs has revived worries about inflation even as U.S. consumer price data surprised on the downside last week, leading futures markets to price in 29 basis points of Federal Reserve rate hikes by year-end. â€œOur forecast is for a more gradual turn toward a Fed hike in 2027, but the balance of risks is shifting in the direction of an earlier hike than expected,â€ said Bruce Kasman, chief economist at JPMorgan, noting a recent hawkish tilt in Fed policy rhetoric. Futures imply a 60% chance of a rate rise as early as September, pushing yields on 30-year Treasuries back above the psychological 5.0% barrier. This is a level that tends to attract funds away from equities and toward fixed income, while lifting the valuation bar for future corporate earnings. The shift has come just as investors question sky-high valuations for chip and AI stocks, which have seen the Philadelphia Semiconductor Index shed 10% last week to leave it 20% down from Juneâ€™s record high. Lofty expectations for earnings Markets took an â added blow on Friday when Chinese AI firm Moonshot said it had a new open weight model, Kimi K3, that it says delivers performance approaching U.S. giant Anthropicâ€™s frontier Fable model. All of which raises the stakes for this weekâ€™s rush of profit results, which include Alphabet, Intel and Tesla. BofA analyst Savita Subramanian remains upbeat on the earnings outlook, tipping a 5% beat versus consensus, or 28% growth. Tech is expected to drive over half of growth, with semiconductors expected to rise around 130% year-on-year. Such forecasts helped S&P 500 futures hold steady, while Nasdaq futures edged up 0.1%. In Europe, â EUROSTOXX 50 futures were little changed, while DAX futures and FTSE futures eased 0.1%. Japanâ€™s Nikkei was closed for a holiday, having shed 6.4% last week in a tech-led rout. MSCIâ€™s broadest index of Asia-Pacific shares outside Japan dipped 0.3%, while Chinese blue chips rose 1.4%. South Koreaâ€™schip-heavy market lost a further 4.2%, after diving almost 9% last week in wild trade as retail investors were â squeezed out of leveraged positions. The latest spike in oil will be a headache for the European Central Bank which meets on Thursday and is considered likely to hold rates at 2.25% following Juneâ€™s hike. Attention will be on policy makersâ€™ guidance with markets almost fully priced for a rise at its September meeting and rates of 2.75% early next â year. The euro was flat at $1.1433 , having spent more than a week trading between $1.1377 and $1.1482. The dollar was steady at 162.39 yen , just below the recent 40-year peak of 162.84 as Japanese authorities flag the threat of intervention should the yen weaken quickly. Sterling held at $1.3449 as bond markets waited for Britainâ€™s incoming Prime Minister Andy Burnham to name a new treasurer. In commodity markets, the rise in yields pressured non-interest-paying gold which fell 0.5% to $3,998 an ounce .

Date: 2026-07-20

Details: Published July 20, 2026 Updated about 3 hours ago NEW YORK: US corporate earnings season heats up in the coming week, with Alphabet and Intel set to offer updates that could sway the market-leading AI trade and investors eager to see if companies can meet high profit expectations to help the US stock market weather uncertainty over the Iran war. The S&P 500 was lower for the week as of Thursday but was not far from record highs, after a rally that has taken the benchmark index up 10 percent in 2026. Increasing expectations for profit strength this year have provided bedrock support for investorsâ€™ enthusiasm for stocks. Now they are counting on the just-underway second-quarter earnings season to show the corporate profit engine still humming along, with S&P 500 earnings projected up a whopping 25.7 percent in the period, according to LSEG IBES data. â€œHeadlines continue to raise anxiety and leave investors scratching their heads wondering why the market continues to reach new heights,â€ said Michael Arone, chief investment strategist at State Street Investment Management. â€œAnd the reason it does is because the fundamentals have been resilient, and the earnings continue to be outstanding.â€ Alphabetâ€™s quarterly report on Wednesday will command Wall Streetâ€™s attention. The Google parent, the third-largest US company by market value at USD4.3 trillion, can jostle indexes as one of the heavyweight â€œMagnificent Sevenâ€ stocks that have driven US equities higher for much of the bull run that has lasted nearly four years. The company is also an AI â€œhyperscaler,â€ spending billions of dollars to build out data centers and AI infrastructure. Such AI capital spending has been at the heart of this yearâ€™s market rally, driving huge gains for semiconductors and other companies benefiting from the massive outlays. If Alphabet announces â€œany type of pullbacks with respect to the spending that theyâ€™re forecasting around AI, you could see ripple effects across the entire AI ecosystem,â€ said Kevin Mahn, president and chief investment officer at Hennion & Walsh Asset Management. Results from semiconductor firms Intel and Texas Instruments take on particular significance due to the stunning rally this year in chip stocks. Although the trade faltered in recent weeks, the Philadelphia SE Semiconductor index remains up about 68 percent in 2026; Intel shares have soared over 160 percent, while Texas Instruments has gained 68 percent. Tepid market reactions to strong reports this period from foreign companies Samsung Electronics and Taiwan Semiconductor indicate the high expectations for the semiconductor industry. Chip stocks have seen huge swings as investors questioned whether the high-flying trade has run too far. The sectorâ€™s massive collective weighting in indexes means chip shares can influence the marketâ€™s direction. Leveraged products tied to the semiconductor space are also â€œamplifying on both the upside and the downside,â€ said State Streetâ€™s Arone. Elon Muskâ€™s Tesla, another Magnificent Seven company, is also set to post results in the coming week. Other high-profile results include American Express, Philip Morris International and defense contractor RTX, with more than 80 S&P 500 companies expected to report. Major US banks kicked off the reporting season this week, posting earnings boosted by fees for advising on mergers and acquisitions and surging trading revenue. Wall Street was still bracing for developments in the Middle East to cause day-to-day market swings, following a recent escalation of the nearly five-month-old US-Israeli war with Iran. Many investors expect the war to be relatively short-lived, but are wary that renewed tensions could boost energy prices up to levels they reached following the start of the war, inflaming inflation fears. Thatâ€™s especially an issue ahead of the Federal Reserveâ€™s meeting at the end of July. Pricing in fed funds futures indicate expectations the US central bank will raise interest rates in the coming months to bring down inflation that is above the Fedâ€™s 2 percent annual target. Cooler-than-expected data this week on US consumer and producer prices calmed some fears the Fed could raise rates at this monthâ€™s meeting.

Date: 2026-07-18

Details: Published July 18, 2026 Updated about 3 hours ago KARACHI: Standard Chartered Pakistan has been recognised by Euromoney as Pakistanâ€™s Best Mortgage Bank, reflecting the strength of its mortgage proposition and commitment to delivering a seamless, client-focused home financing experience. This recognition reinforces Standard Charteredâ€™s broader Wealth proposition, which is centred on helping clients build, manage and protect wealth throughout their financial journey. Home ownership remains one of the most important pillars of long-term financial security, and the Bank continues to combine tailored mortgage solutions with holistic financial planning and advisory services for its clients. This accolade comes at a time when expanding access to housing remains an important national priority. As Pakistan advances initiatives aimed at increasing home ownership, including the Government of Pakistanâ€™s Wazir-e-Azam Apna Ghar Programme - Ghar Ho Tu Apna, access to financing will play a critical role in expanding home ownership, supporting economic development and building long-term financial resilience. Standard Charteredâ€™s mortgage proposition is designed to help clients navigate the home ownership journey with confidence, offering competitive financing solutions, digital convenience and end-to-end support. Through its Future Focused Move platform, the Bank continues to support both local clients and overseas Pakistanis in achieving their housing aspirations. Commenting on the recognition, Saadya Riaz, Head of Wealth and Retail Banking, SCP, said: â€œAs Pakistan continues to prioritise greater access to housing, we remain committed to helping individuals and families realise their home ownership aspirations while building lasting financial well-being. â€œWe are honoured to be recognised by Euromoney as Pakistanâ€™s Best Mortgage Bank. At Standard Chartered, we view home ownership as more than a financial milestone; it is one of the most important foundations of long-term wealth creation. This award reflects the trust our clients place in us and the dedication of our teams to delivering exceptional service and trusted advice.â€ Copyright Business Recorder, 2026

Date: 2026-07-18

Details: Published July 18, 2026 Updated about 3 hours ago NEW YORK: Wall Street extended its decline on Friday as a pullback on stocks associated with the AI boom, which has driven much of the gains so far this year, morphed into a larger risk-off sentiment. Semiconductor stocks, which have led the broader marketâ€™s move in recent sessions, initially led the selloff, which broadened as the session progressed. All three indexes were on course to post weekly losses. The Philadelphia SE Semiconductor Index was last down 1.0 percent, and remained on track for its steepest weekly loss since early April, and has tumbled about 17 percent so far in July. Even so, the index remains up 63.2 percent year-to-date, compared with the S&P 500â€™s 10 percent gain over the same time frame. Some investors in the artificial intelligence space have begun positioning for a slowdown in the nearly trillion-dollar spending boom, with some active managers already scaling back their exposure, according to a Reuters analysis. â€œThe story is over for chips because the story is not over for AI,â€ said Sam Stovall, chief investment strategist at CFRA Research in New York. â€œ(Chips) have come so far, so over an extended period, itâ€™s like an army that got too far ahead of its supply lines and has to retreat and let the fundamentals catch up.â€ Every member of the Magnificent Seven group of AI-related megacaps dipped, with Meta and Alphabet suffering the worst of it, down 2.7 percent and 3.2 percent, respectively. The Dow Jones Industrial Average fell 290.49 points, or 0.56 percent, to 52,260.46, the S&P 500 lost 64.87 points, or 0.86 percent, to 7,468.83 and the Nasdaq Composite lost 308.67 points, or 1.19 percent, to 25,573.27. Among the major sectors of the S&P 500, communication services and technology were down the most, while energy stocks were the sole gainers, benefitting from spiking crude prices amid signs of escalating hostilities in the Iran war. War equipment makers were also clear outperformers. Second-quarter earnings season is still in its early days, with 49 of the companies in the S&P 500 having reported. Of those, 90 percent have delivered better-than-expected results, according to LSEG.

Date: 2026-07-18

Details: Published July 18, 2026 Updated about 3 hours ago KARACHI: The Pakistan Hosiery Manufacturers and Exporters Association (PHMA) has called for the immediate implementation of the Karachi Safe City Project, saying it is essential for improving law and order, strengthening investor confidence and ensuring Pakistanâ€™s socioeconomic stability. The demand was made during a meeting between PHMA office-bearers and the Additional Inspector-General of Police (Karachi Range), Azad Khan, at the associationâ€™s central office. Speaking on the occasion, Azad Khan said modern policing through digitalization and technology had become a necessity for effectively serving the people and maintaining law and order in Pakistanâ€™s largest metropolitan city. He said Karachi being the countryâ€™s largest industrial and commercial hub required greater use of technology, digital monitoring and real-time surveillance under the Smart Safe City Project to improve policing, reduce crime and facilitate the business community. He said Karachi Police remained available round the clock to support and facilitate industrialists and exporters. The additional IGP briefed participants on the policeâ€™s ongoing efforts to reduce crime, including measures against street crime, prevention of vehicle theft, enhanced surveillance, improved deployment strategies and better coordination among police units. He said it was equally important to improve both the actual security situation and the public perception of Karachi as a safe destination for investment, business and industrial activities. He noted that the city had long suffered from a negative image, though the law and order situation had improved considerably over the years. Azad Khan said better security strengthened investor confidence and helped promote exports. He said that the government and industry should work together to project Karachi as one of the countryâ€™s most business-friendly cities. Highlighting the importance of smooth traffic management for industrial activity, he also proposed the development of a mobile application to simplify security arrangements for foreign businesspersons and engineers visiting Karachi. Under the proposal, industries would be able to submit online security requests through a centrally managed system linked with the Karachi Police. PHMA Patron-in-Chief Muhammad Jawed Bilwani, Central Chairman Muhammad Babar Khan and Zonal Chairman Faisal Arshad Sheikh welcomed Azad Khan and his delegation and briefed them on the associationâ€™s role as one of Pakistanâ€™s oldest and largest representative bodies of the value-added apparel and textile sector, with a nationwide industrial presence. The meeting was also attended by PHMA Senior Vice Chairman Bashir Ghaffar, Vice Chairman Salman Ishaq, former chairmen Irfan Zakaria Bawany and Abdul Jabbar Gajiani, former senior vice chairman Shabbir Bilwani and other leading exporters and association members. Speaking on behalf of the association, Muhammad Jawed Bilwani praised Azad Khan for his services to Karachi Police and his performance in previous assignments. He urged both the federal and Sindh governments to give priority to Karachi by completing and enforcing the Smart Safe City Project across the cityâ€™s entire jurisdiction. He said Karachi contributed around 70 per cent of the countryâ€™s total revenue collection and about 95 per cent of the Sindh Revenue Boardâ€™s revenue, making it imperative to improve the cityâ€™s security infrastructure. He added that the immediate implementation of the Smart Safe City Project would help expand business and industrial activity while attracting greater domestic and foreign investment. Copyright Business Recorder, 2026

Date: 2026-07-18

Details: Published July 18, 2026 Updated about 3 hours ago FAISALABAD: With Pakistanâ€™s textile sector under increasing strain from soaring energy costs, high financing rates, escalating production expenses, and intense regional competition, business leaders have urged the government to introduce immediate policy measures to protect the countryâ€™s largest export-oriented industry. Faisalabad, Pakistanâ€™s industrial and textile hub, contributes an estimated USD 5.5 billion in textile exports annually, nearly 45 percent of the countryâ€™s total textile exportsâ€”making its economic stability crucial to national export growth and employment. Against this backdrop, the Pakistan Business Forum (PBF) has announced its new office bearers for the Faisalabad Chapter for a two-year term, effective immediately, according to a notification issued by Chief Organiser Ahmad Jawad. The newly elected team comprises Director FIEDMC Mian Kashif Zia as President, Senior Vice Chairman of PHMA (North Zone) Ahmed Afzal Awan as Senior Vice President of the forum, Mian Tanvir Ahmed and Muhammad Abdullah Qadri as Vice Presidentâ€™s, and senior trade leader of the city Mian Tanveer Riaz as General Secretary of the forum. Addressing members of the business community, PBF Faisalabad President Mian Kashif Zia thanked the forumâ€™s leadership for its confidence in the new team and pledged to work closely with industrialists, exporters, policymakers, and government institutions to strengthen Pakistanâ€™s industrial and export sectors. Describing Faisalabad as the countryâ€™s industrial backbone, Kashif Zia said the cityâ€™s manufacturing base plays a pivotal role in Pakistanâ€™s economy. However, he noted that rising electricity and gas tariffs, inconsistent energy supplies, high borrowing costs, liquidity constraints, and increasing production expenses have weakened the competitiveness of exporters, while many small and medium-sized enterprises are struggling to sustain operations. â€œThe government must urgently introduce industry-friendly policies that reduce the cost of doing business and restore investor confidence,â€ Zia said. â€œAffordable energy, easier access to finance, stable taxation policies, timely payment of sales tax refunds, and effective export facilitation are essential to revive industrial growth and strengthen Pakistanâ€™s position in international markets.â€ Speaking on the occasion, Ahmed Afzal Awan said Faisalabadâ€™s industrial landscape extends far beyond textiles, encompassing garments, knitwear, hosiery, spinning, weaving, textile processing, chemicals, pharmaceuticals, engineering goods, food processing, plastics, packaging, and agricultural machinery manufacturing. Copyright Business Recorder, 2026

Date: 2026-07-18

Details: Published July 18, 2026 Updated July 18, 2026 06:50am SHANGHAI: Artificial intelligence should not be dominated by a single country, Chinaâ€™s President Xi Jinping said Friday at a major technology conference in Shanghai, urging international cooperation on its development. Chinese AI models are catching up to the most powerful US offerings and attracting global users with lower costs. But how to govern the sector has become a key question, as concerns grow over military AI deployment or its use by hackers and terrorists. â€œAI development should not be a solo performance by a single country, but a symphony of international cooperation,â€ Xi said at the opening of the World Artificial Intelligence Conference. â€œWe should jointly oppose overstretching the national security concept in the field of AI or placing one countryâ€™s security over that of others,â€ Xi added. The United States and European Union restrict tech exports to China over national security concerns, while tussles between Washington and American AI labs have raised the issue of who controls top technologies. â€œChina is trying to lead not only in terms of the technology development, but also in terms of AI governance,â€ said Shengyun Lu, AI entrepreneur and founder of Shanghai consultancy Praxis Advisory. Lu told AFP that in his view, AI should be regulated â€œlike we regulate nuclear powerâ€. â€˜Under human controlâ€™ The four-day WAIC gathers more than 1,000 of Chinaâ€™s tech firms, officials, researchers and industry figures. Around 3,000 products are on display, from powerful semiconductor systems for AI computing to a smartphone that can autonomously operate apps. But eyes were first on Xiâ€™s vision of how the world should handle the potential impacts of AI. â€œWe should put in place laws and regulations, technological monitoring, early warning, and emergency response systems, in order toâ€¦ ensure AI is always under human control,â€ Xi told the conference, calling for a â€œpeople-centricâ€ approach. On Thursday, foreign minister Wang Yi and representatives from 29 countries including Russia, Pakistan and Indonesia agreed to establish an intergovernmental AI cooperation group. The World Artificial Intelligence Cooperation Organization, headquartered in Shanghai, aims to ensure the â€œhealthy and orderlyâ€ development of AI, state media reported. â€œI can understand Western countries are absent from this initiative, because Europe already has its own AI act and the United States is already defining their regulations,â€ Lu said. New York University business and technology professor Arun Sundararajan said â€œsmall glimmers of recent cooperation between Presidents Xi and Trumpâ€ were encouraging, but it was â€œhard to imagine there being a single approach to AI governance globallyâ€. Mega AI consumption Leaders including UN chief Antonio Guterres, Cambodiaâ€™s Hun Manet and Thailandâ€™s Anutin Charnvirakul are attending WAIC, which showcases the cutting edge of Chinese tech. Early Friday, the Beijing-based startup Moonshot AI released a powerful new flagship model, Kimi K3, which it said â€œdemonstrated frontier-level performanceâ€. Other highlights this year include MiniMaxâ€™s M3 model and Huaweiâ€™s Atlas 950 â€œsupernodeâ€, an AI architecture for learning and reasoning. â€œThe main theme will be the transition from AI models to systems that can be deployed at scaleâ€ in everyday life, Poe Zhao of analysis publication Hello China Tech said. Daily consumption in China of â€œtokensâ€ â€” the industry unit of AI usage â€” has increased a thousandfold over the past two years, according to state media citing officials. A growing number of companies abroad, like Siemens, are adopting Chinese open-source AI models, attracted by their performance, lower cost and ability to customise, in contrast to the closed systems of US giants such as OpenAI and Anthropic. Both those US firms had to temporarily withhold the release of their latest AI models because of government concerns that they could help hackers break into critical online infrastructure. â€œModels these days are controlled by very few,â€ so more cooperative governance could expand access to them, 34-year-old Mike Luan, who works for an AI research lab, told AFP outside the WAIC venue.

Date: 2026-07-18

Details: â€¢ Brent crude settles 4.59% higher at $88.10; WTI rises 4.48% to $82.49 Published July 18, 2026 Updated about 3 hours ago NEW YORK: Oil prices climbed more than 4 percent to their highest in more than a month on Friday after the US and Iran stepped up attacks across the Gulf, with shipping threatened by a potential Red Sea closure on top of the restricted traffic through the Strait of Hormuz. Brent crude futures settled USD 3.87, or 4.59 percent, higher to USD 88.10 a barrel, while US West Texas Intermediate futures rose USD 3.54, or 4.48 percent, at USD 82.49. Both were at their highest since mid-June. For the week, both benchmarks gained about 16 percent, with Brent on track for a third consecutive weekly gain and WTI set for its second. The two foes expanded fighting on Friday, with the US striking bridges and an airport in Iran and Tehran hitting a power and desalination plant in Kuwait. Iran said it launched more strikes on US facilities in the Middle East, including the first direct attack in Syria, after a sixth straight night of US strikes on Iranian military facilities. â€œThe market is reacting to the increasing hostilities between Iran and the United States that have culminated this week with nightly attacks on Iranian infrastructure and retaliation by Iran on its neighborsâ€™ infrastructure,â€ said Andrew Lipow, president of Lipow Oil Associates. â€œIf more tankers come under fire and become damaged, weâ€™re going to see oil prices continue to move up as shipowners simply refuse to enter the Persian Gulf.â€ The collapsed truce between the US and Iran has resulted in a sharp decline in oil flows in the strait as Iran targets vessels transiting through it. Before the Iran war, about 20 percent of global oil supplies flowed through the waterway. Iran has pressed the Houthis to close the Red Sea route if the US attacks Iranâ€™s power infrastructure. â€œGiven that so much of Saudi Arabiaâ€™s exports have been redirected to the port of Yanbu via the East-West Pipeline to avoid Hormuz, any such development is a threat indeed,â€ Tamas Varga, analyst at PVM Oil Associates, wrote in a note. Saudi Arabia has diverted more than 70 percent of its normal daily crude exports to the Red Sea port of Yanbu since the beginning of the war. Shipments from Yanbu averaged 4 million barrels per day in recent weeks, up from around 973,000 bpd in the same period last year. Qatarâ€™s defence ministry said its armed forces thwarted an Iranian missile attack early on Friday and the interior ministry said a child was wounded by shrapnel resulting from interception operations. In a different conflict zone, Ukraineâ€™s military said it struck a Russian oil refinery in the Yaroslavl region on Thursday.

Date: 2026-07-18

Details: Published July 18, 2026 Updated about 2 hours ago ISLAMABAD: The countryâ€™s power generation declined by 2.5 percent in June 2026 compared to the same month last year, primarily due to disruptions in LNG supply from Qatar, which recently extended force majeure amid a war-like situation in the Middle East. Despite the drop in generation, the average cost of electricity surged by 14 percent to Rs8.9885 per kWh in June 2026, up from Rs7.8698 per kWh in June 2025. Hydel generation fell by 3 percent to 5,242 GWh in June 2026, accounting for 39.03 percent of total generation, compared to 5,410 GWh in June 2025. The decline is attributed to a fault at the Tarbela generation facility. Based on the local coal, the electricity generation decreased by 10 percent to 1,358 GWh from 1,510 GWh. However, generation from imported coal rose by 21.6 percent to 1,699 GWh, up from 1,397 GWh in the corresponding month last year. The Independent System and Market Operator (ISMO) also allowed generation from high-speed diesel (HSD) and residual fuel oil (RFO) at significantly higher costs of Rs57 per kWh and Rs52 per kWh, respectively, in June 2026. In comparison, the National Power Control Centre (NPCC) generated 151 GWh from RFO in June 2025 at Rs29 per kWh, indicating an increase of around 80 percent in RFO-based generation cost. Generation from indigenous gas declined by 10.5 percent to 867 GWh in June 2026 at Rs13.6820 per kWh, compared to 968 GWh in June 2025. RLNG-based generation also dropped sharply to 1,480 GWh (11.02 percent share) in June 2026 from 2,216 GWh in June 2025. Meanwhile, its cost rose to Rs35.51 per kWh from Rs21.87 per kWh, reflecting an increase of 62 percent. In contrast, nuclear power generation recorded a significant increase of 31.5 percent, reaching 1,800 GWh (13.40 percent share) in June 2026 compared to 1,383 GWh in June 2025. Pakistan imported 47 GWh of electricity from Iran during June 2026 for Rs27.6635 per kWh, compared to the same volume at Rs22.5155 per kWh in June 2025, marking a 23 percent increase in price. Among renewable sources, wind power generation rose by 29.5 percent to 676 GWh from 522 GWh, while bagasse-based generation increased to 46 GWh from 35 GWh. Solar generations saw a marginal rise to 110 GWh from 106 GWh. According to CPPA-G data, total electricity generation stood at 13,413 GWh in June 2026, down from 13,744 GWh in June 2025. Delivered energy was recorded at 13,066 GWh at an average cost of Rs8.9138 per kWh, compared to 13,310 GWh at Rs7.6800 per kWh in the corresponding month last year. CPPA-G has sought a positive fuel cost adjustment (FCA) of Rs1.20 per kWh for June 2026, compared to Rs0.6541 per kWh in June 2025. The National Electric Power Regulatory Authority (Nepra) is scheduled to conduct a public hearing on July 29, 2026. Copyright Business Recorder, 2026

Date: 2026-07-17

Details: â€¢ GIFT Nifty futures were trading at 24,091 Published July 17, 2026 Updated 14 minutes ago By Reuters Indian shares are set to open little changed on Friday as investors await earnings reports from several heavyweight companies after market hours and oil prices hover around one-month highs on renewed U.S.-Iran clashes. GIFT Nifty futures were trading at 24,091 as of 7:45 a.m. IST, indicating the Nifty 50 could open slightly above Wednesdayâ€™s close of 24,072.75. Oil-to-telecom conglomerate Reliance Industries will report results after the market closes, while several top private lenders, including HDFC Bank and ICICI Bank, are scheduled to post earnings over the weekend. â€œGiven the significant weightage of â these companies in the benchmark index, the outcome of these earnings is expected to provide the catalyst for the marketâ€™s next directional move,â€ said Dhupesh Dhameja, a derivatives research analyst at SAMCO Securities. The Nifty 50 has held above its 20-day exponential moving average, suggesting buyers are defending lower levels despite repeated rejection near the 24,200 resistance zone. The index has traded between 23,800 and 24,600 over the past month, a phase analysts describe as healthy consolidation as investors assessed renewed Middle East tensions, monsoon progress and corporate earnings. Information â technology stocks will also be in focus after Wipro missed quarterly earnings estimates and signalled a weak recovery. Peer Tech Mahindra, in contrast, topped quarterly revenue expectations, helped by growth in its manufacturing segment and a weaker rupee. Brent crude rose 1.3% to $85.30 a barrel after the United States and Iran â stepped up attacks across the Gulf. Asian markets were subdued, weighed down by chipmakers as investors continued to rotate out of semiconductor stocks. Foreign portfolio investors sold Indian equities worth a net 42.06 billion rupees ($436.6 â million) on Thursday, while domestic institutional investors bought shares worth a net 29.86 billion rupees, according to provisional NSE data.

Date: 2026-07-17

Details: â€¢ MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.06% in early Asia trade while the Nikkei slid 2.8% Published July 17, 2026 Updated 17 minutes ago By Reuters SINGAPORE: Asian stocks got off to a rocky start on Friday as the drag from chipmakers weighed on global equity indexes, while oil prices were set for their sharpest weekly rise in three months as tensions in the Middle East erupted anew. Investors this week rotated out of semiconductor plays into other sectors such as banking after robust earnings from major lenders, leaving Asia vulnerable to the selloff given its heavier exposure to chips. MSCIâ€™s broadest index of Asia-Pacific shares outside Japan was down 0.06% in early Asia trade while the Nikkei slid 2.8%. Nasdaq futures lost 0.7% and S&P 500 futures declined 0.4%. EUROSTOXX 50 futures were down 0.5%. Markets in South Korea were closed for a holiday, after the government on Thursday announced it will temporarily ban new listings of exchange-traded funds (ETFs) that are tied â to certain major technology firms, while raising minimum required deposits for retail investors to invest in such products, in an effort to curb volatility. â€œAsiaâ€™s AI trade thesis is being tested again. After a strong rally so far this year - led by semiconductors - concerns have resurfaced about potential overcapacity in the AI build-up,â€ said analysts at HSBC. â€œA tougher question is how long the AI cycle can realistically run. Are we already at the late stage of the cycle? Has it peaked? It is an important question, and the reality is that it is difficult to time the market. That said, the fundamentals still look solid.â€ Oil prices were on the rise, with Brent crude futures up 0.7% to $84.83 a barrel, while U.S. crude advanced 0.7% to $79.49 per barrel. The U.S. began conducting a new wave of strikes against Iran on Thursday to â€œfurther degrade Iranian military capabilitiesâ€, the US Central Command said in a statement. For the week, Brent and US crude futures were set to rise more than 11% â each, marking their largest gains since April. â€œThe US and Iran are further away from seeing eye-to-eye,â€ said Thierry Wizman, global FX and rates strategist at Macquarie. â€œThe next few days may determine which side has â€˜overplayed its handâ€™, but not without the risk of seeing some oil infrastructure destroyed in the process.â€ Trade tensions also returned to the fore, after the U.S. imposed new 25% tariffs on Brazil. Assessing the fed rate path In currencies, the dollar held steady on Friday and was set to end the week little changed as receding expectations of â Federal Reserve rate increases this year were offset by renewed safe-haven demand. Investors are now pricing in roughly 27 basis points worth of Fed hikes by December , following benign U.S. CPI and PPI readings this week. The euro was little changed at $1.1442 while sterling fetched $1.3472. The yen , meanwhile, languished near a 40-year low and last stood at 162.38 per dollar, prompting renewed jawboning from Japanese Finance â Minister Satsuki Katayama to try and support the currency. Much of the marketâ€™s focus has also been on a potential allocation shift by Japanâ€™s GPIF and other pension funds, after Katayama said last week the government aims to steer the countryâ€™s vast state pension funds to â€œsubstantiallyâ€ increase investments in domestic assets. â€œWe think the expectations of repatriations by â Japanese investors could, for a certain period, provide support for higher equity prices and lower (Japanese government bond) yields,â€ said Daiju Aoki, regional chief investment officer for Japan and chief Japan economist at UBS Wealth Management. â€œHowever, market movements that extend beyond what is justified by economic growth and corporate earnings fundamentals are unlikely to be sustained over the longer term.â€ Elsewhere, spot gold was up 0.4% at $3,985.64 an ounce.

Date: 2026-07-17

Details: Published July 17, 2026 Updated about 2 hours ago By Reuters NEW YORK: The S&P 500 and the Nasdaq slipped on Thursday as renewed weakness in chip stocks over shadowed an upbeat start to second-quarter earnings, while investors parsed fresh economic data for clues on the health of the economy. Semiconductor stocks extended losses from the previous session, with the Philadelphia SE Semiconductor index down 3.5 percent. US-listed shares of TSMC fell 2.1 percent, even after the advanced AI chipmaker reported stellar results. Memory-chip makers were among the biggest laggards. Sandisk fell about 10 percent, while Western Digital and Seagate Technology were down 8 percent and 7.5 percent, respectively. Chip stocks were earlier among the biggest beneficiaries of this yearâ€™s rally, as optimism around AI spending by hyperscalers helped drive Wall Street to record highs. Shiraz Ahmed, founder and CEO at Sartorial Wealth Inc, said the chip rally is cooling off, but not because AI is losing steam, but because AI adoption still isnâ€™t fully widespread yet. As a result, heavy capex spending continues across the AI ecosystem, from energy to semiconductors. The S&P 500 has risen more than 10 percent this year and remains close to its June record closing high, leaving the rally vulnerable to any disappointment. The tech-led selloff pulled the benchmark lower, even as every other sector except technology traded higher. Healthcare shares helped cushion the broader market, with gains of 2.2 percent. UnitedHealth raised its 2026 profit forecast, sending shares of the healthcare giant up 4.3 percent and keeping the Dow afloat. Abbott jumped 12 percent after beating quarterly estimates and lifting its annual profit outlook. Defensive groups, including consumer staples and real estate, also helped limit losses, rising about 2 percent each. At 11:51 a.m. ET, the Dow Jones Industrial Average rose 133.94 points, or 0.25 percent, to 52,792.58, the S&P 500 lost 5.77 points, or 0.08 percent, to 7,566.63 and the Nasdaq Composite lost 156.53 points, or 0.60 percent, to 26,111.19. Investors parsed June retail sales data that showed only a marginal rise as lower gasoline prices weighed on receipts at service stations. Still, bargain-hunting consumers continued to support underlying spending. Separately, the number of Americans filing claims for unemployment benefits fell last week, pointing to continued labor market stability. Markets are pricing in an 88 percent chance the Fed will hold rates steady at this monthâ€™s meeting and about a 50 percent chance of a quarter-point hike in September, according to CMEâ€™s FedWatch tool. Geopolitical risks also loomed large as Iran has asked Yemenâ€™s Houthi movement to prepare to close the Red Sea oil route if the US strikes Iranian power infrastructure, sources told Reuters. United Airlines fell 1.4 percent as a renewed surge in oil prices weighed on its third-quarter and full-year profit outlooks. GE Aerospace dipped 4.7 percent, despite the jet-engine maker lifting its 2026 profit forecast. Advancing issues outnumbered decliners by a 1.12-to-1 ratio on the NYSE, while declining issues outnumbered advancers by a 1.38-to-1 ratio on the Nasdaq.

Date: 2026-07-17

Details: Published July 17, 2026 Updated about 2 hours ago By Reuters SHANGHAI: Mainland China stocks fell on Thursday, weighed down by weakness in tech shares following a selloff in regional peers, although fading expectations of a US rate hike capped declines. Hong Kong stocks rose on the day, boosted by Alibaba shares. At the close, the benchmark Shanghai Composite index was down 1.9 percent, its weakest closing since April 3. The blue-chip CSI300 index also dropped 1.9 percent. Chinaâ€™s tech-focused STAR50 index plunged 4 percent, and the start-up board CHINEXT plummeted 3 percent. Semiconductor shares were among the biggest losers, with the sub-index slumping 6 percent. Chinese chip designer Cambricon Technologies closed down 5.1 percent. The weakness tracked losses in other Asian chipmakers, with South Koreaâ€™s SK Hynix tumbling more than 11 percent and rival Samsung Electronics falling nearly 9 percent. There are growth opportunities in mainland China â€œin pharma and energy storage, and value in property developers, banks and Internet. From an earnings angle, we believe 2026 should beat last year,â€ said Herald van der Linde, head of equity strategy for Asia Pacific at HSBC. In Hong Kong, the benchmark Hang Seng Index rose 1.3 percent, while the cityâ€™s tech shares jumped 2 percent. Alibaba led gains, ending 3.1 percent higher, after the company said in a statement to Reuters that its Qwen model will be integrated into Apple Intelligence across Appleâ€™s iPhone (iOS), iPad (iPadOS), Mac (macOS) and Vision Pro (visionOS) operating systems in China. Chinese President Xi Jinping is expected to outline a vision for the countryâ€™s role in global AI governance on Friday, as Huawei showcases its most advanced AI computing cluster yet in a sign of Beijingâ€™s drive to build a domestic alternative to US technology. Separately, investors are turning their focus to the upcoming Politburo meeting, where policymakers are expected to set the economic policy agenda for the second half of the year. Markets, however, largely view the recent softer-than-expected second-quarter economic data as insufficient to prompt broad-based policy easing. â€œWe maintain our baseline forecast of no policy rate or reserve requirement ratio (RRR) cuts through the remainder of 2026, though the probability could rise if growth slows further,â€ said Lisheng Wang, economist at Goldman Sachs.

Date: 2026-07-17

Details: Published July 17, 2026 Updated about 2 hours ago By Reuters BENGALURU: Chip-heavy South Korean equities weighed on Asian stocks on Thursday as investors embarked upon a selling spree, while stocks in Singapore snapped a 10-session winning streak. The MSCI EM Asia equities index slumped 1.4 percent, dragged lower by stocks in South Korea. South Koreaâ€™s benchmark KOSPI ended 6.4 percent lower to erase the previous sessionâ€™s gains. The declines also triggered a â€œsidecarâ€ trading curb on the KOSPI and the junior Kosdaq indexes, temporarily halting program trading. Memory chip bellwethers SK Hynix and Samsung Electronics, which make up just over half of the benchmark KOSPI, ended 11.5 percent and 8.8 percent lower, respectively. Volatility in South Korean equity markets has been amplified by ETFs that are heavily weighted toward Samsung Electronics and SK Hynix as forced buying and selling magnify moves in both chip stocks and the KOSPI beyond their fundamentals. Meanwhile, the won held its ground at 1,483.60 per US dollar, near a mid-May high, after the Bank of Korea delivered a highly anticipated quarter-point interest rate hike for the first time since January 2023 to stabilise the currency. Taiwanese stocks ended flat, after declining as much as 1.5 percent, while TSMC ended 1.2 percent higher, before posting a 77 percent jump in second-quarter profit to a record that was far ahead of market forecasts. The worldâ€™s top contract chipmaker - a key supplier to Nvidia and Apple - accounts for around 43 percent of the benchmark. Singaporeâ€™s FTSE Straits Times Index slid 0.6 percent after scaling record highs in the past nine consecutive sessions. The benchmark has gained nearly 19 percent for the year so far, following yearly gains of 22.7 percent and 16.9 percent in 2025 and 2024, respectively. Elsewhere in Southeast Asia, stocks in Thailand, Indonesia, Malaysia and the Philippines drifted higher. Indonesian stocks notched their sixth straight session in positive territory.

Date: 2026-07-17

Details: â€¢ Brent crude futures rose $1.05, or about 1.25%, to $85.28 a barrel Published July 17, 2026 Updated 42 minutes ago By Reuters PERTH: Oil prices inched higher on Friday after the US and Iran stepped up attacks across the Gulf, with their broken truce limiting oil flows out of the Strait of Hormuz and with Tehran asking the Houthi movement to stand ready to shut the Red Sea export route. Brent crude futures rose $1.05, or about 1.25%, to $85.28 a barrel by 0118 GMT, and US West Texas Intermediate futures rose $1.03, or 1.3%, to $79.98 a barrel, erasing losses from the previous session. Both benchmark contracts have climbed nearly 12% this week, with Brent on track for a third â consecutive weekly gain and WTI for a second weekly gain. For the first time since a memorandum of understanding paused fighting last month, the United States launched two big waves of air strikes in a single day on Wednesday, mostly on targets near Iranâ€™s southern coast, and kept firing on Thursday. â€œOil security is still a critical issue,â€ International Energy Agency Executive Director Fatih Birol said on Thursday at a Council on Foreign Relations event in Washington. â€œWe should be worried, and I am worried, if the situation does not improve in the next few â weeks,â€ he said. In a statement, U.S. Central Command said U.S. forces began â€œa new wave of strikes against Iran for the sixth consecutive night to further degrade Iranian military capabilitiesâ€ at 2 p.m. EDT (1800 GMT) or 9:30 p.m. in Tehran. Tehran has countered with missiles and drones targeted at US military bases in â neighbouring states, including a barrage at a recently expanded air base in Jordan. Adding to oil supply concerns, Iranâ€™s leadership has told its Houthi allies to be prepared to close the Red Sea oil â route if the US strikes Iranian power infrastructure, three sources told REUTERS. IG analysts said technically, WTI could test the mid-$80s if it holds above key support in the mid-$70s. Separately, Trump â Media & Technology Group unveiled a paid-for, licensed data feed that will give banks and trading firms â€œthe fastestâ€ access to posts from influential Truth Social accounts, such as President Donald Trumpâ€™s, whose posts often move oil markets.

Date: 2026-07-16

Details: Published July 16, 2026 Updated about 3 hours ago By Press Release KARACHI: HBL, Pakistanâ€™s largest issuer of debit cards, launched the HBL PayPak UnionPay Co-Badge Debit Card at a ceremony held at HBL Tower, Karachi. Developed in partnership with 1Link operated PayPak, Pakistanâ€™s first domestic payment scheme and UnionPay International (UPI), the co-badge debit card combines PayPakâ€™s domestic acceptance with UnionPayâ€™s global reach. This dual-interface card features two networks on a single piece of plastic, thereby enabling customers to make secure and seamless transactions both within Pakistan and globally. The launch builds on HBLâ€™s long-standing partnership with both PayPak and UnionPay International. The Bank is the pioneer partner of PayPak cards and is currently one of the largest issuers and acquirers of PayPak cards in the country. HBL has been issuing UnionPay debit cards since 2013. UnionPay is a major global payment and financial services provider established in China in 2002. China is a cornerstone of HBLâ€™s international footprint. As the only Pakistani bank with branches in both Beijing and Urumqi, HBL continues to strengthen financial connectivity between Pakistan and China. From facilitating Pakistanâ€™s inaugural Panda Bond issuance to being nominated as the Chair of the Council of the Interbank Consortium of the SCO (SCO IBC) for the forthcoming year 2026 â€“ 2027, HBL continues to strengthen its footprint in the Chinese financial ecosystem. This collaboration also aligns with the State Bank of Pakistanâ€™s vision to promote PayPak â€“ Pakistanâ€™s first domestic payment scheme â€“ as a secure, inclusive and interoperable digital payment ecosystem. The launch ceremony was attended by industry leaders, including Jameel Ahmad, Governor â€“ SBP, Muhammad Nassir Salim, President & CEO â€“ HBL, Li Yong - Commercial Counsellor - Peopleâ€™s Republic of China, Aamir Kureshi, General Manager, Presidentâ€™s Office and Strategic Initiatives â€“ HBL, Nadeem Haroon, Country Head, Pakistan, Qatar, Bahrain & Afghanistan â€“ Union Pay International, and Najeeb Agrawalla, CEO - 1LINK. Copyright Business Recorder, 2026

Date: 2026-07-16

Details: â€¢ Taiwanese shares fell 0.5%, while Chinaâ€™s Hang Seng Index gained 1.2% Published July 16, 2026 Updated less than a minute ago By Reuters SYDNEY: Asian shares fell on Thursday as chipmakers stumbled ahead of results from bellwether TSMC, while bonds benefited from another benign reading on US inflation that lessened the risk of an imminent rate hike. Oil prices, however, kept climbing as hostilities heated up in the Middle East. Washington continued striking Iran after reimposing a naval blockade of its ports, while Tehran warned of an â€œexistential warâ€ with America. Brent crude futures rose 0.6% to $85.45 a barrel, adding to this weekâ€™s gain of 12%. All eyes are on the quarterly earnings from Taiwan Semiconductor Manufacturing Coâ€™s, the worldâ€™s largest manufacturer of advanced AI chips. The company is expected to notch a fifth consecutive quarter of record earnings, with a 59% surge in net profit for April-June. However, investors are proving hard to â please as shares of ASML, the worldâ€™s dominant supplier of equipment needed to make high-tech computer chips, finished 0.4% lower even after it raised its 2026 sales forecasts and pledged a capacity boost. â€œSeeing aggressive pullback in Memory/Hardware,â€ Brian Heavey, an equity trader at JPMorgan, said in a note. â€œDonâ€™t think thereâ€™s a smoking gun â€˜negativeâ€™ headline driving semis/hardware selloff. I think just shows how high the bar is for semis earnings.â€ The selling spilled over to Asia. MSCIâ€™s broadest index of Asia-Pacific shares outside Japan slid 1.7% as South Koreaâ€™s KOSPI slumped 6.3% on weakness from Samsung, down 8%, and SK Hynix, down 11%. Japanâ€™s Nikkei dropped 3%. Taiwanese shares fell 0.5%, while Chinaâ€™s Hang Seng Index gained 1.2%. South Koreaâ€™s central bank raised interest rates for the first time in 3-1/2 years to 2.75% on Thursday to stabilise a slumping won and counter persistent inflationary pressure. The decision was largely as expected. Wall Street gained overnight â as investors rotated out of semiconductors into Magnificent Seven stocks and banks after robust earnings from major lenders, but Asia is more vulnerable to the chip sell-off given its heavier exposure to semiconductor stocks. Bonds cheer cool inflation Surprisingly soft U.S. PPI data for June added to the benign consumer inflation figures a day earlier, as markets now priced out the risk of an imminent rate hike from the U.S. Federal Reserve this month to just 10%, from 43% earlier in the month. However, the â pullback in inflation is likely only temporary, with oil prices climbing on the renewed Middle East hostilities. The Wall Street Journal, opens new tab reported President Donald Trump is leaning towards expanding U.S. military operations in Iran, including sending ground forces. Bond investors, however, focused on cooler inflation data. Two-year Treasury yields edged up 2 basis points to 4.1493%, â after falling 14 bps over the past two days. Ten-year yields were steady at 4.5593%, having been down 7 bps over the past two days. That pulled the dollar down, except for against the beleaguered yen. The dollar index was steady at 100.48, after falling 0.4% overnight to the lowest â since June 18. The yen hovered at 162.08, not far from the 40-year low of 162.84 as speculators remain wary of Japanese intervention. Sterling hit two-month highs on expectations that Andy Burnham, who is likely to be named new Labour Party leader on Friday, will pick a fiscally conservative finance minister. The pound was 0.1% higher at $1.3538, after surging 1% overnight. Gold was steady at $4,055 an ounce.

Date: 2026-07-16

Details: Published July 16, 2026 Updated about 3 hours ago By Zahid Baig LAHORE: The Pakistan Sugar Mills Association (PSMA) in a letter to the Federal Minister for National Food Security and Research has requested the government to fulfill its pledge to allow export of surplus sugar within one month of the closure of crushing season 2025-26. As per the contents of the letter, sugar stocks in the country stood at 7.967 million metric tons at the end of the last crushing season. With annual consumption of 6.786 million metric tons, there is a surplus of 1.181 million metric tons. It will take five months to export that quantity of sugar, and by then, new sugar production will start. Over the past two years, better and timely payments to sugarcane growers have encouraged them to cultivate superior cane varieties and purchase necessary inputs, resulting in a significant increase in per-acre yield and sugar recovery. Better sugarcane crop is expected in the upcoming crushing season, resulting in higher sugar production. Sugar production of 8 million metric tons is expected in the upcoming crushing season, the letter added. The Association further said that at present, the sugar industry is facing the challenge of maintaining huge sugar stocks, while demand remains very low. Current sugar prices are below than production costs, whereas the price of sugarcane is rising every year. Due to unsold sugar stocks, the sugar industry is facing severe shortage of funds for repaying bank loans and clearing outstanding dues to farmers, claims the letter. In view of all these factors, the government is strongly urged to grant permission for the export of 0.6 million metric tons of surplus sugar at the earliest, and to authorize the export of remaining 0.55 million metric tons within one month of the commencement of the 2026-27 crushing season, the PSMA demanded. A prompt decision in this regard will not only help the sugar industry cope with the shortage of funds but also generate much-needed foreign exchange worth approximately USD 575 million for the national exchequer, the letter concluded. Copyright Business Recorder, 2026

Date: 2026-07-16

Details: Published July 16, 2026 Updated about 3 hours ago By Recorder Report LAHORE: Pakistanâ€™s premier exhibition for the dyes, chemicals and allied industries, the 11th Colour & Chem Expo 2026, will be held on July 18 and 19, 2026 at the Lahore International Expo Centre. Organised by Event and Conference International (Pvt) Ltd in collaboration with Rainbow Group and the Punjab Dyes & Chemicals Merchants Association (PDCMA), the two-day exhibition promises to be the countryâ€™s most comprehensive platform for the chemical and allied industries. Shafay Hussain, Punjab Minister for Industries, Commerce & Investment, will attend the event as the Chief Guest, underscoring the provincial governmentâ€™s commitment to promoting industrial growth, investment and technological advancement in Pakistanâ€™s manufacturing sector. The expo will be open daily from 10:00am to 6:00pm, offering free entry to trade and corporate visitors upon pre-registration. More than 300 national and international exhibitors will showcase cutting-edge products, technologies and solutions across the dyes, chemicals and allied industries. The event is expected to attract thousands of business professionals, manufacturers, importers, exporters, distributors, researchers, policymakers and investors from Pakistan and overseas. Running alongside the exhibition will be the Digital Textile Printing Industry Expo (DTPIE), providing visitors with an expanded opportunity to explore the latest developments in digital textile printing, screen printing, textile processing, finishing technologies and industrial automation. The exhibition will feature a wide range of sectors, including textile chemicals, dyes and intermediates, pigments, printing technologies, paints and coatings, pharmaceuticals, food chemicals, agrochemicals, fertilisers, petrochemicals, detergents, leather chemicals, water treatment, specialty chemicals, laboratory equipment, industrial machinery and environmental technologies. Speaking ahead of the event, the organisers said the exhibition reflects the growing strength of Pakistanâ€™s industrial sector and provides an ideal platform for local and international companies to launch new products, expand business networks and explore emerging market opportunities. Copyright Business Recorder, 2026

Date: 2026-07-16

Details: Published July 16, 2026 Updated about 3 hours ago By Safdar Rasheed LAHORE: The All Pakistan LPG Industry Organising Committee has warned that immediate correction in Oil and Gas Regulatory Authority (Ogra) notified gas price and restoration of transportation through Balochistan are urgently needed to ensure adequate supply when seasonal demand picks up from mid-August. The committee cautioned that any further delay could plunge the country into a severe LPG shortage and price spiral. In a statement issued on Tuesday, the committeeâ€™s central leader Khawaja Nouman Ahmed said the concerns about looming crisis were already raised. Participants at the conference flagged multiple issues, including what they termed Ograâ€™s flawed determination of cooking gas prices and other structural problems hurting the industry. Following the conference, a 20-member delegation of industry representatives met with Ograâ€™s senior management as well as senior officials of the Petroleum Division, Ministry of Energy to discuss the sectorâ€™s demands. Ahmed described the engagement with government officials as a welcome development, but stressed that dialogue must now translate into concrete action. He said the most pressing issue is a fresh assessment of Ograâ€™s notified LPG price. According to the committee, the current formula does not accurately account for the cost of imported LPG and other associated expenses, leaving the industry unable to operate sustainably. At the same time, Ahmed emphasised that law and order challenges affecting the transportation of LPG, particularly through Balochistan, must be resolved on a priority basis. The committee argued that addressing both pricing and security issues would have multiple benefits. It would bring stability to LPG prices, improve overall supply, and allow plant owners, distributors and other businesses linked to the LPG sector to operate without facing what it called â€œunnecessary raids and fines.â€ More importantly, Ahmed said, improved supply would directly benefit consumers by helping to bring prices down. Highlighting the current supply situation, Ahmed noted that LPG stocks in the country have already dropped to their lowest level. He attributed the pressure to the ongoing conflict in the Strait of Hormuz and other disruptions that have affected imports. He further explained that the LPG industry has a long-standing practice of building stocks during the summer months, when demand is low, to prepare for the winter season. However, this year unfavourable market conditions and what he described as non-conducive government policies have resulted in imports remaining negligible. As a result, the sector has not been able to create the usual buffer stock ahead of the high-demand period. Given these circumstances, Khawaja Nouman Ahmed urged the authorities to treat the matter with urgency. He called for an immediate revision of the official LPG price to reflect real import costs, and for concrete steps to secure highways and restore the supply route via Balochistan. He said these measures are essential to enable the industry to carry out timely imports and maintain smooth operations. â€œWith mid-August marking the start of the season and demand set to rise, we are running out of time,â€ Ahmed said. â€œIf the government does not act now on price correction and supply security, the country faces a serious risk of an LPG shortage crisis, which will hit domestic consumers the hardest.â€ The committee chairman reiterated his commitment to working with the government to ensure energy security, but stressed that without policy corrections and a safe supply chain, the LPG sector will not be able to meet the countryâ€™s winter requirements. Copyright Business Recorder, 2026

Date: 2026-07-16

Details: Published July 16, 2026 Updated about 3 hours ago By Recorder Report KARACHI: Karachi Chamber of Commerce & Industry (KCCI) and the Federal Insurance Ombudsman (FIO) have agreed to strengthen institutional collaboration to facilitate the business community through faster resolution of insurance-related disputes, enhanced regulatory coordination and greater awareness of policyholdersâ€™ rights. The understanding was reached during a meeting at the KCCI, where Director General, Federal Insurance Ombudsman (FIO), Mobashir Naeem Siddiqui, accompanied by Advisor FIO, Fazal Abrejo, held detailed discussions with President KCCI Rehan Hanif, Senior Vice President Muhammad Raza, Vice President Muhammad Arif Lakhani, Chairman of KCCIâ€™s Banking & Insurance Subcommittee Asim Aejaz, and members of the KCCI Executive Committee on issues concerning insurance dispute resolution, regulatory facilitation and enhanced institutional cooperation. Addressing the meeting, Director General FIO Mobashir Naeem Siddiqui acknowledged the insurance-related concerns raised by the business community, particularly regarding trade insurance and reinsurance challenges arising from prevailing regional security conditions. He observed that reinsurance costs often increase significantly during periods of geopolitical instability, adversely affecting insurance premiums and coverage for businesses engaged in international trade. However, he expressed optimism that the situation would normalise as regional conditions improve. To address these concerns, he proposed holding a dedicated consultative session involving KCCI, the Federal Insurance Ombudsman Secretariat and the Securities and Exchange Commission of Pakistan (SECP) to examine the issues in detail and develop practical solutions. He further suggested constituting a joint committee comprising representatives of KCCI, SECP and the FIO Secretariat to facilitate policy improvements and resolve industry-specific challenges on a priority basis. Explaining the role of the Federal Insurance Ombudsman, Mobashir Siddiqui said the institution serves as an independent Alternate Dispute Resolution (ADR) forum established under the Insurance Ordinance, 2000 and the Federal Ombudsmen Institutional Reforms Act, 2013, providing free, speedy and impartial resolution of insurance disputes. He informed participants that any individual, company or policyholder facing difficulties in obtaining legitimate insurance claims could approach the FIO without engaging legal counsel. Complaints are resolved free of cost, with nearly 95 percent of cases being disposed of within 60 days, while over 90 percent are settled amicably through mediation and arbitration. Highlighting the institutionâ€™s performance, he stated that the FIO Secretariat facilitated financial relief exceeding Rs1.5 billion during the previous year by resolving delayed or disputed insurance claims. Mobashir Siddiqui also outlined several reforms undertaken in collaboration with SECP to improve consumer protection, including the introduction of bilingual insurance policy documents in Urdu and English and the inclusion of the Federal Insurance Ombudsmanâ€™s contact details on policy documents to enable policyholders to seek timely redress. To strengthen engagement with the business community, he proposed the nomination of a dedicated KCCI focal person to establish a virtual liaison desk for expeditious handling of membersâ€™ insurance-related grievances. He also offered to organize regular awareness seminars, capacity-building sessions and technical briefings for KCCI members. Furthermore, he announced that the FIO Secretariat would regularly share awareness material with KCCI for dissemination through its digital platforms and invited representatives of KCCIâ€™s Social Media Subcommittee and Banking & Insurance Subcommittee to participate in the Secretariatâ€™s monthly awareness meetings, enabling continuous information exchange and stronger institutional coordination. President KCCI Rehan Hanif, while warmly welcoming the visiting delegation, appreciated FIO Secretariatâ€™s significant contribution towards protecting the rights of policyholders and strengthening confidence in Pakistanâ€™s insurance sector. He stated that a reliable, transparent and efficient insurance system is indispensable for promoting investment, facilitating trade, managing commercial risks and ensuring sustainable economic growth. Equally important, he added, is the existence of an independent institution capable of resolving insurance disputes fairly, impartially and expeditiously. Rehan Hanif noted that Karachi, being Pakistanâ€™s commercial and financial hub, contributes the largest share to the national economy through trade, industry, exports and tax revenues. He emphasized that while the business community remains fully committed to regulatory compliance, the regulatory framework must also remain business-friendly, predictable and facilitative to reduce the cost and complexity of doing business. Highlighting the concerns of KCCI members, he called for greater clarity in regulatory requirements, improved coordination among regulatory institutions, timely resolution of compliance-related issues and enhanced awareness regarding evolving legal and regulatory obligations affecting businesses. President KCCI assured the FIO Secretariat of KCCIâ€™s full cooperation in organizing awareness sessions, training programs and consultative engagements to educate businesses on insurance-related matters while enabling regulators to better understand the operational realities faced by the private sector. He expressed confidence that stronger collaboration between KCCI and FIO Secretariat would significantly improve access to justice for policyholders, strengthen confidence in the insurance industry and contribute towards a more transparent, resilient and business-friendly economic environment in Pakistan. Copyright Business Recorder, 2026

Date: 2026-07-16

Details: Published July 16, 2026 Updated about 3 hours ago By Recorder Report KARACHI: Flour millers have attributed the recent spike in wheat and flour prices to delays in government procurement and called for immediate permission to import wheat aimed to prevent shortages and stabilise prices in the domestic market. Yasir Iqbal Malik, a leading miller, former President of the Jamshoro Chamber of Commerce and Industry and Convener of the Sindh Flour Mills Sub-Committee of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has attributed the recent surge in wheat and flour prices to delays in the governmentâ€™s wheat procurement process. He said the flour milling industry and FPCCI had repeatedly warned the government to begin procurement on time and take effective measures against wheat hoarding. The current wheat price hike could have been avoided by timely action of the authorities and the government would have been able to achieve its procurement targets. Malik welcomed the recent actions taken by the government and local administration for the wheat price stability and said that these measures have already helped reduce wheat and flour prices. However, he noted that these steps should have been implemented much earlier. He emphasised that the flour milling industry has consistently opposed wheat hoarding, warning that such practices directly affect consumers, particularly low and middle-income households. He urged the authorities to focus enforcement efforts on private warehouses and industrial units where wheat is allegedly being stockpiled, rather than targeting flour mills. According to Malik, licensed flour mills are permitted by the Food Department to maintain wheat stocks for up to 30 days to ensure uninterrupted grinding operations. He said inspections should instead target warehouses, rice mills, cotton mills, pulse processing units and other private storage facilities that have no direct connection with wheat flour production but may be holding large quantities of wheat. Highlighting the supply gap, he said Sindh produced around 4.8 million tonnes of wheat this year against an annual provincial requirement of approximately 6.53 million tonnes, leaving a shortfall of nearly 2 million tonnes. He urged the federal government to immediately allow wheat imports to bridge the supply-demand gap and stabilise prices. The government, he said, could either permit the private sector to import wheat or allow genuine flour millers to import directly to ensure adequate supplies. â€œIf the decision to allow imports is delayed, wheat shortages could intensify and prices may rise further,â€ Yasir Malik warned. He also called for long-term agricultural reforms to increase domestic wheat production and prevent recurring shortages, stressing that sustainable policy measures are needed to strengthen Pakistanâ€™s food security. Copyright Business Recorder, 2026

Date: 2026-07-16

Details: Published July 16, 2026 Updated about 2 hours ago Photo: South Air By Recorder Report LAHORE: A new private airline, South Air, has announced the formal launch of its scheduled domestic flight operations starting on July 16. The airline on Wednesday said that the initiative aims to strengthen air connectivity across different regions of the country, promote regional development, and provide passengers with safe, high-quality, and reliable travel services. In the initial phase, South Air will begin regular flights between Karachi, Islamabad, and Bahawalpur, while new scheduled services are also being introduced from Karachi to Gwadar, Sukkur, and Rahim Yar Khan. The launch of these routes is expected to give a new boost to business activity, tourism, education, and regional connectivity. The airline is launching its services with modern ATR 72-600 aircraft, which are widely used around the world for short- and medium-haul flights due to their fuel efficiency, operational effectiveness, and compliance with international safety standards. Commenting on the commencement of domestic flights, South Air Chief Executive Officer Nishat Fatima said that the airline plans to expand its route network and fleet in the near future so that more cities across the country can benefit from modern air travel facilities. â€œThe establishment of South Air is not merely the addition of a new airline, but a national effort to further strengthen Pakistanâ€™s air connectivity. Our commitment is to provide every passenger with safe, punctual, and high-quality travel services, and to connect those regions with the national aviation network where air services have remained limited.â€ To promote collaboration in the tourism and hospitality sectors, South Air has signed a strategic Memorandum of Understanding (MoU) with Dream World Destination Hotels and Golf Course. Under this partnership, various initiatives will be undertaken to introduce joint travel packages, special discount offers, and the promotion of tourism-related activities. According to the airline management, South Air will give top priority to international safety standards, punctuality, excellent customer service, operational transparency, and professional excellence across all its operations. Aviation experts believe that South Airâ€™s entry will encourage healthy competition in Pakistanâ€™s aviation sector, improve regional air connectivity, and have a positive impact on trade, investment, tourism, and the national economy. South Air has urged passengers to stay connected with the airlineâ€™s official channels for flight schedules, fares, and booking details for flights commencing from July 16. Copyright Business Recorder, 2026

Date: 2026-07-16

Details: â€¢ Brent crude futures climbed 33 cents, or 0.4%, to $85.28 a barrel Published July 16, 2026 Updated 32 minutes ago By Reuters TOKYO: Oil prices rose for a fourth straight day on Thursday after a new wave of US strikes on Iranian military installations fuelled fears of renewed full-scale conflict and supply disruptions in the Strait of Hormuz. The United States struckIranâ€™s coastal defences and missile sites on Wednesday after reimposing a naval blockade of its ports, while Iran threatened to shut off more regional energy exports, saying it was engaged in an â€œexistential warâ€ with America. Brent crude futures climbed 33 cents, or 0.4%, to $85.28 a barrel by 0026 GMT, while U.S. â West Texas Intermediate futures rose 42 cents, or 0.5%, to $80.02 a barrel. Both benchmarks gained about 0.3% on Wednesday and were hovering near their one-month highs touched on Tuesday. â€œWith tensions in the Middle East flaring up again, buying is taking the lead,â€ said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment. â€œWhile mediation efforts by neighbouring countries continue and the consensus view is that a full-scale war is unlikely, WTI could still rise to $85â€“$87 depending on how the conflict develops,â€ he said. Oil prices have gained this week as attacks deepened supply â disruption in the Strait of Hormuz, which handled about a fifth of the worldâ€™s oil and liquefied natural gas trade before the war began. US aircraft fired on ship that tried to break Iran ports blockade: US military Hostilities between Iran and the U.S. reignited last week, fraying an already fragile truce reached in June after several months of fighting. Analysts say Iran â has signalled it may use its Houthi allies in Yemen to shut the Bab el-Mandeb gateway to the Red Sea, opening a new front against Washington and putting two of the worldâ€™s most vital â energy arteries at risk. Goldman Sachs said Brent could exceed $110 in the fourth quarter if the Gulf export recovery continues to stall, but could fall into the $60s by year-end if â tensions ease and production recovers faster than expected. Meanwhile, the U.S. Energy Information Administration said crude inventories fell by 1.7 million barrels in the week to July 10, compared with analystsâ€™ expectations for a 2.6 million-barrel draw.

Date: 2026-07-16

Details: Published July 16, 2026 Updated about 3 hours ago By Reuters HOUSTON: Oil prices rose slightly on Wednesday, reacting to stronger-than-expected inventory and largely shrugging off a new wave of US attacks against Iranian military installations that aimed to limit Tehranâ€™s ability to strike shipping in the Strait of Hormuz. Brent futures settled at USD 84.95 a barrel, up 22 cents, or 0.26 percent. West Texas Intermediate futures finished at USD 79.60 a barrel, up 26 cents, or 0.33 percent. The US Energy Information Administration reported a 1.7-million-barrel drop in US crude inventory last week, less than a forecast draw of 2.6 million barrels. â€œThere seems to be a sense that weâ€™ve seen this movie before,â€ said Phil Flynn, senior analyst with Price Futures Group, referring to hostilities in the Middle East. â€œThereâ€™s a sense in that EIA report the supplies instead of evaporating are stabilizing,â€ he added. The EIA also reported a build in distillates of 4.6 million barrels last week compared to a forecast increase of 100,000 barrels. Washington had earlier reimposed a naval blockade of Iranian ports and launched overnight strikes, prompting Iranâ€™s Islamic Revolutionary Guard Corps to threaten to close â€œall other export corridors that benefit the US and its alliesâ€. Oil prices settled up 2 percent at a one-month high on Tuesday as attacks exacerbated a supply disruption in the Strait of Hormuz, through which about a fifth of the worldâ€™s oil and liquefied natural gas passed prior to the warâ€™s outbreak. The hostilities between Iran and the US reignited last week, fraying an already fragile truce reached in June after several months of fighting. Late on Tuesday, the US military said it had hit dozens of military targets near the strategic waterway and Iranian coastal areas in strikes lasting seven hours. In response, Iranâ€™s Islamic Revolutionary Guard Corps said on Wednesday it had struck US military targets in the region, including in Bahrain, Kuwait and Jordan. The US military said its fresh strikes on Wednesday against Iranâ€™s coastal defence systems and cruise missile storage and launch sites were â€œdesigned to further degrade military capabilities Iranian forces have used to attack commercial shipping in the Strait of Hormuz.â€ Analysts have said Iran has been signalling it may use its Houthi allies in Yemen to shut the Bab el-Mandeb gateway to the Red Sea, opening a new front against Washington and putting two of the worldâ€™s most vital energy arteries at risk. Further strengthening oil prices was a US naval blockade of ships coming and going to Iranian ports, said UBS analyst Giovanni Staunovo, adding that Iranian crude exports were around 1.5 million to 2 million barrels per day in the last two weeks. Goldman Sachs estimated in a note that Gulf exports recovered to more than 80 percent of pre-war levels after the US-Iran memorandum of understanding in June but slipped back below 50 percent, or about 11 million bpd, over the last week. The bank said Brent could exceed USD 110 in the fourth quarter this year if the Gulf export recovery continues to stall. Still, investors are cautious to apply too much of a premium on oil prices, given the back-and-forth headlines. â€œThis is just all part of the war games,â€ said Saxo Bank head of commodity strategy Ole Hansen. â€œAnd the market has learned to adopt a little bit of a sanguine approach to some of these big announcements, simply in the sense that they often do not actually materialize.â€

Date: 2026-07-16

Details: Published July 16, 2026 Updated about 3 hours ago By Reuters NEW YORK: US natural gas futures eased to a two-month low on Wednesday on rising output and lower flows to liquefied natural gas (LNG) export plants due to maintenance at Freeport LNGâ€™s facility in Texas. Front-month gas futures for August delivery on the New York Mercantile Exchange fell 3.5 cents, or 1.2 percent, to USD2.869 per million British thermal units (mmBtu), putting the contract on track for its lowest close since May 13. Meteorologists forecast temperatures would top 90 degrees Fahrenheit (32.2 degrees Celsius) in many parts of the country on Wednesday, including New York and Chicago. That forecast compares with a normal high of 85 F in both cities for this time of year, according to weather forecaster AccuWeather. As homes and businesses crank up their air conditioners to escape the heat, next-day power prices at the PJM Western Hub jumped 178 percent to around USD420 per megawatt hour. The PJM Western Hub is located mostly in western Pennsylvania and the District of Columbia/Maryland metro area. Financial group LSEG said average gas output in the US Lower 48 states has risen to 110.1 billion cubic feet per day so far in July, up from 110.0 bcfd in June, but has remained below the monthly record high of 110.6 bcfd in December 2025. Analysts said mostly mild weather during the spring allowed energy firms to stockpile more gas than usual. As they wait for a federal report on Thursday, they projected the amount of gas in storage was 6.6 percent above normal during the week ended July 10, the same as the previous week. Meteorologists forecast the weather would remain mostly warmer than normal through July 30, forcing power generators to burn lots of gas to keep air conditioners humming. About 40 percent of US power generation comes from gas-fired plants. LSEG projected average gas demand in the Lower 48 states, including exports, would slide from 111.1 bcfd this week to 110.4 bcfd next week. The forecast for this week was higher than LSEGâ€™s outlook on Tuesday. Average gas flows to the nine big US LNG export plants have risen to 17.5 bcfd so far in July, up from 17.4 bcfd in June, but have remained below the monthly record high of 18.8 bcfd in April. On a daily basis, however, LNG feedgas was on track to drop to a five-week low of 16.8 bcfd on Wednesday due mostly to a reduction in flows to Freeport LNGâ€™s 2.4-bcfd export plant in Texas for planned work from July 10 to late August. In other LNG news, the Al Fatâ€™h LNG tanker was on track to reach China on July 16 with a load of fuel from US energy firm Venture Global LNGâ€™s Plaquemines export plant in Louisiana. The vessel left the US in early June. So far, no LNG tanker has left a US export plant and gone directly to China during US President Donald Trumpâ€™s second term, which started in January 2025, due primarily to trade disputes between the worldâ€™s two biggest economies. China, which imported a large amount of US gas in the past and has many contracts to buy US LNG, is the worldâ€™s biggest gas importer, while the US is the worldâ€™s biggest gas producer, consumer and exporter. Chinese companies have bought US LNG and then sold it to buyers in other countries.

Date: 2026-07-15

Details: *Brent rose $1.46, or 1.72%, to $86.19 a barrel Published July 15, 2026 Updated about an hour ago By Reuters PERTH: Oil rose on Wednesday as President Donald Trump reimposed a naval blockade on all Iranian ports and Iran launched retaliatory strikeson US infrastructure in the region. For the second straight session, Brent closed at its highest since June 12 and West Texas Intermediate at its highest since June 15 and rose further on early Wednesday trade. Brent rose $1.46, or 1.72%, to $86.19 a barrel by 0029 GMT while WTI was up $1.11, or 1.4%, to $80.40 a barrel. Oil prices closed up 2% to a one-month high on Tuesday as attacks deepened a supply disruption in the Strait of Hormuz, where some one-fifth â of the worldâ€™s oil and liquefied natural gas transited prior to the beginning of the war. Early on Wednesday, the U.S. also began a fresh round of strikes â€œto continue degrading Iranian capabilities used to attack commercial shipping in the Strait of Hormuz,â€ the U.S. military said. Tehran says it has again closed the strait after hostilities between Iran and the U.S. reignited last week, fraying an already fragile truce reached in June after several months of fighting. â€œIâ€™ll save the energy targets for last, but ultimately weâ€™ll hit energy targets,â€ Trump told Fox News in an interview aired Tuesday night on â€œSpecial â Report with Bret Baierâ€. Iranâ€™s army said early on Wednesday that it had launched drone attacks against U.S. positions at Jordanâ€™s Azraq base. There was no immediate comment from the Pentagon. Iranâ€™s Islamic Revolutionary Guard Corps said they targeted weapons and storage facilities in Bahrain and Kuwait. Reuters could not immediately verify the reports. The flare-up â over the last few days has heightened doubts that a memorandum of understanding signed last month would lead to a permanent halt to the war, which has engulfed Iranâ€™s neighbors. â€œThe chances of oil moving back â toward $100 in the reasonably near term are still meaningful if hostilities intensify which damages energy infrastructure around the Gulf,â€ Tim Waterer, chief market analyst at KCM Trade said, noting Brent prices â could remain at $75-$80 a barrel if diplomatic efforts helped reopen the strait. â€œFor now, the risk premium is still embedded, but itâ€™s not a one-way bet given that there remain incentives for both sides to find a diplomatic solution.â€

Date: 2026-07-15

Details: Published July 15, 2026 Updated about 6 hours ago By Reuters NEW YORK: US natural gas futures eased about 1percent to a two-month low on Tuesday on rising output and an expected decline in flows to liquefied natural gas (LNG) export plants during maintenance at Freeport LNG in Texas. Front-month gas futures for August delivery on the New York Mercantile Exchange fell 2.7 cents, or 0.9percent, to USD2.87 per million British thermal units (mmBtu), putting the contract on track for its lowest close since May 13. That also put the front-month down for five days in a row and kept it in technically oversold territory for a second day in a row, both for the first time since April. In a sign the market is not too worried about gas supplies in coming months, the premium of futures for March over April 2027 fell to a record low of around 18 cents per mmBtu. The industry calls the March-April spread the â€œwidow-makerâ€ because rapid price moves resulting from changing weather forecasts have forced some speculators out of business. Notably, the Amaranth hedge fund lost more than USD6 billion in 2006. Traders use the March-April and October-November spreads to bet on winter weather forecasts and supply and demand. March is the last month of the winter heating season when utilities pull gas out of storage, and October is the last month of the summer cooling season when utilities inject gas into storage. Financial group LSEG said average gas output in the US Lower 48 states rose to 110.2 billion cubic feet per day (bcfd) so far in July, up from 110.0 bcfd in June, but remained below the monthly record high of 110.6 bcfd in December 2025. Analysts said mostly mild weather during the spring allowed energy firms to stockpile more gas than usual. As they wait for a federal report on Thursday, they projected the amount of gas in storage held at 6.6percent above normal during the week ended July 10, the same as the previous week. Meteorologists forecast the weather would remain mostly warmer than normal through July 29, forcing power generators to burn lots of gas to keep air conditioners humming. About 40percent of US power generation comes from gas-fired plants. LSEG projected average gas demand in the Lower 48 states, including exports, would hold around 110.4 bcfd this week and next. Those forecasts were higher than LSEGâ€™s outlook on Tuesday. Average gas flows to the nine big US LNG export plants rose to 17.6 bcfd so far in July, up from 17.4 bcfd in June, but remain below the monthly record high of 18.8 bcfd in April. That increase in average LNG feedgas came despite the reduction in flows to Freeport LNGâ€™s 2.4-bcfd export plant in Texas for planned work from July 10 to late August.

Date: 2026-07-15

Details: Published July 15, 2026 Updated about 6 hours ago By Reuters WASHINGTON: Bank of America exceeded Wall Street estimates for second-quarter profit on Tuesday, as global market chaos fueled record trading, while a corporate dealmaking surge spurred investment banking. The bank also expects full-year 2026 net interest income to grow at the upper end of its previously forecast range of 6 percent to 8 percent, finance chief Alastair Borthwick said. Investors remained cautious and reshuffled portfolios amid volatile markets, as US-Iran tensions fueled concerns over global crude supplies, drove oil prices higher and added to uncertainty around interest rates and persistent inflation. Large investment banks tend to benefit from volatile markets, as their trading desks generate higher revenue from increased client activity. Bank of Americaâ€™s second-quarter sales and trading revenue jumped 33 percent to a record USD 7.1 billion from USD 5.3 billion a year earlier. Chief Executive Officer Brian Moynihan had earlier said that the bank was expecting a 15 percent rise. Equities revenue climbed 70 percent to USD 3.6 billion. â€œOverall, the US economy has proved more durable than expected, supported by the strong consumer, ongoing AI-driven investments across the board and easing energy costs, though inflation and tighter monetary policy remain key risks,â€ said Moynihan in a post-earnings conference call. The bank reported a net income of USD 9.1 billion, or USD 1.21 per share, in the three months ended June 30, compared with USD 7.2 billion, or 90 cents per share, a year earlier. Analysts were expecting a profit of USD 1.13 per share, according to data compiled by LSEG. Shares of the bank, which have gained about 8 percent so far in 2026, were up 2 percent in early trading. The shares have outperformed peers JPMorgan Chase and Wells Fargo so far in 2026. â€œAll said, a really good quarter from BAC, but it seems like the well-rounded results were somewhat understood as shares have rallied +6 percent over the last month,â€ Evercore ISI said in a BofA note, titled â€œCooking like a hot summer day.â€ JPMorgan and Wells Fargo also reported their second-quarter earnings on Tuesday, beating profit estimates on trading and dealmaking strength. THE DEALMAKING BOOM Global mergers and acquisitions, valued at over USD 10 billion, surged to record levels during the first half of 2026, according to LSEG data. The surge was driven by a more lenient regulatory environment that prompted major companies across sectors to seize the opportunity to execute deals. Bank of America Securities acted as a joint book-running manager for the record-breaking USD 2 trillion debut of Elon Muskâ€™s SpaceX, a historic listing that supercharged the US initial public offering market and boosted its rebound in 2026. The bank also acted as a financial advisor for US power company NextEra Energyâ€™s USD 66.8 billion deal to buy Dominion Energy, announced in May. BofAâ€™s total investment banking fees jumped 50 percent to USD 2.1 billion in the second quarter. CEO Moynihan said earlier this quarter that investment banking was in â€œpretty good shapeâ€. â€œThe AI-driven capex super cycle has benefited equity issuance, M&A activity and debt financing, while trading has been helped by Iran-related volatility across asset classes,â€ said Stephen Biggar, director of Financial Services Research at Argus Research. â€œThe USD 2.5 trillion in announced global M&A in the first half of the year is the gift that will keep giving, with banks getting paid as deals close over the next 6-9 months, while the mega-IPO pipeline remains intact for the back half of the year.â€ THE OTHER CATALYST Strong consumer spending underpinned the resilient US economy despite persistent macroeconomic uncertainty, serving as a vital catalyst for lenders. Consumption has supported steady demand for new loans, providing major commercial banks with a stable operational foundation through interest income. The bankâ€™s net interest income (NII) â€” the difference between what it earns on loans and pays out on deposits â€” rose 9 percent to USD 16 billion in the quarter from a year earlier. Average loans and leases rose 8 percent, with growth across every business segment. CFO Borthwick said that the positive forecast for full-year NII growth was supported by anticipated loan and deposit growth, fixed-rate asset repricing and balance sheet optimization. â€œOur strategy is working,â€ Borthwick said in a media call. â€œWe are making disciplined investments, growing organically, gaining market share, maintaining strong operating metrics, and driving higher levels of growth and profitability.â€

Date: 2026-07-15

Details: â€¢ The rally lifted other South Korean semiconductor stocks, with Samsung Electronics rising nearly 8% Published July 15, 2026 Updated 8 minutes ago By Reuters SEOUL: Shares in SK Hynix jumped nearly 13% in Seoul on Wednesday, tracking gains in U.S. tech stocks after softer-than-expected U.S. inflation data, while upbeat analyst views on the outlook for AI memory demand also supported sentiment. The rally lifted other South Korean semiconductor stocks, with Samsung Electronics rising nearly 8%, while chip equipment maker Hanmi Semiconductor gained about 25% in early trade. The S&P 500 and the Nasdaq advanced on Tuesday as solid big bank results and a cooler-than-expected inflation report boosted risk appetite amid rising Middle East tensions. The gains came after weeks of volatility in chip stocks, as investors grappled with concerns over a potential â slowdown in memory earnings growth as quarterly price increases moderate in the second half of 2026. They have also questioned whether signs of slowing capital spending by major U.S. cloud service providers, rising financing needs and recent multi-billion-dollar capacity expansion plans by memory makers could eventually ease the industryâ€™s supply-demand imbalance that has fuelled the chip stock rally. However, some analysts remain optimistic that structural demand from AI applications will keep the market tight. Kim Sunwoo, a senior analyst at Meritz Securities, said suppliers of DRAM chips, used for memory in computers, servers and mobile devices, were currently meeting only about 75% to 80% of demand as shortages intensified in the second half of 2026. That fulfilment rate could fall to the 60% range in 2027, Kim said, adding that â suppliers would still be able to meet only around 70% of demand even after excluding more speculative orders. â€œWith supply shortages set to deepen, memory prices and earnings are likely to continue improving, supporting a strong rebound in the share price,â€ Kim said. Echoing that view, HSBC said in a recent note that improving profitability of AI services should continue to underpin strong cloud spending. SK Hynix to build $51 billion NAND memory chip factory by 2029 The brokerage also said the industryâ€™s shift â toward three- to five-year long-term supply agreements should improve earnings visibility over the next two to three years and reduce earnings volatility. Barclays added to the positive sentiment, initiating research coverage on SK Hynixâ€™s newly listed American Depositary Receipts (ADRs) with an â€œoverweightâ€ rating and a $330 price target. The â ADRs surged nearly 28% to $193.92 on Nasdaq on Tuesday. Goldman Sachs said in a recent note the selloff in South Korean chip stocks had been amplified by the unwinding of positions in newly launched exchange-traded funds that are heavily skewed to one â or two stocks, while the underlying semiconductor cycle remained fundamentally robust. Reuters reported last week that SK Hynix Chief Executive Kwak Noh-jung expected the global memory industry to face its worst-ever supply shortage in 2027, with demand continuing to exceed the companyâ€™s production capacity well beyond 2030 despite aggressive expansion.

Date: 2026-07-15

Details: â€¢ GIFT Nifty futures were trading at 24,042 Published July 15, 2026 Updated 13 minutes ago By Reuters Indian shares are set for a muted start on Wednesday as softer-than-expected U.S. inflation data helped offset concerns over escalating US-Iran tensions, with the two countries exchanging strikes and battling for control of the Strait of Hormuz. GIFT Nifty futures were trading at 24,042, as of 7:58 a.m. IST, indicating the Nifty 50 could open near 24,052.05, the closing level on Tuesday. Brent crude climbed 1.2% to $85.8 a barrel, after US President Donald Trump reimposed a naval blockade on Iranian ports and Tehran retaliated with strikes on US infrastructure in the Middle East. Higher oil prices threaten to widen Indiaâ€™s import bill and fiscal deficit, stoke inflation and squeeze corporate margins, given â the countryâ€™s heavy dependence on imported energy. However, softer-than-expected U.S. inflation in May lifted Wall Street and Asian equities, cushioning risk sentiment. Lower U.S. inflation supports emerging markets such as India by keeping near-term rate-hike risks at bay, easing dollar pressure and encouraging foreign flows into risk assets. Both Nifty 50 and Sensex fell 0.7% each on Tuesday, snapping a three-session winning streak, with investors assessing the June-quarter corporate earnings. â€œWe expect Nifty to extend the recent consolidation in the range of 23,800 to 24,350,â€ said Bajaj Broking Market, adding that higher crude prices is weighing on risk appetite. Foreign institutional investors (FII) were net sellers of Indian stocks on Tuesday, with â outflows at 7.40 billion rupees. Domestic institutional investors (DII) purchased stocks worth 29.28 billion rupees, according to NSEâ€™s provisional data. Among stocks, L&T Technology Services will be in focus after the engineering research and development firm posted an 11.5% rise in its quarterly consolidated revenue. Peer Tata Elxsi could rise after the company reported an 18.2% rise in first-quarter profit, â supported by strong tech spending from global operators, broadcasters and device manufacturers.

Date: 2026-07-15

Details: â€¢ South Korea's chipmaker-heavy KOSPI surged 6% in early trade and Japan's Nikkei rose 0.4%. MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.7% Published July 15, 2026 Updated 15 minutes ago By Reuters SINGAPORE: Asian markets were higher on Wednesday after a surprise slowdown in U.S. inflation scaled back market expectations for interest rate hikes, while oil took a breather as the US scrapped a plan to levy shipping through the Strait of Hormuz. Stellar earnings at Wall Street banks also had investors cheering, though a 25% drop in IBMâ€™s share price, after the technology companyâ€™s revenue forecast missed analyst expectations, showed how stretched and skittish the marketâ€™s rally in AI-related stocks has become. South Koreaâ€™s chipmaker-heavy KOSPI surged 6% in early trade and Japanâ€™s Nikkei rose 0.4%. MSCIâ€™s broadest index of Asia-Pacific shares outside Japan rose 1.7%. In currencies, the US dollar dropped â except against the stubbornly weak yen. Meanwhile, short-end bonds rallied, taking two-year Treasury yields down 11 basis points to 4.19% from Tuesdayâ€™s 17-month high of nearly 4.3%. The US headline consumer price index fell 0.4% in June, its first decline since the COVID-19 pandemic, while annualised core inflation of 2.6% compared with expectations for 2.8%. â€œFor market bulls this is even better than Goldilocks could have imagined,â€ J.P. Morgan analysts said in a client note. â€œInflation (is) lower with positive earnings growth. This print should remove any fears over a July rate hike and may assuage fears on September, too. This sets up the market to move higher and to â broaden as it does so.â€ Market pricing for the chance of a U.S. interest rate hike in July halved to 16%. The euro steadied above $1.14 and the Australian dollar was hanging on to a 0.8% gain and testing $0.70. Brent crude futures steadied around $85.50 a barrel, having gained more than 12% this week on a flare-up in Middle East fighting. U.S. President â Donald Trump reimposed a naval blockade of Iranian ports on Tuesday and threatened to attack power plants and bridges next week unless Iran resumes negotiations to end their conflict, though he scrapped a plan for a 20% fee on â shipping through Hormuz. Overnight the Nasdaq rose 0.9% and the S&P 500 climbed 0.4%. U.S. futures , were slightly higher on Wednesday. Chinese gross domestic product, industrial production and retail sales data will be in focus during â Asian trade ahead of earnings for Europeâ€™s most valuable company, ASML, the worldâ€™s biggest supplier of equipment used to make AI chips. In the US, BNY, Johnson & Johnson and Blackrock report earnings before the morning bell and United Airlines after market close.

Date: 2026-07-15

Details: Published July 15, 2026 Updated about 6 hours ago By Reuters NEW YORK: The S&P 500 and the Nasdaq rose on Tuesday after softer-than-expected inflation data fueled hopes the Federal Reserve could adopt a less hawkish stance on interest rates, while upbeat second-quarter results lifted most of the big bank stocks. The data showed that the consumer price index rose 3.5 percent in June from a year earlier, below Reuters-polled economistsâ€™ forecast of 3.8 percent. Following the report, traders sharply pared back expectations for near-term policy tightening, with a nearly 15 percent chance of a quarter-point rate increase at the Fedâ€™s upcoming meeting, down from 35 percent before the data. â€œAfter todayâ€™s benign core inflation release, it appears less likely that the FOMC (Federal Open Market Committee) will raise rates over the next few meetings,â€ said Jeffrey Roach, chief economist for LPL Financial. â€œHowever, we may still be at an inflection point, given the risk that the energy shock could spill over into other categories of consumer prices.â€ Fed Chairman Kevin Warsh also drew attention during congressional testimony, where he vowed to â€œdo my jobâ€ if challenged by President Donald Trump. The remark marked his most direct comment yet on how he would respond to potential political pressure on the central bank. IBM shares tumbled nearly 25.8 percent after the software and consulting firm forecast preliminary second-quarter revenue below estimates. The move put the stock on track for a one-day drop worse than the 1987 â€œBlack Mondayâ€ crash. Big bank results kick started the second-quarter earnings season on Wall Street. Goldman Sachs gained 7.3 percent after it exceeded second-quarter profit expectations, as dealmaking picked up pace and market volatility due to the Middle East war boosted the equities business to a record. JPMorgan Chase added 1.9 percent after reporting higher second-quarter profit. Bank of America gained 2 percent after beating estimates for second-quarter profit. On the other hand, Wells Fargo and Citigroup eased 2.3 percent and 4 percent, respectively, even after upbeat quarterly results. The S&P 500 financial sector was up 0.6 percent, while technology led the gains with a 1.5 percent rise. At 12:01 p.m. ET, the Dow Jones Industrial Average fell 105.25 points, or 0.20 percent, to 52,393.39, the S&P 500 gained 16.16 points, or 0.22 percent, to 7,531.50 and the Nasdaq Composite gained 185.05 points, or 0.72 percent, to 26,058.23. Nasdaq recovered after the tech-heavy index fell 1.6 percent on Monday.

Date: 2026-07-14

Details: Published July 14, 2026 Updated about 3 hours ago By Recorder Report LAHORE: The local cotton market on Monday remained firm and the trading volume remained satisfactory. Cotton Analyst Naseem Usman told Business Recorder that the rate of cotton in Sindh is in between Rs17,900 to Rs 18,000 per maund ,while Phutti in the province is trading between Rs 8,300 to Rs 8,800 per 40 kilograms. In Punjab, cotton rates stand between Rs18,300 to Rs 18,500 per maund, with Phutti fetching between Rs 8,500 to Rs 9,000 per 40 kilograms. The rate of cotton in Balochistan is in between Rs 17,900 to Rs 18,000 per maund while the rate of Phutti is in between Rs 8,800 to Rs 9,200 per maund Around, 400 bales of Shahdad Pur, 800 bales of Tando Adam, 900 bales of Sanghar were sold at Rs 17.800 per maund, 200 bales of Nawab Shah, 200 bales of Jam Sahab were sold at Rs 17,700 per maund, 200 bales of Hyderabad were sold at Rs 17,800 per maund, 200 bales of Layyah were sold at Rs 18,300 per maund, 200 bales of Jhang, 200 bales of Chichawatni, 200 bales of Rajan Pur, 200 bales of Burewala were sold at Rs 18,200 per maund and 200 bales of Hasil Pur were sold at Rs 18,150 per maund. The Spot Rate remained unchanged at Rs 17,800 per maund. Copyright Business Recorder, 2026 COTTON SPOT RATES KARACHI: Official KCA spot rates for local dealings in Pakistan rupees on Monday, (July 13, 2026).... Published July 14, 2026 Updated about 3 hours ago By Recorder Report KARACHI: Official KCA spot rates for local dealings in Pakistan rupees on Monday, (July 13, 2026). =========================================================================== The kca official spot rate for local dealings in Pakistan rupees --------------------------------------------------------------------------- For base grade 3 staple length 1-1/16" Micronaire value between 3.8 to 4.9 NCL =========================================================================== Rate Ex-gin Upcountry Spot rate Spot rate Difference for price Ex-Karachi ex. Khi. as Ex-karachi on 11-07-2026 =========================================================================== 37.324 KG 17,800 280 18,080 18,080 NIL Equivalent 40 KGS 19,076 300 19,376 19,376 NIL =========================================================================== Copyright Business Recorder, 2026

Date: 2026-07-14

Details: Published July 14, 2026 Updated about 3 hours ago By Recorder Report KARACHI: The Karachi Cotton Association (KCA) has expressed its deep concern that despite decision of the High Court of Sindh dated 18-06-2026, reproduced below, the concerned authorities (Evacuee Trust Property Board) in whose possession the property is, are reluctant to handover the possession of the Cotton Exchange Building a premier landmark, to the Karachi Cotton Association and its legal tenants, which was unlawfully sealed by the authorities concerned on 12-12-2025. â€œâ€¦â€¦.the KCA shall enjoy the possession of property and continue its business activities without any disturbance.â€ The prolonged, seven-month closure of the Cotton Exchange Building and unlawful seizure of the documents and Computers has completely halted the administrative operations of the KCA and paralysed the businesses of its legal tenants, including key cotton traders, merchants, ginners, spinners, exporters and indenters. This ongoing disruption has inflicted severe financial losses on KCA and individual stakeholders and caused significant damage to the national economy, it said. Established since 1933, the KCA holds a unique and irreplaceable position in Pakistanâ€™s agricultural and trade infrastructure. Unlike standard trade bodies, the KCA performs vital regulatory and operational functions, including: 1, Market Regulation: Announcing the official Daily Spot Rates of Cotton. 2, Dispute Resolution: Providing essential arbitration facilities for buyers and sellers. 3, Quality Assurance: Operating specialized cotton sample testing facilities for stakeholders. 4, Capacity Building: Conducting technical training courses to support the cotton trade and textile value chain. 5, Various other vital functions related to Pakistan cotton value-chain. The KCA strongly emphasises that the continued disregard of the Sindh High Courtâ€™s Order dated 18.06.2026 severely undermines institutional operations and disrupts a multi-billion-rupee textile supply chain. The KCA urges upon the authorities concerned (Evacuee Trust Property Board) to immediately hand over the possession of the Cotton Exchange Building along with all documents and belongings to the KCA and its legal tenants in pursuance of Order of Sindh High Court dated 18-06-2026 so that the KCA and its tenants may once again become fully operational and continue to play its pivotal role in Pakistanâ€™s cotton economy to earn much needed foreign exchange for our beloved country. Copyright Business Recorder, 2026

Date: 2026-07-14

Details: â€¢ In a volatile start to the session, MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4%, led by a 2.2% gain for Korean shares. Published July 14, 2026 Updated 13 minutes ago SINGAPORE: Stocks swung between gains and losses and oil hit a one-month high in early Asian trading on Tuesday after President Donald Trump said the U.S. was reinstating its blockade of Iranian shipping in the Gulf and would collect a 20% fee on cargo traversing the Strait of Hormuz. In a volatile start to the session, MSCIâ€™s broadest index of Asia-Pacific shares outside Japan rose 0.4%, led by a 2.2% gain for Korean shares. Japanâ€™s Nikkei 225 was up 0.2%, while S&P 500 e-mini futures nudged 0.1% lower. Brent crude futures climbed 2.6% to $85.50 a barrel, their â highest since mid-June, as trading resumed in Asia. Markets were also rattled by hawkish comments on Monday from Federal Reserve Governor Christopher Waller, who said the U.S. central bank may need to raise interest rates â€œin the near termâ€ if coming data show inflation continuing well above the 2% target. â€œWhile the risk had been building in the system over the past week, markets reacted aggressivelyâ€ to the latest headlines from the Iran conflict, said Chris Weston, head of research at Pepperstone Group Ltd in Melbourne. â€œThe prospect of tighter monetary policy into a potential energy shock is rarely supportive for risk assets.â€ Overnight, stocks on Wall Street sold off and oil futures surged more than 9% as conflict between the United States and Iran re-ignited, once again throttling the â flow of goods through the Strait of Hormuz. The S&P 500 closed 0.8% lower and the Nasdaq Composite fell 1.6%.U.S. CPI data is due for release later on Tuesday, followed by comments from Fed Chair Warsh, who will deliver the central bankâ€™s semi-annual monetary policy report to Congress. Fed funds futures are pricing in an implied 43.3% probability of a 25-basis-point hike at the U.S. central bankâ€™s â next two-day meeting on July 28-29, compared to a 34.2% chance on Friday, according to the CME Groupâ€™s FedWatch tool. The yield on the U.S. 10-year Treasury bond was up 2.2 basis points at 4.6297%. The U.S. dollar index , which measures the greenbackâ€™s strength against a basket of â six currencies, held at 101.29, trading around its highest levels of the month. Gold was down 0.1% at $3,997.27. In Seoul, stocks moved between negative and positive territory on Tuesday as shares in SK Hynix veered between gains and losses, falling as much â as 4.7% in the first few minutes of trading before rallying to trade up to 4.6% higher. The volatility for the memory chipmaker comes after a dramatic plunge a day earlier following its Nasdaq debut last week. In cryptocurrencies, bitcoin was up 0.3% at $62,318.43 while ether moved 0.7% higher to $1,777.63.

Date: 2026-07-14

Details: Published July 14, 2026 Updated about 3 hours ago By Reuters FRANKFURT: European shares were subdued on Monday as investors largely stuck to the sidelines after renewed tensions in the Middle East, while counting on the upcoming earnings season to provide fresh momentum. The pan-European STOXX 600 index was flat at 641.01, after logging its sharpest weekly loss since April on Friday. The latest US-Iran strikes have dimmed hopes for an imminent end to the war, and analysts have cautioned against being too quick to price in a resolution. Oil prices rose over 4.8 percent on Monday. They had settled back to pre-war levels towards the end of June, but have since traded higher due to uncertainty about the conflict. Energy stocks rose 2.2 percent and were the biggest gainers on the STOXX 600, while defence shares slipped 1.4 percent. Travel and leisure stocks lost 1.2 percent and were among the worst-performing sectors, with Lufthansa, Ryanair and TUI falling between 1.1 percent and 4.1 percent. The tech sector also came under pressure, down 0.6 percent, tracking declines in global peers. SK Hynixâ€™s South Korean-listed shares shed 15.4 percent after surging on their Nasdaq debut on Friday. â€œInvestors are looking ahead to the start of the earnings season and the big interest this week is going to be ASMLâ€¦ it will be a big early test for the tech sector,â€ said David Morrison, senior market analyst at Trade Nation. Markets are also contending with shifting interest rate expectations as central banks around the world try to gauge the inflationary impact of higher oil prices. The European Central Bank is expected to deliver at least a quarter-point rate hike this year, according to LSEG-compiled data. â€œTheir job has got a lot harder over the last week or so,â€ said Christopher Tripp, general manager, international, at futures trading platform NinjaTrader. â€œIt would be quite easy to be drawn into a reactionary kind of approach. But from what Iâ€™ve seen, they tend to play the numbers as they come out.â€

Date: 2026-07-14

Details: Published July 14, 2026 Updated about 2 hours ago By Recorder Report KARACHI: The leadership of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged the Ministry of Finance, the Ministry of Commerce, the Federal Board of Revenue (FBR), and the State Bank of Pakistan to form a joint task force with the business community. This task force must proactively evaluate the evolving geopolitical landscape and implement a contingency framework that ensures trade continuity and shelters the local industry from external shocks. Atif Ikram Sheikh, president of the FPCCI, expressed his profound concern over the escalating geopolitical tensions and renewed hostilities between the United States and Iran. Countryâ€™s apex trade body has called upon the federal government and economic policymakers to immediately devise a crisis-response strategy to insulate Pakistanâ€™s fragile economy, trade routes, and industrial sector from the inevitable shockwaves. He emphasized the critical need for proactive macroeconomic management to prevent the derailment of recent stabilization efforts. â€œThe renewed hostilities in our immediate neighborhood pose a severe threat to regional stability, energy supply chains, and global trade dynamics,â€ he added. Atif Ikram Sheikh explained that Pakistanâ€™s economy, which has recently shown encouraging signs of stability with a transition toward fiscal discipline, cannot afford the inflationary pressures of an unexpected oil price shock or disruptions in maritime trade. â€œWe urge the government to immediately engage with the business community to formulate a strategic buffer that secures our energy imports and protects our export-oriented industries from being pushed to the wall,â€ he added. Saquib Fayyaz Magoon, SVP of the FPCCI, highlighted the vulnerability of the nationâ€™s supply chains and the disproportionate impact on the manufacturing sector. Any conflict in the Persian Gulf directly threatens the cost of doing business through skyrocketing freight charges and delayed shipments. â€œOur small and medium enterprises (SMEs) are already grappling with exorbitant energy tariffs and high borrowing costs. A sudden disruption in the availability of essential raw materials or a spike in global fuel prices could push many manufacturers toward default or complete closures,â€ he said. The government must strike a delicate balance by ensuring uninterrupted access to industrial inputs while curbing non-essential foreign exchange outflows, he added. Abdul Mohamin Khan, VP and Regional Chairman (Sindh) of the FPCCI emphasized the localized threat to Sindhâ€™s economy and its manufacturing zones. Karachi, being the premier port city and industrial heartland, is directly in the crosshairs of any turbulence in maritime trade routes. The industries in Sindh are already bearing the brunt of severe economic challenges and high operational costs. â€œWe demand the establishment of fast-track business facilitation centers in every district and immediate coordination between provincial and federal authorities to lower operational frictions at the ports. Our export pipeline must be safeguarded to prevent further widening of the trade deficit,â€ he added. Copyright Business Recorder, 2026

Date: 2026-07-14

Details: â€¢ Brent crude futures climbed $1.68, or 2%, to $84.98 per barrel Published July 14, 2026 Updated 39 minutes ago By Reuters Oil prices rose 2% on Tuesday to their highest in four weeks, as the US reimposed its naval blockade of Iran while the two countries stepped up attacks in the Strait of Hormuz, heightening uncertainty about energy flows. Brent crude futures climbed $1.68, or 2%, to $84.98 per barrel by 0051 GMT, while US West Texas Intermediate crude rose $1.65, or 2.1%, to $79.79 a barrel. Brent crude surged 9.6% in the previous session, its biggest daily gain since May 2020. Oil prices are now at their highest since the two countries signed a memorandum of understanding to end the war on June â 17. Two United Arab Emirates tankers were hit by two Iranian cruise missiles in the southern lane of the Strait of Hormuz in Omani territorial waters, the UAE Ministry of Defence said on Monday, killing one Indian crew member and wounding eight others. Meanwhile, US President Donald Trump told reporters that the United States had reinstated its blockade of Iranian shipping, adding that he wanted the US to be reimbursed for protecting countries that it was helping in the Strait of Hormuz. â€œThe latest escalation, including the U.S. reinstatement of the blockade and Iranian responses, has clearly injected fresh risk â into the market,â€ KCM Trade chief market analyst Tim Waterer said. â€œWhile a full closure hasnâ€™t occurred, the competing objectives of both sides have made the supply picture highly uncertain,â€ he added. U.S. Central Command said it began a third consecutive night of strikes against Iran, while Tehranâ€™s semi-official YJC news agency said early â on Tuesday that seven explosions were heard in the port city of Bandar Abbas and two more on Kish Island. Elsewhere, Yemenâ€™s Houthi movement fired missiles at Saudi Arabia after accusing the kingdom of bombing an airport â under its control on Monday. â€œIf the Houthis extend their attacks to Saudiâ€™s crude products in the Red Sea, it could put (further) uncertainties on crude flows from the region,â€ Simon Wong, â a portfolio manager at Gabelli Funds, said in a note. Meanwhile, U.S. crude oil stockpiles were expected to have fallen last week, while gasoline and distillate stocks likely rose, a preliminary Reuters poll showed on Monday.

Date: 2026-07-14

Details: â€¢ Brent crude futures settled up $7.29, or 9.59%, to $83.30 Published July 13, 2026 Updated about 3 hours ago By Reuters HOUSTON: Oil prices settled up more than 9% on Monday at a one-month high after news that a United Statesâ€™ naval blockade due to begin on Tuesday will cover Iranâ€™s entire coastline, ports and oil terminals, as well as all vessels regardless of flag, reigniting concerns over energy shipments through the Strait of Hormuz. Brent crude futures settled up $7.29, or 9.59%, to $83.30, while US West Texas Intermediate crude settled up $6.73, or 9.42%, to $78.14 a barrel. Brent futures posted their biggest single-day dollar gain since April 2, and highest settlement since June 12. US crude futures, meanwhile, made their largest daily gain since April 29 to settle at their highest since June 15. The US is set to reinstate the naval blockade on July 14 at 2000 GMT, according to the US Navy-led Joint Maritime Information Center. The blockade had been lifted in mid-June. Earlier in the day, President Donald Trump said the United States was reinstating a naval blockade and would be reimbursed 20% on all cargo shipped through the Strait of Hormuz, following renewed military exchanges with Iran.â€œPresident Trumpâ€™s reinstatement of restrictions on Iranian maritime traffic, alongside retaliatory attacks and sharply reduced vessel flows through the strait has intensified concerns over near-term supply availability,â€ said Gelber & Associates analysts in a note. Iranâ€™s top joint military command had earlier said it would not allow Washington to intervene in the management of the strait and any attempt by the US to transit without its authorization would be confronted. The UNâ€™s shipping agency pushed back against Trumpâ€™s proposal, saying it opposes any fees for straits used in international navigation and stressing that there is no legal basis for introducing mandatory tolls on strait transits. Before the conflict began in late February, the Strait of Hormuz handled about one-fifth of global daily oil and liquefied natural gas supplies. Traffic had begun to increase during a fragile ceasefire agreed in June, but had slowed as tensions rose. â€œThe focus will remain on the number of inbound tankers as a lower number could impact production, so currently we see a risk premium and a disruption risk supporting prices,â€ said UBS analyst Giovanni Staunovo. Bypassing the strait As the prospect of long-term disruption looms, analysts expect countries to work on ways to permanently bypass the Strait of Hormuz. Goldman Sachs estimated that expanding pipeline capacity in the Middle East could shield more than 60% of pre-war Gulf oil exports from any future Hormuz disruptions by end-2028. The bankâ€™s base-case forecast assumes pipeline capacity bypassing Hormuz will rise by 3.8 million bpd by end-2027 and 7.3 million bpd cumulatively by end-2028, taking total effective bypass capacity to more than 14 million bpd by end-2028. During the interim peace deal, Tehran increased exports, which has led to an increase in Iranian oil supplies held at sea. Sales have been slow, however, as Chinaâ€™s independent refiners have turned to cheaper crude from Iraq, the UAE and Qatar. The Abu Dhabi National Oil Company set the August official selling price of its benchmark Murban crude at $80.01 a barrel, it said on Monday, down from $101.48 a barrel the month before. Disruptions in Russia Russian energy supplies have also been disrupted as Ukraine seeks to cut off funding for Moscowâ€™s war effort. Ukraineâ€™s Security Service said it struck an oil depot in Russiaâ€™s Stavropol region overnight, as well as three storage tanks at an oil-loading site in the port of Kavkaz in the southern Russian region of Krasnodar. Meanwhile, the Caspian Pipeline Consortium, which accounts for 80% of Kazakhstanâ€™s oil exports, cut supplies by 7% last month from May as a result of maintenance at the countryâ€™s largest oilfield, Tengiz, as well as lower Russian flows, two industry sources said on Monday. Elsewhere, stocks of crude oil in the US Strategic Petroleum Reserve fell by about 3 million barrels to 316.5 million barrels last week, the lowest level since April 1983, according to data from the Department of Energy. The drawdowns are a part of a US agreement to release 172 million barrels from the facility.

Date: 2026-07-13

Details: Written by Faisal Shahnawaz in Automotive, Taxation Finance Act 2026 also grants sales tax relief on specified maritime vessels and equipment to support shipping and logistics ISLAMABAD: The Federal Board of Revenue (FBR) has introduced a sales tax exemption on the import of bulletproof vehicles for specified government purposes under the Finance Act, 2026, providing tax relief for security-related imports and selected maritime vessels. The exemption has been incorporated into the Sales Tax Act, 1990 and applies to bulletproof vehicles imported by the federal or provincial governments for the protection of public officeholders facing terrorism-related threats. Under the amended law, the concession will be available only where the security threat has been assessed by the Ministry of Interior and Narcotics Control, and the import has received prior approval from the federal government. The Finance Act also extends the exemption to bulletproof vehicles imported by the federal government for logistical arrangements relating to the Shanghai Cooperation Organization (SCO) Summit. In such cases, imports must obtain prior approval from both the Ministry of Foreign Affairs and the Ministry of Interior and Narcotics Control before qualifying for the sales tax exemption. Sales tax relief for maritime sector In addition to the security-related measures, the Finance Act, 2026 provides sales tax exemptions on the import of several categories of maritime vessels and equipment to support Pakistanâ€™s shipping and maritime industries. The exemption applies to the import of: â€¢ Tankers; â€¢ Dredgers; â€¢ Floating or submersible drilling or production platforms; â€¢ Other floating structures and vessels; and â€¢ Cargo vessels used for the transportation of goods, excluding cruise ships, excursion boats, similar passenger vessels and ferry boats. According to the amended law, the quantity of vessels and related equipment eligible for the exemption must be approved by the Ministry of Maritime Affairs. The latest tax measures form part of the governmentâ€™s broader fiscal reforms under the Finance Act, 2026, aimed at facilitating government security operations, supporting international diplomatic engagements and promoting investment in Pakistanâ€™s maritime and shipping sectors through targeted tax incentives.

Date: 2026-07-13

Details: Written by Hamza Shahnawaz in Budget 2026-27, Taxation Finance Act 2026 broadens aviation tax exemption beyond PIA to all airlines registered in Pakistan from July 2026 ISLAMABAD: The federal government has expanded sales tax relief for Pakistanâ€™s aviation sector by extending the exemption on the import and lease of aircraft and aircraft parts to all airlines registered in the country, replacing an earlier proposal that restricted the concession to the national flag carrier. The measure has been introduced through the Finance Act, 2026, which amends the Sales Tax Act, 1990 and broadens the scope of tax relief across the aviation industry. Under the original Finance Bill, 2026, the exemption was proposed exclusively for Pakistan International Airlines Corporation Limited (PIACL). However, the final legislation extends the concession to every airline company registered in Pakistan, ensuring equal tax treatment for all eligible operators. According to the amended law, the exemption applies to the import or lease of aircraft and aircraft parts by any airline registered in Pakistan. The concession will take effect from July 1, 2026. The Finance Act also retains the existing exemption for Pakistan International Airlines Corporation Limited (PIACL), allowing the national carrier to continue importing or leasing aircraft and related parts without the levy of sales tax. To safeguard against misuse, the legislation requires customs authorities to ensure that imported aircraft parts, materials and articles are restricted to quantities reasonably required for the operation and maintenance of aircraft operated by the importing airline. In addition, the law stipulates that ground handling equipment, service and operational vehicles, catering equipment and fuel trucks imported under the exemptionâ€”provided they are not manufactured locallyâ€”must be used exclusively within airport premises. The expansion of the exemption is expected to lower the cost of fleet acquisition, maintenance and operational upgrades for Pakistanâ€™s airlines, potentially encouraging investment in modern aircraft and supporting the long-term development of the countryâ€™s aviation industry. The move forms part of the governmentâ€™s broader fiscal measures under the Finance Act, 2026 aimed at promoting investment, improving competitiveness and facilitating growth in key sectors of the economy.

Date: 2026-07-13

Details: Written by Hamza Shahnawaz in Taxation, Top stories Ombudsman rules recovery became unlawful after appellate authority set aside the original sales tax assessment ISLAMABAD: The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to immediately restore a taxpayerâ€™s attached bank account and process a sales tax refund, ruling that the legal basis for the recovery ceased to exist once the original assessment order was set aside on appeal. According to an FTO order issued on July 7, 2026, the complaint was filed by M/s Horizon Alloys (Pvt) Ltd against the Revenue Division over the alleged unlawful recovery of funds through bank attachment, delay in implementing the appellate order, and failure to refund the recovered amount despite the assessment being overturned. Assessment led to recovery of Rs24.51 million The company stated that the Deputy Commissioner Inland Revenue (DCIR), Unit-01, Zone-III, Corporate Tax Office (CTO) Karachi, passed an ex-parte assessment order under Section 11E of the Sales Tax Act, 1990 on May 21, 2025. The order created a sales tax demand of Rs21.29 million, imposed an equivalent amount as penalty, and resulted in the recovery of Rs24.51 million through attachment of the companyâ€™s bank account. According to the taxpayer, the assessment was based solely on purchases made from Three Star Oil Traders, a supplier that was subsequently suspended or block listed, even though the transactions had been carried out while the supplier was in active status. The company further pointed out that the supplierâ€™s registration was restored by the tax authorities on June 26, 2025, but the recovered amount was not refunded. Appeal set aside assessment The Commissioner Inland Revenue (Appeals-VII), Karachi set aside the assessment order on March 25, 2026, directing the tax department to conduct fresh adjudication after providing the taxpayer with a reasonable opportunity of being heard. Following the appellate decision, the company filed a refund application under Section 66 of the Sales Tax Act, 1990, and requested early disposal of the remand proceedings. However, it alleged that the department failed to take any action. In its reply, CTO Karachi maintained that appeal-effect proceedings were in progress and argued that the law allowed the department until June 30, 2028, to complete the reassessment. The department contended that there was no legal requirement to expedite the proceedings. FTO rejects departmentâ€™s stance Rejecting the departmentâ€™s objections, the Federal Tax Ombudsman held that once the appellate authority had set aside the assessment order, the original order ceased to have legal effect. The Ombudsman observed that the bank attachment and recovery were entirely dependent upon the existence of that assessment order. Consequently, once the order was annulled, the legal authority to retain the recovered amount also disappeared. The FTO further ruled that the tax department could not continue withholding the recovered funds merely because a fresh tax demand might arise after completion of the reassessment. According to the order, the Rs24.51 million recovered through bank attachment is refundable under Section 66 of the Sales Tax Act, 1990, and payment of the refund would not prejudice the departmentâ€™s right to complete reassessment proceedings within the statutory timeframe. FTO issues directions to FBR The Ombudsman recommended that the FBR instruct the Commissioner Inland Revenue, Zone-III, CTO Karachi, to immediately detach the taxpayerâ€™s bank account and issue an appeal-effect order in accordance with the appellate decision. The FTO also directed the Commissioner Refund, CTO Karachi, to decide the taxpayerâ€™s refund application strictly on merit and in accordance with the law, while requiring the department to submit a compliance report within 45 days.

Date: 2026-07-13

Details: Written by Hamza Shahnawaz in Taxation, Top stories Tax Expenditure Report 2026 says conservative benchmark avoids overstating the fiscal cost of corporate tax concessions. ISLAMABAD: The Federal Board of Revenue (FBR) has explained why it applies a 24.5 per cent benchmark tax rate for non-banking companies when estimating corporate tax expenditures, despite data showing that companies paid a considerably higher effective tax rate during the latest tax year. The explanation, contained in the Tax Expenditure Report 2026, outlines the methodology used by the FBR to calculate the fiscal cost of tax exemptions, concessions and incentives granted under Pakistanâ€™s tax laws. Benchmark Rates Based on Tax Law According to the report, benchmark income tax rates are derived from the statutory provisions of the Income Tax Ordinance, 2001. Individual taxpayers are assessed using the applicable income tax slabs, while taxpayers reporting losses are assigned the 1.25 per cent minimum tax under Section 113 of the ordinance. Export income is benchmarked at 1 per cent for the purpose of estimating tax expenditures. For banking companies, the FBR applies a 39 per cent benchmark rate, reflecting both the corporate income tax and the super tax imposed under Section 4C of the Income Tax Ordinance. Why Non-Banking Companies Are Benchmarked at 24.5% The methodology differs for non-banking companies. The FBR uses an average benchmark tax rate of 24.5 per cent, explaining that companies outside the banking sector are subject to different statutory tax rates depending on their industry, business size and applicable tax provisions. According to the report, the lower benchmark has been adopted as a conservative measure to avoid overstating the fiscal cost of corporate tax incentives and concessions. Corporate Tax Data Shows Higher Effective Rate The report also reveals that an analysis of corporate income tax returns for Tax Year 2025 produced a substantially higher effective tax burden than the benchmark used for tax expenditure calculations. According to the FBR, non-banking companies reported taxable income of approximately Rs3.57 trillion and net tax chargeable of nearly Rs1.68 trillion, resulting in a raw effective tax rate of 46.94 per cent. However, the tax authority said this figure is significantly influenced by the minimum tax regime under Section 113, which requires companies to pay 1.25 per cent of turnover even when they do not earn taxable profits. Based on aggregate corporate turnover of around Rs52.29 trillion, the FBR estimated that minimum tax contributed approximately Rs653.6 billion to total corporate tax collections. After excluding the minimum tax component, the effective corporate income tax rate falls to approximately 28.6 per cent, which the FBR said broadly corresponds with the statutory corporate tax rate of 29 per cent. Conservative Approach to Tax Expenditure Estimates Despite the higher effective corporate tax rate, the FBR has retained the 24.5 per cent benchmark for estimating tax expenditures. The report states that the lower benchmark provides a conservative basis for calculating the fiscal cost of tax concessions and reduces the risk of overstating the value of exemptions and incentives available to companies. The methodology forms part of the FBRâ€™s broader effort to align Pakistanâ€™s tax expenditure reporting with international practices while providing policymakers with a more transparent assessment of the revenue forgone through targeted tax relief measures. The disclosure comes at a time when Pakistan is pursuing fiscal reforms aimed at broadening the tax base, rationalising tax exemptions and strengthening domestic revenue mobilisation, making accurate measurement of tax expenditures increasingly important for tax policy and budget planning.

Date: 2026-07-13

Details: Written by Hamza Shahnawaz in Taxation Tax Expenditure Report 2026 says separate estimates do not reflect the total revenue impact of removing all tax concessions. ISLAMABAD: The Federal Board of Revenue (FBR) has clarified that the estimated fiscal cost of individual tax expenditure provisions cannot simply be added together to determine the total revenue the government would generate by abolishing all tax concessions. According to the Tax Expenditure Report 2026, each tax expenditure is calculated independently on the assumption that every other provision of the tax system remains unchanged. As a result, the sum of individual estimates does not represent the actual revenue that would be realised if all exemptions, deductions, tax credits and other concessions were withdrawn simultaneously. Independent Estimates The FBR explained that every tax expenditure included in the report is assessed on a standalone basis rather than as part of a broader package of tax measures. This methodology is intended to estimate the fiscal cost of each individual provision while assuming that the remainder of the tax system continues to operate without any changes. The report cautioned that adding these separate estimates together would produce misleading results because it ignores the interaction between different tax provisions. Progressive Tax Structure One of the principal reasons identified by the FBR is Pakistanâ€™s progressive income tax system, under which higher levels of taxable income are subject to higher tax rates. According to the report, multiple deductions and exemptions can reduce a taxpayerâ€™s taxable income sufficiently to place them in a lower tax bracket. If all tax concessions were abolished at the same time, the taxpayer could move into a higher tax bracket, resulting in a larger tax liability than indicated by the separate estimates for each individual concession. Interaction Between Tax Benefits The FBR also highlighted that many tax expenditure provisions are interconnected. Some tax benefits exist only because other exemptions or concessions are available. Consequently, estimating each provision independently may lead to an element of double counting if the figures are aggregated. The report notes that these interactions between different tax provisions are not incorporated into the individual estimates presented in the Tax Expenditure Report. Estimates Intended as a Policy Guide The FBR emphasised that the figures published in the report should be viewed as approximate estimates of the fiscal cost of individual tax expenditure provisions rather than precise projections of the additional revenue that would be generated by eliminating all tax concessions simultaneously. According to the tax authority, the methodology is designed to improve transparency by measuring the cost of specific tax preferences while recognising that interactions within the tax system make it impractical to derive a comprehensive revenue estimate by simply adding together the value of individual tax expenditures.

Date: 2026-07-13

Details: Written by Hamza Shahnawaz in Taxation New three-tier methodology accounts for embedded sales tax in supply chains to provide a more accurate estimate of tax expenditure. ISLAMABAD: The Federal Board of Revenue (FBR) has introduced a revised methodology for estimating sales tax expenditure on exempt local supplies, adopting differentiated adjustment factors that reflect the level of embedded taxation within different supply chains. The new approach, detailed in the Tax Expenditure Report 2026, aims to provide a more accurate estimate of revenue forgone from sales tax exemptions by recognising that a portion of sales tax is already collected at earlier stages of production and distribution. Embedded Tax Recognised in Supply Chains According to the FBR, suppliers of exempt goods are not required to charge output sales tax on their sales. However, they are generally unable to claim input tax credits for sales tax paid on taxable goods and services used during production, processing, transportation, storage and distribution. As a result, part of the sales tax remains embedded in the cost of the exempt goods and is ultimately passed on to consumers through the final selling price. To avoid overstating the fiscal cost of exemptions, the FBR has introduced adjustment factors that account for taxes already collected at upstream stages of the supply chain before estimating the net tax expenditure. The report states that the standard sales tax rate of 18 per cent will first be applied to the gross value of exempt local supplies. The relevant adjustment factor will then be used to estimate the actual tax expenditure attributable to the exempt transaction. The FBR clarified that imported exempt goods are excluded from this adjustment mechanism because the tax expenditure arises directly at the import stage, where sales tax would otherwise have been collected. Three-Tier Adjustment Framework The revised methodology divides exempt local supplies into three categories based on the characteristics of their supply chains. Tier 1: Essential Food and Agricultural Inputs The first category carries an adjustment factor of 30 per cent and covers staple food commodities and key agricultural inputs. These include fertilisers, pesticides, certified seeds, cereals, pulses, fruits, vegetables, milk, livestock products and other essential food items. According to the FBR, these products typically pass through extensive production, transportation, storage, packaging and distribution processes before reaching consumers. Since significant sales tax is already embedded during these stages, only a relatively small portion of the potential tax expenditure is associated with the final exempt supply. Tier 2: Healthcare Products The second category applies an adjustment factor of 40 per cent to pharmaceutical products, medicines, medical devices, dialysis equipment, cardiology products and other healthcare-related supplies. The FBR noted that these industries involve specialised manufacturing, regulatory compliance, technical processing and controlled distribution networks. While embedded taxation remains substantial, a greater proportion of the overall tax expenditure is attributable to the exempt supply compared with essential food products. Tier 3: Other Exempt Goods The third category applies an adjustment factor of 70 per cent to all other exempt locally supplied goods not covered by the first two categories. The FBR said this factor is consistent with the methodology adopted in previous editions of the Tax Expenditure Report. Revised Methodology Under the new framework, exempt supplies will first be classified according to the relevant tier. Sales tax at the standard rate of 18 per cent will then be calculated on the gross value of the exempt supplies before applying the appropriate adjustment factor. The resulting adjusted values will be aggregated to determine the net sales tax expenditure arising from exemptions on locally supplied goods. According to the FBR, the revised methodology improves transparency and aligns tax expenditure estimates more closely with economic reality by recognising that a portion of the tax burden has already been collected and embedded within the supply chain before the exempt transaction takes place.

Date: 2026-07-13

Details: Written by Hamza Shahnawaz in Taxation Audit says thousands of taxpayers escaped penalties for late sales tax returns and delayed tax payments ISLAMABAD: The Federal Board of Revenue (FBR) failed to impose and recover Rs3.54 billion in FBR penalties and default surcharges from thousands of taxpayers who either filed sales tax returns late or delayed payment of sales tax, according to the latest audit report of the Auditor General of Pakistan (AGP). The audit found that the irregularity involved 9,582 taxpayers across 19 FBR field offices during the audit of fiscal years 2022-23 and 2023-24. AGP Highlights Weak Enforcement Under Sections 33 and 34 of the Sales Tax Act, 1990, taxpayers who fail to submit sales tax returns by the due date are liable to a Rs10,000 penalty. Taxpayers found to have knowingly or fraudulently made false statements face a penalty of Rs25,000 or 100% of the tax involved, whichever is higher. Registered persons who fail to pay sales tax within the prescribed period are also required to pay a default surcharge in addition to the outstanding tax. According to the AGP, the FBR did not impose the required penalties and default surcharges despite taxpayers failing to file returns on time, submitting late returns or depositing sales tax after the due date. The audit further observed that the tax authority did not initiate legal proceedings against the registered persons, resulting in the non-imposition and non-recovery of FBR penalties and default surcharges amounting to Rs3.535 billion. The audit observations were communicated to the department between February and November 2023. FBR Response In its reply, the FBR stated that recovery proceedings involving Rs47 million were in progress, while legal proceedings had been initiated for cases involving Rs3.036 billion. The tax authority added that cases worth Rs215.37 million were under adjudication, whereas no response had been provided in cases involving Rs236.83 million. During meetings held between July 2024 and January 2025, the Departmental Accounts Committee (DAC) directed the FBR to expedite recoveries, complete pending legal and adjudication proceedings, and submit comprehensive replies for cases where no response had been furnished. However, the AGP noted that no further progress had been reported by the time the audit report was finalised. AGP Recommendations The Auditor General recommended that the FBR accelerate the recovery of outstanding penalties and default surcharges, conclude pending legal and adjudication proceedings, and strengthen enforcement of the sales tax regime to ensure timely filing of returns and prompt payment of taxes. The report stressed that stronger compliance measures are necessary to improve tax administration and prevent revenue losses arising from delayed filing and payment of sales tax obligations.

Date: 2026-07-13

Details: Written by Faisal Shahnawaz in Taxation Reduced import duties on sugar confectionery and white chocolate are expected to lower costs, boost market competition, and increase consumer demand across Pakistan. The Federal Board of Revenue (FBR) has announced a major reduction in the regulatory duty (RD) imposed on imported candies and sweets, cutting the rate by 50 percent under the tariff schedule for the fiscal year 2026-27. The revised customs duty structure came into effect on July 1, 2026, following the issuance of a new Statutory Regulatory Order (SRO). According to the updated tariff schedule, the regulatory duty on imported sugar confectionery products, including white chocolate that does not contain cocoa, under PCT code 17.04, has been reduced from 40 percent to 20 percent. The move is part of the governmentâ€™s broader tariff reforms aimed at rationalizing import duties and improving market competitiveness. Sugar confectionery products include a wide range of sweet treats commonly consumed as snacks, such as candies, lollipops, toffees, chewing sweets, and other sugar-based products. These items are manufactured using sugar, syrups, and various flavoring ingredients and are widely popular among children and young consumers. The latest SRO revises the regulatory duty rates applicable to several imported confectionery products categorized under the Pakistan Customs Tariff (PCT). Industry observers believe the reduction could lower the cost of imported sweets and create greater competition within the confectionery market. Market analysts suggest that demand for imported candies and sweets in Pakistan has been gradually increasing, driven by changing consumer preferences, expanding retail networks, and the growing popularity of international confectionery brands. The reduction in regulatory duty is expected to make imported products more affordable, potentially encouraging higher sales volumes in supermarkets, convenience stores, and online retail channels. The duty cut may also benefit distributors and importers by reducing overall import costs and improving profit margins. Consumers could see a wider variety of confectionery products becoming available at more competitive prices in the coming months. However, the move may intensify competition for local confectionery manufacturers, who could face pressure from lower-priced imported alternatives. The overall impact on the market will depend on exchange rate trends, import volumes, and the extent to which importers pass on cost savings to consumers.

Date: 2026-07-13

Details: Published July 13, 2026 Updated about 3 hours ago By Naseem Usman KARACHI: The domestic cotton market maintained overall price stability this week, with the spot rate holding firm at Rs 17,800 per maund and trading volume showing improvement, even as futures prices on the New York cotton exchange fluctuated and a deepening crisis among ginning factories cast a shadow over the sector. According to Musaib Adil, the persistent instability in cotton pricing has discouraged ginners from purchasing seed cotton (phutti), forcing several ginning factories to operate only partially while a considerable number have shut down entirely. Industry observers say the situation could worsen unless prices stabilize further and demand from ginners picks up. Compounding the challenge, cotton growers in Sindh are grappling with a severe shortage of water and rainfall, which has begun to affect both the quality and yield of the crop. The lint output extracted from seed cotton, known locally as â€œkan,â€ has also registered a decline, raising fresh concerns about the provinceâ€™s overall cotton output for the season. Weighing in on broader agricultural policy, former Finance Minister Dr Qaiser Bengali criticized the practice of establishing sugar mills in cotton-growing regions, arguing that cotton carries far greater economic significance than sugar. He urged authorities to relocate sugar mill projects to areas situated closer to rivers, rather than encroaching on land historically reserved for cotton cultivation. Meanwhile, the long-running dispute over the Cotton Exchange Building in Karachi remains unresolved. Affected stakeholders say the Federal Investigation Agency (FIA) continues to occupy the building in defiance of a clear ruling issued by the Sindh High Court, prolonging uncertainty for those associated with the historic trading venue. Separately, the production estimates released by the Federal Committee on Agriculture (FCA) have come under sharp criticism from industry stakeholders. Ehsan-ul-Haq warned that unrealistic projections for the 2026-27 fiscal year risk undermining Pakistanâ€™s credibility in international cotton markets, calling for more accurate and transparent data collection. On a more optimistic note, experts suggested that cotton production in Pakistan could be significantly boosted through technical cooperation with China. However, the Sindh Abadgar Board voiced growing concern over the recent decline in seed cotton prices, warning that continued weakness could further discourage growers ahead of the coming season. Cotton prices in the local market remained largely stable over the past week, registering a modest increase of 200 to 300 rupees per maund as textile mills stepped up purchasing activity relative to the available supply of seed cotton (phutti). Trading volume improved during the week, while New York cotton futures also posted gains, reflecting a broader firming trend in the market. Despite the steady pricing, concerns are mounting over the condition of the cotton crop in Sindh province, where growers urgently require water and rainfall to sustain output. Prevailing intense heat has begun to take a toll on both the quantity and quality of the crop. Industry sources report that this yearâ€™s cotton from Sindh is of comparatively lower quality than in previous seasons, with shorter staple length and reduced micronaire value, though some improvement cannot be ruled out as the season progresses. By contrast, cotton quality in Punjab province is reported to be somewhat better than that of Sindh. Regionally, cotton in Sindh traded between 17,700 and 17,800 rupees per maund, with seed cotton fetching 8,200 to 8,800 rupees per 40 kilograms. In Punjab, cotton prices ranged from 18,200 to 18,400 rupees per maund, while seed cotton sold between 8,300 and 9,000 rupees per 40 kilograms. In Balochistan, cotton prices stood at 17,700 to 17,800 rupees per maund, with seed cotton priced between 8,800 and 9,200 rupees per 40 kilograms. Meanwhile, the Spot Rate Committee of the Karachi Cotton Association maintained the spot rate unchanged at 17,800 rupees per maund. New York cotton futures registered a relative increase this week, trading between 78 and 82 American cents per pound, according to Karachi Cotton Brokers Forum Chairman Naseem Usman, who cited the latest data from the United States Department of Agricultureâ€™s weekly export and sales report. The report showed that 66,400 bales were sold for the 2025-26 marketing year. Vietnam emerged as the leading buyer, purchasing 23,500 bales, followed by India in second place with 23,400 bales and Mexico in third with 10,400 bales. Pakistan ranked sixth among buyers, having purchased 3,300 bales during the period. For the upcoming 2026-27 season, sales reached 87,000 bales, with Vietnam once again leading the way by acquiring 48,700 bales. Turkey followed in second position with 30,800 bales, while Japan secured third place with 2,400 bales. On the export front, total shipments amounted to 230,100 bales. Vietnam remained the top destination, importing 85,400 bales, while Pakistan followed in second place with 42,800 bales. Turkey rounded out the top three importers, receiving 23,900 bales. Cotton stakeholders have questioned the credibility of the Federal Committee on Agricultureâ€™s (FCA) production estimates for the 2026-27 cotton season after the committee projected Sindhâ€™s per-acre cotton yield to be 63 percent higher than Balochistanâ€™s and 41pc higher than Punjabâ€™s, despite Balochistan historically recording the countryâ€™s highest yields. Expressing surprise over the figures, Cotton Ginners Forum chairman Ehsanul Haq said the FCA, an attached body of the Ministry of National Food Security and Research, had once again issued, what he termed unrealistic projections for national cotton production and provincial yields. According to the FCAâ€™s estimates for crop year 2026-27, Pakistan is expected to produce 9.643 million bales of cotton. The committee has projected Punjab to cultivate cotton on 3.2m acres, producing five million bales with an average yield of 1.60 bales per acre. For Sindh, the FCA has estimated cotton cultivation over 1.486m acres, producing 4.042m bales with an average yield of 2.72 bales per acre. Balochistan, meanwhile, has been projected to cultivate cotton on 604,250 acres with an average yield of only one bale per acre. Haq termed the figures â€œhighly unrealisticâ€, arguing that Balochistan has consistently achieved the highest per-acre cotton yields in Pakistan due to its favourable climatic conditions, lower environmental pollution and limited sugarcane cultivation. He said cotton produced in Balochistan is widely regarded as superior in quality, with its lint fetching Rs500 to Rs700 more per maund than cotton from Punjab and Sindh. Cottonseed and cottonseed oil from the province also fetch higher prices in the market, he added. He wonders how the FCA could project Sindhâ€™s average yield to be 63pc higher than Balochistanâ€™s and 41pc higher than Punjabâ€™s, saying such estimates did not reflect ground realities. He also criticised the FCAâ€™s forecasting record, pointing out that the committee had fixed a national production target of 10.18m bales for crop year 2025-26, including 5.553m bales for Punjab and 4.042m bales for Sindh. However, he says, the actual production during the season stood at only 5.524m bales across the country, with Punjab producing 2.718m bales and Sindh 2.807m bales, highlighting what he describes as a significant gap between official projections and actual output. He urged the FCA to adopt realistic, field-based assessments, instead of issuing what he described as â€œdrawing-room estimatesâ€, warning that inaccurate production figures could damage Pakistanâ€™s credibility in international markets and create uncertainty for cotton stakeholders in planning procurement, imports, exports and overall marketing Pakistanâ€™s cotton sector, having posted its lowest output in three decades last season with just 5.6 million bales harvested, still holds significant untapped potential that could be unlocked through better crop management and deeper collaboration with China, industry officials said this week. Speaking at a meeting held at the Secretariat of the Pakistan-China Joint Chamber of Commerce and Industry (PCJCCI), Commercial Ambassador Adeel Munawar said the sectorâ€™s decline is not due to a lack of capacity but to slow adoption of science-based farming practices. He noted that Pakistan continues to benefit from strong genetic resources, extensive cultivation areas, experienced farmers, and a large textile industry that remains heavily reliant on domestically grown cotton. Munawar said timely sowing, balanced fertilizer application, efficient irrigation, integrated pest management, disease and weed control, growth-stage-based decision making, and careful harvesting could substantially improve boll formation, fibre quality, and overall yield. Citing research trials in Punjab and Sindh, he said differences in crop management, rather than climate alone, are chiefly responsible for yield gaps between neighbouring farms growing identical cotton varieties. Fields that maintain balanced nitrogen levels, avoid over irrigation, and act early against whitefly and pink bollworm infestations, he said, consistently outperform others. He added that because cotton is highly sensitive to temperature, humidity, and day length, understanding local climatic conditions is essential to successful crop planning. On prospects for bilateral cooperation, Munawar said Pakistani cotton varieties are notably heat-tolerant, while Chinese varieties are known for high yield and superior fibre quality, making the two countriesâ€™ genetic resources complementary for joint breeding programs. He revealed that Pakistan and China are planning to introduce new cotton seed varieties in Pakistan before selecting the most suitable ones for commercial cultivation, describing the move as an important step in deepening cotton-sector cooperation between the two countries. He added that Xinjiang Agricultural University has for several years been collaborating with Pakistani universities on cotton cultivation research, with experimental fields already established in Faisalabad and trials underway to test mechanical harvesting under local conditions. Close cooperation between the two countries in research, seed development, mechanization, and modern farming technology, he said, would play a key role in raising cotton productivity on both sides. PCJCCI Secretary General Salahuddin Hanif said a new Biotechnology Centre of Excellence laboratory is being established at the Central Cotton Research Institute (CCRI) to strengthen research and promote technological progress in the sector. Separately, the Sindh Abadgar Board expressed concern over falling prices of raw cotton (phutti), warning that landowners are increasingly turning away from cotton cultivation as a result. The Sindh Abadgar Board has expressed concern over the sharp decline in cotton prices, heavy losses suffered by mango growers and continuous increase in agricultural input costs, urging the government to take immediate measures to support farmers. The concerns were raised during a meeting of the board chaired by Mahmood Nawaz Shah in Hyderabad. The meeting noted that the price of seed cotton had dropped from around Rs11,500 per 40 kilogrammes to below Rs7,900 within the last month, even before the cotton harvesting season had reached its peak. Growers expressed the fear that the prices could fall further as arrivals increased, causing significant financial losses to cotton farmers. The participants also described the 2026 mango season as one of the worst in more than a decade. They said mango orchards were severely affected by malformation attacks forcing farmers in some areas to spray pesticides more than five times without achieving satisfactory results. The reduced production, coupled with lower market prices and higher production costs, had resulted in heavy losses with some growers reportedly considering cutting down their orchards, it was said. Copyright Business Recorder, 2026

Date: 2026-07-13

Details: Published July 13, 2026 Updated about 3 hours ago By Reuters NEW YORK: An eventful coming week of economic data, corporate earnings reports and Middle East developments will test a resilient US stock market that has indexes around record highs despite turbulence beneath the surface. The S&P 500 was on course for a second straight weekly gain as of Thursday, putting the benchmark index up 10 percent for the year and about 1 percent from its record close from early June. The weekly strength overcame big swings in market-leading semiconductor shares and a flare-up in tensions between the US and Iran that put risks tied to the four-month-old war and related energy price spikes back at the forefront for investors. Major banks will kick off a second-quarter earnings season for US companies that is expected to be strong. Several key economic reports are due, led by the US consumer price index, an inflation gauge that could recalibrate market expectations for interest rates. â€œYouâ€™ve got a number of crosscurrents from geopolitical headlines, the start of earnings season, some CPI data on the horizon and some skepticism around the AI trade,â€ said Michael Reynolds, vice president of investment strategy at Glenmede. â€œIt just seems like a lot of factors coming to a head all at once.â€ Investorsâ€™ belief in a relatively short-lived Middle East conflict, combined with a blowout first-quarter earnings season, helped boost stocks over the past few months. Oil prices jumped this week amid concerns over the impact of the renewed attacks on shipping and global supplies. Brent crude was last around USD76 a barrel, far from the USD100 level reached earlier this year that is seen as more worrisome for markets broadly. Still, investors said they would be attuned to developments in Iran, including the fallout for shipping and any expansion of the war in the region. â€œItâ€™s a very difficult environment to make strategic investment calls when the situation â€¦ in Iran is so fluid,â€ said King Lip, chief strategist at BakerAvenue Wealth Management in San Francisco. The pullback in oil prices in recent weeks could mitigate the need for global central banks to raise interest rates to control inflation. For the US Federal Reserve, â€œwhat happens to the price of oil may determine the level of the urgency of the next rate hike â€” i.e., whether it comes in September or October,â€ Macquarie strategists said in a note on Thursday. The CPI report for June, due on Tuesday, also could ratchet up pressure on the Fed to act to control inflation. The core measure of CPI, which strips out energy prices, will be in focus, including the extent to which this yearâ€™s rise in oil prices may be filtering through to inflation more broadly, investors said. â€œIf we get hotter inflation or we see signs that inflation will remain elevated for the next few months, it could push odds of a rate increase higher by year end,â€ said Anthony Saglimbene, chief market strategist at Ameriprise. Another inflation gauge, the producer price index, comes a day after the CPI report. Monthly retail sales on Thursday will provide a view into the strength of consumer spending. Higher interest rates can pressure equities by raising borrowing costs for consumers and companies. Investorsâ€™ bets on impending rate hikes rose following a surprisingly hawkish Fed meeting last month, the first under new Chair Kevin Warsh. Minutes of that meeting released this week showed policymakersâ€™ mounting concerns about inflation. Warsh himself is expected to deliver his first testimony on monetary policy before Congress this week. JPMorgan Chase and Goldman Sachs are among the major banks reporting on Tuesday, setting the tone for a quarterly reporting season expected to show exceptional overall US profit growth. The bank reports could provide insight into consumer strength, through credit card products, and into broader credit trends. Reports are also due this week from such high-profile companies as Netflix, BlackRock and Johnson & Johnson. S&P 500 earnings are expected to jump 23.4 percent in the second quarter from a year ago, according to LSEG IBES.

Date: 2026-07-11

Details: Published July 11, 2026 Updated about 3 hours ago By Sohail Sarfraz ISLAMABAD: The Appellate Tribunal, Inland Revenue, Lahore, has held that Super Tax, while being an independent charge for levy and computation, still qualifies as â€œtax due under the Income Tax Ordinance, 2001â€ and can therefore be adjusted against any available refund or excess tax. Setting aside orders that refused such adjustment, the tribunal clarified that the Commissioner must first examine and apply any verified refundable amount before initiating coercive recovery under Sections 138 and 140, and cannot reject adjustment merely on the ground that super tax is a separate charge. Recovery of the remaining Rs58.27 million super tax demands for the taxpayer was stayed, with directions to the Commissioner to verify the claimed Rs230.955 million refunds for Tax Year 2025 and adjust it against the demand, recovering only the balance, if any, thereafter through a speaking order. The tribunal held, in substance, that section 4C super tax is an independent charge for purposes of levy and computation, but it is still a â€œtax due under the Ordinanceâ€ and, therefore, an available refund/excess tax can be adjusted against it under section 170(3)(a). The key findings of the order revealed that the case was not about claiming withholding tax credit inside the computation of section 4C liability. The taxpayer had already accepted the super tax liability and paid Rs12.648 million. The dispute was only whether the remaining Rs58.27 million could be adjusted against the refundable income tax of Rs230.955 million shown in the return. The tribunal treated this as a matter of appropriation of refund against demand, not computation of super tax. The tribunal distinguished CM Pak. It held that CM Pak dealt with the adjustment of withholding taxes/tax credits against the computation of section 4C liability. It did not decide that an available refund under section 170 can never be adjusted against a section 4C demand. Therefore, the Commissioner Appeals misapplied CM Pak by treating â€œwithholding tax adjustmentâ€ and â€œrefund adjustmentâ€ as the same thing. The tribunal held that section 170(3)(a) is wide. Once the Commissioner is satisfied that tax has been overpaid, he â€œshallâ€ apply the excess in reduction of â€œany other tax dueâ€ from the taxpayer under the Ordinance. Since section 4C super tax is imposed, determined, payable and recoverable under the Ordinance, it falls within this expression. The tribunal also held that recovery under sections 138 and 140 cannot be started or continued by ignoring an available refund. If the department already holds money refundable or adjustable to the taxpayer, it must first examine and apply that amount, if legally available, before attaching bank accounts or taking coercive recovery action. Rule 210B was relied upon because it requires satisfaction that no refund is available for adjustment before section 140 recovery is approved. On the departmentâ€™s possible objection that a refund is application-dependent under section 170(1), the tribunal held that this is an incomplete reading of section 170. Section 170(1) and 170(4) regulate the taxpayerâ€™s formal claim for refund/payment. However, section 170(3)(a) independently prescribes the statutory order of adjustment once excess tax is found: first against other tax due, then against other outstanding liabilities, and only thereafter refund of the balance. Therefore, the department cannot ignore an apparent excess merely because a separate refund application has not culminated in a refund order. The tribunal clarified the limit of its finding: an unverified or disputed refund does not automatically wipe out a section 4C demand. The Commissioner may verify whether the refund is actually due, reduced by other liabilities, or otherwise unavailable. But he must examine it and pass a speaking order; he cannot reject adjustment merely because section 4C is an independent charge. The relief granted was that the orders were set aside to the extent they refused consideration of the refund adjustment. Recovery of the section 4C demand was stayed until the Commissioner examines the taxpayerâ€™s refund claim of Rs230.95 million for tax year 2025 under section 170. If a refund is found due and available, it must be adjusted against the super tax demand, and only the balance, if any, may be recovered. If no refund is found due or available, reasons must be recorded in a speaking order, and then recovery may proceed according to law. Copyright Business Recorder, 2026

Date: 2026-07-11

Details: Published July 11, 2026 Updated about 3 hours ago By Sohail Sarfraz ISLAMABAD: Federal Tax Ombudsman (FTO) Zafar Hijazi has granted relief to a woman taxpayer who remained unable to obtain lawful tax registration after her CNIC was fraudulently used to secure a National Tax Number (NTN). The FTO directed the Federal Board of Revenue (FBR) to finalise her lawful tax registration within 30 days and remove the procedural and system-related obstacles preventing her from filing income tax returns and complying with tax laws. The case involved a woman whose CNIC had been misused, without her knowledge or consent, to obtain a fraudulent NTN. Although FBR subsequently cancelled the fraudulent registration and acknowledged that she was a victim of identity misuse, she remained trapped in the tax registration system and was unable to obtain a valid NTN in her own name. The FTO observed that administrative justice is not achieved merely by disposing of a complaint on technical grounds. Where continuing maladministration deprives a citizen of a lawful right, the grievance must be fully and effectively resolved. While maintaining that the challenge relating to the cancellation of the fraudulent NTN was barred by limitation, the FTO held that the womanâ€™s continuing inability to secure lawful tax registration constituted an ongoing instance of maladministration requiring immediate intervention. The review petition was therefore partly allowed, and the earlier order was modified to provide meaningful and practical relief to the complainant. The FTO directed FBR to complete her lawful registration within the prescribed period and eliminate avoidable system constraints that were preventing her from fulfilling her tax obligations. In case any legal impediment remains, FBR must communicate it to the complainant through a reasoned speaking order. FBR has also been directed to submit a compliance report to the Federal Tax Ombudsman within the prescribed period. Taking notice of the growing number of cases involving the fraudulent use of CNICs for obtaining tax registrations, the Federal Tax Ombudsman recommended that FBR formulate a comprehensive Standard Operating Procedure for the prompt restoration or issuance of lawful tax registrations after proper verification. The proposed SOP is intended to ensure that innocent taxpayers, including women whose identities are misused, are not subjected to prolonged hardship because of fraudulent registrations or deficiencies in FBRâ€™s systems and procedures. The order also explains the scope of review jurisdiction exercised by the FTO Secretariat. It clarifies that review cannot be used as a substitute for an appeal, but may be exercised where an earlier order, despite being legally sustainable, leaves a genuine grievance or continuing maladministration unresolved. The FTO observed that the effectiveness of the institution should not be measured merely by the number of complaints disposed of, but by whether maladministration is actually eliminated and citizens receive meaningful and practical relief. The decision reflects the FTOâ€™s commitment to protecting women taxpayers and other citizens from identity fraud, administrative injustice and unnecessary procedural barriers within the tax system. Copyright Business Recorder, 2026

Date: 2026-07-11

Details: Written by Hamza Shahnawaz in Taxation, Top stories Investigation under AEOI framework targets offshore wealth, foreign income and tax reporting compliance. KARACHI: The Large Taxpayers Office (LTO) Karachi has launched a major scrutiny exercise targeting 174 high-profile taxpayers over their foreign assets under Pakistanâ€™s Automatic Exchange of Information (AEOI) framework, as the Federal Board of Revenue (FBR) intensifies efforts to detect undisclosed offshore wealth and strengthen tax compliance. According to sources, the AEOI Zone of LTO Karachi has initiated a comprehensive review of the foreign assets and overseas financial holdings of the selected taxpayers. The tax authority will also seek information from partner jurisdictions through international information-sharing arrangements to verify whether foreign assets and income have been properly declared under Pakistanâ€™s tax laws. Audit teams assigned Sources said LTO Karachi has assigned the selected cases to Assistant Commissioners and Deputy Commissioners Inland Revenue for detailed audits and investigations. The officers will conduct proceedings under Sections 108 and 165B of the Income Tax Ordinance, 2001, which empower the tax authority to obtain information and exchange financial account data with foreign jurisdictions under international agreements. In addition, the taxpayers will be monitored under Sections 182(1A), 182(7), 182(17), 182(25), 182(26), 182(27) and 182(28) of the Income Tax Ordinance, 2001, which prescribe penalties for various forms of non-compliance with tax documentation and reporting obligations. Focus on multinational reporting Tax officials have also been directed to examine compliance with Chapter VIA (Documentation and Country-by-Country Reporting Requirements) of the Income Tax Rules, 2002. The chapter sets out documentation standards and reporting obligations for multinational enterprises and other qualifying taxpayers involved in cross-border transactions. According to sources, many of the taxpayers selected for scrutiny are linked to the fund management, securities, real estate investment trust (REIT) and financial services sectors, where overseas investments and foreign financial assets are relatively common. Strengthening tax transparency The investigation forms part of the FBRâ€™s broader strategy to utilise information received through the Automatic Exchange of Information (AEOI) framework to identify undeclared offshore assets, improve voluntary tax compliance and combat cross-border tax evasion. Under the AEOI mechanism, Pakistan exchanges financial account information with partner jurisdictions in accordance with internationally recognised tax transparency standards, enabling tax authorities to verify offshore financial holdings and foreign income reported by taxpayers.

Date: 2026-07-11

Details: Published July 11, 2026 Updated about 3 hours ago By Recorder Report KARACHI: Bank Alfalah Limited (BAFL) has raised Rs20 billion through the issuance of an AAA-rated Tier 2 Term Finance Certificate (TFC), marking the largest TFC issuance in Pakistanâ€™s banking industry and the Bankâ€™s first AAA-rated TFC, officials said on Friday. The successful issuance follows approval from the State Bank of Pakistan (SBP) and received strong participation from institutional investors, reflecting the marketâ€™s confidence in BAFLâ€™s financial strength, sound governance and long-term growth strategy. According to bank, issued under the Basel III regulatory framework, this Tier 2 Issue is a key element of the Bankâ€™s growth strategy and will further complement the Growth Capital allowing the bank to continue its aggressive growth strategy particularly in SME, ESG initiatives and the consumer segment. The transaction will allow the bank to increase its core profitability and enhance long term shareholder returns. The issuance builds on BAFLâ€™s strong financial performance and disciplined balance sheet management. As of December 31, 2025, the bank reported a profit after tax of Rs28.34 billion, total deposits of Rs2.49 trillion, gross advances of Rs1.15 trillion, while maintaining a Capital Adequacy Ratio (CAR) of 15.87 percent, comfortably above the regulatory minimum. Commenting on the issuance, Aasim Wajid Jawad, Group Head Strategy, said that this transaction marks a defining milestone in BAFLâ€™s capital markets journey. â€œBy further strengthening our capital base, we are enhancing our capacity to support customers, capture future growth opportunities and contribute meaningfully to Pakistanâ€™s economic progress,â€ he added. Pervez Shahbaz Khan, Group Head, Global Markets & Treasury, Bank Alfalah, said that the successful execution of this landmark transaction demonstrates the depth of investor confidence in Bank Alfalahâ€™s credit quality and financial resilience. Copyright Business Recorder, 2026

Date: 2026-07-11

Details: Published July 11, 2026 Updated about 3 hours ago By Reuters NEW YORK: Wall Street banks have added rules on prediction-market betting to their employee codes of conduct, with some barring employees from bets on contracts linked to financial markets and political events, according to three sources familiar with the matter. Goldman Sachs said in a recent memo that its policy prohibits staff from participating in event-based contracts linked to financial markets and political events that could create real or perceived conflicts of interest with the bank, its clients or the broader financial industry, a source with knowledge of the matter said. Prediction-market platforms are exchanges that offer contracts related to a wide array of events like elections, sports and weather, similar to gambling products traditionally offered by betting platforms. Platforms such as Kalshi and Polymarket have grown rapidly in recent years, raising concerns about regulatory oversight ahead of the US midterm elections. Bloomberg News, which first reported the policy, said repeated violations could result in disciplinary action, including termination, and that employees may be required to forfeit gains from prohibited trades. The restrictions do not apply to prediction-market betting related to sports and entertainment, the source said. For Morgan Stanley, a person familiar with the matter said the bankâ€™s employee code of conduct includes rules for prediction-market betting, among other trading and investing topics. The person declined to specify the policies. JPMorgan Chase also has a similar policy in its code of conduct that prohibits employees from trading on any non-public, confidential information, which also extends to betting on prediction markets, a bank source said. Bank of America restricts employees from trading in certain event or prediction-market contracts including company-specific, macroeconomic and financial services events, according to a source with knowledge of the matter. A BofA spokesperson confirmed that the bank recently provided updates to more explicitly outline prohibited activities for employees and to offer examples. Citigroup declined to comment.

Date: 2026-07-10

Details: Written by Faisal Shahnawaz in Automotive, Budget 2026-27, Taxation Government expects Rs122 billion from ICE vehicle levy in FY2026-27 to support Pakistanâ€™s transition to cleaner transport. ISLAMABAD: The Federal Board of Revenue (FBR) has doubled its projected collection under the New Energy Vehicle (NEV) Adoption Levy for FY2025-26, estimating receipts of Rs20 billion against the original target of Rs10 billion, according to official budget documents. The revised projection represents a 100 percent increase over the initial estimate, highlighting the governmentâ€™s growing reliance on the levy to finance its clean transport agenda and promote the adoption of environmentally friendly vehicles. The NEV Adoption Levy is collected under the New Energy Vehicles Adoption Levy Act, 2025, introduced through the Finance Bill as part of Pakistanâ€™s broader strategy to encourage a shift from conventional internal combustion engine (ICE) vehicles to new energy vehicles. Rs122bn projected from ICE vehicle levy Official documents show that the levy imposed on the first sale of locally manufactured and imported ICE vehicles is expected to generate approximately Rs122 billion in revenue during FY2026-27. Under the levy framework, a 1 percent levy applies to the first sale of locally manufactured and imported two- and three-wheeler ICE vehicles, whether new or used. A 3 percent levy is charged on four-wheelers with engine capacities between 1,300cc and 1,800cc, while buses and trucks are subject to a 1 percent levy. Supporting Pakistanâ€™s green transition The government introduced the levy to accelerate the adoption of new energy vehicles, reduce dependence on fossil fuels and curb greenhouse gas emissions from Pakistanâ€™s transport sector. The measure forms part of Pakistanâ€™s broader environmental and climate strategy aimed at promoting cleaner transportation technologies and supporting sustainable economic development. Collection mechanism Under the law, manufacturers of locally assembled and produced ICE vehicles are responsible for collecting the levy from buyers and depositing it with the government. For imported vehicles, the levy is payable by importers at the time of import. By placing the responsibility on manufacturers and importers, the government aims to ensure efficient collection while using fiscal incentives to encourage the transition towards cleaner and more energy-efficient vehicles.

Date: 2026-07-10

Details: Written by Faisal Shahnawaz in Budget 2026-27, Taxation, Top stories Petroleum products, imported vehicles and electrical machinery are expected to remain the largest contributors to customs duty revenue. ISLAMABAD: The Federal Board of Revenue (FBR) has projected customs duty collection of more than Rs410 billion from petroleum product imports during the fiscal year 2026-27, reflecting the governmentâ€™s expectations of stronger import-related tax revenues under the federal budget. According to official documents, the projected collection of Rs410 billion represents an increase of approximately 21 percent over the revised estimate of Rs339.35 billion for FY2025-26. The FBR had originally estimated customs duty collections of more than Rs437 billion from petroleum products for FY2025-26. However, the target was later revised down to Rs339.35 billion after actual collections fell short of initial expectations. Overall customs duty target raised For FY2026-27, the FBR has set an overall customs duty collection target of Rs1.65 trillion, around 20 percent higher than the revised estimate of Rs1.37 trillion for the previous fiscal year. The revised figure also highlights that the original FY2025-26 customs duty target of Rs1.59 trillion was not achieved. The higher target forms part of the governmentâ€™s broader revenue mobilisation strategy aimed at strengthening fiscal resources and meeting budgetary objectives. Imported vehicles among top contributors Official projections indicate that imported vehicles will remain one of the largest sources of customs duty revenue during FY2026-27. The FBR expects to collect approximately Rs379 billion from vehicle imports, compared with an estimated Rs313 billion in the preceding fiscal year. Meanwhile, customs duty on imported electrical machinery is projected at around Rs98 billion, while edible oil imports are expected to generate approximately Rs91 billion. The tax authority has also forecast customs duty collections of around Rs84 billion from iron and steel imports, with articles of iron and steel contributing an additional Rs29 billion. Imports of tea and coffee are expected to yield around Rs41 billion in customs duty during FY2026-27. Revenue strategy The customs duty projections are based on anticipated import volumes, prevailing tariff structures and expected economic activity during the fiscal year. The estimates form part of the governmentâ€™s wider fiscal strategy to strengthen tax collection, improve revenue performance and support budgetary targets outlined in the Federal Budget for FY2026-27.

Date: 2026-07-09

Details: Written by Hamza Shahnawaz Audit says weak monitoring of withholding agents led to under-deduction of income tax from employeesâ€™ salaries ISLAMABAD: The Federal Board of Revenue (FBR) failed to recover Rs3.116 billion in income tax on salary payments due to incorrect tax deductions by employers, according to the latest audit report of the Auditor General of Pakistan (AGP). The audit report found that inadequate monitoring of withholding agents allowed employers to under-deduct income tax from employeesâ€™ salaries, resulting in significant revenue losses in violation of the Income Tax Ordinance, 2001. Weak Monitoring Led to Revenue Loss Under Section 149, read with Section 161 of the Income Tax Ordinance, every employer is required to deduct income tax from salary payments at the applicable average rate and deposit it into the government treasury. Where tax is not deducted or deposited correctly, the Commissioner Inland Revenue is authorised to initiate recovery proceedings. The AGP examined the financial years 2022-23 and 2023-24 and found that 495 withholding agents across 12 FBR field offices had failed to deduct the correct amount of income tax from employeesâ€™ salaries. According to the report, the FBR did not effectively monitor these withholding agents or prevent the short deduction of tax, resulting in the non-realisation of Rs3.116 billion in government revenue. The audit observations were raised between February and November 2024. Legal Proceedings Yet to Be Finalised In its response, the FBR stated that legal proceedings had been initiated under the relevant provisions of the Income Tax Ordinance to recover the entire amount of Rs3.116 billion. However, the tax authority acknowledged that the proceedings had not yet been concluded. The Departmental Accounts Committee (DAC), during meetings held between July 2024 and January 2025, directed the FBR to expedite the legal process and submit a compliance report to the audit authorities. According to the AGP, no further progress had been reported by the time the audit report was finalised. AGP Calls for Stronger Oversight The Auditor General recommended that the FBR accelerate legal proceedings against defaulting withholding agents while strengthening monitoring mechanisms to ensure employers deduct and deposit salary tax accurately and on time. The report stressed that effective oversight of withholding agents is essential to protect government revenue and improve compliance with tax laws. Issue Repeated in Previous Audit Reports The AGP noted that the matter is a recurring audit observation. Similar irregularities were highlighted in audit reports for 2019-20, 2021-22, 2022-23 and 2023-24, involving a cumulative financial impact of Rs1.699 billion in previous years.

Date: 2026-07-09

Details: Published July 9, 2026 Updated about 4 hours ago By Reuters NEW YORK: Wall Streetâ€™s main indexes fell on Wednesday after President Donald Trump said an interim deal aimed at ending the war with Iran was â€œover,â€ while Broadcom led gains among recently battered chip stocks. Speaking at the NATO summit, Trump said he had no interest in further talks with Iran and warned that Washington was likely to carry out additional strikes on Wednesday night. His comments marked the latest setback in the series of back-and-forth in negotiation talks that have swung between threats of escalation and hopes for diplomacy, leaving investors wrong-footed by several false starts toward a peace deal. Broadcom gained 4.2 percent after Apple said it plans to spend more than USD30 billion as part of a chip-supply agreement reached earlier this week with the chipmaker. â€œAny time you get an announcement from Apple about using your equipment, itâ€™s pretty positive - especially when you have 2.5 billion Apple devices in peopleâ€™s hands around the globe,â€ said Art Hogan, chief market strategist at B. Riley Wealth. Nvidia pared early losses and turned positive after the Information reported that China plans to allow its top AI firms to buy a limited number of the companyâ€™s H200 chips. The chip stocks were mixed on Wednesday after recent volatility, with the broader Philadelphia SE Semiconductor index down 0.08 percent. At 12:04 p.m. ET, the Dow Jones Industrial Average fell 774.50 points, or 1.46 percent, to 52,150.65, the S&P 500 lost 66.94 points, or 0.89 percent, to 7,437.21 and the Nasdaq Composite lost 235.63 points, or 0.91 percent, to 25,584.18. Oil prices sharply extended gains on the day following Trumpâ€™s remarks, with Brent crude futures surging 7 percent. Treasury yields also rose as the selloff spread to bonds. The latest escalation in the conflict threatens to unsettle the equities rally that has carried the benchmark S&P 500 up about 9 percent so far this year, despite sharp declines earlier in 2026 after the Mideast war started.

Date: 2026-07-08

Details: Reduced duty rate on imported ice-creams takes effect from July 1, 2026, under Pakistanâ€™s new tariff schedule for fiscal year 2026-27. Pakistanâ€™s importers of ice-creams and edible ice products are set to benefit from lower taxation after the Federal Board of Revenue (FBR) reduced the regulatory duty on these products under the fiscal year 2026-27 tariff framework. The revised customs duty structure became effective from July 1, 2026, as part of the governmentâ€™s broader tariff rationalization measures announced for the new fiscal year. The reduction is expected to ease the cost burden on importers dealing in ice-creams and related frozen dessert products. According to a recently issued Statutory Regulatory Order (SRO), the FBR amended the regulatory duty rates applicable to imported ice-creams and other edible ice products classified under the Pakistan Customs Tariff (PCT). The revised rates form part of the updated customs tariff schedule introduced for FY2026-27. Under the new duty regime, imports falling under PCT code 2105.0000, which covers ice-creams and other edible ice products regardless of whether they contain cocoa, will now attract a regulatory duty of 16 percent. The rate has been reduced from the previous level of 20 percent that remained in force during the last fiscal year. The latest adjustment represents a reduction of 4 percentage points in the regulatory duty, translating into a 20 percent decline compared to the earlier rate. The move reflects the governmentâ€™s ongoing efforts to review and streamline tariff structures across various imported goods categories. Market analysts believe the reduction in regulatory duty could help importers lower overall import costs, although the final impact on retail prices will depend on exchange rates, shipping expenses, and other applicable taxes. The lower duty may also encourage greater product availability in supermarkets, specialty stores, and online grocery platforms. The demand for frozen desserts typically peaks during Pakistanâ€™s long summer season, when high temperatures drive increased consumer spending on beverages, ice-creams, and other cooling products. As a result, the latest duty reduction could support supply levels during periods of strong seasonal demand. The duty reduction is part of a wider set of tariff revisions introduced by the FBR for FY2026-27, aimed at supporting trade activity while balancing revenue collection objectives. Importers and stakeholders are expected to closely monitor the impact of the revised rates on import volumes and market dynamics in the coming months. With the new tariff schedule now in force, all eligible imports of ice-creams and edible ice products will be subject to the reduced 16 percent regulatory duty from July 1, 2026.

Date: 2026-07-08

Details: Customs officials intercept 12kg of marijuana concealed inside toy parcels at Karachiâ€™s International Mail Office during routine screening. KARACHI: Pakistan Customs has thwarted a major narcotics smuggling attempt by seizing 12 kilograms of marijuana concealed inside parcels arriving from Thailand through the international postal system, with the contraband estimated to be worth Rs366.2 million. According to an official statement, the seizure was made on 4 July 2026 during routine scanning operations at the International Mail Office (IMO), Karachi. Customs officials intercepted two suspicious parcels originating from Bangkok, Thailand, after identifying irregularities during the screening process. Following the initial detection, Preventive Officer Zahid Hussain carried out a detailed physical examination of the consignments. The parcels had been declared as containing plastic car toys, Lego sets, model kit paper and wooden rocks. However, customs officials discovered that the declared goods had been used to conceal 12 kilograms of marijuana hidden inside plastic toy boxes. The narcotics were recovered from two separate consignments weighing 7 kilograms and 5 kilograms, respectively. Pakistan Customs estimated the market value of the seized marijuana at approximately Rs366.2 million. Following the recovery, the contraband was handed over to the Directorate of Enforcement & Compliance (Headquarters), Karachi, for further legal proceedings. Authorities have registered a First Information Report (FIR) and launched an investigation to identify those responsible for the attempted smuggling operation and dismantle the criminal network behind the shipment. Pakistan Customs said the successful interception highlights the effectiveness of its intelligence-led enforcement strategy and continued vigilance in preventing the misuse of international postal and courier channels for transnational narcotics trafficking. The department reaffirmed its commitment to strengthening anti-smuggling operations, enforcing customs laws and protecting national security by disrupting illegal drug trafficking networks operating across international borders.

Date: 2026-07-08

Details: New Section 73A protects taxpayer information while allowing limited disclosure for tax administration and inter-governmental cooperation. KARACHI: The Sindh government has introduced a dedicated taxpayer confidentiality framework by inserting Section 73A into the Sindh Sales Tax on Services Act, 2011 through the Sindh Finance Act, 2026, strengthening legal safeguards for taxpayer information while permitting limited disclosure for tax administration purposes. The newly enacted provision declares tax-related information confidential and establishes clear rules governing when such information may be disclosed, with the objective of balancing taxpayer privacy and efficient tax administration. Taxpayer information protected Under Section 73A, all particulars contained in statements, tax returns, accounts and other documents submitted under the Sindh Sales Tax on Services Act will remain confidential. The confidentiality protection also extends to evidence, affidavits and depositions made during proceedings under the Act, as well as records relating to assessment and recovery proceedings. The law prohibits any officer of the Sindh Revenue Board (SRB), including the Chairman, Members, Secretary and other public servants, from disclosing taxpayer information except in circumstances specifically authorised under the legislation. Limited disclosure permitted The amendment allows confidential information to be disclosed where it is necessary for a person performing official functions under the Sindh sales tax law to carry out responsibilities related to the implementation and enforcement of the Act. According to the new provision, the exception is intended to facilitate effective tax administration while ensuring taxpayer records continue to receive legal protection. Information sharing with government agencies Section 73A also authorises the Sindh Revenue Board to share taxpayer information with departments and authorities of the federal and provincial governments where those agencies are legally entitled to receive such information. In addition, the law permits information sharing under bilateral or multilateral agreements concluded between the SRB and other government departments or authorities for the administration or enforcement of taxes and levies collected by those agencies. The framework is expected to improve coordination among tax authorities while ensuring that the exchange of taxpayer information takes place within a clearly defined legal structure. Modernising the provincial tax system The introduction of Section 73A forms part of the broader reforms enacted through the Sindh Finance Act, 2026, aimed at modernising the provinceâ€™s tax administration and improving compliance. The Sindh government said the amendment strengthens taxpayer privacy by providing explicit legal protection for confidential information while enabling limited and regulated information sharing to support tax enforcement and inter-governmental cooperation. The new framework is also expected to enhance transparency and public confidence in the provincial tax system by ensuring that taxpayer information is handled in accordance with clearly defined legal safeguards.

Date: 2026-07-08

Details: Tax Expenditure Report 2026 estimates Pakistanâ€™s tax expenditure at 2.07% of GDP, well below the global average of 4.9%. ISLAMABAD: Pakistanâ€™s tax expenditure remains significantly below the global average, according to the Federal Board of Revenue (FBR), which says the countryâ€™s latest estimates reflect both the structure of its tax system and improvements in the methodology used to measure tax concessions. In its Tax Expenditure Report 2026, the FBR estimated Pakistanâ€™s total tax expenditure for FY2024â€“25 at 2.07 per cent of Gross Domestic Product (GDP), compared with a global average of 4.9 per cent of GDP across 33 countries. The tax authority said the comparatively lower ratio is attributable to the design of Pakistanâ€™s tax system as well as a revised benchmark methodology that has been brought more closely in line with international best practices. Lower than many comparable economies The report also compared Pakistanâ€™s tax expenditure with that of 10 comparable economies over the period from 2011 to 2025. According to the FBR, TÃ¼rkiye recorded the lowest average tax expenditure among the selected countries at 0.46 per cent of GDP, while Romania registered the highest average at 4.18 per cent of GDP during the 15-year period. The average tax expenditure across the peer group stood at 2.31 per cent of GDP. With tax expenditure estimated at 2.07 per cent of GDP in FY2024â€“25, Pakistan ranks at the lower end of the comparison group, suggesting that the countryâ€™s level of tax exemptions and concessions is broadly consistent with those of comparable developing economies. Improved estimation methodology The FBR said the latest estimates incorporate refinements to the benchmark methodology used to calculate tax expenditures. According to the report, the revised framework distinguishes genuine tax incentives from structural features of the tax system that are not regarded as tax expenditures, bringing Pakistanâ€™s reporting practices closer to internationally recognised standards. The tax authority said the updated methodology provides a more accurate assessment of the fiscal cost of tax exemptions and concessions while enhancing transparency and accountability in the countryâ€™s tax policy framework. The report added that improved measurement of tax expenditures will support policymakers in evaluating the effectiveness of existing tax incentives and making informed decisions on future fiscal reforms.

Date: 2026-07-08

Details: Tax Expenditure Report 2026 categorises major income tax relief measures to improve transparency and assess their fiscal impact. ISLAMABAD: The Federal Board of Revenue (FBR) has classified seven major categories of income tax expenditures under the Income Tax Ordinance, 2001, providing a detailed framework to explain how tax exemptions and concessions support economic and social objectives while reducing government revenue. The classification, published in the Tax Expenditure Report 2026, is intended to enhance transparency by identifying the various forms of tax relief available to taxpayers and assessing their impact on the national exchequer. Exemption from income tax The FBR said certain individuals, organisations and entities are completely exempt from income tax despite otherwise falling within the scope of the Income Tax Ordinance. As an example, non-profit organisations and welfare institutions approved under Section 100C are exempt from income tax on earnings generated through voluntary contributions and qualifying activities under Clause 66 of Part I of the Second Schedule. Exemption from specific heads of income The report explained that certain categories of income are excluded from taxation even though they would normally form part of the tax base. For instance, profits earned from qualifying electric power generation projects established after 1 July 1988 under the governmentâ€™s approved energy policy enjoy tax exemption for a specified period under Clause 132 of Part I of the Second Schedule. Deductible allowances According to the FBR, deductible allowances enable taxpayers to reduce their taxable income by claiming specified expenses or contributions that would not ordinarily qualify as business deductions. The report cited contributions to approved pension funds under Section 63 of the Income Tax Ordinance as an example, allowing individuals to reduce their taxable salary income. Tax credits Unlike deductions, tax credits directly reduce the amount of tax payable after the taxpayerâ€™s liability has been calculated. The FBR noted that Section 65F provides a tax credit for qualifying investments in technology and information technology-related enterprises, encouraging investment in Pakistanâ€™s digital economy. Reduced tax rates The report also highlighted concessions where specific income streams or taxpayers are taxed at rates lower than the standard benchmark. As an example, the withholding tax on profit paid to non-residents without a permanent establishment in Pakistan has been reduced to 10 per cent under Clause 5A of Part II of the Second Schedule, compared with the benchmark rate of 15 per cent. Reduced tax liability Some tax relief measures lower the amount of tax payable by granting a fixed reduction to eligible taxpayers. The report pointed to full-time teachers and researchers employed by recognised non-profit educational institutions, who receive a 25 per cent reduction in income tax on their salary under Clause 1(2) of Part III of the Second Schedule. Tax deferral The FBR explained that tax deferral allows taxpayers to postpone the payment of tax until a future date, effectively providing an interest-free financial benefit. One example is contributions made to Registered Pension Plans and Voluntary Pension System funds, where both contributions and investment income remain tax-deferred until the funds are withdrawn. Strengthening transparency The tax authority said categorising income tax expenditures into clearly defined classes would improve public understanding of the fiscal cost of tax concessions and assist policymakers in evaluating whether existing relief measures continue to achieve their intended economic and social objectives. The classification forms part of the Tax Expenditure Report 2026, which aims to provide a comprehensive assessment of the revenue forgone through Pakistanâ€™s tax exemptions, incentives and other preferential tax treatments.

Date: 2026-07-06

Details: Published July 6, 2026 Updated about 5 hours ago By Naseem Usman KARACHI: The cotton market witnessed a return of bullish sentiment on Saturday after a period of price decline, as intense heat, water shortages, and a lack of rainfall continued to disrupt the supply of raw cotton across producing regions. The reduced availability of phutti led to improved trading activity throughout the day. The spot rate rose by three hundred rupees per maund, closing at seventeen thousand eight hundred rupees per maund. Meanwhile, Pakistanâ€™s textile exports suffered a setback in June, even though the sector recorded an overall increase in exports for the year so far. Industry representatives have also raised concerns over the additional tariff imposed on electricity, which they say is costing the textile industry fifty-five billion rupees annually. In a separate development, the Sindh High Court has recused itself from hearing a contempt of court petition concerning the alleged illegal occupation of the Cotton Exchange Building by the Federal Investigation Agency. Industry stakeholders have also voiced serious concern over the continued establishment of sugar mills in cotton-growing areas, warning that this practice is inflicting significant damage on the cotton crop, a commodity of considerable importance to the national economy due to the valuable foreign exchange it generates. According to a recent report, the country is expected to produce one million tons of surplus sugar by November. Critics warn that importing sugar at lower prices, as has happened in the past, could once again result in financial losses for the country. They are calling for accountability and a serious reassessment of national priorities, questioning whether cotton or sugar deserves greater importance in the countryâ€™s economic planning. The market saw a slightly bearish tone develop by Saturday evening, attributed to overall pressure. The local cotton market experienced a mixed week, opening with a downward trend before recovering to close on a bullish note, as prices ultimately stabilized after a period of fluctuation. The Karachi Cotton Associationâ€™s Spot Rate Committee raised the spot rate by Rs 300 per maund, settling the week at Rs 17,800 per maund. Across the country, prices varied by region. In Sindh, cotton sold between Rs 17,700 and Rs 17,800 per maund, with phutti, or seed cotton, fetching Rs 8,000 to Rs 8,500 per 40 kg. Punjab recorded slightly higher rates, with cotton trading between Rs 17,800 and Rs 18,000 per maund and phutti between Rs 8,500 and Rs 9,000 per 40 kg. In Balochistan, cotton prices stood at Rs 17,700 to Rs 17,800 per maund, while phutti sold for Rs 8,800 to Rs 9,000 per 40 kg. Trading activity picked up pace during the week, with a growing number of textile mills entering the market to purchase cotton. However, industry reports point to a worrying decline in crop quality in Sindh, where prolonged dry spells have left the province in urgent need of water and rainfall. By contrast, the cotton crop in Punjab is said to be faring comparatively better this season, with its staple length now surpassing that of Sindhâ€™s produce. This marks a reversal from previous years, when Punjabâ€™s cotton had struggled with quality issues while Sindh consistently produced superior fibre. Industry sources attribute this yearâ€™s shift to the unusually intense heat and acute water shortages that have hit Sindhâ€™s crop particularly hard. Adding to the sectorâ€™s troubles, cotton-growing areas are increasingly being converted to sugarcane cultivation, further squeezing the cropâ€™s already shrinking footprint. Experts warn this trend poses a serious risk to the textile industry, which depends on cotton to keep its ginning factories operational and to produce value-added garments for export, a key source of foreign exchange for the country. The shortfall in domestic output has forced Pakistan to import an estimated 5 to 6 million bales of cotton annually to meet the needs of local textile mills. Cotton also serves as a major source of edible oil, which likewise now needs to be imported to cover the gap left by declining local production. The Spot Rate Committee of the Karachi Karachi increased the Spot rate by Rs 3,00 per maund and closed it at Rs 17,800 per maund. Chairman of the Karachi Cotton Brokers Forum Naseem Usman has stated that the New York cotton futures rate is fluctuating between 72 and 78 American cents per pound. According to the weekly export and sales report issued by the USDA, 49,000 bales were sold for the year 2025-26. Vietnam remained at the top by purchasing 23,200 bales. India stood second by purchasing 7,400 bales. Pakistan ranked third by purchasing 5,900 bales. For the year 2026-27, 44,100 bales were sold. Honduras remained at the top by purchasing 11,300 bales. Guatemala stood second by purchasing 9,300 bales. Turkey ranked third by purchasing 6,800 bales. Exports totalled 218,800 bales. Vietnam remained at the top by importing 57,300 bales. Turkey stood second by importing 49,800 bales. Pakistan ranked third by importing 31,600 bales. Leading trade bodies have formally protested the continued illegal occupation of the Karachi Cotton Exchange building, despite a Sindh High Court order directing its evacuation. The Pakistan Cotton Ginners Association, Pakistan Cotton Brokers Association, All Pakistan Textile Mills Association, Karachi Chamber of Commerce and Industry, and Federation of Pakistan Chambers of Commerce and Industry have all written letters on the matter. According to representatives of the affected parties, the Sindh High Court had directed the Federal Investigation Agency to vacate the building without delay. However, the FIA has continued to occupy the premises in disregard of that directive. The stakeholders have called on the court to take notice of the continued non-compliance. In a related development, the constitutional bench of the Sindh High Court recused itself from hearing a contempt of court petition filed over the failure to restore possession of the building to its rightful occupants. The petition has been referred to the Chief Justice for assignment to another bench. Meanwhile, official trade figures show that Pakistanâ€™s textile exports declined in June. Exports for the month stood at one billion, two hundred and eighty-two million dollars, down from one billion, five hundred and twenty-two million dollars in June last year. For the full fiscal year 2025-26, textile exports totalled seventeen billion, nine hundred and seventy million dollars, only slightly higher than the seventeen billion, nine hundred and ten million dollars recorded the previous year. Separately, the Pakistan Textile Exporters Association has raised concerns over electricity pricing for industrial consumers. Patron-in-Chief Khurram Mukhtar and Chairman Sohail Pasha have called on the federal government and the National Electric Power Regulatory Authority to address what they described as a long-standing irregularity in power tariffs. They noted that industrial consumers in the B3 and B4 categories are being charged nearly four rupees per kilowatt-hour above the actual cost, adding an estimated fifty-five billion rupees a year to the industryâ€™s expenses. They argued that the pricing structure is technically unjustified, since high-voltage consumers place lower demands on transmission and distribution infrastructure and should not be subject to a higher tariff burden as a result. Chief Minister Punjab Maryam Nawaz has been presented with a comprehensive report on the countryâ€™s sugar stocks, covering figures up to July 3. According to the report, the sugar industry currently holds reserves of 2.8 million tonnes of sugar, valued at Rs 298 billion, which officials say will be sufficient to meet domestic demand until the new crushing season begins on November 25. The report also notes an additional surplus of 800,000 tonnes of sugar, while Punjab alone produced 5.1 million metric tonnes of sugar this season, worth Rs 695 billion. Details of the report further reveal that the countryâ€™s overall sugar stock currently stands at 3.6 million metric tonnes, against an estimated national requirement of around 2.8 million metric tonnes until the next crushing season commences on November 25, 2026. The report has, however, drawn attention to a wider economic concern regarding the cotton crop, which is considered a major source of foreign exchange earnings for the country. Officials cautioned that by November, the country is projected to have a surplus of one million tonnes of sugar, raising fears that authorities may once again resort to importing sugar at lower prices, a move that critics say previously caused significant financial losses to the national economy. The development has prompted renewed calls for accountability, with observers questioning why cotton production, seen as more economically vital, continues to be overshadowed by policy focus on sugar. Critics have urged relevant authorities to reassess national agricultural priorities, arguing that sound judgment is needed to determine whether cotton or sugar deserves greater attention in the countryâ€™s long-term economic interest. Copyright Business Recorder, 2026

Date: 2026-07-06

Details: â€¢ MSCIâ€™s broadest index of Asia-Pacific shares outside Japan gained 0.4% Published July 6, 2026 Updated 2 minutes ago By Reuters SYDNEY: Asian share markets were mostly firmer on Monday, as Wall Street futures started the week with gains on hopes for an upbeat earnings season, while easing oil prices promised relief from inflationary pressures. While there were no new developments in the fractious U.S.-Iran peace talks, ships are passing through the Strait of Hormuz with 160 vessels reported from Monday to Saturday last week. OPEC+also agreed a further increase in output targets by 188,000 barrels per day from August, on top of similar increases for June and July. As a result, Brent slipped 0.6% to near four-month lows at $71.70 a barrel and U.S. crude lost 0.5% to $68.38. The cooling in energy costs combined with a softer U.S. payrolls report, led markets to scale back the risk of a Federal Reserve rate hike in the near term, with futures implying a 78% chance of a steady outcome at the July 29 meeting. Minutes of the â Fedâ€™s last meeting are due on Wednesday and should offer colour on the hawkish turn by some board members, though that preceded the recent slide in oil. â€œEven if you thought there was a risk the Fed might move soon, I think weâ€™re safe at least for another month,â€ said Richard Yetsenga, head of research at ANZ. â€œOur view overall still is the Fed wonâ€™t do anything, but clearly weâ€™ve been above target on the Fedâ€™s preferred inflation measure for five years,â€ he added. â€œThere is some risk that the Fed just runs out of patience.â€ The diminished risk of a hike this month should allow investors to focus on the looming earnings season, where the AI boom is set to deliver bumper tech profits. This week has just Delta Air Lines and PepsiCo as tasters, though Samsung Electronics (005930.KS), opens new tab is set to make a splash on Tuesday as analysts expect an 18-fold increase in profits. Profit bonanza for chipmakers The worldâ€™s largest memory chipmaker by sales is likely to flag an operating profit of 86 â trillion won ($56.35 billion) for the April to June quarter, according to an LSEG SmartEstimate. South Koreaâ€™s red hot market cooled a little last week but is still up 92% for the year so far as AI demand and tight supplies boost chip prices. The index added another 2.25% on Monday, while Japanâ€™s Nikkei eased 0.1%. MSCIâ€™s broadest index of Asia-Pacific shares outside Japan gained 0.4%. In Europe, EUROSTOXX 50 futures were flat, while DAX futures rose 0.2% and FTSE futures fell 0.2%. S&P 500 futures firmed 0.5%, while Nasdaq futures climbed 1.4% on top of a 2.1% â gain last week. The data calendar kicks off with the U.S. ISM Services survey later on Monday where forecasts favour a slight pullback to a still-healthy 54.0 in June. A clutch of central bankers are speaking at an ECB conference later in the day, including Fed Board Governor Christopher Waller, while ECB President Christine Lagarde is also due to speak in Paris. New Zealandâ€™s central â bank is due to meet on Wednesday and markets are wagering it will raise its 2.25% cash rate by a quarter point, the first hike since mid-2023. Policy makers have foreshadowed a tightening for some time, though again that was before the tumble in oil prices and there has to be a chance it will surprise â by holding rates steady. In currency markets, the dollar index had steadied at 100.880 after dipping in the wake of the disappointing June payrolls report. The euro was flat at $1.1445 , just above the recent 13-month low of $1.1325. The dollar held at 161.45 yen , not far from 40-year peaks of 162.84 as speculators remain wary of Japanese intervention. In commodity markets, gold was little moved at $4,177 an ounce , having bounced 2% last week.

Date: 2026-07-06

Details: Published July 6, 2026 Updated about 5 hours ago By Recorder Report LAHORE: The Lahore Chamber of Commerce & Industry organized the 11th session of its Financial Advisory Baithak, offering free one-to-one consultation and advisory services to members on taxation, customs and regulatory matters affecting the business community. The session was chaired by LCCI President Faheem Ur Rehman Saigol, while tax and financial consultant Hamid Ullah Khan provided detailed guidance to participants and addressed their queries on a wide range of business-related issues. The discussion focused on Withholding Tax (WHT) Rates for 2027, Tax Year 2026 income tax return filing, Punjab Revenue Authority (PRA) registration, the ISO 9001:2015 certification and registration process, Goods Declarations (GD) through the Pakistan Single Window (PSW) along with EIF-related matters, and customs warehousing charges on a per-CBM basis. Speaking on the occasion, LCCI President Faheem Ur Rehman Saigol said that the Financial Advisory Baithak is an important initiative aimed at helping the business community navigate complex taxation and regulatory procedures. He said that LCCI is committed to providing practical support to its members by arranging regular advisory sessions with experienced professionals so that businesses can remain compliant with evolving laws and regulations. He said that the rapidly changing tax and regulatory environment requires businesses to remain updated with the latest laws and procedures. He stressed that awareness and timely compliance not only help businesses avoid unnecessary penalties and litigation but also contribute to a more transparent and documented economy. He added that LCCI will continue organizing such knowledge-sharing sessions to equip its members with the information and guidance needed to address emerging business challenges effectively. Consultant Hamid Ullah Khan highlighted recent developments in tax laws and customs procedures and provided practical solutions to issues faced by businesses. He emphasized the importance of timely tax compliance, proper documentation and awareness of regulatory requirements to avoid unnecessary legal and financial complications. The participants appreciated the initiative and termed the one-to-one advisory sessions highly beneficial, as they enabled them to discuss their specific business concerns directly with the expert. Among those who attended the session were Muhammad Taha Sarwar, Tariq Hameed, Shahid Hussain and Hafiz Muhammad Shafiq. Copyright Business Recorder, 2026

Date: 2026-07-06

Details: â€¢ Brent crude futures slid 24 cents, or 0.33%, to $71.88 a barrel Published July 6, 2026 Updated 29 minutes ago By Reuters SINGAPORE: Oil prices inched lower on Monday after OPEC+ agreed to further increase its output targets from August while exports from key producers via the Strait of Hormuz are recovering, potentially adding to global supplies. Brent crude futures slid 24 cents, or 0.33%, to $71.88 a barrel by 0010 GMT after settling 0.45% higher on Friday. US West Texas Intermediate crude was at $68.58 a barrel, down 11 cents, or 0.16%. There was no settlement for WTI on Friday as US markets were closed ahead of the Independence Day holiday on Saturday. Both contracts were little changed last week, after mostly falling over the past few weeks, â as investors kept a close eye on talks between the United States and Iran over the fate of shipping through the Strait of Hormuz while keeping tabs on the recovery in Gulf oil exports. The Organization of the Petroleum Exporting Countries and their allies including Russia agreed on Sunday to further increase output targets by 188,000 barrels per day from August, on top of similar increases for June and July. However, the increase has remained largely on paper because of the US-Israeli war with Iran, which closed the Strait of Hormuz to tanker traffic for key OPEC producers, including Saudi Arabia, Kuwait and Iraq, capping their â output. â€œThe number was largely in line with expectation,â€ IG market analyst Tony Sycamore said, â€œWith UAE leaving and when quotas are probably still not being met due to production still ramping up after the conflict - Iâ€™m not sure they mean much at the moment.â€ The United Arab Emirates quit OPEC as of May 1. Gulf members have begun â reviving supplies shut during the Iran war and are increasing exports. OPEC oil output in June rose by 3.3 million barrels per day month-on-month to 19.43 million bpd, a Reuters survey found, recovering from its lowest in more than two â decades. Gulf oil exports in June jumped more than 3 million barrels from May to exceed 10 million barrels per day, although the volume remained 40% below pre-war levels, data showed. In addition, oil shipments â from Russiaâ€™s western ports hit a record high in June and are expected to maintain that level in July as its refineries have been damaged in drone attacks by Ukraine that have forced Moscow to boost crude exports, industry sources said.

Date: 2026-07-05

Details: Written by Hamza Shahnawaz Audit finds 472 withholding agents failed to deduct tax on rental payments across 17 FBR field offices ISLAMABAD: The Federal Board of Revenue (FBR) has failed to recover more than Rs1.02 billion in withholding tax on income from property after hundreds of withholding agents did not deduct tax on rental payments, according to the latest audit report of the Auditor General of Pakistan (AGP). The audit, covering fiscal years 2022-23 and 2023-24, found that 472 withholding agents across 17 FBR field offices failed to deduct withholding tax while making rent payments to owners of immovable properties, resulting in significant revenue losses. Audit Highlights Rs1.02 Billion Tax Shortfall According to the AGP report, Section 155, read with Section 161 of the Income Tax Ordinance, 2001, requires prescribed persons to deduct withholding tax at the applicable rates when making rental payments. Where tax is not deducted or deposited, the Commissioner Inland Revenue is empowered to recover the unpaid amount through legal proceedings. The audit estimated that the failure to comply with these provisions led to the non-recovery of Rs1.017 billion in withholding tax. The audit observations were communicated to the FBR between February and November 2024. Limited Recovery Despite Legal Proceedings In its response, the FBR informed auditors that only Rs1.02 million had been recovered and verified, while Rs0.06 million had been charged but was still awaiting recovery. The tax authority added that legal proceedings involving Rs1.016 billion had been initiated under the Income Tax Ordinance, 2001, but the cases had not yet been finalised. DAC Directs FBR to Expedite Recovery The Departmental Accounts Committee (DAC), during meetings held between July 2024 and January 2025, directed the FBR to recover the admitted amount, complete pending legal proceedings and submit compliance reports to both the Audit authorities and the FBR. However, the AGP report noted that no significant progress had been communicated before the audit was finalised. AGP Calls for Stronger Enforcement The Auditor General recommended that the FBR accelerate the recovery of outstanding tax liabilities, conclude pending legal proceedings and strengthen monitoring of withholding agents to ensure the proper deduction and timely deposit of withholding tax. The report also urged the tax authority to reinforce enforcement of the withholding tax regime through the Commissioner Inland Revenue (Withholding) to minimise future revenue leakages and improve tax compliance.

Date: 2026-07-05

Details: Written by Faisal Shahnawaz Revised customs duty rates for juices, mineral waters, and non-alcoholic beverages take effect from July 1, 2026, under the new fiscal year tariff schedule. The Federal Board of Revenue (FBR) has significantly reduced the regulatory duty (RD) on the import of juices, mineral waters, and several non-alcoholic beverages, with cuts reaching as high as 58 percent. The revised duty structure became effective from July 1, 2026, under the tariff schedule for the fiscal year 2026-27. According to the newly issued Statutory Regulatory Order (SRO), the FBR has revised the regulatory duty rates applicable to various imported beverage categories covered under the Pakistan Customs Tariff (PCT). The move is part of the governmentâ€™s updated customs tariff policy for the current fiscal year and is expected to lower the import cost of several beverage products. Under the revised rates, the regulatory duty on the import of waters, including natural or artificial mineral waters and aerated waters without added sugar or sweetening matter, classified under PCT Code 22.01, has been reduced to 20 percent. Previously, these products were subject to a 30 percent regulatory duty, reflecting a reduction of approximately 33 percent. Similarly, the FBR has lowered the regulatory duty on mineral waters, aerated waters containing added sugar or other sweetening matter, flavored waters, and other non-alcoholic beverages falling under PCT Code 22.02. The revised duty has been fixed at 16 percent, down from 20 percent in the previous fiscal year, representing a 20 percent decrease. The most substantial relief has been provided for the import of fruit juices, nut juices, coconut water, grape must, and vegetable juices, including products that may contain added sugar or sweetening matter but are free from added spirits. These products, classified under PCT Code 20.09, will now attract a 20 percent regulatory duty instead of the earlier 48 percent. This revision translates into a sharp 58 percent reduction in regulatory duty for imported juices, making it the largest cut among the beverage categories included in the latest tariff notification. The revised duty structure is expected to reduce import costs for beverage importers and distributors while potentially increasing the availability of imported juice and beverage products in the domestic market. Businesses involved in food and beverage imports are also likely to benefit from improved pricing flexibility under the updated customs tariff regime for FY2026-27.

Date: 2026-07-05

Details: Written by Faisal Shahnawaz Reduced import duty on shrimps and prawns takes effect from July 1, 2026, under the updated tariff schedule for FY2026-27. Pakistan has reduced the regulatory duty on the import of shrimps and prawns to 8 percent, effective July 1, 2026, under the updated tariff schedule for the fiscal year 2026-27. The reduction is aimed at lowering import costs for seafood products and aligns with the governmentâ€™s revised customs duty framework for the new financial year. According to the latest SRO, outlining regulatory duty rates for FY2026-27, the revised rate applies to several categories of imported shrimps and prawns. The new duty replaces the 10 percent regulatory duty that remained in force during the previous fiscal year, providing a two-percentage-point reduction across the specified tariff lines. The updated rates cover Cold-water shrimps and prawns (Pandalus spp., Crangon crangon) classified under Pakistan Customs Tariff (PCT) Code 0306.3500. Imports under this category will now attract a regulatory duty of 8 percent, down from the earlier rate of 10 percent. Similarly, Other shrimps and prawns imported under PCT Code 0306.3600 will also be subject to the revised 8 percent regulatory duty. This category has likewise benefited from a reduction of two percentage points compared with the duty applicable during FY2025-26. The government has also lowered the regulatory duty on Shrimps and prawns falling under PCT Code 0306.9500. Importers bringing products under this tariff classification will now pay 8 percent regulatory duty instead of the previous 10 percent, effective from the beginning of the new fiscal year. The revised regulatory duty structure forms part of Pakistanâ€™s broader customs tariff updates introduced for FY2026-27. Regulatory duties are imposed on selected imported goods to manage imports, protect domestic industries where necessary, and support the countryâ€™s trade and revenue objectives. Industry stakeholders believe that the reduction in regulatory duty may help lower import costs for seafood traders and processors, particularly businesses that depend on imported shrimp and prawn varieties. The revised rates could also improve the availability of imported seafood in the local market while offering some relief from import-related costs. The updated regulatory duty schedule became effective on July 1, 2026, and applies to all eligible imports cleared under the relevant Pakistan Customs Tariff codes. Importers are advised to ensure compliance with the revised customs rates while processing import consignments during the fiscal year 2026-27.

Date: 2026-07-05

Details: Written by Faisal Shahnawaz Armed suspects allegedly open fire on Pakistan Customs team during anti-smuggling raid in Hayatabad before fleeing with suspected smuggled goods. PESHAWAR: Two Pakistan Customs personnel were injured after armed suspects allegedly opened fire on an enforcement team during an anti-smuggling operation in Peshawarâ€™s Hayatabad area on Saturday, according to an incident report issued by the Collectorate of Customs (Enforcement), Peshawar. The incident took place at around 10:00 a.m. at Jahaz Chowk in Phase-III, Hayatabad, where the Intelligence & Special Checking Squad was conducting a routine operation targeting the transportation of smuggled goods. According to the report, a Customs team led by Inspector Muhammad Areeb intercepted two Chingchi rickshaws arriving from Karkhano Market on suspicion of carrying smuggled cloth. While officials were inspecting the vehicles, five individuals allegedly arrived at the scene in a white Suzuki Swift bearing registration number BDS-211. The incident report identified three of the suspects as Noor Rahman, son of Gul Rahman, Abdul Rahman, son of Noor Rahman, and Shakeel, son of Khan Sahib, while the identities of two other suspects have yet to be established. Customs authorities alleged that the suspects obstructed officials from performing their lawful duties and engaged in a physical altercation with the enforcement team. During the confrontation, Noor Rahman allegedly opened indiscriminate fire with a pistol on the Customs personnel. As a result, Sepoy Muhammad Luqman, son of Amir Jan, sustained a gunshot wound to his left arm near the elbow, while Sepoy Faisal Shah suffered a minor injury below his ear. Authorities said the suspects exploited the ensuing chaos to flee the scene in the Suzuki Swift along with the two Chingchi rickshaws that were allegedly transporting smuggled cloth. A First Information Report (FIR) has been registered against the nominated suspects at Police Station Hayatabad, and police have launched an investigation to arrest the accused and recover the escaped vehicles and the suspected smuggled goods. Pakistan Customs strongly condemned the attack, stating that violence against enforcement personnel would not deter the department from carrying out its legal responsibilities. The department reaffirmed its commitment to intensifying intelligence-led anti-smuggling operations and enforcing customs laws to protect government revenue, curb illicit trade and safeguard the countryâ€™s economic interests.

Date: 2026-07-04

Details: Written by Hamza Shahnawaz New sales tax order mandates clear retail price and tax display on Third Schedule goods to curb tax evasion ISLAMABAD: The Federal Board of Revenue (FBR) has launched a nationwide crackdown on manufacturers and importers concealing the mandatory retail price and sales tax on products covered under the Third Schedule of the Sales Tax Act, 1990, warning that non-compliant businesses will face legal action. In Sales Tax General Order (STGO) No. 8/2026, issued on Friday, the FBR said it had detected widespread violations where the printed retail price on Third Schedule goods was missing, illegible or deliberately concealed through packaging designs, stickers, wrappers, monograms and color schemes, making it difficult to determine the correct amount of sales tax payable. The tax authority said such practices undermine transparency, facilitate tax evasion and impede effective tax enforcement. Retail Price-Based Taxation Under Section 3(2)(a) of the Sales Tax Act, 1990, goods listed in the Third Schedule are subject to 18 percent sales tax calculated on the retail price. The law requires manufacturersâ€”and importers in the case of imported goodsâ€”to legibly, prominently and indelibly print or emboss both the retail price and the amount of sales tax on every article, packet, container, package, cover or label before the goods are supplied to the market. FBR Issues Strict Labeling Directions The General Order directs all manufacturers and importers of Third Schedule goods to ensure that the printed retail price and sales tax amount are: â€¢ Clearly printed and easily readable. â€¢ Prominently visible to consumers and tax officials. â€¢ Displayed in a font size and color that sharply contrasts with the background. â€¢ Permanent and incapable of being erased, altered or obscured. The FBR has specifically prohibited businesses from hiding or making the mandatory information unreadable through the use of stickers, wrappers, decorative packaging, monograms or any other material affixed to the product or its packaging. The tax authority instructed businesses to comply with all printing requirements â€œin letter and spirit.â€ Violators Face Legal Action The FBR warned that manufacturers and importers failing to comply with the new instructions will face enforcement proceedings under the relevant provisions of the Sales Tax Act, 1990, and the rules framed thereunder. According to the tax authority, the initiative is aimed at ensuring the accurate assessment and collection of sales tax on retail-priced goods while preventing revenue leakage through misleading or non-compliant packaging practices. Businesses May Seek Clarification The FBR advised taxpayers requiring guidance on the implementation or interpretation of the General Order to contact the IR-Policy Wing for clarification. The Sales Tax General Order (STGO) No. 9/2026 has taken immediate effect, making compliance mandatory for all manufacturers and importers of goods listed under the Third Schedule of the Sales Tax Act, 1990.

Date: 2026-07-04

Details: Written by Hamza Shahnawaz FBR and jewellers agree to strengthen tax compliance and establish liaison representatives at Regional Tax Offices KARACHI: Gold traders across Pakistan have been advised to pay 30% higher income tax than the previous year as part of efforts to improve tax compliance following discussions between the jewellery industry and the Federal Board of Revenue (FBR). The development follows a meeting between senior FBR officials, including Minister of State for Finance Bilal Azhar Kayani, and representatives of the All Pakistan Sarafa Gems and Jewellers Association (APSGJA). FBR, Jewellers Hold Tax Compliance Talks Speaking after the meeting, APSGJA President Qasim Shikarpuri described the discussions as positive and productive, saying both sides held detailed consultations on taxation issues affecting the countryâ€™s gold and jewellery sector and agreed to strengthen cooperation. Under the decisions reached, the association will nominate two representatives for each of Pakistanâ€™s 17 Regional Tax Offices (RTOs). These representatives will serve as liaison officers between the FBR and the jewellery trade to facilitate communication and help resolve tax-related matters. Traders Assured of Cooperation According to Shikarpuri, FBR officials assured the business community that traders complying with tax laws would not face unnecessary harassment and would receive full cooperation from the tax authorities. He urged jewellers whose tax returns do not accurately reflect their assets to revise their filings promptly. Traders who had submitted nil tax returns were also advised to correct their declarations, while all eligible taxpayers were encouraged to pay advance tax within the prescribed timelines. 30% Higher Tax Payment Advised Shikarpuri further advised traders who have already filed accurate tax returns to comply with FBR directives by paying 30% more income tax than the amount paid in the previous year. He stressed that all tax matters should be handled transparently and strictly in accordance with the law, urging traders to avoid making unofficial or â€œunder-the-tableâ€ payments. Instead, he encouraged members of the jewellery community to seek guidance through the associationâ€™s nominated representatives when dealing with tax-related issues. Outlook Shikarpuri expressed hope that stronger coordination and mutual trust between the FBR and the business community would help resolve longstanding issues and improve tax compliance across Pakistanâ€™s gold and jewellery sector. The initiative is expected to enhance communication between tax authorities and traders while supporting the governmentâ€™s broader efforts to broaden the tax base and increase revenue collection.

Date: 2026-07-04

Details: Written by Faisal Shahnawaz Government raises FBR allocation by 11% to strengthen tax administration, digitalization and revenue collection efforts ISLAMABAD: The federal government has allocated Rs85.60 billion to the Federal Board of Revenue (FBR) for the fiscal year 2026-27, increasing funding by 11 percent over the revised allocation for the previous year to support employee salaries, operational activities, digital transformation and tax administration reforms. According to the federal budget documents, the FBR has been allocated Rs85.604 billion under the functional classification of Executive and Legislative Organs, Financial and Fiscal Affairs, and External Affairs. This compares with the revised allocation of Rs77.018 billion for FY2025-26, while the original budget estimate for that year stood at Rs83.10 billion. Employee-related spending approaches Rs30 billion The government has earmarked Rs29.68 billion for employee-related expenses in FY2026-27, up from the revised estimate of Rs28.40 billion in the previous fiscal year. The allocation includes Rs12.54 billion for employee pay, comprising Rs6.42 billion for officers and Rs6.12 billion for supporting staff. In addition, Rs17.14 billion has been allocated for allowances, including Rs15.49 billion in regular allowances and Rs1.64 billion under other allowance heads. Operating expenses exceed Rs40 billion Operating expenses account for the largest share of the budget increase, with Rs40.50 billion allocated for FY2026-27, compared with the revised estimate of Rs32.66 billion in the preceding fiscal year. The enhanced allocation is expected to support the FBRâ€™s ongoing digitalization drive, tax administration reforms, enforcement initiatives, compliance monitoring, automation projects and other operational activities aimed at improving revenue collection and broadening the tax base. Higher allocations for pensions and grants The budget provides Rs1.22 billion for employee retirement benefits, compared with Rs1.06 billion in the revised allocation for FY2025-26. Funding for grants, subsidies and loan write-offs has also increased substantially to Rs5.57 billion, up from Rs3.43 billion in the previous fiscal year. Likewise, allocations under transfers have more than doubled to Rs1.05 billion, compared with the revised estimate of Rs436 million. Spending on physical assets reduced Despite the overall increase in funding, the government has significantly reduced allocations for physical assets. Only Rs1.59 billion has been earmarked for physical assets during FY2026-27, down sharply from the revised estimate of Rs4.73 billion and the original budget estimate of Rs6.91 billion for FY2025-26. Meanwhile, Rs6.00 billion has been allocated for repairs and maintenance, slightly lower than the revised expenditure of Rs6.30 billion recorded in the previous fiscal year. Focus on stronger tax administration The increased budget allocation reflects the governmentâ€™s continued emphasis on strengthening Pakistanâ€™s tax administration through higher operational funding, enhanced digital infrastructure and improved institutional capacity. The additional resources are expected to help the FBR accelerate digital transformation, strengthen enforcement, improve taxpayer services, expand the tax base and support efforts to achieve the ambitious revenue collection target set for FY2026-27.

Date: 2026-07-04

Details: Published July 4, 2026 Updated about 6 hours ago By Reuters BENGALURU: Asian equities rebounded on Friday as investors welcomed softer-than-expected US jobs data that eased concerns about an imminent interest-rate hike by the Federal Reserve, with South Korean stocks surging 5percent. The MSCI EM Asia index climbed 2percent during the day, largely driven by the jump in the tech-heavy KOSPI index, which triggered a â€œsidecarâ€ trading curb in South Korea. Chipmakers Samsung Electronics and SK Hynix added between 7percent and 9percent. The KOSPIâ€™s rebound made up most of the indexâ€™s 8percent drop on Thursday, which had also triggered a sidecar curb, underscoring the AI-driven volatility in South Korean equity markets. A gauge tracking KOSPI volatility jumped to 90.96 from 84 the previous day. Stocks in Taiwan, the largest market by weight in the index, advanced marginally. TSMC, the worldâ€™s top contract chipmaker, traded slightly lower. Data released overnight showed US job growth slowed sharply in June and payroll gains for the prior two months were revised lower, pointing to a cooling labour market that dampened expectations of a near-term Federal Reserve rate hike. Fed funds futures are pricing an implied 46.8percent probability that the US central bank will keep rates steady at its meeting on September 15 to 16, compared to a 35.8percent chance a day earlier, according to the CME Groupâ€™s FedWatch tool. â€œLabour market data cooled modestly, allowing the market to hover in Goldilocks mode,â€ DBS analysts said in a note. â€œWhile the Federal Reserve tightening is priced as a base case, the urgency for tightening has diminished somewhat for the immediate term and should provide some comfort for sentiment.â€ In Southeast Asia, Jakartaâ€™s main equities gauge rose 2.6percent, while Thailandâ€™s benchmark index added 1.7percent to a more than three-year high, mainly driven by Nvidia-supplier Delta Electronics Thailand, which rose around 3percent.

Date: 2026-07-04

Details: Published July 4, 2026 Updated about 6 hours ago By Reuters CALGARY/LONDON: Oil prices were little changed for the week as traders held on to hopes for a successful outcome from attempts to secure peace between the US and Iran. Brent futures were up 14 cents, or 0.19 percent, at USD 71.94 a barrel by 2:31 p.m. ET (1831 GMT), ending the week just 5 cents lower than last Fridayâ€™s close. West Texas Intermediate was up 9 cents, or 0.13 percent, at USD 68.78 a barrel. Trading was light as US markets were closed ahead of the US Independence Day holiday on Saturday. On Thursday, the two oil benchmarks had hit their lowest levels since before the US-Israeli war with Iran began in late February. Investor hopes for a full reopening of the Strait of Hormuz are being buoyed by peace talks between the US and Iran, Commerzbank analysts said. â€œThe US-Iran dealmaking process remains fragile but continues for now, as the question of Strait of Hormuz tolls and administration remains contentious,â€ Citi analysts wrote. â€œWe expect the MoU (memorandum of understanding) to hold, not because trust has suddenly emerged, but because the incentives to break are poor for both sides,â€ Citi analysts said. Some shipping has resumed through the Strait of Hormuz, as called for under the initial US-Iranian deal, but uncertainty is high after the two countries exchanged strikes last weekend following an Iranian attack on a cargo ship. With the prospect of shipping more oil, Gulf producers are working to increase output. OPEC output in June rose by 3.3 million barrels per day month-on-month, according to a Reuters survey. Kuwaitâ€™s oil production rose sharply to 1.65 million bpd in June, from 580,000 bpd in May, a source close to the matter told Reuters on Thursday. At least five supertankers carrying a total of 10 million barrels of Saudi oil have left the strait and Saudi Aramco has switched to spot pricing from longer-term contracts to speed sales in Asia, according to trade sources and shipping data. â€œOverall, the recovery in Middle Eastern supply is outpacing our initial expectations while Chinese-depressed import demand remains weak,â€ said Rory Johnston, founder of the Commodity Context newsletter.

Date: 2026-07-03

Details: â€¢ China seems to have taken the concept to heart, especially when it comes to energy production and the power needed to run its massive economy Published July 3, 2026 Updated about 12 hours ago By Reuters LITTLETON, Colorado: The latest data dump from the Energy Institute has landed, and as ever, itâ€™s an energy analystâ€™s dream: sprawling, consistent and packed with signals about where the global system is heading. The 75th edition of the Statistical Review of World Energy doesnâ€™t point to a single neat narrative. Instead, the data reveals a system pulling in multiple directions â€” geographically, technologically and structurally. CHINA: THE ULTIMATE â€˜ENERGYMAXXERâ€™ The slang term â€œmaxxerâ€ comes from internet culture and means someone or something that is â€œmaximizingâ€ a specific trait to an extreme level. China seems to have taken the concept to heart, especially when it comes to energy production and the power needed to run its massive economy. The contrast in energy and electricity output between China and the U.S. â€” the worldâ€™s two largest economies â€” highlights Chinaâ€™s preeminence. Chinaâ€™s total energy supply rises from around 100 exajoules in 2010 to roughly 165 exajoules by 2025, while the United States barely moves from the low-90s. That gap alone is striking. Electricity is where the divergence becomes decisive. Chinaâ€™s generation surges past 10,500 terawatt hours â€” more than double U.S. output, which inches up toward 4,800 â TWh. Takeaway: The center of gravity in global energy â€” especially power â€” has already shifted. DATA CENTERS ARE NOW A FIRST-ORDER DEMAND DRIVER One of the clearest â€œnewâ€ stories in the dataset is the surge in data center power demand. North America leads, jumping from roughly 185 TWh in 2020 to nearly 320 TWh by 2025. Asia climbs fast toward 270 TWh, while Europe trails at about 145 TWh. The growth numbers are even more striking: North America alone adds more than 60 TWh in 2025. Takeaway: In advanced economies, digital infrastructure is becoming the marginal driver of electricity demand. BATTERY STORAGE IS SCALING â€” BUT ASIA DOMINATES Battery energy storage has moved from niche to system-critical in just a few years. Global capacity jumps sharply after 2020 to around 300,000 megawatts by 2025. But the geography is lopsided: Asia accounts for the majority of that buildout, installing more than the rest of the world combined. North America and Europe are expanding quickly, but remain a clear second tier in cumulative capacity. Takeaway: The tools of the energy transition are scaling â€” but not evenly distributed. CLEAN POWER LEADERS AND LAGGARDS The â€œclean vs dirtyâ€ electricity chart underscores just how uneven progress is across countries. France sits at the top with roughly 95% clean power coming â from its nuclear fleet, with Brazil and Canada not far behind. Much of Europe clusters in the 50% to 80% range. At the other end, several major systems remain overwhelmingly fossil-fuel based. Saudi Arabia generates only a small fraction of electricity from clean sources, while economies like Indonesia, South Africa and Malaysia also remain heavily carbon-intensive. Takeaway: There is no single global transition â€” only very different national ones. EMISSIONS CUTS AND GROWTH Finally, emissions data reveals a stark split between who is cutting and who is adding. The United States stands out as the largest cumulative reducer of energy-related carbon dioxide (CO2) emissions since 2010, with major declines also across Europe and Japan. But those â gains are more than offset by increases elsewhere. China dominates emissions growth by a wide margin, with India a distant second and a long tail of emerging economies also adding to the total. Takeaway: The global emissions story is no longer about whether cuts are happening â€” but where.

Date: 2026-07-03

Details: â€¢ Coal-fired power generation rose about 14% year-on-year to 120.20 billion kWh in June Published July 3, 2026 Updated about 12 hours ago By Reuters NEW DELHI: Indiaâ€™s coal-fired power generation surged to a near-three-year high in June because of increased cooling demand from higher temperatures from an extended heatwave and below-average monsoon rainfall, government data showed. Indiaâ€™s total electricity generation in June rose 10.4% from a year ago to 178.31 billion kilowatt-hours, according to Reuters calculations of daily data from federal grid regulator Grid-India. Coal-fired power generation rose about 14% year-on-year to 120.20 billion kWh in June, the highest since November 2023, the data showed. Last month, India logged its fifth-driest June since 1901 due to a strong El Nino pattern, with searing heat driving demand for cooling, according to weather office data. The El Nino is a weather phenomenon caused by a warming of the Pacific Ocean waters off South America that tends to cause hot, dry weather in South and Southeast Asia. The demand for coal power has surged in the past two months to meet evening air-conditioning demand as a lack of battery storage for solar generation limits solar power usage at that time despite an overall increase in Indiaâ€™s renewable power generation. Indiaâ€™s thermal coal imports drop to 4-year low as green power rises The share of renewable power generation in Indiaâ€™s power mix in June rose to a record 19%, the data showed. Overall renewable generation rose to 33.81 billion kWh in June, up 23% from a year earlier. Despite new renewable capacity additions, thermal power generation could increase this fiscal year to meet higher electricity demand in the peak consumption period, said Ankit Jain, vice president, co-group head for corporate ratings at credit rating agency ICRA. The lower monsoon rainfall also contributed to lower hydropower generation in June, with output falling 24.4% from a year earlier to 14 billion kWh, the data showed, the steepest decline since February 2024. Natural-gas-based generation dropped 30.1% in June from a year ago, the data showed. In 2025, Indiaâ€™s coal power generation fell annually for the first time since the COVID-19 lockdowns in 2020.

Date: 2026-07-02

Details: Budget 2026-27 Taxation July 2, 2026Hamza Shahnawaz Finance Act 2026 increases withholding tax from 6% to 7% on a broad range of service payments ISLAMABAD: The Finance Act, 2026 has increased the withholding income tax rate on payments for a wide range of services from 6 percent to 7 percent, with the revised rate taking effect from July 1, 2026, under amendments to Section 153 of the Income Tax Ordinance, 2001. The amendment authorises the Federal Board of Revenue (FBR) to collect withholding tax at the higher rate on payments covered under clause (b) of sub-section (1) of Section 153. Under the revised law, businesses making payments for specified services are required to deduct tax at 7 percent of the gross amount payable before making payments to service providers. The increased withholding tax applies to a broad range of services, including transport, freight forwarding, air cargo, courier, manpower outsourcing, hotel, security guard, software development, information technology (IT), IT-enabled services, tracking, and advertising services, excluding advertisements placed through print or electronic media. The revised rate also covers payments for share registrar services, engineering and architectural services, warehousing, services provided by non-banking finance companies, data services offered under licences issued by the Pakistan Telecommunication Authority (PTA), telecommunication infrastructure (tower) services, car rental services, and building maintenance services. In addition, the 7 percent withholding tax will apply to services rendered by the Pakistan Stock Exchange (PSX), the Pakistan Mercantile Exchange (PMEX), inspection, certification, testing and training services, oilfield services, telecommunication services, collateral management services, travel and tour services, Real Estate Investment Trust (REIT) management services, and services provided by the National Clearing Company of Pakistan Limited (NCCPL). The increase forms part of the governmentâ€™s revenue-enhancing measures introduced through the Finance Act, 2026 to strengthen tax collection during the fiscal year 2026â€“27. The higher withholding tax is expected to increase advance tax collections while affecting cash flows for businesses and service providers operating across multiple sectors. Tax experts note that the amendment expands the governmentâ€™s efforts to boost revenue mobilisation by increasing the advance tax burden on service-related transactions, while taxpayers eligible for adjustment or credit under the Income Tax Ordinance may continue to claim relief in accordance with the applicable provisions of the law.

Date: 2026-07-02

Details: Budget 2026-27 Taxation July 2, 2026Hamza Shahnawaz Finance Act 2026 introduces lower tax rates and revised income slabs for salaried individuals from FY2026-27 ISLAMABAD: The revised income tax rates for salaried individuals have officially come into force from July 1, 2026, following the enactment of the Finance Act, 2026, introducing a new tax structure for the fiscal year 2026-27. The new tax regime aims to provide relief to lower and middle-income salaried employees while implementing revised tax slabs for higher income groups as part of the federal governmentâ€™s budgetary measures. Under the Finance Act, salaried individuals with an annual taxable income of up to Rs600,000 will continue to enjoy complete exemption from income tax. Taxpayers earning more than Rs600,000 but not exceeding Rs1.2 million annually will pay income tax at 1 percent of the amount exceeding Rs600,000. For salaried persons with annual taxable income exceeding Rs1.2 million but not more than Rs2.2 million, the tax liability has been fixed at Rs6,000, plus 11 percent of the amount exceeding Rs1.2 million. Individuals earning above Rs2.2 million and up to Rs3.2 million will pay Rs116,000, in addition to 20 percent of the amount exceeding Rs2.2 million. Those with annual taxable income of more than Rs3.2 million but not exceeding Rs4.1 million will be required to pay Rs316,000, plus 25 percent of the amount exceeding Rs3.2 million. For taxpayers earning more than Rs4.1 million and up to Rs5.6 million, the Finance Act prescribes a tax of Rs541,000, along with 29 percent of the amount exceeding Rs4.1 million. Individuals whose annual taxable income exceeds Rs5.6 million but does not exceed Rs7 million will pay Rs976,000, plus 32 percent of the amount exceeding Rs5.6 million. For the highest income bracket, salaried individuals earning more than Rs7 million annually will be liable to pay a fixed tax of Rs1.424 million, in addition to 35 percent of the amount exceeding Rs7 million. The revised salary tax slabs form part of the governmentâ€™s broader fiscal reforms introduced through the Finance Act, 2026, which became effective on July 1, 2026. The new rates apply to taxable salary income earned during the fiscal year 2026-27 and are expected to influence monthly withholding tax deductions by employers across Pakistan.

Date: 2026-07-02

Details: â€¢ On Thursday, MSCIâ€™s broadest index of Asia-Pacific shares outside Japan fell 0.8%, while Japanâ€™s Nikkei also dropped 1.1%, adding to losses from the first day of the quarter Published July 2, 2026 Updated 20 minutes ago By Reuters SYDNEY: Asian shares skidded on Thursday as investors rotated out of chipmakers following a stellar quarter, while currency and bond markets braced for US jobs data that could gives hints about the risk of interest rate hikes. Oil prices hit new four-month lows, with Brent crude off 0.8% to $71 a barrel, as U.S. President Donald Trump said talks with Iran had gone well in Qatar, and as more oil tankers transited through the Strait of Hormuz. On Thursday, MSCIâ€™s broadest index of Asia-Pacific shares outside Japan fell 0.8%, while Japanâ€™s Nikkei also dropped 1.1%, adding to losses from the first day of the quarter. South Koreaâ€™s KOSPI sank 2.7%, extending a 2% slide from Wednesday. That followed an eye-watering 68% surge in the second quarter on soaring AI-related demand for memory chips. SK Hynix plunged 7.7% and Samsung tumbled â 6.2%. That followed a report that Meta Platforms is building a cloud business to sell excess AI computing capacity, which sent the Facebook ownerâ€™s shares up 8.8% overnight. Hong Kongâ€™s Hang Seng bucked the trend in Asia with a gain of 1.8%. Foreign investors sold Asian equities at the fastest pace in at least 16 years in the first half of 2026, as the blistering AI-driven rally forced them to trim their biggest winners in South Korea and Taiwan and hunt for lower-priced laggards. Investor attention is on US non-farm payrolls data due on Thursday this month due to a holiday on Friday for Independence Day, which falls on a Sunday this year. Economists polled by REUTERS expect a rise of 110,000 jobs for June, but forecasts range widely from gains of 25,000 to 200,000, suggesting the chance for a surprise is high. The jobless rate is forecast to stay steady at 4.3%. â€œFor the equity traders, there is probably no â single rigid playbook to work from. Ideally, equity players want a Goldilocks outcome: respectable job creation, a stable unemployment rate,â€ said Chris Weston, head of research at Pepperstone. â€œAnything that avoids a marked increase in the implied probability of near-term rate hikes is likely to be welcomed by equity bulls.â€ At the Sintra Forum, Federal Reserve Chair Kevin Warsh said inflation risks had eased recently, offering only short-lived relief to Treasuries. Warsh also said he will stick firmly to the 2% inflation target and â€œdisappointâ€ anyone who expects loose â monetary policy. Markets currently price in about 80% odds of a rate hike in September. Treasury yields have been climbing as traders braced for a potentially strong jobs number, which could see bets of a near-term rate hike ramp up.. US 2-year yields rose 1 basis point (bp) on Thursday to 4.1785%, and were up 9 bps this week â so far. 10-year yields held at 4.4811% after climbing 10 bps this week. Higher Treasury yields kept the U.S. dollar supported. The euro dipped 0.4% overnight against the greenback after European Central Bank President Christine Lagarde said inflation and growth risks were now becoming more broadly balanced. The euro was steady in Asian â hours on Thursday at $1.1379. The yen was little changed at 162.59 per dollar, having hit a fresh 40-year low of 162.84 on Wednesday. The slide has drawn the usual warnings of intervention from Tokyo. At the same time, the impact of interventions in April and May proved short-lived, despite Japanese authorities spending almost 12 trillion yen. Gold bounced 0.5% to $4,050 an ounce following a very tough quarter.

Date: 2026-07-02

Details: Published July 2, 2026 Updated about an hour ago By Recorder Report KARACHI: Mian Zahid Hussain, President Pakistan Businessmen and Intellectuals Forum (PBIF) & All Karachi Industrial Alliance (AKIA), Chairman National Business Group Pakistan (NBG) and Chairman FPCCI Policy Advisory Board has said that a permanent working mechanism comprising ministries, regulatory bodies, customs authorities, chambers of commerce, banking experts, logistics companies and private-sector representatives from Pakistan and Iran should be established to monitor the pace of implementation of decisions. Hussain urged the Government of Pakistan to move forward in a coordinated manner on the economic agenda agreed during the recent and previous visits of the Iranian president. He said that the USD 10 billion bilateral trade target can become a reality, provided that announcements are linked with practical steps, clear timelines, private-sector participation and facilitation of border trade. He said that the economic benefits of this process can directly reach the people, traders, industrialists, residents of border areas and the national exchequer. He termed the recent visit of Iranian President Dr Masoud Pezeshkian to Pakistan an important development in the continuity of Pakistan-Iran relations, confidence-building and the implementation of the already agreed economic cooperation agenda. He said that under the leadership of Prime Minister Muhammad Shehbaz Sharif, Pakistan has played an active and responsible role for peace, economic connectivity and diplomatic balance in the region, while the effective role of Field Marshal Syed Asim Munir in regional security, border stability and peace initiatives has further highlighted Pakistanâ€™s strategic importance. Hussain said that the historical, cultural, religious and geographical proximity between Pakistan and Iran must now be transformed into a practical economic partnership so that bilateral trade, gas pipeline, energy cooperation, border connectivity and private-sector collaboration can be expanded on solid foundations. He further added that during the 2025 visit of Iranian President Dr Masoud Pezeshkian to Pakistan, both countries exchanged 12 agreements and memorandums of understanding in various sectors, while the target was also set to increase bilateral trade from around USD3 billion to USD10 billion. He said that following the recent Iran-US conflict, the current visit has given fresh diplomatic importance to this economic roadmap and has sent a clear message that both countries want to move beyond announcements and give practical shape to cooperation in trade, investment, border facilitation, energy, agriculture, information technology, communications and people-to-people contacts. Hussain said that early finalisation of the Free Trade Agreement would be an important milestone for the business communities of both countries. He said that unless the ground-level problems of trade are resolved, achieving the USD10 billion bilateral trade target will remain difficult and strengthening border markets and border trade facilities at Gabd-Rimdan, Mand-Pishin and other crossing points can increase legal trade, reduce smuggling, create lawful employment opportunities for the local population and promote economic activity in border areas. Hussain also welcomed the decision of the Federal Board of Revenue to declare Taftan Railway Station as a land customs station, saying that this step would facilitate import and export clearance through rail, reduce transportation costs, accelerate customs procedures and promote Pakistan-Iran border trade in a more organised manner. Hussain further said that barter trade, or trade through exchange of goods, is a practical option for both countries, especially in circumstances where international payments, currency exchange and banking channel issues continue to affect the pace of trade. He said that Pakistan is facing serious challenges including energy shortages, high production costs, expensive electricity and pressure on industry, while Iran can become an important partner for Pakistan in energy, petroleum products, border electricity, transit trade and regional connectivity. If this cooperation is advanced in a transparent, legal and sustainable manner, Pakistanâ€™s industry, agriculture and export sectors can benefit significantly. He said that Pakistan and Iran are natural trade bridges between South Asia, Central Asia and the Middle East. Therefore, Gwadar and Chabahar should be viewed in the context of regional connectivity, transit trade and economic cooperation rather than competition. He said that the progress made and protocols agreed during the 22nd Pakistan-Iran Joint Economic Commission should also be pursued rapidly. Copyright Business Recorder, 2026

Date: 2026-07-01

Details: Published July 1, 2026 Updated about 2 hours ago By BR Research Pakistanâ€™s cement industry is ending FY26 on a firmer footing. Total dispatches are estimated to reach just over 50 million tons for the year, growing 7 percent from FY25 and marking the second consecutive year of recovery after a prolonged downturn. This is driven almost entirely by domestic demand, with local dispatches up 9 percent, even as exports contract by 3 percent. The broader picture is that Pakistanâ€™s construction cycle has been slowly stabilizing with easing inflation, reduced interest rates and better business confidence that revived private construction activity. This allowed domestic cement demand to recover from the depressed levels witnessed between FY22 and FY25. At the same time, total dispatches remain well below the levels producers had envisioned when they embarked on an aggressive expansion drive several years ago. Installed capacity has continued to grow while consumption has struggled to keep pace, leaving the industry with one of the largest excess-capacity overhangs in its history. Capacity utilization is expected to improve to around 59 percent this year from 56 percent last year, but still below reasonable thresholds of 65 percent. This imbalance has been years in the making. During the construction boom that accompanied the CPEC investment cycle and the FY21 housing incentives under Naya Pakistan Housing Program, cement manufacturers raced to expand production lines in anticipation of sustained growth in infrastructure and residential demand. Instead, macroeconomic instability, political uncertainty and repeated stabilization programmes sharply slowed construction activity before the new capacity could be absorbed. For several years exports were helping cushion the blow. Overseas shipments took their contribution up by easing some of weakness in domestic demand but that cushion is thinner. Export dispatches are expected to decline this year as regional competition intensifies and freight economics become less favorable, particularly for southern manufacturers shipping through sea routes. June data suggests that sea-based exports from the south remain considerably weaker than a year ago despite an overall monthly increase in export dispatches. The shift back toward domestic sales is commercially better for producers. Local markets generally offer stronger pricing power and significantly lower logistics costs than exports. But it also leaves the industryâ€™s fortunes increasingly tied to Pakistanâ€™s own construction sector, where demand remains heavily dependent on government development spending and housing activity. In the budget 2027, the government has announced a series of tax measures aimed at stimulating the construction and real estate sectors, while a subsidized housing finance scheme is expected to support home ownership. Lower financing costs should gradually encourage private developers to restart projects that had become financially unviable during the high-interest-rate period. Whether these initiatives are sufficient to trigger another construction boom remains uncertain. Housing affordability continues to deteriorate as household incomes struggle to keep pace with rising living costs and taxation. Public sector development spending also remains constrained by fiscal consolidation requirements, limiting the governmentâ€™s ability to generate the kind of infrastructure-led demand that historically lifted cement consumption. The pace of domestic demand growth is unlikely to be strong enough to absorb Pakistanâ€™s substantial surplus production capacity anytime soon. Without a sustained increase in large-scale infrastructure investment, a meaningful housing boom or a revival in export competitiveness, utilization rates are expected to improve only incrementally over the next few years. But for producers, that may not be a bad outcome. The countryâ€™s larger cement manufacturers have spent the past several years strengthening balance sheets, reducing costs and diversifying export markets where possible. Perhaps they no longer require another FY21-style demand surge to remain profitable. What they do need is a stable domestic economy that steadily adds a few million tons of annual demand rather than another short-lived construction frenzy. That may ultimately prove to be a healthier foundation for the industryven if it means much of Pakistanâ€™s cement capacity continues to cast a long shadow over the market. Copyright Business Recorder, 2026

Date: 2026-07-01

Details: Budget 2026-27 Taxation July 1, 2026Hamza Shahnawaz Taxpayers can avoid surcharge by pledging not to acquire any property for six months ISLAMABAD: In a significant relief measure for individual taxpayers, the Finance Act, 2026 has introduced a provision allowing the Federal Board of Revenue (FBR) to waive the late return filing surcharge for individuals who submit a prescribed undertaking restricting future property purchases. The amendment to the Income Tax Ordinance, 2001 offers eligible taxpayers a chance to avoid the surcharge imposed on late filing of income tax returns, provided they agree to refrain from acquiring any property for a specified period. Six-Month Property Restriction Required Under the newly introduced provision, the requirement to pay the late return filing surcharge will not apply to an individual who furnishes an undertaking before the Commissioner of Inland Revenue. In the undertaking, the taxpayer must declare that they will not purchase, acquire, or obtain ownership or beneficial interest in any property for six months from the date the undertaking is submitted. The declaration must be furnished in the form prescribed by the FBR. Relief Linked to Compliance The amendment is designed to provide relief to individuals who have failed to file their tax returns on time while encouraging future tax compliance. Instead of immediately imposing the surcharge, the law allows qualifying individuals to obtain an exemption by voluntarily accepting temporary restrictions on acquiring immovable or movable property. Tax practitioners believe the measure could encourage more non-filers and late filers to regularise their tax affairs without facing an immediate financial burden. Part of Wider Tax Reforms The relief comes as part of the governmentâ€™s broader package of tax reforms introduced through the Finance Act, 2026. While the legislation contains several stringent enforcement measuresâ€”including enhanced banking data sharing, digital verification of tax information, and tougher penalties for false tax credit claimsâ€”it also includes targeted incentives aimed at improving voluntary compliance. Officials expect the new provision to encourage more individuals to file overdue income tax returns, broaden the tax base, and increase documentation of the economy without relying solely on punitive measures. However, taxpayers opting for the relief must strictly comply with the six-month restriction on acquiring property, as the undertaking becomes a legally binding declaration under the Income Tax Ordinance, 2001.

Date: 2026-07-01

Details: Budget 2026-27 Taxation July 1, 2026Hamza Shahnawaz Taxpayers claiming unverifiable excess withholding tax credits will now pay a penalty equal to the overstated amount ISLAMABAD: The government has intensified its campaign against tax fraud by introducing a 100 percent penalty on taxpayers who falsely claim excess withholding tax credits under the Finance Act, 2026, signaling a tougher enforcement regime backed by digital verification. The amendment to the Income Tax Ordinance, 2001 makes it financially costly for taxpayers to inflate withholding tax credits beyond the amount actually deducted and deposited with the Federal Board of Revenue (FBR). Under the newly inserted provision, any taxpayer claiming a tax credit in excess of the amount verifiably deducted by a withholding agent will face a penalty equal to the entire amount of the excess credit claimed. FBR to Verify Every Claim The Finance Act, 2026 authorises the FBR to verify withholding tax credits through its computerised database and other available evidence before allowing taxpayers to claim the adjustment. The law provides: â€œWhere a person claims a credit in respect of tax withheld at source under any provision of this Ordinance in excess of the amount verifiably deducted and deposited by the withholding agent, as confirmed through the Boardâ€™s computerised system or otherwise, such person shall pay a penalty equal to the amount of excess credit claimed.â€ This means taxpayers can no longer rely solely on withholding certificates or self-declared figures if the amounts are not supported by the FBRâ€™s digital records. Zero Tolerance for Inflated Tax Credits Tax experts say the amendment represents a zero-tolerance policy against fraudulent withholding tax claims, which have long been a concern for tax authorities. For example, if a taxpayer claims Rs500,000 as withholding tax credit but the FBRâ€™s records confirm only Rs350,000 was actually deducted and deposited, the excess claim of Rs150,000 will attract an additional Rs150,000 penalty, effectively doubling the financial impact of the false claim. The penalty applies regardless of whether the discrepancy arises from deliberate misreporting or unsupported claims that cannot be verified through the FBRâ€™s systems. Digital Verification Takes Center Stage The new measure forms part of a broader package of tax administration reforms introduced through the Finance Act, 2026, aimed at improving compliance through technology-driven enforcement. The FBR is increasingly relying on computerised cross-matching of withholding tax statements filed by withholding agents with tax returns submitted by taxpayers. Any mismatch identified by the automated system can trigger recovery proceedings and the newly introduced penalty. Officials believe the tougher provision will discourage inflated tax credit claims, improve the accuracy of income tax returns, and protect government revenue from fraudulent adjustments. Stronger Compliance Framework The penalty complements several other digital enforcement measures introduced in the Finance Act, 2026, including expanded access to banking information, centralised data-sharing mechanisms, and enhanced algorithm-based risk assessment. With these reforms, the government aims to build a more transparent and technology-driven tax administration system where tax credits, deductions, and financial transactions are verified electronically before being accepted, significantly reducing opportunities for manipulation and tax evasion.

Date: 2026-07-01

Details: Budget 2026-27 Taxation Top stories July 1, 2026Hamza Shahnawaz Amendment to Income Tax Ordinance establishes centralized banking data repository for algorithm-based tax compliance checks ISLAMABAD: The Finance Act, 2026 has significantly strengthened Pakistanâ€™s digital tax enforcement framework by empowering the State Bank of Pakistan (SBP) to establish a centralized repository of banking data and share financial information relating to high-risk persons with the Federal Board of Revenue (FBR). The amendment to Section 175AA of the Income Tax Ordinance, 2001 expands the legal framework governing the exchange of banking and tax information by inserting a new clause authorising the SBP to establish, operate and maintain a secure virtual repository of banking records. The measure forms part of the governmentâ€™s broader strategy to use technology, automated analytics and digital data matching to improve tax compliance, detect concealed income and strengthen documentation of the economy. SBP to maintain centralized banking repository Through the Finance Act, 2026, Parliament inserted clause (c) into Section 175AA, authorising the SBP to establish, operate and maintain a secure centralized virtual repository containing banking records and financial transaction data maintained by scheduled banks. The repository will maintain banking information linked through unique identifiers, enabling algorithm-based matching of financial data with taxpayersâ€™ declarations. Under the amended law, the SBP will collect, process and provide relevant data and analytical results to the FBR in accordance with procedures prescribed by the Board. Enhanced exchange of banking and tax information Section 175AA already permits the FBR to share tax declaration information with scheduled banks for algorithmic verification. Banks are required to compare tax declarations with their own banking records and identify cases where financial information does not correspond with the prescribed algorithms. With the insertion of the new clause, the SBP assumes a central role by creating the technological infrastructure required to consolidate banking information and facilitate secure data exchange between scheduled banks and the FBR. The amended provision overrides the relevant provisions of the Banking Companies Ordinance, 1962, the State Bank of Pakistan Act, 1956, Section 216 of the Income Tax Ordinance, 2001, and other applicable laws to the extent necessary for implementing the information-sharing mechanism. Shift towards digital tax enforcement The Finance Act, 2026 reinforces the governmentâ€™s growing reliance on artificial intelligence, automated risk assessment and centralized digital databases to strengthen tax administration. The integrated banking and tax information is expected to enable the FBR to identify discrepancies between declared income and actual financial activity, allowing the tax authority to focus compliance efforts on high-risk taxpayers through data-driven risk analysis rather than broad-based audits. Officials believe the centralized repository will improve the efficiency and accuracy of tax compliance checks while reducing manual intervention during the initial risk assessment stage. Confidentiality safeguards The amended law also provides that all information exchanged under Section 175AA shall be used exclusively for tax administration and related purposes. It further requires that banking information received through the centralized system remain confidential and protected against unauthorised disclosure or misuse, while allowing its use for tax enforcement in accordance with the law. The amendment complements other provisions introduced through the Finance Act, 2026 requiring banks and Electronic Money Institutions (EMIs) to report high-value financial transactions to the FBRâ€™s Central Data Hub, further advancing Pakistanâ€™s transition towards a technology-driven and data-centric tax administration system.

Date: 2026-07-01

Details: Budget 2026-27 Taxation July 1, 2026Hamza Shahnawaz Banks and electronic money institutions must report transactions exceeding Rs100 million every six months under new digital compliance regime ISLAMABAD: The federal government has significantly expanded the Federal Board of Revenueâ€™s (FBR) powers to obtain financial information on high-value bank account holders under the Finance Act, 2026, marking one of Pakistanâ€™s most far-reaching reforms in technology-driven tax enforcement. The Finance Act has inserted a new Section 165AB into the Income Tax Ordinance, 2001, requiring banks and Electronic Money Institutions (EMIs) to electronically submit specified financial transaction data to the FBRâ€™s Central Data Hub for automated cross-matching with taxpayersâ€™ declared income and assets. The new provision overrides the Banking Companies Ordinance, 1962, the State Bank of Pakistan Act, 1956, the Protection of Economic Reforms Act, 1992, and any other conflicting laws, allowing the FBR to obtain designated banking information directly from financial institutions. Rs100 million reporting threshold Under the new law, banks and EMIs will be required to report account holders whose aggregate deposits or withdrawals exceed Rs100 million during a six-month reporting period across one or more accounts. The information to be submitted includes: â€¢ Opening and closing balances. â€¢ Details of deposits and withdrawals. â€¢ Peak credit balances. â€¢ Total credits during the reporting period. The reporting requirement applies to all categories of deposit accounts, including current accounts, savings accounts, fixed deposits, term deposits, call deposits and other deposit accounts maintained by individuals or entities. Automated screening before FBR access The Finance Act introduces an automated screening mechanism intended to limit human access to banking data during the initial review stage. According to the law, the information uploaded by financial institutions will first be processed entirely through the Central Data Hub using algorithmic cross-matching. At this stage, the financial information will not be visible to income tax officials. The system will compare banking transactions with taxpayersâ€™ declared income, assets and other tax records to identify significant discrepancies. Only where the automated system detects a substantial mismatch will the case be transferred to the FBRâ€™s Compliance Risk Management (CRM) system for further examination. Any subsequent proceedings will be handled through the National Faceless Centre, reducing direct interaction between taxpayers and tax officials. Confidentiality safeguards The Finance Act also places a statutory obligation on the FBR to maintain strict confidentiality of all banking information received from financial institutions. Under the law, the Board must ensure that such information is not disclosed or misused and remains protected under applicable confidentiality provisions governing commercial banking, except where disclosure is specifically authorised under the new section. Reporting schedule Financial institutions will submit data twice each financial year under the following schedule: â€¢ July 1 to December 31: Report to be submitted by January 31. â€¢ January 1 to June 30: Report to be submitted by July 31. Strengthening digital tax enforcement The Central Data Hub, operated through Pakistan Revenue Automation Limited (PRAL), will function as a central repository for banking information and tax records. Using advanced analytics, the integrated Compliance Risk Management system will identify potential tax compliance risks, including under-reporting of income, understatement of sales, overstatement of expenses and undisclosed assets or financial transactions. Tax experts believe the new reporting framework represents a significant shift towards data-driven tax administration, enabling the FBR to detect concealed taxable income more efficiently while reducing reliance on manual investigations. The measure is expected to improve tax compliance, broaden documentation of the economy and strengthen the governmentâ€™s ability to identify high-value financial activity through digital data

Date: 2026-07-01

Details: Taxation Top stories July 1, 2026Faisal Shahnawaz SRO 1064(I)/2026 updates RD structure on hundreds of imported goods with effect from July 1, 2026 ISLAMABAD: The Federal Board of Revenue (FBR) has notified revised regulatory duty (RD) rates on imported goods for the fiscal year 2026-27 through SRO 1064(I)/2026, which came into effect on July 1, 2026. The notification, issued on June 30, 2026, supersedes SRO 1152(I)/2025 and has been promulgated under sub-section (3) of Section 18 of the Customs Act, 1969, authorising the levy of regulatory duty on a wide range of imported products. According to the notification, the revised regulatory duty schedule covers hundreds of tariff lines across multiple sectors, including agriculture, food products, chemicals, plastics, textiles, steel, machinery, ceramics, glassware, paper products, electrical appliances and various industrial and consumer goods. The updated regulatory duty rates range from 0.8% to 20%, depending on the product category. In addition, certain imported goods are subject to specific fixed duties instead of ad valorem rates, while some products carry different duty rates based on their respective Pakistan Customs Tariff (PCT) classifications. Among agricultural imports, the revised schedule imposes regulatory duties on live animals, poultry, fish, dairy products, vegetables, fruits, cereals, processed food items, edible oils, confectionery, beverages and tobacco products. Duty rates on these products generally range between 4% and 20%, with higher rates applicable to selected imported fruits, processed foods and luxury food items. The notification also revises regulatory duties on industrial raw materials and intermediate goods, including chemicals, plastics, rubber products, paper, packaging materials, textiles, garments, footwear, iron and steel products, aluminium products, ceramics, glass and construction materials. A broad range of consumer productsâ€”including cosmetics, toiletries, kitchenware, luggage, furniture-related items and household appliancesâ€”will continue to attract regulatory duty under the updated schedule. The FBR clarified that the revised duties apply to imports falling under the specified Pakistan Customs Tariff (PCT) codes listed in the notification. Importers will be required to pay the applicable regulatory duty on consignments cleared on or after July 1, 2026. The revised regulatory duty regime forms part of the governmentâ€™s customs tariff measures for FY2026-27 and is aimed at regulating imports, supporting domestic industries where necessary and strengthening revenue collection.

Date: 2026-07-01

Details: Taxation July 1, 2026Hamza Shahnawaz SRO 1063(I)/2026 introduces revised additional customs duty structure effective from July 1, 2026 ISLAMABAD: The Federal Board of Revenue (FBR) has notified revised additional customs duty (ACD) rates on the import of goods for the fiscal year 2026-27 through SRO 1063(I)/2026, effective from July 1, 2026. The notification has been issued under sub-section (5) of Section 18 of the Customs Act, 1969, superseding SRO 1151(I)/2025 dated June 30, 2025. Revised additional customs duty rates Under the new notification, the federal government has prescribed the following rates of additional customs duty: â€¢ 2% additional customs duty on goods falling under the 20% customs tariff slab. â€¢ 4% additional customs duty on specified goods classified under the 20% tariff slab, including certain petroleum products, plastics, chemicals, paper products, machinery and other notified tariff lines. â€¢ 2% additional customs duty on specified imports under various Pakistan Customs Tariff (PCT) codes and on goods imported under SROs 655(I)/2006 and 656(I)/2006. â€¢ 10% additional customs duty on goods falling under the 25% tariff slab and higher tariff slabs, as well as goods subject to specific customs duty rates. â€¢ 6% additional customs duty on specified alcoholic beverages and related products falling under Chapter 22 of the Pakistan Customs Tariff. â€¢ 2% additional customs duty on specified edible oils and oilseeds, including soybean, palm, sunflower and rapeseed oils, as well as completely knocked down (CKD) kits of cars, jeeps and light commercial vehicles exceeding 1,000cc and heavy commercial vehicles in CKD condition. Customs valuation The notification provides that the value of imported goods for the purpose of additional customs duty shall be determined under Section 25 or Section 25A of the Customs Act, 1969, as applicable. Major exemptions The FBR has also specified several categories of imports that will remain exempt from additional customs duty. These include: â€¢ Plant and machinery imported for manufacturing or production and classified under Chapters 84 and 85 of the Customs Act. â€¢ Goods imported under Chapter 99 of the First Schedule to the Customs Act. â€¢ Most imports covered under the Fifth Schedule to the Customs Act, subject to specified exclusions. â€¢ Imports under the Baggage Rules, 2006. â€¢ Imports under various concessionary SROs, including SROs 577(I)/2005, 565(I)/2006, 693(I)/2006 and the Temporary Importation Scheme under SRO 492(I)/2009. â€¢ Imports by exploration and production companies and their contractors for offshore petroleum projects under specified conditions. â€¢ Imports of CKD cars, jeeps and light commercial vehicles up to 1,000cc, as well as completely built-up (CBU) vehicles up to 850cc. â€¢ Imports under specified Pakistan Customs Tariff codes relating to certain electric vehicles and motorcycles. The revised additional customs duty regime will come into force from July 1, 2026, and forms part of the governmentâ€™s fiscal measures for FY2026-27 aimed at rationalising the import tariff structure and supporting revenue collection.

Date: 2026-07-01

Details: Taxation July 1, 2026Faisal Shahnawaz Tax authority meets revised revenue target with net collection of Rs13 trillion after paying Rs597 billion in refunds ISLAMABAD: The Federal Board of Revenue (FBR) has achieved the historic Rs13 trillion mark in annual tax collection for the first time during the fiscal year 2025-26. According to official figures, the FBR collected Rs13.60 trillion in gross revenue during the fiscal year ended June 30, 2026. After issuing Rs597 billion in tax refunds, the net tax collection stood at Rs13 trillion. Officials said the tax authority successfully achieved its revised annual net collection target of Rs12.98 trillion, ensuring the governmentâ€™s revised revenue objective for FY2025-26 was fully met. The latest collection represents an increase of more than 10% compared with the Rs11.74 trillion net revenue collected in the previous fiscal year. The milestone marks the highest annual tax collection in Pakistanâ€™s history and reflects continued growth in tax revenues despite economic challenges faced during the year. However, the achievement came after a downward revision of the annual revenue target. At the beginning of FY2025-26, the FBR had been assigned a tax collection target of more than Rs14 trillion. The target was subsequently reduced to Rs13.98 trillion and later revised further downward to Rs12.983 trillion. This means the FBR remained short of its original annual revenue target by more than Rs1 trillion, although it successfully met the revised goal set by the government. Tax officials attributed the improved revenue performance to stronger enforcement measures, enhanced compliance initiatives, digitisation reforms and sustained efforts to broaden the tax base throughout the fiscal year. The record collection is expected to strengthen the governmentâ€™s fiscal position as authorities seek to maintain revenue growth and implement further tax reforms during FY2026-27.

Date: 2026-06-30

Details: Published June 30, 2026 Updated about 3 hours ago By Recorder Report KARACHI: Sindh Senior Minister Sharjeel Inam Memon on Monday said that the development and prosperity of Karachi, along with the provision of essential civic amenities, remained the foremost priority of Sindh government, and more than Rs100 billion had been allocated for the metropolis in the provincial budget for the fiscal year 2026-27. In a statement, the senior minister said the allocated funds would be utilized for improving water supply and drainage systems, constructing and rehabilitating roads, and upgrading public infrastructure and other civic facilities across Karachi. He said instead of making false promises, the Pakistan Peoples Party (PPP) believed in delivering public service, and resolving the issues faced by Karachiites was both the governmentâ€™s responsibility and commitment. Sharjeel Memon said modern, safe and reliable public transport remained one of the cityâ€™s most pressing needs. The Sindh government was taking historic measures to transform Karachiâ€™s transport network. He said that 500 modern electric buses, along with double-decker buses, would soon begin operating on the cityâ€™s roads, significantly improving public transportation. Highlighting employment generation as a key component of the governmentâ€™s economic agenda, the minister said the 2026-27 budget placed special emphasis on creating opportunities for young people. He said thousands of jobs would be generated through industrial zones, development projects, transport initiatives and major infrastructure schemes. He further said the PPP had consistently focused its politics on the welfare of the common man, including workers, farmers, youth and the middle class. The Sindh government, he continued, was utilizing all available resources to improve peopleâ€™s quality of life by expanding employment opportunities and strengthening education, healthcare and modern civic infrastructure. He said certain elements were attempting to portray Karachi and other areas of Sindh negatively for political purposes. However, he maintained that the people themselves were witnessing ongoing development projects, improvements in public transport, infrastructure expansion and various public welfare initiatives. Sharjeel Memon said the people were fully aware that despite financial and other challenges, the Sindh government continued giving priority to public welfare and sustainable development. He described the 2026-27 provincial budget as more than a financial document, flagging it as a comprehensive roadmap for practical progress, enhanced employment opportunities and a more prosperous future for Sindh, including Karachi. Copyright Business Recorder, 2026

Date: 2026-06-30

Details: Published June 30, 2026 Updated about 2 hours ago EDITORIAL: The Finance Division has yet to upload its May 2026 Economic Update and Outlook, a document that would have provided current statistics critical for an assessment of the state of the economy for use in the formulation of the budget 2026-27. This newspaper requested a copy of the document a fortnight ago and was inexplicably informed that the Division was busy with the budget and would upload it on the website in â€˜due courseâ€™. It is relevant to note that tomorrow, on 1 July, the June monthly update and outlook would also be due together with the May report. Pakistan Bureau of Statistics (PBS) and the State Bank of Pakistan (SBP) did continue to upload data pertaining to limited aspects of the economy; notably, the trade balance (exports and imports), remittance inflows, foreign exchange reserves held by the SBP and commercial banks, foreign direct investment, portfolio investment, and Consumer Price Index. However, what has led many to argue that the failure to upload the May outlook may have been deliberate is the fact that these two sources of data have not yet uploaded key data for May 2026, including large-scale manufacturing (LSM) sector, credit to private sector, agriculture credit and non-tax revenue. In addition, Federal Board of Revenueâ€™s (FBRâ€™s) actual collections for the month of May, with a reported projected shortfall of around one trillion rupees by 30 June 2026 from what was targeted at 13.979 trillion rupees - a downward revision from the budgeted 14.307 trillion rupees - has perhaps not been taken into account on the primary and fiscal balance claims for the outgoing year with obvious implications on the projections in the budget for 2026-27. This could have been a vital element in the governmentâ€™s recent decision to keep oil prices stable in spite of a decline in the international price that necessitated raising the petroleum levy with the objective of raising non-tax revenue to meet the International Monetary Fundâ€™s (IMFâ€™s) upfront harsh conditions for the outgoing fiscal year. There is, therefore, a serious concern that the budget was based on dated statistics, dated back to April, when the countryâ€™s economic performance had not yet absorbed or begun to show increased fragility due to the negative impact of the US-Israel attack on Iran which began on 28 February. The Finance Ministry has, under its administrative control, numerous departments and divisions, whose terms of reference are not specific to one task at any one period of time. In other words, the excuse that the Division was unable to write and upload the report because it was engaged in the budget formulation is not tenable and should not be accepted by the Cabinet. There is, therefore, an urgent need for the Cabinet to take cognizance of this serious lapse and take appropriate mitigating measures. What has become a tradition, however, is for an administration to sanction special reward, over and above the due salary, to those engaged in budget making, a reward that is baffling for the simple reason that it is in the terms of reference of those engaged in this exercise. And what makes the grant of a monetary reward even more unfathomable is the fact that the budget was reviewed in great detail by the IMF staff, a condition of the ongoing programme loan, and the domestic formulators input was even more severely limited than in years gone by when the country was not on a programme. It is hoped that monetary rewards for undertaking or proposing measures that are the responsibility of any individual or individuals must not be a part of a policy and merit-based pay raises must be a function of their unbiased performance evaluation. Copyright Business Recorder, 2026

Date: 2026-06-30

Details: Budget 2026-27 Energy Taxation Top stories June 30, 2026Hamza Shahnawaz Government drops Finance Bill proposals on petroleum levy enforcement, recovery mechanism and mandatory reporting for oil companies ISLAMABAD: The federal government has withdrawn a series of proposed legal amendments relating to the collection and enforcement of the Petroleum Levy and Climate Support Levy by Oil Marketing Companies (OMCs), refineries and other petroleum sector licensees under the Finance Act, 2026. The proposals were originally introduced through the Finance Bill, 2026 to amend the Petroleum Products (Petroleum Levy and Climate Support Levy) Ordinance, 1961. However, following parliamentary deliberations, the amendments were omitted from the final Finance Act, allowing the existing legal framework to remain in force. Proposed definitions withdrawn Among the key proposals dropped was a plan to replace the existing definitions of â€œcompanyâ€ and â€œrefineryâ€, which currently refer to entities specified in the Second and Fourth Schedules of the Ordinance. Under the proposed amendments, a â€œcompanyâ€ would have been redefined as an oil marketing company, including any person engaged in manufacturing, refining or reclaiming lubricating oil from used lubricants under a licence issued by the Oil and Gas Regulatory Authority (OGRA). A â€œrefineryâ€ was also proposed to be defined as any industrial facility engaged in processing crude oil into petroleum products. The Finance Bill further sought to introduce a separate definition of an oil marketing company as an entity, excluding lubricant marketing companies, involved in purchasing petroleum products from refineries, blending plants or foreign suppliers for sale and distribution through dealers, agents, retail outlets and filling stations. As a consequence of these revised definitions, the government had proposed removing the existing Second and Fourth Schedules of the Ordinance. These changes have now been abandoned. Levy payment not linked to licences Another proposal excluded from the Finance Act would have made the payment of Petroleum Levy and Climate Support Levy a mandatory condition for obtaining and maintaining licences issued by OGRA to oil marketing companies, refineries and other petroleum sector licensees. Had the proposal been approved, compliance with levy obligations would have become a statutory requirement for continuing operations under an OGRA licence. Late payment surcharge dropped The Finance Bill also proposed introducing a surcharge on companies, refineries and licensees failing to pay Petroleum Levy or Climate Support Levy within the prescribed timelines. For locally produced petroleum products, the levy was to be paid alongside sales tax or federal excise returns, while importers would have been required to pay the levy at the time of customs clearance. The proposed surcharge was to be calculated under Section 40D of the Public Finance Management Act, 2019, based on the monthly weighted financing cost applicable to the outstanding amount. These provisions were not included in the final legislation. Recovery mechanism not approved The government also withdrew a proposal to establish a dedicated recovery mechanism for unpaid petroleum levies. The Finance Bill had proposed empowering the relevant department to recover unpaid Petroleum Levy and Climate Support Levy after 90 days of default or request the Commissioner Inland Revenue to recover the outstanding amount in the same manner as income tax arrears. The proposed amendments further stated that the Commissioner Inland Revenue would not have been permitted to grant payment extensions or allow instalment-based settlements. In addition, the Commissioner would have been required to submit fortnightly recovery reports to the Finance and Petroleum Divisions, while procedural irregularities in recovery proceedings would not have been challengeable before any court or tribunal. The proposed recovery framework was also intended to apply retrospectively to outstanding levy liabilities arising before the enactment of the Finance Act, 2026. All of these provisions have now been omitted. Mandatory reporting requirements shelved The Finance Bill had also proposed a comprehensive reporting regime requiring every oil marketing company, refinery and licensee to submit monthly statements detailing Petroleum Levy and Climate Support Levy payments, supported by documentary evidence, including sales invoices filed with the Federal Board of Revenue (FBR). In addition, companies would have been required to obtain annual audit certificates from firms registered with the Audit Oversight Board to verify the accuracy of levy calculations and payments, with the audit costs borne by the respective companies. These compliance and reporting requirements were also excluded from the Finance Act. Existing framework remains unchanged The withdrawal of the proposed amendments means that the existing provisions governing the collection, recovery and reporting of Petroleum Levy and Climate Support Levy will continue without alteration. Industry observers say the governmentâ€™s decision provides regulatory continuity for the petroleum sector while avoiding the introduction of new compliance obligations that had generated concerns among oil marketing companies and refinery operators during the parliamentary review of the Finance Bill.

Date: 2026-06-30

Details: Budget 2026-27 Taxation June 30, 2026Hamza Shahnawaz Private vehicles up to 1,000cc to pay Rs20,000 lifetime token tax, while larger vehicles face annual levy based on invoice value from July 1, 2026. ISLAMABAD: The federal government has introduced revised token tax rates for vehicles registered in the Islamabad Capital Territory (ICT) through the Finance Act, 2026, with the new taxation structure coming into effect from July 1, 2026. The amendments have been made to the West Pakistan Motor Vehicles Taxation Act, 1958 (WP Act XXXII of 1958), replacing the existing Tables 2, 3, 4 and 5 of the Schedule applicable in the Islamabad Capital Territory. Under the revised framework, private motor vehicles with engine capacity of up to 1,000cc will now be subject to a one-time lifetime token tax of Rs20,000, while vehicles above 1,000cc will pay annual token tax based on a percentage of the vehicleâ€™s invoice value. The Finance Act also revises annual token tax rates for motor cabs, public service vehicles and commercial/loading vehicles operating within Islamabad. Token Tax Rates for Private Motor Vehicles (ICT) S.No Engine Capacity New Tax Rate 1 Up to 1000cc Rs20,000 (Lifetime) 2 1001cc â€“ 1300cc 0.25% of invoice value per annum 3 1301cc â€“ 1500cc 0.25% of invoice value per annum 4 1501cc â€“ 2000cc 0.25% of invoice value per annum 5 2001cc â€“ 2500cc 0.35% of invoice value per annum 6 Above 2500cc 0.35% of invoice value per annum Annual Token Tax for Motor Cabs S.No Engine Capacity Annual Tax (Rs) 1 Up to 1000cc 600 2 Above 1000cc to 1300cc 1,000 3 Above 1300cc to 1500cc 1,700 4 Above 1500cc to 2000cc 2,500 5 Above 2000cc to 2500cc 3,400 6 Above 2500cc 4,200 Public Service Vehicles (Per Seat Per Year) S.No Vehicle Category Tax (Rs) 1 8-seater 350 2 13-seater 400 3 15-seater 500 4 16-seater 600 5 42-seater 700 6 52-seater 850 Commercial and Loading Vehicles S.No Vehicle Category Annual Tax (Rs) 1 Laden weight up to 1,250kg 500 2 Above 1,250kg to 2,030kg 1,000 3 Above 2,030kg to 4,060kg 1,000 4 Above 4,060kg to 6,090kg 6,600 5 Above 6,090kg to 8,120kg 6,600 6 Above 8,120kg 12,000 7 Above 8,120kg to 12,000kg 12,000 8 Long trailers/vehicles above 12,000kg to 16,000kg 18,000 9 Long trailers/vehicles above 16,000kg 24,000 10 Tractor (with trolley) 2,600 11 Tractor (without trolley) 2,600 The revised token tax regime forms part of the governmentâ€™s fiscal measures under the Finance Act, 2026 aimed at modernising the taxation framework for motor vehicles in the Islamabad Capital Territory. The new rates are applicable from July 1, 2026, and vehicle owners will be required to pay token tax in accordance with the updated schedule prescribed under the amended law.

Date: 2026-06-29

Details: Published June 28, 2026 Updated a day ago By Anwar Khan KARACHI: The Sindh Assemblyâ€™s fiscal year 2026-27 budget debate turned politically charged on Saturday as the treasury claimed sharp drops in crime, announced a landmark minimum wage, and signaled legislation to classify gutka and mawa as narcotics, while the opposition hit back over unresolved civic failures. Presided over by Speaker Awais Qadir Shah, the session spanned law and order, katcha operations, narcotics, local government, workersâ€™ welfare, and the Sindhi-Muhajir political divide, with the atmosphere turning emotional and combative on multiple occasions. Home Minister Zia ul Hassan Lanjar told the house that street crime and violent crime fell 40 percent year-on-year, the overall crime rate dropped 10 percent, and terrorism incidents declined 80 percent across the province. He said no major terrorist attack struck Karachi this year. The CTD conducted 642 intelligence-based operations and arrested 66 terror-linked individuals. A foiled plot involving 200 kilograms of explosives recovered from a Mazda vehicle was cited as a major success. MQM Deputy Parliamentary Leader Taha Ahmed, however, demanded that debate not descend into political point-scoring, saying progress in Sindh and Karachi requires cooperation on equal footing rather than contested statistics. In the katcha region, the Nijat-e-Mehran Operation killed 48 bandits, secured the surrender of 539 others, and reclaimed 115,000 acres from criminal control, with police now maintaining effective authority over areas long considered ungovernable. On mobile snatching, still a raw nerve for residents, incidents fell 7 percent. The CPLC is launching a dedicated app to register phone transactions and track stolen devices, having already returned 2,458 snatched phones to their owners. Jameel Soomro, Political Secretary to PPP Chairman Bilawal Bhutto Zardari, countered by raising unresolved waiting lists for teachers, early childhood educators, science teachers, and police constables as delivery gaps the government could not talk its way past. The narcotics discussion produced the sessionâ€™s most striking moments. Lanjar acknowledged a serious drug crisis among Karachiâ€™s youth, with cocaine, ice, and hashish use rising and reports of minors consuming drugs. He called for drug testing legislation, adding pointedly that cocaine is entering Pakistan not through Karachi Airport but Lahore and Peshawar airports. His claim that drew immediate attention on the floor. Taha Ahmed objected to the tone of such assertions, insisting mutual respect must hold even amid sharp disagreement, and that public issues must take precedence over political point-scoring. PPPâ€™s lady legislator, Faryal Talpur urged the house to amend existing law to bring gutka and mawa under the Narcotics Act, describing their spread from coastal districts to Shaheed Benazirabad as a public health emergency requiring urgent legislative action. Labour Minister Saeed Ghani delivered one of the sessionâ€™s most combative addresses, announcing that Sindh will become the first province to enforce a minimum wage of Rs43,000 from July 1, approved through the minimum wage board with representation from both employers and workers. Income tax deductions on workersâ€™ welfare funds have been eliminated, with the exemption set to extend to other provinces. The Social Security department met its Rs13.5 billion collection target after contributions moved online, while 2.5 million workers and their families received free medical treatment this year â€” up 150,000 from the previous two years. Ghani methodically dismantled media allegations of fraudulent recruitments, clarifying that 291 â€” not 300 â€” paramedical posts were filled through a legitimate 2022 advertisement, with only 112 candidates joining. On the SESSI dual-salary scandal, 31 employees were dismissed and recovery proceedings initiated, while 40 others were found on legitimate deputation. He said corruption in the Workers Welfare Board predated his tenure and that court stay orders have repeatedly blocked accountability efforts â€” a frustration he voiced without restraint. Local Government Minister Nasir Hussain Shah defended the uplift record â€” hundreds of completed schemes, over 150 small roads rehabilitated, and 15,000 tons of waste collected daily. He said the Provincial Finance Commission, formed in 2023, will now hold regular meetings for fairer resource distribution to local bodies, and argued that Sindh alone is genuinely implementing Article 140-A of the Constitution. The sessionâ€™s most charged moment came from Ghani, who declared flatly that the PPP is now the largest party in Karachi â€” a direct challenge to the MQM on its traditional stronghold and warned that opposition numbers will shrink further after the next elections. The debate was under way at the time of this story filing. Copyright Business Recorder, 2026

Date: 2026-06-29

Details: Taxation June 29, 2026Faisal Shahnawaz Overall income tax concessions rise to Rs580 billion despite decline in exemptions from total income ISLAMABAD: The Federal Board of Revenue (FBR) granted Rs438 billion in exemptions from total income during the tax year covered by the Tax Expenditure Report 2026, according to the report released alongside the federal budget documents. The latest figure represents a slight decline from Rs443.45 billion reported under the same category in the Tax Expenditure Report 2025, indicating a modest reduction in revenue forgone through income tax exemptions. According to the FBR, a personâ€™s total income for a tax year comprises two principal components: income earned under all heads of income during the year and income exempt from tax under the provisions of the Income Tax Ordinance, 2001. The tax authority explained that exemptions from total income are governed by Part I of the Second Schedule to the Income Tax Ordinance, 2001, which specifies categories of income that are excluded from taxation. Overall income tax concessions increase Despite the marginal decline in exemptions from total income, the report showed that overall income tax exemptions and concessions increased to Rs580 billion in 2026, compared with Rs545.23 billion recorded in the previous yearâ€™s report. The increase reflects changes across various categories of tax expenditures. According to the report, deductible allowances surged to Rs4.01 billion in 2026 from only Rs71 million a year earlier. Meanwhile, tax credits declined slightly to Rs76 billion, compared with Rs78.61 billion reported in the previous year. A significant increase was recorded under reduction in tax rates, where revenue forgone rose sharply to Rs50.71 billion, compared with just Rs3.46 billion in the Tax Expenditure Report 2025. In contrast, reduction in tax liability fell substantially to Rs11 billion from Rs19.64 billion a year earlier. Purpose of the report The Tax Expenditure Report provides an estimate of government revenue forgone through exemptions, concessions, reduced tax rates, credits and other preferential tax treatments. It is intended to improve transparency in fiscal policy by highlighting the cost of tax incentives provided under Pakistanâ€™s tax laws. Tax experts note that while many exemptions are designed to support investment, promote specific sectors and provide social relief, they also reduce the governmentâ€™s revenue base. They argue that regular evaluation of tax expenditures is essential to ensure that such concessions achieve their intended economic objectives while maintaining fiscal sustainability.

Date: 2026-06-29

Details: â€¢ Brent crude futures climbed 58 cents, or 0.8%, to $72.57 a barrel Published June 29, 2026 Updated 35 minutes ago By Reuters SINGAPORE: Oil prices rose on Monday following days of tit-for-tat strikes by the US and Iran that underscored the fragility of their interim peace deal and again slowed energy shipping through the Strait of Hormuz. Brent crude futures climbed 58 cents, or 0.8%, to $72.57 a barrel at 0207 GMT while U.S. West Texas Intermediate crude was at $70.11 a barrel, up 88 cents, or 1.3%. â€œThereâ€™s still plenty of risk facing the oil market. Even so, participants â appear to be â€¦ focusing on what a continued recovery in oil flows would mean for the global balance,â€ ING analysts said in a note on Monday. â€œThis complacency is odd and clearly leaves significant upside risk if the supply recovery proves slow.â€ Brent crude fell 10.6% last week, its third weekly decline, after crude shipments through the strait rose last week to their highest level since the US-Israeli war on Iran began in late February. However, traffic has since slowed following renewed attacks on ships in the strait from Thursday, including a Qatar-linked oil tanker, that triggered strikes from the U.S. and Iran in the worst â escalation since they signed an interim peace deal. Capping oil price gains, Iran and the US agreed to halt recent hostilities in the Gulf and renew talks regarding their dispute over the Strait of Hormuz, a US official said on Sunday. â€œThe market is likely to re-evaluate its assumption of a quick recovery of oil supply from â the Persian Gulf,â€ ANZ analysts said in a note. Saudi oil giant Aramco resumed crude oil loadings on Friday at its Ras Tanura terminal, west of the Strait of Hormuz, after they were halted for nearly four months, as â oil producers ramped up output and exports ahead of an interim deal. Loadings continued even after a helicopter belonging to the company crashed on Sunday at Ras Tanura, killing 14 nationals. The cause of the â crash was unknown. â€œPhysical flows are constrained by tanker backlogs, damaged infrastructure and production shut-ins. It could take the remainder of the year before supply is near pre-conflict levels,â€ ANZ analysts said.

Date: 2026-06-28

Details: 28/06/2026, 18:46 World Customs Organization Giving data the attention it deserves: WCO Council discusses how to build the foundations for Customs to leverage data as a strategic asset 27 June 2026 Panel discussion during the WCO Council Sessions on â€œData as a Strategic Asset: Shaping the WCO's Role in a Data-Driven Customs Landscapeâ€. Discussions focus on technical, policy and regulatory arrangements across the full data lifecycle. Investment, safeguards and capacity building are all elements that need to be strengthened for Customs to leverage data. In recent decades, with the digitalization of processes and procedures, data has become a key asset for Customs administrations. Strengthening the use of data is considered by the WCO as key to enhancing targeting capacities, improving operational processes, and engaging meaningfully with trading partners and international organizations. For the WCO, the challenge is no longer instilling the value of data, but ensuring its Members build the governance, capabilities and trust needed to use it effectively. Although much of the attention is usually placed on methods and tools to analyse data, specific care is needed to ensure that data itself receives the attention it deserves in high-level policy discussions. Access to timely, high-quality, reliable and well-governed data is a prerequisite for the effective use of data and, if the issues in the underlying data, including its quality and governance, are not addressed, investments in technologies such as artificial intelligence (AI) will not produce the expected results in terms of operational performance. To enable WCO Members to share their practice and experience with respect to data, a panel discussion was held as part of the June 2026 Council Sessions. Under the title â€œData as a Strategic Asset: Shaping the WCO's Role in a Data-Driven Customs Landscapeâ€, panellists from United Kingdom HM Revenue & Customs, Mauritius Revenue Authority and Japan Customs introduced their administrationsâ€™ approach to data governance, explained how they have built internal capacity and discussed how to navigate the challenges associated with data-sharing and the deployment of emerging technologies. Developing a data governance framework can be complex, requiring careful planning and execution As data becomes more central to Customs operations, the question is not only how to use it, but also how to protect and manage it properly. The panellists explained their approach to data governance, namely a mix of technical, policy and regulatory arrangements across the full data lifecycle. They highlighted that the objective of a data governance framework is to ensure that the data is accurate, consistent and secure. â€œData governance is not about limiting the use of data. It is about enabling its trusted useâ€, said one of the panellists. The first step in building such a framework is to evaluate existing policies related to data ownership, classification, quality, security, and privacy, to align them with regulatory requirements and best practice. Data standards and definitions must also be examined. When so doing, a cross-functional collaboration approach should be adopted to ensure that the development of a data governance framework does not take place in isolation but instead involves a wide range of experts, including those working in the IT, operational and legal departments, with each of their roles and responsibilities clearly defined. Data management must be grounded in the understanding of the Customs administrationâ€™s wider future strategy Data is a means, not an end. The panellists pointed out that data management should be treated as a strategic discipline with a long-term road map, rather than as a one-off IT project. The focus should therefore not just be on addressing legal issues, but also on understanding where the Customs administration wants to get to in the future. Key Customs data and analytical functions should be created within the administration Any data operating model should define roles, responsibilities and processes, and standards for managing data across the administration. The roles must be clear and meaningful, with real accountability and capability behind them. A panellist explained that, in his administration, a team bringing together data governance, design, exploitation and innovation functions had been established to support operational analytical use of data. These professionals work collaboratively as embedded members of multi-functional teams, including policy, operational, project management and digital staff and, in many cases, external suppliers, that plan, manage and deliver key Customs transformation investments. Alongside data and analytical professionals, these multi-functional teams work through expanding data design, data exploitation and data innovation. They apply user-centred design principles to ensure that data is defined, structured and applied in ways that better meet operational requirements and analytical policy, as well as customersâ€™ needs in many cases. An internal governance function is also needed to oversee the deployment of AI tools, avoid fragmented or uncoordinated adoption of AI and ensure transparency https://www.wcoomd.org/en/media/newsroom/2026/june/giving-data-the-attention-it-deserves.aspx?p=1 1/2 28/06/2026, 18:46 World Customs Organization Practice related to the deployment of AI tools was also addressed, with a panellist explaining that his administration had ensured that it had central visibility and oversight of AI use cases through the creation of a specific function within the administration, as well as the establishment of an internal governance body. This avoids fragmented or uncoordinated adoption, allowing assurance of safe adoption and sharing of insight and tooling across the administration. It also enables the administration to identify the highest value initiatives, give them priority and take them forward safely. Implementing a data policy requires investment in technological tools Panellists also pointed out that robust information and communication technology (ICT) systems and tools must be put in place to maintain confidentiality, integrity, availability, accuracy, legitimacy, and accountability during data collection, processing, storage, sharing, and disposal. Examples include next-generation firewalls, intrusion prevention and detection systems, endpoint solutions, system-to-system data-sharing without human intervention, and access control mechanisms. Data exchange can only progress as fast as the trust and the safeguards underlying the exchange Rules governing data should also address the issue of data-sharing with foreign administrations, and this means bringing data protection experts on board. â€œData should be shared only when the purpose of its use is defined, and the conditions of its use are secure. In practice, this means that data-sharing is based on bilateral or multilateral agreements which stipulate which data can be shared, how it can be used, and how it must be protectedâ€, explained a panellist. The capacity gap between Members will continue to widen unless we invest in capacity building While acknowledging that technology deployment must remain Member-driven and sensitive to operational realities, the panellists recognized that there is a need to close the gap between administrations in terms of data infrastructure development and data governance, to enable them to implement AI and machine learning tools efficiently. WCO Members have contributed to a comprehensive set of resources under the Smart Customs Project, funded by China Customs. Leveraging these resources, regional and national workshops are regularly held to develop recommendations and road maps with participants, including to build strong data frameworks. Finally, under the BACUDA Project, the WCO has released an e-learning course on building data governance frameworks within Customs administrations. This course, available to Customs officers on the WCO CLiKC! platform under the title â€œData Governance for Customsâ€, covers core components of data governance including strategy, policies, roles, data quality, and security, as well as practical tools and Customs case studies. The development of the e-learning course was funded by the Customs Cooperation Fund of Korea (CCF/Korea). The panel discussion was moderated by Werner Ovalle, Superintendente de AdministraciÃ³n Tributaria at the SAT Guatemala, with the following participants: Gavin McCann, Head of Border Innovation Strategy, HM Revenue & Customs Rajendra Gupta Ramnarain, Director, Customs, Mauritius Revenue Authority Yasuo Fujinaka, Director, Customs Clearance Division, Customs and Tariff Bureau Japan Customs

Date: 2026-06-28

Details: Published June 28, 2026 Updated a day ago By Recorder Report KARACHI: Jamaat-i-Islamiâ€™s opposition bloc in the Karachi Metropolitan Corporation (KMC) on Saturday unveiled a Rs300 billion shadow budget for 2026-27, saying the cityâ€™s proposed Rs60 billion outlay fell far short of its actual needs. Addressing a press conference at Faran Club, KMC Opposition Leader Saifuddin Advocate said Karachiâ€™s budget was negligible compared to those of major regional cities. He said Delhi, with a population of around 15 million, had an annual budget of Rs520 billion, while Mumbaiâ€™s stood at Rs2.2 trillion. Even a Rs300 billion budget for Karachi, he added, would be seven times smaller than Mumbaiâ€™s. Presenting the shadow budget, Saifuddin demanded that KMC receive a minimum allocation of Rs300 billion for the new fiscal year. He called for revenues generated through the motor vehicle tax, infrastructure cess and betterment charges to be transferred to local government institutions. He recalled that former Karachi mayor Abdul Sattar Afghani had led a historic campaign for the transfer of motor vehicle tax revenues to the city government and urged the provincial government to act on that demand. Saifuddin said Karachi generated around Rs180 billion annually through infrastructure cess and argued these funds, along with betterment charges, should accrue to local governments. He also demanded that Octroi Zila Tax, other grants and Provincial Finance Commission transfers â€” amounting to roughly Rs100 billion â€” be provided to KMC. He said KMC currently raised only around Rs6 billion from its own sources and urged the civic body to grow that figure to Rs10 billion. Combined with the proposed transfers, he said, the total budget could reach Rs300 billion. Saifuddin also called for fiscal decentralisation, saying funds should flow down to town administrations and union committees, with each union committee receiving at least Rs100 million annually. Turning to Mayor Murtaza Wahab, the opposition leader rejected the mayorâ€™s claim of making KMC financially self-reliant, saying own-source revenues accounted for only about 20 percent of the civic bodyâ€™s budget. He referred to former city nazim Naimatullah Khan, saying that after adjusting for the dollar exchange rate, the budget presented in 2005 was nearly three times larger than the current KMC budget. Saifuddin said Murtaza Wahab had spent Rs201 billion since 2021 â€” including his tenure as administrator before becoming mayor â€” yet Karachiâ€™s civic conditions had continued to deteriorate. He blamed the provincial government and KMC for widespread corruption and mismanagement, saying most public funds were lost before reaching citizens. He also criticised the provincial governmentâ€™s control over key municipal institutions, including the water utility and solid waste management system, arguing they should function under the elected city government in line with the Constitution and Supreme Court directives. He further noted that the budgets of the Karachi Water and Sewerage Corporation and the Sindh Solid Waste Management Board were not reflected in the KMC budget, even though funds meant for towns and union committees were being used for their operations. A short documentary on the struggle for local government elections and devolution of powers was screened ahead of the press conference. KMC Deputy Parliamentary Leader Junaid Makati, Fazal Ahad, Taimur Ahmed, and several union committee chairmen and vice-chairmen also attended. Copyright Business Recorder, 2026

Date: 2026-06-28

Details: Published June 28, 2026 Updated a day ago By Saeed Akhtar Baloch LAHORE: The Punjab Assembly on Saturday approved the FY2026â€“27 provincial budget amid strong protests from the opposition. The House also passed the Finance Bill and approved 131 demands for grants. At the outset of the session, Deputy Speaker Malik Zaheer Iqbal Channar, who chaired the proceedings, commended the Punjab government, police, Rangers, the Counter Terrorism Department (CTD), and other relevant institutions for maintaining peace and security during Muharram. The House witnessed heated exchanges between the treasury and opposition benches during the approval of budgetary grants. Senior Minister Marriyum Aurangzeb strongly defended the governmentâ€™s performance, arrangements for Ashura, and ongoing development initiatives, while opposition members staged protests, raised slogans, and criticised the governmentâ€™s conduct. Opposition lawmakers walked out of the House after alleging they were not given an opportunity to speak. Following the walkout, the Assembly approved all 131 demands for grants and the Finance Bill. Addressing the House, Senior Minister Marriyum Aurangzeb said the arrangements for Ashura should not be politicised. She stated that 124,000 security personnel were deployed across the province, while thermal drones, QR code monitoring, Safe City surveillance cameras, and other advanced technologies were used for the first time to ensure comprehensive security. She further said the government had launched 437 development schemes, of which more than 340 have already been approved. Work is progressing rapidly on projects related to infrastructure development, environmental protection, climate change, smog control, forestry, clean drinking water, South Punjab, and public welfare. She also criticised the opposition, claiming its members had neither read the budget nor examined the facts. During her speech, opposition members stood from their seats and continuously chanted slogans, creating a tense atmosphere in the House. Treasury lawmakers responded with counter-slogans, while Special Assistant to the Chief Minister Zeeshan Malik, Education Minister Rana Sikandar Hayat, and other government members waved wristwatches and chanted slogans against the opposition. Minister for Parliamentary Affairs Mujtaba Shuja-ur-Rehman urged the Deputy Speaker to suspend opposition members who, he alleged, had used inappropriate language and raised slogans against the government leadership. He said the Business Advisory Committee had previously agreed that no remarks would be made against parliamentary leadership. The opposition first protested, then pointed out a lack of quorum, and eventually boycotted the proceedings by walking out during the approval of the budgetary grants. The government, however, continued with the proceedings and completed the passage of the budget. The Punjab Assembly ultimately approved all 131 demands for grants along with the Finance Bill, formally passing the FY2026â€“27 provincial budget. After completing the agenda, the session was adjourned until Monday at 11:00am. Copyright Business Recorder, 2026

Date: 2026-06-28

Details: Taxation June 28, 2026Hamza Shahnawaz Audit urges FBR to expedite recovery proceedings against 1,779 taxpayers over uncollected advance income tax ISLAMABAD: Pakistanâ€™s tax authorities have been directed to recover more than Rs6.52 billion in unpaid advance income tax after an audit uncovered widespread non-compliance by manufacturers, importers, distributors and wholesalers during fiscal years 2022-23 and 2023-24. According to audit findings, 1,779 taxpayers across 16 field formations of the Federal Board of Revenue (FBR) failed to collect advance tax from retailers, wholesalers and distributors at the time of sale, resulting in a revenue shortfall of Rs6.521 billion. Audit Flags Major Tax Recovery Gap The audit report noted that Sections 236G and 236H of the Income Tax Ordinance, 2001 require manufacturers, commercial importers, distributors, dealers and wholesalers to collect advance income tax at prescribed rates while making sales to specified persons. Under Section 161 of the ordinance, any person responsible for collecting tax becomes personally liable if the tax is not collected or deposited with the government. Despite these legal provisions, auditors observed that the FBR did not initiate timely recovery proceedings against defaulters, leading to the accumulation of substantial unpaid tax liabilities. The irregularities were identified between February and November 2024 during an audit of tax years relating to fiscal years 2022-23 and 2023-24. Only Fraction of Tax Recovered In its response, the FBR informed auditors that only Rs0.52 million had been charged and recovered. The department further stated that Rs3.42 million had been charged but remained unrecovered. According to the report, legal proceedings involving Rs6.510 billion were underway but had not yet been finalised, while cases worth Rs6.60 million remained pending before courts. The audit highlighted that the overwhelming majority of the disputed amount remains outstanding. DAC Orders Swift Recovery Action The Departmental Accounts Committee (DAC), during meetings held between July 2024 and January 2025, directed the FBR to accelerate recovery efforts and complete pending legal proceedings. The committee also instructed tax officials to pursue sub judice cases through appropriate legal channels and submit compliance reports to both audit authorities and the FBR. However, auditors noted that no significant progress had been reported before the finalisation of the audit report. Call for Stronger Enforcement The audit recommended that the FBR immediately recover admitted liabilities, expedite legal proceedings and strengthen enforcement mechanisms to prevent future revenue leakages. It also suggested monitoring compliance through a risk-based desk audit system targeting retailers, distributors and wholesalers. Tax experts say advance tax collected under Sections 236G and 236H remains an important component of Pakistanâ€™s withholding tax framework and a significant source of government revenue. The recovery of more than Rs6.52 billion in outstanding taxes could support revenue collection efforts and help strengthen fiscal stability as Pakistan seeks to broaden its tax base and improve compliance across the supply chain.

Date: 2026-06-27

Details: Budget 2026-27 Taxation June 27, 2026Faisal Shahnawaz President signs Finance Bill 2026, paving the way for implementation of the FY2026-27 federal budget and revised tax regime ISLAMABAD: The Finance Act, 2026 has officially become law after President Asif Ali Zardari signed the Finance Bill, 2026, clearing the way for the implementation of the Federal Budget 2026-27 and a wide range of new taxation measures from July 1, 2026. Following the Presidentâ€™s assent, the Finance Bill will be forwarded to the Printing Corporation of Pakistan for publication in the official Gazette. Upon publication, the Finance Act, 2026 will formally come into force, providing the legal basis for the federal governmentâ€™s fiscal and taxation policies for the new financial year. According to officials in the Ministry of Finance, the implementation of the Rs18.71 trillion Federal Budget for FY2026-27 will commence on July 1, with all ministries, government departments and public sector organisations required to operate under the new budgetary framework. The Finance Act introduces a comprehensive package of tax measures, including revisions to income tax, sales tax, federal excise duty and customs duty. The changes are aimed at broadening the tax base, enhancing revenue collection, improving tax compliance and supporting the governmentâ€™s fiscal consolidation programme. The legislation also incorporates amendments to various tax laws approved by Parliament during the budget process, providing the Federal Board of Revenue (FBR) with the legal authority to implement new tax rates, exemptions, compliance requirements and enforcement measures from the beginning of the new fiscal year. Businesses, importers, exporters and taxpayers across the country will be required to comply with the revised taxation regime, while customs authorities will begin enforcing updated duty structures on imported goods in accordance with the Finance Act. The enactment of the Finance Act marks the completion of the constitutional budget approval process after the Finance Bill was debated and passed by both the National Assembly and the Senate before receiving presidential assent. Economic analysts say the implementation of the new fiscal measures will be closely watched by businesses and investors, as the government seeks to achieve its ambitious revenue targets while maintaining macroeconomic stability under its ongoing economic reform agenda. With the new financial year commencing on July 1, the Finance Act, 2026 will serve as the principal legal framework governing Pakistanâ€™s taxation system and federal budgetary operations for FY2026-27.

Date: 2026-06-27

Details: Published June 26, 2026 Updated a day ago By Dr Omer Javed Here, it needs to be pointed out that it is highly strange to see that the government has apparently not pursued enhanced special drawing rights (SDR) allocation from International Monetary Fund (IMF) on the same lines it received in August 2022, as part of the overall enhanced SDR allocation received globally to countries. Given the highly significant impact of commodity shock, especially in terms of oil prices during the conflict, especially to net oil importing countries like Pakistan, while it was expected that IMF will announce such an enhanced allocation at the global level, or at least for net oil importing countries, nevertheless it would have made sense that the country budgeted some amount to highlight to IMF its intent in this regard. If an effort has already been made with IMF to convince them to release such an amount, and the response has been in the negative, that should have been shared with the public at large so as to make clear that this otherwise important step that the government should take has in fact been taken. So, while it is important to make fiscal deficit sustainable, it is important to understand the positive consequences of sustainable primary deficit, especially in the context of high level of development needs of a developing country. This may be done through rationalizing non-development (current) expenditure, reducing interest payment-related expenditure, enhancing tax base, applying creative taxation â€“ for instance, meaningful wealth tax, and taxing windfall profits of energy companies â€“ lowering losses of SOEs through restructuring, meeting their financing needs through creative solution, and as earlier indicted, better rationalizing expenditure responsibilities of Centre and federating units as per the 18th Constitutional Amendment. In the absence of significant progress made on above aspects, for instance, among possible others, reaching primary surplus has meant a reduction in development expenditure. Having said that, as per budget estimates for the upcoming fiscal year, primary surplus (fiscal austerity) is still being targeted at Rs.2.8 trillion (2 percent of GDP), which is slightly less than the revised estimates for the ongoing fiscal year at Rs 3.2 trillion (2.5 percent of GDP). Moreover, fiscal deficit still is budgeted at an increase of Rs 1.9 trillion for the next fiscal year, from the revised estimates of the ongoing fiscal year to stand at around Rs 7.0 trillion. Here, even after receiving a provincial surplus as per budgetary estimates for the upcoming fiscal year at Rs 1.8 trillion, stood at a higher level by Rs 1.5trillion over the revised estimates for FY2025-26 to stand at Rs 5.2 trillion for FY2026-27. It needs to be pointed out that receiving provincial surplus means lesser fiscal space to make overall spending, including development spending for the provinces. Moreover, this means that the government does not appear to reverse its heavy borrowing trend, along with not rebalancing monetary austerity in favour of more balanced approach, which is playing a significant role in enhancing fiscal deficit, even when the government intends to target primary surplus. This, in turn, means less fiscal space overall, and less development spending; where federal public sector development programme (PSDP) was kept at the same Rs 1 trillion for the upcoming fiscal year, which is the same as budgeted for the ongoing fiscal year, while provincial PSDP being budgeted at Rs 2.2 trillion for FY2026-27, is lower than that budgeted for FY2025-26 by around Rs 645 billion! Hence, with regard to interest payment on borrowing, the budget estimates for FY2026-27 stood at Rs 8.1 trillion, which is around half of the total current expenditure estimate for the upcoming fiscal year at Rs 17.1 trillion. Imagine the fiscal space if this were halved, under a much-more effective balanced aggregate demand- and supply-side policy emphasis with regard to reining in inflation â€“ which means not employing over-board monetary- and fiscal austerity policies â€“ and will allow significantly contributing towards an otherwise much-needed counter-cyclical boost to economic growth. As expected, therefore, federal PSDP is far less than primary surplus being targeted as per budget estimates for FY2026-27, and the high level of interest payments budgeted for the upcoming fiscal year. Overall, practice of procyclical policy, which has been going on over a number of years now, has been continued, instead of adopting counter-cyclical policy for reaching much-needed higher level of economic growth. Moreover, high level of interest payments related expenditure at the back of monetary austerity, and lack of enhancement of tax base, including no tax on windfall profits of energy companies, as much-needed creative tax measures to better share the burden of increase in oil prices, will likely to continue to keep borrowing for private sector at a low level. Hence, practice of monetary- and fiscal austerity, and higher level of interest payments, all indicate towards continuation of practice of pro-cyclical policy. In terms of priorities, while water resource management is an exceedingly important budgetary objective, only Rs103.1 billion â€“ composed of â€˜Development expenditure of water resource divisionâ€™ at Rs 55.3 billion, and â€˜External development loans and advances of water resource divisionâ€™ at Rs.47.8 billion â€“ have been indicated as budgetary estimate for FY2026-27, and is only around one-tenth of the federal PSDP budgetary estimate for FY2026-27 at Rs1 trillion. Also, while there is emphasis in the budget speech to reduce subsidies for removing distortion in prices â€“ although subsidies being price distortionary, but hold the potential to positively impact growth and welfare â€“ a similar approach of removing distortion from prices by significantly reducing indirect taxes has not been adopted, including continuation of application of petroleum levy (PL), which also distort prices. PL, in fact, saw an increase from revised estimate for FY2025-26 by Rs 178.5 billion to stand at budgetary estimate of Rs 1.7 trillion for FY2026-27; where it needs to be pointed out that the budgeted estimate for PL for the ongoing fiscal year was less than the revised estimate by Rs 29.6 billion. Having said that, the budgetary estimate for FY2026-27 stood at Rs 1.1 trillion, which is less than budgetary estimate of price distorting, regressive, consumption (indirect) tax for the ongoing fiscal year by Rs.6.6 trillion to stand at Rs.7.7 trillion, which means a much-higher price distortionary impact coming from indirect taxes than from subsidies. It is strange that while nominal GDP budgetary estimate for the upcoming fiscal year stands at Rs 143.6 trillion, budgetary estimate for direct taxes for FY2026-27 only make up 5.3 percent of nominal GDP or Rs 7.6 trillion. Enhancement in direct taxes along with expenditure rationalization, and overall adopting counter-cyclical policy will lead to lesser need for indirect taxes, which are not only regressive, and also negatively impact domestic production, exports, poverty and inequality â€“ not to mention similar negative consequence on political voice â€“ but also likely negatively affect productive and allocative efficiencies. Here, indirect taxation in electricity bills, and that too at a significantlyhigh rate, together with PL, increased energy prices significantly, which, in turn, enhances overall inflation through the channel of cost-push inflation; not to mention creating hardship for the people, where at least around one-third of the population is below the poverty line, as per official statistics, and around 45 percent of the population as per World Bank. Moreover, it is quite shocking that government calls PL in â€˜Table - 20â€™ of the â€˜budget in briefâ€™ documentas holding â€˜climate relevanceâ€™ for all practical purposes is likely to produce little disincentivizing impact in terms of shifting people from fossil-fuel based transportation, given a serious lack of public transportation, especially in terms of EVs as public transport, and lack of incentives on solar energy also make it difficult for people to shift to EV bikes, for instance, given the affordability issue of solar energy and high prices of electricity from the grid being a significant hurdle in charging EVs. Hence, putting PL to discourage use of fossil-fuel based transportation is an unproductive measure, and mostly brings hardship as people have little choice in terms of shifting to more environment-friendly modes of transportation in the shape of public or individual transport, especially electricity-based transportation. (CONCLUDED) Copyright Business Recorder, 2026

Date: 2026-06-27

Details: Taxation June 27, 2026Faisal Shahnawaz Tax offices to remain open over the weekend and until midnight on June 30 as FBR races to meet revised revenue target ISLAMABAD: Officials of the Federal Board of Revenue (FBR) are set to work extended hours over the next four days as the tax authority intensifies efforts to maximise revenue collection before the close of fiscal year 2025-26. The FBR has introduced special working arrangements for Inland Revenue field formations across the country to facilitate taxpayers and accelerate the collection of taxes and duties during the final days of June. In an official memorandum issued, the FBR directed all Chief Commissioners of Inland Revenue at the Large Taxpayers Offices (LTOs), Medium Tax Office (MTO), Corporate Tax Offices (CTOs) and Regional Tax Offices (RTOs) to keep their offices operational throughout the weekend and observe extended working hours until the end of the fiscal year. Under the revised schedule, tax offices will remain open during normal office hours on Saturday, June 27, 2026, and Sunday, June 28, 2026. Field formations have also been instructed to remain open until 8:00 pm on Monday, June 29, and midnight on Tuesday, June 30, the final day of FY2025-26. The extended working hours are intended to facilitate taxpayers in meeting their obligations while enabling the tax authority to maximise revenue collection before the fiscal year closes. According to official figures, the FBR collected approximately Rs11.227 trillion during the first eleven months of the fiscal year, covering the period from July 2025 to May 2026. To achieve its revised annual revenue target of Rs12.98 trillion, the tax authority must collect nearly Rs1.75 trillion during June, highlighting the scale of the challenge in the final month of the fiscal year. The FBR was initially assigned a revenue target of Rs14.13 trillion, but the objective was revised downward on multiple occasions amid weaker-than-expected economic activity, slower import growth and other factors affecting tax collection. Government officials have attributed the revenue shortfall to subdued economic activity, lower import volumes and geopolitical tensions in the Middle East, which adversely affected customs duties and other tax receipts during the year. The latest directive reflects the FBRâ€™s determination to strengthen revenue mobilisation before June 30 by ensuring uninterrupted services at tax offices and facilitating the prompt processing of tax payments. To support the year-end revenue drive, the State Bank of Pakistan (SBP) has also announced special banking arrangements for taxpayers. At the request of the FBR, the central bank has instructed all commercial banks to extend banking hours and maintain uninterrupted digital payment services to facilitate the collection of government taxes and duties. According to the SBP, all Saturday-opening branches of commercial banks, along with National Bank of Pakistan (NBP) branches authorised to collect Customs duties, will remain open from 9:00 am to 5:00 pm on Saturday, June 27, 2026. Banks have also been directed to extend branch operations until 8:00 pm on Monday, June 29, and 10:00 pm on Tuesday, June 30, while designated NBP branches collecting Customs duties will remain open until 11:59 pm on the last day of the fiscal year. The SBP has further instructed banks to ensure that designated branches remain operational for as long as necessary to facilitate the Special Clearing of Government Transactions through National Institutional Facilitation Technologies (NIFT). In addition to extended branch operations, banks have been directed to keep internet banking, mobile banking applications, automated teller machines (ATMs) and other digital payment channels fully operational to enable taxpayers to make payments without disruption. Tax experts believe the coordinated measures by the FBR and the SBP will ease pressure on taxpayers during the year-end rush, reduce congestion at bank branches and encourage greater use of digital payment channels. They also expect the extended working hours to improve the efficiency of government revenue collection as the tax authority strives to narrow the gap between actual collections and its revised target.

Date: 2026-06-27

Details: Taxation Top stories June 26, 2026Faisal Shahnawaz Non-compliant importers to face stricter customs scrutiny as FBR accelerates digital transformation drive ISLAMABAD: The Federal Board of Revenue (FBR) has decided to withdraw the green channel facility for importers that fail to integrate with its digital invoicing system, in a significant move to strengthen customs compliance and accelerate the tax authorityâ€™s digital transformation agenda. According to FBR sources, importers that have not completed integration with the digital invoicing platform will no longer qualify for green channel clearance and will instead be routed through the red or yellow channels, where consignments are subject to enhanced customs scrutiny and verification. A senior FBR official said the measure is aimed at encouraging businesses to comply with the mandatory digital invoicing regime while improving transparency and reducing tax evasion through technology-based enforcement. To identify non-compliant businesses, the FBR has compiled data on importers whose imports exceeded Rs10 million during the past 12 months. These businesses have been prioritised for integration under the authorityâ€™s digital documentation programme. Official figures show that Pakistan currently has 21,944 sales tax-registered importers. Of these, 11,709 have been enrolled under the digital initiative, while 10,762 have successfully completed integration with the FBRâ€™s digital invoicing system. The digital invoicing programme forms a central pillar of the FBRâ€™s broader Transformation Plan, which seeks to modernise tax administration, improve documentation of the economy and enhance revenue collection through greater use of digital technologies. According to the FBR, the transformation initiative has already produced encouraging results. The number of income tax returns filed has increased from 3.7 million to 7.0 million, representing growth of 91.5 percent. During the same period, net tax chargeable rose from Rs1.86 trillion to Rs3.73 trillion. The tax authority also reported significant gains from technology-driven enforcement measures. Production monitoring in the sugar sector generated an estimated Rs37 billion in additional annual tax collection, while fraudulent sales tax refund claims worth Rs9.8 billion were successfully blocked. More than 25,000 taxpayers with a combined turnover of approximately Rs39.3 trillion are currently in the digital invoicing implementation pipeline, highlighting the scale of the ongoing documentation drive. Meanwhile, the value of transactions recorded through POS-registered retailers has increased to Rs2.9 trillion, reflecting broader documentation of retail sales and greater compliance among registered businesses. The FBR further disclosed that its artificial intelligence-based audit selection system has identified more than 200 cases involving potential tax liabilities of Rs13.3 billion, demonstrating the growing role of data analytics in risk-based tax enforcement. Tax experts believe the decision to restrict green channel access will encourage more importers to complete digital integration while strengthening customs controls and improving tax compliance. They note that the initiative forms part of the FBRâ€™s wider strategy to create a transparent, technology-driven tax administration capable of reducing revenue leakages and expanding the documented economy.

Date: 2026-06-26

Details: Published June 26, 2026 Updated a day ago By Hassan Abbas LAHORE: The federal government and the Punjab government have unveiled their budgets for fiscal year 2026-27, raising total outlays at both levels even as economists caution that higher spending has yet to translate into visible improvements in education, health, agriculture, and industry. The two budgets have been presented at a time when Pakistanâ€™s economy appears to have regained a degree of stability after several turbulent years, with inflation declining, foreign exchange reserves improving, and concerns regarding an immediate balance-of-payments crisis easing. At the federal level, the government has presented a budget of approximately Rs18.77 trillion compared with Rs17.57 trillion in FY2025-26, with revenue targets increased to Rs15.26 trillion. Debt servicing continues to consume more than Rs8 trillion annually, while defence expenditure has increased to approximately Rs3 trillion. Commenting on the budget, prominent economist and Advisor on political and economic affairs to President Pakistan Peoples Party Central Punjab Raja Pervez Ashraf, Rao Babar Jamil said the continuation of programmes such as the Benazir Income Support Programme, with allocations approaching Rs845 billion, reflects the governmentâ€™s recognition that many households continue to face significant economic hardship. He observed that while inflation has slowed, prices have not actually fallen, meaning the relief felt by ordinary citizens remains limited. Punjab, meanwhile, has announced a budget of approximately Rs5.9 trillion compared with roughly Rs5.3 trillion in FY2025-26. Notably, the provinceâ€™s Annual Development Programme has fallen from approximately Rs1.24 trillion to around Rs752 billion, a decline that has raised questions regarding the governmentâ€™s development priorities going forward. In this context, the question Punjabâ€™s citizens are entitled to ask is a simple one: where is the performance? If education spending continues to increase every year, it remains unclear why millions of children are still out of school, why parents increasingly rely on private schools despite the existence of a vast public education system, and why employers continue to complain about the quality of graduates entering the labour market. Similarly, despite substantial healthcare allocations, government hospitals remain overcrowded, and many citizens continue to rely on costly private healthcare out of necessity rather than choice. Babar said agriculture and industry are also areas that observers believe deserve far greater attention than they have received. Punjabâ€™s farmers continue to face rising input costs, uncertain crop prices, water shortages, and increasing climate-related risks, and the budget could have done more to support farmer productivity through water-efficient irrigation, wider adoption of agricultural technology, crop insurance, and stronger income protection mechanisms for growers. Punjab remains Pakistanâ€™s largest industrial province, yet businesses operating there continue to grapple with high energy costs, regulatory complexity, limited access to finance, infrastructure bottlenecks, and weakening international competitiveness. Copyright Business Recorder, 2026

Date: 2026-06-24

Details: Published June 24, 2026 Updated 30 minutes ago By Zulfiqar Ahmad ISLAMABAD: Moments after the National Assembly passed the Finance Bill 2026-27, opposition Pakistan Tehreek-e-Insaf (PTI) rejected it on Tuesday, calling the budget â€œanti-peopleâ€ and accusing the government of masking worsening economic conditions with hollow claims of stability. At a meeting of the PTIâ€™s joint parliamentary panel, co-chaired by opposition leader in National Assembly Mehmood Achakzai and acting party chairman Barrister Gohar Ali Khan, the party reviewed the budget session as well as the broader political and economic situation, while further sharpening its criticism of the governmentâ€™s performance. The party argued that inflation, unemployment and the cost of living continue to rise unchecked, dismissing official claims of macroeconomic â€œstabilityâ€ as political messaging detached from the realities faced by ordinary households. Despite their criticism, PTI lawmakers praised their own performance on the floor of the House, insisting they had robustly highlighted fiscal strain and what they termed economic mismanagement throughout the budget debate. The meeting also adopted a resolution condemning National Assembly Speaker Ayaz Sadiq, alleging partisan conduct during the budget session. The party strongly objected to remarks made about opposition leadership, particularly those directed at Achakzai, which it described as inappropriate and politically charged. PTI reiterated its position that the Speakerâ€™s office must remain strictly neutral, warning that this standard was being steadily eroded. Beyond procedural concerns, the opposition also alleged it was being systematically sidelined in parliamentary speaking opportunities and in the visibility of its contributions within media coverage of House proceedings. The meeting further revived long-standing political demands, including calls for the release of former prime minister Imran Khan, along with appeals for improved medical access and family visitation. PTI also reiterated demands for the release of Bushra Bibi and other detained party workers, including those linked to the May 9 unrest, which it continues to describe as politically motivated. Separately, during the National Assembly session earlier in the day, PTI lawmakers turned their attention to the Federal Board of Revenueâ€™s (FBR) proposed AI-assisted â€œfacelessâ€ audit system, warning it could undermine trust in the tax process. Barrister Gohar argued that removing human interaction from audits risks weakening grievance redress mechanisms and eroding taxpayer confidence. He also proposed a significant structural shift in tax policy, suggesting the income tax threshold be raised to an annual Rs3.6 million in line with what he described as international norms. Former National Assembly Speaker Asad Qaiser, speaking on a point of order, broadened the criticism beyond taxation, pointing to economic hardship in the former tribal areas. He cited disrupted trade routes, constrained economic activity, delays in National Finance Commission transfers, and reduced allocations for merged districts, urging targeted relief measures. Another PTI lawmaker, Amir Dogar, warned that inflation and rising utility costs were intensifying pressure on lower-income households, while also criticising tax measures affecting public sector employees and calling for a more equitable distribution of the fiscal burden. Copyright Business Recorder, 2026

Date: 2026-06-24

Details: Published June 24, 2026 Updated about an hour ago By Sohail Sarfraz ISLAMABAD: The government has made over 35 major changes in the Finance Bill 2026 and amended Finance Bill to allow all Pakistani airlines to avail sales tax exemption on the import or lease of aircrafts and its parts from July 1, 2027. According to the amendments approved in the Finance Bill 2026 on Tuesday, a new entry in sales tax exemption schedule said, â€œImport or lease of aircrafts and parts thereof by any airline company registered in Pakistan. This will be effective from July 1, 2027â€. Some amendments relating to the Climate Support Levy in the original Finance Bill 2026 have been dropped through amendments in the Finance Bill. The amendments were proposed in the Petroleum Products (Petroleum Levy and Climate Support Levy Ordinance). The amended Bill revealed that the excise duty on imported electric cars would be calculated based on their values to be calculated US dollars. Zero percent Federal Excise Duty will be applicable on electric cars and electric SUVs, imported in CBU condition having value as determined under section 25 of the Customs Act, 1969, not exceeding USD 75,000. Excise duty of 30 percent would be applicable on electric cars and electric SUVs, imported in CBU condition having value as determined under section 25 of the Customs Act, 1969, exceeding USD 75,000 and up to USD one hundred and ten thousand. Excise duty at the rate of 40 percent would be applicable on electric cars and electric SUVs, imported in CBU condition having value as determined under section 25 of the Customs Act, 1969, exceeding USD one hundred and ten thousand. The amended Finance Bill 2026 revealed that the persons having turnover up to two hundred million may also opt out of fixed tax regime subject to a final and irrevocable certificate filed to the Commissioner before filing of return for tax year 2027. About installment facility on imported mobile phones, the amended Bill said that an individual liable to pay tax on imported mobile phone device through Device Identification, Registration and Blocking System of Pakistan Telecommunication Authority, may be allowed to pay tax in installments as may be prescribed, subject to the condition that all the installments shall be paid before the end of the financial year in which the import is made. The manufacturer shall, apart from any other liability that he may incur, be liable to pay 3 percent value addition tax of imports on an ad valorem basis, along with default surcharge, in case the imported goods are supplied in the same state whether in the same packing, repacked, or in bulk. As per amended Bill 2026, the rate of minimum value addition tax shall be one percent in the case of import of coal, subject to the conditions that such imported coal is exclusively and directly supplied to Independent Power Producers. If any person is found to be involved or abetting in the removal, substitution, damage or otherwise tempering with any goods, whether or not confiscated, at any such place as authorised by the Collector, it added. Under the amended Bill, the income tax exemption would be available on any income derived by a Private Equity and Venture Capital Fund registered under Private Funds Regulations, 2015, if not less than ninety percent of its accounting income of that year, as reduced by accumulated losses and unrealised capital gains, is distributed by the Private Equity and Venture Capital Fund to its unit or certificate holders or shareholders. Provided that this exemption shall not be available if the Private Equity and Venture Capital Fund is established to acquire a public listed company, whose status has not been changed to the private limited company on the acquisition. As per amended Bill, in the case of steel melters, steel re-rollers and composite units, the tax shall be collected on the basis of per unit electricity consumption including use of electricity produced by a captive power plant or through any other alternative source of energy at the rate or rates as prescribed by the Board, through notification in the official Gazette. The tax so collected shall be an adjustable input tax, to be claimed in the return of the month in which such payment is made: Provided also that the Board may prescribe a lower per unit rate or rates of electricity consumption on the basis of input tax paid on imports or other invoices issued through electronic invoicing system digitally issued invoices for compliant and digitally integrated steel melters, re-rollers and composite units to minimise creation of refunds: The per unit sales tax shall be determined by the Board on the basis of minimum notified price and the industrial benchmarks of consumption of electricity against per ton production of steel products, amended Finance Bill added. Copyright Business Recorder, 2026

Date: 2026-06-24

Details: Published June 24, 2026 Updated about 2 hours ago By Naveed Butt ISLAMABAD: The National Assembly is set to approve Rs 17.378 trillion in regular and technical supplementary grants for the financial years 2024-25 and 2025-26. Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb would present regular and technical supplementary grants for the financial years 2024-25 and 2025-26 in the Lower House of the Parliament for approval on Wednesday (today). According to the order of the day of the National Assembly for today (Wednesday), a total of Rs12.65 trillion of demands for supplementary grants for the financial year 2025-26. In detail, repayment of Domestic Debt â€” Rs 12.643 trillion, Election â€” Rs 455.984 million, and Federal Constitutional Court of Pakistan â€” Rs 2.25 billion. The Finance Minister would also present a total of Rs 2.644 trillion demands for supplementary grants for financial year 2024-25 in the house for approval. In details; Staff Household and Allowances of the President (Personal) â€” Rs 208 million, Repayment of Short-Term Foreign Credits â€” Rs 40.350 billion, Audit â€” Rs 63 million, Repayment of Domestic Debt â€” Rs 2.604 trillion (Rs 2 trillion 603.865 billion) About excess demands, the Finance Minister would present a total of Rs 2.088 trillion (Rs 2 trillion 87.572 billion) excess demands for grants for financial year 2024-25. In details; Superannuation Allowances and Pensions â€” Rs 662.850 million, Foreign Loans Repayment â€” Rs 1.548 billion, Repayment of Short-Term Foreign Credits â€” Rs 32.810 million, Servicing of Domestic Debt â€” Rs 169.322 billion, Repayment of Domestic Debt â€” Rs 1.916 trillion (Rs 1 trillion 915.924 billion), Federal Ombudsman Secretariat for Protection against Harassment of Women at Workplace â€” Rs 48.668 thousand and Federal Tax Ombudsman â€” Rs 81.522 million. Copyright Business Recorder, 2026

Date: 2026-06-24

Details: Published June 24, 2026 Updated about 2 hours ago By Naveed ButtZulfiqar Ahmad ISLAMABAD: The National Assembly on Tuesday passed â€˜the Finance Bill, 2026â€™ despite criticism from the opposition, which ultimately staged a walkout, paving the way for the implementation of the 2026-27 budget. The House adopted government-backed amendments and rejected all amendments moved by the opposition. The Lower House has passed the federal budget for the next fiscal year 2026-27, with a total outlay of Rs18.771 trillion, focusing on accelerating the countryâ€™s economic growth. Members of the Jamiat Ulema-e-Islam-Fazl (JUI-F) did not join the walkout staged by Pakistan Tehreek-e-Insaf (PTI). The three female members of JUI-F â€” Aliya Kamran, Naeema Kishwar Khan, and Shahida Begum â€” participated in the legislative process and other business of the House. The House rejected a total of 63 proposed amendments, mostly moved by the three female members of JUI-F in â€œThe Finance Bill, 2026â€. The House adopted two amendments â€” one in clause six and the insertion of a new clause 6A â€” and two amendments in clause five of the bill. These amendments were moved by the Finance Minister in the House. The House approved the amendments. In the Budget-2026-27, the revenue collection target for the Federal Board of Revenue (FBR) is set at Rs15.264 trillion, while the non-tax revenue target is estimated at Rs5.336 trillion for the next fiscal year. A total of Rs1 trillion has been allocated for the federal PSDP 2026-27. The House has approved the largest allocation for the Benazir Income Support Programme (BISP), Rs844.78 billion, to continue its social protection and cash transfer initiatives for low-income households across the country. While discussing the bill, MNA Aalia Kamran questioned whether the government had adequately consulted traders, salaried individuals, small businesses, tax experts, and civil society before finalising the budget. She proposed capping the Petroleum Development Levy at Rs50 per litre, reducing the carbon levy to Rs2.5, lowering taxes on telephone cards and air tickets, and fixing the sales tax rate at 10 percent. Naeema Kishwar Khan opposed the increase in token tax on 1,000cc vehicles from Rs 4,000 to Rs 20,000 and called for avoiding additional taxes on household goods, plastic products, stationery, and hygiene items. She also urged relief for salaried classes and economy-class air passengers. Former National Assembly Speaker Asad Qaiser demanded an extension in tax exemptions for the former FATA and Provincially Administered Tribal Areas (PATA). He said the federal government should return net hydel profit arrears and the remaining share of NFC to Khyber Pakhtunkhwa. Amir Dogar urged the government to extend tax concessions to all airlines operating in Pakistan following the privatisation of Pakistan International Airlines (PIA). He said that on the one hand, the government is paying billions of rupees in capacity payments to IPPs, while on the other, it is imposing taxes on solar systems that provide low-cost electricity. Rana Atif highlighted the growing circular debt burden, which he said had reached Rs2.8 trillion, and pointed to mounting losses of power distribution companies (DISCOs). Muhammad Mubeen Arif stressed that fiscal legislation falls within Parliamentâ€™s constitutional domain and raised concerns over the proposed faceless tax system, arguing that while tax officialsâ€™ identities would remain confidential, taxpayers were not offered similar protection. He also criticised higher withholding taxes, increased penalties, and the creation of another compliance directorate. Usama Mela criticised the tax structure, saying profitable companies continued to enjoy exemptions while taxes were being imposed on infant milk and solar panels. He also called for promoting non-profit social organisations. Acting Pakistan Tehreek-e-Insaf (PTI) leader Barrister Gohar Khan opposed provisions allowing the freezing of assets during trial proceedings, arguing that such measures could discourage business activity and investment. He also questioned the legal and constitutional sustainability of the proposed faceless audit system. Several lawmakers, including Shahida Akhtar Ali, Shandana Gulzar, and Dr Nisar, called for greater tax relief on essential food items, medical equipment, and renewable energy products, while urging measures to protect farmers and the middle class. They also called for support to small and medium-sized enterprises, greater incentives for local industries, revisions to the federal excise framework, and fulfillment of commitments made to the merged districts of the former Federally Administered Tribal Areas (FATA). Copyright Business Recorder, 2026

Date: 2026-06-24

Details: June 24, 2026Faisal Shahnawaz Punjab Revenue Authority tightens operational schedule to meet fiscal year targets by June 30 The Punjab Revenue Authority (PRA) has taken significant administrative measures by extending office working hours and cancelling weekly holidays to ensure the timely achievement of revenue targets for the ongoing fiscal year ending June 30, 2026. According to a PRA spokesperson, all offices of the authority, including the head office, will now operate under an expanded schedule. The revised working hours require staff to remain on duty from 9:00 am to 9:00 pm on a daily basis until the end of the fiscal year. In addition, the authority has officially suspended weekly holidays on both Saturday and Sunday for its officers to maximize operational efficiency. The decision has been implemented following a formal notification issued on the directives of PRA Chairman Moazzam Iqbal Sipra. The move is part of a broader strategy aimed at strengthening revenue administration, improving tax collection processes, and ensuring that assigned financial targets are achieved within the stipulated timeframe. Officials stated that the extension of working hours is intended to accelerate pending assessments, enhance field operations, and improve coordination across different wings of the authority. The intensified working schedule is expected to increase productivity and reduce delays in revenue-related processes. Furthermore, the PRA emphasized that the current fiscal year demands extraordinary efforts due to ambitious revenue goals set by the government. The authority believes that additional working hours and continuous operational availability will help streamline enforcement activities and improve compliance among taxpayers. The spokesperson reiterated that the initiative reflects PRAâ€™s commitment to fiscal discipline and economic stability in Punjab. By maximizing working hours and eliminating downtime during weekends, the authority aims to strengthen its revenue base and contribute more effectively to provincial financial needs. The PRAâ€™s decision highlights the governmentâ€™s focus on enhancing tax collection efficiency and ensuring that all available administrative resources are utilized to meet end-of-year targets successfully.

Date: 2026-06-24

Details: â€¢ GIFT Nifty futures were at 23,861.50 Published June 24, 2026 Updated 29 minutes ago By Reuters Indian shares are likely to open little changed on Wednesday, as a fall in crude prices amid U.S.-Iran peace negotiations is tempered by growing expectations of tighter Federal Reserve policy. GIFT Nifty futures were at 23,861.50 as of 7:58 a.m. IST, indicating the Nifty 50 could open near the close of 23,824.10 points on Tuesday, when Indian blue-chips fell about 1.2%, dragged by heavyweight IT and metal stocks. Shares had gained more than 4% in the previous seven sessions through Monday, as the Middle East peace talks pushed down crude oil prices, improving the growth and inflation outlook for the worldâ€™s No. 3 oil â importer and consumer. Wall Street equities fell overnight as a broad selloff in technology and semiconductor shares, profit-taking after a prolonged rally, and expectations of a more hawkish Fed weighed. Asian markets rose 0.4% after losing about 3.8% in the previous session. Higher U.S. interest rates dent the relative appeal of emerging markets such as India for foreign investors and could cloud the growth outlook in the worldâ€™s largest economy, weighing on sectors exposed to the United States. Brent crude futures fell 0.5%, trading near four-month lows, on signs that more oil tankers stranded in the Gulf since the start of the Iran war â are set to move out of the Strait of Hormuz. Foreign portfolio investors net bought Indian shares worth 178.6 million rupees ($1.9 million) on Tuesday, while domestic institutional investors purchased stocks worth 6.80 billion rupees. Lower crude prices, along with measures to stabilise the rupee and boost foreign inflows, have helped moderate overseas selling over the past two â weeks, two traders said. A revival in monsoon showers and improving earnings could also lure back global investors, who have sold a record $29.84 billion worth of Indian equities so far this year, they said.

Date: 2026-06-24

Details: Published June 24, 2026 Updated about 3 hours ago By Recorder Report LAHORE: All Pakistan Cement Manufacturers Association (APCMA) has welcomed a multi-agency crackdown against an illegal cement manufacturing unit operating under the name M/s Red Bull Cement on Sargodha Faisalabad Road, associated with Rohri Cement. APCMA appreciated the efforts of the Federal Board of Revenue (FBR), Environmental Protection Agency (EPA), and the District Industries Department for taking timely and decisive action against the unauthorized unit through written orders communicated to M/s Red Bull. As reported, the relevant authorities on detailed inspection found the unit to be operating without mandatory approvals, registrations, environmental clearances, and other statutory permissions required under law, and accordingly sealed the premises and suspended operations. The association in a statement here Tuesday commended the commitment shown by the government departments concerned in upholding the rule of law and protecting legitimate businesses. Illegal cement manufacturing not only causes substantial losses to the national exchequer through tax evasion but also undermines fair competition by bypassing the environmental, quality, safety, and regulatory requirements that compliant manufacturers are obligated to meet. Pakistanâ€™s cement industry contributes billions of rupees in taxes to the national exchequer and strictly adheres to regulations issued by FBR, EPA, and other relevant departments. APCMA urged authorities to strengthen oversight mechanisms to proactively identify and act against non-compliant units before such units can cause further damage to the sector. The association remains committed to supporting all regulatory authorities in their efforts to eliminate unlawful industrial activity and ensure a transparent, competitive, and sustainable business environment for Pakistanâ€™s cement sector, the statement concluded. Copyright Business Recorder, 2026

Date: 2026-06-23

Details: Published June 23, 2026 Updated 40 minutes ago By Saeed Akhtar Baloch LAHORE: The fourth day of the budget debate in the Punjab Assembly for the fiscal year 2026â€“27 witnessed another heated exchange between treasury and opposition members. The opposition strongly criticized the governmentâ€™s performance on public healthcare, inflation, farmersâ€™ issues, and the law and order situation, while treasury members defended the governmentâ€™s achievements and development initiatives. During the budget debate, opposition lawmaker Rana Aftab Ahmad raised concerns over the state of the healthcare sector, stating that some patients at the Punjab Institute of Cardiology (PIC) have to wait years for surgical procedures. He also pointed out that CT scan machines at Childrenâ€™s Hospital and Allied Hospital were out of order, causing difficulties for patients. Defending the governmentâ€™s performance, Sports Minister Faisal Ayub Khokhar said that 188 sports complexes were being constructed across Punjab. He added that sports grounds would be established in 1,000 schools and province-wide youth games would be organized to promote sporting activities among young people. Education Minister Rana Sikandar Hayat criticized the opposition and highlighted government initiatives, saying that thousands of scholarships, laptops, and electric bikes had been provided to students in South Punjab. He further stated that millions of children were benefiting from nutritional support under the School Meal Programme. Law and order situation, particularly the role of the Crime Control Department (CCD), also remained a major focus of the debate. Opposition member Rana Shehbaz alleged that innocent citizens were being affected during CCD operations and called for impartial investigations into recent incidents. Lawmaker Awais Warraich raised the issue of a young man who was allegedly shot by a police officer in his constituency and demanded that the assembly take notice of such incidents. Several members called for investigations into complaints against the CCD and police. Speaker Malik Muhammad Ahmad Khan directed the law minister to take the Houseâ€™s concerns seriously. He also indicated that reports would be sought on various incidents, including the Chakwal case. Responding to the concerns, Law Minister Rana Muhammad Iqbal assured the House that the Inspector General of Punjab Police would be consulted and that complaints raised by lawmakers would be reviewed seriously and addressed accordingly. Following the completion of speeches by all participating members and the conclusion of the dayâ€™s agenda, Iftikhar Hussain Chhachhar, a member of the Panel of Chairpersons, adjourned the session until 11:00 a.m. on Tuesday. Copyright Business Recorder, 2026

Date: 2026-06-23

Details: Published June 23, 2026 Updated about 3 hours ago By Dr Hafiz A Pasha The first article on features of the federal budget of 2026-27 was published last week, with a focus on the more aggregate trends and projections. This article looks at the federal budget in a more disaggregated manner. We first examine the trends and projections in different sources of revenue. The income tax revenues growth in 2026-27 is expected to almost double from 9.3 percent in 2025-26 to 18.1 percent. This is anticipated despite the significant reduction in the rates of personal income tax and super tax. The expected improvement is in the audit process. However, the amount raised out of demand following audit has hitherto been under 5 percent of total revenues from the income tax. The second optimistic projection is of revenues from customs duty. It showed a growth of only 6.4 percent in 2025-26, but is projected to rise by as much as 20.9 percent in 2026-27. The exchange rate is expected to depreciate by 4.3 percent. As such, the dollar value of imported goods is projected to increase by as much as 16.3 percent. This is substantially above the projection officially of imports in 2026-27. The third overstated projection is related to excise duty, with the highest growth rate in revenues among the different taxes, of 26 percent. There is no visible increase in tax rates. Here the expectation is of a big reduction in tax evasion in cigarettes manufacturing. Overall, the FBR revenue projection is visibly optimistic and we could once again see a shortfall of almost Rs 1,000 billion, as will be the case in 2025-26. There is, however, a visible slowdown in own non-tax revenues. This is primarily due to the decline in SBP profits of 7.3 percent in 2025-26. They are now expected to fall by as much as 41 percent in 2026-27. This is primarily due to the sharp fall in interest rates from the peak level in 2022-23. Overall, the level of own non-tax revenues of the federal government is expected to fall by as much as 16 percent in 2026-27. This explains why the provincial governments have been compelled to make a large combined grant for the first time to the federal government of Rs 1,035 billion. If these grants do flow into Islamabad in 2026-27, then the total non-tax revenues, including these grants will still show a positive growth rate of only 4.8 percent. The petroleum levy yielded an additional 22.7 percent in 2025-26, despite the rise in international POL prices. It is expected to yield another 11.9 percent in 2026-27. The likely fall in international prices should not precipitate an escalation in the levy. The benefit should be passed on entirely to consumers. This will constitute a major source of relief in 2026-27. The big fall in petrol and HSD prices announced recently will provide substantial relief and is fully appreciated. We turn now to a disaggregated analysis of federal expenditure. The fundamental question is why total expenditure, current plus development, will rise by as much as 20 percent in 2026-27? Examination of the budgetary provisions for current expenditure reveals that the debt-servicing outlay is projected to rise by 16.1 percent in 2026-27. This highlights the projection of higher interest rates next year. However, the end of war in the Middle East should facilitate constancy, if not a fall, in interest rates. The defence expenditure allocation implies a growth rate of almost 16 percent in 2026-27. This is probably required, given the tense situation both in the Eastern and Western borders, plus the rise in the incidence of terrorism in the country. Subsidies are expected to actually decline by almost 6 percent in 2026-27. This includes some containment in the power differential subsidy. Presumably, there will not be a blanket very low tariff rate on small consumers. Instead, eligibility will be determined through a type of survey that was undertaken earlier by the BISP (Benazir Income Support Programme). An unprecedented massive increase in grants of 36 percent has been included in the federal budget. This is after a relatively large increase of 20.8 percent in 2025-26. One of the major grants is the allocation of funds to the BISP. This has been recognized as an effective programme and the IMF Programme has also provided for an increase in the financial projections. The grant to the BISP is proposed to be increased by 17.5 percent from Rs 729 billion in 2025-26 to Rs 857 billion in 2026-27. This will enable both an increase in coverage and in the size of a per family cash grant. This is necessary, given the underlying trend of rise in the incidence of poverty due both to rising food prices and higher unemployment. There is, however, a very unusual item that has been included as a large recipient of grants. This is a lump sum provision of as much as Rs 365 billion in the 2026-27 budget in the form of a grant for National Economic Initiatives. The Finance Minister should have indicated the particular initiatives chosen for 2026-27 and their justification. The level of development spending is showing a large fluctuation. It was cut back by almost 54.5 percent in 2025-26 to enable achievement of the budget deficit target for the year in the IMF Programme. The 2026-27 federal budget proposes a massive increase to Rs 1275 billion, including Rs 275 billion of lending to State-Owned Enterprises (SOEs). Top priority ought to have been given to projects in the Water Resources sector in view of Indiaâ€™s plans to reduce the access to water of Pakistan. Unfortunately, this is not reflected in the sectoral development allocations, with no increase in allocations to this sector. The National Highways Authority continues to receive the largest share of 25 percent in development expenditure. The allocation to investments in Power Transmission and Distribution is also low at Rs 105 billion, despite the high such losses in the power sector. Finally, we come to the financing of the projected budget deficit of Rs 5,226 billion, equivalent to 3.5 percent of the projected GDP in 2026-27. A primary surplus of 2.5 percent of the GDP is also anticipated. Within the sources of financing, the primary importance is of external financing. Ambitious targets have also been set here for the gross inflow of external financing in 2026-27. The quantum of such financing is expected to rise by over 29 percent, from USD 18.1 billion to USD 23.4 billion. However, the really worrying magnitude is the expected quantum jump in repayments of 59.5 percent from USD 12.6 billion to USD 20.1 billion. Consequently, the net inflow is projected at only USD 3.3 billion in 2026-27, compared to USD 5.5 billion in 2025-26. This implies greater pressure on the foreign exchange reserves in 2026-27. Overall, the 2026-27 budget is a high-risk budget with a high growth anticipated in FBR revenues, reliance for the first time on large grants from provincial grants and continuation of generation of large cash surpluses by these governments despite these grants. There is need for sectoral reallocation of the federal PSDP, with substantially large expenditure on on-going water resource projects next year. Also, non-transparent expenditure like those on unknown National Economic Initiatives must be avoided. The focus in next weekâ€™s article will be on the Provincial budgets of 2026-27 announced recently. An analysis of these budgets reveals that the big grants to the federal government could lead to a shortfall of almost Rs 1,000 billion in the target level of provincial cash surpluses, despite big cuts in development spending. Consequently, the consolidated budget deficit could be higher by Rs 1,000 billion in 2026-27 in relation to the level agreed with the IMF. Copyright Business Recorder, 2026

Date: 2026-06-23

Details: Published June 23, 2026 Updated about 3 hours ago EDITORIAL: Balochistanâ€™s latest budget arrives wrapped in the language of fiscal discipline, development and prudent management. A projected surplus of Rs45.66 billion, no new taxes, increased allocations for health and education, investment incentives and claims of record development spending would ordinarily provide reasons for optimism. Yet the budget season in Pakistan has a way of encouraging caution. The country has seen too many ambitious promises; impressive projections and glowing official statements fail to survive contact with reality. That does not mean the budget should be dismissed. The provincial government deserves some credit for presenting what appears, on paper, to be a relatively balanced financial plan under difficult circumstances. Provinces are operating under growing fiscal constraints, particularly as the federation seeks larger provincial surpluses to help meet commitments under the IMF programme. The room for manoeuvre is considerably narrower than it once was, making development spending and social sector allocations harder to sustain. This broader context is important. Provincial budgets can no longer be viewed in isolation from the federal governmentâ€™s fiscal challenges. Efforts to maintain primary surpluses and satisfy external financing requirements inevitably shape spending decisions across the federation. In that sense, Balochistan is attempting to balance competing pressures: fiscal restraint on one side and immense development needs on the other. The challenge is that Balochistanâ€™s needs remain extraordinary. It is Pakistanâ€™s largest province by area, yet it continues to lag behind in infrastructure, education, healthcare and economic opportunity. The oppositionâ€™s criticism that a development allocation of roughly Rs206 billion remains inadequate for a province of such scale cannot simply be dismissed as routine political point-scoring. The provinceâ€™s development deficit is real, and addressing it requires resources on a scale that annual budget exercises alone cannot easily provide. Questions surrounding federal transfers further complicate the picture. Opposition lawmakers have argued that reductions in federal allocations have constrained development spending and limited the provinceâ€™s ability to address longstanding challenges. Government representatives, meanwhile, contend that negotiations helped prevent even deeper cuts. Regardless of where responsibility ultimately lies, the debate highlights an uncomfortable reality: Balochistan remains heavily dependent on decisions made elsewhere. That dependency sits uneasily alongside the provinceâ€™s resource wealth. The recurring argument that Balochistan contributes significantly to the national economy while remaining underdeveloped has become a permanent feature of the provinceâ€™s political discourse. Whether the issue is natural gas, minerals, fisheries or major infrastructure projects, questions regarding resource ownership, revenue sharing and development outcomes continue to shape relations between the province and the federation. The budgetâ€™s claims also warrant careful scrutiny. The governmentâ€™s assertion that development utilisation reached 115 percent during the outgoing fiscal year is certainly notable. It is also a figure that demands verification through completed projects, improved services and measurable outcomes. Budget documents are filled with numbers. Yet citizens experience governance through roads that function, schools that teach, hospitals that heal and jobs that materialise. That distinction is particularly important in Balochistan, where ambitious announcements have often struggled to translate into visible improvements on the ground. Long-delayed projects, incomplete infrastructure and recurring governance concerns have understandably produced a degree of public scepticism. The oppositionâ€™s complaints regarding unfinished schemes, recruitment delays and persistent security challenges reflect frustrations that cannot be resolved through accounting presentations alone. The budget therefore deserves neither uncritical praise nor summary dismissal. It should be judged against the same standard that applies to every provincial and federal budget in Pakistan: IMPLEMENTATION. The figures may appear encouraging today. The allocations may seem reasonable. The projections may be achievable. But budgets are ultimately promises written in numbers. Their credibility emerges only when those numbers translate into tangible outcomes. Balochistan has heard ambitious promises before. This time, as always, the proof will be in the spending. Copyright Business Recorder, 2026

Date: 2026-06-23

Details: Published June 23, 2026 Updated about 3 hours ago By Ehsan Malik The FY26/27 budget deserves credit for easing the disproportionate burden on Pakistanâ€™s formal sector. Relief on selected withholding taxes, rationalisation of certain measures and the shift toward faceless tax administration all point in the right direction. They acknowledge that the formal economy cannot keep absorbing a rising share of taxation while competing with untaxed or under-taxed sectors. But the budget also exposes an unfinished task: the absence of the mediumterm tax reform framework the Tax Policy Office (TPO) was created to deliver. The TPOâ€™s mandate goes beyond annual revenue targets. It was meant to design a phased programme that broadens the base, promotes formalisation, supports exports, creates jobs and gradually aligns Pakistanâ€™s tax rates with competing developing economies. It was also intended to coordinate tax policy across ministries and governments, so taxation supports economic objectives rather than undermining them. Its creation recognised that taxation is too important to be driven by yearly revenue exercises and to separate policy from collection of taxes. Tax policy should shape investment, formalisation, employment, exports and productivity. A country seeking sustained growth cannot redesign its tax system one budget at a time. Because the framework was not completed before the budget, the document offers useful measures but not yet a destination. And what gets measured determines what gets managed. For decades, Pakistan has judged tax policy through taxtoGDP ratios, gross collections and compliance actions. These metrics are incomplete. A taxtoGDP target can be met by taxing those already in the net more heavily. Gross collections can rise by delaying refunds, hurting documented businesses. Revenue targets can be achieved even as investment stagnates and formal employment declines. The real question is whether the tax system advances Pakistanâ€™s broader economic goals: formalisation, investment, job creation, exports, foreign investment and productivity. A regime that raises revenue while suppressing activity ultimately defeats itself. It also destroys jobs and prevents reduction in poverty level. Reform should begin with clarity on where Pakistan wants its tax system to be in five years. Investors need predictability, not annual surprises. A roadmap can be as valuable in restoring investor confidence as an immediate rate cut. One objective should be gradually aligning tax rates with regional competitors. Pakistanâ€™s corporate burden remains high even without super tax and other levies. Marginal rates on individuals and AOPs are among the regionâ€™s highest - more than twice Indiaâ€™s. Numerous withholding, advance and turnover taxes act as taxes on activity rather than on profit, discouraging investment and formalisation. A mediumterm plan should phase in lower rates accompanied by measurable progress in broadening the baseâ€”an approach that has underpinned successful reforms in many emerging economies. The challenge is not only enforcement. It requires integrated data, digitised transactions, improved land and property records and the political will to tax historically exempt sectors. Here the TPOâ€™s coordinating role is essential. Many distortions stem from fragmentation between federal and provincial jurisdictions. Property and agricultural taxation lie largely with provinces but directly affect federal revenues, investment and growth. A coherent reform agenda requires a shared framework. Tax policy must also align with Pakistanâ€™s growth strategy. If exports are the path to sustainable growth, taxation should reward competitiveness. If formal employment is a priority, the cost of hiring formally should not exceed that of informal competitors. If Pakistan seeks exportoriented local and foreign investment, the tax regime must be predictable and competitive. Removing super tax and advance tax on exporters is a good start but regional benchmarking leaves room for further cuts. Success must be measured intelligently. Alongside taxtoGDP, Pakistan should track growth in active taxpayers, taxes collected from previously untaxed sectors, formal employment, private investment, export growth and refund payment times. These indicators reveal whether the base is broadening or the burden is simply deepening. Pakistan does not lack taxes; it lacks tax policy. The FY26/27 budget offers useful relief and a more constructive direction. The task now is to complete the work the TPO was created to do: replace annual revenue firefighting with a coherent fiveyear strategy that broadens the base, lowers rates, promotes formalisation and supports investment, employment and exports. Until then, Pakistan will keep measuring the wrong thingsâ€”and taxing the wrong people. Copyright Business Recorder, 2026

Date: 2026-06-23

Details: Published June 23, 2026 Updated about 3 hours ago EDITORIAL: Khyber Pakhtunkhwa (KPK) budget for 2026-27 presented by Chief Minister Sohail Afridi unveiled a total outlay of 2.17 trillion-rupee - 48 billion-rupee deficit - budget with no budgeted grant for the federal government as that decision rested with the incarcerated former leader of the Pakistan Tehrik-i-Insaaf (PTI). While this is clearly a political gambit with the purpose of compromising the commitment made by the Centre to the International Monetary Fund under its ongoing programme the allocation for development outlay, the item that other provinces scaled down to create fiscal space fort the Centre, has been reduced from 608.5 billion rupees in the revised estimates of the current year to 524.3 billion rupees budgeted for 2026-27 â€“ a decline of 14 percent though the budget document claims that next fiscal year consists of the largest development programme in the provinceâ€™s history â€œto accelerate economic recovery, stimulate employment creation, strengthen infrastructure, improve service delivery outcomes and reduce regional disparities.â€ The break-up is as follows: Annual Development Plan (ADP) of settled districts 316.8 billion rupees, ADP of devolved settled districts 235 billion rupees, ADP of provincially-merged districts 47 billion rupees and ADP of devolved managed districts 29 billion rupees. And current expenditure has been budgeted to rise from 1433 billion rupees in the revised estimates of last year to 1645.7 billion rupees next fiscal year - a rise of 14.7 percent. The Sindh budget envisaged a deficit of 36.9 billion rupees, one percent of total budgeted outlay for the year, despite accounting for 14.62 percent of NFC transfers, Khyber Pakhtunkhwaâ€™s budget contributes less to the consolidated provincial surplus assumed in the federal budget than Sindhâ€™s, reflecting its larger fiscal deficit relative to its total outlay (out of the total budget outlay of Rs 2.17 trillion, this 48 billion rupees shortfall translates to a fiscal deficit of approximately 2.2 percent of the total KPK budget size). Be that as it may, the provinceâ€™s lament for the failure of the Centre to give its due share under the award may echo the same concerning sentiments expressed by other provinces though no doubt shared mostly behind closed doors and quickly resolved. The KPKâ€™s lament focused on three major failures of the Centre: (i) the continued application of horizontal distribution parameters based on pre-merger demographics does not reflect KPKâ€™s concurrent constitutional and administrative responsibilities with 964.158 billion rupees outstanding for 8 years. The dig at the Centre, for failing to proactively engage in the eleventh NFC award is implied in the White Paper. The KPK government has sought 3 percent of share of the divisible pool of the NFC award in line with the national consensus reached at the time of the merger to address the decades of underinvestment and accelerate the merged districts socio-economic convergence with the rest of the country; (ii) the implementation of the KPK Local Government Act 2013 in line with Article 37(i) of the Constitution the provincial government approved an Interim Finance Commission Award covering the period from 1 July to 30 June 2027, which provides the framework for the transfer of allocable resources for the Provincial Consolidated Fund to local governments; and (iii) like the other three provinces the sales tax receipts, as pledged to the IMF, are projected to rise from 57 billion rupees in the revised estimates of the outgoing year to 80- billion rupees for next year â€“ a 40 percent rise however the revenue from agricultural income tax remains insignificant â€“ 3 billion rupees next fiscal year against â€“ or in other words political considerations outweighed economic considerations â€“ in common with the other three provinces. The heavy reliance on the divisible pool taxes as well as reliance on indirect taxes, whose incidence on the poor is greater than on the rich, as the major source of provinceâ€™s own revenue continued in the budget for next fiscal year in common with the two other but richer provinces, notably Punjab and Sindh, a reliance that the provinces had pledged to the IMF that they would reduce. Copyright Business Recorder, 2026

Date: 2026-06-23

Details: Budget 2026-27 Taxation June 23, 2026Faisal Shahnawaz Rashid Langrial commends officials for crafting a growth-oriented budget through extensive coordination and stakeholder engagement ISLAMABAD: Chairman Federal Board of Revenue (FBR) Rashid Mahmood Langrial and Finance Secretary Imdad Ullah Bosal hosted a luncheon on Monday to honour the core team responsible for preparing the Federal Budget 2026-27, praising officials for successfully delivering a complex, growth-oriented and people-centric budget. The event was attended by FBR board members and senior officials from the Ministry of Finance and the Federal Board of Revenue, recognising the collaborative effort behind the formulation of the countryâ€™s fiscal plan for the upcoming year. Addressing the gathering, FBR Chairman Rashid Mahmood Langrial commended the team for its professionalism, dedication and hard work throughout the budget preparation process. He said the budget was designed to promote economic growth while providing relief to citizens and supporting the governmentâ€™s broader reform agenda. Langrial noted that the budget-making exercise involved extensive consultations with a wide range of stakeholders, including revenue authorities, the Tax Policy Office (TPO), various federal ministries, parliamentary standing committees and provincial governments. Despite the complexity of the process and the numerous consultations involved, he said the budget was prepared and finalised smoothly, with all major policy measures envisioned by the government successfully incorporated into the final document. He particularly appreciated the close coordination between the FBR and the Tax Policy Office, describing the partnership as highly effective throughout the budget cycle. Finance Secretary Imdad Ullah Bosal also congratulated members of the budget team, describing the Federal Budget 2026-27 as both people-centric and growth-oriented. He emphasised that successful budget preparation requires not only sound policy formulation but also strong coordination among institutions working towards common economic objectives. During the ceremony, senior officials acknowledged the contributions of several officers who played key roles in shaping the budget. Member Strategic Transformation Dr Hamid Ateeq Sarwar was recognised for leading the overall budget process and representing the governmentâ€™s position during negotiations with the International Monetary Fund (IMF), as well as engagements with Senate and National Assembly standing committees and other stakeholders. Director General Tax Policy Office Dr Najeeb Memon received appreciation for advocating relief measures within the framework of Pakistanâ€™s IMF commitments and for supporting policies aimed at promoting economic growth and public welfare. Member Customs Policy Ashad Jawad was commended for managing negotiations on customs-related measures, while Member Administration Muhammad Iqbal Khan was recognised for ensuring smooth logistical arrangements, including the printing and timely distribution of budget documents. TPO Directors Ajaz Hussain and Chaudhry Munir Ahmed were praised for their professionalism and dedication throughout the budget preparation process. Project Director Tax Data Unit Dr Najeebullah was acknowledged for his technical expertise, analytical contributions and commitment during the budget exercise. Special Assistant to Member Strategic Transformation Dr Zehra Farooq received recognition for her research work, policy briefs and technical support, while Special Assistant to Member Policy Ali Abbas was commended for drafting legislative proposals and coordinating contributions from various departments into a comprehensive Finance Bill. Officials said the luncheon reflected the governmentâ€™s appreciation for the technical expertise, coordination and commitment demonstrated by the budget team in formulating the Federal Budget 2026-27, one of the countryâ€™s most important policy documents guiding economic management and fiscal strategy for the coming year.

Date: 2026-06-23

Details: Published June 23, 2026 Updated about 3 hours ago By Recorder Report KARACHI: A trade delegation from Iranâ€™s Khorasan province visited the Korangi Association of Trade and Industry (KATI), where both sides agreed to strengthen industrial, trade, and investment ties, promote business-to-business linkages, and enhance bilateral trade between Pakistan and Iran. The meeting was attended by Commercial AttachÃ© of the Consulate of Islamic Republic of Iran Murad Nemati, Executive Director of Dispatching Trade Delegation Mohsen Fallah, members of the trade delegation from Iranâ€™s Khorasan Razavi Province, KATI Vice President Muhammad Talha Ali, former KATI President Junaid Naqi, and other business leaders. Addressing the gathering, KATI President Muhammad Ikram Rajput said that Pakistan and Iran enjoy significant untapped potential for expanding bilateral trade and emphasized the need for practical measures to unlock these opportunities. He called for the facilitation of border trade, strengthening of banking channels, improvement of customs and logistics infrastructure, and greater participation of the private sector to ensure that the benefits of economic cooperation reach the people of both countries. Rajput proposed the activation of joint business councils and industrial forums, the regularization of business-to-business (B2B) meetings, and the promotion of joint investments in key sectors including food processing, pharmaceuticals, textiles, energy, and infrastructure. He also stressed the importance of creating collaborative platforms for young entrepreneurs and startups to foster innovation and cross-border business partnerships. Paying tribute to the Iranian nation, Rajput praised Iranâ€™s diplomatic efforts aimed at reducing global tensions and promoting dialogue and peace. He said the Iranian people had demonstrated unity, resilience, and steadfastness under challenging circumstances, presenting an example of dignity and determination to the world. He also commended the efforts of the Prime Minister of Pakistan, Field Marshal Asim Munir, and other stakeholders for their contributions toward regional peace and stability. Iranian Commercial AttachÃ© Murad Nemati emphasized the need for a new era of economic integration between Pakistan and Iran. He said the two brotherly countries should capitalize on their strategic geographic locations and transform their relationship into a long-term strategic economic partnership through joint ventures and enhanced economic cooperation. Nemati noted that such collaboration would open new avenues for trade, investment, and prosperity not only for Pakistan and Iran but for the wider region. He thanked the Government of Pakistan and the Pakistani people for their support and solidarity with Iran during difficult times, adding that recent developments had further strengthened the deep-rooted brotherly relations and mutual trust between the two neighbouring countries. Copyright Business Recorder, 2026

Date: 2026-06-22

Details: Published June 22, 2026 Updated about 2 hours ago By Recorder Review KARACHI: The Pakistan Stock Exchange (PSX) witnessed a strong bull run during the outgoing week as easing geopolitical tensions in the Middle East, coupled with investor-friendly fiscal measures announced in the FY27 budget, significantly boosted sentiment and triggered aggressive buying across major sectors. The benchmark KSE-100 Index surged by 6,522.84 points, or 3.8 percent, on a week-on-week basis to close at 178,922.75 points, compared with 172,399.91 points a week earlier. The BRIndex100 advanced from 19,067.69 points to 19,844.46 points, registering a gain of 776.77 points during the week. Total turnover in the index stood at 4.32 billion shares, translating into an average daily turnover of approximately 864.81 million shares. Similarly, the BRIndex30 rose from 69,412.84 points at the beginning of the week to 72,590.00 points at the close, posting a substantial gain of 3,177.16 points. Weekly turnover in the index reached 2.60 billion shares, averaging around 519.48 million shares per trading day, indicating strong participation in blue-chip stocks. Investors welcomed the landmark Islamabad Memorandum of Understanding (MoU) signed between the United States and Iran, which substantially reduced regional uncertainty and eased concerns over global energy supplies. The reopening of the Strait of Hormuz and the subsequent decline in international oil prices further supported market sentiment, with Brent crude falling to around $80 per barrel, encouraging investors to rebuild positions in Pakistani equities. Domestic policy developments also emerged as a key catalyst for the rally. The government unveiled the FY27 Finance Bill, introducing several measures aimed at improving corporate profitability and stimulating economic activity. Among the major announcements was the complete abolition of the Super Tax for companies with annual earnings of up to Rs500 million, alongside a 2 percent reduction in corporate tax rates for higher-income firms, significantly improving earnings prospects for listed companies. Investor confidence was further reinforced after the State Bank of Pakistan (SBP) kept the benchmark policy rate unchanged at 11.5 percent during its June Monetary Policy Committee meeting. The central bank maintained that recent inflationary pressures were largely driven by external factors, particularly elevated oil prices stemming from earlier geopolitical tensions in the Middle East, rather than excessive domestic demand. Pakistanâ€™s external sector also continued to improve. The country recorded a current account surplus of USD459 million in May 2026, driven primarily by robust workersâ€™ remittances, taking the cumulative current account surplus during 11MFY26 to USD255 million. Industrial activity also showed signs of strengthening. Large-Scale Manufacturing (LSM) expanded by 6.1 percent year-on-year in April 2026, while cumulative growth during 10MFY26 reached 6.44 percent, indicating sustained recovery in industrial output. Meanwhile, the governmentâ€™s latest Pakistan Investment Bond (PIB) auction attracted strong investor participation, with authorities raising Rs649 billion. Yields across various tenors declined by 34 to 116 basis points, reflecting improving confidence in the countryâ€™s inflation and interest rate outlook. The robust market rally significantly boosted investor wealth. Total market capitalization increased by 4.6 percent, rising to Rs19.99 trillion from Rs19.12 trillion a week earlier, representing an increase of approximately Rs874.40 billion. In dollar terms, market capitalization climbed to USD71.86 billion from USD68.70 billion. Trading activity also strengthened considerably during the week, reflecting renewed investor confidence and aggressive accumulation across the broader market. Average daily traded volume (ADTO) in the ready market surged 47.8 percent to 1.15 billion shares, compared with 775.96 million shares a week earlier. In value terms, average daily traded value more than doubled, rising 118.4 percent to Rs63.01 billion from Rs28.86 billion recorded in the previous week. In dollar terms, average daily turnover similarly jumped 118.4 percent to USD226.44 million, compared with $103.67 million a week earlier, underscoring a sharp improvement in market liquidity and institutional participation. Market participants said the combination of geopolitical de-escalation, a stable monetary policy stance, improving external account indicators and growth-oriented tax measures provided a strong foundation for the marketâ€™s upward trajectory. Going forward, analysts expect investor focus to remain on the implementation of budgetary measures, progress on structural reforms and developments on the international geopolitical front. Sustained stability in global oil prices and continued improvement in macroeconomic indicators are likely to remain key drivers of market sentiment in the coming weeks. Copyright Business Recorder, 2026

Date: 2026-06-22

Details: Published June 22, 2026 Updated about 2 hours ago By Naveed ButtZulfiqar Ahmad ISLAMABAD: In a pointed yet conciliatory overture to the opposition, Finance Minister Muhammad Aurangzeb on Sunday urged Pakistan Tehreek-e-Insaf (PTI) to return to the standing committees of both National Assembly and Senate, praising their input during last yearâ€™s budget cycle as â€œcommendableâ€. Winding up the debate on cut motions on the different ministryâ€™s demands for grants, Aurangzeb struck a noticeably inclusive tone on the floor of the House. Addressing PTI lawmakers Mubeen Arif and Osama Mela â€“ whom he singled out for their command of economic jargon â€“ he said the government valued â€œconstructive oppositionâ€ at committee level and would welcome their return â€œwithout hesitationâ€. â€œWe felt the absence of members Mubeen Arif and Osama Mela this year,â€ he remarked, adding that their proposals would not merely be heard but actively considered should they rejoin the process. The minister maintained that ongoing reforms at the Federal Board of Revenue (FBR) would help the government meet next fiscal yearâ€™s tax targets. He insisted the policy direction was shifting away from simply increasing the tax burden towards structural reform â€“ both in taxation and in the energy sector, as highlighted by the Power Ministry â€“ alongside changes in debt servicing and pension systems. Aurangzeb said economic indicators had improved markedly compared to â€œtwo to two-and-a-half years agoâ€, crediting the direction of the government under Prime Minister Shehbaz Sharif. He recalled that when the government assumed office in 2022, no allocations had been made for the Public Sector Development Programme (PSDP), with development funding reportedly constrained to the point of quarterly disbursement difficulties. On macroeconomic indicators, he cited growth at 3.7 per cent, while claiming debt servicing had been reduced progressively from 75 per cent of GDP to 70 per cent and then to 68 per cent. He further said tax revenues had doubled compared to last year and insisted no new taxes had been imposed on the masses. Turning to youth employment, Aurangzeb said the government was pursuing an â€œecosystem-basedâ€ approach and urged provinces to replicate Sindhâ€™s public-private partnership model in development planning. He expressed confidence that ongoing reforms would enable the government to meet its revenue targets in the coming fiscal year. On regional developments, he referenced the ceasefire between the US and Iran, saying its early impact was already visible through recent reduction in petroleum prices, and expressed cautious hope that stability would hold. The otherwise technocratic tone of the debate was repeatedly punctured by opposition interventions. PTIâ€™s Zain Qureshi questioned the performance of the FBRâ€™s Point of Sale system and warned that debt had become an increasingly heavy drag on the economy. Shahida Akhtar Ali of JUI-F called for salary increases for public sector employees in line with inflation, while other lawmakers raised a familiar catalogue of grievances: unpaid salaries for university staff in Balochistan, limited development gains from CPEC projects, concerns over Independent Power Producers, delays in the merged districts, and demands for widening the tax base instead of increasing rates. Calls also echoed across the House for infrastructure development in under-served regions, including highways, bridges and interchanges, alongside criticism of unemployment, fiscal mismanagement and what several members described as persistent neglect of southern Punjab. Planning Minister Ahsan Iqbal stepped in to dispel what he called â€œlongstanding confusionâ€ over the Lahore Orange Line Metro Train project, insisting it was fully financed by the Punjab government and did not draw from the federal exchequer. He categorically stated the project lay outside the China-Pakistan Economic Corridor (CPEC) financing framework, adding: â€œThe federal government did not contribute a single rupee.â€ In a brief departure from the chamberâ€™s usual temperature, Power Minister Awais Leghari personally crossed the floor to receive an electricity bill presented by PTIâ€™s Sanaullah Mastikhail, who had highlighted a sharply inflated charge of 1,200 units linked to an overseas acquaintanceâ€™s household. The gesture drew rare appreciation from the opposition lawmaker, with the minister thanking him for raising the issue â€“ a fleeting moment of procedural civility in an otherwise combative sitting. Earlier, Defence Minister Khawaja Asif delivered one of the dayâ€™s most politically charged interventions, warning against what he described as a growing â€œVigo Dala cultureâ€ around Parliament â€“ a reference to expanding convoy-style security movements using Toyota Hilux vehicles. He cautioned that increasingly elaborate protocol arrangements and security-linked privileges were projecting an image of unchecked authority rather than accountable governance. He also criticised symbolic displays such as flag-laden ministerial convoys, calling for what he termed a â€œcultural resetâ€ in political conduct. Asif further raised concerns over parliamentary discipline, alleging lax control over visitor access to sensitive areas and the casual recording of proceedings. NA Speaker Ayaz Sadiq responded by directing members to strictly observe entry protocols, stressing that parliamentary rules were not optional etiquette but binding procedures requiring full compliance. In a separate development, the House approved a motion moved by PTI acting chairman Barrister Gohar Ali Khan to restore PTI lawmaker Iqbal Afridi, ending his suspension. Copyright Business Recorder, 2026

Date: 2026-06-22

Details: Published June 22, 2026 Updated about 2 hours ago EDITORIAL: A recent media report has highlighted a view gaining traction within policymaking circles that the NFC Awardâ€™s vertical resource-sharing formula between the Centre and the provinces has become unsustainable, and must be revised to reflect the fiscal realities confronting the federal government. Proponents argue that the current arrangement leaves the Centre with insufficient resources to meet its core obligations, particularly defence and debt-servicing. The debate centres on the fiscal framework established under the seventh NFC Award following the 18th Amendmentâ€™s passage, which raised the provincial share of the divisible tax pool to 57.5 percent and reduced the federal share to 42.5 percent. Crucially, it also mandated that any future NFC Award cannot reduce the provincial share below its existing level, effectively making any change to the vertical distribution contingent upon a constitutional amendment. However, given the sensitivity of the issue, the provinces so far havenâ€™t been able to agree to such an amendment. A workaround was instead devised during recent budget-making sessions, whereby the provinces voluntarily surrendered Rs1.035 trillion to the Centre from their share of the divisible tax pool. Yet influential quarters remain convinced that the underlying imbalance will eventually require a constitutional amendment. What is often overlooked in this debate, however, is that the existing formula was grounded in specific assumptions: that the economy would grow at a pace sufficient to expand the overall fiscal pie, and that the devolution of subjects such as education and health to the provinces, as mandated by the 18th Amendment, would be matched by the abolition of corresponding federal ministries. Neither expectation materialised. Growth remained below projections, while many devolved ministries continued to operate at the Centre, forcing the federal government to finance responsibilities that were expected to disappear. Had these assumptions held, the fiscal pressures now cited as evidence of the vertical formulaâ€™s unsustainability may have been far less severe. Yet even as attention focuses on the vertical distribution of resources, far too little is being said about what is arguably an even more unsustainable aspect of the NFC framework: the horizontal formula governing resource distribution among the provinces. Under this arrangement, population accounts for a massive 82 percent of the weight used to distribute resources among provinces. Such overwhelming reliance on this metric effectively rewards rapid population growth. This is particularly alarming as Pakistanâ€™s population growth rate is perhaps the countryâ€™s most pressing existential challenge. At 2.55 percent annually, the population is expanding at a pace that requires GDP growth of at least six percent every year simply to keep up with the demands generated by a rapidly growing population. And, given Pakistanâ€™s current productive capacity, that is unlikely to happen. The consequences are already visible. Hundreds of thousands of young people enter the labour force every year, yet the economy lacks the capacity to absorb them. Unemployment remains rampant, social pressures continue to mount and Pakistan contends with an accelerating brain drain, with many of its brightest minds choosing to build their futures elsewhere. When population remains a dominant factor not only in resource allocation but also in federal job quotas and other governance structures, the incentive for effective population control inevitably weakens. If Pakistan is serious about addressing its long-term challenges, reforming the horizontal distribution formula deserves as much attention as the debate over the vertical one. Unlike changes to the federation-province resource split, revising the horizontal formula does not require a constitutional amendment. It requires consensus among the federating units through the NFC process. Given the political and constitutional hurdles involved in altering the vertical formula, building agreement around a more balanced horizontal formula may be both the more achievable and the more critical reform, and must be urgently pursued. Copyright Business Recorder, 2026

Date: 2026-06-22

Details: Published June 22, 2026 Updated about 2 hours ago By Amjad Ali Shah PESHAWAR: The Khyber Pakhtunkhwa government has earmarked Rs 524.3 billion under Annual Development Programme for the Fiscal Year 2026-27, including Rs 235 billion for settled areas with an increase of 21 percent. For the settled tehsil, ADP budget was Rs 47 billion showing an increase of 21 percent and ADP of merged districts is Rs 34.8 billion with an increase of 13 percent. A significant portion of the budget had been directed towards infrastructure and development initiatives, according to the budget documents. The education sector had been allocated Rs 468 billion, while health has received Rs 334 billion, underlining continued investment in human capital. For district governments, Rs 52.8 billion had been proposed, while Rs 29 billion had been allocated for merged tribal districts. Additionally, Rs 52 billion had been set aside under the Accelerated Implementation Programme (AIP), targeting faster execution of development schemes in sensitive regions. Rs 524 billion had been proposed for the Annual Development Programme (ADP), while Rs 1.64 trillion had been earmarked for current expenditures. An allocation of Rs 35 billion had been proposed for the merged tribal districts, reflecting continued focus on their development integration. The government has proposed a 7 percent increase in salaries and pensions of government employees, along with an increase of Rs 5,000 in the minimum monthly wage, raising it to Rs 45,000. For law and order, Rs 191 billion had been proposed, while Rs 200 million had been allocated for the Good Governance Roadmap initiative. Sector-wise allocations include Rs 334 billion for health, Rs 468 billion for education, Rs 90 billion for local government, Rs 29 billion for home affairs, Rs 14 billion for transport, Rs 29 billion for agriculture, Rs 42 billion for energy, and Rs 28 billion for the Zakat Fund. Under social protection initiatives, Rs 15 billion had been proposed for the Ehsaas Mustahiq Programme, Rs 50 billion for the Health Card Programme, Rs 2 billion for the Ehsaas Kisan Programme, and another Rs 2 billion for interest-free loans to facilitate overseas employment seekers. Additionally, Rs 51 million had been allocated for self-reliance initiatives for minority communities. For health infrastructure, Rs 80 billion had been proposed for MTI hospitals across the province. In the development sector, Rs 36 billion had been allocated for the Peshawar Revival Programme, Rs 7.5 billion for the Peshawar Bus Rapid Transit (BRT) project, and Rs 4 billion for the Khushhal Hazara Programme. The provincial government has also proposed Rs 2.5 billion for electric bikes and rickshaw schemes to promote eco-friendly transport. The KP chief minister said that revenue performance had shown improvement, with Rs 102 billion collected in the first 10 months of FY2025â€“26, including Rs 69.7 billion in tax revenue and Rs 32.3 billion in non-tax revenue. Copyright Business Recorder, 2026

Date: 2026-06-22

Details: Published June 22, 2026 Updated about 2 hours ago By Anjum Ibrahim The Minister of Information and Broadcasting Ataullah Tarar referred to the federal budget 2026-27 as â€œsagaciousâ€ and invited the opposition to sign a charter of the economy â€“ a suggestion that was initially aired by former Finance Minister and current Foreign Minister, Ishaq Dar who drew inspiration for the title from the Charter of Democracy that was signed between Benazir Bhutto and Nawaz Sharif on 14 May 2006. About 93 percent of the total budget for this country consists of current expenditure â€“ the outlay an amalgam of the rising mark-up on 83.285 trillion rupees (298 billion dollars) domestic debt and another 137.5 billion dollars in external obligations, followed by allocation for influential sectors (inclusive of annual civilian and defence pay raises at the taxpayersâ€™ expense), flawed policies (particularly the over one trillion-rupee allocation for pensions next year though employee contributions became mandatory for those hired in 2024 onwards though the amount is not known â€“ a time period that will take decades before it begins to pay dividends), the applicable National Finance Commission (NFC) Award that provides 42.5 percent of total taxes collected by the Federal Board of Revenue (FBR) for the Centreâ€™s use, and for Benazir Income Support Programme (BISP) allocated under 5 percent of total current expenditure. Development expenditure by the Centre is where serious differences arise, requiring constant adjustment if the Centre is politically weak and not at all if it is strong â€“ a principle that also applies to the economically disastrous policy of allocating funds to members of parliament for projects specific to their constituency. It is, however, the source of revenue that is probably where the charter of the economy can best be applied. Each administration has its â€œfavouritesâ€ â€“ easily gleaned from the grant of tax exemptions extended to specific sectors. The PML-N, for example, favours its support base, the traders, the Khan administration favoured real estate activity, and the PPP has typically favoured its grass-root workers and used state-owned entities as recruitment centres. All these policies are under process of being phased out under the ongoing IMF programme though the process remains painstakingly slow. There is therefore a need to undertake empirical studies to assess whether the policies that prompted the Charter of Democracy are still applicable today and, more importantly, whether they were ever implemented. The latter query can be easily answered with a resounding â€˜noâ€™ though the two parties have since worked in partnership at the Centre. The common thrust of all the national parties, including the decision makers today, is to attract foreign direct investment (FDI), which has remained elusive to-date. The plea today should no longer be to agree to a charter of the economy dated twenty years ago but instead to understand the massive geopolitical changes in the international world order since and to adjust accordingly. Three exogenous changes in the international world order are having far-reaching global consequences, including in Pakistan. First, the emergence of a unipolar world subsequent to the collapse of the Soviet Union in 1991 that initially continued the military and financial dominance of Western democratic countries, all with robust economies, with the institutional framework to sanction all those countries with impunity that failed to follow their dictates. But by 2017 a multipolar world had emerged as Russia reaffirmed its superpower credentials as did China though Western countries continue to look towards the US for guidance that is increasingly coming at a high economic cost. Second, the expansion of North Atlantic Treaty Organisation (NATO) eastward, in spite of Russian warnings that it would be its red line; it is little wonder that when the US and its allies proceeded to announce Ukraineâ€™s imminent inclusion into the security bloc triggered the conflict with Russia that continues to this day. The subsequent sanctions on Russia led to deindustrialisation in European countries, particularly Germany, and by following the US foreign policy dictates the European Union began to procure fuel at more than double the cost of gas from Russia, making it uncompetitive in the international market, especially as it related to China. The Memorandum of Understanding between Iran and the US signed this week past indicates a change in warfare, asymmetric where the militarily more powerful country is unable to declare victory, as opposed to kinetic â€“ a change that can compel the more powerful country to concede on more than four-decade-long sanctions. What is increasingly evident is the truth behind Vladimir Putinâ€™s assertion in his interview with Le Figaro on 29 May 2017 published two days later: I have already spoken to three US Presidents. They come and go, but politics stay the same at all times. Do you know why? Because of the powerful bureaucracy. When a person is elected, they may have some ideas. Then people with briefcases arrive, well-dressed, wearing dark suits, just like mine, except for the red tie, since they wear black or dark blue ones. These people start explaining how things are done. And instantly, everything changes. This is what happens with every administration. Putinâ€™s reference was to the deep state, consisting of unelected officials, including wealthy private individuals, who can and do manipulate policy. The US support for Israel and anti-Russian stance epitomizes the deep stateâ€™s control of US policy, and therefore it was a very astute observation that explains why US foreign policy has not adapted to the changing geopolitical considerations. In Pakistan, the deep stateâ€™s existence has long been acknowledged though not openly until very recently with the reference to the hybrid system. This does not make Pakistan the exception but rather the norm. Third, globalisation, relative ease of movement of capital, led to the US oligarchs investing capital in countries that could produce at cheaper cost enabling them to realise higher profits, while controlling all multilateral donor agencies that led to the formalisation of global rules. The dollar hegemony, dating back to Bretton Woods, 1944, consisted of the dollar as the worldâ€™s primary reserve currency, medium of exchange, and unit of account. With the establishment of SWIFT (Society for Worldwide Interbank Financial Telecommunication) in 1973 transfers by any individual or country could be stopped with accounts frozen as happened to Iran in 1979 or to Russia since the start of the war while it provided the US with cheap credit. Today there is little debate on the emergence of a multipolar world, with the increasing use of yuan as an alternate currency, and the increasing use of real time transfers through the Chinese Cross-Border Interbank Payment System (CIPS) â€“ a system resilient to sanctions as well as cheaper â€“ instead of SWIFT. In spite of Pakistanâ€™s close and long-standing ties to China our reserves are still held almost entirely in dollars (though they are almost entirely debt based with over 10 billion-dollar rollovers held by Saudi Arabia and China), the bulk of trade is in dollars (except some barter trade), remittances emanate from the Middle East and the West and imports are largely from the West though imports from China are at a high of 18 billion dollars while our exports are no more than 3 billion dollars. So what can a charter of the economy consist of? All political partiesâ€™ have the same objective notably development, low inflation, and high employment though the way forward may vary based on which economic theory the administration may support. But what about a country like Pakistan that is shackled by domestic and international debt and where elite capture continues to prevail in terms of allocations and policy decisions? And with a resurfacing threat to default compelling administration after administration seeking an IMF programme with its associated conditions? The best option would be to seek a consensus on foreign policy objectives that are linked inextricably to economic objectives, curtail elite capture of the taxpayersâ€™ money, which continues in next yearâ€™s budget, and implement pro-poor growth policies across the board instead of limiting them to BISP. Copyright Business Recorder, 2026

Date: 2026-06-22

Details: Published June 22, 2026 Updated about 2 hours ago By NNI QUETTA: The Balochistan Assembly on Sunday approved the provincial budget for the 2026-27 fiscal year, clearing expenditure proposals worth total of Rs1.089 trillion. During the session, lawmakers approved 98 demands for grants presented by Provincial Minister Mir Shoaib Nosherwani. The budget was passed after the assembly endorsed both development and non-development spending allocations for the coming financial year. According to the approved budget, Rs291 billion has been allocated for development projects through 45 demands for grants. Meanwhile, 53 demands for grants amounting to Rs797.88 billion were approved for non-development expenditures. The proceedings moved swiftly, with the assembly approving the high-value budget within approximately one hour of debate and consideration. Notably, opposition members did not submit any cut motions seeking reductions in the proposed expenditures, allowing the demands for grants to pass without amendment. The approval marks a significant step in finalising the provinceâ€™s fiscal framework for the next financial year, with the government expected to focus on both development initiatives and the financing of routine administrative operations. The Balochistan government on Wednesday unveiled a Rs1.089 trillion surplus budget for fiscal year 2026-27, increasing salaries and pensions of government employees by seven percent, expanding allocations for health and education, and announcing a series of tax relief measures without imposing any new taxes. Provincial Finance Minister Mir Shoaib Nosherwani presented the budget in the Balochistan Assembly during a session presided over by Speaker Captain Abdul Khaliq Achakzai (retd). He said the budget reflected the governmentâ€™s commitment to fiscal discipline, development and public welfare despite economic challenges. The minister also claimed that 115 percent of the allocated development funds had been utilised during the outgoing fiscal year, describing it as the highest utilisation rate in the provinceâ€™s history. Nosherwani told the assembly that the total budget outlay for FY2026-27 had been fixed at Rs1,089.26 billion, while total revenues were estimated at Rs1,134.92 billion, creating a surplus of Rs45.66 billion. He said the province expected to receive Rs800.13 billion through federal transfers, while revenue from provincial resources had been projected at Rs170.09 billion. The government expects to receive Rs65.34 billion for foreign-funded projects, while project financing and capital receipts are estimated at Rs68.75 billion. Cash carry-forward balances amounting to Rs30.61 billion will also contribute to provincial revenues. The finance minister said the positive balance between income and expenditure reflected prudent financial management and fiscal discipline. The minister said Rs797.82 billion had been allocated for current expenditure during the next fiscal year. Foreign-funded projects will account for Rs40.38 billion in spending, while federal development projects will receive Rs44.56 billion. The Provincial Public Sector Development Programme (PSDP) has been set at Rs206.61 billion. According to budget documents, the overall development budget stands at Rs291.55 billion, including federal and foreign-funded projects, underscoring the governmentâ€™s focus on infrastructure and public service delivery. Providing relief to government employees, the provincial government announced a seven percent increase in salaries and pensions on the pattern of the federal government. Nosherwani said the increase had been approved despite fiscal pressures and reflected the governmentâ€™s commitment to supporting public servants amid rising living costs. The finance minister described the budget as a tax-free budget, emphasising that no new taxes were being imposed. Instead, the government introduced several incentives aimed at encouraging investment and economic activity. Capital value tax and stamp duty on property transfers have been reduced from two percent to one percent. Sales tax on educational services has been reduced to zero percent, while taxes on new electric vehicles have been waived. The government has also abolished sales tax on public transport and public property insurance. In addition, provincial taxes on foreign investment in export processing zones have been waived to attract industrial investment and stimulate economic growth. Education emerged as one of the largest recipients of public spending in the new budget. The government has allocated Rs127 billion for school education and Rs31 billion for higher and technical education. Budget documents show that total spending on the education sector will reach Rs157.28 billion during FY2026-27. To support students from disadvantaged backgrounds, the government has earmarked Rs2.82 billion for the Balochistan Education Support Fund and Rs54 million for the Shaheed Benazir Bhutto Scholarship Programme. The finance minister said these initiatives were aimed at improving access to education and reducing barriers faced by deserving students. The health sector also received a substantial increase in funding. Nosherwani announced an allocation of Rs96 billion for health services, including Rs6 billion for development schemes and Rs90 billion for non-development expenditure. The government has also added Rs1.5 billion to the Balochistan Health Card Programme to improve healthcare access for citizens. The minister said strengthening hospitals, expanding medical facilities and improving healthcare services remained among the governmentâ€™s priorities for the coming fiscal year. Maintaining law and order remains a major focus of the provincial government. The finance minister proposed Rs243 million for development projects in the law and order sector and Rs1.2 billion for operational expenditure. Budget documents show that the broader law and order sector will receive Rs107.92 billion during FY2026-27, highlighting the governmentâ€™s commitment to security and public safety. Agriculture and allied sectors received significant allocations in the new budget. The agriculture sector has been allocated Rs23.6 billion overall, including Rs4.4 billion for development projects and Rs19.2 billion for non-development expenditure. The livestock sector will receive Rs1 billion for development activities and Rs8 billion for operational expenditure. The Irrigation Department has been allocated Rs12.8 billion for development projects and Rs5.79 billion for non-development spending, while the drinking water sector will receive Rs7.6 billion for development projects and Rs12.4 billion for operational expenditure. The government said these allocations would support food security, agricultural productivity and access to water resources across the province. The government has earmarked substantial resources for infrastructure development. The Communications and Works Department will receive Rs27 billion for development projects and Rs20 billion for operational expenditure. The Transport Department has been allocated Rs1.5 billion for development schemes and Rs1.29 billion for non-development spending.

Date: 2026-06-22

Details: Published June 22, 2026 Updated about 24 hours ago By Hassan Abbas LAHORE: The federal government and the Punjab government have unveiled their budgets for fiscal year 2026-27, raising total outlays at both levels even as economists cautioned that higher spending has yet to translate into visible improvements in education, health, agriculture, and industry. The two budgets have been presented at a time when Pakistanâ€™s economy appears to have regained a degree of stability after several turbulent years, with inflation declining, foreign exchange reserves improving, and concerns regarding an immediate balance-of-payments crisis easing. At the federal level, the government has presented a budget of approximately Rs 18.77 trillion compared with Rs 17.57 trillion in FY2025-26, with revenue targets increased to Rs 15.26 trillion. Debt servicing continues to consume more than Rs 8 trillion annually, while defence expenditure has increased to approximately Rs 3 trillion. Commenting on the budget, prominent economist and Advisor on political and economic affairs to President Pakistan Peoples Party Central Punjab Rao Babar Jamil said the continuation of programmes such as the Benazir Income Support Programme, with allocations approaching Rs 845 billion, reflects the governmentâ€™s recognition that many households continue to face significant economic hardship. He observed that while inflation has slowed, prices have not actually fallen, meaning the relief felt by ordinary citizens remains limited. Punjab, meanwhile, has announced a budget of approximately Rs 5.9 trillion compared with roughly Rs5.3 trillion in FY2025-26. Notably, the provinceâ€™s Annual Development Programme has fallen from approximately Rs 1.24 trillion to around Rs752 billion, a decline that has raised questions regarding the governmentâ€™s development priorities going forward. In this context, the question Punjabâ€™s citizens are entitled to ask is a simple one: where is the performance? If education spending continues to increase every year, it remains unclear why millions of children are still out of school, why parents increasingly rely on private schools despite the existence of a vast public education system, and why employers continue to complain about the quality of graduates entering the labour market. Similarly, despite substantial healthcare allocations, government hospitals remain overcrowded, and many citizens continue to rely on costly private healthcare out of necessity rather than choice. Agriculture and industry are also areas that observers believe deserve far greater attention than they have received. Punjabâ€™s farmers continue to face rising input costs, uncertain crop prices, water shortages, and increasing climate-related risks, and the budget could have done more to support farmer productivity through water-efficient irrigation, wider adoption of agricultural technology, crop insurance, and stronger income protection mechanisms for growers. Punjab remains Pakistanâ€™s largest industrial province, yet businesses operating there continue to grapple with high energy costs, regulatory complexity, limited access to finance, infrastructure bottlenecks, and weakening international competitiveness. Artificial intelligence and digital transformation represent another area where the Punjab government has yet to demonstrate meaningful progress. Analysts argue that the province should be investing aggressively in AI research centres, technology parks, university-industry partnerships, digital skills training, startup incubation, and innovation-driven entrepreneurship if it hopes to remain competitive in the coming years. Greater emphasis is also needed on water security, groundwater recharge, wastewater treatment, and the modernisation of irrigation systems across the province. At the same time, local governments should be strengthened so that municipal services can be delivered more effectively to citizens at the grassroots level. Ultimately, the prevailing view among economic observers is that governments should be judged not by how much they spend but by how effectively they spend it. The debate, they argued, must move from budgets to performance, from announcements to delivery, and from spending to results. Copyright Business Recorder, 2026

Date: 2026-06-22

Details: Budget 2026-27 Taxation June 22, 2026 Faisal Shahnawaz Finance Bill 2026 accused of favouring top earners while lower-income salaried workers receive no meaningful relief ISLAMABAD: The federal government is facing growing criticism after proposing tax measures in the Finance Bill 2026 that are expected to cost the national exchequer more than Rs50 billion, largely benefiting highly paid corporate executives and top-income salaried individuals. While the government has presented the measures as tax relief for the salaried class, analysts and tax experts argue that the overwhelming share of the benefits will accrue to individuals earning millions of rupees annually, leaving lower and middle-income employees with little or no relief despite persistent inflation and rising living costs. Under the proposed amendments, the government has revised income tax slabs for salaried individuals and reduced the tax burden on higher-income groups. Although the maximum tax rate of 35 percent remains unchanged for annual taxable income exceeding Rs7 million, the structure of upper tax brackets has been altered to lower the effective tax liability for top earners. A key change involves splitting the existing tax slab applicable to salaried individuals earning above Rs4.1 million into multiple brackets, thereby reducing the progressive tax burden on those falling within higher income categories. The government has also proposed abolishing the 9 percent surcharge imposed under Section 4AB of the Income Tax Ordinance on salaried individuals earning more than Rs10 million annually, effective from tax year 2027. According to estimates, these two measures alone are expected to result in a revenue loss exceeding Rs50 billion, providing substantial tax savings to a relatively small segment of affluent taxpayers. Critics argue that the proposed relief package reflects a significant imbalance in fiscal policy at a time when ordinary wage earners continue to struggle with elevated inflation, increasing utility costs and declining purchasing power. The government has come under particular scrutiny for declining to raise the income tax exemption threshold despite repeated recommendations from business groups, tax practitioners and economic experts. Several proposals submitted to the Ministry of Finance had called for increasing the annual tax-free income threshold from Rs600,000 to Rs1.2 million in order to provide relief to lower-income employees affected by inflation. However, the Finance Bill 2026 retains the existing threshold, meaning individuals earning slightly above Rs600,000 annually will continue to remain within the tax net despite mounting financial pressures. Observers note that while the government has extended significant concessions to high-income salaried individuals, workers in lower income brackets have received no comparable support. The contrast has fuelled concerns that the tax policy disproportionately favours corporate executives and senior management personnel while offering limited assistance to the broader salaried population. Economists warn that such measures could further deepen perceptions of inequality, particularly as the government continues to pursue fiscal consolidation and revenue mobilisation efforts under broader economic reform programmes. With inflation still weighing heavily on household budgets, the proposed tax relief package is expected to remain a contentious issue as lawmakers continue their review of the Finance Bill 2026 before its final approval.

Date: 2026-06-21

Details: Budget 2026-27 Money & Banking June 21, 2026Hamza Shahnawaz Lower State Bank profits expected to cut federal non-tax revenue by nearly Rs1 trillion in the upcoming fiscal year ISLAMABAD: The federal government has projected a sharp decline in profits transferred by the State Bank of Pakistan during fiscal year 2026-27, highlighting the potential impact on non-tax revenue collections and overall fiscal resources. According to budget documents, the government expects SBP profits to fall to Rs1.44 trillion in FY2026-27, compared with Rs2.43 trillion estimated for the outgoing fiscal year 2025-26. The projected decrease represents a decline of more than 40 per cent and is expected to significantly reduce one of the governmentâ€™s largest sources of non-tax revenue. SBP remains major contributor to non-tax revenue Profits transferred by the State Bank of Pakistan have become an increasingly important component of federal revenues in recent years, helping the government finance expenditure and manage fiscal pressures. Budget documents show that receipts from civil administration and other functions are expected to total Rs1.48 trillion in FY2026-27, down from Rs2.47 trillion in the current fiscal year. The decline is primarily attributed to the anticipated reduction in SBP profits. Economists note that central bank profits are influenced by monetary policy conditions, interest rates, returns on government securities and exchange-rate-related factors. Lower revenue expected from civil administration receipts The governmentâ€™s revenue projections indicate that despite improvements in several administrative revenue streams, the sharp fall in SBP profits will outweigh those gains. According to the budget estimates: â€¢ General administration receipts are projected to increase to Rs5.89 billion from Rs5.18 billion. â€¢ Defence services receipts are expected to rise to Rs31.47 billion from Rs28 billion. â€¢ Law and order receipts are estimated at Rs4.09 billion compared with Rs3.35 billion in the current year. â€¢ Social services receipts are projected at Rs1.34 billion, slightly lower than Rs1.55 billion recorded previously. Despite these increases in certain categories, the overall revenue position is expected to weaken because of the substantial reduction in central bank profit transfers. Impact on fiscal position The projected fall in SBP profits comes at a time when the government faces rising expenditure commitments, including record debt-servicing obligations and increased spending requirements across various sectors. Fiscal experts say lower non-tax revenues could increase pressure on authorities to boost tax collection, improve compliance and expand the tax base to compensate for the anticipated shortfall. The government has assigned an ambitious revenue target to the Federal Board of Revenue for FY2026-27 as part of its broader fiscal consolidation strategy. Monetary policy may influence earnings Analysts believe the decline in SBP profits is partly linked to changes in the interest rate environment. Following a period of exceptionally high policy rates, the central bank has gradually eased monetary conditions, which may affect the profitability generated from its holdings of government securities and other financial assets. As a result, profit transfers to the federal government are expected to normalise after reaching unusually high levels in recent years. The budget projections underscore the governmentâ€™s continued reliance on both tax and non-tax revenues to manage fiscal challenges, while highlighting the importance of sustainable revenue mobilisation in maintaining long-term fiscal stability.

Date: 2026-06-21

Details: Energy Taxation June 21, 2026Hamza Shahnawaz Seven consignments of White Spirit tanker cargo to be auctioned as Customs moves to clear long-stored imported goods QUETTA: Pakistan Customs has announced the auction of multiple overstay consignments of Light Aliphatic Hydrocarbon Solvent, commonly known as White Spirit, stored at Custom House Taftan and the NLC Dry Port Quetta between June 17 to June 28. The consignments, which have remained uncleared beyond the permissible storage period, will be disposed of through a public auction process in accordance with customs regulations. Seven consignments to be auctioned According to auction details, a total of seven consignments of the chemical product, loaded in tanker vehicles, will be offered for bidding. The largest consignment includes 57,840 kilograms of hydrocarbon solvent transported in tanker TLD-661. This lot carries assessed duties and taxes of Rs5.76 million, with a reserved price set at Rs8.69 million. Another major consignment consists of 47,540 kilograms in tanker TLQ-230, with duties and taxes amounting to Rs4.73 million and a reserve price of Rs7.14 million. A third shipment of 46,430 kilograms in tanker TMM-650 has been assigned a reserved price of Rs6.97 million. Additional consignments listed Customs authorities have also included a 45,120-kilogram consignment in tanker TMA-375, carrying a reserve price of Rs6.78 million. Two further consignments weighing 34,950 kilograms and 34,890 kilograms, transported in tankers TLL-764 and TMP-837 respectively, have been assigned reserve prices exceeding Rs5.2 million each. The final consignment, weighing 32,470 kilograms in tanker LSC-779, has been placed for auction with a reserve price of Rs4.88 million. Revenue recovery and storage clearance Officials said the auction is part of ongoing efforts to recover government revenue and clear valuable storage space occupied by uncleared imported goods. Under customs procedures, goods that remain unclaimed beyond the allowed period are liable for disposal through auction to prevent congestion at ports and dry ports. The process also ensures partial recovery of duties, taxes and other charges associated with imported consignments. Expected interest from industrial buyers Authorities expect strong interest from chemical traders, industrial users and solvent distributors who may utilise bulk quantities of hydrocarbon solvent for commercial applications. Light Aliphatic Hydrocarbon Solvent, commonly used in industrial cleaning, paint thinning and manufacturing processes, is regularly traded in bulk volumes within the chemical supply chain. Customs officials have urged interested bidders to comply with auction rules and complete all required documentation before participating in the bidding process. The auction is expected to proceed under standard customs procedures aimed at ensuring transparency, revenue recovery and efficient clearance of overstay goods.

Date: 2026-06-20

Details: Published By Naveed Butt ISLAMABAD: Minister of State for Finance and Revenue Bilal Azhar Kayani announced on Friday that approximately 3.5 million shopkeepers will be brought into the tax net during the fiscal year 2026-27 as part of the governmentâ€™s efforts to broaden the tax base and enhance revenue collection. The Minister expressed these views in the National Assembly debate on the federal budget 2026-27. He said the governmentâ€™s economic policies are focused on strengthening the economy and promoting inclusive growth. He said a new scheme had been introduced to bring small traders into the formal tax system. He said that shopkeepers with annual sales of up to Rs20 million will pay a one percent tax through a simplified registration process, adding the government aims at bringing 3.5 million shopkeepers into the tax net. Highlighting relief for salaried individuals, he said income tax rates had been reduced across several income slabs, adding the tax rate for annual incomes between Rs2.2 million and Rs2.3 million was reduced from 23 percent to 20 percent, while rates for higher income groups were also lowered. He said that for those earning Rs3.2 to Rs4.1 million, the rate was reduced from 30 percent to 25 percent, while for income between Rs4.1 to Rs5.6 million it was reduced from 35 percent to 29 percent. For those earning Rs5.6 million to Rs7 million, the rate was cut from 35 percent to 32 percent. He also said the super tax had been abolished. He congratulated Prime Minister Shehbaz Sharif, Field Marshal Syed Asim Munir, and the economic team for improving Pakistanâ€™s economic position and international standing. Describing the budget as people-friendly, Kayani said it provides relief to various sectors of society. He recalled that when the government assumed office in February 2024, the economy was facing serious challenges and uncertainty. However, under the PMâ€™s leadership, economic stability was restored, inflation was brought down, foreign exchange reserves increased, and the IMF programme was completed, he said. He said the government achieved all fiscal targets during FY2025 without introducing any supplementary or mini-budget. Kayani said exporters had been granted tax relief to enhance competitiveness, while tax incentives for the IT sector had been extended for another three years. Measures were also introduced to support the construction sector, including subsidised housing loans under the Apna Ghar Scheme, he said. He said Rs300 billion had been allocated for agriculture, along with Rs110 billion under the PMâ€™s Agriculture Youth Initiative, adding customs duty on agricultural machinery has also been abolished to support farmers. Copyright Business Recorder, 2026

Date: 2026-06-20

Details: Published June 20, 2026 Updated about an hour ago By Naveed ButtZulfiqar Ahmad ISLAMABAD: The National Assembly erupted into a heated budget debate on Friday as lawmakers tore into the federal budget 2026-27, demanding tougher relief for salaried class and struggling low-income families battered by soaring inflation. While criticism dominated much of the budget debate, the government stood its ground, describing the financial plan as tightly constrained yet broadly balanced within the countryâ€™s difficult macroeconomic environment. Taking part in the ongoing budget debate, senior Pakistan Peopleâ€™s Party (PPP) leader and former prime minister Raja Pervaiz Ashraf set the tone for the dayâ€™s deliberations by declaring the proposed 7 per cent salary increase for government employees â€œwholly insufficient.â€ He argued that, given the current cost-of-living pressures, salaries should have been raised by at least 10 per cent to meaningfully offset inflationary shocks hitting public sector households. Ashraf drew a comparison with the PPPâ€™s previous tenure, recalling that salaries had once been raised by as much as 50 per cent despite economic strain. He implied that bold fiscal decisions were still possible if there was political will. Beyond the numbers, he stressed that economic recovery could not be achieved in isolation from political stability, continuity of policy, and national consensus. Without these, he warned, even well-designed budgets risked falling short of their goals. Urging restraint in political rhetoric, he cautioned that polarising narratives were undermining economic confidence. Turning to recent developments in Azad Jammu and Kashmir (AJK), he described the situation as â€œdeeply distressing,â€ though he noted that negotiations had produced substantial progress following directives from the prime minister. According to him, nearly 80 per cent of the demands raised had been addressed, including subsidised electricity at Rs3 per unit and relief on flour prices. However, he acknowledged that sensitive issues â€“ particularly those relating to refugee representation â€“ remained unresolved. He called for continued dialogue through a newly constituted negotiation committee while emphasising that â€œstate red linesâ€ could not be crossed. Adding a different dimension to the debate, PPP MNA Nafisa Shah highlighted the countryâ€™s recent diplomatic outreach, suggesting that renewed international engagement had helped improve the countryâ€™s global standing. She linked expanding ties with Gulf nations to the long-term vision of former prime minister Zulfikar Ali Bhutto, arguing that such relationships could serve as a stabilising force for the economy. At the same time, she urged the government to reduce dependence on International Monetary Fund (IMF) programmes, calling instead for a strategic pivot towards domestic productivity. Under the â€œUraan Pakistanâ€ framework, she emphasised agriculture and industry as the twin engines of growth. Describing agriculture as the backbone of the economy, she called for urgent relief for farmers and the removal of structural bottlenecks hindering exports, warning that such constraints were continuing to strain foreign exchange reserves. From the opposition benches, Pakistan Tehreek-e-Insaf (PTI) MNA Muhammad Nawaz offered a sharply critical assessment, arguing that the budget provided little tangible relief to ordinary citizens already burdened by inflation. While advocating for national unity, he pointed to what he described as stagnation in development initiatives in Battagram, citing delays in a grid station project and key road infrastructure schemes. He urged greater investment in tourism and forest conservation as potential avenues for job creation and local economic development. Separately, Ejazul Haq of PML-Z questioned the governmentâ€™s growth assumptions, stating that the projected 4 per cent GDP growth rate was insufficient to address rising unemployment and entrenched poverty. He argued that the country required sustained growth in the range of 6 to 7 per cent to produce meaningful improvements in living standards. Responding on behalf of the government, Minister for Parliamentary Affairs Dr Tariq Fazal Chaudhry defended the budget, stating that it had been prepared after extensive consultations with stakeholders and reflected prevailing fiscal constraints. He described it as the â€œbest possibleâ€ financial plan under current economic realities, while assuring lawmakers that viable proposals from both treasury and opposition benches would be considered. He also revealed that the prime minister would soon meet opposition leaders to further address their concerns. Other legislators who took part in the budget debate included Arshad Abdullah, Nosheen Iftikhar, Nafisa Shah, Naseer Ahmed Abbas, Khurram Manj, Sanjay Perwani, Dr Darshan, Zubair Khan, Hafeez-ur-Rehman Drishak, Muhammad Shahbaz Babar, Fazal Muhammad Khan, Shamsher Ali Mazari, Rana Iradat Sharif, Muhammad Saad Ullah, Malik Asad Sikandar, Zulfiqar Ali Bhatti, Babar Nawaz, Rabia Naseem Farooqi, Muhammad Khan Daha, and Ahmad Raza Maneka. Meanwhile, official data presented before the House showed that 206 members participated in the six-day budget debate, which stretched across nearly 48 hours of discussion. Treasury lawmakers spoke for 29 hours and 23 minutes, while the opposition contributed 18 hours and 16 minutes, underscoring the intensity and breadth of the proceedings that marked the budget session. Copyright Business Recorder, 2026

Date: 2026-06-20

Details: Published June 20, 2026 Updated about 2 hours ago By Recorder Report PESHAWAR: The government of Khyber Pakhtunkhwa has presented an annual budget of Rs2.17 trillion for financial year 2026-27 with an estimated deficit of Rs48 billion, comprising current expenditure of Rs1.65 trillion and development expenditure of Rs524.3 billion. Chief Minister Khyber Pakhtunkhwa Muhammad Sohail Afridi who also holds the portfolio of the finance presented the budget 2026-27 in the provincial assembly here on Friday. Speaker KP Assembly, Babar Saleem Swati was presiding the proceeding of the house. Out of total current budget, Rs1.47 trillion allocated to settled districts whereas Rs179.9 billion to Merged Districts. The salaries will cost an amount of Rs53.8 billion and another amount of Rs684.9 billion allocated for non-salary expenses and while the payment of pension to retired government employees cost Rs207.1 billion. To strengthen fiscal sustainability and reduce reliance on external resources, Provincial Own Source Revenue (OSR) has been budgeted at Rs182.4 billion for FY 2026-27, up from Rs129 billion for FY 2025-26. The receipt includes the collection of Rs80 billion through Khyber Pakhtunkhwa Revenue Authority (KPRA), other tax receipts of Rs35.9 billion and Non-tax receipts of Rs66.5 billion. Federal tax assignments are estimated at Rs1.24 trillion, war on terror receipts Rs149.1 billion, straight transfers Rs53.6 billion, windfall levy Rs24.9 billion and receipts from Net Hydel Profits at Rs116.8 billion. Under the foreign project assistance (FPA), the province will receive an estimated amount of Rs150 billion. Health, education, and security continue to receive the largest share of the budget, accounting for nearly 50 percent of total spending, reflecting the Governmentâ€™s priority on human development, service delivery, and peace and security. Key flagship allocations include Sehat Card Programme, Medical Teaching Institutions, and Social Safety Net programmes, alongside funding for food security, medicines, public sector universities, public transport, police modernisation, support for Temporarily Displaced Persons, and the Good Governance Roadmap. To strengthen public finances and build resilience against future shocks, the KP Government introducing reforms including the establishment of a Khyber Pakhtunkhwa Takaful Insurance Company, a Disaster Risk Management Fund, a strengthened Debt Management Fund, and improved cash, investment, and fiscal risk management. The Merged Districts remain a major priority, with a total allocation of Rs272.8 billion, comprising Rs179.9 billion for current expenditure and Rs92.9 billion for development, to support service delivery, infrastructure, social programmes, and economic opportunities. Copyright Business Recorder, 2026

Date: 2026-06-20

Details: Published June 20, 2026 Updated about 2 hours ago By Naveed Butt ISLAMABAD: Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb is set to present expenditures amounting to Rs40.742 trillion, charged to the Federal Consolidated Fund, in the National Assembly today (Saturday), after his winding-up speech on the Budget 2026â€“27. According to the order of the day, the minister will also present the recommendations made by Senate during his winding-up speech on federal budget 2026â€“27. The minister will also present the Rs40.742 trillion expenditures charged upon the Federal Consolidated Fund, included in the demands for grants and appropriations for the financial year ending June 30, 2027, before the House for discussion. The breakdown includes Rs6.983 trillion for servicing of domestic debt â€“ Rs25.992 trillion for repayment of domestic debt, Rs1.071 trillion for servicing of foreign debt, Rs5.836 trillion for repayment of foreign loans, and Rs5 million for Pakistan Post Office Department. Other allocations include Rs6.936 billion for superannuation allowances and pensions â€“ Rs57 billion for grants, subsidies and miscellaneous expenditure, Rs500 million for foreign missions, Rs539.407 million for the Law and Justice Division, Rs7.969 billion for the National Assembly, and Rs6.453 billion for the Senate. The breakdown also includes Rs607.309 billion for external development loans and advances by the federal government, Rs963.799 million for staff household and allowances of the President (public), Rs1.837 billion for staff household and allowances of the President (personal), and Rs130.292 billion for repayment of short-term foreign credits. Additional allocations include Rs9.820 billion for audit, Rs7.441 billion for the Supreme Court, Rs6.048 billion for the Federal Constitutional Court of Pakistan, Rs2.367 billion for the Islamabad High Court, and Rs10.578 billion for election-related expenditure. Further allocations include Rs258.541 million for the Federal Ombudsman Secretariat for Protection against Harassment of Women at the Workplace, Rs2.124 billion for the Wafaqi Mohtasib, and Rs645.572 million for the Federal Tax Ombudsman. Copyright Business Recorder, 2026

Date: 2026-06-20

Details: Published June 20, 2026 Updated about 2 hours ago By Press Release KARACHI: The Karachi Council on Foreign Relations (KCFR) hosted a seminar at a local hotel, bringing together leading economists, policymakers, and experts for an in-depth discussion of the Federal Budget 2026â€“2027. The seminar featured distinguished speakers including Ikram Sehgal Defense Analyst, and Chairperson KCFR Nadira Panjwani, Dr Kaiser Bengali, Dr Khaqan Hassan Najeeb, along with other prominent economists and policy experts. The session focused on assessing the governmentâ€™s fiscal priorities, economic challenges, and the broader socio-economic impact of the upcoming budget. Speakers highlighted key concerns, including persistent inflation, challenges in tax collection, and the need for structural tax reforms to strengthen fiscal sustainability. Discussions also examined the governmentâ€™s efforts to provide relief to citizens while managing economic stabilization. A key focus of the seminar was budgetary allocations for education, health, and infrastructure, particularly amid rising debt-servicing obligations and IMF-related fiscal constraints. Participants also evaluated the budgetâ€™s impact on middle- and low-income groups, particularly inflation and cost-of-living pressures. The dialogue further explored revenue-generation measures and whether they promote economic documentation and growth or create challenges for businesses. Opportunities and constraints for entrepreneurs, SMEs, and technological adoption were also discussed. The seminar concluded that while the budget presents certain avenues for reform and growth, significant challenges remain in ensuring inclusive development and meaningful relief for vulnerable segments of society. The KCFR reiterated its commitment to fostering informed dialogue on national and international policy issues through such engagements. Copyright Business Recorder, 2026

Date: 2026-06-20

Details: Published June 20, 2026 Updated about 2 hours ago By Amjad Ali Shah PESHAWAR: Khyber Pakhtunkhwa government has set a massive revenue collection target Rs182.41 billion for the next fiscal year 2026-27, with 41.4 percent increase as compared to outgoing the financial year. In the outgoing fiscal year, the revenue collection target was estimated at Rs129,000 million, including Rs83,500 million on tax and Rs45,500 million non-tax revenues, according to a finance bill approved by the provincial cabinet during its meeting, chaired by Chief Minister Muhammad Sohail Afridi here on Friday. The meeting approved all proposals presented before the provincial cabinet. The Finance Bill accompanying the budget proposes several new taxes and compliance measures. Under the proposed legislation, taxes will be imposed on leased properties of Auqaf lands, while a new tax has been introduced on five-marla residential houses. Amendments to the Motor Vehicles Act, 1958, introduce revised taxation rates for commercially operated vehicles. Rickshaws will be taxed at Rs1,000 annually, four-seater vehicles at Rs1,500, and six-seater vehicles at Rs2,000. For larger public transport vehicles, the bill proposes an annual tax of Rs400 per seat for 15-seater vehicles and Rs500 per seat for vehicles with more than 15 seats. In the hospitality sector, hotels will be required to pay a 5 percent tax based on annual room capacity and actual occupancy. Hotels without a point-of-sale (POS) system will be assessed on the basis of 50 percent occupancy of residential units and 10 percent of actual room rent. The Finance Bill also introduces stricter enforcement measures for tax compliance. Individuals who fail to file tax returns by the prescribed deadline will face penalties and additional surcharges. A minimum fine of Rs400,000 has been proposed for those who fail to register before providing taxable services. Those who fail to register within 90 days of providing taxable services could face up to one year in prison, a fine equal to the tax payable, or both. Additional penalties include a Rs25,000 fine for unauthorised changes to registration details and a daily penalty of Rs300 for late filing of tax returns. The bill further proposes a Rs500,000 fine, or a penalty equal to 5 percent of the tax amount, for failing to install a restaurant invoice management system. Copyright Business Recorder, 2026

Date: 2026-06-20

Details: Published June 20, 2026 Updated about 2 hours ago EDITORIAL: The latest Pakistan Economic Survey 2025-26 presents a disturbing picture of the countryâ€™s public health landscape. While the government points to modest improvements in some indicators, a comparison with South Asian averages shows that Pakistan continues to lag behind its regional peers on several critical measures. More worrying is that these gaps persist despite repeated warnings from health experts and development practitioners about the consequences of chronic under-investment in the health sector. The surveyâ€™s statistics are sobering. Pakistanâ€™s life expectancy at birth stands at 67.8 years, nearly five years below the South Asian average of 72.6 years. Maternal mortality remains alarmingly high at 155 deaths per 100,000 births, compared to 120 in the region, while the infant mortality rate is more than double the regional average, pointing to serious deficiencies in maternal and child healthcare services. Equally troubling are the levels of undernutrition and stunting, which continue to affect millions of children and undermine their physical and cognitive development. These challenges are compounded by the countryâ€™s comparatively high birth rate. Rapid population growth places immense pressure on already overstretched health, education and social welfare systems. Without effective family planning services and greater investment in reproductive health, Pakistan risks falling even further behind its neighbours in human development outcomes. The governmentâ€™s economic managers frequently cite fiscal constraints to justify limited social-sector spending. Yet the real issue is one of priorities. Countries that have made significant gains in health outcomes have done so by treating healthcare as an investment rather than expenditure. As a matter of fact, better health produces a more productive workforce, reduces poverty and lowers long-term pressures on public finances. Pakistanâ€™s health indicators are not merely statistics; they reflect the lived realities of millions of citizens. Unless health â€” alongside education â€” is placed at the centre of national development planning and supported by substantially greater public investment, the country will continue to pay a heavy economic and social price for this neglect. Copyright Business Recorder, 2026

Date: 2026-06-20

Details: Budget Budget 2026-27 National June 19, 2026Hamza Shahnawaz KP government announces salary hike, major welfare spending and Rs524 billion development programme in FY2026â€“27 budget Khyber Pakhtunkhwa Chief Minister Sohail Afridi on Friday presented a Rs2.170 trillion provincial budget for fiscal year 2026â€“27, outlining major allocations for development projects, social welfare, healthcare, education and law and order, alongside a projected deficit of Rs48 billion. The KP Budget 2026â€“27 places strong emphasis on public service delivery and infrastructure expansion, with Rs524 billion allocated for the Annual Development Programme (ADP) and Rs1.645 trillion earmarked for current expenditures. An additional Rs35 billion has been set aside for merged tribal districts. The government also announced a 7 per cent increase in salaries and pensions for public sector employees, alongside an increase in the minimum monthly wage by Rs5,000, taking it to Rs45,000. Development and fiscal priorities The KP Budget 2026â€“27 reflects a continued focus on development-led growth, with authorities highlighting investments in infrastructure, governance reforms and service delivery improvements across the province. Officials said the fiscal plan aims to balance development needs with fiscal discipline, while ensuring targeted relief for government employees and low-income workers. Law and order and governance spending Under the KP Budget 2026â€“27, Rs191 billion has been allocated for law and order, along with Rs200 million for the Good Governance Road Map initiative aimed at improving administrative efficiency. The budget also prioritises institutional strengthening and public safety measures to enhance overall governance outcomes. Social welfare and healthcare expansion A key feature of the KP Budget 2026â€“27 is its strong social protection component, including Rs15 billion for the Ehsaas Mustahiq Programme and Rs50 billion for the Health Card Programme. Health services have been further strengthened with Rs80 billion allocated for MTI hospitals, while Rs36 billion has been earmarked for the Peshawar Rehabilitation Programme. Education and human development focus Education remains a top priority in the KP Budget 2026â€“27, with Rs468 billion allocated to the sector, alongside Rs334 billion for health spending, underscoring the governmentâ€™s emphasis on human capital development. Additional initiatives include funding for transport, agriculture, energy and local government services to support broader economic activity. Welfare-driven initiatives The KP Budget 2026â€“27 also includes allocations for minority empowerment, interest-free loans for overseas employment and a Rs2.5 billion electric bikes and rickshaws scheme aimed at promoting affordable and environmentally friendly transport. Officials said the budget reflects a mix of fiscal prudence and social uplift, focusing on development, welfare and long-term economic stability across the province.

Date: 2026-06-20

Details: Published June 20, 2026 Updated about 2 hours ago By Reuters CALGARY, (Alberta): Brent crude ticked higher on Friday, but stayed set for a weekly fall of around 8 percent, after Israel and Hezbollah agreed on a ceasefire in Lebanon but Iran set conditions for using the vital Strait of Hormuz. Brent crude futures were up 66 cents, or 0.53 percent, at USD 80.38 a barrel by 1:30 p.m. ET, while US West Texas Intermediate crude CLc1 was up 94 cents, or 1.23 percent, at USD 77.54 per barrel. Trading volumes were light due to a US federal holiday. Gulf producers were preparing to raise exports after Israel and Hezbollah agreed to a ceasefire which began at 4 p.m. local time (1300 GMT) on Friday. At least four tankers carrying crude, oil products and liquefied petroleum gas entered the Strait of Hormuz on Friday, heading for Iraqi Gulf ports, MarineTraffic data showed. Despite the uptick in activity, however, Iran signalled tighter control over shipping, with state TV reporting that vessels must coordinate transit with the Revolutionary Guards navy. In an undated advisory circulated to the maritime industry in the last 24 hours and seen by REUTERS, Iranâ€™s Persian Gulf Strait Authority said â€œno vessel is permitted to pass through the Strait of Hormuz without a valid passage permit issued by the PGSAâ€. Concerns around Iranâ€™s conditions for using the strait helped push oil prices higher on Friday, said Rory Johnston, founder of the Commodity Context newsletter. â€œThe market was pricing in a deal and pretty seamless execution, and that doesnâ€™t seem to be what weâ€™re getting thus far,â€ Johnston said. In spite of Fridayâ€™s gains, Brent was down about 8 percent week-over-week, reflecting a significant easing of supply concerns in the wake of the US-Iran deal to end the war. â€œThough (oil prices) havenâ€™t got to the point to where they were before the war started, it looks like weâ€™re headed in that direction,â€ said Phil Flynn, senior analyst with Price Futures Group, adding more supply is expected to flow in coming days. â€œThe backlog of ships can move quicker than some people think and if thereâ€™s cooperation between Iran and the US, it can move quite quickly,â€ Flynn added. A planned meeting between Iranian and US officials in Switzerland on Friday has been postponed, with arrangements underway for talks in the coming days, Iranâ€™s Foreign Ministry said on Friday.

Date: 2026-06-19

Details: Published June 19, 2026 Updated 27 minutes ago By Recorder Report PESHAWAR: Pakistan Business Forum (PBF) has said that government has failed to provide meaningful relief to the industrial and agricultural sectors of the economy in the annual budget for fiscal year 2026-27. Addressing a press conference here at Peshawar Press Club (PPC) on Thursday, the Chief Organiser PBF, Ahmed Jawad, KP Chairman Ashfaq Paracha, Peshawar Region President Arif Yousaf, and other office-bearers. Expressing concerns over the federal budget and the economic challenges facing businesses, industry, and agriculture. He emphasized that Pakistan requires an annual economic growth rate of at least 6 percent to address its mounting economic challenges, yet the budget lacks effective measures to achieve this target. They commended Prime Minister Shehbaz Sharif and Field Marshal Syed Asim Munir for their statesmanship and diplomatic efforts in promoting peace, stability, and regional harmony. The PBF leadership appreciated Pakistanâ€™s constructive and balanced diplomatic role during the recent tensions involving the United States and Iran, stating that Pakistan demonstrated responsible and effective diplomacy aimed at de-escalation and dialogue. The PBF leadership highlighted that Pakistanâ€™s economy requires the creation of at least three million new jobs annually, but the current fiscal framework offers no clear roadmap to stimulate employment generation. Referring to the Economic Survey, Jawad noted that more than 72 million Pakistanis are living on less than Rs8,000 per month and questioned what tangible relief the budget offers to ordinary citizens beyond additional taxation. PBF representatives expressed concern that tax revenues continue to increase every year while the countryâ€™s average economic growth remains around 3 percent. They argued that sustainable economic expansion cannot be achieved without reducing the cost of doing business and promoting industrial productivity. The Forum criticised the high cost of energy, questioning how exports could be increased under the prevailing electricity and gas tariffs. It also pointed out that businesses in Khyber Pakhtunkhwa face operating costs approximately 34 percent higher than competitors in other regions, undermining their competitiveness. On fiscal matters, PBF noted that approximately Rs8 trillionâ€”equivalent to 43 percent of the total federal budget will be spent on debt servicing in the coming fiscal year, while insufficient attention has been paid to reducing this burden. However, the Forum welcomed the governmentâ€™s decision to amend the Super Tax, noting that it was originally introduced as a temporary one-year measure. The business body called for the abolition of the Petroleum Levy and its replacement with an 18 percent General Sales Tax (GST) on petroleum products to provide relief to consumers. It further demanded the removal of GST on dairy products and stressed the need for a national programme to increase local edible oil production, noting that edible oil remains one of Pakistanâ€™s largest import categories after petroleum products. Regarding agriculture, PBF maintained that agricultural input costs could have been reduced through lower duties and taxes on fertilizers. The Forum warned that the lack of incentives for the agriculture sector could negatively impact GDP growth targets and food security. Addressing tax policy, Ahmed Jawad urged the government to withdraw recent amendments relating to delayed filing of tax returns under the Active Taxpayers List (ATL). He argued that such measures discourage potential taxpayers and weaken confidence in the tax system. Khyber Pakhtunkhwa Chairman Ashfaq Paracha said that the provinceâ€™s business community has become a casualty of the prevailing political environment. He called for a change in the Provincial Advisor on Finance, emphasizing the need for a local representative who possesses a thorough understanding of the provinceâ€™s economic realities, business landscape, and development priorities. Paracha also criticized the provincial authorities for their lack of engagement with key stakeholders, stating that the business community is not being adequately consulted on important economic and fiscal matters. He stressed that meaningful dialogue with the private sector is essential for formulating policies that can promote investment, industrial growth, and economic stability in the province. Ashfaq Paracha called for greater clarity regarding the provincial governmentâ€™s industrial policy and questioned its strategy for promoting industry and commerce in the province. He urged the provincial government to present its budget without delay, stating that a province cannot be managed on a temporary basis. The PBF leadership also expressed concern over funds belonging to Pakistani businesses that remain stuck in Afghanistan and called upon the Government of Pakistan to take up the issue with the Afghan authorities. Peshawar Region President, Arif Yousaf stressed that providing economic direction to the province is the responsibility of the provincial government. He lamented the deteriorating condition of Peshawar, stating that even the provincial capital lacks adequate attention and development. PBF called for a comprehensive pro-growth economic strategy, meaningful engagement with stakeholders, lower energy costs, support for agriculture and industry, tax reforms, and measures aimed at restoring business confidence and accelerating economic growth. Copyright Business Recorder, 2026

Date: 2026-06-19

Details: Published June 19, 2026 Updated about an hour ago By Dr Omer Javed In line with the overall economic policy, the important thing for a budget is to employ its tools â€“ revenue and expenditure â€“ to meet both over-arching goal of enhancing sustainability of macroeconomic stability, economic growth, resilience in terms of greening the economy, and welfare. For this, it is important to prioritize both outcomes, and plan revenues and expenditures in a way that enhances productive and allocative efficiencies, and puts the burden of taxation in an equitable way. Important outcomes as per the author for Federal Budget 2026-27, for instance, include, as pointed out in my June 12 article â€˜Policy philosophy correction budgetâ€“Iâ€™ published by BUSINESS RECORDER (BR) â€˜â€¦water resource management, and security, energy sustainability, poverty, unemployment, and high interest paymentsâ€¦ fiscal federalism needs to be fixed to better match responsibilities with regard to subjects shifted under the 18th Constitutional Amendment to the federating units, with the expenditure responsibilities they should incur from the transferred resources under the National Finance Commission (NFC) award for those devolved responsibilities. That would better rationalize expenditure side, and revenue raising needs of the centre, and federating units.â€™ Here, the overall efficiency and equitability aspects of the budget are reflected through the â€˜wayâ€™ expenditure is allocated, and before that â€˜howâ€™ revenues are collected through providing positive and negative incentives in this regard to set the direction of the overall economy. In the Federal Budget 2026-27, the first thing to realize about the budget is that it is not presented as an outcomes-based budget in terms of main goals being targeted â€“ in particular climate change related resilience enhancing expenditure, including subsidies, and taxation â€“ how the budget overall in terms of expenditure allocations, and domestic resource mobilization, or revenues reflects expectations. As a related point, the chapter on climate change is among the last few chapters of the Economic Survey for fiscal year 2025-26, which is strange to say the least, given Pakistan is among the top-ten most climate change challenged countries and is currently under an International Monetary Fundâ€™s (IMF) â€˜Resilience and Stability Facilityâ€™ (RSF) programme with IMF that mainly focuses on enhancing climate change related resilience. Moreover, a generic statement in the Annual Budget Statement (ABS) by finance secretary that â€˜In framing the budget, priority has been accorded to key sectors including health, education, social protection, climate resilience, gender equity and human capital development. â€¦to support economic recovery and inclusive growth through sustained support for productive sectors, including agriculture, industry, and small and medium enterprises, alongside measures to enhance competitiveness, employment generation, and private sector participationâ€™ needs to be quantified in terms of indicating upfront expenditure, and revenue proposals with regard to each of these priority areas, including indicating proposed expectations by federal government for the provinces in these areas, as an overall effort by the Centre to provide guidance to the provinces with regard to bringing greater harmony in budget proposals of the federal government, and federating units. Also, the statement does not sequence priorities in terms of allocations, highlighting the order of importance of emphasis; for instance, perhaps makes sense to prioritize higher the existential threat of climate change crisis. Before that the finance minister in his speech did not centre-stage the budget speech around highly important objectives facing the economy, where climate change â€“ given the country has seen two catastrophic flooding during the last four years, or so â€“ and water resource management should have been one of the most emphasized aspects of the budget, along with exorbitant level of interest payments, high level of poverty, and unemployment, for example. Moreover, the prioritization should have followed a deep focus in terms of specific expenditure, and revenue proposals, including foreign assistance-related inflows, including climate finance, the government expected to receive. Here, borrowing with regard to financing expenditure-revenue gap requires overall economic policy orientation â€“ including that of the International Monetary Fund (IMF) programmes â€“ away from over-board use of monetary austerity policy â€“ squeezing aggregate demand through employing policy rate in an over-board way, rather than employing a more balanced aggregate demand- and supply-side policy emphasis, for instance â€“ as an important determinant to effectively rationalize interest payments-related expenditure and, in turn, overall fiscal space, while overall adding to the sustainability aspect. Moreover, with regard to boosting the equitability aspect of revenues, and for enhancing productive- and allocative efficiencies, requires shifting from consumption-based (indirect) taxes â€“ which are regressive in nature and also distort prices, adding to cost-push inflation â€“ to income-based (direct) taxes. On the contrary, neither the budget speech nor the â€˜statement of purposeâ€™ in the â€˜annual budget statementâ€™ (ABS) emphasizes the need to make this needed shift in a mission-oriented way, especially when poverty has seen drastic increase over the last few years, and there is urgent need to move away from regressive, indirect taxes. Moreover, the revenue shortfall from this shift, requires, in turn, announcing revenue measures that enhanced tax base, and introducing creative tax policy measures. In addition, this shift will, in turn, set a much-needed tone for provinces to reflect similar emphasis, in terms of moving away from indirect taxes, and enhancing direct tax base, in their respective budgets. Unfortunately, rather than not only any significant intent shown with regard to making this shift, the current direction has, in fact, been perpetuated whereby as per budgetary estimates for FY2026-27, indirect taxes are more than direct taxes. Hence, while rather direct taxes related budget estimates for 2026-27 were slightly increased to Rs7.6 trillion, from budget estimates for FY2025-26 of Rs.6.9 trillion, and revised estimates of Rs6.4 trillion. On the other hand, budgeted indirect taxes for the upcoming fiscal year (FY) saw an increase from revised estimates of the ongoing fiscal year by Rs1.1 trillion, to stand at Rs.7.7 trillion; here, budgeted estimates for the ongoing fiscal year stood Rs7.2 trillion. In addition, the budget process needs to have a better learning curve â€“ and overall economic policy, and IMF programmes for that matter â€“ whereby over the medium-term pro-cyclical budgets â€“ enhancing tax- and policy rates to rein-in aggregate demand â€“ have not lent sustainability to even, at best, short-term achieved macroeconomic stability, while unduly giving so deep and prolonged sacrifice of economic growth, and reaching a very low level of foreign direct investment (FDI), which, in turn, has led to hardship in terms of rising levels of unemployment, inequality, and poverty. It is, indeed, overdue then to shift away to move towards taking a counter-cyclical orientation of budget by providing a much more balanced aggregate demand, and supply-side focus of the budget. This means that the budget should look to have a relatively greater emphasis in terms of development spending, in particular focusing on important areas in terms of marking prioritized spending, and putting the burden of development spending, including that of the prioritized areas, on the Centre, and the federating units in line with the responsibilities as envisaged under the 18th Constitutional Amendment and the National Finance Commission (NFC) award. It is also important to note that the budget does not much underline better aligning provincial responsibilities, with expenditure rationalization, whereby, for instance, social welfare programme Benazir Income Support Programme (BISP) related allocation, which should be the concern of the respective province, given under the 18th Constitutional Amendment social welfare is a provincial subject, yet it continues to be allocated through federal budget Rs.844.8 billion for the upcoming fiscal year. At the same time, the fact that the budget estimates for the upcoming fiscal year are the same as the last fiscal year means lesser allocation in real terms, which is strange given poverty, and income inequality are rising in the country. In the same vein, for instance, education, health, and perhaps social protection, which appear similar to social welfare, all fall within the responsibility of provinces under the 18th Constitutional Amendment, yet there is duplication in terms of significant allocation of non-development current expenditure at the federal level; where directional guidance from Centre at the policy level for these subjects could be provided by the planning ministry from the already existing research staff since all development related areas are part of the overall planning of countryâ€™s economy, while running the educational, and health affairs concerning the Centre jurisdiction of Centre â€“ including running the affairs of Higher Education Commission, which is not a devolved entity â€“ would in turn likely be a small fraction of what is being allocated currently. Hence, in an overall budgetary estimate of current expenditure for the upcoming fiscal year at Rs.17.5 trillion, a little more than Rs.1 trillion goes to these three concerns â€“ â€˜Education Affairs and Servicesâ€™ allocated Rs.117.1 billion, â€˜Health Affairs & Servicesâ€™ Rs.37.4 billion, and â€˜Social Protectionâ€™ Rs.867.0 billion; where this saving could mean less primary surplus target, and overall greater fiscal space for enhancing development spending â€“ where PSDP from this saving in federal budget could in fact around be doubled â€“ along with lesser need for seeking provincial surplus, which has been budgeted Rs.1.8 trillion! Here, it needs to be indicated that even if the budgetary estimate for FY2026-27 for â€˜Tertiary Education Affairs and Servicesâ€™ at Rs.84.5 billion are taken out of the total current expenditures, they still stand close to Rs.1 trillion, or Rs.927.1 billion to be more precise. It is strange that most of the tertiary level Rs84.5 billion expenditure will likely be with regard to providing research grants, and should therefore be part of the development expenditures of the federal government, and not current expenditure. Moreover, the budget should focus on reaching primary deficit, while reducing fiscal deficit. This is important to avoid fiscal austerity in the overall effort to provide a counter-cyclical budget, which is, in turn, essential for both stability and growth; and should not be wrongly seen as a matter of trade-off between the two, at least not over the medium-term. This is because targeting inflation should not mean primarily aggregate demand squeeze emphasis, given both traditionally inflation being an equally fiscal phenomenon in developing countries, and more so, in the wake of elevated level, and frequency of aggregate supply shocks due to fast-unfolding climate change crisis, increasing probability of related â€˜Pandemiceneâ€™ phenomenon, and heightened level of conflict globally. (TO BE CONTINUED ON SUNDAY) Copyright Business Recorder, 2026

Date: 2026-06-19

Details: Published June 19, 2026 Updated about 2 hours ago By Huzaima BukhariDr Ikramul HaqAbdul Rauf Shakoori Every Finance Bill is presented as an instrument of reform! Governments speak of documentation, broadening the tax base, digitisation and fairness. However, the real test of any Finance Bill is not the number of amendments it contains, but whether it can help create a productive economy capable of generating sustainable revenues. Judged by that standard, the Finance Bill 2026 raises a more fundamental question: can Pakistan continue financing the State through intensified extraction from a narrow documented sector while leaving the underlying political economy largely untouched? The debate surrounding the Finance Bill 2026 has focused on tax rates, relief for salaried persons, withdrawal of certain provisions, tariff rationalisation and introduction of new enforcement tools. These matters are important, but they do not answer the central fiscal question. Can these measures alone enable the Federal Board of Revenue (FBR) to achieve its ambitious collection target of Rs 15.264 trillion for the coming fiscal year 2026-27? The answer requires a broader historical perspective. Pakistanâ€™s tax problem has never been merely administrative. It is fundamentally political and structural. For decades, successive governments have attempted to increase revenues without confronting distribution of economic power. Taxation has therefore evolved into a system where the documented sectors of the economy bear a disproportionately large burden while politically influential sectors remain undertaxed or escape effective scrutiny altogether. The result is a tax system characterised not by universality but by concentration. Banks, corporations, salaried individuals, exporters, manufacturers, importers and formal service providers continue to shoulder the bulk of the burden. Meanwhile, large segments of retail trade, wholesale commerce, real estate speculation, agricultural rent and the informal economy remain outside effective taxation. This imbalance becomes particularly significant when examining the assumptions underlying Budget 2026-27. Historically, revenue growth in Pakistan has been driven by four factors: economic growth, inflation, import expansion and new taxation measures. During the high-growth years between 2002 and 2007, tax collections increased largely because economic activity expanded rapidly. Banking, telecommunications, construction and consumer markets generated taxable incomes and transactions. Revenue growth was a consequence of economic expansion. The pattern changed during subsequent years. Increasingly, revenue growth came from withholding taxes, advance taxes, presumptive taxation, petroleum levies, minimum taxation and administrative enforcement. Instead of taxing new economic activity, the State intensified extraction from existing activity. The Finance Bill 2026 continues this trend. Many of its most significant provisions are not tax policy measures but revenue administration measures. Faceless audits, faceless assessments, algorithmic risk profiling, electronic invoicing, digital monitoring, banking data integration, third-party information systems and automated scrutiny all seek to improve enforcement capacity. They may well increase short-term collections. They may even help the government meet certain quarterly targets. However, enforcement should not be confused with reform. No country has ever achieved long-term revenue sustainability through enforcement alone. Sustainable tax growth emerges from investment, productivity, profitability and expansion of the tax base. Tax administrators can collect taxes from economic activity. They cannot create economic activity. This distinction is particularly relevant in Pakistanâ€™s present circumstances. The government expects FBR to collect Rs 15.3 trillion while economic growth remains modest, private investment remains subdued, manufacturing struggles with high energy costs and businesses face unprecedented regulatory uncertainty. The contradiction is obvious. The State expects historic revenue growth from an economy that itself remains constrained. The Finance Bill 2026 attempts to bridge this contradiction through technology. The language of reform has shifted from legislation to algorithms. Faceless adjudication, automated risk assessment and digital compliance have become the preferred instruments of revenue administration. Technology undoubtedly has an important role in modern taxation, yet it cannot substitute for legitimacy. Pakistan appears increasingly attracted to the Indian model of faceless assessment and digital tax administration. However, India introduced such reforms after extensive digitisation of economic activity, integration of taxpayer identification systems, widespread banking penetration and the establishment of robust information networks. Even then, the Indian experience generated significant criticism regarding procedural fairness, algorithmic opacity and denial of meaningful hearings. Pakistan seeks to replicate the model without first creating the underlying foundations. Facelessness may reduce direct interaction between taxpayers and officials, but it does not automatically eliminate arbitrariness. An opaque algorithm can be as intimidating as a discretionary officer. Digital notices can multiply harassment if underlying data remains unreliable. Automated mismatch detection can become automated coercion unless taxpayers enjoy effective rights of appeal and transparent procedures. The deeper problem lies elsewhere. The Finance Bill 2026 continues to assume that documentation can be achieved through surveillance. All said and done, documentation is not merely a technological exercise! It is fundamentally a fiscal relationship between citizens and the State. Citizens willingly enter documented systems when taxation is perceived as fair, predictable and connected to public services. Conversely, excessive reliance on coercive measures deepens distrust and encourages further informality. Pakistanâ€™s experience over the past two decades demonstrates this clearly. Despite an ever-expanding network of withholding taxes, advance taxes, presumptive taxes and information reporting requirements, tax base has not broadened proportionately. The system has become more intrusive without becoming significantly more inclusive. This is where the Finance Bill intersects with a larger political economy issue. Pakistan increasingly resembles what economists describe as a rentier fiscal structure. Revenue extraction relies less on expanding productive capacity and more on extracting resources from captive sectors of the economy. Growing dependence on petroleum levy, withholding taxation and administrative enforcement reflects this tendency. Fiscal policy becomes detached from production and increasingly dependent upon mechanisms that transfer resources from existing taxpayers rather than creating conditions for new taxpayers to emerge. Debt servicing intensifies this dynamic. A substantial portion of federal revenues is pre-committed before development priorities are even considered. Consequently, revenue authorities face relentless pressure to maximise collections regardless of broader economic consequences. Tax administration gradually transforms into an instrument of fiscal survival rather than economic development. In such circumstances, every Finance Bill risks becoming an exercise in revenue extraction rather than a blueprint for growth. Relief granted to salaried taxpayers illustrates this contradiction. While reductions in tax rates are welcome, salaried individuals were never the principal source of Pakistanâ€™s fiscal imbalance. They represent perhaps the most compliant segment of the taxpaying population. Relief may mitigate resentment, but it does not address structural inequities in the distribution of tax burdens. Similarly, the proposed abolition of section 7E removes a controversial provision whose constitutional validity remained doubtful. Yet its withdrawal also highlights a recurring weakness of tax policymaking. Successive governments introduce legally questionable measures in pursuit of short-term revenue gains, only to retreat later after years of litigation and uncertainty. Such policy reversals damage investor confidence far more than any nominal tax rate. The most revealing aspect of the Finance Bill 2026 may therefore be what it does not attempt. It does not fundamentally address agricultural income taxation. It does not comprehensively reform retail taxation. It does not eliminate excessive reliance on withholding taxes. It does not create a unified national sales tax framework. It does not establish a stable, predictable multi-year tax policy. Nor does it confront the broader governance failures that discourage investment and productivity. These omissions matter because revenue targets cannot be analysed independently of economic conditions. A tax administration can only collect from what the economy produces. If growth remains weak, if investment remains hesitant, if businesses continue facing high energy costs and regulatory uncertainty, administrative measures alone will eventually reach their limits. Three scenarios therefore emerge. The first is that FBR achieves its target through aggressive enforcement, inflationary effects and intensified withholding. The target may be met, but the underlying economy remains weak. The second is that economic activity slows sufficiently to undermine revenue assumptions. In that case, the familiar cycle of mini-budgets, additional taxation and further enforcement is likely to return. The thirdâ€”and presently the least discussedâ€”is genuine structural reform. This would require broadening the tax base through politically difficult measures, harmonising federal and provincial taxation, reducing compliance costs, strengthening taxpayer rights, simplifying tax laws and linking taxation more visibly to public services. Only the third path offers durable fiscal stability. The real question, therefore, is not whether the Finance Bill 2026 contains enough amendments to help FBR collect over Rs 15 trillion. The real question is whether Pakistan can continue demanding larger and larger sums from a relatively small documented sector while postponing reforms that would expand productive capacity and create new taxpayers? The Finance Bill 2026 reflects an increasingly sophisticated revenue administration. What it does not yet reflect is an equally sophisticated understanding of growth. Until that imbalance is corrected, each successive Finance Bill may succeed in collecting more revenue, but none will resolve the fiscal crisis that makes such collections necessary in the first place. Copyright Business Recorder, 2026

Date: 2026-06-19

Details: Published June 19, 2026 Updated about an hour ago EDITORIAL: Sindh presented a 3,525 billion-rupee budget with the major reliance for revenue remaining on federal transfers (nearly 64 percent), but own-receipts are projected to account for 22 percent as a percentage of total revenue collected: 456 billion rupees as sales tax on services and agriculture income tax against 362 billion rupees collected in the outgoing year (26 percent rise), tax receipts other than sales tax and agricultural income tax budgeted to generate 234 billion rupees, a decline from the 261.729 billion rupees collected last year, and non-tax receipts at 85 billion rupees, a small decline from the 86.5 billion rupees collected in 2025-26. However, a closer look at this data reveals three disturbing features of the budgeted own-revenue that are common with the Punjab budget: (i) agricultural income tax is projected to generate only 6 billion rupees next fiscal year which, without doubt, is violative of the International Monetary Fundâ€™s insistence that this sector does not pay taxes commensurate to its contribution to the Gross Domestic Product (GDP); the Punjab government has earmarked a mere 10.5 billion rupees under this head next fiscal year; (ii) it is difficult to support any reduction in collections, excluding GST and farm tax; especially, if the GDP growth rate is projected at 4 percent. Punjab has projected the same revenue as in the outgoing year under stamp duties and a reduction of 500,000 rupees in terms of fees and penalties, though the budget documents mention higher police earnings from fines and penalties; and (iii) the same questions arise with respect to the decline in the non-tax receipts. Punjab too showed a decline under this head though it was much larger than budgeted by Sindh notably nearly 29 billion rupees. The Sindh governmentâ€™s Budget Strategy Paper 2026-27 to 2028-29 notes some major risks with a potential for major conflict with the Centre as follows: â€œUnder the MTFF of term 2026-29, the Government is expected to face an operating budget deficit, with total revenues falling short of projected expenditures due to a widening gap between revenue growth and spending commitments. These pressures are likely to be further exacerbated by a number of emerging risks, including the potential implications of the 11th NFC Award, possible reduction in provincial share in the divisible pool, and the uncertainty surrounding the continuation of the Octroi and Zila Tax (OZT) grant.â€ The deferment of reducing the share of the provinces from the divisible pool under the operative National Finance Commission award till next year, alluded to by the Federal Finance Minister in his budget speech delivered on 12 June, would necessitate a constitutional amendment that requires a two-third support from parliament â€“ a condition unlikely to be met without Pakistan Peopleâ€™s Partyâ€™s (PPPâ€™s) support. The inclusion of this concern in the paper, however, indicates that the party is aware of the capacity of the prevailing hybrid system of government to get parliamentary approval as and when it deems appropriate. And a pet project of the leadership of the PPP is development of the public private partnership portfolio which, the budget documents claim, has â€œexperienced a significant growth from 5 billion rupees in 2010 to around 876 billion rupees in 2025, covering multiple sectors such as Health, Road Infrastructure, Water, Tourism, Forestation, Recreation and Education etc. Currently, more than 148 billion-rupees worth of projects are operation, over 130 billion-rupees worth of projects are under construction, and more than 177 billion-rupees worth of projects are under investor solicitation and expected to be concluded by June 2026.â€ This was markedly absent in the Punjab budget led by the PML-N that is supportive of privatization at the federal level while in the province the focus is on promoting foreign direct investment rather than creating space for public and domestic private partnerships. The allocation for social sectors was slashed for next fiscal year like in Punjab; however, this did not lead to a projected surplus as required and reportedly agreed by all provinces under the ongoing IMF programme with the provincial budget, highlighting a deficit of 36.9 billion rupees next year instead of a surplus of 440 billion rupees. This was also the case in the outgoing year with a deficit of 27.87 billion rupees though the Centre had budgeted a surplus of 359 billion rupees for Sindh. Copyright Business Recorder, 2026

Date: 2026-06-19

Details: Published June 19, 2026 Updated about 2 hours ago By Sardar Sikander Shaheen ISLAMABAD: Finance Minister Senator Muhammad Aurangzeb, Thursday, assured the Senate that its recommendations would be duly considered for the federal budget, as the Upper House of the Parliament adopted a total of 123 recommendations on the Finance Bill, 2026. Winding up the budget debate, the finance minister appreciated the Senate Standing Committee on Finance and Revenue for its input on the federal budget. â€œThe finance panel reached out to every sector and gave its recommendations in a short span of time,â€ he said. Aurangzeb reiterated that several key recommendations of the Senate would be made part of the Finance Bill, 2026 that would be put up before the National Assembly in the coming days. On the economic situation in the country, he said that the situation in the Middle East impacted the pace of economic progress in Pakistan, adding that the government was taking effective steps to grapple with the situation. The minister said the government has reduced taxes on construction industry in the federal budget. The advance sales tax on the corporate sector has also been abolished in the budget, Aurangzeb said. â€œAlso, the burden of taxes on the salaried class has been lessened,â€ the lawmaker said. Other significant decisions taken by the federal government in relation to the federal budget include abolition of surcharge on the information technology sector, according to the minister. The IT exports in the outgoing fiscal year would be recorded at USD 4.5 billion, Aurangzeb said, adding that the government is imparting coding training to the youth associated with the IT sector. Earlier, Chairman Senate Standing Committee on Finance and Revenue Saleem Mandviwalla said, the panel has devised 123 recommendations for the NAâ€™s consideration. The committee, he said, has recommended increasing salaries by at least 15 percent, broadening the tax base, and avoiding the imposition of new taxes on essential commodities. The panel has proposed reducing taxes on fertilisers, seeds and agricultural machinery to support the farming sector, he said. After his speech, Mandviwalla moved a motion that the recommendations on the Finance Bill, 2026, containing the Annual Budget Statement, as reported by the committee, be adopted by the House. Subsequently, the Senate adopted the motion. Moreover, the Senate passed the Federal Board of Revenue (Amendment) Bill, 2026, presented by the finance minister. The bill seeks to shift the functioning of the FBRâ€™s Policy Board under the ambit of the Finance Division. The bill also seeks to empower the secretary Revenue Division to appoint and transfer the FBR Members of grade 21 and above. Prime Ministerâ€™s Political Adviser Rana Sanaullah told the Senate that Pakistan had raised the issue of â€œIndiaâ€™s weaponisation of waterâ€ at the international forums. â€œIndia is constructing five dams on Chenab River and aims to complete them in the next four to five years. Once completed, these projects would enable India to halt the flow of water of Chenab for a period ranging from 60 to 90 days,â€ he said. Copyright Business Recorder, 2026

Date: 2026-06-19

Details: Published June 19, 2026 Updated about 2 hours ago By Tahir Amin ISLAMABAD: The National Assembly Standing Committee on Finance and Revenue on Thursday approved a proposal to impose a 5 percent withholding tax on income earned through social media platforms, while also endorsing a capital gains tax (CGT) regime on the sale of inherited properties. The committee, which met under the chairmanship of Naveed Qamar here on Thursday, gave its nod to a series of tax measures proposed in the Finance Bill, 2026 aimed at broadening the tax base and documenting emerging income streams. Federal Board of Revenue (FBR) officials informed the committee that earnings generated from digital platforms such as YouTube are increasing rapidly and largely remain outside the tax net. They explained that the withholding tax would be deducted when foreign currency earnings from social media platforms are remitted through the banking system. According to FBR officials, income generated from social media activities in Pakistan is around Rs4 to 10 billion, prompting the government to introduce a mechanism for taxing digital content creators and influencers. Under the approved proposal, a 5 percent withholding tax will be charged on social media earnings received through banks. The tax is expected to help bring the fast-growing digital economy into the formal tax regime and improve revenue collection from online income sources, they added. The committee also considered amendments relating to inherited properties and family settlements. FBR officials proposed the imposition of CGT on the sale of inherited properties and plots, while introducing a clear valuation mechanism to determine taxable gains. Officials explained that the cost of an inherited property would be deemed to be its market value on the date of the original ownerâ€™s death. This benchmark would serve as the acquisition cost for calculating capital gains tax when the property is subsequently sold. Explaining the mechanism, FBR officials said that if a plot was worth Rs8 million at the time of the ownerâ€™s death and later sold for Rs10 million, capital gains tax would be charged on the Rs2 million, the amount increases in value. However, committee chairman Syed Naveed Qamar advised that the propertyâ€™s original value should be calculated from the date ownership is formally transferred. The committee subsequently suggested determining the real value from the date of the transfer of ownership. The committee was informed that inherited properties transferred through family settlement arrangements would be granted legal protection under the proposed framework. The valuation date for such assets would remain the date of the ownerâ€™s death, ensuring certainty in determining the propertyâ€™s original cost. Tax authorities argued that the measure would remove ambiguities surrounding inherited assets and establish a transparent system for taxing gains arising from the disposal of such properties. The standing committee also approved a proposal requiring income tax returns to be filed exclusively through electronic means. The FBR officials said taxpayers would be required to submit income tax returns electronically through the IRIS system, and companies would also have to file their financial statements in machine-readable formats. The officials also noted that the FBR has largely shifted to digital filing since 2013, although manual returns were still being submitted from certain cities, including Gujranwala, but now the proposal aims to make electronic filing mandatory. The committee endorsed another proposal of a 10 percent tax credit for digital integration. Copyright Business Recorder, 2026

Date: 2026-06-19

Details: Published June 19, 2026 Updated about 2 hours ago By Naveed Butt ISLAMABAD: The National Assembly is set to approve the Finance Bill, 2026, on June 23 (Tuesday) and the Regular and Technical Supplementary Grants for the financial years 2024-25 and 2025-26 on June 24 (Wednesday), it is learnt. According to sources, the government aims to secure approval of the Budget 2026-27 before the 9th and 10th of Muharram of the Islamic month, which fall on June 25 and 26, respectively. Sources said the debate on the Budget 2026-27 will continue until Saturday afternoon. Later in the day, Federal Minister for Finance Senator Muhammad Aurangzeb will wind up the budget debate in the National Assembly on Saturday evening (June 20). The minister will also present the Senateâ€™s recommendations to the Lower House of Parliament during his winding-up speech on the budget debate. The finance minister will present the Demands for Grants and Appropriations for the financial year 2026-27 on Sunday for discussion and voting on cut motions. He will also present the Excess Budget Statements for the financial years 2016-17 and 2024-25 (excluding charged expenditure) before the House. In addition, the minister will present the Annual Budget Statement for the financial year 2026-27, including the revised estimates for the 2025-26 financial year. Sources said discussions and voting on cut motions relating to the demands for grants will continue on Sunday and Monday. Opposition members will move cut motions on various demands for grants, which will be debated over the two days. They said opposition parties, particularly the Pakistan Tehreek-e-Insaf (PTI) and the Jamiat Ulema-e-Islam (F) (JUI-F), are currently submitting cut motions to the legislative branch of the National Assembly Secretariat. On Tuesday (June 23), the finance minister will present the Finance Bill, 2026, for approval by the National Assembly, while the supplementary grants will be tabled for passage on Wednesday (June 24). Copyright Business Recorder, 2026

Date: 2026-06-19

Details: Published June 19, 2026 Updated about 2 hours ago By Mansoor Qaisar Pakistan is a country of contradictions. It possesses nuclear weapons but cannot guarantee a child a functioning classroom. It speaks of becoming a top economy by 2047 while cutting its education budget to levels that shame the region. It produces policy documents of impressive sophistication while millions of its citizens live and die without ever encountering a doctor, a trained midwife or a fully stocked health facility. At the heart of this contradiction lies a number so small it should embarrass every policymaker who has ever drawn a salary from the public treasury â€” less than one percent. According to the Pakistan Economic Survey 2025-26, public education expenditure stood at Rs962 billion in FY2025, down from Rs1,251 billion in the previous reported year â€” representing just 0.8 percent of GDP. Public health expenditure stands at the same level. Combined, Pakistanâ€™s total public investment in the health and education of its 252 million people amounts to barely 1.6 percent of its national income. Not because the need does not exist. Not because the suffering is invisible. But because somewhere in the hierarchy of national priorities, the sick child, the illiterate girl and the dying patient still do not rank high enough. The education numbers are especially alarming. Pakistan was spending between 1.5 and 1.9 percent of GDP on education only a few years ago. It is now spending 0.8 percent â€” a collapse, not a correction. The UN-backed Incheon Declaration recommends that governments allocate between four and six percent of GDP to education. Pakistan is spending a fraction of even the lower threshold while simultaneously speaking the language of development, competitiveness and a demographic dividend. These two realities cannot coexist indefinitely. One of them will eventually win. The evidence suggests it will not be the rhetoric. There is progress â€” and it deserves honest acknowledgement. Pakistanâ€™s literacy rate has risen to 63 percent, with male literacy at 73 percent and female literacy at 54 percent. Out-of-school children have declined from 38 percent in 2023 to 28 percent in 2025. Balochistan has made notable gains, with its out-of-school rate falling from 69 percent to 45 percent. But 28 percent of children still out of school in a country of 252 million means millions of futures remain compromised before they begin. Progress measured against decades of underinvestment should not become a sedative. It should be a warning â€” we are moving, but nowhere near fast enough for the scale of this crisis. Health tells an equally disturbing story. Life expectancy has improved to 67.8 years, infant mortality has fallen from 60 to 47 per 1,000 live births, and immunisation coverage has increased. Yet Pakistan still trails South Asian benchmarks on several critical indicators. Around one-third of children under five continue to suffer from stunting â€” chronic malnutrition that permanently impairs physical growth and cognitive development. A stunted child is not merely a health statistic. It is a lost opportunity, a weakened future workforce and a moral failure written into the body of a citizen before that citizen has had any chance to choose their own path. The poverty numbers deepen the indictment. The national poverty headcount has climbed from 21.9 percent to 28.9 percent, reversing years of fragile progress and pushing millions back below the poverty line. Urban poverty rose from 11 percent to 17.4 percent. This is the arithmetic of neglect â€” when a state does not invest in peopleâ€™s health and education, it does not merely fail to lift them out of poverty. It drives them back in. The two failures are not separate. They are the same failure, compounding across generations. Mental health, too, remains almost invisible in Pakistanâ€™s public financing debate. Depression, anxiety, trauma and suicide affect families across every province, every class and every age group in Pakistan. According to WHO Eastern Mediterranean Region data, mental disorders account for more than 4 percent of Pakistanâ€™s total disease burden, with the burden higher among women. An estimated 24 million people in the country need psychiatric assistance, yet resources for screening and treatment remain deeply inadequate. The WHO has also reported that Pakistan has only 0.19 psychiatrists per 100,000 inhabitants â€” among the lowest ratios in the Eastern Mediterranean Region and globally. Its absence from serious budgetary attention shows how narrowly the state still defines human development. Pakistanâ€™s population has reached 252 million and is growing at 2.07 percent a year. More than half the population falls within the working-age bracket, while more than a quarter is aged 15 to 29. This could be a demographic dividend of historic proportions. But dividends are not automatic. They require schools that actually teach, clinics that are actually staffed, skills programmes that produce actual employment, and public systems genuinely designed to help young people become productive citizens. Without that investment, a young population is not an asset. It is a pressure point â€” and pressure, when ignored long enough, does not dissipate. It detonates. Budgets are never merely accounting documents. They are moral documents. They reveal what a state protects, what it neglects and what it is willing to sacrifice. Even under fiscal stress â€” and Pakistanâ€™s fiscal stress is real, with debt servicing consuming more than half of federal revenue â€” choices are made. Defence is protected. Administrative costs are maintained. Subsidies flow to those with influence. And health and education are quietly adjusted downward, year after year, in the comfortable knowledge that the people most affected by these cuts have the least power to resist them. Pakistan does not merely need more money for its people. It needs a different hierarchy of priorities. It needs a governing class willing to believe that a child in a Balochistan village, a girl sitting in a crumbling government school, a mother in a rural Sindh hospital and a young man searching for dignified work are as central to national survival as roads, weapons, trade delegations and debt rollovers. A nation that cannot afford its own children is not building a future. It is consuming one. Every child who leaves school without learning to read, every patient who dies outside an understaffed hospital, every woman who never receives prenatal care, every young person pushed into unemployment without skills â€” these are not accidents of poverty or fate. They are policy outcomes, produced by deliberate decisions, repeated across decades, dressed in the language of fiscal constraint and institutional inevitability. The Pakistan Economic Survey 2025-26 contains all the evidence anyone needs to understand what has gone wrong and what must change. The tragedy is that it will be quoted for a few days, cited in a few seminars, filed away â€” and forgotten, just like every survey before it, while next yearâ€™s budget quietly cuts a little more from the people who can least afford to lose anything at all. The question is no longer whether Pakistan can afford to invest in health and education. The question is whether it can afford not to. And the answer â€” written in the stunted body of a child, in the illiteracy of a mother, in the silence where a mental health budget should be â€” is already before us. It has always been before us. We have simply chosen, year after year, not to read it. Copyright Business Recorder, 2026

Date: 2026-06-18

Details: Published June 18, 2026 Updated about an hour ago EDITORIAL: The Punjab budget envisages total revenue of 1209 billion rupees from own resources (only 749 billion rupees from taxes and 461 million rupees as non-tax revenue) against the revised estimates of 820 billion rupees in the outgoing fiscal year â€“ a significant rise of 47.5 percent. Sales tax collections on services, passed on in its entirety to the clients/consumers, an indirect tax, to boot, whose incidence on the poor is greater than on the rich, are budgeted to rise to 521 billion rupees next year against 363.5 billion rupees collected in the revised estimates of the current year (though the budgeted target for the current year was lower at 333.5 billion rupees) â€“ a 43 percent rise. This encapsulates higher tax on IT services, transport and professional services (from 5 to 8 percent), a 3 percent new tax on foreign exchange services (that is likely to impact the middle to lower income levels) and 8 percent on event management (though input tax adjustment has not been factored in). Actual collection with respect to agriculture income tax for next fiscal year is a paltry 12.5 billion rupees against 3.99 billion rupees collected in the outgoing year though the budgeted amount was 10.5 billion rupees. The budget, however, claims upward revisions in this tax: those with more than 12.5 acres of land would pay a flat rate of 1,000 per acre, up from 300 rupees per acre for 12.5 to 25 acres, 400 rupees per acre for 25 to 50 acres, and 500 rupees per acre for above 50 acres. Tax on irrigated orchards would rise from 600 rupees to 1,000 rupees per acres and on non-irrigated orchards from 300 rupees to 500 rupees per acre. This is a far cry from the need to bring the tax at par with a specific farmâ€™s income to be levied at the same rate as payable by the salaried. Given that Punjab is the bread basket of the country with a large number of absentee landlords who are overwhelmingly represented in the provincial assembly, the small projected revenue from this source may not be met at the end of next fiscal year â€“ a projection based on the outgoing yearâ€™s collection of only 38 percent of what was budgeted. The agricultural income tax collection must be seen in the context of 10.6 billion-rupees subsidy to the farm sector, and included in the Fiscal Risks Statement 2026-27 is the following: 7.3 billion rupee subsidized diesel to support farmers, 1.7 billion rupees for subsidized petrol to motorcyclists and 0.75 billion rupee free public transport services throughout Punjab. These higher than the outgoing yearâ€™s budgeted projections are not in line with the pledge made to the International Monetary Fund (IMF) noted in the May 2026 staff level agreement on the third review of the ongoing Extended Fund Facility programme: â€œAt the provincial level, revenue mobilization will continue to focus on broadening the GST tax base on services and the application of higher income tax rates on agricultural income.â€ The budget envisages a 19 percent increase in non-tax revenue mainly from Cash Management Fund that was set up under the Punjab Public Financial Management Act 2022 to manage Punjabâ€™s liquidity and budget execution and has increased from 800 billion rupees to 1.2 trillion rupees. It is funded and replenished from productive investments and parking of idle cash balance, surplus provincial revenue and unutilized funds from the provincial consolidated fund. In addition, higher revenue is budgeted to be generated from police due to enhanced traffic fines (2.8 billion rupees), increased revenue from royalties, release of NHP arrears by the Centre and anticipated profits from Punjab Pension Fund established in 2024 through employee contributions effective for those hired from 2024 onwards, though the exact amount has not been quantified. The budget shows a surplus of 910 billion rupees, higher than the total provincial tax receipts of 749 billion rupees, a surplus that was required to meet the federal budgetâ€™s demands geared to meeting the commitment with the IMF. The expenditure outlay is mainly on current expenditure at 3.29 trillion rupees while development outlay is budgeted at 752 billion rupees or 12.7 percent of the total â€“ lower than the Centreâ€™s percentage allocation of 93 percent on current expenditure. It is relevant to note that the rise in development outlay, supported as it is, gives Punjabâ€™s share in the downward revised provincial public sector development programme as noted in the federal budget at only 38 percent â€“ lower than its share in the divisible pool, which is 51.74 percent â€“ a share that no doubt is rooted in Punjab budgetâ€™s overarching objective to meet the federal budgetâ€™s requirements as pledged to the IMF. To conclude, this may not be the final outlay if there are unforeseen liabilities associated with exogenous factors and the Punjab budget echoes what is in the federal budget: â€œexpenditure restraint will also be essential, with primary spending remaining flat as a share of GDP in FY27, while increasing targeted cash transfers and health and education spending ratios. Further, expenditure compression (including lower-priority capital spending) may be needed if risks to revenue mobilization materialize.â€

Date: 2026-06-18

Details: Published June 18, 2026 Updated about an hour ago By Qudrat UllahPartner Content Punjabâ€™s Budget 2026-27, presented by Finance Minister Mian Mujtaba Shuja-ur-Rehman in the Provincial Assembly, reflects the provincial governmentâ€™s effort to combine fiscal discipline with an expansive social and development agenda. With a total outlay of Rs 5,903.5 billion, the budget is the largest in Punjabâ€™s history and represents a 10.7 percent increase over the previous fiscal year. More than a statement of accounts, it offers a clear indication of the governmentâ€™s priorities under Chief Minister Maryam Nawaz Sharif: public welfare, infrastructure development, human capital investment and economic modernisation. A notable feature of the budget is the continuation of the governmentâ€™s policy of avoiding new taxes. At a time when households and businesses continue to face economic pressures, the decision not to impose additional provincial taxes has been presented as an effort to support economic activity while relying on improved governance, digitisation and enhanced compliance to strengthen revenue collection. Provincial own-source revenues are projected at Rs 1,209.9 billion, while federal transfers under the NFC Award are expected to remain the principal source of revenue. The province has also committed a surplus of Rs 546 billion in line with national fiscal commitments. The development agenda remains substantial. The Annual Development Programme (ADP) has been set at Rs 752 billion, including significant allocations for foreign-funded projects. Despite fiscal constraints, the provincial government has maintained a strong focus on sectors that directly affect citizensâ€™ quality of life. Education emerges as one of the foremost priorities. The sector has been allocated Rs 750 billion, accounting for a significant share of provincial spending. The allocation supports initiatives aimed at improving access, quality and digital learning opportunities. Programmes such as the Chief Ministerâ€™s Laptop Scheme, merit-based scholarships, new higher education projects and investments in science and technology education reflect a long-term commitment to preparing Punjabâ€™s youth for a competitive economy. At a time when knowledge and innovation increasingly drive economic growth, such investments carry strategic significance. Healthcare also receives major attention, with approximately Rs 500 billion allocated for the sector. The budget includes substantial funding for the provision of free medicines in public hospitals and for the expansion of specialised healthcare facilities. Ongoing investments in cancer treatment centres, childrenâ€™s healthcare and primary healthcare services seek to improve both access and quality of care. The governmentâ€™s emphasis on health infrastructure acknowledges that social development and economic productivity are closely linked to the well-being of citizens. Agriculture, the backbone of Punjabâ€™s economy, remains a key beneficiary of public spending. Resources have been earmarked for farmer support initiatives, including the Kisan Card, Green Tractor Scheme and measures to reduce production costs. Continued support for tube-well solarisation and livestock development programmes demonstrates recognition of the sectorâ€™s central role in employment, food security and rural prosperity. These interventions are designed not only to provide relief but also to improve productivity and sustainability in the long run. The budget also reinforces Punjabâ€™s social protection framework. Allocations for targeted subsidies and welfare programmes aim to support vulnerable groups and low-income households. Schemes such as Himmat Cards, Minority Cards and other social assistance initiatives reflect an effort to extend the benefits of economic development to segments of society that often remain excluded from growth. Youth empowerment features prominently in the Punjab governmentâ€™s policy vision. Investments in AI and IT, entrepreneurship, skills development and employment generation seek to equip young people with market-relevant capabilities. Such programmes are particularly important in a province where a large proportion of the population is under the age of thirty and where employment opportunities must expand in line with demographic realities. Punjab Government employees have also been provided relief through a proposed seven percent increase in salaries and a 3.5 percent increase in pensions. While modest in comparison with inflationary pressures, these measures nonetheless acknowledge the financial challenges faced by public servants and pensioners. Taken together, Punjabâ€™s Budget 2026-27 presents a governance philosophy centred on welfare, holistic development and institutional reform. It attempts to balance fiscal responsibility with ambitious public investment while avoiding additional tax burdens on citizens. Whether measured through schools, hospitals, agricultural support programmes or social protection initiatives, the budget seeks to translate public resources into tangible improvements in peopleâ€™s lives. In that sense, it is not merely a new financial document but a statement of priorities and an indicator of the direction in which the province intends to move during the coming year. Copyright Business Recorder, 2026

Date: 2026-06-18

Details: Published June 18, 2026 Updated about an hour ago By Naveed ButtZulfiqar Ahmad ISLAMABAD: A routine sitting of the National Assemblyâ€™s budget session on Wednesday descended into heated exchanges between government and the opposition Pakistan Tehreek-e-Insaf (PTI) lawmakers, with repeated interruptions, raised voices and procedural disputes disrupting proceedings. The flashpoint erupted during proceedings when Federal Minister for National Food Security & Research Rana Tanveer Hussain engaged in a heated verbal exchange with lawmakers from the opposition Pakistan Tehreek-e-Insaf (PTI), turning what began as policy criticism into a full-blown shouting match on the House floor. What started as routine opposition grilling escalated rapidly into a barrage of interruptions and pointed remarks, with the Speaker repeatedly struggling â€“ and largely failing â€“ to restore order as voices from both sides drowned out formal proceedings. The confrontation soon moved well beyond legislative debate. In a particularly charged moment, Rana Tanveer Hussain challenged PTI lawmakers to put forward their incarcerated founding chairman and former prime minister Imran Khan in an electoral contest against him, while accusing the opposition of â€œreaping what it has sownâ€ amid the countryâ€™s ongoing political turbulence. The remarks further inflamed an already volatile atmosphere, with the chamber echoing with interjections as the ministerâ€™s claim that â€œwe are also elected representativesâ€ was effectively lost in the noise of ongoing disruptions. The Speaker made repeated attempts to bring proceedings back under control, issuing calls for order as tempers refused to cool. A brief moment of calm followed after Rana Tanveer Hussain expressed regret over his remarks, an apology later accepted by PTIâ€™s acting chairman Barrister Gohar Ali Khan â€“ offering only a temporary pause in an otherwise combustible session. But the restraint did not last long. Minister of State for Interior Talal Chaudhry soon became embroiled in a separate confrontation again with opposition PTI lawmakers, accusing them of deliberately sabotaging proceedings through constant heckling and refusing to be silenced. â€œIf debate is underway, it is the opposition that creates noise,â€ he said â€“ a remark that instead of cooling tensions appeared to pour fuel on them, drawing sharper responses from across the benches. As disorder spread again through the chamber, Pakistan Peopleâ€™s Party (PPP) MNA Mir Aamir Ali Khan Magsi stepped in to urge immediate intervention from the NA Speaker, warning that the House was rapidly slipping into â€œunmanageable chaosâ€ and needed urgent restraint before the situation deteriorated further. What remained of the sitting continued under a cloud of disorder, underscoring once again how fragile parliamentary decorum has become amid deepening political hostility. Copyright Business Recorder, 2026

Date: 2026-06-18

Details: Published June 18, 2026 Updated about an hour ago By Naveed ButtZulfiqar Ahmad ISLAMABAD: The National Assembly witnessed a heated clash over Federal Budget 2026-27, with opposition calling it â€œanti-poorâ€ amid inflation and debt fears, while the government defended it as reform-driven, agriculture-focused, and macroeconomic stabilisation under tight external constraints. The ongoing budget debate, marked by sharp exchanges, political undertones and repeated references to electoral legitimacy, saw acting PTI chairman Barrister Gohar Ali Khan lead the oppositionâ€™s charge, while Minister for National Food Security Rana Tanveer Hussain mounted a forceful defence of the governmentâ€™s agriculture-centred economic strategy. Taking part in the budget debate, Barrister Gohar opened his remarks by lamenting what he called a strained and mistrustful parliamentary atmosphere, saying the House had failed to begin its proceedings on a constructive footing. Welcoming what he described as an overture for dialogue by Prime Minister Shehbaz Sharif, he questioned the apparent stagnation in negotiations and sought clarity on what was holding the process back. He also reiterated the oppositionâ€™s demand for access to jailed PTI founder Imran Khan, keeping political grievances firmly on the table alongside the budget debate. He also raised the issue of internal parliamentary tensions, criticising the suspension of MNA Iqbal Afridi and arguing that elected members should not be sidelined in such a manner. On the budget itself, Gohar dismissed it as structurally indifferent to lower-income groups, arguing that it offered â€œnothing for the poorâ€ and would likely intensify inflationary pressures. He warned that essential commodities â€“ including wheat flour, electricity and medicines â€“ would become more expensive in the coming months, further squeezing already strained household budgets. Despite the presence of the Benazir Income Support Programme (BISP), he argued, poverty indicators continued to worsen. In one of the more politically charged moments of his speech, he responded to remarks by Defence Minister Khawaja Asif, questioning whether the ministerâ€™s â€œconscience was not burdenedâ€ by the events surrounding the 8 February elections, which he again characterised as deeply controversial. He further alleged that around 100 PTI members had been disqualified and replaced through what he described as engineered judicial and electoral processes. Responding for the government, Rana Tanveer Hussain defended the budget as a â€œbalanced and reform-orientedâ€ package that had been positively received by the business community despite difficult fiscal space under ongoing IMF-linked arrangements. He stressed that agriculture remained the â€œcentre of gravityâ€ of the governmentâ€™s economic strategy, both for growth and food security. He outlined an ambitious reform agenda for the sector, including mechanisation, seed regulation, institutional restructuring and expansion of value-added exports. Cooperation with Chinese agricultural institutions, he said, was helping modernise the Pakistan Agricultural Research Council (PARC) and develop climate-resilient seed varieties suited to changing environmental conditions. Providing details of regulatory action, he told the House that the government had reviewed the seed sector after taking office in 2024, cancelling licences of around 450 companies found involved in irregularities out of nearly 1,100 registered firms. A new National Seed Regulatory Authority, he said, had been established to tighten oversight and ensure certified inputs for farmers. He also said that the â€œZarkhaiz Schemeâ€, under which small farmers owning less than 25 acres would be provided collateral-free loans, while tenant farmers and sharecroppers would also be eligible through personal guarantees. The State Bank of Pakistan (SBP), he added, had been directed to ensure that agricultural credit actually reached smallholders rather than being captured by large agribusinesses. He noted that long-delayed National Seed Policy and Biotechnology Policy had finally been approved after nearly four decades of administrative stagnation. Highlighting diversification efforts, he said the olive sector had emerged as a surprise success story, generating exports worth $80 million, with ambitions to scale this to $1 billion in the coming years. He also announced a district-level development initiative targeting 10 underdeveloped districts, offering direct financial support, livestock assistance and Rs15,000 per acre in input subsidies. He said farmersâ€™ producer organisations would be encouraged to form cooperatives to cut costs and improve machinery access, noting 95pc are smallholders, alongside a 60pc subsidy on agricultural machinery to boost mechanisation. He said no new agriculture taxes were imposed and fertiliser supply remained stable despite global disruptions, while highlighting Punjabâ€™s Kissan Card for around 800,000 farmers, Sindhâ€™s Rs52 billion allocation, KPâ€™s Rs26 billion package, and Balochistanâ€™s focus on storage and value addition. PPP MNA Shazia Marri highlighted her partyâ€™s alignment with the Charter of Democracy and pointed to the BISP as a globally recognised model of social protection and womenâ€™s empowerment. However, opposition voices remained unconvinced. Rana Ansar Muttahida Qaumi Movement-Pakistan (MQM-P) criticised the budget for inadequate attention to womenâ€™s welfare and said the proposed seven per cent salary increase was insufficient amid persistent inflation. Khurram Shahzad of PPP called for urgent reforms in public education, warning that deteriorating infrastructure and teacher training gaps were undermining learning outcomes. Naz Baloch, another PPP MNA, pressed for stronger investment in climate resilience and information technology, describing both as essential pillars of future employment generation. PML-Nâ€™s Riazul Haq supported relief measures for the construction sector but cautioned that Pakistan required sustained growth of six to seven per cent to ensure long-term economic stability. PTIâ€™s Shafqat Abbas dismissed the economic and agriculture strategy as ineffective in delivering meaningful relief. Mahreen Razzaq Bhutto of PPP urged a reduction in non-development expenditure to expand the Public Sector Development Programme (PSDP), while endorsing increased allocations for BISP. Muhammad Numan of PML-N, however, supported the budget, calling it growth-oriented and focused on reviving both agriculture and industry, with potential to generate employment for young people. Zain Qureshi, viewed as a controversial figure within PTI ranks and previously linked to internal disputes over the 26th Constitutional Amendment in October 2024, rejected the budget as â€œanti-poorâ€, saying macroeconomic stabilisation had come at the expense of rising social distress. He said this was the fifth budget under Prime Minister Sharif, yet growth had remained stuck between two and three per cent. He claimed poverty had risen from 21 to 23 per cent, unemployment was worsening, and nearly 700,000 young people were leaving the country each year in search of opportunities abroad. He also questioned the value of international praise for Pakistanâ€™s leadership, including remarks attributed to US President Donald Trump, asking what tangible benefit such endorsements brought to ordinary citizens. He further claimed Pakistan had accumulated more debt in four years than in the previous seven decades combined, citing rising electricity tariffs, ballooning circular debt and inefficiencies in the power sector. Lawmakers from both the treasury benches and the opposition joined the ongoing budget debate, turning the proceedings into a heated exchange of accusations and counterclaims, with rhetoric often overshadowing substantive policy discussion as political fault lines deepened on the assembly floor. Copyright Business Recorder, 2026

Date: 2026-06-18

Details: Published June 18, 2026 Updated about an hour ago By Reuters SHANGHAI: China stocks ended higher on Wednesday, as gains in AI supply-chain shares outweighed losses in consumer and financial shares, pointing to a deepening divergence between the new and old economies. Hong Kong shares fell. Chinaâ€™s blue-chip CSI300 Index closed up 1 percent, while the Shanghai Composite Index rose 0.4 percent. Hong Kong benchmark Hang Seng was down 0.7 percent. Semiconductor shares jumped 6 percent to an all-time high, leading gains onshore, while the 5G Communication Index climbed 2.5 percent. In contrast, traditional sectors such as consumer staples and financials fell 1 percent and 0.6 percent, respectively. The coal index dropped 2.1 percent. Chinaâ€™s May activity data points to a deepening â€œK-shapedâ€ (where different parts of the economy move at different speeds or directions) divergence in the economy, with industrial output edging up but still near multi-year lows and domestic demand cooling notably in the second quarter, analysts at Huatai Securities said in a note. But the K-shaped divergence could still widen further - not only between the new and old economy and between domestic and external demand, but potentially also between goods and services within domestic demand, between tier-one and nationwide property markets, and across regions - making the economyâ€™s structural significance greater than its headline trajectory, they said. Investors are also digesting remarks from top regulators at an annual forum in Shanghai. ** Chinaâ€™s top banking regulator vowed on Wednesday to prevent systemic financial risk and channel resources to emerging industries, as the country undergoes a painful economic restructuring. The countryâ€™s central bank said that it would improve the mechanism for regulating short-term interest rates and promote the offshore yuan business in Shanghai. Tech majors listed in Hong Kong were up 0.2 percent.

Date: 2026-06-18

Details: Published June 18, 2026 Updated about 2 hours ago By Recorder Report LAHORE: The Pakistan Footwear Manufacturers Association (PFMA) has expressed serious concern over the proposal in the Finance Bill 2026 to place the footwear sector under the Third Schedule, stating that the move may create serious practical difficulties for the industry, discourage documentation efforts, and place additional pressure on one of Pakistanâ€™s most labour-intensive manufacturing sectors. Addressing a press conference at the Lahore Chamber of Commerce and Industry (LCCI), LCCI President Faheem-ur-Rehman Saigol said the footwear sector is an extremely important part of the economy and its input in industrial growth and employment generation is significant. Chairman PFMA Rashad Islam, former chairman Mansoor Ahsan Sheikh, and Executive Committee Member Ahmed Hussain were present. The LCCI President further said that placing the sector under the Third Schedule would have serious negative consequences. â€œFootwear is an extremely important sector, and its input in the economy is very high. Including it in the Third Schedule will have negative effects,â€ he said. â€œNo consultation was held with stakeholders while making this policy. Documented businesses are being disturbed, while the undocumented economy is being encouraged,â€ he said. He urged the government to immediately reconsider the proposal. Chairman PFMA Rashad Islam said the footwear industry fully supports documentation, taxation, and national revenue objectives, but emphasized that taxation policy must remain practical, rational, and aligned with industrial realities. He said the sector is not demanding exemptions but a fair and workable system that does not undermine compliant businesses. â€œThe footwear industry supports documentation and national revenue generation. However, placing the sector under the Third Schedule may unintentionally push business back towards the undocumented economy instead of expanding the tax base,â€ he said. The PFMA reiterated its readiness to cooperate with the government in strengthening POS integration, digital traceability, and documentation, but stressed that focus should remain on bringing the undocumented sector into the tax net rather than burdening compliant businesses. The PFMA Chairman warned that nearly 75 percent of the sector remains undocumented, making it difficult for compliant businesses to compete under increased regulatory pressure. He urged the prime minister, finance minister, FBR authorities to reconsider the proposal in consultation with stakeholders. Copyright Business Recorder, 2026

Date: 2026-06-17

Details: Published June 17, 2026 Updated about an hour ago By Recorder Report KARACHI: Opposition leader in the Karachi Metropolitan Corporation (KMC), Saifuddin Advocate, has criticised the proposed KMC budget for 2026â€“27, terming it â€œunrealisticâ€ and detached from actual revenue prospects. He warned that inflated estimates and weak utilisation of funds could further aggravate Karachiâ€™s civic problems. In budget proposals submitted to the mayor, municipal commissioner and KMC financial adviser, Saifuddin urged the city administration to frame the fiscal plan strictly in line with realistic income projections rather than increasing its overall size on paper. He said greater empowerment of elected representatives, union committees and council standing committees could help improve revenue collection and oversight of development schemes. He expressed serious concern over the low spending of last yearâ€™s development funds. Of the Rs7.4 billion allocated for CLICK projects, only Rs3.57 billion was spent, while nearly half of the Rs9bn set aside under the District Annual Development Programme remained unused. The opposition leader noted that the previous fiscal yearâ€™s budget stood at around Rs55.5 billion, whereas the proposed outlay for 2026â€“27 has been increased to about Rs60 billion, despite a reduction of nearly Rs7 billion in CLICK-related allocations. He said this reflected an attempt to artificially inflate the budget size. Saifuddin demanded that all KMC development projects should be monitored by the relevant union committees. He also called for revenue generated through Municipal Utility Charges and Tax (MUCT) and marriage hall fees to be spent in consultation with local elected bodies, as earlier promised by the mayor. Pointing out that the council was likely entering its final year, he said roads, sewerage lines and other civic infrastructure were in poor condition across most union committees. He proposed a special development package of Rs100 million for each union committee, with Rs50 million to be provided by the KMC and another Rs50 million by the Sindh government, and spending decisions to be made with local representatives. He further proposed the formation of cross-party oversight committees for major city projects, comprising representatives of all parliamentary groups in the council. Such committees, he said, would ensure transparency, quality control, timely completion of schemes and help curb corruption. Saifuddin also suggested placing graveyards under the administrative control of relevant union committees, with revenue to be shared equally between the KMC and local bodies. He called for council committees to be given oversight and decision-making powers in revenue-generating departments such as advertisements and land management, with 25 percent of the collected revenue allocated to union committees to improve accountability and collections. He stressed that development schemes should be planned and implemented in consultation with union committees to ensure fair distribution of projects across the city. He also demanded that complete details of all tenders, including project locations and costs, be published on the KMC website and displayed at project sites. Questioning revenue projections, Saifuddin noted that last yearâ€™s expected income from Octroi and Zila Tax, grant-in-aid and Sindh government transfers was estimated at Rs28 billion, but actual receipts were only Rs22 billion. Despite this shortfall, the new budget projects Rs38 billion under the same heads without clear justification. He criticised the inclusion of Rs850 million in expected recoveries from K-Electric dues, noting that no such recoveries had been made over the past three years. He also pointed out that KMCâ€™s own-source revenue was projected at Rs12 billion, while actual collections in the previous year stood at only Rs5.7 billion. Saifuddin said no revenue was received last year from betterment charges payable by the Sindh Building Control Authority or from toll tax collected through the excise department. Advertisement revenue also fell far short of targets, with only Rs150 million collected against an expected Rs350 million, despite widespread advertising across the city. He estimated that annual advertisement income should be between Rs700 million and Rs800 million. He added that only Rs250 million was received from the sale of a property against an expected Rs1.4 billion. Concluding, the opposition leader said revenue collection remained weak across almost all departments. He blamed inadequate funding by the Sindh government and poor utilisation of available resources for worsening civic conditions. He also expressed concern that KMC employees had not received outstanding dues despite a Rs2.7 billion provincial bailout package provided for this purpose. Copyright Business Recorder, 2026

Date: 2026-06-17

Details: Published June 17, 2026 Updated about an hour ago By Recorder Report LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) has appreciated the Punjab government for presenting a growth-oriented, development-focused and infrastructure-driven provincial budget 2026-27. In a statement, LCCI President Faheem Ur Rehman Saigol said that the proposed Annual Development Programme reflects a strong commitment towards infrastructure development, connectivity, urban services, irrigation, and public welfare projects. They stated that the infrastructure allocation will significantly contribute to improving roads, bridges, transport systems, and other basic facilities, thereby strengthening economic activity across the province. LCCI President observed that enhanced development spending is expected to provide a positive boost to key industries including construction, cement, steel, engineering, and allied sectors, while also generating new employment opportunities for the people of Punjab. However, he emphasized the importance of timely utilization of development funds and efficient completion of projects to ensure maximum impact. Senior Vice President LCCI Tanveer Ahmed Sheikh and Vice President Khurram Lodhi also appreciated the governmentâ€™s efforts to improve revenue generation, highlighting the ambitious provincial tax revenue target of Rs. 748 billion. They acknowledged that strengthening the tax base through services, property, motor vehicle taxes, and other sources reflects a move towards greater fiscal stability. The LCCI urged the government to focus on documentation of the economy and facilitation of taxpayers to ensure sustainable revenue growth. The LCCI President further said that the projected budget surplus reflects a positive fiscal outlook for the province. However, he urged that surplus resources should be strategically reinvested into productive sectors such as industry, agriculture, SMEs, IT, education, and healthcare to ensure inclusive and long-term economic growth. Copyright Business Recorder, 2026

Date: 2026-06-17

Details: Published June 17, 2026 Updated about 2 hours ago By Sohail Sarfraz ISLAMABAD: To end litigation of trillions in court against taxpayers, National Assembly Standing Committee on Finance Tuesday endorsed Finance Billâ€™s 2026 proposal to create â€œIndependent Case Scrutiny Committeesâ€ in all federal taxes to end filing of frivolous appeals at the High Courts by the Federal Board of Revenue (FBR). Tax authorities informed the committee on Tuesday that it is a practice in the field formations of the FBR to file appeals against the orders of the taxpayers in high courts whether the appeal has legal grounds or not. This is due to fear of NAB, suspension or disciplinary proceedings against the tax officials in case appeals are not filed in higher courts against the taxpayers. To end this practice, Finance Bill 2026 has introduced â€œIndependent Case Scrutiny Committeesâ€ in all federal taxes to end filing of frivolous appeals by the tax department before the High Courts. The Standing Committee on Finance and Revenue, chaired by Syed Naveed Qamar, MNA, met Tuesday at Parliament House, Islamabad, to continue its clause-by-clause consideration of the Finance Bill, 2026. The Committee reviewed a range of proposed amendments relating to customs and sales tax laws, tax administration reforms, penalty regimes, enforcement mechanisms, and measures aimed at improving compliance and dispute resolution. The Committee examined various reform proposals, including the introduction of faceless adjudication and faceless appeals to minimize direct interaction between taxpayers and tax officials, algorithm-based settlement mechanisms for the resolution of tax disputes. The Committee also reviewed amendments to the definition of Tier-1 retailers by removing the condition relating to debit and credit card machines, a proposal for reward-based tax collection for digitally compliant taxpayers, and the establishment of an Independent Scrutiny Committee headed by a retired Judge of the Supreme Court or High Court to determine whether tax litigation should be pursued. The Committee deliberated extensively on a proposal to increase the penalty on terminal operators from Rs. 0.5 million to Rs. 10 million for non-compliance with customs certificates exempting demurrage charges. The Committee Members expressed serious reservations regarding the magnitude of the proposed increase, observing that such a steep penalty could discourage investment, create uncertainty for businesses, and potentially lead to discretionary enforcement practices. Emphasizing the need for proportionality and fairness, the Committee recommended reducing the proposed penalty to Rs. 5 million and establishing an impartial forum or committee to adjudicate disputes, thereby ensuring a balanced approach that protects the interests of both importers and terminal operators. A detailed discussion was also held on the proposal to permit third-party outsourcing of customs auctions. The Committee was informed that the measure was intended to facilitate the disposal of accumulated goods and reduce congestion at ports. FBR Member said that complicated audits of telecom and banking sectors would be done by external audit firms. While acknowledging the need to address operational bottlenecks, Members stressed that transparency, competition, and accountability must remain paramount. The Committee therefore emphasized that all outsourcing arrangements should strictly comply with PPRA rules and recommended the inclusion of pre-qualification criteria for auction houses to safeguard the integrity of the process. The Committee further considered a proposal empowering customs authorities to take possession of non-duty-paid goods seized by other law enforcement agencies without awaiting the conclusion of criminal proceedings. The Committee expressed concern that such a provision could adversely affect ongoing investigations, compromise evidentiary requirements, and interfere with the administration of justice. The Chairman observed that the proposal required further examination and directed that appropriate safeguards be incorporated, including conditions ensuring that any goods disposed of through auction remain traceable and available for judicial proceedings whenever required. While discussing the proposed retailer scheme, Members underscored the importance of understanding its operational framework, enforcement safeguards, technological architecture, and compliance mechanisms before reaching a final decision. The Committee, therefore, directed that a detailed presentation be arranged prior to the next meeting. The Hon. Chairman agreed to allocate dedicated time for a comprehensive briefing to enable informed consideration of the proposal. Committee Members also raised broader concerns regarding the continued reliance on advance taxes, withholding taxes, and minimum tax regimes. It was observed that a significant portion of revenue collection is increasingly dependent upon upfront extraction of taxes rather than assessments based on actual income and profitability. Members emphasized that such practices place undue burdens on businesses and taxpayers, particularly those operating with low profit margins or facing financial difficulties. The Committee would undertake a detailed examination of these issues during the ongoing review of the Finance Bill, with a view to promoting a more equitable, transparent, and growth-oriented taxation framework. Copyright Business Recorder, 2026

Date: 2026-06-17

Details: Published June 17, 2026 Updated about 2 hours ago By Tahir Amin ISLAMABAD: The Senate Standing Committee on Finance on Tuesday accepted a major proposal of the stationery industry to restore sales tax exemption on stationery items from July 1, 2026. The Committee meeting, chaired by Saleem Mandviwalla, continued deliberations on the Finance Bill 2026-27 during its fourth consecutive session at Parliament House, reviewing a wide range of fiscal, trade, industrial and taxation matters aimed at strengthening economic growth, supporting exports and addressing public concerns. Dr. Najeeb Memon, Director General of the Tax Policy Unit at the Ministry of Finance, informed the committee that the International Monetary Fund (IMF) had urged Pakistan to reduce its reliance on sales tax exemptions. He further stated that stationery items do not fall under the category of essential food items and, therefore, do not qualify for sales tax exemption. However, committee members expressed serious concern over the proposed tax on essential educational supplies, including pencils, pens, geometry boxes and other items used by students in schools. Representatives of the Federation of Chambers of Commerce and Industryâ€™s Stationery and Taxation Committee also urged lawmakers to reconsider the proposal and exempt educational materials from taxation. Riyaz-ud-Din, speaking before the committee, called for exemptions on items such as sharpeners, exercise books, glue, writing pads and colour pencils used for educational purposes. He said the government had earlier decided not to impose the full 18 percent sales tax on stationery and argued that any such levy would be inappropriate given its impact on education costs. Members of the committee echoed these concerns, stating that the proposed measure would further increase the cost of education for families already facing financial pressures. The committee recommended that essential educational materials be exempted from the proposed tax to prevent additional financial strain on students and ensure access to affordable learning resources. The committee also examined taxation measures relating to education and charitable institutions. Members discussed proposals aimed at supporting educational access and reviewing existing tax exemption mechanisms. Following consultations with relevant authorities, the committee recommended amendments to the applicable legal provisions to ensure greater transparency, effectiveness and alignment with public interest objectives. Copyright Business Recorder, 2026

Date: 2026-06-17

Details: Published June 17, 2026 Updated about 2 hours ago By Recorder Report LAHORE: Provincial Minister for Information and Culture Azma Bokhari has said that Punjab made a significant financial sacrifice during the budget process by transferring a substantial amount of resources to the federal government. â€œThis naturally created challenges in maintaining a balanced provincial budget. Despite these constraints, the Punjab Revenue Authority achieved record tax collection, setting a new benchmark for revenue generation,â€ Azma said, adding: â€œThe Punjab Government, under the leadership of Chief Minister Maryam Nawaz, has presented its third historic surplus budget that was formulated and presented under exceptionally difficult economic circumstances. On one hand, Pakistanâ€™s economy was affected by global tensions between the United States and Iran, while on the other, the devastating floods of recent years created significant economic challenges.â€ Speaking to the media, Azma Bokhari said that a peace agreement is now moving towards formalization, which is expected to mark a historic milestone for Pakistanâ€™s economic stability, sovereignty, and future growth. Referring to the past, she remarked that there was a time when even calls from Pakistanâ€™s Prime Minister were ignored internationally. Today, however, owing to the successful policies of Maryam Nawaz and the current government, the world is looking toward Pakistan with renewed confidence and optimism. Highlighting key budgetary measures, the minister stated that PRAâ€™s tax target has now been increased further so that Punjab can finance more of its development projects and public initiatives through its own resources. The budget places special emphasis on the social sector, including social welfare, farmers, and underprivileged segments of society. Azma Bokhari noted that petroleum prices are witnessing a noticeable decline, which is expected to help eliminate artificial inflation in the country. She emphasized that during the last two years, the Punjab Government, under Chief Minister Maryam Nawaz, successfully prevented excessive price hikes and profiteering. She further stated that efforts are underway to broaden the tax net, enabling the province to move steadily toward greater economic self-reliance. Praising the Chief Ministerâ€™s dedication, Azma Bokhari said that constitutionally, Maryam Nawaz had the option of not attending the Assembly session due to her health condition, and there are several precedents for such an arrangement. However, despite serious health issues, the Chief Minister personally attended the session, supervised the budget proceedings, and fulfilled her responsibility to represent the people. Responding to remarks made by Ali Haider Gilani, Azma Bokhari said â€œ Multan already benefits from its Metro Bus system and that the Punjab Government is now introducing 1,100 new buses across the province. Multan will receive its fair share of these vehicles.â€ She urged Ali Haider Gilani to set aside political prejudice and acknowledge the governmentâ€™s transformative initiatives in the public transport sector. She also revealed that CM Maryam Nawaz will soon take a final and balanced decision regarding the policy on early market closures. Azma Bokhari recalled the flood crisis, describing it as a major test for the government. She said that ministers and administrative officials worked tirelessly on the ground, serving not as bureaucrats but as dedicated workers to provide relief to affected communities. In a light-hearted remark, she thanked the opposition for the peaceful conduct of the budget session, saying she appreciated opposition leaders for listening to the entire budget without disruption and maintaining decorum throughout the proceedings. Concluding her remarks, Azma Bokhari reaffirmed that budgets are always prepared according to the best available projections and resources. She maintained that the Punjab Government has once again presented a model surplus budget and pledged that all fiscal reserves and surplus funds generated under this budget will be utilized exclusively for the welfare and development of the people of Punjab. Copyright Business Recorder, 2026

Date: 2026-06-17

Details: Published June 17, 2026 Updated about 2 hours ago By Saeed Akhtar Baloch LAHORE: The Punjab government presented its annual budget for the fiscal year 2026-27 in the Provincial Assembly, with a projected total outlay of Rs 5.903 trillion and an allocation of Rs 752 billion under the Annual Development Programme (ADP), placing special emphasis on the development of social sector, health, education and economic growth. Finance Minister Mujtaba Shuja-ur-Rehman presented the budget in the House amid protests by opposition members, who termed it an anti-people budget. Chief Minister Maryam Nawaz was also present during the session. Highlighting the salient features of the budget, the finance minister said that significant increases had been made in allocations for the health, education, and social sectors. He said the total outlay of Rs 5.903 trillion for the fiscal year 2026-27 marks a 10.7 percent increase over the current fiscal yearâ€™s budget. The finance minister stated that total current expenditures have been estimated at Rs1.962 trillion, reflecting a 3.1 percent decrease compared to the ongoing fiscal year. He attributed the reduction to the governmentâ€™s austerity and expenditure rationalization policies. The budget proposes a 7 percent increase in salaries for government employees. Despite the pay raise, salary expenditures are expected to increase by only 1.4 percent, reaching Rs 638.93 billion, which the minister credited to the governmentâ€™s rightsizing policy. Pension payments for retired government employees are proposed to increase by 3.5 percent, bringing total pension expenditures to Rs 500.12 billion. To strengthen grassroots governance and public service delivery, the government has proposed Rs 803.88 billion for local governments, under the Provincial Finance Commission (PFC) Award, representing a 5.2 percent increase. Service delivery expenditure has been estimated at Rs 783.62 billion, including Rs578.62 billion for operational expenses of institutions, which is 5.1 percent lower than the previous fiscal year. Capital expenditures worth Rs679.01 billion have also been proposed. The finance minister said the government had maintained fiscal discipline despite economic challenges, enabling the allocation of Rs752 billion for development projects through improved revenue generation, efficient resource utilization and expenditure rationalization. Under the National Finance Commission (NFC) Award, Punjab is expected to receive Rs4.391 trillion from the federal government, an increase of 8.1 percent over the outgoing fiscal year. The province has also set an ambitious target of Rs1.210 trillion in own-source revenues. The Punjab Revenue Authority (PRA) has been assigned a revenue target of Rs528.5 billion, a 55.4 percent increase from the current year. The Board of Revenue is expected to collect Rs86.19 billion, while the Excise and Taxation Department has been given a target of Rs124 billion, representing a 77 percent increase. Non-tax revenues are projected at Rs461.17 billion, up 52 percent from the current fiscal year. The minister said these targets would strengthen the provinceâ€™s financial self-reliance and ensure the availability of resources for development priorities. The government has proposed Rs750 billion for the education sector in FY2026-27, including Rs63.3 billion for development projects and Rs686.8 billion for non-development expenditures. Education will account for more than 15 percent of the total provincial budget. The allocation aims to improve educational infrastructure, promote modern skills, expand digital facilities and enhance access to quality education. Under the Chief Minister Punjab Laptop Programme, a project worth Rs27 billion has been launched to distribute 110,000 modern laptops. So far, 42,000 laptops have already been distributed. Additionally, Rs15 billion has been allocated for the Honhaar Scholarship Programme, benefiting approximately 108,000 students. The health sector has been allocated Rs500.62 billion, comprising Rs424.32 billion in non-development expenditures and Rs76.3 billion for development projects. The allocation is 10 percent higher than the current yearâ€™s budget. Construction of the Nawaz Sharif Institute of Cancer Treatment and Research, a project costing Rs75 billion, is continuing with Rs20 billion allocated for the coming fiscal year. The government also plans to begin work on the Nawaz Sharif Medical District, a Rs169 billion initiative that will include a childrenâ€™s hospital, orthopedic and surgical hospital, center of excellence and a burn unit. To enhance exports and value addition, the government plans to establish plug-and-play factory parks for the garments sector at a cost of Rs13.3 billion. The initiative is expected to generate an additional $300 million in annual exports, create 20,000 jobs, and facilitate the establishment of 40 new garment units. Agriculture, livestock and aquaculture sectors have been allocated Rs133.54 billion in development and non-development spending. Over the next three years, the government plans to invest approximately Rs482 billion under economic transformation initiatives focused on agricultural value addition, livestock development and aquaculture. Copyright Business Recorder, 2026

Date: 2026-06-17

Details: Published June 17, 2026 Updated about 2 hours ago By Tahir Amin ISLAMABAD: The 2026-27 budgetâ€™s interest-to-revenue ratio, projected at 39.1 percent, is substantially higher than the median ratio of 12.1 percent for â€˜Bâ€™-rated peers. This limits fiscal flexibility and crowds out priority spending, constituting a key weakness in Pakistanâ€™s â€˜B-â€™ sovereign rating with a Stable Outlook, Fitch Ratings said. The ratings agency further noted that Pakistanâ€™s overall fiscal deficit, projected at 3.6 percent of GDP in fiscal year 2027, also remains higher than the median deficit of 3 percent for â€˜Bâ€™-rated countries. Fitch Ratings sees Pakistanâ€™s budget for the fiscal year ending 30 June 2027 (FY27) as maintaining a clear commitment to fiscal discipline under the International Monetary Fund (IMF) Extended Fund Facility by targeting a primary surplus of 2 percent of GDP and an overall deficit of 3.6 percent of GDP. â€œThis follows a strong fiscal year 2026 performance, with a projected primary surplus of 2.5 percent of GDP, driven by aggressive spending cuts and a provincial surplus of 1.1 percent of GDP, exceeding our expectationsâ€, the ratings agency added. Fitch says this policy momentum improves near-term fiscal prospects, but Pakistan remains relatively vulnerable to inflation and under-performance on tax collection.The ratings agency stated that â€œOur fiscal projections remain more cautious than those of the government, illustrating risks around the key targets. Achieving the fiscal year 2027 primary surplus will depend on sustained revenue performance relative to historical trends, which we view as challenging given structural weaknesses in tax administration and a limited pipeline of new tax measuresâ€, it added. Federal tax collections in fiscal year 2026 are officially projected to be 0.7pp of GDP below target, underscoring persistent challenges in meeting ambitious revenue goals. The fiscal year 2027 tax revenue target (10.6 percent of GDP) would be a record, building on improved collection in fiscal year 2026. Non-tax revenues, including profit transfers from the State Bank of Pakistan, are, meanwhile, set to decline in fiscal year 2027. The reliance on a large provincial surplus is another source of uncertainty, given historical variability and coordination challenges between federal and provincial governments. The ratings agency stated that amid revenue challenges, fiscal consolidation has relied heavily on expenditure compression, particularly cuts to capital spending, as in FY26. While this has supported short-term deficit reduction, it will be difficult to sustain as a medium-term strategy. Persistently low capex may weigh on medium-term economic growth, limit future revenue mobilisation and complicate debt dynamics. The scope for further reductions is narrowing, heightening the trade-off between fiscal adjustment and growth as spending pressures rise from a suppressed base. It further stated that interest costs remain structurally elevated due to Pakistanâ€™s large stock of short-maturity domestic debt and high market yields. A rising policy rate as inflation rises due to higher world energy costs compounds the risk of overspending on interest payments. On the external side, Pakistanâ€™s recent US dollar bond issuance at just under 7 percent yield demonstrates improved access to international capital markets and bolsters near-term liquidity. Pakistan also issued a panda bond in 2026, further marking improved external market access. However, maturities have been short (three years), and medium-term external refinancing risks and structural vulnerabilities in Pakistanâ€™s debt profile remain. Continued dependence on multilateral funding and financial assistance from bilateral partnersâ€”particularly from China and the Gulf Cooperation Councilâ€”leaves Pakistan exposed to shifts in creditor confidence and FX reserve adequacy. Fiscal consolidation remains dependent on sustained primary surpluses and improved revenue performance, with the credibility of budget targets, sustainability of provincial surpluses, and the developments around growth and interest costs central to the success of Pakistanâ€™s IMF programme and our rating consideration, Fitch Ratings added. Copyright Business Recorder, 2026

Date: 2026-06-17

Details: Published June 17, 2026 Updated about 2 hours ago By BR Research Budget FY27 is broadly positive for Pakistanâ€™s IT exporters but calling it a technology budget would be an overstatement. Its biggest contribution is not a bold new digital growth programme, but the continuation of an existing tax concession that gives export-oriented companies some much-needed certainty. The key measure is the extension of the 0.25 percent Final Tax Regime on the export proceeds of registered IT and IT-enabled services companies until June 2029. The concession was due to expire in June 2026. Its extension removes an immediate source of uncertainty and gives companies another three years to plan contracts, set prices and expand overseas without worrying about a sudden increase in their tax burden. For Pakistani technology companies competing globally on multi-year foreign-currency contracts, tax certainty protects margins, pricing, and competitiveness, making the extended concession more valuable than a short-lived subsidy. Larger technology companies may also benefit from the reduction in super tax. The government has abolished super tax for companies earning up to Rs500 million and reduced the maximum rate from 10 percent to 8 percent for companies above that level. Banks, exploration and production companies and fertiliser manufacturers have been excluded from the relief, but technology companies have not. The broader exporter package is also supportive. The government has removed the 1 percent advance tax on export proceeds while increasing withholding tax from 1 percent to 1.25 percent. Since the advance tax was adjustable, exporters often had to wait for settlement or refunds, tying up their cash in the process. Its removal should improve cash flows. The exact impact on IT exporters will depend on how this measure is applied alongside their separate 0.25 percent final tax regime. Still, the broader message is encouraging. The picture becomes less clear once one moves beyond established software exporters. For larger e-commerce sellers with annual revenues above Rs200 million, tax deducted on online marketplace transactions will now be adjustable. This should reduce the risk of the deduction becoming an extra cost, but smaller online businesses will benefit less as many still face problems with registration, bookkeeping, and access to finance. Banks will also deduct 5 percent withholding tax on income received by digital creators and social-media influencers from platforms such as YouTube, Facebook, Instagram, and TikTok. Bringing online income into the tax net is reasonable, but without a simple refund or adjustment process, the deduction could hurt the cash flow of smaller creators and freelancers with irregular earnings. Advance tax on mobile-phone distributors has also been increased from 0.25 percent to 0.5 percent. Although the tax is adjustable and may have little long-term impact on large distributors, it could still raise working-capital costs for smaller businesses operating on thin margins. The federal development programme allocates Rs20 billion (although modest within a federal PSDP of Rs1 trillion) to the Information Technology and Telecom Division. This provides some room for public-sector technology, connectivity, and digitalisation projects. The budget offers little direct response to other constraints of the sector like no relief for broadband expansion, spectrum investment, data centres, cloud infrastructure, cybersecurity etc.Extending a concessionary tax rate can preserve momentum, but it cannot by itself move the industry from outsourcing and freelancing towards higher-value software products, intellectual property, artificial intelligence, cloud services, and regional technology platforms. The government expects total services exports to rise from $10.9 billion in FY26 to $11.3 billion in FY27, supported mostly by continued IT-sector growth. Its progress, but it is hardly a major leap. The modest increase (3.7%) suggests that the budget is designed to protect the existing trend rather than trigger a new phase of expansion. Overall, Budget FY27 is positive for listed and export-oriented IT companies, mixed for e-commerce and digital creators, and largely neutral for telecom and communications. The sector has received tax certainty and some breathing space. What it has not received is a credible roadmap for turning Pakistan from a low-cost technology-services provider into a deeper, investment-led, and product-oriented digital economy.

Date: 2026-06-16

Details: Published June 16, 2026 Updated about 3 hours ago By Nadeem ul Haque Pakistan has turned the budget into an annual suspense drama. Businesses wait. Markets speculate. Consultants guess. Television studios ask who will be taxed, spared, punished or rewarded. For weeks, the economy pauses to read signals from Islamabad. This is not how a serious economy should run. A budget should not be the annual moment when government reinvents economic policy. It should be a routine fiscal statement, showing how taxes finance a policy direction already announced, debated, legislated and institutionalized. Policy should come first. Budget should finance it. In Pakistan, the order has been reversed. The budget has become the policy. This is why uncertainty never ends. Firms do not know next yearâ€™s tax treatment. Investors do not know whether incentives will survive. Exporters do not know whether refunds, energy prices or import rules will change. Salaried taxpayers wait to be squeezed again. Retailers expect another scheme. Real estate waits for another bargain. Everyone watches the budget because no one trusts the policy path. Everyone discusses the fiscal deficit. Few discuss the uncertainty deficit. When policy changes every June, investment becomes speculation. Business planning becomes budget forecasting. Instead of thinking about productivity, technology, expansion and exports, firms guess what the state will do next. This hidden tax on growth does not appear in the budget, but every serious enterprise pays it. The government speaks of transformation, exports, equity, energy, environment, digital development, stability, investment, productivity and growth. These words are fine. But a vision is not policy unless translated into rules, institutions, priorities, budgets and discipline. If the budget contradicts the vision, the vision is decoration. A government that wants exports cannot surprise exporters every year. A government that wants investment cannot keep changing tax rules. A government that wants documentation cannot harass the documented while bargaining with the undocumented. A government that wants productivity cannot keep feeding low-return projects. A government that wants energy reform cannot treat circular debt as accounting. A government that wants private sector growth cannot keep expanding the discretionary state. This is where the EPBD Shadow Budget is useful. Its value lies less in its exact numbers and more in the questions it raises. It shifts debate from revenue extraction toward growth, YouTube expenditure control, SOEs, energy, debt, taxation, parliamentary scrutiny and private investment. It recognizes that Pakistanâ€™s fiscal crisis is not simply a revenue problem. It is a state problem. For too long, the formal taxpayer has been treated as the residual claimant for state failure. SOEs lose money; the taxpayer pays. Energy governance fails; the taxpayer pays. Pensions rise; the taxpayer pays. PSDP becomes a political shopping list; the taxpayer pays. Provinces avoid their own tax effort; the taxpayer pays. This is extraction without reform. EPBD is right to call for tax rationalisation, expenditure reform, SOE restructuring, Treasury Single Account implementation, pension reform, subsidy rationalisation, PSDP cleansing and energy reform. These are not side issues. They are the reform agenda. Without them, every budget merely finances an unreformed state. But EPBD also reveals the weakness of Pakistanâ€™s reform culture. It lists the right reforms but does not explain the process of reform. Who will do it? Through what law? With what information? Against whose resistance? With what compensation for those who lose? These questions matter because reform is not arithmetic. It is political economy. Tax reform requires evidence on revenue loss, behaviour and enforcement capacity. Compliance reform requires protection against FBR discretion. Expenditure control requires identifying waste and confronting beneficiaries. SOE reform creates losers in ministries, boards, unions and procurement networks. Pension reform affects powerful insiders. NFC reform requires a federal bargain. Energy reform threatens protected interests. PSDP cleansing disturbs politicians, contractors and departments. Banking reform affects finance. This is the deeper political economy that EPBD and similar efforts must examine. Pakistan has remained trapped in repeated IMF programmes because stabilization has never become structural reform. Each crisis produces another package, another donor loan, another committee, another project office and another promise. The state expands even when every diagnosis says it must shrink. To my mind the lynchpin reform is the civil service monopolyâ€”something that most efforts such as EPDB miss. Pakistanâ€™s colonial, secretary-led state controls policy, regulation, appointments, boards, authorities, project offices and implementation. It writes rules, manages files, sits on committees, approves projects, controls budgets, negotiates with donors, supervises regulators and then claims to reform the system it dominates. It is both player and referee. This monopoly is driven and supported by the lenders who control our policy. Project offices, special units, authorities and reform cells become a parallel government, usually cleared, chaired, staffed or controlled by the same administrative structure. But the underlying power structure remains untouched. No reform agenda can succeed without confronting this. The secretary-led state will not voluntarily close its own agencies, discipline SOEs, professionalize boards, devolve authority, empower markets, release cities, respect universities or surrender budgetary discretion. It will produce reports, invite consultants and create reform cells. But it will not end its monopoly. The way out is to end the budget circus and identify the lynchpin reform. The budget should become boring. That would be progress. A boring budget means businesses know the tax path. Investors know the policy direction. Provinces know their responsibilities. Citizens know what services are being financed. Ministries know old schemes must be evaluated before new ones are added. The private sector knows June will not overturn January. Pakistan must stop using the budget to announce a new economy every year. Use it to show how taxes finance a stable, credible and already declared reform path. Until then, businesses will speculate, media will dramatize, consultants will guess, donors will lend, committees will meet, and the economy will wait for Islamabadâ€™s annual surprise. Copyright Business Recorder, 2026

Date: 2026-06-16

Details: Published June 16, 2026 Updated about 2 hours ago By Sohail Sarfraz ISLAMABAD: The federal government Monday categorically refused to share revenue impact of taxation and relief measures taken in budget (2026-27) with the members of the National Assembly Standing Committee on Finance. The tax relief provided to the salaried class, including the abolition and gradual reduction of super tax, as well as a slashing of tax rates for exporters and real estate transactions, is expected to have a revenue impact of approximately Rs 360 billion for the next fiscal year. When MNA Sharmila Farooqi and Hina Rabbani Khar, belonging to PPP, insisted upon for sharing the exact revenue impact and inquired whether it stood at Rs 360 billion, the Chairman of the NA Panel on Finance said that it seemed quite close to the figure shared by the government with him on the pretext that it would not be shared publicly when the media is covering the proceedings of the committee. Secretary, Ministry of Finance informed National Assembly Standing Committee on Finance that the revenue impact of the relief measures has been shared with the Chairman of committee Syed Naveed Qamar. The committee members can directly obtain figures of revenue impact from the Chairman of the NA Finance Committee. The numbers cannot be shared publicly. However, the committee can arrange an in-camera briefing on the revenue impact for the members of the committee, he added. Finance Secretary further informed the committee that the government cannot disclose the total amount of relief figures at this stage. The committee member MNA Hina Rabbani Khar criticized the governmentâ€™s position, saying it should clearly state if it did not want to provide details to the committee. The issue came to the light when committee members inquired about the revenue impact of relief measures from officials of the Federal Board of Revenue (FBR) and Ministry of Finance. Both the Ministry of Finance and senior officials of the FBR were not ready to share the revenue impact chart of relief and policy measures taken in budget (2026-27). During a presentation on Finance Bill 2026, a senior FBR official informed the committee about the relief provided to the salaried class in budget (2026-27). The committee members asked about the exact revenue impact of the relief provided to the salaried class. The FBR official informed that the government has taken 11 relief measures, 10 tax rationalization measures and five administrative measures through Finance Bill 2026. The FBR official responded that the numbers have been estimated based on last yearâ€™s contribution of salaried class. We assumed that the last year tax relief of Rs 57 billion would be provided to the salaried individuals, but the actual figure of collection was much higher at Rs 625 billion against the estimated amount of Rs 500 billion. Similarly, this year a tax relief of around Rs 55 billion has been estimated for the salaried class, but the figures are merely based on assumptions. When the FBR official shared the revenue impact of proposed relief provided to the salaried class for 2026-27, Naveed Qamar pointed out that the FBR is the custodian of the revenue impact figures. MNA Hina Rabbani Khar stated that the government can simply refuse to share numbers with us, but do not divert discussion by saying that figures are based on assumptions. The annual budget estimates are always based on last year data, economic indicators, figures and assumptions, she added. Chairman of committee Syed Naveed Qamar intervened that the revenue impact of the tax relief measures is very big. However, the government is still in the process of negotiations with the International Monetary Fund (IMF). â€œI have the numbers, but they (government functionaries) are still in the process of negotiationsâ€, Qamar added. Syed Naveed Qamar said that the government has negotiated with the IMF in total isolation. You (government) came here to the committee after finalizing terms and conditions with the fund. If you involve finance committee members, it will ease the government position keeping in view public interest. â€œDo not isolate yourselfâ€, Chairman of committee remarked. Other committee members stated that they have the right to know about the revenue impact of relief provided to the general masses and even the public needs to know about these numbers, they added. Copyright Business Recorder, 2026

Date: 2026-06-16

Details: Published June 16, 2026 Updated about 2 hours ago By Sohail Sarfraz ISLAMABAD: Minister of State for Finance Bilal Azhar Kayani said Monday the main focus of the federal budget (2026-27) is to reduce incidence of taxes on overburdened segments of society, particularly salaried class, within the International Monetary Fund (IMF) programme. Minister of State for Finance was briefing the National Assembly Standing Committee on Finance here on Monday on key features of the Finance Bill 2026. According to him, despite all kinds of fiscal constraints, the government has been able to provide relief to the salaried class. Last year, the government provided significant relief to the salaried individuals. This year further relief has been provided in different salary slabs along with abolition of surcharge. The Committee was informed that the relief package includes the abolition of taxes on contraceptives and selected women-related products, withdrawal of Capital Value Tax on foreign assets, exemption of sales tax for the shipping industry, and tax incentives for the modernization and upgrading of Brownfield refineries. These measures are aimed at stimulating investment, promoting exports, supporting economic activity, and easing the overall tax burden on key sectors of the economy. The Committee was also briefed on rationalization measures, including expansion of the Third Schedule, introduction of a fixed tax regime for small retailers, revision of tax treatment of coupon-washing transactions, elimination of tax arbitrage between industrial and commercial importers, enhancement of penalties for non-compliance, rationalization of withholding taxes on services, imposition of duties on luxury vehicles, and measures to curb fuel adulteration through adjustable Federal Excise Duty on solvents and related products. Syed Naveed Qamar, Chairman expressed serious concerns regarding the potential revenue implications of the proposed concessions and the adequacy of efforts to broaden the tax base. The Chair sought clarity on whether the anticipated revenue losses had been adequately quantified and requested details of the Governmentâ€™s strategy to offset any resulting fiscal shortfall. Minister of State for Finance and senior officials of the Federal Board of Revenue (FBR) briefed on the proposed tax measures, fiscal reforms, and revenue initiatives contained in the Federal Budget FY 2026â€“27. The Committee also deliberated on relief for salaried individuals in the context of persistent inflation and rising living costs, and sought clarification on whether the proposed tax slab revisions would provide meaningful relief to middle-income groups. Copyright Business Recorder, 2026

Date: 2026-06-16

Details: Published June 16, 2026 Updated about 3 hours ago By Zulfiqar Ahmad ISLAMABAD: Tobacco growers, traders and industry representatives on Monday demanded the immediate withdrawal of Rs390 per kilogram export tax on tobacco and called for a comprehensive review of the sectorâ€™s taxation policy, warning that current measures are pushing farmers into severe financial distress. Speaking at a press conference, the group â€“ joined by senior PTI leaders Asad Qaiser, Shahram Tarakai and others â€“ said the issue was not political but an economic one affecting thousands of farming families, particularly in Swabi, which produces over 70 percent of the countryâ€™s tobacco crop. Qaiser said he had no business interest in the tobacco trade but felt compelled to speak for farmers facing â€œextreme hardship.â€ He criticised the taxation regime, arguing it had failed to achieve its fiscal objectives. According to him, government revenue from the sector had declined from Rs294 billion to Rs165 billion after higher taxes were imposed, calling the policy ineffective. He further argued that excessive taxation was harming growers and local dealers while strengthening monopolistic market structures. He warned that he, along with lawmaker Shahram Tarakai and other political leaders from Khyber Pakhtunkhwa, would pursue the matter through legal forums if required. While condemning tobacco smuggling, he said enforcement responsibility lay with federal and provincial authorities and called for more practical anti-smuggling measures. Tarakai said he had repeatedly raised proposals with the government but claimed tobacco growers and the domestic industry were still facing â€œdiscriminatoryâ€ policies. He called for a balanced taxation system in which small businesses are taxed less and large corporations more, arguing current policy contradicted this principle. He also alleged that two multinational companies had gained dominant control of the sector. Referring to his time in government, he said he had previously proposed Rs10 per unit tobacco levy to improve balance in the industry. He urged authorities to reduce the tax burden and adopt â€œnational interestâ€ policies, saying political representatives across parties were aligned on the issue. Industry representative Ayaz Khan said growers were suffering declining returns despite inflation. He claimed tobacco prices had dropped, with the current crop being purchased at rates around Rs180 per kilogram lower than last year. He also alleged that local companies were being sidelined as multinational firms expanded their market share, resulting in cancelled domestic agreements. He criticised the Pakistan Tobacco Board for weak regulatory enforcement, saying uncertainty was affecting both farmers and buyers. He added that although tobacco exports had increased by 645 percent, government policies were still discouraging exports and weakening competitiveness. He stressed that growers were not opposing taxation on cigarettes, but objected to measures they believed were harming farmers and export potential. Participants also opposed a proposed minimum indicative price (MIP) of Rs525 per kilogram for Virginia tobacco in the 2026-27 budget, urging instead that prices reflect production costs, inflation, and farmer incomes. They called on multinational companies to increase procurement of local tobacco to stabilise the market and ensure fair pricing. They also demanded a third tier in the tobacco taxation structure to support domestic industry, restoration of suspended contracts, and immediate clearance of outstanding payments to growers and dealers. The group urged the Federal Board of Revenue (FBR) to halt what they described as unnecessary raids and interference in business operations, and called on provincial and district authorities to avoid targeting warehouses and traders. Copyright Business Recorder, 2026

Date: 2026-06-16

Details: Published June 16, 2026 Updated about 3 hours ago By Press Release KARACHI: The Policy Research and Advisory Council (PRAC) has acknowledged several progressive measures in the Federal Budget for Fiscal Year 2026-27, while raising critical concerns regarding fiscal sustainability, stagnant development spending, and the mounting debt servicing burden threatening Pakistanâ€™s economic outlook. PRAC Chairman Mohammad Younus Dagha welcomed the elimination of Super Tax across several slabs for businesses earning between PKR 150 million and PKR 500 million, with the maximum rate capped at 8 percent for higher income tiers, noting that this would enhance liquidity and support investment. He similarly commended the reduction in combined advance and minimum income tax on export revenues from 2.0 percent to 1.25 percent, alongside the extension of the concessional Export Refinance Scheme at 4.5 percent, backed by PKR 88 billion â€” a timely intervention to ease working capital pressures and sustain export competitiveness amid elevated financing costs. Mohammad Younus Dagha also welcomed the extension of the 0.25 percent Final Tax Regime for IT and digital exporters through June 30, 2029, describing it as an important signal of policy continuity for Pakistanâ€™s expanding digital economy, and acknowledged the budgetâ€™s emphasis on digital payments, financial inclusion, targeted farmer financing, climate-resilient housing, and green mobility, provided these initiatives are implemented transparently with measurable outcomes. Despite these positives, PRAC expressed concern over the limited relief extended to the salaried class. While selective tax rate reductions and abolition of the 9 percent surcharge are welcome, the minimum taxable threshold remains unchanged at PKR 600,000. Against renewed inflationary pressures, rising utility costs, and a projected 12 percent increase in Petroleum Development Levy collections to PKR 1.68 trillion, lower-income salaried workers may face additional burden through higher transport and essential commodity costs â€” despite already belonging to the documented taxpayer base. PRACâ€™s most serious reservations concern the budgetâ€™s failure to address Pakistanâ€™s core fiscal vulnerabilities. Debt servicing obligations budgeted at PKR 8,054 billion constitute 68.5 percent of net federal revenues, while unfunded pension liabilities have reached PKR 1,169 billion. These fixed obligations critically constrain fiscal space for development and social spending. The Council stressed that sustainable consolidation requires expenditure rationalisation, tax base expansion, pension reform, and restructuring of loss-making state-owned enterprises â€” none substantively addressed in the current budget. The Public Sector Development Programme, capped at PKR 1,000 billion, also drew concern. Adjusted for inflation, this represents a contraction in real development spending, risking further deterioration across transport, logistics, urban services, and climate resilience. Mr. Dagha stressed that public investment must be protected and directed toward high-impact projects advancing productivity, exports, and employment. PRAC cautioned against the sharp reduction in withholding tax on international card transactions from 5.0 percent to 0.5 percent, warning it could pressure foreign exchange reserves by encouraging non-essential dollar outflows. On retail taxation, the Council warned that the Fixed Tax Asaan Scheme, without phased POS integration and robust verification, risks misuse by larger businesses seeking to circumvent effective compliance â€” undermining its documentation objectives. The Council urged stronger measures supporting industrial growth, export competitiveness, and productive investment, emphasising that Pakistanâ€™s economic policy must transition from short-term fiscal balancing to a sustainable growth model anchored in exports, investment, innovation, and institutional reform. PRAC concluded that while Budget 2026-27 contains constructive measures across several sectors, its effectiveness will ultimately depend on disciplined implementation and the political will to pursue the structural reforms necessary to restore fiscal credibility and long-term economic stability. Copyright Business Recorder, 2026

Date: 2026-06-16

Details: Published June 16, 2026 Updated about 3 hours ago By Recorder Report KARACHI: Chairman of the Pakistan Chemicals and Dyes Merchants Association (PCDMA), Salim Valimuhammad, has said the association had strongly advocated the abolition of the Export Facilitation Scheme (EFS), but the government chose to retain the scheme without introducing safeguards against its misuse. According to him, the continuation of EFS will further widen the disparity between industrial and commercial importers. Expressed disappointment over the Federal Budget 2026-27, stating that the government has ignored key proposals submitted by commercial importers and failed to address longstanding concerns of the trading community, he pointed out that a significant number of goods imported under industrial concessions are allegedly finding their way into the open market. He said certain importers use industrial status to bring in raw materials and other products under preferential treatment and subsequently sell them commercially, creating unfair competition for legitimate commercial importers who pay full customs duties and taxes. â€œThis practice not only causes substantial financial losses to commercial importers but also deprives the national exchequer of much-needed revenue,â€ he said. The PCDMA chairman maintained that while commercial importers are required to comply with all tax and duty obligations, industrial importers benefiting from various exemptions and concessions often operate without adequate oversight. He stressed that the absence of an effective monitoring mechanism allows misuse of facilities intended solely for industrial production. Commenting on the budgetâ€™s tax measures, he said relief had been extended to the salaried class, but the broader business community and trading sector had received little to no meaningful support. He noted that high tax rates and the overall tax burden on businesses remain largely unchanged. â€œThe budget is not attractive for traders and does not provide the incentives required to stimulate commercial activity,â€ he remarked. Salim Valimuhammad urged the government to establish a robust system of checks and balances for industrial imports to ensure that concessionary schemes are used strictly for their intended purpose. He emphasized that providing equal opportunities and a level playing field for all stakeholders is essential for sustainable economic growth. He warned that unless the government addresses market distortions, tax disparities and misuse of import concessions, the commercial importing sector will continue to face mounting challenges, with adverse consequences for business activity, and tax collection. Copyright Business Recorder, 2026

Date: 2026-06-16

Details: Published June 16, 2026 Updated about 3 hours ago By Recorder Report KARACHI: Experts have called for long-term policy consistency, stronger infrastructure and increased investment in research to accelerate the growth of Pakistanâ€™s electric vehicle (EV) industry, during a webinar on the federal budget 2026-27 organised by Indus Consortium. The webinar, titled â€œBudget 2026-27: What It Means for Pakistanâ€™s EV Futureâ€, brought together policy experts and industry stakeholders to review the impact of the budget on the countryâ€™s transition towards cleaner transport. Yasir Hussain, Director of the Climate Action Centre (CAC) said fears of higher taxes on new energy vehicles had not materialised, as the government had left NEVP-related taxes unchanged. However, taxes on luxury vehicles worth more than Rs20 million had been increased. He said subsidies for electric two and three-wheelers would continue and added that EV bike sales had increased by 61 per cent following the Hormuz developments. He also revealed that two battery manufacturing plants were currently under development in Karachi, signaling growing local investment in the sector. Dr Aazir Khan, Director of the Integrated Engineering Centre of Excellence (IECE) at the University of Lahore, described the federal budget as a stabilisation budget with a fiscal deficit of Rs7 trillion. He said EV subsidies remained limited despite an increase in grants and development spending. He also highlighted the need for greater investment in electricity grid stabilisation, warning that expanding EV adoption would place additional demand on the power network. He said the budget reflected a stronger focus on localisation, noting that customs duties on completely built units (CBUs) remained in place. Saif Muhammad Shah, Senior Research Associate at the FPCCI, said the one-year incentive framework could create uncertainty for investors. He suggested extending the policy horizon to three to five years to provide greater confidence for businesses planning investments in the EV sector. He also called for greater investment in EV research and development, arguing that the current speed and range of electric bikes needed improvement. Shah also stressed the need for charging infrastructure development and a dedicated policy for heavy-duty vehicles, which account for a significant share of transport-related emissions. Manager Programs Indus Consortium, Dr Majid Bilal, and board member Jamshaid Farid also addressed the webinar. Copyright Business Recorder, 2026

Date: 2026-06-15

Details: Published June 15, 2026 Updated about 5 hours ago By Dr Ikramul Haq Pakistanâ€™s economic debate with the release of Economic Survey 2025-26 and federal budget for 2026-27 has again been reduced to a familiar quarrel: more taxes, more loans, more austerity, more conditions by the International Monetary Fund (IMF). Missing from this noise is a simple principle understood by every prudent household, farmer, trader and industrialist: in hardship, first reduce waste, live within means, stop borrowing for consumption, and then work hard to repay what is owed. Borrowing is not immoral or uneconomic in itself. Borrowing to create productive capacity can be wise. Borrowing to pay interest on earlier expensive loans is slow suicide. This distinction has disappeared from Pakistanâ€™s fiscal policy. A country may legitimately borrow for dams, railways, ports, universities, hospitals, technology, irrigation, climate resilience and reliable energy. Long-term low-rate loans for such purposes create assets. These assets raise productivity, expand incomes, improve social indicators and generate future tax capacity. Debt then becomes a bridge to development. Pakistanâ€™s tragedy is different. Much of its borrowing now finances debt servicing, current expenditure, losses of state-owned enterprises, circular debt, subsidies, administrative sprawl and survival of an elite rentier order. New debt does not sufficiently create new productive capacity. It merely keeps yesterdayâ€™s liabilities alive until tomorrowâ€™s loan arrives. Official fiscal operations of the Ministry of Finance tell this story year after year. Interest payments have become the largest federal expenditure. Development spending is treated as residual. The Public Sector Development Programme (PSDP) remains compressed while mark-up payments grow. The federal government celebrates primary surpluses, but the overall fiscal deficit survives because debt servicing eats the budget before development begins. This is not an accident. It is the result of a wrong economic model. Pakistanâ€™s rulers have followed the economics of postponement. When revenue falls short, borrow. When debt servicing rises, borrow more. When creditors demand adjustment, tax the already taxed. When development is squeezed, cut PSDP. When provinces need resources for education, health and local services, create federal levies outside the divisible pool. When rentier sectors resist taxation, protect them. When loss-making state enterprises bleed, refinance them. When the next crisis arrives, call it unavoidable. Even no household can survive this way. No business can survive this way. No state can survive this way indefinitely. The first rule of fiscal recovery is discipline during hardship. It does not mean blind austerity. It means distinguishing between expenditure that sustains life and capacity, and expenditure that sustains privilege. Schools, hospitals, water, sanitation, climate resilience, agriculture productivity, digital infrastructure and justice delivery are not waste. Multiple ministries doing devolved provincial functions, subsidies for inefficiency, guaranteed returns to favoured sectors, tax exemptions for powerful lobbies and debt-funded current consumption are waste. Pakistan must therefore replace IMF-driven austerity with nationally owned prudence. The second rule is that borrowing must be tied to productive assets. Every rupee borrowed should answer three questions. What asset will be created? How will it raise productivity or improve social welfare? How will it contribute to repayment capacity? Loans that fail this test should not be contracted. This is especially important for external borrowing, where repayment requires foreign exchange. Projects financed by external debt must either earn foreign exchange, save foreign exchange, or create broad productivity gains strong enough to support future repayment. The third rule is to stop confusing taxation with extraction. Pakistan does not lack taxable capacity. It lacks the courage to tax rent. Salaried persons, compliant businesses, bank account holders, electricity consumers, mobile phone users, exporters, contractors and professionals are repeatedly squeezed through withholding and indirect taxes. Meanwhile, large agricultural rents, speculative real estate gains, wholesale and retail margins and politically protected concessions remain inadequately taxed. A state that taxes work more heavily than rent destroys productive incentives. It punishes documentation and rewards informality. It converts tax policy into a weapon against enterprise. The fourth rule is to recover the hidden budget of the elite. The official Tax Expenditure Report 2026 has placed tax concessions at Rs. 2.353 trillion. This is not a footnote. It exceeds development allocations. A country pleading fiscal emergency cannot justify such a large hidden budget for selected beneficiaries while imposing new burdens on citizens already paying through withholding, utility bills, petroleum prices and inflation. The fifth rule is to restore fiscal federalism. The growing reliance on petroleum levy instead of general sales tax (GST) on petroleum products has allowed the federation to retain revenues that would otherwise form part of the divisible pool. This may help Islamabad show better numbers. It weakens provinces and, indirectly, social services. After the Constitution (Eighteenth Amendment) of Act 2010, education, health, agriculture, water supply and local development are largely provincial responsibilities. Extracting resources through non-divisible levies while demanding provincial cash surpluses undermines the constitutional design. This is how a fiscal crisis becomes a social crisis. The sixth rule is to end the rentier state. A rentier state survives not by expanding production but by distributing privileges: plots, exemptions, guaranteed profits, protected markets, cheap public assets, regulatory favours and access to state contracts. Such a state creates clients, not citizens; monopolies, not markets; and dependence, not productivity. Pakistanâ€™s repeated bankruptcies are symptoms of this deeper disease. The seventh rule is hard work after stabilisation. Once waste is reduced and borrowing is redirected toward productive use, the economy must move from consumption-led survival to production-led recovery. Agriculture must be modernised. Small and medium enterprises must be formalised through low-rate, simple and predictable taxes. Exports must be freed from policy uncertainty. Energy pricing must reward efficiency rather than theft and circular debt. Cities must be empowered to finance local infrastructure through property-based revenues. Human capital must be treated as investment, not charity. Debt repayment cannot come from slogans. It comes from higher productivity, higher exports, higher savings, better governance and fairer taxation. Pakistan does not need another ritual of temporary stabilisation. It needs a fiscal covenant based on prudence: live within means during hardship, borrow only for capacity creation, tax rent rather than work, remove unjustified concessions, reduce waste, and repay debt through growth generated by real production. The present model has made Pakistan dependent, indebted and externally supervised. The new model must make it self-respecting, productive and fiscally sovereign. The choice is no longer between austerity and growth. The real choice is between debt-funded rentier survival and disciplined productive reconstruction. Copyright Business Recorder, 2026

Date: 2026-06-15

Details: Published June 15, 2026 Updated about 5 hours ago By Anjum Ibrahim The expectations - voluntary ceding of the annual rise in the provincial share of the divisible pool to the Centre - premised on a much publicised debate between the Centre and its federating units had been raised to a fever pitch only to be dashed by the budget 2026-27 bringing to mind T S Eliotâ€™s famous proverb in his poem titled The Hollow Man - not with a bang but a whimper. These expectations were reaffirmed a couple of hours before the budget was presented to parliament by Prime Minister Shehbaz Sharif during his televised address subsequent to formal cabinet approval of the budget as he praised his brother, the leader of his party, his niece, the Chief Minister Punjab, the leadership of the Pakistan Peoplesâ€™ Party as well as the Balochistan and last, but perhaps not least, the Khyber Pakhtukhwa governments for cooperating with the Centre in agreeing to key budgetary proposals. The declaration by Finance Minister Muhammad Aurangzeb that this measure has been postponed till next year raises questions about whether he will be able to deliver on this pledge when he clearly failed to get a consensus on other aspects of this yearâ€™s budget that required the intervention of the hybrid government as well as a 30- to 40-minute-long chat between the Prime Minister with the Managing Director of the International Monetary Fund (IMF). Nonetheless, the budget does envisage generating about a trillion rupees more from the provinces in the current year â€“ a rise that from an economic point of view cannot be supported: a rise in provincial surplus from 1379 billion rupees (revised estimates of 2025-26) to 1794 billion rupees in 2026-27 that would generate an additional 415 billion rupees for the Centre. And a reduction in the provincial budgeted allocation for development from 2.869 trillion rupees in the budget last year to 2.224 trillion next year or an additional 649 billion rupees that would accrue to the Centre. Two observations are relevant. First, this accrual will be spent by the Centre on current non-development expenditure accounting for 93 percent of the total budget 2026-27 like last year, which is anti-growth and inflationary to boot as it is not backed by a rise in output. And second, it will further slow-down any move towards devolution, a policy that seeks to meet the needs/requirements of local communities. Instead, the Centre will take over project decision-making from the next tier of government, i.e., the provinces though one may assume that the more politically well-placed a party maybe the more the Centre will heed their demand for specific projects. The question is: is there anything that is different about the budget from previous ones? There are five takeaways that show that little was changed in the budget. First, the reliance on external borrowing is to rise to 23.3 billion dollars next year (at 290 rupees to the dollar parity) against the 19.9 billion dollars budgeted for the outgoing year but at last count only 11.068 billion dollars had been received in 2025-26 â€“ an inflow that surely must be a source of concern to the government. This perhaps explains why the Finance Minister was at great pains during the unveiling of the Economic Survey a day prior to the budget presentation to emphasize the enhanced access to commercial borrowing, Panda ponds (only 250 million-dollars equivalent have been issued) and issuance of other debt equity instruments like Sukuk and Eurobonds. Total debt, including domestic debt and mark-up, is budgeted to rise next year by 16 percent â€“ from the revised estimates of 6.9 trillion rupees to next yearâ€™s 8.05 trillion rupees. Not included in debt figures noted above, but a debt nonetheless is the estimated closing guaranteed debt position for the issuance of contingent liabilities on 30 June 2025 estimated at 3.950 trillion rupees in last yearâ€™s budget, understated by 372 billion rupees as per the 2026-27 budget documents. The envisaged rise till 30 June 2027 is 5.005 trillion rupees or a rise of 16 percent. Second, all components of current expenditure were raised and reflected the inability of the elite to show a reduction through either: (i) implementing reforms, pensions budgeted to receive 1.16 trillion rupees next year as opposed to 1.05 trillion rupees in the outgoing year, though facetiously the documents note a 10 billion rupee pension fund though it is not clear whether this fund is set up at the taxpayersâ€™ expense or whether this is the outcome of the policy announced last year that envisages employee contribution effective for only new entrants. Defence was also upgraded by 412 billion rupees though the bulk of this for operational expenses due to the uptick in terror attacks (and one would assume the 7 percent pay raise for all state employees). Third the budgeted development outlay is contained at one trillion rupees in 2026-27, the same amount as budgeted in 2025-26. However, actual disbursement by the Finance Ministry (as opposed to the authorisations by the Planning Ministry) in the outgoing year has to-date been less than 50 percent. The allocations are indicative of a long-standing PML-N philosophy, notably big infrastructure projects will promote development as well as the partyâ€™s popularity. Sadly, here too the focus remained on roads rather than on water reservoirs, given that the country is now defined as severely water stressed. Fourth, Federal Board of Revenue tax collections are budgeted to rise by 17.5 percent to 15.26 trillion rupees â€“ the 2025-26 budgeted FBR collection was 14 trillion rupees that was revised downward to 12.9 trillion rupees (though FBR sources have revealed that the shortfall may still be in excess of 800 billion rupees). This indicates that the tax target, in yet another budget, is unrealistic. In addition, the bulk of the government revenue is to be from sales tax whose incidence on the poor is greater than on the rich. It includes 4.9 trillion rupees under the head of sales tax, and another 5.3 trillion rupees from withholding taxes levied in the sales tax mode but credited under income tax (a practice that FBR does not desist from in spite of exhortation by the Auditor General of Pakistan). And kept outside the purview of the FBR (to ensure that it is not part of the divisible pool and therefore to be shared with the provinces) is the petroleum levy budgeted to generate 1.67 trillion rupees next fiscal year. In effect, the burden on the public through these three sales tax sources will be 11.8 trillion rupees next year â€“ a fact that undermines the adequacy of the 838 billion rupees budgeted for the Benazir Income Support Programme, especially given poverty rate of 44 percent, if measured as per the calorific value. And finally, the 4 percent growth next year may have to be revised downward given the severely contractionary monetary and fiscal policies in place due to the IMFâ€™s harsh and upfront conditions and in the words of the Annual Budget Statement 2026-27 â€œa one percentage point decline in real GDP growth could lower government revenues through reduced tax collections, while also increasing expenditure pressures, particularly on social safety nets.â€ Copyright Business Recorder, 2026

Date: 2026-06-15

Details: Published June 15, 2026 Updated about 5 hours ago By Rizwan Bhatti KARACHI: The Pakistan Banks Association (PBA) has welcomed the Federal Budget 2026-27, describing it as the first budget in years to shift the countryâ€™s focus from crisis management to sustainable economic growth while maintaining the fiscal discipline that underpinned Pakistanâ€™s recent macroeconomic recovery. The PBA expressed confidence that banks are well positioned to expand financing to the private sector, citing the budgetâ€™s commitment to fiscal consolidation, tax relief measures and incentives for exporters and the IT sector as key drivers of investment and economic growth. According to PBA, the Budget keeps faith with fiscal discipline, holding the deficit at 3.6 percent of GDP and a primary surplus of 2 percent, while extending real relief through lower personal income tax, a reduction in super tax for the wider corporate sector, support for exporters, and an extension of the concessional regime for IT and IT-enabled services to 2029. Growth is targeted at 4 percent, with independent analysts seeing further upside as confidence returns. The Association sees this balance, caution on the fiscal accounts, ambition on growth, as exactly the right setting, and one in which private credit, rather than public borrowing, can do the heavy lifting. Commenting on the Budget, Zafar Masud, Chairman PBA, said that this is a Budget the industry can build on. â€œThe conditions for priority-sector lending are the best in over a decade and we intend to use them for the benefit of our economy, our businesses, and our peopleâ€, he added. Masud said that industry commitment is concrete: to drive SME financing from Rs 882 billion towards Rs 1.5 trillion by 2028, to revive mortgage & housing finance to achieve the 500,000 units target of the government by 2028, agriculture financing to cross Rs. 3.5 trillion disbursements during a year by 2028, promoting social impact projects, particularly in education and skill development, by leveraging the budgetary allocations to meet the international health and education funding commitment standard benchmark of 5 percent+ each, and to keep export credit flowing at competitive rates. To make the most of this positive environment, we look forward to working with the Government and the State Bank of Pakistan on a consistent and predictable tax regime, documentation that reinforces financial inclusion, and risk-sharing that unlocks lending to priority sectors with both social as well as economic multipliers for sustainable growth, he added. Measures in the Budget to revive property and housing, digital payments, exports and technology are expected to support a recovery in private credit. The breadth of recent progress underscores the point: workersâ€™ remittances reached a record USD 38.3 billion, the Roshan Digital Account has channelled over USD 12 billion through formal channels, and the banking system now serves some 103 million depositors across nearly 268 million deposit accounts. Muneer Kamal, CEO & Secretary General - PBA, said that this Budget is its shift from stabilisation towards growth, and the banking industry is ready to carry its share of that load. â€œWe will keep credit flowing to the productive sectors â€” housing, exports, technology and, above all, the SMEs that will drive the next phase of job creation. The foundations are strong, the outlook is encouraging, and the industry is fully committed to building on bothâ€, he added. Over the last two years the industry has delivered in an unparalleled fashion across SME, agriculture and housing and in low-cost housing the industry approved Rs 100 billion to some 67,000 beneficiaries in just two months, he informed. The Association reaffirmed that, with these foundations in place, the industry stands fully behind the Governmentâ€™s growth agenda as the recovery takes hold. Accordingly to PBA, the banking industry has not waited to be asked. Over the past two years, it has repeatedly used its own balance sheet, at no cost to the exchequer and without sovereign guarantees, to unlock problems that had stalled the economy: On Circular Debt, the industry coordinated the restructuring of Rs 1.225 trillion of power-sector circular debt at concessional rates, easing a burden that had choked the energy chain for years. It also restructured Rs 268 billion of PIA debt, clearing the way for the first major privatisation in two decades. The industry also voluntarily reduced its margin on the Export Refinance Facility, bringing the cost of export financing down to 4.5 percent - acting ahead of the curve to keep exporters competitive. Copyright Business Recorder, 2026

Date: 2026-06-15

Details: Published June 15, 2026 Updated about 5 hours ago By Ali Khizar The federal budget for FY27 has been greeted with celebration in certain quarters. The celebration may prove premature. This is not a pro-growth budget, nor an expansionary one. Overall development spending, federal and provincial combined is set to decline. The fiscal space that has been created is being redirected largely toward a narrow elite whose consumption patterns will not meaningfully move the growth needle. At the federal level, this is a relief budget, and one that is, on paper, being financed by cutting provincial development spending. The government is attempting to address a structural flaw in fiscal federalism, but through unconventional means. The IMF noted as far back as its 2017 special report that Pakistanâ€™s fiscal system is â€œsomewhat unique compared to other countriesâ€, a uniqueness rooted in the substantial asymmetry produced by the 7th NFC Award, where the provincial share in revenue far exceeded their share in resource mobilization. For years, the federal government has done the heavy lifting on revenue generation while provinces have spent lavishly. The provincial surpluses generated in recent years have largely remained parked with the provinces, eventually financing federal fiscal gaps by flowing into T-bills. These accumulated surpluses are dry powder, held in reserve to be deployed once the IMF programme ends. The FY27 budget attempts, on paper, to correct this by transferring just over Rs1 trillion to the federal government. This creates room for Islamabad to lower taxes without cutting expenditure, while maintaining the targeted fiscal balance. There are, however, technical complications. Provinces receive their full revenue share until FBR collections reach Rs13.35 trillion, beyond which the incremental share is transferred as a grant to the federal government. If the FBR misses its target, provinces retain full revenue exposure rather than the standard 43 percent. The arrangement also rests on voluntary provincial cooperation, which is not a structural fix. The federal government has used this space to provide relief to segments of the formal, affluent, and middle-income population, including salaried individuals whose tax burden was raised sharply and disproportionately in recent years. They are paying less than before, though still more than they were in 2022. Exporters will see better earnings on paper. But there is little in this budget to drive investment in productive capacity. No one appears keen to commit to new projects. The affluent will spend more, likely on imported goods and services. Salaried households will have marginally more disposable income. But neither creates the kind of demand multiplier that shifts growth trajectories. And for the poor and the informal lower- and middle-income classes, there is essentially nothing. Whatever benefit trickles down will barely offset the direct and indirect costs of higher petroleum levies already in the pipeline. The FBRâ€™s targets are ambitious to the point of implausibility. Direct tax collection is projected to grow by 18.3 percent against nominal GDP expansion of 13.2 percent, and this while offering reliefs. Customs duty is expected to increase by 20 percent even as the SBP continues to discourage non-essential imports and trade tariffs trend downward. The arithmetic does not hold together comfortably. When the gaps materialize, and they likely will, the pressure will fall back on the FBR to perform. That means squeezing the formal sector further: demanding advance payments, applying coercive collection measures, and revisiting the same taxpayers who are currently celebrating. The jubilation of the affluent may prove short-lived. Meanwhile, the government has significant room to increase petroleum levies without passing through the full impact to consumers, particularly if a prospective Iran-US deal keeps oil prices contained. Other forms of indirect taxation remain available. These instruments, when deployed, land hardest on those least able to absorb them. This budget has been received as a turning point by a small group of people looking only at the relief side of the ledger. They are not accounting for the other side. The relief is real, but it rests on paper targets. When those targets are missed, as they have been in prior cycles, the IMF will push for enforcement, and the government will reach back into the same pockets it has just partially emptied, while leaning on indirect taxes that compress the living standards of ordinary Pakistanis. Caution is warranted. Some inflationary consequences are likely. The central bank would be wise to maintain its hawkish stance. Copyright Business Recorder, 2026

Date: 2026-06-15

Details: Published June 15, 2026 Updated about 5 hours ago By Recorder Report KARACHI: President of the Korangi Association of Trade and Industry (KATI), Muhammad Ikram Rajput, has described the federal governmentâ€™s; Rs 18.771 trillion budget for fiscal year 2026-27 as a positive step toward restoring business confidence, reviving industrial activity, and promoting economic growth. However, he emphasized that the budgetâ€™s success would ultimately depend on effective implementation, industrial facilitation, and tangible measures to enhance exports. Rajput noted that the government has set ambitious targets of Rs15.264 trillion in tax revenue and Rs5.336 trillion in non-tax revenue. Given the prevailing economic conditions and Pakistanâ€™s position as one of the highest-cost production environments in the region, achieving these targets would be a significant challenge, he said. He stressed that sustainable economic growth requires expanding the tax base and documenting the economy rather than imposing additional burdens on existing taxpayers. Welcoming the allocation of Rs10 billion for Karachiâ€™s K-IV Bulk Water Supply Project, Rajput said Karachi remains the industrial and economic lifeline of Pakistan but has suffered for decades from inadequate infrastructure and basic public services. He remarked that the timely completion of the K-IV project is not only critical for Karachi but also for the national economy. However, he expressed concern that the budget lacks a clear policy framework for highways and broader infrastructure development. Given Karachiâ€™s contribution to industrial output, investment, and national revenue, he urged the federal government to allocate additional resources for the cityâ€™s development projects. The KATI president also welcomed the abolition of the 9 percent surcharge on salaried individuals and the reduction in income tax slabs, describing these measures as positive for economic activity. He further appreciated the increase in the minimum wage but argued that the budget largely overlooks measures aimed at increasing industrial profitability and promoting industrialization across the country. Rajput described the proposed reduction in super tax and the abolition of Capital Value Tax (CVT) on foreign assets as major relief measures for the business community. He noted that the complete elimination of super tax on income up to Rs500 million and the reduction of the tax rate from 10 percent to 8 percent on higher incomes had long been key demands of the industrial sector. The reduction in super tax is expected to encourage investment, lower business costs, and support industrial expansion, ultimately generating positive impacts on employment and national income, he noted. Commenting on the export sector, he acknowledged that the budget contains certain positive measures for exporters but cautioned that tax relief alone would not be sufficient to achieve substantial export growth. He called on the government to reduce energy costs for industry, ensure timely payment of export refunds, strengthen export financing schemes, and introduce industrial reforms aimed at lowering production costs and improving competitiveness in international markets. Copyright Business Recorder, 2026

Date: 2026-06-15

Details: Published June 15, 2026 Updated about 5 hours ago By Recorder Report KARACHI: While reacting to the budget, the President of the Federal B. Area Association of Trade & Industry (FBATI), Sheikh Muhammad Tehseen, stated that though the budget contained certain positive measures for the selected sectors, yet it had failed to fully address the critical challenges being faced by the industrial and export sectors of the country. He expressed serious concerns over the governmentâ€™s silence regarding the long-pending issue of industrial refunds and the absence of any meaningful relief in energy tariffs. He said that delayed refund payments continued to create severe liquidity constraints for the industries, particularly for the exporters, while high electricity and gas costs had been significantly eroding the competitiveness of Pakistani products in international markets. Sheikh Tehseen noted that the budget lacked a comprehensive roadmap for industrial growth and did not present a vision capable of triggering an industrial revival. He said that small and medium-size enterprises (SMEs), which formed the backbone of the countryâ€™s manufacturing and export sectors, had not been provided with sufficient incentives, financing facilities, or tax relief measures. As a result, these industries would continue to face operational difficulties, limiting their ability to expand production, create employment opportunities, and increase exports. The FBATI president emphasized that Pakistanâ€™s economic stability and sustainable growth depended heavily on industrial expansion and export-led development. He said that without reducing the cost of doing business and providing a conducive environment for manufacturing, it would be difficult to achieve the governmentâ€™s economic targets. Commenting on the positive aspects of the budget, Sheikh Tehseen welcomed the relief measures announced for the property and travel sectors, stating that those initiatives might contribute to increased economic activity and investment. However, he said that greater attention should have been given to the industrial and export sectors, which were the primary drivers of foreign exchange earnings and employment generation. He urged the government to formulate a comprehensive post-budget industrial policy focused on export promotion, energy cost rationalization, timely refund payments, industrial modernization, and enhanced support for the SMEs. Such measures, he said, were essential for strengthening Pakistanâ€™s industrial base, improving competitiveness, and ensuring long-term economic growth. Sheikh Tehseen reaffirmed the commitment of the Federal B. Area Association of Trade & Industry to work closely with the government and relevant stakeholders for the development of industry and the promotion of exports, while continuing to advocate for policies that supported sustainable industrial growth and economic prosperity. Copyright Business Recorder, 2026

Date: 2026-06-15

Details: Published June 14, 2026 Updated a day ago By Sohail Sarfraz ISLAMABAD: The government has granted an exemption of sales tax on import of capital goods for upgradation and overhaul of existing refineries as part of a package of sales tax relief measures announced in the Finance Bill 2026-27 aimed at supporting key sectors of the economy and promoting investment. The Finance Bill 2026-27 contains a series of sales tax relief measures covering the refinery, electric vehicle, aviation, shipping, publishing and healthcare sectors. The Finance Bill proposes exemption from sales tax on magazines and abolition of sales tax on tampons. The Finance Bill has also extended till June 30, 2027 the exemption available on import of Completely Knocked Down (CKD) kits for electric vehicles. The sunset clause applicable to electric vehicles has also been extended up to June 30, 2027. The Finance Bill further enhances the scope of sales tax exemption on aircraft parts imported or leased by Pakistan International Airlines Corporation Limited (PIACL). The government has also granted exemption of sales tax to promote strategic investment in the shipping sector and provides exemptions on specified imports required for the Shanghai Cooperation Organisation (SCO) Summit and ongoing counter-terrorism operations. The Finance Bill, however, proposes withdrawal of the existing sales tax exemption on family planning devices. On the revenue side, the Finance Bill proposes expansion of the Third Schedule of the Sales Tax Act to ensure payment of sales tax at consumer prices by manufacturers at the manufacturing stage. The Finance Bill also introduced withholding of sales tax by toll manufacturers from unregistered buyers and expands the scope of withholding sales tax by Associations of Persons (AOPs) and individuals on purchases from unregistered persons. The Finance Bill further proposed recovery of three percent value-added tax from manufacturers where imported raw material is sold in the same state without being used in manufacturing. The Finance Bill seeks rationalisation of penalties on certain sales tax offences and proposes inclusion of three additional offences in Section 33 of the Sales Tax Act for imposition of penalties. The Finance Bill contains a wide range of measures aimed at streamlining sales tax administration through increased digitalisation and automation. The Finance Bill introduces definitions relating to advance receipt invoice, algorithmic settlement mechanism, electronic invoicing system, national faceless centre and production monitoring system. The government has also proposed streamlining the definition of Tier-1 retailers by including retailers having annual turnover of Rs200 million or more within the category. The Finance Bill clarifies the timing of delivery of goods to recipients and authorises the Federal Board of Revenue (FBR) to outsource the valuation of goods. The Finance Bill further proposes a new mechanism for taxation of the steel sector based on monthly electricity consumption through amendments in Section 6 of the Sales Tax Act. The Finance Bill empowers the FBR to increase or decrease the limit of input tax adjustment under Section 8B and introduces electronic issuance of debit and credit notes for adjustment purposes. The government has also introduced a new Section 11H relating to faceless audit and assessment, while new provisions relating to faceless jurisdiction, faceless appeals and establishment of a National Faceless Centre have also been proposed. The Finance Bill also seeks to discourage fake and flying invoices through amendments in Section 21 and makes issuance of invoices mandatory for exempt supplies through changes in Section 23. Copyright Business Recorder, 2026

Date: 2026-06-14

Details: Published June 14, 2026 Updated a day ago By Naveed Butt ISLAMABAD: Speaker of the National Assembly Sardar Ayaz Sadiq on Saturday announced the establishment of a dedicated Budget Desk to assist MNAs during deliberations on the federal budget. Addressing the House, the Speaker informed members that the Budget Desk had been set up at the National Assembly Library to provide comprehensive support throughout the budget session. He said the facility would offer budget briefings, research-based insights, and analytical assistance to lawmakers, enabling them to examine budgetary proposals in greater depth and participate more effectively in parliamentary discussions. The initiative is aimed at strengthening the legislative review process and enhancing membersâ€™ capacity to scrutinize budgetary allocations and policy measures. Copyright Business Recorder, 2026 FINANCE MINISTER ADDRESSES POST-BUDGET PRESS CONFERENCE: â€˜WEâ€™RE NOW MOVING FORWARD TOWARD GROWTHâ€™ Published June 14, 2026 Updated about 14 hours ago By Tahir AminSohail Sarfraz ISLAMABAD: Finance Minister Muhammad Aurangzeb on Saturday said that the 2026â€“27 Budget reflects the governmentâ€™s commitment to shifting the economy from stability towards export-led growth, while embedding measures to create an enabling environment that are backed by tax incentives for various sectors. â€œIn this budget, we have made significant progress in the direction of travel â€” towards economic growth from economic stabilization, as steps have been taken envisaging exports promotion, including the abolition of advance tax and the proposed abolition of super tax for all exportersâ€, said Aurangzeb, flanked by Information Minister Attaullah Tarar, Minister of State for Finance Bilal Azhar Kayani, Finance Secretary Imdadullah Bosal, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial and Head of the Tax Policy Office Najeeb Memon, while addressing a post-budget press conference here on Saturday. The minister called the Budget 2026-27 people-friendly, catering for all sectors, while saying the government has reduced the tax burden on the salaried class, provided additional subsidies, and laid the foundation for export-led growth. Aurangzeb said the government had made â€œextraordinary progressâ€ in the budget and had fulfilled its promise to provide relief after difficult economic conditions. He said a subsidy of Rs70 to Rs71 billion has been earmarked to ensure a conducive environment for exporters, who will also have access to easy financing at 4.5 per cent. He added that duties on the import of raw materials have been reduced to bring down production costs. He further noted the matter also pertained to â€œfinancing rather than just taxationâ€. He added that an additional subsidy of Rs70 billion has been proposed in the budget to take the Export Refinance Scheme (EFS) â€œto a different levelâ€. â€œSome of those have been reflected in the defence budget,â€ he said, adding that the arrangement was expected to remain in place for the next three years. On the 7 percent increase in salaries and pensions for all government employees, Aurangzeb said the benchmark was set on the basis of the inflation index and described the raise as â€œsatisfactory,â€ given the accompanying tax relief. The Finance Secretary said the increase was granted by merging the ad hoc relief provided in 2022 and 2025. However, autonomous bodies will make their own decisions in this regard. On taxation, the finance czar emphasised the aspects of â€œboth deepening and broadeningâ€ the revenue collection. Affirming that digital monitoring and other measures were already leading to additional revenues, he noted that a â€œnew tax modelâ€ presented in the parliament yesterday was in design. â€œWe want to take this towards automation and AI, and reduce human intervention,â€ he said, mentioning that the retailersâ€™ scheme has been proposed to widen the tax base. Noting that questions had been raised about economic growth, rather than stabilisation, Aurangzeb asserted: â€œWe have fully utilised the fiscal space available to us. There is more to do [â€¦] The feedback we have received so far is that we have set out on the path to economic progress.â€ Responding to a question, the finance minister clarified that the petroleum levy was not being increased. However, he acknowledged that the government â€œkeeps interchanging the amount between petrol and dieselâ€, but there was no proposal to increase it. Terming population growth an â€œexistential issueâ€, he affirmed that the government was working on a comprehensive plan. â€œWhen the next NFC (National Finance Commission) award is allocated, this particular allocation driver has to be reviewed and has to change,â€ he said. Speaking about tariffs, the finance minister noted that the government was in the second year of the five-year plan â€œin terms of bringing the cost down in terms of intermediate goods and the raw materialâ€ Copyright Business Recorder, 2026

Date: 2026-06-14

Details: Published June 14, 2026 Updated a day ago By Recorder Report LAHORE: The Chairman of the Supreme Council All Pakistan Anjuman-e-Tajiran, Naeem Mir, has urged the government to remove the fixed tax component from the newly proposed fixed tax scheme, arguing that its current structure unfairly burdens the countryâ€™s most economically vulnerable traders while falling short of its own documentation goals. Speaking to BUSINESS RECORDER, Mir noted that the scheme, as currently designed, would effectively apply only to micro-scale traders, since the government has already excluded distributors, wholesalers, brands, importers, exporters, processors, jewelers, and other mid-tier business categories from its scope. This exclusion, he said, leaves the schemeâ€™s weight falling almost entirely on those with the most limited business turnover. While welcoming certain aspects of the proposal, Mir praised the introduction of a simplified tax return form and the governmentâ€™s broader push to bring traders into a documented economy, stating that traders across the country have no objection to being registered with the Federal Board of Revenue. He described these measures as a positive step in the right direction. However, he firmly opposed the imposition of an annual fixed tax of twenty-five thousand rupees on micro-scale traders, calling it an ill-conceived decision that the Finance Minister should revisit without delay. Mir proposed an alternative approach in which the first phase focuses exclusively on registering traders and connecting all commercial units to the FBR system through a simplified return form. The data collected should then be processed through the FBRâ€™s digital infrastructure to identify those concealing their true business size to avoid taxation. Verified tax evaders should be issued legal notices and brought into the formal tax net accordingly. He warned that deploying FBR officials into markets and bazaars to monitor QR codes, affix plaques, and directly collect fixed taxes from small shopkeepers contradicts the governmentâ€™s own stated commitment to a faceless and fully digital tax system, a vision repeatedly endorsed by Prime Minister Shehbaz Sharif. Mir concluded by expressing confidence that the Finance Minister would act on tradersâ€™ concerns and revise the scheme to focus solely on registration and economic documentation, a move he said would make the scheme both more acceptable to the business community and more effective in achieving its objectives. Copyright Business Recorder, 2026

Date: 2026-06-12

Details: Published June 12, 2026 Updated 17 minutes ago By BR Research Pakistanâ€™s manufacturing sector is seen moving again - The Pakistan Economic Survey 2025-26 shows manufacturing growing by 6.6 percent, led by a recovery in LSM, which had contracted by 0.69 percent last year, expanded by 6.11 percent in FY26. That is clearly good news. Manufacturing is not stuck in contraction, and the recovery is not limited to one or two sectors. Out of 22 industrial groups, 16 recorded positive growth during July-March FY26. The Survey links this improvement to better macroeconomic conditions, exchange rate stability, lower inflationary pressures, relatively easier monetary policy, improved foreign exchange availability and better access to imported inputs. But the headline number tells only part of the story. The rebound is real, but its quality is uneven. Much of the lift has come from sectors linked to domestic demand, low-base recovery, and inventory normalisation, while some sectors that matter more for industrial depth, productivity and investment remain weak. That makes the FY26 recovery meaningful, but not yet a full industrial revival. Food was one of the biggest contributors to the rebound. The sector grew 9.77 percent and added 1.79 percentage points to cumulative LSM growth. Sugar production rose sharply, while cooking oil, wheat, and rice milling also posted modest gains. Beverages grew. This helped reverse last yearâ€™s weakness in food manufacturing and gave LSM an important boost. Automobiles were another major driver. The auto sector grew 61.7 percent during July-March FY26, compared to 40 percent growth in the same period last year. The Survey links this performance to declining inflation, exchange rate stability, and lower interest rates. Coke and petroleum products grew 10.9 percent, compared to 4.9 percent last year, driven by higher output of high-speed diesel, motor spirit, diesel oil, jet fuel oil, and other petroleum products. Electrical equipment also performed well, growing 11.9 percent. There was also some strength in wearing apparel, which grew 6.6 percent. The Survey notes that readymade garments benefited from improved competitiveness and stronger domestic and external demand. Export quantity rose 5.9 percent, and export value increased 3.8 percent during July-March FY26. The weak spots, however, are just as important. Overall textiles, one of Pakistanâ€™s largest manufacturing and employment-generating sectors, grew only 0.75 percent. Cotton yarn rose meagrely, while cotton cloth barely moved. The bigger concern is that several sectors linked to industrial capacity and input chains stayed negative. Pharmaceuticals contracted 5.14 percent, against growth of 2.3 percent last year. Chemicals contracted 1.44 percent. Iron and steel products declined 6.3 percent, while machinery and equipment also remained weak. These are not minor details. If the recovery is to become a durable industrial cycle, weakness in these sectors cannot be ignored. The credit picture also shows a mixed trend. Private sector credit increased by around 22 percent year-on-year during Jul-Mar 2026. But loans to private sector businesses declined by around 8-9 percent. Within manufacturing, total business credit fell by over 17 percent. The composition however, improved, with manufacturing credit shifting away from working capital and toward fixed investment, suggesting some firms are beginning to borrow for expansion rather than just operations. The Surveyâ€™s message is balanced. Manufacturing has recovered, but risks remain from geopolitical tensions and higher energy prices, which can raise production and transport costs. So, the recovery should not be overstated. LSM is growing again. Autos, food, petroleum products, and apparel are all doing better. But a real industrial revival needs more than a rebound in a few sectors. Textiles, chemicals, pharmaceuticals, steel, machinery, and export-oriented manufacturing also need to gain strength. FY26, therefore, marks a recovery in manufacturing, not a transformation. The factories are moving again, but the industrial base remains uneven. The real challenge now is to move from factory recovery to industrial momentum that can survive beyond one good year.

Date: 2026-06-12

Details: Published June 12, 2026 Updated about 2 hours ago By Huzaima BukhariDr Ikramul HaqAbdul Rauf Shakoori On the eve of the federal budget 2026-27, the government has announced â€˜Fixed Tax Assan Schemeâ€™ [no details yet available on any official website] for small traders and retailers with an annual turnover of up to Rs. 200 million. As usual, it is launched as â€œa major initiative to bring businesses into the tax netâ€. The official narrative is â€œmillions of traders remain outside the tax systemâ€! The wizards in Ministry of Finance and Federal Board of Revenue (FBR) are of the view that a simplified 1% turnover tax or Rs. 25,000, whichever is higher, will finally induce millions to contribute around Rs. 50 billion in fiscal year (FY) 2026-27 towards national exchequer. It presupposes that they are paying less than this amount. This narrative rests on a fundamentally flawed assumption. All the traders, shopkeepers, wholesalers and small manufacturers are already paying advance income tax. By using commercial/industrial electricity and/or gas connections, they are paying income tax and sales tax with bills! In reality, in FY 2024-25 with electricity alone they paid advance income tax of not less that Rs. 100 billion [total was Rs. 144.371 billion including industrial and domestic users]. It will now be adjustable as per scheme. Section 235(4)(a) of the Income Tax Ordinance, 2001 disallows adjust/refund up to Rs. 42,750. In terms of section 235 of the Income Tax Ordinance, 2001, every month millions of retailers across Pakistan pay advance income tax with electricity charges. In the case of a commercial connection, advance income tax is imposed at the rate of 10% if monthly bill exceeds Rs. 500 and up to Rs. 20,000. Beyond Rs. 20,000, the rate is 12% for commercial users. If majority of traders is not filing returns and paying higher withholding tax, it merely reflects on the incompetence and inefficiency of the tax machinery. The real question is why the FBR, despite possessing extensive information about them and despite collecting advance taxes from them through multiple channels, has failed to convert them into return filers and assessed taxpayers. The announcement is thus less a tax broadening initiative and more an admission of administrative failure. For decades, FBR has relied on withholding taxes and advance tax collections as substitutes for proper implementation of tax laws. The Income Tax Ordinance, 2001 contains dozens of withholding provisions that collectively generate the bulk of direct tax revenues (sic). Taxes are collected through banks, mobile operators, utility companies, government departments, customs authorities, vehicle registration agencies and numerous other intermediaries. The utility companies collect these amounts and deposit them into the national exchequer. If these taxpayers are already paying income tax through electricity bills, how can they simultaneously be described as being outside the tax net? The contradiction becomes even more glaring when one considers the advance taxes collected through mobile phone usage. Every trader using a mobile connection pays withholding tax under section 236 of the Income Tax Ordinance, 2001. Every bank account holder faces withholding taxes on various transactions. Importers, manufacturers and distributors encounter numerous advance tax provisions throughout the supply chain. The reality is that Pakistan has not created an income tax return filing net. It has created a withholding tax net. The distinction is crucial. A genuine tax system identifies taxpayers, determines their real incomes, allows deductions where appropriate, assesses taxable income and imposes tax according to law. Pakistanâ€™s system increasingly bypasses this process and instead collects taxes before income is determined, often treating advance taxes as minimum/final liabilities. Consequently, the state collects taxes but fails to build a credible taxpayer registry. Official statements frequently claim that Pakistan has over six million commercial and industrial electricity users who are not filing returns. If that figure is accurate, it represents not a failure of traders but a failure of tax administration. The irony is that FBR already knows who these persons are. Their names, addresses, electricity connections, monthly consumption patterns and tax payments are available in official databases. Many are also linked with bank accounts, mobile phone numbers, property records and sales tax registrations. No sophisticated technology is required to identify them. The information already exists. The obvious question is why the Inland Revenue Service (IRS), employing thousands of officers and supported by increasingly sophisticated information technology systems, has failed to convert these identified taxpayers into return filers. Instead of answering this question, policymakers periodically announce new amnesty schemes, simplified propositions, presumptive/minimum taxes and turnover-based arrangements. Each such initiative effectively lowers compliance expectations from taxpayers while avoiding scrutiny of administrative inefficiencies within the tax machinery itself. The proposed turnover tax scheme reflects this pattern. Turnover taxes are often defended on grounds of simplicity. Simplicity undoubtedly has value, particularly for very small businesses. However, simplicity should not become a substitute for equity. A trader earning a profit margin of 20 percent and another earning a profit margin of 2 percent may have identical turnovers. Taxing solely on turnover ignores their vastly different capacities to pay. Such arrangements sacrifice fundamental principles of income taxation in favour of administrative convenience. The deeper problem lies in the message conveyed by these schemes. Every time the government announces a simplified regime targeted at non-filers, it sends a signal that remaining outside the formal filing system may eventually be rewarded with special treatment. Those who have been complying with filing requirements receive no corresponding benefit. This creates a perverse incentive structure. The government should instead ask a different question: why do millions of people already paying higher advance taxes not file returns? Part of the answer lies in the complexity of tax compliance. Return filing remains unnecessarily cumbersome for small businesses. Another part lies in the absence of trust between taxpayers and tax authorities. Many traders view registration as an invitation to harassment rather than a pathway to compliance. These concerns deserve attention. However, none of them justifies abandoning the principle that persons whose incomes exceed taxable thresholds should file returns and be assessed according to law. We must lower rates, which are obnoxiously high. The irony is that Pakistanâ€™s tax administration possesses more information about taxpayers than ever before but is so lazy to get returns from all who are earning taxable incomes. FBR has access to electricity consumption data, gas connections, banking transactions, vehicle ownership records, property holdings, foreign travel information, withholding tax databases and increasingly sophisticated digital trails. Successive governments have repeatedly celebrated these data integration initiatives. If despite possessing all this information the tax administration still requires another simplified scheme to identify taxpayers, one must question the effectiveness of the entire data-gathering exercise. The issue becomes even more significant when viewed in the context of budgetary pressures. Pakistan faces mounting fiscal challenges. Public debt remains high. Development expenditure is constrained. Provinces are being pressured to generate larger fiscal surpluses. New revenue targets are expected to be imposed on FBR. Under these circumstances, creating additional concessional regimes for groups already captured within the withholding tax system appears difficult to justify. What Pakistan requires is not another special scheme but a transition from withholdingisation to genuine net income-based taxation at reasonable rates. The first step should be the automatic identification of all commercial and industrial electricity consumers paying advance income tax under section 235. Those whose economic profiles indicate taxable incomes should be issued notices requiring return filing. The second step should involve a simplified return system tailored for small businesses without compromising the principle of income-based taxation. The third step should be administrative accountability. If millions of identified taxpayers remain outside the filing system, responsibility cannot be shifted entirely onto traders. Questions must also be directed towards the institutions entrusted with enforcing tax laws. Tax reform begins with intellectual honesty. Claiming that traders paying taxes through electricity bills, mobile phones, banking transactions and numerous withholding provisions are outside the tax net obscures the real challenge. The challenge is not discovering taxpayers. The challenge is administering the tax system effectively. The proposed â€˜Fixed Tax Assan Schemeâ€™ may provide temporary political optics. It may create an impression of outreach and reform. It may even generate some additional revenues in the short run. However, it does not address the fundamental weakness of Pakistanâ€™s fiscal architecture: a tax administration that increasingly relies on advance collections while failing to establish a comprehensive culture of filing, assessment and accountability. The country does not suffer from a shortage of taxpayers but bona fide filers, those earning taxable incomes by opted to be â€˜non-filersâ€™ (not appearing on Active Taxpayers List). It also suffers from an incompetent and inefficient tax administration, and extremely bad tax policy of â€˜filersâ€™ and â€˜non-filersâ€™. Until this reality is recognised, new schemes of appeasement will continue to be announced, old problems will persist, and the promise of broadening the tax base will remain nothing but a dream. Copyright Business Recorder, 2026

Date: 2026-06-12

Details: Published June 12, 2026 Updated about 2 hours ago EDITORIAL: The 3.7 percent growth for 2025-26 in the Economic Survey, limited to nine months of data (July-March), is even more of a projection in the current year, given that the ongoing Middle East conflictâ€™s duration has surpassed all earlier predictions, though the International Monetary Fund (IMF) team concluded in its 15 May third review documents that the fall-out of the conflict has been â€œcontained.â€ Not contained was headline inflation that rose to 10.9 percent in April this year, the trade deficit that widened to 5.6 billion dollars in April 2026 against April 2025 and remittance inflows were down by 7.5 percent in March this year compared to March last year. And neither was current expenditure contained as unbudgeted and untargeted subsidies to the general public were extended in the aftermath of the supply disruptions due to the Middle East conflict that, in turn, raised non-interest current expenditure April to June 2026. The IMF has reported that Pakistan has agreed not to extend these subsidies as they are distortive in essence. The Survey has noted, among other things, a decline in current expenditure by 4.2 percent over the same period last year. This was mainly attributable to transforming short-term debt secured at higher interest rates (including the time when the policy rate was nearing 22 percent) with longer term debt at lower rates. However, this did not imply that reliance on borrowing declined and data uploaded on the websites of State Bank of Pakistan (SBP), Pakistan Bureau of Statistics (PBS) and Finance Division (FD) indicates that July-May 2025-26 the government borrowed 3.5 trillion rupees from commercial banks â€“ an amount that in all probability excludes the 1.25 trillion rupees borrowed for the retirement of the energy sector circular debt by citing it as a one-off measure. In total, the government borrowed 4.75 trillion from commercial banks till May this year, with one month remaining till the end of the fiscal year, while credit to the private sector 1 July 2025 to 3 April 2026 was 864.3 billion rupees (average of about 96 billion rupees per month). Thus total credit to the private sector July to May this year can be projected at a maximum of 1.05 trillion rupees. Non-interest current expenditure, however, grew by 18 percent July-March due to higher defence outlay and grants mainly owing to a rise in operational costs due to an uptick in terror attacks from across the border while additional grants are not quantified. The increased borrowing by the government was not allocated for development though the Survey notes a rise of 26.8 percent. However, data from the Planning Ministry website indicates that 633.34 billion rupees was authorized July-April 2026 while actual releases stood at 469.85 billion rupees. The Survey noted improved performance of the Federal Board of Revenue (FBR) with the Finance Minister in the traditional Survey presentation briefing noting that enhanced revenue generation from audit of sales tax on sugar and cement at the factory level (an indirect tax which is passed onto the consumers in its entirety). One reason cited for the projected 868 billion-rupee FBR shortfall July-May 2026 from the downward revised target of 12.09 trillion is the lower GDP growth rate than the 4.2 percent projected in the budget which, the Finance Minister pointed out, was compromised due to three exogenous factors: the conflict, the floods in September and the Trump tariffs. Non-tax revenue rose due largely to the petroleum levy and SBP profits. Manufacturing sector grew by 6.6 percent, largely supported by large-scale manufacturing sector at 6.1 percent; however, total investment was 14.4 percent of GDP this year, precisely the same rate as last year, while national savings declined from 14.9 percent to 14.1 percent. From the foregoing, it can be safely deduced that the government was expecting a growth rate of 4 percent or higher and its expectation did not materialise. The economy seems to have performed not too poorly if one takes into account the sheer scale of challenges particularly the ongoing Iran war, the 2025 Pakistan floods, and the confusion caused by the US tariffs that stemmed from transactional trade policies. Copyright Business Recorder, 2026

Date: 2026-06-12

Details: Published June 12, 2026 Updated about 2 hours ago By Dr Omer Javed A budget is not just a mere accounting exercise of expenditure and revenue, but reflects a commitment to economic policy in terms of taking forward the governance, and incentive structures, under overall economic policy â€˜directions.â€™ Taking special note of directions is all the more important when faced with serious challenges, as is the ongoing case in terms of climate change crisis, related â€˜Pandemiceneâ€™ phenomenon, and elevated level of conflict situation. Moreover, the budget should be cognizant of needs to ameliorate particularly difficult economic realities; for instance, currently in terms of water resource management and security, energy sustainability, poverty, unemployment, and high interest payments facing the country. Also, the budget reflects economic policy â€˜orientationâ€™ â€“ which principally reflects the needed economic directions â€“ decided in the International Monetary Fund (IMF) programmes; currently two in terms of extended fund facility (EFF) programme, and resilience and sustainability facility (RSF). Last, but not the least, in a federation, as is the case in Pakistan, the centre and federating units should overall have a unified budget direction. Overall, budget should be a seriously thought-out mix of financial realities, needed economic ambition, and creative policy mind-set. There is also a notion going around for quite a long time now that whether it is a macroeconomic stability providing budget or an economic growth budget, which is a wrong claim to make if seen through the lens of any time horizon beyond the very short-term. The important thing to focus on here is the length of time involved. Any aggregate demand squeeze policies to rein in inflationary pressures, and accepting economic growth sacrifice has to be over one, or at most two budgets, or fiscal year cycles, which should be an appropriate amount of time to lay sustainable basis of macroeconomic stability, and also not unnecessarily hurt economic growth in the process, which over this period of time should be put on a stable, upward trajectory. Stability, and growth being on a sustainable pathway, would have resulted because of better targeting of productive, and allocative efficiencies through a non-neoliberal role of government and non-austerity policy, resulting in turn adoption of a â€˜balanced approachâ€™ on the aggregate- demand and supply-side. Moreover, this approach will likely enhance level of public and private investments. Overall, this policy approach would also likely enhance the build-up of resilience, diminishing, in turn, the impact of exogenous shocks if they appear. Short of this balanced approach, especially in developing countries like Pakistan, where inflation generally is equally a fiscal phenomenon, and not just significantly caused and controlled by mainly monetary-side tools, it is even wrong to say that macroeconomic stability is reached, as is being claimed. Even in developed countries the efficacy of monetary policy as a principal tool in reining in inflation is no more the case due to changing global economic environment being more prone to significant aggregate supply-side shocks. Here, it needs to be mentioned that even in developed countries, previously overboard efforts to reduce inflation through monetary policy (or monetary austerity) resulted, in general, in lack of inclusive economic growth and did not allow reaching needed build-up of resilience for instance, in terms of greening the economy, or being more prepared against the â€˜Pandemiceneâ€™ phenomenon. A May 29, Project Syndicate (PS) published article â€˜Central banking in an age of global supply shocksâ€™ pointed out in this regard: â€˜Monetary policy is operating in a new environment, under conditions that are fundamentally different from those in which modern inflation targeting was designed. The orthodox framework was built for a world in which most macroeconomic shocks affected demand, aggregate or sectoral supply disruptions were small enough to â€œlook through,â€ and central banks could rely on a stable Phillips curve linking aggregate labour-market slack to weaker inflation. Unfortunately, none of those assumptions are fit for a geopolitically fragmented world characterized by frequent supply shocks.â€™ Therefore, any stability, which is not based on an appropriate level of correction of both demand, and supply-side factors â€“ in Pakistan in general traditionally, and in particular in the wake of Covid-19 pandemic, Ukraine War, and recent conflict in middle east (ME) has primarily an aggregate supply-side determination of inflation, and more broadly macroeconomic stability, which, in turn, then likely feeds a strong negative shock to economic growth â€“ is not stability but a very unstable status quo, which is nothing more than a very temporary stability projection, given it has very fickle basis; any attempt to loosen the noose of aggregate demand, or any exogenous aggregate supply shock, and this so-called stability quickly dissipates. In that sense, budgetary attempts for a number of years in one direction claiming to be stability first, and mainly focusing on aggregate demand side factors, are highly unlikely to keep the damage relatively optimally low with regard to economic growth sacrifice, and also will likely never find a meaningful level of stability to complement stability with growth objective. This is most likely the reason why subsequent budgets over the medium-term, coming with the approval of being in line with IMFâ€™s core policy design thought-process, reflecting, in turn, quite a harmonious approach of both authorities and IMF programmes apparently, have not been able to achieve any stability that is worth relying on, as made quite clear in the lack of confidence of policy consistently looking to not loosen the aggregate demand side squeeze in any meaningful way. For instance, when inflation came quite a long way down, even in single digits, the real interest rate remained quite significant, indicating active imported-, and cost-push inflationary channels actively feeding into inflation, which required even negative real interest rate (or non-monetary austerity) for greater private investment, and lesser burden on fiscal space in terms of interest payments, resulting in greater support, and direction to private investment in terms of a non-neoliberal role of government using this fiscal space to a meaningful extent to enhance public investment. Moreover, targeting of primary surplus (fiscal austerity) together with monetary austerity policy framework further diminished the extent of development spending. The budget should instead focus on putting fiscal deficit on sustainable grounds in terms of keeping elevated levels of development expenditure target for revenue, growth, and exports enhancement, which, in turn, would signal policy to align with budgetâ€™s policy correcting orientation, and adopt non-neoliberal, and non-austerity approach. From the revenue side, the budget should target greater income-based taxation, and less consumption-based taxation â€“ which would result in broad-basing income taxation, while in terms of indirect taxation there is already very wide base - to bring sustainable macroeconomic stability and growth, and build-up of resilience at the back of greater investment that it will likely lead and reinforce budget targets in this direction in subsequent budgets. The question that economic policy should therefore address and that needs to be reflected in budget orientation is whether a neoliberal, and austerity pathway will continued to be followed, which, of course, does not make sense, given how will doing the same will deliver different results, when the consequences include sharp rise in poverty, unemployment, and inequality, not to mention the lack of reform on the supply-side, including with regard to enhancing resilience by greening the economy, especially its energy base in terms of meaningfully shifting towards renewable/alternate sources of energy. The upcoming budgets â€“ federal, and provincial â€“ therefore need to understand the shortcomings of neoliberal, and austerity budgeting over the years â€“ at both the centre, and federating units levels â€“ of mainly squeezing aggregate demand side, and thinking it will deliver macroeconomic stability has not worked, and even after paying (unnecessarily) a lot of economic growth sacrifice. Stability and growth both need a relatively balanced policy approach, which this budget should provide, reflecting through expenditure, and revenue targets that allow focus on both the demand side, and the supply side. (TO BE CONTINUED) Copyright Business Recorder, 2026

Date: 2026-06-12

Details: Published June 12, 2026 Updated 18 minutes ago By Anjum Ibrahim Growth rate for the outgoing fiscal year has been estimated at 3.7 percent, a rate lower than the budgeted 4.2 percent and lower than Indiaâ€™s by around 3 percent, but higher than the 3.2 percent in 2024-25, and 2.6 percent in 2022-23 â€“ a rate rise critical if success was to be claimed in transitioning from pro-stablisation policies â€” the primary objective of the ongoing International Monetary Fund (IMF) programme â€” to growth promotion policies. Stabilisation was achieved through higher foreign exchange reserves of 17.19 billion dollars as of 29 May 2026, a figure cited by the Finance Minister, while the Survey noted reserves of 15.8 billion dollars on 8 May against end April reserves of 14.8 billion dollars. These reserves held by the State Bank of Pakistan are largely debt based, with over 10 billion dollar roll-overs parked with the SBP by two friendly countries. Gross debt was 83 trillion rupees as of March 2026 posting a growth of 3.4 percent over the same period of the year before. Stabilisation requiring severely contractionary monetary and fiscal policies (considered to be anti-growth) continued in 2025-26 (IMF condition in all the three programme loans since 2019 on pain of programme suspension) and reports suggest they are likely to continue next fiscal year with over-ambitious tax targets as well as a policy rate likely to be upped as early as this coming Monday given the 15 June scheduled meeting of the Monetary Policy Committee as headline inflation rose by 0.8 percent in May and core inflation by one percentage point when compared to April 2026. The rise in average inflation July-April 2026 to 6.2 percent from 4.7 percent in the comparable period the year before was attributed to the Gulf crisis, a statistic that householders assess individually each time they go to the market or access a service; while 1.8 million new employment opportunities were linked to higher GDP growth. The unemployment rate was cited at 7 percent though independent economists argue that the rate is much higher â€“ at almost 22 percent if the labour Force Survey is used as a yardstick. These two statistics with serious political overtones are being cited as the reason behind the poor electoral performance of PML-N in recent Gilgit-Baltistan elections. The Finance Minister cited the rise in the number of businesses, IPOs, and the rise in the earnings of freelancers to 900 million dollars as. Indeed, though the actual impact on the general public is not yet apparent. In addition, he referred to the issuance of Pakistanâ€™s first-ever sovereign Panda Bond in Chinaâ€™s onshore capital as another major achievement; however, the total amount is RMB 1.75 billion which is equivalent to 250 million dollars only though it carries only 2.5 percent interest. The 3.7 percent growth rate will no doubt be challenged by economists on two counts. First, an IMF team expressed dissatisfaction at Pakistan Bureau of Statistics (PBS) development of a new Producer Price Index (PPI) under its Technical Assistance leading to a deferral of its 30 June scheduled completion to October â€“ PPI defined as the average change over time in the selling prices received by domestic producers and their output â€“ a key statistic for economic and business decision-making and inflation monitoring. And second, it is as yet unclear whether this growth rate is being attributed to a rise in output or a draw-down in inventories. It is relevant to note that in 2021-22 the then Khan administration was pleasantly surprised when the growth rate was estimated at 6.1 percent; however, the rise was due to a draw-down on inventories subsequent to the lifting of lockdown associated with the COVID-19 months. It is therefore relevant to note that consumption households rose to 82.6 percent of Gross Domestic Product in 2026, exhibiting a growth of 11.4 percent against 6.68 percent in the previous year, while government consumption as a percentage of GDP increased to 9.94 percent. Total consumption rose to 93.57 percent of GDP in 2026 against 92.95 percent last year was no doubt reflective of a rise in inflation. The rise in consumption ties in well with the 4.1 percent growth in the services sector with the largest component being wholesale and retail trade where middlemen, especially in agriculture, dictate the prices. The Finance Minister during the traditional unveiling of the Economic Survey claimed that comparison must be made between the growth rate for the outgoing year and past years and began with 2023, perhaps overlooking the fact that the Khan administration was replaced by the incumbent government on 11 April 2022. Outstanding stock of contingent liabilities was cited at 4322 billion rupees July-March 2026 against 3632 billion rupees in the same period last year â€“ a rise of a disturbing 19 percent To conclude, the Finance Ministerâ€™s narrative that the country had achieved much but three exogenous factors notably the Middle East conflict, the floods in September and the tariffs imposed by President Trump impeded the full attainment of the administrationâ€™s objectives falls by the wayside given the continuation of policies that are anti-growth. Copyright Business Recorder, 2026

Date: 2026-06-12

Details: Published June 12, 2026 Updated 19 minutes ago By Ali Khizar The economic team proudly said that GDP growth is at a four-year high. Well, growth is still not at 4 percent in as many years of their regime. One may wonder whether to be jubilant or sad upon knowing this fact. Well, it is yet another year of stabilization. Nothing else. As someone aptly put it, the economy is being kept in an induced coma without the needed operation. That is the art of economic management of the current team. They say the glass is half full. However, almost every other stakeholder sees it as half empty â€” evident from investment-to-GDP hovering at a low rate of 13-15 percent. FDI is at a record low. Unemployment is creeping up and inflation is on the rise again after coming down to SBPâ€™s medium-term range of 5-7 percent. Call it stabilization or stagflation â€” the bottom line is that the misery of the common man is nowhere close to over enough to appreciate the encouraging picture presented by the government. The finance minister wants investment to be in the high teens and desires local investment to take the lead, with foreign investment to follow. He knows the solution lies in lower taxation, energy, and financing costs. He is looking at the finer points of doing away with regulatory hurdles and has emphasized policy consistency. The only consistency about him is repeating all the pep talks, but without delivery. Taxation on formal corporates and individuals â€” including all super taxes and surcharges â€” has only moved up in his regime and is currently at the highest-ever level in history. Financing cost has come down over the last year, but there is not much liquidity left in the system to lend to the private sector, as the government borrows it all. Now the private sector and free-market champions are talking about boosting concessionary finance as the way to go. Well, not many years ago, they bashed the subsidy model presented by the previous regime â€” perhaps the next may say the same for the incumbents. They talk about the decline in the debt-to-GDP ratio. However, they have little to say about the problem of the propensity to service debt. They do not talk much about growing domestic debt beyond the banking sectorâ€™s capability, as SBPâ€™s OMO injections have quadrupled in the last three years to over Rs15 trillion. They blame external factors for worsening macro indicators lately. They are right. Indeed, the situation has changed after the Iran-US war. However, they have a role to play, as overreliance on the petroleum levy in days of skyrocketing international oil prices has contributed to jacking up inflation, which pushed SBP to increase the policy rate and, in turn, increased the governmentâ€™s debt-servicing bill. That leaves less room for fiscal accommodation. There is nothing to talk about on tax reforms. When the question was posed to the FBR chairman, he used his intelligence to outsmart the reporter by framing the answer in absolute numbers. They explain numbers in dollars in days when the currency is overvalued, which may change in a jerk when there is a jerk in the currency. However, he had no concrete response to the tax shortfall of Rs2.2 trillion in the last two years. The finance team has no answer to its inability to expand the tax base and bring traders and others into the tax net. The story is the same. Live day by day. Comply with IMF targets by taxing the same base and ask for more time before we can think of growth, as next yearâ€™s growth is likely to be below 4 percent too. Having said that, one may appreciate that the government is not making silly mistakes, as a few previous regimes did. But the question is for how long, as the patience of the powers that be is said to wearing thin and stabilisation fatigue is seeping in. And the only thing that can change this is tax reforms. Letâ€™s see what the government has in its kitty today to positively surprise us in the budget speech. Letâ€™s hope against hope. Copyright Business Recorder, 2026

Date: 2026-06-12

Details: Published June 12, 2026 Updated 15 minutes ago By Abdul Rasheed Azad ISLAMABAD: The manufacturing sector registered a strong recovery during 2025-26, as the Large Scale Manufacturing (LSM) sector witnessed a growth of 6.5 percent, a sharp turnaround from the â€“0.69 percent contraction last year, revealed the Economic Survey 2025-26 released here on Thursday. According to the Economic Survey, notable growth was observed in food (9.77 percent), tobacco (11.70 percent), petroleum products (10.92 percent), rubber products (14.26 percent), electrical equipment (11.87 percent), automobiles (61.66 percent), transport equipment (39.93 percent), furniture (20.45 percent), and other manufacturing (football, 23.06 percent). However, pharmaceuticals (â€“5.14 percent) and machinery & equipment (â€“8.72 percent) recorded negative growth. Electricity, gas, and water supply contracted by 10.63 percent, reflecting a 24.9 percent decline in subsidies (from Rs 1,190 billion to Rs 893billion), slower output from distribution companies, and a 2.7 percent rise in the electricity deflator. The construction sector grew by 5.73 percent, down from 8.77 percent last year, supported by higher construction-related expenditure across private, public, and general government sectors. The rebound in LSM was primarily supported by relative monetary easing, as the policy rate declined substantially to 10.5 percent by December 2025, from its peak of 22 percent in FY 2024, reducing borrowing costs and improving liquidity conditions for businesses. Although the policy rate was subsequently raised to 11.5 percent at the end of April 2026 in response to emerging geopolitical risks, liquidity conditions during most of FY 2026 remained comparatively supportive. The earlier monetary easing is expected to continue supporting industrial activity in the coming months. This improvement in financial conditions was also reflected in credit flows to industry, where lending to high-weighted manufacturing sectors expanded during July-March FY 2026, with either working capital or fixed investment financing showing an upward trend. The increase in working capital financing supported short-term production needs amid improving liquidity, while the rise in fixed investment lending indicates a gradual revival in capacity expansion. Within manufacturing, credit growth was broad-based, with notable contributions from food products, textiles, wearing apparel, non-metallic mineral products, and motor vehicles. In addition, tariff rationalization measures introduced under the National Tariff Policy supported industrial activity by facilitating easier access to imported raw materials, intermediate goods, and industrial machinery at relatively lower costs, thereby improving competitiveness and production efficiency. The improved performance also reflects easing inflationary pressures, a stable exchange rate, better foreign exchange availability, and a gradual recovery in domestic demand. Improved availability of imported inputs and reduced supply-side disruptions enabled industries to operate at relatively higher capacity utilization levels compared to previous years. On a year-on-year (YoY) basis, LSM grew by11.1 percent in March 2026, compared to a contraction of 2.4 percent in the same month last year. Meanwhile, on a month-on-month (MoM) basis, LSM declined by 5.2 percent in March 2026, compared to an 8.8 percent decline in February 2026. Out of 22 industrial groups, 16 recorded positive growth during July-March FY 2026, with the main contribution from Food, Wearing Apparel, Automobile, and Coke & Petroleum products. The food group recorded a strong growth of 9.8 percent during July-March FY 2026 against the contraction of 3.2 percent last year. Notable growth of 31.0 percent was observed in the production of sugar, bakery products, and chocolate and sugar confectionery, supported by better crop harvests, thus contributing to the overall growth of the food group. Wheat and rice milling and cooking oil also remained positive with 1.4 percent and 1.2 percent growth in production during the reviewed period. In contrast, tea blended, vegetable ghee, and starch & its products observed contraction of 10.0percent, 3.0 percent, and 0.02 percent, respectively. Meanwhile, the beverages sector posted a growth of 7.7 percent, driven by strong performance in juices, syrups & squashes. The textile sector growth remained moderate at0.7 percent during July-March FY 2026, compared to a growth of 2.5 percent in the same period last year. Growth in yarn (1.8 percent), cloth (0.2 percent), woolen & worsted cloth(32.4 percent), and woolen blankets (7.8 percent)were the key contributors to the sectorâ€™s performance. Moreover, the increasing demand for fixed investment borrowing, along with an increase in textile machinery imports (20.9 percent), signals the industryâ€™s intent to expand and modernize operations, reinforcing positive growth prospects in the coming months. However, challenges persist in the jute segment, where output of jute goods declined sharply by 35.3 percent due to continued operational inefficiencies. The wearing apparel sector sustained its growth momentum with 6.6 percent growth during July-March FY 2026, against 7.6 percent in the same period last year. The continued expansion reflects the strengthening position of the ready made garment industry, driven by improved competitiveness and rising demand in both domestic and international markets. This is further evidenced by a 5.9 percent increase in export quantity and a 3.8 percent rise in export values during July-March FY 2026. Coke and Petroleum products posted a strong growth of 10.9 percent in July-March FY 2026, against 4.9 percent last year. The main contributors to this performance were high-weighted products such as high-speed diesel (18.1 percent), motor spirit (14.5 percent), diesel oil (309.6 percent), jet fuel oil (7.5 percent), and petroleum products n.o.s. (53.1 percent), reflecting increased demand from the transport, industrial, and power generation sectors. The automobile sector maintained its growth momentum, recording a growth of 61.7 percent during July-March FY 2026, against the growth of 40.0 percent in the same period last year. This robust performance reflects improved macroeconomic fundamentals, including declining inflation, exchange rate stability, and alower policy rate, which collectively reduced borrowing costs and restored consumer andinvestor confidence. Other transport equipment also performed well with 39.9 percent growth during the period under review. Tobacco, paper & board, and computer, electronics & optical products remained positivewith 11.7 percent, 0.1 percent, and 1.2 percent,respectively. Although their weights in the manufacturing index are relatively small, their positive contributions reflect improving industrial activity in these segments. The pharmaceuticals sector contracted by 5.1 percent during July-March FY 2026, comparedto a 2.3 percent increase in the same period lastyear. This deceleration reflects a more subduedperformance in liquids/syrups, injections, andcapsules, while galenical, ointments, and tablets witnessed the growth of 100 percent, 6.5 percent,and 0.9 percent, respectively. The sectorcollectively contributed a negative 0.31 percentage points to cumulative LSM growth. The chemicals sector contracted by 1.4 percent during July-March FY 2026, against thecontraction of 5.5 percent last year. Within this group, chemical products declined by 2.2 percent, driven by reduced output in industrial chemicals and basic materials, while fertilizer production declined marginally by 1.0 percent. The non-metallic mineral products grew by 8.2percent during July-March FY 2026, against a 10.5 percent contraction in the same period lastyear. The expansion was largely driven by risingdemand from construction-related activities, reflected in a 9.1 percent increase in cement production. Growth in electrical equipment by 11.9 percent further reinforced the improving momentum in construction and allied industrial activities. The iron and steel sector continued to underperform, recording a contraction of 6.3percent during the period under review. However, imports of iron and steel increased by 5.5 percent in value terms and 10.5 percent in quantity terms during the period under review,indicating a shift toward imported products tomeet domestic demand. Other manufacturing (football) recorded substantial growth of 23.1 percent during July March FY 2026, supported by strong external demand for footballs ahead of the FIFA World Cup 2026, reinforcing Pakistanâ€™s strong position in the international sports goods market. Furniture production also turned positive with 20.5 percent growth after a sharp contraction of 61.1 percent last year. Copyright Business Recorder, 2026

Date: 2026-06-12

Details: Published June 12, 2026 Updated about 2 hours ago ISLAMABAD: Total tax exemptions, concessions/reduced rates, zero-rating and special tax treatments to various businesses, sectors/industries, lobbies/groups and investors have cost the government Rs 2,352.81 billion in 2025-26 against the downward revised figure of Rs 2,434.73 billion in 2024-25, reflecting a decrease of Rs 81.92 billion. The Economic Survey (2025-26) released on Thursday revealed that the cost of tax exemptions showed a decrease of 3.36 per cent during 2025-26 as compared to tax exemptions in 2024-25. However, tax expenditure (cost of exemptions) totaled at Rs 2,352.81 billion during 2025-26 as compared to the original figure of Rs 5,840.2 billion in 2024-25, reflecting a massive decrease of Rs 3,487.39 billion. The figure of Rs 5,840.2 billion for the cost of tax exemptions was given in the Economic Survey (2024-25) issued last year. In this case, the cost of tax exemptions witnessed a decrease of 59.71 per cent during 2025-26 as compared to tax expenditure in 2024-25. The tax expenditure figure of Rs 2,352.81 billion for 2025-26 has been mentioned in the Economic Survey (2025-26) launched here on Thursday. It is important to mention that the Ministry of Finance had issued a figure of Rs 5,840.2 billion of tax expenditure for 2024-25 last year. Later, the Ministry of Finance has downward revised the tax expenditure figure for 2024-25 from Rs 5,840.2 billion to Rs 2,434.73 billion, reflecting a decrease of Rs1,850.5 billion. The Ministry of Finance has issued â€œErrataâ€ of the tax expenditure figure for 2024-25 in last yearâ€™s Economic Survey (2025). If the total cost of exemptions (Rs 2,352.81 billion) during 2025-26 has been compared with the downward revised figure of 2024-25, i.e.,Rs 2,434.73 billion, the total cost of tax exemptions now stands at Rs 81.92 billion for 2025-26. Breakup of downward revised tax expenditure figures or corrected figures for 2024-25 revealed that the cost of income tax exemption was Rs 545.23 billion; sales tax Rs 1,237.11 billion and customs duty Rs 652.39 billion, taking total to revised figure of Rs 2,434.73 billion, as per corrected summary of tax expenditure (Errata) for 2024-25. The tax-expenditure report-2026 pinpointed that sales tax exemption to petroleum products, duty concessions on imports, reduced rates of sales tax, and overall sales tax exemptions on imports and local supplies were major contributors to the increased revenue loss during 2025-26. The latest survey has not mentioned revenue loss on account of tax exemptions available to industrial units located in erstwhile tribal areas during 2025-26. The revenue loss due to sales tax exemption from imports and local supplies stood at Rs 566,949 billion in 2025-26. The Economic Survey (2025-26) disclosed that the sales tax expenditure remained the highest during 2025-26 as compared to revenue loss on account of income tax and customs duty. All kinds of sales tax exemptions/concessions caused revenue loss of Rs 1,273,977 million; followed by income tax loss of Rs 579,698 million and customs duty revenue loss of Rs 499,136 million during 2025-26. The survey disclosed that the fixed sales tax regime on cellular mobile phones caused a revenue loss of zero rupees in 2025-26 as compared to Rs 87,950 million in 2024-25. The Federal Board of Revenue (FBR) has suffered a revenue loss of Rs261 billion on account of sales tax exemption on imports during 2025-26 as compared to Rs372 billion during 2024-25, reflecting a decrease of Rs111 billion. Sales tax exemption on local supplies caused a revenue loss of Rs305 billion in 2025-26 as compared to Rs613 billion in 2024-25, reflecting a decrease of Rs308 billion. The cost of income tax exemptions amounted to Rs579.7 billion against Rs800.8 billion, showing a decrease of Rs221.1 billion and the cost of customs duty exemptions was Rs499.14 billion in 2025-26 against Rs785.8 billion in 2024-25, reflecting a decrease of Rs286 billion. The Economic Survey has not mentioned revenue loss on account of the exempt business income granted to independent power producers (IPPs). Similarly, the survey has not mentioned any revenue loss from capital gains. The accumulative revenue loss on account of tax credits amounted to Rs75,940 billion in 2025-26 against Rs101 billion in 2024-25, showing a decrease of Rs26 billion. The income tax exemption from special provisions of the Income Tax Ordinance has caused revenue loss of Rs10.9 billion during 2025-26 as compared to Rs41.1 billion in 2024-25. The income tax exemption from total income has revenue impact of Rs 437,996 billion during the period under review. The income tax exemption available to the deductible allowances caused revenue loss of Rs 4.01 billion in 2025-26 against Rs 16.4 billion in 2024-25, showing a decrease of Rs 12.4 billion. The reduction in income tax rates has revenue implications of Rs50.71 billion during 2025-26 as compared to Rs 45 billion in 2024-25, showing an increase of around Rs 5 billion. The FBR has suffered a massive revenue loss of Rs566.95 billion in 2025-26 as compared to Rs985.594 billion in 2024-25 due to sales tax exemptions available under the Sixth Schedule (Exemption Schedule) of the Sales Tax Act. The loss on account of sales tax exemption (import and domestic stage) has been decreased by nearly Rs565 billion. The FBR has suffered a loss of Rs635.841 billion due to sales tax exemptions available under the Eight Schedule (Conditional Exemption/reduced rates) of the Sales Tax Act, 1990, during the period of 2025-26 against Rs617.347 billion in 2024-25. The revenue loss from conditional exemptions has been decreased by Rs635.22 billion. The total revenue loss from the zero-rating facility granted to various sectors under the Fifth Schedule of the Sales Tax Act, 1990, amounted to Rs8.774 billion during the period under review against Rs 6.83.429 billion in 2024-25. The FBR has not specified any revenue loss to the exemptions within the federal excise regime, reflecting no loss occurred on this account. The cost of income tax exemptions was Rs579.7 billion in 2025-26 against Rs800.8 billion in 2024-25. The cost of exemptions in respect of customs duty has been calculated at Rs499.14 billion in 2025-26 as compared to Rs785.9 billion in 2024-25, reflecting a decrease of Rs286.76 billion. The exemption of customs duty available under Chapter-99 (special classification provisions) of the Customs Act has caused a revenue loss of Rs 17 billion in 2025-26 against Rs 33.481 billion in 2024-25, reflecting a decrease of Rs 1.383 billion. The concessions under the Fifth Schedule of the Customs Act, 1969 caused a revenue loss of Rs 205.655 billion in 2025-26 against Rs 379.746 billion in 2024-25, reflecting a decrease of Rs174.091billion. The FBR has suffered revenue loss of zero rupees in 2025-26 against Rs 61 billion in 2024-25 on account of tariff concessions and exemptions available under Free Trade Agreements (FTAs) and the Preferential Trade Agreements (PTAs). Similarly, exemption of customs duty on the items by the automobile sector, exploration and production (E&P) companies, general concessions and the CPEC caused a loss of Rs 275.772 billion in 2025-26 against Rs 133.236 billion in 2024-25, showing an increase of Rs142.48 billion. The export-related exemptions cost revenue loss of zero rupees during 2025-26 against Rs178.435 billion during 2024-25. Copyright Business Recorder, 2026

Date: 2026-06-12

Details: SALIENT FEATURES BUDGET 2026-27 SALES TAX ACT 1990 The proposed budgetary measures pertaining to Sales Tax for FY 2026-27 are: 1. RELIEF MEASURES i. Grant of exemption from sales tax to magazines ii. Extension in exemption on import of CKD for electric vehicles till 30.06.2027 iii. Enhancement in scope of exemption on parts of aircrafts for import and lease by M/s PIACL iv. Withdrawal of exemption of sales tax on family planning devices v. Abolition of tampon tax vi. Exemption of sales tax to boost strategic investment in shipping vii. Exemption to strategic imports for SCO summit and counter terrorism viii. Exemption of sales tax on import of capital goods for upgradation and overhaul of existing refineries. ix. Addition of new S. No. in the Sixth Schedule x. Extension in date of sunset for electric vehicles till 30.06.2027 2. REVENUE MEASURES i. Expansion of Third Schedule to ensure payment of sales tax at consumer price by the manufacturers at manufacturing stage ii. Withholding of sales tax by the toll manufacturers from unregistered buyers iii. Enhancement in scope of withholding sales tax by AOPs and individuals from unregistered persons iv. Imposition/recovery of 3% VAT from the manufacturers if the imported raw material is sold in same state v. Rationalization of amount of penalty on certain offences and inclusion of three more offences in section 33 for imposition of penalty 3. STREAMLINING MEASURES i. Insertion definition of advance receipt invoice, algorithmic settlement mechanism, electronic invoicing system, national faceless centre and production monitoring system ii. Streamlining of definition tier-1 retailers. Inclusion of retailer having two hundred million or more annual turnover, in the category of tier-1 retailer iii. Insertion of explanation to clarify the time of delivery of goods to the recipient iv. Grant of power to Board to outsource the function of valuation of goods v. Addition of new proviso in section 6 to impose tax on steel sector on the basis of monthly electricity units consumed vi. Addition of new proviso in section 8B to enhance or decrease limit of input tax adjustment vii. Insertion of proviso in section 9 for adjustment through issuance of debit and credit notes electronically. viii. Insertion of new section 11H for faceless audit and assessment. ix. Substitution of sub-section (2) of section 21 to discourage fake/flying invoices and fraudulent activities x. Substitution of sub-section (1) of section 23 for issuance of invoice against exempt supplies also. xi. Insertion of new sub-section (8A) in section 25 for audit by the Chartered Accountant or Cost and Management Accountant xii. Insertion of section 30AA â€“ faceless jurisdiction xiii. Insertion of section 30DDDB for establishment of Directorate General (Field Compliance) by Inland Revenue xiv. Insertion of new section 32C for creation of National Faceless centre xv. Substitution of section (2) and (3) of 40C for production monitoring system and video analytic xvi. Addition of new sub-section (6) in section 40C for seizure and confiscation of goods without affixing tax stamps, stickers etc. xvii. Insertion of new section 40F for auction of confiscation goods xviii. Insertion of section 45C â€“ faceless appeal procedure xix. Insertion of section 47AA â€“ Algorithmic Settlement Mechanism xx. Insertion of section 47AAA â€“ Independent case scrutiny committee xxi. Addition of new sub-section (3) of section 56B for maintaining centralized directory xxii. Addition of proviso under Twelfth Schedule to restrict sale of imported same state goods. *** â€ƒ SALIENT FEATURES BUDGET 2026-27 INCOME TAX ORDINANCE 2001 1. RELIEF MEASURES: i. Reduction in tax rates for salaried individuals: Income tax rates for salaried taxpayers have been reduced through restructuring of tax slabs. Additional intermediate slabs have been introduced and the threshold for the maximum tax rate of 35% has been increased from Rs. 4.1 million to Rs. 7 million. ii. Abolition of tax on deemed income from immovable property: Section 7E, relating to taxation of deemed income from capital assets situated in Pakistan, has been omitted. iii. Rationalization of Super Tax: Super Tax has been abolished for persons having income of up to Rs. 500 million. The rate has been reduced from 10% to 8% for persons having income of more than Rs. 500 million. However, these concessions do not apply to banking, ENP and fertilizer sectors. iv. Reduction in advance tax on sale and purchase of immovable property: Advance tax rates under sections 236C (4.5 to 5.5 percent) and 236K (1.5 to 2.5 percent) have been reduced and converted into lower flat rates of 2.75% and 1.5% to encourage documentation and facilitate transactions in the real estate sector. v. Rationalization of tax collection from exporters: Tax collection on export proceeds (1% withholding tax and 1% advance tax) has been reduced from 2 % to 1.25% in order to encourage exports. vi. Extension of concessionary tax rate for IT and IT-enabled services exports: The reduced tax rate of 0.25% for exporters of IT and IT-enabled services has been extended from 2026 up to Tax Year 2029. vii. Reduction in tax on foreign payments through cards: Advance tax on foreign remittances made through debit, credit and prepaid cards has been reduced from 5% to 0.5%. viii. Adjustability of tax on e-commerce transactions: Tax deducted on ecommerce transactions shall be adjustable for sellers having turnover exceeding Rs.200 million. ix. Tax credit for integration with FBR systems: A tax credit equal to 10% of the investment made in electronic resources for integration with FBRâ€™s computerized systems has been introduced to facilitate documentation and digital compliance. x. Withdrawal of advance tax on foreign TV plays and advertisements: Advance tax on payments for foreign television plays and advertisements has been withdrawn. xi. Exemptions for welfare and charitable entities: Income tax exemption has been extended to specified charitable and welfare organizations including Pakistan Red Crescent Society, Shaheen Foundation, Bahria Foundation, SIUT and Dawat-e-Hadiya. These entities already had approval u/s 2(36) of the Ordinance and two exemption as available in Clause 66 of Part I of the First Schedule. This exemption facilitates the entities as they are not required to obtain exemption from the Commissioner every year. xii. Exemption for Special Purpose Vehicles under asset-backed securitization: Income of qualifying Special Purpose Vehicles established for asset-backed securitization has been exempted to facilitate capital market development. xiii. Facilitation for Resident Pakistanis on ownership of foreign moveable and immovable assets: Currently Capital Value Tax is being charged on foreign movable and immovable assets of resident Pakistanis. The same is proposed to be abolished. xiv. Enhanced turnover threshold for withholding exemption of small traders: The turnover threshold for exemption from withholding tax for small traders has been increased from Rs. 100 million to Rs. 200 million. xv. Automatic issuance of exemption certificates for whole year: Funds and eligible non-profit organizations meeting prescribed conditions shall be entitled to issuance of exemption certificates for the whole financial year. xvi. Determination of cost of inherited immovable property and family settlements: The law has been clarified regarding determination of cost basis of inherited immovable property and tax treatment of family settlements after death. 2. REVENUE MEASURES: i. Tax on sham life insurance policies: In order to discourage misuse of life insurance policies and to reduce arbitrage through sham life insurance policies, a tax has been proposed on such schemes. ii. Withholding tax on income from social media platforms: A withholding tax regime has been introduced on revenues received by digital content creators and social media influencers from platforms such as YouTube, Facebook, Instagram and TikTok. Banking and financial institutions shall deduct tax on such receipts. iii. Rationalization of withholding tax rates on services: The withholding tax structure on services has been revised. The rate for specified services has been enhanced, independent professionals have been separately categorized and rates for certain other services have been rationalized. iv. Revision of minimum tax rate for distributors and wholesalers: The reduced minimum tax rate for distributors, dealers, sub-dealers and wholesalers of specified sectors has been increased from 0.25% to 0.5%, subject to prescribed documentation requirements. v. Algorithmic cross-matching of banking and tax information: Banking companies and Electronic Money Institutions shall electronically provide information relating to high-value deposits and withdrawals for algorithmic comparison with tax declarations to identify significant mismatches and broaden the tax base. vi. Strengthening of electronic integration of businesses: The Board has been empowered to require specified persons to install electronic resources and integrate business systems for real-time reporting of transactions. Failure to comply may result in disallowance of expenditure. vii. Rationalization of penalty regime: Penalties for non-compliance, including failure to furnish statements, integration failures, late inclusion in ATL and incorrect withholding tax claims, have been enhanced to improve deterrence and adjust inflation. viii. Application of Tenth Schedule to capital gains on listed securities: The exclusion available from enhanced tax rates applicable to non-ATL persons on capital gains from listed securities has been withdrawn to encourage tax compliance and return filing. 3. STREAMLINING MEASURES: i. Establishment of National Faceless Centre: A National Faceless Centre is being established to conduct faceless audits, assessments and appeals through technology-driven processes, reducing taxpayer interface and enhancing transparency. ii. Introduction of Algorithmic Settlement Mechanism: A new automated settlement mechanism has been introduced to allow taxpayers to settle identified discrepancies through a technology-based process without separate penalty or default surcharge. iii. Independent Case Scrutiny Committee: An independent mechanism has been introduced for scrutiny of departmental litigation to improve quality and consistency of tax litigation management. iv. Streamlining of Alternative Dispute Resolution (ADR): The ADR framework has been revised to improve efficiency and facilitate quicker resolution of tax disputes. v. Streamlining taxation of shipping income of non-residents: Comprehensive provisions have been introduced to define Authorized Shipping Agents and strengthen taxation and compliance relating to nonresident shipping operations. vi. Streamlining computation of capital gains on listed securities: The role of NCCPL in computation and determination of capital gains on listed securities has been expanded and clarified. vii. Mandatory electronic filing and machine-readable financial statements: Companies shall be required to submit financial statements in electronically readable formats to facilitate automated processing and analysis. viii. Special audit through accountants, cost accountants and actuaries: The Commissioner has been empowered to require re-audit, inventory valuation or actuarial valuation by independent experts in appropriate cases. ix. Engagement of audit experts and rationalization of disclosure provisions: The Board has been enabled to engage specialists and strengthen disclosure mechanisms to improve audit effectiveness and compliance. x. Establishment of Directorate General (Field Compliance), Inland Revenue: A dedicated Directorate General (Field Compliance) has been created to strengthen compliance functions. xi. Broadening of special procedure for small traders and shopkeepers: The scope of special procedures for small traders and shopkeepers has been expanded through amendments in section 99B. xii. Technical, consequential and administrative amendments: Various streamlining, administrative and consequential amendments have been made to improve clarity, implementation and administration of the Income Tax Ordinance, 2001. ***

Date: 2026-06-11

Details: Published June 11, 2026 Updated about an hour ago By Naveed ButtZulfiqar Ahmad ISLAMABAD: The opposition Pakistan Tehreek-e-Insaf (PTI) on Wednesday launched a blistering attack on the federal government, accusing it of unconstitutionally attempting to curtail provincial shares under the National Finance Commission (NFC) Award in what it termed a brazen violation of the 18th Amendment. Speaking on a point of order in the National Assembly, acting PTI chairman Barrister Gohar Ali Khan criticised the government for shifting its responsibilities onto the provinces, warning that borrowing had soared to unprecedented levels in the countryâ€™s history. â€œProvincial shares under the NFC Award must be fully transferred in accordance with the 18th Amendment. What you cannot do directly on NFC, you cannot do indirectly either,â€ he said, insisting that the federal budget was not a political issue but a constitutional imperative. Gohar also underscored the importance of defence spending, saying the nationâ€™s armed forces must remain â€œinvincibleâ€ and that it was the federal governmentâ€™s duty to fully fund the defence budget. Turning to economic governance, he condemned the governmentâ€™s four-year record, highlighting failed reforms in the Federal Board of Revenue (FBR) that had negatively impacted the business community. He called for the immediate appointment of a Chief Election Commissioner and two members of the commission whose terms expired more than a year ago, declaring that they â€œmust go home.â€ On electoral reforms, Gohar pressed the government to adopt the oppositionâ€™s proposal for electronic voting machines to ensure transparency and prevent rigging. He also rejected the results of the Gilgit-Baltistan elections, alleging manipulation in favour of the Pakistan Peopleâ€™s Party (PPP) and Pakistan Muslim League-Nawaz (PML-N). The opposition leader in National Assembly Mehmood Khan Achakzai expressed concern about ongoing protests in Azad Jammu and Kashmir (AJK), warning that the law-and-order situation in the country is worsening. He also linked this instability to broader security challenges the country is already facing in Balochistan, suggesting that unrest is now spreading to AJK as well. He demanded access to former Prime Minister Imran Khan, allegedly held in solitary confinement, and threatened parliamentary protests if the partyâ€™s meetings were blocked. Responding, Law Minister Azam Nazir Tarrar described Kashmir as the â€œjugular vein of Pakistanâ€ and called for political unity, asserting that the Popular Action Committeeâ€™s actions were influenced from across the border. He said a committee formed by the prime minister had received 38 demands from AJK residents, of which 35 had been met, and noted that electricity was being supplied at a subsidised rate of three rupees per unit. Tarrar added that an All-Parties Conference (APC) on Kashmir had been held, suggesting PTI leadership would have been better served by attending rather than delivering speeches in the assembly. He dismissed objections to the Gilgit-Baltistan elections, calling allegations of rigging â€œbaselessâ€ in the age of social media, while emphasising the need for consensus and serious dialogue on Kashmir. However, Tarar, who also holds the portfolio of Minister for Human Rights, remained silent on the restrictions on meetings with Imran Khan, even though the former prime minister is reportedly being denied access to his party leaders, family, and legal team. Copyright Business Recorder, 2026

Date: 2026-06-11

Details: Published June 11, 2026 Updated about 2 hours ago EDITORIAL: Pakistan is simultaneously running tight fiscal and monetary policies through primary fiscal surpluses and positive real interest rates. Growth has been compromised as a result of these stabilization efforts. However, these policies apparently are being pursued in silos, without proper coordination, they are also stoking inflation, which, after declining last year, is on the rise again and has prompted a 100 basis points (bps) increase in the policy rate in the latest monetary policy review by the State Bank of Pakistan (SBP). The government may pass the buck to the IMF (International Monetary Fund) by arguing that these measures are mandatory under the programme. The real question, however, is why these conditions were accepted in the first place, especially under the Resilience and Sustainability Facility (RSF). Policy institutes have also highlighted this concern. According to a research paper by the Policy Research and Advisory Council (PRAC), fiscal policy is injecting cost-push inflation through the petroleum levy (PL). Consequently, the SBP is increasing the policy rate to counter inflation which, in turn, hikes the governmentâ€™s borrowing cost, given that it is by far the largest borrower from the banking system. To keep the fiscal deficit under control, the government then imposes new taxes. Higher borrowing costs and exorbitantly high tax rates have, overall, discouraged capital formation and kept investment low. The country needs to break this vicious cycle in the upcoming budget. A few years ago, Pakistan began increasing the petroleum levy to generate federal revenues that do not form part of the divisible pool and therefore are not shared with the provinces. Its yield for the federal government is around 2.5 times more efficient than FBR taxes, 57.5 percent of which have to be transferred to the federating units under the National Finance Commission Award. Initially, the government increased the petroleum levy while reducing the GST rate on petroleum products to zero. That was understandable, as the PL essentially replaced GST. However, unlike GST, which had a ceiling of 17-18 percent, there is no cap on the petroleum levy. At current prices, the effective levy amounts to around 44 percent of the retail price of petrol and 13 percent for High-Speed Diesel (HSD). This would not have been as problematic had international oil prices remained stable. Yet, while many economies lowered taxes on petroleum products to cushion consumers from global price volatility, Pakistan moved in the opposite direction, transferring a disproportionately high burden onto fuel prices. Today, petroleum prices in Pakistan are among the highest in the region. This has pushed inflation back into double digits, forcing the SBP to reverse its earlier monetary policy stance and raise the policy rate by 100bps to 11.5 percent. That, in turn, feeds back into the fiscal side of the equation. It is true that roughly half of the increased borrowing cost eventually flows back to the government through taxes on bank profits and interest income, as well as through higher SBP profits. Nevertheless, the remaining burden still has to be financed either through new taxes or cuts in other expenditures. The story does not end there. Pakistan already has one of the highest GST rates in the region at 18 percent, and there remains a possibility, however slim, that it could be raised to 19 percent. Moreover, many direct taxes are effectively collected in an indirect manner through instruments such as the minimum tax on turnover that goes up to 15% for non-corporate and other levies. All of these costs are ultimately passed on to consumers, adding further to inflationary pressures. The government needs to rethink its strategy. Otherwise, the stabilization programme will continue to fall short of its objectives. For the fifth consecutive year, GDP growth has remained below 4 percent, while the investment-to-GDP ratio and foreign direct investment (FDI) are languishing at abysmally low levels. Fiscal and monetary policies should complement each other. If one is required to remain tight, the other should be accommodating. This is not possible when the fiscal policy only views revenues from point of benefit to the federal government alone and accepts conditions of foreign lenders solely to obtain fresh financing. It is about time the budget, which is likely to be announced tomorrow, revised the current model for federal revenues that is tilted overwhelmingly towards indirect taxes that increase production costs and burden the poor far more than the rich. Any new tax that is imposed or any increase in rate of an existing tax or levy should be evaluated by calibrating its impact on inflation and exchange rate that are the domain of the SBP, which is responsible for monetary policy. Copyright Business Recorder, 2026

Date: 2026-06-11

Details: Published June 11, 2026 Updated about 3 hours ago By Mushtaq Ghumman ISLAMABAD: Despite claims of notable stabilization, Pakistanâ€™s economy in FY2025â€“26 remains fundamentally fragile, with underlying vulnerabilities masked by short-term gains and favorable external inflows. According to Economic Survey (July-April) 2025-26, expected to be unveiled on Thursday (June 11) by Finance Minister Senator Muhammad Aurangzeb, the ongoing conflict in the Middle East has emerged as a significant external risk to both the global economy and emerging economies. Before the conflict, the IMF had projected global growth of 3.3% in 2026 and 3.2% in 2027. However, the IMF revised its growth forecasts downward due to conflict and projected global growth of 3.1% in 2026, followed by a modest recovery to 3.2% in 2027. Emerging markets and middle-income economies are projected to rebound from 3.8% in 2026 to 4.1% in 2027, while low-income developing countries are expected to accelerate from 4.8% to 4.9% over the same period. Under a moderate conflict scenario, assuming an early resolution, the IMF projects that emerging and developing economies will remain relatively resilient, supported by robust domestic demand driven by a growing middle class and sustained investment in technology and infrastructure. Following the outbreak of the conflict in late February 2026, global oil prices surged sharply from approximately 72 per barrel (pre-conflict) to a peak of nearly USD120 per barrel. In Pakistan, this external price shock resurfaced inflationary pressures. Average inflation during Julyâ€“April FY2025-26 rose to 6.2%, compared to 4.7% in the same period of the previous fiscal year. More notably, monthly inflation rose to 10.9% in April 2026 compared to 0.3% in April 2025. In response, the National Price Monitoring Committee (NPMC) effectively managed these growing inflationary pressures through weekly monitoring of essential item prices. Pakistanâ€™s GDP growth in FY2025â€“26 rose to 3.7%, up from 3.2% in the previous fiscal year, reflecting broad-based improvements across agriculture, industry, and services. LSM showed a notable turnaround, posting growth of 6.1% in FY2025â€“26 compared to a contraction of 0.7% in FY2024â€“25. On the external front, weakening exports and a recovery in import demand led to a widening of the trade deficit. However, robust remittance inflows and growing services exports helped contain pressures on the external account, supporting the balance of payments. The resulting improvement in foreign exchange reserves contributed to exchange rate stability, while continued fiscal discipline and prudent macroeconomic management reinforced overall economic stability. Sectoral performance during 2025-26 Agriculture: The agriculture sector exhibited moderate improvement during FY2025-26 and recorded a growth of 2.9%, with important crops including cotton, rice, sugarcane, maize, and wheat collectively recording a growth of 0.6% over the previous year. Despite a high growth base of 19.7% last year, other crops grew at 2.4% in the current financial year, driven mainly by substantial increases in gram (50.4%), potato (27.6%), mangoes (11.6%), banana (30.8%), turmeric (25.1%), and chillies (9.2%). This improvement can be attributed to a high base effect and weather-related constraints. Nevertheless, improvement in gram and mungbean production, better irrigation management, and supportive market conditions continued to support the subsector. The cotton ginning and miscellaneous component recorded modest growth of 0.1%, reflecting subdued cotton output during the year. Livestock maintained its growth of 3.8% in FY 2025-26 compared to 2.9% last year. This was mainly due to increasing commercialization, improved disease management, expansion in dairy and poultry activities, and rising consumer demand. Forestry and fishing subsectors also posted growth of 2.0% and 1.7%, respectively. Industrial sector: The industrial sector recorded a growth of 3.5% in FY2025-26 compared to 5.6% in FY2024-25. The manufacturing sector was the major driver in the industrial sector, posting a strong recovery, growing by 6.6% compared with 2.0% last year. The improvement was largely supported by better performance of LSM industries, improved domestic demand, easing inflationary pressures, and relatively stable macroeconomic conditions. Industrial activity showed a notable improvement during FY2025â€“26. LSM recorded a growth of 6.1%, compared to a contraction of 0.7% in last year. Positive growth has been observed in food (9.7%), tobacco (11.7%), petroleum products (10.9%), rubber products (14.3%), electrical equipment (11.9%), automobiles (61.7%), transport equipment (39.9%), furniture (20.5%), other manufacturing (Football) (23.06%). The improvement was mainly driven by better production performance across key manufacturing segments, improved supply conditions, and easing input constraints, which collectively supported stronger and more stable industrial activity compared to the previous year. Mining & Quarrying industry has witnessed a growth of 0.4%, as compared to a contraction of 3.7% last year, due to a mixed trend in output. While coal (4.7%), limestone (3.7%), and other minerals (4.3%) have increased, natural gas (-2.6%) and crude oil (-0.3%) have posted negative growth. This sector is still facing challenges in mineral extraction and exploration. The electricity, gas, & water supply sector showed a contraction of -10.6% compared to 29.6% last year, mainly due to a high base effect after exceptional growth last year. Another contributing factor was the reduction in budgeted subsidies to Rs. 893 billion, compared to Rs. 1,190 billion in the previous year. The modest growth in the output of WAPDA and related companies and a relatively low sectoral deflator also weighed on the sectorâ€™s nominal growth. Small-scale manufacturing maintained robust growth at 8.5%, though slightly lower than 8.9% last year. Services sector: Growth in the services sector accelerated to 4.1% in FY 2025-26 from 3.1% in the previous year. Within the services sector, growth was broad-based across most subsectors. Wholesale & retail trade expanded by 3.7%, supported by growth in agriculture, manufacturing, and imports. Information & communication recorded a strong growth of 7.5%, led by computer programming and consultancy services. Public administration and social security grew by 8.5%, while education and health services increased by 5.2% and 6.9%, respectively, reflecting higher public sector expenditure. Transport & storage posted growth of 2.3%, with gains in railways, postal services, and road transport partly offset by declines in air and water transport. Other private services rose by 3.7%, supported by professional, technical, and administrative activities. Finance and insurance recorded modest growth of 0.3%, mainly due to a high base effect and a higher deflator. Overall, the performance of the services sector reflects continued economic stabilization and a broad-based recovery in domestic activity. Savings and Investment: National savings stood at 14.1% of GDP, compared to 14.9% in the previous year. Domestic savings were recorded at 7.0%, slightly lower than 7.9%. This decline reflected higher consumption pressures in a recovering economy. Foreign savings made a modest positive from a negative of 0.5% to 0.2%, supporting the overall resource envelope. Despite internal and external shocks, the total investment remained stable at 14.4% of GDP in FY 2025-26. cInflation: Average CPI (National) recorded at 6.2% during Julyâ€“April FY 2025-26, compared to 4.7% in the comparable period of last year. Monthly CPI inflation YoY stood at 10.9% in April 2026, compared to 0.3% in April 2025, mainly due to higher food and energy prices caused by the ongoing conflict in the Middle East. Food inflation increased by 4.0% during Jul-Apr FY 2025-26 compared to 0.1% in the same period last year. Non-food inflation rose by 7.7% compared to 9.0% previously, and core inflation reached 7.6% compared to 9.9% last year. These trends suggest a moderation in underlying demand pressures and relatively stable input costs. Urban inflation rose to 6.3% from 5.7%, while rural inflation increased to 6.1% from 3.3%, reflecting price pressures across both food and non-food components in rural areas. Additionally, the Wholesale Price Index slightly increased to 2.3% from 2.2%, while the Sensitive Price Indicator eased to 4.1% from 4.9%, reflecting the impact of administrative, policy, and relief measures. External sector: The external sector demonstrated stability during Jul-Apr. FY 2025-26, despite devastating floods and the recent Middle East conflict. The current account recorded a moderate deficit, with services-sector exports and workersâ€™ remittances on an upward trajectory. In contrast, exports of goods recorded a slight decline while imports increased owing to enhanced economic activity in the country. The trade in goods deficit widened by USD5.6 billion (26.3%) as exports of goods recorded a contraction of USD 1.5 billion (5.4%) while imports of goods witnessed an increase of USD 4.1 billion (8.5%) during Jul-Apr. FY 2025-26. The exports of goods recorded a slight decline during the same period, but the increase in imports mainly resulted in a widening of the trade deficit in goods. While services exports are growing, however, they are not enough to offset the significant goods trade deficit. This imbalance reflects stronger domestic demand for imports. Exports witnessed a contraction of 5.4 of total goods exports, recorded a growth of 2.1 and 13.2% respectively in total export receipts during the period under review. Food group exports plunged by USD 1.6 billion (28.9%) as exports of major food commodities recorded a decline. Exports of rice fell by USD 0.92 billion (35.6%) due to intensified competition and a decrease its in international market price (around 25%), while there was no export of sugar in CFY due to a ban for domestic price stability compared to USD 0.4 billion exports in the previous year period. The export receipts of the other manufacturing group declined by 1.3 % to USD 3.4 billion from USD 3.5 billion. Imports recorded an increase of 8.5% and stood at USD52.8 billion during Jul-Apr FY2025-26 from USD48.6 billion in the corresponding period of the last year. Broad-based increase was witnessed in transport, food, machinery, agricultural & other chemicals and metal groups imports as they grew by USD 1,423 million (89.1 percent), USD 820 million (13.0 percent), USD 773 million (11.2 percent), USD 560 million (7.4 percent) and USD 355 million (8.2 percent) respectively. Whereas petroleum group and textile groups imports fell by USD 511 million (4.0 percent) and USD 420 million (8.8 percent) respectively. The Middle East conflict caused 40.5% sharp spike in the average crude oil price during March 2026 to USD95.58/bbl from USD68.01/bbl recorded in February 2026. Moreover, supply disruptions through the closure of the Strait of Hormuz, which accounts for one-fifth of global oil and LNG trade, resulted in rising insurance premiums and freight costs on crude oil imports and triggered a sharp rise in energy prices globally. Trade in services deficit narrowed by USD 425 million (17.3 percent) and stood at USD 2,040 million during Jul-Apr FY26 compared to USD 2,465 million in the corresponding period of previous year. Exports of services recorded an increase of USD 1,242 million (17.7 percent) and stood at USD 8,270 million. The ICT, travel, other business exports recorded an increase of 21.1 percent, 39.5 percent, 25.4 percent whereas transport and general government services exports decreased by 6.9 percent and 1.7 percent, respectively. The ICT sector is a key focus of the current government, aimed at boosting the economy, creating jobs, and improving the quality of life. The sector is receiving support through incentives and initiatives that include infrastructure development, global marketing, skills training, freelancer support, and international certifications. Imports of services increased by USD 817 million (8.6 percent) during Jul-Apr FY26 and stood at USD 10,310 million compared to USD 9,493 million in the corresponding period of previous year. Travel, transport, ICT and government services imports increased by 2.80 percent, 6.6 percent, 28.2 percent and 6.3 percent during the period under review, whereas financial and other business services imports decreased by 18.2 percent and 10.6 percent, respectively. The Workersâ€™ remittances inflows maintained upward momentum and stood at USD33,859 million during Jul-Apr, FY2025-26, compared to USD31,207 million in the corresponding period of the previous year. Due to recent turbulence in the Middle East, remittances inflows in April 2026 were down by 7.6% and stood at USD 3,538 million as compared to USD 3,831 million in March 2026. The major contributing destinations during Jul-April FY 2025-26 are Saudi Arabia (20.9%), UAE (18.6%), UK (13.6%), EU Countries (11.6%), other GCC countries (8.5%), and USA (7.9%). The significant rise can be attributed to a stable exchange rate, better economic prospects in host countries, and the governmentâ€™s facilitation measures to incentivise remittances through the banking channel. Pak Rupee vis-Ã -vis US dollar parity remained stable during the period under review. The average exchange rate stood at Rs 280.94 in Jul-Apr FY 2025-26 compared to Rs 278.75 in the corresponding period of the previous year. The average Real Effective Exchange Rate (REER) Index during Jul-Apr FY 2025-26 stood at 103.16 compared to 101.49 in the corresponding period of the previous year. The stable macroeconomic conditions, along with continued reforms undertaken by SBP, helped in stabilizing the exchange rate. Pakistanâ€™s total gross liquid foreign exchange reserves are reported as USD21.3 billion as of 8th May 2026 compared to USD14.8 billion at the end of April 2025. The overall rise in official reserves helps in strengthening external buffers and growing macroeconomic confidence. Fiscal developments: Pakistanâ€™s fiscal performance showed considerable improvement up to the third quarter of FY 2025-26. Total revenue increased by 10.7%, reaching Rs. 14,799.3 billion, up from Rs. 13,367.0 billion collected during the corresponding period of last year. This growth was supported by a 11.3% rise in tax revenue, driven largely by 10.1% increase in FBR tax collection. Both direct and indirect taxes grew by 12.4% and 7.9. Federal non-tax revenue rose by 8.2% largely on account of one-off SBP profit transfer, petroleum levy, dividends from investments, and royalties on oil and gas. Provincial non-tax revenues reached Rs. 277.5 billion, recording a growth of 36.7 %, mainly on account of a significant growth in profits from hydroelectricity. Total expenditure stood at Rs. 15655.6 billion during July-March FY 2025-26, reflecting a decline of 4.2% over the same period of last year. Current expenditures declined by 2.2%, whereas development expenditure increased by 26.8%. Servicing of domestic debt reduced by 25.9%, whereas servicing of foreign debt increased by 0.6%. Non-interest current expenditures grew by 18.8%, mainly due to higher spending on defense and grants, as well as higher provincial current expenditures. Overall fiscal deficit stood at Rs 856.4 billion (0.7 of GDP) during the corresponding period of last year and against the annual target of 3.9 during the period under review, indicating a remarkable achievement in the governmentâ€™s prudent expenditure management. Gross public debt of Pakistan stood at Rs. 83,285 billion as of March 2026, posting a growth of 3.4% during July-March FY 2025-26. Public debt is mainly dominated by domestic debt, while external debt is declining from 38% (Jun 2023) to 31% (March 2026), reducing exchange-rate risk. Borrowing has shifted toward medium and long-term securities, increasing the Average Time to Maturity from 2.8 years (Jun 2024) to 3.86 years (Mar 2026), and lowering refinancing risk by reducing reliance on short-term Treasury Bills. Monetary developments: Broad money (M2) expanded by 7.3% from July 1, 2025, to May 1, 2026, compared to an expansion of 3.8% during the same period last year. The increase in liquidity was mainly driven by a rise in the Net Foreign Assets (NFA) of the banking system, which grew by Rs. 1,518.2 billion compared to Rs. 1,218.2 billion last year. Net Domestic Assets (NDA) also recorded an expansion of Rs. 1,431.8 billion, compared to Rs. 138.5 billion in the corresponding period last year. This was primarily due to higher net borrowings from scheduled banks for budgetary support, a net retirement of loans from the SBP and a contraction in other items (net). Additionally, financing for commodity operations witnessed a net retirement of Rs. 50.1 billion, reflecting continued reforms such as the rationalization of wheat procurement and the gradual abolition of the minimum support price (MSP). As underlying inflationary pressures eased, driven by the dissipation of earlier food and energy price shocks and the anchoring of inflation expectations, the SBP continued its easing monetary policy stance during the first three quarters of FY 2025â€“26. However, inflationary pressures resurfaced in the last quarter of the ongoing fiscal year, with headline inflation accelerating to 10.9 percent in April 2026 compared to 0.3 percent in April 2025. In response, the SBP increased the policy rate by 100 bps to 11.50 percent, marking a definitive reversal of the easing cycle. Employment Generation: Employment expands steadily by 1.8 million in FY 2025-26 amid improving economic growth due to higher public and private investment. The services sector was the largest contributor to employment generation, adding around 1.1 million jobs in FY2025-26 driven by trade, transport, ICT, finance, and community services, 0.3 million jobs in agriculture sector, and 0.4 million jobs in industry Public investment provided enabling role in job creation by supporting infrastructure, energy, connectivity, urban services, and human capital development that crowded in private investment, thereby expanding employment opportunities across all sectors. Federal and provincial governments were simultaneously implementing several employment-focused initiatives to strengthen labor market participation, entrepreneurship, technical skills, and job matching mechanisms. These programs include Prime Minister Youth Business and Agriculture Loan Scheme, Prime Minister Youth Skill Development Program, Ba-Ikhtiyar Naujawan Internship Program, etc., at the Federal level. Whereas, Provincial governments were complementing these efforts through targeted interventions, including Punjabâ€™s Rozgar Support and SME financing schemes, Khyber Pakhtunkhwaâ€™s technical training and on-the-job programs, Sindhâ€™s labor-intensive public works and urban services initiatives, and Balochistanâ€™s vocational and rural skill development programs. Copyright Business Recorder, 2026

Date: 2026-06-11

Details: Published June 11, 2026 Updated about 3 hours ago By Naveed ButtZulfiqar Ahmad ISLAMABAD: The National Economic Council (NEC) on Wednesday approved a Rs3.669 trillion national development outlay for the fiscal year 2026-27, including Rs838 billion in foreign aid, and set a GDP growth target of 4 percent. The meeting, chaired by Prime Minister Shehbaz Sharif, also sanctioned Rs1 trillion for the federal Public Sector Development Programme (PSDP), Rs2.218 trillion for provincial development programmes, and Rs451 billion for state-owned enterprises (SOEs). The NEC unanimously approved a four-point agenda and revised economic indicators for the outgoing fiscal year 2025-26, allocating Rs820 billion for the federal PSDP, Rs2,938 billion for provincial development programmes, and Rs355 billion for SOEs. The council approved a GDP growth target of 3.7 percent for 2025-26. In its directives, the NEC urged federal ministries, provincial governments, and public institutions to collaborate closely with the Ministry of Planning to achieve the targets set in the Annual Plan 2026-27. The meeting reviewed performance reports from the Central Development Working Party (CDWP) and the Executive Committee of the NEC (ECNEC) for April 2025 to March 2026. During this period, the CDWP approved 116 projects worth Rs316 billion, while ECNEC sanctioned 72 projects valued at Rs5.117 trillion. Sources said the NEC also approved approximately Rs800 billion for federal savings from provincial shares under the NFC Award for 2026-27. A report on mega projects for 2025-26 was presented, highlighting a newly formulated monitoring and review policy, which includes a pilot project to evaluate development initiatives using artificial intelligence (AI). Under the Uraan Pakistan initiative, the NEC approved 11 national economic development missions. The Ministry for Planning and Development was tasked with preparing a roadmap for these missions in coordination with relevant ministries and provincial authorities. Prime Minister Sharif thanked participants for unanimously approving all agenda items, emphasising that consensus on national issues strengthens the federation and is key to Pakistanâ€™s bright future. He highlighted the importance of unity and collaboration between federal and provincial governments, noting that decisions were taken â€œin the best interest of Pakistan as a team,â€ particularly while preparing the forthcoming national budget. Addressing rising global oil prices, the prime minister stated that Rs128 billion in fuel relief had been provided to shield consumers. He praised provincial governments for their cooperation and stressed the priority of mobilising additional resources. Sharif reaffirmed Pakistanâ€™s commitment to the International Monetary Fund (IMF) programme, attributing recent economic achievements to collective teamwork. Defence funding was also highlighted, with additional allocations aimed at addressing ongoing security challenges, including terrorism. Key development priorities include strengthening healthcare, improving child health, providing education for out-of-school children, creating youth employment, and developing technical and professional skills. Later, in a briefing to journalists, Minister for Planning Ahsan Iqbal said the NEC had agreed to hold meetings on a quarterly basis. He detailed the provincial development allocations for 2026-27: Punjab Rs749 billion, Sindh Rs706 billion, Khyber Pakhtunkhwa Rs455 billion and Balochistan Rs308 billion. Sectoral allocations include Rs206 billion for infrastructure, Rs116 billion for energy, Rs103 billion for water resources, Rs180 billion for the social sector, and Rs13 billion for governance. For federal ministries and divisions, Rs687 billion was approved for development projects, comprising Rs568 billion in local funding and Rs119 billion in foreign aid. For corporations such as the National Highway Authority (NHA) and power companies, Rs313 billion was sanctioned, including Rs177 billion locally funded and Rs136 billion in foreign assistance. Additional allocations include Rs88.8 billion for Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan, Rs41.4 billion for the IT sector, Rs74 billion for education â€“ including Rs45 billion for the Higher Education Commission (HEC) â€“ Rs355.9 billion for transport and communications, Rs54.6 billion for physical planning and housing, Rs22.1 billion for health, and Rs63 billion for Sustainable Development Goals (SDGs) programmes. The NEC also approved Rs56.1 billion for the merged districts of Khyber Pakhtunkhwa, Rs12.6 billion for the production sector, Rs4.6 billion for food and agriculture, and Rs8 billion for industrial development. Copyright Business Recorder, 2026

Date: 2026-06-11

Details: Published June 11, 2026 Updated about 3 hours ago By Recorder Report KARACHI: Former Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and former Senior Vice President of the Karachi Chamber of Commerce and Industry (KCCI), Hanif Lakhani, has urged the government to incorporate the recommendations submitted by trade associations, the federation, and chambers of commerce across the country in the Federal Budget 2026-27. He said that the primary objective of the upcoming budget should not be limited to increasing revenue collection and maintaining economic stability; rather, it should be designed to promote sustainable economic growth. Lakhani emphasised that simplifying the tax system and making it business-friendly are essential for boosting economic activity and attracting investment. He stated that the time has come to move beyond rhetoric and take practical steps to support the business community. He stressed that the industrial sector must be provided with affordable electricity, gas, and other energy sources, while measures should be taken to reduce production costs so that the governmentâ€™s export targets can be achieved. According to him, lowering the cost of doing business is crucial for enhancing the competitiveness of Pakistani exports in international markets. Lakhani further suggested that instead of imposing new taxes, the government should focus on expanding the tax net and bringing the undocumented economy into the formal system. He also called for a review of customs duties and regulatory duties to facilitate the import of raw materials and industrial machinery at lower costs. He noted that special incentives for the IT, agriculture, construction, and export-oriented sectors could significantly accelerate economic growth. Commenting on tax reforms, Lakhani said that expanding the tax net in the new budget would be a major challenge for the Federal Board of Revenue (FBR). However, he expressed confidence that under the leadership of the current FBR Chairman, this objective could be achieved, which would also help reduce the burden on existing taxpayers who are already contributing to the national exchequer. Copyright Business Recorder, 2026

Date: 2026-06-10

Details: Published June 10, 2026 Updated about an hour ago By Zulfiqar Ahmad ISLAMABAD: Prime Minister Shehbaz Sharif on Tuesday underscored the transformative potential of the countryâ€™s agricultural sector, describing it as pivotal to reviving the national economy. He made the remarks during a consultative meeting with a delegation of agricultural stakeholders ahead of the federal budget for fiscal year 2026-27. The delegation comprised representatives from farmer organisations, the dairy and livestock sectors, the value-added sector, seed companies, and both national and multinational institutions. The meeting aimed to seek stakeholder input on the upcoming budget and discuss strategies to strengthen and modernise the agricultural sector. A statement issued by the Prime Ministerâ€™s Office said that the participants lauded the Prime Minister Sharifâ€™s efforts to promote peace amid the current regional situation and welcomed recent reforms, including the newly introduced Seed Policy, describing them as â€œgame-changersâ€ for the sector. Highlighting ongoing initiatives, the prime minister noted that the Pakistan Agricultural Research Council (PARC) was being modernised in collaboration with the Chinese Academy of Agricultural Sciences to accelerate agricultural research. He directed the formation of a committee comprising experts and stakeholders nationwide to advance sustainable agricultural development and sectoral reforms. Sharif emphasised the need for effective coordination between federal and provincial governments to ensure alignment of policies and regulations. He called for special attention to increasing per-acre yields, promoting climate-resilient hybrid seeds, developing horticulture, advancing agricultural mechanisation and enhancing value addition. Addressing provincial responsibilities, the prime minister specifically urged Balochistan to present a comprehensive plan to boost cotton production and instructed the immediate issuance of the notification for the newly reconstituted Cotton Board. He also welcomed proposals for the promotion of dairy and livestock development. â€œThe government will continue consultations and cooperation with all relevant parties to ensure sustainable agricultural development, food security, and stability of the national economy,â€ the prime minister said. During the meeting, participants were briefed on the governmentâ€™s initiatives for farmer welfare. Under the fertility scheme, small-scale farmers are eligible for loans of up to Rs1 million from banks on favourable terms. Farmers are also provided with risk coverage and crop-loss insurance through the State Bank of Pakistan (SBP). Drafts of the National Animal Health Act and the National Breeding Policy were presented to support dairy and livestock growth. Delegation members shared their concerns about sectoral challenges and proposed solutions, while expressing confidence in the governmentâ€™s economic and development policies. Among those attending were Arshad Iqbal, Zeeshan Baig, Mahmood Nawaz Shah, Imad Malik, Rana Naseem, Ahsan Mustafa Bajwa, Jahangir Tareen, Fahad Patel, Shehzad Amin, Khizar Alam Khan, Amina Asif Bajwa, Zahoor Hussain, Usman Zaheer, Ahmed Qadir, Afaq Twana, Shaukat Rasool, and Khalid Khokhar. The meeting was also attended by Minister for National Food Security & Research Rana Tanveer Hussain, Minister for Planning Ahsan Iqbal, Minister for Climate Change Musaddik Malik, Minister for Information Attaullah Tarar, Minister for Power Division Awais Leghari, Minister for Science & Technology Khalid Magsi, Minister for Petroleum Ali Parvez Malik, Minister for Water Resources Muhammad Moeen Wattoo, Minister of State for Finance & Railways Bilal Azhar Kiyani, the special assistant to the prime minister on industries and production Haroon Akhtar Khan and other senior government officials. Copyright Business Recorder, 2026

Date: 2026-06-10

Details: Published June 10, 2026 Updated about an hour ago By Naveed Butt ISLAMABAD: The federal government has proposed an allocation of Rs 27 billion, including Rs5.7 billion in local funding and Rs21.3 billion in foreign assistance, for 20 development projects in the budget for fiscal year 2026â€“27. According to official documents, the federal government has proposed an allocation of Rs2.5 billion for 10 ongoing development projects and Rs24.5 billion for 10 new development projects in the budget for fiscal year 2026â€“27. The allocation for new projects includes Rs21.3 billion in foreign funding and Rs3.2 billion in local funding. Among the new schemes, the government has proposed an allocation of Rs21 billion, entirely through foreign funding, for the Post-Flood 2022 Reconstruction Programme: Resilience Enhancement and Livelihood Diversification in Balochistan in the upcoming fiscal year. The government has also proposed Rs1 billion for the Rising Together Project aimed at the uplift of Pakistanâ€™s 20 poorest districts on a 50:50 cost-sharing basis, Rs300 million for the National Multi-Sectoral Nutrition Programme to Reduce Stunting and Other Forms of Malnutrition, Rs400 million for the Establishment of the National Centre for Brand Development, Rs400 million for the Prime Ministerâ€™s Innovation Support and Startup Grants Programme, Rs948.27 million for the Social Sector Accelerator under HNEYGâ€“National Priority Initiatives (PMBNIP), and Rs300 million for the CPEC Secretariat. For ongoing development projects, the government has proposed Rs400 million for Capacity Building and Institutional Strengthening of the Ministry of Planning, Development and Special Initiatives (PD&SI), Rs500 million for the Development Communication Project, Rs400 million for Strengthening the Ministryâ€™s Information Technology Infrastructure, and Rs350 million for the National Economic Transformation and 5Es Unit (NETU)-Revised, among other initiatives. Copyright Business Recorder, 2026

Date: 2026-06-10

Details: Published June 10, 2026 Updated about an hour ago By Hassan Abbas LAHORE: A majority of participants at the BUSINESS RECORDER FORUM on challenges facing Pakistanâ€™s textile sector backed the normal tax regime over the fixed tax regime, calling for a more equitable and transparent tax structure that accurately reflects actual income levels. DIRECTOR BUSINESS RECORDER RESEARCH ALI KHIZAR leading the session, brought together leading industry figures, tax experts and agricultural specialists to deliberate on the mounting pressures confronting one of Pakistanâ€™s most vital export sectors. Chairman of the All Pakistan Textile Mills Association (APTMA), Kamran Arshad, sounded the alarm over shrinking cotton cultivation areas, warning that the governmentâ€™s decision to permit construction of sugar mills in traditional cotton-growing regions is directly threatening the raw material supply the textile sector depends upon. Arshad described the fiscal environment as unsustainable, stating that the government currently takes back as much as 60 percent of earnings through various taxes. â€œHow can a businessman realistically operate and grow under such a heavy financial burden?â€ he wondered, urging the government to provide electricity and gas at rates competitive with regional peers as a prerequisite for boosting exports. Arshad also rejected the newly-enacted Punjab Infrastructure Development Cess, warning that a 0.90 percent levy on goods manufactured, imported or exported through the province would accelerate deindustrialisation and cost jobs. Signed into law by Governor Punjab Sardar Saleem Haider Khan, the cess, he argued, creates a double taxation burden for Punjab-based manufacturers who already pay the Sindh Infrastructure Cess on consignments transiting that province an inequity that Sindh-based competitors do not face. He cautioned that the widening cost gap between Punjab and manufacturers in Sindh, Khyber Pakhtunkhwa and former FATA regions would push existing businesses to relocate and deter new investment. Shahzad Saleem, Chairman of Nishat Chunian Group, delivered a blunt assessment, stating that Pakistanâ€™s economy is in terrible shape owing to decades of poor decision-making and a persistent reliance on stopgap measures rather than long-term structural reform. He called on the government to place its development expenditure budget on hold to ease the fiscal burden. Saleem also cited the Employeesâ€™ Old-Age Benefits Institution (EOBI) as an example of institutional mismanagement, questioning why pensioners receive so little despite the body holding billions in real estate assets. He warned that imposing excessively high taxes in a country with an already enormous black economy would drive activity underground rather than bringing it into the formal sector, and urged the government instead to ensure reasonable tax rates alongside free healthcare, quality education and security for citizens. On energy, Saleem argued that public discourse has presented only one side of the circular debt story, questioning accountability for the massive cost escalation of the Nandipur Power Project and noting it is ordinary Pakistanis who ultimately bear the cost. Former chairman of the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), Mubashar Naseer Butt, argued in favour of the fixed tax regime, cautioning that granting additional powers to the Federal Board of Revenue would increase the risk of harassment against businessmen. He highlighted a disparity in turnover taxes, one percent on local sales against two percent on exports, and questioned how industry could survive when the overall tax ratio stands at 51 percent against a tax-to-GDP ratio of 13 percent. Asad Shafi, Chairman of APTMA North Zone and owner of retail brand Cross Stitch, lamented that Pakistan has failed to capitalise on the trade war between the United States and China. He called on the government to support thriving local brands in scaling to international markets and urged authorities to extend retail operating hours to 10 pm, warning that early market closures have inflicted a consistent 25 to 35 percent decline in daily revenues, with peak shopping hours between 8 pm and 10 pm being the heaviest casualty. Aurangzeb Shafi, Director of Crescent Bahuman Limited, stressed that a complete supply chain must be in place before any brand can be successfully developed, and urged the government to resolve taxation and energy challenges on a priority basis. Leading tax experts Ikram ul Haq and Huzaima Bukhari, along with an associate professor at the Suleman Dawood School of Business at LUMS, jointly called for a fundamental shift in the countryâ€™s taxation approach. They advocated for bringing the informal sector into the tax net rather than increasing the burden on compliant formal businesses, demanded a uniform tax structure free of preferential exemptions, and stressed the modernisation of the tax collection system to improve efficiency and transparency. Agricultural expert Dr Anjum warned that Pakistanâ€™s cotton crop â€” once celebrated as â€œwhite goldâ€ has collapsed from over 14 million bales in 2005 to historic lows in recent years, driven by erratic weather patterns, severe heatwaves and devastating floods across key growing regions in Punjab and Sindh. However, he offered a note of cautious optimism for the 2026 season in Bahawalpur division, a primary driver of Punjabâ€™s cotton output. Farmers in the region achieved between 80 and 82 percent of an ambitious 567,000-acre cultivation target by late May, buoyed by targeted government initiatives and relatively favourable weather conditions. The forum concluded with broad consensus that the governmentâ€™s primary role must be to facilitate business and collect taxes not to run commercial enterprises and that reducing the tax burden is essential if Pakistanâ€™s export sector is to recover and grow. Copyright Business Recorder, 2026

Date: 2026-06-10

Details: Published June 10, 2026 Updated about an hour ago By Mushtaq Ghumman ISLAMABAD: The Tariff Policy Board (TPB), an inter-ministerial body, headed by the Minister for Commerce, has reportedly decided to exempt defence imports from customs duty, well informed sources told BUSINESS RECORDER. The Board, sources said, has recently been apprised that the Ministry of Defence moved a summary on November 13, 2025 for the Prime Minister to exempt the current 15 percent customs duty on all defence imports. â€œThe proposed exemption was intended to provide financial relief and additional fiscal space to the defence services for meeting their critical operational requirements,â€ the sources said adding that the Prime Minister has approved the summary with the direction that the Finance Division and the Federal Board of Revenue (FBR) would meet all codal and procedural formalities for granting exemption from the Customs Duty on defence imports. Secretary, Ministry of Commerce, Jawad Paul added that in pursuance of the approval/directive of the Prime Minister, a meeting was held under the chairmanship of Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, which was also attended by Secretary Finance, Secretary Commerce, Secretary Defence and Chairman, FBR. According to sources, during the meeting, it was decided that due to procedural technicalities, the exemption of Customs duty cannot be granted in the current financial year. â€œTo implement the directive of the Prime Minister, the exemption of customs duty on defence imports would be granted from July 1, 2026 through Finance Act 2026-27,â€ the sources said adding that in order to fulfill the necessary codal formalities, Secretary Commerce requested the TPB, being the competent forum, to recommend the exemption on defence imports so that the same could be incorporated in Finance Act 2026-27. He also mentioned that seeking approval of IMF regarding exemption of Customs duty on defence imports, is the responsibility of Ministry of Finance. After detailed discussion, all members of the Tariff Policy Board unanimously recommended exemption of customs duty currently imposed on defence imports from July 1, 2026 by making necessary amendments in the 5th Schedule of Customs Act, 1969. An insider told this scribe that the proposal to lower duty on alcohol has been deferred due to negative media impression as was suggested by the Secretary Commerce. â€œYes, reduction on duty on alcohol has been deferred due to fear of negative propaganda in the media despite the fact it is a banned item and is being imported by diplomats,â€ said one the TPB members. Responding to a question regarding reduction tariff on imported Electric Vehicles or Hybrid Vehicles, the final authority has been given to the Deputy Prime Minister and Foreign Minister, Ishaq Dar, who presided over the meeting on this matter on Monday (June 8, 2026). The Board member further stated that Special Assistant to the Prime Minister on Industries and Production, Haroon Akhtar has suggested deviation from the National Tariff Policy (NTP) to support local industry. However, the TPB argued that the government must implement the NTP in letter and spirit as per the agreement with the Fund. The final decision would be taken by the Prime Minister and subsequently by the federal cabinet, in its meeting to approve the federal budget. Copyright Business Recorder, 2026

Date: 2026-06-10

Details: Published June 10, 2026 Updated about an hour ago By Recorder Report PESHAWAR: Chairman, Pakistan Business Forum (PBF) Khyber Pakhtunkhwa chapter, Ashfaq Paracha has urged the provincial government to make industrial development a central pillar of the upcoming budget, stating that sustainable economic growth, employment generation, export enhancement, and revenue expansion cannot be achieved without a strong industrial base. Talking to media on Tuesday, Paracha said that Khyber Pakhtunkhwa possesses enormous economic potential due to its abundant natural resources, strategic location, hydropower generation capacity, mineral wealth, marble reserves, gemstones, tobacco production, agriculture, and tourism. However, despite these advantages, the province remains one of the least industrialised regions of Pakistan. He noted that the KP Government presented a budget of more than Rs 2.1 trillion for FY 2025-26, including an Annual Development Programme (ADP) of approximately Rs 547 billion. While the budget focused on social services and infrastructure, the business community believes that industrial development did not receive the level of attention required to transform the provincial economy. â€œIndustrialisation is the backbone of every successful economy. Unfortunately, KP continues to export raw materials while value addition, processing, and manufacturing take place in other provinces. This deprives our people of employment opportunities, export earnings, and economic prosperity,â€ said Paracha. He observed that KPâ€™s industrial sector has suffered long from inadequate infrastructure, high energy costs, and inconsistent gas supply, limited access to finance, insufficient industrial estates, weak logistics facilities, and lack of investor-friendly mechanisms. Several industrial clusters, particularly in marble processing, furniture manufacturing, engineering products, food processing, pharmaceuticals, and mineral-based industries, continue to face challenges that hinder their growth and competitiveness. Paracha said that despite possessing some of the worldâ€™s finest marble and significant mineral deposits, the province still exports a large proportion of its resources in raw or semi-processed form. As a result, the benefits of value addition, job creation, and export growth are captured elsewhere. The PBF provincial chief emphasised that the upcoming Budget 2026-27 should introduce a comprehensive industrial revival package aimed at strengthening the productive sectors of the economy. He proposed the establishment of a dedicated Industrial Development Fund with significant allocations for industrial infrastructure, modernisation of existing industrial estates, and accelerated development of Special Economic Zones. He further stressed the need for competitive electricity tariffs for industries operating in KP. â€œIt is unfortunate that a province contributing significantly to the countryâ€™s hydropower generation is unable to provide affordable energy to its own industries. Competitive energy rates are essential for industrial expansion and export competitiveness,â€ he added. Paracha called for special incentives for small and medium enterprises (SMEs), which account for the majority of business activity and employment generation. He recommended subsidised financing, technology upgradation support, and simplified regulatory procedures to encourage entrepreneurship and industrial investment. The PBF also urged the government to establish modern mineral processing, marble finishing, gemstone cutting, and food processing facilities across the province. Such initiatives, he said, would help maximize the value of local resources while creating thousands of skilled and unskilled jobs. Highlighting the issue of unemployment, Paracha stated that KP has a huge young populations, with millions of young people entering the job market over the next decade. â€œThe government alone cannot absorb this workforce. Industrial growth is the most effective mechanism for creating sustainable employment opportunities and reducing poverty,â€ he remarked. He further proposed industry-linked vocational training programs, export facilitation centers, improved logistics infrastructure, dry ports, warehousing facilities, and one-window investor services to attract domestic and foreign investment. According to Paracha, industrial development would not only generate employment but also increase provincial revenues, reduce dependence on federal transfers, improve exports, and strengthen the overall economic resilience of the province. Paracha further urged the provincial government to engage chambers of commerce, trade bodies, industrial associations, and the private sector in budget consultations to ensure that industrial development becomes a key driver of economic progress in Khyber Pakhtunkhwa. â€œA strong industry means a strong economy, more jobs for our youth, higher exports, and greater prosperity for the people of Khyber Pakhtunkhwa. The time has come to place industry at the heart of provincial economic policy,â€ he concluded. Copyright Business Recorder, 2026

Date: 2026-06-10

Details: Published June 10, 2026 Updated about an hour ago By Anjum Ibrahim â€œI donâ€™t understand why the budget controversy.â€ â€œWhy not? Muhammad Aurengzeb failed to get anybody on board and the resultâ€¦.â€ â€œThe International Monetary Fund was on board â€“ they approved the budget.â€ â€œWell you need to get some domestic players on board as well.â€ â€œAurengzeb sahib did, I have it on good authority that he raised the salaries of the 7 percent of the countryâ€™s total work force, at the taxpayersâ€™ expense, as well as pensions of the 7 percent of the work forceâ€¦.â€ â€œAnd that is why I keep telling you forget the private sector and go for a government job.â€ â€œAs a journalistâ€¦..â€ â€œI heard for each private journalist there are now ten employed by the government at a much better salaryâ€¦â€ â€œHmmm so now what? The federal government reportedly wants to freeze the divisible pool to this yearâ€™s level and any additional taxes collected not to be part of the divisible pool..â€¦.â€ â€œThat is violative of the constitution right?â€ â€œWho are you to decide that! The constitutional court will decide the matter.â€ â€œOh! How long will that take!? I mean will it be as long as cases against some in jailâ€¦â€ â€œHush, as long as it takes my friend.â€ â€œBut how about reducing the expenditure, I meanâ€¦.â€ â€œNo can do, the salaries must be raised and this is approved by the Fund, but donâ€™t worry the development expenditure can and will be slashed andâ€¦â€ â€œThat happens every year. All administrations show a high development outlay in the budget speech claiming that they are above all previous administrations and then slash it mercilessly during the yearâ€¦â€ â€œOne exception: when Elder Brother was not resident in Raiwind.â€ â€œWell he spent an inordinately long time in the London flats andâ€¦â€ â€œYou know what I mean.â€ â€œYes I guess so why are the Noons dithering â€“ they have a majority after all the bye elections and the tribunal decisions and theâ€¦.â€ â€œA majority of one â€“ they have 170 seats at present and it is better to deal with the PPP rather than their major coalition partner with PhDs inâ€¦.â€ â€œLearn to respect the educated.â€ Copyright Business Recorder, 2026

Date: 2026-06-10

Details: Published June 10, 2026 Updated about an hour ago By Qamer Soomro Our Finance Minister presents the Federal Budget for FY 2026-27 in the cool and comfortable chambers of Parliament. As is customary, the budget speech will be wrapped in polished language and a labyrinth of figures, percentages, projections, and economic terminology. It will be watched anxiously across the length and breadth of Pakistan by business chambers, investors, and ordinary citizens alikeâ€”the latter holding their breath in the faint hope that it may bring some relief rather than descend like a fresh bombshell of inflation and economic hardship. For years, the people have endured an unending cycle of mini-budgets in the form of abrupt increases in petroleum prices, electricity and gas tariffs, and fertilizer costs. These mini budgets trigger a wave of inflation causing chain reaction that sends the prices of essential commodities soaring, while rarely, if ever, bringing them back down. Each increase adds another burden to the shoulders of millions already struggling to survive, tightening the noose around households battling shrinking incomes and rising costs of living. As one walks through bazaars and markets, one finds little evidence of the much trumpeted economic recovery. Under blistering temperatures approaching 50Â°C and amid frequent, prolonged power outages, people desperately haggle over prices they can scarcely afford. The reality on the ground tells a different story from the optimistic narratives often heard in official circles. One encounters village women in bazaars and markets in worn-out clothes carrying malnourished children in their laps, with barefoot youngsters trailing behind. They move from stall to stall, gazing at vegetables, flour, and other necessities, only to return to their huts empty-handed. This heart-breaking scene is not confined to one locality. It is the bitter reality visible across cities, towns, and villages throughout Pakistan. â€œDoes this budget have anything for us?â€ ask the multitudes struggling merely to survive. Their question deserves an honest answer. A large portion of government revenues is consumed by debt servicing, defence expenditures, administrative costs, salaries, and pensions. What remains for education, health, development, infrastructure, and social welfare is often little more than crumbs. Even these scarce resources frequently disappear under the insidious shadow of corruption, leaving little to improve the lives of ordinary citizens. Can a nation claim economic stability when nearly half its population struggles below or near the poverty line? Can recovery be celebrated when millions face hunger and deprivation? Pakistan continues to grapple with one of the regionâ€™s lowest literacy rates. More than 25 million children remain out of school. Healthcare services are deteriorating. Parents are withdrawing children from classrooms because they can no longer afford educational expenses. Despair is driving many young people into depression, addiction, crime, and even suicide. Millions face acute food insecurity. Unemployment remains alarmingly high, while vast numbers of young people enter an already saturated job market every year. Thousands seek opportunities abroad in desperation, while countless others remain trapped in hopelessness at home. Does this reflect genuine recovery, or merely statistical recovery disconnected from lived reality? This august House must reflect upon these painful realities. Parliament is not merely a forum where budget figures are recited and financial statements approved. It is the supreme representative institution of the sovereign people. It must safeguard the peopleâ€™s right to live with dignity, to earn a livelihood, to educate their children, and to hope for a better future. The roots of our economic difficulties are well known: a narrow tax base, elite tax evasion, low exports, excessive imports, chronic trade imbalances, dependence on foreign borrowing, and recurring IMF conditionalities. Yet the burden of adjustment repeatedly falls upon those least able to bear itâ€”the ordinary citizens already gasping for economic breath. This budget, therefore, demands sacrifice from the top, the elite and the privileged class rather than further extraction from the bottom. Real reform requires reducing the size of government, curtailing excessive perks and privileges, eliminating redundant ministries and departments, abolishing unnecessary SAPMs and advisors, discontinuing forthwith the pensionary benefits to former Presidents, PMs and Speakers, rationalizing expenditures, and ensuring that public office remains a responsibility rather than a source of privilege. The nation cannot continue asking the poor to tighten their belts while the corridors of power remain insulated from sacrifice. Parliament, which often demonstrates remarkable unity when protecting its own privileges, must now display the same unity in protecting the interests of the people and reclaiming Pakistanâ€™s economic sovereignty. An indebted nation is not a free nation. Excessive dependence on external lenders gradually erodes national autonomy and limits independent policymaking. The path forward lies in domestic resource mobilisation, expansion of the tax net, export-led growth, agricultural revival, industrial development, investment in human capital, and uncompromising accountability. Only through such measures can Pakistan reduce its dependence on debt and move towards genuine financial self-reliance and economic autarky. Above all, this budget must be a budget for the people. As lawmakers deliberate beneath the high ceilings of Parliament today, they should think beyond spreadsheets and statistics. They should think of the barefoot children wandering through bazaars, of mothers bargaining desperately for basic necessities, of farmers crushed by rising costs, and of young people losing hope on street corners. Let this Parliament rise above partisan divisions and prove worthy of the trust placed in it by the sovereign people. Let it deliver a budget that alleviates poverty, creates employment, strengthens education and healthcare, restores human dignity, and places public welfare at the centre of national priorities. Only then will the budget be remembered not as an annual ritual of accounting, but as a genuine instrument of justice, compassion, and national renewal. Copyright Business Recorder, 2026

Date: 2026-06-10

Details: Published June 9, 2026 Updated about 21 hours ago By Rida KhalidHasan Umair Every year, the months leading up to June become highly charged in the world of business, media and policy. The federal budget becomes the dominant subject of discussion: industry associations lobby for concessions, businesses seek favourable tax treatment, ministries push for their development schemes, and the Ministry of Finance attempts to balance competing domestic demands against the expectations of international creditors. At its core, a budget is meant to provide guidance. Whether in the public or private sector, it is a forward-looking document that sets priorities, allocates resources, and signals how an institution intends to manage its inflows and outflows over the coming year. In the case of government, the budget is also a statement of policy intent: it tells citizens, businesses and markets where public money is expected to go, how revenue is expected to be raised, and what trade-offs the government is prepared to make. While the budget may not be binding in the strictest sense, its credibility depends on the extent to which the government follows the path it has itself announced. In Pakistan, that commitment often appears weak. As a matter of routine, barely weeks or months after the budget is presented, substantial changes are made, creating the impression that the original budget is treated less as a settled roadmap and more as a first draft. By the end of the year, even the adjusted numbers do not always translate neatly into final outcomes. This raises a basic question: if the budget changes substantially during the year, and somehow, the final outcomes still differ meaningfully from the revised plans, how useful is it as a guide to government priorities and public finance management? To examine this, the scorecard compares original budgeted figures, revised estimates, and actual outcomes across FY21â€“FY25. This provides a clearer view of how fiscal estimates change over the budget cycle, and how closely the figures approved at budget time align with eventual outcomes. Understandably, the figures indicate that actual outcomes are closer to revised estimates than to originally budgeted for both revenue and expenditure. Average deviation falls by 7.0 percentage points on the revenue side and by 13.5 percentage points for expenditure when actual outcomes are compared with revised estimates rather than original budgeted figures. This aggregate pattern is also visible in individual expenditure heads. Subsidies deviated from the original budget by an average of 57%, yet when measured against the revised estimate, that gap narrows to just 2%. Debt servicing follows a similar pattern, overshooting the original budget by an average of 9% but landing within 0.1% of the revised figure. This reinforces why the original budget remains the relevant benchmark: the revised estimate is a correction made during the year, while the original budget is the public guidance made to citizens, businesses, and markets. Framework and scoring Budget reliability is a central concern in public financial management. The Public Expenditure and Financial Accountability (PEFA) framework provides a standardised methodology for assessing the quality and effectiveness of public financial management systems. It evaluates key dimensions including budget credibility, transparency, revenue and expenditure controls, and external scrutiny. These assessments help identify systemic weaknesses and support reforms aimed at strengthening fiscal governance. Building on PEFAâ€™s approach to budget credibility, this scorecard applies to the concept for a more focused purpose. While PEFA forms part of a broader public financial management assessment, this scorecard uses the same underlying principle to examine the reliability of estimates across individual expenditure and revenue heads and across fiscal years. The assessment examines the extent to which allocations remain aligned with actual expenditures, identifies heads where adjustments are recurring, and highlights deviations significant enough to question the budgetâ€™s reliability as a planning and resource allocation tool. Each line item is classified through an Aâ€“D scoring matrix based on the percentage deviation. Deviations on either side of the estimate are treated equally, with the extent of the deviation determining the credibility score. The scorecard therefore provides a practical, data-driven way to compare budget credibility across the budget. Budget performance: a five-year review The findings point to an uneven profile across Pakistanâ€™s budget, with reliability varying between inflows and outflows. Using the rating scale, D-rated observations account for a sizeable share of the overall distribution. This pressure is clearest on the revenue side, where weaker scores are more prominent than in expenditure. Scale changes the story. In FY25, indirect taxes missed the original target by around Rs1.5 trillion, making the shortfall material for overall revenue performance. On the expenditure side, debt servicing and provincial share dominate the spending profile, showing why deviations in large heads matter more than percentage variance alone. Scorecard further reveals a mixed picture of budget credibility across Pakistanâ€™s fiscal framework over FY21â€“FY25. While some revenue and expenditure heads remain broadly aligned with original budgetary targets, persistent and recurring deviations in others suggest that the budget does not consistently serve as a reliable predictor of actual fiscal outcomes. The pattern also suggests that budget predictability varies across different revenue and expenditure heads, rather than being evenly distributed. Across the five-year period, only 1 out of 6 revenue heads and 3 out of 9 expenditure heads remain broadly aligned with original estimates for most years. On the revenue side, direct taxes show a relatively stronger track record, with actual collection staying within acceptable deviation ranges in most years. Indirect taxes, however, have consistently fallen short of original budgeted targets, most sharply in FY25 where the shortfall exceeded 20%. This is particularly consequential given that indirect taxes account for approximately 39% of total budgeted revenue, making them the single largest revenue head. Hence, a shortfall of this magnitude therefore translates into a gap of over Rs1,500 billion in FY25 alone. The petroleum levy and State Bank of Pakistan (SBP) profit are the most volatile heads; original budget estimates for both diverged substantially from actuals across multiple years, scoring D in several instances. Provincial surplus transfers similarly underperformed against budgeted figures in most years, reflecting persistent uncertainty in intergovernmental fiscal flows. On the expenditure side, debt servicing is the most significant area of deviation. From FY23 onwards, actual debt servicing consistently exceeded the original budgeted figure by a substantial margin, pointing to the governmentâ€™s limited ability to forecast its debt obligations at the time of budget preparation. Subsidies follow a similar pattern; actual expenditure exceeded budgeted allocations nearly every year, often by a wide margin. Federal PSDP, by contrast, consistently fell below its budgeted target, with actual spending underperforming the original allocation across all five years. The overall pattern points to a two-tier credibility structure. Heads that are mandatory or formula driven such as defence, pensions, and provincial transfers tend to show closer alignment between budgeted and actual figures. Heads subject to policy discretion, external shocks, or implementation constraints show the largest and most recurring deviations. This suggests that while the budget may provide a reasonable guide for obligatory expenditures, it is a less reliable indicator of outcomes in areas where the government retains discretion or faces execution challenges. Toward a more credible budget A credible budget should act as more than an annual announcement. A budget that changes substantially during the year and whose final outcomes still diverge from the original plan raises a legitimate question about its purpose. If the numbers presented are routinely revised within months and consistently missed by year-end, the budget risks functioning as an opening estimate rather than a credible statement of fiscal intent. Not all deviations are avoidable: fiscal management often requires adjustment in response to inflation, financing pressures, policy changes, and external shocks. The concern is not that every estimate must be met exactly, but that repeated deviations in the same heads weaken the budgetâ€™s role as a guide for planning, transparency, and accountability. The scorecard should therefore be read as a tool for identifying where scrutiny is most needed before the next budget is presented. Budget heads that fall below basic credibility for two or more consecutive years should be subject to a higher standard of justification in the next budget cycle. Their estimates need to be anchored in a rolling average of actual outcomes, adjusted where necessary for inflation, policy changes, and macroeconomic assumptions, with any material departure from this baseline explicitly justified by the Ministry of Finance at the time of budget presentation. Pakistanâ€™s Medium Term Budget Framework (MTBF) should also be subject to a mandatory annual reconciliation showing, for each major head, what the MTBF projected three years earlier, what the annual budget estimated, what was revised during the year, and what ultimately materialised. This would shift the burden of proof: instead of optimistic or unrealistic estimates passing unchallenged and deviations being explained after the fact, high-risk budget heads would need to be defended upfront. Closing the credibility gap will not come from treating deviations as failures in themselves, but from making the assumptions behind budget estimates more transparent and the explanations for repeated gaps more disciplined. The value of the scorecard lies in making these patterns visible before budget approval, so that the debate can move beyond headline allocations to the reliability of the numbers on which fiscal choices are based.

Date: 2026-06-09

Details: Published June 9, 2026 Updated about 2 hours ago By Sardar Sikander Shaheen ISLAMABAD: The Senate of Pakistan has announced to have surrendered the savings of Rs1.44 billion to the national kitty through a â€œcomprehensive austerity and expenditure rationalisation programme.â€ The savings exceed the target set by the Finance Division by 500 percent and constitute 15.9 percent of the Senateâ€™s total budget for the outgoing fiscal year 2025-26, the Senate Secretariat said in a statement on Monday. â€œDespite the availability of Rs60 million under the budgetary allocation for the purchase of official vehicles during the current financial year, not a single vehicle was procured, reflecting the Senate leadershipâ€™s commitment to prioritising national interest over institutional convenience,â€ according to the statement. This March, reports surfaced suggesting that the Senate Secretariat purchased a luxury Toyota Land Cruiser vehicle worth Rs90 million for Chairman Senate Yousaf Raza Gilani, a move that earned enormous public backlash, prompting the Secretariat to issue a clarification. In the said clarification, the Senate Secretariat impliedly confirmed the purchase of the luxury vehicle on the said price but insisted that the said vehicle was purchased in the last financial year 2024-25 from the Senateâ€™s â€œbudget savings,â€ and that the vehicle was only delivered in the month of March. In Mondayâ€™s statement, the Senate Secretariat said that the Senate Finance Committee, on the proposal of the chairman Senate, unanimously decided to forgo the proposed allocation for replacement of condemned official vehicles in the forthcoming financial year that is expected to generate additional savings of approximately Rs140 million. The Senate Secretariat said that among the â€œmost significantâ€ of its austerity measures was the suspension of 17 out of 18 procurement projects approved by the Senate Finance Committee, â€œresulting in substantial and immediate savings.â€ Recruitment and other non-essential expenditures were rationalised, administrative overheads reduced, and operational costs brought under strict scrutiny, the statement added. The official transport fleet was substantially grounded, fuel allocations were strictly capped, and usage was subjected to enhanced oversight, the statement said. The provision of refreshments at official meetings and functions was discontinued, while committee proceedings were increasingly shifted to digital and virtual platforms to reduce logistical and hospitality costs. Likewise, all non-essential foreign visits were suspended in line with the broader objective of expenditure restraint, added the statement. Copyright Business Recorder, 2026

Date: 2026-06-09

Details: Published June 9, 2026 Updated about an hour ago By Dr S M Naeem NawazWajid Islam In 1992, Pakistan saved 17.4 percent of its GDP. By 2024, it had fallen to only 6.4 percent. Over three decades, across different governments, economic upturns and downturns, IMF programmes and short periods of stability, the country had lost its domestic savings base. The consequence? An economy unable to fund its investment needs has to rely on foreign savings, resulting in a balance of payments crisis each time. This is not a tale of saving money or living frugally. This is one of the most important, but also the least discussed, macroeconomic disasters of our time. It needs attention in the upcoming budget debate for FY2026-27. The country cannot finance sustainable growth by taxing more and borrowing more; it needs to rebuild its domestic savings base for sustainable growth. The current performance of country savings looks very dismal when compared with the regional peers. Pakistan has been saving on average about 11 percent of its GDP for the past 35 years. In the same period, Bangladesh averaged 21 percent, India by over 28 percent, and Vietnam by almost 30 percent. The gap cannot be explained by income level alone; these countries managed to create an environment where savings were safe and well-rewarded. Those savings ultimately translated into jobs and growth. Conversely, the savings base eroded in Pakistan. Because savings donâ€™t make sense for the average Pakistani. Around 94 percent of all income generated in the economy is consumed on necessities, such as food, rent, power, commuting, healthcare, and education. Whatever little money is left over gets eaten up by rising inflation, which in recent years has always risen faster than the interest offered by banks. When returns on deposits or savings products do not compensate for rising prices, households see little reason to keep money in formal financial instruments. This creates an inflation/consumption trap. Households spend the lionâ€™s share on necessities, and what little is left ends up stashed in cash, committees, and jewellery in the cupboard. These may provide security at the household level, but they do not create an efficient pool of resources for productive investment. The situation is further worsened by the lack of financial literacy and sludge. Millions of Pakistanis, particularly women and rural inhabitants, are unable to access financial instruments due to long distances, extensive documentation, lack of trust, and existing products that are not compatible with their needs and beliefs. Then comes the role of the state, persistent fiscal deficits reduced national savings. Over the years, the country has been spending more than it generates and relies heavily on borrowing, including from domestic banks, leaving almost nothing for the private sector. Banks prefer such lending due to associated lower risks and higher profits, which triggers the crowding out of private investors from the economy. However, all is not lost, and this issue is still resolvable. The upcoming Finance Bill is the natural place to begin with, through the provision of incentives to motivate citizens and nudging them to save. Building on the Policy Viewpoint, â€œMobilizing Domestic Savings: A Finance Bill and Institutional Reform Agenda for Pakistan,â€ by Dr. S. M. Naeem Nawaz (Professor of Economics) and Wajid Islam (Research Economist) at PIDE, the policy response should begin with a targeted National Savings Mobilization Package through the FY2026â€“27 Finance Bill. The principle should be simple. Ensure that systematic saving is more rewarding and secure than stashing away oneâ€™s wealth in the form of cash or gold. Specifically, it requires the revival of a targeted tax relief scheme for approved long-term investment instruments. Previously, such instruments were offered under Section 62 of the Income Tax Ordinance until withdrawn in 2022. It implies the promotion of pension schemes, especially those aimed at younger individuals, women, and self-employed citizens, to encourage saving from an early age. It is pertinent to note that the incentives have to be tailored to serve as a reward for authentic, small, and long-term savers. Caps on the amount of the incentive, minimum investment duration, and clawback provisions for early withdrawals can help keep the fiscal burden at bay. A savings-friendly budget needs to refrain from punishing citizens whenever their money flows into the formal economy. The transaction taxes on bank-based financial transactions have done significant harm by pushing citizens away from banks. Along with incentives, a conducive environment is a prerequisite to enable easy access to financial markets. The country doesnâ€™t need to work from scratch as several options are already available, such as national savings institutions, a broad network of banking outlets, digital payment mechanisms, and Islamic finance institutions. What is needed is a channel that links them in a manner that allows citizens to gain access to these services through digital accounts, easy verifications, and diversity of Shariah-compliant instruments. However, nothing will stick unless the government balances out its books as well. Restraining wasteful expenditure, reducing losses in state-owned enterprises, and using borrowed funds for investments instead of expenditures must become integral parts of any policy for savings. Pakistan has spent too long trying to finance growth without building the savings base needed to sustain it. The choice is not between austerity and growth. The real choice is whether Pakistan will continue relying on foreign savings or begin rebuilding the domestic pool on which durable growth depends. The Finance Bill FY2026-27 should be the starting point. Reward formal long-term saving, protect small savers, reduce public-sector dissaving, and ensure that domestic resources finance productive investment. Copyright Business Recorder, 2026

Date: 2026-06-09

Details: Published June 9, 2026 Updated about 2 hours ago By Naveed ButtZulfiqar Ahmad ISLAMABAD: After two days of intensive negotiations, the federal government and its key coalition partner, the Pakistan Peopleâ€™s Party (PPP), moved closer to an agreement on the 2026-27 federal budget on Monday, with the PPP signalling a cautious endorsement despite earlier reservations. The breakthrough came during a high-stakes meeting at the Presidency, where Prime Minister Shehbaz Sharif and his team met President Asif Ali Zardari and senior leaders from both parties in talks that lasted several hours. The sources said that the federal budget will not be presented on June 10, as both sides have agreed that Finance Minister Muhammad Aurangzeb will announce the date for presentation of federal budget for 2026-27 within 24 hours. The timeline for presenting the federal budget has again come under review, but now sources added that June 12 has emerged as a possible new date, although 10 June remains under consideration. They said that both the government and the PPP agreed to form technical committees to settle the federal governmentâ€™s demand of Rs1.7 trillion from the provinces. The budget had previously been postponed from 5 June to 10 June. Meanwhile, the National Economic Council (NEC) meeting, originally scheduled for today (Tuesday), according to sources will now be held on June 10. According to sources familiar with the discussions, the session, which included top government ministers and members of the PPPâ€™s budget committee, produced broad consensus on most proposals, while technical consultations are expected to continue on a few remaining points. Sources said the discussions were wide-ranging, covering the economy, public relief measures, law and order, provincial rights, and other matters of national importance. President Zardari emphasised that the federal budget should prioritise public welfare, economic stability, and provincial equity, directing that growth targets align with welfare programmes. An official statement from the Presidentâ€™s House confirmed that the leaders focused on the federal budget, national security, internal affairs, and the regional situation. The meeting also addressed other pressing issues, including recent developments in Azad Jammu and Kashmir (AJK) and the outcome of elections in Gilgit-Baltistan. Prime Minister Sharif congratulated President Zardari on the electoral victory, quipping that â€œthe young Bilawal ran a better election campaign than us.â€ President Zardari replied with a smile: â€œAfter all, whose son is he.â€ In a separate meeting, Bilawal met the Prime Minister to discuss the political situation in Azad Kashmir, urging that all issues be resolved through dialogue. While both sides have reportedly agreed on most budget proposals, technical committees will continue consultations to finalise the remaining points. Officials said both parties remain committed to accommodating each otherâ€™s priorities amid fiscal and policy constraints. Officials indicated that preparations are underway to release the economic review of the outgoing financial year by Tuesday evening, despite the shifting schedule. Government officials in attendance included Deputy Prime Minister and Foreign Minister Ishaq Dar, Interior Minister Mohsin Naqvi, Law Minister Azam Nazeer Tarar, Finance Minister Muhammad Aurangzeb, and the adviser to the prime minister on political affairs Rana Sanaullah. The PPP delegation was led by Chairman Bilawal Bhutto-Zardari and included Sherry Rehman, Naveed Qamar, Saleem Mandviwalla, Agha Shahzaib, Sindh Chief Minister Syed Murad Ali Shah, and Raja Pervaiz Ashraf. Raja Faisal Rathore, Prime Minister of Azad Jammu and Kashmir, was also present. Copyright Business Recorder, 2026

Date: 2026-06-09

Details: Published June 9, 2026 Updated about 2 hours ago By Sohail Sarfraz ISLAMABAD: Finance Bill 2026 is likely to introduce tax policy and enforcement measures of nearly Rs 1 trillion in budget (2025-26) including federal excise duty (FED) on naphtha petroleum products, fixed sales tax regime on steel sector and harsh penalties on non-compliant taxpayers refusing digital integration, installation of production monitoring and point of sales (POS) system. Sources told BUSINESS RECORDER that the half of revenue has been estimated from enforcement measures and the remaining through policy measures, taking the total to nearly Rs 1 trillion. The imposition of FED on the naphtha petroleum products is one of the major revenue measures for 2026-27. The Finance Bill 2026 will amend Inland Revenue laws to make the Federal Board of Revenue (FBR) a total faceless entity from July 1, 2026 and this requires digital integration of taxpayers with the FBRâ€™s systems specially production monitoring. Finance Bill 2026 will impose extraordinary penalties on taxpayers, who would fail to comply with the digital integration and production monitoring from July 1, 2026. The faceless Inland Revenue of the FBR will be launched from October 1, 2026, which requires immediate need of production monitoring at manufacturing premises of leading sectors. Besides, the implementation of the POS systems and digital integration will be done at any cost, sources said. The faceless FBR is the top priory of the present government and faceless FBR center IR will be launched in October 2026. The faceless system is not possible without digital integration and therefore harsh punishments are proposed for non-complaint taxpayers under the Finance Bill 2026. The proposals are to impose 18 percent sales tax on solar panels, new items for charging sales tax on printed retail price basis and amend Sales Tax Act to tightened enforcement laws against sellers of illicit products including cigarettes in the market. However, this is subject to the approval of the federal cabinet. Sources told BUSINESS RECORDER that the Prime Minister has recently held a meeting in this regard to improve coordination between federal and provincial governments to check illicit trade across Pakistan. The major focus of the federal budget (2026-27) is to increase enforcement against non-compliant sectors and taxpayers. The sales tax and income tax exemptions, expired on June 30, 2026, would not be extended in budget (2026-27). According to sources, the federal government may make it mandatory from July 1 for manufacturers to print retail prices and the applicable 18 percent sales tax on the packaging of a wide range of consumer goods as well as home appliances such as refrigerators, air conditioners and washing machines. Most of the items of the fast moving consumer goods would be included in the Third Schedule of the Sales Tax Act. The government has decided to introduce stricter measures in the upcoming fiscal year to broaden the tax net and curb sales tax evasion. Copyright Business Recorder, 2026

Date: 2026-06-09

Details: Published June 9, 2026 Updated about 2 hours ago By Tahir Amin ISLAMABAD: The federal government has yet to secure the consensus of provincial governments on a proposal to retain around Rs1.1 trillion to Rs1.2 trillion from the provincesâ€™ shares under the National Finance Commission (NFC) Award for strategic spending and federal development projects, creating uncertainty over the Federal Budget 2026-27. This was stated by Khyber Pakhtunkhwa Finance Adviser Muzammil Aslam while speaking to the media here on Monday. He further said that the budget process remains incomplete as key fiscal figures have yet to be finalized with the International Monetary Fund (IMF). â€œBudget-making process was facing unprecedented difficulties, warning that unresolved disputes between the federal government and provinces, coupled with pending negotiations with the IMF, could delay the presentation of the federal budget beyond June 10â€, said the advisor, while adding that a federal government delegation led by Ahsan Iqbal had met KP Chief Minister earlier in the day to discuss budget-related matters. He said the National Economic Council (NEC) meeting is scheduled for Tuesday, but its postponement cannot be ruled out, given the difficult situation. He added that the KP governmentâ€™s participation in the NEC meeting is linked to being allowed to meet PTI founder Imran Khan. Aslam added that a meeting with PTI founder Imran Khan had become â€œunavoidableâ€ amid the ongoing fiscal negotiations, expressing confidence that the party founder would not reject any reasonable request aimed at resolving the impasse. According to Aslam, the federal government wants provinces to surrender part of their NFC shares to finance strategic requirements and the Public Sector Development Programme (PSDP), but no consensus has been reached. Earlier Rs 1.7 trillion was quoted to be surrender by provinces a per federal government demand, however, the adviser said that based on estimated revenue collection of around Rs 1500 trillion by the Federal Board of Revenue (FBR), provincial governments would have to surrender around Rs 1.1 trillion to Rs 1.2 trillion under the proposed agreement, where KP would have to give up around Rs170-180 billion, making it difficult for the province to meet rising pension and salary expenses. For the current fiscal year, provinces were allocated Rs8.2 trillion from an estimated FBR tax collection of Rs14.13 trillion. He claimed the federal government was making â€˜strategic demandsâ€™ from the provinces while insisting provincial governments would receive the same share of resources as last year. Aslam questioned how the federal government could keep provincial transfers unchanged next year despite higher revenue expectations. â€œEven if the provinces agree, there are serious technical questions about how such an arrangement would work and how IMF-mandated provincial budget surpluses would be achieved,â€ he said. He said the government is considering presenting the federal budget on June 12, although further delays remain possible. Aslam said uncertainty over fiscal estimates has already forced revisions in economic projections. The GDP growth target has been reduced from 4.2 percent to 4 percent, while the size of the PSDP has yet to be finalised. He also questioned how the government still expects to create two million jobs despite lowering the growth target. â€œThe budget process remains incomplete because key figures have not been locked,â€ he said, adding that negotiations with the IMF are continuing. The adviser also questioned the constitutional and legal basis for withholding provincial shares under the NFC Award. He argued that no technical formula exists for such a move and maintained that the NEC is not the appropriate forum to approve it. Aslam also complained about cuts in federal allocations for KP. He said the province was informed on June 1 that it would receive Rs66 billion for the Accelerated Implementation Programme (AIP) and merged districts, but the amount has since been reduced to Rs56 billion. He added that development spending for the merged districts has also been cut repeatedly, from Rs37 billion to Rs25 billion and now to Rs22 billion for the outgoing fiscal year. According to him, larger increases in federal allocations have been provided to Sindh and Balochistan. Copyright Business Recorder, 2026

Date: 2026-06-09

Details: Published June 9, 2026 Updated about 2 hours ago By Hamza Habib ISLAMABAD: The Ministry of Planning, Development and Special Initiatives has proposed an allocation of PKR 20 billion for the Sukkurâ€“Hyderabad Motorway (M-6) project under the Public Sector Development Programme (PSDP) 2026â€“27, against a requirement of PKR 70 billion. Secretary of the Planning and Development Division stated this in a joint meeting of the Senate Standing Committees on Communication and Planning, Development and Special Initiatives. The chairpersons of both committees, Senator Pervaiz Rashid and Qurat-Ul-Ain Marri, chaired the meeting. He said that the projectâ€™s funding requirement stands at PKR 70 billion. He stated that the final allocation would be determined after further deliberations. Members expressed serious concern over the slow pace of progress and inadequate funding for the project. Senator Shahadat Awan noted that the 306-kilometre M-6 segment remains the only missing portion of the 1,522-kilometre Peshawar-Karachi motorway corridor. He observed that the current funding pattern could significantly delay the projectâ€™s completion. Chairman of the National Highway Authority (NHA) informed the Committee that the project has been divided into five segments for implementation under the Public-Private Partnership (PPP) model and that the required land acquisition has already been completed. The Committee was informed that financing discussions with international partners, including the Islamic Development Bank, OPEC Fund, and interested Saudi investors, are underway to support the projectâ€™s implementation. Senator Pervaiz Rasheed appreciated the Committeeâ€™s initiative in taking up the long-pending M-6 project, describing it as a critical missing link in Pakistanâ€™s motorway network. Several members criticised the absence of the Minister concerned and recorded their protest, emphasizing the importance of ministerial oversight for the timely execution of the project. Members also raised concerns regarding the condition of road infrastructure in Balochistan, particularly the Quetta-Dera Ismail Khan, Gwadar-Karachi, and N-25 corridors. The Committee stressed the need to prioritize these projects due to their strategic and economic significance. Senator Abdul Qadir highlighted the issue of insufficient annual allocations for major infrastructure projects, which often result in prolonged completion timelines. He urged the government to ensure the timely release of funds and payments to contractors. Senator Talha Mahmood drew the Committeeâ€™s attention to the deteriorating road infrastructure across the Chitral region and stressed the need for urgent rehabilitation and development measures. The Committee also discussed the proposed 286-kilometre Gilgitâ€“Shandur road project, which is envisaged as an alternative route to the Karakoram Highway (KKH). Secretary Communications informed the Committee that the Ministry is actively pursuing the project to improve regional connectivity and provide an alternate transportation corridor for the public. The Committee recommended that priority be given to the completion of ongoing projects before initiating new schemes. It further recommended that the full requirement of PKR 70 billion be allocated for the M-6 project and directed that these recommendations be conveyed to the National Economic Council (NEC). The Chair directed the Chairman, NHA, to fulfill his commitment regarding the commencement of M-6 project segments by September and November 2026. The Committee also recommended that the N-8 highway project be accorded priority in funding allocations. Furthermore, it emphasised that development projects should only be initiated after ensuring adequate financial resources for their completion. Copyright Business Recorder, 2026

Date: 2026-06-09

Details: Published June 9, 2026 Updated about 2 hours ago By Recorder Report KARACHI: Pakistan SADC Chamber Trade Federation (PSCTF) has urged the federal government to undertake wide-ranging structural tax reforms in the FY2026-27 budget, advocating a shift from what it termed an â€œextractive revenue collection modelâ€ to a growth-oriented framework focused on investment, exports, industrial expansion and job creation. In a set of budget proposals submitted to the Ministry of Finance and the Federal Board of Revenue (FBR), the PSCTF said Pakistanâ€™s economy continues to face deep-rooted structural challenges, including a low tax-to-GDP ratio, elevated energy costs, constrained industrial productivity and a widening trade deficit. SADC stands for Southern African Development Community. PSCTFâ€™s Convener of Pakistan Chapter Syed Moizuddin shared with Business Recorder that among its key recommendations, the forum called for the restoration of the Final Tax Regime (FTR) for goods exporters, arguing that the current taxation framework has created liquidity pressures and increased compliance costs for export-oriented industries. It said a predictable tax regime would improve cash flows and enhance Pakistanâ€™s export competitiveness in international markets. The PSCTF also proposed a legally binding mechanism requiring the FBR to process and disburse all valid export-related sales tax refunds within 30 to 45 days. Delayed refunds, it noted, continue to lock up billions of rupees in industrial working capital, undermining production and export growth. For improving Pakistanâ€™s investment climate, the forum recommended a phased abolition of the Super Tax on corporations and a gradual reduction in the standard corporate income tax rate from 29 percent to 25 percent over the coming years. Such measures, it argued, would encourage business expansion, attract foreign direct investment and improve regional competitiveness. For the salaried class, the proposals seek an increase in the annual tax-exempt income threshold from Rs600,000 to Rs1.2 million, citing inflationary pressures and rising living costs that have eroded disposable incomes and accelerated the migration of skilled professionals abroad. Syed Moizuddin said the forum has emphasized long-term policy certainty for the information technology sector by maintaining the concessional tax regime for IT and IT-enabled services exports, describing predictability as essential for sustaining growth in one of Pakistanâ€™s fastest-growing export industries. To broaden the tax base, the PSCTF advocated greater use of digital technology and data analytics, including cross-referencing banking, property, utility and travel records to identify undocumented income and bring non-filers into the formal economy. It also urged stricter enforcement of point-of-sale integration across the retail sector. In support of industrial modernization, the proposals recommend zero customs duty and sales tax on imports of non-locally manufactured industrial machinery, automation equipment and renewable energy technologies, measures the forum says would boost productivity and accelerate Pakistanâ€™s transition toward cleaner energy sources. The PSCTF also proposed the introduction of a National Taxpayer Compliance Rating System, under which compliant taxpayers would receive incentives such as faster refunds, fewer audits and lower withholding tax rates. Additional tax credits were suggested for companies generating employment and investing in university-led research, innovation and workforce development. PSCTFâ€™s Convener pleaded that while some measures may have a limited short-term fiscal impact, they would generate substantial long-term benefits by expanding the tax base, increasing exports, encouraging investment, creating jobs and raising Pakistanâ€™s tax-to-GDP ratio. The recommendations come as the government prepares to unveil the federal budget for FY2026-27 amid efforts to balance fiscal consolidation with economic growth, export promotion and private-sector development. Copyright Business Recorder, 2026

Date: 2026-06-08

Details: Published June 8, 2026 Updated about 4 hours ago By Naveed Butt ISLAMABAD: State Minister for Finance and Revenue Bilal Azhar Kayani on Sunday held a consultative meeting with presidents, vice presidents, and representatives of Women Chambers of Commerce and Industry across the country at the Ministry of Finance. The meeting was attended by delegations from Islamabad, Lahore, Faisalabad, Sialkot, Peshawar, Abbottabad, Sargodha, Karachi, and several other cities, representing around 40 women chambers. The delegation, led by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Vice President Qurat-ul-Ain, engaged in detailed discussions with the state minister on the coming federal budget formulation process, womenâ€™s economic inclusion, entrepreneurship, and strengthening the role of women in the national economy. The delegations submitted proposals for consideration in the upcoming federal budget-2026-27. The minister assured the participants that their suggestions and concerns would be given serious consideration in the policy-making process. Participants highlighted challenges faced by women entrepreneurs and presented recommendations aimed at increasing womenâ€™s participation in economic activity and public policy-making. They also emphasized the importance of involving women in core policy and decision-making processes, improving access to skills development, enhancing opportunities in Special Economic Zones (SEZs), expanding support for women-led businesses, and strengthening human resource development initiatives. State Minister Bilal Azhar Kayani lauded the valuable contribution of women entrepreneurs to Pakistanâ€™s economic growth and acknowledged their expanding role across various sectors. He said that under the leadership of Prime Minister Shehbaz Sharif, the government is committed to creating greater opportunities for women and ensuring their meaningful participation in economic and social development. He further said that women are already contributing through various advisory boards, committees, and consultative platforms, and reaffirmed the governmentâ€™s resolve to further strengthen their representation and inclusion. He reiterated the governmentâ€™s support for womenâ€™s economic empowerment and said the Ministry of Finance would continue to facilitate women entrepreneurs in addressing their business-related challenges. Copyright Business Recorder, 2026

Date: 2026-06-08

Details: Published June 8, 2026 Updated about 4 hours ago By Naveed Butt ISLAMABAD: The federal government has proposed an allocation of Rs251.683 billion for development projects in provinces, special areas, and the merged districts of the erstwhile FATA for the fiscal year 2026-27, including Rs2.5 billion in foreign assistance and Rs249.183 billion from local resources. According to budget documents available with this correspondent, the federal government has proposed an allocation of Rs99.215 billion for ongoing development projects in the provinces during the fiscal year 2026-27. The government has proposed Rs4.75 billion for 27 development projects in Punjab. A total of 15 development projects worth Rs3.34 billion have been transferred from the Pakistan Public Works Department (Pak PWD) to the provincial government. The federal government has proposed a total allocation of Rs50.69 billion for five development projects in Sindh, Rs4.02 billion for 16 ongoing development projects in Khyber Pakhtunkhwa, and Rs39.754 billion for 57 development projects in Balochistan. A total of 10 development projects worth Rs1.729 billion have been transferred from Pak PWD to Khyber Pakhtunkhwa. The government has also transferred 26 development projects at cost of Rs5.118 from Pak PWD to Balochistan. A total of Rs66.367 billion has been proposed for three ongoing development projects in the merged districts. The federal government has proposed a budget allocation of Rs47.05 billion for 19 development projects in Azad Jammu and Kashmir (AJK), including Rs43.105 billion for 11 ongoing schemes and Rs3.944 billion for eight new schemes. The government has also proposed a budget allocation of Rs39.05 billion for 19 ongoing schemes in Gilgit-Baltistan (G-B) for fiscal year 2026-27. The federal government has proposed a budget allocation of Rs33 billion, including Rs32 billion from local resources and Rs1 billion in foreign assistance, as AJK Block Allocation, and Rs23 billion, including Rs22.7 billion from local resources and Rs300 million in foreign assistance, as GB Block Allocation for the fiscal year 2026-27. For Punjabâ€™s ongoing projects, the government has proposed Rs259.3 million for the widening, rehabilitation and construction of five roads in UC Paki Shah Mardan, UC Namal and UC Kot Chandana in District Mianwali; Rs329 million for the widening, rehabilitation and construction of seven roads in UC Shahbaz Khel, UC Rokhri and UC Pai Khel in Tehsil Isa Khel, District Mianwali; Rs285 million for the widening, rehabilitation and construction of eight roads in UC Manda Khel, UC Qamar Mashani, MC Kalabagh and UC Ban Hafiz Jee in District Mianwali; Rs300 million for the construction of REC/DECs offices in Faisalabad; Rs506 million for the construction of the road from Isa Morr to Siddiquepura (Phase-I and II); and Rs303 million for the construction of a 20-foot-wide metalled road from Bhatta Chowk to Ahmadpur in District Bahawalpur etc. For Sindh projects, the federal government has proposed Rs19.181 billion for the extension and construction of the Sindh Coastal Highway (36 km), Phase-II; Rs666.575 million for the improvement of the road from Rohri to Guddu Barrage via Khanpur Mahar, Mirpur Mathelo and Mureed Shakh; Rs1.917 billion for the dualisation of the Tando Allahyar-Tando Adam Road; Rs18.48 billion for the dualisation of the Mehran Highway from Nawabshah to Ranipur; and Rs10.445 billion for the improvement of the road from Sanghar to National Highway N-5 via Mundh Jamrao and Salehput. For Khyber Pakhtunkhwa projects, Rs508.194 million has been proposed for the establishment of a cardiology unit and burn/trauma unit at Category-A DHQ Hospital Malakand, Batkhela; Rs333.37 million for the Khyber Institute of Child Health and Childrenâ€™s Hospital, Peshawar; and Rs910.68 million for the upgradation and rehabilitation of the Lawrencepur-Tarbela Road etc. For Balochistan, the federal government has proposed Rs1.5 billion for the construction and upgradation of the Dirgai-Shabozai (N-70) to Taunsa Sharif (N-55) Road; Rs1.5 billion for the blacktopping of the Duki-Chamalang Road and link roads; Rs3 billion for the construction of the Panjgur-Gichak-Awaran Road; Rs1.5 billion for the Gwadar Safe City Project (Phase-I); Rs2.5 billion for the widening, improvement and reconstruction of the Khani Cross-Ziarat-Sinjhavi Road; Rs2 billion for the construction of the Sui-Kashmore Road; Rs3 billion for the construction of the Border Terminal at the Pak-Afghanistan Border, Badini, in District Qilla Saifullah; and Rs2 billion for the construction of the Provincial Assembly Building in Quetta etc. For the merged districts, the federal government has proposed Rs37 billion for the 10-Year Development Plan (AIP), Rs29 billion for the merged districtsâ€™ Annual Development Programme (ADP), and Rs367.887 million for the construction of the Zera-Daboori Road in Orakzai. For AJKâ€™s new schemes, the federal government has proposed Rs1.377 billion for integrated solid waste management at nine district headquarters, Rs867.426 million for strengthening the Counter-Terrorism Department (CTD), Rs400 million for infrastructure development at Poonch Medical College, Rawalakot, and Rs400 million for the computerisation of land records in the remaining 16 tehsils. For AJKâ€™s ongoing schemes, the government has proposed Rs5 billion allocation under the Prime Ministerâ€™s Special Package, Rs1.149 billion for the 48MW Jagran-II Hydropower Project, Rs1.475 billion for the AJK Legislative Assembly Complex, and Rs299.74 million for the establishment of the 40MW Dowarian Hydropower Project in District Neelum. For G-B projects, the federal government has proposed Rs4 billion allocation under the Prime Ministerâ€™s Special Package, Rs1.709 billion for 100MW distributed solar photovoltaic plants at various sites, Rs2.2 billion for the 16MW Naltar-III Hydropower Project, Rs900 million for the establishment of a 50-bed Cardiac Hospital in Gilgit, and Rs700 million for the Inter-Provincial Connectivity Economic Corridor through Gilgit-Baltistan and AJK (Thalichi-Shounter Road). Copyright Business Recorder, 2026

Date: 2026-06-08

Details: Published June 8, 2026 Updated about 5 hours ago By Safdar Rasheed LAHORE: Chief of Jamaat-e-Islami (JI) Hafiz Naeem ur Rehman has urged the government to allocate Rs20 billion in the upcoming federal budget for a comprehensive plan aimed at developing the countryâ€™s information technology sector. Addressing Alkhidmat Foundationâ€™s Bano Qabil ceremony in Sialkot, he regretted that Pakistanâ€™s IT exports had reached only around USD3.8 million during the last fiscal year. Despite the countryâ€™s potential to achieve USD20 billion in IT exports, he said exports in the current fiscal year are expected to remain between USD4.5 million and USD5 million. â€œThis is a matter of shame for the rulers,â€ he asserted, adding that if the governing elite focus on equipping young people with modern IT skills, Pakistan could be placed on the path to rapid economic progress within a few years. Thousands of male and female students appeared in an admission test in Sialkot for enrolment in Alkhidmat Foundationâ€™s free Bano Qabil training courses.â€ Rehman praised the JI and Alkhidmat teams for successfully organizing the examination and appreciated the enthusiasm shown by participating students. He assured the youth that Alkhidmat would continue to provide modern professional and technical courses free of charge. He said the Bano Qabil programme had now been launched in 65 cities across Pakistan, with 1.5 million young people registered and hundreds of thousands having already completed various training courses. He urged participants to pledge not only to educate them but also to spread the light of knowledge and contribute to the countryâ€™s development. The JI chief said the countryâ€™s entrenched bureaucracy and feudal elite had deliberately deprived young people of educational opportunities and pushed them towards despair. He maintained that JI had stepped forward to support the youth and that there was no reason for them to lose hope or leave the country. He called upon Bano Qabil graduates and JIâ€™s youth members to raise their voices for millions of children who remain deprived of education. According to him, nearly 27.5 million children nationwide, including around 10 million in Punjab alone, are out of school. He criticised the Punjab government for selling public schools despite the education crisis and said such injustice must be stopped. JI Central Punjab Emir Javed Kasuri and Alkhidmat Foundation Secretary General Waqas Anjum Jafri also addressed the ceremony. Copyright Business Recorder, 2026

Date: 2026-06-08

Details: Published June 8, 2026 Updated about 4 hours ago By Asad Rizvi Pakistan is grappling with significant structural issues that require immediate attention. It is crucial to find a balance between fiscal discipline and growth-driven reforms. According to basic economic principles, immediate focus on infrastructure, credible fiscal and monetary policies, and structural changes may be necessary. The government of Pakistan is set to unveil the federal budget for the fiscal year 2027 on June 10. Key immediate priorities â€¢ Tackle transmission and distribution losses, which are estimated between 15-20 percent, along with addressing circular debt and inconsistent supply that disrupts industry and agriculture. â€¢ Invest in and modernise the electrical grid, incorporating renewable energy and efficiency measures (such as smart metering and loss reduction). â€¢ Such initiatives can be achieved by lowering industrial power costs and enhancing reliability, which will, in turn, support manufacturing and export growth. Water management & irrigation â€¢ Construct small to medium-sized dams, enhance canal efficiency, implement drip irrigation, improve flood management, and treat wastewater. Transport & logistics â€¢ Upgrade roads, railways, and ports, prioritizing the efficiency of Gwadar and Karachi as logistics hubs. Reducing trade costs will foster export growth. Digital & supporting infrastructure â€¢ Itâ€™s encouraging to witness the expansion of broadband, data centers, and fintech services aimed at supporting IT exports. This area should receive ongoing attention. Managing foreign exchange reserves â€¢ The State Bank of Pakistan holds reserves of $17 billion, totalling $22.6 billion, which covers approximately 2.5 to 3 months of imports. Efforts should aim to increase reserves by $8-10 billion, achieved through remittances and boosting exports that extend beyond textiles (for example, in IT, engineering goods, and value-added agriculture), while also minimizing non-essential imports through improved efficiency. Deficit financing (external & domestic), reducing SBP OMO injections, inflation control â€¢ These elements are interconnected. To lower the fiscal deficit to below 5%, there should be an emphasis on increasing revenue collection and cutting unnecessary expenditures. Significant benefits can be gained by eliminating inefficient subsidies and rationalizing pensions, enabling a focus on developmental programmes. â€¢ The State Bank of Pakistanâ€™s liquidity injection of Rs 14.704 trillion through open market operations (OMOs) should be reduced gradually by 25 percent in order to shift resources towards the banking sector. This shift is essential for lending to the private and agricultural sectors to boost the economy. Without it, achieving sustained higher growth targets will not be possible. â€¢ Global inflationary pressures, partly due to unrest in the Gulf region, are impacting Pakistan, primarily through rising oil and LNG prices, necessitating better coordination between fiscal and monetary policy. Export strategy (alarmingly low base) â€¢ The economy must diversify away from a textile-centric focus toward IT and explore processed agricultural goods, pharmaceuticals, and engineering sectors. â€¢ A stable PKR policy is necessary to avoid excessive depreciation, as seen previously, which significantly contributed to inflation as businesses struggle to repay through exports and taxes. However, reducing barriers and regulatory hurdles will certainly facilitate business growth. Increasing tax-to-GDP to 18-20 percent (ambitious but necessary) â€¢ Achieving this is only feasible by broadening the tax base, which includes taxing agricultural income (a largely untaxed sector), retailers, real estate, and merchants, aided by digitization efforts through the FBR for tracking and e-invoicing. â€¢ Reducing exemptions, adjusting rates where they cause distortions, and enhancing compliance (for example, providing relief to salaried individuals while taxing others appropriately) are key strategies. FBR reforms will be critical for reaching these targets. Pakistan faces enormous economic challenges that require effective management to improve productivity, enhance exports, attract investments, broaden the tax base, reduce energy inefficiencies, and alleviate financial distortions that are resulting in severe liquidity issues. At some point, it must be recognized that sustainable growth cannot rely on excessive borrowing or mere currency management. A comprehensive plan to simultaneously boost productivity, exports, investments, and tax revenues is essential. Pakistan needs to achieve an Advance to Deposit Ratio (ADR) of about 65 percent to 70 percent over the next five years to significantly enhance investment, productivity, employment, and GDP growth, targeting a range of 6 percent to 8 percent. However, this growth must be driven by exports, investments, and productivity rather than by consumption funded through borrowing, which is no longer a viable solution, given the scale of debt and deficit financing and the recent shifts in the geopolitical landscape affecting lender policies. This transformation is neither extraordinary nor unachievable. Countries like Indonesia, Vietnam, Bangladesh and others have already demonstrated that it is possible through the implementation of corrective reforms in exports, taxation, infrastructure, and investments can dramatically improve economic performance within a decade. Global Market The US non-farm payroll report was significantly stronger than market predictions, providing the Federal Reserveâ€™s policymakers with enough justification to maintain the current policy rate despite earlier calls for cuts. The payroll growth for May not only surpassed expectations, but the numbers from March and April were also significantly adjusted upward. Meanwhile, the employment rate held steady at 4.3 percent. Recently released consumer price index (CPI) data showed a year-over-year increase of 0.5 percent, climbing to 4.2 percent primarily due to a spike in energy (gasoline) demand and rising food prices, a development attributed to the ongoing Gulf region conflict. This overall situation benefits the US Dollar, which experienced a sharp increase following Fridayâ€™s job report. US Treasury yields have surged, which is not advantageous for the US economy, yet it does bolster the Dollar. Consequently, other currencies and gold have faced pressure and lost their upward momentum. Rising US Treasury yields are viewed as a concerning sign for economic health. Last week, I mentioned that the $/JPY pair would put pressure on the Japanese authorities and is expected to approach resistance levels at 159.90 and 160.65. On Friday, the pair reached a high of 165.35 and appears to be positioned to explore even higher levels. Much will hinge on how the Japanese government responds. They have expressed readiness to defend the yen. Data released last week pointed to a $75 billion decrease in its foreign exchange reserves for May, suggesting intervention occurred last month. Japan is well-equipped for such intervention, with a substantial $1.3 trillion in reserves. However, market apprehensions center on whether Japan can liquidate assets from US Treasuries or other investments. Even so, Japanese officials reiterated their readiness to support the currency. Liquidating foreign assets is more complex than it may seem, as it can disrupt economic stability. For example, the UAE, despite being a major oil exporter with significant foreign exchange and asset reserves, sought a swap facility for obligations. Reports also indicated that India had to sell off $12 billion in gold from its reserves to stabilize its currency. The Reserve Bank of India (RBI) quickly refuted these claims, asserting that the gold reserves remained unchanged at 880.52 tonnes and advised against relying on such media reports, urging trust in official statistics. Meanwhile, inflationary pressures in the Eurozone are escalating across both services and goods sectors, increasing the likelihood of interest rate hikes in the upcoming monetary policy meeting. The European Central Bank (ECB) is set to convene on Thursday, where it is expected to raise rates by 0.25 percent. Eurozone policymakers are facing challenges as the region is also impacted by the US-Iran conflict, which has driven up energy import costs due to disrupted shipping routes. WEEKLY OUTLOOK - Jun 8-12 #GOLD @ $4,329- Gold remains under selling pressure due to rising oil prices and subsequently a stronger US dollar. It must hold the support level at $4,260 to recover some momentum. If it breaks through $4,398, it could move towards $4,470. However, falling below the support level poses a risk of hitting $4,202. #EURO @ 1.1521- Euro needs to stay above 1.1425 in order to initiate a recovery. A rise past 1.1610 would support additional gains, which looks tough at the moment. However, if it drops below 1.1440, it may test the 1.1395 level. #GBP @ 1.3341- Pound Sterling has support near 1.3248, which should aid in its recovery. A rise above 1.3450 is necessary to reach the 1.3502 level. If the support level is breached, it could lead to further declines towards 1.3180. #JPY @ 160.32- The $/Yen currency pair is set to test the BOJ, aiming for levels around 160.85-90. A break could lead to risks around 161.20. If the BOJ is absent from the market, it may rise to 162.20. Conversely, a drop below 158.90 might bring it down to 157.10 or lower. Copyright Business Recorder, 2026

Date: 2026-06-08

Details: Published June 8, 2026 Updated about 5 hours ago By Ali Khizar There is little hope among industrialists, banks, the salaried class, and the broader public that the upcoming budget will deliver any positive surprises. More of the same is expected, along with additional pressure to meet taxation targets. Fiscal planning is in an IMF straitjacket, yet the Fund remains dissatisfied. There is a rift between the provinces and the federal government over the so-called voluntary surrender of Rs1.7 trillion. No one is likely to cheer for the upcoming budget. It is effectively the fifth budget by the same policymakers. No one can claim surprise or ask for more time to adjust. There has been continuity in thinking, but that thinking has not moved beyond stabilization. The focus remains on complying with IMF targets. In fact, the Fundâ€™s country report may offer a better preview of the budget than the budget speech itself. The broader fiscal blueprint has already been written; Islamabadâ€™s job is largely to fill in the blanks. The bigger challenge is the FY27 taxation target of Rs15.3 trillion, according to IMF documents, roughly 18 percent higher than the likely collection in FY26. Unlike the outgoing year, next yearâ€™s FBR targets are not merely indicative; they are quantitative performance targets. If they are not met, the government will have to seek a waiver. It will not be able to simply cut development spending or increase the petroleum levy to compensate for the shortfall. And if a gap emerges, a mini budget is likely. The retail tax scheme is more farce than reform. The IMF is unhappy with it because it effectively exonerates retailers through the payment of a nominal amount. Even so, its passage remains uncertain. In any case, significant revenue collection is not expected from the scheme. Thus, no one is expecting meaningful relief. Throughout the year, the government and the IMF continued to signal to the corporate sector that better days were ahead and that tax rates would eventually be lowered. Today, however, most businesses are bracing for another difficult year. Despite the governmentâ€™s repeated emphasis on tough policies to satisfy IMF requirements, Fund staff remain dissatisfied because there have been no meaningful efforts to broaden the tax base. There is little commitment to austerity and limited progress on structural reforms. The petroleum levy remains elevated and may increase further. Even at current international prices, the government is charging a levy equivalent to nearly half of the petrol price, while the rate on high-speed diesel stands at 14 percent. If the levy was meant to replace GST to avoid sharing revenues with provinces, it should not exceed 18 percent. But that debate appears to have been settled in practice. The best outcome the public can hope for is that the levy is not increased further, GST is not raised to 19 percent, and no major new taxes are imposed. No one expects substantial relief, though the government may offer a token reduction in taxes on salaried income. There may be limited relief for goods exporters through the removal of the additional one percent advance income tax on revenues, which is charged on top of the existing one percent tax. Such a move would improve cash flows. Meanwhile, the services-exporting sector, particularly IT companies, is lobbying for a higher tax on freelance income. If that demand is accepted, policymakers should also revisit the preferential treatment currently enjoyed by IT exports. The provinces, meanwhile, are focused on increasing expenditures. It has become a public-relations exercise from Khyber to Karachi. Punjab is not alone; every province appears to be following the same path. The emphasis is increasingly on spending and visibility. The Planning Commission continues to talk primarily about expanding the traditional PSDP approach. Yet fiscal space is limited. That is why the real dispute centers on the proposed Rs1.7 trillion in provincial savings that the federal government wants to use to meet its own financing needs. Whether this arrangement is one-time or recurring remains unclear. What is clear is that coalition partners are not pleased. The bottom line is that the government has little room to provide meaningful relief. The investment climate is therefore likely to remain unchanged and subdued. The FBRâ€™s primary focus will continue to be enforcement. Expansion of the tax base appears unlikely because the political will is missing, even though the relevant data already exists. The result will be greater pressure on the same small, compliant segment of taxpayers. Pakistan cannot tax its way to prosperity. As long as the state continues to rely on extracting more from the same narrow pool of compliant taxpayers, while avoiding deeper reforms that broaden the tax base and improve productivity, stabilization will remain an end in itself rather than a bridge to growth. Copyright Business Recorder, 2026

Date: 2026-06-08

Details: Published June 8, 2026 Updated about 4 hours ago EDITORIAL: Balancing the budget is becoming increasingly difficult. Despite imposing exorbitant taxes on the formal sector, the FBR (Federal Board of Revenue) is missing its revenue target by a wide margin, while next yearâ€™s targets are becoming even more ambitious. Against this backdrop, any hope that the government would rationalize tax rates for the already overtaxed business and salaried individuals is rapidly fading. Compounding the problem, the government has failed to achieve the target of 4 percent GDP growth this year, and the chances of reaching that mark next year appear slim as well. The mantra remains unchanged: stabilization is the priority. This will be the fifth consecutive budget under the current Prime Minister and the third under the current finance minister, yet the economy is still struggling to achieve meaningful stability. The patience of people, particularly those forming the formal sector and the salaried class, is wearing thin. However, signs of stabilization fatigue are beginning to emerge. We are reaching a stage where many of the previous administrations have succumbed to abandoning the IMF (International Monetary Fund) programme to embark upon spurring growth in the economy with disastrous consequences. It is, therefore, essential that we bite the bullet as time is running out. The government can no longer afford to sidestep the issue. It must deliver, and that delivery must come in the form of broadening the tax base. Nothing short of that will suffice. The government needs additional fiscal revenue, while the overtaxed sectors desperately need relief. Both objectives cannot be achieved unless those who remain untaxed or under-taxed are brought into the tax net. Whenever this issue is raised with the federal government, officials often attempt to absolve themselves of responsibility by arguing that many of these areas fall under provincial jurisdictions and that their hands are tied. This is a lazy argument; take agriculture, for example. More than half of the sector consists of livestock, which the FBR itself acknowledges falls within its tax domain. Yet, virtually no progress has been made. Eid-ul-Azha has just passed, during which tens of billions of rupees worth of livestock changed hands across the country. Yet there is no meaningful tax collection on these transactions or on the income earned by sellers. Except for two days in a week, thousands of animals are sold for slaughter in abattoirs without attracting any tax. Every year there is an attempt to woo traders and retailers into the tax net through announcements of simplified tax schemes. More than a dozen such attempts have been made but without success as the traders and retailers refuse to budge and continue to contribute little in taxes. The proposed fixed tax of Rs25,000 per month for retailers in the upcoming budget is nothing short of a joke. Where the FBR cannot directly assess income in certain sectors, it often resorts to taxing deemed income. In other words, taxes are collected on revenues rather than actual profits, and in some cases the effective burden does rise as high as 15 percent of turnover. What began as a presumptive tax regime eventually evolved into a minimum tax system, payable regardless of whether an enterprise is profitable. It is an inherently unfair mechanism that discourages investment in affected sectors. The result is weaker economic activity and another obstacle to achieving sustained growth. The government needs to think outside the box and provide meaningful relief to the formal sector through lower tax rates. It should present a clear three- to five-year roadmap for reducing tax rates income of businesses whether corporate or non-corporate and salaried persons and immediately begin phasing down, if not eliminating altogether, the super tax and various surcharges. The resulting revenue gap must be filled by bringing into the tax net those who currently do not pay their fair share. More of the same cannot continue as the country cannot live indefinitely on stabilization policies. Stability without growth is an illusion. There can be no lasting economic stability without creating jobs for the large and growing number of new entrants to the labour market. Copyright Business Recorder, 2026

Date: 2026-06-08

Details: Published June 8, 2026 Updated about 5 hours ago By Hamza Habib ISLAMABAD: Pakistanâ€™s gross domestic savings rate has fallen from 17.4 percent of GDP in 1992 to 6.4 percent in 2024, increasing dependence on foreign savings, and the Finance Bill FY2026â€“27 should introduce a targeted National Savings Mobilization Package built around capped tax incentives, approved long-term instruments, digital and Islamic savings products, pension reform, and credible real returns. This was stated by the Pakistan Institute of Development Economics in its report authored by Shahzada M Naeem Nawaz and Wajid Islam. According to the report, Pakistanâ€™s budget strategy has traditionally relied on taxation and borrowing. However, it does not emphasize a durable financing framework, which requires mobilizing domestic savings, redirecting informal savings into formal instruments, and reducing public-sector dissaving. As a result, a larger share of investment must be financed from domestic resources. The key policy messages in the report are treat domestic savings as a macro-fiscal priority, not merely a household behaviour issue; use the FY2026-27 Finance Bill as the entry point for a targeted National Savings Mobilisation Package; restore and redesign savings-related tax incentives for approved long-term formal instruments, with caps and minimum holding periods; protect small and vulnerable savers; targeted concessions may be introduced for pensioners, widows; shuhada families, women, and first-time savers; expand digital, Islamic, pension, and protection-linked savings products. The report was of the view that these will redirect informal savings from cash, gold, and property into regulated channels. Reduce public-sector dissaving and crowding out. It will help mobilize savings to finance productive investment rather than recurrent fiscal gaps. Monitor progress annually through a Savings Mobilization Dashboard. It should cover savings rate, formal savings uptake, pension participation, retail Sukuk investment, public savings, and private-sector credit. The report said that the budget debate is dominated by revenue mobilization, debt servicing, development spending, and subsidy reform. These are legitimate preoccupations. However, they often overshadow a more important aspect of savings, which are too low to finance the economyâ€™s investment needs. Pakistanâ€™s savings performance reflects long-term structural weakening. Gross domestic savings were relatively higher in the early 1990s. However, it declined very sharply, particularly after the mid-2000s. The 5-year moving average also shows a persistent downward trend, indicating that the challenge is structural rather than a one-year shock. This policy viewpoint proposes that the upcoming budget should treat savings mobilization as a macro-fiscal priority. A loss of the savings base diminishes the ability to finance investment using its own resources. It highlights the importance of taking appropriate measures beyond revenue and of offering the National Savings Mobilization package. The objective is to move Pakistan from an externally dependent financing model to one in which domestic savings provide a stronger and more stable base for productive investment and sustainable growth. The report said Gross domestic savings in Pakistan gradually declined from 17.4 percent of GDP in 1992 to 6.4 percent in 2024 (a period average of 10.9 percent), exposing the economy to recurring external financing pressures due to increasing dependence on foreign savings. During the same period, gross national savings in Bangladesh, India, and Vietnam increased sustainably and averaged 20.7 percent, 28.4 percent, and 30 percent. Differences in income levels among the countries alone are not enough to explain this gap. As such, many countries have experienced similar challenges in the past. Through prudent policy measures, they have been successful in breaking this trap and mobilizing savings. Given this perspective, it is critical to ensure macroeconomic stability, positive return on savings, and depth of financial systems, pension and insurance coverage, sound public finances, and the capacity to absorb household savings through financial instruments. An economy with persistently low savings has serious consequences, including unsustainable investment levels and higher external financing requirements. Therefore, raising domestic savings should be treated as a top priority to ensure broader growth and macroeconomic resilience. The countryâ€™s low savings rate reflects weak disposable income, high inflation, and consumption. This trend is further exacerbated by the widespread informality of the economy. Citizens donâ€™t trust in formal financial instruments due to their low or negative returns. Also, financial exclusion adversely affects savings. These factors are interdependent on each other. Low real income limits the capacity to save. Inflation reduces the incentive to save, and weak financial access keeps savings outside formal intermediation. Copyright Business Recorder, 2026

Date: 2026-06-07

Details: Published June 7, 2026 Updated a day ago By Naveed Butt ISLAMABAD: The federal government has proposed an allocation of Rs 27.883 billion, comprising Rs 23.583 billion in local funding and Rs 4.3 billion in foreign assistance, for 33 development projects of the Railways Division in the budget for the 2026-27 fiscal year. According to official documents available with this correspondent, the government has earmarked Rs 26.233 billion, including Rs 23.233 billion in local funding and Rs 3 billion in foreign assistance, for 31 ongoing development projects of the Railways Division. In addition, Rs 1.65 billion, comprising Rs 350 million in local funding and Rs 1.3 billion in foreign assistance, has been proposed for two new development projects. Among the ongoing schemes, Rs 1.4 billion, including Rs 100 million in local funding and Rs 1.3 billion to be financed by the Asian Development Bank (ADB), has been earmarked for the Preparation and Readiness Support for the ML-1 Upgradation Project. Another Rs 250 million has been proposed for the upgradation of track and allied infrastructure on the 996-kilometre ML-3 Rohri-Sibi-Quetta-Koh-e-Taftan section. The government has also proposed an allocation of Rs 5 billion for Thar Coal Rail Connectivity with the existing railway network, including last-mile connectivity to Port Qasim. A further Rs 2.5 billion has been earmarked for the procurement/manufacture of 820 high-capacity bogie wagons and 230 passenger coaches. Additionally, Rs 2.35 billion has been proposed for the recommissioning of five accident-damaged diesel-electric locomotives (2nd Revised), while Rs 2.272 billion has been allocated for the special repair of 100 diesel-electric locomotives to improve their reliability and operational availability. An amount of Rs 1.008 billion has been proposed for the replacement of roof-mounted air-conditioning units in passenger coaches to improve service delivery. Another Rs 2.056 billion has been allocated for preliminary designs and drawings for the upgradation and rehabilitation of Main Line-1 (ML-1), the establishment of a dry port near Havelian under the China-Pakistan Economic Corridor (CPEC), and the hiring of consultants for design review and drawing vetting. Similarly, Rs 1 billion has been proposed for immediate track safety works on the Rohri-Kotri section; Rs 854 million for the replacement of old and obsolete signalling equipment on the Lodhran-Multan-Khanewal-Shahdara Bagh Main Line section of Pakistan Railways (2nd Revised); Rs 408 million for the rehabilitation and strengthening of weak bridges across the Pakistan Railways network; and Rs 500 million for land acquisition for rail connectivity with Afghanistan from Kohat (Zero Point) to Kharlachi via Thall and Parachinar, covering a distance of 192 kilometres. The government has further proposed Rs 3.2 billion, including Rs 200 million in local funding and Rs 3 billion in foreign assistance, for the revised PC-I of the upgradation of Pakistan Railwaysâ€™ existing Main Line-1 (ML-1) and the establishment of a dry port near Havelian. Copyright Business Recorder, 2026

Date: 2026-06-06

Details: Published June 6, 2026 Updated about 2 hours ago By Tahir Amin ISLAMABAD: As budget consultations for the fiscal year 2026-27 gather pace, leading e-commerce platforms, Daraz and Alibaba Group, have urged the government to adopt policies for facilitating digital commerce. Representatives of Daraz and Alibaba Group said this during a meeting chaired by Minister of State for Finance and Revenue Bilal Azhar Kayani on Friday. The delegation included Ben Yi, Daraz Group Chief Commercial Officer, Kamran Pervaiz, Director Corporate Affairs, and Umar Usmani, Director Government Affairs. Senior officials of the Ministry of Finance, including representatives from the Tax Policy Office (TPO), also attended the meeting. The meeting was held as part of the governmentâ€™s ongoing stakeholder consultation process ahead of the Federal Budget FY 2026â€“27. Discussions focused on the evolving e-commerce landscape in Pakistan and the role of digital platforms in promoting entrepreneurship, expanding market access, strengthening economic documentation, and supporting the countryâ€™s broader digital transformation agenda. The delegation shared its perspectives and proposals relating to the e-commerce sector, including matters concerning the regulatory environment, business facilitation, compliance mechanisms, and the continued development of digital commerce in the country. Participants also exchanged views on opportunities and challenges facing the sector and its contribution to economic growth, innovation, and formalisation. During the meeting, the Minister of State emphasised that all proposals under consideration for the upcoming budget are being examined in light of the governmentâ€™s broader fiscal and economic priorities. He reiterated the governmentâ€™s commitment to maintaining a balanced policy framework that supports economic activity, encourages investment and innovation, and promotes sustainable growth. The Minister appreciated the constructive input provided by the delegation and noted the importance of continued engagement with stakeholders in the policy formulation process. He reaffirmed the governmentâ€™s commitment to a consultative and inclusive approach to decision-making and welcomed contributions from industry representatives to support informed and evidence-based policymaking. The meeting concluded with a shared understanding on the importance of continued collaboration between the government and the private sector to strengthen Pakistanâ€™s digital economy, improve the business environment, and contribute to long-term economic development and stability. Copyright Business Recorder, 2026

Date: 2026-06-06

Details: Published June 6, 2026 Updated about 2 hours ago By Mushtaq Ghumman ISLAMABAD: The federal government has earmarked Rs 91 billion for 49 power sector projects under the Public Sector Development Programme (PSDP) 2026-27. According to budget documents, of total proposed allocation of Rs 91 billion, Rs 86.823 billion will be for the ongoing development projects/schemes which includes Rs 75.431 billion foreign funding (rupee cover) whereas Rs 11.392 billion is local financing. However, after inclusion of three new schemes amounting to Rs 4.177 billion, total foreign funding will be Rs 79.607 billion whereas local funding will stand at Rs 11.392 billion. Some of the key power sector ongoing development projects/schemes for funding has been ensured are as follows: (i) evacuation of power from 2160 MW DASU HPP stage -1 Rs 10.823 billion;(ii) evacuation of power from Suki Kinari, Kohala, Mahal HPPs (revised name evacuation of power from Suki Kinari) Rs 3.00 billion installation of reactive power compensation devices (STATCOM) in NTDC network in Sindh - ADB, WB and ISDB;(iii) 500 Kv double transmission line from Ghazi Barotha to Faisalabad ;(iv) supply, installation, testing and commissioning of Assets Performance Management Systems (APMS) for 100 kVA & 200 KVA general duty distribution transformers in SEPCO to be funded by the ADB( agreement yet to be signed after approval of PC-1) Rs 122 million ;(v) APMS for 100 kVA & 200 KVA general duty distribution transformers in LESCO under ADB Power Distribution Strengthening Project -II Rs 1.223 billion;(vi) upgradation/ extension of NTDCâ€™s telecommunication and SCADA System at NPCC to be funded by ADB â€“Rs 3.5 billion ;(vii) 220 kV Dharki-Rahim Yar Khan-Bahawalpur D/C transmission line- Rs 1.045 billion ;(viii) 220kV Arifwala Substation to be funded by AFD- Rs 985 million; (ix) 500/220 kV Sialkot substation9AFD) - Rs 1.742 billion; (x) upgradation of existing 220 kV Vehari Sub Station to 500 kV Vehari Substation â€“Rs 1.392 billion; (xi) extension and augmentation of existing 500 kV and 220 kV grid station (new)( now addition and augmentation of 500 kV and 220 kV transformers at the existing grid station for removal of NTDC system constraints across the country, to be funded by ADB- Rs 2.439 billion; (xii) 765/500/220/132 kV Islamabad West Grid Station, Islamabad, Rs 9.383 billion to be funded by the World Bank; (xiii) evacuation of power from Mohmand Dam to be funded by the ADB - Rs 3.9 billion; (xiv) Electricity Distribution Efficiency Improvement Project (EDEIP) in MEPCO under World Bank- Rs 3.189 billion; (xv) Power Distribution Strengthening Project (ADB) in MEPCO - Rs 1.892 billion; (xvi) Power Distribution Strengthening Project - covering the jurisdiction of LESCO( District Lahore, Kasur, Sheikhupura, Nankana sahib and Okara to be funded by the Asian Development Bank - Rs 2.595 billion; (xvii) power distribution strengthening project (SEPCO). The project covers 10 districts of Sindh province, ie, Sukkur, Jacobabad, Shikarpur, Larkana, Ghotki, Kamber, Kandhkot, Dadu, Naushero Feroz and Khairpur to be funded by ADB- Rs 2.910 billion; (xviii) EDEIP, HESCO Rs 1.710 billion; (xix) interconnection of isolated Markran network at Basima via Nag Grid Station from Panjgoor Grid Station (QESCO) Rs 2.632 billion; (xx) installation of pilot Battery Energy Storage System (BESS) at 220 kV Jhampir G/ Station to be funded by the ADB- Rs 500 million ;(xxi) Dhabeji Grid Station- Rs 605 million; (xxii) 220 kV Haripur Substation- Rs 1.10 billion; (xxiii) 220 kV Swabi Substation â€“Rs 1.450 billion; (xxiv) 220 kV Quaid-e-Azam Apparel and Business Park (QABP) Grid Station for provision of electricity to PIEDMC SEZ - Rs 1.4 billion; (xxv) 599 kV HVDC transmission system between Tajikistan and Pakistan for CASA interconnection â€“ Rs 5.114 billion;(xxvi) 220 kV Jauharabad Grid Station alongwith allied transmission lines - Rs 1.150 billion; (xxvii) 220 kV Mirpurkhas Grid Station along with transmission lines to be funded by ADB â€“Rs 2.150 billion; and (xxviii) 220 kV transmission system network reinforcement in Islamabad and Burhan to be financed by JICA- Rs 959 million. Copyright Business Recorder, 2026

Date: 2026-06-06

Details: Published June 6, 2026 Updated about 2 hours ago By Naveed Butt ISLAMABAD: The federal government has set the national savings target at 14.3 percent of GDP for the fiscal year 2026â€“27, while investment is projected to reach 15 percent of GDP, indicating a narrowing savingsâ€“investment gap to be financed through modest external inflows. According to budget documents available with this correspondent, public investment (including general government investment) is projected to remain at 3.0 percent of GDP, while private investment is estimated to rise to 10.3 percent of GDP in the fiscal year 2026â€“27. Inflation is targeted at 8.2 percent, supported by fiscal consolidation and improved macroeconomic stability. However, the external sector may face pressures as easing import controls and debt repayments are likely to widen the current account deficit. Nevertheless, strong remittance inflows, export recovery, and anticipated external financing are expected to cushion these pressures and support external sector stability. According to official documents Pakistanâ€™s economy is projected to grow by 4.0 percent next fiscal year, signaling a continued growth trajectory. The commodity-producing sector is expected to expand by 3.9 percent, driven by 3.8 percent growth in agriculture and 4.5 percent growth in Large Scale Manufacturing (LSM). Agricultural growth will be supported by a recovery in major crops (3.6 percent) and cotton ginning (2.5 percent), along with strong performance in livestock (3.9 percent). The industrial sector is projected to grow by 4.0 percent, mainly due to a revival in LSM as well as growth in mining and quarrying, construction, and energy (gas and water supply). The services sector is expected to grow by 4.2 percent, supported by stronger performance in wholesale and retail trade (4.2 percent), transport, storage, and communications (3.7 percent), financial services (4.5 percent), and information and communication (7.7 percent). These targets are contingent upon effective macroeconomic management and stable external conditions. The government has set a target of creating 2.0 million jobs in the fiscal year 2026â€“27 through higher investment and improved economic growth. Public investment is expected to crowd out private investment, thereby expanding employment opportunities across all sectors. Copyright Business Recorder, 2026

Date: 2026-06-06

Details: Published June 6, 2026 Updated about 2 hours ago By Sohail Sarfraz ISLAMABAD: The federal government has decided to impose major restrictions on the payment of refunds under the FASTER refund system to exporters and other categories of taxpayers who fail to comply with digital initiatives, including production monitoring systems, digital eye systems at manufacturing premises, and sales tax digital invoicing requirements. Sources told BUSINESS RECORDER that the decision has been taken and a formal notification is expected to be issued in the upcoming budget 2026-27. This is the biggest enforcement measure, to be announced in the budget, for compliance with digital initiatives by leading sectors. The payment of refunds under the â€œFASTERâ€ system would be linked with the compliance of digital initiatives like production monitoring, sales tax digital invoicing, and digital eye initiatives. According to sources, the new risk parameter would be included in the â€œFASTERâ€ refund payment system to ensure enforcement/installation of digital cameras and digital eye Systems at the five leading export-oriented sectors, including textile, leather, surgical, carpets, and sports goods. The exporters, who are expected to be affected by the said Risk-parameter, would cover those exporters who are also engaged in local supplies in the domestic market. The Federal Board of Revenue (FBR) has already given a deadline of June 15, 2026, to all manufacturers of bottled water to install an electronic production monitoring system. The electronic production monitoring system is also mandatory for the packaged milk, iron and steel, oil, and ghee from factories. The production monitoring system is being installed at the textile spinning units. Exporters and other big taxpayers, who would not comply with the risk parameter of installing a production monitoring system or sales tax digital integration, would not be able to get refunds under the â€œFASTERâ€ system. On average, the payment of sales tax refunds under the â€œFASTERâ€ system stood at nearly Rs30-40 billion per month to five top export-oriented sectors. The sales tax registered persons would be bound to comply with the digital initiative of digital invoicing to continue to obtain refunds under the â€œFASTERâ€ system, they added. Copyright Business Recorder, 2026

Date: 2026-06-06

Details: Published June 6, 2026 Updated about 2 hours ago By Mushtaq Ghumman ISLAMABAD: The Ministry of Commerce has reportedly sought Rs 20 billion budget support already extended to the rice exporters to make them compatible with India in the international market, sources told BUSINESS RECORDER. The Export Development Board (EDF), headed by the Commerce Minister, approved the financial assistance for the rice sector. â€œThis was some kind of bridge financing of Rs 20 billion extended to the rice exporters from the EDF, which will be refunded to the Fund from formal allocation from the budget,â€ the sources added. Commerce Ministry has claimed the spent amount as non-Employees Related Expenditure (ERE) from the federal budget. The Commerce Ministry, in consultation with the State Bank of Pakistan (SBP), Pakistan Single Window (PSW), and Customs, had framed a stringent mechanism to prevent misuse of the Rs 20 billion financial assistance approved for rice exporters for a three-month period. Rice is Pakistanâ€™s second-largest export after textiles and a critical source of foreign exchange, rural employment, and agri-industrial activity. Rice exports rose from USD 2.04 billion in FY2021 to USD 3.93 billion in FY2024 due to temporary global supply disruptions, but eased to USD 3.35 billion in FY2025 as major suppliers re-entered the market. The decline intensified in the current financial year, with exports during Julyâ€“December falling by approximately USD 854 million year-on-year. Of this, non-basmati rice accounted for USD 716 million, while basmati exports declined by USD 138 million, reflecting a broad-based loss of competitiveness across both premium and volume segments. Global oversupply, led by Indiaâ€™s return to the export market with heavy subsidies, has depressed prices and widened the price gap. Indian basmati is priced at around USD 850â€“900 per metric ton, compared to USD 1,150â€“1,275 per metric ton for Pakistani basmati. At the same time, elevated domestic paddy prices, high financing costs, stock accumulation in importing countries, and regional trade frictions have further constrained exports, creating liquidity stress across the value chain. A representative of REAP, Malik Faisal Janahgir stated recently to a parliamentary forum that production is not the constraint, as Pakistan has an exportable surplus of about 4.1 million metric tons, translating into near-term export potential of around USD 2 billion if short-term competitiveness issues are addressed. Copyright Business Recorder, 2026

Date: 2026-06-06

Details: Published June 6, 2026 Updated about 2 hours ago By Press Release KARACHI: Government and opposition members of the Sindh Assembly stressed in a key policy meeting ahead of the budget that the upcoming Sindh Budget 2026â€“27 should prioritize balancing population and resources and focus on human development. The dialogue was organised by the Population Council with the support of UNFPA, with the aim of turning policies on reducing the rapid population growth rate into concrete actions and incorporating them into the budget. Chief guest, Provincial Minister for Health and Population Welfare Dr. Azra Fazl Pechuho, said that the issue of rapid population growth is not limited to one sector but is linked to employment, food, education, and environmental problems. She said, â€œUntil we make population part of all development projects, we cannot achieve progress.â€ She also emphasised that menâ€™s role in family planning is very important and practical steps are being taken in Sindh to involve men in this. She urged assembly members to include the issue of rapid population growth in their budget speeches. Population Council Country Advisor Dr. Zeba Sattar said that a budget is not just an account of expenditures but also determines the direction of policies. â€œWe need to see whether our budget is actually meeting the health needs of the people, especially reproductive health needs.â€ Economist Dr. Hammad Mukhtar said that in Pakistan the real issue is not resources but priorities. He said, â€œVery little is being spent on the population sector, even though this investment is very beneficial for both the economy and society.â€ He warned that if the issue of rapid population growth is not addressed, progress in education, health, and the economy will remain limited. UNFPAâ€™s Dr. Jamil Ahmed Chaudhry said that Pakistan has made important international agreements to reduce the rapid population growth rate, but the real need is to implement them. He said, â€œWe need to focus especially on delivering family planning services to remote areas and make better use of local resources for this purpose.â€ During the meeting, Sindh Assembly members agreed that the real issue is not making laws but their implementation and accountability. They demanded that adequate funds be allocated in the budget for family planning and health for human welfare and development, and said they would play an effective role in balancing resources and putting Sindh on the path to development. Copyright Business Recorder, 2026

Date: 2026-06-06

Details: Published June 6, 2026 Updated about 2 hours ago By Naveed Butt ISLAMABAD: The Federal Government has proposed an allocation of Rs20 billion, including Rs8.24 billion in local funding and Rs11.76 billion in foreign assistance, for 13 development projects of the Information Technology and Telecommunication Division in the budget for the fiscal year 2026â€“27. According to budget documents available with this correspondent, the government has proposed an allocation of Rs18.75 billion for 11 ongoing development projects during the fiscal year 2026â€“27, including Rs7.488 billion in local funding and Rs11.26 billion in foreign assistance. For two new schemes, the government has proposed a total allocation of Rs1.25 billion comprising Rs750 million in local funding and Rs500 million in foreign assistance for the fiscal year 2026â€“27. Under the new projects, Rs1 billion has been earmarked for the National AI Ecosystem Development Programme, including Rs500 million in local funding and Rs500 million in foreign assistance. Another Rs250 million has been allocated for the PakAwaz Secure Mobile Communication Ecosystem project. For the 11 ongoing development projects, the government has proposed Rs5.85 billion, including Rs150 million in local funding and Rs5.7 billion in foreign assistance, for the Technology Park Development Project (TDP), Islamabad, under the Ministry of Information Technology and Telecommunication (MoITT). An allocation of Rs3.016 billion, funded by the World Bank, has been proposed for the Digital Economy Enhancement Project, while Rs500 million has been earmarked for the Smart Islamabad Initiative of the National Information Technology Board (NITB). The budget also includes Rs1 billion for the Prime Ministerâ€™s initiatives supporting IT startups, specialised IT training and venture capital, and Rs2 billion for the Revamping of IT Industry project. In addition, Rs500 million has been allocated for the National Semiconductor HR Development Programme (NSHRDP) Phase-I and Rs1.25 billion for the Cyber Security for Digital Pakistan initiative. Furthermore, the government has proposed Rs524.64 million for the National Artificial Intelligence Advancement Initiative under MoITT. An allocation of Rs3.75 billion, including Rs1.2 billion in local funding and Rs2.545 billion in foreign assistance, has been earmarked for the establishment of an IT Park in Karachi under the Pakistan Software Export Board (PSEB). The budget also proposes Rs298.875 million for the Expansion of Cellular Services in Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan (GB) Phase-IV project being executed by the Special Communications Organisation (SCO), and Rs65 million for the GDPR-Driven ISO Compliance and IT Exports Enhancement Programme under PSEB. Copyright Business Recorder, 2026

Date: 2026-06-05

Details: Published June 5, 2026 Updated 40 minutes ago By Recorder Report KARACHI: Mian Zahid Hussain, President of the Pakistan Businessmen and Intellectuals Forum (PBIF), President of the All Karachi Industrial Alliance (AKIA), Chairman of the National Business Group Pakistan (NBG) and Chairman of the FPCCI Policy Advisory Board has emphasized that there is no alternative to economic revival other than reducing reliance on imports and providing incentives to the export sector on an emergency basis. He said that the tax burden on industries had surged to an unbearable level of over 60 percent, demanding that â€œthis burden be reduced to a maximum of 40 percent in the upcoming budgetâ€ to enable the local industries to compete effectively in the global market. The business leader said that the industrialists had informed the prime minister that additional burdens, such as the Super Tax, constituted a major hurdle to industrial growth in the current economic scenario. He underscored the urgent need to simplify the tax regime in the federal budget to make it business-friendly, thereby restoring investor confidence. He added that rationalizing energy tariffs and reviewing contracts with the Independent Power Producers (IPPs) were inevitable measures required to bring down the soaring cost of production. Mian Zahid Hussain said that the business community had high expectations from the Federal Budget 2026-27, hoping that the government would take practical steps to protect local industries while simultaneously honoring its agreements with the IMF. He said he was confident that if the government incorporated into the budget document the demands for the restoration of the Final Tax Regime (FTR) for exporters and a rational reduction in taxes these measures could support export-led recovery and sustainable growth. He said that this consultation came at a critical juncture when the country urgently required a coordinated strategy to boost exports and stabilize the foreign exchange reserves. Mian Zahid Hussain said the business community warmly welcomed the prime ministerâ€™s initiative to engage in a direct consultative process. He hoped that the economic team under the prime ministerâ€™s leadership would integrate these proposals into the budget document to accelerate industrialization, generate employment opportunities, and anchor the economy on sustainable foundations. He referred to the recent meeting between the prime minister and several business leaders as a highly encouraging development towards economic stability and industrial growth. Mian Zahid Hussain stated that during the meeting, the FPCCI leadership and business representatives candidly discussed the severe macroeconomic challenges facing the country and presented concrete proposals to the prime minister for the promotion of trade and industry. He said that the trade deficit had reached a staggering USD32 billion during the first 10 months of the current fiscal year, while the ratio of exports to imports had witnessed an alarming decline. Furthermore, Pakistanâ€™s economy had been facing immense pressure due to the ongoing US-Iran war. Copyright Business Recorder, 2026

Date: 2026-06-05

Details: Published June 5, 2026 Updated about an hour ago By N H Zuberi KARACHI: The Pakistan Business Forum (PBF) has urged the government to reduce government sector expenditure by up to Rs3 trillion in the upcoming federal budget and present a clear economic roadmap focused on sustainable growth, investment, and business revival. PBF Chief Organiser Ahmad Jawad said the forthcoming budget, which will be the governmentâ€™s third since the general elections, must move beyond traditional revenue-generation measures and instead prioritize economic expansion, industrial competitiveness, and public relief. Expressing concern over the countryâ€™s growing debt burden, Jawad noted that Pakistanâ€™s national debt has increased from approximately Rs19 trillion to nearly Rs80 trillion over the past decade. â€œThe success of the upcoming budget will depend on whether the government can generate revenue from under-taxed sectors rather than continuing to place the bulk of the burden on the already documented business community,â€ he said. The Forum stressed that the budget may reflect ground realities and provide meaningful relief to both businesses and the general public. â€œThe decision to enter the IMF programme was the governmentâ€™s own choice.However, the IMF does not require government to place an additional burden on businesses and citizens every year. If the economy is to move forward, meaningful relief measures may be introduced,â€ Jawad added. PBF also proposed abolishing the petroleum levy and replacing it with an 18 percent General Sales Tax (GST) on petroleum products to create a more transparent taxation framework in the Finance Bill scheduled to be presented on June 10. Highlighting the importance of agriculture, Jawad described cotton as Pakistanâ€™s â€œwhite goldâ€ and called for targeted incentives and support measures to revive cotton production and strengthen the textile value chain. He emphasized the need for concrete budgetary initiatives to promote the Blue Economy and modernize the agriculture sector, both of which have significant potential to drive sustainable growth and boost exports. â€œThe government must decide whether investment capital should flow towards industry and exports or continue to be diverted into real estate and speculative activities,â€ the Forum stated. PBF also said the essence of the budget on June 10 should be to project Pakistan as an attractive destination for business, investment, and economic opportunity. Addressing Prime Minister Shehbaz Sharif, Jawad said: â€œThe business community still has high expectations from your leadership.We expect that the upcoming budget will not be merely a paper exercise or an accounting gimmick. It should not be based solely on revenue targets but should serve as a comprehensive framework for economic recovery and sustainable growth.â€ Copyright Business Recorder, 2026

Date: 2026-06-05

Details: Published June 5, 2026 Updated about 2 hours ago By Huzaima BukhariDr Ikramul HaqAbdul Rauf Shakoori On June 10, 2026, the federal government will unveil budget for fiscal year (FY) 2026-27 amidst familiar warnings about fiscal deficits, rising debt, IMF conditionalities and the alleged necessity of imposing additional taxes. Once again, citizens are expected to believe that Pakistan suffers from a shortage of revenue. The official narrative suggests that fiscal stability requires higher taxation, stricter enforcement and continued sacrifices by already overtaxed segments of society but facts tell an entirely different story. For nearly three decades, articles in these pages and elsewhere have highlighted the phenomenon of â€œforegone taxes in trillionsâ€. Shockingly, the issue attracted little policy attention. Of late, official reports of the Federal Board of Revenue (FBR), Economic Surveys of Pakistan and even studies by the Pakistan Institute of Development Economics (PIDE) confirm that concerns were neither exaggerated nor misplaced. Pakistanâ€™s fiscal deficit is not merely the result of inadequate taxation. It is substantially a consequence of trillions of rupees voluntarily surrendered through tax expenditures. The following official figures, extracted from annual Economic Surveys and FBRâ€™s website, illustrate the magnitude of the issue: =========================================== Table: Tax Expenditure (2010-11 to 2024-25) =========================================== Fiscal Year Tax Expenditure (Rs billion) =========================================== 2010-11 150.3 2011-12 185.5 2012-13 239.5 2013-14 477.1 2014-15 415.8 2015-16 394.6 2016-17 415.8 2017-18 541.0 2018-19 972.4 2019-20 1150 2020-21 1314.3 2021-22 1482.3 GST on POL waived in March 2022 2022-23 2239.6 Excluding GST on POL 2023-24 3879.2 Excluding GST on POL 2024-25 2434.7 Excluding GST on POL =========================================== The Table exposes a startling reality. Federal tax expenditure increased almost sixteen-fold between FY2010-11 and FY2024-25. The latest figure of Rs. 2.435 trillion (not including forgone sales tax on petroleum products) exceeds the annual budgets of several provinces and is significantly larger than the revenue shortfalls repeatedly cited by the government to justify new taxation measures. Had even a portion of these concessions been rationalised, Pakistanâ€™s fiscal deficit could have been substantially reduced and, in certain years, transformed into a surplus. Tax expenditure represents revenue forgone through exemptions, concessions, exclusions, tax credits, preferential rates, special regimes and other departures from the normal tax structure. Economically, it is no different from direct budgetary spending. The only difference is that it escapes the scrutiny ordinarily applied to expenditure shown in the budget. Every rupee of federal tax expenditure granted in divisible-pool taxes affects not only the federal government but also the provinces. The 1973 Constitution guarantees provinces a share in federal tax revenues through the National Finance Commission (NFC) Award. When federal authorities forego trillions through exemptions and concessions, provinces are simultaneously deprived of resources for education, health, local government, infrastructure and social protection. This raises a fundamental question. By what constitutional logic should selected beneficiaries receive preferential tax treatment while provinces lose resources constitutionally intended for their citizens? The debate on tax expenditure is not merely fiscal. It concerns the distribution of power, resources and opportunities within the federation itself. PIDEâ€™s recent study on tax expenditures reaches an equally troubling conclusion. It notes the absence of rigorous cost-benefit analysis, lack of meaningful evaluation and weak institutional scrutiny regarding the effectiveness of tax concessions. Exemptions are frequently granted in the name of industrial development, investment promotion or social objectives, yet little evidence is produced to demonstrate whether these objectives are actually achieved. Many concessions survive long after their original rationale has disappeared. Others effectively operate as hidden subsidies benefiting narrow groups at public expense. In this peculiar milieu, the first and most immediate reform should be a comprehensive review of all tax expenditures. Every concession should be subjected to annual scrutiny, accompanied by a sunset clause and automatic lapse unless justified by measurable economic and social benefits. Even a reduction of one-third of existing tax expenditures could generate hundreds of billions of rupees, substantially reducing dependence on regressive taxation and borrowing. The second reform concerns one of Pakistanâ€™s most protected sources of untaxed wealth: agricultural land rent. For decades, public debate has conflated the interests of small farmers with those of large landowners. These are entirely different questions. Small cultivators facing climate shocks, rising input costs and declining productivity deserve protection and support. Large agricultural rentiers enjoying substantial income from ownership of land do not. The original definition of â€œagricultural incomeâ€ in the Income-tax Act, 1922 was rooted in agricultural operations and cultivation. It was never intended to create a blanket fiscal immunity for large landowners. The exemption recognised income arising from land used for agricultural purposes and from agricultural operations performed on that land. What emerged over subsequent decades was a political distortion whereby constitutional protection of agriculture gradually evolved into protection of agricultural rent and landed privilege. The Finance Bill 2026 should distinguish between income from cultivation and income from ownership of agricultural land. Small cultivators deserve support, not taxation. Agricultural rent accruing to absentee owners and large landholders is a different economic category altogether and should be brought within the tax net. Such a distinction is entirely consistent with both classical public finance and the original scheme of the Income-tax Act, 1922. The third reform concerns the fragmented structure of Pakistanâ€™s income tax system. The current regime has abandoned the foundational principle of comprehensive income taxation. Separate tax blocks, final taxation regimes, minimum taxes, presumptive taxes and countless special provisions have created a system characterised by complexity, inequity and litigation. Every source of income after computation as per respective head of income should be aggregated into a single taxable base ending all kinds of separate treatments. Additionally, artificial distinctions between different categories of income need to be removed. After computing taxable income as suggested above, under a simplified structure, annual income up to Rs. 1.2 million should remain below taxable threshold. Income exceeding Rs. 1.2 million up to Rs. 3.6 million should be taxed at 5 percent. Income exceeding Rs. 3.6 million up to Rs. 6 million should be taxed at 15 percent. Income exceeding Rs. 6 million should be taxed at 25 percent. The corporate tax rate should simultaneously be reduced to 25 percent. Excess profit tax or business profit tax, if necessary, for persons earning income beyond Rs. 200 million may be imposed through separate laws, as was done historically. A broad tax base coupled with moderate rates will always outperform a narrow base burdened by excessive taxation. Pakistanâ€™s fiscal challenges also require addressing another long-neglected constitutional anomaly: fragmented sales taxation. The division between federal sales tax on goods and provincial sales tax on services has generated overlapping jurisdictions, multiple compliance regimes, cascading taxation and substantial administrative inefficiencies. Trans-provincial services and entities operating across provincial boundaries require harmonised treatment. Their inclusion within a unified federal framework would significantly enhance efficiency and revenue mobilisation. Studies undertaken earlier suggest that comprehensive taxation of trans-provincial services could generate approximately Rs. 3 to 4 trillion in additional revenue over time through integrated administration and elimination of leakages. Such potential alone is sufficient to alter Pakistanâ€™s fiscal landscape fundamentally. At the same time, provincial governments must abandon their excessive dependence on federal transfers. Pakistanâ€™s provinces possess substantial taxation powers over agricultural income, agricultural land, urban immovable property, services and local economic activities. Yet provincial tax collection remains exceptionally low by international standards. In successful federations, sub-national governments mobilise significant resources independently. Indian states collectively raise revenues approaching 8 percent of GDP through their own taxation powers. Pakistani provinces should be aiming for revenue mobilisation of at least 5 to 8 percent of GDP. If provinces effectively utilised their constitutional powers while the federation rationalised tax expenditures, taxed agricultural rent, integrated trans-provincial taxation and implemented comprehensive income taxation, Pakistanâ€™s chronic fiscal deficit would largely disappear. The country would no longer require excessive petroleum levies to compensate for weak tax policy. Dependence on borrowing would decline. Corporate taxation could become internationally competitive. Personal taxation could become simpler, fairer and more predictable. The debate surrounding annual federal budgets, unfortunately, begins on a false premise. Pakistan does not suffer from a shortage of taxable capacity. It suffers from policy choices that favour exemptions over equity, fragmentation over simplicity and privilege over constitutional fiscal justice. The challenge is not only to discover new taxpayers. The real challenge is to stop subsidising powerful interests through the tax system while claiming insufficient resources for governance. Fiscal sovereignty will remain elusive so long as trillions continue to be surrendered through tax expenditures, large sources of economic rent remain untaxed and constitutional taxing powers remain underutilised. The choice before policymakers is straightforward. Continue managing deficits through higher taxation of the compliant and greater dependence on debt or dismantle the structural distortions that create those deficits in the first place. The first path perpetuates debtocracy. The second offers a route towards genuine fiscal sustainability and constitutional federalism. Copyright Business Recorder, 2026

Date: 2026-06-05

Details: Published June 5, 2026 Updated about 2 hours ago By Recorder Report ISLAMABAD: The Pakistan Textile Council (PTC) has urged the federal government to use Budget 2026-27 as a decisive opportunity to restore the competitiveness of Pakistanâ€™s export sector, warning that economic stabilization alone will not deliver sustainable growth without a strong export-led strategy. Sources in the commerce ministry told BUSINESS RECORDER, the Council has also written a letter to Prime Minister Muhammad Shehbaz Sharif, appreciating the governmentâ€™s engagement with business leaders ahead of the budget but stressed that policy commitments must now translate into concrete relief measures for exporters. According to PTC, Pakistanâ€™s merchandise exports during the first eleven months of FY2025-26 remained USD 1.66 billion below the corresponding period of the previous year, reflecting the cumulative impact of high energy costs, delayed refunds, and an increasingly burdensome tax regime on export-oriented industries. The government has been apprised that Pakistan today stands before a rare window of opportunity as global supply chains are being restructured, and international buyers are actively seeking alternative sourcing destinations. Pakistan possesses a vertically integrated cotton-to-garment value chain and long-established export relationships, but these advantages can only be leveraged if the policy environment supports competitiveness rather than undermines it. The Council emphasized that export-led growth remains the most viable pathway for generating foreign exchange, creating employment, and strengthening Pakistanâ€™s long-term economic resilience. The PTC called upon the government to prioritize three immediate measures in the upcoming budget: the reintroduction of the Final Tax Regime (FTR) for exporters, reduction of industrial energy tariffs to regionally competitive levels, and clearance of outstanding export refunds through a transparent and time-bound mechanism. â€œPakistan has worked hard to achieve macroeconomic stability, but stabilization is not growth,â€ said Chairman PTC adding that â€œthe next chapter of Pakistanâ€™s economic recovery must be written through exports, investment, and industrial expansion.â€ The Council reiterated its willingness to work closely with the government by providing technical input, sectoral data and policy support to help achieve the countryâ€™s export and economic growth objectives. Copyright Business Recorder, 2026

Date: 2026-06-05

Details: Published June 5, 2026 Updated about 2 hours ago By Naveed Butt ISLAMABAD: The provinces have proposed a combined development outlay of Rs3.138 trillion for fiscal year 2026-27, reflecting an increase of Rs76 billion over the current yearâ€™s allocation, with Rs660 billion expected from foreign assistance and Rs2.478 trillion to be financed through domestic resources. The provinces had budgeted a combined development outlay of Rs3.062 trillion for outgoing fiscal year 2025-26, including Rs658 billion in foreign assistance and Rs2.404 trillion from local resources. The provinces have raised their combined development budget by Rs76 billion to Rs3.138 trillion for fiscal year 2026-27, up from Rs3.062 trillion in the current fiscal year 2025-26. According to documents available with BUSINESS RECORDER, Punjab leads with a proposed allocation of Rs1.45 trillion, followed by Sindh with Rs816 billion, Khyber Pakhtunkhwa with Rs564 billion, and Balochistan with Rs308 billion. Budget documents show that the Punjab government has proposed a development budget of Rs1.45 trillion for fiscal year 2026-27, including Rs1.306 trillion from local resources and Rs144 billion in foreign assistance. The Sindh government has proposed Rs816 billion, comprising Rs296 billion in foreign assistance and Rs520 billion from local resources. Khyber Pakhtunkhwa has proposed Rs564 billion for its development programme, including Rs187 billion in foreign assistance and Rs377 billion from local resources under the Public Sector Development Programme (PSDP) 2026-27. Balochistan has proposed a development outlay of Rs308 billion, including Rs33 billion in foreign assistance and Rs275 billion from local resources. Punjab has increased its development budget by Rs95 billion for fiscal year 2026-27 compared to the current fiscal year. Sindh has reduced its development budget by Rs29 billion, while Khyber Pakhtunkhwa has increased its allocation by Rs63 billion. In contrast, Balochistan has cut its development budget by Rs53 billion compared to fiscal year 2025-26. The provincial governments have submitted their proposed development budgets to the federal government for incorporation into the budget framework for fiscal year 2026-27. Copyright Business Recorder, 2026

Date: 2026-06-05

Details: Published June 5, 2026 Updated about 2 hours ago By Mushtaq Ghumman ISLAMABAD: The federal government has reportedly earmarked Rs 179 billion for nearly 44 (43 ongoing and one new) water sector development schemes and hydropower projects under Public Sector Development Program (PSDP) 2026-27 due to financial constraints. Of total earmarked amount of 179 billion, required local funding will be about Rs 106.620 billion whereas rupee cover requirement of 72.379 billion. According to the Ministry of Planning, Development and Special Initiatives, for ongoing hydel projects, Rs 42.666 billion have been earmarked, of which Rs 25 billion are proposed for Dasu Hydropower Project(stage-1), Rs 4.284 billion for Warsak Hydroelectric Power Station ( 2nd rehabilitation) Rs 3.4 billion will be for 1410 MW Tarbela 5th Extension Hydropower project, Rs 3.00 billion for Attabad Lake Hydropower project ( 54 MW), Rs 2.062 billion for rehabilitation of Dargai Hydroelectric power station(PC-1), Rs 2.7 billion 34.5 MW Harpo Hydropower Project, Rs 1.4845 billion for refurbishment and up-gradation of generation units of Mangla power station enhancing the capacity from 1000 MW to 1310 MW and Rs 736 million for capacity enhancement of Chitral Hydropower station from 1 MW to 5 MW. The proposed allocation for some of the ongoing water sector schemes/projects are as follows: (i) Diamer Basha Dam Project (inclusion of Tangir Hydropower project) Rs 25 billion); (ii) Diamer Basha Dam Projectâ€“ acquisition of land and resettlement ( 2nd revised ( revised PC-1 is under approval process) Rs 7.00 billion;(iii) Mohamand Dam Hydropower project â€“ Rs39 billion; (iv) raising of Mangla Dam project (2nd revised PC-1) Rs 4.598 billion; (v) revised PC-1 for installation of telemetry system for real time discharge monitoring at 27 key sites on Indus Basin Irrigation System(IBIS)- Rs 5.755 billion (total cost Rs 23.834 billion, Provincial share Rs 500 million of IRSA from its own resources; (vi) Kachhi Canal Project- Rs 4.874 billion; (vii) construction of 100 dams in Balochistan â€“packageâ€“III (20 dams) revised â€“Rs 1.093 billion; (viii) construction of Awaran Dam (revised) â€“Rs 5.00 billion (total 23.579 billion - federal share Rs 17.754 billion - provincial share Rs 5.826 billion); (ix) construction of Panjgur dam, district Panjgur (revised) â€“ Rs 5.00 billion (total cost Rs 22.341 billion - federal share Rs 16.506 billion- provincial share Rs 5.835 billion); (x) construction of 100 dams in Balochistan-Package-iv (23 dams) Rs 3.00 billion; (xi) remodelling of Pat Feeder Canal System in Balochistan, District Naseerabad â€“ Rs 5.00 billion (total cost Rs 61.793 billion - federal share Rs 46.996 billion - provincial share 14.797 billion; (x) Garuk Storage Dam District Kharan (2nd revised PC-1) Rs 1.459 billion( total cost Rs 27.753 billion- Federal share Rs 15.650 billion- provincial share Rs 12.103 billion; (xi) Umbrella PC-1 of the Flood Protection sector projectâ€“III (FPSP-III) updated Rs 2 billion; and (xii) the project for Flood Management Enhancement in the Indus Basin-JICA grant-Rs 3.00 billion. Other ongoing water schemes will get funding of just millions of rupees. Only one scheme â€“ Diamer Basha Dam Project - power generation facilities (4500 MW) â€“ Rs 500 million. This shows budget of Rs 135.8335 billion has been proposed for ongoing water sector projects/schemes under PSDP 2026-27. Copyright Business Recorder, 2026

Date: 2026-06-05

Details: Published June 5, 2026 Updated about 2 hours ago By Sohail Sarfraz ISLAMABAD: The government is likely to introduce major amendments to the Export Facilitation Scheme (EFS) 2021 in the upcoming 2026-27 budget to curb the misuse of the facility in the future. A big proposed change in the EFS scheme for exporters is that the financial security in the form of bank guarantee would be replaced with the pos-dated cheque for any excess duty and taxes being deferred or remitted. Official sources told BUSINESS RECORDER that the Federal Board of Revenue (FBR) has finalized amendments to the EFS, taking into account recommendations of the stakeholders. In this regard, the government is reviewing a budget proposal to revise the EFS in the 2026-27 budget to stop commercial importers from massive misuse of flying invoices in local markets. One of the proposals is to withdraw the exemption available to the commercial importers under EFS that allows the transfer of their sales tax invoice in the local market. The FBR is making necessary changes in the Customs Rules for the implementation of the revised scheme. The EFS, introduced in 2021, has seen an increase in licenses from 800 to approximately 2,000. A special drive initiated in May 2024 to curb misuse has led to significant improvements, particularly in the textile industry, which has witnessed notable value addition. Sources said the existing IPO 2022 does not permit the temporary import of used vehicles and auto parts for refurbishment and re-export. Under Para 5(3), read with Serial Nos. 10 and 11 of Appendix-C, the import of used and second-hand vehicles and auto parts is generally prohibited, except for limited categories such as bulletproof vehicles, firefighting vehicles, ambulances, and certain commercial imports. The working group held multiple meetings to examine the feasibility of the pilot project under the EFS 2021 framework. The proposal received broad support from stakeholders, who agreed that amendments to both EFS 2021 and IPO 2022 were necessary to operationalise the initiative. The Ministry of Commerce informed a ministerial forum that a draft summary had been circulated among stakeholders, who endorsed key proposals for submission to the Economic Coordination Committee (ECC) of the Cabinet. These include: (i) Amendment to Serial No. 10 of Appendix-C of IPO 2022 to allow temporary import of vehicles under PCT heading 8703 by service providers with repair and refurbishment facilities verified by the Engineering Development Board (EDB) and registered with FBR under EFS. Such imports would be strictly for repair, restoration, refurbishment, and re-export. Importer-cum-exporters would also be required to submit annual reconciliation statements to the relevant Regulatory Collector; (ii) Amendment to Serial No. 11 of Appendix-C to allow temporary import of used auto parts under similar conditions, exclusively for refurbishment and repair purposes, with mandatory reconciliation reporting; (iii) a strict condition that imported vehicles and parts shall not, under any circumstances, be sold, transferred, or disposed of within the domestic tariff area; and (iv) necessary amendments to EFS 2021 by FBR, including a clear disposal mechanism for salvaged or leftover auto parts. Copyright Business Recorder, 2026

Date: 2026-06-05

Details: Published June 5, 2026 Updated about 2 hours ago By Naveed Butt ISLAMABAD: The federal government has allocated the largest share â€” 65 percent, or Rs729.9 billion â€” of the proposed development budget for infrastructure sector projects in fiscal year 2026-27. According to documents available with this correspondent, the government has proposed Rs135.6 billion for the energy sector, Rs408.9 billion for transport and communication, Rs140.4 billion for the water sector, and Rs45 billion for the physical planning and housing sector for the upcoming fiscal year. A total of Rs187.2 billion has been proposed for the social sectors, including Rs78.5 billion for education (including the Higher Education Commission), Rs24.3 billion for health and nutrition, Rs70 billion for the SDGs Achievement Programme, and Rs14.4 billion for others. The government has also proposed Rs10.2 billion for governance and Rs43.9 billion for science and information technology for fiscal year 2026-27. An amount of Rs79.4 billion has been allocated for special areas (AJK and GB), while Rs66.1 billion has been proposed for merged districts for development projects. In the production sector, the government has proposed Rs9.3 billion, including Rs3.7 billion for food and agriculture and Rs5.6 billion for industries. According to documents, 65 percent of resources have been earmarked for infrastructure sector projects. Within infrastructure, priority has been given to the transport and communication sector with 36 percent, followed by water resources with 12.5 percent, energy with 12 percent, and physical planning and housing with 4 percent of allocations. The social sector has been allocated 16.6 percent, comprising education/HEC with 7 percent, health with 2.2 percent, the SDGs Achievement Programme with 6.2 percent, and other social sectors with 1.3 percent. To bring less developed areas at par with other parts of the country, 4.8 percent has been allocated for AJK, GB, and the newly merged districts of KP. The proposed allocation for the science and technology and IT sector is for 5.9 percent. Funds for the governance sector stand at 7.1 percent and the production sector at 0.8 percent. Project-wise proposed allocations have been adjusted within the overall PSDP size of Rs1,126 billion in line with national priorities. The ministries and divisions had demanded Rs4.1 trillion including Rs1.1 trillion as rupee cover under PSDP 2026-27, for 1,254 projects comprising 764 ongoing and 490 new or unbudgeted projects. The demand for ongoing projects stood at Rs3.3 trillion. However, the Finance Division could only manage and conveyed an Indicative Budget Ceiling (IBC) of Rs1,126 billion for PSDP 2026-27. Copyright Business Recorder, 2026

Date: 2026-06-04

Details: Published June 4, 2026 Updated about 2 hours ago LAHORE: A delegation of exporters from Sialkot, led by Sheikh Zohaib Rafiq, former senior vice president Sialkot Chamber of Commerce and Industry (SCCI), visited the Lahore Chamber of Commerce and Industry and met its President Faheem-ur-Rehman Saigol to discuss the problems faced by them. LCCI Senior Vice President Tanveer Ahmed Sheikh and Vice President Khurram Lodhi were also present in the meeting. The delegation included Adnan Yousaf, Muhammad Ashiq, Shehzad Ahmed, Muhammad Faisal and others. Speaking to the delegation members, President LCCI Saigol said that Sialkot is playing a key role in Pakistanâ€™s exports and national economy. He added that despite difficult economic conditions, the export sector continues to support the national economy. He stressed the need for stronger coordination and cooperation between the Lahore and Sialkot Chambers and said that joint efforts through an All Pakistan Chambers Conference should be made to resolve common business issues. The visiting delegation members said that Sialkot has skilled manpower, modern industrial units, and is exporting world-class sports goods across the globe. They added that local industries are also promoting the use of recycled materials and adopting environment-friendly and sustainable production methods. The delegation further said that Sialkotâ€™s export industry meets global compliance and quality standards and is the largest SME hub in Pakistan. They urged the government to provide more facilitation to the SME sector, noting that countries like China, Vietnam, and India have strongly supported SMEs, resulting in significant export growth. They also highlighted that SMEs can drive innovation, employment, and exports if properly supported. Sialkot is also rapidly growing in the e-commerce sector. Moreover, the business community of Sialkot has also contributed to society by establishing hospitals, an airport, and educational institutions under corporate social responsibility. The delegation emphasized that the Final Tax Regime (FTR) is vital for the SME sector and proposed a fix tax rate for turnover up to 500 million rupees, with a gradual increase beyond that level. They also called for an urgent resolution of issues related to the Export Facilitation Scheme (EFS) and duty drawback. Copyright Business Recorder, 2026

Date: 2026-06-04

Details: June 4, 2026Mrs. Anjum Shahnawaz Exports fall and imports rise during Julyâ€“May FY2025-26, though monthly trade gap narrows sharply in May Pakistan recorded trade deficit of $34.76 billion during the first eleven months (Julyâ€“May) of fiscal year 2025-26 or 11MFY26 as declining exports and higher imports continued to pressure the countryâ€™s external sector, according to data released by the Pakistan Bureau of Statistics. The trade gap increased by 17.48% compared with $29.58 billion recorded during the corresponding period of FY2024-25. Official figures showed that exports declined by 5.61% to $27.90 billion during Julyâ€“May FY2025-26, compared with $29.56 billion in the same period of the previous fiscal year. Meanwhile, imports rose by 5.94% to $62.66 billion, up from $59.15 billion recorded during the corresponding eleven months of FY2024-25, resulting in a wider trade imbalance. Despite the deterioration in cumulative figures, Pakistanâ€™s trade performance improved significantly on a month-on-month basis in May 2026. The monthly trade deficit narrowed by nearly 40% to $2.58 billion, compared with $4.26 billion recorded in April 2026. Exports increased by 9.59% to $2.71 billion in May from $2.47 billion in the previous month, while imports declined sharply by 21.45% to $5.29 billion from $6.73 billion in April. The combination of stronger exports and lower imports helped reduce the monthly trade gap and provided temporary relief to the external account. On a year-on-year basis, the trade deficit in May 2026 declined by 13.68% compared with the same month last year. Exports recorded a modest increase of 1.26%, while imports fell by 6.63% compared with May 2025, indicating an improvement in monthly trade dynamics despite broader challenges. Economists said the widening cumulative trade deficit highlights the importance of accelerating export growth, diversifying export markets and improving competitiveness to ensure external sector stability. They noted that managing import demand while sustaining economic growth will remain a key policy challenge as Pakistan seeks to strengthen foreign exchange reserves and support its economic recovery efforts.

Date: 2026-06-04

Details: Published June 4, 2026 Updated about 2 hours ago ISLAMABAD: The Competition Commission of Pakistan (CCP) has approved Pak Arab Fertilisers Limitedâ€™s acquisition of the liquid carbon dioxide (LCO2) plant of Pakistan Oxygen Limited, paving the way for Fatima Groupâ€™s entry into a segment linked to industrial and food-grade carbon dioxide production. According to the documents available with BUSINESS RECORDER, the approval was granted following a Phase-I merger review under the Competition Act, 2010. The transaction involves the acquisition of Pakistan Oxygenâ€™s LCO2 plant by Pak Arab Fertilisers Limited, a wholly owned subsidiary of Fatima Fertiliser Company Limited. The development comes at a time when Pakistan Oxygen Limited has reported its strongest-ever financial performance. The company posted a record profit after tax of Rs1.7 billion for calendar year 2025, up 134 percent from Rs712 million a year earlier, while earnings per share rose to Rs19.16 from Rs8.17. Net sales increased 15 percent to Rs13 billion, whereas gross profit surged 71 percent to Rs5.24 billion. Market analysts attributed the sharp improvement in profitability to enhanced operational efficiencies and disciplined pricing. According to an analyst briefing note issued by AKD Securities, the companyâ€™s new 270-tonnes-per-day air separation unit at Port Qasim operated more efficiently than originally designed, significantly improving margins. The merger application was submitted to the CCP under Section 11 of the Competition Act, 2010 pursuant to an Asset Purchase Agreement signed on February 4, 2026. Following its assessment, the Commission authorised the transaction under Section 31 of the Act. Pak Arab Fertilisers is engaged in the manufacturing, production, import, export and sale of fertilisers and chemicals, while Pakistan Oxygen is one of the countryâ€™s oldest industrial gas producers, supplying industrial and medical gases, welding electrodes and medical equipment. The Commission examined the transactionâ€™s likely impact on market concentration and competition in the production and sale of liquid carbon dioxide in Pakistan. According to the order, the transaction constitutes a horizontal merger because both the acquiring group and the target are active in the same relevant market. However, the CCP concluded that the resulting increase in market share would be limited and would not materially alter competitive conditions. The regulator further observed that the acquisition would neither create barriers to entry nor significantly enhance the market power of the merger parties. The Commission found no basis to conclude that the transaction would substantially lessen competition, create or strengthen a dominant position, or distort prevailing market conditions. Consequently, it approved the acquisition under Section 31 (1) (d) (i) of the Competition Act. The latest approval reflects the CCPâ€™s ongoing role in facilitating corporate restructuring, investment and asset transactions while ensuring that market competition remains intact. Copyright Business Recorder, 2026

Date: 2026-06-04

Details: Published June 4, 2026 Updated about 2 hours ago KARACHI: Systems Limited (SYS), Pakistanâ€™s largest listed technology company, has attributed the decline in its first-quarter margins to a combination of wage inflation, higher fuel costs, rupee appreciation and fewer working days, while expressing confidence in future growth through expansion in North America and recently completed acquisitions. The management shared the outlook during a corporate briefing held on Tuesday to discuss the companyâ€™s financial performance for the quarter ended March 31, 2026, according to a report issued by Topline Research. Systems Limited reported a consolidated profit after tax of Rs3.03 billion in the first quarter of 2026, translating into earnings per share (EPS) of Rs2.05, up 21 percent compared with the same period last year. Despite strong earnings growth, the companyâ€™s gross margins declined to 25 percent during the quarter. Management explained that profitability was affected by multiple factors, including rising employee costs, higher fuel prices, appreciation of the Pakistani rupee against foreign currencies, and a lower number of working days during the reporting period. The company also highlighted a slowdown in collections, particularly from the Kingdom of Saudi Arabia (KSA), which contributed to an increase in trade receivables during the quarter. Management warned that collections from Middle Eastern markets could face additional pressure if regional geopolitical tensions persist, reflecting the growing uncertainty surrounding business activity in the region. To diversify revenue streams and reduce dependence on Middle Eastern markets, Systems Limited is increasingly focusing on growth opportunities in North America following the integration of Confiz, a strategic acquisition aimed at strengthening the companyâ€™s international footprint. According to management, the acquisitions of Confiz and BAT SAA have collectively added between eight and ten enterprise-level clients to the companyâ€™s customer portfolio, providing opportunities for further revenue growth and cross-selling of services. The company also addressed concerns regarding visa-related restrictions in the United Arab Emirates, which have periodically raised questions about the ability of Pakistani technology firms to deploy talent in the Gulf region. Management stated that such restrictions no longer pose a significant threat to the companyâ€™s operations or hiring plans, noting that only 52 percent of its workforce in the region consists of Pakistani nationals, while the remainder comprises employees from other countries. On the policy front, management disclosed that it had participated in pre-budget consultations with the government and advocated for the continuation of the existing 0.25 percent Final Tax Regime (FTR) applicable to IT exporters. The company expressed optimism that the preferential tax framework would be retained in the upcoming federal budget, citing its importance for maintaining the competitiveness of Pakistanâ€™s technology export sector. Management also discussed proposals related to tax harmonization between freelancers and salaried employees, as well as reforms linked to the Export Facilitation Scheme (EFS), which were presented to policymakers during the consultations. Analysts believe the company remains well-positioned to benefit from Pakistanâ€™s expanding IT exports and increasing global demand for digital transformation services, despite short-term margin pressures and regional uncertainties. Copyright Business Recorder, 2026

Date: 2026-06-04

Details: Published June 4, 2026 Updated about 2 hours ago ISLAMABAD: The Federal Tax Ombudsman (FTO) has recommended that the Federal Board of Revenue (FBR) establish a structured mechanism for receiving, evaluating, and responding to information provided by citizens regarding revenue leakages, tax-base expansion, and systemic tax compliance issues. The matter arose from a complaint filed under Section 10 (1) of the Federal Tax Ombudsman Ordinance, 2000, alleging maladministration on the part of the FBR due to its failure to respond to communications submitted by the complainant. According to the complaint, the complainant had written to the Chairman FBR on 18 January 2024, proposing special measures for the realisation of taxes allegedly not being charged, particularly in relation to taxable supplies. He maintained that the information in his possession had the potential to generate billions of rupees in additional national revenue. The complainant stated that despite the passage of considerable time, no response was received from the FBR. He subsequently submitted a reminder on 27 October 2025 to the Chairman FBR, warning that failure to address the matter would compel him to seek redress before the Federal Tax Ombudsman. However, the reminder also remained unanswered, leading him to file a formal complaint before the FTO. During the investigation, the FTO observed that the issues raised in the complaint primarily related to matters falling under the Islamabad Capital Territory (Tax on Services) Ordinance, 2001, and provincial sales tax laws. As these statutes do not fall within the jurisdiction of the Federal Tax Ombudsman under the definition of â€œRelevant Legislationâ€ contained in Section 2 (6) of the FTO Ordinance, 2000, the complaint was initially closed for want of jurisdiction. Aggrieved by the decision, the complainant filed a review petition, contending that the FTO had incorrectly assumed that all nineteen reported cases related to sales tax on services. He clarified that only five cases pertained to services, while the remaining cases involved taxable goods, and furnished details to substantiate his position. While examining the review petition, the Federal Tax Ombudsman emphasised that citizens who, in good faith, provide information capable of broadening the tax base, identifying revenue leakages, or improving tax administration perform a valuable public service. The Ombudsman noted that such information merits proper institutional consideration, even where it may not fall within the scope of the Inland Revenue Reward Rules, 2021. The FTO further observed that the case highlighted a significant systemic gap within the existing tax administration framework. Although reward mechanisms exist for certain tax evasion cases, there appears to be no comprehensive process for handling information relating to revenue leakages, tax-base expansion, administrative shortcomings, or broader compliance concerns. As a result, potentially valuable information supplied by citizens may not receive due attention, leading to missed opportunities for revenue enhancement and administrative improvement. In view of these observations, the Federal Tax Ombudsman recommended that the Federal Board of Revenue examine the feasibility of establishing a structured framework for dealing with information received from citizens and informers regarding revenue leakages, tax-base expansion, and systemic compliance issues. The FTO specifically recommended that the FBR consider developing transparent eligibility criteria for recognition or rewards in cases where information demonstrably contributes to revenue recovery, prevention of revenue loss, expansion of the tax base, or measurable improvements in tax administration. The Ombudsman also advised the issuance of necessary rules, guidelines, or administrative instructions to effectively implement and oversee such a framework. The review petition was disposed of in the above terms, and the order in review shall be read together with the Forumâ€™s earlier order dated 20 February 2026. Copyright Business Recorder, 2026

Date: 2026-06-04

Details: Published June 4, 2026 Updated about an hour ago KARACHI: The petroleum dealers have given the government a 48-hour ultimatum over their demand for an increase in commission, warning that a major decision regarding the future of petrol pumps across the country will be announced if the Petroleum Ministry fails to respond within two days. The dealers said that operations at petrol pumps under the current commission structure had become financially unviable, adding that they were under severe economic pressure. According to the petroleum Chief Advisor to the Petroleum Dealers Association (PPDA), Malik Khuda Bakhsh, the situation has reached a point where continuing business operations has become extremely difficult. READ MORE: Petroleum dealers demand hike in profit margins He said that a formal and final letter regarding the commission issue would be sent to the Petroleum Minister, outlining the dealersâ€™ demands and financial concerns. The association further warned the government that if it failed to take immediate notice, its 30-member core committee would take a decision, and Chairman Abdul Sammi Khan would announce the next course of action. He said that the options under consideration may include nationwide protest measures or other strong steps. The dealers also claimed that the sale of diesel in the country had nearly collapsed, while smuggled petroleum products had been dominating the market, further hurting legal operators. Meanwhile, five major refineries have formally alerted the government over rising concerns of petroleum smuggling, stating that it poses a serious threat to the domestic refining industry. They also warned that declining diesel sales had been causing storage capacity issues. Bakhsh said that during the recent tension in the Middle East, the government had sought their cooperation, but they were now facing severe financial strain themselves. They added that war-related uncertainty and rising economic pressure had rapidly depleted working capital in the sector. The PPDA has urged the Petroleum Minister to visit Karachi and assess ground realities and the financial losses being suffered by the dealers. Copyright Business Recorder, 2026

Date: 2026-06-03

Details: Automotive Budget 2026-27 Taxation June 3, 2026Faisal Shahnawaz Proposed end of EV tax incentives and higher levies on hybrids raise concerns over market slowdown Pakistanâ€™s push toward cleaner transport could face a setback as the government considers ending tax concessions on electric vehicles in the Budget 2026-27, potentially raising costs for consumers and slowing industry growth, according to sources. Under the proposal, sales tax on electric vehicles may be increased from the current concessional rate of 1% to the standard rate of 18%, significantly raising the cost of ownership for prospective buyers. The move is part of broader revenue-raising measures under consideration ahead of the federal budget, sources said. However, industry stakeholders warn the change could undermine investment and stall momentum in the countryâ€™s emerging EV sector. Electric vehicles, which fall under the broader category of Electric Vehicle adoption in Pakistan, have gained traction in recent years amid rising fuel prices and growing interest in lower-cost mobility alternatives. A sharp increase in taxation is expected to raise vehicle prices significantly, making EVs less affordable for middle-income consumers who have increasingly viewed them as a viable alternative to conventional fuel-powered cars. Industry sources say both local and international firms have invested in Pakistanâ€™s EV ecosystem, encouraged by earlier government incentives aimed at reducing carbon emissions and dependence on imported petroleum. Pakistan spends billions of dollars annually on fuel imports, with the transport sector accounting for a major share of consumption. Policymakers have previously viewed EV adoption as a long-term strategy to ease pressure on foreign exchange reserves. Demand for electric vehicles has reportedly risen in recent months as elevated fuel prices pushed consumers to explore alternative transport options. In a related development, the government is also considering increasing the sales tax on hybrid vehicles from 8.5% to 18% as part of the same fiscal package. If implemented, the proposed changes could significantly reshape Pakistanâ€™s automotive market and slow the transition toward cleaner transportation technologies. Neither the finance ministry nor relevant officials have publicly commented on the proposed measures.

Date: 2026-06-03

Details: Budget 2026-27 Taxation June 3, 2026Faisal Shahnawaz Proposal to shift stationery items to standard tax rate sparks concern over affordability and inflation pressures Millions of Pakistani families could face higher education-related expenses as the government considers increasing sales tax on stationery items from the current reduced rate of 10% to 18% in the upcoming Budget 2026-27, according to sources. The proposal would bring stationery products under the standard sales tax regime, potentially raising prices of essential school supplies including notebooks, pens, pencils and other learning materials used by students nationwide. The move comes at a time when households are already grappling with elevated inflationary pressures. Rising fuel costs, driven by geopolitical tensions in the Middle East, have contributed to an increase in the prices of goods and services across the economy, further straining household budgets. Official data from the Pakistan Bureau of Statistics (PBS) shows that education-related inflation rose by nearly 9% in May 2026 compared with the same period last year, reflecting higher costs of schooling, transport and related services. Education experts and market stakeholders have warned that any increase in taxation on stationery items could further intensify financial pressure on families, particularly those in low- and middle-income groups. They argue that stationery products should be treated as essential educational goods and exempted from higher tax brackets to ensure affordability and continued access to basic learning materials. Critics also caution that the proposed tax hike could negatively affect school enrolment rates, especially in economically vulnerable communities, as rising costs may force parents to reduce educational spending amid already constrained household incomes. The proposal is expected to be closely monitored as discussions on the federal Budget 2026-27 continue ahead of its presentation in parliament.

Date: 2026-06-03

Details: Budget 2026-27 Taxation June 3, 2026Faisal Shahnawaz Proposed relief target withholding tax on property transactions for filers as budget details emerge ahead of FY2026-27 The government is considering significant tax relief measures for Pakistanâ€™s real estate sector in the upcoming FY2026-27 budget, aiming to stimulate economic activity, boost construction and generate employment, according to sources familiar with the matter. The proposed changes focus on reducing withholding taxes imposed under Sections 236K and 236C, which govern property purchases and sales. Under the proposal, the withholding tax on property purchases for tax filers could be reduced from 1.5% to 0.25%, while the tax on property sales may be cut from 4.5% to 1.5%, marking a substantial easing in transaction costs. Sources said the government has already briefed the International Monetary Fund (IMF) on its intention to lower property transaction taxes as part of broader fiscal discussions. Officials believe that reducing taxes on real estate transactions could help revive market activity, encourage documentation, and ultimately expand the tax base, even as short-term revenues may decline. However, the proposed relief is expected to remain limited to tax filers. Non-filers are unlikely to receive any concessions in the upcoming budget, with the existing 10.5% tax rate on property transactions expected to stay unchanged to discourage undocumented activity. Separately, sources in the Ministry of Finance provided key macroeconomic indicators ahead of the budget presentation. The total federal budget outlay for FY2026-27 is projected at Rs17.1 trillion, with economic growth targeted at 4.1% and inflation estimated at 8.4%. According to the proposed framework, the Federal Board of Revenue (FBR) is expected to be assigned a tax collection target of Rs15.267 trillion. Petroleum levy collections are projected at Rs1.727 trillion. On the expenditure side, development spending is estimated at Rs1.1 trillion, while debt servicing is projected at Rs7.824 trillion and defence expenditure at Rs2.665 trillion. The proposed fiscal plan reflects ongoing efforts to balance economic stimulus measures with fiscal consolidation targets ahead of the new financial year.

Date: 2026-06-03

Details: Budget 2026-27 National June 3, 2026Mrs. Anjum Shahnawaz PIDE proposes hybrid wage-setting model linked to productivity, affordability and worker welfare The Pakistan Institute of Development Economics (PIDE) on Tuesday proposed raising the national minimum wage to Rs45,000 per month for fiscal year 2026-27 under a new evidence-based framework designed to reform wage determination and strengthen labour market governance. In its Policy Viewpoint No. 62, titled â€œReforming Minimum Wage Determination in Pakistan: From Wage Announcements to Wage Governance,â€ PIDE called for replacing the existing wage-setting approach with a transparent, rules-based system aligned with principles of the International Labour Organization (ILO). The proposed framework seeks to balance worker welfare, purchasing power protection, labour market affordability, productivity gains and provincial implementation challenges, according to the study. Using official data from the Pakistan Bureau of Statistics (PBS) and the Ministry of Planning, Development and Special Initiatives, the institute recommended a national minimum wage benchmark of Rs45,000 per month for FY2026-27. The proposed rate represents a 12.5% increase from the current notified minimum wage of Rs40,000. Speaking at the launch of the policy viewpoint, Dr. Nadeem Javaid, Vice Chancellor of PIDE and a member of the Planning Commission of Pakistan, said minimum wage determination should move beyond an annual administrative exercise and be linked more closely to economic realities and labour welfare objectives. â€œPakistan now requires a credible wage governance system that balances worker protection, productivity, business sustainability and macroeconomic stability within a transparent institutional framework,â€ he said. The report recommends a hybrid methodology that incorporates multiple indicators rather than relying solely on inflation or poverty thresholds. These include worker-family needs, productivity trends, business affordability and labour market conditions. Dr. S. M. Naeem Nawaz, Professor of Economics at PIDE and co-author of the study, said an effective minimum wage must be both realistic for workers and enforceable by provincial authorities. He noted that nearly 80% of Pakistanâ€™s workforce remains employed in the informal sector, making compliance and enforcement major challenges for policymakers. According to the study, a modern wage governance system should promote higher compliance, improve transparency and ensure that minimum wage adjustments are grounded in measurable economic indicators rather than ad hoc decisions. The proposal comes as policymakers prepare budget recommendations for FY2026-27 amid concerns over inflation, labour market conditions and the purchasing power of low-income households.

Date: 2026-06-03

Details: Published June 3, 2026 Updated about 5 hours ago By Reuters NEW YORK: The Dow and the S&P 500 scaled fresh record highs on Tuesday as strong results from Hewlett Packard Enterprise and a funding commitment from Alphabet reinforced confidence in the AI buildout. HPE surged about 26 percent, on track for a record one-day percentage gain, after the AI server maker pulled forward its long-term financial targets by two years. Peer Super Micro Computer climbed 6 percent, while chipmakers gained 5 percent. Alphabet said it was looking to raise USD80 billion in equity offerings, including an investment from Berkshire Hathaway, to fund a costly expansion of its AI infrastructure. While Alphabetâ€™s stock itself slipped nearly 2.5 percent, dragging down the communications services index almost 1.5 percent, the news fanned optimism around AI infrastructure spend. â€œIt confirms the insatiable demand that weâ€™re seeing really across the board for AI. Every day it seems like a different company comes out with incredible signs that this wave of AI is alive and well,â€ said Ryan Detrick, chief market strategist at Carson Group. The S&P 500 and the Nasdaq logged their eighth straight session of gains on Monday and closed at record levels after Nvidia unveiled a new processor to bring AI to personal computers. Marvell Technologyâ€™s shares surged more than 26 percent to over USD240 billion in market value after Nvidia Chief Executive Officer Jensen Huang called the chipmaker the next â€œtrillion dollar companyâ€ at the Computex conference in Taipei. Nvidia invested USD2 billion in Marvell in March. At 11:26 a.m. ET, the Dow Jones Industrial Average rose 155.84 points, or 0.31 percent, to 51,234.72, the S&P 500 gained 17.47 points, or 0.23 percent, to 7,617.43 and the Nasdaq Composite gained 73.42 points, or 0.27 percent, to 27,160.23. Seven out of 11 major S&P 500 indexes were in the green, with utilities advancing the most. The software index dropped 3.7 percent as a recovery rally stalled following a 14 percent surge in the last three sessions. ServiceNow, Salesforce and Intuit were down between 6 percent and 10 percent. Microsoft dropped 3.7 percent. Microchip Technology advanced 6 percent after an upbeat data center revenue forecast. Upbeat first-quarter results and AI enthusiasm have driven the rally on Wall Street, with hopes for an end to the US-Iran conflict and a reopening of the Strait of Hormuz adding support. But recent flare-ups in tensions have raised concerns that a prolonged conflict could stoke inflation, push the Federal Reserve toward tighter policy and threaten Wall Streetâ€™s record run. US Secretary of State Marco Rubio told lawmakers that Iran had agreed to negotiate aspects of its nuclear program that it previously refused to discuss.

Date: 2026-06-03

Details: Corporate Trade & Industry June 3, 2026Faisal Shahnawaz Online registrations account for 99.9% of incorporations as corporate sector expansion continues The Securities and Exchange Commission of Pakistan (SECP) registered 3,161 new companies in May 2026, demonstrating continued growth in the countryâ€™s corporate sector despite a reduced number of working days due to Eid-ul-Adha holidays. According to an official statement issued on Tuesday, nearly all new companies were incorporated through the Commissionâ€™s digital platform, with online registrations accounting for 99.9% of the total. The latest additions increased the total number of registered companies in Pakistan to 297,239. The SECP also reported a record achievement during the month by incorporating 415 companies in a single day, marking the highest number of daily registrations in the regulatorâ€™s history. The milestone reflects increasing corporatisation across various sectors of the economy and highlights the effectiveness of the SECPâ€™s digital registration and compliance systems. Punjab remained the largest contributor to new company registrations, with 1,643 incorporations representing 52% of the monthly total. Islamabad Capital Territory followed with 596 new companies, while Sindh registered 479 companies. Khyber Pakhtunkhwa recorded 260 incorporations, followed by Gilgit-Baltistan with 112 and Balochistan with 71. Private limited companies continued to dominate the corporate landscape, accounting for 1,884 new registrations during the month. Single-member companies (SMCs) recorded 1,212 incorporations, indicating sustained growth in individual entrepreneurship and small business formalisation. Sector-wise, the information technology and e-commerce segment led new business formation with 598 registrations. The trading sector followed with 503 new companies, while services recorded 404 incorporations. Real estate development and construction contributed 303 new companies during the period. The SECP said foreign participation was observed in 80 locally incorporated companies, with investors from 17 countries acquiring shareholdings. China remained the largest source of foreign investment participation, with 89 shareholders investing a combined paid-up capital of PKR 132.3 million. Chinese investors accounted for the majority of the total foreign paid-up capital of PKR 139.4 million recorded during the month. The figures indicate continued investor interest in Pakistanâ€™s corporate sector and underscore the growing adoption of formal business structures supported by the countryâ€™s digital regulatory framework.

Date: 2026-06-02

Details: Published June 2, 2026 Updated about 3 hours ago By Recorder Report KARACHI: Sindh Senior Minister and Minister for Local Government Syed Nasir Hussain Shah on Monday chaired a high-level meeting to review Annual Development Plan (ADP) 2026-27 and progress on ongoing projects in the province. The meeting was attended by Secretary Local Government, Special Secretary Local Government, Director General KDA, Director General MDA, COO Water Board, Director Mega Projects and other concerned officers. According to the officials, the meeting reviewed the ADP for the fiscal year 2026-27, progress on ongoing schemes and the framework for new development projects. Secretary Local Government briefed the meeting in detail on the proposed development schemes and planning priorities for the upcoming year. The meeting reviewed development schemes related to Malir Development Authority, Lyari Development Authority, Sehwan Development Authority, Karachi Water and Sewerage Corporation and Mega Projects, while detailed discussions were also held on projects aimed at improving urban infrastructure, roads, drainage systems, provision of safe drinking water and enhancement of civic amenities. Special consideration was given to rainwater harvesting and groundwater recharge projects to address future water scarcity challenges and ensure effective conservation of rainwater resources. Syed Nasir Hussain Shah directed that comprehensive and effective planning be undertaken for the launch of development schemes across the province, with priority given to projects that directly benefit the public. He emphasised the need to focus on infrastructure development, provision of civic facilities and sustainable development initiatives, while directing all concerned institutions to further improve their performance to ensure timely completion of ongoing projects. The Sindh Local Government Minister also directed that key schemes of Karachi Metropolitan Corporation, Mega Projects, Karachi Development Authority, Malir Development Authority and Sehwan Development Authority, along with other important projects, be included in the upcoming budget to accelerate the pace of development. Copyright Business Recorder, 2026

Date: 2026-06-02

Details: Published June 2, 2026 Updated about an hour ago By BR Research Headline CPI inflation rose11.66 percent year-on-year in May, the highest in 24 months. Headline inflation stayed lower than market expectations, largely due to a bigger fall than anticipated in personal effects, detergents, footwearand fresh vegetables. The real story of May inflation rests with the sharp spike in core inflation â€“ that rose to 9 percent in urban settings, highest since September 2024. The fiscal year to date inflation at 6.7 percent is now inching closer to the upper band of the central bankâ€™s medium-term inflation target. Perishables nearly wiped all the increase in non-perishable on a month-on-month basis, led by a sharp decline in tomato and fresh vegetables prices that slid 43 percent and 25 percent, month-on-month. While tomatoesâ€™ decrease was still in line with historical directional change, fresh vegetables recorded the sharpest month-on-month fall in 42 months. Combined with over 2 percent weight in overall CPI basket, the impact was felt across. Housing and transport indices were well in line with expectations, as lower adjustment for the month led to a moderate decline in electricity charges, whereas motor fuel increase was contained especially towards the latter half of the month. Electricity tariffs were up 36 percent year-on-year, and the average national domestic tariff now stands close toRs27/unit.With higher fuel price adjustment lined up for June, an increase close to 5 percent month-on-month is on the cards in lieu of electricity tariffs.transport sub-index, is subject to greater risks given the geopolitical uncertainty. But given the recent encouraging signs on the war front, the month-on-month price change has more chances of being on the lower side. Given that much of the headline inflation has been moved by transport fuel prices, this should keep transport inflation checked, all things constant. That being said, the real story is slowly building around core inflation, where prices of nonâ€”food non-energy essential household items have started to firm up. The signs were evident in the last two WPI readings, and readings for May, may well just be the start of what is in store in terms of core inflation. Footwear in urban settings rose an unprecedented 29 percent month-on-month â€“ comfortably the highest monthly increase ever recorded. With a considerable weight of 1.48 percent, the impact was significant. Surprisingly, footwear prices in rural settings barely changed from a month ago, but it may well play catch up soon, at least directionally if not in terms of magnitude. Similarly, detergents registered a 33-month high, as sings were emerging in the WPI a month earlier. Household equipment have also become pricier at a much faster pace month-on-month, as soaring transportation costs are trickling to second round of inflation, via pass through. Construction wage rates, too, increased at the highest month-on-month rate in three years. All these point towards stickier prices going forward, even if energy related inflation cools off sooner. Core inflation is now well clear of the central bankâ€™s medium-term target and that would make for an interesting input in the upcoming MPS. More economic data has to arrive before the next MPS, but core inflation alone warrants a deeper look as to how entrenched and how anchored the prices are for the near future. With the news cycle warning of higher standard sales tax in the upcoming budget and an even bigger in electricity tariff structure, in case of cross subsidy becoming more targeted, the impact on inflation could keep the MPS decision makers on their toes.

Date: 2026-06-02

Details: Published June 2, 2026 Updated about 2 hours ago By Mubashir Akram Every year before the federal budget, Pakistan hears the same prescription from tobacco-control campaigners: raise cigarette taxes again. The argument sounds neat. Higher prices will reduce smoking, raise revenue, and protect young people. The problem is that Pakistanâ€™s cigarette market is no longer neat. A growing share of consumption now sits outside the documented economy, beyond tax stamps, lawful pricing, and serious retail discipline. Another tax hike on legal cigarettes is therefore not a fiscal strategy. It is a wager that consumers will stop buying rather than shift to cheaper illegal brands. Pakistanâ€™s recent experience suggests the opposite. The turning point came in February 2023, when the government raised Federal Excise Duty on cigarettes through the emergency mini-budget. Public summaries show that the upper-tier FED rose to Rs. 16,500 per 1,000 sticks, while the two-tier structure remained in place. The Finance Act 2024 then left the main rates unchanged, while adjusting the lower-tier threshold. The debate stayed focused on the legal, taxed industry while illegal cigarettes moved deeper into retail markets. If the tax-hike theory worked cleanly, the state should have seen a stable or rising legal tax base after such a major increase. Instead, business reporting based on FBR data has shown stress in cigarette FED collection and a shrinking contribution from cigarettes within total FED. The message is blunt: when legal prices rise, and illegal packs remain available at lower prices, the market does not disappear. It migrates. This is the point many local NGOs avoid. Their statements speak about â€œthe tobacco industryâ€ as if Pakistan has one unified market. It does not. The legal cigarette market pays excise and sales taxes, follows packaging rules, and operates under Track and Trace. The illegal market pays little or nothing, ignores legal warnings and price floors, and uses the price gap as its business model. Treating both as one industry produces bad policy because it punishes the side that the state can already tax. Industry and enforcement-linked estimates place Pakistanâ€™s cigarette market at slightly above 80 billion sticks annually. Several assessments suggest more than half may now be outside the tax net. If nearly 43 billion sticks escape proper duty, the annual tax loss crosses USD 1 billion. The scale of that illegal trade is likely much larger, as unpaid duties support transporters, wholesalers, retailers, financiers, and protection networks. This is not a technical wrinkle. It is the main event. The strongest counterargument from tax activists is that Pakistan must follow global best practices and meet international public-health commitments. That argument deserves attention, but it cannot be applied blindly. The United States signed the WHO Framework Convention on Tobacco Control but did not ratify it. Switzerland, where the WHO is headquartered, also signed but has not ratified it. Pakistan should ask why donor-backed networks and local advocacy groups press it yearly to reshape fiscal policy around a treaty architecture that some powerful countries have not accepted. That does not mean Pakistan should ignore health concerns. It means Pakistan should not outsource fiscal policy to campaign templates written for markets that do not resemble Pakistan. Where enforcement remains uneven, raising taxes on legal cigarettes before crushing illegal supply can weaken both revenue and health objectives. It can push smokers toward cheaper products that the state neither taxes nor regulates. Australia offers a warning. It has some of the worldâ€™s highest tobacco taxes and a far stronger enforcement state than Pakistan. Yet official and criminal-intelligence reporting shows illegal tobacco has become a major revenue and crime problem. The Guardian reported that Australiaâ€™s illegal tobacco trade cost the federal government about AUSD 3.3 billion in lost revenue in 2023-24. High legal prices helped create a massive gap between legal and illegal packs. Even a high-capacity state is discovering that criminals can capture price gaps. Canadaâ€™s history also matters. In the early 1990s, tobacco smuggling became so serious that the federal government announced dramatic excise reductions in 1994 to combat contraband trade. That episode does not prove that low taxes are desirable. It proves something more practical: when tax policy outruns enforcement reality, illegal networks can force policy reversal. The governmentâ€™s first job is not to raise legal cigarette taxes again. Its first job is to make the illegal cigarette business risky, unstable, and unprofitable. That requires full Track and Trace enforcement, retail inspections, action against non-tax-paid brands, prosecution of illegal manufacturers, control over raw material leakages, and tighter border and wholesale monitoring. Customs, Inland Revenue, provincial administrations, and police must work as one system. Only after the state restores control over the market can it discuss tax changes with credibility. Until then, higher FED will widen the price gap that illegal operators exploit. It will squeeze legal companies, reduce documented sales, and make the government dependent on a shrinking compliant base. Pakistan needs more revenue, not more slogans. It needs fewer illegal cigarettes, not only costlier legal ones. The easy line is that higher taxes mean higher income. In Pakistanâ€™s cigarette market, that line is becoming a bad joke. More taxes will not mean more income if the income walks out through the back door of the illegal market. Copyright Business Recorder, 2026

Date: 2026-06-02

Details: Published June 2, 2026 Updated about 3 hours ago By Sohail Sarfraz ISLAMABAD: The federal government is likely to introduce legislation through Finance Bill 2026 to tax and document cryptocurrency transactions in the coming budget (2026-27). Sources told BUSINESS RECORDER that the taxation of cryptocurrency is the biggest challenging task for the government. The Tax Policy Unit of the Finance Ministry as well as Federal Board of Revenue (FBR) is devising an initial crypto taxation framework that will eventually integrate with Pakistanâ€™s broader fiscal system. The biggest institutional challenge, however, lies in repatriation of crypto assets held abroad. Keeping in view sensitively of the issue, the government is working on multiple proposals to finalize the taxation framework to ensure documentation as well as encourage investment. The FBR is also exploring options of taxing money/profits generated and assets created through the deals of digital currency. On one hand, the government is encouraging investment in digital assets, but on the other, the government would ensure to avoid misuse of the facility. The biggest challenge is to document cryptocurrency transactions, but wanted to protect the source of investment as well. The documentation of un-registered persons would be the biggest challenge for the tax machinery. Therefore, taxation framework for cryptocurrency is not an easy task. The government is considering granting some concessions to the cryptocurrency transactions and smartly dealing with the issue of tax rates, tax treatment and documentation of un-registered persons. Another issue is that the source of investment may not be checked, but the facility should not be misused under the new law. One of the proposals under consideration is to expand the scope of section 37 (capital gains tax) of the Income Tax Ordinance 2001 on cryptocurrency to charge tax. The current situation requires development of a taxation mechanism covering all segments of crypto activity. Taxation of capital gains from trading virtual currencies represents the most straightforward component. According to past report of the Federal Tax Ombudsman to the Federal Board of Revenue (FBR) on cryptocurrencies, there are 560 million users of digital currency worldwide, and of these, nine million users are in Pakistan. Pakistan is the sixth-largest country in the world to adopt cryptocurrency. The State Bank of Pakistan issued a circular on April 6, 2018, regarding Risks of Virtual Currencies, but did not declare virtual currency as illegal. Pakistanâ€™s cryptocurrency market is experiencing rapid growth, with increasing interest from both individual investors and institutional players, the FTO maintained. It is pertinent to note that money/ profits generated and assets created through dealings in cryptocurrency will remain undocumented/ untaxed, unless this regime is streamlined by introducing legal provisions and regulated through well-defined rules. Grappling with the menace of massive evasion, this newly emerging window can ease some of the governmentâ€™s revenue constraints. The legislation on cryptocurrency shall broaden the tax base, which is pending so far before the Policy Wing of the FBR and needs to be properly addressed on a priority basis, the FTOâ€™s report added. A tax expert suggested that the legalization process, while timely and necessary, introduces complex fiscal, regulatory, and structural challenges, most probably the question of how to effectively tax virtual asset transactions without discouraging innovation or triggering capital flight. Copyright Business Recorder, 2026

Date: 2026-06-02

Details: Published June 2, 2026 Updated about 3 hours ago By Press Release ISLAMABAD: Pakistan Textile Council (PTC) Chairman Fawad Anwar has urged the government to adopt the textile and apparel industryâ€™s budget recommendations for FY2026-27, warning that these proposals represent the minimum requirements necessary to preserve the viability of Pakistanâ€™s largest export sector. Speaking on behalf of the countryâ€™s leading textile and apparel associations, Fawad Anwar said that the cost of doing business in Pakistan has increased continuously over the last three years due to higher energy tariffs, rising taxation, increased statutory labour contributions, withdrawal of export support mechanisms, and mounting compliance costs. He said while Pakistanâ€™s competitors including Bangladesh, India, Vietnam and China have strengthened incentives for exporters, rationalized tax structures and provided competitive energy tariffs to industry, Pakistanâ€™s manufacturers have been subjected to steadily rising costs, resulting in a widening competitiveness gap. â€œThe textile industry is not asking for special treatment or subsidies. We are only seeking parity with our regional competitors. These recommendations are not wish-list demands; they are the minimum requirements needed to keep the industry operational and competitive,â€ said Fawad Anwar. He cautioned that if corrective measures are not taken in the upcoming budget, the countryâ€™s export sector would face severe consequences. â€œIf these minimum recommendations are not accepted, many industrial units will become unsustainable. The industry is already operating under immense pressure. Continued policy inaction will lead to further closures, loss of employment, decline in exports and reduced foreign exchange earnings. Simply put, the industry will struggle to survive,â€ he added. The Chairman highlighted that exporters are currently facing one of the highest cost structures in the region. Industrial electricity tariffs remain significantly above competing countries while gas prices for industry are among the highest in Asia. He reiterated the industryâ€™s demand for electricity at 8 cents per unit and gas at $7 per MMBtu, along with the removal of the off-grid levy and other distortionary surcharges. Fawad Anwar further noted that exporters are suffering from an unprecedented liquidity crisis due to delayed refunds and excessive front-loaded taxation. According to industry estimates, approximately PKR 828 billion of exporter capital remains trapped within the regulatory framework through outstanding refunds, blocked advance taxes and GST locked in inventories. Copyright Business Recorder, 2026

Date: 2026-06-02

Details: Published June 2, 2026 Updated about 3 hours ago By Naveed Butt ISLAMABAD: Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal has said that the Ministry of Finance has allocated Rs1.126 trillion for the Public Sector Development Programme (PSDP) 2026â€“27 against total development requirements of Rs4.097 trillion, resulting in a funding gap of nearly Rs3 trillion. The minister said that the government has set a 4 percent Gross Domestic Product (GDP) growth target for fiscal year 2026â€“27, up from an estimated 3.7 percent in the current fiscal year (2025â€“26). While addressing the Annual Plan Coordination Committee (APCC) meeting on Monday, the minister expressed serious concern, saying the government may be forced to shelve development projects worth nearly Rs3 trillion in the new financial year, after receiving project demands of around Rs4 trillion against a PSDP 2026â€“27 allocations of only Rs1.126 trillion. He said projects worth around Rs3 trillion would either be rejected or not approved. â€œWe will have to selectively allocate only Rs1.126 trillion out of demands exceeding Rs4 trillion. This is a very unpleasant task,â€ Ahsan Iqbal said. He said the countryâ€™s development budget fell short of requirements, making the timely completion of projects increasingly difficult and posing a serious challenge to the planning process. â€œThe PSDP allocation of Rs1.126 trillion includes Rs125 billion earmarked for the N-25 Highway project in Balochistan, which, he said, is a non-negotiable priority identified by the Prime Minister and will be completed at all costs,â€ he said. He added that around Rs87 billion had been set aside for projects proposed by coalition partners, while approximately Rs100 billion had been earmarked for development initiatives in Balochistan. The minister emphasized the need to prioritize and complete ongoing development projects, saying that limited fiscal space and a growing throw-forward had made it impossible to fund all schemes under the Public Sector Development Programme (PSDP) 2026â€“27. He said these funds should ideally be transferred through the National Finance Commission (NFC) mechanism, but in the absence of a consensus arrangement, they continue to be financed from the federal governmentâ€™s share. He said projected GDP growth would be driven by stronger performance in the agriculture, industry, and services sectors. He added that agricultural growth is projected at 3.8 percent in fiscal year 2026â€“27, compared with 2.9 percent in 2025â€“26. â€œThe services sector is projected to grow from 4.1 percent in 2025â€“26 to 4.2 percent in 2026â€“27, while industrial growth is expected to increase from 3.5 percent to 4.0 percent. Among key subsectors, large-scale manufacturing is projected to grow from 4.5 percent to 6.1 percent, construction from 2.2 percent to 5.7 percent, wholesale and retail trade from 3.7 percent to 4.2 percent, information and communication from 7.5 percent to 7.7 percent, important crops from 0.6 percent to 3.6 percent, and livestock from 3.8 percent to 3.9 percent,â€ he said. At the APCC meeting, the planning minister called for a national campaign to curb tax evasion and expand the tax base, emphasizing that citizen participation is crucial for building a fair and sustainable economy. According to the minister, around Rs10 trillion is required to complete the existing development pipeline. He said a large portion of the national budget is currently being consumed by debt servicing, limiting fiscal space for development spending. He added that PC-I proposals worth Rs5 trillion are currently under review. He said that while provinces have strengthened their development spending capacity, the federal government continues to face resource constraints, leading to a widening gap between federal and provincial development budgets. He said ministries have projects worth Rs3.377 trillion under implementation and have also proposed around 720 new schemes, besides submitting more than 5,500 additional project proposals for consideration. He said the government will need to increase development spending in the long run while ensuring that priority projects are completed and removed from the development portfolio. The minister further said that some less important projects may be discontinued due to limited resources, adding that completing ongoing projects remains the governmentâ€™s top priority. He also said that Pakistanâ€™s economy is recovering and the government will continue efforts to provide relief to the public through better development planning. Highlighting the scale of the challenge, the minister said the federal development portfolio carries a throw-forward of around Rs10 trillion, while ministries have sought nearly Rs4 trillion for ongoing projects. He said that Rs153 billion has been allocated for Azad Jammu and Kashmir (AJK), Gilgit-Baltistan (GB), and the merged districts. He termed the situation a major dilemma for the Ministry of Planning, saying development allocations are being made within a shrinking budget despite growing infrastructure and social sector needs. Ahsan said that nearly Rs70 billion has been allocated for Sustainable Development Goals (SDGs)-related initiatives. Explaining the financial constraints further, he said the remaining fiscal space was significantly reduced after accounting for rupee-cover requirements for foreign-funded projects supported by multilateral institutions, including the Asian Development Bank and the World Bank. The minister said that the demand for rupee cover had initially stood at Rs832 billion but was rationalized to Rs426 billion after consultations between the Economic Affairs Division and relevant ministries. He said that after adjusting for these commitments and a Rs180 billion PSDP cut carried over from the previous year, the development programme is in a deficit position, leaving virtually no room for new projects. He urged all stakeholders to keep fiscal realities in mind while presenting development proposals and prioritize schemes that deliver maximum public benefit and contribute to national growth. Reuters adds: Pakistanâ€™s gross domestic product is expected to grow at 3.7% in the fiscal year ending June 2026, after logging growth of 3.2% in the previous year, its planning minister said on Monday. Copyright Business Recorder, 2026

Date: 2026-06-02

Details: Published June 2, 2026 Updated about 3 hours ago By Zulfiqar Ahmad ISLAMABAD: With federal budget for 2026-27 due to be unveiled on June 5, senior business leaders from across the country called on Prime Minister Shehbaz Sharif on Monday, pressing their case for tax relief, faster refunds and deeper reforms to revive a still-fragile economy. In a high-level pre-budget consultation, representatives from chambers of commerce and industry from across the country submitted a raft of proposals aimed at boosting industrial output, exports and investment. Addressing the delegation, the prime minister said that â€œsustained hard workâ€ had stabilised the economy, and insisted the government would now push for faster growth. He promised further measures in the upcoming budget to support industry and raise production, while directing the Federal Board of Revenue (FBR) to clear all pending tax refund cases by 15 June â€“ a deadline likely to be closely watched by exporters long frustrated by delays. Reaffirming an export-first strategy, the prime minister said economic growth would be driven through collective effort. Despite recent increases in the policy rate, he stated that the export refinance scheme rate would remain capped at 4.5% until June 2027 â€“ a move welcomed by exporters as a rare bit of certainty in an otherwise tight monetary environment. The prime minister also ordered the relocation of Pakistan Revenue Automation Limited (PRAL) headquarters to Karachi, a symbolic shift aimed at bringing tax administration closer to the countryâ€™s commercial hub. In a nod to constituency-level demands, he directed the establishment of a passport office in Gujrat following requests from overseas Pakistanis and business groups. He stressed that reforms and facilitation for small and medium enterprises remain central to the governmentâ€™s economic agenda, and urged investors to explore joint ventures in local electric vehicle production â€“ a sector long touted as Pakistanâ€™s industrial â€œnext big thingâ€ but still struggling to scale. Business leaders, for their part, struck an unusually supportive tone. They praised the prime minister, along with Deputy Prime Minister and Foreign Minister Ishaq Dar and Chief of Defence Forces (CDF) and Field Marshal Syed Asim Munir, for maintaining stability during heightened tensions in the Gulf region, and pledged cooperation in expanding the formal tax base through digitisation. They also welcomed Prime Minister Apna Ghar Programme â€“ the governmentâ€™s flagship housing initiative for low- and middle-income groups â€“ alongside recent reforms in the Export Development Fund, the privatisation of Pakistan International Airlines (PIA), FBR digitisation and the rollout of e-invoicing systems. Still, according to some businessmen present at the meeting, beneath the praise and assurances, the message from industry was clear: progress on paper is no longer enough. What the business community wants now is speed, certainty and above all, delivery. The meeting was attended by senior representatives from FPCCI and chambers in Karachi, Lahore, Rawalpindi, Islamabad, Peshawar, Quetta, Gujrat, Gujranwala and Sialkot, along with Minister for Finance Muhammad Aurangzeb, Petroleum Minister Ali Pervaiz Malik, Power Minister Awais Leghari, governor State Bank of Pakistan (SBP) Jameel Ahmed, FBR chairman Rasheed Langrial and other senior government officials. Copyright Business Recorder, 2026

Date: 2026-06-02

Details: Published June 2, 2026 Updated about 3 hours ago EDITORIAL: Reports suggest that the government intends to implement the Defined Contributory Pension (DCP) in the budget for next fiscal year for those recruited by the armed forces from 1 July 2026 onwards â€“ a policy that has been effective from 1 July 2025 for new recruits in the civilian arm of the government. The economic objective of this policy is salutary: to render the annual pension budget sustainable. Total allocation for pensions was budgeted at 1.066 trillion rupees in the ongoing year â€“ a whopping 6.4 percent of total current expenditure against 716 billion rupees budgeted for Benazir Income Support Programme (BISP) earmarked for the poor and vulnerable (or under 4.1 percent of the total current expenditure) in spite of rising poverty levels to an appallingly high - nearly 43 percent if the calorific value method is used. The budgeted and realised amount for pensions last fiscal year was 1.014 trillion rupees (perhaps the only revised outlay at the end of the year that precisely matched its budget). This accounted for 6.18 percent of the revised current expenditure and 5.8 percent of the budgeted current expenditure in 2024-25. The percentage decline in the revised estimates is therefore not due to a decline in total pensions, which incidentally was not expected as the retirement of those civilian recruits hired last year is too far along to make a difference, but due to a decline in the mark-up attributable to lower policy rate as well as rescheduling of loans. The need to reform the pension system and, like in other countries, make it a contributory system, was acknowledged during several previous administrations. Task forces were set up, studies carried out at state expense, and the consensus of all was to initiate a DCP. Sadly, reforms were continuously postponed with critics alleging that the 7 percent of the total work force that is employed by the state and paid for at the taxpayersâ€™ expense, used its considerable influence and prevailed upon the government of the day to defer the decision. This is reminiscent of the agricultural income tax that was imposed in the provincial budgets last year, a key International Monetary Fund condition, to be effective from 1 January 2025 and yet its collections are so poor that the Fund has now insisted that collections be more in synch with the income of the rich landlords. Reports suggesting that the government is considering not only raising the salaries of its employees but also pensions are extremely disturbing and make a mockery of this reform that has been so long in coming. To conclude, there is concern that the DCP, as applied from last year, may not begin to show dividends before thirty to forty years as and when their retirement becomes due; and additionally, even if these funds are meagre, their collection still allows the government to potentially finance other non-development current expenditures, which should not be the objective. That the government began implementation of DCP last fiscal year must be supported; however, it is hoped that the Finance Minister would share the total amount collected from those newly recruited by the civilian government, and reveal whether this amount has been placed in a dedicated pension fund to be used for investment purposes or whether the treasury operates the amount collected on the basis that money is fungible. Copyright Business Recorder, 2026

Date: 2026-06-02

Details: Published June 2, 2026 Updated about 3 hours ago By Recorder Report LAHORE: The Pakistan Steel Melters Association (PSMA) has urged the government to abolish withholding tax on local scrap purchase and rationalise power tariff in the upcoming federal budget. Addressing at a news conference on Monday, Chairman PSMA Mian Ahmad Hassan presented industryâ€™s proposals for the federal budget 2026-2027 aimed at reforming and reviving the domestic steel sector. He emphasised that immediate implementation of these reforms is vital to safeguard the local steel industry, curb tax evasion, and promote domestic production. Outlining the industryâ€™s core demands and proposals, he said to ensure transparent sales tax recovery, an across-the-board advance sales tax should be collected via electricity bills at a rate of Rs 30 per electricity unit from all steel melters. This collection must fall strictly under the existing normal 18 percent sales tax regime and remain adjustable against the final liability in the sales tax return. He proposed that the withholding of income tax on the purchase of local scrap should be completely abolished. Removing this tax barrier will support local melters who are saving valuable foreign exchange by utilising domestic raw materials instead of relying on imports, he viewed. Moreover, he added that to prevent tax evasion, small furnaces and those installed within sugar mills must be taxed according to their panel and transformer capacity. Regulatory duty on imported steel billets should be substantially increased to offset the high domestic power tariffs and protect the local industry. Speaking about the power tariff rationalisation, the PSMA chairman proposed that electricity rates for melters need to be reduced to reflect that power serves as a primary raw material in the production of quality graded steel. He further proposed that all steel imports must be routed exclusively through sea-ports to effectively curb smuggling and under-invoicing occurring across land borders. Calling for phasing out exemptions, he said the planned reduction of tax exemptions in FATA/PATA and Gilgit-Baltistan must be strictly implemented to ensure a level playing field for all market players while customs duties on high-quality industrial scrap should be reduced to encourage the local manufacturing of specialised graded steel. Copyright Business Recorder, 2026

Date: 2026-06-02

Details: Published June 2, 2026 Updated about 3 hours ago By Recorder Report PESHAWAR: The government of Khyber Pakhtunkhwa has decided to launch 16 agricultural sector development schemes under the Accelerated Implementation Programme (AIP) for the uplift of erstwhile Federal Administered Tribal Area (Fata) in merged districts. It was stated during a review meeting on Agriculture Departmentâ€™s Annual Development Programme (ADP) for the upcoming financial year 2026-27 with Advisor to KP CM on Agriculture on Mian Muhammad Umar Kakakhel in the chair here on Monday. The advisor was given a detailed briefing on ongoing and proposed development projects under Annual Development Programme for 2026-27. The proposed initiatives include promotion of innovate farming through advanced agricultural machinery, installation of solarised tube-wells and efficient groundwater management systems to enhance agricultural production, promotion of biological pest control and feasibility studies for cold chain infrastructure to reduce post-harvest losses, expansion of olive cultivation, strengthening of virus-free seed potato production systems, establishment of a tissue culture laboratory for Dhakki dates and upgradation of germplasm resource centers. To empower youth and develop human resources in agricultural sector, the government is also introducing interest-free loans for agriculture graduates, educational scholarships in agricultural sciences and internship programmes. Other important initiatives include the establishment of a Mountain Agricultural Research Centre in Lower Dir, promotion of temperate horticultural crops, estimation of greenhouse gas emissions from agricultural sector, improvement of crop estimation systems, development of command areas of small dams, enhancement of irrigation infrastructure and expansion of smart irrigation projects. Agriculture Department has also proposed a major project titled â€œProtection of Vulnerable Agricultural Land through Land Stabilisation Structures in Khyber Pakhtunkhwaâ€ to address the challenges posed by climate change and land erosion. Under this project, 1,150 agricultural land stabilisation structures will be constructed across the province, including merged districts, to protect farmland from erosion, rainwater runoff and declining soil fertility. Similarly, proposed programme includes projects aimed at supporting women farmers in the merged districts, promoting small businesses, encouraging cultivation of high-value crops and seasonal vegetables in Tirah Valley, establishing a Tribal Agricultural Research Centre, promoting honey production and ensuring sustainable management of water resources. Speaking on the occasion, Advisor Mian Muhammad Umar said that several new development projects have been proposed under Annual Development Programme (ADP) 2026-27 to promote agricultural growth, modern technology, efficient utilisation of water resources, climate change adaptation and farmers welfare. He stated that proposed initiatives aim to increase agricultural productivity, strengthen rural economy, and create new opportunities for agricultural development across the province, particularly in the merged districts. Copyright Business Recorder, 2026

Date: 2026-06-02

Details: Published June 2, 2026 Updated about 3 hours ago By Recorder Report KARACHI: The Pakistan Freelancers Association (PAFLA) has called on the Federal Board of Revenue (FBR) and the Ministry of Finance to continue supporting Pakistanâ€™s growing freelancing and digital workforce in the Federal Budget 2026-27. PAFLA has recommended retaining the reduced tax rate of 0.25 percent on foreign exchange earnings for the next ten years, alongside allocating funds for capacity-building programs, establishing freelancing hubs in multiple cities, and providing subsidies for internationally recognised certifications. PAFLA Chairman Ibrahim Amin emphasised that extending the 0.25 percent tax regime would encourage freelancers to channel their earnings through local banks and inspire students, young professionals, and women to adopt freelancing as a sustainable career path. He noted that freelancers registered with Pakistan Software Export Board (PSEB) currently benefit from the 0.25 percent rate, and PAFLA is eager to work closely with PSEB to simplify the registration process so more freelancers can access these incentives. â€œA stable, simple tax regime benefits the entire digital economy, freelancers, software houses, and the broader IT industry alike,â€ he said. Citing the ILOâ€™s recognition of Pakistan as one of the worldâ€™s largest providers of digital labour, Chairman Amin added that this reflects the collective strength of Pakistanâ€™s tech and digital ecosystem. According to the State Bank of Pakistan, freelancing export receipts surged to USD 959 million during July-April FY2025-26, up 49 percent from the same period last year. Dr. Imran Batada, President and CEO of PAFLA, said the government should also refrain from imposing additional taxes on content creators producing knowledge-based content, including skills training, news and analysis, educational content, and infotainment. He cautioned that complex tax classification mechanisms could push digital workers toward informal channels, reducing documented remittances and weakening Pakistanâ€™s foreign exchange position, an outcome that would affect the entire industry. He also urged the government to invest in improving payment infrastructure, including a globally integrated national payment gateway, a step that would benefit all digital service providers across Pakistan. â€œPakistanâ€™s freelancers have contributed nearly USD 1 billion in foreign exchange this fiscal year. These are young Pakistanis from every corner of the country, competing globally and bringing dollars home. Together with the broader IT industry, they represent Pakistanâ€™s greatest economic opportunity,â€ Dr. Batada concluded. Copyright Business Recorder, 2026

Date: 2026-06-02

Details: Published June 2, 2026 Updated about 3 hours ago By Recorder Report KARACHI: Mian Zahid Hussain, President Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance, Chairman National Business Group Pakistan and Chairman Policy Advisory Board of FPCCI, has expressed deep concern over the emerging news regarding the upcoming federal budget for the fiscal year 2026-27. He urged the government that after achieving economic stability, the national economy must now be steered toward a sustainable, growth-oriented path rather than running it on the traditional mechanism of merely increasing taxes and revenue. He noted that under strict IMF conditions, proposing a federal revenue target of 17.1 trillion rupees (17.145 trillion) for FY 2026-27, a one percent increase in the sales tax rate, and a heavy increase of up to 20 percent in the FBR tax targets reflects that preparations are being made to place the entire burden of the budget onto existing taxpayers and industries once again. Mian Zahid Hussain warned that if the direction of economic policies is not shifted toward productivity, exports, and industrial growth, business activities in the country will become completely paralyzed. Comparing economic data, he pointed out that although inflation has decreased and come down to single digits, the continuous stagnation of GDP growth targets remains alarming. The governmentâ€™s decision to set the GDP growth target between 3.5 to 4.2 percent for the next fiscal year clearly indicates that Pakistan will not be able to achieve a five and a half or six percent growth rate next year either. Economic growth targets can never become a reality until relief is provided on import duties on raw materials, high energy prices, and heavy bank markup rates. He stated that the expected increase in the petroleum levy under IMF pressure will lead to a rise in inflation and an unbearable increase in the cost of doing business. He emphasized that Pakistan is currently in dire need of a growth-oriented policy instead of a revenue-driven economy because the indiscriminate increase in tax rates and new taxes is halting the industrial wheel, which in the long run is reducing the governmentâ€™s own revenue compared to the actual size of the economy. Mian Zahid Hussain advised the government that instead of restricting the 1.1 trillion rupee Public Sector Development Programme (PSDP) solely to infrastructure, it should link it with incentives for the IT, agriculture, and manufacturing sectors to generate real employment. He added that economic stability is only possible when the tax net is widened to bring untaxed sectors like agriculture and retail into the fold, and the burden on the manufacturing sector is reduced; otherwise, Pakistani exports will be completely knocked out of the competition compared to other countries in the region. He further stated that in todayâ€™s civilized world, the formula of ending tax evasion and bringing undocumented sectors into the tax net through crackdowns, raids, registration blocking, blacklisting, and harassment under tax laws has completely abandoned. For the improvement of the economy, growth, investment climate, and increase in FDI, it is essential to make tax laws simple, soft, and business-friendly, while the economy must be digitalized end-to-end to increase tax revenue and prevent tax evasion, which could potentially increase the Tax-to-GDP ratio from the current 10 percent to 15 percent. Copyright Business Recorder, 2026

Date: 2026-06-02

Details: Published June 2, 2026 Updated about 3 hours ago By Mushtaq Ghumman ISLAMABAD: The government is set to slash power sector subsidies by around 20 percent to Rs 830 billion in the federal budget for 2026â€“27, compared to an allocation of Rs 1.036 trillion in 2025â€“26 and 7 percent from revised allocation of Rs 893 billion, sources told BUSINESS RECORDER. However, the cumulative allocation under certain heads is expected to remain largely unchanged, with Rs 248 billion projected for FY2026â€“27 against Rs 249.136 billion in FY2025â€“26, reflecting a marginal reduction of 0.5 percent. According to sources, the Tariff Differential Subsidy (TDS) for distribution companies (Discos) and K-Electric (KE) is projected to decline to Rs 374.136 billion in FY2026â€“27 from Rs 411 billion in FY2025â€“26, marking a reduction of about 9 percent. In contrast, TDS for K-Electric alone is expected to increase significantly to Rs 163 billion in FY2026â€“27, compared to Rs 126 billion in FY2025â€“26, showing a rise of over 26 percent. Out of the total projected subsidy of Rs 830 billion, around Rs 419 billion is expected to be allocated for merged districts of Khyber Pakhtunkhwa (erstwhile FATA), TDS for Azad Jammu and Kashmir, and the Pakistan Energy Revolving Account (PERA) established to facilitate payments to Chinese independent power producers (IPPs) under the China-Pakistan Economic Corridor (CPEC). Additionally, funds will be earmarked to settle outstanding receivables of Chinese IPPs, estimated at around Rs 550 billion. The International Monetary Fund (IMF) has reduced the power subsidy ceiling from 0.7 percent to 0.6 percent of GDP for FY2026â€“27, citing a decline in the flow of circular debt due to improvements in operational efficiency and sector performance. According to the IMFâ€™s staff report released on May 15, 2026, following the circular debt stock reduction operation in FY2025â€“26, the FY2026â€“27 budget will limit power subsidies to a maximum of Rs 830 billion, equivalent to 0.6 percent of GDP. The subsidy will cover: (i) tariff differential for Discos and KE; (ii) current and arrears payments for FATA; (iii) agricultural tube-wells; and (iv) circular debt stock payments to offset anticipated flows. The IMF is also pushing for a shift from untargeted cross-subsidies to direct, targeted cash transfers for low-income consumers through the Benazir Income Support Programme (BISP). On May 31, 2026, Minister for Power Sardar Awais Ahmad Khan Leghari stated at a press conference that the government has reduced power subsidies by Rs 475 billionâ€”from Rs 1.287 trillion in FY2024â€“25 to Rs 830 billion projected for FY2026â€“27. Under its agreement with the IMF, the government is required to cap circular debt at Rs 1.614 trillion by June 2026, with zero growth in its flow. Currently, circular debt stands at over Rs 1.7 trillion, implying that substantial allocations will be required in the upcoming budget to meet these commitments. An official said the government has already removed a financial burden of Rs 250 billion from industrial consumers. However, industries are now pressing for the elimination of the remaining cross-subsidy of around Rs 100 billion, which would need to be absorbed by other consumer segments. Copyright Business Recorder, 2026

Date: 2026-06-02

Details: Pakistan Top stories June 2, 2026Mrs. Anjum Shahnawaz PM directs ministries to adopt modern technologies, boost industrial output and expand exports under wide-ranging economic reform agenda Prime Minister Muhammad Shehbaz Sharif has instructed all federal ministries to engage industry experts and technology specialists to support the integration of modern technologies into key sectors of the economy, as part of broader efforts to boost investment and accelerate industrial growth. Chairing a high-level review meeting on policy reforms and economic development, the prime minister said sector-specific reforms, industrial expansion and foreign direct investment remain central pillars of Pakistanâ€™s long-term economic strategy. He stressed that sustainable development requires consistent, forward-looking policies focused on public welfare and national prosperity. â€œLong-term economic policies should remain focused on public welfare and national prosperity,â€ the prime minister said. Focus on production and exports The prime minister underscored the need to increase domestic production and strengthen exports, describing both as essential drivers of economic stability and growth. He said enhanced industrial output should contribute not only to domestic supply but also improve Pakistanâ€™s competitiveness in international markets. Relevant ministries were directed to prepare reform proposals aimed at improving industrial, commercial and economic performance while raising living standards. Renewable energy and electric vehicles The meeting reviewed Pakistanâ€™s future energy needs and strategies to promote renewable and alternative energy sources. The prime minister said the government is developing a comprehensive framework to address energy demand through sustainable and clean technologies. He also highlighted the need for a robust electric vehicle policy to reduce fuel import dependency, promote energy efficiency and provide affordable transport solutions. Technology-driven governance reforms Prime Minister Shehbaz Sharif instructed ministries to ensure meaningful consultation with industry experts, researchers and technology professionals to support digital transformation across sectors. He said technological innovation would play a key role in improving productivity, competitiveness and overall economic efficiency. The prime minister further emphasized coordination between ministries to ensure effective implementation of reforms and measurable economic outcomes. Transparency and accountability Reaffirming the governmentâ€™s governance agenda, the prime minister said transparency, accountability and performance remain top priorities. He directed all stakeholders to ensure that reform initiatives are implemented effectively and deliver tangible economic benefits. During the meeting, ministries presented ongoing policy proposals and briefed participants on initiatives aimed at improving the investment climate and supporting economic growth. The meeting was attended by senior cabinet members including Deputy Prime Minister and Foreign Minister Ishaq Dar, Finance Minister Muhammad Aurangzeb, Economic Affairs Minister Ahsan Iqbal, and other federal ministers and senior officials.

Date: 2026-06-01

Details: Published June 1, 2026 Updated about an hour ago By BR Research The governmentâ€™s reported move to consider reducing or abolishing FED on fruit juices in the upcoming budget is a welcome rethink. Budget makers are reportedly reviewing a proposal for zero or reduced FED on juices with no added sucrose or white sugar, along with separate tax treatment for fruit beverages and carbonated drinks. This space has been vocal about the risks of overtaxing the formal juice industry. Earlier, it argued that FED was delaying pulp localization, weakening the farm-to-factory value chain, pushing demand toward informal products, and shrinking the domestic scale needed for exports. The issue is not protection for one industry. It is about correcting a tax measure that has begun to hurt an emerging agriculture value chain. Pakistan needs to reduce fruit wastage and convert raw produce into higher-value products. The formal packaged juice industry can help by creating demand for fruit pulp, supporting local processing, and linking farmers, pulp producers, brands, and export markets. High FED has disrupted that progress. The Policy Research Institute of Market Economy, or PRIME, has called the current FED structure a self-defeating policy. Its point is simple: the government raised tax rates to collect more revenue, but the higher burden narrowed the formal taxable base. After 20 percent FED was imposed on packaged juices in Budget 2023-24, on top of 18 percent sales tax, sector sales reportedly fell by around 45 percent to Rs42 billion against expectations of over Rs72 billion. Volumes dropped to levels last seen in 2017, wiping out years of expansion in one stroke. The Fruit Juice Councilâ€™s numbers tell the same story. It says the 20 percent FED, along with 18 percent GST, has taken the cumulative tax burden on packaged juices to nearly 42 percent. Since FED was imposed, industry volumes have declined by over 45 percent, while the market has shrunk from nearly Rs60 billion in 2021-22 to around Rs40 billion in 2025. Consumption, according to the council, has fallen back to 2017 levels. This shows that the problem is not merely lower sales. The tax has made formal packaged juices less affordable and pushed consumers toward cheaper, undocumented alternatives. This is the Laffer Curve in practice. Beyond a point, higher tax rates do not raise revenue. They reduce sales, shrink the formal market, and weaken future collection. The state may have increased the rate, but it damaged the base on which that tax was supposed to be collected. Pakistanâ€™s own experience with juice taxation makes the point clearer. When 5 percent FED was imposed on fruit drinks in FY19, formal juice sales fell from Rs53 billion to Rs41 billion in FY20. When it was removed, the market recovered to Rs59 billion by FY22, while GST collection also improved and almost covered the loss from FED. PRIME also notes that the removal of FED helped revive sales, create jobs, and reduce value-chain losses. There is another concern too: food safety and compliance. The Fruit Juice Council argues that the contraction of the documented industry has increased the market share of undocumented players, many of whom operate outside regulatory and food safety standards. That makes this more than an industry concern. A tax policy that makes regulated products less affordable can end up weakening consumer protection, compliance, and long-term revenue generation. The agriculture spillover is just as important. Pakistan loses over 30 percent of many agriculture products after harvest. A stronger pulp market can absorb part of that fruit and improve the farm-to-market supply chain. But the pulp market needs steady domestic demand, and that demand comes from the juice industry. PRIME notes that packaged juice companies sourced only 20,223 tons of mangoes in FY24, down from 31,000 tons in FY18. That decline affects not just manufacturers, but farmers, pulp processors, and the wider rural economy. This is also why juices and carbonated drinks should not be put in the same tax basket. Fruit drinks, nectars, and pure juices have mandatory fruit-content requirements, with pure juices containing up to 100 percent fruit content. These products are linked to local fruit procurement, pulp processing, and rural supply chains. Carbonated drinks, by contrast, are largely flavoured beverages with limited connection to agriculture. Treating the two categories alike ignores both their nutritional difference and their very different economic linkages. High taxation also hurts investment. When domestic sales shrink, companies delay spending on processing capacity, product development, technology upgrades, and export readiness. This matters because fruit juices have export potential but need scale at home first. Without a healthy domestic base, firms cannot invest in better shelf life, R&D and international market standards. This is why reducing or abolishing FED should be seen as a strategic correction. It can revive formal sales, support pulp production, reduce fruit wastage, protect investment, and help the industry move toward exports. It can also support more sustainable revenue by expanding the formal base instead of overtaxing a shrinking one. A practical compromise would be to reduce FED on existing juice variants and exempt the proposed no-added-sucrose or white-sugar category from FED altogether. The Fruit Juice Council has proposed reducing FED on existing variants from 20 percent to 10 percent, while granting complete FED exemption to the new no-added-sucrose or white-sugar category. This would address the governmentâ€™s health concern without destroying the formal juice market. It would also encourage reformulation, product innovation, and healthier choices within the documented sector. The budget should not treat this as a favour to one industry. The better approach is to remove the extra FED layer, or at least bring it down sharply, while keeping the sector under the normal GST regime. That way, the government still collects tax, but without pushing the formal market further into decline.

Date: 2026-06-01

Details: Published June 1, 2026 Updated about 3 hours ago By Recorder Report ISLAMABAD: Economic Policy and Business Development (EPBD) think tank has drafted Pakistanâ€™s first comprehensive shadow federal budget, calling for sweeping tax cuts, deep structural reforms and a growth-led fiscal framework for 2026-27. Arguing that Pakistanâ€™s repeated reliance on high taxation, excessive borrowing and short-term fire fighting has pushed the economy into a cycle of stagnation, former federal minister and chairman of the EPBD think tank, Gohar Ejaz, has unveiled shadow federal budget. In a policy paper titled â€œA Budget for Growth, Not Just Survival,â€ Ejaz criticised the existing budget-making process as closed, centralised and disconnected from the business community, arguing that those responsible for generating exports, creating jobs and paying taxes are routinely excluded from decisions that directly shape economic activity. He maintained that the countryâ€™s economic challenges are no longer primarily financial but structural and political, requiring fundamental reforms rather than incremental adjustments. The document comes at a time when Pakistan is preparing its next federal budget under continued fiscal pressure and amid ongoing reform commitments with international lenders. Against this backdrop, EPBD has positioned its shadow budget as an alternative aimed at shifting the focus from economic survival toward sustained growth. According to the paper, the proposals are based on five years of official data, benchmarked against international financial institutionsâ€™ figures and shaped through consultations with chambers of com- merce and industry stakeholders. Highlighting the scale of fiscal stress, the paper notes that Pakistanâ€™s public debt has expanded dramatically â€” rising from around Rs19 trillion a decade ago to nearly Rs80 trillion â€” while debt servicing alone now consumes close to 60 percent of government revenues. It argues that once debt repayments, defence spending and government salaries are accounted for, limited resources remain for essential investments in infrastructure, health and education. The shadow budget also points to weak growth performance, noting that Pakistan has averaged less than two percent annual economic growth over the last three years, which it describes as inadequate for a country with a rapidly expanding population and labour force. According to the paper, low growth has contributed to declining investment, industrial contraction and rising outward migration of skilled workers. At the centre of EPBDâ€™s recommendations is a broad-based tax reform package designed to lower the burden on documented sectors while expanding the tax net. The think tank proposes reducing the top personal income tax rate from 35 percent to 20 percent, cutting the corporate tax rate from 29 percent to 25 percent and gradually lowering the General Sales Tax (GST) from 18 percent to 15 percent over three years. It also advocates abolishing the â€œnon-filerâ€ category, arguing that it has failed to improve documentation and instead created distortions within the economy. The paper argues that despite substantial increases in tax collection over recent years, the countryâ€™s tax-to-GDP ratio remains stuck around 10 percent because policymakers continue relying on the same pool of salaried individuals and formal businesses. It warns that excessive taxation of compliant sectors has accelerated capital flight and brain drain, particularly among young professionals seeking opportunities abroad. To compensate for revenue losses from lower tax rates, EPBD has proposed a series of measures aimed at broadening the base and improving compliance. These include enhanced enforcement, wider use of e-invoicing, improved documentation of economic activity, rational taxation of tobacco and luxury goods and elimination of exemptions granted through statutory regulatory orders (SROs). On this basis, the think tank projects that the government could still achieve revenues of Rs14.5 trillion without increasing pressure on existing taxpayers. On the expenditure side, the proposals are equally ambitious. The shadow budget outlines a pathway to eliminating the federal fiscal deficit within three years by reducing current and development expenditures by Rs3-4 trillion, retiring costly debt, freezing the creation of new government entities and transferring devolved responsibilities to provincial governments. The document also pushes for stronger fiscal governance through full implementation of the Treasury Single Account framework, arguing that idle public funds parked in commercial banks increase borrowing costs for taxpayers. In addition, it calls for renegotiation of a new National Finance Commission (NFC) Award and reactivation of constitutional institutions such as the National Economic Council (NEC) and Council of Common Interests (CCI), which it says are essential for effective fiscal coordination between the federation and provinces. Framing the initiative as a non-partisan exercise, Ejaz stressed that the objective is not political point-scoring but introducing evidence-based alternatives to existing fiscal strategies. The paper concludes that Pakistan already possesses the industrial capacity, entrepreneurial base and demographic potential required for growth, but lacks a budgetary framework that prioritises expansion over crisis management. Copyright Business Recorder, 2026

Date: 2026-06-01

Details: Published June 1, 2026 Updated about 3 hours ago By NNI ISLAMABAD: The Annual Planning Coordination Committee (APCC) is set to hold a crucial meeting on Monday to finalize recommendations for the federal development budget and annual economic plan for the fiscal year 2026-27, with the agenda for the session already prepared, sources said. According to sources, the meeting will consider proposals for the next fiscal yearâ€™s development budget while also reviewing the performance and utilization of the development budget during the current fiscal year. Development allocations for all federal ministries and divisions will come under detailed examination. Officials from the Ministry of Finance, Ministry of Commerce and the State Bank of Pakistan are expected to present their assessments and recommendations during the meeting. The agenda also includes presentations on the annual development plans of the provinces and special areas. Sources said the Ministry of Finance has proposed a ceiling of Rs1,126 billion for the federal Public Sector Development Programme (PSDP) for FY2026-27. In addition to the federal allocation, each province will formulate and implement its own annual development programme. The APCC is also expected to formulate recommendations for the countryâ€™s annual economic plan and set key macroeconomic targets for the upcoming fiscal year. Sources indicated that the economic growth target for FY2026-27 is likely to be fixed at 4 percent or higher. The committee will also discuss and prepare recommendations for growth targets in the agriculture, industrial and services sectors, which are considered the main pillars of the national economy. In addition, the meeting will deliberate on inflation projections for the next fiscal year. According to sources, the average inflation target may be set between 8.2 percent and 8.6 percent. The APCC will finalize its recommendations after reviewing proposals from relevant ministries, departments and provincial governments. The meeting will also assess the federal development budget and annual economic performance during the current fiscal year to help shape policy priorities for the year ahead. Following the meeting, the committeeâ€™s recommendations regarding the development budget and economic framework for FY2026-27 will be forwarded to the National Economic Council for final approval.

Date: 2026-06-01

Details: Published June 1, 2026 Updated about 3 hours ago By Hassan Abbas LAHORE: The President of the Punjab University Academic Staff Association (PUASA), Prof Dr Amjad Abbas Khan Magsi, has urged the federal government and the Punjab government to prioritise the crisis-ridden higher education sector in the upcoming Federal and Provincial Budgets for 2026â€“27, warning that continued neglect of public universities poses a serious threat to the countryâ€™s intellectual and economic future. Speaking to the Daily Business Recorder, Dr Magsi said that Pakistanâ€™s public universities are caught in a deepening financial bind, with government funding effectively frozen since 2018 even as enrolment figures, inflation, and operational costs have continued to rise. â€œInvestment in education is not an expense â€” it is a strategic commitment to the stability and development of the nation,â€ he said, endorsing the demands formally presented by the Federation of All Pakistan Universities Academic Staff Associations (FAPUASA) to both tiers of government. Dr Magsi pointed out that Pakistanâ€™s approximately 160 public sector universities currently serve more than 1.62 million students, accounting for over 80 percent of the countryâ€™s total university enrolment. Yet, in the Federal Budget 2025â€“26, against a total outlay of Rs 17.573 trillion, the recurring grant for higher education stood at a mere Rs 66 billion â€” a figure that has seen no meaningful increase in nearly eight years despite the sectorâ€™s sustained growth and the relentless pressure of inflation. He expressed serious concern that Pakistanâ€™s total public expenditure on education, at between 1.5 and 1.9 percent of GDP according to UNESCOâ€™s 2024 figures, remains among the lowest in South Asia and far below the global average of 4.48 percent. The share allocated specifically to higher education, he noted, falls below one percent of GDP. The consequences of this chronic underfunding, he argued, are visible in the deteriorating quality of teaching, research, academic infrastructure, and institutional capacity across public universities. By comparison, Bangladesh allocates around two percent of its GDP to education, Iran approximately 2.8 percent, Malaysia 3.5 percent, and India more than four percent, while China, South Korea, and the United States each invest close to six percent. Dr Magsi called on the government to commit to progressively raising education spending to at least four percent of GDP in the short term, as recommended by UNESCO. On the question of faculty compensation, Dr Magsi demanded the immediate restoration of the income tax rebate for university teachers and researchers, describing its removal as a blow to both the livelihoods of academics and the stateâ€™s own commitment to fostering research and scholarship. The rebate, he recalled, had been incrementally cut from 75 percent to 25 percent before being abolished altogether, sharply reducing the take-home salaries of faculty members who already earn less and receive fewer allowances than many other professional groups in the public sector. He called on the Federal Government to restore the rebate without further delay, stressing that it represented a policy signal, not merely a financial benefit. Copyright Business Recorder, 2026

Date: 2026-06-01

Details: Published June 1, 2026 Updated 43 minutes ago By BR Research Earlier, expectations were building around some relief in the budget and a possible transition from stabilization to growth. Formal businesses and employees kept highlighting the unfairly high taxation on them â€” and rightly so â€” while real estate players had high hopes for sectoral relief. There were also promises made to exporters and others. For the past few months, the government kept showing them all carrots. However, the way things are culminating, there may not be much in the offing. The budget numbers â€” the bottom lines â€” are already being decided with the IMF, and the debate is now about how to achieve them. The IMF is showing no leniency despite rising global oil prices, and to meet the numbers, the government may have to forgo most of its promises to the business community and salaried individuals. That is the story. Overall economic growth is likely to slow down. Next yearâ€™s GDP growth may be lower than this yearâ€™s provisional number of 3.7 percent. Large-scale manufacturing is going to take a hit, which will have a negative impact on taxation. Interest rates are also rising again, which will push up debt servicing costs. The reliance on taxation through the petroleum levy is likely to increase at a time when oil prices are rising. The federal governmentâ€™s yield from the petroleum levy is 2.5 times higher than what it gets from taxes collected by the FBR. For instance, for every Rs100 collected by the FBR, the federal government gets only around Rs40, while in the case of the petroleum levy, the full Rs100 is retained by it. Thus, petroleum prices are likely to remain high, keeping inflation elevated amid low growth. The salaried class may get some small actual relief â€” and much more relief in government advertisements. There may be some reduction in tax liability for low- to middle-income groups, while higher salary brackets may get some relief through a reduction in the tax surcharge. Similarly, the corporate sector may get some token reduction in super tax, but it may not get what it wants in terms of easing intercorporate dividend taxation, relaxation in minimum taxes, and other demands. Formal businesses and export-oriented firms are therefore likely to continue facing a disadvantage. Traders will remain the blue-eyed boys, while real estate players may get some relief â€” as they already have in the form of changes to Section 7E. The government is now returning to the old formula of trying to generate growth through a real estate pump. The eventual dump could come in the form of another balance of payments crisis. But it appears the government is losing patience. A big hit may be coming for domestic power consumers using 200 units or less. The government is likely to end cross-subsidies for them, and they may face a sharp increase in bills amid rising fuel cost adjustments. The benefit may not be passed on to those who are currently subsidizing them; instead, it may be used to lower power sector subsidies. This could bring a new round of inflation and more clamor. But more of the same is likely to continue.

Date: 2026-06-01

Details: Published June 1, 2026 Updated about an hour ago By Anjum Ibrahim The International Monetary Fund (IMF) reportedly approved the Pakistan budget for next fiscal year during a week-long staff visit (13 May to 20 May), and in a press release explicitly acknowledged that the missionâ€™s focus was on â€œrecent developments, reform implementation and the budget strategy for fiscal year 2027â€ â€“ external developments, including those related to the Middle East conflict, accounting for severe global supply shortages of oil, LNG, fertilizer, helium and other key minerals, were bizarrely deemed â€œcontainedâ€ for Pakistan. The budget, expected to be announced this Friday, will, therefore, have few surprises for two reasons: (i) the third review of the Extended Fund Facility (EFF) and the second review of the Resilience and Sustainability Facility (RSF) documents were uploaded on the Fund website on 15 May â€“ two days after the arrival of the mission to review the budget â€“ detailing time-bound conditions and structural benchmarks agreed with the authorities till the next mandatory quarterly review scheduled for 15 September. The envisaged disbursement subject to reaching a staff level agreement is 760 million SDRs under the EFF and 76.9 million SDRs under the RSF; and (ii) budget formulators typically disclaim responsibility for almost 75 to 80 percent of the budgeted allocations on the grounds that they are taken by the elite/influentials and, when the country is on a Fund programme, by the IMF. The annual raise in total budgeted outlay is premised on a very optimistic projection of the Gross Domestic Product (GDP) growth rate. Post-Covid 19, with the exception of 2021-22, the growth rate has been well below projections and, given that the country has been on a rigid upfront IMF programme since 2019, this has implied slashing the Public Sector Development Programme (PSDP) to meet the deficit targets agreed with the Fund. Sadly, this has been the practice during nearly all the Fund programmes, Pakistan is currently on the twenty-fourth programme, yet, over time as was to be expected, the PSDP actual disbursement has been shrinking in terms of the percentage budgeted allocation â€“ the July-April 2026 rate is at a low of 51 percent. The misalignment between the PSDP authorisations (by the Planning Ministry) and the actual disbursement (by the Finance Ministry) may indicate: (i) the Planning Ministry distancing itself from the lower disbursements than budgeted (though it is the Ministryâ€™s responsibility to present more realistic allocations, given the shrinking fiscal space); and/or (ii) it may be an attempt to showcase the failure of the Finance Ministry to fund development and instead to continue to prioritise the outlay for current expenditure. The focus has remained on ensuring that the current expenditure requirements are met. The major component of this is the mark-up on loans budgeted at a little over 50 percent of the total current expenditure in 2025-26 â€“ an outlay which, if not released, would have serious economic consequences. This is lower than what was realised in 2024-25 â€“ at 54.5 percent â€“ though it was budgeted at 56.8 percent of total current expenditure with the difference in total terms being 813 billion rupees. The lower outlay for mark-up this year was not due to lower envisaged borrowing but lower borrowing costs â€“ rescheduling past loans, which lengthened the period but lowered the actual interest payment and the anticipation of lower policy rate by December last year (a rate that had to be raised due to the Middle East conflict â€“ so much for its effects remaining contained). In this context it is relevant to note that the 1.25 trillion rupees borrowed from the 16 commercial banks to retire the circular debt was, after IMF approval, not included in the mark-up and defined as a one-off. In total terms the budgeted mark-up in 2024-25 was higher by 829,666 billion rupees than what was realised at the end of the year due to a lower policy rate over the year as well as rescheduling. The budget documents for next fiscal year 2026-27 would indicate by how much this expenditure item exceeded the budgeted amount. Defence as a percentage of current expenditure was 15.62 percent of total current expenditure 2025-26 while last year it was at 13.3 percent (with the budgeted amount under this head lower by 2.3 percent). The rise may well be due to higher operational costs due to ongoing terror attacks; however, it is relevant to restate that the actual current expenditure as per budget documents for last year declined by 813 billion rupees. Running civilian government rose to 5.9 percent of total current expenditure in the current yearâ€™s budget against 5.4 percent in last yearâ€™s revised estimates due to massive pay rises at the taxpayersâ€™ expense. Pensions rose from 1.014 trillion rupees in the revised estimates of last year to 1.055 trillion rupees this year â€“ money dedicated for public sector pensioners and does not include the 93 percent of those who are engaged in the private sector. While the government has made employee contributions mandatory form last year yet greater clarity is required as to whether this amount is being set up in an escrow account or a pension fund, or whether money being fungible the government is using it for meeting its expenses, which may have some consequences down the line. Benazir Income Support Programme (BISP) received less than 5 percent of current outlay as per the Fundâ€™s insistence though the beneficiaries that have been identified through a scientific method of selection do not constitute the rising number of unemployed as a consequence of the Fundâ€™s severely contractionary monetary and fiscal policies nor take cognizance of the rising poverty levels through the calorific method. Revenue is to be generated from (i) raising indirect taxes (sales tax in particular) with the rationale that GST C-efficiency ratio (actual revenue collection from goods and services to potential) has declined from 27.4 percent to 22.8 percent over the past ten years. The Fund proposes taxing a broad set of basic goods that remain exempt or are concessionally taxed, historical zero-rating in export sectors has narrowed the base, and post-devolution fragmentation of GST on services has added compliance and administrative complexity through four separate provincial regimes; however, these are indirect taxes whose incidence on the poor is greater than on the rich, (ii) constitutional court ruled in favour of super tax; however, there is a concern that capital flight may be further fuelled; and (iii) increasing provincial taxes and most particularly agricultural income tax that must be taxed at the same rate as on the salaried. If implemented this will have political ramifications. An out of the box solution would be for the government to implement reforms in pensions (through employee contributions that would then be channelled into existing pensioners), wage freeze for the next three years, budgeting only critical operational expenses, and realistic targets for the mark-up while focusing on creating honest taxpayers through implementing a tax structure that is fair, equitable and non-anomalous. Copyright Business Recorder, 2026

Date: 2026-05-31

Details: Published May 31, 2026 Updated a day ago EDITORIAL: The International Monetary Fund (IMF) concluded its mission to Pakistan (13 to 20 May) and in a press release noted that the â€œstaff visit focused on recent economic developments, reform implementation and the budget strategy for fiscal year 2027.â€ This led to conclusion by independent domestic economists that an agreement was reached between the government authorities and the Fund staff with respect to the expenditure and revenue allocations in the budget and the projection that the likely budget presentation date in the national assembly will be 5 June subject of course to the availability of critical members of the cabinet. The mission was, therefore, not in-country to initiate a staff level agreement on the fourth review of the ongoing 7 billion-dollar Extended Fund Facility (EFF) and the third review of the Resilience and Sustainability Facility (RSF) or to engage in Article IV consultations, but specifically for approval of the budget and one may well regard this exercise as a â€œpriorâ€ condition. The press release noted that the government remained committed to achieving a primary surplus (excluding grants) of 2 percent of GDP in 2027, a projection made in the recently released third review of the EFF and the second review of the RSF documents, with the current yearâ€™s programme target of 3.4 percent missed by 0.1 percent (3.5 percent). What is perhaps more relevant is the figure cited under underlying primary balance (excluding grants) that did not include one-off transactions was estimated at 1.6 percent in the current year, 1.3 percent programme target with 2 percent as the projection for next fiscal year; hence not included is the 1.25 trillion rupees borrowed by the government to retire the energy sector circular debt with interest payments to be passed onto the consumers as well as the sale of the Pakistan International Airlines that has netted the government 10 billion rupees with the remaining over 125 billion rupees to be in the form of equity into the airlines at a later stage with no deadline. The note also refers to support for measures that will ensure fiscal sustainability and this too is explained in the third review documents as follows: tax revenue mobilization is envisaged by: (i) eliminating sales tax expenditures, through increasing GST C-efficiency ratio that has declined from 27.4 percent to 22.8 percent over the past ten years â€“ defined as a measure of how effectively a country collects its Goods and Services Tax by comparing actual revenue collected against the theoretical revenue that would be generated if the standard GST rate were applied universally to all consumer spending without any exemptions or collection losses - sales tax is an indirect tax whose incidence on the poor is greater than on the rich; (ii) improving compliance through the proactive application of the audit function of the Federal Board of Revenue; and (iii) increasing provincial revenues mainly through the implementation of the agriculture income tax at the same rate as is levied on all other sources of income. And finally, the press release notes: â€œState Bank of Pakistan reiterated its commitment to maintaining an appropriately tight monetary policy stance to anchor inflation expectations and will continue to closely monitor potential second-round effects from energy price increases. Furthermore, exchange rate flexibility should continue to serve as a key shock absorber, and efforts should continue to build a deeper foreign exchange interbank market.â€ The supply disruptions due to the ongoing Middle East conflict need to end before inflation can come down not only in Pakistan but other countries that rely, directly or indirectly, on Gulf countries, as well; however in the case of Pakistan the policy rate, at a high of 11.5 percent which compares extremely unfavourably with other regional competitors today, is expected to rise further with further negative implications on the debt service component of the budget as well as on lower private sector credit â€“ elements that will constrain growth that in turn will increase unemployment that would no doubt raise the risk of staying on the programme. To conclude, one must wait for budget to be presented to parliament to gauge exactly what the authorities agreed to that would have serious consequences for the common manâ€™s kitchen budget though, sadly, indications are that it would be an extremely harsh budget for the common man. Copyright Business Recorder, 2026

Date: 2026-05-31

Details: Budget 2026-27 Taxation May 31, 2026Faisal Shahnawaz Tax body urges amendment to align sales tax law with FBRâ€™s digital registration procedures The Karachi Tax Bar Association (KTBA) has highlighted procedural hurdles in the Federal Board of Revenueâ€™s (FBR) online tax system, saying registered taxpayers face difficulties in declaring business bank accounts because the prescribed sales tax registration form is no longer available on the tax authorityâ€™s digital platform. In its budget proposals for 2026-27, the KTBA pointed to issues related to Section 73 of the Sales Tax Act, 1990, which governs the declaration and use of business bank accounts by registered sales taxpayers. Under the current legal framework, a business bank account is defined as an account used by a registered taxpayer and declared to the Commissioner through Form STR-1. However, the association said Form STR-1 is no longer available through the FBRâ€™s online registration system. According to the KTBA, taxpayers seeking to update their registration details through the eFBR portal are redirected to the IRIS platform, where amendments are processed through Form 181 (Form of Registration), which is prescribed under Section 181 of the Income Tax Ordinance, 2001. The association said the continued reference to Form STR-1 in Section 73 has created a legal and operational inconsistency, as taxpayers are currently using Form 181 to make registration amendments and declare business bank accounts. â€œForm STR-1 does not exist in the online environment, while all changes in taxpayer particulars are being processed through the IRIS portal using Form 181,â€ the KTBA said in its budget recommendations. To resolve the issue, the association has proposed replacing the reference to Form STR-1 in Section 73 of the Sales Tax Act with Form 181. It said the amendment would bring the law in line with the procedures currently being followed on the FBRâ€™s digital platforms and remove uncertainty for registered taxpayers. Tax practitioners believe that eliminating such discrepancies could improve compliance, reduce administrative disputes and make it easier for businesses to meet documentation requirements linked to banking transactions and sales tax claims. The proposal is part of a broader set of tax reform recommendations submitted by the KTBA ahead of the federal budget 2026-27, aimed at simplifying tax procedures and improving the efficiency of Pakistanâ€™s tax administration system.

Date: 2026-05-30

Details: May 30, 2026Faisal Shahnawaz FBR chairman Rashid Mahmood Langrial to assess tax collection performance and enforcement measures during key June visit. Rashid Mahmood Langrial, Chairman of the Federal Board of Revenue (FBR), is scheduled to visit Karachi on June 1, 2026, to review tax collection performance and enforcement efforts during the final month of fiscal year 2025-26. According to sources, the visit will focus on assessing progress toward annual revenue targets and evaluating measures needed to maximize tax collection before the fiscal year concludes on June 30. During meetings with senior tax officials, the FBR chairman is expected to discuss strategies aimed at improving revenue collection and strengthening enforcement against tax defaulters. Sources said the tax authority may intensify recovery efforts, including action against taxpayers with outstanding liabilities through measures such as freezing bank accounts and accelerating audits of large taxpayers to identify and recover unpaid taxes. Langrial is expected to hold detailed discussions with chief commissioners of the Large Taxpayers Office (LTO), Medium Tax Office (MTO), Corporate Tax Office (CTO), and Regional Tax Offices (RTO-I and RTO-II) during meetings at LTO Karachi. In addition to inland revenue matters, the chairman will review customs-related revenue performance during meetings at Custom House Karachi. The customs review will involve senior officials, including the Chief Collector Hyderabad and heads of major collectorates responsible for appraisement, exports and airport operations. The visit comes at a critical stage as the FBR seeks to meet its annual revenue target amid fiscal pressures and rising government expenditure requirements. Langrial is also expected to interact with young officers of the Inland Revenue Service (IRS) and Pakistan Customs, emphasizing professionalism, performance and efficiency within the countryâ€™s tax administration. Karachi, Pakistanâ€™s largest commercial and financial center, contributes a substantial share of national tax revenues, making the cityâ€™s collection performance a key factor in achieving the FBRâ€™s year-end revenue objectives.

Date: 2026-05-30

Details: Published May 30, 2026 Updated about 2 hours ago By Recorder Report LAHORE: The Pak International Business Forum (PIBF) has welcomed the recently signed Memorandums of Understanding (MoUs) between Pakistan and China for cooperation and investment in multiple sectors including industry, energy, infrastructure, technology, agriculture and trade, terming the development a positive step toward strengthening bilateral economic ties. PIBF President Dr Mushtaq Mangat said that the agreements reflect growing international confidence in Pakistanâ€™s economic potential and strategic importance. He stated that Chinese cooperation can significantly contribute to industrial growth, technology transfer, employment generation and export enhancement if the government creates an environment conducive for investors. â€œPakistan and China share a long-standing strategic partnership and these new agreements can become a milestone for economic progress. However, practical steps are required to convert these understandings into real economic activity and sustainable prosperity,â€ he said. Dr Mushtaq Mangat emphasized that Pakistanâ€™s business community is currently facing enormous challenges due to high electricity tariffs, expensive gas, increasing petroleum prices, high interest rates and multiple taxation-related complications. He said industries cannot compete internationally unless the cost of doing business is brought down to regionally competitive levels. PIBF Secretary General Muhammad Ejaz Tanveer said that while foreign investment agreements are encouraging, the government must simultaneously introduce structural economic reforms to restore investor confidence and strengthen domestic industry. â€œReducing the prices of electricity, gas and petroleum products is essential for industrial revival. Without affordable energy and stable economic policies, industries will continue to struggle and foreign investors may hesitate to expand operations in Pakistan,â€ he said. Muhammad Ejaz Tanveer urged the government to seriously consider the seven-point economic revival agenda proposed by PIBF for sustainable economic growth. He said the agenda focuses on practical reforms aimed at reducing the financial burden on industries and promoting investment. He briefly outlined the seven points, including reduction in interest rates to facilitate business activity, revival of Development Finance Institutions (DFIs) for long-term industrial financing, provision of targeted facilities for exporters and SMEs, broadening of the tax net while lowering excessive tax rates, simplification of the taxation system through digital reforms, provision of regionally competitive electricity and gas tariffs for industries, and implementation of governance reforms to improve efficiency in the energy and economic sectors. Dr Mushtaq Mangat added that Pakistan possesses immense economic opportunities and can attract substantial foreign investment provided there is policy continuity, economic stability and ease of doing business. â€œThe business community fully supports every initiative that strengthens Pakistanâ€™s economy and enhances international cooperation. However, agreements alone are not enough; they must be backed by economic reforms that provide relief to industries, investors and the common man,â€ he said. Muhammad Ejaz Tanveer reiterated that PIBF would continue to work closely with policymakers, stakeholders and the business community for industrial revival, export growth and sustainable economic development in Pakistan. Copyright Business Recorder, 2026

Date: 2026-05-29

Details: Budget 2026-27 Taxation May 29, 2026Faisal Shahnawaz Stock exchange proposes lower corporate taxes, restored incentives and removal of withholding taxes to boost listings and market growth. The Pakistan Stock Exchange (PSX) has proposed a series of tax relief measures and investor-friendly reforms in the federal budget 2026-27 (FY27) aimed at strengthening capital markets, encouraging new listings and improving overall investment activity. In its budget recommendations, PSX urged the government to rationalize corporate taxation, restore investor incentives and remove structural anomalies affecting listed companies and corporate groups. One of the key proposals relates to group relief under Section 59B of the Income Tax Ordinance, 2001. The exchange said companies are currently allowed to surrender assessed business losses within a corporate group for only three years, a restriction it argues discourages holding companies from listing subsidiaries. PSX proposed removing any time limitation on the group relief facility to improve corporate structuring flexibility and encourage listings. The exchange also highlighted concerns over double taxation of corporate profits. It noted that companies already face an effective tax burden of around 46%, including corporate tax, super tax, Workers Welfare Fund (WWF) and Workers Profit Participation Fund (WPPF), while dividends are further taxed at 15%. To address this, PSX urged the government to restore the inter-corporate dividend exemption by reinstating Clause 103C of Part I of the Second Schedule, which was withdrawn under the Finance Act 2021. Another recommendation relates to withholding tax on inter-company interest payments within corporate groups. PSX said such taxes create cash flow constraints, increase refund claims and add compliance burdens without generating additional revenue. It proposed reinstating exemptions previously available under Section 59B-linked group relief arrangements, which existed until tax year 2016. The exchange also opposed the taxation of bonus shares introduced through Section 236Z under the Finance Act 2023, under which companies must withhold tax at 10% on bonus share issuance. PSX called for withdrawal of the provision. To boost derivatives trading, the exchange recommended aligning capital gains tax on derivatives and futures traded at PSX with rates applied on commodity futures at the Pakistan Mercantile Exchange, which are taxed at 5%. PSX further proposed restoring tax credits under Section 62 for investments in shares, mutual funds, sukuks and life insurance policies, which were removed in the Federal Budget 2022-23. Regarding real estate investment, the exchange recommended tax exemptions on property transfers to and from REIT schemes and removal of the sunset clause introduced in June 2023 on gains related to REIT structures. PSX also called for a reduction in corporate tax rates for listed companies, arguing that Pakistanâ€™s effective corporate tax burden is significantly higher than the Asian average of 19.74%. It proposed a permanent 5% reduction in corporate tax for listed firms, bringing the rate to 24% for companies maintaining at least 25% free float. According to PSX, these reforms would encourage new listings, improve liquidity, strengthen documentation of the economy and support long-term growth through a more vibrant capital market.

Date: 2026-05-29

Details: Budget 2026-27 Taxation May 29, 2026 Faisal Shahnawaz Chartered accountantsâ€™ body calls for clearer rules and alignment of advance tax mechanism for builders and developers. The Institute of Chartered Accountants of Pakistan (ICAP) has proposed amendments relating to taxation of builders and developers under Section 7F of the Income Tax Ordinance, 2001, in its budget proposals for 2026-27. ICAP said that although Section 7F was introduced through the Finance Act, 2024 to establish a revised taxation framework for builders and developers, the current mechanism has become complex and difficult to administer. According to the institute, the existing structure has created uncertainty regarding the determination of applicable tax liability within the real estate and construction sector. ICAP explained that the Finance Act, 2023 inserted Section 147(5C) to govern advance tax payments based on per square foot or per square yard area. The rates for advance tax calculations were aligned with those prescribed in the Eleventh Schedule of the Ordinance for projects registered under Section 100D. The institute noted that the taxation regime under Section 100D operated as a final tax regime, although the tax was collected quarterly in the form of advance tax. However, ICAP pointed out that the Finance Act, 2024 introduced Section 7F for tax year 2025 onward, shifting the taxation basis for builders and developers from area-based taxation to a fixed percentage of sale value, effectively introducing a deemed income regime linked to sales value. According to ICAP, the continued existence of Section 147(5C) in its present form following the introduction of Section 7F has created ambiguity and interpretational challenges. To address these concerns, the institute recommended prescribing comprehensive rules explaining the method, basis and procedures for calculating taxable income and tax liability under Section 7F. ICAP also proposed amendments to Section 147(5C) to align advance tax computation with the sale-value-based taxation regime introduced under Section 7F. The institute said the proposed changes would ensure consistency between the advance tax mechanism and the revised taxation framework while reducing confusion and possible gaps in tax collection. ICAP emphasized that the amendments are necessary to remove inconsistencies arising from overlapping legal provisions and establish a coherent taxation structure for builders and developers across Pakistan. According to the institute, the proposed reforms would improve clarity, fairness and effective implementation of tax laws while promoting consistent taxation practices in the construction and real estate sector.

Date: 2026-05-29

Details: Budget 2026-27 Taxation May 29, 2026 Faisal Shahnawaz Chartered accountantsâ€™ body seeks mandatory 48-hour notice and transparent audit selection to protect taxpayer rights. The Institute of Chartered Accountants of Pakistan (ICAP) has proposed that tax authorities should be required to issue prior notice before entering taxpayersâ€™ business premises for audit and monitoring purposes. In its budget proposals for 2026-27, ICAP raised concerns regarding Sections 175 and 177 of the Income Tax Ordinance, 2001, which grant extensive powers to officials of the Federal Board of Revenue for inspections and audit selection. According to ICAP, the discretionary and unstructured use of these powers has created concerns among taxpayers over undue harassment, lack of procedural transparency and inconsistent enforcement practices. The institute noted that under Section 175, tax authorities may enter and inspect business premises without a clearly defined requirement for advance notice or documented justification. ICAP said the existing provision creates risks of unannounced visits and possible misuse of authority. Similarly, the institute observed that Section 177 permits audit selection based on the Commissionerâ€™s discretion in addition to computerized selection, leading to perceptions of arbitrary or targeted audits that may undermine voluntary tax compliance. To address these concerns, ICAP proposed two amendments to the law. Under Section 175, the institute recommended inserting a proviso requiring tax authorities to serve at least 48 hours prior notice before entering business premises. However, ICAP proposed an exception where the Commissioner possesses definite and credible information indicating tax fraud or concealment of income. The proposed clause states: â€œProvided that this requirement shall not apply in cases where the Commissioner, based on definite and credible information, has reason to believe that tax fraud or concealment of income is being committed.â€ Regarding Section 177, ICAP recommended that audit selection should be conducted exclusively through a transparent, computer-generated risk-based system prescribed by the FBR. The institute also proposed that the criteria and parameters used for audit selection should be documented and made publicly available to the extent consistent with enforcement requirements. ICAP said the proposed reforms would help balance effective tax enforcement with the protection of taxpayer rights. According to the institute, mandatory notice requirements would shield legitimate businesses from unnecessary disruption while preserving the authoritiesâ€™ ability to act in genuine fraud cases. It added that risk-based audit selection would reduce discretionary practices, improve transparency and fairness, align Pakistanâ€™s tax system with international standards and encourage voluntary compliance. ICAP also referred to observations made by the Supreme Court of Pakistan, stating that the apex court has consistently emphasized that statutory powers must be exercised reasonably, proportionately and in accordance with due process.

Date: 2026-05-25

Details: Published May 25, 2026 Updated about 2 hours ago By Mushtaq Ghumman ISLAMABAD: Ministry of Commerce (MoC) and Ministry of Industries and Production (MoI&P) have reportedly locked horns over the new proposed tariff for industry as massive reduction is under consideration on tariff on imported vehicles and alcohol, sources in Commerce Ministry told BUSINESS RECORDER. In this regard, Tariff Policy Board (TPB), headed by the Commerce Minister, is about to finalise its recommendations for the federal budget 2026-27 in accordance with tariff rationalisation plan under National Tariff Policy (NTP) 2025-30 already cleared by the International Monetary Fund (IMF). Commerce Ministry gave a detailed briefing to the TPB on Option- II for achieving the targets of NTP for FY 2026-27. It explained that as per NTP, maximum CD slab for 2nd year will be 50percent. Therefore, all CD rates above 50 percent are required to be adjusted between 20 percent to 50percent. Currently, only auto and alcohol are above 50percent CD slab. Similarly, maximum ACD in 2nd year will be 4percent in line with NTP. To achieve this target, he proposed that ACD rates might be reduced from 6percent to 4 percent, from 4 percent to 2percent, and from 2 percent to 0 percent. However, in case of Tariff Lines where the CD rates are specific instead of Ad Valorem (14 TLs), a minimum ACD rate of 2percent might be retained instead of reducing it to 0percent due to revenue implications of approx. PKR 26-27 billion. In line with NTP, RDS are required to be eliminated by 2030 and maximum RD in second year of the implementation will be 20percent. Therefore, existing RDS of 1percent, 2 percent, and 2.5 percent might be eliminated while RDs above 20percent might be reduced to a maximum cap of 20percent. He further proposed that 20 percent or below 20 percent RDS might be reduced by 20 percent from current rates. Based on above calculation, proposed tariffs on auto sector (both CKD and CBU) with the highest CD slab of 100 percent (31 tariff lines including vehicles above 1800 cc) might be reduced from 106-156 percent to 54-74 percent (including reductions in ACD and RD). Similarly, the 90 percent CD slab (17 TLs) might be reduced to 50 percent, while the 75percent slab (14 TLs) is proposed to be lowered to 45 percent bringing the duty on CKD and CBU to 49-57 percent. Likewise, CD slabs such as 60 percent (25 TLS), 55 percent (16 TLs) and 50percent (47 TLs) are proposed to be reduced to 40percent, 35percent and 30percent. He also apprised that because of tariff rationalization, the weighted average tariff will be reduced from 8.64 percent in FY 2025-26 to 7.42 percent in FY 2026-26. Similarly, the simple average tariff against the Year-II targets of 13 percent, will be reduced from 16.56 percent in FY 2025-26 to 13.71 percent in FY 2026-27. SAPM on Industries and Production, Haroon Akhtar Khan stated that in previous meeting of the TPB, it was agreed that flexibility would be available to TPB in adjusting RD and ACD rates without deviating from the spirit of NTP. In this context, he noted that if any sector/ individual industry submits a representation for tariff rationalization, ACD/RDS might be retained within the available slabs instead of across-the-board reduction. On the auto sector, he directed the EDB team to coordinate with the Commerce team so that tariff structure of auto sector could be finalized at the earliest. The SAPM also suggested that tariff structure of Auto Policy might be shared with the Steering Committee. Secretary, Ministry of Commerce stated that tariff structure first needs to be discussed in the TPB being the relevant forum. In case of difference of opinion, matter might be referred to Steering Committee by TPB or submitted to the Prime Minister/Cabinet for decision. He further stated that, given the paucity of time, the Ministry of Industries and Production needs to finalize the Auto Policy at the earliest so that the same may be presented before TPB to timely complete the budget exercise. A private member of the TPB, while commenting on the tariff rationalization path presented by the Ministry of Commerce, stated that deviation from the targets of NTP for a given year, while adhering with the spirit of the NTP, should be substantiated with strong reasoning. Secretary, MoC, supported this view and stated that consistency should be the key in implementing the NTP. An alternate proposal was presented for implementing the Year-II targets of the NTP. The Private Member of TPB supported the reduction path of CD and ACD as proposed by the Commerce Division; however, with respect to RD, it was proposed a simplified structure whereby existing RD rates ranging from 1percent to 8percent, affecting 561 tariff lines, might be reduced to 0 percent. Simultaneously, it was proposed that existing 10 percent RD might be reduced to 5percent and RDs between 12 percent to 20percent might be reduced to 10 percent. She further proposed that rates between 24 percent to 30 percent be reduced to 15 percent; and all RDS in the range of 32 percent to 50 percent be reduced to 20percent. SAPM on Industries and Production rejected the proposal presented by Private Member of TPB, as the proposed deeper reductions in RDS would adversely affect domestic industries. He noted that NTP envisages a gradual reduction in RDs over a period of four to five years; however, the proposed scheme would expose the domestic industry to foreign goods without providing them any time for adjustment. He reiterated that flexibility should be available to the TPB in adjusting RDs keeping in view the impact of reduction of RDS on domestic industry. Secretary, Ministry of Commerce, concurred with the observations and stated that mere simplification of RDs slabs without giving due consideration to the domestic industry might not be beneficial for industry. He stressed the need for consistency while undertaking reductions under NTP. In response, the Private Member of TPB stated that primarily RDs were levied by FBR for restricting imports. Joint Secretary (Tariff Policy) shared HS code-wise details of all tariff lines where reductions in CD, ACD, and RD rates are proposed. Secretary, Ministry of Commerce, while highlighting the proposed reduction in CD from 90percent to 50percent on 17 tariff lines, covering alcohol and liquor items, observed that such reductions may be negatively highlighted in the media despite the fact revenue impact is insignificant He proposed that tariff reduction on alcohol may be presented in the next meeting of the Steering Committee. Member (Customs Policy), FBR stated that, for the upcoming meeting of Steering Committee, the Ministry of Industries and Production may be requested to highlight deviations in their policies from the NTP. Regarding individual proposals, he noted that the Board should first finalize the overall direction of tariff reductions in year-II, after which individual cases may be examined. The Minister for Commerce proposed that a list of industries likely to be affected by the tariff reductions be prepared, and that a set of basic guiding principles be developed to address their grievances. He further suggested that, for press briefings, a separate list may be compiled highlighting key products or sectors that will benefit from the reduction in tariffs. After detailed deliberations, the following decisions were taken ;(i) all members of the TPB, in principle, agreed on the reduction path proposed by the Ministry of Commerce for meeting the target of NTP for FY 2026-27; (ii) deviations from the NTP 2025-30, in the policies of the MoIP, will be presented to the Steering Committee for decision/guidance ;(iii) the proposed reduction in CD rate from 90 percent to 50 percent for alcohol and liquor items covered under 17 tariff lines will be placed before the Steering Committee and; (iv) list of industries likely to be impacted by tariff rationalization exercise for FY 2026-27 will be prepared by NTC. Copyright Business Recorder, 2026

Date: 2026-05-25

Details: Published May 25, 2026 Updated 36 minutes ago By Muhammad Raza Coming budget and the new policy architecture This yearâ€™s budget will also be watched for another reason. It is expected to be the first budget after the tax policy function has been shifted away from the FBRâ€™s operational structure and placed under the Tax Policy Office in the Ministry of Finance. This separation is important in principle. Tax policy and tax administration are not the same thing. Policy should ask what the tax system should look like, how the burden should be distributed, what distortions should be removed, how compliance can be simplified, and how revenue can be made sustainable. Administration, on the other hand, must implement the law, collect revenue, enforce compliance and manage taxpayers. When both functions are too closely merged, policy can become overly influenced by immediate collection pressures. A law may be designed not because it is the best long-term policy choice, but because it is the easiest short-term collection device. This is how withholding taxes multiply, transaction taxes expand, advance collections and coercive measures become routine and visible taxpayers remain the preferred source of revenue. The creation of a separate Tax Policy Office therefore raises expectations. It creates the hope that tax measures will increasingly be guided by evidence, economic behaviour, household capacity, sectoral realities, documentation incentives and long-term reform goals rather than only by the arithmetic of the next revenue target. But expectations must also be realistic. No tax policy office, however well designed, can reform Pakistanâ€™s tax system in one budget cycle. The coming budget will still be framed under fiscal pressure. There are already reports of significant revenue expectations for FY 2026â€“27 and additional tax measures being discussed. This means the real test of the coming budget may not be whether it solves everything. It cannot. The more realistic test is whether it shows a clearer direction. Does it begin reducing the excessive burden on those already visible? Does it indicate a move away from indiscriminate withholding and transaction-based taxation? Does it use data from the Economic Census, HIES and other administrative sources to classify economic activity more intelligently? Does it recognise the difference between subsistence activity, small enterprise, medium business, high-income informal activity and genuine commercial capacity? Does it begin to address agricultural income tax through provincial coordination and data-based segmentation rather than slogans? Does it simplify compliance? Does it reduce litigation triggers? Does it show that technology will be used for risk-based reform rather than automated harassment? Perhaps all of this cannot happen in one year. But even a few signals would matter. A budget is not only a revenue statement. It is also a statement of policy direction. If the coming budget shows that the state wants to collect better, not merely collect more, it would be a meaningful beginning. The country does not need a budget that promises overnight transformation. It needs a budget that reveals a credible path. What real reform should mean Pakistanâ€™s tax debate must therefore move beyond rates, slabs and annual targets. The real reform question is not simply: what new tax should be imposed? The real question is: how can the system become broader, simpler, fairer and more credible? If the Tax Policy Office is able to bring even some of this thinking into the budget process, that itself would be an important start. The task is too large for one fiscal year. But the direction can be set in one fiscal year by including some of the following steps:- 1. Base broadening without repeatedly punishing those already compliant. Formalisation should not feel like walking into a trap. It should offer access to finance, legal protection, commercial credibility, simpler compliance and a predictable path to growth. 2. Reducing excessive dependence on withholding taxes and transaction-based collection. Withholding may be useful, but it should not become the main architecture of the income tax system particularly by treating the same as minimum tax. 3. To simplify compliance. Ordinary taxpayers and small businesses should not need a full advisory ecosystem merely to understand their basic obligations. 4. Protecting documented businesses from unfair competition. If the formal supplier becomes more expensive only because he follows the law, while the informal supplier gains a price advantage by avoiding tax, the market will continue to reward informality. 5. To improve federal-provincial coordination. After the 18th Amendment, provincial fiscal autonomy has constitutional value, especially in relation to sales tax on services and agricultural income tax. But businesses should not suffer avoidable duplication through different portals, procedures, definitions, interpretations and overlapping demands. 6. Reducing litigation and uncertainty. Disputed demands are not the same as real revenue. Businesses can plan around a rate; they cannot easily plan around arbitrary interpretation, delayed refunds and years of appellate uncertainty with continued risk of coercive recoveries. 7. To use technology with safeguards. The Economic Census, HIES, Agriculture Census, business registers, geo-tagging, digital invoicing and AI-based tools can help identify genuine economic capacity. But these tools must be used for segmentation, not indiscriminate pressure. 8. To recalibrate the treatment of wealth and assets. Pakistan should not rely on constitutionally fragile or administratively blunt asset-based levies. But neither should it allow high economic capacity to escape meaningful taxation. The path lies in better income reporting, credible capital gains taxation, unexplained wealth rules, beneficial ownership transparency, information exchange, documented transfers and provincial coordination where the Constitution requires it. Transparency as part of tax reform Finally, the state must communicate better. If citizens are asked to pay more, they should also be shown how their contribution supports schools, hospitals, infrastructure, social protection, security and essential services. Transparency must also extend to the cost of government itself. Citizens are more likely to accept difficult taxation when they believe the burden is shared and public money is used responsibly. This is especially important when the state asks citizens to enter the formal economy. Many small operators fear that documentation only means tax exposure. The state must show that documentation can also bring benefits: access to finance, legal protection, easier payments, commercial credibility, targeted support and a clearer path to growth. A properly maintained business register can help identify clusters of small businesses needing credit, infrastructure, training, digital payment support or simplified registration. Similarly, agricultural data can help identify where rural households need support and where genuine commercial agricultural capacity should contribute more fairly. In the end, trust does not grow only from collection. It grows from explanation, disclosure and visible fairness. Collecting more, or collecting better? Pakistan needs revenue. That is undeniable. But revenue collected without legitimacy has limits. A tax system may meet short-term targets by raising rates, expanding withholding taxes or increasing enforcement pressure. But if these measures weaken trust, discourage documentation and reward informality, the long-term result may be counterproductive. The real test of tax policy is not only how much it collects this year. The real test is whether it builds a system that citizens consider fair, predictable and worth complying with. This brings us back to the fourth conversation. The low-wage worker does not appear in tax debates in the same way as the salaried individual, the documented business or the informal operator. Yet in many ways, he has the most at stake. His aspiration to educate his children and improve their future depends on whether taxation translates into meaningful public services. After the 18th Amendment, much of this responsibility rests with provincial governments. If education and health outcomes do not improve, then the redistributive promise of taxation remains incomplete not in theory, but in everyday life. If the system collects revenue but does not reduce these gaps, then the burden of aspiration shifts entirely onto the individual. Pakistanâ€™s tax challenge, therefore, is not simply about collecting more. It is about collecting better. Because in the end, taxation is not sustained by enforcement alone. It is sustained by the belief that the burden is shared fairly, the rules are applied consistently, and the state treats the compliant citizen not as an easy target, but as a partner in building the countryâ€™s fiscal future. (THIS WAS THE LAST PART OF A THREE-PART SERIES OF ARTICLES CARRIED BY THE NEWSPAPER ON SATURDAY, SUNDAY, AND TODAY) Copyright Business Recorder, 2026

Date: 2026-05-25

Details: Published May 25, 2026 Updated about 2 hours ago By Asad Rizvi The foremost challenge confronting our economic leaders as they develop a budget for a nation heavily burdened by debt and reliant on foreign loans for many decades is how to effectively formulate the budget. Emerging economies like ours continually face this daunting task, with establishing a balanced budget that ensures future financial stability being the central issue. These countries experience persistent refinancing problems, worsened by sluggish economic performance characterised by lacklustre export growth, rising import costs, and alarmingly low tax revenues, all creating complications for financing deficits. As a result, they are forced to take on new loans to service maturing debts and interest payments while frequently rolling over existing obligations. A significant obstacle is securing the necessary financing and managing the costs associated with it, which are intensified by rising global inflation and high interest rates. Poor credit ratings make borrowings more expensive and increasing the risk of currency depreciation, which, in turn, increases the burden on the domestic currency during times of uncontrollable inflation that lead to sharp increases in policy rates. This situation often drives excessive money printing and a considerable amount directed toward government expenditures to bridge deficits. To effectively tackle these problems, it is crucial to pinpoint and correct the root causes. Pakistanâ€™s tax-to-GDP ratio has stagnated at around 10 percent, significantly lower than the Asia-Pacific average of 19 percent. Occasional increases of 1 percent to 2 percent through adjustments serve only as temporary measures, and without sustained growth, they wonâ€™t be sufficient. We have seen sudden shifts through adjustments in the advance to deposit ratio (ADR) of commercial banks over the past year, which has risen sharply without any real benefits to the economy, as this growth has not been reflected in GDP figures. Establishing a target tax-to-GDP ratio of 15 percent by FY2028-29 should be our key objective. Additionally, we need to confront the significant burdens of debt and the high costs associated with servicing it, as interest payments currently account for more than 42 percent of total expenditures. This financial crowding discourages private sector borrowers, creates mismatches, raises the risks of external financing, and places more pressure on the currency. Such a scenario is unsustainable unless the economy operates at a surplus. Moreover, inefficiencies and political interference in subsidies, along with issues like energy circular debt and loss-making state-owned enterprises (SOEs), drain financial resources. Steps must be taken to eliminate these obstacles. Once any policies are in place, the economy should shift away from protectionist measures by avoiding new tax exemptions and statutory regulatory orders (SROs) in sectors such as fertilizer, sugar, wheat, energy and others that lead to revenue losses. Another serious challenge is our excessive dependency on government borrowing, both foreign and domestic, due to persistent shortfalls in tax revenues. This practice needs to be limited, with conditions that funding requires two-thirds approval from both the parliament and the senate to resolve this issue effectively. We should aim for a primary surplus that exceeds 2 percent of GDP while also ensuring that deficits remain below 5 percent. Itâ€™s reassuring to observe considerable investments in Pakistan Investment Bonds (PIBs) instead of treasury bills. However, efforts should focus on maintaining PIBs with maturities exceeding five years, rather than opting for shorter durations, as these longer-term bonds could offer greater economic relief. Striving for a growth rate of over 5 percent in the next three to five years is essential, achievable only throu gh extending a minimum of Rs 3 trillion in credit to the private sector. Additionally, funding for the agricultural sector should surpass Rs 3.5 trillion annually. Otherwise, achieving the enormous tax collection goals set each fiscal year by IMF will not be possible unless banks significantly expand their lending portfolios. Failure to support these critical sectors, which are essential for economic recovery, will hinder progress in restoring confidence, creating jobs, improving infrastructure, and promoting growth in both private and agricultural areas. Slower growth is already having negative effects in various sectors, as it is inadequate to keep up with the increasing population of more than 4 million each year. Ultimately, our most significant economic hurdle is creating surplus liquidity for lending, which requires a strategic policy change to optimise the use of our resources. To meet the liquidity demands for credit in the private and agricultural sectors, the SBP must, despite the challenges, reduce funds injected through open market operations (Rs 14.53 trillion Conventional/Shariah OMO injection amount) while preventing any tightening of liquidity in the interbank market, which would force banks to lend to both sectors. Currently, geopolitical uncertainties and high oil prices significantly threaten economic stability. Even with the unrest in the Middle East, I donâ€™t anticipate a significant drop in remittance flows, which are likely to remain near the intended level. Moreover, the influx of funds is not expected to be as substantial as many market predictions suggest. We might see some small ups and downs in the initial quarter of the new fiscal year, but we can expect stability to return in the following quarters. It is a common occurrence to observe a decrease in remittances in the months after Eid-ul-Azha and Eid-ul-Fitr, as expatriate Pakistanis tend to send the highest amounts during these religious festivities. The flow of remittances is essential for our foreign exchange reserves and plays a significant role in enhancing Rupee liquidity. Additionally, it supports a healthier balance of payments situation. Given the current situation stemming from geographical challenges, along with uncertainties regarding operational matters in the Strait of Hormuz, irregular shipping routes, and supply limitations, it seems unlikely that exports will make a significant recovery or increase. In the absence of a backup or alternative plan to safeguard the foreign exchange reserves, the government should thoughtfully evaluate the possibility of implementing stricter import controls on cars, electronics, cell phones, and a limited number of other products through budgetary actions, until geopolitical tensions subside. The economy cannot handle the negative impacts of weather-related shortages affecting wheat, cotton, pulses, rice, maize, and sugar. Therefore, until the US-Iran conflict is resolved. To serve the nationâ€™s best interest, Pakistan must develop contingency plans for oil, gas and food, which may include considering a temporary 6 to 12-month ban on exporting food and essential commodities. WEEKLY OUTLOOK - MAY 25-29 Last week, the market remained anxious, concentrating on the ongoing conflict in the Middle East, which is still unresolved. On the economic side, the minutes from the recent Federal Open Market Committee (FOMC) meeting were released, revealing a more hawkish approach due to escalating inflation pressures, primarily driven by rising energy and gas prices. At the same time, the bond market and oil prices faced downward pressure, as a sell-off caused treasury yields to increase and oil prices to rise. The climb in US treasury yields raises concerns for homebuyers, contributing to higher mortgage rates. Interestingly, despite elevated oil prices, US economic data reflects resilience, with the economy showing signs of strength and a stable labour market, albeit with rising inflation. This trend suggests that the Federal Reserve is unlikely to make changes to interest rates this year. However, despite ongoing peace efforts in the Middle East, the future remains uncertain. On another note, the optimism for peace and resolution between the US and Iran has propped up gold prices. This week, goldâ€™s direction will also hinge on the developments in the Middle East, as events will influence its pricing. A delay in reaching a settlement could lead to a drop in gold prices and a rise in oil prices, benefiting the US dollar. Conversely, a peace settlement would ease tensions and promote stability in the financial markets. #GOLD @ $ 4509- The movement of gold will remain influenced by the news related to the ongoing conflict between the US and Iran, which will dictate its direction. This week, important support levels to watch on the downside are $ 4405 and $ 4340. However, if it breaks through $ 4598, it could rise towards $ 4678. #EURO @ 1.1603- There is still potential for a decline, but the Euro is unlikely to surpass 1.1675/85. Support levels are at 1.1518 and 1.1480. #GBP @ 1.3430- As long as 1.3485 holds, Pound Sterling will continue to face downward pressure. A decline below 1.3325 is necessary to target 1.3290. #JPY @ 159.20- Traders are likely to evaluate the Bank of Japanâ€™s determination in safeguarding their currency. The $/JPY pair may attempt to reach the 160.00-10 range. A breakout could drive it up to 161.15 or even higher. Conversely, a drop below 158.02 could lead to a more significant decline towards 156.50 or 155.40. Copyright Business Recorder, 2026

Date: 2026-05-25

Details: â€¢ MSCI's broadest index of Asia-Pacific shares outside Japan rose 1% Published May 25, 2026 Updated 21 minutes ago By Reuters SINGAPORE: Stocks surged on Monday while the US dollar and oil prices slid as the prospect of a deal to end the Iran war buoyed risk appetite although a lack of clarity over when the Strait of Hormuz would open kept enthusiasm in check. The nearly three-month-long conflict in the Middle East has driven energy prices sharply higher and reshaped the global rates outlook, as inflation concerns intensify following Tehranâ€™s effective shutdown of the key strait through which a significant share of the worldâ€™s energy flows. US President Donald Trump said on Sunday he had told his representatives not to rush into any deal with Iran, as his administration played down hopes of an imminent breakthrough. Just a day earlier, Trump said Washington and Iran had â€œlargely negotiatedâ€ a memorandum of understanding on a deal that would reopen the waterway, which carried â one-fifth of global oil and liquefied natural gas shipments before the war. Chris Weston, head of research at Pepperstone, said markets have become less focused on the timing of a resolution and instead been keeping an eye on the tone of the headlines. â€œThe tone has been consistently towards some sort of resolutionâ€¦ Weâ€™ve become very patient for a resolution deadline.â€ Oil price sets the tone for markets For much of the year, oil prices have steered broader markets as investors sift through often conflicting signals from Washington and Tehran, with both sides locked in negotiations since a fragile ceasefire took hold in April. On Monday, oil prices hit two-week lows to kickstart the week with Brent crude futures down over 4% to $98.83 a barrel, while U.S. West Texas Intermediate was at $92.03 a barrel, also down over 4%. The euro was up 0.33% at $1.1646, while the Japanese yen firmed to 158.85 per U.S. dollar as the safe-haven dollar gave up some of its recent gains. Nasdaq futures were 1.2% higher and S&P futures were up 0.7%. Japanâ€™s Nikkei jumped 3% to â roar past the 65,000 level for the first time. MSCIâ€™s broadest index of Asia-Pacific shares outside Japan rose 1%. Nick Twidale, chief market analyst at ATFX Global, expects the market to embrace more risk during the session but a sustained surge is unlikely until there is confirmation that the Strait of Hormuz will reopen. â€œWe will need to see an agreement out in place in the coming sessions as we know there are still some major sticking points,â€ he said. Liquidity is likely to be thin as markets in the U.S., UK, Hong Kong and South Korea â are closed. Rate expectations reset Prolonged energy disruptions from the conflict risk pushing up prices worldwide, prompting traders to bet on further rate hikes across both developed and emerging markets. Markets are now fully pricing in a 25-basis-point hike from the U.S. Federal Reserve in January 2027, a sharp shift from expectations before hostilities erupted in late February, when two rate cuts this year were anticipated. The 30-year Treasury â bondâ€™s yield , which is seen as a barometer of geopolitical and fiscal risk, briefly touched its highest level since July 2007 last week but has pulled back from that milestone. There was no cash trading on Monday but 30-year futures climbed 17 ticks. Data on Friday showed U.S. consumer sentiment fell to a record low in May as surging â gasoline prices linked to the Iran war intensified affordability concerns just as Kevin Warsh was sworn in as chair of the Fed. Mark Dowding, CIO for Fixed Income at RBC BlueBay Asset Management, said Warsh is likely to look past near-term elevated price data, but warned that the risk of a rate hike will continue to build as long as inflation remains on an upward trajectory.

Date: 2026-05-25

Details: Published May 25, 2026 Updated about 2 hours ago By Reuters LONDON: UKâ€™s blue-chip FTSE 100 index ended a four-week losing streak after data released this week weakened expectations of a Bank of England rate hike, giving relief to investors unsettled by political uncertainty. The blue-chip FTSE 100 index ended 0.22 percent higher on Friday, notching a 2.66 percent gain for the week. The midcap FTSE 250 closed up 0.96 percent for the day. British retail sales fell by the most in nearly a year in April, according to official figures published on Friday, adding to signs of waning consumer spending against the backdrop of the war in the Middle East and rising energy costs. Earlier this week, separate data also showed that inflation in April was softer than expected, while the unemployment rate ticked up. â€œThe current economic backdrop is much less conducive to a long-lasting bout of inflation than it was in 2022,â€ said Ruth Gregory, deputy chief UK economist at Capital Economics. On Thursday, BoE policymaker Alan Taylor also said he saw less risk of second-round inflation effects from rising energy prices, than in 2022 when Russia invaded Ukraine. â€œDovish data should reduce the urgency for the BoE to act. So far the MPC (Monetary Policy Committee) is taking comfort from tightening in financial conditions which they say can give them time to assess whether to hike or not,â€ BofA Securities analysts said. The brokerage now expects the central bank to raise borrowing costs in July, later than its previous estimate of a June hike. â€œPolitical uncertainty is likely to increase near-term policy uncertainty and lead to tighter financial conditions, which could weigh on growth,â€ the brokerage added. Prime Minister Keir Starmer has defied calls from his partyâ€™s lawmakers to quit, but his failure to alleviate concerns about the cost of living has disappointed voters. Chemical shares rose 3.45 percent on Friday, while aerospace and defence stocks gained 2.76 percent.

Date: 2026-05-25

Details: Published May 25, 2026 Updated about 2 hours ago By Reuters NEW YORK: High-flying US equities could face turbulence in the final days of a blowout corporate earnings season as investors confront an increasingly tricky backdrop of spiking inflation and rising bond yields. The benchmark S&P 500 wobbled this week but remains less than 1 percent below its all-time high, up more than 8 percent for the year. Strength in earnings has allowed investors to look past negative factors such as higher yields, surging oil prices and the ongoing US-Israeli war with Iran, said Anthony Saglimbene, chief market strategist at Ameriprise, but â€œcompany reporting is kind of done now.â€ â€œInvestors are moving beyond the earnings season, and the macro environment is starting to take more center stage,â€ Saglimbene said, ahead of a shortened trading week due to the Memorial Day holiday on Monday. A selloff in the bond market has Wall Street on edge. The benchmark 10-year Treasury yield this week hit its highest level since January 2025, while the 30-year yield touched its highest since 2007. Yields, which rise as bond prices fall, pose headwinds for stocks as they increase rapidly, including by pressuring valuations and translating into higher borrowing costs for consumers and businesses. Major factors driving yields higher have been inflationary worries and war-related energy price spikes. â€œInflation concerns continue to flare,â€ said Jim Baird, chief investment officer with Plante Moran Financial Advisors. â€œYouâ€™re seeing upside in long-term Treasury yields that is kind of challenging the bond market and probably puts a practical lid on equities broadly if it persists for some period of time.â€ A view of inflation is due on Thursday with the April reading of the personal consumption expenditures price index. The release of PCE, the measure favored by the Federal Reserve for setting its 2 percent annual inflation target, follows hot readings this month for other gauges of consumer and producer prices. â€œIt will be another data point that likely shows that months of elevated oil prices and supply disruptions are starting to feed through into inflation data,â€ Saglimbene said. Inflation worries are increasingly filtering into expectations for interest rates. Futures markets now price in the potential for a rate hike by the Federal Reserve later in 2026. At the start of this year, markets were banking on more equity-friendly rate cuts. Minutes released this week from the Fedâ€™s latest policy meeting showed officials growing more concerned that price spikes during the US-Israeli war on Iran could stoke inflation. A growing number were open to the possibility that they may need to raise rates. â€œAt best, Iâ€™d say youâ€™re now in more of an extended pause scenario with the potential for a turn to rate hikes later this year if the inflation story continues to heat up,â€ Baird said. Other economic data in the coming week include a fresh estimate of first-quarter growth and the latest consumer confidence print. With more than 90 percent of S&P 500 companies having reported results, overall first-quarter earnings are on track to have jumped more than 28 percent from a year earlier, according to LSEG IBES data. â€œI would say expectations for earnings and economic growth are pretty high,â€ said Scott Wren, senior global market strategist at Wells Fargo Investment Institute. â€œThatâ€™s built into where stock prices are right now.â€ Several key retailers will report in the coming week, including Costco, Best Buy and Dollar Tree , as investors look for signs that elevated gas prices might be eating away at other consumer spending. Walmart shares slumped on Thursday after the retailing bellwether stuck to its conservative annual sales and profit targets.

Date: 2026-05-23

Details: Published May 23, 2026 Updated about 2 hours ago By Sohail Sarfraz ISLAMABAD: The government is reviewing a budget proposal to revise the Export Facilitation Scheme (EFS) in the budget (2026-27) to stop commercial importers from massive misuse of flying invoices in local markets. Sources told BUSINESS RECORDER that one of the proposals is to withdraw the exemption available to the commercial importers under EFS that allows transfer of their sales tax invoice in the local market. The documented sectors have also filed budget proposals to remove the exemption given to commercial importers under the EFS. Leading players of the documented sectors including steel industry who make major contribution of all kinds of duties & taxes to the national exchequer ethically are struggling and are not able to survive due to the ongoing unfair competition between those who are committed to pay taxes and those who evade taxes & duties. To ensure fair competition and a level playing field, and above all to increase govt revenue, the proposal is to abolish the exemption given to commercial importers under EFS that allows transfer of their sales tax invoice in the local market to prevent massive misuse of flying invoices under this scheme. This also requires rationalization of S. No. 57, Table-2 of the Sixth Schedule (Exemption Schedule of the Sales Tax Act) for checking misuse of input tax. The documented sectors have also proposed a reduction in the discount rate from 17.5% to 0% at import stage under this scheme. The order of Deferment of Value Addition Sales Tax from 17.5% is causing not only huge revenue loss to FBR, but also creating distortion in the steel scrap market by cost differences in the landed cost of the same product in the country. This order is unjustified and unlawful in the eyes of the law and must be corrected immediately. Among the steel industry, the resolution of these issues of all documented sectors aimed at ensuring a level playing field for the entire spectrum of steel industry. Copyright Business Recorder, 2026

Date: 2026-05-23

Details: Published May 23, 2026 Updated about 2 hours ago By Recorder Report KARACHI: Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), has officially, as part of the Proposals for the Federal Budget 2026-2027, strongly advocated for the immediate reinstatement of the Final Tax Regime (FTR) for exporters of goods. The apex trade body, in its budget proposals, has highlighted that the previous withdrawal of the FTR has severely hindered the export sector by introducing critical operational bottlenecks, he added. Sheikh stressed that the removal of FTR has resulted in a significant increase in compliance requirements and extensive documentation for exporters. Furthermore, this policy shift has fuelled tax-related uncertainty and led to a rise in audit harassment â€“diminishing the ease of doing business for the export community. He emphasised the urgent need for a policy reversal to protect the nationâ€™s economic recovery. He said the withdrawal of the Final Tax Regime for exporters of goods has significantly increased compliance requirements, documentation, tax-related uncertainty and excessive audit hassles. It is our core recommendation to reinstate the FTR for exporters as a full and final liability to reduce this severe compliance burden on the business community, he added. Sheikh elaborated on the collaborative approach the government must take to ensure long-term stability. While we strongly recommend reinstating the Final Tax Regime to ease the burden on our exporters, we also propose that the exact rate of the final tax may be negotiated with relevant stakeholders to ensure a balanced, growth-oriented revenue model, he added. However, Saquib Fayyaz Magoon, SVP FPCCI, has explained the necessity for incentivisation and flexibility in taxation frameworks for exporters. To truly boost our national exports, an option may be provided in the upcoming budget to individual exporters to opt between the Final Tax Regime (FTR) or the Normal Tax Regime (NTR) as per their convenience and business structure, he added. Abdul Mohamin Khan, VP & Regional Chairman Sindh, FPCCI, stated that FPCCI maintains that facilitating exporters through rationalized tax frameworks like the FTR is vital for sustainable economic growth, expanding the export base and improving Pakistanâ€™s international competitiveness in the export markets vis-Ã -vis regional competitors. Copyright Business Recorder, 2026

Date: 2026-05-23

Details: Published May 23, 2026 Updated about an hour ago EDITORIAL: Federal Bureau of Statistics (PBS) released provisional data that showed textile exports rebounding in April this year, by 21 percent, compared to the same month last year. In fiscal year 2026, textile and clothing exports declined during five months (0.57 percent in October, 2.57 percent in November, 8.56 percent in December, 7.22 percent in February and 7.06 percent in February). The major contributors for the rise in April 2026 were knitwear (from 23.54 million rupees in April last year to 24.94 million rupees in March 2026) and ready-made garments (15.18 million rupees in April last year to 16.30 million rupees in March this year). This is significant, given the global recession that has impacted on demand for consumer items subsequent to the US/Israel war on Iran that began on 28 February 2026. The improved data of the textile sector indicates that in spite of the government suspending incentives â€“ fiscal and monetary as well as subsidised electricity attributable to the conditions agreed with the International Monetary Fund (IMF) under the ongoing 7 billion-dollar Extended Fund Facility programme â€“ exports nonetheless did increase and therefore a rigorous analysis is required to determine the causes so as to better replicate these effects on other export sectors. And, it is also critical for the government to challenge the textile sectorâ€™s repeated claims that over 150 units have closed down due to the withdrawal of incentives. In addition, oil seeds, nuts and kernels exports surged by 419.7 percent to 33.4 million dollars in April 2026 over the same month last year, and chemicals and pharmaceutical exports also rose by 35.15 percent year on year as did sports, rising by 33.8 percent; surgical goods and medical instruments exports rose by 7.62 percent and tobacco posted a gain of 80.29 percent. A decline was noted in food group, 4.55 percent, and in rice exports, 9.33 percent, with vegetable exports declining by a whopping 78.3 percent in April this year over the same month last year. Cumulative exports in April this year amounted to 2479 million dollars compared to 2174 million dollars in April last year (a 14 percent rise) and 691,589 million rupees this year over 610,190 million-rupees last year (13.34 percent rise) April 2025. Imports rose from 6,098 million dollars in April 2025 to 6763 million dollars last month, a 10.91 percent rise. Total exports (July-April) 2025 amounted to 26,892 million dollars; however, in the corresponding period this year exports declined to 25,209 million dollars â€“ a decline of 6.26 percent. Total imports (July-April), however, rose on the back of the Middle East conflict with oil, fertilizer and minerals supply disruptions raising total imports to 7,494,398 million rupees in 2025 compared to 16,141,381 million rupees in the same period this year. The trade deficit rose to negative 9059.9 billion rupees (32.199 billion dollars) July-April 2026 (against negative 7,418 million rupees (26.59 billion dollars) in the comparable period of last year â€“ rising by a disturbing 21 percent in dollar terms and 22.14 percent in rupee terms. The IMF insisted in the third review documents that â€œthe next phase of duty reductions under the National Tariff Policy will be legislated under the FY27 budget, and efforts to remove and simplify Pakistanâ€™s extensive non-tariff barriers also need to move forwardâ€ with obvious implications for a rise in imports. In addition, the Fund maintained that â€œas part of the broader regulatory streamlining effort, a new national regulatory registry will be established as a comprehensive source on business regulations, starting with the federal government and ICT governments (new proposed end-June 2027 Structural Benchmark), which will improve transparency and reduce regulatory uncertainty. The authorities are also in the process of finalizing amendments to the Companies Act for submission to Parliament (end-June 2026 SB), focusing on reducing regulatory burdens and transaction costs and improving corporate governance and transparency for both listed and unlisted companies.â€ And, of course, the phasing out of fiscal incentives for special economic zones (SEZs), special technology zones (STZs), and export processing zones (EPZs) by 2035 will reduce fiscal costs; however, it is also expected to negatively impact on output. To conclude, these structural benchmarks may negatively impact on existing productive units and would be resisted; however, as noted by the Fund in 2024 extending fiscal and monetary incentives to industries has yet to lead to the graduation of infant industries. And, while the transition phase would have negative consequences one can only hope that in the medium term domestic industry is strengthened and enabled to compete internationally. Copyright Business Recorder, 2026

Date: 2026-05-23

Details: Budget 2026-27 Taxation May 23, 2026Mrs. Anjum Shahnawaz State ministry signals targeted relief for salaried class in FY27 budget amid IMF-linked fiscal constraints The government is expected to reduce the tax burden on salaried individuals in the upcoming FY27 federal budget, Minister of State for Finance and Revenue Bilal Azhar Kayani said. Speaking at a pre-budget seminar organized by the Rawalpindi Chamber of Commerce and Industry (RCCI), the minister said the federal budget for FY27 is expected to be presented in the first week of June 2026. He said the government intends to provide relief to taxpayers and the salaried class, but acknowledged that fiscal space remains limited due to commitments under the International Monetary Fund (IMF) programme. Kayani assured the business community that there would be â€œzero toleranceâ€ for harassment by tax authorities and emphasized continued efforts to improve the tax administration system. He said Pakistan has achieved macroeconomic stability over the past two years through fiscal discipline, pointing to improved foreign exchange reserves and restored confidence from international financial institutions. The minister added that despite regional geopolitical tensions, the Pakistani rupee remained stable and the country avoided fuel shortages seen in some other regional economies. He said boosting exports and strengthening domestic economic capacity remain key government priorities, with the long-term goal of reducing reliance on IMF assistance. Kayani also highlighted ongoing reforms aimed at supporting small and medium enterprises (SMEs), including an extension in the utilization period for imported goods for small exporters to 18 months to improve ease of doing business. On privatization, he said the process is progressing rapidly, noting that the privatization of Pakistan International Airlines has recently been completed, while work on three power distribution companies is underway. He added that the government is also pursuing housing finance initiatives approved by the prime minister to stimulate construction sector activity. Business leaders attending the seminar urged the government to abolish the super tax, reduce corporate and sales tax rates, and increase the income tax threshold for salaried individuals. They also called for measures to reduce the cost of doing business and the introduction of a long-term industrial policy to ensure sustainable economic growth.

Date: 2026-05-23

Details: Published May 23, 2026 Updated about 2 hours ago By Reuters FRANKFURT: European shares finished at their highest in over a month on Friday, led by technology stocks as risk sentiment got a lift on expectations that a deal to end the Middle East conflict could be near. The pan-European STOXX 600 ended 0.73 percent higher at 625.12 points and logged its biggest weekly gain in seven. US Secretary of State Marco Rubio said that there was some progress towards an agreement with Tehran but more work is required, the latest development in the US-Iran impasse that has ensued since Washington suspended bombing in a fragile ceasefire in early April. Key disagreements between Tehran and Washington involve Iranâ€™s uranium stockpile and controls on the Strait of Hormuz. Reflecting the broader uncertainty, crude prices rose 1 percent to USD103 a barrel. Analysts expect a deal that includes opening the strategic waterway to lift European equities that have lagged peers, given the regionâ€™s dependence on oil imports that have become costly since the war. â€œWe are neutral on Europe and euro zone equities, given their sensitivity to higher energy costs, while we view the more defensive Swiss market and European healthcare more favourably,â€ said Mark Haefele, chief investment officer at UBS Global Wealth Management. AI optimism that has driven global indexes to record highs also helped the European tech index rise almost 3.2 percent. Chip giant Nvidia outlined strong forecasts earlier this week, suggesting strong demand for tech infrastructure. Among European chip stocks, Infineon added nearly 8 percent, STMicroelectronics gained 5.2 percent and ASML rose 4.7 percent. Also aiding the sector was French President Emmanuel Macronâ€™s comments that the government will invest an additional â‚¬1 billion (USD1.16 billion) in its quantum strategy and â‚¬550 million to support the microelectronics sector. Among laggards, Puig tumbled 13.4 percent after the Spanish perfumery ended merger talks with US cosmetics maker EstÃ©e Lauder. Julius Baer fell 6.9 percent after the Swiss bankâ€™s net new money inflows came in below expectations.

Date: 2026-05-23

Details: Published May 23, 2026 Updated about 2 hours ago By Reuters NEW YORK: Wall Streetâ€™s main indexes rose on Friday ahead of a long weekend, with the blue-chip Dow hitting a record high for the first time since the Iran war began, as investors tracked progress in talks to end the nearly three-month-old conflict. The S&P 500 is on track for an eighth consecutive weekly gain, which would mark its best winning streak since December 2023. Most megacap and growth stocks traded higher, with Apple up 2 percent, hitting a market capitalization of more than USD4.5 trillion for the first time. Semiconductor stocks, a key driver of recent Wall Street gains, were broadly up with the Philadelphia chip index rising 2.4 percent. Qualcomm led the pack with a 12 percent jump. PC makers Dell Technologies and HP Inc surged over 15 percent each after Chinaâ€™s Lenovo Group reported a better-than-expected 27 percent jump in quarterly revenue. In the latest on the Iran situation, Reuters reported that a Qatari negotiating team arrived in Tehran in coordination with the United States to try to help secure a deal to end the war and resolve outstanding issues. â€œThe market has been working under the assumption that thereâ€™s going to be relatively near-term resolution,â€ said Thomas Hayes, chairman at Great Hill Capital LLC. â€œIf that assumption proves to be wrong, the market will catch down very quickly. The market has been trained that thereâ€™s an embedded Trump put in the market.â€ Global stocks have whipsawed since the conflict began in late February, but hopes of an eventual resolution to the war, optimism in the AI trade and resilient earnings growth have propelled US stocks to record highs this month. The market recovery, however, has faced some hurdles as investors fret about the inflationary impact of surging oil prices, pushing government bond yields higher around the world and hitting risk appetite this week. At 11:34 a.m. ET, the Dow Jones Industrial Average rose 408.59 points, or 0.82 percent, to 50,697.24, the S&P 500 gained 48.08 points, or 0.65 percent, to 7,493.79 and the Nasdaq Composite gained 174.66 points, or 0.67 percent, to 26,467.76. Seven out of the 11 major S&P 500 sector indexes were higher, led by information technology. Meanwhile, government bond yields were steady after Federal Reserve Governor Christopher Waller said the Fed should axe the â€œeasing biasâ€ from its policy statement and effectively open the door to a possible rate hike. Kevin Warsh will be sworn in as Fed leader at the White House later in the day, taking over the reins from Jerome Powell, a pivotal moment for monetary policy and the American economy. The CBOE volatility index hit a more than two-week low ahead of the three-day market holiday, with US markets shut on Monday for Memorial Day. Meanwhile, the price-weighted Dow notched its first intraday record high since February 10, becoming the last of the three main US stock indexes to hit the milestone.

Date: 2026-05-22

Details: Published May 22, 2026 Updated 34 minutes ago By Reuters HONG KONG: China stocks gave up earlier gains and tumbled in afternoon trading on Thursday, with the semiconductor sector leading losses as profit-taking pressure piled up. Chinaâ€™s blue-chip CSI 300 index was down 1.4 percent at market close, after rising as much as 1.8 percent earlier in the session. Shanghai Composite Index tumbled more than 2 percent, falling below the 4,100-point level in its biggest single-day drop since March 23. Tech sectors led the declines, with the tech-focused STAR 50 Index losing 3.7 percent after hitting a fresh record high in the opening hours. The CSI Semiconductor Index closed down 4.4 percent and the CSI AI Index lost 3.7 percent. Indexes tracking mid-caps and small-caps were down 3.4 and 3.5 percent, respectively. â€œAI and chip stocks, having outperformed earlier, are now facing the steepest corrections amid profit-taking,â€ said Kenny Ng, securities strategist at Everbright Securities International. The correction could continue in the near term, compounded by disappointing macroeconomic data released earlier in the week, he said, adding the Shanghai stock benchmark could test the 4,000-point level. In Hong Kong, the benchmark Hang Seng Index was down 1 percent, and the Hang Seng Tech Index lost 2.2 percent. Geopolitical uncertainties also weighed on sentiment. US President Donald Trump said on Wednesday that negotiations with Iran were in the final stage, suggesting he was prepared to wait a few days to â€œget the right answersâ€ from Tehran. But Trump also warned of renewed attacks if Iran did not agree to a deal. â€œFrom a broad market perspective, we remain positive and optimistic,â€ said Xiaoning Zhang, China equity strategist at J.P. Morgan, forecasting a year-end target of 5,200 for the CSI 300 Index in the base case. â€œAgainst a backdrop of ample liquidity and broadly improving earnings, our strategy is to focus on high-quality growth and selective stock-picking,â€ she added. Around the region, MSCIâ€™s Asia ex-Japan stock index was firmer by 2.4 percent while Japanâ€™s Nikkei index was up 3.1 percent.

Date: 2026-05-22

Details: Published May 22, 2026 Updated 7 minutes ago By Recorder Report KARACHI: Commercial importers have called on the federal government to end the tax gap between commercial and industrial imports of raw materials, saying the disparity is driving tax avoidance, distorting the market, and leading to substantial losses in revenue for the national exchequer. Industry sources said that current tax differential, ranging between 26-28 percent total impact in comparison, is not commercially viable for genuine commercial importers. As a result, some of the importers are increasingly resorting to informal arrangements to remain competitive in the domestic market, of which the other commercial importers are unable to compete in the market. All major trade bodies have serious reservations on this issue and also taken up in their budget proposals for the next fiscal year submitted to the federal government, calling for the complete removal of the existing tax differential between commercial and industrial imports of raw material. Importers have proposed two options to the government. The first is the complete elimination of the tax differential between commercial and industrial imports of raw materials. Alternatively, they suggested narrowing the gap by reducing taxes on commercial imports and capping the differential at 2 to 3 percent. According to industry representatives, the commercial import bill could potentially double if tax rates are rationalized and the market is brought into the formal economy, ultimately leading to higher tax revenue collection. They further claimed that such reforms, particularly by lowering the tax burden on commercial imports, would significantly boost documented imports, discourage risky informal practices, and channel billions of rupees in additional tax revenue directly into the national exchequer. They said that higher tax burden on commercially imported raw materials, compared to industrial imports, has created significant market distortions. They added that a wide range of goods are being cleared under industrial import categories and later diverted to the open market, resulting in substantial revenue losses for the government. According to them, this practice is largely driven by the sizeable tax differential between commercial and industrial import channels. Industry sources said it has increasingly become common practice for goods to be imported under the names of industrial importers. They added that, in such cases, an informal premium estimated at around 25-30 percent of the tax differential is reportedly settled through private arrangements. They warned that this informal system shifts revenue benefits away from the government and into undocumented channels. Copyright Business Recorder, 2026

Date: 2026-05-22

Details: Published May 22, 2026 Updated about an hour ago By Muhammad Saqib KARACHI: Sitara Petroleum Service Limited (SPSL) on Thursday formally joined the Pakistan Stock Exchange (PSX) after successfully completing one of the countryâ€™s largest and most widely participated private-sector Initial Public Offerings (IPO), raising approximately Rs4.8 billion amid overwhelming investor response. The listing marks the 10th IPO of the year, reflecting growing momentum in Pakistanâ€™s capital market as both institutional and retail participation continue to strengthen despite global economic uncertainties. According to details shared at the listing ceremony held at the Pakistan Stock Exchange, Sitara Petroleumâ€™s IPO attracted the highest-ever participation in Pakistanâ€™s IPO history, with nearly 25,000 applications received across both the book-building and retail subscription phases. The transaction raised approximately Rs4.8 billion, making it among the largest private-sector IPOs in Pakistanâ€™s history, while demonstrating strong investor confidence in the companyâ€™s fuel retail and logistics business model. The book-building portion of the offering, comprising 126 million ordinary shares, was fully subscribed within just eight minutes and ended up oversubscribed seven times, underscoring exceptionally strong demand from institutional investors and high-net-worth individuals. Meanwhile, the retail subscription phase also witnessed robust participation, with the 42 million-share retail portion oversubscribed 3.4 times, attracting nearly 24,000 applications from investors nationwide, highlighting growing retail engagement in Pakistanâ€™s equity market. The overall transaction comprised 279.914 million ordinary shares, including both pre-IPO and IPO offerings, representing 16.66 percent of the companyâ€™s post-IPO paid-up capital. The pre-IPO placement, comprising 111.914 million ordinary shares or 6.66 percent of post-issue capital, successfully raised approximately Rs1.66 billion at a price of Rs14.85 per share. The IPO component included 168 million ordinary shares, equivalent to 10 percent of the companyâ€™s post-listing paid-up capital. The company had initially offered the IPO at a floor price of Rs13.50 per share, but strong investor demand during book building pushed the strike price to Rs18.90 per share, reaching the upper end of the price band. As a result, the IPO transaction size increased to approximately Rs3.17 billion at the discovered strike price, compared to Rs2.27 billion at the floor price, reflecting strong market appetite for the offering. The IPO attracted participation from a diverse investor base, including institutional investors, corporates, high-net-worth individuals and retail investors, reflecting broad confidence in the companyâ€™s future growth trajectory and business fundamentals. Copyright Business Recorder, 2026

Date: 2026-05-22

Details: Published May 22, 2026 Updated about an hour ago By AFP PARIS: Parisâ€™ appeals court Thursday found Air France and Airbus guilty of involuntary manslaughter over the 2009 crash of a Rio-Paris flight that killed 228 people, the worst disaster in Franceâ€™s aviation history. The Paris Court of Appeal ruled that the French flag carrier and Europeâ€™s leading aerospace manufacturer were â€œsolely and entirely responsible for the crash of flight AF447,â€ ordering each to pay 225,000 euros ($261,000) - the maximum fine for corporate manslaughter. While the penalties are symbolic, the ruling will be seen as significant reputational damage for both companies. On June 1, 2009, Air France Flight AF447, travelling from Rio de Janeiro to Paris, was cruising over the Atlantic when the pilots lost control of the aircraft, causing it to plunge into the ocean. There were no survivors among the 216 passengers and 12 crew on board the Airbus-built A330 aircraft, the dead including 72 French nationals and 58 Brazilians. The companies, who have denied any criminal liability, blaming pilot error, had been acquitted by a lower court in 2023. That verdict was a blow to the victimsâ€™ families, who said they were outraged by the courtâ€™s decision to clear the companies of the charges. Although prosecutors at the time had asked for the charges to be dropped, they had subsequently lodged the appeal to allow â€œthe full potential of the legal appeals procedureâ€ to play out. The eight-week appeal trial ran between September and December last year. In November, prosecutor Rodolphe Juy-Birmann lambasted the behaviour of Air France and Airbus over the years. â€œNothing has come of it â€” not a single word of sincere comfort,â€ he said. â€œItâ€™s a rock-solid defence. One word sums up this whole circus: indecency.â€ Lawyers for the families have argued that both companies were aware of the problem with pitot tubes, which are used to measure flight speed, and that the pilots were not trained to deal with such a high-altitude emergency. The court heard how a malfunction with the tubes, which became blocked with ice crystals during a mid-Atlantic storm, caused alarms to sound in the planeâ€™s cockpit and the autopilot system to switch off. Experts highlighted how, after the instrument failed, the pilots put the plane into a climb that caused the aircraft to stall and then crash into the ocean.

Date: 2026-05-22

Details: Published May 22, 2026 Updated about an hour ago By Reuters NEW YORK: Oil prices whipsawed in a volatile trading session on Thursday, trading lower on uncertain prospects for a resolution in the US-Israeli war with Iran. Brent crude futures lost USD2.80, or 2.7 percent, to USD102.22 a barrel at 1:57 p.m. ET (1757 GMT). US West Texas Intermediate futures shed USD2.45, or 2.5 percent, to USD95.81 a barrel. Earlier in the day, oil prices swelled by 3 percent after REUTERS reported that Iranâ€™s supreme leader issued a directive that dented hopes for a swift resolution to the war. The REUTERS report about that directive, which cited two senior Iranian sources, signaled that Tehran is hardening its stance on a key US demand. The directive from Ayatollah Mojtaba Khamenei could further complicate negotiations and frustrate US President Donald Trumpâ€™s efforts to broker an end to the war. The development came a day after Iran announced a new â€œPersian Gulf Strait Authority,â€ which would oversee a â€œcontrolled maritime zoneâ€ in the Strait of Hormuz. Prices were volatile. Gains accelerated after US Secretary of State Marco Rubio said a proposed tolling system in the strait would make a diplomatic deal unfeasible. Prices pared gains later after he added that officials from Pakistan, which is acting as a mediator, will travel to Iran for talks. â€œWeâ€™ve been in this situation multiple times before, which ultimately led to disappointment,â€ ING analysts said in a note on Thursday, forecasting an average Brent price of USD104 a barrel in the current quarter. Separately, UBS raised its oil price forecasts by USD10 a barrel on Thursday, projecting Brent crude at USD105 a barrel and WTI crude at USD97 in September. Iran warned against further attacks and unveiled steps entrenching its control of the strait, which remains mostly closed. Before the war, the strait carried oil and liquefied natural gas shipments equal to about 20 percent of global consumption. Economic activity in the euro zone shrank at its sharpest rate in more than 2-1/2 years in May as a war-driven surge in living costs hammered demand for services across Europe and firms accelerated layoffs, surveys showed on Thursday. Seven leading OPEC+ oil-producing countries will likely agree to a modest hike in July output when they meet on June 7, REUTERS reported on Thursday, citing four sources. Typically, output decisions from the group would move markets, but that was not the case during Thursdayâ€™s session, as supply disruptions linked to the Iran war continue to affect deliveries from several producers.

Date: 2026-05-22

Details: Published May 22, 2026 Updated 23 minutes ago By Reuters LONDON: The start of peak summer fuel demand combined with the lack of new oil exports from the Middle East and depleting stocks could push the oil market into the â€œred zoneâ€ in July-August, the head of the International Energy Agency said on Thursday. â€œWe may be entering the red zone in July or August if we donâ€™t see that there are some improvements in the situation,â€ Fatih Birol said in a speech at Chatham House in London, in reference to the oil supply crisis brought about by the Iran war. Attacks on energy infrastructure and Iranâ€™s effective closure of the Strait of Hormuz have removed over 14 million barrels per day (bpd) of oil supply from the Middle East, the largest oil supply crisis in history. The Red Zone Birol did not elaborate on what exactly a â€˜red zoneâ€™ would look like. But he said that the oil market surplus ahead of the Iran war, the IEAâ€™s coordinated 400 million barrel strategic reserve release, and commercial stockdraws combined are not enough to solve the crisis. â€œThe single most important solution is fully and unconditional opening of the Strait of Hormuz,â€ Birol said. The 32-member IEAâ€™s coordinated strategic reserve release, the largest such release in history, is now flowing to the market at a rate of about 2.5 million to 3 million barrels per day, Birol said. At that pace, the final supplies from the initial 400 million barrel release will hit the market by the start of August, REUTERS calculations show, coinciding with Birolâ€™s potential red zone. The IEA is ready to coordinate further releases if necessary, Birol added. Middle East production recovery will be slow It will take a lot of time to bring Middle East oil production and refining capacity back to pre-war levels, and the recovery time will differ from country to country, Birol said. â€œMy biggest fear is Iraq,â€ Birol said, as its finances have been damaged substantially by reduced oil revenues, and as a lack of storage capacity has forced Iraq to shut down oil fields, which can be complicated to revive.

Date: 2026-05-21

Details: Taxation May 21, 2026Shahnawaz Akhter New SRO introduces stricter disclosure requirements and mandatory registration framework for INGOs The Federal Board of Revenue (FBR) has amended income tax rules to make registration compulsory for International Non-Governmental Organizations (INGOs), tightening compliance requirements under the countryâ€™s tax framework. The FBR issued SRO 879(I)/2026 dated May 20, 2026, amending the Income Tax Rules, 2002. The move follows a previously issued draft notification, SRO 856(I)/2026 dated May 11, 2026. Under the amended Rule 80B, the FBR has revised identification and registration requirements and introduced an expanded disclosure framework for INGOs operating in Pakistan. The updated rules replace clause (a) of sub-rule (1) with requirements for CNIC, NICOP, POC or foreign passport details. A new sub-rule has also been inserted mandating additional information for INGO registration. Expanded disclosure requirements for INGOs Under the new provisions, INGOs will be required to provide comprehensive details including: â€¢ Name of taxpayer and business address â€¢ Accounting period and contact numbers â€¢ Principal business activity â€¢ Details of principal officer or authorized representative â€¢ Authorization letter for appointment of representative â€¢ Cell phone and email address of authorized officer â€¢ Tax registration or incorporation documents from home country â€¢ Embassy verification of credentials â€¢ Local residence proof including rent/lease agreement and utility bills â€¢ No Objection Certificate (NOC) from the Ministry of Interior and Narcotics Control â€¢ Memorandum of Understanding (MoU) with the Government of Pakistan â€¢ Details of directors, trustees or major shareholders holding 10% or more stake Officials said the amendments aim to improve transparency, strengthen oversight of foreign-funded organizations, and ensure compliance with Pakistanâ€™s legal and regulatory framework. The new rules are expected to enhance monitoring of INGOs operating in the country while formalizing documentation standards for registration and renewal processes.

Date: 2026-05-21

Details: Published May 21, 2026 Updated about 2 hours ago By Recorder Report LAHORE: Multan and Dera Ghazi Khan divisions have achieved 81 percent and 93 percent, respectively, of the cotton sowing targets assigned by the Punjab Agriculture Department (PAD) for the current season. According to official figures, the department had set a target to cultivate cotton over 775,000 acres in Multan division and more than 425,000 acres in Dera Ghazi Khan Division. The progress was reviewed during a meeting on cotton sowing held in Multan under the chairmanship of Secretary Agriculture Punjab, Iftikhar Ali Sahoo. The meeting was attended by Commissioner Multan Aamir Karim Khan, Special Secretary Agriculture South Punjab Sarfraz Hussain Magsi, Director Generals Agriculture Punjab Abdul Hameed, Naveed Asmat Kahloon and Dr Aamir Rasool, along with officers of the Irrigation Department, Dr Muhammad Iqbal Bandesha, Asif Majeed, Khalid Mahmood Khokhar, Muhammad Ilyas and other stakeholders. Commissioner Dera Ghazi Khan Chaudhry Ashfaq Ahmed and deputy commissioners of the relevant districts also joined the meeting online. Addressing the participants, the Secretary Agriculture said enhanced cotton production was the guarantee of farmersâ€™ prosperity. He appreciated the cooperation extended by divisional and district administrations in achieving cotton cultivation targets. He directed field formations to fully utilise their professional capabilities in guiding farmers so that production targets could be achieved successfully. Sahoo further said that the availability of fertilisers at officially notified prices in markets was being ensured, while indiscriminate action against those involved in the adulteration of agricultural pesticides was continuing across the province. He added that, in consultation with experts and keeping in view the prevailing weather conditions, a fresh cotton advisory would soon be issued to provide timely guidance to farmers. Copyright Business Recorder, 2026

Date: 2026-05-21

Details: Published May 21, 2026 Updated about 3 hours ago By Reuters NEW YORK: Wall Streetâ€™s main indexes rose on Wednesday, as a rebound in chip stocks ahead of Nvidiaâ€™s quarterly results lifted sentiment after a recent selloff driven by rising bond yields and inflation concerns. Nvidia, the worldâ€™s most valuable company and the centerpiece of the global AI boom, rose 2 percent. The companyâ€™s results are expected after the closing bell. Investors will crunch the numbers for signs that appetite for AI infrastructure remains strong enough to support lofty valuations across the technology and AI space. The broader chip sector also advanced on Wednesday. Marvell Technology rose 7.8 percent, Intel gained 6.3 percent and Micron Technology added 3.6 percent. The Philadelphia SE Semiconductor index advanced 2.9 percent. â€œNvidiaâ€™s earnings come at just the right time when the market needs some reassurance that the promise of AI can overpower the headwind of rising bond yields,â€ said James Demmert, chief investment officer at Main Street Research. â€œThe sticking points in Nvidiaâ€™s earnings report are any signs of margin compression due to rising memory prices, along with how the company is navigating sales in China.â€ US stocks have come under pressure in recent days as a selloff in global bond markets drove yields higher. Traders were expecting the US Federal Reserve to raise interest rates at the turn of the year as the conflict in the Middle East pushes oil prices higher, reviving inflation worries. The benchmark 10-year Treasury yield, which touched a 16-month high of 4.687 percent in the previous session, eased to 4.588 percent on Wednesday. Brent crude futures extended losses on the day, falling 5.6 percent to USD105.13 after US President Donald Trump said that negotiations with Iran were in the final stages, though investors remain wary about the outcome of peace talks as disruption to Middle Eastern supply continues. At 11:51 a.m. ET, the Dow Jones Industrial Average rose 529.35 points, or 1.08 percent, to 49,894.89, the S&P 500 gained 72.83 points, or 0.99 percent, to 7,426.44 and the Nasdaq Composite gained 359.73 points, or 1.39 percent, to 26,230.44.

Date: 2026-05-21

Details: Published May 21, 2026 Updated about 2 hours ago NEW YORK: Oil prices fell about 6 percent on Wednesday after US President Donald Trump said that negotiations with Iran were in the final stages, although investors remained wary about the outcome of peace talks as disruption to Middle Eastern supply continued. Brent crude futures settled USD6.26, or 5.63 percent, lower at USD105.02 a barrel and US West Texas Intermediate futures were down USD5.89, or 5.66 percent, at USD98.26. Trump said negotiations with Iran were in the final stages but warned of further attacks unless Iran agreed to a deal. Iranian foreign ministry spokesperson Esmaeil Baghaei said Iran was ready to develop protocols for safe shipping traffic in cooperation with other coastal states, without providing further details. Despite signs of progress, some market participants and analysts remained wary about the outcome of negotiations and global supply tightness that will likely persist even if the US and Iran reach a deal. â€œYouâ€™ve got to take all these pronouncements with a grain of salt these days, but the market was also quick to reward it and price in the hope of a resolution,â€ said John Kilduff, partner at Again Capital. Analysts at Citi said on Tuesday that they expect Brent crude to rise to USD120 a barrel in the near term, stating that oil markets are underpricing the risk of prolonged supply disruption, and Wood Mackenzie estimated that it could approach $200 if the Strait of Hormuz stays largely shut until the end of the year. Similarly, PVM analysts said global oil stocks could reach critically low levels. â€œYet, as observed lately, market players are comparatively nonchalant (or complacent) about what the conflict might bring,â€ PVM said. The premium on Brent contracts for delivery next month over contracts for delivery in six months an indicator of tradersâ€™ views of current supply tightness - is around $20 a barrel, way below last monthâ€™s highs above USD35. Russian Deputy Prime Minister Alexander Novak said on Wednesday that some countries were lifting sanctions on Russian oil because global markets cannot function without it, the state TASS news agency reported. Three supertankers were crossing the Strait of Hormuz on Wednesday, carrying oil bound for Asian markets, after waiting in the Gulf for more than two months with 6 million barrels of Middle East crude on board. The number of vessels crossing the strait remains well below the 130 or so ships that crossed daily before the war. The CEO of UAEâ€™s ADNOC, Sultan Al Jaber, said on Wednesday it will take at least four months to get back to 80 percent of pre-conflict flows. To make up the supply shortfall, countries are relying on commercial and strategic inventories. US crude stockpiles fell last week as demand remained elevated, the Energy Information Administration said on Wednesday. Crude inventories fell by 7.9 million barrels to 445 million barrels in the week ended May 15, the EIA said, compared with analystsâ€™ expectations in a Reuters poll for a 2.9 million-barrel draw.

Date: 2026-05-20

Details: â€¢ MSCIâ€™s broadest index of Asia-Pacific shares outside Japan fell 0.7% on Wednesday Published May 20, 2026 Updated 9 minutes ago By Reuters SYDNEY: Asian stocks fell for a fourth straight session on Wednesday as war-driven inflation fears hammered bonds, while investors awaited earnings from Nvidia to see whether the worldâ€™s most valuable company might help markets navigate higher borrowing costs. The sell-off in global bond markets persisted overnight as investors ramped up bets that the Federal Reserve may need to increase interest rates this year. The benchmark 10-year Treasury yield hit a 16-month high of 4.687% overnight, while the 30-year yield climbed to 5.198%, levels not seen since 2007. Oil prices slipped a little on Wednesday, with Brent crude futures off 0.2%, but stayed above $110 a barrel at $111.07. The Strait of Hormuz remained effectively closed and US President Donald â Trump said he might need to strike Iran again a day after he said he was postponing an imminent attack to allow for more negotiations with Tehran. In Beijing, Chinese leader Xi Jinping will host his â€œold friendâ€ Russian President Vladimir Putin, less than a week after Trumpâ€™s high-profile visit. MSCIâ€™s broadest index of Asia-Pacific shares outside Japan fell 0.7% on Wednesday, while Japanâ€™s Nikkei dropped 1.6%. South Koreaâ€™s KOSPI was down 2%. Chinese blue-chips slipped 0.4%, while Hong Kongâ€™s Hang Seng index eased 0.7%. Europeâ€™s pan-region stock futures fell 0.5%. Nasdaq futures were flat while the S&P 500 futures slipped 0.1%. â€œAt this point of time, it remains my base case that we are seeing a corrective pullback after an absolutely phenomenal rally,â€ said Tony Sycamore, analyst at IG. â€œThe US yields obviously are creating some rumbles in the market and now â attracting a lot of attention. â€œNvidia could come out and absolutely exceed expectations â€¦ but I donâ€™t think so. I think the ability for Nvidia to just absolutely shoot the lights out and shock everybody like it has done, I donâ€™t think thatâ€™s in its book of tricks anymore.â€ The chipmaking giant will announce first quarter earnings after the market close on Wednesday. Expectations, as always, are sky-high. Revenue is projected to increase by almost 80% â to nearly $79 billion, according to the median forecast in an LSEG survey of analysts. Treasuries nursed losses in Asia, with the yield on benchmark U.S. 10-year notes holding steady at 4.6713%, having jumped 21 basis points in the past three sessions. The 30-year yield was flat at 5.1858% after a 17 â bps jump from last Thursday. The dollar stood near a six-week high against its major peers. It was steady at 159.05 yen , having gained for seven straight sessions that unwound most of the intervention-driven gains on April 30 when Japanese authorities stepped into the â market to safeguard the yen at the 160 mark. The euro last bought $1.1594, having touched its lowest level since April 8 overnight. The British pound was at $1.3380, not far from the six-week low it touched earlier this week. Gold prices slipped 0.4% to $4,463 an ounce, the lowest since the end of March as the U.S. dollar gained.

Date: 2026-05-20

Details: â€¢ Brent crude oil futures fell 45 cents, or 0.4%, to $110.83 a barrel Published May 20, 2026 Updated 40 minutes ago By Reuters TOKYO: Oil prices eased on Wednesday after US President Donald Trump again asserted the war with Iran will end â€œvery quicklyâ€, though investors remain wary about the outcome of peace talks amid continued disruptions to Middle East supply from the conflict. Brent crude oil futures fell 45 cents, or 0.4%, to $110.83 a barrel by 0050 GMT, while US West Texas Intermediate futures were down 27 cents, or 0.3%, to $103.88. Both benchmarks fell nearly $1 on Tuesday after US Vice President JD Vance said the U.S. and Iran had made progress in talks, with neither side wanting to see a resumption of â military action. â€œInvestors are keen to gauge whether Washington and Tehran can actually find common ground and reach a peace agreement, with the US stance shifting daily,â€ said Toshitaka Tazawa, an analyst at Fujitomi Securities. â€œOil prices are likely to remain elevated given the possibility of renewed U.S. attacks on Iran and expectations that, even if a peace deal is reached, crude supply will not quickly return to pre-war levels,â€ he said. Despite Trumpâ€™s assertion to US lawmakers late on Tuesday about a quick end to the conflict, he earlier said the United States may need to strike Iran again and he had been an hour away from ordering an attack before postponing it. His comments on the need to strike again came a day after he said he â had paused a planned resumption of hostilities following a new proposal by Tehran to end the U.S.-Israeli war. In his remarks on Tuesday Trump also said Iranâ€™s leaders are begging for a deal and warned a new US attack would happen in coming days if no agreement was reached. The US-Israeli war against Iran has caused the effective closure of the Strait of Hormuz, which normally carries about a â fifth of global oil supplies, creating the worldâ€™s biggest oil supply disruption, according to the International Energy Agency. Citi on Tuesday said it expects Brent crude to rise to $120 a barrel in the near term, stating that oil markets are under-pricing the risk of a prolonged supply disruption â and broader tail risks. To make up the shortfall in global supplies from the war, countries are relying on their commercial and strategic inventories. In the US, crude oil inventories fell for a fifth straight week last week, according to market sources citing â American Petroleum Institute data released on Tuesday, while fuel stocks also fell. US crude stockpiles reported by the Energy Information Administration are expected to have fallen by about 3.4 million barrels in the week to May 15, according to a REUTERS poll. The weekly EIA data is due later on Wednesday.

Date: 2026-05-20

Details: Published May 20, 2026 Updated about 6 hours ago By Reuters HOUSTON: Oil prices settled lower on Tuesday after Vice President JD Vance said the US and Iran had made progress in talks, with neither side wanting to see a resumption of military action. â€œWe think that weâ€™ve made a lot of progress. We think the Iranians want to make a deal,â€ Vance told reporters at a White House briefing. On Monday, Trump posted on social media that he was holding off on a military attack that had been scheduled for Tuesday. Efforts to reach a deal with Iran continued, though he added the US was ready to resume attacks if a deal was not reached. Brent futures for July settled down 82 cents, or 0.73 percent, at USD111.28 a barrel. The US West Texas Intermediate crude contract for June delivery, which expired on Tuesday, settled down 89 cents, or 0.82 percent, to USD107.77. The more-active July contract settled down 23 cents at USD104.15. Even with Tuesdayâ€™s dip, prices remained elevated. On Monday, Brent hit its highest since May 5 and WTI its highest since April 30. â€œWe continue to have significant amounts of oil offline and with the regional infrastructure being in the crosshairs we are just holding our breath here until either we get a deal or another round of military action, so a pretty significant binary outcome awaits,â€ said John Kilduff, partner at Again Capital. The Middle East conflict has effectively closed the Strait of Hormuz, a critical waterway that typically carries daily about a fifth of global supplies of oil and liquefied natural gas, creating the worldâ€™s biggest oil supply disruption, according to the International Energy Agency. Tehranâ€™s latest peace proposal to the US involves ending hostilities on all fronts including Lebanon, the exit of US forces from areas close to Iran and reparations for destruction caused by the war, state media reported on Tuesday. Meanwhile, the US imposed sanctions on an Iranian foreign currency exchange house and what it said were front companies overseeing transactions on behalf of Iranian banks. It also blocked 19 vessels it said were involved in shipping Iranian petroleum and petrochemicals to foreign customers. Elsewhere, Chinese state refiners have slashed oil throughput by more than 1 million barrels per day since the outbreak of the Iran war, analysts and market sources said, as disruption to crude supplies and poor margins forced them to scale back operations. Chinese state refiners are processing 8.4 million barrels per day of crude this month, down from 8.6 million bpd in April and 9.5 million bpd in March, according to consultancy Energy Aspects. That compares with about 10 million bpd before the US and Israel attacked Iran at the end of February. US Treasury Secretary Scott Bessent extended a sanctions waiver by 30 days to allow â€œenergy-vulnerableâ€ countries to continue purchasing Russian seaborne oil. Separately, Russiaâ€™s Ryazan oil refinery, which accounts for almost 5 percent of the countryâ€™s total refining volumes, stopped processing after a Ukrainian drone attack last Friday, two industry sources said on Tuesday.

Date: 2026-05-19

Details: Written by Shahnawaz Akhter Service providers in ICT directed to adopt electronic invoicing system under new order The Federal Board of Revenue (FBR) has made Point of Sale (POS) integration with its computerized system mandatory for service providers operating in the Islamabad Capital Territory (ICT), according to a new general order issued on Monday. The tax authority issued Sales Tax General Order (STGO) No. 05 of 2026 (ICT), directing service providers falling under Table-1 and Table-2 of the ICT (Tax on Services) Ordinance, 2001 to integrate their business operations with the FBRâ€™s computerized system for real-time reporting of services. FBR sets deadlines for POS integration The FBR said amendments introduced through the Finance Act 2025 empowered the board to require service providers to connect their hardware and software systems with the tax authority through licensed integrators, including Pakistan Revenue Automation Limited (PRAL). Under the new order, public limited companies and firms with annual turnover exceeding Rs1 billion must complete registration by May 25, 2026. Such entities are required to complete system testing by June 5 or June 10 and start issuing electronic invoices by June 15 or June 20, 2026. Companies with annual turnover below Rs1 billion, as well as individuals and associations of persons with turnover exceeding Rs100 million, have been assigned deadlines ranging between May 30 and June 20, 2026. Meanwhile, all other registered service providers must complete registration by June 1, testing by June 15 and begin issuing electronic invoices no later than June 25, 2026. Electronic invoicing aimed at improving tax collection The FBR clarified that service providers already integrated with the boardâ€™s computerized POS system before the latest order would not need to repeat the integration process. Tax experts said the mandatory POS integration and electronic invoicing framework is expected to improve documentation of the services sector, enhance transparency and strengthen sales tax collection in Islamabad. The initiative forms part of broader tax administration reforms aimed at increasing digital compliance and reducing undocumented economic activity in Pakistan.

Date: 2026-05-19

Details: â€¢ MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.22% Published May 19, 2026 Updated 25 minutes ago By Reuters SINGAPORE: Asian shares wobbled on Tuesday while bonds found their footing following a steep selloff after US President Donald Trumpâ€™s decision to pause a planned attack on Iran and his claim there was a good chance of a nuclear deal sent oil prices lower. Trump said on Monday he had paused a planned attack against Iran to allow for negotiations to take place on a deal to end the war, after Tehran sent a new peace proposal to Washington. He subsequently said there was a â€œvery good chanceâ€ the U.S. could reach an agreement with Iran to prevent Tehran from obtaining a nuclear weapon. Still, investors remained cautious after being rattled in the previous session by a weekend drone strike in the United Arab Emirates. â€œWeâ€™ve seen a lot of back and forth already,â€ said Fabien Yip, a market analyst at IG. â€œUntil we actually see real action happening (in the Strait of Hormuz), â whereby ships are passing through safely and we see a material rebound in the numbers of traffic going through in the Strait, I think the market in general is shrugging off the commentary from either side.â€ Brent crude futures fell more than 2% to $109.41 a barrel on the back of Trumpâ€™s comments, while U.S. crude was down 1.3% to $107.25 per barrel, though both remained more than 50% above their pre-war levels. In share markets, MSCIâ€™s broadest index of Asia-Pacific shares outside Japan was down 0.22%, while Japanâ€™s Nikkei rose 1%. South Koreaâ€™s Kospi fell 2%. Nasdaq futures reversed early gains to trade 0.07% lower, while S&P 500 futures lost 0.03%. In Europe, EUROSTOXX 50 futures rose 0.4%, while FTSE futures and DAX futures edged 0.3% and 0.4% higher, respectively. The all-important artificial intelligence trade will be tested by earnings from Nvidia that are due on Wednesday, where expectations are sky-high for the worldâ€™s most valuable company. â€œNvidiaâ€™s earnings are the ultimate test for a stock market that is not only trading at record highs, but one that â also had a breathtaking bounce off of the March lows, as Nvidia is the marketâ€™s shorthand for everything AI and this marketâ€™s gains have been driven in large part by AI over the past few years,â€ said Richard Reyle, chief investment officer at Questar Capital Partners. Bond selloff abates The fall in oil prices helped stem a steep selloff in global bonds on Tuesday, though worries remained about the lasting inflationary shock from the Iran war. Yields on the benchmark 10-year US Treasury note eased from a more than one-year high to 4.5974% in early Asian trade, â while the two-year yield was down slightly to 4.0564%. Japanese government bond yields, which shot to record highs in the previous session, were similarly down across the curve. Overnight, G7 finance ministers acknowledged mounting concerns over public debt and bond market volatility as they met in Paris. Markets are now pricing in rate hikes from major central banks this year on expectations policymakers will have to tighten â policy to combat a resurgence in inflation driven by higher-for-longer energy prices. â€œWhile the economic rationale for pricing persistently higher inflation over the coming years on the current supply shock is weak particularly given the labor market backdrop, a return of supply-side volatility and the sanguine growth tone in markets both argue for more risk premium through the â inflation curve,â€ Goldman Sachs analysts said in a note. In foreign exchange, the dollar has benefited from safe-haven demand since the onset of the war and was up 0.1% at 159 yen , putting traders on alert for any intervention from Tokyo to shore up its ailing currency. The euro was down 0.1% at $1.1643, while sterling similarly fell 0.1% to $1.3419. Elsewhere, spot gold eased marginally to $4,562.50 an ounce, having come under pressure from rising bond yields.

Date: 2026-05-19

Details: Published May 19, 2026 Updated about 2 hours ago By Sohail Sarfraz ISLAMABAD: The Competition Commission of Pakistan (CCP) Monday approved a proposed investment by the Central Depository Company of Pakistan Limited (CDC) in Naymat Collateral Management Company Limited, a move that officials say could strengthen the countryâ€™s evolving warehousing and collateral management infrastructure without harming market competition. The approval, granted by the CCP following a first-phase review under the Competition Act, 2010, allows CDC to subscribe to additional ordinary shares in Naymat Collateral Management Company Limited (NCMCL). The transaction comes at a time when Pakistan is attempting to modernise commodity financing and strengthen confidence in warehouse receipt systems, particularly for agricultural and traded commodities. NCMCL is currently the only collateral management company registered with the Securities and Exchange Commission of Pakistan for accreditation and oversight of warehouses operating under the countryâ€™s Electronic Warehouse Receipt framework. The CDC, established in 1993, is one of Pakistanâ€™s key capital market institutions, providing electronic custody of securities, settlement facilitation and related depository services. NCMCL, incorporated in 2020, operates as a collateral management company responsible for warehouse oversight, verification and reporting services for commodities held as collateral. In its assessment, the CCP defined the relevant market as collateral management and warehousing oversight services within Pakistan. The regulator concluded that the deal would not significantly alter competition dynamics because the two companies operate in separate and unrelated business segments. The CCPâ€™s merger order stated: â€œThe Transaction will have minimal effects on the market dynamics in terms of competition and market structure considering the fact that post-merger market share would not increase. Further, it would not produce any anti-competitive effects such as collusion or removal of an effective competitor because the relevant market is fragmented.â€ The FBR has also been notified. The acquisition neither constituted horizontal integration nor vertical integration, reducing the likelihood of anti-competitive effects such as market foreclosure or collusion. The transaction would not create entry barriers or substantially lessen competition in the market. The decision reflects Pakistanâ€™s broader effort to facilitate investment and improve institutional infrastructure in financial and commodity markets while maintaining regulatory oversight of competition concerns. The CCP formally authorised the transaction under Section 31 of the Competition Act. Copyright Business Recorder, 2026

Date: 2026-05-18

Details: Written by Shahnawaz Akhter Pakistan commits to stricter enforcement of digital invoicing under IMF-backed reforms The Federal Board of Revenue (FBR) is set to propose stricter penalties for taxpayers failing to comply with digital sales tax invoicing requirements in the upcoming Finance Bill 2026, as part of Pakistanâ€™s commitments under reforms linked to the International Monetary Fund. According to official documents, Pakistan has assured the IMF that the FBR will introduce legal amendments aimed at strengthening enforcement against non-compliance with the digital invoicing regime. Digital invoicing rollout gains pace Under the existing framework, all entities registered as sales tax filers were required to register on the FBRâ€™s digital invoicing platform by December 31, 2025. However, by the end of March 2026, only around one-third of registered taxpayers were reportedly issuing live digital invoices through the system. To accelerate adoption, the FBR plans to issue two notifications by the end of March 2026 allowing easier correction of invoicing errors and permitting multiple licensed integrators to connect with the system. Officials expect all active sales taxpayers to adopt the digital invoicing system by July 31, 2026. FBR expects Rs46 billion additional revenue The new digital invoicing mechanism has been designed to simplify sales tax filing procedures and automate the calculation of sales tax liabilities for taxpayers. Authorities believe the system will improve monitoring of business transactions and reduce tax evasion, potentially generating an additional Rs46 billion in revenue during fiscal year 2026-27. Pakistan Revenue Automation Limited (PRAL) has assigned 16 personnel to support the operation of the system. The FBR will monitor the performance of the digital invoicing initiative through key performance indicators, including the total value of invoices processed digitally and the number of taxpayers issuing live invoices on the platform. The proposed penalties and enforcement measures are part of broader tax administration reforms aimed at improving documentation of the economy and strengthening revenue collection.

Date: 2026-05-18

Details: Written by Shahnawaz Akhter Tax authority plans broader reforms to strengthen compliance and expand tax base The Federal Board of Revenue (FBR) will develop new audit selection parameters aimed at improving revenue collection and broadening Pakistanâ€™s tax base as the country faces persistent tax shortfalls, officials said. The move is part of wider revenue administration reforms designed to strengthen tax compliance and improve monitoring of high-risk taxpayers. According to officials, the FBR has already implemented several key measures under its ongoing transformation plan, including the deployment of a Compliance Risk Management (CRM) system to strengthen taxpayer audits, expansion of digital invoicing systems, and enhanced production monitoring mechanisms. FBR plans centralized audit policy The tax authority said it will prepare a new audit manual and audit policy by the end of August 2026 to ensure fair and transparent treatment of taxpayers. Under the proposed framework, audit case selection will be centralized through administrative prioritization and monitoring of high-risk cases using the CRM system. Officials believe the reforms could help improve tax enforcement while reducing arbitrary audit practices. Revenue reforms aimed at widening tax base Despite recent reforms, the FBR continues to face challenges in meeting revenue targets, highlighting concerns over Pakistanâ€™s narrow tax base and weak documentation of the economy. Authorities expect revenue gains from the new measures to begin materializing in fiscal year 2026-27, although officials acknowledged that current reforms mainly target existing taxpayers. The FBR is now expected to intensify efforts to expand retailer tax registration and push for stricter enforcement measures linked to tax filing. Under proposed reforms, the tax authority may seek powers to restrict certain high-value transactions to individuals who have filed income tax returns, a move aimed at encouraging greater tax compliance and documentation of economic activity. The measures are part of broader efforts to stabilize public finances and strengthen Pakistanâ€™s revenue collection system amid ongoing fiscal pressures.

Date: 2026-05-18

Details: Published May 18, 2026 Updated about 2 hours ago By Naseem Usman KARACHI: Pakistanâ€™s cotton sector is showing early signs of seasonal activity, with trade sources indicating that the new cotton crop is likely to arrive in the market ahead of the usual schedule. In a significant development, approximately four to five ginning factories across Sindh and Punjab are expected to commence partial operations as early as May, underscoring the faster-than-anticipated maturation of the new crop. Price signals from the field reflect the seasonâ€™s early momentum. New crop seed cotton, locally known as phutti, has fetched between Rs 10,000 and Rs 11,500 per 40 kilograms, while ginned cotton has been changing hands at Rs 21,750 to Rs 22,000 per maund. Traders and market observers attribute the upward pressure on cotton prices to the earlier onset of the new season, which has tightened near-term supply expectations and lifted sentiment across the cotton value chain. However, the international price environment presents a contrasting picture. New York cotton futures, after experiencing sharp swings, recorded a notable decline of eight cents, a development that could temper enthusiasm in export-oriented segments of Pakistanâ€™s textile sector if the trend persists. On the policy front, the textile and apparel industry moved swiftly to engage the government ahead of the federal budget. A high-level delegation from the sector met with the Finance Minister and presented a detailed set of recommendations aimed at securing fiscal relief and boosting export competitiveness. The meeting underscores growing industry concern over cost pressures and the need for a supportive budgetary framework. In a parallel development, the All Pakistan Textile Mills Association, APTMA, has mounted strong opposition to the Punjab Infrastructure Development Cess Amendment Bill 2026, arguing that the proposed levy would impose an additional financial burden on an industry already contending with elevated input costs. APTMA has warned that such a measure could undermine the competitiveness of Pakistani textiles in global markets at a time when the sector can least afford further cost escalation. Adding weight to the industryâ€™s concerns, APTMA Chairman Mian Kamran Arshad has written a formal letter to Federal Minister Rana Tanveer Hussain, urging the government to give cotton the policy attention it deserves as the countryâ€™s foremost foreign exchange-earning crop. In his communication, the chairman stressed that without deliberate and sustained government support for cotton cultivation and its downstream industrial use, Pakistan risks squandering one of its most valuable economic assets. The local cotton market experienced an overall bullish trend during the past week, even as available stocks have shrunk to critically low levels. Currently, only approximately 20,000 bales remain in stock, making supply extremely tight across the market. In a modest sign of seasonal activity, early-picked cotton from the new 2026-27 crop has begun arriving in partial quantities. However, full-scale ginning operations are not expected to resume until at least June 15, when some factories may begin working on a partial basis. Prior to Eid ul-Adha, only two ginning factories one located in Burewala and another in Khanewal are anticipated to produce two to three lots each from the early-harvested cotton. In terms of current pricing, early-picked Phutti is being traded at Rs. 10,000 to Rs. 11,600 per 40 kilograms, while processed cotton is fetching Rs. 21,250 to Rs. 22,000 per maund. In the province of Sindh, one or two ginning factories in Sanghar are also expected to resume limited operations in the near future. On the policy front, the government has this year imposed a 0.9 percent Cess Tax on cotton transported from Sindh and Balochistan to Punjab, adding to the financial burden on the supply chain. Compounding the situation further, a sharp rise in energy, petrol, and diesel prices is expected to drive transportation costs significantly higher. As a result, textile mills in Punjab will likely be forced to pay considerably more for cotton sourced from Sindh, particularly during the early weeks of the season when a substantial volume of cotton traditionally moves from Sindh to Punjabâ€™s mills. Textile mill owners, meanwhile, have expressed concern over the sustainability of rising cotton prices. According to them, given the prevailing conditions in the cotton yarn market, a price of Rs. 18,000 to Rs. 18,500 per maund represents the maximum viable range, and any purchase above this threshold would translate into financial losses. This sentiment suggests that cotton prices may not climb steeply at the outset of the new season. However, market participants acknowledge that a significant rally in New York cotton futures could alter the outlook and shift market dynamics considerably. The affectees of the Karachi Cotton Exchange Building have raised serious questions over the lack of a strong collective response to the occupation of the historic exchange building by the Federal Investigation Agency with the assistance of the Evacuee Trust Property Board. They noted that the Karachi Cotton Exchange, which was established even before the creation of Pakistan, holds immense historical significance, yet its seizure has failed to generate the level of protest that similar incidents have provoked elsewhere. The affectees drew a sharp comparison with the situation in Multan, where all cotton-related institutions had jointly and forcefully opposed an attempt to hand over land belonging to the Cotton Crop Research Institute to the Multan Gymkhana. That unified resistance compelled the government to reverse its decision. The affectees questioned why an equally vigorous campaign had not been launched to protect the Karachi Cotton Exchange building, urging all stakeholders in the cotton industry to take immediate and decisive action. They further noted that a case concerning the building is currently pending before the Sindh High Court and stressed that a well-organised and effective campaign must be launched without further delay to safeguard this historic institution. On the domestic market front, cotton prices across Sindh and Punjab are currently ranging between 20,000 and 23,000 rupees per maund, varying according to quality and payment conditions. Meanwhile, Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, reported that after a recent uptick in international cotton prices, New York cotton futures retreated by eight American cents per pound. According to the weekly export and sales report released by the United States Department of Agriculture, total sales for the marketing year 2025â€“26 stood at 47,700 bales. Vietnam emerged as the leading buyer, purchasing 31,800 bales, followed by Indonesia in second place with 4,100 bales. Turkey and Pakistan both purchased 2,700 bales each, placing them in third and fourth positions respectively. For the upcoming marketing year 2026â€“27, total sales were recorded at 29,700 bales. Vietnam once again led all purchasing nations with 31,800 bales, while Mexico ranked second with 8,800 bales and Bangladesh came in third with 4,400 bales. Pakistanâ€™s cotton sector has scripted history by commencing its ginning season during the second week of May for the very first time, marking a significant milestone in the countryâ€™s agricultural calendar. With cotton arrivals already underway in both Punjab and Sindh, prices of seed cotton and lint have registered an extraordinary surge right from the opening days of the season, signalling a buoyant market outlook for the months ahead. On the ground, the early momentum is clearly visible. Following the partial harvesting of cotton in the coastal belt of Sindh, four ginning factories in Khanewal and one in Burewala have commenced processing operations over the past two days. Ginners based in Punjab have simultaneously begun procuring cotton from regions where early sowing was undertaken on a considerably larger scale this February compared to previous years. In Sanghar and Tando Adam, one ginning factory each has also initiated cotton procurement, with expectations that both will be running at full capacity within the coming days. Cotton Ginners Forum Chairman Ihsan ul Haq confirmed that prices have climbed sharply from the very start of the new season. Initial transactions for seed cotton were recorded between Rs10,000 and Rs10,500 per 40 kilograms, while advance deals for lint were settled at around Rs21,700 per maund. The market has since moved higher, with seed cotton deals now being finalized at up to Rs11,600 per 40 kilograms and lint prices reaching Rs22,500 per maund. Several market sources have indicated that lint transactions are also taking place at Rs23,000 per maund, with some reports placing deals as high as Rs23,500 per maund, a development that has further strengthened expectations of a sustained upward trend in prices. Haq also noted that the historically early start to the ginning season would prove beneficial for textile mills, which have been grappling with limited lint availability. Fresh supplies entering the market ahead of schedule are expected to ease the supply crunch before it deepens further. To put this development in perspective, Pakistanâ€™s cotton ginning season has traditionally commenced in June. The cotton year 2025â€“26 had itself been considered a landmark, as the season opened in the third week of May. This year, however, the season has begun a full week earlier still, entering territory that has no precedent in the countryâ€™s cotton history. Against this backdrop of record early activity, the industry is simultaneously pressing the government for structural reforms it says are long overdue. All Pakistan Textile Mills Association Chairman Kamran Arshad has addressed a strongly worded letter to Federal Minister for Food Security Rana Tanvir Hussain, demanding the immediate implementation of decisions already approved by the Cabinet Committee on cotton rehabilitation. The letter cautions that continued inaction and delays by the relevant authorities are inflicting measurable damage on the national economy. Among the key demands outlined in the letter is a fundamental governance overhaul, specifically the dissolution of the Pakistan Central Cotton Committee and its replacement with an industry-led Pakistan Cotton Advisory Council. APTMA is also calling for the transfer of cotton cess collection to the Federal Board of Revenue to ensure greater transparency and accountability. The association further demands that 70 percent of the funds generated through cess be exclusively directed toward cotton research and development, and that the new institutional structure meaningfully incorporate the provinces, farmers, research bodies, and the seed sector as stakeholders. Copyright Business Recorder, 2026

Date: 2026-05-18

Details: Published May 18, 2026 Updated about 2 hours ago By Reuters BENGALURU: Emerging Asian markets posted sharp declines on Friday as surging oil prices and sluggish US-Iran peace negotiations compounded fears surrounding inflation and economic stability. MSCIâ€™s emerging Asia equities gauge fell nearly 2 percent, dragged by a more than 6 percent slump in South Koreaâ€™s KOSPI. The benchmark briefly crossed the 8,000 mark before reversing sharply on losses in major chipmakers, with Samsung Electronics down 8.6 percent and SK Hynix falling 7.7 percent. Despite limited progress in US-Iran talks, hopes of a truce have lifted the regional benchmark nearly 20 percent since late March, when reports of a potential ceasefire first surfaced. â€œWe see todayâ€™s pressure more as markets digesting the strong recovery rally since April, rather than a decisive shift into broad risk-off,â€ said Song Zhe, senior Asia and global EM equities investment specialist at BNP Paribas Asset Management. Investor focus remained on Beijing, where US President Donald Trump concluded his two-day state visit on Friday. Trump and Chinaâ€™s Xi Jinping have agreed that they oppose Iran acquiring nuclear weapons and â€œwant the straits openâ€. â€œThereâ€™s definitely some unease about the stalled peace talks between the US and Iran, especially concerning the impact on inflation and interest rates via higher energy prices,â€ said Kyle Rodda, senior financial market analyst at Capital.com. Oil prices continued to rise on Friday, heading for a weekly gain of more than 5 percent after President Donald Trump said China wants to buy oil from the United States. Meanwhile, traffic through the critical Strait of Hormuz remained constrained. Meanwhile, Malaysiaâ€™s economy expanded faster than projected in the first quarter, supported by resilient domestic demand that helped cushion shocks stemming from the Middle East conflict. Malaysiaâ€™s central bank slightly raised its 2026 growth forecast, although it expects headline inflation to accelerate this year. Malaysian shares and the ringgit fell around 0.4 percent each. The currency stands out as one of the best performers so far this year, with a year-to-date gain of nearly 3 percent, including a weekly advance of 0.7 percent.

Date: 2026-05-18

Details: Published May 18, 2026 Updated about 2 hours ago By Reuters NEW YORK: Two themes critical to the US stock market â€” the artificial intelligence boom and inflation-pressured consumer spending â€” will come under the microscope this week with earnings reports from semiconductor giant Nvidia and a host of retailers led by Walmart . Stock indexes have charged higher in recent weeks, with the benchmark S&P 500 and technology-heavy Nasdaq Composite near record levels. Two factors influencing market action in â€œalmost parallel tracksâ€ have been developments with AI and the spike in energy prices caused by the war in Iran, said Allen Bond, portfolio manager at Jensen Investment Management. â€œThere is not a lot of overlap in the two narratives, but one day to the next, the developments â€¦ can really drive the market,â€ Bond said. Stocks pulled back on Friday, as rising crude prices stoked inflation fears that also drove bond yields sharply higher. Still, the S&P 500 has climbed nearly 17 percent since its low for the year in late March, and is now up more than 8 percent in 2026. After the sharp rise, several investors said the market was poised for a breather. Some worried that relatively few stocks have led the recent gains, suggesting the rally may be less robust than it seems. For example, only about one-fifth of S&P 500 components had outperformed the index since the March 30 low as of Thursday morning, according to LSEG data. â€œThere are really a smaller set of names driving the overall index returns again,â€ said Patrick Ryan, chief investment strategist at Madison Investments. â€œItâ€™s not necessarily a healthy market when you have that many stocks being left behind.â€ Nvidia reports results on Wednesday, as an exceptionally strong first quarter for US corporate profit growth winds down. Shares of Nvidia, the worldâ€™s largest company by market capitalization, and other semiconductor stocks have propelled indexes higher in recent weeks. Nvidia shares are up 36 percent since the March low, while the Philadelphia SE semiconductor index is up more than 60 percent, amid voracious demand for chips as tech companies spend massively to build data centers and other AI-related infrastructure. Nvidiaâ€™s AI products have driven its shares up over 1,800 percent since the latest bull market began in October 2022. â€œWhat we need to see from Nvidia is evidence that justifies the increase in the stock price and justifies their position and their benefit from this increased spending in data centers,â€ Bond said. â€œThe results will be looked at â€¦ as a signal into the health of the rest of the industry.â€ One topic is whether rivals are eroding Nvidiaâ€™s market share, said Yung-Yu Ma, chief investment strategist at PNC Financial Services Group. â€œItâ€™s probably going to be more a story of, is Nvidia able to defend its leadership position as well as it has been able to the past few years?â€ Ma said. The coming week also offers an update on the retail industry. Walmart, the worldâ€™s largest retailer, posts quarterly results on Thursday. Other retailers reporting this week include Home Depot, Target and TJX Cos. Investors have been wary that war-related inflation will start to weigh on consumer spending, which accounts for more than two-thirds of the US economy. Data this week showed high monthly readings for both consumer and wholesale prices, with the Producer Price Index for April posting its largest rise since March 2022. Earlier this month, the US national average gasoline price topped USD4.50 a gallon for the first time in nearly four years. Investors will want to hear from retailers about spending trends and whether they have changed in recent weeks, PNCâ€™s Ma said.

Date: 2026-05-16

Details: Written by Shahnawaz Akhter Move aims to enhance tax compliance and curb revenue leakages in bottled water and juice industries The Federal Board of Revenue has taken another step toward strengthening tax compliance and industrial transparency by finalizing the authorization of vendors for production monitoring systems in the beverages sector, including bottled water and packaged juices. According to the tax authority, three firms have been officially approved as vendors for the deployment and implementation of production monitoring solutions: M/s ISSM Labelling Solutions, M/s Tollink, and M/s Authentik. The FBR said the authorization process was carried out through a transparent and competitive framework in line with applicable regulatory requirements, ensuring that selected companies possess the technical capability to provide reliable monitoring systems. Officials said the initiative is part of broader efforts to expand digital monitoring across key industrial sectors to reduce tax evasion and improve revenue collection. The FBR has already implemented production monitoring and track-and-trace systems in major industries such as cement, sugar, fertilizer, and tobacco, which officials say have significantly improved revenue assurance and reduced leakages. In addition, video-analytics-based monitoring systems have recently been finalized for the textile and tiles sectors and are currently in the implementation phase. The tax authority said the expansion into the beverages sector reflects its strategy to strengthen real-time production tracking, improve documentation, and ensure equitable enforcement across industries. It added that modern technology-driven systems will help improve compliance while supporting a more transparent and efficient business environment. However, the FBR also warned that non-compliance with installation requirements will result in strict enforcement actions, including penalties, legal proceedings, sealing of premises, and other measures under the Sales Tax Act, 1990. Stakeholders have been advised to cooperate fully with authorized vendors and FBR teams to ensure timely implementation of the monitoring systems. Officials reiterated that the broader objective of these reforms is to widen the tax base and strengthen fiscal sustainability through improved oversight of industrial production.

Date: 2026-05-16

Details: Written by Mrs. Anjum Shahnawaz Government says no violations detected in key import sectors over past five years Minister of State for Finance Bilal Azhar Kayani on Friday informed the National Assembly that no cases of under-invoicing had been detected in the import of used vehicles or solar panels during the past five years, according to data provided by the Federal Board of Revenue. Responding during the question hour, the minister said that although concerns regarding under-invoicing existed in certain import sectors, no specific violations involving commercial imports of used vehicles or solar panels had been identified. He told lawmakers that under SRO 1895(I)/2025 issued on September 30, 2025, the government allowed the commercial import of five-year-old used vehicles until June 30, 2026. However, he added that no commercial imports of used vehicles had taken place under the scheme so far. â€œAs a result, there are currently no reported cases of under-invoicing in this category,â€ the minister said. Regarding solar panels, Bilal Azhar Kayani stated that customs authorities had not detected any under-invoicing case in solar panel imports during the last five years based on direct evidence. He said the government was implementing multiple reforms through the FBR to strengthen customs enforcement and reduce tax evasion risks. These measures include faceless customs assessment systems, post-clearance audits, and enhanced risk management mechanisms designed to identify high-risk consignments through data-driven analysis. The minister said the reforms aim to minimize human interaction in customs procedures while improving transparency and trade facilitation. During supplementary questions, Bilal Azhar Kayani also highlighted the governmentâ€™s social protection and energy transition initiatives. He said the Benazir Income Support Programme currently has a budget allocation of Rs716 billion and supports more than 10 million deserving families, primarily through women beneficiaries. On renewable energy policy, the minister said the government continues to promote solar energy adoption as part of its broader energy transition strategy. He added that existing net metering consumers would continue under current arrangements, while new users are being shifted toward net billing mechanisms to maintain sustainability of the power system. Bilal Azhar Kayani said the government remains committed to providing targeted subsidies and relief measures despite fiscal constraints, while also maintaining economic discipline.

Date: 2026-05-16

Details: Written by Shahnawaz Akhter Electronic production tracking system introduced to curb sales tax evasion The Federal Board of Revenue has launched an electronic monitoring system for bottled water production aimed at preventing sales tax evasion and improving tax compliance in the sector. In this regard, the FBR issued Sales Tax General Order (STGO) No. 3 of 2026 for the implementation of electronic monitoring at bottled water manufacturing facilities across the country. The monitoring initiative has been launched under Section 40C(2) of the Sales Tax Act, 1990, read with Rules 150ZQR and 150ZQT of Chapter XIV-BA of the Sales Tax Rules, 2006. According to the FBR, all registered persons involved in the production and packaging of bottled water, including toll manufacturers, are required to install an electronic production monitoring system with immediate effect. The tax authority directed all relevant businesses to complete installation of the system by June 15, 2026. Under the new framework, manufacturers will be required to install industrial barcode scanners, counting sensors, industrial computers, IP cameras, network video recorders, programmable logic controllers, LED displays, and uninterrupted power supply systems. The monitoring setup will also include specialized production monitoring software capable of real-time tracking and transmission of production data to the FBRâ€™s central control unit. According to the order, the system must support real-time object detection and counting, quantitative production analysis, data archiving, detection of unexpected production stoppages, and analytics for legal enforcement actions. The FBR said the monitoring systems would be supplied, installed, and maintained by vendors authorized by the board. To ensure implementation, Chief Commissioners Inland Revenue have been directed to appoint dedicated focal persons to coordinate with bottled water manufacturers and authorized vendors. Tax experts said the move is part of broader efforts by the FBR to digitize industrial monitoring and reduce underreporting of production and sales in sectors vulnerable to tax leakage. They noted that electronic production monitoring has previously been introduced in industries such as sugar, tobacco, fertilizer, and cement to improve revenue collection and transparency. The latest initiative reflects the governmentâ€™s ongoing push toward documentation of the economy and technology-driven tax administration reforms.

Date: 2026-05-16

Details: Published May 16, 2026 Updated about 4 hours ago By Reuters FRANKFURT: Europeâ€™s STOXX 600slid and logged weekly losses on Friday as concerns over energy-induced inflation pressures due to the US-Iran standoff rattled global markets. The pan-European benchmark closed down 1.5 percent at 606.92 points, snapping two straight days of gains. Germanyâ€™s DAX declined the most among regional bourses, down 2.1 percent on Friday. Positive corporate earnings and a rally in semiconductor shares aided gains this week, but were overshadowed by cost-of-living worries as energy prices stay elevated. Europeâ€™s materials index led declines, dropping 5.1 percent tracking weaker metal prices, while the defence sector fell 3.6 percent, the worst weekly performance among individual sectors. Semiconductor firms paused their recent rally, with ASML, and Aixtron down 4.4 percent and 6 percent, respectively. US President Donald Trump finished his two-day meeting with Chinaâ€™s President Xi Jinping, which yielded little headway with regard to reopening the Strait of Hormuz. Trump also said his patience with Iran was running out. â€œEnergy prices are pretty much the biggest problem facing Europe and ultimately, there doesnâ€™t appear to be any political will to address that and markets are pricing that,â€ said Michael Hewson, senior market analyst at iForex. Inflation data out of several European countries and the US this week showed that the jump in energy costs have started reflecting in consumer and producer prices, prompting investors to price in at least two rate hikes by the end of the year by the European Central Bank. Reflecting this, bond markets also witnessed a selloff. â€œMarkets which are more reliant on foreign energy imports and manufacturing heavy, which is energy intensive, feel the pain a bit more,â€ said Daniel von Ahlen, senior macro strategist at GlobalData TS Lombard. Economically sensitive cyclical sectors also came under pressure, with banks dropping 6 percent as BNP Paribas and Deutsche Bank lost 3 percent and 2.6 percent, respectively. Meanwhile political uncertainty was rife in the UK as Prime Minister Keir Starmer struggled to hold on to power after his main rival signalled a challenge to his leadership. The blue-chip FTSE 100 ended down 1.7 percent, while the more domestically-focused mid-cap index lost 1 percent.

Date: 2026-05-16

Details: Published May 16, 2026 Updated about 4 hours ago By Reuters NEW YORK: Wall Streetâ€™s main indexes pulled back sharply on Friday, as inflation fears triggered by the Middle East conflict drove up Treasury yields and threatened to derail an AI-fueled rally that had driven stocks to record highs. The yield on 10-year Treasury notes, a benchmark for global borrowing costs, hit 4.58 percent - its highest level since May 2025. Global bond yields also jumped as increasing evidence of economic damage from the Iran war prompted investors to assume interest rates will rise faster than expected and growth will suffer. The odds of the US Federal Reserve hiking interest rates by 25 basis points in December have more than doubled over the past week to about 40 percent, according to CME Groupâ€™s FedWatch tool, after hotter-than-expected inflation readings signaled price pressures may prove harder to contain. â€œInvestors are repricing oil higher for longer and factoring in a more persistent inflation backdrop,â€ said Tom Ross, Head of High Yield at Janus Henderson Investors. â€œThe other, less talked about factor we believe the market is starting to get its head around is the impact of AIâ€¦ the short-term impact of the huge wave of data center rollout is inflationary.â€ Brent crude prices rose over 3 percent to USD109.59 a barrel after comments from US President Donald Trump and Iranâ€™s foreign minister dented hopes of a quick end to the 2-1/2-month-old conflict in the Middle East. At 12:08 p.m. ET, the Dow Jones Industrial Average fell 519.39 points, or 1.04 percent, to 49,544.07, the S&P 500 lost 79.60 points, or 1.06 percent, to 7,421.64 and the Nasdaq Composite lost 360.56 points, or 1.35 percent, to 26,274.66. The energy sector was the lone gainer, rising 1.4 percent, while all other sectors traded lower, led by losses in technology. Recently strong chip stocks came under pressure with Nvidia and AMD each falling more than 3 percent, while Intel dropped 6.5 percent, and the Philadelphia SE Semiconductor Index slid 3.5 percent. The pullback followed another record-setting session on Wall Street on Thursday, when investors had largely brushed aside inflation worries and pushed stocks higher on continued enthusiasm around artificial intelligence.

Date: 2026-05-16

Details: Written by Mrs. Anjum Shahnawaz Weekly fuel price review lowers petrol to Rs409.78, diesel to Rs409.58 per litre Ministry of Energy on Friday reduced petroleum prices by Rs5 per litre each in the latest weekly review, providing relief to consumers after sharp increases in the previous adjustment. According to an official notification, the price of petrol (Motor Spirit) was cut to Rs409.78 per litre from Rs414.78, while high-speed diesel (HSD) was reduced to Rs409.58 per litre from Rs414.58. The revised prices came into effect from midnight on May 16. The latest reduction follows a steep increase of around Rs15 per litre in the previous weekly review, when the government raised fuel prices amid fluctuations in global crude oil markets and pressure from the exchange rate. Pakistan has been revising petroleum prices on a weekly basis since the escalation of tensions involving the United States, Israel, and Iran earlier this year, which disrupted global energy markets and increased uncertainty over oil supplies. The conflict intensified concerns over the Strait of Hormuz, a critical global shipping route that handles nearly one-fifth of the worldâ€™s oil and gas supplies during normal periods. Despite the domestic cut in fuel prices, international oil markets remained volatile on Friday. Global crude prices rose sharply after remarks by Donald Trump and Iranâ€™s foreign minister weakened expectations of a deal to end attacks and seizures of vessels near the Strait of Hormuz. Brent crude futures climbed more than 3% to $109.07 per barrel, while US West Texas Intermediate (WTI) crude rose to $105.02 per barrel. Over the week, Brent crude advanced 7.72%, while WTI gained more than 10% amid concerns over the fragile ceasefire linked to the Iran conflict. Analysts said the reduction in local petroleum prices was mainly supported by adjustments in import costs and government pricing considerations despite continuing volatility in global oil markets.

Date: 2026-05-15

Details: Written by Shahnawaz Akhter Sarafa association seeks simplified turnover-based tax system for jewelry sector The All Pakistan Sarafa Gems and Jewelers Association has proposed a special tax regime for jewelers aimed at simplifying income tax payments and record-keeping procedures for the sector. President of the association, Qasim Shikarpuri, presented the proposed â€œSpecial Procedure for Income Tax 2026â€ for the jewelry industry. He said the government could introduce the regime under Section 99C of the Income Tax Ordinance, 2001, which empowers authorities to adopt special tax procedures for specific sectors. According to Shikarpuri, the objective of the proposed regime is to make the jewelry business simpler, more transparent, and financially stable. He said the proposed procedure would introduce a clear turnover-based tax system that would help jewelers avoid unnecessary complexities, excessive tax burdens, and administrative harassment. Under the proposed framework, separate final tax rates have been suggested for goldsmiths, retailers, manufacturers, and bullion dealers. The association also proposed allowing jewelers to submit simplified tax returns while maintaining stock declarations only in grams or tolas instead of financial value. Shikarpuri said fluctuations in international and local gold prices make valuation-based stock declarations difficult for the industry. The proposed regime further suggests that once tax payments are made under the special procedure, businesses should not face normal tax assessments or additional proceedings. The proposal also includes facilitation measures aimed at promoting banking channels and digital payments within the jewelry sector. According to the association, the simplified regime would help restore confidence among jewelers while supporting documentation of the economy, broadening the tax base, and improving trust between businesses and the government. Shikarpuri urged the government, the Federal Board of Revenue, and other relevant institutions to implement the proposed procedure to create a sustainable and business-friendly environment for jewelers across Pakistan.

Date: 2026-05-15

Details: Written by Shahnawaz Akhter EY Ford Rhodes partner calls for corporate tax reforms to improve investment climate Haider Ali Patel on Thursday urged the government to introduce a sunset clause in Section 4C of the Income Tax Ordinance, 2001, to define a clear end date for the levy of super tax in Pakistan. Speaking at a two-day seminar hosted by the Karachi Tax Bar Association, Patel said the super tax was disproportionately burdening sectors that were already contributing significantly to the tax system. He noted that the super tax, imposed at rates ranging from 4% to 10%, is charged in addition to corporate tax on documented sectors and is primarily borne by transparent, audited, and listed companies. Patel said the levy was introduced retrospectively through the Finance Act 2022 and largely affected the documented corporate sector. Although the Federal Constitutional Court upheld the tax, including its retrospective application, as legally valid, he argued that â€œlegal validity does not equal economic wisdom.â€ According to Patel, the super tax discourages investment by penalizing companies that create jobs, pay taxes, and maintain financial transparency. He warned that foreign investors remain cautious while domestic businesses hesitate to expand due to uncertainty surrounding additional taxation. Patel recommended that the government reassess the super tax based on affordability and its impact on Pakistanâ€™s investment climate rather than focusing solely on its legal status. Among other proposals, he suggested reducing the corporate tax rate to 25% to improve competitiveness with regional economies and remove disincentives for businesses to incorporate formally. He also advocated phasing out parallel taxation regimes by merging Section 113, Alternate Corporate Tax (ACT), and withholding tax-based minimum tax into a single transparent minimum tax system with low rates and carry-forward provisions. Patel further proposed targeted tax incentives for listed companies to encourage transparency and attract large private businesses to the capital market. Tax experts at the seminar said reforms aimed at simplifying the tax structure and lowering the burden on compliant sectors could help improve investor confidence and support economic growth.

Date: 2026-05-15

Details: Published May 15, 2026 Updated about 2 hours ago By Reuters NEW YORK: The S&P 500 and the Nasdaq touched fresh intraday record highs on Thursday, powered by Nvidiaâ€™s gains and another rally in technology shares, as investors assessed fresh economic data and a high-stakes US-China summit. Nvidia rose 3.9 percent, giving the chipmaker a market valuation of about USD5.7 trillion, after Reuters reported citing sources that the US has cleared about 10 Chinese firms to buy its second-most powerful AI chip, the H200. The gains fueled a weeks-long rally in technology stocks, especially chipmakers, that has helped drive Wall Street to repeated records despite lingering concerns over the Middle East conflict. â€œNvidia has clearly been a big beneficiary, both from the China announcement and from the broader artificial intelligence theme,â€ said Chris Zaccarelli, chief investment officer at Northlight Asset Management. â€œThe underlying AI theme and trend is real â€” we just think investors may be pulling a little too much forward from the future.â€ Meanwhile, Cisco soared 14.4 percent to an all-time high after the tech networking giant said it would cut nearly 4,000 jobs as part of a restructuring, and raised its annual revenue forecast after a surge in hyperscaler orders. US retail sales increased 0.5 percent in April, in line with estimates, but some of the rise in receipts was likely due to higher inflation as the war with Iran boosted prices of energy products and other commodities. Additionally, the number of Americans filing claims for unemployment benefits increased moderately last week, pointing to a stable labor market. At 12:08 p.m. ET, the Dow Jones Industrial Average rose 492.38 points, or 0.99 percent, to 50,185.58, the S&P 500 gained 71.35 points, or 0.96 percent, to 7,515.60 and the Nasdaq Composite gained 294.47 points, or 1.12 percent, to 26,696.82. The Dow was hovering near its all-time high. Seven of the eleven main S&P 500 sectors were in positive territory, with technology leading gains, rising 2.1 percent. Software shares, which have struggled this year, also advanced. The S&P 500 software index rose 1.4 percent, though it remained down 16.3 percent year-to-date. Financials gained 0.7 percent, with asset managers also moving higher. Apollo Global, Blackstone and Ares Management rose between 3.3 percent and 4 percent. Investors were also watching the US-China summit, where Chinese President Xi Jinping told President Donald Trump at the start of two days of talks that trade negotiations were making progress. Xi, however, warned that tensions over Taiwan could put relations on a dangerous path and even risk conflict.

Date: 2026-05-15

Details: Published May 15, 2026 Updated about 2 hours ago By Reuters BENGALURU: Most emerging Asian equity markets rose on Thursday as artificial intelligence-led optimism boosted sentiment, while currencies edged down against a firm dollar ahead of the much-anticipated US-China summit. MSCIâ€™s EM Asia equities gauge rose 0.8 percent, helped by a 1.8 percent gain in South Koreaâ€™s KOSPI and a 0.9 percent jump in Taiwan stocks. The two tech-heavy markets account for about 40 percent of the MSCI index. A sustained boom in artificial intelligence has lifted regional chipmakers, with Samsung Electronics surging more than 3 percent to a record high, while rival SK Hynix neared the USD1 trillion market capitalisation mark. â€œStrong performance among Asian AI/Semiconductors stocks has been providing support for the Asian equity markets,â€ said Poon Panichpibool, a market strategist at Krung Thai Bank, while warning that downside risks from stretched valuations remain. The ongoing high-stakes summit between US President Donald Trump and Chinaâ€™s Xi Jinping has yielded few surprises so far, with Xi saying that trade talks were making progress at the start of a two-day meeting. â€œI think the market players remain hopeful about the Trump-Xi summit which could de-escalate the Middle East conflict and further facilitate the US-Iran peace talk,â€ said Panichpibool, pointing to the broadly neutral to mildly bullish sentiment across Asian markets. While investors initially saw scope for economic gains, analysts doubt Beijing will pressure Tehran too hard or scale back strategic support for Iran, seen as a counterweight to the United States, leaving the geopolitical outlook uncertain. The summit also touched on Taiwan, with Xi warning disagreements could trigger regional conflict. Chinaâ€™s yuan, both onshore and offshore, rose to three-year highs against the dollar, while the Shanghai Composite index fell 1.5 percent. Philippine stocks climbed 1.2 percent, a day after gunshots erupted at the Senate. Jollibee Foods was among the top performers with a 3.7 percent rise, after losing nearly 17 percent over the last two sessions on declining profits, an uncertain outlook and its removal from MSCIâ€™s Philippine global standard index. Meanwhile, Bangkokâ€™s SET Index rose 1.1 percent for a second consecutive session, after the countryâ€™s finance minister indicated that economic growth could exceed 3 percent within the next one to two years. In currencies, the South Korean won heldat 1,488.32 a dollar, while the Malaysian ringgit and Taiwan dollar were little changed.

Date: 2026-05-15

Details: Published May 15, 2026 Updated 10 minutes ago By Recorder Report KARACHI: Ambassador of Vietnam to Pakistan Pham Anh Tuan has said that evolving geopolitical and trade dynamics in the region have created new opportunities for Pakistan, particularly for Karachi, which possesses the potential to rapidly emerge as a regional trade and logistics hub owing to the strategic importance of Karachi Port. Speaking during his visit to Karachi Chamber of Commerce & Industry (KCCI), Ambassador Pham Anh Tuan observed that disruptions in global supply chains due to ongoing tensions in the Middle East and the broader US-Israel-Iran conflict have compelled businesses worldwide to explore alternative trade and trans-shipment routes. In this scenario, Karachi Port could play a vital role in connecting regional markets, particularly the Middle East, through enhanced maritime and trans-shipment activities. The meeting was also attended by Head of Vietnam Trade Mission in Karachi Nguyen Thi Diep Ha, President KCCI Muhammad Rehan Hanif, Senior Vice President KCCI Muhammad Raza, Chairman Diplomatic Missions & Embassies Liaison Subcommittee Ahsan Arshad Sheikh and members of the KCCI Executive Committee. Ambassador Pham Anh Tuan stated that this was his second visit to Karachi and also his second interaction at KCCI, which reflected the importance attached by the Vietnamese Embassy to strengthening engagement with Pakistanâ€™s business community, particularly through KCCI which plays a pivotal role in promoting bilateral economic cooperation. Highlighting Vietnamâ€™s economic progress, the Ambassador noted that Vietnam remains one of Asiaâ€™s fastest-growing economies. He said that Pakistan and Vietnam enjoy longstanding friendly relations encompassing political, economic and cultural cooperation. Referring to bilateral trade, he noted that trade volume between the two countries stood at approximately USD850 million, which, despite remaining stable over recent years, still falls significantly short of its actual potential. The Ambassador further informed that both countries have initiated discussions on a Preferential Trade Agreement (PTA), which would substantially benefit the business communities of both sides. Under the proposed PTA framework, tariffs on more than 100 product lines are expected to be reduced to zero, thereby creating new avenues for bilateral trade expansion and industrial collaboration. He added that negotiations are progressing positively and both governments are actively pursuing the agreement. Emphasizing the need for stronger business-to-business interaction, Ambassador Pham Anh Tuan invited KCCI to send a high-powered trade delegation to Vietnam to explore investment opportunities, joint ventures and commercial partnerships. â€œLet us work together to further strengthen engagement between the business communities of both countries and take Pakistan-Vietnam relations to new heights through collective and collaborative efforts,â€ he added. Earlier, President KCCI Muhammad Rehan Hanif, while welcoming the Vietnamese delegation, stated that KCCI attaches immense importance to strengthening economic relations between Pakistan and Vietnam. He informed that KCCI, being the countryâ€™s largest chamber with over 30,000 direct members and representation from seven industrial zones of Karachi, serves as the principal voice of Pakistanâ€™s business and industrial community. Karachi contributes over 65 percent revenue to the national exchequer and accounts for more than 52 percent of Pakistanâ€™s exports, making it the countryâ€™s foremost industrial and commercial hub. He observed that Pakistan and Vietnam enjoy cordial bilateral relations founded on mutual respect, cooperation and shared aspirations for economic prosperity. However, despite encouraging progress in bilateral trade relations over the years, the existing trade volume remains far below the true potential available to both economies. He noted that Vietnam has emerged as a remarkable success story in Asia through rapid industrialization, export-led growth, manufacturing excellence and economic reforms, while Pakistan offers tremendous opportunities in textiles, agriculture, pharmaceuticals, leather products, sports goods, surgical instruments, information technology, food processing and several other sectors. President KCCI emphasized that enhanced interaction between the business communities of both countries could open new avenues for trade, investment, technology transfer, industrial collaboration and joint ventures. He appreciated the efforts of the Vietnam Trade Mission in facilitating closer business-to-business connectivity and reaffirmed KCCIâ€™s commitment to promoting stronger international trade relations and exploring new global markets for Pakistani businesses. Copyright Business Recorder, 2026

Date: 2026-05-15

Details: Published May 15, 2026 Updated 8 minutes ago By Recorder Report ISLAMABAD: Federal Minister for Commerce, Jam Kamal Khan, on Thursday held a detailed consultative meeting with representatives of Pakistanâ€™s leather industry to discuss export performance, competitiveness challenges, taxation pressures, market access issues, and reform proposals aimed at strengthening industrial growth and export potential. During the meeting, industry representatives highlighted that despite Pakistanâ€™s strong livestock base, well-established manufacturing expertise, and significant export capacity in leather garments, gloves, footwear, handbags, and other value-added products, the sector continues to face multiple structural constraints. They pointed out that high production costs, fragmented compliance requirements, and elevated taxation levels are undermining the industryâ€™s global competitiveness. The delegation expressed serious concerns over the cumulative burden of multiple inspections, approvals, certifications, and taxation imposed by federal, provincial, and municipal authorities. They stressed the need for a simplified and harmonized compliance framework, along with the introduction of a one-window taxation system to improve ease of doing business and reduce operational inefficiencies. Rising cost of doing business remained a key concern, with stakeholders highlighting difficulties in import financing and high duties on industrial raw materials. According to participants, these factors are adversely affecting export competitiveness and constraining the sectorâ€™s expansion in international markets. The industry also presented preliminary budget proposals, including tariff rationalization, reduction in duties on raw materials, and tax relief measures for export-oriented units. Participants emphasized that exporters require facilitation across the broader industrial ecosystem, including affordable access to inputs, improved financing facilities, enhanced market access, and greater regulatory efficiency. They further underscored the untapped export potential of Pakistanâ€™s leather sector, citing opportunities linked to the countryâ€™s large livestock base, value chain expansion, and deeper penetration into regional and global markets. Federal Minister Jam Kamal Khan acknowledged the concerns raised by stakeholders and stated that improving Pakistanâ€™s export competitiveness would require both immediate facilitation measures and long-term structural reforms in taxation, market access, financing, and industrial productivity. He reaffirmed the Ministry of Commerceâ€™s commitment to continued engagement with industry stakeholders to advance practical reforms and strengthen export-oriented manufacturing sectors. The meeting concluded with a consensus on sustained public-private collaboration to address sectoral bottlenecks and unlock the full export potential of Pakistanâ€™s leather industry. Copyright Business Recorder, 2026

Date: 2026-05-15

Details: Published May 15, 2026 Updated about 8 hours ago By Reuters HOUSTON: Oil prices gained more than 3% on Friday, climbing over $3 a barrel after comments from U.S. President Donald Trump and Iranâ€™s foreign minister further dented hopes of a deal to end ship attacks and seizures around the Strait of Hormuz. Brent crude futures gained $3.24, or 3.06%, to $108.96 a barrel by 10:49 a.m. CDT (1549 GMT). U.S. West Texas Intermediate futures were up $4.13, or 4.08%, at $105.03. Over the week, Brent has climbed 7.54% and WTI 9.7% on uncertainty over the shaky ceasefire in the Iran conflict. â€œThe tone between the U.S. and Iran has once again become significantly more confrontational. While the ceasefire holds, hopes for a swift reopening of the Strait of Hormuz have faded,â€ Commerzbank analysts said. Iran has â€œno trustâ€ in the U.S. and is only interested in negotiating with Washington if it is serious, foreign minister Abbas Araqchi said on Friday, adding that Iran is prepared to go back to fighting but also prepared for diplomatic solutions. Trump said he was running out of patience with Iran and that he had agreed with Chinese President Xi Jinping that Iran cannot be allowed to have a nuclear weapon and must reopen the Strait of Hormuz. President Xi did not comment on his discussions with Trump about Iran, though Chinaâ€™s foreign ministry issued a statement. â€œThis conflict, which should never have happened, has no reason to continue,â€ the ministry said. Among deals the market was looking for from the U.S.-China summit, Trump said China wants to buy oil from the United States. Trump also said he could lift sanctions on Chinese companies that buy Iranian oil. â€œMarket focus is back on the deadlock and a blockaded Strait of Hormuz, with a tail risk of renewed military escalation,â€ said Vandana Hari, founder of oil market analysis provider Vanda Insights. Iranâ€™s Revolutionary Guards said that 30 vessels had crossed the Strait of Hormuz between Wednesday evening and Thursday, still far short of the 140 a day that was typical before the war, but a substantial increase if confirmed. â€œAn increasing number of vessels are filtering through the Strait â€¦ although currently this has a more tangible impact on sentiment than on the actual oil balance,â€ said PVM analyst Tamas Varga. The straitâ€™s closure comes at a time when reserves are running thin. â€œThe world has consumed its oil safety net at a historic rate,â€ Phil Flynn, senior analyst with Price Futures Group, said in a note. â€œWhile strategic releases and demand reduction have prevented immediate chaos, the margin for error is shrinking rapidly. A prolonged closure of the Strait of Hormuz points toward tighter physical markets, potential refined product shortages, and upward pressure on prices in the coming weeks and months.â€ Shipping analytics firm Kpler said on Thursday that 10 ships had sailed through the strait in the past 24 hours, compared with the five to seven that have crossed daily in recent weeks. â€œCrude is trading higher on a combination of the Trump-Xi meeting doing little to bring us closer to a reopening of the Strait of Hormuz, and continued Ukrainian attacks on Russian refineries,â€ said Saxo Bank analyst Ole Hansen.

Date: 2026-05-14

Details: Written by Shahnawaz Akhter Government plans technology-driven tax reforms to curb evasion and improve transparency Islamabad: The Federal Board of Revenue (FBR) is planning to introduce an AI-based tax system through the upcoming Finance Bill 2026 to identify false information in tax returns and strengthen enforcement against tax evasion. The proposal was discussed during a high-level meeting in Islamabad chaired by Federal Minister for Economic Affairs Ahad Cheema to review tax enforcement measures for the federal budget 2026-27. The meeting was attended by Federal Minister for Climate Change Musadik Malik, Advisor to the Prime Minister on Industries and Production Haroon Akhtar Khan, Minister of State for Finance Bilal Azhar Kayani, FBR Chairman Rashid Mahmood Langrial, Attorney General for Pakistan Mansoor Usman Awan, and senior officials. AI-based monitoring system under consideration During the briefing, FBR officials presented several proposals aimed at reducing the tax gap, curbing underreporting, preventing under-invoicing, and controlling smuggling activities. Among the major proposals was the introduction of an AI-based tax system capable of detecting false declarations and suspicious transactions in tax returns through automated digital monitoring mechanisms. Officials said the proposed system would help strengthen oversight, minimize tax fraud, and improve documentation in the economy through technology-driven enforcement tools. E-auction system for confiscated goods proposed The meeting also discussed plans to introduce an electronic auction system for confiscated customs goods to improve transparency and efficiency in the disposal process. According to officials, the digital auction mechanism would reduce manual intervention and enhance accountability within customs operations. Government seeks business-friendly reforms Federal Minister Ahad Cheema emphasized that the government intends to implement tax reforms while maintaining a business-friendly environment and supporting economic growth. He stated that the government supports a tax administration framework with minimum human interaction to improve transparency and reduce opportunities for corruption and discretionary practices. â€œAll reforms should be practical, technology-oriented and capable of delivering effective results,â€ the minister said during the meeting. Focus on digital transformation of tax administration Participants agreed that digitally automated systems and technology-based solutions are essential for modernizing Pakistanâ€™s tax administration system. The government reiterated its commitment to: â€¢ Broadening the tax base â€¢ Improving revenue collection â€¢ Enhancing transparency â€¢ Reducing tax evasion â€¢ Promoting sustainable economic growth The proposed AI-based tax system is expected to become one of the major reform initiatives under the Finance Bill 2026 as Pakistan moves toward digital tax enforcement and automated compliance monitoring.

Date: 2026-05-14

Details: Written by Shahnawaz Akhter Pakistanâ€™s tax collection rises to Rs9.31 trillion but tax-to-GDP ratio declines ISLAMABAD â€“ The tax-to-GDP ratio based on revenue collection by the Federal Board of Revenue (FBR) declined during the first nine months of fiscal year 2025-26 despite a 10% increase in overall tax collection. According to data released by the finance ministry, the FBR tax-to-GDP ratio slipped to 7.19% in 9MFY26 compared to 7.62% recorded during the corresponding period of the previous fiscal year. FBR collects Rs9.31 trillion in 9MFY26 The FBR collected Rs9.31 trillion during July-March FY26, compared to Rs8.45 trillion collected during the same period of FY25. The figures reflect an increase of around 10% in tax revenues on a year-on-year basis. However, the decline in the tax-to-GDP ratio indicates that economic expansion outpaced the growth in tax collection during the period under review. GDP expansion lowers tax ratio According to the official figures, Pakistanâ€™s GDP size was estimated at Rs129.57 trillion in 9MFY26 compared to Rs114.69 trillion in 9MFY25. Although tax revenues increased significantly, the larger expansion in GDP resulted in a lower ratio of tax collection relative to the size of the economy. Economists often view the tax-to-GDP ratio as a key indicator of a countryâ€™s fiscal capacity and efficiency in revenue mobilization. Direct taxes record strong growth The FBRâ€™s collection of direct taxes increased to Rs4.64 trillion during the first nine months of FY26 compared to Rs4.13 trillion in the same period of the previous fiscal year. The increase reflects higher income tax collection and improved enforcement measures implemented by tax authorities. Indirect tax collection also rises Meanwhile, indirect tax collection rose to Rs4.67 trillion in 9MFY26 compared to Rs4.32 trillion recorded a year earlier. Indirect taxes include sales tax, customs duties and federal excise duties, which continue to contribute significantly to Pakistanâ€™s overall revenue structure. Challenges remain for tax reforms Despite the growth in overall revenue collection, the decline in the tax-to-GDP ratio highlights ongoing structural challenges in Pakistanâ€™s taxation system, including narrow tax base, undocumented economic activity and limited compliance levels. The government and international financial institutions, including the International Monetary Fund (IMF), have repeatedly emphasized the need for broad-based tax reforms to improve revenue generation and strengthen fiscal sustainability. Analysts say improving the tax-to-GDP ratio remains critical for reducing Pakistanâ€™s reliance on borrowing and supporting long-term macroeconomic stability.

Date: 2026-05-14

Details: Published May 14, 2026 Updated about 2 hours ago NEW YORK: The S&P 500 hovered near its record highs on Wednesday as chip stocks and megacap tech shares rose, even though hot producer prices data reinforced bets that the Federal Reserve would keep monetary policy restrictive. Alphabet and Tesla climbed 2.6 percent and 3.6 percent, respectively. The Philadelphia SE Semiconductor index was last up 2.3 percent and testing a new record high, bouncing back from a selloff in the previous session. US producer prices increased more than expected in April, posting their biggest gain since early 2022, the latest indication that inflation was accelerating amid the war with Iran. The data comes a day after US consumer inflation posted the sharpest increase in three years in April and knocked the S&P 500 and the Nasdaq from their record highs. â€œFrankly, inflation pressures were already percolating before the Iran conflict, and while much of the damage can be undone if we get a quick resolution, todayâ€™s PPI print is a reminder of the level and intensity of the coming price pressures at the consumer level,â€ said Steve Wyett, chief investment strategist at BOK Financial. Traders now expect the Fed to stay on hold all through the year and a 34.3 percent chance of a rate hike by December, compared with an around 15 percent chance seen a week ago, according to the CME FedWatch Tool. Markets are expecting a potentially more hawkish central bank under Kevin Warsh, whom the Senate confirmed to the board on Tuesday and could move to approve as chair as soon as Wednesday. Jerome Powellâ€™s term ends on Friday. Meanwhile, President Donald Trump landed in Beijing accompanied by an entourage that included Nvidiaâ€™s Jensen Huang and Elon Musk, after pledging to urge Chinaâ€™s Xi Jinping to â€œopen upâ€ to US business at the start of their two-day summit. Trump had said ahead of the high-stakes summit that he did not expect to ask Xi to help resolve the conflict with Tehran. Wall Street has been wary that a prolonged conflict could keep energy prices elevated, adding to inflationary pressures and complicating the US Federal Reserveâ€™s policy decisions.

Date: 2026-05-14

Details: Published May 14, 2026 Updated about 2 hours ago LONDON: OPEC on Wednesday lowered its forecast for global oil demand growth in 2026, joining other forecasters such as the International Energy Agency in cutting expectations due to the Iran war. The producer group sees a smaller hit to demand than the IEA, which earlier on Wednesday increased its estimate of the decline in oil use this year. OPEC said consumption would rebound later and raised its demand growth forecast for 2027. The war has effectively closed the Strait of Hormuz, a key global oil route, curbing millions of barrels of Middle East output and sending fuel prices soaring. The surge is hitting consumers and businesses, and prompting government steps to conserve supplies. READ MORE: OPEC oil output hits new low in April on Hormuz export disruption, Reuters survey finds World oil demand will rise by 1.17 million barrels per day in 2026, OPEC said, down from 1.38 million bpd expected previously. For 2027, OPEC expects oil demand to rise by 1.54 million bpd, up 200,000 bpd from the previous forecast. â€œThe global economic growth continues to show resilience for this year despite geopolitical tensions, particularly in the Middle East,â€ OPEC said, leaving its economic growth forecasts unchanged. Global oil demand is expected to average 104.57 million bpd in the second quarter, down from the 105.07 million bpd forecast last month, OPEC said. The previous report had already cut the second-quarter estimate by 500,000 bpd. OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies such as Russia, had agreed to resume output increases from April, but the closure of Hormuz has made it impossible to deliver on the deal. The report said output fell further in April. OPEC+ crude output averaged 33.19 million bpd in April, down 1.74 million bpd from March, the report said, citing secondary sources OPEC uses to monitor its production. The April figure includes the United Arab Emirates, which left OPEC on May 1.

Date: 2026-05-14

Details: Published May 14, 2026 Updated about 2 hours ago HOUSTON: Oil prices settled lower on Wednesday as investors worried about possible US interest rate hikes and awaited updates on a high-stakes summit in Beijing between US President Donald Trump and Chinaâ€™s Xi Jinping. Brent crude futures closed down USD2.14, or 2 percent, to USD105.63 a barrel. US West Texas Intermediate futures fell USD1.16, or 1.14 percent, to USD101.02. Boston Federal Reserve President Susan Collins said on Wednesday the US central bank may need to raise interest rates if inflation pressures do not abate, a sign that the war has begun to weigh on the US economy. Higher oil prices have pushed up fuel costs and economists expect to see effects in the months ahead. US producer prices in April posted their biggest increase in four years, boosted by soaring costs for goods and services, the latest sign of accelerating inflation during the war with Iran. In April, US consumer prices rose sharply for a second straight month, producing the largest annual increase in inflation in nearly three years. Higher interest rates increase borrowing costs for businesses and consumers, which could slow economic growth and reduce oil demand. Trump landed in Beijing on Wednesday, a day after saying he did not think he would need Chinaâ€™s help to end the war, even as prospects for a lasting peace deal weakened and Tehran tightened its grip over the Strait of Hormuz. China is the biggest buyer of Iranian oil despite sanctions pressure from the Trump administration. Trump is scheduled to meet Xi on Thursday and Friday. â€œThere is likely to be some structural tightness (in the oil market) for at least the balance of this year,â€ said Rystad analyst Janiv Shah. OPEC on Wednesday lowered its forecast for world oil demand growth in 2026. The International Energy Agency said global oil supply would not meet total demand this year as the war wreaks havoc on Middle East production. US crude stocks fell by 4.3 million barrels last week, compared with analystsâ€™ expectations in a Reuters poll for a 2.1-million-barrel draw, the US Energy Information Administration said. Gasoline stocks fell by 4.1 million barrels in the week, compared with analystsâ€™ expectations in a Reuters poll for a 2.9-million-barrel draw. Distillate stockpiles, which include diesel and heating oil, rose by 0.2 million barrels versus expectations for a 2.7-million-barrel drop. The data briefly boosted oil futures. On Tuesday, oil prices rose more than 3 percent as hopes for a lasting US-Iran ceasefire faded, dimming prospects for reopening the Strait of Hormuz. Iranâ€™s Foreign Minister Abbas Araqchi said on Wednesday that Kuwait had â€œunlawfullyâ€ attacked an Iranian boat and detained four Iranian citizens in the Gulf. He added that Tehran demands their release and reserves the right to respond.

Date: 2026-05-14

Details: Published May 14, 2026 Updated about 2 hours ago NEW YORK: US natural gas futures climbed about 3percent to a six-week high on Wednesday on forecasts for more demand than previously expected and a continued decline in output in recent days. Front-month gas futures for June delivery on the New York Mercantile Exchange rose 8.1 cents, or 2.8percent, to USD2.924 per million British thermal units (mmBtu), putting the contract on track for its highest close since March 27. In the cash market, average gas prices at the Waha Hub in West Texas have remained in negative territory for a record 68 days in a row as pipeline constraints trap gas in the Permian region, the nationâ€™s biggest oil-producing shale basin. In the West, mild weather and ample hydropower supplies cut next-day power prices at the Mid Columbia hub in Oregon to their lowest since June 2022 and pushed spot power at South Path 15 in Southern California into negative territory for a ninth time so far this year. LSEG said average gas output in the US Lower 48 states slid to 109.3 billion cubic feet per day (bcfd) so far in May, down from 109.8 bcfd in April and a monthly record high of 110.6 bcfd in December 2025. On a daily basis, output was on track to drop by 3.8 bcfd over the past four days to a preliminary 15-week low of 106.4 bcfd on Wednesday due mostly to declines in Texas and Louisiana. Preliminary data is often revised later in the day. Output has fallen in recent weeks as low spot prices caused some energy firms, like EQT, the second-largest US gas producer, to reduce production as they wait for prices to rise in the future. Analysts said mild weather earlier this spring allowed energy firms to inject more gas into storage than usual so far this year. But, they noted, recent output declines coupled with higher demand from near-normal weather likely reduced the inventory surplus to around 6percent above normal during the week ended May 7, down from 7percent above during the week ended May 1. Meteorologists forecast the weather will remain mostly near normal through May 28. LSEG projected average gas demand in the Lower 48 states, including exports, would hold around 98.9 bcfd this week and next. Those forecasts were higher than LSEGâ€™s outlook on Tuesday. Average gas flows to the nine big US LNG export plants fell from a monthly record high of 18.8 bcfd in April to 17.2 bcfd so far in May due in part to maintenance at several plants, including Freeport LNG in Texas and Cameron LNG in Louisiana.

Date: 2026-05-13

Details: Federal Board of Revenue on Tuesday issued fresh import values for solar panels for the assessment of customs duty and taxes on imported consignments. The new values were notified by the Directorate General of Customs Valuation through Valuation Ruling No. 2077/2026 under Section 25A of the Customs Act, 1969. According to the ruling, the revised valuation replaces Valuation Ruling No. 2012/2025 issued on July 18, 2025. International price increase prompts revision Customs authorities said the previous valuation had become outdated due to a significant increase in international solar panel prices over the past year. The FBR stated that officials conducted a detailed analysis of import data, declared values, assessed values and prevailing international market prices before revising the customs values. Authorities also held a meeting with stakeholders on April 27, 2026 to gather feedback and documentary evidence regarding current market conditions. New customs values for imported solar panels Under the revised ruling, the customs values for solar panels have been fixed as follows: â€¢ Solar Panels from Tier-I manufacturers: US$0.105 per watt â€¢ Solar Panels from manufacturers other than Tier-I: US$0.095 per watt The ruling applies to imports under PCT Code 8541.4300 from all origins. Tier-I manufacturers list specified The FBR clarified that the higher customs value of US$0.105 per watt will apply to imports from Tier-I manufacturers listed in Bloomberg NEFâ€™s Global PV Market Outlook for the first quarter of 2026 and fourth quarter of 2025. The list includes major global solar brands such as: â€¢ Jinko Solar â€¢ LONGi â€¢ Trina Solar â€¢ JA Solar â€¢ Canadian Solar Lower assessment for SKD imports The valuation ruling further stated that solar panels imported in semi knocked down (SKD) condition will be assessed at 12.5 percent lower than the notified customs values. The FBR also clarified that where declared invoice values are higher than the notified customs values, customs duty and taxes will be charged on the higher declared amount. Officials said the revised valuation aims to ensure more accurate assessment of imported solar products in line with prevailing international market prices.

Date: 2026-05-13

Details: Published May 13, 2026 Updated about 2 hours ago NEW YORK: The S&P 500 and the Nasdaq pulled back from record highs on Tuesday, with technology stocks leading declines, after a hotter-than-expected inflation report and stalled efforts to resolve the Middle East conflict weighed on sentiment. US consumer prices rose at a brisk pace for a second straight month in April, pushing annual inflation to its highest level in nearly three years and reinforcing expectations that the Federal Reserve will keep interest rates unchanged for longer. While a strong earnings season has helped underpin market sentiment in recent weeks, investors remained on edge as negotiations between Washington and Tehran have shown little sign of progress. President Donald Trump said a ceasefire with Iran was â€œon life supportâ€ after Tehran rejected a US proposal to end the conflict, keeping crude prices elevated and fuelling inflation worries. â€œThe market is now looking at the Fed and saying the next move, if there is one, it might be a hike, not a cut. And that certainly would be a change of framework for the markets,â€ said Scott Welch, chief investment officer of Certuity. Ahead of the war, traders had expected two rate cuts, per CME Groupâ€™s FedWatch Tool, but currently expect the Federal Reserve to keep interest rates steady through the end of the year. At 12:30 p.m. ET, the Dow Jones Industrial Average fell 177.42 points, or 0.36percent, to 49,527.05, the S&P 500 lost 65.48 points, or 0.88percent, to 7,347.36 and the Nasdaq Composite lost 448.73 points, or 1.71percent, to 25,825.79. Technology stocks were a big drag on the markets on Tuesday, with chip stocks that have skyrocketed in recent days falling sharply. The Philadelphia SE Semiconductor index tumbled almost 6percent but still remained up about 50percent so far this quarter. The sector was also knocked by news that South Koreaâ€™s presidential policy adviser Kim Yong-beom floated an idea of â€œcitizens dividendâ€, as he argued in a social media post that excess earnings in the era of AI should be redistributed to all citizens. â€œThereâ€™s been such a remarkable rally in the semiconductor and mega cap tech stocks over the last several weeks, that I think investors are starting to take some profits,â€ Welch added. Intel tumbled 9.7percent after climbing more than 17percent over the previous two sessions, while Qualcomm dropped 13.7percent after hitting a record high on Monday. Looking ahead, markets are keeping a close eye on Trumpâ€™s visit to China, which begins on Wednesday, with expectations low for progress on Iran or on the trade front. Among other movers, Zebra Technologies jumped 16.8percent after the barcode scanner maker raised its annual sales growth forecast, betting on robust demand for its products that help automate manufacturing workflows.

Date: 2026-05-13

Details: Published May 13, 2026 Updated about an hour ago ISLAMABAD: The All Pakistan Textile Mills Association (APTMA) has urged the Punjab government to withdraw the Punjab Infrastructure Development Cess (Amendment) Bill 2026, calling for a complete review of the levy mechanism in consultation with industrial stakeholders. In a letter addressed to Chief Minister Maryam Nawaz Sharif, APTMA Chairman Kamran Arshad expressed â€œdeep concerns and reservationsâ€ over the bill passed by the Punjab Assembly on May 6, 2026, stating that it has triggered shock, dismay, and distress across the business community in the province. APTMA noted that the bill imposes a cess on â€œall goods manufactured, produced, consumed, imported into Punjab or exported out of Punjab at the rate of 0.90 percent of the total value of such goods.â€ It warned that the levy would significantly increase costs for industries in Punjab, particularly the export-oriented textile sector. The Association emphasized that textile exporters operate in highly competitive international markets with thin margins, where prices are largely dictated by global buyers. The imposition of a 0.90 percent cess at multiple stages â€” import, manufacturing, consumption, and export â€” would erode competitiveness and potentially push exporters out of global markets, as the additional cost cannot be passed on to international customers. â€œThis will not only weaken the competitiveness of exports originating from Punjab but may ultimately lead to the closure of industrial units,â€ the letter stated. APTMA further criticized what it termed â€œunbridled enforcement powersâ€ granted to cess officers, warning that these provisions could create fear and uncertainty within the business community. â€œTo add insult to injury, excessive enforcement powers have been vested in cess officers, creating panic among trade and industry,â€ Arshad said, adding that provisions related to the establishment of pickets, check posts, monitoring stations, electronic surveillance, and penalties of up to ten times the cess amount could obstruct the free movement of goods and expose businesses to harassment and bureaucratic high-handedness. The Association also highlighted a disparity between Punjab- and Sindh-based industries, stating that Punjabâ€™s industrial units would effectively face double taxation. While Punjab-based businesses would have to pay cess in both Punjab and Sindh â€” since most import and export consignments pass through Sindh â€” industries located in Sindh would pay the cess only once. â€œThis creates an unequal cost structure and places Punjab-based industry at a significant competitive disadvantage,â€ APTMA maintained. It further pointed out that Punjab has already experienced considerable deindustrialization due to high energy costs and an unfavourable business environment. The new cess, it warned, would further increase the cost of doing business, discourage industrial expansion, and deter investment, particularly in export-oriented sectors. â€œAt a time when Punjab needs to expand its industrial base and boost exports, such measures will increase production costs and undermine competitiveness,â€ the association added. In view of these concerns, APTMA has called for the immediate withdrawal of the bill and urged the government to revisit the cess framework through meaningful consultation with industry stakeholders to ensure that policy measures do not hinder industrial growth, exports, and investment. Copyright Business Recorder, 2026

Date: 2026-05-13

Details: Published May 13, 2026 Updated about 2 hours ago LAHORE: The Pakistan Cotton Ginners Association (PCGA) and the Pakistan Cotton Brokers Association have jointly opposed the proposed conversion of land belonging to the Central Cotton Research Institute (CCRI), Multan, into a Gymkhana Club, warning that such a move would seriously damage Pakistanâ€™s already fragile cotton research and development framework. In separate appeals to the government, both organizations stressed that CCRI Multan is a historic and specialized institution of national importance that has played a pivotal role in the countryâ€™s cotton sector for more than five decades. PCGA Chairman Sham Lal Manglani urged the Punjab chief minister to immediately cancel the proposed project and declare the land of CCRI Multan a â€œNational Agricultural Research Heritage Site.â€ He said the institute has remained Pakistanâ€™s central cotton research facility since 1970 and has developed over 40 high-quality cotton varieties, many of which are still widely cultivated by farmers. He said CCRI houses Pakistanâ€™s largest cotton gene pool, preserving more than 6,200 germplasm accessions collected from 41 countries, describing it as a valuable national asset for the countryâ€™s agricultural and economic security. He added that the instituteâ€™s experimental fields, laboratories, and integrated research system are interconnected and cannot be relocated or replaced. Manglani said CCRI Multan had played a crucial role in the countryâ€™s bumper cotton crops during 1991-92, 2004-05, and 2014-15, while also representing Pakistan at international forums, including the International Cotton Advisory Committee (ICAC). He warned that further weakening of the institute could force farmers to abandon cotton cultivation, adversely impacting edible oil, livestock feed, milk, meat production, and the broader rural economy. The PCGA demanded immediate cancellation of the proposed Gymkhana Club project, declaration of CCRI as a National Agricultural Research Heritage Site, and release of a special grant of Rs2 billion for revival of the institute and clearance of its liabilities. Meanwhile, Pakistan Cotton Brokers Association Chairman Rana Muhammad Shafqat, in a letter addressed to Prime Minister Muhammad Nawaz Sharif, said the justification that other institutions could substitute the role of CCRI was inconsistent with scientific realities and ground conditions. He stated that CCRI Multan possesses decades of uninterrupted research experience, a rich germplasm repository, and a proven record of developing successful cotton varieties. He maintained that the instituteâ€™s dedicated focus on cotton research could not be effectively replaced by general agricultural universities or relatively new institutions with limited achievements in the field. The association highlighted that despite severe financial and resource constraints, institutions operating under the Pakistan Central Cotton Committee had continued to deliver meaningful results, including cotton varieties such as Sitara-547 and CRIS-682, which gained widespread farmer acceptance and contributed positively to recent cotton seasons. Both organizations emphasized that while alternative sites could be identified for a Gymkhana Club in Multan, it would be impossible to relocate decades of cotton genetic research, rare germplasm resources, and the countryâ€™s integrated cotton research infrastructure. Copyright Business Recorder, 2026

Date: 2026-05-13

Details: Published May 13, 2026 Updated about 2 hours ago KARACHI: Millat Tractors Limited (MTL), one of Pakistanâ€™s leading tractor manufacturers, has announced plans to enter the countryâ€™s emerging electric mobility sector through a strategic partnership with a Chinese electric bike manufacturer, marking a significant diversification move beyond its traditional agricultural machinery business. In a material information disclosure submitted to the Pakistan Stock Exchange (PSX) and the Securities and Exchange Commission of Pakistan (SECP), the company said a subsidiary of Millat Tractors had signed a Memorandum of Understanding (MoU) with a leading Chinese electric bikes (E-Bikes) manufacturer for the assembly, manufacturing and marketing of electric bikes in Pakistan. The development signals Millat Groupâ€™s formal entry into Pakistanâ€™s fast-evolving electric vehicle (EV) market, as the country moves toward cleaner and more energy-efficient transportation under the governmentâ€™s recently introduced electric vehicle policy framework. According to the company, the collaboration is aimed at establishing local capabilities for the assembly and manufacturing of electric bikes, while also developing a nationwide marketing network to cater to growing consumer demand for affordable and environmentally sustainable transport solutions. Analysts said the agreement is aligned with the Government of Pakistanâ€™s National Electric Vehicle (EV) Policy 2025-30, which seeks to accelerate adoption of electric mobility, reduce reliance on imported fossil fuels, and lower carbon emissions in the transport sector. The company noted that the memorandum marks an important milestone in expanding the groupâ€™s product portfolio beyond agricultural equipment and into new mobility technologies, positioning it to capitalize on emerging opportunities in Pakistanâ€™s transportation market. Industry experts say the move comes at a time when Pakistanâ€™s two-wheeler market is witnessing increasing interest in electric alternatives due to high fuel prices, rising urban commuting costs, and growing policy incentives aimed at promoting green transportation. Electric motorcycles and scooters are increasingly being viewed as a cost-effective mobility solution, particularly for urban consumers and delivery services. Millat Tractors Limited, a key player in Pakistanâ€™s farm machinery industry, is widely known for manufacturing tractors and agricultural equipment, and its expansion into electric bikes marks one of the most significant strategic shifts in its business model in recent years. Copyright Business Recorder, 2026

Date: 2026-05-12

Details: Published May 12, 2026 Updated about 2 hours ago By Recorder Report KARACHI: The Banking Mohtasib Pakistan (BMP) has provided relief of over Rs 1.87 billion to the banking customers by disposing of 36, 280 complaints against commercial banks during the calendar year 2025. The relief provided in 2025 is 13 percent higher than previous year )2024), in which the monetary relief amounting to Rs 1.65 billion was provided by resolving 27,753 complaints. According to the Banking Mohtasibâ€™s Annual Report for the year 2025, released on Monday, out of 36,280 complaints disposed of during the year, 32,002 complaints were resolved amicably through reconciliation, while 1,973 complaints were decided after a record 2,206 formal hearings held at various centers of the country. In compliance with the legal requirement, the Banking Mohtasib Sirajuddin Aziz has already presented the Annual Report 2025 to the Governor, State Bank of Pakistan, Jameel Ahmad. At least 2,305 complaints were disposed of or rejected being incomplete, frivolous or due to lack of jurisdiction of Banking Mohtasib. During the year under review, 35, 130 complaints were received, while 13, 793 complaints were brought forward from the previous year, according to the Annual Report. Complaints relating to the banking sector received through the Prime Ministerâ€™s Portal totaled 7,342 during 2025, compared to 7,193 complaints received in 2024, reflecting a 2 percent increase, while 27,788 complaints were lodged directly with the BMP Office during 2025, showing an increase of 18 percent compared to 23,409 complaints received in the preceding year. According to the Annual Report, there was an overall increase of 15 percent in the total number of complaints received during the year 2025 as compared to 2024. However, a significant improvement 31 percent increase was observed in the disposal of complaints, as pendency of cases was reduced by 8 percent. There was a massive surge of complaints during the year 2025 due to increasing use of digital and electronic platforms as well as the growth in Mobile and Digital applications. According to the breakdown of major complaints, there has been a significant rise in cases related to internet banking, IBFT, e-commerce, mobile apps and digital banking, which increased to 5,345 in 2025 from 4,535 in 2024. Complaints related to fraud also climbed to 4,615 in 2025, compared to 4,171 in 2024. Meanwhile, complaints regarding blockage or dormancy of accounts surged to 4,766 in 2025 from 3,208 a year earlier. Complaints about service inefficiency and delays also rose notably to 3,596 in 2025, up from 2,673 in 2024. On the other hand, complaints related to consumer products, including credit and debit cards as well as personal, auto and agricultural loans, declined to 2,315 in 2025 from 2,871 in 2024. Similarly, complaints pertaining to ATMs also decreased to 1,839 in 2025, compared to 2,144 recorded in 2024. With a view to protecting people from fraudulent activities, which are rampant now a days, the Banking Mohtasib Pakistan, Sirajuddin Aziz emphasized upon the banking customers not to disclose their personal and financial credentials to any third person. On receipt of suspicious calls, they should immediately approach the nearest branch of their bank or contact the Helpline of the bank. Copyright Business Recorder, 2026

Date: 2026-05-12

Details: Published May 12, 2026 Updated about 2 hours ago By Reuters HOUSTON: Oil prices settled almost 3 percent higher on Monday after US President Donald Trump said the ceasefire with Iran was â€œon life support,â€ leaving the Strait of Hormuz largely closed with no clear end in sight to the war. Brent crude futures settled up USD2.92, or 2.88 percent, at USD104.21 a barrel. US West Texas Intermediate settled at USD98.07 a barrel, up USD2.65, or 2.78 percent. Brent reached a session high of USD105.99 and WTI hit a peak of USD100.37. Last week, both benchmarks recorded 6 percent weekly losses on hopes for an imminent end to the 10-week-old conflict that would allow oil to transit through the Strait of Hormuz. But on Monday, Trump said the ceasefire with Iran was â€œon life support,â€ after dismissing Tehranâ€™s response to a US peace proposal as â€œstupid.â€ Days after Washington floated a proposal aimed at reopening negotiations, Iran on Sunday released a response focused on ending the war on all fronts, including Lebanon, where US ally Israel is fighting Iran-backed Hezbollah militants. Tehran also demanded compensation for war damage, emphasized its sovereignty over the strait, and called on the US to end its naval blockade, guarantee no further attacks, lift sanctions and remove a ban on Iranian oil sales. Within hours, Trump dismissed Tehranâ€™s offer in a social media post as â€œtotally unacceptable.â€ â€œThe narrative has changed again from de-escalatory to escalatory in a matter of a few days and oil markets respond to it - although only modestly,â€ said Florence Schmit, an energy strategist at Rabobank. Trump to meet with Xi this week in Beijing Trump is scheduled to arrive in Beijing on Wednesday and is expected to discuss Iran among other topics with Chinese President Xi Jinping, according to US officials. â€œI donâ€™t think anyone is looking for the US to up the ante anytime in the balance of the week as long as this China, Trump meeting is going on,â€ said Bob Yawger, director of energy futures at Mizuho. The world has lost about 1 billion barrels of oil over the past two months and energy markets will take time to stabilize even if flows resume, Saudi Aramco CEO Amin Nasser said on Sunday. Saudi Arabian crude oil exports to China are expected to fall further in June after buyers cut nominations because of costly prices linked to the US-Iran conflict and lower supplies, trade sources told REUTERS. OPEC oil output dropped further in April to the lowest in more than two decades, a REUTERS survey found, as the war effectively closed the strait and forced export cuts. Crude output by the 12-member Organization of the Petroleum Exporting Countries in April fell by 830,000 barrels per day month-on-month to 20.04 million bpd, the survey found. Marchâ€™s figure was revised 700,000 bpd lower due to a change in the Saudi estimate.

Date: 2026-05-11

Details: Published May 11, 2026 Updated about an hour ago KARACHI: Pakistanâ€™s cotton market is currently experiencing a sharp upward pressure on prices, influenced by fluctuations in quality standards and prevailing payment conditions. Market experts warn that available cotton stocks have reached critically low levels, creating a severe imbalance between supply and demand that continues to destabilise the market. Forward trading activity for the new crop has begun to gain momentum, with partial deals for early-arriving cotton now being finalized. The forward contract price for deliveries scheduled between May 20 and May 30 has been settled at Rs. 21,750 per maund, while seed cotton is trading at Rs. 10,000 per forty kilograms. Cotton farmers across the country are in a state of growing distress as production continues its prolonged downward spiral. Adding to their concerns is the rapid encroachment of sugar mills into areas that have historically been the heartland of cotton cultivation. Experts warn that this trend will cause irreversible damage to an already struggling crop. Fields that once bore the countryâ€™s prized white gold now stand occupied by sugarcane plantations, raising urgent questions not just about agricultural choices but about the direction of the nationâ€™s economic priorities. Rana Shafqat, Chairman of the Pakistan Cotton Brokers Association, threw his full weight behind APTMAâ€™s position on the matter. â€œAPTMAâ€™s demands are completely justified and we stand firmly with them,â€ he said, adding that the revival of cotton is inseparable from the broader economic revival of Pakistan itself. APTMA Chairman Kamran Arshad has formally called upon Federal Minister Rana Tanvir Hussain to ensure immediate implementation of decisions that were already approved by the Cabinet Committee for cotton sector restoration. Arshad cautioned that prolonged negligence and administrative delays are inflicting measurable harm on the national economy and that the situation has reached a point where further inaction is no longer acceptable. The contrast with regional competitor India could not be more striking. The Indian Cabinet has approved an allocation of Rs. 5,669 crore specifically aimed at boosting domestic cotton production. Separately, it has earmarked Rs. 1,768.56 crore for the Cotton Corporation of India to purchase cotton directly from farmers at the government-mandated minimum support price, offering them a vital financial safety net. Pakistan, by comparison, has yet to move beyond promises. While India backs its cotton farmers with billions in state funding, Pakistan continues to allow sugar mills to be established on land traditionally reserved for cotton, a move widely seen as a betrayal of the sector and a serious threat to the countryâ€™s long-term economic stability. The local cotton market recorded an overall bullish trend during the past week as stocks continued to remain scarce. Early arrivals of the new crop are expected from June, though initial prices are likely to be on the higher side. Cotton is currently trading between Rs 19,500 and Rs 23,000 per maund, depending on quality and payment conditions. Future contracts for new crop cotton have been settled at Rs 21,750 per maund, while 40-kilogram Phutti has been sold at Rs 10,000 with deliveries scheduled between May 20 and 30. On the policy front, recommendations have been forwarded to the government for the upcoming budget, urging a reduction and elimination of taxes on the cotton sector. APTMA has also submitted its budget proposals, and industry stakeholders expect the Karachi Cotton Association to follow suit with its own annual recommendations, as has been the tradition in previous years. Cotton growers and trade participants have long been voicing alarm over the unrelenting decline in cotton production. A growing concern is the rapid installation of sugar mills in traditional cotton-growing regions, which is progressively squeezing out cotton cultivation. What was once Pakistanâ€™s white gold is now being described as a crop increasingly alienated from its own land. Fields that once shimmered with cotton are today carpeted with sugarcane. Industry voices are clear that this is not simply an agricultural shift but a question of national priorities. Cotton, they stress, sustains an entire ecosystem of livelihoods, binding together farmers, ginners, textile manufacturers, and exporters into a chain that supports millions of workers. Sugarcane, by contrast, is widely regarded as an industry concentrated in the hands of a powerful few, with its economic benefits rarely trickling down to those at the grassroots. When policymakers allow powerful interests to dictate agricultural direction, it is the smallholder farmer who ultimately pays the price, not just with a lost harvest but with a diminished future. Should white gold vanish from Pakistani fields, the loss would extend far beyond agriculture, taking with it an economy, a national identity, and the aspirations of countless families. The crisis is further deepened by an excessive tax burden on the textile sector and energy costs that remain the highest in the region. These compounding pressures have forced textile mills into closure at an alarming rate over recent years. According to APTMA, more than 150 textile mills across the country have already shut down, while several others are barely managing to survive under acute financial distress. Adding to the industryâ€™s woes, the Evacuee Trust Property Board has been in occupation of the Cotton Exchange Building since December 12, 2025, having taken control with the assistance of the FIA. The occupation has rendered it impossible to issue the daily cotton spot rate, a publication that serves as a vital reference point for the entire trade. Cotton availability in both Sindh and Punjab remains extremely thin, with prices continuing to hover between Rs 19,500 and Rs 23,000 per maund, subject to quality and prevailing payment terms. International cotton prices continued their upward trajectory, with New York cotton futures hovering between 82 and 85 US cents per pound, according to Naseem Usman, Chairman of the Karachi Cotton Brokers Forum. The USDAâ€™s weekly export and sales report revealed that 123,300 bales were sold for the 2025-26 marketing year, with Pakistan emerging as the top buyer, securing 38,800 bales. India followed in second place with purchases of 27,200 bales, while Vietnam rounded out the top three with 18,800 bales. For the upcoming 2026-27 marketing year, sales reached 48,400 bales. Guatemala led the pack by purchasing 35,200 bales, with Indonesia ranking second at 19,000 bales and Vietnam placing third with 5,800 bales. On the shipments front, total exports amounted to 327,500 bales during the reported period. Vietnam dominated as the largest importer, receiving 135,000 bales, while Bangladesh and Pakistan trailed closely behind with 29,600 and 29,100 bales respectively. The All Pakistan Textile Mills Association (APTMA) has sought the intervention of Minister for National Food Security and Research Rana Tanveer Hussain for the revival and implementation of key decisions related to the cotton sector. In a letter to the minister, APTMA Chairman Kamran Arshad drew attention to the approved minutes of the 6th meeting of the Cabinet Committee on Essential/Cash Crops, held under the chairmanship of the deputy prime minister. He highlighted several time-bound priority decisions that require urgent action by the ministry, including: (i) establishment of an industry-led governance structure through the transformation of the Pakistan Central Cotton Committee (PCCC) into the Pakistan Cotton Advisory Council (PCAC); (ii) collection of cotton cess through the Federal Board of Revenue (FBR); (iii) allocation of 70 percent of cess funds exclusively for cotton research and development (R&D); and (iv) inclusion of provinces, research institutions, farmers, and the seed sector in the new institutional framework. â€œSince the Cabinet Committee meeting, the APTMA has repeatedly urged the ministry to ensure swift implementation of all decisions made with the consensus of stakeholders. However, it is regrettable that no concrete measures have yet been initiated by the concerned authorities despite the passage of considerable time and repeated reminders,â€ the APTMA chairman stated. He warned that the inordinate delay in implementation is fraught with significant national loss, particularly as the cotton sowing season has already commenced in various parts of the country. According to him, continued inaction by the Ministry could further accelerate the persistent decline in cotton production, leading to increased imports and putting additional pressure on the countryâ€™s valuable foreign exchange reserves. In view of the foregoing, APTMA has called for immediate action on the following measures: (i) issuance of a notification for the operationalisation of PCAC; (ii) necessary legal amendments to enable the collection of cess through FBR; (iii) allocation of 70 percent of cess funds for R&D; (iv) establishment of the approved industry-led governance structure; and (v) sharing of a time-bound implementation plan with the APTMA. The textile industry, he noted, has consistently demonstrated its commitment to supporting national cotton revival efforts. However, without urgent and decisive policy and institutional actions, the agreed strategy cannot translate into tangible outcomes. He urged the minister to personally intervene to ensure immediate progress on these decisions in order to safeguard the cotton crop and the cotton-based industry, which provides employment to millions across the country. Rana Shafqat, Chairman of the Pakistan Cotton Brokers Association, has emphasized that the revival of the cotton sector is inseparable from the revival of the Pakistani economy, warning that any negligence in this regard will have serious consequences for the countryâ€™s overall economic health. Expressing his full support for a recent letter written by APTMA Chairman Mian Arshad Kamran to Federal Minister for Food Security Rana Tanveer Hussain, Rana Shafqat urged the government to move swiftly on implementing decisions that were taken under the chairmanship of Deputy Prime Minister Ishaq Dar concerning the Cotton Revival Programme. Rana Shafqat further appealed to the Federal Minister for Food Security to take immediate and concrete action, pointing out that the cotton sowing season is currently in full swing across the country. He noted that 30 percent of Punjabâ€™s provincial sowing target has already been completed, stressing that the remaining window of opportunity must not be wasted. He called on authorities to accelerate measures for cotton revival without further delay, underlining that timely intervention is critical to ensuring a successful crop season and broader economic stability. Copyright Business Recorder, 2026

Date: 2026-05-11

Details: Published May 11, 2026 Updated about an hour ago PESHAWAR: Business-men and exporters in Khyber Pakhtunkhwa associated with diverse sectors urged the provincial government of Khyber Pakhtunkhwa to immediately abolish the one percent Infrastructure Development Cess (IDC) on exports. The demands were raised during a meeting of All Pakistan Commercial Exporters Association (APCEA) held under the chairmanship of Chairman, Iftikhar Ahmad and Senior Vice Chairman Hanan Khan. The meeting called for immediate reopening of the Torkham Border Crossing for Pak-Afghan trade to help revive commercial and economic activities in the region. On the special invitation of the chairman, founding members of the association including Khalid Sultan, Pervez Elahi Malik, Zia-ul-Haq Sarhadi, Haji Mamoor Khan, Mazharul Haq, Engr. Manzoor Elahi, Faiz Muhammad (Faizi), Haji Tahir Hussain, Faqir Hussain and Mumtaz Khan, along with other prominent businessmen, participated in the meeting. Addressing the participants, Chairman APCEA Iftikhar Ahmad said the gemstone sector possessed immense potential to boost economic activities in the region through exports of precious and semi-precious stones to international markets. Chairman APCEA said businessmen associated with the gemstone industry had been facing multiple challenges during the last few months, resulting in a continuous decline in trade volume, which required urgent attention from the relevant authorities. If gemstone traders were facilitated by the government and departments concerned, including Customs and Income Tax authorities, the sector could generate substantial foreign exchange for the country, he added. The APCEA chairman said despite limited resources, the gemstone sector could emerge as a game changer for the national economy provided it received proper government support and patronage. He also briefed the participants about measures being taken by the associationâ€™s office-bearers for revamping the APCEA office to make it suitable for meetings with senior federal and provincial officials as well as foreign delegations. Speaking on the occasion, former APCEA chairman Zia-ul-Haq Sarhadi stressed the need for removing hurdles hindering trade promotion in the region. Sarhadi, who is also Senior Vice President of the Pak-Afghan Joint Chamber of Commerce and Industry (PAJCCI) and Executive Member of the Sarhad Chamber of Commerce and Industry (SCCI), urged the Khyber Pakhtunkhwa government to immediately abolish the one percent cess on exports. He further demanded reopening of the Torkham border to restore Pak-Afghan trade activities and facilitate thousands of businessmen, labourers and daily wage workers associated with cross-border trade. The senior businessmen paid tribute to Chairman APCEA Iftikhar Ahmad and Senior Vice Chairman Hanan Khan for their performance and efforts for the betterment of the association and expressed best wishes for their future success. Copyright Business Recorder, 2026

Date: 2026-05-11

Details: Published May 11, 2026 Updated about an hour ago ISLAMABAD: Zarai Taraqiati Bank Limited (ZTBL) through digital banking products and services, has reached small farmers and created over 900 employment opportunities for fresh graduates and postgraduates across the country. ZTB President/CEO Tahir Yaqoob Bhatti, President/CEO of Zarai Taraqiati Bank Limited (ZTBL), said this during a visit to Maqbool Ahmad Gondal, Auditor General of Pakistan, office. During the meeting, Bhatti briefed the Auditor General on the â€œReforms and Transformation Strategyâ€** implemented at ZTBL in 2023, which helped steer the organization out of financial and administrative challenges. He shared that ZTBL has transformed into a vibrant institution, achieving record financial performance year after year while creating more than 900 employment opportunities for fresh graduates and postgraduates across the country. He further highlighted that, through digital banking products and services, ZTBL is reaching small farmers more efficiently. He also shared that the bank follows a unique business model in which branch managers and mobile credit officers visit villages and far-flung areas to provide agri-financing and other banking services at farmersâ€™ doorsteps. Maqbool Ahmad Gondal appreciated ZTBLâ€™s performance and its role in improving the livelihoods of small farmers and strengthening the rural economy. While assuring full support and cooperation from his office, the Auditor General emphasized that accountability, transparency, and good governance should remain key priorities for sustaining the bankâ€™s financial growth. Copyright Business Recorder, 2026 APPLE, INTEL REACH PRELIMINARY CHIP-MAKING DEAL: WSJ Published May 11, 2026 Updated about an hour ago WASHINGTON: Intel has reached a preliminary deal to make some chips for Apple devices, the Wall Street Journal reported on Friday, in a potential boost to Intelâ€™s contract manufacturing business and Washingtonâ€™s push to shore up US chip production. The companies were engaged in intensive talks for more than a year and they hammered out a formal deal in recent months, the report said, citing people familiar with the matter. Intelâ€™s stock extended gains to rise 15 percent on the news, while Apple shares were up about 1.7 percent in afternoon trading. Landing an Apple contract would give Intel a steady stream of demand from one of the worldâ€™s largest consumer electronics companies, bolstering both its reputation and a manufacturing business that has fallen behind TSMC in recent years. The Journal report said the US government, which became Intelâ€™s largest shareholder last year under a deal with its CEO Lip-Bu Tan, played a major role in bringing Apple to the negotiating table. An administration official said he could not speak to the reported Apple-Intel preliminary deal, but said the administration had generally been trying to bolster Intel. â€œIn general, we want to and have been helping Intel,â€ the official said, adding the effort was not because of the equity stake in Intel, but because the company is a major US semiconductor producer. â€œWe have been trying to drum up business for Intel.â€ The tie-up would also further the Trump administrationâ€™s goal of bringing more chip production to the US and strengthening domestic manufacturing. It is unclear which Apple products Intel would make chips for, according to the report. Intel and Apple declined to comment.

Date: 2026-05-11

Details: Written by Mrs. Anjum Shahnawaz Finance minister meets ICAP delegation Muhammad Aurangzeb has assured chartered accountants that the government will introduce facilitative tax measures in the upcoming Budget 2026-27. The finance minister held a meeting at the Finance Division with a delegation from the Institute of Chartered Accountants of Pakistan (ICAP). During the meeting, Aurangzeb emphasized the importance of continuous engagement with professional bodies and industry stakeholders to ensure economic and taxation policies remain practical and aligned with the countryâ€™s reform agenda. Government pursuing tax administration reforms The finance minister highlighted the governmentâ€™s ongoing efforts to modernize the tax administration system through reforms focused on people, processes and technology. He said the reforms aim to simplify procedures, improve transparency, reduce unnecessary human intervention and facilitate taxpayers. Aurangzeb also highlighted the operationalization of the Tax Policy Office under the Finance Division, describing it as a significant institutional reform to strengthen tax policy formulation and coordination between policy and administration. Technology and AI improving tax compliance The meeting also discussed the growing role of technology and digital systems in improving tax compliance and revenue administration. The finance minister said AI-led production monitoring and technology-based oversight mechanisms introduced in different sectors are helping improve documentation, strengthen compliance and reduce leakages in the system. According to officials, the government is focusing on expanding digitization and automation to make the tax system more efficient and business-friendly. ICAP presents budget proposals The ICAP delegation presented various proposals related to documentation, group taxation structures, export-oriented services and harmonization of tax treatment across sectors. Discussions also covered measures aimed at improving competitiveness, facilitating investment, enhancing ease of doing business and broadening the tax base. Aurangzeb acknowledged the recommendations and assured the delegation that the proposals would be carefully reviewed during the budget formulation process. Government reiterates commitment to transparent tax system The finance minister reiterated the governmentâ€™s commitment to building a transparent, technology-driven and facilitative tax system that supports economic growth and improves governance. The ICAP delegation was led by Samiullah Siddiqui and included Jehanzaib Amin, Ahmed Raza Mir and Zeeshan Ijaz.

Date: 2026-05-11

Details: Written by Shahnawaz Akhter Federal Board of Revenue on Monday introduced new conditions for foreign non-government organizations seeking e-enrolment in Pakistanâ€™s national tax system. The tax authority issued SRO 856(I)/2026 dated May 11, 2026, proposing amendments to the Income Tax Rules, 2002. According to the notification, the amendments revise Rule 80 and outline additional documentation and disclosure requirements for international NGOs operating in Pakistan. Detailed information required for registration Under the proposed amendments, foreign NGOs applying for registration will be required to provide detailed organizational and operational information. The required details include: â€¢ Name of taxpayer â€¢ Business address â€¢ Accounting period â€¢ Business phone number â€¢ Principal business activity â€¢ Name and address of principal officer or authorized representative Applicants will also need to submit an authority letter authorizing the principal officer or representative to apply for registration in Pakistan. Embassy verification and Interior Ministry NOC mandatory The proposed rules further require foreign NGOs to submit: â€¢ Tax registration or incorporation documents from their home country â€¢ Verification letter from the relevant embassy â€¢ Proof of local residence, including rent or lease agreements and utility bills â€¢ No Objection Certificate (NOC) issued by the Ministry of Interior and Narcotics Control â€¢ Memorandum of Understanding (MoU) signed with the Government of Pakistan The amendments also require NGOs to provide contact details, including mobile numbers and email addresses of authorized representatives. Shareholding and trustee details required The FBR has also proposed disclosure requirements regarding directors, trustees and major shareholders. Foreign NGOs will be required to provide the names, nationalities, passport details and shareholding percentages of directors, trustees, partners or shareholders holding 10 percent or more shares. Tax experts said the new measures are aimed at improving transparency, documentation and regulatory oversight of foreign organizations operating in Pakistan. Amendments proposed under Income Tax Rules 2002 The draft amendments were proposed under the Income Tax Rules, 2002 and are expected to become part of the e-enrolment framework after completion of the required legal process. Officials said the move is intended to strengthen compliance standards and ensure proper verification of foreign NGOs working in the country.

Date: 2026-05-09

Details: Published May 9, 2026 Updated about 3 hours ago By Reuters FRANKFURT: European shares slipped on Friday in broad-based losses as a flare-up in the Middle East conflict hit risk sentiment at the end of a week dominated by geopolitics. The pan-European STOXX 600 closed down 0.7 percent at 612.14 points, though it posted a second straight weekly gain, albeit small. Major regional markets followed suit, with Germanyâ€™s DAX falling 1.3 percent to lead declines. Washington said it expected an Iranian response as soon as Friday to its latest proposal to end the Gulf conflict, even as US and Iranian forces clashed and the United Arab Emirates came under renewed attack. â€œInvestors somehow understand that the process of getting to a peace agreement will not be nice, clean, and linear and that there will be setbacks and disagreements along the way,â€ said Richard Flax, chief investment officer at Moneyfarm. European stocks have remained sensitive to geopolitical headlines, with the regionâ€™s energy dependence fuelling concerns about inflation and growth. Also weighing on sentiment was US President Donald Trumpâ€™s warning that the European Union would face â€œmuch higherâ€ tariffs if trade commitments were not met by July 4. Most STOXX sub-sectors declined, with financials and industrials the biggest drags, down 0.7 percent and 1.5 percent, respectively. Rheinmetall tumbled 9.2 percent after JPMorgan downgraded the defence group to â€œneutralâ€ from â€œoverweightâ€. Its results this week showed first-quarter revenue below analystsâ€™ expectations. The defence sector declined 3.6 percent. British Airways owner IAG shed 2.8 percent after forecasting lower annual profit than expected due to soaring jet fuel costs. The travel index fell 1.4 percent. Commerzbank said it plans to cut 3,000 jobs as it targets higher profits while fending off a takeover by Italyâ€™s UniCredit. The stocks closed down 3.9 percent and 1.3 percent, respectively. Amadeus rose 1.9 percent after the Spanish travel technology company reported quarterly core earnings above market expectations and maintained its guidance. Meanwhile, European Central Bank President Christine Lagarde said the central bank is well placed to react to any rise in inflation, while Executive Board member Isabel Schnabel warned of increasing inflation risks linked to the Iran war. S&P 500, NASDAQ HIT RECORD HIGHS ON TECH RALLY Published May 9, 2026 Updated about 3 hours ago By Reuters NEW YORK: The S&P 500 and the Nasdaq touchedfresh peaks on Friday, boosted by gains in Nvidia and other technology stocks, while a stronger-than-expected jobs report allayed concerns over the state of the labor market. Tech heavyweights Nvidia and Apple rose 2.3 percent and 1.8 percent, respectively, while the Philadelphia SE Semiconductor index recovered from Thursdayâ€™s losses to reach a new high on expectations of strong AI infrastructure demand. Data showed US employment increased more than expected in April and the unemployment rate held steady at 4.3 percent - pointing to labor market resilience and reinforcing expectations that the Federal Reserve would leave interest rates unchanged for some time. â€œIt was encouraging that hiring broadened across sectors, a sign of improving labor market breadth,â€ said Angelo Kourkafas, senior strategist at Edward Jones. â€œThe Fed will remain firmly on hold as the focus now is going to be on the energy-driven inflation pressures in the months ahead.â€ Traders continued to bet that the central bank will hold interest rates steady in the 3.50 percent to 3.75 percent range until the end of the year. At 11:44 a.m. the Dow Jones Industrial Average rose 24.36 points, or 0.05 percent, to 49,621.33, the S&P 500 gained 53.99 points, or 0.74 percent, to 7,391.10, and the Nasdaq Composite was up 340.22 points, or 1.32 percent, to 26,144.57. The S&P 500 and the Nasdaq were on track for a sixth straight week of gains, in what could be the longest such winning streak since October 2024. The Dow was set for a second consecutive week of advances. The overall optimism helped investors look past fresh attacks between US and Iranian forces in the Gulf. Brent crude rose above USD100 a barrel as hopes faded for a quick resolution to the Middle East conflict and the gradual reopening of the Strait of Hormuz, a key transit route for oil and liquefied natural gas. The US said it expected a response from Tehran to its latest proposal later on Friday. Despite concerns that oil prices were fueling inflation, the S&P 500 and the Nasdaq have hit record highs, helped by a strong earnings season, signs of a resilient economy and optimism around artificial intelligence. â€œThereâ€™s a huge secular movement at play within the tech sector, and specifically microchips,â€ said Charlie Ripley, senior investment strategist for Allianz Investment Management. â€œWhile there is some concentration, itâ€™s reflective of whatâ€™s happening in the real economy with the AI buildout and the expansion.â€ Of the 440 S&P 500 companies that have reported first-quarter results so far, 83 percent have topped analystsâ€™ earnings estimates, according to data compiled by LSEG. That compares with a long-term average of about 67 percent.

Date: 2026-05-09

Details: Published May 9, 2026 Updated about 3 hours ago By Recorder Report LAHORE: The Pak International Business Forum (PIBF) has proposed a seven-point economic revival agenda for the upcoming federal budget, urging the government to introduce business-friendly reforms aimed at restoring industrial growth, strengthening exports, reducing inflationary pressures and improving the overall investment climate in the country. PIBF President Dr Mushtaq Mangat said Pakistanâ€™s economy requires stable, growth-oriented and long-term policies instead of temporary fiscal measures. He observed that businesses are currently facing immense pressure due to high interest rates, expensive energy, taxation complexities and rising fuel costs. The PIBF leadership, including Secretary General Muhammad Ejaz Tanveer and Chief Organizer Muaz Qazi, emphasized that immediate structural reforms are essential to revive investor confidence and economic activity. The forum called for rationalization of interest rates, stating that expensive borrowing has severely affected industrial expansion, particularly for small and medium enterprises. PIBF also urged revival of Development Finance Institutions (DFIs) and provision of targeted financing facilities for export-oriented sectors to promote investment and industrial growth. On taxation, PIBF stressed the need to broaden the tax base while lowering tax rates and simplifying compliance procedures. The forum proposed a digitized single-window tax system to reduce procedural hurdles and improve transparency. It also called for consistent economic policies and incentives for compliant taxpayers and reinvestment. Discussing the energy sector, Muaz Qazi said high electricity and gas tariffs have significantly increased production costs and reduced the competitiveness of Pakistani products in global markets. PIBF demanded regionally competitive energy tariffs for industries, especially exporters, along with structural reforms to reduce line losses and improve governance of distribution companies. The forum also highlighted the negative economic impact of rising petroleum prices, stating that increasing fuel costs contribute directly to inflation in transport, agriculture and manufacturing sectors. PIBF proposed establishment of a fuel price stabilization mechanism and rationalization of petroleum levies to provide relief to consumers and businesses. On ease of doing business, PIBF urged the government to establish a fully digital one-window operational framework to simplify approvals, registrations and regulatory compliance. The forum also emphasized policy continuity, reduction in unnecessary regulations and introduction of fast-track commercial dispute resolution mechanisms to encourage local and foreign investment. Muhammad Ejaz Tanveer stressed the importance of human capital development, stating that Pakistan must align education and technical training with industry requirements. PIBF recommended expansion of vocational training, apprenticeship programs and digital skills development, particularly in IT, freelancing and remote work sectors, to enable Pakistani youth to compete globally. The forum also proposed a â€œDistrict Economy Modelâ€ aimed at promoting decentralized economic growth by developing each district according to its local strengths and resources. PIBF stated that the model would help reduce migration pressures on major cities, generate employment opportunities at the local level and promote balanced regional development. Dr Mushtaq Mangat urged the government to incorporate these recommendations into the upcoming federal budget and broader economic policymaking framework to ensure sustainable growth, industrial revival and long-term economic stability in Pakistan. Copyright Business Recorder, 2026

Date: 2026-05-09

Details: Written by Shahnawaz Akhter Pakistan Single Window and Trade Development Authority of Pakistan have signed a memorandum of understanding (MoU) to accelerate the digitalisation of Pakistanâ€™s trade ecosystem. The partnership aims to improve regulatory efficiency and provide integrated digital services to exporters and importers across the country. PSW and TDAP to Integrate Digital Trade Platforms According to a joint statement issued on Friday, PSW will work closely with TDAP to harmonise export facilitation processes and integrate key digital platforms into the broader PSW system. The integration will include TDAPâ€™s Pakistan Trade Portal and Exporters Directory to provide traders with seamless and real-time access to critical trade information and services. Officials stated that the initiative will help reduce dependence on manual procedures and support paperless trade operations. TDAP to Expand Outreach for Digital Trade Reforms Under the agreement, TDAP will utilise its network of regional offices, trade associations and international connections to identify stakeholders that can benefit from PSWâ€™s digital reforms. TDAP will also provide dedicated space to PSW at major domestic trade events to increase awareness and encourage adoption of digital trade tools. The collaboration aims to improve ease of doing business and modernise Pakistanâ€™s export facilitation system. Focus on Data-Driven Trade Policies The MoU also places strong emphasis on data-driven decision-making and secure trade data-sharing between the two organisations. According to the statement, the partnership will support market analysis and the development of evidence-based policies for the local trade community. PSW and TDAP also plan to jointly develop export-readiness toolkits and compliance checklists to help small and medium-sized enterprises (SMEs) meet international market requirements. Women Entrepreneurs to Benefit From Initiative A major component of the agreement focuses on gender-responsive trade facilitation and digital inclusion for women-led businesses. The two organisations will work together to improve export readiness for women entrepreneurs and encourage participation in international exhibitions and trade delegations. The initiative will particularly support participants of the WTO Award-winning Khadijah Women Entrepreneurship Programme. PSW CEO Highlights Importance of Partnership Aftab Haider described the collaboration as another step towards building a unified and inclusive trade ecosystem in Pakistan. He stated that the partnership would allow TDAP to benefit from PSWâ€™s data collection and dissemination capabilities for targeted trade promotion initiatives, especially for women entrepreneurs. According to him, PSW would also benefit from TDAPâ€™s expertise and experience to improve digital services and knowledge products. Joint Capacity-Building Sessions Planned The partnership will also include joint capacity-building and training sessions. Under the initiative, PSW will provide orientation to TDAP officials regarding new digital modules and regulatory updates to ensure both organisations provide consistent guidance to the trade community. Officials said the collaboration would help strengthen Pakistanâ€™s trade and maritime footprint while supporting long-term export

Date: 2026-05-09

Details: Written by Mrs. Anjum Shahnawaz Pakistan has witnessed another devastating fuel price hike after the federal government sharply increased petrol and diesel prices by nearly Rs15 per litre, pushing both products above the alarming Rs414 mark for the first time. According to a notification issued by the Ministry of Energy on Friday night, the revised petroleum prices came into effect from May 9, 2026, intensifying financial pressure on inflation-hit consumers and businesses already struggling with soaring living costs. Petrol Price Climbs to Record Rs414.78 Per Litre Under the latest revision, the price of petrol (motor spirit) surged by Rs14.92 per litre, taking the new rate to a staggering Rs414.78 per litre compared to the previous Rs399.86. High-speed diesel (HSD) also became significantly more expensive, with the government increasing its price by Rs15 per litre to Rs414.58 from Rs399.58. The government said the revised ex-depot prices would remain effective for the upcoming week under the ongoing weekly fuel pricing mechanism. Third Consecutive Fuel Hike Sparks Public Outrage The latest increase marks the third straight hike in petroleum prices, triggering fears of another inflation storm across the country. During the previous two weeks alone, petrol prices had already jumped cumulatively by Rs33.28 per litre, while diesel prices surged by a massive Rs46.16 per litre. The repeated increases have sparked frustration among motorists, transporters, traders, and households, many of whom say fuel has become increasingly unaffordable. Middle East Crisis Sends Global Oil Prices Surging The fresh increase in domestic fuel prices comes amid escalating tensions in the Middle East, which have rattled international oil markets. Global crude prices rose sharply on Friday after renewed fighting between the United States and Iran raised fears of supply disruptions and uncertainty surrounding the strategically vital Strait of Hormuz. Brent Crude futures climbed by $1.41, or 1.41%, to $101.47 per barrel, while West Texas Intermediate (WTI) crude rose by $1.12, or 1.18%, to $95.93 per barrel. Earlier in the day, oil prices had surged more than 3% as traders reacted to fears of a broader regional conflict. Inflation Fears Deepen as Transport, Food Costs Likely to Rise Economists warn that the relentless increase in petroleum prices could unleash another wave of inflation across Pakistan, particularly impacting transport fares, food prices, agriculture, and industrial production costs. The sharp rise in diesel prices is expected to hit the agriculture and logistics sectors the hardest, while higher petrol prices may further burden salaried and middle-class households already struggling to manage daily commuting expenses. Analysts caution that if global oil prices continue their upward trajectory, Pakistanis may face even more painful fuel adjustments in the coming weeks.

Date: 2026-05-08

Details: Published May 8, 2026 Updated about 2 hours ago GRAND-LANCY, (Switzerland) and COPENHAGEN, (Denmark): Temenos (SIX: TEMN), a global leader in banking technology, on Thursday announced that Habib Bank Limited (HBL), a leading financial institution in Pakistan, has successfully gone live with Temenos Core Banking in one of the regionâ€™s most ambitious modernization programmes. The initial go-live supports Conventional and Islamic Banking and includes a first phase migration of customer accounts from 200 branches in Pakistan to the Temenos platform. The milestone is a major step in HBLâ€™s strategy to deliver agility, resilience, and scalability in its operations. Once fully rolled out, this landmark programme will cover the Bankâ€™s branch network and more than 40 million accounts, processing approximately 20 million transactions per day. Delivered by Systems Limited, utilizing the Country Model Bank accelerator, this implementation brings Temenos Core and Temenos Data Hubto a hybrid-cloud architecture powered by Red Hat Open Shift. The modern platform accelerates product launches, boosts processing speed and efficiency, and delivers real-time data for analytics and regulatory compliance. Muhammad Nassir Salim, President & CEO - HBL, commented: â€œThe deployment of Temenosâ€™ core banking is a pivotal moment in HBLâ€™s technology transformation. It equips us to drive innovation, product agility and scalable efficiency. This is a large and complex project, and Temenos with Systems Limited have shown exceptional focus towards making this initiative successful.â€ William Moroney, Chief Revenue Officer at Temenos, said: â€œBy replacing legacy systems with Temenosâ€™ cloud-native core, HBLgains a highly robust and scalable platform capable of supporting the largest and most complex banking operations. This modernization empowers HBL to deliver innovative services to tens of millions of customers with speed, security, and efficiency. We are proud to partner with HBL on this strategic transformation.â€ Ammara Masood, GM Global BFS, Systems Limited, added: â€œThis successful go-live reflects our ability to deliver complex, large-scale multi-country banking modernization programmes. Working alongside Temenos, we ensured an implementation that meets HBLâ€™s strategic objectives and lays a strong foundation for future growth and long-term success.â€ Copyright Business Recorder, 2026

Date: 2026-05-08

Details: Published May 8, 2026 Updated about 2 hours ago By Reuters FRANKFURT: European shares slipped on Thursday after a steep rally in the previous session, as investors assessed progress towards a US-Iran peace deal that pushed crude prices sharply lower. The pan-European STOXX 600 ended 1.1 percent lower after rising more than 2 percent on Wednesday. Most regional bourses, including in France, Germany and Britain , also fell. European energy stocks dropped 2.5 percent as crude fell below USD100 a barrel. Shell lost 2.9 percent despite beating first-quarter profit estimates and raising its dividend by 5 percent. Oil prices came under pressure as the US and Iran edged towards a temporary agreement to halt their war, sources and officials said. Tehran is reviewing a proposal that would stop the fighting but leave the most contentious issues unresolved. European equities have lagged global peers since the conflict began, with elevated energy costs from supply disruption following the closure of the Strait of Hormuz fuelling inflation fears and clouding growth prospects. â€œThere are still no clear signs that a durable peace agreement is imminent, and the path to resolution - if and when it materialises - is unlikely to be linear in our view,â€ said Tom Nelson, head of market strategy at Franklin Templeton Investment Solutions. â€œMarkets are forward-looking, but in this case, they may be looking through a level of uncertainty that remains materially unresolvedâ€. On the earnings front, spirits group Campari tumbled 14.5 percent after first-quarter revenue missed expectations. Peers Diageo and Pernod Ricard fell more than 2 percent each, while the beverages index dropped 2.1 percent. Defence stocks shed 2.7 percent, with Rheinmetall down 6.9 percent after the German group reported first-quarter results and said it had submitted a bid to buy German Naval Yards Kiel. Shares of Siemens Healthineers fell 4.7 percent after the medical technology company cut its full-year outlook, citing structural changes in the Chinese market and higher inflation expectations. Conversely, Persil maker Henkel rose 3.3 percent after meeting first-quarter sales expectations. On the macro front, euro zone financial integration has made steady progress in recent years but equity markets remain fragmented, the European Central Bank said in a report.

Date: 2026-05-07

Details: Published May 6, 2026 Updated about 11 hours ago By Reuters LONDON: The Iran war has seen major central banks put interest rates on hold in April and stymied an easing push in emerging economies as policymakers face inflation pressures and volatile markets. Six of the central banks overseeing the 10 most heavily traded currencies left rates unchanged last month: the U.S. Federal Reserve, the European Central Bank and the Bank of England, but also Canada, New Zealand and Japan. Central banks in Switzerland, Australia, Sweden and Norway held no rate-setting meetings. â€œOil prices have surged and markets are pricing higher inflation and rate hikes, even if central banks stayed on hold,â€ said Christian Keller, head of economics research at Barclays. Since the Iran war began on February 28, fears of supply disruption have pushed oil prices sharply higher, with the surge in energy costs feeding into fuel and transport prices and lifting global inflation expectations. In the year to end-April, G10 central banks have delivered no rate cuts and 50 basis points of hikes across two moves by Australiaâ€™s central bank. Australia built on those hikes when it lifted interest rates again on May 5. In 2025 and 2024, G10 central banks delivered 850 bps and 800 bps in easing, respectively. The trend was also visible across emerging economies. Two central banks from a Reuters sample of 18 developing economies - Brazil and Russia - trimmed interest rates by a total of 75 bps in April, the first time the monthly tally of cuts has fallen below 100 bps in a year. Of the other 11 to hold rate meetings, 10 kept rates unchanged. Meanwhile, policy makers in the Philippines delivered a rate hike to keep a lid on rising inflation. Latest inflation data from the country blew past all expectations while its currency - like others in Asia - has flirted with or hit fresh record lows, cementing a view that more tightening is on the cards. Emerging economies, which often have higher shares of their inflation basket exposed to energy and food, are expected to feel price pressures more keenly. However, analysts point to a better starting point for many than in recent crises, such as COVID-19 or Russiaâ€™s full-scale invasion of Ukraine in 2022. â€œMonetary policy now is at not only positive levels, but there is plenty of room for central banks to ease if they need to ease, which is quite different than the policy levels versus inflation levels that we had on the last global shock,â€ said Carlos Carranza, from the M&G emerging market debt team.

Date: 2026-05-07

Details: Published May 7, 2026 Updated about 5 hours ago By Reuters FRANKFURT: Europeâ€™s STOXX 600 jumped over 2 percent on Wednesday in a broad-based rally as reports of a possible peace deal between Washington and Tehran boosted risk appetite and sent oil prices sharply lower, while upbeat company earnings added to the optimism. The pan-European STOXX 600 closed up 2.2 percent at 623.25 points, to its strongest level since April 17. Major regional bourses mirrored the rally. Franceâ€™s CAC 40 led the pack with a 2.9 percent jump while Italyâ€™s benchmark gained 2.4 percent, hovering near its highest level since 2000. Iran said it was reviewing a new US proposal, following reports that the two parties were closing in on a one-page memorandum to end the war in the Gulf. Crude slipped nearly 7 percent with energy the only major STOXX sector trading down 2.5 percent. Lower oil prices helped the oil price sensitive travel sector advance 5.8 percent, leading sector-wise gains on the index. â€œSigns of progress in the deal is in some ways more positive for Europe than it is for the US, just because itâ€™s a sensitive regionâ€, said Kiran Ganesh, multi-asset strategist at UBS Global Wealth Management. â€œOnce this Iran issue has passed, then the underlying picture looks really strong for corporate earningsâ€, Ganesh added. Easing crude prices could temper concerns of energy price driven inflation, a crucial factor that hangs as a major drag on European equities which are still below their pre-war levels, while the S&P 500 has hit multiple fresh peaks ever since the outset of the Iran war. Money markets are currently pricing in a 67.6 percent chance that the European Central Bank hikes rate at its June meeting, down from a nearly 85 percent chance on Tuesday, according to LSEG data. Banks and industrials were up 3.8 percent and 3.2 percent, respectively, and the biggest boosts on the European benchmark on Wednesday. Defence shares added 4.7 percent. Italyâ€™s Leonardo gained 5 percent after reporting higher first-quarter earnings, while Norwayâ€™s Kongsberg also jumped 5 percent after its order intake more than doubled for the quarter. Demant surged 13.3 percent and marked its biggest one-day gain since October 2008 after the Danish hearing aids maker beat quarterly sales growth estimates.

Date: 2026-05-07

Details: Published May 7, 2026 Updated about 5 hours ago By Reuters NEW YORK: The S&P 500 and the Nasdaq hit record highs on Wednesday, buoyed by signs of a resolution in the Middle East conflict, while strong earnings from Advanced Micro Devices sparked a rally in chipmakers. Advanced Micro Devicesâ€™ shares rose nearly 17 percent to a record high after the company forecast second-quarter revenue above expectations on robust demand for its data-center chips. Shares of rival Intel jumped 2.4 percent, while a broader gauge of US chipmakers climbed 3.5 percent to a fresh peak on continued optimism around AI demand. Global stocks surged and oil prices slumped following reports that the United States and Iran were closing in on an agreement for a one-page memorandum to end the war in the Gulf region. Iran said it was reviewing a new US proposal. In its current form, the memorandum would declare an end to the conflict and the start of a 30-day period of negotiations on a detailed agreement to open the Strait of Hormuz, limit Iranâ€™s nuclear program and lift US sanctions, Axios reported. Oil prices fell below USD100 a barrel for the first time since April 22, helping ease concerns about inflationary pressures. â€œThe market is responding to the de-escalation optimistically, on top of a strong earnings season,â€ said Josh Chastant, managing director, public markets at GuideStone Funds. US stock markets have remained resilient in recent weeks even as diplomatic efforts to end the conflict have failed to produce a breakthrough, with investors instead focusing on the earnings season. S&P 500 companies are on track for their highest profit growth in more than four years. Of the 314 S&P 500 companies that reported through May 1, 83 percent beat analystsâ€™ profit estimates, according to LSEG I/B/E/S data. At 12:30 p.m., the Dow Jones Industrial Average rose 510.85 points, or 1.04 percent, to 49,809.10, the S&P 500 gained 82.14 points, or 1.13 percent, to 7,341.36 and the Nasdaq Composite gained 395.68 points, or 1.56 percent, to 25,717.84. US private payrolls posted their largest increase in 15 months in April, pointing to continued labor market stability even as the conflict in the Middle East clouds the economyâ€™s outlook.

Date: 2026-05-07

Details: Published May 7, 2026 Updated about 6 hours ago By Reuters NEW YORK: Oil prices fell sharply to two-week lows on Wednesday as optimism grew about a possible end to the war in the Middle East, with reports the United States and Iran were nearing an initial peace deal. Brent crude futures settled USD8.60, or 7.83 percent, lower at USD101.27 a barrel, having earlier dropped below USD100 for the first time since April 22. US West Texas Intermediate crude lost USD7.19, or 7.03 percent, to USD95.08. A source from mediator Pakistan said the United States and Iran were closing in on an agreement on a one-page memorandum of understanding. Iran said on Wednesday it was reviewing a new US proposal. An Iranian foreign ministry spokesperson, cited by Iranâ€™s ISNA news agency, said Iran would convey its response soon via Pakistan. Iran had said earlier that it would only accept a fair and comprehensive agreement. US media outlet Axios reported that the US expects Iranian responses on several key points in the next 48 hours, citing sources saying this was the closest the parties had come to an agreement since the war began. â€œThereâ€™s a growing sense that the chance of the Strait of Hormuz reopening is greater, regardless of whether we get a lasting peace deal with Iran or not,â€ said Phil Flynn, senior analyst with Price Futures Group. Both crude contracts hit their lowest in two weeks, with Brent hitting an intra-session low of USD96.75 before paring losses after US President Donald Trump said it was â€œtoo soonâ€ to consider face-to-face talks with Tehran, and as a senior Iranian parliament member said the US proposal was more of a wish list than a reality. The US military said on Monday that it destroyed several Iranian small boats as part of efforts to help stranded ships exit the Strait of Hormuz. â€œA deal announcement would move futures further immediately, in fact even the potential of a deal is already triggering a decline in oil prices,â€ said Rystad Energy chief oil analyst Paola Rodriguez-Masiu. However, the global oil flow would take time to normalize even if the strait is restored. â€œThe six-to-eight-week lag between credible access conditions and real flow normalization is not a conservative estimate, it is a structural feature of how shipping markets work,â€ Rodriguez-Masiu added. Crude oil supply losses from halted marine traffic through the strait since the war began in February have driven up prices, with Brent trading last week at its highest since March 2022. The Strait of Hormuz closure has resulted in a drawdown in global oil and fuel inventories as refineries try to offset production shortfalls. â€œA partial deal may be enough for Strait of Hormuz shipping to gradually normalize,â€ said Raymond James analyst Pavel Molchanov, adding that if the decline holds, prices at the pump could cool over the next one to two weeks for US consumers.

Date: 2026-05-07

Details: â€¢ Nearly 45 to 47 billion cigarettes are being sold, delegation tells minister Published May 7, 2026 Updated about 19 hours ago By BR Web Desk Federal Minister for Commerce Jam Kamal Khan held a detailed meeting with a delegation led by Marco Mariotti, President, CIS & Central Asia, Philip Morris International, to discuss key challenges facing Pakistanâ€™s tobacco sector, including illicit trade, regulatory gaps, and export potential, according to an official statement on Thursday. During the meeting, the delegation briefed the minister on the growing scale of illicit cigarette trade in Pakistan, noting that a significant portion of the market remains undocumented, resulting in an estimated annual revenue loss of around Rs350 billion, i.e. USD1.25 billion. It was highlighted that nearly 45 to 47 billion cigarettes are being sold without payment of taxes, creating an uneven playing field for the formal sector. The discussion focused on structural issues in the tobacco supply chain, particularly the procurement of tobacco leaf, under-reporting of production, and weak traceability mechanisms. The delegation pointed out that although registered companies operate under strict regulatory frameworks, undocumented production and misuse of contracts enable informal players to access raw materials and expand illicit manufacturing. According to the statement, participants emphasised that the issue extends beyond taxation, with concerns relating to undocumented income, money laundering, and broader economic distortions. The minister was informed that a limited number of actors benefit disproportionately from the undocumented segment, while formal businesses continue to face compliance and cost pressures. The delegation stressed that while laws, tax stamp systems, and regulations are already in place, their implementation remains inconsistent. It was noted that enforcement requires coordinated action by multiple institutions, including federal and provincial authorities. The role of the Pakistan Tobacco Board (PTB) was also discussed. Participants highlighted that while the Board has regulatory functions such as crop estimation and price setting, its enforcement capacity is limited. The need for restructuring and strengthening the board to play a more proactive role in documentation and monitoring was emphasised. The meeting also reviewed policy challenges arising from Pakistanâ€™s commitments under the International Monetary Fund programme, particularly regarding the gradual removal of import restrictions and equal treatment of commercial and industrial importers. While these reforms aim to liberalise trade, stakeholders noted that they may complicate efforts to control the supply of key inputs used in cigarette manufacturing. Jam Kamal acknowledged the complexity of the issue, describing it as a â€œmulti-layered challengeâ€ requiring a comprehensive approach from farm-level production to retail enforcement. He emphasised that the core problem lies in weak enforcement rather than the absence of policy. The minister underscored the importance of aligning federal and provincial efforts, noting that effective regulation of tobacco cultivation and local markets requires active provincial involvement alongside federal agencies such as the FBR and FIA. He reiterated the governmentâ€™s commitment to supporting the formal sector, promoting exports, and ensuring a fair and transparent business environment. He further directed that stakeholder proposals be consolidated into actionable recommendations, with a focus on strengthening enforcement mechanisms, improving traceability, and gradually reducing the size of the informal economy.

Date: 2026-05-07

Details: Written by Mrs. Anjum Shahnawaz ISLAMABAD, May 7, 2026 â€” Pakistanâ€™s Federal Constitutional Court on Thursday declared the tax on deemed property income unlawful, dismissing appeals filed by the Federal Board of Revenue (FBR) and striking down Section 7E of the Income Tax Ordinance, 2001. The court ruled that the provision â€œshall be deemed not to have been part of the Income Tax Ordinance from day one,â€ effectively nullifying the controversial tax measure introduced through the Finance Act 2022. The short order further declared that all actions, notices, and proceedings initiated by the FBR and Commissioners of Inland Revenue under Section 7E were without lawful authority and stood set aside. Section 7E imposed tax on certain immovable properties, including plots and properties not under active use, by treating them as generating rental income even if they were not rented out. Under the provision, any immovable property owned by a taxpayer beyond the first property was considered to generate deemed rental income if it was self-occupied, unused, or not producing rental income. Agricultural land and business-use properties were also covered in certain cases. The law assumed notional rental income equal to 20% of the propertyâ€™s FBR-assessed value and imposed a 5% tax on that deemed income, effectively translating into an annual tax of around 1% of the propertyâ€™s assessed value. After hearing arguments, the court held that Section 7E was â€œultra vires the Constitutionâ€ and â€œvoid ab initio,â€ declaring the provision unconstitutional from the outset. Federal Constitutional Court Chief Justice Aminud-Din Khan noted in the order that the provision had been challenged before multiple high courts across the country on constitutional grounds. The ruling follows a series of conflicting judgments by various high courts. The Peshawar High Court and the Balochistan High Court had previously declared the provision unconstitutional, while the Islamabad High Court partially struck down subsection (2) of the law. A ruling by the Lahore High Court upholding the provision was later overturned by a division bench, whereas the Sindh High Court had dismissed similar petitions. As a result of Thursdayâ€™s judgment, appeals filed by taxpayers were allowed, while petitions filed by the FBR and the Commissioner of Inland Revenue were dismissed. The court also disposed of all related proceedings. The Federal Constitutional Court had reserved its verdict on April 30 before issuing the short order on Thursday.

Date: 2026-05-07

Details: Written by Hamza Shahnawaz ISLAMABAD, May 7, 2026 â€” The Federal Board of Revenue (FBR) has revised customs values for imported smart watches, smart bands and smart rings in a move aimed at curbing under-invoicing and protecting government revenue. The Directorate General of Customs Valuation issued Valuation Ruling No. 2076/2026 under Section 25A of the Customs Act, 1969 to determine updated customs values for non-GSM wearable devices imported into Pakistan. According to the ruling, customs authorities observed widespread under-invoicing in imports of smart wearable devices, resulting in revenue losses to the national exchequer. Officials said the revised valuation was finalized after examining import data, conducting market inquiries and consulting stakeholders. The valuation directorate held a meeting with importers and traders on April 7, 2026, asking them to submit documentary evidence regarding prevailing market prices and import values. Authorities reviewed 90 days of import data, including declared and assessed values, before determining the revised customs values. The ruling stated that transaction value methods and identical or similar goods valuation methods could not be relied upon due to inconsistent declarations by importers. As a result, customs values were determined under Section 25(7) of the Customs Act, 1969. New customs values for smart watches, bands and rings S. No. Description PCT Code Origin Category A (US$/Piece) Category B (US$/Piece) Category C (US$/Piece) 1 Non-GSM Smart Watch 8517.6280 All Origins 5.0 3.0 1.5 2 Smart Band / Ring 8517.6280 All Origins 4.5 2.5 1.25 The ruling also classified wearable brands into three categories for valuation purposes. Category A brands Amazfit, Armitron, Aurafit, Awei, Black Shark, Blaktron, Boost, CMF, Fire-Boltt, Fitbit, Haylou/Yolo, Honor, Howear, Imilab, Infinix, Itel, Joyroom, Kieselect, LDNIO, Lenovo, Mibro, Miniso, Nordic, Oppo, Oraimo, Realme, Redmi, Sveston, Tozo, Vivo, Wiwu and Xiaomi/Mi. Category B brands Dany, Faster, Login, Ronin and Zero. Category C brands All other low-end brands. The FBR clarified that premium brands including Apple, Samsung, Huawei, Garmin and Google would be assessed separately by collectorates under Section 25 of the Customs Act at values higher than Category A brands. The ruling further stated that where the declared invoice value exceeds the notified customs values, duties and taxes would be assessed on the higher declared value. In the case of air consignments, customs authorities will also add the difference between air freight and sea freight charges while determining assessable value for import taxation.

Date: 2026-05-06

Details: Written by Faisal Shahnawaz KARACHI â€“ In a significant move to support low-income workers and provide public relief, the Sindh government has officially reduced the sales tax rate for motorcycle ride services from 5% to 2%. The decision was finalized during a provincial cabinet meeting chaired by Chief Minister Syed Murad Ali Shah. The Chief Minister emphasized that the government is committed to accelerating development while providing direct relief to citizens affected by ongoing inflation and economic pressures. Comprehensive Rs30 Billion Development Agenda The cabinet approved a massive Rs30 billion agenda covering infrastructure, healthcare, education, and digital governance. â€œWe are focusing simultaneously on infrastructure improvement and social protection to ensure the benefits of governance reach the grassroots level,â€ stated CM Murad Ali Shah. Key Highlights of the Cabinet Decisions 1. Subsidies and Direct Public Relief â€¢ Motorcycle Fuel Subsidy: The cabinet extended the fuel subsidy program until May 31, 2026, with an additional allocation of Rs2 billion. To date, over 548,000 applicants have already received Rs2,000 each. â€¢ Fishermen Support: A Rs515 million fuel subsidy package was approved for fishermen in Karachi, Thatta, Sujawal, and Badin to offset rising diesel costs that have slashed fish production by 20%. 2. Karachi and Regional Infrastructure â€¢ Karachi Roads: Rs6.5 billion was granted for the immediate restoration of roads across 24 town municipal corporations in Karachi. â€¢ Indus River Bridge: Rs147.2 million was allocated for the design of a 1.12km bridge between Hyderabad and Kotri. â€¢ Water and Drainage: Major funding was approved for water supply in Qasimabad (Rs800 million), drainage in Larkana (Rs4 billion), and the S-III sewage project in Karachi (Rs2 billion). 3. Healthcare and Education Initiatives â€¢ Sukkur Trauma Centre: Rs635.48 million was allocated for a 50-bed trauma and emergency center at Ghulam Muhammad Medical College Hospital, expected to be operational by June 2026. â€¢ Early Childhood Education: Rs90 million was approved for a new building at St. Patrickâ€™s High School, Karachi. â€¢ Social Welfare: Rs80 million was earmarked for an orphanage in Umerkot. 4. Governance and Technology â€¢ Digital Courts: Rs48.9 million was approved for the digitization of cases in district courts to facilitate electronically certified copies. â€¢ Sindh Job Portal: Rs86.5 million was allocated for operations, alongside funding for â€˜Indus AI Week 2026â€™. Strategic Global Partnerships The cabinet endorsed the World Bank-backed â€˜Pak Flowâ€™ project aimed at reducing methane emissions at the Jam Chakro landfill. Furthermore, a China Desk will be established within the Investment Department to facilitate agreements following President Asif Ali Zardariâ€™s recent visit to China. The meeting concluded with key administrative appointments, including Faisal Malik as Member (Finance and Policy) of the Sindh Electric Power Regulatory Authority (SEPRA).

Date: 2026-05-06

Details: Written by Shahnawaz Akhter KARACHI â€“ In a significant move to align import taxes with current international market trends, the Federal Board of Revenue (FBR) has officially revised the customs values for imported hand tools. The new rates come after a nine-year period during which the previous values remained stagnant despite global price fluctuations. The Directorate General of Customs Valuation in Karachi issued Valuation Ruling No. 2072/2026 on April 29, 2026, which immediately supersedes the long-standing Ruling No. 1200/2017. Reason for the Revision The decision to re-determine values was prompted by a formal representation from M.A. Tools and Equipment House (Pvt.) Ltd., highlighting that international prices for hand tools have surged significantly since 2017. To ensure fair taxation, the Directorate conducted a preliminary analysis of import data and held consultative meetings with stakeholders on March 26, 2026. The FBR utilized the Market Enquiry method under Section 25(7) of the Customs Act, 1969, to arrive at the new C&F values after other valuation methods were found inapplicable due to inconsistent declared values. New Customs Values for Imported Hand Tools The ruling categorizes brands into Category-A (High-end commercial brands like Ingco, Total, Tolsen, and Hans) and Category-B (Low-end brands). Description of Goods Origin Category A (US$/KG) Category B (US$/KG) Spades, Shovels, Axes & Forks China 2.30 2.05 Pliers China 3.10 2.55 Hand Operated Spanners China 3.10 2.20 Wrenches / Allen Keys / Socket Sets China 3.30 2.42 Hammer with Iron/Steel Mallet China 2.40 1.95 Planes, Chisels & Woodworking Tools China 2.80 2.50 Screwdrivers China 4.00 2.60 Screw Driver Bits and Drill Bits China 2.75 2.25 Empty Plastic Tool Kit Boxes China 1.80 1.50 Note: For origins other than China, the C&F values are generally higher as specified in the full ruling. Strict Implementation for Premium Brands The FBR clarified that elite high-end brandsâ€”such as SATA, DeWalt, Bosch, Makita, Stanley, and Hiltiâ€”are not covered by these specific table values. These premium brands must be assessed by the Clearance Collectorate at values higher than Category-A to reflect their superior market position. Guideline for Importers â€¢ Higher Declared Values: If an importer declares a value higher than the ruling, the assessment will be made on that higher value. â€¢ Air Freight: For consignments imported via air, the difference between air and sea freight will be added to the assessment. â€¢ Appeals: Any person aggrieved by this ruling may file a revision petition under Section 25D of the Customs Act within 30 days. This update is expected to increase revenue collection at the import stage while providing a level playing field for local distributors facing competition from undervalued imports.

Date: 2026-05-06

Details: Published May 6, 2026 Updated 6 minutes ago By Mushtaq Ghumman ISLAMABAD: The All Pakistan Textile Mills Association (APTMA) has sought the intervention of Minister for National Food Security and Research Rana Tanveer Hussain for the revival and implementation of key decisions related to the cotton sector. In a letter to the minister, APTMA Chairman Kamran Arshad drew attention to the approved minutes of the 6th meeting of the Cabinet Committee on Essential/Cash Crops, held under the chairmanship of the deputy prime minister. He highlighted several time-bound priority decisions that require urgent action by the ministry, including: (i) establishment of an industry-led governance structure through the transformation of the Pakistan Central Cotton Committee (PCCC) into the Pakistan Cotton Advisory Council (PCAC); (ii) collection of cotton cess through the Federal Board of Revenue (FBR); (iii) allocation of 70 percent of cess funds exclusively for cotton research and development (R&D); and (iv) inclusion of provinces, research institutions, farmers, and the seed sector in the new institutional framework. â€œSince the Cabinet Committee meeting, the APTMA has repeatedly urged the ministry to ensure swift implementation of all decisions made with the consensus of stakeholders. However, it is regrettable that no concrete measures have yet been initiated by the concerned authorities despite the passage of considerable time and repeated reminders,â€ the APTMA chairman stated. He warned that the inordinate delay in implementation is fraught with significant national loss, particularly as the cotton sowing season has already commenced in various parts of the country. According to him, continued inaction by the Ministry could further accelerate the persistent decline in cotton production, leading to increased imports and putting additional pressure on the countryâ€™s valuable foreign exchange reserves. In view of the foregoing, APTMA has called for immediate action on the following measures: (i) issuance of a notification for the operationalisation of PCAC; (ii) necessary legal amendments to enable the collection of cess through FBR; (iii) allocation of 70 percent of cess funds for R&D; (iv) establishment of the approved industry-led governance structure; and (v) sharing of a time-bound implementation plan with the APTMA. The textile industry, he noted, has consistently demonstrated its commitment to supporting national cotton revival efforts. However, without urgent and decisive policy and institutional actions, the agreed strategy cannot translate into tangible outcomes. He urged the minister to personally intervene to ensure immediate progress on these decisions in order to safeguard the cotton crop and the cotton-based industry, which provides employment to millions across the country. Copyright Business Recorder, 2026

Date: 2026-05-06

Details: Published May 6, 2026 Updated about an hour ago By Recorder Report ISLAMABAD: The Insurance Association of Pakistan (IAP) has proposed relief measures with possible restoration of tax incentives for policyholders for promoting savings and expanding insurance penetration in budget (2026-27). Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, held a meeting at the Finance Division Tuesday with a delegation of the IAP to discuss matters relating to the insurance sector in the context of the Federal Budget 2026â€“27. The delegation was led by Shoaib Javed Hussain, Chairman IAP. The Finance Minister welcomed the delegation and appreciated the constructive engagement of the insurance industry in contributing to the budget consultation process. He emphasized the need for sustained dialogue with key sectors to ensure that policy measures remain aligned with economic priorities and contribute to long-term financial stability and growth. The delegation presented a set of proposals focusing primarily on taxation and regulatory considerations with respect to the insurance sector. Participants discussed various aspects of the existing taxation framework, including the interaction between federal and provincial levies, and their implications for the sector. The need for consistency, coherence, and predictability in the overall tax structure was highlighted in the context of facilitating sectoral development. Discussions also covered the need to ensure clarity in the application of sector-specific laws governing insurance, particularly in relation to the broader taxation framework. The delegation underscored the importance of ensuring that existing legal and regulatory principles remain appropriately aligned with evolving policy and accounting standards. The delegation further proposed measures aimed at promoting savings and expanding insurance penetration, including the possible restoration of tax incentives for policyholders. Facilitating long-term savings instruments and encouraging wider participation, particularly among salaried individuals, were identified as key areas for consideration. Participants also shared views on strengthening the role of the insurance sector in financial sector development, including through improved alignment of investment frameworks and long-term financial instruments. Continued interaction with regulators and policymakers on sector-specific issues was highlighted as essential. The Finance Minister acknowledged the proposals presented by the delegation and noted that these would be carefully reviewed in the context of the upcoming budget. He reiterated the governmentâ€™s commitment to advancing the development of the financial sector, while maintaining a balanced and sustainable approach to fiscal policy. The meeting concluded with a shared understanding on the need for ongoing engagement between the Government and the insurance industry to facilitate informed policymaking and enhance the sectorâ€™s contribution to economic growth. Copyright Business Recorder, 2026

Date: 2026-05-06

Details: Written by Faisal Shahnawaz ISLAMABAD, May 6, 2026 â€” The Federal Board of Revenue (FBR) has announced a mega auction of confiscated vehicles scheduled for May 11, 2026, in Peshawar. According to Auction Schedule No. 20/2025-26 issued by the Collectorate of Customs (Enforcement), Peshawar, the auction will be held at the Custom House at 10:00 AM. Vehicles and goods are located across multiple state warehouses, including Peshawar, Nowshera, Mardan, Abbottabad, Bannu, Kohat, and Dera Ismail Khan. The auction will be conducted by M/s Easy World, a government-appointed auctioneer, and will follow an â€œas is, where isâ€ basis, meaning bidders must inspect items prior to bidding and accept them in their existing condition. Wide range of vehicles on offer The auction features a large number of vehicles, including various models of Toyota, Honda, Suzuki, Mitsubishi, and Nissan. Notable listings include Toyota Land Cruiser, Prado, Hilux, Prius, Corolla, and Honda Vezel and Accord models. Some vehicles are partially or fully damaged, while others are listed without keys or subject to legal conditions such as court stays, which bidders are required to consider before participating. Multiple locations and categories Vehicles are spread across different warehouses, including Enforcement godowns in Peshawar, Mardan, Nowshera, Abbottabad, and D.I. Khan. The listings also include trucks, buses, SUVs, and passenger cars of varying model years, ranging from older vehicles to relatively newer imports. Bidding and eligibility Authorities advised prospective bidders to thoroughly examine vehicles before participating in the auction. Only those who comply with auction procedures and payment requirements will be eligible to place bids. The FBR said such auctions are part of ongoing enforcement efforts to dispose of confiscated goods and generate revenue for the national exchequer. Interested participants can obtain further details regarding auction procedures, vehicle listings, and inspection schedules from the relevant customs offices.

Date: 2026-05-06

Details: Written by Shahnawaz Akhter ISLAMABAD, May 6, 2026 â€” The Federal Board of Revenue (FBR) has invited applications from eligible individuals for the grant of customs clearing agents licences, setting May 20, 2026, as the deadline for submission. The licences will be issued through a competitive process under Rule 91 of the Customs Rules, 2001, the FBR said in an official notice. Eligibility criteria Applicants must meet several requirements, including being Pakistani citizens, at least 21 years of age, and graduates from recognized universities. Candidates are also required to demonstrate adequate computer knowledge to handle Goods Declarations (GD) in systems such as PRAL and the Customs Computerized System (CCS). In addition, applicants must have a clean legal record and a sound financial standing verified by a bank. Application process and fee Interested candidates are required to submit applications using the prescribed Form-A to the relevant licensing authority â€” typically the Collector of Customs â€” by May 20, 2026. Each application must be accompanied by a non-refundable fee of Rs10,000 in the form of a pay order. Relevant documents, including the application form, syllabus, and fee details, are available through official channels. Qualification test All eligible applicants, including existing provisional licence holders, will be required to pass a qualification test to be conducted by the Institute of Business Administration. The test will consist of a written examination (100 marks) and a viva voce (50 marks). Candidates must secure at least 50% marks in both components to qualify. The written test will include a computer proficiency section focused on GD filing and PRAL systems, along with a broader assessment based on the prescribed syllabus. Candidates must pass the computer section to have the rest of their paper evaluated. Examination centres and next steps Examinations will be held in major cities including Islamabad, Lahore, Karachi, Peshawar, and Quetta. Only shortlisted candidates will be allowed to appear after scrutiny of applications by licensing authorities. The IBA will announce test dates, issue roll number slips, and communicate further details through its official website, email notifications, and national advertisements. The FBR said successful candidates will be required to fulfill additional conditions under Rule 94 of the Customs Rules, 2001, before being granted licences.

Date: 2026-05-05

Details: Published May 5, 2026 Updated about 2 hours ago By Sohail Sarfraz ISLAMABAD: A complaint involving alleged tax evasion of over Rs 70 million and the suspension of a sales tax registration has been closed by the Federal Tax Ombudsman (FTO), underscoring that the Office does not entertain frivolous complaints or matters already pending before courts of law. The case, which mainly raised questions about procedural non-compliance by tax administration, ultimately fell outside the FTOâ€™s jurisdiction due to parallel litigation. The complaint was filed under Section 10(1) of the Federal Ombudsman Ordinance, 2000, challenging the suspension of the complainantâ€™s Sales Tax Registration Number (STRN). The complainant contended that the registration was suspended on May 2, 2025, without prior notice or an opportunity of hearingâ€”allegedly in violation of Section 21 of the Sales Tax Act, 1990, read with Rule 12 of the Sales Tax Rules, 2006, and relevant case law of the Sindh High Court. It was further argued that, under the law, such suspension is temporary and becomes void if not followed by a blacklisting order within 90 days. According to the complaint, despite the lapse of more than the prescribed period, the authorities neither issued a blacklisting order nor restored the STRN, resulting in financial losses and disruption of business operations. However, the Revenue Division, in its comments, raised serious concerns regarding the complainantâ€™s tax declarations. It was pointed out that the complainantâ€”registered as a manufacturer of ice blocksâ€”had declared an unusually high carry-forward amount of over Rs. 19 million without making any corresponding tax payments. This discrepancy translated into a potential sales tax liability exceeding Rs. 70 million, with officials questioning the plausibility of maintaining such large stock volumes in a business dealing with a perishable commodity like ice. During proceedings, it also emerged that the complainant had filed a constitutional petition before the Sindh High Court seeking the same reliefâ€”namely, the restoration of the suspended registrationâ€”after approaching the FTO. The Ombudsman observed that both proceedings effectively sought identical outcomes. In light of this, the FTO ruled that the matter had become sub judice, thereby falling outside its jurisdiction under Section 9(2)(a) of the FTO Ordinance, 2000, which bars the office from intervening in cases pending before a competent court. Consequently, the complaint was closed without further investigation, and the case record was consigned. The decision reinforces the Tax Ombudsmanâ€™s stance that while genuine grievances are addressed, frivolous or parallel litigations will not be entertained, ensuring that the forum is not misused and remains focused on legitimate taxpayer relief. FTO Office demonstrates Zero Tolerance in cases where any sort of tax fraud has been detected by tax authorities or under investigation at FBR. Copyright Business Recorder, 2026

Date: 2026-05-04

Details: Published May 4, 2026 Updated about an hour ago By Naseem Usman KARACHI: The Federal Investigation Agency (FIA) has allegedly taken over Pakistanâ€™s historic Cotton Exchange Building with the apparent backing of the Evacuee Trust Property Board (ETPB) to establish its Karachi headquarters. The move has drawn sharp criticism from the buildingâ€™s affectees, particularly because the matter is already subjudice before the Sindh High Court. Critics have termed the occupation unlawful and a blatant disregard for judicial proceedings. The fallout from this alleged seizure has been immediate and far-reaching. The daily cotton spot rate, a critical pricing benchmark for Pakistanâ€™s domestic cotton trade, has remained suspended since December 12, 2025, leaving traders, ginners and farmers without an official price reference and pushing the entire cotton supply chain into a state of uncertainty. The domestic cotton market is already under considerable strain. Available stocks have dwindled to negligible levels, with whatever little remains changing hands at prices between Rs19,500 and Rs21,000 per maund. Despite the grim supply situation, early signs of activity in the new crop season have offered some relief to market participants. Future trading for the 2026-27 crop has begun on a partial basis, with Phutti deals of forty kilograms being settled at Rs10,000 and ginned cotton fetching Rs21,750 per maund, signalling cautious optimism among buyers and sellers alike. On the global front, international cotton markets are witnessing a strong bullish momentum. New York Cotton Futures have surged to hit the key target of 85 US cents, reflecting robust international demand and a tightening global supply outlook that could have significant implications for Pakistani exporters in the months ahead. Back home, the broader industrial landscape continues to present a challenging picture. Successive hikes in petroleum prices, electricity tariffs and gas charges, compounded by the State Bank of Pakistanâ€™s decision to raise the benchmark interest rate, have taken a heavy toll on industrial output across the board. The textile sector, already navigating a difficult operating environment, has been among the hardest hit, with rising input costs squeezing profit margins and dampening production capacity. Against this backdrop of domestic challenges, Pakistanâ€™s textile industry has managed to make its mark on the world stage. Pakistani exhibitors delivered a standout performance at the prestigious Techtextil and Texprocess international trade fairs, showcasing the sectorâ€™s technical capabilities and product diversity to a global audience. Cotton prices remained largely stable in the local market during the past week amid extremely thin trading activity. Although the current season has come to an end, very little stock remains, while reports are beginning to emerge about the partial arrival of new crop cotton. Some future contracts were settled at Rs 21,750 per maund for cotton and Rs 10,000 per 40 kilograms for Phutti. Tensions in the Middle East have created abnormal conditions in markets, particularly causing a sharp rise in energy prices whose negative effects are becoming visible across various commodities, including cotton. International cotton markets are also showing an upward trend in prices. Industrial production has been adversely affected by rising energy costs, including petroleum products, electricity and gas, as well as an increase in the State Bankâ€™s policy rate. The textile sector has been among those bearing the brunt of these developments. Cotton prices are showing firmness globally. Drought conditions in the United States, combined with intense heat waves over cotton-growing regions in Pakistan and India, are pointing toward higher cotton prices in the new season. Production in Brazil also appears lower than expected, and reports from Africa are similarly discouraging. Market observers believe that cotton prices in Pakistan are likely to remain favourable. The Evacuee Trust Property Board (ETPB) has been in occupation of the Cotton Exchange building since December 12 with the assistance of the FIA, which has made it impossible to issue the daily cotton spot rate, a figure of considerable importance to the market. The small quantities of cotton still available in Sindh and Punjab are trading at between Rs 19,500 and Rs 21,000 per maund, depending on quality and condition. Karachi Cotton Brokers Forum Chairman Naseem Usman stated that international cotton markets are trending upward. New York cotton futures were quoted between 81.85 and 84.56 US cents per pound. According to the USDA weekly export and sales report, a total of 162,900 bales were sold for the 2025-26 season. Vietnam led all buyers with purchases of 55,600 bales, followed by Pakistan in second place with 33,300 bales, and Honduras in third with 29,700 bales. For the 2026-27 season, Turkey, China, Guatemala, Honduras and Pakistan collectively purchased approximately 105,700 bales. Cotton prices continue to reach new highs, with the 85-cent target nearly achieved. Both July and December contracts closed near their weekly highs, signalling the possibility of a further bullish trend in the market. However, this sharp price surge is largely driven by supply concerns, particularly due to drought conditions in Brazil and the United States. Should weather conditions improve and rainfall occur, production could increase, potentially pulling prices down by around 500 points. The current rally is considered overly aggressive and difficult to sustain over the long term, though prices could still climb as high as 88 cents. Demand remains a weak factor in the market at present. Textile mills have not increased production, nor are they shifting from synthetic fibre to cotton, as consumer demand has shown no meaningful growth. The market is therefore entirely supply-driven at this stage. Furthermore, no major shift in the production season is expected, as planting has already begun in the Northern Hemisphere and the area under cultivation is largely fixed. Shortages of resources, seeds, financing, and machinery continue to hinder any expansion in cultivated acreage. Weather continues to dominate the market outlook. Prices may remain volatile within the 80 to 85 cent range. The narrowing price gap between old and new crop contracts suggests that this rally is being driven purely by seasonal factors rather than any fundamental shift in market dynamics. Since the United States and Brazil account for a significant share of global cotton trade, crop conditions in both countries will continue to influence market direction. Mills have stepped up price-fixing activity in recent weeks, which could provide some support to prices through May. Exports performed better than expected, pointing to a possible improvement in demand, though mills continue to report sluggish business activity. Pakistanâ€™s textile sector demonstrated outstanding performance at the Techtextil and Texprocess 2026 exhibitions held in Frankfurt, Germany, successfully capturing the attention of international buyers. Pakistanâ€™s participation was characterized by deep buyer interest in its products, active engagement, and a growing international reputation. The event brought together over 1,700 exhibitors from 54 countries, reflecting the depth and diversity of the global textile industry. From established manufacturers to emerging players, participants presented new developments and practical solutions that highlighted steady industry growth and adaptability. Thousands of trade visitors, including buyers, industry professionals, and decision-makers, attended the exhibitions and actively interacted with exhibitors these engagements created valuable opportunities for networking, sourcing, and future business partnerships. The Trade Development Authority of Pakistan (TDAP) led a national pavilion featuring Sadaqat Limited, Haroon Fabrics, JK Spinning, and Ahmed Fine Weaving. Independent exhibitors, including Artistic Milliners, H Nizam Din & Sons, Master Textile, Sapphire Finishing, Nishat, Pakwinz International, and M Bilal Textiles, further strengthened Pakistanâ€™s presence with a diverse product range. Mohd Noman Qadir, Export Manager at Pakwinz International, said the fair was highly productive, with strong orders from European buyers. He added that their presence in Germany aims to explore advanced technologies and European developments to help boost exports and support economic growth back home. Raheel Walani, Senior Manager Sales & Marketing at Art Mill said that the fair was very successful. The flow of visitors was strong, and they attracted buyers from many countries. He added that the company secured excellent business opportunities during the event. Copyright Business Recorder, 2026

Date: 2026-05-04

Details: Published May 4, 2026 Updated about 2 hours ago By Reuters NEW YORK: Investors will look for another batch of earnings reports and fresh employment data to drive a resilient US stocks rally higher next week, in the face of spiking oil prices and a more hawkish Federal Reserve. Major US stock indexes were at record-high levels on Thursday, following a sharp month-long rebound from concerns about economic fallout from the Middle East war. A broadly strong season for corporate profits is underpinning bullishness for US equities and countering other market headwinds. The benchmark S&P 500 and the technology-heavy Nasdaq Composite both ended April on Thursday with their biggest monthly gains since 2020. The S&P 500 rose more than 10 percent for April, while the Nasdaq jumped over 15 percent. â€œWe have these fast-rising profits on one side, and then on the other, we have upward pressures on oil prices and bond yields,â€ said Angelo Kourkafas, senior global investment strategist at Edward Jones. â€œWeâ€™ve rallied a lot in April, so potentially we may enter some period of consolidation as this pull and push is playing out.â€ Stocks this week largely shrugged off a renewed surge in oil prices with benchmark Brent crude topping USD120 a barrel and hitting a four-year high before pulling back. Energy markets were poised to swing on developments in the two-month US-Israeli war with Iran, which has choked off a major supply of oil. While a ceasefire agreement helped catalyze the stock marketâ€™s rebound, continued tensions in the Middle East were poised to keep investors on edge. â€œWith each passing day, the economic risk grows,â€ said Jeff Buchbinder, chief equity strategist for LPL Financial. â€œIf weâ€™re sitting here in a month or two, and Brent crude is still over USD120, and weâ€™ve still got a blockade and maybe bombs are still falling, that is a very different scenario than what weâ€™re looking at right now.â€ More than 100 companies in the S&P 500 are set to post results next week, with markets digesting the heart of the reporting season. Overall S&P 500 earnings as of Thursday were on track to climb more than 20 percent in the first quarter from a year ago, according to Tajinder Dhillon, head of earnings and equity research at LSEG Data & Analytics. This week, megacap companies investing in artificial-intelligence infrastructure reported results that yielded mixed market reactions. Shares of Alphabet jumped on Thursday after the Google parent showed blowout cloud-computing growth, while shares of Microsoft and Meta Platforms slumped after less stellar results. Data analytics firm Palantir, entertainment company Walt Disney and restaurant chain McDonaldâ€™s are among the high-profile companies due to report next week.

Date: 2026-05-04

Details: Published May 4, 2026 Updated about 2 hours ago By Reuters SYDNEY: Australian shares rose for the first time this week on Friday, with miners leading a broad-based rebound, as an overnight pullback in oil prices encouraged investors to cautiously rebuild positions. The S&P/ASX 200 index closed 0.7 percent higher at 8,729.80, marking its best session since April 8, but still lost 1.4 percent over the week after eight consecutive sessions in the red. Oil prices eased overnight from a four-year peak on Thursday, while strong earnings from mega-cap technology companies lifted Wall Street. Some buying interest in the ASX200 was expected after consecutive sessions of losses, William Taylor, COO and portfolio manager at etfshares, said, adding that the solid US corporate results buoyed global risk appetite. However, Taylor cautioned against treating the benchmarkâ€™s current level as a firm floor, saying â€œtodayâ€™s bounce looks more like a relief rally than a clear change in market directionâ€. â€œThe rally still needs to be tested, particularly with oil prices sensitive to US-Iran tensions, inflation risks elevated, and the RBA decision still ahead.â€ Miners led gains, rising 2.1 percent, with Rio Tinto and BHP each up over 2 percent after iron ore prices firmed on improved Chinese factory activity. Although the sector is still down 3.2 percent for the week. Financials fell 0.3 percent, with a 2.8 percent drop in ANZ weighing the sector down. The bank flagged an increase in provisions to cover potential loan loss stemming from the Middle East conflict, while also reporting a 6 percent rise in half-year cash earnings. Meanwhile, major grocer Coles rose 3.7 percent after reporting higher quarterly sales, which took the consumer staples index 1.1 percent higher. The focus next week will be on the central bankâ€™s monetary policy decision on Tuesday, where a quarter-point rise in the cash rate is about 83 percent priced in by markets. A hike delivered with a measured message could comfort investors, but messaging that stresses concerns about inflation could put renewed pressure on equities, Taylor said.

Date: 2026-05-04

Details: Written by Mrs. Anjum Shahnawaz ISLAMABAD, May 4, 2026 â€“ The Federal Board of Revenue (FBR) is preparing to introduce strict enforcement measures to boost revenue collection and reduce the widening shortfall in the ongoing fiscal year. An urgent meeting was held at the FBR headquarters on Monday, chaired by Chairman Rashid Mehmood Langrial and attended by senior officials of the tax authority. The session focused on revenue mobilisation strategies for the Mayâ€“June period of FY2025-26. Focus on Enforcement and Recovery According to officials, the meeting reviewed all aspects of enforcement actions, including recovery of outstanding tax arrears and legal mechanisms to ensure compliance. Sources said the FBR is considering imposing strict recovery actions in cases where taxpayers are legally liable but have not paid dues despite the expiry of stay orders issued by courts. Possible Account Attachments and Legal Actions The new measures may include attachment of bank accounts and other enforcement actions in cases where court stays have expired, particularly if more than six months have passed since such orders lapsed. Officials emphasized that recovery of pending tax arrears remains the top priority, and all legal options will be exercised where applicable. No New Taxes or Mini-Budget Planned Sources clarified that the proposed revenue mobilisation drive does not involve any new taxation measures or a mini-budget for the outgoing fiscal year. Instead, the focus will remain on recovering existing dues and improving compliance during the remaining months of FY2025-26. Governmentâ€™s Revenue Priority The FBR reiterated that strengthening enforcement and ensuring timely recovery of outstanding taxes is essential to meeting annual revenue targets and reducing fiscal pressure. Officials believe that improved recovery mechanisms could help narrow the revenue gap without introducing additional tax burdens on the public.

Date: 2026-05-04

Details: Written by Shahnawaz Akhter Karachi, May 4, 2026 â€“ The Federal Board of Revenue has revised customs values of fire alarm system parts following the detection of under-invoicing by importers. The Directorate General of Customs Valuation issued Valuation Ruling No. 2075/2026 under Section 25A of the Customs Act, 1969 to standardize import values and prevent revenue losses. Reason for Revision According to the ruling, discrepancies in declared import values led to inconsistent assessments across collectorates, prompting authorities to conduct a detailed analysis of import data, market prices, and stakeholder input. Officials reviewed 90 days of import data and conducted market inquiries but found significant variations, making traditional valuation methods unreliable. As a result, customs values were determined under Section 25(9) of the Customs Act. Revised Customs Values of Fire Alarm System Parts The FBR has set new customs values (C&F) for various fire alarm system components across three categories (A, B, and C): S. No. Description of Goods PCT Code Cat-A (USD) Cat-B (USD) Cat-C (USD) 1 Addressable Fire Alarm Control Panel (100 devices) 8531.1000 580.00 377.00 301.60 2 Addressable Fire Alarm Control Panel 8531.1000 1530.00 994.50 795.60 3 02 Loop Addressable Control Panel 8531.1000 1900.00 1235.00 988.00 4 Photoelectric Smoke Detector 8531.1000 14.00 9.10 7.28 5 Detector Base with LED 8531.9090 11.50 7.48 5.98 6 Heat Detector 8531.1000 13.00 8.45 6.76 7 Multi Detector 8531.1000 16.50 10.72 8.58 8 Flame Detector 8531.1000 280.00 182.00 145.60 9 Detector Base 8531.9090 2.50 1.62 1.30 10 Double Action Pull Station 8531.1000 23.00 14.95 11.96 11 Weatherproof Pull Station 8531.1000 27.50 17.88 14.30 12 Weatherproof Box 8531.1000 27.00 17.55 14.04 13 Interface Module 8531.1000 13.00 8.45 6.76 14 Indoor Sounder with Flasher 8531.1000 38.50 25.03 20.02 15 Outdoor Sounder with Flasher 8531.1000 51.00 33.15 26.52 16 Weatherproof Back Box 8531.1000 10.00 6.50 5.20 17 Loop Isolator Module 8531.1000 24.00 15.60 12.48 18 Conventional 2 Zone Panel 8531.1000 129.00 83.85 67.08 19 Conventional 4 Zone Panel 8531.1000 158.00 102.10 82.16 20 Conventional 8 Zone Panel 8531.1000 220.00 143.00 114.40 21 Optical Detector 8531.1000 7.50 4.88 3.90 22 Conventional Base 8531.9090 2.50 1.62 1.30 23 Optical Multi Detector 8531.1000 8.00 5.20 4.16 24 Heat Detector 8531.1000 7.00 4.55 3.64 25 Manual Call Point 8531.1000 10.00 6.50 5.20 26 Sounder with Flasher 8531.1000 33.00 21.45 17.16 27 Sensor Base 8531.9090 1.90 1.23 0.99 28 Addressable Manual Call Point 8531.1000 35.00 22.75 18.20 29 Addressable Sounder with Flasher 8531.1000 16.00 10.40 8.32 Values are in US dollars per piece (C&F basis). Implementation and Key Conditions The ruling states that if declared import values exceed the prescribed customs values, the higher value will be used for duty assessment. Additionally, air freight differences will be added where applicable. Authorities have directed all customs collectorates to ensure strict implementation and report any anomalies. Impact on Imports The revised valuation is expected to curb under-invoicing practices, improve transparency, and enhance revenue collection. It will also create a uniform benchmark for assessing fire alarm system imports across Pakistan. Conclusion The move by the FBR to revise customs values of fire alarm system parts reflects ongoing efforts to strengthen compliance and standardize import valuations under the Customs Act, 1969.

Date: 2026-05-03

Details: Written by Mrs. Anjum Shahnawaz Islamabad, May 3, 2026 â€“ Federal Minister for National Food Security and Research Rana Tanveer Hussain has emphasized the need for dairy sector tax reforms in Pakistan, calling for rationalized taxation and structural changes to improve affordability, ensure safe nutrition, and support farmers. He made these remarks during a pre-budget 2026-27 consultation jointly organized by the Sustainable Development Policy Institute and the Pakistan Dairy Association, according to a press release issued on Sunday. Focus on Tax Relief and Sector Growth The minister noted that livestock contributes nearly 60 percent to Pakistanâ€™s agriculture sector and holds strong potential for improving domestic nutrition and boosting exports. He acknowledged that existing taxation policies, particularly General Sales Tax (GST) on dairy products, have negatively impacted production and sectoral growth. â€œSoftening of the tax regime can help increase both production and revenue,â€ he said, adding that reducing GST on milk is feasible. He also revealed that pilot projects for pasteurization and the development of â€œsafe milk citiesâ€ are under consideration to enhance quality and formalize the sector. Concerns Over Informal Economy In his welcome remarks, Dr Abid Qaiyum Suleri, Executive Director of SDPI, proposed multiple taxation scenarios and suggested placing processed milk in a third schedule. He warned that rural milk collection centres were shutting down, as pricing policies for processed milk were impacting loose milk markets. Meanwhile, Usman Zaheer Ahmad, Chairman of the Pakistan Dairy Association, highlighted that nearly 40 percent of children in Pakistan suffer from stunting due to malnutrition, despite milk being widely consumed. He noted that around 98 percent of the dairy sector remains informal, with limited quality control mechanisms. He further revealed that the imposition of 18 percent GST in 2024 led to a 27 percent decline in the formal dairy sector. He proposed reducing GST to 10 percent and integrating parts of the informal economy into the tax net, potentially generating up to Rs250 billion in revenue. Nutrition and Public Health at Risk Zainab Naeem, Head of Ecological Sustainability and Circular Economy Unit at SDPI, stressed that milk should be treated as a basic nutritional necessity rather than a luxury item. She called for policies to enhance affordability for low- and middle-income households. Farrah Naz, Country Director of the Global Alliance for Improved Nutrition, said malnutrition costs Pakistan around 3 percent of its GDP annually, with over 40 percent of children under five affected by stunting. She advocated reducing GST on milk from 18 percent to 5 percent and strengthening formal dairy systems. Policy and Investment Challenges Naeem Hassan, Director of Business Taxation at the Ministry of Finance, described the recommendations presented by SDPI and the Pakistan Dairy Association as practical and implementable. Additional Secretary at the Special Investment Facilitation Council, Sajid Mehmood Qazi, pointed out structural weaknesses in the tax system, noting that over-reliance on documented sectors discourages formal business growth. Eman Fatima from the Prime Ministerâ€™s Office Board of Investment highlighted regulatory hurdles affecting new entrants in dairy farming, reiterating that high GST has slowed sectoral growth. Food Safety and Long-Term Strategy Dr Ihtesham Khan of the Food and Agriculture Organization raised concerns about public health, warning that loose milk often contains harmful micro-toxins due to poor feed quality and lack of testing. Dr Sajid Amin Javed, Deputy Executive Director (Research) at SDPI, emphasized the need for a long-term, integrated policy framework combining fiscal, health, and rural development strategies. He called for incentivizing private sector investment and developing cooperative models to connect small farmers with markets. Outlook The consultation highlighted a broad consensus on the need for dairy sector tax reforms in Pakistan, with stakeholders urging the government to reduce GST, formalize the industry, and prioritize nutrition and food safety in the upcoming federal budget 2026-27.

Date: 2026-05-03

Details: â€¢ Seven major producers will add 188,000 barrels per day to their total production quota for June Published May 3, 2026 Updated about 9 hours ago By Reuters LONDON: Saudi Arabia, Russia and five other OPEC+ countries increased their oil production quota on Sunday in an expected move aimed at demonstrating continuity at the cartel after the shock withdrawal of the United Arab Emirates. The seven major producers will add â€œ188,000 barrels per dayâ€ to their total production quota for June, as part of â€œtheir collective commitment to support oil market stability,â€ according to a statement published by OPEC+. The statement made no mention of the United Arab Emirates, which quit the body this week. Oil market analysts had widely expected the increase of 188,000 barrels, which is similar to the 206,000-barrel daily increases OPEC+ announced in both March and April, subtracting the portion allotted to the UAE. But raising the quota on paper may not have much impact on actual production, which is already short of the limit. Untapped OPEC+ reserves are mainly located in the Gulf region, and exports there are trapped by the blockade of the vital Strait of Hormuz, imposed by Iran in response to the US-Israeli strikes that started the war on February 28. Jorge Leon, an analyst at Rystad Energy, told AFP on Sunday that the cartel was looking to send â€œa two-layer messageâ€ that the UAEâ€™s exit would not disrupt how OPEC+ operates and that the group still exerts control over global oil markets despite massive disruption to oil trade due to the war. â€œWhile output is increasing on paper, the real impact on physical supply remains very limited given the Strait of Hormuz constraints,â€ Leon told AFP. â€œThis is less about adding barrels and more about signaling that OPEC+ still calls the shots.â€ The UAE, one of the worldâ€™s top producers, announced April 28 it was withdrawing from the Organization of the Petroleum Exporting Countries (OPEC) and the expanded OPEC+ group, after chafing at their production quotas. The withdrawal took effect on Friday. Neither group has reacted publicly so far â€“ making the lack of any mention of the UAE in Sundayâ€™s statement notable. The statement followed an online meeting by OPEC+ members Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia and Saudi Arabia.

Date: 2026-05-03

Details: Published May 3, 2026 Updated a day ago By Reuters NEW YORK: US natural gas futures edged up about 1percent to a fresh three-week high on Friday on a drop in output over the past month and near-record liquefied natural gas exports. Front-month gas futures for June delivery on the New York Mercantile Exchange rose 3.7 cents, or 1.3percent, to USD2.804 per million British thermal units (mmBtu), putting the contract on track for its highest close since April 7 for a second day in a row. For the week, the front-month was up about 2percent after gaining about 10percent last week. In the cash market, average prices at the Waha Hub in West Texas have remained in negative territory for a record 60 days in a row as pipeline constraints trap gas in the Permian region, the nationâ€™s biggest oil-producing shale basin. Daily Waha prices first averaged below zero in 2019. They did so 17 times in 2019, six times in 2020, once in 2023, 49 times in 2024, 39 times in 2025, and a record 69 times so far this year. Waha prices have averaged a negative USD2.17 per mmBtu so far in 2026, compared with a positive USD1.15 in 2025 and a positive USD2.88 over the past five years (2021 to 2025). Financial group LSEG said average gas output in the US Lower 48 states fell to 109.8 billion cubic feet per day (bcfd) in April, down from 110.4 bcfd in March and a monthly record high of 110.7 bcfd in December 2025. On a daily basis, output was down even more, on track to start May at a preliminary 108.6 bcfd on Friday as low spot prices prompted energy firms like EQT, the second-largest US gas producer, to temporarily reduce production. Preliminary data, however, is often revised later in the day. Analysts said mostly mild weather earlier this spring allowed energy firms to inject more gas into storage than usual. They noted, however, that recent output declines coupled with cooler weather and higher demand likely reduced the inventory surplus to around 7percent above normal during the week ended May 1, down from 8percent above during the week ended April 24. Looking ahead, meteorologists forecast the weather will remain mostly near normal through May 16. LSEG projected average gas demand in the Lower 48 states, including exports, would slide from 103.2 bcfd this week to 100.0 bcfd next week and 99.4 bcfd in two weeks. The forecasts for this week and next week were similar to LSEGâ€™s outlook on Thursday. Average gas flows to the nine big US LNG export plants rose to a monthly record of 18.8 bcfd in April, up from 18.6 bcfd in March and the prior all-time high of 18.7 bcfd in February.

Date: 2026-05-02

Details: Published May 2, 2026 Updated about 2 hours ago By Reuters NEW YORK: The benchmark S&P 500 and the Nasdaq Composite touched record highs on Friday and were on course for their longest weekly winning streaks since 2024 as strong corporate earnings helped investors look past inflation risks. Sentiment was boosted after a report from Iranian state media said Tehran had sent its latest proposal for negotiations with the United States to Pakistani mediators on Thursday. Fridayâ€™s session wraps up a heavy week of Big Tech earnings and economic data. Analysts now see S&P 500 first-quarter earnings growth at 27.8 percent - the fastest pace since the fourth quarter of 2021 and up from 16.1 percent last week, according to LSEG IBES data. Markets will wait to see if the rally holds in May, historically the start of a weaker six-month stretch for stocks. Since 1945 through April 2026, the S&P 500 has gained an average of about 2 percent from May to October, according to data from Fidelity. That compares with an average gain of about 7 percent from November through April. However, the May-to-October period has seen more solid returns in the last decade, suggesting the strategy to â€œsell in May and go awayâ€ is not without risks. Economic data released this week raised fears the equity buying frenzy was due for a reality check. Although US economic growth regained momentum in the first quarter, consumer spending, the economyâ€™s main growth engine, decelerated, while the personal savings rate declined, suggesting households tapped into savings to support outlays. â€œIf we see persistently high oil prices for a prolonged period of time, that will increase transportation costs and the cost of manufacturing goods, which will cascade into higher prices overall,â€ said Devin Cattelan, portfolio manager at Verecan Capital Management. US manufacturing activity was steady in April, but supplier delivery performance worsened as the Middle East conflict disrupted shipping in the Strait of Hormuz, boosting prices for raw materials and other inputs to a four-year high. Adding to the unease, US President Donald Trump said he would increase tariffs on cars and trucks from the European Union to 25 percent, saying the EU had not complied with its trade deal. At 12:17 p.m. ET, the Dow Jones Industrial Average was flat, the S&P 500 rose 42.15 points, or 0.58 percent, to 7,251.16, and the Nasdaq Composite gained 266.35 points, or 1.07 percent, to 25,158.67. Six of the 11 main S&P sectors were in the green, with the S&P 500 information technology sector gaining the most with a 1.6 percent rise. The S&P 500 ended April with its biggest monthly percentage gain since November 2020, while the Nasdaq Composite advanced the most since April 2020. The Dowâ€™s monthly rise was its biggest since November 2024. Apple jumped 4.8 percent after robust demand for its flagship iPhone 17 and MacBook Neo led the company to forecast solid sales growth for the fiscal third quarter.

Date: 2026-05-02

Details: Published May 2, 2026 Updated about 2 hours ago By Reuters BENGALURU: Indexes tracking emerging market stocks and currencies inched up in holiday-thinned trade on Friday with attention on the Iran war and the prospect of more intervention to support the Japanese yen. MSCIâ€™s gauge tracking global EM currencies was up 0.2 percent, set for its biggest monthly gain since November 2023 in April. The stocks equivalent was also up 0.2 percent, on track for its sharpest monthly advance since May 2009 last month. Both indexes were set for marginal weekly gains as uncertainty over the Iran conflict largely offset any optimism around corporate earnings. On Friday, the Japanese yen suddenly jumped against the dollar, a day after official buying lifted the fragile currency. â€œThe bigger issue is whether intervention can do more than briefly stabilise markets. Japan faces structural pressures: it is a major energy importer amid elevated oil prices, and its central bank is cautiously pursuing policy normalisation after years of ultra-loose settings,â€ Elwin de Groot, head of macro strategy at Rabobank, said. â€œAuthorities can resist market forces for a time, but they cannot fundamentally change them.â€ The dollar index, which measures the greenback against a basket of currencies, dipped 0.1 percent. South Africaâ€™s rand weakened 0.3 percent, partly due to a 1 percent fall in gold prices, while most currencies in emerging Europe slipped against the euro. Romaniaâ€™s leu fell to a record low versus the euro on Thursday due to worries about the future of Ilie Bolojanâ€™s minority government which faces a no confidence vote in early May. Trading volumes were thin on Friday as Poland, Hungary, Romania, Turkey, South Africa and many developed European markets were shut for public holidays. Meanwhile, progress in the Middle East conflict was stalled as concerns of renewed military escalation between the US and Iran led investors to price in continued disruption to shipping through the crucial Strait of Hormuz. Since its outset, the conflict has battered global markets and clouded prospects of global economic growth as countries scrambled to tackle the impact of energy-driven inflation pressures. This week, the US Federal Reserveâ€™s board was the most divided since 1992, as some policymakers thought an â€œeasing biasâ€ in the policy statement was not appropriate amid the conflict. European Central Bank President Christine Lagarde said on Thursday the option of an interest rate hike was already on the table, while the Bank of England said the worst economic impacts could entail â€œforcefulâ€ rate rises. More economic data and interest rate decisions next week will provide further clarity on the warâ€™s impact on emerging economies.

Date: 2026-05-02

Details: Published May 2, 2026 Updated about 2 hours ago By Press Release MUSCAT: The Trade Development Authority of Pakistan (TDAP), in collaboration with the Embassy of Pakistan in Oman, successfully organized a three-day visit of a delegation from the Rice Exporters Association of Pakistan (REAP) to Oman from April 27â€“29, 2026. The visit aimed to boost bilateral trade, particularly in the rice sector, and explore new avenues for cooperation between Pakistan and Oman. The REAP delegation, comprising 18 members, commenced its engagements with a meeting at the Oman Chamber of Commerce and Industry (OCCI), where they were warmly received by Chairman Sheikh Faisal Bin Abdullah Al Rawas. Both sides held detailed discussions on enhancing bilateral trade, with a particular focus on increasing Pakistanâ€™s rice exports to Oman. The Chairman OCCI expressed keen interest in strengthening trade ties and announced plans to send a multi-sectoral delegation of Omani importers to Pakistan in the third week of May 2026. He also shared ongoing efforts to resolve the Oman visa restrictions for Pakistani nationals, expressing optimism for a positive outcome in the near future. In collaboration with OCCI, the Pakistan Mission in Muscat organized a business networking event connecting REAP members with key stakeholders in Omanâ€™s rice market. The event was attended by major importers, distributors, hypermarkets, and food companies. Presentations were delivered highlighting Pakistanâ€™s rice production capacity and export potential, especially for the GCC market. The session concluded with productive B2B interactions, fostering direct engagement between Pakistani exporters and Omani buyers. Recognizing logistical challenges in regional trade, the Pakistan Mission also facilitated a high-level meeting between the REAP delegation and representatives from shipping companies, Omanâ€™s Ministry of Transport, port authorities, and logistics firms. Discussions focused on improving supply chains and addressing issues such as delays at Jebel Ali Port. Omani stakeholders proposed practical and cost-effective solutions, including alternative routing through Omani ports to streamline exports to GCC destinations. On April 29, the delegation met with Sheikh Salim Abdullah Al Ghufaili, Director General of the Food Security Authority under the Ministry of Agriculture, Fisheries and Water Resources. The Authority plays a key role in procuring rice for Omanâ€™s strategic reserves. The meeting aimed to familiarize Pakistani exporters with the Authorityâ€™s registration and procurement processes, encouraging broader participation in future tenders. The Director General agreed to organize an online session for Pakistani exporters to explain registration and inspection procedures. He also positively considered the proposal by REAP Chairman Faisal Jehangir to explore Gwadar Port operations as a viable logistics option for rice exports to Oman. The visit marks a significant step toward strengthening trade relations between Pakistan and Oman, particularly in the agri-food sector. It underscores the commitment of both countries to fostering sustainable economic partnerships and unlocking new opportunities for mutual growth. Copyright Business Recorder, 2026

Date: 2026-05-02

Details: Published May 2, 2026 Updated about 3 hours ago By Reuters HOUSTON: An Iranian proposal on negotiations with the US sent crude oil futures diving on Friday, but prices remained on track for weekly gains, with Tehran still blocking the Strait of Hormuz and the US Navy blocking exports of Iranian crude. Brent crude futures for July settled at USD108.17, down USD2.23 a barrel, or 2.02 percent. West Texas Intermediate futures finished at USD101.94 a barrel, down USD3.13, or 2.98 percent. Iran sent its latest proposal for negotiations with the United States to Pakistani mediators on Thursday, state news agency IRNA reported on Friday, a move that could improve prospects for breaking an impasse in efforts to end the Iran war. Still, the Brent benchmark and WTI were poised for a 2.95 percent gain over the week. Brentâ€™s June contract hit USD126.41 a barrel on Thursday, marking the highest level since March 2022, before ending the session down. â€œThis Iran proposal has given hope to the market that there is an off-ramp for the United States,â€ said Phil Flynn, senior analyst with Price Futures Group. Oil prices have been on the rise since the US and Israel attacked Iran at the end of February, resulting in the closure of the Strait of Hormuz and the disruption of shipments of about a fifth of the worldâ€™s oil and liquefied natural gas supply. A ceasefire has been in place since April 8. UAE presidential adviser Anwar Gargash said on Friday Tehran could not be trusted over any unilateral arrangements it makes for the Strait of Hormuz, in a sign of deep mistrust on all sides. By the end of trading on Friday, the oil market appeared to be accepting the uneasy truce in the conflict. â€œThe market rises and falls on the prospects of an outcome to the conflict,â€ said John Kilduff, partner with Again Capital. â€œAnd right now the situation is a stalemate, at least until the market closes.â€ A senior official of Iranâ€™s Revolutionary Guards had threatened on Thursday â€œlong and painful strikesâ€ on US positions if Washington renewed attacks on Iran, pushing oil prices to intraday peaks before retreating. US President Donald Trump was scheduled to receive a briefing on Thursday on plans for a series of fresh military strikes on Iran to compel it to negotiate an end to the conflict, a US official told REUTERS. Washington did not immediately announce any details of its plans.

Date: 2026-05-01

Details: Written by Shahnawaz Akhter KARACHI, May 1, 2026â€“ The Karachi Chamber of Commerce and Industry has backed the monitoring of jewelersâ€™ business transactions by the Federal Board of Revenue, while cautioning against harassment by tax officials. A delegation of jewelers met KCCI office bearers on April 30 to discuss concerns over the tax authorityâ€™s move to deploy Inland Revenue officials at shops and workshops to monitor transactions. According to sources familiar with the meeting, the chamber clarified that tax officials are legally empowered to monitor business activities under Section 175 of the Income Tax Ordinance 2001, which grants authorities the power to enter and search premises. However, the Karachi Chamber of Commerce and Industry stressed that it does not support any unlawful conduct by officials, including harassment under the pretext of monitoring. The jewelersâ€™ delegation sought the chamberâ€™s support against the deployment of tax officials, arguing that the exercise has created operational hurdles and raised concerns over privacy for both traders and customers. They said that the presence of officials at business premises was leading to undue interference and, in some cases, alleged misuse of authority, resulting in disruption to normal commercial activities. KCCI representatives assured the delegation that the matter would be raised with senior officials of the Federal Board of Revenue, including calls to expand the tax base by bringing unregistered jewelers into the formal system. The meeting took place as a separate delegation of jewelers held talks with the FBR chairman in Islamabad on the same issue. Previous negotiations between the tax authority and the jewelry sector have failed to resolve the dispute, with the FBR maintaining that powers granted under Section 175 cannot be withdrawn. The Karachi Chamber of Commerce and Industry reiterated its support for lawful tax enforcement while emphasizing the need to safeguard businesses from undue pressure and ensure a balanced approach to compliance.

Date: 2026-05-01

Details: Written by Shahnawaz Akhter Islamabad, May 1, 2026: The Federal Board of Revenue (FBR) is heading toward a historic shortfall in tax collection for the fiscal year 2025-26 after missing its revenue targets during the first ten months (Julyâ€“April). According to provisional data and media reports, the FBR has fallen short of its cumulative target by approximately Rs683 billion, raising concerns that the total gap could widen to nearly Rs1 trillion by the end of the fiscal year. Revenue Targets and Collection Gap The FBR was initially assigned a tax collection target of Rs14.13 trillion for FY2025-26, which was later revised downward to Rs13.93 trillion. However, the tax authority has so far collected Rs10.16 trillion in the first ten months. This leaves a daunting task of collecting around Rs3.77 trillion during May and June to meet the revised targetâ€”an objective that appears increasingly difficult under current economic conditions. April Performance Adds Pressure The shortfall trend continued in April 2026, where the FBR collected Rs952 billion, missing the monthly target of Rs1.03 trillion by about Rs77 billion. This underperformance has further intensified pressure on the tax machinery to accelerate collections in the remaining months. Challenging Economic Environment Analysts point to multiple factors behind the revenue gap, including slower economic activity and external uncertainties such as ongoing Middle East tensions. These challenges have dampened business growth and reduced taxable transactions, making it harder for the FBR to meet ambitious targets. Expectations for Remaining Months Officials within the FBR remain cautiously optimistic, suggesting that the agency could generate approximately Rs2.8 trillion in the final two months. However, even with this projection, the overall shortfall would still hover close to Rs1 trillion, marking one of the largest revenue gaps in Pakistanâ€™s history. Fiscal Implications A significant tax shortfall could have broader implications for Pakistanâ€™s fiscal stability, potentially increasing reliance on borrowing and complicating budget planning for the upcoming fiscal year. The FBR tax shortfall for FY2025-26 underscores the challenges facing Pakistanâ€™s revenue system amid economic headwinds. With limited time remaining, achieving the revised target appears unlikely, making fiscal adjustments inevitable in the near term.

Date: 2026-05-01

Details: â€¢ Inflation stood at 6.19% in 10MFY26 Published May 1, 2026 Updated about 17 hours ago Pakistanâ€™s headline inflation clocked in at 10.9% on a year-on-year (YoY) basis in April 2026, as shown by Pakistan Bureau of Statistics (PBS) data on Friday, a reading higher than the Ministry of Financeâ€™s estimate of 8-9%. The consumer price index (CPI) was recorded at 7.3% in March 2026. The CPI stood at 0.3% in April 2025. On month-on-month basis, it increased by 2.5% in April 2026 as compared to an increase of 1.2% in the previous month and a decrease of 0.8% in April 2025. During the first ten months of the fiscal year, inflation stood at 6.19% against 4.73% recorded in the same period last year. CPI inflation urban increased by 11.1% on year-on-year basis in April 2026, as compared to an increase of 7.4% in the previous month and an increase of 0.5% in April 2025. On a month-on-month basis, it increased by 2.7% in April 2026 as compared to an increase of 1.3% in the previous month and a decrease of 0.7% in April 2025. CPI inflation rural increased by 10.6% on year-on-year basis in April 2026, as compared to an increase of 7.2% in the previous month and a decrease of 0.1% observed in April 2025. On month-on-month basis, it increased by 2.1% in April 2026 as compared to an increase of 1% in the previous month and a decrease of 1% in April 2025. In its Monthly Economic Update & Outlook, March 2026, the Finance Division had anticipated inflation to remain in single digits, within the range of 8-9% for April 2026. â€œAmid ongoing supply chain constraints [due to geopolitical tension in Middle East], inflation is anticipated to remain within the range of 8-9% for April 2026,â€ the ministry said in its latest Monthly Economic Update & Outlook April 2026 published on Thursday. Meanwhile, Insight Securities Head of Research Muhammad Shahroz said in a commentary that headline inflation could stand at 10.1% for April 2026. â€œThe [expected] increase is mainly driven by low base effect coupled with elevated food and housing index. On a month-on-month basis, inflation is expected to inch up by 1.7%. This surge is primarily driven by higher retail fuel prices coupled with elevated LPG prices,â€œ he said. The rising inflation rate agreed State Bank of Pakistan (SBP) to increase its key policy rate by 100 basis points to 11.5% this week. This was the first hike in the past three years.

Date: 2026-04-30

Details: Published April 30, 2026 Updated about 2 hours ago ISLAMABAD: The Federal Tax Ombudsman (FTO) has brought to light a significant case of alleged cyber intrusion into the tax system, resulting in unauthorised revision of a taxpayerâ€™s sales tax return and fraudulent adjustment of input tax credit worth millions of rupees. According to official findings, unidentified individuals gained illegal access to the taxpayerâ€™s IRIS profile by misusing login credentials and revised the return for October 2025. Through this activity, fake supplies amounting to Rs. 415.6 million were introduced, carrying a GST impact of Rs. 74.8 million and effectively consuming the entire carry-forward input tax credit of the taxpayer. The affected party approached the FTO seeking an independent inquiry into the hacking incident, removal of fake invoices, restoration of the input tax credit, and strict legal action against those responsible. Upon examination of the supply chain trail and investigation reports, it emerged that the fraudulent activity was part of a broader, organised network. The findings indicate possible facilitation by some individuals associated with the Federal Board of Revenue (FBR) and Pakistan Revenue Automation Limited, suggesting that such manipulation could not have been carried out without insider access to the sensitive taxpayer data. Investigators observed that cybercriminals exploited information related to dormant and blacklisted taxpayers, as well as entities holding substantial accumulated input tax credits to introduce fake transactions into the system. The fraudulent supply chain was traced across multiple jurisdictions, and several beneficiaries have already been identified for legal proceedings by relevant field formations in Karachi, Lahore, Multan, Quetta, and Islamabad. The FTO noted that since the fraudulently adjusted input tax credit has already moved through the supply chain, its immediate restoration would be premature until the investigation is completed and the main perpetrators are identified. The Ombudsman declared the unauthorised use of login credentials and revision of tax records as maladministration under the relevant provisions of the law and issued key directives to address the matter. The Directorate General of Intelligence and Investigation (Inland Revenue) has been tasked with conducting a comprehensive probe to identify all beneficiaries and trace those involved in the cyber fraud, including individuals within or outside FBR and PRAL, using digital evidence such as IP addresses. Chief Commissioners of major tax offices have been directed to extend full cooperation in identifying beneficiaries throughout the supply chain and ensuring coordinated enforcement action. In addition, the IRS Business Process Re-engineering (BPR) team has been instructed to recommend immediate system upgrades, including stricter controls over changes in taxpayer credentials such as CNIC, mobile numbers, and biometric verification, along with enhanced supervisory oversight to prevent misuse of IDs and passwords. The FBR has further been directed to submit a comprehensive compliance report within 60 days, detailing the progress of the investigation and measures taken to prevent recurrence. The case highlights serious vulnerabilities in the digital tax infrastructure and highlights the urgent need for stronger cybersecurity mechanisms and internal accountability to safeguard both taxpayers and public revenue. Copyright Business Recorder, 2026

Date: 2026-04-30

Details: â€¢ GIFT Nifty futures were trading at 24,119.50 points Published April 30, 2026 Updated 2 minutes ago Indiaâ€™s stock benchmarks are poised to open lower on Thursday as a surge in oil prices weighed on market sentiment, potentially outweighing stock-specific earnings-led gains. GIFT Nifty futures were trading at 24,119.50 points, as of 8:11 a.m. IST, indicating that the benchmark Nifty 50 would open below Wednesdayâ€™s close of 24,177.65. Brent crude rose to $120 per barrel after US President Donald Trump spoke with oil companies about measures to mitigate the impact of a possible months-long blockade of Iranâ€™s ports, raising fears â of an extended supply disruption. Higher oil prices raise inflation risks for India, the worldâ€™s third-largest crude importer, as well as pressure economic growth and corporate earnings. Overnight, the US Federal Reserve kept rates on hold as expected, amid intensifying concerns about a rise in inflation due to the Iran war, as markets priced out any cuts in 2026. A combination of elevated oil prices and cautious monetary signals from central banks is likely to continue to weigh on global sentiment this â session, keeping risk appetite subdued, said Hariprasad K, founder of Livelong Wealth. Other Asian stock markets were down 0.2%. Both the Nifty and Sensex rose about 0.8% each on Wednesday, helped by stock-specific gains after quarterly earnings and bottom picking after a recent correction. Both â the indexes are up about 8% in April so far, partially rebounding from the more than 11% drop in March. However, a sustainable recovery will hinge on the US-Iran â relation, reversal of record high foreign outflows and an uptick in corporate earnings. From a domestic perspective, positioning is likely to remain cautious ahead of the long â weekend and upcoming state election outcomes on May 4, Hariprasad said. Among stocks, Bajaj Finance will be in focus after the non-bank lender posted a 22% growth in March-quarter profit.

Date: 2026-04-30

Details: *MSCI's broadest index of Asia-Pacific shares outside Japan was flat on Thursday Published April 30, 2026 Updated 13 minutes ago SYDNEY: AI-related shares fared well in Asia on Thursday after a raft of generally positive earnings reports, while surging oil prices left bonds battered as central banks turned more hawkish on inflation and interest rates. Investors feared the European Central Bank and Bank of England would likely warn of higher rates later in the day, after three Federal Reserve members voted to drop its easing bias in the most divided decision since 1992. Outgoing Chair Jerome Powell also confirmed he would stay on as a governor for now to defend the institutionâ€™s independence as his successor Kevin Warsh, hand-picked by President Donald Trump, who wants lower interest rates, moves toward confirmation. Markets were quick to price â out any rate cuts from the Fed this year, and there is a roughly even chance of a hike by next spring. US Treasury yields rose to a one-month high and the dollar gained broadly, hitting over 160 yen. The latest spike in oil prices was a cause for concern, as Brent crude futures jumped 6% overnight to a four-year high of $122.53 a barrel on worries that the Strait of Hormuz might not open anytime soon. â€œMacroeconomic risks are significant at this juncture, but stock market bulls hope a rosy path for artificial intelligence can continue to offset cyclical weakness,â€ said Jose Torres, senior economist at Interactive Brokers. â€œIf earnings, capital expenditures and outlooks are buoyant, investors could remain sanguine even as the threat of a slowdown in overall activity, loftier borrowing costs and widening credit spreads raise eyebrows.â€ In Asia, Nasdaq futures rallied 1% as earnings from Google parent topped forecasts, sending its shares up 7% in extended trading. Results â from and were also solid, raising hopes for Apple later in the day. Meta Platforms disappointed as it raised its annual capital spending forecast to plough billions more into artificial intelligence infrastructure, sending its shares down 7%. MSCIâ€™s broadest index of Asia-Pacific shares outside Japan was flat on Thursday, but was still set for a whopping 16% gain this month. Japanâ€™s Nikkei fell 1% but was up a similar 16% in April. South Koreaâ€™s KOSPI hit another all-time high as Samsung Electronics said its operating profit jumped eightfold to â a record on robust AI demand, before running into some profit-taking. Chinaâ€™s blue chips inched up 0.2% and Hong Kongâ€™s Hang Seng index slipped 0.3%. Battered bonds Global bonds took a kicking on Thursday after the oil spike and a hawkish Fed fuelled a sell-off in Treasuries. Benchmark US Treasury yields climbed 1 basis point to 4.4237%, having jumped 6 â bps overnight to 4.434%, the highest since late March. The yield on 10-year Japanese government bonds rose 4 bps to 2.500%, the highest since June 1997. Australiaâ€™s 10-year government bond yields jumped 6 bps to 5.066%. The US dollar popped up with higher yields, hovering near its highest level in more than two weeks. â It held at 160.26 yen , after jumping 0.4% overnight to 160.48 yen, edging closer to levels that have previously triggered intervention. The Japanese currency has fallen more than 2% since the war began on February 28, and investors have built the biggest short yen position in nearly two years in a bet that neither rate hikes nor risk of intervention will come to its rescue.

Date: 2026-04-30

Details: Published April 30, 2026 Updated about 2 hours ago KARACHI: Allied Bankâ€™s strategic emphasis on sound risk management, balanced portfolio diversification, and prudent capital allocation is strengthening its resilience. Coupled with a strong focus on digitalization and operational efficiency, this approach is enhancing customer value and sustainable growth. The Bank recorded markup up/interest income of Rs. 83,699 million for the quarter ended March 31, 2026, compared to Rs. 71,647 million during the same period last year, reflecting an increase of 17 percent. This increase primarily stems on account of higher average volumes of mark-up bearing assets. Conversely, markup or interest expense of the Bank has increased by Rs. 9,613 million or 21 percent to reach Rs. 55,895 million for the quarter ended March 31, 2026 as compared to Rs. 46,283 million for the quarter ended March 31, 2025.This increase is on account of higher borrowing expense and interest expense on right of use asset, partially offset by lower deposit cost. Resultantly, Net markup and interest income reached at Rs. 27,804 million during the quarter ended March 31, 2026 as compared to Rs. 25,364 million during the same period last year, increasing by Rs. 2,440 million or 9 percent. Fee income stood at Rs. 4,251 million for the quarter ended March 31, 2026, compared to Rs. 3,723 million for the corresponding quarter last year; registering increase of Rs. 528 million or 14%, mainly on account of higher card related fee, card acquiring business, investment banking fee, partially offset by lower commission on remittances. Dividend income of the Bank stood at Rs. 1,212 million for the quarter ended March 31, 2026 as compared to Rs. 850 million for the quarter ended March 31, 2025, increased by 43%. Due to unrealized loss on fair value through profit and loss securities, capital loss of the Bank for the quarter under review was Rs. 216 million compared to a capital gain of Rs. 745 million for the quarter ended March 31, 2025. Foreign Exchange income of ABL stood at Rs. 1,259 million for the quarter ended March 31, 2026, against Rs. 1,728 million for the quarter ended March 31, 2025. The Bankâ€™s other income amounted to Rs. 561 million in first quarter of 2026, compared to Rs. 102 million in first quarter of 2025. Cumulatively, non-markup or non-interest income of the Bank stood at Rs. 7,067 million for the quarter ended March 31, 2026, reflecting a 1% decline from Rs. 7,148 million in the corresponding quarter previous year. Allied Bankâ€™s ongoing expansion of its branch network, coupled with continued investment in technological capabilities, contributed to an increase in total operating expenses during the quarter. However, through effective deployment of technology, process automation, and operational efficiencies, the Bank limited the growth in operating expenses to 11%. Total operating expenses amounted to Rs. 16,957 million for the quarter ended March 31, 2026, compared to Rs. 15,333 million for the quarter ended March 31, 2025. For the quarter ending March 31, 2026, profit before taxation stood at Rs. 16,867 million, reflecting a 3% decrease from Rs. 17,315 million in the corresponding quarter ended March 31, 2025. The effective income tax rate for the quarter ended March 31, 2026, was 51.03%, compared to 52.70% for the quarter ended March 31st, 2025. The tax charge for first quarter of 2026 stood at Rs. 8,607 million, lower than Rs. 9,125 million in first quarter of 2025, reflecting a 6 percent decrease. The Bankâ€™s profit after tax for the quarter ended March 31, 2026, stood at Rs. 8,261 million, compared to Rs. 8,190 million in the corresponding quarter of 2025, higher by 1%. The Bankâ€™s wide-reaching branch network across the country remains a key strategic strength and has been further enhanced through the expansion of digital and smart branches, along with the refurbishment of existing locations to elevate the overall customer experience. The Bank now operates a total of 1,524 branches, comprising 1,204 conventional branches, 299 Islamic branches and 21 digital branches. This outreach is further strengthened by a well-distributed network of 1,699 Automated Teller Machines (ATMs), comprising 1,447 on-site ATMs, 244 off-site ATMs and 8 Mobile Banking Units (MBUs), complemented by 471 Cash Deposit Machines (CDMs). Gross advances of the Bank were recorded at Rs. 717 billion as of March 31, 2026, compared to Rs. 802 billion as of December 31, 2025. Similarly, Net advances of ABL were Rs. 704 billion as of March 31, 2026, compared to Rs. 790billion as of December 31, 2025; thereby, declining by 11%. Allied Bank continues to maintain a consistently low infection ratio, reflecting the strong asset quality and resilience of its credit portfolio. As of March 31, 2026, the Bankâ€™s infection ratio stood at 1.72%, as compared to 1.42% for the year ended December 31, 2025. The overall coverage ratio was recorded at 105.2% as of March 31, 2026, compared to 109.1% as of December 31, 2025. Bankâ€™s total investments stood at Rs. 2,505 billion as of March 31, 2026, compared to Rs. 2,137 billion as of December 31, 2025, depicting a growth of 17%.Total deposits were Rs. 2,377billion as of March 31, 2026, compared to Rs. 2,346billion as of December 31, 2025, reflecting a growth of 1 percent. Allied Bank recorded strong growth with total assets rose to Rs. 3,685 billion as of March 31, 2026, up by 9 percent from Rs. 3,370 billion at the end of December 2025.The Bankâ€™s net assets decreased by 8 percent mainly on account of revaluation deficit on Federal Government securities, reaching Rs. 243 billion as of March 31, 2026, compared to Rs. 263 billion in 2025. The Return on Assets (ROA) and Return on Equity (ROE) Tier 1 of the Bank recorded at 0.9 percent and 16.7 percent, respectively, as of March 31, 2026. The Capital Adequacy Ratio (CAR) stood at 23.82 percent as of March 31, 2026, remaining well above the minimum regularity threshold of 11.5 percent. Copyright Business Recorder, 2026

Date: 2026-04-30

Details: Published April 30, 2026 Updated about 2 hours ago KARACHI: A delegation of the Gwadar Chamber of Commerce and Industry, led by itâ€™s founding President Faisal Dashti, met with the Governor of Sindh, Nihal Hashmi at the Governor House here on Wednesday. During the meeting, the delegation briefed the governor in detail about the challenges and difficulties faced by the traders/business individuals and passengers in Karachi and across Sindh. He assured full cooperation for the resolution of these issues. A major concern raised was the severe congestion at the Rangers checkpoint in Karachi, where only three lanes are currently operational. All categories of vehicles â€” including cargo trucks, passenger buses, and private vehiclesâ€”are processed through these limited lanes, resulting in significant delays. Due to this bottleneck, clearance often takes several hours to per vehicle. The delegation requested that the number of lanes be increased from three to five, and that the system be upgraded along with an increase in staffing to ensure smoother and faster processing of vehicles and passengers. They also expressed concerns regarding Customs and police personnel stationed at and around the checkpoint. It was highlighted that even when vehicles have complete documentation, including Goods Declarations (GD), they are sometimes unnecessarily stopped and subjected to delays. There were also complaints regarding alleged demands for money in certain cases by the Customs and police personnel. Another serious issue raised was the treatment of passengers arriving from the Makran region, including Gwadar, Turbat, and Panjgur. After disembarking at Karachi bus terminals, passengers â€” particularly those travelling by rickshaws, taxis, or private vehiclesâ€”are reportedly stopped at multiple points. Many of these passengers include women and children. They are allegedly subjected to unnecessary searches, harassment, and extortion, and in some cases forced to pay money under intimidation. Copyright Business Recorder, 2026

Date: 2026-04-30

Details: Published April 30, 2026 Updated about an hour ago KARACHI: Standard Chartered Bank Pakistan Limited (SCBPL) delivered a resilient financial performance with a Profit Before Tax of PKR 11.7 billion in Q1 2026 compared to PKR 17.0 billion last period. Revenue was lower year on year primarily due to sharp reduction in interest rates. The impact of margin compression on revenue was partially offset by a decrease in cost of funds. Total expenses declined by 2 percent despite a high inflationary environment and continuous investments in our infrastructure. Operating expenses were well managed through efficiencies and disciplined spending. Moreover, a prudent risk approach coupled with strong recoveries of bad debts led to a net release of PKR 0.7 billion during the period. On the liabilities side, the Bankâ€™s total deposits stood at PKR 643.9 billion; down by 1 percent from the start of the year. This was driven by a deposit optimisation initiative which is reflected in the improved current accounts mix comprising 61 percent of the deposit book. On the assets side, net advances continued positive momentum and were higher by PKR 44.5bn or 21 percent since start of the year reflecting a pick-up in economic momentum. We continue to monitor the economic landscape and will position our portfolio accordingly. The Bank is well placed to cater for the needs of its clients and will continue its strategy to build a profitable, efficient and sustainable portfolio. Commenting on the results, Rehan Shaikh, CEO & Head of Coverage, Standard Chartered Bank (Pakistan) Limited said, â€œOur results reflect the strength of our balance sheet, a diversified portfolio, deep client relationships and strong business fundamentals. As a bank, we continue to play in our niches and remain committed to serving our clientsâ€™ cross-border and affluent banking needs. I would like to extend my heartfelt gratitude to our shareholders, clients, and business partners for their unwavering trust and confidence in our capabilities.â€ With a strong Return on Equity (ROE) of 20.9 percent for the period and a Capital Adequacy Ratio (CAR) of 19.1 percent, the Bank remains well positioned for future growth. The Bank remains fully committed to delivering sustainable growth for its shareholders, bringing best-in-class services and solutions for its clients, and playing its part in the growth story of Pakistan. Copyright Business Recorder, 2026

Date: 2026-04-30

Details: â€¢ Brent crude futures for June rose $1.91, or 1.62%, to $119.94 a barrel Published April 30, 2026 Updated 41 minutes ago BEIJING: Oil prices extended gains on Thursday on concerns supply from the key Middle East producing region will remain bottled up for longer as talks to end the US-Israeli war against Iran have deadlocked. Brent crude futures for June rose $1.91, or 1.62%, to $119.94 a barrel as of 0057 GMT after gaining 6.1% in the previous session. The June contract, which has increased for a ninth day, expires on Thursday and the more active July contract was at $111.38, up 94 cents, or 0.85%, after gaining 5.8% in the previous session. US West Texas Intermediate futures for June were up 63 cents, or 0.59%, at $107.51 a barrel, after climbing 7% in the previous session, â climbing in eight of nine sessions. US President Donald Trump spoke on Wednesday with oil companies about how to mitigate the impact of a possible months-long US blockade of Iranâ€™s ports, a White House official said on Wednesday, triggering concerns in the market of an extended disruption to oil supplies. â€œProspects for any near-term resolution to the Iran conflict or a reopening of the Strait of Hormuz remain dim,â€ IG market analyst Tony Sycamore said in a note. The meeting with oil companies followed a deadlock in efforts to resolve the conflict that has killed thousands and caused what analysts say is the worldâ€™s biggest energy disruption ever. Tehran has â largely blocked all shipping apart from its own from the Gulf through the Strait of Hormuz, a chokepoint for global energy supplies from the Middle East, since the US and Israel began air strikes on Iran on February 28. This month, the US began blockading Iranian ships. On the supply side, the OPEC+ grouping of OPEC countries â and its allies is likely to agree a small increase of around 188,000 barrels per day in oil output quotas on Sunday, sources told Reuters. The meeting comes just after the United Arab Emiratesâ€™ withdrawal from OPEC, effective May 1, â which is expected to deal a blow to the oil producer groupâ€™s ability to control prices. Although the Gulf nationâ€™s exit would allow it to raise production after exports restart, analysts say that â is unlikely to affect market fundamentals this year, especially with the Hormuz closure and other production disruptions from the war. â€œGulf countries, including the UAE, will take months to return to pre-war production volumes,â€ Wood Mackenzie analysts said in a note.

Date: 2026-04-29

Details: Written by Mrs. Anjum Shahnawaz ISLAMABAD: Pakistan has formally empowered the Tax Policy Office (TPO) to prepare tax proposals for the federal budget 2026-27 after amending the Rules of Business, 1973, in a move aimed at streamlining fiscal policymaking and strengthening institutional oversight. The Cabinet Division issued the amended Rules of Business through SRO 687(I)/2026, bringing the TPO under the administrative control of the Finance Division. With this shift, the responsibility for drafting tax-related components of the Finance Billâ€”including income tax, sales tax, and federal excise dutyâ€”has been transferred from the Federal Board of Revenue (FBR) to the newly formalized office. Officials said the change is intended to separate tax policy formulation from tax administration, aligning Pakistanâ€™s framework with international best practices. While the TPO will now lead policy design and budget preparation, the FBR will continue to handle operational and administrative functions, including tax collection and enforcement. The amendments also include the addition of sub-clause 33 to clause 12 in Schedule-II, officially establishing the TPO within the Finance Division. Furthermore, a newly inserted sub-clause 31C assigns responsibility for Finance Acts to the Finance Division, reinforcing its central role in fiscal governance. Sources indicated that the creation of the TPO could render the existing Policy Board redundant, as policy responsibilities consolidate within the Finance Ministry. The move is expected to improve coordination, enhance transparency, and ensure more coherent tax reforms. In a related development, the Strategic Digital Wallet Company has also been placed under the Finance Divisionâ€™s administrative control, signaling a broader push toward financial digitization. Additionally, the amended rules require government divisions to respond to inter-departmental communications within three working days. Proposals involving legal amendments submitted to the Cabinet Division must now include detailed comparative statements outlining existing and proposed provisions, ensuring greater clarity in decision-making.

Date: 2026-04-29

Details: DISRUPTIONS â€¢ Brent crude futures for June rose 52 cents, or 0.47%, to $111.78 a barrel Published April 29, 2026 Updated 34 minutes ago By Reuters BEIJING: Oil prices rose on Wednesday, extending a multi-day rally, on reports the US will extend its blockade of Iranian ports, likely prolonging supply disruptions from the key Middle East producing region. US President Donald Trump has instructed aides to prepare for an extended blockade of Iran, the Wall Street Journal reported late on Tuesday, citing US officials. Trump will opt to continue to squeeze Iranâ€™s economy and oil exports by preventing â shipping to and from its ports, the report said. Brent crude futures for June rose 52 cents, or 0.47%, to $111.78 a barrel at 0154 GMT, climbing for an eighth day. The June contract expires on Thursday and the more active July contract was at $104.84, up 0.4%. US West Texas Intermediate (WTI) futures for June rose 57 cents, or 0.57%, to $100.50 a barrel after gaining 3.7% in the previous session, climbing for seven out of the last eight days. â€œThe recent rise in oil prices has been driven by the Strait blockade. If Trump is prepared to extend the blockade, supply disruptions would worsen further and continue to push oil â prices higher,â€ said Yang An, an analyst at Haitong Futures. UAE leaves OPEC and OPEC+ in huge blow to global oil producersâ€™ group Though there is a ceasefire in the US-Israeli war with Iran, the conflict remains deadlocked while the sides seek a formal end to the fighting, with Iran shutting shipping flows through the Strait of Hormuz, a conduit for about 20% of global oil and liquefied natural gas supplies, â and the US blockading Iranian ports. The US is pressing for an end to what it claims is Iranâ€™s nuclear weapons programme while Iran is demanding some form of reparations from the latest round of fighting, an easing of â economic sanctions and some form of control over the Strait of Hormuz. The Hormuz shutdown is continuing to foster pulls from global inventories, with market sources saying late on Tuesday the American Petroleum Institute reported â US crude oil inventories fell for a second week. Crude stocks fell by 1.79 million barrels in the week ended April 24, the sources said. Gasoline inventories fell by 8.47 million barrels, while distillate inventories fell by 2.60 million barrels.

Date: 2026-04-29

Details: Published April 29, 2026 Updated about 2 hours ago By Reuters NEW YORK: US natural gas futures eased on Tuesday on expectations mild weather will allow energy firms to keep injecting more gas than usual into storage in the coming weeks. On its last day as the front-month, gas futures for May delivery on the New York Mercantile Exchange fell 1.4 cents, or 0.5percent, to USD2.536 per million British thermal units (mmBtu). That small price decline, which pushed the contract into technically oversold territory for the second time in three days, came despite a drop in output in recent weeks and near-record liquefied natural gas exports. Futures for June, which will soon be the front-month contract, were unchanged at USD2.72 per mmBtu. In the cash market, some power and gas prices in Texas and California traded in negative territory for a third straight week as mild weather limited heating and cooling demand, which was met by ample amounts of hydro and other renewable energy sources. Financial firm LSEG said average gas output in the US Lower 48 states fell to 110.1 billion cubic feet per day (bcfd) so far in April, down from 110.4 bcfd in March. That compares with a monthly record high of 110.7 bcfd in December 2025. On a daily basis, output was on track to drop by around 3.8 bcfd over the past 22 days to a preliminary 12-week low of 108.3 bcfd on Tuesday as low spot prices prompted energy firms like EQT, the second-largest US gas producer, to temporarily reduce production. Preliminary data, however, is often revised later in the day. Analysts said mostly mild weather this spring has allowed energy firms to inject more gas into storage than usual, boosting inventories to a forecast 8percent above normal levels during the week ended April 24 from 7percent above normal during the week ended April 17. Looking ahead, meteorologists forecast the weather will remain slightly cooler than normal through May 13. Cool weather in May, however, does not usually generate a lot of heating demand but does knock out early spring air conditioning use. LSEG projected average gas demand in the Lower 48 states, including exports, would slide from 101.9 bcfd this week to 100.4 bcfd next week. Those forecasts were similar to LSEGâ€™s outlook on Monday.

Date: 2026-04-29

Details: Published April 29, 2026 Updated about 2 hours ago By Reuters NEW YORK: Oil prices closed up nearly 3 percent on Tuesday as persistent worries about supply constraints from the closed Strait of Hormuz outweighed concerns about the United Arab Emiratesâ€™ decision to leave OPEC and the wider OPEC+ group. Brent futures for June ended up USD3.03 or 2.8 percent at USD111.26 a barrel, marking its seventh consecutive day of gains. US West Texas Intermediate (WTI) futures for June settled up USD3.56 or 3.7 percent at USD99.93 a barrel, after briefly trading above USD100 earlier in the session for the first time since April 13. Prices trimmed some of the advances after the United Arab Emirates, the fourth-largest producer in OPEC+, said on Tuesday it would exit the group on May 1, dealing a blow to the oil-exporting groups and their de facto leader, Saudi Arabia. â€œIn normal times, this would have been very bearish news for the oil market and sparked a sizable selloff,â€ said John Kilduff, partner at Again Capital. He estimated the UAE could quickly add between 1 million and 1.5 million barrels per day of output. â€œBut with the Strait of Hormuz effectively closed, thereâ€™s nowhere for that supply to go â€¦ so weâ€™re likely to see oil prices continue their slow march higher,â€ he added. US President Donald Trump was unhappy with the latest Iranian proposal to end the war, a US official said on Monday, as Iranian sources disclosed that the proposal would avoid addressing the nuclear programme until hostilities cease and Gulf shipping disputes are resolved. Trumpâ€™s displeasure with the offer leaves the conflict deadlocked, with Iran shutting shipping flows through the strait, a conduit for about 20% of global oil and liquefied natural gas supplies, and the US retaining its blockade of Iranian ports. â€œWith peace talks stalled and no clear path to reopening the Strait of Hormuz, traders are factoring in a prolonged disruption to a critical artery of global supply,â€ said Rystad Energy analyst Jorge Leon.

Date: 2026-04-29

Details: Islamabad, April 29, 2026 â€” The Federal Tax Ombudsman (FTO) has exposed a significant cyber intrusion into Pakistanâ€™s tax system, resulting in the unauthorized revision of a taxpayerâ€™s sales tax return and fraudulent adjustment of input tax credit worth millions of rupees. According to official findings, unidentified individuals gained illegal access to the taxpayerâ€™s IRIS profile by misusing login credentials and revised the return for October 2025. Fake Transactions Worth Millions Detected A press release revealed that fake supplies amounting to Rs415.6 million were inserted into the system, carrying a GST impact of Rs74.8 million. This manipulation effectively consumed the taxpayerâ€™s entire carry-forward input tax credit. The affected taxpayer approached the FTO seeking an independent inquiry, removal of fake invoices, restoration of tax credit, and strict legal action against those responsible. Organized Network and Insider Involvement Suspected Investigations indicate that the fraud was part of a broader organized network. Evidence suggests possible facilitation by individuals linked to the Federal Board of Revenue (FBR) and Pakistan Revenue Automation Limited (PRAL), raising concerns about insider access to sensitive taxpayer data. Cybercriminals reportedly exploited dormant and blocked taxpayer accounts, as well as entities with large accumulated input tax credits, to introduce fake transactions into the system. Multi-City Investigation Underway The fraudulent supply chain has been traced across multiple cities, including Karachi, Lahore, Multan, Quetta, and Islamabad. Several beneficiaries have already been identified for legal proceedings by relevant field formations. However, the FTO noted that restoration of the fraudulently adjusted input tax credit would be premature until the investigation is completed and key perpetrators are identified. Directives Issued for Action The FTO declared the incident as maladministration and issued several directives: â€¢ The Directorate General of Intelligence and Investigation (Inland Revenue) has been tasked with conducting a comprehensive probe using digital evidence such as IP tracking. â€¢ Chief commissioners have been instructed to ensure full cooperation in identifying beneficiaries across the supply chain. â€¢ The IRS Business Process Re-engineering (BPR) team will recommend system upgrades, including stricter controls on credential changes, biometric verification, and enhanced supervisory oversight. Additionally, the Federal Board of Revenue has been directed to submit a compliance report within 60 days. Need for Stronger Cybersecurity The case highlights serious vulnerabilities in Pakistanâ€™s digital tax infrastructure and underscores the urgent need for stronger cybersecurity measures and internal accountability mechanisms.

Date: 2026-04-29

Details: Lahore, April 29, 2026 â€” The Federal Board of Revenue (FBR) has lodged a First Information Report (FIR) against gold jewelers in Lahore after its officials faced resistance during a tax monitoring drive in the cityâ€™s major bullion markets. According to official details, the Regional Tax Office (RTO) Lahore initiated monitoring of gold stock under Section 175 of the Income Tax Ordinance, 2001. The exercise was carried out in prominent jewelry markets to ensure compliance with tax regulations. However, the situation escalated when traders allegedly obstructed the FBR team from conducting the inspection. The tax officials also reported harassment, prompting the RTO Lahore to register an FIR against the involved jewelers. Traders Reject FBR Action Reacting strongly, Qasim Shikarpuri, President of the All Pakistan Sarafa Gems and Jewelers Association, condemned the move and termed it an anti-business action. He argued that the filing of an FIR against traders would further strain relations between the business community and tax authorities. The association has consistently opposed the enforcement of Section 175, maintaining that allowing tax officials to enter business premises raises serious privacy and operational concerns for traders. Section 175 Remains Key Dispute Section 175 of the Income Tax Ordinance has remained a major point of contention between the FBR and gold traders. The provision empowers tax authorities to inspect business premises and verify stock, which jewelers argue could disrupt normal business operations. Talks Partially Failed Last month, multiple rounds of negotiations were held between the FBR and representatives of gold jewelers to resolve the issue. While some progress was made, the discussions ended without a comprehensive agreement, with both sides agreeing to continue dialogue. Talks Set to Resume Further talks were delayed due to heightened security measures in Islamabadâ€™s Red Zone amid developments related to the Middle East crisis. According to Shikarpuri, negotiations are now scheduled to resume later today. The outcome of these discussions is expected to be crucial in determining future enforcement of tax monitoring measures in the gold sector.

Date: 2026-04-28

Details: Islamabad, April 28, 2026 â€“ Pakistan is preparing tax policy changes and sweeping removal of exemptions to raise around Rs350 billion ($1.26 billion) in additional revenue in the 2026â€“27 fiscal year, as part of commitments under its ongoing International Monetary Fund (IMF) programme, sources familiar with the matter said on Monday. The measures are expected to form a key pillar of the upcoming budget as the government seeks to meet strict fiscal targets under structural reforms agreed with the IMF. Officials said discussions are focused on phasing out multiple tax concessions across sectors that have long eroded the countryâ€™s revenue base. According to sources, if the full Rs350 billion target is not achieved through withdrawal of exemptions alone, the government is likely to introduce additional taxation measures to close the gap. A major area under review is import-related tax concessions under the 12th Schedule of the Income Tax Ordinance, 2001. Officials in the tax policy wing of the Ministry of Finance have reportedly examined proposals that include either eliminating these exemptions entirely or doubling existing tax rates on selected imports to boost revenue collection. Pakistan remains under a 37-month Extended Fund Facility (EFF) and a 28-month Resilience and Sustainability Facility (RSF) backed by the International Monetary Fund. The IMF has repeatedly urged Islamabad to widen its tax base, reduce exemptions, and strengthen fiscal discipline to ensure long-term macroeconomic stability. In a statement issued on March 11, 2026, the IMF said discussions with Pakistani authorities on programme reviews had made â€œconsiderable progress,â€ though negotiations were continuing to assess global economic risks and policy adjustments. The IMF also highlighted progress on fiscal consolidation, tighter monetary policy to contain inflation, and reforms in the energy sector. It stressed that deeper structural reforms were essential to support sustainable growth while protecting social spending on health, education, and welfare programmes. Pakistanâ€™s government has maintained that IMF-backed reforms are critical to stabilising public finances, although such measures often face resistance from industry groups and political stakeholders due to inflationary pressures and higher compliance costs.

Date: 2026-04-28

Details: â€¢ Brent crude futures for June climbed 45 cents, or 0.4%, to $108.68 a barrel Published April 28, 2026 Updated 44 minutes ago By Recorder Report BENGALURU: Oil prices extended their gains on Tuesday as efforts to end the U.S.-Iran war appear stalled, with the crucial Strait of Hormuz water way still mainly shut, keeping energy supplies from the key Middle East producing region out of the reach of global buyers. US President Donald Trump is unhappy with the latest Iranian proposal aimed at ending the war, a US official said on Monday. Iranian sources disclosed on Monday that Tehranâ€™s proposal avoided addressing its nuclear program â until hostilities cease and Gulf shipping disputes are resolved. Trumpâ€™s displeasure with the Iranian offer leaves the conflict deadlocked, with Iran shutting shipping flows through the Strait of Hormuz, which typically carries supply equal to about 20% of global oil and gas consumption, and the US keeping in place its blockade of Iranian ports. Brent crude futures for June climbed 45 cents, or 0.4%, to $108.68 a barrel as of 0051 GMT, after gaining 2.8% in the previous session to its highest close since April 7. The contract is up for a seventh day. US West Texas Intermediate (WTI) crude for June rose 58 â cents, or 0.6%, to $96.96, after gaining 2.1% in the previous session. An earlier round of negotiations between the U.S. and Iran collapsed last week following failed face-to-face talks. â€œFor oil traders, itâ€™s not the rhetoric that matters any more, but the actual physical flow of crude oil through the Strait of Hormuz, and right now, that flow â remains constrained,â€ Fawad Razaqzada. Razaqzada added that even if a resolution is reached, production outages and logistical challenges mean recovery could take months. Ship-tracking data revealed significant disruptions â in the region, with six Iranian oil tankers forced to turn back due to the US blockade. However, a liquefied natural gas tanker managed by the United Arab Emiratesâ€™ Abu Dhabi National Oil â Co did cross the Strait of Hormuz and appears to be near India, ship-tracking data showed on Monday. Prior to the US-Israeli war on Iran, which began on February 28, between 125 and 140 vessels transited the strait daily.

Date: 2026-04-28

Details: Published April 28, 2026 Updated about 2 hours ago By Reuters NEW YORK: Oil prices climbed about 3 percent to a two-week high on Monday as peace talks between the US and Iran stalled and shipments through the Strait of Hormuz remained limited, keeping global oil supplies tight. Brent futures rose USD2.90, or 2.8 percent, to settle at USD108.23 a barrel, while US West Texas Intermediate crude rose USD1.97, or 2.1 percent, to settle at USD96.37. That put Brent up for a sixth day in a row for the first time since March 2025 and at its highest close since April 7. WTI closed at its highest since April 13. â€œBrent blowing out to a double-digit plus premium to WTI â€¦ should attract customers to the US Gulf of Mexico and possibly drive US crude oil exports to (a) new all-time record,â€ Bob Yawger, director of energy futures at Mizuho, said in a note. US President Donald Trump discussed a new Iranian proposal on resolving the war with Tehran with his top national security aides, with the conflict currently in a stalemate and energy supplies from the region reduced. â€œThe diplomatic stand-off means that every day 10-13 million barrels of oil fail to get to the international market, worsening an already tight oil balance. Therefore, there is only one direction for oil prices to go,â€ said PVM Oil Associates analyst Tamas Varga. At least seven ships - mainly dry bulk vessels - have crossed the Strait of Hormuz in the past 24 hours, in line with muted activity in recent days. That represents a fraction of the average 140 daily passages before the Iran war began on February 28, when around 20 percent of global oil supplies passed through the strait. In addition, six tankers loaded with Iranian oil have been forced back to Iran by the US blockade in recent days. Russian President Vladimir Putin praised the Iranian people for battling to stay independent in the face of US and Israeli pressure and said Moscow would do all it could to help Tehran. Inflation worries The European Central Bank meets on Thursday, with an Iran war ceasefire easing the pressure on it for an immediate interest rate hike. But with the status of peace talks unclear and no sign of the Strait of Hormuz reopening soon, traders still anticipate high oil prices will boost inflation and force the bank to hike interest rates later this year. Central banks like the ECB use interest rates to keep inflation in check. Higher interest rates increase consumer borrowing costs, which can reduce economic growth and oil demand.

Date: 2026-04-28

Details: Published April 28, 2026 Updated about 2 hours ago By Reuters NEW YORK: US natural gas futures climbed about 3percent on Monday from a 17-month low in the prior session on a drop in output in recent weeks, forecasts for more demand this week than previously expected and near-record liquefied natural gas (LNG) exports. On its second-to-last day as the front-month contract, gas futures for May delivery on the New York Mercantile Exchange rose 7.8 cents, or 3.1percent, to USD2.601 per million British thermal units (mmBtu). On Friday, the contract notched its lowest close since October 29, 2024. Futures for June, which will soon be the front-month contract, were up 4percent to USD2.79 per mmBtu. In the cash market, some power and gas prices in Texas and California traded in negative territory for a third week in a row as mild weather kept both heating and cooling use low, allowing ample amounts of hydro and other renewable sources of energy to meet more demand. Financial firm LSEG said average gas output in the US Lower 48 states has eased to 110.1 billion cubic feet per day (bcfd) so far in April, down from 110.4 bcfd in March. That figure compares with a monthly record high of 110.7 bcfd in December 2025. On a daily basis, output was on track to drop by around 0.7 bcfd over the past five days to a preliminary 108.8 bcfd on Monday as low spot prices prompted energy firms like EQT, the second-largest US gas producer, to cut production. Preliminary data, however, is often revised later in the day. Analysts said mostly mild weather so far this spring has allowed energy firms to inject more gas into storage than usual, boosting inventories to a forecast 8 percent above normal levels during the week ended April 24, up from 7percent above normal during the week ended April 17. Looking ahead, meteorologists forecast the weather will remain mostly near normal through May 12. LSEG projected average gas demand in the Lower 48 states, including exports, would slide from 102.0 bcfd this week to 100.1 bcfd next week. The forecast for this week was higher than LSEGâ€™s outlook on Friday. Average gas flows to the nine big US LNG export plants have risen to 18.9 bcfd so far in April, up from 18.6 bcfd in March. That reading compares with a monthly record high of 18.7 bcfd in February.

Date: 2026-04-27

Details: Written by Mrs. Anjum Shahnawaz FAISALABAD: Pakistanâ€™s tax authorities are aiming to eliminate tax evasion and the long-standing issue of non-filers through sweeping reforms and digital transformation within the Federal Board of Revenue (FBR), senior officials said on Sunday. Addressing an awareness seminar on promoting tax culture at the Faisalabad Chamber of Commerce and Industry, Secretary Tax Education Muhammad Muti-ur-Rehman Mumtaz said the FBRâ€™s ongoing reforms are designed to create a transparent, automated, and enforcement-driven system that minimizes human intervention. â€œFollowing extensive reforms and structural changes, the concepts of tax evasion and non-filers will be completely eliminated,â€ he said, adding that the Tax Education and Facilitation Wing is playing a central role in expanding the tax base and improving compliance. Mumtaz noted that the reform process began two years ago with consultations involving key stakeholders, resulting in policy measures aimed at addressing systemic inefficiencies. A major focus has been on digitalization, which has reduced discretionary powers of officials and strengthened accountability mechanisms. He highlighted that advanced monitoring systems have already delivered significant results. In the sugar sector alone, enhanced monitoring led to an increase of Rs103 billion in sales tax revenue within two months. Similar gains have been recorded in the textile, steel, beverage, and cement industries, with automated systems ensuring accurate data collection and minimizing disputes. According to the official, 1.7 million new taxpayers have been added to the tax net as a result of these reforms. Instead of aggressive enforcement, authorities are encouraging voluntary compliance by making it increasingly difficult and costly for non-filers to access services such as foreign travel and property purchases. He also pointed out that each citizenâ€™s Computerized National Identity Card (CNIC) now effectively serves as a tax identification number, linking financial transactions and helping detect irregularities, including fake accounts. Discussing the Point of Sale (POS) system, Mumtaz said service providers are required to collect taxes on behalf of the government, with strict action taken against those failing to comply. Faisalabad Chamber President Farooq Yousaf Sheikh emphasized the importance of cooperation between the private sector and government institutions, describing them as â€œtwo wheels of the same vehicleâ€ essential for economic stability. He urged businesses to adopt a culture of voluntary tax compliance, noting that such practices are standard globally. Meanwhile, Abdul Rehman Sheikh, Second Secretary Facilitation at FBR, revealed that a reward scheme has been introduced for individuals who report tax evasion, while 3.3 million potential taxpayers have been identified through electricity billing data. Initial notices have already been issued to 100,000 individuals. The seminar concluded with a question-and-answer session and the presentation of commemorative shields, marking continued engagement between the FBR and the business community to strengthen Pakistanâ€™s tax system.

Date: 2026-04-27

Details: Written by Mrs. Anjum Shahnawaz Prime Minister Shehbaz Sharif has ordered immediate legal and disciplinary action against those involved in a massive 120 billion rupee ($430 million) solar panel over-invoicing and money laundering scheme, according to an official statement from the Prime Ministerâ€™s Office. The scandal, which spanned from 2017 to 2022, involves importers allegedly inflating the value of solar panel shipments to illicitly transfer capital out of the countryâ€”a practice known as trade-based money laundering (TBML). The Prime Minister expressed grave concern over the scale of the illicit operation and highlighted the â€œnotable negligenceâ€ of various state institutions that allowed the scheme to persist for five years. High-Level Committees Formed In a move to ensure strict accountability, the Prime Ministerâ€™s Office has established two high-level committees to oversee the investigation and prosecution phases. The first, the â€œCommittee for Disciplinary Action,â€ is tasked with identifying and penalizing government officials who facilitated or ignored the over-invoicing. This body is headed by the Secretary of the Establishment Division and includes senior representatives from the State Bank of Pakistan (SBP), the Federal Board of Revenue (FBR), the Federal Investigation Agency (FIA), and the Intelligence Bureau (IB). The second body, the â€œMonitoring Investigation and Prosecution Committee,â€ will focus on the technical aspects of the money laundering cases. Led by the Director General of Pakistan Customs Intelligence, this committee will assist in the legal proceedings against the private entities and fake companies involved in the fraud. Billions in Penalties The scandal was originally unearthed by the FBRâ€™s Directorate of Post Clearance Audit. Following the discovery, the Customs Adjudication Authority delivered a landmark ruling, imposing penalties totaling 111 billion rupees on shell companies used to facilitate the transfers. To bolster the legal offensive, Prime Minister Shehbaz has directed the Law Minister to appoint specialized legal counsel. Two qualified lawyers will serve as special prosecutors in Karachi and Islamabad to ensure the cases are pursued vigorously in court. Systemic Reforms Beyond individual arrests, the government is looking to recover the stolen funds and seize assets purchased with illegal earnings. The Prime Ministerâ€™s Office indicated that this case will serve as a catalyst for systemic reforms designed to plug loopholes in Pakistanâ€™s trade regulations. Both committees are mandated to submit progress reports to the Prime Minister every 15 days, signaling a high-priority push to restore confidence in Pakistanâ€™s financial and customs oversight during a time of heightened economic scrutiny.

Date: 2026-04-27

Details: Written by Hamza Shahnawaz KARACHI, April 26, 2026 â€“ Pakistan Customs has notified revised enhanced customs values for imported old and used Apple iPhones, a move that is expected to increase duty and tax payments at the import clearance stage and push up retail prices in the local market. According to a valuation ruling issued by the Directorate of Customs Valuation, the revised rates apply to commercial imports of used and refurbished Apple smartphones. Officials said the adjustment was made after representations from local industry stakeholders, who argued that previous undervaluation practices were distorting the market and discouraging fair competition. The customs authority noted that the valuation process considered objections from importers regarding international auction-based pricing data, but maintained that such benchmarks were not fully applicable under Section 25(6) of the Customs Act, 1969. The department added that where relevant comparative data is excluded, it must be done with documented justification. Market participants say the revised valuation will directly increase calculated duties, sales tax, and regulatory duties at import stage, ultimately raising retail prices of used iPhones across Pakistanâ€™s mobile phone markets. Revised Customs Values (C&F USD per piece) S.No Model New Value (USD) Old Value (USD) 1 Used iPhone 15 Pro Max 505 460 2 Used iPhone 15 Pro 472 390 3 Used iPhone 15 Plus 390 320 4 Used iPhone 15 378 310 5 Used iPhone 14 Pro Max 413 360 6 Used iPhone 14 Pro 350 290 7 Used iPhone 15 275 210 8 Used iPhone 13 Pro Max 374 295 9 Used iPhone 13 Pro 293 225 10 Used iPhone 13 225 170 11 Used iPhone 12 Pro Max 274 215 12 Used iPhone 12 Pro 222 155 13 Used iPhone 12 156 120 14 Used iPhone 11 Pro Max 211 145 15 Used iPhone 11 Pro 160 125 16 Used iPhone 11 133 95 17 Used iPhone XS Max 95 95 18 Used iPhone XS 73 66 19 Used iPhone XR 80 76 20 Used iPhone X 70 57 21 Used iPhone 8 Plus 78 47 22 Used iPhone 8 45 38 23 Used iPhone 7 Plus 47 26 24 Used iPhone 7 35 24 25 Used iPhone SE 3 73 73 26 Used iPhone SE 2 52 25 27 Used iPhone SE 47 25 28 Used AQUOS R3 47 25 These revised values will be used by Pakistan Customs to calculate duties and taxes at the import stage, directly impacting final market prices. Industry analysts said the upward revision in assessed customs values will significantly impact affordability of second-hand Apple devices, which remain widely popular in Pakistan due to lower purchasing power for new smartphones. â€œEven modest increases in customs valuation translate into a noticeable jump in total landed cost,â€ a market analyst said, adding that grey-market prices are also likely to adjust upward in response. Traders warned that higher import costs could further shrink the formal used smartphone market and encourage informal channels. Disclaimer: The revised customs values are provisional and subject to confirmation from Pakistan Customs.

Date: 2026-04-27

Details: Published April 27, 2026 Updated about 3 hours ago By Naseem Usman KARACHI: Trading activity in the domestic cotton market remains limited, though prices have been broadly stable, market sources said on Sunday. On the international front, the ongoing Middle East tensions are driving a bullish trend on the New York cotton exchange, with the effects increasingly being felt in local markets. However, business circles have adopted a wait-and-see approach amid the conflict involving Iran, Israel and the United States, further dampening market activity. Domestic cotton stocks are now nearly exhausted, leading to a sustained rise in imports to meet mill demand. Partial advance deals for the upcoming 2026-27 cotton season have already started taking place. The Federal Committee on Agriculture has set the production target for the next season at more than 96 lac bales, significantly lower than the previous yearâ€™s target of one crore twenty lac bales. Last seasonâ€™s actual output was particularly alarming: the country produced only 56 lac bales, the lowest level in 40 years. In an effort to ease the financial strain on the textile sector, the All Pakistan Textile Mills Association is actively working to secure improvements in refinance facilities. Prominent agriculture expert Sajid Mahmood said the challenge of reviving cotton production is fundamentally economic, not technical. â€œConcrete economic measures are indispensable for any lasting recovery,â€ he maintained. The local cotton market remained largely stable but subdued during the past week, as mounting anxiety among businessmen over the ongoing conflict involving the United States, Israel, and Iran in the Middle East continued to weigh heavily on trade activity. With uncertainty dominating market sentiment, transactions have slowed to a near standstill, making it increasingly difficult to determine accurate price levels. No significant deals have been formally recorded in the market, though occasional reports from cotton traders indicate that prices are ranging between Rs. 18,500 and Rs. 21,500 per maund, varying according to quality. Ginners are reported to be holding a limited stock of a few thousand bales, but these too have seen little to no trading activity in the open market. In a sign of cautious optimism for the season ahead, some advance deals for the 2026â€“27 cotton seasons have already been concluded, with transactions settled at Rs. 21,500 per maund against delivery conditions between May 20 and 30. The price of phutti has been reported at Rs. 10,000 per 40 kilograms. On the production front, the Federal Committee on Agriculture has set a cotton production target of 96 lac bales for the 2026â€“27 season. Internationally, cotton prices reflected a mixed trend following an initial surge driven by Middle East tensions. New York cotton futures climbed to between 78 and 82 US cents per pound before retreating to close in the range of 76 to 80 cents. Meanwhile, the Karachi Cotton Exchange building remains sealed since December 12, 2025, following action by the Evacuee Trust Property Board with the assistance of the FIA. As a result, the daily cotton spot rate, a key market benchmark, has not been issued, further adding to the uncertainty in the market. Across Sindh and Punjab, cotton prices held in the range of Rs 18,500 to Rs 21,500 per maund, subject to quality and payment conditions, while prices of cottonseed cake and cottonseed oil remained relatively stable. Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, said international cotton prices remained mixed during the week, with New York cotton futures closing at 76 to 80 US cents per pound. According to the USDA weekly export report, a total of 119,900 bales were sold for the 2025â€“26 marketing year. Vietnam topped the buyersâ€™ list with 52,100 bales, followed by Turkey at 22,400 bales and Pakistan in third place with 15,900 bales. For the 2026â€“27 marketing year, sales stood at 57,100 bales, with Vietnam and Indonesia sharing the lead at 17,600 bales each and Pakistan again ranking third with 13,200 bales. Total export shipments for the week reached 296,400 bales, with Vietnam receiving the largest share at 89,000 bales, Pakistan second at 46,600 bales, and India third at 25,100 bales. On the domestic front, Pakistanâ€™s export-oriented textile industry is facing mounting pressure amid the ongoing conflict in the Middle East. Industry exporters have warned that value-added textile sales could decline significantly during the current fiscal year 2025â€“26 if regional tensions continue to escalate. Ongoing hostilities involving Iran, Israel, and the United States could result in a 10 to 20 percent drop in Pakistanâ€™s textile exports. Disruptions to shipping routes through the Strait of Hormuz are already pushing up freight and insurance costs, while textile shipments to the European Union and the United States are facing expected delays of 15 to 20 days. Rising import prices of fuel and raw materials are placing additional financial strain on the sector. A decline in textile exports was already recorded in March 2026, and industry officials caution that the figure could reach 20 percent if the situation does not improve. Textile industry leaders have formally requested the government to devise an emergency contingency plan to protect this critical pillar of Pakistanâ€™s national economy. The countryâ€™s textile industry has urged the State Bank of Pakistan (SBP) to enhance export refinance facilities to enable exporters to meet their growing working capital requirements. In a letter to the Governor, State Bank of Pakistan, APTMA Chairman Kamran Arshad stated that the textile industry remains the mainstay of Pakistanâ€™s economy, contributing around 60 percent to total exports, 8.5 percent to GDP, and employing nearly 40 percent of the manufacturing workforce. He noted that the sector, a key driver of foreign exchange earnings, is currently facing mounting working capital constraints due to elevated energy costs, supply chain disruptions, and uncertainties stemming from the evolving geopolitical situation â€”particularly in the Middle East â€” alongside domestic economic pressures. These challenges, he added, are adversely affecting the sectorâ€™s operations and growth trajectory. Kamran Arshad emphasized that, given these constraints, there is an urgent need to facilitate exporters through adequate and timely access to financing. â€œWe, therefore, request the State Bank of Pakistan to enhance export refinance facilities, enabling exporters to efficiently meet their working capital requirements and fulfill export orders,â€ he said. He further stated that an expansion in export refinance facilities would help the textile sector navigate current challenges, strengthen Pakistanâ€™s position in global markets, and contribute to higher exports and improved economic stability. Cotton expert Sajid Mahmood, in a telephonic conversation with renowned cotton market analyst Naseem Usman, held a detailed discussion on the current state of cotton in Pakistan and its future prospects. During the exchange, he emphasized that the challenge of cotton revival is less technical in nature and more closely linked to economic conditions and practical policy measures. Sajid Mahmood pointed out that in recent years, cotton production in the country has declined by approximately 45 percent, reflecting a deeply concerning trend for this vital agricultural sector. According to him, a regional shift has also been observed, with Sindh outperforming Punjab in cotton production. He further noted that the primary factors behind the decline in cotton cultivation include rising production costs, reduced water availability, price instability, and farmersâ€™ increasing inclination toward alternative crops that offer relatively more assured returns. In this context, the establishment of new sugar millsâ€”particularly in South Punjab, especially in Rahim Yar Khan districtâ€”has also accelerated the shift toward sugarcane cultivation. Sajid Mahmood stressed that the core challenge lies in the profitability gap and income uncertainty associated with the cotton sector, which is making the crop increasingly unattractive for farmers. He maintained that unless the economic returns from cotton cultivation become more visible and stable, farmers will continue to favor alternative crops. With regard to solutions, he highlighted the need for transparency in subsidy mechanisms, strengthening of direct procurement systems, and enhanced linkages between the textile industry and farmers. Such measures, he noted, are essential for improving the efficiency of the cotton value chain and ensuring more equitable returns for growers. On institutional coordination, Sajid Mahmood described the proposed merger between the Pakistan Central Cotton Committee (PCCC) and the Pakistan Agricultural Research Council (PARC) as an important and positive development. He observed that this integration could help bring research, policy formulation, and practical agricultural operations onto a unified platform, thereby strengthening the prospects for the revival and sustainable development of the cotton sector.

Date: 2026-04-27

Details: ISLAMABAD, April 27, 2026 â€“ Pakistan is considering scrapping concessional income tax rates on a wide range of imported goods as part of efforts to raise revenues in the federal budget for 2026-27, according to officials in the finance ministry. The proposal focuses on revising the Twelfth Schedule of the Income Tax Ordinance, 2001, which outlines reduced withholding tax rates applied at the import stage. The officials said the tax policy office has reviewed the framework, particularly Part I of the schedule, which currently allows a concessional income tax rate of 1% on certain imports. Authorities are weighing two options: either abolish the 1% concessional rate entirely or double it, a move that could significantly enhance tax collection amid persistent fiscal pressures. A final decision has yet to be made. Pakistanâ€™s tax authority, the Federal Board of Revenue (FBR), collects income tax on imports under Section 148 of the ordinance. The applicable rates vary depending on the classification of goods within the Twelfth Schedule. Under the existing structure, imports listed in Part I are subject to a 1% tax on the import value, inclusive of customs duty, sales tax and federal excise duty. Goods in Part II attract a 2% rate, rising to 3.5% for commercial importers. Meanwhile, Part III items face higher rates of 5.5% and 6% for commercial importers. Officials said Part I covers a broad range of goods, including food items, machinery and precious metals such as gold. However, they noted that essential commoditiesâ€”particularly foodâ€”are likely to retain some level of concession even if broader exemptions are withdrawn. If the concessional regime under Part I is removed, the items may be redistributed into other parts of the schedule, according to the officials. The proposed changes come as Pakistan seeks to widen its tax base and meet revenue targets tied to ongoing economic reforms, while balancing concerns over inflation and the cost of essential imports.

Date: 2026-04-27

Details: Karachi, April 27, 2026 â€“ The Federal Board of Revenue (FBR) has issued a clarification regarding the applicability of advance tax on property transactions for builders and developers operating under a special tax regime, aiming to ease their financial burden and address industry concerns. In a circular issued on April 15, 2026, which supersedes an earlier directive dated March 31, the FBR explained that builders and developers covered under Section 7F of the Income Tax Ordinance, 2001 may seek exemption from advance tax under Section 236C, subject to certain conditions. Under Section 7F, specific categories of builders and developers are taxed based on a fixed percentage of their gross receipts, rather than conventional income calculation methods. However, concerns were raised that the collection of advance tax under Section 236Câ€”typically applicable on the sale of immovable propertyâ€”was creating an additional financial burden for such taxpayers. The FBR acknowledged that while advance tax under Section 236C is generally adjustable against capital gains tax, this mechanism does not effectively apply to builders and developers under Section 7F, whose income is treated as business income. As a result, the deduction of such tax leads to liquidity issues, particularly for those with no other taxable income to offset the amount. To address this issue, the FBR has clarified that eligible taxpayers who have already discharged their tax liability under Section 7F and do not have other taxable income may apply for exemption from advance tax collection. The exemption can be obtained by submitting an application to the concerned Commissioner Inland Revenue under Section 159 of the Ordinance. The tax authority further directed Commissioners to review such applications on a case-by-case basis and ensure that all conditions for exemption are fulfilled before granting approval. Importantly, the circular introduced a facilitative measure stating that if the Commissioner fails to act on an application within seven working days, the exemption certificate will be automatically issued through the FBRâ€™s IRIS system. The latest clarification is expected to provide much-needed relief to the construction sector, which has long argued that overlapping tax provisions were increasing the cost of doing business and constraining cash flows. By streamlining the exemption process and addressing procedural delays, the FBR aims to promote ease of doing business and support the growth of Pakistanâ€™s real estate and construction industries.

Date: 2026-04-25

Details: Published April 25, 2026 Updated about an hour ago By Recorder Report KARACHI: The Board of Directors of Bank Alfalah Limited (BAFL), in its meeting held on April 23, 2026, approved the Bankâ€™s financial results for the quarter ended March 31, 2026. The Board of the Bank also approved an interim cash dividend of PKR 1.5 per share (30 percent) [Mar 25 (restated): PKR 1.25 per share (25 percent)]. The Bank reported profit after tax of PKR 11.13 billion, up by 58 percent. Earnings per share (EPS) stood at PKR 3.53 [Mar 25 (restated): PKR 2.23]. The bankâ€™s profitability improved, supported by higher core income and supplemented by capital gains realized through the timely management of the portfolio. During the period, the shareholders of the Bank, at its Annual General Meeting held on March 26, 2026, approved a share split, wherein the number of shares was sub-divided in a 2-for-1 ratio. Accordingly, the issued and paid-up capital of the Bank has increased to 3,154,330,238 shares at a face value of Rs. 5/- each, resulting in restatement of EPS and dividend per share ratios for comparative periods. Deposits of the Bank closed at PKR 2.47 trillion, while Current Deposits of the Bank also grew to PKR 1.02 trillion. Bank Alfalah continued its focused approach to build its non-remunerative deposits on an average basis. Gross advances of the Bank amounted to PKR 1.08 trillion with diversified growth driven by Consumer, Small and Medium Enterprises (SME), and Agriculture segments. Net Interest Income (NII) of the Bank improved by 4.1 percent due to growth in average deposits and gross financing; whereas growth in Non Funded Income (NFI) was fueled by capital gains, increase in exchange income, and growth in fee income earned via Remittances, Cards, Trade Business, G2P mandates, and ADC services. Capital adequacy remained strong, with the ratio at 16.22 percent as of March 31, 2026, well above the regulatory requirement. Copyright Business Recorder, 2026

Date: 2026-04-25

Details: Published April 25, 2026 Updated about 2 hours ago NEW YORK: The S&P 500 climbed and the Nasdaq scaled an intraday record on Friday, supported by renewed hopes for US-Iran negotiations to end the war and a searing rally in Intel shares. Iranâ€™s foreign minister, Abbas Araqchi, was expected in the Pakistani capital Islamabad on Friday to discuss proposals for restarting peace talks with the US, Pakistani government sources said. That gave markets some relief at the end of a week overshadowed by a stalemate, with the US maintaining its naval blockade of Iranian ports while Iran seized ships attempting to pass through the Strait of Hormuz. â€œBoth sides are incentivized to end this quickly. They want to move on. Itâ€™s just going to take time and so weâ€™re trying not to get too focused on the day-to-day changes,â€ said Jack Herr, senior investment analyst at GuideStone Funds. Semiconductors, one of the marketâ€™s key pockets of resilience, continued to shine. The Philadelphia SE Semiconductor Index gained 4.3 percent and was on track to extend its winning run to 18 consecutive sessions. Intel, which hit a record high and was last up 23.4 percent, was the biggest gainer on the index following a better-than-expected revenue forecast for the second quarter. Rivals AMD and Arm also climbed over 15 percent each. Nvidia rose 5 percent and was set for a closing record. The information technology index added 2.3 percent and was the biggest boost to the benchmark. Tech stocks also shrugged off DeepSeekâ€™s preview of its highly awaited new model. At 11:52 a.m. ET, the Dow Jones Industrial Average fell 85.40 points, or 0.17 percent, to 49,224.92, the S&P 500 gained 53.25 points, or 0.75 percent, to 7,161.65 and the Nasdaq Composite gained 365.49 points, or 1.50 percent, to 24,804.12. The S&P 500 and the Nasdaq were cruising toward their fourth consecutive week of gains, their longest streak since October 2024. The blue-chip Dow, on the other hand, was set to end a three-week winning run. Attention is also shifting to the Federal Reserve meeting next week, which will be scrutinized for clues on rate cuts and the central bankâ€™s leadership succession. The US Justice Department is closing its investigation into Fed Chair Jerome Powell, clearing an obstacle to the confirmation of Kevin Warsh, Trumpâ€™s pick to lead the central bank. US rate futures on Friday priced in a 34 percent chance of easing by the end of the year, up from about 23 percent late on Thursday, according to LSEG estimates. Strong earnings from a series of corporations also offered some support. Yet with the results taking into account just one month of the war disruption, some investors have questioned how reliable they are as a guide to what lies ahead. Oil prices remain the biggest source of uncertainty, as Brent crude futures are still around 44 percent above pre-war levels because of disruption in the crucial Strait of Hormuz shipping route.

Date: 2026-04-25

Details: Published April 25, 2026 Updated about 3 hours ago By Reuters NEW YORK/LONDON: Oil prices whipsawed in volatile trade on Friday, but were higher on the week, as traders weighed supply disruptions against the potential restart of peace talks between the US and Iran that could help limit those disruptions. Brent crude futures settled at USD105.33 a barrel, rising 26 cents, or about 0.3 percent. US West Texas Intermediate futures settled at USD94.40 a barrel, falling USD1.45, or 1.5 percent. For the week, Brent gained about 16 percent and WTI rose nearly 13 percent. Crude futures gave back early gains after REUTERS reported that Iranian Foreign Minister Abbas Araghchi was expected to arrive in Islamabad late on Friday to discuss proposals for resuming peace talks with the US after talks collapsed earlier this week. Prices fell further after CNN reported that US President Donald Trump was sending special envoy Steve Witkoff and Jared Kushner to Pakistan for talks with Iranâ€™s foreign minister. Later, Trump told REUTERS that Iran plans to make an offer aimed at satisfying US demands. â€œTheyâ€™re making an offer and weâ€™ll have to see,â€ Trump said. Early in the session, prices rose 2 percent on fears of renewed military escalation in the region, the day after Iran released footage of commandos boarding a cargo ship in the Strait of Hormuz, and as progress stalled on re-opening the vital waterway. â€œTraders are liquidating length ahead of an unusually unpredictable weekend and will readjust their positions Sunday night based on Iranian developments,â€ said Tamas Varga of oil broker PVM. Navigation through the Strait of Hormuz, which before the war carried about a fifth of global oil output, remains effectively blocked. Iranâ€™s capture of two cargo ships highlighted Washingtonâ€™s difficulties in trying to control the passage. Only five ships, including an Iranian oil products tanker, have moved through the Strait of Hormuz in the past 24 hours, shipping data showed. On Thursday, US President Donald Trump said Iran may have loaded up its weaponry â€œa little bitâ€ during a two-week ceasefire, but added that the US military could eliminate it in a single day. On Wednesday, he said he would indefinitely extend the ceasefire to allow for further peace talks. â€œAs tensions have heightened this week since no meeting between the US and Iran developed, an open-ended ceasefire will likely coincide with a continued conflict,â€ said oil consultant Jim Ritterbusch of Ritterbusch and Associates. â€œThis favors even higher prices especially in Brent and diesel, the more sensitive markets to a continuation of this war.â€ Haitong Futures said in a report that if peace talks fail to make progress by the end of April and fighting resumes, oil prices could climb to new highs for the year.

Date: 2026-04-24

Details: Press Release Published April 24, 2026 Updated about an hour ago LAHORE: MCB Bank Limited is pleased to announce its financial results for the quarter ended March 31, 2026, reflecting resilient performance supported by strong fundamentals, disciplined execution, and balance sheet strength amid a challenging macroeconomic environment. The Board of Directors of MCB Bank, under the Chairmanship of Mian Mohammad Mansha, reviewed and approved the Bankâ€™s financial statements for the quarter ended March 31, 2026. The Board declared a first interim cash dividend of Rs 9.00 per share, i.e. 90 percent, re-affirming Bankâ€™s commitment to delivering consistent shareholder returns. MCB reported a Profit Before Tax (PBT) of Rs 26.7 billion and a Profit After Tax (PAT) of Rs 12.8 billion, translating into Earnings Per Share (EPS) of Rs 10.80. On a consolidated basis, PBT stood at Rs 27.9 billion. Net interest income increased by 9 percent year-on-year to Rs 38.2 billion (Q1â€™25: Rs 35.2 billion), primarily driven by sustained growth in low-cost deposits and effective yield optimization, despite a relatively lower average policy rate environment. Notably, this represents the highest quarterly net interest income reported by the Bank over the past six quarters, reflecting the strength of its funding mix and resilience of core earnings. Non-markup income remained resilient at Rs 8.5 billion. Fee and commission income increased by 13 percent year-on-year to Rs 5.9 billion, driven by continued momentum in the Bankâ€™s digital banking franchise and higher transaction volumes. Within this segment, card-related income grew by 15 percent, branch banking fee income rose by 6 percent supported by improved customer engagement and cross-sell initiatives, while consumer banking fee income recorded a strong growth of 32 percent, reflecting increased customer activity and higher uptake of consumer financing products. Foreign exchange and dividend income contributed Rs 1.384 billion and Rs 1.137 billion respectively to the non-markup income base. Operating expenses increased by 9 percent year-on-year, primarily reflecting continued investments in technology, HR and talent development, and brand-building initiatives to support long-term growth. Despite the planned expansion in the cost base, the Bankâ€™s cost-to-income ratio stood at 39.59 percent, demonstrating cost discipline alongside its focus on operational efficiency and innovation. On the balance sheet, total assets increased to Rs 3.263 trillion (YEâ€™25: Rs 3.247 trillion). Advances registered growth of Rs 59 billion (8 percent), reflecting improved credit uptake. The investment portfolio stood at Rs 1.932 trillion (YEâ€™25: Rs 1.947 trillion). Asset quality remained satisfactory, with non-performing loans (NPLs) reported at Rs 50 billion. The infection and coverage ratios improved to 6.29 percent and 94.51 percent respectively. The Bank continues to focus on proactive management of its delinquent portfolio, with emphasis on recoveries, resolution, and containment of credit losses. Deposits stood at Rs 2.3 trillion, with the current account mix improving to 56 percent (YEâ€™25: 54 percent), reinforcing the Bankâ€™s strength in low-cost deposit mobilization. This favourable mix, along with a lower interest rate environment, reduced the domestic cost of deposits to 4.14 percent (Q1â€™25: 5.51 percent). The Bank reported Return on Assets (ROA) of 1.57 percent and Return on Equity (ROE) of 20.89 percent. MCB Bank maintained its position as one of the leading players in the home remittance market, with a market share of 9.6 percent, processing USD 1,011 million in remittance inflows during the period. Leveraging its extensive branch footprint and expanding digital channels, the Bank continued to support the State Bank of Pakistanâ€™s financial inclusion and formal remittance initiatives, contributing meaningfully to foreign exchange inflows and overall economic stability. The Bankâ€™s capital and liquidity positions remained robust, with the Capital Adequacy Ratio (CAR) standing at 18.70 percent and the Common Equity Tier-1 (CET1) ratio at 14.87 percent, well above minimum regulatory requirements. Liquidity buffers remained strong, reflected in a Liquidity Coverage Ratio (LCR) of 239.90 percent and a Net Stable Funding Ratio (NSFR) of 155.79 percent. MCBâ€™s credit ratings were reaffirmed by the Pakistan Credit Rating Agency (PACRA) at â€˜AAAâ€™ for long-term and â€˜A1+â€™ for short-term through its notification dated June 23, 2025. MCB Bank operates the second-largest branch network in Pakistan on a consolidated basis, with over 1,700 branches and continues to rank among the top capitalized bank stocks traded on the Pakistan Stock Exchange. Looking ahead, the Bank remains well-positioned to deliver sustainable growth, supported by a strong capital base, ample liquidity, diversified revenue streams, and disciplined risk management, while continuing to focus on operational efficiency and customer-centric innovation. Copyright Business Recorder, 2026

Date: 2026-04-24

Details: Recorder Report Published April 24, 2026 Updated about an hour ago KARACHI: Industrialists of the SITE Association of Industry have voiced grave concern over rising incidents of extortion, factory robberies, and the absence of a conducive business environment, urging the government to ensure protection and stability for economic activity. At a meeting held at the SITE Association, members apprised Inspector General of Police Sindh Javed Alam Odho of the deteriorating law and order situation and requested immediate measures to safeguard industries and provide a peaceful environment for uninterrupted operations. Senior police officials, SITE office-bearers, and a large number of members attended the session. SAI President Abdul Rehman Fudda strongly condemned the recent firing incident on an industrialist in North Karachi linked to extortion demands. He stressed that the safety of the business community must be guaranteed and pointed out rampant encroachments in SITE area, which the IG assured would be removed permanently. Odho also pledged strict action against extortionists and those attempting to harm industrialists. Patron-in-Chief Zubair Motiwala said the prevailing atmosphere in police stations discourages citizens from lodging FIRs, adding that crime incidents should be recorded without requiring names. He highlighted traffic congestion from Siraj Kassam Teli flyover to Nazimabad underpass, costing commuters at least 20 minutes daily. He also drew attention to aerial firing at weddings damaging solar panels, to which the IG assured stern action. Patron Saleem Parekh raised concerns over unannounced raids by SSGC Police, Railways Police, and KWSC Police, urging streamlining of their operations. He suggested donating a drone camera to the Association to strengthen its Crime Monitoring Cell. Former President Jawed Bilwani called for permanent removal of encroachments, restriction of heavy traffic during evening rush hours, and dedicated truck parking to ease congestion. He proposed that the first phase of the Safe City Project begin at entry and exit points of SITE area, with industries directed to install quality CCTV cameras and spotlights. Law & Order Committee Chairman Abdul Hadi revealed a shortage of 113 police personnel across SITE PS-A, PS-B, and the Crime Monitoring Cell, with only one of three police mobiles available for patrolling. He demanded at least 8â€“10 mobiles to ensure timely response. He added that factory robberies have resurfaced in the past five months, while broken-down vehicles on flyovers continue to disrupt traffic. DIG Traffic Pir Muhammad Shah informed participants that all Station Officers have been provided tablets for reporting violations. He said commuters are being given one month to adopt lane discipline, after which challans will be imposed, starting from Shahrah-e-Faisal. Steps are also being taken to improve traffic flow on Mauripur Road. Copyright Business Recorder, 2026

Date: 2026-04-24

Details: Reuters Published April 24, 2026 Updated 18 minutes ago NEW YORK: US natural gas futures slid about 2percent on Thursday on ample amounts of gas in storage and expectations energy firms will keep injecting more gas into storage than usual in coming weeks. Futures had risen for the previous six days on a drop in output in recent weeks and near-record liquefied natural gas (LNG) exports. Front-month gas futures for May delivery on the New York Mercantile Exchange fell 4.8 cents, or 1.8percent, to USD2.674 per million British thermal units (mmBtu). On Wednesday, the contract closed at its highest price since April 8 for a fourth day in a row. That price decline occurred ahead of a federal report expected to show energy firms added more gas than usual to storage last week as mild weather kept heating demand low. Analysts forecast that energy firms added 94 billion cubic feet of gas into storage during the week ended April 17. That figure compares with an increase of 77 bcf during the same week last year and a five-year (2021-2025) average increase of 64 bcf for the period. In the cash market, average prices at the Waha Hub in West Texas have remained in negative territory for a record 54 days in a row as pipeline constraints continued to trap gas in the Permian region, the nationâ€™s biggest oil-producing shale basin. Daily Waha prices first averaged below zero in 2019. They did so 17 times in 2019, six times in 2020, once in 2023, 49 times in 2024, 39 times in 2025, and a record 63 times so far this year. Waha prices have averaged a negative USD1.91 per mmBtu so far in 2026, compared with a positive USD1.15 in 2025 and a positive USD2.88 over the past five years (2021-2025). Financial firm LSEG said average gas output in the US Lower 48 states has eased to 110.3 billion cubic feet per day (bcfd) so far in April, down from 110.4 bcfd in March. That figure compares with a monthly record high of 110.7 bcfd in December 2025. On a daily basis, output was on track to drop by around 3.8 bcfd over the past 17 days to a preliminary 11-week low of 108.3 bcfd on Thursday. Preliminary data, however, is often revised later in the day. Analysts said mostly mild weather so far this spring has allowed energy firms to inject more gas into storage than usual, boosting inventories to a projected 7percent above normal levels during the week ended April 17, up from 6percent above normal during the week ended April 10. Looking ahead, meteorologists forecast the weather will remain mostly near normal through May 8. LSEG projected average gas demand in the Lower 48 states, including exports, would slide from 103.7 bcfd this week to 100.5 bcfd next week. That forecast was similar to LSEGâ€™s outlook on Wednesday. Average gas flows to the nine big US LNG export plants have risen to 18.9 bcfd so far in April, up from 18.6 bcfd in March.

Date: 2026-04-24

Details: Reuters Published April 24, 2026 Updated about 2 hours ago HOUSTON: Crude oil futures spiked USD5 a barrel on Thursday after reports that air defences were engaging targets over Tehran and of a power struggle between Iranâ€™s hardliners and moderates. After spiking, the benchmarks pared gains. Brent crude futures settled at USD105.07 a barrel, gaining USD3.16 or 3.1 percent. West Texas Intermediate futures finished at USD95.85 a barrel, up USD2.89, or 3.11 percent. Iran negotiator quits Israeli radio reported the resignation of Iranâ€™s top negotiator, Mohammad Baqer Qalibaf, from the team speaking to the US through Pakistani intermediaries about ending the war. Qalibafâ€™s resignation was seen as a victory for hardline elements within the Iranian government. Iranian news services said air defences in Tehran were engaging targets over the city. That followed reports of drone attacks on Iranian Kurdish opponents of the Tehran government at a base in Iraq. Iran flaunted its tightened grip over the Strait of Hormuz with video of its commandos storming a huge cargo ship, after the collapse of peace talks that Washington had hoped would open the important shipping corridor. US President Donald Trump said in a social media post that he had ordered the US Navy â€œto shoot and kill any boatâ€ mining the strait. John Kilduff, partner with Again Capital, said the market was being buffeted by alternating news reports of Trump extending the ceasefire this week and threatening to sink Iranian mine-laying ships. â€œSome people call it headline bingo, I call it headline roulette,â€ Kilduff said. â€œI fear weâ€™re going to wake up one day and realize weâ€™re in a much worse (supply) position and prices are going to reset to a much higher level.â€ Strait of Hormuz transit still restricted While Trump extended a ceasefire between the countries after a request by Pakistani mediators, Iran and the US are still restricting transit of ships through the strait, which carried about 20 percent of daily global oil supplies until the start of the war on February 28. Trump, without providing evidence, said on Thursday the US had â€œtotal controlâ€ over the strait, and that it was â€œsealed up tightâ€ until Iran made a deal. Iran seized two ships in the waterway on Wednesday. Trump has maintained a US Navy blockade of Iranâ€™s trade by sea. However, about 10.7 million barrels of Iranian crude exports crossed through the strait and left the area blockaded by the US Navy between April 13 and 21, data analytics company Vortexa said. The US military has intercepted at least three Iranian-flagged tankers in Asian waters and is redirecting them away from positions near India, Malaysia and Sri Lanka, shipping and security sources said on Wednesday. Trump has not set an end date for the extended ceasefire, White House press secretary Karoline Leavitt told reporters. Phil Flynn, senior analyst with Price Futures Group, said prices were constrained by confidence in the crude market. â€œThe market continues to believe weâ€™re going to find a way through this,â€ Flynn said.

Date: 2026-04-24

Details: Written by Shahnawaz Akhter Karachi, April 24, 2026 â€“ The Karachi Tax Bar Association (KTBA) has strongly defended high-income taxpayers against default surcharge proceedings initiated by the Federal Board of Revenue (FBR), raising concerns over legality, fairness, and economic impact. In a formal letter addressed to FBR Chairman Rashid Mahmood Langrial, KTBA President Muhammad Mehmood Bikiya outlined key grievances regarding the imposition of default surcharge under Section 205 of the Income Tax Ordinance, 2001, linked to the payment of Super Tax. The association emphasized that while taxpayers acknowledge their legal obligation to pay taxes, enforcement actions must strictly adhere to the law. The controversy stems from the Super Tax introduced around four years ago, where litigation by high earners delayed payments, contributing to a significant revenue gap for the government. According to KTBA, taxpayers have now fully paid the principal amount of the Super Tax following directives from the Federal Constitutional Court. However, despite compliance, FBR field formations have initiated default surcharge proceedings, citing delays in payment timelines. KTBA argued that many of these delays occurred due to valid legal reasons, including stay orders, court rulings, and appellate relief granted by competent judicial forums. These legal protections, the association noted, justified the timing of tax payments and should exempt taxpayers from penalty charges. A major concern highlighted by KTBA is the inconsistency in tax administration. On one hand, taxpayers are being penalized through surcharge orders, while on the other, their legitimate tax refunds remain pending. The association stressed that imposing additional financial burdens without adjusting outstanding refunds violates principles of fairness and equity. From a legal standpoint, KTBA referenced a significant ruling by the Sindh High Court dated December 22, 2022, which declared the Super Tax for Tax Year 2022 unconstitutional. This judgment remained binding under Article 201 of the Constitution until the matter was finally decided by the Federal Constitutional Court on January 27, 2026. During this period, the ruling was consistently upheld in appellate proceedings, including cases before the Commissioner Inland Revenue (Appeals) and the Appellate Tribunal Inland Revenue. Additionally, taxpayers relied on directives from the Islamabad High Court regarding the application of Super Tax under the Final Tax Regime. KTBA stressed that respecting judicial decisionsâ€”whether interim or finalâ€”is a cornerstone of constitutional governance. Penalizing taxpayers who acted in accordance with such rulings undermines the rule of law and damages trust in the tax system. The association also warned of broader economic consequences. High-income taxpayers, who contribute significantly to national revenue, are now facing increased financial pressure due to surcharge proceedings and delayed refunds. KTBA cautioned that such measures could discourage compliance and negatively impact the overall economic environment. In its recommendations, KTBA urged the FBR to immediately review and withdraw default surcharge proceedings in cases involving judicial relief, stay orders, or refundable tax credits. It also called for expedited processing of pending tax refunds to restore confidence and ensure a fair tax regime. The issue highlights growing tensions between taxpayers and authorities, as stakeholders push for a more transparent, equitable, and legally consistent taxation system in Pakistan.

Date: 2026-04-23

Details: Reuters Published April 23, 2026 Updated about 5 hours ago FRANKFURT: European shares dipped on Wednesday, extending losses for a third straight session, as a fragile US-Iran truce weighed on sentiment, while investors also assessed a raft of regional corporate earnings. Iran seized two ships in the Strait of Hormuz, tightening its grip on the strategic waterway, while US President Donald Trump continued the US Navyâ€™s blockade of the Iranian coast. The pan-European STOXX 600 index ended 0.4 percent lower at 613.88 points. Major regional bourses were also lower, with Germanyâ€™s DAX shedding 0.3 percent and Franceâ€™s CAC 40 down 1 percent. Germanyâ€™s economy ministry halved its 2026 growth forecast, while raising its inflation projections. Geopolitical uncertainty in the Middle East continued to weigh on markets, with euro zone bond yields edging up as oil hit USD100, as Trumpâ€™s indefinite ceasefire announcement appeared unilateral, with neither Iran nor Israel signalling whether they would honour the agreement. â€œWe know that the rising energy prices are weighing on demand and on economic growth projections. So unless we do see concrete progress in peace negotiations, I believe that the moves up and down do not necessarily reflect a high conviction direction,â€ said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. The energy sector jumped 2.3 percent, continuing to benefit from higher oil prices. Materials and technology inched up 1.7 percent and 0.6 percent, respectively. ASM International shares jumped 7.1 percent with the computer chip equipment maker forecasting second-quarter revenue guidance above market expectations. Other chip and technology equipment makers also rallied with German chipmakers and suppliers Aixtron and Infineon rising over 3 percent each, while ASML and BESI gained 1 percent and 1.9 percent, respectively. â€œIt will be interesting to see if tech can withhold the pressure in earnings season and whether investors start to question once again whether companies are over-investing in AI,â€ said Daniela Hathorn, senior market analyst at Capital.com. â€œFor now, itâ€™s still a key driver in markets.â€ Travel and leisure stocks declined 2.1 percent as high energy costs and geopolitical uncertainty weighed.

Date: 2026-04-23

Details: Reuters Published April 23, 2026 Updated about 5 hours ago NEW YORK: Wall Streetâ€™s main indexes climbed on Wednesday after US President Donald Trump extended the ceasefire with Iran, even as uncertainty remained over whether Tehran and US ally Israel would honor the truce. Trump said the indefinite extension of the ceasefire followed a request by Pakistani mediators. However, the US Navyâ€™s blockade of Iranian ports remained in effect, and Iran seized two ships in the Strait of Hormuz. The opening of the waterway, responsible for about 20 percent of global oil supply, remains a major unknown for investors and has been one of the sticking points in the negotiations. The bullish sentiment despite the uncertainty points to a market desperate to cling to good news, and reflects investor belief that despite setbacks, the war will be settled at the negotiating table instead of the battlefield. At 11:25 a.m. ET, the Dow Jones Industrial Average rose 381.18 points, or 0.78 percent, to 49,530.56, the S&P 500 gained 61.56 points, or 0.87 percent, to 7,125.15 and the Nasdaq Composite gained 313.74 points, or 1.29 percent, to 24,573.70. â€œItâ€™s possible that we see a continuation of negative headlines, ultimatums and deadlines for negotiations, but that doesnâ€™t mean that stocks will react meaningfully to each one, since markets already priced in the worst of the conflict during the lows made back in March,â€ said Rick Gardner, chief investment officer, RGA Investments. However, risks of an inflation flare-up remain, with oil prices near the USD100-a-barrel mark. â€œEquity markets appear to be pricing in a rapid resolution â€” and conditions on the ground suggest that may be premature,â€ said Larry Adam, chief investment officer at Raymond James. Information technology stocks added 1.6 percent and were the biggest boost to the S&P 500. Energy stocks also rose 0.8 percent. The Philadelphia SE Semiconductor Index hit a fresh peak and was on track for its 16th straight day of gains â€” its longest streak ever. Micron Technology shares jumped 5.6 percent, while Seagate rose 2.5 percent after Barclays upgraded the data storage firmâ€™s rating to â€œoverweightâ€. A strong run of earnings so far has reassured Wall Street about the health of the US consumer, the growth engine of the economy.

Date: 2026-04-23

Details: Written by Faisal Shahnawaz ISLAMABAD, April 23, 2026 â€“ The Federal Board of Revenue (FBR) has announced a large-scale auction of confiscated vehicles under the Collectorate of Customs (Enforcement), Peshawar, offering a wide range of cars, SUVs, pickups and commercial vehicles to bidders. According to the official schedule, the auction will take place at the Custom House in Peshawar on April 27, 2026, at 10:00 AM. The auction is being conducted through a government-appointed auctioneer and will follow an â€œas is, where isâ€ basis, meaning buyers will be responsible for assessing the condition of vehicles prior to bidding. Authorities said the auction covers vehicles stored at multiple state warehouses, including Peshawar, Airport, Nowshera, Mardan, Abbottabad, Bannu, Kohat and D.I. Khan, reflecting one of the largest enforcement-led disposal drives in recent months. Auction Overview Detail Information Organiser Collectorate of Customs (Enforcement), Peshawar Supervising Authority Federal Board of Revenue (FBR) Auction Date April 27, 2026 Time 10:00 AM Venue Custom House, Peshawar Basis As Is, Where Is Auctioneer M/s Easy World Officials advised bidders to inspect vehicles before participating, as many units are damaged, without keys, or subject to legal conditions such as court stays. Key Vehicles at Peshawar Godown S# Make & Model Year Condition/Remarks 1 Toyota Premio 2004 High Court Stay 2 Toyota Land Cruiser 2005 High Court Stay 3 Toyota Prado Jeep 1995 Partially Damaged 4 Toyota Hilux 1994 Partially Damaged 5 Honda Vezel 2014 Court Stay 6 Toyota Fielder 2014-15 Court Stay 7 Honda Accord 2014 Normal 8 Toyota Prius 2010 Without Key 9 Toyota Aqua 2012-13 Normal 10 Toyota Passo 2017 Good Condition 11 Toyota Rush Jeep 2015 Minor Damage 12 Toyota Sienta 2017 Normal Vehicles at I&I and Mardan Location Make & Model Year Reserve Price I&I Suzuki Van 2004 Rs1.5 million I&I Toyota Prado 2003 Rs6.5 million Mardan Toyota Land Cruiser 2012 Not disclosed Vehicles at Nowshera and Abbottabad Location Make & Model Year Nowshera Toyota Fielder 2000 Nowshera Honda Grace Hybrid 2015 Nowshera Toyota Prius 2009 Abbottabad Mitsubishi Pajero 1992 Vehicles at D.I. Khan S# Make & Model Year Remarks 1 Toyota Aqua 2017 Tribunal Stay 2 Toyota Crossroad 2007 Tribunal Stay 3 Toyota Land Cruiser 1990 Court Stay 4 Toyota Corolla Altis 2011 Normal 5 Honda City 1997 Registered 6 Hino Truck Trailer 2011 Commercial 7 Toyota Indus Corolla 2001 Normal 8 Toyota Hilux 1997 Normal 9 Toyota Corolla Altis 2016 Normal Vehicles at Kohat S# Make & Model Year 1 Haval Jolion 2023 2 Toyota Premio 2006 3 Toyota Axio Fielder 2013 4 Toyota Prius 2016 5 Toyota Fielder 2014 6 Toyota Prius 2009 7 Toyota Corolla 2005 Officials noted that several vehicles are subject to legal stays or partial damage, which may impact bidding interest and final prices. However, the wide variety of vehiclesâ€”from economy cars to luxury SUVs and commercial trucksâ€”is expected to attract strong participation from dealers and individual buyers. The FBR said such auctions are part of ongoing enforcement efforts to dispose of confiscated goods transparently while generating revenue for the national exchequer. Disclaimer: The information provided in this article is based on official announcements and available data at the time of publication. Details such as vehicle condition, legal status, reserve prices, and auction schedule are subject to change by the Federal Board of Revenue or relevant customs authorities without prior notice. Prospective bidders are advised to independently verify all information, inspect vehicles physically, and review applicable terms and conditions before participating in the auction. The auction is conducted on an â€œas is, where isâ€ basis, and the publisher does not assume responsibility for any discrepancies, financial losses, or decisions made based on this content.

Date: 2026-04-22

Details: KARACHI, April 22, 2026 â€” The Federal Board of Revenue (FBR) has notified revised customs values for old and used imported mobile phones, aiming to align duty assessment with prevailing international market trends and address stakeholder concerns. The Directorate General of Customs Valuation issued Valuation Ruling No. 2070/2026, superseding the earlier Valuation Ruling No. 2035/2026 dated January 16, 2026. The updated ruling covers a wide range of popular brands including Apple, Samsung, Google Pixel and OnePlus, and will be used to determine duties and taxes at the import stage for commercial consignments. Background and Revision Process The previous valuation ruling was challenged by both manufacturers and importers under Section 25D of the Customs Act, 1969. The Director General, through an order dated April 3, 2026, rescinded the earlier ruling, directing authorities to reconsider valuation methods, including the use of similar goods data and international auction prices. Following consultations with stakeholders and a fresh market inquiry, the customs values were re-determined under Section 25(7) of the Customs Act after transaction and comparable value methods were found inapplicable due to inconsistent declared values. Key Changes in Customs Values The revised ruling reflects noticeable adjustments across most smartphone models, particularly high-end devices. Comparative Table of Selected Models (US$/Piece) Brand Model Old Value (2035/2026) New Value (2070/2026) Change Apple iPhone 15 Pro Max 460 505 +45 Apple iPhone 15 Pro 390 472 +82 Apple iPhone 14 Pro Max 360 413 +53 Apple iPhone 13 Pro Max 295 374 +79 Apple iPhone 12 120 156 +36 Samsung Galaxy S23 Ultra 255 305 +50 Samsung Galaxy S23 140 250 +110 Samsung Galaxy S22 80 130 +50 Samsung Galaxy S21 50 110 +60 Google Pixel 9 Pro XL 260 348 +88 Google Pixel 8 Pro 188 215 +27 Google Pixel 7 59 105 +46 OnePlus OnePlus 12 184 221 +37 OnePlus OnePlus 11 92 121 +29 Source: Valuation Rulings 2035/2026 and 2070/2026 Key Provisions â€¢ The new values apply to used mobile phones imported without packaging and accessories in commercial quantities. â€¢ Devices must have been activated at least six months prior to export to Pakistan. â€¢ If the declared invoice value exceeds the notified customs value, the higher value will be used for duty assessment. â€¢ For models not listed, valuation will be determined under Sections 25(5) and 25(6) of the Customs Act. Market Impact Industry analysts believe the upward revision in customs values will likely increase the tax burden on importers of used smartphones, potentially pushing retail prices higher in the local market. However, the FBR maintains that the revision ensures transparency and minimizes under-invoicing by aligning values with actual market conditions. The ruling has been circulated to all customs collectorates for immediate implementation.

Date: 2026-04-22

Details: Karachi, April 22, 2026 â€” Khurram Ijaz, General Secretary of Businessmen Panel Progressive (BMPP) and former Vice President of Federation of Pakistan Chambers of Commerce and Industry, has called on policymakers to present a production-friendly federal budget for 2026â€“27, emphasizing the need to revive industrial growth and enhance exports. Commenting on the initiation of the budget exercise by the Tax Policy Office under the Ministry of Finance, Khurram Ijaz described the separation of tax policy formulation from the Federal Board of Revenue as a â€œpositive and much-needed reform.â€ â€œThis is the first time an independent Tax Policy Office is formulating tax proposals purely from a policy perspective, and this step can significantly improve transparency and governance,â€ he said. â€œI appreciate the efforts of Director General Tax Policy Office, Najeeb Memon, for actively engaging with the business community.â€ Ijaz stressed that the upcoming budget must prioritize strengthening Pakistanâ€™s industrial base. â€œWe need a clear shift towards policies that promote local production and exports. Without reducing the cost of doing business, industrial revival will remain a challenge,â€ he stated. Highlighting the challenges faced by the business community, he noted, â€œHigh energy tariffs, elevated interest rates, and excessive taxation are squeezing industries. If these issues are not addressed, Pakistan risks further deindustrialization.â€ He warned that a growing number of foreign companies are relocating their operations, while local firms are increasingly registering abroad. â€œThis trend is alarming. It not only reduces domestic investment but also leads to job losses. The government must act decisively to restore investor confidence,â€ he added. Khurram Ijaz underscored the importance of broadening the tax base to ease pressure on existing taxpayers. â€œInstead of overburdening compliant businesses, the government should leverage available data to bring untaxed sectors into the net,â€ he said. He also called for alignment of the National Tariff Policy with ground realities. â€œOur industries are already facing high input costs. Tariff structures must be rationalized to support domestic manufacturers,â€ he emphasized. To improve tax compliance, Ijaz proposed introducing a simplified tax regime for traders and reviewing the minimum tax system for low-margin sectors. â€œEase of compliance is key. A simplified system will encourage more businesses to formalize,â€ he noted. Furthermore, he urged authorities to ensure transparency in tax exemptions. â€œThere should be strict monitoring of exemptions granted through SROs to prevent misuse and ensure fairness,â€ he said. Ijaz also highlighted concerns regarding tax enforcement practices. â€œLaw-abiding taxpayers should not be subjected to repeated audits and unnecessary actions. Enforcement must be balanced and facilitative, not punitive,â€ he remarked. Expressing optimism, Khurram Ijaz concluded, â€œThe Tax Policy Office has an opportunity to introduce meaningful reforms. By simplifying income tax, sales tax, and federal excise laws, eliminating distortions, and closing loopholes, the government can create a competitive and growth-oriented economic environment.â€ He emphasized the importance of consultation, adding, â€œThe business community must be taken on board to identify practical challenges and ensure that policy reforms are effective, sustainable, and aligned with economic realities.â€

Date: 2026-04-22

Details: Reuters Published April 22, 2026 Updated 13 minutes ago SHANGHAI: Mainland China stocks ended marginally higher on Tuesday, reversing earlier losses, as investors anxiously awaited potential US-Iran peace talks to ease tensions in the Middle East and relieve a global energy supply shock. The US expressed confidence that peace talks with Iran would go ahead in Pakistan thisweek, and a senior Iranian official said Tehran was considering joining, as the end of a two-week ceasefire loomed. Chinaâ€™s benchmark Shanghai Composite index inched higher by 0.07 percent, while the blue-chip CSI300 Index rose 0.22 percent. Coal-related shares led the gains, with a sub-index tracking the industry rising 2.54 percent. China might have to burn more fossil fuels this year as meteorologists forecast a moderate-or-stronger El Nino weather event in the summer and autumn, which could disrupt operations at hydropower stations across the region at a time when fuel supplies from the Middle East are disrupted. In Hong Kong, the benchmark Hang Seng Index advanced 0.48 percent. â€œWe see about 5-10 percent upside for Chinese equities towards year-end with a few positive developments shaping up; however, near-term volatility remains high,â€ analysts at Morgan Stanley said in a note this week. â€œWe also expect the path to remain choppy in the near term with volatility persisting through May to July, given uncertainty around the US-China presidentsâ€™ meeting, first-quarter earnings season, IPO shares unlocking as well as the ongoing Middle East situation.â€ Separately, shares of Chinese circuit board maker Victory Giant Technology jumped 60 percent in their Hong Kong debut on Tuesday, after raising HKD20.1 billion in a share sale in the cityâ€™s biggest listing in about seven months. Hong Kong carrier Cathay Pacific aims to raise about HKD2 billion through a one- or two-tranche fixed-rate Hong Kong dollar bond, sources told Reuters.

Date: 2026-04-22

Details: Reuters Published April 22, 2026 Updated 13 minutes ago NEW YORK: Wall Streetâ€™s main indexes were subdued on Tuesday, as renewed concerns about the Middle East war halted an early rally in stocks and overshadowed earnings optimism. Pakistan is still awaiting a formal response from Iran to confirm that it will send a delegation to attend a second round of peace talks with the US in Islamabad, the countryâ€™s Information Minister Attaullah Tarar said in a post on X. The talks are scheduled against a fragile backdrop. In an interview with CNBC earlier, US President Donald Trump said he does not want to extend the ceasefire with Iran, which is set to expire soon. A failure to resume the discussions could swiftly upend investorsâ€™ assumptions that peak uncertainty related to the war has passed. At 11:52 a.m. ET, the Dow Jones Industrial Average fell 87.88 points, or 0.18 percent, to 49,354.68, the S&P 500 lost 19.21 points, or 0.27 percent, to 7,089.93 and the Nasdaq Composite slipped 38.08 points, or 0.16 percent, to 24,366.32. All the indexes were in positive territory earlier in the session. Investors are also parsing comments from Kevin Warsh, Trumpâ€™s nominee to lead the Federal Reserve, whose confirmation hearing was underway in the Senate on Tuesday. He called for â€œregime changeâ€ at the US central bank that would include a new â€œframeworkâ€ for controlling inflation and a possible overhaul of how it communicates with the public about monetary policy. Republican Senator Thom Tillis has promised to block Warshâ€™s confirmation until the Department of Justice ends an investigation into current Fed Chair Jerome Powell that Tillis says threatens the central bankâ€™s independence. The impasse could have far-reaching implications for monetary policy, especially as Trump has vowed to fire Powell if he does not leave when his term ends in May. â€œThe risk now is that if new leadership under Warsh does not take hold by mid-June, the Fed could delay that 25 bps rate cut and maintain a â€˜wait-and-seeâ€™ stance instead,â€ said Atakan Bakiskan, US economist at Berenberg. Optimism around AI and upbeat earnings have given investors some reason to cheer. J.P. Morgan raised its year-end target for the S&P 500, citing AI and tech-driven earnings, while Amazon said on Monday it will invest up to USD25 billion in Anthropic, signaling Big Tech is still willing to pour money into AI. Amazon shares rose 1.8 percent, helping the S&P 500 consumer discretionary sector advance 0.4 percent. Energy stocks rose 0.5 percent, thanks to a jump in crude prices.

Date: 2026-04-21

Details: Written by Mrs. Anjum Shahnawaz LAHORE â€” The Punjab Assembly has declared recent government notifications revising agricultural income tax rates unlawful, ordering an immediate suspension of their enforcement, assessments and collections. Speaker Malik Muhammad Ahmad Khan issued the ruling during the Assemblyâ€™s 41st session while hearing a privilege motion moved by lawmaker Zulfiqar Ali Shah. The Speaker said the notifications lacked legal validity as they were not presented before the Assembly in line with statutory requirements. He directed the Excise and Taxation Department to halt implementation of the revised rates and instructed the provincial government to place the notifications before the House within 15 days, along with a detailed explanation for the procedural lapse. The matter has also been referred to the Assemblyâ€™s Committee on Law Reforms and Delegated Legislation, which has been tasked with fixing responsibility and submitting its findings within one month. The dispute relates to notifications issued on March 5, 2025, revising agricultural income tax rates, followed by another notification on September 10, 2025, seeking retrospective application from July 1, 2025. The mover of the motion argued that the notifications were not laid before the Assembly during the 2025â€“26 budget session, as required under Section 11(2) of the Punjab Agricultural Income Tax Act, 1997. In his ruling, the Speaker emphasised that taxation powers rest with the legislature under the Constitution and that any delegated authority must strictly adhere to legal procedures. He said failure to present such notifications before the Assembly renders them ineffective and without lawful basis. The Speaker termed the omission a breach of parliamentary privilege and underscored the importance of legislative oversight in fiscal matters. He also directed that all future changes to agricultural income tax rates be introduced during the annual budget session. The ruling added that affected taxpayers may seek legal remedies regarding recoveries made under the now-void notifications.

Date: 2026-04-21

Details: Reuters Published April 21, 2026 Updated about 2 hours ago SHANGHAI: China stocks rose to one-month highs on Monday, while Hong Kong shares also gained, recouping losses recorded since the outbreak of the Iran war on February 28, as signs of Chinaâ€™s economic resilience and fresh market-friendly policies lifted sentiment. Regional markets also rebounded, but with uncertainty lingering around US-Iran talks, some caution that markets may be too complacent. The blue-chip CSI300 Index rose 0.6 percent and the Shanghai Composite Index gained 0.8 percent, both hitting one-month highs. Shenzhenâ€™s Chinext Composite Index flirted with record highs. Hong Kongâ€™s Hang Seng advanced 0.8 percent, joining a rally in Asian markets. Investors remain optimistic toward a US-Iran deal, even as concerns grew on Monday that the ceasefire might not hold after the US said it had seized an Iranian cargo ship that tried to run its blockade and Iran vowed to retaliate. â€œBecause the market has become more confident in resolution, developments that are large enough to shake that confidence are likely also to have meaningful market impact,â€ Goldman Sachs said, cautioning against downside tail risks. Orient Securities pointed to investment opportunities in Chinaâ€™s manufacturing sector. â€œIn the backdrop of unprecedented demand for energy security, Chinaâ€™s globally competitive new energy sector is undoubtedly the core investment theme,â€ the brokerage said in a report. Reflecting economic resilience, China on Monday left benchmark loan prime rates unchanged for the 11th consecutive month in April, following solid economic growth at the start of the year. Chinaâ€™s securities regulator on Friday broadened the types of strategic investors in companiesâ€™ additional share sales, revamped fund managersâ€™ incentive system and cracked down on illegal share sales by major shareholders. Technology shares, including satellite, electronics and chipmaking, led gains in China on Monday. Artificial Intelligence stocks rose after news that Chinese AI startup DeepSeek is in talks with investors to raise at least USD300 million at a valuation of USD10 billion. Robotics stocks rose after a half-marathon race on Sunday highlighted the sectorâ€™s rapid technical advances.

Date: 2026-04-21

Details: â€¢ Brent futures declined 95 cents, or 1%, at $94.53 Reuters Published April 21, 2026 Updated 17 minutes ago Oil prices fell on Tuesday, reversing gains in the previous session, on expectations peace talks between the U.S. and Iran will take place this week and allow more supply to flow from the key Middle East producing region. Brent futures declined 95 cents, or 1%, at $94.53, as of 0003 GMT. U.S. West Texas Intermediate (WTI) crude futures for May fell $1.54, or 1.72%, to $88.07. The May contract expires on Tuesday and the more-active June contract was down $1.09, or 1.3%, at $86.37. Both benchmarks surged on Monday, with Brent up 5.6% and WTI up 6.9%, after Iran again shut the Strait of Hormuz, closing â the key oil transport artery, and the U.S. seized an Iranian cargo ship as part of its blockade of the countryâ€™s ports. Still, investors are focusing on the likelihood talks this week will result in the extension of the existing ceasefire or a final agreement, though the chance of further conflict and disruptions to oil flows remains. Iran is weighing participation in the peace talks in Pakistan, a senior Iranian official told Reuters on Monday, following Islamabadâ€™s efforts to end the U.S. blockade. The blockade has posed a major hurdle to Tehran rejoining peace efforts, with the current two-week ceasefire set to expire this week. â€œWe continue to lean toward an MOU being signed and/or the ceasefire being extended this week, potentially evolving into a broader agreement,â€ â analysts at Citi said in a note. â€œThat said, we remain prepared to pivot toward a more protracted disruption scenario should negotiations falter this week.â€ Underscoring the uncertainty around the talks, the Iranian official stressed that no decision has been made to attend, as Iranian Foreign Minister Abbas Araqchi said â€œcontinued violations of the ceasefireâ€ by the U.S. is a hindrance to further negotiations. Separately, Iranâ€™s top negotiator and â parliament speaker Mohammad Baqer Qalibaf reiterated that Tehran would not negotiate under threats. Shipping activity through the Strait of Hormuz, an essential corridor for about one-fifth of the worldâ€™s oil supply, remained limited on Monday. If disruptions to the strait persist for another month, total losses could â rise to about 1.3 billion barrels, with prices likely near $110 a barrel in the second quarter of 2026, Citi said. Kuwait declared force majeure on oil shipments due to the straitâ€™s blockade, Bloomberg News reported. The higher prices caused by the â closure of the strait have cut oil demand by about 3% so far, analysts at Societe Generale said in a client note. The risk is â€œskewed toward larger losses the longer normalisation is delayed,â€ it said, adding it expects â€œfull normalisationâ€ to supply only by late 2026.

Date: 2026-04-21

Details: Reuters Published April 21, 2026 Updated about 3 hours ago NEW YORK: US natural gas futures edged up to a fresh one-week high on Monday on a drop in output over the past couple of weeks and forecasts for cooler weather and higher demand through early May than previously expected. Gas futures were also supported by near-record gas flows to US liquefied natural gas (LNG) export plants and a 5percent jump in crude futures on fears the US-Iran ceasefire could collapse after the US seized an Iranian cargo ship. Front-month gas futures for May delivery on the New York Mercantile Exchange (NYMEX) rose 3.8 cents, or 1.4percent, to USD2.712 per million British thermal units (mmBtu), putting the contract on track for its highest close since April 8 for a second day in a row. Even though gas futures were on track to rise for a fourth straight day, speculators last week boosted their net short futures and options positions on the NYMEX to the highest since November 2024, according to the US Commodity Futures Trading Commissionâ€™s Commitments of Traders report. In the cash market, average prices at the Waha Hub in West Texas remained in negative territory for a record 51 days in a row as pipeline constraints continued to trap gas in the Permian region, the nationâ€™s biggest oil-producing shale basin. Daily Waha prices first averaged below zero in 2019. They did so 17 times in 2019, six times in 2020, once in 2023, 49 times in 2024, 39 times in 2025, and a record 60 times so far this year. Waha prices have averaged a negative USD1.83 per mmBtu so far in 2026, compared with a positive USD1.15 in 2025 and a positive USD2.88 over the past five years (2021-2025). Financial firm LSEG said average gas output in the US Lower 48 states held at 110.4 billion cubic feet per day (bcfd) so far in April, the same as in March. That compares with a monthly record high of 110.7 bcfd in December 2025. On a daily basis, output was on track to drop by around 3.9 bcfd over the past 14 days to a preliminary 10-week low of 108.3 bcfd on Monday. Preliminary data, however, is often revised later in the day. Analysts projected that mostly mild weather so far this spring has allowed energy firms to inject more gas into storage than usual, boosting inventories to a forecast 7percent above normal levels during the week ended April 17, up from 6percent above normal during the week ended April 10. Looking ahead, meteorologists forecast the weather will remain mostly near normal through May 5. LSEG projected average gas demand in the Lower 48 states, including exports, would slide from 103.6 bcfd this week to 101.5 bcfd next week. Those forecasts were higher than LSEGâ€™s outlook on Friday. Average gas flows to the nine big US LNG export plants rose to 18.9 bcfd so far in April, up from 18.6 bcfd in March. That compares with a monthly record high of 18.7 bcfd in February.

Date: 2026-04-21

Details: Written by Shahnawaz Akhter KARACHI, April 21, 2026 â€” The Federal Board of Revenue (FBR) has recorded a sharp increase in revenue from capital gains tax during the first nine months of fiscal year 2025â€“26, driven by strong trading activity at the Pakistan Stock Exchange. The FBR collected Rs101 billion in capital gains tax between July and March, compared with Rs24.27 billion in the same period last year, marking a steep rise of 317%. Officials attributed the surge to robust performance in equities, as the Pakistan Stock Exchange touched multiple record highs during the period, encouraging higher trading volumes and increased investor participation. Tax officials said buoyant market sentiment, improved liquidity conditions, and strong corporate earnings contributed to sustained momentum in equities, which in turn boosted tax receipts from securities transactions. In March 2026 alone, capital gains tax collection rose 45% year-on-year to Rs8 billion, compared with Rs5.53 billion in March 2025. Officials noted that despite heightened global volatility triggered by geopolitical tensions, including developments involving Iran and the United States, domestic market activity remained resilient. Analysts said the performance highlights the sensitivity of tax revenues to stock market cycles, with gains heavily dependent on trading intensity and capital appreciation in listed securities. Capital gains tax is levied on profits from the sale of securities listed on the stock exchange under Sections 37A and 147(5B) of the Income Tax Ordinance, 2001. The tax structure is designed to capture income generated from equity investments while encouraging formal market participation. The sharp increase in collections is expected to provide a temporary boost to overall non-tax revenue performance, although analysts caution that sustainability will depend on continued market stability and investor confidence in the coming quarters.

Date: 2026-04-21

Details: Written by Shahnawaz Akhter KARACHI, April 21, 2026 â€” Pakistanâ€™s Federal Board of Revenue (FBR) has revised customs values for polyester filament yarn, citing rising international prices driven by geopolitical tensions and supply chain disruptions linked to ongoing global conflicts. The Directorate General of Customs Valuation, a division of the FBR, issued Valuation Ruling No. 2069/2026 on April 16, replacing the earlier ruling (No. 60/2025) issued in July 2025. The updated values will be used to assess duties and taxes on imports of polyester filament yarn under Section 25A of the Customs Act, 1969. The revision follows a detailed review of global market conditions, particularly the sharp increase in petrochemical raw material prices. Officials said the surge was largely attributed to war-related disruptions affecting production and logistics chains worldwide, pushing up input and freight costs. Stakeholder divide over price adjustment During consultations held on April 13, importers and local manufacturers presented contrasting views. Importers urged authorities to retain existing customs values, arguing that international prices remain highly volatile due to ongoing geopolitical uncertainty. They maintained that prices had already remained elevated over the past six months, and any further increase in customs values would add undue financial pressure. Local manufacturers, however, supported an upward revision, stating that international prices were consistently rising and reflecting a sustained upward trend. They argued that maintaining outdated values would distort market competition and undermine domestic industry. Data-driven valuation approach The valuation exercise was based on a comprehensive analysis of import data from February to April 2026, along with scrutiny of international raw material prices and stakeholder submissions. Authorities noted that while pre-war prices were lower than previously determined values, the war period saw a marked increase in prices. Given abnormal fluctuations, officials relied on recent import data and adjusted for higher freight costs. Several valuation methods under Section 25 of the Customs Act were examined but deemed unsuitable due to insufficient or inconclusive data. Ultimately, customs values were determined under fallback provisions to ensure fair and transparent pricing. Revised customs values The updated customs values (C&F basis, per kilogram) are as follows: Denier Range DTY Yarn (Semi Dull / Bright / Raw White) DTY Yarn (Cationic) FDY Yarn (Semi Dull / Bright / Raw White) FDY Yarn (Cationic) 1 to 60 1.75 1.92 1.42 1.71 61 to 120 1.44 1.75 1.32 1.54 121 to 240 1.33 1.44 1.22 1.36 241 & above 1.27 1.38 1.20 1.30 An additional $0.10 per kilogram will be applied to dyed yarn across all categories. Implementation and compliance The FBR clarified that if declared import values exceed the declared customs values, duties will be assessed on the higher declared amount. Adjustments for air freight differences will also apply where relevant. The ruling is effective immediately and will remain in force until revised or rescinded. Customs authorities across Pakistan have been directed to ensure uniform implementation, with mechanisms in place to address anomalies. Analysts say the revision reflects Pakistanâ€™s effort to align import valuations with global market realities while balancing the interests of industry stakeholders amid continued economic uncertainty.

Date: 2026-04-21

Details: AFP Published April 21, 2026 Updated about 9 hours ago WASHINGTON: Kevin Warsh, Donald Trumpâ€™s choice to lead the US Federal Reserve, vowed Tuesday to protect central bank independence at his confirmation hearing, despite intense pressure from the president. â€œIâ€™m committed to ensuring that the conduct of monetary policy remains strictly independent,â€ Warsh said in opening remarks to the Senate Banking Committee. He also expressed commitment to fighting inflation. The hearing will be scrutinized as it marks a key hurdle that Warsh must overcome to succeed Fed Chair Jerome Powell when his term ends on May 15. But it comes as Trump has escalated criticism of the Fed for not cutting interest rates more aggressively. Earlier Tuesday, Trump told CNBC he would be disappointed if the new Fed chair did not lower rates swiftly, and again slammed Powell for renovation costs at the bankâ€™s headquarters. â€œWe should have the lowest interest rate in the world,â€ Trump said. The session will be tense, with all 11 Democrats on the Banking Committee last week urging for a delay in Warshâ€™s nomination proceedings until separate investigations into Powell and Fed governor Lisa Cook are closed. Republican Senator Thom Tillis, who sits on the panel led by his party, has also vowed to block all Fed nominees â€“ including Warsh â€“ until the Justice Department probe involving Powell is resolved. With 13 Republican members on the committee, Tillisâ€™ vote against Warshâ€™s confirmation could be enough to set up an impasse. Warsh will likely face sharp questioning from lawmakers on issues ranging from his wealth to past connections with the late US sex offender Jeffrey Epstein, alongside his views on economic issues. Proving himself â€œIt will be his first chance since he was nominated by the president to demonstrate that he intends to be a credible, independent central banker,â€ Brookings senior fellow David Wessel told AFP. â€œHe has to be really careful to not anger Trump,â€ Wessel said, but Warsh will also have to avoid the impression â€œthat heâ€™s weak or subject to political pressure.â€ On Tuesday, Warsh maintained that it is up to the Fed itself to stay free of political influence. â€œI do not believe that independence of monetary policy is threatened when elected officials state their views on rates,â€ he said. He added that inflation is the Fedâ€™s choice to deal with, while emphasizing that the central bank must â€œstay in its laneâ€ when it comes to policies. Banking Committee chairman Tim Scott called the hearing an â€œopportunity to refocusâ€ the Fed on its dual mandate of price stability and low unemployment. But Elizabeth Warren, the top Democrat on the panel, cautioned that probes on Powell and Cook were designed to pressure Fed policymakers into doing Trumpâ€™s bidding. She warned against having â€œa sock puppetâ€ of the president in charge at the central bank. Inflation pressures ING economist James Knightley told AFP the focus on Tuesday will be on how closely Warsh is aligned with the president on rate cuts. During Warshâ€™s 2006-2011 Fed governor tenure, he was considered more â€œhawkishâ€ â€“ a term for policymakers who favor controlling inflation by keeping interest rates higher. But he appears to have shifted his stance, Knightley said. Knightley pointed to indications that Warsh is an advocate for tech investments and AI, which some believe can change the US economyâ€™s ability to grow without generating the same degree of inflationary pressures. Yet, higher gasoline prices due to war in the Middle East prove a more immediate challenge to rate cuts. The Fedâ€™s credibility on inflation could be questioned if Warsh pushed too much for lower rates. He will have to acknowledge near-term price shocks while explaining that these may not create a persistent inflationary threat, Knightley said.

Date: 2026-04-20

Details: Naseem Usman Published April 20, 2026 Updated about 3 hours ago KARACHI: Pakistanâ€™s cotton market witnessed a significant price surge this week, with rates for standard quality cotton rising by Rs1,000 to Rs1,500 per maund, although overall trading activity remained subdued. On the international front, New York Cotton futures also posted gains, with contract prices surpassing the psychological threshold of 80 US cents, reaching their highest level in 22 months. The Federal Committee on Agriculture has set a cotton production target of 9.64 million bales for the 2026-27 season, which are 1.46 million bales lower than the previous yearâ€™s target of 11.1 million bales. Meanwhile, the Central Cotton Research Institute (CCRI) has issued fresh guidelines to help farmers achieve higher cotton yields in the upcoming season. At an important conference held at Sindh Agriculture University, experts described Pakistanâ€™s cotton crisis as severe and called for the formulation of a unified national strategy to address it. Syed Nadeem Shah, Senior Vice President of the Sindh Abadgar Board, identified substandard seeds, climate change, imbalanced use of fertilisers, and ineffective pesticides as the primary causes of farmersâ€™ financial distress. He also criticised the persistent absence of stable agricultural policies and reliable agricultural data, and proposed the formation of a Breeders Advisory Board comprising retired agricultural experts. The All Pakistan Textile Mills Association (APTMA) has demanded a reduction in scanning charges levied on imported cargo. In a separate development, the Karachi Cotton Exchange building has remained sealed since December 12, 2025, following an action by the Evacuee Trust Property Board (ETPB) with the assistance of the Federal Investigation Agency (FIA). As a result, the daily cotton spot rate a critical market benchmark has not been issued, leaving the market in a state of continued uncertainty. The local cotton market witnessed a significant rise in quality cotton prices during the past week, with rates climbing by Rs1,000 to Rs1,500 per maund. Industry observers attribute this sharp increase to two primary factors. First, domestic cotton stocks have nearly been exhausted across the country. Second, escalating tensions in the Middle East have triggered a substantial surge in international cotton prices, with New York cotton futures rising by 6 to 7 US cents per pound. The government has set an ambitious production target of 9.64 million bales of cotton from 2.1 million hectares of cultivated area during the upcoming Kharif season 2026-27. This target comes at a time when Pakistan is grappling with a serious cotton crisis, largely attributed to the governmentâ€™s disproportionate focus on industrial sectors while the concerns of farmers continue to be overlooked. The country produced only 5.67 million bales during 2025-26, a figure that stands in stark contrast to the record high of 15 million bales achieved in 2014-15, underscoring the severe decline the sector has endured over the past decade. The Federal Committee on Agriculture (FCA), established to oversee strategic measures aimed at ensuring food security, held its meeting on Tuesday under the chairmanship of Federal Minister for National Food Security and Research, Rana Tanveer Hussain. On the international front, ICE cotton futures surged to their highest level in more than 22 months, buoyed by rising crude oil prices and a weakening US dollar. Drought conditions prevailing across key cotton-growing regions in the United States further supported the fiberâ€™s upward price trajectory, adding momentum to an already bullish global cotton market. The Karachi Cotton Exchange building has been sealed by the Evacuee Trust Property Board (ETPB) with the assistance of the Federal Investigation Agency (FIA) since December 12, 2025, as a result of which the critically important Daily Cotton Spot Rate has not been able to be officially issued. In the provinces of Sindh and Punjab, cotton is currently being traded at prices ranging from Rs. 17,000 to Rs. 21,500 per maund, depending on quality and payment conditions. Karachi Cotton Brokers Forum Chairman Naseem Usman reported a significant rise in international cotton prices, with New York cotton futures trading between 76 and 80 US cents per pound. According to the USDA weekly export and sales report, total cotton sales for the marketing year 2025-26 reached 161,100 bales. Vietnam led all buyers by purchasing 62,100 bales, followed by Turkey in second place with 49,000 bales, while Pakistan ranked third with purchases of 32,900 bales. For the 2026-27 marketing year, forward sales stood at 26,900 bales, with Vietnam accounting for 20,700 bales and Portugal purchasing the remaining 6,200 bales. On the export side, total shipments amounted to 305,000 bales. Vietnam topped the list of importing nations by receiving 110,400 bales, with Pakistan coming in second at 35,900 bales and Turkey in third place with imports of 31,900 bales. Leading national and international experts, policymakers and progressive growers on Tuesday voiced serious concern over the persistent decline in cotton production in Pakistan, urging a coordinated, multi-stakeholder strategy to revive the crop â€” once regarded as the backbone of the countryâ€™s agrarian economy. They were speaking at the opening session of Two-day international conference titled â€œCotton Seed Production and Development: Issues and Solutions,â€ organised by the Department of Plant Breeding and Genetics at Sindh Agriculture University (SAU) Tandojam, with support from the Higher Education Commission (HEC), Islamabad. Participants emphasised the need for a robust, collaborative platform bringing together public-sector research and academic institutions, private seed companies and policymakers to tackle the multifaceted challenges facing the cotton sector. Experts attributed the continued decline to climate change, rising temperatures, limited technological innovation in seed development, escalating input costs, volatile market prices and increasing fuel costs. They warned that without farmer-friendly policies and timely interventions, the situation could deteriorate further. In his presidential address, SAU Vice Chancellor Engr. Prof Dr Altaf Ali Siyal described cotton as a strategic crop, contributing around one per cent to the national GDP and about five per cent to agricultural value addition, while supporting millions of livelihoods. He noted with concern that the area under cotton cultivation had shrunk from around three million hectares to nearly 2â€“2.2 million hectares over the past decade, with yields either stagnating or declining due to pest attacks, climate stress and poor-quality seed. Dr Siyal highlighted key challenges including the absence of certified and traceable seed systems, increasing pest pressure, climate variability and weak linkages between research and extension services. â€œAddressing these challenges requires a convergence of science, policy and practice,â€ he said, adding that the university had developed two cotton varieties and would continue contributing through research, innovation and partnerships. Director of the Nuclear Institute of Agriculture (NIA) Tandojam, Dr Mahboob Ali Sial, underscored the challenge of developing certified, climate-resilient seed, noting that Pakistan ranked among the most climate-vulnerable countries. He said research institutions and plant breeders had a critical role to play, adding that his institute was working on improved seed varieties for 41 crops. Senior Vice President of the Sindh Abadgar Board, Syed Nadeem Shah, pointed to multiple constraints â€” including substandard seed, climate change, imbalanced fertiliser use and ineffective pesticides â€” which, he said, were pushing farmers towards financial distress. He criticised the lack of consistent policies and reliable agricultural data, and proposed the formation of a breedersâ€™ advisory board comprising retired experts. Chinese expert Wang Xin Chen said his team was collaborating with Pakistanâ€™s private sector and research institutions to develop improved seed varieties for cotton and other crops, ensuring better access for farmers. Representing the International Center for Cotton Development & Sustainability (ICCDS), Senior Advisor Shahid Mansoor said that Sindhâ€™s per-acre cotton yield remained higher than Punjabâ€™s and urged agricultural graduates to focus on developing new crop varieties. Private sector representative Tariq Khanzada observed that while global cotton research had advanced to multi-gene technologies, Pakistan was still struggling with single-gene progress. â€œWithout adopting modern technologies, cotton will continue to decline, and farmers will shift to alternative crops,â€ he warned. Earlier, conference secretary Prof Dr Shah Nawaz Mari, principal organiser Dr Wajid Ali Jatoi, Dr Shabana Memon and Dr Tanweer Fatah Abro also addressed the participants, while experts from various countries and institutions across Pakistan participated in the conference both physically and virtually, presenting their research papers during the technical sessions. Among those present were Chinese expert Mr Zhong Weisheng, Dean Faculty of Crop Production Prof Dr Inayatullah Rajper, Head of Rural Banking at United Bank Limited Syed Arif Ali Shah, noted agricultural expert Karam Khan Kaleri, and representatives from academia, industry and farming communities. Later, the vice chancellor, along with distinguished guests, inaugurated an agricultural exhibition featuring stalls from public and private organisations, followed by technical sessions. A large number of scientists, industry representatives, breeders, progressive farmers and students attended the conference. The All Pakistan Textile Mills Association (APTMA) has called on the authorities to reduce scanning charges on import containers used by export-oriented industries, stressing that such a measure is critical to sustaining Pakistanâ€™s fragile export momentum amid rising production costs and persistent supply-side challenges. In a letter addressed to the Project Director of the Automated Exit and Entry System (AEES) at the Collectorate of Customs Appraisement (West), Customs House Karachi, APTMA Secretary General Raza Baqir cited Pakistan Customsâ€™ notification dated April 4, 2026, under which scanning charges on export containers had been reduced. The association welcomed the decision, describing it as a timely intervention, particularly given that port congestion a factor largely beyond the control of exporters continues to disrupt supply chains. However, APTMA emphasized that similar relief must be extended to the import consignments of export-oriented units, which primarily consist of raw materials brought in on a temporary basis for the manufacture of exportable goods. The association noted that reducing scanning charges on such imports would directly lower input costs and ease the financial burden on exporters. The demand has come at a time when Pakistanâ€™s textile sector is grappling with a range of difficulties. Industry players have identified high energy tariffs, expensive financing, currency volatility, and delays in the refund of duties and taxes as key factors undermining their competitiveness. These pressures have been further compounded by recent disruptions in global supply chains and a softening of demand in major export markets, which have squeezed margins considerably. Stakeholders argue that reducing port-related charges could provide immediate and tangible relief. With the overall cost of doing business rising across the board, even incremental savings on logistics and compliance expenditures could help Pakistani exporters remain competitive against regional rivals such as Bangladesh, Vietnam, and India. Exporters have also raised concerns that delays and additional costs at ports not only lengthen delivery timelines but also undermine Pakistanâ€™s credibility as a reliable supplier in international markets. Against this backdrop, APTMAâ€™s proposal is being viewed as part of a broader push for trade facilitation reforms aimed at improving operational efficiency and reducing transaction costs across the export supply chain. Copyright Business Recorder, 2026

Date: 2026-04-20

Details: Press Release Published April 20, 2026 Updated about an hour ago KARACHI: HBL declared a consolidated profit before tax of Rs 33.7 billion, and a profit after tax of Rs 16.2 billion for the quarter ended March 31, 2026. EPS for Q1â€™26 was Rs 11.0. Along with the results, the Bank declared an interim dividend of Rs 6.00 per share for the quarter. HBLâ€™s balance sheet increased to Rs 8.1 trillion, with domestic deposits closing at Rs 4.6 trillion and total deposits at Rs 5.4 trillion. Current account remained a priority for the Bank, as a result the domestic CA mix improved to 38.6 percent in March 2026. HBLâ€™s total advances stood north of Rs 2.0 trillion. The Bankâ€™s flagship Consumer portfolio continued its stellar growth trajectory, reaching Rs 180 billion, while the Groupâ€™s agriculture financing increased to over Rs 100 billion. Despite a reduction in the policy rate, HBLâ€™s interest margins were effectively supported by volumetric expansion of 15 percent in the average domestic balance sheet, and a reduction in deposit cost led by consistent growth in the average current accounts. HBLâ€™s fee franchise contributed strongly to the revenue, with the flagship Cards business driving nearly 50% of the total fees. Cash management and Remittances also registered remarkable growths in fee. As a result, HBLâ€™s total revenue for the quarter increased to Rs 92 billion. With effective cost management and oversight, the Bankâ€™s administrative expenses growth was contained to a low of 6 percent. With sustained profitability, HBLâ€™s Tier I CAR of 13.8 percent and Total CAR of 16.7 percent remained well above the requirements. Commenting on the Bankâ€™s performance, Muhammad Nassir Salim, President & CEO â€“ HBL, said, â€œIn Q1â€™26, HBLâ€™s strong business performance continued with the momentum 2025 ended on. The Bank unlocked revenue synergies underpinned by a lean cost base. This contributed to improving our cost-to-income trajectory while supporting sustainable growth. The in-progress Brand Refresh provides our clients a context on how they experience HBL as a brand of choice, making every interaction relevant and engaging. The start of HBLPSL 11, a continuation of our decade long partnership with Pakistanâ€™s leading sports platform, reinforces HBLâ€™s commitment to Pakistanâ€™s youth and the communities we serve.â€ Delivering value for stakeholders HBL continued to demonstrate its leadership in financial markets and advisory through a series of landmark transactions. The Bank entered into an Interest Rate Swap Agreement with Engro subsidiaries for a notional principal of Rs 20 billion, supporting client risk management and market development. HBL also acted as exclusive buy-side financial advisor and arranged Shariah-compliant financing of Rs 75 billion for Maple Leaf Cement Factory Limitedâ€™s acquisition of Pioneer Cement Limited. The Bank has also been appointed as Inter-Creditor Agent and Mandated Lead Arranger for a project finance facility of up to Rs76 billion for Frontier Works Organization, supporting the development of critical energy infrastructure. HBLâ€™s digital fixed income platform HBL SymphonyÂ® continued to gain strong traction with volumes more than doubled YoY. This growth highlights the increasing shift of the Bankâ€™s clients toward digital solutions and reinforces HBL Symphonyâ€™s role as a key driver of innovation in fixed income markets. The Bankâ€™s strategic investment in technology and client experience is bearing fruit; ENZO, HBLâ€™s Core Banking System transformation is on track with a total of 92 branches successfully migrated onto this system. This modern platform will enhance client experience and strengthen the Bankâ€™s ability to adapt quickly in an evolving digital landscape. HBL continued to strengthen its position as Pakistanâ€™s premier financial services brand. Q1 2026 saw the rollout of HBLâ€™s Brand Refresh and its phased implementation. The refresh preserves the â€œHBLâ€ word mark, and the institutional equity built over more than eight decades, while introducing â€œMomentumâ€, a modern design device which represents four key pillars i.e. forging ahead, progressing together, accelerating towards the future, and a principle of shared prosperity for the Bank and its customers. The refreshed identity will support stronger integration across businesses, strengthen customer experience across touch points, and reinforce HBLâ€™s position as Pakistanâ€™s premier Bank. HBLâ€™s continued partnership with PSL, now renewed for HBLPSL 11 (2026) and 12 (2027), reinforces the Bankâ€™s core philosophy of â€˜enabling dreamsâ€™. HBL remains committed to amplifying the success of this tournament, further elevating the stature of HBLPSL on the global stage. Through the HBL Foundation, the Bank continued to support healthcare, education, and community development initiatives across Pakistan. In Q1 2026, the Foundation allocated Rs 177 million across key initiatives, including medical support, scholarships, and community outreach, reaching underserved communities nationwide. In recognition of the Bankâ€™s leadership and performance, HBL has been awarded with the â€˜Best Investment Bank Award for Pakistan 2026â€™ by Global Finance. Copyright Business Recorder, 2026

Date: 2026-04-20

Details: â€¢ Brent crude futures jumped $6.11, or 6.76%, to $96.49 a barrel Reuters Published April 20, 2026 Updated about an hour ago SINGAPORE: Oil prices rebounded more than 6% on Monday after tumbling more than 9% on Friday on news the Strait of Hormuz is closed again after both the U.S. and Iran said the other party had violated their ceasefire deal by attacking ships over the weekend. Brent crude futures jumped $6.11, or 6.76%, to $96.49 a barrel by 2327 GMT and U.S. West Texas Intermediate was at $90.38 a barrel, â up $6.53, or 7.79%. The U.S. military had seized an Iranian cargo ship that tried to run its blockade, US President Donald Trump said on Sunday, while Iran said it would not participate in a second round of peace talks despite Trumpâ€™s threat of renewed airstrikes. The United States has maintained a blockade of Iranian ports, while Iran has lifted and then reimposed its own blockade of the Strait, which handled roughly one-fifth of the worldâ€™s oil supply before the war began almost two months ago. â€œOil markets continue to gyrate in response to â oscillating social media posts by the U.S. and Iran, rather than the realities on the ground which remain challenging for oil flows to resume in a rapid fashion,â€ Saul Kavonic, MST Marqueeâ€™s head of research, said. Both contracts posted on Friday their largest daily declines since April 18 after â Iran said passage for all commercial vessels through the Strait of Hormuz was open for the remaining ceasefire period and Trump said Iran had agreed to never close the strait again. â€œThe announcement of â the Strait opening proved premature,â€ Kavonic said. â€œShip owners will be twice shy about heading towards the Strait again without receiving much more confidence that any announced passage is â real.â€ More than 20 ships passed the strait on Saturday carrying oil, liquefied petroleum gas, metals and fertilizers, Kpler data showed, the highest number of vessels crossing the waterway since March 1. US gasoline prices could remain above $3 a gallon until 2027.

Date: 2026-04-20

Details: Written by Shahnawaz Akhter KARACHI, April 20, 2026 â€” The Overseas Investors Chambers of Commerce and Industry (OICCI) has recommended that Pakistan cap withholding tax rates at a maximum of 5%, arguing that such taxes should be used primarily to broaden the tax base rather than generate direct revenue. In a detailed reform proposal, OICCI, the representative body of foreign investors and multinational companies in Pakistan, said tax policy should be closely aligned with broader economic activity and developed in coordination with federal ministries and provincial governments. It warned that fragmented policymaking in isolation would limit effectiveness and hinder long-term fiscal stability. â€œThe central objective must be to raise the tax-to-GDP ratio on an equitable basis from around 10â€“12 percent to above 15 percent over the medium term,â€ the report said, adding that Pakistanâ€™s fiscal strength depends on shifting away from heavy reliance on withholding and minimum taxes. The chamber urged a structural shift toward return-based direct taxation and a modern value-added tax system, alongside simplified compliance procedures, faster refunds, reduced discretionary changes and increased digitalisation of tax processes. It cautioned that combining high tax rates, complex compliance systems and aggressive withholding mechanisms could increase incentives for tax evasion. OICCI recommended that withholding taxes be restricted to documentation purposes only, while core revenue generation should rely on transparent income-based taxation. The proposal also called for elimination of super tax provisions, reduction in corporate tax rates to 28% with a roadmap toward 25%, and a gradual reduction of sales tax to 12%. It further suggested limiting minimum taxation to select sectors and reducing salary tax slabs to a maximum of 25%. In its phased roadmap, the OICCI proposed immediate institutional reforms, including operationalising a Tax Policy Office, freezing new tax exemptions, clearing pending refunds, and eliminating distortive taxation measures. It also called for broader base expansion through digital invoicing, stronger federal-provincial coordination, and enforcement against large-scale tax evasion. Over the medium term, the chamber recommended integrating a unified VAT/GST system, expanding property and agricultural taxation, and reducing reliance on distortionary levies. In the final phase, it suggested eliminating the filerâ€“non-filer distinction, modernising dispute resolution systems, and reforming customs to improve trade competitiveness. OICCI said Pakistanâ€™s tax system should ultimately evolve into a simplified, digitally integrated, and growth-oriented structure with fewer exemptions, lower rates, and stronger compliance supported by automation and data sharing across institutions.

Date: 2026-04-20

Details: Written by Shahnawaz Akhter KARACHI, April 20, 2026- The Large Taxpayers Office (LTO) Karachi reported record tax collection of Rs2.58 trillion in the first nine months of fiscal year 2025-26, marking a 10% increase compared with the same period last year, official data showed on Monday. According to provisional figures, the countryâ€™s largest tax collection arm had generated Rs2.34 trillion during Julyâ€“March 2024-25. The latest performance reflects improved revenue mobilisation across key tax categories despite a challenging economic environment. During the period under review, the LTO Karachi issued more than Rs102 billion in refunds to taxpayers, indicating ongoing adjustments in tax administration and claims settlement. Direct tax collection remained the strongest contributor, rising 15% to Rs1.46 trillion compared with Rs1.27 trillion in the corresponding period of the previous fiscal year. Officials attributed the increase primarily to higher receipts from super tax, which contributed around Rs97 billion during the nine-month period. Sales tax collection posted modest growth of 3%, reaching Rs938 billion against Rs913 billion a year earlier. The relatively subdued increase was linked to sluggish domestic economic activity and weaker consumption trends. Within sales tax, the LTO also issued Rs59 billion in refunds during Julyâ€“March 2025-26, up 16% from Rs50 billion in the same period last year, reflecting higher refund processing activity alongside collections. Federal excise duty (FED) also showed strong momentum, rising 17% to Rs180 billion compared with Rs154 billion in the corresponding period last year. Officials said the overall performance reflected sustained enforcement efforts, improved audit coverage and enhanced compliance measures targeting large taxpayers. â€œThe growth in collection is the result of focused enforcement actions and better compliance facilitation,â€ a tax official said, without giving further details. The LTO Karachi is responsible for collecting revenue from Pakistanâ€™s largest corporate entities, including key sectors such as manufacturing, banking, energy and telecommunications. Tax experts note that while collections have improved, the reliance on indirect measures such as withholding and super tax highlights continued structural challenges in broadening the tax base. The Federal Board of Revenue (FBR) has been under pressure to increase revenues amid fiscal consolidation targets agreed with international lenders, making the performance of large taxpayer units critical for overall budget stability.

Date: 2026-04-20

Details: Written by Shahnawaz Akhter KARACHI â€“ The Pakistan Business Council (PBC) has urged the Federal Board of Revenue (FBR) to withdraw what it described as â€œillegalâ€ notices for the recovery of default surcharge on super tax, warning that the move could undermine business confidence and economic stability. In a communication addressed to the FBR chairman, the business lobby said tax authorities had recently begun issuing notices for recovery of default surcharge on super tax from the corporate sector. It argued that the action was inconsistent with legal and judicial developments and risked creating uncertainty for taxpayers. The PBC said the imposition of surcharge was not justified as companies had not failed to pay super tax within prescribed timelines due to ongoing litigation and interim relief granted by courts. â€œNo failure in payment exists where tax obligations were subject to judicial orders,â€ the council said, adding that the legal precondition for applying default surcharge under Section 205 of the Income Tax Ordinance, 2001 had not been met. The council also highlighted long-standing delays in income tax and sales tax refunds, arguing that the government had not provided compensation on pending amounts. It warned that imposing surcharge while refunds remained unpaid could create an inequitable tax environment. â€œThis risks creating a â€˜heads I win, tails you loseâ€™ situation, which undermines trust in the tax system,â€ the PBC said. The business body further cautioned that sudden recovery notices could damage investor sentiment and disrupt economic planning at a time when businesses already face macroeconomic pressures. â€œBusinesses require certainty and clarity to plan operations and investments,â€ it added. The PBC has requested the FBR to immediately withdraw surcharge notices and simultaneously address pending refund claims to restore confidence in the tax administration system. When contacted, tax experts told Business Recorder that default surcharge under Section 205 applies only when there is a legally enforceable obligation and a proven failure to pay. They argued that in cases where payment obligations were suspended due to court orders, the condition of default was not triggered. Experts also noted that in several cases, taxpayers had either provided â€œgood for paymentâ€ securities or were covered under judicial protections, meaning liability was not crystallised at the relevant time. They further argued that where tax positions were taken based on bona fide interpretations supported by court rulings, additional charges such as default surcharge could not be imposed retrospectively. They added that constitutional and higher court judgments remain binding on tax authorities and must be followed by subordinate bodies, reinforcing the view that current proceedings may lack legal basis.

Date: 2026-04-19

Details: Written by Shahnawaz Akhter ISLAMABAD, April 19 â€” Pakistanâ€™s Federal Board of Revenue (FBR) has suspended several senior customs officials following fresh findings in a high-profile case involving the alleged swapping of seized silver bullion with lead, officials said on Sunday. The suspensions include a collector of customs (BS-20), a deputy collector (BS-18), an assistant collector (BS-17), and three officers of BS-16 rank. The action follows an expanded inquiry that pointed to possible negligence, inefficiency and direct involvement of additional personnel in the case. Authorities said a criminal investigation is ongoing, and those found responsible will be formally charged under an existing first information report (FIR) registered on April 13. Investigators have also identified other beneficiaries allegedly linked to the case, who will be pursued under the law. To ensure an independent probe, the FBR has replaced the existing team at the Collectorate of Customs Enforcement in Quetta, appointing new senior officers to oversee the investigation. The case first emerged earlier this month when Pakistan Customs arrested two preventive officers, Arif Ali Jumani and Samiullah Achakzai, on charges of collusion and suspected tampering with seized bullion. According to officials, the two officers had been assigned to transport 688 kilograms of confiscated silver from a state warehouse in Quetta to the Pakistan Mint in Lahore on April 5. The shipment, packed in 36 sealed boxes, was flown from Quetta to Allama Iqbal International Airport before being delivered to the mint. Upon inspection at the facility, authorities discovered that around 400 kilograms of the consignment consisted of lead rather than silver. A subsequent inquiry, supported by surveillance footage from Safe City Quetta, indicated that the officers allegedly swapped the original consignment during transit with another vehicle carrying counterfeit material of similar packaging. The FBR said it maintains a zero-tolerance policy towards corruption and misconduct, adding that strict disciplinary and legal action would be taken against all those involved, regardless of rank. Officials said investigations are continuing to determine the full scope of the case and identify any additional individuals linked to the alleged fraud.

Date: 2026-04-19

Details: Written by Shahnawaz Akhter KARACHI, April 19 â€” Foreign investors in Pakistan have called for sweeping tax reforms, including lower corporate tax rates and the phased elimination of additional levies, as part of proposals submitted for the federal budget 2026-27. The recommendations were presented by the Overseas Investors Chamber of Commerce and Industry during a meeting with Minister of State for Finance Bilal Azhar Kayani, as part of the governmentâ€™s ongoing consultations with stakeholders ahead of the budget. Officials from the Ministry of Finance, including representatives from the Tax Policy Office, also participated in the discussions, which focused on improving Pakistanâ€™s investment climate and enhancing tax system efficiency. Foreign investors proposed reducing the corporate tax rate to 28% in fiscal year 2026-27, followed by a gradual cut to 25% over the next three years. They also called for the phased abolition of the so-called super tax, arguing that the combined burden of corporate tax, super tax, and other statutory contributions significantly increases the effective tax rate. According to the OICCI, the cumulative impact of these levies â€” including the Workers Welfare Fund and Workers Profit Participation Fund â€” pushes the effective tax rate for many companies to nearly 46%, discouraging investment and limiting business expansion. The group also raised concerns about heavy taxation on the banking sector, warning that it could constrain credit growth and increase the cost of financing for businesses across the economy. To improve talent retention, investors recommended scrapping the super tax and a 10% surcharge on higher-income salaried individuals, while proposing a cap of 25% on personal income tax rates. Additional proposals included rationalising withholding taxes, reducing the general sales tax on goods from 18% to 17% initially â€” with a longer-term target of 15% â€” and reviewing minimum tax and alternate minimum tax provisions. OICCI Secretary General M. Abdul Aleem said the proposals were aimed at creating a predictable and investment-friendly tax framework based on documentation and digitisation. He stressed the need to broaden the tax base by bringing under-taxed sectors such as agriculture, retail, real estate and services into the formal net. Investors also flagged operational issues, including delays in tax refunds, frequent compliance notices and weak coordination between federal and provincial tax systems. They urged policymakers to support export-oriented industries and consider flexibility within international financial programmes to maintain competitiveness. The finance ministry said it welcomed input from foreign investors and emphasised continued engagement to support economic growth and improve transparency in the tax regime.

Date: 2026-04-19

Details: â€¢ Gas prices have risen during the US and Israeli war on Iran and Iranian attacks on nearby countries Reuters Published April 19, 2026 Updated about 11 hours ago WASHINGTON: US Energy Secretary Chris Wright said on Sunday he believes gas prices have peaked but predicted that they may stay above $3 per gallon until next year. Gas prices have risen during the US and Israeli war on Iran and Iranian attacks on nearby countries, creating political headwinds for President Donald Trump ahead of the November midterm elections, where his Republican Party will defend slim majorities in the Senate and House of Representatives. Gas below $3 a gallon â€œcould happen later this year, that might not happen until next year. But prices have likely peaked, and theyâ€™ll start going down,â€ Wright told CNNâ€™S â€œState of the Unionâ€ program. â€œCertainly with the resolution of this conflict, youâ€™ll see prices go down.â€ Trump administration officials have offered differing views on how gas prices may shift. Treasury Secretary Scott Bessent last week predicted gas prices would fall to the $3 per gallon range this summer, while Wright on Sunday laid out a lengthier likely timeline to reach that price. Trump himself has said that gas prices may remain elevated until November. All of them have predicted gas prices will eventually get cheaper once the Iran war ends. â€œUnder $3 a gallon is pretty tremendous in inflation-adjusted terms,â€ Wright said. â€œWeâ€™ll get back there for sure.â€ The average price for a gallon of regular gas on Sunday was $4.05, according to an estimate by AAA, compared to $3.16 a year ago. The warâ€™s impact on oil delivery also has airlines warning of a potential jet fuel shortage. US Transportation Secretary Sean Duffy on Sunday said jet fuel will become more plentiful as the Iran conflict recedes. â€œSo yes, a small disruption, hopefully for a short period of time, but in the long run it becomes cheaper for Americans to travel because of decreased jet fuel prices,â€ Duffy said. The US and Iran on Thursday agreed to a 10-day ceasefire, but Trump on Sunday accused Iran of violating it with attacks on ships in the Strait of Hormuz this weekend. US officials will arrive in Pakistan for further negotiations on Monday, Trump wrote in a social media post. â€œWeâ€™re offering a very fair and reasonable DEAL, and I hope they take it because, if they donâ€™t, the United States is going to knock out every single Power Plant, and every single Bridge, in Iran,â€ he posted, revisiting a threat he had made prior to the ceasefire.

Date: 2026-04-18

Details: Written by Shahnawaz Akhter Pakistan Customs officials on Friday said exporters are being extended the same facilitation at Faisalabad Dry Port as available in Karachi under the Export Facilitation Scheme (EFS), urging the business community to fully utilise the system to improve trade efficiency and competitiveness. Collector of Customs Appraisement Faisalabad Dr Rizwan Basharat made the remarks during an awareness session at the Faisalabad Chamber of Commerce and Industry (FCCI), where he outlined recent reforms aimed at simplifying export procedures and enhancing transparency. He said modern technology, including an artificial intelligence-based monitoring system, has been introduced to track container movement and record any opening of export containers at dry ports. The system, he said, is designed to improve accountability and reduce unnecessary interference in cargo handling. Dr Basharat also briefed participants on recent amendments to the EFS framework issued through a statutory regulatory order (SRO), stating that the mandatory utilisation period for imported goods has been extended from nine months to 18 months. The revised rules took effect from March 18 and apply retrospectively to importers already operating under the scheme. He said the updated mechanism ensures real-time automatic adjustment of imported goods once exports are completed, improving procedural efficiency. He added that restrictions on the timing of export of finished goods produced from imported inputs have been removed, offering exporters greater operational flexibility. Under the revised rules, EFS licences will now be issued for one year, while any extension beyond 18 months will require approval from the relevant regulatory board. Earlier, FCCI President Farooq Yousaf Sheikh welcomed the initiative, saying the scheme has significantly improved the competitiveness of Pakistanâ€™s textile exporters. He said the awareness session was organised to help businesses better understand recent regulatory changes and benefit from them. Pakistan Hosiery Manufacturers and Exporters Association Chairman Ahmad Afzal Awan suggested that partially completed export consignments should also be promptly adjusted under the scheme once production using imported inputs is completed. During the interactive session, business representatives including Muzammil Sultan and Arif Ehsan Malik shared concerns and suggestions, while senior FCCI office-bearers and representatives from export associations also attended. Officials said the governmentâ€™s broader objective is to streamline export procedures, reduce costs and enhance Pakistanâ€™s export competitiveness through improved regulatory facilitation and technology-driven oversight.

Date: 2026-04-17

Details: â€¢ MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.6% Reuters Published April 17, 2026 Updated 8 minutes ago SINGAPORE: Asian stocks were poised for a second week of strong gains and oil prices were pinned below $100 a barrel with investors hopeful for a near-term resolution to the Middle East war. Investors have been quick to take an optimistic view on any signs of denouement this month, even though the Strait of Hormuz - through which a fifth of the worldâ€™s oil and gas supply typically flows - remains closed. A 10-day ceasefire between Lebanon and Israel went into effect on Thursday and President Donald Trump said the next meeting between the U.S. and Iran may take place over the weekend, when their current ceasefire is due to expire. That pushed oil prices lower, with Brent crude futures falling more than 1% to $98.14 a barrel. â U.S. West Texas Intermediate crude futures fell 1.6% to $93.15 a barrel. In stocks, MSCIâ€™s broadest index of Asia-Pacific shares outside Japan was down 0.6%, but remained close to its highest since March 2, the first trading day after the Iran war broke out. The index is up 14.5% in April after dropping 13.5% in March. Japanâ€™s Nikkei fell 0.9% in early trading after hitting a record high on Thursday. Almost all stock markets are back to levels before the war erupted at the end of February. For Andrew Chorlton, CIO for public fixed income at M&G, the last two weeks have been surprising in how quickly markets have been willing to look through the conflict and energy shock. â€œThereâ€™s quite a strong contrast between what policymakers and central bankers are saying about the risks that this (conflict) is creating versus what the market is implying,â€ he said. â€œThat seems somewhat complacent,â€ â Chorlton added. â€œIt seems unlikely that there shouldnâ€™t be some additional risk premium priced in, either to growth or to inflation.â€ The U.S. dollar benefited from safe haven flows in March, but has since given up those gains. The euro last bought $1.1779, just below the seven-week high it touched in the previous session. The U.S. benchmark S&P 500 and the tech-heavy Nasdaq rose modestly to record closing highs for a second straight day on Thursday. â€œI think equity markets are remaining positive and â some solid U.S. earnings have helped, but - and itâ€™s a big but - we need to see some concrete evidence that peace is going to last,â€ said Nick Twidale, chief market strategist at ATFX Global. â€œAnd to me, that is a full reopening of the Strait, or we could see some substantial corrections in global â stocks in the coming days and weeks.â€ Closure of the waterway has caused the worst oil price shock in history, and spurred the International Monetary Fund to downgrade its outlook for the global economy, warning that a prolonged conflict could push the world to the brink of recession. The dollar index , â which measures the greenback against a basket of currencies including the yen and the euro, was at 98.24, loitering near its lowest since March 2. The index had declined for eight straight sessions through Wednesday. The yen was steady at 159.32 per dollar while the risk-sensitive Australian dollar fetched $0.7163, drifting near the four-year high it touched on Thursday.

Date: 2026-04-17

Details: Reuters Published April 17, 2026 Updated about an hour ago NEW YORK: The benchmark S&P 500 and the tech-heavy Nasdaq touched intraday record highs on Thursday as optimism surrounding a ceasefire between Israel and Lebanon buoyed sentiment, reassuring investors that the worst of the Middle East conflict had passed. US President Donald Trump said Israel and Lebanon had agreed to a 10-day ceasefire, potentially removing a key obstacle to a broader peace agreement in the region. â€œSeasoned investors understand that markets as a whole do not wait for certainty. The market is walking away from worst-case scenarios and rightfully so,â€ said Anthony Saglimbene, chief market strategist at Ameriprise Financial. At 11:38 a.m. ET, the Dow Jones Industrial Average rose 30.41 points, or 0.06 percent, to 48,494.13, the S&P 500 gained 19.26 points, or 0.27 percent, to 7,041.34 and the Nasdaq Composite added 90.38 points, or 0.38 percent, to 24,106.40. â€œWhen momentum rules, fundamentals are optional. Investors have decided that the worst of the conflict is behind us, if not completely solved,â€ said Steve Sosnick, chief strategist at Interactive Brokers. While hopes of diplomatic progress have lifted sentiment this week, some say more concrete evidence of peace may be needed to sustain the momentum. Despite the gains, the fragility of the rally was evident earlier on Thursday, when the indexes briefly slipped into negative territory, underscoring a market caught between optimism over the ceasefire and caution that prices may have risen too far. â€œIt is difficult to discern why investors are so optimistic,â€ said Melissa Brown, managing director of investment decision research at SimCorp. â€œThe economic data does not really justify the high degree of enthusiasm.â€ Market moves could also become more idiosyncratic as the earnings season gathers pace. US beverages giant PepsiCo gained 2 percent after beating quarterly profit estimates. Abbott declined 4.3 percent, to its lowest level since November 2023 after cutting its full-year profit forecast, while Charles Schwab and Travelers fell 5.3 percent and nearly 1 percent respectively after their results. Netflix is also due to report after the markets close. Its shares were 0.6 percent higher. Software stocks and energy shares rose 1.6 percent and 1.4 percent, respectively. Other big movers included Myseum, which more than doubled after rebranding as Myseum.AI. The rally came a day after a similar move by sneaker maker Allbirds and was reminiscent of last yearâ€™s wave of companies pivoting to crypto treasury strategies, which sparked a buying frenzy in their shares. Voyager Technologies rose 5.2 percent after NASA signed an order for the company to conduct the seventh private astronaut mission to the International Space Station, the companyâ€™s first selection for such a mission. Advancing issues outnumbered decliners by a 1.33-to-1 ratio on the NYSE and a 1.09-to-1 ratio on the Nasdaq. There were 182 new highs and 29 new lows on the NYSE. The S&P 500 posted 18 new 52-week highs and one new low, while the Nasdaq Composite recorded 89 new highs and 32 new lows.

Date: 2026-04-17

Details: Reuters Published April 17, 2026 Updated about an hour ago BENGALURU: Taiwan stocks rallied to all-time highs on Thursday, leading emerging Asian equities back to pre-Iran war levels, as optimism grew over a possible deal to end the conflict, with reports of Tehran potentially allowing shipping through the Strait of Hormuz boosting risk appetite. The MSCI gauges tracking EM Asia equities and global emerging market stocks rose more than 1 percent each, touching their highest levels since February 27. Taiwanâ€™s stock index rose over 1 percent to hit a record high of 37.135.55 points. The index has gained nearly 30 percent so far this year on the back of surging demand for high-performance chips required for AI workloads. Taiwan Semiconductor Manufacturing Co (TSMC), the worldâ€™s top contract chipmaker and Asiaâ€™s most valuable firm, logged a 58 percent jump in quarterly profit to record levels, handily beating market expectations. Positive sentiment from the equity market also spilled over to currency trading, with the Taiwan dollar rising 0.4 percent, touching its highest since March 3. Inki Cho, a financial market strategist at global fintech firm Exness, said growth in the Taiwan dollar was underpinned by robust semiconductor and AI-related export inflows, adding that â€œbroader USD weakness adds a further tailwind.â€ South Koreaâ€™s KOSPI, another tech-heavy index in East Asia, surged over 2 percent to hit its highest since February 27. Stocks in Thailand seesawed on Thursday, last trading 0.7 percent lower, following a long holiday. The Bank of Thailand earlier in the day cut its growth forecast for 2026, saying Southeast Asiaâ€™s second-largest economy faces slower growth this year due to the Middle East war. Stocks in the Philippines gained as much as 0.6 percent, while those in Singapore gave up early gains to trade slightly lower. In Peru, the sol depreciated sharply overnight to a more than one-week low, while MSCIâ€™s benchmark for Peruâ€™s share index tumbled more than 7 percent as uncertainties prevailed over the election outcome in the Latin American country. Currencies in emerging Asia also staged a recovery on Thursday after a subdued showing in the previous session.

Date: 2026-04-17

Details: Recorder Report Published April 17, 2026 Updated about 2 hours ago KARACHI: The Mega Motor Company (MMC), the official partner of the worldâ€™s no 1 NEV brand, BYD in Pakistan has entered into a strategic partnership with TPL Insurance, one of Pakistanâ€™s leading general insurance providers, to introduce MMC Care, a comprehensive protection plan designed exclusively for BYD owners nationwide. Through this partnership, the TPL Insurance will offer a comprehensive and customised insurance plan designed to cater to the technologically advanced BYD New Energy Vehicles (NEVs). The MMC Care offers BYD owners financial protection against a range of unforeseen circumstances, including accidents, theft, damage, and unexpected breakdowns. The policy is structured to reduce the burden of repair costs and eliminate the uncertainty of arranging assistance during emergencies, ensuring that support is readily available when it is needed most. Danish Khaliq, VP Sales & Strategy, BYD Pakistan - MMC added, â€œLeading the NEV transition in Pakistan, this partnership reflects MMCâ€™s commitment to delivering a safe, reliable, and customer-first experience tailored to the countryâ€™s evolving mobility landscape. Our collaboration with TPL Insurance marks another milestone, enabling a more holistic ownership experience for BYD customers. A vehicle is a significant investment, and with MMC Care program, our goal is to ensure that customers can protect that investment with confidence.â€ Syed Ali Hassan Zaid, COO of TPL Insurance said, â€œWe are excited to collaborate with MMC to introduce specialized insurance offerings for BYD vehicle owners. As the automotive landscape evolves, particularly with the rise of electric vehicles, it is essential to provide protection solutions that are equally innovative and forward looking.â€ The MMC Care is accessible to both new and existing BYD customers, offering flexibility and ease of enrollment at any stage of vehicle ownership. This strategic alliance reflects a shared vision to enhance customer value through integrated offerings, while supporting the growth of Pakistanâ€™s automotive and insurance sectors.

Date: 2026-04-17

Details: Recorder Report Published April 17, 2026 Updated 38 minutes ago KARACHI: International Packaging Films Limited (IPAK Group) reported a strong financial performance for the nine months ended March 31, 2026, with consolidated net profit rising sharply to Rs2.36 billion, compared to Rs749 million in the same period last year, driven by improved operating efficiencies and higher capacity utilization. Earnings per share (EPS) stood at Rs3.50 for the period under review, reflecting significant growth in profitability across the groupâ€™s operations. The groupâ€™s consolidated sales increased by 16.8 percent to Rs30.43 billion, up from Rs26.06 billion a year earlier, supported by improving demand and the strength of its integrated manufacturing platform spanning BOPP, BOPET, and CPP film segments. Exports continued to play a key role in overall performance, with export sales rising to Rs7.34 billion from Rs6.07 billion last year, accounting for around 24.14 percent of total revenues, indicating sustained traction in international markets and growing demand for value-added specialty films. Profitability indicators showed notable improvement, with gross profit increasing to Rs5.78 billion compared to Rs3.62 billion in the corresponding period last year, while operating profit rose to Rs4.64 billion from Rs2.76 billion, reflecting margin expansion and enhanced operational efficiency. Finance costs declined by 13.42 percent to Rs1.44 billion despite higher business volumes, attributed to effective working capital management and improved internal cash flow generation. On a standalone basis, IPAK reported sales of Rs9.94 billion, while net profit nearly doubled to Rs810 million from Rs424 million a year earlier. Gross profit for the standalone entity increased by 26.6 percent to Rs2.24 billion, supported by a favorable product mix and operational efficiencies. Group CEO Naveed Godil said the company maintained strong operational performance despite supply chain disruptions, adding that IPAK emerged as a key supplier meeting a significant portion of the countryâ€™s food packaging demand. â€œThis accomplishment underscores our strong operational capabilities and exceptional supply chain management, as our team ensured continuity in meeting essential packaging needs,â€ he said. Looking ahead, the company expressed confidence in its growth outlook, supported by its diversified presence across major flexible packaging segments, continued focus on exports, product innovation, and cost optimization. Management reiterated its commitment to expanding the groupâ€™s global footprint while maintaining operational excellence and financial discipline to deliver long-term shareholder value. Copyright Business Recorder, 2026

Date: 2026-04-17

Details: Recorder Report Published April 17, 2026 Updated about an hour ago PESHAWAR: Saif Textile Mills Limited has installed 10 megawatt Solar Power Project in its unit at Gadoon Industrial Estate. The project was inaugurated during a ceremony held on Thursday. A large number of guests including industrialists, bankers, government officials, and members of the media attended. Aqibullah Khan, Provincial Minister for Relief, Rehabilitation and Settlement was chief guest, while Humayun Saifullah Khan presided over the event as the Chairman of the Ceremony (Sadr-e-Program). The event commenced with the recitation from the Holy Quran, followed by the National Anthem. Tribute was paid to the invaluable contributions of the Saifullah family, particularly late Barrister Saifullah Khan and Begum Kulsoom Saifullah Khan, for their remarkable role in industrial and socio-economic development. In his welcome address, Barrister Assad Saifullah Khan thanked the participants and highlighted that the 10 MW solar projects represents a significant step towards clean energy, environmental responsibility, and cost-efficient industrial operations. He also emphasized Pakistanâ€™s vast solar potential and the need to transition towards renewable energy. Other distinguished speakers, including Osman Saifullah Khan, Sohaib Asif Sipra (CEO Sky Electric), Javed Saifullah Khan, and Salim Saifullah Khan, termed the project a milestone for sustainable industrial growth and environmental protection. Addressing the gathering, the chief guest Aqibullah Khan appreciated the efforts of the Saif Group and stated that private sector investment in renewable energy is crucial for overcoming Pakistanâ€™s energy challenges and ensuring a sustainable future. A key highlight of the ceremony was the Umrah balloting, which was conducted jointly by Humayun Saifullah Khan, Aqibullah Khan, and Salim Saifullah Khan. Later, the dignitaries proceeded to the project site where the formal inauguration took place, followed by prayers. Souvenirs were also presented to esteemed guests in recognition of their participation. This project reflects Saif Textile Millsâ€™ strong commitment to sustainability, innovation, and environmentally responsible industrial development. The ceremony concluded with a lunch hosted in honor of the guests, followed by a mill visit and plantation activities. Copyright Business Recorder, 2026

Date: 2026-04-17

Details: Written by Mrs. Anjum Shahnawaz ISLAMABAD, April 17, 2026 â€” Minister of State for Finance and Railways Bilal Azhar Kayani on Friday urged traders across Pakistan to ensure tax registration and timely filing, calling it essential for broadening the countryâ€™s narrow tax base and strengthening fiscal stability. Kayani made the remarks during a meeting with business representatives from Multan and Faisalabad, as part of ongoing consultations ahead of the upcoming federal budget and wider taxation reforms, according to an official statement. The delegation, led by Kashif of the All Pakistan Trader Association, included traders from key industrial and commercial hubs in Punjab. Senior officials from the Federal Board of Revenue (FBR) and the Tax Policy Office also attended the meeting, which was held as part of a broader outreach programme by the finance ministry. Kayani said cities such as Faisalabad, Multan and Bahawalpur play a critical role in Pakistanâ€™s export performance and industrial output. He said the governmentâ€™s objective was to design a more â€œefficient, equitable and business-friendlyâ€ taxation system through direct engagement with stakeholders. He reiterated that expanding the tax base remained a key priority, alongside reducing compliance burdens and improving ease of doing business. â€œAll traders must come forward for registration and tax filing to ensure fairness in the system,â€ Kayani said. He added that ongoing and planned tax reforms would be shaped through consultations with traders and other stakeholders with practical knowledge of market conditions. During the meeting, trader representatives raised concerns regarding the implementation of Point-of-Sale (POS) systems, documentation requirements and procedural complexity in tax compliance. They stressed the need for greater transparency, simplified procedures and improved trust between taxpayers and tax authorities. Business leaders also welcomed the governmentâ€™s pre-budget engagement efforts, saying such consultations were a positive step towards inclusive policymaking. Kayani assured participants that the government was committed to addressing genuine concerns of the business community. He said reforms would focus on reducing procedural hurdles, improving fairness and strengthening confidence in the taxation framework. He emphasised that all proposed measures would be developed in close coordination with stakeholders to ensure smooth implementation and long-term effectiveness. The meeting concluded with a mutual commitment to continued dialogue between the government and the business community, aimed at promoting sustainable economic growth and improving tax compliance across the country.

Date: 2026-04-17

Details: Written by Faisal Shahnawaz ISLAMABAD, April 17, 2026 â€” The Collectorate of Customs Enforcement, Islamabad has announced a public auction of confiscated vehicles scheduled for April 22, offering a wide range of cars and SUVs seized in enforcement operations, officials said on Friday. The auction will take place at Plot No. 21-22, Service Road, G-11/1, Islamabad at 11:00 a.m., in accordance with customs auction rules notified under SRO 450(I)/2001 dated June 18, 2001. Officials said the auction includes more than 20 vehicles of various makes and models, ranging from older luxury sedans to compact hatchbacks and sports utility vehicles. The vehicles listed for auction include a 1985 Mercedes Benz (protected), Suzuki Alto models from 2010 and 2015, Toyota Hilux Surf units from 1995 and 1999, and multiple Toyota Aqua hybrid cars from 2014 to 2017. Other vehicles include Mitsubishi Pajero (1993), Mitsubishi Mini Pajero (2000), Toyota Prius (2010), Toyota Crown (2004), Toyota Premio (2006), Suzuki Wagon-R (2009), Daihatsu Boon (2017), Mazda Carol (2010), Daihatsu Mira (2012), Toyota Vitz (2005), Toyota Corolla G (2001), Actyon Jeep (2006), Honda Civic (2008), and Jeep Grand Cherokee (1995). According to officials, the auction also features vehicles with varying registration statuses, including some without registration numbers, reflecting their confiscated status. Authorities said interested bidders would be required to comply with auction procedures, including documentation and payment requirements, as per customs regulations. The auction is part of ongoing efforts by customs authorities to dispose of seized assets and generate revenue for the national exchequer, while ensuring transparency in the process. Market participants said such auctions often attract buyers seeking relatively lower-priced vehicles, although bidders are advised to verify vehicle conditions and legal documentation before participating. Customs officials added that all sales would be conducted on an â€œas is, where isâ€ basis, in line with standard auction practices.

Date: 2026-04-17

Details: Written by Shahnawaz Akhter KARACHI, April 17, 2026 â€”Minister of State for Finance, Bilal Azhar Kayani, will hold a series of meetings with business leaders in Karachi over the weekend to discuss key taxation issues ahead of the federal budget for 2026â€“27, officials said on Friday. The two-day visit, starting April 18, will focus on gathering feedback from the business community on tax policy, compliance challenges and proposals for the upcoming budget, according to finance ministry sources. Kayani is scheduled to meet representatives of major business bodies, including the Overseas Investorsâ€™ Chamber of Commerce and Industry (OICCI), the Karachi Chamber of Commerce and Industry (KCCI) and the Federation of Pakistan Chambers of Commerce and Industry (FPCCI). Senior tax officials, including the Chief Commissioner Inland Revenue, are expected to attend the discussions. On April 19, the minister will also hold consultations with the Pakistan Business Council (PBC), a key industry group representing leading corporates. In addition, a meeting with trader representatives will be held at the Regional Tax Office (RTO) Karachi, bringing together leaders from various market associations and trade groups. Senior tax officials, including the Chief Commissioner, will also participate in the session. Officials said the consultations aim to address long-standing concerns of businesses, including tax rates, documentation requirements and enforcement measures. The meetings come at a critical time as the government prepares its budget strategy amid ongoing economic reforms and commitments under international financial programmes. Input from the private sector is expected to play a key role in shaping fiscal measures for the next financial year, with authorities seeking to balance revenue generation with business facilitation and economic growth. The visit underscores the governmentâ€™s efforts to engage stakeholders and build consensus on tax reforms ahead of the budget announcement.

Date: 2026-04-16

Details: Terence J Sigamony Published April 16, 2026 Updated about an hour ago ISLAMABAD: The Federal Constitutional Court (FCC) was informed that the levy of tax on deemed income under Section 7E of the Income Tax Ordinance, 2001, is unconstitutional and liable to be struck down. A two-member bench, headed by Chief Justice Amin-ud-Din Khan, on Wednesday heard appeals arising from judgments of the Sindh, Lahore, Peshawar, and Islamabad High Courts concerning the validity of the tax imposed through the Finance Act, 2022. Under Section 7E, immovable properties owned by a taxpayer (excluding the first property), if not rented out, or self-owned business premises, or self-owned agricultural land, are deemed to generate rental income equal to 20% of their FBR value. This â€œdeemed rentâ€ is then taxed at the rate of 5%, effectively resulting in an annual tax of approximately 1% of the propertyâ€™s FBR (capital) value. Raashid Anwer, representing taxpayers, contended that the levy is, in essence, a tax on the capital value of assets and thus falls outside the legislative competence of the federation. He submitted that the core issue before the Court was whether the tax could be sustained under Entry 50 of the Fourth Schedule to the 1973 Constitutionâ€” which relates to â€œtaxes on the capital value of the assets, not including taxes on immovable propertyâ€ â€” or under Entry 47, which pertains to â€œtaxes on income other than agricultural income.â€ He submitted that the impugned levy could not be justified under either Entryand, therefore, was unconstitutional. Anwer further argued that the tax could not fall under Entry 50 because, after the 18thAmendment, Entry 50, which previously read as â€œTaxes on the capital value of the assets, not including taxes on capital gains on immovable property,â€ had been amended to delete the words â€œcapital gains on.â€ He contended that this amendment reflected a clear constitutional intent to exclude immovable property from the federationâ€™s taxing powers in respect of capital value. In support of this position, reliance was placed on FBR Circular No. 3 of 2012, which, according to the counsel, acknowledged that the federation lacked the authority to impose a tax on the capital value of immovable property. He maintained that Section 7E, in the pith and substance, amounts to such a tax and is therefore ultra vires the Constitution. Anwer further argued that the levy could not be sustained under Entry 47, as it seeks to tax properties that generate no actual income. He pointed out that rented properties and other income-generating assets are excluded from the ambit of Section 7E, thereby underscoring that the provision targets assets that do not yield income. Relying on the Supreme Courtâ€™s judgment in the Elahi Cotton case, he submitted that while the Court had upheld the constitutionality of turnover tax, it had done so in the context of Entry 52 of the Fourth Schedule, and not Entry 47. He emphasized that the judgment does not support the proposition that anything may be arbitrarily deemed to be income. Rather, it permits deeming provisions only where there exists an underlying economic activity. Copyright Business Recorder, 2026

Date: 2026-04-16

Details: Sohail Sarfraz Published April 16, 2026 Updated 9 minutes ago ISLAMABAD: In a development underscoring renewed foreign investor interest in Pakistan, the Competition Commission of Pakistan (CCP) has approved the acquisition of a stake in an aviation maintenance firm by a UAE-based company, bringing fresh foreign direct investment (FDI) into the countryâ€™s services sector. The deal, cleared under Section 11 of the Competition Act, 2010, allows M/s. International Business Company FZE â€” a UAE-incorporated entity â€” to acquire shareholding in M/s. Northern Technik (Private) Limited, a local firm engaged in aircraft line maintenance services for commercial airlines. The seller, M/s. SPARS (Private) Limited, is a diversified local entity with interests spanning real estate, aviation, telecom, pharmaceuticals, information technology, construction, and engineering services. Official sources said the investment represents a meaningful inflow of foreign capital into a specialised and high-value segment of Pakistanâ€™s aviation ecosystem. The entry of a foreign investor into aircraft maintenance services is being seen as particularly significant, given Pakistanâ€™s growing reliance on aviation infrastructure and the increasing demand for cost-efficient, localised maintenance solutions. Industry sources note that such investments can help reduce reliance on overseas maintenance facilities, improve service standards, and potentially position Pakistan as a regional hub for line maintenance services. According to the CCP officials, the transaction underwent a Phase-I competition review, focusing on whether the acquisition could distort market competition or lead to concentration of market power. The Commission identified the relevant market as aircraft line maintenance services in Pakistan and found it to be fragmented, with multiple service providers as well as airlines maintaining in-house capabilities. Copyright Business Recorder, 2026

Date: 2026-04-16

Details: Recorder Report Published April 16, 2026 Updated about 2 hours ago KARACHI: SupernetGlobal has entered the African market with the successful deployment of its first satellite-based connectivity solution in Tanzania, marking a significant step in the companyâ€™s international expansion strategy. The company said the project delivers high-capacity internet connectivity through satellite infrastructure, extending its operational footprint into Africa, a region where access to reliable digital connectivity remains a challenge, particularly in remote and underserved areas. While SupernetGlobal has maintained an international presence through its UAE operations, the latest deployment represents its first satellite-based service in Africa and signals a broader push to tap emerging markets. â€œThis deployment reflects our strategy to expand into markets where our capabilities can deliver meaningful impact,â€ the company said in a statement. â€œOur experience in satellite connectivity allows us to provide reliable digital infrastructure in regions where traditional networks may be limited, and Africa represents a significant opportunity in this regard.â€ Industry experts note that satellite-based solutions offer scalable and rapidly deployable connectivity, making them particularly suited for regions with limited terrestrial infrastructure, while also supporting digital transformation initiatives across sectors. Leveraging its expertise in satellite communications and mission-critical connectivity solutions, SupernetGlobal aims to address growing demand for digital infrastructure in such markets. In addition to connectivity services, the company provides a broader range of solutions, including ICT infrastructure, cybersecurity, and digital services, which it plans to gradually introduce across international markets as part of its long-term growth strategy. The company views the Tanzania deployment as an entry point into Africa, with plans to expand its presence further in response to rising demand for technology-driven solutions. Copyright Business Recorder, 2026

Date: 2026-04-16

Details: Recorder Report Published April 16, 2026 Updated about 2 hours ago KARACHI: EFU Life Assurance Ltd has entered into a strategic agreement with ABHI Microfinance Bank Limited. to offer life insurance solutions to customers of the microfinance bank, aiming to expand access to financial protection and long-term security across Pakistan. The collaboration establishes a framework under which EFU Lifeâ€™s insurance products will be distributed through ABHI Microfinance Bankâ€™s platform, enabling customers to access insurance coverage alongside their existing financial services. The initiative is designed to support greater financial inclusion by integrating protection solutions into everyday banking. Copyright Business Recorder, 2026 KE ELECTS SHAHERYAR CHISHTY AS CHAIRMAN â€¢ Earlier, Chishty was performing the functions of the chairman during the absence of Mark Skelton BR Web Desk Published April 15, 2026 Updated about 19 hours ago K-Electric (KE) announced on Wednesday that Shaheryar Chishty was elected as the chairman of the board. The company shared the development in a notice to the Pakistan Stock Exchange (PSX) today. â€œWe are pleased to notify you that following the election of directors during the Extraordinary General Meeting held on April 2, 2026, the Board of Directors, in its meeting held on April 15, 2026, has appointed Shaheryar Chishty as the Chairman of the Board,â€ read the notice. Last month, the company appointed Shaheryar Chishty to perform the functions of the chairman during the absence of Mark Skelton. â€œWe would like to further apprise that the Board of Directors of KEL, in its meeting held on 17 March 2026, has appointed Shaheryar Chishty to perform the functions of the chairman during the absence of Mark Skelton,â€ KE said in its notice to the PSX back then. As per information available on KEâ€™s website, Chishty set up AsiaPak Investments in 2011, which has become one of the leading infrastructure investors in Pakistan. Before starting Asiapak, Shaheryar had a long career as an investment banker in Hong Kong at Citigroup and Nomura. At Citigroup until 2009, Shaheryar served in various senior roles, including as Head of Asia Industrials and Head of North Asia Mergers & Acquisitions. From 2009 to 2012, he worked at Nomura International in Hong Kong first as Asia Head of Industrials Investment Banking, then also as Global Head of Industrials Investment Banking. During his 18-year investment banking career, Shaheryar raised over $18 billion in debt and equity capital for clients and transactions, and advised on completed mergers and acquisitions valued at over $60 billion.

Date: 2026-04-16

Details: Written by Shahnawaz Akhter Karachi, April 16, 2026 â€” A sweeping investigation by the Federal Board of Revenue (FBR) has uncovered large-scale corruption within Pakistan Customs, resulting in strict disciplinary action against multiple officials, according to official notifications issued on Thursday. In one case, the FBR imposed a major penalty of compulsory retirement on Mr. Tariq Mehmood, a Superintendent Preventive Service (BS-16) posted at the Collectorate of Customs Enforcement, Karachi. The action followed a detailed departmental inquiry that established charges of misconduct and corruption under the Civil Servants (Efficiency & Discipline) Rules, 2020. The proceedings against Mehmood began in July 2023, when he was suspended over allegations of inefficiency, misconduct, and corruption. An initial inquiry was deferred pending the outcome of related criminal cases before special courts dealing with customs, taxation, and anti-corruption matters. However, following directives from the Sindh High Court to conclude departmental proceedings, the FBR initiated a fresh inquiry. A two-member inquiry committee, constituted after the initial report was deemed unsatisfactory, concluded in December 2025 that the charges stood proven. The committee found that the officer possessed assets significantly disproportionate to his known sources of income and failed to provide a credible money trail. According to the findings, Mehmood, who earned less than Rs150,000 per month, was linked to the acquisition of a residential property in DHA Phase IV, Karachi, registered in his spouseâ€™s name. The property was allegedly financed through loans amounting to tens of millions of rupees from private individuals described as â€œfriends,â€ raising serious concerns about potential quid pro quo arrangements. The inquiry further revealed that the officer failed to declare the property in his annual asset declarations, violating the Government Servants (Conduct) Rules, 1964. Authorities noted that his explanations regarding the source of funds were â€œfeeble and unconvincing,â€ reinforcing suspicions of unaccounted wealth. After issuing a show-cause notice and conducting a personal hearing in February 2026, the FBR concluded that Mehmood had failed to rebut the charges. The authority subsequently ordered his compulsory retirement with immediate effect. His suspension period since July 2023 will be treated as leave, subject to applicable rules. He retains the right to appeal within 30 days. In a separate but related case, the FBR also ordered compulsory retirement of Yawar Abbas, an Intelligence Officer (BS-16) at the Directorate of Intelligence and Investigations, Karachi, on similar grounds. Abbas had been under suspension since July 2023. While an initial inquiry recommended exoneration, the FBR rejected the findings and ordered a de-novo investigation. The subsequent probe found evidence of misconduct and corruption, particularly highlighting the acquisition of a 150-square-yard bungalow in DHA Phase VII, Karachi, allegedly financed through unexplained loans and gifts. The authority observed that Abbasâ€™s financial profile was inconsistent with his declared income and noted his failure to disclose the property in asset declarations between 2013 and 2022. Following a show-cause notice and personal hearing, the FBR concluded that the charges were substantiated. Abbas was also retired compulsorily, with his suspension period treated as leave under applicable rules. He may file an appeal within 30 days. The back-to-back actions underscore the FBRâ€™s intensified efforts to enforce accountability and curb corruption within Pakistan Customs, signaling a tougher stance against officials found accumulating assets beyond their declared means.

Date: 2026-04-16

Details: Written by Shahnawaz Akhter ISLAMABAD, April 16, 2026 â€” The Federal Board of Revenue (FBR) has imposed a major penalty of compulsory retirement on a Pakistan Customs intelligence officer after disciplinary proceedings concluded that he was living beyond his known sources of income, according to an official notification issued on Thursday. The case involved Yawar Abbas, an Intelligence Officer (BS-16) at the Directorate of Intelligence and Investigations, Karachi, who had been under suspension since July 2023 over allegations of inefficiency, misconduct, and corruption under the Civil Servants (Efficiency & Discipline) Rules, 2020. According to the detailed order, initial inquiry proceedings were deferred pending criminal investigations. However, following a directive from the Sindh High Court to complete the inquiry within two months, a fresh departmental investigation was conducted and later submitted in April 2025, initially recommending exoneration. The FBR authority subsequently rejected the findings and ordered a de-novo inquiry through a two-member committee. The reconstituted inquiry, completed in December 2025, partially established charges of misconduct and corruption, recommending a reduction in rank and pay scale. Following a show-cause notice and personal hearing held in February 2026, the accused officer denied the allegations but failed to provide what authorities described as a satisfactory explanation or financial trail for assets under scrutiny. The authority observed that the officerâ€™s financial profile was inconsistent with his declared income as a BS-16 official, highlighting the acquisition of a 150-square-yard bungalow in DHA Phase VII, Karachi. The order noted that the property was allegedly financed through unexplained loans and gifts from family members, including large contributions from relatives. It further stated that the officer had failed to declare the property in mandatory asset declarations submitted between 2013 and 2022, constituting a violation of government conduct rules. After reviewing evidence, inquiry reports, and hearing arguments from both sides, the authority concluded that charges of misconduct and corruption were established under relevant provisions of the Civil Servants (E&D) Rules, 2020. The FBR ordered compulsory retirement with immediate effect and ruled that the suspension period from July 2023 will be treated as leave, subject to entitlement. The officer has the right to appeal the decision within 30 days under applicable civil service appeal rules.

Date: 2026-04-16

Details: Written by Shahnawaz Akhter ISLAMABAD, April 16, 2026 â€” The Federal Board of Revenue (FBR) on Thursday issued revised fair market values for immovable properties in Islamabad, in a move aimed at tightening tax compliance and aligning property valuations with prevailing market rates. The new valuation framework, notified under S.R.O. 644(I)/2026, replaces earlier rates issued in February 2026 and covers residential, commercial, and rural properties across the federal capital, including developed sectors, housing societies, and peripheral areas. Officials said the updated system is designed to improve the accuracy of withholding tax calculations on real estate transactions and curb under-declaration of property values. Revised valuation structure The notification introduces differentiated rates for open plots, constructed properties, apartments, and commercial units such as shops and offices. It also standardizes construction valuation, setting Rs2,500 per square foot for buildings up to five years old and Rs1,200 per square foot for older structures. Prime residential sectors such as F-6 and F-7 have been assigned some of the highest valuations, with open plots reaching up to Rs210,000 per square yard. Commercial hubs including Blue Area also reflect premium rates, particularly for ground-floor shops and office spaces. In contrast, developing sectors such as G-15, I-12, and surrounding rural areas carry lower valuations, reflecting infrastructure gaps and ongoing development. For commercial properties, rates vary based on floor level and location within a building. Ground-floor units in major markets and Markaz areas are assigned the highest values, followed by upper floors, basements, and rear-side units. The notification further states that where multiple rates exist for a single locality, the higher value will apply for taxation purposes. Rural property valuations will continue to follow previously notified district-level rates. Market impact Real estate analysts said the revised framework could increase transaction costs in prime areas while improving transparency in property deals. However, they warned that higher valuations may temporarily slow activity in certain segments. The move is part of broader reforms by the FBR to modernize property taxation, enhance revenue collection, and reduce valuation discrepancies in Pakistanâ€™s real estate sector.

Date: 2026-04-16

Details: Written by Shahnawaz Akhter ISLAMABAD, April 16, 2026 â€” The Federal Board of Revenue (FBR) on Thursday constituted a technical committee to review and strengthen its Compliance Risk Management (CRM) framework, aiming to improve tax enforcement efficiency and detect high-risk cases more effectively. According to an official notification, the committee comprises senior Inland Revenue Service (IRS) officers and technical experts, with oversight from FBR headquarters in Islamabad. The panel will be chaired by Faheem Mohammad (BS-21), Member Audit/CRM at FBR headquarters. Other members include Irshad Hussain, Director General (Operations) CRM; Ahmad Kamal, Chief Commissioner IR Operations, MTO Karachi; Muhammad Khalid Jamil, Chief Commissioner IR Operations, RTO Gujranwala; Zain-ul-Abidin Sahi, Chief Domains Officer at PRAL; and Shabih-ul-Aijaz, Chief Commissioner IR Operations, LTO Karachi. The committee secretary will be Muhammad Wasim from the IT Cadre. The committee has been tasked with conducting a comprehensive review of the existing CRM architecture, identifying structural gaps and improving the systemâ€™s ability to detect non-compliant or high-risk taxpayers. Its terms of reference include refining risk indicators, thresholds and rules used in tax risk detection, as well as developing a centralized CRM Risk Register. The panel will also establish clear procedures for handling high-risk cases within field formations. Additionally, the committee will design a monitoring framework with key performance indicators (KPIs) and real-time dashboards to track case progress and enforcement outcomes. The FBR said the committee will also evaluate the need for additional data sources, particularly through integration with the Third-Party Compliance Management System (TCMS), to improve data accuracy and coverage. It will further recommend enhancements in data integration, quality assurance and system interoperability across tax departments. Where necessary, the committee may form sub-committees involving field officers to focus on Income Tax, Sales Tax and Federal Excise Duty (FED) cases. It may also co-opt additional officers from field formations to support specific technical tasks. Officials said the initiative reflects FBRâ€™s broader efforts to modernize tax administration and strengthen compliance through data-driven enforcement mechanisms.

Date: 2026-04-16

Details: â€¢ Issuance oversubscribed by 1.45 times Salman Siddiqui Published April 16, 2026 Updated about 10 hours ago Pakistan government completed the inaugural issuance of hybrid sukuks, mobilising Rs109.297 billion at the Pakistan Stock Exchange (PSX), according to a bourse press statement on Thursday. The instruments offered for the inaugural issuance were 1 Year Fixed Rate Discounted Government of Pakistan Hybrid Sukuk and 10 Year Variable Rental Rate (VRR) Government of Pakistan Hybrid Sukuk. â€œThe overall issues were oversubscribed by 1.45 times, surpassing the total target amount of PKR 200 billionâ€¦The cut-off rental rates were set at 11.8000% for 1 Year Discounted and 11.7185% for 10 Year VRR,â€ the statement read. â€¢ The Hybrid Sukuk structure comprises of an Ijarah Sale & Lease Back (Ijarah SLB) transaction and a Commodity Murabaha transaction, with 55% of proceeds allocated to Ijarah SLB and to 45% to Commodity Murabaha. The innovative structure reflects Pakistanâ€™s advancing sophistication in Islamic finance and sets a new benchmark for Shariah compliant instruments in the region. The issuance paves the way for greater investor participation and enhanced regional leadership in Islamic financial innovation, it added. The issuance was done through an auction process by the Capital Market Infrastructure Institutions (CMIIs) following the existing auction mechanism. Khaliq Uz Zaman, Director Domestic Debt, stated in the statement that the introduction of the hybrid structure was a critical milestone and a significant step towards the growth of Shariah-compliant debt markets in Pakistan. â€œIt will diversify the investor base and deepen the domestic debt market, which will eventually reduce borrowing costs, which was a key objective of the Debt Management Office (DMO).â€ The DMO of the Ministry of Finance completed the inaugural issuance in collaboration with the State Bank of Pakistan (SBP), the Securities and Exchange Commission of Pakistan (SECP), Joint Financial Advisors (JFAs) â€“ Meezan Bank Limited (MEBL), Bank Alfalah Limited (BAFL), Dubai Islamic Bank (DIB), and BankIslami Pakistan Limited (BIPL) â€“ together with the Capital Market Infrastructure Institutions (CMIIs) â€“ Pakistan Stock Exchange Limited (PSX), National Clearing Company of Pakistan Limited (NCCPL), Central Depository Company of Pakistan Limited (CDCPL) and SCB Sadiq.

Date: 2026-04-15

Details: Written by Mrs. Anjum Shahnawaz KARACHI â€” The Sindh High Court (SHC) has granted interim relief to multiple taxpayers by staying the recovery of alleged default surcharge linked to super tax liabilities, in a development that could have significant implications for tax enforcement and litigation in Pakistan. The order was issued on Tuesday in response to a series of constitutional petitions challenging show-cause notices issued under the Income Tax Ordinance, 2001. The notices alleged that the petitioners had failed to pay super tax under Section 4C of the law and were therefore liable to pay default surcharge under Section 205. According to court filings, the Federal Board of Revenue (FBR) had initiated proceedings under Sections 205(1), 205(7), and 137(1) of the Ordinance, asserting that the taxpayers had defaulted on their obligations by not depositing the super tax alongside their income tax returns for the relevant tax years. The petitioners, represented by senior counsel including Barrister Asad Ashfaq Tola, M. Amayed Ashfaq Tola, Shaheer Memon, Jawad Qureshi, and Yousuf Khalid Anwer, argued that the recovery proceedings were premature and unlawful. They contended that no default surcharge could be imposed without a formal assessment determining the liability through an Order-in-Original issued by the competent tax authority. Legal counsel further submitted that under Section 205 of the Ordinance, the existence of a default must first be established through due process before any surcharge can be levied. They emphasized that Section 137(2) clearly mandates that once a tax liability is determined, the taxpayer must be served with a notice specifying the amount payable and granted a statutory period of 30 days to settle the dues. The petitioners maintained that this mandatory procedure had not been followed in their cases, rendering the show-cause notices and subsequent recovery attempts legally flawed. They also argued that for the period in question, taxpayers were operating under judicial protection granted by superior courts, including the Islamabad High Court, with no suspension of relevant judgments such as those in the Fauji Fertilizer and Pakistan Oilfields cases. In support of their arguments, the petitioners cited recent Supreme Court jurisprudence, including the ruling in Commissioner Inland Revenue (Legal), Islamabad v. Pakistan LNG Limited and others (2026 PTD 192), which reaffirmed the necessity of granting taxpayers a 30-day compliance window following the issuance of a valid assessment order. The SHC, after a preliminary hearing, issued notices to the respondents, including tax authorities, and directed the Deputy Attorney General to submit a response. The court further ordered that no coercive action be taken against the petitioners in connection with the disputed surcharge demands until the legal requirements under Section 137(2) are fully complied with. Tax experts said the ruling underscores the judiciaryâ€™s continued emphasis on procedural fairness and due process in tax administration. They noted that the decision could affect similar cases where recovery actions have been initiated without completing statutory assessment procedures. The development comes amid heightened scrutiny of super tax enforcement, a levy that has been a subject of ongoing legal debate since its introduction. Businesses and legal practitioners have frequently challenged its retrospective application and the manner of its implementation. The SHC is expected to take up the matter for further hearing in the coming weeks, as both sides prepare detailed arguments on the interpretation and application of the relevant provisions of the Income Tax Ordinance, 2001.

Date: 2026-04-15

Details: Reuters Published April 15, 2026 Updated about an hour ago NEW YORK: Wall Streetâ€™s main indexes advanced on Tuesday after reports of fresh efforts to ease the Middle East conflict boosted sentiment, while traders also assessed a spate of corporate earnings. Delegations from the US and Iran could resume talks in Pakistan to end the war this week, sources told Reuters. US President Donald Trump also said Iran wanted to make a deal. The market has been sensitive to developments in the region, with even tentative signs of an off-ramp sufficient to encourage investors eager for positive news. â€œThe shift in the US-Iran conflict from missiles to words leaves markets hoping for a beginning to the end of the war,â€ said Bob Savage, head of markets macro strategy at BNY. At 11:26 a.m. ET, the Dow Jones Industrial Average rose 290.36 points, or 0.60 percent, to 48,508.61. The S&P 500 gained 60.15 points, or 0.88 percent, to 6,946.39, and the Nasdaq Composite jumped 326.91 points, or 1.41 percent, to 23,510.64. The S&P 500 was on track to recoup all its losses since the start of the war, while the Nasdaq 100 was set for a 10-day winning streak, its longest since 2021. Still, any hint of a re-escalation in hostilities could quickly derail the rally, especially as concerns about the economic impact of the war persist. The International Monetary Fund cut its global growth outlook on Tuesday. Commentary from several Federal Reserve policymakers will also be closely watched through the day for insight into how the central bank is assessing the impact of the US-Iran war. In addition to geopolitics, investors are taking cues from a busy slate of quarterly earnings to guide their positioning. â€œThe earnings season will help investors shift their focus from the macro to the micro,â€ said Art Hogan, chief ?market strategist at B Riley Wealth. BlackRock gained 4.2 percent after the asset manager reported a rise in first-quarter profit, helped by strong inflows into its exchange-traded funds and a sharp increase in performance fees. Citigroup rose 1.5 percent and hit its highest in nearly two decades after beating first-quarter profit estimates, while Johnson & Johnson added 1.4 percent after reporting earnings. JPMorgan inched 0.6 percent lower following its first-quarter results, while Wells Fargo declined 4.8 percent after interest income fell short of market expectations. The S&Pâ€™s financial sector edged 0.3 percent higher. Software stocks rose 1.4 percent, logging their biggest two-day gains since May last year. Among other stock movers, United Airlines and American Airlines rose 4 percent and 8.9 percent, respectively. United Airlines CEO Scott Kirby pitched a potential merger with American Airlines to Trump in late February, two sources said, raising the prospect of a deal that could reshape the industry. Shares of Globalstar jumped 10.1 percent after Amazon.com agreed to buy the satellite company. Separately, data on Tuesday showed that US producer prices increased less than expected in March as the cost of services was unchanged. Advancing issues outnumbered decliners by a 2.61-to-1 ratio on the NYSE and by a 2.4-to-1 ratio on the Nasdaq. The S&P 500 posted 18 new 52-week highs and one new low, while the Nasdaq Composite recorded 109 new highs and 29 new lows.

Date: 2026-04-15

Details: Written by Shahnawaz Akhter ISLAMABAD, April 15, 2026 â€”Federal Board of Revenue (FBR) on Wednesday issued revised guidelines for tax collection from builders and developers, aiming to address industry concerns over withholding tax applicability and ease liquidity pressures. The clarification was issued through Circular No. 8 of 2025-26 (IR Policy Income Tax), superseding an earlier directive dated March 31, 2026. The move seeks to remove ambiguities surrounding the application of advance tax under Section 236C of the Income Tax Ordinance, 2001 for taxpayers operating under the special regime defined in Section 7F. Under Section 7F, certain categories of builders and developers are taxed under a simplified framework where income is calculated as a fixed percentage of gross receipts, rather than on conventional profit determination. However, industry participants had raised concerns that withholding tax collected under Section 236Câ€”typically adjustable against capital gainsâ€”created an additional financial burden for such entities. The FBR noted that, since builders and developers under Section 7F are taxed under â€œIncome from Businessâ€ through a special mechanism, the adjustment of withholding tax may not always be feasible, particularly in cases where taxpayers have no other taxable income streams during the year. To address this issue, the tax authority clarified that eligible taxpayers who have fully discharged their liabilities under Section 7F and have no additional taxable income may apply for exemption from advance tax collection under Section 236C. Such taxpayers can submit applications to their respective Commissioners Inland Revenue under Section 159 of the ordinance, requesting exemption certificates that would allow the non-collection of tax on transactions involving the sale of immovable property. The FBR directed Commissioners to evaluate applications on a case-by-case basis, ensuring that all legal requirements are fulfilled before granting exemptions. It further emphasized adherence to prescribed timelines for processing such requests. Importantly, the circular introduced an automated safeguard mechanism: if the Commissioner fails to act within seven working days of receiving a complete application, the exemption certificate will be automatically issued through the IRIS system. Analysts say the clarification is expected to provide relief to builders and developers by improving cash flow and reducing procedural uncertainty, potentially supporting activity in Pakistanâ€™s construction and real estate sectors.

Date: 2026-04-15

Details: Written by Mrs. Anjum Shahnawaz ISLAMABAD, April 15, 2026 â€“ Prime Minister Muhammad Shehbaz Sharif on Wednesday ordered immediate legal action against individuals involved in illegal over-invoicing practices, directing authorities to strengthen enforcement and accountability within Pakistanâ€™s tax and financial monitoring system. Chairing a high-level review meeting on the Federal Board of Revenue (FBR), Prime Minister Shehbaz expressed strong dissatisfaction over institutional failures to curb over-invoicing between 2017 and 2022, noting that relevant departments had shown â€œconsistent negligenceâ€ in preventing large-scale revenue losses. He instructed authorities to identify all officials responsible for negligence and accelerate departmental proceedings against them without delay. â€œTax money is a trust of the nation; protecting it is our duty, and we are accountable for every single penny,â€ the prime minister said, calling for a comprehensive long-term strategy to prevent similar financial irregularities. During the meeting, the findings of a special committee led by Mushtaq Ahmed Sukhera were presented. The prime minister appreciated the report and directed that its recommendations be implemented in full to strengthen governance and enforcement mechanisms. Officials briefed the meeting that the FBR had developed a Centralized Price Verification Portal aimed at detecting and preventing over-invoicing in import transactions. The system, they said, would be integrated with banking channels by the end of June to improve real-time verification and financial tracking. The meeting was informed that the FBRâ€™s Post Clearance Audit Wing first identified the over-invoicing scheme in October 2022. So far, authorities have registered 13 First Information Reports (FIRs), while legal proceedings against those involved remain ongoing. Shehbaz also directed that the Financial Monitoring Unit (FMU) be made more active and effective, with representation from the Federal Investigation Agency (FIA) and the Intelligence Bureau to enhance inter-agency coordination. The meeting was attended by federal ministers Musadik Malik, Ahad Khan Cheema, Attaullah Tarar, Attorney General Mansoor Usman Awan, Minister of State for Finance Bilal Azhar Kayani, the Chairman FBR, and senior government officials.

Date: 2026-04-15

Details: Written by Shahnawaz Akhter KARACHI, April 15, 2026 â€” The Federal Board of Revenue (FBR) has revised customs values for imported almonds in a move aimed at ensuring accurate duty collection and curbing under-invoicing, according to an official valuation ruling issued on Wednesday. The Directorate General of Customs Valuation released Valuation Ruling No. 2065/2026, superseding the previous ruling issued in December 2024. The updated values will be applied under Section 25A of the Customs Act, 1969 for the assessment of duties and taxes on almond imports. The revision follows consultations with importers and stakeholders held on March 31, 2026. Participants raised concerns regarding misdeclaration and called for clearer differentiation between almond varieties, particularly soft-shell and hard-shell types. Authorities also reviewed import data from January to March 2026 and conducted market surveys to align values with prevailing international and domestic price trends. Officials noted that soft-shell almonds, locally referred to as â€œKaghzi,â€ typically command higher prices due to their thin shells, while hard-shell almonds are comparatively less expensive. The Monterey variety, although globally categorized as hard-shell, has been treated as soft-shell in Pakistan based on its physical characteristics and market pricing. New Customs Values for Almonds S. No. Description PCT Code Origin Customs Value (US$/Kg) 1 Almonds Shelled (Without Shell) 0802.1200 All Origins 3.00 2 Almonds (Soft Shell) 0802.1100 All Origins 2.14 3 Almonds (Hard Shell) 0802.1100 All Origins 1.95 The ruling further states that value-added almonds, including roasted or salted variants, will be subject to a 15% higher customs value. Adjustments will also be made for imports via air and land routes to account for differences in freight costs. The FBR clarified that if the declared import value exceeds the notified customs value, the higher figure will be used for duty assessment. Customs authorities nationwide have been directed to ensure strict implementation of the revised valuation framework to promote transparency and uniformity in import practices. The ruling will remain effective until amended or withdrawn.

Date: 2026-04-14

Details: Written by Faisal Shahnawaz KARACHI, April 14, 2026 â€” Commercial banks in Pakistan recorded an increase of more than Rs141 billion in deposits from the manufacturing sector in March 2026, reflecting shifting liquidity patterns amid heightened geopolitical uncertainty, according to data released by the State Bank of Pakistan (SBP). Total manufacturing-sector deposits rose to Rs1.82 trillion in March from Rs1.68 trillion in February, according to industry data, marking a month-on-month increase driven by multiple sub-sectors including automobiles, petroleum refining and food processing. The increase came during a period of elevated regional tensions linked to the Iran conflict, which analysts said may have contributed to precautionary cash positioning by businesses and exporters. Within the manufacturing sector, deposits from the food industry rose to Rs350.01 billion in March, compared with Rs315.56 billion in February. Beverage manufacturers also posted gains, rising to Rs61.70 billion from Rs49.99 billion. The textiles sector, a key pillar of Pakistanâ€™s export economy, saw deposits increase to Rs258.77 billion from Rs246.82 billion, while the chemicals sector rose to Rs137.82 billion from Rs123.30 billion. Deposits from the petroleum refining segment climbed to Rs164.72 billion in March, up from Rs141.67 billion in the previous month. The automobile manufacturing segment also recorded a sharp increase, rising to Rs110.70 billion from Rs78.63 billion. Other notable gains were seen in basic metals, machinery and equipment, rubber and plastics, and repair-related manufacturing activities. Some segments, however, posted declines. Deposits in electrical equipment fell to Rs66.23 billion from Rs78.92 billion, while fabricated metal products and computer-related manufacturing also recorded marginal decreases. Analysts said the overall rise suggests improved liquidity flows within the industrial sector, possibly driven by export receipts, seasonal business activity and precautionary cash holdings amid external uncertainty. They added that the sharp rise in automobile and petroleum-related deposits reflects stronger demand cycles and inventory financing requirements, while textile growth remains aligned with export recovery trends. Banking sector officials said manufacturing deposits are a key indicator of industrial activity and cash flow stability, particularly in emerging economies where external shocks often influence liquidity behaviour. However, they cautioned that monthly fluctuations should be interpreted carefully, as sectoral deposit movements can be affected by contract cycles, import payments and temporary cash hoarding. Economists expect manufacturing liquidity trends to remain sensitive to geopolitical developments, currency stability and energy price movements in the coming months.

Date: 2026-04-14

Details: Reuters Published April 14, 2026 Updated about 5 hours ago FRANKFURT: European shares dipped on Monday as expectations of a swift resolution to the Middle East conflict dimmed following the breakdown of US-Iran negotiations and Washingtonâ€™s decision to impose a blockade around the Strait of Hormuz. The pan-European index was down 0.2 percent at 613.88 points, with the benchmark closer to its pre-war levels than the mid-March lows. Major regional bourses were also lower, with Germanyâ€™s DAX and Spainâ€™s IBEX 35 falling 0.3 percent and 1 percent, respectively. The deadline for the start of a US military blockade passed, while Tehran threatened to retaliate against ports of its Gulf neighbours, if Iranian ports were threatened. Rising tensions pushed oil prices above the USD100-per-barrel mark, adding to inflation worries that have remained on the forefront since the conflict began. â€œThe absence of progress in US-Iran talks over the weekend has challenged market optimism. This reinforces our view that investors should mitigate risks through diversification and hedging,â€ UBS analysts said. â€œWe continue to recommend staying invested, as we believe both parties are incentivized to find a resolution.â€ Mondayâ€™s downturn follows a rally last week, when the STOXX 600 gained 3 percent on investor optimism that a temporary US-Iran ceasefire could lead to end of hostilities. Financial shares added 1.2 percent. British fintech firm Wise rose 6.5 percent after its quarterly cross-border volumes surged ahead of its Nasdaq debut. The aerospace & defense index was higher after coming under pressure last week. Germanyâ€™s Rheinmetall and UKâ€™s BAE Systems were up over 2 percent each. Communication services and healthcare weighed heavily on the benchmark index. Shares of Deutsche Telekom fell 6 percent after hitting an over two-month low earlier after JP Morgan trimmed the German firmâ€™s price target.

Date: 2026-04-13

Details: Recorder Report Published April 13, 2026 Updated about an hour ago PESHAWAR: Khyber Pakhtunkhwa Revenue Authority (KPRA) has achieved a 21 percent growth in Sales Tax on Services during the first three quarters of the fiscal year 2025â€“26, collecting Rs. 34.60 billion during Julyâ€“March, compared to Rs. 28.60 billion in the corresponding period of last year. This increase of Rs. 6 billion reflects a strong and sustained improvement in tax compliance, enhanced enforcement, and continued expansion of the service sector tax base across the province. According to figures released by KPRAâ€™s media wing, the Authority generated a total revenue of Rs. 38.80 billion during the first nine months of the ongoing financial year. This includes Rs. 34.60 billion from Sales Tax on Services and Rs. 4.20 billion from Infrastructure Development Cess (IDC). The overall revenue collection performance of Authority remained stable, with strong gains in Sales Tax on Services effectively reinforcing KPRAâ€™s revenue stream during the ongoing financial year. Director General (DG) KPRA, Miss Irum Naz, appreciated the performance of the Authorityâ€™s officers and staff, attributing the growth in Sales Tax on Services to effective planning, sustained enforcement, and institutional commitment. â€œThe consistent growth in Sales Tax on Services during the first nine months of the financial year reflects our strategic focus, improved compliance, and the dedicated efforts of KPRAâ€™s workforce,â€ she said. â€œWe are confident that with continued focus and a data-driven approach, the Authority will achieve its annual revenue targets.â€ The Director General also expressed gratitude to taxpayers for their trust and cooperation, terming it essential for sustained growth. She further acknowledged the support and guidance of the Chief Minister Khyber Pakhtunkhwa Muhammad Sohail Afridi and the Provincial Minister for Finance, Mr. Muzzammil Aslam noting that their leadership has played a key role in strengthening revenue mobilization efforts in the province. Copyright Business Recorder, 2026

Date: 2026-04-13

Details: Naseem Usman Published April 13, 2026 Updated about an hour ago KARACHI: Overall stability was observed in cotton prices during the latest trading session, though market activity remained limited. An upward trend continued in New York cotton futures, reflecting positive sentiments in international markets. For the upcoming 2026-27 crop season, forward contracts for seed cotton and ginned cotton were settled at Rs10,000 per kilogram and Rs21,700 per maund respectively, with deliveries agreed upon between May 20 an May 30. According to sources, there are indications that the ongoing dispute between Pakistan and Afghanistan may be resolved through Chinese mediation. If diplomatic matters progress in the right direction, the import of cotton from Afghanistan into Pakistan could resume. Sources further revealed that Afghanistan currently holds a stock of approximately 500,000 cotton bales, which could significantly ease supply pressures in the Pakistani market once trade relations are restored. The Karachi Cotton Exchange building has remained sealed since December 12, 2025, following an operation carried out by the Evacuee Trust Property Board with the assistance of the Federal Investigation Agency. As a direct consequence of this closure, the daily cotton spot rate, which holds critical importance for market participants and industry stakeholders, has not been officially issued, creating uncertainty in the trading community. Despite the prevailing regional tensions, Pakistanâ€™s textile exports recorded a month-on-month increase in March, which has been widely regarded as an encouraging and positive development for the countryâ€™s export-driven economy. Khalid Mahmood Khokhar, Chairman of Kisan Ittehad, strongly urged the government to focus on the revival of cotton cultivation in Pakistan, stressing that the national economy cannot sustain itself without this vital crop. He expressed serious concern that while White Poison, referring to sugar, is being actively promoted and encouraged, White Gold, meaning cotton, is being neglected and its cultivation systematically destroyed, warning that this misaligned agricultural policy poses a grave threat to the countryâ€™s economic future. The local cotton market witnessed overall price stability during the past week. Although the two-week ceasefire amid escalating tensions between Iran, Israel, and the United States in the Middle East caused a decline in the prices of several commodities globally, this development also prevented cotton prices from rising significantly. In contrast, international cotton prices saw a relative increase during the same period. The limited domestic cotton stock contributed to relative price stability within the country. Meanwhile, a reduction in energy prices is expected to boost industrial production in the coming period. On the trading front, future contracts for new cotton and Phutti have been settled for delivery between May 20 and May 30. In a notable development, the Punjab Agriculture Department is actively pursuing efforts to rehabilitate cotton cultivation across the province. In this connection, a seminar was held in Bahawalpur last week to promote awareness and coordinate revival strategies. In Sindh and Punjab, cotton prices ranged between Rs 18,500 and Rs 20,000 per maund, varying according to quality and payment conditions. Trade activity in Banola, Khal, and Oil remained sluggish throughout the week. The Karachi Cotton Exchange building has been sealed by the Evacuee Trust Property Board (ETPB) with the assistance of the Federal Investigation Agency (FIA) since December 12, due to which the critically important Daily Cotton Spot Rate has not been able to be issued. Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, stated that international cotton prices continued to rise during the period. New York cotton futures were traded between 73 and 76 US cents per pound. According to the weekly export and sales report released by the United States Department of Agriculture (USDA), a total of 319,600 bales were sold for the marketing year 2025-26. Vietnam led all buyers by purchasing 132,500 bales, followed by Turkey in second place with 67,800 bales, while Pakistan ranked third by purchasing 36,000 bales. For the 2026-27 marketing year, total sales stood at 14,100 bales. Costa Rica topped the list with purchases of 13,200 bales, Indonesia came in second with 9,300 bales, and South Korea ranked third with 6,500 bales. On the export shipments front, a total of 342,700 bales were exported during the reported period. Vietnam remained the leading importer by receiving 126,200 bales, followed by China in second place with 39,000 bales. India ranked third with imports of 37,100 bales, while Pakistan came in fourth position by importing 32,900 bales. Despite regional tensions, Pakistanâ€™s textile exports registered a month-on-month increase in March 2026. According to sources, textile exports rose by 1.5 percent compared to February, reaching 1.35 billion dollars. However, on a year-on-year basis, textile exports recorded a decline of 6.25 percent in March. During the first nine months of the current fiscal year, textile exports witnessed a marginal decrease of 0.15 percent. Meanwhile, Chairman of the Pakistan Cotton Ginners Association (PCGA), Shaam Lal Manglani, participated in a Zoom meeting organized by the Ministry of National Food Security and Research, where key issues related to cotton were discussed with stakeholders. Manglani actively engaged in the discussion, highlighting the concerns of the ginning sector and proposing practical solutions. Expressing serious concern, the PCGA Chairman noted that despite surplus sugar production in the country, new sugar mills are still being established, particularly in Rahim Yar Khan, which is one of Pakistanâ€™s most important cotton belt regions. He described this as a direct blow to cotton cultivation and a grave threat to the national textile economy, stressing that such policies must be immediately halted in order to protect the cotton sector and safeguard the countryâ€™s economic interests. Kissan Ittehad Chairman Khalid Mahmood Khokhar also voiced his concern, stating that he wants to see the revival of cotton in the country, as the national economy cannot function without it. He lamented that while â€œWhite Poisonâ€ â€” referring to sugar â€” is being promoted, â€œWhite Gold,â€ which is cotton, is being systematically destroyed. Copyright Business Recorder, 2026

Date: 2026-04-13

Details: Recorder Report Published April 13, 2026 Updated about 2 hours ago HYDERABAD: Hyderabad SITE Association of Trade and Industry (HSATI) Chairman Zubair Ghangra has expressed strong reservations over the decision to suspend gas supply to industries across Sindh for 24 hours from April 12 to April 13, saying that this step has been taken at a time when industries are already forced to continue their production with limited gas pressure and uncertain supply. He said that when the industrial wheel is already being run with limited gas supply for six days a week, a complete shutdown for another 24 hours will prove to be the worst for industries, which is in no way tolerable. He said that due to this sudden shutdown, not only industrial production will be severely affected but also timely fulfilment of export orders will be at risk, which may damage Pakistanâ€™s reputation in the global market. Zubair Ghangra said that the livelihood of workers working in factories will also be directly affected while the increase in production costs will become another major challenge for industries. He stressed that gas shortage is a reality that cannot be denied, however, its solution should not be unilateral closure of industries but rather a comprehensive and balanced strategy must be adopted for it. Such measures may provide temporary relief, but in the long run, they paralyze industrial activities. He demanded that the government and relevant institutions issue a prior and workable gas schedule for industries, ensure gas supply to export industries on priority basis, avoid such decisions without consulting stakeholders, and take immediate steps to promote alternative energy sources such as LNG, RLNG and solar. Hyderabad SITE Association Chairman Zubair Ghangra demanded that this decision be reviewed immediately and steps be taken on an emergency basis to provide relief to industries so that the wheel of economic activities can continue uninterrupted. Copyright Business Recorder, 2026

Date: 2026-04-13

Details: BR Web Desk Published April 13, 2026 Updated about 19 hours ago Federal Minister for Commerce Jam Kamal Khan has directed authorities to prepare a proposal to reduce the general sales tax (GST) on dairy products from 18% to 10%, in a move that could provide significant tax relief and support to Pakistanâ€™s dairy sector. Jam Kamal chaired a meeting with a delegation of the Pakistan Dairy Association (PDA), led by CEO Dr Shehzad Amin. The meeting was also attended virtually by Rana Ihsaan Afzal, Coordinator to the Prime Minister on Commerce, along with senior officials from the Ministry of Commerce, according to an official statement on Monday. The discussion focused on the challenges facing Pakistanâ€™s dairy sector, particularly regarding tariff and taxation issues, as well as improving productivity, genetic quality, and the formalisation of the sector. Kamal emphasised that enhancing the genetic quality of dairy breeds and guiding farmers toward a formalised business model is critical for the sectorâ€™s development. He said that without proper genetic direction, farmers cannot achieve the desired milk yields and that structured support, regulation, and farmer education are essential to transform the sector. Milk producer Ghani Dairies plans to raise Rs2.5bn via IPO The association pointed out that the current GST on dairy products is 18%, while globally, and even in neighbouring countries, such products often enjoy zero or minimal taxation. In response, Jam Kamal asked the association to submit proposals for reducing the GST from 18% to 10% and asked Rana Ihsaan Afzal to take the lead in working closely with the association to prepare a comprehensive proposal. The minister also stated that he would write letters to the chief ministers and all relevant ministers to ensure coordination and support for implementing these proposals and improving the formalisation of the dairy sector across the country. The association presented additional proposals, including the provision of financial support and banking facilities for farmers, the implementation of regulatory measures to ensure only pasteurised or properly packaged milk is sold, and the initiation of pilot programs in major urban centres to transition farmers into formal business practices. They also highlighted the need for cross-breeding programs and farmer training to enhance genetic quality and improve overall milk production. Jam Kamal welcomed these proposals and stressed that a comprehensive plan should be prepared for timely implementation, ensuring that Pakistanâ€™s dairy sector achieves higher productivity, better regulatory compliance, and contributes more effectively to the countryâ€™s economy.

Date: 2026-04-13

Details: Written by Faisal Shahnawaz KARACHI, April 13, 2026 â€“ Pakistanâ€™s Federal Board of Revenue (Federal Board of Revenue) has issued revised customs valuation benchmarks for imported auto replacement parts, updating duty assessment values after more than five years to align with current global prices and market conditions. The Directorate General of Customs Valuation, Karachi, notified the changes through Valuation Ruling No. 2064/2026, replacing the earlier framework issued in 2020. The updated ruling will be used by customs authorities to determine duties and taxes on imported engine components and related spare parts. Related Article: FBR collects over Rs12 billion in capital value tax on vehicles and properties Officials said the revision was initiated after formal representations from industry stakeholders, including importers and automotive sector participants, who highlighted significant shifts in international pricing and supply chain dynamics. The FBR noted that the earlier valuation system had become outdated due to changing global trade conditions. A consultative session held on February 24, 2026 included representatives from the Pakistan Automobile Spare Parts Importers & Dealers Association and Indus Motor Company, who provided input on pricing structures, engine capacity segmentation, and market trends. These inputs were incorporated into the revised valuation methodology. Updated valuation methodology According to the ruling, auto parts pricing varies significantly based on engine capacity, product origin, and quality standards. To address inconsistencies, the FBR refined engine capacity categories to improve accuracy in customs assessments. Officials said traditional valuation methods, including transaction value and comparable goods benchmarks, could not be consistently applied due to incomplete import data and irregular pricing patterns. As a result, customs values were determined under Section 25(9) of the Customs Act, 1969, based on market inquiries and available international price data. The authority also noted that several components, including piston and ring sets, are typically imported as complete sets rather than individual units, which has been reflected in the updated valuation structure. Selected customs valuation benchmarks (C&F, US$) Part Type Engine Capacity China Japan Other Origins Piston Set (LTV) Up to 660cc 2.88 3.65 6.06 Piston Set (LTV) 1000â€“1300cc 4.25 5.39 8.94 Piston Set (LTV) Above 3500cc 10.63 13.50 20.26 Ring Set (LTV) Up to 660cc 0.60 0.69 0.90 Ring Set (LTV) 1300â€“1800cc 0.93 1.08 1.41 Gasket (per piece) Up to 660cc 0.35 0.53 0.64 Connecting Rod 1000â€“1300cc 5.90 9.07 10.91 Connecting Rod Above 3500cc 14.63 22.50 27.06 Officials said the updated valuation is intended to ensure uniformity in duty assessment and reduce disputes between importers and customs authorities. Market impact Industry participants said the revision is likely to improve transparency in customs valuation but may increase costs for certain imported auto parts, particularly for higher engine capacity vehicles. Pakistanâ€™s large stock of aging vehicles continues to drive strong demand for replacement components, making accurate valuation critical for revenue collection. The FBR said the new framework reflects long-term trends in import pricing and is designed to provide consistency across customs stations nationwide. All customs collectorates have been directed to strictly implement the revised valuation ruling. In cases where declared invoice values exceed benchmark customs values, the higher value will be used for duty assessment. Adjustments will also be made for air-freighted consignments to align them with sea freight pricing standards. The ruling will remain effective until further revision or withdrawal, providing a standardized benchmark for imported auto parts valuation across Pakistan.

Date: 2026-04-13

Details: Written by Shahnawaz Akhter ISLAMABAD, April 13, 2026 â€“ Pakistanâ€™s Federal Board of Revenue (Federal Board of Revenue) collected more than Rs12.55 billion in capital value tax (CVT) on motor vehicles and immovable properties during fiscal year 2024-25, reflecting an annual growth of around 8%, official data showed on Monday. The CVT collection rose from Rs11.85 billion in the previous fiscal year, driven mainly by higher revenue from motor vehicles and commercial property transactions, according to FBR figures. Breakdown of the data showed that CVT on motor vehicles increased to Rs7.26 billion in FY2024-25, compared with Rs6.98 billion in the preceding year, indicating steady growth in vehicle registrations and higher valuation-based taxation. Related Article: FBR reports 42% drop in tax collection from builders, developers Revenue from immovable properties, excluding commercial assets, also posted a modest increase, rising to Rs3.66 billion from Rs3.55 billion a year earlier. Officials attributed the rise to increased property transactions and improved compliance measures in the real estate sector. CVT from commercial immovable properties showed a stronger uptick, climbing to Rs908 million from Rs712 million in the previous fiscal year, reflecting heightened activity in business-related real estate transfers. However, CVT collection on residential flats declined to Rs115 million from Rs188 million, suggesting weaker activity in this segment or possible changes in transaction patterns during the year. Revenue from the purchase of shares and modaraba certificates also increased significantly to Rs609 million, compared with Rs423 million in the previous fiscal year, indicating stronger activity in capital market-linked instruments. Tax officials said the overall increase in CVT collection reflects ongoing efforts to broaden the tax base and improve documentation of high-value assets, particularly in the property and automobile sectors. The FBR has been focusing on tightening enforcement and improving digital monitoring systems to ensure accurate valuation and collection of taxes on capital assets. Analysts say continued reforms in property valuation and compliance mechanisms will be key to sustaining revenue growth in this segment. Despite structural challenges in the broader tax system, CVT revenues remain an important contributor to Pakistanâ€™s non-income tax collections.

Date: 2026-04-13

Details: Written by Shahnawaz Akhter ISLAMABAD, April 13, 2026 â€“Federal Board of Revenue (Federal Board of Revenue) has introduced a sweeping overhaul of job descriptions and key performance indicators (KPIs) for officers engaged in international taxation and exchange of information functions, aiming to strengthen transparency, efficiency and compliance with global tax standards. The revised framework, notified in Islamabad, applies to officers in grades BS-17 and above working under the Directorate General of International Tax Operations. It has taken immediate effect, replacing all previous performance benchmarks. A central feature of the new KPIs is a stronger focus on the Automatic Exchange of Information (AEOI) under the Common Reporting Standard (CRS), a global framework developed by the Organisation for Economic Co-operation and Development. The system enables jurisdictions to share financial account data to curb tax evasion and illicit financial flows. Under the updated metrics, officers will be assessed on their ability to ensure timely collection, analysis and transmission of financial data to partner jurisdictions, as well as effective utilization of incoming information by domestic tax offices. The FBR has also assigned greater weight to monitoring reporting financial institutions (RFIs), ensuring data accuracy and initiating enforcement actions against non-compliant entities. Officers will be required to use data analytics tools to identify high-risk cases and coordinate with field formations for follow-up. Performance evaluation now includes detailed benchmarks for handling Exchange of Information on Request (EOIR) and Spontaneous Exchange of Information (SEOI), covering both inbound and outbound information flows. This reflects Pakistanâ€™s increasing integration into the global tax transparency network. Beyond information exchange, the revised KPIs expand oversight of international taxation functions. These include negotiation and renegotiation of Avoidance of Double Taxation Agreements (ADTAs), participation in multilateral tax conventions and implementation of Country-by-Country Reporting (CbCR) standards for multinational enterprises. Officers will also be evaluated on transfer pricing audits, timely resolution of Mutual Agreement Procedure (MAP) cases and coordination with foreign tax authorities to resolve cross-border tax disputes. The new framework introduces stricter requirements for monthly performance reporting and policy input. Officials are expected to provide timely responses to parliamentary queries and contribute to tax policy formulation, while maintaining coordination with both domestic and international stakeholders. Tax officials said the reforms are part of a broader effort to modernize Pakistanâ€™s tax administration and align it with international best practices. By clearly defining roles and measurable outcomes, the FBR aims to improve accountability and enhance data-driven enforcement. Analysts say the move could strengthen Pakistanâ€™s standing in global tax transparency assessments and support efforts to curb tax evasion, while improving cooperation with international partners in tackling cross-border financial irregularities.

Date: 2026-04-12

Details: Written by Shahnawaz Akhter Pakistanâ€™s Federal Board of Revenue (FBR) reported a 42% decline in income tax collection from builders and developers during fiscal year 2025, reflecting weaker activity in the construction sector, according to official data. Total withholding income tax collected from builders and developers fell to Rs177 million in FY25, compared with Rs305 million in the previous year, the FBR said in its annual report. The tax is collected under Section 7 of the Income Tax Ordinance, 2001, which covers advance income tax on construction and development businesses. Breakdown of the data showed that collections under Section 7C, which applies to builders engaged in the sale of residential, commercial and other buildings, declined sharply to Rs44.64 million in FY25 from Rs82.61 million a year earlier. Similarly, revenue from Section 7D, applicable to developers involved in the sale of residential, commercial and other plots, dropped to Rs132.71 million from Rs222.55 million in the previous fiscal year. Tax officials attributed the decline to subdued activity in the construction sector, which has been under pressure from elevated input costs, including high prices of raw materials and overall economic slowdown. Industry stakeholders have also pointed to rising financing costs and reduced private-sector investment as key factors weighing on new housing and commercial projects, further dampening tax flows from the sector. The construction industry is considered a key driver of Pakistanâ€™s economic growth, with strong linkages to employment and allied industries such as cement, steel and services. Analysts say sustained weakness in the sector could have broader implications for economic recovery unless construction activity picks up through policy support, lower interest rates or improved business confidence. The FBR data highlights ongoing challenges in widening the tax base while maintaining growth in key revenue-generating sectors.

Date: 2026-04-12

Details: Written by Mrs. Anjum Shahnawaz Punjab Governor Sardar Saleem Haider Khan said on Sunday that additional tax relief for the real estate sector is expected in the upcoming budget as part of broader efforts to revive economic activity and support industrial growth. Speaking to a delegation from the Lahore Chamber of Commerce and Industry (LCCI) at Governor House, the governor said the government was implementing measures to address long-standing challenges faced by the real estate and industrial sectors. He stressed that sustainable economic growth depends on inclusive policymaking, noting that past policies often fell short due to a lack of consultation with key stakeholders. â€œDecisions must reflect ground realities to ensure long-term success,â€ he said. The governor praised the business community for continuing investments despite economic challenges, describing it as a sign of resilience and commitment to the country. He assured participants that the government remains committed to addressing their concerns and facilitating business-friendly policies. LCCI President Faheem Ur Rehman Saigol highlighted challenges faced by industries in key areas including Saggian, Ferozepur Road, Multan Road and Raiwind Road, where more than 1,400 industrial units operate. He said high commercialization fees and administrative hurdles were threatening the survival of these businesses and called for their formal recognition as industrial zones. Saigol also emphasised the importance of involving the private sector in policy decisions, particularly regarding industrial relocation plans. He said meaningful consultation with stakeholders is essential for effective implementation. Highlighting the role of real estate, he noted that the sector is linked to over 40 allied industries and plays a critical role in economic growth. He urged the government to introduce incentives to boost investment and restore momentum. The governor acknowledged the complexity of relocating industries from urban areas, calling for a gradual and consultative approach. He suggested providing alternative land, infrastructure and financial support to ensure a smooth transition. He added that recent improvements in the real estate sector indicate early signs of recovery, with further supportive measures expected to be announced in the upcoming budget.

Date: 2026-04-11

Details: Recorder Report Published April 11, 2026 Updated about 2 hours ago LAHORE: President Lahore Chamber of Commerce & Industry (LCCI) Faheem ur Rehman Saigol announced that Pakistan Chemical Forum Expo 2026 starting from 23 April will be a major milestone not only for the chemical industry but for the overall industrial sector of the country. He was speaking at a press conference held at LCCI. He said the chemical sector plays a key role in Pakistanâ€™s economy and its growth can increase exports, investment, and job opportunities. He shared that the three-day international exhibition will be held from April 23 to 25 at Expo Centre Lahore. More than 450 stalls will be set up, and hundreds of companies from Pakistan and around the world will participate. Around 350 international delegates are also expected to attend, showing strong interest in Pakistanâ€™s industrial potential. Senior Vice President Tanveer Ahmed Sheikh, Chairman B2B Media Moazzam Rasheed, Chairman Coating Association Iftikhar Bashir, Imran Salheri and others were also present at the event. Faheem ur Rehman Saigol said the exhibition will showcase a wide range of products including chemicals, raw materials, industrial plants, machinery, laboratory equipment, and finished goods. He added that industries from Karachi to Peshawar will actively participate, making the event more impactful. Speaking on the occasion, Moazzam Rasheed said that international exhibitors will present modern products and technologies, which will help develop the local industry. He added that the event will strengthen connections between the construction and chemical sectors and create new business opportunities. A key feature of the expo is that it will include four major sub-exhibitions: Pakistan Coating Show, PakChem Expo, Pakistan Polyurethane Expo, and PakLab Expo. These will cover coatings, paints, inks, petrochemicals, polyurethane products, and laboratory solutions. Faheem ur Rehman Saigol expressed hope that the expo will help increase exports, attract foreign investment, and improve Pakistanâ€™s industrial image globally. He said it is a great opportunity to show the world that Pakistan is not just a consumer market but also a strong manufacturing country. Copyright Business Recorder, 2026

Date: 2026-04-11

Details: Reuters Published April 11, 2026 Updated about 2 hours ago SHANGHAI: Stocks in mainland China and Hong Kong advanced on Friday, with the Shanghai benchmark snapping five straight weekly losses, underpinned by accelerating domestic inflation that signalled an end to entrenched industrial deflation. Chinaâ€™s factory-gate prices rose for the first time in more than three years in March, an early sign that the war in Iran is feeding cost pressures into the worldâ€™s second-largest economy. â€œThe Middle East conflict put an unexpected but earlier end to Chinaâ€™s industrial deflation in March, despite an overall mixed picture,â€ Citi analysts said in a note. At the close, the benchmark Shanghai Composite index rose 0.51 percent and the blue-chip CSI300 Index jumped 1.54 percent. For the week, the SSEC gained 2.74 percent to book the first weekly rise in six, while the CSI300 rose 4.41 percent to snap three straight weeks of declines. Hong Kongâ€™s benchmark Hang Seng Index advanced 0.55 percent, while tech shares climbed 0.8 percent. â€œThe easing of deflationary risk should give policymakers a temporary opportunity to advance the already-planned reform agenda,â€ said Zhaopeng Xing, senior China strategist at ANZ. â€œTo mitigate the risk, the anti-involution push remains essential in the near term, in our view. Regulatory tightening will likely resume once the external headwinds subside,â€ Xing said, noting that domestic demand remained weak. Brokerage shares led the gains as the upbeat inflation data lifted market sentiment, with a sub-index tracking the industry leaping 3.60 percent. Middle East tensions remained one of the biggest market focuses. A fragile US-Iran ceasefire showed further strain on Friday, a day before they are to negotiate in Pakistan. Washington accused Tehran of breaching promises on the Strait of Hormuz and Israel struck Lebanon with attacks that Iran has claimed violate the truce. Car exports, an increasingly important source of growth for Chinaâ€™s hyper-competitive auto sector, picked up pace in March despite shipment disruptions from the Middle East crisis. Separately, market participants said they look to Chinaâ€™s first-quarter gross domestic product and a string of activity indicators next week for more clues on economic health.

Date: 2026-04-11

Details: Reuters Published April 11, 2026 Updated about 2 hours ago NEW YORK: The S&P 500 and the Nasdaq edged higher on Friday, boosted by surging chip stocks after March inflation data met expectations despite ongoing pressures from the war in the Middle East, while investors monitored the uneasy truce between the US and Iran. Tehran said a ceasefire in Lebanon was a prerequisite for peace talks to proceed, casting doubt over the first round of discussions with Washington, scheduled for Saturday. Investors were cautiously optimistic a peace agreement could be reached, despite the two-week ceasefire showing cracks as each side accuses the other of violations. â€œPeople are maybe positioning. They know that itâ€™s not a done deal; they want to see it get done and then youâ€™re going to see the market really rally,â€ said Eric Schiffer, chairman of The Patriarch Organization, a Los Angeles-based family office. The two-week US-Iran truce, and comments from Israeli Prime Minister Benjamin Netanyahu that he was seeking direct talks with Beirut, largely buoyed market sentiment this week. The S&P 500 and the Nasdaq were on track for their biggest weekly jumps since May, and the Dow was set for its sharpest rise since June. At 11:45 a.m. ET, the Dow Jones Industrial Average fell 187.76 points, or 0.39 percent, to 47,998.04, the S&P 500 gained 3.60 points, or 0.05 percent, to 6,828.26 and the Nasdaq Composite rose 106.45 points, or 0.47 percent, to 22,928.87. The S&P 500 information technology index was the biggest boost to the index, rising 1 percent, with chipmakers taking the lead. Nvidia and Broadcom rose 2.7 percent and 5.7 percent, respectively, and the Philadelphia SE Semiconductor index hit a record high of 8,926.95. â€œOne thing we know is, businesses will continue to be buying chips at mass rates, so any AI hardware remains the main trade today,â€ Schiffer said. However, weakness in financial stocks, which were down 1.2 percent, capped gains on the benchmark index. Declines in Goldman Sachs and Travelers dragged on the Dow. In economic data, US consumer prices increased the most in nearly four years in March as the war boosted oil prices and tariff effects persisted. Traders stuck to bets that the US Federal Reserve would hold borrowing costs steady this year, according to data compiled by LSEG, pulling back from an expectation of two rate cuts this year before the conflict began.

Date: 2026-04-10

Details: Sohail Sarfraz Published April 10, 2026 Updated 3 minutes ago ISLAMABAD: Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to immediately decide a taxpayerâ€™s pending income tax refund claim for Tax Year 2023 and ensure that no coercive recovery of tax demand is initiated before disposal of pending refund claims or adjustment requests. The directions were issued on a complaint regarding non-adjustment of pending income tax refunds of previous tax years against tax liability for Tax Year 2025.According to the complaint, the taxpayer had approached the tax department well within time for adjustment of refund claims relating to Tax Years 2017, 2018, 2019, 2020 and 2023, but the matter remained unattended due to departmental delay and inaction, forcing the taxpayer to seek relief from the Ombudsman. After examining the case, the FTO observed that refund claims for Tax Years 2017 to 2020 had not yet attained finality, as their admissibility would be determined only after implementation of the relevant appellate orders. However, in respect of Tax Year 2023, the Ombudsman noted that the taxpayer had filed a refund application amounting to Rs44.673 million, which the department was legally required to decide within the prescribed time. Despite this statutory obligation, the department failed to dispose of the claim. The Ombudsman further observed that when the taxpayer subsequently requested adjustment of the claimed refund against tax liability for Tax Year 2025, the department again failed to act. It was only after issuance of notices by the FTO Secretariat that the concerned tax office moved and initiated proceedings on the refund application. In its findings, the FTO noted that while the department often demonstrates â€œphenomenal quicknessâ€ in adjusting refunds against tax demands raised by itself, the same legal facility is frequently denied to taxpayers despite repeated requests. The Ombudsman held that such conduct amounted to arbitrary treatment, delay and maladministration within the meaning of the FTO Ordinance, 2000. The FTO has, therefore, recommended that RTO Islamabad immediately dispose of the pending refund claim for Tax Year 2023 strictly in accordance with law. The Ombudsman has also directed Member Inland Revenue (Operations) to issue instructions to all field formations that coercive recovery of tax demand should only be initiated after disposal of pending refund claims and adjustment requests. The FBR has further been directed to submit a compliance report within 60 days. Copyright Business Recorder, 2026

Date: 2026-04-10

Details: Reuters Published April 10, 2026 Updated about an hour ago FRANKFURT: European shares retreated on Thursday, after their strongest rally in over four years, as investors remained wary about a fragile US-Iran ceasefire and its implications for oil prices and global inflation. The pan-European STOXX 600 index was down 0.2 percent at 612.59 points, after paring earlier losses following reports Israel and Lebanon could start direct negotiations soon. Major regional bourses were also lower, with Germanyâ€™s DAX down 1.1 percent, while Franceâ€™s CAC 40 fell 0.2 percent. European markets rallied on Wednesday after US President Donald Trump agreed to a two-week ceasefire, sparking optimism that oil and gas shipments through the crucial Strait of Hormuz might resume operations. However, Israel continued military operations in Lebanon on Wednesday while Tehran did not lift its near-total blockade of the Strait leading to renewed concerns over the economic impact of the conflict. â€œ(Yesterdayâ€™s) rebound was very overdone given the fact that it is still just the two-week ceasefire and today obviously there is concerns over the durability of that ceasefire and the key focus for the market remains the Strait of Hormuz,â€ said Fiona Cincotta, senior market analyst at City Index. â€œWith or without a ceasefire, if the Strait remains closed, the economic impact of the conflict remains â€¦ weâ€™re seeing the market price in this caution.â€ European markets have been under pressure since February when the conflict began, given the continentâ€™s heavy reliance on oil imports and vulnerability to an energy shock. The industrial sector weighed the most, down 0.5 percent. Germanyâ€™s Siemens dropped 2.1 percent while Airbus fell 2.5 percent. Travel, banks and technology stocks all traded in the red, after logging strong gains in the previous session. Software and IT stocks came under pressure tracking their Wall Street peers. German software maker SAP dropped 6.8 percent, hitting its lowest level since January 2024.

Date: 2026-04-10

Details: Reuters Published April 10, 2026 Updated about an hour ago NEW YORK: Wall Streetâ€™s main indexes gained broadly across sectors on Thursday as investors assessed developments in the Middle East conflict that improved risk appetite. Israeli Prime Minister Benjamin Netanyahu said he has instructed Israel to begin peace talks with Lebanon that would also include the disarming of Hezbollah. The comments follow Iranâ€™s warning that no peace deal could be reached unless Israel ceased bombings on Lebanon, putting President Donald Trumpâ€™s fragile two-week ceasefire with Iran into jeopardy. Following the news, oil prices slipped by more than USD4 a barrel, after gaining earlier in the session, with the S&P 500 energy index down 1.2 percent â€œThe truce may have bought some time, but it does not fully remove the risk of renewed escalation,â€ said analysts led by Dr. Murat Ulgen, global head of macro strategy at HSBC. â€œIf the ceasefire breaks down, markets would quickly have to reprice back towards a more persistent supply shock, especially if renewed disruption keeps the Strait of Hormuz effectively closed,â€ said Ulgen. At 12:40 p.m. ET, the Dow Jones Industrial Average rose 247.66 points, or 0.52 percent, to 48,155.97, the S&P 500 gained 33.67 points, or 0.50 percent, to 6,816.48 and the Nasdaq Composite gained 134.55 points, or 0.60 percent, to 22,770.06. Consumer discretionary stocks led broader gains on the S&P 500, supported by a 4.3 percent gain in Amazon.com after its CEO said AI services at its cloud-computing unit were generating annualized revenue of over USD15 billion. Technology stocks on the S&P 500 pared declines to trade flat. Software stocks, however, were still under pressure with the iShares Expanded Tech-Software ETF down 4.2 percent. â€œThe Iran conflict happened and software stocks didnâ€™t sell off as much as othersâ€¦ maybe thereâ€™s just some profit-taking and repositioning in those names,â€ said Dustin Thackeray, partner and head of portfolio management at Crewe Advisors.

Date: 2026-04-10

Details: Recorder Report Published April 10, 2026 Updated 14 minutes ago KARACHI: A significant development has been made under the chairmanship of Sindh Home Minister Zia-ul-Hassan Lanjar regarding the resolution of public complaints and issues faced by the business community in Karachi. The fourth meeting of the committee established to combat encroachments and land grabbing was held. During the meeting, 21 cases related to land grabbing and land restitution were reviewed point by point, and necessary instructions were issued. The meeting was informed that 6 out of the 21 cases have already been resolved. The meeting also conducted a detailed review of ongoing actions against encroachments and illegal land occupation, while various proposals were considered to address the issues faced by the business community. The Sindh Home Minister Zia-ul-Hassan Lanjar directed that operations against land mafias involved in complaints across the city should be further accelerated, and effective, indiscriminate action against encroachers must be ensured at all levels. He instructed the Commissioner Karachi to ensure that written complaints are addressed without any delay and reviewed immediately. Furthermore, clear tasking should be assigned for the elimination of illegal occupation on both public and private lands, and law enforcement agencies should be further activated. The Sindh Home Minister Zia-ul-Hassan Lanjar emphasized that operations against land grabbing and encroachment mafias, transparency in land restitution, accountability, and institutional coordination must be ensured at all costs. He added that an effective mechanism is essential for the prompt redressal of citizensâ€™ complaints, and a clear course of action should be devised for implementing the decisions of the meeting. The Commissioner Karachi, while briefing the meeting, stated that ongoing operations against land mafias are being continuously monitored, and regular meetings are being held in this regard. He added that all district administrations have become more active in anti-encroachment drives and that the protection of government land across the city will be ensured at all costs. Relevant officers have been directed that no negligence will be tolerated in removing illegal occupations. IGP Sindh Javed Aalam Odho stated that police actions against land mafias and encroachment groups are being further strengthened. All field officers have been directed to ensure indiscriminate legal action against such elements. He further said that coordination between police and district administration will be enhanced, and close liaison is being maintained among the police, Commissioner Karachi, and the business community. The meeting was attended by Commissioner Karachi, Secretary Home Sindh Iqbal Memon, IGP Sindh, representatives of the Anti-Corruption Establishment and Home Department, members of the business community, Chairman ABAD, President KCCI, members of FPCCIâ€™s Anti-Corruption Committee, and other senior officials. The business community expressed satisfaction over the convening of the meeting and its objectives, stating that the timely response to their issues and complaints, along with police support, is commendable. Copyright Business Recorder, 2026

Date: 2026-04-10

Details: Written by Shahnawaz Akhter KARACHI, April 10 â€“ Karachi accounted for 45% of Pakistanâ€™s total direct tax collection in fiscal year 2024-25, underscoring the cityâ€™s central role in the countryâ€™s revenue generation, according to the annual report released by the Federal Board of Revenue. The report showed that Inland Revenue field offices in Karachi collectively collected Rs2.54 trillion in direct taxes during FY25, compared with the national total of Rs5.71 trillion. The share marks an increase from 43.73% recorded in the previous fiscal year, reflecting improved tax compliance and economic activity in the countryâ€™s financial hub. Karachi hosts five major Inland Revenue offices, including the Large Taxpayers Office (LTO), Medium Taxpayers Office (MTO), Corporate Tax Office (CTO), Regional Tax Office (RTO)-I and RTO-II. All offices reported notable growth in collections during the fiscal year. The LTO Karachi remained the largest contributor, collecting Rs1.8 trillion in FY25, up from Rs1.39 trillion a year earlier. The MTO Karachi collected Rs140 billion, compared with Rs110 billion in FY24, while the CTO Karachi recorded Rs159 billion, rising from Rs129 billion. Similarly, RTO-I Karachi collected Rs140 billion, up from Rs119 billion, and RTO-II Karachi posted Rs305 billion, compared with Rs233 billion in the previous fiscal year. Analysts said the increase in Karachiâ€™s share reflects both the concentration of large taxpayers in the city and enhanced enforcement measures by tax authorities. The growth also indicates a gradual recovery in business activity, particularly in key sectors such as banking, manufacturing and services. The FBR has been focusing on broadening the tax base and improving compliance to meet revenue targets, with Karachi continuing to play a pivotal role in achieving these objectives. Direct Tax Collection by Karachi Offices (Rs in Billion) IR Office 2024-25 2023-24 LTO Karachi 1,800 1,390 MTO Karachi 140 110 CTO Karachi 159 129 RTO-I Karachi 140 119 RTO-II Karachi 305 233

Date: 2026-04-10

Details: â€¢ The RBI wants lenders to start sharing data on at least 70% of such derivative transactions Reuters Published April 10, 2026 Updated about 15 hours ago MUMBAI: India plans to move ahead with a proposal mandating that banks report offshore rupee derivative trades despite objections from lenders, two sources familiar with the matter said, in an attempt to bring transparency to a market that has amplified pressure on the currency. In February, the Reserve Bank of India proposed that banks report rupee foreign exchange derivative transactions undertaken globally by their related parties, arguing it would support more efficient price discovery. The RBI wants lenders to start sharing data on at least 70% of such derivative transactions, starting February 2027. Domestic banks are already required to report all derivative transactions, including by their overseas offices. Foreign lenders currently only report derivatives traded by their India units and not those executed by offshore ones. The RBI proposal is aimed at levelling the playing field between Indian and foreign banks, the first source familiar with the central bankâ€™s thinking said. India central bank opens up term money market for non-banks, companies to boost liquidity â€œThere was no clarity on what these NDF trades were, making the RBIâ€™s task (of managing the rupee) complicated,â€ the person said. Both the sources requested anonymity since they are not authorised to speak to the media. The RBI did not immediately respond to an email seeking comment. Offshore market The large offshore forward market has a significant sway over the rupeeâ€™s exchange rate, an influence that has heightened since the RBI opened the market to Indian banks and companies. Data from the Bank for International Settlements showed that cross-border trades involving the Indian rupee amounted to about $60 billion, or roughly two-thirds of total turnover in the outright forward market, in April 2025. Indiaâ€™s central bank recently clamped down on trades that sought to benefit from the pricing difference between the NDF and local forwards market. The size of these positions was estimated to be around $40 billion. Such trades by banks were adding to FX market volatility, RBI Governor Sanjay Malhotra said on Wednesday. The unwinding of the trades has helped lift the rupee to near 92.50 per dollar from an all-time low of near 95. Push-back from banks Foreign banks have pushed back against the RBIâ€™s proposal, citing concerns that sharing of the data could breach rules in jurisdictions where the trades take place, according to two senior treasury officials directly aware of the matter. The claim that reporting requirements are â€œextra-territorialâ€ does not stand, the second source said, adding that banks licensed to operate in India cannot treat reporting requirements on rupee transactions as outside the central bankâ€™s jurisdiction. If the RBI presses ahead with the proposal, its implementation could prove challenging, the treasury officials said. Reporting transactions carried out in other countries would need coordination with other central banks, which could be difficult, one of them said. The treasury officials declined to be identified since they are not authorised to speak to the media.

Date: 2026-04-09

Details: Written by Shahnawaz Akhter Karachi, April 9, 2026 â€“ The Regional Tax Office (RTO) II Karachi, operating under the Federal Board of Revenue (FBR), has recorded a significant increase in salary-based withholding tax collection, reaching Rs154 billion during the fiscal year 2024â€“25. This marks a strong 44% growth compared to the Rs107 billion collected in the previous fiscal year, highlighting improved tax compliance and expanded revenue efforts. The collection under this category is governed by Section 149 of the Income Tax Ordinance, 2001, which requires employers to deduct tax from employee salaries at source. The steady rise in collections reflects both administrative improvements and a broader tax net within Karachiâ€™s large and diverse workforce. A breakdown of the figures shows that federal government employees contributed Rs13.85 billion in withholding tax, compared to Rs9.85 billion in the prior year, representing a 40% increase. Meanwhile, withholding tax collected from Sindh government employees under RTO-II jurisdiction rose sharply by 65%, reaching Rs9.52 billion, up from Rs5.78 billion last year. The private sector remained the largest contributor to salary income tax, with employees paying Rs131 billion during the fiscal year. This represents a substantial 43% increase compared to Rs91.47 billion collected in the previous year, underscoring growing compliance among private sector employees and enhanced monitoring by tax authorities. Officials attribute the overall increase to stricter enforcement measures, improved documentation, and increased awareness among taxpayers. The use of digital systems and data integration has also played a crucial role in tracking income sources and ensuring accurate tax deductions. Tax experts suggest that continued reforms and automation within the FBR could further enhance revenue collection in the coming years, supporting Pakistanâ€™s fiscal stability and reducing reliance on indirect taxation.

Date: 2026-04-09

Details: Reuters Published April 9, 2026 Updated about 2 hours ago NEW DELHI: South Asiaâ€™s growth is expected to slow to 6.3 percent in 2026 from 7.0 percent in 2025 as the conflict in the Middle-East and disruptions in global energy markets weigh on the import-dependent region, the World Bank said on Wednesday. In its latest South Asia Economic Update, the bank said growth should recover to 6.9 percent in 2027, while the region would remain the fastest growing among emerging market and developing economies. The World Bank said the outlook was highly uncertain because South Asia depends heavily on imported energy and is vulnerable to spillovers from the Middle East conflict. It warned that further energy market dislocation could raise inflation, force monetary tightening and weaken remittance flows. World Bank President Ajay Banga said on Tuesday the war in the Middle East would lead to slower global growth and higher inflation, regardless of how quickly it ended. The World Bank said India is expected to remain the main driver of regional growth, with output projected at 7.6 percent in fiscal 2025/26 before easing to 6.6 percent in 2026/27. It had forecast growth for the current financial year at 6.3 percent in October 2025. â€œDespite a challenging global environment, South Asiaâ€™s growth prospects remain strong,â€ said Johannes Zutt, World Bank Vice President for South Asia, adding countries needed reforms to sustain growth, create jobs and raise resilience to shocks. The lender said Bangladesh is forecast to grow 3.9 percent in fiscal 2025/26 as it recovers from political unrest, while Bhutan is seen expanding 7.1 percent on the back of hydropower projects. Sri Lanka is projected to grow 3.6% in 2026, slowing from 5.0 percent in 2025, as higher energy prices weigh on activity, while the Maldives is expected to slow sharply to 0.7 percent as tourism, fuel costs and financing conditions come under pressure. Nepal is forecast to grow 2.3 percent in fiscal 2025/26, with a rebound later as the effects of unrest fade. Pakistan and Afghanistan will be separately covered in the World Bankâ€™s Middle East and North Africa update.

Date: 2026-04-09

Details: Written by Shahnawaz Akhter Karachi, April 9, 2026 â€” The Federal Board of Revenue (FBR) has reported that Pakistan Customs collected over Rs200 billion in regulatory duty during the fiscal year 2024-25, reflecting steady growth in import-related revenues despite mixed trends across different sectors. According to the FBRâ€™s annual report, regulatory duty collection increased by 12% to reach Rs202 billion, compared to Rs180 billion in the previous fiscal year. This growth highlights improved enforcement measures and increased import activity in key sectors. Import duty, which forms the largest component of customs revenue, surged by 18% to Rs1.07 trillion in FY25, up from Rs905 billion in the preceding year. It accounted for 82.6% of total gross import duties, underscoring its critical role in overall revenue generation. Meanwhile, warehouse surcharge collection witnessed a sharp decline of 60%, falling to Rs400 million from Rs1 billion. Other collections at the import stage also dropped by 7% to Rs23.63 billion, compared to Rs25.39 billion last year. Overall, total duty collection at the import stage rose by 16.5%, reaching Rs1.26 trillion in FY25, compared to Rs1.11 trillion in the previous fiscal year. Customs revenue remained concentrated among 15 major revenue-generating sectors, which collectively contributed 73.7% of total collections, showing a growth of 14.9%. A notable factor affecting overall revenue was the significant 46.8% decline in dutiable imports of petroleum, oil, and lubricants (POL), leading to a 9.1% drop in customs duty collection from this segment. Despite this decline, POL products remained the largest revenue contributor, accounting for 22.7% of total customs duty. The vehicle sector (Chapter 87) emerged as the second-largest contributor, representing 13.4% of total collections. This segment recorded a strong growth of 41.1%, driven by a 42.4% increase in dutiable vehicle imports. Other key sectors also showed positive performance. Collections from mechanical machinery (Chapter 84) rose by 43.5%, while electrical machinery (Chapter 85) increased by 34.1%. Artificial filaments (Chapter 54) also posted a 31% growth, supported by corresponding increases in import volumes. Overall, the data reflects a dynamic customs revenue landscape shaped by shifting import patterns, sectoral growth, and evolving economic conditions in Pakistan.

Date: 2026-04-09

Details: Written by Shahnawaz Akhter Karachi, April 9, 2026 â€” The Sindh Revenue Board (SRB) has announced the winner of a 1300cc car as part of its third computerized prize ballot draw, aimed at promoting tax compliance through verified Point of Sale (POS) invoices. The prize draw, held on April 9, 2026, in Karachi, included a total of 76 prizes ranging from a 1300cc car to motorcycles, televisions, refrigerators, tablets, mobile phones, smart watches, and cash rewards. The event was attended by tax consultants, advisors, and media representatives, ensuring transparency in the selection process. A total of 90,937 verified invoices were included in the third draw, marking a significant increase compared to 3,260 and 8,734 invoices in the first and second draws, respectively. SRB officials highlighted that the growing participation reflects increasing public engagement with the initiative. SRB Chairman Dr. Wasif Ali Memon presented a detailed briefing on the prize scheme, emphasizing its role in strengthening transparency and encouraging tax compliance among consumers and businesses. The authority has integrated POS systems of retail businesses, including restaurants and service providers, with its computerized platform. This system allows real-time reporting of invoices and enables customers to verify the authenticity of their receipts by scanning QR codes or entering invoice details through the SRB mobile application or official website. Invoices that are successfully verified are automatically entered into the computerized prize draw, offering consumers a direct incentive to demand proper billing. Officials stated that the initiative not only helps verify tax payments but also contributes to increasing overall tax revenue. By encouraging customers to request and verify POS invoices, SRB aims to create a culture of transparency and accountability in retail transactions. With the success of the program, SRB expects broader adoption of POS-integrated invoicing, ultimately supporting tax growth and improving compliance across Sindhâ€™s retail sector.

Date: 2026-04-08

Details: Reuters Published April 8, 2026 Updated about an hour ago NEW YORK: Wall Streetâ€™s main indexes fell on Tuesday as investors scrutinized developments for clues on what might come next in the Middle East conflict, before President Donald Trumpâ€™s deadline for Iran to reopen the Strait of Hormuz. Trump threatened that â€œa whole civilization will die tonightâ€ as Iran showed no sign of accepting his ultimatum to open the Strait of Hormuz by Tuesday evening, Washington time. The Wall Street Journal reported that Iran had cut off direct diplomacy with the US, but state-run newspaper Tehran Times said on X that channels of talks were not closed. A US official told REUTERS that the country had struck military targets on Iranâ€™s Kharg Island, a hub of Iranâ€™s oil exports, in signs that the conflict would not end swiftly. â€œConsidering the rhetoric thatâ€™s coming from President Trump, the markets are nervous but theyâ€™re not collapsing â€¦ weâ€™re not seeing any signs of panic,â€ said Peter Cardillo, chief market economist at Spartan Capital Securities. â€œItâ€™s a question â€¦ markets are waiting to see what the final result of Trumpâ€™s threats will be.â€ Tech stocks weighed heavily, with the S&P 500 information technology index down 1.4percent. Apple lost 4.2percent after a report said its foldable phone has been encountering setbacks in its engineering test phase, which could lead to production delays. The stock was the biggest drag on all three indexes. A 3.7percent gain in Broadcom after the chipmaker signed a long-term deal with Alphabetâ€™s Google to develop its AI chips and other components helped limit declines. On the flip side, energy stocks on the S&P 500 added 1percent. At 11:48 a.m. ET, the Dow Jones Industrial Average fell 428.65 points, or 0.92percent, to 46,241.23, the S&P 500 lost 60.97 points, or 0.92percent, to 6,550.76 and the Nasdaq Composite lost 274.02 points, or 1.25percent, to 21,722.32. Meanwhile, UnitedHealth jumped 8.8percent and peers Humana and CVS Health added 6.5percent and 6.7percent, respectively, after the US said on Monday it would raise payments to private insurers offering Medicare Advantage plans to older adults, an increase from the near-flat change proposed earlier. Wall Streetâ€™s main indexes closed higher on Monday, marking the fourth consecutive session of gains for the S&P 500 and the Nasdaq, as investors digested the Middle East developments and positioned for the upcoming quarterly earnings season. This week, markets will scrutinize some inflation readings to see if the elevated crude prices stemming from the conflict have impacted price pressures in the economy.

Date: 2026-04-08

Details: Reuters Published April 8, 2026 Updated about an hour ago FRANKFURT: European shares retreated on Tuesday, led by declines in defence and healthcare stocks, as investors turned cautious ahead of US President Donald Trumpâ€™s deadline for Iran to reopen the Strait of Hormuz. Oil prices edged up past USD110 per barrel with both US and Tehran showing no signs of reaching an agreement, while strikes on Iran intensified. The STOXX 600 index ended down 1percent at 590.59, giving up earlier gains. Trading resumed after Europeâ€™s extended Easter weekend, which included the Good Friday and Easter Monday holidays. Most regional bourses also traded in negative territory, with Germanyâ€™s DAX falling 1percent, while Britainâ€™s FTSE 100 was off 0.8percent. â€œThe situation has evolved into a near-term binary outcome: either escalation through direct strikes on Iranian infrastructure, or a last-minute de-escalation that could trigger a sharp reversal in risk assets,â€ said Daniela Hathorn, senior market analyst at Capital.com. â€œFor now, the absence of a clear path forward is keeping markets volatile and indecisive.â€ The US-Israeli war with Iran has rattled global markets and sent oil prices soaring, with the STOXX 600 declining more than 5percent since the conflict began over a month ago. Tehranâ€™s effective closure of the strait has stoked inflation concerns and shifted monetary policy expectations. Despite hopes for a diplomatic breakthrough, negotiations have so far failed to yield progress. Trump has imposed a deadline of 8 p.m. ET Tuesday (0000 GMT Wednesday) for a deal to be reached. Among sectors, aerospace and defence dropped 2.4percent with Italyâ€™s Leonardo falling 8percent after sources told Reuters CEO Roberto Cingolani could be replaced. Britainâ€™s Rolls-Royce and Germanyâ€™s Rheinmetall lost 3.9percent and 2.5percent, respectively. Healthcare fell 2.1percent with Novo Nordisk and AstraZeneca off 0.8percent and 2.3percent, respectively. Information technology stocks lagged, with semiconductor equipment leader ASML falling 4.1percent, after a cross-party group of US politicians proposed a law to impose further restrictions on exports of computer chipmaking equipment to China. Media shares were a bright spot, gaining 3.7percent as Universal Music Group soared 11.4 percent after Pershing Square proposed a cash-and-stock takeover valued at about 55.75 billion euros (USD64.31 billion). On the monetary policy front, ECB policymaker Dimitar Radev warned that inflation expectations could rise faster than in the past and said the central bank must be prepared to raise rates swiftly if price pressures persist.

Date: 2026-04-08

Details: Written by Shahnawaz Akhter Islamabad â€” The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to ensure that coercive income tax recovery measures are only initiated after the adjustment or resolution of taxpayersâ€™ pending refund claims. In a significant ruling issued on Wednesday, the FTO instructed the Member Inland Revenue (Operations) to circulate clear directives to all field formations, emphasizing that tax recovery proceedings must not begin until refund claims and adjustment requests are properly addressed. The directive was issued in response to a complaint filed by a taxpayer regarding delays in the adjustment of income tax refunds from previous years against liabilities for Tax Year 2025. According to the complaint, the taxpayer had applied within the stipulated timeframe for adjustment of refunds related to Tax Years 2017, 2018, 2019, 2020, and 2023. However, due to administrative delays and inaction, the matter remained unresolved, forcing the taxpayer to seek intervention from the Ombudsman. Upon reviewing the case, the FTO noted that refund claims for Tax Years 2017 to 2020 were still pending final determination, as their admissibility depended on the implementation of relevant appellate orders. However, the situation for Tax Year 2023 was more concerning. The taxpayer had filed a refund claim amounting to Rs44.673 million, which the department was legally obligated to process within a prescribed timeframe but failed to do so. The Ombudsman further observed that when the taxpayer later requested adjustment of the pending refund against tax liability for 2025, the FBR again did not take timely action. It was only after formal notices were issued by the FTO Secretariat that the concerned tax office initiated proceedings on the refund application. In its findings, the FTO criticized the tax authorityâ€™s inconsistent approach, noting that while the department often acts swiftly in adjusting refunds against its own tax demands, it frequently delays or denies similar relief to taxpayers. The Ombudsman termed this behavior as arbitrary and a clear case of maladministration under the FTO Ordinance, 2000. As part of its recommendations, the FTO directed the Regional Tax Office (RTO) Islamabad to immediately process and decide the pending refund claim for Tax Year 2023 strictly in accordance with the law. The FBR has also been instructed to submit a compliance report within 60 days, reinforcing accountability and ensuring timely resolution of taxpayer grievances.

Date: 2026-04-08

Details: â€¢ Forex reserves rose to $697.1 billion as of April 3 Reuters Published April 8, 2026 Updated about 15 hours ago MUMBAI: Indiaâ€™s foreign exchange reserves are sufficient and not a matter of concern, Reserve Bank of India Governor Sanjay Malhotra said on Wednesday, amid concerns that large capital market outflows could erode the central bankâ€™s dollar holdings. Forex reserves rose to $697.1 billion as of April 3, per the latest data, from $688.06 billion in the previous week. The reserves have declined from a record high of $728.49 billion in late February, primarily due to central bank forex intervention to shield the rupee from pressures stemming from the Middle East war. Lower gold prices have also eroded the value of reserves. The reserves are sufficient for at least 11 months, which is a â€œstandard metricâ€, Malhotra said. Indiaâ€™s FX reserves fall below $700 billion for the first time in over two months Trade agreements to help current, capital accounts Indiaâ€™s trade agreements with major economies including the UK should help improve its current and capital accounts and reduce its balance of payments deficit, Malhotra said. The current account deficit for the Asian economy widened to $13.2 billion, or 1.3% of GDP, in the October-to-December quarter on the back of a higher goods trade deficit, compared with $11.3 billion, or 1.1% of GDP, a year earlier. Indiaâ€™s balance of payments recorded a deficit of $24.4 billion in that quarter, compared with a deficit of $37.7 billion a year earlier. â€œThe capital accounts are robust and current account is quite manageable so not concerned about the BoP position,â€ Malhotra said. â€œA lot of (trade) agreements with major economies that have come in placeâ€¦All of this should help.â€ Banks ask Indiaâ€™s RBI for 3 months to comply with FX position caps, sources say India should see foreign portfolio investment flows improve this year, helped by investments in technology and financial services sector, the governor said, after a record selloff by foreign portfolio investors in the financial year 2025-26. Macroeconomic fundamentals of the country are strong, Malhotra said. â€œâ€¦those who want to make long-term money will certainly come to India, and those who are in for a quick buck, will come and go.â€

Date: 2026-04-07

Details: Reuters Published April 7, 2026 Updated about 5 hours ago BENGALURU: Emerging Asian stock markets were mixed in thin holiday trading on Monday as investors digested a wave of conflicting headlines around the war in the Middle East that has clouded inflation and economic outlooks. The MSCI gauge of EM Asia equities edged higher, largely driven by a gain of more than 1 percent for South Koreaâ€™s benchmark KOSPI index. Investor sentiment continues to be whipsawed by US President Donald Trumpâ€™s threats to rain â€œhellâ€ on Tehran if it does not make a deal and reopen the Strait of Hormuz by a Tuesday deadline, even as an Axios report suggested that discussions on terms of a potential 45-day ceasefire were underway. â€œI would think that after Trumpâ€™s weekend rhetoric, markets seem reluctant to price much more than cautious hope until there is something concrete,â€ said Charu Chanana, chief investment strategist at Saxo in Singapore. â€œInvestors have seen a lot of headline swings in this conflict and this still looks more like a last-ditch diplomatic effort than a deal. It may cap some of the immediate panic, but it is probably not enough on its own to unwind the broader risk premium.â€ In Indonesia, the Jakarta Composite Index slipped as much as 1.3 percent to its lowest level in three weeks, while the currency sank to an all-time low of 17,045 per US dollar. Indonesia was already grappling with investor concerns over its fiscal deficit, central bank autonomy, and a weak currency, before rising oil prices posed fresh problems for the import-dependent country. While commodity prices may boost revenue, a limited fiscal space raises the risk of spending cuts or fuel price adjustments that could hurt growth, MUFG analysts said in a note. â€œWhile BIâ€™s (Bank Indonesia) proactive FX measures should help contain USD-IDR (pair) upside, a severe external shock, such as a sharp repricing in US yields or a deeper global risk-off episode, could still trigger further rupiah weakness,â€ they said. Indonesiaâ€™s budget deficit widened to 0.93 percent of gross domestic product in the first quarter of 2026, yet the finance minister insisted subsidised fuel prices can be maintained. With the Iran war now in its sixth week, Asian investors are turning to this weekâ€™s inflation numbers to gauge how badly prices have been shaken.

Date: 2026-04-07

Details: Recorder Report Published April 7, 2026 Updated about 6 hours ago KARACHI: Pakistan Stock Exchange (PSX) witnessed a highly volatile session on Monday, with sharp two-way movements throughout the day before a late-session recovery as improving global sentiment and expectations of easing geopolitical tensions supported investor confidence. The benchmark KSE-100 Index settled at 151,207.82 points, registering a gain of 809.10 points or 0.54 percent compared with the previous close of 150,398.71 points. The index traded within a wide intraday range, touching a high of 151,875.02 points and a low of 147,771.36 points, reflecting heightened volatility during the session. The BRIndex100 closed at 16,939.38 points, gaining 218.16 points or 1.30 percent, with total traded volume of 375.80 million shares, while the BRIndex30 settled at 58,414.74 points, up 863.54 points or 1.50 percent, with turnover recorded at 268.38 million shares. According to Topline Securities, the local bourse endured a highly volatile trading session, initially weighed down by geopolitical concerns but later supported by optimism surrounding a potential ceasefire and the anticipated reopening of the Strait of Hormuz, which triggered strong late-session recovery. The report noted that aggressive value hunting and short covering helped bulls regain control by the close. On the index front, key laggards including United Bank Limited, Bank Alfalah, Attock Refinery, Pakistan Oilfields, and Nestle Pakistan collectively shaved off 716 points, while Engro Holdings, Pakistan Petroleum, Lucky Cement, Hub Power Company, Oil and Gas Development Company, and MCB Bank provided support, adding 666 points to the index. Overall market activity remained strong, with total traded volume in the ready market recorded at 457.21 million shares compared to 471.94 million shares in the previous session, while traded value increased to Rs30.88 billion from Rs24.64 billion. Market capitalization also rose to Rs16.82 trillion from Rs16.73 trillion, reflecting an increase of approximately Rs97.64 billion during the session. Market breadth remained positive, with 261 companies closing higher, 153 declining, and 69 remaining unchanged out of a total of 483 traded companies in the ready market. Among the most actively traded stocks in the ready market, Cnergyico PK led with 57.96 million shares, closing at Rs7.21, followed by WorldCall Telecom with 30.55 million shares, closing at Rs1.21. Pak Refinery recorded 28.35 million shares, closing at Rs34.76, while K-Electric Limited posted 25.44 million shares, settling at Rs7.11. Among companies reflecting increase in rates, PIA Holding Company Limited (B) posted a significant gain of Rs1,452.19 to close at Rs16,000.00, while Rafhan Maize Products Company Limited increased by Rs78.12 to settle at Rs8,930.25. On the losing side, Unilever Pakistan Foods Limited declined by Rs212.44 to close at Rs24,955.62, while Nestle Pakistan Limited fell by Rs76.07 to settle at Rs7,601.39. Sector-wise, the BR Automobile Assembler Index closed at 21,967.11 points, up 130.66 points or 0.60 percent, with volume of 2.42 million shares. The BR Cement Index gained 188.79 points or 1.89 percent to close at 10,157.87 points, with turnover of 40.59 million shares. The BR Commercial Banks Index, however, declined by 478.77 points or 0.92 percent to 51,513.24 points, with 55.41 million shares traded. The BR Power Generation and Distribution Index rose 351.94 points or 1.42 percent to 25,150.50 points, with turnover of 53.98 million shares, while the BR Oil and Gas Index increased by 195.58 points or 1.47 percent to 13,459.06 points, with volume of 31.14 million shares. The BR Tech and Communication Index also closed higher at 3,357.10 points, gaining 48.53 points or 1.47 percent, with turnover of 63.04 million shares. Overall, the session highlighted continued volatility at the Pakistan Stock Exchange, with geopolitical developments and global oil market trends remaining key drivers of investor sentiment, while late-session buying helped the market close on a positive note despite early pressure. Copyright Business Recorder, 2026

Date: 2026-04-07

Details: Reuters Published April 7, 2026 Updated about 9 hours ago Federal Reserve Bank of New York President John Williams said on Tuesday the Middle East war energy shock will drive up overall inflation over the course of this year, while reiterating monetary policy is in the right place to deal with what happens in the U.S. economy. The war impact â€œwill directly go into headline inflation because energy prices are an important component of that,â€ Williams said in an interview on BLOOMBERGâ€™s television channel. â€œI expect headline inflation to actually be elevated, you know, in the middle of this yearâ€ and come in at around 2.75% for the year, he added. In the near term, as the shock from the Middle East war, launched by U.S.-Israeli attacks on Iran, works its way through the economy, Williams said it is possible for inflation to go over 3%, noting that markets are expecting such an outcome. He said heâ€™s got a close eye on whatâ€™s happening to underlying inflation, and there the energy shock will also lift prices, just not by as much. â€œOverall, Iâ€™m kind of where Iâ€™ve been for a while, with core inflation around two and a half percent this year,â€ Williams said, referring to inflation excluding food and energy. Williams reiterated in his interview that he doesnâ€™t see any imminent need to change the setting of monetary policy. The Fedâ€™s interest rate target is currently in a range of 3.5% to 3.75%, with officials at last monthâ€™s policy meeting having penciled in one quarter-point rate cut this year. â€œMonetary policy today is really well positioned, given where all of those dynamics have been playing out, and well positioned to kind of wait and see on some of the effects ofâ€¦whatâ€™s happening today,â€ Williams said. â€œIâ€™m not saying weâ€™re just, you know, in some kind of â€˜we canâ€™t actâ€™â€ stance, instead, â€œI think this monetary policy is exactly where it needs to be.â€ Williams said the impact of the war and the increase in prices it has brought will likely pull down growth a bit as consumers are forced to spend more on energy. He also said in the current low-hire, low-fire economy he expects the unemployment rate to hold mostly steady going forward. â€œIâ€™ve been bringing down my forecast for growth this year, probably somewhere between two and two and a half percent for growth this year, and unemployment rate probably staying around where it is now,â€ he said. Williams also said in the interview he doesnâ€™t see the uncertainties around the confirmation of Kevin Warsh to be Fed chair, and the possibility that current leader Jerome Powell will need to stay on longer, affecting the Fedâ€™s work. â€œI would just highlight the most important thing here is that, you know, weâ€™re just focused on doing our work. Thereâ€™s no issue about continuity or things like that,â€ Williams said.

Date: 2026-04-06

Details: Recorder Report Published April 6, 2026 Updated about 3 hours ago LAHORE: The Businessmen Panel (BMP) of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has issued a stark warning over the governmentâ€™s aggressive fuel taxation policy, stating that the unprecedented surge in petroleum prices is pushing the national economy toward stagnation while severely undermining industrial competitiveness. BMP Chairman and former FPCCI President, Mian Anjum Nisar, said that Pakistanâ€™s recent fuel price hikesâ€”ranging between 63 percent to over 75 percent in petrol and dieselâ€”stand in sharp contrast to regional economies, where increases have remained limited to just 2 percent to 10 percent. He noted that India, Bangladesh, China, and Vietnam have adopted calibrated pricing strategies, shielding their industries through subsidies, tax adjustments, and gradual revisions, while Pakistan has imposed a disproportionately heavy burden on its economy. â€œThis policy divergence is not just alarmingâ€”it is economically damaging,â€ he said. â€œAt a time when our exporters are already struggling with high energy costs and declining global demand, such an excessive increase in fuel prices is effectively pricing Pakistan out of international markets.â€ Mian Anjum Nisar emphasized that petrol prices reaching around Rs458 per litreâ€”driven largely by a petroleum levy exceeding Rs160 per litreâ€”reflect a fiscal approach overly reliant on indirect taxation. While acknowledging the constraints posed by the IMF programme, he warned that excessive dependence on fuel taxes could choke economic activity rather than stabilize finances. â€œFuel is the backbone of all economic sectorsâ€”transport, manufacturing, agriculture, and services. When its cost rises sharply, the entire economic chain is disrupted,â€ he explained. â€œThis is not just a price increase; it is a structural shock.â€ He pointed out that logistics and transportation costs in Pakistan are already among the highest in the region. The latest fuel hikes will further inflate freight charges, increase input costs for manufacturers, and reduce profit margins across industries. Export-oriented sectors, particularly textiles and value-added segments, are likely to face significant setbacks as global buyers shift to more cost-competitive markets. â€œOur regional competitors are gaining ground precisely because their governments are protecting industry from such shocks,â€ he said. â€œBangladesh and Vietnam, for example, continue to offer stable energy pricing, enabling their exporters to secure long-term contracts at competitive rates.â€ The BMP chief also expressed concern over the impact on small and medium enterprises (SMEs), which form the backbone of Pakistanâ€™s industrial base. â€œUnlike large corporations, SMEs do not have the financial cushion to absorb sudden cost increases. Many will be forced to scale down operations, reduce workforce, or shut down entirely,â€ he warned. In agriculture, the implications are equally serious. Diesel-powered machinery, including tractors, tube wells, and harvesters, will become significantly more expensive to operate. This, he noted, will drive up the cost of food production, contributing to inflationary pressures and exacerbating food security concerns. Mian Anjum Nisar further highlighted the paradox of over-taxation, cautioning that higher fuel taxes may not yield the expected revenue gains. â€œThere is a threshold beyond which increased taxation leads to reduced consumption and, ultimately, lower revenue collection. As economic activity slows, fuel demand declines, undermining the very fiscal objectives the government seeks to achieve,â€ he said. He also criticized the distortionary impact of current pricing policies, particularly the cross-subsidization between petrol and diesel. â€œSuch measures disrupt market signals and create inefficiencies. Instead of promoting rational consumption, they redistribute financial stress within an already fragile system,â€ he added. On the social front, the BMP chairman warned of widespread repercussions. Fuel price increases, he said, are inherently regressive, disproportionately affecting lower and middle-income groups. The ripple effectsâ€”higher transport fares, increased food prices, and rising utility costsâ€”will erode purchasing power and heighten economic hardship. â€œThis is not just an economic issue; it is a social challenge,â€ he said. â€œPersistent inflation and declining real incomes can lead to public discontent and instability.â€ Mian Anjum Nisar urged the government to adopt a more balanced and sustainable fiscal strategy. He called for immediate relief measures, including a reduction in the petroleum development levy (PDL), rationalization of energy tariffs, and targeted support for export-oriented sectors. He stressed that fiscal consolidation should focus on expenditure rationalization rather than excessive revenue extraction. â€œThere is significant room to cut non-productive government spending, reduce administrative inefficiencies, and improve fiscal discipline,â€ he noted. The BMP chief also reiterated the need to broaden the tax base by bringing untaxed sectorsâ€”particularly retail and agricultureâ€”into the formal economy. â€œThe burden cannot continue to fall on the already documented sectors. Structural reforms in taxation are essential for long-term sustainability,â€ he said. Additionally, he emphasized the importance of energy sector reforms, including reducing transmission losses, curbing theft, and improving distribution efficiency. â€œWithout addressing these systemic issues, price hikes will only transfer inefficiencies to consumers and businesses,â€ he warned. He also advocated for a phased and predictable fuel pricing mechanism to avoid sudden shocks. â€œGradual adjustments, combined with targeted subsidies for vulnerable groups, can help balance fiscal needs with economic stability,â€ he suggested. Copyright Business Recorder, 2026

Date: 2026-04-06

Details: â€¢ Brent crude futures rose $1.71, or 1.6%, to $110.74 a barrel Reuters Published April 6, 2026 Updated 6 minutes ago TOKYO: Oil prices climbed on Monday on continuing fears of supply losses because of shipping disruptions in the key Middle East producing region from the U.S.-Israeli war with Iran. Brent crude futures rose $1.71, or 1.6%, to $110.74 a barrel by 0057 GMT. U.S. West Texas Intermediate crude futures gained $0.71, or 0.6%, to trade at $112.25 per barrel. On Thursday, the last trading day before the Good Friday holiday break, WTI settled up more than 11% and Brent soared nearly 8% in volatile trading, recording â their biggest absolute price increase since 2020, as U.S. President Donald Trump promised to continue attacks on Iran. The Strait of Hormuz, which carries oil and petroleum products from Iraq, Saudi Arabia, Qatar, Kuwait and the United Arab Emirates, remains largely closed by Iranian attacks on shipping after the war began on February 28. Because of the Middle East supply disruptions, refiners are seeking alternative sources for crude, particularly for physical cargoes in the U.S. and the UK North Sea. â€œGlobal buyers are bidding aggressively for (U.S.) Gulf Coast barrels and Brent is rallying even faster,â€ the Schork Group said in a client note on Monday. On Sunday, Trump ratcheted up pressure on Tehran, threatening in an expletive-laden Easter â Sunday social media post to target Iranâ€™s power plants and bridges on Tuesday if the strategic Strait of Hormuz is not reopened. Still, some vessels, including an Omani-operated tanker, a French-owned container ship and a Japanese-owned gas carrier, crossed the Strait of Hormuz since Thursday, shipping data showed, reflecting Iranâ€™s policy to allow passage for vessels from countries it deems friendly. The war threatens to linger on as â Iran has officially told mediators it is not prepared to meet with U.S. officials in the Pakistani capital Islamabad in coming days and efforts to produce a ceasefire have reached a dead end, the Wall Street Journal reported on Friday. On Sunday, OPEC+, â consisting of some members of the Organization of the Petroleum Exporting Countries and allies such as Russia, agreed to a modest rise of 206,000 barrels per day for May. However, that decision will largely exist on paper as several of the groupâ€™s key â producers are unable to raise output due to the war. Russian supply has been disrupted recently by Ukrainian drone attacks on its Baltic Sea export terminal. Media reports on Sunday said its Ust-Luga terminal resumed loadings on Saturday after days of disruptions.

Date: 2026-04-06

Details: Written by Shahnawaz Akhter in Taxation, Trade & Industry Karachi, April 6, 2026 â€“ Chairman of the Businessmen Group (BMG), Muhammad Zubair Motiwala, has called on the Federal Board of Revenue (FBR) to immediately restore the zero-rated sales tax for Pakistanâ€™s export sector, warning that ongoing global and regional tensions could severely impact the countryâ€™s economy. In a detailed letter addressed to Federal Minister for Finance and Revenue Muhammad Aurangzeb, Motiwala highlighted growing concerns within the business community over the economic fallout of escalating US-Iran tensions. He stated that rising geopolitical instability is already affecting global trade routes, increasing freight and insurance costs, and creating volatility in energy markets. According to him, Pakistan is already facing challenges such as stagnant exports, weakening industrial activity, and declining remittance inflows, all of which are putting pressure on the external sector. In this context, he emphasized the urgent need for policy measures to support exporters. ðŸ“Š Key Proposal: Restoration of Zero-Rating Motiwala strongly recommended restoring zero-rating of sales tax on inputs for key export-oriented sectors, including textiles, leather, surgical instruments, carpets, and sports goods. These sectors account for nearly 80â€“85% of Pakistanâ€™s total exports, making their financial stability critical. He argued that the shift from zero-rating to a refund-based system has created serious liquidity problems for exporters due to delayed refunds and increased borrowing costs. Restoring zero-rating, he said, would improve cash flow, reduce financial pressure, and enhance global competitiveness. ðŸ“¦ Proposal for Customs Valuation Reform The BMG chairman also suggested a shift in customs valuation from Cost and Freight (CNF) to Ex-Works (EXW) pricing. He explained that CNF includes rising freight and insurance costs, which inflate the tax burden on imports. EXW valuation, he noted, would provide a more transparent and fair system, lowering input costs and improving industrial efficiency. âš¡ Energy Crisis and Industrial Challenges Motiwala expressed concern over Pakistanâ€™s high industrial electricity tariffs, which currently range between 14 to 16 US cents per kilowatt hour. He said such rates are uncompetitive and hinder industrial growth. He pointed out that although the government introduced the Incremental Consumption Package (ICP), Karachiâ€™s industries have not received their fair share of benefits. He claimed that around Rs7 billion released for Karachi under the package has not been passed on to industrial consumers, while pending relief is estimated between Rs28 billion and Rs33 billion. This disparity, he warned, has placed Karachiâ€™s industries at a disadvantage compared to other regions. ðŸ”¥ Gas Tariffs and Supply Issues Motiwala also highlighted rising gas tariffs and inconsistent supply as major concerns. He stressed that gas is a critical input for export industries and should be priced on a cost-of-service basis rather than as a revenue-generating tool. He urged the government to ensure transparent pricing, consistent supply, and priority allocation of gas to export-oriented sectors. ðŸš¢ Rising Logistics Costs The BMG chairman noted that escalating global shipping costs and war-risk insurance premiums, driven by geopolitical tensions, have increased the burden on exporters. He called for the immediate revival of freight subsidy schemes to help exporters remain competitive in international markets. ðŸ’° Pending Refunds and Financial Stress Motiwala also raised the issue of delayed tax refunds, stating that a large amount of exportersâ€™ funds remains stuck with the FBR. This situation is forcing businesses to rely on expensive borrowing, further straining their finances. He urged authorities to release all pending refunds immediately and implement an automated, time-bound refund system to ensure timely payments in the future.

Date: 2026-04-05

Details: Written by Shahnawaz Akhter The Institute of Cost and Management Accountants of Pakistan (ICMAP) has proposed the introduction of an annual vacant urban land tax in the upcoming Budget 2026-27, aiming to improve land utilization and boost government revenue. According to the tax proposals submitted to the Ministry of Finance Pakistan, Pakistan currently lacks a comprehensive nationwide tax targeting vacant urban land. While some provinces have partial measures under existing property tax systems, ICMAP believes a dedicated framework is necessary to address long-standing inefficiencies in land use. The proposed tax would apply to undeveloped or long-term vacant urban plots, calculated as a percentage of the assessed value of the land. Authorities would rely on municipal property records and modern digital mapping systems to identify such properties. Higher tax rates may be applied to prime urban locations to discourage speculative holding and encourage timely development. ICMAP highlights that the introduction of this tax could help align urban planning with economic productivity. By discouraging land hoarding, the policy is expected to bring idle land into productive use, supporting housing, infrastructure, and commercial projects. Policy Rationale The proposal is designed to promote productive urban development, generate steady municipal revenue, and support sustainable city planning. It also aims to reduce speculative real estate practices that contribute to rising property prices and urban congestion. Expected Impact If implemented, the tax could significantly increase municipal revenue by bringing previously unused land into the tax net. It is also expected to encourage construction activity, improve land-use efficiency, and contribute to better-organized urban expansion in major cities across Pakistan. Conclusion The proposal by ICMAP reflects growing concern over urban development challenges and the need for fiscal reforms. If adopted, the annual urban land tax could mark a significant shift in Pakistanâ€™s property and taxation policy, promoting long-term economic and urban development.

Date: 2026-04-05

Details: Written by Shahnawaz Akhter In a major step to regulate the countryâ€™s fast-growing digital economy, the Federal Board of Revenue has made it mandatory for individuals earning through social media platforms to file annual income tax returns. The move targets both local influencers and foreign content creators generating revenue from Pakistani audiences. For years, many YouTubers, influencers, and digital entrepreneurs earned substantial income through online content without formal tax compliance. However, with new regulations introduced via SRO 545(I)/2026 and SRO 546(I)/2026, authorities are now bringing all digital income streams under the tax net in Pakistan. ðŸ“Œ Whatâ€™s Changing? The new framework applies to: â€¢ Pakistani influencers and YouTubers â€¢ Foreign creators earning from Pakistani viewers Foreign content creators will be taxed if they show significant digital engagement in Pakistan, such as reaching 50,000 annual users or 12,250 users in a single quarter. ðŸ“Š How Income Will Be Calculated To ensure transparency, the FBR has introduced a formula-based system. Taxable income will be calculated as total earnings minus allowable expenses, capped at 30%. Authorities may also estimate earnings using benchmarks like revenue per mille (RPM), average views, and total content output. ðŸ’° Compliance Requirements Both resident and non-resident earners must: â€¢ File annual tax returns â€¢ Pay quarterly advance tax If declared income is lower than FBR estimates, authorities may revise returns and recover unpaid taxes. ðŸš€ Why It Matters This policy marks a turning point in documenting Pakistanâ€™s digital economy, reducing tax evasion, and ensuring fairness across sectors. It also aligns Pakistan with global trends where governments are increasingly taxing online earnings. ðŸ“‰ Bottom Line The message is clear: whether you are a local influencer or an overseas creator, earning from Pakistani audiences now comes with tax responsibilities.

Date: 2026-04-05

Details: Press Release Published April 5, 2026 Updated a day ago ISLAMABAD: Askari Bank hosted Chairman Pakistan Virtual Assets Regulatory Authority (PVARA) and Minister of State Bilal Bin Saqib at its Head Office for a strategic dialogue with the Bankâ€™s President and CEO, Zia Ijaz. The meeting marked an important step toward strengthening collaboration between the banking sector and Pakistanâ€™s virtual assets ecosystem. Banking infrastructure for digital assets: Discussions centered on Askari Bankâ€™s potential role in enabling fiat on-ramps and off-ramps for virtual asset exchanges and Virtual Asset Service Providers (VASPs), both parties emphasised that regulated financial institutions must participate actively for the sustainable growth of Pakistanâ€™s digital asset ecosystem. PKR-denominated stablecoin: The discussion explored the concept of a PKR-denominated stablecoin and its role in Pakistanâ€™s digital economy. Participants recognised its potential to mitigate systemic risks, particularly those linked to capital flight, while fostering sustained demand for PKR through consistent buy-side pressure and transparent usage within regulated frameworks. Cybersecurity and institutional resilience: The conversation also addressed the growing importance of AI-native cybersecurity protocols and building robust cyber defenses to safeguard the banking sector against evolving threats. Both sides acknowledged cybersecurity as foundational to the safe expansion of digital financial services. Joint working group established: To translate strategic intent into actionable outcomes, Askari Bank and PVARA agreed to establish a joint working group. Key focus areas include: Tokenization of real-world assets; Stablecoin-based remittances and cross-border flows. The engagement reaffirmed Askari Bankâ€™s commitment to responsible innovation, regulatory compliance, and collaboration with national stakeholders to support Pakistanâ€™s transition toward a secure and future-ready digital financial ecosystem. Copyright Business Recorder, 2026

Date: 2026-04-05

Details: â€¢ Other group members such as Russia are unable to increase output due to Western sanctions Reuters Published April 5, 2026 Updated about 15 hours ago MOSCOW/LONDON: OPEC+ has agreed in principle to raise its oil output quotas by 206,000 barrels per day for May, three sources with knowledge of the groupâ€™s talks said ahead of its meeting later on Sunday, a rise that will largely exist on paper as its key members are unable to raise production due to the US-Israeli war with Iran. The war has effectively shut the Strait of Hormuz â€“ the worldâ€™s most important oil route â€” since the end of February and cut exports from OPEC+ members Saudi Arabia, the UAE, Kuwait and Iraq, the only countries in the group which were able to significantly raise production even before the conflict began. Other group members such as Russia are unable to increase output due to Western sanctions and damage to infrastructure inflicted during the war with Ukraine. Inside the Gulf, damage to infrastructure from missile and drone attacks has also been severe. Several Gulf officials have said it would take months to resume normal operations and reach production targets even if the war stopped and Hormuz reopened immediately. Iran on Saturday said Iraq was exempt from any restrictions to transit the vital route, and shipping data on Sunday showed a tanker loaded with Iraqi crude passing through the strait. Still, it remains to be seen if more vessels will take the risk involved, a source close to the issue said. War causes worldâ€™s worst oil supply disruption Sundayâ€™s OPEC+ talks are set to start at around 1300 GMT with a gathering of ministers called the Joint Ministerial Monitoring Committee, which does not decide on output policy. After this, eight members of OPEC+ hold separate talks having agreed in principle to raise output quotas by 206,000 bpd for May, the three sources said. This would be the same as the increase decided for April at their last meeting held on March 1, just as the war began to disrupt oil flows. A month later, the largest oil supply disruption on record is estimated to have removed as many as 12 to 15 million bpd or up to 15% of global supply. Crude prices have soared to a four-year high close to $120 a barrel. Oil prices could spike above $150 - an all-time high - if flows via Hormuz remain disrupted into mid-May, JPMorgan said on Thursday. A quota increase will have little immediate impact on supply but would signal readiness to raise output once Hormuz reopens, OPEC+ sources have said. Consultancy Energy Aspects called the increase â€œacademicâ€ as long as disruptions in the strait persist. OPEC+ groups 22 members including Iran. In recent years only the eight countries meeting on Sunday have been involved in monthly production decisions, and they started in 2025 to unwind previously agreed output cuts to regain market share. The eight raised production quotas by about 2.9 million bpd from April 2025 through December 2025, before pausing increases for January to March 2026.

Date: 2026-04-05

Details: â€¢ Egypt has raised electricity prices for higher-use residential consumers and commercial users starting in April Reuters Published April 5, 2026 Updated about 19 hours ago Egypt has raised electricity prices for higher-use residential consumers and commercial users starting in April, the electricity ministry said on Saturday, citing a severe global energy crisis linked to the war in the Gulf region. The move is the latest in a series of steps by the government to curb energy use and contain mounting fiscal pressure as higher import costs strain the finances of the Arab worldâ€™s most populous country. In â a statement, the ministry said lower-consumption households would be shielded from the increases, which would be limited to higher-use segments and commercial users in an effort to maintain electricity supplies across the residential, commercial and industrial sectors. It said electricity prices for residential consumption bands of up to 2,000 kilowatt-hours per month would remain unchanged, while tariffs for higher residential brackets would rise by an average of 16%. Egypt says it held calls with US Witkoff, regional counterparts Commercial electricity prices across all brackets â would increase by an average of about 20%, it added. Prime Minister Mostafa Madbouly said in March that Egyptâ€™s energy import bill had more than doubled since the war involving the United States, Israel and Iran began, forcing the government to â raise fuel prices, increase public transport fares and slow some state projects to ease pressure on public finances. Egypt began implementing measures in March to rationalise energy â consumption, including earlier closing hours for commercial venues, as global oil prices rose amid the conflict. Egypt agrees $3bn loan with IMF as pound hits new low The country was already grappling with heavy debt â burdens, with interest payments consuming about half of government spending this fiscal year, while inflation has remained in double digits after peaking at 38% in September 2023.

Date: 2026-04-04

Details: â€¢ 'Risks to the outlook and inflation are broadly balanced' with inflation expected to converge to the BOJâ€™s 2% target in 2027 Reuters Published April 4, 2026 Updated a day ago TOKYO: The International Monetary Fund urged the Bank of Japan to continue raising interest rates, even as the Middle East war posed â€œsignificant new risksâ€ to the countryâ€™s economic outlook. The proposal comes amid market expectations the BOJ will raise interest rates as soon as April in the face of mounting inflationary pressure from the conflict-induced spike in oil prices, and higher import costs blamed on the weak yen. While growth is expected to moderate, due partly to the Iran war, gradual wage gains will underpin consumption, the IMF said in a statement issued from Washington on Friday after the conclusion of its policy consultation with Japan. â€œRisks to the outlook and inflation are broadly balancedâ€ with inflation expected to converge to the BOJâ€™s 2% target in 2027, the IMF said. In the statement, the IMF said its executive board commended Japanâ€™s â€œstrong economic resilienceâ€ to global shocks and agreed the BOJ was appropriately withdrawing monetary accommodation. BOJ to raise rates with eye on Iran war fallout, central bank official says â€œThey noted that as underlying inflation converges toward the BOJâ€™s target, gradual rate hikes toward neutral should continueâ€ in a flexible, well-communicated and data-dependent approach, the statement said. â€œDirectors stressed the importance of maintaining a flexible exchange rate as a credible shock absorber,â€ it added. The BOJ ended a massive stimulus in 2024 and raised interest rates several times, including in December, on the view that Japan was on the cusp of durably hitting its 2% inflation target. The central bank has stressed its readiness to keep raising rates on the expectation that underlying inflation will converge to its 2% target sometime from the second half of fiscal 2026 into fiscal 2027. Japanâ€™s fiscal year starts in April. While rising oil prices hurt Japanâ€™s import-reliant economy, BOJ policymakers have signalledtheir concern they will add to inflationary pressures from years of steady wage gains and broader price increases. The BOJâ€™s slew of hawkish communication has prodded markets to price in a roughly 70% chance of a rate hike in April. The yenâ€™s slide towards the key 160-per-dollar level has also kept markets on alert for the chance of currency intervention by Japanese authorities. Finance Minister Satsuki Katayama issued a fresh warning against yen bears on Friday, saying Japan stood ready to act against speculative moves in the currency market. â€œWeâ€™re ready to take all available means that are legally feasible, be it conventional or non-conventional,â€ she told an online programme on Friday evening.

Date: 2026-04-03

Details: Written by Mrs. Anjum Shahnawaz Karachi, April 3, 2026 â€“ The Oil Tankers Contractors Association has threatened to suspend fuel transportation across Pakistan in protest against rising petroleum prices and the governmentâ€™s refusal to increase transport fares. In a strong video statement, Association President Abidullah Afridi announced that oil tanker operators will halt operations until their demands for higher freight charges are met. The warning comes shortly after the government implemented a significant increase in fuel prices, effective April 3, 2026. Afridi criticized the recent decision to raise diesel prices by Rs184 per litre, stating, â€œWe reject this decision of the government.â€ He emphasized that operating costs have surged, making it unsustainable for tanker operators to continue under existing fare structures. Nationwide Disruption Warning The association issued clear instructions to its members, declaring that no oil tanker will load or transport petroleum products until transportation fares are revised. Afridi warned that failure to address the issue could lead to a complete disruption in fuel supply across the country. The statement also included a direct appeal to oil marketing companies, urging them to immediately revise freight charges in line with current fuel costs. â€œWe cannot operate under old fares with diesel priced at Rs520 per litre,â€ Afridi said. Growing Pressure on Supply Chains The threat of a transport shutdown has raised concerns over potential fuel shortages, which could impact transportation, industry, and daily life. With fuel already at record-high prices, any disruption in supply could further strain Pakistanâ€™s economy. Despite repeated appeals to the government, oil tanker fares have not been increased, prompting the association to take a firm stand. If negotiations fail, Pakistan could face a major fuel supply crisis, adding pressure to an already fragile economic situation. Authorities are expected to respond as the standoff between transporters and the government intensifies.

Date: 2026-04-03

Details: Press Release Published April 3, 2026 Updated about an hour ago ISLAMABAD: The Securities and Exchange Commission of Pakistan has signed Memoranda of Understanding (MoUs) with Askari Bank Limited and NayaPay to make it easier and faster for companies to open corporate bank accounts. Under this arrangement, once a company is registered with SECP, its directors will get an online option to open a bank account in a bank of their choice. There will be no need for lengthy manual processes. SECPâ€™s eZfile system will be connected with the systems of partner banks through a secure digital link. This will allow instant verification of company data. As a result, companies will be able to open bank accounts quickly with less documentation and fewer delays. The MoU was signed by Commissioner SECP Muzzafar Ahmed Mirza, Askari Bankâ€™s Group Head Retail Banking Shaikh Raashed Rauf, and NayaPayâ€™s CEO Danish Ahmad Lakhani. The ceremony was attended by SECP Chairperson Dr Kabir A Sidhu, President Askari Bank Zia Ijaz, and senior officials. This step is part of SECPâ€™s â€œPaper to Platformâ€ initiative. The aim is to digitise processes and improve ease of doing business. It also builds on SECPâ€™s earlier partnerships with financial institutions. Speaking at the event, Chairperson SECP Dr Kabir Ahmed Sidhu said that close coordination between SECP and financial institutions will help provide complete digital onboarding for businesses. He said this will reduce barriers, improve transparency, and support financial inclusion. Officials of Askari Bank and NayaPay welcomed the initiative. They said it will not only make account opening easier but also support future cooperation in lending and digital financial services. Earlier, SECP signed similar agreements with Mobilink Microfinance Bank Limited, Easypaisa Bank Limited, Mashreq Bank, and Raqami Islamic Digital Bank Limited. Copyright Business Recorder, 2026

Date: 2026-04-03

Details: Written by Shahnawaz Akhter Islamabad, April 3, 2026 â€“ The Federal Board of Revenue (FBR) has introduced a new digital monitoring system to track tile production across the country using advanced video analytics technology. The move aims to enhance transparency, improve tax compliance, and curb underreporting in the manufacturing sector. According to an official notification issued as Sales Tax General Order (STGO) No. 02/2026, the initiative has been launched under Section 40C(2) of the Sales Tax Act, 1990, along with relevant provisions of the Sales Tax Rules, 2006. Mandatory Video Analytics for Tile Manufacturers Under the new directive, all registered tile manufacturers are required to install video analytics-based monitoring systems at their production facilities without delay. These systems will enable the FBR to monitor production processes through real-time surveillance and automated data analysis, ensuring greater oversight of manufacturing output. The directive also mandates that such systems must be installed using equipment provided by FBR-authorized vendors. Deadline Set for April 30, 2026 FBR has instructed all tile manufacturing units to complete the installation of video analytics solutions, including both hardware and software, by April 30, 2026. The order further directs relevant tax authorities to ensure compliance and coordinate with manufacturers for smooth implementation. Authorized Vendor for Monitoring System The FBR has identified ISSM Labelling Solutions as an authorized vendor responsible for supplying and maintaining the video analytics systems. The systems must comply with strict technical requirements, including: â€¢ Real-time capture of production processes â€¢ Automated object detection and production counting â€¢ Continuous data transmission to the FBR Central Control Unit â€¢ Detection of production halts or irregularities â€¢ Quantitative production analysis â€¢ Advanced data analytics for legal and enforcement purposes Nationwide Coordination Mechanism To facilitate implementation, Chief Commissioners Inland Revenue across jurisdictions have been directed to appoint focal persons. These officials will coordinate with tile manufacturers and authorized vendors to ensure timely installation and operational functionality of the monitoring systems. A jurisdiction-wise list of registered tile manufacturers has also been shared by the FBR for reference and compliance tracking. Strengthening Tax Compliance Through Technology The initiative reflects FBRâ€™s broader strategy to digitize tax monitoring and reduce revenue leakage in key industrial sectors. By leveraging video analytics, the FBR aims to create a transparent system that provides real-time insights into production levels, helping ensure accurate reporting and fair taxation. The order has been issued with the approval of the Member Inland Revenue (Operations), FBR, and takes effect immediately.

Date: 2026-04-03

Details: Written by Shahnawaz Akhter Islamabad, April 3, 2026 â€“ The Federal Board of Revenue (FBR) has imposed strict disciplinary action against a Customs Preventive Officer following a tragic incident during an anti-smuggling operation in Karachi that resulted in the death of a civilian. According to an official notification, disciplinary proceedings were initiated against Mr. Muhammad Tauseef Akbar, Preventive Officer (BS-16), under suspension from the Collectorate of Customs Enforcement, Karachi. The action was taken under Rule 3(a) and 3(b) of the Civil Servants (Efficiency & Discipline) Rules, 2020, on charges of â€œinefficiencyâ€ and â€œmisconduct.â€ The officer was suspended on June 18, 2025, after serious allegations surfaced regarding his role in an anti-smuggling raid that turned fatal. A formal charge sheet was issued on September 1, 2025, and an inquiry was conducted by Mr. Saad Atta Rabbani (PCS/BS-19), who concluded that the charges against the officer were fully established. The inquiry report, submitted on January 24, 2026, recommended a major penalty of reduction to a lower post and pay scale for two years. However, after reviewing the case and hearing the officerâ€™s defense, the FBR authority decided to impose a stricter punishment. The officer had argued that he deputed customs personnel (Sepoys) for an initial anti-smuggling operation, which was successfully completed without casualties. However, he claimed that a second operation was conducted by the Sepoys without his permission, during which a civilian lost his life in an exchange of gunfire. He further stated that he had to leave the operation due to a family emergency but maintained communication with the team. Despite these claims, the authority found that he failed to ensure proper supervision and adherence to standard operating procedures (SOPs). During the proceedings, the Departmental Representative highlighted that the officer allowed armed personnel to conduct operations without adequate supervision, which directly violated established protocols. The authority observed that such negligence constituted serious misconduct. After reviewing all evidence, including inquiry findings, written responses, and arguments presented during the hearing, the FBR authority concluded that the officerâ€™s actions contributed to the incident. While noting that the Sepoys involved in the fatal shooting were also held accountableâ€”with the primary accused facing dismissalâ€”the authority determined that the officerâ€™s negligence warranted a stronger penalty than initially recommended. As a result, FBR imposed a major penalty of reduction to a lower post and pay scale for a period of three years on Mr. Akbar, effective immediately under Rule 4(3)(b) read with Rule 16(7)(b) of the Civil Servants (E&D) Rules, 2020. Additionally, the officer has been reinstated into government service, and his suspension period from June 18, 2025, to date will be treated as leave in accordance with applicable rules. His performance allowance has also been suspended for one year, requiring him to requalify for it. The officer retains the right to appeal the decision within 30 days under the Civil Servants (Appeals) Rules, 1977.

Date: 2026-04-03

Details: Written by Shahnawaz Akhter Islamabad, April 3, 2026 â€“ A taxpayerâ€™s secretly recorded audio and video evidence has triggered a major breakthrough in a corruption and misconduct case against a senior tax officer, leading to a significant disciplinary action and demotion. According to an official notification issued by the Federal Board of Revenue (FBR), disciplinary proceedings were initiated against Mr. Muhammad Asghar Janjua, IRO (Time Scale-17), Regional Tax Office (RTO), Gujranwala. The officer was suspended on November 7, 2025, after a formal charge sheet was issued against him for alleged misconduct. The inquiry, conducted by Mr. Muhammad Waqas Hanif, CIR, RTO Gujranwala, concluded that the accused officer was guilty of misconduct. The inquiry officer initially recommended minor penalties, including withholding of increments for two years and reduction in pay scale. However, during a detailed hearing held on March 18, 2026, the Departmental Representative presented crucial audio and video recordings in the presence of the accused officer. The recordings revealed questionable interactions between the officer and taxpayers, including statements about tax liabilities without any documented basis. Officials noted that the officer allegedly informed a taxpayer that their tax liability could reach â€œ6â€“7 million or even more,â€ without any supporting calculation or assessment, raising serious concerns over professional conduct and misuse of authority. The accused officer defended himself, claiming the recordings were incomplete and selectively edited. He also argued that his interactions were limited to advising taxpayers to comply with tax laws. However, the inquiry found that his evidence did not contradict the complainantâ€™s version of events. Further scrutiny revealed discrepancies regarding jurisdiction claims related to Hi-Star Industries, which the officer asserted fell under his territorial control. Official records and self-assessment data contradicted this claim, establishing that the business was under a different unitâ€™s jurisdiction. The inquiry also highlighted repeated visits by the officer to business premises, including after office hours, without any official documentation or reporting. Such actions were deemed unprofessional and indicative of inefficiency and possible overreach. After reviewing all evidence, including recordings, official records, and statements from both sides, the authority concluded that the allegations were proven â€œwithout any shadow of doubt.â€ The inquiry further stated that the conduct of the officer did not justify minor penalties as initially recommended. As a result, the authority imposed a major penalty of reduction to a lower post, demoting Mr. Janjua to Inspector-IR (BS-16) for a period of one year under Rule 4(3)(b) read with Rule 16(7)(b) of the Civil Servants (E&D) Rules, 2020. The officer has been reinstated into service with immediate effect, and his suspension period has been treated in accordance with applicable leave rules. This case highlights the increasing role of digital evidence and taxpayer vigilance in exposing corruption and ensuring accountability within government institutions.

Date: 2026-04-03

Details: Sohail Sarfraz Published April 3, 2026 Updated a day ago ISLAMABAD: The Federal Board of Revenue (FBR) will impose tax on social media account holders outside Pakistan (non-residents) with over 50,000 users in Pakistan (subscribers / followers) per tax year or 12,250 in three months, to bring social media earnings including platforms like YouTube and other monetized digital channels under tax regime. In this regard, the Federal Board of Revenue (FBR) has issued draft amendments through which if confirmed, would mean that non-resident persons that have more than 50,000 subscribers or followers in a tax year in Pakistan or more than 12,250 subscribers / followers in a quarter on social media shall have significance economic presence in Pakistan in terms of Section 101(3B)(b). This means their income to the extent it is generated by interaction with Pakistani users shall be Pakistan source income. These draft amendments may also apply to non-resident persons with lesser followers but that have a higher reach / view count than 50,000 views per post or video in Pakistan in a tax year or more than 12,250 views in a quarter, a tax expert explained. The FBR has made it mandatory for both resident and non-resident persons, deriving income from interaction with users in Pakistan through social media platforms, to pay quarterly advance tax and also file special income tax return. In this connection, the FBR has issued SRO.545(i)/2026 and in case of local Pakistanis, the FBR has issued an SRO.546(I)/2026 here on Thursday. The Federal Board of Revenue (FBR) Thursday issued special procedure for taxation of persons earning income from remunerative social media content. The â€œRevenue per milleâ€ means the revenue generated per 1000 views on the video shared on Youtube. For the purpose of this Special Procedure, it shall be taken as Rs 195 and is subject to revision from time to time, FBR added. A tax expert clarified that the FBR assumes that a YouTuber earns about Rs. 195 for every 1,000 views on their videos. This estimate is used as a benchmark to calculate taxable income, especially if exact earnings are not available. The rate can change in the future if the FBR updates its formula. This helps the tax authority determine how much income to include when calculating taxes on YouTube earnings. Under the new regulations, every non-resident person deriving income from interaction with users in Pakistan through social media platforms to the extent such income constitutes Pakistan-source income. The FBRâ€™s rules shall apply for the purpose of section 99C of the Income Tax Ordinance. 2001 to provide special procedure for computation of income of non-resident persons earning income from remunerative social media content. The FBR has also specified procedure for calculation of Income from remunerative Social Media Content. The minimum income of a person from remunerative social media content shall be calculated as per the prescribed formula. The threshold for number of users shall be number of users to qualify for â€œSystemic and Continuous Soliciting of Business Activities or Engaging in Interaction through Digital Meansâ€ would be exceeding 50,000 users during a tax year or twelve thousand two hundred and fifty users during a quarter. This may include persons with more than 50,000 subscribers or followers, and persons with lesser followers / subscribers but with greater engagement count with the viewers. Every person under this special procedure shall pay advance income tax calculated by applying the procedure given in rule -l9M and rule-19N above for one quarter and shall be payable or recoverable as the case may be. The declaration of such income shall be made in a special part of Income Tax Return for each tax year. Where the declaration of income is less than the amount calculated in rule -19M and rule-19N, the relevant commissioner may rectify this error omission or commission in the return and proceed to recover the amount due from the taxpayer as per the provisions of the income Tax Ordinance, 2001. In case of local Pakistanis, the FBR has issued an SRO.546(I)/2026 here on Thursday to notify special procedure for taxation of persons earning income from remunerative social media content. The Federal Board of Revenue (FBR) new taxation procedure will be applicable on every resident person deriving income from interaction with users in Pakistan through social media platforms. The â€œSocial media platformâ€ means an internet-based service whose primary purpose is to enable users to interact with other users and share user-generated content, where the economic value of the service arises from user participation, network effects and the monetization of user engagement or user data. Revenue per milleâ€ means the revenue generated per 1000 views on the video shared on Youtube. For the purpose of this Special Procedure. it shall be taken as PKR 195 and is subject to revision from time to time. According to the new regulations, the rules shall apply for the purpose of section 99C of the Income Tax Ordinance 2001 to provide special procedure for computation of income of resident persons earning income from remunerative social media content. Every person under this special procedure shall pay advance income tax calculated by applying the procedure given in rule-l3ZK and rule-132L above for one quarter and shall be payable or recoverable, as the case may be. as per provisions of section 147 of the Income Tax Ordinance. 2001. The declaration of such income shall be made in a special part of Income Tax Return for each tax year. Where the declaration of Income is less than the amount calculated in rule- l3ZK and rule-132L, the relevant commissioner may rectify this error of omission or commission in the return and proceed to recover the amount due from the taxpayer as per the provisions of the Income Tax Ordinance. 2001, FBR added. Copyright Business Recorder, 2026

Date: 2026-04-02

Details: Recorder Report Published April 2, 2026 Updated about 2 hours ago KARACHI: The State Bank of Pakistan (SBP) has launched a new regulatory framework enabling teenagers to independently open and operate bank accounts and digital wallets, in a move aimed at strengthening youth financial inclusion and promoting early financial literacy. Under the initiative, individuals aged 13 to 18 will be able to own and manage their accounts directly, marking a significant shift from the previous practice where minors were largely restricted to joint or parent-controlled accounts. The central bank said the framework is designed to help young people develop responsible financial habits, save securely and participate more actively in the formal economy. Pakistan has approximately 26 million teenagers within this age bracket, many of whom have so far had limited exposure to practical financial services. While overall account ownership in the country has risen to 67 percent of the adult population, teenagers have remained on the periphery of the banking system, highlighting a major gap in financial inclusion. The SBP said the new framework ensures that teenagersâ€™ accounts will operate within a fully regulated and secure environment, providing structured access to financial services while safeguarding against misuse. The initiative is also intended to prepare young users for participation in an increasingly digital financial ecosystem by familiarising them with digital payments and mobile banking tools at an early stage. The policy forms part of the central bankâ€™s broader reform agenda under its SBP Strategic Plan 2023-28 and the National Financial Inclusion Strategy 2024-28, both of which prioritise expanding access to financial services among youth and underserved segments of society. The move also builds on Pakistanâ€™s growing international recognition in youth financial inclusion, following the SBPâ€™s receipt of the Alliance for Financial Inclusion (AFI) Global Youth Financial Inclusion Award last year. SBP officials said the teenagersâ€™ account framework represents a long-term investment in building a financially literate and digitally capable young population, which will support sustainable economic growth and deepen the countryâ€™s financial system over time. Copyright Business Recorder, 2026

Date: 2026-04-02

Details: Written by Faisal Shahnawaz Islamabad, April 2, 2026 â€“ The Competition Commission of Pakistan (CCP) has successfully enforced penalties against Unilever Pakistan and FrieslandCampina Engro Pakistan for deceptive marketing practices, recovering Rs35 million for misleading consumers by advertising frozen desserts as â€œice cream.â€ The case was initiated following a complaint by Pakistan Fruit Juice Company (Private) Limited, the makers of Hico ice cream. The company alleged that both Unilever and FrieslandCampina Engro were falsely portraying their frozen dessert products as ice cream through aggressive advertising campaigns on television and social media platforms. After conducting a detailed inquiry under the Competition Act, 2010, the CCP concluded that the companies had disseminated false and misleading information, violating Section 10 of the law, which prohibits deceptive marketing practices. Initially, the Commission imposed penalties of Rs75 million each on the two companies. Additionally, Unilever Pakistan faced an extra Rs20 million fine for making misleading comparative claims, including portraying its frozen dessert products as healthier than traditional dairy-based ice cream. In its ruling, the CCP relied on standards set by the Pakistan Standards and Quality Control Authority (PSQCA) and the Punjab Pure Food Regulations 2018. These guidelines clearly distinguish between ice cream and frozen desserts. Ice cream must be made from milk and dairy ingredients, whereas frozen desserts can include vegetable oils and fall under a separate category. The Commission directed both companies to immediately stop marketing frozen desserts as ice cream, remove all misleading advertisements, and clearly disclose product ingredients and classifications to consumers. They were also instructed to submit compliance reports within the stipulated timeframe. The CCPâ€™s decision was later upheld by the Competition Appellate Tribunal (CAT), which affirmed that the companiesâ€™ actions constituted deceptive marketing under Pakistani law. The recovery of Rs35 million in penalties marks a significant step in enforcing consumer protection laws in Pakistan. The CCP emphasized that the move reflects its commitment to ensuring transparency in advertising and maintaining fair competition in the market. Industry experts believe the decision could set a strong precedent, compelling food manufacturers to adhere strictly to labeling standards and avoid misleading claims. The ruling also underscores the importance of regulatory oversight in protecting consumer rights and fostering trust in Pakistanâ€™s food industry.

Date: 2026-04-02

Details: Written by Shahnawaz Akhter Islamabad, April 2, 2026 â€“ The Federal Board of Revenue (FBR) has carried out a major administrative reshuffle, transferring and posting 38 officers of the Pakistan Customs Service (PCS) across key positions in grades BS-17 to BS-20. According to an official notification issued on Thursday, the large-scale reshuffle comes at a crucial time as the tax authority enters the final quarter of the fiscal year and continues to face challenges in meeting revenue collection targets. The restructuring is seen as part of efforts to improve efficiency, strengthen enforcement, and enhance operational performance within Pakistanâ€™s customs and tax administration. Key Transfers and Postings Several senior officers have been assigned new responsibilities in important departments across the country. Notable changes include: â€¢ Ms. Muneeza Majeed (BS-20) has been transferred from Director, Directorate of Transit Trade (HQ), Karachi to Director, Directorate of IPR Enforcement (South), Karachi. â€¢ Ms. Zahra Haider (BS-20) has been posted as Director, Directorate of Transit Trade (HQ), Karachi, after previously serving as SA/Collector at the Chief Collector of Customs (Exports & IOCO). â€¢ Mr. Junaid Ahmed Memon (BS-20) has been appointed Collector, Collectorate of Customs (Appeals), Karachi, replacing his previous position as Collector in Gwadar. â€¢ Dr. Karam Elahi (BS-20) has been transferred to Director, Directorate of Intelligence, Peshawar from his previous role in Quetta. â€¢ Mr. Azood-ul-Mehdi (BS-20) has been posted as Director, Directorate General of Law & Prosecution, Islamabad, moving from his role in Lahore. Strengthening Enforcement and Revenue Collection The reshuffle reflects the governmentâ€™s broader strategy to strengthen enforcement mechanisms and streamline operations within the customs department. Officials believe that strategic placements of experienced officers can help curb smuggling, improve compliance, and boost overall revenue collection. The FBR has been under pressure to meet ambitious tax targets, particularly as Pakistan navigates economic challenges and fiscal constraints. The latest postings are expected to play a role in optimizing performance across customs formations nationwide.

Date: 2026-04-02

Details: Written by Shahnawaz Akhter Karachi, April 2, 2026 â€“ In a landmark move, the Federal Board of Revenue (FBR) has tightened its grip on Pakistanâ€™s booming digital economy, introducing a sweeping taxation framework targeting YouTubers, influencers, and foreign content creators earning from Pakistani audiences. For years, many content creators generated substantial income from video views and online engagement without contributing to the national exchequer. That era may now be coming to an end. ðŸ“Œ Whatâ€™s New? Two Key Notifications The FBR has issued SRO 545(I)/2026 and SRO 546(I)/2026, aiming to bring both non-resident (foreign) and resident (local) digital earners into the tax net. â€¢ SRO 545(I)/2026 â†’ Targets foreign content creators earning from Pakistani viewers â€¢ SRO 546(I)/2026 â†’ Applies to Pakistani influencers and YouTubers This dual approach ensures no digital incomeâ€”local or cross-borderâ€”escapes taxation. ðŸŒ Taxing Foreign YouTubers: A First for Pakistan A major shift comes with taxing non-resident creators who monetize Pakistani audiences. Under the proposed Chapter VA: â€¢ Creators will be taxed if they have systematic engagement in Pakistan â€¢ Thresholds include: o 50,000+ annual users, or o 12,250 users in a single quarter ðŸ’¡ This means even overseas YouTubers earning from Pakistani viewers could now face tax obligations. ðŸ“Š How Income Will Be Calculated The FBR has introduced a formula-based taxation system to prevent underreporting. ðŸ‘‰ Minimum Taxable Income = Total Earnings â€“ Allowable Expenses â€¢ Expenses capped at 30% of revenue â€¢ Income calculated using the higher of: o Actual earnings o Estimated earnings via formula ðŸ”¢ Benchmark Formula Includes: â€¢ Revenue per mille (RPM) â€¢ Average views â€¢ Total uploaded content ðŸ“Œ RPM benchmark set at PKR 195 per 1,000 views (subject to revision) ðŸ‡µðŸ‡° Tax on Pakistani Influencers Under Chapter IIA, local influencers are also brought into the tax net. The rules apply to income earned through: â€¢ YouTube videos â€¢ Brand sponsorships â€¢ Paid collaborations â€¢ Social media promotions ðŸ“¢ The law broadly defines â€œremunerative social media contentâ€ to include any income-generating digital activity. ðŸ’° Advance Tax & Filing Rules Both local and foreign earners must comply with: â€¢ Quarterly advance tax payments â€¢ Mandatory income declaration in annual tax returns âš ï¸ If declared income is lower than FBRâ€™s calculated estimate: â€¢ Authorities can revise returns â€¢ Recover unpaid taxes ðŸ§¾ Why This Matters This move reflects Pakistanâ€™s urgent push to: â€¢ Document the digital economy â€¢ Reduce revenue leakage â€¢ Ensure fair taxation across sectors Previously, many influencersâ€”especially those operating from abroadâ€”escaped taxation by claiming non-resident status or routing income through foreign accounts. ðŸ—£ï¸ Stakeholders Invited to Respond The FBR has opened the proposal for public feedback within seven days. Industry stakeholders, influencers, and digital platforms can submit objections before final implementation. ðŸš€ A Turning Point for Digital Economy Pakistan is now aligning with global trends where governments are increasingly taxing digital earnings and cross-border content monetization. If implemented, the policy could: â€¢ Reshape income structures for influencers â€¢ Impact international content creators targeting Pakistan â€¢ Increase compliance requirements for digital entrepreneurs ðŸ“‰ Bottom Line The message is clear: If you earn from Pakistani viewers, you may now have to pay taxesâ€”no matter where you are. The â€œfree rideâ€ for untaxed digital income appears to be over, as the FBR moves to ensure every click, view, and stream contributes its share to the national economy.

Date: 2026-04-02

Details: Written by Mrs. Anjum Shahnawaz Islamabad, April 2, 2026 â€“ The government of Pakistan has introduced a targeted fuel relief package, announcing a Rs100 per litre petrol subsidy for motorcyclists following a historic surge in fuel prices triggered by global oil volatility and regional tensions. The announcement came shortly after the government raised petrol prices to Rs458.41 per litre and high-speed diesel to Rs520.35 per litreâ€”marking the highest levels in the countryâ€™s history. The decision was revealed during a joint press conference by Petroleum Minister Ali Pervaiz Malik and Finance Minister Muhammad Aurangzeb. Targeted Relief for Motorcyclists In a move aimed at cushioning the impact on lower- and middle-income groups, the government announced that motorcyclists will receive a subsidy of Rs100 per litre on petrol for up to 20 litres per month. The relief measure will remain in effect for three months. Officials stated that the initiative is designed to directly benefit daily wage earners, commuters, and delivery riders who rely heavily on motorcycles for their livelihoods. Shift from Blanket Subsidies Finance Minister Muhammad Aurangzeb emphasized that the government is moving away from broad, untargeted subsidies toward a more focused support system. According to him, this approach ensures that limited fiscal resources are directed toward the most vulnerable segments of society. In addition to the motorcyclist subsidy, the government also announced: â€¢ Rs100 per litre diesel subsidy for intercity public transport â€¢ Monthly fuel subsidy of Rs70,000 for trucks and goods transport â€¢ Financial support for Pakistan Railways to help control fare increases These measures aim to contain the ripple effects of rising fuel costs on transportation and essential goods. Rising Global Pressure The sharp increase in domestic fuel prices has been largely attributed to escalating tensions in the Middle East, particularly involving Iran, which have disrupted global oil supply chains and pushed international prices higher. Officials noted that the pricing decision was taken after consultations with national leadership, including Prime Minister Shehbaz Sharif, amid growing fiscal constraints and commitments with the International Monetary Fund. Additional Measures Under Consideration To further reduce fuel consumption and ease pressure on the economy, the government is also reviewing nationwide market timings. The proposal, currently under consultation with provincial governments, aims to conserve energy and lower electricity generation costs. Economic Impact While the subsidy package offers temporary relief, analysts warn that soaring fuel prices will continue to drive inflation, increase transport costs, and strain household budgets. The targeted subsidies, though limited, are seen as a necessary step to balance economic realities with public support. As Pakistan navigates this challenging phase, the effectiveness of these measures will be closely watched by both citizens and economic experts.

Date: 2026-04-01

Details: Written by Shahnawaz Akhter Karachi, April 1, 2026 â€“ Negotiations between the Federal Board of Revenue (FBR) and the All Pakistan Gems and Jewelers Association (APGJA) over the controversial Section 175C of the Income Tax Ordinance, 2001 ended without agreement on Wednesday, raising the likelihood of enforcement action and nationwide protests by jewelers. APGJA President Qasim Shikarpuri confirmed that three rounds of talks were held with FBR Chairman Rashid Mehmood Langrial, but failed to yield any breakthrough. â€œDespite detailed discussions, no consensus could be reached,â€ he said, adding that the association remains firmly opposed to the new compliance mechanism. The primary point of contention is Section 175C, introduced through the Finance Act, 2025, which empowers tax authorities to deploy Inland Revenue officers at business premises for real-time monitoring. The law allows officials to oversee production, supply of goods, services, and unsold stock to assess tax liabilities more effectively. The APGJA has strongly rejected the move, terming it intrusive and harmful for business operations. According to Shikarpuri, jewelers are already fulfilling their tax obligations under existing laws and do not require physical monitoring at their shops. â€œWe cannot accept the deputation of tax officials inside our business premises under any circumstances,â€ he stated. Despite repeated assurances from the jewelry sector regarding compliance, the FBR has refused to withdraw or suspend the implementation of Section 175C. Officials believe the measure is necessary to broaden the tax base and curb underreporting in cash-intensive sectors such as gold and jewelry. The deadlock has heightened tensions, with the APGJA warning of a strong response if enforcement begins. The association is currently deliberating a protest strategy, which may include shutter-down strikes across major markets. However, Shikarpuri expressed cautious optimism that dialogue could still resume, urging authorities to find a balanced solution that ensures tax compliance without disrupting legitimate business activities.

Date: 2026-04-01

Details: Written by Shahnawaz Akhter Karachi, April 1, 2026 â€“ The Federal Board of Revenue (FBR) has implemented a major property tax relief package aimed at revitalizing Pakistanâ€™s real estate and construction sector, signaling a strong push to attract investment and ease financial pressures on builders and developers. According to sources within the FBR, multiple notifications under the relief package have already been issued, while additional measures are expected in the coming days. The initiative is part of broader efforts to stimulate economic activity and restore investor confidence in the property market. A key feature of the package is the proposed exemption from scrutiny on foreign inflows for property investment. Under this provision, non-resident Pakistanis would be allowed to invest in real estate without facing questioning from tax authorities. However, officials confirmed that a formal notification for this specific exemption has yet to be issued. In a significant operational step, the FBR has introduced an automated system through the Pakistan Revenue Automation Limited (PRAL) for generating Computerized Payment Receipts (CPRs) for non-resident investors. This system enables individuals to avail exemptions under Clause 111AC of the Income Tax Ordinance, 2001, streamlining tax compliance and reducing procedural delays. Additionally, the FBR has issued directives regarding withholding tax under Sections 236C and 236K, which apply to the sale and purchase of immovable property. Notably, higher withholding tax rates for non-filers will not be applicable to non-resident investors, providing a significant incentive for overseas Pakistanis to invest in the property market. Further relief has been extended to builders and developers through Circular No. 07 of 2025-26. The FBR clarified that those operating under the simplified tax regime of Section 7Fâ€”where income is calculated as a fixed percentage of gross receiptsâ€”can apply for exemption from withholding tax under Section 236C, provided they have no additional taxable income. Taxpayers can obtain exemption certificates by applying to the relevant Commissioner Inland Revenue under Section 159, enabling them to avoid advance tax deductions and improve project cash flows. Sources also revealed that the FBR has reduced property valuation rates nationwide, a move expected to further encourage investment and support growth in the construction sector.

Date: 2026-04-01

Details: Written by Shahnawaz Akhter Islamabad, April 1, 2026 â€“ The Federal Board of Revenue (FBR) has unveiled a draft taxation framework aimed at bringing Pakistani social media influencers into the formal tax net, targeting high-income earners who have largely remained undocumented. The FBR issued SRO 546(I)/2026, proposing amendments to the Income Tax Rules, 2002, to introduce a structured mechanism for taxing income generated through social media platforms. The initiative reflects the governmentâ€™s growing focus on capturing revenue from the rapidly expanding digital economy. New Chapter for Resident Influencers Under the proposed amendments, a new Chapter IIA will be inserted into the Income Tax Rules, specifically dealing with â€œremunerative social media contentâ€ earned by resident individuals. The rules will apply to Pakistani influencers and content creators earning income through interaction with local users on digital platforms. The scope of the law covers individuals generating revenue from platforms such as video-sharing sites, social networks, and other content-driven services where user engagement translates into income streams like advertising, sponsorships, and brand collaborations. Income Calculation Formula Introduced To standardize taxation, the FBR has proposed a formula-based approach for calculating minimum taxable income. According to the draft, taxable income will be determined as the difference between total remuneration and allowable expenses, with expenses capped at 30% of total revenue. The total remuneration will be assessed based on whichever is higher: the actual income received or a computed estimate. The estimate will be derived using a benchmark formula that includes revenue per mille (RPM), average views per content, and total number of posts published during the year. The RPM has been fixed at PKR 195 per 1,000 views for YouTube content, though it may be revised periodically by authorities. Advance Tax and Filing Requirements The proposed regime mandates quarterly advance tax payments by influencers. The advance tax will be calculated based on the prescribed formula and adjusted under existing provisions of the Income Tax Ordinance, 2001. Influencers will also be required to declare their income from social media activities in a dedicated section of their annual income tax return. If the declared income is lower than the computed benchmark, tax authorities will have the power to amend returns and recover outstanding liabilities. Broad Definitions to Capture Digital Earnings The draft law provides comprehensive definitions to avoid ambiguity. â€œSocial media platformâ€ is defined as any internet-based service that enables user interaction and monetizes engagement or data. Similarly, â€œremunerative social media contentâ€ includes any content that generates income in cash or kind, including advertisements, sponsorships, and collaborations. Public Feedback Invited The FBR has invited stakeholders to submit objections and suggestions within seven days of the notificationâ€™s publication. The feedback will be reviewed before finalizing the rules. Expanding the Tax Base This move signals a significant shift in Pakistanâ€™s taxation policy, as authorities increasingly turn toward the digital sector to enhance revenue collection. With social media influencing evolving into a lucrative profession, the proposed framework aims to ensure fair taxation and documentation of income streams that have long remained outside the formal economy. If implemented, the new regime could reshape the financial landscape for thousands of influencers, bloggers, and digital entrepreneurs across Pakistan.

Date: 2026-04-01

Details: Written by Shahnawaz Akhter Islamabad, April 1, 2026 â€“ In a landmark move to expand the tax net into the digital economy, the Federal Board of Revenue (FBR) has proposed the imposition of income tax on foreign social media content consumed in Pakistan. The proposal has been introduced through SRO 545(I)/2026, outlining draft amendments to the Income Tax Rules, 2002. According to the notification, the FBR aims to bring non-resident individuals and entities earning income from digital content into Pakistanâ€™s tax framework. The move is part of broader efforts to document the rapidly growing digital economy and ensure that revenue generated from Pakistani users contributes to the national exchequer. New Chapter Introduced for Digital Taxation The draft amendments propose the insertion of a new Chapter (Chapter VA) in the Income Tax Rules, specifically dealing with the taxation of â€œremunerative social media content.â€ This chapter introduces a special procedure for computing taxable income earned by non-resident content creators who engage with audiences in Pakistan. Under the proposed rules, any non-resident person deriving income through interaction with Pakistani users on social media platforms will fall within the tax ambit, provided certain thresholds are met. These thresholds define â€œsystemic and continuous engagementâ€ and include exceeding 50,000 users annually or 12,250 users in a single quarter. Income Calculation Mechanism The FBR has also introduced a structured formula to determine taxable income from social media content. The minimum taxable income will be calculated as the difference between total remuneration and allowable expenses, with expenses capped at 30% of total revenue. Notably, total remuneration will be determined based on whichever is higher: actual earnings or a calculated estimate using a standardized metric. The estimate will factor in revenue per mille (RPM), average views per post, and total content published during the year. The RPM has been set at PKR 195 per 1,000 views, subject to periodic revision. Advance Tax and Compliance Requirements The draft rules require affected individuals and entities to pay advance income tax on a quarterly basis. This tax will be calculated using the prescribed formula and adjusted according to provisions of the Income Tax Ordinance, 2001. Additionally, taxpayers will be required to declare their income from social media content in a dedicated section of their annual income tax return. In cases where declared income is lower than the calculated amount, tax authorities will have the power to rectify discrepancies and recover outstanding dues. Definitions and Scope The proposed amendments clearly define key terms such as â€œsocial media platform,â€ â€œsocial media content,â€ and â€œremunerative social media content.â€ These definitions broadly cover any digital content capable of generating revenue through advertising, sponsorships, or user engagement. The rules will apply to platforms that facilitate interaction and derive economic value from user participation and data monetization. This includes video-sharing platforms, social networking sites, and other digital content ecosystems. Stakeholder Feedback Invited The FBR has invited objections and suggestions from stakeholders within seven days of the notificationâ€™s publication. Feedback received during this period will be considered before finalizing the amendments. A Step Toward Digital Economy Taxation This initiative marks a significant step toward taxing cross-border digital services and aligning Pakistan with global trends in digital taxation. As more content creators and platforms monetize Pakistani audiences, the government seeks to ensure fair taxation and reduce revenue leakage. If implemented, the policy could have wide-ranging implications for international content creators, digital platforms, and even local influencers collaborating with foreign entities.

Date: 2026-04-01

Details: Written by Shahnawaz Akhter Islamabad, April 1, 2026 â€“ The Federal Board of Revenue (FBR) on Wednesday announced significant relief measures regarding withholding tax for property builders and developers, aiming to ease liquidity pressures and streamline tax compliance in the construction sector. The tax authority issued Circular No. 07 of 2025-26, clarifying the applicability of withholding tax under Section 236C of the Income Tax Ordinance, 2001, particularly in relation to persons falling under the special tax regime of Section 7F. Under Section 7F, builders and developers are taxed under a simplified regime where income is determined as a fixed percentage of gross receipts. However, concerns were raised that withholding tax under Section 236Câ€”normally adjustable against capital gainsâ€”was creating an additional financial burden for those already taxed under this regime. The FBR acknowledged these concerns and stated that in cases where builders and developers have already fulfilled their tax obligations under Section 7F and do not have any other taxable income, they may now apply for exemption from withholding tax under Section 236C. According to the circular, such taxpayers can seek an exemption certificate by applying to the relevant Commissioner Inland Revenue under Section 159 of the Income Tax Ordinance. This certificate would allow non-collection of advance tax on transactions involving the sale of immovable property, thereby easing cash flow constraints in ongoing projects. The FBR further directed Commissioners Inland Revenue to carefully evaluate each application on a case-by-case basis, ensuring all legal conditions are met before granting exemption. The authority emphasized that all prescribed timelines for issuing exemption certificates must be strictly followed. Tax experts have welcomed the move, stating that the relief is expected to boost construction activity, improve liquidity for developers, and encourage investment in the real estate sector. The clarification is also expected to reduce disputes between taxpayers and tax authorities while enhancing transparency in tax administration. Overall, the decision marks a positive step toward supporting Pakistanâ€™s construction industry, which plays a key role in economic growth and employment generation.

Date: 2026-04-01

Details: By Business Desk | Published Apr 1, 2026 | 8:28 am The government of Pakistan is preparing to increase petrol and diesel prices within days as it moves to partially pass higher import costs on to consumers while asking provincial administrations to share the subsidy burden. The decision follows a meeting led by Finance Minister Muhammad Aurangzeb with the countryâ€™s four chief ministers and senior federal officials to coordinate a targeted fuel-subsidy framework to protect vulnerable segments, such as motorcyclists and farmers. â€œPrices of both petrol and diesel are set to go up within days,â€ reported Dawn, adding that the size of the increase would depend on movements in global oil markets. Authorities are considering passing through the full impact of international price changes, though relief for selected groups remains under discussion. The government estimates the current price gap at about Rs. 100 per litre for petrol and more than Rs. 200 per litre for diesel compared with import-adjusted costs. Officials are weighing whether to pass on the full petrol adjustment and roughly half the diesel gap to consumers once updated calculations are finalized by the Petroleum Division and the Oil and Gas Regulatory Authority later this week. The government has already absorbed roughly Rs. 129 billion in fuel subsidies over the past three weeks. It plans to cap total support at around Rs. 158 billion, increasing pressure on provinces to contribute to further relief measures. Following consultations between President Asif Ali Zardari and Prime Minister Shehbaz Sharif, the federal government asked provinces to share the subsidy burden. Punjab and Sindh are expected to contribute based on population shares under the National Finance Commission formula, while Khyber Pakhtunkhwa and Balochistan would participate based on fuel consumption levels. Provincial governments agreed in principle to subsidize petrol for motorcyclists, with a uniform rationing mechanism expected to be announced by the prime minister. Sindh will extend diesel support to farmers through its Hari Card database, while Punjab and Khyber Pakhtunkhwa plan similar programs. Transport costs remain a key concern for policymakers, as diesel price adjustments could quickly feed into food inflation through higher freight charges. Provinces also agreed not to increase fares for Bus Rapid Transit systems, though officials warned the measure could create pricing disparities outside major urban centers. Officials estimate targeted subsidies could require Rs. 15 billion to Rs. 18 billion per week, potentially rising to Rs. 30 billion depending on global oil trends. Authorities believe the burden could be jointly absorbed through the end of the fiscal year in June, though uncertainty over international energy prices complicates planning. The meeting concluded with agreement to develop a framework for a coordinated targeted subsidy mechanism as part of broader petroleum pricing reforms aimed at reducing fiscal pressure while limiting inflationary spillovers.

Date: 2026-04-01

Details: By Jehangir Nasir | Published Apr 1, 2026 | 2:10 pm The federal government has finally completed the development of a petrol subsidy app to sell cheap petrol to low-income citizens. Sources told ProPakistani that the Pakistan Digital Authority has completed development of the application, which is currently undergoing final testing before its expected launch. App Enters Final Testing Phase Sources confirmed that the system has been tested at both the user and retailer levels to ensure operational efficiency. Security protocols and data verification mechanisms have also been rigorously examined. Retailers participated in testing fuel transaction procedures and quota verification systems, while users evaluated key features including registration, identity verification, and eligibility checks. Authorities have also conducted load testing to assess performance under heavy traffic, simulating simultaneous access by thousands of users. Data Integration Data entry for potential beneficiaries is currently in progress. Officials are integrating records from the Benazir Income Support Program (BISP) along with databases developed during the COVID-19 pandemic and recent flood relief operations to accurately identify deserving households. Under the proposed mechanism, only government-designated low-income individuals will qualify for the subsidy. Targeted Relief for Motorcycles and Rickshaws The plan primarily focuses on motorcycle and rickshaw owners, who are among the most affected by rising fuel costs. A fixed petrol quota will be allocated to eligible users. Applicants must have vehicles registered in their own names, and relevant departments have been directed to facilitate vehicle registration procedures. Provincial governments have also been instructed to support implementation and streamline verification processes. Alongside the subsidy initiative, the government is reviewing other measures to reduce fuel consumption, including smart lockdowns and demand-management strategies. Although fuel supplies remain adequate nationwide, officials remain concerned about the growing financial pressure on the national treasury. Authorities are evaluating options such as maintaining existing petrol prices for low-income groups while allowing price adjustments for other consumers. The Prime Minister has directed officials to prepare contingency plans to manage the situation and ensure targeted relief without burdening public finances.

Date: 2026-03-31

Details: Written by Shahnawaz Akhter Karachi, March 31, 2026 â€“ The Institute of Cost and Management Accountants of Pakistan (ICMAP) has urged the federal government to introduce a comprehensive tax incentive scheme for cryptocurrency and fintech in the upcoming Budget 2026â€“27, aiming to bring digital assets into the formal economy. In its budget recommendations, ICMAP emphasized that Pakistanâ€™s fintech ecosystem is expanding rapidly, yet high taxation and regulatory uncertainty continue to hinder formal growthâ€”particularly in cryptocurrency trading and blockchain-based financial services. The institute proposed the introduction of a dedicated Financial Sector Incentive Scheme to support innovation and investment in the digital economy. ICMAP suggested offering qualifying fintech companies concessionary corporate tax rates ranging between 10% and 15%, or implementing a phased taxation model, provided that firms meet licensing and regulatory compliance requirements. According to the institute, such measures would not only promote transparency but also encourage voluntary compliance among crypto traders and service providers. The policy proposal is designed to help formalize digital financial activities, reduce reliance on informal channels, and expand the countryâ€™s taxable base. By integrating cryptocurrency trading into the regulated financial system, Pakistan can improve monitoring, reporting, and governance within the sector. ICMAP also highlighted the expected economic benefits of the proposed framework. It estimated that the initiative could generate Rs5â€“10 billion in new taxable business activity over the next five years. Additionally, it would contribute to the expansion of the formal digital economy, increase investor confidence, and enhance the adoption of modern financial technologies. Experts believe that a well-regulated incentive-driven approach could position Pakistan as a competitive player in the global fintech and digital assets space while ensuring sustainable long-term revenue growth for the government.

Date: 2026-03-31

Details: Written by Faisal Shahnawaz Islamabad, March 31, 2026 â€“ The Federal Board of Revenue (FBR) has introduced a comprehensive procedure for the use and disposal of confiscated vehicles with tampered chassis numbers through Customs General Order (CGO) No. 04 of 2026. The new policy, effective from April 1, 2026, aims to ensure transparency, uniformity, and accountability in handling such vehicles across Pakistan. Priority Use by FBR Formations Under the new guidelines, vehicles with tampered or altered chassis numbersâ€”often seized in anti-smuggling operationsâ€”will first be allocated for official use within the Customs Wing of the FBR. Formations must submit detailed proposals justifying their operational needs, which will be reviewed by a committee headed by the Member (Customs Operations). Vehicles above 1800cc will be reserved primarily for enforcement and anti-smuggling units, while officers in BS-19 grade may be allocated vehicles up to 1800cc for mobility purposes. Special provisions have also been made for hard-area postings, particularly in remote regions of Balochistan and Khyber Pakhtunkhwa. Digital Monitoring and Reporting System To enhance transparency, the FBR will launch a digitized system for tracking confiscated vehicles. Each vehicleâ€™s detailsâ€”including forensic reports, photographs, condition, and litigation statusâ€”will be uploaded to ensure proper record-keeping. Access to this system will also be extended to the Cabinet Division for oversight and coordination. Disposal of Surplus Vehicles After fulfilling internal requirements, leftover vehicles with no pending legal cases will be offered for sale strictly to government and semi-government entities. These include public sector departments and government-owned educational, medical, and scientific institutions. Importantly, the FBR has barred the sale of such vehicles to private individuals. Vehicles will be sold at subsidized ratesâ€”15% of the reserve price for federal departments and 50% for provincial departments. Reserve prices will be determined based on vehicle condition, model, and market benchmarks, following established customs valuation procedures. Strict Payment and Delivery Mechanism Payments must be made exclusively through official government accounts and verified by the Accountant General Pakistan Revenues (AGPR). Upon confirmation, vehicles will be delivered to authorized representatives only after registration with the Excise and Taxation Department in Islamabad. The purchasing departments are required to formally acknowledge receipt within three weeks, ensuring proper documentation and transparency. Final Disposal and Dismantling At the end of their service life, tampered vehicles will be dismantled under strict supervision by designated customs committees. Vehicles above 1800cc will typically be dismantled after 20 years, while those up to 1800cc will be disposed of after 15 years, subject to certain conditions. Additionally, vehicles such as buses and vans that remain unsold may be provided free of cost to government-run institutions on the recommendation of relevant ministries. Any vehicle not disposed of within five years will be dismantled as per government policy. Oversight and Compliance The FBR has emphasized strict compliance with the new procedure. Regular audits will be conducted to prevent misuse, and violations may lead to cancellation of allocations, seizure of vehicles, and disciplinary action against responsible officials. The new framework reflects the FBRâ€™s commitment to improving governance, enhancing transparency, and ensuring efficient utilization of confiscated assets within the public sector.

Date: 2026-03-31

Details: Written by Shahnawaz Akhter Karachi, March 31, 2026 â€“ The Federal Board of Revenue has issued a new valuation ruling to determine customs values for imported beverages of foreign brands, aiming to streamline duty and tax collection at the import stage. The ruling, issued by the Directorate General of Customs Valuation in Karachi, updates the customs values for aerated waters and soft drinks imported from all origins. The move replaces the outdated Valuation Ruling No. 974/2016, which had remained in effect for over nine years. ðŸ“¦ Brands Covered Under New Valuation The updated rulingâ€”Valuation Ruling No. 2052/2026â€”applies to a wide range of globally recognized beverage brands, including Pepsi, Coca-Cola, Mirinda, Fanta, Sprite, and 7UP. It also includes flavored drinks such as Kinza, Glinter, Freez, and tonic beverages under the Schweppes label, along with other international brands. ðŸ” Why the Revision Was Needed According to officials, the previous valuation framework had become outdated due to evolving global market dynamics, introduction of new brands, and changing import patterns. To ensure transparency and accuracy, the Directorate initiated a fresh valuation exercise involving extensive stakeholder consultations. Importers and industry representatives maintained that their declared transaction values were genuine and aligned with international trends, rejecting concerns of under-invoicing. They also emphasized the need to incorporate emerging brands into the valuation system to keep it relevant. ðŸ“Š Methodology and Evaluation Process The customs authorities conducted a detailed analysis of import data from the past 90 days, alongside reviewing documents submitted by stakeholders. Market surveys and online price comparisons were also carried out to verify actual retail and wholesale prices. The valuation process followed the legal framework outlined under Section 25 of the Customs Act, 1969. However, key methodsâ€”such as transaction value, identical goods, and similar goods approachesâ€”were deemed insufficient due to inconsistencies and lack of reliable comparative data. Ultimately, the Directorate relied on market inquiry-based valuation under Section 25(7), which involved field visits to markets and collection of real-time price data. This comprehensive approach enabled the creation of a supplier-wise database to ensure fair and transparent valuation. âš–ï¸ Impact on Imports and Market The revised customs values will directly impact the calculation of duties and taxes on imported beverages, potentially affecting retail prices in the local market. Importers are now required to comply with the updated benchmarks when declaring goods at customs. ðŸ“Œ Outlook The FBR stated that the new valuation ruling reflects current international pricing trends and aligns with statutory requirements. Authorities also indicated that periodic updates will be made to keep pace with evolving market conditions and prevent revenue leakage.

Date: 2026-03-30

Details: Written by Shahnawaz Akhter If you are a salaried individual earning above the threshold of Rs. 600,000 annually, understanding how the Federal Board of Revenue (FBR) calculates your income is essential for accurate tax return filing in tax year 2026. Under Section 149 of the Income Tax Ordinance, 2001, your employer plays a central role in determining and deducting your salary tax. ðŸ§¾ How Salary Tax is Calculated (Section 149) FBR does not directly calculate your salary tax each month. Instead, your employer estimates your annual income and deducts tax at source. ðŸ’¡ Key Formula Used by FBR: Average Tax Rate = A / B â€¢ A = Tax payable on your estimated annual salary â€¢ B = Your estimated salary income (including applicable adjustments) ðŸ‘‰ This means: â€¢ Your employer estimates your total yearly income â€¢ Then applies a progressive tax rate â€¢ And deducts tax monthly based on an average rate ðŸ‘¨ðŸ’¼ What Employers Are Responsible For Under Section 149(1), every employer must: â€¢ Deduct tax at the time of salary payment â€¢ Use the average tax rate â€¢ Adjust for: o Previously deducted tax o Excess or short deductions o Tax credits (e.g., under Sections 61 & 63) ðŸ‘‰ This ensures your tax is evenly distributed throughout the year instead of a lump sum at year-end. ðŸ”„ Adjustments in Salary Tax FBR allows employers to adjust deductions during the year based on: â€¢ Tax already withheld â€¢ Any excess or deficiency in previous deductions â€¢ Failure to deduct tax earlier ðŸ“Œ These adjustments help avoid overpayment or underpayment when filing your final return. ðŸ’° Special Rule for High Pension Income Under Section 149(1A): â€¢ If a retired employee under age 70 earns pension above Rs. 10 million annually â€¢ Tax is deducted only on the amount exceeding Rs. 10 million ðŸ‘‰ This rule ensures fair taxation on high pension earners while protecting lower income levels. ðŸ§‘â€âš–ï¸ Tax on Directors and Board Fees Under Section 149(3): â€¢ Any payment for: o Directorship fee o Board meeting attendance â€¢ Is subject to a flat 20% tax deduction ðŸ’¡ This tax is: â€¢ Deducted at source â€¢ Fully adjustable during return filing ðŸ” Is This Tax Final? No. The tax deducted under salary provisions is not final. âœ” You can: â€¢ Claim refunds if overpaid â€¢ Pay additional tax if underpaid â€¢ Adjust tax credits during return filing ðŸ“Œ Important Tips for Tax Year 2026 â€¢ Always verify your salary certificate from your employer â€¢ Ensure correct tax deductions under Section 149 â€¢ Maintain proof of: o Tax withheld o Investments for tax credits â€¢ File your return before the due date to avoid penalties ðŸ“Š Quick Checklist âœ” Is your salary above Rs. 600,000? âœ” Is your employer deducting tax monthly? âœ” Are adjustments being made correctly? âœ” Have you received your annual tax certificate? ðŸ‘‰ If you answered yes to all, youâ€™re on the right track for tax filing 2026. âš–ï¸ Final Thoughts The FBR uses a structured and employer-based system under Section 149 to ensure that salary income is taxed progressively and fairly. Understanding how your income is calculated helps you: â€¢ Avoid penalties â€¢ Claim rightful refunds â€¢ Stay compliant with tax laws

Date: 2026-03-30

Details: Written by Shahnawaz Akhter Karachi, March 30, 2026 â€“ The Federal Board of Revenue (FBR) has issued fresh customs values for LED bulbs and tube lights through Valuation Ruling (VR) 2055/2026 to streamline import assessments and align them with prevailing market trends. The new values were notified by the Directorate General of Customs Valuation via ruling dated March 19, 2026, replacing the earlier Valuation Ruling No. 1192/2017. The revision has been made under Section 25A of the Customs Act, 1969 to ensure fair and transparent determination of duties and taxes at the import stage. Officials stated that the revision was initiated after multiple representations from importers, who highlighted significant changes in international prices of LED lighting products. The Directorate conducted a detailed analysis of import data spanning 90 days, along with market inquiries and stakeholder consultations, to arrive at updated benchmark values. According to the ruling, traditional valuation methods such as transaction value and identical goods methods were found inapplicable due to inconsistent data. As a result, customs values were determined under Section 25(7) of the Customs Act based on market inquiry, ensuring realistic and enforceable benchmarks. Revised Customs Values for LED Bulbs (China Origin â€“ Low-End Brands) S. No. Wattage Range Customs Value (US$/Piece) 1 1â€“3 Watts 0.19 2 3.1â€“6 Watts 0.23 3 6.1â€“8 Watts 0.35 4 8.1â€“13 Watts 0.56 5 13.1â€“18 Watts 0.72 6 18.1â€“25 Watts 1.12 7 25.1â€“35 Watts 1.57 8 35.1â€“45 Watts 2.00 9 45.1â€“65 Watts 2.30 10 Above 65 Watts Applicable as per ruling Revised Customs Values for LED Tube Lights (China Origin â€“ Low-End Brands) S. No. Wattage Range Customs Value (US$/Piece) 1 5â€“10 Watts 0.80 2 10.1â€“20 Watts 1.10 3 20.1â€“30 Watts 1.55 4 30.1â€“40 Watts 2.05 The FBR clarified that these values serve as minimum benchmarks for customs assessment. If the declared import value is higher, duty and taxes will be calculated based on the higher invoice value. Importantly, the ruling applies specifically to low-end Chinese brands and excludes internationally recognized brands such as Philips, Osram, GE, and Samsung, even if manufactured in China. Market analysts believe the updated valuation will help curb under-invoicing, improve revenue collection, and create a level playing field for importers while reflecting current global price dynamics in the LED lighting sector.

Date: 2026-03-30

Details: Written by Shahnawaz Akhter Karachi, March 30, 2026 â€“ The Federal Board of Revenue (FBR) has revised customs values of imported polyester fabrics through a new valuation ruling aimed at ensuring transparency and uniformity in duty assessment at the import stage. The updated values were issued by the Directorate General of Customs Valuation under Valuation Ruling (VR) 2058/2026 dated March 25, 2026. The ruling covers polyester fabrics excluding shirting and suiting categories and has been implemented under Section 25A of the Customs Act, 1969. According to officials, the new ruling replaces earlier Valuation Rulings 1385/2019 and 1808/2023, following extensive consultations with stakeholders and a detailed review of import data over the last 90 days. The revision was necessitated after importers raised concerns over outdated values and discrepancies affecting export documentation under the Export Facilitation Scheme (EFS). Authorities stated that multiple valuation methods were examined; however, due to insufficient transaction data, customs values were determined using the â€œsimilar goodsâ€ method under Section 25(6) of the Customs Act. This approach ensures fair valuation based on comparable imported goods. Key Revised Customs Values (C&F) S. No. Description of Polyester Fabric Category Condition Customs Value (US$/Kg) 1 Unbleached Grey Fabric (Greige) Up to 7 Sqm/Kg 3.30 2 Unbleached Microfiber Grey Fabric More than 7 Sqm/Kg 2.05 3 Bleached Polyester Fabric Up to 7 Sqm/Kg 3.70 4 Bleached Microfiber Polyester Fabric More than 7 Sqm/Kg 2.38 5 Dyed Polyester Fabric Up to 7 Sqm/Kg 4.40 6 Dyed Microfiber Polyester Fabric More than 7 Sqm/Kg 3.20 7 Printed Polyester Fabric Up to 7 Sqm/Kg 4.75 8 Printed Microfiber Polyester Fabric More than 7 Sqm/Kg 3.25 The FBR clarified that these values apply to all origins and will serve as the minimum benchmark for duty and tax calculation. However, if the declared invoice value exceeds the notified customs value, the higher value will be used for assessment in line with legal provisions. Importantly, the ruling does not apply to polyester fabrics used for shirting and suiting, which remain subject to separate valuation guidelines. Market experts believe the updated valuation will help curb under-invoicing while aligning import values with current international market trends. The move is also expected to streamline customs clearance and reduce disputes between importers and authorities.

Date: 2026-03-30

Details: Written by Faisal Shahnawaz Karachi, March 30, 2026 â€“ Pakistan Customs has announced a major public auction of seized passenger buses, trucks, trailers, and commercial transport vehicles scheduled to take place on April 6, 2026, at the Customs Enforcement Collectorate, Gadani. The auction is expected to attract transporters, logistics companies, intercity bus operators, industrial buyers, and investors looking for affordable commercial fleet options. According to Pakistan Customs, dozens of old and used Hino, Daewoo, Yutong, and Hyundai Shehzore vehicles will be offered for bidding. These vehicles were seized in various enforcement operations and are now being auctioned under customs rules after completion of legal formalities. Many units include complete commercial buses and heavy trucks, making it one of the largest auctions of heavy transport vehicles announced this year. The auction list includes multiple Hino passenger buses, such as a bus previously registered under LIT-7455, along with several Daewoo buses with registrations including BSB-951, BSE-088, BSH-999, and BSB-919â€”all listed as old and used units pending final clearance requirements. A large number of six-wheeler and ten-wheeler Hino trucks will also go under the hammer, including units bearing registration numbers TAL-675, TRK-837, TKW-288, TAT-144, and TMA-494, offering transporters an opportunity to acquire heavy-duty vehicles at competitive prices. Many of the vehicles come paired with mounted containers, making them particularly attractive for long-haul transport businesses. Examples include trucks mounted with 40-foot containers, such as the Hino trailer previously registered as TMN-090 and the Hino truck with container Z-7775, providing ready-to-use commercial solutions for cargo operators. In addition to buses and trucks, the auction features Yutong Master buses with registrations BTA-722, BTA-300, and LES-6014. These models are widely used in Pakistanâ€™s intercity transport sector and are expected to generate strong interest from operators looking to expand their fleets at lower acquisition costs. Pakistan Customs officials noted that the auction also includes a series of leftover lots from previous seizures. These comprise additional Daewoo passenger buses, large container vehicles, and commercial trucks with various chassis configurations. Vehicles such as the Daewoo bus BSB-012 and a 12-wheeler container vehicle TLT-535 are part of this category, broadening the range of options available to buyers. The department encouraged interested buyers to visit Gadani before the auction date to inspect the vehicles physically. All units will be sold on an â€œas-is where-isâ€ basis, and potential bidders are advised to verify chassis numbers, engine conditions, and documentation status. Many vehicles are listed as â€œSubject to FSLâ€, indicating pending laboratory verification of identification details. Industry experts say the auction is likely to receive strong participation due to rising prices of new commercial vehicles in Pakistan. Import restrictions, higher duties, and currency pressures have pushed transporters toward more affordable alternatives, making customs auctions an attractive procurement channel. The April 6 auction is expected to generate significant revenue for the national exchequer while also helping renew the supply of commercial vehicles into the market. Pakistan Customs has termed it an important part of its regular enforcement and disposal operations aimed at transparency and efficient asset management. For transporters, fleet operators, and commercial buyers, the Gadani auction presents a rare opportunity to secure passenger buses, trucks, and trailers at competitive rates in a high-demand market.

Date: 2026-03-29

Details: Written by Shahnawaz Akhter Islamabad, March 29, 2026 â€“ The Federal Board of Revenue (FBR) has so far been unable to enforce newly introduced restrictions on ineligible persons under Section 114C of the Income Tax Ordinance 2001 for the fiscal year 2025â€“26, raising concerns about regulatory delays and tax compliance gaps. The landmark provision, introduced through the Finance Act 2025, places responsibility on the FBR to restrict certain high-value economic transactions for individuals classified as ineligible taxpayers. However, despite the law being incorporated into the tax framework, its enforcement remains stalled due to the absence of an official notification in the government gazette. Under Section 114C, multiple financial and economic restrictions are outlined to curb undocumented wealth and promote tax compliance. These include limitations on the purchase and registration of motor vehicles exceeding a certain value, restrictions on property transactions above defined thresholds, and controls on investments in securities, mutual funds, and related financial instruments. Additionally, the law places caps on cash withdrawals from bank accounts to discourage large-scale untraceable transactions. The provisions also define â€œeligibleâ€ and â€œineligibleâ€ persons based on their tax filing status, declared income, and financial transparency. Eligible individuals are those who have filed tax returns and can justify their financial capacity through wealth statements or investment declarations, while ineligible persons are those lacking such documentation. Despite the clarity of the legislation, its enforcement hinges on a formal notification by the federal government specifying the effective date and operational thresholds. Without this notification, regulatory bodies such as vehicle registration authorities, property registrars, and financial institutions are unable to implement the restrictions. Experts believe that the delayed implementation is hampering efforts to broaden the tax base and reduce the informal economy. Section 114C was designed to enhance financial transparency by linking major economic activities with verified tax compliance. The law also outlines significant thresholds, including a limit of approximately Rs7 million for vehicle transactions, Rs100 million for property dealings, and Rs50 million for investments in financial securities, along with annual cash withdrawal limits. While policymakers view Section 114C as a critical tool for improving tax discipline, the current enforcement gap highlights administrative challenges. Stakeholders are now awaiting swift government action to issue the necessary notification, enabling full implementation of the law and strengthening Pakistanâ€™s tax compliance framework.

Date: 2026-03-29

Details: Written by Shahnawaz Akhter Karachi, March 29, 2026 â€“ The Institute of Cost and Management Accountants of Pakistan has proposed an innovative consumer lottery scheme aimed at improving tax compliance and documenting retail transactions across the country. The recommendation has been submitted as part of budget proposals for the Federal Budget 2026â€“27 to the Ministry of Finance Pakistan. Under the proposal, a National Consumer Receipt Lottery would be introduced, allowing shoppers to enter a draw using verified purchase receipts. Each receipt would serve as a ticket, giving consumers a chance to win periodic cash prizes. The initiative is designed to incentivize buyers to demand proper receipts from retailersâ€”effectively turning everyday consumers into active participants in the tax system. ðŸ’¡ Why This Matters A significant portion of Pakistanâ€™s retail economy remains undocumented, leading to major losses in sales tax revenue. By encouraging receipt-based transactions, the scheme could help formalize retail activity and improve transparency. ðŸŒ Global Success Stories Countries such as Taiwan, Brazil, Portugal, Czech Republic, and China have successfully implemented similar lottery-based systems. These programs significantly improved VAT compliance and boosted government revenues. ðŸ“Š Policy Rationale â€¢ Encourages consumers to request official receipts â€¢ Increases sales documentation and VAT compliance â€¢ Promotes citizen participation in tax enforcement â€¢ Raises awareness about tax transparency ðŸ“ˆ Expected Impact If implemented, the scheme could: â€¢ Unlock substantial revenue from undocumented retail sales â€¢ Expand the national tax base by formalizing the informal sector â€¢ Improve voluntary compliance among businesses and consumers â€¢ Strengthen long-term sustainability of tax collection ðŸš€ Implementation Strategy ICMAP suggests launching the program initially in major urban centers like Karachi, Lahore, and Islamabad before expanding it nationwide. As Pakistan seeks to enhance revenue collection and reduce tax evasion, this consumer-driven approach could prove to be a game-changer in documenting the countryâ€™s vast retail economy while empowering citizens to play a direct role in fiscal reform.

Date: 2026-03-27

Details: Written by Shahnawaz Akhter Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial has issued key directives to address long-standing tax and operational challenges faced by Karachiâ€™s business community during his visit to the Karachi Chamber of Commerce and Industry (KCCI) on March 26, 2026. The high-level delegation, which included senior officials from Customs and Inland Revenue, engaged in detailed discussions with KCCI leadership. Business representatives presented a comprehensive overview of pressing concerns affecting commercial activity in Karachi, highlighting delays in tax refunds, complications in super tax installments, and procedural bottlenecks hampering smooth business operations. Responding to these concerns, the FBR chairman directed the Chief Commissioner of the Large Taxpayer Office (LTO) Karachi and the Chief Collector Customs Appraisement (South) to urgently prioritize and resolve the identified issues. The move underscores FBRâ€™s intent to improve tax administration efficiency and foster a more business-friendly environment. Langrial assured the business community that all grievances raised during the session would be thoroughly reviewed and addressed on a priority basis. He instructed Inland Revenue Service (IRS) and Customs officials to conduct a comprehensive assessment and implement timely solutions to ease difficulties faced by taxpayers. Emphasizing the importance of liquidity for businesses, the chairman reaffirmed that all legitimate tax refund claims would be processed swiftly, strictly in accordance with legal and procedural requirements. He noted that efficient refund mechanisms are essential for sustaining business growth and maintaining investor confidence. At the same time, Langrial reiterated FBRâ€™s commitment to ensuring full tax compliance, stating that all due taxes would be collected in line with applicable laws. He stressed that facilitation and enforcement must go hand in hand to maintain a balanced fiscal system. Highlighting governance reforms, the FBR chief announced a zero-tolerance policy against corruption within the organization. He made it clear that officials are strictly prohibited from creating unnecessary hurdles or seeking undue favors from taxpayers, reinforcing the authorityâ€™s commitment to transparency and accountability. The chairman also encouraged members of the business community to report any instances of misconduct, assuring that strict disciplinary action would be taken against those found guilty. The engagement signals a renewed effort by FBR to rebuild trust with Karachiâ€™s business sector and streamline tax-related processes critical for economic stability.

Date: 2026-03-27

Details: â€¢ Reserves fell to $698.35 billion, led largely by the value of the central bankâ€™s gold holdings dropping by $13.5 billion week-on-week to $117.2 billion Reuters Published March 27, 2026 Updated about 14 hours ago MUMBAI: Indiaâ€™s foreign exchange reserves fell below the $700 billion mark in the week ended March 20, the first such fall since January and downfrom $709.76 billion a week earlier, data released by the Reserve Bank of India showed on Friday. Reserves fell to $698.35 billion, led largely by the value of the central bankâ€™s gold holdings dropping by $13.5 billion week-on-week to $117.2 billion. Meanwhile, the value of foreign currency assets rose by $2.1 billion week-on-week. In the week to which the data pertained, gold prices had declined by 10% and the rupee fell to its then-record low of 93.7350 as worries over an elongated Iran war lifted oil prices, hurting Indian assets across the board. The currency has since extended its losses, falling to a record low of 94.84 on Friday, down over 5% year-to-date. India forex reserves adequate to cushion against external shocks, central bank report says Before headwinds emerging from the Iran war pummeled the rupee, Indiaâ€™s FX reserves had hit a record high of $728.5 billion in late February. The RBI intervened in the foreign exchange market to defend the rupee, but bankers have pointed out that the central bank has adopted a more passive approach over recent trading sessions. Changes in foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of other currencies held in its reserves. Foreign exchange reserves include Indiaâ€™s Reserve Tranche position in the International Monetary Fund. FOREIGN EXCHANGE RESERVES (in million U.S. dollars) ________________________________________ March 20 March 13 2026 2026 ________________________________________ Foreign currency assets 557,695 555,568 Gold 117,186 130,681 SDRs 18,632 18,697 Reserve Tranche Position 4,833 4,814 ________________________________________ Total 698,346 709,759

Date: 2026-03-09

Details: Karachi, March 9, 2026 â€“ Bank Alfalah Limited has disclosed tax contingencies for the calendar year ended December 31, 2025, in its annual financial statements filed with the Pakistan Stock Exchange (PSX). The bankâ€™s income tax assessments have been finalized up to tax year 2025. However, for tax years 2008, 2014, 2017, 2019, and 2021 to 2025, the tax authorities have raised issues including default in WWF payments, allocation of expenses to dividends and capital gains, treatment of dividend income from mutual funds, and disallowance of leasehold improvements. These matters have resulted in a tax demand of Rs. 2,844.103 million, up from Rs. 1,217.274 million at the end of 2024, net of relief provided in appeals. The bank has filed appeals with the Commissioner Appeals and Tribunal and remains confident of a favorable outcome, so no provision has been made in the financial statements. Additionally, Bank Alfalah received orders from a provincial tax authority for the periods July 2011 to December 2020, demanding sales tax on banking services and penalties of Rs. 763.312 million (excluding default surcharge). Appeals for July 2011 to June 2014 are pending before the Commissioner Appeals, while disputes from July 2014 to December 2020 have been filed with the Sindh High Court. These cases have been remanded to the adjudicating authority after year-end. The bank has not made any provisions for these matters, expecting a favorable resolution. For accounting years 2016, 2017, and 2018, the bank received multiple tax orders demanding sales tax, further tax, and penalties totaling over Rs. 25 million, all pending before the Commissioner Appeals and Appellate Tribunal. Other addbacks raised by tax authorities for various assessment years are under appeal with the Commissioner of Inland Revenue (Appeals), Appellate Tribunal Inland Revenue (ATIR), High Court of Sindh, and the Supreme Court of Pakistan. Management believes these issues will be settled in the bankâ€™s favor and has not made provisions in this regard. Bank Alfalah emphasizes that all tax disputes are actively under appeal, and the bank remains committed to resolving these matters through the legal process.

Date: 2026-03-08

Details: Sindh has introduced amendments in the Motor Vehicles (Amendment) Act, 2026, making third-party liability insurance mandatory for all vehicles registered in the province to enhance financial protection for road accident victims. According to a statement released on Saturday, the Securities and Exchange Commission of Pakistan (SECP) has been continuously engaging with provincial governments to strengthen the legal framework and ensure effective enforcement of mandatory motor third-party insurance across the country. Through this amendment to the Provincial Motor Vehicles Ordinance, 1965, a new Section 67-H has been introduced, requiring third-party liability insurance for motor vehicles. Under the revised framework, no vehicle will be registered, transferred, or allowed to pay annual token tax without a valid insurance policy covering third-party risks. Third-party motor insurance is a basic and affordable policy that covers legal liabilities for damage to property, injuries, or death caused to another person in an accident. The amendment also introduces defined compensation limits on a no-fault basis, ensuring timely financial relief to victims or their legal heirs. The compensation includes Rs700,000 in case of death and Rs500,000 for permanent disability. With this reform, Sindh has become the first province in Pakistan to effectively enforce mandatory motor third-party liability insurance through a strengthened legal framework. The SECP has operationalised the Motor Insurance Repository (MIR), a centralised electronic database that records motor insurance policies issued by insurers registered with the commission. The system enables digital verification of insurance policies and helps ensure compliance with minimum legal requirements at the time of vehicle registration. SECP is also working with the Punjab Provincial Transport Authority to link the vehicle route permit regime with the Motor Insurance Repository for online validation of insurance policies, further strengthening enforcement mechanisms nationwide.

Date: 2026-03-08

Details: ISLAMABAD: The Supreme Court of Pakistan has ruled that registering a First Information Report (FIR) or initiating criminal proceedings in tax-related matters is illegal if tax liability has not first been determined through proper assessment or adjudication under tax laws. A two-member bench comprising Justice Malik Shahzad Ahmad Khan and Justice Aqeel Ahmed Abbasi granted pre-arrest bail to the petitioner in a case involving allegations of tax evasion and money laundering. The court observed that authorities had not yet established whether the assets allegedly acquired by the petitioner actually constituted proceeds of crime. Details of the Case According to case records, the petitioner maintained several personal and business bank accounts during Tax Years 2017 and 2018. He submitted income tax returns declaring Rs7,313,500 as total income for Tax Year 2017 and Rs6,985,000 for Tax Year 2018 under the Income Tax Ordinance, 2001. However, scrutiny of his bank accounts revealed significantly higher financial activity. Authorities found total credits of Rs153.4 million between July 2016 and June 2017, and Rs246.1 million between July 2017 and June 2018. Investigators alleged that the petitioner had concealed income amounting to Rs385.22 million and converted the funds into assets and business investments. The alleged tax evasion was calculated at Rs50.67 million for Tax Year 2017 and Rs83.34 million for Tax Year 2018. Based on these allegations, an FIR was registered on February 10, 2022, under provisions of the Anti-Money Laundering Act, 2010 as well as sections related to tax offences under the Income Tax Ordinance. Supreme Court Observations In the judgment authored by Justice Aqeel Ahmed Abbasi, the court stated that the registration of the FIR and initiation of criminal proceedings violated the Supreme Courtâ€™s earlier ruling in the Taj International (Pvt) Ltd case. The court emphasized that disputes involving financial matters, alleged concealment of income, or tax evasion should first be handled by civil courts or specialized tax forums. These bodies are responsible for determining tax liability through assessment proceedings and judicial evaluation of evidence. Tax Assessment Must Come First The court noted that allegations of tax evasion require proper assessment under the Income Tax Ordinance, 2001 before criminal liability can be considered. Similarly, money laundering charges depend on establishing that the funds involved represent proceeds of crime derived from a predicate offence under the Anti-Money Laundering Act, 2010. Since the authorities had not completed the necessary pre-trial steps or tax assessment procedures, the court observed that initiating criminal proceedings at this stage was premature. The bench also noted that where cases are primarily based on documentary evidence, custodial interrogation is generally unnecessary, reinforcing the decision to grant pre-arrest bail to the petitioner.

Date: 2026-02-19

Details: Sohail Sarfraz Published about 2 hours ago ISLAMABAD: The Federal Board of Revenue (FBR) Wednesday night issued a comprehensive list of businesses including professionals and service providers to register, install and integrate their electronic invoicing hardware and software with the Boardâ€™s computerized system for the purpose of income tax. According to an SRO.288(I)/2026 issued late night (Wednesday), the integrated enterprises (businesses) through Boardâ€™s online system shall provide information of their outlets, points of sale or electronic invoicing transactions. No supply shall be made by the integrated enterprises except through the integrated outlets, point of sale or electronic invoice or bill issuing machines. The businesses required to be integrated with the FBRâ€™s system included restaurants, hostels, motels, guest houses, marriage halls, marquees, clubs including race clubs, inter-city travel by road, courier services and cargo services, services provided for personal care by beauty parlours, clinics and slimming clinics, massage centres, pedicure centres, all medical service providers including dentists, physiotherapists, plastic surgeons, hair implant surgeons and veterinary doctors, pathological laboratories. Medical diagnostic laboratories including X Rays, CT Scan. M.R lmagingetc, private hospitals or medical care centres providing medical consultation, hospitalization or other ancillary services, health clubs, gyms physical fitness centres, swimming pools and multipurpose clubs such as Lahore gymkhana, Islamabad club, Chenab Club, Karachi Gymkhana, Royal Palm Lahore, Polo Club etc operated by any civilian/ non-civilian administration, photographers, videographers and event managers, accountants, retailers including manufacturer cum-retailer, wholesaler-cum retailers, importer-cum-retailer or such other person who combines the activity of retail sale with another business activity and foreign exchange dealers/exchange companies, private schools, colleges, universities, professional institute/vocational training centres. Copyright Business Recorder, 2026

Date: 2026-02-18

Details: Written by Shahnawaz Akhter Islamabad, February 18, 2026 â€“ The Federal Board of Revenue (FBR) and the National Database and Registration Authority (NADRA) have established a secure electronic module for sharing citizensâ€™ information, aimed at improving data accessibility, transparency, and operational efficiency across government departments. According to an internal communication issued by the FBR, the new data-sharing system has initially been deployed at the FBR Headquarters and will be expanded to field formations in subsequent phases. Developed and implemented by NADRA, the module enables efficient and timely processing of official data requisitions, while ensuring strict confidentiality, cybersecurity safeguards, and protection against unauthorized access. The FBR emphasized that the initiative aligns with the governmentâ€™s broader digital transformation strategy, designed to modernize public sector operations and enhance inter-agency coordination. The system will support tax enforcement, compliance monitoring, and verification processes, allowing tax authorities to access accurate and real-time citizen data for official purposes. Under the new framework, field offices of the FBR have been directed to forward their data requests to the FBR Headquarters via official email channels. Each request must be supported by proper documentary evidence, clearly stating the justification and official purpose in line with NADRAâ€™s established data requisition protocols. Officials noted that the centralized approach will help standardize data access procedures, reduce delays, and ensure accountability. At the same time, robust cybersecurity controls have been embedded into the system to safeguard sensitive public records against cyber threats and misuse. The launch of this electronic module marks a significant step toward strengthening institutional cooperation, improving governance, and enhancing service delivery in Pakistanâ€™s public sector.

Date: 2026-02-18

Details: Written by Shahnawaz Akhter Karachi, February 18, 2026 â€“ The Large Taxpayers Unit (LTO) Karachi has achieved a historic milestone by collecting around Rs2 trillion in taxes during the first seven months (July to January) of the fiscal year 2025-26, official sources confirmed on Wednesday. As the largest revenue-collecting arm of the Federal Board of Revenue (FBR), LTO Karachi recorded 12% growth compared to Rs1.78 trillion collected in the corresponding period of the previous fiscal year, reflecting improved compliance, enhanced enforcement, and stronger economic activity. During the same period, the tax office also released refunds amounting to Rs82 billion, providing liquidity relief to businesses and exporters. A major contribution came from direct taxes, which surged 16% to Rs1.11 trillion, up from Rs960 billion in the same period last year. Sales tax collection also showed positive momentum, registering 4% growth to Rs735 billion, despite the issuance of Rs46 billion in sales tax refunds, compared with Rs36 billion last year. Meanwhile, Federal Excise Duty (FED) collection rose sharply by 23% to Rs138 billion, underscoring broad-based revenue gains. In January 2026 alone, LTO Karachi delivered a remarkable 33% year-on-year increase, collecting Rs283 billion against Rs213 billion in January 2025. Officials attributed this exceptional performance primarily to super tax collection, which boosted income tax receipts by 74% YoY for the month. The office collected around Rs54 billion in super tax within just two days during the final week of January 2026, following a landmark judgment by the Federal Constitutional Court that upheld the legality of the super tax. Authorities believe this verdict significantly strengthened revenue enforcement and restored taxpayer confidence. The strong performance highlights LTO Karachiâ€™s pivotal role in achieving Pakistanâ€™s fiscal targets and strengthening national revenue mobilization.

Date: 2026-01-19

Details: Written by Shahnawaz Akhter Islamabad, January 19, 2026 â€“ The Federal Board of Revenue (FBR) has notified revised customs values for imported ammunition to be used for assessment of duty and taxes at the import stage. The new values have been issued through Valuation Ruling No. 2036/2026, notified by the Directorate General of Customs Valuation, Karachi According to the ruling, the latest valuation supersedes Valuation Ruling No. 1995/2025 dated March 28, 2025 and has been issued under Section 25A of the Customs Act, 1969. The revised benchmark values will remain applicable until revised or rescinded by the competent authority FBR stated that the new customs values were determined after holding consultations with relevant stakeholders on December 29, 2025, followed by a detailed analysis of import data for the last 90 days and a market inquiry in line with the law. Due to inconsistencies and incomplete transaction data, the values were finalized under Section 25(9) read with Section 25(7) of the Customs Act, 1969 New Customs Values of Ammunition (C&F â€“ US Dollars per piece) â€¢ Cartridges Caliber .30 Bore o China: $0.17 o All Other Origins: $0.20 â€¢ Cartridges Caliber 9mm o China: $0.23 o All Other Origins: $0.25 â€¢ Cartridges Caliber .223 Rem o China / Turkey: $0.28 o All Other Origins: $0.31 â€¢ Cartridges Caliber 5.56 o China / Oman / Turkey: $0.28 o All Other Origins: $0.31 FBR clarified that these values will serve as minimum benchmark customs values, and in cases where declared import values are higher, customs authorities will assess duties and taxes on the declared value. Actual sea or air freight will be added to arrive at the final C&F value, with special adjustment in air consignments to account for freight differences Importers aggrieved by the valuation may file a revision petition under Section 25D of the Customs Act, 1969, within 30 days of issuance. The ruling is expected to bring greater transparency and uniformity in the assessment of imported ammunition across Pakistan.

Date: 2026-01-19

Details: Written by Shahnawaz Akhter Updated under Sales Tax Rules, 2006 (Tax Year 2026) The Sales Tax Rules, 2006, as updated for tax year 2026, prescribe a comprehensive legal framework for the attachment and sale of movable property of sales tax defaulters by officials of the Federal Board of Revenue (FBR). These rules ensure due process, proportionality, and transparency in recovery proceedings. This article explains the step-by-step procedure, rights of taxpayers, and exemptions under Rules 88 to 111A. ðŸ“Œ When Can FBR Attach Movable Property? FBR may initiate attachment proceedings after service of a recovery notice, where government dues remain unpaid within the prescribed period. ðŸ” Step-by-Step Procedure for Attachment of Movable Property 1. Issuance of Warrant of Attachment (Rule 88) â€¢ Recovery Officer issues a written warrant (Form STR-19) â€¢ Must include: o Name of defaulter o Amount of government dues o Official signature and seal 2. Service of Warrant (Rule 89) â€¢ Copy served personally on defaulter or agent â€¢ If not possible, service is deemed complete when: o Affixed on the notice board of the Recovery Officer 3. Attachment After Non-Payment (Rule 90) â€¢ If dues are not paid immediately after service: o Officer proceeds to attach movable property â€¢ ðŸš« Standing crops and agricultural produce are excluded 4. Mode of Attachment (Rule 91) â€¢ Attachment is made by actual seizure â€¢ Officer must inform the possessor in writing, stating reasons 5. Search and Seizure Rules (Rules 92â€“94) â€¢ Searches conducted under CrPC, 1898 â€¢ Officer may break open premises if property is concealed â€¢ Women must be given reasonable time to withdraw â€¢ Seizure allowed only between sunrise and sunset â€¢ Inventory prepared and signed by two witnesses 6. Proportionality of Seizure (Rule 95) â€¢ Seizure must not be excessive â€¢ Property value should be proportionate to tax dues 7. Property That Cannot Be Removed (Rule 96) â€¢ Officer may issue prohibitory order instead of seizure â€¢ Written reasons must be sent to the Recovery Officer 8. Storage of Seized Goods (Rule 97) â€¢ Goods delivered to: o Authorized Sales Tax Officer, or o Nearest Custom House ðŸ’¼ Special Types of Movable Property Negotiable Instruments (Rule 98) â€¢ Attached by actual seizure â€¢ Produced before Recovery Officer Property in Custody of Public Officer (Rule 99) â€¢ Attached via written notice to the concerned officer Share in Movable Property (Rule 100) â€¢ Defaulter prohibited from transferring his share Partnership Interest (Rule 101) â€¢ Recovery Officer may: o Charge partnerâ€™s share o Appoint receiver o Order sale â€¢ Other partners have right of redemption ðŸ›’ Sale of Attached Movable Property Order for Sale (Rule 102) â€¢ Only property necessary to satisfy dues is sold â€¢ Sale stops once dues are fully recovered Proclamation of Sale (Rule 103) â€¢ Issued in Urdu, English, and provincial language â€¢ Publicized through: o Notice boards o Designated locations o Newspapers via auctioneer Waiting Period (Rule 104) â€¢ Sale after 15 days, unless: o Property is perishable o Storage cost exceeds value Modes of Sale â€¢ Public Auction â€“ Customs Rules, 2001 (Rule 105) â€¢ Tender or Sealed Bids (Rule 106) â€¢ Broker Sale for shares or instruments (Rule 110) Preference to Co-Owner (Rule 107) â€¢ Equal bids â†’ co-owner gets priority Transfer of Title (Rule 108) â€¢ Sale certificate issued â€¢ Sale becomes final and absolute Minor Irregularities (Rule 109) â€¢ Sale not invalidated if rules are substantially complied with ðŸª™ Special Order for Cash (Rule 111) If seized property includes currency or coins, Recovery Officer may directly transfer required amount to the referring authority. ðŸš« Exemptions from Attachment (Rule 111A) The following cannot be attached or sold: â€¢ Basic household items and womenâ€™s personal ornaments â€¢ Tools of artisans and essential agricultural implements â€¢ Agriculturistâ€™s residence â€¢ Books of account â€¢ Pension, gratuity, provident fund amounts â€¢ Government salary exemptions â€¢ Right to sue, personal services, future maintenance ðŸ“Œ Bank account attachment is governed by Income Tax Rules 210Aâ€“210I, applied mutatis mutandis. â“ Frequently Asked Questions (FAQs) Can FBR attach agricultural produce? No. Standing crops and produce of self-cultivated land are exempt. Can sale take place immediately after seizure? No. A 15-day notice period is mandatory unless exceptions apply. Are bank accounts covered under these rules? Yes, through cross-application of Income Tax Rules, 2002. ðŸ“˜ Conclusion The Sales Tax Rules, 2006 (2026 update) establish a structured and lawful mechanism for recovery of sales tax arrears through attachment and sale of movable property. While empowering FBR officials, the rules also safeguard taxpayer rights through exemptions, proportionality, and procedural transparency. Disclaimer This article is intended for general informational purposes only and does not constitute legal, tax, or professional advice. While every effort has been made to ensure accuracy based on the Sales Tax Rules, 2006 (updated for tax year 2026), laws and procedures may change, and their application may vary based on specific facts and circumstances. Readers are advised to consult a qualified tax professional or legal advisor or refer to official FBR notifications before taking any action.

Date: 2026-01-16

Details: Terence J Sigamony ISLAMABAD: Former Law Minister Farogh Naseem stated that though the legislature has power and jurisdiction to pass laws retrospectively, but a retrospective law cannot impair or destroy vested rights. Farogh argued that before a three-judge bench of the Federal Constitutional Court, which on Thursday heard the FBR appeals against the judgments of Sindh, Lahore and Islamabad High Courts regarding levy of Super Tax under Section 4C, inserted in the Income Tax Ordinance, 2001 through Finance Act 2015.The ex-law minister, representing the Karachi based taxpayers, maintained that the settled jurisprudence succinctly states that the vested rights are created through a contract, statute or by operation of law. â€œAs a general principle, the legislature has the power, authority and jurisdiction to legislate laws retrospectively, but the general principle is subject to strong exceptions i.e. a retrospective law cannot impair or destroy vested rights,â€ he further said and added that only through a section 31-A of the Customs Act, 1969 type of legislation vested right can be eroded through a retrospective legislation.â€ However, in the Income Tax Ordinance, 2001 no section 31-A of the Customs Act type of legislation exists. Therefore, any vested rights acquired under the ITO, 2001 cannot be destroyed. He emphasised that even a Section 31-A type of retrospective legislation cannot destroy transactions which are already past and closed. Farogh submitted that the decision of the Supreme Court in Mekotex (PLD 2024 SC 1168) is per incuriam as it is in violation of the binding precedents rendered by earlier larger bench in Molasses (1993 SCMR 1905). He asked the bench that the judgment need to be reviewed and declared ultra vires the constitution, adding that the FBR is relying on this judgment. He said that even if we apply Mekotex, past and closed transactions cannot be undone through retrospective legislation, adding that as per Mekotex the accrual of past and closed transactions vary from statute to statute. The taxpayers counsel contended that it is true that in matters of customs duty under the Customs Act, 1969 in view of Section 31-A, past and closed transactions are fixed upon the filling of the Bill of Entry, which is now called Goods Declaration. He stated that FBR is totally incorrect in stating that past and closed transactions in income tax matters are fixed upon the filling of the tax returns, adding that the past and closed transactions cannot be taken away by the legislature fiat. As per settled law, in income tax matters past and closed transactions accrue on the last date of the accounting period or before, but definitely not on any date after the last date of the accounting period. Farogh submitted that the FBR is only vociferously badgering the general principle, which are totally incorrect. He stated that as per Shahnawaz 2011 PTD 1558 at p 1573 rights become vested rights and finally are translated into past and closed transactions, which attain the highest status. They constitute fundamental rights under Article 10-A, 18, 23, 24 and 25 of the Constitution. Thus they cannot be destroyed through retrospective sub-constitutional legislation. The case is adjourned until Friday (Jan 16). Copyright Business Recorder, 2026

Date: 2026-01-15

Details: Written by Shahnawaz Akhter Islamabad, January 15, 2026 â€“ Pakistan Customs has secured a major regulatory win by enforcing the use of official bank exchange rates on shipping charges, effectively ending the long-standing practice of arbitrary and inflated billing by international shipping lines. The move is expected to provide significant relief to traders and exporters across the country. According to a news release issued on Thursday, the All-Pakistan Shipping Association (APSA), in a formal communication dated January 12, 2026, confirmed that all member shipping lines are now charging freight and related fees strictly on the basis of exchange rates issued by their authorized commercial banks, in line with State Bank of Pakistan (SBP) regulations. This development follows sustained engagement by a high-level committee constituted by Pakistan Customs, which held extensive consultations with shipping agents, terminal operators, trade bodies, and major international shipping companies to address industry concerns. As a key milestone, Maersk, the largest shipping line operating in Pakistan and responsible for nearly 26 percent of the countryâ€™s total cargo movement, had already begun applying official bank exchange rates, setting a benchmark for the wider industry. Written confirmations of compliance have since been received from leading global shipping lines and their local agents, including Hapag-Lloyd, Ocean Network Express (ONE), COSCO Shipping, CMA CGM, Mediterranean Shipping Company (MSC), OOCL, and United Marine Agencies, ensuring full industry-wide adherence. For years, exporters and traders had raised concerns over inflated dollar rates used in shipping charges, which increased business costs and hurt export competitiveness. The new measure is expected to lower costs, enhance transparency, and restore confidence in Pakistanâ€™s trade and logistics sector, reinforcing the FBRâ€™s commitment to ease of doing business and export-led growth.

Date: 2026-01-15

Details: â€¢ Foreign workers, especially high-tech professionals, remain in high demand in Saudi Arabia Gohar Ali Khan Published January 15, 2026 KARACHI: Over half a million Pakistani workers and professionals migrated to Saudi Arabia in 2025 in search of better employment and living opportunities, according to official data released by the Bureau of Emigration & Overseas Employment (BEOE). According to the data, as many as 530,256 Pakistani workers settled in various cities across the Kingdom of Saudi Arabia (KSA) in 2025, compared to 452,562 in the previous year, reflecting a 17% year-on-year increase, which translates into 77,694 additional workers. Since 1972, some 7.69 million Pakistani workers have moved to KSA, BEOE data showed. â€œSaudi Arabia is not only a favoured destination for Pakistanis performing religious obligations such as Hajj and Umrah, but it also remains a preferred choice for workers and professionals seeking overseas employment,â€ Saad Shah, an IT exporter with clients across the Gulf Cooperation Council (GCC) region, told BUSINESS RECORDER. First half of 2025: 336,999 Pakistanis went abroad for employment: ministry Foreign workers, especially high-tech professionals, remain in high demand in various Saudi cities as the Kingdom is investing heavily in mega projects, including artificial intelligence, he said. Shah noted that several Pakistani business groups, especially IT firms and fintech operators, have expanded their operations in the Kingdom via subsidiaries. Additionally, many Pakistani companies have relocated professionals to their offshore Saudi offices, contributing to the overall rise in emigration. He urged the government and private sector to strengthen collaboration to export high-skilled human resources through training and capacity-building initiatives, while also balancing the domestic workforce requirements in the domestic workforce market. As per official data, Pakistanâ€™s total manpower exports to various countries stood at 762,499 in 2025, with the KSA absorbing 69.5% of the total, surging from 62% recorded in the previous year. â€œSeveral factors have contributed to the growth, including improving bilateral relations, Saudi Vision 2030, and the shift of Pakistani workers from the United Arab Emirates (UAE) due to stricter regulations,â€ Ibrahim Amin, a banking and financial expert and Chairman of TriStar International Consultants, told BUSINESS RECORDER. He added that the defence cooperation agreement signed between Pakistan and Saudi Arabia in 2024 further strengthened ties between the two brotherly nations, enhancing cooperation in diplomatic, trade, and labour sectors, with a growing preference for Pakistani workers. Amin suggested that Pakistani authorities should collaborate with Saudi banking regulators to facilitate easier and more efficient remittance transfers for Pakistani workers and their families through formal banking channels. This would boost remittance inflows and support Pakistanâ€™s economic stability on a sustainable basis. According to data from the State Bank of Pakistan (SBP), overseas Pakistani remitted $9.64 billion from Saudi Arabia in 2025, compared to $8.34 billion in 2024, reflecting a notable 15% year-on-year growth.

Date: 2026-01-12

Details: The Federal Board of Revenue (FBR) has reiterated strict documentation and approval requirements for cancellation or return of taxable supplies under Rule 20 of the Sales Tax Rules, 2006, updated for Tax Year 2026. This rule governs how debit notes and credit notes must be issued, ensuring accurate adjustment of sales tax liability, preventing misuse of input tax, and strengthening audit trails. ðŸ§¾ When Does Rule 20 Apply? Rule 20 becomes applicable when: â€¢ A taxable supply has already been made, and â€¢ The supply, wholly or partly, is: o Cancelled, or o Returned by the buyer/recipient The procedure differs depending on whether the buyer is registered or unregistered under the Sales Tax Act, 1990. ðŸ“„ Debit Note Requirement (Registered Buyers) âœ… Who Issues the Debit Note? â€¢ The buyer or recipient of goods or services â€¢ Applicable only when the buyer is registered ðŸ“ Mandatory Contents of a Debit Note The debit note must be issued in duplicate and must clearly state: â€¢ ðŸ”¹ Name & National Tax Number (NTN) of the recipient â€¢ ðŸ”¹ Name & National Tax Number (NTN) of the supplier â€¢ ðŸ”¹ Number and date of the original sales tax invoice â€¢ ðŸ”¹ Quantity returned or cancelled â€¢ ðŸ”¹ Value of supply, based on the original tax invoice â€¢ ðŸ”¹ Amount of sales tax paid on the returned/cancelled supply â€¢ ðŸ”¹ Reason for issuance of the debit note â€¢ ðŸ”¹ Signature and official seal of the authorized issuing person ðŸ“¬ Handling of Debit Note Copies To maintain proper records: â€¢ ðŸ“¨ Original copy must be sent to the supplier â€¢ ðŸ“ Duplicate copy must be retained by the buyer for record and audit purposes ðŸ§® Credit Note for Unregistered Buyers âš Special Rule Applies If the cancellation or return involves an unregistered person: â€¢ The supplier must issue a credit note â€¢ The credit note must contain the same particulars as required for a debit note ðŸš¨ Prior Approval Is Mandatory â€¢ A credit note in such cases can be issued only with prior approval of the Commissioner Inland Revenue â€¢ Without approval, sales tax adjustment is not allowed â“ Frequently Asked Questions (FAQs) ðŸ”¹ Can sales tax be adjusted without a debit or credit note? No. Proper documentation under Rule 20 is mandatory for any tax adjustment. ðŸ”¹ Is partial return of goods allowed? Yes. Debit notes can be issued for partial cancellations or returns, provided quantities and values are clearly stated. ðŸ”¹ Why is Commissionerâ€™s approval required for unregistered buyers? To prevent misuse of credit notes and ensure tax neutrality where buyer records are unavailable. âœ… Key Compliance Takeaways â€¢ Always issue debit notes for returns by registered buyers â€¢ Obtain Commissioner approval before issuing credit notes to unregistered persons â€¢ Ensure complete and accurate particulars to avoid audit objections â€¢ Maintain records for reconciliation and future verification Disclaimer: This article is for general informational purposes only and summarizes Rule 20 of the Sales Tax Rules, 2006 as updated for tax year 2026. It does not constitute legal, tax, or professional advice. Readers should refer to the relevant law, FBR notifications, or consult a qualified tax professional before taking any action.

Date: 2026-01-12

Details: The Federal Board of Revenue (FBR) has introduced important clarifications and procedural changes in sales tax return filing under Rule 14 of the Sales Tax Rules, 2006, updated for Tax Year 2026. These changes directly affect manufacturers, importers, distributors, wholesalers, and other registered persons, making it essential to understand who must file, what annexures are required, and how late filings are handled. ðŸ§¾ Who Is Required to File Sales Tax Returns in 2026? Under Rule 14, filing of sales tax returns is mandatory for the following: âœ… Mandatory Filers â€¢ Every person registered under the Sales Tax Act, 1990, or â€¢ The Federal Excise Act, 2005, â€¢ Excluding retailers who are not Tier-1 retailers All such persons must file their return using Form STR-7, along with all applicable annexures, as per Rule 18. ðŸ New Reporting Requirements for Key Sectors To enhance transparency and data matching, FBR has emphasized sector-specific disclosures: ðŸ”¹ For Registered Manufacturers â€¢ Must submit Annex-J with the monthly sales tax return â€¢ Details required: o Goods manufactured or produced o Goods supplied during the tax period ðŸ”¹ For Commercial Importers, Distributors & Wholesalers â€¢ Required to submit Annex-H1 â€¢ Must report: o Goods purchased or imported o Goods supplied during the month ðŸ“Œ These annexures are now critical for audit trails, input-output reconciliation, and refund processing. ðŸ¢ Single Return for Multiple Business Sectors If a registered person operates in multiple sectors with different return filing dates, Rule 14 introduces a simplified approach: ðŸ“„ Whatâ€™s New? â€¢ Only one consolidated return is required â€¢ The due date will be: o The date applicable to the major activity, based on ï‚§ Higher sales tax liability, or ï‚§ Federal excise duty payable This change reduces duplication and simplifies compliance for diversified businesses. â³ Late Filing Beyond Six Months â€“ New Restriction A major compliance tightening has been introduced for delayed filers: âš Important Update â€¢ If a sales tax return is not filed within six months after its due date: o The return cannot be filed automatically o Filing is allowed only after approval from the Commissioner Inland Revenue having jurisdiction This provision aims to curb prolonged non-compliance and habitual defaulters. â“ Frequently Asked Questions (FAQs) ðŸ”¹ Is STR-7 mandatory for all registered persons? Yes, except for non-Tier-1 retailers, all registered persons must file STR-7. ðŸ”¹ Are annexures optional? No. Relevant annexures such as Annex-J and Annex-H1 are mandatory, where applicable. ðŸ”¹ Can multiple returns be filed for different sectors? No. A single consolidated return must be filed based on the major business activity. âœ… Key Takeaway for Taxpayers The 2026 updates reinforce data transparency, sector-wise reporting, and stricter timelines. Businesses should: â€¢ Ensure accurate annexure reporting â€¢ Track filing deadlines carefully â€¢ Avoid delays beyond six months to prevent administrative hurdles ðŸ“Œ Disclaimer: This article is intended for general informational purposes only and summarizes provisions of the Sales Tax Rules, 2006 as updated for tax year 2026. It does not constitute legal or tax advice. Readers should consult the relevant law, FBR notifications, or a qualified tax professional for guidance specific to their circumstances.

Date: 2026-01-12

Details: The Federal Board of Revenue (FBR), under the Sales Tax Rules, 2006 (updated for Tax Year 2026), has specified different payment and filing deadlines for monthly and quarterly sales tax returns based on the category of registered person. Understanding these timelines is crucial to avoid penalties, default surcharges, and compliance notices. Below is a simplified and interactive breakdown of sales tax due dates for 2026, tailored for easy reference. ðŸ§¾ Sales Tax Return Due Dates â€“ Category Wise (2026) ðŸ” Quick Reference Table S. No. Category of Registered Person Due Date for Payment Due Date for Filing 1 Electricity Distribution Companies 18th of the month following the tax period in which the bill or invoice is issued 21st day following the 18th day 2 Independent Power Producers (IPPs) 22nd of the month following the tax period to which the sales tax invoice relates 25th day following the 22nd day 3 Gas Transmission & Distribution Companies 15th of the month following the tax period in which the bill or invoice is issued 18th day following the 15th day 4 Petroleum Exploration & Production Companies 18th of the month following the tax period in which supplies were made 21st day following the 18th day 5 CNG Dealers (Quarterly Basis) 15th of the month following the end of the quarter 18th day following the 15th day 6 Brick manufacturers (brick kilns (Paying tax under Tenth Schedule â€“ Quarterly) 15th of the month following the end of the quarter 18th day following the 15th day 7 WAPDA â€“ Hydroelectric Power 18th of the month following the tax period to which the sales tax invoice relates 21st day following the 18th day âš Why These Due Dates Matter Failing to comply with prescribed sales tax timelines may result in: ðŸ’¸ Default surcharge ðŸš¨ Late filing penalties ðŸ“© Automated notices from FBR âŒ Blocking of refunds and input tax adjustments Timely payment and return filing ensure smooth compliance and protect registered persons from unnecessary litigation. â“ Frequently Asked Questions (FAQs) ðŸ”¹ Is the filing date always after the payment date? Yes. Under Sales Tax Rules, filing is allowed only after payment, usually 3 days later. ðŸ”¹ Are quarterly filers treated differently? Yes. CNG dealers and brick manufacturers file returns quarterly, with deadlines linked to the end of each quarter. ðŸ”¹ What happens if the due date falls on a holiday? Generally, the due date shifts to the next working day, unless notified otherwise by FBR. âœ… Pro Tip for Taxpayers Set calendar reminders or use IRIS alerts to track payment and filing deadlines. Early compliance avoids last-minute system congestion and penalties. Disclaimer: This article is for informational purposes only and is based on the Sales Tax Rules, 2006 as updated for tax year 2026. It does not constitute legal or tax advice. Registered persons are advised to consult the relevant law, FBR notifications, or a qualified tax professional before making compliance decisions.

Date: 2026-01-11

Details: Quetta, January 11, 2026 â€” In a move to strengthen anti-smuggling enforcement and promote legitimate trade, senior officials of the Federal Board of Revenue (FBR) visited Customs House Quetta on 8th and 9th January 2026. The delegation was led by Syed Shakeel Shah, Member (Customs Operations), FBR, Islamabad, accompanied by Basit Maqsood Abbasi, Chief Collector of Customs Enforcement, Islamabad. The visiting officials were warmly received by Balochistan Customs leadership, including Masood Ahmed, Chief Collector (Appraisement); Dr. Karam Elahi, Collector (Enforcement), Quetta; Daud Pirzado, Collector (Appraisement), Quetta & Taftan; and Fazle Samad, Collector (Enforcement), Gaddani, along with senior officers from various Customs formations. During the briefing sessions, officials discussed trade dynamics, key issues facing the trading community, and the results of anti-smuggling drives and intelligence-based operations (IBOs). Dr. Karam Elahi highlighted revenue gains from strict enforcement, while Fazle Samad shared details of significant recoveries in the Gaddani jurisdiction. A delegation from the Quetta Chamber of Commerce & Industry also met the FBR leadership to raise trade-related concerns, which were addressed through on-the-spot directives by the visiting officials. As part of the visit, senior FBR leaders planted saplings at Customs House Quetta, emphasizing environmental responsibility, and inaugurated two new Customs Enforcement sections. The visit also included a courtesy meeting with the Corps Commander Quetta and an interactive session with senior law enforcement officials, including the Inspector General Frontier Corps (North and South), Director General Pakistan Coast Guards, and Chief of Staff. Discussions focused on enhancing inter-agency coordination, improving border management, facilitating legitimate trade, and intensifying anti-smuggling efforts. Concluding the visit, FBR leadership commended the performance of Pakistan Customs in Balochistan, particularly their effective enforcement operations and enhanced revenue collection.

Date: 2026-01-11

Details: For various reasons, a registered taxpayer in Pakistan may find their name removed from the Active Taxpayer List (ATL) maintained by the Federal Board of Revenue (FBR). Being classified as a non-active taxpayer restricts business operations, input tax claims, and legal transactions. Rules 12A and 12B of the Sales Tax Rules, 2006 (updated for 2026) govern the status of non-active taxpayers and the procedure to regain active taxpayer status. âš What Is a Non-Active Taxpayer? (Rule 12A) A registered person automatically becomes a non-active taxpayer if they fail to meet any conditions prescribed in Section 2(1) of the Sales Tax Act, 1990. âŒ Restrictions for Non-Active Taxpayers â€¢ Cannot file Goods Declarations for imports or exports â€¢ Cannot issue sales tax invoices â€¢ Cannot claim input tax or refunds â€¢ Cannot avail concessions under the Act or rules ðŸš« Business Implications â€¢ Government departments, autonomous bodies, and public sector organizations cannot make purchases from non-active taxpayers. â€¢ If a registered buyer enters an invoice from a non-active taxpayer in Annexure-A, the system displays a warning message, and no input tax credit is allowed. ðŸ”„ How to Restore Active Taxpayer Status (Rule 12B) If your business has been marked non-active, you may regain active status by following this step-by-step procedure: 1. File Outstanding Returns and Tax Payments â€¢ Submit all pending sales tax returns â€¢ Pay any due tax under the Sales Tax Act or Income Tax Ordinance, 2001 2. Audit & Verification by LTO/RTO â€¢ The Regional Tax Office (RTO) or Large Taxpayers Office (LTO) will: o Conduct audits or necessary investigations o Ensure compliance with tax obligations o Recommend restoration to FBR if satisfied 3. Issuance of Restoration Order by FBR â€¢ Upon receipt of a positive recommendation, the Board issues an order restoring the taxpayer to the Active Taxpayer List â€¢ Once restored, all business, invoicing, and input tax rights are reinstated âœ… Key Takeaways â€¢ Being a non-active taxpayer blocks core business operations and tax rights â€¢ Restoration requires full compliance, tax payment, and audit verification â€¢ The process is governed by Rule 12A & 12B of the Sales Tax Rules, 2006 (2026) â€¢ Always maintain accurate records and timely filings to avoid ATL removal Disclaimer: This article is for general informational purposes only and is based on Rules 12A and 12B of the Sales Tax Rules, 2006 (2026). It does not constitute legal, tax, or professional advice. Taxpayers should consult a qualified tax advisor or the FBR before taking any action. The publisher is not liable for any loss arising from reliance on this information.

Date: 2026-01-11

Details: The Federal Board of Revenue (FBR) has been empowered under Rule 12 of the Sales Tax Rules, 2006 to suspend or blacklist sales tax registrations to curb tax fraud, fake invoicing, and non-compliance. The rule ensures that Large Taxpayer Offices (LTOs) and Regional Tax Offices (RTOs) follow a uniform and transparent procedure under Section 21(2) of the Sales Tax Act, 1990. This article explains grounds, procedure, timelines, consequences, and taxpayersâ€™ rights in an easy and structured manner. âš Difference Between Suspension and Blacklisting Action Nature Duration Legal Impact Suspension Temporary Pending inquiry Business restricted Blacklisting Permanent / penal As ordered Severe legal & tax consequences ðŸ”´ Grounds for Suspension of Registration (Rule 12(a)) A Commissioner may suspend registration without prior notice if satisfied that the registered person has: ðŸ“Œ Key Grounds Include: â€¢ âŒ Issued fake invoices â€¢ âŒ Evaded tax or committed tax fraud (Section 2(37)) â€¢ âŒ Does not exist at the declared business address â€¢ âŒ Refused access to premises or records under Sections 25, 37, 40B, 40C â€¢ âŒ Declared business activity five times more than capital and liabilities â€¢ âŒ Conducted over 10% purchases or supplies with other suspended persons â€¢ âŒ Failed to file sales tax returns: o 3 consecutive months, or o 6 months of null returns â€¢ âŒ Any other reason specified by the FBR Board ðŸ§¾ How Suspension Is Carried Out â€¢ Suspension is ordered through the computerized system â€¢ A written order with reasons must be issued â€¢ Copies are shared with: o All LTOs / RTOs o FBR & PRAL systems o STARR system o Customs Wing âš Automatic Suspension: Non-filing of sales tax returns for three consecutive months results in system-based suspension without notice. ðŸš« Consequences During Suspension While registration is suspended: â€¢ âŒ No input tax adjustment or refund allowed â€¢ âŒ Other taxpayers cannot claim input tax on invoices issued by the suspended person â€¢ âŒ Restriction applies to past and current invoices ðŸ“¢ Show Cause Notice & Right of Hearing â€¢ Commissioner must issue a show-cause notice within 7 days of suspension â€¢ Taxpayer is given 15 days to respond â€¢ Grounds for blacklisting include: o No response to notice o Failure to provide records o Denial of access to premises o Other Board-specified reasons ðŸš¨ Important: If no show-cause notice is issued within 7 days, the suspension becomes void ab-initio. âœ… Revocation of Suspension â€¢ If the taxpayer submits a satisfactory reply â€¢ Commissioner may revoke suspension within 30 days â€¢ Opportunity of personal hearing is mandatory â›” Blacklisting of Sales Tax Registration (Rule 12(b)) If, after hearing, the offence is confirmed: ðŸ“Œ Commissioner Shall: â€¢ Issue a self-speaking, appealable order â€¢ Initiate legal and penal proceedings ðŸ§¾ Blacklisting Order Must Specify: â€¢ Reasons for blacklisting â€¢ Period during which: o Input tax and refunds are inadmissible â€¢ Amount of recovery â€¢ Penalties imposed Timeline for Blacklisting â€¢ Order must be issued within 90 days of hearing notice â€¢ Failure to issue order within this period makes suspension void ab-initio ðŸ“¤ System-Wide Implementation Once blacklisted: â€¢ Orders circulated to: o All LTOs / RTOs o FBR / PRAL systems o STARR system o Customs Wing â€¢ Computer-generated lists of invoices issued by blacklisted persons are circulated to: o Audit sections o Refund sections o Concerned Inland Revenue Officers ðŸ“‘ Impact on Buyers Claiming Input Tax â€¢ Buyers who claimed input tax on invoices of blacklisted persons will receive: o Show-cause notice under Section 11 & Section 21(3) â€¢ Input tax or refund may be rejected â€¢ Decision issued through a self-speaking, appealable order â€¢ Right of hearing is mandatory ðŸ“Œ Key Takeaways for Tax Year 2026 â€¢ Suspension can be instant and without notice â€¢ Input tax chain is completely blocked â€¢ Strict 7-day and 90-day timelines protect taxpayers â€¢ Blacklisting has far-reaching legal consequences â€¢ Buyers must verify supplier status regularly Disclaimer: This article is intended for general informational and educational purposes only and is based on Rule 12 of the Sales Tax Rules, 2006 (updated for tax year 2026). It does not constitute legal, tax, or professional advice. Readers are advised to consult a qualified tax advisor or the Federal Board of Revenue (FBR) before taking any action. The publisher shall not be liable for any loss or consequence arising from reliance on this information.

Date: 2026-01-11

Details: The Federal Board of Revenue (FBR) has clearly laid down the procedure for sales tax de-registration under Rule 11 of the Sales Tax Rules, 2006, applicable for the tax year 2026. This rule applies when a registered person ceases business operations, becomes exempt from sales tax, or fails to comply with filing obligations. This guide explains who can apply, how to apply, timelines, restrictions, and legal consequencesâ€”in a simplified and interactive manner for easy understanding. âœ… Who Can Apply for Sales Tax De-Registration? You may apply for de-registration if: â€¢ You have ceased to carry on business â€¢ Your supplies become exempt from sales tax â€¢ You no longer meet the registration threshold â€¢ You intend to close operations permanently ðŸ§¾ Step-by-Step Procedure for De-Registration (Rule 11(1)) ðŸ”¹ Step 1: Online Application â€¢ Submit Form STR-3 through the FBR computerized system â€¢ Application must clearly state the reason for de-registration ðŸ”¹ Step 2: Commissionerâ€™s Order â€¢ The Commissioner Inland Revenue may: o Act on your application, or o Initiate de-registration on his own motion â€¢ De-registration must be completed within 60 days, calculated from: o Date of application, or o Date of payment of all outstanding dues (whichever is later) ðŸš« Restrictions After Applying for De-Registration Once the online application is submitted: â€¢ âŒ Annex-C and Annex-D cannot be filed â€¢ âŒ Sales tax returns cannot be filed â€¢ âŒ Input tax adjustment or refund is not admissible â€¢ âŒ Other registered persons cannot claim input tax on invoices issued by you during the de-registration period ðŸ‘‰ These restrictions apply until de-registration is finalized or rejected. ðŸ” Audit or Inquiry by Commissioner (Rule 11(2)) If the Commissioner decides to verify your liabilities: â€¢ You may be required in writing to submit records â€¢ Audit or inquiry must be completed within 90 days from the date of application â€¢ Adjournments are excluded but total time cannot exceed 90 days ðŸ“Œ Final Compliance Requirement â€¢ File a final sales tax return under Section 28 â€¢ Pay any outstanding liability â€¢ System will automatically de-register you after 90 days (subject to Rule 11(4)) Suspension of Monthly Returns (Rule 11(2A)) Good news for applicants: â€¢ Your obligation to file monthly sales tax returns under Section 26 is suspended â€¢ Suspension remains valid until: o De-registration is approved, or o Application is rejected âš Forced De-Registration by FBR (Rule 11(2)) If a registered person: â€¢ Fails to file sales tax returns for six consecutive months Then: â€¢ Commissioner may issue a show-cause notice â€¢ After giving an opportunity of being heard â€¢ Order of de-registration may be issued â€¢ System will automatically de-register the person âš– Legal Liabilities Continue After De-Registration (Rule 11(3)) Important clarification: De-registration does not wipe out past liabilities. â€¢ All tax obligations, penalties, and liabilities relating to the period of registration remain enforceable â€¢ FBR can still initiate recovery or legal proceedings ðŸ“Œ Key Takeaways for Tax Year 2026 â€¢ De-registration is fully online via STR-3 â€¢ Strict timelines of 60 and 90 days apply â€¢ Input tax and refunds are blocked during de-registration â€¢ Non-filers risk forced de-registration â€¢ Past liabilities survive cancellation Disclaimer: This article is published for general informational and educational purposes only and is based on Rule 11 of the Sales Tax Rules, 2006 (updated for tax year 2026). It does not constitute legal, tax, or professional advice. Readers are advised to consult a qualified tax professional or the Federal Board of Revenue (FBR) before making any compliance or de-registration decisions. The publisher assumes no responsibility for any loss arising from reliance on this information.

Date: 2026-01-10

Details: ISLAMABAD: President Asif Ali Zardari Friday issued another ruling against the Federal Tax Ombudsman (FTO) that the FTO is not above the Ministry of Finance/Federal Board of Revenue (FBR). After rejecting 11 representations of the FTO, the President has rejected another 12 representations of the FTO regarding taxation of immovable properties by the FBR on Friday. The President has ruled that the ambit of inclusiveness cannot be stretched to such an extent that this domain becomes limitless so as to include within its scope the academic questions, policy questions, questions pertaining to rendering of advice, questions of interpretation of the law and exercising parallel jurisdiction already provided under the tax laws, hence making the Ombudsman a person over and above the MoF/FBR to be delving in their domain. Even if the learned FTO had the best of intentions in passing the impugned order such intentions would not empower him to deal with questions which are not covered in maladministration as spelled out under the preamble of the Ordinance, 2000 and Federal Ombudsmen Institutional Reforms Act 2013. Such extensive and unlimited jurisdiction has also been exercised by some of the Chief Justices and judges of the superior judiciary in the past although, their jurisdiction was limited by the statute and the constitution of Pakistan and that, in some instances, caused awkward situations for such judges. In the instant case, the jurisdiction of the FTO is even narrower especially when the FTO only possesses the jurisdiction within the confines of a statute and not a jurisdiction within the confines of the Constitution. Besides, formation of policy or suggestion of improved governance is an executive function and not the function of adjudicatory authorities functioning either under the Constitution or under a statute. Accordingly, the orders of the learned FTO are modified to the extent of directing the agency to initiate steps to rationalize its actions in a manner in which such actions are just and fair and otherwise are also not discriminatory. Beyond this, of course the learned Federal Tax Ombudsman should restrain to exercise jurisdiction, although ouster of such jurisdiction is not absolute, the President added.

Date: 2026-01-10

Details: If you are a business owner in Pakistan, you may wonder whether itâ€™s possible to hold more than one sales tax registration. Under Sales Tax Rules, 2006, updated for tax year 2026, the FBR allows only one registration per person for a business activity, with certain exceptions. This guide explains how multiple registrations are handled, exceptions, and the proper procedure. âœ… Key Rule on Multiple Registrations Rule 10 of Sales Tax Rules, 2006 governs the cancellation of multiple registrations: 1. Single Registration Rule o If a person holds more than one sales tax registration, they must retain only one. o All other registrations must be surrendered with intimation to the Commissioner Inland Revenue at the relevant RTO. 2. Exception for Manufacturing Units o The FBR may allow separate registrations for manufacturing units located in different LTOs or RTOs, subject to conditions deemed appropriate. 3. Transfer of Tax Liabilities o Tax liabilities from cancelled registrations are transferred to the retained registration. o If the registrations are under different LTOs/RTOs, the Commissioner of the cancelled registration ensures tax files and arrears are transferred to the office of the retained registration. âš¡ Step-by-Step Guide if You Have Multiple Registrations 1. Identify all active sales tax registrations for your business. 2. Decide which registration to retain as your main one. 3. Submit intimation to the concerned Commissioner Inland Revenue at your RTO about the cancellations. 4. Surrender other registrations officially to ensure compliance. 5. Confirm transfer of tax liabilities and files from cancelled registrations to the retained registration. 6. Seek approval for exceptions if you have multiple manufacturing units in different jurisdictions. ðŸ’¡ FAQs on Multiple Sales Tax Registrations Q1: Can I keep two registrations for the same business activity? No. Only one registration per business activity is allowed unless the FBR grants exceptions for manufacturing units in different jurisdictions. Q2: What happens to taxes under cancelled registrations? All tax liabilities and arrears are transferred to the retained registration automatically. Q3: How do I apply for a separate registration for a new manufacturing unit? You must seek approval from the FBR, which may grant a separate registration under its discretion. ðŸ” Key Takeaways â€¢ Only one sales tax registration per business activity is allowed in Pakistan. â€¢ Multiple registrations must be cancelled and surrendered with proper intimation. â€¢ Tax liabilities are transferred to the retained registration. â€¢ Exceptions exist for manufacturing units in different LTOs or RTOs. Disclaimer: This article is for informational purposes only. For official guidance and compliance, consult the Federal Board of Revenue (FBR) or a certified tax professional.

Date: 2026-01-10

Details: The Federal Board of Revenue (FBR) has the authority to transfer the sales tax registration of a registered person from one Large Taxpayers Office (LTO) or Regional Tax Office (RTO) to another. This is governed by Rule 8 of Sales Tax Rules, 2006, updated for the tax year 2026. This guide explains how transfers work, your rights, and the step-by-step process to ensure compliance. âœ… When Can Registration Be Transferred? The FBR may transfer a registration: â€¢ From one LTO or RTO to another by official order. â€¢ If a business moves its activity from one jurisdiction to another. â€¢ For other valid reasons as determined by the registered person and approved by the Board. ðŸ“ What Happens After a Transfer? Once your registration is transferred: 1. Records and Responsibilities Move o All records and responsibilities of your registration move to the new LTO or RTO. 2. Jurisdiction Authority o The new office exercises full jurisdiction over your registration as if it always had it, including actions already pending before the transfer. 3. Intimation Letter o The Board sends an intimation letter to the registered person and a copy to the concerned LTO or RTO. âš¡ Step-by-Step Guide to Request a Transfer 1. Apply Using Form STR-I o If you are moving your business or have another valid reason, submit Form STR-I to the FBR. 2. Automatic Process o The Board follows procedures under sub-rules (2) and (3) to transfer your registration. 3. Alternative Filing Option o If you cannot file online, submit the prescribed application and documents to the Commissioner Inland Revenue at your RTO. o The office must enter your application into the computerized system within 3 days. ðŸ’¡ FAQs on Transfer of Sales Tax Registration Q1: Does transfer affect my tax obligations? No, all obligations and records move to the new office, and jurisdiction is seamless. Q2: How will I know my registration has been transferred? You will receive an intimation letter from the FBR, and a copy is sent to the concerned office. Q3: Can I request a transfer if my business expands to a new city? Yes, submit Form STR-I with your valid reason for the transfer. ðŸ” Key Takeaways â€¢ FBR can transfer sales tax registration from one LTO/RTO to another. â€¢ All records, obligations, and pending actions transfer seamlessly. â€¢ Registered persons can apply using Form STR-I or through the Commissioner Inland Revenue. â€¢ Notification and intimation ensure transparency and compliance. Disclaimer: This article is for informational purposes only. For official guidance and compliance, consult the Federal Board of Revenue (FBR) or a certified tax professional.

Date: 2026-01-10

Details: Are you a registered taxpayer in Pakistan looking to update your sales tax registration certificate? The Federal Board of Revenue (FBR) allows changes in the particulars of your registration under Sales Tax Rules, 2006, updated for the tax year 2026. Hereâ€™s a complete guide on how to make changes, the rules involved, and timelines. âœ… What Can Be Changed in Sales Tax Registration? The FBR permits changes in the following particulars: â€¢ Name of the registered person â€¢ Business address â€¢ Other details mentioned in the registration certificate â€¢ Business category (e.g., manufacturer, trader, service provider) ðŸ“ Rules for Changing Your Registration Details According to Rule 7 of the Sales Tax Rules, 2006, the process for changing particulars is: 1. Notification of Change o Any change in name, address, or other particulars must be notified to the FBR using Form STR-1. o The notification must be submitted within 14 days of the change. 2. Change of Business Category o Switching your business category (e.g., becoming a manufacturer) is allowed. o Ensure you meet all requirements under Rule 5 before applying. 3. Issuance of Revised Certificate o If approved, the FBR issues a revised registration certificate via the computerized system. o The certificate is effective from the date you applied for the change. 4. Commissionerâ€™s Authority o The Commissioner may modify your registration if necessary. o They can do so after reviewing your details, conducting inquiries, and giving you a reasonable opportunity to be heard. âš¡ Step-by-Step Guide to Update Your Sales Tax Certificate 1. Log in to the FBR online portal. 2. Fill out Form STR-1 with the new details. 3. Submit supporting documents if required (e.g., ownership proof, address change documents). 4. Wait for the FBR to review and approve your application. 5. Download the revised certificate once issued. ðŸ’¡ FAQs on Changing Sales Tax Registration Details Q1: How long does the FBR take to approve changes? Approval is usually processed within a few working days, depending on document verification. Q2: Is there a fee for changing particulars? No, FBR does not charge a separate fee for updates in registration particulars. Q3: What happens if I fail to notify a change? Failure to update your particulars within 14 days may result in penalties or compliance notices. ðŸ” Key Takeaways â€¢ FBR allows changes in name, address, and business category. â€¢ Use Form STR-1 to notify changes within 14 days. â€¢ A revised registration certificate will be issued online once approved. â€¢ The Commissioner can modify details if needed after inquiry. By following this guide, businesses can stay compliant with FBR regulations and ensure that their sales tax registration certificate reflects accurate details. Disclaimer: This article is for informational purposes only. For official guidance and compliance, consult the Federal Board of Revenue (FBR) or a certified tax professional.

Date: 2026-01-09

Details: Islamabad, January 9, 2026 â€“ In a decisive regulatory revision, the Federal Board of Revenue (FBR) has curtailed the condonation authority of Commissioner Inland Revenue (IR), reducing the maximum permissible time-limit from three years to two years. This amendment, formalized through SRO 14(I)/2026, supersedes the earlier SRO 1444(I)/2024, which had previously conferred broader discretionary powers to the Commissioner-IR. Under the prior framework, a Commissioner-IR could condone delayed submissions where statutory or regulatory timelines for applications or acts were exceeded, subject to prescribed procedural safeguards. The registered person or their authorized representative was required to submit a detailed application citing grounds for delay. The Commissioner would decide the matter within 30 days if no additional information was needed or within 45 days if further documentation was required, recording reasons for approval or rejection on merit. With the promulgation of SRO 14(I)/2026, the permissible condonation period has now been restricted to two years, thereby imposing a more stringent temporal framework on delayed applications. This reform aims to enhance regulatory discipline, curtail procedural leniency, and expedite resolution of pending matters within the FBRâ€™s jurisdiction. Furthermore, Commissioners-IR are mandated to furnish monthly consolidated reports to the Chief Commissioner-IR, detailing each processed case, including the registered person, NTN/STRN, dates of initial application, submission of complete information, decision date, and number of days condoned. This move underscores the FBRâ€™s commitment to transparency, accountability, and meticulous record-keeping in tax administration. Tax professionals and registered entities are advised to adjust compliance timelines in accordance with the revised condonation limits to avoid procedural complications.

Date: 2026-01-09

Details: Karachi, January 9, 2026 â€“ In a dramatic enforcement of bureaucratic accountability, the Federal Board of Revenue (FBR) has sacked Preventive Officer Syed Arshad Ali (BS-16) from service over his alleged involvement in a foreign currency bribery case at Karachi Airport. The decisive action underscores the governmentâ€™s zero-tolerance stance against corruption and procedural malfeasance in revenue administration. Disciplinary proceedings were initiated under Rules 3(a), 3(b), and 3(c) of the Civil Servants (Efficiency & Discipline) Rules, 2020, citing inefficiency, misconduct, and corruption. Following a meticulously conducted inquiry by PCS Officer Waheed Anwar Abro (BS-19), the preliminary recommendation of minor censure was deemed inadequate by the FBR authority, given the gravity of the officerâ€™s transgressions. Evidence reviewed included CCTV footage and passenger complaints, revealing that the accused officer detained a passenger for 28 minutes in the search room without witnesses, contravening the prescribed procedural protocols under the Customs Act, 1969. While direct proof of illegal gratification could not be conclusively established, circumstantial evidence substantiated gross procedural violations and serious misconduct, including unauthorized handling of currency declaration forms. After exhaustive evaluation of inquiry reports, oral submissions, and documentary evidence, the FBRâ€™s Member (Admn/HR) imposed the major penalty of dismissal with immediate effect under Rule 4(3)(e) and Rule 16(7)(b) of the Civil Servants (E&D) Rules, 2020. The officerâ€™s suspension period from July 31, 2025, to date will be treated as leave in accordance with the Revised Leave Rules, 1980. The accused retains the right to appeal within 30 days under the Civil Servants (Appeals) Rules, 1977. This high-profile dismissal sends a stark warning across the civil service that corruption, procedural impropriety, and abuse of authority will meet uncompromising consequences.

Date: 2026-01-08

Details: ISLAMABAD: A Think Tank - Prime Institute on Wednesday disclosed that taxpayers who have been manually filing the tax returns primarily due to lack of digital literacy or access of technology, are facing administrative issues. According to a paper of the said think tank, the government must ensure that all valid manual filings have been recognised. The Federal Board of Revenue (FBR) has denied the â€œActive Taxpayerâ€ status of the manual income tax filers for the tax year 2024, despite the existence of FBRâ€™s circular no.6 2025-26, that specifically recognises the legal status of manual return filers. Although these taxpayers submitted their returns within the extended deadline of 30th November 2025, the FBR field offices have blocked their active status, completely ignoring the directives of Federal Tax Ombudsmanâ€™s (FTO) and FBRâ€™s own circular. In an attempt to automate the procedure and contribute towards digitalisation of the economy, the FBR signed an agreement with Karandaaz for the digitisation of tax system. Under this agreement, several initiatives were introduced to improve tax compliance in the country. Among these initiatives, the FBR launched IRIS 3.0. Pakistan Digital tax system, aimed at simplifying the tax filing process through automation, real time data integration and artificial intelligence. The system was introduced to enhance efficiency, improve compliance and reduce discretionary powers exercised by FBRâ€™s field offices. While digitalisation of tax filing system was intended to streamline process and restrict the discretion of refusal, the transition has exposed the structural gaps in the system. Taxpayers who have been manually filing the tax primarily due to lack of digital literacy or access of technology are facing administrative issues. The government attempted to address this gap through circular no. 6, which not only extended the deadline but also gave directives for free legal and technical assistance to facilitate manual tax filers, however it was not been implemented. The failure to implement its own circular points towards institutional inertia and field offices unchecked discretionary actions. While the digital system was meant to improve the efficiency and transparency, it has left manual taxpayers marginalised. By doing so, the institution has not only disregarded the directives of FTO but also highlighted a system that penalise the lawful compliance rather than facilitating it. This approach discourages the voluntarily compliance and erode their trust in the institution. The government must ensure that all valid manual fillings have been recognised, the paper said. The existing tax facilitation desk at field tax offices are onboarding the manual taxpayers without any discretionary penalties, supported by the efficient assistance mechanism, real time verification systems and measures to reduce the institutional discrepancies. These measures ensure that digital tax system isnâ€™t integrated at the expense of manual taxpayers, it added. Copyright Business Recorder, 2026

Date: 2026-01-08

Details: Pakistanâ€™s supply chain â€” from manufacturers to retailers â€” plays a critical role in delivering goods to end consumers. However, for decades, large segments of this chain have remained outside the tax net, resulting in massive revenue leakages. To counter this, the Federal Board of Revenue (FBR) has aggressively deployed advance tax mechanisms under the Income Tax Ordinance, 2001. In Tax Year 2026, these provisions are being used as a key tool to document the economy and broaden the tax base. Letâ€™s understand how advance tax works across the supply chain and what it means for businesses. ðŸ” Why Advance Tax on Supply Chain? Traditionally, distributors, wholesalers, and retailers: â€¢ Operated without proper tax registration â€¢ Underreported income â€¢ Escaped income tax enforcement ðŸ’¡ Advance tax ensures that tax is collected upfront, even if the seller later underreports income. ðŸ Advance Tax on Sales to Distributors & Wholesalers (Section 236G) Under Section 236 of the Income Tax Ordinance, 2001 (updated for TY 2026): ðŸ“Œ Who Collects the Tax? â€¢ Manufacturers â€¢ Commercial importers ðŸ“Œ From Whom? â€¢ Distributors â€¢ Dealers â€¢ Wholesalers ðŸ“Œ When? â€¢ At the time of sale ðŸ“Œ Key Benefit âœ” The tax collected is adjustable and credited while computing annual income tax of the buyer. ðŸ“Š Tax Rates Under Section 236G (ATL Persons) Category of Sale Advance Tax Rate Fertilizers 0.7% Other than Fertilizers 0.1% âœ… Special Relief for Fertilizer Sector If distributors, dealers, or wholesalers of fertilizers: â€¢ Appear on both ATL (Income Tax) and Sales Tax Active Taxpayers List, âž¡ Reduced rate applies: 0.25% ðŸ›’ Advance Tax on Sales to Retailers (Section 236H) To bring retailers into the tax net, Section 236H imposes advance tax on retail sales. ðŸ“Œ Who Collects the Tax? â€¢ Manufacturers â€¢ Importers â€¢ Distributors â€¢ Dealers â€¢ Wholesalers ðŸ“Œ From Whom? â€¢ Retailers â€¢ In some cases, wholesalers purchasing from distributors/dealers ðŸ“Œ Tax Rate (ATL) âž¡ 0.5% on gross amount of sales âœ” This tax is also adjustable against the retailerâ€™s annual income tax liability. ðŸ”„ Is Advance Tax Final or Adjustable? âœ… Not a final tax Advance tax collected under: â€¢ Section 236 â€¢ Section 236G â€¢ Section 236H is fully adjustable while filing the income tax return for the relevant tax year. ðŸš¨ What About Non-ATL Persons? âš Important Note: â€¢ The rates mentioned above apply only to ATL (Active Taxpayers List) persons â€¢ Non-ATL rates are significantly higher â€¢ FBR uses higher rates as a penalty to force registration and filing ðŸ‘‰ Businesses should verify ATL status before transactions to avoid excessive tax deductions. ðŸ“ˆ How This Helps Broaden the Tax Base âœ” Forces undocumented businesses into the system âœ” Creates transaction trails across the supply chain âœ” Encourages NTN registration and return filing âœ” Reduces tax evasion at retail and wholesale levels ðŸ“¢ Advance tax has become one of FBRâ€™s strongest enforcement tools in 2026. âœ… Key Takeaways for Businesses â€¢ Always maintain ATL status â€¢ Keep withholding tax certificates â€¢ Adjust advance tax in annual returns â€¢ Ensure proper documentation across sales channels ðŸ’¡ Failing to comply increases cost of doing business and invites audits. ðŸ“Œ Disclaimer This article is for informational purposes only and does not constitute legal or tax advice. Tax rates and laws may change. Readers are advised to consult FBR notifications, the Income Tax Ordinance, 2001, or a qualified tax professional for case-specific guidance.

Date: 2026-01-07

Details: Wedding expenses are continuously rising due to inflation. Organizing a ceremony for relatives and loved onesâ€”especially in a wedding hall or marqueeâ€”now also means bearing additional taxes along with venue rent. Do you know how much tax will be applicable on such events in tax year 2026? You must be aware. Section 236CB of the Income Tax Ordinance, 2001 (updated for tax year 2026) deals with advance tax on functions and gatherings. It states that a prescribed person shall collect advance tax at the specified rate on the total bill from a person arranging or holding a function at a marriage hall, marquee, hotel, restaurant, commercial lawn, club, community place, or any other such venue. Planning a wedding in Pakistan in 2026? Before you book a marriage hall or marquee, itâ€™s important to understand the advance tax on wedding functions imposed by the Federal Board of Revenue (FBR). With inflation already driving up wedding costs, this tax can significantly increase your total bill. Letâ€™s break it down in a simple, interactive way. ðŸ“Œ What Is Wedding Function Tax? Under Section 236CB of the Income Tax Ordinance, 2001, the government collects advance adjustable tax on marriage-related events and other gatherings. This tax applies to events held at: â€¢ Marriage halls & marquees â€¢ Hotels & restaurants â€¢ Commercial lawns â€¢ Clubs & community centers â€¢ Any venue used for wedding functions ðŸ’ What Counts as a â€œFunctionâ€? According to the law, a function includes: â€¢ Wedding ceremonies (nikah, walima, mehndi, barat) â€¢ Engagement parties â€¢ Seminars, workshops, exhibitions â€¢ Concerts, shows, and private parties ðŸ‘‰ If itâ€™s a gathering at a paid venue, tax applies. ðŸ‘¤ Who Collects This Tax? The tax is collected by the â€œprescribed personâ€, which includes: â€¢ Owner or manager of the marriage hall or marquee â€¢ Hotel or restaurant operator â€¢ Lawn or club management You donâ€™t pay FBR directlyâ€”the venue collects it from you and deposits it. ðŸ’° Wedding Tax Rates for Tax Year 2026 Taxpayer Status Tax Rate on Total Bill ATL (Filer) 10% Non-ATL (Non-Filer) 20% (100% higher) ðŸ”´ Example If your wedding bill is Rs1,000,000: â€¢ ATL person pays Rs100,000 tax â€¢ Non-ATL person pays Rs200,000 tax ðŸ”„ Is This Tax Adjustable? Yes âœ… The advance tax collected under Section 236CB is adjustable, meaning: â€¢ Filers can adjust it against their annual income tax liability â€¢ Non-filers usually bear it as an additional cost âœ… How to Reduce Wedding Tax Legally? âœ” Become an ATL filer before booking âœ” Ensure your NTN is active âœ” Ask the venue for a proper tax invoice âœ” Keep records for tax adjustment ðŸ“¢ Final Takeaway Wedding celebrations in Pakistan now come with a significant tax burden, especially for non-filers. If youâ€™re planning a marriage event in 2026, becoming an Active Taxpayer can save you hundreds of thousands of rupees. ðŸ’¡ Tip: Always confirm tax details with the venue before signing the booking agreement. Disclaimer: This article is for general informational purposes only and does not constitute legal, tax, or financial advice. Tax laws and rates may change, and their application can vary based on individual circumstances. Readers are advised to consult the Federal Board of Revenue (FBR), relevant tax laws, or a qualified tax professional before making any financial or legal decisions related to wedding or function taxes.

Date: 2026-01-07

Details: Karachi, January 7, 2026 â€“ The Federal Board of Revenue (FBR) is facing severe scrutiny after yet another taxpayer reported his account hacked, exposing massive security flaws in the governmentâ€™s online tax system. The incident, uncovered by the Federal Tax Ombudsman (FTO), highlights critical weaknesses that could threaten Pakistanâ€™s national revenue. Khurshid Ahmad, the complainant, revealed that his IRIS account has been repeatedly accessed by cybercriminals since January 2025. Fraudsters have allegedly filed fake sales tax returns, manipulated his tax registration profile, and added bogus business names, causing enormous revenue losses. Despite multiple complaints to the FBR chairman and the Federal Investigation Agency (FIA), no corrective action has been taken. The FTOâ€™s investigation exposed alarming details: the hacker paid only Rs35 in sales tax while generating fake supplies worth Rs249 million between July 2024 and June 2025. Analysis of login data from PRAL showed IP addresses from locations across Pakistanâ€”including Karachi, Lahore, Multan, and Quettaâ€”as well as international addresses in London, Singapore, and Amsterdam, indicating the use of sophisticated VPNs. â€œThe repeated hacking of the same taxpayerâ€™s ID raises serious concerns about insider involvement and the integrity of the FBR IT system,â€ the FTO noted. Weak internal controls, inadequate data security, and insufficient safeguards against tax fraud have emboldened unscrupulous taxpayers to exploit the system using fake or flying invoices. The FTO warned that the current lax enforcement regime has allowed these fraudulent practices to flourish. Beneficiaries have knowingly purchased fake invoices without actual goods movement, evading substantial tax liabilities. The Ombudsman has recommended that the FBR take strict legal action, prosecute culprits, and ensure Chief Commissioners identify other beneficiaries along the supply chain for immediate action. Experts say the latest case underscores an urgent need for FBR to overhaul its IT security and tighten internal controls to protect taxpayer data and safeguard national revenue.

Date: 2026-01-07

Details: Peshawar, January 7, 2026 â€” The Sarhad Chamber of Commerce and Industry (SCCI) has submitted comprehensive proposals to the Federal Tax Policy Office (TPO) for inclusion in the upcoming federal budget for fiscal year 2026-27, calling for wide-ranging tax reforms to promote growth, investment, and ease of doing business. The proposals were presented by SCCI President Junaid Altaf during the inaugural consultative session on budget recommendations for FY27, held at the chamber house under the auspices of the Tax Policy Office. Director General Trade Tax Policy Office Islamabad, Dr Najeeb Ahmad Memon, along with Directors Ejaz and Naeemul Hassan, attended the session as keynote speakers. The Tax Policy Office has initiated consultations from Khyber Pakhtunkhwa to gather input from chambers of commerce and key stakeholders across the country for framing a business-friendly and growth-oriented federal budget. Addressing the session, President Junaid Altaf welcomed the governmentâ€™s consultative approach and stressed the need for incorporating the chamberâ€™s recommendations into the budget. He emphasized consistency, transparency, simplification of tax laws, and elimination of anomalies and duplication in the taxation system to ease difficulties faced by businesses. The SCCI chief called for a reduction in high tax rates, resolution of online system glitches affecting timely filing of returns, and phased implementation of the Point of Sale (POS) system. He also raised serious concerns over the digital invoicing regime, stating that the business community has been facing significant operational challenges since its introduction. SCCI proposed broadening the tax base without overburdening existing taxpayers, reducing corporate tax to 29 percent, maintaining GST at 18 percent, and introducing policies to support growth and exports. Former SCCI presidents and committee heads highlighted anomalies in sales tax, income tax, customs regulations, and export policies, urging long-term, consistent tax reforms. DG Tax Policy Office Dr Najeeb Memon assured participants that their proposals would be carefully reviewed and incorporated into the upcoming budget to ensure sustainable and trader-friendly tax solutions.

Date: 2026-01-06

Details: Sohail Sarfraz Published about 3 hours ago ISLAMABAD: Federal Tax Ombudsman Zafar ul Haq Hijazi Monday conveyed to the Forum of Pakistan Ombudsman (FPO) that the taxpayers should be given easy access to grievance redressal mechanism through a simplified outreach strategy. The 31st meeting of the Forum of Pakistan Ombudsman (FPO) was held at the Federal Tax Ombudsman (FTO) Secretariat, Islamabad. The meeting served as an introductory and consultative session, bringing together Ombudspersons from across the country. The meeting was hosted by Federal Tax Ombudsman, Zafar ul Haq Hijazi, who welcomed participants and outlined key institutional priorities, including effective use of information technology, procedural uniformity, stronger inter-institutional coordination through the FPO, and enhanced public outreach. He emphasized that awareness of Ombudsman institutions remains limited, particularly among the general public, and stressed the need for simplified outreach strategies to ensure easy access to grievance redressal mechanisms. He also highlighted the importance of institutional experience while electing representatives to key FPO positions. International achievements of FPO members were acknowledged, including the election of Ms Ayesha Hamid, Punjab Ombudsman, as Vice President of the International Ombudsman Institute (IOI), and Sohail Rajput, Sindh Ombudsman, as IOI Director. Almas Ali Jovindah, Executive Secretary FPO, formally initiated the proceedings and presented a brief overview of recent achievements, including the election of Ejaz Ahmed Qureshi, Wafaqi Mohtasib, as President of the Asian Ombudsman Association (AOA), and Pakistanâ€™s active participation in international Ombudsman forums. Policy discussions focused on digitization, use of emerging technologies, and legal reforms to enhance efficiency and accountability. Ms Fauzia Viqar highlighted the role of IT systems and responsible use of Artificial Intelligence in improving service delivery. Former Ombudspersons shared best practices, including institutional conferences, public awareness initiatives, and online training programmes introduced during the COVID-19 period. Copyright Business Recorder, 2026

Date: 2026-01-06

Details: Sohail Sarfraz Published about 3 hours ago ISLAMABAD: The Federal Board of Revenue (FBR) has imposed a major penalty on a tax official of Regional Tax Office (RTO), Lahore for deleting CCTV footage of stealing of 20 cartons of cigarettes from the premises of the office, said a notification issued here on Monday. According to the notification, the disciplinary proceedings were initiated against Khalid Mahmood, posted as MIS officer at Corporate Tax Office, Lahore on the charges of â€œInefficiencyâ€ and â€œMisconductâ€. The Departmental Representative (DR) informed that the accused officer, along with two Sepoys, was involved in removal of 20 cartons of cigarettes and he being the sole individual with access to the CCTV system, was also responsible for deletion of the footage from the backyard of the premises. The accused officer stated that he was officially posted in Director office/ Motor Transport office for maintenance of vehicles and updation of data on Iris-LMS and he has no knowledge of missing cartons of cigarettes. However, being a closed holiday, he had attended office on the verbal directions of Deputy Director for disbursement of labour charges to the labourers, when two trucks were found within the premises and left office at 3:00 pm being Ramazan days. He neither has any knowledge about misplacement of cigarettes nor does he have any responsibility for maintenance of CCTV system. Therefore, he requested to exonerate him from the charges. The Member (Admin) being competent authority, in instant case imposed major penalty of, â€œReduction from a lower Post and Pay Scale i.e. Data Entry Operator (BS-14) for a period of two yearsâ€, upon Khalid Mahmood, MIS Officer (BS-16), Corporate Tax Office, Lahore under Rule 4(3Xb) read with Rule 16(7)(b) of Civil Servants (Efficiency and Discipline) Rules, 2020. After examining relevant record, inquiry report, written and verbal submissions made by the DR and accused officer, it has been observed that Khalid Mahmood, MIS Officer being Incharge having access to the CCTV system (including the cameras and DVR) was entrusted with serious responsibility which he has failed to fulfil as evident by deletion of CCTV footage of the premises from where 20 cartons of cigarettes were stolen. Being Incharge of MIS related functions, he failed to ensure maintenance, reporting or taking corrective measures to keep CCTV cameras in proper working condition and to ensure safety of CCTV footage. While acquitting him from the criminal proceedings, the Honâ€™ble District Court Lahore had also made it clear that the department would be at liberty to proceed against the accused persons as per law. Keeping in view the greater level of his inefficiency/negligence, minor penalty recommended by the Inquiry Officer is not considered appropriate and he deserves a major penalty commensurating with the gravity of offenses committed by him. Copyright Business Recorder, 2026

Date: 2026-01-05

Details: Written by Shahnawaz Akhter Pakistanâ€™s entertainment industry has long faced stiff competition from foreign TV dramas, dubbed serials, and advertisements featuring international actors. The growing presence of foreign content on local TV channels often discourages investment in local talent, writers, producers, and actors. To address this imbalance, the Federal Board of Revenue (FBR) uses the tax framework as a regulatory tool to promote local entertainment and discourage excessive reliance on foreign productions. ðŸŽ¬ FBRâ€™s Tax Policy to Support Local Content Under Section 236CA of the Income Tax Ordinance, 2001 (updated for tax year 2026), FBR imposes advance income tax on: â€¢ Foreign-produced TV drama serials â€¢ Foreign TV plays (including dubbed content) â€¢ Advertisements starring foreign actors This tax policy increases the cost of airing foreign content, making locally produced entertainment more competitive and attractive for broadcasters. ðŸ“œ What Does Section 236CA Say? According to the law: âœ… Tax Collection Authority Any licensing authority certifying foreign TV content or advertisements for screening on landing rights channels is required to collect advance tax. âœ… Minimum Tax Rule The tax collected under this section is treated as minimum tax, meaning: â€¢ No adjustment or refund is allowed â€¢ Tax liability is considered fully discharged for that income ðŸ’° Tax Rates on Foreign Entertainment Content (2026) Type of Content Advance Tax Rate Foreign-produced TV drama serial Rs1,000,000 per episode Foreign-produced TV play (single episode) Rs3,000,000 Advertisement starring a foreign actor Rs100,000 per second ðŸŽ¯ How This Tax Promotes Local Entertainment This taxation mechanism serves multiple purposes: âœ” Discourages excessive import of foreign content âœ” Encourages TV channels to invest in Pakistani dramas and actors âœ” Creates a level playing field for local producers âœ” Supports cultural identity and domestic creative talent âœ” Generates revenue without burdening local creators â“ Frequently Asked Questions (FAQs) ðŸ”¹ Does this tax apply to Pakistani dramas? No. The tax applies only to foreign-produced content and advertisements featuring foreign actors. ðŸ”¹ Is dubbed foreign content also taxable? Yes. Foreign dramas dubbed in Urdu or any other language fall under this section. ðŸ”¹ Is the tax adjustable? No. The tax is treated as minimum tax and cannot be adjusted against other liabilities. ðŸ”¹ Who collects the tax? The licensing authority certifying the content is responsible for collecting the tax. ðŸ“Œ Final Thoughts Through Section 236CA, FBR uses fiscal policy not just as a revenue tool but as a strategic measure to protect and promote Pakistanâ€™s local entertainment industry. By increasing the cost of foreign content, the policy incentivizes broadcasters to support local talent, storytelling, and cultural representation. ðŸ‘‰ Tip: Media houses and advertisers should carefully evaluate the tax impact before importing foreign content in 2026. Disclaimer: This article is published for informational and educational purposes only. It does not constitute legal, tax, or professional advice. Tax laws, rates, and interpretations are subject to change and may vary based on specific circumstances. Readers are advised to consult the Federal Board of Revenue (FBR), relevant statutory provisions, or a qualified tax professional before making any business or compliance decisions.

Date: 2026-01-05

Details: Written by Shahnawaz Akhter Are you thinking about buying or selling immovable property in Pakistan in 2026? ðŸ Before you finalize any deal, it is crucial to understand the advance tax structure imposed by the Federal Board of Revenue (FBR). Many buyers and sellers face unexpected costs simply because they are unaware of applicable tax rates. This guide explains Section 236C of the Income Tax Ordinance, 2001 (updated for Tax Year 2026) in a clear and practical way. What Is Section 236C? Section 236C empowers the FBR to collect advance income tax at the time of sale or transfer of immovable property. The tax is collected by the authority responsible for: â€¢ Registering â€¢ Recording â€¢ Attesting the transfer of property This includes registrars, housing authorities, housing societies, cooperative societies, real estate projects, joint ventures, and private developers. Who Pays This Tax? ðŸ”¹ The seller or transferor of the property is responsible for paying the advance tax at the time of registration or transfer. ðŸ”¹ The tax is adjustable against final tax liability, except where: â€¢ The property is bought and sold within the same tax year (minimum tax applies). Mandatory Condition: Section 7E Compliance ðŸš¨ Important Update for 2026 No property transfer can be registered unless the seller has fully discharged tax liability under Section 7E and provided proof in the prescribed manner. Special Exemptions You Should Know You may be exempt from Section 236C if: âœ” You are a dependent of a Shaheed of Pakistan Armed Forces âœ” You are a war-wounded person or ex-serviceman âœ” You are a serving or retired federal/provincial government employee âœ” It is the first sale of an officially allotted property Overseas Pakistanis Benefit ðŸŒ If you are a non-resident individual holding: â€¢ NICOP / POC / CNIC â€¢ Property purchased via FCVA or NRVA âž¡ The tax deducted under Section 236C will be treated as final tax, replacing capital gains tax under Section 37. Property Tax Rates for 2026 (Section 236C) Your tax rate depends on your tax compliance status. ðŸ“Š Advance Tax on Sale of Immovable Property Property Value ATL Filer Late Filer Non-ATL Up to Rs. 50 million 4.5% 7.5% 11.5% Rs. 50m â€“ Rs. 100m 5% 8.5% 11.5% Above Rs. 100m 5.5% 9.5% 11.5% âš Non-ATL sellers pay more than double the tax compared to ATL filers. Why Being on ATL Matters âœ” Lower tax rates âœ” Better liquidity during transactions âœ” No unnecessary capital blockage âœ” Smoother property registration process ðŸ“Œ Tip: File your income tax return on time to remain on the Active Taxpayers List (ATL). Key Takeaways â€¢ Section 236C applies to all property sales and transfers â€¢ Tax rates are significantly higher for non-filers â€¢ Section 7E clearance is mandatory before registration â€¢ Overseas Pakistanis enjoy final tax relief under specific conditions â€¢ ATL status can save you millions of rupees Disclaimer: This article is intended for general informational purposes only and does not constitute legal, financial, or tax advice. Tax laws, rates, and interpretations may change and can vary based on individual circumstances. Readers are advised to consult the Federal Board of Revenue (FBR) or a qualified tax professional before making any property or tax-related decisions.

Date: 2026-01-02

Details: â€¢ FBR collected Rs1,427.1 billion in December 2025, achieving 99% of its monthly target BR Web Desk Published January 2, 2026 The federal government has called for a further tightening of tax enforcement and accelerated efforts to broaden the tax base, as Finance Minister Senator Muhammad Aurangzeb urged the Federal Board of Revenue (FBR) to intensify compliance measures and expand the tax net. According to a statement released on Friday, Aurangzeb has lauded the FBR field formations for achieving the highest tax collection ever recorded in the month of December, describing the performance as a strong validation of the governmentâ€™s fiscal reform agenda and sustained focus on compliance, enforcement, and digitisation. Addressing Team FBR and field formations via a video link conference, the finance minister stated, â€œThe progress made over the last 18 months is remarkable, and the December 2025 collection is extremely encouraging.â€ He emphasised that the governmentâ€™s strategy of digitising the economy, promoting cashless transactions, and strengthening enforcement while maintaining business momentum has begun to deliver tangible and sustainable results. Reflecting this policy direction and administrative resolve, the FBR collected Rs1,427.1 billion in December 2025, achieving 99% of its monthly target of Rs1,446 billion. â€œThis performance represents the highest revenue collection for December in any year, underscoring improved tax compliance and effective enforcement across the system,â€ read the statement. The Inland Revenue Service (IRS) achieved 99.8% of its target, collecting Rs1,308 billion against a target of Rs1,310 billion. On a month-on-month basis, revenue collection surged by 59%, rising from Rs898 billion in November to Rs1,427.1 billion in December. This growth was broad-based across all major tax heads. Income tax collection more than doubled, increasing by 107%, from Rs402 billion in November to Rs831.5 billion in December. Sales tax collection rose by 25% to Rs403.7 billion, while Federal Excise Duty (FED) increased by 6% to Rs72.8 billion. Customs duty collection also grew by 15%, reaching Rs118.9 billion. â€œUnder the continuous oversight of the FBR Board and in line with the finance ministryâ€™s reform roadmap, these results reflect a decisive shift toward stronger compliance, improved enforcement, and institutional accountability, reinforcing confidence in the governmentâ€™s commitment to sustainable revenue growth,â€ read the statement. Concluding his address, the finance minister urged FBR field formations to further intensify their efforts and double down on initiatives aimed at deepening and widening the tax net. He emphasised that better tax compliance and enforcement measures are the only sustainable way to ease the tax burden on the formal sector. The finance minister expressed confidence that Team FBR, through continued diligence, professionalism, and effective enforcement, would play a pivotal role in achieving this critical national objective.

Date: 2026-01-02

Details: Written by Shahnawaz Akhter Can You Get a Reward for Reporting Tax Evasion in Pakistan? Yes. Citizens of Pakistan are legally entitled to receive a reward for providing credible information that leads to the detection or collection of evaded income tax. The authority for this incentive comes from Section 227B of the Income Tax Ordinance, 2001 (updated for tax year 2026), which formally recognizes and protects whistleblowers. What Type of Information Qualifies for Reward? Under Section 227B(1), FBR may sanction a reward if information leads to detection of: â€¢ Concealment of income â€¢ Evasion of income tax â€¢ Tax fraud â€¢ Corruption or misconduct â€¢ Misconduct by income tax authorities âœ… The information must be credible, actionable, and lead to actual tax detection or recovery. Who Can Be a Whistleblower? According to the law, a whistleblower is: A person who reports concealment or evasion of income tax, fraud, corruption or misconduct to the competent authority, leading to detection or collection of tax. âœ” Any citizen can qualify âœ” No professional background required âœ” Applies to private individuals and public officials How is the Reward Determined? Under Section 227B(2): â€¢ FBR will prescribe: o Procedure for reporting o Apportionment of reward â€¢ This is done through official Gazette notifications ðŸ”” Reward amounts are linked to successful recovery and not merely information sharing. When Is a Reward Claim Rejected? Your claim for reward will be rejected under Section 227B(3) if: Reason Explanation Information has no value Does not lead to detection No evidence provided Unsupported allegations FBR already knew Information already on record Publicly available Found in public records No tax recovery No collection made from info âš Simply accusing someone is not enough â€” evidence is mandatory. Step-by-Step: How to Report Tax Evasion to FBR ðŸ” Guide 1. Collect credible evidence (documents, records, transactions) 2. Identify concealment or evasion of tax 3. Report to competent FBR authority 4. Cooperate if further clarification is required 5. Wait for detection and recovery outcome 6. Reward is sanctioned if legal conditions are met Key Benefits of Whistleblower Program âœ” Encourages tax compliance âœ” Protects public interest âœ” Helps curb corruption âœ” Rewards citizens for civic responsibility âœ” Strengthens tax enforcement FAQs â€“ FBR Whistleblower Reward Q1: Can I get reward without evidence? No. Information must be supported by evidence. Q2: Will I get reward if FBR already knew? No. Reward is rejected if information is already on record. Q3: Is reward guaranteed? No. Reward depends on successful tax recovery. Q4: Can I report tax officials involved in corruption? Yes. Section 227B covers misconduct by tax authorities. Checklist Before You Report â€¢ Information is original â€¢ Evidence is available â€¢ Matter is not publicly known â€¢ Tax evasion is identifiable â€¢ Potential tax recovery exists Important Legal Note Only credible whistleblowers whose information leads to actual detection and collection of tax are entitled to rewards. False or baseless allegations do not qualify. Disclaimer: This article is for informational purposes only and does not constitute legal advice. Reward procedures and amounts are subject to official notifications issued by the Federal Board of Revenue (FBR).

Date: 2026-01-02

Details: Written by Shahnawaz Akhter Why Understanding FBR Notice Service Matters Many taxpayers assume they can avoid tax proceedings simply by ignoring a notice or claiming it was never received. However, Pakistanâ€™s tax laws clearly define multiple valid methods through which the Federal Board of Revenue (FBR) can legally serve notices. Under Section 218 of the Income Tax Ordinance, 2001 (updated for tax year 2026), a notice is considered properly served even if the taxpayer does not physically receive itâ€”provided legal service requirements are met. How FBR Can Serve Notices to Resident Individuals For a resident individual (not acting in a representative capacity), FBR may serve notices in the following legally valid ways: âœ… Legally Recognized Methods of Service Mode of Service Explanation Personal service Delivered directly to the individual or their legal representative Registered post / courier Sent to the individualâ€™s usual or last known address in Pakistan Civil Procedure service Served under the Code of Civil Procedure, 1908 (e.g., summons method) Electronic service Sent electronically in the manner prescribed by FBR âš Important: Even an email or portal notification can be a legally valid notice. How FBR Serves Notices to Companies & Other Persons For companies, AOPs, firms, trusts, and non-residents, notices are valid if served through: Mode of Service Explanation Personal service Served on the authorized representative Registered post / courier Sent to registered office or official address in Pakistan Business address If no registered office exists, sent to any place of business Civil Procedure service Served under summons procedure Electronic service Delivered electronically as prescribed Notices to Dissolved Associations If an Association of Persons (AOP) has been dissolved: â€¢ FBR may serve notice on any former principal officer or member â€¢ Dissolution does not eliminate tax responsibility Notices After Business Discontinuation Where a business is discontinued under Section 117: â€¢ Notice may be served personally, or â€¢ On any individual who was the representative at the time of discontinuance Can You Challenge a Notice After Compliance? âŒ No. Under Section 218(5): â€¢ Once you file the return or comply with the notice, â€¢ You cannot later challenge the validity of the notice or its service ðŸ“Œ This provision prevents technical objections after compliance. All Valid Ways FBR Can Send Notices âœ” Personal delivery âœ” Registered post âœ” Courier service âœ” Civil Procedure summons âœ” Electronic service (email, portal, digital system) âœ” Service on representatives âœ” Service at business premises FAQs â€“ FBR Notices in 2026 Q1: Is an email or portal notice legally valid? Yes. Electronic service is fully recognized under Section 218. Q2: What if I changed my address and missed the notice? Not updating your address does not invalidate service to your last known address. Q3: Can I ignore a courier-delivered notice? No. Courier service is a legally valid method. Q4: Can I challenge service after filing my return? No. Once complied with, the validity of service cannot be questioned. Compliance Checklist for Taxpayers Use this checklist to stay protected: â€¢ Update your address on FBR portal â€¢ Monitor email and IRIS notifications â€¢ Respond to courier and registered mail â€¢ Keep your representative informed â€¢ Do not ignore summons-style notices Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. For official interpretation, consult the Federal Board of Revenue (FBR) or a qualified tax professional.

Date: 2026-01-02

Details: Written by Shahnawaz Akhter Many citizens in Pakistan take the Federal Board of Revenue (FBR) lightly, especially when it comes to concealment of income. However, under Pakistanâ€™s tax laws, FBR does have the legal authority to arrest taxpayers if a serious income tax crime is established. The Income Tax Ordinance, 2001 (updated for tax year 2026) clearly defines the power, conditions, and procedure of arrest under Sections 203B and 203C. When Can FBR Arrest a Taxpayer? (Section 203B) Under Section 203B, a taxpayer may be arrested only when all legal conditions are fulfilled. Conditions for Arrest FBR can arrest a taxpayer if: â€¢ An audit is conducted under Section 177(8) read with Section 214C â€¢ An assessment or amended assessment is made under Section 121 or 122 â€¢ The assessing officer records a clear finding of concealment of income â€¢ The concealment results in non-payment of tax exceeding: Taxpayer Status Tax Amount Threshold Filer Rs. 100 million or above Non-filer Rs. 25 million or above âš Arrest is not automatic. It requires material evidence and approval from a high-level committee. Approval Committee for Arrest No arrest can be made without written approval of a special committee comprising: â€¢ Minister for Finance and Revenue â€¢ Chairman, Federal Board of Revenue â€¢ Senior-most Member of the Board This safeguard ensures arrests are used only in serious tax crimes. Arrest of Company Directors and Officers If the offender is a company, FBR can arrest: â€¢ Any director or officer â€¢ Who is personally responsible for actions leading to concealment of income ðŸ”” Important: Arrest of directors does not absolve the company from payment of tax, default surcharge, or penalties. Can the Offence Be Compounded Instead of Arrest? Yes. Under Section 203B(4): â€¢ The Chief Commissioner, with Board approval, may compound the offence â€¢ Compounding is possible before or after recovery proceedings â€¢ The taxpayer must pay: o Due tax o Default surcharge o Penalty as determined under law This provision allows resolution without arrest, provided dues are cleared. Procedure of Arrest â€“ Section 203C Explained FBR must strictly follow the Code of Criminal Procedure, 1898, along with safeguards under Section 203C. Key Procedural Safeguards 1. Production Before Court â€¢ Arrested person must be produced before: o Special Judge, or o Nearest Judicial Magistrate â€¢ Within 24 hours of arrest (excluding travel time) 2. Bail Rights â€¢ The Special Judge may: o Grant bail (with or without surety), or o Refuse bail with recorded reasons â€¢ Bail may later be cancelled after hearing the accused 3. Custody Limits â€¢ Inland Revenue officer may seek remand â€¢ Maximum custody for inquiry: 14 days Investigation and Inquiry Powers During inquiry, Inland Revenue officers have powers similar to police officers, including: â€¢ Recording statements â€¢ Conducting investigations â€¢ Recovering documents and evidence If no sufficient evidence is found: â€¢ The accused must be released on bond â€¢ A report is sent to the Special Judge for discharge Register of Arrests & Judicial Oversight Every arrest must be recorded in a mandatory â€œRegister of Arrests and Detentionsâ€, including: â€¢ Time and date of arrest â€¢ Evidence collected â€¢ Witness details â€¢ Day-to-day inquiry progress This register can be produced before the Special Judge at any time. Key Takeaways for Taxpayers âœ… FBR can arrest taxpayers, but only in serious, high-value tax crimes âœ… Arrest requires audit findings, evidence, and top-level approval âœ… Taxpayers have full legal rights, including bail and judicial oversight âœ… Offences may be compounded by paying tax, surcharge, and penalty âœ… Ordinary mistakes or small disputes do not lead to arrest Use this checklist to stay protected: â€¢ Declare full income accurately â€¢ Respond to FBR audit notices â€¢ Avoid concealment of income â€¢ Maintain proper documentation â€¢ Consult tax professionals for large transactions Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. For official interpretation and case-specific guidance, consult the Federal Board of Revenue (FBR) or a qualified tax professional.

Date: 2026-01-01

Details: For tax year 2026, taxpayer registration is mandatory for every person in Pakistan. Failing to register may create hassles in obtaining essential services, such as utility connections, loans, or operating e-commerce platforms. According to Section 181 of the Income Tax Ordinance, 2001 (updated for 2026): â€¢ All taxpayers, including those selling digitally ordered goods or services, must register using the prescribed form. â€¢ Online marketplaces and courier services cannot allow any vendor to operate without registration. â€¢ The Commissioner may also register a taxpayer if facts of the case necessitate. â€¢ Individuals with CNIC automatically have their CNIC serve as their National Tax Number (NTN). Who Must Register? Type of Taxpayer Requirement Individuals selling online within Pakistan Must register with FBR E-commerce platforms and courier services Vendors cannot sell without registration New commercial or industrial utility connections Registration mandatory to get electricity or gas Commissioner-initiated cases Commissioner may register taxpayers directly âš¡ Tip: Registration is required even for small sellers or freelancers to avoid legal or operational delays. Active Taxpayersâ€™ List (ATL) Section 181A empowers FBR to maintain an Active Taxpayersâ€™ List (ATL): â€¢ Only registered taxpayers are included in ATL. â€¢ Being on ATL ensures smooth business operations, utility approvals, and eligibility for government tenders. Compulsory Registration for Utilities Section 181AA specifies mandatory registration for commercial or industrial electricity and gas connections: â€¢ Applications for new utility connections will not be processed unless the applicant is a registered taxpayer. â€¢ This rule ensures tax compliance before providing essential services. âœ… Tip: Always verify your CNIC/NTN status on the FBR portal before applying for new utilities to avoid delays. Step-by-Step Guide: How to Register 1. Visit the FBR e-portal 2. Fill out the registration form with your CNIC details. 3. Submit required documents: CNIC copy, proof of business (if applicable). 4. Confirm registration: Your CNIC becomes your NTN and is listed on ATL. FAQs â€“ Taxpayer Registration 2026 Q1: Who must register as a taxpayer in 2026? All individuals, e-commerce vendors, and businesses applying for utilities must register. Q2: Does my CNIC automatically serve as NTN? Yes, for individuals with CNIC issued by NADRA, it serves as NTN from 2015 onwards. Q3: Can an online marketplace allow unregistered vendors to operate? No. Only registered vendors can sell on platforms or use courier services. Q4: What happens if I donâ€™t register? You may face difficulties obtaining utility connections, government services, or engaging in e-commerce legally. Verify Your Registration Users can check their registration and Active Taxpayer status by entering their CNIC on FBRâ€™s e-portal: Check Registration Status Disclaimer: This content is for informational purposes only and does not constitute legal or tax advice. For official guidance, consult the Federal Board of Revenue (FBR) or a certified tax professional.

Date: 2026-01-01

Details: The Federal Board of Revenue (FBR) in Pakistan has been granted extensive audit powers under Section 177 of the Income Tax Ordinance, 2001, updated for tax year 2026. Taxpayers must understand these powers to ensure compliance and avoid disputes. ðŸ” What Are the Audit Powers of the FBR Commissioner? Under Section 177, the FBR Commissioner can: â€¢ Request any records, documents, or books of accounts maintained by the taxpayer. â€¢ Access electronic data and require the use of machines and software for verification. â€¢ Obtain hard copies or extracts of data for audit and investigation purposes. â€¢ Call for records up to six years from the end of the relevant tax year, unless proceedings are ongoing. ðŸ§¾ Conducting the Audit Once records are obtained: â€¢ The Commissioner may examine accounts, expenditure, assets, and liabilities. â€¢ Audit proceedings can be conducted electronically via video links. â€¢ If records are incomplete, missing, or inadequate, the Commissioner may use sectoral benchmark ratios to determine taxable income. (Sectoral benchmark ratios include financial ratios, production ratios, gross profit ratios, etc.) ðŸ“„ Audit Report and Assessment After the audit: â€¢ The taxpayer is given an opportunity to explain all issues. â€¢ An audit report is issued containing observations and findings. â€¢ The Commissioner may amend the assessment based on audit findings. â€¢ A taxpayer audited in one year can be audited again in subsequent years if reasonable grounds exist. ðŸ‘¥ Special Audit Panels The FBR may appoint special audit panels comprising: â€¢ Inland Revenue officers â€¢ Chartered Accountants or Cost & Management Accountants â€¢ Foreign experts or specialists, if confidentiality agreements are in place â€¢ International tax experts Key points: â€¢ Panels may conduct audits, including forensic audits. â€¢ Missing members do not invalidate the audit. â€¢ Failure to provide records may lead to best judgment assessment under Section 121. ðŸ’¡ Why This Matters for Taxpayers â€¢ Ensures accurate reporting and compliance. â€¢ Helps the FBR identify discrepancies, under-reported income, and tax evasion. â€¢ Encourages taxpayers to maintain complete and accurate records under Section 174. âœ… Takeaways â€¢ FBR has broad audit powers in 2026. â€¢ Compliance with record-keeping is essential. â€¢ Non-cooperation may result in best judgment assessments. â€¢ Special audit panels can include domestic and international experts. â€¢ Electronic audits and real-time data access are now common practice. Understanding these powers helps taxpayers stay compliant, avoid penalties, and respond appropriately to FBR audits in 2026. Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Taxpayers should consult the Federal Board of Revenue (FBR) or a qualified tax professional for guidance on individual circumstances.

Date: 2025-12-31

Details: Islamabad, December 31, 2025 â€” The Federal Board of Revenue (FBR) on Wednesday announced the demotion of a senior Inland Revenue Service (IRS) officer in BS-20 after disciplinary proceedings established charges of inefficiency and misconduct, following orders from the Prime Minister. According to the notification, disciplinary action was initiated against Muhammad Asim Khattak, a BS-20 IRS officer currently serving as Chief (Admin Pool) at FBR Headquarters, Islamabad, under the Civil Servants (Efficiency and Discipline) Rules, 2020. An inquiry was launched on January 27, 2025, with a formal charge sheet and statement of allegations citing inefficiency and misconduct. An inquiry officer, Karamatullah Khan Chaudhry (IRS/BS-21), submitted his findings on March 27, 2025, concluding that four out of five charges had been proven. The inquiry report recommended a major penalty, proposing the officerâ€™s reduction from Commissioner Inland Revenue (BS-20) to Additional Commissioner Inland Revenue (BS-19) for one year. Based on the inquiry findings, a show-cause notice was issued on April 29, 2025, seeking an explanation within 14 days as to why major penalties, including dismissal from service, should not be imposed. The officer submitted his reply on May 19, 2025. Subsequently, the Prime Minister appointed the Member (IR-Operations) as hearing officer, who provided the accused officer with an opportunity for personal hearing on August 27, 2025, in line with the applicable rules. After reviewing the complete case record, inquiry findings and recommendations of the hearing officer, the Prime Minister, as the competent authority, approved the imposition of a major penalty of reduction to BS-19 for one year under Rule 4(3)(b) of the Civil Servants (Efficiency and Discipline) Rules, 2020. The notification stated that the officer retains the right to appeal under the Civil Servants (Appeals) Rules, 1977 within 30 days of receiving the order. Additionally, the officerâ€™s performance allowance has been suspended for one year and will be subject to reassessment for restoration in accordance with the relevant guidelines.

Date: 2025-12-31

Details: Pakistanâ€™s tax landscape is rapidly evolving, and NADRA is no longer limited to issuing CNICs. Under the Income Tax Ordinance, 2001, NADRA has been empowered to share data, analyze wealth patterns, and even compute indicative tax liability, making it a powerful partner of the Federal Board of Revenue (FBR). This development has major implications for taxpayers, non-filers, and those outside the tax net. ðŸ” What Is Section 175B of the Income Tax Ordinance? Section 175B authorizes the National Database and Registration Authority (NADRA) to assist FBR in broadening the tax base and enforcing tax laws by sharing records and advanced data analysis. ðŸ“Š What Information Can NADRA Share with FBR? Under subsection (1), NADRA may share any records or information it holds with FBR, either on its own initiative or upon request. This includes: â€¢ Identity and demographic data â€¢ Assets and properties â€¢ Financial transactions and expenditures â€¢ Liabilities and declared wealth ðŸ§ NADRAâ€™s Expanded Role: Beyond Data Sharing Section 175B(2) allows NADRA to actively assist FBR by: âœ… Identifying Tax Gaps NADRA may identify persons (taxpayers or non-taxpayers) who have: â€¢ Undeclared or under-declared income â€¢ Assets or properties escaping assessment â€¢ Excessive refunds or relief â€¢ Misclassification of income ðŸ’° Valuation of Assets If asset values declared by a person differ from: â€¢ Values notified by FBR, or â€¢ District/market values NADRA can flag such discrepancies. ðŸ¤– AI-Based Tax Liability Computation One of the most significant changes is in Section 175B(4): ðŸ‘‰ NADRA can compute indicative income and tax liability using: â€¢ Artificial Intelligence â€¢ Statistical and mathematical models â€¢ Modern data analytics tools This applies to both filers and non-filers. ðŸ“© What Happens After NADRA Computes Tax? Step 1: Notification FBR will notify the person of the indicative tax liability computed by NADRA. Step 2: Payment Option The person may: â€¢ Accept and pay the liability â€¢ Avail installments â€¢ Receive discounts or relief from penalties and default surcharge (as prescribed) Step 3: Consequences of Non-Payment If the liability is not paid within the prescribed time: â€¢ FBR may initiate enforcement action â€¢ Proceedings will be based on NADRAâ€™s computed liability ðŸ§¾ Legal Status of Payment If the person pays the computed liability, it will be treated as: â€¢ An amended assessment under Section 120, 122, or 122(4) This means the tax matter becomes legally settled. âš Why This Matters for Tax Year 2026 â€¢ Non-filers are now easily traceable â€¢ Asset-based taxation is becoming data-driven â€¢ Digital footprints matter more than declarations â€¢ Voluntary compliance is strongly encouraged âœ… Key Takeaway Section 175B marks a paradigm shift in Pakistanâ€™s tax enforcement. NADRA is no longer a passive data holderâ€”it is now an active tax intelligence authority. Taxpayers should ensure their income, assets, and lifestyle align with their tax declarations to avoid automated tax exposure in tax year 2026. ðŸ“Œ Disclaimer: This article is for general information and educational purposes only and does not constitute legal, tax, or professional advice. Tax laws, interpretations, and enforcement practices may change or vary based on individual circumstances. Readers are advised to consult a qualified tax professional or refer to the Income Tax Ordinance, 2001 and official FBR notifications before making any tax-related decisions.

Date: 2025-12-24

Details: Islamabad, December 24, 2025 â€” The Federal Board of Revenue (FBR) has launched a nationwide campaign to verify the actual incomes of hospitals and doctors by scrutinising patientsâ€™ health bills, as part of its broader effort to curb tax evasion and improve transparency in income reporting. According to the tax authority, the initiative focuses on monitoring private medical clinics to assess their real patient turnover and evaluate the range of services being offered. Addressing concerns raised by sections of the medical community, FBR officials have strongly rejected allegations of harassment during the exercise. Talking to the Associated Press of Pakistan (APP), Additional Commissioner FBR Saleem ur Rehman Khan said dedicated teams have been deployed to observe clinic operations in a professional and lawful manner. He explained that the monitoring aims to verify medical services such as pathology, radiology, and other diagnostic facilities to determine whether declared incomes accurately reflect actual business activity. Rehman emphasised that neither doctors nor patients are being harassed during the process. â€œDoctors are highly respected members of society, and no FBR officer or official is authorised to behave disrespectfully towards them or patients,â€ he said, dismissing claims made by the Pakistan Medical Association (PMA). The senior tax official stated that the campaign is part of the governmentâ€™s responsibility to enforce tax laws and ensure that all sectors contribute their fair share to the national exchequer. He added that the FBR is committed to establishing the writ of the state and promoting transparency across the economy. â€œWe will continue our monitoring activities and will not be blackmailed into abandoning lawful enforcement,â€ Rehman said, reaffirming the departmentâ€™s stance. Commenting on a press conference held earlier by the PMA at the Multan Press Club, Rehman said the association should have approached FBR authorities directly to discuss their concerns. He reiterated that the department remains open to dialogue with medical bodies but will continue implementing tax regulations strictly in accordance with the law. The move signals a tougher approach by the FBR to document the healthcare sector and reduce tax leakages, amid ongoing efforts to broaden Pakistanâ€™s tax base.

Date: 2025-12-24

Details: Are you a salaried person and often wonder why income tax is deducted from your salary before it reaches your bank account? This system is known as tax deduction at source, and it is governed by Section 149 of the Income Tax Ordinance, 2001. Below is an interactive, easy-to-understand guide explaining why the Federal Board of Revenue (FBR) collects salary tax at source and how it works. ðŸ’¼ What Is Salary Tax Deduction at Source? Salary tax deduction at source means that your employer deducts income tax from your monthly salary and deposits it directly with the FBR on your behalf. ðŸ“Œ This ensures regular tax collection, reduces evasion, and simplifies compliance for salaried individuals. ðŸ“œ Legal Basis: Section 149 Explained Under Section 149(1): â€¢ Every employer paying salary must deduct tax at the time of payment â€¢ The deduction is made at the employeeâ€™s average tax rate â€¢ Rates are applied as per Division I, Part I of the First Schedule The calculation is based on: âœ” Estimated annual salary income âœ” Applicable tax slabs âœ” Tax under Section 4AB (super tax), if applicable âœ” Adjustments for: â€¢ Tax already withheld under other heads â€¢ Eligible tax credits under Sections 61 and 63 ðŸ§® How Is the Average Tax Rate Calculated? The law uses a simple formula: Average Tax Rate = A Ã· B Where: â€¢ A = Total tax payable on estimated annual salary â€¢ B = Estimated annual salary + tax under Section 4AB This average rate is applied to each salary payment to ensure even tax deduction throughout the year. ðŸ‘´ Special Rule for Pension Income Under Section 149(1A): â€¢ Pension paid to a former employee below 70 years â€¢ If annual pension income exceeds Rs10 million â€¢ Tax is deducted only on the amount exceeding Rs10 million Adjustments for tax credits and prior deductions also apply here. ðŸ§‘ðŸ’¼ Directorsâ€™ and Board Meeting Fees Under Section 149(3): â€¢ Payments such as: o Directorship fees o Board meeting attendance fees â€¢ Are subject to 20% tax deduction on gross amount ðŸ“Œ This tax is adjustable, meaning it can be adjusted against final tax liability. ðŸŽ¯ Why FBR Uses This System âœ” Ensures timely and consistent revenue collection âœ” Minimizes non-compliance and under-reporting âœ” Reduces the tax filing burden on salaried individuals âœ” Helps employees avoid large lump-sum tax payments at year-end ðŸ” What Salaried Persons Should Do â€¢ Review monthly salary slips for correct tax deduction â€¢ Share documentary proof of tax credits and other deductions with employer â€¢ File annual income tax return to reconcile withheld tax â€¢ Claim refunds, if excess tax has been deducted ðŸ“Œ Final Takeaway Salary tax deduction at source is not an extra burdenâ€”it is a structured and legally mandated mechanism to ensure fair and smooth tax collection. Understanding Section 149 helps salaried individuals track deductions and manage their annual tax position effectively. Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Salaried individuals should consult a qualified tax professional for advice specific to their circumstances.

Date: 2025-12-24

Details: Importers bringing goods into Pakistan must understand Section 148 of the Income Tax Ordinance, 2001, which governs advance income tax at the import stage. This tax is collected by Customs at the time of clearance and can significantly affect cash flow and compliance for importers. Below is an interactive, SEO-optimized explainer to help importers stay compliant and avoid surprises. ðŸ“¦ What Is Section 148? Section 148 requires the Collector of Customs to collect advance income tax from every importer on the value of imported goods, at rates specified in Part II of the First Schedule, for goods listed in Parts Iâ€“III of the Twelfth Schedule. ðŸ“Œ The Federal Board of Revenue (FBR) can amend the Twelfth Schedule through official notifications. ðŸ§¾ When Is Advance Tax Collected? Under Section 148(5): â€¢ Advance tax is collected at the same time as customs duty â€¢ If goods are exempt from customs duty, tax is collected when duty would have been payable Customs laws under the Customs Act, 1969 apply to this collection process. ðŸ Raw Materials vs Finished Goods â€¢ Goods listed in Part III of the Twelfth Schedule may be used as raw materials or finished goods â€¢ FBR may allow such goods to be treated as Part II goods if imported as raw material for own use, subject to prescribed conditions This distinction can affect the tax rate and treatment. ðŸ’» Digital Presence Exception Under the latest amendment: â€¢ No advance tax under Section 148 is collected if the recipient is liable under the Digital Presence Proceeds Tax Act, 2025 â€¢ This applies where tax has already been collected by a payment intermediary under Section 153 ðŸ“‰ Minimum Tax vs Adjustable Tax Minimum Tax Applies: â€¢ Generally, tax collected under Section 148 is treated as minimum tax â€¢ It is not adjustable against final tax liability in most cases Exceptions: â€¢ Imports made by an industrial undertaking for its own use â€¢ Certain goods are always subject to minimum tax, including: o Edible oil o Packaging material o Paper and paperboard o Plastics ðŸ“Œ FBR may revise this list through notification. ðŸ’° How Is â€œValue of Goodsâ€ Calculated? Section 148 defines value as: 1. Retail-price goods (Third Schedule, Sales Tax Act) â†’ Retail price + sales tax 2. Other goods â†’ Customs value + customs duty + FED + sales tax 3. Minimum value (if notified by FBR) â†’ Minimum notified value + applicable duties and taxes âš Key Compliance Tips for Importers âœ” Check whether your goods fall under the Twelfth Schedule âœ” Confirm whether tax is minimum or adjustable âœ” Keep documentation of customs value and tax paid âœ” Monitor FBR notifications for rate and valuation changes âœ” Factor advance tax into pricing and cash-flow planning ðŸ”Ž Why Section 148 Matters Failure to account for advance tax at import stage can: â€¢ Increase cost of imports â€¢ Cause customs clearance delays â€¢ Lead to tax disputes and recovery proceedings Understanding Section 148 helps importers plan better and remain fully compliant with FBR requirements. Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Importers should consult a qualified tax or customs professional for guidance specific to their transactions.

Date: 2025-12-23

Details: If you are a provincial sales tax (PST) registered person, itâ€™s essential to know your obligations under Section 147A of the Income Tax Ordinance, 2001. For tax year 2026, the Federal Board of Revenue (FBR) has made it mandatory for PST-registered businesses to pay advance income tax, ensuring proper compliance and preventing penalties. Hereâ€™s an interactive guide to help businesses understand the rules. ðŸ’° Who Is Liable to Pay Advance Tax? Under Section 147A(1): â€¢ Every provincial sales tax registered person must pay adjustable advance tax â€¢ The tax is 3% of the turnover declared to the provincial revenue authority ðŸ“Œ This applies to all PST-registered businesses except those already on the Active Taxpayers List (ATL) on June 30 of the previous tax year. ðŸ—“ When to Pay Advance Tax Under Section 147A(2): â€¢ Advance tax must be paid monthly â€¢ Payment coincides with the filing of your provincial sales tax return âœ… Timely payment ensures compliance and avoids penalties for late payment. ðŸ”„ How Advance Tax Is Adjusted â€¢ Section 147A(3): Advance tax paid can be adjusted against tax payable under Section 147 â€¢ Section 147A(5): Tax credit is allowed for the amount of advance tax paid when calculating total taxable income â€¢ Section 147A(6): The credit is applied according to Section 4(3) rules ðŸ“Œ Any unused tax credit can be refunded under Section 170 (Section 147A(7)). âš– Legal Effect Under Section 147A(4): â€¢ Advance tax due under this section is treated as tax due under an assessment order â€¢ Non-compliance may trigger FBR recovery powers, including notices and penalties ðŸ§ Key Takeaways for PST-Registered Persons â€¢ Mandatory 3% advance tax on turnover â€¢ Pay monthly with provincial sales tax return â€¢ Can adjust against final tax liability â€¢ Exceptions apply for businesses on the Active Taxpayers List â€¢ Keep records of turnover, tax paid, and credit applied for audit purposes âœ… Best Practices âœ” Calculate advance tax accurately based on turnover âœ” Pay tax on time with sales tax filings âœ” Track advance tax credits for proper adjustment âœ” Consult a tax professional if your business has cross-provincial operations Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Tax laws and FBR rules may change. Consult a qualified tax professional for guidance specific to your business.

Date: 2025-12-22

Details: If you are living in Pakistan but have been assessed to tax in Azad Jammu & Kashmir (AJK) or Gilgit-Baltistan (GB), it is important to know that the Federal Board of Revenue (FBR) can initiate tax recovery proceedings against you. This ensures tax compliance across regions, even when local authorities cannot recover dues directly. For tax year 2026, FBRâ€™s powers are outlined under Section 146 of the Income Tax Ordinance, 2001. Hereâ€™s an interactive guide to help you understand the process. ðŸ› Authority Behind Recovery Under Section 146(1): â€¢ If a taxpayer assessed in AJK or GB fails to pay tax, and the local tax authorities cannot recover it because: 1. The taxpayer resides in Pakistan, or 2. The taxpayer has no property in AJK or GB, Then: â€¢ The Deputy Commissioner of AJK or GB can issue a certificate of recovery. â€¢ On receiving this certificate, the FBR Commissioner in Pakistan can recover the tax according to the provisions of the Income Tax Ordinance. ðŸ“ What Must the Recovery Certificate Include? Under Section 146(2), the certificate must clearly specify: 1. Place of residence of the taxpayer in Pakistan 2. Description and location of movable or immovable property in Pakistan 3. Amount of tax payable by the taxpayer ðŸ“Œ The certificate allows FBR to target assets and enforce payment within Pakistan. âš– How FBR Recovery Works in Practice Once a certificate is received: â€¢ FBR can use its standard tax recovery powers, including: o Attachment and sale of movable and immovable property o Appointment of a receiver o Recovery from bank accounts or other assets â€¢ Recovery proceeds follow the same procedures as for regular tax assessments ðŸ§ Why This Matters Even if you were assessed in AJK or GB: â€¢ Living in Pakistan does not shield you from tax recovery â€¢ FBR ensures inter-regional enforcement of tax laws â€¢ Ignoring recovery notices can result in asset attachment, legal action, or personal liability âœ… How to Stay Compliant âœ” Pay taxes assessed in AJK or GB promptly âœ” Respond to FBR recovery notices immediately âœ” Keep clear records of all assets and income âœ” Consult a tax professional if you are unsure about compliance obligations ðŸ“Œ Final Takeaway Section 146 empowers FBR to recover tax from persons residing in Pakistan but assessed in AJK or Gilgit-Baltistan. Compliance is essential to avoid enforcement actions and protect assets in Pakistan. Pro tip: Always monitor tax obligations in all jurisdictions where you have residency or property to prevent inter-regional recovery actions. Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Tax laws and recovery procedures may change. Consult a qualified tax professional for personalized guidance.

Date: 2025-12-22

Details: If you are planning to leave Pakistan permanently, it is crucial to understand your tax obligations before departure. Failing to comply with tax laws can lead to asset freezes, recovery proceedings, or other legal consequences. For tax year 2026, the Federal Board of Revenue (FBR) emphasizes compliance under Section 145 of the Income Tax Ordinance, 2001. Hereâ€™s an interactive guide to help you navigate your tax responsibilities before leaving Pakistan. âœˆ When Must You Notify FBR? Under Section 145(1): â€¢ Any person likely to leave Pakistan permanently must notify the Commissioner Inland Revenue. â€¢ Notice must be submitted at least 15 days before the expected departure date. â€¢ This â€œprobable date of departureâ€ is critical for initiating tax assessment. ðŸ“Œ Early notification allows the FBR to complete assessments before you leave. ðŸ§¾ Filing Tax Return Before Departure Under Section 145(2): â€¢ Your notice must be accompanied by a return of taxable income covering: 1. The period from the end of your last assessed tax year to the departure date 2. If no prior assessment exists, a return covering all tax years ending on your departure date âœ… This period is treated as a distinct tax year for calculation purposes. âš– FBR May Serve Notice Even Without Your Declaration Under Section 145(3): â€¢ If FBR believes you might leave Pakistan permanently and have not submitted a notice, â€¢ The Commissioner can issue a notice to furnish tax returns within a specified time. âš Ignoring such a notice can trigger recovery actions. ðŸ’° Tax Rates and Provisions Apply Under Section 145(4): â€¢ Your taxable income will be taxed at applicable rates for the relevant year â€¢ All provisions of the Income Tax Ordinance apply as usual â€¢ No exemptions are provided simply because you are leaving the country â„ Asset Freeze for Offshore Risk Under Section 145(5): â€¢ If the Commissioner suspects offshore tax evasion or imminent disposal of assets, â€¢ Any domestic assets you own may be frozen for up to 120 days or until the finalization of recovery proceedings. â€¢ This includes assets beneficially owned, even if held indirectly. ðŸ’¡ Early compliance is the only way to prevent such freezes. ðŸ§ Why This Matters Leaving Pakistan without addressing tax obligations can: â€¢ Trigger asset freezes or seizure â€¢ Lead to recovery actions even while abroad â€¢ Affect your ability to travel or repatriate funds âœ… Quick Checklist Before Leaving Pakistan âœ” Submit a notice to the Commissioner at least 15 days before departure âœ” File all pending tax returns up to the date of departure âœ” Pay outstanding tax or arrange for proper clearance âœ” Ensure there are no ongoing FBR investigations or appeals âœ” Seek professional tax advice for offshore assets ðŸ“Œ Final Takeaway For tax year 2026, Section 145 makes it clear: leaving Pakistan permanently does not absolve you from tax liability. Timely notice, filing of returns, and compliance with FBR rules are essential to avoid legal issues and protect your assets. Pro tip: Always maintain records of all tax payments and notices before departure to prevent complications with FBR. Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Tax laws, offshore reporting, and FBR procedures may change. Consult a qualified tax professional for advice tailored to your situation.

Date: 2025-12-22

Details: Islamabad, December 22, 2025 â€” Chairman of the Federal Board of Revenue (FBR) Rashid Mahmood Langrial on Monday held a meeting with Bangladesh High Commissioner to Pakistan Md. Iqbal Hussain Khan to discuss ways to strengthen bilateral trade, enhance tax cooperation, and deepen overall economic relations between Pakistan and Bangladesh. According to an official statement, both sides reaffirmed the long-standing brotherly ties between the two countries and expressed commitment to expanding mutual economic collaboration. The discussions focused on improving coordination in taxation matters and promoting greater trade facilitation through policy alignment and institutional cooperation. During the meeting, it was agreed that technical teams from Pakistan and Bangladesh dealing with international taxation would engage in detailed consultations on the existing Double Taxation Treaty (DTT). These discussions will aim to align the treaty with evolving global tax standards and international best practices to ensure transparency and prevent fiscal evasion. The meeting coincided with a five-day official visit of a high-level delegation from the National Board of Revenue (NBR) of the Peopleâ€™s Republic of Bangladesh, scheduled from December 22 to 26. The visit aims to initiate negotiations on a protocol to amend the existing Convention between Pakistan and Bangladesh for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income. The NBR delegation is led by Muhammad Lutful Azeem, Member (International Taxes), and includes senior officials from tax administration and tax policy wings. On the first day, the delegation was received by Iqbal Khan, Member (Administration), and Aftab Alam, Director General (International Taxes), FBR. Both sides exchanged views on international taxation frameworks and shared experiences, agreeing to further strengthen institutional collaboration through regular engagements and technical-level interactions.

Date: 2025-12-21

Details: ISLAMABAD: The Federal Constitutional Court (FCC) has set aside the order dated 5 May 2025 passed by the Constitutional Bench (CB) of the Sindh High Court (SHC), recalling the order of the SHCâ€™s regular bench. A two-judge bench of the FCC, comprising Justice Aamer Farooq and Justice Rozi Khan Barrech, heard a constitutional petition challenging the Sindh High Court Constitutional Benchâ€™s order. The FCC allowed the petition and declared the impugned order to be without lawful authority. The petitioner, Khalid Mehmood, had challenged the order passed on 05 May 2025 by the Constitutional Bench of the Sindh High Court constituted under Article 202A of the Constitution. Through that order, the Constitutional Bench had recalled an ad-interim stay earlier granted on 20 December 2023 by a Regular Bench of the Sindh High Court. The impugned order was initially brought before the Supreme Court of Pakistan through a petition for leave to appeal under Article 185(3) of the Constitution, 1973. However, following the enactment of the 27th Constitutional Amendment Act, 2025, the matter stood transferred to the Federal Constitutional Court under Article 175F(1)(c). Under the 2018 Amnesty Scheme, the petitioner submitted a declaration, paid the requisite amount, and disclosed ownership of a foreign company, Red Castle. Subsequently, the petitioner was issued a notice under Section 109-A of the Income Tax Ordinance, 2001, a provision introduced through the Finance Act, 2018. Aggrieved, the petitioner filed Constitutional Petition No. D-6169 of 2023 before the Sindh High Court, challenging both the vires of Section 109-A and the legality of the notice on independent grounds.On 20 December 2023, a Regular Bench of the Sindh High Court passed an ad-interim order restraining the respondents from taking any final adverse action pursuant to the impugned notice. The case was later fixed before the Constitutional Bench on 05 May 2025, which recalled the earlier ad-interim order. Before the FCC, the key questions were whether the order passed by the Regular Bench of the Sindh High Court was without jurisdiction under the erstwhile Article 202A of the Constitution, and whether an ad-interim order of the High Court could be interfered with by the Federal Constitutional Court. The FCC held that although the scope of Article 202A had been expanded after the 27th Constitutional Amendment â€” granting Constitutional Benches exclusive jurisdiction over writ matters under Article 199 â€” the impugned order had been passed prior to the amendment. Therefore, its legality had to be examined under the former Article 202A, under which only Regular Benches were competent to entertain such matters. The Court noted that the petitioner had challenged Section 109-A of the Income Tax Ordinance as being contrary to Entries 31 and 47 of the Federal Legislative List, in addition to challenging the notice issued thereunder on independent legal grounds. This, in substance, amounted to seeking relief under Article 199(1)(a)(ii) of the Constitution. The ruling observed that if the High Court were to allow the petition, Section 109-A would be declared without lawful authority and of no legal effect, rendering the notice issued thereunder ineffective as a natural consequence. Even if the provision were upheld, the legality of the notice itself could still be independently examined by a Regular Bench. In these circumstances, the FCC concluded that the Constitutional Bench of the Sindh High Court lacked jurisdiction from the outset to hear the matter and consequently, the interim order passed by it was without jurisdiction and liable to be set aside. Copyright Business Recorder, 2025

Date: 2025-12-21

Details: For tax year 2026, the Federal Board of Revenue (FBR) has clarified who qualifies as a liquidator and what legal responsibilities apply when handling assets of a taxpayer. These rules are laid out in Section 141 of the Income Tax Ordinance, 2001, and they impose strict compliance requirements to safeguard government tax revenue. Hereâ€™s an interactive, step-by-step guide to help liquidators and stakeholders understand their duties and risks. âœ… Who Is Considered a Liquidator Under FBR Law? Under Section 141(1), the following persons are treated as liquidators: âœ” A liquidator of a company âœ” A receiver appointed by a court or outside court âœ” A trustee for a bankrupt person âœ” A mortgagee in possession of assets ðŸ“Œ These rules apply once the person takes possession of assets in Pakistan. Mandatory Notice to FBR (Within 14 Days) A liquidator must: â€¢ Notify the Commissioner Inland Revenue in writing â€¢ Within 14 days of: o Appointment, or o Taking possession of an asset in Pakistan (whichever occurs first) ðŸš¨ Failure to notify on time can expose the liquidator to personal liability. ðŸ“¬ FBRâ€™s Response Timeline Under Section 141(2): â€¢ The Commissioner has three months to notify the liquidator â€¢ The notice will specify the amount considered sufficient to cover current or future tax liabilities of the taxpayer whose assets are held ðŸ›‘ Restriction on Disposal of Assets Under Section 141(3): â€¢ A liquidator cannot sell, transfer, or part with assets â€¢ Until FBR issues its tax notification â€¢ Unless prior permission is obtained from the Commissioner ðŸ’° Setting Aside Tax Amounts From Sale Proceeds Once notified by FBR, the liquidator must: ðŸ”¹ Set Aside Tax Funds â€¢ Reserve the amount specified by the Commissioner â€¢ Or a lower amount later agreed upon ðŸ”¹ Accept Tax Liability â€¢ The liquidator is liable to the extent of the reserved amount â€¢ This liability relates to the tax of the original asset owner ðŸ”¹ Pay Priority Debts â€¢ Debts that have legal priority over tax may still be paid first (Section 141(4)) âš Personal Liability Risk for Liquidators Under Section 141(5): â€¢ If a liquidator fails to set aside the required amount â€¢ Tthey become personally liable for that tax â€¢ Liability is limited to the amount that should have been reserved ðŸ“‰ When Sale Proceeds Are Insufficient Under Section 141(6): â€¢ If asset sale proceeds are less than the tax amount notified â€¢ The liquidatorâ€™s obligation is limited to actual sale proceeds ðŸ“œ Overriding Legal Effect Under Section 141(7): â€¢ These provisions apply despite anything in any other law â€¢ Section 141 overrides conflicting legal provisions ðŸ§¾ Treated as Assessed Tax Under Section 141(8): â€¢ Any amount due under this section â€¢ Is treated as tax due under an assessment order â€¢ Recovery rules apply accordingly ðŸ§ Why Liquidators Must Be Extra Careful in Tax Year 2026 With stricter enforcement expected: â€¢ Liquidators face direct personal exposure â€¢ Non-compliance can lead to tax recovery proceedings â€¢ Early communication with FBR is critical âœ… Best Practices for Liquidators âœ” Notify FBR immediately upon appointment âœ” Do not dispose of assets without clearance âœ” Maintain detailed sale and payment records âœ” Reserve tax amounts before distributing proceeds âœ” Consult tax professionals early ðŸ“Œ Final Takeaway For tax year 2026, Section 141 makes it clear: liquidators act as gatekeepers of tax recovery. Failure to follow FBR procedures can result in personal liabilityâ€”even when acting in a professional capacity. Pro tip: Timely notice and strict compliance are the safest ways to avoid legal and financial risk. Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Tax laws and enforcement practices may change. Liquidators should seek professional advice for case-specific compliance.

Date: 2025-12-21

Details: If you are holding money on behalf of a tax defaulter, tax year 2026 could bring serious consequences for you as well. Under Pakistanâ€™s tax laws, the Federal Board of Revenue (FBR) has the legal authority to recover unpaid taxes directly from third parties who owe or hold money for defaulting taxpayers. This power is clearly provided under Section 140 of the Income Tax Ordinance, 2001. Hereâ€™s an interactive, practical guide to help you understand how this recovery mechanism worksâ€”and how to protect yourself. âš Who Can Be Targeted Under Section 140? FBR may issue a recovery notice to any person who: âœ” Owes money to a tax defaulter âœ” Holds money for or on account of a tax defaulter âœ” Holds money payable to the defaulter through another person âœ” Has authority to pay money to the defaulter ðŸ“Œ Important: The law defines â€œpersonâ€ broadly. It includes individuals, companies, courts, tribunals, and authorities. ðŸ“¬ How Does the Recovery Process Start? Under Section 140(1): â€¢ The Commissioner may issue a written notice â€¢ The notice will specify: O The amount to be paid O The deadline for payment ðŸ‘‰ You are legally bound to comply once such a notice is served. ðŸ›‘ When Can FBR NOT Issue This Notice? FBR cannot issue a recovery notice if: â€¢ The taxpayer has filed an appeal under Section 127 â€¢ The appeal is pending before Commissioner (Appeals) â€¢ The taxpayer has paid at least 10% of the disputed tax âš– This provides temporary protection during the appeal stage. ðŸ’° How Much Can FBR Recover From You? Under Section 140(2): â€¢ If the money you hold is less than or equal to the tax due, recovery is limited to that amount â€¢ If the money you hold is more than the tax due, recovery is limited to the tax amount only ðŸ” Salary and Periodic Payments Under Section 140(3): â€¢ If you make regular payments (e.g., salary, commissions) â€¢ FBR may direct you to deduct a specified amount from each payment â€¢ This continues until the entire tax liability is recovered ðŸ“… Payment Timing Protection Under Section 140(4): â€¢ FBR cannot demand payment before the money becomes payable â€¢ You are only required to pay once funds are due to the taxpayer ðŸ§¾ Treated Like Tax Deduction Under Section 140(5): â€¢ Recovered amounts are treated similarly to withholding tax â€¢ Relevant deduction rules apply âœ… Legal Protection for Third Parties If you comply with the notice: â€¢ You are considered to have paid on behalf of the taxpayer â€¢ The Commissionerâ€™s receipt is a valid discharge of your liability â€¢ The taxpayer cannot legally claim the amount again ðŸ“„ This protection is provided under Section 140(6). ðŸš¨ Immediate Recovery in Mega Tax Cases Special Rule â€“ Section 140(6A) Immediate recovery applies if: â€¢ The case is decided in favor of FBR at three appellate forums, including the High Court â€¢ Recovery is limited to the lowest confirmed tax demand â€¢ Tax payable exceeds Rs. 200 million In such cases, recovery can proceed without waiting for time limits. ðŸ§ Why This Matters in Tax Year 2026 With increased enforcement expected in tax year 2026, businesses, employers, banks, and even individuals may face recovery actions for holding defaultersâ€™ moneyâ€”even unintentionally. âœ… How to Protect Yourself âœ” Keep clear records of payments and liabilities âœ” Respond immediately to any FBR notice âœ” Verify whether an appeal is pending âœ” Seek professional tax or legal advice ðŸ“Œ Final Takeaway Section 140 allows FBR to recover tax not only from defaulters but also from anyone holding their money. If you receive a recovery notice in tax year 2026, compliance is not optionalâ€”and timely action is essential. Pro tip: Never ignore an FBR recovery notice. Acting early can save you from legal exposure and financial loss. Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Tax laws and enforcement practices may change. Readers should consult qualified professionals for guidance specific to their situation.

Date: 2025-12-21

Details: Karachi, December 21, 2025 â€” Karachi Customs Enforcement has foiled a large-scale fuel smuggling attempt, confiscating 64,578 litres of smuggled Iranian diesel and petrol during an intelligence-led operation conducted at the Northern Bypass area of Karachi. The seized petroleum products are estimated to be worth Rs16.5 million, while a Mazda vehicle used in the illegal activity, valued at approximately Rs20 million, was also impounded. The total value of the seizure stands at Rs36.5 million. The operation was carried out on Saturday evening by the Anti-Smuggling Organization (ASO) under the directives of Chief Collector Customs Enforcement, Islamabad, Basit Maqsood Abbasi, and Collector of Customs Enforcement, Karachi, Moin Wani. The enforcement team was led by Assistant Collector Bisma Noor Jatoi, who supervised the coordinated crackdown. According to officials, Customs teams conducted raids at five illegal dumping points that were operating under the cover of petrol pumps. During the operation, authorities intercepted a Mazda vehicle fitted with a specially fabricated concealed box, designed to transport large quantities of petroleum products. The vehicle was caught while unloading smuggled Iranian diesel. All recovered fuel was immediately shifted to the Customs warehouse, where it was measured through the dip method to determine the exact quantity. Further legal proceedings are underway, and investigations have been launched to identify individuals and networks involved in the smuggling racket. The Federal Board of Revenue (FBR) reiterated its strong commitment to combating smuggling, curbing illicit trade, and safeguarding the national economy. Officials emphasized that strict enforcement actions will continue to ensure fair competition in the fuel market and to prevent revenue losses caused by illegal petroleum smuggling across the country.

Date: 2025-12-21

Details: Tax default is no longer a minor compliance issue. Under Pakistanâ€™s tax laws, the Federal Board of Revenue (FBR) holds extensive powers to recover unpaid taxes, including the sale of property and arrest of taxpayers. These powers are clearly laid out in Section 138 of the Income Tax Ordinance, 2001, and every taxpayer should understand how they work to avoid severe consequences. Hereâ€™s an interactive, step-by-step guide explaining FBRâ€™s recovery powers and what tax defaulters need to know. ðŸš¨ What Triggers FBR Recovery Action? Recovery proceedings begin when: â€¢ Tax has been legally determined and is due â€¢ The taxpayer fails to pay after receiving a formal notice ðŸ“¬ Recovery Notice Under Section 138(1): â€¢ The Commissioner issues a notice of demand â€¢ The taxpayer is required to pay the specified amount within the given time ðŸ‘‰ Ignoring this notice can lead directly to coercive recovery measures. âš– Powerful Recovery Methods Available to FBR If payment is not made within the specified or extended time, Section 138(2) authorizes FBR to recover tax through one or more of the following methods: ðŸ 1ï¸âƒ£ Attachment and Sale of Property â€¢ Movable assets (vehicles, machinery, goods) â€¢ Immovable assets (houses, plots, commercial properties) ðŸ‘‰ Properties can be attached and auctioned to recover outstanding tax dues. ðŸ‘¨ðŸ’¼ 2ï¸âƒ£ Appointment of a Receiver â€¢ A receiver may be appointed to manage your property â€¢ Income generated can be used to settle tax liabilities ðŸš” 3ï¸âƒ£ Arrest and Detention â€¢ The taxpayer may be arrested â€¢ Detention can extend up to six months âš This is one of the most serious enforcement actions and is used in persistent default cases. ðŸ”„ 4ï¸âƒ£ Other Recovery Methods â€¢ FBR may also apply recovery measures provided under the Sales Tax Act, 1990 â€¢ This includes attachment of bank accounts and other assets ðŸ› Powers Equivalent to a Civil Court Under Section 138(3): â€¢ The Commissioner has the same powers as a Civil Court â€¢ This allows enforcement similar to recovery under a court decree âš Immediate Recovery in High-Value Cases ðŸ’° Special Provision: Section 138(3A) Tax becomes immediately recoverable, regardless of time limits, if: â€¢ The case is decided in favor of FBR at three appellate forums, including the High Court â€¢ Recovery is limited to the lowest confirmed demand â€¢ The tax payable exceeds Rs. 200 million ðŸ‘‰ In such cases, FBR can proceed with recovery without waiting for further legal timelines. ðŸ“œ Rules and Procedures Under Section 138(4): â€¢ FBR may frame detailed rules for recovery procedures â€¢ These rules regulate attachment, auction, arrest, and other enforcement steps ðŸ§ Why Taxpayers Must Take This Seriously Failure to pay assessed tax can result in: â€¢ Loss of property â€¢ Arrest and imprisonment â€¢ Long-term financial and legal consequences âœ… How to Protect Yourself âœ” Respond promptly to FBR notices âœ” Pay dues or apply for instalments or stay where applicable âœ” File appeals within time âœ” Seek professional tax advice early ðŸ“Œ Final Takeaway Section 138 gives FBR strong and enforceable powers to recover unpaid taxes, including property auctions and arrest of defaulters. Compliance, timely payments, and proactive communication with tax authorities are the only effective safeguards against harsh recovery actions. Pro tip: Never ignore a recovery notice. Early action can prevent irreversible enforcement steps. Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Tax laws and recovery procedures may change. Taxpayers should consult qualified professionals for guidance specific to their case.

Date: 2025-12-21

Details: Meeting income tax payment deadlines is critical for taxpayers in Pakistan. Missing a due date can lead to default surcharge, penalties, and enforcement action by the Federal Board of Revenue (FBR). To help taxpayers stay compliant, Section 137 of the Income Tax Ordinance, 2001 clearly explains when and how taxes must be paid for tax year 2026. Hereâ€™s an interactive, easy-to-follow breakdown of the key rules every taxpayer should know. âœ… When Is Income Tax Due for Tax Year 2026? ðŸ“… Tax Payable With Return of Income Under Section 137(1): â€¢ Tax payable on taxable income, including minimum tax (Section 113) or alternative corporate tax (Section 113A), â€¢ Is due on the same date as filing your return of income for tax year 2026. ðŸ‘‰ No separate notice is requiredâ€”your tax must be paid by the return filing deadline. ðŸ“¬ Tax Payable After an Assessment Order If the FBR issues: â€¢ An assessment order â€¢ An amended assessment order â€¢ Or any other order determining tax payable Then, under Section 137(2): â€¢ A notice of demand will be served â€¢ The tax must be paid within 30 days from the date the notice is served Advance Tax Exception (Section 147) For taxpayers paying advance tax: â€¢ Due dates follow Section 147(5), (5A), or (5B) â€¢ These dates override the general 30-day rule ðŸ“Œ This applies mainly to quarterly advance tax payments. ðŸ” Can You Get More Time to Pay? Yes. Under Section 137(4): â€¢ A taxpayer may apply in writing â€¢ The Commissioner may: o Grant an extension of time, or o Allow payment in instalments (equal or varying amounts) âš Approval depends on the taxpayer showing good cause. ðŸš¨ What Happens If You Miss an Instalment? Under Section 137(5): â€¢ If you default on any instalment â€¢ The entire remaining tax balance becomes immediately payable This can trigger recovery proceedings. ðŸ’¸ Does Instalment Relief Stop Default Surcharge? No. According to Section 137(6): â€¢ Even if instalments or extension are granted â€¢ Default surcharge under Section 205 still applies â€¢ Surcharge is calculated from the original due date ðŸ§ Why These Deadlines Matter Knowing and meeting tax payment deadlines helps you: â€¢ Avoid default surcharge and penalties â€¢ Prevent recovery actions by FBR â€¢ Maintain a clean tax profile â€¢ Qualify for refunds and appeals âœ… Quick Checklist for Tax Year 2026 âœ” Pay tax by the return filing due date âœ” Pay demand tax within 30 days of notice âœ” Follow Section 147 dates for advance tax âœ” Apply early if instalments are needed âœ” Never miss an instalment payment ðŸ“Œ Final Takeaway For tax year 2026, tax payment deadlines are strictly enforced. Whether you are paying tax with your return or after an assessment order, understanding Section 137 can help you stay compliant and avoid unnecessary financial costs. Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Tax laws, deadlines, and FBR procedures may change. Readers should consult a qualified tax professional for advice tailored to their circumstances.

Date: 2025-12-18

Details: The Federal Board of Revenue (FBR) has significant authority to ensure compliance with tax filing obligations in Pakistan. With tax year 2025 filing mostly concluded, except for corporate returns due on December 31, 2025, it is important for taxpayers to understand what actions the FBR can take if returns are not filed on time. This guide explains the powers granted under Section 114B of the Income Tax Ordinance, 2001 and how taxpayers can respond to avoid penalties or restrictions. What FBR Can Do Under Section 114B Section 114B empowers the FBR to issue Income Tax General Orders against individuals who are not on the Active Taxpayersâ€™ List (ATL) but are liable to file returns. These orders may include one or more of the following actions: 1. Disabling Mobile Phones or SIMs 2. Discontinuation of Electricity Connection 3. Discontinuation of Gas Connection 4. Restriction on Foreign Travel âš Exemptions apply to: â€¢ NICOP holders â€¢ Minors and students â€¢ Persons traveling for Hajj or Umrah â€¢ Other categories notified by the FBR Conditions Before FBR Can Take Action The FBR cannot immediately enforce these measures. Certain conditions must be met first: 1. A notice under Section 114(4) must be issued. 2. The compliance deadline of the notice must pass. 3. The return must remain unfiled after the deadline. âœ… Interactive Tip: Keep track of any FBR notices and deadlines in a calendar or accounting software to avoid unintended penalties. How to Restore Services If your mobile phone, gas, or electricity has been disabled due to non-filing, the FBR allows restoration if: â€¢ You file the pending tax return, or â€¢ It is confirmed that you were not liable to file a return. ðŸ’¡ Pro Tip: Always retain proof of filing and correspondence with FBR to expedite restoration of services. Additional Notes â€¢ Enforcement under Section 114B does not prevent other actions under the Income Tax Ordinance. â€¢ Corporate taxpayers should note that December 31, 2025, is the final filing date for 2025 corporate returns. ðŸ“Š Quick Checklist for Taxpayers: â€¢ âœ… Check ATL status online â€¢ âœ… File pending returns immediately â€¢ âœ… Respond to FBR notices promptly â€¢ âœ… Maintain proof of filing and payment Why Compliance Matters Failure to comply can result in service disruptions, travel restrictions, and legal complications. Early compliance ensures: â€¢ Avoidance of unnecessary penalties â€¢ Smooth operation of daily utilities â€¢ Freedom to travel internationally â€¢ Peace of mind and clean tax record ðŸ“Œ Key Takeaway: Filing your tax return on time is the simplest way to avoid enforcement actions under Section 114B. FAQ Q1: Who is exempt from FBR enforcement actions? â€¢ Minors, students, NICOP holders, and persons traveling for Hajj or Umrah are exempt. Q2: Can FBR disable multiple services at once? â€¢ Yes, actions may include mobile, gas, electricity, and travel restrictions simultaneously. Q3: How can I get services restored? â€¢ File the pending tax return or provide proof of exemption. Q4: Are there penalties besides service restrictions? â€¢ Yes, Section 114B actions are in addition to any other tax penalties under the Ordinance. Disclaimer: This article is for informational and educational purposes only and does not constitute legal or professional tax advice. Taxpayers should consult a qualified tax advisor or the Federal Board of Revenue (FBR) for guidance specific to their circumstances. The author and publisher are not responsible for any consequences arising from actions taken based on this information.

Date: 2025-12-17

Details: Corporate taxation in Pakistan can be complex, and businesses need to stay informed to comply effectively. One important provision that companies should be aware of for tax year 2026 is the Alternative Corporate Tax (ACT), governed under Section 113C of the Income Tax Ordinance, 2001. This article breaks down the concept, calculation, and practical implications of ACT in an easy-to-understand and interactive way. What is Alternative Corporate Tax (ACT)? Alternative Corporate Tax (ACT) is a mechanism to ensure that companies pay the higher of their corporate tax or ACT. Essentially: If the ACT exceeds the regular corporate tax, companies are required to pay ACT instead. This applies to income under Division II of Part I of the First Schedule or minimum tax provisions. Key Definitions 1. Accounting Income o Profit before tax as per financial statements o Adjusted as per Sections 7 and 11 o Excludes share from associates recognized under equity method 2. Alternative Corporate Tax (ACT) o Tax rate: 17% of Accounting Income, after specified exclusions 3. Corporate Tax o Higher of: ï‚§ Tax under Division II of Part I of First Schedule ï‚§ Minimum tax under any other provisions of the Ordinance How ACT is Calculated 1. Start with Accounting Income. 2. Subtract amounts excluded under Section 113C(8), such as: o Exempt income o Income taxed under other provisions o Income eligible for tax credits under Sections 65D, 65E, 100C 3. Apply 17% tax rate to the remaining income. âœ… Interactive Tip: Companies can maintain a worksheet that separates excluded income from taxable accounting income for precise ACT computation. Excess ACT & Carry Forward If ACT paid > Corporate Tax, the excess can be carried forward to offset future corporate tax liability. â€¢ Adjustment is allowed for up to 10 tax years following the year of computation. â€¢ Any amendments to corporate tax or ACT affect the carried-forward amount proportionally. ðŸ’¡ Example: If a company pays PKR 1,000,000 as ACT but its corporate tax is PKR 700,000, the excess of PKR 300,000 can be applied to reduce tax in subsequent years (up to 10 years). Who is Exempt from ACT? â€¢ Taxpayers under Fourth, Fifth, and Seventh Schedules of the Ordinance â€¢ Certain credits under Sections 64B and 65B are allowed against ACT Practical Steps for Businesses 1. Check Accounting Income o Ensure accurate adjustments under Sections 7 & 11 2. Identify Exclusions o Exempt income and income under tax credit provisions 3. Calculate ACT o 17% of adjusted accounting income 4. Compare With Corporate Tax o Pay the higher of ACT or regular corporate tax 5. Track Excess ACT o Maintain records for carry forward up to 10 years ðŸ“Š Pro Tip: Use accounting software or a tax consultant to streamline ACT calculations and avoid errors in carry-forward adjustments. Why ACT Matters in Tax Year 2026 â€¢ Encourages compliance by ensuring companies pay minimum effective tax â€¢ Helps prevent under-reporting of profits â€¢ Ensures businesses correctly utilize tax credits and exemptions ACT is especially relevant for companies with high accounting profits but low taxable income, as it prevents paying a disproportionately low corporate tax. Quick FAQ: Q1: Is ACT mandatory for all companies? â€¢ No. Companies under Fourth, Fifth, and Seventh Schedule are exempt. Q2: Can ACT be reduced by tax credits? â€¢ Yes. Credits under Sections 64B and 65B are allowed against ACT. Q3: How long can excess ACT be carried forward? â€¢ Up to 10 years from the year of computation. Q4: Does ACT replace other taxes? â€¢ No. Taxes outside Division II of Part I of the First Schedule remain payable separately. Conclusion Alternative Corporate Tax ensures that companies in Pakistan pay a fair share of taxes, even if accounting profits are high but taxable income is low. Understanding Section 113C and applying it correctly helps businesses stay compliant while optimizing tax planning. ðŸ“Œ Key Takeaway: Companies must calculate both Corporate Tax and ACT, pay the higher amount, and carefully track any excess for future adjustments. Disclaimer: This article is for informational and educational purposes only and does not constitute legal or professional tax advice. Businesses and individuals should consult a qualified tax advisor or the Federal Board of Revenue (FBR) for guidance specific to their circumstances. The author and publisher are not responsible for any actions taken based on the information provided.

Date: 2025-12-16

Details: The Federal Board of Revenue (FBR) has put on hold the recently notified valuation tables for immovable properties in Islamabad after real estate stakeholders raised objections over inflated rates in certain areas. The move comes as the tax authority decided to re-evaluate the fair market values, with the older valuation regime set to remain applicable until revised rates are issued or January 31, 2026, whichever is earlier. Days ago, the FBR, under the SRO 2392(1)/2025 dated 08-12-2025, substantially raised values of residential and commercial immovable properties in Islamabad Capital Territory to bring rates at par with the real market values. â€œWhereas, valuation tables were revised for the whole of Pakistan on 29-10-2024, except for District Islamabad, due to a pending FTO complaint. Subsequently, SRO 2392(1)/2025 dated 08-12-2025 was notified for the fair market values of immovable properties of Islamabad,â€ FBR said on Tuesday. â€œHowever, the Real Estate Associations and others approached FBR to revisit the table as certain areas reflected values which were higher than the actual market values. Whereas some of the cases were examined, and some of the objections raised by the Real Estate Associations were found to be correct. â€œTherefore, it has been decided to re-evaluate the valuation table for District Islamabad. â€œHence, SRO 2392(I)/2025 dated 08-12-2025 is hereby held in abeyance till 31-01-2026 or issuance of a revised SRO notifying fair market values of immovable properties of Islamabad, whichever is earlier. â€œIn the intervening period till 31.01.2026 or issuance of a new SRO for Islamabad, whichever is earlier, SRO 1180(I)/2022 dated 27-07-2022, as amended by SRO 1610(I)/2022 dated 25-08-2022, will remain in the field.

Date: 2025-12-16

Details: As Pakistan enters Tax Year 2026, businesses and high-turnover individuals must once again evaluate whether minimum tax under Section 113 applies to them. Even if your business reports losses or enjoys exemptions, minimum tax may still be payable. Hereâ€™s a simple, interactive breakdown to help you understand when and how it applies. ðŸ” What Is Minimum Tax Under Section 113? Minimum tax is a turnover-based tax imposed when a taxpayerâ€™s final income tax liability is zero or lower than the prescribed minimum percentage, despite having substantial business activity. In simple terms: If your turnover is high but your payable income tax is low (or nil), minimum tax kicks in. ðŸ‘¥ Who Does Section 113 Apply To in Tax Year 2026? Minimum tax applies to the following categories: âœ… Covered Persons â€¢ Resident companies â€¢ Permanent establishments of non-resident companies â€¢ Individuals with turnover of Rs100 million or more â€¢ Associations of Persons (AOPs) with turnover of Rs100 million or more ðŸ“Œ The Rs100 million threshold applies if crossed in Tax Year 2017 or any subsequent year. âš When Does Minimum Tax Become Payable? Minimum tax applies if any of the following reduce your tax liability: âœ” Business loss for the year âœ” Adjustment of previous yearsâ€™ losses âœ” Tax exemptions âœ” Tax credits or rebates âœ” Allowances or deductions (including depreciation or amortization) ðŸ‘‰ Result: â€¢ No tax payable OR â€¢ Tax payable is less than the minimum percentage of turnover specified in Division IX, Part I of the First Schedule âŒ What Is NOT Included in â€œTax Payable or Paidâ€? For Section 113 purposes, the following taxes are excluded: â€¢ Tax on deemed income treated as final discharge under Section 169 â€¢ Tax paid under Section 4B (Super Tax) â€¢ Tax paid under Section 4C (Poverty Alleviation Tax) ðŸ§® How Is Minimum Tax Calculated? Once Section 113 applies: ðŸ”¹ Step 1: Turnover Becomes Your Taxable Income Your entire turnover from all sources is treated as taxable income. ðŸ”¹ Step 2: Apply Minimum Tax Rate Tax is calculated using rates provided in Division IX, Part I of the First Schedule instead of normal income tax slabs. ðŸ”„ Can You Adjust Minimum Tax in Future Years? Yesâ€”but with limits. âœ” Carry Forward Allowed â€¢ If minimum tax paid exceeds actual tax liability, the excess can be: o Carried forward for up to two succeeding tax years o Adjusted against normal tax under: ï‚§ Clause (1) of Division I, or ï‚§ Division II of Part I of the First Schedule ðŸ“Œ If minimum tax is paid due to zero tax payable, the entire amount is eligible for carry-forward. ðŸ“Š What Counts as â€œTurnoverâ€ Under Section 113? Turnover includes gross receipts from all business activities, excluding sales tax, federal excise duty, and trade discounts. âœ” Included in Turnover: â€¢ Gross sales of goods â€¢ Gross service fees and commissions â€¢ Gross contract receipts â€¢ Companyâ€™s share in AOP receipts â€¢ Business receipts from sale of immovable property (if taxable as business income) âŒ Excluded from Turnover: â€¢ Amounts already taxed as final discharge of tax liability ðŸ“ Key Takeaways for Taxpayers â€¢ Minimum tax is not profit-based, itâ€™s turnover-based â€¢ Loss-making or exempt businesses may still pay tax â€¢ Rs100 million turnover is the critical threshold â€¢ Proper tax planning is essential to manage future adjustments ðŸ“¢ Final Thought For Tax Year 2026, Section 113 continues to play a major role in Pakistanâ€™s tax regime by ensuring that high-turnover taxpayers contribute a minimum amount, regardless of reported profits. Understanding its scope can help you avoid surprises and plan smarter. âš Disclaimer: This article is for general informational purposes only and does not constitute professional tax advice. Readers should consult a qualified tax advisor or the Federal Board of Revenue (FBR) for guidance specific to their individual or business circumstances. The rules and regulations described here are based on the Income Tax Ordinance, 2001 and may be subject to change.

Date: 2025-12-16

Details: Islamabad, December 16, 2025 â€” President Asif Ali Zardari on Tuesday administered the oath of office to Zafar ul Haq Hijazi as the Federal Tax Ombudsman (FTO) at a ceremony held at Aiwan-e-Sadr, marking a new chapter in Pakistanâ€™s taxpayer grievance redressal system. Zafar ul Haq Hijazi is a seasoned Chartered Accountant and a Fellow Member of the Institute of Chartered Accountants of Pakistan (ICAP), with more than four decades of professional experience spanning taxation, corporate and capital market regulation, audit oversight, financial management, and advisory services. He has previously served in key leadership roles, including Chairman of the Securities and Exchange Commission of Pakistan (SECP) and Chairman of the Audit and Oversight Board of Pakistan, bringing extensive regulatory and governance expertise to the FTO office. After the oath-taking, Hijazi called on President Zardari, who underscored the importance of increasing public awareness about the role of the Federal Tax Ombudsman in facilitating taxpayers and resolving grievances. The President advised the new Ombudsman to leverage modern technology to improve efficiency and ensure the timely disposal of complaints, emphasizing the need for speedy, transparent, and cost-free relief for aggrieved citizens. He also stressed expanding the institutionâ€™s outreach nationwide to strengthen public trust in the tax administration system. Zafar ul Haq Hijazi has replaced Dr. Asif Mahmood Jah, who assumed office on September 30, 2021. During Dr. Jahâ€™s tenure, the FTO witnessed a significant transformation, with complaints rising sharply from 2,867 in 2021 to 35,716 in 2025, reflecting growing taxpayer confidence in the grievance redressal mechanism. Under his leadership, the FTO Secretariat implemented 98 percent of its recommendations, while approximately 97 percent were upheld by the President of Pakistan. Overall, the FTO received 64,664 complaints during Dr. Jahâ€™s tenureâ€”exceeding the combined total of complaints received over the previous five tenures spanning 21 years. The office also facilitated recoveries exceeding PKR 23 billion and achieved an average complaint resolution time of just 34 days. Beyond national achievements, Dr. Jahâ€™s tenure enhanced Pakistanâ€™s global standing in international ombudsman forums, with Pakistani representatives securing key positions in global organizations. The establishment of the Diplomatic Grievance Redressal Cell further demonstrated the FTOâ€™s commitment to addressing diplomatic and tax-related grievances in Islamabad.

Date: 2025-12-16

Details: Karachi, December 16, 2025 â€” The Federal Board of Revenue (FBR) has imposed a major penalty on a customs official for professional negligence and submission of a false examination report, resulting in potential loss to the government exchequer. According to an official order, disciplinary proceedings were initiated against Muhammad Ali Pechohu, Inspector Customs (BS-16), posted at the Collectorate of Customs Appraisement, Quetta, on charges of â€œInefficiency and Misconduct.â€ He was placed under suspension in July 2025, and an inquiry was conducted by Muhammad Aftab, Additional Collector Customs (PCS/BS-19), who served as the Inquiry Officer. The inquiry report, submitted on September 25, 2025, concluded that Mr. Pechohu displayed gross negligence, professional misconduct, and failure to carry out statutory responsibilities. It was noted that he submitted an examination report for a consignment of grapes and plums without proper physical verification, falsely declaring 18,000 kgs of grapes and 5,000 kgs of plums. Re-examination revealed actual quantities of 2,934 kgs of grapes and 20,784 kgs of plums, which would have caused a government revenue loss of approximately Rs. 2 million if the consignment had not been intercepted. During a personal hearing via Zoom on November 27, 2025, the accused claimed the discrepancy was due to possible pilferage during transport. However, the FBR observed that this claim was unsubstantiated and ignored specific instructions from the supervising officer to conduct a thorough examination. Considering the gravity of the offense and the fact that the officer had only three years left for superannuation, the FBR decided to impose the major penalty of compulsory retirement with immediate effect. His suspension from July 4, 2025, to date will be treated as leave, as per Revised Leave Rules, 1980. Mr. Pechohu has the right to appeal this order to the Appellate Authority within 30 days of its communication. This action highlights FBRâ€™s commitment to strict accountability and ensuring protection of government revenue against professional misconduct in customs operations.

Date: 2025-12-16

Details: If you did not file your tax return for 2025, you could face serious restrictions from the Federal Board of Revenue (FBR). The Income Tax Ordinance, 2001 empowers the FBR under Section 114C to limit economic transactions of non-filers, ensuring compliance and discouraging tax evasion. This interactive guide explains what actions FBR can take, thresholds, exemptions, and how taxpayers can remain compliant. What Restrictions Can FBR Impose on Non-Filers? Section 114C allows the FBR to block certain economic activities for non-filers or â€œineligible persons,â€ including: 1. Motor Vehicles o Non-filers cannot book, purchase, or register vehicles exceeding thresholds in the Fifteenth Schedule. 2. Immovable Property o Purchase or registration of property above the specified threshold is blocked. 3. Investments in Securities or Mutual Funds o Non-filers cannot open or maintain accounts if total investments exceed Fifteenth Schedule limits. 4. Bank Cash Withdrawals o Cash withdrawals exceeding the threshold are restricted. âš Interactive Tip: Check the Fifteenth Schedule for current thresholds to avoid surprises. Who is Exempt from These Restrictions? Some categories of people are not subject to these restrictions, including: â€¢ Non-resident individuals â€¢ Public companies â€¢ Certain transactions like minor purchases (as notified by FBR) Key Definitions Understanding the law requires clarity on some terms: â€¢ Eligible Person: o Filed income return for the preceding tax year or o Submitted Sources of Investment & Expenditure Statement with sufficient resources o Includes immediate family members: parents, spouse, dependent children â€¢ Ineligible Person: o Anyone who does not qualify as an eligible person â€¢ Sufficient Resources: o At least 130% of cash or equivalent assets, including: ï‚§ Cash in PKR or foreign currency ï‚§ Gold, stocks, bonds, receivables, and other cash equivalents o Applies to individuals and companies based on their wealth or financial statements ðŸ’¡ Pro Tip: Filing returns and declaring resources ensures you remain an eligible person, avoiding transaction blocks. How Restrictions Are Enforced The FBR can impose restrictions from the date notified in the official Gazette, and thresholds may be adjusted up or down. Restrictions can cover: â€¢ Vehicle registration â€¢ Property transactions â€¢ Investments in securities â€¢ Bank withdrawals âœ… Interactive Tip: Maintain proof of filing and declared resources to quickly resolve any issues with authorities. Quick Action Checklist for 2025 Non-Filers 1. âœ… Verify if you are on the Active Taxpayersâ€™ List (ATL). 2. âœ… File your 2025 tax return immediately. 3. âœ… Submit a Sources of Investment & Expenditure Statement, if applicable. 4. âœ… Ensure your declared resources meet 130% threshold. 5. âœ… Notify banks, investment firms, or vehicle/property authorities once filing is complete. ðŸ“Š Interactive Feature Idea: A step-by-step compliance tracker can help you ensure all transactions are cleared and eligible under Section 114C. Why Compliance is Critical Non-filers risk: â€¢ Blocked economic transactions â€¢ Inability to register vehicles or property â€¢ Restricted access to investments or bank withdrawals â€¢ Legal complications and scrutiny from FBR Filing your tax return on time and declaring sufficient resources is the safest way to avoid restrictions. ðŸ“Œ Key Takeaway: Section 114C empowers the FBR to enforce compliance, but proactive filing keeps you eligible and free from economic restrictions. FAQ Q1: Does this apply to minors or non-residents? â€¢ No, minors, non-residents, and certain other categories are exempt. Q2: Can my family members make purchases on my behalf? â€¢ Immediate family members are treated as eligible if the primary filer is compliant. Q3: How can I lift restrictions after filing? â€¢ Submit proof of filing and declared resources to the relevant authorities. Disclaimer: This article is for informational and educational purposes only and does not constitute legal or professional tax advice. Taxpayers should consult a qualified tax advisor or the Federal Board of Revenue (FBR) for guidance specific to their situation. The author and publisher are not responsible for any consequences arising from actions taken based on this information.

Date: 2025-12-14

Details: Written by Shahnawaz Akhter Islamabad, December 14, 2025 â€” The International Monetary Fund (IMF) has directed Pakistanâ€™s Federal Board of Revenue (FBR) to submit detailed monthly reports on new taxpayers added to the tax net, strengthening oversight under the ongoing IMF-supported economic program. According to the IMF country report on Pakistan, the FBR is now formally bound to share taxpayer expansion data every month, marking a significant shift toward transparency and measurable tax reforms. What Data Must FBR Share With IMF? Under the new reporting framework, the FBR must submit a comprehensive breakdown of newly enrolled taxpayers, covering both voluntary registrations and those added through enforcement measures. ðŸ“Š Monthly Taxpayer Reporting Requirements The IMF has asked FBR to disclose: â€¢ Total number of notifications issued to potential taxpayers â€¢ Number of newly registered taxpayers, including: o Voluntary registrations o Registrations after official notices â€¢ Number and total value of tax returns filed by newly registered taxpayers â€¢ Total revenue collected from new taxpayers (voluntary and notified) This data will allow the IMF to assess whether Pakistanâ€™s tax base is expanding in a sustainable and enforceable manner. Special Focus on Retail Sector Taxpayers The IMF has also placed special emphasis on the retail sector, which remains one of the largest untaxed or under-taxed segments of the economy. ðŸª Retail Sector Data Required FBR must now separately report: â€¢ Number of retailers registered as new taxpayers â€¢ Number and value of tax returns filed by newly registered retailers â€¢ Total tax revenue collected from retail sector entrants The move aligns with Pakistanâ€™s commitment to bring wholesale and retail trade into the documented economy. Reporting Deadline: Just 7 Days â° The IMF has set a strict reporting timeline. FBR must submit the complete monthly taxpayer data within seven days of the close of each month, ensuring real-time monitoring of tax reforms. Failure to meet targets or timelines could affect program reviews and future disbursements. Why This Matters for Pakistanâ€™s Economy Experts believe the requirement will: â€¢ Increase pressure on FBR to deliver measurable results â€¢ Reduce reliance on indirect taxation â€¢ Improve revenue predictability â€¢ Enhance trust between Pakistan and international lenders ðŸ“Œ The monthly reporting mechanism also limits the scope for inflated or one-time taxpayer figures, as performance will now be tracked continuously. What IMF Will Track Monthly âœ” New taxpayers added âœ” Returns filed by new entrants âœ” Revenue collected from new filers âœ” Retailers brought into tax net âœ” Compliance after enforcement notices Final Takeaway The IMFâ€™s demand for monthly taxpayer expansion reports marks a turning point in Pakistanâ€™s tax reform agenda. With strict deadlines and sector-wise disclosures, the FBR is under growing pressure to prove real progress in broadening the tax base, especially in the retail economy. The coming months will reveal how many taxpayers are actually being nettedâ€”and how much revenue they contribute.

Date: 2025-12-14

Details: Written by Shahnawaz Akhter If you have concealed income, underreported earnings, or forgotten to declare certain assets, Tax Year 2026 could bring serious consequences. The Federal Board of Revenue (FBR) has tightened enforcement under the updated Income Tax Ordinance, 2001, keeping Section 111 (Unexplained Income or Assets) fully applicable. With increased data matching, bank reporting, and audit scrutiny, taxpayers must understand how FBR detects hidden income and what actions it can legally take. Why Section 111 Matters in 2026 Section 111 empowers FBR to add unexplained income directly to your taxable income if you fail to provide a satisfactory explanation for: â€¢ Unrecorded money â€¢ Undeclared assets â€¢ Excessive expenditure â€¢ Suppressed sales or production â€¢ Inaccurate income particulars âš Key takeaway: The burden of proof lies entirely on the taxpayer. What Triggers FBR Action Under Section 111? FBR can invoke Section 111 if any of the following are discovered: ðŸ” Red Flags for Taxpayers â€¢ Credits appearing in books without explanation â€¢ Ownership of money, investments, or valuables beyond declared income â€¢ Lifestyle or expenditure inconsistent with reported earnings â€¢ Suppressed sales, production, or taxable receipts â€¢ Misreporting or concealment of Pakistan-source or foreign income If your explanation is unsatisfactory in the Commissionerâ€™s opinion, FBR can proceed with additions to income. How Will Hidden Income Be Taxed? Depending on the nature of the discovery, FBR may categorize income under different heads: ðŸ§¾ Income Classification by FBR â€¢ Income from Other Sources o Unexplained cash o Undeclared investments o Excess expenditure o Valuable articles (gold, property, etc.) â€¢ Income from Business o Suppressed production o Hidden sales o Underreported taxable receipts The amount added is taxed at applicable slab rates, along with potential penalties and default surcharge. Which Tax Year Will the Income Be Added To? This is where many taxpayers get confused. ðŸ“… Tax Year Determination Rules â€¢ Pakistan-source income or assets: Added to the relevant tax year in which income arose â€¢ Foreign assets or expenditure: Added to the tax year immediately preceding the year of discovery ðŸ“Œ Important clarification: If the asset was acquired earlier and you can explain its source, FBR cannot reject the explanation merely due to year mismatch. What About Agricultural Income? FBR will accept agricultural income explanations only to the extent supported by: â€¢ Agricultural income tax paid â€¢ Provincial agricultural tax records â€¢ Reasonable income calculations worked backward Unsupported claims may still be taxed under Section 111. Relief Available to Taxpayers Not everything falls under unexplained income. âœ… Key Exemptions & Relaxations â€¢ Foreign remittances up to Rs 5 million per year o Must come through banking channels o En-cashed by a scheduled bank o Supported by bank certificate â€¢ Final tax regime income o Credit limited to imputable income o Excess allowed only with audited accounts No Separate Notice? Yes, Thatâ€™s Legal FBR does not need to issue a separate Section 111 notice if: â€¢ The issue is already raised during audit or amendment proceedings â€¢ The taxpayer is confronted under Section 122(9) This speeds up enforcement and limits procedural delays. Are You at Risk? Ask yourself: â˜‘ Have you declared all bank credits? â˜‘ Do your expenses match declared income? â˜‘ Are foreign assets properly disclosed? â˜‘ Are sales and production fully reported? â˜‘ Do you have documentation for each income source? If any answer is â€œNoâ€, Section 111 exposure is real. What Should Taxpayers Do Now? ðŸ›¡ Smart Compliance Steps for 2026 â€¢ Reconcile bank statements with tax returns â€¢ Disclose foreign assets accurately â€¢ Maintain proof for remittances and investments â€¢ Avoid aggressive underreporting â€¢ Seek professional tax advice before filing Final Word Tax Year 2026 marks a no-tolerance phase for hidden income. With Section 111 firmly in place, FBR has full authority to tax unexplained money, assets, and expenditure, regardless of whether it originates locally or abroad. ðŸ“¢ Proactive disclosure today is far cheaper than forced taxation tomorrow. (Disclaimer: This article is published for general information and awareness purposes only. It does not constitute legal, tax, accounting, or professional advice. While every effort has been made to ensure accuracy based on the Income Tax Ordinance, 2001 (as applicable for Tax Year 2026), tax laws, rules, interpretations, and enforcement practices of the Federal Board of Revenue (FBR) are subject to change. Readers are advised not to rely solely on this information when making tax, financial, or compliance decisions. Individual tax matters vary based on specific facts and circumstances. For tailored advice, readers should consult a qualified tax practitioner, chartered accountant, or legal advisor. The publisher and author accept no liability for any loss, damage, or penalty arising directly or indirectly from the use of, or reliance upon, the information contained in this article.)

Date: 2025-12-14

Details: Written by Shahnawaz Akhter The Federal Board of Revenue (FBR) has announced a new tax credit facility for textile spinning units to offset expenses incurred on the installation of video analytics systems, aimed at reducing costs for the sector while ensuring electronic monitoring of production. Under this initiative, a joint committee comprising members from the FBR and the All Pakistan Textile Mills Association (APTMA) has been formed to oversee the implementation of video monitoring systems in spinning units. The committee will strategize the rollout, address operational challenges, and design the tax credit mechanism. From the FBR, members include Dr. Najeeb Ullah, Chief of the Transformation Delivery Unit, and Javed Iqbal, Director of Track & Trace. APTMA representatives include Chairman Kamran Arshad, Senior Member Rehman Naseem, and General Secretary Shaid Sattar as co-opted member. The committee is expected to submit its report by Friday, December 19, 2025. Initially, the FBR mandated video analytics monitoring for registered textile spinning units starting November 1, 2025. However, the deadline has now been extended to December 31, 2025, allowing units additional time to comply. The tax credit facility will help minimize installation costs, ensuring smooth adoption of the monitoring system. The move follows discussions between FBR and APTMA addressing concerns such as camera installation costs, cost-sharing options, assurance against further harassment, and allowances for variations in raw material usage. The FBR also plans to appoint two additional vendors to provide competitive rates for spinning units, ensuring affordability and ease of compliance. According to S.R.O. 1963 (I)/2025, all registered textile spinning units must now be electronically monitored via video analytics in line with the Sales Tax Act, 1990, reinforcing transparency and modernization in the sector. This initiative is expected to improve operational efficiency, reduce costs, and strengthen compliance across Pakistanâ€™s textile spinning industry.

Date: 2025-12-14

Details: Written by Shahnawaz Akhter The Senate has initiated a formal inquiry into alleged corruption within the Federal Board of Revenue (FBR), directing the tax authority to submit comprehensive details of complaints received against its officials since July 2023. According to official correspondence, the Senate Secretariat has instructed the FBR to compile and forward information regarding tax officers and staff accused of corruption across various wings and directorates of the organization. The move follows the submission of Starred Questions by Senator Talha Mahmood, seeking transparency and accountability within the countryâ€™s top revenue-collecting body. In his questions, the senator asked whether the Minister for Finance and Revenue would provide complete details of corruption complaints lodged against FBR officials, including the nature of the allegations. He also sought the names and designations of the officers and officials involved, along with information on disciplinary or legal action taken in each case. In response, the FBR has issued formal instructions to all Chief Commissioners and Directors General of Inland Revenue, directing them to collect and submit the required data without delay. The information is to cover employees from Basic Scale (BS) 1 to BS-16, including those in Time Scale BS-17 positions. The FBR has emphasized that all concerned formations must forward the requested details to the Board no later than December 16, 2025, to ensure timely submission to the Senate Secretariat. Officials have been instructed to ensure accuracy and completeness of the data, as it will form part of the official parliamentary record. The Senateâ€™s inquiry comes amid ongoing concerns over governance, transparency, and integrity within revenue institutions. Lawmakers have repeatedly stressed the need to curb corruption in the tax system to improve revenue collection and restore public trust. The development highlights growing parliamentary scrutiny of the FBR and signals potential further action depending on the findings presented to the Senate.

Date: 2025-12-03

Details: Islamabad, December 3, 2025 â€“ The Federal Board of Revenue (FBR) has launched a process to outsource its media management and public relations functions as part of its ongoing efforts to strengthen communication and public engagement. The initiative aims to enhance the agencyâ€™s visibility and highlight key reforms under the FBR Transformation Plan. According to the FBR, the outsourced media firm will be responsible for promoting major reform initiatives, including digitization, documentation of the economy, enhanced tax administration, revenue growth, and digital transformation across FBR functions. The firm must also address public concerns, manage misconceptions about FBR policies, and ensure effective outreach to target audiences through both traditional and digital media. Scope of Work for the Media Firm The selected firm will: â€¢ Develop and implement a comprehensive media strategy to improve FBRâ€™s brand visibility. â€¢ Produce and distribute creative content across TV, radio, print, and digital channels, including press releases, articles, infographics, videos, influencer partnerships, and social media posts. â€¢ Conduct interviews, manage press conferences, podcasts, and media events. â€¢ Provide analytics, feedback, and media performance reports, adjusting strategies based on audience engagement. â€¢ Facilitate stakeholder engagement, regional media tours, media training workshops, and communication during crises. â€¢ Support taxpayer facilitation campaigns and website audits to enhance public awareness. Evaluation Criteria The FBR will assess applicants based on: â€¢ Proven experience in media strategy and public relations. â€¢ Track record with similar clients. â€¢ Skilled team capable of managing multi-channel communications. â€¢ Understanding of relevant markets and audiences. This initiative reflects FBRâ€™s commitment to improving transparency, promoting reforms, and engaging effectively with taxpayers and the general public.

Date: 2025-12-02

Details: Saeed Akhtar Baloch Published about 2 hours ago LAHORE: Oversight in assessing concealed assets of taxpayers by the Federal Board of Revenue (FBR) officers in the Regional Tax Offices (RTOs) of Lahore and Islamabad has caused a loss of Rs930.08 million to the national exchequer, according to the Auditor General of Pakistanâ€™s (AGP) report for the year 2023-24. The report states that during the audit of tax records of 81 taxpayers under the jurisdiction of Commissioners Inland Revenue in RTO Islamabad and RTO Lahore, it was observed that the taxpayers had derived income from construction and completion of buildings in the Islamabad Capital Territory (ICT) and Lahore. Out of the 81 cases, 79 taxpayers had purchased properties but failed to file income tax returns or explain the sources of their investments as required by law. Additionally, two taxpayers under-declared their sales and consequently paid less tax in their income tax returns. According to the AGP report, assessing officers were legally required to enforce the filing of income tax returns and assess concealed assets declared, or not declared, by taxpayers. However, they failed to take action, resulting in revenue loss amounting to Rs930.08 million. The AGP pointed out these lapses between March and May 2024, but the department did not furnish any reply until the finalization of the report. Under the heading â€œconcealment of assets and income from contracts,â€ the Audit noted that income tax law imposes obligations on both sellers and purchasers of immovable property to comply with documentation requirements and declare the fair market value of assets. Sellers must provide accurate information on property value, while purchasers are responsible for verifying declared values and ensuring proper documentation. If either party conceals asset particulars, assessing authorities are empowered to tax concealed income and investments. The Audit further observed that neither purchasers nor sellers filed income tax returns, thereby concealing their income and assets. Contractors were also required to declare the square footage of completed construction and pay tax accordingly, but the department failed to enforce these legal provisions. Moreover, the report highlighted that Section 111 of the Income Tax Ordinance, 2001, lays out procedures for taxing concealed income. It says: â€œIf a person owns money, a valuable article, or has made an investment without adequately explaining the source, the amount becomes taxable.â€ In this case, the concerned officers ignored these procedures, resulting in the underassessment of concealed properties and a substantial loss to the national treasury. WHAT IS THE MEANING OF â€œPERSONâ€ UNDER THE INCOME TAX ORDINANCE, 2001? Understanding who is considered a â€œpersonâ€ under Pakistanâ€™s Income Tax Ordinance, 2001 is crucial for taxpayers, businesses, and legal entities. Section 80 of the Ordinance provides a detailed definition, covering everyone from individuals to companies and even governments. Below is an interactive breakdown to help you easily identify where you or your organization fit. ðŸ” Why Does the Definition of â€œPersonâ€ Matter? In Pakistanâ€™s tax system, tax liability, filing requirements, exemptions, and compliance rules depend on whether an entity qualifies as a â€œperson.â€ This definition is the foundation for all tax treatment. ðŸ‘¤ Who Is a â€œPersonâ€ Under Section 80? Section 80(1) states that the following are treated as persons: 1ï¸âƒ£ Individuals Any single human being â€” salaried, businessperson, freelancer, student earning income, etc. 2ï¸âƒ£ Companies & Associations of Persons (AOP) Any company, partnership, firm, or group formed in Pakistan or abroad. 3ï¸âƒ£ Government & International Bodies This includes: â€¢ Federal Government â€¢ Any foreign government â€¢ Political subdivisions of foreign governments â€¢ Public international organizations (e.g., UN agencies) ðŸ“˜ Detailed Breakdown of Key Terms Under Section 80(2) Now letâ€™s explore what each category includes. ðŸ‘¥ Association of Persons (AOP) Includes: âœ” Firm âœ” Hindu Undivided Family âœ” Any artificial juridical person âœ” Any body of persons formed under foreign law âŒ Does NOT include a company Example: Partners running a shop together. ðŸ¢ Company A very broad term under Section 80. A â€œcompanyâ€ includes: âœ” A company defined in the Companies Act, 2017 âœ” Any body corporate in Pakistan âœ” Modaraba âœ” Foreign-incorporated bodies âœ” Co-operative societies & finance societies âœ” Non-profit organizations âœ” Trusts formed under any law âœ” Foreign associations declared as companies by FBR âœ” Provincial Government âœ” Local Government âœ” Small Company (as per section 2) Example: Multinational corporations, NGOs, societies, government bodies, modarabas. ðŸ¤ Firm A relationship between persons (partners) who agree to share business profits. Example: A partnership running a restaurant. ðŸ§¾ Trust A legal obligation tied to property ownership, created for the benefit of another person. Includes unit trusts. ðŸ“¦ Unit Trust A trust where beneficiariesâ€™ shares are divided into units, similar to mutual fund units. ðŸ“Œ Quick Summary Category Who It Includes Key Examples Individual Single person Salaried worker, freelancer Company Corporations, NGOs, trusts, govt bodies Pvt Ltd, Modaraba, Local Govt AOP Group of persons other than companies Partnership firm Firm Persons sharing business profit Law firm, consulting firm Trust Property held for beneficiaries Family trust Unit Trust Trust with unit-based entitlement Mutual fund-type structures ðŸ’¡ Why This Matters for Taxpayers â€¢ Determines filing requirements â€¢ Influences tax rates â€¢ Affects withholding obligations â€¢ Impacts audit and compliance rules â€¢ Defines eligibility for exemptions or incentives Whether you are an individual, business, NGO, or government body, Section 80 ensures you are correctly identified for tax purposes. âš Disclaimer This article is for general informational purposes only and does not constitute legal or tax advice. For specific guidance on income tax matters, consult a qualified tax professional or the Federal Board of Revenue (FBR).

Date: 2025-12-02

Details: Islamabad, December 1, 2025 â€“ The Federal Board of Revenue (FBR) has reversed a major disciplinary action against a senior auditor implicated in a Rs238.42 billion tax fraud case, downgrading the penalty from dismissal to a minor sanction of withholding promotion for three years. The case originated after the Prime Ministerâ€™s Office shared an intelligence report identifying a massive tax fraud. As a result, disciplinary proceedings were launched under the Civil Servants (Efficiency and Discipline) Rules, 2020 against Altaf Hussain Khurho, then Senior Auditor (Time Scale 17) at Regional Tax Office-I (RTO-I) Karachi. An inquiry was conducted by Aftab Alam (IRS/BS-20), Director General (OPS), Directorate of International Taxes Operation, who submitted his report on July 17, 2025. The inquiry initially recommended a minor penalty of withholding promotion for one year. However, the Authority Member (Administration/HR) later imposed the major penalty of removal from service, arguing that the recommended punishment did not match the severity of the lapses committed by the auditor. A notification to this effect was issued on October 17, 2025. Khurho subsequently filed a departmental appeal, requesting the suspension of the dismissal order and an opportunity for a personal hearing. During the appeal proceedings, the Appellate Authority observed that while charges of inefficiency were clearly establishedâ€”such as failure to pursue arrest of accused individuals, lack of follow-up on bail cancellation, and failure to submit a detailed challanâ€”there were also significant mitigating factors. The records showed that Khurho, acting as investigation officer, successfully blocked fake input tax worth Rs237.137 billion, representing 99.46% of the total fraudulent output tax. Additionally, he facilitated the recovery of Rs117.413 million, nearly 59% of the fake output tax injected into the system. Taking both the misconduct and the mitigating contributions into account, the Secretary Revenue Division / Chairman FBR, serving as the Appellate Authority, concluded that neither the initial minor penalty nor the subsequent dismissal was proportionate. The Appellate Authority therefore converted the major penalty of removal into a minor penalty of withholding promotion for three years, under Rule 4(2)(d) of the Civil Servants (Efficiency and Discipline) Rules, 2020. Following the decision, Altaf Hussain Khurho has been reinstated, and the period between his removal on October 17, 2025, and reinstatement will be treated as leave of the type due.

Date: 2025-12-01

Details: Islamabad, December 1, 2025 â€“ The Federal Board of Revenue (FBR) has issued Customs General Order (CGO) No. 08/2025 to ensure the safe and secure transportation of plant, machinery, equipment, and industrial inputs destined for industrial units in the tribal areas (erstwhile FATA/PATA) that benefit from concessionary sales tax rates under entry 89 of the Eighth Schedule to the Sales Tax Act, 1990. According to the FBR statement released on Monday, this CGO continues the regulatory framework established earlier under CGO-01/2021. Initially, the federal government granted sales tax and income tax concessions to industrial units in the tribal areas through SROs 1212 and 1213 of 2018. These concessions were later incorporated into the law via the Finance Act 2019 under serial 151 of the Sixth Schedule of the Sales Tax Act and Section 159 of the Income Tax Ordinance. From 2018 to March 2021, units in the erstwhile FATA/PATA imported machinery and industrial inputs primarily through Karachi port. However, following objections from rival industries in settled areas, FBR introduced CGO-01/2021, mandating clearance through Azakhel Dry Port under a bonded carrier system governed by the Tracking and Monitoring of Cargo Rules. The Finance Act 2025 partially withdrew the exemption, introducing a phased 10% sales tax, while maintaining the requirement for clearance via Azakhel Dry Port. Several industrial units challenged this procedure before the Peshawar High Court, which initially permitted interim clearance through Karachi port without bonded carriers or tracking mechanisms. The Court subsequently allowed FBR to notify a fresh procedure. Now, under CGO-08/2025, FBR has reinstated a secure, tracked movement framework for concessionary imports to designated tribal area units. The updated procedure ensures compliance with the Tracking and Monitoring of Cargo Rules, 2023, requires clearance through Azakhel Dry Port, and addresses concerns raised by industries in settled regions, thereby maintaining transparency and regulatory oversight of tax-advantaged imports.

Date: 2025-12-01

Details: Islamabad, December 1, 2025 â€“ The Federal Board of Revenue (FBR) has announced significant administrative changes and assigned additional charges to numerous senior Inland Revenue Service (IRS) officers, signaling a renewed focus on tax collection and enforcement. The most prominent change sees Dr. Hamid Ateeq Sarwar given the highly critical responsibility of Member (IR-Operations), FBR. Dr. Sarwar, a retired BS-22 officer of the IRS, who was serving as Member (Strategic Transformation) at FBR Headquarters, will now oversee the entire operational wing of the Inland Revenue Service. The Member (IR-Operations) role is central to Pakistanâ€™s tax administration, responsible for the collection and enforcement of all domestic taxes, including Income Tax, Sales Tax, and Federal Excise Duty across the countryâ€™s Regional Tax Offices (RTOs) and Large Taxpayer Units (LTUs). This temporary appointment was effective from November 20, 2025. The notification, issued under No. 2861-IR-I/2025, clarifies that this arrangement is for a maximum period of three months or until the posting of a regular incumbent, whichever occurs earlier. Such short-term appointments are standard practice to maintain the continuity of critical departmental functions. IRS Officers Assigned Additional Charges Following is the list of some key officials, who have been assigned additional charges across various wings and field formations to streamline tax administration and operations: S.No. Name of Officer Present Posting Additional Charge W.e.f. 1 Dr. Hamid Ateeq Sarwar (Retd. IRS/BS-22) Member (Strategic Transformation), FBR (Hq) Member (IR-Operations), FBR (Hq), Islamabad 20.11.2025 2 Mr. Manzoor Ali Jokhio (IRS/BS-20) Chief (Legal-HR), Admin/HR Wing, FBR (Hq) Chief (Pension Cell), Admin/HR Wing, FBR (Hq) 10.11.2025 3 Mr. Muhammad Majid (IRS/BS-20) Commissioner-IR (Zone-II), RTO, Gujranwala Commissioner-IR (WHT), RTO, Gujranwala 05.11.2025 4 Mr. Shabih-ul-Aijaz (IRS/BS-20) Commissioner-IR (Zone-I), LTO, Karachi Commissioner-IR (Refunds), LTO, Karachi 10.11.2025 5 Mr. Zulfiqar Ali Syed (IRS/BS-20) Commissioner-IR (Zone-I), MTO, Karachi Commissioner-IR (Zone-IV), MTO, Karachi 10.11.2025 6 Mr. Zulfiqar Ali Memon (IRS/BS-20) Commissioner-IR (Zone-II), MTO, Karachi Commissioner-IR (Refunds), MTO, Karachi 10.11.2025 7 Ms. Fauzia Adil (IRS/BS-20) Commissioner-IR (WHT), RTO, Sialkot Commissioner-IR (Gujrat Zone), RTO, Sialkot 21.11.2025 8 Mr. Hammal Baloch (IRS/BS-20) Commissioner-IR (Zone-III), RTO-II, Karachi Commissioner-IR (Zone-II), RTO-II, Karachi 10.11.2025 9 Dr. Najeebullah (IRS/BS-20) Chief (TDU), FBR (Hq), Islamabad Chief (Tax Reforms) and Director (Program Office) 12.11.2025 10 Mr. Imran Hayee Khan (IRS/BS-20) Commissioner-IR (Refunds), RTO, Lahore Commissioner-IR (Zone-I), RTO, Lahore 17.11.2025 11 Ms. Maryam Habib (IRS/BS-20) Commissioner-IR (Appeals-VII), Karachi Commissioner-IR (Appeals-V), Karachi 17.11.2025 The FBRâ€™s decision to shuffle these key responsibilities is a common practice aimed at improving efficiency and achieving the national revenue targets, which are crucial for Pakistanâ€™s fiscal health. Taxpayers and businesses will be closely watching the operational strategies of the new heads in the coming months.

Date: 2025-12-01

Details: Karachi, December 1, 2025 â€“ The Federal Board of Revenue (FBR) has announced that it will determine the cost of assets for tax purposes during the tax year 2026, in accordance with the Income Tax Ordinance, 2001. This move is aimed at providing clarity for taxpayers and businesses regarding asset valuation for taxation. Under Section 76 of the Ordinance, the cost of an asset is broadly defined to include not only the purchase price but also incidental and improvement-related expenditures, while excluding amounts already allowed as deductions under the law. The FBR said these rules will ensure uniformity and transparency in determining taxable asset values. Key points under Section 76 include: â€¢ Asset Acquisition: The cost includes total consideration, fair market value of any non-cash payment, and incidental expenditures for acquiring or disposing of the asset. â€¢ Asset Improvement: Expenses incurred to alter or enhance the asset are included unless fully deducted earlier. â€¢ Constructed Assets: The total production or construction costs plus incidental expenses are considered part of the asset cost. â€¢ Foreign Currency Loans: Any gain or loss due to currency fluctuations on loans used to acquire an asset will adjust the assetâ€™s cost for depreciation purposes. â€¢ Partial Disposal: When part of an asset is sold, the cost is proportionally allocated based on fair market value at acquisition. â€¢ Exempt or Taxable Amounts: Costs for assets acquired through taxable or exempt amounts are calculated by adding amounts paid to the derived sum. â€¢ Government Assistance: Grants, subsidies, or rebates are generally excluded unless taxable under the Ordinance. The FBR also reserves the right to issue specific rules for determining asset costs, offering flexibility to address evolving tax requirements. Taxpayers are advised to closely follow FBR notifications to ensure compliance. This framework is expected to improve transparency in asset valuation, reduce disputes, and streamline tax administration for businesses and individuals across Pakistan. Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal or tax advice. Taxpayers should consult the Federal Board of Revenue (FBR) or a qualified tax professional for guidance specific to their circumstances.

Date: 2025-11-27

Details: Islamabad, November 27, 2025 â€“ Prime Minister Shehbaz Sharif has approved a disciplinary penalty against a senior BS-20 Inland Revenue Service (IRS) officer after charges of inefficiency were proven during an official inquiry. The Prime Minister ordered that the officerâ€™s annual increment be withheld for two years. According to an office order issued by the Federal Board of Revenue (FBR), disciplinary proceedings were initiated against Muhammad Abid, a BS-20 IRS officer currently serving as Chief (Admin Pool), FBR Headquarters, Islamabad, and stationed in Sargodha. The proceedings began following an Inquiry Order, Charge Sheet, and Statement of Allegations issued on July 10, 2023, accusing the officer of â€œinefficiency.â€ The inquiry was led by Mir Badshah Khan Wazir (IRS/BS-21), who submitted his report on December 9, 2024. The report confirmed that the allegation of inefficiency was established and recommended a minor penaltyâ€”withholding the annual increment for two yearsâ€”under the Civil Servants (Efficiency & Discipline) Rules, 2020. Following the inquiry findings, a Show Cause Notice was issued to the officer on February 10, 2025, directing him to explain within 14 days why one or more penalties, including major penalties such as dismissal from service, should not be imposed. Muhammad Abid submitted his written response on August 13, 2025. The Prime Minister, as the competent authority, appointed Ms. Saadia Sadaf Gilani (IRS/BS-22), Chief Commissioner-IR, Corporate Tax Office Lahore, as the Hearing Officer. She provided the accused officer with a personal hearing on September 2, 2025. After reviewing the case file, inquiry findings, and hearing report, the Prime Minister endorsed the recommendation and ordered the withholding of increment for two years under Rule 4(2)(b) of the Civil Servants (E&D) Rules, 2020. In addition, the FBR has stated that the officerâ€™s performance allowance will be suspended for six months, after which he will be required to undergo a fresh evaluation to restore the allowance. The notification further states that Muhammad Abid retains the right to appeal before the Appellate Authority under the Civil Servants (Appeals) Rules, 1977 within 30 days of receiving the order.

Date: 2025-11-19

Details: Islamabad, November 19, 2025: The Federal Board of Revenue (FBR) on Wednesday reiterated strict action against tax officials attempting to use political or personal influence to secure choice postings, warning that such conduct constitutes serious misconduct under civil service rules. In a fresh circular, the FBR recalled an earlier directive issued on August 20, 2025, in which officers and officials were categorically instructed to refrain from exerting any external pressure for preferred postings. The circular noted that despite the warning, two officers â€” one in BS-18 and another in BS-19 â€” had been suspended for violating the instructions. FBR stated that many officers were on deputation in other ministries and may have missed the earlier notification, prompting the authority to reissue and reinforce the earlier guidelines. According to the reproduced instructions, the FBR described a â€œrampant sub-cultureâ€ of officials using influence to obtain favourable field positions, warning that such practices undermine the organizationâ€™s integrity and set a negative precedent for junior officers. The circular highlighted that using influence for postings is classified as misconduct under the Government Servants (Conduct) Rules, 1964, and the Civil Servants (E&D) Rules, 2020, both of which allow â€œremoval from serviceâ€ as a valid penalty. The directive referenced Rule 19 and Rule 29 of the Conduct Rules, relevant ESTACODE provisions, and Rule 2(1)(k) of the E&D Rules. FBR further cautioned that any future violation will lead to immediate suspension and disciplinary proceedings. However, the authority acknowledged that genuine hardship cases requiring a change of station may be considered if submitted with supporting documents through the prescribed email channel. The circular concluded that any attempt to seek transfers or postings through unapproved means will be treated as misconduct and dealt with strictly under the law.

Date: 2025-11-19

Details: Karachi, November 19, 2025: The Karachi Tax Bar Association (KTBA) on Wednesday raised concerns over a technical issue preventing builders and developers from downloading a PDF copy of their 2025 income tax returns filed via the FBRâ€™s IRIS portal. In a letter to Rashid Mahmood Langrial, Chairman of the Federal Board of Revenue (FBR), KTBA President Ali A. Rahim described a critical glitch affecting taxpayers in the construction and development sector. While returns for Tax Year 2025 were successfully submitted on time, users attempting to generate a printable PDF encounter an error message reading â€œNot a valid PDF.â€ This malfunction prevents both digital storage and physical printing of submitted returns. Rahim emphasized that a printable copy of the tax return is vital for multiple purposes, including securing bank financing, meeting regulatory compliance requirements, maintaining internal records, and providing proof of filing to potential business partners. The current issue, he noted, is causing unnecessary operational challenges for compliant taxpayers. The Finance Act 2024 introduced a new taxation framework for builders and developers through Section 7F of the Income Tax Ordinance, 2001, applicable from Tax Year 2025. KTBA believes the PDF generation error is specific to returns filed under this newly implemented section and likely requires a technical update or patch from the PRAL/FBR IT team. KTBA urged the FBR to intervene promptly, directing officials to identify and resolve the technical glitch to allow affected taxpayers to download and print their returns without disruption. Rahim concluded by appreciating the FBRâ€™s efforts in modernizing Pakistanâ€™s tax system and expressed KTBAâ€™s readiness to provide further assistance to facilitate smooth resolution of the issue, ensuring continued compliance and operational efficiency for builders and developers.

Date: 2025-11-19

Details: Karachi, November 19, 2025 â€“ In a groundbreaking move to clamp down on tax evasion, the Federal Board of Revenue (FBR) is rolling out high-tech video surveillance across retail outlets and manufacturing units, aiming to track sales, purchases, and production processes in real time. This initiative marks one of the most aggressive measures by the FBR to monitor the supply chain and enforce compliance. The FBR is now inviting applications from qualified software and IT companies to provide video surveillance systems, AI/ML-powered production monitoring solutions, and video analytics tools. Selected vendors will receive a three-year authorization under the Sales Tax Rules, 2006, allowing them to deploy advanced technology for electronic monitoring of goods listed in the Third Schedule of the Sales Tax Act, 1990, as well as any additional items notified by the FBR. Under the new system, all production lines will be linked to the FBRâ€™s Central Control Unit (CCU), enabling real-time monitoring of manufacturing processes. Key features include live video capture, object detection and counting, anomaly detection, and immediate reporting of production stoppages or irregularities. Production data will be securely transmitted, stored, and analyzed to ensure accurate tax assessment and prevent underreporting. The FBR emphasizes that this sophisticated monitoring will not only track production volumes but also provide quantitative insights for enforcement and legal action against defaulters. Industry analysts warn that retailers and manufacturers must now brace for unprecedented scrutiny, as AI-powered surveillance promises to tighten the net on tax evaders and reshape compliance standards across Pakistanâ€™s retail and manufacturing sectors. With this bold step, the FBR is leveraging cutting-edge technology to ensure transparency, enhance revenue collection, and modernize tax administration like never before.

Date: 2025-11-19

Details: Karachi, November 19, 2025 â€“ In a bold move signaling tighter scrutiny on Pakistanâ€™s business elite, the Federal Board of Revenue (FBR) has transferred the high-profile tax assessment case of the Karachi Chamber of Commerce and Industry (KCCI) to the Large Taxpayers Office (LTO) Karachi. This shift marks a significant step in the FBRâ€™s ongoing drive to streamline tax assessments and bolster revenue collection from major commercial entities. Previously, the KCCI tax matters were under the Corporate Tax Office (CTO), but the FBRâ€™s decision to assign the case to LTO Karachi â€“ the nationâ€™s largest and most powerful tax assessment and collection body â€“ underscores the importance of the case. LTO Karachi is known for handling companies with substantial turnovers and multi-million-rupees annual profits, making it the ideal authority for such high-stake evaluations. Insiders reveal that the LTO will now have the authority to meticulously assess KCCIâ€™s income statements, including financial scrutiny of its prominent members, who are among the countryâ€™s leading industrialists and traders. This move is expected to ensure more rigorous oversight and transparency in tax reporting. In a parallel development, the FBR has also transferred the tax assessment of the Pakistan Hosiery Manufacturers and Exporters Association from CTO Karachi to LTO Karachi. Experts say these jurisdictional changes reflect a strategic push by the FBR to identify loopholes, strengthen compliance, and enhance overall revenue collection. The transfer of these influential cases to LTO Karachi signals a clear message: the FBR is intensifying its focus on Pakistanâ€™s corporate giants, aiming to tighten tax governance, curb evasion, and reinforce accountability among the nationâ€™s top business players. This move is being closely watched by business circles and market analysts as a potential turning point in Pakistanâ€™s tax administration strategy.

Date: 2025-11-19

Details: Islamabad, November 19, 2025: The Federal Board of Revenue (FBR) on Wednesday reiterated strict action against tax officials attempting to use political or personal influence to secure choice postings, warning that such conduct constitutes serious misconduct under civil service rules. In a fresh circular, the FBR recalled an earlier directive issued on August 20, 2025, in which officers and officials were categorically instructed to refrain from exerting any external pressure for preferred postings. The circular noted that despite the warning, two officers â€” one in BS-18 and another in BS-19 â€” had been suspended for violating the instructions. FBR stated that many officers were on deputation in other ministries and may have missed the earlier notification, prompting the authority to reissue and reinforce the earlier guidelines. According to the reproduced instructions, the FBR described a â€œrampant sub-cultureâ€ of officials using influence to obtain favourable field positions, warning that such practices undermine the organizationâ€™s integrity and set a negative precedent for junior officers. The circular highlighted that using influence for postings is classified as misconduct under the Government Servants (Conduct) Rules, 1964, and the Civil Servants (E&D) Rules, 2020, both of which allow â€œremoval from serviceâ€ as a valid penalty. The directive referenced Rule 19 and Rule 29 of the Conduct Rules, relevant ESTACODE provisions, and Rule 2(1)(k) of the E&D Rules. FBR further cautioned that any future violation will lead to immediate suspension and disciplinary proceedings. However, the authority acknowledged that genuine hardship cases requiring a change of station may be considered if submitted with supporting documents through the prescribed email channel. The circular concluded that any attempt to seek transfers or postings through unapproved means will be treated as misconduct and dealt with strictly under the law.

Date: 2025-11-19

Details: Karachi, November 19, 2025: The Karachi Tax Bar Association (KTBA) on Wednesday raised concerns over a technical issue preventing builders and developers from downloading a PDF copy of their 2025 income tax returns filed via the FBRâ€™s IRIS portal. In a letter to Rashid Mahmood Langrial, Chairman of the Federal Board of Revenue (FBR), KTBA President Ali A. Rahim described a critical glitch affecting taxpayers in the construction and development sector. While returns for Tax Year 2025 were successfully submitted on time, users attempting to generate a printable PDF encounter an error message reading â€œNot a valid PDF.â€ This malfunction prevents both digital storage and physical printing of submitted returns. Rahim emphasized that a printable copy of the tax return is vital for multiple purposes, including securing bank financing, meeting regulatory compliance requirements, maintaining internal records, and providing proof of filing to potential business partners. The current issue, he noted, is causing unnecessary operational challenges for compliant taxpayers. The Finance Act 2024 introduced a new taxation framework for builders and developers through Section 7F of the Income Tax Ordinance, 2001, applicable from Tax Year 2025. KTBA believes the PDF generation error is specific to returns filed under this newly implemented section and likely requires a technical update or patch from the PRAL/FBR IT team. KTBA urged the FBR to intervene promptly, directing officials to identify and resolve the technical glitch to allow affected taxpayers to download and print their returns without disruption. Rahim concluded by appreciating the FBRâ€™s efforts in modernizing Pakistanâ€™s tax system and expressed KTBAâ€™s readiness to provide further assistance to facilitate smooth resolution of the issue, ensuring continued compliance and operational efficiency for builders and developers.

Date: 2025-11-19

Details: Karachi, November 19, 2025 â€“ In a bold move signaling tighter scrutiny on Pakistanâ€™s business elite, the Federal Board of Revenue (FBR) has transferred the high-profile tax assessment case of the Karachi Chamber of Commerce and Industry (KCCI) to the Large Taxpayers Office (LTO) Karachi. This shift marks a significant step in the FBRâ€™s ongoing drive to streamline tax assessments and bolster revenue collection from major commercial entities. Previously, the KCCI tax matters were under the Corporate Tax Office (CTO), but the FBRâ€™s decision to assign the case to LTO Karachi â€“ the nationâ€™s largest and most powerful tax assessment and collection body â€“ underscores the importance of the case. LTO Karachi is known for handling companies with substantial turnovers and multi-million-rupees annual profits, making it the ideal authority for such high-stake evaluations. Insiders reveal that the LTO will now have the authority to meticulously assess KCCIâ€™s income statements, including financial scrutiny of its prominent members, who are among the countryâ€™s leading industrialists and traders. This move is expected to ensure more rigorous oversight and transparency in tax reporting. In a parallel development, the FBR has also transferred the tax assessment of the Pakistan Hosiery Manufacturers and Exporters Association from CTO Karachi to LTO Karachi. Experts say these jurisdictional changes reflect a strategic push by the FBR to identify loopholes, strengthen compliance, and enhance overall revenue collection. The transfer of these influential cases to LTO Karachi signals a clear message: the FBR is intensifying its focus on Pakistanâ€™s corporate giants, aiming to tighten tax governance, curb evasion, and reinforce accountability among the nationâ€™s top business players. This move is being closely watched by business circles and market analysts as a potential turning point in Pakistanâ€™s tax administration strategy.

Date: 2025-11-18

Details: Recorder Report Published about 2 hours ago LAHORE: â€œAs much as 60 percent of Pakistanâ€™s total tax revenue comes from a single sector, the large-scale manufacturing sector. This highlighted the imbalance in the countryâ€™s tax system. The burden on this single sector is four times higher than on the rest of the economy, leaving it struggling to breathe. As a result, the manufacturing sector is moving in the negative rather than showing growth each year.â€ This was stated by former federal finance minister Dr Hafiz A Pasha during a speech at the Lahore Chamber of Commerce. LCCI President Faheem ur Rehman Saigol, Senior Vice President Tanveer Ahmed Sheikh, Vice President Khurram Lodhi, EC member Firdous Nasar, former EC member Mian Muhammad Nawaz, and others were also present on the occasion. Dr Pasha noted that Pakistan has several sectors with high income potential, such as agriculture, yet the tax revenue from these sectors remains minimal. Only one percent of landowners possess 22 percent of the best agricultural land, but the revenue collected from the agriculture sector is negligible. Following IMF directives, the government has estimated just PKR 4 billion in tax collection from the agriculture sector next year â€” extremely low compared to PKR 4,500 billion collected from the manufacturing sector. He added that investment in Pakistan has sharply declined. Today, investment in the large-scale manufacturing sector is much lower than it was 25 years ago. The biggest concern is that the depreciating capital stock is not being replenished, which hampers the sustainable growth of the manufacturing sector. Saigol said that Pakistan has not properly utilized its economic potential. The challenges the country faces today are not caused by external factors but by poor policies and governance. He noted that while China and India followed the economic model of the 1960s and achieved growth, Pakistan fell behind. Over the past four months, the countryâ€™s trade deficit crossed USD 10 billion. LCCI president further highlighted that Pakistan has yet to establish a single SME zone, while developed countries have relied on SMEs as the backbone of their growth. Every year, millions of young graduates enter the market but remain unemployed. â€œProviding them with skills and sending them abroad could significantly increase remittances.â€ Dr Pasha also emphasized that the export sector and large-scale manufacturing are the backbone of Pakistanâ€™s economy, whereas real estate â€” a non-productive sector â€” continues to attract the highest investment. He added that revenue collection from property is just 0.2 percent, 12 times lower than that from the industrial sector. He warned that Pakistan currently has 2.1 million unemployed youth, 2.6 million children out of school, and 22 percent of the workforce without employment â€” the highest unemployment rate in the countryâ€™s history. Additionally, only six percent of bank credit is available for 3 million small units, while the 80 percent is provided to the government by banks. Copyright Business Recorder, 2025

Date: 2025-11-18

Details: Written by Shahnawaz Akhter Islamabad, November 18, 2025 â€“ The Federal Board of Revenue (FBR) has released a detailed draft of the insurance guarantee format required under Pakistanâ€™s Export Facilitation Scheme (EFS), originally notified through SRO 957(I)/2021. The proposed format outlines the structure, conditions, and responsibilities of insurance companies, exporters, and customs authorities regarding guarantees issued for duty- and tax-free import of inputs and capital goods. According to the draft, insurance companies will be required to issue irrevocable and unconditional guarantees on behalf of exporters in favour of the FBR. These guarantees will support compliance with the EFSâ€”allowing exporters to import raw materials and machinery without upfront payment of duties and taxes, provided they meet all obligations under the scheme. The FBR notes that exporters availing the EFS must furnish financial security sufficient to cover all potential liabilities, including customs duties, taxes, surcharges, fines, penalties, or any other charges that may arise from non-compliance. The guarantee ensures that, in the event of default or breach by an exporter, the FBR can recover the full amount without delay. Under the proposed format, the guarantor insurance company must assume primary liability, acting beyond the role of a traditional surety. Once the FBR issues a written demand, the insurer will be obligated to pay the guaranteed amount immediatelyâ€”without raising objections, seeking verification from the exporter, or invoking legal delays. The FBRâ€™s declaration of non-compliance will be considered final and binding. The draft outlines several key features of the guarantee: â€¢ It must be independent, unconditional, and enforceable on the first written demand from the customs authority. â€¢ The maximum liability will be capped at the amount stated in the guarantee. â€¢ Payments must be made promptly in Pakistani Rupees without any set-off or counterclaim. â€¢ Multiple demands may be raised during the validity period until the full guaranteed sum is exhausted. â€¢ Guarantors must maintain sufficient collateral and comply with the Credit and Suretyship (Conduct of Business) Rules, 2018, including exposure limits prescribed by SECP. The guarantee will remain enforceable regardless of legal disputes, extensions granted to exporters, changes in business ownership, or amendments to the scheme. Insurance companies issuing such guarantees must also hold an eligible PACRA credit rating of AAA (ifs) or AA+ (ifs) at the time of issuance. The draft further clarifies that all obligations of the guarantor will be governed exclusively under Pakistanâ€™s laws, and any disputes will fall under the jurisdiction defined in the Customs Act, 1969. The FBR is expected to finalize the guarantee format after receiving stakeholder feedback. The new framework aims to strengthen compliance under the Export Facilitation Scheme while supporting exporters through a more structured and transparent risk-mitigation mechanism.

Date: 2025-11-17

Details: Written by Shahnawaz Akhter Islamabad, November 17, 2025 â€“ In a significant move to enhance supply chain security and mitigate elevated security risks, Pakistan has mandated 100% Non-Intrusive Inspection (NII) scanning for all consignments under the Afghan Transit Trade (ATT) regime. The Federal Board of Revenue (FBR) released an official document confirming that all ATT containers must undergo mandatory X-ray or Gamma-ray scanning at both the designated Port of Entry and the Port/Border of Exit. The Double-Scanning Protocol: Cornerstone of Security To ensure the integrity of the international supply chain, the FBR has implemented a stringent double-scanning protocol, supported by the World Customs Organization (WCO) Transit Guidelines: â€¢ Scan A (Entry Scan): Conducted at the first point of entry into the Customs territory. This scan establishes the crucial baseline image and records the seal integrity. â€¢ Scan B (Exit Scan): Performed immediately before the container clears the Customs territory. This scan enables a crucial image comparison and audit against Scan A. AI-Enabled Image Matching The new protocol makes the matching of images captured at the entry and exit points mandatory. The FBR document states that this comparison will preferably be conducted using an AI-enabled algorithm to ensure accuracy and speed. The NII Image Comparison Protocol is the cornerstone of security for ATT movements: 1. Data Linkage: The Central Image Repository system automatically links and presents Scan A (Entry) and Scan B (Exit), along with the container seal and electronic Goods Declaration (GD), to the control room/RIAC Analyst if any discrepancy is detected. 2. Comparative Analysis: The Analyst conducts a rigorous examination focusing on four critical security factors to detect evidence of compromise: o Volumetric Consistency o Density Discrepancy o Structural Integrity (Tampering) o Object Substitution/Addition Action Required in Case of Security Breach A conclusive image mismatch constitutes prima facie evidence of a security breach (pilferage, tampering, or substitution), demanding immediate intervention: 1. Formal Declaration: The control room/RIAC Analyst issues an immediate alert, formally declaring the container as a Contravening Unit in the WeBOC/PCS system, which automatically places the cargo under HOLD. 2. Mandatory Physical Examination: A 100% Physical Examination must be conducted on the identified mismatch cargo. The examination team will use the RIAC analysis report to target specific coordinates of the mismatch for efficient intervention. 3. Definitive Evidence: All examinations must be recorded via a Body-Worn Camera (BWC). Scan A, Scan B, and the BWC footage will constitute the definitive evidence chain for criminal prosecution and penalty imposition, aligning with international Customs best practices.

Date: 2025-11-17

Details: Written by Shahnawaz Akhter Karachi, November 17, 2025 â€“ The Federal Board of Revenue (FBR) has issued a detailed Standard Operating Procedure (SOP) governing X-ray and Gamma-ray scanning of cargo containers at ports and terminals across Pakistan. The new procedure aims to strengthen border security while ensuring that goods are examined without damaging container integrity. Clear Objective and Mandate According to FBR, the newly notified SOP establishes a transparent, uniform, and internationally aligned framework for Non-Intrusive Inspection (NII) systems operated by terminal operators. The procedures are designed to improve trade facilitation, accelerate cargo clearance, reduce dwell time, and support revenue collection. A key feature of the policy is the integration of high-quality scanning images into the Customs Risk Management System (RMS), enabling more accurate assessments and audit processes. The SOP is also aligned with the World Customs Organizationâ€™s SAFE Framework of Standards. Scope and Application The revised SOP applies to all container-based NII scanning facilities at ports, terminals and border points throughout the country. It mandates that all relevant Customs departments â€” including Assessment, Post-Clearance Audit, Enforcement, and Intelligence & Risk Management (IRM) â€” must follow the updated standards when handling scanning data or conducting physical inspections. Legal and International Compliance FBR has structured the SOP under the provisions of the Customs Act, 1969, embedding global best practices from the WCO SAFE Framework and WCO guidelines for procurement and deployment of NII equipment. The emphasis remains on a risk-based approach to streamline legitimate trade while improving national security. Scanning Threshold and Risk Management The SOP introduces strict guidelines for the percentage of cargo that may be scanned: 1. General Threshold for Routine Scanning To prevent delays and ensure smooth cargo flow, the total number of risk-based import and export containers selected for scanning cannot exceed 30% of the previous fiscal yearâ€™s manifested container volume at any terminal. Container selection will be fully automated through the Customs RMS. 2. Mandatory 100% Scanning for Afghan Transit Trade (ATT) Recognizing the elevated security risks associated with international transit cargo, FBR has made 100% scanning mandatory for all Afghan Transit Trade containers. Scanning must occur at both the port of entry and the port or border of exit. Additionally, images taken at both points must be matched, preferably using AI-enabled verification algorithms, to ensure cargo integrity throughout the transit route.

Date: 2025-11-16

Details: Written by Shahnawaz Akhter Karachi, November 16, 2025 â€” The Federal Board of Revenue (FBR) is moving toward strict enforcement of penal provisions against withholding agents who fail to provide complete information about individuals involved in major financial transactions. The tax authority aims to strengthen documentation and identify potential taxpayers who remain outside the tax net. Why Withholding Agents Are Under Scrutiny According to FBR insiders, withholding agentsâ€”who collect or deduct income tax from buyers and sellersâ€”must now ensure the complete submission of transaction details. This includes the identity and particulars of individuals involved in purchases, sales, or other taxable dealings. Officials told PkRevenue that accurate and timely data is crucial for Pakistanâ€™s tax-broadening initiative. Non-compliance will now trigger significant penalties. Penalty Structure Under Income Tax Ordinance 2001 The following table breaks down penalties under Sections 165, 165A, 165B, and 165C for failure to submit required statements on time: Penalties for Non-Submission of Statements Condition Penalty Amount Statement filed within 90 days AND tax already paid within due date Rs 50,000 Statement filed after 90 days OR tax not paid in due date Rs 2,500 per day, minimum Rs 10,000 If no tax was required to be collected/deducted during the period Minimum Rs 10,000 What This Means for Businesses Withholding agents must now take additional precautions: Key Compliance Requirements â€¢ Collect full details of buyers or sellers involved in taxable transactions. â€¢ Submit statements under relevant IT Ordinance sections before due dates. â€¢ Ensure deducted/collected tax is deposited on time. Failure to meet these obligations may result in daily accumulating penalties, creating substantial financial exposure. Why FBR Is Tightening Enforcement The FBR believes that gaps in reporting by withholding agents are a major hurdle in identifying non-filers and documenting the economy. By enforcing penalties, the authority intends to: â€¢ Expand the tax net â€¢ Improve transparency â€¢ Track large unreported transactions â€¢ Increase revenue through compliance rather than rate hikes Disclaimer: This news article is based on information obtained from publicly available sources and insights shared by relevant officials. It is intended for informational purposes only and should not be considered tax advice or a substitute for professional guidance. Readers are encouraged to consult qualified tax professionals or refer to the official.

Date: 2025-11-16

Details: Written by Shahnawaz Akhter Karachi, November 16, 2025 â€” The Federal Board of Revenue (FBR) is moving toward strict enforcement of penal provisions against withholding agents who fail to provide complete information about individuals involved in major financial transactions. The tax authority aims to strengthen documentation and identify potential taxpayers who remain outside the tax net. Why Withholding Agents Are Under Scrutiny According to FBR insiders, withholding agentsâ€”who collect or deduct income tax from buyers and sellersâ€”must now ensure the complete submission of transaction details. This includes the identity and particulars of individuals involved in purchases, sales, or other taxable dealings. Officials told PkRevenue that accurate and timely data is crucial for Pakistanâ€™s tax-broadening initiative. Non-compliance will now trigger significant penalties. Penalty Structure Under Income Tax Ordinance 2001 The following table breaks down penalties under Sections 165, 165A, 165B, and 165C for failure to submit required statements on time: Penalties for Non-Submission of Statements Condition Penalty Amount Statement filed within 90 days AND tax already paid within due date Rs 50,000 Statement filed after 90 days OR tax not paid in due date Rs 2,500 per day, minimum Rs 10,000 If no tax was required to be collected/deducted during the period Minimum Rs 10,000 What This Means for Businesses Withholding agents must now take additional precautions: Key Compliance Requirements â€¢ Collect full details of buyers or sellers involved in taxable transactions. â€¢ Submit statements under relevant IT Ordinance sections before due dates. â€¢ Ensure deducted/collected tax is deposited on time. Failure to meet these obligations may result in daily accumulating penalties, creating substantial financial exposure. Why FBR Is Tightening Enforcement The FBR believes that gaps in reporting by withholding agents are a major hurdle in identifying non-filers and documenting the economy. By enforcing penalties, the authority intends to: â€¢ Expand the tax net â€¢ Improve transparency â€¢ Track large unreported transactions â€¢ Increase revenue through compliance rather than rate hikes Disclaimer: This news article is based on information obtained from publicly available sources and insights shared by relevant officials. It is intended for informational purposes only and should not be considered tax advice or a substitute for professional guidance. Readers are encouraged to consult qualified tax professionals or refer to the official.

Date: 2025-11-14

Details: Karachi, November 14, 2025 â€“ The Federal Board of Revenue (FBR) has imposed a major penalty on a Pakistan Customs appraising officer after he was found guilty of facilitating misdeclaration that benefitted importers and caused significant revenue loss to the national exchequer. According to an official notification, disciplinary proceedings were initiated against Amjad Hussain Jagirani, Appraising Officer (BS-16), posted at the Collectorate of Customs Appraisement (West), Karachi. The proceedings were launched under charges of inefficiency and misconduct, along with an allegation of corruption. The FBR served the charge sheet and statement of allegations on January 17, 2025, appointing Tausif Aman Gurchani (PCS/BS-19) as the Inquiry Officer. After a detailed inquiry, the officer submitted his findings on August 29, 2025, confirming the charges of inefficiency and misconduct, although the corruption charge could not be substantiated. The inquiry report recommended a major penalty of reduction to a lower post and pay scale for three years. A show-cause notice was subsequently issued on September 15, 2025, to which the accused officer submitted his written reply on October 8, denying wrongdoing. He was also granted a personal hearing on November 6, 2025. During the hearing, the Departmental Representative briefed the Authority that a re-examination of GD No. KAPW-HC-52933-03-10-2024 revealed major discrepancies in the consignment earlier examined by the accused officer. These discrepancies had led to duty and tax evasion amounting to Rs7.2 million, which was later recovered. Despite the officerâ€™s explanation that the oversight occurred due to heavy workload, the Authority observed that his examination report contained incorrect descriptions, specifications, and weight details of imported pipes, enabling an incorrect assessment in favor of the importer. After reviewing documentary evidence, inquiry findings, and submissions from both sides, the Member (Admn/HR), FBR, ruled that the charges stood proven. The penalty of reduction to a lower post and pay scale for three years has been enforced immediately. Additionally, the officerâ€™s suspension period from December 6, 2024, to date will be treated as leave under the Revised Leave Rules, 1980. His performance allowance has also been stopped for one year under the Guidelines for Performance Allowance 2015, and he will be required to reappear for eligibility. The officer retains the right to appeal this order before the Appellate Authority within 30 days of receiving the notification.

Date: 2025-11-09

Details: Islamabad, November 7, 2025 â€” Pakistanis are bracing for yet another financial hit as the federal government plans a sharp increase in the petroleum levy over the next five years â€” a move designed to meet IMF-backed revenue targets but likely to further strain consumers already battling inflation. According to official documents, the government aims to raise petroleum levy collection from Rs1.22 trillion in FY2024-25 to a staggering Rs1.96 trillion by FY2029-30 â€” an increase of Rs740 billion. The plan was developed in consultation with the International Monetary Fund (IMF) as part of Pakistanâ€™s long-term fiscal reform agenda. ðŸ’° A steady climb in collections: The petroleum levy, classified as non-tax revenue, has become a key revenue source for the government. Data shows that collection under this head was Rs294 billion in FY2019-20, crossing the Rs1 trillion mark for the first time in FY2023-24, when the government collected Rs1.019 trillion. ðŸ“‰ Sales tax relief, but no real ease for citizens Although the government has kept sales tax exemptions on petroleum products and claimed it helps control inflation, the growing petroleum levy continues to hit consumers directly through fuel prices. The Federal Board of Revenue (FBR) also excluded this exemption from its tax expenditure report for 2023-24, arguing that the levy already substitutes sales tax. â€œIn FY2022-23, sales tax exemption on POL products was not treated as an expenditure since consumers were already paying the Petroleum Development Levy (PDL),â€ the FBR clarified in its report. âš™ What it means for the public Experts warn that this steady rise in the levy will likely increase fuel costs, pushing up transportation and commodity prices, and further inflating the cost of living. For everyday citizens, the so-called â€œnon-tax revenueâ€ is already feeling like a heavy tax burden in disguise.

Date: 2025-10-31

Details: Islamabad, October 31, 2025 â€“ In a major breakthrough for Pakistanâ€™s digital tax enforcement, the Federal Board of Revenue (FBR) has identified over 200 corporate cases through an Artificial Intelligence (AI)-driven audit selection system, marking a milestone in the countryâ€™s tax modernization drive. According to an official report, the initiative is part of FBRâ€™s sweeping reform agenda led by the Transformation Delivery Unit (TDU) â€” established in October 2024 to drive innovation, transparency, and efficiency across the taxation ecosystem. AI-Driven Audit Revolutionizes Tax Monitoring The FBR confirmed that its newly deployed AI-powered audit tool for corporate sales and income tax has already flagged cases valued at PKR 13.3 billion, signaling a data-driven shift in how tax irregularities are detected and addressed. Officials said the system uses predictive analytics, machine learning models, and cross-database matching to automatically select high-risk corporate entities for audit â€” eliminating human bias and significantly reducing collusion risk. â€œThe AI audit engine is enabling smarter, faster, and fairer detection of tax discrepancies,â€ an FBR spokesperson said, adding that the system is part of a broader digital enforcement framework designed to improve compliance and revenue integrity. Early Reforms Yield Tangible Results The FBRâ€™s Transformation Delivery Unit (TDU) has already delivered impressive outcomes under its reform strategy: â€¢ 47% rise in tax collection from the sugar sector (PKR 12.4 billion increase) between December 2024 and February 2025. â€¢ PKR 9.8 billion in fraudulent sales tax claims blocked through advanced data analytics. â€¢ Faceless assessment introduced to curb importer-officer collusion, cutting average clearance time by 80% and lifting revenue collection by 13%. â€¢ Full POS integration completed for restaurants across all four provinces, enhancing digital transparency and real-time reporting. Structural Overhaul and Digital Empowerment To further strengthen oversight, the FBR has restructured the Directorate of Intelligence, trimming officer strength from 563 to 100, while establishing a new PRAL Board â€” the digital backbone of the FBR â€” to accelerate the rollout of advanced analytics and AI applications. â€œThe results show how digital transformation and AI can reshape Pakistanâ€™s tax system,â€ said a senior tax official. â€œThis is just the beginning of a smarter, data-driven compliance era.â€ Experts believe the successful AI audit deployment could redefine corporate accountability in Pakistan, paving the way for automated, corruption-free auditing and record tax recovery in fiscal year 2026.

Date: 2025-10-31

Details: Karachi, October 31, 2025 â€“ Mounting pressure from tax professionals and widespread outrage over persistent glitches in the Federal Board of Revenueâ€™s (FBR) online return filing system, IRIS, have fueled strong speculation that the government may soon announce a third extension in the income tax return filing deadline for Tax Year 2025. The FBR had already pushed the original deadline from September 30 to October 15, and then again to October 31, following repeated system crashes and technical disruptions that disabled taxpayersâ€™ ability to file returns smoothly. However, tax bars across the country say the portal remains unstable, calling the situation a â€œnational compliance crisis.â€ This week, the Karachi Tax Bar Association (KTBA) and the Lahore Tax Bar Association (LTBA) issued strong statements urging the FBR â€” and even the Prime Minister â€” to intervene before the deadline expires tonight. KTBAâ€™s Strong Rebuke to FBR In a detailed letter addressed to FBR Chairman Rashid Mehmood Langrial, KTBA President Ali A. Rahim warned that the repeated backend disruptions and unannounced system updates have â€œshaken taxpayersâ€™ confidenceâ€ and made timely compliance nearly impossible. He appreciated the FBRâ€™s recent decision to form a high-level committee (via Office Order dated October 28) to diagnose and fix the IRIS issues but criticized the timing of system updates, including one as recent as October 27, calling them â€œchaotic and counterproductive during peak filing season.â€ â€œTaxpayers deserve stability and fairness,â€ Rahim said, demanding a reasonable extension to allow for accurate and confident filing once the system is fully restored. LTBA Appeals Directly to Prime Minister In an unprecedented move, the Lahore Tax Bar Association has written directly to Prime Minister Shehbaz Sharif, urging him to extend the filing deadline to November 30, 2025, citing â€œserious system flawsâ€ and â€œlegal violationsâ€ that have left taxpayers stranded. LTBA President Muhammad Asif Rana highlighted major issues, including: â€¢ Wrong tax credit calculations under Section 4AB (super tax) on exempt income. â€¢ Faulty apportionment of taxes under the minimum tax regime. â€¢ Misapplication of Section 151 instead of Section 7B on profit-on-debt income. â€¢ Failure to publish the manual return form, as required by law. Rana further revealed that the final return form was released 219 days late, violating statutory timelines and reducing the filing window by 49 days, a delay that, he said, â€œjustifies an automatic extension.â€ Mounting Pressure and Possible Third Extension Legal experts warn that if the FBR fails to act, it could face a flood of litigation from frustrated taxpayers. Both KTBA and LTBA have emphasized that the chaos not only threatens compliance but also risks undermining public trust in Pakistanâ€™s digital tax framework. As the clock ticks toward the October 31 deadline, the government faces mounting pressure to step in. Sources close to the matter indicate that a third extension â€” possibly until November 30 â€” is now â€œunder serious consideration.â€ If approved, the move would come as a major relief for millions of taxpayers struggling to navigate what many are calling the most turbulent tax filing season in recent memory.

Date: 2025-10-30

Details: Islamabad, October 29, 2025 â€“ In a major fiscal milestone, the Federal Board of Revenue (FBR) announced on Wednesday that Pakistanâ€™s tax-to-GDP ratio surged to 10.3% in the fiscal year 2024â€“25 â€” breaking a decade-long stagnation that averaged just 8.7%. According to the FBRâ€™s Annual Report for FY 2024â€“25, the countryâ€™s total revenue collection reached an impressive Rs. 11,744.3 billion, compared to Rs. 9,299.1 billion in the previous year, reflecting a robust 26.3% growth and an increase of nearly Rs. 2.4 trillion in just one year. The report credited this improvement to â€œstrategic policy reforms, strict administrative oversight, and enhanced audit enforcement,â€ marking a significant turnaround in the countryâ€™s fiscal landscape. Despite sluggish performance in major economic sectors, the FBR maintained strong momentum in tax collection across all four major revenue heads â€” income tax, sales tax, federal excise duty, and customs duty. The data also revealed a remarkable shift toward direct taxation. From FY 2015â€“16 to FY 2020â€“21, the average ratio of direct to indirect taxes stood at 38:62. However, with focused reforms targeting high-income earners, the share of direct taxes jumped from 37.2% in FY 2021â€“22 to 49.3% in FY 2024â€“25, signaling a fairer and more progressive tax regime. Notably, collection out of demandâ€”a key indicator of audit effectivenessâ€”rose by 110.3%, while income tax revenue from registered taxpayers surged 37.1% year-on-year, underscoring better compliance and enforcement. In the domestic sales tax category, the automobile sector led the growth, with tax collections soaring by 158.8% from motor cars and 136.2% from motorbikes, reflecting expanding consumer activity and improved reporting. The FBR said it remains committed to strengthening tax compliance, broadening the tax base, and sustaining growth momentum to further enhance Pakistanâ€™s fiscal stability.

Date: 2025-10-30

Details: Karachi, October 30, 2025 â€“ In a strong appeal to the Federal Board of Revenue (FBR), the Karachi Tax Bar Association (KTBA) has demanded an immediate extension in the income tax return filing deadline for Tax Year 2025, citing widespread technical glitches and instability in the IRIS online filing portal. In a detailed letter addressed to FBR Chairman Rashid Mehmood Langrial on Thursday, KTBA President Ali A. Rahim voiced serious concern over the recurring errors and backend disruptions on the IRIS platform, which have severely hampered taxpayersâ€™ ability to submit returns smoothly. The filing of return for tax year 2025 is expiring on October 31, which was extended by the FBR from September 30 and then October 15. Rahim lauded the FBRâ€™s recent decision to form a dedicated committee (via Office Order dated October 28, 2025) to identify and fix system flaws. He termed the initiative a â€œwelcome and constructive step,â€ emphasizing that it reflects FBRâ€™s willingness to engage in a consultative process with tax professionals. However, Rahim warned that frequent and unannounced system updates, including one as recent as October 27, 2025, were creating chaos for taxpayers. â€œSuch abrupt backend modifications during peak filing season cause confusion, disrupt workflows, and undermine confidence in the systemâ€™s stability,â€ he cautioned. The KTBA urged the tax authority to grant a reasonable extension for return filing, allowing taxpayers sufficient time to comply once the portal issues are fully resolved. â€œIt would be only fair and proper to give taxpayers adequate time to file returns confidently and accurately,â€ Rahim added. The association also attached a comprehensive summary of technical problems encountered on the portal over the past two months, reiterating its commitment to collaborate with FBR for a long-term fix.

Date: 2025-10-29

Details: ISLAMABAD: Pakistanâ€™s income tax collection surged to a record Rs 5.83 trillion in fiscal year 2024â€“25, up sharply from Rs 4.57 trillion a year earlier â€” but the historic jump has triggered public resentment and debate over fairness in taxation, as both salaried individuals and the business community complain of a rising burden. This was stated by Gohar Ejaz, chairman of the Economic Policy and Business Development (EPBD), a think tank monitoring the overall economy and taxation matters. According to official figures shared by Ejaz, the government attributes the unprecedented rise to improved compliance and a broadened tax base. However, economists and taxpayers warn that the increase has come at the cost of uneven pressure on wage earners and formal businesses, while large segments of the informal economy remain untaxed. Over 70 percent of the direct taxes collection comes from withholding taxes (WHT), which are collected in an indirect mode (sales tax mode). The WHT is wrongly classified under the head of direct taxes, he said. Out of the total collection, Rs 575 billion came from salaried individuals, up from Rs 364 billion in fiscal year 2023â€“24 â€” a surge of over 57 percent, making the salaried class one of the hardest-hit segments. In comparison, the business sector â€” comprising corporations, private limited firms, banks, foreign companies, small enterprises, and Associations of Persons (AOPs) â€” collectively contributed nearly Rs 5.3 trillion, compared to Rs 4.1 trillion a year earlier. Within this, private limited companies led the pack, paying Rs 1.36 trillion, followed by banking companies at Rs 930 billion, listed firms at Rs 867 billion, and AOPs at Rs 214 billion. Other individuals outside the salaried category contributed Rs 1.12 trillion. Despite the higher inflows, critics say the tax system remains heavily tilted toward compliant sectors, warning of long-term economic distortion and fatigue among taxpayers. Calls are growing for a more balanced and sustainable tax framework, particularly as the government projects that Pakistanâ€™s total tax-to-GDP ratio â€” including direct, indirect, petroleum levy, and provincial taxes â€” will cross 15 percent in FY 2025â€“26 for the first time in decades. He cautions that without structural reforms to bring untaxed sectors into the net, the governmentâ€™s revenue drive risks undermining economic confidence and growth, even as it delivers record collections on paper.

Date: 2025-10-29

Details: ISLAMABAD: The Federal Board of Revenue (FBR) has strongly advised taxpayers to avoid setting passwords that are easy to predict, such as those containing their name or date of birth. In a clarification issued on Tuesday, the FBR stated that all critical servers and data storage facilities of the FBR are equipped with advanced Endpoint Detection and Response (EDR) solutions and multi-factor authentication mechanisms. The FBR further cautioned that despite all the above-mentioned security features and mechanisms in place, taxpayers are strongly advised, in their own interest, to avoid setting passwords that are easy to predict, such as those containing their name or date of birth. They are also advised to use multiple combinations of alphanumeric and special key combination of passwords, avoid setting the same password across multiple platforms, and to keep their passwords secure as no security system can detect the theft of a password or misuse of a stolen passwords. It has been observed that in multiple print and electronic media outlets, a misleading news is circulating regarding the alleged vulnerability of FBRâ€™s IT system, wrongly claiming that the entire system has collapsed and is under the complete control of cybercriminals. FBR categorically denies such reports and the incorrect interpretation of the order issued by the Federal Tax Ombudsman. To set the record straight and to inform the general public, it is clarified that in the cited case, the password of the complainant was in the custody of the taxpayer, and the misuse of that password occurred due to a security lapse on the part of the taxpayer, not the IT system of FBR. The password was misused while in the possession of the taxpayer, and not obtained from the FBR database. It is also pertinent to mention that the discrepancy was first detected by FBRâ€™s own Intelligence and Investigation Wing due to the irregular filing pattern of the taxpayer. It is further clarified that a comprehensive overhaul of the security processes of the IT system was carried out in December 2024. The IT infrastructure of FBR operates under state-of-the-art Security Information and Event Management (SIEM) and Security Orchestration, Automation, and Response (SOAR) systems. All critical servers and data storage facilities are equipped with advanced Endpoint Detection and Response (EDR) solutions and multi-factor authentication mechanisms. In addition, highly advanced logging mechanisms have been deployed, which make it impossible to access the system through any backchannel or make any changes to the core data of FBR without the generation of log in the system. In this regard, a complete third-party security audit of FBRâ€™s IT system was conducted between January and February 2025, and all critical vulnerabilities have already been patched. A key workflow modification was introduced in May 2025, which generated a QR code-based authentication that was temporarily discontinued following requests received from tax bar associations, the FBR added.

Date: 2025-10-29

Details: Islamabad, October 29, 2025 â€“ The Federal Board of Revenue (FBR) has officially launched a comprehensive video surveillance and monitoring system for the sugar industry to enhance transparency, prevent tax evasion, and ensure accurate revenue collection. According to the Sales Tax General Order (STGO) No. 06 of 2025, the initiative is being implemented under Section 40C (2) of the Sales Tax Act, 1990, which empowers the FBR to introduce electronic or video-based monitoring across notified manufacturing sectors. This move marks a major step toward digital transformation and transparency in Pakistanâ€™s sugar sector. The FBR has directed that no sugar mill will be allowed to remove its production from business premises before it undergoes video-based production monitoring. The new system must be installed and operational before the upcoming sugar crushing season begins. To comply with the monitoring framework, sugar mills are required to procure and install Production Monitoring Equipment (PME) with advanced technical specifications. These include high-performance Graphical Processing Units (GPUs) from NVIDIA, AMD, Intel, or Huawei, with a minimum of 10,000 CUDA cores or equivalent, 16â€“24 GB of memory, and a boost clock speed of at least 2 GHz. Similarly, the Central Processing Units (CPUs) must be on par with AMD Ryzen 9 7950x or equivalent, featuring 16 cores and 32 threads, along with 32 GB DDR5 RAM, and 2x1TB SSD (RAID 1) for storage. Industrial-grade PoE switches with a minimum of 16 ports and IP67 standards have also been made mandatory. All monitoring equipment must allow seamless video analytics and integration with the FBRâ€™s centralized Digital Eye System under Rule 150ZQS of the Sales Tax Rules, 2006. This initiative is part of FBRâ€™s broader digital enforcement strategy to ensure real-time tracking, reduce tax evasion, and strengthen fiscal compliance within Pakistanâ€™s sugar manufacturing industry.

Date: 2025-10-28

Details: Islamabad, October 28, 2025 â€“ The Federal Board of Revenue (FBR) on Tuesday strongly denied reports suggesting a cyber breach of its IT infrastructure, asserting that the Federal Tax Ombudsmanâ€™s (FTO) order regarding cyber-security had been misinterpreted by media outlets. In a detailed press release, the FBR categorically rejected â€œmisleading and exaggeratedâ€ claims circulating in print and electronic media, which alleged that its entire digital system had collapsed or fallen under cybercriminal control. â€œFBR categorically denies such reports and the incorrect interpretation of the order issued by the Federal Tax Ombudsman,â€ the statement emphasized, reaffirming that the organizationâ€™s IT framework remains secure and fully functional. To clarify the situation, the FBR explained that the incident cited in the FTO order was related to a specific taxpayer case where the complainantâ€™s password was misused while in their own custodyâ€”not extracted from FBRâ€™s database. The security lapse occurred at the taxpayerâ€™s end, not within the tax authorityâ€™s systems. According to FBR, the misuse was initially detected by its Intelligence and Investigation Wing after identifying irregular filing patterns, underscoring the agencyâ€™s active monitoring and internal controls. The board also highlighted that it had undertaken a comprehensive security overhaul in December 2024, upgrading to state-of-the-art Security Information and Event Management (SIEM) and Security Orchestration, Automation, and Response (SOAR) systems. These frameworks continuously monitor, detect, and neutralize potential threats. Furthermore, FBR noted that all critical servers and databases are protected by Endpoint Detection and Response (EDR) solutions, multi-factor authentication, and advanced logging mechanisms, making it virtually impossible for unauthorized access or data manipulation without traceable activity logs. A third-party cyber-security audit was also completed between January and February 2025, during which all identified vulnerabilities were patched. Additionally, in May 2025, the FBR introduced a QR code-based authentication mechanismâ€”temporarily suspended at the request of tax bar associations to improve user accessibility. Despite robust protections, the FBR urged taxpayers to adopt stronger password practices, warning that even the most advanced systems cannot prevent the misuse of credentials if passwords are weak or shared. Users are advised to: â€¢ Avoid passwords containing personal details such as names or birthdates, â€¢ Use alphanumeric and special character combinations, â€¢ Refrain from using the same password across multiple platforms, and â€¢ Keep credentials strictly confidential. Reiterating its commitment to cyber resilience, the FBR assured that Pakistanâ€™s tax data remains fully secure, adding that misleading interpretations of official orders only serve to spread unnecessary panic and misinformation among taxpayers.

Date: 2025-10-28

Details: Lahore, October 28, 2025 â€“ Mounting frustration over persistent technical glitches in the Federal Board of Revenueâ€™s (FBR) IRIS portal has pushed the Lahore Tax Bar Association (LTBA) to take an unprecedented step â€” appealing directly to Prime Minister Muhammad Shehbaz Sharif for intervention. In a strongly worded letter issued on Tuesday, LTBA President Muhammad Asif Rana urged the Prime Minister to extend the return filing deadline for tax year 2025 to November 30, citing â€œserious system flawsâ€ that have paralyzed taxpayersâ€™ ability to comply before the October 31 cutoff. Rana emphasized that despite the FBRâ€™s earlier extension via Circular No. 05 dated October 15, 2025, several critical errors and procedural inconsistencies still remain unresolved, leading to erroneous tax computations, incomplete filings, and system crashes on the IRIS platform. Key Technical and Legal Issues Highlighted by LTBA 1. Incorrect Application of Tax Credit and Section 4AB: The FBRâ€™s system is wrongly calculating tax on exempt income from an Association of Persons (AOP), despite Section 92 of the Income Tax Ordinance, 2001 clearly exempting such income. Furthermore, the system is inappropriately applying Section 4AB (10% super tax) on exempt income â€” an error that contradicts the law and has triggered thousands of erroneous tax demands. 2. Apportionment in Minimum Tax Regime: The LTBA pointed out that the IRIS portal is apportioning taxes incorrectly, even in cases where the minimum tax regime applies â€” a concept only meant for the final tax regime. This malfunction has caused unjustified tax liabilities and confusion among filers. 3. Misapplication of Tax on Profit on Debt (Section 151): The system is illegally applying Section 151 instead of Section 7B, resulting in over-taxation on profit on debt. The LTBA noted this violates Sections 7B, 8, 168, and 169(2)(e) of the Income Tax Ordinance, creating widespread financial discrepancies. 4. Failure to Notify Manual Return Form: Under Rule 73(2DD) of the Income Tax Rules, 2002, the manual (paper-based) return form was required to be published â€” yet, the FBR has failed to notify it for tax year 2025. This non-compliance has left many taxpayers, especially those without reliable internet access, unable to file returns. Delay in Notifications and Statutory Period Violations The LTBA also highlighted the FBRâ€™s delay in publishing the final return form, which was legally required by December 1, 2024, but was only released on July 7, 2025 â€” a staggering 219 days late. The official notification followed on August 18, 2025, after another 199-day delay, leaving taxpayers with barely half the statutory 92-day filing window allowed under Section 118. Rana stressed that the delay in notification itself shortened the compliance period by 49 days, effectively violating the spirit of the law and justifying the need for an additional extension until November 30, 2025. Growing Legal and Compliance Risks The LTBA warned that due to the unresolved system issues and erroneous tax computations, many taxpayers are considering litigation, which could further complicate tax administration and delay revenue collection. The bar emphasized that the government must act swiftly to protect the integrity of the tax system and maintain public confidence. â€œGiven the technical obstacles, legal ambiguities, and lost statutory days, it is only fair that the deadline be extended till November 30, 2025,â€ the LTBA concluded in its appeal to the Prime Minister. As the October 31 deadline looms, the pressure is mounting on the FBR to respond â€” and taxpayers across the country are anxiously waiting to see whether Prime Minister Shehbaz Sharif will grant the much-needed relief.

Date: 2025-10-28

Details: Karachi, October 28, 2025 â€“ In a dramatic last-minute twist, the Federal Board of Revenue (FBR) has rolled out yet another modification to the income tax return form for tax year 2025, catching taxpayers and tax consultants completely off guard â€” just three days before the extended filing deadline. The FBRâ€™s new rule now mandates Computerized National Identity Card (CNIC) details for all inflows and outflows, a requirement that tax experts say has disrupted the return filing process across Pakistan. â€œAll inflows and outflows now require CNIC numbers to complete the return filing,â€ revealed Muhammad Zeeshan Merchant, former president of the Karachi Tax Bar Association (KTBA). He said the move has effectively brought the process to a standstill, particularly for those declaring financial movements during the year. â€œThis change came out of nowhere, and as tax practitioners, we are unable to proceed with our clientsâ€™ filings since this requirement was never part of the form before last night,â€ Merchant lamented. He blasted the FBR for its â€œhabitual last-minute alterations,â€ calling them barriers to compliance rather than facilitators of reform. â€œSuch tactics are discouraging honest taxpayers who are trying to fulfill their national responsibility,â€ he added, expressing frustration at the FBRâ€™s timing as the October 31 deadline looms large. The original filing deadline was September 30, 2025, but amid strong backlash and mounting pressure, the FBR extended it first to October 15 and later to October 31. Merchant urged the FBR to finalize the return form once and for all before reopening the portal. â€œFrequent technical and policy changes are burdensome not only for taxpayers but also for the FBR itself,â€ he warned, adding that such system hiccups could inevitably trigger another extension in the deadline. Tax experts across Pakistan now await an official response from the FBR â€” but with the clock ticking, the latest twist has thrown the already chaotic 2025 return filing season into further disarray.

Date: 2025-10-28

Details: Karachi, October 28, 2025 â€“ The Karachi Tax Bar Association (KTBA) has raised alarm over a critical glitch on the Federal Board of Revenueâ€™s (FBR) IRIS portal, which is preventing taxpayers from applying for the 2025 income tax return filing extensionâ€”just days before the October 31 deadline. In a strongly worded letter addressed to the Director General (IT & Digital Transformation), the KTBA described the issue as a â€œcatch-22 nightmareâ€ for hundreds of taxpayers. Despite FBRâ€™s Circular No. 5 of October 15, 2025, which granted a generic extension for individuals and Associations of Persons (AOPs) until October 31, 2025, many taxpayers remain trapped by a technical glitch on the IRIS system. According to KTBA, taxpayers who had already applied for an extension before September 30 or October 15 under Section 119 of the Income Tax Ordinance, 2001, are now unable to submit fresh online requests. Their earlier applications remain â€œactive and redundantâ€ on the IRIS portal, effectively blocking new submissions once the current deadline expires. The association revealed that the issue had been previously reported on October 7, 2025, to all five Chief Commissioners-IR Karachi, but no concrete action has been taken. In follow-ups, the commissioners reportedly expressed helplessness, directing KTBA to liaise with PRAL and the DG (IT) to resolve what is being called a â€œsystem-level anomaly.â€ Calling the matter time-sensitive, KTBA has urged FBRâ€™s top IT leadership to immediately fix the IRIS glitch, warning that failure to do so could trigger widespread anxiety among compliant taxpayers and undermine the spirit of FBRâ€™s recent extension. Tax professionals fear that without swift intervention, this technical bottleneck could disrupt thousands of online filings, tarnishing FBRâ€™s push for digital transformation and taxpayer facilitation.

Date: 2025-10-23

Details: KARACHI: Federal Tax Ombudsman (FTO) Dr Asif Mahmood Jah has revealed that during his four-year tenure, the FTO Secretariat has resolved 57,000 complaints pertaining to taxpayersâ€™ grievances, a remarkable achievement compared to the 37,000 cases collectively resolved by the previous five ombudsmen over the last 21 years. â€œFrom small taxpayers to large corporate entities, we have ensured maximum relief and delivered swift justice to all complainantsâ€, he added while addressing a farewell luncheon reception hosted in his honour by the Karachi Chamber of Commerce & Industry (KCCI) on Wednesday. Dr. Asif Jah highlighted that through close collaboration with chambers of commerce across Pakistan, the FTO Secretariat successfully promoted publicâ€“private partnership by appointing honorary advisors from the business community. â€œI have transformed the FTO into a true public service and taxpayer facilitation institution,â€ he remarked. FTO said it was always an honour to visit KCCI, adding that this was his fifth visit to the Chamber during his tenure. â€œThe Karachi Chamber is the backbone of Pakistanâ€™s economy. The progress of our industries and national economy largely depends on the strength, contribution, and tax revenues generated by the Karachi business community,â€ he observed. Recalling his appointment, Dr. Jah said that former Prime Minister Imran Khan had chosen him for the position due to his extensive experience in taxation. â€œAt that time, Pakistan had around 3.5 million taxpayers, but the FTO Office was receiving barely 3,000 complaints annually. I assured the President of Pakistan that I would devise an effective mechanism to reform and activate the institution within six months and we did itâ€, he said. He shared that his guiding principle has always been â€œRespect the Taxpayerâ€, explaining that taxpayersâ€™ money sustains the state and supports welfare activities. â€œOur job was to protect their rights, raise their voice, and ensure justice,â€ he added. Under the FTO Ordinance, each case must be decided within 60 days, but Dr. Jah noted that through dedication and efficiency, the office succeeded in reducing the average decision time to just 30 days, with some cases even resolved within a few hours. Responding to concerns raised by Abu Bakar Shamsi regarding the blacklisting of companies by FBR and biometric verification issues, Dr. Jah said the FTO had issued landmark decisions to address these challenges. â€œThe biometric difficulties faced by senior citizens and overseas Pakistanis have also been resolvedâ€, he informed. He cited an example of proactive action taken by the FTO, where refunds worth Rs 55 million were released to individuals who had booked Suzuki vehicles when GST was 17 percent but received delivery after the rate was reduced to 12 percent. â€œWe ensured they were refunded the excess amountâ€, he said. Dr. Jah further noted that refunds have always been a major concern for the business community, and the FTO established a new mechanism directing FBR and IRIS to clear pending refund cases promptly. â€œAs a result, Rs18 billion worth of refunds were issued in one year, while another Rs23 billion were cleared last year. Many long-pending rebate claims were also released through FTO interventionâ€, he added. Dr. Jah emphasized that the purpose of the FTO is to ensure quick, free-of-cost justice for taxpayers. â€œWe simplified complaint registration to the extent that even a WhatsApp message can initiate a case. We also upgraded the online complaint management systemâ€, he explained. He added that to ensure greater accessibility, the FTO expanded its outreach by establishing offices in Hyderabad, Sukkur, Sialkot, Abbottabad, Sargodha, and Mianwali, while also visiting Nawabshah, Larkana, and Dadu to identify and resolve taxpayersâ€™ issues in smaller cities. Vice Chairman Businessmen Group (BMG) Jawed Bilwani, while highly appreciating the proactive approach adopted by the Federal Tax Ombudsman in minimizing the hardships faced by taxpayers, stated that the current FTO has truly ensured timely justice at taxpayersâ€™ doorstep, which is evident from the opening of 13 new FTO offices across various cities of Pakistan. He said that the remarkable initiatives undertaken under the leadership of Dr. Asif Mahmood Jah deserve the highest commendation, as they have transformed the FTO into a dynamic and responsive institution. â€œThe entire business community salutes Dr. Asif Jah for his tireless efforts, not only as the Federal Tax Ombudsman but also as a compassionate and kind-hearted individual who has always stood by the people in their times of distressâ€, Bilwani remarked, while reaffirming KCCIâ€™s continued support and cooperation for the FTO and his dedicated team in all their future endeavours. President KCCI Rehan Hanif, while warmly welcoming the Federal Tax Ombudsman paid glowing tribute to Dr. Asif Mahmood Jah for his outstanding services in providing relief to taxpayers through landmark judgements and proactive interventions. He particularly lauded the FTOâ€™s decisions, including the refund of Sales Tax to Suzuki vehicle buyers and actions taken against the issuance of unlawful notices to taxpayers, which brought tangible relief to the business community. President KCCI also appreciated the improved accessibility and efficiency of the FTOâ€™s office through enhanced online complaint systems, which have made it possible for taxpayers to save valuable time and obtain speedy redressal. He further acknowledged KCCIâ€™s representation as an honorary advisor within the FTO setup, terming it a commendable step that strengthens coordination between the institution and the business community. â€œWell done, Ombudsman Sahib, for providing maximum relief to taxpayersâ€, Rehan Hanif remarked, expressing satisfaction that all decisions of the FTO were duly implemented by the Federal Board of Revenue (FBR). He hoped that the fruitful collaboration between KCCI and the FTO would continue to grow in the years ahead. The event was attended by Vice Chairman Businessmen Group Jawed Bilwani, President KCCI Muhammad Rehan Hanif, Senior Vice President Muhammad Raza, Vice President Muhammad Arif Lakhany, Chairman Federal Taxation Subcommittee Abu Bakar Siddique Ahmed Shamsi, Former President Shamim Ahmed Firpo, members of KCCIâ€™s Managing Committee, senior customs officials, and FTO advisors. Copyright Business Recorder, 2025

Date: 2025-10-22

Details: ISLAMABAD: Federal Tax Ombudsman (FTO) has ordered an investigation in the matter of discriminatory treatment to taxpayers in all four provinces for collection of tax on deemed income basis on immovable property transactions under section 7E of the Income Tax Ordinance 2001. In this regard, the FTO has issued notices to FBR Members and Chief Commissioner Inland Revenue Regional Tax Office Islamabad on a complaint filed by a real estate expert Muhammad Ahsan Malik. FTO has directed the FBR to submit comments on the issue. According to the details shared by a leading real estate expert, through the Finance Act, 2022, section 7E was inserted into the Income Tax Ordinance, 2001, imposing tax on deemed income from capital assets situated in Pakistan. The said provision has been widely challenged across the country for being unconstitutional and beyond the legislative competence of the Federation. Despite the interim relief having been extended by the Supreme Court OF Pakistan, the Federal Board of Revenue (FBR) is not uniformly applying the same to taxpayers in the province of Punjab thereby causing discrimination and hardship to similarly placed individuals. Various writ petitions were filed before all High Courts of Pakistan. The Sindh High Court and Divisional Bench of Lahore High Court dismissed writ petitions filed against the section 7E, whereas, all other High Courts declared section 7E to be unconstitutional. Consequently, section 7E is not enforced in the Province of Baluchistan, KPK and Islamabad Capital territory. The judgment of the Sindh High Court was challenged before Supreme Court of Pakistan which is still pending. The Apex Court did not suspend the Judgment of Sindh High Court, however, SC granted an interim relief to taxpayers whereby only 50% of the tax under section 7E was directed to be deposited with the remaining 50% to be subject to the final outcome of the appeal. The Court further held that if the appeal is decided in favour of taxpayers, the deposited amount shall be refunded and vice versa. The failure of FBR to extend identical treatment amounts to maladministration within the meaning of section 2(3) of the Federal Tax Ombudsman Ordinance, 2000, being arbitrary, unreasonable, discriminatory and contrary to the principles of equity and good administration. The applicant, being similarly placed as those who have already been extended the benefit by the Supreme Court is entitled to the same treatment in the spirit of Article 25 of the Constitution. Copyright Business Recorder, 2025

Date: 2025-10-22

Details: ISLAMABAD: The Lahore Tax Bar Association (LTBA) has urged the Chief Justice of Pakistan to uphold the supremacy of law and initiate legal action against Federal Board of Revenue (FBR) officials who allegedly issued threats of â€œsevere consequencesâ€ to an Advocate Supreme Court for exposing corrupt practices within the tax machinery. According to a letter issued by the LTBA, copies of which have been sent to the President of Pakistan, Prime Minister, Chief Justice Lahore High Court, Minister for Law, Chairman FBR, Pakistan Bar Council, President Lahore High Court Bar Association, and President Supreme Court Bar Association, the Barâ€™s Cabinet and Members have strongly condemned the use of threatening and contemptuous language by an FBR officer. The letter cites that the officerâ€™s â€œirresponsible blame-shiftingâ€ attempts to deflect attention from established facts and, without any proof, resorts to intimidation, warning of â€œsevere consequencesâ€ for the lawyer, Waheed Shahzad Butt, who has consistently raised his voice against corruption and maladministration within the FBR. The LTBA has called upon the judiciary and the government to ensure that no public officer is allowed to intimidate or threaten members of the legal fraternity, emphasizing that rule of law and independence of the Bar must be preserved at all costs. This is also against the Lawyers Welfare and Protection Act, 2023, particularly Sections 2 and 9, defines â€œintimidation, threat, coercion, insult, or interferenceâ€ with a lawyer performing his professional duty as an offence punishable under law. The LTBA has urged the government to (i) Initiate the disciplinary proceedings in accordance with the Civil Servants (Efficiency and Discipline) Rules, 2020 (ii) Direct the said tax employee to issue a written apology and submit the same before the FTO (iii) Refer the matter to the relevant Police Authorities for registration of a FIR against the said tax employee under the applicable provisions of the Lawyers Welfare and Protection Act, 2023, in view of the intimidation and harassment caused to a practicing Advocate of the Supreme Court of Pakistan, the LTBA added. Copyright Business Recorder, 2025

Date: 2025-10-22

Details: Islamabad, October 22, 2025 â€“ The Collectorate of Customs has officially announced the public auction schedule for a range of non-duty paid (NDP) and confiscated vehicles. The auction will take place on October 24, 2025, at the state warehouses located in Kohat, Dera Ismail Khan, and Bannu. The vehicles, seized or confiscated under customs laws, include popular brands such as Toyota, Honda, Suzuki, and Mitsubishi, offering a wide variety of models for interested buyers. The auction presents an opportunity for the public to purchase these vehicles legally under customs regulations. Below is the complete list of vehicles available for auction: S.No Description of Vehicles Model Color 1 Toyota Camry M/Car (Chassis No. AXVH70-1001427) 2017 Red 2 NDP Toyota Prius M/Car (Chassis No. ZVW30-1058663) 2009 White 3 Non-duty paid Suzuki Wagon-R (Chassis No. MH55S-269421, Accidental) 2019 White 4 Toyota Premio M/Car (Chassis No. ZZT240-0057640) 2002 White 5 NDP Toyota Aqua M/Car (Chassis No. NHP10-2482360) 2015 White 6 Toyota Hilux Vigo Double Cabin (Chassis No. MROFZ29G502505856) 2007 Black 7 NDP Toyota Axio Hybrid (Chassis No. NKE165-7005036) 2013 Silver 8 NDP Toyota Vitz M/Car (Chassis No. KSP90-5060468) 2006 â€” 9 Toyota Sienta M/Car (Chassis No. NSP170-7071419) 2016 â€” 10 Toyota Corolla-X M/Car (Chassis No. NZE120-3050559) 2004 White 11 Toyota Prius M/Car (Chassis No. ZVW52-3047091) 2017 â€” 12 Toyota Aqua M/Car (Chassis No. NHP10-6088934) 2012 â€” 13 Toyota Aqua M/Car (Chassis No. NHP10-2539422) 2016 White 14 Honda Accord M/Car (Chassis No. CR6-1007155) 2013 Beige 15 Mitsubishi Pajero Jeep (Chassis No. V45-4201433) 1996 Silver 16 NDP Prado Land Cruiser (Chassis No. JTEAZ29J500002257) 2002 Pearl White 17 NDP Toyota Aqua M/Car (Chassis No. NHP10-6662616) 2017 Black 18 Honda Accord M/Car (Chassis No. CH6-1000122) 2013 â€” 19 NDP Toyota Prius M/Car (Chassis No. ZVW30-5091934) 2009 White 20 NDP Toyota Probox M/Car (Chassis No. NCP51-0309027) 2013 White 21 NDP Toyota Prius M/Car (Chassis No. ZVW30-1555670) 2012 White 22 NDP Daihatsu Mira M/Car (Chassis No. LA300S-1293919) 2014 White 23 NDP Suzuki Hustler M/Car (Chassis No. MR31S-833265) 2014 Red 24 NDP Toyota Vitz M/Car (Chassis No. SCP13-0048150) 2004 White 25 NDP Heavy Bike (Chassis No. JKAZRT00AAA015047) 2010 Orange 26 Toyota Vitz M/Car (Chassis No. SCP90-5138814) 2009 â€” The Collectorate of Customs encourages all interested participants to attend the auction and follow official guidelines regarding payment, registration, and verification procedures.

Date: 2025-10-21

Details: Rawalpindi, October 21, 2025 â€” The Rawalpindi Chamber of Commerce and Industry (RCCI) has rejected recent media reports suggesting that the salaried class contributes more in taxes than exporters, wholesalers, and retailers. RCCI President Usman Shaukat termed such claims â€œmisleadingâ€ and â€œbased on incomplete information.â€ Addressing the issue on Tuesday, Shaukat clarified that the business community remains the largest contributor to Pakistanâ€™s national exchequer. He noted that nearly 60 percent of total tax revenue comes from indirect taxes, most of which are paid by traders and businesses through various commercial activities. â€œThe report gives a false impression that traders are outside the tax net, which is far from reality,â€ he said. â€œA significant portion of the salaried class works in the private sector, and their salaries are funded by exporters, wholesalers, and retailers from their profits. Presenting salaried individuals separately in tax statistics without full context distorts the real picture of tax contributions.â€ The RCCI president emphasized that the Chamber has consistently supported reducing the tax burden â€” including for the salaried class â€” to encourage investment and economic growth. â€œLower tax rates boost business activity and eventually expand the overall tax base,â€ he added. Citing official data, Shaukat highlighted that the Federal Board of Revenue (FBR) collected over Rs. 12 trillion in taxes during the last fiscal year, of which Rs. 600 billion came from the salaried class. For fiscal year 2025â€“26, the FBRâ€™s revenue target is set at Rs. 14.3 trillion. â€œExcluding the salaried segment, where does the remaining revenue come from?â€ Shaukat questioned. â€œIt is the business community that shoulders the heaviest tax load, including super taxes and other levies.â€ He urged policymakers and media outlets to present tax data responsibly and factually, stressing that misleading narratives damage the credibility of Pakistanâ€™s business community â€” which he described as the backbone of the national economy.

Date: 2025-10-21

Details: Karachi, October 21, 2025 â€“ The Federal Board of Revenue (FBR) has initiated the second phase of hiring third-party tax auditors, but the country currently faces a significant shortage of qualified chartered accountants (CAs) to meet the governmentâ€™s requirements. According to independent human resource firms and data provided by the Institute of Chartered Accountants of Pakistan (ICAP), around 537 candidates successfully cleared all CA written exams in July 2025, marking the highest number in the instituteâ€™s history. However, approximately 15â€“20% of these candidates have not completed their CA articleship, reducing the pool of eligible professionals to roughly 430 candidates. Further analysis suggests that 10â€“15% are serving abroad and 5â€“10% have over 2â€“3 years of post-articleship experience, leaving about 300 freshly qualified CAs ready for employment. In the second phase of hiring auditors, the FBR requires 30% of 1,039 auditors (approximately 312) to be CAs. Human resource experts warn that the existing pool of qualified professionals is insufficient to meet this target. To address this gap, it is recommended that the 30% limitation for CAs be reconsidered, allowing auditors from other professional backgrounds to participate. Additionally, the number of ACCAs and ACMAs in the North Zone (Khyber Pakhtunkhwa, Islamabad, and Rawalpindi) is extremely limited. On average, only 25â€“30 ACMAs qualify annually in this region, while ACCAs are similarly scarce, making recruitment a major challenge for the FBR in northern districts. Experts recommend enhancing salary packages for ACCAs and ACMAs to attract talent and expanding the eligibility criteria to include professionals with M.Com, B.Com, or BBA in Accounting and Finance. This approach would allow FBR field offices to benefit from a diverse pool of skilled auditors, combining the expertise of chartered accountants with management and accounting professionals from other qualifications. Without urgent measures, the FBR risks delays in its audit assignments, which could impact tax collection efficiency and the overall financial compliance framework in Pakistan.

Date: 2025-10-16

Details: Islamabad, October 16, 2025 â€“ The Federal Board of Revenue (FBR) has come under sharp criticism for its failure to issue the manual income tax return form for the Tax Year 2025, exposing what many describe as a new â€œhallmark of negligenceâ€ within the tax authority. Despite two extensions in the 2025 return filing deadline, the FBR has yet to make the manual form available, creating widespread frustration among taxpayers and tax practitioners across Pakistan. The issue reached the Federal Tax Ombudsman (FTO) after complaints were formally lodged by Advocates Mian Abdul Ghaffar and Waheed Shahzad Butt under Section 10(1) of the Federal Tax Ombudsman Ordinance, 2000. The complaints accused the FBR of maladministration and negligence for not uploading the manual income tax return form on its official portal. FBR Officials Fail to Respond During the FTO hearing held on October 15, 2025, senior FBR officials including Member IR (Operations), Member IR (Policy), and Director General (IT and DT) were directed to attend and submit para-wise comments. However, they failed to appear or provide written responses. Only the Regional Tax Office (RTO) Gujranwala submitted comments, confirming that the authority to issue manual forms lies exclusively with the FBR headquarters. The FTO noted that the absence of key FBR officials and their failure to submit responses reflect â€œunreasonable neglect, inefficiency, and inattentionâ€ in the discharge of official dutiesâ€”behavior that clearly constitutes maladministration under Section 2(3)(ii) of the FTO Ordinance. Legal Background and Compliance Issues Under Rule 73(2DD) of the Income Tax Rules, 2002, electronic filing of returns is mandatory only for individuals earning Rs. 1 million or more annually or with a turnover exceeding Rs. 50 million. Taxpayers below these thresholds are entitled to file manual income tax returns. In previous years, FBR consistently issued both electronic and paper-based return forms simultaneously, allowing compliance flexibility for small taxpayers. This year, however, the FBR only uploaded the electronic return on the IRIS system on August 18, 2025, leaving less than 45 days until the original September 30 deadlineâ€”far short of the legally required 92-day window starting from July 1 each year. Complainants argued that this abridged timeline, combined with the absence of the manual return form, constitutes a direct violation of taxpayer rights and administrative fairness. Technical Glitches and System Failures Adding to taxpayersâ€™ woes, the FTO heard that the IRIS e-filing system continued to face severe technical glitches, making online return filing nearly impossible for many users. Despite repeated complaints and a formal letter addressed to the Chairman FBR on September 17, 2025, no corrective measures were implemented. Practitioners reported system crashes, login failures, and data submission errorsâ€”issues that have persisted for years without resolution. FTO Findings and Recommendations After reviewing the evidence, the FTO concluded that FBRâ€™s inaction and non-responsiveness amounted to â€œclear negligence, inefficiency, and maladministration.â€ The Ombudsman emphasized that FBR had previously issued manual return forms every year up to 2024, making the 2025 omission unjustifiable. The FTO recommended that: 1. Member IR (Operations), FBR immediately ensure the uploading of the manual/paper tax return form for Tax Year 2025, in line with previous practice. 2. Director General (IT and DT) must fix technical issues and ensure the IRIS portal remains fully operational. 3. The FBR should report compliance within seven days to the FTO office. Taxpayer Impact and Public Reaction Tax professionals and taxpayers have expressed serious concern over FBRâ€™s inefficiency, warning that such administrative lapses damage public trust and discourage voluntary tax compliance. Many argue that if the FBR cannot provide basic filing infrastructure, extending deadlines alone offers little relief. Experts believe that consistent delays, unresponsiveness from key officials, and malfunctioning systems undermine Pakistanâ€™s efforts to digitize tax administration and broaden the tax base. The Ombudsmanâ€™s ruling is expected to pressure the FBR into swift corrective action and greater accountability. As the 2025 return filing process continues amid uncertainty, stakeholders urge the FBR to restore confidence through timely system upgrades, transparency, and respect for taxpayer rights.

Date: 2025-10-16

Details: Islamabad, October 16, 2025 â€“ The Federal Board of Revenue (FBR) has imposed major penalties on two officers of the Directorate of Intelligence and Investigation (Customs), Karachi, following disciplinary proceedings involving allegations of inefficiency, misconduct, and corruption. According to notifications issued by the Revenue Division, the officersâ€”Mr. Zia Moin, Superintendent (BS-17), and Mr. Jahanzeb Khan, Intelligence Officer (BS-16)â€”were found guilty of serious professional misconduct in connection with the illegal retention and delayed release of a confiscated bus, Registration No. BSW-404, even after payment of redemption fines and personal penalties by the claimant. The FBRâ€™s inquiry, led by Dr. Sadia Sadaf (PCS/BS-19), concluded that both officers were responsible for deliberate negligence and manipulation of official records. While the inquiry initially recommended minor penalties, the Member (Administration/HR) determined that the nature of their offenses warranted stricter punishment. As per the official notifications â€¢ Mr. Zia Moin has been dismissed from service under Rule 4(3)(e) of the Civil Servants (Efficiency & Discipline) Rules, 2020. â€¢ Mr. Jahanzeb Khan has been demoted to the lower post and pay scale of UDC (BS-13) for three years, along with the stoppage of his performance allowance for one year. The investigation revealed that both officers delayed the vehicleâ€™s release by over 35 days without justification and were linked to complaints of demanding illegal gratification. The inquiry also noted tampering with official records and failure to report the delay to senior officers. The FBR stated that both officers have the right to appeal under the Civil Servants (Appeals) Rules, 1977, within 30 days of notification. These disciplinary measures highlight the FBRâ€™s zero-tolerance policy toward corruption and misconduct within its ranks, reinforcing its commitment to transparency and accountability in customs operations.

Date: 2025-10-15

Details: LAHORE: Senior Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Saqib Fayyaz Magoon and President of the Lahore Chamber of Commerce and Industry Faheem-ur-Rehman Saigol, have jointly urged the government to extend the deadline for filing tax returns by at least one month to provide relief to the business community and allow them to submit their returns without undue pressure. The two business leaders said that in the current economic situation, it is essential to facilitate traders to ensure continuity of business activities. During a meeting at the Lahore Chamber, President Faheem-ur-Rehman Saigol delivered a welcome address and elaborated on trade, economic matters and the vital role of the business community in national development. The meeting was also addressed by FPCCI Senior Vice President Saqib Fayyaz Magoon, LCCI Senior Vice President Tanveer Ahmed Sheikh, LCCI Vice President Khurram Lodhi, Chairman Pakistan Artificial Leather Importers and Merchants Association Tariq Latif, FPCCI Vice Chairman Aman Pracha, President of the Hyderabad Chamber Adeel Siddiq and former Senior Vice President of LCCI Engineer Khalid Usman. Executive Committee Members Umer Sarfraz, Aamna Randhawa, Shaban Akhtar, former Executive Committee Member Mian Muhammad Nawaz and other members were also present. In his address, Saqib Fayyaz Magoon praised Faheem-ur-Rehman Saigol, calling him a â€œpopular and sincere leaderâ€ and a true representative of the business community who has always raised his voice for tradersâ€™ welfare. He said that the rising cost of doing business and increasing energy tariffs are the biggest obstacles to export growth. â€œUnless energy prices are rationalized, Pakistan cannot achieve sustainable export growth,â€ he added. He said that the government must review Free Trade Agreements (FTAs) to ensure they serve Pakistanâ€™s industrial and trade interests, enabling local products to compete effectively in international markets. He said that without improving the ease of doing business, stabilizing the economy is not possible. Investor confidence, policy continuity and business-friendly reforms are crucial for long-term growth. Saqib Fayyaz Magoon said that the FPCCI has always remained in contact with the government to resolve the business communityâ€™s issues. However, he said that unless traders are included in policymaking, economic policies will not yield sustainable results. Appreciating the Lahore Chamberâ€™s efforts, he said that it has always played a frontline role in highlighting tradersâ€™ concerns and that strong coordination between FPCCI and LCCI will lead to better economic outcomes. LCCI President Saigol said that the Lahore Chamber of Commerce and Industry has always prioritized serving the business community and addressing their problems. He said that strong linkages within the business community strengthen the economy and the Lahore Chamber is committed to further promoting such connections. He said that the government must immediately address the challenges faced by traders to revive business confidence and accelerate economic activity. â€œThe private sector is the backbone of the national economy,â€ he said, adding that the government should include private-sector representatives in policy formulation to ensure decisions reflect ground realities. Saigol mentioned that the Lahore Chamber not only raises the issues of its members with the government but also maintains constant communication with various ministries and departments to facilitate the business community. He appreciated the efforts of Saqib Fayyaz Magoon for safeguarding business interests and said his initiatives for economic improvement are commendable. He said that the Lahore Chamber is actively submitting practical and actionable proposals to the government on matters related to taxation, energy, imports, exports and industrial policies. He added that the Chamber has become a unified voice of the business community and will continue to play its role more effectively in the future. Saigol also expressed gratitude to Chairman of the Pakistan Artificial Leather Importers and Merchants Association, Tariq Latif, for his continuous cooperation with the LCCI. Both leaders agreed to further strengthen coordination and collaboration between the Lahore Chamber of Commerce and Industry (LCCI) and the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) to protect and promote the interests of the business community. The LCCI President said that the private sectorâ€™s role is crucial for Pakistanâ€™s economic stability. â€œUntil a conducive business environment and adequate facilities are provided to entrepreneurs, the economy cannot stabilize. The LCCI firmly believes that through collective efforts, we can take Pakistanâ€™s industrial and commercial progress to new heights,â€ he said. Copyright Business Recorder, 2025

Date: 2025-10-15

Details: ISLAMABAD: The Lahore Tax Bar Association (LTBA) has demanded of the government to immediately initiate disciplinary proceedings against Federal Board of Revenueâ€™s (FBR) tax officials, who have threatened a tax lawyer of severe consequences. According to a letter of the LTBA to federal government on Tuesday, the Cabinet and Members of the Lahore Tax Bar Association strongly condemn for using threatening, and contemptuous tone â€œIrresponsible blame-shifting will not overshadow the facts without any proof of blaming which can lead to â€œsevere consequencesâ€ for the lawyer Waheed Shahzad Butt.â€ â€œAccusing an officer of Government of Pakistan just in a few fancy lines without any proof can result in legal action against the lawyer which he seems to have forgottenâ€ against Mr. Waheed Shahzad Butt, Advocate Supreme Court, such remarks, coming from a government functionary in an official reply, amount to institutional intimidation and are entirely incompatible with the decorum of quasi-judicial proceedings before the FTO. This is also against The Lawyers Welfare and Protection Act, 2023, particularly Sections 2 and 9, defines â€œintimidation, threat, coercion, insult, or interferenceâ€ with a lawyer performing his professional duty as an offence punishable under law. The LTBA has urged the government to take the following steps: (i); Initiate the disciplinary proceedings in accordance with the Civil Servants (Efficiency and Discipline) Rules, 2020; (ii); Direct the said tax employee to issue a written apology and submit the same before the honorable Federal Tax Ombudsman Office. (iii); Refer the matter to the relevant Police Authorities for registration of a FIR against the said tax employee under the applicable provisions of the Lawyers Welfare and Protection Act, 2023, in view of the intimidation and harassment caused to a practicing Advocate of the Supreme Court of Pakistan, the LTBA added. Copyright Business Recorder, 2025

Date: 2025-10-15

Details: LAHORE: The office of the Auditor General of Pakistan (AGP) has detected an irregularity in payment of fixed sales tax by brick kilns operators resulting in a net loss of Rs144.02 million to the national exchequer. According audit report finalized by the AGP office in 2025, it was observed during the audit of the financial year 2023-24 that in five field offices of the Federal Board of Revenue (FBR), 548 taxpayers operating as bricks kilns were liable to pay fixed sales tax at the prescribed rates under the rules and regulations, but the same amount was not deposited. However, the tax authorities failed to recover the fixed sales tax or to get the bricks kilns registered in sales tax regime. Due to this, public exchequer sustained millions of loss following non-monitoring of sales tax collection by the officers concerned in the FBR, under fixed tax regime, the audit report observed. It was further observed by the Audit that the inefficiency on the part of concerned field officers of the FBR resulted in non-realization of fixed sales tax of Rs144.02 million. The AGP office also made it clear that these irregularities were reported to the department from February to November 2024. The department, however, replied that cases worth of Rs1.03 million were under recovery, Rs4.96 million were under adjudication and legal proceedings for Rs138.03 million had been initiated. The Departmental Accounts Committee (DAC), in its meetings held in July, November, October and December 2024, directed the department to submit a comprehensive reply and expedite the legal proceedings for recovery of the non-realised amount however no further progress was reported till the finalization of this report. The Audit also recommended to the FBR authorities for finalization of legal proceedings for the non-realised amount apart from implementation of risk-based desk audit and monitoring of financial statements. According to the report, this issue was also reported earlier in the audit reports for the audit years 2021-22, 2022-23 and 2023-24 respectively having a financial impact of Rs988.26 million. However, the recurrence of the irregularity is a serious matter, the audit report noted with concern. The report further observed that â€œAccording to Section 3(1B) & 14 of the Sales Tax Act, 1990 read with Tenth Schedule and Rule 6 of the Sales Tax Rules 2006, the tax on bricks, falling in (Pakistan Customs Tariff (PCT), shall be paid on fixed basis at the rate of Rs10,000 per month upon the brick kilns. Every person engaged in making taxable supplies in Pakistan, in the course or furtherance of any taxable activity carried on by him, if not already registered, is required to be registered under this Act.â€ Copyright Business Recorder, 2025

Date: 2025-10-11

Details: Recorder Report Published October 11, 2025 Updated about an hour ago ISLAMABAD: The Federal Board of Revenueâ€™s Corporate Tax Office (CTO), Islamabad, has threatened a tax lawyer of severe legal consequences for making serious allegations against the tax officials. In this regard, the CTO Islamabad has reportedly adopted a strange strategy to defend its stance before the Federal Tax Ombudsman (FTO). The said CTO has communicated comments to the FTO in this specific case. â€œAccusing an officer of government of Pakistan just in a few fancy lines can result in legal action against the lawyer which he seems to have forgotten,â€ CTOâ€™s communication to the FTO added. According to sources, during the ongoing proceedings before the FTO, officials of CTO Islamabad chose to shift focus from the substantive issues under investigation to the personal conduct of the complainantâ€™s lawyer. The CTO, in its written stance, stated that the lawyerâ€™s allegations were â€œunwarrantedâ€ and reflected a â€œlack of understanding,â€ claiming such remarks undermined the integrity and tireless efforts of the tax institution. It further cautioned that â€œirresponsible blame-shiftingâ€ without proof could lead to serious consequences for the lawyer, Waheed Shahzad Butt, Advocate. The FTO is currently investigating a complaint involving the CTO Islamabad for allegedly adjusting sales tax demand against income tax refunds, a move the complainant before FTO has termed as potentially contemptuous in light of the Supreme Courtâ€™s landmark judgment in the Pakistan LNG case. Legal experts also view such actions as contrary to Article 10A of the Constitution of Pakistan, which guarantees the right to a fair trial and due process. Apparently, the comments of the CTO seem to be an attempt to intimidate a lawyer performing his professional duties, raising serious concerns about administrative accountability and institutional conduct within the FBRâ€™s field offices. The CTO states before FTO â€œThe assertion that recovery has been made illegally under section 48 is factually incorrect. No coercive recovery has been undertaken. The action in question is a lawful refund adjustment. Accusing an officer of government of Pakistan just in a few fancy lines can result in legal action against the lawyer which he seems to have forgotten. If learned advocate considers the recovery to be illegal, the appropriate course of action would be to approach the appellate forum rather than lodging a complaint with the FTO. Such unwarranted allegations not only show a lack of understanding but also undermine the integrity and tireless efforts of the institution. Irresponsible blame shifting will not overshadow the facts without any proof of blaming which can lead to sever consequences for the lawyer Waheed Shahzad Butt: CTO added. Copyright Business Recorder, 2025

Date: 2025-10-08

Details: Islamabad, October 8, 2025 â€“ The Federal Board of Revenue (FBR) has announced that all sales tax de-registration requests must now be processed exclusively through the computerized system, eliminating manual applications altogether. According to the Sales Tax General Order (STGO) No. 4 of 2025, issued on October 8, 2025, this move aims to ensure greater transparency, efficiency, and uniformity in handling sales tax de-registration cases. The order specifies that taxpayers seeking de-registration under Section 21 of the Sales Tax Act, 1990, read with Rule 11 of the Sales Tax Rules, 2006, must submit their applications online through the prescribed electronic system. The FBR stated that the sales tax de-registration requests will now be handled by the Commissioner Inland Revenue (IR) with jurisdiction, as outlined in sub-Rule (1) of Rule 11. This digital process replaces the traditional manual method, which was often time-consuming and prone to administrative delays. Moreover, the order clarifies that no manual requests for de-registration will be accepted moving forward. Any applications already submitted manually will also be required to be resubmitted through the computerized portal. FBR officials emphasized that this transition is part of the authorityâ€™s ongoing efforts to digitize tax administration, simplify procedures, and improve compliance within the sales tax framework across Pakistan. KTBA SEEKS REMOVAL OF REDUNDANT RETURN FILING REQUESTS Karachi, October 8, 2025 â€“ The Karachi Tax Bar Association (KTBA) has called on the Federal Board of Revenue (FBR) to remove all pending requests for return filing deadline extensions from the IRIS portal. In a formal letter to the FBR, the KTBA pointed out that numerous taxpayers had earlier filed applications under Section 119 of the Income Tax Ordinance, 2001, requesting extensions before the FBRâ€™s recent blanket relief. According to KTBA, many of these requests are still visible on the IRIS system, despite the fact that the FBR has already extended the filing deadline for all taxpayers until October 15, 2025, through Circular No. 4 of 2025-26. The KTBA noted that this overlap could lead to unnecessary confusion, including incorrect penal proceedings and potential litigation against otherwise compliant taxpayers. Some of the earlier applications were approved or rejected, while many remain pending in the commissionersâ€™ inboxes without any official action. The association emphasized that since a universal extension has already been granted, the pending individual applications have become redundant. Leaving them active on the portal, the KTBA warned, may undermine the clarity and efficiency of the FBRâ€™s compliance system. Therefore, the KTBA urged the tax authority to instruct all Commissioners-IR to promptly delete these outdated extension requests from the IRIS system to prevent legal complications and protect compliant taxpayers from undue inconvenience.

Date: 2025-10-08

Details: Karachi, October 8, 2025 â€” The Federal Board of Revenue (FBR) has announced a significant 19% increase in the collection of withholding tax on weddings during the fiscal year 2024â€“25, highlighting improved compliance and growing formalization in the event management sector. According to the latest FBR data, withholding tax collected from weddings reached Rs2.02 billion in FY25, compared to Rs1.70 billion in the previous fiscal year. This rise reflects both increased enforcement and a surge in lavish wedding expenditures across Pakistanâ€™s major cities, including Karachi, Lahore, and Islamabad. The tax is collected under Section 236CB of the Income Tax Ordinance, 2001, which was introduced through the Finance (Supplementary) Act, 2023. The law mandates advance tax collection from individuals or entities organizing events in marriage halls, marquees, hotels, restaurants, clubs, or community centers. This also includes taxes on payments for food, decoration, and other services related to such events. Under the current tax framework, a 10% withholding tax applies to individuals listed on the Active Taxpayers List (ATL), while a 20% rate applies to those not on the list. The tax collected is adjustable against the filerâ€™s annual tax liability. Officials explained that the FBRâ€™s focus on weddings comes as part of its broader drive to document informal sectors that generate substantial revenue but often remain untaxed. With weddings in Pakistan often involving extravagant spending, the sector provides a significant opportunity for widening the tax base. In Karachi alone, authorities noted a rise in tax collections due to frequent large-scale wedding events held in high-end venues and marquees. The FBR continues to coordinate with local administrations and event organizers to ensure accurate reporting and prompt tax collection. Experts suggest that the growing tax on weddings could encourage more transparency in event planning businesses, helping the government capture fair revenue from one of the countryâ€™s most vibrant and profitable industries.

Date: 2025-10-08

Details: Islamabad, October 8, 2025 â€” Pakistan is expected to abolish the car import schemes that allow vehicles to enter the country under the baggage and gift programs, both of which provide duty and tax exemptions. The move comes as part of the ongoing negotiations between Pakistan and the International Monetary Fund (IMF) to reform trade and taxation policies under the $7 billion Extended Fund Facility (EFF). According to reports, both sides have reached a consensus to discontinue the baggage and gift schemes entirely while tightening the third option â€” the Transfer of Residence (ToR) â€” which permits overseas Pakistanis to import vehicles under certain conditions. Under the revised regulations, commercial import of five-year-old used cars will still be allowed, but with much stricter safety and compliance checks. The IMF has reportedly urged Pakistanâ€™s Economic Coordination Committee (ECC) to approve the abolition of these two import schemes and impose tighter restrictions on the ToR program before the end of the current month. The move is aimed at reducing misuse and curbing the influx of high-value vehicles brought in under personal-use claims but later sold commercially. Officials have noted that most cars, whether from Japan or the UK, are first routed through Dubai before being brought into Pakistan â€” a loophole often exploited to evade taxes. â€œMisuse of imported car schemes has become a persistent issue that must be addressed to ensure fairness and transparency,â€ one senior official said. Meanwhile, Pakistan and the IMF are also working to finalize the Governance and Corruption Diagnostic (GCD) Assessment report, which remains a key sticking point in the review talks. To address IMF concerns, the government has formed a task force to strengthen anti-corruption mechanisms, including new Federal Board of Revenue (FBR) rules requiring civil servants in Grade 17â€“22 to declare assets held by themselves and their spouses.

Date: 2025-10-08

Details: Islamabad, October 8, 2025 â€” The Federal Board of Revenue (FBR) is actively exploring various strategies to strengthen revenue collection and prevent a shortfall during the fiscal year 2025â€“26. The move comes amid growing economic challenges and the aftermath of recent floods, which have impacted fiscal performance across multiple sectors. According to official sources, the FBR recently briefed the International Monetary Fund (IMF) on its first-quarter collection performance. During Julyâ€“September 2025, the FBR collected Rs2,885 billion against the assigned target of Rs3,083 billion, marking a shortfall of Rs198 billion. For September alone, the collection stood at Rs1,230 billion, falling short of the Rs1,368 billion monthly target. Authorities fear that the overall shortfall could exceed Rs400 billion by the end of FY26, potentially forcing a downward revision in the annual tax collection target of Rs14.13 trillion. However, Finance Minister Muhammad Aurangzeb has ruled out the possibility of a mini-budget, assuring that no new tax measures are currently under consideration. Senior FBR officials emphasized that ongoing reforms are aimed at enhancing institutional capacity rather than imposing new taxes. The department has initiated a large-scale recruitment drive, hiring around 1,600 auditors to improve its audit strength. Moreover, digital production monitoring systems are being rolled out across key industries such as sugar, fertilizer, cement, beverages, textiles, and tobacco to curb evasion and ensure accurate reporting. The FBRâ€™s Transformation Plan also focuses on integrating data sources, automating tax processes, and leveraging artificial intelligence to identify high-risk taxpayers. These reforms are expected to boost transparency, accountability, and efficiency. Thanks to these initiatives, Pakistanâ€™s tax-to-GDP ratio improved from 8.8 percent in FY24 to 10.24 percent in FY25. Furthermore, the Faceless Customs Appraisement project has increased revenue per Goods Declaration (GD) by 17.3 percent. Enforcement-driven tax revenues have also risen eightfold over the previous year, underscoring the FBRâ€™s commitment to modernizing the taxation system and sustaining fiscal growth.

Date: 2025-10-07

Details: Karachi, October 7, 2025 â€“ The University of Karachi hosted an informative seminar titled â€œImpacts of Income Tax Filing and Amendments in Pension Rulesâ€ at the Karachi University Business School Auditorium on Tuesday. The event was jointly organized by the Karachi University Teachersâ€™ Society (KUTS) and the Karachi University Officers Welfare Association (KUOWA). The keynote speaker, Tayyab Ali Ghori, Accounts Officer from the Accountant General Sindh, highlighted the importance of tax filing as both a legal obligation and a civic responsibility. He explained that in Pakistan, individuals earning above the prescribed income threshold must file income tax returns each year. During his detailed presentation, Ghori outlined the step-by-step process for filing, required documentation, and the use of the governmentâ€™s online tax portal. He emphasized that timely filing helps strengthen the national economy and ensures transparency. Earlier in the seminar, Amanullah Khan Madsar from the Pension Section of Karachi University discussed recent amendments in pension rules. He elaborated on how these updates might affect government employees, particularly those serving in educational institutions. Dr. Mohsin Ali, President of KUTS, appreciated the collaborative effort, saying such initiatives are vital for spreading financial awareness and helping staff understand policy changes. He stressed that regular educational events allow employees to stay informed about evolving financial laws. Dr. Syed Faisal Hashmi, President of KUOWA, also commended the participation of faculty and officers. He reaffirmed the Associationâ€™s commitment to organizing more informative programs at Karachi University in the future to promote awareness and understanding of official procedures. The session concluded with an engaging Q&A segment where speakers addressed participantsâ€™ queries. Attendees expressed gratitude to the organizers and suggested that similar awareness sessions continue regularly to benefit the wider university community in Karachi.

Date: 2025-10-07

Details: KARACHI: Mian Zahid Hussain, President Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance, Chairman National Business Group Pakistan, Chairman Policy Advisory Board FPCCI, said that the Federal Board of Revenueâ€™s (FBR) major revenue shortfall in Q1 of FY26 was approximate Rs 198 billion. This quarterly miss reflects Pakistan's deep structural fiscal issues, not just a temporary setback but places severe pressure on the government. He noted that while the July target was successfully met, with collections amounting Rs. 754 billion against target of Rs. 748 billion. In August, collections fell short by Rs. 64 billion and in September by Rs. 138 billion, leading to a total Q1 collection of Rs. 2,885 billion against a target of Rs. 3,083 billion. Mian Zahid Hussain however appreciated the FBRâ€™s efforts and further explained that although the income tax target for Q1 was missed by Rs. 96 billion, FBR's efforts resulted in 11% increase compared to last year. Similarly, the sales tax target fell short by Rs. 122 billion, but collections were 13% higher year-on-year, while customs duties posted a surplus of Rs. 17 billion, due to a rise in imports. However, he cautioned that this increase in imports, while boosting customs revenue, has exerted additional pressure on the current account deficit, underscoring the need for import substitution, and adoption of consistent business friendly policies to stabilize Pakistanâ€™s fiscal trajectory. Hussain emphasized that the revenue shortfall confirms the persistent failure to widen the tax base, a structural issue that undermines the entire fiscal sustainability effort. The most damning evidence, he pointed out, is the widespread non-compliance amongst the affluent. "It is a disgrace that a large number of tax returns filed up to late September 2025 declared zero taxable income, even as the individuals exhibit affluent lifestyles," he asserted. "This level of non-compliance severely threatens our ability to meet the fiscal benchmarks required by the IMF program." To address this, Hussain noted that harassment measures cannot solve the crisis without systemic changes. The financial gap created by the Q1 shortfall is compounded by the need for unfunded flood-related expenditure and the failure of provincial governments to deliver their promised budget surpluses to the Federal Government. This critical situation coincides with the ongoing technical-level talks for the IMF's Second Review under the 37-month, US$ 7 billion Extended Fund Facility (EFF). "The stakes are now perilously high," concluded Mian Zahid Hussain, "Should the required additional revenue not materialize immediately; the government faces a severe riskâ€. We could be forced to impose mid-year emergency taxation to ensure compliance with the IMF performance benchmarks. This action would be detrimental to industry and the public, proving that the burden of widespread tax evasion will ultimately be borne by those who already comply."

Date: 2025-10-06

Details: Karachi, October 6, 2025 â€“ Pakistan has provided a substantial tax exemption of Rs61 billion during the tax year 2023â€“24 under various Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs), according to the Tax Expenditure Report 2025 issued by the Federal Board of Revenue (FBR). The report highlights that these exemptions were aimed at strengthening bilateral and regional trade partnerships while promoting economic cooperation with key trading allies, including China, Malaysia, Indonesia, and Sri Lanka. The total value of tax exemptions and concessions increased significantly from Rs44.1 billion in the previous fiscal year to Rs60.97 billion in 2023â€“24. A major portion of the exemptionâ€”approximately Rs47.16 billionâ€”was granted under the Pak-China FTA, representing the highest benefit extended to a single trading partner. Imports under the Pak-Malaysia PTA followed with Rs4.99 billion in relief, while the Pak-Indonesia PTA contributed Rs5.42 billion in duty exemptions. Other agreements also received notable concessions, such as the Pakâ€“Sri Lanka FTA with Rs2.50 billion, and the SAARC Free Trade Agreement (SAFTA), under which Rs336 million worth of imports were exempted. Additionally, newer accords like the Pak-Turkey FTA and the Pakistan-Uzbekistan Transit Agreement were included, though their fiscal impact remained comparatively smaller. The FBR noted that these trade-related exemptions help maintain competitive import prices, stimulate cross-border commerce, and encourage regional integration. However, the growing size of tax expenditures underscores the need for regular policy reviews to balance fiscal discipline with economic diplomacy. Experts believe that rationalizing trade-related tax reliefs could enhance transparency while sustaining Pakistanâ€™s commitments under regional and bilateral trade frameworks. The report reaffirms FBRâ€™s commitment to ensuring that all exemptions align with the countryâ€™s strategic trade and fiscal objectives.

Date: 2025-10-02

Details: Terence J Sigamony Published about 4 hours ago ISLAMABAD: The Supreme Court was told that Super Tax under Section 4C cannot be imposed by disallowing carried forward losses, admissible expenses, and depreciation allowance, as this would mean a simultaneous imposition under entries 47 and 52, which is not permissible under the Constitution. A five-judge Constitutional Bench of the Supreme Court, headed by Justice Amin-ud-Din Khan, on Wednesday heard appeals of the Federal Board of Revenue against the judgments of the Sindh, Lahore, and Islamabad High Courts regarding the levy of Super Tax under Section 4C of the Income Tax Ordinance, 2001. Barrister Ovais Ali Shah, representing the taxpayers, argued that the liability of the taxpayers can only be determined by reference to the law as it stood on the date of crystallization; i.e., 30.06.2022, for normal tax years, and the respective closing dates for special tax years. He submitted that the Islamabad High Courtâ€™s impugned judgment has correctly applied the principle laid down by this Court that the liability to pay income tax accrues on the last day of the accounting year. Once the tax year has closed, the taxable event is complete, and the income of the taxpayer for that year stands concluded. Consequently, liabilities had crystallized on 30.06.2022, and subsequent fiscal legislation cannot retrospectively alter such vested rights, the counsel added. Ovais stated that the test for disturbing a crystallised liability is high and the language used must be very specific, adding that in the instant case, none of the provisions contained in Sections 4, 9, 11, and 74 have been disturbed. Section 4C also does not contain any non-obstante clause, nor has a deeming clause been provided. He argued that the wording of Section 4B must be read in favour of taxpayers, as it expressly provided that no super tax was applicable for Tax Year 2022, and this provision was never amended. As such, this creates a vested right in favour of the respondent taxpayers which cannot be taken away by subsequent legislation. The subsequent enactment of Section 4C, which purported to impose the super tax for the same period; therefore, stands in direct and irreconcilable conflict with Section 4B. Ovais maintained that the super tax cannot disallow carry-forward losses or depreciation, as this would create simultaneous taxation under Entries 47 and 52. When Section 4C denies statutory carry-forward rights or reintroduces final tax incomes into charge, it effectively operates as a presumptive tax. Such a levy cannot constitutionally coexist with the normal income tax regime under Entry 47. He requested that to preserve constitutionality, Section 4C must be read down and confined strictly to incomes computed under the normal regime. Any broader construction would violate the constitutional division between Entry 47 and Entry 52. In such circumstances, any ambiguity or inconsistency must, in law, be resolved in favour of the taxpayer. Ovais argued that the proviso added to Section 4C is inherently discriminatory as it treats people falling under the same class and category differently. The purpose of the statute is relevant when determining intelligible differentia, and here the purpose is clearly the imposition of an income tax. However, people earning the same income are treated differently under the proviso, creating unequal burdens within a uniform class of taxpayers. On the face of it, there is no intelligible differentia that justifies this disparate treatment. He asked the bench that the judgments rendered by the Islamabad High Court in the Fauji Fertilizer Co. Ltd. v. Federation of Pakistan and by the Sindh High Court in Shell Pakistan Ltd. v. Federation of Pakistan are sound in law and ought to be upheld. After Ovais, Farogh Naseem commenced his arguments, as he was presenting his case. The bench adjourned the hearing until today (Thursday). Copyright Business Recorder, 2025

Date: 2025-10-02

Details: Islamabad, October 2, 2025 â€“ The Federal Board of Revenue (FBR) is preparing to invoke strict economic restrictions on individuals who fail to file their income tax returns for the year 2025. This step comes under the newly introduced Section 114C of the Income Tax Ordinance, 2001, which was added through the Finance Act 2025. Although the clause has been legislated, its enforcement has been delayed pending a formal notification from the government. FBR sources revealed that once the extended deadline of October 15, 2025, for filing income tax returns expires, the federal government is expected to issue the required notification. This will empower the FBR to enforce restrictions designed to bring more individuals into the tax net and strengthen the economic system of documentation. What Section 114C Enforces Section 114C essentially restricts certain high-value economic activities for individuals who are classified as â€œineligible personsâ€ due to their failure to file tax returns. Some of the key restrictions include: â€¢ Non-filers will be barred from booking, purchasing, or registering motor vehicles above a specified threshold. â€¢ Applications for buying or transferring immovable property above a certain value will not be processed. â€¢ Investment accounts for securities, mutual funds, or similar instruments will not be opened or maintained if they exceed the prescribed threshold. â€¢ Banks will restrict cash withdrawals from non-filersâ€™ accounts beyond the specified limit. These restrictions will not apply to non-resident individuals or public companies, except in cases related to high-value cash withdrawals. Moreover, individuals who file wealth statements or sources of investment and expenditure statements with sufficient declared resources will be treated as eligible. Impact on Economic System The enforcement of Section 114C is considered a major policy step aimed at discouraging tax evasion and broadening the tax base. By linking high-value transactions with tax compliance, the government hopes to curb the informal economy and promote financial transparency. Analysts believe that such measures will not only ensure fairness in the tax system but also contribute to stronger economic governance. The move is expected to increase compliance, especially from individuals engaging in high-value purchases such as cars, property, and financial investments. By introducing such targeted economic restrictions, the government aims to balance revenue generation with fiscal discipline. As the notification is likely to be issued after October 15, all eyes are on how effectively the FBR implements these provisions and whether it can translate into higher tax revenues without disrupting legitimate economic activities.

Date: 2025-10-02

Details: Karachi, October 2, 2025 â€“ Pakistan State Oil (PSO), the countryâ€™s largest energy supplier, has disclosed a series of income tax contingencies in its financial statements up to June 2025, highlighting long-standing disputes with the Federal Board of Revenue (FBR). The company outlined multiple assessments raised by the tax authorities, many of which are currently under litigation before appellate forums and higher courts. According to the disclosure, the Additional Commissioner Inland Revenue (ADCIR) passed several contentious orders in recent years. One major development occurred on March 26, 2025, relating to Tax Year 2024, which created a demand of over Rs. 568 million. PSO challenged the decision at the Islamabad High Court (IHC), where the court has suspended the order and merged it with a broader constitutional challenge against the Alternate Dispute Resolution Committee (ADRC) under Section 134A of the Income Tax Ordinance, 2001. The company, relying on its legal advisors, believes the matter will ultimately be decided in its favor and therefore made no provision in its accounts. Similarly, for Tax Year 2020, an order raised a demand of Rs. 59.4 million, which was later upheld at multiple appellate levels. However, PSO again sought relief before the IHC, maintaining its position that the ADRC framework lacks constitutional validity. Parallel disputes exist for Tax Years 2021, 2022, and 2023, involving tax demands running into billions of rupees. In each case, the company emphasized that based on legal counsel, there is a strong likelihood of success. The disclosure also revisited older assessments dating as far back as 2009. For instance, during Tax Year 2014 and 2015, the FBR raised staggering demands exceeding Rs. 35 billion, which were later rectified to Rs. 3.6 billion. Following appeals and rectifications, the figure was reduced to approximately Rs. 2.5 billion. Disputes from earlier years, including Tax Years 2009 to 2013, also remain under consideration before the Appellate Tribunal Inland Revenue (ATIR). PSO clarified that despite the massive figures involved, no accounting provisions have been recorded against these disputed demands. The management, citing the professional views of its tax advisors, stated that the issues revolve around interpretation of income tax laws and therefore remain contestable. The company underscored that the contested amounts are not final liabilities and will only materialize if the courts ultimately rule against PSO. Until then, these sums are treated as tax contingencies rather than actual obligations. The disclosure comes at a time when tax compliance and litigation are under greater scrutiny in Pakistanâ€™s corporate sector. Analysts believe PSOâ€™s approach reflects a cautious balance between transparency and financial prudence, ensuring shareholders remain informed without overstating liabilities. By sharing the detailed status of its income tax disputes, PSO reaffirmed its commitment to regulatory compliance while signaling confidence in favorable judicial outcomes. The final resolution of these matters, however, rests with the higher courts, where multiple petitions and appeals remain pending. PSO Income Tax Contingencies â€“ Summary Tax Year Tax Demand (Rs.) Status / Forum Current Position 2024 568,165,000 IHC (Merged with ADRC challenge) Order suspended, pending adjudication 2023 1,486,065,000 CIR (Appeals), ADRC, IHC Appeals filed, pending in High Court 2022 2,557,721,000 (later amended to 3,477,249,000) CIR (Appeals), ATIR, IHC Partially decided, still pending 2021 3,014,870,000 (later amended to 3,520,201,000, reduced to 3,477,249,000) CIR (Appeals), ATIR, IHC Partially decided, reference pending 2020 59,435,000 CIR (Appeals), ADRC, IHC Decided against PSO, pending High Court decision 2019 411,567,000 CIR (Appeals), ATIR Appeal pending 2018 207,773,000 CIR (Appeals), ATIR Appeal pending 2016â€“2017 2,685,964,000 CIR (Appeals), ATIR Partially decided, balance pending 2014â€“2015 35,992,978,000 (later rectified to 3,619,899,000, reduced to 2,532,750,000) CIR (Appeals), ATIR Partially decided, balance pending 2012â€“2013 3,096,173,000 CIR (Appeals), ATIR Mostly in favor, balance pending 2009â€“2011 4,598,246,000 (revised to 740,871,000) CIR (Appeals), ATIR Partial relief, balance pending Note: The reported tax amounts are under dispute and may change after legal proceedings. The final outcome will depend on court and regulatory decisions. Readers are advised to verify all figures through official financial statements. PkRevenue shall not be held responsible for any errors or omissions.

Date: 2025-09-30

Details: Written by Shahnawaz Akhter in Taxation, Top stories Karachi, September 30, 2025 â€“ In a scathing attack on the Federal Board of Revenue (FBR), the Karachi Tax Bar Association (KTBA) has accused the tax authority of creating a â€œ2025 return filing disasterâ€ through mismanagement of its online system, IRIS. The bar associationâ€™s blistering letter to the FBR chairman alleges widespread negligence, legal violations, and a complete disregard for taxpayersâ€™ statutory rights. According to KTBA President Ali A. Rahim, taxpayers across Pakistan have been left stranded as repeated breakdowns and constant tinkering with the IRIS portal made return filing for Tax Year 2025 a nightmare. â€œWhat we are witnessing is not just a technical glitchâ€”it is an institutional failure,â€ the letter declared. The controversy erupted after the FBR issued the final return of income for Tax Year 2025 on August 18, 2025, through SRO 1562(I)/2025. Critics say this was in blatant violation of Rule 34A of the Income Tax Rules, 2002, which prescribes timely notification. The delayed issuance cut short the filing period to a mere 31 + 17 days, creating chaos for taxpayers and consultants. Making matters worse, the FBR continued to modify return formats on the IRIS portal during this already compressed timeframe. Shockingly, on September 24, a new column titled â€œEstimated Current Market Valueâ€ was inserted in the assets and liabilities statement, only to be hastily withdrawn on September 26. Experts argue such arbitrary changes without following Section 237 of the Income Tax Ordinance, 2001, are legally questionable and erode trust in the system. Tax professionals complain that hours have been wasted on repeated login attempts and failed uploads due to chronic instability of IRIS. Despite repeated reminders, KTBA says its requests for meetingsâ€”whether virtual or in-personâ€”were ignored by FBR officials. In its letter, the association demanded that the FBR release a complete log of IRIS breakdowns under the Right of Access to Information Act, 2017. It further urged a total overhaul of the system to bring it in line with legal requirements, while also demanding that the return of income be re-notified to allow taxpayers the full statutory 90 days under Section 118 of the Income Tax Ordinance, 2001. The KTBA went further, insisting that the FBR owes taxpayers a public apology: for violating legal procedures, misleading them about IRIS functionality, and depriving them of their lawful filing period. â€œThis fiasco has shaken confidence in the very institution tasked with revenue collection,â€ the association concluded, demanding urgent corrective action.

Date: 2025-09-29

Details: ISLAMABAD: Tax advisers, lawyers, chartered accountants and tax practitioners have requested Chairman Federal Board of Revenue (FBR) to extend date for filing of income tax returns up to November 30, keeping in view hurdles in the â€œIRISâ€ system, changes in returns, floods in Punjab/Sindh and technical issues in return filing system According to a letter of Chairman Pakistan Tax Advisers Association and Advocate Supreme Court Javed Iqbal Qazi, Chairman, we take this opportunity to request for extension in time for filing of Income Tax returns/Wealth statements for the Tax Year 2025 which falls due on 30.09.2025. The extension has been sought keeping in view financial constraints/crises in country, very slow functioning of IRIS system, load shedding problems being faced in different areas of the country and heavy burden on Tax Practitioners, Advocates and Chartered Accountants. Qazi is of the view that the target fixed for number of returns cannot be achieved by September 30, 2025. The quantum of returns required to be filed by the taxpayers through the above noted three categories of the Tax Practitioners is too heavy and requires lot of time for the preparation of returns, deposit of tax through system in the Banks and submission on IRIS system. Pakistan Tax Advisers Association has received many massages from members throughout the country seeking FBR help for the redressal of the genuine demand of the public at large and to achieve the financial targets fixed by FBR. Frequent amendments were made in the income tax return after nothing the same. Following intervention of the Federal Tax Ombudsman (FTO), the FBR has rectified a major error in filing of income tax return by the salaried class and removed the condition of submitting â€œcorrect receipt valueâ€ from the return. Subsequently, FBR has withdrawn major changes made in the wealth statement. Referring to the request of other relevant associations, he said that the IRIS portal remained unresponsive for many days in the past. This situation is causing severe hardship to tax consultants and taxpayers alike, as it compels them to work late into the night under undue pressure. The persistent hurdles In IRIS that are creating unnecessary hindrance in the smooth and timely filing of tax returns. It is necessary that these issues be resolved on an urgent basis to ensure compliance without hardship and to maintain the credibility of the tax system. In view of above, and in the interest of justice and fair play, it is therefore, most respectfully prayed that the Taxpayers, the Tax Practitioners be facilitated and the last date of filing of returns be extended to November 30, 2025 instead of 30.09.2025. An early action in the matter will be highly appreciated, Javed Iqbal Qazi added.

Date: 2025-09-29

Details: ISLAMABAD: A tax expert has expressed serious concern over the likely slowdown of the Federal Board of Revenueâ€™s (FBR) â€œIRISâ€ system during the last two working days of income tax return filing, as the total number of returns filed till Sunday stood at around 3 million. When contacted, Asif S Kasbati, Senior Member of the ICAP Fiscal Laws Committee, told Business Recorder that the current filing number of around 3 million is far less than the taxpayers appearing on the Active Taxpayers List (ATL). He suggested that taxpayers on the ATL should be given an opportunity to file their returns during an extended period, which the FBR may announce. Individuals, Associations of Persons (AOPs), and certain companies with year-ends between July 1, 2024, and June 30, 2025, are required to file Tax Year (TY) 2025 returns on or before September 30, 2025. Owing to more than 15 reasons, Kasbati argued that an extension in the filing deadline till October 31, 2025 is inevitable. He appreciated the role of Tax Bars in highlighting glitches in the return forms and IRIS issues. Kasbati elaborated that under Section 118 of the Income Tax Ordinance: (a) Individuals and AOPs with a year from July 1, 2024, to June 30, 2025, and (b) Companies with a year-end between July 1, 2024, and December 31, 2024, are required to file their TY 2025 returns on or before September 30, 2025. Based on his 33 years of tax experience, he believed that a general extension until October 31, 2025 is most likely. He pointed out that the FBR missed deadlines for issuing final return forms, despite Rule 34A (2)(e), (3), and (4), which required issuance by January 1, 2025. Instead, the forms were delayed by more than six months, with eight categories of electronic forms notified through SRO 1562 on August 18, 2025. Similarly, the so-called simplified electronic return forms for salaried individuals (not having business income) were issued vide SRO 1561. Kasbati added that torrential rains and devastating floods in Khyber Pakhtunkhwa, Punjab, and Sindh during August and September 2025 disrupted office work, slowed internet speed nationwide, and caused severe cash flow issues, despite government claims of economic improvement. He further noted that the IRIS system was either non-functional or extremely slow for several days in September 2025. Moreover, a late change requiring fair market value of property was incorporated in late September but withdrawn on September 26, 2025, just four days before the deadline. Kasbati predicted that IRIS is likely to work very slowly on September 29-30, 2025, as has been experienced in previous years. He highlighted that similar deadlines add pressure on the system, such as the annual sales tax return deadline on September 30, 2025, and the e-invoicing and integration deadline for companies with a turnover above one billion rupees on October 15, 2025. Referring to tax base broadening, he recalled that former Finance Minister Shaukat Tarin had stated there were 15 million non-filers, while former special assistant to the PM Dr Waqar Masood had mentioned 7.4 million. Kasbati expected that a minimum of 10 million returns should be filed for TYs 2024 and 2025, compared with 8.1 million taxpayers on the ATL as of September 26, 2025. He appreciated a 43.62 percent increase in filings compared to TY 2023 but noted that tax collection from new taxpayers has not risen accordingly. Based on his experience, he estimated that less than 30 percent of required returns would be filed by the deadline, even against the benchmark of 8.1 million in TY 2024. For ease of doing business, Kasbati urged that relief be given by extending the deadline to October 31, 2025, for those unable to file by September 30, 2025. This, he said, would enhance taxpayersâ€™ confidence in the government and reduce the trust deficit. On technology reforms, he recalled that the Prime Minister had ordered the closure of PRAL by December 2025, as the government had obtained a USD400 million foreign loan in 2019 for IT upgrades, of which USD80 million was earmarked for technology. However, reforms could not be implemented due to divided responsibilities. He noted that establishing a new organisation by December would be challenging, especially as the authorities failed to hire a chief information security officer despite repeated attempts. Kasbati pointed out that the Pakistan Tax Bar Association (PTBA), Karachi Tax Bar Association (KTBA), Lahore Tax Bar Association (LTBA), and other bars, as well as, several trade bodies have already requested a one-month extension. He expected more applications from different organisations shortly. He advised taxpayers to file their returns as soon as possible by September 30, 2025, or by the extended deadline, if granted, to avoid default surcharge, penalties, and notices. He also recommended submitting online extension applications under Section 119 as a precaution.

Date: 2025-09-28

Details: Islamabad, September 28, 2025 â€“ The Federal Board of Revenue (FBR) has issued a strong warning as the tax deadline Pakistan 2025 approaches. The last date for income tax return filing 2025 is September 30, and the FBR has made it clear that penalties will be enforced for non-filing of returns. According to official sources, failure in return filing will activate tough measures under Section 114B of the Income Tax Ordinance, 2001. This law empowers the FBR to issue general orders against individuals who are liable to file a return but have failed to meet their obligation. The consequences for non-filing are severe. They include suspension of mobile SIMs, disconnection of electricity or gas supply, and even restrictions on foreign travel. However, exemptions will apply for certain categories such as overseas Pakistanis holding NICOP, minors, students, and individuals traveling abroad for Hajj or Umrah. The FBR has clarified that once a taxpayer completes their return filing, or if it is verified that they are not liable to file a return, their blocked facilities such as utilities and mobile services will be restored. Officials also explained that no one will face enforcement action without first receiving notices, and only after the compliance period has expired without a return submission. Experts note that this enforcement of FBR penalty return filing is part of the governmentâ€™s broader strategy to expand the tax base and discourage chronic non-filers. In addition to service suspensions, other legal actions such as fines and prosecution remain possible. Tax advisors strongly recommend that individuals and businesses avoid last-minute pressure and ensure timely compliance. Filing on time keeps taxpayers on the Active Taxpayers List, which also provides benefits such as lower withholding tax rates. With the September 30 tax deadline Pakistan 2025 only days away, the FBRâ€™s warning is a final call for taxpayers to complete their income tax return filing 2025 without delay to avoid disruption of essential services and possible legal action.

Date: 2025-09-26

Details: KARACH: In a sharp critique of the Federal Board of Revenue (FBR), Salim Valimuhammad, Chairman of the Pakistan Chemical & Dyes Merchants Association (PCDMA), has demanded an urgent extension of the income tax return filing deadline beyond September 30, following abrupt and sweeping changes to the filing process. Valimuhammad expressed deep concern over the last-minute amendments made to the Income Tax Return and Wealth Statement forms for Tax Year 2025â€“26. These include mandatory disclosure of all properties at their Estimated Current Market Value (ECMV) and listing of each asset individually. Calling the move ill-timed and unplanned, he said: â€œThese changes were introduced without prior consultation or technical preparedness. Expecting taxpayers to comply on such short notice is unrealistic. This is causing serious disruption, especially for small & medium business owners.â€ He added that the FBRâ€™s updated online systemâ€”rolled out just days before the deadlineâ€”is plagued with technical glitches and repeated crashes, making it extremely difficult for users to file returns. Taxpayers who already submitted returns under the old format are now being asked to re-declare assets as per the new rules, creating confusion and stress. â€œThere is no clarity on how amendments will be managed. This is leading to mass uncertainty,â€ Valimuhammad said. He also highlighted that many regions face poor internet access, and the fast pace of regulatory change is overwhelming taxpayers. â€œMost people want to comply, but the system and timing are working against them.â€ The PCDMA has formally appealed to the Ministry of Finance and the Prime Ministerâ€™s Office to extend the filing deadline to November 30, 2025, giving taxpayers and consultants time to understand and adjust. Valimuhammad concluded by urging the FBR to adopt predictable, long-term tax policies. â€œMajor reforms like market valuation should follow a 5 to 10-year roadmap. Sudden changes only fuel chaos and non-compliance.â€ Copyright Business Recorder, 2025

Date: 2025-09-26

Details: KARACHI: Around 250,000 taxpayers, who have filed income tax returns under deadline, are now compelled to resubmit their returns after the insertion of â€œEstimated Current Market Valueâ€ option in income tax returns by FBR on September 23, 2025. Speaking at a joint press conference held at KPC here, Anwar Kashif Mumtaz, President, Pakistan Tax Bar Association along with Ali A Rahim ,President, Karachi Tax Bar Association and others confirmed that around 25 percent or 250,000 taxpayers have submitted their returns and after the insertion of â€œEstimated Current Market Valueâ€ option in income tax returns by FBR on September 23, 2025, they have no option but to resubmit their returns. Therefore, tax experts have strongly demanded the removal of â€œEstimated Current Market Valueâ€ option in income tax returns and extend the deadline for e-filing of income tax returns till October 30, 2025. Anwar Kashif highlighted the severity of the situation, saying that five to six amendments have already been made in the income tax returns this year. â€œWe are being forced to file returns repeatedly due to these constant changes,â€ he said. The IRIS continues to face significant technical problems during past 10 years, with PRAL and FBR failing to deliver timely solutions, Kashif said and demanded to improve or change the system. â€œOfficials have no idea how many difficulties this will create for return filing. They are only concerned with meeting IMF conditions,â€ Kashif said expressing frustration with the governmentâ€™s priorities. â€œUnlike International practice where tax return software remains stable, IRIS system undergoes frequent changes that create confusion and technical glitches,â€ The PTBA president said, expressing fear that the number of return filers this year will not exceed last yearâ€™s figures due to these complications. â€œTax consultants are facilitators for the government. Taxpayers ask what facilities they get in return for paying taxes. If the tax system is improved, transparency will automatically follow,â€ Kashif said. Ali Rahim demanded the government to focus on improving the fundamental tax system rather than making frequent cosmetic changes that only add to taxpayer confusion and compliance costs. Muhammad Zubair, Senior Vice President PTBA, Faiq Raza Vice President, KTBA, Rehan Siddiqui, General Secretary PTBA and Shams Mohiduddin Ansari General Secretary KTBA attended the event. Copyright Business Recorder, 2025

Date: 2025-09-26

Details: Islamabad, September 26, 2025 â€“ The Federal Board of Revenue (FBR) has officially withdrawn the controversial column requiring taxpayers to declare the estimated market value of their assets in the annual income tax return for tax year 2025. The decision was taken on the instructions of the Prime Minister, aimed at easing the compliance burden and addressing widespread criticism from stakeholders. Earlier, the FBR had introduced a column in the IRIS system that demanded filers to disclose the fair market value of both movable and immovable assets. This step was justified as a data collection exercise to build a stronger fiscal record and support research for the Economic Survey. However, the addition drew strong objections from taxpayers, legal experts, and business groups who argued that estimating market value for diverse assets would be cumbersome, subjective, and likely to create disputes. To resolve the matter, the Prime Minister formed a high-level committee chaired by the Federal Minister for Law, Senator Azam Nazeer Tarar. Members included the Federal Minister for Petroleum, Minister of State for Finance, Attorney General for Pakistan, Secretary Finance, Chairman FBR, Member Customs, and the Special Assistant to the Deputy Prime Minister. The committee held extensive deliberations on September 26, reviewing the implications of including the market value requirement. After thorough analysis, it unanimously recommended that the column be deleted in the interest of simplification and taxpayer facilitation. The Prime Minister approved the recommendation the same day. Consequently, the FBR has removed the â€œEstimated Fair Market Valueâ€ column from the return form. The tax authority clarified that the requirement had no impact on income assessment or tax liability. Instead, it was introduced only to enhance the governmentâ€™s statistical base. The FBR reaffirmed its commitment to creating a taxpayer-friendly environment and reminded filers that the deadline for submission of income tax returns remains September 30, 2025.

Date: 2025-09-26

Details: KARACHI â€“ Shabbar Zaidi, Pakistanâ€™s top tax expert and former chairman of the Federal Board of Revenue (FBR), has raised serious concerns over the revised Wealth Tax Statement introduced for the 2025 tax period. Under the new form, taxpayers are now required to disclose the â€œEstimated Current Market Valueâ€ of their assets. Zaidi argues that this amendment contradicts the fundamental concept of a wealth statement under Section 116 of the Income Tax Ordinance, 2001, and should be withdrawn immediately. Zaidi explained that the Wealth Statement is already a unique requirement of Pakistanâ€™s tax code. â€œThere is no such obligation in almost all countries, including India and the UK,â€ he said, noting that this distinction was also documented in his book Taxation of Non-Residents and further discussed by Justice Maqbool Baqir in the Qazi Faiz Isa case. According to Zaidi, the Wealth Statement is not wholly related to annual income. Increases or decreases in net wealth may occur through events unrelated to taxable income, such as gifts or inheritance. Therefore, compelling taxpayers to declare market value distorts the real purpose of the statement, which is simply to reconcile changes in wealth with declared income. He further noted that historically, the wealth statement originated in Section 22(4A) of the Income Tax Act, 1922, when officers were authorized to call for a statement of assets to ensure disclosure of income. Later, under Section 58(2) of the repealed Income Tax Ordinance, 1979, compulsory filing was introduced, but always on the principle of cost accounting, not fluctuating market values. Zaidi also emphasized the constitutional limitations of such a prescription. â€œThe Constitution only empowers the legislature to tax income. While additional information such as a wealth statement can be sought to confirm income disclosure, no law can compel taxpayers to determine or disclose the market value of their assets,â€ he said. Drawing a distinction between the current Wealth Statement and the repealed Wealth Tax Act, 1963, Zaidi explained that the latter had a defined valuation framework. In contrast, Pakistanâ€™s current wealth statement carries no such legal basis for assigning market value. He pointed out that Indiaâ€™s Wealth Tax Act was repealed in 2015 for the same reason. Concluding, Zaidi criticized the timing of the amendment, introduced just days before the filing deadline, and called for its removal. He recommended detailed deliberations during the next fiscal year rather than hasty prescriptions that complicate compliance.

Date: 2025-09-26

Details: KARACHI â€“ Leading tax practitioners have urged the Federal Board of Revenue (FBR) to withdraw the recently added requirement of declaring the estimated market value of assets in income tax returns for the year 2025. At a joint press conference at the Karachi Press Club, Pakistan Tax Bar Association (PTBA) President Anwar Kashif Mumtaz, Karachi Tax Bar Association (KTBA) President Ali A. Rahim, and other representatives criticized the abrupt changes introduced on September 23. They noted that many taxpayers had already filed their returns before the â€œEstimated Current Market Valueâ€ option appeared, forcing them to revise and resubmit their filings. The speakers demanded that the FBR immediately remove the market value requirement and extend the filing deadline to October 30, 2025, so taxpayers are not penalized for delays caused by these last-minute amendments. Anwar Kashif said taxpayers have been forced to file returns repeatedly this year as the FBR made five to six major changes to the return forms. He highlighted that IRIS, the online tax filing portal, continues to face technical issues even after a decade of use, with little progress from PRAL and the FBR in resolving them. He further criticized policymakers, arguing that the changes appear more focused on meeting IMF obligations rather than easing taxpayer compliance. â€œIn most countries, tax return software remains stable throughout the filing season. Here, frequent updates create confusion, errors, and technical glitches,â€ he said. Tax bar leaders also warned that the number of return filers may fall below last yearâ€™s figures if the system remains unstable and burdensome. They stressed that tax consultants play a vital role in helping the government expand its tax base, but unnecessary hurdles discourage compliance. Ali Rahim added that instead of cosmetic adjustments such as inserting market value fields mid-season, the government should focus on building a strong, transparent, and reliable tax system that promotes voluntary compliance. Other senior PTBA and KTBA members, including Muhammad Zubair, Faiq Raza, Rehan Siddiqui, and Shams Mohiduddin Ansari, also attended the press conference in support of these demands.

Date: 2025-09-25

Details: Islamabad, September 25, 2025 â€“ The Federal Board of Revenue (FBR) has issued a detailed clarification regarding the 2025 income tax return filing process, addressing widespread confusion on social media. The tax authority emphasized that while no new amendments have been introduced to the return form, the requirement of declaring the market value of assets has been made mandatory for filing. According to the FBR, misleading claims have circulated online suggesting that new changes were suddenly imposed through a fresh SRO. The FBR rejected these reports, reiterating that the Income Tax return form for tax year 2025 was officially notified and uploaded on its website on July 7, 2025. On page 66 of the return form, it was clearly specified that taxpayers are required to enter the market value of assets. During scrutiny of returns already filed, authorities noticed that several taxpayers were entering â€œzeroâ€ in the column for current market value. This prompted the FBR to restrict the option, ensuring that authentic information is entered during the return filing process. The clarification further explained that for most taxpayers, the declaration of market value will not affect tax liability. No complex research or formal valuation is requiredâ€”except for high-net-worth individuals already subject to Section 7E provisions. The declaration is primarily for record-keeping and does not impact wealth statement reconciliation. To ease concerns, the FBR assured that taxpayers who have already completed their return filing will not be required to revise or re-file. The data entered will not alter tax computation, and no notices will be issued solely on account of minor errors in market value reporting. However, taxpayers are encouraged to provide estimates as close as possible to the actual market worth of their assets. The FBR also confirmed that its IRIS portal is operating smoothly and fully functional for return filing. Citizens have been urged to avoid misinformation, rely only on official announcements, and complete their income tax return filing before the September 30, 2025 deadline.

Date: 2025-09-25

Details: KARACHI, September 25 â€“ The business and industrial community has united in harsh criticism of the Federal Board of Revenue (FBR) for making sudden amendments to the 2025 income tax return and wealth statement forms just days before the September 30 deadline. Salim Valimuhammad, Chairman of the Pakistan Chemical & Dyes Merchants Association (PCDMA), demanded an urgent extension in the filing deadline, warning that the abrupt changes in the return form have created widespread disruption. He noted that taxpayers are now required to disclose all properties at their Estimated Current Market Value (ECMV) and list assets individually. â€œIntroducing such sweeping reforms without consultation is impractical,â€ he said, adding that the FBRâ€™s online system continues to face technical glitches, preventing smooth filing of returns. Similarly, SITE Association of Industry (SAI) President Ahmed Azeem Alvi described the amendments to the tax return form as â€œunfair and unjust,â€ especially for taxpayers who had already submitted returns under the earlier format. He cautioned that such moves are eroding trust in the tax regime. â€œThe FBR is paradoxically punishing those who comply on time while sending a damaging signal to the business community,â€ Alvi said. Both leaders argued that frequent and last-minute changes discourage compliance and risk pushing businesses into the undocumented economy. They emphasized that major reforms should be rolled out gradually, with a clear roadmap and consultation with stakeholders. â€œPolicy changes must be transparent and predictable; otherwise, compliance will suffer,â€ Valimuhammad warned. The PCDMA and SAI have jointly appealed to the Ministry of Finance and the Prime Ministerâ€™s Office to extend the filing deadline to November 30, 2025. They concluded that sustainable tax policy requires stability, dialogue, and a focus on ease of doing business â€” not on creating unnecessary hurdles for genuine taxpayers.

Date: 2025-09-24

Details: Islamabad, September 24, 2025 â€“ In a dramatic twist, the Federal Board of Revenue (FBR) has stunned taxpayers by abruptly amending the wealth statement form for the tax year 2025, sparking widespread confusion, speculation, and even whispers of a looming wealth tax. The latest amendment makes it compulsory for taxpayers to declare the market value of both movable and immovable properties. According to Zeeshan Merchant, former President of the Karachi Tax Bar Association (KTBA), â€œWithout disclosing the market value of property, you cannot complete your return filing.â€ This sudden shift has ignited fiery debate over the legality of the filing process in the middle of tax season. As shockwaves ripple through the tax fraternity, practitioners have already halted the filing process. The new requirements extend beyond real estate, covering wealth in the form of gold, debentures, shares, funds, and even household furniture. Critics argue the abrupt policy change is an unfair hurdle for taxpayers scrambling to meet deadlines. A former FBR official, speaking on condition of anonymity, revealed that the hidden objective may be broader: paving the way for the revival of a wealth tax. Such provisions, the official recalled, were once an integral part of the wealth statement under earlier tax regimes. Adding fuel to the fire, the Regional Tax Office (RTO) Islamabad has urged the FBR to incentivize whistleblowers to unearth black money and hidden assets. Meanwhile, the KTBA is set to hold a fiery press conference on September 25, with strong rumors of boycotting return filing altogether. The sudden amendment of the wealth statement form has turned routine compliance into a high-stakes treasure hunt, leaving taxpayers, professionals, and policymakers on edge. 2025 TAX RETURN FILING STOPPED IN PAKISTAN AFTER ABRUPT IRIS UPDATE Karachi, September 24, 2025 â€“ A storm of confusion has erupted across Pakistan as tax practitioners have abruptly stopped the filing of annual income tax returns for the year 2025. The sudden halt comes after shocking and unannounced changes were introduced in IRIS, the Federal Board of Revenueâ€™s (FBR) online tax portal. On Wednesday morning, the FBR quietly updated the 2025 tax return form, making it mandatory for taxpayers to declare the market value of all movable and immovable assets before they could proceed. The move triggered immediate outrage among tax professionals who labeled the decision â€œillegalâ€ and beyond the FBRâ€™s authority. â€œYou simply cannot move ahead with filing unless you declare property values in the new return form,â€ said Muhammad Zeeshan Merchant, former president of the Karachi Tax Bar Association (KTBA). He further questioned the legal status of the returns already filed before the amendment, arguing that any such change must first be notified through the official Gazette. While no official figures are available, estimates suggest that nearly 1.5 million tax returns may have already been submitted prior to the sudden update. The development has thrown taxpayers, businesses, and consultants into disarray, with many warning that compliance may grind to a halt if clarity is not provided immediately. Already struggling with glitches on IRIS, stakeholders fear that this abrupt change will unleash fresh complications, turning the 2025 tax filing season into one of the most chaotic in Pakistanâ€™s history.

Date: 2025-09-24

Details: Islamabad, September 24, 2025 â€“ The Federal Board of Revenue (FBR) has officially extended the deadlines for the implementation of electronic invoice issuance, granting additional time to businesses and taxpayers to integrate with the online FBR portal. The decision was made after consultations with stakeholders who had requested more time to comply with the technical and operational requirements of the system. According to the notification issued through SRO 1852(I)/2025, the new deadlines cover registration, testing, and live issuance of electronic invoice obligations for different categories of taxpayers. This extension follows the earlier directive under SRO 1413(I)/2025, dated August 1, 2025, which had initially laid down shorter timelines. The FBR emphasized that the implementation of the electronic invoice system is a crucial reform aimed at enhancing transparency, improving tax compliance, and curbing tax evasion. By digitizing business transactions, the FBR expects to streamline recordkeeping, reduce fraudulent activities, and strengthen the overall tax base. Businesses are strongly advised to ensure readiness before their respective deadlines to avoid penalties and disruptions in operations. The revised deadlines are as follows: S. No. Category Registration Deadline Testing Deadline E-Invoice Issuance Deadline 1 All public companies Oct 15, 2025 Oct 25, 2025 Nov 1, 2025 2 Companies (turnover > Rs1b) Oct 15, 2025 Oct 25, 2025 Nov 1, 2025 3 All importers Oct 15, 2025 Oct 25, 2025 Nov 1, 2025 4 Companies (Rs100mâ€“1b turnover) Oct 25, 2025 Oct 31, 2025 Nov 15, 2025 5 Companies (turnover â‰¤ Rs100m) Nov 15, 2025 Nov 25, 2025 Dec 1, 2025 6 Individuals/AOPs (turnover > Rs100m) Oct 10, 2025 Oct 25, 2025 Nov 1, 2025 7 All other registered persons Dec 10, 2025 Dec 25, 2025 Dec 31, 2025 The FBR reiterated that all taxpayers must comply within the extended timelines. Complete and accurate records will be required for monitoring, and non-compliance may result in legal or financial consequences. The electronic invoice framework, the FBR added, will ultimately modernize Pakistanâ€™s taxation system and provide long-term benefits for businesses and the economy.

Date: 2025-09-24

Details: Karachi, September 24, 2025 â€“ The Karachi Tax Bar Association (KTBA) on Wednesday formally requested the Federal Board of Revenue (FBR) to extend the deadline for filing income tax returns for Tax Year 2025, citing serious technical and logistical challenges that are preventing taxpayers from meeting the statutory due date. In a letter addressed to Rashid Mahmood Langrial, Chairman of the FBR, President of the Karachi Tax Bar, Ali A. Rahim, emphasized that KTBA has been closely monitoring the filing process and repeatedly highlighted the significant impediments caused by the IRIS system. Despite these warnings, the problems have not only persisted but worsened, severely restricting taxpayersâ€™ ability to comply with legal obligations. The Karachi Tax Bar explained that IRIS, being the sole portal for income tax, sales tax, and invoice integration compliance, frequently collapses under heavy digital traffic, particularly during working hours. This systemic failure has been compounded by several critical issues: 1. Systemic Breakdown Near Deadlines: Historical patterns show that as the statutory deadline approaches, IRIS often becomes virtually inoperative, leaving taxpayers and consultants unable to complete filings. 2. Technical Glitches and Legal Errors: Numerous computation errors and software glitches in the return forms make filing practically impossible. KTBA has repeatedly reported these issues, yet no acknowledgment has been received from the FBR. 3. Frequent Changes in Return Forms: Continuous modifications in formulas and computations, along with disappearing saved drafts after updates, have caused significant delays and wasted effort. 4. Post-Flood Challenges: The recent floods have left severe financial and emotional impacts, especially on business owners linked to the agriculture sector, making timely filing unrealistic for many. Given these extraordinary circumstances, the Karachi Tax Bar respectfully urged that the statutory deadline for filing Tax Year 2025 returns be extended to October 31, 2025. The association recommended that the FBR exercise powers under section 214A read with section 119 of the Income Tax Ordinance, 2001, to grant this extension, ensuring taxpayers can comply meaningfully without undue stress or penalty. The Karachi Tax Bar stressed that granting this extension will help protect taxpayersâ€™ rights, prevent systemic chaos, and allow for proper filing amidst persistent IRIS portal failures and ongoing natural disaster recovery.

Date: 2025-09-22

Details: HYDERABAD: President Hyderabad Chamber of Small Traders & Small Industry (HCSTSI), Muhammad Saleem Memon has called upon the federal minister for Finance and Revenue and the chairman of the Federal Board of Revenue (FBR) to grant at least a 48-day extension in the deadline for filing income tax returns. He stressed that this relief is essential to facilitate taxpayers and protect them from unnecessary penalties and hardships. President Saleem Memon stated that millions of taxpayers across the country are currently facing two major challenges. Firstly, the FBR this year introduced multiple new changes in the IRIS tax return filing system, including automated data uploading, interactive forms, and a new verification mechanism. However, the system has not yet become fully functional. Taxpayers and accountants are experiencing login problems, repeated error messages, and unclear issues such as â€œreceipt valueâ€ errors. Salaried individuals and traders alike have complained that despite days of effort, they remain unable to complete their returns. Strict adherence to the current deadline, under these circumstances, would unjustly penalize thousands of people. He further emphasised that the devastating flood situation has added to the crisis. Dozens of districts across Khyber Pakhtunkhwa, Punjab, and Sindh have been severely affected by torrential rains and flash floods, destroying hundreds of thousands of houses and killing thousands of livestock. Standing crops and thousands of acres of agricultural land have been washed away, while numerous bridges and hundreds of kilometers of roads have been damaged, paralyzing the transportation network. These challenges have also impacted urban centers, disrupting the supply of essential goods and severely hampering business activities. Additionally, the suspension of electricity, internet, and banking services in many affected regions has deprived both traders and salaried individuals of timely access to their financial records and accountants, making it nearly impossible to complete tax filing within the given timeframe. Expecting compliance under such extraordinary conditions, he argued, is unrealistic and unfair. Referring to the law, President Saleem Memon pointed out that under Section 118(3) of the Income Tax Ordinance 2001, tax returns must be duly notified on time. However, this year, the income tax return was notified only on 18th August 2025, with a delay of 48 days. Therefore, he asserted, taxpayers are legally entitled to a corresponding 48-day extension. Moreover, as per Rule 34A(e) of the Income Tax Rules, final return forms must be available on the IRIS portal by 31st January each year, a requirement the FBR has failed to meet. In such circumstances, maintaining 30th September as the final deadline is neither practical nor legally justified. He urged the government to immediately announce an extension in the filing deadline while also waiving penalties and late surcharges for taxpayers in flood-affected districts. HCSTSI President Saleem Memon added that such a step would not only provide much-needed relief to traders and the general public but would also strengthen trust between the government and taxpayers, ultimately encouraging higher compliance with the tax system.

Date: 2025-09-22

Details: ISLAMABAD: Pakistan Polypropylene Woven Sack Manufacturers Association (PPWSMA) has urged the Federal Board of Revenue (FBR) to strengthen tax collection by implementing the recommendations of the Federal Tax Ombudsman (FTO). In a letter to FBR Chairman Rashid Langrial, PPWSMA Chairman Iskandar Khan cited the FTOâ€™s order aimed at broadening the tax base and curbing evasion. The Association noted that the polypropylene industry manufactures woven sacks for industrial and commercial packaging from imported industry-specific polypropylene granules. However, commercial importers enjoy tax concessions on importing this raw material, which they mostly supply to unregistered polypropylene factories. This practice allegedly promotes tax evasion through â€œflying invoicesâ€ â€” enabling underpayment of sales tax on one hand, while also allowing untaxed production of sacks supplied to industrial and commercial users. Appearing before the Senate Standing Committee on Finance and Revenue, FBR Member Hamid Ateeq Sarwar testified that more than Rs873 billion worth of fake and flying invoices were unearthed last year, in addition to Rs1.37 trillion the previous year â€” taking the total to Rs2.25 trillion in just two years. The Association argued that mandatory QR-code printing on polypropylene sacks, linked to the FBR portal for real-time data, would help document unregistered factories and their end users. For his part, FBR Chairman Rashid Langrial acknowledged that Pakistan faces sales tax fraud exceeding Rs700 billion annually â€” far higher than other countries. He noted that although improvements in the system have been made, complete elimination of sales tax fraud remains unlikely. In light of FTO recommendations and ongoing tax challenges, PPWSMA proposed two measures: (i) ban on commercial imports of polypropylene raw material â€” only manufacturers registered under the Sales Tax Act, 1990 should be allowed to import; and (ii) mandatory QR-code printing â€” all polypropylene sacks in the specified goods list under Sub-Rule 150ZF of the Sales Tax Rules, 2006 should carry QR codes to document unregistered factories and industrial/ commercial consumers that facilitate tax evasion.

Date: 2025-09-21

Details: Islamabad, September 21, 2025 â€“ The Federal Board of Revenue (FBR) has formally introduced benchmarks for determining income tax exemptions and concessions, aiming to enhance clarity and consistency in the taxation system. The new framework highlights how tax reliefs are to be assessed against standard and special benchmark rates, ensuring that deviations are transparent and measurable. According to the FBR, the Income Tax Ordinance (ITO) 2001 considers the â€œpersonâ€ as the unit of taxation. Under this definition, a person can include individuals, companies, associations of persons (AOPs), or other legal entities. Each category is assessed on the basis of its taxable income, which may include salaries, rental income, business profits, capital gains, and other sources. A resident person, defined as an individual or entity spending at least 183 days in Pakistan within a tax year, is taxed on worldwide income, whereas non-residents are taxed only on income generated from within Pakistan. To avoid double taxation, a foreign tax credit is permitted, meaning taxes paid abroad can be adjusted against liability in Pakistan. Benchmarking of Rates For calculating tax expenditures, Schedule-1 of the ITO provides the standard benchmark. Corporate entities, for instance, are assessed at 39% for banking companies, while other companies, including SMEs, face an average benchmark of 24.5%. Where losses are declared, a minimum tax of 1.25% applies. Income from exports is benchmarked at 1%. Any tax relief below these levels is treated as a concession or exemption. Procedural Clauses and Deferred Taxation Certain clauses in the ITO grant relief from immediate withholding requirements. These provisions, often viewed as procedural, are not always considered true tax expenditures, since liability is eventually collected when returns are filed. An example is the waiver of withholding tax on Behbood Savings Certificates for old-age citizens. While these are technically exemptions, they are more accurately deferred obligations rather than outright revenue loss. Data Limitations and Transparency The FBR acknowledges limitations in collecting comprehensive data. In some cases, it is difficult to confirm whether deferred taxes were eventually recovered. Where verification is not possible, the amounts are included in the overall tax expenditure estimates. The report also identifies structural exclusions, such as agricultural income, inter-corporate dividends, and tax reliefs tied to Free Trade Agreements (FTAs). These exclusions are not categorized as concessions since they are part of the constitutional or international framework. Role of Subordinate Legislation Tax reliefs are frequently implemented through Statutory Regulatory Orders (SROs). These delegated instruments empower the government to grant targeted benefits to specific sectors. All such SRO-related concessions and exemptions have been incorporated into the latest estimates to provide a complete picture of revenue foregone. By issuing these benchmarks, the FBR seeks to provide policymakers, businesses, and taxpayers with greater clarity on the cost of tax incentives. The move is expected to strengthen fiscal discipline while ensuring that tax exemptions serve genuine economic and social purposes.

Date: 2025-09-17

Details: Terence J Sigamony Published September 17, 2025 ISLAMABAD: The Supreme Court was asked to uphold the Parliamentâ€™s fiscal autonomy and the presumption of constitutionality attached to the taxation statutes. A five-judge larger Constitutional Bench of the Supreme Court, headed by Justice Amin-ud-Din Khan, on Tuesday heard the appeals of the Federal Board of Revenue and the industries against the judgments of the Sindh, Lahore, and Islamabad High Courts regarding the Super Tax levied under Section 4C. The FBR counsels have completed their arguments, and the taxpayersâ€™ counsel from Karachi, Shahid Anwar, will resume his arguments from Wednesday (today). Hafiz Ehsaan Ahmad Khokhar, appearing on behalf of the FBR, submitted before the bench that the Supreme Court has repeatedly reaffirmed Parliamentâ€™s primacy in fiscal and economic matters, as reinforced by Entry 47 of the Federal Legislative List (Fourth Schedule), granting Parliament an exclusive power to legislate on taxes on income other than agricultural income. He argued that the Islamabad High Court, Lahore High Court, and Sindh High Court exceeded their lawful jurisdiction by effectively re-legislating under the guise of interpretation â€” a clear transgression of judicial authority that amounted to judicial overreach and undermined parliamentary supremacy. He cited recent landmark Supreme Court judgments, including Article 62 (1) (f), Article 63A, the Practice and Procedure Act, and Sunni Ittehad Council cases, where judicial overreach was struck down, and Parliamentâ€™s legislative competence was reaffirmed. He; therefore, prayed to the Supreme Court to set aside the impugned High Court judgments and declare Sections 4B and 4C to be constitutionally valid in their entirety. Khokhar stressed that taxation policy â€” including the determination of rates, incidence, and classes of taxpayers â€” lies within the exclusive wisdom of Parliament, and courts must exercise restraint unless there is a manifest breach of constitutional limits. He maintained that Article 189 underscores the binding nature of Supreme Court decisions and emphasised the need for judicial discipline across all High Courts. He argued that judicial interference with fiscal measures risks disrupting revenue collection, destabilising investor confidence, and undermining fiscal planning. Sudden shifts in the interpretation of Sections 4B and 4C, he warned, upset the constitutional balance between legislative competence and judicial review. Khokhar said that Super Tax under Section 4C of the Income Tax Ordinance is not double taxation and is fully consistent with Article 25, which guarantees equality before law but permits reasonable classification based on rational criteria. Dr Shah Nawaz, another FBR counsel, argued that there is no retrospectivity, as the basic principle of income tax is that it applies the law as it stands on the 1st day of July, so the finding of the SHC that it will apply from next year, 2023, is an incorrect approach. He then referred to the Elahi Cotton judgment to argue that the arguments of retrospectivity were rejected by the Supreme Court in paragraph No.12, read with 56 of the judgment, adding that the same view is expressed by the Supreme Court in Mst Waziruniisa case and the Sindh High Courtâ€™s verdict in Shahnawaz Pvt Ltd. Regarding vested rights, Dr Shah Nawaz argued that vested interest could only be created by the operation of law. In that regard, he referred to the Molasses case, wherein it was held that the rate of duty was fixed by operation of law. The same view was taken in the Mekotex case and Shahnawaz Pvt Ltd and Anwar Yahya case, he added. The hearing was adjourned until today (Wednesday).

Date: 2025-09-13

Details: Written by Shahnawaz Akhter in Taxation Karachi, September 13, 2025 â€“ The Federal Board of Revenue (FBR), through the updated Income Tax Ordinance, 2001, has provided a detailed explanation of the method of accounting that taxpayers must follow for the tax year 2025-26. This update ensures clarity on how different categories of taxpayers should compute their taxable income. According to Section 32 of the Ordinance, a personâ€™s taxable income is to be calculated in line with the method of accounting that they consistently use. For companies, the rule is stricter: they are required to adopt the accrual basis of accounting for business income, meaning that income and expenses must be recorded when they are earned or incurred, regardless of actual cash movement. Other taxpayers, however, have some flexibility. Individuals or non-corporate entities can choose between cash or accrual methods, depending on what better reflects their business activities. Still, the FBR holds the authority to prescribe specific rules, requiring certain classes of taxpayers to adopt either cash or accrual accounting, ensuring uniformity across sectors where necessary. If a taxpayer wishes to change their method of accounting, they must apply in writing to the Commissioner. Approval will only be granted if the change is justified as necessary for an accurate reflection of taxable income. Importantly, when a method is changed, adjustments must be made to prevent double-counting or omission of income, deductions, or credits. Through these provisions, the FBR emphasizes consistency, transparency, and fairness in financial reporting, ensuring that the chosen method of accounting provides a true picture of a taxpayerâ€™s obligations. Disclaimer: This article is for informational purposes only. It summarizes provisions of the Income Tax Ordinance, 2001, regarding the method of accounting for tax purposes. It should not be considered legal or tax advice. For personalized guidance, consult a qualified tax advisor.

Date: 2025-09-09

Details: Sohail Sarfraz Published about an hour ago ISLAMABAD: The total federal tax expenditure for the fiscal year 2023â€“24 has been estimated at Rs 2,434.73 billion, according to the Tax Expenditure Report (2025) issued by the FBR on Monday. The report revealed that the total federal tax expenditure constitutes 26.18% of the FBRâ€™s total tax collection for FY 2023-24, marking a significant decrease from 54.15% recorded in the previous fiscal year. In terms of economic size, the total tax expenditure represents approximately 2.32% of GDP during fiscal year (2023-24), compared to 4.6% of GDP in the previous fiscal year. According to the report, the amount of Rs 2,434.73 billion is equivalent to 26.18% of the Federal Board of Revenueâ€™s (FBR) total tax collection (FY 2023-24 Rs. 9,299.08 billion) or 2.32% of the countryâ€™s Gross Domestic Product (GDP) FY 2023-24 Rs. 105,143 billion. This figure reflects the revenue foregone by the government due to various tax exemptions, concessions, and preferential treatments across different tax regimes. It is important to emphasize that the figures presented in this report are estimates and should not be interpreted to be meant that eliminating a given tax expenditure would result in an equivalent increase in government revenue. The actual fiscal impact of removing tax exemptions depends on several economic factors, including the nature of the activity affected, the responsiveness of taxpayers (elasticity), and prevailing market conditions. Additionally, this report does not cover any spillover effects that FBR tax expenditures might have on provincial tax systems. By offering a transparent overview of the revenue foregone through various tax provisions, this report aims to support evidence-based policy decisions and foster a more informed public debate on the structure and equity of the federal tax system in Pakistan. Overview of Federal Tax Expenditures (FY 2023â€“24) revealed that Income Tax Estimated Expenditure amounted to Rs. 545.23 billion. This is equivalent to 5.86% of the Federal Board of Revenueâ€™s (FBR) total tax collection or 22.39% of the overall tax expenditure or 0.52% of the countryâ€™s Gross Domestic Product (GDP). In case of Sales Tax, the estimated expenditure totaled at Rs. 1,237.11 billion. This is equivalent to 13.30% of FBRâ€™s total collection or 50.81% of the total tax expenditure or 1.18% of GDP. In case of customs duty, the estimated expenditure amounted to Rs. 652.39 billion. This is equivalent to 7.02% of FBRâ€™s total tax collection or 26.80% of the overall tax expenditure or 0.62% of GDP. Copyright Business Recorder, 2025

Date: 2025-09-09

Details: Sohail Sarfraz Published about an hour ago ISLAMABAD: The Federal Board of Revenue (FBR) has admitted that the revenue shortfall on account of tax exemptions/concessions granted to different sectors/areas has been compensated through alternative revenue collection measures covering development levies, surcharges, cesses, and other similar charges. According to the â€œTax Expenditure Report-2025â€ issued by the Federal Board of Revenue (FBR) on Monday, tax expenditures may not fully reflect the actual revenue foregone by the government as a result of policy measures implemented through various tax laws. Governments have a range of tools and methods for collecting tax revenues and granting concessions. The revenue lost under a particular tax regime may not represent a complete loss, as the government could offset this shortfall through other forms of levies that may not fall strictly under the categories of tax or customs duty. Examples of such alternative revenue collection methods include development levies, surcharges, cesses, and other similar charges. The report stated that eliminating a tax expenditure measure may not directly translate into the estimated revenue in the real world, as the relationship between tax expenditure and its cost estimate is often more â€œdynamicâ€ than a simple, linear conversion into revenue. Removing a tax expenditure measure can have broader economic implications, particularly on the size of industries and the overall level of economic activity. In practice, people and businesses tend to take advantage of any discounts or exemptions offered to them. The withdrawal of a tax incentive in a particular industry might lead businesses to exit that sector or shift their operations to industries with more favorable tax conditions, ultimately resulting in a decline in revenue. Additionally, the elimination of a specific tax expenditure could impact consumption levels, particularly if the good or service in question has â€œprice-elastic demand.â€ If the removal of taxrelief increases the price of a good or service, consumers may reduce their consumption, leading to lower revenue collection than initially expected. In this way, the actual revenue outcome could be contrary to the anticipated increase, highlighting the complex and often unintended consequences of changing tax policies, the report added. Copyright Business Recorder, 2025

Date: 2025-09-09

Details: Islamabad, September 9, 2025 â€“ Prime Minister Shehbaz Sharif has directed the Federal Board of Revenue (FBR) to intensify efforts in identifying tax evaders by fully utilizing its workforce and, where necessary, engaging private-sector expertise. Chairing a high-level meeting on Tuesday to review ongoing reforms within the tax machinery, Shehbaz emphasized the importance of building a business-friendly environment while providing maximum facilitation to compliant taxpayers. The prime minister underscored that regular taxpayers are the backbone of Pakistanâ€™s economy, and therefore, honoring them must remain a priority. He instructed the FBR to expedite the completion of the Income Tax and Sales Taxpayersâ€™ Directory, which will serve as a recognition tool for law-abiding citizens. At the same time, Shehbaz stressed that penalizing tax evaders is equally essential to broadening the tax base and ensuring fairness in the system. To make enforcement more effective, Shehbaz ordered the hiring of professional services for tracing tax evaders and recovering unpaid revenues. He also called for a nationwide public awareness campaign to highlight the governmentâ€™s initiatives against tax evasion, thereby encouraging voluntary compliance. The meeting was informed that super auditors had already been deployed to scrutinize customs clearance procedures and strengthen the risk management system. In addition, a scientific auditing framework has been developed to detect under-invoicing and mis-declaration, with third-party reviews being conducted by top international audit firms. These measures are aimed at eliminating loopholes and improving transparency in revenue collection. Shehbaz reiterated that while taxpayers must be honored, tax evaders cannot be allowed to weaken the countryâ€™s financial system. Federal ministers Azam Nazeer Tarar, Ahad Khan Cheema, Attaullah Tarar, Dr. Musadik Masood Malik, Muhammad Aurangzeb, Ali Pervez Malik, along with senior officials, attended the meeting and expressed their support for the reforms agenda.

Date: 2025-09-09

Details: Islamabad, September 9, 2025 â€“ The Federal Board of Revenue (FBR) has reaffirmed that tax concessions will continue to be available for scientific research in Pakistan for the tax year 2025â€“26. These concessions, outlined in Section 26 of the Income Tax Ordinance, 2001, are designed to encourage businesses to invest in knowledge-based activities and innovation. According to the updated law, any business incurring scientific research expenditure in Pakistan can claim a deduction, provided the spending is exclusively aimed at generating taxable income from business activities. This framework reflects the governmentâ€™s strategy of linking tax relief with long-term economic growth through scientific advancement. The Ordinance defines â€œscientific researchâ€ as any systematic activity in natural or applied sciences that develops human knowledge. Expenditures qualify if they are directed toward developing a business, including contributions made to recognized scientific research institutions. However, costs related to purchasing depreciable assets, immovable property, or exploring natural deposits are excluded. The FBR emphasized that only certified institutions are eligible to be categorized as scientific research bodies, ensuring credibility and accountability in the use of such concessions. This provision provides companies with an opportunity to collaborate with universities and research centers while reducing their tax burden. Experts believe that incentivizing research in Pakistan can enhance competitiveness, strengthen industries, and promote sustainable growth. By encouraging scientific exploration through tax incentives, the government hopes to foster innovation across sectors ranging from pharmaceuticals to information technology. Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Businesses should consult qualified tax professionals before making financial decisions.

Date: 2025-09-08

Details: Businesses often invest heavily in assets that are not physical but still hold tremendous value â€” such as patents, software, franchises, and trademarks. These assets, commonly known as intangibles, play a vital role in driving income and long-term business growth. Recognizing their importance, the Income Tax Ordinance, 2001, through Section 24, lays out the detailed framework for claiming amortization deduction during the tax year 2025-26. Letâ€™s break this down step by step so taxpayers and businesses can understand what the law says, why it matters, and how to apply it in practice. What Does Section 24 Say? The law allows a person to claim an amortization deduction for the cost of intangibles if: 1. The intangible is wholly or partly used during the tax year in deriving business income chargeable to tax. 2. The intangible has a normal useful life exceeding one year. This means if your company uses a software system, a trademark license, or a franchise agreement to generate income, you may be entitled to claim deductions for its cost over its useful life. How Is the Deduction Calculated? The law provides a simple formula: Amortization Deduction = Cost of the Intangible Ã· Normal Useful Life (in years) For example, if a business acquires software worth Rs. 3 million with a useful life of 10 years, it can claim Rs. 300,000 annually as an amortization deduction. But what if the useful life cannot be determined? The law says such intangibles should be treated as if they had a 15-year useful life. Partial Use or Shorter Periods In many cases, intangibles may not be used throughout the entire year or may be used partly for business and partly for other purposes. Section 24 addresses this by introducing a proportional calculation. â€¢ If used partly for business: Only the fair proportion attributable to taxable income can be deducted. â€¢ If used for part of the year: The deduction is adjusted based on the number of days the intangible was actually in use. This ensures fairness while preventing excessive claims. What Happens on Disposal of Intangibles? Businesses sometimes sell or transfer intangibles like patents or franchises. Section 24 provides clear rules: â€¢ If the sale value exceeds the written-down value, the excess will be treated as taxable business income. â€¢ If the sale value is lower, the difference will be allowed as a deduction. The written-down value is calculated as the original cost minus the amortization already claimed. What Qualifies as an Intangible? The law defines intangibles broadly to include: â€¢ Patents, designs, trademarks, and copyrights. â€¢ Scientific or technical knowledge. â€¢ Computer software and motion picture films. â€¢ Franchises, licenses, and export quotas. â€¢ Any expenditure that provides an advantage for more than one year (except land or depreciable assets). However, self-generated goodwill is not considered an intangible for tax purposes. Why Does This Matter for Businesses? For companies, claiming amortization deductions on intangibles reduces taxable income, thereby lowering the tax liability. This is particularly beneficial for technology firms, pharmaceutical companies, and businesses that rely heavily on intellectual property. Think of it this way: just as machines and buildings depreciate over time, intangibles also lose value as they are used. The tax law acknowledges this economic reality and provides relief to taxpayers. Key Takeaways for Taxpayers 1. Maintain Proper Documentation: Keep contracts, invoices, and valuation reports related to intangibles. 2. Identify Useful Life: Where possible, establish the expected useful life of the intangible to avoid defaulting to the 15-year rule. 3. Review Partial Use: If an intangible is only partly used for taxable supplies or services, ensure fair apportionment in claims. 4. Track Disposal Carefully: If selling or transferring intangibles, calculate the gain or loss accurately for tax reporting. Q&A â€¢ Q: Can I claim amortization if I buy software for one year only? A: No. The intangible must have a useful life exceeding one year to qualify. â€¢ Q: What if my business uses an intangible for only six months? A: You can still claim the deduction, but it will be proportionately reduced based on usage days. â€¢ Q: Are brand logos created in-house considered intangibles? A: No, self-generated goodwill or similar assets are excluded. Conclusion The inclusion of Section 24 in the Income Tax Ordinance, 2001 ensures that businesses receive fair tax treatment for their investments in intangibles. By spreading out the cost over the useful life of such assets, the law provides a balanced approach, supporting both compliance and financial planning. For tax year 2025-26, businesses are advised to carefully review their intangible assets, calculate amortization deductions accurately, and consult professionals where needed. After all, proper handling of intangibles can mean significant tax savings and stronger compliance with the law. Disclaimer: This article is for informational purposes only and summarizes provisions of Section 24 of the Income Tax Ordinance, 2001 as applicable for tax year 2025-26. It should not be considered legal, accounting, or professional tax advice. Businesses and individuals dealing with intangibles are advised to consult a qualified tax professional or review official notifications issued by the Federal Board of Revenue (FBR) for specific guidance.

Date: 2025-09-08

Details: Islamabad, September 8, 2025 â€“ The Federal Board of Revenue (FBR) has unleashed a nationwide enforcement drive, signaling the start of an aggressive campaign to crush tax evasion and ramp up revenue collection. After resolving long-standing logistical hurdles by equipping Inland Revenue officers with a fleet of official vehicles, the FBR has issued a thunderous directive: perform or face accountability. The powerful tax authority has instructed Chief Commissioners of Large Taxpayers Offices (LTOs), Medium Taxpayers Office (MTO), Corporate Tax Offices (CTOs), and Regional Tax Offices (RTOs) to intensify their operations without delay. With new mobility at their disposal, officers are now expected to leave no stone unturned in chasing down defaulters, broadening the tax base, and ensuring the stateâ€™s coffers swell with overdue collections. The enforcement plan reads like a declaration of war against tax dodgers. Field officers have been ordered to: â€¢ Monitor and strictly enforce Point of Sale (POS) compliance across the retail sector. â€¢ Conduct extensive on-ground visits to both registered and unregistered businesses, ensuring no entity slips through the cracks of registration. â€¢ Pursue suspected tax evasion cases through systematic field inspections. â€¢ Carry out targeted audits of withholding agents and ensure compliance. â€¢ Accelerate recovery of arrears while aggressively expanding the tax base. To make this campaign watertight, every officer must maintain a detailed log of enforcement activities, documenting inspections, visits, and results. These records will serve as evidence of their performance and will be closely scrutinized by the FBR high command. Insiders reveal that this move marks a turning point in the FBRâ€™s enforcement strategy. For years, officers complained of being hampered by lack of resources. Now, with logistical barriers dismantled, excuses will no longer be tolerated. The FBR has made it clear: enhanced performance is no longer an optionâ€”itâ€™s a mandate. With tax evaders firmly in its sights, the FBR has raised the stakes. Business communities across the country are bracing themselves for intensified scrutiny as officers gear up to enforce compliance with unprecedented zeal.

Date: 2025-09-08

Details: Lahore, September 8, 2025 â€“ A storm is brewing in Pakistanâ€™s tax landscape as the Lahore Tax Bar Association (LTBA) has raised the red flag over critical glitches in the Federal Board of Revenueâ€™s (FBR) online return filing system, IRIS. What should have been a smooth digital process for tax year 2025 has turned into a nightmare of technical breakdowns, erroneous computations, and widespread taxpayer frustration. In a strongly worded letter to the FBR chairman, LTBA President Muhammad Asif Rana detailed how persistent faults in the IRIS portal are crippling the filing process. According to the association, the ongoing issues are not minor bugsâ€”they are systematic failures that could derail compliance, disrupt revenue collection, and shake public trust in the tax administration. Widespread Technical Failures The association has documented a series of alarming technical errors. Among the most glaring issues is the systemâ€™s inability to correctly allocate tax withheld under Section 235 of the Income Tax Ordinance, 2001, particularly in the case of Associations of Persons (AOPs). Equally problematic is the discriminatory treatment of imports versus exports. While Section 148 allows taxpayers to edit income related to imports, no such option exists under Section 154 for exports. This inconsistency, the LTBA warned, is creating chaos in income attribution and reconciliation for businesses heavily reliant on cross-border trade. Even when taxpayers manage to fill in their data accurately, the system often throws back unexplained error messages during final submission. Without guidance on what went wrong, many taxpayers find themselves stuck in an endless cycle of trial and error. Perhaps the most damaging flaw is the systemâ€™s tendency to miscalculate final liabilities. By incorrectly adjusting advance tax or tax deducted at source, IRIS sometimes inflates tax demands, leaving honest taxpayers facing demands far higher than their actual liabilities. Legal Misapplications Causing Chaos The LTBA has also pointed out glaring legal misapplications within the system. For example, Section 92 of the Income Tax Ordinance exempts share income from an AOP in the hands of members who have no other income sources. Despite this, the IRIS system applies tax on such income and even adds tax credit adjustments that the law never intended. This unlawful treatment forces taxpayers to pay additional tax under Section 4AB, even when no liability legally exists. In cases where incomes cross Rs. 10 million, the miscalculation becomes even more severe. Furthermore, the system is failing to distinguish between fixed, final, and minimum tax regimes. Instead of offsetting excess payments or recognizing minimum tax rules, IRIS indiscriminately counts all collections and deductions as liability. The LTBA warned that this flaw alone could lead to widespread disputes, inflated demands, and loss of confidence in FBRâ€™s digital infrastructure. Shortened Filing Period Adds Pressure The association also reminded FBR of its delay in notifying the return format for 2025. Under Section 118 of the Ordinance, taxpayers are granted 92 days to file returns after the close of the financial year. However, the FBR issued the return forms only on August 18, effectively consuming 49 days of this statutory period. â€œNot only are taxpayers left with fewer days to file their returns, but those remaining days are being wasted fighting with a dysfunctional system,â€ the LTBA noted. â€œThis is nothing short of a systemic failure that risks delaying revenue inflows for the national exchequer.â€ Urgent Demands from the Legal Fraternity In its communication, the association laid out a series of urgent demands for the tax authority. These include: â€¢ Immediate resolution of technical glitches and miscalculations in the IRIS system. â€¢ Clear guidance through official circulars and FAQs on how taxpayers should address common portal errors. â€¢ Extension of the return filing deadline if system failures persist. â€¢ Establishment of a specialized technical support desk to provide real-time assistance. Growing Frustration Among Taxpayers The grievances voiced by the LTBA echo the experiences of thousands of individuals and businesses currently struggling to file returns. Many report hours of wasted effort, repeated system crashes, and the fear of legal consequences if deadlines are missed. For a government keen on digitization, the situation paints a damaging picture of inefficiency and poor planning. The Bigger Picture This crisis comes at a time when Pakistanâ€™s economy desperately needs enhanced revenue collection and compliance. A dysfunctional digital system not only hampers tax collection but also undermines the broader narrative of reform and modernization. If the IRIS glitches are not urgently fixed, experts warn that the government risks losing both tax revenue and taxpayer confidenceâ€”a double blow the economy can ill afford. For now, the ball is in FBRâ€™s court. Tax practitioners, businesses, and ordinary citizens are anxiously waiting to see whether the authority will respond with decisive actionâ€”or let this digital storm spiral into a full-blown tax crisis.

Date: 2025-09-08

Details: Islamabad, September 8, 2025 â€“ The Federal Board of Revenue (FBR) has released its latest report highlighting the scale of tax exemptions granted, according to a report issued on Monday. According to the findings, the total value of exemptions and concessions amounted to Rs2,434.73 billion, equivalent to 2.32% of the countryâ€™s Gross Domestic Product (GDP). The report explained that these exemptions represent 26.18% of the FBRâ€™s overall tax collection, which stood at Rs9,299.08 billion for the year. While the figures reflect a notable decline compared with the previous fiscal yearâ€”when tax exemptions equaled 54.15% of total revenueâ€”the foregone amount still represents a significant portion of federal resources. Breakdown of Exemptions The report provides a detailed category-wise analysis: â€¢ Income Tax: Estimated exemptions reached Rs545.23 billion, equivalent to 5.86% of total collection, 22.39% of overall exemptions, and 0.52% of GDP. â€¢ Sales Tax: Exemptions were the highest in this category, amounting to Rs1,237.11 billion. This represented 13.30% of total collection, 50.81% of all exemptions, and 1.18% of GDP. â€¢ Customs Duty: Exemptions worth Rs652.39 billion were reported, equal to 7.02% of total collection, 26.80% of overall exemptions, and 0.62% of GDP. Key Observations The analysis underscores that total federal tax exemptions have nearly halved compared to last year in terms of GDP, falling from 4.6% in FY 2022â€“23 to 2.32% in FY 2023â€“24. This reduction indicates a government effort to rationalize concessions and move toward a more balanced revenue structure. However, the FBR cautioned that these estimates should not be interpreted as guaranteed revenue potential. Eliminating tax exemptions outright would not necessarily lead to a proportional increase in government revenue. The actual fiscal outcome depends on several factors, including taxpayer behavior, economic activity, and market elasticity. Moreover, the report clarified that the figures do not capture the indirect effects such exemptions might have on provincial revenue systems. By presenting these findings, the FBR aims to foster transparency in fiscal policymaking and promote public debate about the fairness and efficiency of the federal tax system. Policymakers are expected to use the report as a reference for evaluating future reforms and striking a balance between revenue generation and economic incentives.

Date: 2025-09-04

Details: The Federal Board of Revenue (FBR) has clarified which deductions cannot be claimed against business income during the tax year 2025-26. These rules have been updated in the Income Tax Ordinance, 2001, after amendments introduced through the Finance Act, 2025. To help taxpayers better understand, hereâ€™s an interactive breakdown of the key points: â“ Can all expenses of a business be deducted from income? Answer: No. While genuine operating costs are allowed, Section 21 of the Ordinance specifically lists expenses for which deductions are not permitted when calculating taxable business income. ðŸš« Examples of disallowed deductions: â€¢ Taxes on profits: Any cess, rate, or tax calculated directly on business profits cannot be deducted. â€¢ Unpaid withholding taxes: If a taxpayer fails to deduct and deposit withholding tax where required, the related expense will not qualify. â€¢ Excess commission: Payments of commission above 0.2% on certain sales, unless the recipient is on the Active Taxpayers List. â€¢ Entertainment costs: Any expense that exceeds prescribed limits. â€¢ Unrecognized funds: Contributions to funds that are not approved pension, gratuity, or provident funds. â€¢ Cash transactions: Expenditures above Rs. 250,000 that are not paid through banking or digital channels. ðŸ“Œ Why these rules matter The purpose of restricting such deductions is to ensure that taxable business income is calculated fairly and transparently. It discourages cash dealings, promotes digital payments, and ensures that only legitimate and verifiable costs are considered. By clearly defining what cannot be deducted, the FBR aims to strengthen compliance and broaden the tax base, while making sure that businesses report their income in line with national tax policy. Disclaimer: This article provides a simplified overview of disallowed deductions against business income under the Income Tax Ordinance, 2001 for the tax year 2025-26. It is intended for general informational purposes only and does not constitute legal, tax, or financial advice. Taxpayers should consult professional advisors or refer directly to official Federal Board of Revenue (FBR) publications before making any decisions regarding their business income or deductions.

Date: 2025-09-04

Details: Islamabad, September 4, 2025 â€“ The Federal Board of Revenue (FBR) has issued detailed guidance regarding deductions allowed while computing tax on business income for the tax year 2025-26. The clarifications were released through the updated Income Tax Ordinance, 2001, reflecting the amendments introduced in the Finance Act, 2025. According to Section 20 of the Ordinance, businesses are entitled to claim deductions against income when expenses are incurred wholly and exclusively for business purposes. This provision ensures that genuine operational costs are excluded before arriving at the taxable income of a person or entity. The FBR explained that deductions extend to special cases as well. For example, where animals used for business purposes die or become permanently useless, taxpayers can claim deductions equal to the difference between the acquisition cost and any amount recovered from carcasses or residual value. This clause recognizes the practical losses businesses may face in agriculture, dairy, or related sectors. Further, the law clarifies that where expenditure results in acquiring depreciable assets, intangible assets with a useful life of more than one year, or pre-commencement expenses, such costs cannot be deducted outright. Instead, they must be depreciated or amortized over time in accordance with Sections 22 to 25 of the Ordinance. This treatment ensures a fair reflection of costs over the useful life of assets while aligning with standard accounting practices. Additionally, in cases of corporate restructuring, such as mergers or amalgamations, expenditures on legal, financial, or advisory services may also be deducted. This provision supports companies undergoing consolidation and business expansion. Overall, the FBRâ€™s explanation underscores the principle that deductions are designed to calculate business income on a fair and equitable basis, balancing taxpayer relief with revenue needs. Disclaimer: This article provides a general overview of tax deductions and business income rules under the Income Tax Ordinance, 2001, as updated for the tax year 2025-26. It is intended for informational purposes only and should not be considered legal, accounting, or financial advice. Businesses and individuals are advised to consult professional tax advisors or refer directly to official Federal Board of Revenue (FBR) publications for guidance tailored to their specific circumstances.

Date: 2025-09-04

Details: Islamabad, September 4, 2025 â€“ The Federal Board of Revenue (FBR) has officially notified the advance tax rates applicable on the use of telephone and internet services during the tax year 2025-26. The notification was issued through the updated Withholding Tax Card 2025, which incorporates all amendments made to the Income Tax Ordinance, 2001 under the Finance Act, 2025. According to Section 236 of the Income Tax Ordinance, the government is empowered to levy advance tax on telephone and internet usage. The provision outlines clear rules for both subscribers and prepaid service users, ensuring a uniform mechanism for tax collection. For fixed-line telephone subscribers (excluding mobile phones), if the monthly bill exceeds Rs. 1,000, the applicable tax rate will be 10 percent on the portion of the bill above that threshold. In the case of internet and mobile telephone services, as well as prepaid telephone or internet cards, a higher tax rate of 15 percent will apply on the total bill amount or the sale price of the prepaid card or electronic units. The law further specifies the responsibilities of service providers. The company or authority issuing telephone or internet bills will be required to charge and collect the advance tax in the same manner as they charge the service fee. Similarly, entities selling prepaid telephone or internet cards, or issuing units through any electronic medium, must collect the tax from customers at the point of sale. However, Section 236 also provides exemptions. Advance tax will not be collected from government departments, foreign diplomats, diplomatic missions in Pakistan, or individuals who can produce a certificate from the Commissioner confirming that their income is exempt from taxation. The FBR emphasized that these measures are aimed at widening the tax net by targeting consumption-based transactions such as telephone and internet services. By doing so, the government seeks to enhance revenue collection while ensuring that the burden is spread fairly among users of communication and digital services. Disclaimer: The above information is based on notifications issued by the Federal Board of Revenue (FBR) for the tax year 2025-26. It is provided for general informational purposes only and should not be considered as legal or financial advice. Users of telephone and internet services are advised to consult with tax professionals or refer directly to official FBR publications for specific guidance related to their individual circumstances.

Date: 2025-09-03

Details: September 3, 2025 Karachi, September 3, 2025 â€“ Pakistan Customs is working toward a major milestone in trade facilitation by aiming to clear 80 percent of import consignments through the green channel system, a move that promises to significantly reduce clearance times and enhance business confidence. During a meeting with office bearers of the Karachi Chamber of Commerce and Industry (KCCI) on Wednesday, Chief Collector Customs (Appraisement South), Wajid Ali, revealed that at present around 57 percent of cargo is being processed through the green channel. This system, he explained, reflects international best practices where Customs authorities prioritize post-clearance audits rather than physically holding consignments at ports. Such an approach allows faster cargo movement, minimizes congestion, and ensures compliance without compromising regulatory oversight. He highlighted that by encouraging greater trader compliance and continuously improving customs procedures, Pakistan Customs could realistically raise the green channel clearance rate to 80 percent. Achieving this benchmark would not only align Pakistan with global trade standards but also make the countryâ€™s ports more competitive within the region. The meeting, attended by KCCI President Muhammad Jawed Bilwani, Senior Vice President Zia ul Arfeen, Vice President Faisal Khalil Ahmed, Chairman of the Customs & Valuation Subcommittee Arif Lakhani, former presidents, and managing committee members, focused on identifying barriers faced by the business community. The Chief Collector assured participants that issues in the Faceless Customs Assessment (FCA) system would be addressed promptly, making the platform more efficient and transparent. Wajid Ali further announced the reinstatement of the First-In-First-Out (FIFO) system to ensure timely processing and confirmed that warehousing extension requests would now be handled digitally, without the need for physical verification. This policy shift, he said, will save time, reduce delays, and cut unnecessary bureaucratic hurdles. Addressing concerns about misconduct, he pledged to introduce a strict accountability mechanism where appraising officers will be reviewed monthly. High performers will be acknowledged, while disciplinary action will be taken against those involved in misconduct. He also emphasized improving the hearing process at the Assistant and Deputy Collector levels to minimize hardships faced by traders. Responding to queries about port congestion, the Chief Collector clarified that no backlog exists at South Asia Pakistan Terminals (SAPT), Pakistan International Container Terminal (PICT), and Port Qasim, with only Karachi International Container Terminal (KICT) facing some delays. He assured the KCCI that pending consignments would be cleared weekly, reiterating his strong resolve to streamline operations. With the expansion of the green channel system, Pakistan Customs aims to create a more transparent, efficient, and trader-friendly environment, reinforcing its commitment to supporting economic growth through seamless trade facilitation.

Date: 2025-09-03

Details: â€¢ A wider criminal racket involved in case, FBR says BR Web Desk Published September 3, 2025 Updated about 6 hours ago The Federal Investigation Agency (FIA) has arrested several Federal Board of Revenue (FBR) officers for allegedly legalising smuggled vehicles, with the FBR calling it part of a â€œwider criminal racketâ€ under investigation. According to the FBR, reports emerged in July 2025 regarding misuse of its Auction Module. â€œIn response, FBR immediately initiated an inquiry into the matter. Since the moduleâ€™s launch, details of 1,909 vehicles had been uploaded into the system. â€œUpon detailed scrutiny, it was discovered that 103 of these vehicles had been fraudulently uploaded using fake user identities. MRAs [Motor Registration Authorities] had already registered 43 out of these 103 smuggled vehicles, effectively granting them an appearance of legal clearance. â€œBased on a digital audit and internal investigations, FBR identified the user IDs through which the fraud was committed. â€œAs a result, on 9th July, 2025, FBR suspended one Deputy Collector and one Assistant Collector, whose credentials had been misused in the commission of this crime. â€œThe investigation further revealed that this was part of a wider criminal racket involving officials from MRAs and car dealers. Recognising the gravity of the issue, FBR determined that the matter warranted action beyond internal disciplinary proceedings. â€œAccordingly, a formal request by FBR was made on 9th July, 2025 for the constitution of a Joint Investigation Committee (JIT), comprising senior officers from the FIA, Customs, and Intelligence Agencies. The JIT was tasked with a comprehensive probe into the scam, including the manipulation of the Customs digital system. â€œFollowing FBRâ€™s formal complaint to FIA dated 10th July, 2025, the JIT commenced its investigation. As a result, on 28th August, 2025, the FIA lodged an FIR against already identified officers, after being found involved in fraudulently legalising smuggled vehicles. â€œToday, these individuals have been formally arrested by FIA. It is also pertinent to mention that Customs Enforcement has so far lodged seven FIRs and arrested 13 individuals in connection with this broader scam,â€ the FBR statement read. The FBR in August 2021 introduced the â€˜Auction Moduleâ€™ in its WeBOC system. The system enhancement was aimed at addressing the issue of multiple vehicles being registered against documents issued by Customs after the auction of confiscated smuggled vehicles. â€œThrough this module, Motor Registration Authorities were enabled to verify auctioned vehicle details online before registration, significantly reducing reliance on paper-based manual verifications. â€œThe goal was to both strengthen institutional controls and facilitate legitimate buyers,â€ the FBR said.

Date: 2025-09-02

Details: September 2, 2025 Karachi, September 2, 2025 â€“ The Pakistan Chemical and Dyes Merchants Association (PCDMA) has expressed strong disapproval over what it calls a premature and poorly planned rollout of the Federal Board of Revenueâ€™s (FBR) electronic invoicing system. In a statement, PCDMA Chairman Salim Valimuhammad criticized the tax authority for introducing e-invoicing without prior training, awareness sessions, or consultations with key stakeholders. He said that the abrupt move has created confusion within the business community at a time when Pakistan is already facing serious economic and environmental challenges. â€œWe are not opposed to e-invoicing,â€ Valimuhammad clarified. â€œBut its sudden enforcement, without preparation or support, shows little understanding of ground realities â€” including power shortages, flooding, and inadequate digital infrastructure.â€ Concerns Raised by PCDMA â€¢ Lack of training programs for traders. â€¢ Insufficient awareness campaigns to explain compliance procedures. â€¢ No phased implementation plan, starting with larger corporations first. â€¢ Risk of widening the compliance gap, especially for small businesses. The PCDMA chief urged the government to reconsider its approach and introduce e-invoicing gradually. He proposed that the system first be implemented for multinational and public limited companies, with small- and medium-sized enterprises included only after proper capacity building. He further emphasized that many small traders do not possess computers, specialized software, or the technical skills required to comply with a fully digital invoicing regime. PCDMA also criticized FBR for failing to consult industry representatives before launching the system, despite the fact that association members are already registered with tax departments and meet their filing obligations. Valimuhammad warned that without extending deadlines and investing in infrastructure, the move could disrupt business operations and erode trust between the government and the trading community.

Date: 2025-09-02

Details: Karachi, September 2, 2025 â€“ The Federal Board of Revenue (FBR) has made it clear that return filing for the tax year 2025 is mandatory for individuals whose annual income from business exceeds Rs350,000. This requirement falls under Section 114 of the Income Tax Ordinance, 2001, which governs income tax return procedures in Pakistan. Key Requirement for Business Income Subsection (1A) of Section 114 explains that any individual earning between Rs300,000 and Rs400,000 annually under the head â€œIncome from Businessâ€ must submit a return of income. This ensures proper documentation of earnings and compliance with national tax laws. Who Else Must File a Return? Apart from small business owners, Subsection (1) of Section 114 outlines other categories of taxpayers who are required to file returns, including: â€¢ Companies and non-profit organizations. â€¢ Any person whose taxable income exceeds the maximum non-taxable limit. â€¢ Individuals subject to final taxation under any provision of the law. â€¢ Persons who have been charged tax in any of the previous two years. â€¢ Individuals claiming loss carry-forwards. â€¢ Property owners with land over 500 square yards or flats exceeding 2,000 square feet. â€¢ Motor vehicle owners with engine capacity above 1000 CC. â€¢ Persons holding a National Tax Number (NTN) or connected to commercial/industrial electricity connections exceeding Rs500,000 in annual billing. â€¢ Professionals registered with trade associations, bar councils, medical councils, engineering councils, and other recognized bodies. â€¢ Individuals with foreign income or assets, as per Section 116A. Importance of Timely Filing Filing a return ensures legal compliance and avoids penalties, which may include fines or legal action. Moreover, maintaining an accurate record of income helps individuals apply for loans, visas, and financial facilities. Disclaimer: This article provides general tax information. Taxpayers should consult professionals for personalized guidance regarding their income tax return filing.

Date: 2025-09-01

Details: Karachi, September 1, 2025 â€“ The Federal Board of Revenue (FBR) has announced a major reorganization of Pakistanâ€™s post-clearance and internal audit mechanisms for Customs, aimed at strengthening compliance, increasing transparency, and integrating modern risk-based methodologies. The initiative, formalized through SRO 1655(I)/2025 dated August 30, 2025, reflects FBRâ€™s commitment to aligning domestic practices with global standards, including the World Customs Organization (WCO) guidelines. Comprehensive National Customs Audit Strategy At the heart of this restructuring lies the National Customs Audit Strategy (NCAS), designed to integrate post-clearance audit and internal audit under a unified compliance framework. The strategy emphasizes risk assessment and data-driven selection of audit cases, ensuring that Customs operations maintain both facilitation for compliant traders and deterrence against non-compliance. Key Features of the Overhaul 1. Audit Planning & Risk Assessment An annual audit plan will be developed based on extensive data analytics, ensuring that high-risk transactions and entities are prioritized. Centralized checks will prevent duplication in selection and execution of audits, enabling a more efficient allocation of resources across all Customs field formations. 2. Standardized Procedures & Quality Assurance Nationwide protocols will govern every stage of the audit processâ€”from selection and observation to review, appeals, and record-keepingâ€”ensuring consistency and transparency. This approach aims to minimize subjectivity and improve the reliability of audit outcomes. 3. Capacity Building & Use of Technology Training programs will focus on modern audit techniques, data interpretation, and advanced IT applications. Customs auditors will be equipped with analytical skills and digital tools to detect irregularities such as misdeclaration, under-invoicing, and false origin claims, which often erode government revenue. 4. Performance Metrics & Feedback Loops Audit findings will be compiled into quarterly and annual performance reports, linking outcomes to predefined Key Performance Indicators (KPIs). Feedback from completed audits will inform future risk models and compliance strategies, creating a cycle of continuous improvement within Customs operations. Data Analytics Center and Audit Management Cell A dedicated Data Analytics Center (DAC) will serve as the nerve center of this revamped audit structure. By aggregating data from internal systems such as WeBOC and PSW, as well as external sources like the Securities and Exchange Commission of Pakistan (SECP), State Bank of Pakistan, and global trade databases, the DAC will build predictive models to flag high-risk consignments and sectors. Supporting this effort, an Audit Management Cell (AMC) will monitor execution of the annual audit plan, maintain computerized records, track performance metrics, and provide centralized support for audit management. Together, these units will ensure that Customs audit operations are guided by empirical evidence rather than manual guesswork. Expanded Internal Audit Mandate The internal audit function has been broadened to cover not only Customs processes but also accounts, expenditure, assets, and warehouse management across all Customs field formations. This expansion ensures that internal controls are robust, financial integrity is maintained, and operational efficiency is regularly assessed against regulatory benchmarks. Leadership and Oversight The Directorate General of Post-Clearance and Internal Audit, headquartered in Karachi, will oversee implementation. Seven regional directoratesâ€”including Karachi (HQ, South, East, and Exports), Lahore (Central), Quetta (Balochistan), and Islamabad (North)â€”will operate under its supervision, ensuring uniform application of policies across the country. Expected Outcomes The FBR expects that this restructuring will lead to more precise detection of revenue leakages, greater trader compliance, and enhanced trust in Pakistanâ€™s Customs administration. By integrating modern audit tools, building data-driven risk models, and enforcing standardized procedures, the system aims to minimize evasion and maximize revenue recovery. As Pakistan navigates an increasingly complex trade environment, such reforms are seen as critical to maintaining regulatory integrity while facilitating legitimate business activity.

Date: 2025-09-01

Details: September 1, 2025 The Federal Board of Revenue (FBR) has issued updated guidelines for the taxation of speculation business in Pakistan for the tax year 2025-26. These updates have been incorporated into the revised Income Tax Ordinance, 2001, following amendments introduced through the Finance Act, 2025. What is Speculation Business? Under Section 19 of the Income Tax Ordinance, a speculation business is defined as a business where contracts for the purchase and sale of commoditiesâ€”including stocks and sharesâ€”are settled without the actual delivery or transfer of those commodities. Instead, settlements are made periodically or at the end of a contract, usually involving price differences rather than physical goods. However, not every contract involving future price changes is considered speculation. The law excludes: â€¢ Contracts for raw materials or merchandise entered to hedge against price fluctuations in a regular manufacturing or trading business. â€¢ Contracts involving stocks or shares made by dealers or investors to protect themselves from losses due to price movements. â€¢ Contracts by members of forward markets or stock exchanges conducted as part of legitimate arbitrage or hedging practices. Key Tax Principles 1. Separate Treatment â€“ Speculation business must be treated as a distinct and separate activity from any other business carried out by a taxpayer. 2. Income Assessment â€“ Tax on such activity is calculated under the head â€œIncome from Business,â€ but separately from income earned through other operations. 3. Loss Handling â€“ Any losses arising from speculation business during a tax year must be computed under the relevant provisions and adjusted according to Section 58 of the Ordinance. Disclaimer: This article is for informational purposes only. Tax laws are subject to revisions, and individuals or businesses should consult official FBR notifications or a qualified tax advisor for accurate compliance guidance.

Date: 2025-09-01

Details: September 1, 2025 Karachi, September 1, 2025 â€“ The Federal Board of Revenue (FBR) has released updated guidelines to help taxpayers understand how their business income will be calculated for the tax year 2025-26. These guidelines are part of the revised Income Tax Ordinance, 2001, which now includes amendments from the Finance Act, 2025. What is Business Income? According to Section 18 of the Income Tax Ordinance, business income refers to any earnings that come from operating a trade, profession, or any commercial activity. It also includes various forms of financial gains linked to business activities. The key types of income that fall under this category include: 1. Profits from business operations â€“ Any money earned by running a trade, company, or professional practice during the year is considered business income. 2. Earnings from associations and clubs â€“ Professional or trade associations and cooperative societies, including recreational clubs, must also pay tax on income generated from selling goods, property, or services to their members. 3. Income from leasing assets â€“ If a person or company earns money by leasing or hiring out movable property, that amount will be considered part of their business income. 4. Perks and benefits from business dealings â€“ Any benefit, whether it can be converted into cash or not, gained from a business relationship (past, present, or future) will be taxable. This includes cases where debts are waived or profits on debts are written off. 5. Management fees â€“ Companies, including modaraba management companies, must include management fees in their taxable business income. Banking and Financial Institutions The law also covers income generated by banks, leasing companies, development finance institutions, and investment banks. Any amount paid to them in connection with leased assets or mutual fund distributions will be treated as taxable business income. Why It Matters for Taxpayers The updated law ensures clarity, especially for those earning from multiple sources. By grouping these earnings under â€œIncome from Business,â€ the FBR aims to simplify compliance and avoid confusion between different income heads like â€œOther Sources.â€ ________________________________________ Quick Reference Guide â€“ What Counts as Business Income? Category Example Business Operations Profits from running a shop, factory, or consultancy Associations/Clubs Income from selling services or property to members Leasing of Assets Money from hiring out machinery or vehicles Business Benefits Waiver of debt or other perks gained from deals Management Fees Fees charged by management companies ________________________________________ Disclaimer: This article is for informational purposes only. Tax laws may change, and individuals or businesses should consult the official FBR guidelines or a tax advisor for accurate calculations.

Date: 2025-08-19

Details: August 19, 2025 Islamabad, August 2025 â€“ The Federal Board of Revenue (FBR) has issued the latest withholding tax card for pension income applicable for the tax year 2025-26. The notification clarifies tax obligations for retired individuals, particularly pensioners under the age of 70, bringing important changes after amendments made through the Finance Act 2025. According to the FBR, withholding tax on pension will be collected under Section 149(IA) of the Income Tax Ordinance, 2001. Under the new rules, any pension amount up to Rs. 10 million per year will remain fully exempt from tax. However, where annual pension income exceeds Rs. 10 million, the excess amount will be subject to a 5% tax along with an additional surcharge of 10%. The FBR explained that pensioners above 70 years of age will continue to enjoy exemption, even if their annual receipts surpass the Rs. 10 million threshold, according to PkRevenue report. In cases where a retired employee continues to work with the same employer or any associated company, the treatment of their pension will follow the normal income tax slab rates applicable under Section 149, Division I of Part I of the First Schedule of the Ordinance. It is also important to note that private pension disbursed by Pension Fund Managers under the Voluntary Pension Scheme Rules 2005, as well as other retirement benefits not directly received from a former employer, will be charged under Section 39 of the Ordinance. However, certain benefits such as commutation of pension, gratuity, or up to 50% withdrawal from a voluntary pension account under specified conditions, will continue to remain exempt under Part I of the Second Schedule. Previously, pension income received from a former employer enjoyed exemptions under clauses (8) and (9) of the Ordinance. These exemptions were removed by the Finance Act 2025, thereby bringing such payments into the tax net. For clarity, the FBR issued Income Tax Circular No. 1 of 2025-26, explaining that withholding agents (employers) are responsible for deducting applicable taxes and surcharge at the prescribed rates. The new withholding tax card is expected to create greater transparency in the taxation of pensions while ensuring consistency across both public and private retirement benefits.

Date: 2025-08-19

Details: August 19, 2025 On August 18, 2025, the Federal Board of Revenue (FBR) issued SRO 1561(I)/2025 to officially notify the new â€˜simplifiedâ€™ return of income form for tax year 2025. The form, now available on the IRIS portal, is designed to make compliance easier, but taxpayers must still pay close attention to the details. Letâ€™s take a step-by-step look at how this simplified process works and what it means for you. ðŸ—“ Filing Deadline The FBR has fixed September 30, 2025 as the deadline for filing. The tax year 2025 cycle covers the period from July 1, 2024, to June 30, 2025. Individuals who stayed in Pakistan for 183 days or more during this period are required to file under the simplified form. ðŸ‘¨ðŸ’¼ Step 1: Salary and Pension Details â€¢ Salaries are prefilled based on employer data. â€¢ Taxpayers must verify their employerâ€™s NTN, receipts, and any deductions. â€¢ Pensions are separately mentioned on the third page and also require confirmation. ðŸ Step 2: Declare Other Income This includes: â€¢ Rent from property â€¢ Payments for services â€¢ Bank profits, dividends, and other receipts ðŸ’³ Step 3: Withholding Adjustments The form provides blocks to adjust taxes deducted at source, such as: â€¢ Salary tax already withheld â€¢ Cash withdrawal taxes â€¢ Debit/credit card transactions â€¢ Mobile phone and internet usage charges There are also sections for minimum and final tax obligations. ðŸŽ Step 4: Tax Reliefs and Credits The interactive feature of the return asks questions to determine eligibility for: â€¢ Tax deductible allowances â€¢ Reductions â€¢ Credits This step ensures that you donâ€™t miss out on potential savings. ðŸ¦ Step 5: Bank Account Verification Taxpayers must re-enter bank account details and provide closing balances as of June 30, 2025. Interestingly, prefilled data will show all accounts linked to the taxpayerâ€™s name. If multiple accounts exist, you will be prompted to confirm balances, adding a transparency layer to the filing. ðŸ˜ Step 6: Property and Assets â€¢ Declare property details and their fair market value. â€¢ Identify assets and liabilities. â€¢ An option allows taxpayers to select a property for exclusion from deemed taxation. ðŸ’¸ Step 7: Inflows and Outflows The final section asks for details of money inflows and outflows during the tax year, ensuring consistency with declared income and assets. âœ… Bottom Line: The FBRâ€™s 2025 return is more interactive than before, and while termed â€œsimplified,â€ it still requires careful review. Taxpayers should log in early, verify prefilled information, and ensure accuracy before submission.

Date: 2025-08-17

Details: Sohail Sarfraz Published August 17, 2025 ISLAMABAD: The Federal Board of Revenue (FBR) and the National Database and Registration Authority (Nadra) should jointly implement a secure mobile application for biometric verification of sales tax registered persons. According to a letter of the Lahore Tax Bar Association (LTBA) to the FBR Chairman, the association highlighted major challenges faced by certain sales taxpayers under the current biometric verification system and proposed a digital solution aligned with FBRâ€™s commitment to facilitation and innovation. Presently, biometric verification for sales tax registration and annually bio metric which required in terms of SRO 350(1)/2024 is conducted exclusively through Nadraâ€™s physical infrastructure. While this may suffice for most residents, it poses considerable challenges for the following categories of taxpayers: (I); Individuals temporarily residing or travelling abroad. (2); Taxpayers located in remote or underdeveloped areas. (3); Elderly or physically challenged individuals who cannot easily access the Nadra facilities. Due to the unavailability of a remote verification mechanism, these taxpayers are unable to complete their sales tax registration and annually biometric which required in tarns of SRO 350(1)/2024 dated 07.03.2025, despite their willingness to comply with legal requirements. This creates unnecessary delays, hampers business operations, filing of sales tax returns and discourages potential entrants into the tax system. Key challenges included no Remote Option for Overseas Taxpayers and delays in Registration Activation and filing of sales tax returns. He LTBA proposed the FBR should consider in coordination with Nadra, the development and deployment of a secure mobile application for biometric verification. This solution may include facial recognition or fingerprint scanning wing smartphone technology and secure integration between the FBR and the Nadra. The expected benefits included enhanced taxpayerâ€™s facilitation particularly for overseas Pakistanis and remote areas residents, improved compliance rate with quicker registration and fewer delays; expanded lax base and alignment with FBRâ€™s digital transformation and automation goals. The association is confident that this initiative would greatly enhance the accessibility, efficiency, compliance and Inclusivity of FBRâ€™s taxpayersâ€™ registration system and ease filing of sales tax returns and enhance the revenue collection, it added. Copyright Business Recorder, 2025

Date: 2025-08-17

Details: August 17, 2025 Islamabad, August 17, 2025 â€“ The Federal Board of Revenue (FBR) has officially released the tax rate applicable to deemed property income for the tax year 2025â€“26, continuing the governmentâ€™s policy of discouraging the use of idle assets and broadening the tax base. Under the recently updated Income Tax Ordinance, 2001, deemed property income is taxed at a flat rate of 20 percent under Section 7E. The amendment forms part of the governmentâ€™s wider agenda to capture untaxed wealth and to bring underutilized real estate assets into the formal economy. What is â€œdeemed incomeâ€? The concept of deemed income was introduced through the Finance Act 2022. It essentially assumes that individuals holding large and expensive properties are generating a notional or â€œdeemedâ€ return from those properties, even if they are not rented out. To ensure fairness, certain exemptions apply, but where applicable, the law treats five percent of the fair market value of property as taxable income. For example: â€¢ If a person owns urban land worth Rs. 100 million (excluding exemptions), the deemed income will be Rs. 5 million. â€¢ At the prescribed rate of 20 percent, the tax liability becomes Rs. 1 million. This approach discourages speculative property holding and encourages people to either utilize, rent, or dispose of non-productive assets. Exemptions under Section 7E Not every property falls under the deemed income regime. The law makes clear exclusions, such as: â€¢ One self-owned residential property. â€¢ Self-owned business premises of active taxpayers. â€¢ Agricultural land (excluding luxury farmhouses). â€¢ Properties allotted to martyrsâ€™ families, war-wounded personnel, and certain government employees. â€¢ Properties where regular rental income is already taxed. â€¢ Properties valued collectively below Rs. 25 million. Why does this matter? ðŸ‘‰ For taxpayers: Those holding high-value plots, houses, or commercial properties need to carefully assess whether they fall under the deemed regime. Ignoring this provision may lead to heavy penalties. ðŸ‘‰ For property investors: Holding multiple properties purely for appreciation may no longer be tax efficient. Owners must now consider whether to rent them out, sell them, or pay the deemed income tax annually. ðŸ‘‰ For the government: The regime is designed to plug loopholes in the property sector, which has historically been a haven for undocumented wealth. Common questions Q1: Does every property owner pay this tax? No. One self-occupied house, active business premises, and agricultural land are generally exempt. Only surplus or high-value properties come under the deemed income net. Q2: What if my property generates rental income? If you are already paying tax on actual rental income, the property is excluded from the deemed income regime. Q3: What if my property is newly purchased? In the first year of acquisition, if tax under Section 236K has been paid, the property is exempt from deemed taxation. Policy outlook Tax experts believe that the continuation of the deemed income tax for 2026 signals the governmentâ€™s intent to expand revenue collection without imposing higher rates on salaried classes. By targeting idle assets, authorities hope to make the tax system fairer. However, critics argue it may discourage investment in real estate and could impact market liquidity. With the tax rate fixed at 20 percent and exemptions clearly outlined, individuals are advised to review their asset portfolios ahead of filing their tax returns. Professional guidance can help avoid disputes and ensure compliance with Section 7E. âœ… Key takeaway: If you own high-value property in Pakistan, check whether you fall under the deemed income rules for 2026â€”non-compliance could prove costly. (Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. The provisions regarding deemed property income, exemptions, and tax rates may be subject to amendments or official clarifications by the Federal Board of Revenue (FBR) or the Government of Pakistan. Readers are advised to consult with qualified tax professionals or the FBRâ€™s official notifications before making any financial or legal decisions.)

Date: 2025-08-16

Details: August 16, 2025 The clock is ticking for the 2025 return filing season, and thousands of taxpayers are rushing to get their paperwork in order. But hereâ€™s a question for you: Do you actually know what a wealth statement is, and why it can make or break your return filing? If your answer is â€œsort ofâ€ or â€œnot really,â€ youâ€™re not alone. Many people focus on income details but forget that under Section 114 of the Income Tax Ordinance, 2001, submitting a wealth statement under Section 116 is a legal requirement for individuals. Skip it, and your return simply isnâ€™t complete. Letâ€™s break it down in simple terms. What Exactly is a Wealth Statement? Think of it as a full financial selfie of your life at a certain date â€” not just your income, but your assets, liabilities, and expenditures. The Federal Board of Revenue (FBR) wants the big picture. Under Section 116, your wealth statement must: 1. List all your assets (including foreign assets) and liabilities (including foreign liabilities) on the specified date. 2. Cover your familyâ€™s finances â€“ including spouse, minor children, and other dependents (but only if they are financially dependent on you). 3. Disclose transfers â€“ if you moved any asset to someone else during the specified period, you must state what it was and what you got in return. 4. Report all expenditures â€“ yours, your spouseâ€™s, and your dependentsâ€™, along with details. 5. Include a reconciliation â€“ basically, explain the changes in your wealth from last year to this year. Do You Need to File One Every Year? Yes, if you are a resident taxpayer filing an income tax return, you must also submit your wealth statement and a wealth reconciliation statement. The same rule applies to members of an Association of Persons (AOP) â€” you file it along with the AOPâ€™s return. Can You Revise It Later? Yes â€” but there are rules. If you realize youâ€™ve made an omission or error, you can submit a revised wealth statement before the FBR issues a notice under Section 122(9) for that year. You must also provide reasons for the revision. However, you canâ€™t revise it after five years from the original due date. And if the Commissioner thinks your revision is not genuine, they can declare it void after giving you a chance to explain. Foreign Income and Assets? Thereâ€™s a Separate Statement for That If you have foreign income of at least USD 10,000 or foreign assets worth USD 100,000 or more, you must file a Foreign Income and Assets Statement (Section 116A). This includes: â€¢ All foreign assets and liabilities on the last day of the tax year. â€¢ Any transfers of foreign assets and the consideration received. â€¢ Complete details of foreign income and related expenditures. The Commissioner can also send you a notice to file it if you fail to do so voluntarily. Why Ignoring This Could Be Risky Skipping or misreporting your wealth statement can lead to penalties, legal action, and potential audits. FBR systems are increasingly data-driven, meaning discrepancies between your declared income and your asset growth can trigger red flags. Action Plan for 2025 Filers â€¢ Start early â€“ donâ€™t leave this until the last week. â€¢ Gather documents â€“ property records, bank statements, loan details, investment statements. â€¢ Check accuracy â€“ especially H.S. codes for any trade-linked transactions or asset details. â€¢ Consult a tax adviser if your finances are complex or involve overseas assets. Your return is not just about reporting what you earned â€” itâ€™s about showing where your money is, where it came from, and how itâ€™s growing. This year, make sure your wealth statement is complete, correct, and on time. Disclaimer: This article is for general informational purposes only and does not constitute legal or tax advice. Readers should consult a qualified tax professional or the Federal Board of Revenue (FBR) for guidance specific to their individual circumstances. The author and publisher are not responsible for any actions taken based on the information provided herein.

Date: 2025-08-16

Details: August 16, 2025 Karachi, August 16, 2025 â€“ The State Bank of Pakistan (SBP) has introduced stricter regulatory measures for the issuance of financial instruments (FIs) in connection with trade transactions, making it mandatory to include Harmonized System (H.S.) Codes and Unit of Measurement (UoM) details. The move is aimed at enhancing transparency, ensuring proper documentation, and minimizing the risk of Trade-Based Money Laundering (TBML) and Terrorist Financing. The new guidelines, issued under the recently unveiled Framework for Managing Risks of Trade-Based Money Laundering and Terrorist Financing, require banks to strengthen due diligence procedures when processing FIs for trade transactions. The SBP has emphasized that issuance of FIs should preferably be centralized under a dual-control system. Where decentralization is unavoidable, banks must establish strong monitoring mechanisms to ensure full compliance. Key FI Due Diligence Requirements The SBP has directed that every FI must clearly specify the nature of the goods involved in the trade, including their quality, variety, and subcategories. Generic or incomplete descriptions are strictly discouraged. Customers must provide complete product details, along with accurate H.S. Codes. Codes described as â€œothersâ€ should be avoided, unless justified with valid reasons. The full names of all parties involved in the transactions must be stated, with abbreviations discouraged. In cases where a single H.S. Code covers multiple products, banks must ensure that the FI lists the details of each product separately. For UoM, banks are instructed to avoid using terms that obscure the actual quantityâ€”such as â€œcartonsâ€ or â€œboxesâ€ for items that should be counted individuallyâ€”and to follow relevant Customs Valuation Rulings wherever applicable. The use of brand names, trade names, or trademarks without the corresponding generic product name will not be acceptable. For export advance payments, banks must ensure that FI details match exactly with the particulars in the Advance Payment Voucher, including consignee information. Additionally, the expiry date of the FI should align with the nature and tenor of the underlying trade transaction, preventing discrepancies that could facilitate suspicious activities. These measures form part of the SBPâ€™s ongoing efforts to safeguard Pakistanâ€™s financial system from misuse through fraudulent or misreported trade transactions. By tightening compliance requirements, the central bank aims to enhance the accuracy of trade documentation, improve monitoring, and support the integrity of the countryâ€™s external sector operations.

Date: 2025-08-16

Details: August 16, 2025 Lahore, August 16, 2025 â€“ The Lahore Tax Bar Association (LTBA) has formally urged the Federal Board of Revenue (FBR) to introduce a digital mechanism that would allow taxpayers to complete their biometric verification through a secure mobile application. In a letter addressed to the FBR chairman, LTBA President Muhammad Asif Rana pointed out that the current requirement of physical biometric verification at National Database Registration Authority (NADRA) offices is causing significant inconvenience. Under SRO 350(I)/2024, issued on March 7, 2025, taxpayers must undergo biometric checks both at the time of sales tax registration and again on an annual basis. The LTBA noted that while physical verification may be suitable for many residents, it creates hurdles for specific groups of taxpayers. These include individuals temporarily residing abroad, people living in remote or underdeveloped areas, and old-age or physically challenged individuals who face difficulties in visiting NADRA centers. The absence of an alternative process results in delays, disrupts business operations, and discourages potential entrants into the formal tax system. Key Challenges Identified â€¢ Overseas Pakistanis unable to complete registration due to lack of remote options. â€¢ Delays in activation of sales tax registration, which subsequently stalls filing of returns. â€¢ Difficulties for physically challenged and old-age taxpayers in accessing NADRA facilities. LTBAâ€™s Proposed Solution The association has proposed that FBR, in collaboration with NADRA, develop and deploy a mobile application to enable remote biometric verification. Such an app could incorporate facial recognition or fingerprint scanning features available in most smartphones, while ensuring secure integration with FBR and NADRA databases for real-time verification. The LTBA stressed that this model would not be unprecedented, as several banks and government institutions in Pakistan are already using mobile-based verification systems for customer onboarding. Expected Benefits â€¢ Easier facilitation for overseas taxpayers and residents of remote areas. â€¢ Improved compliance with faster registration and fewer administrative delays. â€¢ Expansion of the tax base by eliminating unnecessary barriers. â€¢ Alignment with FBRâ€™s ongoing digital transformation and automation initiatives. The association expressed confidence that adopting a mobile-based biometric solution would modernize taxpayer services, enhance compliance, and ultimately contribute to greater efficiency in tax collection.

Date: 2025-08-15

Details: August 15, 2025 Karachi, August 15, 2025 â€“ The Sindh Revenue Board (SRB) has released its annual list of the top 10 tax withholding agents for the fiscal year 2023-24, recognizing entities that played a major role in collecting Sindh Sales Tax (SST) on services. According to SRB, these top withholding agents collectively contributed Rs4.781 billion in SST during the year. Leading the list was Oil and Gas Development Co. Ltd. with Rs831.85 million, followed by United Energy Pakistan Ltd. at Rs775.55 million, and Pepsi-Cola International (Pvt) Ltd. at Rs496.11 million. Other notable agents include Sino Sindh Resources (Pvt) Ltd., Karachi Electric Supply Co. Ltd., Nestle Pakistan Ltd., Coronet Foods (Pvt) Ltd., Sukkur Electric Power Co. Ltd., Tapal Tea (Pvt) Ltd., and Pakistan Petroleum Ltd. Under the Sindh Sales Tax Special (Procedure) Withholding Rules, 2014, entities procuring taxable services must deduct and deposit the SST directly to the SRB. In FY 2023-24, total SST collected from withholding agents reached Rs37.43 billion, marking a remarkable Rs29.87 billion increase from the previous year. These agents include federal and provincial government departments, autonomous bodies, public sector organizations, private companies, and entities registered with SRB or FBR that operate in Sindh. The SRB highlighted that automation has been a key driver of this growth. The manual deduction process from Sindh government payments has been replaced with an SAP-based system at AG-Sindh and District Accounts Offices. Furthermore, SST deductions from federal government bills processed through DGPR Karachi and sub-offices have also been automated, leading to faster collections and reduced human error. Notably, the withholding rate for services procured by government offices and public sector bodies has been revised from one-fifth to four-fifths. Additionally, 100% SST must now be withheld if the service provider is a non-active SRB taxpayer, tightening compliance and closing revenue leakages.

Date: 2025-08-14

Details: August 14, 2025 Karachi, August 14, 2025 â€“ The Federal Board of Revenue (FBR) has released an updated set of guidelines outlining the scope, calculation method, and applicable rates of the super tax for the fiscal year 2025â€“26, aiming to bring clarity to a measure that has remained under debate since its inception. The super tax, governed by Section 4C of the Income Tax Ordinance, 2001, was initially introduced through the Finance Act, 2022, as an additional levy on high-income individuals and entities. Over time, the provision has been amended to adjust its impact on various income brackets. The latest amendments under the Finance Act, 2025, are designed to streamline the super tax regime, ensuring both fairness and predictability. Definition and Scope Under the revised framework, the super tax will continue to apply from the tax year 2022 onward at rates specified in Division IIB of Part I of the First Schedule. Notably, for the tax year 2022, banking companies remain exempt. The definition of â€œincomeâ€ for the purposes of this tax is broad, covering: â€¢ Profit on debt, dividends, capital gains, brokerage, and commission. â€¢ Taxable income under Section 9, excluding brought-forward depreciation and business losses. â€¢ Imputable income under Section 2(28A), minus the categories listed above. â€¢ Income computed under the Fourth, Fifth, Seventh, and Eighth Schedules, excluding certain carried-forward allowances. Payment and Recovery Taxpayers are required to pay, collect, and deposit the super tax as per timelines set out in Section 137 of the Ordinance. If payment is delayed or avoided, the Commissioner of Inland Revenue may issue a formal order specifying the amount payable, accompanied by a notice of demand. In the event of continued non-payment, recovery proceedings will be initiated under the relevant provisions of the Ordinance, including those covering advance tax obligations under Section 147. Rate Structure for FY 2025â€“26 The updated super tax rates, effective July 1, 2025, reflect a mix of reductions for certain income tiers while maintaining the top-end levy: â€¢ Up to Rs150 million â€“ Exempt (0%). â€¢ Rs150 million to Rs200 million â€“ 1% (unchanged). â€¢ Rs200 million to Rs250 million â€“ 1.5% (down from 2%). â€¢ Rs250 million to Rs300 million â€“ 2.5% (down from 3%). â€¢ Rs300 million to Rs350 million â€“ 3.5% (down from 4%). â€¢ Rs350 million to Rs400 million â€“ 5.5% (down from 6%). â€¢ Rs400 million to Rs500 million â€“ 7.5% (down from 8%). â€¢ Above Rs500 million â€“ 10% (unchanged, and the maximum rate). Policy Rationale According to FBR officials, these adjustments aim to create a more progressive structure without overburdening productive sectors. The reduction in some brackets is intended to incentivize reinvestment and promote compliance. At the same time, retaining the top rate ensures that those with the highest earning capacity continue to contribute proportionately to public revenues. The FBR has emphasized that the super tax remains an important tool for meeting fiscal needs, particularly in light of developmental spending commitments and revenue mobilization targets for FY 2025â€“26. It has also assured taxpayers that future changes will be subject to stakeholder consultation to minimize uncertainty. With the new guidelines in place, the tax authority expects both individuals and corporations falling under the super tax net to adjust their financial planning accordingly, while remaining compliant with filing and payment deadlines.

Date: 2025-08-08

Details: Recorder Report Published August 8, 2025 Updated about 2 hours ago ISLAMABAD: Business community lauded governmentâ€™s move to restrict Federal Board of Revenue (FBR) arrest powers and welcomed the issuance of the Sales Tax General Order (STGO), which outlines a detailed procedure for investigation prior to the arrest of any businessman. The FBR has issued a detailed procedure of investigation before any arrest of businessmen under sales tax general order (STGO) number 2 of 2025 on Wednesday. Economic Policy & Business Development (EPBD) Chairman Gohar Ejaz gave full credit to Field Marshal Asim Munir for safeguarding the respect and honour of the business community from the draconian powers granted to the Federal Board of Revenue (FBR) in the Finance Act 2025. Ejaz termed the governmentâ€™s decision of making it mandatory for tax officials to consult at least two representatives of the business community before initiating investigations that could lead to arrests in tax fraud cases as a victory for taxpayers of the country. â€œAs announced in the meeting on July 21, 2025 with business leaders, Field Marshal Asim Munir has safeguarded the respect and honour of the business community from the draconian powers granted to the FBR in the Finance Act 2025, following a presentation by the leadership of FPCCI â€” Dr. Gohar Ejaz, SM Tanveer, the President of FPCCI, and the presidents of 18 chambers, including Karachi, Lahore, Quetta, Sarhad, Faisalabad, Islamabad, Rawalpindi, Rahim Yar Khan, and Sialkot, Ejaz added. According to the STGO, the Board has directed that the following procedure shall be followed before initiating investigation leading to action under sub-section (8) and (9) of section 37A of the Sales Tax Act, 1990. (a) Inquiry shall not be initiated unless approval from the Commissioner has been obtained. (b) After conclusion of inquiry, the Commissioner shall not give approval to initiate investigation unless he has obtained approval from the Member (Inland Revenue Operations) of the Board. Before seeking approval of the Member (Inland Revenue Operations), it is binding upon the Commissioner to make consultation with two representatives of the business community from amongst such representatives as notified by the Board. (c) Board shall notify a list of representatives of business community on FBRâ€™s web portal. Copyright Business Recorder, 2025

Date: 2025-08-08

Details: August 8, 2025 KARACHI, August 8, 2025 â€” In a stunning fiscal triumph, the Large Taxpayers Office (LTO) Karachi has unleashed its enforcement might, recovering a jaw-dropping Rs4 billion in Capital Value Tax (CVT) from foreign assets during the 2024-25 fiscal year. This dazzling achievement eclipses last yearâ€™s Rs3.85 billion haul and sends a powerful message: hidden wealth abroad is no longer beyond the governmentâ€™s reach. According to sources, June alone witnessed an electrifying 77% surge in CVT collection, as LTO Karachi raked in Rs137 million â€” a sharp climb from Rs77 million in the same month of 2024. The driving force behind this surge is the relentless pursuit by the Automatic Exchange of Information (AEOI) Zone, a dedicated arm of LTO Karachi tasked with tracking Pakistanis who own undisclosed foreign assets. Through aggressive case reshuffling and forensic audit scrutiny, the zone has tightened the noose on tax evaders with unprecedented precision. The CVT, introduced under the Finance Act, 2022, is laser-focused on taxing high-value possessions â€” from luxury vehicles on Karachiâ€™s roads to sprawling estates and financial holdings overseas. Section 8 of the Act lays out its reach: 1. Motor Vehicles in Pakistan with engines above 1300cc, or electric vehicles with battery capacity exceeding 50 kWh, face a 1% CVT on their assessed value. 2. Foreign Assets of resident individuals valued above Rs100 million are slapped with a 1% CVT, calculated in Pakistani rupees using the State Bankâ€™s official exchange rate. 3. Special Assets designated by the Federal Government can attract up to a 5% CVT. For foreign assets, the tax bite applies to directly owned, indirectly held, or beneficially enjoyed wealth abroad. When original cost records are murky, fair market valuation becomes the yardstick. Inland Revenue officers are empowered to recover unpaid CVT â€” plus penalties â€” holding individuals personally liable under the strict provisions of the Income Tax Ordinance, 2001, and its allied rules. With Karachi emerging as the nerve center of Pakistanâ€™s tax enforcement drive, LTO Karachiâ€™s crackdown on foreign assets is reshaping the revenue landscape. This bold offensive not only swells the national exchequer but also signals a new era where offshore holdings are no longer a safe haven. The message is clear: for those hiding assets overseas, Karachi is watching â€” and collecting.

Date: 2025-08-07

Details: August 7, 2025 Islamabad, August 7, 2025 â€” In a blistering rebuttal, the Federal Board of Revenue (FBR) has condemned what it calls a â€œmalicious media campaignâ€ aimed at sabotaging Pakistan Customsâ€™ groundbreaking Faceless Customs Assessment (FCA) system. The FBR expressed deep dismay over how certain media outlets have seemingly aligned with vested interests determined to dismantle the revolutionary, corruption-curbing initiative. Introduced in December 2024, the FCA was designed to modernize customs clearance by minimizing human interaction and increasing transparency. However, according to the FBR, powerful elements who profited handsomely from the archaic manual system are now orchestrating a smear campaign to roll back these reforms. â€œSome media outlets have irresponsibly echoed these fabricated narratives without fact-checking or verifying the data,â€ the FBR stated. A recent example cited by the FBR involves sensational media reports alleging that luxury vehicles, including a 2023 Toyota Land Cruiser, were cleared at shockingly undervalued ratesâ€”claiming one such vehicle was assessed at merely Rs17,635. The FBR categorically refuted this, clarifying that the actual assessed value was Rs10.05 million, resulting in Rs47.2 million being collected in duties and taxes. The FBR further lambasted the media for falsely linking FCA to trade-based money laundering in vehicle imports. It emphasized that such imports are legally permitted for overseas Pakistanis under the Gift and Transfer of Residence schemesâ€”mechanisms that do not require any outward remittance of foreign exchange from Pakistan. Moreover, such imports predate the FCAâ€™s inception. Importantly, the FBR reminded critics that ongoing internal audits and performance reviews of the FCA are part of its own robust oversight mechanismsâ€”measures twisted out of context by sensationalist media reports. The FBR stressed its unwavering commitment to reform, vowing not to succumb to orchestrated media pressure. â€œPakistanâ€™s economic integrity must not be held hostage by misinformation. The media must act responsibly and uphold journalistic ethics,â€ it concluded.

Date: 2025-08-06

Details: Sohail Sarfraz Published about 4 hours ago ISLAMABAD: The Federal Board of Revenue (FBR) has directed the Collectors of Customs to impose penalties on importers involved in unnecessary delay in payment of duty & taxes after auction of goods at ports. The FBR issued instructions to the Collectors of Customs here on Tuesday to enforce enforcement provisions of the Customs Act 1969. Tax authorities have strictly directed the heads of customs in the field formations to enforce provisions of the Finance Act 2025. Collectors of Customs were informed section 82 of the Customs Act provides a mechanism for auction of goods not cleared or warehoused or transhipped or removed from the port. To avoid port congestion and unnecessary delay in payment of duty & taxes, penalties have been provided to cater different situations arising at the ports. However, the Collector of Customs in unavoidable circumstances may waive-off the penalty. The FBR has also directed the Chief Collector of Customs, Appraisement (South), Karachi is directed to ensure development of the system accordingly in WeBoC. Senior FBR officials also informed Collectors of Customs that amendment has been made in sub-section (3) of Section 179 of the Customs Act, 1969 whereby the time period for deciding the cases related to clause (s) of section 2 and for cases where goods are lying at sea-port, airport or dry port has been enhanced from 30 days to 45 days. Amendment has also been made in sub-section (4) whereby Board can regulate the system of adjudication including transfer of cases and extension of time-limit as deemed appropriate after reasons to be recorded in writing. The de-minimise limit for courier parcels has been revised/reduced from Rs 5,000 to Rs1,000 to check misuse of the facility particularly for e-commerce. The chief collector of customs, Airports, Islamabad and all collectors of Customs Airports are directed to ensure strict implementation, FBR officials added. Copyright Business Recorder, 2025

Date: 2025-08-06

Details: Sohail Sarfraz Published about 4 hours ago ISLAMABAD: The Federal Board of Revenue (FBR) has notified the exclusion of cotton yarn, grey cloth and raw cotton from the purview of the Export Facilitation Scheme (EFS). However, iron and steel scrap would remain under the scope of the EFS. The FBR has amended Customs Rules through issuance of SRO.1435 (I)/2025 here on Tuesday. The draft SRO.1359 (I)/2025 was issued on July 29, 2025. The final notification has now been issued to notify the revised EFS. Under the SRO.1435 (I)/2025, these three items have been excluded from zero-rating facility under the EFS scheme and therefore cotton yarn, grey cloth and raw cotton now chargeable under standard rate regime of sales tax. The revised scheme said that the import of compressor scrap and motor scrap shall be allowed for copper content only. The raw cotton, cotton yarn and grey cloth falling under the respective headings of Pakistan Customs Tariff shall be excluded from the scope of EFS. Provided that import consignments of raw cotton, cotton yarn and grey cloth with bills of lading issued within ten days of the issuance of this notification shall he allowed under this scheme. According to the SRO.1435(I)/2025, under the revised EFS, the â€œinsurance guaranteeâ€ means a guarantee issued by an insurance company duly notified by the Board, having Pakistan Credit Rating Agency rating of AA++, on such format and conditions as prescribed by the Board. â€œTill the notification of the format of insurance guarantee by the Board, the EFS users shall be required to submit bank guarantee, wherever applicableâ€, it said. Provided that EFS users shall be allowed to acquire new raw' materials to the extent of 10% of total authorization without requiring prior approval from the Regulatory Collector or input output coefficient organization. The copper content for motor scrap shall be allowed on value of ten percent by weight and for compressor scrap eight percent by weight. Customs duties, sales tax and withholding tax shall be applicable at import stage on balance steel scrap component which shall only be sold to sales tax registered melters, the revised scheme said. In exceptional cases, a committee comprising of senior officers from FBR, Ministry of Commerce and Ministry of Industries and Production may grant further extension in utilization period up to nine more months for reasons to be recorded, the revised EFS added. Copyright Business Recorder, 2025

Date: 2025-08-06

Details: Sohail Sarfraz Published about 4 hours ago ISLAMABAD: The Federal Board of Revenue (FBR) has issued three forms for new categories of withholding agents i.e. Online marketplace, payment intermediary andcourier companies to file monthly statements against digitally ordered goods. The FBR has issued SRO 1429(I)2025 to amend Sales Tax Rules, 2006 on Tuesday. The monthly statements seek details of supplies-wise amount withheld during the Month. The monthly statement for the online marketplace has been issued through form (STR-34). The STR-35 form would deal with the monthly statement to be filed by â€œPayment intermediaryâ€. The STR-36 form deals with the monthly statement to be filed by the courier companies. According to the notification issued by the FBR, the procedure shall apply to taxable goods which are digitally ordered through online marketplace. website or similar applications. The chapter shall also apply to payment intermediary and courier. if payment is made online or Cash on Delivery (CoD) as the case may be, against digitally ordered supplies. The payment intermediary or courier, as the case may be, intending to settle payment of digitally ordered taxable goods, shall deduct an amount of sales tax as specified in the Eleventh Schedule to the Act and make payment of the balance amount to the supplier or vendor. In case the withholding agent is a payment intermediary, it shall deposit the withheld amount of sales tax and file monthly statement summarizing all the particulars of the supplier or vendor and supplies made in the month against digitally ordered goods, as set out in STR-35 electronically for each month by the 10thof the following month and deposit the amount deducted at source. In case the withholding agent is a courier, it shall deposit the withheld amount of sales tax and file monthly statement summarizing all the particulars of the supplier or vendor and supplies made in the month against digitally ordered goods, as set out in STR-36 electronically for each month by the 10th of the following month and deposit the amount deducted at source. In case of supplies made against the digitally ordered taxable supplies through online marketplace, the marketplace in Pakistan shall file monthly statement indicating the supplier-wise orders processed and taxable goods delivered in the month against digitally ordered goods as set out in STR-34 electronically for each month by 10th of the following month. In case Online Market Place (OMP) is also providing Courier services it shall also file a statement required to be filed by couriers. Payment intermediary and courier shall issue a certificate showing deduction of sales tax to the supplier or vendor by the withholding agent duly specifying the name and registration number of the supplier, description of digitally ordered goods and the amount of sales tax deducted and paid, the FBR added. Copyright Business Recorder, 2025

Date: 2025-08-05

Details: BR Web Desk Published August 5, 2025 After meeting its revenue target for July, the government believes that the Federal Board of Revenue (FBR) is on track to achieve the full-year target. The development was highlighted during a weekly review meeting held in Islamabad regarding matters related to FBR, read a statement released by the Prime Ministerâ€™s Office (PMO) on Tuesday. The FBR provisionally collected over and above Rs754 billion during July 2025 against the assigned monthly target of Rs748 billion, reflecting achievement of 100.9% percent of target. Chairing the meeting, Prime Minister Shehbaz Sharif expressed satisfaction on the increase in the tax-to-GDP ratio, terming the development a result of reforms undertaken in the FBR. â€œThe federal government and I personally will fully support and safeguard the reform measures taken by the authorities,â€ he said. He directed authorities to ensure consistent implementation of reforms by eliminating red tape and institutional barriers. PM Shehbaz directed that in order to sustain the gains of tax collection in the ongoing fiscal year, the federation and provinces must work in coordination with an integrated strategy. â€œEffective and efficient implementation of already levied taxes in the ongoing fiscal year will play a key role in further increasing tax collection,â€ he said. PM Shehbaz urged authorities in FBR to formulate a strategy in consultation with relevant federal agencies and the provinces, to improve the tax-to-GDP ratio. He said that the FBR and customs clearance departments should enhance their capacity in collaboration with the Ministry of Information and Broadcasting to raise public awareness about the reformed system. During the meeting, it was told that on the special directive of the prime minister, the income tax returns form has been compiled online in Urdu. The meeting was told that approximately 84% of filers will benefit from the simplified and Urdu-based online income tax return form. It was learnt that the establishment of digital enforcement stations for customs clearance across the country is underway on a priority basis. The meeting was informed that a full implementation of the Centralized Assessment Unit (CAU) and the faceless customs system will help make the customs clearance system more efficient and transparent.

Date: 2025-08-05

Details: August 5, 2025 Islamabad, August 5, 2025 â€“ Prime Minister Muhammad Shehbaz Sharif on Tuesday directed the immediate removal of red tape and institutional hurdles to ensure the permanent and effective implementation of wide-ranging reforms within the Federal Board of Revenue (FBR). While chairing a high-level meeting on matters related to the FBR, Shehbaz Sharif expressed satisfaction over the recent rise in the tax-to-GDP ratio, attributing the progress to reform efforts initiated by the federal government. He reiterated the governmentâ€™s commitment to supporting institutional transformation and reaffirmed his full backing for ongoing changes within the FBR. â€œI, along with the federal government, fully support the reform initiatives of the FBR. We must now ensure uniform and nationwide implementation, especially of revolutionary customs clearance reforms,â€ said Shehbaz, urging the use of modern technology to reduce processing times and enhance efficiency in customs procedures. The premier emphasized the need for close collaboration between federal and provincial authorities to sustain the momentum of increased tax collection achieved through FBR reforms. He highlighted that consistent application of already-imposed taxes will be key to expanding the revenue base in the upcoming fiscal year. A robust strategy, involving coordination among the FBR, federal institutions, and provincial governments, was ordered to further enhance the tax-to-GDP ratio. Prime Minister Shehbaz made it clear that the set timelines and reform targets for the next fiscal year will not be revised under any circumstances. To improve public awareness and trust in tax and customs systems, Shehbaz directed the FBR and customs departments to enhance their outreach in partnership with the Ministry of Information and Broadcasting. He also praised the initiative to launch the income tax return form in Urduâ€”developed under his special directiveâ€”which is expected to benefit 84% of tax filers by simplifying the filing process. During the meeting, it was revealed that the FBR has already achieved its revenue collection target for July, the first month of FY2025â€“26. Officials also informed the Prime Minister that digital enforcement stations for customs clearance are being rolled out on a priority basis. Additionally, the implementation of the Centralized Assessment Unit (CAU) and faceless customs system is underway, aimed at ensuring transparency and efficiency. The meeting concluded with updates on ongoing policy changes and reforms in various sectors, aligned with the broader reform vision. The meeting was attended by senior cabinet members, including Ministers Ahad Khan Cheema, Attaullah Tarar, Azam Nazeer Tarar, Ali Pervaiz Malik, Bilal Azhar Kayani, the Attorney General, and the Chairman FBR, among other high-ranking officials.

Date: 2025-08-04

Details: Recorder Report Published about 2 hours ago ISLAMABAD: Business community has appreciated the constitution of Grievance Redressal Committees to first investigate complaints of tax frauds before arrest of the registered persons within the sales tax regime. Commenting on FBRâ€™s three new notifications, the President of the Quetta Balochistan Chamber of Commerce and Industry, Haji Muhammad Ayub Mariani, Senior Vice President Haji Akhtar Kakar, and Vice President Engineer Mir Wais Khan Kakar have announced that the Chamber, in collaboration with the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and other provincial chambers, has successfully persuaded the federal government to address its concerns over the discretionary arrest powers granted to Federal Board of Revenue (FBR) officers in the federal budget (2025-26). They stated that CEOs and directors of companies can no longer be arrested merely on suspicion. Instead, dedicated Grievance Redressal Committees have been formed to investigate complaints first. Any action will be taken only after committee review and recommendations. Reacting to the governmentâ€™s formation of Grievance Redressal Committees and its response to the concerns of the business community, the Chamber leaders said the Balochistan business community, like their counterparts across the country, had expressed serious reservations over certain anti-business clauses included in the federal budget. Under the leadership of Patron-in-Chief Haji Ghulam Farooq Khilji, the Quetta Chamber not only raised their voice individually but also jointly with FPCCI and other chambers. The collective concerns were conveyed to Prime Minister Shehbaz Sharif, Field Marshal General Asim Munir and key federal ministers. From now onwards, any complaint against a company will be first brought before the committee, which will decide whether FBR should proceed with any legal action. They noted that under Section 37A of the Sales Tax Act, FBR previously had powers to arrest CEOs and directors on mere suspicion. This clause has now been amended following the successful advocacy campaign. They also welcomed the inclusion of representatives from business chambers in the redressal process. Regarding Section 40B, which had also generated widespread complaints, the chamber confirmed that it, too, will now fall under the jurisdiction of the Grievance Redressal Committees, which will evaluate complaints and recommend further steps. The Chamber also highlighted its successful demand for phased implementation of digital invoicing, stating that this approach aligns with international best practices. An SRO (Statutory Regulatory Order) has already been issued in this regard, and it is expected to help increase awareness and bring more businesses into the tax net. The Chamber expressed its gratitude to Prime Minister Shehbaz Sharif, Field Marshal General Asim Munir, and other federal leaders for addressing their concerns. Copyright Business Recorder, 2025

Date: 2025-08-04

Details: Sohail Sarfraz Published about 2 hours ago ISLAMABAD: Federal Minister for Law and Justice Azam Nazeer Tarar has said that the present government has introduced reforms in the tax system to bring transparency and reduce burden on the existing taxpayers. He was addressing the Tax Bar Summit 2025 organized by Pakistan Tax Bar Association (PTBA), in collaboration with the Lahore Tax Bar Association (LTBA). The inaugural ceremony was attended by senior government functionaries, including Senator Azam Nazeer Tarar, Federal Minister of Law & Justice and Mian Tauqeer Aslam Chairman Appellate Tribunal Inland Revenue. The opening session features insightful presentations on Pakistanâ€™s digital tax transformation by Nasrulminnallah Mian, Head country Programme and Team Lead Digital Transformation Asian Development Bank and Dr Najeeb Ahmad Member IR-Policy Federal Board of Revenue (FBR). Addressing the gathering, the law minister stressed the need for fair and considerate tax legislation, keeping in mind the genuine concerns of taxpayers. He acknowledged the rising poverty due to population pressures and economic conditions but said the government relies heavily on the existing taxpayer base to help lift people out of poverty. â€œThe prime minister envisions expanding the tax net instead of overburdening existing taxpayers,â€ said Tarar, adding that reforms are urgently needed to broaden the tax base. He reiterated the governmentâ€™s commitment to transparency and merit-based governance in the tax system. â€œThis is the first government that has made merit-based appointments in the Appellate Tribunal,â€ Tarar stated. â€œFifteen appointments have been made so far, and another fifteen are on the way all on merit,â€ he assured, noting that previous appointments had been politically motivated. He promised proper checks and balances for all newly appointed officials. Speaking at the summit, Tarar said that under the leadership of Prime Minister Shehbaz Sharif, the federal team is working tirelessly for the countryâ€™s economic development. â€œThere was a time when fears of default loomed large over Pakistan,â€ he remarked, adding that another country in the region with a smaller population had already defaulted, making Pakistanâ€™s situation even more critical. â€œA default in a country of 250 million people would not have been a small matter,â€ he noted, crediting the business community and all national stakeholders for helping avert that crisis. Tarar emphasized that tax collection and managing national expenditures are fundamental responsibilities of the state, which sometimes require difficult decisions. â€œTax collection is not an easy task for any government,â€ he added. â€œIf Pakistan progresses, we all progress,â€ concluded the law minister, reaffirming his governmentâ€™s dedication to economic reform through fair taxation. Copyright Business Recorder, 2025

Date: 2025-08-03

Details: Sohail Sarfraz Published August 3, 2025 ISLAMABAD: The Federal Board of Revenue (FBR) has extended the deadline for all public companies and importers for sales tax registration up to August 10, 2025 for integration with the boardâ€™s system to issue electronic sales tax invoices. The other categories of registered persons (who are not falling under the categories of turnover basis) would be required to be registered by November 10, 2025. The deadline for sales tax registration of non-corporate taxpayers including individuals has been extended by November 10, 2025. The FBR has specified separate deadlines for registration, testing of system and date for issuance of electronic invoices. The FBR has divided companies based on their annual turnover for the purpose of integration. According to an SRO1413(I)/2025 issued by the FBR on Friday, the FBR has directed that all sales tax registered persons specified shall complete the registration and testing for integration of their hardware and software with the Boardâ€™s computerized system through a licensed integrator or PRAL and shall issue electronic invoices, not later than the respective dates specified. The FBR has superseded notification No SRO 709(l)12025, dated the 22nd April2025. Under the new deadlines, the date for testing of system for all public companies has been set August 25, 2025 and date for issuance of electronic invoices is September 1, 2025. All companies with turnover exceeding Rs1 billion declared in sales tax return for the last 12 months, would be required to be registered by August 10, 2025. The date for testing of system for these companies is August 25, 2025 and date for issuance of electronic invoices is September 1, 2025. In case of importers, they would be required to be registered by August 10, 2025. The date for testing of system for importers is August 25, 2025 and date for issuance of electronic invoices is September 1, 2025. All companies with turnover exceeding Rs100 million but not exceeding Rs1billion declared in sales tax returns for the last 12 months, would obtain registration by September 10, 2025. The date for testing of system for importers is September 30, 2025 and date for issuance of electronic invoices is October 1, 2025. All companies with turnover not exceeding Rs100 million declared in sales tax returns for the last 12 months, would obtain registration by October 10, 2025. The date for testing of system for importers is October 30, 2025 and date for issuance of electronic invoices is November 1, 2025. All individuals and association of persons with turnover exceeding100 million rupees declared in sales tax returns for the last 12 months, would be required to be registered by September 10, 2025. The date for testing of system for importers is September 30, 2025 and date for issuance of electronic invoices is October 1, 2025. The other categories of registered persons would be required to be registered by November 10, 2025. The date for testing of system is November 30, 2025 and date for issuance of electronic invoices is December 1, 2025. Copyright Business Recorder, 2025

Date: 2025-08-03

Details: August 3, 2025 Islamabad, August 3, 2025 â€“ The Federal Board of Revenue (FBR) has officially clarified that ineligible individuals may now benefit from a form of tax amnesty, allowing them to enter the documented economy without fear of questioning about the origins of their declared resources. The clarification was issued through Income Tax Circular No. 1 of 2025-26, which outlines key amendments to the Income Tax Ordinance, 2001, made via the Finance Act, 2025. While the FBR avoided directly using the term â€œamnesty,â€ the policy has the same practical effect. The FBR stated that â€œsufficient resourcesâ€ declared in the statement of source of expenditure shall not be treated as undeclared income under Section 111 â€” the section dealing with unexplained income and assets. Through the introduction of Section 114C, the FBR has defined two categories of taxpayers: eligible and ineligible persons. Eligibility is determined based on whether a person has declared sufficient financial resources in their wealth statement, financial statement, or source of investment and expenditure statement. These resources must be at least 130% of the value of the intended transaction, covering cash, cash equivalents, gold, stocks, and other assets. This amnesty-like provision allows ineligible individuals a pathway to become eligible for major economic transactions â€” including purchasing luxury vehicles, acquiring high-value property, or investing in securities â€” by simply declaring sufficient resources. These declared resources will not trigger inquiries under the law, thus protecting taxpayers from scrutiny regarding their origin. However, the FBR has outlined strict restrictions for those still classified as ineligible. Such persons are barred from: â€¢ Purchasing a motor vehicle with an invoice value over Rs. 7 million; â€¢ Acquiring or transferring immovable property worth more than Rs. 100 million; â€¢ Investing more than Rs. 50 million in mutual funds, stocks, or similar instruments, unless it is a new investment; â€¢ Withdrawing over Rs. 100 million in cash from bank accounts. An economic transaction involving exchange of already declared capital assets will also be treated as valid cash-equivalent for eligibility, according to the FBR. The FBR confirmed that this new system, offering an indirect amnesty, will not apply to non-residents or public companies, except for cash withdrawals. The exact implementation date will be notified by the federal government through the official Gazette. This marks a strategic shift by the FBR to bring more undocumented wealth into the formal sector through a limited-scope amnesty program.

Date: 2025-08-01

Details: Islamabad, August 1, 2025 â€” The Federal Board of Revenue (FBR) has constituted two high-level committees to ensure accountability, fairness, and transparency in actions taken by tax officials under Section 37A and Section 40B of the Sales Tax Act, 1990. These committees have been formed specifically for the redressal of grievances and to regularly review the conduct of field formations involved in enforcement actions. In its first notification, the FBR announced the formation of a committee for the redressal of grievance concerning arrests made under sub-sections (8) and (9) of Section 37A. The committee will consist of: â€¢ Member Inland Revenue (IR) Operations, FBR â€¢ Member Legal IR, FBR â€¢ President or nominee from the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) â€¢ President or nominee from the relevant local chamber of commerce where the arrested individuals belong The Secretary (Sales Tax â€“ Operations) IR will serve as the committee secretary without voting rights. The committee is empowered to co-opt other business community representatives as needed. It will meet bi-weekly to examine complaints and grievances submitted by registered taxpayers. If any case of maladministration is identified, the committee will report its findings to the FBR chairman, who may initiate action against the involved officials. In a separate notification, the FBR also formed another committee for the redressal of grievance and periodic evaluation of field operations under Section 40B of the Sales Tax Act. This second committee includes: â€¢ Member IR Operations, FBR â€¢ Member Legal IR, FBR â€¢ Nominees from FPCCI, Karachi Chamber of Commerce and Industry, and Lahore Chamber of Commerce and Industry The Chief (ST-Operations) IR will act as the secretary of this committee. Like the first, it can also include sectoral representatives and will meet fortnightly. The committeeâ€™s focus is to ensure fair application of the law in monitoring and enforcement activities. Stakeholder input will be solicited during meetings, particularly from the relevant sector associations. These initiatives by the FBR reflect a commitment to taxpayer facilitation and institutional accountability. Through structured redressal mechanisms, the FBR aims to build confidence among businesses while improving oversight of tax enforcement.

Date: 2025-08-01

Details: Islamabad, August 1, 2025 â€“ The Federal Board of Revenue (FBR) has issued strict directives to all field offices across Pakistan to immediately implement enhanced fire safety protocols in the wake of a recent fire incident at a key tax office. According to the FBR, all officesâ€”whether housed in rented or owned premisesâ€”must take the following precautionary measures without delay: 1. Conduct a detailed inspection of all electric wiring to identify and eliminate potential fire hazards. 2. Ensure that all emergency exits are clearly marked and kept unobstructed at all times for safe evacuation. 3. Maintain and correctly position fire extinguishers throughout the premises and ensure they are regularly tested for functionality. These instructions follow a fire outbreak on July 30, 2025, at 3:30 PM in the RDFC Building, Islamabad, which houses the Corporate Tax Office along with other FBR departments. The incident prompted an immediate response from the Fire Brigade and FBR officials. Upon the fireâ€™s breakout, emergency services were quickly alerted. Building occupants were swiftly evacuated, including several individuals who were briefly trapped. Thanks to the coordinated efforts of the Fire Brigade and FBR staff, the fire was contained to the room of origin, preventing major damage. No FBR records or critical assets were harmed. To maintain uninterrupted operations, the Corporate Tax Office has been temporarily relocated to the adjacent Regional Tax Office Islamabad, where services have resumed. The affected building remains under observation, and security personnel have been stationed to safeguard official records. The FBR praised the swift, coordinated response of the Fire Brigade and internal staff, stressing that such incidents highlight the need for robust safety infrastructure. Offices are now required to report compliance with the fire safety directives to FBR headquarters at the earliest.

Date: 2025-08-01

Details: August 1, 2025 ISLAMABAD â€“ In a landmark crackdown on financial crime, Pakistan has imposed a record monetary penalty of Rs111 billion on 13 import firms involved in a massive money laundering operation through inflated invoices on solar panel imports. This is one of the most significant trade-based money laundering cases in the countryâ€™s history, exposing deep-rooted vulnerabilities in the trade and financial system. The judgment was delivered by Dr. Erum Zahra of the Customs Adjudication Authority, who found the companies guilty of laundering Rs120 billion out of Pakistan by over-invoicing solar panels. Despite appearing to operate as legitimate businesses, all 13 firms were discovered to be shell entities, with no physical operations, dummy proprietors, and bank accounts used solely for illicit transactions. These companies received Rs140 billion in deposits, including Rs45 billion in unexplained cash injections. The fraud involved importing solar panels at grossly inflated prices and then selling them in the local market for just Rs85 billion, creating a Rs35 billion discrepancy that confirmed deliberate over-invoicing to send money abroad under the guise of trade. The largest penalties were imposed on four of the entities, totaling Rs98.6 billion collectively. The Federal Board of Revenue (FBR), along with the Post Clearance Audit (South), has filed 13 FIRs implicating 45 individuals. Despite multiple summons, none of the accused appeared in court, prompting the adjudicating officer to levy personal penalties of Rs45 million and order the seizure of 327 containers of solar panels. The FBR anticipates recovering Rs1.5 billion through public auctions of these seized goods. The money laundering scheme has triggered alarm across Pakistanâ€™s enforcement agencies and government circles. The Prime Ministerâ€™s Office has constituted a high-powered committee to investigate how such large-scale fraud escaped detection. Agencies involved include the SECP, Customs, IRS, FMU, banks, and law enforcement. Officials say the next phase will involve tracing, freezing, and confiscating properties and other assets acquired through money laundering. The outcome is expected to drive major reforms in how Pakistan detects and responds to trade-based financial crimes.

Date: 2025-07-31

Details: Islamabad, July 30, 2025 â€“ The Federal Government has announced that the newly introduced Digital Presence Proceeds Tax will not apply to digitally ordered goods and services supplied from outside Pakistan, provided they are already chargeable under the provisions of the same law. This exemption, notified through SRO 1366(I)/2025 under Section 15 of the Digital Presence Proceeds Tax Act, 2025, will be effective from July 1, 2025. The Digital Presence Proceeds Tax Act, 2025, enacted through the latest Finance Act, aims to bring foreign digital vendors into the tax net where they have a significant presence in Pakistanâ€™s digital economy but no physical establishment. This legislation addresses the long-standing issue of multinational tech companies generating substantial revenue from Pakistani users without contributing to the national tax system. The Act was introduced to respond to the global shift in business models, where companies operate extensively through digital platforms, interact with users, and generate profits without physical presence in market jurisdictions. As a result, countries like Pakistan have faced challenges in taxing such transactions under traditional rules based on permanent establishment. However, recognizing the complexity of cross-border transactions and ongoing international negotiations for a unified global digital tax framework, the FBR has decided to exempt such transactions from the new tax for now. The term â€œdigital presenceâ€ as defined in the Act refers to any foreign entity offering digitally ordered goods or services to Pakistani users exceeding one million rupees annually, along with other qualifying factors like local currency billing and ongoing user engagement. This exemption will offer relief to consumers and streamline cross-border e-commerce while the FBR continues to enhance its capacity for managing digital taxation and enforcing tax compliance from foreign vendors with active digital presence in Pakistan.

Date: 2025-07-31

Details: Karachi, July 31, 2025 â€“ In a significant move impacting the renewable energy sector, the Directorate General of Customs Valuation has released fresh customs values for imported solar inverters, aimed at ensuring a more transparent and market-aligned assessment of duties and taxes. The updated valuation has been issued through Valuation Ruling No. 2015/2025, dated July 25, 2025. This new ruling supersedes the earlier Valuation Ruling No. 1913/2024, which had been in effect since November 5, 2024. The Directorate, a key division under the Federal Board of Revenue (FBR), has revised these values under the authority granted by Section 25-A of the Customs Act, 1969. The earlier ruling had come under scrutiny when importers of solar inverters challenged the valuation on grounds of overpricing. They filed an appeal under Section 25-D of the Customs Act, prompting the Director General to review the matter. In Order-in-Revision No. 08/2025, issued on February 4, 2025, the Director General directed a re-evaluation, recommending clearer sub-categorization based on inverter capacity. Following this directive, customs authorities conducted a fresh review. Importers were asked to provide supporting documents such as export Goods Declarations (GDs), Letters of Credit (LCs), and other financial instruments to validate their claims. The review also addressed technical ambiguities surrounding inverter classifications, particularly the difference between Hybrid, On-Grid, and Off-Grid solar inverters. â€¢ Hybrid inverters are capable of managing solar power, battery storage, and grid integration. These are equipped with dedicated terminals to export excess electricity to the grid. â€¢ On-grid inverters operate strictly with grid connectivity and cannot function during outages as they lack battery storage. â€¢ Off-grid inverters, on the other hand, are designed for independent operation using solar panels and battery backup. They automatically switch to generator or AC input when solar or battery power is insufficient, but do not export energy to the grid. The revised ruling aims to bring clarity and fairness in duty assessments and better reflect the diversity of solar inverter products being imported into Pakistan.

Date: 2025-07-30

Details: KARACHI, July 30, 2025 â€“ In a dramatic enforcement blitz, the Federal Board of Revenue (FBR) has unleashed a sweeping investigation into Benami transactions linked to the import of old and used cars, signaling a no-holds-barred approach to dismantling one of Pakistanâ€™s most entrenched tax-evasion rackets. The probe, spearheaded by FBRâ€™s anti-Benami zone, targets the rampant abuse of the Vehicle Baggage and Gift Schemesâ€”programs originally intended to benefit overseas Pakistanis. Instead, these schemes have allegedly been hijacked by commercial importers using clearing agents and complicit customs officials to flood the market with untaxed cars. The FBR has zeroed in on vehicle clearances from February 2018 to May 2025, issuing notices to clearing agents with a tight seven-day deadline to submit detailed documentation. These include import records, customs declarations, data on true beneficiaries, CNICs, bank statements, contracts, and explanations justifying how commercial cars were cleared under personal import schemes. FBR officials accuse the agents of deliberately concealing the identities of actual car owners in a vast network of Benami operations that cost the national exchequer billions in lost revenue. Failure to comply will trigger criminal proceedings under the Benami Transactions (Prohibition) Act, 2017, showcasing the governmentâ€™s resolve. Insiders revealed that this aggressive crackdown was personally greenlit by Prime Minister Shehbaz Sharif, who directed authorities to halt the misuse of overseas Pakistani passports in car imports under residence, baggage, and gift schemes. While the government tried to plug loopholes through the 2022 Import Policy Orderâ€”requiring foreign exchange proof via Proceed Realization Certificatesâ€”FBR has now discovered a disturbing trend: fake certificates submitted with the help of private banks, enabling illegal clearances. Officials warn that without a dedicated commercial import policy for used cars, the loopholes will persist. The FBR has now signaled it will not rest until the entire Benami car import nexus is dismantled, and all culprits, including rogue banks, are brought to justice.

Date: 2025-07-29

Details: ISLAMABAD, July 29, 2025 â€“ The Federal Board of Revenue (FBR) has officially reconstituted the committee responsible for evaluating applications related to the integration of registered persons under the Sales Tax Rules, 2006. A formal notification in this regard was issued by the FBR on Monday. The move comes amid growing anticipation within both the corporate and non-corporate sectors for an extension in the deadline for sales tax integration. Tax professionals have indicated that businesses are awaiting clarity from the FBR regarding future compliance timelines. According to the new notification, the FBR has rescinded its earlier directive issued under Notification (IR-Ops)/2025-R dated June 16, 2025. The reconstitution exercise has been carried out under the powers granted by the Sales Tax Act, 1990; the Sales Tax Rules, 2006; the Income Tax Ordinance, 2001; and the Income Tax Rules, 2002. The newly formed committee will now oversee the evaluation process of licence applications for integration. It will be chaired by Abid Mehmood, Director General (IT & DT), with the following members: Arshad Nawaz Chheena (Chief Revenue-Operations), Aamar Javed (Chief Systems/Secretary), Abdul Hameed (Secretary STB), Abid Naeem (CIO PRAL), and Mehboob-ur-Rehman (Senior Manager Development PRAL). The committeeâ€™s Terms of Reference (ToRs) include: 1. Scrutinizing submitted documents and determining eligibility for new registrations; 2. Reviewing additional documents in previously approved registrations under updated rules; 3. Preparing Requests for Proposal (RFP) in line with the new regulations; 4. Assessing complaints and making recommendations for licence cancellations to the FBR. The FBR confirmed that this notification replaces all prior orders concerning this matter and has been issued with the approval of the competent authority. The step reflects FBRâ€™s continued efforts to streamline tax administration and promote transparent integration processes.

Date: 2025-07-29

Details: ISLAMABAD, July 29, 2025 â€“ The Nowshera Tax Bar Association has lodged a formal complaint with the Federal Tax Ombudsman (FTO) over the recently imposed QR code scanning requirement for logging into the IRIS portal and the mandatory integration of business systems with the Federal Board of Revenue (FBR). Muneeb Ahmad, Advocate High Court and President of the Nowshera Tax Bar, emphasized that while the FBRâ€™s efforts to enhance digital security are appreciated, these measures have created severe barriers for tax consultants, tax bar members, and ordinary taxpayers. The tax bar urged the FTO to take suo motu notice and suspend these requirements until practical solutions are implemented. The complaint outlined multiple challenges: 1. Even e-intermediaries not registered under sales tax are being forced to scan QR codes. 2. Users attempting login from a mobile phone cannot scan the QR code from the same device, necessitating a second device. 3. Overseas taxpayers cannot receive SMS from Pakistan. 4. Users with unupdated profiles cannot log in, even if they have valid credentials. 5. Many professionals operate on desktop systems without mobile access. 6. Large corporations and retail chains with multiple sales tax registrations struggle with daily QR scanning. 7. Numerous taxpayers lack smartphones, internet, or reliable network signals â€“ particularly in remote areas like Waziristan. 8. Corporate setups often have the registered mobile number with a director who may be unavailable during deadlines. 9. Authorized consultants cannot access QR codes, barring them from filing returns. 10. Even in the U.S., OTPs are only required once unless IP address changes â€“ flexibility that the FBR system lacks. To resolve the issue, the tax bar proposed several remedies: â€¢ Fully activate e-intermediary access under Section 52A of the Sales Tax Act, 1990. â€¢ Introduce triple-channel QR delivery (via SMS, WhatsApp, and email). â€¢ Allow QR-free access for low-risk activities and same-IP logins. â€¢ Enable multi-user access for corporate tax filers with separate credentials. â€¢ Introduce a 60-day grace period for taxpayers to update contact information before enforcing QR code logins. Furthermore, the tax bar has requested the FBR to extend the deadlines for filing Sales Tax Returns for May and June 2025 to accommodate those currently facing technical hurdles. In addition to QR login concerns, the bar highlighted serious issues with the current online integration requirements under the Sales Tax Act. These include: â€¢ Violation of Article 18 of the Constitution, which guarantees free trade. â€¢ Financial burdens from hardware, software, and recurring charges. â€¢ Data privacy risks due to forced use of third-party systems. â€¢ Complexity of integration manuals, only understandable by IT professionals. â€¢ Absence of a direct FBR dashboard for tax filers. â€¢ Harassment by FBR field staff conducting invoice checks on roads. The Nowshera Tax Bar urged the FTO and FBR to adopt a more inclusive, simplified, and secure approach to digital compliance. According to the tax bar, the current measures are not only impractical but may also deter tax compliance rather than enhance it.

Date: 2025-07-28

Details: Islamabad, July 28, 2025 â€“ The Federal Board of Revenue (FBR) has officially assigned additional responsibilities to a senior official through a notification issued on Monday. As per the announcement, Mohammad Iqbal, a BS-22 officer of the Inland Revenue Service, has been given the additional charge of the post of Member (IR Operations), in addition to his current role as Member (Admin/HR) at FBR Headquarters, Islamabad. The FBRâ€™s notification did not elaborate on the reason for assigning dual responsibilities. However, the decision comes at a time of heightened speculation regarding potential changes in the FBRâ€™s top leadership, including widespread rumors about a possible replacement of the current FBR Chairman. Mohammad Iqbal, now holding two key positions, has been recognized for his significant contributions to administrative reforms and human resource development within the organization. His expanded role is viewed as a strategic move to ensure continuity in Inland Revenue operations during a critical phase for the FBR. The development follows a wave of high-level promotions within the revenue body. The FBR recently promoted seven officers to the elite BS-22 grade, acknowledging their exceptional service across Inland Revenue and Customs divisions. These promotions are part of the governmentâ€™s broader effort to empower institutional leadership and enhance revenue performance. Among the newly promoted officials is Dr. Hamid Ateeq Sarwar, previously serving as Member Inland Revenue â€“ Operations. His policy leadership has been instrumental in shaping FBRâ€™s enforcement and collection strategies. With Iqbal stepping in as acting Member (IR Operations), the FBR aims to maintain momentum in its tax policy execution. The FBR continues to strengthen its senior management team, with each Member bringing diverse expertise to ensure effective governance, compliance enforcement, and digital transformation across Pakistanâ€™s tax administration.

Date: 2025-07-28

Details: The Federal Board of Revenue (FBR) has released the updated withholding tax card for salary income, applicable during the tax year 2025-26. This withholding mechanism is crucial for salaried individuals, as it outlines how tax is to be deducted from salary income by employers throughout the fiscal year. As per FBR guidelines, any person responsible for making salary payments is legally bound to deduct tax at the time of payment. This deduction is made on the employeeâ€™s estimated annual income under the head of â€œsalary,â€ using the average tax rate applicable for the year. The average rate is calculated using a formula where: â€” A represents the total tax payable on the estimated salary income (including any tax under Section 4AB); and â€” B is the estimated annual salary income plus any chargeable income under Section 4AB. Thus, the formula A/B gives the average rate at which the withholding tax on salary income will be computed. Additionally, adjustments must be made for any tax withheld from other income sources or tax credits claimed under Sections 61 and 63. Employers must also consider any previous excess or deficiency in deductions. The tax deducted from salary income is adjustable at the time of final return filing. Below is the official withholding tax slab for salary income for the tax year 2025-26: S# Taxable Income Rate of Tax 1 Up to Rs. 600,000 0% 2 Rs. 600,001 to Rs. 1,200,000 1% of the amount exceeding Rs. 600,000 3 Rs. 1,200,001 to Rs. 2,200,000 Rs. 6,000 + 11% of amount exceeding Rs. 1,200,000 4 Rs. 2,200,001 to Rs. 3,200,000 Rs. 116,000 + 23% of amount exceeding Rs. 2,200,000 5 Rs. 3,200,001 to Rs. 4,100,000 Rs. 346,000 + 30% of amount exceeding Rs. 3,200,000 6 Above Rs. 4,100,000 Rs. 616,000 + 35% of amount exceeding Rs. 4,100,000 This tax structure ensures that individuals with higher salary income contribute proportionally more in taxes. Understanding the salary income tax card is vital for accurate payroll processing and tax compliance. Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal, financial, or tax advice. While efforts have been made to ensure the accuracy and reliability of the content, readers are advised to consult the official notifications issued by the Federal Board of Revenue (FBR) or seek professional advice for specific guidance regarding salary income and withholding tax obligations applicable for the tax year 2025-26. The tax rates and policies are subject to change based on government regulations and amendments to the Income Tax Ordinance, 2001.

Date: 2025-07-27

Details: Islamabad, July 27, 2025 â€” The Federal Board of Revenue (FBR) has imposed a major penalty on a lady Inland Revenue Officer (IRO) for proven charges of inefficiency and misconduct. Ms. Farina Shakeel, serving in the Directorate of Internal Audit (IR), Lahore, has been demoted to the lower post of Inspector Inland Revenue (BS-16) for a period of three years, effective immediately. According to official documents, disciplinary proceedings were initiated under the Civil Servants (E&D) Rules, 2020 against Ms. Shakeel on multiple charges. The inquiry was conducted by Ms. Yasmeen Fatima, Director of Intelligence & Investigation (IR), Lahore, who concluded that three out of five charges against the Inland Revenue officer stood proven. These included direct communication of complaints to top officials and filing harassment allegations against her supervisors without following the proper channel. Following the inquiry, Ms. Shakeel was issued a Show Cause Notice through the Directorate General of Internal Audit (IR), Islamabad. In her reply, she denied the allegations and requested a personal hearing. During the hearing held on July 17, 2025, the accused Inland Revenue officer reiterated her stance and alleged mistreatment by senior officers. However, a departmental representative confirmed that all her harassment complaints were found baseless after a thorough fact-finding inquiry. The same conclusion was also drawn by the Federal Ombudsman for Protection Against Harassment of Women at Workplace, which dismissed her complaint. After reviewing the case, including written and oral submissions, the competent authority ruled that the Inland Revenue officer had failed to justify her actions. The misconduct and inefficiency charges were upheld, and the penalty of demotion was formally approved. In addition to demotion, Ms. Shakeelâ€™s performance allowance has been withheld for one year. She will be required to reappear for performance evaluation after the penalty period. However, she retains the right to appeal the decision to the Appellate Authority under the Civil Servants (Appeal) Rules, 1977 within 30 days of notification. The FBR reiterated its commitment to ensuring discipline and accountability within the Inland Revenue Service through fair and transparent enforcement of rules.

Date: 2025-07-26

Details: ISLAMABAD: Federal Board of Revenue (FBR) Member Inland Revenue (Operations) Dr Hamid Ateeq Sarwar publicly admitted that the FBR has to file appeals against all cases won by taxpayers before tribunals, high courts and Supreme Court of Pakistan due to fear of National Accountability Bureau (NAB) and Auditor General of Pakistan. During the meeting of the Public Accounts Committee held at the Parliament House on Friday, there are cases where we are sure to lose at the level of courts, but we have no option but to file appeals against all cases decided in favour of the taxpayers to avoid audit objections. It is a general practice of the tax department to file appeal against all orders of the taxpayers despite the fact that the department may lost case in court. Taxpayers time and money is also wasted during futile litigation between the FBR and the taxpayers. â€œWe have to challenge all cases against taxpayers before all forums available including higher courts,â€ he said. â€œWe know that the NAB and the Auditor General of Pakistan (AGP) keeps an eye on the FBR. Therefore, we file appeal against all cases against the taxpayersâ€, the FBR Member said. When Public Accounts Committee (PAC) objected that why FBR failed to settle audit objections of billions since 2010-11 to 2013-14, the FBR Member stated that most of these cases are under litigation in courts. Some cases are pending in courts for the last 13-14 years. He referred to many cases where AGP has raised audit objections of billions, but the cases have been decided by courts and audit objections stands deleted. In some cases, the FBR Member said that we already know that the cases of the tax department have weak legal grounds, but we have to challenge all cases in higher courts. He said that every person file appeal before Commissioner Appeals against the orders of the FBR where tax demand has been raised. People exhaust all forums of appeal including Appellate Tribunal, High Court and Supreme Court till case is finally decided against them. Even people go to the forum of Federal Tax Ombudsman (FTO) against the FBR and Alternative Dispute Resolution Committees for resolution of tax disputes. The FBR Member stated that it is not under the control of the FBR to force the courts to early decide tax related cases. â€œWe cannot force the High Courts and Supreme Court to hear FBRâ€™s cases on priority basisâ€, he said. Dr Hamid Ateeq Sarwar suggested the PAC to engage chartered accountant or tax expert or expert lawyer during the meetings between the AGP and FBR to review audit paras. In most of the cases, low grade officers of the AGP are engaged in framing audit paras, having less knowledge of interpretation of law. This would promptly resolve many policy and enforcement issues in question. This would also end unnecessary litigation in courts. Many issues of the AGP requires interpretation of law. The presence of tax experts in the audit meetings would reduce litigation in courts. The wrong interpretation of tax laws also creates embarrassing situation before the higher judicial fora. Therefore, the expert opinion of tax experts should also be taken during the meetings of the departmental accounts committee, he added. The PAC agreed to the proposal of Dr Hamid Ateeq Sarwar and directed the AGP to engage tax experts in the departmental accounts committee meetings as well. Copyright Business Recorder, 2025

Date: 2025-07-26

Details: Islamabad, July 26, 2025 â€“ The Federal Board of Revenue (FBR) has suffered a legal setback as the Supreme Court of Pakistan dismissed its petition in a high-profile input tax adjustment case, reinforcing the importance of substantiated tax enforcement actions. The Supreme Court, comprising Justice Munib Akhtar and Justice Aqeel Ahmed Abbasi, delivered its ruling on June 30, 2025, in the case titled Commissioner Inland Revenue vs. M/s Mustafa Enterprises and another. The apex court dismissed the FBRâ€™s appeal against the Lahore High Courtâ€™s earlier judgment, stating that no substantial question of law had arisen from the case. The court found that the show cause notice issued to the respondents was vague and lacked material evidence. The FBR had alleged that Mustafa Enterprises claimed inadmissible input tax of Rs. 55 million based on fake or â€œflyingâ€ invoices. However, the Supreme Court observed that no proof was presented to establish that the suppliers were black-listed during the relevant tax period. The case originated from an audit of tax returns for the period July 2019 to June 2020. The Assistant Commissioner had imposed a recovery demand, claiming the company had committed tax fraud. However, both the Appellate Tribunal Inland Revenue (ATIR) and the Lahore High Court had overturned the decision, citing absence of verified evidence and due process. Reinforcing the High Courtâ€™s stance, the Supreme Court held that the entire case rested on presumptions rather than verified facts. The Supreme Court emphasized that neither invoices nor payment records proving fake transactions were ever confronted or authenticated. As a result, the apex court found no merit in the civil petition for leave to appeal filed by the FBR. This verdict marks a significant development in Pakistanâ€™s tax jurisprudence. It also serves as a reminder to the tax authorities that all actions must be grounded in solid evidence and compliance with due legal process. The Supreme Courtâ€™s decision underscores the judiciaryâ€™s role in maintaining checks and balances over administrative overreach.

Date: 2025-07-25

Details: Hamza Habib Published about 2 hours ago ISLAMABAD: The Senate Standing Committee on Finance, while voicing its reservations over the statistics of the IT export proceeds provided by the State Bank of Pakistan (SBP), expressed apprehensions that other export sectors were using it for tax evasion. In a meeting of the Senate Standing Committee on Finance held under the chairmanship of Senator Saleem Mandviwalla, the SBP official said that the total IT exports from Pakistan was $920 million. He said that this amount was compiled on the basis of data provided by the banks. Senator Anusha Rahman questioned the credibility of the data. She said that in this amount there is no bifurcation that how much amount comes through the software exports or services provided by freelancers. Rahman said because of the non-availability of authentic data of freelancers export proceeds, the government is finding it difficult to convince international payment platforms such as PayPal to start operations in Pakistan because they think that the consumer base for them is very small. Chairman Committee Saleem Mandviwala said that a lot of textile mills have opened software houses and they were remitting a portion of their export proceeds in guise of IT exports. Rahmansaid there is only one percent tax on non-registered freelancers and IT exporters and on registered freelancers the tax rate is mere 0.25percent, whereas, the tax rate on textile and other sectors is 30 percent. She said there is a strong possibility that the exporters from other sectors might be using IT platform for tax evasion. The SBP official said the banks were fully vigilant and responsible to find out that whether any exporter was misusing the IT platform for tax evasion. He said so far, the SBPhad not find out any such dubious activity. He assured the committee that from now onwards the SBP would bifurcate freelancersâ€™ exports data on its website. While discussing software exports over the last 15 years, the committee recommended the SBP to submit data with the clear categorisation of freelancersâ€™ share in software exports. The committee also recommended the non-inclusion of periodical and journal subscriptions in the IT services list. Furthermore, the committee was briefed on the AI-based customs system introduced within the Export Facilitation Scheme. Officials informed that the AI system has been introduced to upgrade the existing machine learning model in order to bring efficiency to Pakistan Customs. Senator Mandviwalla inquired about the FBRâ€™s plan to introduce AI in Pakistan Customs and its expected benefits for the business sector. The committee recommended a detailed briefing on the inclusion of AI in Pakistan Customs, following the models of developed nations, in the upcoming meeting. Copyright Business Recorder, 2025

Date: 2025-07-25

Details: Karachi, July 25, 2025 â€“ In a move that has sent shockwaves across Pakistanâ€™s fertilizer industry, the Federal Board of Revenue (FBR) has abruptly revoked a crucial tax exemption certificate previously granted to Engro Fertilizer Limited, one of the sectorâ€™s top players. The exemptionâ€”initially issued for the Tax Year 2026 and covering the period from July to December 2025â€”has been cancelled by the Large Taxpayers Office (LTO) Karachi, FBRâ€™s largest revenue-collecting body. The move has raised red flags among industry stakeholders, investors, and policy observers, who view it as part of an increasingly aggressive revenue drive. A tax consultant confirmed to PkRevenue that â€œEngro Fertilizer Limited is now obligated to deduct and deposit applicable taxes, as the earlier tax exemption has officially been nullified.â€ LTO Karachi officials, when contacted, cited Section 153(1)(a) of the Income Tax Ordinance, 2001, stating the exemption certificate could only be retained if the companyâ€™s advance tax liability had been fully discharged. â€œOur review revealed that Engro Fertilizerâ€™s advance tax payments for the period up to December 2025 remain pending,â€ officials stated in an internal communication. This bold step has plunged the fertilizer industry into uncertainty. Industry insiders warn of widespread unease, with some describing the atmosphere as â€œchaotic.â€ One senior tax advisor voiced concern: â€œHow can we expect investment when compliant corporations like Engro Fertilizer are punished, while the undocumented economy thrives untouched?â€ Adding fuel to the fire, several tax professionals are reportedly considering relocation to friendlier business climates in Saudi Arabia and the UAE, where regulatory enforcement is seen as more stable and respectful. Critics argue that the FBRâ€™s decision contradicts the principle of equitable taxation. Rather than broadening the tax net to include Pakistanâ€™s vast informal economy, authorities are intensifying scrutiny on documented sectors such as fertilizerâ€”already burdened with complex compliance requirements. Ironically, dozens of government-allocated vehicles meant for outreach and enforcement remain idle as officers reportedly prefer the comfort of air-conditioned offices. Meanwhile, in an alarming revelation, sources claim the FBR has already collected large sums of advance taxes earmarked for FY2026 to meet last fiscal yearâ€™s targets. The business community is demanding an urgent review, stressing that tax exemption frameworks must remain consistent and predictable. They urge the Ministry of Finance and FBR to adopt a balanced, fair approach to protect the fertilizer sectorâ€”an essential pillar of Pakistanâ€™s agricultural economy.

Date: 2025-07-24

Details: Islamabad â€“ July 23, 2025 â€” Pakistanâ€™s aggressive push to expand its tax base may be costing more than itâ€™s collecting, warns a hard-hitting new report by the Asian Development Bank (ADB). The findings paint a troubling picture of misplaced priorities, mounting administrative burdens, and a tax system in dire need of simplification and reform. The ADBâ€™s deep dive into Pakistanâ€™s tax machinery reveals a stark truth: despite a surge in the number of tax filers over the past decade, the countryâ€™s income tax-to-GDP ratio has barely budged. In simpler terms, Pakistan is bringing more people into the tax netâ€”but theyâ€™re barely paying anything. ðŸŽ¯ A Lesson for Developing Nations The ADB cautions other Developing Member Countries (DMCs) against blindly following Pakistanâ€™s example. â€œExpanding the tax base without addressing compliance and simplification doesnâ€™t work,â€ the report states. â€œPakistan offers a cautionary tale.â€ The study groups Pakistan alongside countries like Rwanda, South Africa, and Uganda, where expanded tax filing failed to produce any meaningful bump in revenue. A growing list of tax filers, it turns out, does not automatically translate into a growing pile of tax money. â€œThe tax system is bloated with noncompliant filers who report zero or negligible income,â€ the ADB notes. ðŸ“‰ Tax Filing: Quantity Over Quality? The raw numbers might look promising on paper. From 2007 to 2021, the number of tax filers more than tripled. But hereâ€™s the kicker: a substantial chunk of these new filers either declared no income or dodged meaningful contributions altogether. Real tax revenue, adjusted for GDP, has hovered stubbornly between 3% and 4%â€”unchanged for over a decade. So, whatâ€™s gone wrong? According to the ADB, Pakistanâ€™s tax authorities have focused too heavily on swelling the ranks of filers instead of strengthening compliance among existing taxpayers. Without addressing the roots of noncompliance, the system has simply expanded in sizeâ€”not strength. ðŸ’° The Rich Pay, The Rest File and Forget Another shocking revelation: Pakistanâ€™s income tax is overwhelmingly paid by the top 1% of earners. Figures show that the top 0.1%, 1%, and 10% of income earners bear the bulk of the countryâ€™s tax burden. Meanwhile, lower income percentiles contribute little to nothing, raising serious concerns about vertical equity and sustainability. This skewed burden, the ADB says, not only undermines fairness but discourages larger firms from playing fair, especially when they see smaller players escaping scrutiny. ðŸš¨ Expanding the Net, Shrinking the Results From 2014 onwards, Pakistan introduced aggressive and punitive measures to pressure nonfilers into compliance: â€¢ Higher withholding tax rates for nonfilers â€¢ Bans on nonfilers buying property or vehicles â€¢ Mandatory proof of tax filing for professional licenses and contracts â€¢ Restrictions on opening bank accounts and stock market investments â€¢ A potential ban on international travel for chronic nonfilers Yet, despite the crackdown, actual revenue from new taxpayers has remained negligible. The ADBâ€™s data shows a dramatic increase in tax filers post-2014, but revenue growth stayed flat. In fact, most of the real income tax continues to flow from long-term, existing taxpayers. âš Compliance Is Costlyâ€”And Ineffective So, whatâ€™s the cost of this â€œmore is moreâ€ strategy? ADB warns that: â€¢ Tax authorities face rising administrative costs trying to process millions of returns with little or no revenue attached. â€¢ Taxpayers face higher compliance costs, spending time and money filing meaningless or minimal returns. â€¢ The informal sector remains untouched, with many evading detection or registering only to fulfill formality. In the words of the report: â€œPakistanâ€™s current approach has created a bureaucratic burden without the financial reward.â€ ðŸ§© Informality: The Unsolved Puzzle Pakistanâ€™s massive informal sector is another persistent obstacle. The report highlights that informal employmentâ€”especially among womenâ€”has steadily increased since 2006. This signals the failure of the formalization push and underscores the need for gender-sensitive reforms. Meanwhile, countries like Viet Nam have successfully reduced female informal employment. Why not Pakistan? The ADB hints at the answer: the current approach is all stick and no carrot. There are few incentives for small businesses or workers to voluntarily join the formal sector, especially when doing so comes with greater scrutiny, higher costs, and little tangible benefit. ðŸ“Š More Data, But Not Better Results Proponents argue that increasing tax filing improves economic data. While itâ€™s true that more filings produce more data, thereâ€™s no evidence that this has translated into smarter audits or better policy outcomes in Pakistan. The ADB says if the extra data were useful, we wouldâ€™ve seen gains by now. We havenâ€™t. ðŸ” Rethinking the Strategy The report delivers a clear message: Pakistan needs to simplify its tax system to encourage genuine participation. Compliance needs to be made less intimidating and more rewarding. Rather than expanding the base with noncontributing filers, resources should be channeled toward: â€¢ Improving compliance among existing filers â€¢ Simplifying return procedures for individuals and businesses â€¢ Creating targeted incentives for formalization â€¢ Launching public awareness campaigns to build trust in the tax system ADBâ€™s recommendation? A data-driven approach that evaluates the actual return on enforcement investments. In other words, stop blindly chasing more filers and start focusing on what works. ðŸ” Whatâ€™s the Endgame? So, why persist with a failing strategy? Possibly because more filers look good on political scorecards, even if the fiscal reality tells another story. But if Pakistan wants a sustainable, equitable and effective tax regime, it must rethink its obsession with registration numbers and pivot toward real, meaningful compliance. The stakes are high. An overburdened formal sector, a disillusioned taxpayer base, and a bloated administration are dragging Pakistanâ€™s tax system down. Without bold and strategic reforms, the country risks turning its entire tax apparatus into a paper tigerâ€”all bark, no bite. The path forward is clear: simplify the tax process, target compliance, and foster trust. Because when taxes are fair, simple, and transparent, citizens donâ€™t need to be coercedâ€”they choose to comply. And thatâ€™s the kind of change Pakistan needs right now.

Date: 2025-07-23

Details: BR Web Desk Published July 23, 2025 The number of income tax return filers in Pakistan has crossed 7.2 million by June 30, 2025, up from 4.5 million in the previous year â€” a significant increase of 60% attributed to the Federal Board of Revenueâ€™s (FBR) ongoing reforms and digitisation efforts. The development came to light during a review meeting on ongoing FBR reforms held under the chairmanship of Prime Minister Shehbaz Sharif on Wednesday, read a statement released by the Prime Ministerâ€™s Office (PMO). During the meeting, it was shared that enforcement actions and other reforms by FBR have resulted in a historic 1.5% increase in the tax-to-GDP ratio in 2025 compared to 2024. It was reported that due to the faceless customs clearance system, the clearance time will be reduced from 52 hours to 12 hours within the next three months. PM calls for third-party validation of FBR reforms In the retail sector, tax collection on income increased by Rs455 billion by June 30, 2025, compared to 2024. This rise was attributed to the implementation of Point-of-Sale (POS) integration, alignment of retailer systems with FBR, and enforcement efforts. It was told that a specialised system has been introduced to allow for appeals within the faceless system, ensuring timely case resolutions through video links. Due to these measures, the weighted average tariff on imports has decreased by 2.16%, reducing raw material costs for industries and supporting the manufacturing sector, read the statement. It was learnt that international expertsâ€™ recommendations will also be incorporated into tax reforms and the digitisation of various economic sectors. The meeting was also presented with additional proposals for FBR reforms. PM Shehbaz appreciated the efforts of FBR officials and staff involved in the reform process and directed that actionable targets with timelines be finalised and presented next week. The prime minister stated that while achieving targets is a positive sign, further effort is needed. He emphasised that FBRâ€™s digitisation has supported goal achievement, and steps must now be taken to make it a sustainable, permanent system. PM Shehbaz orders crackdown on tax evasion, under-invoicing PM Shehbaz instructed that additional enforcement measures be introduced to curb the informal economy. He also directed that a comprehensive roadmap be developed for the restructuring of FBRâ€™s Digital Wing, with a timeline established for achieving set objectives. The prime minister stressed that all stakeholders must be consulted and their input incorporated into the reform process. He also directed that the facilitation of businesses, traders, and taxpayers should be prioritised in implementing FBR reforms.

Date: 2025-07-23

Details: Karachi, July 23, 2025 â€“ A ticking legal time bomb may be brewing at the Federal Board of Revenue (FBR) as experts raise alarm over the ongoing return filing process for the Tax Year 2025â€”initiated without a finalized SRO (Statutory Regulatory Order). In a startling revelation, Syed Rehan Hasan Jafri, former president of Karachi Tax Bar Association (KTBA), has questioned the legality of this yearâ€™s income tax return filing. In an exclusive chat with PkRevenue.com, Jafri said, â€œThe FBR has opened the return filing portal without issuing the SRO for finalized return forms.â€ Letâ€™s break this down for taxpayers: ðŸ” Whatâ€™s the Issue? On July 7, the FBR issued draft return forms via SRO 1212 and SRO 1213, requesting feedback within 7 days. But before issuing a finalized SRO, the FBR went ahead and launched the portal for 2025 return filingâ€”leaving many in shock. ðŸ“… Why Does the SRO Matter? Legally, once an SRO for finalized return forms is issued, taxpayers are entitled to a 3-month window for filing. â€œWithout that legal backing, this entire process could be challenged,â€ said Jafri. ðŸ–¥ Tech Trouble Galore The chaos doesnâ€™t end there. Many taxpayers are struggling with IRIS login issues, especially after the mandatory 60-day password reset. â€œFBR shouldâ€™ve launched a campaign months ago to guide users,â€ Jafri stressed. â€œNow, people are locked out just when return filing season has begun.â€ ðŸ“‰ Decline in Filings Expected? Jafri fears a major drop in return filing this year, citing confusion, portal issues, and legal uncertainty. â€œHow can people comply if the rules are still floating in limbo?â€ ðŸ“¦ QR Code Confusion Even more bizarre, QR code requirements meant for sales tax filers are reportedly appearing for income tax return filers too. â€œThis kind of mix-up undermines trust in the system,â€ Jafri warned. ðŸ’¼ Bank Account Dilemma New return forms require bank account infoâ€”yet many salaried individuals in the private sector donâ€™t maintain accounts due to job changes. â€œThis condition will discourage genuine return filing,â€ he added. ðŸš¨ Call to Action Jafri urged the Finance Minister to step in immediately. â€œFBR should be a facilitatorâ€”not a legal trap setter. Without a proper SRO, this entire exercise risks becoming void.â€ Are you ready to file your returnâ€”or are you still waiting for the SRO? Stay tuned as the story unfolds.

Date: 2025-07-23

Details: Karachi, July 23, 2025 â€“ In a dramatic move that has rattled the already tense business environment, the Federal Board of Revenue (FBR) has fired off a barrage of Artificial Intelligence (AI)-generated notices targeting sales tax return anomalies spanning the last five years. This sudden strike by the FBR has left taxpayersâ€”especially exporters and manufacturersâ€”reeling in disbelief. Thousands of businesses registered under the Sales Tax Act, 1990 woke up to a surprise on July 23: AI-generated notices exposing inconsistencies in their sales tax filings from 2019 to 2024. This latest maneuver by the FBR has been dubbed nothing short of â€œtax terrorismâ€ by critics, who argue that it amounts to open harassment of the business class. The timing of this development could not be more provocative. Just days ago, on July 19, the business community observed a countrywide strike protesting controversial sales tax clauses introduced through the Finance Act, 2025. With tensions still simmering, the FBR has reignited the firestorm by unleashing a fresh wave of noticesâ€”this time courtesy of cutting-edge AI algorithms. A sample notice warns: â€œThe FBR uses advanced data analysis techniques to scrutinize tax returns and benchmark them against industry peers. The system operates without human involvement and performs ongoing surveillance to ensure compliance.â€ While the FBR claims these are merely cautionary messages urging future compliance, the fine print reveals a far grimmer reality. If taxpayers fail to address these anomalies, they could face: â€¢ Hefty financial penalties â€¢ Invasive FBR monitoring within business premises â€¢ Aggressive best judgment assessments â€¢ Freezing of bank accounts or sealing of operations â€¢ Selection for detailed audit scrutiny Tax experts warn that this digital crackdown could cripple already stressed enterprises. The FBRâ€™s insistence that these notices are routine fails to convince a business community already burdened by overregulation and economic uncertainty. In a climate of growing distrust, the FBRâ€™s latest AI experiment may have just opened a new front in its battle with taxpayersâ€”one that could have serious economic fallout

Date: 2025-07-23

Details: Islamabad, July 23, 2025 â€“ In a dramatic turn of events, the Federal Board of Revenue (FBR) has dropped the hammer on a principal appraiser involved in a serious case of negligence that cost the exchequer dearly. The FBR has imposed a strict penalty on Mr. Irfan Masih, a principal appraiser (BS-16), following revelations of gross inefficiency in a high-stakes customs case involving the misdeclaration of imported goods. The case stems from a misvaluation scandal in which imported coffee sachets were shockingly assessed at a lowball rate of USD 3.90/kg instead of the actual USD 8.75/kg â€” a move that raised red flags across the department. Disciplinary proceedings were launched under the Civil Servants (Efficiency & Discipline) Rules, 2020, and the FBR wasted no time in charging the principal appraiser for his failure to apply due diligence. A formal inquiry, led by Deputy Collector Aadarsh Jawahery, concluded that while charges of corruption and misconduct could not be proven, inefficiency on the part of the principal appraiser was â€œundeniably established.â€ Despite repeated chances to explain himself, Irfan Masih admitted during a Zoom-based hearing that the valuation ruling had been overlooked due to a rush of workload. The FBRâ€™s Member (Admn/HR) slammed the appraiserâ€™s lax approach, noting that someone with over eight years of experience should have shown â€œgreater vigilance and commitment to revenue safeguarding.â€ As a result, the Authority rejected the initially recommended â€œCensureâ€ penalty as insufficient and instead ordered the withholding of one increment for a year without cumulative effect â€” a stinging rebuke of the officerâ€™s negligence. Adding to the blow, the officerâ€™s performance allowance has been suspended for six months, a move that further underscores the gravity of the lapse. Though reinstated into service, his suspension from January 7, 2025, to date will be counted as leave under Revised Leave Rules. The penalized principal appraiser now has the option to appeal this decision within 30 days, but the damage to his professional record may already be irreparable. This incident sends a loud and clear message from the FBR â€” inefficiency, especially when it jeopardizes state revenue, will no longer be tolerated in silence.

Date: 2025-07-23

Details: Islamabad, July 23, 2025 â€“ Prime Minister Shehbaz Sharif on Wednesday reaffirmed his governmentâ€™s commitment to comprehensive tax reforms and directed the Federal Board of Revenue (FBR) to intensify its efforts to bring the informal economy into the tax net. Chairing a high-level review meeting on the progress of ongoing reforms in the FBR, Shehbaz Sharif lauded the recent accomplishments made by the revenue authority. However, he emphasized that these gains must be translated into long-term, sustainable improvements in tax collection and governance. While acknowledging the reforms as â€œencouraging,â€ Shehbaz underscored that the ultimate goal is to establish a fully digitized, transparent, and business-friendly tax system. He noted that despite several milestones being achieved, â€œgreater efforts are still required to overcome challenges such as undocumented transactions and informal economic activities.â€ The prime minister issued clear directives to the FBR to accelerate the pace of digital transformation, restructure its IT and digital enforcement wings, and prepare a detailed roadmap to eliminate loopholes exploited by the informal sector. He also emphasized the need for meaningful consultations with stakeholders, including traders, industrialists, and the broader taxpayer community. â€œTax reforms should not just be about increasing revenueâ€”they must ease compliance and reduce the burden on the honest taxpayer,â€ Shehbaz said. Officials from the FBR briefed the prime minister on key achievements. The tax-to-GDP ratio saw a notable increase of 1.5% in FY2025, while the number of income tax filers rose sharply from 4.5 million to over 7.2 million by June 30. In addition, revenue from the retail sector surged by Rs. 455 billion, largely due to the integration of point-of-sale (POS) systems and stricter monitoring. The implementation of a faceless customs clearance system was also highlighted, which has begun reducing clearance times drasticallyâ€”from 52 hours to just 12. Further, a new digital case-hearing mechanism via video link has been launched to promote transparency and efficiency. The meeting also heard that tariff reductions on imported raw materials are easing costs for local industries, thanks to policy measures aligned with reform targets. Shehbaz directed the FBR to submit a detailed, time-bound action plan for the next phase of reforms by next week. He appreciated the dedication of FBR officials and reiterated that the modernization of tax administration is essential for Pakistanâ€™s economic future.

Date: 2025-07-23

Details: Karachi, July 23, 2025 â€“ If youâ€™re a business engaged in taxable supplies and still havenâ€™t registered for sales tax, itâ€™s time to take notice! The Finance Act, 2025 has introduced tough new restrictions through three powerful sectionsâ€”14AC, 14AD, and 14AEâ€”under the Sales Tax Act, 1990. These sweeping changes aim to crack down on unregistered persons and bring them into the formal tax net. Tax expert and former KTBA President, Muhammad Zeeshan Merchant, explained that the core objective of these new sales tax provisions is to apply strategic pressure on non-compliant businesses until they comply. ðŸ”’ Section 14AC â€“ Restrictions on Bank Operations This section enables the Commissioner to freeze the bank accounts of individuals engaged in taxable activity but not registered under the Sales Tax Act. Hereâ€™s how it works: â€¢ The person gets three notices/hearings to register voluntarily. â€¢ If they fail to respond, the Commissioner can freeze their bank account for three working days. â€¢ This action can be repeated twice more, with one-week intervals. â€¢ Still not registered? A permanent ban on bank operations can be imposed. Relief: Once registration is completed, the bank ban is lifted within two working days. Appeals can be filed within 30 days before the Chief Commissioner. The section will be enforced once the FBR issues an official notification. ðŸ Section 14AD â€“ Restrictions on Immovable Property Transfer This kicks in 15 days after permanent bank account suspension, applying even greater pressure. A 3-member committee (Chief Commissioner, Concerned Commissioner, and a Trade Body member) steps in. They: â€¢ Issue public notices, â€¢ Hold a personal hearing, â€¢ Recommend either to impose or lift a property transfer ban. The Commissioner can then formally order the property registration authority to block transactions. Relief: Registration lifts the ban within 2 working days, with appeal rights remaining intact. ðŸ›‘ Section 14AE â€“ Final Restrictions on Unregistered Businesses This section allows the Chief Commissioner to: â€¢ Seal premises â€¢ Seize movable property â€¢ Appoint a receiver to control business operations All of this happens after public notice and an open hearing by the 3-member committee. The decision is then published on the FBRâ€™s website and national newspapers. Relief is swiftâ€”once the business registers, all actions are reversed within 2 working days. Appeals can be made to FBR within 30 days. These bold steps reflect FBRâ€™s intensified drive to ensure sales tax compliance by introducing restrictions that leave little room for evasion. Businesses are now strongly urged to regularize their status before these legal hammers drop.

Date: 2025-07-22

Details: Karachi, July 21, 2025 â€“ Big changes are now live for Pakistanâ€™s e-commerce sector under the Finance Act, 2025. According to renowned tax expert and High Court Advocate Muhammad Zeeshan Merchant, only tax registered sellers are eligible to make online supplies under the new legal framework. Speaking on the impact of these amendments, Merchant, a former president of the Karachi Tax Bar Association, highlighted a critical shift: â€œFrom now on, only registered individuals holding both a National Tax Number (NTN) and a Sales Tax Registration Number (STRN) can sell goods online. This rule applies equally to both resident and non-resident sellers.â€ So, what exactly counts as an online supply? If youâ€™re buying or selling goods through websites, mobile apps, or digital marketplaces, youâ€™re part of e-commerce. Payment can be through credit cards, bank transfers, or even cash on delivery (CoD). But whether payment is made online or not, tax rules now apply the same way. Under the revised Sales Tax Act, 1990, a 2% sales tax is now applicable on online transactions. Hereâ€™s the kicker â€” this tax is automatically collected by intermediaries such as banks, couriers, payment gateways, and digital wallets. Yes, even your CoD orders are now subject to deduction. â€œThese 2% deductions will be considered final for certain sellers, such as cottage industries and non-Tier-1 retailers. However, they wonâ€™t be able to claim any input tax credits for these transactions,â€ Merchant added. But the most crucial part? Registration is now non-negotiable. Section 14 of the Sales Tax Act has been expanded through sub-sections 1A and 1B, making it mandatory for any person selling digitally-ordered goods â€” including non-residents â€” to be registered, unless exempted. Also, online marketplaces and couriers are now legally bound to serve only those sellers who are tax registered. This includes verifying that the seller has both an NTN and an STRN before handling their online transactions. A further new clause (2A) now empowers tax authorities to forcibly register individuals who havenâ€™t complied despite being liable â€” after giving them a chance to be heard. In short: if youâ€™re not registered, youâ€™re out of the online game. The message is clear â€” get registered, stay compliant, and play fair in Pakistanâ€™s rapidly evolving e-commerce landscape.

Date: 2025-07-22

Details: BR Web Desk Published July 22, 2025 While focusing on the recently enacted expansions of the Federal Board of Revenueâ€™s (FBR) powers, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Atif Ikram Sheikh with the trade and industryâ€™s delegation met Chief of Army Staff (COAS) Field Marshal Syed Asim Munir, NI (M). who assured them of his full support for the economic growth of the country, according to a FPCCI statement on Tuesday. The development comes days after Pakistanâ€™s two largest cities - Karachi and Lahore - faced partial and complete market closures over a strike call by traders against what they called â€œanti-businessâ€ tax measures introduced in the Finance Act 2025. Karachi, Lahore hit by strike against â€˜anti-businessâ€™ tax measures In the Finance Act, the government expanded the FBR powers with Sections 37A and 37B, which empower the tax authority officials with arbitrary arrests; Section 21(S), which imposes harsh penalties on cash transactions of Rs200,000 or more; mandatory digital invoicing under SRO 709; and the imposition of e-Bilty under Section 40(C). â€œMr Atif Ikram Sheikh maintained that the business community is immensely thankful to Field Marshal Asim Munir for immediately directing that the new provisions; particularly those added under Sections 37A and 37B of the Sales Tax Act 1990, pertaining to arrest and detention; be held in abeyance; and, for instructing the FBR to enter meaningful and solution-oriented dialogue with stakeholders and address their concerns,â€ the FPCCI statement read. The statement further said the delegation had presented a comprehensive overview of the challenges faced by the industrial sector â€“ with particular emphasis on the recently enacted expansions of the FBRâ€™s powers. â€œAdditionally, the GHQ will support economic activities in the country through the platform of Special Investment Facilitation Council (SIFC); fostering an environment of collaboration and trust.â€ The business communityâ€™s delegation also called for interest rates to be brought down in line with inflation to stimulate businesses and economic activities. It also highlighted the delay in notification of the Export Facilitation Scheme (EFS) amendments relating to exclusion of cotton and cotton yarn from the scheme; and, imposition of an 18% sales tax on their imports, according to FPCCI statement.

Date: 2025-07-22

Details: Karachi, July 22, 2025 â€“ The Federal Board of Revenue (FBR) has officially launched the income tax return filing portal for Tax Year 2025 â€” but not without complications. According to Ali A. Rahim, President of the Karachi Tax Bar Association (KTBA), taxpayers are encountering a wave of technical issues that are hampering the filing process. Speaking to PkRevenue.com, Rahim revealed that although the FBR initiated the process by issuing draft return forms through SRO 1213(I)/2025 on July 7, the finalized return forms have yet to be officially notified. Despite this, the return filing portal was opened prematurely, leading to confusion and operational difficulties. â€œYes, the return filing portal is now accessible â€” technically â€” but many of our members are struggling with glitches that are making it nearly impossible to fulfill tax obligations effectively,â€ Rahim said. A primary concern raised by the KTBA revolves around login problems with the IRIS system, particularly due to the QR code authentication method introduced by the FBR. While the new security protocol is well-intentioned, Rahim noted that it poses significant hurdles for taxpayers and professionals alike. â€œSending QR codes only to the registered mobile number sounds secure, but itâ€™s proving highly impractical,â€ he explained. The issues include: 1. Overseas taxpayers unable to receive Pakistan-originated SMS. 2. Corporate cases where the registered mobile is with an unavailable director or authorized officer. 3. Authorized representatives, such as e-intermediaries and consultants, unable to access client accounts despite legal authority. To mitigate these challenges, Rahim shared practical solutions already proposed by the KTBA to the FBR: â€¢ Enable e-Intermediary Functionality: Activate and streamline provisions under Section 52A of the Sales Tax Act and relevant income tax rules to grant authorized intermediaries full access to client tax data and filing capabilities. â€¢ Triple-Channel QR Delivery: Allow QR codes to be delivered via SMS, WhatsApp, and email simultaneously to ensure universal access â€” especially for overseas taxpayers. â€¢ Corporate Multi-User Access: Permit multiple compliance officers access to IRIS using unique credentials tied to a businessâ€™s NTN to maintain continuity in compliance. Rahim confirmed that KTBA is compiling a list of persistent errors and will soon send formal recommendations to the FBR for immediate resolution. Until then, taxpayers are advised to proceed cautiously and stay updated through their tax consultants.

Date: 2025-07-22

Details: Islamabad, July 22, 2025 â€“ The Federal Board of Revenue (FBR) has introduced a more stringent procedure for the removal and movement of processed tobacco from Green Leaf Threshing (GLT) units and associated warehouses. The move, aimed at curbing tax evasion and improving traceability, was announced through Federal Excise General Order No. 01 of 2025, issued on July 21, 2025. Under the revised regulations, no processed tobacco will be allowed to leave a GLT unit or a warehouse unless the Federal Excise Duty (FED) has been paid in full and specific compliance conditions have been met. The FBR emphasized that the updated procedure is designed to strengthen oversight of the tobacco supply chain, which remains a high-risk sector for revenue leakage. One of the central requirements is the issuance of an S Track invoice. GLT units must generate this invoice using the FBRâ€™s S Track system, clearly indicating the recipient, quantity, and destination of the processed tobacco. In addition, the FBR has made it mandatory for the Chief Commissioner Inland Revenue (IR) to be notified at least two days prior to the removal, including detailed information such as the GPS location of the warehouse. All removals of processed tobacco must be conducted in the presence of an Officer of Inland Revenue. Furthermore, the goods can only be relocated to a publicly accessible storage facility or directly to a licensed cigarette manufacturing unit, subject to prior written intimation and approval from the Chief Commissioner-IR. Unauthorized movements or relocation without proper documentation will be deemed violations of federal excise rules. For tobacco intended for export in unmanufactured form, the rules outlined in Federal Excise General Order No. 01 of 2024, dated August 28, 2024, will continue to apply. Additionally, both the GLT unit and the warehouse manager must maintain detailed movement records using Annex-I and Annex-II forms as specified in the 2024 Order. These records are essential for cross-verification by Inland Revenue officers, who are granted unrestricted access to any facility used for storing processed tobacco. The FBR reiterated its commitment to implementing strong enforcement mechanisms in the tobacco sector to plug revenue gaps and ensure full regulatory compliance across the industry.

Date: 2025-07-22

Details: If you own a registered vehicle in Pakistan, thereâ€™s an important new legal update you should know aboutâ€”your car or bike can now be treated as a smuggled vehicle even if itâ€™s properly registered with the provincial excise department. Wondering how thatâ€™s possible? The key lies in whether your vehicleâ€™s chassis has been tempered or re-stamped. As of July 1, 2025, a major change has been enforced through the Finance Act, 2025, adding Section 187A to the Customs Act, 1969. This new section makes it very clear: if your vehicle is seized and later found with a tempered, cut-and-weld, or forged chassis number, it will be presumed smuggled by lawâ€”regardless of whether it is officially registered. What Does Section 187A Say? Letâ€™s break it down: If a vehicle is detained or seized and, during forensic examination, its chassis is found to be tempered (including re-stamping, welding, or cutting), the vehicle will be treated as smuggled. That means even your fully registered vehicle can be confiscated if thereâ€™s any tampering. The FBR may even use such smuggled vehicles for operational purposes within 90 days of confiscation. Why You Should Be Concerned Imagine buying a car, completing all the legal registration steps, only to find out later that it had a tempered chassis. That vehicle could be seized without compensation because under the law, it will be assumed to be smuggledâ€”no questions asked. This makes it more important than ever to thoroughly verify the chassis number before purchasing any vehicle, especially second-hand ones. If a chassis number looks suspicious, altered, or recently welded, walk away from the deal. What You Can Do 1. Get a professional forensic inspection done if youâ€™re unsure. 2. Avoid buying vehicles without proper documentation. 3. Cross-check registration records with excise departments. 4. Report any suspected tampering to authorities. In short, even registered vehicles arenâ€™t safe from being labelled as smuggled if the chassis is tempered. So, stay alert, inspect thoroughly, and ensure your vehicle is not just registeredâ€”but also genuinely legal.

Date: 2025-07-22

Details: Karachi, July 22, 2025 â€“ The Federal Board of Revenue (FBR) has shared essential concepts of sales tax laws, especially in light of the latest reforms introduced under the Finance Act, 2025. This initiative aims to help individuals and businesses develop a clearer understanding of their obligations under the law. So, what exactly is sales tax, and how does it work in Pakistan? Letâ€™s break it down: sales tax is a government-imposed levy on the sale, supply, and import of goods in Pakistan. Governed under the Sales Tax Act, 1990, and supported by the Islamabad Capital Territory (Tax on Services) Ordinance, 2001, this tax plays a crucial role in the countryâ€™s revenue system. If youâ€™re a business owner or someone involved in trading, understanding sales tax isnâ€™t just helpfulâ€”itâ€™s essential. Why Understanding Sales Tax Matters The FBR stresses that before registering or filing a sales tax return, one should grasp the basic sales tax framework. Why? Because having this foundational knowledge ensures compliance and avoids costly mistakes. For example, input tax refers to the sales tax you pay when buying taxable goods or services. This includes taxes paid on imported items. On the other hand, output tax is the amount you charge your customers when you sell taxable goods or services. The FBR emphasizes that businesses must calculate the difference between their input and output taxes to determine the final amount payable or refundable. Whatâ€™s Taxable and Whatâ€™s Not? Hereâ€™s the big picture: sales tax applies to most goods in Pakistanâ€”unless specifically exempted under Section 13 and the Sixth Schedule of the Sales Tax Act. Exemptions can also be granted through official notifications known as SROs. Want to know if a product is exempt? Check the Sixth Schedule or consult with a registered tax advisor. Imports are another key area. Nearly all imported goods are subject to sales tax upon entry into Pakistan. Again, exemptions apply only to certain goods as outlined in the law. With these simplified guidelines, the FBR aims to reduce confusion and make sales tax compliance more approachable. Whether youâ€™re just starting a business or already registered, understanding these sales tax principles will make navigating Pakistanâ€™s tax landscape much easier.

Date: 2025-07-21

Details: Karachi, July 21, 2025 â€“ The Federal Board of Revenue (FBR) has penalized three customs officials from the Collectorate of Customs Airports, Karachi, for their role in the incorrect examination, assessment, and clearance of consignments containing â€œNew Samsung Galaxy Tablets A7.â€ The misconduct resulted in a financial loss of Rs. 9.7 million to the national exchequer, which was later recovered through re-assessment. The three officials involvedâ€”Mr. Fazal Karim (Principal Appraiser, BS-17), Syed Hassan Mehdi (Senior Preventive Officer, BS-17), and Mr. Ali Zaman (Inspector, BS-16)â€”were all under suspension when disciplinary proceedings were initiated under the Civil Servants (Efficiency & Discipline) Rules, 2020. The Directorate of Customs initiated the inquiry based on alleged negligence and inefficiency during assessment procedures that allowed the clearance of Samsung tablets at undervalued rates. Each officer was served with a charge sheet on January 6, 2025, followed by a detailed inquiry conducted by Ms. Nausheen Riaz Khan, Secretary (PCS/BS-19), who submitted her report on March 10, 2025. The inquiry concluded that while the charge of corruption was not proven against any of the three customs officials, the allegations of inefficiency and misconduct were substantiated. All officers were found to have demonstrated negligence in their duties, which led to revenue leakage and delayed clearance of goods. The officers were issued show-cause notices and provided the opportunity to defend themselves during personal hearings held on July 10, 2025. They all denied the charges, attributing the misassessment to procedural lapses or reliance on subordinate reports. However, the FBR Member (Administration/HR), acting as the competent authority, reviewed the available records and upheld the findings of the inquiry officer. As a result, all three customs officials were awarded the minor penalty of â€œwithholding of increment for a period of three years without cumulative effectâ€ under Rule 4(2)(b) of the Civil Servants (E&D) Rules, 2020. Additionally, their performance allowances have been suspended for six months, as per FBRâ€™s Performance Allowance Guidelines, 2015. The FBR clarified that each officer has the right to appeal the decision under the Civil Servants (Appeals) Rules, 1977, within 30 days of receiving the official notification. Meanwhile, their suspension period from December 9, 2024, to date will be treated as leave under the Revised Leave Rules, 1980, and they are reinstated into government service. This disciplinary action underscores FBRâ€™s zero-tolerance policy toward inefficiency and its efforts to enhance accountability within customs operations. The move also highlights the growing importance of vigilant oversight over import assessment, particularly in high-value tech items such as Samsung Galaxy Tablets, to prevent revenue losses and uphold integrity in the customs process.

Date: 2025-07-21

Details: Karachi, July 21, 2025 â€“ The Federal Board of Revenue (FBR) has announced revised customs values for imported solar panels, taking into account the sharp decline in global market prices. The fresh valuation has been issued by the Directorate General of Customs Valuation, Karachi â€” a specialized wing of the FBR â€” under Valuation Ruling No. 2012/2025 for the accurate assessment of duties and taxes on solar equipment at the import stage. This latest customs ruling supersedes the earlier Valuation Ruling No. 1894/2024 dated July 4, 2024. It has been issued under Section 25A of the Customs Act, 1969, and shall remain in effect until rescinded or revised. Importers may file revision petitions within 30 days under Section 25D of the Act before the Director General of Customs Valuation. The move follows persistent representations from stakeholders, including the Pakistan Solar Association (PSA), urging a revision of outdated customs values for solar panels, which no longer reflected prevailing international prices. PSAâ€™s representation dated January 21, 2025, initiated an official review process, highlighting issues such as discrepancies between declared transaction values and assessed customs values, causing clearance delays and banking hurdles for importers. A detailed consultation process was undertaken by the directorate. The first stakeholder meeting was held on February 19, 2025, though several key importers were absent due to participation in a global solar exhibition in China. A follow-up session was conducted on July 1, 2025, after a leadership transition at the valuation office. Most participants favored retaining the Tier-based classification while pushing for a downward revision of values, aligning with the international market. Supporting documentationâ€”including commercial invoices, Goods Declarations, and clearance data from the last 90 daysâ€”was submitted to justify the proposed adjustments. Revised Customs Values for Solar Panels (Per Watt): Category Customs Value (USD) Tier I Manufacturers $0.09 Non-Tier I Manufacturers $0.08 Note 1: The Tier I list includes Bloomberg-listed manufacturers such as JA Solar, Canadian Solar, Longi Green, Hanwha Q CELLS, First Solar, among others. Note 2: For manufacturers not listed under Tier I, the $0.08/Watt rate applies. However, importers presenting verifiable documentation proving Tier I status may be assessed under the Tier I rate. Note 3: In cases where invoice values exceed the customs values, the assessment shall be made on the higher value under Section 25(1) of the Customs Act. In instances of air freight imports, the additional cost differential between air and sea freight will be added to the value assessment. This fresh valuation aims to create a fair and transparent import environment for solar panels, promoting cleaner energy technologies while aligning customs practices with international pricing trends. The FBRâ€™s proactive update also demonstrates its commitment to facilitate green energy initiatives without compromising regulatory compliance.

Date: 2025-07-21

Details: Karachi, July 21, 2025 â€“ The Federal Board of Revenue (FBR) has taken a significant step forward in its efforts to combat offshore tax evasion by initiating the development of a sophisticated IT solution aimed at detecting foreign assets held by Pakistani nationals. This digital initiative is intended to leverage the global framework for the automatic exchange of information (AEOI) and enhance the FBRâ€™s monitoring capabilities. To spearhead this effort, the FBR has constituted a specialized business domain team tasked with formulating the Terms of Reference (TORs) for designing and deploying an indigenous IT solution. The system will allow the FBR to effectively analyze, process, and utilize data received through international cooperation on financial transparency. Key members of this domain team include Fida Muhammad, Chief of International Taxes; Mehdi Hassan, Secretary for Automatic Exchange of Information; Akbar Mayo, Revenue Advisor at REMIT (FCDO); and experts from Pakistan Revenue Automation Pvt. Ltd. (PRAL), such as Dr. Fareed Zafar, Azeem Shoukat, and Riaz Alam. The collaboration between FBR and PRAL ensures technical depth and continuity in the project. In addition to in-house expertise, the FBR has engaged global consultancy firm PwC to provide input on best practices, compliance standards, and solution design. The joint effort will deliver a reliable solution tailored to Pakistanâ€™s tax enforcement needs, particularly in identifying undeclared foreign bank accounts, real estate, and other offshore holdings. According to the FBR, the primary objective of this digital solution is to enable real-time data integration, validation, and risk analysis of financial information obtained through bilateral and multilateral exchange agreements. This would significantly enhance the FBRâ€™s ability to trace illicit financial flows and increase tax compliance among high-net-worth individuals. The FBR emphasized that a robust and indigenous IT solution will not only strengthen its institutional framework but also reduce dependency on foreign platforms, improving data security and governance. Once fully developed, the solution is expected to become a cornerstone of Pakistanâ€™s strategy to curb tax evasion and ensure fair taxation. This move reflects the FBRâ€™s long-term commitment to adopting technology-driven solutions that reinforce transparency and fiscal accountability in line with international standards.

Date: 2025-07-20

Details: Islamabad, July 20, 2025 â€“ The Federal Board of Revenue (FBR), the apex tax body of Pakistan, has issued an official notification detailing the revised customs duty structure on the import of electric vehicles (EVs) for the fiscal year 2025â€“26. The move is part of the governmentâ€™s ongoing efforts to promote clean energy transportation and reduce environmental pollution through wider adoption of electric mobility. According to the notification, several categories of electric vehicles have been assigned concessional duty rates to encourage local assembly and manufacturing. The new rates are aligned with Pakistanâ€™s Electric Vehicle Policy 2020 and are being implemented in coordination with the Engineering Development Board (EDB), which will oversee compliance and certification. The FBR has outlined that the import of electric auto rickshaws, classified under PCT code 8703.8030, will be subject to 50% of the prevailing customs tariff. This concession is valid for five years from July 1, 2020, and applies to a maximum of 200 units of the same variant to be locally assembled or manufactured within Pakistan. The EDB will ensure these imports comply with the EV policy and will notify the FBR of any violations to halt further clearances at the reduced rate. Similarly, electric motorcycles (PCT 8711.6040) and 3-wheeler electric loaders (PCT 8711.6060) are covered under the same concessional structure, supporting the expansion of two- and three-wheeler electric mobility in Pakistan. For larger transport segments, electric buses (PCT 8702.4090), electric trucks (PCT 8704.6030), and electric prime movers (PCT 8701.2490) have been assigned a flat customs duty rate of just 1%, with no additional conditions. This generous incentive is aimed at encouraging commercial adoption of clean energy vehicles across public and freight transport sectors. Moreover, electric vehicles (4-wheelers) with a value not exceeding USD 50,000 will be taxed at 25% duty. However, companies assembling or manufacturing the same variant in Pakistan are allowed to import up to 100 CBU (completely built-up) units at just 50% of this rate until June 30, 2026, subject to EDB certification. This updated duty framework reflects Pakistanâ€™s strong policy direction toward fostering an ecosystem that supports local production and long-term investment in electric vehicles.

Date: 2025-07-20

Details: Karachi, July 20, 2025 â€“ The Federal Board of Revenue (FBR) has officially issued the updated customs duty rates applicable on the import of Hybrid Electric Vehicles (HEVs) for the fiscal year 2025â€“26. This move comes under the provisions of the Auto Industry Development and Export Policy (AIDEP) 2021â€“26, which aims to boost local vehicle manufacturing and promote sustainable transport solutions in Pakistan. According to the latest notification issued by the FBR, a concessional customs duty rate of 1% will be applicable on the import of HEV units in Completely Built-Up (CBU) condition. This applies specifically to HEV models falling under Pakistan Customs Tariff (PCT) Codes 8702.2090 and 8702.3090. Similarly, HEV units classified under PCT codes 8704.4100, 8704.4200, 8704.5100, and 8704.5200 will also enjoy the 1% duty concession, as long as they meet the prescribed conditions. The FBR clarified that this reduced duty is only available to manufacturers who are importing the same variant of the HEV for the purpose of local assembly or manufacturing. The eligibility for this concession will be tied to the issuance of a manufacturing certificate and quota determination by the Engineering Development Board (EDB). The FBR emphasized that these incentives are in line with the governmentâ€™s broader vision to promote the domestic auto industry while encouraging environmentally friendly vehicle technology. By facilitating low duty rates on HEV imports, especially for manufacturers preparing to assemble such models locally, the policy aims to reduce dependency on fossil fuels and cut carbon emissions over the long term. Officials from the FBR also reiterated that this policy framework intends to attract global players and local investors to invest in the HEV segment, which is gradually gaining popularity in Pakistan due to its fuel efficiency and lower environmental impact. Industry insiders believe that the continuation of such favorable import terms could accelerate the local production of HEVs, ultimately making eco-friendly vehicles more affordable for Pakistani consumers.

Date: 2025-07-20

Details: Rawalpindi, July 20, 2025 â€“ The Rawalpindi Chamber of Commerce and Industry (RCCI) has strongly criticized the Punjab governmentâ€™s latest fiscal policies, particularly the imposition of a 16% sales tax on commercial property rent and the controversial inclusion of arrest powers for employers not complying with the new minimum wage law. In a detailed statement issued on Sunday, RCCI President Usman Shaukat voiced concern over the adverse effects these new policies will have on businesses operating across Punjab. â€œThe 16% tax on commercial property rent will increase operational costs dramatically for tenants, especially for small and medium retailers who are already under economic pressure,â€ said Shaukat. â€œThis measure will discourage legitimate investment and drive more businesses into the undocumented sector across Punjab.â€ He warned that such a tax move would worsen the ongoing slowdown in the property and retail sectors, both of which are still trying to recover from pandemic-induced setbacks. RCCI believes this added financial burden will dampen investor sentiment and weaken the provinceâ€™s overall business climate. In addition to the property rent tax, RCCI has taken strong exception to a provision in the recently passed Punjab budget that allows for the arrest of business owners who fail to implement the newly enforced minimum wage of Rs. 40,000. Terming it a â€œcoerciveâ€ and â€œanti-businessâ€ step, Shaukat said such powers open the door to possible misuse by enforcement officials, leading to unnecessary harassment of compliant businesses in Punjab. While the RCCI supports fair wage practices, Shaukat emphasized the importance of aligning wage increases with real-time market conditions. â€œWith inflation currently at a historic low of 6%, the jump to a Rs. 40,000 minimum wage without proper consultation is economically questionable,â€ he noted. â€œThere needs to be a balanced, evidence-based, and collaborative approach toward economic policymaking.â€ The RCCI has urged the Punjab government to reconsider both the sales tax on property rent and the arrest provision. It called for immediate and inclusive dialogue with the business community to ensure policies foster economic growth, attract investment, and support employment generation across Punjab.

Date: 2025-07-20

Details: Renowned tax expert Muhammad Zeeshan Merchant, Advocate High Court and former president of Karachi Tax Bar Association (KTBA), demystified the highly talked-about Sections 37A and 37B of the Sales Tax Act, 1990, introduced through the Finance Act, 2025. His clear breakdown of these provisions brought much-needed clarity to the business community, which has been buzzing with concern over potential misuse of powers by tax authorities. âš– Understanding Sales Tax Fraud & Whoâ€™s an Abettor Merchant explained that these sections are aimed at curbing intentional sales tax fraud, not penalizing genuine business errors. Tax fraud includes: â€¢ Faking compliance with Section 73 by routing payments through supplier accounts. â€¢ Suppressing taxable supplies. â€¢ Issuing goods without sales tax invoices. â€¢ Not depositing withheld tax for over 3 months. â€¢ Dealing in confiscable goods (like smuggling or unauthorized sales). â€¢ Making taxable supplies without being sales tax registered. Anyone who intentionally abets these acts, like facilitating fake invoices or maintaining bank accounts under someone elseâ€™s name, is considered an abettor. â€œTax fraud is not a mistake â€” itâ€™s a crime involving deliberate deception, and the consequences are serious,â€ warned Merchant. ðŸ” Section 37A: Inquiry, Investigation & Arrest This section allows tax officers to investigate major sales tax fraud â€” but only with checks and balances in place. How it begins: If credible evidence exists (e.g., fake invoices or refund fraud), an Assistant Commissioner (or higher) may initiate an inquiry after written approval from the Commissioner. Inquiry Phase: â€¢ Summon individuals to record statements. â€¢ Demand financial or transactional records. â€¢ Conclude the inquiry within 6 months. â€¢ Accused must be given a chance to explain before any legal action. Post-Inquiry Action: The officerâ€™s findings go to the Commissioner, who can either: â€¢ Approve further investigation, â€¢ Request additional documents, or â€¢ Close the case if evidence is lacking. ðŸš¨ When Can Arrest Happen? According to Merchant, arrest under sales tax law is an extreme measure, only permitted if: â€¢ Fraud exceeds Rs. 50 million. â€¢ The accused ignores 3 official notices, tries to abscond, or tampers with evidence. â€¢ FBRâ€™s 3-member Committee approves the arrest, or a Special Judge issues a warrant. ðŸ›¡ Section 37B: Legal Protection After Arrest If an arrest is made: â€¢ The accused must be presented before a judge within 24 hours. â€¢ Court decides on bail, judicial remand, or FBR custody (maximum 14 days). â€¢ Investigation continues under judicial supervision. â€¢ Only a Magistrate can record any confessions. ðŸ§¾ Key Takeaways for Merchants & Businesses Concern Protection Under Law Can FBR arrest at will? No, strict legal process applies Is arrest automatic? No, requires approval or court warrant Can bail be granted? Yes, through court as per CrPC Can arrest be avoided? Yes, by responding to notices promptly Is sales tax compliance optional? No, itâ€™s mandatory for all taxable supplies âœ… Merchantâ€™s Final Word: Stay Smart, Stay Compliant Merchant concluded with a simple message: â€œThese sections are about deterrence, not harassment. If youâ€™re compliant, keep records, and respond to notices, you have nothing to fear.â€ Businesses are strongly advised to understand their sales tax obligations, cooperate with authorities, and seek legal advice where needed. With proper documentation and awareness, even the most complex sales tax law can be navigated with confidence.

Date: 2025-07-20

Details: Karachi, July 20, 2025 â€” As the tax season heats up, the Federal Board of Revenue (FBR) is sounding the alarm for taxpayers to file their income tax returns responsibly â€” and only through legally authorized professionals. This important advisory comes amid rising reports of personal data theft and tax fraud linked to unauthorized tax filers active across social media and other platforms. The FBR emphasized that every taxpayer â€” whether an individual or a corporate entity â€” must ensure secure filing by either doing it themselves or consulting an officially authorized e-intermediary. The warning stems from recent incidents where taxpayers found their confidential details, such as CNIC numbers, bank accounts, and income sources, misused by self-proclaimed tax advisors. These fraudulent filings have landed several unsuspecting citizens in legal trouble with the tax department. Letâ€™s make this personal: If you are planning to file your return this season, ask yourself â€” whoâ€™s handling your data? If itâ€™s a random social media â€œtax experts,â€ think again. The FBR clarifies that filing your taxes through unauthorized agents can put you at serious financial and legal risk. According to the Income Tax Rules, 2002, only the following professionals qualify as authorized e-intermediaries for tax filing: â€¢ Chartered Accountants registered with the Institute of Chartered Accountants of Pakistan (ICAP), â€¢ Cost and Management Accountants from the Institute of Cost and Management Accountants of Pakistan (ICMAP), â€¢ Licensed legal practitioners allowed to practice in Pakistani courts, â€¢ Members of the Association of Chartered Certified Accountants (ACCA), UK, â€¢ And Income Tax Practitioners registered with a Tax Bar affiliated with the All Pakistan Tax Bar Association. The FBR is actively encouraging the public to verify credentials before hiring anyone for tax filing. â€œItâ€™s your money, your identity, and your responsibility,â€ a senior FBR official remarked. â€œDonâ€™t let convenience cost you your peace of mind.â€ As the deadline for tax return filing draws closer, the FBR plans to intensify awareness campaigns urging citizens to avoid shortcuts and stay safe by using credible professionals.

Date: 2025-07-18

Details: Islamabad, July 18, 2025 â€“ Rashid Mehmood Langrial, Chairman of the Federal Board of Revenue (FBR), has issued a strong warning that the repeated release of tax fraudsters poses a serious threat to the credibility and effectiveness of Pakistanâ€™s tax enforcement regime. While addressing a session of the sub-committee of the National Assemblyâ€™s Public Accounts Committee (PAC), the FBR chairman expressed grave concerns that letting tax evaders off the hook not only weakens institutional authority but also severely undermines future deterrence efforts. He emphasized that FBR has been legally empowered to identify, investigate, and recover revenue lost due to tax fraud. However, recurring judicial leniency toward offenders dilutes the impact of these enforcement powers. Langrial revealed that Pakistan is grappling with tax fraud of alarming proportions, with the total volume now exceeding Rs700 billion. He highlighted that sales tax fraud remains a major area of concern, noting that Pakistanâ€™s rate of fraud in this area is significantly higher compared to international benchmarks. Despite recent improvements in monitoring systems, the FBR chief admitted that the complete eradication of sales tax fraud remains a distant goal. He pointed out that while some progress has been made in reducing the scale of fraudulent activity, widespread tax evasion persists across sectors. The FBR chairman urged that Pakistan must strengthen its post-audit processes and implement stricter enforcement mechanisms. He particularly called for tougher penalties against those involved in issuing fake invoices, which continue to be a major method used in committing sales tax fraud. Langrial also informed the committee that the FBR managed to recover Rs200 billion in the last fiscal year, following the resolution of several pending tax litigation cases in various courts. He described this as a significant achievement but reiterated that a consistent and firm approach is essential to sustain progress. The FBR has consistently maintained that strong deterrence is key to curbing tax fraud. The unchecked release of habitual offenders not only discourages honest taxpayers but also signals weakness in the tax administration system. The chairman reaffirmed the FBRâ€™s commitment to pursuing fraud cases aggressively and called for institutional support to ensure the accountability of tax defaulters.

Date: 2025-07-18

Details: Islamabad, July 18, 2025 â€“ The Federal Board of Revenue (FBR) has formally notified the promotion of several senior officers from Grade BS-21 to the apex civil service rank of BS-22. The highly anticipated promotion list was issued on Friday following the final approval by Prime Minister Muhammad Shehbaz Sharif. According to the official notification issued by the FBR, a total of seven top-tier officers from Inland Revenue and Customs have been elevated to BS-22 in recognition of their exceptional service and professional performance. These promotions reflect the governmentâ€™s commitment to strengthening institutional leadership within the countryâ€™s top revenue-collection body. The officers who have been granted promotion to BS-22 are: â€¢ Dr. Hamid Ateeq Sarwar, currently serving as Member Inland Revenue â€“ Operations, known for his strategic policy leadership in revenue collection and enforcement. â€¢ Wajid Ali, posted as Member (Customs Policy), whose elevation recognizes his contributions to customs modernization and compliance frameworks. â€¢ Ms. Saadia Sadaf Gilani, Chief Commissioner Inland Revenue at the Corporate Tax Office in Lahore, praised for her effective implementation of corporate tax reforms. â€¢ Ms. Rabab Sikandar, Chief Collector of Customs Appraisement (Punjab), based in Lahore, with a distinguished record in trade facilitation and anti-smuggling operations. â€¢ Muhammad Iqbal, serving as Member (Admin/HR), FBR Headquarters, Islamabad, recognized for his work in organizational reforms and human resource development. â€¢ Ms. Tehmina Aamir, Chief Commissioner IR at the Regional Tax Office, Rawalpindi, known for her administrative acumen and tax outreach initiatives. â€¢ Shahid Iqbal Baloch, who will actualize his promotion upon return from deputation in accordance with FBR service rules. The FBR has extended congratulations to the promoted officers, highlighting that such promotions are based on merit, performance, and service to the nation. The board also expressed confidence that these officers will further contribute to institutional efficiency, improved tax compliance, and better service delivery. This round of promotion reflects the ongoing transformation within the FBR, aimed at building a capable and professional leadership structure to meet Pakistanâ€™s evolving fiscal challenges.

Date: 2025-07-18

Details: Islamabad, July 18, 2025 â€“ Rashid Mehmood Langrial, Chairman of the Federal Board of Revenue (FBR), has issued a strong warning that the repeated release of tax fraudsters poses a serious threat to the credibility and effectiveness of Pakistanâ€™s tax enforcement regime. While addressing a session of the sub-committee of the National Assemblyâ€™s Public Accounts Committee (PAC), the FBR chairman expressed grave concerns that letting tax evaders off the hook not only weakens institutional authority but also severely undermines future deterrence efforts. He emphasized that FBR has been legally empowered to identify, investigate, and recover revenue lost due to tax fraud. However, recurring judicial leniency toward offenders dilutes the impact of these enforcement powers. Langrial revealed that Pakistan is grappling with tax fraud of alarming proportions, with the total volume now exceeding Rs700 billion. He highlighted that sales tax fraud remains a major area of concern, noting that Pakistanâ€™s rate of fraud in this area is significantly higher compared to international benchmarks. Despite recent improvements in monitoring systems, the FBR chief admitted that the complete eradication of sales tax fraud remains a distant goal. He pointed out that while some progress has been made in reducing the scale of fraudulent activity, widespread tax evasion persists across sectors. The FBR chairman urged that Pakistan must strengthen its post-audit processes and implement stricter enforcement mechanisms. He particularly called for tougher penalties against those involved in issuing fake invoices, which continue to be a major method used in committing sales tax fraud. Langrial also informed the committee that the FBR managed to recover Rs200 billion in the last fiscal year, following the resolution of several pending tax litigation cases in various courts. He described this as a significant achievement but reiterated that a consistent and firm approach is essential to sustain progress. The FBR has consistently maintained that strong deterrence is key to curbing tax fraud. The unchecked release of habitual offenders not only discourages honest taxpayers but also signals weakness in the tax administration system. The chairman reaffirmed the FBRâ€™s commitment to pursuing fraud cases aggressively and called for institutional support to ensure the accountability of tax defaulters.

Date: 2025-07-18

Details: Karachi, July 18, 2025 â€“ In a massive breakthrough for Pakistanâ€™s tax enforcement regime, the Federal Board of Revenue (FBR) has set an unprecedented record: the Active Taxpayers List (ATL) has skyrocketed to an astonishing 7.40 million by July 17, 2025. This dramatic rise is more than just a number â€” itâ€™s a thunderous statement from the FBR that Pakistanâ€™s era of tax evasion is coming to an end. Over the past two weeks alone, nearly 100,000 new taxpayers have been added to the ATL, reflecting a wave of urgency among citizens to comply or face the consequences. According to data officially provided to PkRevenue, this updated ATL reflects income tax returns filed for Tax Year 2024, with all updates processed up to July 17, 2025. The surge is being celebrated as a historic shift in the nationâ€™s financial culture, as more taxpayers embrace documentation and accountability. Whatâ€™s driving this sensational growth? The answer lies in bold legislative reforms introduced under Budget 2025â€“26, particularly the game-changing insertion of Section 114C into the Income Tax Ordinance, 2001. This powerful provision has armed the FBR with unprecedented authority to target non-filers â€” and the pressure is working. Under Section 114C, individuals not on the ATL now face a financial lockdown. Non-compliant taxpayers are barred from: â€¢ ðŸš« Booking or registering luxury vehicles â€¢ ðŸ Purchasing or registering properties â€¢ ðŸ“ˆ Investing in mutual funds, stocks, and securities â€¢ ðŸ’³ Withdrawing large sums from bank accounts The FBR has drawn a clear line in the sand: comply or be cut off. These sweeping restrictions are turning the heat up on chronic non-filers, forcing them to either pay up or get locked out of Pakistanâ€™s economic mainstream. For compliant taxpayers, the ATL is now more than a registry â€” itâ€™s a VIP pass to smoother transactions and reduced withholding taxes. For those who remain outside the net, however, the cost of staying invisible is rising steeply. With the FBR tightening its grip and millions of taxpayers rushing to get on board, one thing is certain â€” Pakistanâ€™s tax net is expanding with unstoppable force. Non-filers, beware: your time is running out.

Date: 2025-07-17

Details: Karachi, July 17, 2025 â€“ The Sindh government has made it mandatory for individuals and entities providing or rendering renting of immovable property services to issue tax invoices. This new requirement was formalized through Notification No. 3-4/41/2025 issued by the Sindh Revenue Board (SRB) on July 16, 2025. According to the notification, all providers of property rental services in Sindh must now issue tax invoices in accordance with sub-rule (1) of Rule 29 of the Sindh Sales Tax on Services Rules, 2011. These service providers are obligated to charge and collect sales tax at the fixed rate of 3%. This move is part of the provincial governmentâ€™s ongoing effort to enhance transparency, promote tax compliance, and bring unregulated services under the formal tax net. In addition to rental services, the Sindh government has also implemented critical changes to taxation in the construction sector. The standard tax rate for construction services remains 15%. However, service providers now have the option to pay a reduced rate of 8%, provided they declare their election electronically via Form â€œCâ€ on the SRB web portal within 21 days from the beginning of the financial year. New entrants to the construction services business in Sindh must exercise this option at least 14 days before starting their economic activities. Once selected, the chosen rate will remain valid for the current financial year and subsequent years unless revoked electronically through proper procedure. A similar provision has been introduced for ready-mix concrete services, which are now also taxed at the standard rate of 15%. However, businesses involved in ready-mix concrete supply may choose a reduced rate of 8% by submitting Form â€œRâ€ on the SRB portal within 21 days of the new financial year or 14 days prior to launching new operations. These reforms reflect the Sindh governmentâ€™s broader policy of enhancing fiscal administration while allowing flexibility to service providers through optional lower tax regimes. The SRB stated that these measures aim to bring consistency and clarity in tax obligations for vital sectors across Sindh, especially those previously operating under varying interpretations of the tax laws.

Date: 2025-07-17

Details: Karachi, July 16, 2025 â€“ The Sindh Revenue Board (SRB) has announced an expansion in the scope of services subject to quarterly return filing under the Sindh Sales Tax regime. The SRB issued Notification No. 3-4/40/2025 on Wednesday, amending the earlier Notification No. 3-4/10/2011 dated October 18, 2011. According to the latest amendment, the SRB has mandated that certain persons or classes of persons rendering specified services must file their sales tax returns on a quarterly basis. These quarterly returns are to be submitted by the 15th day of August, November, February, and May, for the quarters ending June, September, December, and March respectively. The expanded scope now includes four new categories of services: 1. Taxable services that are wholly exempt under Section 10 of the Sindh Sales Tax on Services Act, 2011. Even though these services are exempt, SRB requires filing for documentation and monitoring purposes. 2. Franchise services, categorized under CPC Codes 73340 and 83960, in cases where the respective agreements do not specify a due date for payment. These include instances where ambiguity over payment timing exists, necessitating clearer tax return timelines. 3. Individuals engaged in renting of immovable property services (CPC Code 7211), who may also offer exempt services. These individuals, as defined under sub-clause (a) of clause (63) of section 2 of the Act, must pay the tax due by the 15th day of the month following the relevant month. 4. Providers of cosmetic dental services, listed under CPC Code 93123, including those who might also be engaged in other exempt services. These specialized services are now subject to regular reporting and tax payment structures. The SRB emphasized that this step will bring greater transparency and regularity to services that were either inconsistently filed or ambiguously classified. By extending quarterly filing to a broader range of services, the SRB aims to streamline compliance, enhance revenue tracking, and reinforce the provinceâ€™s commitment to tax regulation and governance.

Date: 2025-07-17

Details: Islamabad, July 17, 2025 â€“ Prime Minister Muhammad Shehbaz Sharif has constituted a high-powered committee to resolve concerns related to the Finance Act, 2025 ahead of scheduled strike on July 19, 2025. The committee has been formed in response to a nationwide shutter-down strike announced for July 19, 2025, spearheaded by the Karachi Chamber of Commerce and Industry (KCCI). The Ministry of Finance officially notified the formation of the committee on the instructions of the Prime Minister. The initiative is aimed at engaging with stakeholders and finding workable solutions to the controversial tax measures that have triggered widespread calls for protest. The business community has been voicing serious objections to the recent tax reforms, prompting the KCCI and allied trade bodies to call for a countrywide strike. The committee has been tasked with examining and proposing remedial measures to address grievances stemming from the Finance Act, 2025. It is comprised of key government officials and prominent representatives of the business sector: 1. Mr. Haroon Akhtar Khan, Special Assistant to the PM on Industry and Production â€“ Chairperson 2. Mr. Bilal Azhar Kayani, Minister of State for Finance and Revenue â€“ Secretary 3. Mr. Rana Ahssan Afzal, Coordinator to the PM on Trade â€“ Member 4. Mr. Rashid Mahmood Langrial, Chairman, Federal Board of Revenue â€“ Member 5. Mr. Atif Ikram, President, FPCCI â€“ Member 6. Mr. Jawaid Bilwani, President, KCCI â€“ Member 7. Mr. Ikram-ul-Haq, Representative, Sialkot Chamber â€“ Member 8. Mr. Muhammad Ayub Mariani, President, Quetta Chamber â€“ Member 9. Mr. Fazal Muqeem, President, Sarhad Chamber â€“ Member 10. Mr. Abuzar Shad, President, Lahore Chamber â€“ Member 11. Mr. Khawaja Shahzeb Akram, Former SVP, FPCCI â€“ Member 12. Mr. Rehan Naseem, President, Faisalabad Chamber â€“ Member The committee has been directed to hold its first meeting on Friday, July 18, 2025, and submit recommendations within 30 days. It is also empowered to co-opt additional members if necessary for effective decision-making. The finance division emphasized that the committeeâ€™s mandate is to build consensus and create space for negotiation, with the aim of avoiding the looming strike. The first meeting is expected to focus on core concerns, including the applicability of new tax provisions on small and medium enterprises. Despite the governmentâ€™s outreach, KCCI has reaffirmed its intention to go ahead with the strike on July 19, citing a lack of prior consultation over the legislation. Business leaders say that unless practical relief is announced, the strike will proceed as scheduled. The formation of this high-level committee reflects the governmentâ€™s urgency in addressing economic disruption, restoring investor confidence, and ensuring stability through dialogue instead of confrontation.

Date: 2025-07-17

Details: Islamabad, July 17, 2025 â€“ The Federal Board of Revenue (FBR) has officially notified the rates for the newly introduced New Energy Vehicles Adoption Levy, enacted under the New Energy Vehicles Adoption Levy Act, 2025. The levy has been introduced as part of the broader fiscal reforms under the Finance Act, 2025, aimed at encouraging the shift towards environmentally friendly transportation technologies while disincentivizing reliance on traditional internal combustion engine (ICE) vehicles. The FBR has imposed the levy under Section 3 of the Act, which mandates that a specific levy be collected from either manufacturers or importers of internal combustion engine vehicles, depending on engine size and origin (local or imported). The collected levy will be deposited into the Federal Consolidated Fund. According to the FBR, the rates are structured on an ad valorem basis â€” calculated as a percentage of the vehicleâ€™s invoice or assessed value (inclusive of duties and taxes). The levy does not apply to new energy vehicles, export-bound ICE vehicles, or vehicles owned by diplomatic missions or exempted under official government notifications. The following are the notified rates of the levy: S. No. Motor Vehicle Category Levy to be Paid By Rate of Levy 1 ICE motor vehicles (assembled/manufactured in Pakistan) with engine <1300cc Manufacturer 1% ad valorem of invoice price 2 ICE motor vehicles (imported) with engine <1300cc Importer 1% ad valorem of assessed value 3 ICE motor vehicles (assembled/manufactured in Pakistan) with engine 1300â€“1800cc Manufacturer 2% ad valorem of invoice price 4 ICE motor vehicles (imported) with engine 1300â€“1800cc Importer 2% ad valorem of assessed value 5 ICE motor vehicles (assembled/manufactured in Pakistan) with engine >1800cc Manufacturer 3% ad valorem of invoice price 6 ICE motor vehicles (imported) with engine >1800cc Importer 3% ad valorem of assessed value 7 Buses and trucks (assembled/manufactured in Pakistan) Manufacturer 1% ad valorem of invoice price 8 Buses and trucks (imported) Importer 1% ad valorem of assessed value Legal Framework Under Section 3 Section 3 of the Act outlines the legal basis for the levy, making it mandatory for: Manufacturers of ICE vehicles to pay the levy upon production or assembly. Importers of ICE vehicles to pay the levy upon clearance into Pakistan. Sub-section (2) clarifies that the rates shall be in accordance with the First Schedule, while sub-section (3) gives the Federal Government the authority to revise rates, add new categories, or remove existing ones through official notification. Sub-section (4) exempts new energy vehicles and certain categories of ICE vehicles from this levy to promote clean mobility and maintain diplomatic protocols. This new taxation measure by the FBR serves as a policy signal aimed at nudging manufacturers and consumers toward adopting energy-efficient vehicles. The introduction of the levy and differential rates based on engine size reflects a graduated approach to shifting away from fossil fuel-reliant transport, in line with Pakistanâ€™s broader environmental and economic sustainability goals.

Date: 2025-07-16

Details: Lahore, July 16, 2025 â€” The Lahore Tax Bar Association (LTBA) has officially called upon the Federal Board of Revenue (FBR) to extend the filing deadline for monthly sales tax returns, citing widespread login and technical disruptions on the IRIS portal. In a strongly worded letter addressed to the FBR chairman, the LTBA has requested that the filing deadline for sales tax returns for the tax periods of April, May, and June 2025 be extended until July 31, 2025. The association highlighted that ongoing technical failures in the IRIS system have severely hampered taxpayersâ€™ ability to comply with their statutory filing obligations. LTBA President Muhammad Asif Rana emphasized that despite taxpayersâ€™ repeated attempts to fulfill their legal duty, persistent system failures â€” including delays in One-Time Password (OTP) delivery, malfunctioning QR code scanners, and chronic errors in Annexure H1 â€” have obstructed smooth return filing. â€œThe challenges taxpayers are facing are not isolated; they are being reported from across the country,â€ Rana said. â€œThe repeated failures of IRIS during critical filing days not only frustrate users but also jeopardize timely compliance with tax laws.â€ According to the LTBA, the most pressing issues include: â€¢ Delayed or Missing OTPs: Users frequently do not receive the mandatory OTPs needed for login, stalling the entire filing process. â€¢ QR Code Authentication Failures: Malfunctions in the QR scanner used for two-factor authentication, especially during peak hours, have been widespread. â€¢ Annexure H1 Malfunctions: Users report consistent problems including stock duplication, data non-uploading, and system crashes. â€¢ IRIS Downtime and Session Expiry: The system often slows down or crashes entirely near deadlines, with users being logged out mid-process and losing critical filing data. Due to these system flaws, the LTBA argued that thousands of taxpayers and consultants have been unable to complete their filing procedures. â€œImposing penalties under these circumstances would be unfair and would damage public trust in FBRâ€™s digital systems,â€ said the LTBA president. The LTBA reaffirmed its stance that an extension is vital not only for facilitating smooth filing but also for restoring taxpayer confidence. It urged the FBR to prioritize the resolution of system issues before expecting full compliance. By extending the filing deadline, the FBR can help ensure that sales tax return filing is based on fairness and technical feasibility, LTBA concluded.

Date: 2025-07-16

Details: Karachi, July 16, 2025 â€“ The Karachi Tax Bar Association (KTBA) has drawn urgent attention to persistent operational difficulties being faced by taxpayers and consultants in accessing the Federal Board of Revenueâ€™s (FBR) IRIS portal, particularly related to login authentication. In a formal letter addressed to FBR Chairman Rashid Mahmood Langrial, the KTBA outlined several technical and procedural challenges that are obstructing timely compliance, especially for filing the June 2025 sales tax return. KTBA President Ali A. Rahim emphasized that while the association supports FBRâ€™s commitment to enhanced security through QR code-based login mechanisms, the current implementation of the IRIS authentication protocol has proven impractical in many real-world scenarios. The biggest hurdle, the letter notes, is the exclusive delivery of QR codes to the registered mobile number of the taxpayer â€” a process that restricts access in cases such as: 1. Overseas taxpayers unable to receive SMS from Pakistan-based servers. 2. Corporate taxpayers where the registered number belongs to a director or employee unavailable at the time of filing. 3. Authorized representatives (e.g., tax consultants or e-intermediaries) who cannot access IRIS despite holding legal authorization to act on a clientâ€™s behalf. To resolve these issues, KTBA has proposed a series of practical solutions aimed at improving functionality without compromising security: Proposed Solutions 1. Activate E-Intermediary Functionality: Fully operationalize Section 52A of the Sales Tax Act, 1990 and Rule 2(10)(ac) of the Income Tax Rules, 2002 to allow authorized intermediaries access to client data and enable return filing, appeals, and other submissions via the IRIS portal. 2. Triple-Channel QR Code Delivery: Simultaneously send QR codes via SMS, WhatsApp, and email, enabling flexibility in login authentication for both local and overseas taxpayers. 3. Multiple Access for Corporate Users: Permit multiple compliance officers to access a companyâ€™s IRIS account using credentials tied to the businessâ€™s NTN to ensure continuity in case of personnel unavailability. 4. Grace Period for Profile Updates: Provide a 60-day grace period for updating registered mobile numbers and emails within IRIS, after which changes would be permitted only via QR verification to ensure security. The KTBA also urged the FBR to extend the deadline for the June 2025 sales tax return filing to July 30, 2025, to prevent penalties caused solely by system-induced delays. The association reiterated that these recommendations align with FBRâ€™s digitalization strategy while preserving taxpayer rights under Pakistani law. Without immediate action, IRIS system flaws could unfairly penalize compliant taxpayers facing unavoidable technical constraints, the KTBA warned.

Date: 2025-07-16

Details: Section 37A of the Sales Tax Act, 1990 introduces robust mechanisms to tackle tax fraud through structured inquiries, investigations, andâ€”when warrantedâ€”arrests. While some critics have expressed concern over the powers granted under this provision, a deeper analysis reveals that Section 37A is designed to act as a powerful deterrent against tax fraud rather than a tool to harass honest taxpayers. The Section 37A inserted to the Sales Tax Act, 1990 through Finance Act, 2025. Objective: Curb Tax Fraud, Not Target Law-Abiding Citizens The foremost aim of Section 37A is clearly stated in subsection (15): the provision is intended to â€œcreate sufficient deterrence against tax fraudâ€ and â€œprovide for retribution for commission of tax fraud.â€ This aligns with international best practices in tax enforcement, where effective deterrence requires clear consequences for deliberate evasion. The section does not cast a wide net over all taxpayers; instead, it specifically targets those for whom there is material evidence suggesting willful fraud or criminal conduct. Safeguards Against Misuse of Power Critics often fear misuse of arrest powers by tax authorities. However, Section 37A incorporates multiple layers of procedural safeguards to prevent abuse: 1. Prior Approval Required: No inquiry can commence without written approval from the Commissioner, ensuring that arbitrary action is checked from the outset. 2. Evidence-Based Action: An inquiry can only be initiated if there is material evidence of tax fraud or an offence that warrants prosecution. 3. Right to be Heard: The accused must be given a fair chance to respond and present their case before any recommendation for further investigation is made. 4. Independent Committee Review: Arrests during investigation require approval from a three-member committee, ensuring objectivity and institutional oversight. 5. Judicial Authorization: In certain cases, an arrest warrant must be obtained from a Special Judge, maintaining judicial checks on executive action. 6. Written Grounds of Arrest: Any person arrested must be informed in writing of the specific grounds of arrest, which enhances transparency and legal compliance. 7. Right to Bail: The provision explicitly allows the accused to approach courts for bail, preserving fundamental rights and access to due process. Protecting the Integrity of the Tax System Section 37A plays a critical role in upholding the integrity of Pakistanâ€™s tax system. Tax fraud not only deprives the national exchequer of billions in revenue but also creates an uneven playing field for honest businesses. When fraudsters operate with impunity, compliant taxpayers are unfairly burdened and disincentivized. Through this provision corporate entities are reminded of their responsibilities, and individuals engaging in systematic fraud face appropriate consequences. Not Applicable to Routine Discrepancies Section 37A is not intended for routine audit discrepancies, unintentional errors, or procedural lapses. It specifically targets offenses falling under clause (37) of section 2, such as deliberate underreporting, fictitious invoices, and fake registrationsâ€”all of which require criminal intent. Therefore, honest taxpayers who engage transparently with the tax authorities have nothing to fear under this provision. Voluntary Compliance and Compounding Provision Further demonstrating its balanced nature, Section 37A(11) allows for the compounding of offences if the taxpayer voluntarily pays the evaded amount, including penalties and surcharges. This approach favors revenue recovery over punitive action and encourages voluntary compliance, even after fraud has been identified. Conclusion Section 37A is a thoughtfully constructed legal tool aimed at ensuring accountability and deterring tax fraud. With its emphasis on due process, evidence-based actions, and procedural fairness, it empowers the tax authorities to act against habitual offenders while safeguarding honest taxpayers. Far from being an instrument of harassment, it is an essential mechanism to restore public trust in the tax system and enhance national revenue collection.

Date: 2025-07-15

Details: Islamabad, July 15, 2025 â€“ The Supreme Court of Pakistan ruled that notices issued under Section 140 of the Income Tax Ordinance, 2001 cannot demand immediate tax recovery on the same day of issuance. Instead, such notices must specify a future date for compliance, ensuring due process and legal protection. The Supreme Courtâ€™s decision came through a detailed nine-page judgment authored by Justice Ayesha Malik, dismissing the Federal Board of Revenueâ€™s (FBR) appeal against a previous high court ruling. The Court emphasized that requiring tax recovery on the same day a notice is issued nullifies the purpose of setting a deadline and renders statutory safeguards meaningless. â€œYet another aspect of significance is the constitutional underpinning of Section 140,â€ the judgment observed, noting that this provision reflects not just statutory intent but also the broader constitutional guarantees enshrined in Article 10A (fair trial) and Article 14 (dignity of man). The Supreme Court bench, led by Justice Munib Akhtar and comprising Justices Ayesha Malik and Shahid Waheed, examined whether a tax commissioner under FBR is authorized to demand immediate payment without giving the taxpayer any reasonable opportunity or date for compliance. The Court concluded that such coercive recovery tactics violate both the spirit and letter of the law. The bench held that any notice issued under Section 140 must clearly mention a future date, allowing the taxpayer or any third party holding funds on their behalf to respond accordingly. Without such a date, the Supreme Court ruled, any recovery action becomes arbitrary and unjust. Justice Shahid Waheed, in his concurring note, raised critical concerns about the intersection of tax collection and fundamental rights. â€œDoes an efficient tax system justify overriding constitutional protections?â€ he asked, arguing that tax enforcement should not become a tool of authoritarian overreach. In a powerful analogy, Justice Waheed compared ideal tax recovery to the work of a honeybee: efficient yet gentle. He stressed that recovery should follow three clearly defined stagesâ€”declaration of liability, assessment, and only then, lawful recoveryâ€”executed with full respect for the taxpayerâ€™s dignity. This ruling sets a strong precedent, reaffirming the Supreme Courtâ€™s commitment to upholding constitutional rights even in fiscal matters, and sends a message to tax authorities to adhere strictly to legal protocols.

Date: 2025-07-15

Details: Karachi, July 15, 2025 â€“ In a critical move to address mounting tensions over the Federal Board of Revenueâ€™s (FBR) newly introduced tax regulations, Federal Finance Minister Muhammad Aurangzeb has stepped forward to initiate dialogue with the countryâ€™s business leadership. With a nationwide shutter-down strike planned by traders for July 19, Aurangzeb has invited representatives from all major chambers of commerce and trade associations to a crucial meeting today (Tuesday) in Islamabad. Aurangzeb, while addressing media representatives after his meeting with the Overseas Investors Chamber of Commerce and Industry (OICCI) in Karachi, expressed the governmentâ€™s willingness to engage in constructive discussions. â€œWe are here to listen. Tomorrowâ€™s meeting is an opportunity to resolve issues through dialogue,â€ Aurangzeb stated, emphasizing the importance of direct communication between the government and the business sector. He urged chambers and trade bodies to thoroughly review the newly implemented tax provisions ahead of the meeting. Clarifying the FBRâ€™s amended powers, Aurangzeb explained that any arrest related to discrepancies exceeding Rs 50 million would now require clearance either from a tax commissioner or a specially constituted three-member FBR board. â€œThis ensures a system of checks and balances in the enforcement process,â€ he noted, adding that the primary aim of the ordinance is to curb sales tax fraud without disrupting honest businesses. On the rising sugar prices, Aurangzeb responded to repeated media queries by highlighting that price regulation falls within the purview of the Economic Coordination Committee (ECC). â€œThe government continues to monitor essential commodity prices on a monthly basis. Fluctuations are not unusual,â€ he remarked. Speaking further on the matter, Aurangzeb clarified that the recent decision to import sugar was taken by the federal cabinet and that the Ministry of National Food Security has already addressed the issue publicly. He suggested that deregulation, as seen with rice and maize, might also help stabilize the sugar market. Concluding his remarks, Aurangzeb reaffirmed the governmentâ€™s efforts to extend relief to the salaried class under the current fiscal constraints. He stressed the need for unity and dialogue to overcome economic challenges, especially in the lead-up to the planned July 19 strike.

Date: 2025-07-15

Details: Islamabad, July 15, 2025 â€“ The Federal Board of Revenue (FBR) has granted new powers to provincial authorities to help stop the illegal trade of cigarettes across Pakistan. In a move to strengthen enforcement, the FBR issued SRO 1279(I)/2025 on July 15, allowing designated officers from provincial departments to act on behalf of Inland Revenue (IR) officers in seizing illicit cigarettes from retail shops, warehouses, and vehicles. According to the FBR, this decision is made under the Federal Excise Act, 2005, and aims to support the crackdown against untaxed and fake cigarettes being sold in the market. Under the new powers: â€¢ Deputy Commissioners, Assistant Commissioners, and equivalent officials from provincial revenue departments can now inspect cigarettes stored in warehouses. â€¢ Excise and Taxation Officers (not below BS-16) can act against cigarettes being sold in retail outlets or transported in vehicles on roads. These officers are allowed to seize cigarettes and the transport vehicles if: 1. The cigarettes do not have valid tax stamps issued by the FBR. 2. The tax stamps are found to be fake. After seizure, the officers must hand over the confiscated cigarettes to the Additional Commissioner (HQ) at the nearest Regional Tax Office (RTO) for further action. To ensure transparency and coordination, they are required to report the seizure within 48 hours using a dedicated application developed by the FBR. Furthermore, provincial Secretaries or nominated officers will review the seizure reports and forward them to the Director General, Intelligence and Investigation, FBR. This delegation of powers is expected to increase enforcement capacity across the country, especially in areas where federal officers may have limited access or presence. The FBR stated that involving provincial authorities in this process will strengthen the national effort to reduce tax evasion in the tobacco sector. With this move, the FBR is reaffirming its commitment to curbing the illegal sale of cigarettes and protecting legitimate tax revenue. The illegal cigarette trade causes billions in annual revenue losses, and the FBR hopes this partnership with provincial governments will make enforcement more effective and widespread.

Date: 2025-07-15

Details: Karachi, July 15, 2025 â€“ Pakistan Customs has officially notified the export values for mangoes for the current season, setting a fresh benchmark for exporters and international buyers as the countryâ€™s premium fruit continues to gain popularity across global markets. In a notification issued Tuesday, the Directorate of Valuation, Pakistan Customs, released Valuation Ruling No. 2/2025 specifically for determining the customs export value of mangoesâ€”including fresh mangoes, mango pulp, and dry mangoes. According to the ruling: â€¢ Fresh mangoes (all varieties) are valued at $800 per metric ton â€¢ Mango pulp is set at $1000 per metric ton â€¢ Dry mangoes (all types) are priced at $1500 per metric ton The Directorate issued this valuation following detailed consultations and directives from the Federal Board of Revenue (FBR) and the Ministry of Commerce. The aim is to streamline valuation mechanisms and ensure accurate, transparent assessments of mangoes being exported from Pakistan. To ensure fairness and industry consensus, a stakeholder meeting was held on June 30, 2025. Participants included representatives from the All Pakistan Fruit and Vegetable Exporters, Importers and Merchants Association, as well as top mango exporters from across the country. During the meeting, participants discussed current market trends, international demand, and pricing structures. The directorate reviewed proposals, analyzed documentary evidence, and studied export data from PRAL to arrive at a standardized valuation for customs purposes. â€œThis valuation ruling will now serve as the baseline customs value for all mango exports, unless revised or rescinded by a competent authority under Section 25A(4) of the Customs Act, 1969,â€ the Directorate stated. The export of mangoes remains one of Pakistanâ€™s most lucrative seasonal trades, with countries in the Middle East, Europe, and the Far East showing robust demand for premium Pakistani varieties such as Sindhri, Chaunsa, and Langra. By setting clear and competitive export values, authorities aim to encourage stable trade, prevent under-invoicing, and ensure that Pakistan earns fair foreign exchange from its globally loved mangoes.

Date: 2025-07-15

Details: Karachi, July 15, 2025 â€“ The Federal Board of Revenue (FBR) has been armed with unprecedented powers under the newly amended Section 11E of the Sales Tax Act, 1990 â€” a legislative shift that is set to dramatically reshape the landscape of tax enforcement in Pakistan. The powerful new Section 11E, enforced from July 1, 2025, via the Finance Act, 2025, grants Inland Revenue officers sweeping authority to claw back unlawful refunds, inadmissible input tax, and underpaid sales tax. This transformation is more than just procedural â€” itâ€™s a game-changer in how tax evasion is confronted in the country. As per the revised Section 11E, any officer of Inland Revenue, not below the rank of Assistant Commissioner, is now empowered to initiate recovery proceedings on mere suspicion backed by audit or any credible basis. If such an officer believes that a taxpayer has either: â€¢ failed to pay or short-paid sales tax, â€¢ claimed undue input tax credit or refund, â€¢ or received any refund not lawfully due, they can issue a show cause notice, determine the exact quantum involved, and pass a recovery order with penalties and default surcharge as per sections 33 and 34 of the Act. Critically, this aggressive recovery framework under Section 11E excludes proceedings already launched under Section 37A â€” signaling that Section 11E is now the go-to enforcement tool for FBR in fresh cases of refund-related irregularities. Legal experts are calling it a â€œvery harsh lawâ€ in the tax domain. â€œThe scope of discretion is huge, and the burden of proof may fall squarely on businesses now,â€ said one Karachi-based tax consultant. â€œThis is not just about tax recovery anymore â€” itâ€™s about control.â€ As Section 11E rolls into action, businesses, refund claimants, and exporters are on high alert. The FBR, already under pressure to meet aggressive revenue targets, may now find itself with turbocharged powers to crack down on suspected fraud and tax manipulation. Whether this will increase tax compliance or trigger legal battles remains to be seen â€” but one thing is clear: Section 11E has changed the game.

Date: 2025-07-14

Details: EDITORIAL: The Asian Development Bankâ€™s recent report, â€œTaxing informal and hard-to-tax sectors â€” a policy guideâ€ casts a spotlight on Pakistanâ€™s long-standing struggles with undertaking effective tax reforms. Despite years of repeated efforts aimed at meaningfully expanding the tax base and boosting revenue collection, the country has continued to chronically underperform on both counts. The report further underscores broader structural issues that have long plagued Pakistanâ€™s fiscal landscape: a narrow and inequitable tax base, a burdensome, complicated compliance regime and a vast informal economy that remains outside the tax ambit. These systemic shortcomings have meant that despite nominal gains, revenue collection has seen little growth in real terms over the past decade. The tax-to-GDP ratio continues to lag well behind other regional economies, falling short of the 10.6 percent target for FY2024-25. Research also shows that the tax bureaucracyâ€™s disproportionate focus on identifying non-filers of tax returns and expanding the number of registered filers has produced limited dividends. While formal registrations have increased on paper since 2014, they have not been matched by a commensurate rise in actual revenue, as many filers declare negligible or no taxable income, resulting in little meaningful addition to overall revenue and clearly indicating that too many registrants continue to under-report or evade their obligations. In fact, non-compliance within the registered segment has become as serious a challenge as the vast informal economy outside the tax net, underscoring that simply expanding the roster of filers without addressing under-reporting and enforcement gaps will do little to strengthen the countryâ€™s fiscal capacity. Beyond weakening compliance among existing taxpayers, the structural inefficiencies plaguing the tax system have also incentivised businesses to remain informal. A key driver of widespread tax evasion and the reluctance of many enterprises to formalise is the prohibitively high cost of compliance to the tax regime. In recent years, not only have tax rates surged steeply, but the procedural burdens, regulatory uncertainty and the overall convoluted nature of the tax structure â€” dominated by indirect taxes, a tortuous withholding tax regime where multiple tax rates apply at different stages of business transactions, and minimum taxation on turnover regardless of profitability â€” have collectively deterred participation in the formal economy. An apt example of how the above factors combine to discourage businesses from entering the formal sector, and even jeopardise the viability of those part of the tax net is the recent hike in the general withholding tax rate for services rendered from 11 percent to a hefty 15 percent of turnover in the latest budget. Such taxation on gross turnover, especially when applied at high rates, is particularly punitive for businesses with slim profit margins. Because it applies regardless of actual earnings, it places an outsized burden on smaller firms and new entrants, many of which lack the financial resilience to absorb such costs. The resulting pressure on cash flows and profitability can undermine business sustainability, driving some to exit the formal sector, or cease operations altogether. It is essential, then, that policies targeting informality and compliance with the tax regime are carefully crafted. As the ADB report notes, steep hikes in tax rates can push formal businesses underground, while lowering rates alone may achieve little without effective enforcement measures, administrative reform of the tax bureaucracy and a broader tax base. Adjustments to tax rates must be accompanied by simplified compliance procedures, targeted enforcement strategies and meaningful support for businesses transitioning into the formal sector. The FBR must also move beyond the flawed notion that more filers automatically mean more revenue. Its habitual reliance on elevated tax rates and aggressive enforcement measures has done little to address underlying inefficiencies. Only a shift towards meaningful structural reform of the taxation framework will deliver lasting results. Copyright Business Recorder, 2025

Date: 2025-07-14

Details: ISLAMABAD, July 14, 2025 â€“ Are you among the return filers for tax year 2025? If yes, and you own immovable property, thereâ€™s a crucial update you need to know: the Federal Board of Revenue (FBR) now requires you to declare the fair market value of all your properties in your tax return. Sounds simple? Itâ€™s more detailed than you might think. Letâ€™s walk you through it. ðŸ” Whatâ€™s New for Return Filers? Through SRO 1213(I)/2025, dated July 7, 2025, the FBR has issued a draft income tax return form that includes a new section demanding the fair market valuation of each property you own. Even if your property details were auto-filled based on previous declarations, the FBR now wants you to re-enter those details manually â€” yes, again. The intent, as stated, is to ensure data accuracy and completeness. ðŸ What Exactly Is Required? Hereâ€™s a quick checklist for you as a return filer: â€¢ âœ… Declare fair market value of every immovable property. â€¢ âœ… Re-enter details even if the FBR has pre-filled the information. â€¢ âœ… Ensure all property entries are complete â€” missing data will make your return invalid. ðŸ’¬ What Are Experts Saying? Some tax experts are calling this move â€œconfusing and redundant.â€ They argue that taxpayers already mention the purchase value of property in their tax returns, so asking for the fair market value again raises concerns about trust in taxpayersâ€™ integrity. One expert noted, â€œIt seems the FBR doesnâ€™t fully trust the values already declared. This new requirement might create confusion, especially among salaried individuals and small investors.â€ ðŸ“¢ Takeaway for Return Filers If youâ€™re filing a tax return this year, double-check your property section and be sure to fill in every required field, including the fair market value. Leaving it blank could delay your return processing or even get it rejected. Still unsure? Consult a tax advisor or visit your nearest FBR facilitation center. Your property. Your responsibility. Your return â€” done right.

Date: 2025-07-14

Details: ISLAMABAD, July 14, 2025 â€” The Federal Board of Revenue (FBR) has officially announced the opening of the return filing portal for the tax year 2025, starting Tuesday, July 15, 2025. The decision was disclosed during a high-level meeting chaired by Prime Minister Shehbaz Sharif on Monday, where the FBR outlined the upcoming roadmap for return filing and broader tax reforms. According to the FBR, this yearâ€™s return filing process has been significantly simplified, especially for salaried individuals, who will be able to access their digital return forms from July 15. The filing system for other categories of taxpayers is scheduled to go live by July 30, alongside the much-anticipated Urdu-language return forms. During the briefing, the FBR showcased a step-by-step explanation of the new return process, highlighting how the latest system is more user-friendly and connected to a centralized digital platform. The goal, according to officials, is to encourage more citizens to participate in the return filing process with ease and confidence. In a significant development earlier this month, the FBR issued draft return forms via SRO 1213(I)/2025 on July 7, inviting suggestions and feedback from stakeholders over a seven-day consultation window. These forms are now in the final stage of approval, aligning with the FBRâ€™s commitment to transparency and public engagement. Prime Minister Shehbaz Sharif welcomed the initiative, particularly the introduction of Urdu-based return filing, which he said would ease the process for the average taxpayer. He also emphasized the importance of establishing a dedicated helpline to assist users throughout the return filing period. Furthermore, the Prime Minister directed that digital invoicing also be made available in Urdu to ensure inclusivity. He stressed that the focus of all FBR reforms must be on the convenience of the public and insisted on third-party validation to maintain transparency and credibility in the process. â€œThese simplified tax returns will especially benefit salaried individuals,â€ he remarked. To ensure maximum outreach, the FBR has also been instructed to launch a nationwide awareness campaign promoting the benefits and ease of the new return filing process, encouraging wider participation and compliance.

Date: 2025-07-14

Details: Islamabad, July 14, 2025 â€“ Prime Minister Shehbaz Sharif on Monday directed the immediate establishment of a nationwide helpline to assist citizens with return filing for the tax year 2025, aiming to make the process easier, faster, and more inclusive for the general public. The announcement came during a high-level meeting to review the Federal Board of Revenueâ€™s (FBR) ongoing digitization and reform initiatives. Applauding the introduction of simplified return filing formats in Urdu, Shehbaz emphasized the importance of making the tax system accessible to every citizen. â€œDigital invoicing and tax return filing should be made user-friendly in Urdu to benefit ordinary taxpayers,â€ he said, adding that reforms must focus on public convenience. The meeting included key members of the federal cabinet, FBR Chairman, and senior officials. It focused on the implementation of artificial intelligence (AI) in tax administration, digital invoicing, cargo tracking, and the development of a central command and control center. Shehbaz also directed that all FBR reforms undergo third-party validation to ensure transparency. A major breakthrough discussed was the upcoming launch of simplified digital tax returns. Starting July 15, salaried individuals will be able to access new, easier return filing options, while other taxpayers will receive access by July 30. Urdu-language versions will be fully available to salaried filers by the end of July. The PM highlighted that these simplified returns will be linked to centralized databases, benefiting salaried and small business taxpayers alike. In addition, a wide-scale awareness campaign will be launched to educate citizens about the return filing process and its new features. Shehbaz praised the finance ministry, FBR leadership, and technical teams for their dedication to reform. â€œThis is the first time we are integrating an AI-based tax assessment system in Pakistan, and itâ€™s a commendable step forward,â€ he noted. The meeting also focused on making it easier for small and medium-sized enterprises (SMEs) to join the digital invoicing system. Businesses will now issue electronic receipts via the FBR portal, with 20,000 enterprises expected to adopt the system in the coming months. In just one month, over 8,000 invoices worth Rs11.6 billion have been processed, reducing the need for separate sales tax return filing. Participants were also briefed on cargo tracking and e-bilty systems, which will ensure real-time monitoring of goods movement and automated tax assessment. Traders can now submit advance declarations before ships arrive, giving them full exemption from upfront duties. The percentage of such advance declarations is expected to rise from 3% to over 95%. The implementation of the internationally recognized 8-digit HS Code will help eliminate fraudulent invoicing and improve sales tax enforcement. All reforms are being aligned with international standards, with technical support from a Turkish delegation following Shehbazâ€™s recent visit to Azerbaijan. These efforts, centered on transparency and ease of return filing, reflect the governmentâ€™s commitment to taxpayer facilitation and digital governance.

Date: 2025-07-14

Details: Karachi, July 14, 2025 â€“ If youâ€™re a taxpayer in Pakistan, nowâ€™s the time to pay close attention. The Federal Board of Revenue (FBR) has officially released the schedule for the Active Taxpayers List (ATL) for the tax year 2025â€”and the countdown has already begun. So, what does this mean for you? According to sources within the FBR, the updated ATL will be published the very next day after the return filing deadline expires. That deadline? For salaried individuals, business persons, Association of Persons (AOPs), and companies operating on a special accounting year, the final date to file your returns is September 30, 2025. But thereâ€™s a twistâ€”so far, the FBR has not finalized the income tax return forms for 2025. This has fueled speculation that the return filing deadline may be extended. Still, taxpayers are being strongly advised to prepare early and stay alert for any updates from the FBR. Why is the ATL important? If your name appears on the ATL, it means youâ€™re recognized as a compliant taxpayer, which brings several benefits. These include reduced tax rates on banking transactions, property transfers, and other financial dealings. Missing the deadline could cost youâ€”not just in terms of surcharges, but also in lost incentives. A major change came into effect through SRO 1638(I)/2024, issued on October 18, 2024, when the FBR decided to overhaul the ATL system. Instead of updating it weekly, the ATL is now revised daily, ensuring a more responsive and accurate record of active taxpayers. This also means that once you file your returnâ€”even after the due dateâ€”you can still be included in the ATL, provided you pay the applicable surcharge under Section 182A of the Income Tax Ordinance, 2001. To qualify for inclusion in the ATL, individuals must file their returns within the deadline as outlined in Section 118 or under any extensions granted by the Commissioner or the FBR itself. So, whether youâ€™re a salaried professional or a business owner, now is the perfect time to get organized. Keep an eye on official announcements, prepare your documents, and file your returns on time. Being on the ATL isnâ€™t just about complianceâ€”itâ€™s about financial empowerment.

Date: 2025-07-13

Details: Karachi, July 13, 2025 â€“ The Federal Board of Revenue (FBR) has revealed a substantial increase in sales tax exemptions on imports, marking a 74% surge during the tax year 2025, as per the recently published Tax Expenditure Report 2025. According to the FBR, a total of Rs372.53 billion in sales tax exemptions were granted on imported goods during the fiscal year 2025, compared to Rs214.68 billion in the previous fiscal year. This significant rise highlights a growing trend in import-related tax relief, despite government efforts to rationalize exemptions and expand the tax base. In contrast, the sales tax exemptions granted on local supplies witnessed a notable decline. For tax year 2025, these exemptions dropped to Rs330.54 billion, down from Rs461.09 billion recorded in the preceding fiscal year. This shift indicates a change in the governmentâ€™s tax policy focus, possibly aimed at encouraging local production while controlling unnecessary imports. The FBR clarified that these exemptionsâ€”both for imports and domestic suppliesâ€”were extended under the Sixth Schedule of the Sales Tax Act, 1990, which outlines specific categories and goods eligible for tax relief. The total exemptions under this schedule reached Rs706.07 billion for FY2025, compared to Rs675.77 billion in FY2024. While these figures suggest an overall increase in tax exemptions, they also reflect a growing imbalance, with import-related relief outpacing that for domestic trade. This trend may raise concerns within policy circles, especially in light of Pakistanâ€™s commitment to the International Monetary Fund (IMF) to gradually phase out unnecessary tax breaks and make the taxation system more transparent and equitable. The FBR is under pressure to reform the sales tax regime, plug revenue leakages, and reduce tax expenditures that distort market competitiveness. Though some exemptions are necessary to support strategic sectors such as health, education, and food security, the surge in import-related sales tax exemptions could undermine efforts to promote local industry and increase tax revenue. Analysts suggest the FBR must review the effectiveness of current exemptions and align them with long-term economic goals to achieve fiscal sustainability.

Date: 2025-07-13

Details: Karachi, July 13, 2025 â€“ The Karachi real estate sector is once again under the microscope as the Federal Board of Revenue (FBR) rolls out new tax reforms under the Finance Act, 2025, which will affect the property valuations. These changes, effective from July 1, are designed to improve transparency and reduce tax evasion in Karachiâ€™s property market. The FBR has revised the tax rates applied to property transactions. Now, buyers will benefit from lower tax rates, while sellers will face higher taxes. The goal is to promote genuine ownership and discourage speculative buying and selling that often distorts market trends. These tax changes are closely tied to the official property valuation tables that the FBR uses to determine withholding taxes. On February 11, 2025, the FBR issued a legal order (SRO 144(I)/2025) updating the minimum benchmark values of property in Karachi. These rates are used when buyers or sellers declare values lower than market estimates. In such cases, the higher FBR-notified value will be used to calculate taxes. This latest move follows a larger valuation overhaul from October 29, 2024, when the FBR issued SRO 1724(I)/2024, revising property values in 237 areas across Karachi. These reforms aimed to bring declared prices closer to real market values and eliminate the common practice of underreporting property values to pay lower taxes. FBR officials say under-declaring property prices was one of the main methods used to dodge taxes. Buyers and sellers often agreed to show lower prices on paper, costing the government billions in lost revenue. The new valuation system is designed to put an end to such practices. Experts believe that these combined effortsâ€”revised tax rates and more realistic valuation benchmarksâ€”will help formalize Karachiâ€™s property market. In the short term, some slowdown in investment may occur, especially in speculative segments, but the long-term impact is expected to be positive. By closing loopholes and encouraging fair practices, the reforms are likely to boost investor confidence and make Karachiâ€™s property sector more stable, transparent, and trustworthy for all stakeholders.

Date: 2025-07-13

Details: Karachi, July 13, 2025 â€“ In a bold and unprecedented move, the Federal Board of Revenue (FBR) has launched a sweeping digital manhunt, targeting IP addresses used in filing sales tax returns linked to fraudulent and flying invoices. This aggressive crackdown aims to unmask the faceless perpetrators behind massive tax fraud operations that have bled billions from the national treasury. According to high-level sources within the local tax office, the FBR has been armed with extraordinary new powers under the Finance Act, 2025, enabling it to dig deeper than ever before into the murky world of digital deception. A new subsection added to Section 38B of the Sales Tax Act, 1990, empowers FBR Commissioners to demand subscriber data from internet service providers, telecom operators, and the Pakistan Telecommunication Authority. This groundbreaking clause reads: â€œNotwithstanding anything contained in any other lawâ€¦ the Commissioner may, by notice in writing, require any Internet Service Providers, Telecommunication Companies and Pakistan Telecommunication Authority to furnish subscriberâ€™s information pertaining to the Internet Protocols in connection with any inquiry or investigation in cases of tax fraud.â€ The move comes amid rising public anger over longstanding practices of tax fraud involving fake and flying invoices. In previous years, bogus companies routinely registered for sales tax and filed returns loaded with fraudulent entries just to claim illegitimate input tax credits or refunds. When authorities probed these entities, many were found to be non-existent at the registered addressesâ€”a loophole that allowed fraudsters to operate with near impunity. Until now, the FBR had been under fire for failing to go beyond surface-level investigations. Critics repeatedly questioned why the agency wasnâ€™t using digital forensic methods to trace IP addresses and identify the actual individuals behind the screens. Now, that long-ignored demand is being met with action. The timing of this crackdown is as explosive as its scale. With the business community already enraged by what they see as the FBRâ€™s overreach, tensions are peaking ahead of the July 19 nationwide strike. But with billions lost to tax fraud, the FBR appears determined to prove that no digital trail is beyond its reachâ€”and no fraud will go unpunished.

Date: 2025-07-12

Details: Karachi, July 12, 2025 â€” Planning to file your income tax return for 2025? The Federal Board of Revenue (FBR) wants you to know that the first and most crucial step in the return filing process is registration. Whether youâ€™re a salaried individual, a business owner, part of an Association of Persons (AOP), or managing a company, return filing for tax year 2025 begins by registering yourself with the FBR. Without this registration, you wonâ€™t be able to access the online tax system to file your income tax return. So, how do you get started? For individuals, the process is simple and entirely online. Just visit the FBRâ€™s Iris Portal, where you can register yourself for return filing from the comfort of your home. All you need is your valid 13-digit Computerized National Identity Card (CNIC), which will also serve as your National Tax Number (NTN) or Registration Number. For companies and AOPs, the process is slightly different. The principal officer must physically visit the nearest Regional Tax Office (RTO) to complete the registration process. Once registered, these entities will receive a 7-digit NTN. Upon successful registration or e-enrollment, youâ€™ll receive a Registration Number/NTN and a secure password. These credentials give you full access to the Iris Portal, which is the only official platform for online return filing in Pakistan. Key Points You Should Know: â€¢ FBR registration is mandatory for everyone who intends to file a tax return, regardless of income level. â€¢ Individuals use their CNIC as their Registration Number; companies and AOPs receive a separate 7-digit NTN. â€¢ You cannot proceed with online return filing unless youâ€™re registered and e-enrolled on the Iris system. â€¢ The deadline for tax return filing for Tax Year 2025 is September 30, 2025 â€” so donâ€™t wait till the last minute! The FBR continues to emphasize digital convenience, and the Iris system is designed to make tax compliance simpler and more accessible. If youâ€™re not already registered, itâ€™s time to take that first step and become a compliant taxpayer. Remember, return filing isnâ€™t just a legal obligation â€” itâ€™s a civic responsibility. Register today and stay ahead!

Date: 2025-07-12

Details: Karachi, July 12, 2025 â€” The Federal Tax Ombudsman (FTO) has strongly criticized the Federal Board of Revenue (FBR) for harassing exporters by arbitrarily blocking or suspending their Sales Tax Registration Numbers (STRNs) on unproven allegations of tax fraud â€” in direct violation of superior court rulings. In a recent case brought forward by a textile exporter, the FTO highlighted what it termed a widespread pattern of harassment being carried out by various FBR field offices. The exporter, an Association of Persons (AOP) engaged in textile manufacturing and exports, had his sales tax registration suspended without notice, allegedly due to purchases from suspended or blocked suppliers. This suspension not only disrupted his business operations but also resulted in undue financial pressure. According to the complaint, the exporter only became aware of the issue when suppliers informed him that his STRN appeared inactive since February 2025. The exporter repeatedly contacted the Commissioner Inland Revenue, Zone-I, CTO Karachi, and even paid Rs 1 million under protest in March 2025. Despite this, his registration was not restored. The FTO noted that this was not an isolated incident. â€œMultiple identical complaints have been reported during interactions with trade and legal bodies, indicating that FBR officials are engaging in unjust, biased, and oppressive practices. Exporters are being coerced into making payments under the threat of suspension â€” a clear violation of Supreme Court and High Court directives,â€ the FTO stated in its findings. The Ombudsman further emphasized that such actions by FBR field officers amount to maladministration, especially when done without invoking Section 11E of the Sales Tax Act. The FTO cited Supreme Court judgments dated January 16, 2025, and May 18, 2018, which declared such suspensions illegal when executed without due process. As a result, the FTO has made specific recommendations to the FBR: 1. The Commissioner IR, Zone-I, CTO Karachi should immediately process the exporterâ€™s refund claim, which was paid under protest, following legal procedures. 2. The Member (Operations) of FBR should take disciplinary notice of the repeated disregard for Supreme Court orders, as a measure to restore trust among taxpayers, particularly exporters. The FTO urged the FBR to take corrective action to prevent further erosion of taxpayer confidence and ensure that future enforcement aligns with the rule of law and judicial precedent.

Date: 2025-07-12

Details: Islamabad, July 12, 2025 â€” Are you running a business and your annual income exceeds Rs300,000? If yes, then get ready â€” return filing for Tax Year 2025 is no longer optional. Mark your calendar: September 30, 2025, is the deadline for submitting your income tax return to the Federal Board of Revenue (FBR). Under sub-section 1A of the Income Tax Ordinance, 2001, return filing is now mandatory for every individual whose annual income under the head â€œIncome from Businessâ€ is more than Rs300,000. Even if your income is below the taxable threshold, you are still legally obligated to submit your return if it crosses this limit. But thatâ€™s not all. Section 114 of the Ordinance outlines several other categories of taxpayers who are also required to complete return filing for the tax year. Wondering if you fall into one of them? Hereâ€™s a quick checklist: â€¢ Are you a company or an individual whose income exceeds the tax-free limit? â€¢ Do you own immovable property (like a 500 sq. yard plot or a flat over 2,000 sq. feet)? â€¢ Have you purchased a vehicle with engine capacity above 1000cc? â€¢ Have you received a commercial or industrial electricity bill exceeding Rs500,000 annually? â€¢ Are you a member of any chamber of commerce, trade association, or professional body like the Pakistan Bar Council or the Pakistan Engineering Council? If you answered yes to any of the above, return filing is not just advised â€” itâ€™s required by law. Moreover, if youâ€™ve been charged to tax in any of the last two years, or if you wish to carry forward a business loss, you must file your return this year. Even resident individuals with foreign income or overseas assets are obligated to disclose details through return filing under section 116A. The FBR is ramping up enforcement, and late or non-filers may face penalties or audits. Donâ€™t wait until the last minute â€” start preparing your documents and consult a tax advisor if needed. Compliance isnâ€™t just about avoiding trouble â€” itâ€™s about becoming part of a transparent and responsible business ecosystem. Return filing isnâ€™t just a formality anymore. Itâ€™s your obligation. Stay compliant, stay safe.

Date: 2025-07-12

Details: Islamabad, July 12, 2025 â€” Dr. Hamid Ateeq Sarwar, Member Inland Revenue (Operations) of the Federal Board of Revenue (FBR), stated that the arrest powers under Section 37A of the Sales Tax Act, 1990 will only be invoked against tax fraudsters and not legitimate traders or manufacturers. Speaking at a meeting organized by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Dr. Sarwar emphasized that Section 37A will strictly be applied to those engaged in fraudulent practices, including the use of fake or flying invoices that lead to billions in revenue losses. He reassured stakeholders that the FBR has no intent to misuse its powers or harass compliant businesses. The FPCCI had expressed deep concerns over the new powers granted to FBR officials, warning that extreme measures, including a nationwide strike, could follow if their grievances were ignored. However, after receiving a firm commitment that the powers would only be exercised against fraudsters, FPCCI announced that it would not proceed with the planned July 19 strike. During the session, business leaders from various sectorsâ€”including flour mills, ghee manufacturers, real estate agents, and chambers from Islamabad, Lahore, and Karachiâ€”voiced their concerns. President of the Real Estate Federation, Sardar Tahir, highlighted that the unilateral increase in stamp duty by the CDA had negated recent federal tax relief measures. The Minister of State for Finance, Bilal Azhar Kiyani, promised to escalate the issue to the relevant federal ministries. FPCCI President Atif Ikram Sheikh demanded the postponement of Section 37Aâ€™s enforcement until clear guidelines were established. Minister Kiyani, while noting that the Finance Act 2025 had already been passed by Parliament, offered monthly consultations to prevent misuse of authority. He reiterated that while the FBRâ€™s powers are legally sanctioned, their abuse will not be tolerated. Dr. Sarwar added that the FBR has identified nearly 60,000 active sales tax filers out of 200,000 registered entities, and only those engaging in clear tax evasion will face action. He stressed that honest businesses have nothing to fear. The FBR, he reiterated, is committed to targeting only fraudsters who exploit the system, and not genuine taxpayers.

Date: 2025-07-11

Details: Karachi, July 11, 2025 â€“ In a move to enhance transparency and strengthen regulatory oversight, the Federal Board of Revenue (FBR) has launched a comprehensive monitoring framework for terminal operators operating at sea ports, off-dock terminals, dry ports, and land border stations. Through Customs General Order (CGO) No. 07 of 2025, issued on July 11, the FBR has directed all relevant collectorates to conduct strict inspections and ensure that terminal operators meet the mandatory criteria set under the Customs Rules, 2001. This action aims to enforce the minimum operational requirements for those managing terminal activities under the Customs Computerized System (CCS). As outlined in Rule 548 of the Customs Rules, 2001, all terminal operators conducting operations under the CCS must comply with the standards defined in Rule 554. These requirements cover areas such as physical infrastructure, security systems, IT integration, examination facilities, and proper documentation protocols. Importantly, off-dock terminal operators must also adhere to the additional stipulations detailed in the FBRâ€™s guidelines dated July 30, 2024, under Rule 554A. To maintain oversight and accountability, the FBR has mandated a biannual inspection cycle. Each terminalâ€”whether a sea port, off-dock terminal, dry port, or land border stationâ€”will be reviewed every six months by the relevant Regulatory Collectorate. The inspection report must detail the availability and condition of each specified requirement. If any deficiencies are identified, the concerned terminal operator will be officially notified and given 15 days to resolve the issues and submit a compliance report. Failure to meet the standards or respond within the deadline may result in suspension or cancellation of their registration under Rule 553 of the Customs Rules, 2001, and Section 155F of the Customs Act, 1969. Restoration of registration will only be considered once the terminal operator has fulfilled all the compliance obligations to the satisfaction of the Regulatory Collectorate. The FBR has also made it mandatory for the Regulatory Collectorate to submit a consolidated compliance report on each terminal operator to the Board every six months, ensuring that oversight remains ongoing and comprehensive. This initiative underscores FBRâ€™s commitment to improving governance, standardizing operations, and minimizing revenue leakage across Pakistanâ€™s trade infrastructure.

Date: 2025-07-11

Details: Karachi, July 11, 2025 â€” The Federal Board of Revenue (FBR) has once again brought Karachiâ€™s real estate sector into the spotlight with significant tax changes introduced through the Finance Act, 2025, which directly impact the official property valuations used to calculate taxes on real estate transactions. These reforms, now part of the Income Tax Ordinance, 2001, have revised tax rates on property transactions effective from July 1, 2025. Notably, the FBR has lowered the tax rates for property buyers while increasing them for sellersâ€”a strategic move aimed at encouraging ownership and discouraging speculative selling. These tax revisions will work in tandem with previously notified property valuations that the FBR has implemented to curb tax evasion and bring transparency to the real estate sector. On February 11, 2025, the FBR issued SRO 144(I)/2025, amending the official property valuations for Karachi. These rates serve as the minimum benchmark for calculating withholding tax on both purchase and sale transactions. If a declared property value falls below these official figures, tax will be levied based on the higher FBR-notified valuation. This adjustment follows a broader valuation reform launched last year when, through SRO 1724(I)/2024 dated October 29, 2024, the FBR announced new property valuations for 237 areas in Karachi. These valuations aimed to bring declared prices closer to actual market rates, reducing opportunities for underreporting and illegal cash transactions. According to FBR officials, undervaluation of property had become a key tool for tax evasion. Buyers and sellers often colluded to declare artificially low prices, depriving the national exchequer of billions in revenue. The revised valuation mechanism now ensures that taxes are collected based on a standardized, realistic pricing structure. Experts believe these synchronized effortsâ€”revised tax rates along with updated property valuationsâ€”will help formalize the real estate sector, increase tax compliance, and restrict illegal financial flows. While the market may initially experience a cooling effect, particularly in speculative investment segments, the long-term impact is expected to improve investor confidence and bring greater legitimacy to property dealings in Karachi.

Date: 2025-07-11

Details: Islamabad, July 11, 2025 â€“ The Federal Board of Revenue (FBR) is making headlines once againâ€”this time by strongly advising businesses across Pakistan to avoid cash sales and adopt banking or digital channels for transactions exceeding Rs200,000. The move has triggered a wave of concern among traders, but the FBR insists itâ€™s a bold step toward economic documentation and fairness. So, whatâ€™s really going on? A new provision in the Finance Act, 2025, amending Section 21 of the Income Tax Ordinance, 2001, states: â€œWhere a taxpayer receives payment exceeding Rs 200,000 otherwise than through a banking channel or digital means against a single invoice of goods or services, 50% of the claimed expenditure shall be disallowed.â€ This means if your business continues to process large transactions in cash, half of the related expenses could be disqualified from tax deductionâ€”raising your tax burden significantly. The FBR says the change is meant to discourage undocumented cash dealings, often used to conceal income and evade taxes. An FBR official clarified to PkRevenue that this law wasnâ€™t imposed overnight. â€œThe business community is needlessly panicking. Parliament approved the provision. The FBR is only implementing what the legislature has passed,â€ the officer said. But not everyone is convinced. The Karachi Chamber of Commerce and Industry (KCCI) slammed the Rs200,000 cash transaction limit, calling it â€œunrealisticâ€ and warning it would hurt small businesses already struggling with inflation and high operational costs. A nationwide strike has been announced for July 19, and the cash threshold is one of the key flashpoints. Still, the FBR isnâ€™t backing down. Chairman FBR, Rashid Mahmood Langrial, reaffirmed the departmentâ€™s stance during a recent Senate committee meeting. â€œThis provision was not unilaterally enacted by the FBR. It was passed by both the National Assembly and Senate Finance Committees,â€ he explained. â€œWe are simply ensuring compliance.â€ Langrial emphasized that the FBR is pushing for a shift to a digital, traceable economy, where cash transactions donâ€™t obscure accountability. â€œIf we can reduce undocumented money flows, we can improve revenue collection and identify tax evaders,â€ he added. In conclusion, while the resistance from traders is understandable, the FBR believes the era of undocumented cash transactions must end if Pakistan is to move toward a transparent economic future.

Date: 2025-07-10

Details: Karachi, July 10, 2025 â€” In a significant development, the Peshawar High Court (PHC) has granted interim relief to five oil and ghee manufacturers by issuing a stay order against the Federal Board of Revenue (FBR) in an ongoing dispute regarding mandatory tax integration. The court issued the stay after the petitioner companies challenged the FBRâ€™s directive requiring them to procure specific hardware and software and integrate their invoicing systems electronically with the FBRâ€™s centralized platform. These companies operate within the jurisdiction of the erstwhile tribal areas and argue that the FBR is overstepping its legal authority. According to the PHCâ€™s interim order, the court has called upon the FBR and other relevant parties to submit their comments within a fortnight. The matter will then be scheduled for a formal hearing. Until further orders, the court has barred the FBR from taking any adverse action against the petitioner companies. The manufacturers claim that the FBRâ€™s enforcement of electronic sales tax integration through licensed integratorsâ€”such as PRAL (Pakistan Revenue Automation Ltd)â€”lacks proper legal authorization. They allege that the FBRâ€™s insistence on integration is an infringement on their constitutionally protected rights to conduct lawful business activities without undue interference. The petitioners maintain that the FBRâ€™s actions compel them to undertake a costly and burdensome technological shift without appropriate legislative backing. They argue that the FBR has no statutory mandate to require such integration, especially in regions with historically distinct tax treatment like the former FATA areas. A notice has been issued to the FBR to appear before the court on July 15, 2025, for further proceedings. The case has attracted attention within legal and business communities, as it raises important questions about the scope of the FBRâ€™s powers in enforcing digital compliance measures. This is the fifth time in recent months the FBR has been drawn into court proceedings related to its digital enforcement drives. The courtâ€™s decision to pause the FBRâ€™s integration campaign for now marks a temporary win for the manufacturing sector resisting immediate technological mandates.

Date: 2025-07-06

Details: Karachi, July 6, 2025 â€” Did you know the governmentâ€™s decision to allow tax-free total income to certain groups cost the national exchequer a whopping Rs443 billion during fiscal year 2024â€“25? This eye-opening figure was revealed in a detailed report by the Federal Board of Revenue (FBR), highlighting the growing impact of tax exemptions on the countryâ€™s revenue base. Compared to the previous yearâ€™s Rs293.46 billion, the cost of exempting total income from taxation has jumped by a substantial 53%. The FBR report shows that a wide array of individuals and institutions are benefiting from complete tax waivers under Part 1 of the Second Schedule of the Income Tax Ordinance, 2001. So, who exactly qualifies for these generous tax breaks on total income? Among the key beneficiaries are foreign governments and non-resident investors approved by the federal authorities. Any profit on debt or capital gains they earn from approved debt instruments is completely tax-free. Pensioners are another major group enjoying this benefit. Whether youâ€™re a retired employee of the federal or provincial governments or a veteran of the armed forces, your pensionâ€”and even commuted pension paymentsâ€”remain exempt from tax. This benefit extends to their families and dependents as well. Additionally, income generated by trustees managing recognized provident, gratuity, or superannuation funds is also exempt. The Employees Old Age Benefits Institution (EOBI), operating under the 1976 Act, likewise enjoys complete tax exemption on its total income. Non-profit and philanthropic institutions, such as hospitals and international organizations, are shielded from income tax tooâ€”provided they meet specific legal and operational criteria. The same applies to Collective Investment Schemes and REITs, so long as they distribute at least 90% of their annual accounting income, minus capital gains, to investors. Subsidies granted by the federal government to individuals for executing state-mandated projects are also exempt, ensuring that no tax is levied on this form of income. Meanwhile, businesses in the energy sector continue to benefit from older exemptions. Taxpayers involved in electric power generation projects established since July 1, 1988, as well as profits from privatized entities like National Power Parks Management Company, are all protected under this tax-free regime. With a total exemption bill now standing at Rs443 billion, the FBRâ€™s report sheds light on the need to balance social support and revenue sustainabilityâ€”especially as Pakistan looks to strengthen its fiscal base.

Date: 2025-07-06

Details: Karachi, July 6, 2025 â€“ If youâ€™re planning to withdraw large amounts of cash from your bank account and youâ€™re not on the Active Taxpayers List (ATL), thereâ€™s something you need to know. From July 1, 2025, banks across Pakistan have begun deducting 0.8% advance income tax on cash withdrawal, according to officials at the Federal Board of Revenue (FBR). This move comes under an updated provisionâ€”Section 231AB of the Income Tax Ordinance, 2001â€”introduced via the Finance Act, 2025. The FBR has revised the withholding tax rate on cash withdrawal for non-filers, increasing it from 0.6% to 0.8%. The rule applies when the daily cash withdrawal amount exceeds Rs50,000. Letâ€™s break it down: If youâ€™re not on the ATL and withdraw more than Rs50,000 in cash in a single day, your bank is legally bound to deduct 0.8% tax on the total amount. It doesnâ€™t matter if you withdraw that sum in one go or through multiple smaller transactionsâ€”if the aggregate exceeds Rs50,000, the tax kicks in. The FBR clarified this point in the updated Section 231AB to remove any confusion: â€œThe said fifty thousand rupees shall be aggregate cash withdrawals in a single day.â€ This tax applies only to non-filers. If youâ€™re an active taxpayer, youâ€™re exempt from this advance tax on cash withdrawal. Interestingly, this isnâ€™t the first time FBR has targeted cash withdrawals for revenue. Earlier, tax collection was done under Section 231A, which was repealed in 2021 to ease the burden on the public. However, given the revenue potential, the tax was reintroduced in 2023 through Section 231AB and has now been revised upward. According to officials, tax on cash withdrawal remains one of the key revenue streams for the FBR, especially from non-filers who often operate outside the formal tax net. So, if you want to avoid this extra deduction, consider filing your taxes and getting yourself on the ATL.

Date: 2025-07-05

Details: ISLAMABAD: The Ministry of Finance on Friday notified grant of ad hoc relief of 10 percent and 30 percent grant of Disparity Reduction Allowance-2025 to the employees of the federal government. The ministry issued an office memorandum which stated that the President has been pleased to sanction with effect from 01.07.2025 and till further orders, an Ad hoc Relief Allowance-2025 @ 10 per cent of running basic pay to Armed Forces Personnel, Civil Armed Forces and to all the Civil Employees of Federal Government as well as the civilians paid from Defence Estimates and contract employees employed against civil posts in basic pay scales on standard terms and conditions of contract appointment. The amount of Ad-hoc Relief Allowance-2025: i. will be subject to Income Tax; ii. Will be admissible during leave and entire period of LPR except during extra ordinary leave; iii. Will not be treated as part of emoluments for the purpose of calculation of pension/gratuity and recovery of house rent; iv. Will not be admissible to the employees during the tenure of their posting/deputation abroad; and v. Will be admissible to the employees on their repatriation from posting/deputation abroad at the rate and amount which would have been admissible to them had they not been posted abroad. Employees demand reasonable salary increase The term â€œbasic payâ€ for the purpose of Ad-hoc Relief Allowance-2025 will also include the amount of the personal pay granted on account of annual increment (s) beyond the maximum of the existing pay scales. The above Ad-hoc Relief Allowance-2025 shall be accommodated from within the budgetary allocation for the year 2025-26 by the respective ministries/divisions/departments and no supplementary grants shall be allowed on this account. Another office memorandum issued by the Finance Ministry stated that the President has been pleased to sanction with effect from 01 .07.2025 grant of Disparity Reduction Allowance (DRA) @ 30 per cent of basic pay as on 30.6.2022 to the officers/officials in BPS-1 to 22 who are already drawing DRA on the same terms and conditions provided under Finance Divisionâ€™s O.tM No. F.No. 14(1)R-312021-69, dated 23.02.2022and OM No FNo 14(1)R3l2o21dated 19th July 2022. For those employees who have been appointed on or after 1-7-2022, this allowance will be admissible on the basis on relevant initial basic pay scale of 2017. Copyright Business Recorder, 2025

Date: 2025-07-05

Details: Karachi, July 5, 2025 â€“ In a significant move to uplift the standard of living of laborers, the Sindh government has officially notified the implementation of new minimum wage rates, setting the monthly wage at Rs40,000 for unskilled adult and adolescent workers. This decision aims to ensure fair compensation and improve labor conditions across the province. The Sindh government issued this notification on July 2, 2025, under the Sindh Minimum Wages Act, 2015, which will formally come into effect following a 14-day period reserved for receiving and incorporating feedback from relevant stakeholders, including industrial and commercial entities. According to the notification, the new minimum wage rates will be applicable across all types of industrial, commercial, and other establishments operating in Sindh, whether registered or unregistered. The breakdown of the new wage structure is as follows: Rs40,000 per month, Rs1,538 per day, and Rs192 per hour. These revised rates are to be uniformly applied throughout the province, ensuring that no worker receives less than the prescribed amount, regardless of the employerâ€™s registration status or location within Sindh. Employers have been directed to pay wages strictly through formal banking channels, such as cross cheques or bank transfers, in accordance with the Payment of Wages Act, 2015. This regulation is aimed at promoting transparency and curbing wage exploitation or underreporting. Importantly, the notification affirms gender equality in compensation. Female workers must receive the same minimum wage as male workers for performing the same category of work. Furthermore, working hours, overtime, and conditions for weekly rest or paid holidays are to be governed under the Sindh Factories Act, 2015 and other related labor laws. The directive clarifies that the new minimum wage will apply to all unskilled workers. Additionally, no skilled or semi-skilled worker in any sector is to be paid less than this base minimum wage. Employers must also ensure that workers paid by piece rate earn the equivalent of Rs192 per hour, which guarantees a minimum income regardless of how work is structured. The government has emphasized that these minimum wage levels should not be interpreted as maximum limits. Employers are free to pay higher wages based on experience, living costs, or special circumstances. Existing salaries above the new minimum must not be reduced, preserving the rights of workers already earning higher wages. This latest wage policy underscores Sindhâ€™s commitment to labor welfare and income equity amid rising inflation and living costs.

Date: 2025-06-30

Details: Karachi, June 30, 2025 â€“ The Finance Act, 2025 has introduced a significant amendment by bringing pension income under the tax net, imposing both tax and surcharge on high-value pension receipts starting from the fiscal year 2025-26. Under this change, a new sub-section 1A has been added to Section 149 of the Income Tax Ordinance, 2001. The provision mandates that any organization or person responsible for paying pension to a former employeeâ€”who is below 70 years of age and receives pension income exceeding Rs10 million in a tax yearâ€”must deduct income tax at the time of payment. The tax deduction applies only on the amount exceeding Rs10 million, and the applicable rate will be as per Division I of Part I of the First Schedule of the Ordinance. A surcharge under Section 4AB will also be applicable after adjustments for other deductions or tax credits under Sections 61 and 63. For clarity, the tax rate structure is as follows: â€¢ If pension income is up to Rs10 million, no tax shall be charged (0%). â€¢ If pension income exceeds Rs10 million, a 5% tax shall be levied on the amount exceeding this threshold. This measure aims to ensure equity in taxation by targeting exceptionally high pension income while leaving regular or moderate pensioners unaffected. The Finance Act also allows adjustment of tax withheld from former employees under other heads, along with consideration for any prior excess or short deductions. In addition, Section 12 of the Income Tax Ordinance, 2001 has been revised to include sub-section 2A, specifically addressing pension income. According to this clause: â€¢ If an individual over 70 years of age receives pension income, no tax will apply regardless of amount. â€¢ If the pensioner continues employment with the former employer or a related entity, the pension income will be taxed under regular income slabs. These changes are part of a broader tax reform initiative aimed at widening the tax base and ensuring high-income retirees contribute proportionately to national revenue, without burdening those with modest retirement income.

Date: 2025-06-29

Details: Karachi, June 29, 2025 â€“ In a significant move to tighten tax compliance, the Federal Board of Revenue (FBR) has been granted enhanced powers under the Finance Act, 2025, to recover sales tax based on the information derived from withholding income tax deductions. This amendment is expected to boost FBRâ€™s enforcement capabilities and expand the taxpayer base. The change comes through a key amendment to Section 11D of the Sales Tax Act, 1990. Originally introduced in the Finance Act, 2024, Section 11D dealt with best judgment assessments for non-filers. However, under the new Finance Act, 2025, the scope of this section has been broadened with the addition of sub-section 5, which specifically targets entities liable to be registered under clause (25) of section 2 of the Sales Tax Act. According to the newly inserted provision, if a person falls under the definition of a taxable entity due to tax withheld under section 236G of the Income Tax Ordinance, 2001, and fails to file a return upon notice, the FBR can assess sales tax liability on the basis of value addition. This assessment may be conducted using information from purchase data available through the withholding of income tax, particularly under section 236G, which deals with suppliers to distributors, dealers, and wholesalers. This amendment provides FBR with a legal framework to trace sales tax evasion by linking it to income tax withholding data. By identifying suppliers who have had income tax withheld but failed to register or submit sales tax returns, the revenue authority can now issue recovery notices based on calculated value addition. Officials believe this mechanism will not only improve documentation but also close loopholes that previously allowed businesses to operate without registering for sales tax, despite evidence of taxable supplies. The use of cross-referenced data from income tax returns and withholding records represents a more data-driven, integrated approach to enforcement. This measure is part of a broader strategy by the FBR to improve indirect tax collection and reduce reliance on voluntary compliance. Analysts expect this initiative to contribute significantly to raising sales tax revenue in fiscal year 2025â€“26, particularly from under-reported segments in wholesale and distribution sectors.

Date: 2025-06-27

Details: ISLAMABAD: World Health Organization (WHO) has expressed serious concern that the Federal Cabinet decision to keep Federal Excise Duty (FED) rates on cigarettes unchanged in budget (2025-26) would increase cigarette consumption in Pakistan. According to a report of the WHO on post-budget analysis and review issued on Wednesday, since February 2023, the Federal Excise Duty (FED) rates on cigarettes have remained unchanged. The Cabinet has maintained these rates in the proposed budget for FY 2025â€“26. With inflation rising by 26% over this period, the real value of FED rates and cigarette prices has declined, and this trend is expected to continue in the absence of any adjustment. For FY 2024â€“25, WHO has estimated cigarette production at approximately 37 billion sticks, an increase compared to the previous fiscal yearâ€”and projected FED revenue at Rs. 208 billion. Given the decision to keep FED rates unchanged for FY 2025â€“26, nominal cigarette prices are likely to remain flat, implying a further decline in real prices. This will likely result in increased cigarette consumption. Based on a simple simulation model, cigarette production (and consumption) is projected to reach around 38 billion sticks, generating Rs 217.6 billion in FED revenue in FY 2025â€“26. Alternatively, a policy intervention involving a Rs 39 per pack increase in FED could reduce cigarette consumption by an estimated 10.7%, bringing production down to around 34 billion sticks. This policy would also boost FED revenues by 20.9% compared to the current plan, resulting in higher fiscal and public health gains. Notably, the government has set a revised FED revenue target of only Rs. 147 billion from cigarettes in FY 2024â€“25â€”a surprisingly conservative figure, considering actual collections reached Rs 157 billion during the first nine months of the fiscal year. We estimate that total FED revenue for FY 2024â€“25 will reach approximately Rs. 208.2 billion, nearly Rs. 60 billion more than collected in the first three quarters. Estimated cigarette FED collection in FY 2024/25. Based on PBSâ€™s data, the average annual growth rate of cigarettes production from July 2024 to April 2025 is 12.4% higher when compared to July 2023/April 24. By assuming the same annual growth rate for the next two months, the estimated production of cigarettes for 2024-25 will be around 37 billion sticks. By applying the above market shares and FED and GST rates, it is important to note that the estimated FED revenue collection for 2024-25 is 208.2 billion Rs. This is much higher than 147.8 billion Rs of the governmentâ€™s revised target for 2024-25. The total indirect tax collection from cigarettes (FED+GST) in 2024-25 will be around Rs 275.7 billion. To protect both public health and government revenue, Pakistanâ€™s tobacco tax policy should be reassessed and strengthened. This includes regular adjustments to the Federal Excise Duty (FED) rates and stricter oversight of industry practices, such as production front loading ahead of the budget and manipulation of brand mixes. However, the current budget proposal for cigarette FED rates does not incorporate these tax policy corrections needed to meet revenue and health objectives. With this decision, the government and FBR hope to control cigarette illicit manufacturing and smuggling. To address those challenges, however, proper tax administration measures should be implemented, such as effective controls of the distribution movements of tobacco leaves, used cigarette machinery and other key cigarette inputs inside the national territory, WHO added.

Date: 2025-06-27

Details: ISLAMABAD â€“ The World Health Organization (WHO) has issued a stark warning following the Federal Cabinetâ€™s decision to keep Federal Excise Duty (FED) rates on cigarettes unchanged in the 2025â€“26 federal budget. According to a detailed post-budget analysis report released by the WHO on Wednesday, the move threatens to reverse hard-won public health gains and could significantly increase cigarette consumption in Pakistan. The WHO report highlights that since February 2023, FED rates on cigarettes have not been revised, and the government has chosen to maintain this status quo in the newly announced fiscal plan. With inflation soaring by 26% during this period, the real value of both FED and retail cigarette prices has eroded sharply, making tobacco products increasingly affordable in real terms. The WHO estimates that cigarette production for FY 2024â€“25 will reach approximately 37 billion sticksâ€”reflecting a 12.4% year-on-year increase based on data from the Pakistan Bureau of Statistics. Despite this upward trend, the government has surprisingly set a conservative FED revenue target of Rs 147 billion for FY 2024â€“25, even though actual collections reached Rs 157 billion during just the first nine months. According to projections, total FED revenue for the full year is expected to be around Rs 208.2 billion. For FY 2025â€“26, the WHO projects that, in the absence of a rate hike, cigarette production could rise further to 38 billion sticks, with FED collections reaching Rs 217.6 billion. However, the organization strongly argues that merely increasing revenue is not sufficient if it comes at the cost of higher smoking rates and deteriorating public health. The WHO has suggested an alternative policy scenario involving a Rs 39 per pack increase in FED, which could cut cigarette consumption by approximately 10.7% and reduce production to 34 billion sticks. This measure, the report states, could simultaneously boost FED revenue by over 20.9%, enhance public health outcomes, and reduce the burden of smoking-related illnesses. In addition to regular upward adjustments in FED rates, the WHO urges the Pakistani government to crack down on illicit tobacco trade, enforce better monitoring of supply chains, and regulate cigarette inputs. Without such measures, it warns, the current policy risks failing both fiscal and public health objectives.

Date: 2025-06-24

Details: KARACHI: Diamond sets and a drone light show at a near-million-dollar wedding have become evidence for Pakistanâ€™s tax authorities under a new â€œLifestyle Monitoring Cellâ€ tasked with scanning social media for lavish spenders, officials said. A team of 40 investigators from the countryâ€™s Federal Board of Revenue (FBR) has started scouring Instagram, TikTok and YouTube posts this week, to match influencers, celebrities, realtors and businesspeople with disproportionate filings. â€œItâ€™s open-source â€“ their Instagram accounts are a public declaration,â€ one senior FBR official said, adding tax evasion cases can be opened up in a matter of hours. The FBR did not respond to a REUTERS request for comment. People walk outside shopping mall in Karachi, Pakistan. Photo: Reuters The monitoring cell has been formed to address Pakistanâ€™s chronic inability to meet revenue collection targets, and to help meet tougher goals set in this yearâ€™s International Monetary Fund-backed budget. The country has one of the lowest tax-to-GDP ratios in Asia, a chronic weakness that has forced it into nearly two dozen IMF programmes. Less than 2% of the country pays its income tax. The unit was formally set up this month, according to an internal document seen by REUTERS, which said its mandate was to â€œsystematically monitor, scour and analyse data from major social media platformsâ€ and identify people who display wealth but are either not registered for tax or declare income that appears incongruous with their expenditures and assets. According to the document, the cell will build digital profiles of suspects, assess the money behind their lifestyles, and prepare reports that can be used for tax or money laundering investigations. It will maintain a central database of evidence, including screenshots and timestamps, the document said. Diamonds, drones, DJs, and databases Officials said one wedding under review carried a price tag of nearly 248 million rupees ($878,000). Documents seen by REUTERS showed nearly $283,000 spent on diamond and gold sets and $124,000 on bridal outfits by leading South Asian designers. Guests entered through a hallway of floral arches as drones lit up the sky, before sitting down to multi-course meals prepared for 400 people. The celebrations featured top makeup artists, DJs and traditional qawwali music bands, while international consultants helped choreograph the six-day affair that officials said epitomised the kind of extravagant spending now in their crosshairs. A shopkeeper waits for customers while selling locally made jewellery at a market in Karachi, Pakistan. Photo: Reuters The wedding is just one of several cases under review, officials said. Investigators are also examining videos of luxury cars, high-end property tours and influencers flaunting expensive lifestyles. â€œPeople themselves tag the event managers, the caterers, the jewellers, etc. It makes our work easy,â€ another official said, adding the expenditure of the two families involved did not match their income declaration. Despite its recent formation, the new unit has already shortlisted multiple files for deeper scrutiny, officials said. Past efforts to net high earners fizzled, but officials say the new focus on social media offers stronger leads and quicker ways to flag undeclared wealth.

Date: 2025-06-23

Details: ISLAMABAD: Chairman Federal Board of Revenue (FBR) Rashid Mahmood Langrial Sunday announced new taxation measures of Rs 36 billion to narrow down financial gap on account of reduction in sales tax from 18 percent to 10 percent on solar panels and proposed increase in salary for government employees. FBR Chairman presented these additional taxation measures before the National Assembly Standing Committee on Finance on Sunday. FBR Chairman highlighted that the measures have been proposed to fill the financial gap for 2025-26. Over Rs623bn new taxes unveiled National Assembly Standing Committee on Finance approved following three new taxation measures: (i); Federal Excise Duty of 10 percent on Day old Chicks (DOC) of poultry sector. (ii); Rate of tax increased from 25 percent to 29 percent on dividend received by a company from mutual fund deriving income from profit on debt. (iii); Withholding tax has been increased from 15 to 20 percent on profit on government securities paid to any person (institutional investors) other than an individual. The new taxation measures would be made part of the amendments in the Finance Bill (2025-26). In budget (2025-26), the FBR has taken new taxation measures of Rs 312 billion and enforcement measures of Rs389 billion for 2025-26. Excluding Rs 8.5 billion due to decrease in sales tax on solar panels, the net revenue impact of taxation measures now stood at Rs 339.5 billion for next fiscal year. National Assembly Standing Committee on Finance also approved Finance Bill (2025-26) with approval of certain recommendations of the Senate committee, as well as, recommendations of the NA Finance committee. FBR Chairman informed the committee that there is a financial gap of around Rs 35-36 billion including Rs 12 billion due to increase in salary, Rs 8.5 billion on account of reduction in sales tax on solar panels. He said the federal government also added some amount for distribution of revenue to provinces under the NFC Award. He said that the government has shared six new taxation measures with the International Monetary Fund (IMF). Out of these six measures, three have been approved by the IMF. Earlier, Finance Committee was informed that a uniform tax rate of 10 percent would be applicable on imported raw cotton and local cotton. Both types of cotton would now be treated at par.

Date: 2025-06-23

Details: Finance Minister Muhammad Aurangzeb, in his address to the Senate Saturday, announced key relief measures in the federal budget for FY2025-26, including a significant income tax cut for the salaried class and a reduction in General Sales Tax (GST) on imported solar panels. He emphasised that individuals earning between Rs600,000 and Rs1.2 million annually will now be taxed at just 1%, down from 2.5% proposed in the budget for FY2025-26. It is pertinent to mention that, according to the budget proposals for FY26, the tax rate for those earning between Rs600,001 and Rs1.2 million was reduced to 2.5% from 5%. Pakistan salaried class rejects govtâ€™s claim of giving relief in income tax Addressing the Senate on Saturday, the finance minister said that low- and middle-income individuals play a vital role in our economy. â€œThis is the segment that endures inflation and pays taxes,â€ he acknowledged. The Senator said that the proposal to reduce income tax on this salaried class was already part of the budget suggestions. â€œIn this regard, the government, amid directives from the prime minister, has reduced the income tax rate for those earning between Rs600,000 and Rs1.2 million annually â€” from 2.5% to just 1%,â€ he told the house. The minister was of the view that the implementation of a 1% income tax rate is both â€œa practical and symbolic recognitionâ€ by the government that it does not want to burden this class. â€œWe hope this step will not only increase compliance but also restore their confidence in the tax system,â€ he said. Meanwhile, Aurangzeb stated that the salaries and pensions of government employees have been increased by 10% and 7%, respectively. The finance minister reiterated that the government did not introduce a mini-budget during the outgoing fiscal year and maintained fiscal discipline. He informed the upper house that the federal government expenditure for FY26 has increased marginally by 1.9%, far lower than in previous years. GST on solar panels lowered to 10% Additionally, Aurangzeb told the Senate that the proposed 18% GST on solar panel imports has been lowered to 10% following consultations with lawmakers. â€œThe government in its budget proposed to impose an 18% GST on imported solar panels. This was done to protect local industries and provide a level playing field, and promote the development and investment in solar technology in Pakistan,â€ he said. However, in light of detailed deliberations on the budget in both houses, the government has decided to reduce the proposed tax to 10%. Moreover, this tax will apply only to 46% of imported components, said Aurangzeb. â€œWith this measure, the price of solar panels will increase by 4.6%,â€ he said, adding that the government remains committed to promoting renewable energy. Aurangzeb informed the house that the government has received reports of profiteering and hoarding of solar panels by certain elements. â€œIt is condemnable that these opportunistic actors have artificially increased prices even before the proposed measure has come into effect. I strongly warn such elements that the government will take every possible step in the public interest,â€ he said, adding that legal action will be taken against those involved.

Date: 2025-06-23

Details: ISLAMABAD: Finance Bill (2025-26) contains drafting errors and contradictions amongst taxing statues including Income Tax Ordinance, 2001, Sales Tax Act, 1990 and Federal Excise Act, 2005. Tax experts told Business Recorder that policymaker has been harmonizing the parallel provisions contained in the Income Tax Ordinance, 2001, Sales Tax Act, 1990 and Federal Excise Act, 2005 as all these are administered by the same officer of the field formations. But contrary to the established policy and past practice through Finance Bill 2025 certain contradictory amendments are proposed. The tax experts have pointed out that earlier all the three taxing statutes contained a provision that after issuance of show cause notice the assessment order was to be passed within a specified period and this provision was interpreted as mandatory in various judgments of the Supreme Court. Budget FY25-26: Finance bill still being discussed, says FBR However, through Finance Bill the provisions contained in Section 122(9) of the Income Tax Ordinance, 2001 is proposed to be omitted meaning thereby that there would be no time limit for passing the assessment order after issuance of show cause notice and practically the same can be passed within five years of the end of the Financial Year in which the relevant return of total income was filed. Contrary to this, the identical provision contained in Section 11G of the Sales Tax Act, 1990 and sections of the Federal Excise Act would be continued. This differential treatment in the taxing statute administered by the same assessing officer does not sound to reason and is contrary to the norms of justice and fair play. When contacted, Shahid Jami, a Lahore based tax lawyer, explained that though Anomalies Committees have been constituted by the Federal Government but such fine points are not likely to be addressed by them as this may not be considered anomaly by them. He pointed out a drafting error according to which sub-section (1) of Section 46 of the Sales Tax Act, 1990 pertaining to appeal to the Appellate Tribunal is intended to be substituted and the proposed amendment provide appeal only against the appeal order passed by the Commissioner (Appeals) and contrary to the earlier provision existing for decades no appeal has been provided against the order passed by the Zonal Commissioner and FBR under the Act or Rules. Jami stated that the wording appears to be erroneous in drafting and not intentional change in policy as the words â€œunder this Act and Rule made there underâ€ exist in the proposed amendment but the authorities of Zonal Commissioner and FBR are missing. It is imperative that such drafting errors and contradictions are removed from the Finance Bill for uniformity of taxing statues and to protect the rights of the taxpayers.

Date: 2025-06-23

Details: Karachi, June 23, 2025 â€“ The Pakistan Business Council (PBC) has strongly criticized the sweeping and excessive powers proposed to be granted to the Federal Board of Revenue (FBR) in the Finance Bill 2025, terming them â€œdraconianâ€ and detrimental to the investment climate in the country. In a detailed letter addressed to Finance Minister Muhammad Aurangzeb, the PBC acknowledged the strides made by the government in stabilizing the economy, citing declining inflation, reduced borrowing costs, improved fiscal discipline, a surplus current account, and the approval of two IMF tranches. The PBC credited this turnaround, in large part, to the commitment and sacrifice of the formal business sector, which it said contributed disproportionately to the national tax collection in the FY2024-25 budget. However, the PBC expressed grave concern over the new FBR powers being proposed, arguing that they risk reversing hard-won progress. â€œWhile we supported the government in stabilizing the economy, we are alarmed by the Finance Billâ€™s provisions which confer unchecked powers upon the FBR,â€ the PBC stated. The letter detailed several controversial sections of the Finance Bill: â€¢ Section 11E allows the FBR to assess and recover taxes based merely on suspicion, without completing proper investigations. â€¢ Section 14AE gives FBR the authority to seize business premises and assets arbitrarily, without sufficient legal safeguards. â€¢ Section 32B permits private auditors to act with quasi-legal status, raising concerns of overreach and misuse. â€¢ Section 33 proposes a 10-year imprisonment and a Rs10 million fine for vaguely defined â€œtax fraud,â€ potentially penalizing genuine business errors. â€¢ Section 37AA allows arrest without warrant based solely on suspicion, which, according to the PBC, paves the way for harassment. â€¢ Section 37B allows 14-day detention of businesspersons, subject to judicial extension. â€¢ Section 58C breaks the client-advisor confidentiality by allowing FBR access to tax advisorsâ€™ offices where discrepancies are suspected. The PBC emphasized that these sweeping powers do not distinguish between compliant major taxpayers and the non-documented informal sector. â€œIt is disheartening that industries contributing 60% of taxes while making up only 18% of GDP are being lumped in with those who evade taxes altogether,â€ the letter noted. Pakistan, the PBC pointed out, already suffers from the lowest investment-to-GDP ratio in South Asia. Empowering FBR officials with unchecked powers, the council warned, will further damage investor confidence and hinder industrial growth. The PBC had previously submitted strategic recommendations urging the government to focus on increasing the tax net, encouraging exports, and supporting domestic manufacturing. Instead, the Finance Bill appears to prioritize enforcement through intimidation. Concluding its letter, the PBC requested an urgent meeting with the Finance Minister to address these issues. â€œWe strongly urge the government to reconsider these proposals and avoid creating an anti-business environment under the guise of expanding FBR authority,â€ the letter stated.

Date: 2025-06-22

Details: Karachi, June 22, 2025 â€“ The Federal Board of Revenue (FBR) has revealed a concerning trend in Pakistanâ€™s fiscal performance, disclosing that the countryâ€™s tax-to-GDP ratio has remained in the single digits consistently from the fiscal year 2000-01 to 2023-24. This persistent shortfall in tax mobilization relative to economic output highlights structural weaknesses in the revenue system and poses serious challenges for sustainable economic development. The tax-to-GDP ratio is a critical measure of a countryâ€™s fiscal health, reflecting how effectively a government is able to convert its economic activity into tax revenue. Over the past 24 years, despite steady increases in the absolute size of the Gross Domestic Product (GDP), the ratio of tax collection to GDP has remained below 10 percent, with only marginal variations across different fiscal years. In fiscal year 2023-24, Pakistanâ€™s GDP was recorded at over Rs. 105 trillion, yet the total tax collected by the FBR amounted to just Rs. 9.3 trillion, resulting in a tax-to-GDP ratio of merely 8.8 percent. Similarly, in preceding years such as 2022-23 and 2021-22, the ratios stood at 8.5 percent and 9.2 percent respectively, still below the critical double-digit threshold needed for financial resilience. Economists have long emphasized that a sustainable and robust economy requires a tax-to-GDP ratio of at least 15 percent. However, Pakistanâ€™s performance remains far behind this benchmark. The consistently low ratio indicates an over-reliance on indirect taxes, a narrow tax base, widespread exemptions, and chronic underreporting of incomeâ€”especially in the informal sector. Successive governments have struggled to reform the tax system, despite pledges to broaden the tax net and enhance direct tax collection. While GDP has expanded significantly over two decades, tax collection has failed to keep pace, thereby weakening the governmentâ€™s ability to invest in infrastructure, health, education, and social safety programs. Tax experts warn that unless major reforms are implemented to enhance tax compliance and administration, the low tax-to-GDP ratio will continue to constrain Pakistanâ€™s fiscal space. They stress the urgency of transitioning toward a more equitable tax regime, where the burden shifts from consumption-based taxes to income and corporate taxation, ensuring fairness and better alignment with GDP growth.

Date: 2025-06-22

Details: Karachi, June 22, 2025 â€“ The Senate of Pakistan has proposed significant changes to the Finance Bill, 2025, recommending a substantial increase in the threshold of financial resources required for certain transactions. One of the key recommendations is to raise the required financial resource ratio for eligible transactions from the proposed 130% to 400%. The Senate has reviewed the Finance Bill and forwarded its set of recommendations to the National Assembly for further consideration. A major focus has been on the proposed Section 114C of the Income Tax Ordinance, 2001, which seeks to restrict specific financial transactions to only those deemed eligible under the law. The term â€œeligible personâ€ refers to individuals or entities, including immediate family members, who have filed income tax returns for the tax year preceding a transaction and have declared sufficient financial means in their wealth or financial statements. Under the current proposal in the Finance Bill, the threshold for sufficient financial resources is 130% of the declared cash and cash-equivalent assets, which includes the fair market value of gold, net realizable value of stocks, bonds, receivables, and other financial instruments. The Senate, however, has recommended increasing this threshold to 400% to ensure tighter financial scrutiny and to prevent the misuse of the tax system by ineligible persons. This change aligns with earlier provisions introduced in the Tax Laws (Amendment) Bill, 2024, which first brought forward the concept of restricting transactions by ineligible persons. Although that bill was not enacted, the Finance Bill, 2025 seeks to revive and expand those restrictions with further clarity. As per the proposed law, ineligible personsâ€”those who do not meet the tax filing or financial declaration requirementsâ€”will face restrictions in multiple areas: â€¢ Motor Vehicles: They will not be allowed to book, purchase, or register vehicles. â€¢ Immovable Property: They will be barred from buying or transferring property beyond a specified value. â€¢ Securities: Brokers and financial institutions must not process transactions for ineligible persons. â€¢ Banking: Restrictions include opening or maintaining accounts and limitations on withdrawals, unless itâ€™s an Asaan or pensioner account. The Senateâ€™s push to raise the resource threshold to 400% reflects its commitment to curbing tax evasion and reinforcing accountability by ensuring only eligible taxpayers can engage in high-value financial transactions.

Date: 2025-06-22

Details: Islamabad, June 22, 2025 â€“ The National Assembly Standing Committee on Finance and Revenue has formally endorsed the Digital Presence Proceeds Tax Act, 2025, a landmark legislation designed to tax proceeds generated from digital economic activities in Pakistan by non-resident entities. The new law, which is part of the Finance Bill 2025, is expected to come into force on July 1, 2025, pending final approval by the National Assembly. The committee gave its nod after extensive deliberations, proposing minor amendments and recommending its passage. This Act signifies Pakistanâ€™s move to realign its tax policy with the evolving global digital economy, ensuring that foreign digital vendors contribute their fair share of tax from proceeds earned through users based in Pakistan. Objective of the Digital Presence Proceeds Tax Act, 2025 The Digital Presence Proceeds Tax Act is Pakistanâ€™s answer to the growing challenge of taxing digital businesses that earn substantial proceeds from users within the country without maintaining any physical presence. Traditional tax frameworks largely rely on the concept of â€œpermanent establishment,â€ making it difficult to tax these foreign entities. The Act aims to: â€¢ Establish tax equity between traditional and digital business models. â€¢ Prevent erosion of the countryâ€™s tax base due to cross-border digital transactions. â€¢ Reflect the economic reality that value is increasingly generated through user engagement, data collection, and digital infrastructureâ€”often in jurisdictions where companies have no offices or employees. Scope and Applicability The Act imposes a 5% tax on gross proceeds from digital transactions executed with Pakistani users by foreign vendors with a significant digital presence. These proceeds include payments made for digitally ordered goods and services delivered from outside Pakistan. A Pakistani user may be an individual resident, a company incorporated in Pakistan, or a local entity that initiates or receives payments electronically. However, the tax does not apply to: â€¢ Digitally ordered goods and services linked to a permanent establishment within Pakistan. â€¢ Services or goods physically delivered or rendered from within Pakistan. Criteria for Significant Digital Presence A foreign vendor is considered to have a significant digital presence in Pakistan if they execute more than five transactions annually and fulfill one or more of the following: â€¢ Accept payments in Pakistani rupees. â€¢ Target users in Pakistan via online marketing. â€¢ Collect data from users based in Pakistan. â€¢ Offer customer support or delivery logistics within Pakistan. â€¢ Maintain long-term promotional activity targeting the domestic market. This broad definition allows the government to link tax obligations to digital engagement rather than physical presence, ensuring taxation aligns with where value is created. Collection and Compliance Mechanism Recognizing the enforcement challenges in taxing foreign entities, the law smartly places the burden of tax collection on domestic financial intermediaries, including: â€¢ Banks â€¢ Licensed exchange companies â€¢ Payment gateways â€¢ Other financial institutions processing cross-border remittances These entities are responsible for deducting the tax at the source of payment and depositing it with the government treasury by the 7th day of the following month. Furthermore, customs officials will be directed to withhold courier deliveries unless tax payment evidence is provided. However, they are exempt from collecting additional income or sales tax if the digital proceeds tax has already been paid. Advertisement-Specific Provisions Foreign vendors that remit payments to online platforms (including social media networks) for advertisements targeting Pakistani users are also covered. These vendors must deduct and deposit the 5% tax on gross proceeds related to such ad expenditures. Both the vendor and any involved payment intermediary are jointly responsible for depositing this tax by the 7th of the subsequent month. This ensures digital advertisement proceeds also fall within the tax net. Failure to Comply Non-compliance triggers a series of stringent measures: â€¢ Personal liability for unpaid tax is imposed on both intermediaries and vendors. â€¢ A surcharge of KIBOR + 3% per annum is applied on the outstanding amount. â€¢ Penalties include up to Rs. 1 million per violation, particularly for failure to file required statements or withhold tax. â€¢ Importantly, intermediaries may be instructed to block remittances to non-compliant advertisers after 120 days of continuous default. However, due process is mandated, including opportunities to be heard and the right to appeal. Reporting and Transparency A robust reporting framework is introduced: â€¢ Quarterly reports must be submitted by banks, payment processors, and social media platforms. â€¢ These reports should detail all relevant proceeds, counterparties, and deductions. â€¢ This level of transparency allows the Federal Board of Revenue (FBR) to track digital revenues effectively and limit tax evasion. Appeals, Regulation & Rule-Making Disputes can be appealed to the Appellate Tribunal Inland Revenue (ATIR) within 30 days, with further appeals to the High Court within 60 days on legal grounds. The FBR is empowered to: â€¢ Develop implementing rules. â€¢ Clarify procedural concerns. â€¢ Amend related provisions of the Income Tax Ordinance, 2001 and Sales Tax Act to streamline the law. Challenges and Legal Ambiguities Despite its broad reach, the Digital Presence Proceeds Tax Act raises significant legal and practical questions: â€¢ Double Taxation Treaties: There is ambiguity on whether the digital tax is covered under treaties that shield foreign vendors from income tax in the absence of a permanent establishment. â€¢ International Norms: The tax on tangible goods sold offshore by non-resident suppliers may clash with global tax standards, particularly when no local establishment exists. â€¢ Business Environment: Empowering tax authorities to block remittances could signal an unfriendly business climate, potentially discouraging foreign investment. Conclusion The Digital Presence Proceeds Tax Act, 2025 represents a bold step by Pakistan to tax the growing digital economy and capture revenue from foreign vendors who earn significant proceeds from local users without paying taxes. While its goal to close tax loopholes is commendable, its execution must be balanced with global practices, treaty obligations, and economic diplomacy. With the digital economy set to grow rapidly, a fair and transparent taxation framework will be vital for long-term fiscal sustainability.

Date: 2025-06-21

Details: ISLAMABAD: The Federal Board of Revenue (FBR) has introduced major changes in sales tax law through Finance Bill (2025-26) for the arrest of those involved in tax evasion or tax fraud. According to a statement issued by the FBR on Friday, Finance bill is currently being discussed in the National Assembly and among various business circles. An impression has been created that some of the amendments introduced in the finance bill are not understood well by the public at large. Arrest for tax fraud: Senate panel for defining a threshold For instance, the legal provisions for the arrest of those involved in a tax fraud have already been provided under Section 37A of the Sales Tax Act, 1990 along with an elaborate procedure to be followed after the arrest which involves intimating the Special Judge immediately and the production of such person before Special Judge within 24 hours. However, the proposed amendment now restricts the powers of the officer to arrest by making prior inquiry after approval of the Commissioner Inland Revenue (CIR). Only on the basis of the findings of the inquiry CIR will authorise the investigation which would give the investigation officer the powers of an officer in charge of a police station under Code of Criminal Procedure, 1898 (Act V of 1898). The arrest can only be made with the prior approval of CIR if the investigation officer has reasons to believe that a tax fraud may have been committed by a person. The FBR further stated that the new legal provision further provides that if the arrest is malafide, the matter will be referred to the Chief Commissioner for fact finding inquiry. This shows that in contrast to the earlier provision where an Assistant CIR could arrest an offender, the new provisions bring transparency in the process by a mandatory prior inquiry and investigation and finally permission by the CIR. Moreover, certain changes and amendments are also necessary to reassure the compliant taxpayers that those evading taxes or involved in tax fraud are dealt with by the state with an iron hand. FBR Chairman Rashid Mahmood Langrial has expressed his willingness to discuss the recent changes made in the tax laws and introduce changes wherever needed, for example, the provisions related to arrest could be revised to mandate the permission of multiple senior officers before any arrest. Furthermore, in order to ensure that these powers are not misused by the authorised tax officers against the compliant taxpayers and business community, Prime Minister Shehbaz Sharif has formed a high-powered committee, which will be headed by Minister for Finance and Revenue, to re-evaluate the proposed amendments and suggest adequate safeguards to prevent potential misuse of powers. The other members of the Committee will include Ministers of Law and Economic Affairs Division, Minister of State for Finance, SAPM Industries and Chairman FBR. The Committee will also examine various options to ensure that legal economic activities are not stifled and propose additional protective measures against unlawful use of authority. The Committee will submit its recommendations to Prime Minister in three days. FBR is committed to safeguard the legal rights of the compliant taxpayers and to increase the tax collection and state revenues by discouraging non-compliant taxpayers and acknowledging those who are paying their due share to the state, FBR added.

Date: 2025-06-21

Details: ISLAMABAD: The government has allowed import of up to five-year-old/used vehicles imported in commercial quantities along with 40 percent additional import tariff in budget (2025-26). During review of Finance Bill (2025-26) on Friday, Ministry of Commerce Secretary Jawad Paul informed Senate Standing Committee on Finance that the time period for the import of old/used vehicles under the baggage scheme has not been changed and overseas Pakistanis would continue to import three-year-old vehicles under baggage scheme. The facility of five years has only been extended on the commercial import of old and used vehicles. From September 1, 2025, the commercial import of five years old vehicles would be allowed. Tariff rationalisation: Rs500bn revenue loss estimated However, there would be an additional tariff protection of 40 percent on such vehicles in 2025-26. In the next four years, the 40 percent additional import tariff would be zero on the import of used and old vehicles. The 40 percent additional import duties during 2025-26 would be reduced to 30 percent in subsequent fiscal year and finally zero-percent duty in coming years. In future, the import of 6-7 years old vehicles would also be allowed. The quantity and standards would be maintained to ensure that old and used vehicles should not create environment related problems in the country. Chairman of the Senate Standing Committee on Finance Saleem Mandviwalla stated that the same time period of five years should apply on the import of vehicles under the baggage scheme as well as commercial import of vehicles. The government should give same treatment on the import of vehicles by overseas Pakistanis and commercial importers. However, the government must ensure that 40 percent additional tariff should not be applicable on the import of five years old vehicles under the baggage scheme. There should be no distinction between the vehicles imported under the baggage scheme and commercial imports, Mandviwalla maintained. The commerce secretary stated that the gift scheme is being misused on the import of old and used vehicles. The tariff reductions would be applicable on new auto sector policy after June 30, 2026, he said. Finance Minister Muhammad Aurangzeb said that we have given enough tariff protection to domestic sectors/industries. The FBR Member Customs Policy stated that the government has not touched auto sector during tariff rationalisation during 2025-26. The government has reportedly received No Objection from International Monetary Fund (IMF) for import of five-year old used cars in the country, sources in Commerce Ministry told BUSINESS RECORDER. The import of used cars will commence from September 2025 on commercial basis as current regime of import of three-year old used cars by overseas Pakistan will be discontinued. The decision has been taken in light of proposals prepared by the Federal Board of Revenue (FBR) which was making hectic efforts to allow import of five-year used cars aimed at increasing its revenue through imports. However, the issue of arrangement of foreign exchange will be a gigantic task as State Bank of Pakistan (SBP) will not remit forex for import of five-year used cars due to difficulties. Local auto industry, mainly dominated by the Japanese companies had opposed the proposal at every level but FBR did not agree citing different reasons. The government will gradually phase out regulatory duties and slash tariffs on Completely Built-Up (CBU) vehicles to below 10 percent, with a broader goal of bringing auto-sector tariffs down to single digits within five years. The personnel baggage scheme, transfer of residence and gift scheme were reportedly misused on the import of old and used vehicles. Under the law, overseas Pakistanis are entitled to import vehicles under personnel baggage scheme, transfer of residence and gift scheme who have not imported, gifted or received a vehicle during the last two years under Import Policy Order (IPO), 2022. The Customs department will not charge 18 percent sales tax on auction of serviceable old and used vehicles in case sales tax was paid at the time of local or import stage.

Date: 2025-06-21

Details: ISLAMABAD: Amid criticism from opposition lawmakers, Minister of State for Finance Bilal Azhar Kayani on Friday said that the budget is aimed at further consolidating economic gains, providing relief to the people, and continuing the reform process. He said the reforms would also extend to tax fraud investigations, with new safeguards to prevent arbitrary arrests. Under the new policy, arrests during investigations would only occur in cases of sales tax fraud exceeding Rs50 million, and only after approval from a three-member Federal Board of Revenue (FBR) panel. The opposition lawmakers; however, sharply criticised the budget, saying it lacked vision and heavily favoured the handful elite. They decried the increase in allocations to the Benazir Income Support Programme (BISP), which rose from Rs592 billion to Rs716 billion, arguing it came at the expense of education, whose allocation remains comparatively low. PTI says â€˜federal budget favours elite, ignores massesâ€™ The opposition also slammed what they termed a symbolic 10 percent salary raise for government employees and a seven percent hike in pensions for retired government employees. They noted the budget failed to increase the minimum wage, allegedly due to pressure from industrialists. The Finance Ministry did announce some tax relief for salaried individuals, a promise previously made by Prime Minister Shehbaz Sharif. But opposition members ridiculed the tax relief for those earning above Rs1.2 million annually, calling it a â€œcruel joke.â€ At the outset of the session, Federal Minister for Finance Muhammad Aurangzeb laid four Statutory Regulatory Orders (SROs) before the House, issued under the Customs Act and Income Tax Ordinance. He confirmed to the speaker that he would conclude the budget debate on Monday. Several lawmakers belonging to both opposition and treasury participated in the ongoing debate on the Finance Bill for 2025-26, voicing a wide range of concerns and suggestions. Pakistan Peopleâ€™s Party (PPP) MNA Nafeesa Shah called for greater support to the agriculture sector. Saba Talpur echoed this sentiment, urging the government to cut prices of seeds, fertilisers, and pesticides to support farmers. Junaid Akbar Khan of PTI said the budget had nothing for the people and called attention to sacrifices made by Khyber Pakhtunkhwa in the war on terror. Agha Rafiullah of PPP demanded that the government review proposed family pension reforms and remove limitations affecting spouses and disabled children. Sahibzada Hamid Raza of SIC criticised the apparent neglect of health and education sectors in the budget. Minister for Religious Affairs Muhammad Yousaf described the budget as balanced and praised the governmentâ€™s handling of Hajj arrangements, noting that over 115,000 Pakistani pilgrims participated this year. Saudi Arabia awarded Pakistan for its management, and planning for next yearâ€™s pilgrimage has already begun, he added. Qaiser Ahmed Sheikh, Minister for the Board of Investment, said macroeconomic indicators were improving, with inflation falling and remittances rising. He urged all political parties to agree on a Charter of Economy to attract investors. Minister for Public Affairs Rana Mubashir Iqbal said Rs250 billion had been allocated for Balochistan, including Rs100 billion for road infrastructure and further allocations for dams, agriculture, energy, education, and health. Minister of State for Religious Affairs and Interfaith Harmony Kesoo Mal Kheal Das stressed that no new taxes had been imposed on agriculture and reaffirmed the governmentâ€™s commitment to completing the Sukkur-Karachi motorway. Murtaza Mahmud lauded the governmentâ€™s steps toward economic stability, while Pullain Baloch called for tax relief for the public. Law Minister Azam Nazeer Tarar reiterated Pakistanâ€™s stance against Israeli aggression â€“ whether in Gaza, Lebanon, Iran, or elsewhere â€“ stating that the country will continue to oppose and condemn such actions. Other lawmakers who took part in the debate included Fayyaz Hussain, Azimuddin Zahid, Shaharyar Khan Mahar, Osama Sarwar, Noor Alam, Farah Naz and Zulfiqar Ali, Zahra Wadood.

Date: 2025-06-21

Details: KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) has expressed serious concerns over the proposed powers of arrest granted to Federal Board of Revenue (FBR) officials under the Finance Bill 2025-26, warning that the move has significantly undermined investor confidence, particularly among foreign stakeholders. In a letter addressed to Finance Minister Muhammad Aurangzeb, the OICCI expressed deep concern over proposed amendments in the Finance Bill 2025-26, relating to Section 37 AA of the Sales Tax Act, 1990, seeking to extend wide powers to the Inland Revenue officials relating to arrest/prosecution without necessary check and balance. The chamber criticized the provision for granting sweeping powers of arrest and prosecution to Inland Revenue officials without adequate checks and balances, which it believes could lead to misuse and harassment of businesses. Tax laws: PM directs formation of arrest powers review panel â€œLocal business leadership has also reacted very negatively to the proposed measure; however, this move has dented the confidence of the leadership of our 200-plus members belonging to over 30 countries,â€ Abdul Aleem Chief Executive and Secretary General OICCI said in the letter. He said that such arbitrary measures, without thorough consultation with key stakeholders or due consideration of its potential impact on the business environment, add to the negative perception of the country as a business-friendly destination for local and foreign investors. OICCI has also appreciated the timely intervention from Prime Minister, Mian Shehbaz Sharif, Finance Minister Muhammad Aurangzeb and senior members of Parliament in ensuring that such far-reaching and potentially disruptive proposals are not enacted without rigorous oversight and due diligence. He said there should be any consideration to retain this clause for exceptional circumstances, the OICCI looks forward to reviewing the specific safeguards proposed to prevent misuse. In the Chamberâ€™s view, at a minimum, explicit prior approval from the FBR Chairman should be mandated in any such extraordinary case involving the arrest of an alleged defaulter. The OICCI further emphasized its trust that the government leadership and relevant authorities including the FBR fully recognize the potential reputational damage that such unnecessary and excessive measures could cause to Pakistanâ€™s image as a welcoming and dependable destination for both foreign and domestic investors. The OICCI has also conveyed its concerns to FBR Chairman Rashid Mahmood Langrial and urged a reconsideration of the proposed clause.

Date: 2025-06-21

Details: ISLAMABAD: The Opposition Leader in National Assembly Omar Ayub on Friday severely criticised the government, accusing it of relying on what he called â€œoutdated and unreliableâ€ statistical data â€“ warning that such practices were eroding evidence-based policymaking and stalling economic progress. Talking to journalists following a meeting with World Bank officials and a briefing by Commerce Ministry on tariff-related issues, he expressed serious concerns over the credibility of figures published by the Pakistan Bureau of Statistics (PBS), citing glaring inconsistencies. Referring to the recently released Economic Survey of Pakistan, he described many of the indicators as â€œabsurd,â€ claiming the figures were â€œfudged, fabricated, and misleading.â€ PTI warns oil reserves may run out in 10-12 days He took particular aim at the livestock data, which he said epitomised the flawed nature of PBS reporting. â€œThe way PBS claims to collect data on the increase in livestock numbers defies logic,â€ he remarked. â€œIt lays bare the absurdity of the data driving our national economic policies.â€ During the Commerce Ministryâ€™s briefing, he said that the opposition MPs grilled officials over the reliability of the statistics underpinning countryâ€™s trade policies. He argued that obsolete metrics were distorting sectoral analysis, especially in agriculture, where livestock accounts for 64 per cent of data. This, he said, grossly skewed the broader economic picture. â€œOur regional competitors are racing ahead with real-time data and modern analytics, but weâ€™re still stuck in the past. A 21st-century economy cannot run on 20th-century statistics,â€ he regretted. He went on to claim that tariff mechanisms had been better managed under the previous Pakistan Tehreek-e-Insaf (PTI) government â€“ a point he said was implicitly acknowledged by some current officials during the briefing. Copyright Business Recorder, 2025

Date: 2025-06-21

Details: LAHORE: A taxpayer has compelled the tax department to withdraw additional tax on transfer of raw material within sister concerns as no consideration was involved in the transaction. The taxpayer had challenged an amended tax assessment on the ground that sale of goods occurs when ownership of goods is transferred to buyer and a payment is made in the form of money. If such ownership is exchanged for anything other than money, such transaction cannot be classified as a sale and would be considered as exchange or barter. The taxpayer, a public limited company, was involved in manufacturing and selling of yarn. The department had selected its tax return for audit under Section 177 of the Income Tax Ordinance. The taxation officer had identified several discrepancies in the record during the audit. One significant issue related to the transfer of raw materials to the sister concerns, which he took as a sale and assessed under Section 169 to determine the taxpayerâ€™s final tax liability. The taxpayer preferred to oppose the conclusion before the commissioner appeals with an argument that buying and sales operations were centralized within their structure and raw material was procured in large quantities collectively and once one of the group members made the payment, the raw material then be allocated to other sister concerns within the group based on their individual needs. Since these transfer occurred within the group without any exchange of monetary consideration, it should not be classified as sales. But the audit officer had not accepted this reasoning and concluded that the transactions should indeed be regarded as sales, which were netted off for tax purposes. He explained the rationale of his conclusion that if there had been no sales activities, the taxpayer would not have recorded the resulting net amounts as sales of raw materials in its profit and loss statements. This finding culminated in an amended order under Section 122 (1) of the Ordinance, by which tax demand was created. However, the departmental tribunal did not agree with the department and decided in favour of the taxpayer, concluding that the transaction recorded in the ledger account could not be deemed a sale as it lacked the essential element of cash transaction.

Date: 2025-06-16

Details: Islamabad, June 16, 2025 â€“ Prime Minister Muhammad Shehbaz Sharif has issued clear instructions to limit the arrest powers of the Federal Board of Revenue (FBR), particularly in cases that could lead to harassment of legitimate taxpayers and the business community. His directive came during a high-level review meeting at the Prime Ministerâ€™s Office, in response to widespread concerns raised in the media regarding the FBRâ€™s arrest provisions in the Finance Bill 2025. Prime Minister Shehbaz emphasized that while legal action against tax evaders is necessary, the FBR must exercise its powers responsibly. â€œThe dignity and trust of Pakistanâ€™s business community are non-negotiable. No one should feel intimidated by the use of state powers under the pretext of tax enforcement,â€ Shehbaz said. The premier noted that the arrest powers under existing tax laws, particularly regarding sales tax defaulters, have been in place since the 1990s. However, he pointed out that recent judicial interpretations have necessitated a revision of these powers to ensure alignment with constitutional safeguards and public expectations. Shehbaz directed that a special committee be constituted to review the scope of FBRâ€™s arrest powers and recommend measures to prevent misuse. This committee will also study the proposed legal amendments and suggest appropriate safeguards to ensure that only cases involving deliberate and large-scale tax evasion are subjected to arrest provisions. Furthermore, the prime minister stressed that these powers should not be used arbitrarily and must include an effective mechanism of external oversight. A system of checks and balances, including third-party evaluations, will be introduced to monitor the implementation of arrest clauses within tax laws. Shehbaz instructed that the Finance Act 2025 must include explicit provisions to protect taxpayers against any potential misuse of FBRâ€™s enforcement powers. He also called for broad consultation with allied political parties in parliament to achieve consensus on this critical issue. The meeting was attended by key federal ministers, including those for Defence, Law, Commerce, Economic Affairs, and Information, along with the Chairman FBR and senior economic advisers. The move underscores Shehbazâ€™s commitment to maintaining investor confidence and ensuring that the FBRâ€™s powers are balanced, transparent, and fair.

Date: 2025-06-16

Details: Islamabad, June 16, 2025 â€“ The Federal Board of Revenue (FBR) has revealed that several influential individuals, including a former senator and ex-customs official, were involved in high-value tax fraud, prompting renewed debate over the FBRâ€™s proposed arrest powers in the Finance Bill, 2025. During a meeting of the Senate Standing Committee on Finance, FBR Chairman Rashid Mehmood Langrial strongly defended the proposed authority to arrest individuals involved in tax fraud after the completion of an inquiry. He emphasized that fraud on such a scale is a criminal offense and must be treated accordingly. Langrial revealed that a former customs officer, now in FBR custody, had guided a shoe manufacturer on how to evade millions in sales tax, a scheme which the FBR has documented with video evidence. He stressed that such actions warrant immediate legal consequences and highlighted that one of the culprits is a high-profile figure who previously served as a senator. Currently, the law allows FBR officers to arrest suspects during the inquiry stage. However, the proposed amendment in Clause 37A seeks to shift this power to the investigation stage and introduces a requirement for the Commissionerâ€™s approval. State Minister for Finance Bilal Azhar Kiyani defended the amendment, stating it would uphold procedural fairness and reduce the possibility of arbitrary arrests by low-ranking officers. The committee, chaired by Senator Saleem Mandviwalla, rejected the FBRâ€™s proposal in its current form. Senators demanded a well-defined threshold for arrests in tax fraud cases. The FBR proposed a minimum fraud amount of Rs 10 million for an arrest to be permissible. Senator Farooq H. Naek of the PPP opposed the FBRâ€™s powers, arguing that arrests in tax fraud cases should only occur with judicial authorization. He compared the FBRâ€™s sweeping powers to previously amended NAB laws that were seen as overly broad and intrusive. Despite pushback, Langrial insisted that tax fraud of Rs 1 billion or more must be met with strong enforcement, including up to 10 yearsâ€™ imprisonment. He pointed out the irony of punishing minor crimes severely while hesitating on major economic offenses. The Finance Bill also proposes harsh penalties: 100% fines and up to 10 yearsâ€™ imprisonment for severe fraud, along with the empowerment of special judges for prosecution. Meanwhile, the FBR has proposed further enforcement measures, such as sealing business premises, freezing bank accounts, and restricting property transfers of unregistered taxpayers. However, Langrial assured that no punitive action would be taken without a public hearing and consultation with business chambers. In conclusion, the Senate committee advised the FBR to revisit its proposals in consultation with the Attorney General and Finance Minister, and to present revised suggestions soon.

Date: 2025-06-14

Details: Sohail Sarfraz | Abdul Rasheed Azad Published June 14, 2025 Updated about an hour ago ISLAMABAD: Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial, Friday, disclosed before the National Assembly Standing Committee on Finance that the tax gap has reached Rs7.1 trillion in 2024-25 and approval of parliament is needed for enforcement measures of Rs389 billion, and help of provinces to increase tax-to-GDP ratio. On Friday, Minister of State for Finance and Revenue and Chairman FBR presented an overview of Finance Bill proposals and a summary of the FBR Transformation Plan. The FBR chairman disclosed that the FBR has suffered Rs0.5 trillion tax losses due to smuggling from borders, especially smuggling of petroleum products from Chagai district in Balochistan. He informed the committee that FBR has developed an ambitious transformation plan, which will be implemented from December 2025. He said that FBRâ€™s real tax, after adjusting for inflation and real GDP, has been one per cent from 2016-18 and -0.3 per cent from 2018â€“24. He added that Pakistan faces a tax gap of Rs7.1 trillion in 2024â€“25 and also lags behind peers in the tax-to-GDP ratio. The FBRâ€™s revenue as percentage of GDP stood at around 10.4 percent to 10.5 percent. Break-up of tax gap revealed that sales tax gap stood at Rs3.4 trillion, income tax gap Rs2 trillion, customs duty gap Rs0.5 trillion, totalling to Rs5.9 trillion. After including enforcement gap, autonomous growth and other factors, total tax gap stood at Rs7.2 trillion during 2024-25, the FBR chairman said. There is an urgent need to request provinces to help in raising tax-to-GDP ratio. Referring to the importance of enforcement, the FBR chairman said that the FBR has collected Rs50billion extra revenue from the sugar industry during the current year despite less production. This extra Rs50 billion has been collected without any change in tax rates on sugar industry. The digital integration exercise resulted in registration of 1,812 businesses having annual turnover of Rs11.8 trillion. A total of 489 companies are in testing phase and 42 companies are now digitally live. During the meeting, the finance committee expressed serious concern over the increase in tax on profits. The committee chairman directed the FBR to minimise the tax on profits of small depositors. The committee opposed the gradual withdrawal of the extension to the exemption for FATA/ PATA. Chairman Syed Naveed Qamar considered it an economic assassination of small-scale businesses in the area. He directed the FBR to reconsider the withdrawal and provide relief to the locals. The FBR chairman updated the committee on a series of reforms, but noted a lack of enforcement. He said that a Delivery Unit has been set up to drive transformation interventions with all stakeholders. A roadmap is in place to deliver transformational impact by the end of the year. He updated the committee on the Digital Production Tracking, Digital Invoicing, Digital Enforcement Stations, Cargo Tracking System, and Faceless Assessment System. The Minister of State for Finance and Revenue and the Chairman FBR also briefed the committee on potential concerns and justifications. He updated the committee on the current budgetary position, revenue receipts, target for FY 2025â€“2026, summary of income tax measures, summary of sales tax measures, relief for salaried individuals, relief in super tax, rationalisation in rates of advance tax on rendering of services to non-residents, reintroduction of tax credit for housing loans for small residences, gradual withdrawal of extension to exemption to FATA/ PATA, allowance to coal miners in Sindh to sell to buyers other than IPPs, dividend tax on mutual funds, tax on e-commerce transactions, and an increase in advance tax on cash withdrawals by non-filers. Some committee members raised issues with the Faceless Assessment System in Karachi, citing complaints of high charges, delays in examination and reviews, which caused significant demurrages. The members also complained about the misuse of the Digital Production Tracking and Digital Invoicing System. They stated that the Digital Production Tracking system makes errors in distinguishing between old, used, and scrap material. The FBR was; however, of the view that there are reports of usable material being misrepresented as scrap. Chairman Qamar observed that the digital enforcement station plan may choke port points and that the cargo tracking system will create practical issues. He observed that the mortgage culture has not yet been introduced in the country. He emphasised the need for the FBR to simplify the process of tax credits for housing loans. He directed the FBR to provide a specific table of options with thresholds for the committeeâ€™s consideration. The committee expressed serious concern over the increase in tax on profits and tax on cash withdrawals. The chairman directed the FBR to minimise the tax on profits of small depositors. The meeting was attended by Omar Ayub Khan, Rana Iradat Sharif Khan, Syed Samiul Hassan Gilani, Ali Zahid, Zeb Jaffar, Muhammad Usman Awaisi, Dr Mirza Ikhtiar Baig, Dr Nafisa Shah, Sharmila Sahiba Faruque Hashaam, Ali Jan Mazari, Muhammad Jawed Hanif Khan, Arshad Abdullah Vohra, Muhammad Ali Sarfraz (on Zoom), Muhammad Mobeen Arif, Usama Ahmed Mela, and Shahida Begum, MNAs. The meeting was also attended by the Minister of State for Finance and Revenue, Secretary Revenue Divisions, Special Secretary Finance and other senior officers from both the divisions. Copyright Business Recorder, 2025

Date: 2025-06-14

Details: LAHORE: Proposed insertion of a new Section 37AA in the Sales Tax Act has irked businessmen at large, authorizing an Inland Revenue Officers (IROs) to arrest without warrant based on mere suspicion of tax fraud â€“ a power that invites abuse and harassment. They said the provision creates a surveillance state where businesses operate under the constant threat of arbitrary action. This is not tax policy but a systematic harassment institutionalized by law, they added. As per the provision, an IRO can arrest a person involved in a tax fraud or any offence under the Act with prior approval from the commissioner. If delay may let the person escape or it is impractical to get approval, the officer may arrest without it â€“ but he must immediately inform the commissioner with all relevant facts and grounds for arrest. It may be noted that the Sales Tax Act had empowered the IRO to raid a business place and confiscate books of account, computers and business record in case of tax fraud. But the present one provision has proposed arrest of taxpayer to investigate and get a confession on the assumption that a tax fraud may have happened. They said empowering IROs with such an authority would lead to corrupt practices besides harassment. Mustafa Ashraf, a tax consultant, also pointed out that how a commission can extend approval for arrest a taxpayer when heâ€™s not present on the spot simply on the statement of IRO regarding a tax fraud. No procedure has been defined and the commissioner would be authorizing IRO on his verbal briefing on tax fraud, he wondered. Also, he added that how an IRO can arrest a taxpayer first and seek an approval from the commissioner in the follow up. Some other tax experts dubbed the said provision as a complete ambiguity. They said the said provision also lacks the procedure regarding pre or post arrest bail of taxpayers. No such opportunity has been given to taxpayers and IRO has been bestowed with unlimited powers. It is nothing but harassment and sole discretion of IROs. Also, the provision does not suggest action against IROs in case their mala fide is established at the end of the whole exercise, they asserted.

Date: 2025-06-12

Details: PESHAWAR: Traders, consumers and politicians have rejected the federal budget and warned that imposition of massive new taxes will further push the downtrodden class below poverty. Reacting to the federal governmentâ€™s budget office bearers of various groups of traders, and leaders of political parties in separate statements here on Wednesday pointed out that the rulers failed to provide any relief to the poverty-stricken masses. Qaumi Watan Party (QWP) provincial Chairman Sikandar Hayat Khan Sherpao said the federal budget failed to reflect the aspirations of the people and offered no relief to the public, business community as well as the agricultural sector. He said the budget lacked any measures aimed at economic growth, agricultural revival, or public welfare. He warned that the imposition of massive taxes was likely to have severe negative impacts, particularly on agriculture, which was already facing unprecedented decline. He pointed out that inflation was at its highest level and agricultural degradation was pushing nearly half of the countryâ€™s population below the poverty line. He remarked â€œInstead of curbing its extravagant expenditures, the government has increased them by 17 percent, and this burden will ultimately fall on the poor.â€ Highlighting regional disparities, Sikandar Sherpao said around 42 percent of the countryâ€™s population now lived below the poverty line; a number that had surged to 48 percent in Khyber Pakhtunkhwa and nearly 70 percent in Balochistan. â€œDespite depriving smaller provinces of their due resources, the government is imposing heavy taxes on them,â€ he added. Sikandar Sherpao criticised the government for once again failing to allocate promised funds for the merged tribal districts, warning that continued neglect would lead to further underdevelopment and despair in the region. Sikandar Sherpao expressed alarm over the state of agriculture, noting that agricultural output recorded a sharp decline from 6.4 percent growth last year to just 0.65 percent this year. â€œThis is a matter of serious concern, given our heavy economic reliance on agriculture,â€ he stated, accusing the government of using IMF conditions as a pretext to overburden the sector with unjust taxes. The QWP leader further said there was little hope for a significant increase in exports under the current circumstances. Regarding the 10 percent salary increase for government employees, he termed it deceptive. â€œThe government has taken back double the amount through excessive taxation,â€ he said. He also questioned the rising value of the US dollar in Pakistan while it was declining globally, blaming it on flawed government policies. â€œA lower dollar rate would reduce national debt and petroleum product prices,â€ he observed. Expressing scepticism over the governmentâ€™s ambitious tax target of Rs14,000 billion for the next fiscal year, Sikandar Sherpao noted that it had failed to meet last yearâ€™s target of Rs12,700 billion. â€œHow can the government expect to achieve an even higher target when it couldnâ€™t meet the previous one?â€ he asked. The QWP leader warned that the overall impact of the federal budget would lead to a further spike in inflation and hurt the poor. He lamented the lack of specific measures for the development of smaller provinces, saying it would only deepen their sense of deprivation. Similarly, Tajir Itehad provincial president Mujeeb-ur-Rehman, also strongly criticized the budget, calling it a â€œbudget of numbersâ€ that fails to address the real issues faced by traders and the general public. Mujeeb-ur-Rehman stated that the implementation of new taxes worth Rs. 2,000 billion will make it impossible for businesses to operate. He emphasized that the tax target of Rs. 14,000 billion was unrealistic and will further shrink the economy. He questioned how the government plans to service debts exceeding Rs. 8,500 billion without a viable strategy. He said increasing the petroleum levy from Rs. 78 to Rs. 100 per liter will be detrimental to the economy. He expressed concerns that the ordinance will open new avenues for corruption and bribery. He warned that digital invoicing will empower FBR officers with unlimited powers, making it difficult for businesses to operate. Instead of expanding the tax net, the government is increasing the tax burden on existing filers. He demanded that the condition of paying extra Rs. 2-3 per liter for petrol purchases without a card should be abolished. Electricity prices should be reduced, and 13 types of taxes on electricity should be abolished to promote economic growth. Copyright Business Recorder, 2025

Date: 2025-06-12

Details: Tahir Amin Published about 2 hours ago ISLAMABAD: Finance Minister Muhammad Aurangzeb on Wednesday warned that additional revenue measures of up to Rs 500 billion would be taken next fiscal year, if enabling amendments and legislation on enforcement were not passed by parliament, adding that all the budget figures were locked with the International Monetary Fund (IMF). This he stated while addressing the post-budget press briefing which began with journalists from the independent media staging a walkout in protest against the Federal Board of Revenueâ€™s failure to provide the traditional technical briefing on the Finance Bill 2025-26 after the budget speech. Finance Minister flanked by FBR Chairman Rashid Mehmood Langrial and Secretary Finance continued the post-budget press briefing despite the boycott. Budget 2025-26: Pakistan targets 4.2% growth as Aurangzeb presents proposals â€˜for a competitive economyâ€™ Information Minister Ataullah Tarar was summoned to clear the air with the protesting journalists who tendered an apology with the assurance that the technical briefing would be held prompting independent journalists to end their boycott and rejoin the press conference after more than half an hour. The minister said, strengthened enforcement mechanisms have helped the federal government generate over Rs400 billion in additional revenues this fiscal year. He noted that while international stakeholders had previously doubted Pakistanâ€™s ability to implement tax laws effectively, the government had demonstrated that meaningful enforcement is possible. He said, tax-to-GDP ratio was projected to reach 10.4 percent this year and to 10.9 percent in fiscal year 2025-26. Of the Rs2.2 trillion targeted in overall revenue, only Rs312 billion is expected from new taxes, with the remainder stemming automatically from growth and enforcement. â€œWe have two ways â€” either we ensure enforcement or we introduce additional measures of up to Rs 400 to 500 billion. This is why we will go to the parliament to help us out with the enabling amendments and legislation,â€ said the minister, adding that they needed enabling amendments and legislation to plug leakages in the system. The minister further said that laws, legislation and taxes were there but there is lack of enforcement. â€œThe things that had never been reversed before have now been put into reversal, but thatâ€™s not the eventual end state,â€ said the minister adding that the segments that have been subjected to undue burden, whether itâ€™s the formal sector, the beneficiary sector, the salaried class, the government should at least acknowledge that it is cognizant of their problems and that it will deal with those as soon as fiscal space is created. Talking about a 10 percent surcharge on electricity bills, FBR Chairman clarified that no additional surcharge has been imposed so far. Replying to a question regarding the federal governmentâ€™s plan to potentially delink population from the National Finance Commission (NFC) award, Finance Minister stated, â€œeverything will be done in consultation with the provinces including the national fiscal pact which was signed with the provinces. The provinces are projected to receive a record Rs8.2 trillion from the federal divisible tax pool in the upcoming fiscal year.â€ The minister termed tariff rationalization as a â€œmajor and important stepâ€ in aligning Pakistanâ€™s trade and industrial policy with global standards. The initiative, he said, marks the beginning of a phased plan towards a simplified tariff regime, ultimately targeting an average tariff rate of just over 4 per cent. â€œOverall, there are 7,000 tariff lines. Additional customs duty has been removed on 4,000 lines, and in 2,700 of those, the customs duty has also been reduced,â€ the finance minister stated. â€œOf these, around 2,000 tariff lines are directly linked to raw materials and intermediary goods used by exporters. This is a structural reform that has not been undertaken in the past 30 years. This is a huge step, and we are committed to taking it forward graduallyâ€, Aurangzeb added. The governmentâ€™s broader goal, according to Aurangzeb, is to reshape Pakistanâ€™s tariff architecture in a way that supports industrial growth and integrates the economy more deeply into global supply chains. Highlighting the significance of the policy shift, Aurangzeb said the reduction and elimination of customs duties on thousands of tariff lines will enable more efficient allocation of both capital and human resources within the economy. The reforms are designed to gradually replace import substitution with export promotion, a pivot the government considers essential for addressing Pakistanâ€™s recurring balance of payments crises and dollar liquidity pressures. He said that the government has offered as much relief as possible to the salaried class within the constraints of available fiscal space. â€œThis is the direction of travel, where do we want to take the salaried class. Different slabs, including at the highest levels, have been carefully considered. From both my perspective and the Prime Ministerâ€™s, we provided as much relief as the fiscal space allows,â€ Aurangzeb said. He said the minimum wage would remain at its current level, Rs37,000, adding that it should be viewed in the context of inflation. â€œGo to the industries and get their feedback on minimum wage. I think we are in a good place,â€ he asserted. Responding to criticism over salary hikes, the finance minister said, â€œIf we talk about raising salaries of government employees, then ministersâ€™ salaries should also be reviewed.â€ He pointed out that the salaries of the Senate chairman, deputy chairman, National Assembly speaker, and deputy speaker were recently increased. When questioned about whether their salaries had been raised from Rs250,000 to Rs2.15 million per month, the minister remarked that the focus should be on when ministers, ministers of state, and parliamentarians last received a salary adjustment. â€œThe cabinet ministersâ€™ salaries were last increased in 2016. If a salary raise had been made annually, the recent hike would not seem so high,â€ he explained. He also pointed to the phased reduction of the super tax on mid-sized corporations as part of the governmentâ€™s commitment to improving the business climate. â€œEven if itâ€™s just a 0.5 percent reduction, it sends an important signal to the market,â€ Aurangzeb contended. The government, he said, announced a series of targeted reforms in the construction and agriculture sectors aimed at reducing transaction costs, supporting affordable housing, and ensuring credit access for small farmers. While overall tax liability has not been reduced, the government restructured the system to lower transaction costs, particularly for buyers, he claimed. To a question, the minister said, the increases in salaries and pensions were directly linked to the headline inflation, Consumer Price Index (CPI), ensuring adjustments reflect inflationary pressures. Aurangzeb said that pensions would now be linked to a Contributory Based Index (CBI) to ensure long-term sustainability. â€œWorldwide, pensions and salaries are adjusted with inflation. We are adopting the same principle,â€ he added. Replying to a question regarding the contributory system for armed forces, Secretary Finance said that meetings were held with Defence Ministry in this regard, however, it was agreed that they could not be treated the same way on account of different terms of retirement period. Aurangzeb said no tax has been levied on fertilizers and pesticides which was negotiated with the IMF on the directions of Prime Minister Shehbaz Sharif as the administration regards these items as critical inputs for agriculture. â€œAgriculture has been, and will remain, the backbone of our economy,â€ he said, adding that greater federal policy coordination is needed on devolved subjects like seed technology, mechanization, and agri-financing. He pointed to a modest 1.9 percent rise in government expenditure, crediting prudent financial management and stated that despite inflation, the government managed to contain subsidies and reduce debt servicing, while selectively increasing spending, where necessary, for national priorities. Aurangzeb stressed on the need to end protectionism, increase productivity and reduce the price of raw materials so that not only textiles but every exporting sector benefits. Responding to a question the finance minister said that the first installment of Eurobonds worth $500 million was due in September, while the next was due in March. â€œWe are prepared and willing to payâ€, he added. The minister reiterated his hopes of Pakistan launching yuan-denominated Panda bonds this year, adding that credit enhancement through the Asian Development Bank and the Asian Infrastructure Investment Bank was in progress. Copyright Business Recorder, 2025

Date: 2025-06-12

Details: KARACHI: The federal government has allocated Rs 5 billion in the budget FY26 for a mark-up subsidy under a low-cost housing scheme, to be launched in collaboration with the State Bank of Pakistan (SBP) in the next fiscal year, aimed at enabling individuals to build homes through affordable credit. The federal government has announced a number of incentives and positive measures for the construction sector and housing sector in the next fiscal year budget. Previously, an affordable housing finance scheme titled â€œMera Pakistan Mera Gharâ€ was abruptly suspended in June 2022, by the federal government to cut the subsidy expenditures and since then, no new affordable housing initiative has been introduced. Housing finance schemes: Pakistan govt ready to offer 100% guarantees to banks Now, aimed to address the housing shortage in the country and support the housing and construction sector, Finance Minister Muhammad Aurangzeb has announced a new housing scheme in the upcoming budget. As per the budget proposals for FY26, a proportionate tax credit will be given on the profit paid on loans obtained for the construction or acquisition of a house measuring up to 250 square yards or a flat with an area of 2,000 square feet or less. Accordingly, an amount of Rs 5 billion has been allocated in the budget FY26 for mark-up subsidy for low-cost housing. In addition, Rs 1 billion has been allocated as subsidy to Naya Pakistan Housing Authority (NPHA). Experts have warmly welcomed the initiatives announced in the federal budget aimed at revitalizing the housing and construction sector, calling them timely, progressive, and essential for Pakistanâ€™s economic revival. Dr Anosh Ahmed, a US-based real estate consultant has applauded the government for recognizing the sectorâ€™s critical role in national economic growth, employment generation, and industrial development. He noted that the construction industry serves as a backbone for numerous allied industries, including cement, steel, electrical equipment, and home furnishings. â€œA strong construction sector leads to stronger industrial output and job creation across multiple value chains,â€ he said. He particularly praised the government decision to reduce the rate of withholding tax on property purchases from 4 percent to 2.5 percent, from 3.5 percent to 2 percent, and from 3 percent to 1.5 percent. He emphasized that these reductions will ease the financial burden on investors, builders, and homebuyers, making real estate transactions more viable and attractive. In addition, he welcomed the proposed abolition of the 7 percent Federal Excise Duty on the transfer of commercial properties, plots, and houses, calling it a decisive step toward removing structural barriers and encouraging real estate investment. â€œThe introduction of tax credits schemes would support middle-income families and encourage the development of low-cost housing schemes,â€ he added. He further endorsed the governmentâ€™s plan to promote mortgage financing through a comprehensive system, supported by a dedicated policy from the State Bank of Pakistan. Copyright Business Recorder, 2025

Date: 2025-06-12

Details: ISLAMABAD: Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial Wednesday said tax has been imposed on digital platforms after serious concerns of formal retail sector paying sales tax as well as income tax on sales of goods. During post-budget press conference held on Wednesday, the FBR chairman clarified that 2.5 per cent tax would be applicable on income slab between Rs600,000 and Rs1.2 million under revised salary slabs. The tax rate of one per cent has been mentioned in the Finance Bill 2025-26. Taxing the digital frontier: Pakistanâ€™s bold move to tap e-commerce and online revenues Over Rs100 billion worth digital invoicing sales have been reported to the FBR. Sales through digital invoicing needs strong deterrence under self-assessment scheme. The integration of sales tax registered persons has been started through authorised integrators including Pakistan Revenue Automation Limited (PRAL). The FBR chairman stated that the country is moving towards digital economy. Formal retail sector is paying all kinds of taxes as compared to undocumented online companies engaged in selling of goods and paying no taxes. All Pakistan Retail Association has complaint to the FBR that the market of the documented sector has been at the verge of collapse due to informal sector. They are at a disadvantage of paying 18 per cent sales tax as compared to informal sector. The level playing field has been restored through the Finance Bill. Two percent tax of gross value of supplies would be applicable on persons supplying digitally ordered goods from within Pakistan through online market place, website and software applications. The FBR chairman stated that the board has included all taxable activities to incorporate digitally ordered taxable goods into the e-commerce sales tax framework. Presently, online marketplaces are required to withhold one percent sales tax on local supplies made by non-active taxpayer vendors. However, this does not fully capture the growing e-commerce sector, especially businesses using websites, apps, etc, for online sales to consumers. To address this, the withholding tax scope has been expanded to cover transactions settled via online payment or CoD. Under the proposed regime, payment intermediaries (banks, financial institutions, exchange companies, and payment gateways) will collect sales tax on digital payments, while couriers will handle tax collection for CoD transactions. Additionally, the withholding tax rate is set to increase from one per cent to two per cent. Under the Finance Bill 2025, in the case of supply of digitally ordered goods by online market place, website and software application from within Pakistan during the course of e-commerce, the liability tocollect and pay tax shall be of payment intermediary including a banking company, a financial institution, licensed exchange company or payment gateway in case the payment is made digitally and of the courier delivering the goods where those are supplied on Cash on Delivery (CoD) basis at the rates provided in the Eleventh Schedule. The FBR chairman also stated that sales tax has been imposed on the import of solar panels to create an enabling environment for domestic manufacturing industry. The FBR Member Inland Revenue (Policy) stated that domestic e-commerce covers a number of e-stores operating outside the formal banking system. They sell goods through Bykea and websites. The FBR has chalked out a domestic e-commerce framework for small and medium businesses selling goods through websites or online. A simple regime has been introduced for payment of tax through couriers and banks with final discharge of tax liability. The FBR Member said that four items have been included in the Third Schedule of the Sales Tax Act to check under-invoicing on the import of chocolates, pet food and imported cereal bars in retail packing. The FBR chairman stated that the non-profit organisations would go through strict scrutiny under the Finance Bill 2025-26. The FBR has laid down very strict conditions for the NPOs for availing exemption. Now the NPOs have to prove that they are not engaged in commercial activities. In future, we would review performance and scrutinise NPOs. Pointing out that globally non-profit organisations were not subjected to tax measures, Langrial said, â€œNo organisation will be exempt from scrutiny in the future.â€ Under the Finance Bill 2025-26, the FBR has listed entities granted complete exemption on any income and exemption subject to Section 100C provision respectively have been merged. Now all entities require approval under Section 100C to be declared as non-profit organisation and availing exemption against income.

Date: 2025-06-12

Details: ISLAMABAD: Finance Minister Muhammad Aurangzeb has stated that maximum possible relief has been provided to low- and middle-income earners in the 2025-26 budget. He said the government may be forced to impose additional taxes worth Rs400â€“500 billion if it fails to meet revenue targets through enforcement of existing budgetary measures taken in the Budget 2025-26. In an exclusive interview on AAJ TVâ€™S SPOT LIGHT WITH MUNIZAE JAHANGIR, Aurangzeb emphasized that the FY26 budget is focused on enforcing already announced measures rather than introducing new ones. â€œIt (budget FY26) is less about additional measures. It is more about the enablement around enforcement,â€ the finance minister said. He projected that the government plans to generate Rs389 billion in additional revenue in FY26 through improved enforcement. Budget 2025-26: Pakistan govt offers tax relief to salaried class, but representatives unhappy â€œIf some of those things (collection through enforcement) donâ€™t move forward then I think we all have to agree that we have to impose additional taxes of Rs400â€“500 billion. There is a very clear trade-off,â€ he said. Aurangzeb, who has repeatedly highlighted the economic burden of pensions, particularly the over Rs1 trillion paid annually from the national exchequer, revealed ongoing discussions with the Ministry of Defence to reform military pensions. â€œThe service structure in the military stands entirely different from the one in the civil bureaucracy. They retire in 30â€“35 years. So the discussion (for military pension reforms) with them is in progress in terms of how we take it forward,â€ he said. â€œWe have increased pensions across the board including civil bureaucracy. At the same time, we have initiated pension reforms, starting from the civil bureaucracy starting from July 1 last year.â€ The finance minister also disclosed that Prime Minister Shehbaz Sharif will soon announce additional financial resources to address Pakistanâ€™s water scarcity. This will be over and above the Rs133 billion already allocated in the FY26 budget for water availability. â€œWater has been weaponized by India,â€ he claimed. He added that allocations made for the Diamer-Bhasha and Mohmand dams are aimed at enhancing Pakistanâ€™s water storage capacity. â€œWe are 15â€“30% short on the threshold of the required water storage capacity,â€ he said. â€œIn the next coming day, you will hear a specific announcement (on new allocation for water availability) coming directly from the Prime Minister.â€ Aurangzeb also responded to criticism that governments have failed to tax the agriculture sector, clarifying that provinces have already enacted legislation in this regard. â€œThe (agriculture tax) collection is to be started from July 1,â€ he said. He acknowledged that the federal government should have maintained a buffer stock of wheat for food security, but remained committed to withdrawing state intervention from the agriculture market. â€œWe expect revival in major crops (like cotton, wheat, maize, sugarcane, rice) and see rebound in agriculture next year,â€ he said, while defending the governmentâ€™s move to stop procuring strategic reserves and announcing support prices. â€œThe government has no intervention in rice and maize. It has to come out from sugar and wheat as well. We have to look forward. We have to invest in storage capacity building and electronic warehouses. The Punjab government is taking the lead. The entire value chain should be deregulated and we are on the way.â€ Despite a 13.5% decline in major crops, Aurangzeb said that the livestock and poultry sectors have performed well in FY25. Commenting on Pakistanâ€™s relationship with international creditors, Aurangzeb confirmed that the FY26 budget aligns with discussions held with global financial institutions, including the International Monetary Fund (IMF), under the ongoing $7 billion Extended Fund Facility. He also revealed that the government agreed with the IMF not to impose previously considered taxes on pesticide and fertilizer in FY26. Addressing concerns in the real estate and construction sectors, Aurangzeb explained recent tax changes: â€œWe have lowered taxes for buyers through removing FED (Federal Excise Duty), but simultaneously increased tax for sellers in the same way as capital gains tax.â€ He clarified that removing the 7% FED on property transactionsâ€”originally levied on food, not constructionâ€”reduces the transaction cost for buyers, while increased capital gains tax on sellers ensures no revenue loss for the government. The finance minister also hinted at further relief in electricity prices. â€œThe government has already reduced energy prices by Rs7 per unit and more price cuts in the energy sector are expected ahead,â€ he said.

Date: 2025-06-12

Details: ISLAMABAD: Pakistan is aiming to sharply increase economic growth under its annual federal budget unveiled on Tuesday, but analysts are sceptical about the countryâ€™s ability to meet its ambitious goals. The budget targets higher revenues and a steep fiscal deficit cut under International Monetary Fund (IMF) backed reforms. Yet, defence spending was hiked 20%, excluding military pensions, after last monthâ€™s conflict with India. Finance Minister Muhammad Aurangzeb said in a post-budget press conference on Wednesday that customs duties have been cut or removed on thousands of raw materials and intermediate goods. â€œIndustry here has to be competitive, competitive enough to export,â€ he said. But growth drivers remain unclear. The government is targeting 4.2% GDP growth in fiscal 2026, up from 2.7% this year, which was revised down from an initial 3.6% as agriculture and large-scale manufacturing underperformed. â€œPakistanâ€™s GDP growth projection of 4.2% appears ambitious given recent performance, and overly optimistic assumptions may place tax targets out of reach,â€ said Callee Davis, senior economist at Oxford Economics. Key highlights of Pakistan budget for 2025-26 Pakistanâ€™s past growth spurts were consumption-led, triggering balance-of-payments crises and IMF bailouts. The government says it now wants higher-quality, investment-driven growth. Aurangzeb said structural reforms are underway, pointing to East Asia-style pro-market transitions. â€œThis is an East Asia moment for Pakistan,â€ he said. The 17.57 trillion rupee ($62.24 billion) budget comes as Pakistan remains under a $7 billion IMF programme. Revenues are projected to rise over 14%, driven by new taxes and broadening the tax base. The fiscal deficit is targeted at 3.9% of GDP, down from this yearâ€™s 5.9%. Income tax calculator for FY 2025-26 Key reforms include taxing agriculture, real estate, and retail, and reviving stalled privatisations. But revenue shortfalls this year have raised doubts, with both agriculture income tax and retail collections missing targets. Only 1.3% of the population paid income tax in 2024, government data shows. â€œPakistanâ€™s budget keeps the IMF and investors happy, even if it comes at a near-term cost to growth,â€ said Hasnain Malik, head of equity strategy at Tellimer. â€œThe political setup, with the military firmly in charge, also lowers the risk of protests.â€ While overall spending will fall 7%, defence will rise after the worst fighting between the nuclear-armed neighbours in decades. Including pensions, defence spending will total $12 billion, 19% of the federal budget or 2.5% of GDP, matching Indiaâ€™s share, per World Bank data. The hike was enabled by a sharp drop in interest payments, as the central bank cut policy rates from 22% to 11% over the past year, easing domestic debt servicing costs. Aurangzeb said cuts in subsidies also helped create fiscal space.

Date: 2025-06-12

Details: EDITORIAL: Among the many glaring challenges that the budget document has thrown up, the enduring burden of unemployment â€” particularly youth unemployment â€” stands out as a critical concern, reflecting both a sluggish job market and inadequate policy response to the needs of a growing workforce. As reported by the Economic Survey 2024-25, the unemployment rate stands at 6.3 percent, with the situation especially troubling for youth aged 15-24, among whom joblessness reaches 11.1 percent. This cohort represents nearly 45 percent of all jobseekers, underscoring the scale of the challenge. The crisis is deepened by stark gender disparities â€” 14.4 percent of young women are unemployed compared to 10 percent of young men â€” as well as a persistent mismatch between the skills imparted through education and those demanded by the labour market, leaving many young people unprepared for available opportunities. However, far from mounting a focused and determined effort to address unemployment and underemployment, the issue continues to be met with persistent neglect by policymakers. In fact, the scale of the neglect can be judged by the fact that even before meaningful solutions can be crafted, the government has failed in as basic a task as providing an accurate picture of the problem as the unemployment figures cited in the Economic Survey rely on outdated figures from the 2020-21 Labour Force Survey. As reported in this newspaper, the reason given for the failure to calculate more up-to-date figures was the delay caused by the Pakistan Bureau of Statistics undertaking the 7th Population and Housing Census. That exercise, however, concluded two years ago, and one would have expected that a challenge as fundamental to Pakistanâ€™s economic future as unemployment would have commanded greater urgency by our economic managers. The delay in addressing the data gap underscores a broader inertia in policy thinking around how to confront the unemployment crisis. The least the government could have done for the upcoming fiscal year was to come up with a comprehensive plan aimed at bridging the countryâ€™s substantial skills deficit. This could have encompassed meaningfully incentivising the establishment of polytechnic institutes and vocational training centres across the country. Moreover, there could have also been a focus on encouraging the corporate sector to take an active role in developing structured apprenticeship and training programmes that equip young individuals with market-relevant skills through hands-on, on-the-job experience. It is vital to understand that without serious investments in technical education and adult vocational training, any attempt to address unemployment in Pakistan will remain superficial. Polytechnic institutes, in particular, have the potential to play a critical role in preparing a workforce aligned with the evolving demands of industry by offering practical alternatives to traditional academic tracks and opening viable employment pathways for millions of young Pakistanis who are currently being left behind by the system. Properly developed, vocational training and polytechnic institutes can prove to be transformative by offering youth a path to economic empowerment and meaningful inclusion in the workforce, while simultaneously boosting industrial competitiveness and productivity. Beyond skills development, any strategy to tackle unemployment must also target the SME sector, which is inherently labour-intensive and largely informal. Here, the priority must be to incentivise its shift to the formal economy, unlocking its access to banking finance, which could prove crucial both for the growth of these businesses and their capacity to create jobs. Simultaneously, investments in labour-intensive sectors such as agriculture, construction and manufacturing are essential to absorb a growing workforce, while encouraging digital entrepreneurship could also serve as a key driver of job creation, particularly among the youth. Ultimately, equipping the workforce with skill sets and education that reflect market demand coupled with fostering an environment conducive to private sector-led job creation will be vital for addressing the countryâ€™s significant employment gaps. Copyright Business Recorder, 2025

Date: 2025-06-12

Details: 7. Agriculture, livelihoods, and forests: climate impacts and systemic constraints Agriculture remains the backbone of Khyber Pakhtunkhwaâ€™s rural economyâ€”contributing 30% of provincial GDP and employing 32% of the labour force. KP hosts 45% of Pakistanâ€™s forest cover and contributes over 50% to the countryâ€™s carbon sinkâ€”yet receives little recognition or fiscal compensation for its stewardship role. Forest conservation, reforestation, and sustainable land-use initiatives remain underfunded and excluded from federal climate finance frameworks. Beyond the divide: rethinking federal-provincial collaboration for economic transformationâ€”I Despite constitutional devolution, KP lacks the fiscal autonomy and institutional access to key instruments such as green climate funds, carbon markets, and agricultural risk insurance schemes. Without flexible financing, targeted climate adaptation resources, and greater programmatic authority, the province remains constrained in addressing both the short-term needs of farmers and the long-term challenge of climate change. 8. Misaligned policies and data disconnect One of the gravest flaws in Pakistanâ€™s fiscal governance is the siloed preparation of budgets. Federal and provincial budgets are formulated in isolation, without integrated data or joint economic planning. Decisions like changes in property taxation, sales tax, etc., are taken unilaterally by the federal government, with little regard for provincial fiscal autonomy or local economic realities. The Pakistan Bureau of Statistics (PBS), central to data generation, remains under federal controlâ€”leaving provinces dependent on potentially outdated or misaligned datasets for planning and investment. 9. Rethinking the NFC: misaligned incentives and a disconnected federation The current National Finance Commission (NFC) Awardâ€”structured predominantly around population size â€” has become increasingly disconnected from Pakistanâ€™s development needs and federal realities. Provinces like Punjab and Sindh, by virtue of their demographic weight, receive nearly 80% of the divisible pool. In contrast, regions such as Khyber Pakhtunkhwa (KP), Balochistan, Gilgit-Baltistan, and Azad Jammu & Kashmir â€” despite facing deeper development deficits, climate vulnerability, and regional instability â€” remain chronically underfunded. Khyber Pakhtunkhwa exemplifies this imbalance. The province that hosts over 1.5 million Afghan refugees has absorbed the Ex-FATA region without corresponding fiscal adjustment, and accounts for 45% of Pakistanâ€™s forest cover. Its vital contributions to national security, environmental preservation, and humanitarian burden-sharing go largely unrecognized in the current NFC formula. By rewarding population growth over economic performance, resilience, or service delivery, the NFC structure not only neglects disadvantaged regions but also distorts provincial incentives. International modelsâ€”such as Vietnamâ€™s capped population shares and performance-linked transfersâ€”offer more equitable frameworks, aligning resource allocation with outcomes rather than demographics alone. Efforts to reform the fiscal compact have been insufficient. KPâ€™s National Dialogue on the NFC in February 2025 signaled an intent to revisit the distribution model, but the absence of key federal and provincial actors reflected a broader lack of political will. The debate over vertical and horizontal allocations remains hostage to entrenched interests, especially in larger provinces that dominate federal politics. Federal fiscal policies further compound the imbalance. IMF-mandated surplus targets require provinces to underwrite federal deficits, while unfunded mandatesâ€”such as the devolution of higher education, social protection, and climate adaptationâ€”shift responsibilities to provinces without the resources or autonomy to meet them. These gaps between constitutional obligations and fiscal reality are growing wider. If Pakistan is to function as a true federation, the NFC must evolve. A reformed framework should account for provincial contributions to national stability, equity, and long-term developmentâ€”not just population figures. Until then, regions like KP will continue to carry disproportionate burdens, with limited fiscal space to realize their full potential. 10. Toward a functional federation: empowering provinces, energizing Pakistan Khyber Pakhtunkhwaâ€™s experience offers a window into a broader national truth: Pakistanâ€™s progress is only as strong as the sum of its provinces. Yet today, provinces are expected to deliver on national priorities without the authority, autonomy, or tools to do so. Fiscal transfers alone are not enough. What Pakistan needs is a new federal compactâ€”one that shifts from control to coordination, from entitlement to performance. The National Finance Commission (NFC) Award must evolve to reward results, resilience, and resource stewardshipâ€”not just population size. Provinces should have the power to issue bonds, tap into international climate and diaspora finance, and generate their own revenues. Control over key sectorsâ€”energy, minerals, tourism, trade logisticsâ€”must be operationally devolved, backed by institutional coordination rather than political gatekeeping. Federal planning must reflect provincial realities, not override them. KP has shown initiativeâ€”reforming regulations, attracting investors, and pushing innovationâ€”but its efforts remain stifled by a system that doesnâ€™t keep pace. To unlock Pakistanâ€™s full potential, we must empower its provincesâ€”not just with mandates, but with the means to lead. 11. Conclusion: expand the pie, donâ€™t just fight over slices â€” unlocking Pakistanâ€™s true potential Pakistanâ€™s future wonâ€™t be won by provinces fighting over shrinking slices of a fixed pie or by a federal system that clings to outdated formulas. Instead, real progress will come from expanding the pieâ€”by empowering provinces to unlock their unique strengths, invest boldly, and drive growth that benefits all. Khyber Pakhtunkhwaâ€™s story is a powerful reminder: itâ€™s not a tale of dependency or deficit, but of immense potential held back by an inflexible system. Despite bearing heavy burdensâ€”from hosting millions of refugees to safeguarding nearly half of Pakistanâ€™s forestsâ€”KP remains shackled by fiscal constraints and limited autonomy. Imagine the possibilities if these provinces were trusted to lead their own growth with the tools and resources they deserve. The National Finance Commission must transformâ€”from a zero-sum contest focused on population numbers to a dynamic framework that rewards innovation, resilience, and results. Provinces should be architects of their own destinies, empowered to build infrastructure, attract investment, and pioneer solutions aligned with national goals. This is not just a fiscal debateâ€”itâ€™s a call for a new social contract: a federation that shares opportunities, not just resources; a Pakistan where every province sees itself not as a burden, but as a vital partner in shaping a prosperous, sustainable future. The true test of federalism lies in creating an ecosystem where provinces grow not in spite of the system, but because of it. Reform the structure, and provinces like KP wonâ€™t just surviveâ€”they will thrive and lead Pakistan toward green growth, enhanced regional trade, and lasting unity. The road ahead demands courage and vision. But if Pakistan can embrace a federation that trusts its provinces, values their contributions, and grows the pie together, the promise of inclusive, resilient development will finally be within reach.

Date: 2025-06-11

Details: ISLAMABAD: To immediately recover disputed tax from taxpayers, the federal government has drastically reduced time period for the recovery of tax arrears when a high court rules in favor of the tax department. Through Finance Bill 92025-26), the Federal Board of Revenue (FBR) has introduced a significant amendment to the Income Tax Ordinance, 2001. The amendment, specifically a new subsection added to Section 140 of the Ordinance, stipulates that tax payable under an assessment order will become immediately recoverable, or within the time specified in a notice issued by the income tax authority, irrespective of timelines in other provisions or court judgments. This accelerated recovery is triggered when a tax issue is decided by a High Court or the Supreme Court of Pakistan. A crucial proviso within this new subsection clarifies the immediate impact on appeals: â€œProvided that where the High Court decides the appeal filed by the Commissioner in favor of the department under section 133, recovery shall be made after seven days from the date of the order of the High Court.â€ This means that if a Commissionerâ€™s appeal against a taxpayer is upheld by the High Court, the tax arrears will become recoverable within a mere seven days from the date of the High Courtâ€™s order. FBR is expected to issue further guidelines on the implementation of this amended section, particularly concerning the issuance of recovery notices and the procedures for taxpayers to adhere to the compressed timeline. Tax professionals and businesses are advised to carefully review their litigation strategies and prepare for swifter recovery actions in light of this new legal provision. When contacted, tax lawyer Waheed Shahzad Butt stated that earlier new amendments introduced through the Tax Laws (Amendment) Ordinance, 2025 have ignited controversy across legal and tax circles, as they grant sweeping powers to tax officers to recover taxes without issuing prior notice to taxpayers. Mr. Butt warned that such unchecked powers could erode public trust in the tax system and potentially lead to abuse. This will undermine the neutrality of the taxation system and promote tax robbery moves rather than genuine tax recovery. IHC has earlier ruled that a notice under Section 138, is mandatory before initiating any coercive tax recovery action under Section 140.

Date: 2025-06-05

Details: The National Economic Council (NEC) on Wednesday unanimously approved six-agenda items, including national development budget worth Rs4.224 trillion for the next fiscal year (FY26), RADIO PAKISTAN reported. The approval was granted at the NEC meeting held in Islamabad with Prime Minister Shehbaz Sharif in the chair and with all the four provincial chief ministers of Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan in the presence. It was told that Rs1 trillion would be earmarked for the federal and Rs2.87 trillion for the provincial development projects. Unregistered taxpayers: 4% â€˜further sales taxâ€™ to be abolished The forum also approved macroeconomic framework and targets for the next fiscal year. The council directed relevant ministries, provinces, and government institutions to work in collaboration with the Ministry of Planning to achieve the targets set in the proposed annual plan for 2025-2026. The development projects would prioritise health, education, infrastructure, the water sector, and housing, RADIO PAKISTAN reported. The NEC gave approval to the 13th five-year development plan and the Uraan Pakistan Framework, it said. As per the details, a third-party monitoring report on the annual National Development Programme was presented, and the meeting decided that future project planning should incorporate the recommendations of the report. The NEC also approved a gross domestic product (GDP) growth rate of 2.7% for the outgoing fiscal year and a projected growth rate of 4.2% for the next financial year. During the meeting, revised indicators regarding the performance of the economy in outgoing fiscal year 2024-25 were presented. The meeting was informed that Rs3.483 trillion was being spent on the annual national development, of which Rs1.100 trillion was share of the federation and Rs2.383 trillion was the share of provinces. Budget talks with IMF successful: PM Shehbaz The meeting was told that remittances increased by Rs30.9% from July 2024 to April 2025 and the current account balance remained positive for the first time. The fiscal deficit in the year 2024-25 further decreased to 2.6% of the GDP, while the primary balance remained 3% of the GDP after increase. The policy rate gradually decreased to 11% due to government policies, while loans given for private sector development increased to Rs681 billion from July 2024 to May 2025. The volume of GDP in 2024-25 will be Rs114 trillion.

Date: 2025-06-05

Details: KARACHI: The Value-Added Textile Associations Forum, representing various apparel and textile bodies, jointly held a press conference on Wednesday, demanding the continuation of the Export Facilitation Scheme (EFS) in its original form as introduced in 2021, without any amendments made in the Federal Budget 2024-2025. The presser held at PHMA House with leaders of different textile associations strongly opposing the imposition of Sales Tax at the import stage under the scheme, warning it would undermine the purpose of facilitating exporters. The forum called on the Government of Pakistan to continue the scheme under section 880(1)(b) of SRO 957(I)/2021, which allows local input goods liable to sales tax to be supplied against zero-rated invoices. This provision, they said, ensures liquidity, competitiveness, and formalization across the export-oriented industry value chain. â€œEFS is inevitable and a lifeline for enhancing national exports,â€ the associations declared in a unified voice. They urged the reinstatement of local procurement under the scheme to support the entire textile value chain, enabling a level playing field and a win-win for all stakeholders. Export Facilitation Scheme be retained in FY26 budget They explained that the scheme was launched in 2021 after wide consultation with stakeholders to simplify and streamline export procedures. EFS merged all previous schemes into one, reduced documentation requirements, and introduced a single-window digital system through WeBOC and Pakistan Single Window (PSW). The fully automated system includes real-time audits and helps regulate compliance costs. According to the forum, since its inception, the EFS has played a crucial role in easing liquidity pressures and supporting exportersâ€™ competitiveness. The press conference was addressed by leaders including Jawed Bilwani (Chief Coordinator, Value-Added Apparel & Textile Associations Forum), Muhammad Babar Khan (Central Chairman, Pakistan Hosiery Manufacturers & Exporters Association), Ijaz Khokhar (Former Chairman, Pakistan Readymade Garments Manufacturers & Exporters Association), Rafiq Godil (Former Chairman, Pakistan Knitwear & Sweater Exporters Association), Farooq Rahman Dittu (Pakistan Cotton Fashion Apparel Exporters Association), Ather Bari (Chairman, Towel Manufacturers Association), Irfan Merchant (Chairman, Denim Manufacturers & Exporters Association), Khurram Mukhtar (Former Chairman, Pakistan Textile Exporters Association), Hamid Arshad Zahur (Chairman, Pakistan Tanners Association), and other representatives from major exporting cities including Karachi, Lahore, Faisalabad, and Sialkot. Jawed Bilwani stressed that EFS has been critical in supporting not only textiles but other export sectors as well. He pointed out that all associations, including APTMA, initially welcomed EFS. In an Inter-Ministerial Committee chaired by Planning Minister Ahsan Iqbal, APTMA representatives agreed that the scheme should continue in its original form. However, APTMA later parted ways and demanded the imposition of Sales Tax at the import stage under EFSâ€”a move that Value-Added Associations rejected strongly. He warned that imposing Sales Tax at the import stage would defeat the very objective of EFS, causing severe liquidity issues and harming exportersâ€™ competitiveness. Bilwani also revealed that APTMA, in the same committee meeting, admitted their yarn qualityâ€”produced from contaminated local cottonâ€”is not on par with imported yarn. He stated that even the top 100 textile exporters, including composite units under APTMA, support the continuation of EFS in its original form with local procurement allowed on zero-rated invoices. He added that the upcoming federal budget should also include the reinstatement of Regionally Competitive Energy Tariffs and Final Tax Regime (FTR) to ensure financial viability and export growth. Speaking at the press conference, PHMA Central Chairman Muhammad Babar Khan rejected APTMAâ€™s â€œmisleadingâ€ demand to impose Sales Tax at the import stage under EFS. He said that spinning is only a sub-sector of the textile industry, while the value-added sector remains committed to supporting the entire value chain. He urged the Government to create policies that benefit all textile sub-sectors equally, from garments to spinning and ginning. Babar Khan highlighted that rising manufacturing costs have hurt all textile sectors. The apparel and garment sector contributes the highest value addition, up to 70 percent, and needs EFS to remain unchanged to stay competitive. He questioned why APTMA, after supporting EFS from 2021 to February 2025, has suddenly changed its stance. He urged APTMA to drop their unjustified demand for Sales Tax at import-stage and return to supporting the reinstatement of local procurement in the scheme. Babar Khan recalled the key strengths of EFS: a strategic and fully automated system built with input from all textile associations to reduce compliance burdens and simplify export operations. The scheme offers end-to-end traceability and operates in a fully digital environment through WeBOC and PSW. The association leaders agreed that countries like Bangladesh and Vietnam also rely heavily on imported raw materials to manufacture export garments. Their governments offer facilitation schemes similar to EFS, making it crucial for Pakistan to maintain parity. They stated that collecting Sales Tax from exports only to refund it later serves no real purpose and often leads to long refund delays, further straining exportersâ€™ liquidity. They emphasized that EFS should remain unchanged and that the FBR should focus on expanding the tax base instead of burdening existing exporters. Exportersâ€™ Sales Tax refunds have already been delayed for months, and adding more taxes will only increase their hardships. The associations repeated their firm demand to continue EFS in its original form as of 2021â€”before the 2024-2025 Federal Budgetâ€”with local procurement allowed under section 880(1)(b) of SRO 957(I)/2021, which permits local input goods subject to Sales Tax to be supplied against zero-rated invoices. This, they said, is necessary to ensure liquidity, competitiveness, and formalization of the export value chain. The continuation of EFS in its original form has also been recommended by the Inter-Ministerial Committee chaired by the Federal Planning Minister, under the Prime Ministerâ€™s direction. Other PHMA representatives present at the event included Former Chairmen Chaudhry Salamat Ali, Farrukh Iqbal, Kashif Zia, Sr. Vice Chairman Hazir Khan (Faisalabad), Former Chairman Shahzad Azam Khan and Zonal Chairman Abdul Hameed (Lahore), Tariq Bhatti and Khawaja Musharraf (Sialkot), PRGMEA Northern Zone Representatives Sohail Afzal and Ayazuddin, and numerous top exporters from Karachi, Lahore, Faisalabad, and Sialkot. Copyright Business Recorder, 2025

Date: 2025-06-05

Details: Islamabad, June 4, 2025 â€“ A new framework has been put forward to bring digital platforms in Pakistan under the tax net. This proposal, presented by the Institute of Chartered Accountants of Pakistan (ICAP), is part of the countryâ€™s upcoming 2025â€“26 budget suggestions. Digital businesses in Pakistan have grown rapidly, especially in the areas of e-commerce and online services. However, many of these digital activitiesâ€”whether operated from within Pakistan or abroadâ€”have remained largely untaxed. The proposed framework aims to address this gap and ensure fair taxation of digital services. According to ICAP, the digital economy in Pakistan is expanding fast, but there are challenges in identifying where these businesses are based and which government authority has the right to tax them. Since services are often delivered through platforms located outside Pakistan or in various provinces, there is confusion over jurisdiction and revenue distribution. To solve this, the framework recommends that all provincial revenue authorities work together to create a unified system. The key proposals include: â€¢ Tracking Services: Developing a proper mechanism to detect and tax services offered by digital platforms. This would involve monitoring digital platforms based in Pakistan and using banks and financial institutions to track payments made to platforms outside Pakistan. â€¢ Revenue Sharing: Creating a fair formula to divide the tax revenue among provinces, based on where the services are consumed. â€¢ Unified Filing: Allowing service providers to submit a single tax return, similar to the Federal Board of Revenueâ€™s (FBR) recently introduced sales tax return system. ICAP explained that without a common framework among provinces, digital services may continue to escape proper taxation. The lack of clarity on whether these services fall under federal or provincial jurisdiction makes the issue even more complicated. The proposed framework is aimed at ensuring digital businesses contribute fairly to Pakistanâ€™s tax base, supporting the countryâ€™s broader efforts to strengthen revenue collection. With Pakistanâ€™s digital economy growing at a fast pace, a coordinated approach is necessary to avoid revenue loss and encourage transparency. If adopted, this framework could play a major role in modernizing Pakistanâ€™s tax system and boosting economic governance.

Date: 2025-06-05

Details: June 5, 2025 Islamabad, June 4, 2025 â€“ The Federal Board of Revenue (FBR) continues to provide detailed data on tax operations to the International Monetary Fund (IMF) as part of ongoing commitments under the Extended Fund Facility (EFF). This regular exchange of information is a critical component of Pakistanâ€™s engagement with the IMF and is aimed at ensuring transparency and sustained progress in revenue collection. The IMF closely monitors FBRâ€™s performance to assess whether Pakistan is meeting the tax revenue targets agreed upon under the EFF. In line with this, the FBR submits comprehensive monthly and quarterly data to the IMF covering all major aspects of its operations. The data shared includes total revenue collected by both the tax and customs administrations. It also covers collections by individual tax categories, including income tax, general sales tax (GST), customs duties, and social contributions. The FBR provides the IMF with monthly updates on tax arrears, categorized by tax type, as well as information on outstanding tax credits. A breakdown of all tax refund claimsâ€”categorized by GST, income tax, and customs dutiesâ€”is also submitted, with particular focus on automated GST refunds. This includes the number of refunds processed automatically, total refund value, and average processing time. Import-related data is also shared regularly. The FBR reports the total value of recorded and duty-paid imports, along with the number of transactions involving taxable and non-duty-free imports. The IMF additionally receives data from the FBR on tax audits, including the percentage of companies selected and revenue identified through audits. The number of new taxpayers is tracked monthly, including those who registered voluntarily and those notified by authorities. Details of the number of tax returns filed and the revenue collected from these new taxpayers are also included. The FBR also shares updates on the digital â€œtrack and traceâ€ system, particularly its implementation across key industries like cigarettes, cement, sugar, and fertilizer. Data includes the number of facilities and machines installed, as well as the revenue collected per facility. By consistently providing this data, the FBR ensures compliance with IMF guidelines and demonstrates Pakistanâ€™s commitment to reforming and strengthening its tax administration under the EFF framework.

Date: 2025-06-04

Details: Sohail Sarfraz ISLAMABAD: The government is all set to take a bold documentation measure to abolish four percent â€œfurther sales taxâ€ on un-registered sales taxpayers and sustain huge revenue loss by registering the entire supply chain of businesses in budget (2025-26). Sources told BUSINESS RECORDER here on Tuesday that the abolition of the four percent â€œfurther sales taxâ€ will result in revenue loss to the Federal Board of Revenue (FBR), but it will be instrumental in registration of the entire supply chain covering dealers, wholesalers and retailers. From manufacturing stage till retail outlets, the entire supply chain would come under the documented regime. The same is the situation with the importers where subsequent supply chain of imported goods are not registered with the sales tax department. Budget 2025-26: KCCI urges govt to expand tax net, targets 4.6mn unregistered entities The un-registered sales tax persons are enjoying the same status of â€œnon-filers of income tax returnsâ€ and carrying out all business transactions by paying higher rates of withholding taxes or further tax on sales tax side. The revenue loss after abolition of the â€œfurther sales taxâ€ would be temporary and revenue gains are much higher in long term period. Through Finance Bill (2025-26), the FBR has proposed amendments in the Sales Tax Act for the documentation of the entire supply chain with the sales tax department. In 2023, the FBR had increased the rate of â€œfurther sales taxâ€ from three to four percent in the amended Finance Bill 2023. Presently, the rate of further tax is four percent on the supplies made to the un-registered persons. The rate of â€œfurther sales taxâ€ was increased by one percent to discourage supplies made to the unregistered persons. If a person intended to remain out of the sales tax net, he is required to pay higher rate of further tax at the rate of four percent. Under the law, the â€œfurther taxâ€ is charged on supplies of taxable goods made by a registered person to a person who has not obtained a sales tax registration number or has obtained a registration number but is not an active taxpayer. The said rate of sales tax under sub-section (1A) of Section 3 of the Sales Tax Act was enhanced to four percent through the Finance Act, 2023. Officials added that the sales tax base totalled between 40,000 to 60,000 who are paying sales tax including those depositing very low amount of sales tax. Copyright Business Recorder, 2025

Date: 2025-06-04

Details: June 4, 2025 Karachi, June 4, 2025 â€“ The Pakistan Chemical and Dyes Merchants Association (PCDMA) has raised serious concerns about difficulties faced by traders in filing their sales tax returns, following a new requirement introduced by the Federal Board of Revenue (FBR). Through SRO 55(I)/2025, the FBR has made it mandatory for all registered commercial importers, distributors, and wholesalers to declare their stock position in Annexure H1 with every monthly sales tax return. However, PCDMA Chairman Salim Valimuhammad said the lack of clear instructions from the FBR has created unnecessary confusion and hardship. He explained that many traders submitted their March 2025 returns without Annex H1 simply because they didnâ€™t understand the process. As a result, theyâ€™re now unable to declare their opening stock for April, and the delay continues even in June. â€œPCDMA has received many complaints from members who are still unable to file their April 2025 returns due to this confusion,â€ Valimuhammad stated. He added that many traders were forced to go back and forth with the FBR for clarification. Eventually, the FBR allowed revised returns without needing to change Annex A or C or seek commissioner approvalâ€”but by then, it was too late for many. To address the issue, PCDMA is urging the FBR to grant traders a 60- to 90-day grace period to submit Annexure H1 after filing their returns. This would be similar to the 120-day window already available to manufacturer-exporters. â€œPCDMA believes that such decisions should be made after proper consultation with trade bodies,â€ Valimuhammad said. He emphasized that timely and clear communication is crucial to ensure compliance and avoid similar problems in the future. PCDMA continues to push for reforms that protect tradersâ€™ interests and promote smoother tax procedures. The association urges urgent action before more disruptions affect business operations, confidence, and overall revenue collection in the coming months.

Date: 2025-06-03

Details: Abdul Rasheed Azad ISLAMABAD: The Annual Plan Coordination Committee (APCC) on Monday recommended the highest-ever national development outlay of Rs4.083 trillion of the countryâ€™s history and a GDP growth target of 4.2 percent for the upcoming fiscal year 2025-26 for the approval of the National Economic Council. The meeting was informed that the proposed National Development Outlay of Rs4.083 trillion for the next fiscal year Rs1 trillion Federal PSDP, Rs288 billion for State-Owned Enterprises (SOEs) investment and Rs2.795 trillion. The APCC met here under the chairmanship of the Federal Minister for Planning and Development Ahsan Iqbal. It was also attended by senior federal and provincial representatives, including secretaries, principal accounting officers, and planning officials from Gilgit-Baltistan (G-B) and Azad Jammu Kashmir (AJK). Ministry seeks Rs1.6trn PSDP: FY26 budget on June 2 The session was convened at a critical juncture as Pakistan seeks to navigate significant economic and geopolitical challenges while continuing to implement its long-term development agenda under URAAN Pakistan. Addressing the participants, the minister emphasized that despite limited fiscal space and competing demands, the government remains fully committed to sustaining development momentum through strategic realignment of resources and policy reforms. He noted that when the current government assumed office in early 2024, it inherited an economic landscape marked by constrained revenues, pressing foreign obligations, and structural imbalances. However, with a clear vision and decisive leadership, the Planning Commission mobilised stakeholders around a common development frameworkâ€”URAAN Pakistanâ€”which aims to transform Pakistan into a $1 trillion economy by 2035 and a $3 trillion economy by 2047. The minister reiterated that the federal government believes that the success of URAAN Pakistan depends on close coordination with provincial governments and the alignment of all tiers of development planning with national priorities. During the meeting all the provinces appreciated Minister Planningâ€™s personal and dedicated efforts for the transparent and collaborative planning process â€” especially the mechanisms put in place to ensure smooth project implementation and timely fund releases. They gave positive feedback on how streamlined approvals are speeding up development and helping deliver results on the ground. Together, Pakistan is building a more connected, efficient, and prosperous Pakistan. During the meeting, a detailed review of PSDP 2024â€“25 was presented. It was noted that the National Economic Council (NEC) had approved a National Development Outlay of Rs3,792.3 billion, which included Rs1,400 billion for the Federal PSDP, Rs2,095.4 billion for Provincial ADPs, and Rs196.9 billion for SOEs. However, due to financial constraints, the federal PSDP was later reduced to Rs1,100 billion. As of 31st May 2025, Rs1,036 billion had been authorized for release, and Rs 596 billion had been utilized. A total of 1,071 projects were included in the PSDP, with an approved cost of Rs13,427 billion, of which Rs3,216 billion had already been spent by June 2024. A throw-forward liability of Rs. 10,216 billion remains, underscoring the urgent need for project rationalization and financial discipline. The minister highlighted that there is a dire need to increase the development budget of the country, which has direct bearing on growth and job creation. However, due to fiscal discipline agreed with IMF government is constrained to not increase PSDP. The only way to increase development spending is to increase the revenues by increasing Tax/GDP ratio from 10 per cent to 16-18 per cent. He said that by being lowest tax paying economy we canâ€™t aspire to grow. Every tax paying citizen must become partner of the government in rooting out the menace of tax theft. The government has undertaken number of reforms to overhaul tax administration. To ensure maximum value for the investment in development sector, the ministry has taken multiple reviews of project performance, including quarterly and mid-year reviews for better investment efficiency. A comprehensive assessment of the ongoing project portfolio was conducted. As a result, over 118 slow-moving or redundant projects, mostly approved at the DDWP level, were recommended for capping or closure, potentially saving Rs1,000 billion and freeing resources for high-impact initiatives. Moreover, the Planning Commission facilitated re-appropriations of Rs84 billion to fast-moving projects and critical interventions, while Rs80 billion were reallocated through TSGs for emergent national priorities such as the solarisation of tube wells in Balochistan. Looking ahead to FY 2025â€“26, the minister announced that the proposed PSDP has been restructured in line with core principles of sustainability, impact, and equity. The Finance Division, after consultations with the IMF, has firmed up an Indicative Budget Ceiling of Rs1,000 billion for the federal PSDP, including Rs270 billion in foreign aid. The PSDP 2025â€“26 portfolios have been developed following extensive consultations with ministries and provinces through Priority Committee meetings and high-level reviews chaired by the Deputy Prime Minister and Advisor to the Prime Minister. The final recommendations reflect a strict prioritisation of ongoing high-impact, foreign-aided, and near-completion projects. In total, 1,120 projects have been included in the proposed PSDP, of which a significant number are designed to be completed within the next 3â€“4 years if fiscal space is maintained. Pakistan faces serious challenge of water security therefore Diamer Bhasha Dam is given top priority. Hyderabad-Sukkur Motorway will be started during 2025-26. Balochistan will get highest share in development funds of nearly Rs250 billion. Sectoral allocations have been finalised with Rs644 billion allocated to infrastructure, including Rs332 billion for transport and communications and Rs144 billion for energy. Rs150 billion has been proposed for the social sector, including Rs63 billion for education and higher education and Rs22 billion for health. Special areas like AJK and GB will receive Rs63 billion, while Rs70 billion has been allocated for merged districts of Khyber Pakhtunkhwa. Science and IT sectors have been allocated Rs53 billion, while Rs9 billion has been proposed for governance. Production sectors, including food, agriculture, and industries, will receive Rs11 billion. In addition, State-Owned Enterprises have submitted development plans amounting to Rs288 billion, with major contributions from entities like WAPDA, NTDC, OGDCL, and others. The minister informed the participants that one of the most serious challenges has been the increasing tension and security risks following the events of May 7, 2025, when hostilities broke out along the eastern border. This conflict has led to increased defence spending requirements and exerted additional pressure on the already limited development budget. He candidly acknowledged the dilemma faced by the government: choosing between critical national defense and the developmental needs of the people. However, he reassured participants that the government remains committed to maintaining a careful balance. The minister stated that the strength of a nation lies not just in its defense capabilities, but also in the health, education, and economic empowerment of its citizens. The government will not allow Pakistanâ€™s development journey to be derailed. Instead, it will adopt innovative planning, smart budgeting, and rigorous monitoring to ensure that the needs of both defense and development are addressed. The APCC also deliberated on critical policy reforms. It endorsed the proposal to stop at-source deduction of Cash Development Loans (CDL) from PSDP funds, as this practice hampers project cash flows and delays implementation. The Committee reiterated the policy that provincial nature projects should be funded by provinces, except in cases involving strategic national interest or implementation in deprived regions. Furthermore, the APCC recommended imposing a moratorium on DDWP-level project approvals during the tenure of the IMF programme, except in exceptional cases with full justification and review by the CDWP. It was also proposed that no development funds be diverted to recurring expenditures during the fiscal year. Ahsan Iqbal reiterated the federal governmentâ€™s unwavering resolve to transform adversity into opportunity. He emphasized that Pakistanâ€™s current economic path, though challenging, is also full of potential. URAAN Pakistan provides the guiding vision, rooted in five core pillars: Exports, E-Pakistan, Energy and Infrastructure, Environment and Climate Resilience, and Equity, Ethics and Empowerment. Through this framework, the government aims to restore public trust, inspire innovation, and unlock economic potential across all sectors and regions. He called upon all stakeholdersâ€”federal ministries, provincial departments, development partners, and the private sectorâ€”to move forward with shared commitment and unity of purpose. He concluded by stating, â€œWe are not just managing a budget we are shaping the future. The world may see limitations, but we see opportunities. Our history is full of moments when the Pakistani nation rose above challenges through resolve and resilience. This is one such moment. Together, let us rise and lead Pakistan towards sustainable development, economic dignity, and national pride. URAAN Pakistan is not just a programmeâ€”it is the spirit of our national ambition.â€ Earlier, talking to journalist Ahsan Iqbal has said that fiscal space will be provided in the next Public Sector Development Program (PSDP) for the projects of strategic importance envisioned under Uraan Pakistan. The minister mentioned that these projects include Diamer Bhasha Dam, Sukkur Hyderabad motorway project, N-25 in Balochistan and Karakoram highway phase two. The minister emphasised the need for greater synergy between the development projects of the center and the provinces for early completion of national priority projects. Ahsan Iqbal said that projects with foreign component and those nearing completion have also been prioritised in the PSDP. He said allocations for special regions such as AJK, Gilgit Baltistan and the tribal districts have also been prioritised. He said that an effort has been made to align the development budget with national priorities while staying within limited resources. Iqbal said that over 118 different projects worth Rs1,000bn were scrapped due to limited resources, adding that the country has to make difficult decisions about limiting the ongoing projects. Only key projects can be prioritised due to limited funds, the planning minister said, adding that the provincial-level projects should now be completed by the provinces themselves. â€œProvinces have far more resources than the federation,â€ he added. The minister said that everyone must play their part in national development. Shedding light on the upcoming budget, the minister said that the economic size target for next year had been set at Rs129 trillion. â€œThis yearâ€™s development budget has been set at Rs1,000 billion,â€ he added. The minister said that Rs150bn had been allocated for the social sector and Rs70bn for KPâ€™s merged districts in the next budget. â€œGDP growth target for the next fiscal year was set at 4.2%,â€ Iqbal said, adding that the target for exports was set at $35bn. Earlier, giving a blueprint of the annual PSDP for the next fiscal year at the APCC meeting, he said that fiscal space will be provided in the next PSDP for the projects of strategic importance envisioned under Uraan Pakistan. He mentioned that these projects include the Diamer Bhasha Dam, Sukkur Hyderabad motorway project, N-25 in Balochistan and Karakoram highway phase two. The minister emphasised the need for greater synergy between the development projects of the Centre and the provinces for the early completion of national priority projects. He said that projects with a foreign component and those nearing completion have also been prioritised in the PSDP. The minister elaborated that the said allocations for special regions such as AJK, Gilgit-Baltistan and the tribal districts have also been prioritised. The minister further said that an effort has been made to align the development budget with national priorities while staying within limited resources. Copyright Business Recorder, 2025

Date: 2025-06-03

Details: Zulfiqar Ahmad ISLAMABAD: Prime Minister Shehbaz Sharif said on Monday that talks with the International Monetary Fund (IMF) over the forthcoming federal budget had been successful, paving the way for a new phase of economic growth. Talking to a select group of journalists, Sharif said the government had stabilised the economy and would now shift its focus toward sustained development. â€œWe have achieved economic stability; now we must embark on the journey of economic development,â€ he said, claiming that no corruption cases had emerged during the current tenure of his Pakistan Muslim League-Nawaz (PML-N) government. IMF disagrees with Pakistan over key targets, subsidies ahead of budget Sharif also signalled readiness to engage in dialogue with India, proposing talks on four key issues: Kashmir, water, trade, and terrorism. â€œPakistan is willing to hold talks anywhere in the world,â€ he said, adding that Indian Prime Minister Narendra Modiâ€™s recent remarks were driven by domestic political pressure. â€œWe have taken our revenge for 1971 from India,â€ Sharif claimed, stating that Pakistan had shot down six aircraft, including four Rafale fighter jets. He further said the government was committed to implementing sustainable reforms across national institutions, aiming to transform Pakistan into a stable and competitive global economy. It is pertinent to mention that the federal budget for the next fiscal year is expected to be a reform-driven, IMF-guided document focused on economic stabilisation, balancing fiscal consolidation with targeted relief. Finance Minister Muhammad Aurangzeb is scheduled to present the budget in National Assembly on June 10, following a delay caused by protracted discussions with the IMF over tax relief. The budget was initially slated for June 2. Development spending under the Public Sector Development Programme (PSDP), originally set at Rs1.4 trillion â€“ including Public-Private Partnership projects â€“ has been revised downward twice, first to Rs1.25 trillion and later to Rs1.096 trillion. Copyright Business Recorder, 2025

Date: 2025-06-03

Details: Dr Hafiz A Pasha Published June 3, 2025 One of the key indicators in the federal budget is the projected level of external financing to partly finance the budget deficit. The expectation in 2024-25 was that there would be total external financing inflow of approximately US$10.3 billion into the federal government account, excluding rollovers. Net of repayment the financing was expected to be US$2.3 billion. The Ministry of Economic Affairs has recently reported on the gross inflows up to the end of April 2025. They have aggregated to US$5.7 billion, equivalent to only 55 percent of the annual target. They should have reached 83 percent of the annual target by the end of April. The biggest shortfall is in commercial loans. The target is US$3.8 billion, whereas the actual loans received aggregate to less than US$0.8 billion. Given the enhanced risk perceptions of lending to Pakistan, it is not surprising that private creditors have reduced their exposure to Pakistan. The surprising outcome is the significant shortfall also in inflows from multilateral development agencies. The Asian Development Bank is, more or less, on target and has disbursed 76 percent of its annual commitment by April. However, the big shortfall is in the inflows from the World Bank. Only 51 percent of the annual target has been met up to April. The IMF Staff Report of the 17th of May, following the first review of the IMF Programme, contains estimates of the likely inflow of external financing by the end of 2024-25. These IMF estimates include the requirements of inflows to the private sector in Pakistan. The good news is that the expectation is of a gross inflow of US$18.9 billion, including rollovers, which will be $2.5 billion above the requirements of amortization of debt. The expectation is that the foreign exchange reserves of the SBP will rise by $4.5 billion by the end of 2024-25. US$2 billion will be the inflow from the IMF, which has already taken place. Consequently, the projection is that by end of June 2025, the level of foreign exchange reserves will reach US$14 billion. This will provide import cover of 2.8 months and put Pakistan in a somewhat more secure position. There is need, however, to appreciate that total external inflows, of both foreign direct investment and loan financing, will be significantly smaller in 2024-25. Inclusive of inflows into the private sector, the IMF estimate of the actual external financing of Pakistan is US$20.9 billion. This is 23 percent less than the total inflow of US$26.3 billion in 2023-24. We turn now to the outlook for 2025-26. The first part of the external financing requirement is the size of the current account surplus or deficit in the balance of payments. The IMF Staff report has projected a small deficit of US$1.5 billion. Exports are expected to show a growth rate of 5.4 percent, while imports are projected to increase by 3.4 percent. The turmoil in the global trade after the US announcement of higher tariffs is likely to adversely impact on the volume of global trade. Further, the shortfall in major crop outputs like cotton and wheat will raise the volume of agricultural imports. Also, if a target GDP growth rate of 3.6 percent is to be achieved then this will imply larger imports of inputs and capital goods. The IMF has been cautious about the level of remittances, which are likely to increase by 20 percent in 2024-25, and are the main reason for a near zero current account deficit. The expectation is that they will fall marginally in 2025-26. Also, only 3 percent growth is anticipated in interest payments and repatriation of profits. The latter may be significantly higher due to increase in risk perceptions about investment in Pakistan. Overall, there is the risk that there may be a larger deficit in the current account in 2025-26, which could approach US$4 billion, equivalent to almost 1 percent of the GDP. The balance of payments projections of the IMF for 2025-26 are based on a double-digit depreciation of the rupee. The projection of the level of amortization of external debt, both public and private, is of a significant increase of almost 18 percent. It is expected to rise from US$14.7 billion in 2024-25 to US$17.3 billion in 2025-26. Fortunately, repayment to the IMF will be less by almost $1 billion. Turning to the available financing, the IMF has been cautious about the projection of foreign direct investment in 2025-26. The expectation is that it will remain at the same level as in 2024-25 of US$2.1 billion. However, the tense security situation may lead to some postponement of investments in South Asia. Further, the IMF is also not expecting significant increase in the disbursement of loans in 2025-26. They are projected at $17 billion as compared to US$16.7 billion in 2024-25. Overall, the lack of optimism in the IMF projections is clearly indicated by the expectation that the available financing will be virtually the same as the total external financing requirement of US$19.3 billion. This is in contrast to the expected surplus of US$2.5 billion from sources other than the IMF in 2024-25. The assumption in the projections is that the IMF Programme will continue throughout 2025-26. Two reviews during the year will be successfully completed and Pakistan will meet the quantitative performance criteria and implement the agreed agenda of reforms. Uninterrupted continuation of the IMF Programme in 2025-26 will lead to a loan disbursement of $2 billion from the IMF. In addition, there will be some inflows from the resilience facility, which has not yet been included in the IMF projections. Overall, Pakistanâ€™s reserves are projected to increase by $2 billion. In addition, there could be other prospective financing of US$1.4 billion. Overall, the above IMF projections indicate a relatively high level of risk and uncertainty in the level of external financing in 2025-26. The requirement may be higher because of a larger current account deficit and the need for purchase of armaments. Foreign direct investment may be adversely affected by the security situation. On top of all this, Pakistan will have to continue performing well within the framework of the IMF Programme. Copyright Business Recorder, 2025

Date: 2025-06-02

Details: KARACHI: The PSX saw a mild recovery last week ended on May 30, supported by improved economic policy clarity. However, gains remained limited as investors braced for potential tax-related announcements in the upcoming Federal Budget. The benchmark KSE-100 Index closed at 119,691 points on Friday, recording a gain of 588 points or 0.49 percent on a week-on-week (WoW) basis, up from 119,102.67 points at the close of the previous. Meanwhile, average daily trading volumes increased by 35 percent WoW, rising to 662 million shares compared to 491.5 million shares in the preceding week. Market capitalization rose by Rs. 118 billion during the week, reaching Rs. 14.503 trillion compared to Rs. 14.385 trillion in the previous week. BRIndex100 also gained 103.45 points during the last week to close at 12,842.51 points compared to 12,739.06 points a week earlier. Average daily turnover at BRIndex100 was 575.59 million shares. BRIndex30 up by 288.93 points on a week-on-week basis to 37,794.85 points with the daily average share trading volumes of 432 million. Analysts noted that despite the uptick, the market remained largely range-bound, moving within a narrow band of 1,770 points, weighed down by uncertainty surrounding potential revenue measures in the Federal Budget FY26. Investors remained cautious ahead of the upcoming federal budget amid growing concerns over proposed tax measures. On the economic side, the week commenced with IMF concluding its visit to Pakistan without reaching an agreement on certain budget items, leading the government to reschedule the budget presentation to June 10, 2025. However, the virtual negotiations are continuing, with both sides to focus on measures to enhance tax revenues and curtailing expenditures. Meanwhile, China reaffirmed its commitment to refinance $3.7 billion in commercial loans denominated in the Chinese currency, before the end of June-2025. In other developments, the SBPâ€™s net buying from the currency markets stood at $223 million in Feb-2025 to further strengthen foreign exchange reserves, bringing the cumulative purchases of $5.9 billion during 8 months of FY25. In the recently held T-bill auction, SBP raised Rs772 billion against the target of Rs650 billion, with yields remaining largely flat across different maturities. Moreover, SBP reserves also rose by $70 million week on week to $11.52 billion. According to AHL Research, the KSE-100 index remained range-bound throughout the week, weighed down by uncertainty regarding potential revenue measures in the upcoming Federal Budget FY26. Foreign investors remained net sellers during the week, recording an outflow of $5.57 million, which was largely absorbed by local buyers. Overall, sentiment stayed cautious as market participants awaited clarity on fiscal policies and tax reforms expected in the upcoming budget announcement. While analyzing on the monthly basis, Topline sales desk stated that the benchmark KSE 100 Index gained 7.5 percent on month on month (MoM) basis, this gain can be attributed to cut in policy rate by 100bps by SBP to 11 percent in its monetary policy meeting, citing the improvement in inflation outlook relative to the previous assessments and approval of first review of EFF by IMF board along with a new facility under Resilience and Sustainability Facility of $1.4 billion. Analysts at AHL Brokerage house stated that market is expected to remain positive in the coming weeks, with developments around the upcoming federal budget likely to drive short-term sentiment, along with room for more rate cut in the upcoming Monetary Policy Committee (MPC) meeting as it forecasted inflation stands at 7.0 percent in next fiscal year. The KSE100 is anticipated to sustain its upward trajectory, with a target of 165,215 points by December 2025, primarily driven by strong earnings in fertilizers, sustained ROEs in banks, and improving cash flows of E&Ps and OMCs, benefiting from falling interest rates and economic stability, they added. Copyright Business Recorder, 2025

Date: 2025-06-02

Details: Recorder Report LAHORE: Seeking an urgent meeting with Prime Minister Shehbaz Sharif ahead of the federal budget, Pakistanâ€™s apparel sector; a vital contributor of over $9 billion in export revenue has warned that the countryâ€™s value-added textile industry faces serious setbacks due to continued tariff barriers and restrictive policies that are choking supply chains. In a joint statement issued by the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) and the Pakistan Hosiery Manufacturers & Exporters Association (PHMA), apparel exporters stressed that global buyers now demand certified, high-performance materials that are simply not available in Pakistan. Yet, import of such essential raw materials remains hindered by duties and outdated regulations. PRGMEA Regional Chairman Dr. Ayyazuddin and PHMA Zonal Chairman Abdul Hameed jointly demanded a direct and an immediate meeting with the prime minister ahead of the budget, warning that without urgent intervention, Pakistan could lose out on the global shift in sourcing patterns that has opened fresh opportunities for new exporters. Dr. Ayyazuddin emphasized that Pakistan still relies heavily on cotton-based exports â€” primarily denim and fleece â€” while nearly 80% of global apparel trade has moved toward synthetic and functional textiles. â€œWe cannot expand or diversify if we donâ€™t have access to the right raw materials,â€ the statement said. â€œWe are being penalized for importing items that arenâ€™t even produced locally.â€ Abdul Hameed pointed out that man-made fibers, technical yarns, performance fabrics, and critical trims â€” many categorized under HS Chapters 54, 55, and 96 â€” are subject to duties despite not being manufactured in the country. â€œKeeping tariffs on non-available raw materials is equivalent to taxing exports before they even happen,â€ he said. Former PRGMEA chairmen Ijaz Khokhar and Sajid Saleem Minhas backing the joint demand highlighted that SMEs are particularly vulnerable due to rigid policies and lack of flexibility in global compliance. â€œWeâ€™ve sent a detailed letter to the Prime Minister Shehbaz Sharif and commerce ministry outlining how certain recent policy changes, like the shortening of the Export Facilitation Scheme (EFS) input period from 60 to just 9 months, are unrealistic for the apparel sector,â€ he said. PRGMEA ex-chairmen Ijaz Khokhar added that the letter, addressed to the PM as well as the Commerce Minister Jam Kamal, strongly criticizes the abrupt shift in EFS timelines. He argued that value-added exporters often operate under just-in-time and never-out-of-stock business models, requiring longer input cycles to fulfil diverse orders. He said that the current restrictions, it warns, will disrupt operations and increase compliance burdens for exporters. Sajid Saleem Minhas added that the local spinning industry has not evolved to meet the requirements of todayâ€™s global fashion market. Since we donâ€™t produce the materials our buyers demand, we should at least allow their duty-free import. Otherwise, we are locking ourselves out of high-growth product categories, he said. The PRGMEA and PHMA members also called for restoration of the Final Tax Regime (FTR) for exporters, stating that the shift to the Normal Tax Regime has led to complex audits and disrupted business continuity. We need simplicity and certainty, not additional paperwork and scrutiny,â€ the statement noted. Ijaz Khokhar also raised another concern which is the lack of government push on trade diplomacy, particularly with the United States, where Pakistani textiles face an average import tariff of 29%, compared to lower rates for competitors like Bangladesh and Vietnam. The letter suggests Pakistan negotiate preferential terms or targeted tariff relief with the U.S., especially for eco-friendly and sustainable products that align with global ESG compliance. He said that refund delays were also highlighted as a chronic problem. Exporters are facing severe liquidity shortages due to delayed disbursement of DLTL, DDT, sales tax, and withholding tax refunds. The industry has requested an automated and time-bound mechanism for refund processing to ease working capital constraints. Additionally, both associations emphasized the need for a strong national marketing campaign for â€œMade in Pakistanâ€ garments. They urged the Ministry of Commerce to initiate global trade outreach through embassies, digital platforms, and targeted B2B events to increase visibility and improve brand image. He said that this sector has the potential to double its exports in five years and added that we need the government to first remove these structural roadblocks. Sajid Minhas said that the Pakistanâ€™s value-added textile sector is one of the largest employers and a key contributor to national exports. The country cannot afford to lose this opportunity. We request the prime minister to meet us urgently and help align policy with global market realities. Copyright Business Recorder, 2025

Date: 2025-06-02

Details: Sohail Sarfraz ISLAMABAD: Small farmers from Sindh have approached Federal Board of Revenue (FBR) to reduce custom duty on imported tractors from 15 percent to 5 percent under massive tariff rationalisation plan to be implemented in budget (2025-26) to support agriculture sector. Farmers have also proposed FBR Chairman Rashid Mahmood to reduce the existing sales tax rate on locally manufactured and imported tractors from 14 percent to 5 percent, enabling the farmers to purchase tractors. This is not an exemption, but only a reduced rate already applicable of many items including vehicles under Sales Tax Act. The budget proposals of the Sindh Chamber of Agriculture (SCA) Hyderabad to FBR Chairman included rationalisation of tax structure and abolishment of levy of sales tax on tractors to support agriculture sector. Sales tax on tractors, pesticides likely When contacted, sources in the FBR revealed that the proposals are under consideration of the FBR during ongoing budget preparation exercise to facilitate poor farmers of the country. The chamber stated that the approved tariff plan to be implemented in budget (2025-26) covers elimination of Additional Customs Duty (ACD); phasing out of Regulatory Duty (RD); gradual elimination of the Fifth Schedule of the Customs Act and restructuring of the customs tariff. This must cover most essential item i.e. tractor which is not a luxury item like vehicle. Nabi Bux Sathio, Senior Vice President, Sindh Chamber of Agriculture Hyderabad stated: â€œWe, as representatives of the farming and agricultural community in Sindh, feel compelled to shed light on the significant challenges and hardships faced by our fellow farmers and agriculturists in recent timesâ€. The chamber stated that the agricultural sector plays a pivotal role in Pakistanâ€™s economy, contributing 24% to the GDP and employing 37.4% of the workforce. However, the sector is currently grappling with a myriad of complex issues. These include the lack of investment and support, the adverse effects of climate change, and the dwindling availability of water, exacerbating the challenges faced by farmers and agriculturists. Moreover, farmers have been severely impacted by the inability to secure fair prices for their produce. The governmentâ€™s announcement of support prices for wheat and cotton has not translated into actual purchases at the stipulated rates, leaving farmers with no choice but to sell their crops at significantly lower prices. The situation is further compounded by the low prices offered for rice and the potential delay in the sugar cane crushing season, which has added to the woes of the farming community. He urged the FBR to reduce the existing sales tax rate on locally manufactured and imported tractors from 14% to 5% enabling the farmers to purchase tractors, and also reduce the custom duty on imported tractors from 15% to 5% and also for re-conditional tractors. Copyright Business Recorder, 2025

Date: 2025-06-02

Details: Ali Khizar Fiscal consolidation continues. FY26 is expected to be the third consecutive year of a primary fiscal surplus. This should help lower the public debt-to-GDP ratio and provide some cushion for future growth. However, economic strangulation is also likely to persist, as the government remains reliant on higher direct taxes without offering any relief to salaried individuals or the corporate sector. This is not going to be a revolutionary budget. It is simply a continuation of policies already agreed upon with the IMF. Pressure on tax revenues will remain. As interest rates decline, banks and depositorsâ€™ incomes will fall â€” dragging down the corresponding tax collections. Income from the oil and gas sectors may decline due to reduced domestic production (to accommodate imported RLNG) and subdued global prices. Fertilizer sector margins are expected to stay suppressed. Consequently, direct tax collection at current rates may be lower in FY26 compared to key contributors the preceding year. Meanwhile, the IMF is pushing for implementation of the National Tariff Policy (NTP), but the government is hesitating. The FBR is concerned about lower collections from customs duties. The question, then, is how to plug the fiscal gap. The standard response is to go after retailers and wholesalers and talk of expanding the tax net. History suggests these efforts rarely yield results. There are gaps in the revenue framework. This is why the IMF has not agreed to reducing the effective tax burden on salaried individuals or to scrapping the super tax on corporates. The Federal Excise Duty (FED) on certain items is likely to be increased â€” or newly imposed, including on cigarettes and ultra-processed foods. But without better enforcement, these measures will only push more activity into the informal economy. Already, the formal footprint in sectors like dairy and fruit juice is shrinking due to recent indirect tax hikes. Poor governance and the prevalence of other taxes will dilute any benefit from reducing import tariffs. While economic theory supports lower tariffs to disincentivize smuggling, other taxes create perverse incentives. For example, the FBR collects withholding tax (WHT) and sales tax at the import stage, followed by GST and FEDs on final products. Ideally, these taxes should also be reduced â€” but that is wishful thinking. In fact, the FBR is proposing new, unconventional taxes â€” such as a 1.5 percent WHT on all imports. If the NTP is implemented, lower import prices may drive up import volumes, increasing pressure on the PKR. In response, the FBR may increase GST or FED on selected goods, such as automobiles. One area urgently needing reform is the customs department. Rampant under-invoicing not only erodes tax revenue but also undermines domestic manufacturing. Without fixing this, the effectiveness of the NTP will be limited. The FBR, however, appears desperate. There is already a shortfall of Rs 1 trillion in tax revenue during the first 11 months of FY25, and meeting the FY26 target will be even more difficult. As always, the burden will fall on the already-taxed formal sector. Non-tax revenues are expected to perform well. The SBP is likely to post another bumper year of profits, driven by over Rs 13 trillion in open market operation (OMO) injections. Last year, the SBP contributed Rs 2.5 trillion to non-tax revenues, and a similar figure is expected this year. The government is also relying on petroleum levy, which already stands at around Rs 80/liter and may be increased to Rs 100/liter. Additionally, a carbon levy of Rs 5â€“10/liter is under consideration. There is limited space for expenditure cuts, aside from some savings in interest payments on debt. The government has reportedly secured IMF approval for a significant increase in defence spending. However, negotiations are ongoing regarding the size of the development budget. Regardless of what is initially allocated, it is likely to be trimmed later if tax revenues from retailers and the real estate sector do not materialise. In conclusion, the upcoming FY26 budget reflects a cautious, IMF-driven approachâ€”prioritizing fiscal consolidation over transformative change. While primary surpluses and robust non-tax revenues, bolstered by SBP profits and petroleum levies, offer some macroeconomic stability, the continued reliance on existing taxpayers and indirect taxes risks stifling growth and further entrenching informality. Without bold reformsâ€”particularly in customs enforcement and tax administrationâ€”structural weaknesses will persist, limiting the effectiveness of flagship measures like the National Tariff Policy. Though lower commodity prices and fiscal discipline may support modest growth in FY27 and FY28, the absence of meaningful structural change leaves Pakistanâ€™s fiscal trajectory precariously balanced. Copyright Business Recorder, 2025

Date: 2025-06-02

Details: June 2, 2025 President Asif Ali Zardari and Prime Minister Shehbaz Sharif convened a high-level meeting on Sunday at the Governorâ€™s House in Lahore, where the focus remained firmly on ensuring meaningful relief for the common man in the upcoming budget for the fiscal year 2025â€“26. The session was attended by key figures, including National Assembly Speaker Sardar Ayaz Sadiq, Interior Minister Mohsin Naqvi, Punjab Governor Sardar Saleem Haider Khan, and Senator Saleem Mandviwalla. During the meeting, President Zardari urged the Pakistan Muslim League-Nawaz (PML-N)-led coalition government to take practical and people-centric steps in the upcoming budget, aiming to ease the burden on ordinary citizens struggling under inflation and economic pressure. â€œThe government must prioritise public welfare in Budget 2025â€“26. Concrete measures should be taken to deliver direct and visible relief to the common man,â€ Zardari emphasized. The leadership reviewed the overall political and security environment of the country, with detailed discussions on internal stability and coordination among coalition allies. The importance of unity in the current political landscape was underlined, as Zardari stressed that all political partners must â€œmove forward together in the national interest,â€ especially during this critical time leading up to the budget presentation. Prime Minister Shehbaz Sharif briefed attendees on the outcomes of his recent diplomatic engagements with friendly nations, highlighting their strategic significance for Pakistanâ€™s foreign policy and economic recovery efforts. The participants also assessed how international cooperation could be leveraged for economic stability, particularly through aid, investment, and trade agreements, which may play a role in the fiscal planning behind the upcoming budget. The federal government has officially confirmed that the budget for the next fiscal year will be presented on June 10, immediately after Eid ul Adha. With Eid expected to fall on June 7, June 9 (the third day of Eid) is expected to be declared a working day to ensure timely execution of economic proceedings. This includes the crucial meeting of the National Economic Council (NEC) and the launch of the Economic Survey 2025, both scheduled for the same day. Federal Finance Secretary Imdadullah Bosal dismissed all rumours regarding a potential delay in the budget presentation, asserting that the fiscal plan will be unveiled as scheduled. The government appears determined to meet its constitutional and economic deadlines, with the primary goal of restoring public confidence through a budget that addresses rising costs and economic hardships.

Date: 2025-06-02

Details: Recorder Report ISLAMABAD: The Federal Board of Revenue (FBR) has so far collected Rs 240 billion from tobacco industry during July-May (2024-25) which is expected to exceed Rs 285 billion by the end of June 2025, negating industryâ€™s claims of falling government revenue. The growing numbers of tax collection from tobacco sector during 2024-25 counter their budget proposals seeking decline in tobacco taxes. This also reflects that the tobacco industry manipulates tax numbers to influence policy. The current expected tobacco tax revenue of more than Rs 285 billion in the ongoing fiscal year would align with the previous fiscal yearâ€™s numbers, indicating stable demand despite high taxation. The figures have also been confirmed by the FBRâ€™s database of Pakistan Revenue Automation Limited (PRAL). Tobacco revenue can increase by bringing illicit trade into tax net Despite massive shortfall in tax collection of the FBR during July-May (2024-25), the collection from the tobacco industry during July-May (2024-25) is showing an upwards trend with anticipated collection of Rs 285 billion by the end of current fiscal year contrary to the proposal by one of tobacco MNCâ€™s seen by BUSINESS RECORDER. According to official sources, the tobacco industry in Pakistan is once again under scrutiny for allegedly distorting facts to influence government policy and IMF negotiations ahead of the 2025â€“26 federal budget. Industry players are pushing for a reduction in the Federal Excise Duty (FED) on cigarettesâ€”from Rs 5,050 to Rs 3,800 per 1,000 sticksâ€”arguing that it would increase consumption and, in turn, improve tax collection. However, available data contradicts these claims. As of May 15, 2025, tobacco-related tax revenue had already reached Rs 240 billion, with estimates suggesting that the figure will exceed Rs 285 billion by the end of June. This would align with the previous fiscal yearâ€™s numbers, indicating stable demand despite high taxation. The industryâ€™s narrative is further complicated by its repeated exaggeration of the scale of illicit trade. A recent survey by the Institute for Public Opinion Research (IPOR) claimed that 54% of cigarette brands sold were illicit, based on non-compliance with tax stamps and graphic warnings. However, the findings did not account for the actual market share or consumption of these brands, rendering the estimate misleading. A separate study by the Social Policy and Development Centre (SPDC) revealed that the top 15 brandsâ€”13 of which are registered with the FBRâ€”make up 80% of the market. Illicit trade, including both locally manufactured and smuggled cigarettes, accounts for approximately 33.2% of total consumptionâ€”significantly lower than the industryâ€™s often-cited 50%+ figure. The top illicit brands with the higher market share are currently selling in the range of Rs 180 to Rs 240 per pack. Hence a reduction in tobacco taxes will not drive the volumes back to tax-paid products and the only way to reduce illicit is through extensive enforcement and proper track and trace implementation. This has also been reiterated by a leading donor agency that the Laffer curve principle does not impress them rather the focus of the FBR should not be to continue convincing the IMF to reduce tobacco taxes rather should be towards enforcement. Despite efforts to frame lower taxation as a solution to improve revenue, the data suggests otherwise. Reducing taxes would likely lower prices and increase accessibility, potentially leading to higher smoking rates without necessarily improving revenue collection, they added. Copyright Business Recorder, 2025

Date: 2025-06-02

Details: June 2, 2025 The launch of Faceless Customs Assessment (FCA) is nothing short of a revolutionâ€”one thatâ€™s shaking the foundations of the deeply entrenched system of corruption and malpractice in Pakistanâ€™s import-export sector. This bold, technology-driven initiative has triggered panic in the hearts of those who thrived in the shadows of manual customs clearanceâ€”where palms were greased, rules bent, and documentation manipulated at will. But now, the game has changed. This faceless system, rolled out by Pakistan Customs under the supervision of the Federal Board of Revenue (FBR), has become a beacon of transparency. No more backdoor meetings, no more whispered deals in Customs Housesâ€”just a clean, digitized, and impartial system powered by Artificial Intelligence (AI) and Information Technology (IT). From the very beginning, this flagship reform was met with resistanceâ€”not from the legitimate business community, but from those corrupt elements who had milked the old, manual system for years. They launched a propaganda campaign, attempting to undermine the reform by spreading false narratives and exaggerated glitches, hoping to get the government to backpedal. But their efforts were in vain. Prime Minister Shehbaz Sharif himself gave the FCA system his seal of approval after personally inspecting its functionality at the launch. An internal report by Pakistan Customs may have identified minor technical glitches, but it never recommended rolling back the system. The goal was always refinement, not reversal. And the real business community knows it. The Karachi Chamber of Commerce and Industry (KCCI), the largest and most influential chamber in the country, has unequivocally endorsed the Faceless Customs system. Its president praised the FCA initiative as a â€œgame-changer,â€ lauding its immediate impact on reducing corruption, speeding up clearance, and bringing fairness to trade practices. Letâ€™s face itâ€”the only people troubled by this faceless revolution are those who can no longer twist the system for personal gain. For compliant traders, FCA has simplified the documentation process, eliminated the need for middlemen, and slashed costs related to delays, demurrage, and detention. With customs clearance now free from human interference, trust in the system is risingâ€”rightfully so. Jawed Bilwani, a leading voice in the KCCI, made it clear: the Faceless Customs system has transformed Karachiâ€™s port operations and must be rolled out across all cities. The dramatic reduction in physical visits to Customs offices has not only minimized corruption but has also empowered importers to control their own shipments using a digital interface. What weâ€™re witnessing is the slow death of corruption, and the birth of a smarter, cleaner, and more transparent customs regime. The corrupt are howling because their easy money has dried up, but for Pakistanâ€™s legitimate traders, the FCA system is a long-awaited breath of fresh air. The government must resist all pressure and build on this momentum. Roll it out nationwide. Expand its scope. Digitize every department tied to trade. Faceless Customs is the futureâ€”and the enemies of reform have no face left to hide behind.

Date: 2025-06-02

Details: BR Web Desk Published June 2, 2025 Planning minister Ahsan Iqbal said on Monday the government would propose Rs1 trillion for Public Sector Development Programmes (PSDP) in the upcoming federal budget for the financial year 2025-26. The development came as the Annual Plan Coordination Committee (APCC) met in Islamabad under the chairmanship of Ahsan Iqbal to review the progress of the PSDP 2024â€“25 and finalise recommendations for the upcoming PSDP 2025â€“26, said a statement from the Planning ministry. The meeting brought together high-level federal and provincial representatives, including secretaries, principal accounting officers, and planning officials from Gilgit-Baltistan and Azad Jammu & Kashmir. Due to fiscal discipline agreed with International Monetary Fund, the government is constrained to not increase PSDP While addressing the participants, Planning minister emphasised that despite limited fiscal space and competing demands, the government â€œremains fully committed to sustaining development momentum through strategic realignment of resources and policy reformsâ€. â€œThe Finance Division, after consultations with the IMF, has firmed up an Indicative Budget Ceiling of Rs1 trillion for the federal PSDP, including Rs270 billion in foreign aid,â€ Ahsan said. He noted that when the current government assumed office in early 2024, it inherited an economic landscape marked by â€œconstrained revenues, pressing foreign obligations, and structural imbalancesâ€. Budget 26: govt looking to boost export of â€˜made in Pakistanâ€™ mobile phones, say assemblers During the meeting, a review of PSDP 2024â€“25 was presented. It was noted that the National Economic Council had approved a National Development Outlay of Rs3.79 trillion, which included Rs1.40 trillion for the federal PSDP, Rs2.09 trillion for provincial annual development programes, and Rs196.9 billion for state-owned enterprises (SOEs). â€œHowever, due to financial constraints, the federal PSDP was later reduced to Rs1.100 trillion.â€ As of May 31, 2025, Rs1.036 trillion had been authorised for release, and Rs596 billion had been utilised. A total of 1,071 projects were included in the PSDP, with an approved cost of Rs13.427 trillion, of which Rs3.216 trillion had already been spent by June 2024. â€œA throw-forward liability of Rs10.216 trillion remains, underscoring the urgent need for project rationalisation and financial discipline.â€ The minister highlighted that there was a dire need to increase the development budget of the country, which had direct bearing on growth and job creation. â€œHowever, due to fiscal discipline agreed with International Monetary Fund (IMF), the government is constrained to not increase PSDP. The only way to increase development spending is to increase the revenues by increasing tax/GDP ratio from 10% to 16-18%,â€ he said. â€œBy being lowest tax paying economy we canâ€™t aspire to growâ€. The minister informed that the government had undertaken reforms to overhaul tax administration. â€œTo ensure maximum value for the investment in development sector, the ministry has taken multiple reviews of project performance, including quarterly and mid-year reviews for better investment efficiency.â€ Over 118 slow-moving or redundant projects, mostly approved at the Departmental Development Working Party (DDWP) level, were recommended for capping or closure, potentially â€œsaving Rs1.000 trillion and freeing resources for high-impact initiativesâ€. Moreover, the Planning Commission facilitated re-appropriations of Rs84 billion to fast-moving projects and critical interventions, while Rs80 billion were reallocated through TSGs for emergent national priorities such as the solarization of tube wells in Balochistan. Looking ahead to FY 2025â€“26, the minister announced that the proposed PSDP had been restructured in line with core principles of sustainabilityâ€œ, impact, and equityâ€œ. â€œThe Finance Division, after consultations with the IMF, has firmed up an Indicative Budget Ceiling of Rs1.000 trillion for the federal PSDP, including Rs270 billion in foreign aid.â€ The PSDP 2025â€“26 portfolios have been developed following extensive consultations with ministries and provinces through Priority Committee meetings and high-level reviews chaired by the deputy prime minister and advisor to the prime minister. â€œThe final recommendations reflect a strict prioritisation of ongoing high-impact, foreign-aided, and near-completion projects. In total, 1,120 projects have been included in the proposed PSDP, of which a significant number are designed to be completed within the next 3â€“4 years if fiscal space is maintained.â€ Pakistan faces serious challenge of water security therefore Diamer Bhasha Dam is given top priority, according to the statement. â€œHyderabad-Sukkur Motorway will be started during 2025-26. Balochistan will get highest share in development funds of nearly Rs250 billion.â€ The minister further informed that sectoral allocations had been finalised with Rs644 billion allocated to infrastructure, including Rs332 billion for transport and communications and Rs144 billion for energy. FBR may impose 18% sales tax on locally-manufactured cars A total of Rs150 billion has been proposed for the social sector, including Rs63 billion for education and higher education and Rs22 billion for health. Special areas like AJK and GB will receive Rs63 billion, while Rs70 billion has been allocated for merged districts of Khyber Pakhtunkhwa. Science and IT sectors have been allocated Rs53 billion, while Rs9 billion has been proposed for governance, according to the statement. Moreover, production sectors, including food, agriculture, and industries, are expected to receive Rs11 billion. In addition, SOEs have submitted development plans amounting to Rs288 billion, with major contributions from entities like WAPDA, NTDC, OGDCL, and others. The minister informed the participants that one of the â€œmost serious challengesâ€ had been the increasing tension and security risks following the events of May 7, 2025, when hostilities broke out along the eastern border with India. â€œThis conflict has led to increased defense spending requirements and exerted additional pressure on the already limited development budget.â€ He acknowledged the dilemma faced by the government: choosing between critical national defense and the developmental needs of the people. However, he reassured participants that the government remained committed to maintaining a careful balance. The minister stated that the strength of a nation â€œlies not just in its defense capabilities, but also in the health, education, and economic empowerment of its citizensâ€. â€œThe government will not allow Pakistanâ€™s development journey to be derailed. Instead, it will adopt innovative planning, smart budgeting, and rigorous monitoring to ensure that the needs of both defense and development are addressed.â€ The APCC also deliberated on critical policy reforms. It endorsed the proposal to stop at-source deduction of Cash Development Loans (CDL) from the PSDP funds, saying the practice hampered project cash flows and delayed implementation. â€œThe committee reiterated the policy that provincial nature projects should be funded by provinces, except in cases involving strategic national interest or implementation in deprived regions. â€œFurthermore, the APCC recommended imposing a moratorium on DDWP-level project approvals during the tenure of the IMF programme, except in exceptional cases with full justification and review by the CDWP. It was also proposed that no development funds be diverted to recurring expenditures during the fiscal year.â€ â€œWe are not just managing a budgetâ€”we are shaping the future. The world may see limitations, but we see opportunities,â€ Ahsan said.

Date: 2025-06-02

Details: â€¢ Sources say governments are designing a policy similar to the Export Facilitation Scheme (EFS) which will incentivise the export of â€˜made in Pakistanâ€™ mobile phones Salman Siddiqui Published June 2, 2025 Pakistanâ€™s mobile phone assemblers claim the federal and provincial governments will announce a policy in the upcoming budget 2025-26 aiming to boost phone exports. This is to maintain the balance of trade which is likely to widen in the wake of surge in imports from the US in the aftermath of trade talks between Islamabad and Washington, according to several experts that BUSINESS RECORDER spoke to. One leading domestic mobile phone assembler told BUSINESS RECORDER on the condition of anonymity that the government is working to announce a rebate on export of mobile phones in the upcoming budget, scheduled to be announced on June 10. More luxury items set to attract sales tax in upcoming Pakistan budget Separately, Muhammad Idrees Memon, a former president of Karachi Electronic Dealers Association (KEDA), told BUSINESS RECORDER that the federal and provincial governments are designing a policy similar to the Export Facilitation Scheme (EFS) which will incentivise the export of â€˜made in Pakistanâ€™ mobile phones. Both federal and provincial governments were approached to confirm the development. They were yet to reply by the time of filing this story. Memon, who is also a former president of Karachi Chamber of Commerce and Industry (KCCI), said the Sindh government and KCCI are currently in talks about removing or reducing the Infrastructure Development Cess (IDC) on the import of mobile parts (CKD/completely knocked down) for those manufacturers who want to export their products. The IDC is being collected in the range of 1.81% to 1.85% on imports at the provincial level. He also said the Sindh government will finish working on the export package for mobile phone exporters â€œover the next two to three days (by Wednesday)â€ and announce it in the budget. â€œThe Punjab government has already agreed to a similar export package. The ministry of finance, ministry of commerce, Federal Board of Revenue (FBR) and Engineering Development Board (EDB) all are supporting us,â€ he said. He said Sindh Chief Minister Murad Ali Shah, and PPP ministers and members of the provincial assembly including Mukash Kumar Chawla and Dharejo are working with KCCI leadership to design an EFS-like product to promote and support the phone exports to help partially controlling the likely increase in balance of trade. He added that Pakistan is considering increasing imports of products including cotton and edible oil from the US to avoid President Trumpâ€™s proposal to double tariff to 29% on imports from Pakistan. Once the provincial government finalizes its tax incentives for exports then the federal government will also join the export package in the making, Memon said. â€œThere is huge potential and Pakistan can earn a significant amount of foreign exchange through exporting â€˜made in Pakistanâ€™ phones,â€ Memon said. He said Pakistan is already exporting mobile phones to Middle Eastern countries including Dubai, but the volume of the trade is insignificant. Almost all the Chinese phones - about two dozen brands - available in the country are being assembled locally. Memon said Pakistan is importing 100% raw material (parts/CKD) for mobile assembling in the country at present. The removal of IDC on imports would enable manufacturers to add value to the products and earn a handsome amount on their exports. In addition to this, this would also help create a new employment generation and promote â€˜made in Pakistanâ€™ products across the globe. China looking to move export base to Pakistan Meanwhile, Aamir Allawala, CEO, Transsion Tecno Electronics, said that Chinese companies are interested in moving their export base to Pakistan due to availability of labour at a lower cost and to mitigate its risk associated with global trade war. â€œPakistan labour cost is only $140 per month compared with $800 in China,â€ he told BUSINESS RECORDER. Almost all leading Chinese brands have already set up their factories in Pakistan including Xiaomi, OPPO, Vivo, Tecno, Infinix, Itel, realme, Redmi and ZTE. â€œPakistan can become a hub of export of Chinese brands to markets in Africa, Central Asia and Middle East. â€œThere is a huge potential on the table. The government should sit together with the local industry and chart a five year forward to take advantage of the changing global trends,â€ he said. Pakistan is now assembling almost all global brands of mobile phones locally, increasing the â€˜made in Pakistanâ€™ production to 95% of the local demand, while the share of imported phones (finished products) has reduced to merely 5%. The domestic production is saving around 15-20% in foreign exchange, as local assemblers are still importing almost all mobile phone parts from foreign manufacturers. According to Pakistan Bureau of Statisticsâ€™ (PBS) data, the import of mobile phones (CKD/CBU) dropped 14% to $1.2 5 billion in the first 10 months of FY25 compared to $1.46 billion in the same period of the last year.

Date: 2025-06-02

Details: BR Web Desk Published June 2, 2025 In a key development towards the governmentâ€™s reform agenda, Prime Minister Shehbaz Sharif on Monday directed authorities to hire globally renowned firms for third-party validation of ongoing reforms at the Federal Board of Revenue (FBR). This directive was issued during a meeting chaired by the prime minister to review FBRâ€™s reforms, read a statement released by the Prime Ministerâ€™s Office (PMO). The premier reiterated that the government remains committed to making the country a stable economy through sustainable reforms in national institutions. â€œInstitutional reforms are progressing rapidly across all sectors,â€ the PM was quoted as saying. â€œThe recent positive economic indicators are clear evidence of the correct direction of government policies,â€ he added. PM Shehbaz orders crackdown on tax evasion, under-invoicing During the meeting, the prime minister was briefed on the performance of the Faceless Customs Assessment System and the progress of reforms at Pakistan Revenue Automation Limited (PRAL). PM Shehbaz expressed satisfaction over the recent performance of the Faceless Customs Assessment System. â€œReforms such as the Faceless Customs Assessment System, introduced to maintain transparency, are yielding encouraging results,â€ he said. The meeting was told that the implementation of the Faceless Customs Assessment System has led to an overall increase in revenue and a significant reduction in customs clearance time. The PM was briefed that a simplified digital tax return system for general taxpayers will be launched soon. â€œWork is actively underway to introduce the digital tax return system in Urdu and other local languages for the convenience of general taxpayers,â€ read the PMO statement. Federal Minister for Law and Justice Azam Nazeer Tarar, Federal Minister for Information and Broadcasting Attaullah Tarar, Chairman FBR, and senior officials from relevant institutions attended the meeting.

Date: 2025-06-01

Details: June 1, 2025 The International Monetary Fund (IMF) has asked the Federal Board of Revenue (FBR) to submit alternate taxation proposals if the government proceeds with its planned tax relief for the salaried class in the upcoming federal budget for 2025â€“26. This move comes as Pakistan looks to finalize key budgetary measures while aiming to meet ambitious revenue targets amid mounting economic challenges. According to media reports, the FBR has floated a proposal to provide tax relief to the salaried class, which is estimated to reduce revenue collection by approximately Rs60 billion. However, the IMF has made it clear that any such relief must be balanced by alternative revenue-generating measures to keep Pakistan on track to meet the Rs14.2 trillion revenue collection target for the next fiscal year. This is a particularly daunting goal, given the growing shortfall in the current yearâ€™s revised revenue target of Rs12.33 trillion. A senior official involved in the negotiations confirmed that the FBR has recommended revised tax slabs to ease the burden on the salaried class. One key proposal includes reducing the tax rate on the first income slab (Rs600,000 to Rs1.2 million annually) from the existing 5% to just 1%. This would bring down the annual tax from Rs30,000 to Rs6,000 for individuals earning Rs100,000 per month. However, the IMF has suggested a compromise rate of 1.5%, translating into a Rs9,000 annual tax for the same income bracket. Furthermore, the FBR has proposed a 2.5% reduction across each higher income slab within the salaried class, reducing the maximum slab rate from 35% to 32.5%. While these proposals are under discussion, the complete financial impact is still being calculated and is pending final agreement between the FBR and IMF. The fate of other taxesâ€”such as the 10% surcharge and the controversial Super Taxâ€”also remains uncertain. Officials indicated these measures may be rationalized gradually, with reductions beginning in the upcoming budget. Complicating matters further, the FBR is also wrestling with the potential fallout of a tariff rationalization plan, which could result in an estimated revenue loss of Rs200 billion. There are also concerns about how reduced tariffs could increase misdeclaration risks at customs, especially with the reclassification of goods into lower-tax categories. Amid these fiscal pressures, the salaried class continues to be at the center of a delicate balancing act between relief and revenueâ€”a challenge the FBR must navigate with caution under the close scrutiny of the IMF.

Date: 2025-06-01

Details: June 1, 2025 Karachi, June 1, 2025 â€“ The Institute of Chartered Accountants of Pakistan (ICAP) has proposed the introduction of a structured withholding tax (WHT) mechanism on royalty payments made to resident individuals and entities. The proposal forms part of ICAPâ€™s detailed recommendations for the upcoming budget 2025â€“26. Currently, royalty payments made to non-residents are subject to withholding tax under Pakistanâ€™s tax laws. However, no such withholding tax framework exists for royalty payments to local individuals or businesses. ICAP highlighted this gap in the tax system, stating that the absence of a similar mechanism for residents results in inconsistent and inequitable treatment of taxpayers. To address this, ICAP has suggested that the withholding tax regime be extended to cover domestic royalty recipients, ensuring parity in tax policy for both local and foreign beneficiaries. ICAP emphasized that income earned from royaltyâ€”which typically stems from intellectual property rights, patents, trademarks, and licensing agreementsâ€”is often underreported. Due to its intangible nature and reliance on voluntary disclosure, much of this income can escape proper taxation. A withholding tax applied at the source, as recommended, would ensure better tax compliance and transparency. The institute outlined several benefits of introducing such a measure: â€¢ It would facilitate tax collection at the point of payment, reducing dependence on post-filing disclosures. â€¢ It would discourage tax evasion by holding the payer responsible for initial tax deduction. â€¢ It would broaden the tax base by including income that often remains undocumented. â€¢ It would promote fairness by aligning the tax treatment of royalty income regardless of the recipientâ€™s residency status. ICAP further noted that the proposed measure aligns with global tax standards, where withholding tax on royalty payments is commonly practiced. By adopting this reform, Pakistan would modernize its taxation of intellectual property income and move towards a more equitable and robust tax system. The institute strongly urged the government to incorporate this recommendation in the forthcoming budget, as it would enhance revenue mobilization while promoting responsible reporting practices.

Date: 2025-06-01

Details: June 1, 2025 Karachi, June 1, 2025 â€“ The Karachi Chamber of Commerce and Industry (KCCI) has extended its full support for the Faceless Customs Assessment (FCA) system and has urged the federal government to accelerate its expansion across all ports and customs stations in Pakistan. In a press release issued even on a public holidayâ€”a gesture that underscores the significance of the matterâ€”KCCI expressed concern over rumors suggesting a possible rollback of the faceless system and stressed the need for continuity and broader implementation. KCCI President Muhammad Jawed Bilwani emphasized that the faceless customs model has brought transformative changes to Pakistanâ€™s trade and customs infrastructure. â€œOnly those involved in misdeclaration, under-invoicing, or other illicit practices have found the system difficult,â€ he said. â€œFor the vast majority of compliant importers and exporters, the FCA has made the entire process faster, simpler, and more transparent. Any speculation about reversing this progress must be strongly discouraged.â€ Bilwani lauded the Federal Board of Revenue (FBR) and Pakistan Customs for their bold step in launching the faceless customs assessment system in Karachi. He described the move as a model reform initiative that should be replicated across the country without delay. By incorporating cutting-edge Information Technology (IT) and Artificial Intelligence (AI), the FCA system has eliminated the need for physical interaction, drastically curbing opportunities for corruption and rent-seeking. The KCCI chief highlighted that the faceless customs mechanism has streamlined documentation procedures, significantly reduced clearance times, and decreased the cost of doing business. The shift away from discretionary powers traditionally exercised by customs officials has increased predictability and reduced the dependence on clearing agents. Bilwani also noted the rising adoption of self-clearance by businesses, who are now empowered to manage shipments independently through digital platforms. One of the most impactful benefits of the FCA system, Bilwani stated, has been the near-total elimination of physical visits to Customs House. This has saved businesses both time and operational costs while protecting them from the malpractices that were previously entrenched in manual systems. â€œThis faceless customs system has provided a secure and equitable environment where genuine traders can thrive without fear or unfair treatment,â€ he said. Calling the Karachi implementation a success story, Bilwani stressed the urgency of replicating the faceless customs model nationwide. â€œKarachi has proven that when technology is used with integrity and commitment, reform is not just possibleâ€”itâ€™s transformative,â€ he said. â€œDelays in rolling out this system to other ports would be a step backward.â€ KCCI also called on the government to introduce similar IT-driven reforms in all departments connected with trade, taxation, and regulation. Complete digitization of processesâ€”from submission and assessment to approvals and clearanceâ€”will enhance transparency, reduce human discretion, and root out inefficiency and corruption across the trade ecosystem. Bilwani concluded by applauding Customs officials in Karachi for their dedication to implementing the FCA system effectively. Reaffirming KCCIâ€™s support for reform and modernization, he said, â€œPakistanâ€™s future lies in embracing technology, removing corrupt practices, and empowering honest entrepreneurs. The faceless customs assessment system is a landmark reformâ€”and KCCI stands firmly behind it.â€

Date: 2025-06-01

Details: June 1, 2025 Karachi, June 1, 2025 â€“ The Sindh government has firmly opposed the latest demand by the International Monetary Fund (IMF) to impose more taxes on the agricultural sector, warning that such measures could severely harm farmers and threaten the countryâ€™s food security. Speaking on behalf of the provincial government, Sindh Minister for Agriculture Muhammad Baksh Mahar expressed deep concerns over the IMFâ€™s proposal to introduce an 18% General Sales Tax (GST) and raise the Federal Excise Duty (FED) on essential agricultural inputs such as fertilizers, pesticides, and farming machinery. Mahar described the IMFâ€™s demand as â€œunjust and anti-farmer,â€ arguing that such a move would drastically increase the cost of agricultural production. â€œThese taxes would be a direct blow to our already struggling farmers, especially in Sindh, where the agriculture sector is battling climate change, water shortages, and declining market prices,â€ he said. He warned that the imposition of new taxes on agricultural goods and services would not only burden farmers but also worsen inflation across the country by raising food prices. Mahar stressed that agricultural sustainability is essential for economic stability and food security, and that the sector requires support and facilitationâ€”not further financial pressure. The Sindh minister urged the federal government to engage with the IMF and advocate for a more balanced and farmer-friendly approach. â€œInstead of adding more taxes, we should be offering relief and incentives to the agricultural sector to boost productivity and ensure food availability for all,â€ he added. He further stated that the proposal had sparked unrest and anxiety among farmers in Sindh and across Pakistan. â€œThere is growing frustration among agricultural communities, and we stand in solidarity with them in opposing these unjustified taxes,â€ Mahar affirmed. The Sindh government reiterated its commitment to defending the interests of farmers and protecting the agricultural sector from international policies that fail to consider local realities. It called upon all stakeholders to prioritize the needs of the people over external financial pressures. LAHORE HIGH COURT ISSUES LANDMARK RULING ON TAX RECOVERY June 1, 2025 Lahore, June 1, 2025 â€“ The Lahore High Court has issued a detailed judgment clarifying the legal process regarding the recovery of tax arrears and the initiation of criminal proceedings against taxpayers. This landmark ruling is expected to have far-reaching implications for both tax authorities and the business community. The Court emphatically ruled that no criminal action can be taken against a taxpayer for the recovery of unpaid taxes unless and until a competent authority has made a final determination of the taxpayerâ€™s liability. The Court stressed that assessment of tax must precede any punitive action, as the absence of such assessment undermines the due process guaranteed by law. The Court further observed that under Section 48 of the Sales Tax Act, the legal framework for recovery only becomes applicable once a formal assessment of tax dues is completed, and those dues remain unpaid even after penalties are imposed. Without this sequence, the Court held, initiating criminal prosecution for recovery is premature and unlawful. This judgment came in response to a petition filed by a tobacco company and other petitioners who challenged the registration of criminal cases by revenue authorities, accusing them of tax evasion. The petitioners argued that no proper assessment or legal procedure had been followed prior to the registration of criminal complaints. The Court acknowledged the authority of tax officials to investigate cases involving tax fraud, but noted that the investigative process must adhere to due legal procedures. It pointed out that a taxpayer has the right to file appeals within the departmental hierarchy, including appeals to the appellate tribunal and references to the Lahore High Court, before any criminal prosecution is initiated. In its ruling, the Court emphasized that while civil and criminal proceedings may proceed in parallel, when the criminal liability depends on the outcome of civil adjudication, the criminal process should be held in abeyance to protect the integrity of justice. Additionally, the Court highlighted that tax laws allow for the compounding of offences, but this right becomes meaningless if a proper tax recovery processâ€”beginning with assessmentâ€”is not followed. In the absence of such assessment, the window to settle through compounding remains closed. Consequently, the Lahore High Court declared the criminal complaint registered by the tax authorities as unconstitutional, contrary to the statutory framework, and violative of the petitionersâ€™ fundamental rights. This ruling is expected to serve as a precedent in future disputes involving premature or unjustified recovery efforts.

Date: 2025-05-28

Details: Recorder Report ISLAMABAD: Minister for National Food Security Rana Tanveer Hussain said on Wednesday that the government is actively working to abolish the 18 per cent general sales tax (GST) on locally-produced cotton, including lint and cottonseed, to support farmers and boost domestic cotton production. The minister made these remarks during a meeting with a delegation from the Pakistan Business Forum (PBF), led by Chief Organiser Chaudhry Ahmad Jawad. Hussain said the government is also addressing pending cotton cess liabilities in the textile sector to ensure the Central Cotton Committee (CCC) remains financially stable. â€œWe are considering limiting tax-free imports of yarn and fabric under the Export Facilitation Scheme (EFS) to encourage local cotton consumption,â€ he added. PBF urges govt to take urgent measures to save cotton He stated that the government aims to produce 10 million cotton bales this year and is committed to offering relief to farmers in the next budget. The meeting discussed in detail the upcoming federal budget and advocate for targeted relief for the agricultural sector. The PBF delegation included Senior Vice President Amna Awan, Chairman South Punjab Talat Suhail, Chairman KP Ashfaq Paracha, and Deputy Secretary General Zafar Iqbal. PBF Chief Organiser Chaudhry Ahmad Jawad urged the government to eliminate the GST on local cotton and lower customs duties on imported machinery for the cotton ginning sector. â€œSustainable economic growth is not possible without strong support for agriculture,â€ he emphasised. Jawad also called for the implementation of new seed varieties developed by the Pakistan Agricultural Research Council (PARC) at the district level. â€œFarmers are unaware of the latest research being carried out in Islamabad. It needs to be transferred to the grassroots through local agriculture departments,â€ he said. The government must take concrete steps to reduce the cost of cultivation. Fertiliser prices should also be brought down by offering tax relief, added Jawad. Copyright Business Recorder, 2025

Date: 2025-05-27

Details: Finally, NEPRA has announced the Multi-Year Tariff (MYT) for K-Electricâ€™s Transmission and Distribution Network segments for FY2024 to FY2030 (MYT period). This is a welcome development. It unlocks value for the company and provides an opportunity for the integrated power utility to meet Karachiâ€™s growing energy needs in a sustainable manner. While the approval of the supply tariff is still pending, this move clears part of the uncertainty surrounding the companyâ€™s financials. Stakeholders and financiers can now breathe a partial sigh of relief. It is worth noting that the MYT for the supply segment and the motion for the review of the approved Investment Plan for the MYT period are currently under NEPRAâ€™s consideration. This is a critical requirement for the preparation of financial statements for the period after June 30, 2023, according to a notice posted on the Pakistan Stock Exchange (PSX). It is important to highlight, however, that this component will not currently impact the consumer tariff, which remains uniform across Pakistan and is determined by the federal power regulator. Nonetheless, despite the holdup, progress is evident as the government makes strides in the energy sectorâ€”particularly ahead of its plan to privatize other DISCOs. K-Electricâ€™s supply tariff and pending write-offs should be the next items on the agenda. Over Rs75 billion remains unresolved in the form of write-offs. While other DISCOs are allowed to transfer their losses to the governmentâ€™s account, K-Electric must absorb its write-offs and wait for regulatory approval. This is despite KE having shown considerable progress in recovering outstanding dues and exhausting all other avenues. Meanwhile, the government has announced the allocation of 2,000 megawatts of electricity in the first phase of a national initiative to power bitcoin mining and AI data centers. In this context, ensuring that the power sector operates efficiently and remains under control must be a top priority. The power sector is the backbone of any economy, and it must be agile to respond effectively to government policy changes. Agility comes from proactive engagement, swift decision-making, and inclusive stakeholder involvement. The government has also prioritized renewable energy. In that pursuit, efficiency and cost-effectiveness should be the main criteriaâ€”even for KE projects. If KEâ€™s projects offer better outcomes, they should be prioritized accordingly. As the government pushes forward with energy sector reforms and the privatization of other DISCOs, KE is already demonstrating successful transformation. The challenge for KE is to continue showing resilience and to leverage its experience in managing the complex energy demands of Karachi while navigating Pakistanâ€™s broader power sector challenges. It has already gained international recognition. Now is the time for the government to support and collaborate with KE to power Pakistanâ€™s economic hub. This goal cannot be achieved without a financially viable, sustainable, and efficient K-Electric.

Date: 2025-05-27

Details: As the Federal Budget FY26 approaches, existing and proposed fiscal measuresâ€”such as Rs.15/kg Federal Excise Duty (FED) on sugar sold to manufacturers and the proposed 5 percent FED on over 50 ultra-processed food itemsâ€”warrant reconsideration. While such measures may be presented as public health or revenue-generating tools, their real-world impact on the economy, consumers, and the formal sector tells a different tale. At their core, these levies create a critically uneven competitive landscapeâ€”penalizing the tax-compliant formal sector while rewarding the tax-evading informal economy. They make it harder for tax-paying companies to compete, while giving an advantage to informal businesses that donâ€™t pay taxes. This ends up harming the very goals the taxes are meant to achieve. The countryâ€™s formal sectoralready operates under a direct tax burden nearing 46 percent, in addition to municipal taxes, utility hikes, and regulatory compliance costs. Imposing an additional excise duty on a basic input like sugarâ€”or processed food items in generalâ€”only amplifies their operational burden. This is especially problematic at a time when inflation has been high and consumer spending power is shrinking. The unintended consequence of these taxes would be strengthening of the informal sector, which neither pays taxes nor complies with regulatory standards. As formal manufacturers are forced to raise prices to absorb higher input costs, they are priced out of the market, losing ground to unregulated competitors offering cheaper alternatives. This shift erodes not only formal employment and quality assurance but also reduces the overall tax base. The excise duty on processed foods will inevitably be passed on to consumersâ€”raising prices of everyday staples like biscuits, juices, frozen foods, and ready-to-eat meals. In a country where the average household spends a disproportionately large share of its income on food, these increases are economically damaging. The price sensitivity of Pakistani consumers in a volatile economic is likely to provoke dissatisfaction and pushback. Yes, many developed countriesâ€”such as France, the UK, and Chileâ€”have imposed health-based taxes on sugary drinks and ultra-processed foods to address obesity and lifestyle-related diseases. However, those countries have robust public healthcare systems, subsidize healthier food options, and use revenues to fund health and education programs. In contrast, Pakistan currently lacks such safety nets. While the long-term health rationale may be valid, the majority of Pakistanis do not have affordable access to healthier alternatives. Increasing prices on accessible, calorie-rich staples like biscuits may push low-income households toward even less nutritious, unregulated options, worsening public health rather than improving it. Itâ€™s also important to note that biscuits are not ultra-processed foodsâ€”they are baked items, commonly consumed as affordable energy sources, especially by lower-income groups. The formal food sector, which invests heavily in quality control, supply chain integrity, and employment, is placed at a severe disadvantage. A shrinking consumer base and falling sales due to price hikes will reduce profitability and investment capacity, leading to lower tax contributions, job losses, and a potential contraction in industrial activity. Globally, countries take two main routes when taxing processed foods: health-based taxes in developed countries aim to reduce consumption of specific harmful ingredients (such as the UKâ€™s Soft Drink Levy and Hungaryâ€™s public health tax), while revenue-based taxes in developing economies often prioritize collection over outcomes, lacking a clear link to health policy. Pakistanâ€™s current approach seems to fall in the latter categoryâ€”revenue-driven without the health infrastructure to support its goals. More concerning is that it targets a sector already under pressure, without introducing complementary policies. The recent news that the government may remove the sugar FED in FY26 is a positive move. If the government recognizes how harmful this tax is for businesses, jobs, and prices, then it should also reconsider the plan to tax ultra-processed foods. Pakistanâ€™s tax policy needs to balance raising revenue with the countryâ€™s economic realities. Flat taxes on sugar and processed foods hurt formal businesses, push up prices, make life harder for consumers, and give an unfair edge to the informal sector. Without affordable healthy options in place, these taxes end up doing more harm than good. This isnâ€™t the time for quick fixes in the name of health. Pakistan needs smart, targeted policiesâ€”not broad, harmful taxes.

Date: 2025-05-27

Details: The federal and provincial budgets for 2025-26 are likely to be announced in early June. Already, the first review report by the IMF Staff, which was released on the 17th of May, contains detailed estimates of both; the likely fiscal outcome in 2024-25 and budget estimates for 2025-26. The objective of this article is to identify, first; the deviations in the projected outcome in 2024-25 from the original budget estimates and second, to examine the magnitude of the key fiscal indicators for 2025-26. The budgetary outcome, according to the IMF Staff Report, is likely to be significantly better than originally envisaged. The budget deficit is estimated at Rs 6,486 billion, as compared to the initially targeted level of Rs 7,344 billion. This is perhaps the first time in many years we are likely to see this type of positive outcome. The budget deficit in 2024-25 is estimated at 5.6 percent of the GDP, as compared to the initial budget estimates of 6 percent of the GDP. How has this favorable outcome been achieved? It is primarily due to a significant containment of expenditure by Rs 1132 billion and a quantum jump in non-tax revenues of Rs 1614 billion. The steep reduction in interest rates in 2024-25 is likely to lead to a saving in the cost of debt servicing by as much as Rs 914 billion. The position on the revenue side is a projected shortfall in 2024-25 of only Rs 274 billion, despite a shortfall in FBR revenues of Rs 581 billion. Other sources of revenues are expected to yield Rs 307 billion higher revenues than originally targeted. The efforts by the government in restricting the size of the budget deficit to below the initially projected levels must be recognized, as has been done by the IMF. A large primary surplus of over 2 percent of the GDP is likely to be generated in 2024-25. Turning to the budget estimates for 2025-26, the first impression from the numbers in the IMF staff report is that the federal and provincial budgets for 2025-26 will not be expansionary in character, as in 2024-25. Total expenditure of the federal and provincial governments combined is targeted to increase by only 5.5 percent on 2025-26. This implies a fall in the public expenditure to GDP ratio from 21.6 percent of the GDP in 2024-25 to 20.3 percent of the GDP in 2025-26. Total current expenditure is anticipated to fall by 1.1 percent of the GDP. Interest payments are expected to be lower by 1 percent of the GDP, with the SBP policy rate down already to only 11 percent. Subsidies and grants are also expected to be lower in absolute terms. Development expenditure is targeted to stay at 2.5 percent of the GDP. The revenue estimates for 2025-26 are also more on the conservative side. The target growth rate of total revenues in 2024-25 was as high as 40 percent. It has apparently now been set in agreement with the IMF at close to only 15 percent. FBR revenues were projected to increase substantially by 39 percent in 2024-25. The actual increase is estimated at 32 percent. The big decline is anticipated in federal non-tax revenues in 2025-26. The SBP profits reached a peak level of Rs 2,500 billion in 2024-25. The quantum fall in interest rates implies that they will be much lower in 2025-26. Consequently, non-tax revenues are likely to fall by 33 percent. Based on low growth rates in total expenditure and total revenues of 5.5 percent and 6.9 percent respectively, the overall budget deficit is expected to show a 1.6 percent only change in magnitude in 2025-26. This implies that it will be 5.1 percent of the GDP in 2025-26, as compared to 5.6 percent of the GDP in 2024-25. The primary surplus will be somewhat lower at 1.6 percent of the GDP. There is a need for an assessment of the key budgetary magnitudes for 2025-26 in the IMF Staff Report. We focus initially on the expenditure side. The first key magnitude is the level of defence spending in 2025-26, in the presence of the military confrontation between Pakistan and India. The provision made in the Staff Report is for an increase of 12.2 percent, with the level of expenditure on defense services rising to Rs 2,414 billion. This implies an increase in absolute terms of Rs 262 billion. It is likely that a provision will have to be made for another Rs 300 billion. The absolute decline of Rs 96 billion in the combined spending on subsidies and grants also appears to be too optimistic. In particular, a provision has to be made for inflation indexation of the cash transfers and increase in the coverage of the Benazir Income Support Programme (BISP), in the presence of almost 110 million people now below the poverty line. Also, the slow pace of privatization of State-Owned Enterprises (SOEs) implies continuing increase in the burden placed on the federal budget by these entities Overall, it is likely that there has been under-provisioning of federal current expenditure by about 0.7 percent of the GDP, equivalent to Rs 900 billion. This will raise the budget deficit to 5.8 percent of the GDP. The projected level of revenues is also optimistic in nature. The problem starts with overestimation of FBR revenues in 2024-25 at Rs 12,332 billion. This implies a shortfall in relation to the target of Rs 581 billion. The shortfall has already exceeded Rs 820 billion in the first ten months of 2024-25. The more likely level of FBR revenues in 2024-25 is Rs 11,800 billion. The targeted level is Rs 14,307 billion of FBR revenues in 2025-26, withthe required growth rate of 21 percent. The normal increase is Rs 1,320 billion, in line with relatively low nominal GDP growth. As such, taxation proposals yielding Rs 1,200 billion will be required in the federal and provincial budgets. The yield from the agricultural income tax will play a role in achieving this target. The target increase in provincial tax revenues in 2025-26 is Rs 236 billion, including the normal increase. This will have to be increased to Rs 500 billion to target for an increase initially in the yield from the agricultural income tax of Rs 350 billion. The full revenue potential of this tax has been estimated at Rs 880 billion in the recent RASTA project of Pakistan Institute of Development Economics. However, in the event compliance in terms of payment of the tax is low, there may be a need to introduce withholding taxes, especially on large electricity bills. Further, focus will have to be on broadening the base of the sales tax on services and on development of provincial property-related taxes like the urban immoveable property tax and the capital value tax on property. Overall, there appears to have been significant underestimation of expenditures and a likely overstatement of FBR revenues in 2025-26. This has led to the estimation of a lower budget deficit in 2025-26. Modification of the numbers in the IMF Staff Report imply that the likely budget deficit in 2025-26 is not 5.1 percent of the GDP, but significantly higher at almost 6.5 percent of the GDP. Consequently, the primary surplus will be a negligible magnitude, and may even turn negative. The quality of financial management by both the federal and provincial governments will be tested in 2025-26. Already, there appears to be some difficulty in finalizing the budget for 2025-26, as demonstrated by extension of the date for presentation of the federal budget. Copyright Business Recorder, 2025

Date: 2025-05-27

Details: KARACHI: The Pakistan Business Forum (PBF) has urged the government to present a growth-focused budget in light of the current regional and economic situation. PBF President Khawaja Mehboob ur Rehman stressed that the upcoming budget must prioritize economic stability instead of just revenue generation. He warned that imposing more taxes could lead to an economic slowdown and harm long-term national interests. A budget that focuses only on meeting tax targets without addressing business and inflation concerns could worsen public and industrial stress. PBF also highlighted concerns over the governmentâ€™s reported plan to increase petroleum levy up to Rs100 per litre from July 1. Additionally, further taxation on electricity is being considered, which the forum believes will severely restrict economic activity. These measures, if implemented, could burden the already strained business sector and reduce industrial productivity. The forum believes such policies could discourage investment and delay recovery from the ongoing economic crisis. Businesses are already facing rising operational costs and shrinking margins. According to the Pakistan Business Forum, the government is also considering increasing tax targets by Rs2,000 billion in the new fiscal year. This figure, in their view, is unrealistic given the fragile state of the economy. Such a heavy tax burden would be unfair to the business community, which is already dealing with inflation and uncertainty. The forum recommended that the budget avoid new taxes and instead focus on relief for businesses and consumers. A more balanced approach could protect jobs and stabilize market conditions. The upcoming budget, scheduled to be announced on June 10, should provide direct support to the business environment and offer genuine inflation relief. The forum proposed reducing development expenditures and diverting those resources towards defence and economic recovery. They emphasized that the Ministry of Finance must acknowledge the exceptional nature of current challenges. Both the general public and national institutions cannot bear further inflation or instability. A responsible, supportive budget is essential for sustaining national strength

Date: 2025-05-27

Details: ISLAMABAD: The federal government is preparing to introduce bold measures in the upcoming budget with a focus on strategic direction, Finance Minister Muhammad Aurangzeb said Monday. While addressing an event organised by Karandaaz Pakistan and Pakistan Banks Association (PBA) here, the finance minister said that budget is not just about revenue and expenditure, it has to provide the strategic direction of where the economy is, and where it is heading. He added that rather than making the math work, the government intends to make the budget document more strategic. Govt to introduce â€˜bold measuresâ€™ in the upcoming budget, says Aurangzeb The federal budget for FY2025-26 will be presented on June 10, 2025. Meanwhile, the Pakistan Economic Survey 2024-25 will be released on June 9, 2025. Talking about the recent escalation of tensions between Pakistan and India, Aurangzeb said that these are very tense moments. The entire nation has rightly celebrated the way our armed forces and political leadership have stood up against the aggression. Aurangzeb shared that efforts were made to derail Pakistanâ€™s engagement with the International Monetary Fund (IMF). He said, there was no stone left unturned in terms of ensuring that the meeting with the IMF does not happen. If the meeting does happen, then these items are not on the agenda, whether it is the second tranche under the Extended Fund Facility (EFF) and the $1.3 billion under the Resilience and Sustainability Facility (RSF). However, we are beyond that, and our case was discussed and decided on merit. He said the unity shown by the nation against recent aggression is the same unity needed on the economic front. On macroeconomic stability, Aurangzeb emphasised the need to avoid repeating past mistakes. He said that we have achieved macroeconomic stability in yesteryears and in the previous decades as well, but we have squandered the opportunity. Because it is easy to get into a sugar rush, i.e. pump liquidity into the market, go for consumption-led growth, which triggers balance of payment and FX issues. He said that to break away from the boom and bust cycle, Pakistan needs to stay the course in terms of structural reforms. Aurangzeb shared that the government remains committed to simplifying the tax return filing process for the salaried class. â€œ70-80 per cent of the salaried class do not necessarily hold equity or income portfolios, why should they fill 140-150 measures? â€œWe are trying to bring it down to nine items, five on the wealth and four on the income tax side.â€ He said the government wants to implement the simplified process by the end of September. On the SoE reforms, the finance minister admitted that this is one area where we did not do well last year. He said that the government remains committed to accelerating reforms in this sector. He confirmed the PIA transaction has been relaunched and expressed optimism about its completion. On debt servicing, Aurangzeb said in the ongoing fiscal the government debt servicing cost has decreased by Rs1 trillion. â€œNext year, we are going to restructure/reorganize our debt management office along the modern lines,â€ he said. The finance minister was of the view that the ongoing structural reforms would put Pakistanâ€™s economy â€œon a path of sustainable growthâ€. Aurangzeb expressed optimism about Pakistanâ€™s long-term economic trajectory. Our economy has crossed the $400 billion level. This shows we are moving in the right direction but to become a $3 trillion economy by 2047, we need to mitigate two existential issues, i.e. population and climate. He said four out of the six points under the 10-year Country Partnership Framework inked with the World Bank deal with climate and population. Speaking about the importance of the initiative, Syed Salim Raza, chairperson Karandaaz, said: â€œKarandaaz is proud to support Pakistanâ€™s financial sector as it transitions toward purpose-driven finance. This training is part of our broader commitment to building the institutional capacity required to align with global investment standards and deliver measurable development outcomes. By strengthening local capabilities in impact measurement and sustainable finance, we are laying the foundation for a more inclusive and resilient financial system.â€ Addressing the participants, Director Development BHC Islamabad Jo Moir stated, â€œThis training underscores BHCâ€™s long-term engagement with Pakistanâ€™s financial sector. A decade ago, we supported the creation of Karandaaz as a special purpose impact finance vehicle. Today, it serves as a lighthouse for the sector, demonstrating scalable models for inclusive and sustainable finance.â€ The workshop is being led by Alex MacGillivray, executive director at the JIM Foundation and a globally recognised expert in impact measurement. With a career spanning development finance institutions and advisory work international impact investors, MacGillivray has delivered a highly practical curriculum that blended theory with real-world applications. â€œThe idea was to move beyond traditional credit models and introduce a more purposeful financing approach, one that drives measurable outcomes alongside financial returns,â€ said MacGillivray. â€œWith the right institutional momentum and leadership, Pakistan can play a key role in the global impact investing movement.â€ The training is covering a comprehensive range of topics, including strategic intent, impact governance, portfolio-level impact design, impact at exit and independent validation. Participants are engaging in interactive case studies, peer learning sessions, and scenario-based exercises aimed at translating concepts into actionable strategies. Articulating the sectorâ€™s commitment to sustainable finance, Muneer Kamal, CEO and Secretary General PBA, said, â€œPakistanâ€™s banking sector must lead from the front as we transition towards a more sustainable and impact-driven financial ecosystem. This partnership with MoF and Karandaaz reflects PBAâ€™s commitment to strengthening sectoral readiness and aligning capital with long-term national priorities.â€ This training reinforces the commitment by MoF, Karandaaz and PBAâ€™s ongoing efforts to strengthen institutional capabilities in Pakistanâ€™s financial sector and support the countryâ€™s transition toward sustainable, impact-oriented finance. As global standards for responsible investing continue to evolve, Karandaaz remains committed to equipping local actors with the tools and knowledge needed to access and manage development capital effectively. Copyright Business Recorder, 2025

Date: 2025-05-27

Details: ISLAMABAD: The Finance Ministry said on Monday that the presentation of the Federal Budget 2025-26 has been delayed from June 2 to June 10 due to disagreements with the International Monetary Fund (IMF) over key budgetary figures, including subsidy allocations. During a session of the Sub-Committee of the National Assembly Standing Committee on Commerce, chaired by Khurshid Ahmed Junejo, Joint Secretary (Corporate Finance) Sajjad Azhar outlined the governmentâ€™s challenges in revising the budget figures. The Sub-Committee is currently working to resolve the issue of outstanding receivables owed to the Trading Corporation of Pakistan (TCP), which total approximately Rs 317.5 billion. Of this, Rs 93.693 billion is principal, while Rs 223.797 billion is accrued markup. Aurangzeb says IMF case approved â€˜on meritâ€™ despite disruption attempts â€œAs you know, Pakistan is under the IMFâ€™s Extended Fund Facility, which restricts any changes to the allocated funds in the budget,â€ Azhar told the sub-committee. â€œThe budget announcement has been delayed by a week because the Finance Ministryâ€™s figures are still under reconciliation. The IMF has placed a cap on subsidies,â€ he added. Azhar further noted that the IMF has declined to make any changes to the revised budget figures recently presented to the Fundâ€™s team. The Sub-Committee held a detailed discussion on the TCP receivables. Tensions flared during the meeting between Sajjad Azhar and TCP Chairman Syed Rafeo Bashir Shah over the calculation of markup and loans obtained from commercial banks. Chairman Shah maintained that TCP distributed imported wheat and urea in line with Economic Coordination Committee (ECC) directives, yet payments remain outstanding since 2010. In response, Azhar stated that the ECC never approved covering the markup costs through the federal government. He added that the Finance Ministry has held five meetings with relevant stakeholders to reconcile the dues. The State Bank of Pakistan (SBP) was also approached to persuade commercial banks to reduce markup rates. However, the SBP clarified that since the agreements are commercial, no relief could be extended. The National Assembly panel urged the Finance Division to increase subsidy allocations to enable partial payment to TCP. Azhar informed the committee that the Finance Ministry recently secured commercial loans for Pakistan International Airlines (PIA) without any discounts. Similar arrangements are being considered to manage circular debt, with borrowing pegged at the Karachi Interbank Offered Rate (KIBOR) minus 0.2 percent. A summary on this matter is being submitted to the federal cabinet. He also mentioned that the Punjab government has committed to paying Rs 26 billion, while the federal government will release an equivalent amount next fiscal year. Additionally, Rs 15 billion will be disbursed to TCP on behalf of the Utility Stores Corporation (USC) and National Fertilizer Marketing Limited (NFML) during the current fiscal year, pending release authorizations from the respective ministries. Another Rs 30 billion will be earmarked in the upcoming budget. A representative from NFML stated that all dues, including markup, were cleared during 2023-24, and no further payments are pending. After an in-depth discussion, the panel decided to release the undisputed amount of Rs 90 billion to TCP in the first phase. A mechanism will be developed to address the markup issue in the second phase. It was also decided that TCP will conduct a special audit of its commercial loans to identify any discrepancies. panel members Shaista Pervaiz Malik and Rana Atif raised various concerns regarding the markup and called for swift resolution of outstanding payments.

Date: 2025-05-23

Details: Karachi, May 23, 2025 â€“ The National Clearing Company of Pakistan Limited (NCCPL) has officially announced that the capital gain tax (CGT) payment for the month of April 2025 will be due on Monday, June 2, 2025. This tax payment pertains to gains made on the disposal of shares at the Pakistan Stock Exchange (PSX) during the period from April 1 to April 30, 2025. According to the notification, the CGT payment will be collected through the respective settling banks of all Clearing Members (CMs). CMs have been urged to ensure that the necessary funds are available in their designated settlement bank accounts by the due date. The NCCPL emphasized that all relevant details and reports for this period are already accessible in the CGT System for timely reconciliation and processing. In addition to share disposals at PSX, the CGT liability arising from the redemption of units of open-end mutual funds during April 2025 has also been finalized. Detailed reports related to these transactions have similarly been uploaded to the CGT System for review. All Clearing Members are instructed to carefully verify investor-wise calculations of capital gains or losses, and the associated CGT payment obligations, by reviewing the relevant downloads and reports from the CGT System. Accurate verification is essential to ensure that no discrepancies occur at the time of payment. Importantly, the NCCPL has stated that in cases where the CGT payment is either partially made or entirely missed, it is mandatory for the Clearing Members to provide the names and UINs (Unique Identification Numbers) of the defaulting clients immediately after the collection date. This measure is to ensure accountability and proper follow-up. Non-compliance with the CGT payment procedure may lead to strict action under the rules and regulations applicable to NCCPL. All stakeholders are therefore strongly advised to fulfill their obligations without delay to avoid any regulatory complications.

Date: 2025-05-23

Details: Karachi, May 23, 2025 â€“ The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has secured a significant breakthrough, as top government officials have assured a review of the much-contested Tax Laws (Amendment) Ordinance 2025 following strong opposition from the business community. FPCCI President Atif Ikram Sheikh announced that Haroon Akhtar Khan, Special Assistant to the Prime Minister (SAPM) for Industries and Production, has given his personal assurance that the ordinance will be reconsidered in light of FPCCIâ€™s concerns and recommendations. Atif Ikram Sheikh, who also holds positions as President of ECO-CCI and Vice President of CACCI, called this assurance a â€œmajor policy advocacy successâ€ for FPCCI and a much-needed step towards business-friendly taxation. A senior delegation from FPCCI met with SAPM Haroon Akhtar Khan in Karachi to voice their deep reservations over the Tax Laws (Amendment) Ordinance 2025. The delegation highlighted what they described as the ordinanceâ€™s potential to increase harassment, corruption, and inefficiencies within the Federal Board of Revenue (FBR), instead of achieving the intended goals of better tax collection and digital transformation. Atif Ikram Sheikh argued that excessive human interaction in tax processes undermines fairness and transparency. â€œGlobally, less interaction between tax officials and taxpayers has proven to reduce corruption and maladministration. We must follow this proven model rather than adding more layers of human discretion,â€ he asserted. SAPM Haroon Akhtar Khan reaffirmed the governmentâ€™s commitment to addressing the concerns of the business community. He confirmed that Prime Minister Shehbaz Sharif has instructed the formation of dedicated committees to collaborate directly with FPCCI and other trade bodies to resolve policy issues. Adding to the progress, FPCCI Senior Vice President Saquib Fayyaz Magoon revealed that the government has agreed to extend the six-month exemption on Dangerous Petroleum Liquids (DPL) for another half-year, following FPCCIâ€™s lobbying. He emphasized the urgent need to define DPL properly and streamline its regulation, transportation, and availability for industrial use. The FPCCI delegation included industry heavyweights such as Hamid Arshad Zahur, Chairman of Pakistan Tannersâ€™ Association, and Haroon Ali Khan, Chairman of the Pakistan Chemical Manufacturers Association (PCMA), signaling the unity and strength of FPCCIâ€™s stance. With FPCCI pushing back against ill-conceived tax policies, the dialogue between the government and the business sector appears to be moving toward constructive solutions, ensuring that Pakistanâ€™s economic framework supports growth, transparency, and industrial sustainability.

Date: 2025-05-23

Details: Karachi, May 23, 2025 â€” The Medium Taxpayers Office (MTO) Karachi held an important awareness session on Friday for members of the Korangi Association of Trade and Industry (KATI), shedding light on the newly introduced automated tax invoicing system powered by Pakistan Revenue Automation Limited (PRAL). Organized at the KATI headquarters in Karachi, the session aimed to equip business owners with technical know-how about digital invoicing, e-filing, and payment systems now central to Pakistanâ€™s evolving tax infrastructure. Spearheading the event was Chief Commissioner MTO Karachi, Aftab Alam, who emphasized the Federal Board of Revenueâ€™s (FBR) vision of modernizing the tax ecosystem through digital transformation. Aftab Alam highlighted that the integration of PRAL software would drastically improve the efficiency of tax compliance for medium-sized enterprises. â€œOur mission at MTO Karachi is to foster a culture of ease and transparency. By introducing automation, we aim to minimize human interaction and boost trust in the system,â€ he stated. The session was well-attended by KATI leaders, including President Junaid Naqi, Acting Patron-in-Chief Zubair Chhaya, Senior Vice President Ejaz Ahmed Sheikh, Vice President Tariq Hussain, and Standing Committee Chairman Tariq Malik. Also present were representatives from FBR and former presidents of KATI, making it a collaborative platform for dialogue and reform. KATI President Naqi praised the initiative and expressed concern over the existing gap in trust between tax authorities and businesses. â€œWe appreciate MTO Karachiâ€™s engagement with the industrial community. However, unresolved sales tax refunds and audit-related challenges still hinder smooth operations,â€ Naqi said. He pledged KATIâ€™s support for continued reform and encouraged mutual accountability. Zubair Chhaya, KATIâ€™s Acting Patron-in-Chief, criticized the disparity between filers and non-filers, warning that the system currently penalizes compliance. â€œTrue tax reforms require fairness. If we remove the filer-non-filer distinction, the tax net could expand significantly,â€ he said. Tariq Malik suggested creating a direct liaison between KATI and the MTO to ensure constant feedback and communication. Meanwhile, Ejaz Sheikh underlined the importance of ongoing training programs, especially for smaller enterprises unfamiliar with digital tools. FBR officials concluded the session with a live demonstration of PRALâ€™s invoicing features. Participants raised pertinent issues, and MTO Karachi assured that their concerns would be addressed in future policy adjustments. In his closing note, Aftab Alam announced that MTO Karachi would hold regular outreach sessions at KATI and similar platforms to ensure widespread adoption of digital tax practices across the business community.

Date: 2025-05-23

Details: Karachi, May 23, 2025 â€“ In a move that could dramatically reshape Pakistanâ€™s economic trajectory, the Association of Chartered Certified Accountants (ACCA) Pakistan has launched a groundbreaking Budget Proposal for fiscal year 2025â€“26. Touted as a game-changing blueprint, the proposal lays out an ambitious yet practical roadmap to overhaul Pakistanâ€™s tax architecture, champion transparency, and unlock long-term sustainable growth. This isnâ€™t just another routine policy paper. Drawing on over a decade of deep-rooted engagement in Pakistanâ€™s fiscal reform process, ACCA Pakistan has marshaled the expertise of its Membersâ€™ Network Panel (MNP)â€”a powerhouse of finance professionals from leading firms and industries. The proposal also integrates cutting-edge research from ACCAâ€™s globally acclaimed Professional Insights reports, including Tax as a Force for Good and Public Trust in Tax, giving it both local relevance and global gravitas. â€œThis is more than a tax documentâ€”itâ€™s a strategic intervention,â€ declared Assad Hameed Khan, Head of ACCA Pakistan. â€œIt reflects our membersâ€™ voices across Pakistan, grounded in real-world experience and inspired by international best practices.â€ Echoing this vision, Aucky Pratama, Executive Director â€“ Asia Pacific, ACCA, emphasized the proposalâ€™s potential to ignite a wave of trust and opportunity: â€œOur budget recommendations aim to reshape Pakistanâ€™s taxation system into a growth engineâ€”fiscally responsible, economically empowering, and socially inclusive.â€ Haroon A Jan, Head of Member Engagement at ACCA, stressed the importance of practicality: â€œThis proposal was forged through the collective insight of our members in Pakistan, delivering reforms that are not only visionary but implementable.â€ Highlights from the ACCA Pakistan FY26 Budget Proposal: â€¢ Tax Law Simplification: Creation of an independent commission to declutter tax codes, inspired by the UK and India. â€¢ Policy Certainty: A 3â€“5 year roadmap to stabilize tax policies and attract investors. â€¢ Transparency & Trust: A digital Taxpayer Engagement Portal, modeled after systems in Canada and the UK. â€¢ Equity & Fairness: Equal tax treatment for all citizensâ€”whether salaried, self-employed, or sportspersons. â€¢ Targeted Incentives: Relief for IT, AI-driven R&D, green ventures, and documented sectors. â€¢ Digital Taxation 2.0: Broader e-filing mandates and AI-assisted audits, following models from Estonia and India. â€¢ Dispute Resolution Overhaul: Restoring tribunal neutrality by bringing appointments under FPSC. â€¢ Accountability Framework: A powerful, independent oversight body modeled on the U.S. TIGTA and Australiaâ€™s Inspector-General. The proposal also highlights the Top 3 Reform Priorities: 1. Tax Law Simplification 2. Policy Predictability 3. Real Estate Valuation Reform According to Rauf Ali Jan FCCA, Chairman of ACCA Pakistanâ€™s MNP and Head of the Taxation Subcommittee, â€œThis proposal underscores our intent to serve not just as advisors but as true partners in building Pakistanâ€™s economic resilience.â€ With this bold document, ACCA Pakistan has thrown down the gauntlet, challenging policymakers, institutions, and civil society to step up. The full proposal is now being disseminated to key stakeholders and promises to be at the heart of budget deliberations in the coming weeks.

Date: 2025-05-23

Details: Karachi, May 23, 2025 â€“ Foreign investors operating in Pakistan have called on the government to provide tax relief for the beverage industry in the upcoming federal budget for fiscal year 2025-26. Represented by the Overseas Investors Chamber of Commerce and Industry (OICCI), these investors have submitted comprehensive proposals, urging rationalization of the Federal Excise Duty (FED) structure currently burdening the sector. In their submission, foreign investors specifically highlighted the impact of the increased FED on aerated beverages, as detailed in Serial Nos. 4, 5, and 6 of the First Schedule of the Federal Excise Act, 2005. The tax rate on these beverages was raised from 13% to 20% via the Finance (Supplementary) Act, 2023â€”a surge of more than 50%. According to the investors, this sudden and steep hike has severely affected the beverage industry, leading to a 30% volume decline in 2023 and an additional 12% drop in 2024, pushing the sector back to 2018 production levels. The foreign investors argue that such excessive taxation discourages investment and stifles industrial growth, ultimately reducing government revenue over time. Despite navigating multiple challenges since 2020â€”including the COVID-19 pandemic, import restrictions, and rising inflationâ€”investors have continued to support the beverage sector. However, the abrupt tax increases risk derailing this progress. To stabilize the industry, the foreign investors have proposed a reduction of FED on aerated beverages from 20% to 18%. They believe this adjustment will curb further market shrinkage, protect jobs, and enable businesses to reinvest in production capacityâ€”ensuring long-term government revenue and economic recovery. Additionally, concerns have been raised about the drastic increase in FED on fruit juices (Serial No. 59), which rose from 0% to 10% in early 2023 and was later doubled to 20%. This has led to a 40% decline in juice sales and a 50% reduction in fruit pulp procurement, severely impacting local farmers. The foreign investors argue that the documented beverage sector, which adheres to strict tax compliance, is suffering disproportionately while the undocumented market flourishes. To address this, they have proposed reducing the FED on juices to 15%. The foreign investors believe this will ease inflationary pressures, sustain agricultural livelihoods, encourage reinvestment, and boost exportsâ€”currently valued at $15 million annuallyâ€”enhancing Pakistanâ€™s foreign exchange earnings. By revising tax policies, foreign investors assert that the beverage industry can rebound, contributing more effectively to economic resilience and national development.

Date: 2025-05-23

Details: Karachi, May 23, 2025 â€“ In a significant move to improve tax compliance and strengthen audit operations, the Federal Board of Revenue (FBR) has announced the deployment of approximately 520 third-party auditors across its various regional field formations. This step marks the beginning of a broader transformation initiative aimed at accelerating the tax scrutiny process nationwide. According to a formal statement issued by the FBR, this allocation of third-party auditors is the first phase of its ongoing FBR Transformation Plan. The newly recruited auditors will be stationed in three key regions: 120 in the North, 135 in the Central region, and 265 in the South. These placements are designed to boost FBRâ€™s audit coverage and increase efficiency in identifying and addressing tax discrepancies. To ensure a structured and consistent implementation, the FBR has issued detailed Standard Operating Procedures (SOPs) governing the onboarding and training of these third-party auditors. These SOPs are aimed at ensuring professional readiness, smooth integration into field formations, and the overall enhancement of audit quality. The FBR emphasized that while HR firms are responsible for vetting the quality of the auditors, Evaluation Committees will be established in each region to review and finalize the suitability of candidates. These committees will work closely with the FBR headquarters and may conduct evaluations either in-person or virtually, based on logistical feasibility. Each Chief Commissioner Inland Revenue (IR) will nominate a Focal Person at the BS-19 level or higher, who will act as a liaison between HR firms, regional field offices, and the FBR headquarters. These Focal Persons will be responsible for overseeing the onboarding process of the auditors, ensuring necessary arrangements such as office space, IT equipment, and administrative support. Moreover, all auditors are required to undergo a mandatory three-week online training program organized by the IRS Academy. Focal Persons will be tasked with facilitating this training by coordinating schedules, venues, and attendance logistics. As part of the onboarding process, HR firms will submit the final lists of selected auditors to FBR headquarters, which will then relay them to the respective Evaluation Committees. Immediate notification of Focal Persons will follow the release of the SOPs to expedite the deployment. This initiative reflects the FBRâ€™s growing reliance on third-party auditors to strengthen its institutional capacity and enforce tax compliance more rigorously.

Date: 2025-05-23

Details: Karachi, May 23, 2025 â€“ In a massive revenue windfall, the Federal Board of Revenue (FBR) has collected a staggering Rs30 billion in withholding tax from electricity consumers in Karachi during the first ten months (Julyâ€“April) of the current fiscal year 2024â€“25. This marks a sensational 52% surge compared to Rs19.50 billion collected in the same period last year. According to sources within the FBR, the sharp rise in tax collections stems from a combination of rising electricity tariffs and booming industrial demand in Karachi, Pakistanâ€™s economic nerve center. The tax was primarily collected by K-Electric, the sole electricity distribution company serving the metropolis. Officials said the hike in withholding tax is directly linked to increased power consumption and higher billing rates across both domestic and industrial sectors. â€œWith Karachiâ€™s industrial engines back in full throttle and temperatures soaring, electricity usage has skyrocketed â€” and so has the tax take,â€ a senior FBR official noted. Under Section 235 of the Income Tax Ordinance, 2001, the FBR is authorized to collect advance tax on electricity bills from commercial, industrial, and high-consumption domestic users. The tax is calculated based on the total amount of electricity consumed and is tiered according to usage: â€¢ No tax on monthly bills up to Rs500. â€¢ 10% tax on bills exceeding Rs500 but not more than Rs20,000. â€¢ For bills over Rs20,000, commercial consumers face Rs1,950 plus 12% of the excess amount, while industrial consumers pay 5%. â€¢ Domestic users pay 7.5% only if the bill exceeds Rs25,000. Consumers listed on the Active Taxpayersâ€™ List (ATL) are granted exemptions under specific slabs. The trend intensified in April 2025, with FBR recording Rs2.50 billion from Karachiâ€™s electricity consumption alone â€” up from Rs1.64 billion in the same month last year. Experts believe this surge highlights both the inflationary pressure on energy and the governmentâ€™s intensified drive to plug fiscal gaps via indirect taxation. For Karachi, it reflects a paradox: rising power costs burdening households and businesses, while simultaneously fueling record FBR tax gains. This extraordinary spike in tax collection may set the tone for future fiscal policy, with the FBR likely to maintain its focus on utility-based taxation as a reliable revenue stream.

Date: 2025-05-23

Details: Karachi, May 23, 2025 â€“ The Collectorate of Customs (Enforcement), Gadani, has announced a significant auction of confiscated vehicles scheduled for May 29, 2025. This large-scale Customs event will see nearly 85 vehicles presented for public bidding under the legal provisions of the Customs Act, 1969. This highly anticipated auction includes a wide array of old and used vehicles, ranging from luxury sedans and hybrid cars to SUVs and utility trucks. Many of the seized units are in non-operational condition, with several missing vital components such as hybrid batteries, seats, electric systems, or even engines. Among the notable listings are multiple Toyota models including Lexus, Prado, Crown Hybrid, Aqua, Prius, and Land Cruiser variants. Highlights include: â€¢ A Toyota Lexus (Model 2007), with a rusted body, missing engine and major parts. â€¢ Several Toyota Crown Hybrid cars from model years 2009 to 2019, many lacking batteries and electric components. â€¢ A Toyota Land Cruiser Prado (Model 2015) in relatively better shape. â€¢ Honda Civic (Model 2012) and Toyota Corolla Hybrid (Model 2018) also feature on the list but are severely damaged or rusted. The Customs department has clearly indicated that most of the listed vehicles are â€œnot roadworthyâ€ due to extensive wear, missing documentation, or structural issues. Nonetheless, these seized vehicles are expected to draw attention from spare parts dealers, scrap traders, and automotive restoration enthusiasts who may find value in individual components. This Customs auction is part of an ongoing drive to dispose of confiscated assets in compliance with legal mandates, and to recover revenue for the national exchequer. Participants are advised to thoroughly inspect the vehicles prior to bidding, as all sales will be on an â€œas-is, where-isâ€ basis. Detailed descriptions, including chassis numbers, engine types, and condition notes, have been made available by the Collectorate for transparency. Prospective bidders must adhere to the official terms and conditions laid out under the Customs rules. Interested individuals and dealers should mark their calendars for May 29, 2025, and contact the Collectorate of Customs (Enforcement), Gadani, for further information and bidding procedures.

Date: 2025-05-23

Details: Islamabad, May 23, 2025 â€“ A bitter twist awaits the sweet-toothed across Pakistan as the government prepares to slap a higher Federal Excise Duty (FED) on beloved treats like chocolates and cookies in the upcoming Budget 2025-26. Yes, your favorite late-night indulgence and teatime snacks could soon burn a deeper hole in your pocket. In a dramatic move aimed at boosting revenue, Pakistan is reportedly finalizing plans to impose steep FED hikes on a broad range of packaged consumer goodsâ€”primarily focusing on confectionery items such as chocolates, cookies, cakes, sauces, and snacks. Sources close to the budget deliberations suggest the new measures could rake in a staggering Rs 150 billion in taxes, hitting some of the most consumed products in the country. The cookie and chocolate industry, which has witnessed explosive growth in recent years, is now bracing for a tax storm. Industry estimates show that the biscuit and cookie sector, valued at a colossal Rs 206 billion, could be forced to cough up Rs 48.6 billion in taxes, with Rs 41.1 billion coming from FED alone. The chocolate and sweets market in Pakistan, especially strong in Punjab with a Rs 201 billion share, is expected to generate Rs 47.4 billion in taxes, including a hefty Rs 40.2 billion from FED. This fiscal strategy, while being hailed as a â€˜smartâ€™ taxation approach by policymakers, could cause uproar among consumers. The plan targets non-essential and processed foodsâ€”luxuries for some, daily delights for others. Itâ€™s a calculated gamble: increase taxes on widely enjoyed items like cookies and chocolates, but avoid direct pressure on staples for lower-income households. Finance Ministry insiders argue that by targeting these discretionary consumption sectors, Pakistan can address its fiscal deficit without strangling essential goods markets. Moreover, shifting the tax burden to high-consumption but previously under-taxed categories offers a path toward broader economic stability and equity. Still, critics warn that the price surge in cookies, chocolates, and similar items may hit middle-class consumers hardest and dampen retail momentum. For now, as Pakistan inches closer to finalizing its Budget 2025-26, one thing is certainâ€”your favorite chocolate bar and cookie pack are about to get a lot more expensive.

Date: 2025-05-23

Details: Islamabad, May 23, 2025 â€“ In a stunning blow to the countryâ€™s vital export sector, the Federal Board of Revenue (FBR) has flatly denied any plans to reinstate the Final Tax Regime (FTR) for exporters in the upcoming Budget 2025-26. This firm stance, revealed during a heated session of the National Assembly Standing Committee on Finance, has ignited alarm bells across Pakistanâ€™s business community, particularly among struggling exporters already reeling under an escalating tax burden. Despite persistent appeals from exporters and leading trade bodies, the FBR stood its ground. A senior FBR member informed the committee that the final tax regime, which previously allowed exporters to pay a fixed turnover-based tax, is off the tableâ€”primarily due to stern opposition from the International Monetary Fund (IMF). â€œThe IMF has categorically objected to any special tax treatment for exporters, insisting that all sectors must fall under the standard corporate tax regime,â€ stated FBR Member Inland Revenue, Najeeb Ahmad. He emphasized that the decision to eliminate the final tax regime aligns with IMF directives to standardize Pakistanâ€™s tax system. Adding to the exportersâ€™ woes, Ahmad also disclosed that the upcoming budget might include sales tax on the import of raw materials under the Export Facilitation Scheme (EFS)â€”a measure previously overlooked. The move would further hike production costs for export-based industries, already suffering from the withdrawal of zero-rating and Regional Competitive Energy Tariffs (RCET). The business community responded with fury. Karachi Chamber of Commerce and Industry (KCCI) President, Muhammad Javed Balwani, slammed the decision, warning that exporters are now subjected to an unbearable tax load ranging between 29% and 45%. â€œSmall and medium exporters are being forced out of business. There is no working capital leftâ€”refunds under the â€˜FASTERâ€™ system take months despite a promised 72-hour timeline,â€ he lamented. PPP MNA Naveed Qamar also criticized the move, arguing that forcing exporters into the normal tax regime results in double taxation, crushing their financial viability and eroding competitiveness. The final verdict on tax policy for exporters may not be written yet, but the FBRâ€™s firm dismissal of the final tax regime has sparked a fierce debate. With Budget 2025-26 looming, exporters are bracing for impact, fearing the loss of their co

Date: 2025-05-22

Details: Karachi, May 22, 2025 â€“ The Government of Sindh has officially notified the implementation of super tax rates on agricultural income, following the enactment of the Sindh Agricultural Income Tax Act, 2025. This landmark legislation introduces a structured framework for the taxation of high-income agricultural landowners, with the super tax designed as an additional levy over and above the existing tax under Section 3(1) of the Act. Effective from the agricultural income year commencing January 1, 2025, the super tax will be assessed annually and is applicable at progressive rates based on the total agricultural income earned. The rates are detailed in the Second Schedule of the Act and are aimed primarily at large-scale agricultural operations generating significant revenues. The following super tax rates apply to varying income brackets: 1. 0% for income up to Rs150 million 2. 1% for income exceeding Rs150 million but not exceeding Rs200 million 3. 2% for income exceeding Rs200 million but not exceeding Rs250 million 4. 3% for income exceeding Rs250 million but not exceeding Rs300 million 5. 4% for income exceeding Rs300 million but not exceeding Rs350 million 6. 6% for income exceeding Rs350 million but not exceeding Rs400 million 7. 8% for income exceeding Rs400 million but not exceeding Rs500 million 8. 10% for income exceeding Rs500 million This move is being seen as part of Sindhâ€™s broader efforts to enhance revenue generation from the agricultural sector, which has traditionally enjoyed a lighter tax burden compared to other sectors. The introduction of the super tax aims to bring greater equity and fiscal balance, ensuring that high-income earners within the agricultural economy contribute more significantly to provincial resources. Observers note that this policy could also drive more transparency in income reporting within the agricultural sector, which has often been criticized for underreporting earnings. However, it remains to be seen how stakeholders respond to the enforcement and collection mechanisms for the new super tax regime.

Date: 2025-05-22

Details: Islamabad, May 22, 2025 â€“ In a major move to curb tax evasion, the Federal Board of Revenue (FBR) is set to propose significantly heavier penalties on non-compliant retailers in the upcoming federal budget for 2025-26. During a recent meeting of the Senate Standing Committee on Finance, FBR officials revealed a plan to raise the existing fine for tax-evading retailers from Rs0.5 million to a maximum of Rs5 million. The FBRâ€™s proposal is part of a broader strategy to enhance tax compliance among the retail sector, which remains largely undocumented. Targeting nearly seven million retailers nationwide, the initiative seeks to improve registration at Points of Sale (POS) and crack down on underreporting of sales. The FBR emphasized that this tougher stance on tax evasion is essential to plugging revenue leakages and ensuring fair taxation. To encourage public participation, the FBR is introducing a reward scheme aimed at individuals who report fake receipts issued by retailers to dodge taxes. Under the proposed plan, informants will be eligible to receive cash rewards of up to Rs10,000. This move is expected to foster greater transparency and create deterrence against the issuance of bogus invoices. The FBR also outlined measures to strengthen field monitoring, including the installation of surveillance cameras and deployment of additional staff at key retail locations. These steps are part of an aggressive enforcement campaign that has already seen daily closures of non-compliant businesses in major cities like Karachi, Lahore, and Islamabad. Retailers in high-risk sectors such as poultry, beverages, tobacco, and sugar mills are likely to face closer scrutiny, given their history of tax avoidance. At the same time, the FBR acknowledged concerns raised by Senate Finance Committee Chairman Saleem Mandviwala over delayed tax refunds. Officials assured that refunds in key export sectorsâ€”textiles, sports goods, leather, and surgical equipmentâ€”will now be expedited. A national media campaign, possibly involving university students to assist in oversight, is expected to be launched soon to raise awareness against fake receipts. If approved by Parliament, the new penalties on retailers will come into effect from July 2025, strengthening FBRâ€™s enforcement toolkit against tax evasion.

Date: 2025-05-22

Details: Islamabad, May 22, 2025 â€“ Parliamentary Secretary Sheikh Saad Waseem said on Wednesday that the government is prioritizing tax compliance and broadening the tax base instead of taking punitive actions like blocking mobile SIMs. Speaking during the question hour in the National Assembly, Saad emphasized that effective and citizen-friendly policies are yielding positive results in the countryâ€™s revenue system. He informed the House that since 2022, the government has successfully brought nearly 8 million individuals into the tax net through targeted reforms, digitalization, and awareness campaigns. Responding to a query raised by MNA Shazia Soomro, Saad acknowledged that while exact figures for reduced tax evasion are not currently available, indicators suggest a steady decline in non-compliance. â€œThe government is not looking to implement controversial or harsh measures like SIM blocking,â€ Saad explained. â€œInstead, our focus is on encouraging voluntary compliance, streamlining tax filing procedures, and integrating systems to make it easier for citizens to fulfill their obligations.â€ In reply to another question by Khawaja Izhar, the parliamentary secretary disclosed that 458,342 individuals have recently been added to the tax net, while 276,000 people filed tax returns this year alone. From 2022 to 2025, the total number of taxpayers has increased by a remarkable 8 million, including 3.1 million new filers added just in the current year. Saad Waseem reiterated the governmentâ€™s dedication to creating a robust and transparent tax system that supports economic stability and sustainable development. He noted that increased tax collection not only strengthens the national economy but also enables the state to improve infrastructure, education, healthcare, and other public services. The governmentâ€™s approach underlines a shift from coercive tactics to a more collaborative and technology-driven framework, with Saad highlighting the importance of public trust and participation in building a fairer fiscal environment. Saad urged citizens to actively participate in building a tax-compliant society, ensuring better governance, national progress, and improved social welfare systems.

Date: 2025-05-21

Details: Islamabad, May 21, 2025 â€“ The Federal Board of Revenue (FBR) has initiated a detailed investigation to identify federal officials who are simultaneously drawing a salary and pension. The move comes in line with the directives issued by the Finance Division to ensure greater transparency and accountability in public sector compensation. In a formal office order circulated to all Director Generals and Chief Commissioners of Inland Revenue, the FBR has requested comprehensive data on federal government pensioners who have been re-employed after the age of 60. These individuals, despite being retired, continue to serve in various public departments either on a contractual basis or through regular appointments and are receiving both salary and pension. The FBR emphasized that this dual benefit scenario must be closely monitored to align with existing financial policies. Offices of Inland Revenue have been instructed to submit detailed profiles, including the name of the re-employed official, their date of retirement, date of re-employment, current place of posting, and whether they have opted to retain their pension or are receiving a full salary. The board has set a deadline of May 26, 2025, for all regional tax offices to provide the required data covering all retired employees from grade BS-1 to BS-16 who fall under this category. The collected information will be forwarded to the Finance Division and the Accountant General Pakistan Revenue for further evaluation. This effort is aimed at identifying potential overlaps or irregularities in the disbursement of pension and salary payments. It is part of a broader initiative to streamline federal expenditures and eliminate inefficiencies in public payroll systems. The FBR clarified that receiving both a salary and pension is not inherently illegal but must be properly documented and justified under service rules. The exercise is expected to enhance fiscal discipline and provide clarity on how re-employed pensioners are compensated within the government structure.

Date: 2025-05-21

Details: May 21, 2025 Karachi, May 21, 2025 â€“ In a bold and dramatic move, the Federal Board of Revenue (FBR) has zeroed in on 72 ultra-wealthy and influential individuals, launching a high-stakes investigation into their foreign income and offshore assets. The tax watchdog is set to unleash a new wave of scrutiny, targeting Pakistanâ€™s financial elite whose undisclosed fortunes abroad are now under the microscope. According to sources inside the FBR, this list of 72 individuals includes some of the most affluent names in the countryâ€”people with significant income streams and asset holdings both within Pakistan and in foreign jurisdictions. The Large Taxpayers Office (LTO) Karachi has been specially assigned to lead the charge, using data gathered through the Automatic Exchange of Information (AEOI) systemâ€”an international cooperation framework designed to combat tax evasion by sharing financial data across borders. To accelerate the investigation, the FBR has reshuffled the internal structure of the AEOI Zone at LTO Karachi, ensuring rapid processing and targeted follow-ups. Through this zone, Pakistanâ€™s tax authorities receive detailed financial records of citizens who earn foreign income or own overseas assets. In return, the FBR shares similar data on foreign nationals residing in Pakistan with their respective countries of origin. The revelations obtained through this global exchange are explosive. FBR insiders confirm that the department has received actionable data involving billions of dollars in foreign income and unreported assets. This flood of information has prompted immediate actionâ€”official notices will soon be dispatched to the selected individuals, demanding explanations for the wealth that was never declared in their annual tax filings. This move signals a fierce new phase in Pakistanâ€™s war against tax evasion and illicit offshore wealth. The FBR is tightening the noose around those who have long remained untouchable, sending a powerful message: no hidden foreign income, no secret offshore asset, will escape scrutiny. The nation now watches closely as the FBR prepares to confront the powerful eliteâ€”those whose global fortunes may soon be exposed under the unforgiving light of accountability.

Date: 2025-05-21

Details: Karachi, May 21, 2025 â€“ Banks in Pakistan have raised significant concerns regarding the existing framework for tax recovery enforced by the Federal Board of Revenue (FBR) on account holders. As part of their tax proposals for the upcoming budget 2025-26, banks have highlighted key challenges related to the process and communication of tax recovery notices, calling for urgent reforms to ease operational difficulties and improve transparency. Banks report that current tax recovery procedures under sections 176 and 140 of the Income Tax Ordinance, 2001, have created operational inefficiencies and disputes. One major issue is that a single recovery notice often demands information or action relating to multiple taxpayers, complicating the banksâ€™ ability to comply effectively. Moreover, banks point out that customers are not routinely informed about recovery notices as mandated under Rule 210C of the Income Tax Rules, 2002, causing confusion and dissatisfaction among account holders. Further, banks note that recovery notices are sometimes issued by officers other than the Commissioner, which goes against Rule 201B of the Income Tax Rules, adding to procedural inconsistencies. The notices often lack clarity about whether all legal prerequisites have been fulfilled by the relevant officer, leading to disputes among banks, regulators, and customers alike. Additionally, recovery notices frequently omit the tax period concerned, making it difficult for banks to reconcile these demands with stay orders submitted by customers. To address these challenges, banks have proposed important amendments to the recovery rules. These include drafting a standardized information and recovery notice in consultation with the Pakistan Banking Association (PBA) and the State Bank of Pakistan (SBP) to minimize non-compliance and operational risks for financial institutions. It is also recommended that customers receive copies of all correspondence related to recovery actions. Banks advocate for issuing clear operational instructions to field officers and require FBR to develop a uniform recovery notice format ensuring full legal compliance and transparency. Including the tax period in recovery notices will greatly facilitate reconciliation with stay orders, improving efficiency. Importantly, banks propose the formation of a centralized recovery unit within the FBR to streamline tax recovery processes. This unit would enhance coordination between regulators and financial institutions, ultimately reducing disputes and fostering smoother recovery operations. By implementing these changes, banks aim to establish a fairer, more transparent, and efficient tax recovery mechanism, benefiting both the financial sector and taxpayers alike.

Date: 2025-05-21

Details: Karachi, May 21, 2025 â€“ The Large Taxpayers Office (LTO) Karachi has once again demonstrated its exceptional prowess in revenue mobilization by amassing an unprecedented Rs2.56 trillion in tax collections during the first ten months (July to April) of the fiscal year 2024-25. This outstanding achievement underscores LTO Karachiâ€™s vital role as the cornerstone of Pakistanâ€™s fiscal strength and its unwavering commitment to supporting the nationâ€™s economic stability. Official sources on Wednesday revealed that the net tax collection at LTO Karachi marked an impressive growth of 27% compared to Rs2 trillion collected during the same period last fiscal year. This remarkable increase reflects the relentless dedication and efficiency of the LTO Karachi in broadening the tax base and enhancing compliance among large taxpayers. What makes this growth even more commendable is the significant Rs114 billion in refunds that LTO Karachi processed and disbursed to taxpayers during this period, showcasing the officeâ€™s transparency and taxpayer-friendly approach. As the largest revenue-collecting unit under the Federal Board of Revenue (FBR), LTO Karachi continues to set high benchmarks. The detailed revenue breakdown reveals that direct taxes have been the major driver of this success story. Collections under direct taxes surged by 28%, reaching an impressive Rs1.37 trillion during July to April, up from Rs1.07 trillion last year. LTO Karachiâ€™s excellence extends to indirect taxes as well. The sales tax collections soared past the Rs1 trillion mark, registering a healthy 22% increase compared to Rs839 billion in the previous fiscal period. Notably, the sales tax on domestic supplies increased by a striking 30%, while the import-stage sales tax rose by 14%, reflecting growing economic activity and improved tax administration in Karachi. Moreover, the collection of Federal Excise Duty (FED) experienced a phenomenal growth of 55%, soaring to Rs172 billion against Rs111 billion in the previous year. This extraordinary performance highlights LTO Karachiâ€™s critical role in enhancing federal revenues and contributing significantly to the countryâ€™s economic development. In conclusion, LTO Karachiâ€™s stellar tax collection figures for 10MFY25 exemplify its position as a linchpin of Pakistanâ€™s revenue system, bolstering economic growth and ensuring fiscal sustainability for the future.

Date: 2025-05-21

Details: ISLAMABAD, May 21, 2025 â€“ In a shocking move that has rattled the corridors of Pakistanâ€™s civil service, the Federal Board of Revenue (FBR) has officially dismissed Inspector Customs Syed Momin Hussain Shah from service, following a sensational corruption scandal involving illegal weapons, smuggling, and undeclared luxury assets worth Rs150 million. This bombshell dismissal was issued after a high-profile raid by the Federal Investigation Agency (FIA) in Hyderabad uncovered a jaw-dropping cache from Shahâ€™s residence, including 68 licensed and unlicensed weapons, hunting trophies, jewelry, and non-customs paid vehicles. The magnitude of the findings left investigators stunned, sparking immediate suspension orders and a full-scale departmental inquiry. The inquiry, led by Ms. Mona Mehfooz (PCS/BS-20), laid bare Shahâ€™s involvement in misconduct, corruption, and subversive activities. Her detailed report confirmed that Shah was in illegal possession of valuable contraband and had accumulated assets far beyond his declared sources of income. Even more damning was digital forensic data from Shahâ€™s mobile phone, which reportedly linked him directly to smuggling and other illicit activities. Despite being given ample opportunity to defend himselfâ€”including a virtual hearing with FBRâ€™s Member (Admn/HR)â€”Shah failed to present any convincing evidence. Instead, he accused FIA officials of carrying out a â€œpersonal vendettaâ€ and pointed to a partial court acquittal in one FIR. But that defense fell flat, as other criminal charges and investigations, including one by the Wildlife Department, are still pending in court. The FBR wasnâ€™t convinced. In a move meant to set a precedent, the authority imposed the major penalty of â€œDismissal from Serviceâ€ with immediate effect, citing the need to preserve integrity and accountability in public institutions. The gravity of the case and the scale of assets involved make this one of the most sensational dismissals in recent FBR history, sending a clear message: corruption will not be tolerated, no matter how powerful the official. Shah now has 30 days to appeal the decision, but insiders suggest the evidence against him is overwhelming. This scandal may be far from over, as more revelations could emerge in the ongoing criminal investigations.

Date: 2025-05-21

Details: ISLAMABAD, May 21, 2025 â€“ In the upcoming federal budget for 2025-26, the government is preparing to expand the list of luxury items that will be subject to a higher sales tax rate of 25 percent. This move is aimed at generating more revenue and offsetting the expected losses from reduced customs and regulatory duties. According to reliable sources, the Federal Board of Revenue (FBR) plans to either amend the existing SRO 297(I)/2023 or introduce a new schedule under the Sales Tax Act through the Finance Bill 2026. The changes will broaden the definition of luxury goods by adding more high-end products such as home appliances, expensive tiles, decorative wallpapers, branded wristwatches, and other imported or high-value items. Currently, under SRO 297(I)/2023, the government has already imposed a 25% sales tax on a wide range of luxury goods. These include aircraft, yachts, jewelry, designer cosmetics, imported food items, high-end mobile phones, fancy dÃ©cor items, specific vehicles, and cigarettes, among others. The tax was originally raised from 17% to 25% and applied to 33 different categories, covering more than 860 tariff lines. The new plan suggests that even more luxury items will be taxed at this elevated rate to strengthen the revenue base. The idea is simple: those who can afford luxury should contribute more in taxes. This policy shift also aims to discourage unnecessary imports of non-essential goods and promote domestic production where possible. The government believes that expanding the list of items under the 25% sales tax bracket will help balance the fiscal deficit. With customs duties, regulatory duties, and Additional Customs Duties (ACDs) being gradually reduced as part of the broader tariff reforms, the higher tax on luxury goods is seen as a way to maintain revenue flow without burdening essential goods or everyday consumers. Economists and policy analysts suggest that the revised sales tax plan is targeted, since it focuses on consumption by the wealthy rather than the general population. However, some critics warn that the continued expansion of the 25% sales tax could hurt certain industries, especially those reliant on imports for raw materials or semi-luxury items. In summary, the government is moving ahead with plans to extend the 25% sales tax to more luxury products in the 2025-26 budget. Whether through an amendment to the existing SRO or a new schedule under the law, consumers should be prepared to pay more for high-end goods in the near future.

Date: 2025-05-18

Details: The Federal Board of Revenueâ€™s (FBR) much-hyped Tajir Dost Scheme â€” an initiative designed to bring retailers and traders into the formal tax net â€” has officially ended in failure, according to the latest International Monetary Fund (IMF) country report on Pakistan, released on May 17, 2025. Launched in April 2024, the Tajir Dost Scheme (or Trader Friend Scheme) was the FBRâ€™s most ambitious effort to register small businesses, retailers, and traders by offering simplified registration processes and fixed monthly tax liabilities. It aimed to build trust between the tax authority and the business community by positioning the FBR as a â€œdostâ€ or friend to the tajir class. However, the scheme failed to generate the expected results. â€œThe indicative target on tax revenues from retailers under the Tajir Dost Scheme was discontinued at the time of the First Review,â€ the IMF report noted. It has now been replaced with a new focus: monitoring income tax revenues from retailers through alternative means. Despite the failure of this scheme, the FBR has seen modest success in collecting withholding taxes from unregistered businesses, which led to a 51% year-on-year increase in tax filers among tajirs, wholesalers, and retailers. Furthermore, there was a 38% rise in filers with positive tax liabilities as of January 2025. This partial success led the IMF to introduce a revised target focused on income tax revenue rather than depending solely on a scheme like the Tajir Dost. While the IMF approved the formal scrapping of the Tajir Dost Scheme, it imposed new conditions on the FBR. The revenue body is now required to submit monthly progress reports detailing the number of registered retailers, the value of tax returns filed by newly registered taxpayers, and the total revenue collected. Ultimately, the end of the Tajir Dost Scheme reflects longstanding challenges in formalizing Pakistanâ€™s vast informal economy. While the FBRâ€™s reliance on indirect methods like withholding taxes shows some promise, the failure of yet another retailer-focused scheme highlights the need for a more comprehensive and trust-based approach to engaging the tajir community in Pakistan.

Date: 2025-05-18

Details: Islamabad, May 18, 2025 â€“ The Federal Board of Revenue (FBR) has intensified its efforts to crack down on high-risk taxpayers, particularly within Pakistanâ€™s booming real estate and retail sectors. Utilizing its advanced Compliance Risk Management (CRM) system, the FBR has initiated a targeted campaign to enhance revenue collection and ensure tax compliance from entities that have historically remained outside the tax net. According to FBR sources, the tax authority is strengthening its enforcement capabilities by leveraging CRM analytics to pinpoint high-risk taxpayers. This includes identifying irregular tax behavior across the real estate, retail, and corporate sectors. The FBR aims to broaden its compliance net by increasing the number of tax auditors, launching mass notification drives, and expanding its integrated Point-of-Sale (POS) system to onboard more retailers. The FBRâ€™s enhanced strategy also focuses on scrutinizing suspicious import declarations. Special attention is being given to imports that display abnormal patterns, especially those involving smuggling-prone goods. A major area of concern remains the informal tobacco sector. In this regard, the FBR has rolled out multiple initiatives, such as mandating the use of bonded warehouses for acetate tow imports, banning its transit to Afghanistan, and restricting these imports to verified filter and tobacco manufacturers. Officials added that CRM systems are now fully operational in the Large Taxpayer Offices (LTOs) located in Islamabad, Karachi, and Lahore, and have also been extended to Corporate Tax Units. These systems, currently powered by internal data, will soon incorporate third-party information to develop a fully automated framework for detecting high-risk taxpayers. Despite underwhelming results from the Tajir Dost Scheme, recent increases in withholding tax on unregistered businesses have driven notable progress. FBR reports a 51% year-on-year increase in filer registrations among retailers and a 38% increase in those declaring positive tax liabilities as of January 2025. To reinforce this momentum, the FBR has submitted a bill to Parliament that proposes abolishing the â€œnon-filerâ€ category entirely. If passed, it would restrict non-filers from major economic transactions, especially real estate and vehicle purchasesâ€”sectors often associated with high-risk taxpayers. These robust compliance measures signal the FBRâ€™s resolve to enforce taxation equity, curb evasion, and bring more high-risk taxpayers into the documented economy.

Date: 2025-05-18

Details: Islamabad, May 18, 2025 â€“ The Federal Board of Revenue (FBR) has formally issued SRO 816(I)/2025 to expand the scope of the transit fee imposed on commercial goods destined for Afghanistan through Pakistan. The move is part of a broader effort to tighten regulatory controls and address the persistent misuse of Afghan Transit Trade privileges. Under the newly issued SRO, the FBR has extended the 10% ad valorem processing fee to a wider range of Afghan-bound goods transiting via Pakistan. The updated list includes a comprehensive array of industrial and commercial items such as cranes, derricks, boilers, automatic data processing machines, electrical apparatus, agricultural machinery, and dozens of other products previously not covered under the fee structure. This development marks a significant amendment to the earlier SRO 1380(I)/2023, which had introduced the 10% fee on five major categories: confectioneries and chocolates, footwear, home textiles and blankets, garments, and mechanical and electrical machinery. With the latest changes, the FBR aims to ensure greater oversight and minimize revenue losses caused by goods being routed through Pakistan into Afghanistan at lower duties. The FBRâ€™s decision follows strong recommendations from the Ministry of Commerce. The ministry highlighted that Afghanistanâ€™s customs duties are considerably lower than Pakistanâ€™s, and this disparity has been exploited by traders on both sides of the border. According to officials, such exploitation undermines Pakistanâ€™s revenue system and distorts trade patterns. To counter this misuse, the Ministry proposed two key reforms: first, replacing the existing Revolving Insurance Guarantee with a 100% bank guarantee based on assessed value; second, extending the 10% processing fee to categories of goods that have shown unjustified spikes in transit volume, suggesting evasion tactics. The FBR has acted swiftly on these recommendations. The newly listed goods subject to the fee include not just high-value machinery and equipment but also various types of electrical parts, transmission apparatus, cameras, industrial tools, and even electronic waste. This expansion of the fee is intended to close loopholes and ensure fair trade practices within the Afghan Transit Trade framework. By implementing these measures, the FBR reinforces its commitment to protect Pakistanâ€™s revenue base while promoting lawful commerce. Importers and customs clearing agents are advised to stay updated with FBR regulations to avoid any fee-related penalties or disruptions in cross-border trade operations.

Date: 2025-05-18

Details: Karachi, May 18, 2025 â€“ The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has categorically rejected the recently issued Tax Laws (Amendment) Ordinance, 2025, calling it a major setback for the economy and a threat to investor confidence. At a press conference held at Federation House, FPCCIâ€™s Senior Vice President, Saqib Fayyaz Magoon, raised strong objections to the Amendment, warning that it would fuel corruption and harassment rather than streamline the taxation process. â€œThe government claims to be promoting a faceless customs regime, but at the same time, it is deploying Inland Revenue officers directly into factories and industrial units. This contradiction undermines the credibility of reform,â€ Magoon said. He questioned the integrity of such officers, sarcastically asking whether they had been issued â€œcertificates of honesty.â€ He warned that placing FBR personnel on manufacturing sites would not only hinder operations but also create a breeding ground for corruption and abuse of authority. Magoon further criticized the Amendment for granting sweeping powers to the Federal Board of Revenue (FBR), including the right to recover taxes directly from business bank accounts under Section 140â€”without prior notice. He compared the removal of appeal rights for taxpayers to bypassing due legal process, calling it â€œa direct assault on justice.â€ Another major concern raised by the FPCCI leadership was the governmentâ€™s attempt to phase out captive power generation, which, they said, would destroy billions of dollars of private investment in energy infrastructure. The Amendment, they argued, directly conflicts with the Special Investment Facilitation Councilâ€™s (SIFC) goal of attracting foreign investment while the FBR continues to harass local businesses. Vice President FPCCI Muhammad Aman Paracha highlighted the deepening â€œtrust deficitâ€ between the government and the business community, asserting that tax revenue targets would remain unmet unless confidence was restored through consistent long-term policy. He stressed the need for a 10-15 year economic plan. Nasir Khan, another FPCCI Vice President, condemned the Amendment, saying that enemies of the economy were not outside Pakistanâ€™s borders, but within the policymaking circles. He appealed to the Army Chief to safeguard investor interests. Senior FPCCI leader Bashir Jan Mohammad urged immediate dialogue with the Prime Minister to address the damage caused by the Tax Laws (Amendment) Ordinance, 2025 and prevent further erosion of industrial stability.

Date: 2025-05-18

Details: Islamabad, May 18, 2025 â€” In a significant policy shift toward environmental sustainability, Pakistan is poised to impose a carbon levy in the upcoming federal budget for fiscal year 2025-26. This decision aligns with the governmentâ€™s broader strategy to reduce dependence on fossil fuels and accelerate the transition to clean energy and electric vehicles (EVs). Pakistan has reached an agreement with the International Monetary Fund (IMF) to implement this reform as part of a broader structural adjustment program. Authorities have assured the IMF of their commitment to ambitious reforms aimed at reducing carbon emissions and promoting greener alternatives in the energy and transport sectors. As part of this initiative, Pakistan will introduce a supplementary carbon levy on liquid fuels. This carbon levy will be incorporated into the existing Petroleum Development Levy (PDL) and will initially target gasoline and diesel. A base rate of Rs5 per liter will be implemented and phased in gradually over the next two years. Additionally, fuel oil will be included under the PDL, with both base and supplementary carbon levy rates expected to become effective by the end of June 2025. The carbon levy will be legally enforced through the Finance Act for fiscal year 2025-26, setting a legislative foundation for the government to increase the levy in future Finance Acts if necessary. By establishing this mechanism, Pakistan aims to internalize the environmental costs of carbon emissions while also encouraging a shift to cleaner energy alternatives. Aligned with the New Energy Vehicle Policy (NEVP) 2025-2030, the government is also planning a revenue-neutral package within the FY26 budget. This includes a subsidy scheme for electric vehicles and a corresponding supplementary tax on internal combustion engine vehicles. The goal is to ensure that at least 30% of new vehicle sales in Pakistan are electric by 2030. To support EV infrastructure, Pakistan will adopt a Viability Gap Funding (VGF) framework to attract private investment in charging stations. The framework will offer one-time subsidies and utilize an open bidding process to ensure transparency and competition. The first round of bids is scheduled for launch by February 2027. With technical and financial support from institutions like the Asian Development Bank (ADB) and International Finance Corporation (IFC), Pakistan is committed to ensuring the VGF framework adheres to global best practices while minimizing fiscal risks. This multi-pronged strategy marks a decisive move by Pakistan to address climate change through the strategic use of a carbon levy and sustainable energy policies.

Date: 2025-05-18

Details: Islamabad, May 18, 2025 â€” In a major policy shift aimed at liberalizing trade and boosting industrial efficiency, Pakistan has announced plans to phase out additional duties and taxes on raw materials used in the auto sector. The move is part of the broader National Tariff Policy 2025â€“2030 and reflects the governmentâ€™s commitment to reforming its tariff regime in line with international best practices. According to the latest country report released by the International Monetary Fund (IMF), Pakistan has pledged to eliminate all additional dutiesâ€”including import and sales taxesâ€”that are currently imposed on â€œlocalizedâ€ components and inputs used in the auto sector. The government also plans to dismantle the system of special duties applied to imports designated for this sector. These reforms will affect tariff lines covered under the 5th Schedule to the Customs Act as well as SRO 655(I)/2006, which has historically governed incentives for local auto manufacturers. The reform process will be carried out gradually to avoid disruptions in the auto sector and to allow businesses time to adjust. The IMF report notes that this approach is consistent with the phased implementation strategy outlined in the National Tariff Policy, which seeks to enhance competitiveness and reduce cost inefficiencies across industries. Importantly, the policy will also apply to new electric vehicle (EV) production. In this context, tariffs and preferential tax treatments for certain EV-related inputs will be reviewed and regularized to ensure a level playing field across the auto sector. By July 2026, the government aims to extend this principleâ€”removing preferential treatment of domestic productionâ€”to other sectors of the economy. This wider application will be rolled out gradually through fiscal year 2030, in consultation with relevant ministries and industry stakeholders. The reform is expected to improve transparency, promote fair competition, and enhance investment prospects in the auto sector, which has long been protected through special duties and tax incentives. With these changes, Pakistan hopes to position its auto sector for sustainable growth, technological advancement, and increased integration into global supply chains.

Date: 2025-05-15

Details: As Pakistan prepares its fiscal roadmap for 2025â€“26, the Federal Board of Revenue (FBR) is actively exploring new strategies to regulate and tax the booming online shopping sector. With e-commerce experiencing rapid growth, particularly in major cities among middle- and high-income groups, the government sees a significant untapped revenue source within digital retail. According to officials familiar with the matter, the FBR is working on a proposal to impose General Sales Tax (GST) on goods purchased through online shopping platforms, especially those paid via cash-on-delivery. Under one proposal, a 3% GST would be deducted by the delivery agent on behalf of the FBR during cash transactions, while the remaining 15% GST would be charged by the productâ€™s manufacturer and added to the overall price. Additionally, the FBR is reviewing methods to tax online transactions made using debit and credit cards. While a Federal Excise Duty (FED) already applies to international card-based payments, there is currently no such duty on local e-commerce purchases. The revenue authority believes closing this gap could help broaden the national tax base. A recent study conducted by the FBR highlighted the exponential rise of online shopping across urban Pakistan, underscoring the need for structured taxation in this sector. As part of its plan, the FBR intends to introduce legislative amendments requiring all e-commerce platformsâ€”whether they hold inventory or function purely as marketplacesâ€”to collect and remit sales tax to the government. However, tax analysts have raised concerns about the impact of such policies. They argue that aggressive taxation on online shopping could stifle the sectorâ€™s growth just as it gains momentum. These experts warn that imposing taxes prematurely might discourage small businesses and tech startups from investing in the e-commerce space. Despite criticism, the FBR maintains that now is the right time to integrate online shopping into the formal tax framework. Officials argue that delaying tax regulation will only complicate future compliance, making it harder to bring e-commerce businesses and consumers into the fold. As online shopping continues to evolve, the FBR appears determined to ensure the sector contributes fairly to Pakistanâ€™s economy.

Date: 2025-05-15

Details: If youâ€™re planning to import or export goods through Pakistanâ€™s borders, registering with Pakistan Customs is a critical first step. The Federal Board of Revenue (FBR) has introduced a web-based platform called WeBOC (Web-Based One Customs) to streamline customs clearance and ensure transparency in trade procedures. Hereâ€™s a step-by-step guide on how to register for Pakistan Customs and gain access to the WeBOC system: ________________________________________ Step 1: Prepare the Required Information Before starting your application, ensure you have the following details and documents ready: â€¢ NTN (National Tax Number) â€¢ STRN (Sales Tax Registration Number) â€¢ Business Name and Address â€¢ Contact Person Details (Name, CNIC, Phone Numbers, Cell Number, Email) â€¢ Bank Account Information (Bank Name, Branch, Account Number) â€¢ Relevant License Numbers (if applicable) â€¢ Collectorate Jurisdiction â€¢ Warehouse Location (if applicable) â€¢ Shipping Line Type or Terminal Location (if applicable) You can download the official WeBOC External User Registration Form from the FBRâ€™s website or obtain it from the Customs office. ________________________________________ Step 2: Submit the Application Once the form is complete: 1. Submit the filled registration form to the User-ID Section of the Collectorate that has jurisdiction over your business. 2. Attach all required supporting documents, including a copy of your CNIC, NTN certificate, STRN certificate, business registration documents, and bank account verification. ________________________________________ Step 3: Personal Appearance and Verification After submitting the form: â€¢ The applicant must appear in person before the Deputy or Assistant Collector at the User-ID Section. â€¢ The officer will verify the original CNIC. â€¢ A digital photo and thumb impression will be captured during the appearance. ________________________________________ Step 4: Business Premises Inspection (If Required) â€¢ In some cases, the Customs department may conduct a physical visit to your business premises for verification purposes. ________________________________________ Step 5: Approval and User ID Issuance â€¢ After verification, the application will either be approved or rejected. â€¢ Upon approval: o A WeBOC User ID will be created. o A Login ID will be issued. o A computer-generated password will be sent automatically to the applicantâ€™s registered email address. ________________________________________ Final Words Registering with Pakistan Customs and gaining access to WeBOC is essential for traders, shipping agents, warehouse operators, and terminal operators. By following the proper procedure, you can ensure timely clearance of your goods and compliance with national trade laws. For more information or to download the registration form, visit the official FBR website or consult your nearest Collectorate of Customs. (Note: For further details please visit official website of Federal Board of Revenue (FBR) or visit the nearest collectorate of Pakistan Customs.)

Date: 2025-05-15

Details: Karachi, May 15, 2025 â€“ The Regional Tax Office-1 (RTO-1) Karachi has uncovered a major scam involving fake and flying invoices, exposing tax fraud worth billions of rupees. In a press release issued on Thursday, RTO-1 Karachi confirmed that it had launched a major operation against fraudulent invoicing practices. During this crackdown, the RTO-1 Karachi team arrested a key suspect named Shahzad from the FrÃ¨re Road area. Initial investigations suggest that more than a dozen businesses are involved in this widespread fraud. Shahzad was produced before the Special Court of Customs, Taxation, and Anti-Smuggling, which granted a three-day physical remand for further questioning. Authorities believe that with more interrogation, more names involved in the racket will be revealed and the actual amount of tax loss to the national exchequer will be determined. RTO-1 Karachi officials have reiterated their resolve to take strong action against tax fraud and ensure that all those involved are held accountable. The department stated that this operation is part of a broader national plan to crack down on tax-related crimes and ensure transparency in business practices. This latest move by RTO-1 Karachi highlights the growing efforts by tax authorities to fight corruption and protect government revenues. Officials emphasized that similar actions will be carried out in the future to target other criminal networks engaged in tax evasion. RTO-1 Karachi has once again demonstrated its commitment to enforcing tax laws and cleaning up the system by going after individuals and businesses involved in fake and flying invoicing. The crackdown is a significant step towards restoring public trust and ensuring fair tax collection across the country. The public is encouraged to report any suspicious tax activities to RTO-1 Karachi. Citizensâ€™ cooperation is vital to stopping such fraudulent practices and building a transparent, accountable tax system for the nationâ€™s economic stability.

Date: 2025-05-15

Details: Karachi, May 15, 2025 â€” The Karachi Chamber of Commerce and Industry (KCCI) has issued a strong warning to the federal government, signaling the possibility of a nationwide protest if the newly introduced tax laws under the Tax Ordinance Amendment 2025 are not immediately withdrawn. The chamberâ€™s president, Jawed Bilwani, voiced serious concerns over what he termed as unjust, anti-business regulations that risk destabilizing Pakistanâ€™s fragile economic environment. Addressing the business community and media, President Bilwani called on the government to initiate inclusive and transparent dialogue with stakeholders from trade and industry before implementing any further fiscal measures. â€œIf the ordinance is not rolled back promptly, the business community may be forced to take united action through peaceful, nationwide protests to safeguard the economy and their survival,â€ he stated. Referring to widespread disapproval from trade organizations, including the KCCI, Federation of Pakistan Chambers of Commerce and Industry (FPCCI), and various regional chambers, Bilwani criticized the governmentâ€™s decision to enforce sweeping tax laws without consultation or parliamentary debate. He described the ordinance as a â€œregressive and impracticalâ€ move that contradicts the governmentâ€™s own commitment to a business-friendly environment. Bilwani particularly praised MNA Dr. Mirza Ikhtiar Baig for his vocal opposition to the ordinance, noting that his support reflects a growing recognition within political circles of the need for fair and balanced tax reform. The KCCI president stressed that the current amendment risks alienating documented businesses and would further widen the gap between the private sector and the Federal Board of Revenue (FBR). One of the most damaging aspects of the new laws, Bilwani explained, is the imposition of advance tax demands based on presumed income, without regard for industry-specific cycles or cash flows. This approach, he warned, could cripple small and medium enterprises, many of which already operate under financial strain. Moreover, the ordinance grants sweeping powers to tax officials, including the ability to freeze bank accounts and initiate recoveries without prior notice â€” a move the KCCI strongly opposes as a violation of natural justice. â€œThese provisions are bound to create an environment of fear, discourage entrepreneurship, and repel both domestic and foreign investment,â€ Bilwani said. Equally troubling, he added, is the criminalization of minor procedural lapses under the new laws. Businesses can now face fines and prosecution over clerical errors or delayed filings, despite the ongoing digitization of the tax system, which still suffers from inefficiencies. Bilwani further criticized the ordinance for failing to address the broader issue of tax base expansion. He noted that the burden continues to fall on already compliant sectors, while vast informal areas such as retail, real estate, and agriculture remain untouched. â€œThis selective enforcement promotes economic inequality and discourages formalization,â€ he argued. Highlighting the need for stable and predictable policy, the KCCI president condemned the governmentâ€™s use of executive orders to implement critical tax laws, bypassing the legislative process. Such actions, he said, undermine transparency, legal certainty, and investor confidence. Bilwani concluded by reaffirming that the business community supports tax reform â€” but only if it is based on fairness, consultation, and a genuine effort to widen the tax net. The KCCI called for immediate suspension of the ordinance and urged the government to engage in meaningful discussions to create laws that promote compliance, investment, and sustainable economic growth.

Date: 2025-05-15

Details: The federal government is currently evaluating a proposal to extend significant tax relief to the tobacco sector in the forthcoming federal budget for the fiscal year 2025â€“26. Industry representatives have reportedly submitted two key demands: the creation of a third excise duty tier with a lower rate of Rs 2,525 per 1,000 cigarette sticks, and a reduction in the current federal excise duty (FED) from Rs 5,050 to Rs 3,800 per 1,000 sticks. These proposals arrive at a contentious time, as the tobacco industry faces mounting criticism for alleged manipulation of production data and potential tax evasion. During a recent roundtable hosted by the Sustainable Development Policy Institute (SDPI) in Karachi, Muhammad Asif Iqbal from the Social Policy and Development Centre (SPDC) accused major manufacturers of intentionally misreporting production volumes to shape fiscal policy in their favor. Iqbal presented data showing a 19.2% increase in tobacco production during the Julyâ€“December period of the current fiscal year, compared to the same period last year. Paradoxically, despite this rise in output, the government recorded a 2.4% decline in FED collections and a dramatic 26.1% drop in GST revenues. These figures, according to Iqbal, point to systemic issues within the industryâ€™s tax compliance. The SPDC report also revealed that illicit cigarette trade continues to pose a challenge, with 21.3% of the market composed of locally produced, tax-evading products. Smuggled cigarettes account for an additional 11.9%. However, Iqbal argued that contrary to the industryâ€™s claims, high taxes are not the primary cause of this illicit tradeâ€”rather, the tobacco sectorâ€™s own underreporting and evasion practices are largely to blame. Public health experts and fiscal analysts are raising red flags, warning that granting tax relief could severely undermine Pakistanâ€™s anti-smoking efforts and fiscal credibility. There are signs that the International Monetary Fund (IMF) might support the governmentâ€™s proposals, which could enable the tobacco industry to secure additional profits of Rs 10â€“20 billion annually. Critics stress that any short-term financial gain would likely be outweighed by a far greater long-term health cost. As the budget announcement nears, the governmentâ€™s decision on the tobacco tax structure remains under intense scrutiny from both local and international observers.

Date: 2025-05-14

Details: ISLAMABAD: Appellate Tribunal Inland Revenue, Islamabad has directed three leading State-Owned Enterprises (SOEs) to immediately approach Federal Board of Revenue (FBR) for the constitution of Alternative Dispute Resolution Committees (ADRCs) to resolve their tax related disputes. These appeals, involving fiscal disputes between various State-Owned Enterprises (SOEs) and the State, have been instituted before the ATIR before July 1, 2024. â€œFor SOEs, participation in the ADRC mechanism is not an exercise in discretion but a statutory compulsion. The text of the law is couched in mandatory terms, leaving no interpretive ambiguity. An SOE is obligated to approach the FBR for the Constitution of an ADRC, and unlike its non-SOE counterpart, it does not possess the liberty to assess the desirability of this route. More importantly, the statute mandates that SOEs must withdraw all pending appellate proceedings prior to the initiation of ADRC proceedings, ATIR directed the SOEs. According to the order of the ATIR, the present appealsâ€”being instituted by a state-owned enterprise â€” are no longer maintainable before this forum by operation of law. The remedy available to the appellants now lies exclusively within the domain of the ADRC constituted under Section 134A of the Income Tax Ordinance, 2001. The concerns raised by the appellants regarding the Constitutionality of the framework, however legitimate they may be, fall outside the scope of our jurisdiction and must be addressed before the appropriate constitutional forum. Accordingly, the subject appeals, filed both by the department and SOEs are disposed of without adjudication on merits. The SOEs shall approach the Federal Board of Revenue for the constitution of an ADRC in accordance with law. The Department shall ensure expeditious facilitation in this regard, so that the objective of speedy and amicable dispute resolutionâ€”so central to the philosophy of the amended lawâ€”may be realised in letter and spirit, ATIR order added.

Date: 2025-05-14

Details: LAHORE: Pakistan Revenue Automation Limited (PRAL) is committed to render cost free services to all taxpayers for digital invoicing systems and its integration with FBR. This was announced by Abid Naeem General Manager PRAL while addressing APTMA members. He said that it is mandatory for all taxpayers to install and integrate Digital Invoicing System with FBR with effect from June 01, 2025 by corporate sector and by July 01 by non-corporate members. Earlier Asad Shafi Chairman APTMA North welcomed PRAL team and appreciated them for arranging awareness session on Digital Invoicing. He said that in terms of Rule 150Q of Sales Tax Rules, 2006 all taxpayers are required to electronically integrate their hardware and software used for generation and transmission of electronic invoices through licensed integrators. Asad said that under Rule 150XF PRAL has been notified as Licensed Integrator to provide free of cost integration services to taxpayers. He added that the initiative of PRAL to conduct awareness sessions all over the country will help for education, awareness and guidance of taxpayers. Asad hoped that the training on the new system would help tremendously to guide all taxpayers well before implementation of the system. Asad Shafi hoped that such seminars will shed light on how Digital Invoicing can transfer financial operations, streamline, emphasize and foster a more transparent and efficient system. Abid Naeem GM PRAL, emphasized the critical need for businesses to embrace technological innovations. He informed that PRAL as the licensed integrators provides end-to-end free of cost assistance with structured implementation and ongoing support. He said that PRAL offers direct integration and manages compliance with regulatory requirements, helping businesses to avoid penalties. He continued that direct integration relieves businesses from technicalities and enables them to handle compliance independently. Abid said that Pakistanâ€™s financial sector is undergoing a massive digital transformation. With the Federal Board of Revenueâ€™s SRO 69(I)/2025, businesses must adapt to new e-invoicing mandates to remain compliant to improve their transparency. He said that seminar, is aimed to simplify the transition process by highlighting practical steps and addressing any concerns that the market participants may have. He added that PRAL, remains committed to providing secure, efficient, and compliant digital solutions that empower organizations of all sizes. Abid said that PRAL has always championed digital innovation in Pakistan. It is enabling businesses to seamlessly integrate e-invoicing with existing ERP systems and workflows. He added such seminars are designed to address the common challenges and misconceptions around FBR-compliant invoicing, ultimately helping participants to realize the benefits of automation, enhanced visibility, and real-time data analytics.

Date: 2025-05-14

Details: LAHORE: The sales tax department has secured penalty and default surcharge imposed against a taxpayer due to delay in filing of tax return and deposit of tax due. As per details, tax authorities had initiated recovery proceedings against a taxpayer for filing delayed tax return. However, the Appellate Tribunal Inland Revenue set aside imposition of penalty and default surcharge on the ground that liability on account of principal amount of tax stood discharged voluntarily prior to initiation of recovery proceedings. However, the department was of the view that show cause notice was issued on the allegations of delayed filing of tax returns and delayed payment of tax due and payable, whereby the factum of delay in filing returns and non-payment of tax on due dates was acknowledged which situation attracts incidence of penalty and default surcharge. He taxpayer objected to this approach that the department cannot make an order of assessment of tax if default is addressed upon payment of tax before issuance of notice along with default surcharge and penalty and filing of returns after due date. However, the higher appellate forum did not agree with taxpayers maintaining that consequence of incidence of default is default surcharge and penalty, even if no tax is payable as per the tax return. Default position can only be reversed/addressed by opting for concession prescribed in the law subject to fulfilment of conditions depending upon ye nature of default. Mere filing of delayed return of tax, before issuance of notice, would not be considered as act of compliance, especially when default had triggered, which can be reconciled upon voluntarily meeting the conditions prescribed in the law. It is inconceivable how a default, once accrued, would stand reconciled without fulfilling the legal requirements, which are required to be given effect without referring to incidence of any order of assessment of tax or notice, as condition precedent for claiming default surcharge and penalty, adding that creating novel condition tantamount to legislate through a judicial verdict. Therefore, the department proved its case and the higher appellate forum set aside the order of the tribunal and remanded the matter to the department for de novo determination after affording opportunity of hearing to parties. Copyright Business Recorder, 2025

Date: 2025-05-14

Details: KARACHI: Industrialists categorically rejected the recently introduced Tax Laws (Amendment) Ordinance, 2025, describing it as undemocratic, unconstitutional, and a death warrant to industries. They denounced the ordinance for granting disproportionate authority to the Federal Board of Revenue (FBR), especially regarding tax recovery. Signed into effect by the President of Pakistan Asif Ali Zardari, the ordinance amends Sections 138 and 140 of the Income Tax Ordinance, 2001, along with key portions of the Federal Excise Act, 2005. The changes permit the FBR to execute immediate enforcement measuresâ€”such as freezing accounts, confiscating property, and sealing business premisesâ€”once a final ruling is issued by the High Court or Supreme Court, with no requirement for additional notice. The ordinance also allows FBR personnel to be physically deployed within factories and commercial sites to oversee production, stock levels, and the movement of goods. President FBATI Sheikh Muhammad Tehseen has condemned this as a serious infringement on operational freedom and a new layer of bureaucratic intrusion. â€œHaving tax officers embedded in our workplaces is not only invasive but amounts to institutional harassment,â€ said the FBATI president. â€œThis legislation undermines constitutional rights, weakens the role of the judiciary, and creates a hostile environment for current and potential investors.â€ He criticized the move for bypassing legislative and judicial oversight, which he said is a clear violation of the countryâ€™s constitutional framework. Calling the ordinance overstep of authority, he stated, â€œThis kind of enforcement leaves no room for voluntary compliance or appeals. Itâ€™s coercive and strips businesses of basic legal protections.â€ President SITE Superhighway Association of Industries (SSHAI) Pervaiz Masood said that the government allowed tax authorities to recover taxes from industries at gunpoint, which is an unlawful and unconstitutional act. The ordinance will seriously hit the business confidence within the country, he said. Not only it will discourage investments at a local level, but industries may move to other countries to avoid harassment culture. Copyright Business Recorder, 2025

Date: 2025-05-14

Details: Karachi, May 14, 2025 â€“ The Karachi Tax Bar Association (KTBA) has put forth a significant recommendation as part of its tax proposals for the upcoming budget 2025-26: a ban on all property transactions undertaken by individuals who are not active filers of income tax returns. This bold proposal aims to broaden the tax base and enhance compliance within the real estate sector. In its comprehensive budget recommendations, the KTBA also addressed critical issues surrounding withholding tax under Sections 236C and 236K of the Income Tax Ordinance, 2001. The association specifically urged the government to significantly reduce the existing withholding tax rates on property transactions. The KTBA argued that the current withholding tax rates imposed on property transactions under sections 236C and 236K are excessively burdensome and serve as a major impediment to activity within the real estate market. While acknowledging that these taxes were initially implemented as a mechanism for the Federal Board of Revenue (FBR) to gather crucial data on both buyers and sellers of property, the KTBA contends that the FBR has now amassed a sufficient amount of this information. Continuing to primarily utilize these withholding taxes as a revenue generation tool, according to the KTBA, places undue and unnecessary pressure on the real estate sector. This sector has already navigated substantial challenges in recent years, making the high tax rates particularly detrimental. The KTBA firmly believes that drastically reducing these withholding tax rates would provide much-needed relief to the struggling real estate sector and, in turn, encourage greater transactional activity. By making property transactions less financially prohibitive, the association anticipates a revitalization of the market. The proposed ban on non-filer transactions, coupled with lower tax rates for filers, represents a two-pronged approach by the KTBA to foster growth and compliance within the property market. This proposal sparks debate on balancing revenue needs with sector growth, impacting Pakistanâ€™s economic landscape.

Date: 2025-05-14

Details: Karachi, May 14, 2025 â€“ Pakistanâ€™s once vibrant gem and jewellery export sector has come to an abrupt standstill following a recent and unexpected move by the federal government. The sudden suspension of SRO 760(1)/2013, the critical regulatory framework governing the legal export of gold and jewellery, has sent shockwaves through the industry. Exporters are now facing a state of limbo, with millions of dollars worth of consignments stranded and crucial international contracts hanging in the balance, igniting widespread alarm. The Pakistan Gems Jewellery Traders & Exporters Association (PGJTEA) has urgently appealed to Prime Minister Muhammad Shehbaz Sharif, imploring for the immediate reinstatement of the vital SRO 760(1)/2013. This plea follows the Ministry of Commerceâ€™s unforeseen decision to suspend the framework for the next two months, a move the association argues has severely disable their operations. In a formal letter addressed to the Prime Minister, the PGJTEA voiced profound concern over this unilateral decision. The association emphasized the severe disruption it has caused to the organized and compliant gold jewellery export sector. PGJTEA Chairman Imran Khan Tessori stated emphatically, â€œThis unexpected move has placed our legitimate and transparent export operations in grave jeopardy, leaving significant consignments stranded, threatening our existing contracts, and severely damaging Pakistanâ€™s hard-earned export credibility.â€ Mr. Tessori further revealed the staggering impact of the suspension, noting that export consignments valued at an estimated $50â€“60 million are currently ready for shipment but are now unable to proceed due to the abrupt suspension of SRO 760(1)/2013. He underscored the critical timing of this disruption, highlighting that at a moment when the nation is in dire need of foreign exchange reserves, impeding legal exports is an illogical and counterproductive action. The PGJTEA sought to clarify the operational integrity of its members, asserting that they have consistently adhered to the legal framework. They emphasized their exclusive use of authorized channels for gold imports, their strict avoidance of grey market practices, and their unwavering focus solely on exports, with no involvement in the domestic market. The association stressed the inherent unfairness of the suspension, arguing that it unjustly penalizes law-abiding exporters while likely having minimal impact on illicit activities that operate entirely outside the purview of SRO 760(1)/2013. Highlighting the significant economic repercussions, the PGJTEA cautioned that this suspension arrives at a precarious juncture when Pakistan is actively striving to bolster its exports and stabilize its foreign exchange reserves. â€œThis sudden policy reversal carries the significant risk of triggering a further decline in our nationâ€™s exports and severely undermines the livelihoods of thousands of individuals employed within the formal jewellery sector,â€ the associationâ€™s letter articulated. PGJTEA Chairman Imran Khan Tessori has directly requested the Prime Ministerâ€™s immediate intervention to reinstate SRO 760(1)/2013. This urgent action is deemed essential to ensure business continuity and facilitate the clearance of all pending shipments and transactions, thereby mitigating substantial financial losses and potential legal ramifications for exporters. Furthermore, Mr. Tessori has advocated for the inclusion of a PGJTEA representative in any investigative committee formed to review the matter. This inclusion, he argues, would ensure a fair and transparent review process and empower the committee to propose targeted amendments that effectively address any misuse of the SRO without inflicting harm on compliant exporters. While expressing their support for the governmentâ€™s efforts to strengthen regulation and accountability within the sector, the association cautioned against implementing blanket measures that inadvertently disrupt legitimate trade. They earnestly urged the Prime Minister to take swift action to restore confidence within the exporting community, prevent avoidable economic damage, and reaffirm Pakistanâ€™s standing as a reliable partner in international markets. The PGJTEA concluded their letter with a pressing call for â€œprompt action in the national interest,â€ expressing their firm trust in the Prime Ministerâ€™s leadership to guide the countryâ€™s trade policy towards a more balanced and export-friendly trajectory.

Date: 2025-05-14

Details: The latest figures released by the Pakistan Auto Manufacturers Association (PAMA) have sparked renewed debate over the countryâ€™s growing economic inequality, as car sales data reveals a stark contrast in consumer behavior across income groups. Sales of luxury vehicles in Pakistan â€” those with engine capacities of 1300 CC and above â€” soared by 47% in the first 10 months (Julyâ€“April) of fiscal year 2024â€“25, reaching 40,369 units compared to 27,429 units sold during the same period last year. This surge in high-end vehicle sales underscores a significant shift of purchasing power toward Pakistanâ€™s affluent class, raising questions about the nationâ€™s uneven economic recovery and persistent income disparity. In contrast to the booming luxury car segment, sales of mid-range cars (1000 CC) plummeted by 36%, dropping from 6,093 to just 3,919 units. The lower-end car segment â€” vehicles with engine capacities below 1000 CC â€” saw a 32% increase in sales, from 29,440 to 38,981 units, reflecting an opposite trend among cost-conscious consumers. The diverging sales figures paint a clear picture of class polarization in Pakistanâ€™s automotive market. While the elite class continues to spend on luxury items, including imported and locally assembled high-end cars, middle-income groups are being squeezed out of the market, shifting instead to smaller, more affordable vehicles â€” or giving up car ownership altogether. Analysts point to this disparity as evidence of a widening class divide in Pakistan, where a segment of the population has remained largely insulated from economic pressures, while the majority faces shrinking purchasing power and rising inflation. The situation has also caught the attention of tax authorities. The Federal Board of Revenue (FBR) is being urged to enhance scrutiny of luxury car sales in Pakistan, as the trend may also reflect underreported wealth and potential tax evasion. Car manufacturers and dealers are legally required to provide detailed buyer information â€” including Computerized National Identity Card (CNIC) or National Tax Number (NTN) â€” and to collect withholding tax at designated rates. According to Section 165 of the Income Tax Ordinance, 2001, withholding agents must submit quarterly statements detailing the identity of buyers, total payments made, tax collected, and any other relevant details. As luxury car sales boom while middle-class car ownership declines, the automotive sector now stands as a visible symbol of Pakistanâ€™s deepening class divide â€” one that policymakers can no longer afford to ignore.

Date: 2025-05-14

Details: Karachi, May 14, 2025 â€“ The Sindh Revenue Board (SRB) has successfully conducted its inaugural computerized prize ballot draw, celebrating customers who actively verified their invoices from businesses integrated with Point of Sale (POS) systems. This landmark event, held at the SRB headquarters on Tuesday, marks a significant step towards enhancing transparency and encouraging responsible tax behavior across Sindh. A total of 105 fortunate individuals were selected through a sophisticated automated ballot system during the draw. These winners will be rewarded with a variety of prizes, including 67 cash awards, simply for taking the proactive step of verifying the authenticity of their service receipts via official SRB channels. This customer-centric prize scheme is a key component of the SRBâ€™s ongoing efforts to seamlessly integrate POS invoicing systems within various service sectors, including popular restaurants, esteemed beauty parlors, and well-frequented gyms, directly with the boardâ€™s advanced computerized network. This crucial integration facilitates real-time reporting of all transactions, empowering consumers to effortlessly verify the legitimacy of their invoices. Customers can easily confirm their invoice authenticity by conveniently scanning QR codes or meticulously checking SRB invoice numbers through the user-friendly â€œeSRBâ€ mobile application or the official SRB website. â€œThis innovative system achieves two vital objectives,â€ stated a representative from the SRB. â€œFirstly, it ensures unparalleled transparency in tax collection processes. Secondly, it provides invaluable peace of mind to diligent customers, assuring them that their hard-earned tax contributions genuinely reach government coffers.â€ The SRBâ€™s proactive initiative has garnered enthusiastic participation from service recipients across the province. This positive response underscores the publicâ€™s willingness to engage with measures designed to combat potential tax evasion while simultaneously incentivizing them to actively demand properly documented transactions utilizing POS systems. Following the resounding success of this first prize draw, SRB officials have expressed strong confidence that an increasing number of customers will be motivated to request invoices generated from POS-integrated businesses and diligently verify them through the designated official channels. The board firmly believes that this customer-driven approach will play a pivotal role in significantly enhancing revenue collection transparency and fostering greater public trust in the overall taxation system. Prior to the draw, the POS integration scheme was extensively promoted through widespread public awareness campaigns across Sindh province. This proactive communication strategy effectively generated substantial awareness and encouraged widespread participation in the initiative, highlighting the benefits of engaging with businesses utilizing compliant POS systems. The SRB looks forward to continuing this engagement and further promoting the importance of verifying invoices from POS-enabled establishments.

Date: 2025-05-14

Details: LAHORE, May 13, 2025 â€” The Lahore Chamber of Commerce and Industry (LCCI) has strongly urged the Federal Board of Revenue (FBR) to withdraw two recently issued statutory regulatory orders (SROs) â€” SRO 578(I)/2025 and SRO 709(I)/2025 â€” which have sparked serious concern within the cement distribution sector. In a formal letter addressed to Prime Minister Shehbaz Sharif, LCCI President Mian Abuzar Shad highlighted the far-reaching negative consequences of these SROs. The appeal followed an in-depth meeting between the LCCI and a delegation from the All Pakistan Cement Distributors Association, in which the operational and financial implications of the SROs were extensively discussed. According to the LCCI spokesperson, senior figures including LCCI Senior Vice President Engineer Khalid Usman, former president Muhammad Ali Mian, and key association members such as Sheikh Abdul Majeed, Chaudhry Muhammad Muneer, and others were present during the consultation. Mian Abuzar Shad criticized SRO 578(I)/2025, issued on April 8, 2025, which mandates that all business transactions be conducted via bank channels and include complete buyer information. He emphasized that this requirement is impractical given Pakistanâ€™s economic realities. Around 40 percent of cement sales are made to walk-in customers, many of whom cannot issue reliable cheques due to the risk of cheque bounces and the lack of effective legal recourse. The remaining 60 percent involves cash transactions with rural wholesalers and retailers, where access to banking infrastructure remains inadequate. He warned that the policy could disrupt the entire documented supply chain, pushing compliant businesses towards informality, risking financial penalties and closure due to input tax disallowance. In addition, Mian Abuzar Shad addressed the challenges posed by SRO 709(I)/2025, which requires integration with the FBRâ€™s digital system. He explained that this imposes an excessive compliance burden on cement distributors, even though cement, as a third schedule item, is already taxed at the maximum retail price (MRP) during manufacturing. The LCCI president asserted that distributors have limited downstream documentation authority and derive no tangible benefits from integration. Calling the policies disconnected from ground realities, the LCCI stressed that uniform compliance rules are unfit for essential commodity sectors like cement. Such measures could trigger artificial shortages, paralyze construction activities, and negatively impact GDP growth. The LCCI urged the Prime Minister to suspend both SROs immediately and suggested that cement manufacturers should only transact with tax-registered buyers to maintain documentation without market disruption. The LCCI also recommended targeted consultations between the Prime Ministerâ€™s Office, FBR, and industry stakeholders to create workable, sector-specific regulatory frameworks.

Date: 2025-05-14

Details: BEIJING: The United States and China slashed sweeping tariffs on each othersâ€™ goods for 90 days on Wednesday, marking a temporary de-escalation in a brutal trade war that roiled global markets and international supply chains. Washington and Beijing agreed to drastically lower sky-high tariffs in a deal that emerged from pivotal talks at the weekend in Geneva. US President Donald Trump said Washington now had the blueprint for a â€œvery, very strongâ€ trade deal with China that would see Beijingâ€™s economy â€œopen upâ€ to US businesses, in an interview broadcast Tuesday on Fox News. Easing US-China trade tensions send gold lower as safe-haven demand weakens â€œWe have the confines of a very, very strong deal with China. But the most exciting part of the deal â€¦ thatâ€™s the opening up of China to US business,â€ he told the US broadcaster while aboard Air Force One on the way to the start of his Gulf tour. â€œOne of the things I think that could be most exciting for us and also for China, is that weâ€™re trying to open up China,â€ he added, without elaborating. Trump had upended international commerce with his sweeping tariffs across economies, and China has been especially hard hit. Unwilling to budge, Beijing responded with retaliatory levies that brought new tariffs on both sides well over 100 percent. US-China trade war After billions were wiped off equities and with businesses ailing, negotiations finally got underway at the weekend in Geneva between the worldâ€™s trade superpowers to find a way out of the impasse. Under the deal, the United States agreed to lower its new tariffs on Chinese goods to 30 percent while China will reduce its own to 10 percent â€“ down by over 100 percentage points. â€˜No winnersâ€™ The reductions came into effect just after midnight Washington time (0401 GMT) on Wednesday, a major de-escalation in trade tensions that saw US tariffs on Chinese imports soar to up to 145 percent and even as high as 245 percent on some products. Washington also lowered duties on low-value imports from China that hit e-commerce platforms like Shein and Temu. Under Trumpâ€™s order, such small parcels would be hit by duties of 54 percent of their value â€“ down from 120 percent â€“ or a $100 payment. China said Wednesday it was suspending certain non-tariff countermeasures too. Beijingâ€™s commerce ministry said it was halting for 90 days measures that put 28 US entities on an â€œexport control listâ€ that bars firms from receiving items that could be used for both civilian and military purposes. The ministry added in a separate statement that it was pausing measures which added 17 US entities to an â€œunreliable entity listâ€. Companies on the list are prohibited from import and export activities or making new investments in China. The suspension for 11 entities added on April 4 applies for 90 days, while the ministry did not specify the length of suspension for six others added on April 9. Markets have rallied in the glow of the China-US tariff suspension. Chinese officials have pitched themselves at a summit in Beijing with Latin American leaders this week as a stable partner and defender of globalisation. â€œThere are no winners in tariff wars or trade wars,â€ Chinese President Xi Jinping told leaders including Brazilâ€™s Luiz Inacio Lula da Silva. His top diplomat Wang Yi swiped at a â€œmajor powerâ€ that believed â€œmight makes rightâ€. â€˜Risk of renewed escalationâ€™ Deep sources of tension remain â€“ the US additional tariff rate is higher than Chinaâ€™s because it includes a 20 percent levy over Trumpâ€™s complaints about Chinese exports of chemicals used to make fentanyl. Washington has long accused Beijing of turning a blind eye to the fentanyl trade, something China denies. Analysts warn that the possibility of tariffs returning after 90 days simply piles on more uncertainty. â€œFurther tariff reductions will be difficult and the risk of renewed escalation persists,â€ Yue Su, principal economist at The Economist Intelligence Unit, told AFP. Trumpâ€™s rollercoaster tariff row with Beijing has wreaked havoc on US companies that rely on Chinese manufacturing, with the temporary de-escalation only expected to partially calm the storm. And Beijing officials have admitted that Chinaâ€™s economy â€“ already ailing from a protracted property crisis and sluggish consumer spending â€“ is likewise being affected by trade uncertainty.

Date: 2025-05-13

Details: LAHORE: The income tax department has failed to prove that transactions conducted between two associated entities qualify as â€˜salesâ€™. According to details, the department had selected tax return of a yarn manufacturer for audit. The taxation officer identified several discrepancies in the taxpayerâ€™s records including one significant issue related to the transfer of raw materials to a sister organization. The taxation officer interpreted the transaction concerning the transfer of raw materials as a sale, which he believed should be assessed to determine taxpayerâ€™s final tax liability. The taxpayer opposed the conclusion and argued that its buying and sales operations were centralized within their structure. It explained that cotton was procured in large quantities collectively, and once one of the group members made the payment, the cotton would then be allocated to other mills within the group based on their individual needs. The taxpayer maintained that these transfers occurred within the group without any exchange of monetary consideration, it should not be classified as sales. The taxation officer did not accept this reasoning. He concluded that the transactions should indeed be regarded as sales which were netted off for tax purposes. He explained the rationale of his conclusion that if there had been no sales activities, the taxpayer would not have recorded the resulting net amounts as sales of raw materials in its profit and loss settlements. This finding culminated in an amended assessment order to create a tax demand. The Commissioner (Appeals) upheld the amended assessment order. However, the tribunal decided in favour of the taxpayer, concluding that the transaction recorded in the ledger account could not be deemed a sale as it lacked the essential element of cash consideration. The higher appellate forum maintained that these transactions should be considered as arrangements between associated concerns that lacked monetary consideration. The department pointed out that the taxpayer had included the net amount in its sales, effectively demonstrating inter-company sales of raw materials. The higher appellate forum found this justification in substantial and upheld the tribunal decision. Copyright Business Recorder, 2025

Date: 2025-05-13

Details: Islamabad, May 13, 2025 â€” The government of Pakistan is considering a significant tax reform by planning to abolish the 18% sales tax on locally produced cotton in the upcoming federal budget for 2025-26. The move aims to support the domestic cotton industry and create a level playing field between local producers and importers. Parliamentary Secretary for Finance and Revenue, Saad Wasim Sheikh, informed the National Assembly on Monday that the government is actively reviewing the current tax structure. Responding to a calling attention notice by MNA Sehar Kamran, Sheikh admitted that the high sales tax on cotton produced locally is unfair and burdensome, especially when compared to imported cotton, which is exempt from sales tax under the Export Facilitation Scheme (EFS). He emphasized the importance of tax equality, stating, â€œThere should be no discrimination in taxation. Local and imported cotton must be treated uniformly.â€ He noted that this disparity discourages local cotton production and affects the competitiveness of domestic ginners and textile manufacturers. Sheikh highlighted that the issue of sales tax on cotton was recently discussed in a high-level meeting between the finance minister and representatives of the cotton ginning industry. During the talks, strong support was voiced for removing the sales tax on locally produced cotton while maintaining the levy on imported cotton not covered under the EFS. Currently, only importers registered under the EFS benefit from the exemption, creating a loophole that disadvantages domestic cotton growers. The proposed removal of sales tax on local cotton would help revive Pakistanâ€™s cotton sector, reduce input costs for manufacturers, and boost agricultural output. The FBR is evaluating the impact of this policy change and considering the revenue implications. However, the government appears committed to supporting cotton producers by reforming the current sales tax regime. If implemented, abolishing the sales tax on cotton could mark a turning point for Pakistanâ€™s agriculture and textile sectors, strengthening local industries and promoting fairer tax practices across the board.

Date: 2025-05-13

Details: Islamabad, May 13, 2025 â€” The Federal Board of Revenue (FBR) has successfully brought 2,391,566 new taxpayers into the system through amendments made under the Tax Laws Amendment process. This was disclosed by Parliamentary Secretary for Finance Saad Waseem Sheikh during the Question Hour in the National Assembly on Monday. He informed the house that by April 29, 2025, the total number of taxpayers filing returns had increased to 6,594,832. This figure includes 106,118 Association of Persons (AOPs) and 93,749 companies. The FBRâ€™s efforts to broaden the tax base are part of an ongoing campaign to improve tax compliance and encourage more individuals and entities to become active taxpayers. The FBR has been leveraging modern digital tools, legal reforms, and awareness campaigns to ensure that taxpayers fulfill their obligations. These efforts have helped in formalizing the economy and boosting government revenues. Responding to another question, Sheikh revealed that mobile phone companies collected Rs84.25 billion in taxes from consumers between July 2024 and March 2025. These taxes were properly deposited into the national exchequer, further reflecting the role of indirect taxpayers in revenue generation. In a separate update, Sheikh also highlighted the growing success of the Roshan Digital Account (RDA) initiative. So far, overseas Pakistanis have opened 805,009 RDAs, with a total inflow of $9.98 billion. He noted that the RDA platform allows account holders to operate in 10 different foreign currencies, facilitating smooth financial access for non-resident Pakistanis. The FBR continues to focus on increasing the number of active taxpayers, enhancing transparency, and simplifying the tax process. Encouraging new taxpayers, including those from the overseas community, remains a key policy objective. With these developments, the FBR aims to further strengthen Pakistanâ€™s tax system by increasing participation, ensuring compliance, and reducing reliance on indirect taxation. The growing number of taxpayers marks a positive shift in building a broader, more equitable tax culture in Pakistan.

Date: 2025-05-12

Details: Islamabad, May 12, 2025 â€“ In a significant move aimed at safeguarding consumers from excessive taxation, the Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to constitute a joint committee to re-evaluate the entire regime of electricity duty and taxes calculated thereon. The committee will include representatives from the Regional Tax Office (RTO) Peshawar, Peshawar Electric Supply Company (PESCO), and the Khyber Pakhtunkhwa Energy Department. This development comes after the FTO took suo motu notice of complaints regarding the unlawful collection of taxes by distribution companies (DISCOs) under section 235 of the Income Tax Ordinance, 2001. The FTO noted FBRâ€™s indifference to the matter and emphasized the need to provide relief to ordinary consumers and taxpayers who have been subjected to undue financial burden in the name of electricity-related charges. The complaint, which triggered the inquiry, was filed by a PESCO consumer, Israruddin, who contested the imposition of various taxes on his electricity bill for August 2023. Claiming financial hardship, he appealed for an exemption from income tax and associated levies. Upon investigation, the FTO observed serious discrepancies. Deputy Commissioner Inland Revenue (DCIR) Usman Asif defended the FBRâ€™s position, stating that income tax had not been applied on bills below Rs. 25,000 and that GST was charged according to law. However, the complainantâ€™s authorized representative, Zulfiqar Ali of Rafaqat Babar & Co, could not provide adequate justification for the inclusion of electricity duty (ED) in the bill. The inquiry revealed that ED is being levied across all consumer categories by DISCOs under the outdated West Pakistan Finance Act, 1964, now renamed the Punjab Finance Act, alongside Article 157(2)(b) of the Constitution. This law dates back to the â€œOne Unitâ€ era when provinces were empowered to raise funds for power generation by imposing a duty on consumed electricity units. However, following the NEPRA Act of 1997 and restructuring of the power sector, the legal basis for this provincial levy has become questionable. While NEPRA licensees are allowed to collect federal taxes, they cannot lawfully collect ED on behalf of provinces without specific provincial authorization. As this legal ambiguity remains unresolved, the collection of ED continues unchecked, undermining taxpayersâ€™ rights. Further investigations uncovered alarming irregularities. DISCOs were found withholding collected ED for years and only remitting payments after lengthy reconciliations with provincial departments. The Punjab Energy Department reported widespread misuse, including fake and dormant meters to inflate billing and fund provincial budgets with electricity duty meant for infrastructure development. Even IESCO has been implicated for imposing provincial electricity duty on Islamabad Capital Territory consumers. Notably, K-Electric currently owes Rs. 21 billion in unpaid ED to the Sindh Energy Department. This unchecked system has led to excessive and unjust taxation. Federal taxes are being calculated on inflated electricity duty values, compounding the financial strain on the public. The FTO termed this â€œclear maladministrationâ€ and highlighted that the issue has already been upheld in multiple complaints by the President of Pakistan via a ruling dated March 4, 2024. The FTOâ€™s directive calls for a comprehensive legal and procedural review to ensure that the imposition and collection of electricity duty align with current laws and do not exploit consumers. The outcome of the committeeâ€™s work may determine the future of provincial levies in electricity billing and could set a precedent for nationwide reforms

Date: 2025-05-12

Details: Karachi, May 12, 2025 â€“ The Collectorate of Customs (Enforcement), Gadani, of Pakistan Customs has announced a large-scale public auction of seized Iranian petroleum products, including high-speed diesel (HSD) and petrol, to be held on May 15, 2025, at Gadani. This move comes as part of Pakistanâ€™s broader effort to dispose of illegally smuggled fuel through transparent legal procedures. According to official sources, the petroleum products set for auction include approximately 277,840 liters of Iranian high-speed diesel and 23,320 liters of Iranian petrol. These fuels were seized during various anti-smuggling operations across Balochistan and are currently stored at multiple locations under Customs supervision. Detailed breakdowns show the following quantities of Iranian diesel: â€¢ 172,770 liters at C.P. Khurkhera â€¢ 76,200 liters in Panjgur â€¢ 23,500 liters at Wangu â€¢ 13,450 liters in Turbat For Iranian petrol, the seized stock includes: â€¢ 11,380 liters at Khurkhera â€¢ 4,740 liters in Khuzdar â€¢ 7,200 liters stored at C.P. Gwadar As per regulations, only companies registered with the Oil and Gas Regulatory Authority (OGRA) of Pakistan are eligible to participate in the auction. This ensures that all fuel acquired through the process is handled by licensed entities operating within Pakistanâ€™s legal framework. Pakistan Customs emphasized that the auction will be conducted in strict accordance with the Customs Act, 1969, and all relevant rules. The entire process will take place on an â€œas is where isâ€ basis, meaning the fuel will be sold in its current condition and location without any warranties. Interested bidders must also comply with a mandatory 10% advance income tax payment, to be deposited separately upon a successful bid. The Collector of Customs retains the authority to accept or reject any bid without providing justification. If the auction cannot be concluded on the set date, it will continue on the next working day until all lots are finalized. This marks a significant event in Pakistanâ€™s ongoing efforts to counter fuel smuggling and utilize confiscated goods through legal means. The large volume of Iranian petroleum reflects the scale of recent anti-smuggling operations, reinforcing Pakistanâ€™s stance on border control and regulated fuel distribution.

Date: 2025-05-12

Details: Karachi, May 12, 2025 â€“ The Collectorate of Customs (Enforcement), Gadani, has announced a major public auction of seized vehicles, scheduled to take place on May 15, 2025, at the Customs House Gadani. According to the official notice from Gadani Customs, the mega auction will feature approximately 87 confiscated vehicles, including a wide variety of sedans, hybrid cars, SUVs, and jeeps â€“ many of which are old, used, and in various states of disrepair. The auction will be held in strict compliance with the Customs Act, 1969, and all relevant rules and regulations. Auction Highlights Following are some of vehicles listed for auction include, please check for the complete list at the collectorate: â€¢ Toyota Lexus (2007) â€“ Chassis No. JTHBL46F005035674, severely rusted with missing parts including ABS system, seats, bumpers, and engine (non-functional). â€¢ Toyota Prado Jeep (2007) â€“ Chassis No. GRJ121-0003248, missing bonnet, seats, and electric components. â€¢ Toyota Crown Hybrid (2013) â€“ Reg. No. BF-8653, with missing bonnet, lights, hybrid battery, and other key components. â€¢ Toyota Land Cruiser Prado (2015) â€“ Chassis No. GDJ151-0001191, 2754cc engine. â€¢ Toyota Aqua, Prius, Celsior, Corolla Hybrid â€“ Multiple units ranging from model years 2006 to 2019, several without registration numbers and most in non-running or damaged condition. Other vehicles include Honda Civic (2012), Toyota Hilux Surf (2007), and a Toyota Corolla Hybrid (2018) with a fake registration plate and signs of rust and accident damage. Auction Terms and Conditions â€¢ The auction will be conducted on an â€œas is where isâ€ basis. â€¢ Interested parties must comply with the rules laid out in the Customs Act, 1969. â€¢ A 10% advance income tax on the bid amount must be deposited separately by successful bidders. â€¢ The Collector of Customs reserves the right to accept or reject any bid without assigning any reason. â€¢ If the auction cannot be completed on May 15, it will continue on subsequent dates until all lots are finalized. Gadani Customs has urged all potential buyers, dealers, and automobile enthusiasts to thoroughly inspect the vehicles and carefully review the auction terms. This auction offers an opportunity to acquire vehiclesâ€”some rare or vintageâ€”at potentially affordable prices. For complete auction lists, vehicle details, and participation instructions, visit the official Customs House Gadani or contact the Gadani Customs office directly.

Date: 2025-05-12

Details: Karachi, May 12, 2025 â€“ The Karachi Tax Bar Association (KTBA) has called on the government to abolish the tax on surplus funds of Non-Profit Organizations (NPOs) in the upcoming federal budget for 2025â€“26. In its official budget proposals submitted to the Federal Board of Revenue (FBR), the KTBA emphasized the need to support charitable and welfare-driven institutions that play a crucial role in public service. The KTBA specifically pointed to Section 100C of the Income Tax Ordinance, 2001, which deals with the taxation of NPOs. According to KTBA, Sub-section (5) of Section 100C imposes a 10% tax on surplus funds held by NPOs at the end of a financial year. KTBA argued that this tax creates unnecessary financial stress for NPOs, many of which run hospitals, schools, and other welfare projects. These organizations often need to save funds for large capital expendituresâ€”such as buildings, infrastructure, and medical or educational equipmentâ€”that are planned over several years. Such long-term planning is vital to sustain and grow their operations. â€œNPOs must retain funds for ongoing and future welfare projects,â€ said a KTBA spokesperson. â€œTaxing these surplus amounts discourages savings and planning, and may force NPOs to compromise on their service delivery.â€ The KTBA reiterated that there are no provisions within the Income Tax Ordinance that restrict NPOs from using retained surplus for welfare purposes in future years. Therefore, the 10% tax under Sub-section (5) appears inconsistent with the spirit of encouraging charitable work. KTBA proposed that Sub-section (5) of Section 100C be completely abolished in order to allow NPOs to retain their surplus funds without penalty. The change, they believe, would directly support the financial health of NPOs and encourage long-term planning for welfare services. By removing this tax, KTBA believes the government would be sending a strong message of support to NPOs working tirelessly across Pakistan for public benefit.

Date: 2025-05-12

Details: Karachi, May 12, 2025 â€“ The Overseas Investors Chamber of Commerce and Industry (OICCI) has recommended that the Federal Board of Revenue (FBR) install Point-of-Sale (POS) systems at all airlines and travel agencies in Pakistan, as part of its proposals for the upcoming 2025-26 federal budget. This move, the OICCI believes, would enhance transparency and improve tax collection, particularly from non-filers engaging in foreign travel. According to the OICCI, a large number of foreign travelers routinely book business and economy class flights, often without declaring income or filing tax returns. The organization has suggested that income tax should be automatically collected from non-filers at the time of purchasing international air tickets. This would be similar to the mechanism under Section 236L of the Income Tax Ordinance, 2001, which covers tax deduction on foreign travel by non-filers. The OICCIâ€™s proposal includes the implementation of POS systems that would be integrated with FBRâ€™s real-time monitoring infrastructure. These POS systems, when installed at both airlines and travel agencies, would allow tax authorities to track high-value travel expenditures and enforce compliance more effectively. In addition to this, the OICCI recommends strict enforcement of Section 114B(2)(d) of the Income Tax Ordinance to ensure non-filers are compelled to submit returns. Making the National Tax Number (NTN) mandatory for opening or maintaining bank accounts and for carrying out significant financial activitiesâ€”such as vehicle purchases, property transactions, foreign travel, and luxury membershipsâ€”is also part of the OICCIâ€™s suggestions. To further support these efforts, the OICCI advises that cash deposits and withdrawals by non-filers be monitored by a dedicated FBR wing in coordination with the Financial Monitoring Unit (FMU) of the State Bank of Pakistan. These measures, according to the OICCI, will promote a culture of tax compliance, increase documentation of the economy, curb tax evasion in the high-cash travel sector, and ultimately lead to fairer revenue generation and stronger governance.

Date: 2025-05-12

Details: Islamabad â€“ The Federal Board of Revenue (FBR) has initiated an on-spot inspection campaign targeting beverage manufacturing units across the country. As part of this latest enforcement initiative, FBR officials have been deputed directly at factory premises to closely monitor supply chains, purchases, stock levels, and record maintenance in the beverage sector. According to official instructions issued to the Chief Commissioner Inland Revenue at the Large Taxpayers Office (LTO) in Lahore, the monitoring is being carried out under the authority granted by Section 40B of the Sales Tax Act, 1990 and Section 45(2) of the Federal Excise Act, 2005. These legal provisions empower the FBR to place Inland Revenue officers at the premises of registered businesses for real-time monitoring of production, sales, and inventory management. The FBR emphasized that this measure specifically targets the beverage industry, which has witnessed significant growth and is considered a high-revenue sector. By physically deploying tax officers at beverage production sites, the FBR aims to enhance transparency, detect any tax evasion, and ensure that all transactions are being accurately reported. Officials posted at these units will conduct round-the-clock monitoring of manufacturing operations, sales activities, and stock positions. Their presence is intended to deter underreporting and improve tax compliance in the beverage manufacturing industry. The instructions further note that these officers will remain stationed at the designated beverage factories until June 2, 2025. Upon completion of the field exercise, the FBR has directed that a comprehensive report be submitted, summarizing findings, discrepancies observed (if any), and recommendations for future action. This proactive step underscores the FBRâ€™s commitment to curbing revenue leakages in the excise and sales tax framework. This marks a significant development in the FBRâ€™s enforcement strategy, particularly aimed at industries like beverage manufacturing that are high in consumption and often scrutinized for under-invoicing or stock manipulation. The FBRâ€™s strict oversight sends a clear signal that tax compliance in the beverage sector will be monitored with renewed vigilance.

Date: 2025-05-11

Details: Karachi, May 11, 2025 â€“ Pakistan is likely to introduce a Capital Value Tax (CVT) on crypto assets held by resident citizens, as the government moves toward formalizing regulation for digital currencies. According to sources within the Federal Board of Revenue (FBR), the absence of a clear legal framework for cryptocurrencies has so far prevented the taxation of these digital assets, but new legislation is expected soon. The FBR sources noted that, until specific laws are enacted, the taxation treatment of crypto remains undefined. However, one of the options under consideration is the implementation of CVT, similar to the one already applicable to foreign assets of resident taxpayers. If adopted, this move would mark Pakistanâ€™s first direct tax policy specifically targeting crypto assets. In a significant step toward digital policy reform, the government has already launched the Pakistan Crypto Council, aimed at establishing a direct channel between the government and the public to shape policies around cryptocurrency and blockchain technology. The council seeks to position Pakistan as a forward-thinking nation in digital governance and to foster public trust through transparent engagement. Meanwhile, the Institute of Cost and Management Accountants of Pakistan (ICMAP) has urged the government to define tax treatment for crypto transactions. Their recommendations include defining capital gains and income tax rules, mandating the reporting of large crypto transactions to the FBR, and introducing tax incentives for blockchain startups to boost innovation and foreign investment. The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has also been vocal in advocating for a comprehensive regulatory and taxation framework. Citing data from Chainalysis, the FPCCI highlighted that Pakistan ranked third in the Global Crypto Adoption Index in 2021, with an estimated $20 billion in crypto assets traded by Pakistani investors during 2020-21. To integrate these digital assets into the formal economy, the FPCCI proposed a multi-tiered tax structure, including a 1% adjustable tax on crypto transactions and a one-time asset declaration scheme. This would allow for encashment and conversion of cryptocurrencies under various tax brackets, ranging from 0% to 15%, depending on the holding structure and investor status. The FPCCI emphasized that countries such as India, Thailand, Malaysia, and the UAE have already brought crypto assets under their tax regimes, thereby expanding their revenue base. A similar approach in Pakistan, the FPCCI argues, could help unlock substantial tax revenue while ensuring financial transparency in the evolving digital economy.

Date: 2025-05-11

Details: Islamabad, May 11, 2025 â€“ Pakistan has witnessed a significant surge in motor vehicle tax collection, which soared by 58% during the first nine months (Julyâ€“March) of the ongoing fiscal year 2024-25, according to official data released by the Ministry of Finance. The report indicates that total revenue from motor vehicle tax reached Rs39.55 billion in the Julyâ€“March period, up from Rs24.98 billion collected during the same period in the previous fiscal year. The increase highlights both improved compliance and a pickup in motor vehicle activity across the country. Although the collection of motor vehicle tax is constitutionally under the domain of provincial governments, it is still included in the federal fiscal performance reports. The data revealed that Punjab led the provinces in terms of total collection, contributing Rs22.82 billion, compared to Rs14.89 billion in the corresponding months of FY2023-24. This marked a robust growth of 53.26% for the province. In contrast, Sindh posted the highest growth rate in tax receipts. The province registered a 75% jump in motor vehicle tax revenue, collecting Rs13.73 billion during the nine-month period, up from Rs7.86 billion in the previous year. Khyber Pakhtunkhwa and Balochistan also showed notable performance, albeit on a smaller scale. Khyber Pakhtunkhwa collected Rs2.06 billion, while Balochistan contributed Rs0.93 billion in motor vehicle tax during the review period. Analysts in the automotive sector link the substantial increase in tax revenue to improved motor vehicle sales, spurred by favorable economic factors such as lower interest rates and increased consumer financing. The availability of financing options and economic recovery has reportedly boosted the demand for motor vehicles, particularly in urban centers. Moreover, enhanced enforcement measures and digitization of the tax payment system in provinces like Punjab have made it easier for citizens to comply, thereby improving revenue outcomes. As the fiscal year progresses, provincial governments are expected to further streamline motor vehicle tax collection mechanisms to support long-term revenue generation, infrastructure development, and road maintenance initiatives.

Date: 2025-05-11

Details: Karachi, May 11, 2025 â€” The Federal Board of Revenue (FBR) has been strongly urged to implement compulsory income tax return filing for professionals across various sectors, particularly those affiliated with formal associations and professional bodies such as bar councils and trade organizations. As part of the proposals submitted for the upcoming federal budget 2025â€“26, the FBR has been advised to expand the tax base by enforcing return filing for all service providers and professionals, including doctors, private hospitals, lawyers, painters, fashion designers, property dealers, interior designers, private teachers, educational institutes, salons, and coaching centers. The proposals recommend that FBR should make tax compliance a prerequisite for annual license or registration renewals. For example, doctors should be required to submit tax returns to the Pakistan Medical Association (PMA), lawyers through their respective bar councils, and tax consultants via the Institute of Chartered Accountants of Pakistan (ICAP). Hospitals would also be required to restrict non-filer doctors from practicing or providing consultancy services within their premises. In a bid to improve documentation and revenue collection, the proposals suggest mandatory integration of the Point of Sale (POS) system for professionals offering taxable services. This would ensure all transactions are digitally recorded and invoices are generated in real time, ultimately reducing tax evasion and broadening the tax net. The FBR has also been encouraged to conduct widespread awareness campaigns to educate professionals about the importance and benefits of POS invoicing. Another key suggestion involves issuing digital identification numbers to small service providers such as plumbers, electricians, and carpenters. These IDs would link them to the tax system and promote financial inclusion, helping bring Pakistanâ€™s large informal economy under formal oversight. Professionals in sectors such as education, healthcare, legal services, salons, and coaching often operate outside the tax system. By ensuring these professionals are identified, regulated, and taxed, the FBR can shift the burden away from salaried individuals who currently make up a large share of the taxpaying population. Effective enforcement of professional tax return filing and POS integration will enhance transparency, improve policy formulation, and support sustainable economic development. The FBRâ€™s role in implementing these measures is crucial for strengthening national revenue and achieving long-term fiscal stability.

Date: 2025-05-11

Details: Islamabad, May 11, 2025 â€“ The Federal Board of Revenue (FBR) is actively reviewing a proposal to revise the taxation structure on immovable properties in the upcoming federal budget for the fiscal year 2025-26. This move comes in response to persistent demands from real estate stakeholders and aims to stimulate investment while balancing revenue generation. According to official sources, the FBR is considering a range of relief measures to rationalize the tax regime on immovable properties. These include a possible exemption from Capital Gains Tax (CGT) and a downward revision in withholding tax rates on the sale and purchase of real estate. Currently, a 3% withholding tax is imposed on sellers under Section 236C of the Income Tax Ordinance, 2001. The reduction of this rate is under serious consideration. The CGT, which is applicable on profits made from the sale of immovable properties, is also expected to undergo changes starting July 1, 2025. Taking into account inflation and the rising cost of properties, the FBR believes there is a need to adjust the CGT to make it more equitable. As per existing law under Section 37, sellers are liable to pay CGT when filing their income tax returns, but this may be eased for genuine long-term property holders. In addition to reforms in the real estate sector, the FBR is also planning broad-based reductions in withholding tax across multiple sectors. This includes reduced rates on the import of raw materials and inputs, as well as on financial transactions not directly linked to income, such as bank transfers. However, withholding taxes on dividends and other income-based revenues will remain intact. Meanwhile, the Overseas Investors Chamber of Commerce and Industry (OICCI) has proposed an annual withholding tax of 0.5% on all immovable properties, including agricultural land, based on FBR-assessed values. This would be collected by provincial authorities and adjusted against the ownerâ€™s overall income tax liability. The proposal recommends exempting small properties to protect low-income segments. Furthermore, the OICCI has suggested that CGT exemptions should be conditional on proper declaration of properties at the time of acquisition and limited to one transaction every three years per taxpayer. This approach is expected to improve documentation and discourage the hoarding of undeclared wealth in real estate.

Date: 2025-05-11

Details: May 11, 2025 Islamabad, May 11, 2025 â€“ The Federal Board of Revenue (FBR) is actively considering a significant increase in the federal excise duty (FED) on cigarettes in the upcoming 2025â€“26 budget, citing the severe health risks posed by smoking. The move is aligned with growing pressure from global health bodies, particularly the World Health Organization (WHO), urging Pakistan to adopt stronger fiscal measures to curb tobacco consumption. Sources within the FBR revealed that the proposal to raise cigarette taxes is part of a broader public health initiative to discourage smoking, which remains one of the leading causes of preventable deaths in the country. â€œSmoking is injurious to health, and increasing the FED is a globally recognized tool to reduce cigarette consumption,â€ a senior official emphasized. When asked about the decline in sales and volumes reported by Pakistanâ€™s two major cigarette manufacturers due to the nearly 200% FED already in place, FBR officials responded that commercial losses cannot override the undeniable health hazards associated with smoking. They also noted that many countries have established minimum tax benchmarks on tobacco to ensure effective regulation and deterrence. During a recent session of the National Assemblyâ€™s Standing Committee on Finance, FBR Chairman Rashid Mahmood Langrial acknowledged the agencyâ€™s challenges in combating the illicit cigarette trade. He disclosed that only one out of every ten trucks carrying smuggled or counterfeit cigarettes is seized, largely due to manpower shortages. To strengthen enforcement, the FBR is working on a strategy to involve provincial law enforcement agencies in monitoring and cracking down on the sale of illegal cigarettes. Cigarettes without the mandatory tax stamp will be deemed illegal, and an official standard operating procedure (SOP) is being developed to coordinate efforts between federal and provincial authorities. The proposed increase in FED is not only expected to boost revenue but also serve a critical health function by deterring smoking, particularly among youth and low-income groups. As the FBR prepares the final budget recommendations, public health advocates continue to push for strong fiscal policies that reflect the long-term societal cost of tobacco use.

Date: 2025-05-10

Details: The National Assembly Standing Committee on Finance strongly criticized the government and the Federal Board of Revenue (FBR) on Friday for bypassing Parliament by enforcing the Tax Laws (Amendment) Ordinance, 2025. The committee expressed frustration over the ordinance being urgently circulated to FBR field offices for immediate recovery from taxpayers without prior parliamentary debate. During the committee meeting, chaired by MNA Syed Naveed Qamar, members discussed the implications of Ordinance No. IV/2025, raising concerns from trade bodies and stakeholders. Qamar labeled the ordinance as a misuse of executive power, emphasizing that it denied taxpayers the fundamental right of appeal before enforcement actions. He directed the Law and Justice Division to promptly present the ordinance in Parliament for debate and proper legislative process. The FBR Chairman, Rashid Mahmood Langrial, defended the ordinance, stating it was lawfully approved by the federal cabinet and the president. He urged the committee to allow a one to two-month trial period for the ordinance, stressing that it addresses crucial legal gaps in tax enforcement. However, committee members remained unconvinced. They questioned the urgency behind bypassing the usual process of including such tax amendments in the upcoming Finance Bill 2025-26. When pressed, a representative from the Law Division admitted to the urgency but failed to justify it clearly. The committee emphasized that all changes to tax laws must be evaluated carefully to prevent negative effects on the economy and other sectors. Naveed Qamar reiterated that the FBR had not provided a convincing explanation for the need to issue the ordinance without prior consultation. He assured that the committee would scrutinize the ordinance once it is tabled as a bill. MNA Mirza Ikhtiar Baig also criticized the move, stating that it contradicts the FBRâ€™s own commitment to creating a business-friendly tax environment. He noted strong opposition from trade organizations, including the Federation of Pakistan Chambers of Commerce and Industry (FPCCI). The FBR Chairman explained that the ordinance contains only three targeted amendments, focused on streamlining tax recovery after final court decisions. He said Sections 138(3A) and 140(6A) were introduced to close legal loopholes that allowed delays in payment, resulting in the non-recovery of billions in tax revenueâ€”even after verdicts from the Supreme Court or High Courts. The committee concluded that while legal enforcement is necessary, tax reforms must not come at the cost of parliamentary oversight or taxpayer rights.

Date: 2025-05-10

Details: ISLAMABAD â€“ Chairman Federal Board of Revenue (FBR), Rashid Mahmood Langrial, has revealed large-scale tax evasion in Pakistanâ€™s tobacco and poultry sectors, amounting to nearly Rs400 billion annually. This significant revenue gap, he explained, highlights the systemic weaknesses in tax enforcement and the need for stronger regulatory measures. Speaking at a meeting of the National Assemblyâ€™s Standing Committee on Finance on Friday, Langrial disclosed that the tobacco industry alone is responsible for an estimated Rs300 billion in tax evasion each year. He stated that illegal cigarette sales remain rampant, and that only one out of every 10 trucks carrying smuggled or illicit cigarettes is intercepted by authorities. He attributed this low seizure rate to limited manpower and resources available to the FBR. To address this, Langrial emphasized the importance of involving provincial law enforcement agencies, particularly at the retail level. The FBR plans to enhance enforcement by drafting new standard operating procedures (SOPs), allowing for improved coordination between the FBR and provincial forces. Any cigarette product sold without the mandatory tax stamp is considered illegal, and the FBR aims to increase the cost of non-compliance within the tobacco sector. Officials expect at least a 10 percent improvement in enforcement efficiency once the new measures are implemented. In addition to the tobacco industry, Langrial also highlighted serious underreporting in the poultry sector. Despite having a tax liability of around Rs10 billion, the sector contributes only Rs1.3 billion annually. He attributed this gap to the lack of cost accounting in income tax filings, a loophole widely exploited by businesses in the poultry industry. The chairman explained how a chick priced at Rs70â€“80 is often sold for Rs180, reflecting high profit margins that are not accurately reported. According to FBR estimates, the daily production of chicks in the poultry sector ranges from 800,000 to 900,000. Yet, due to poor documentation and intentional underreporting, the sector has evaded up to Rs150 billion over the last five years. Langrial stated that recent FBR audits forced some companies to revise their declared sales figures after discrepancies were discovered. The FBR is now determined to plug revenue leakages in both the tobacco and poultry sectors through tighter regulation and inter-agency cooperation.

Date: 2025-05-10

Details: The upcoming federal budget for 2025-26 is expected to include significant relief measures for salaried individuals, with a key focus on easing the tax burden. According to sources within the Federal Board of Revenue (FBR), the government is planning to reduce income tax rates by at least 2.5% for higher income slabs of salaried persons. These adjustments are part of a broader effort to maintain a balanced revenue impact while providing necessary relief to taxpayers. In the forthcoming budget, the government may introduce new taxation measures totaling approximately Rs500â€“600 billion. However, this increase is expected to be offset by targeted relief, particularly aimed at the salaried class, to ensure that the net effect on revenue remains minimal. This strategy reflects a shift towards creating a more equitable tax structure while encouraging compliance and economic participation among the middle class. The authorities are also considering a reduction in withholding tax rates and a cut in the corporate income tax rate as part of the comprehensive relief strategy. These measures, alongside the tax relief for salaried individuals, are designed to maintain revenue neutrality. If successfully implemented, the overall impact of taxation and relief measures could result in no major change to the total revenue in the next fiscal year. Revenue from the salaried segment has consistently exceeded expectations in the current fiscal year. This trend has encouraged policymakers to reward this group with meaningful tax cuts. The government is currently finalizing calculations to implement a 2.5% reduction in each of the higher income slabs applied to salaried taxpayers. These adjustments are being carefully evaluated to ensure fiscal responsibility while offering substantial relief. Additionally, there is a proposal to increase the income tax exemption threshold under the Income Tax Ordinance, 2001. The current threshold of Rs600,000 may be raised to Rs1 million, providing further relief to low- and middle-income earners. This measure would significantly ease the financial burden on the general public, particularly the salaried population. Another consideration for the 2025-26 budget is the possible reduction or removal of the Super Tax, which has been a longstanding demand from the business community. If approved, these reforms would collectively benefit both the salaried class and corporate sector, supporting economic stability and growth.

Date: 2025-05-09

Details: LAHORE: A diverse group of businessmen, legal experts, tax specialists and journalists believed that the recently promulgated Tax Laws (Amendment) Ordinance 2025 will do more harm to business and investment climate of the country without any significant tax-collection benefit contrary to the anticipations of the government and Federal Board of Revenue (FBR). They expressed their concerns during a consultative session convened on Thursday under the PILDAT Business Policy Programme. The session, chaired by former Punjab Governor Shahid Hamid, discussed the implications of the recently promulgated ordinance on Pakistanâ€™s business and investment environment. Renowned tax expert Dr Ikramul Haq delivered the keynote address and presented the detailed analysis of the Ordinance and its implications for the country in general and businesses in particular. The session included an exchange of views on how the ordinance may affect various sectors, with participants expressing concern over the lack of prior consultation with the business community and their representative organisations, such as the chambers of commerce, the growing complexity of the tax system and the negative signals sent to potential investors. The speakers also referenced Pakistanâ€™s persistently low tax-to-GDP ratio, hovering around 9.2 percent, and the steady decline in ease-of-doing-business rankings as indicators that more systemic and transparent tax reforms are needed. They recommended that major fiscal reforms must be thoroughly debated in the Parliament and through structured engagement with the business community before implementation. The continued practice of introducing significant economic changes through ordinances, without consultation or parliamentary scrutiny, was widely criticised for undermining business confidence and eroding investor confidence. Serious concerns were expressed over the proposed deputation of legal and enforcement officials to business centres, which participants viewed as a reflection of the governmentâ€™s lack of trust in the business community. It was emphasised that such measures risk adding a new layer of potential corruption and reinforcing a perception that businesses are being treated as suspect entities under surveillance, rather than as partners in national economic development. Many participants questioned the utility and sense of deploying physical surveillance staff in this day and age of digital technology. The session also underscored the need to invoke and strengthen the Alternative Dispute Resolution (ADR) mechanism to address tax-related issues in a transparent, amicable, and business-friendly manner, thereby reducing litigation and building trust between taxpayers and the state. Earlier, PILDAT President Ahmed Bilal Mehboob emphasised the critical importance of stakeholder dialogue and transparency in tax reform processes. He noted that while tax reform is essential for improving revenue generation, the process must be inclusive and consultative to ensure credibility and compliance. Copyright Business Recorder, 2025

Date: 2025-05-09

Details: ISLAMABAD: Federal Tax Ombudsman (FTO) has out-rightly rejected the Federal Board of Revenueâ€™s (FBR) policy of expiry of passwords of taxpayers and directed the FBR to issue a new policy. According to the FTOâ€™s directive to the FBR, it is found that the password expiry policy without consultation with the taxpayers is arbitrary and unfair, hence constitutes maladministration in terms of the FTO Ordinance 2000. Details of the case revealed that following multiple complaints, an own motion investigation was initiated while exercising powers under the FTO Ordinance 2000, regarding recent policy of FBR for change of passwords every 60 days for all taxpayers which created hardships for taxpayers. A taxpayer while using the â€œforgot passwordâ€ option will have to go through the steps having eight entries to make before getting access to his data. However, applying the same procedure to all the taxpayers/registered person is a harsh measure and tantamount to extra drain on taxpayersâ€™ resources. Ideally, the FBR first should have identified taxpayers whose data was frequently prone to cyber security attacks and data breaches. It would have been appropriate if the data update measures were restricted to such vulnerable taxpayers only. The step was taken on the recommendations of internal committee of PRAL/FBR and no other stakeholder was involved for input on the issue. Alternatively, the taxpayersâ€™ password should not expire. However, they may be alerted by warning text, â€œYou have not changed your password for long and are prone to threat of hackingâ€. This policy is being followed in banks and they use warning message for their customers to take care of their passwords. FTO has directed Secretary Revenue division to form a committee including all the stakeholders and business community leaders to review the current policy of password updates every 60 days for all the taxpayers and formulate a new policy after obtaining inputs from all the stakeholders. Copyright Business Recorder, 2025

Date: 2025-05-09

Details: Islamabad, May 9, 2025 â€“ The Federal Board of Revenue (FBR) has significantly strengthened its litigation management framework, marking notable progress in the resolution of long-pending revenue disputes. This strategic transformation is now bearing fruit, with the Islamabad High Court recently ruling in favour of the FBR in multiple high-profile cases amounting to a total of Rs36.14 billion. According to a press release issued on Friday, the FBR reported that these verdicts, delivered over the past week, represent a substantial breakthrough in the departmentâ€™s ongoing legal battle to unlock stuck revenue. The FBR has been intensifying efforts to expedite litigation and ensure timely resolution of cases that have been lingering in various appellate forums, some for nearly a decade. One of the most significant rulings involves M/s Bahria Town (Pvt) Limited, where the Islamabad High Court upheld the FBRâ€™s revenue claims of Rs26.446 billion. This particular case had been under litigation for two and a half years. In addition, two more corporate tax disputesâ€”collectively valued at Rs9.7 billionâ€”were also decided in favour of the FBR. Notably, one of these cases had been pending for over nine years, while the other had seen delays spanning three years. So far, the FBR has successfully recovered over Rs3 billion from these cases, with efforts ongoing to retrieve the remaining dues. The FBRâ€™s proactive approach is part of a broader initiative to enhance compliance, enforce accountability, and secure long-overdue revenues. These legal victories reflect the positive outcomes of judicial reforms, including the establishment of constitutional benches in the Supreme Court and High Courts. They also underscore the collaborative efforts of the government, led by the Prime Minister, in coordination with the Attorney General and the Chairman of the Federal Board of Revenue. Reaffirming its dedication to fairness and efficiency, the FBR has reiterated its commitment to transparency, adherence to due legal process, and systematic litigation management. By prioritizing the resolution of high-stakes tax cases, the FBR is not only enforcing tax laws but also playing a critical role in strengthening Pakistanâ€™s financial stability and boosting contributions to the national exchequer.

Date: 2025-05-09

Details: ISLAMABAD, May 9, 2025 â€“ As Pakistan prepares its federal budget for fiscal year 2025â€“26, the telecom industry has put forward a comprehensive set of proposals, calling for the abolition and rationalization of various tax measures that, it says, are stifling growth, innovation, and affordability in the sector. In its formal budget submission, industry stakeholders urged the government to abolish the 15% withholding tax on telecom services. They argued that the rate should be reverted to 8%, as was the case under the Finance Act 2021, to promote digital inclusion, particularly among lower-income users who are disproportionately affected by high connectivity costs. The telecom sector also called for exemption from all withholding taxes, similar to the treatment extended to the banking and oil sectors. The proposal emphasized that real-time advance tax payments under Section 147 of the Income Tax Ordinance, 2001, ensure continuous revenue flows without compromising the exchequer. Furthermore, the industry seeks to make the 4% withholding tax on telecom services under Section 153(1)(b) adjustable rather than final. Given the capital-intensive nature and low margins typical of the industry, this tax often becomes a fixed burden rather than a prepayment of income tax. The proposal also highlights a pressing need to establish a harmonized federal and provincial sales tax structure, especially tailored for the telecom industry, which currently grapples with inconsistent regulations and multiple tax regimes. A uniform service tax law with a single rate across jurisdictions would reduce compliance complexities and eliminate double taxation. Another key demand is the abolition of advance tax on spectrum auctions and license renewals, noting that spectrum represents a temporary right of use rather than a physical commodity. The current tax regime is viewed as irrational and inconsistent with international practices, placing an unnecessary burden on operators. The telecom industry also seeks the removal of a 5% regulatory duty on essential equipment like power systems and batteries, and requests that such items be excluded from retail valuation to cut costs and promote renewable energy use in network infrastructure. Additionally, it has called for the exemption of duties and taxes on optic fiber imports and deployment, which it says will accelerate 5G readiness and improve network coverage. Lastly, industry representatives urged the FBR to reconsider income tax withholding requirements under Section 152 for imports of telecom equipment, emphasizing the need to ease financial and procedural barriers to growth.

Date: 2025-05-09

Details: ISLAMABAD, May 9, 2025 â€” The Overseas Investors Chamber of Commerce and Industry (OICCI) has urged the government to prioritize broadening the tax base in the upcoming budget for FY2025-26, stating that this is essential to achieving a sustainable tax-to-GDP ratio of 15%. In its detailed budget proposals, the OICCI emphasized that rather than increasing the tax burden on already compliant taxpayers, the Federal Board of Revenue (FBR) must allocate substantial resourcesâ€”including IT systems, manpower, intelligence gathering, and data analyticsâ€”to systematically broaden the tax base. The OICCI pointed out that the FBR already possesses data on unregistered individuals and businesses conducting high-value transactions. Sources include banks, utility companies, financial institutions, NADRA, FIA, PITB, and SCBA. Despite this, efforts to convert this intelligence into active taxpayer registration have remained inconsistent. The chamber specifically cited the failure of initiatives like the Tajir Dost Scheme, which aimed to register small traders, as a result of poor stakeholder management, undertrained FBR personnel, and lack of accountability. To correct this, the OICCI recommended a clearly defined roadmap with short- and long-term goals focused on the broadening of the tax net. Key recommendations include: â€¢ Establishing a specialized task force responsible for registering identified unregistered individuals and businesses. â€¢ Launching focused awareness campaigns targeting specific segments of the informal economy. â€¢ Introducing streamlined and accessible tax registration processes, including tax clinics in underserved rural areas. â€¢ Providing incentives such as tax holidays or reduced penalties to encourage voluntary compliance and registration. The OICCI believes that meaningful broadening of the tax base would boost national revenues without raising tax rates. â€œThis approach promotes equity, enhances competitiveness, reduces the size of the informal economy, and helps move towards a more stable and transparent fiscal framework,â€ the chamber stated. In addition to new measures, the OICCI recommended that the FBR revitalize existing initiatives, including: â€¢ Expanding POS registration among Tier-1 retailers. â€¢ Reinstating the POS Prize Scheme. â€¢ Accelerating implementation of the Track and Trace System across all major sectors. â€¢ Enforcing real-time e-invoicing for sales and purchases across supply chains. By focusing on effective management and follow-through of current programs, alongside a robust strategy for broadening the tax base, the OICCI believes Pakistan can achieve its fiscal targets and promote long-term economic stability.

Date: 2025-05-08

Details: ISLAMABAD: The Director Law of the Federal Board of Revenue (FBR) Wednesday initiated extreme action against senior tax officials based on a landmark order issued by the Appellate Tribunal Inland Revenue (ATIR) Islamabad. The order highlighted the poor quality of assessments, which not only erodes taxpayer confidence but also negatively impacts the FBR's performance. In this regard, Director Law and written a letter to FBR Chairman on Wednesday recommending action against involved senior FBR officials. According to tax lawyer Waheed Shahzad Butt, the FBR had previously issued a circular stating that having five assessments reversed in appeal would be considered misconduct. However, the FBR failed to implement this crucial directive except one case where a senior officer was sent to DOT IR for passing accounting and tax laws again. The Director Law has now directed that a report be obtained from the concerned Chief Commissioner. If necessary, instructions will be issued to field formations to prevent such instances from recurring. This development aims to address the issue of frivolous poor assessments and improve the overall performance of the FBR: Waheed added. The FBR directive stated that during the hearing of the appeal in the subject titled case the on the contention of the taxpayer that all the discrepancies pertaining to revenue receipts under section 153(1)(a), contractual receipts under section 153( I )(c) and declared salary expenses were duly reconciled through documentary evidence before the assessing officer which were ignored by the assessing officer and an arbitrary tax demand was created. The Tribunal, to substantiate the appellant's claim provided a complete set of supporting documents with the instruction to verify. Despite repeated opportunities the department did not submit the reconciliation report. The learned DR, the same officer unsupported by any material evidence. Accordingly, the Impugned order is hereby annulled in its entirety, and the tits demand of Rs.43,977,137 deleted. A copy of this order shall he forwarded to the Director General (Legal), Federal Board of Revenue, for information and necessary corrective action to ensure that such instances of high-handedness and procedural lapses are not repeated in the future." â€œThe above state of affairs not only shatter the confidence of the taxpayers but also reflect the performance of the department in negative. It is, therefore. requested that report from the concerned Chief Commissioner may he called and then if warranted necessary instruction to avoid the recurrence of such instances may kindly be issued to the field formations. Copy of the judgment of the Tribunal is enclosedâ€, Director Law added. Copyright Business Recorder, 2025

Date: 2025-05-08

Details: Islamabad, May 8, 2025 â€“ The Federal Board of Revenue (FBR) has imposed a major penalty on Ms. Kiran Zahra, a BS-18 officer of the Inland Revenue Service (IRS), following disciplinary proceedings related to her prolonged unauthorized absence from duty. According to an official notification issued by the FBR, Ms. Zahra, serving as Second Secretary at FBR Headquarters, was charged with â€œmisconductâ€ under Rule 3(b) of the Civil Servants (Efficiency and Discipline) Rules, 2020. Initially, she was granted a two-year ex-Pakistan leaveâ€”comprising 365 days on half pay and another 365 days of Extra Ordinary Leave (EOL) without payâ€”from October 1, 2022, to September 30, 2024. However, instead of rejoining duty on October 1, 2024, she requested a further extension of leave, which was not approved by the competent FBR authority. Despite clear directions from the FBR, communicated through letters dated October 11 and November 4, 2024, Ms. Zahra failed to resume her responsibilities. Consequently, under Rule 7 of the Civil Servants Rules, disciplinary action was initiated without a formal inquiry. A show cause notice was served on February 16, 2025, to which Ms. Zahra responded, citing medical grounds, including diagnoses of granulomatous mastitis and Gohnâ€™s disease. She claimed she was receiving treatment at the Breast Cancer Institute in Westmead Hospital, Australia. A virtual hearing was held on April 24, 2025, during which the IRS officer repeated her earlier stance. The FBR Authority, however, noted inconsistencies in her documentation. She was offered the option to undergo medical verification through an independent board in Pakistan, but she refused. Furthermore, she failed to provide any proof of medication purchases, casting doubt on the legitimacy of her claims. After reviewing the leave records, reply to the show cause notice, and her oral submissions, the Secretary Revenue Division and FBR Chairman concluded that the charges of unauthorized absence stood proven. Accordingly, a major penalty of â€œDismissal from Serviceâ€ was imposed under Rule 4(3)(e) of the Civil Servants (E&D) Rules, 2020. The IRS officerâ€™s absence from October 1, 2024, to date has also been regularized as EOL without pay. Ms. Zahra has the right to file an appeal under the Civil Servants (Appeal) Rules, 1977, within 30 days of this notification. This action by the FBR underscores its commitment to upholding discipline and accountability within the IRS, reinforcing that prolonged unauthorized absences will not be tolerated.

Date: 2025-05-07

Details: ISLAMABAD: Economic Policy and Business Development (EPBD) - a Think Tank has asked the government to immediately withdraw Tax Laws (Amendment) Ordinance 2025, as it would create cash flow disruptions for business community and undermines judicial safeguards that protect businesses during tax disputes. According to an analysis of EPBD of the said Ordinance on Tuesday, it explained that the Tax Laws (Amendment) Ordinance 2025 (Ordinance No. IV of 2025), promulgated by the President on May 2, 2025, introduces three significant amendments that pose grave concerns for Pakistanâ€™s business community at a critical economic juncture. Our analysis reveals serious issues with these amendments. First, changes to Sections 138(3A) and 140(6A) of the Income Tax Ordinance empower tax authorities to demand immediate payment when cases are decided by courts, effectively nullifying established legal timeframes and judicial stays. This creates potential for catastrophic cash flow disruptions and undermines judicial safeguards that protect businesses during disputes. Second, the new Section 175C grants unprecedented authority to tax officials to maintain continuous presence at business premises for monitoring operations. This surveillance mechanism will disrupt business activities, compromise confidential information, and increase compliance costs for enterprises already struggling in challenging economic conditions. Third, amendments to the Federal Excise Act dramatically broaden the governmentâ€™s seizure powers, allowing confiscation of goods based on technical non-compliance while extending enforcement authority beyond specialized tax officials to any government officer, creating heightened business uncertainty. These measures appear particularly unjustified given the remarkable improvement in tax compliance despite challenging economic conditions. The cumulative impact of these amendments extends far beyond tax administration and threatens fundamental aspects of Pakistanâ€™s economic environment. The creation of an unpredictable tax regime with diminished procedural safeguards signals a disregard for legal due process that will inevitably damage Pakistanâ€™s international competitiveness and deter both domestic and foreign investment at a time when capital formation is critically needed. The financial stability of businesses across sectors is placed at risk through the threat of unexpected tax demands that bypass normal judicial processes. Companies will be forced to maintain excessive cash reserves as protection against sudden tax liabilities, thereby reducing productive investment and economic growth potential. The diversion of management attention toward compliance with intrusive monitoring requirements will further impede business efficiency and innovation. Of particular concern are the constitutional implications of these amendments. By effectively limiting the authority of the courts to grant meaningful relief through stays and appeals, these provisions challenge fundamental protections established under Article 199 of the Constitution. The undermining of judicial authority and the resulting threat to separation of powers represents a troubling precedent that extends beyond tax matters to broader questions of governance. EPBD recommends that the government: (i) Review and withdraw the Ordinance to allow for open parliamentary debate and comprehensive stakeholder consultations. This would ensure that revenue objectives can be balanced against economic stability and constitutional principles through a deliberative process. (ii) Restore established legal timeframes for tax recovery and respect judicial stays and appeals as foundational elements of Pakistan's legal framework. A more balanced approach would implement targeted rather than blanket monitoring provisions and create robust safeguards against official overreach. (iii) Establish a structured business-government dialogue to address legitimate revenue concerns through consensus rather than unilateral action. If the government is serious about sustainable revenue generation, it must focus more on rightsizing and rationalizing expenses rather than implementing measures that undermine business confidence and economic stability. EPBD stands ready to facilitate constructive engagement to develop balanced policies that serve both fiscal needs and economic growth objectives. The goal is a prosperous, competitive, and economically stable Pakistan, and achieving this requires a predictable and fair tax regime that supports business growth rather than impedes it. The business community remains committed to contributing its fair share to national development, but this must occur within a framework that respects rule of law and economic sustainability. Copyright Business Recorder, 2025

Date: 2025-05-07

Details: KARACHI: Pakistan Tax Bar Association (PTBA) has requested President Asif Ali Zardari to immediately withdraw the Tax Amendments Ordinance 2025, terming it as an infringement upon the fundamental rights of taxpayers as guaranteed under the Constitution of Pakistan. In a letter to President Asif Ali Zardari, the PTBA called for the immediate withdrawal of the ordinance after conducting a thorough review of its provisions. â€œTaxpayers are the backbone of our economy,â€ the PTBA stated. â€œHowever, following the 26th Constitutional Amendment, the independence of the judiciary has been restricted even in cases where taxpayers are prima facie entitled to a stay order against the alleged tax demand.â€ The bar highlighted a particularly controversial provision requiring taxpayers to deposit 30% of disputed amounts to obtain stay orders, even from high courts. This requirement places an excessive burden on taxpayers before they can access judicial relief, PTBA said. The letter further alleged that the ordinance grants taxation officers â€œunchecked and arbitrary powersâ€ that could lead to harassment and create undue hardship for taxpayers nationwide. Describing it as the effective nullification of appeal rights, the PTBA claimed that tax demands raised by officers are now recoverable within timelines dictated solely by those same officers, rendering appellate remedies â€œredundant and ineffective.â€ â€œSuch unchecked discretion promotes maladministration and injustice,â€ the letter warned. The PTBA expressed concerns about broader economic implications, suggesting that the legislation could damage Pakistanâ€™s investment climate. â€œInvestors will be reluctant to invest in Pakistan if administrative authorities are empowered with excessive, unregulated authority while removing meaningful recourse to appellate remedies,â€ the PTBA cautioned. The tax bar has called for not only the withdrawal of the ordinance but also the suspension of any actions already taken under its provisions. Copyright Business Recorder, 2025

Date: 2025-05-07

Details: Karachi, May 7, 2025 â€“ In a decisive move to tighten regulatory control over the gold trade, the Federal Board of Revenue (FBR) on Wednesday sealed a prominent jewelry shop located on Karachiâ€™s Tariq Road for failing to comply with Point of Sale (POS) integration requirements. The action, carried out by Regional Tax Office (RTO)â€“I Karachi, is part of a wider crackdown targeting non-compliant jewelers across Pakistan. According to FBR officials, the sealed jewelry outlet had failed to install the mandatory POS system, which is a critical tool for documenting sales transactions and ensuring proper tax reporting. Jewelry shops, especially those dealing in gold and other precious items, are legally required to connect their sales systems to the FBRâ€™s network, allowing real-time monitoring of their transactions. The FBR has ramped up enforcement following an unprecedented 47% rise in gold prices over the current fiscal year. The price of 24-karat gold per Tola surged from Rs241,700 in July 2024 to Rs356,100 by May 6, 2025, raising concerns that many dealers may be facilitating undocumented transactions for profit or money laundering purposes. FBR sources confirmed that this enforcement initiative is part of a broader strategy to monitor high-risk financial activities in Pakistanâ€™s gold and jewelry sector. Authorities believe that the spike in prices has triggered the liquidation of undeclared gold holdings, potentially contributing to financial crimes. To combat this, the FBR is strictly enforcing Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) laws. Jewelry businesses, classified as Designated Non-Financial Businesses and Professions (DNFBPs), must now comply with enhanced due diligence protocols under the AML Act 2010 and FBRâ€™s 2020 AML/CFT Regulations. This includes mandatory customer profiling, verification of income sources, and reporting of all gold transactions exceeding Rs2 million to the Financial Monitoring Unit (FMU) via Currency Transaction Reports (CTR). Furthermore, jewelers are now obligated to flag any suspicious transaction to the FMU and conduct Enhanced Due Diligence (EDD) for high-risk customers, including Politically Exposed Persons (PEPs). However, not all stakeholders agree with the FBRâ€™s approach. Qasim Shikarpuri, President of the All Pakistan Sarafa Gems and Jewelers Association, has strongly opposed the recent actions. In recent statement, he criticized the classification of jewelers under DNFBPs, calling it an unjust burden on small and medium-sized businesses. â€œThis move portrays honest jewelers as criminals,â€ he argued, adding that people involved in illicit financial activities typically avoid investing in jewelry due to high resale losses. Shikarpuri also accused the FBR of corruption and misuse of POS systems, claiming they are often exploited by field officers to extract bribes. He urged the government to support, rather than target, the struggling business community, especially the jewelry sector, which is already grappling with inflation and a decline in consumer spending. Despite the backlash, the FBR maintains that tighter regulation of jewelry businesses is crucial for increasing documentation, curbing financial crimes, and broadening Pakistanâ€™s tax base.

Date: 2025-05-07

Details: The Pakistan Tax Bar Association (PTBA) has strongly opposed the recently promulgated Tax Amendments Ordinance 2025, calling it a direct infringement on the constitutional rights of taxpayers. In a formal letter addressed to President Asif Ali Zardari, the PTBA urged the immediate withdrawal of the ordinance, following a comprehensive review of its contentious provisions. According to the PTBA, the ordinance introduces amendments that fundamentally alter the legal protections afforded to taxpayers under the Constitution of Pakistan. The association emphasized that these changes compromise the independence of the judiciary, especially in matters where taxpayers seek stay orders against tax demands. Citing the 26th Constitutional Amendment, the PTBA noted that judicial authority has been curtailed, undermining the balance necessary for a fair tax dispute resolution system. A particularly controversial amendment, the PTBA highlighted, is the requirement for taxpayers to deposit 30% of the disputed tax amount in order to obtain a stay orderâ€”even from a high court. This, the PTBA argues, places an undue financial burden on taxpayers and obstructs their access to timely judicial relief. â€œSuch a provision is not only harsh but also discourages genuine appeals by making them financially prohibitive,â€ the PTBA asserted. The PTBA further raised alarm over amendments that appear to expand the discretionary powers of taxation officers without adequate checks and balances. The association warned that the ordinance effectively grants tax officials arbitrary authority to enforce tax recovery, bypassing traditional appellate safeguards. â€œThese amendments render the appeals process redundant and expose taxpayers to potential abuse,â€ the PTBA cautioned. Describing the ordinance as a step toward administrative overreach, the PTBA expressed deep concern over its broader economic implications. The association warned that empowering tax authorities without ensuring adequate recourse to justice could deter both local and foreign investors. â€œNo investor will feel secure in an environment where executive powers are unchecked and judicial remedies are practically inaccessible,â€ the PTBA stated. In its closing remarks, the PTBA reiterated its demand for the immediate revocation of the Tax Amendments Ordinance 2025 and urged that any actions already undertaken under its provisions be suspended. The PTBA stands firm in defending taxpayer rights and ensuring the integrity of the tax justice system in Pakistan.

Date: 2025-05-06

Details: The All Pakistan Textile Mills Association (APTMA) voiced concerns against the newly promulgated Ordinance No. IV of 2025, issued on May 2, terming it â€œa draconian measureâ€ with â€œfar-reaching and concerning amendments to the Income Tax Ordinance, 2001â€. In a statement released on Tuesday, APTMA urged the government to immediately withdraw these amendments and engage with stakeholders â€œto ensure that any tax reforms are fair, transparent, and respectful of the rule of lawâ€. The federal government on Saturday promulgated â€œTax Laws (Amendment) Ordinance, 2025â€ for immediate/ sudden recovery from taxpayersâ€™ bank accounts or other movable/ immovable properties and sealing of business premises after the decision from higher courts without any further notice. The ordinance has also empowered the Federal Board of Revenue (FBR) to depute tax officials at manufacturing/ business premises to monitor production, supply, and stock of unsold goods. However, APTMA, one of the countryâ€™s largest trade organization, expressed concerns that the amendments inserted into Sections 138 and 140 of the Income Tax Ordinance effectively â€œstrip taxpayers of their legal rights and protections under the lawâ€. â€œThe changes empower the FBR beyond reason and above the High Courts and the Supreme Court of Pakistan. â€œThe revised provisions override legal timelines and judgments, granting FBR unfettered authority to enforce its demands regardless of judicial relief,â€ read the statement. APTMA warned that the ordinance â€œdangerously expands the discretionary powers of the FBR, an institution already frequently criticised for high-handedness and harassment of compliant taxpayersâ€. It said that by nullifying court decisions and prescribed timelines, the ordinance undermines the sanctity of the judicial process and the principle of due process enshrined in the constitution. â€œIt will only exacerbate the climate of fear and uncertainty for legitimate businesses, creating an environment detrimental to investment and growth,â€ it added. Meanwhile, APTMA welcomed the Monetary Policy Committeeâ€™s decision to reduce the policy rate by 100 basis points (bps). â€œThis is a commendable step that will aid in reviving economic activity and providing some relief to the beleaguered industrial sector. However, APTMA believes that a more substantial reduction in the policy rate was both justified and necessary.â€

Date: 2025-05-06

Details: KARACHI, May 6, 2025 â€” In response to the sharp surge in gold prices and the growing risks of financial crimes, the Federal Board of Revenue (FBR) has intensified its efforts to monitor money laundering activities in Pakistanâ€™s gold trade sector. The FBR is actively scrutinizing transactions involving the buying and selling of gold, aiming to curb undocumented exchanges and bring potential taxpayers into the tax net. According to sources within the local tax office, the FBRâ€™s monitoring efforts are focused on jewelers who may be facilitating unregulated gold transactions. Authorities are concerned that the dramatic rise in gold prices has prompted individuals holding undocumented gold to liquidate their assets for hefty profits. Over the current fiscal year, gold prices have soared by an unprecedented 47%, with 24-karat gold per tola climbing from Rs241,700 in July 2024 to Rs356,100 as of May 6, 2025. In light of these developments, the FBR is applying strict enforcement of Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) laws within the gold sector. Dealers in Precious Metals and Stones (DPMS) are now subject to enhanced compliance under the AML Act 2010 and FBR AML/CFT Regulations for DNFBPs (Designated Non-Financial Businesses and Professions), 2020. All gold dealers are required to carry out Customer Due Diligence (CDD) before executing any transaction. This process involves collecting detailed identification and financial data from customers, including source of funds, proof of income, and beneficial ownership status. In high-risk casesâ€”such as dealings with Politically Exposed Persons (PEPs)â€”Enhanced Due Diligence (EDD) measures must be implemented. Additionally, DPMS are expected to promptly report any suspicious transaction related to gold sales to the Financial Monitoring Unit (FMU). Failure to comply may result in penalties or even legal proceedings. The FBR has also mandated that all gold-related transactions worth two million rupees or more must be reported as Currency Transaction Reports (CTR) to the FMU. The FBR is also stressing the importance of maintaining comprehensive records of gold transactions for at least five years. This includes copies of identity documents, CDD forms, and transaction receipts, ensuring traceability and accountability. This proactive move by the FBR highlights the need to formalize the gold trading sector, which has long remained vulnerable to financial crimes. With gold becoming an increasingly popular store of value amid economic uncertainty, the FBR aims to prevent its misuse in laundering illicit wealth and to ensure that gold trade contributes fairly to national revenue.

Date: 2025-05-06

Details: KARACHI: In a strong display of solidarity, the Karachi Chamber of Commerce and Industry (KCCI) and the Rawalpindi Chamber of Commerce and Industry (RCCI) have jointly voiced firm opposition to the Tax Ordinance (Amendment) 2025, calling it detrimental to business growth and investor confidence in Pakistan. At a high-profile meeting hosted by KCCI, a visiting RCCI delegation joined hands with their Karachi counterparts to outline a strategic roadmap for collaborative advocacy. The meeting aimed to deepen inter-chamber coordination and initiate the formation of an Inter-Chambers Harmony Committeeâ€”an inclusive platform to unify chambers nationwide under one umbrella. Chairman Businessmen Group (BMG) Zubair Motiwala, speaking via Zoom, emphasized that fragmented representation has weakened the business communityâ€™s impact on policymaking. â€œItâ€™s time for all chambers, including KCCI and RCCI, to raise a single, powerful voice. We face the same issuesâ€”crippling taxation, energy inflation, and regulatory overreachâ€”and must respond with unity,â€ he stated. He criticized harsh policies like SRO709 and SRO350, calling them tools of harassment. President KCCI Muhammad Jawed Bilwani reiterated his long-standing collaboration with RCCI, highlighting the urgent need for unified lobbying. He warned that the new tax ordinance, if implemented, would drive further capital flight and disincentivize local enterprise. â€œPakistanâ€™s global business credibility is on the decline. RCCI and KCCI must lead a collective stand to reverse this trend through credible, merit-based dialogue,â€ he said. President RCCI Usman Shaukat underlined that the economic challenges affect all chambers equally. â€œThe governmentâ€™s divide-and-rule strategy must be countered with a joint response. RCCI is committed to working alongside KCCI and others to push for reforms that truly support business,â€ he stated. He also invited KCCI to participate in RCCIâ€™s upcoming All Pakistan Chambers Conference for wider economic discourse. RCCI Group Leader Sohail Altaf called for institutional cooperation and proposed that RCCI and KCCI formalize their alliance through a Memorandum of Understanding (MoU). â€œOur combined voice can set a precedent for all chambers. Together, RCCI and KCCI can become catalysts for meaningful reform,â€ he asserted. Both KCCI and RCCI reaffirmed their dedication to fostering an enabling environment for businesses, urging the government to abandon coercive tax measures and instead promote industrial growth, economic justice, and policy consistency.

Date: 2025-05-06

Details: Karachi, May 6, 2025 â€“ The Karachi Tax Bar Association (KTBA) has formally recommended that the Federal Board of Revenue (FBR) reorient its tax policy strategy by prioritizing the enforcement of tax return filing rather than relying heavily on collecting higher taxes from non-filers. This recommendation was made as part of KTBAâ€™s proposals for the federal budget 2025â€“26. In its detailed submission, the KTBA called for the abolition of the Tenth Schedule of the Income Tax Ordinance, 2001. This particular schedule allows for elevated rates of withholding taxes on individuals and entities not appearing on the active taxpayers list. The KTBA emphasized that the original intent of this schedule was to serve as a mechanism to identify and track potential taxpayers who were outside the formal tax system. According to the KTBA, the FBR has now amassed a substantial database of non-filers through this mechanism. In light of this development, the KTBA argued that the continuation of the Tenth Scheduleâ€”despite its punitive natureâ€”no longer serves its intended purpose and instead places an undue burden on the economy. â€œWhat was once a tracking mechanism has now turned into a revenue-generation tool, which contradicts the spirit in which the schedule was introduced,â€ the KTBA noted. The association urged the FBR to adopt a more strategic and long-term approach to broadening the tax base. This includes leveraging digitization, utilizing data analytics for risk-based audits, and strengthening legal enforcement to bring non-filers into the tax net. The KTBA believes such reforms would create a more equitable system and improve voluntary compliance in the long run. The KTBA also expressed concerns that the current reliance on high withholding tax rates has created distortions in the tax system, leading to a situation where non-filers prefer to pay extra rather than becoming compliant. This, they argue, defeats the entire purpose of tax base expansion. To remedy this, the KTBA has proposed that the FBR now actively pursue non-filers through targeted enforcement rather than passive revenue collection via higher rates. The association concluded that by moving away from short-term revenue goals, the FBR can lay the foundation for a fairer and more sustainable tax regime that promotes compliance through accountability and modernization.

Date: 2025-05-06

Details: Karachi, May 6, 2025 â€“ In a significant move to strengthen ties with the business sector and improve transparency, the Federal Board of Revenue (FBR) has announced the establishment of a dedicated tax facilitation counter in Karachi. The initiative aims to provide seamless support and guidance to taxpayers, ensuring they have the necessary tools and knowledge to meet their tax obligations with ease. Senior FBR officials met with representatives from various business associations on Monday to explore strategies for enhancing cooperation, addressing grievances, and fostering a tax-compliant culture. During the meeting, it was decided that a specialized facilitation counter will soon be operational to serve as a central point for assisting taxpayers and addressing their concerns in real time. Additionally, a dedicated WhatsApp number was launched to enable the business community to report instances of corruption or malpractice directly. The meeting was jointly chaired by Dr. Faheem Mohammad, Chief Commissioner of the Regional Tax Office-1 (RTO-1), Zahid Masood, Chief Commissioner of the Corporate Taxpayers Office (CTO), and Aftab Alam, Chief Commissioner of the Medium Taxpayers Office (MTO). In their remarks, the FBR officials emphasized that the department is committed to simplifying procedures and building trust through proactive facilitation measures. Business community representatives emphasized the importance of awareness and education. They called for regular seminars, workshops, and communication campaigns to educate taxpayers about current laws, procedures, and rights. The consensus was clear: facilitation and education are critical to encouraging voluntary compliance and discouraging tax evasion. Responding to concerns about enforcement measures, particularly actions related to Point-of-Sale (PoS) violations, FBR officials assured participants that cooperation and coordination with trade bodies will remain central. Chief Commissioner RTO-1 Dr. Faheem stressed the importance of collective responsibility in combating tax evasion, while CTOâ€™s Zahid Masood reiterated FBRâ€™s intention to remove unnecessary hurdles from tradersâ€™ paths. MTO Chief Commissioner Aftab Alam underlined the need for a mutually respectful relationship between FBR and taxpayers, centered on transparency, communication, and facilitation. He noted that the path to a fair and efficient tax system lies in collaboration and trust. With these steps, the FBR aims to foster a taxpayer-friendly environment where facilitation is not just a serviceâ€”but a core principle.

Date: 2025-05-06

Details: As Pakistan gears up for Budget 2025-26, the Federal Board of Revenue (FBR) is actively working on two major fiscal proposals â€” imposing a tax on high-value pensions and increasing the income tax exemption threshold for salaried individuals. These measures are expected to be submitted to the prime minister for approval ahead of the IMF missionâ€™s visit on May 16. According to sources, the FBR is considering a nominal tax on pensions drawn by retired individuals receiving substantial monthly amounts. The proposal targets pensioners earning Rs0.4 million or more per month, with possible tax rates ranging between 2.5% and 5%. The move aims to bring equity into the tax net by focusing only on affluent pensioners such as retired Grade-22 officers, ex-judges, senior bureaucrats, and armed forces personnel. Lower-income pensioners will remain unaffected. This proposed pension tax aligns with recommendations from the International Monetary Fund (IMF), which has emphasized the need to broaden Pakistanâ€™s tax base. The IMF may push for taxing pensions beginning from Rs100,000 per month, but FBR insiders note that the final decision will be political in nature and based on fiscal viability. The FBR is also proposing to increase the income tax exemption threshold from Rs0.6 million to between Rs1 million and Rs1.2 million annually. This measure is intended to provide relief to the middle class and reduce the tax burden on salaried individuals, who currently contribute a significant portion of the overall revenue. FBR officials stress that both proposals â€” the taxation of pension and the revised exemption limit â€” are part of a broader revenue strategy for the next fiscal year. These changes are designed not only to increase tax collection but also to respond to economic pressures and public demand for fairer taxation. Meanwhile, the Senate Standing Committee on Finance is engaging with various industry stakeholders to gather input for the upcoming budget. Associations representing poultry, dairy, textile, and construction sectors have submitted their demands, including reduction in sales tax, withdrawal of advance taxes, and support for export-oriented industries. The proposal to tax pension has been highlighted five times in recent policy discussions, reflecting its growing importance in budget considerations. As the IMF mission approaches, the FBR is preparing to defend its reform agenda, which could reshape Pakistanâ€™s taxation landscape in the coming fiscal year.

Date: 2025-05-05

Details: ISLAMABAD: Peshawar High Court (PHC) has declared that the Audit Officers of Directorate General of Intelligence and Investigation â€“ Inland Revenue (DG I&I-IR), do not possess independent statutory powers to assess, adjudicate, or recover sales tax liabilities of sales tax registered persons. It is reliably learnt that this landmark decision came in response to a sales tax reference filed by an Abbottabad-based taxpayer, who challenged the jurisdiction of DG I&I (IR) Audit Officer from Peshawar. Case was argued by tax lawyer Waheed Shahzad Butt and the Division Bench agreed, observing: â€œIt is unclear how an officer of the DG I&I (IR), Peshawar, could independently calculate and assess the sales tax liability of the Applicant situated in Abbottabad. Such actions are beyond the statutory framework governing their powers.â€ PHC order states: â€œSince the entire exercise has been conducted, the liability in question assessed and contravention report has been made by the Audit Officer of DG I&I (IR), Peshawar. Audit Officers of the DG I&I (IR), Peshawar do not have independent statutory powers to assess, adjudicate, or recover sales tax liabilities. Their powers were limited to detection, investigation, and reporting of cases involving tax evasion, fraud, or non-compliance, preparation of contravention reports, conduct audits and seek information Every registered person operating within the supply chain claims adjustment or refund of input tax. Without a proper determination of the input tax claimed or claimable, it is unclear how an officer of the DG I&I (IR), Peshawar, could independently calculate and assess the sales tax liability of the Applicant situated in Abbottabad. Audit Officer of DG I&I, Peshawar, unlawfully assumed jurisdiction, prepared a contravention report without conducting an audit under Section 25 or examining records under Section 38, and improperly determined a sales tax liability. These actions were without jurisdiction and void ab initio. The Adjudicating Officer, without conducting any independent inquiry or applying his own mind, simply endorsed the findings of the Audit Officer DG I&I (lR). Similarly, both the CIR (Appeals) and the Appellate Tribunal failed to address these jurisdictional and procedural defects, culminating in an unjustified imposition of huge liability upon the taxpayer Waheed Butt informed that the said judgment reinforces the principle of jurisdictional integrity and legal authority in tax administration. It provides much-needed clarity on the limits of power vested in investigative officers and ensures that taxpayers are not subjected to arbitrary assessments. It is therefore concluded that the entire proceedings, from their very inception, being without jurisdiction and without lawful authority, are void and of no legal effect, PHC order added.

Date: 2025-05-05

Details: Islamabad, May 5, 2025 â€“ President of the All Pakistan Sarafa Gems and Jewelers Association, Qasim Shikarpuri, has strongly criticized the governmentâ€™s latest economic policies, calling them a fresh assault on the already struggling business community. He specifically objected to the inclusion of jewelers in the new Tax Laws (Amendment) Ordinance 2025, under which they have been classified as Designated Non-Financial Businesses and Professions (DNFBPs), placing them under anti-money laundering regulations. According to Shikarpuri, this step is unfair and seems more like a targeted move against small and medium traders. He said that linking jewelers to money laundering is misleading and damaging. â€œPeople involved in money laundering donâ€™t buy jewelry,â€ he explained. â€œThey avoid it because when they try to resell it, they lose 20 to 25% of the value. No one involved in illegal money transfers would accept such a loss.â€ He added that the business sector in Pakistan, especially jewelers, is already facing immense financial challenges due to inflation and reduced customer spending. â€œInstead of offering support, the government is adding more pressure and treating honest traders as criminals,â€ he said. Shikarpuri pointed out that while wealthy individuals and powerful groups often escape taxation, the Federal Board of Revenue (FBR) continues to focus on those who are already paying taxes responsibly. He also accused the FBR of widespread corruption, especially through the misuse of Point of Sale (POS) systems. According to him, POS devices have become tools for monthly bribe collection. Giving more authority to FBR field officers will only increase corruption and open new doors for the elite and officials to demand illegal payments. Meanwhile, small traders, including jewelers, will face even harsher conditions. Shikarpuri urged the government to stop making the business community pay the price for its own mismanagement. â€œThis tax policy is clearly against the interests of traders and jewelers. Itâ€™s deeply concerning,â€ he said. The Association plans to continue protesting through legal and democratic means. He demanded that the government immediately reverse the unfair actions against jewelers and consult with stakeholders before enforcing such damaging measures.

Date: 2025-05-04

Details: ISLAMABAD: In a significant move to broaden the tax base and address long-standing inequities in Pakistanâ€™s tax structure, the Federal Board of Revenue (FBR) has operationalised Section 175C of the Income Tax Ordinance, 2001. This provision authorises Inland Revenue Officers to be stationed at business premises to monitor production, stocks, supply of goods, and more importantly, the rendering of servicesâ€” especially by integrated enterprises in the largely undocumented service sector. Similar provisions of the enforcement mechanism under Section 175C have existed under the Sales Tax Act, 1990 and Federal Excise Act, 2005 with respect to goods. This step simply brings services into parity, ensuring fair and comprehensive oversight across sectors, tackling the underground economy, which is estimated to be more than 30% of the formal GDP. The measure is a response to growing public concern over the increasing tax fatigue among the salaried class and documented manufacturers. Through enhanced documentation of the high-potential service sector, FBR aims to create fiscal space that could allow potential downward revisions in personal income tax rates on salary earners. In contrast, the service sectorâ€”representing nearly 60% of GDPâ€”remains largely undocumented, with over 70% of enterprises reportedly unregistered, leading to significant tax leakages. The scope of this section specifically targets high-earning yet under-documented businesses including restaurants, hotels, guest houses, marriage halls, clubs, courier and cargo services, beauty parlours, clinics, hospitals, diagnostic laboratories, gyms, foreign exchange dealers, photographers, and traders. Alarmingly, some private hospitals are reportedly charging Rs 100,000 to 200,000 per day for inpatient room occupancyâ€”rates that exceed even those of five-star hotels. Many of these entities are underreporting revenues and non-compliant with tax laws, thus undermining public trust and depriving the state of critical revenue needed for social services and infrastructure. The FBR reiterates that the intent behind this legislation is that those rendering services and profiting from Pakistanâ€™s booming urban and semi-urban markets must shoulder their lawful tax obligations. FBR urges all stakeholders to cooperate with tax authorities and ensure compliance. â€œTogether, we can create a more just and robust fiscal architectureâ€”one that does not penalize the honest and reward the non-compliant.â€ Copyright Business Recorder, 2025

Date: 2025-05-04

Details: Karachi, May 4, 2025 â€“ The Karachi Chamber of Commerce and Industry (KCCI) has strongly denounced the recently promulgated Tax Laws (Amendment) Ordinance, 2025, calling it undemocratic and detrimental to business confidence. KCCI has demanded the federal government immediately revoke the ordinance and hold a transparent parliamentary debate involving all relevant stakeholders. In a strongly worded statement on Sunday, KCCI President Muhammad Javed Bilwani criticized the ordinance for granting sweeping powers to the Federal Board of Revenue (FBR), particularly in matters of tax recovery. He said that the ordinance bypasses both Parliament and the Judiciary, undermining the constitutional checks and balances essential to democratic governance. The controversial ordinance, issued just a day earlier by the President of Pakistan, amends Sections 138 and 140 of the Income Tax Ordinance, 2001, as well as key clauses in the Federal Excise Act, 2005. These changes authorize the FBR to take immediate recovery actionsâ€”such as freezing bank accounts, attaching properties, and sealing business premisesâ€”after a final verdict from the High Court or Supreme Court, without issuing any further notice. Bilwani termed this an unacceptable overreach, stating, â€œAllowing tax authorities to forcibly recover dues immediately after a court verdict, without even a basic opportunity for voluntary compliance or appeal, amounts to harassment and a violation of due process.â€ Further provisions in the ordinance empower FBR officials to be stationed within factories and business sites to monitor production, inventory, and the flow of goods. The KCCI views this move as invasive and alarming for businesses already grappling with regulatory pressures. â€œThe deployment of tax officers in business premises is not just intrusiveâ€”itâ€™s pure harassment,â€ said the KCCI president. â€œThis ordinance disrespects the Constitution, undermines the judiciary, and sends a damaging signal to the investment community.â€ KCCI emphasized that the amendments to the Federal Excise Act appear to be driven by ill intent rather than reform. The Chamber reiterated its call for the government to immediately withdraw the ordinance and engage with stakeholders through proper legislative processes. KCCI stands firm in its resolve to protect business interests and uphold democratic accountability in all fiscal policymaking.

Date: 2025-05-04

Details: Karachi, May 4, 2025 â€“ The Karachi Tax Bar Association (KTBA) has put forward a detailed proposal for the Federal Board of Revenue (FBR) to adopt a comprehensive and transparent audit plan aimed at improving tax compliance and restoring taxpayer confidence. In its formal recommendations for the Federal Budget 2025â€“26, the KTBA has emphasized the need to reform the existing mechanism under Section 177 of the Income Tax Ordinance, 2001. According to the association, the current audit framework is widely seen as inconsistent, overly discretionary, and often burdensome for compliant taxpayers. The KTBA believes that an improved and systematic audit regime will not only enhance efficiency but also help reduce harassment and promote voluntary tax compliance. As part of its proposals, the KTBA has recommended the creation of a dedicated audit wing within the FBR, equipped with modern tools and technologies to identify cases for audit using objective, risk-based criteria. This wing should be responsible for selecting taxpayers based on specific indicators of non-compliance, rather than on arbitrary or subjective grounds. To make the audit process more effective and comprehensive, the KTBA has advocated for the integration of income tax, sales tax, and federal excise duty (FED) audits into a single, unified process. Such combined audits would give tax authorities a more complete view of a taxpayerâ€™s financial operations and reduce duplication of effort. Moreover, it would lower compliance costs and prevent repeated interactions with taxpayers for separate tax categories. KTBAâ€™s plan also stresses the importance of judicially guided audit practices. Audits should be conducted in a structured manner, consistent with court decisions, to ensure fairness and legal conformity. Post-audit, a clear and concise report should be submitted to the jurisdictional officer, who would then initiate any necessary assessment proceedings. The KTBAâ€™s proposal aims to modernize Pakistanâ€™s tax enforcement system, align it with international best practices, and foster a culture of compliance through trust, transparency, and reduced administrative burden. By introducing a structured and fair audit strategy, the FBR can boost its credibility and improve tax collection without alienating taxpayers.

Date: 2025-05-04

Details: Karachi, May 4, 2025 â€“ The Pakistan Stock Exchange (PSX) has urged the Federal Board of Revenue (FBR) to reinstate tax credits for the salaried class investing in the capital market. In its detailed budget proposals for FY2025-26, the PSX emphasized that restoring these credits would be instrumental in encouraging long-term savings and strengthening participation in the formal investment ecosystem. The PSX noted that tax credits are particularly important for small-scale investors, especially salaried individuals, who often rely on modest savings to plan for retirement or meet major financial goals. These savings, when directed towards the capital market, not only help individuals build financial security but also contribute to the broader economy by supporting equity and debt markets, including government securities. In its submission, the PSX warned that the removal of tax credits under the Finance Act 2022 has had a discouraging effect on retail investor participation. The withdrawal of incentives that previously applied to investments in new shares, mutual funds, sukuks, and life insurance policies is believed to have redirected public funds toward informal or undocumented investment avenues offering higher returns but lacking transparency. The PSX has specifically proposed the reinstatement of Section 62 of the Income Tax Ordinance, 2001. This provision allowed tax credits for individual investors, encouraging disciplined savings behavior. According to the PSX, bringing back Section 62 would have minimal impact on government revenue while delivering long-term benefits by cultivating a savings-oriented culture among citizens. In its rationale, the PSX highlighted that the tax credits under Section 62 had historically served as a key motivator for individuals to invest in regulated financial instruments. For a country like Pakistan, where the savings rate lags behind regional peers, such incentives are not only beneficialâ€”they are necessary. The PSX also pointed out that similar investment-linked tax incentives are widely used in other countries to support retirement savings and ensure financial inclusion. Reinstating these credits could act as a catalyst in reviving retail investor interest and promoting formal investment practices, especially among the salaried class that forms a substantial segment of Pakistanâ€™s working population.

Date: 2025-05-04

Details: The federal government has triggered serious concerns across the business and legal communities by granting sweeping, extraordinary powers to the Federal Board of Revenue (FBR) through the Tax Laws Amendment Ordinance, 2025â€”bypassing parliamentary debate just weeks ahead of the federal budget. This latest move, driven by a colossal Rs830 billion tax shortfall, reeks of desperation and signals a dangerous shift toward unchecked executive authority. President Asif Ali Zardariâ€™s decision to promulgate this ordinance speaks volumes about the governmentâ€™s financial panic. Rather than presenting these drastic changes through the budget process and allowing public scrutiny, the FBR has now been armed with aggressive new tools to clamp down on taxpayers, directly access bank accounts, and even post officers inside business premises. These are not just procedural adjustmentsâ€”they are an alarming encroachment on civil and commercial liberties. One of the most disturbing aspects of the ordinance is the insertion of Section 138(3A) in the Income Tax Ordinance. This provision allows the FBR to initiate immediate recovery of tax liabilities once a superior court rules against a taxpayerâ€”eliminating time extensions and limiting legal recourse. It disregards the fact that multiple legal issues may still be unresolved or pending in higher courts. With this, the FBR is now empowered to recover dues directly from taxpayersâ€™ bank accounts or through third parties, effectively turning tax collection into a punitive weapon. The FBR has also gained powers under the newly added Section 175C, allowing the Chief Commissioner to post Inland Revenue officers at business premises to monitor production, supply, and even unsold stock. This Orwellian surveillance-style enforcement will breed fear, disrupt operations, and deepen distrust between businesses and the state. Legal experts warn that such measures erode due process and incentivize corruption within tax enforcement agencies. Further amendments to the Federal Excise Act enable the FBR to confiscate goods lacking proper tax stamps, barcodes, or labelsâ€”again, authorizing both federal and provincial officials to wield power without sufficient oversight. The ambiguity and wide net cast by these provisions will likely ensnare legitimate businesses already reeling from inflation and high compliance costs. For a government that set a sky-high revenue target of Rs12.97 trillion, these draconian changes signal failure. Only Rs36 billion has so far been recovered in windfall tax casesâ€”far below the Rs400 billion promised by Prime Minister Shehbaz Sharif. Unrealistic fiscal expectations have backfired, and now the FBR is being weaponized to close the gapâ€”at the expense of legal safeguards and economic stability. The Lahore Chamber of Commerce and Industry has rightly denounced these amendments, demanding their reversal. If not curbed, this unchecked empowerment of the FBR will cripple business confidence, stifle investment, and alienate the very taxpayers the state seeks to engage. This is not reform. This is panic policy-making, and it risks turning the FBR into a predator rather than a partner in national progress.

Date: 2025-05-04

Details: May 4, 2025 Karachi, May 4, 2025 â€“ Tea importers have urged the government and tax authorities to urgently review the current minimum retail price (MRP) mechanism applied to tea, warning that the existing framework is distorting the market, undermining legal trade, and facilitating widespread tax evasion. In its formal budget recommendations for the upcoming Finance Bill 2025â€“26, the Pakistan Tea Association (PTA) highlighted several critical issues impacting the tea sector. The association stated that over 71,000 metric tons of tea were imported duty-free under concessions granted to the tribal regions of FATA and PATAâ€”areas with a combined population of just 4 million people. Based on the national per capita consumption rate of 1.2 kg per year, actual regional demand should not exceed 4,800 metric tons. The PTA, representing tea importers, warned that this discrepancy has allowed unscrupulous elements to exploit the tax-free regime, flooding the market with untaxed tea and forcing legitimate importers out of competition. â€œThis abuse is weakening the formal sector, costing the national exchequer billions, and threatening the viability of registered tea importers,â€ said PTA Chairman Muhammad Altaf. One of the key concerns raised was the arbitrary enforcement of SRO 1735(1)/2024, which mandates the application of sales tax on tea using a fixed MRP of Rs1,200 per kg, regardless of the actual import value or the form in which tea is brought into the country. â€œThis blanket valuation ignores the diverse nature of tea importsâ€”some of which arrive in bulk quantities exceeding 75 kg per bag and are later blended, processed, and repackaged,â€ Altaf said. He added that tea importers source tea at prices ranging from under $1 per kg to more than $3 per kg, yet all varieties are taxed uniformly. â€œSuch a mechanism lacks fairness and punishes lower-income consumers while disregarding the actual trade realities faced by legal tea importers,â€ he stressed. The PTA has called for the removal of the MRP clause and proposed several reforms, including tariff rationalisation and stricter controls at dry ports. These include reducing customs duty from 11% to 5%, eliminating regulatory duty, and cutting sales tax and withholding tax significantly. It also recommended limiting re-exports under the Export Facilitation Scheme (EFS) and ensuring PTAâ€™s oversight in verification of tea consignments. With these reforms, tea importers estimate that legal imports could soar to 300 million kilograms annually, boosting tax revenues from the current Rs68 billion to an estimated Rs108.9 billion, ensuring a more equitable and transparent tea trade ecosystem.

Date: 2025-05-01

Details: ISLAMABAD: The Senate Standing Committee on Finance and Revenue, Wednesday, endorsed a proposal of the business community for not extending sales tax exemption in erstwhile tribal areas beyond June 30, 2025. The sales tax exemption to erstwhile tribal areas would expire on June 30, 2025. Chairman of the committee Saleem Mandviwalla was of the view that the formal sectors such as steel, ghee/ cooking oil and others have disadvantageous position due to this exemption. â€œWe are well aware of the issue and taken the decision and we will make recommendation,â€ he added. The committee met here on Wednesday to initiate for pre-budget 2025-26 consultations with stakeholders including Federation of Pakistan Chamber of Commerce and Industry (FPCCI), Chambers and Associations. Jawed Bilwani, president Karachi Chamber of Commerce and Industry (KCCI) highlighted the special tax regime in the ex-FATA region and pointed out that a major portion of tea imports is routed through this region due to the significantly lower taxes. He also highlighted the issue of low duties and taxes on the raw materials of the plastic industry, particularly polyethylene for manufacturers. He reiterated that manufacturers import more raw materials due to these low taxes and then sell them at higher prices. Moreover, he echoed his concerns about the refund of sales tax after nine months despite the Federal Board of Revenue (FBR)'s claims of refunds within 72 hours. He stated that the late refunds and advance taxes have increased the cost of doing business manifold. Mandviwalla stated that the FBR had admitted before the committee the 72-hour refund policy of sales tax. The committee decided to take up the matter in the upcoming budget meetings. Exporters recommended to reinstating the zero-rating of local supplied to registered exporters under export facilitation scheme (EFS) to ease down the liquidity pressure and smooth operation. Further, they proposed to consider zero-GST on utilities (power and gas) to exporters registered in the EFS to facilitate the exports ensuring availability of required/ adequate liquidity and smooth cash flow, to boost the confidence of exporters to enhance their exports and strengthen their business ties with the foreign counterparts to capture true business potential. Business community stated that Finance Act 2024 shifted exporters from the Final Tax Regime (FTR) to the Income Tax Regime (NTR) which created significant compliance burden. It also proposed to restore the FTR for exporters to simplify on FBR audits, considering its limited capacity. This will enhance the ease of doing business and promote growth in documented sectors and support. The Lahore and Gujranwala Chambers of Commerce and Industry raised the matter of advance tax on exports. They apprised that the State Bank charged one percent tax plus an additional one percent tax on remittances. They proposed the rationalisation of the said tax. Furthermore, Sialkot Chamber of Commerce and Industry highlighted the expulsion of tribunals for matters in which sales tax exceeds up to Rs2 million and income tax up to Rs1 million, expressing concern over the lack of proper appellate forums for small taxpayers. The Committee assured the chamber that it would take up the matter in the upcoming budget. Additionally, the Sialkot Chamber emphasised the need to cater to the growing number of young entrepreneurs, with around 600 to 700 new registrations recorded each year, highlighting the importance of supportive policies for this emerging business segment. Additionally, the Rawalpindi Chamber of Commerce and Industry proposed a 15 percent GST in the upcoming budget to provide ease to the dying industry. President RCCI Usman Shaukat also proposed providing tax incentives to export-based industries upon completion of export targets, in addition to providing necessary financial facilities to small and medium enterprises. The Islamabad Women Chamber of Commerce and Industry (IWCCI) urged the government to allocate dedicated funds for women entrepreneurs in the upcoming budget, emphasising the need to create a more supportive environment for women-led businesses. The chamber also called for the reduction of the existing Rs5 Crore revenue threshold for corporate women, arguing that the current limit poses a barrier to entry for many capable women entrepreneurs seeking to formalise and expand their businesses. Paper and Stationery Association called for the withdrawal of taxes on stationery items. They stated that the federal government had promised in the previous year to eliminate the existing taxes on stationery items in the following budget cycle. The association urged the government to honour its commitment, stressing that these taxes should be withdrawn immediately to ensure affordability and accessibility of essential educational materials for students across the country. President Faisalabad Chamber of Commerce said that Information Technology (IT) is shifting to Turkey and UAE due to lack of gateway for payment abroad, which would directly hit the exports remittances. The committee was informed that 30 IT companies from Faisalabad had shifted to Turkey and UAE so far. This would directly impact the IT exports remittances and would not come to the country, he added. The country is celebrating $2.4 billion IT exports, said the president, adding that currently, the potential is $10 billion and can be increased to $20 billion, if all these issues were resolved. In attendance were senators, Sherry Rehman, Anusha Rahman Ahmad Khan, Fesal Vawda and representatives of Rawalpindi, Karachi, Sialkot, Faisalabad and Lahore Chamber of Commerce and Industry. Copyright Business Recorder, 2025

Date: 2025-05-01

Details: Karachi, May 1, 2025 â€“ The Karachi Chamber of Commerce and Industry (KCCI) has strongly criticized the existing high tariffs on the import of auto parts, asserting that these excessive duties are directly contributing to the widespread smuggling of motorcycle and automobile components across Pakistan. In its official proposals submitted for the upcoming Budget 2025-26, the KCCI highlighted the urgent need to rationalize import duties on commercial imports of motorcycle and auto spare parts. According to the chamber, the current customs structure imposes a staggering 35% import duty, coupled with an 11% Additional Customs Duty (ACD) as outlined under SRO 484(1)/2016. When including other charges, the total tax impact reaches up to 87% on the import of motorcycle and auto parts. The KCCI emphasized that these essential auto parts, which are critical for daily transport used by low-income individuals, are being unfairly taxed as if they were luxury goods. â€œThis excessive taxation has not only made legal imports unviable but has also fueled a parallel black market,â€ the KCCI stated. It estimated that nearly $380 million worth of auto partsâ€”representing 40% of the motorcycle and 60% of the automobile marketâ€”are smuggled annually, leading to significant revenue losses for the national exchequer. To counter this, the KCCI has proposed reducing the customs duty on motorcycle and auto parts to 25%, while eliminating the Additional Customs Duty entirely. Furthermore, the chamber recommended maintaining the 1% customs duty on raw materials used for local manufacturing under SRO 655, which it believes offers sufficient protection for domestic auto parts manufacturers. The KCCI argued that these changes would make legal imports more competitive, discourage smuggling, and redirect lost revenue back into the formal economy. â€œReducing duties on auto parts will not only support government revenue targets but will also make essential vehicle components more affordable for consumers across Pakistan,â€ the chamber concluded. The proposal is now under review as part of pre-budget consultations, with stakeholders hoping for a more balanced approach in the upcoming fiscal policy.

Date: 2025-05-01

Details: Karachi, May 1, 2025 â€” The Karachi Tax Bar Association (KTBA) has formally highlighted a series of functional and procedural anomalies in the IRIS portal operated by the Federal Board of Revenue (FBR), urging the tax authority to implement immediate corrective measures to improve efficiency and compliance. In a comprehensive letter addressed to the FBR, the Karachi Tax Bar emphasized that these issues are obstructing taxpayers and tax professionals in fulfilling their obligations and are contradictory to FBRâ€™s ongoing digitization efforts. One major issue raised pertains to the absence of an application option under Clause (57)(3)(iii) of the Second Schedule to the Income Tax Ordinance, 2001. According to KTBA, under SRO 212(I)/2005, Commissioners are empowered to approve benevolent and group insurance funds, but the IRIS system lacks a designated section for such applications. The Karachi Tax Bar proposed adding a dedicated tab under the registration section for these funds, similar to those available for Provident, Superannuation, and Gratuity Funds. Currently, manual submissions are being rejected by Commissioners, leaving applicants without a viable route. The second concern involves the inability of taxpayers to request amendments in non-editable fields within Form 181. Rule 82(2) of the Income Tax Rules allows the Commissioner to approve such changes, but IRIS lacks functionality to accommodate this. The Karachi Tax Bar has recommended the addition of an application mechanism within the registration tab to align digital operations with existing legal provisions. The Bar also raised operational inefficiencies for withholding agents. When a Payment Slip ID (PSID) is generated, it does not reflect the detailed particularsâ€”such as names, CNICs, and tax valuesâ€”of each taxpayer. This lack of transparency causes verification problems. The Karachi Tax Bar suggested that IRIS be updated to provide a full list of taxpayers attached to each PSID, reducing administrative burden on the Commissionerâ€™s office for CPR (Computerized Payment Receipt) rectifications. Another issue involves limitations in the e-payment service, which restricts the ability to pay shortfalls in tax when the original payment is altered due to revised tax rates. The Karachi Tax Bar proposed an option for â€œshort taxâ€ payments, allowing withholding agents to manually enter the applicable tax section, revenue code, and amount in the IRIS interface. Lastly, the Karachi Tax Bar flagged a critical bug in IRIS and e-FBR systems where CPRs for taxes paid under Sections 236C, 236K, and 7E fail to download, despite successful bank payments and CPR numbers showing in online verifications. The Bar urged the FBR to resolve this technical flaw permanently. The Karachi Tax Bar reiterated its commitment to supporting FBRâ€™s digitization efforts but stressed that a responsive and functional IRIS platform is essential to ensure transparency, reduce compliance costs, and enhance voluntary tax participation

Date: 2025-05-01

Details: Karachi, May 1, 2025 â€“ The Federal Board of Revenue (FBR) has been urged to eliminate the controversial Section 7E of the Income Tax Ordinance, 2001, in the forthcoming federal budget for fiscal year 2025â€“26. The call for its removal comes from the Karachi Tax Bar Association (KTBA), which submitted its tax proposals to the FBR earlier this week. In its recommendations, the KTBA expressed strong reservations about the continuation of Section 7E, stating that the provision imposes tax on â€œdeemed incomeâ€ from immovable properties, even when no actual income is generated. According to the KTBA, Section 7E is fundamentally unjust, as it taxes unrealized gainsâ€”something not only burdensome for taxpayers but also damaging to investor sentiment. â€œThe concept of deemed income, as laid out in Section 7E, is highly controversial and should be reconsidered,â€ the KTBA stated in its proposal. â€œIt creates artificial income scenarios that result in increased tax liability for individuals and entities who may not have earned any real income from their properties.â€ Critics of Section 7E argue that it discourages property ownership, stifles real estate development, and may even contribute to capital flight from the country. Many believe that such provisions weaken investor confidence and dissuade both domestic and foreign investment in Pakistanâ€™s real estate and construction sectors. The KTBA emphasized that removing Section 7E would contribute to a more favorable investment climate, particularly in sectors already under pressure from inflation and policy uncertainty. The association stressed that a tax system should be based on actual income rather than theoretical valuations, which often lead to disputes and legal challenges. The FBR is currently reviewing budget proposals from various stakeholders, and whether it decides to repeal Section 7E remains to be seen. However, calls for its removal have grown louder, with many tax professionals and business groups echoing the KTBAâ€™s stance in hopes of fostering a more rational and equitable tax regime in Pakistan.

Date: 2025-04-30

Details: Karachi, April 30, 2025 â€“ The State Bank of Pakistan (SBP) has revealed that increased taxation on property transactions has significantly impacted housing finance, dampening the demand for home-building loans despite a reduction in borrowing costs. In its latest State of Pakistanâ€™s Economy report for the first half of FY25, the SBP pointed out that the property market has come under pressure due to elevated construction costs and the imposition of higher taxes on property transactions. This double burden, the SBP noted, has made potential homeowners more hesitant to borrow, leading to subdued growth in housing finance. The report highlighted that while borrowing rates have eased, the anticipated boost in demand for housing loans has not materialized. The SBP specifically cited increased taxes on property sales and transfers as a key reason for the slowdown in property-related borrowing. Additionally, rising prices of construction materials have further discouraged new home construction and property development. Despite the drag in the property segment, overall consumer financing showed a recovery during the period. According to the SBP, consumer loans grew by Rs 66 billion in H1-FY25, a sharp turnaround from the net retirement of Rs 42 billion recorded in the same period last year. This recovery was primarily fueled by a surge in personal loans, as banks aimed to meet their Advances-to-Deposits Ratio (ADR) requirements. Auto loans also saw a modest uptick, marking a reversal after two years of decline. Furthermore, credit card usage maintained its upward trajectory, continuing the steady growth observed in recent years. The SBP emphasized that while segments like auto financing and personal loans have shown signs of resilience, the property sector remains under strain. Unless tax policies on property transactions are reviewed or revised, the SBP warns that housing finance could remain sluggish, potentially hindering broader growth in the real estate and construction sectors. With the property market playing a critical role in economic expansion and job creation, the SBPâ€™s findings highlight the need for a balanced approach to taxation that supports both government revenue goals and sustainable property sector development.

Date: 2025-04-29

Details: ISLAMABAD: A meeting of the special committee constituted by Prime Minister Shehbaz Sharif on rationalisation of tax rates in consultation with business community, Monday, unanimously, decided to present a comprehensive report on the subject to the Special Assistant to the Prime Minister (SAPM) on Industries and Production, Haroon Akhtar Khan. A meeting of the committee constituted by the prime minister to rationalise tax rates was held here under the chairmanship of Haroon Akhtar Khan to discuss matters related to rationalising the various taxes in the country. The meeting besides Additional Secretary of Finance Ministry, senior officials of the Federal Board of Revenue (FBR), State Bank of Pakistan, Commerce Ministry and Board of Investment was also attended by the Federation of Pakistan Chamber of Commerce and Industry as well as representatives of leading chambers of the country. The committee discussed the challenges posed by high tax rates and the lack of incentives for domestic industries. Speaking on the occasion, the SAPM stated that the prime minister had constituted the committee with the mandate to identify the problems and suggest viable solutions. The SAPM emphasised that to compete economically at the regional level, Pakistan must address these critical issues. He pointed out that the industrial sector is severely affected by high taxation, leading to the closure of businesses. â€œWe must work towards reviving sick industries and expanding operational industries,â€ said Haroon Akhtar Khan. He informed that the committee would present its recommendations and proposed solutions to the prime minister for inclusion in the upcoming budget. Haroon Akhtar Khan assigned the committee members the task of submitting concrete solutions and actionable recommendations at the next meeting. During the meeting, the business community presented their concerns and recommendations regarding the current business regime, saying that to increase the exports from the country the government besides lowering input costs including electricity and gas has to reduce the ratio of various taxes. The additional secretary Ministry of Finance and the FBR official informed the participants that at this juncture when the country was in an International Monetary Fundâ€™s programme, canâ€™t reduce taxes, therefore, â€œat present we must ponder on other optionsâ€. Chairing another special committee to â€œprevent undue interference by state authoritiesâ€ constituted by the PM, the SAPM on Industries and Production directed the relevant departments instead of creating hurdles, they must focused on addressing the issues faced by industrialists and investors which is critical for the development of the country. During the discussion, the business community raised concerns regarding unnecessary interference by state institutions, the lack of Business Facilitation Centres and one-window operations, as well as inadequate support and taxation-related challenges from the government. Khan emphasised that, in line with the prime ministerâ€™s vision, facilitating industrialists would accelerate economic activities. He cautioned that undue interference by state authorities could negatively impact investment and economic growth. Haroon Akhtar Khan highlighted that the prime minister envisions state institutions playing a key role in providing facilitation, ensuring the protection and support of industrialists, and boosting business confidence. He stated that the establishment of Business Facilitation Centres, promoting ease of doing business, and formulating supportive policies are critical pathways for the revival and growth of Pakistanâ€™s industrial sector. Copyright Business Recorder, 2025

Date: 2025-04-29

Details: ISLAMABAD: The ex-cadre officers and staff from BS-1 to 16 of Federal Board of Revenue (FBR) have requested Chairman FBR Rashid Mahmood to pay already sanctioned/ approved rewards to boost the morale of their employees. In an appeal to FBR Chairman here on Monday, the aforesaid officers and staff have expressed serious concern over delay in issuance of rewards which was already approved by the Chairman FBR. The issuance of already approved rewards has nothing to do with the ongoing agitation by low cadresâ€™ employees of field formations up to BS-1-16. The timely issuance of rewards to the FBRâ€™s ex-cadre officers and staff is critical at the time of upcoming budget, as well as, last quarter for achievement of the assigned revenue collection targets for 2024-25. The FBRâ€™s employees, as well as, field formations would have to stay late nights, perform overtime duties including Saturdayâ€™s and playing vital role particularly in areas of policy, audit, enforcement and recovery in litigation. The FBR Admin Wing, headed by a seasoned officer, can play a very positive role to improve working relationship between FBR employees and top management. The FBR has already issued a handsome amount of rewards to the cadre officers of IRS and PCS following Prime Minister Shehbaz Sharifâ€™s approval under new fully automated digital performance management system. At this critical time of outgoing fiscal year, the FBR must recognize the services of experienced ex-cadre officers and staff of the FBR instead of ignoring and depriving them from the already sanctioned/ approved right of reward. The incentives through monetary compensation/ promotions/ public recognitions to the employees of the Board may result in improving their efficiency in official assignments and collection of revenue. However, this would also give a very good message in the Board headquarters, as well as, field formations that the FBR is considering these former-cadre employees as part of the tax machinery in line with the judgments of the Supreme Court of Pakistan. It is worth mentioning that the auditors, inspectors, superintendents and other employees falling under BS-1-16 are demanding share in the common pool fund, performance-based rewards, and de-freezing of the special allowance. Around 85 percent of the FBRâ€™s worker strength is covered under Grade 1 to 16 across the country. Out of total FBR sanctioned strength of 28,000 employees, around 16,550 are working in the FBR and its field formations. Out of this 950 belongs to BS-17 and above and remaining officers falls under category of BS-1 to 16. Copyright Business Recorder, 2025

Date: 2025-04-29

Details: Islamabad, April 29, 2025 â€“ In a major policy development, the Federal Board of Revenue (FBR) has officially announced a new method for determining the value of cement for the purpose of sales tax calculation, aligning it with the Sensitive Price Indicator (SPI) data issued by the Pakistan Bureau of Statistics (PBS). The decision, notified through SRO 746(I)/2025, mandates that the minimum retail price of cement will now be calculated based on the average national retail prices published by PBS under its weekly SPI report. These values will be assessed twice each monthâ€”using SPI data released just before the 1st and 16thâ€”and applied to the corresponding fortnightly periods starting on those dates. According to the FBR, this updated valuation mechanism will be implemented from May 1, 2025, and will serve as the standard for calculating sales tax at the prescribed rate mentioned under clause (a) of sub-section (2) of Section 3 of the Sales Tax Act, 1990. This policy shift comes in the wake of a significant price hike in the cement sector. As of April 24, 2025, the average price of a 50-kilogram cement bag surged to Rs1,410, marking a sharp 16% year-on-year increase compared to Rs1,217 reported during the same period in 2024. With Pakistan maintaining a uniform general sales tax rate of 18%, the revised valuation formula is expected to increase the tax burden on consumers, directly linked to the rise in cement prices. The FBR has previously implemented similar mechanisms for other essential commodities. For example, through SRO 577(I)/2025 issued on April 8, 2025, the board revised the sales tax valuation method for domestically produced white crystalline sugar by tying it to SPI data as well. This move is part of FBRâ€™s broader strategy to streamline tax collection and minimize underreporting in sectors known for price volatility. By aligning tax valuation with independently monitored market indicators like the SPI, the FBR aims to bring greater transparency and uniformity to sales tax assessmentsâ€”particularly in price-sensitive sectors like cement.

Date: 2025-04-29

Details: Islamabad, April 29, 2025 â€“ In a significant move under its transformation initiative, the Federal Board of Revenue (FBR) has rolled out a comprehensive plan to enhance the capacity of its audit workforce. As part of this strategy, the FBR has officially released job descriptions for third-party auditors and industry experts who will serve as mentors and trainers for FBR officers. This initiative is aimed at equipping FBR personnel with the latest tools and techniques required for efficient tax audits, ensuring enhanced compliance and minimizing revenue leakages. Enhancing Capacity Through Practical Knowledge To bridge the skill gap within the tax machinery, the FBR has engaged experienced auditors and specialists from various industries to assist officers in conducting desk, field, and forensic audits. These professionals will collaborate closely with unit officers to carry out comprehensive investigations of taxpayer records. From analyzing tax returns to identifying discrepancies in books of accounts, the role of these third-party auditors will be both hands-on and advisory. The responsibilities of these auditors include helping FBR officers identify non-compliance through trend analysis, financial ratio benchmarking, and reviewing tax declarations against sector benchmarks. They will also assist in preparing detailed audit reports covering Income Tax, Sales Tax, and Federal Excise matters, which will feed into broader risk management and enforcement strategies. Additionally, these auditors will work with FBR personnel on pre-refund and post-refund audit cases, and even accompany them on business site visits to better understand sales volumes, market shares, and input-output pricing trends. Industry Experts to Deliver Sectoral Insights To further improve officersâ€™ understanding of complex industry-specific tax structures, the FBR has also enlisted industry experts. These individuals will provide vital insights into sector-specific operations, including supply chain mechanisms, production cycles, and common tax avoidance schemes. Their collaboration with FBR officers will enhance the quality and focus of audit processes in high-risk sectors. Industry experts are expected to train officers on identifying cost misrepresentation, evasion patterns, and other forms of tax manipulation. They will also help establish industry benchmarks for financial metrics, input-output ratios, and seasonal variancesâ€”key indicators that often highlight under-reporting or misstatements in tax filings. Structured Mentorship and Continuous Learning To tie these efforts together, the FBR is introducing audit mentors who will oversee and guide officers, auditors, and inspectors through practical learning sessions and case-based workshops. These mentors will provide deep technical knowledge on various audit techniques such as forensic analysis, risk-based auditing, fraud detection, and compliance reviews. Their role includes mentoring FBR officers on drafting legally compliant audit documentation, preparing show cause notices, and improving their overall legal interpretation skills. Mentors will also help maintain standardization across audit practices, ensuring consistency and regulatory compliance in line with evolving international standards. Furthermore, monthly performance reports from mentors and industry experts will be submitted to the supervisory committees to track progress and assess outcomes. Long-Term Impact and Institutional Strengthening This transformative training initiative is expected to significantly improve the FBRâ€™s ability to detect tax fraud, strengthen compliance monitoring, and expand its enforcement capabilities. By leveraging the expertise of third-party auditors and industry veterans, FBR hopes to equip its officers with a more nuanced understanding of the challenges in modern taxation. In the long run, the initiative will foster a culture of continuous learning and professional development within the FBR. The training and mentorship framework not only addresses immediate skill gaps but also lays the foundation for a more robust, data-driven, and transparent audit system that aligns with global best practices.

Date: 2025-04-27

Details: Karachi, April 27, 2025 â€“ The Karachi Chamber of Commerce and Industry (KCCI) has urged the government to introduce tax relief measures for yarn traders in the upcoming federal budget 2025-26, aiming to boost compliance and support growth within the sector. In its official tax proposals, the KCCI emphasized the challenges currently faced by the yarn trading community, particularly due to the 0.5% withholding tax imposed by the Federal Board of Revenue (FBR). According to KCCI, this tax rate is discouraging yarn traders from registering with the tax authorities, creating compliance hurdles and causing significant revenue losses for the government. The KCCI outlined key concerns linked to the yarn trading sector: A) Business Registration Hesitancy: Yarn traders often refrain from registering with the FBR due to business uncertainties and the high withholding tax rate. The KCCI pointed out that reducing this tax burden would encourage greater registration, thereby expanding the tax base. B) Turnover-Based Profit Structure: The KCCI reiterated that the profits earned by yarn traders are largely turnover-based, a fact acknowledged during recent consultations with the concerned authorities. Tax policies must reflect this business model to ensure fairness and stimulate voluntary compliance. To address these issues, the KCCI proposed a reduction of 0.25% in the withholding tax rate for yarn traders. This recommendation, according to the chamber, is in line with previous discussions held with fiscal policymakers. The KCCI further argued that the suggested tax cut would have multiple positive impacts: A) Enhanced Compliance: Lowering the withholding tax would likely result in more yarn traders registering with the FBR, ultimately boosting national revenue collection. B) Equitable Taxation: Recognizing the unique turnover-based profit model of yarn businesses would ensure that tax measures are fair and accurately aligned with the sectorâ€™s operational realities. C) Sectoral Growth: By reducing the tax burden, the yarn industry could enjoy more stable and sustainable growth, thereby strengthening Pakistanâ€™s overall industrial base. D) Revenue Optimization: Promoting compliance through fair taxation could help recover revenue losses, providing a significant boost to the national economy. The KCCI concluded that adopting these proposals would not only benefit yarn traders but also contribute positively to Pakistanâ€™s broader economic development.

Date: 2025-04-25

Details: ISLAMABAD: Large Taxpayersâ€™ Office (LTO) Islamabad has reconstituted Regional Integrity Committee (RIC) comprising tax officials, representatives of the Islamabad Chamber of Commerce and Industry (ICCI) and Islamabad-Rawalpindi Tax Bar Association to report corruption-related cases. According to an office order of the LTO Islamabad on Thursday, Reema Masud, Commissioner Inland Revenue, LTO Islamabad would be the chairperson of the RIC. Nasir M Quershi, president ICCI would be the vice chairman and members of the RIC would include Babar Bilal, advocate Supreme Court of Pakistan; Qurratul in Ali Khan, additional commissioner IR; Shah Bahar, additional commissioner, Headquarters, and Nadaruz Zaman Barlas, steno typist would be member/secretary of the committee. The RIC would be the eyes and ears of the LTO Islamabad/FBR and would deal with all the integrity-related issues and complaints of the taxpayers and general public against officers/officials of the LTO Islamabad. The RIC would furnish its report to the chief commissioner LTO Islamabad for the purpose of maintaining liaison with Chief, IMC, IPMU through member IR Operations. The RIC would also identify causes of the integrity-related issues that may crop in the LTO, Islamabad and furnish their recommendations through proper channel to the FBR for redressal of such causes. The RIC shall follow all the relevant TORs framed by the Board for the purpose of transparent, fair and judicious processing of the complaints. The time limit for disposal of complaints by the RIC shall be 30 days which may further be extended by a period of 30 days by In-Charge, Integrity Management Cell, FBR on making a proper reference through proper channel. The RIC, LTO, Islamabad shall submit a monthly performance report on the format (Annex-I) including the total number of complaints received, pending action and complaints closed during a month to the IMC, FBR under intimation to the Chief Commissioner-IR, LTO, Islamabad before 515 of every month. This issues with the approval of the Chief Commissioner-IR, Large Taxpayers' Office, Islamabad, the notification added. Copyright Business Recorder, 2025

Date: 2025-04-24

Details: Pakistan has once again been identified by the World Bank as having one of the weakest tax buoyancies among Emerging Market and Developing Economies (EMDEs), placing it in the bottom quartile. This low responsiveness of tax revenues to GDP growth highlights the countryâ€™s over-reliance on taxation of slow-growing sectors and under-taxation of dynamic segments of the economy. The latest South Asia Development Update: Taxing Times by the World Bank calls for urgent reforms to broaden the tax base and enhance the effectiveness of Pakistanâ€™s revenue mobilization efforts. Unlike other South Asian economies such as Bangladesh and India, where tax buoyancy aligns more closely with EMDE averages, Pakistanâ€™s tax system continues to lag. In fact, the World Bank noted that the countryâ€™s income tax structure, while appearing progressive on paper, is undermined by widespread exemptions and narrow coverage. Pakistan stands out for having a wide range of income tax rates and thresholds, but the effectiveness of this progressivity is diluted by poor compliance and administrative inefficiencies. The World Bank report recommended that Pakistan reform its income tax regime to raise effective rates on the highest-income groups and eliminate unjustified exemptions. It also called for taxing the agricultural sector more effectively, noting that agriculture accounted for nearly 20% of GDP growth from 2010 to 2019 in Pakistan, yet it remains significantly under-taxed. In contrast, this figure is less than 10% in the average EMDE. Raising agricultural taxation is seen as a key priority for increasing tax revenues. Among the EMDEs, Pakistan also faces some of the highest shortfalls in direct tax revenue, with gaps nearly evenly split between corporate and personal income taxes. The World Bank attributes a third of Pakistanâ€™s tax revenue shortfall to structural issues like informality and lack of financial development. Even after accounting for these challenges, Pakistanâ€™s tax collection still trails the average EMDE. The report further highlighted that Pakistanâ€™s revenue-to-GDP ratio remains among the lowest in South Asia, along with Sri Lanka and Bangladesh. Meanwhile, tax collections in the form of consumption taxes, such as VAT and excise duties, are significantly above the EMDE average, indicating over-reliance on regressive tax instruments. The bank applauded recent reforms in Pakistan, such as the introduction of electronic VAT filing and computerized risk assessments, which have led to improved fraud detection and reduced refund claims. However, challenges remain in tax compliance, dispute resolution, and the timely filing of returns. Despite weak private investment and contracting industrial output, Pakistanâ€™s economy showed signs of gradual recovery in fiscal year 2024â€“25, with GDP growth projected at 2.7%. The rebound has been supported by a strong agricultural harvest, stable exchange rates, and robust remittance inflows. Inflation, which peaked at nearly 40% in mid-2023, has now declined sharply, allowing the central bank to lower policy rates. The World Bank stressed that for Pakistan to move out of the bottom tier of EMDEs in tax performance, it must pursue deep and sustained reforms. Improving tax buoyancy, diversifying the tax base, enhancing compliance, and moving away from distortionary subsidies are crucial to placing the country on a more sustainable and inclusive growth path.

Date: 2025-04-23

Details: ISLAMABAD: President Asif Ali Zardari has endorsed over 92 percent of the orders of the Federal Tax Ombudsman (FTO) against the Federal Board of Revenue (FBR) during 2024. The Presidentâ€™s endorsement to the FTOâ€™s order reflects Presidentâ€™s approach towards taxpayersâ€™ facilitation and encouraging voluntary compliance and documentation. In most of the cases, President Zardari gave orders in favour of the taxpayers and against the FBR. Senior FTO officials told media here on Tuesday at the FTO Headquarters that in 2024, FTO made 12,742 decisions in favour of the taxpayers, but only 1,030 were challenged before the President. The President upheld over 92 percent of the FTO in favour of the taxpayers. However, in the year 2024, a record number of 13506 complaints were registered with the FTO against the tax functionaries. A total of 12914 complaints were decided from the complaints lodged with the FTO in the year 2024, thereby surpassing all previous records which reflects the confidence of taxpayers in FTO for the resolution of grievances against FBR officials. In 2024, FTO made recommendations on 13,500 complaints, but only 336 of those were challenged in representations with the President. The President reviewed 379 representations, including some carried over from 2023, and decided 326 cases in favour of the FTO. An amount of Rs22.79 billion was credited back to taxpayers as refund claim on the directions of FTO in the year 2024. Average time taken for the disposal of complaints was reduced to an impressive 34.11 days in the year 2024. Over 1705 complaints were resolved in a matter of days, in the year 2024 through informal dispute resolution under sect 33 of FTO Ordinance. The notable surge in the registration of complaints in 2024 is attributed to record 270 outreach sessions across Pakistanâ€™s business community and other institutions conducted by Federal Tax Ombudsman, FTO officials added. Copyright Business Recorder, 2025

Date: 2025-04-22

Details: The relationship between the Federal Board of Revenue (FBR) and the taxpayer should be grounded in fairness, accountability, and transparency. While the FBR has the legal authority to impound records during audits or investigations, it is equally important to highlight and protect the rights of taxpayers during this process. Often, individuals and businesses feel powerless when their accounts, documents, or digital data are seized. However, the law provides clear safeguards to ensure that taxpayersâ€™ rights are respected. One of the key rights of taxpayers is access to their own data. Even after the FBR has impounded records, taxpayers are legally allowed to examine those records and make copies or extracts during regular office hours. This is crucial, as it allows individuals and companies to continue their operations and defend themselves properly in case of disputes. The inability to access essential records could paralyze a business, which is why this right is fundamental. Moreover, if any documents or electronic records are lost or destroyed while in the possession of the FBR or its officials, the responsibility does not fall on the taxpayer. Instead, the commissioner is legally bound to compensate the affected taxpayer. This acknowledges the stateâ€™s duty of care and accountability in handling private property. Such provisions reinforce that taxpayersâ€™ rights are not just theoreticalâ€”they carry enforceable legal backing. Unfortunately, many people are unaware of these rights or too intimidated to assert them. Itâ€™s imperative for tax professionals and legal advisors to educate their clients about these safeguards. By doing so, we ensure a more balanced and respectful tax system. Empowering taxpayers with knowledge about their rights during audits or inspections is a step toward strengthening trust in tax institutions. The FBR must also train its staff to honor these rights consistently. After all, the goal should be compliance through cooperationâ€”not coercion. In conclusion, protecting taxpayersâ€™ rights is not just a matter of law, but a matter of principle. A fair tax system must hold both the authorities and the public to equal standards of responsibility. When records are impounded, the dignity and legal rights of taxpayers must always come first.

Date: 2025-04-22

Details: Karachi, April 22, 2025 â€“ The Pakistan Chemicals & Dyes Merchants Association (PCDMA) has submitted a detailed set of tax proposals for the upcoming 2025â€“26 federal budget, urging the Federal Board of Revenue (FBR) to revive the Final Tax Regime (FTR) specifically for commercial importers. The association emphasized that restoring this system would provide much-needed relief, simplify taxation, and strengthen trust between the government and the business community. PCDMA Chairman Salim Valimuhammad, in collaboration with the associationâ€™s budget committee led by Umair Tariq, stressed the growing compliance burden on taxpayers. He argued that frequent audits, excessive documentation, and complex tax procedures discourage formal economic participation. The association stated that many importers are willing to comply with tax laws but are often hindered by limited technical know-how and the uncooperative attitude of tax officials. A core demand in the proposal is the reintroduction of FTR for commercial importers, especially since they are still subjected to Additional Sales Tax (Value Addition Tax) without enjoying the audit exemption that was previously linked to it. PCDMA maintains that either the audit immunity should be reinstated or the extra tax should be eliminated to maintain fairness for importers. Another major concern raised by PCDMA is the unequal treatment between commercial and industrial importers under Section 148 of the Income Tax Ordinance. The association highlighted that industrial entities often misuse their status to import goods meant for local sale while benefiting from lower tax rates, creating an unfair environment for commercial importers. In light of this, PCDMA either demands tax parity or a return to the FTR for commercial entities. Addressing structural challenges, the association proposed lowering withholding tax on raw material supplies and abolishing outdated fees like the Rs. 500 WeBOC token, which importers now redundantly pay alongside the PSW fee. To improve liquidity, PCDMA suggested restoring 95% adjustability of output tax under Section 8B. PCDMA also called for scrapping the Export Facilitation Scheme (EFS), citing its misuse and detrimental impact on legitimate importers. Instead, it urged enhancements in the regular refund system to aid genuine exporters. The association concluded by recommending capped customs duties of 5% on raw materials and streamlined tariff structures to combat under-invoicing and revenue losses. Through these proposals, PCDMA aims to create a more balanced and supportive tax regime that fosters compliance, ensures equity, and drives economic growth.

Date: 2025-04-20

Details: Karachi, April 20, 2025 â€“ In a major move to stimulate the countryâ€™s export sector, the Federal Board of Revenue (FBR) has granted a massive exemption of Rs 127 billion in customs duty under various export facilitation schemes. According to the FBRâ€™s latest Tax Expenditure Report 2024, the exemptions were primarily extended to support a range of exports-oriented activities. These exemptions were issued under multiple statutory regulatory orders (SROs) and targeted different sectors involved in the promotion and facilitation of exports. Breakdown of the exemption includes Rs 34.46 billion granted under SRO 327(I)/2008 for Export Oriented Units, and Rs 23.48 billion under SRO 450(I)/2001 for operations in Export Processing Zones (EPZ). Additionally, Rs 23.21 billion worth of exemption was provided under the Export Facilitation Scheme, aiming to streamline and accelerate the exports process for approved businesses. Another significant share of the exemption, amounting to Rs 20.44 billion, was offered under the Manufacturing Bond scheme, while the Duty and Tax Remission for Exports (DTRE) regime accounted for Rs 7.13 billion. Temporary import provisions under various SROs contributed over Rs 18 billion in exemptions, facilitating the import of machinery, equipment, and packaging material strictly for exports. The FBR stated that these measures are designed to reduce the cost of doing business for exporters, enhance global competitiveness, and encourage value-added exports. The revenue authority also highlighted the importance of facilitating sectors that are aligned with the countryâ€™s broader economic goals, including job creation and foreign exchange earnings. This substantial exemption is part of the governmentâ€™s broader policy to boost industrial growth by providing relief on raw materials and intermediate goods used in manufacturing for exports. While the FBR is under pressure to meet revenue targets, it maintains that such strategic exemptions are necessary to achieve long-term economic stability and trade expansion. The FBR will continue monitoring the impact of these incentives and may revise policies to ensure maximum benefit for the national economy and the export sector.

Date: 2025-04-20

Details: Karachi, April 20, 2025 â€” The Karachi Chamber of Commerce and Industry (KCCI) has strongly recommended the government to revive the Final Tax Regime (FTR) for the export sector in its budget proposals for the fiscal year 2025â€“26. The Karachi Chamber emphasized that the previous shift from FTR to the Normal Tax Regime (NTR), as implemented through the Finance Act 2024, has led to considerable challenges for exporters. According to the Karachi Chamber, moving away from the simplified FTR, which taxed exporters at a flat 1% of turnover, towards the more complex NTR structure â€” which includes a 29% tax on taxable profits â€” has significantly increased the compliance burden. Exporters now face heightened documentation requirements and procedural hurdles that are affecting their efficiency and profitability. â€œThe transition has disrupted the ease of doing business and introduced administrative bottlenecks. This has negatively impacted the transparency and global competitiveness of Pakistanâ€™s export sector,â€ the Karachi Chamber stated. The Karachi Chamber pointed out that the Federal Board of Revenue (FBR) lacks the audit capacity to manage the growing demands of NTR compliance. This, they argue, places an unnecessary strain on both the business community and the tax machinery. To address this, the Chamber strongly urged the government to reconsider its policy and reintroduce the FTR specifically for export-oriented industries. In its formal proposal, the Karachi Chamber laid out two main objectives for reinstating FTR: 1. To simplify the taxation process and reduce exportersâ€™ reliance on cumbersome FBR audits, especially given the boardâ€™s limited resources. 2. To enhance the overall ease of doing business, encouraging more firms to operate within the formal economy while supporting the growth of Pakistanâ€™s vital export sector. With Karachi being the economic hub of Pakistan, the Karachi Chamberâ€™s recommendations hold substantial weight. Many industry leaders are hopeful that the government will consider this practical step toward fostering a more business-friendly tax environment through the revival of FTR.

Date: 2025-04-20

Details: Karachi, April 20, 2025 â€” The Karachi Chamber of Commerce and Industry (KCCI) has strongly recommended the government to revive the Final Tax Regime (FTR) for the export sector in its budget proposals for the fiscal year 2025â€“26. The Karachi Chamber emphasized that the previous shift from FTR to the Normal Tax Regime (NTR), as implemented through the Finance Act 2024, has led to considerable challenges for exporters. According to the Karachi Chamber, moving away from the simplified FTR, which taxed exporters at a flat 1% of turnover, towards the more complex NTR structure â€” which includes a 29% tax on taxable profits â€” has significantly increased the compliance burden. Exporters now face heightened documentation requirements and procedural hurdles that are affecting their efficiency and profitability. â€œThe transition has disrupted the ease of doing business and introduced administrative bottlenecks. This has negatively impacted the transparency and global competitiveness of Pakistanâ€™s export sector,â€ the Karachi Chamber stated. The Karachi Chamber pointed out that the Federal Board of Revenue (FBR) lacks the audit capacity to manage the growing demands of NTR compliance. This, they argue, places an unnecessary strain on both the business community and the tax machinery. To address this, the Chamber strongly urged the government to reconsider its policy and reintroduce the FTR specifically for export-oriented industries. In its formal proposal, the Karachi Chamber laid out two main objectives for reinstating FTR: 1. To simplify the taxation process and reduce exportersâ€™ reliance on cumbersome FBR audits, especially given the boardâ€™s limited resources. 2. To enhance the overall ease of doing business, encouraging more firms to operate within the formal economy while supporting the growth of Pakistanâ€™s vital export sector. With Karachi being the economic hub of Pakistan, the Karachi Chamberâ€™s recommendations hold substantial weight. Many industry leaders are hopeful that the government will consider this practical step toward fostering a more business-friendly tax environment through the revival of FTR.

Date: 2025-04-20

Details: Karachi, April 20, 2025 â€“ A new report from the Federal Tax Ombudsman (FTO) has highlighted that employees working on a daily wages basis are subject to income tax deductions under Section 149 of the Income Tax Ordinance, 2001. According to the FTOâ€™s detailed analysis, the definition of salary under the Income Tax law includes any amount received by an employee from their employment. This encompasses not only regular pay but also other forms of remuneration such as leave pay, overtime, bonuses, commissions, gratuities, and work condition supplements. Therefore, daily wages employees fall under this broad definition, meaning they too are liable for tax deductions just like their permanent counterparts. The FTO report emphasized that all employees, regardless of their employment statusâ€”whether regular, temporary, contractual, or employed on daily wagesâ€”are entitled to be taxed as salaried individuals under Section 149. This provision ensures that employees working on a daily wages basis are treated equitably within the broader tax system. The recognition of daily wages employees under Section 149 is crucial for expanding the tax base and ensuring that all sectors of the workforce contribute fairly to national revenue. The FTOâ€™s findings urge both employers and employees to ensure that income tax is appropriately deducted at source for daily wages workers, just as it is for other salaried employees. Additionally, the report pointed out that employers should be vigilant in complying with tax regulations, as failure to properly deduct taxes from employees on daily wages could lead to legal repercussions. In conclusion, the FTOâ€™s statement serves as a reminder that all employees, regardless of their employment type, are subject to the same tax regulations. The clarification ensures greater fairness and consistency in tax collection, ultimately contributing to the nationâ€™s fiscal health. The FTO referred to the Section 12(2) of Income Tax Ordinance, 2001.

Date: 2025-04-20

Details: Karachi, April 20, 2025 â€“ A new report from the Federal Tax Ombudsman (FTO) has highlighted that employees working on a daily wages basis are subject to income tax deductions under Section 149 of the Income Tax Ordinance, 2001. According to the FTOâ€™s detailed analysis, the definition of salary under the Income Tax law includes any amount received by an employee from their employment. This encompasses not only regular pay but also other forms of remuneration such as leave pay, overtime, bonuses, commissions, gratuities, and work condition supplements. Therefore, daily wages employees fall under this broad definition, meaning they too are liable for tax deductions just like their permanent counterparts. The FTO report emphasized that all employees, regardless of their employment statusâ€”whether regular, temporary, contractual, or employed on daily wagesâ€”are entitled to be taxed as salaried individuals under Section 149. This provision ensures that employees working on a daily wages basis are treated equitably within the broader tax system. The recognition of daily wages employees under Section 149 is crucial for expanding the tax base and ensuring that all sectors of the workforce contribute fairly to national revenue. The FTOâ€™s findings urge both employers and employees to ensure that income tax is appropriately deducted at source for daily wages workers, just as it is for other salaried employees. Additionally, the report pointed out that employers should be vigilant in complying with tax regulations, as failure to properly deduct taxes from employees on daily wages could lead to legal repercussions. In conclusion, the FTOâ€™s statement serves as a reminder that all employees, regardless of their employment type, are subject to the same tax regulations. The clarification ensures greater fairness and consistency in tax collection, ultimately contributing to the nationâ€™s fiscal health. The FTO referred to the Section 12(2) of Income Tax Ordinance, 2001.

Date: 2025-04-19

Details: Karachi, April 19, 2025 â€“ The Federal Tax Ombudsman (FTO) has issued a detailed information regarding the rights of passengers traveling to and from Pakistan, particularly concerning duty-free allowances available under the Baggage Rules, 2006. These rules, framed under the Customs Act, 1969 and notified through SRO 666(1)/2006 dated June 28, 2006, aim to safeguard travelersâ€™ rights and ensure transparency in customs procedures. The FTO emphasized that these allowances are designed to benefit Pakistani nationals who are not availing the transfer of residence facility. They outline specific entitlements for personal baggage, depending on the duration of stay abroad. The Baggage Rules provide clarity to travelers and reinforce the rights of every bonafide passenger. Duty-Free Allowances for Pakistani Nationals (Non-transfer of Residence): Passengers returning to Pakistan are entitled to carry certain items of personal use in their baggage, including: â€¢ Personal clothing and accessories â€¢ One laptop computer â€¢ Any other item (excluding mobile phones) within duty-free value limits Allowance limits based on duration abroad: â€¢ Stay up to 30 days: Duty-free allowance up to USD 400 â€¢ Stay between 30 to 60 days: Duty-free allowance up to USD 800 â€¢ Stay over 60 days: Duty-free allowance up to USD 1,200 Additionally, if a Pakistani national has stayed abroad for more than 60 days, they may also purchase goods from duty-free shops in Pakistan up to an aggregate value of USD 1,000, provided the purchases are made within 60 days of arrival. Transfer of Residence â€“ Enhanced Allowances for Returning Pakistanis: Those availing the transfer of residence facility are eligible for broader exemptions, such as: â€¢ Personal household items generally used by families â€¢ Professional equipment used abroad, provided itâ€™s certified free of harmful materials by an internationally recognized agency â€¢ Items (excluding mobile phones) valued up to USD 1,500 â€¢ Weapons of non-prohibited bore for personnel from armed forces or law enforcement They may also make purchases from duty-free shops within Pakistan up to a value of USD 1,500 within 60 days of returning. Understanding your rights under the Baggage Rules ensures smoother travel experiences and helps avoid unnecessary complications with customs. The FTO encourages all Pakistani passengers to stay informed about their entitlements and the conditions that apply to their baggage.

Date: 2025-04-18

Details: LAHORE: The Federal Tax Ombudsman (FTO) has declared non-compliance of stay order by the tax assessment officer tantamount to maladministration. According to details, the assessing officer of the tax department had attached taxpayerâ€™s bank accounts almost two years after passage of the assessment order without serving any tax demand. The taxpayer filed an appeal against demand generated by the tax department and the commissioner appeals stayed the recovery of demand in exercise of authority under the law. He observed that without ascertaining quantum of actual income offered to tax, the assessing officer could not allegedly any income on estimate basis. He further observed that the tax officer was under a duty to identify any sources of income not declared by the taxpayer. Consequently, the assessment order was set aside and remanded the matter for a fresh assessment. The taxpayer challenged the remand order before a tribunal, which set aside it, saying that it was not justified to remand the matter to the department. However, the tax department refused to abide by the stay order and did not detach bank accounts of taxpayer. The taxpayer filed a complaint before the FTO who declared the non-compliance of stay order as maladministration. The department filed an appeal before the President of Pakistan on the ground that the FTO has exceeded his authority by interfering with the matter of assessment of tax and interpretation of law. President of Pakistan set aside the FTO order and the matter ultimately landed to the higher appellate forum. The higher appellate forum agreed with the FTO, observing that finding of the FTO was that failure or refusal of the relevant tax officials to honour and implement the stay order was perverse, arbitrary, unjust and oppressive and the conduct falls under maladministration. Such recommendation fall within the powers of the FTO, therefore, the higher appellate forum set aside the decision of the President of Pakistan for not being in accordance with law and upheld the decision of the FTO, directing the FBR to ensure recommendations passed by the FTO. Copyright Business Recorder, 2025

Date: 2025-04-18

Details: Islamabad, April 18, 2025: The Federal Board of Revenue (FBR) has officially announced that all its field formations will now observe Saturdays as regular working days until June 30, 2025. This directive, issued on Friday, is part of the FBRâ€™s broader strategy to intensify efforts for achieving its ambitious tax collection targets for the current fiscal year. In its communication to Inland Revenue (IR) field offices, including Large Taxpayer Offices (LTOs), Medium Tax Office (MTO), Corporate Tax Offices (CTOs), and Regional Tax Offices (RTOs), the FBR emphasized that proactive enforcement measures are essential in the coming months. By utilizing Saturdays as additional working days, the FBR aims to maximize operational efficiency and ensure every opportunity is taken to meet revenue goals. Sources within the FBR revealed that the national tax authority is currently under significant pressure to meet its collection benchmarks. Despite economic challenges, the FBR is determined to enhance its outreach and enforcement strategies. Extending the working week to include Saturdays is expected to accelerate tax processing, improve taxpayer facilitation, and enhance field activityâ€”ultimately increasing overall tax intake. This decision underscores the FBRâ€™s commitment to fiscal responsibility and its resolve to meet national economic targets. Officials noted that increasing the number of working days, especially with the inclusion of Saturdays, would allow more time for tax audits, enforcement actions, and taxpayer engagement. Furthermore, the FBR is encouraging all its staff to approach this period with renewed dedication and professionalism. The move reflects not only a structural adjustment but also a cultural push toward heightened productivity during this crucial period. As the fiscal year draws closer to its end, the FBR remains focused on implementing every feasible measure to ensure targets are met. With Saturdays now officially reinstated as working days, the FBR hopes to gain critical momentum in the final quarter of FY2024â€“25.

Date: 2025-04-18

Details: Karachi, April 18, 2025 â€“ The Karachi Chamber of Commerce and Industry (KCCI) has strongly recommended that the Federal Board of Revenue (FBR) waive mandatory factory visits for the issuance of income tax exemption certificates, citing disruptions to business operations and inefficiencies caused by the current procedures. In its budget proposals for the fiscal year 2025â€“26, the KCCI emphasized that the biannual issuance of tax exemption certificates under Section 159 of the Income Tax Ordinance 2001â€”especially when coupled with physical factory inspections by tax officialsâ€”poses a significant burden on businesses. These inspections not only interrupt daily operations but also increase the risk of bureaucratic delays, human intervention, and potential harassment, according to the chamber. The KCCI pointed out that businesses already submit detailed sales tax returns and Annexure H, which provide adequate documentation for verifying compliance. Therefore, factory visits are unnecessary and should be replaced by a digital or document-based verification system. In addition, the KCCI criticized the FBRâ€™s requirement that trade bodies and chambers furnish proof of non-profit status via a certificate from the Pakistan Centre for Philanthropy (PCP). The chamber argued that this step is redundant, as organizations like KCCI are already licensed by the Directorate General of Trade Organizations (DGTO), which serves as a legitimate certification of their non-profit nature. To streamline the tax exemption process, KCCI proposed the issuance of tax exemption certificates valid for three years instead of requiring renewals every six months. This change would reduce paperwork, provide long-term clarity, and minimize the frequency of engagement with tax authorities. The chamber also called for the elimination of the PCP requirement altogether, advocating for recognition of DGTO licenses as sufficient evidence to obtain certificates of exemption for tax purposes. By implementing these recommendations, the KCCI believes the FBR can reduce inefficiencies, promote voluntary compliance, and foster a more business-friendly environment. These reforms would not only improve transparency but also build greater trust between taxpayers and tax authorities, ultimately contributing to a more efficient and cooperative tax regime.

Date: 2025-04-18

Details: Karachi, April 18, 2025 â€“ The Federal Board of Revenue (FBR) has been strongly advised to incorporate exporters into the regular income tax regime, in a move aimed at strengthening tax collection, broadening the tax base, and promoting equity in the national tax system. The recommendation comes from the Institute of Cost and Management Accountants of Pakistan (ICMAP), which has submitted its budget proposals for the upcoming fiscal year. According to the ICMAP, the FBR should focus on gradually shifting exportersâ€”both individuals and corporationsâ€”into the standard corporate and personal income tax structure rather than continuing to rely on fixed or final tax regimes that often result in under-taxation. The ICMAP emphasized that streamlining tax collection from exporters would help rectify the existing imbalance, where this high-revenue sector enjoys preferential treatment. â€œExporters form a vital part of the economy, and including them in the regular income tax system is necessary to ensure fairness and long-term sustainability of fiscal policies,â€ the proposal noted. The institute also recommended overhauling the Personal Income Tax (PIT) system by reducing the number of tax slabs to five and increasing the maximum tax rate for non-salary individuals (NSIs) to 45%. This measure, it stated, would help the FBR capture a more accurate share of income from high-earning individuals, especially in the private and business sectors. According to the ICMAP, Pakistanâ€™s income distribution is significantly skewed, with the wealthiest 10% controlling over 30% of national assets. Imposing higher tax rates on affluent non-salaried individuals and exporters can help reduce income inequality and generate additional fiscal space for development spending. The proposed 45% tax rate is designed to target only the top earners and large businesses, including high-profit exporters, without discouraging investment or growth. The ICMAP estimates that by including exporters in the regular tax framework and enforcing higher taxation on the wealthy, the FBR could increase the tax-to-GDP ratio by 0.5% to 0.7% over the next few years. The FBR is expected to review these proposals in its upcoming budget meetings as part of its broader reform agenda.

Date: 2025-04-18

Details: Islamabad, April 18, 2025 â€“ In a move to ease the pressure on taxpayers, the Federal Board of Revenue (FBR) has announced an extension of the deadline for filing monthly sales tax and federal excise returns for the periods of February and March 2025. The new deadline for submission has been extended to April 25, 2025, allowing additional time for businesses to comply with filing requirements. In an official communication addressed to Chief Commissioners of Large Taxpayers Offices (LTOs), Medium Taxpayers Office (MTO), Corporate Tax Offices (CTOs), and Regional Tax Offices (RTOs), the FBR notified that the deadline for the tax period of February 2025, which was originally due on March 18 and previously extended to April 13, has now been further extended to April 25. However, this extension is conditional upon the prior deposit of the due sales tax liability within the original payment deadline. READ MORE: IRIS Glitches Prompt KCCI to Seek PM Shehbazâ€™s Intervention Similarly, the FBR confirmed that the deadline for the tax period of March 2025, initially due on April 18, has also been extended to April 25 under the same condition â€” that the payable sales tax amount is deposited within the due date. The decision to grant an extension comes in response to widespread complaints from taxpayers and business communities over persistent technical difficulties with the FBRâ€™s IRIS portal. These issues have significantly hampered the ability of many businesses to file their returns on time. The Karachi Chamber of Commerce and Industry (KCCI) has been particularly vocal in its criticism. In a formal letter addressed to Prime Minister Shehbaz Sharif, KCCI President Muhammad Jawed Bilwani outlined the severe impact of system failures on the business community, calling for immediate governmental intervention. According to KCCI, thousands of tax-compliant companies across Pakistan are unable to meet their filing obligations due to ongoing technical glitches in the IRIS system. As the FBR continues efforts to resolve these system issues, the extended deadline aims to offer temporary relief, ensuring businesses are not penalized for challenges beyond their control.

Date: 2025-04-18

Details: Karachi, April 18, 2025 â€“ The Federal Board of Revenue (FBR) has revealed that locally manufactured mobile phones benefited from a massive sales tax exemption totaling Rs33 billion in 2024, according to its latest tax expenditure report. This significant exemption was granted under the Ninth Schedule of the Sales Tax Act, 1990, allowing manufacturers of mobile phones to supply their products without incurring standard sales tax liabilities. The move, initially aimed at supporting Pakistanâ€™s local mobile assembly industry, has become one of the most substantial tax breaks within the technology sector. According to the FBR, these exemptions applied to the supply of mobile phones in Completely Built Unit (CBU) condition within the country, in addition to concessions already applied on imported devices in Completely Knocked Down (CKD) or Semi-Knocked Down (SKD) forms. These arrangements have been instrumental in promoting local assembly while keeping prices of phones relatively accessible for consumers. The exemption also extends to imported or locally supplied phones, including cellular and satellite variants, categorized according to their import value. These devices are taxed or exempted based on price brackets: â€¢ Phones priced above US$500 are taxed based on the full import value or its rupee equivalent. â€¢ Devices priced between US$350 and US$500 fall into a lower tax bracket. â€¢ Phones valued between US$200 and US$350 receive additional exemption considerations. â€¢ Mobile handsets between US$100 and US$200 also qualify for reduced tax rates. â€¢ The lowest bracket includes phones priced between US$30 and US$100, many of which benefit from near-total exemption. While these tax concessions were introduced to encourage investment in the local mobile manufacturing industry and reduce import dependency, they have come under scrutiny for the scale of revenue loss involved. Tax analysts suggest a review of these policies might be necessary to strike a balance between industrial incentives and national revenue objectives. With mobile penetration in Pakistan rapidly expanding, the Rs33 billion in sales tax exemption sparks an important debate on sustainable fiscal planning and the future of mobile technology development in the country.

Date: 2025-04-18

Details: Islamabad, April 18, 2025 â€“ Prime Minister Shehbaz Sharif on Friday inaugurated the Federal Board of Revenue (FBR)â€™s newly developed Performance Management System and urged tax officers to contribute with passion and dedication toward building a debt-free Pakistan. Addressing a special ceremony held at FBR Headquarters in Islamabad, Shehbaz emphasized that enhancing revenue collection is essential to reduce reliance on foreign lending institutions like the International Monetary Fund (IMF). â€œIf we genuinely aspire to become a sovereign and economically independent nation, we must drastically improve revenue collection,â€ Shehbaz asserted. He appreciated the 27% year-on-year growth in FBR revenues, acknowledging the hard work of FBR officers and the leadership of the finance ministry. However, he reminded the audience that more systemic reforms are required to close existing loopholes and broaden the tax net. The newly introduced Performance Management System for FBR officers marks a significant step towards transparency, accountability, and results-based evaluation in public service. Prime Minister Shehbaz announced that this modern model of monitoring will soon be implemented across other key government departments to foster a nationwide culture of efficiency, merit, and reward. During his visit, Shehbaz received a comprehensive briefing on initiatives spearheaded by Pakistan Revenue Automation Limited (PRAL). The briefing included updates on digital invoicing, automated tax return systems, and the use of advanced data analytics for improving tax collection. He was informed that the FBR is actively integrating databases from NADRA, banks, and other institutions to track high-value transactions and undisclosed assets. Over 35 new companies have already been brought into the tax system using these tools. The prime minister also toured the newly established FBR Delivery Unit, where he interacted with officers and reviewed the operational framework. He commended the officers as key national assets who will help reshape Pakistanâ€™s economic future. With the launch of the automated officer evaluation system, performance will now be directly linked to financial incentives and career progressionâ€”laying the foundation for a results-oriented civil service. In closing, Shehbaz reaffirmed his commitment to transforming FBR into a world-class tax institution capable of driving sustainable economic growth and reducing Pakistanâ€™s dependence on external debt.

Date: 2025-04-17

Details: Islamabad, April 17, 2025 â€” The Federal Board of Revenue (FBR) has introduced stricter rules for sales tax de-registration through the issuance of SRO 608(I)/2025. Under the revised regulations, the FBR has reduced the timeline for processing de-registration applications from 90 days to 60 days. This step is expected to streamline the process while ensuring that applicants do not exploit the system to claim undue benefits. As per the new rules, once a taxpayer submits an online application for de-registration, they will be barred from filing Annex-C, Annex-D, or any sales tax return effective immediately from the date of application submission. In a significant tightening of the rules, the FBR has clarified that no input tax adjustment or sales tax refund shall be allowed to the applicant during the de-registration process. Moreover, other registered persons will also be prohibited from claiming input tax adjustments or refunds based on invoices issued by the person under de-registration, thereby blocking any attempt to manipulate tax credits during the transition period. To ensure transparency and accountability, the FBR has empowered the Commissioner of Inland Revenue to initiate an audit or inquiry before granting final de-registration. If such an audit or investigation is deemed necessary, the commissioner must issue a written notice requesting relevant records from the applicant. Once all documentation is submitted, and the audit is completed, the commissioner must finalize the proceedings within 90 days from the date of the original application. Following this, the applicant is required to file a final return under Section 28 of the Sales Tax Act, 1990, and clear any outstanding tax liabilities. After successful submission and clearance of dues, the computerized system will automatically complete the de-registration process within 90 days, as long as all conditions under sub-rule (4) are satisfied. These new measures reflect FBRâ€™s ongoing efforts to enhance transparency in the tax system and curb fraudulent activities linked to the misuse of the de-registration procedure.

Date: 2025-04-17

Details: Islamabad, April 17, 2025: The Federal Board of Revenue (FBR) has introduced fresh and more stringent guidelines for the suspension of sales tax registration under new Statutory Regulatory Order (SRO) 608(I)/2025, issued on Thursday. This move is aimed at curbing tax evasion, fraudulent invoicing, and misuse of the sales tax regime by non-compliant businesses. According to the FBR, the new rules empower the Commissioner of Inland Revenue to suspend the sales tax registration of a registered person through the electronic system, without prior notice, if there is credible evidence or suspicion of wrongdoing. The suspension will remain in effect pending the outcome of a detailed inquiry. The FBR outlined several key triggers that may lead to such suspension. These include the non-availability of a registered person at the declared business address, refusal to provide access to premises under Sections 40B and 40C, or failure to furnish required records under Sections 25 and 37 of the Sales Tax Act, 1990. Additionally, any suspicious business activity where the scale of operations exceeds five times the sum of declared capital and liabilities may also raise red flags. The updated sales tax suspension rules also address dealings with other non-compliant businesses. If a registered entity makes more than 10% of its purchases from or sales to another suspended person, or if such transactions exceed Rs50 million in value, it may also face suspension. Furthermore, consistent failure to file sales tax returns â€” three consecutive months of non-filing or six months of null filing â€” can lead to immediate action. The FBR stated that these revised parameters, particularly those listed under clauses B to F, aim to tighten the sales tax enforcement framework and ensure that only genuine and compliant taxpayers benefit from registration status. By strengthening the monitoring of sales tax compliance, the FBR hopes to enhance revenue collection, reduce fraudulent practices, and improve overall tax administration efficiency across the country.

Date: 2025-04-17

Details: Karachi, April 17, 2025:: The Federal Board of Revenue (FBR) has announced a massive sales tax exemption worth Rs81 billion for the local supply of poultry feed. The measure, revealed in the FBRâ€™s annual tax expenditure report, highlights the governmentâ€™s effort to promote affordability and ensure food security. According to the report, the exemption was granted under the Sixth Schedule of the Sales Tax Act, 1990. It covers not only poultry feed but also extends to cattle feed and essential ingredients such as sunflower seed meal, canola seed meal, and rape seed meal. These inputs are critical for maintaining healthy livestock and poultry populations across the country. The FBR clarified that this tax exemption on poultry feed was introduced to benefit both poultry producers and the general population. By reducing the input cost for poultry farming, the initiative was intended to lower production expenses and help stabilize market prices of poultry products, particularly chicken and eggs. Despite the hefty tax relief provided to the poultry industry, retail prices of poultry meat have continued to rise. According to the latest data released by the Pakistan Bureau of Statistics (PBS), the price of live broiler chicken has increased by 6.43%, climbing to Rs535.48 per kilogram in 2025 from Rs462.65 per kilogram a year earlier. This contradiction between tax exemption benefits and rising poultry prices has raised concerns among consumers and policymakers alike. Many are questioning whether the poultry industry is passing on the benefits of the exemption to end users or retaining the margin amid rising costs and market inefficiencies. The exemption, however, reflects the governmentâ€™s broader strategy to support agricultural productivity and ease inflationary pressures in the food sector. The poultry industry remains one of the largest and fastest-growing segments of Pakistanâ€™s agriculture sector, and the exemption is expected to encourage sustained investment and growth. Going forward, the FBR may evaluate the effectiveness of such exemptions and whether they are translating into meaningful relief for consumers, particularly in the essential poultry segment.

Date: 2025-04-17

Details: Karachi, April 17, 2025: The Institute of Cost and Management Accountants of Pakistan (ICMAP) has proposed the introduction of a 3.5% tax on earnings generated from social media platforms, as part of its comprehensive tax proposals for the federal budget 2025â€“26. In its latest recommendations, ICMAP suggested that the government consider imposing this tax specifically on content creators and influencers earning over Rs5 million annually through platforms such as YouTube, TikTok, and Instagram. The proposal aims to tap into the rapidly expanding digital creator economy, which is reshaping traditional business models and contributing significantly to the global financial landscape. ICMAP emphasized that earnings from social media platforms have become a substantial source of income for a growing segment of Pakistanâ€™s youth and entrepreneurs. By taxing high-earning individuals operating on these platforms, the government could ensure equitable participation in the tax net, aligning the digital economy with national fiscal objectives. Furthermore, ICMAP proposed the inclusion of a digital subscription tax on streaming services like Netflix, Disney+, and Hotstar. The organization noted that these platforms are now deeply embedded in urban lifestyles and entertainment consumption. However, it also recommended exemptions for low-income groups and minors to maintain digital inclusivity and fairness. â€œDigital platforms have revolutionized income streams, and itâ€™s time for our taxation systems to evolve accordingly,â€ ICMAP stated. â€œBy bringing social media and subscription-based earnings into the tax framework, we can ensure that those benefiting from digital wealth also contribute their fair share to national development.â€ According to ICMAPâ€™s estimates, taxing this segment could potentially generate an additional Rs52.5 billion in annual revenue â€” equivalent to approximately 0.06% of Pakistanâ€™s GDP, which stands around $350 billion or Rs87.5 trillion. This initiative is seen as a viable step toward modernizing tax collection mechanisms, expanding the tax base, and boosting revenues without burdening the salaried class. ICMAP believes that such progressive taxation on digital platforms can also support local public broadcasting initiatives and foster financial discipline among high-income digital entrepreneurs. As platforms continue to grow in influence, ICMAPâ€™s recommendations mark a forward-looking approach to regulating and benefiting from Pakistanâ€™s digital economy.

Date: 2025-04-17

Details: Karachi, April 17, 2025 â€” The Karachi Chamber of Commerce and Industry (KCCI) has called on the government to exempt foreign exchange-earning businesses from provincial taxation, aiming to promote economic stability and protect vital inflows into Pakistanâ€™s economy. In its comprehensive tax proposals for the 2025â€“26 budget, the KCCI highlighted a critical concern: businesses that generate foreign exchangeâ€”such as Indenting Agents, Buying Houses, and similar service-oriented operationsâ€”are already subject to federal taxation. Since foreign exchange earnings directly influence Pakistanâ€™s national reserves and macroeconomic policies, they are traditionally governed by federal laws. However, KCCI emphasized that some provincial authorities have also started imposing taxes on the same income, creating jurisdictional overlaps and undermining the principle of unified taxation. The KCCI warned that this dual taxation structure discourages businesses from bringing their foreign exchange earnings into the country. â€œOver-taxation increases the operational burden and disincentivizes the repatriation of valuable foreign exchange into Pakistan, thereby weakening our external account position,â€ stated a KCCI spokesperson. Moreover, the KCCI pointed out that high tax liabilities at both federal and provincial levels reduce business competitiveness, especially when compared to regional players operating under more favorable regimes. Businesses may opt to park their foreign exchange earnings offshore, reducing liquidity in the domestic market and putting further pressure on Pakistanâ€™s already strained foreign exchange reserves. To address these challenges, the KCCI has proposed a targeted exemption from provincial taxes for businesses that earn and remit foreign exchange into Pakistan. The Chamber stressed that such a measure would reduce tax overlap, enhance the ease of doing business, and encourage compliance. â€œThe objective is to build a transparent and business-friendly framework that encourages entrepreneurs to keep their foreign exchange earnings within Pakistan,â€ the KCCI noted. â€œThis will not only support a stable exchange rate but also help boost investor confidence.â€ By aligning tax policies with national economic goals, the KCCI believes the government can create a more predictable and growth-oriented environment for foreign exchange-generating enterprises.

Date: 2025-04-16

Details: ISLAMABAD â€“ April 16, 2025: The Federal Tax Ombudsman (FTO) has formally restrained the Federal Board of Revenue (FBR) from imposing penalties on sales tax registered persons in cases where delays in return filing were caused by the tax department itself. The FTO issued a comprehensive order against the FBR, highlighting multiple complaints from the business sector regarding unjustified penalties and procedural delays. The FTO emphasized that there is no clause under the Sales Tax Act, 1990, or the Sales Tax Rules, 2006, that authorizes the FBR to prevent a registered person from filing a current period sales tax return. The FTO noted that denying this right can severely disrupt business operations, especially when suppliers withhold payments due to the taxpayerâ€™s inactive status. This action by the FTO stems from an Own Motion investigation under Section 9(1) of the FTO Ordinance, 2000. Numerous complaints had been submitted to the FTO, revealing a consistent pattern of delay by Commissioners Inland Revenue (CIRs) in granting permission to taxpayers to file overdue sales tax returns. Such permission, required under Section 26AB of the Sales Tax Act, must be requested electronically. However, the FBRâ€™s own internal inefficiencies were causing undue delay, affecting the corporate sectorâ€™s ability to conduct business smoothly. The FTO pointed out that in many cases, these electronic requests were being left unattended in the CIRsâ€™ online systems, resulting in prolonged inaction. This negligence by FBR officials was cited as being detrimental to the â€œease of doing business,â€ a priority repeatedly stressed by the government. The FTO has directed the FBR to take corrective measures and ensure timely processing of permission requests. Additionally, the FTO warned the FBR that continued negligence in such matters would invite further scrutiny and possible disciplinary action. This is the sixth major intervention by the FTO this year in matters involving the FBR, underlining growing concerns over the departmentâ€™s operational efficiency. The FTO reiterated its commitment to upholding taxpayer rights and urged the FBR to align its procedures with the legal framework and the principles of fairness.

Date: 2025-04-15

Details: Karachi, April 15, 2025 â€“ The Federal Board of Revenue (FBR) has reported that consumers in the tribal areas benefited from a significant tax relief of over Rs14 billion on the supply of electricity, granted through a sales tax exemption under the Sales Tax Act, 1990. In its latest tax expenditure report, the FBR revealed that the exemption was made possible through the Sixth Schedule of the Sales Tax Act, which allowed for tax-free electricity supply to both residential and commercial users in the tribal areas, with specific exceptions. Notably, this exemption did not apply to the steel sector and the ghee or cooking oil industries operating in the region. According to the FBR, the objective behind this exemption was to support the socio-economic uplift of the tribal areas following their constitutional merger with Khyber Pakhtunkhwa under the 25th Amendment. The FBR confirmed that the tax relief was granted on 152 separate instances of electricity supply from the date of enactment of the constitutional amendment until June 30, 2023. The FBR specified that in addition to household and commercial consumers, industrial units established and operational before May 31, 2018, also qualified for this electricity tax exemptionâ€”again, with the exception of the steel and ghee/cooking oil sectors. This move was aimed at encouraging industrial continuity in the tribal areas while preventing misuse of exemptions by newer entities in sectors already enjoying broader commercial incentives. Officials from the FBR emphasized that this relief package was in line with the governmentâ€™s broader commitment to integrate the tribal areas into the national economy, ensuring access to essential utilities without the burden of additional taxes. The exemption not only supported economic activity but also reduced financial strain on underdeveloped regions already grappling with infrastructural and social challenges. As the FBR continues to evaluate its tax policies, the case of electricity exemptions in the tribal areas highlights the importance of targeted fiscal measures aimed at promoting inclusive development while maintaining tax equity nationwide.

Date: 2025-04-15

Details: Karachi, April 15, 2025 â€“ The Karachi Chamber of Commerce and Industry (KCCI) has urged the government to exempt fast-moving consumer goods (FMCGs) from advance tax collection under Sections 236G and 236H of the Income Tax Ordinance, 2001. These proposals were submitted as part of KCCIâ€™s recommendations for the Federal Budget 2025-26. The KCCI emphasized that the current tax regime unfairly burdens several key sectors, particularly those dealing in essential goods. Among the most impacted are the Pulses and Beverages sectors, which fall within the broader category of FMCGs. The advance tax requirement on transactions between manufacturers, importers, and retailers inflates operational costs, which are then passed on to consumersâ€”fuelling inflation, especially for food items. The KCCI expressed concern over the exclusion of pulses from the negative list of exempted goods, despite their importance as a staple food. This omission increases distribution costs, disproportionately affecting low-income households and small-scale businesses. Additionally, KCCI noted that FMCG manufacturers in the beverage segment are facing discriminatory treatment, as they remain subject to tax collection obligations not applied to other FMCG categories. In its formal proposal, the KCCI put forth three key recommendations: 1. Pulses should be added to the negative list under Sections 236G and 236H, thereby exempting them from advance tax collection. 2. Manufacturers of FMCGs should no longer be obligated to act as collecting agents under these sections, as collecting taxes from every level of the supply chain is impractical. 3. Other essential items alongside pulses and FMCGs should also be considered for exemption to reduce the financial burden on both businesses and end consumers. The KCCI believes that implementing these changes will align with the governmentâ€™s policy goals of curbing food inflation and ensuring affordability of everyday products. By addressing the structural inefficiencies in the current tax framework, KCCI asserts that both business operations and consumer welfare within the FMCG sector can be significantly improved. The KCCI continues to advocate for a more balanced and pragmatic tax policy that supports economic growth while protecting vulnerable segments of the population.

Date: 2025-04-15

Details: Islamabad, April 15, 2025 â€“ The Federal Board of Revenue (FBR) has reiterated its directive to all concerned field formations to urgently submit details of vacant posts under their respective jurisdictions. This instruction comes as part of the federal governmentâ€™s broader policy for managing surplus employees, outlined in the circular titled â€œDisposal of Federal Government Employees in the Surplus Pool.â€ The FBR has reminded 14 key customs offices and directoratesâ€”including the Chief Collector of Customs Enforcement (Islamabad), Collectorates in Karachi, Hyderabad, Gadani, and Multan, as well as the Directorate of Transit Trade in Gwadar, Quetta, Lahore, and Gilgit-Baltistanâ€”to submit the required data by April 18, 2025. The information is to be provided on a prescribed proforma, detailing vacancies filled through the direct quota. Despite an earlier circular issued on March 24, 2025, which is available on the FBRâ€™s website, the revenue authority noted that many field units have yet to respond. The FBR emphasized that this delay in furnishing vacancy information is causing unnecessary bottlenecks in the adjustment of surplus employees and undermines the objectives of the reorganization policy. The FBR has clearly stated that even if there are no vacant posts to report, a â€œNilâ€ response must still be submitted formally. Failure to comply with the deadline will make the heads of the respective departments personally responsible for any adverse consequences or administrative lapses. This initiative by the FBR is part of an ongoing effort to ensure transparency, accountability, and optimal human resource utilization across its nationwide operations. By identifying and reporting available positions, the FBR aims to accommodate surplus staff efficiently without resorting to new hiring, thereby improving fiscal discipline. Through this renewed reminder, the FBR is reinforcing its commitment to streamline internal processes and ensure that every formation contributes timely to policy execution. Stakeholders are urged to prioritize this directive and avoid any further delays, as the FBR prepares to move forward with workforce realignment measures.

Date: 2025-04-14

Details: April 14, 2025 Karachi, April 14, 2025 â€“ The Federal Board of Revenue (FBR) has revealed that it extended approximately Rs 60 billion in tax relief during the current fiscal year through reduced income tax rates applied to a wide range of imports. This relief was granted under Clause 56 of Part IV of the Second Schedule of the Income Tax Ordinance, 2001. According to the FBRâ€™s latest annual tax expenditure report, the reduced tax rate facility aims to support sectors crucial to the countryâ€™s economy while easing the cost burden on key industries. The FBR clarified that the exemption from the usual withholding tax under Section 148 applies to specified individuals, organizations, and types of goods brought into Pakistan through imports. The FBR outlined a comprehensive list of entities and import categories eligible for this tax incentive: 1. Imports of goods falling under Chapters 86 and 99 of the Pakistan Customs Tariff (excluding PCT heading 9918). 2. Petroleum products, including crude oil, furnace oil, motor spirit, JP-1, high-speed diesel oil, base oil for lubricants, light diesel oil, and super kerosene oil, imported by major oil marketing companies like Pakistan State Oil, Shell, Chevron, Attock Petroleum, Total-Parco, and others licensed by OGRA, as well as oil refineries. 3. Goods imported by direct and indirect exporters under subchapter 7 of Chapter XII of SRO 450(I)/2001. 4. Temporarily imported goods that are exempt from customs duty and sales tax under SRO 492(I)/2009, including items brought in by international athletes. 5. Imports under Manufacturing Bond Schemes as detailed in Chapter XV of the Customs Rules 2001. 6. Mineral oil imported by pesticide manufacturers, exempt under SRO 857(I)/2008. 7. Imports by the Federal Government, provincial governments, and local governments. 8. Foreign companies and their associations where a majority share is held by a foreign government. 9. Imports of plant and machinery by contractors executing government projects, subject to certification. 10. Petroleum companies importing crude oil, diesel, kerosene, and chemicals used in refining operations. 11. Exploration and Production (E&P) companies under SRO 678(I)/2004, excluding imported motor vehicles. 12. Re-importation of previously exported Pakistani goods, within one year of export, per the Customs Act, 1969. 13. Plant and machinery for biomass/bagasse-based power generation projects qualifying under Clause 132C. 14. Entities authorized under the Export Facilitation Scheme 2021, subject to specific FBR-defined conditions. 15. Completely built-up (CBU) motor vehicles up to 1000cc. 16. Printed books (PCT code 49.01), excluding brochures and similar materials. 17. Newspapers, journals, and periodicals (PCT code 49.02), with or without advertising. 18. Blind talking mobile phones imported by visually impaired persons under applicable rules. The FBR emphasized that the facilitation aims to improve trade competitiveness and incentivize industrial productivity by ensuring that essential imports are not burdened with prohibitive tax costs. These concessions also align with broader efforts to strengthen the export sector, develop domestic industries, and enhance energy infrastructure. The decision to offer reduced income tax rates on selected imports is part of a wider framework to stimulate economic growth, attract investment, and support vulnerable sectors. The FBR reiterated its commitment to modernizing Pakistanâ€™s tax system while ensuring that imports critical to national development receive the necessary fiscal support. With this Rs 60 billion concession, the FBR continues to play a central role in balancing revenue collection with strategic tax incentives, ensuring that the countryâ€™s tax regime remains growth-oriented and inclusive across essential sectors.

Date: 2025-04-14

Details: Karachi, April 14, 2025 â€“ The Pakistan Business Council (PBC) has raised serious concerns over the impact of the current 18% General Sales Tax (GST), stating that such a high rate in a largely undocumented economy creates a powerful incentive for tax evasion. In its formal tax proposals for the upcoming 2025-26 federal budget, the PBC highlighted how an 18% GST is particularly damaging in an environment where informal businesses already dominate the market. According to the PBC, the elevated GST encourages businesses to remain outside the formal net, thereby shrinking the documented economy and eroding the tax base. The PBC also drew attention to the heavy taxation burden on the corporate sector. With an effective tax rate of 48%, Pakistan is seen as an unattractive destination for both local and foreign investors. The council argued that reducing the corporate tax rate would align Pakistan with other emerging economies and enhance competitiveness. Among its key recommendations, the PBC proposed a gradual reduction in GST, suggesting that the rate be cut by 1% annually until it reaches 15%. This step, the council believes, would reduce the incentive to evade and bring more businesses into the tax net. Additionally, the PBC criticized the multiple taxation of dividends within group structures, which it said discourages companies from consolidating and diversifying. By removing this disincentive, the government could foster growth in the capital markets and broaden corporate ownership. The organization also addressed the high tax burden on salaried individuals, which it linked to a growing brain drain. With a combined tax of 29% income tax, 10% super tax, and 15% dividend tax on individual income, the PBC argued that the current structure pushes skilled professionals to either move abroad or shift to the informal economy. As part of its proposal, the PBC urged the government to revise income tax slabs to reflect inflation and reduce the overall burden on the salaried class. The call for reform was clear: a lower GST, rational corporate taxes, and fairer individual taxation are key to reversing the trends of tax evasion and talent loss.

Date: 2025-04-13

Details: Beijing, April 13, 2025 â€“ Chinaâ€™s Ministry of Commerce has called on the United States to completely cancel its policy of reciprocal tariffs and return to a cooperative framework based on mutual respect and equal dialogue. In a statement issued on Sunday, the ministry criticized Washingtonâ€™s continued reliance on trade protectionism, urging a full reversal of the unilateral tariff measures imposed in recent years. A ministry spokesperson noted that although the U.S. has recently announced a memorandum exempting certain goodsâ€”such as smartphones, computers, semiconductor manufacturing equipment, and integrated circuitsâ€”from reciprocal tariffs, the action remains only a minor correction to a larger issue. China is currently assessing the broader implications of this exemption for its industries and global supply chains. â€œThis limited exemption reflects a small step toward correcting the damaging practice of reciprocal tariffs, but it falls short of addressing the root problem,â€ the spokesperson said. â€œThese tariffs have failed to resolve the United Statesâ€™ trade imbalances and instead have harmed the global economic landscape, disrupted enterprise operations, and raised costs for ordinary consumers.â€ The ministry emphasized that Chinaâ€™s stance on China-U.S. trade relations has been consistent and principled. China believes that trade disputes should be settled through dialogue, not confrontation. It reaffirmed that there is no winner in a trade war and warned that ongoing protectionism, especially under the guise of reciprocal actions, will only deepen divisions and instability in the international trade system. The spokesperson also stressed the need for the U.S. to listen to the growing callsâ€”both globally and domesticallyâ€”urging it to move away from its combative stance on tariffs. â€œWe urge the United States to seriously consider these rational voices and take a decisive step forward in abandoning unjustified reciprocal tariffs, which continue to harm bilateral relations and global trade.â€ China reiterated its commitment to fair and open trade and expressed hope that the U.S. would eventually prioritize cooperation over confrontation, laying the groundwork for meaningful progress in resolving trade differences free from punitive reciprocal tariffs.

Date: 2025-04-13

Details: April 13, 2025 Karachi, April 13, 2025 â€“ The Karachi Chamber of Commerce and Industry (KCCI) has strongly urged the federal government to eliminate the Value Added Tax (VAT) for commercial importers in the forthcoming federal budget for the fiscal year 2025-26. In a detailed set of tax proposals, the KCCI called for setting the VAT rate at 0% for commercial importers, emphasizing the need for uniformity in tax treatment and addressing long-standing disparities in the current taxation framework. According to the KCCI, while maintaining the standard Sales Tax rate at 18%, reducing the VAT on commercial importers from 3% to 0% will create a level playing field across all sectors. The chamber highlighted that, at present, only 90% of Sales Tax is adjustable at the point of sale, resulting in a cash flow crunch and financial burden for manufacturers and downstream industries. The KCCI also criticized the inconsistency in VAT application. While industrial importers remain exempt from the 3% VAT, commercial importers are forced to bear this additional cost, leading to distortions in trade practices and opportunities for exploitation under non-uniform tax laws. The chamber listed a wide range of HS codes covering textile and synthetic fiber products to underscore the impact on critical imports. The economic implications of retaining the 3% VAT were laid out by KCCI as follows: â€¢ Increased Tax Burden: The limited Sales Tax adjustment continues to strain the financial health of key sectors, including textiles. â€¢ Higher Consumer Prices: Retaining VAT leads to inflated prices of fabric and related goods, affecting affordability for end-users. â€¢ Slow Industrial Growth: Persistent financial pressure stifles expansion in the textile and allied sectors. â€¢ Job Reductions: Elevated taxes discourage investment and may trigger job losses. â€¢ Unfair Trade Conditions: Disparate tax policies distort market competition and hinder fair trade practices. The KCCI argued that the Federal Board of Revenue (FBR) had earlier promised either full Sales Tax adjustment or exemption from Section 8B for commercial importersâ€”a commitment yet to be honored. Removing VAT, the chamber stressed, would offer financial relief, enhance liquidity, support SMEs, and help stabilize prices in the local market. It would also align taxation with actual trade margins, which often range between just 2% to 5%. The KCCI concluded that implementing this tax reform would strengthen policy consistency, promote industrial competitiveness, and drive inclusive economic growth.

Date: 2025-04-13

Details: In a significant shift in trade policy, the U.S. Customs and Border Protection announced late Friday that smartphones, computers, and other key electronic devices imported from China will be exempted from the countryâ€™s previously imposed â€œreciprocal tariffs.â€ The updated guidance clarifies that this exemption will apply to products entering the U.S. after April 5, 2025, and allows importers to request refunds for tariffs already paid on eligible goods. This exemption marks a substantial change in how the U.S. handles its trade strategy with China, especially amid years of rising tensions and tit-for-tat tariff impositions. Analysts suggest the move may ease cost pressures on both tech manufacturers and American consumers, especially at a time when inflation concerns are affecting household spending. â€œThis is a massive U-turn in tariff policy,â€ noted the Kobeissi Letter, a financial newsletter widely followed on social media platform X. The statement highlights the unexpected nature of the decision, which could significantly alter the pricing landscape for smartphones and computers. Industry experts say the policy shift is likely to benefit major electronics manufacturers such as Apple Inc. and Samsung Electronics Co., both of which rely heavily on Chinese production lines for smartphones and computers destined for U.S. markets. With tariffs removed, companies may avoid passing additional costs to consumers, potentially stabilizing or even reducing prices on new tech releases. The prior tariff framework had caused uncertainty in financial markets and was widely seen as a hurdle for global supply chains. The unpredictable nature of the trade measures even drew criticism from within the Republican Party, including former Vice President Mike Pence, who cautioned against overreaching economic retaliation strategies. For consumers, this development could mean a broader availability of smartphones at competitive prices, particularly as manufacturers prepare for upcoming product launches. Retailers are also expected to adjust pricing models in response to the exemption, making smartphones and laptops more accessible during peak shopping seasons. As the U.S. repositions its trade policies, this strategic rollback of tariffs on Chinese smartphones and electronics may serve as a signal of a more balanced approach to international commerce moving forward.

Date: 2025-04-12

Details: ISLAMABAD: The diplomatic community in Pakistan can now approach Federal Tax Ombudsmanâ€™s (FTO) newly established â€œDiplomatic Grievance Redressal Cellâ€ to resolve their tax related disputes with the Federal Board of Revenue (FBR). Terming it as a landmark initiative, the FTO of Pakistan has inaugurated the first-ever â€œDiplomatic Grievance Redressal Cellâ€ at the FTO Secretariat here on Friday. This historic step follows the successful establishment of the Overseas Pakistanis Grievance Redressal Cell (OPGRC) and aims to provide a dedicated platform for diplomats to address issues related to tax maladministration by Federal Board of Revenue (FBR) officials. The formal inauguration of the Diplomatic Grievance Redressal Cell took place on April 11, 2025, at the FTO Secretariat. The event was hosted by Almas Ali Jovindah, Head of Overseas and Diplomatic Grievance cell, Legal & Media Advisor to the Federal Tax Ombudsman and Executive Secretary of the Forum of Pakistan Ombudsman and OIC Ombudsman Association. The session was headed by panelists Including Dr Jah Federal Tax Ombudsman, Advisor Customs Dr Arslan Subuctageen and Registrar, Muhammad Khalid Javed. Dr Asif Mahmood Jah, Federal Tax Ombudsman, was the chief guest and keynote speaker. In his welcome address, Dr Jah emphasized his longstanding commitment to facilitating diplomats and overseas Pakistanis, both during his tenure in customs and now as the FTO. He highlighted the increasing number of complaints from embassies and stressed that the new cell would provide a transparent and efficient platform to address these issues. The event witnessed participation from various embassies and international missions, including Austrian Embassy: Michael Hofbauer, Muhammad Ashraf Khan; Embassy of the Kingdom of the Netherlands, Adnan Hayat, Petra de Koster; Australian High Commission, Akemi Inoue; Embassy of Greece, Eleni Papakonstantinou; Embassy of Switzerland: Ali Jaffari, Younes Khan, Ajwat Arslan Khan; Embassy of Germany, Christian Becker, Asif Iqbal; EU Delegation, Imran Haider, Raja Naseem Ur Rehman, Andre Koenigs and Embassy of Poland, Artur Wachowiak Almas Ali Jovindah gave an insightful presentation on the evolution of the Ombudsman institutionâ€”tracing its roots to Caliph Omar (R.A.), institutionalization by King Charles XII of Sweden in 1713, and its modern form established in 1809. Today, ombudsman institutions operate in over 140 countries. He elaborated that the Diplomatic Grievance Redressal Cell is a dedicated mechanism to resolve tax-related grievances of diplomatic missions and international organizations. The initiative aims to promote trust and confidence within the diplomatic community, enhance transparency in grievance redressal and provide dedicated liaison officers, ensure prioritized resolutions, and offer transparent updates. Dr Arslan Subuctageen, Advisor Customs, outlined provisions under the Customs Act allowing diplomats to import up to two duty-free vehicles, with conditions that the first vehicle is duty-free for personal use; second vehicle is permitted if the spouse holds a diplomatic card in Pakistan and the disposal of either vehicle requires Ministry of Foreign Affairs approval. The vehicles sold within two years attract full duties; beyond two years, one percent monthly depreciation (up to 50%) applies, FTO Advisor Customs added. Muhammad Khalid Javed, FTO Registrar with extensive tax experience, explained that the diplomats may avail zero-rated sales tax on goods/services via STR-12 authorization. The minimum purchase of Rs 10,000 and an exemption certificate from the Ministry of Foreign Affairs are required. In cases of mistaken tax payment, refund claims can be routed through the Ministry. Under the Federal Excise Act, 2005, diplomats are conditionally exempt from FED on imports, subject to relevant compliance. The event concluded with a Q&A session. Diplomats were invited to submit queries in writing. Participants were also provided with FTOâ€™s newly published â€œManual on Taxpayersâ€™ Rights.â€ Jovindah expressed gratitude to all attendees and reaffirmed FTOâ€™s commitment to resolving diplomatic grievances efficiently. Participation certificates were distributed among attendees. Dr Jah closed the session with a call to action, â€œWe encourage all diplomats to approach us with their grievances. We are committed to protecting your rights and ensuring that no harassment by tax authorities goes unresolved.â€ Copyright Business Recorder, 2025

Date: 2025-04-12

Details: KARACHI: President Karachi Chamber of Commerce and Industry (KCCI) Muhammad Jawed Bilwani has strongly urged Prime Minister Shehbaz Sharif to take immediate notice of the ongoing technical failures in the Federal Board of Revenueâ€™s IRIS portal, which have severely disrupted tax compliance and are causing grave difficulties for businesses across Pakistan. In a formal letter addressed to the prime minister, KCCI president highlighted that thousands of tax-compliant businesses are unable to file their sales tax returns due to serious flaws in the IRIS system. Most notably, the portal has arbitrarily restricted the Unit of Measurement (UOM) to only â€œKilograms,â€ which is wholly impractical for many industries that rely on alternative units such as number of pieces (pcs), litres, or metres. â€œThis kind of technical oversight reflects a shocking lack of understanding of the diverse nature of our industries, including bulk manufacturers, pharmaceutical, and shoe manufacturers, etc,â€ stated Bilwani. â€œIt is technically incompetent and administratively unjustifiable. The consequence is that businesses are being penalized through no fault of their own.â€ Despite assurances from the FBR that the issue was being addressed following its acknowledgment on March 20, 2025, no meaningful improvement has been witnessed. â€œThe matter remains unresolved, and businesses are facing severe consequences simply for attempting to comply with a flawed system,â€ he added. The president KCCI also expressed deep disappointment over the indifferent attitude of senior FBR officials. He recounted a recent visit to the FBR Head Office in Islamabad, where he arrived punctually at 9 am to meet with the Member (Sales Tax) â€” only to be kept waiting for an hour with no response, as the official failed to appear in his office. During the visit, the Chief Sales Tax Officer, Dr Ali Adnan Zaidi, admitted that FBR had been receiving similar complaints from other stakeholders but confirmed that no remedial action had been taken so far. Bilwani lamented the KCCI has made repeated attempts to engage the chairman FBR, Member (Sales Tax), and other senior officials through letters and phone calls, yet has received no response. â€œThis persistent neglect underscores a larger institutional apathy not just toward KCCI but toward the entire business community that has been struggling under these systemic failures,â€ he said. Warning of broader consequences, Bilwani stated that the ongoing technical failures and bureaucratic inaction are eroding business confidence, discouraging documentation, and worsening the trust deficit between taxpayers and the government. â€œPakistanâ€™s economy cannot afford such inefficiencies, especially when ease of doing business and restoring trust in institutions should be national priorities,â€ he emphasised. The president KCCI called for the immediate resolution of the technical glitches in the IRIS portal, accountability of responsible FBR officials, and implementation of stakeholder-informed reforms to prevent such issues in the future. He also urged the establishment of a professional and responsive mechanism for engagement between FBR and the business community. â€œThe future of our economy depends on the governmentâ€™s ability to listen, respond, and act. We hope the PM will intervene to ensure this issue is resolved without further delay,â€ Bilwani concluded. Copyright Business Recorder, 2025

Date: 2025-04-12

Details: Islamabad, April 12, 2025 â€“ The Federal Board of Revenue (FBR) has officially issued a Statutory Regulatory Order (SRO) granting tax exemption on income earned by the International Cricket Council (ICC) and its officials from the ICC Champions Trophy 2025, held in Pakistan. Through SRO 579(I)/2025, dated April 9, 2025, the FBR confirmed the exemption of all income earned by non-resident entities and individuals associated with the ICC during the high-profile tournament. This includes ICC Business Corporation (IBC), ICC officials, agents, players, coaches, and media representatives affiliated with member countriesâ€”provided they are not residents of Pakistan. The FBR introduced this exemption by amending the Second Schedule of the Income Tax Ordinance, 2001. The decision aligns with a directive issued earlier by the Economic Coordination Committee (ECC) of the Cabinet, which met on February 20, 2025. The recommendation was later ratified by the federal cabinet on March 11, 2025, clearing the way for the exemption to take legal effect. Although the final match of the ICC Champions Trophy 2025 was played on March 9 in Dubaiâ€”where India triumphed over New Zealandâ€”the majority of the tournamentâ€™s matches were hosted across major cities in Pakistan, showcasing the countryâ€™s capability to organize international cricket events on a grand scale. The FBRâ€™s exemption covers not only the ICC and IBC, but also extends to employees, coaches, medical personnel, and media representatives affiliated with participating member countries. However, the relief strictly applies to non-residents. This move is seen as a gesture of goodwill and commitment to international sporting cooperation. It also reinforces Pakistanâ€™s dedication to meeting international standards and obligations associated with hosting global sports events. By issuing this exemption, the FBR aims to foster future collaborations with global sports bodies, ensuring smooth financial operations and enhanced international confidence in Pakistanâ€™s regulatory framework.

Date: 2025-04-11

Details: BEIJING, China, April 11, 2025 â€“ In a strong response to escalating trade tensions, China announced on Friday that it will increase additional customs tariffs on a wide range of U.S. imports to a staggering 125%, effective Saturday. The move, declared by the Customs Tariff Commission of the State Council, is a direct retaliation against the United Statesâ€™ recent hike of reciprocal tariffs on Chinese goods. The commission criticized the U.S. for imposing what it called â€œexcessively high and unjustifiedâ€ customs tariffs, stating that these measures severely violate international trade norms and are inconsistent with global economic principles. The U.S. approach, it added, reflects a policy of economic coercion and unilateralism, which undermines multilateral cooperation. A spokesperson from Chinaâ€™s Ministry of Commerce also addressed the issue, holding the United States fully accountable for initiating the tariff war. The spokesperson stated that the high customs tariffs from Washington have caused widespread disruption in global markets and triggered volatility within the multilateral trading framework. While the U.S. has shown signs of softening its position toward some trade partners, under pressure from China and others, Chinese officials dismissed these gestures as largely symbolic and insufficient. They emphasized that the fundamental strategy of using trade as a weapon for political leverage remains unchanged in U.S. policy. In its statement, the Customs Tariff Commission noted that if the U.S. continues to raise tariffs beyond the current level, the economic consequences will be nonsensical and self-defeating. â€œThe Chinese market can no longer absorb U.S. imports under these punitive customs duties,â€ the commission remarked. â€œIf further hikes occur, China will simply disregard them.â€ However, China signaled that it remains open to peaceful resolution. â€œWhile China is prepared to take firm countermeasures to defend its interests,â€ the Ministry of Commerce added, â€œit still prefers dialogue based on equality and mutual respect.â€ The commission concluded that if the U.S. continues to infringe upon Chinaâ€™s economic sovereignty, Beijing will escalate its response, warning that China will fight resolutely if provoked further. This intensifying trade conflict underscores a deepening rift between the worldâ€™s two largest economies, with customs duties now being wielded as tools of geopolitical pressure.

Date: 2025-04-11

Details: Karachi, April 11, 2025 â€“ Frustrated by persistent technical failures in the Federal Board of Revenueâ€™s (FBR) IRIS portal, the Karachi Chamber of Commerce and Industry (KCCI) has formally appealed to Prime Minister Shehbaz Sharif for immediate intervention to address the growing tax compliance crisis facing the business community. KCCI President Muhammad Jawed Bilwani has sent a strongly worded letter to the Prime Minister, highlighting how continued malfunctions in the IRIS system are obstructing businesses from fulfilling their statutory tax obligations. According to KCCI, thousands of tax-compliant businesses across Pakistan have been unable to file their sales tax returns due to unresolved glitches in the IRIS platform. One of the most disruptive issues is the IRIS systemâ€™s restriction of the Unit of Measurement (UOM) field to only â€œKilograms (Kgs),â€ rendering it incompatible with the needs of many industries that require measurements in Pieces (Pcs), Litres, or Meters. KCCI described this as a fundamental flaw that reflects the FBRâ€™s lack of understanding of industry-specific requirements. â€œThis is not just a technical faultâ€”itâ€™s a systemic failure that is penalizing legitimate businesses,â€ Bilwani remarked. He noted that despite FBRâ€™s acknowledgement of the IRIS issue on March 20, 2025, no meaningful progress has been made, and businesses continue to suffer the consequences. KCCI further expressed its disappointment over the indifferent behavior of FBR leadership. During a recent visit to the FBR Head Office in Islamabad, Bilwani was left waiting for over an hour to meet the Member (Sales Tax), who failed to show up. Meanwhile, Chief Sales Tax Officer Dr. Ali Adnan Zaidi acknowledged that numerous complaints regarding IRIS had been received, but no action had been taken. Bilwani stressed that KCCI had made multiple attempts to reach FBR officialsâ€”including the Chairman and Member (Sales Tax)â€”via formal letters and calls, all of which went unanswered. â€œThis neglect is not just toward KCCI but represents a larger disregard for the entire business community,â€ he warned. KCCI reiterated its demand for an immediate and comprehensive fix to the IRIS portal, holding those responsible accountable, and establishing an effective, consultative mechanism between the FBR and stakeholders. â€œWe urge PM Shehbaz to personally intervene. The credibility of IRISâ€”and the governmentâ€™s commitment to ease of doing businessâ€”is at stake,â€ Bilwani concluded.

Date: 2025-04-11

Details: Islamabad, April 11, 2025 â€“ A senior officer of the Inland Revenue Service (IRS), holding the position of BS-20, has been awarded the major penalty of dismissal from service following a comprehensive disciplinary process. The officer, Muhammad Azhar Ansari (IRS/BS-20), was also ordered to repay the embezzled amount in accordance with applicable financial and civil service laws. The Federal Board of Revenue (FBR) initiated disciplinary proceedings against the officer under the Civil Servants (Efficiency & Discipline) Rules, 2020, citing serious allegations of misconduct. The primary charge against Azhar Ansari involved concealing and allegedly tampering with his date of birth to extend his tenure beyond the legally permissible superannuation age. The inquiry was led by Ms. Sadia Sadaf Gilani (IRS/BS-21), who at the time served as Member (Admn/HR) at FBR Headquarters, Islamabad. After a thorough investigation, she submitted her report on October 29, 2024, concluding that all charges had been substantiated. Subsequently, a Show Cause Notice was issued to Azhar Ansari on December 4, 2024, to which he submitted a denial of the allegations on December 23, 2024. Despite his written response and a personal hearing opportunity granted by the Secretary Revenue Division, the inquiry findings were upheld. After examining the full case record, the competent authority imposed two major penalties: recovery of the embezzled funds under Rule 4(3)(a), and dismissal from service with effect from May 24, 2020, under Rule 4(3)(e) of the Civil Servants (Efficiency & Discipline) Rules, 2020. The FBR emphasized that if the recovery cannot be fulfilled through salary or other dues payable to the officer, further legal channels will be pursued to retrieve the governmentâ€™s loss. This case marks a rare instance of such a high-ranking IRS officer facing strict disciplinary action, reinforcing the FBRâ€™s commitment to accountability and transparency within the IRS cadre. Muhammad Azhar Ansari (IRS/BS-20) retains the right to appeal under the Civil Servants (Appeals) Rules, 1977, within 30 days of the notificationâ€™s issuance. The IRS community is closely observing the case, as it sets a precedent for stringent enforcement of ethical conduct in Pakistanâ€™s revenue service.

Date: 2025-04-11

Details: Karachi, April 11, 2025 â€“ The Karachi Chamber of Commerce and Industry (KCCI) has proposed a significant tax reform aimed at revitalizing the real estate sector by suggesting income tax exemption on immovable properties valued up to Rs 10 million. This recommendation is part of the KCCIâ€™s comprehensive budget proposals for the fiscal year 2025â€“26, submitted to the government in advance of the upcoming federal budget. According to the KCCI, the real estate sector, which supports over 45 allied industries and is a major pillar of Pakistanâ€™s economy, is currently facing a slowdown. This is largely attributed to taxation measures introduced in Budget 2024â€“25, which the chamber argues have created financial hurdles for both property buyers and investors. In its proposal, the KCCI highlighted that the existing taxation policies have disproportionately impacted low- and middle-income groups, reducing their ability to purchase homes and making property ownership increasingly unattainable. As a result, investment in the sector has declined, market activity has slowed, and the sectorâ€™s overall contribution to economic growth has diminished. The KCCI stated, â€œProviding tax exemptions on properties valued up to Rs 10 million will stimulate demand, particularly among first-time homebuyers, and provide relief to financially constrained segments of society.â€ The chamber emphasized that this measure could serve as a catalyst for economic recovery by increasing affordability and encouraging greater participation in the housing market. Furthermore, the KCCI believes that targeted tax relief can help rebuild investor confidence, foster inclusive growth, and reduce the housing gap in urban centers like Karachi, where real estate remains a critical component of economic activity and employment. By addressing the barriers caused by heavy taxation, the KCCI aims to create a more balanced policy framework that supports not only fiscal objectives but also social equity and economic expansion. The chamberâ€™s proposals are expected to spark discussion among policymakers, particularly as the government seeks to balance revenue generation with the need to stimulate private sector growth and make housing more accessible to the general public.

Date: 2025-04-10

Details: LAHORE: Customs department has failed to prove allegation of smuggling against seizure of a vehicle due to re-punching of identical chassis number. The department was of the view that the owner of the vehicle had failed to produce any goods declaration or port documents to prove that the vehicle-in-question was not a smuggled one. The owner of the vehicle, on the other hand, took a firm stand that the vehicle was earlier completely burnt in an accident in which the trawler carrying 15 cars was caught fire and due to leakage of oil from the tanker many vehicles which were stuck at the back of the trawler were also burnt. The incident was also resulted into death of two persons and many were injured at the spot. He further pointed out that an FIR was also lodged in the relevant police station. Interestingly, a representative of the department also visited the said police station to verify the claim of the owner and to confirm whether the registration number of the subject vehicle was rightly mentioned in the FIR besides other details of the incident. The police station staff verified the incident. In addition, the owner of the vehicle also produced a verified certificate issued by the assembler, stating that all the vehicles were imported by it and all government dues such a Customs duty, sales tax etc, had already been paid on the vehicles. Accordingly, the invoice papers of the vehicle were also re-verified by the com, which confirmed availability of a copy of the same on the relevant file. The appellate forum also made sure that no registration of any other vehicle was available against the same chassis number, which established the fact that re-punching of the same chassis number on the same vehicle was definitely due to the reason that it was completely burnt during the incident. Furthermore, the owner also produced sale receipt against purchase of spare parts and accessories used for reconditioning of the said vehicle. As a result, the Customs tribunal directed the department to release the vehicle to its lawful owner. Copyright Business Recorder, 2025

Date: 2025-04-10

Details: ISLAMABAD: The Federal Tax Ombudsman (FTO) has strongly condemned the Federal Board of Revenue (FBR) for its prolonged inaction and lack of clarity regarding the taxation of crypto currency, recommending immediate steps to bring digital asset transactions within the formal tax regime in FY26 Finance Bill. In the next Finance Bill, the FBR should develop a clear and comprehensive tax policy on crypto currency, the FTO recommended FBR. The FTO is shocked to hear the FBRâ€™s Policy Wing response that, â€œthe concept of crypto currency is novel and will require expert opinion. The contents of complaint are under consideration and will be responded in due course of time after consulting the concerned agency.â€ The FTOâ€™s observations came in response to a complaint filed under Section 10(1) of the Federal Tax Ombudsman Ordinance, 2000. The complainant, a local crypto currency user, urged FBR to clarify its tax policy concerning the possession and income derived from virtual currencies. He highlighted that over 9 million Pakistanis are active crypto users, placing Pakistan 6th globally in terms of crypto currency adoption, yet the sector remains completely undocumented and untaxed. The complainant referenced the State Bank of Pakistanâ€™s stanceâ€”supported by a Sindh High Court judgment (C.P. No. 7146/2019)â€”that virtual currencies have not been declared illegal. He expressed willingness to pay tax on digital assets and insisted that FBR develop a framework to legally recognize and tax crypto currency holdings and profits. Despite multiple hearing notices issued on February 7, February 20, and March 20, 2025, the FBRâ€™s Policy Wing failed to attend the proceedings. While the department filed written comments asserting that crypto currency taxation is a policy matter outside FTOâ€™s jurisdiction, the FTO rejected this argument, stating that the issue falls within the purview of maladministration as defined in Section 2(3)(ii) of the FTO Ordinance, 2000. The FTO observed: â€œIt is the height of neglect, inattention, and ineptitude on the part of FBR that, instead of appreciating the initiative to bring this neglected area to the attention of tax authorities, the FTOâ€™s jurisdiction is being challenged on technical grounds.â€ The findings stressed that billions in commercial transactions are occurring via crypto currency platforms without any documentation or taxation, a significant loss to national revenue. The FTO emphasized that, in a time when Pakistan is struggling with widespread tax evasion, crypto taxation could offer a vital new revenue stream. The FTO has recommended that FBR to take the complainant and all relevant stakeholders on board. The FBR should develop a clear and comprehensive tax policy on crypto currency. The FBR should ensure the matter is addressed in the upcoming Finance Bill. The FBR should launch consultations with technical experts and relevant regulatory agencies to streamline this process. Furthermore, the FTO has directed the Member-IR (Policy) to investigate the absence of the Departmental Representative during the hearings and take appropriate action against the delinquent officer. This development marks a significant step toward formalizing the crypto economy in Pakistan and may pave the way for responsible, regulated, and revenue-generating use of digital currencies. Copyright Business Recorder, 2025

Date: 2025-04-10

Details: ISLAMABAD: The FBR has revised the procedure for monetary reward payment to the Customs officials in line with the performance management FBR transformation plan. In this regard, the FBR has issued an SRO 576(I)/2025 here on Wednesday. According to the notification, monetary reward shall be sanctioned to the Cadre Officers of Pakistan Customs Service (BS-17 and above) as per their ranking under the performance management FBR transformation plan approved by the Board. Copyright Business Recorder, 2025 INCOME TAX AUDIT IHC DISMISSES PLEAS AGAINST SELECTION Sohail Sarfraz Published about 5 hours ago ISLAMABAD: Islamabad High Court (IHC) has dismissed a series of writ petitions filed by taxpayers challenging their selection for income tax audit. In this regard, IHC has issued judgments in favour of the Federal Board of Revenue (FBR). Resultantly, the FBR will resume audits of taxpayers, who challenged this audit before the IHC. The taxpayers including poultry feed manufacturers contended that in view of Clause 105A of Part IV of the Second Schedule to the Income Tax Ordinance, 2001, the tax authorities are barred from selecting them for audit for a period of four years following the completion of their previous audit. In support of their argument, the petitioners placed reliance on the Federal Board of Revenueâ€™s (FBR) Circular dated 21.07.2022. The writ petitions were heard by a single-member bench of the Islamabad High Court, comprising of Justice Muhammad Azam Khan. The FBR and its field formations engaged Advocate Osama Shahid to plead their case. He raised a preliminary objection regarding the maintainability of the writ petitions, arguing that mere selection for audit does not constitute an actionable injury. As such, the petitions were not maintainable under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973. Further, it was contended by FBRâ€™s counsel that the taxpayers in question had been selected for audit prior to the enactment of Clause 105A. Accordingly, in view of the settled principles of statutory interpretation, laws cannot be applied retrospectively simply because they are beneficial in nature. Therefore, he submitted that the audit selections are legal and do not warrant interference by the IHC in the exercise of its constitutional jurisdiction. The IHC, through its judgment, concurred with the submissions of the FBRâ€™s counsel and dismissed the petitions being devoid of any merits. The IHC also noted that the Sindh High Court, through its judgment in Messrs Fazlee Sons (Pvt.) Ltd. Vs. Federation of Pakistan, Const. Petition (D) No. 6280/2024, has held that the FBRâ€™s Circular dated 21.07.2022 is not in consonance with Clause 105A of Part IV of the Second Schedule to the Income Tax Ordinance, 2001. Therefore, the period of four years is to be computed from the tax year that is selected for auditâ€”not the year in which the audit is concluded. In light of this judgment, it is expected that the tax department will resume audits of taxpayers whose cases had been stayed by the IHC during the pendency of these writ petitions. Copyright Business Recorder, 2025

Date: 2025-04-10

Details: Karachi, April 9, 2025 â€“ The Sindh Revenue Board (SRB) has announced significant amendments to the Sindh Sales Tax (SST) Special Procedure (Collection Agent) Rules, 2024, aimed specifically at food delivery platforms operating within the province. These changes, issued via an official notification, focus on revising the collection and declaration process for SST on services provided through digital food delivery platforms. Under the amended Rule 3, the SRB has clarified the responsibilities of collection agentsâ€”primarily food delivery platforms. These platforms are now required to charge and collect the applicable sales tax based on the gross value of services provided, which includes any commission charged by the platform itself. The tax collected must be clearly reported in Table-1 of Annex-C1 of the SST return (Form SST-03), along with the corresponding tariff heading of the relevant service. The SRB further directed that the collected tax should be reflected in row â€œ14bâ€ of the monthly SST return and e-deposited into the Sindh Governmentâ€™s designated account by the 15th of the month following the tax period. This must be done without any deductions or adjustments by the collection agent. Additionally, service providersâ€”such as restaurants and homechefsâ€”operating through these platforms are still obligated to file their returns under Chapter III of the Sindh Sales Tax on Services Rules, 2011, and declare the full tax liability in Annex-C. The system will automatically populate Table-II of Annex-C1 based on the platformâ€™s declarations, thereby enabling credit for the tax already collected. The SRB originally introduced the SST Special Procedure (Collection Agent) Rules on December 19, 2024, to streamline tax collection from digital platforms. The newly updated Table defines the rate of tax and collection ratio based on the registration status of the service provider. For registered restaurants, food delivery platforms must collect 8% SST without input tax credit when payments are made via digital methods, and 15% otherwise, with a 50% collection rate. For unregistered entities, platforms are responsible for collecting SST at 15%, with only 1% of that being actually payable by the platforms. These revised rules will take effect starting May 1, 2025. The SRB emphasized that the move aims to improve tax compliance and ensure transparency in transactions facilitated by digital platforms. With the growing reliance on such platforms, SRB is focusing on building a more robust and accountable tax ecosystem.

Date: 2025-04-09

Details: Islamabad, April 9, 2025 â€“ The Federal Board of Revenue (FBR) on Wednesday introduced new reward rules for officers within the Inland Revenue Service (IRS) and Pakistan Customs Service (PCS), but the move has been met with significant criticism from field formations. The FBR issued separate SROs No. 576 and 580 for PCS and IRS officers in BS-17 and above, detailing the framework under which rewards will be granted. These rules are part of the FBRâ€™s broader effort to implement the FBR Transformation Plan, 2024, and are expected to be incorporated into the statute within three days. The new rules state that â€œMonetary Rewards under the FBR Transformation Plan, 2024, shall be sanctioned to cadre officers of Inland Revenue (BS-17 and above) as per their ranking under the performance management regime approved in the FBR Transformation Plan.â€ However, both IRS and PCS officers have expressed strong opposition, arguing that the reward system is biased and based on favoritism. The Inland Revenue Service Officers Association (IRSOA) has particularly voiced concerns, claiming that the reward rules undermine the professional integrity and stability of the IRS. According to the IRSOA, the reward scheme unfairly targets the IRS, claiming that no other civil service in Pakistan is subject to such intrusive and discriminatory evaluation systems. The association believes that the IRS is being singled out for harsh treatment, which they deem unacceptable. One of the major points of contention is the subjectivity of the evaluation process under the new rules. The IRSOA highlighted that the reward system creates opportunities for personal biases to influence outcomes, with only a limited number of officers being eligible for top-tier rankings. Under the system, out of 50 officers, only 10 can be graded as category-A, which effectively labels the remaining 40 officers as corrupt. This arbitrary grading system, the IRSOA argues, imposes an unfair stigma and forces officers to accuse their peers of lacking integrity to meet evaluation criteria. The IRSOA also warned that the reward rules could have a demoralizing effect on officers, damaging morale and professional relationships within the FBR. The association expressed concern that such a system would further tarnish the reputation of the FBR, which already faces scrutiny due to its association with state revenue collection. In light of these concerns, the IRSOA has urged the FBR to reconsider the reward rules, calling for a more transparent and fair approach. They have asked the FBR to engage in meaningful dialogue with stakeholders to address their grievances and revise the rules to better support the integrity and functioning of the organization. According to the IRSOA, the current system is not a reform but rather an ill-conceived move that could worsen existing challenges.

Date: 2025-04-09

Details: KARACHI: In alignment with the reform priorities outlined under the IMFâ€™s Resilience and Sustainability Facility, CoRe, the countryâ€™s first alliance dedicated to sustainable packaging has submitted a policy proposal to the government ahead of the Federal Budget 2025â€“26. The Alliance has urged policymakers to unlock Pakistanâ€™s circular economy potential through tax reforms, financial incentives, and infrastructure development. The proposals were presented to Finance Minister Muhammad Aurangzeb and Climate Change Minister Musadik Masood Malik, reinforcing CoReâ€™s commitment to advancing a circular economy through public-private collaboration. As part of its submission, CoRe has called for a five-year income tax exemption for Packaging Recovery Organizations (PROs), removal of tariffs on recycling machinery and Reverse Vending Machines, and the introduction of GST exemptions for services related to sorting, collecting, and recycling waste. The Alliance also recommends that companies using recycled materials or meeting specific recycling benchmarks be offered tax rebates or other financial incentives. Furthermore, CoRe is seeking support from the State Bank of Pakistan to provide financing mechanisms for businesses involved in the recycling sector, particularly in developing infrastructure to convert plastic waste into fuel. Together, these measures aim to formalize Pakistanâ€™s informal recycling economy, promote sustainability, and attract green investment. These recommendations arrive at a critical time. The Asian Development Bank estimates that Pakistanâ€™s annual solid waste generation could climb to 42 million tons by 2030; far outpacing the nationâ€™s existing recycling capacity. Sheikh Waqar Ahmad, CEO and Founding Board Member of CoRe, emphasized, â€œCoReâ€™s recommendations are intended to support the governmentâ€™s broader sustainability agenda, which has advanced under a possible arrangement under the Resilience and Sustainability Facility as part of the Staff Level Agreement with the IMF.â€ He added, â€œThe budget 2025-26 is a key opportunity to introduce policies supporting waste management and these measures will drive economic growth through sustainable investments and a waste-free future.â€ Hammad Naqi Khan, CEO WWF-Pakistan and Board Member CoRe, stressed the need for policy-driven action, stating, â€œIncentivizing collection and recycling promotes circularity and is key to tackling Pakistanâ€™s waste challenges.â€ Babar Aziz Bhatti, CEO Green Earth Recycling and Chairperson of CoReâ€™s Extended Producer Responsibility Committee, added, â€œInvesting in collection and recycling infrastructure is key to reducing waste, generating green jobs, and driving sustainable development in Pakistan.â€ Copyright Business Recorder, 2025

Date: 2025-04-09

Details: ISLAMABAD: Federal Tax Ombudsman (FTO) has refused to entertain a taxpayerâ€™s complaint of non-payment of refund where proceedings of tax fraud are pending at the level of Federal Board of Revenue (FBR). According to an order of the FTO issued on Tuesday, admittedly, the complainant e-filed refund application for Tax Year 2024 on 12-11-2024, however, department has pleaded that proceedings against the taxpayers are pending finalization on the issue of fake flying invoices and claiming false input on the strength of these fake invoices issued by dummy and non-existent unit i.e. M/s WMA Brothers Pvt Ltd. The menace of fake & flying invoices cannot be treated as Sales Tax specific phenomenon it has very serious fallouts for direct taxation as well. Moreover, this relief forum cannot intervene in a case wherein tax fraud proceedings are pending on any account, FTO order said. Precisely, the Complainant filed return of income/statement of taxation by claiming refund of Rs15.012 million for Tax Year 2024. According to the AR the Complainant also e-filed refund application on 12-11-2024, however, despite repeated efforts of the Complainant, the tax department failed to pass order under Section 170(4) of the Income Tax Ordinance, 2001 (the Ordinance) within the stipulated time, hence this complaint. It was also shared by Regional Tax Office (RTO) that a show cause notice for suspension of sales tax registration has been issued by CIR Zone-II RTO Gujranwala as the complainant is involved in fake flying invoices and claiming false input on the strength of these fake invoices issued by dummy and non-existent unit i.e. MIs WMA Brothers Pvt Ltd. Moreover, a show cause notice has also been issued by the concerned unit officer on account of inadmissible, fake input tax amounting to Rs4,458,672. â€œThe investigation is closed and files consigned to record,â€ FTO added. Copyright Business Recorder, 2025

Date: 2025-04-08

Details: ISLAMABAD: Federal Minister for Commerce Jam Kamal Khan chaired a meeting with the Fruit Juice Council and leading manufacturers, including representatives from Pepsico and NestlÃ©, to discuss key challenges facing the industryâ€”particularly the need to support the formal sector against informal competition and address tariff-related concerns. The council members highlighted the growing threat posed by the informal sector, which undermines the formal industryâ€™s ability to meet global standards and expand export potential. They emphasised that without government support the formal sector would continue to face an uneven playing field. Minister Jam Kamal Khan expressed full agreement with the councilâ€™s concerns and stressed that empowering the formal industry is essential to increasing exports and aligning Pakistanâ€™s products with international standards. â€œOnly by strengthening our formal industry can we meet global benchmarks and unlock export potential,â€ he said. He also acknowledged the broader global challenges that pose risks to food security but noted that Pakistan remains one of the more sustainable nations capable of weathering these difficulties. The minister assured the participants that the government is committed to holding regular consultations with the industry to address their issues effectively. He welcomed the proposals presented and appreciated the industryâ€™s willingness to contribute toward national economic growth. Industry representatives affirmed that with appropriate government supportâ€” particularly in reducing tariff burdens and tackling informal sector encroachmentâ€” they could significantly boost exports. They pointed to strong demand in regions such as the Gulf, European Union, Central Asia, and the Americas, calling them high-potential markets for export of Pakistanâ€™s food and beverages. Copyright Business Recorder, 2025

Date: 2025-04-08

Details: KARACHI: The Karachi Tax Bar Association (KTBA) has formally raised concerns regarding the Federal Board of Revenueâ€™s recent mandate requiring HS Codes and standardised Units of Measure (UoM) in sales tax returns. In a letter addressed to FBR Chairman Rashid Mahmood Langrial, KTBA highlighted what they describe as â€œsignificant challenges for taxpayers and tax consultants alikeâ€ resulting from these new requirements. The letter pointed out that the HS Codes were originally developed as a five-digit system for international trade purposes. The association argued that extending this to eight digits for local trading is â€œincomprehensible and impracticalâ€ and potentially inconsistent with the Sales Tax Act, 1990. â€œAs per the Sales Tax Act, 1990 & relevant rules, the requirement for declaring HS Codes in tax returns or invoices is not explicitly provided for,â€ the letter stated, suggesting that the FBRâ€™s implementation lacks clear legislative backing. Furthermore the KTBA highlighted the FBRâ€™s mandate to use kilograms as the standard UoM in sales tax returns for both imports and local supply of goods providing several examples illustrating the practical difficulties: â€¢ Cotton T-Shirts: Imported in kg/piece but sold locally in piece/dozen. â€¢ Mobile Phones: Imported in box units but sold locally per piece. â€¢ Industrial Paint: Imported in gallons but sold locally in litre/kg. The tax bar has proposed several solutions, including: â€¢ Restricting HS Codes requirement to five digits to reduce compliance burdens. â€¢ Allowing flexibility in UoM declarations based on industry standards. â€¢ Restricting HS Codes in subsequent supplies of finished goods. â€¢ Prioritising â€œDescription of Goodsâ€ over HS Codes for taxation purposes â€¢ Making Annexure-H1 for stock position declaration operational in online systems. â€¢ Updating all Schedules under the Sales Tax Act to reflect relevant HS Codes. Meanwhile KTBAâ€™s President Ali Rahim expressed his willingness for further discussion, stating: â€œthey remain confident that KTBAâ€™s recommendations would lead to a more balanced and effective system for both the FBR and taxpayers.â€ Copyright Business Recorder, 2025

Date: 2025-04-08

Details: Sohail Sarfraz Published about 3 hours ago ISLAMABAD: The Federal Board of Revenue (FBR) has re-instated a custom official (Secretary FBR), who was suspended for putting pressure of influential persons on the Finance Minister for getting a favourable posting in Karachi. The FBR has shared the details of the case in a notification issued here on Monday. According to the notification, Finance Minister was approached by a certain influential person with the following message: â€œMinister sb. reminding you of my request. Thank you! Mr. Yawar Nawaz (PCS/BS-19) Additional Collector Customs: Present Posting: Secretary FBR. Preferred Posting: Collectorate of Customs (SAPT), Karachi; Collectorate of Customs Appraisement (West), Karachi; Collectorate of Customs (J1AP), Karachi and Collectorate of Customs (Exports), Karachiâ€œ, the message to the Finance Minister added. The FBRâ€™s notification said that whereas, this was a case of clear violation of Government Servants (Conduct) Rules, 1964 and FBRâ€™s following instructions issued regarding extraneous influence for â€œchoice postingâ€, vide circular dated 20.08.2024. The FBR said that it has been observed with grave concern that there is a rampant sub-culture of using extraneous influence for â€˜choice postingsâ€™ by the officers/ officials of FBR, particularly those seeking field assignments. Such sub-culture is eating at the very roots of integrity of the organization. Moreover, mid-level officers seeking choice postings through their influence/ network are creating a poor model of career choices for junior officers. Use of extraneous influence constitutes â€œmisconductâ€ under the Government Servants (Conduct) Rules, 1964 and the Civil Servants (E&D) Rules, 2020. â€œMisconductâ€ is a valid ground for â€œRemoval from Serviceâ€. In future any such act will result in immediate suspension of the concerned officer/official and shall lead to initiation of disciplinary proceedings under the relevant law/rules, FBR added. Accordingly, the officer was suspended vide Boardâ€™s Notification dated 25.02.2025 and a direct Show Cause Notice on the charge of â€œmisconductâ€ was also served upon the accused officer on 24.02.2025 under Rule-6 read with Rule-7 of the Civil Servants (E&D) Rules, 2020. Whereas, the accused officer subsequently furnished his reply to the Show Cause Notice and stated that â€œhe categorically denied the allegations of â€œMisconductâ€ mentioned in the notice and stated that he has not used extraneous influence for his choice posting in violation of FBRâ€™s instructions.â€ He further stated that â€œhis family is settled in Karachi and it has been quite tough for him to manage his personal and family affairs since he has been posted to FBR (HQs), Islamabad. This conundrum is also in the knowledge of his extended family members and it could be probable that someone from them might have approached some political quarters to request for his transfer without bringing this to his knowledge and without his tacit or express consent.â€ The accused officer has also provided an undertaking wherein he has solemnly pledged that â€œin future he will ensure that no member of his extended family will approach any political or any other quarter for requesting his transfer.â€ After having gone through the available record and facts of the case, the Authority is of considered opinion that since the accused officer has submitted an affidavit and has given a solemn assurance of his continued adherence to the official instructions as well as Government Servants (Conduct) Rules, 1964. Therefore, the benefit of doubt goes in favour of the officer and hence taking a lenient view, it has been decided to â€œexonerateâ€ the officer of the charge of â€œmisconductâ€ under Rule-7(e) of the Civil Servants (E&D) Rules, 2020. The officer is also re-instated into Government service and intervening period is to be treated as spent on duty, FBR added. Copyright Business Recorder, 2025

Date: 2025-04-08

Details: Karachi, April 8, 2025 â€“ In a decisive move to enforce tax regulations, the Medium Tax Office (MTO Karachi) has sealed an outlet of Divago, a prominent pharmacy chain in Pakistan, due to its failure to integrate its Point of Sale (POS) system with the Federal Board of Revenue (FBR). According to officials at MTO Karachi, the action was taken against the Divago outlet located at Jail Chowrangi, Shaheed-e-Millat Road, following repeated violations of mandatory POS integration laws. The operation was conducted after a thorough investigation revealed that Divago was not connected with the sales tax invoices, violating the FBRâ€™s digital reporting system. This lack of compliance resulted in substantial revenue losses to the national exchequer. MTO Karachi, a key revenue-collecting arm of the FBR, emphasized that all Tier-1 retailers are legally required to integrate their invoicing systems with the FBRâ€™s centralized POS system. This system is designed to capture real-time transaction data, ensuring transparency and reducing the scope for tax evasion. Despite these requirements, Divago failed to comply, triggering swift action from tax authorities. The sealed Divago outlet will remain closed until it settles all outstanding sales tax dues and fully integrates its POS system with the FBR Dashboard. Authorities have made it clear that reopening will only be permitted once full compliance is achieved. This enforcement effort by MTO Karachi serves as a stern warning to other businesses that continue to flout tax laws. With recent amendments to sales tax regulations, tax bodies now possess stronger authority to seal non-compliant outlets and curb fraudulent activities related to POS manipulation. MTO Karachi has reiterated its commitment to continue operations against defaulters. The message is loud and clear: retailers like Divago must embrace tax compliance or face serious consequences. By cracking down on such violations, MTO Karachi aims to foster a culture of accountability and contribute to a more transparent retail environment across Pakistan.

Date: 2025-04-08

Details: Islamabad, April 8, 2025 â€“ The Ministry of Industries and Production has proposed imposing a 20% Regulatory Duty on LED lighting products as part of the federal budget proposals for the fiscal year 2025â€“26. The aim of this move is to encourage local manufacturing and reduce reliance on imported LED items. The proposal was presented during a high-level budget planning meeting chaired by Special Assistant to the Prime Minister on Industries and Production, Haroon Akhtar Khan. The session focused on policy recommendations for industrial development, taxation reforms, and customs duty adjustments. Attendees included Secretary of the Ministry of Industries and Production, Saif Anjum, along with representatives from the Engineering Development Board (EDB) and the Small and Medium Enterprises Development Authority (SMEDA). The stakeholders evaluated key concerns facing the sector, including the import-export framework for raw materials and finished goods, as well as the current structure of Customs Duty (CD), Regulatory Duty (RD), and Additional Customs Duty (ACD). During the discussion, the Ministry emphasized the growing import volume of LED products, citing it as a contributing factor to the pressure on foreign exchange reserves. It proposed the new 20% duty as a tool to level the playing field for local LED manufacturers and attract investment into domestic production. Haroon Akhtar instructed officials to refine the proposals further and focus on practical measures that can stimulate industrial growth. He also suggested implementing a super tax to bring the national corporate tax regime closer to regional benchmarks. In alignment with the Prime Ministerâ€™s vision, the Special Assistant underlined the need to create a pro-business environment and extend support to local enterprises, particularly SMEs. He directed the Ministry to work with stakeholders to identify and remove bureaucratic and structural barriers affecting industrial expansion. The Ministry reiterated its commitment to promoting sustainable development and innovation, particularly in energy-efficient technologies like LED lighting. With rising global demand for eco-friendly solutions, the government sees the domestic LED sector as a potential growth driver. The final decision on the proposed duty will be taken during the upcoming federal budget discussions.

Date: 2025-04-08

Details: Islamabad, April 8, 2025 â€” In a significant policy shift, the Federal Board of Revenue (FBR) has issued new criteria for the assessment of sales tax on sugar supplies across the country. The move comes in response to ongoing fluctuations in market prices and aims to ensure a fairer and more transparent taxation mechanism for the sugar industry. The FBR, through SRO 577(I)/2025 dated April 8, 2025, has laid out a revised formula for determining the value of domestically produced white crystalline sugar for sales tax purposes. According to the notification, the taxable value will now be based on the average national retail price of refined sugar, as published by the Pakistan Bureau of Statistics (PBS) on its Sensitive Price Indicator (SPI) before the 1st and 16th of each month. From this average price, a fixed amount of sixteen rupees will be subtracted to determine the taxable value for the respective fortnight. This revised mechanism replaces the earlier fixed valuation method outlined in SRO 1027(I)/2021, dated August 16, 2021. Officials within the FBR stated that the older system of assigning a static value for sugar had become outdated, especially in light of recent volatility in sugar prices. The new approach, which links tax valuation to real-time market data, is expected to reduce discrepancies and improve revenue collection without overburdening stakeholders. Sources at the FBR confirmed that sugar prices had been fluctuating significantly over the past few months due to a mix of supply chain issues, production costs, and seasonal demand. These variations prompted the FBR to revise its strategy, opting for a dynamic valuation model that more accurately reflects the actual market conditions of the sugar sector. The FBR emphasized that this updated policy is designed to strike a balance between ensuring government revenue and addressing the concerns of sugar producers and traders. By aligning sales tax calculations with market realities, the FBR hopes to promote better compliance and greater transparency in sugar taxation. The sugar industry, one of the key contributors to Pakistanâ€™s agricultural economy, will now need to adjust its reporting and accounting processes in accordance with the new FBR guidelines.

Date: 2025-04-08

Details: Karachi, April 8, 2025 â€“ The Federal Board of Revenue (FBR) has imposed a major penalty of removal from service on Arshad Ali Nasir, an Inspector Inland Revenue (BS-16) posted at Regional Tax Office (RTO-I) Karachi, for his prolonged unauthorized absence from duty. According to an official statement, disciplinary proceedings were initiated against the Inspector after he failed to resume duties following multiple sanctioned leave extensions abroad. Initially granted 356 days of Ex-Pakistan leave from June 28, 2018, to June 27, 2019, his leave was extended twice, eventually expiring on June 30, 2021. However, the Inspector did not return to duty from July 1, 2021, and remained absent without authorization since then. An inquiry was conducted by Ms. Shazia Abid, Commissioner Inland Revenue (CIR), RTO-I, Karachi, who concluded that the accused Inspector failed to provide convincing medical documentation to justify his continued absence. Although he claimed to suffer from Sciatica and cited the need for surgery, no credible medical evidence or recommendation supported this assertion. Notably, the only medical procedure performed was a nerve root block back in 2018. Furthermore, the Inspector traveled to the United Kingdom with his family in October 2020â€”a move inconsistent with his claims of being unfit for air travel. A certificate from a UK-based doctor submitted in support was deemed inadmissible, as it was printed on plain paper and not issued by a recognized medical institution, violating Rule 10(6) of the Efficiency & Discipline Rules, 2020. Despite filing a leave extension application for 2021â€“22, no decision was conveyed by the authorities, highlighting procedural lapses. Nevertheless, the inquiry officer concluded that the Inspectorâ€™s absence violated Civil Servants (Efficiency & Discipline) Rules, 2020. After reviewing the inquiry report, written responses, and verbal submissions made via video link, the FBR concluded that the charges stood proven beyond doubt. The Inspector showed no intention to resume his responsibilities and thus warranted the major penalty. Effective immediately, the FBR has ordered the removal from service of Arshad Ali Nasir, Inspector Inland Revenue, under Rule 16(7)(b)(ii). The entire period of unauthorized absence from July 1, 2021, onward will be treated as Extraordinary Leave (EOL) without pay, and the penalty serves as a warning to ensure discipline and accountability within the service.

Date: 2025-04-04

Details: Karachi, April 4, 2025 â€” Pakistan Customs has officially revised the customs values of old and used autoparts to align them with prevailing international market rates. The Directorate General of Customs Valuation announced this update through Valuation Ruling No. 1994 of 2025. The revised valuations are aimed at ensuring fair tax collection while discouraging under-invoicing and smuggling of autoparts. The move comes in response to multiple representations received by the Directorate from various stakeholders, including importers and trade associations, who had called for a reassessment of customs values. These appeals emphasized that existing customs valuations did not reflect the actual conditions in the global market, particularly for old and used autoparts. Taking these concerns into account, Pakistan Customs initiated a detailed exercise under Section 25A of the Customs Act, 1969. As part of the process, consultative meetings were held on November 27 and December 26, 2024. The sessions were attended by key stakeholders such as members of the Old & Used Auto Parts Importers Association and the Sindh Auto Parts Scrap Importers & Dealers Association (SAPSIDA), as well as local manufacturers. Stakeholders stressed that the value of used autoparts significantly varies based on the degree of wear and tear, operational efficiency, and age. They pointed out that such items are usually procured at scrap rates in the international market. They cautioned that inflated customs values could potentially disrupt legal trade flows, reduce overall imports, and eventually diminish government revenue. In order to make an informed decision, Pakistan Customs reviewed 90 days of import data and conducted a comprehensive market survey. These findings were examined in line with Office Order No. 171/2014 and the provisions of Section 25(7) and 25(9) of the Customs Act. The revised customs values now provide a more accurate and transparent benchmark for assessing duties and taxes on old and used autoparts. The revised values cover a wide range of items, including diesel and petrol engines, gear boxes, engine blocks, compressors, brake assemblies, axles, and various other autoparts. For example, a 3-cylinder diesel engine with a head and gear box will now be assessed at US$ 265 per unit, while a 6-cylinder diesel engine without a head or gear box will be valued at US$ 625 per unit. These adjustments aim to provide consistency and clarity in customs valuation processes. Customs officials reiterated that these revised values are essential to curb under-invoicing practices and to ensure that the legal importers of autoparts are not undercut by illicit trade. By updating the customs values of used autoparts, Pakistan Customs intends to facilitate genuine trade while boosting state revenue. With the autoparts industry playing a significant role in the countryâ€™s automotive and repair sectors, these adjustments are likely to have wide-reaching implications. Traders, importers, and even consumers should take note of the new customs benchmarks when dealing in old and used autoparts.

Date: 2025-04-04

Details: Karachi, April 4, 2025 â€“ In a significant move to streamline import assessments, the Directorate General of Pakistan Customs has issued Valuation Ruling No. 1995 of 2025, establishing updated customs values for ammunition. This decision directly impacts how duties and taxes are calculated at the import stage and aims to ensure greater uniformity and transparency in valuation practices. The ruling, issued under Section 25A of the Customs Act, 1969, provides new customs benchmarks specifically for ammunition of various calibers and origins. These customs values are to be treated as the minimum threshold for duty assessment until revised or rescinded by the competent authority. The ruling will remain in effect unless formally amended under the specified legal provisions. The customs valuation process was initiated following repeated concerns from stakeholders over the existing valuation levels of ammunition, which were deemed higher than prevailing market realities. A formal meeting was held with stakeholders on January 31, 2025, where importers and industry representatives presented their viewpoints. Participants were asked to submit supporting import documentation to justify the revision in ammunition values. In order to determine the appropriate customs values, the Directorate of Customs carried out a comprehensive analysis. This included evaluating ninety days of import data, cross-referencing declared values, and conducting market surveys. Multiple valuation methods under Section 25 of the Customs Act, 1969 were considered in sequence. Due to a lack of consistent documentary evidence, the transaction, identical, and similar goods methods were found insufficient. Eventually, the Directorate used the computed and fallback methods under Sections 25(7) and 25(9) to finalize the customs values for ammunition. The new valuation ruling provides specific customs values for different calibers of ammunition, including .30 bore, 9mm, and .223 Rem cartridges, originating from China and other countries. These values will now serve as the baseline for customs duty assessments. In instances where the declared value exceeds the determined customs value, customs officers are instructed to apply the higher declared value. Traders who are dissatisfied with this ruling may file a revision petition within 30 days under Section 25D of the Customs Act. Customs officials are advised to implement the new values strictly and report any anomalies to the Directorate. This step by Pakistan Customs reinforces its commitment to regulatory clarity and equitable valuation of sensitive imports such as ammunition.

Date: 2025-04-04

Details: The Federal Board of Revenue (FBR) has detailed the procedure for importing vehicles into Pakistan under various government schemes aimed at assisting overseas Pakistanis. These schemesâ€”Personal Baggage, Transfer of Residence, and Giftâ€”are designed to facilitate the import of vehicles for eligible individuals. The FBR outlines specific regulations and eligibility requirements for each category, ensuring compliance and transparency in the import process. According to the official FBR procedure, the term â€˜vehicleâ€™ is broadly defined to include passenger cars, buses, vans, trucks, pick-ups, and 4Ã—4 vehicles. For the purposes of these schemes, â€œfamilyâ€ includes parents, spouses, and children, but excludes minors under eighteen years of age. The document also defines a â€˜Pakistan Nationalâ€™ as a citizen of Pakistan living abroad, including those with dual nationality or foreign nationals of Indo-Pakistani origin who hold a Pakistani origin card. However, students receiving remittance from Pakistan and non-earning family members are excluded from eligibility for vehicle importation. The import of vehicles can be done under three different schemes: 1. Personal Baggage Scheme: Under this scheme, individuals who have stayed abroad for at least 180 days in the last seven months are eligible to import a vehicle. Importation under personal baggage is also subject to restrictions based on the age of the vehicleâ€”vehicles older than five years are not allowed under this scheme. The condition does not apply to second-hand or used bulletproof vehicles, which can be imported under the same scheme. Additionally, vehicles with engine capacities of 1800 cc or above, or 4Ã—4 vehicles, require payment of duties and taxes using foreign exchange. 2. Transfer of Residence Scheme: This scheme allows Pakistanis returning to their homeland to bring vehicles after a stay abroad of at least 700 days in the past three years. Similar to the personal baggage scheme, vehicles older than five years are prohibited, but used bulletproof vehicles are exempt from this restriction. If importing a motorcycle or scooter, the same conditions for vehicles apply. 3. Gift Scheme: Vehicles can be gifted to a family member residing in Pakistan under this scheme. The vehicleâ€™s age must comply with the same regulations as the personal baggage and transfer of residence schemes, with cars older than three years being prohibited. The gifting process requires the submission of necessary documents, including the National Identity Card (NIC) of the recipient, the purchase receipt, and the bill of lading. Eligibility and Conditions For all three schemes, certain conditions must be met. Vehicles over five years old cannot be imported under the gift, personal baggage, or transfer of residence schemes, with the exception of second-hand bulletproof vehicles. Pakistanis must ensure that they have met the minimum stay requirements abroad and adhere to the specific guidelines outlined for importing vehicles under these schemes. Another important rule is that a vehicle imported under these schemes must be released to the legal heirs in case of the importerâ€™s death. Additionally, the importation process includes filing a Goods Declaration under Section 79 of the Customs Act, along with several required documents such as the purchase receipt, bill of lading, and attested photocopy of the passport or Pakistan Origin Card (POC). Import Restrictions for Non-Privileged Foreign Nationals Foreign nationals who are not considered â€œprivilegedâ€ but are in Pakistan under a contract of service with any local or foreign firm, or government authority, may also import vehicles under personal baggage provisions. However, certain restrictions apply to the sale of these vehicles once they have been brought into Pakistan. Re-export of Vehicles In cases where a vehicle is brought into Pakistan in contravention of the import policies, the FBR may permit re-export, but this is only allowed when there are no violations of the Import Policy Order. If the vehicle was imported unlawfullyâ€”such as with forged documents or if it is stolenâ€”the FBR will confiscate the vehicle, and the importer will face penalties. Re-export options will not be available for such vehicles. Importing vehicles into Pakistan under these schemes can provide a convenient way for overseas Pakistanis to bring their vehicles back to their home country, but the process requires careful adherence to the regulations. Understanding the eligibility, restrictions, and procedures can help ensure that the importation process runs smoothly.

Date: 2025-04-02

Details: Karachi, April 2, 2025 â€“ The Federal Board of Revenue (FBR) has released its latest report, revealing that the automotive sector, particularly Original Equipment Manufacturers (OEMs), leads in availing customs duty relief. According to the report, the cumulative customs duty expenditure for the top ten categories reached Rs. 445,122.88 million, accounting for 82% of the total customs duty expenditure. This figure represents 12% of the total tax expenditure for the fiscal year 2022-23. The FBR highlighted that the customs duty relief provided under various exemption orders and schedules significantly benefited multiple sectors, with the automotive sector emerging as the primary recipient. The OEMs in the automotive sector alone received customs duty relief worth Rs. 93,849 million, making it the leading category in terms of exemptions. Additionally, vendors within the automotive sector also benefited substantially, with customs duty exemptions totaling Rs. 38,344 million. Following the automotive sector, the poultry and textile industries, along with other miscellaneous sectors, availed customs duty relief amounting to Rs. 83,763 million under Part III of the Fifth Schedule of the Customs Act. Similarly, relief was extended to local industries involved in the manufacturing of stationery, electrical capacitors, pesticides, and other essential products, which received Rs. 38,344 million in customs duty exemptions. Other significant beneficiaries included Export Oriented Units (EOUs), which received customs duty relief of Rs. 34,465 million, and essential edible items such as pulses and oil products, which accounted for Rs. 34,069 million in exemptions. The pharmaceutical sector also secured customs duty relief of Rs. 34,036 million through the import of active pharmaceutical ingredients. Furthermore, customs duty exemptions for the import of plant, machinery, and capital goods amounted to Rs. 32,438 million, facilitating industrial growth. The report also underscored the impact of Free Trade Agreements (FTAs), particularly with China, which resulted in customs duty exemptions worth Rs. 32,327 million. Additionally, Export Processing Zones (EPZs) benefited from Rs. 23,488 million in customs duty relief, promoting export-oriented industrial activities. The FBR emphasized that the customs duty relief mechanisms play a crucial role in fostering economic growth by reducing costs for key industries. With the automotive sector leading the charge, customs duty exemptions continue to shape the economic landscape by encouraging investment and industrial expansion across multiple sectors.

Date: 2025-04-01

Details: Karachi, April 1, 2025 â€“ Property transactions in Karachi are subject to various tax regulations, making the process intricate for buyers and sellers alike. As the largest financial and commercial center of Pakistan, Karachi boasts a dynamic real estate market, with property prices often exceeding those in other major cities. Understanding the tax implications of property transactions in Karachi is crucial for anyone involved in real estate dealings. The tax obligations for buying and selling property in Karachi are determined based on valuations set by the Federal Board of Revenue (FBR). The taxable amount cannot be lower than the FBR-assigned property value; however, if a transaction is declared at a higher value, the tax liability increases accordingly. The FBR has defined property valuation benchmarks through SRO 1724(I)/2025, issued on October 24, 2024, and SRO 144(I)/2025, updated on February 11, 2025. Tax Rates on the Sale of Property in Karachi For individuals selling property in Karachi, the applicable tax rates vary based on their status in the Active Taxpayers List (ATL): â€¢ If the seller is on the ATL, the tax rate is 3% when the total consideration received is up to Rs 50 million. â€¢ If the seller files their tax return after the deadline but appears on the ATL after paying the surcharge, the tax rate rises to 6%. â€¢ For non-filers, the tax rate is significantly higher at 10%, even if they submit their return after the deadline. For properties valued between Rs 50 million and Rs 100 million: â€¢ ATL sellers face a 3.5% tax rate. â€¢ Late filers are subject to a 7% tax rate. â€¢ Non-filers must pay a 10% tax rate. For properties exceeding Rs 100 million: â€¢ The tax rate for ATL sellers is 4%. â€¢ Late filers pay 8%. â€¢ Non-filers continue to face a 10% tax rate. Tax Rates on the Purchase of Property in Karachi Buyers in Karachi also have to comply with tax obligations when acquiring property: â€¢ For properties valued up to Rs 50 million, the tax rate is 3% for ATL individuals, 6% for late filers, and 12% for non-filers. â€¢ If the propertyâ€™s fair market value falls between Rs 50 million and Rs 100 million, the tax rates are 3.5% for ATL buyers, 7% for late filers, and 16% for non-filers. â€¢ For properties exceeding Rs 100 million, the tax rate increases to 4% for ATL individuals, 8% for late filers, and a substantial 20% for non-filers. Conclusion Navigating property taxes in Karachi requires careful attention to FBR regulations. The distinction between active taxpayers, late filers, and non-filers significantly impacts the financial burden on buyers and sellers. With Karachiâ€™s property market continuing to grow, staying updated on taxation policies is essential for making informed real estate decisions.

Date: 2025-04-01

Details: Karachi, April 1, 2025 â€“ The Federal Board of Revenue (FBR) has achieved an unprecedented milestone by recording the highest-ever number of Active Taxpayers in Pakistanâ€™s history. According to the latest Active Taxpayers List (ATL) updated until March 31, 2025, an astounding 6.67 million taxpayers have been officially registered, surpassing the previous record of 5.34 million recorded on November 1, 2024. The surge in Active Taxpayers is a direct result of FBRâ€™s aggressive policy measures aimed at enforcing compliance and discouraging tax evasion. With a combination of stringent penalties, legislative reforms, and real-time monitoring, the government has effectively expanded Pakistanâ€™s tax base, ensuring greater transparency in financial transactions. FBRâ€™s Tough Measures to Enforce Compliance The FBR has introduced a series of decisive actions targeting non-filers, preventing them from engaging in critical financial activities. Under the latest amendments in tax laws, individuals who fail to file their tax returns will face severe restrictions, including: 1. Vehicle Registration Ban â€“ Non-filers are prohibited from purchasing, booking, or registering new motor vehicles. The FBR has instructed automakers and excise departments to enforce these restrictions strictly. 2. Property Transactions Halted â€“ Non-taxpayers are barred from buying, selling, or transferring high-value properties. Property registrars and revenue offices have been directed to verify ATL status before approving transactions. 3. Banking and Investment Limitations â€“ Non-filers are restricted from opening new bank accounts, except for basic â€œAsaanâ€ accounts. Additionally, the FBR has ordered brokerage firms and financial institutions to block stock market and mutual fund investments for individuals not listed in the ATL. 4. Utility & Telecom Restrictions â€“ Persistent non-filers face potential suspension of mobile SIM cards and utility connections. Moreover, those failing to comply with tax regulations may also face travel restrictions on international departures. Daily Updates to the Active Taxpayers List In a major overhaul of its taxation system, the FBR has transitioned from annual to daily ATL updates, ensuring that taxpayers who submit their returns are added to the list immediately. This reform not only incentivizes prompt compliance but also streamlines financial operations by offering businesses and individuals a real-time verification mechanism. Legislative Measures to Strengthen Pakistanâ€™s Tax Base The government is working closely with the National Assembly to introduce the Tax Laws (Amendment) Bill, 2024, designed to impose even tougher restrictions on non-compliant individuals. The bill aims to eliminate loopholes, expand the tax base, and maximize revenue collection. Despite the strict enforcement measures, the FBR has ensured exemptions for certain groups, including: â€¢ Overseas Pakistanis with National Identity Cards for Overseas Pakistanis (NICOPs) â€¢ Students and minors â€¢ Individuals traveling abroad for religious purposes, such as Hajj or Umrah FBRâ€™s Vision for a Stronger Economy The exponential rise in Active Taxpayers reflects the governmentâ€™s unwavering commitment to fostering a transparent, efficient, and equitable tax system. By combining modern technology, legislative reforms, and strict enforcement, the FBR is playing a pivotal role in strengthening Pakistanâ€™s economy. With these proactive measures, Pakistan is witnessing a financial transformation that will enhance tax compliance, curb evasion, and contribute to sustainable economic growth. As the number of Active Taxpayers continues to rise, the nation moves closer to achieving a robust, self-sustaining financial system that benefits all sectors of society.

Date: 2025-03-30

Details: Islamabad, March 30, 2025 â€“ The Federal Board of Revenue (FBR) must achieve a monthly tax collection of Rs 1.50 trillion during the last quarter (April â€“ June) to successfully meet its annual fiscal year 2024-25 target. With only three months remaining in the financial year, the FBR faces mounting pressure to bridge the revenue shortfall and meet its ambitious tax collection goals. At the beginning of the fiscal year, the revenue collection target was set at Rs 12.913 trillion. However, during the first nine months (July to March), the FBR managed to collect only Rs 8.46 trillion, leaving a substantial gap of Rs 4.45 trillion to be covered in the last quarter. This means the FBR now requires a monthly collection of Rs 1.50 trillion to hit the initial target. The provisional figures indicate that the FBRâ€™s tax collection from July to March 2024-25 accounts for approximately 66% of the original target. Given this shortfall, reports suggest that the government, in coordination with the International Monetary Fund (IMF), has revised the tax collection target downward to Rs 12.334 trillion. Even with this adjustment, the FBR still needs to collect Rs 3.87 trillion in the final three months, requiring a minimum monthly collection of Rs 1.29 trillion. Adding to the challenge, the FBR has experienced a shortfall of Rs 703 billion in the first nine months of the fiscal year. The original collection target for this period was Rs 9.17 trillion, but the actual revenue collected fell short, further intensifying the pressure on tax authorities. Despite these hurdles, the FBR has shown a growth of 26% in tax collection compared to the previous fiscal year. In the July-March period of FY24-25, the FBR successfully collected Rs 8.464 trillion, marking a significant increase from the Rs 6.71 trillion collected during the same period last year. In March 2025 alone, the FBR provisionally collected Rs 1.12 trillion, missing the assigned target of Rs 1.22 trillion by Rs 100 billion. This revenue gap highlights the urgency of improving collection strategies to ensure the FBR meets its fiscal year target. As the financial year nears its conclusion, all eyes remain on the FBRâ€™s ability to overcome these challenges and achieve its revised collection target.

Date: 2025-03-29

Details: Karachi, March 29, 2025 â€“ The Federal Board of Revenue (FBR) has initiated a thorough audit of exporters following a notable decline in income tax collection for February 2025. The move aims to assess tax compliance among exporters and address discrepancies in revenue collection. According to provisional data from a tax office in Karachi, the collection of advance income tax from exports fell by 16%, amounting to Rs 1.47 billion, compared to Rs 1.75 billion in the same month of the previous fiscal year. This decline has prompted the FBR to scrutinize exporters more closely. Sources within the FBR revealed that the audit was initiated due to a contradiction between tax revenues and export earnings. The State Bank of Pakistan (SBP) reported a 2.37% rise in export receipts, which increased to $2.59 billion in February 2025 from $2.53 billion in February 2024. The inconsistency between growing exports and falling tax collection raised concerns within the FBR, leading to an extensive review of exportersâ€™ financial records. The FBR highlighted that significant amendments were made in Section 154 of the Income Tax Ordinance, 2001, through the Finance Act, 2024. Previously, tax collected under Section 154 at a rate of 1% of export proceeds was treated as the final tax on exportersâ€™ income. However, with the latest amendment, this tax is now considered a minimum tax, compelling exporters to declare their full income and assets. Tax experts explained that the removal of the final tax regime aims to increase transparency and prevent underreporting of earnings by exporters. The FBR believes this policy shift may have contributed to lower tax compliance, necessitating an audit to ensure exporters meet their tax obligations. Further analysis of advance tax collections from January to February 2024-25 also revealed modest growth. The revenue under this category increased by only 2%, reaching Rs 13.68 billion, compared to Rs 13.46 billion in the corresponding period of the previous fiscal year. Meanwhile, data from the Pakistan Bureau of Statistics (PBS) indicated a positive trend in overall exports. During July to February 2024-25, exports rose by 8.42%, reaching $22.07 billion, up from $20.36 billion in the same period of the last fiscal year. With the ongoing audit, the FBR aims to ensure that all exporters comply with the revised tax regulations and contribute fairly to national revenue.

Date: 2025-03-28

Details: March 28, 2025 KARACHI, March 28, 2025 â€“ The Government of Pakistan has revised the customs valuation for lead-acid batteries, bringing changes to the import assessment process. The Directorate General of Customs Valuation issued a new ruling No. 1991 of 2025 under Section 25A of the Customs Act, 1969, replacing the previous valuation from 2017. The updated valuation, determined after extensive consultations with industry stakeholders, was finalized following a meeting on March 17, 2025. Officials examined import data, market trends, and pricing disparities before setting new customs values for different categories of lead-acid batteries. Revised Customs Valuation for Batteries The new valuation applies to various types of lead-acid batteries, including those used in automobiles, telecommunications, solar power systems, and uninterruptible power supply (UPS) units. Given the importance of batteries in multiple sectors, these adjustments are expected to impact pricing and import duties. Customs authorities analyzed 90 daysâ€™ worth of import records and conducted market surveys to determine fair customs values. The transaction value method under Section 25(1) was deemed inapplicable, as declared import prices did not align with market realities. Consequently, authorities relied on market-based assessments to arrive at the new valuations. Impact on Imports and Local Market Pakistanâ€™s demand for batteries has grown due to increasing reliance on backup power solutions and renewable energy sources. The revised customs valuation aims to ensure transparency and prevent undervaluation practices that could distort the market. Importers will now have to adjust their pricing structures accordingly. For air shipments, additional freight costs will be factored into assessments. Moreover, in cases where invoice values exceed the newly determined customs valuation, the higher value will be applied for duty calculation. Customs officials emphasized that the revised valuation ensures fair tax collection and prevents revenue losses. The new ruling will remain in effect unless revised or rescinded. Businesses dealing in batteries are advised to review the updated customs values and comply with the new import assessment framework. As Pakistan continues to experience a surge in demand for energy storage solutions, the valuation changes for batteries highlight the governmentâ€™s efforts to regulate import pricing and maintain market stability.

Date: 2025-03-28

Details: March 28, 2025 Islamabad â€“ The Federal Board of Revenue (FBR) has officially transferred several senior officers of Pakistan Customs Service (PCS) to the newly established Strategic Tariff and Revenue Analysis Wing (STRAW) as part of its restructuring efforts. The move is aimed at enhancing revenue analysis and improving taxation strategies in Pakistan. According to a notification issued by the FBR, the following customs officers have been reassigned to STRAW: 1. Mukarram Jah Ansari (Pakistan Customs Service/BS-22) has been transferred and posted as Director General-I, STRAW, FBR HQ, Islamabad, from Member (Admin Pool). 2. Muhammad Aamer (Pakistan Customs Service/BS-21) has been appointed as Director General (Special Initiatives â€“ Customs), FBR HQ, Islamabad (stationed at Lahore), previously serving in the Admin Pool. 3. Dr. Fareed Iqbal Qureshi (Pakistan Customs Service/BS-21) has been posted as Director General-II, STRAW, FBR HQ, Islamabad (stationed at Karachi), from Member (Admin Pool). 4. Ahmad Rauf (Pakistan Customs Service/BS-21) has been transferred as Director General-III, STRAW, FBR HQ, Islamabad (stationed at Lahore), from Member (Admin Pool). 5. Ms. Saima Shehzad (Pakistan Customs Service/BS-21) has been posted as Director General-IV, STRAW, FBR HQ, Islamabad (stationed at Lahore), from Member FBR HQ. 6. Muhammad Saleem (Pakistan Customs Service/BS-21) has been appointed as Director General-V, STRAW, FBR HQ, Islamabad, from the Admin Pool. Establishment and Objectives of STRAW The FBR recently announced the formation of STRAW, marking a pivotal step in improving revenue assessment and taxation policies. The decision to establish STRAW was approved during an FBR meeting held on March 7, 2025. This specialized division is designed to function separately for Inland Revenue and Pakistan Customs, focusing on revenue collection analysis, industry-specific taxation issues, and jurisdictional performance. Key Functions of STRAW Operating under the direct supervision of Member-Policy (Inland Revenue/Customs), STRAW will focus on the following critical areas: 1. Revenue Analysis: Evaluating taxation trends and revenue efficiency within various industries. 2. Tax Compliance Monitoring: Conducting structured assessments of taxpayer compliance and identifying potential risk areas. 3. Sector-Specific Studies: Assessing taxation policies for various industries to enable data-driven policymaking. 4. Legislative Recommendations: Proposing legal amendments based on in-depth financial evaluations to optimize revenue collection. 5. Operational Assessments: Conducting evaluations of budget proposals, jurisdictional performance, and operational effectiveness. 6. Confidentiality Assurance: Ensuring that all officers assigned to STRAW maintain strict confidentiality in handling taxation data and analysis reports. The FBR anticipates that the introduction of STRAW will significantly improve fiscal policy formulation, making Pakistanâ€™s tax system more effective and transparent.

Date: 2025-03-28

Details: March 28, 2025 Islamabad, March 28, 2025 â€“ In a strategic move to strengthen revenue collection and combat illicit trade practices, the Federal Board of Revenue (FBR) has officially established the Directorate General of Special Initiatives â€“ Customs. This initiative is aimed at reinforcing measures to eliminate revenue leakages and improve the overall efficiency of Pakistanâ€™s customs operations. According to an official statement issued on Friday, the FBR has set up the office of the Director General (Special Initiatives â€“ Customs) along with two Directors (Special Initiatives â€“ Customs) at FBR Headquarters. Their primary role will be to collaborate with field formations, identify weaknesses in the revenue collection system, and propose effective solutions to counter challenges such as mis-declaration, under-invoicing, and smuggling. The FBR recognizes that systemic inefficiencies within the Customs framework have been a persistent cause of revenue loss to the national exchequer. The establishment of this new Directorate is expected to remove bureaucratic bottlenecks, streamline processes, and introduce modern methodologies to enhance tax collection efforts. The Director General (Special Initiatives â€“ Customs) will also liaise with various Ministries, Divisions, and Departments to ensure seamless coordination on Customs-related matters. Key Functions of the Directorate General of Special Customs Initiatives 1. Coordination and Information Exchange: The Director General and Directors (Special Initiatives â€“ Customs) will maintain a structured information-sharing mechanism between field formations, government bodies, and provincial authorities to improve Customs operations. 2. Identifying Revenue Leakages: A core responsibility of the new Directorate will be to detect and analyze loopholes within the revenue collection system and recommend effective countermeasures to the FBR. 3. Preventing Mis-Declaration and Under-Invoicing: By devising stringent policies and preventive mechanisms, the Directorate aims to curb mis-declaration and under-invoicingâ€”two of the major factors contributing to revenue loss in Customs operations. 4. Capacity Building and Training: The Directorate will work closely with the Customs Academy Pakistan to develop specialized training programs, workshops, and awareness sessions for Customs officials to enhance their ability to detect and counter fraudulent activities. 5. Reporting to Member Customs-Operations: The Director General will directly report to Member Customs-Operations, ensuring a streamlined and hierarchical approach to implementing the proposed reforms. With the establishment of this new Directorate, the FBR aims to reinforce Customs operations, enhance transparency, and optimize revenue collection. These efforts will play a crucial role in strengthening Pakistanâ€™s fiscal stability by eliminating inefficiencies and tackling illicit trade practices head-on.

Date: 2025-03-28

Details: March 28, 2025 Karachi, March 28, 2025 â€“ The Federal Board of Revenue (FBR) has reported a remarkable 503% surge in capital gain tax (CGT) collection on a year-on-year (YoY) basis for February 2025, reflecting an unprecedented rise in market activity and investor participation. According to provisional data, the collection of CGT surged to over Rs 3 billion in February 2025, compared to just Rs 500 million recorded in the same month last year. This dramatic increase signals growing capital market transactions and enhanced revenue mobilization efforts by the FBR. Additionally, during the first eight months (July â€“ February) of the fiscal year 2024-25, the FBR reported an impressive 105% increase in CGT collection. The cumulative revenue from CGT climbed to Rs 18.75 billion, significantly higher than the Rs 9.20 billion collected during the corresponding period of the previous fiscal year. Stock Market Boom Drives CGT Growth The massive increase in CGT collection has been attributed to the ongoing bullish trend in the Pakistan Stock Exchange (PSX). Market analysts note that the KSE-100 index, reaching record-high levels, has led to greater trading volumes, directly contributing to increased capital gains tax revenue. According to FBR sources, the collection of CGT is governed under Section 37A and Section 147 (5B) of the Income Tax Ordinance, 2001, which outlines the taxation framework for securities transactions. The surge in stock market investment activity, coupled with improved enforcement by the FBR, has played a pivotal role in strengthening tax revenue from capital gains. Regulatory Framework and Exemptions Under Section 37A, any capital gain arising from the sale of securities after July 1, 2010, is subject to tax at rates specified in the Income Tax Ordinance. However, certain exemptions exist, particularly for banking and insurance companies. Transactions outside registered stock exchanges or those not settled through the National Clearing Company of Pakistan Limited (NCCPL) are also exempt. Moreover, initial public offerings (IPOs) listed on the stock exchange are exempt from CGT unless they are processed through NCCPL for tax computation. Future Outlook With continued bullish trends in the PSX and heightened investor activity, FBR officials anticipate sustained CGT growth in the coming months. The strong performance of capital markets is expected to further bolster government revenue, reinforcing the critical role of CGT in Pakistanâ€™s fiscal structure.

Date: 2025-03-27

Details: Islamabad, March 27, 2025 â€“ The telecom sector in Pakistan is calling for significant tax reforms and policy relief in the upcoming federal budget for the fiscal year 2025-26. The Telecom Operators Association has urged the government to address pressing fiscal and regulatory challenges that hinder the industryâ€™s growth and sustainability. In an official communication to the Minister of Finance, the association highlighted that the telecom industry is a key driver of economic progress, contributing substantially to digital connectivity, employment generation, and overall revenue collection. However, the sector is facing excessive taxation and regulatory burdens that negatively impact investment, expansion, and service affordability. One of the major demands put forth by telecom firms is the exemption from withholding taxes. Cellular Mobile Operators (CMOs) are classified as essential service providers, yet they are required to comply with a complex and costly withholding tax system. The telecom industry is burdened with multiple income tax deductions under the Income Tax Ordinance (ITO) 2001, including taxes on utility bills, corporate customer sales, and imports. This compliance structure creates significant administrative hurdles and discourages business expansion within the telecom sector. To improve tax compliance efficiency and foster a favorable business environment, the telecom industry has requested an extension of withholding tax exemptions. Industry representatives argue that exempting telecom companies from withholding tax provisions under the ITO 2001 will streamline the advance tax payment process. Instead, they propose that telecom firms should continue paying quarterly advance tax under Section 147 of the ITO without facing excessive compliance requirements. Another key concern raised by telecom operators is the minimum tax regime. The Finance Act of 2015 amended Section 153(1)(b) of the ITO 2001, converting the previously adjustable withholding tax into a non-adjustable minimum tax on telecom services. As a result, the current 4% minimum tax rate on telecom services has become a major financial burden, especially for operators struggling with fluctuating revenues and high operational costs. Industry leaders argue that this tax system transforms a direct tax into an indirect one, disproportionately affecting service providers, regardless of their profitability. The telecom association has also emphasized the need for a fair and balanced tax enforcement approach. Industry representatives argue that tax authorities should refrain from taking extreme measures such as freezing bank accounts or sealing offices unless absolutely necessary. They stress that compliant telecom businesses should not be penalized due to enforcement actions intended for habitual defaulters. The rising taxation on telecom sector employees is another critical issue. With inflation soaring, higher income taxes on salaries are making it difficult for telecom companies to attract and retain skilled professionals. The association has proposed sector-specific tax reforms to alleviate this problem, including inflation-adjusted tax brackets, reduced withholding tax rates, and targeted incentives for telecom professionals to ensure workforce stability. Additionally, the telecom industry has urged a reduction in the income tax rate under Section 236 of the ITO 2001, which increased from 12.5% to 15% in 2022. The sector has also called for a rollback of the Federal Excise Duty (FED), which rose from 16% to 19.5% under the Federal Excise Duty Act 2005. Given that telecom services are already heavily taxed, lowering these rates would not only enhance affordability but also encourage increased usage, ultimately boosting government revenues. As Pakistan moves towards greater digitalization and economic expansion, ensuring a tax-friendly environment for the telecom industry is crucial. The association hopes that the government will acknowledge these concerns in the 2025-26 budget and introduce reforms that support sustainable growth in the telecom sector while maintaining an equitable tax system.

Date: 2025-03-27

Details: Karachi, March 27, 2025 â€“ The State Bank of Pakistan (SBP) has instructed all commercial banks to extend their working hours on March 29, 2025, to facilitate taxpayers in making duty and tax payments efficiently. In an official communication addressed to the presidents and chief executives of all banks, the SBP emphasized the need to support taxpayers by ensuring smooth processing of government duties and taxes through Alternate Delivery Channels (ADC) and Over-the-Counter facilities. As part of this initiative, all commercial banks that remain open on Saturdays will observe extended banking hours on March 29, 2025. According to the SBP directive, the banking hours on March 29, 2025, shall be from 9:00 AM to 5:00 PM. During this period, all instruments related to government receipts and payments presented at banksâ€™ counters will be collected by NIFT at 5:00 PM through a special clearing arrangement exclusively for tax collection. The National Institutional Facilitation Technologies (NIFT) will provide the clearing fate of such instruments by 8:30 PM on the same day. The SBP further emphasized that to prevent any backlog of tax receipts, banks must ensure that no instrument concerning government receipts and payments lodged during the extended office hours remains unattended at branch counters. All such instruments must be included in the special clearing process, ensuring their value date remains March 29, 2025. Additionally, the SBP has directed banks to maintain 24/7 availability of their digital banking services, including internet banking, mobile applications, and ATMs, to facilitate taxpayers in making online payments of government duties and taxes. Banks are also advised to ensure that their online payment infrastructure remains fully operational without any disruptions. Moreover, the SBP instructed banks to keep their designated branches open on March 29, 2025, until the completion of the special clearing process for government transactions by NIFT. This move is aimed at enhancing taxpayer convenience and ensuring the seamless collection of government revenues. A day earlier, the SBP issued a notification confirming that the decision to extend banking hours was made following a request from the Federal Board of Revenue (FBR). This initiative underscores the SBPâ€™s commitment to facilitating smooth tax collection processes and supporting government revenue operations.

Date: 2025-03-27

Details: Karachi, March 27, 2025 â€“ Taxpayers across Pakistan continue to face difficulties in filing their sales tax returns as persistent technical glitches on the IRIS portal of the Federal Board of Revenue (FBR) remain unresolved, despite an extended deadline. The Karachi Chamber of Commerce and Industry (KCCI), in a letter addressed to FBR Chairman Rashid Mehmood Langrial on March 27, 2025, highlighted the challenges taxpayers are experiencing. The letter comes as the revised deadline for sales tax return submission has lapsed, yet the issues remain unaddressed. Originally, the deadline for filing the sales tax return for the tax period of February 2025 was set for March 18, 2025. However, due to ongoing problems with the IRIS portal, the deadline was extended to March 27, 2025. Despite this extension, many taxpayers were still unable to complete their sales tax return submissions due to unresolved system errors and form-related complications. The KCCI referred to its previous correspondence dated March 20, 2025, in which it had already raised concerns regarding the revision of the sales tax return form. It pointed out that the form had yet to be updated to accommodate various industriesâ€™ needs. A major issue remains with the Unit of Measurement (UOM), which is currently restricted to kilograms, making it impractical for several industries. The KCCI emphasized that businesses across Karachi and the rest of Pakistan cannot be generalized under a single unit of measurement. Several industries require distinct units to report their stock and transactions accurately. The chamber cited specific examples, such as: i. Aluminum Collapsible Tubes, LED Bulbs, Light Fixtures, Garments, Adhesives, and Sealants, which need to be measured in pieces rather than kilograms. ii. Dyed and Finished Fabric, which should be reported in meters or yards rather than kilograms. iii. Various other industries also face similar challenges due to the rigid UOM restrictions. Considering these persistent issues, coupled with the upcoming Eid holidays as announced by the federal government, the KCCI has urged the FBR to extend the sales tax return filing deadline further. The chamber requested an extension until April 5, 2025, allowing businesses more time to submit their sales tax returns accurately without facing undue penalties. The KCCI reiterated that without a proper revision of the sales tax return forms and a fully functional IRIS portal, taxpayers will continue to face unnecessary hurdles. It stressed the importance of swift action by the FBR to facilitate businesses and ensure a smoother tax return process for all industries.

Date: 2025-03-26

Details: Islamabad, March 26, 2025 â€“ The Government of Pakistan has announced a revised customs valuation for iron and steel kitchenware and utensils, updating previous rulings to reflect current market conditions. The Directorate General of Customs Valuation in Karachi issued Valuation Ruling No. 1988/2025, superseding the previous ruling from 2018. The new regulation sets minimum benchmark values for iron and steel kitchenware to ensure fair taxation and accurate duty assessments. The revision was prompted by a request from the Directorate of Customs, Post Clearance Audit (Central), Lahore, which identified classification discrepancies in the previous valuation. The updated ruling now includes specific PCT codes for enameled and non-enameled iron and steel kitchenware, aligning with international classification standards. A meeting was scheduled with industry stakeholders on January 29, 2024, to discuss the valuation adjustments. However, no representatives attended, leading the Directorate to conduct independent market research. Various valuation methods outlined in Section 25 of the Customs Act, 1969, were applied sequentially, but due to inconsistent pricing across different importers and sources, the final determination was made using the fallback method under Section 25(9). According to the revised ruling, the customs values for different types of iron and steel kitchenware are as follows: â€¢ Non-Enameled Cast Iron Kitchenware: USD 2.75 per kg â€¢ Enameled Cast Iron Kitchenware: USD 2.90 per kg â€¢ Non-Magnetic Stainless Steel Kitchenware: USD 4.50 per kg â€¢ Magnetic Iron & Steel Kitchenware: USD 3.12 per kg The customs authorities emphasized that these values serve as the minimum benchmark for duty and tax assessment. If an importer declares a higher invoice value, that higher amount will be used for duty calculations. Additionally, consignments arriving by air will have their freight charges adjusted to align with sea freight valuations. Pakistanâ€™s customs authorities have instructed all Collectorates to implement the new valuation immediately and report any discrepancies. The updated ruling ensures transparency and accuracy in the assessment of iron and steel imports, benefiting both the government and importers. As Pakistan strengthens its trade policies, such measures enhance regulatory oversight while ensuring that the iron and steel industry remains competitive in the evolving global market.

Date: 2025-03-26

Details: Islamabad, March 26, 2025 â€“ Prime Minister Shehbaz Sharif has reinstated tax rebates for teachers and researchers by approving amendments to the Income Tax Ordinance, 2001. This significant decision was ratified during a Federal Cabinet meeting chaired by Shehbaz himself, reaffirming his governmentâ€™s commitment to supporting the education and research sectors. The newly approved Income Tax Second Amendment Bill restores tax concessions for temporary teachers and researchers, addressing longstanding concerns within the academic community. By reinstating these rebates, Shehbaz aims to incentivize professionals in these fields, fostering intellectual growth and innovation across the country. In addition to this, the federal government has taken a firm stance against imposing additional taxes on solar energy users. Shehbaz has directed a comprehensive review of the net metering policy, ensuring that renewable energy initiatives remain viable and beneficial for the public. While the Economic Coordination Committee (ECC) had earlier approved changes to solar net metering regulations, Shehbaz has insisted on further consultations with all stakeholders before finalizing any amendments. Furthermore, the cabinet has approved measures to pass on the benefits of lower petroleum prices to electricity consumers. According to an official statement, Shehbaz endorsed the Power Divisionâ€™s recommendation to utilize savings from reduced fuel prices to lower electricity tariffs, providing much-needed relief to consumers burdened by high energy costs. Additionally, the cabinet granted approval for the Central Power Purchasing Agency to renegotiate agreements with power plants utilizing bagasse, ensuring a more cost-effective and sustainable energy supply. The cabinet also sanctioned amendments to the Whistleblower Protection and Vigilance Commission Act, along with modifications to income tax, sales tax on services, and federal excise duties applicable within the Islamabad Capital Territory. These reforms reflect Shehbazâ€™s broader agenda of improving governance, strengthening transparency, and ensuring fair taxation. Addressing economic matters, Shehbaz expressed his satisfaction over the recent staff-level agreement between Pakistan and the International Monetary Fund (IMF) under the Extended Fund Facility. He emphasized that the IMFâ€™s endorsement of Pakistanâ€™s economic policies signifies growing confidence in the countryâ€™s financial stability. Shehbaz acknowledged the IMFâ€™s recognition of Pakistanâ€™s progress in macroeconomic stabilization, fiscal discipline, and inflation control, noting that these achievements align with his administrationâ€™s long-term vision for economic growth. Commending Finance Minister Muhammad Aurangzeb and the economic team for securing key financial agreements, Shehbaz reiterated the governmentâ€™s commitment to tax reforms, energy sector improvements, and fostering private sector growth. Concluding the meeting, Shehbaz called for collective national efforts, highlighting that Ramadan is a time to reflect on Pakistanâ€™s blessings and reinforce a shared responsibility to ensure the countryâ€™s prosperity

Date: 2025-03-26

Details: Karachi, March 26, 2025 â€“ The Karachi Customs Agents Association (KCAA) has voiced serious concerns over the persistent delays in the review process for Goods Declaration (GD) filings related to consignment clearance. The association highlighted that these delays are disrupting trade operations and increasing costs for businesses, impacting the overall efficiency of Pakistanâ€™s import-export sector. KCAA pointed out that the delays at both the first and second review stages are significantly hampering customs procedures. These bottlenecks lead to extended waiting times for customs agents and traders, increased container rental costs, and mounting port demurrages. The association stressed that such delays not only slow down clearance operations but also add unnecessary financial burdens on stakeholders. Muhammad Aamir, President of KCAA, stated that the first review, conducted at the Principal Appraiser level, already takes several days. However, the second review, overseen by Deputy Collectors, is facing even longer delays. He emphasized that the second review is a crucial phase where stakeholders get the opportunity for a personal hearing regarding their consignment clearance. Ideally, once a GD is assigned to a Deputy Collector, the assessment should be completed within 24 to 48 hours. Unfortunately, due to the overwhelming workload at the second review level, the process is taking much longer, causing unnecessary delays and inefficiencies in customs clearance. To tackle these persistent delays, KCAA has proposed the following measures: 1. Access to Clearance Time Data: KCAA has requested clearance time data from the past two months to evaluate how long Deputy Collectors are taking to finalize GD assessments. Analyzing this data will help identify bottlenecks and introduce necessary improvements. 2. Establishment of a Fixed Timeline: To ensure efficiency, KCAA recommends that Deputy Collectors complete GD assessments within a strict 48-hour timeframe. This measure will help eliminate unnecessary delays and streamline trade operations. The Karachi Customs Agents Association has urged authorities to take swift action in resolving these delays. KCAA emphasized that prompt measures, including providing transparency in clearance timelines and enforcing strict assessment deadlines, are essential for maintaining smooth trade operations and strengthening Pakistanâ€™s economy.

Date: 2025-03-26

Details: Karachi, March 26, 2025 â€“ The Directorate General of Customs Valuation in Pakistan has issued a revised ruling on the customs valuation of cashew nuts, aiming to standardize import duties and taxes. The updated valuation ruling No. 1190 of 2025, determined under Section 25A of the Customs Act, 1969, follows a comprehensive analysis of market trends, import data, and discussions with stakeholders. Customs officials reassessed the value of cashew imports after importers raised concerns about inflated customs rates. The review process included a detailed market inquiry, with officials gathering price data from various markets. The new ruling ensures that cashew imports are taxed fairly, aligning their declared values with actual market prices. According to the latest directive, the customs value for cashew nuts imported from Vietnam is set at $3.50 per kilogram, while cashews from other origins are valued at $3.70 per kilogram. Additionally, value-added cashew products, such as salted or roasted varieties, will be subject to a 15% markup on these base prices. To support land-based importers, a 7% reduction in customs valuation has been approved for cashew shipments transported via land routes. However, actual land freight costs incurred at respective import stations will be factored into the final valuation. This decision aims to provide relief to traders who import cashews through alternative transportation methods. The revised valuation process was carried out under Sections 25 and 25A of the Customs Act, ensuring that the updated rates reflect accurate transactional values. In cases where declared invoice values exceed the new customs rates, assessments will be made based on the higher values to prevent underreporting and revenue loss. Pakistanâ€™s customs authorities have emphasized that the updated cashew nut valuation is designed to create transparency and fairness in import taxation. The changes are expected to benefit both traders and government revenue collection by eliminating inconsistencies in duty assessments. Importers and stakeholders are encouraged to adhere to the revised customs values for cashew imports, as the ruling will remain in effect until further revision or rescindment. Authorities have urged importers to report any discrepancies or anomalies in implementation to ensure compliance with the updated valuation framework.

Date: 2025-03-26

Details: Karachi, March 26, 2025 â€“ NestlÃ© Pakistan has attributed its revenue decline for the calendar year 2024 to the higher rate of General Sales Tax (GST). The company cited the increased tax burden as a key factor impacting its financial performance. On Wednesday, the Board of Directors of NestlÃ© Pakistan Limited submitted the Annual Report, along with the audited financial statements for the year ended December 31, 2024, to the Pakistan Stock Exchange (PSX). The report outlined the companyâ€™s financial performance, investment projects, and future outlook. Financial Performance NestlÃ© Pakistan reported a 3.69% decline in revenue for 2024 compared to the previous fiscal year. The company attributed this drop primarily to the implementation of an 18% Sales Tax on the majority of its product portfolio, introduced through the 2024-25 Finance Bill. The increased tax burden was passed on to consumers through price adjustments. Despite lower revenues, NestlÃ© Pakistan managed to improve its gross profit margin through a favorable product mix and enhanced value chain efficiencies. The company continued to invest in its brands to sustain volumes, but this, coupled with reduced topline growth, led to a decline in operating profit. NestlÃ© Pakistan remains committed to its mission of â€œGood Food, Good Life,â€ focusing on innovation and sustainability while ensuring product quality and consumer satisfaction. Despite market challenges, the company continues to develop new products and implement measures to reduce its environmental footprint. Investment Projects In 2024, NestlÃ© Pakistan invested PKR 4.4 billion across multiple projects, particularly in sustainability and operational efficiency. Key investments included: â€¢ PKR 2,026 million in the Sheikhupura Factory â€¢ PKR 937 million in the Kabirwala Factory â€¢ PKR 511 million in water plants â€¢ PKR 487 million in distribution and sales networks â€¢ PKR 441 million in other projects Principal Risks & Future Outlook NestlÃ© Pakistan faces risks such as rising input costs due to inflation, currency devaluation, and macroeconomic uncertainties affecting consumer demand. Additionally, further increases in tax rates could pose additional challenges. Looking ahead to 2025, NestlÃ© Pakistan maintains a cautious outlook, focusing on brand investment, supply chain optimization, workforce development, and sustainability efforts to drive long-term growth and remain a force for good in the industry.

Date: 2025-03-26

Details: Sohail Sarfraz Published March 26, 2025 ISLAMABAD: The Federal Board of Revenue (FBR) has established the Strategic Tariff and Revenue Analysis Wings for Inland Revenue and Pakistan Customs to provide in-depth assessment of revenue trends, organizational structures and industry-specific taxation matters. In this regard, the FBR has issued a notification on Tuesday. Some of the senior officials of Admin Pool have been given potions of Director Generals at the Strategic Tariff and Revenue Analysis Wing. The Strategic Tariff and Revenue Analysis Wings have been established in the presence of National Tariff Commission (NTC) and after transfer of tax policy from the FBR to the Ministry of Finance. According to the FBRâ€™s notification, FBRâ€™s new Wings will function as support and analysis units for Inland Revenue and Pakistan Customs, working directly under the supervision of respective Member-Policy (Inland Revenue/Customs). The FBR has also issued a separate notification to transfer 11 Members (Grade-21 officials of IR) as Director Generals including Director Generals, Strategic Tariff and Revenue Analysis Wing. Meanwhile, the FBR has transferred and posted seven senior officials (BS-21) of Inland Revenue Group to Strategic Tariff and Revenue Analysis Wing. FBR members including Dr Lubna Ayub (Inland Revenue Service/BS-21), Asim Majid Khan (Inland Revenue Service/BS-21), Shaban Bhatti (Inland Revenue Service/BS-21), Tariq Mustafa Khan (Inland Revenue Service/BS-21), Hyder Ali Dharejo (Inland Revenue Service/BS-21), Muhammad Azam Sheikh (Inland Revenue Service/BS-21) and Nasir Khan (Inland Revenue Service/BS-21) were transferred as Director Generals, Strategic Tariff and Revenue Analysis Wing. In pursuance of powers conferred under Sections 4 and 5 of the FBR Act, 2007 read with the FBR Rules, 2007, the Board is pleased to establish the Strategic Tariff and Revenue Analysis Wings for Inland Revenue and Pakistan Customs, respectively, in its meeting held on March 7, 2025. The Wings shall provide in-depth assessment of revenue trends, organizational structures, jurisdictional performance, and industry-specific taxation matters. The Wings will function as support and analysis units for Inland Revenue and Pakistan Customs, working directly under the supervision of respective Member-Policy (Inland Revenue/Customs). The main features of the Strategic Tariff and Revenue Analysis Wings shall be as under: i) There shall be separate Strategic Tariff and Revenue Analysis Wing for Inland Revenue and Pakistan Customs reporting directly to the Member-Policy (Inland Revenue/ Customs). ii) The concerned Member-Policy (Inland Revenue/Customs) shall oversee the work of officers posted in the respective Wing and determine their assignments. iii) The officers posted in the Wings shall conduct structured analysis assigned by the concerned Member-Policy (Inland Revenue/Customs), including the review of budget suggestions, operational efficiencies, organizational structures, sectoral studies, compliance trends among various categories of taxpayers and identifying the risk areas ensuring that FBR remains adaptable to evolving economic challenges. The reports, analysis and recommendations shall be aimed at providing fact-based inputs for targeted interventions and enhancing operational capacity of FBR. iv) The assigned tasks will be time bound as determined by the concerned Member-Policy (Inland Revenue/Customs). v) Other Members of the Board may also consult the Strategic Tariff and Revenue Analysis Wings for seeking input on any issues through the concerned Member-Policy (Inland Revenue/Customs). vi) The evaluation reports submitted by officers shall be examined by Member-Policy (Inland Revenue/Customs) himself or through a Committee constituted in the respective Policy Wing. vii) The concerned Member-Policy (Inland Revenue/Customs) shall consider any appropriate recommendations coming from such analysis reports for the purposes of legislative changes or any policy interventions. viii) The officers may also make presentations to the Board or any concerned Member, on the assigned topics, as and when necessary. ix) Any report or analysis, if so warranted, shall be published with the approval of the Board. x) The Policy Wings shall maintain complete log of the deliverables, including duration, quality and delays if any. xi) The reporting mechanism of the officers posted in the Strategic Tariff and Revenue Analysis Wings for the purpose of PERs shall be as under: The Secretary (Policy), of BS-17 & BS-18, as designated by the concerned Member-Policy (Inland Revenue/Customs) shall serve as the Reporting Officer and Chief (Policy) as the Countersigning Officer. Chief (Policy) - BS-19 as designated by Member-Policy (Inland Revenue/Customs), shall be Reporting Officer and Member (Policy) as the Countersigning Officer. Member-Policy- BS-20 & above (Inland Revenue/Customs) shall be the Reporting Officer and Chairman, FBR the Countersigning Officer. The officers posted in the Strategic Tariff and Revenue Analysis Wings shall keep all the data and information confidential. The Admin/HR Wing may transfer as many BS-17 to BS-21 posts to the Wings from time to time for both IRS and PCS as may be necessary, or the officer may draw his/her salary from the office as determined by the Admin/HR Wing. The concerned Member-Policy (Inland Revenue/Customs) shall determine whether officers will work virtually or stationed at specific office, based on the operational needs. The DG (IT&DT) shall provide necessary technical support for virtual work setups, if so required. Copyright Business Recorder, 2025

Date: 2025-03-25

Details: The upcoming federal budget for the fiscal year 2025-26, set to be presented in the first week of June 2025, is unlikely to bring any significant tax relief for the salaried class. The government appears reluctant to ease the financial burden on salaried individuals, primarily due to a substantial increase in tax collection from this segment. According to provisional data, the salaried class has already contributed approximately Rs 331 billion in income tax during the first eight months (July-February) of the fiscal year 2024-25. This represents an increase of nearly 57% compared to the Rs 211 billion collected during the corresponding period of the previous fiscal year. The Federal Board of Revenue (FBR) has estimated an additional Rs 75 billion in tax revenue from this segment for the current fiscal year, while the total tax collected from the salaried class has already surpassed Rs 120 billion. A recent media report quoted FBR Spokesperson Dr. Najeeb Memon, stating that the government will review the taxation structure for the salaried class during the upcoming budget formulation process. However, no concrete assurances have been given regarding potential tax relief. In the last fiscal year, the salaried class paid Rs 368 billion in taxes. Despite this heavy tax burden, salaried individuals, who are taxed on their gross income without any expense adjustments, did not receive any concessions. The government also refrained from addressing this issue during its recent discussions with the International Monetary Fund (IMF), further diminishing hopes for relief. One of the most pressing concerns for the salaried class is the increased tax burden imposed in the last budget. The government reduced the number of tax slabs, which disproportionately impacted middle- and upper-middle-income earners. The maximum tax rate of 35% is now applied to those earning Rs 500,000 per month, and an additional 10% surcharge pushes the effective tax rate to a staggering 38.5% for the highest earners. Breaking down the contributions from the salaried class, non-corporate sector employees paid Rs 141 billion in income tax this year, reflecting a 43% increase. Employees in the corporate sector contributed Rs 101 billion, marking a 56% rise. Additionally, provincial government employees paid Rs 57 billion, a 96% jump, while federal government employees contributed Rs 34 billion, up by 66%.

Date: 2025-03-25

Details: Karachi, March 25, 2025 â€“ The Large Taxpayers Office (LTO) Karachi has taken decisive action against M/s. Collectibles, a well-known luxury watch retailer, by sealing four of its registered outlets over alleged sales tax fraud. This enforcement operation, conducted by Zone-1 of LTO Karachi, highlights the authoritiesâ€™ firm stance on tackling tax evasion and ensuring compliance with financial regulations. LTO Karachi teams carried out the operation at multiple locations, targeting three outlets situated in Dolmen Mall, Clifton, and another prominent store at Zamzama, Clifton. The action was initiated after a thorough investigation revealed that the retailer had violated the provisions under mandatory Point of Sale (POS) system, a requirement set by the Federal Board of Revenue (FBR) for transparent sales tax reporting. Non-compliance with this regulation is considered a serious offense, as it allows businesses to underreport sales and evade taxes. During the on-spot inspection, tax officials conducted a comprehensive stock audit and discovered that M/s. Collectibles had also engaged in misdeclaration of goods, further exacerbating their sales tax violations. This deliberate attempt to understate inventory was seen as an effort to evade rightful tax payments, prompting swift action from LTO Karachi. Authorities from LTO Karachi have confirmed that the outlets will remain sealed until the business fulfills its tax obligations. To reopen, M/s. Collectibles must clear all outstanding sales tax liabilities and implement a verified invoicing system that fully complies with the countryâ€™s taxation laws. This strict enforcement sends a strong message to other retailers involved in similar tax evasion tactics, warning them of the severe consequences of non-compliance. In a broader move to strengthen tax compliance, the FBR has recently amended sales tax regulations, granting tax authorities greater power to take enforcement actions, including sealing businesses found violating POS integration rules. These measures are part of the governmentâ€™s ongoing efforts to curb tax fraud, enhance revenue collection, and promote transparency within the retail sector. The latest crackdown by LTO Karachi underscores its unwavering commitment to ensuring that businesses operate within legal tax frameworks. By holding tax evaders accountable, LTO Karachi not only secures vital revenue for the national exchequer but also fosters fair competition among law-abiding businesses. Retailers across the country are urged to comply with sales tax laws to avoid stringent penalties and operational disruptions.

Date: 2025-03-25

Details: Islamabad, March 25, 2025 â€“ The Federal Board of Revenue (FBR) has announced the establishment of the Strategic Tariff and Revenue Analysis Wing (STRAW) and has subsequently transferred 11 senior Inland Revenue Service (IRS) officers in BS-21 to this newly created division. This initiative marks a significant step in FBRâ€™s ongoing efforts to streamline revenue analysis and improve taxation policies in Pakistan. The formation of STRAW was approved during an FBR meeting held on March 7, 2025. The division is structured to function separately for Inland Revenue and Pakistan Customs, aiming to enhance analytical capabilities regarding revenue collection, industry-specific taxation issues, and jurisdictional performance. STRAW is expected to act as a dedicated analytical arm, offering in-depth evaluations and assisting policymakers in devising effective fiscal strategies. Key Functions of STRAW The newly established STRAW will operate under the direct supervision of Member-Policy (Inland Revenue/Customs) and will focus on the following areas: 1. Independent Revenue Analysis: STRAW will evaluate revenue trends and the efficiency of organizational structures within the taxation framework. 2. Tax Compliance Monitoring: It will conduct structured studies on compliance trends among different taxpayer categories, identifying risk areas and ensuring that FBR remains adaptive to evolving economic conditions. 3. Sectoral Studies: The division will assess taxation policies for various industries, helping policymakers make data-driven decisions for improving sector-specific tax collection. 4. Input for Legislative Changes: Based on its findings, STRAW will provide recommendations for legislative amendments to enhance revenue collection mechanisms. 5. Operational Assessments: Officers assigned to STRAW will conduct evaluations on budget suggestions, jurisdictional performance, and operational efficiencies. 6. Confidentiality Assurance: All officers posted in STRAW will be required to maintain strict confidentiality regarding data and analysis reports. Administrative & Reporting Structure The FBR has outlined a well-defined administrative framework for STRAW. Officers assigned to the division will report directly to Member-Policy (Inland Revenue/Customs), ensuring a structured flow of responsibilities. Their assignments will be time-bound, and evaluations will be reviewed either by the Member-Policy or through a designated committee. In its notification, FBR emphasized that the officers will be responsible for conducting presentations before the Board or concerned members when necessary. Additionally, the strategic findings of STRAW may be published with the Boardâ€™s approval to foster transparency and informed decision-making. New Transfers & Implementation To ensure the smooth implementation of STRAW, FBR has transferred 11 senior IRS officers (BS-21) to the new division. These officers will be assigned specific tasks by the Director General of STRAW under the guidance of the Member (IR-Policy) at FBR Headquarters in Islamabad. Further appointments of officers from BS-17 to BS-21 may be made by the Admin/HR Wing as required. Technical & Logistical Support To facilitate the operations of STRAW, FBRâ€™s DG (IT&DT) will provide the necessary technical support. If required, virtual work arrangements may be set up for officers, depending on operational needs determined by the concerned Member-Policy. The establishment of STRAW signifies FBRâ€™s commitment to strengthening its tax administration system. By leveraging data-driven insights and structured revenue analysis, FBR aims to enhance tax compliance, optimize policy interventions, and ensure more efficient revenue collection for Pakistanâ€™s economic stability.

Date: 2025-03-25

Details: Karachi, March 25, 2025 â€“ The Federal Board of Revenue (FBR) has introduced a revised methodology to streamline the resolution of classification disputes in the customs domain. The newly issued Customs General Order (CGO) No. 02 of 2025 amends and updates the provisions set forth in CGO No. 12 of 2002, which was initially issued on June 15, 2022. This step is aimed at enhancing efficiency and transparency in the classification of goods under the customs framework. As per the revised methodology, the FBR has outlined a structured approach under section 18E of the Customs Act, 1969, regarding the constitution of a specialized committee or center for resolving classification disputes. The primary responsibility for handling routine classification matters will continue to rest with the respective Customs Collectorates at their operational level. However, in cases where disputes arise, they may be referred to the Classification Centre established at the Collectorate of Customs Appraisement-East, Karachi, with the approval of the relevant Collector or Director. The Classification Centre will serve as the key authority in determining classification disputes and will perform several critical functions, including: â€¢ Examining and settling classification disputes referred by Customs Collectorates, Directorates, or traders. â€¢ Compiling and publishing classification rulings on an annual basis. â€¢ Maintaining an extensive database of classification rulings, relevant documentation, and related publications. â€¢ Facilitating communication and exchanging information on classification matters with the World Customs Organization (WCO) through the FBR. â€¢ Enhancing capacity building for customs officers and staff in the field of HS classifications in collaboration with the Customs Academy of Pakistan. The Classification Centre will be managed by a classification committee, which will be responsible for resolving disputes and issuing classification rulings. This committee will comprise three key members: the Collector of Customs Appraisement-East, the Collector of Customs Appraisement-West, and the Collector of Customs, SAPT, Karachi. Additionally, the Additional Collector (Headquarters) of the Collectorate of Customs Appraisement-East, Karachi, will serve as the secretary of the committee. Other officers from different Collectorates and Directorates may be co-opted as needed. The classification committee will also include one representative from the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) and a member from the relevant trade association linked to the disputed goods. To ensure informed decision-making, the committee may seek opinions from laboratory experts, specialists, or other industry professionals. Meetings of the classification committee will be held at least twice a month, though additional sessions may be convened as necessary. The committee also retains the flexibility to conduct online meetings for greater efficiency. Upon receiving a request or reference regarding the classification of goods, the committee may consult relevant Collectorates, Directorates, or laboratory units to gather expert opinions. The case will then be presented in a classification committee meeting, where the trader or an authorized representative will be invited to participate. The committee may also request additional documents or information from the trader before finalizing its decision. In cases where the three committee membersâ€”the Collectors of Customs Appraisement-East, Appraisement-West, and SAPT, Karachiâ€”fail to reach a unanimous decision, the majority opinion will prevail. All new classification disputes must be resolved within 120 days of receipt at the Classification Centre, with a possible 30-day extension granted by the Chief Collector of Customs Appraisement-South, Karachi, if necessary. For previously pending cases, decisions must be made within 120 days, but no later than August 31, 2025. To ensure widespread dissemination, classification rulings will be issued as Public Notices and circulated among traders, customs authorities, and the FBR. Additionally, any local classification committee previously operating within a Collectorate or Directorate will be dissolved, and its pending cases will be transferred to the Classification Centre for expedited resolution. For smooth operations, the Collectorate of Customs Appraisement-East, Karachi, will provide logistical support, space, and human resources necessary for the efficient functioning of the Classification Centre. The FBRâ€™s new approach to classification disputes reflects its ongoing commitment to improving transparency, consistency, and regulatory compliance within Pakistanâ€™s customs framework.

Date: 2025-03-25

Details: Islamabad, March 25, 2025 â€“ The Federal Board of Revenue (FBR) has announced that its tax collection window will remain closed during the public holidays declared by the federal government for Eid-ul-Fitr. This closure is expected to impact revenue collection efforts during a crucial period for the economy. According to an official notification, the federal government has declared public holidays from March 21 to April 2 (Monday to Wednesday) in observance of Eid-ul-Fitr. These holidays will effectively halt tax collection operations across the country, including key revenue centers, further complicating the FBRâ€™s task of meeting its fiscal targets. Notably, the first day of Eid-ul-Fitr is expected to fall on March 31, 2025, subject to the sighting of the moon. This date is of particular significance for the FBR as it coincides with the final day of the third quarter of the ongoing fiscal year 2024-25. The last day of the quarter is traditionally critical for tax collection as businesses and individuals finalize their financial filings. The FBR is already facing the formidable challenge of achieving its revenue collection target for the fiscal year, and the prolonged public holiday period is likely to pose additional hurdles. The closure of tax collection services during these days may result in a shortfall in revenue, affecting the governmentâ€™s overall fiscal performance. Despite the potential impact, the FBR has yet to disclose its strategy for mitigating revenue losses during this extended holiday period. It remains unclear whether the tax authority will make special arrangements to keep tax collection windows open on March 29 and March 30 (Saturday and Sunday), the two days preceding Eid-ul-Fitr, to facilitate taxpayers and ensure continuity in revenue inflows. As the third quarter deadline approaches, tax officials and policymakers are expected to review possible solutions to prevent significant disruptions. The business community and tax filers are also keenly awaiting further instructions from the FBR regarding any potential extensions or alternative measures to accommodate the financial reporting deadlines.

Date: 2025-03-20

Details: Karachi, March 20, 2025 â€“ A significant number of taxpayers have struggled to comply with the filing of their sales tax returns for February 2025 due to persistent technical issues on the IRIS portal. These glitches have severely hindered the process, leaving many businesses unable to submit their returns before the deadline. â€œThe last date for filing sales tax returns for the period of February 2025 expired on March 18, but numerous taxpayers faced unresolved complications on the IRIS portal,â€ said Ali A. Rahim, President of the Karachi Tax Bar Association (KTBA), in a statement to PkRevenue.com. So far no response is received from the FBR side regarding IRIS problems. Rahim expressed deep disappointment with the FBR, stating that despite repeated appeals to the FBR chairman regarding these technical problems, no effective resolution was provided. He criticized the FBRâ€™s demand for businesses to declare goods in weight instead of units, calling it an impractical approach that only exacerbates compliance challenges. The KTBA had formally reached out to the FBR on March 14 and March 17, requesting urgent intervention to address the IRIS portal malfunctions and extend the sales tax return filing deadline. The association emphasized that businesses and tax practitioners have encountered serious functionality issues, making it nearly impossible to meet compliance requirements on time. Key Issues with the IRIS Portal Identified by KTBA 1. HS Code Expansion from 4 to 8 Digits o The IRIS portal has not been updated to accommodate the expansion of HS codes, causing major difficulties in sales tax return preparation. o Businesses dealing with multiple HS codes face higher risks of errors and inconsistencies in their tax filings. 2. Mandatory Unit of Measurement (UoM) Association & Lack of Standard Measurement Units o The IRIS portal now mandates UoM association with HS codes, making accurate reporting difficult. o Many standard measurement units like tons, liters, and ounces are missing, further complicating the sales tax return filing process. KTBAâ€™s Urgent Demands to FBR The KTBA has called on the FBR to take immediate action, including: 1. Fixing all technical glitches in the IRIS portal to ensure smooth and efficient filing of sales tax returns. 2. Extending the deadline until March 28, 2025, to provide businesses with ample time to comply after system improvements. Unless these issues are resolved promptly, taxpayers will continue to face compliance hurdles, affecting the efficiency of sales tax collection. The KTBA has urged the FBR to act swiftly and provide a seamless filing experience for all businesses.

Date: 2025-03-20

Details: Hyderabad, March 20, 2025 â€“ The Regional Tax Office (RTO) Hyderabad has taken strict action against tax evasion by sealing a prominent supermarket for non-compliance with point of sale (POS) regulations. This decisive move underscores the authoritiesâ€™ commitment to enforcing transparency and accountability in retail transactions across Hyderabad. According to an official press release issued on Thursday, the operation was conducted under the directives of Chief Commissioner Inland Revenue Qazi Hifz-ur-Rehman and Commissioner Naib Ali Pathan. The Point of Sale (POS) team of RTO Hyderabad raided and sealed Dawood Super Mart Autobhan Hyderabad for its involvement in issuing fraudulent invoices, including unstamped, non-QR coded, and fake receipts. Despite multiple warnings, the supermarket continued these illegal practices, leading the authorities to take strict action under Section 33 of the Sales Tax Act, 1990, in conjunction with Rule 150ZEO of the Sales Tax Rules, 2006. The enforcement team ensured that the premises were completely sealed, preventing further violations. The RTO Hyderabad has confirmed that the supermarket will remain closed until all outstanding sales tax liabilities are cleared. Furthermore, the store must fully integrate its invoicing system with the Federal Board of Revenue (FBR) Dashboard to ensure compliance with tax regulations and prevent future violations. This operation serves as a strong warning to other businesses in Hyderabad that may be engaging in similar fraudulent activities. The Federal Board of Revenue (FBR) has recently strengthened sales tax regulations, granting tax authorities increased power to take action against businesses manipulating POS systems. This initiative is part of the governmentâ€™s broader strategy to curb tax evasion and promote transparency in the retail sector. Officials at RTO Hyderabad have reiterated their determination to continue crackdowns on tax fraud and financial irregularities. They urge all businesses in Hyderabad to comply with tax laws to avoid severe penalties, potential closures, and legal consequences. Compliance with regulations will not only protect businesses from enforcement actions but also contribute to a fair and transparent economic environment in Hyderabad.

Date: 2025-03-19

Details: Karachi, March 18, 2025 â€“ The Sindh High Court (SHC) has suspended a sales tax suspension order while expressing concerns over the conduct of the Chief Commissioner of Inland Revenue, Karachi. The case, filed under Constitutional Petition No. D-1076 of 2025, challenged the order in revision dated March 7, 2025, where the petitionerâ€™s request under Section 21(5) of the Sales Tax Act, 1990, was dismissed on the grounds that blocking proceedings were still pending. The court found this reasoning flawed, stating that suspension and block listing are independent matters and should not be treated as a single process. The petitioner had earlier filed a separate case (C.P. No. D-697 of 2025) where the tax authorities assured the court that a final order would be passed within a week. However, the impugned order failed to provide a conclusive decision, prompting the court to question the Chief Commissionerâ€™s commitment to resolving taxpayer grievances. The bench noted that a suspension order under Section 21(2) requires prior notice, while blocking proceedings under Section 21(4) involve a separate show cause process. The court observed that the department appeared uncertain about the correct legal procedure, leading to unnecessary delays that left the petitioner without a remedy. The court further referenced a prior order (C.P. No. D-5428 of 2024) where it had clarified the legal framework surrounding suspension and block listing, emphasizing that authorities must follow due process before deregistering a taxpayer or blocking refunds. The court criticized the tax department for failing to differentiate between the relevant legal provisions, causing unwarranted hardship to businesses. In light of these concerns, the court suspended the sales tax suspension order dated February 14, 2025, and maintained the status quo regarding blocklisting proceedings. The case will be heard again on April 15, 2025, with the Chief Commissioner required to attend and justify the tax authorityâ€™s approach. The court warned that if the Chief Commissionerâ€™s explanations were unsatisfactory, it might initiate further proceedings against him.

Date: 2025-03-19

Details: March 19, 2025 Islamabad, March 19, 2025 â€“ The Federal Board of Revenue (FBR) has imposed a major penalty on a customs officer of BS-17, ordering his compulsory retirement after he was found guilty of theft and unauthorized removal of seized goods. During his tenure at the Directorate General of Intelligence & Investigation-Customs in Karachi, Syed Irshad Ali Shah, Principal Appraiser (Time Scale BS-17), was found guilty of stealing and unlawfully removing seized goods, including 291 bottles of liquor of various brands and office equipment such as almirahs and air conditioning units. Following an investigation, the Inquiry Officer confirmed the charges, leading to the imposition of a minor penalty of withholding increments for three years without cumulative effect, effective from May 23, 2022. Despite this minor penalty, the officer continued to engage in misconduct, causing significant administrative challenges within the customs department. As a result, he was transferred from Karachi to the Federal Board of Revenue (FBR) Headquarters and assigned to the Secretary (Administration) through an official order dated September 13, 2024. Upon reporting to his new post on September 24, 2024, he soon applied for five days of leave from October 18 to October 22, 2024, which was approved. However, he failed to resume his duties on October 23, 2024, and has remained absent without submitting a leave application or obtaining permission from the competent authority, despite repeated directives to return. Consequently, the FBR initiated disciplinary proceedings against Syed Irshad Ali Shah under Rule-7 read with Rule-6 of the Civil Servants (Efficiency & Discipline) Rules, 2020. A show-cause notice was issued on January 7, 2025, and he was placed under suspension the following day. In response, the accused officer submitted a statement claiming his absence was due to a heart condition requiring treatment in Karachi. He was also given an opportunity to present his case in person on March 4, 2025, during which he reiterated his medical concerns. Upon reviewing the case file, it was observed that Syed Irshad Ali Shah failed to provide a valid medical certificate from an authorized institution. The only documentation he submitted was a photocopy of a prescription and a recommendation letter from a private doctor, which was neither in the prescribed format nor properly dated. His request for six monthsâ€™ medical leave was deemed non-serious, reflecting a lack of commitment to his service in the customs department. Given his continuous disregard for professional conduct and failure to comply with administrative directives, the Member (Administration/HR) of FBR, acting as the competent authority, has decided to impose a major penalty of compulsory retirement on Syed Irshad Ali Shah under Rule 4(3)(c) of the Civil Servants (Efficiency & Discipline) Rules, 2020. Furthermore, the period of his suspension and unauthorized absence will be treated as leave, subject to the applicable regulations. The officer retains the right to appeal this decision within 30 days before the Appellate Authority under the Civil Servants (Appeals) Rules, 1977. This decision underscores the customs departmentâ€™s commitment to upholding discipline and integrity by enforcing strict penalties on misconduct.

Date: 2025-03-19

Details: Due to taxation measures introduced in recent years, property buyers are facing significant challenges in the current market. The heavy tax burden has discouraged many from purchasing property altogether. However, the upcoming 2025-26 budget is expected to bring major relief for property buyers. According to FBR sources, discussions are underway regarding certain tax concessions, including possible tax exemptions for first-time property buyers. WATCH MORE DETAILS OF THE NEWS ARTICLE AT OUR YOUTUBE CHANNEL Tax Burden Slowing Down Real Estate Sector Sources indicate that the primary reason behind the real estate sectorâ€™s current stagnation is excessive taxation, leading to a sharp decline in property transactions. The government is seriously considering recommendations from the Federation of Pakistan Chambers of Commerce and Industry (FPCCI). These proposals, part of FPCCIâ€™s 2025-26 budget recommendations, aim to boost economic growth and investment in real estate. Concerns Over Double Taxation As per FPCCI, filers currently pay a 3% advance tax on property purchases. FPCCI has raised concerns that this amounts to double taxation, as the income used for purchasing property has already been taxed. This additional financial burden discourages investment and negatively impacts market activity. To address this, FPCCI has proposed: Reducing the advance tax for first-time filers to 0.5% Complete exemption for salaried individuals, as they already pay income tax, and additional tax burdens are unfair Call to Abolish Section 7E of Income Tax Ordinance Apart from tax reduction, FPCCI has also demanded the abolition of Section 7E of the Income Tax Ordinance 2001. This section imposes a deemed income tax on capital assets, acting as a major hurdle to real estate investment in Pakistan. FPCCI argues that removing Section 7E will: Solve the double taxation issue Improve the investment climate for property buyers and investors Boosting Investment & Market Transparency FPCCI believes that eliminating Section 7E will encourage investment in real estate, making homeownership more accessible for the middle class and salaried individuals. Additionally, removing this tax will help formalize the real estate industry, enhancing transaction transparency and documentation. Economic Growth & Foreign Investment FPCCI emphasizes that tax reforms will attract domestic and foreign investment in Pakistanâ€™s real estate sector, which is crucial for economic stability. The federation has urged the government to incorporate these recommendations into the upcoming federal budget, recognizing the real estate sector as a key pillar of national economic growth.

Date: 2025-03-18

Details: Karachi, August 12, 2025 â€“ The Directorate General of Customs Valuation has issued a new Valuation Ruling No. 59/2025, revising the customs values of Ferro Manganese, Ferro Silicon, and Silico Manganese under Section 25A of the Customs Act, 1969. The revision comes as an update to the previous Valuation Ruling No. 715/2015, which was outdated due to fluctuating international market trends and freight charges. The Customs Department initiated this review to ensure that the valuation of these imported goods aligns with prevailing global prices. However, despite scheduling a stakeholder meeting on February 13, 2025, no industry representatives participated or submitted relevant documents. As a result, the Customs authorities conducted independent market research, consulting internationally recognized sources to determine fair valuation. Methodology for Customs Valuation In accordance with the Customs Act, the department sequentially applied various valuation methods. The transaction value method, based on declared values, was found inapplicable due to discrepancies with market rates. Similarly, the comparable goods method under Sections 25(5) & (6) lacked sufficient evidence regarding quality and quantity. Ultimately, the Customs authorities employed a calculated approach under Section 25(8), factoring in London Metal Bulletin (LMB) prices for core materials like wire rods, along with conversion costs and freight expenses. The new customs values are set as minimum benchmarks, meaning that if the declared or invoice values exceed these figures, assessments will be based on the higher values, as per Section 25(1) of the Customs Act. Implementation of New Customs Values Customs Collectorates across Pakistan have been directed to enforce these updated valuations, ensuring compliance at all ports and entry points. Furthermore, in cases of air-freighted consignments, an additional charge reflecting the difference between air and sea freight will be applied to assessments. The Customs authorities have urged importers and trade bodies to adhere to the revised valuations and report any discrepancies to the Directorate. This move aims to enhance transparency and curb undervaluation practices in Pakistanâ€™s import sector.

Date: 2025-03-18

Details: LAHORE: A tax appellate forum has declared that failure on the part of an assessee to submit documents within prescribed period of time for availing self-assessment scheme cannot be made basis to deprive him of the benefit of the scheme. According to details, the taxpayer after filing a return under the scheme wrote a letter to the income tax officer to inform him about making certain corrections in the columns of income tax form after furnishing a return. However, the assessing officer while passing his order came to the conclusion that the applicant had filed a revised return which was done after the extended date of filing of return, therefore, it was not qualified under the self-assessment scheme and was not immune from total audit. The relevant forum maintained that if a person having furnished a return, discovers any omission or wrong statement therein, he may, without prejudice to any liability incurred, may furnish a return at any time before the assessment is made. It further said that writing a letter to the income tax officer while making certain corrections in the columns of the income tax form would amount to filing a revised return under the law. The taxpayer had never altered the total amount of income or the tax so payable, and it was only by way of a letter that the taxpayer approached the income tax officer by stating that the mistake is in respect of placing the correct figures in relevant columns. It had no effect on the liability of tax, not any income was revised upwards or downwards. Income in both the situations was shown as higher by 20 percent from the income so assessed in the immediate past assessment year. The appellate forum declared him qualified under the self-assessment scheme, as it does not tantamount to a revision of income or a revised return without having any direct impact on the total income of the taxpayer. It pointed out that the scheme being initiated for benefit of a taxpayer as well as seeking higher taxes with a minimum increase of 20 percent of income in favour of the department, has to be construed liberally and not strictly, or in the manner as has been done in the present case. Copyright Business Recorder, 2025

Date: 2025-03-18

Details: Karachi, March 18, 2025 â€“ The Medium Tax Office (MTO) Karachi has taken strict action against M/s. Hobnob, sealing three of its outlets for alleged sales tax fraud. The outlets, located at Boat Basin, Dolmen Mall, and Shehbaz Commercial Clifton, were found to be collecting sales tax from customers but failing to deposit the collected amount into the national exchequer. The enforcement team from Zone-I of MTO Karachi, led by Assistant Commissioner Laraib Khan of the Federal Board of Revenue (FBR), carried out the operation after confirming irregularities in the retailerâ€™s tax compliance. Investigations revealed that while the outlets were linked to the Point of Sale (POS) system, which is designed to provide real-time sales data to the FBR, they were issuing unverified sales tax invoices. This deliberate act resulted in significant sales tax losses for the government. Strict Action by MTO Karachi As a key enforcement arm of the FBR, MTO Karachi plays a crucial role in ensuring compliance with tax laws. Businesses classified as Tier-1 retailers are required by law to integrate with the FBRâ€™s digital tax system, providing accurate transaction details through POS. However, Hobnobâ€™s outlets failed to adhere to these requirements, prompting MTO Karachi to take immediate action. The authorities have confirmed that the sealed outlets will remain closed until all outstanding sales tax liabilities are cleared. Additionally, Hobnob must fully integrate its invoicing system with the FBR Dashboard to ensure complete transparency and prevent further violations. Broader Implications for Tax Compliance This operation sends a strong message to other retailers engaging in tax evasion. The FBR recently amended sales tax rules, giving tax authorities greater power to seal non-compliant businesses that manipulate POS systems. This policy underscores the governmentâ€™s commitment to curbing tax fraud and enhancing transparency in the retail sector. Authorities at MTO Karachi have reiterated their resolve to continue crackdowns on tax fraud. They urge businesses to comply with regulations to avoid penalties, closures, and legal repercussions. CUSTOMS ISSUES VALUATIONS FOR FERRO MANGANESE, FERRO SILICON March 18, 2025 Karachi, August 12, 2025 â€“ The Directorate General of Customs Valuation has issued a new Valuation Ruling No. 59/2025, revising the customs values of Ferro Manganese, Ferro Silicon, and Silico Manganese under Section 25A of the Customs Act, 1969. The revision comes as an update to the previous Valuation Ruling No. 715/2015, which was outdated due to fluctuating international market trends and freight charges. The Customs Department initiated this review to ensure that the valuation of these imported goods aligns with prevailing global prices. However, despite scheduling a stakeholder meeting on February 13, 2025, no industry representatives participated or submitted relevant documents. As a result, the Customs authorities conducted independent market research, consulting internationally recognized sources to determine fair valuation. Methodology for Customs Valuation In accordance with the Customs Act, the department sequentially applied various valuation methods. The transaction value method, based on declared values, was found inapplicable due to discrepancies with market rates. Similarly, the comparable goods method under Sections 25(5) & (6) lacked sufficient evidence regarding quality and quantity. Ultimately, the Customs authorities employed a calculated approach under Section 25(8), factoring in London Metal Bulletin (LMB) prices for core materials like wire rods, along with conversion costs and freight expenses. The new customs values are set as minimum benchmarks, meaning that if the declared or invoice values exceed these figures, assessments will be based on the higher values, as per Section 25(1) of the Customs Act. Implementation of New Customs Values Customs Collectorates across Pakistan have been directed to enforce these updated valuations, ensuring compliance at all ports and entry points. Furthermore, in cases of air-freighted consignments, an additional charge reflecting the difference between air and sea freight will be applied to assessments. The Customs authorities have urged importers and trade bodies to adhere to the revised valuations and report any discrepancies to the Directorate. This move aims to enhance transparency and curb undervaluation practices in Pakistanâ€™s import sector.

Date: 2025-03-15

Details: ISLAMABAD: Prime Minister Shehbaz Sharif has expressed strong optimism regarding the resolution of pending tax cases worth Rs 400 billion, citing a recent Sindh High Court ruling that granted a significant relief of Rs 23 billion to the government. He emphasized that these legal victories would contribute to strengthening Pakistanâ€™s financial stability. Addressing a recent cabinet meeting, Shehbaz highlighted the governmentâ€™s strides in economic reforms and governance improvements over the past year. Notably, he pointed out the successful implementation of e-governance, the digitalisation of the Federal Board of Revenue (FBR), and the remarkable improvement in foreign exchange reserves, which surged from a precarious $4 billion to a much healthier $12 billion. Despite these achievements, Shehbaz acknowledged the persistent challenge posed by state-owned enterprises (SOEs), which he described as â€œbottomless pitsâ€ due to their cumulative losses amounting to Rs850 billion. He stressed the urgent need for structural overhauls within these entities to enhance efficiency and curb financial wastage. Discussing Pakistanâ€™s economic trajectory, the premier reiterated that the elimination of terrorism was crucial for attracting investment. He asserted that once security concerns were addressed, Pakistan would regain its lost economic stature on the global stage. He also underscored that for the first time in Pakistanâ€™s history, all state institutions were aligned and working collectively towards national prosperity. Shehbaz drew attention to the dire economic situation when his government assumed office, warning that Pakistan had been on the brink of financial collapse. However, through strategic measures and policy execution, his administration managed to steer the economy towards stability, avoiding a potential default. He commended his cabinet and government officials for their contributions in achieving economic progress, highlighting key indicators such as a sharp decline in inflation, a reduction in policy rates, an increase in foreign remittances, a boost in foreign investment, and strengthened foreign exchange reserves. He stressed that sustained efforts were necessary to transition from economic stabilisation to long-term growth under the â€œUraan Pakistanâ€ programme. With continued policy consistency, he projected that Pakistan could become a $1 trillion economy by 2035. The PM acknowledged Saudi Arabiaâ€™s extension of a $1.2 billion oil facility and the UAEâ€™s rollover of $2 billion in financial support. He noted that friendly nations had helped arrange $5 billion to fulfill an IMF financing condition and credited the army chief for playing a crucial role in securing international financial assistance. Shehbaz reiterated his governmentâ€™s commitment to resolving all tax cases efficiently, ensuring that businesses operate under a fair and transparent legal framework. He emphasised that overcoming legal and financial hurdles would further solidify Pakistanâ€™s economic foundation. Despite prevailing challenges, Shehbaz remained steadfast in his belief that Pakistan was on the path to economic recovery and long-term stability. He called for a collective effort from all sectors to build a self-sufficient and thriving economy, free from excessive reliance on loans. With strategic policies and international cooperation, he reaffirmed, Pakistan could emerge as a formidable economic force in the coming decades.

Date: 2025-03-15

Details: The Punjab Excise & Taxation Department has intensified its efforts to recover outstanding property taxes by launching a large-scale crackdown on defaulters. The Punjab department is not only focusing on tax evaders but also holding its own officers accountable for failing to meet tax recovery targets. According to an official press statement released on Friday, Punjab Director General Excise & Taxation, Umar Sher Chatha, stated that the crackdown aims to eliminate financial losses caused by persistent defaulters. However, he also emphasized that accountability will extend beyond tax defaultersâ€”officers who fail to meet their recovery targets will also face strict consequences. To ensure an efficient recovery process, a performance review of taxation officers across Punjab is already underway. The department is compiling lists of underperforming officers, and those failing to improve will first receive show-cause notices. If their performance does not improve, their salaries will be deducted, and by the end of the year, they risk losing their positions entirely, according to the statement. Punjabâ€™s Excise & Taxation Department has set an ambitious target of collecting Rs28 billion in property taxes. To achieve this, stringent enforcement measures are being implemented, and the ETO Operations will directly oversee the recovery process to maintain efficiency, transparency, and strict accountability. Providing an update on the crackdown, DG Excise Umar Sher Chatha revealed that in the last 12 days alone, 12,000 properties in Lahoreâ€”linked to defaulters owing Rs860 millionâ€”have been sealed. Across Punjab, over 38,000 properties with outstanding dues totaling Rs1.5 billion have been sealed. However, as tax recovery efforts intensify, many properties are being swiftly de-sealed upon payment. In Lahore, 3,600 properties have been de-sealed following recoveries of Rs110 million, while across Punjab, 11,000 properties have been restored after owners cleared outstanding dues amounting to Rs830 million. The DG issued a stern warning to both defaulters and officers, stressing that no official has the authority to illegally de-seal properties without ensuring proper tax payments. Punjabâ€™s Excise Department is committed to maintaining financial discipline and ensuring that tax defaulters face strict action without favoritism.

Date: 2025-03-14

Details: The Federal Board of Revenue (FBR) is facing a significant shortfall in meeting its tax collection target for the fiscal year 2024-25. Despite reassurances that no new tax measures will be introduced in the remaining months of the fiscal year, the FBR is struggling to bridge the revenue gap. According to official data, the FBR collected Rs 7.35 trillion during the first eight months (Julyâ€“February) of FY25, falling short of the assigned target of Rs 7.95 trillion. This represents a massive shortfall of over Rs 600 billion in tax collection, raising concerns about whether the annual target can still be met. In February 2025 alone, the FBR provisionally collected Rs 850 billion against a set target of Rs 983 billion, resulting in a shortfall of Rs 133 billion for the month. With only four months remaining in the fiscal year (March to June), the FBR now needs to collect an additional Rs 5.62 trillion to achieve the ambitious annual tax collection target of Rs 12.97 trillion. To address this shortfall, FBR officials have assured the International Monetary Fund (IMF) that they are making serious efforts to meet the tax target. Their strategy includes enhanced enforcement, increased audits, and expediting the resolution of pending revenue cases in courts, which involve approximately Rs 2.7 trillion. Tax authorities are also focusing on broadening the tax base by identifying new taxpayers and improving compliance among existing ones. Efforts are underway to strengthen digital monitoring and close loopholes in revenue collection, which could contribute significantly to reducing the shortfall. The tax target for FY25 is crucial for Pakistanâ€™s economic stability, as it directly impacts fiscal policies and the governmentâ€™s ability to meet its expenditure commitments. While the FBR remains optimistic, experts caution that without substantial improvements in collection mechanisms and economic growth, meeting the tax target will remain a formidable challenge. As the fiscal year progresses, stakeholders will closely monitor whether the FBR can overcome the shortfall and achieve its ambitious tax collection target amid mounting economic pressures.

Date: 2025-03-14

Details: The Pakistan Software Houses Association (P@SHA) has called on the government to reinstate a 10-year tax exemption under the Final Tax Regime (FTR) for IT and IT-enabled services (ITeS) exports. This move aims to ensure predictability, continuity, and investor confidence in the rapidly growing IT industry. As the IT industry continues to attract major investments, expand operations, and diversify its regional export markets, policy consistency remains crucial for sustaining momentum. The FTR currently allows for a reduced withholding tax rate of 0.25% on export proceeds for entities registered with the Pakistan Software Export Board (PSEB) until its expiration on June 30, 2026. P@SHA emphasizes that the extension of the FTR is vital to sustaining export growth, fostering investment, and maintaining the competitiveness of Pakistanâ€™s IT industry on the global stage. A 10-year tax exemption would accelerate digital transformation, enhance investor confidence, and solidify Pakistanâ€™s position as a leading IT hub. This aligns with the objectives of the Special Investment Facilitation Council (SIFC) and the prime ministerâ€™s vision for exponential IT export growth. By ensuring a stable tax regime, the IT industry can continue expanding and driving economic progress. The continuation of the FTR would simplify tax structures for IT firms and encourage reinvestment by allowing companies to retain more revenue for business expansion and technological innovation. Furthermore, providing long-term tax incentives and maintaining policy stability is essential to fostering a favorable business environment for the IT industry. P@SHA Chairman Sajjad Mustafa Syed highlighted that reinstating the FTR would align Pakistan with regional competitors offering extended tax incentives to attract foreign direct investment (FDI). He stressed that the IT industry requires stability and consistency to maintain global competitiveness, boost exports, and generate employment opportunities. He also pointed out taxation disparities, where salaried employees pay between 5% and 35% in income tax, while remote IT workers pay only 0.25% to 1%. This gap contributes to talent migration and makes it difficult for local firms to retain skilled professionals. To unlock the industryâ€™s full potential, he urged the government to lower income tax rates for salaried IT employees. One of P@SHAâ€™s key recommendations is to facilitate foreign exchange repatriation. Under the current Income Tax Ordinance (ITO), 2001, payments made to non-residents for services rendered in Pakistan are subject to withholding tax (WHT), which varies based on the nature of the payment and existing Double Taxation Agreements (DTAs). Royalties and fees for technical services paid to non-residents without a permanent establishment in Pakistan currently incur a 15% withholding tax. Saad Shah, CEO of Hexalyze and an IT exporter, urged the government to allocate budgetary support for IT-exporting companies seeking to expand into emerging and high-potential markets such as Saudi Arabia, the UAE, Qatar, and Singapore. These countries are heavily investing in IT sectors, including AI, robotics, cybersecurity, and fintech, offering significant opportunities for Pakistani service providers. Pakistani IT exporters have already showcased their products and services in these markets, receiving an encouraging response. Shah emphasized that government support through enhanced trade relations at the state levelâ€”via the Ministry of Information Technology and Telecommunication (MoITT), the Pakistan Software Export Board, economic attachÃ©s, and diplomatic missionsâ€”would be crucial for promoting the IT industry, increasing exports, and attracting further investment.

Date: 2025-03-14

Details: Karachi, March 14, 2025 â€“ The Karachi Tax Bar Association (KTBA) has raised concerns over persistent glitches and anomalies affecting the Federal Board of Revenueâ€™s (FBR) IRIS portal. The association has urged immediate action to resolve these issues, which are disrupting tax compliance and causing inconvenience for taxpayers. KTBA President Ali A. Rahim, in an official letter to the FBR Chairman, highlighted the numerous technical difficulties encountered on the IRIS portal. According to KTBA, these issues are creating obstacles in the seamless filing of returns, generating PSIDs, and making tax payments. The glitches also limit access to critical tax-related information, ultimately affecting the efficiency of the system and the ease of compliance. The KTBA emphasized that both tax professionals and general taxpayers are facing challenges due to these anomalies. The IRIS portal, intended as a facilitation tool, is currently plagued with inefficiencies that hinder smooth tax operations. â€œThese issues not only cause inconvenience but also contribute to compliance difficulties, particularly for taxpayers who are not tech-savvy,â€ KTBA stated. In an effort to provide constructive feedback, KTBA has compiled a detailed matrix outlining the specific glitches, their impact on users, and possible solutions. The association believes that addressing these concerns will enhance user experience and promote better compliance with tax regulations. The KTBA has called upon the FBR to take urgent steps to: (i) Conduct a thorough investigation into the reported IRIS glitches and anomalies. (ii) Implement improvements based on the feedback provided to optimize portal functionality and user accessibility. â€œWe are confident that the FBR, under your able leadership, will take swift measures to rectify these issues and strengthen the IRIS portal as a dependable tool for taxpayers,â€ KTBA President Ali A. Rahim stated. Furthermore, KTBA underscored that regular upgrades and system enhancements should be an ongoing process to ensure the IRIS portal remains efficient and user-friendly. The association assured that it will continue to monitor and highlight any future anomalies in the portal to support smooth usability and operations for taxpayers nationwide. Addressing these concerns, KTBA noted, is essential for building trust and ensuring an efficient tax compliance system in Pakistan.

Date: 2025-03-13

Details: Islamabad â€“ Pakistan is facing an alarming economic challenge, losing approximately $100 billion annually due to illegal economic activities such as tax evasion, smuggling, and counterfeiting, according to a newly launched study. The report, titled â€œTowards an Optimal Tax Regime for Pakistanâ€™s Tobacco Sector,â€ was authored by renowned economist Sakib Sherani and released by ACT Alliance Pakistan. Pakistanâ€™s economy is severely impacted by an unsustainable tax regime that has inadvertently fueled the rise of illegal trade, particularly in the cigarette sector. This crisis not only results in massive tax revenue losses but also undermines the stateâ€™s authority. The study reveals that the country loses over Rs300 billion annually due to inefficiencies in the taxation system, which have encouraged the growth of illicit markets. ACT Alliance Pakistan, a civil society network dedicated to combating illegal economic activities since 2016, estimates that Pakistanâ€™s losses from illicit trade extend far beyond the tobacco industry, affecting various sectors and hampering economic growth. The report highlights the urgent need for policy interventions to counter the rapid expansion of illegal cigarette trade, which now dominates the market. It further explains that Pakistanâ€™s government has exceeded the â€œoptimal tax point,â€ where excessive tax hikes now decrease revenue instead of increasing it. The price elasticity of demand for cigarettes in Pakistan is -1.4, meaning that tax hikes on legal products only push consumers toward illicit alternatives. â€œThe current tax policy on cigarettes is failing on multiple fronts,â€ said Sakib Sherani. â€œIt has led to a surge in illegal trade, market distortions, and declining revenues. The formal sector, which contributes over 98% of tax revenue from the industry, is shrinking, while illegal operators continue to thrive unchecked.â€ For the first time in Pakistanâ€™s history, illegal cigarette sales have surpassed legitimate sales for two consecutive years, accounting for 56% of the total market. Despite repeated tax increases on legally compliant brands, these measures have failed to meet revenue targets, instead driving consumers toward cheaper, tax-evading alternatives. â€œThe unchecked growth of illegal cigarettes is not just about lost tax revenue; it is an economic emergency,â€ said Mubashir Akram, National Convenor of ACT Alliance Pakistan. â€œIllegal trade fuels corruption, discourages investment, and weakens Pakistanâ€™s ability to provide essential public services. The government must now take decisive action to enforce tax laws across the country.â€ The report analyzes Pakistanâ€™s tobacco taxation system, identifying inefficiencies that have contributed to the rise of illicit cigarette sales, revenue losses, and public health concerns. It calls for a balanced tax regime that maximizes government revenue while mitigating the negative impacts of excessive taxation. Mubashir Akram stressed that maintaining the status quo places an undue burden on legal businesses while allowing illegal operators to flourish. However, with genuine reforms, rationalized excise duties, and strict enforcement against tax evasion, Pakistan can create a more stable economic environment. The report outlines key policy recommendations, including strengthening enforcement against tax-evading cigarette brands, ensuring full compliance with Track and Trace regulations, and preventing excessive tax hikes on legal businesses. â€œPakistanâ€™s current tobacco taxation strategy is ineffective, leading to a shrinking formal sector, an increase in illicit trade, and substantial revenue losses. A more balanced and well-enforced tax regime is essential to ensuring sustainable revenue generation while addressing market distortions and public health risks,â€ concluded Sakib Sherani. ACT Alliance Pakistan urged the government, regulatory authorities, civil society, and media to work together in combating illegal economic activities. â€œThe cost of inaction is too high. Pakistanâ€™s financial stability, investor confidence, and economic sovereignty depend on eliminating the illegal economy and ensuring a transparent and fair system for all,â€ Mubashir Akram emphasized.

Date: 2025-03-13

Details: Islamabad, March 13, 2025 â€“ The Federal Board of Revenue (FBR) has officially laid out the criteria for placing officers in the Admin Pool, ensuring a structured approach to such assignments. The decision was finalized during an FBR board meeting held on March 13, 2025, and formal instructions have now been issued for implementation. Conditions for Placement in Admin Pool An officer of the FBR may be assigned to the Admin Pool under the following circumstances: a) When the FBR has yet to determine a suitable posting for the officer. b) If the officer has returned from deputation and awaits reassignment. c) If the officer has resumed duty after an extended leave period. d) If the officer returns from medical leave that required relinquishment of charge. e) If the officer completes a training program that necessitated relinquishment of charge. f) If a complaint is lodged against the officer and a fact-finding inquiry is initiated, necessitating temporary removal from the current post. g) If an officer is undergoing an inquiry under the Efficiency and Discipline (E&D) Rules, requiring removal from the present position. h) Any other administrative exigency requiring temporary placement in the Admin Pool. Duration and Review Process â€¢ Placement in the Admin Pool should be for the shortest duration possible, not exceeding forty-five (45) days. â€¢ If an officer remains in the Admin Pool beyond this period, a review committeeâ€”comprising the Member (Admin/HR) and the relevant Member (Operations) of Inland Revenue and Customsâ€”shall evaluate the case. The committee will provide written recommendations to the Chairman FBR regarding further posting or, if necessary, an extension of up to another forty-five (45) days. â€¢ Before the expiry of the extended period, the officer must be reassigned to an appropriate position. Extended Placement Conditions â€¢ Any extension beyond ninety (90) days requires the officerâ€™s consent, except in cases where disciplinary proceedings under the Civil Servants (Efficiency and Discipline) Rules, 2020 are in progress. â€¢ If an ongoing E&D proceeding is in place, the conditions mentioned in previous clauses shall not apply. Salary and Immediate Actions â€¢ Officers in the Admin Pool will continue to receive their salary and allowances under a supernumerary post in their previous office. â€¢ Officers currently in the Admin Pool for over ninety (90) days must be posted within fifteen (15) days of this notification. The FBRâ€™s decision to regulate the placement of officers in the Admin Pool aims to streamline administrative processes and ensure efficiency in officer management across the department.

Date: 2025-03-13

Details: Islamabad, March 13, 2025 â€“ Pakistan has reached a historic milestone by recording 6.51 million Active Taxpayers, the highest number in the countryâ€™s history. This increase reflects the governmentâ€™s strong efforts to promote tax compliance and widen the tax base. According to the latest Active Taxpayers List (ATL) issued on Thursday, the number of Active Taxpayers has surged from 5.34 million recorded on November 1, 2024. The Federal Board of Revenue (FBR) attributes this growth to strict policies designed to encourage tax compliance and discourage non-filers from avoiding their tax obligations. In December 2024, the government introduced a major tax bill in the National Assembly, which included tough restrictions on individuals who do not file tax returns. The FBR has been actively enforcing these measures to improve tax collection and strengthen the financial system. To ensure more people become Active Taxpayers, the government has placed strict limitations on non-filers under a new section of the tax law. These rules prevent non-filers from engaging in important financial activities, such as: 1. Buying or Registering Vehicles â€“ People who are not Active Taxpayers cannot book, purchase, or register motor vehicles. Car manufacturers and excise departments have been instructed to enforce this rule. 2. Property Transactions â€“ Non-filers are not allowed to buy or transfer high-value properties. Land registrars and property offices must confirm tax status before completing any transaction. 3. Investing in Stocks and Mutual Funds â€“ The FBR has asked brokerage firms, banks, and mutual fund companies to block investment activities for those who are not on the Active Taxpayers List. 4. Banking Restrictions â€“ Non-filers will face limits on opening new bank accounts. Only basic â€˜Asaanâ€™ accounts will be allowed. The FBR has also set limits on cash withdrawals to control tax evasion. The FBR has improved the way it updates the Active Taxpayers List. Previously, the list was updated once a year in March, but now it is refreshed daily. This change ensures that new filers are quickly added to the list, promoting better compliance. To further encourage tax filing, the government has introduced penalties for persistent non-filers. These include blocking mobile SIM cards, suspending utility connections, and restricting international travel. However, certain groups, such as overseas Pakistanis, students, and religious travelers, are exempt from these penalties. With these strong enforcement measures, Pakistan is making significant progress in increasing the number of Active Taxpayers. The governmentâ€™s efforts aim to create a fair tax system and strengthen the countryâ€™s economy for long-term growth.

Date: 2025-03-12

Details: March 12, 2025 Islamabad, March 12, 2025 â€“ The Federal Board of Revenue (FBR) has announced the reconstitution of its project team tasked with overseeing the tax system digitalization project. This move aims to enhance efficiency, transparency, and modernization in Pakistanâ€™s taxation system. According to the FBR, the decision supersedes its earlier Notification No. 1152-IR-I/2024 dated May 6, 2024. The newly restructured Project Management Team for the Tax System Digitalization Project has been established as follows: Project Management Team: 1. Mr. Muhammad Khalid Jamil (IRS/BS-20) â€“ Project Director (Tax System Digitalization) / Chief (IR-Transformation Delivery Unit), FBR Headquarters, Islamabad. 2. Mr. Farid Ahmed Khan Salarzay (PCS/BS-19) â€“ Chief (OPS) (Customs-Transformation Delivery Unit), FBR Headquarters, Islamabad. 3. Mr. Taimoor Ali â€“ Focal Person from Karandaaz. The FBR has mandated the Project Management Team to oversee the seamless execution and implementation of the project. This team will play a crucial role in coordinating efforts among various stakeholders to ensure the successful completion of the digitalization initiative. The project is expected to bring significant improvements in tax administration, simplifying processes for taxpayers while strengthening revenue collection mechanisms. A key responsibility of the team is to manage the project from inception to completion, ensuring strict adherence to deadlines, deliverables, and quality benchmarks. The FBR has emphasized that the digitalization project will introduce innovative technologies to streamline tax operations and curb inefficiencies in the existing system. By modernizing the tax infrastructure, the project aims to enhance compliance, reduce manual interventions, and improve overall transparency in revenue collection. The FBR has reiterated its commitment to driving digital transformation, aligning with global best practices in tax administration. The project will also leverage collaborations with private sector partners such as Karandaaz to integrate advanced data analytics and automation solutions. This initiative is expected to significantly contribute to Pakistanâ€™s broader economic reform agenda by strengthening the countryâ€™s fiscal policies. As the project progresses, the FBR will continue to monitor developments and engage relevant stakeholders to ensure its successful implementation. The reconstituted project team is expected to bring renewed focus and expertise to the digitalization efforts, paving the way for a more efficient and transparent tax system in Pakistan.

Date: 2025-03-11

Details: Karachi, March 12, 2025 â€“ The Federal Board of Revenue (FBR) has officially announced an auction of non-duty paid (NDP) vehicles, scheduled to take place on March 13, 2025, in Dera Ismail Khan. This auction presents a unique opportunity for automobile enthusiasts, dealers, and the general public to acquire various vehicles at competitive prices. The auction will feature a diverse range of vehicles, including luxury sedans, SUVs, hatchbacks, and commercial transport options. The non-duty paid status of these vehicles means they were seized due to non-compliance with import regulations and customs duties. The FBR conducts such auctions periodically to regulate the automobile market and generate revenue from confiscated assets. Interested buyers are encouraged to inspect the vehicles before placing their bids. The auction process will be conducted transparently, allowing participants to bid on their preferred vehicles with confidence. The vehicles available for auction include models from renowned international manufacturers, making this event particularly attractive for those seeking high-quality automobiles at reasonable prices. Among the vehicles expected to be up for auction, there will be popular brands such as Toyota, Honda, Suzuki, Mercedes-Benz, BMW, and Mitsubishi. Each vehicle has undergone thorough verification, and the details regarding their condition, engine performance, and documentation will be provided to prospective buyers before the bidding process begins. The FBR has emphasized that all buyers must comply with the necessary legal requirements and complete the registration process for their purchased vehicles. This ensures that the auctioned vehicles are lawfully integrated into the national vehicle registration system. Buyers should also be aware that all vehicles will be sold on an â€˜as-isâ€™ basis, meaning they are responsible for any repairs or modifications required after purchase. The auctioning of non-duty paid vehicles serves multiple purposes, including discouraging illegal vehicle imports, promoting fair trade practices, and boosting government revenue. Additionally, it provides an avenue for individuals to purchase vehicles at potentially lower prices compared to the regular market. Interested participants can visit the designated auction venue in D.I. Khan to view the vehicles before the bidding begins. The FBR has urged all potential buyers to bring necessary identification and financial documentation to facilitate a smooth transaction. This auction presents a significant opportunity for those looking to purchase vehicles at competitive prices while ensuring compliance with legal procedures. As demand for quality automobiles remains high, the FBRâ€™s initiative aims to regulate the market while offering cost-effective solutions to buyers.

Date: 2025-03-11

Details: March 11, 2025 Islamabad, March 11, 2025 â€“ The Federal Board of Revenue (FBR) has appointed Imran Ali Sheikh, an officer of the Inland Revenue Service (IRS) BS-19, as the new Commissioner (Refunds) at the Corporate Tax Office (CTO) Karachi. This decision aims to address delays in refund processing and improve efficiency in taxpayer services. The FBR has transferred Imran Ali Sheikh from his previous role as Commissioner, Zone-II, Regional Tax Office (RTO-II), Karachi, to assume his new responsibilities. Additionally, he has been assigned the additional charge of Commissioner-IR, Zone-I, CTO Karachi, as per the departmentâ€™s regulations. The appointment of the Refund Commissioner follows persistent requests from the Karachi Tax Bar Association (KTBA), which had urged the FBR to fill the long-vacant position. In a formal letter to the FBR Chairman, KTBA emphasized the critical need for an appointed Commissioner Inland Revenue at Zone-II, CTO Karachi, to facilitate the timely processing of refunds and ensure smooth tax administration. KTBA referred to Notification No. 1977-IR-I/2024, dated July 30, 2024, which had temporarily assigned additional responsibilities to a Commissioner Inland Revenue (OPS) (Refunds). However, with the three-month tenure expiring, the position had remained vacant, leading to administrative bottlenecks and an increasing backlog of refund cases. The absence of a dedicated Refund Commissioner had resulted in substantial delays in taxpayer services, including the issuance of exemption certificates, refund processing, and general compliance-related procedures. These disruptions had created significant challenges for taxpayers and tax professionals alike, impacting the efficiency and transparency of the FBRâ€™s operations. In addition to this key appointment, the FBR has also announced several other high-level transfers: â€¢ Mrs. Shah Bano G.M Khan (IRS/BS-20) has been transferred to the position of Director General (Special Initiatives), FBR, Islamabad, from her previous role as Member (Admin Pool), FBR Islamabad (Stationed at Karachi). â€¢ Ms. Asma Aftab (IRS/BS-20) has been posted as Commissioner-IR, Zone-II, RTO-II, Karachi, shifting from her previous position as Commissioner, Zone-II, CTO Karachi. â€¢ Rizwan Memon (IRS/BS-20) has been reassigned as Commissioner-IR, Zone-II, CTO Karachi, moving from his previous role as Commissioner (Refunds), CTO Karachi. â€¢ Shiraz Ali (IRS/BS-18) has been appointed as Second Secretary (Management/HR IR), Admin/HR Wing, FBR, transitioning from his previous role as Second Secretary (Admin Pool), FBR Islamabad. The FBR remains committed to enhancing administrative efficiency by ensuring that key leadership roles, such as the Refund Commissioner, are filled promptly to support taxpayers and uphold transparency in financial operations.

Date: 2025-03-10

Details: Finance Minister Muhammad Aurangzeb on Monday said the government seeks to diversify beyond the banking sector for lending purposes and urged the countryâ€™s insurance industry to meet its growing demand. This includes expanding the sector by focusing on innovation, enhancing productivity, and driving further growth. The finance minister made these remarks during a meeting held with a delegation of chief executive officers (CEOs) from Pakistanâ€™s leading insurance companies, read a statement released by the Finance Division. According to the statement, Aurangzeb assured the group that the government would carefully consider their proposals, particularly regarding taxation and policy measures necessary for the future growth of the industry. He highlighted that the consultative process for the upcoming federal budget had been deliberately advanced this year. Aurangzeb highlights increasing risks facing insurance industry â€œOver 90% of the process has already been completed, with recommendations, proposals, and suggestions received from various stakeholders, including the insurance sector,â€ he said. The finance minister emphasized that a team of experts at the Federal Board of Revenue (FBR) is diligently reviewing each proposal submitted by different sectors, ensuring that the impact on the economy and revenue is thoroughly evaluated. This process aims to develop realistic and actionable policy interventions that will foster the growth of the industry and critical sectors of the economy, he added. During the meeting, the former banker reaffirmed the governmentâ€™s commitment to supporting the insurance sector, recognizing its potential for significant private-sector investment. The discussion focused on the growth of the insurance sector and its contributions to the national economy, with a particular emphasis on its impact on the health system, investments in Pakistan Investment Bonds (PIBs), capital markets, and long-term investment opportunities. The finance minister assured the delegation that the government would continue to work closely with industry leaders and stakeholders to ensure the long-term prosperity of the insurance sector, which is a vital component of Pakistanâ€™s economic landscape. Public money: ECC directs ministries, divisions to replace insurance with bank guarantee Earlier, the delegation presented key proposals and suggestions aimed at boosting the growth and productivity of the insurance sector. The presentation also highlighted the current statistics of the industry, which boasts assets worth Rs2,900 billion, alongside 20,000 direct and 234,000 indirect employments. The sectorâ€™s contributions were underscored, with Rs613 billion in gross written premiums and Rs373 billion in claims paid to date, read the statement. Aurangzeb welcomed the delegationâ€™s presentation and expressed his appreciation for the valuable insights provided.

Date: 2025-03-08

Details: The Federal Board of Revenue (FBR), Pakistanâ€™s premier tax regulatory authority, has introduced a detailed procedure for determining taxable income. This initiative aims to provide taxpayers with a clear understanding of the tax calculation process, ensuring compliance with the countryâ€™s tax laws. Understanding Taxable Income Before registering and filing an income tax return, the FBR advises individuals to develop a fundamental understanding of these processes. Familiarity with key tax concepts not only simplifies compliance but also ensures accurate reporting of taxable income. Taxable income refers to total income after deductions for eligible donations and certain allowable expenses. The calculation is essential for determining tax liability and varies based on the nature of the income earned by individuals and businesses in Pakistan. Total Income and Heads of Income Total income is the sum of all earnings categorized under different heads as per the Income Tax Ordinance, 2001. The five main heads of income include: â€¢ Salary â€¢ Income from property â€¢ Business income â€¢ Capital gains â€¢ Income from other sources Resident vs. Non-Resident Status The FBR defines an individual as a resident for a tax year if they meet specific criteria, such as spending at least 183 days in Pakistan within the tax year. Companies and Associations of Persons (AOPs) are considered residents if their control and management are wholly or partly situated in Pakistan during the tax year. Non-residents, on the other hand, are individuals or entities that do not meet the residency requirements. Pakistan-Source and Foreign-Source Income Pakistan-source income includes earnings derived from employment, property, business, dividends, interest, pensions, and other financial activities within the country. Foreign-source income, however, encompasses all earnings generated outside Pakistan. Understanding these distinctions is crucial for accurately determining taxable income under FBR regulations. Definitions of Entities Under Tax Laws The FBR classifies taxable entities into various categories, including individuals, companies, associations of persons, trusts, and nonprofit organizations. The scope of taxable income for each category varies based on Pakistanâ€™s tax regulations. Tax Year and Special Tax Year A tax year in Pakistan spans from July 1 to June 30 and is named according to the calendar year in which it concludes. Some businesses may follow a special tax year based on their financial reporting requirements. By establishing a well-defined process for taxable income computation, the FBR aims to enhance tax compliance and streamline tax collection in Pakistan. Understanding these guidelines is essential for individuals and businesses to fulfill their tax obligations accurately and efficiently.

Date: 2025-03-07

Details: Karachi, March 7, 2025 â€“ The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to seek access to internet protocol (IP) data older than one year, similar to the access granted to other agencies under the Investigation for Fair Trial Act, 2013 (IFTA). This directive aims to overcome technical limitations in tax fraud investigations and ensure necessary scrutiny in fraudulent tax registration cases. The FTO has further instructed the Member (Operations)/Director General IT-DT, FBR to conduct an inquiry into the fraudulent online registration of a complainant under Section 181 by an unidentified officer. The investigation is expected to rectify the matter and prevent similar tax frauds in the future. READ MORE: FTO Uncovers Rs 9.38 Billion Annual Electricity Tax Loss Cyber Criminals Exploit CNIC for Tax Fraud In a recently unearthed case, the FTO has uncovered a significant tax fraud where cybercriminals misused the computerized national identity card (CNIC) of a junior clerk in Sindh to file fraudulent income tax returns. This led to the creation of a fake tax liability based on a non-existent immovable property. The FTOâ€™s report highlighted that Pakistan Revenue Automation Limited (PRAL) failed to provide essential data, such as the cell number and email address linked to the fraudulent registration. This information is crucial for identifying the cybercriminals involved in the case. The complainant, a junior clerk in the Sindh Governmentâ€™s S&GAD & Coordination Department, was illegally registered for income tax in 2019 without his knowledge. Fake tax returns were then filed for tax years 2014 and 2015, falsely declaring an income of Rs 6.5 million from salary, despite his actual monthly earnings being around Rs 20,000, well below the taxable income threshold at the time. Unlawful Tax Liability and Account Attachment The fraudulent tax filings resulted in an unlawful tax liability of Rs 63.03 million, imposed on August 7, 2024, through an ex-parte Section 122(5A) assessment order. The tax department subsequently enforced recovery by attaching the complainantâ€™s bank accounts, including his salary account, making it difficult for him to support his family of five, including three children. FTOâ€™s Directives for Immediate Action The FTO has issued the following directives to the FBR: 1. Immediate Detachment of Salary Account â€“ The Commissioner-IR, Zone-I, RTO-II Karachi must detach the complainantâ€™s salary account immediately, as no evidence suggests his involvement in the fraud. Compliance is required within 15 days. 2. Investigation into IP Address and Cell Number â€“ The Director General, Intelligence & Investigation (I&I) Inland Revenue (IR) must initiate a fact-finding inquiry to trace the cybercriminals by tracking the IP address and cell number linked to the fraudulent registration. 3. Suspension of Recovery Proceedings â€“ The Commissioner, Zone-I, RTO-II Karachi has been instructed not to pursue recovery proceedings until the DG I&Iâ€™s investigation is completed. If the complainant is found innocent, the ex-parte assessment order dated August 7, 2024, must be revisited under Section 122A. The FTOâ€™s directives emphasize the need for enhanced cybersecurity measures in tax registration and strict accountability in cases of fraudulent tax assessments. The investigation is expected to set a precedent for handling cyber fraud cases in tax administration effectively.

Date: 2025-03-07

Details: Karachi, March 7, 2025 â€“ The collection of sales tax on motor cars has witnessed an extraordinary 193% increase during the first half (July â€“ December) of the current fiscal year 2024-25, according to a report released by the Federal Board of Revenue (FBR). The FBR reported that it collected Rs 12.85 billion in sales tax on motor cars during this period, a significant surge compared to Rs 4.39 billion collected in the corresponding half of the previous fiscal year. The sharp rise in sales tax collection reflects the substantial growth in the automobile sector and increased demand for motor cars. The increase in sales tax revenue can be largely attributed to a remarkable 54% growth in motor car sales during the first half of the fiscal year 2024-25. According to data from the Pakistan Auto Manufacturers Association (PAMA), total motor car sales during this period reached 60,676 units, significantly higher than the 39,454 units sold in the same period last year. In December 2024 alone, motor car sales stood at 9,800 units, reflecting a 3% Month-on-Month (MoM) decline but an impressive 69% Year-on-Year (YoY) increase. Despite the minor MoM decline, the overall YoY growth remains strong, contributing positively to the surge in sales tax collection. The FBR further reported that sales tax collection on motor cars experienced a staggering 452% increase in December 2024, reaching Rs 2.19 billion, compared to Rs 397 million collected in the same month of the previous fiscal year. This exponential growth in sales tax revenue highlights the ongoing expansion of the automobile market and the effectiveness of tax policies targeting the sector. Several factors have contributed to the rise in motor car sales, including improved consumer purchasing power, the launch of new vehicle models, and lower interest rates, which have made car financing more accessible. Additionally, policy measures aimed at boosting economic activity have further fueled demand for motor cars, thereby driving up sales tax revenues. The FBR remains committed to optimizing sales tax collection from the automobile sector while ensuring compliance and facilitating growth in the industry. Moving forward, continued monitoring of motor car sales trends and policy adjustments will be crucial in sustaining revenue growth from this segment.

Date: 2025-03-07

Details: Karachi, March 7, 2025 â€“ The Federal Board of Revenue (FBR) has reported an impressive 40% surge in tax payments made alongside tax return filings for the tax year 2024. This significant increase highlights the effectiveness of the governmentâ€™s recent tax enforcement measures and the growing compliance among taxpayers. For the first half of the fiscal year ending on December 31, 2024, the FBR disclosed that taxpayers collectively deposited Rs 199.61 billion at the time of filing their tax returns. This marks a sharp rise from Rs 142.23 billion recorded during the same period in the previous tax year, demonstrating a stronger tax culture in the country. The FBR has implemented stringent measures to ensure that individuals and businesses meet their tax return obligations. These efforts resulted in a record number of tax return filings, along with a substantial boost in tax collection. The deadline for submitting tax returns was initially set for September 30, 2024, for salaried individuals, business entities, and Associations of Persons (AOPs). However, it was later extended to October 14, 2024, to accommodate additional filings. Meanwhile, corporate taxpayers were required to file their tax returns by December 31, 2024. In addition to tax return filings, the FBR also reported a notable increase in advance tax collections. During the first half of the fiscal year 2024-25, the FBR collected Rs 916 billion in advance tax, reflecting a 27% increase compared to Rs 720 billion collected during the corresponding period of the previous year. This upward trend in tax revenue underscores the efficiency of the FBRâ€™s taxation policies and enforcement strategies. Overall, the total voluntary tax payments, including tax payments accompanying tax return submissions, surged to Rs 1.12 trillion during the first half of the current fiscal year. This represents a 29.3% increase from Rs 862 billion collected in the same period of the last fiscal year. The rise in tax return filings and payments underscores the FBRâ€™s success in broadening the tax base and ensuring greater compliance. The FBR remains committed to further strengthening tax compliance through digital monitoring, audits, and strict enforcement actions. Taxpayers are encouraged to continue timely tax return submissions to contribute to national revenue growth and avoid penalties.

Date: 2025-03-06

Details: Karachi, March 6, 2025 â€“ A group of banks in Pakistan is preparing to approach the Supreme Court to challenge the recent Sindh High Court decision regarding the windfall tax imposed on foreign exchange income. This move comes as banks seek legal recourse against what they deem an unfair tax burden. According to the annual report for 2024, Habib Bank Limited (HBL) revealed that in 2023, a windfall tax was levied on the foreign exchange earnings of banks for the years 2021 and 2022. For HBL alone, the calculated tax liability for these two years amounts to Rs 4,865 million, for which the tax department has already issued a recovery notice. In response, the bank had initially filed a Constitutional Petition in the Sindh High Court, contesting the legality of S.R.O 1588 (l)/2023, issued on November 21, 2023, which imposed the windfall tax. The court had temporarily suspended the operation of the S.R.O pending further hearings. Similar relief was granted to other banks by the High Courts of Lahore, Islamabad, and Peshawar. READ MORE: SHC Upholds Windfall Tax, Denies Suspension Request However, in a recent ruling, the Sindh High Court dismissed the banksâ€™ petition, effectively upholding the tax imposition. In light of this, the banks now plan to escalate the matter to the Supreme Court, challenging the decision on constitutional, legal, and procedural grounds. Based on legal advice, the banks remain optimistic that their stance will ultimately prevail, and therefore, no provision for this tax liability has been made in their financial statements. As per the annual financial statement, the income tax returns of HBL have been duly submitted up to the accounting year 2023. As per the Income Tax Ordinance, 2001, these returns are treated as deemed assessments under Section 120. However, the Income Tax Department has made amendments to HBLâ€™s prior assessments, covering up to 2022. The key areas of dispute include gains from the translation of net investment in foreign branches, taxable income subject to an enhanced rate, retirement benefits, and provisions against loans, advances, investments, and other assets. READ MORE: Banks Pay Rs 25 Billion Windfall Tax After Petition Dismissal These taxation matters are currently under review at different levels of appeal, with the bankâ€™s management, in consultation with its tax advisors, confident of a favorable outcome. Similarly, the income tax returns for the bankâ€™s branches in Azad Kashmir, Gilgit-Baltistan, and overseas jurisdictions have been filed up to the 2023 accounting year, with returns in these regions also treated as deemed assessments under the same ordinance. Furthermore, domestic and overseas subsidiaries of banks have submitted their income tax returns to their respective tax authorities for the 2023 accounting year, as legal battles over tax assessments continue to unfold. The outcome of this case in the Supreme Court could have far-reaching implications for the banking sector and its future tax obligations.

Date: 2025-03-06

Details: Karachi, March 6, 2025 â€“ BankIslami Pakistan Limited has decided to challenge the imposition of windfall tax in the Supreme Court of Pakistan after its petition was dismissed by the Sindh High Court. This move comes as part of the bankâ€™s ongoing legal battle against the tax authorities regarding the levy. The Sindh High Court recently rejected a petition filed by multiple banks, including BankIslami, that sought suspension of the windfall tax. According to the bankâ€™s Annual Report 2024, the tax was levied under SRO 1588(I)/2023, issued on November 21, 2023, which designated banking companies as a â€˜sectorâ€™ for taxation under Section 99D of the Income Tax Ordinance, 2001, applicable to tax years 2022 and 2023. READ MORE: SHC Upholds Windfall Tax, Denies Suspension Request Following this decision, the tax authorities issued a recovery notice to BankIslami, creating a demand of Rs 594 million. In response, the bankâ€™s legal counsel challenged the levy in court. However, while the Sindh High Court ruled against BankIslami, similar petitions in the Islamabad High Court and Lahore High Court have resulted in a suspension of Section 99Dâ€™s operation. As a result, BankIslami has now decided to escalate the matter to the Supreme Court, along with a stay application against the levy. The bankâ€™s management, based on legal advice, remains confident that their appeal will succeed, and therefore, no provision for the tax liability has been made in the financial statements. Beyond the windfall tax issue, BankIslami is engaged in several tax-related disputes. The bankâ€™s income tax returns for the years 2023 and 2024 have been filed, while tax assessments have been conducted by the authorities. BankIslami has paid the demanded amounts under protest and has lodged appeals with the Appellate Tribunal Inland Revenue (ATIR), which are still pending. Additionally, BankIslami is dealing with unresolved tax matters related to the defunct KASB Bank Limited. Several appeals regarding tax assessments dating back to 2003, 2005, and 2010 are currently under review. While the ATIR has ruled in the bankâ€™s favor in some cases, others remain pending. READ MORE: Banks Pay Rs 25 Billion Windfall Tax After Petition Dismissal BankIslami is also contesting a total demand of Rs 102.199 million from the Sindh Revenue Board (SRB) regarding the imposition of sales tax on services. Appeals are ongoing before the Commissioner Appeal, SRB, and the Supreme Court. Furthermore, the bank has received multiple tax monitoring notices for tax years 2017 to 2023, prompting further appeals and legal proceedings. Despite these ongoing matters, BankIslamiâ€™s management remains optimistic about a favorable resolution.

Date: 2025-03-06

Details: Karachi, March 6, 2025 â€“ The Karachi Chamber of Commerce and Industry (KCCI) has voiced serious concerns regarding the fairness and legality of tax enforcement actions targeting the textile sector. In a formal letter addressed to the Chief Commissioner Inland Revenue (CCIR) of the Corporate Tax Office (CTO) Karachi, KCCI highlighted the growing distress among textile exporters over unjustified tax measures imposed by senior tax officers. KCCI has been inundated with complaints from textile businesses in Karachi regarding arbitrary and allegedly unlawful actions taken against them. Many textile firms have reported instances of harassment linked to pre-suspension notices issued by the tax office. These notices have frequently led to the suspension or blocklisting of businesses based solely on alleged issues with certain registered suppliers in their chain. However, investigations reveal that these suppliers were legitimate and active at the time of transactions, making the subsequent punitive actions against textile exporters both unjustified and legally questionable. One of the primary concerns raised by KCCI is the flawed basis for these tax enforcement actions. Many affected taxpayers belong to the textile export industry, where supplies are classified as zero-rated under the existing tax laws. Consequently, allegations regarding the issuance of fraudulent or â€œflyingâ€ invoices are entirely misplaced, as textile exports fall outside the scope of such accusations. Furthermore, the crux of these tax claims revolves around issues within the supply chain rather than the textile exporters themselves. Legal principles dictate that any scrutiny should focus on the suppliers identified as problematic rather than penalizing the purchasers, who conducted transactions in good faith. The Supreme Court of Pakistan has also ruled against disallowing input tax deductions for purchases from suppliers classified as active at the time of transaction. This legal precedent further underscores the overreach of tax enforcement measures by the CTO Karachi. Section 21 of the Sales Tax Act is designed to address exceptional cases of fraud; however, KCCI has observed that tax officials are misusing this provision to exert undue pressure on reputable textile exporters. The intent appears to be more aligned with meeting arbitrary revenue targets rather than ensuring fair taxation. If there are claims of inadmissible input tax or non-payment of sales tax, Section 11 of the Sales Tax Act (STA) 1990 provides a legal mechanism for redressal. Unfortunately, these due processes are being systematically ignored by the tax office. Reports indicate that certain tax officers are coercing legitimate textile exporters into making payments for alleged tax liabilities under the threat of suspension. This contradicts legal provisions that require tax recovery to be pursued from defaulting suppliers rather than buyers. Such an approach not only violates established laws but also imposes an unfair financial burden on the textile sector. Despite reassurances from the Federal Board of Revenue (FBR) that no action would be taken when unpaid input tax amounts to less than 5% of total turnover, KCCI has found that this assurance is not being honored. This selective and arbitrary enforcement raises further concerns about the intent behind these measures. Unlike other tax offices across Karachi and Pakistan, the CTO Karachi appears to be disproportionately targeting textile exporters, raising suspicions of discriminatory treatment. Additionally, many notices issued by the tax office lack transparency, preventing textile businesses from adequately assessing the claims made against them. In multiple cases, suppliers flagged as problematic remain active, and in some instances, the tax claims imposed on purchasers exceed the actual liability of those suppliers. KCCI firmly believes that such unjust actions pose a significant threat to Pakistanâ€™s textile export industry. Given Karachiâ€™s status as a crucial hub for textile exports, these measures could severely impact both businesses and the overall economy. The Chamber, therefore, demands an immediate and thorough investigation into the practices of the CTO Karachi and urges authorities to share a comprehensive list of suspension notices issued from November 1, 2024, to the present date. Additionally, KCCI calls for full disclosure of recoveries made and actions taken against defaulting suppliers. Restoring fairness and transparency to tax enforcement is critical for ensuring that textile exporters can operate without fear of undue harassment. KCCI remains committed to advocating for the rights of textile businesses and calls on relevant authorities to rectify these unjustified practices at the earliest possible opportunity.

Date: 2025-03-05

Details: Islamabad, March 5, 2025 â€“ The Federal Board of Revenue (FBR) has officially designated Najeeb Ahmad Memon as its spokesperson, reinforcing its commitment to transparent communication and effective policy dissemination. According to an official notification, Najeeb Ahmad Memon, a BS-20 officer of the Inland Revenue Service (IRS), has been entrusted with the responsibility of representing FBR in all official matters. Currently serving as Member (OPS) (IR-Policy) at FBR Headquarters in Islamabad, Memon will now act as the primary point of contact for all media and public engagements related to FBR. His appointment takes effect immediately and will remain in place until further orders. FBRâ€™s Institutional Evolution The Federal Board of Revenue (FBR) has a long-standing history in Pakistanâ€™s financial and taxation framework. Originally established as the Central Board of Revenue (CBR) on April 1, 1924, through the enactment of the Central Board of Revenue Act, the institution has played a pivotal role in the countryâ€™s economic landscape. In 1944, a dedicated Revenue Division was introduced under the Ministry of Finance to streamline tax administration. Following Pakistanâ€™s independence, this structure remained intact until August 31, 1960, when, based on recommendations from the Administrative Reorganization Committee, FBR was designated as an attached department of the Ministry of Finance. Further structural reforms took place in 1974, leading to the creation of the position of Chairman FBR, who was granted ex-officio status as an Additional Secretary. This change allowed the Secretary of Finance to be relieved from the role of ex-officio Chairman of FBR, enabling better administrative efficiency and fiscal policy execution. To enhance operational autonomy, FBR was restored as a Revenue Division under the Ministry of Finance on October 22, 1991. However, in January 1995, the division was abolished, reverting FBR to its previous organizational status. The Revenue Division was later reinstated on December 1, 1998, reaffirming FBRâ€™s strategic role in revenue collection and fiscal management. A significant milestone came with the enactment of the FBR Act in July 2007, transforming the Central Board of Revenue into the Federal Board of Revenue (FBR) as it stands today. The board continues to oversee tax policies, revenue collection, and enforcement mechanisms to ensure compliance and economic stability in Pakistan.

Date: 2025-03-05

Details: Karachi, March 5, 2025 â€“ The Karachi Tax Bar Association (KTBA) has urged the Federal Board of Revenue (FBR) to take immediate action by appointing a Commissioner Inland Revenue at Zone-II, Corporate Tax Office (CTO), Karachi, to facilitate the efficient processing and timely issuance of refunds. In an official letter addressed to FBR Chairman Rashid Mahmood Langrial, KTBA referenced Notification No. 1977-IR-I/2024, dated July 30, 2024, which assigned the additional charge of Commissioner Inland Revenue (OPS) (Refunds) to oversee Zone-II, Corporate Tax Office Karachi. However, KTBA highlighted that the designated three-month tenure has now expired, effectively leaving the office vacant and creating a bureaucratic vacuum in tax administration. KTBA stressed that the absence of a dedicated Commissioner at this pivotal position has led to substantial delays in taxpayer services. These disruptions include the issuance of exemption certificates, processing of refunds, and overall compliance-related procedures, causing mounting difficulties for both taxpayers and tax professionals. The prolonged inaction is exacerbating challenges in an already complex tax framework, further diminishing efficiency and transparency within the system. Given the critical nature of this vacancy, KTBA has emphasized the necessity of an immediate appointment to prevent further administrative bottlenecks. The association has pointed out that businesses and individuals relying on timely tax refunds and exemptions are experiencing unnecessary financial and operational hurdles due to the leadership void at the CTO. KTBA underscored that FBR must recognize the gravity of the situation and swiftly appoint a qualified and experienced Commissioner to streamline processes and uphold the integrity of the tax system. A delay in this crucial appointment not only impacts revenue collection but also undermines taxpayer confidence in the governmentâ€™s ability to ensure a functional and responsive taxation system. Furthermore, KTBA reiterated that a fully functional tax office is imperative for fostering compliance, reducing inefficiencies, and facilitating smoother business operations. The association firmly believes that appointing a Commissioner Inland Revenue for Zone-II, Corporate Tax Office Karachi, will reinstate confidence among taxpayers and reinforce FBRâ€™s commitment to effective tax administration. KTBA remains committed to advocating for the interests of taxpayers and tax professionals and urges FBR to address this pressing concern without further delay. The association firmly believes that a swift resolution to this issue will enhance the efficiency of the tax machinery and contribute to a more transparent and business-friendly environment.

Date: 2025-03-05

Details: Karachi, March 5, 2025 â€“ Standard Chartered Bank (SCB) Pakistan Limited announced on Wednesday that it paid Rs 59 billion in income tax for the calendar year 2024, reflecting a corporate tax rate of 54.2%. This marks a substantial increase from the previous yearâ€™s tax payment of Rs 47.8 billion, which was applied at an average tax rate of 52.2%. According to SCB Pakistan, the bank also played a significant role in revenue collection for the national exchequer, acting as a withholding tax agent. It collected Rs 18.1 billion in withholding tax under various provisions of the Income Tax Ordinance 2001, up from Rs 14.3 billion in 2023. Furthermore, SCB Pakistan contributed an additional Rs 1.8 billion (2023: Rs 1.4 billion) in Federal Excise Duty and Provincial Sales Taxes. SCB Pakistan delivered yet another record-breaking year, achieving a profit before tax of Rs 100.6 billion, marking a 13% increase from the prior year. The bank also reported overall revenue growth of 9%, while client income surged by 13%, with all business segments making positive contributions. However, operating expenses rose by 19%, largely driven by inflationary pressures. A prudent risk management strategy, combined with recoveries of bad debts, resulted in a net release of Rs 4.4 billion over the course of the year. On the liabilities side, SCB Pakistanâ€™s total deposits grew by Rs 116 billion, reaching Rs 836 billion by the end of 2024. Additionally, current accounts experienced a robust increase of Rs 37 billion (10% growth), now constituting 48% of the total deposit base. Conversely, on the assets front, net advances declined by Rs 49 billion (22%) during the year. Despite this reduction, SCB Pakistan remains well-positioned to serve its clientsâ€™ financial needs while maintaining a balanced and sustainable portfolio. SCB Pakistan continues to invest heavily in digital capabilities and infrastructure, aiming to enhance customer banking experiences through innovative solutions. The bank has made notable strides in strengthening its control and compliance environment, with a focus on people, culture, and systems. The management remains dedicated to sustained growth, ensuring that SCB Pakistan remains at the forefront of the industry by delivering best-in-class services, optimizing its product suite, and implementing a strategic approach to balance sheet expansion.

Date: 2025-03-04

Details: ISLAMABAD: The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to ensure all salary payments made to the teachers and schools staff performing supervisory and invigilation duties and paper marking are not subjected to withholding tax under Section 153 (Services rendered) of the Income Tax Ordinance 2001. According to an order issued by the FTO on Monday, the complainants are government school teachers, who in addition to their regular teaching assignments, are doing supervision and invigilation work, holding of examinations and marking of papers for the Board of Intermediate & Secondary Education (BISE) Gujranwala. Currently the payments received by them from the Board are being subjected to withholding tax u/s 153(1)(b)(Services rendered), instead of head salary, under Section 149 of the Income Tax Ordinance, 2001 (the Ordinance). The FTO order declared that the remuneration, fees/ wages paid by the Boards of Intermediate & Secondary Education to the supervisory and invigilation staff and paper markers, under an arrangement with their employers, fully falls under the head salary; therefore it warrants withholding tax u/s 149 instead of Section 153(i)(b) of Income Tax Ordinance, 2001. Discriminatory withholding under Section 153(1)(b) in such cases is an act of maladministration in terms of Section 2(3) (i)(a)(b)(c) and (ii) of FTO Ordinance, 2000. The FBR is directed to ensure that the RTO Gujranwala, in coordination with Board of Intermediate & Secondary Education, Gujranwala reviews its current withholding regime in the cases of complainants, so that all payments made to the teachers and schools staff performing supervisory & invigilation duties and paper marking are subjected to tax withholding u/s 149, FTOâ€™s directions added. The FTO order stated that supervision & invigilation, holding of examinations and marking of papers, all these processes constitute an integral part of any education system. It is an admitted fact that the said services mainly aim at conducting the processes of evaluation and grading of students. Similarly, this evaluation is solely based upon the curriculum& course material taught by the same teachers; therefore, it is part and parcel of education system and an extension of teaching assignment. These services are provided by the teachers during their duty hours and with the full consent and under directions of their employer; i.e., provincial education department. All schools & colleges are obligated to share the lists of their respective teachers & staff, available for the aforesaid assignments and any refusal is construed as non-compliance of office duties. Teachers performing the above services cannot negotiate the rates of remuneration and are paid the amounts as fixed by the BOGs of Education Boards. It is pertinent to mention here that secretary Schools and Colleges are ex-officio members of said BOGs. The amounts paid in the above connection are quite nominal because all teachers and staff members are rotated during the year Moreover, in the cases of primary schoolteachers and lower invigilation staff normally salaries fall below the tax limit; however, they are heavily subjected to Section 153(i)(b) for their invigilation duties, the FTO order added. Copyright Business Recorder, 2025

Date: 2025-03-04

Details: Director General Syed Hamid Ali of the Directorate of Valuation of Pakistan Customs has assured the business community that valuation processes will be conducted with fairness and transparency to ensure accurate and justifiable assessments. To enhance facilitation for local traders, the capacity of the Lahore office will be expanded, reducing reliance on Karachi for valuation matters. During a meeting with Lahore Chamber of Commerce and Industry (LCCI) President Mian Abuzar Shad and other senior representatives, the DG acknowledged tradersâ€™ concerns regarding customs valuation. He supported the proposal to address valuation issues within Lahore, eliminating the need for frequent travel to Karachi, which has long been an inconvenience for upcountry traders. LCCI President Mian Abuzar Shad highlighted that an active and efficient role of the Directorate of Customs Valuation could significantly ease business operations, benefiting industries and the overall economy. He proposed that if at least ten valuation requests originate from Lahore, customs authorities should conduct the meetings in the city to save both time and financial resources for local businesses. Similarly, valuation review meetings should also take place in Lahore to facilitate traders from upcountry regions. A major concern raised during the discussion was the basis of customs valuation for imported goods. Shad noted that in some cases, valuation is determined at retail prices rather than wholesale rates, leading to inflated assessments. He explained that importers sell to wholesalers at minimal margins, whereas wholesalers and retailers apply their own markups. Since retail pricing varies across different markets, using market rates as a valuation benchmark is an unjust approach. He further elaborated that customs authorities often rely on market surveys and import data to determine valuations through the Work Back Method. However, bulk shipments booked in containers naturally have lower per-unit costs, which should be reflected in customs assessments. To improve transparency, he suggested that the criteria for market-based inquiries be formally notified, allowing importers to calculate expected valuations in advance. Additionally, he urged customs authorities to provide at least ten daysâ€™ prior notice if importer input is required. LCCI Senior Vice President Engineer Khalid Usman voiced concerns over the immediate enforcement of new valuation rulings, which often results in financial losses for importers. He recommended a one-month grace period before implementing revised customs valuation rules to allow traders to adjust. Concluding the discussion, Shad emphasized the importance of continued engagement between customs authorities and the business community. Regular consultations and open communication channels, he noted, are essential for ensuring a favorable trade environment and addressing valuation-related concerns effectively.

Date: 2025-03-04

Details: Karachi, March 4, 2025 â€“ Pakistan Customs has announced a revision in the valuation of mobile phone LCD screens to determine the applicable duty and taxes at the import stage. This move aims to align customs values with prevailing market trends and ensure fair assessments. The Directorate General of Customs Valuation has issued Valuation Ruling No. 1979/2025, revising customs values for mobile phone LCD screens. This update marks the first revision in nearly three years, replacing the previous valuation ruling No. 1576, which was issued on December 12, 2021. Background of the Revision: The need for revision arose due to outdated customs values, which had not been adjusted since 2021. After analyzing import data, current market trends, and differences in market prices, Pakistan Customs initiated a comprehensive review under Sections 25 and 25A of the Customs Act, 1969. The aim was to ensure that customs values reflect real-time market conditions. Analysis Process: A meeting to determine customs values for mobile phone LCD screens was held on February 18, 2025. Various stakeholders participated, presenting their viewpoints and submitting relevant import documents to support their claims. Pakistan Customs retrieved and scrutinized 90 days of import data to establish accurate valuations. Some references to previously declared values were also taken into account during this process. Revised Customs Values for Mobile Phone LCD Screens: Based on the analysis, the following customs values have been determined: â€¢ Mobile phone LCD screens (all types without PCB) imported by sea: $7.30 per kg for origins from China and Hong Kong, and $9.05 per kg for other origins. â€¢ Mobile phone LCD screens (all types without PCB) imported by air: $5.60 per kg for origins from China and Hong Kong, and $7.00 per kg for other origins. Implementation of Customs Valuation: In cases where declared invoice values retrieved from consignments are higher than the revised customs values, the assessment will be conducted based on the higher values in accordance with sub-section (1) of Section 25 of the Customs Act, 1969. This ensures transparency in valuation and compliance with customs regulations. The revision by Pakistan Customs is expected to bring clarity and uniformity in the assessment of mobile phone LCD screens, ensuring that importers adhere to accurate and up-to-date customs values.

Date: 2025-03-04

Details: Islamabad, March 4, 2025 â€“ The Federal Board of Revenue (FBR) has officially constituted a monitoring committee to supervise the establishment and operations of the International Center for Tax Excellence (ICTE). The ICTE, which was introduced under Section 230J of the Income Tax Ordinance, 2001, aims to enhance Pakistanâ€™s tax administration through research, policy development, and international cooperation. In a notification issued by the FBR, it was confirmed that the monitoring committee has been formed to ensure the full operationalization of ICTE. The committee consists of key FBR officials, including: 1. Muhammad Iqbal (IRS/BS-21) â€“ Member (Admin/HR), FBR Headquarters, Islamabad â€“ Chairman of the Committee 2. Ahmad Shuja Khan (IRS/BS-21) â€“ Member (Audit/CRM), FBR Headquarters, Islamabad â€“ Committee Member 3. Ardsher Saleem Tariq (IRS/BS-21) â€“ Member (Reforms & Modernization), FBR Headquarters, Islamabad â€“ Committee Member 4. Fida Muhammad (IRS/BS-19) â€“ Chief (International Taxes), Directorate General of International Tax Operations, FBR Headquarters, Islamabad â€“ Committee Member The ICTE was established as part of the Finance Act, 2023, to serve as a premier institution for tax policy development, international tax cooperation, revenue forecasting, and tax administration research. The FBR has outlined the core functions of ICTE, which include: â€¢ Conducting interdisciplinary research on tax policy and administration. â€¢ Enhancing capacity building of Inland Revenue Officers. â€¢ Organizing international seminars and workshops on global tax challenges. â€¢ Improving revenue collection strategies within the existing framework. â€¢ Advising the FBR and the federal government on policy matters. The governance of ICTE will be overseen by two key bodies: the Nominating Committee and the Executive Committee. The Nominating Committee, comprising the Minister-in-Charge, Secretary Revenue Division, and Secretary Finance, will recommend candidates for the role of Executive Director and independent members of the Executive Committee. The Executive Committee, including senior FBR officials and independent members, will ensure ICTEâ€™s alignment with national tax policies. The FBR has also confirmed that the Executive Director will act as the Chief Executive Officer of ICTE, overseeing its daily administrative functions independently. Additionally, the Executive Committee will set the annual objectives for ICTE, ensuring that its research and initiatives align with the FBRâ€™s strategic goals. To further ensure transparency, the FBR has stipulated that ICTE will follow strict data protection protocols, maintaining taxpayer confidentiality while utilizing anonymized data for research and policy recommendations. The monitoring committee will also be responsible for overseeing the recruitment of ICTE personnel, with at least 50% of staff positions reserved for serving Inland Revenue officers with a minimum of five years of experience in tax policy or administration. The FBR remains committed to strengthening Pakistanâ€™s tax infrastructure through ICTE, ensuring that the institute plays a vital role in modernizing tax policies, fostering international collaboration, and enhancing revenue generation mechanisms. With the monitoring committee in place, the operationalization of ICTE is expected to progress smoothly, reinforcing the FBRâ€™s efforts toward tax reform and compliance enhancement.

Date: 2025-03-03

Details: Karachi, March 3, 2025 â€“ Allied Bank Limited (ABL) has provided detailed disclosures regarding its tax contingencies for the calendar year 2024 through the transmission of its annual financial statement on Monday. According to Allied Bank, income tax assessments for the bank have been finalized up to and including tax year 2024 for operations in Pakistan, Azad Kashmir, and Gilgit Baltistan. During this process, the tax authorities made certain add-backs with a total tax impact of Rs. 38,524 million (2023: Rs. 34,841 million). As a result of appeals filed by Allied Bank before various appellate authorities, most of these add-backs have been reversed in favor of the bank. However, some disputes remain unresolved, and Allied Bank and the Tax Department are currently engaged in appeals and references before higher forums. Pending the finalization of these proceedings, no provision has been recorded against the aggregate sum of Rs. 38,524 million (2023: Rs. 34,841 million). The management of Allied Bank remains confident that the outcome of these appeals will be in the bankâ€™s favor. Furthermore, tax authorities have conducted withholding tax audits under Section 161/205 of the Income Tax Ordinance, 2001, covering tax years 2003 to 2006, 2008 to 2019, and 2022, resulting in an arbitrary demand of Rs. 2,029 million (2023: Rs. 2,029 million). The bankâ€™s appeals before the Commissioner Inland Revenue (Appeals) [CIR(A)] and the Appellate Tribunal Inland Revenue (ATIR) remain pending. However, the management of Allied Bank is confident that these appeals will be resolved in favor of the bank, and as a result, no provision has been made against the Rs. 2,029 million demand. Additionally, tax authorities have issued orders under the Federal Excise Act, 2005, Sales Tax Act, and Sindh Sales Tax on Services Act, 2011, for the years 2008 to 2017, creating an arbitrary aggregate demand of Rs. 1,144 million (2023: Rs. 1,144 million). Allied Bankâ€™s appeals before CIR(A) and ATIR are still pending. However, the management remains confident that these demands will be dismissed, and therefore, no provision has been recorded against the Rs. 1,144 million. Despite these ongoing tax matters, Allied Bank remains committed to legal compliance and expects a favorable resolution in all pending cases.

Date: 2025-03-03

Details: Islamabad, March 3, 2025 â€“ The Federal Board of Revenue (FBR) has successfully collected Rs 5.71 billion as advance tax on cash withdrawals during the first seven months (Julyâ€“January) of the current fiscal year 2024-25. This tax applies to individuals making large cash withdrawals from banks who are not listed on the Active Taxpayersâ€™ List (ATL). According to sources within the FBR, the reported tax revenue represents only the collections made by the Large Taxpayers Office (LTO) Karachi. Data from LTO Karachi indicates that the advance tax on cash withdrawals declined by 12% compared to the Rs 6.46 billion collected in the corresponding period of the previous fiscal year. The FBR enforces this tax under Section 231AB of the Income Tax Ordinance, 2001. Under this provision, all banking institutions are required to deduct an adjustable tax at a rate of 0.6% on cumulative daily cash withdrawals exceeding Rs 50,000, provided that the individualâ€™s name does not appear on the ATL. This tax was initially introduced under Section 231A but was abolished in the Finance Act, 2021, only to be reinstated later with certain modifications. Officials at the FBR believe that the decline in tax collection is a positive indicator, reflecting an increase in tax compliance. The decrease suggests that more individuals are choosing to file their tax returns to avoid the additional tax on cash withdrawals, ultimately strengthening the formal economy. In January 2025 alone, the collection of advance tax on cash withdrawals fell by 16% to Rs 803 million, compared to Rs 953 million collected in January 2024. While the reduction in revenue may seem concerning at first glance, it underscores a significant shift toward formalizing financial transactions, as more individuals opt to enter the tax system rather than incur additional charges on cash withdrawals. The FBRâ€™s strategy to levy an advance tax on cash withdrawals aligns with the governmentâ€™s broader objective of expanding the taxpayer base and ensuring fair tax collection. Encouraging tax compliance through such measures remains a key priority in achieving sustainable economic reforms and improved revenue generation for the country.

Date: 2025-03-02

Details: Karachi, March 2, 2025 â€“ The Federal Board of Revenue (FBR) has issued a tax demand of Rs 1.22 billion against Bank Alfalah for multiple tax years, citing various discrepancies in tax payments. According to the 2024 annual report, Bank Alfalah confirmed that its income tax assessments have been finalized up to and including the tax year 2024. However, for tax years 2008, 2014, 2017, 2019, and 2021 to 2024, the FBR raised concerns over issues such as the default in payment of Workers Welfare Fund (WWF), allocation of expenses to dividend and capital gains, and the classification of dividend income from mutual funds. Additionally, the disallowance of leasehold improvements contributed to the total tax demand of Rs 1,217.274 million. Bank Alfalah has filed an appeal, which is currently pending before the Tribunal. The bankâ€™s management remains confident that the ruling will be in its favor, and thus, no provision has been made for this tax liability in its financial statements. In another case, Bank Alfalah received tax orders from a provincial tax authority for the period between July 2011 and December 2020. The tax authority demanded sales tax on banking services and a penalty amounting to Rs 763.312 million (excluding default surcharge), citing disallowed exemptions and alleged short payments. Appeals against these orders are pending before the Commissioner Appeals and the Appellate Tribunal. The bank has not made any provisions against these claims, believing the appellate process will resolve the matter in its favor. Furthermore, Bank Alfalah received an order from a tax authority demanding Rs 5.191 million (excluding default surcharge) for the alleged non-payment of sales tax on specific transactions in the accounting year 2016. A similar demand for Rs 8.601 million was issued for the same year. These cases are currently under appeal with the Commissioner Appeals. Additionally, a new order for accounting years 2017 and 2018 raised a tax demand of Rs 11.536 million (excluding default surcharge), which is also under appeal. The bank maintains that these issues will be settled favorably through the appellate process. Several other addbacks by tax authorities for different assessment years are still under appeal before the Commissioner of Inland Revenue (Appeals), the Appellate Tribunal Inland Revenue (ATIR), the High Court of Sindh, and the Supreme Court of Pakistan. Bank Alfalah remains engaged in legal proceedings, confident that the outstanding tax matters will be resolved in its favor.

Date: 2025-03-02

Details: Islamabad, March 2, 2025 â€“ The Federal Board of Revenue (FBR) has successfully generated Rs 11 billion in withholding tax from exporters under new tax regulations implemented for the current fiscal year. According to sources within the FBR, the Large Taxpayers Office (LTO) Karachi, a key revenue-collecting body of the FBR, collected this amount during the first seven months (July â€“ January) of the ongoing financial year. The withholding tax was imposed on exporters under Section 147(6C), a provision introduced through the Finance Act, 2024. The FBR officials explained that the Finance Act 2024 introduced a new non-obstante clause in Section 147, specifically sub-section (6C). Under this amendment, withholding agents designated under sub-sections (1), (3), (3B), and (3C) of Section 154 are required to deduct or collect tax at the time of foreign exchange realization, sale of goods, export transactions, payments to indirect exporters, or clearance of goods. Under these provisions, withholding agents now deduct 2% on export proceedsâ€”comprising 1% minimum tax under Section 154 and an additional 1% adjustable advance tax under Section 147(6C). This change has significantly increased the tax liability of exporters, leading to increased revenue generation for the FBR. The FBR officials further noted that these measures were introduced to enhance tax compliance and ensure that exporters contribute a fair share to the national exchequer. While some exporters have expressed concerns regarding the additional tax burden, the FBR maintains that the move is necessary for broadening the tax base and improving revenue collection efficiency. Industry experts have pointed out that while the new tax regime increases compliance costs for exporters, it also helps in reducing tax evasion and improving documentation within the export sector. The FBR has assured stakeholders that it will continue to monitor the impact of these tax changes and make necessary adjustments to facilitate businesses while ensuring transparency and fair taxation. With exporters now required to comply with the revised tax regulations, the FBR anticipates continued revenue growth from the sector in the coming months, reinforcing its efforts to strengthen the countryâ€™s tax system.

Date: 2025-03-02

Details: Karachi, March 2, 2025 â€“ The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has proposed the removal of withholding tax on sales to retailers, arguing that the measure will facilitate business growth and ease the tax burden on traders. As part of its budget proposals for the fiscal year 2025-26, the FPCCI has submitted recommendations to address issues related to withholding tax on retailers, distributors, dealers, and wholesalers. The organization emphasized that the Finance Bill 2024 had significantly widened the scope of advance tax on sales, covering all sectors of the economy, while also increasing tax rates for non-filers within the distribution network. According to the FPCCI, the withholding tax rate for non-filing distributors, dealers, and wholesalers was raised from 0.10% to 2%, whereas for non-filer retailers, the rate increased from 0.5% to 2.5%. The FPCCI has urged the government to reconsider these hikes and withdraw or reverse the withholding tax on sales to dealers, distributors, wholesalers, and retailers. The trade body believes that removing these taxes will encourage tax compliance and facilitate smoother business operations. Turnover Tax of 1.25% The FPCCI also raised concerns about the existing 1.25% turnover tax, arguing that it is excessively high. Due to this elevated rate, many businesses prefer to conduct cash transactions instead of banking transactions, which ultimately leads to revenue losses for the government and promotes the undocumented economy. The FPCCI has suggested reducing the turnover tax rate to a more manageable level, ideally between 0.5% and 0.75%, to encourage formal banking transactions and enhance tax collection efficiency. Withholding Tax on Local Purchases The FPCCI also recommended revising the local purchase limit under Section 21(1) of the Income Tax Ordinance, 2001. The current limit of PKR 75,000 per transaction has become outdated due to inflation. To address this, the FPCCI has proposed increasing the threshold to PKR 300,000 to reflect inflationary adjustments, reduce compliance costs, and support local businesses. Many retailers and business owners currently split transactions to stay within the limit, increasing paperwork and operational inefficiencies. The proposed increase would ease administrative burdens and foster business growth. The FPCCI continues to advocate for tax reforms that benefit businesses, including retailers, ensuring a more favorable economic environment for trade and commerce.

Date: 2025-03-01

Details: Islamabad â€“ The Federal Board of Revenue (FBR) has collected a total of Rs 7.34 trillion during the first eight months (July â€“ February) of the ongoing fiscal year. However, despite this substantial collection, the FBR has failed to meet its revenue target for the period. According to media reports, the revenue collection target for the FBR was set at Rs 7.95 trillion. This means the FBR is facing a significant shortfall of Rs 604 billion, raising concerns over future fiscal targets and Pakistanâ€™s economic standing in negotiations with the International Monetary Fund (IMF). With a revenue target of Rs 9.168 trillion agreed upon with the IMF for March 31, 2025, the FBR will need to generate Rs 1.825 trillion in March. This poses a major challenge, given the impact of Ramadan, holidays, and fewer working days leading up to Eid-ul-Fitr. Detailed figures indicate that the FBR collected Rs 7.343 trillion in the first eight months of the fiscal year against the set target of Rs 7.947 trillion, resulting in a shortfall of Rs 604 billion. The Pakistani negotiators now have limited options: either request the IMF to revise the FBRâ€™s tax collection target downward or utilize fiscal space due to reduced debt servicing to maintain the fiscal deficit within acceptable limits. The upcoming IMF negotiations have gained increased importance, given the massive shortfall in revenue collection. If the current trend continues, the revenue target shortfall may exceed Rs 1 trillion by the end of June 2025. The IMFâ€™s review mission is scheduled to arrive in Islamabad this weekend, with discussions commencing on Monday, March 3, 2025, to assess Pakistanâ€™s progress under the $7 billion Extended Fund Facility (EFF). Additionally, Pakistan has requested an extra $1 billion under the Resilience and Sustainability Facility (RSF), potentially increasing the total loan to $8 billion. The FBRâ€™s revenue collection suffered another blow in February 2025, with a shortfall of Rs 136 billion. The tax authority collected Rs 847 billion against a target of Rs 983 billion, widening the overall shortfall. The gross collection for February was Rs 885 billion, but after issuing refunds worth Rs 37 billion, the net revenue stood at Rs 847 billion. Breaking down the FBRâ€™s revenue sources for February 2025: Income Tax accounted for Rs 347 billion, Sales Tax Rs 367 billion, Customs Rs 106 billion, and Federal Excise Duty (FED) Rs 65 billion. The worsening shortfall is evident, as Februaryâ€™s collection was even lower than Januaryâ€™s Rs 872 billion. The cumulative shortfall for the first seven months was Rs 468 billion, and with Februaryâ€™s deficit of Rs 136 billion, the total shortfall for the first eight months of FY25 has reached Rs 604 billion.

Date: 2025-02-27

Details: Karachi, February 27, 2025 â€“ The Karachi Chamber of Commerce and Industry (KCCI) has urged its members to actively participate in discussions regarding SRO 55 by submitting their recommendations. These recommendations will be compiled and presented to the Federal Board of Revenue (FBR) to address concerns and seek possible revisions to the new tax regulations. In a circular issued to its members, KCCI highlighted that FBR, through SRO No. 55(1)/2025 dated January 24, 2025, has introduced substantial amendments to the monthly sales tax return filing process. Under these new regulations, all registered manufacturers, commercial importers, distributors, and wholesalers dealing in taxable goods are now required to furnish both the value and quantity of goods produced, acquired, and sold in their sales tax returns. Since the notification does not specify an effective date, KCCI anticipates that the changes have already come into effect. Consequently, these modifications will likely impact the sales tax returns filed for February 2025 and all subsequent periods. KCCI has emphasized the need for businesses to promptly review these new requirements to ensure compliance and avoid any unforeseen penalties. Furthermore, KCCI pointed out that on January 29, 2025, the FBR issued Notification S.R.O. 69(1)/2025, which effectively replaces Chapter XIV of the Sales Tax Rules, 2006. This amendment establishes new protocols for the licensing, integration, and issuance of electronic sales tax invoices. The updated framework aims to enhance transparency, improve tax compliance, and optimize administrative efficiency by consolidating and streamlining previous regulations. It also incorporates provisions from Chapters XIV-AA and XIV-BB, providing a unified structure for electronic invoicing and its associated procedures. KCCI has urged all its members to submit their concerns and suggestions regarding both SRO 55 and SRO 69, ensuring that their feedback is well-supported by factual data and industry insights. By collecting and presenting these inputs, KCCI aims to effectively engage with FBR and advocate for any necessary modifications or clarifications in the interest of the business community. An early response from members is crucial, as it will enable KCCI to initiate timely discussions with FBR. The chamber remains committed to protecting the interests of its members and ensuring a smooth transition to the new tax filing system.

Date: 2025-02-27

Details: Karachi, February 27, 2025 â€“ The collection of capital gain tax has witnessed an extraordinary surge of 82% during the first seven months (July â€“ January) of the fiscal year 2024-25, according to provisional data from the Federal Board of Revenue (FBR). This remarkable growth underscores the increasing role of capital markets in revenue generation. Sources within the FBR disclosed that the collection of capital gain tax escalated to Rs 15.73 billion in the first seven months of the current fiscal year, compared to Rs 8.66 billion during the corresponding period of the previous fiscal year. This sharp rise reflects heightened investor participation and improved market sentiment. The collection was made under Section 37A and Section 147 (5B) of the Income Tax Ordinance, 2001, which govern the taxation of capital gains derived from securities transactions. The FBR sources attributed this significant boost in capital gain tax collection to the notable buoyancy in the stock market, driven by increased trading volumes and investment activity. Officials pointed out that the record-breaking performance of the Pakistan Stock Exchange (PSX) played a crucial role in driving up capital gain tax receipts. The benchmark KSE-100 index reaching an all-time high has spurred investor enthusiasm, leading to increased capital transactions and subsequent tax collection. As per Section 37A, capital gain arising from the disposal of securities on or after July 1, 2010, except those exempt from tax, shall be chargeable at the rates specified in Division VII of Part I of the First Schedule. This regulation ensures that gains from capital investments contribute to the national tax base. However, certain exemptions apply under this section. Specifically, the provisions do not extend to banking and insurance companies. Additionally, disposals of shares in a listed company made outside a registered stock exchange, or those not settled through the National Clearing Company of Pakistan Limited (NCCPL), are also excluded. Similarly, shares disposed of through an initial public offer during the listing process are exempt unless details are provided to NCCPL for computation of capital gains tax. The significant increase in capital gain tax collection highlights the impact of strong stock market performance on fiscal revenue. With continued market growth and investor confidence, the capital gain tax collection is expected to remain robust in the coming months, further strengthening government revenue streams.

Date: 2025-02-26

Details: Karachi, February 26, 2025 â€“ In a decisive move against businesses failing to adhere to federal tax regulations, RTO-I Karachi has sealed a prominent medical store located in the upscale Clifton area. The action, conducted on Wednesday, was prompted by the medical storeâ€™s persistent failure to fully integrate its sales operations with the Federal Board of Revenueâ€™s (FBR) Point of Sale (POS) system. This enforcement action, carried out under the directives of the Chief Commissioner Inland Revenue (CCIR), underscores the commitment of RTO-I Karachi to ensuring compliance with the Sales Tax Act, 1990. The POS integration is a crucial tool for the FBR, enabling the real-time monitoring, tracking, and reporting of sales, production, and other business transactions. However, the sealed medical store repeatedly failed to issue verifiable, POS-generated receipts, a clear violation of the Actâ€™s provisions. Officials from RTO-I Karachi emphasized the severity of these violations, citing Section 33 of the Sales Tax Act, 1990, which outlines stringent penalties for non-compliance. These penalties include a fine of Rs 500,000 or 200% of the tax involved, whichever is higher. Furthermore, violators face potential imprisonment for up to two years and an additional fine of up to Rs 2 million upon conviction. Crucially, the Act also authorizes the sealing of business premises by Inland Revenue officers, a measure now implemented by RTO-I Karachi. The medical store will remain sealed until all outstanding sales tax dues are paid or recovered in full, and until complete integration with the FBRâ€™s invoicing system is achieved. RTO-I Karachi officials reiterated that this action serves as a strong deterrent to other businesses that may be neglecting their POS integration obligations. The aim is to create a level playing field and ensure that all businesses contribute their fair share to the national tax revenue. The operation carried out by RTO-I Karachi is a clear signal of the FBRâ€™s commitment to enforcing tax laws across the region.

Date: 2025-02-26

Details: Karachi, February 26, 2025 â€“ Pakistan Customs has issued a new valuation ruling for ceramic and porcelain tiles to determine the applicable duties and taxes on imported consignments. The Directorate General of Customs (Valuation), Karachi, has formally released Valuation Ruling No. 1972 of 2025, which outlines the updated customs valuation for tiles imported from various regions, including China, the USA, Europe, and other international markets. Background of the Valuation Update Previously, the customs valuation for ceramic and porcelain tiles was determined under Valuation Ruling No. 1787/2023, issued on June 9, 2023, under Section 25-A of the Customs Act, 1969. However, this ruling was challenged and subsequently reviewed by the Director General of Customs Valuation under Section 25D. The case was remanded for reassessment, leading to a directive for the issuance of a fresh valuation ruling. As a result, the Directorate General of Customs had to revisit and reconsider the valuation process. While conducting the reassessment, officials faced challenges as stakeholders repeatedly requested delays in providing critical documentation, including Letters of Credit, Bank Contracts, EIF Forms, and Export GDs. Several meetings were scheduled to facilitate discussions, with the final meetings held on December 13, 2024, and December 26, 2024. Despite multiple extensions granted to stakeholders, the required documents were not submitted on time. Consequently, a conclusive meeting was held on January 13, 2025, where stakeholders were given until February 10, 2025, to provide the missing records. Stakeholder Perspectives on Tile Valuation During deliberations, importers argued that global prices of tiles had decreased due to advancements in manufacturing technology. They further suggested that existing valuation categories should be merged to prevent misdeclaration of porcelain tiles. On the other hand, local manufacturers highlighted their substantial investments in domestic tile production, especially in the manufacturing of larger-sized tiles. They asserted that the market price of imported tiles remained significantly high and proposed a market inquiry to verify the price trends. Customs Valuation Methodology and Application To determine the customs values for tiles, the Directorate General of Customs applied valuation methods outlined in Section 25 of the Customs Act, 1969. The transaction value method was found unsuitable due to significant price variations in import data. The Directorate then examined identical and similar goods value methods under Sections 25(5) and 25(6), but due to inconsistencies in the data, these methods were also deemed inapplicable. As per the statutory sequential process, a market survey was conducted under Section 25(7) of the Customs Act. This approach ultimately led to the final determination of the customs values for ceramic and porcelain tiles. Implementation and Validity of the New Valuation Ruling Under the newly issued valuation ruling, if declared values exceed the determined customs values, the higher declared values will be applied, in accordance with Section 25(1) of the Customs Act. Additionally, for air-freighted consignments, customs officers will consider the difference in freight costs between air and sea shipments. The new valuation ruling will remain in effect unless rescinded or revised by the competent authority under Section 25A(4) of the Customs Act, 1969. Stakeholders dissatisfied with the ruling may file a revision petition within 30 days before the Director General, Directorate General of Customs Valuation, Custom House, Karachi. This latest development in customs valuation for ceramic and porcelain tiles is expected to bring more clarity and fairness to import duties, ensuring a balanced approach for both importers and local manufacturers.

Date: 2025-02-26

Details: Karachi, February 26, 2025 â€“ United Bank Limited (UBL) has disclosed an ongoing legal dispute with the Federal Board of Revenue (FBR) over tax-related matters. The bank, in its recently released financial results for the year 2024, highlighted its position regarding tax assessments and pending appeals against FBRâ€™s amended orders. According to UBL, the bank has submitted its income tax returns up to the tax year 2024 (accounting year ending December 31, 2023) under the provisions of section 120 of the Income Tax Ordinance, 2001. However, the tax authorities at FBR have issued amended assessment orders spanning from tax years 2003 to 2024, resulting in additional tax demands amounting to Rs.16,123 million (2023: Rs.14,124 million). UBL has contested these orders by filing appeals at various appellate forums. The bank stated that while appellate authorities have granted relief on certain matters, the FBR has escalated appeals to higher forums in cases where rulings were not in its favor. Likewise, UBL has also filed appeals for cases where relief was not granted. The management remains optimistic that final rulings will favor the bank. Furthermore, UBL confirmed that tax returns for its Azad Kashmir (AK) and Gilgit Baltistan (GB) branches have been filed up to the tax year 2024 in accordance with the Azad Kashmir Council agreement of May 2005. These returns are deemed assessed under the applicable tax laws. Additionally, the FBR has conducted tax monitoring on Federal Excise Duty, Sales Tax, and withholding taxes for the period covering 2005 to 2019. This review resulted in addbacks and a total tax demand of Rs. 2,632 million (2023: Rs. 2,632 million). UBL has formally appealed against these tax demands and remains confident that the appellate authorities will rule in its favor. For its international operations, UBL confirmed that tax returns for its UAE and Qatar branches have been filed up to December 31, 2023, while Yemen branches have filed up to December 31, 2019. These filings are considered assessed unless formally reopened for reassessment. With the ongoing legal proceedings, UBL continues to engage in discussions with FBR to resolve tax disputes while maintaining compliance with domestic and international tax regulations.

Date: 2025-02-26

Details: Karachi, February 26, 2025 â€“ The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has formally presented key sales tax proposals for the upcoming Budget 2025-26. These recommendations, submitted to the Federal Board of Revenue (FBR), aim to address major sales tax challenges faced by businesses and taxpayers across the country. In its proposal, the FPCCI highlighted the issue of Further Tax, which was reinstated in 2013 through subsection (1A) in section 3 of the Sales Tax Act, 1990. Over the years, the tax rate has gradually increased, reaching 4% in 2023. The purpose of this tax was to discourage sales to unregistered persons; however, the FPCCI pointed out that this measure has failed to increase the number of legitimate tax-paying registrants. As a solution, the FPCCI has strongly recommended that Further Tax be abolished to promote a more business-friendly environment. Another major concern raised by the FPCCI is the Processing of Sales Tax Refunds for New Manufacturer Exporters. Under STGO 9, new manufacturers were initially required to submit sales tax refunds manually via ERS for 12 months before being eligible for the FASTER system. Unfortunately, delays in processing have prevented many manufacturers from transitioning to the automated system. To resolve this, the FPCCI has proposed an expedited refund process to ensure timely disbursements and seamless entry into the FASTER system. Regarding New Sales Tax Registration, the FPCCI noted that prior to the Finance Act 2024, the registration process was fully automated. However, the newly imposed requirement for approval by LRO and RTO has complicated the process, discouraging new business registrations. The FPCCI suggests restoring automated registration for manufacturers and exporters with post-verification within 15 days, ensuring compliance while maintaining efficiency. The FPCCI also recommended minimizing discrepancies in import levy rates, such as Withholding Tax (WHT) and Sales Tax, for industrial raw material imports by Commercial & Industrial Importers. Currently, commercial importers face higher levy rates, disadvantaging small and medium industries that rely on them for raw materials. The FPCCI urges the government to harmonize these levies to support industrial growth. Additionally, the FPCCI has strongly opposed SRO 350(I)/2024, issued on March 7, 2024, to curb fraudulent invoices. While aimed at eliminating tax evasion, the FPCCI asserts that the onerous requirements of this SRO are increasing compliance costs for legitimate businesses. Despite subsequent amendments through SRO 582(I)/2024 and SRO 644(I)/2024, challenges persist. The FPCCI calls for the complete abolition of SRO 350(I)/2024 to facilitate ease of doing business. With these comprehensive recommendations, the FPCCI continues to play a pivotal role in advocating for tax reforms that support Pakistanâ€™s business community while ensuring compliance with fair taxation policies.

Date: 2025-02-25

Details: Karachi, February 25, 2025 â€“ The Pakistan Tax Bar Association (PTBA) has raised concerns regarding the difficulties taxpayers face in complying with various tax statutes. In a letter addressed to Hamid Ateeq Sarwar, Member Inland Revenue Operations of the Federal Board of Revenue (FBR), the PTBA highlighted multiple representations received from member bars across Pakistan regarding procedural inefficiencies causing hardships for compliant taxpayers. The PTBA outlined the following major issues affecting taxpayers: â€¢ The lengthy and complex verification process for manufacturing site inspections has led to significant delays in obtaining sales tax registration. The PTBA emphasized the need for a streamlined process to facilitate timely registration. â€¢ The correction of CPR (Computerized Payment Receipt) remains cumbersome, requiring taxpayers to navigate bureaucratic hurdles that consume valuable time. Given FBRâ€™s ongoing digitalization efforts, the PTBA has recommended a fully automated CPR correction procedure to alleviate taxpayer hardships. â€¢ Section 26 of the Sales Tax Act, 1990, allows for the upward revision of returns within sixty days of filing without requiring CIR permission. However, the current system does not support such revisions in accordance with the law. The PTBA urged that the system be updated to enable revisions as per the provisions of Section 26. â€¢ As part of automation efforts, the FBR occasionally implements amendments through SROs that require updates to the IRIS system. However, the PTBA has observed inconsistencies where system updates do not align with legislative changes, causing confusion. In some instances, system upgrades occur in response to commitments made to donor agencies before corresponding legal amendments are enacted. The PTBA recommended that amendments in the law be issued first, followed by system updates to ensure consistency and compliance. The PTBA has urged the FBR to address these procedural inefficiencies and streamline tax compliance mechanisms. The association looks forward to proactive intervention in resolving these issues, ensuring that taxpayers can fulfill their obligations under the law without unnecessary hardship.

Date: 2025-02-25

Details: Karachi, February 25, 2025 â€“ The Federal Board of Revenue (FBR) has taken a significant step towards improving tax compliance by developing an automated system for handling adjustments of unregistered supplies through credit notes. This new system is aimed at ensuring transparency and minimizing fraudulent practices in tax adjustments. In an official communication addressed to Chief Commissioners of Inland Revenue across Large Taxpayer Offices (LTOs), Medium Tax Offices (MTOs), Corporate Tax Offices (CTOs), and Regional Tax Offices (RTOs), the FBR outlined the implementation of this automated mechanism. The initiative focuses on allowing adjustments of sales returns against unregistered supplies while maintaining stringent verification measures. Previously, the adjustment of sales returns via credit notes for unregistered supplies was restricted in the automated system due to its misuse by fraudulent entities, who manipulated fake credit notes to claim undue benefits. To prevent such malpractices, claimants were required to seek approval from the respective Commissioner-IR, who would then verify the legitimacy of transactions before forwarding the case to the FBR for final authorization. With the development of this new automated system within the IRIS module, the FBR has now provided an interface for the Commissioner-IR to scrutinize and approve taxpayer requests directly. This advancement is expected to streamline the process, reducing administrative delays and ensuring that only genuine claims are processed through the system. The FBR has urged field formations to utilize this automated system efficiently and process taxpayer cases in accordance with the relevant legal provisions. By integrating this system, the FBR aims to enhance regulatory compliance and strengthen tax administration in Pakistan. Going forward, the FBR will continue monitoring the implementation of this system and making necessary enhancements to further improve transparency and efficiency in tax adjustments. This measure reflects the authorityâ€™s commitment to leveraging technology for better governance and reducing avenues for tax fraud in the country.

Date: 2025-02-25

Details: Karachi, February 25, 2025 â€“ The Federal Board of Revenue (FBR) has taken disciplinary action against a senior Inland Revenue Service (IRS) officer, imposing a penalty and halting his promotion for two years due to charges of misconduct and inefficiency. According to an official statement from the FBR, a de-novo inquiry was conducted against IRS officer Abdul Hameed Anjum Arayn (BS-20), in line with the Supreme Court of Pakistanâ€™s directives issued on January 29, 2020. The inquiry focused on allegations of inefficiency, misconduct, and corruption, particularly concerning sales tax refund approvals during his tenure as Deputy Commissioner Inland Revenue at Regional Tax Office-II, Karachi, in 2012. The case revolved around the alleged improper sanctioning of sales tax refunds totaling Rs. 87 million. The Prime Minister, in his capacity as the Authority, appointed Afzal Latif (PAS/BS-22), the then Secretary, Ministry of Industries and Production, as the Authorized Officer to oversee the inquiry. The investigation process saw multiple officers involved, including retired IRS officers Khawaja Adnan Zahir (BS-22) and Nadir Mumtaz Warraich (BS-22), who conducted separate inquiries at different stages. The IRS officer was initially served a charge sheet and statement of allegations on April 7, 2020. The inquiry findings, submitted on August 13, 2021, concluded that the charges of inefficiency and misconduct were substantiated. However, while there was circumstantial evidence for misconduct, FBR officials noted that there was insufficient evidence to prove corruption charges beyond doubt. Despite multiple show-cause notices issued by the FBRâ€”including on September 1, 2021, April 26, 2024, and September 5, 2024â€”the accused officer did not submit timely responses. He eventually provided a reply on September 17, 2024, denying all allegations and requesting a personal hearing. The hearings took place on October 10 and 11, 2024, where the officer defended himself in front of the FBRâ€™s Authorized Officer, alongside a departmental representative. After reviewing the case history, inquiry reports, and verbal arguments, the FBR determined that the charge of inefficiency was fully established, while the misconduct charge was partially proven. Consequently, the IRS officer has been penalized under Rule 5(1)(iv) of the Government Servants (Efficiency & Discipline) Rules, 1973, with his promotion withheld for two years. Furthermore, his performance allowance will be stopped for six months. Despite this ruling, IRS officer Abdul Hameed Anjum retains the right to appeal the decision under the Civil Servants (Appeal) Rules, 1977, within 30 days from the official notification date. This case highlights FBRâ€™s commitment to accountability and transparency within the IRS, ensuring that officers uphold the highest professional standards in tax administration.

Date: 2025-02-25

Details: Karachi, February 25, 2025 â€“ The Federal Tax Ombudsman (FTO) has identified a staggering annual revenue loss of Rs 9.38 billion to the Federal Board of Revenue (FBR) due to discrepancies in the collection of electricity tax across the country. This discovery has prompted urgent directives for corrective action to ensure tax compliance by power distribution companies. The FTOâ€™s findings emerged during an investigation into complaints against K-Electric, which highlighted inconsistencies in the implementation of FBRâ€™s tax directives. While K-Electric adhered to the taxation guidelines, the report revealed that other electricity distribution companies failed to implement the required tax collection measures effectively. Following its investigation, the FTO issued an order directing that all power distribution companies must charge an 18% sales tax on taxable electricity supplies, including those under solar net metering. The report emphasized that sales tax must be levied on the gross value of electricity supplied, rather than the net metering adjustments applied to consumer bills. The FBR has also reiterated that withholding tax under Section 235 of the Income Tax Ordinance, 2001, must be collected on the full electricity bill amount, without deductions based on net metering offsets. In response, the FTO instructed power distribution companies and FBRâ€™s regional field offices to immediately implement these taxation guidelines to prevent further revenue losses. The FTO further clarified that the National Electric Power Regulatory Authority (NEPRA) does not have jurisdiction over taxation matters. Any previous regulatory guidelines or SROs issued by NEPRA or the Alternative Energy Development Board (AEDB) cannot override the provisions of the Sales Tax Act, 1990, or the Income Tax Ordinance, 2001. The FTO emphasized that the Supreme Court of Pakistan has already ruled on the supremacy of fiscal laws over regulatory directives. As per the FBRâ€™s mandate, all power distribution companies, including K-Electric and eleven other DISCOs, must now align their tax collection mechanisms with federal tax laws. The affected companies include Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO), Hazara Electric Supply Company (HAZECO), Hyderabad Electric Supply Company (HESCO), Islamabad Electric Supply Company (IESCO), Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO), Peshawar Electric Power Company (PESCO), Quetta Electric Supply Company (QESCO), Sukkur Electric Power Company (SEPCO), and Tribal Electric Supply Company (TESCO). The FTOâ€™s order has called for a comprehensive inquiry into the systemic failure of tax compliance by these DISCOs, stressing that the FBR must take immediate corrective action. This failure has led to billions in lost revenue annually, placing an undue financial burden on the national economy. The FBR has now been instructed to strictly enforce the taxation rules and ensure that all power distribution companies adhere to legal provisions regarding tax collection on net-metered electricity supplies. Failure to comply will result in regulatory actions and possible penalties against the non-compliant entities. The FTOâ€™s findings have reignited concerns about tax enforcement in the energy sector, highlighting the urgent need for greater transparency and accountability. With billions in revenue at stake, the FBR is now under pressure to implement strict monitoring mechanisms to prevent further financial losses and ensure full compliance with federal tax laws.

Date: 2025-02-25

Details: Karachi, February 25, 2025 â€“ The Federal Board of Revenue (FBR) has announced the establishment of a Centralized Customs Examination Unit (CEU) in Karachi to enhance the efficiency of customs operations, ensure transparency, and expedite the clearance of goods. This initiative aims to strengthen customs oversight and streamline trade facilitation in Pakistan. To formalize the operational framework for the centralized customs examination, the FBR issued Customs General Order (CGO) No. 1 of 2025, detailing the structure and responsibilities of the CEU. The key aspects of the CEUâ€™s functioning include: â€¢ The CEU will be established at a designated location in Karachi, as notified by the Chief Collector of Customs Appraisement (South), Karachi. â€¢ Deputy/Assistant Collectors will be posted at the CEU by the Chief Collector of Customs Appraisement (South), Karachi, who will be responsible for resolving system-related, logistical, and operational issues. â€¢ Appraisers (Examination) will be deployed at the CEU as per the requirements set by the Chief Collector of Customs Appraisement (South), Karachi. â€¢ All consignments arriving at terminals within Karachi Port will undergo customs examination through the CEU. The system will process Goods Declarations (GDs) filed at the Collectorates of Customs, Appraisementâ€”East, West, and SAPT, Karachi. In the next phase, the CEU will be expanded to other customs stations, including Port Qasim and other locations nationwide. â€¢ Appraisers assigned to the CEU will be rotated across different terminals on a randomized basis by the Customs Computerized System (CCS), ensuring impartial customs examinations. â€¢ Customs inspections will be completed on the same day whenever possible. Any pending examinations must be finalized the next day by the same examiner. â€¢ The examination of goods must comply with the Customs Act, 1969, and all relevant customs regulations, including valuation rulings, Customs General Orders, and public notices issued by the FBR and other authorities. â€¢ The CEU will be equipped with advanced technology, including tablets and body cameras, integrated with the CCS for real-time monitoring. A Central Control Room will oversee the live footage, which will be stored for a minimum of three months for review. â€¢ Any re-examinations requested by importers or customs agents will require approval from the Additional Collector of the concerned Collectorate before being processed by the CEU. â€¢ Post-examination actions will align with Customs General Order No. 06 of 2024, ensuring compliance with customs regulations. The FBRâ€™s initiative underscores its commitment to modernizing customs operations and minimizing delays in trade processes. With the establishment of the CEU, customs procedures will be more transparent, efficient, and aligned with global best practices, strengthening Pakistanâ€™s trade infrastructure.

Date: 2025-02-24

Details: Karachi, February 24, 2025 â€“ MCB Bank has confirmed that the windfall tax issue remains sub judice before the Lahore High Court, as the bank has successfully secured a stay order. Despite the ongoing legal proceedings, MCB Bank has proactively accounted for the potential windfall tax liability in its financial statements, according to the bankâ€™s management. This measure has been taken to ensure transparency and financial prudence in dealing with regulatory uncertainties. MCB Bank Limited conducted its latest conference call on Monday, addressing analysts and investors regarding its financial performance and future outlook. The key takeaways from the discussion highlighted the bankâ€™s strategic focus on growth, digital transformation, and capital management. The management reaffirmed MCB Bankâ€™s strong commitment to increasing the share of current accounts within its overall deposit mix. The bank aims to elevate the proportion of current accounts to approximately 55% of total deposits, which will significantly enhance liquidity and financial stability. Looking ahead to the fiscal year 2025, MCB Bank expects an overall deposit growth of approximately 15% to 18%. Since 2019, the bankâ€™s total deposits have recorded a compound annual growth rate (CAGR) of 10.6%, while current account deposits have grown at an impressive CAGR of 15.3% over the same period. In terms of investment, MCB Bankâ€™s portfolio includes a diversified mix of financial instruments. The share of fixed and floating-rate Pakistan Investment Bonds (PIBs) stands at 22% and 60%, respectively, while Treasury Bills (T-bills) contribute 7% to the total investment portfolio. Notably, the yield on fixed PIBs currently averages 14.5%, with an average maturity period of approximately 2.7 years. MCB Bank has also demonstrated significant progress in expanding its Islamic banking operations. Over the past year, the number of Islamic branches has grown from 244 in December 2023 to 301 in December 2024, including the conversion of 39 conventional branches. The bank has set an ambitious target to increase its Islamic branch network to 500 within the next three years. Addressing concerns over a decline in fee income, MCB Bankâ€™s management attributed the reduction primarily to intensified competition in the remittance sector. Furthermore, in response to growing competition from digital banks, the management emphasized that MCB Bank has consistently invested in upgrading its digital capabilities. These technological advancements will enable the bank to remain competitive and strengthen its market position amid evolving industry trends.

Date: 2025-02-24

Details: February 24, 2025 Karachi, February 24, 2025 â€“ The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has put forward a proposal urging the government to eliminate the advance tax levied on the first purchase of property. This recommendation is part of FPCCIâ€™s broader set of budget proposals for the fiscal year 2025-26, aimed at fostering economic growth and boosting investment in the real estate sector. Currently, under the existing tax framework, individuals registered as filers are required to pay an advance tax of 3% on the purchase of property. The FPCCI has raised concerns over this tax, stating that it constitutes double taxation, as the income used to acquire the property has already been subjected to taxation. The federation emphasized that this additional financial burden discourages investment in real estate and negatively impacts market activity. The FPCCI has proposed that the advance tax on the first property purchase by a filer should be significantly reduced to 0.5%. Furthermore, it has recommended a complete exemption for salaried individuals, arguing that this segment of taxpayers already contributes significantly to the national exchequer through payroll deductions and should not be further burdened. In addition to advocating for the reduction of advance tax, the FPCCI has also called for the abolition of Section 7E of the Income Tax Ordinance, 2001. This section, which imposes a deemed income tax on capital assets, has been criticized for discouraging investment in immovable property within Pakistan. The FPCCI believes that removing Section 7E would help eliminate the issue of double taxation and create a more favorable environment for property buyers and investors. The FPCCI further argued that abolishing Section 7E would not only encourage greater investment in the real estate sector but also enhance housing affordability for middle-class and salaried individuals. By removing unnecessary tax burdens, the real estate industry could experience increased formalization, leading to improved documentation and transparency in property transactions. According to the FPCCI, such tax reforms would stimulate economic growth by encouraging domestic and foreign investment in Pakistanâ€™s property market. The federation has urged the government to seriously consider these recommendations while formulating the upcoming federal budget, stressing that a robust real estate sector is crucial for overall economic stability and development.

Date: 2025-02-24

Details: Karachi, February 24, 2025 â€“ The Pakistan Business Council (PBC) has urged the Federal Board of Revenue (FBR) to introduce restrictions on the number of vehicles an individual can purchase in order to curb benami transactions. In its recommendations for the 2025-26 budget, the PBC highlighted a major loophole in the current system, stating that there is no legal limit on the number of vehicles an individual can register under their name. This lack of regulation has, according to the PBC, facilitated benami transactions, where vehicles are purchased and registered under fake or proxy ownership to evade taxes and conceal assets. To address this issue, the PBC has proposed a cap on the number of cars a single individual can register. Specifically, the council recommends limiting the maximum number of vehicle registrations per person to 10. This restriction, the PBC believes, will serve as an effective deterrent against illicit financial activities in the automobile sector. According to the PBC, the introduction of such a policy will enhance transparency in vehicle ownership records and allow the FBR to track and tax legitimate transactions more effectively. Additionally, it will discourage hoarding and speculative purchases, which contribute to artificial demand in the car market. The PBC emphasized that restricting excessive vehicle purchases will not impact genuine buyers or businesses but will primarily target those engaging in tax evasion and money laundering. The council has urged the government to implement this measure alongside stronger monitoring mechanisms and digital tracking systems to further tighten control over benami assets. Furthermore, the PBC has recommended that the FBR collaborate with relevant authorities, including the Excise and Taxation Departments, to ensure strict enforcement of vehicle ownership regulations. The council also suggested periodic audits and automated alerts to identify unusual vehicle registrations under a single name. With these recommendations, the PBC aims to support the governmentâ€™s broader efforts to combat tax evasion and enhance financial accountability in Pakistanâ€™s economy. It remains to be seen whether the FBR will take up this proposal in the upcoming 2025-26 budget deliberations.

Date: 2025-02-24

Details: Karachi, February 24, 2025 â€“ The deadline for the payment of capital gains tax (CGT) on the disposal of shares at the Pakistan Stock Exchange (PSX) has been officially notified, urging all stakeholders to ensure compliance with the set timeline. According to a notification issued on Monday, the National Clearing Company of Pakistan Limited (NCCPL) has scheduled the deadline for the collection of CGT for transactions conducted between January 1, 2025, and January 31, 2025. The total capital gains tax for this period will be collected on Monday, March 4, 2025, via the respective settling banks of Clearing Members (CMs). To avoid any issues, all CMs must ensure that sufficient funds are available in their settling bank accounts before the specified deadline. Relevant details and reports for this tax period have already been uploaded in the CGT System for review. Additionally, the CGT applicable to the redemption of units from open-end mutual funds for the same period has been finalized. All relevant details are accessible through the CGT System, enabling investors and clearing members to verify their tax liabilities ahead of the approaching deadline. To ensure a smooth tax collection process, all Clearing Members are required to carefully review the investor-wise details of capital gains, losses, and tax deductions via the reports available in the CGT System. In case of any discrepancies, members should take immediate action to rectify the issues before the deadline. Furthermore, in instances of non-payment or partial collection of CGT, Clearing Members are obligated to submit the names of defaulting Unique Identification Numbers (UINs) to the NCCPL immediately after the CGT collection date. Failure to comply may result in disciplinary action under NCCPLâ€™s Rules and Regulations. As the deadline approaches, all stakeholders are advised to meet their tax obligations in a timely manner to avoid potential penalties and ensure compliance with regulatory requirements. The NCCPL remains committed to upholding transparency and efficiency in tax collection, reinforcing the importance of adherence to the notified timelines.

Date: 2025-02-23

Details: Islamabad, February 23, 2025 â€“ The Federal Board of Revenue (FBR) has collected crucial provincial data to broaden the tax base and identify high-net-worth individuals who may not be fully contributing to national revenue. According to sources, the FBR has obtained extensive records on property ownership, vehicle registrations, and other financial transactions from provincial authorities. The FBR is currently analyzing this data to track individuals with lavish lifestyles and significant assets that have not been declared. By using this information effectively, the tax authorities aim to unearth hidden wealth, ensuring that all eligible taxpayers contribute their fair share. According to officials, the FBR has now acquired vehicle ownership data of over 21 million individuals from all four provinces. Additionally, development authorities have shared details of over 100,000 citizens, while provincial revenue departments have provided more than 20,000 CNIC-centric records. Moreover, provincial land authorities have handed over land-related data for over 23 million people to the FBR, significantly enhancing its database for tax enforcement. The provincial Food Authorities and Minerals & Mines Departments have also contributed CNIC-linked data to the FBR, further strengthening its ability to track unregistered wealth. However, despite the vast amount of raw data collected, officials caution that merely possessing property ownership and luxury vehicle registration records will not automatically translate into a broader tax base. Effective processing and verification will be necessary to identify tax evaders. In a parallel effort, the FBR has also obtained critical financial data from the National Database and Registration Authority (Nadra). This information covers over 50 million high-net-worth individuals, including details on their bank accounts, luxury vehicle ownership, property investments, and international travel records. The aim is to cross-check financial activity and ensure that those who can afford to pay taxes are properly registered. The FBR and Nadra have recently strengthened their collaboration to improve data-sharing mechanisms. Under Section 175B of the Income Tax Ordinance, Nadra is now legally bound to share its records with the FBR whenever requested, facilitating better enforcement of tax laws. With these enhanced measures, the FBR is expected to take decisive action against non-filers and expand the taxpayer base, ensuring greater compliance and increased revenue generation for economic stability.

Date: 2025-02-23

Details: Islamabad, February 23, 2025 â€“ Federal Finance Minister Muhammad Aurangzeb has reaffirmed the governmentâ€™s commitment to fair taxation and essential economic reforms, assuring the business community that their concerns will be addressed transparently. Speaking at the third All Pakistan Chambers Presidents Conference at the Faisalabad Chamber of Commerce & Industry (FCCI), Aurangzeb emphasized the need for collaboration between the government and the private sector to achieve sustainable economic growth. Addressing business leaders, Aurangzeb highlighted that Pakistanâ€™s economy is now on the right track but requires the private sector to play an active role in ensuring long-term recovery. He stressed that before the budget announcement in May-June, consultations with the business community would continue, ensuring open discussions on taxation policies and economic strategies. Aurangzeb acknowledged the significant role of businesses in Pakistanâ€™s economic revival and pointed out that the country is currently operating under the International Monetary Fund (IMF) programme, which influences its economic policies. Despite these challenges, he assured that the government has a clear economic direction and will keep all stakeholders informed about future policy changes. One of the key reforms Aurangzeb discussed was the Federal Board of Revenue (FBR) restructuring. He stated that the FBR would now focus solely on revenue collection, while the Ministry of Finance would handle policy-making matters. This separation, he explained, would lead to greater efficiency and transparency in taxation. Aurangzeb stressed that economic sustainability hinges on fair taxation, but this requires eliminating corruption. He urged all stakeholders to support the governmentâ€™s anti-corruption drive, emphasizing that Pakistanâ€™s tax-to-GDP ratio currently stands at 9-10%, which is insufficient for long-term development. He noted that sectors like agriculture and retail have not been contributing adequately, but in a historic move, agricultural taxation has been introduced for the first time in 75 years. Aurangzeb further explained that tax burdens must be distributed equitably, as the salaried class and manufacturing sector bear the heaviest tax load. The introduction of agricultural taxation will help broaden the tax base and reduce the burden on existing taxpayers. The finance minister assured business leaders that taxation policies would be fair, transparent, and designed to promote economic stability. He emphasized that revenue and customs officials were present at the event to listen to concerns and incorporate them into effective policies. Aurangzeb encouraged stakeholders to submit written recommendations, which would be reviewed to ensure that taxation policies align with business interests. Earlier, FCCI President Rehan Naseem Bharara underscored the importance of sustainable policies for economic stability. He highlighted that Pakistanâ€™s economy is progressing but requires consistent policies to avoid cycles of growth and decline. He also celebrated FCCIâ€™s Golden Jubilee, noting that the All Pakistan Chambersâ€™ Presidents Conference was part of efforts to restore business confidence. Bharara further mentioned that FCCI is the first fully digitalized chamber in Pakistan, offering an SMS-based application that allows members to access services online. He emphasized the potential of the IT sector, stating that Pakistanâ€™s IT exports could reach $100 billion if the government facilitates investment inflows through legitimate financial channels. In recognition of his contributions, FCCI President presented a commemorative shield to Aurangzeb. Several notable figures, including former FPCCI President Mian Muhammad Adrees, also attended the event.

Date: 2025-02-22

Details: Islamabad, February 22, 2025 â€“ Tax collection from retailers has witnessed an unprecedented increase of 98% during the first seven months (July â€“ January) of the ongoing fiscal year 2024-25, according to sources from the Federal Board of Revenue (FBR). This significant rise highlights the growing tax compliance and enforcement measures implemented in recent months. The FBR reported a collection of Rs 19.45 billion from retailers in the first seven months of FY25, a substantial increase from Rs 9.80 billion recorded in the same period last year. This surge is largely attributed to the broader coverage of tax regulations introduced in the latest budget. The tax is collected under Section 236H of the Income Tax Ordinance, 2001, which mandates withholding tax on retailers at varying rates. The application of Section 236H was extended across all sectors of the economy, with rates set at 0.1% and 0.5% for tax filers, while non-filers are subject to higher rates of 2% and 2.5%. These changes have significantly bolstered revenue collection. FBR sources noted that increased digitization and monitoring of retailers have also played a vital role in enhancing tax compliance. The expansion of the tax net has encouraged more businesses to register and fulfill their tax obligations, further boosting collections. Additionally, the amendments in tax regulations have positively impacted other sectors, particularly wholesalers. The FBR successfully collected Rs 13.77 billion from wholesalers in the same period, reflecting a 144% increase compared to Rs 5.64 billion in the corresponding period of the previous fiscal year. This growth mirrors the trends seen in tax collection from retailers, showcasing the effectiveness of recent policy measures. Industry experts believe that the steady rise in tax collection from retailers will contribute to economic stability and increased fiscal revenue. They emphasize that continued efforts in enforcement and digital integration will further strengthen the tax collection framework, ensuring sustained growth in future collections. The FBR remains committed to expanding its revenue base, particularly within the retailers sector, to meet its fiscal targets and enhance the overall economic landscape. These developments mark a crucial step towards greater tax compliance and economic formalization.

Date: 2025-02-22

Details: Karachi, February 22, 2025 â€“ The Pakistan Tax Bar Association (PTBA) has formally appealed to the Chief Justice of Pakistan, Justice Yahya Afridi, to introduce a video link conference facility at all high courts to facilitate taxpayers in tax-related legal proceedings. In a letter addressed to the Chief Justice, the PTBA underscored the numerous challenges taxpayers have encountered following the enactment of the Tax Amendment Act, 2024. The association highlighted how statutory appellate remedies have been significantly redefined, and jurisdictions have been reassigned based on pecuniary thresholds to various appellate forums, including high courts. Consequently, taxpayers are struggling to navigate these new appellate procedures efficiently. Under the revised pecuniary jurisdictions introduced by the Act, the high courts have now become the second appellate forum due to the following changes: â€¢ Taxpayers must directly file a reference from the Commissioner Inland Revenue (Appeals), which is the first stage of appeal, to the High Court if the income tax demand is Rs 20 million or less, sales tax demand is Rs 10 million or less, or Federal Excise Duty (FED) demand is Rs 5 million or less. â€¢ If the demand surpasses the aforementioned thresholds, the taxpayer is required to file a reference before the Appellate Tribunal Inland Revenue before approaching the high court. The PTBA emphasized that these amendments have disproportionately affected taxpayers residing in remote areas where high court benches are not available. As a result, they are compelled to travel frequently to divisional headquarters to submit reference applications, incurring significant financial burdens. The association argued that this situation infringes upon the taxpayersâ€™ fundamental right to appeal, as enshrined in Article 10A of the Constitution. To mitigate these hardships, the PTBA has proposed the establishment of a video link conference facility at both the principal seats and circuit courts of all high courts. The association noted that a similar facility is already operational in the Supreme Court and urged that extending this service to high courts would safeguard taxpayersâ€™ fundamental right of appeal by reducing excessive travel costs. The PTBA urged the Chief Justice to direct the relevant high courts to implement this facility, ensuring taxpayers have seamless access to justice. The association reaffirmed its commitment to protecting taxpayersâ€™ rights and emphasized that providing virtual access to hearings aligns with the Supreme Courtâ€™s fundamental principles of justice and fairness.

Date: 2025-02-22

Details: Islamabad â€“ Banks have collectively remitted Rs 25 billion in windfall tax to the Federal Board of Revenue (FBR) following the dismissal of their petition by the Sindh High Court (SHC), official sources disclosed on Friday. According to insider reports, an agreement was reached between the banks and the FBR, facilitating the immediate payment of Rs 25 billion to the Large Taxpayers Office (LTO) Karachi. The agreement, finalized after extensive deliberations between the FBR chairman, the LTO Chief Commissioner, the State Bank of Pakistan (SBP), and the Pakistan Banks Association, enabled banks to fulfill their tax obligations while retaining the right to challenge the verdict before the Supreme Court of Pakistan. A day prior, the SHC dismissed multiple petitions filed by banking institutions seeking interim relief against the Windfall Income Tax, reaffirming the legal validity of the contentious levy. The division bench rejected the challenges questioning the constitutionality of Section 99D of the Income Tax Ordinance 2001 and SRO 1588(I)/2023, issued on November 21, 2023, to enforce the tax regulation. Sources further indicated that the FBR anticipates an additional collection of approximately Rs 17 billion from banks operating under the jurisdiction of tax offices in Lahore and Islamabad, amplifying the tax revenue from the sector. Section 99D was introduced in the Finance Act, 2023, empowering the FBR to impose supplementary taxation on income, profits, and gains that have arisen due to economic fluctuations yielding windfall earnings. The provision authorized retrospective enforcement for the preceding three tax years, mandating banks to contribute additional levies alongside their standard tax obligations. To operationalize the legislation, the FBR promulgated SRO 1588(I)/2023, detailing the methodology for calculating windfall tax applicable to banking institutions. The primary objective of this tax measure is to curb speculative gains banks accrue through exchange rate volatility and rupee-dollar fluctuations. However, rather than complying outright, banks opted to challenge the constitutionality of the provision in court, seeking judicial intervention. With the SHC ruling in favor of the FBR, banks now face the imperative of adhering to the statutory obligations while evaluating their next legal recourse. This landmark ruling underscores the governmentâ€™s resolve to regulate windfall profits within the banking sector, ensuring equitable taxation and reinforcing fiscal discipline across financial institutions.

Date: 2025-02-21

Details: Islamabad, February 21, 2025 â€“ Pakistanâ€™s tax collection from property transactions has surged to Rs 130 billion during the first seven months (Julyâ€“January) of the fiscal year 2024-25, according to sources within the Federal Board of Revenue (FBR). This represents a 24% increase compared to the Rs 105 billion collected in the same period of the previous fiscal year. The rise in tax collection from property transactions is largely attributed to policy changes introduced by the FBR in the federal budget for 2024-25. The latest amendments have expanded the scope of taxation, ensuring that a larger number of transactions fall under the tax net. According to the FBR, before the Finance Act, 2024, Section 100BA mandated higher withholding tax rates for individuals not listed on the Active Taxpayersâ€™ List (ATL), as specified in the Tenth Schedule of the Income Tax Ordinance. However, the Finance Act, 2024, further broadened the scope by including individuals who, despite being on the ATL, had filed their tax returns after the due date. These changes have significantly contributed to the increased tax collection from property transactions. With the enforcement of these stricter tax measures, there are now two categories of higher tax rates: one for individuals not appearing on the ATL at the time of transaction, and another for those listed in the ATL but who failed to file their returns within the stipulated timeframe. FBR data reveals that tax collection from the sale of immovable property witnessed a 30% jump, reaching Rs 64 billion during the first seven months of FY25, compared to Rs 49 billion in the same period last year. Meanwhile, tax collection from the purchase of property also increased, amounting to Rs 66 billion, up from Rs 56 billion in the previous fiscal year. READ MORE: FBR Revises Tax Rates for Property Transactions in 2025 Analysts suggest that the steady rise in tax collection from property transactions reflects improved compliance and stricter monitoring by tax authorities. Additionally, the governmentâ€™s push for transparency in real estate dealings and enhanced enforcement of tax laws have contributed to higher revenues. As property remains a key sector for investment, the FBR is expected to continue tightening regulations to ensure that tax liabilities are duly met, further boosting the countryâ€™s revenue generation.

Date: 2025-02-21

Details: Karachi, February 21, 2025 â€“ Pakistan Customs has announced revised valuation for imported multimedia projectors to ensure fair assessment of duties and taxes. The decision, formalized through Valuation Ruling No. 1971, was issued under Section 25A of the Customs Act, 1969 and aims to curb misdeclaration while aligning customs values with current market trends. According to Pakistan Customs, the revision follows an in-depth analysis of import data, fluctuating market prices, and concerns raised by importers regarding outdated valuation standards. The existing valuation ruling, in place for over eight years, had become obsolete due to rapid advancements in technology, leading to significantly lower market prices for multimedia projectors. Importers contended that the higher customs values had discouraged legal imports, resulting in an increase in under-invoicing and misdeclaration. They further argued that a fair revision would incentivize legitimate imports, ultimately boosting government revenue. Methodology for Determining Customs Values In line with Section 25 of the Customs Act, 1969, Pakistan Customs adopted a sequential approach to determine the revised customs values. The transaction value method, outlined in Section 25(1), was found unsuitable, as declared import prices did not match actual market rates. Similarly, the identical and similar goods valuation methods under Sections 25(5) and 25(6) were deemed insufficient due to a lack of verifiable commercial data. To ensure accuracy, Pakistan Customs conducted a market survey as per Section 25(7), engaging with wholesalers and retailers to obtain real-time pricing information. Adjustments for profit margins and logistics costs were made, leading to a revised Cost and Freight (C&F) value for various models and sizes of multimedia projectors. Implementation and Impact The new valuation ruling applies to all imported multimedia projectors, ensuring a more transparent and equitable taxation system. Pakistan Customs clarified that if the declared invoice values exceed the newly established customs values, assessments will be conducted based on the higher values, as per Section 25(1) of the Customs Act, 1969. The revised valuation is expected to improve compliance, reduce revenue losses from under-invoicing, and encourage legitimate trade in multimedia projectors. Pakistan Customs continues to monitor import trends and remains committed to updating valuation rulings in line with technological advancements and market realities.

Date: 2025-02-21

Details: ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet approved income tax exemption for the International Cricket Council (ICC) in connection with the ICC Champions Trophy 2025. The Economic Coordination Committee (ECC) of the Cabinet met Thursday under the chairmanship of Minister for Finance and Revenue, Senator Muhammad Aurangzeb, at the Finance Division, Islamabad. The committee deliberated on important economic matters and approved key decisions. The meeting was attended by Minister for Petroleum, Musadik Masood Malik; Minister for Industries and Production, Rana Tanveer Hussain, Chairman FBR, Chairman SECP, Federal Secretaries, and senior officers from concerned ministries and divisions. The ECC deliberated on the summary of Revenue Division and approved income tax exemptions for the International Cricket Council (ICC) in connection with the ICC Champions Trophy 2025. These exemptions align with international best practices for hosting global sports events. Under the standardized hosting rights agreement between ICC and Pakistan, no taxes or deductions will be applied to ICC revenues, its subsidiaries, associates, officials, and non-resident delegates. However, Pakistani residents, including the Pakistan Cricket Board (PCB), will remain subject to income tax on their earnings from the tournament. There will be no exemptions from Sales Tax and Federal Excise Duty (FED). The tax exemption is not expected to result in a revenue loss, as it was a prerequisite for securing the tournamentâ€™s hosting rights. The committee also discussed the summary of Ministry of National Food Security & Research regarding lifting of the ban on the commercial export of sheep and goats to Kuwait, but deferred the agenda for further clarification and due diligence A Technical Supplementary Grant (TSG) of Rs. 6.859 billion was approved in favor of the Ministry of Energy (Power Division) for development expenditures in the current financial year (2024-25). Based on the summary of Petroleum Division, the ECC also approved the extension of the LNG Framework Agreement between Pakistan LNG Limited (PLL) and SOCAR Trading for another three years. Initially signed in 2023, the agreement allows PLL to procure one LNG cargo per month when required, without any financial obligations or take-or-pay commitments. The extension aligns with Pakistanâ€™s strategy for flexible LNG procurement based on seasonal demand, ensuring cost-effective energy solutions. Copyright Business Recorder, 2025

Date: 2025-02-20

Details: ISLAMABAD: A foreign investor in the real estate sector on Wednesday proposed the Federal Board of Revenue (FBR) for immediately granting tax relief incentives, decrease in transaction taxes and streamlining taxation and regulatory procedures to encourage more robust activity within the sector. Tarek Hamdy, CEO of Eighteen Housing, recently convened with a select group of journalists to underscore the real estate sectorâ€™s indispensable contribution to national growth. Amidst ongoing discussions about the upcoming relief package by the Pakistani government, Hamdy passionately argued for prioritizing the real estate industry, citing its multifaceted impact on the broader economy. The CEO Eighteen highlighted that the real estate sector serves as a cornerstone for economic revival, with implications that extend far beyond mere property transactions. â€œReal estate isnâ€™t just about buying and selling homes; itâ€™s a catalyst for economic prosperity.â€ He pointed out that over 250 ancillary industries are intricately linked to real estate, ranging from construction materials to interior design services, all of which stand to benefit from a revitalized housing market. He stressed that a thriving real estate market would create a ripple effect, generating employment opportunities, boosting consumer confidence, and ultimately contributing significantly to GDP growth. â€œBy stimulating the real estate sector, we are not only rejuvenating housing demand but also fostering growth across various allied industries,â€ he added. In advocating for government support, Hamdy proposed a series of measures aimed at easing business conditions and supporting property buyers stating that if government wants to facilitate economic recovery, itâ€™s crucial to create an environment conducive to investment. Furthermore, addressing concerns raised by critics advocating for prioritizing manufacturing and other sectors, Hamdy emphasized the interconnectedness of industries. â€œWhile every sector is important, the real estate industryâ€™s ability to stimulate growth across a broad spectrum of economic activities cannot be understated,â€ he argued. â€œA vibrant real estate market doesnâ€™t just benefit homeowners; it fuels demand for goods and services across the board.â€ Copyright Business Recorder, 2025

Date: 2025-02-20

Details: LAHORE: A taxpayer has succeeded in availing duty and taxes applicable on damaged goods under Duty and Tax Remission on Exports (DTRE). According to details, the taxpayer had failed to report the incident of fire in his factory within due time, leading to damaging of goods. However, the department refused any such facility to the taxpayer on the pretext that he had failed to report the fire incident within time, therefore, he was not entitled to the benefits of duty and tax remission. The taxpayer, on the other hand, contended that the incident of fire and damage to the factory was an admitted fact, whereas, the insurance claim was also settled in his favour, therefore, he was entitled to duty and taxes applicable on the damaged goods. The relevant appellate forum maintained that the incident of fire on the relevant date was not disputed, and the tribunal had observed that once it had come on record that the goods were destroyed due to fire, then benefit of the relevant rule ought to have been granted the facility of duty and tax remission on Exports (DTRE) has to account for all of such goods on which such benefit has been granted, whereas, under the relevant rule the unaccounted goods are dealt with and it further deals with the permission of the regulatory collector for disposal of such goods within the prescribed utilization period and permits destruction of such goods after approval of the regulatory collector if such goods are not fit for consumption or sale. Goods in question were, admittedly, never fit for consumption, once they were destroyed in the fire. Regulatory authority ought to have exercised the discretion conferred upon under the relevant rule, as the law permits remission of duty and taxes. Whereas, the present case was of an exceptional nature where an incident happened and the factory including various other factories were destroyed in riots. Therefore, the order passed by the tribunal was correct in law and no cogent reasons had been assigned by the authority below for refusing such discretion. Reference application filed by the department was dismissed. Copyright Business Recorder, 2025

Date: 2025-02-20

Details: February 20, 2025 Islamabad, February 20, 2025 â€“ The Economic Coordination Committee (ECC) of the Cabinet, in a meeting on Friday, granted approval for a tax exemption on the income generated by the International Cricket Council (ICC) from the ICC Champions Trophy 2025. The ECC, chaired by Minister for Finance and Revenue, Senator Muhammad Aurangzeb, convened at the Finance Division, Islamabad, to discuss key economic decisions. The meeting saw participation from Minister for Petroleum Musadik Masood Malik, Minister for Industries and Production Rana Tanveer Hussain, Chairman of the Federal Board of Revenue (FBR), Chairman of the Securities and Exchange Commission of Pakistan (SECP), Federal Secretaries, and senior officials from relevant ministries and divisions. The ECC reviewed the Revenue Divisionâ€™s proposal and approved income tax exemptions for the ICC, aligning with international best practices for hosting major global sporting events. As per the standardized hosting rights agreement between ICC and Pakistan, all revenues earned by the ICC, its subsidiaries, associates, officials, and non-resident delegates will be exempt from income tax. However, Pakistani residents, including the Pakistan Cricket Board (PCB), will remain subject to income tax on their earnings from the tournament. Sales Tax and Federal Excise Duty (FED) will continue to apply, ensuring that local tax obligations remain intact. The tax exemption was a necessary condition for securing the hosting rights for the event and is not expected to result in a revenue loss. During the meeting, the ECC also reviewed a proposal from the Ministry of National Food Security & Research regarding the removal of the ban on commercial exports of sheep and goats to Kuwait. However, the decision was deferred for further clarification and due diligence. In another significant development, the ECC approved a Technical Supplementary Grant (TSG) of Rs. 6.859 billion for the Ministry of Energy (Power Division) to support development expenditures in the current financial year (2024-25). Additionally, based on the Petroleum Divisionâ€™s summary, the ECC approved the extension of the LNG Framework Agreement between Pakistan LNG Limited (PLL) and SOCAR Trading for another three years. Originally signed in 2023, the agreement enables PLL to procure one LNG cargo per month as needed, without any financial obligations or take-or-pay commitments. This extension aligns with Pakistanâ€™s strategy for flexible LNG procurement, ensuring cost-effective energy solutions based on seasonal demand. The ECC continues to play a crucial role in shaping Pakistanâ€™s economic policies, facilitating international partnerships, and ensuring a stable financial framework for future growth.

Date: 2025-02-20

Details: Karachi, February 20, 2025 â€“ The Federal Board of Revenue (FBR) has failed to meet the deadline for notifying the finalized FBR return forms for income tax year 2025, raising concerns among taxpayers and experts regarding compliance and regulatory adherence. According to established rules, the FBR was required to issue the finalized FBR return forms by January 31, 2025, yet the delay continues with no official justification provided. Tax professionals have criticized the FBR for this lapse, stating that the delay in issuing FBR return forms disrupts the filing process and adds to taxpayer uncertainty. Zeeshan Merchant, former president of the Karachi Tax Bar Association (KTBA), expressed his concerns, stating, â€œIf the FBR itself does not comply with tax regulations, how can it expect taxpayers to adhere to filing deadlines?â€ He further pointed out that KTBA has repeatedly highlighted similar rule violations in previous years, yet the FBR continues to delay the issuance of FBR return forms. As per Rule 34A of the Income Tax Rules, 2002, specific timelines govern the issuance of FBR return forms to ensure transparency and ease of compliance. The rules require the Inland Revenue Policy Wing to identify legal amendments by August 31 of the financial year, while collaboration with IT authorities, including PRAL, must finalize configuration and development by October 31. The User Acceptance Test (UAT) is to be completed by November 15 to ensure that the return forms meet technical and regulatory standards before official notification. Stakeholders are given until January 7 to provide feedback on the draft FBR return forms, after which the final review is conducted. The finalized forms should then be uploaded on the IRIS portal by January 31. However, with the FBR missing this deadline, tax practitioners warn that last-minute changes could further complicate the filing process for taxpayers. Given this delay, experts emphasize the need for the FBR to streamline its processes and ensure timely compliance with the law. Any additional amendments affecting the final FBR return forms must be incorporated efficiently to prevent further disruptions. Failure to do so could result in administrative burdens for both taxpayers and tax authorities, ultimately affecting overall compliance rates.

Date: 2025-02-18

Details: Karachi, February 18, 2025 â€“ The Pakistan Business Council (PBC) has raised concerns over the high tax rates on salaried individuals, warning that these excessive rates are driving skilled professionals to seek opportunities abroad, resulting in a significant brain drain. In its tax proposals submitted to the Federal Board of Revenue (FBR), the PBC highlighted the disproportionate tax burden faced by salaried individuals. Currently, salaried persons in Pakistan are subjected to an income tax of up to 29%, along with a 10% super tax and a 15% dividend tax. The PBC emphasized that such high taxation discourages talent retention and pushes professionals towards informal, untaxed sectors. The PBC recommended a reduction in the tax burden on salaried employees to curb the ongoing exodus of skilled labor. It suggested revising the existing tax slabs to account for inflation, ensuring a more equitable and competitive taxation structure that aligns with global standards. Furthermore, the PBC pointed out the challenges posed by the general sales tax (GST), which currently stands at 18%. In an economy with a large undocumented sector, this high GST rate creates a strong incentive for tax evasion. The council proposed a gradual reduction in the GST rate by 1% annually until it reaches 15%. Such a measure, the PBC argued, would enhance compliance and expand the tax base. The PBC also raised concerns regarding the effective 48% tax rate on the corporate sector, which includes corporate income tax, super tax, and withholding taxes. This high tax burden, the council noted, renders Pakistan less attractive for both domestic and foreign investors. To foster a more investment-friendly environment, the PBC recommended gradually reducing the corporate tax rate by 1% annually until it reaches 25%, a level comparable with other emerging economies. Additionally, the PBC advocated for the discontinuation of multiple taxation on inter-corporate dividends. The council explained that eliminating this practice would encourage corporate consolidation, promote diversification, and support the growth of the capital market by broadening the investor base. The PBC remains committed to working with policymakers to create a fairer, more competitive tax environment that supports economic growth and retains the countryâ€™s human capital.

Date: 2025-02-18

Details: Karachi, February 18, 2025 â€“ In a significant move against non-compliance with tax regulations, the Regional Tax Office (RTO)-1 Karachi has sealed three major retail outlets on Tariq Road for violating Point of Sale (POS) rules. Tariq Road, known as one of Karachiâ€™s busiest commercial hubs, witnessed these enforcement actions as part of RTO-1 Karachiâ€™s ongoing crackdown on businesses flouting POS integration requirements. According to an official statement issued on Tuesday, RTO-1 Karachi conducted three separate operations in a single day. In the first action, a well-known fashion designer outlet was sealed for issuing receipts disconnected from the POS system. Subsequently, RTO-1 Karachi teams sealed two additional storesâ€”one specializing in childrenâ€™s toys and the other in household itemsâ€”for similar violations. READ MORE: FBR Tightens POS Rules to Seal Tier-1 Retailer Outlets The enforcement actions were carried out within the jurisdiction of RTO-1 Karachi Zone 3 under Rule 150ZEO of the Sales Tax Rules, 2006. The rule mandates that all Tier-1 retailers must be integrated with the Federal Board of Revenueâ€™s (FBR) POS system to ensure real-time sales reporting and prevent tax evasion. Chief Commissioner Dr. Faheem Muhammad commended the RTO-1 Karachi team for their swift action, highlighting the significance of these measures in promoting tax compliance. â€œEnsuring compliance with POS regulations is essential for transparent business practices. Our teamâ€™s dedication in sealing three outlets in one day demonstrates our resolve against violations,â€ he stated. Dr. Muhammad also directed officials to intensify these operations in the coming days. The crackdown follows the FBRâ€™s recent amendments to the Sales Tax Rules through SRO 164(I)/2025. The updated rules empower tax authorities to seal any retail outlet found issuing unverified invoices or disconnecting from the POS network for more than 48 hours. Additionally, retailers are required to upload offline sales records within 24 hours of reconnection. Non-compliance with these requirements will result in sealing the premises. Previously, authorities could only act if three unverified invoices were issued in a day or five within a week. The lowered threshold signals a more aggressive approach toward tax evasion. RTO-1 Karachi reiterated its commitment to ensuring that all retailers comply with the POS integration rules to support transparent tax collection and strengthen Pakistanâ€™s financial system.

Date: 2025-02-18

Details: Karachi, February 18, 2025 â€“ The Federal Board of Revenue (FBR) has provided a detailed explanation regarding the definition of fraud under the Customs Act, 1969. Fraud within the customs framework is comprehensively defined in Section 32A of the Act, which outlines various fraudulent practices and the corresponding penalties. According to the FBR, Section 32A of the Customs Act, 1969 identifies fraud in the context of customs operations through several specific actions: 1. Submission of False Documents: Any person who submits documents, either physically or electronically, to customs authorities, which are altered, forged, mutilated, or counterfeit, is committing fraud under this section. 2. False Declaration of Exporter or Importer Information: If the customs declaration contains the name or address of an exporter or importer who does not physically exist, it is categorized as fraudulent activity. 3. Misrepresentation of Goods: Providing untrue information about goods in the customs declaration, such as inaccurate details regarding quantity, quality, origin, value, or payment of customs duties and taxes, constitutes customs fraud. 4. Incorrect Valuation: Declaring a value that significantly deviates from the actual price paid or payable for goods intended for export to Pakistan is considered fraudulent. Customs authorities have the right to initiate proceedings if such practices are detected. 5. Document Alteration: Tampering with any findings recorded by customs officials, whether on physical documents or in computerized systems, is a punishable offense. 6. Aiding and Abetting: Anyone who attempts, assists, or conspires in any of the aforementioned fraudulent activities is equally liable under customs regulations. The Customs Act, 1969 mandates that if customs fraud results in unpaid or underpaid duties, taxes, or penalties, the liable party will receive a notice within 180 days from the date of detection. This notice requires the individual to explain why they should not be charged the specified amount along with any applicable fines or penalties. Additionally, the customs authorities emphasize that even if the fraud does not involve revenue loss, a show-cause notice will still be issued within the stipulated 180-day period. The Adjudicating Officer will review the case, and the offender may be required to pay the determined amount, along with potential fines or penalties. The FBR continues to stress the importance of compliance with customs regulations to maintain the integrity of Pakistanâ€™s trade and customs operations. Fraudulent activities not only undermine the system but also lead to severe legal consequences under the Customs Act, 1969.

Date: 2025-02-17

Details: LAHORE: The Federation of All Pakistan Universities Academic Staff Associations (FAPUASA) has urgently called on the Federal Board of Revenue (FBR) to halt its decision to revoke the 25% tax rebate for full-time teachers and researchers, terming the move â€œillegal, illogical, and a violation of parliamentary authority.â€ In a formal letter addressed to the FBR Chairman, FAPUASA President Dr. Amjad Abbas Magsi and General Secretary Dr. Muhammad Uzair demanded the immediate withdrawal of letters, including No. 3997 dated January 8, 2025, issued by the Chief Commissioner of the Regional Tax Office in Rawalpindi. According to the press release issued by Dr. Ahtisham Ali, Central Information Secretary, FAPUASA Pakistan the association earlier appealed to Federal Finance Minister Muhammad Aurangzeb for the restoration of the tax relief, stressing that the rebate was formally approved during the 2024-25 budget speech on June 28, 2024, and enshrined in National Assembly records and income tax manuals since 2022. FAPUASA has also forwarded copies of its latest appeal to the President, Prime Minister, and Finance Minister, urging prompt intervention to resolve the escalating crisis. Expressing â€œdeep concern and disappointment,â€ Dr. Magsi condemned the FBRâ€™s mid-fiscal-year reversal as a unilateral overreach that disregards parliamentary decisions. â€œThese letters bypass legislative mandates based on arbitrary interpretations, undermining the authority of Parliament,â€ he stated. The abrupt revocation has sparked widespread unrest among university faculty already struggling with chronic underfunding, delayed salaries, and institutional mismanagement. While acknowledging the governmentâ€™s earlier efforts to retain the rebate, FAPUASA warned that failure to resolve the issue would compel the association to launch nationwide protests against the FBRâ€™s â€œunjustified actions.â€ Copyright Business Recorder, 2025

Date: 2025-02-16

Details: Islamabad, February 16, 2025 â€“ Rashid Mahmood Langrial, Chairman of the Federal Board of Revenue (FBR), has categorically denied any plans to introduce a tax amnesty scheme for property transactions. His remarks came during a televised interview where he addressed growing speculation regarding potential relaxations in income disclosure for real estate investments. Speaking on the matter, the FBR chief emphasized, â€œThere is no discussion at any level to grant any relaxation in the disclosure of income for the purchase of immovable property. Allowing such a relaxation would essentially amount to an amnesty.â€ He further clarified that this issue had not been brought up during the meetings of the Prime Ministerâ€™s task force. Despite the FBR chairmanâ€™s statement, reports suggest that the task force has proposed a waiver of wealth reconciliation requirements for investments in the real estate and construction sectors, up to Rs 50 million. This recommendation has raised concerns about indirectly introducing an amnesty for property transactions. The FBR chairman also acknowledged the challenges posed by the current high tax rates on property transactions. He confirmed that the FBR is actively reviewing the possibility of reducing advance tax rates on the sale and purchase of immovable properties to encourage transparency and compliance. The task force, in its recommendations to the government, has advocated for several key policy changes. These include the potential abolition of Section 7E of the Income Tax Ordinance, 2001, and the removal of the Capital Value Tax (CVT) in Islamabad. The proposed measures aim to simplify the tax regime and promote investment in the real estate sector. Additionally, the task force has suggested updating property valuations every three years to better align with market rates. It also recommended exemptions from transaction taxes for specific categories, such as low-cost housing projects, government-allocated plots, and first-time homebuyers. The FBRâ€™s stance remains firm on rejecting any form of amnesty for property transactions, while continuing to explore ways to streamline taxation policies and foster growth in the real estate sector. The chairman reiterated that the FBRâ€™s primary objective is to enhance transparency and broaden the tax base without resorting to amnesty schemes.

Date: 2025-02-16

Details: February 16, 2025 Islamabad, February 16, 2025 â€“ The province of Punjab has emerged as the leader in motor vehicle tax collection among all provinces in Pakistan during the first half of the fiscal year 2024-25. According to the latest data released by the federal finance ministry, Punjab collected a remarkable Rs 14.68 billion from July to December 2024. This figure represents a substantial 50.56% increase compared to Rs 9.75 billion collected during the same period in the previous fiscal year. The overall motor vehicle tax collection in Pakistan also witnessed significant growth, surging by 56.55% to reach Rs 25.08 billion in the first half of FY25. This marks a notable rise from the Rs 16.02 billion collected in the corresponding months of the previous fiscal year. Economic analysts have attributed this sharp increase in tax collection to a rise in vehicle sales during the review period. Additionally, the substantial hike in vehicle prices contributed significantly to the higher tax revenues. The province of Punjab, being a major hub for automobile transactions, played a pivotal role in driving this upward trend. Although Punjab led in absolute figures, Sindh recorded the highest percentage increase in tax collection. The province posted a growth rate of 77%, collecting Rs 8.41 billion during the first half of FY25, compared to Rs 4.75 billion in the same period last year. Meanwhile, Khyber Pakhtunkhwa reported a 35.24% growth in motor vehicle tax revenue, with collections reaching Rs 1.42 billion, up from Rs 1.05 billion in the previous year. In Balochistan, motor vehicle tax collections rose by 22%, totaling Rs 567 million compared to Rs 465 million collected during the corresponding period last fiscal year. Punjabâ€™s impressive performance in motor vehicle tax collection underscores the provinceâ€™s growing economic activity and its significant role in the national revenue framework. With an expanding vehicle market and rising automobile prices, Punjabâ€™s contribution to the national exchequer is expected to remain strong in the coming months. Authorities anticipate continued growth, provided the economic conditions and market trends persist favorably.

Date: 2025-02-16

Details: Karachi, February 16, 2025 â€“ The Federal Board of Revenue (FBR) has granted customs officers the authority to request documents from importers or exporters concerning consignment clearance. This measure aims to ensure compliance with customs regulations and to facilitate transparent international trade operations. According to the FBR, Section 26 of the Customs Act, 1969, outlines the obligation to produce documents and provide information when required. Customs officers, particularly those not below the rank of an Assistant Collector, have the power to demand such documentation in writing. Section 26 specifies the following responsibilities: 1. Provision of Information: Any person must provide information regarding the importation, exportation, purchase, sale, transportation, storage, or handling of goods when requested by a customs officer. 2. Document Examination: Customs officers may request the production of relevant documents or records for examination as part of an audit, inquiry, or investigation. 3. Copying of Records: The appropriate customs officer is authorized to make copies or take extracts from the submitted records if necessary for their investigation. 4. Personal Appearance: Individuals may be summoned to appear before customs officials to respond to inquiries about goods, documents, or transactions related to the investigation. Additionally, subsection (1A) empowers customs authorities to gather information for the End Use Verification of goods specified under Program Global Shield. This initiative enhances customsâ€™ ability to track and control the movement of sensitive goods and materials. Customs officers are also permitted to issue written requests to individuals, departments, companies, or organizations for information pertinent to audits, inquiries, or investigations. Such requests must be complied with within the specified timeframe. The FBR emphasized that customs authorities play a pivotal role in safeguarding national economic interests. The ability to call for documents helps customs officials prevent smuggling, ensure accurate duty collection, and maintain the integrity of cross-border trade. By strengthening the documentation and information requisition process, customs officers can more effectively monitor trade activities and enforce regulations. This development underscores the crucial role of customs in maintaining a secure and efficient trading environment in Pakistan.

Date: 2025-02-16

Details: Islamabad, February 16, 2025 â€“ The Federal Board of Revenue (FBR) has reported a significant 53% surge in tax collection from the salaried class during the first seven months (Julyâ€“January) of the fiscal year 2024-25. According to provisional figures released by the FBR, the tax collection from the salaried class increased to Rs 284.22 billion during this period, compared to Rs 185.50 billion in the corresponding months of the previous fiscal year. FBR officials attributed this remarkable growth to the improved monitoring of withholding taxes and the amendments introduced through the Finance Act, 2024. The revised regulations have strengthened compliance measures and minimized loopholes, resulting in higher revenue inflows. In a strategic move to enhance tax compliance and combat financial irregularities, the FBR has launched a comprehensive crackdown on excessive withholding tax (WHT) deductions. The authority has identified discrepancies amounting to Rs 200 billion in withholding tax claims. Sources within the FBR disclosed that an intensive investigation revealed significant anomalies in withholding tax payment claims in annual income tax returns, filed under various provisions of the Income Tax Ordinance, 2001. This discovery has prompted the FBR to intensify its enforcement actions against entities and individuals involved in tax evasion through misreporting and fraudulent claims. A detailed forensic audit of declared withholding tax deductions, paired with an analysis of tax credits against actual deposits in the government treasury, uncovered alarming inconsistencies. Investigators found that approximately Rs 200 billion had not been transferred to the national exchequer, exposing a critical weakness in the tax administration system. The most prominent discrepancy was found under the salaries category, where Rs 147 billion worth of tax credits were claimed without corresponding deductions by employers over the past five fiscal years. This significant tax gap underscores the urgent need for more stringent payroll tax oversight. The FBR has reiterated its commitment to reinforcing compliance through enhanced monitoring mechanisms and stricter enforcement protocols. The revenue body plans to expand its investigative efforts, ensuring that all unpaid dues are recovered and that the tax system operates with greater transparency and efficiency. Moving forward, the FBR aims to implement advanced technological tools and data analytics techniques to identify irregularities proactively. These measures are expected to further strengthen tax collection efforts, particularly within the salaried class, and contribute positively to the national revenue stream.

Date: 2025-02-14

Details: ISLAMABAD: Tax advisers have reported incidents where tax officials are allegedly pressurizing taxpayers to withdraw complaints filed before the Federal Tax Ombudsman (FTO) against their intentional delaying tactics in issuance of refunds. These refunds were due on account of appeal order of the Tribunal against which no reference was filed before the Lahore High Court and the appeal order had attained finality a year ago. The tax experts explained that creation of Refund Zone in the field formations on the pretext of facilitating the taxpayers has proved to a ploy to create further hurdles in obtaining income tax refunds. Since creation of these specialized zone either further hurdles or pick and choose has become the policy. When contacted Miss Sofia, Income Tax Practitioner/authorized representative of a Lahore based taxpayer being assessed at a Large Taxpayer Office (LTO) explained that when in follow up of pending refund claim she met the Additional Commissioner with whom file was stuck for a week he required that he will sign only if the complaint filed by the taxpayer before FTO is withdrawn. He warned that if complaint is not withdrawn and FTO holds that delay is maladministration then he will file representation before the President and the taxpayer will not get refund for at least one year. Sofia argued that the earlier partial refund was issued by the Department on filing writ petition and the curtailment of refund was disapproved by the Appellate Tribunal with the direction to issue balance refund with compensation for delay within 30 days. The appeal order was accepted by the Department and no reference was filed before the High Court. Thereafter four reminders were filed for issuance of refunds apart from dozens of follow up visits but all in vain. In these compelling circumstances compliant had to be filed and the FTO had called for report. On calling for report the DCIR processed the refund claim in the IRIS and sought administrative approval of the Commissioner through proper channel and the Additional Commissioner was holding file for a week when the AR of the taxpayer met him and the Additional Commissioner has pressurized her to withdraw compliant otherwise refund will be got delayed by filing representation to the President which takes months to decide. Sofia claimed that this is clearly blackmailing apart from the manifestation of ulterior motives and requested the Chairman FBR to take notice of such further maladministration and misconduct which mars the image of the Department. Copyright Business Recorder, 2025

Date: 2025-02-14

Details: Karachi, February 14, 2025 â€“ The Federal Board of Revenue (FBR) has provided clarification regarding dutiable goods, specifying the categories of goods on which customs authorities are mandated to collect duties and taxes upon importation. The guidelines are laid out in Section 18 of the Customs Act, 1969. According to the FBR, dutiable goods include: 1. Goods Imported into Pakistan: Any items brought into the country from abroad are subject to customs duties as specified in the First Schedule or under other applicable laws. 2. Goods Transshipped or Transported Between Customs Stations: Goods arriving from a foreign country to one customs station and subsequently moved to another without duty payment are also dutiable. 3. Bonded Goods Moved Between Customs Stations: Goods transported in bond between customs stations fall under the ambit of dutiable goods. Additional Provisions under Section 18 The Customs Act also prescribes additional measures concerning customs duties: â€¢ Special Duty Rates: Sub-section 1A empowers the government to impose custom duties at rates specified in the Fifth Schedule, subject to conditions and restrictions as detailed therein. â€¢ Export Duties: Sub-section 2 categorically states that no export duty shall be levied on goods exported from Pakistan. â€¢ Regulatory Duties: Under sub-section 3, the federal government can, via official notification, impose regulatory duties on imports or exports. These duties can reach up to 100% of the determined value of goods, with specific conditions outlined for their application. â€¢ Additional Customs Duties: Sub-section 5 allows the government to levy an additional customs duty on specified imported goods, up to 35% of their value. However, the cumulative customs duty, including additional levies, must comply with the limits established in Pakistanâ€™s multilateral trade agreements. The FBR highlighted that these duties are calculated based on the value of goods as assessed under Sections 25 and 25A of the Customs Act. The imposition of these duties is effective from the date specified in the relevant official notification, irrespective of the notificationâ€™s publication date. By explaining these provisions, the FBR aims to enhance transparency regarding customs duties and facilitate better compliance among importers. This clarification is particularly significant for businesses engaged in cross-border trade, ensuring adherence to legal requirements and contributing to the nationâ€™s revenue generation.

Date: 2025-02-14

Details: Islamabad, February 14, 2025 â€“ The Finance Ministry has issued a notification announcing the establishment of a dedicated Tax Policy Office, leaving the Federal Board of Revenue (FBR) to focus exclusively on revenue collection. According to the notification issued by the Finance Ministry, the federal cabinet has approved the creation of the Tax Policy Office within the ministry to support the governmentâ€™s broader economic reform agenda. This newly formed office will play a critical role in the development, evaluation, and implementation of tax policies. The Tax Policy Office will provide analytical support by conducting in-depth assessments of tax policies and proposals. It will utilize advanced data modeling techniques, revenue forecasting tools, and economic impact analyses to guide policy decisions. Additionally, the office will oversee Pakistanâ€™s international tax treaties and obligations, ensuring compliance with global standards. The notification states that the Tax Policy Office will report directly to the Minister for Finance and Revenue. The staffing of the Tax Policy Office, as sanctioned by the federal cabinet, will be carried out with the joint approval of the Establishment Division and the Finance Division, in accordance with government regulations. â€œThe responsibilities and organizational structure of the Tax Policy Office may be revised as necessary to enhance its operational efficiency, subject to the federal cabinetâ€™s approval,â€ the notification added. For decades, the FBR has been responsible for both tax policy formulation and operational execution. This significant policy shift aims to relieve the FBR of its dual responsibilities, enabling it to focus entirely on tax collection efforts. The decision was prompted by concerns over the stagnant tax-to-GDP ratio despite numerous reform initiatives. Tax experts have largely welcomed the governmentâ€™s bold move, recognizing the potential for improved efficiency and effectiveness in both policy formulation and revenue collection. They believe that the Tax Policy Officeâ€™s establishment will bring greater clarity and direction to the countryâ€™s tax strategy, while allowing the FBR to concentrate on optimizing tax collection mechanisms. With the Tax Policy Office now operational, the government anticipates better-informed tax policies and a more streamlined, performance-driven revenue collection process.

Date: 2025-02-14

Details: Karachi, February 14, 2025 â€“ The Pakistan Tax Bar Association (PTBA) has voiced significant apprehensions regarding the introduction of SRO 69(I)/2025, issued by the Federal Board of Revenue (FBR) on January 29, 2025. In a formal communication addressed to the FBR chairman, the PTBA highlighted various concerns about the implications of the new procedural guidelines for licensing, electronic invoicing, and integration of registered taxpayers. The PTBA, after thoroughly reviewing the contents and potential outcomes of SRO 69(I)/2025, has recommended several measures to improve compliance while safeguarding the interests of honest taxpayers. The association acknowledged the FBRâ€™s efforts to document the supply chain but emphasized that past initiatives, such as the Point of Sale (POS) integration, were not implemented effectively, leading to a lack of trust within the taxpayer community. According to the PTBA, the procedural requirements outlined in SRO 69(I)/2025, including rules 150X to 150XQ, must be enforced cautiously. The association expressed concern about past instances where abrupt enforcement actions by FBR officials resulted in legal setbacks and damaged the reputation of compliant businesses. The PTBA stressed that all registered persons should be promptly notified and provided with clear, simplified guidelines to facilitate compliance. The PTBA also recommended that integration and licensing procedures should be streamlined to minimize costs for taxpayers. They proposed allowing businesses to integrate with the FBRâ€™s PRAL system using their existing IT consultants, a step that would reduce dependency on external licensing bodies and curb opportunities for malpractice and harassment. Furthermore, the PTBA suggested abolishing routine sales tax audits, given that the new electronic invoicing system provides real-time transaction monitoring. They argued that continuing with standard audits would impose unnecessary burdens on businesses, increase compliance costs, and erode trust in the tax administration. The PTBA reiterated its commitment to supporting initiatives aimed at broadening the tax base but stressed the importance of transparent, taxpayer-friendly implementation. The association warned that inconsistent enforcement or preferential treatment of certain businesses could undermine the effectiveness of SRO 69(I)/2025 and perpetuate non-compliance. In conclusion, the PTBA called on the FBR to address these concerns promptly, ensuring that the new regulations foster a fair, efficient, and harassment-free tax environment. The PTBA emphasized the need for open dialogue and collaborative efforts to build taxpayer confidence and enhance revenue collection for national development.

Date: 2025-02-14

Details: Islamabad, February 14, 2025 â€“ The Federal Board of Revenue (FBR) has taken decisive action against tax fraud by sealing a prominent sugar mill in interior of Sindh, following allegations of large-scale tax evasion and manipulation of the track and trace system, sources reported on Friday. According to reliable sources, an Inland Revenue team, acting on specific intelligence, conducted a raid on the sugar mill located in the interior of Sindh. The investigation revealed deliberate bypassing of the FBRâ€™s track and trace system, designed to monitor production and ensure accurate tax payments. It was discovered that the mill was reusing previously used sugar bags, applying counterfeit stamps, and thereby concealing taxable production and sales. The track and trace system, implemented by the FBR to enhance transparency in the sugar industry, requires each bag of sugar to be marked with a unique stamp. However, the raid uncovered numerous bags bearing fake stamps, suggesting an organized effort to evade taxes. By flouting the system, the mill allegedly concealed significant quantities of sugar production, resulting in substantial revenue losses for the national exchequer. â€œThis act of tax evasion not only undermines the integrity of our fiscal system but also deprives the government of much-needed revenue,â€ said an FBR official, who requested anonymity. â€œWe are committed to curbing such malpractices to ensure a level playing field for compliant businesses.â€ The FBR estimates an annual tax gap of approximately Rs 60 billion in the sugar sector, with a significant portion, nearly one-quarter, attributed to mills operating in Sindh. This latest enforcement action underscores the FBRâ€™s resolve to tighten regulatory controls and hold violators accountable. Further investigations are underway, and sources indicate that similar raids are imminent, with the potential sealing of eight to ten more sugar mills across the country in the coming days. The FBR has reiterated its commitment to combating tax evasion through stringent monitoring, robust enforcement actions, and enhanced use of technological tools like the track and trace system. The FBRâ€™s recent actions serve as a stark reminder to businesses regarding the importance of tax compliance. Authorities have vowed to continue their crackdown until the sugar industryâ€™s tax obligations are fully met and the sector operates within the legal framework.

Date: 2025-02-13

Details: Karachi, February 13, 2025 â€“ The Federal Board of Revenue (FBR) has officially issued a notification detailing the list of prohibited goods for foreign trade for the tax year 2025. This notification, in accordance with Section 15 of the updated Customs Act, 1969, outlines the categories of goods that are strictly forbidden from being imported into or exported from Pakistan. According to the FBR, the prohibited goods include the following: 1. Counterfeit Currency and Coins: o Counterfeit coins, forged or fake currency notes, and any other counterfeit monetary items are strictly banned. 2. Obscene and Inappropriate Materials: o Materials such as obscene books, pamphlets, papers, drawings, paintings, photographs, films, videos, audio recordings, CDs, or content in any other format are not allowed for trade. 3. Infringing Goods with Counterfeit Trademarks: o Goods with counterfeit trademarks, as defined under Pakistanâ€™s intellectual property laws, including the Pakistan Penal Code, 1860, and the Trade Marks Ordinance, 2001, are prohibited. 4. Misleading Product Origin: o Items manufactured outside Pakistan that display a Pakistani name or trademark without clearly indicating their true origin are prohibited. The country of origin must be displayed prominently in the same language and size as the brand name. 5. Copyright-Infringing Products: o Goods that infringe on copyrights, including intellectual property protected under the Copyright Ordinance, 1962, and related laws, are strictly banned. 6. Unauthorized Replicas and Imitations: o Products imitating protected designs, patents, or layouts without the permission of the registered owner are not permitted. The FBR emphasized the importance of complying with these regulations to prevent violations of intellectual property rights and to uphold trade integrity. Any infringement of these rules will be adjudicated by customs officials under Section 179 of the Customs Act. The FBR reiterated that these prohibitions are crucial for maintaining lawful international trade practices. Traders and businesses are advised to consult the latest FBR guidelines to ensure compliance and avoid potential penalties. The FBR remains committed to regulating Pakistanâ€™s foreign trade in line with global standards while safeguarding intellectual property and public interests.

Date: 2025-02-13

Details: Karachi, February 13, 2025 â€“ The Karachi Tax Bar Association (KTBA) has called upon the Federal Board of Revenue (FBR) to immediately withdraw the show-cause notices served to salaried individuals regarding tax recoveries. In an official communication addressed to Dr. Hamid Ateeq Sarwar, Member (Inland Revenue â€“ Operations), the KTBA asserted that these notices, issued under Section 162 of the Income Tax Ordinance, 2001, are both unwarranted and legally untenable. KTBA President Ali A. Rahim expressed concern over the issuance of these notices, highlighting that hundreds of salaried taxpayers have been targeted with allegations of claiming excessive income tax credits in their returns. He noted that such accusations predominantly arise when tax officers encounter verification difficulties within the IRIS MIS system or face challenges in recovering withheld taxes from employers, the designated withholding agents. Rahim emphasized that salaried individuals file their income tax returns based solely on salary certificates provided by their employers, in accordance with Rule 41 of the Income Tax Rules, 2002. These certificates, prepared after the fiscal yearâ€™s conclusion, serve as the singular source of information regarding tax deductions. Consequently, any discrepancies or shortfalls in tax payments must be attributed to the employer, not the employee. â€œThe issuance of these notices is beyond the jurisdiction prescribed by Section 162 of the Ordinance,â€ Rahim stated. â€œThis section authorizes notices only if an employer fails to deduct or collect tax under Section 149. Here, however, the tax has already been duly withheld, documented through salary certificates containing CPR details.â€ KTBA further underscored the disproportionate tax burden already borne by salaried individuals, who are taxed on gross earnings without exemptions or deductions. The issuance of these notices, therefore, not only contravenes statutory provisions but also exacerbates the distress of these taxpayers. The association has urged the FBR to instruct its field formations in Karachi to revoke these notices without delay and adhere strictly to the legal framework governing tax deductions. Failure to address this issue, KTBA warned, would perpetuate unwarranted anxiety among law-abiding taxpayers and erode trust in the tax administrationâ€™s integrity. KTBA remains steadfast in its commitment to ensuring fair and lawful tax practices and protecting the rights of Pakistanâ€™s salaried class.

Date: 2025-02-13

Details: ISLAMABAD: Tax advisers have reported incidents where tax officials are allegedly pressurizing taxpayers to withdraw complanit filed before the Federal Tax Ombudsman (FTO) against their intentional delaying tactics in issuance of refunds. These refunds were due on account of appeal order of the Tribunal against which no reference was filed before the Lahore High Court and the appeal order had attained finality a year ago. The tax experts explained that creation of Refund Zone in the field formations on the pretext of facilitating the taxpayers has proved to a ploy to create further hurdles in obtaining income tax refunds. Since creation of these specialized zone either further hurdles or pick and choose has become the policy. When contacted Miss Sofia, Income Tax Practitioner/authorized representative of a Lahore based taxpayer being assessed at a Large Taxpayer Office (LTO) explained that when in follow up of pending refund claim she met the Additional Commissioner with whom file was stuck for a week he required that he will sign only if the complaint filed by the taxpayer before FTO is withdrawn. He warned that if complaint is not withdrawn and FTO holds that delay is maladministration then he will file representation before the President and the taxpayer will not get refund for at least one year. Sofia argued that the earlier partial refund was issued by the Department on filing writ petition and the curtailment of refund was disapproved by the Appellate Tribunal with the direction to issue balance refund with compensation for delay within 30 days. The appeal order was accepted by the Department and no reference was filed before the High Court. Thereafter four reminders were filed for issuance of refunds apart from dozens of follow up visits but all in vain. In these compelling circumstances compliant had to be filed and the FTO had called for report. On calling for report the DCIR processed the refund claim in the IRIS and sought administrative approval of the Commissioner through proper channel and the Additional Commissioner was holding file for a week when the AR of the taxpayer met him and the Additional Commissioner has pressurized her to withdraw compliant otherwise refund will be got delayed by filing representation to the President which takes months to decide. Sofia claimed that this is clearly blackmailing apart from the manifestation of ulterior motives and requested the Chairman FBR to take notice of such further maladministration and misconduct which mars the image of the Department. Copyright Business Recorder, 2025

Date: 2025-02-13

Details: Karachi, February 13, 2025 â€“ The Federal Board of Revenue (FBR) has officially issued a notification detailing the list of prohibited goods for foreign trade for the tax year 2025. This notification, in accordance with Section 15 of the updated Customs Act, 1969, outlines the categories of goods that are strictly forbidden from being imported into or exported from Pakistan. According to the FBR, the prohibited goods include the following: 1. Counterfeit Currency and Coins: o Counterfeit coins, forged or fake currency notes, and any other counterfeit monetary items are strictly banned. 2. Obscene and Inappropriate Materials: o Materials such as obscene books, pamphlets, papers, drawings, paintings, photographs, films, videos, audio recordings, CDs, or content in any other format are not allowed for trade. 3. Infringing Goods with Counterfeit Trademarks: o Goods with counterfeit trademarks, as defined under Pakistanâ€™s intellectual property laws, including the Pakistan Penal Code, 1860, and the Trade Marks Ordinance, 2001, are prohibited. 4. Misleading Product Origin: o Items manufactured outside Pakistan that display a Pakistani name or trademark without clearly indicating their true origin are prohibited. The country of origin must be displayed prominently in the same language and size as the brand name. 5. Copyright-Infringing Products: o Goods that infringe on copyrights, including intellectual property protected under the Copyright Ordinance, 1962, and related laws, are strictly banned. 6. Unauthorized Replicas and Imitations: o Products imitating protected designs, patents, or layouts without the permission of the registered owner are not permitted. The FBR emphasized the importance of complying with these regulations to prevent violations of intellectual property rights and to uphold trade integrity. Any infringement of these rules will be adjudicated by customs officials under Section 179 of the Customs Act. The FBR reiterated that these prohibitions are crucial for maintaining lawful international trade practices. Traders and businesses are advised to consult the latest FBR guidelines to ensure compliance and avoid potential penalties. The FBR remains committed to regulating Pakistanâ€™s foreign trade in line with global standards while safeguarding intellectual property and public interests.

Date: 2025-02-13

Details: Karachi, February 13, 2025 â€“ The Karachi Tax Bar Association (KTBA) has called upon the Federal Board of Revenue (FBR) to immediately withdraw the show-cause notices served to salaried individuals regarding tax recoveries. In an official communication addressed to Dr. Hamid Ateeq Sarwar, Member (Inland Revenue â€“ Operations), the KTBA asserted that these notices, issued under Section 162 of the Income Tax Ordinance, 2001, are both unwarranted and legally untenable. KTBA President Ali A. Rahim expressed concern over the issuance of these notices, highlighting that hundreds of salaried taxpayers have been targeted with allegations of claiming excessive income tax credits in their returns. He noted that such accusations predominantly arise when tax officers encounter verification difficulties within the IRIS MIS system or face challenges in recovering withheld taxes from employers, the designated withholding agents. Rahim emphasized that salaried individuals file their income tax returns based solely on salary certificates provided by their employers, in accordance with Rule 41 of the Income Tax Rules, 2002. These certificates, prepared after the fiscal yearâ€™s conclusion, serve as the singular source of information regarding tax deductions. Consequently, any discrepancies or shortfalls in tax payments must be attributed to the employer, not the employee. â€œThe issuance of these notices is beyond the jurisdiction prescribed by Section 162 of the Ordinance,â€ Rahim stated. â€œThis section authorizes notices only if an employer fails to deduct or collect tax under Section 149. Here, however, the tax has already been duly withheld, documented through salary certificates containing CPR details.â€ KTBA further underscored the disproportionate tax burden already borne by salaried individuals, who are taxed on gross earnings without exemptions or deductions. The issuance of these notices, therefore, not only contravenes statutory provisions but also exacerbates the distress of these taxpayers. The association has urged the FBR to instruct its field formations in Karachi to revoke these notices without delay and adhere strictly to the legal framework governing tax deductions. Failure to address this issue, KTBA warned, would perpetuate unwarranted anxiety among law-abiding taxpayers and erode trust in the tax administrationâ€™s integrity. KTBA remains steadfast in its commitment to ensuring fair and lawful tax practices and protecting the rights of Pakistanâ€™s salaried class.

Date: 2025-02-12

Details: Karachi, February 12, 2025 â€“ The Federal Board of Revenue (FBR) has introduced a detailed procedure governing zero-rated supplies to duty-free shops (DFS) across Pakistan. This initiative aims to streamline tax regulations and ensure compliance with existing laws while facilitating international travelers who purchase goods from DFS outlets. According to the FBR, the procedure for zero-rated supplies is already outlined in Rule 164 of the Sales Tax Rules, 2006. The FBR emphasized that DFS operators must adhere to the prescribed guidelines to benefit from tax-free procurements. Procedure for Zero-Rated Supplies Under the newly reiterated framework, DFS entities licensed by the Customs authorities and eligible for zero-rated supplies under serial No. 3 of the Fifth Schedule to the Sales Tax Act must follow these essential steps: 1. Registration and Compliance: Duty-free shops must be registered under the Sales Tax Act and are required to submit monthly returns while maintaining comprehensive records in accordance with the law. 2. Application for Authorization: The DFS must apply to the relevant Commissioner of Inland Revenue to obtain authorization for tax-free purchases. The application should specify details such as the exact description and quantity of goods, as well as the sales tax registration number of the manufacturer. Only goods intended for sale under duty-free allowances as per baggage concessions will be considered. 3. Indemnity Bond Submission: Along with the application, DFS must submit an indemnity bond in the prescribed format. This bond ensures that if the goods procured under zero-rated status are misused or sold outside the duty-free allowances, the DFS will be liable to pay the applicable sales tax along with additional tax as per Section 34 of the Sales Tax Act, 1990. 4. Zero-Rated Invoice and Delivery: Once authorization is granted by the Commissioner of Inland Revenue and the indemnity bond is accepted, the manufacturer can deliver the goods to the DFS under a zero-rated invoice. The invoice must reference the authorization number and display the value of goods in both Pakistani Rupees and US Dollars. Moreover, all such goods must bear a permanent sticker stating that they are exclusively meant for DFS sales under customs baggage rules. 5. Foreign Currency Payments: The DFS must pay for the goods in US dollars, which will be surrendered to the State Bank of Pakistan. The manufacturer, in turn, will receive payments in Pakistani Rupees as per the prevailing foreign exchange regulations. 6. Receipt Certificate and Customs Verification: Upon receipt of goods, DFS is required to issue a certificate confirming delivery, which must be attested by customs staff. Copies of this certificate must be sent to the manufacturer and the Commissioner of Inland Revenue. 7. Record Maintenance and Inspection: Both the DFS and the manufacturer are obligated to maintain detailed records of all zero-rated transactions. These records must include full particulars of passengers purchasing goods under baggage concessions and should be available for inspection by sales tax authorities as required. 8. Refund Process: Refund claims related to zero-rated supplies will be processed as per Chapter V of the Sales Tax Rules, 2006. The manufacturer will be treated as a manufacturer-cum-exporter for refund purposes. 9. Limit on Procurement Period: Duty-free shops can only procure goods under this framework for a period not exceeding three months. The FBR has mandated that DFS must ensure these goods are not diverted into the local market. If any such goods are found being sold domestically, DFS will be responsible for paying applicable sales tax along with penalties. 10. Release of Indemnity Bond: The indemnity bond will only be released after the Commissioner of Inland Revenue is satisfiedâ€”either through an audit or other verification methodsâ€”that all goods were sold in compliance with duty-free allowances. FBRâ€™s Commitment to Tax Regulation The FBR reiterated its commitment to ensuring transparency and adherence to tax regulations while facilitating the duty-free retail sector. By reinforcing these procedural requirements, the FBR aims to curb potential misuse of tax exemptions while supporting legitimate duty-free operations. The regulatory body has also urged DFS operators to strictly comply with these provisions to avoid penalties and maintain smooth operations. With this newly reaffirmed procedure, the FBR continues its efforts to enhance regulatory efficiency and foster a more transparent tax environment for duty-free businesses in Pakistan.

Date: 2025-02-12

Details: Hyderabad, February 12, 2025 â€“ The Regional Tax Office (RTO) Hyderabad on Wednesday took decisive action against tax fraud by sealing three branches of a well-known bakery in Hyderabad for issuing fake invoices. According to details, on the directives of Chief Commissioner Inland Revenue Qazi Hifz-ur-Rehman and Commissioner Naib Ali Pathan, the Point of Sale (POS) team of the RTO Hyderabad conducted an operation, sealing three branches of the bakery. Authorities found the establishment involved in issuing forged, fake, unstamped, and non-QR coded receipts, violating sales tax regulations. This fraudulent practice had reportedly been ongoing for an extended period despite multiple warnings. Exercising the powers conferred under Section 33 of the Sales Tax Act, 1990, read with Rule 150ZEO of the Sales Tax Rules, 2006, the authorities sealed the bakeryâ€™s premises in Hyderabad to curb further tax evasion. A day earlier, the Large Taxpayers Office (LTO) Karachi had taken a similar step by sealing an outlet of Zelbury, a prominent online fashion shopping platform, for issuing unverified sales tax invoices. These consecutive actions underscore the Federal Board of Revenueâ€™s (FBR) commitment to ensuring tax compliance across various business sectors, including those operating in Hyderabad. The crackdown on non-compliant businesses in Hyderabad is part of a broader initiative by the FBR to prevent tax evasion. The tax authorities have launched an extensive campaign against retailers violating POS regulations to curb revenue losses. The enforcement measures in Hyderabad highlight the urgency of strict adherence to tax laws among businesses. This latest enforcement move by RTO Hyderabad sends a strong message to retailers and large taxpayers alike. Authorities have emphasized that failure to comply with sales tax regulations will result in stringent legal consequences. Businesses in Hyderabad are urged to align with tax requirements to avoid punitive actions, as tax compliance remains a top priority for the FBR. With Hyderabad emerging as a key commercial hub, tax authorities remain vigilant in ensuring businesses fulfill their tax obligations. The crackdown serves as a warning to all enterprises in Hyderabad to operate transparently and adhere to tax laws, reinforcing the governmentâ€™s stance against tax fraud and revenue leakages.

Date: 2025-02-12

Details: Islamabad, February 12, 2025 â€“ The National Assembly Standing Committee on Finance and Revenue has deferred the implementation of Section 114C of the Tax Laws (Amendment) Bill, 2024, which restricts economic transactions of non-filers. The committee decided to postpone these measures until the Federal Board of Revenue (FBR) successfully implements necessary technological changes in its online systems. This decision was made during a meeting of the National Assembly Standing Committee on Finance at the Parliament House on Tuesday. Bilal Azhar Kayani, Convener of the Sub-Committee of the Standing Committee on Finance and Revenue, presented a report on â€œThe Tax Laws (Amendment) Bill, 2024,â€ which was subsequently adopted by the committee. Minister of State for Finance, Ali Pervaiz Malik, stated that delaying the restriction on non-filers will not hinder the FBRâ€™s ongoing efforts to document wealthy individuals who have yet to file income tax returns. â€œWe have relied on non-filers as revenue spinners for too long without enforcing compliance. The tax system cannot function this way,â€ he emphasized. He further highlighted that the FBR already has data on all immovable property transactions and will continue taking action against non-filers. â€œWe will return to the committee with a technological solution for implementing Section 114C,â€ he assured. The sub-committee, chaired by Bilal Azhar Kayani, recommended that the FBR should first demonstrate the updated online system before further consideration of the restrictions on non-filers. One proposal is to reconsider the section as part of the budget process in June 2025, allowing time for the development of user-friendly systems that minimize unintended consequences. MNA Mirza Ikhtiar Baig expressed concerns that the restrictions on non-filers could lead to capital flight from Pakistan. Meanwhile, FBR Chairman Rashid Mahmood Langrial requested two months for the development of the necessary technological tools to implement the restrictions on non-filers. The committee also recommended that the National Database and Registration Authority (NADRA), provincial excise departments, and land authorities cooperate with the FBR to expedite the new systemâ€™s development. FBR Chairman clarified that transactions by non-resident individuals and public companies would not fall under the non-filer restrictions. Committee Chairman Syed Naveed Qamar endorsed the sub-committeeâ€™s recommendation to suspend the implementation of Section 114C until the FBR develops the required tools. He also urged the Revenue Division to clarify â€œcash and equivalent assetsâ€ and ensure the new system is fully functional within two months. The sub-committee suggested an amendment to Section 114C, proposing that the term â€œBoardâ€ be replaced with â€œFederal Governmentâ€ and that a value threshold be set to protect low- and middle-income citizens, particularly first-time property buyers. As per the committeeâ€™s instructions, the FBR has shared aggregate data on property transactions for FY 2023-24 to support this decision.

Date: 2025-02-11

Details: Karachi, February 11, 2025 â€“ A massive increase of 85% was recorded in car buying during the month of January 2025, driven by fears of impending restrictions on non-filers of income tax returns. According to official data, car sales for vehicles with an engine capacity of 1300CC and above surged to 5,518 units in January 2025, compared to 2,977 units in December 2024. Similarly, sales of cars with an engine capacity of 1000CC rose by 32%, reaching 717 units in January 2025, up from 542 units in December 2024. The surge in car purchases is largely attributed to the governmentâ€™s proposal to enforce strict measures on non-filers. On December 18, 2024, the government tabled a tax bill in parliament, seeking approval to impose restrictions on non-filers regarding the purchase of motor vehicles and other high-value economic transactions. Currently, the bill remains under consideration in the National Assembly. The proposed restrictions have caused concern among non-filers, prompting a rush to finalize transactions before the bill becomes law. A similar pattern was observed in cash withdrawals, as non-filers hurried to withdraw funds ahead of the anticipated enforcement. Banks across Pakistan reported a massive withdrawal of Rs 862 billion during December 2024, reflecting the anxiety among those who have not yet complied with tax regulations. Although the State Bank of Pakistan (SBP) has not yet released data for January 2025, experts predict a continued rise in withdrawals. Interestingly, the spike in car buying is most notable in vehicle categories where higher withholding tax rates are applicable. According to the withholding tax card issued by the Federal Board of Revenue (FBR), no withholding tax is applied on the purchase of cars up to 850CC. However, for vehicles exceeding this capacity, withholding tax for non-filers is 200% higher than that for individuals listed on the Active Taxpayers List (ATL). If the proposed bill is passed, non-filers may face significant hurdles in acquiring new cars and conducting other financial transactions. The governmentâ€™s push to bring more individuals into the tax net has sparked debate, with critics arguing that non-filers should be given more time to comply. On the other hand, tax authorities maintain that discouraging non-filers is essential for boosting revenue and ensuring fair tax collection.

Date: 2025-02-06

Details: Islamabad â€“ Prime Minister Mohammad Shehbaz Sharif is set to review key tax recommendations put forth by the housing sector task force during a crucial meeting today February 6, 2025. The task force was constituted by PM Shehbaz to address growing concerns over property taxation and streamline regulatory processes to boost the real estate and construction sectors. The task force has finalized a set of recommendations aimed at easing tax burdens, improving transparency, and fostering investment. Among the key recommendations is the waiver of sub-section 2A of Section 236C, which pertains to the 7E declaration and its approval by the Commissioner. This move is expected to simplify property transactions and reduce bureaucratic hurdles for investors and homeowners. One of the major recommendations includes providing basic exemptions for properties valued up to Rs. 10 million, ensuring affordability for low and middle-income groups. Additionally, the task force has recommended shifting non-resident verification to an online system via NADRA to streamline compliance and improve efficiency in property dealings. Another significant recommendation is the abolition of Section 7E of the Income Tax Ordinance, which has been a contentious issue among property stakeholders. In addition, the task force has suggested standardizing and rationalizing stamp duty rates across provinces and the Islamabad Capital Territory (ICT), as well as abolishing Capital Value Tax (CVT) in Islamabad. Ensuring uniform taxation policies through the National Tax Council is also among the key recommendations to promote consistency in property taxation across Pakistan. To encourage real estate investment, the task force has further recommended a waiver on wealth reconciliation for investments in the real estate and construction sector up to Rs. 50 million. This measure is expected to attract new investments and stimulate economic growth in the sector. Additionally, the recommendations include revising property valuations every three years to reflect market trends accurately. The task force has also proposed introducing exemptions for transaction tax in specific categories, such as low-cost housing, government plots, and first-time homebuyers, to make homeownership more accessible. Short-term recommendations include reducing the policy rate to a single digit, resuming the Mera Pakistan Mera Ghar (MPMG) Scheme to restore developer confidence, and reintroducing mark-up subsidies for low-cost housing loans. Other key recommendations involve launching financial literacy campaigns, collaborating with real estate developers to offer mortgage financing, and implementing low or fixed-term loans for 5, 10, and 20 years. With these recommendations under consideration, the housing sector is hopeful that PM Shehbazâ€™s review will lead to favorable policy decisions, ultimately boosting growth and affordability in Pakistanâ€™s real estate market.

Date: 2025-02-06

Details: Karachi, February 6, 2025 â€“ The Federal Board of Revenue (FBR) has introduced updated procedures for collecting extra sales tax from electricity and gas consumers who are not listed on the Active Taxpayers List (ATL). The revision aims to enhance tax compliance and ensure that commercial and industrial users contribute fairly to the national tax system. According to the FBR, the additional sales tax is applicable under Rule 158I of the Sales Tax Rules, 2006, targeting consumers with industrial or commercial connections. If the monthly bill for electricity or gas exceeds Rs. 15,000, and the consumerâ€™s name is not on the ATL, an extra tax will be applied at a rate specified by the Federal Government. Mode of Collection Explained by FBR The FBR has outlined the procedure for collecting this extra tax under Rule 158J: 1. Utility providers (electric and gas suppliers) must charge and collect the extra sales tax from industrial and commercial consumers whose names do not appear on the ATL. 2. The extra tax amount must be clearly mentioned as a separate line item on the utility bill or invoice issued by the supplier. 3. The supplier is responsible for collecting and depositing the extra tax amount in accordance with Section 6 of the Sales Tax Act. Conditions and Limitations Under Rule 158K The FBR has also laid down specific conditions and limitations to regulate the collection and adjustment of this tax: 1. The extra tax amount collected cannot be adjusted by the supplier or consumer in their tax returns and must be deposited in full to the Treasury. 2. Electric and gas suppliers must require consumers to provide their Sales Tax Registration Number (STRN) and verify it on the FBRâ€™s website to confirm whether they are registered taxpayers. 3. The supplier must verify that the name, address, and registration details provided by the consumer match the information recorded in the FBRâ€™s Active Taxpayers List. 4. If a taxpayer has multiple business locations, all such places must be properly declared in their registration profile. 5. Once a consumer is verified as a registered taxpayer, the supplier must update its billing system and ensure that the sales tax registration number appears on all future bills. After this, the extra tax should no longer be charged to that consumer. 6. If a consumer is later de-registered or removed from the ATL, the supplier must resume charging and collecting the extra tax from the following billing cycle. The FBRâ€™s revised guidelines reinforce the importance of tax compliance and aim to discourage tax evasion. By linking utility bill taxation to ATL status, the FBR hopes to encourage more businesses to register and file taxes in accordance with national laws.

Date: 2025-02-05

Details: Karachi, February 5, 2025 â€“ Pensioners in Pakistan have benefitted from a tax exemption amounting to Rs 43.61 billion on their income within a year, according to official documents. The latest annual report for 2024, released by the Federal Board of Revenue (FBR), highlights substantial tax relief granted to pensioners under the Second Schedule of the Income Tax Ordinance, 2001. The FBR reported that pensioners were provided an income tax exemption of Rs 2.39 billion under Clause 8 of the Second Schedule. This clause specifies that any pension received by a Pakistani citizen from a former employer is exempt from tax, provided that the individual is not still employed by the same employer or an associate. If a pensioner receives multiple pensions, the exemption is applied to the higher amount. Additionally, the FBR stated that pensioners received tax exemptions amounting to Rs 23.32 billion under Clause 9 of the Second Schedule. This clause grants exemption to pensions received for services rendered in the Armed Forces of Pakistan, Federal Government, or Provincial Government. Furthermore, it covers pensions provided to the families and dependents of public servants and military personnel who have passed away during service. The report further disclosed that pensioners availed income tax exemptions worth Rs 17.90 billion under Clause 12 of the Second Schedule. This clause covers payments related to the commutation of pension received from the government or under any pension scheme approved by the FBR. Pensioners in Pakistan continue to benefit significantly from these exemptions, which ease their financial burden and support their post-retirement stability. The FBR emphasized that these provisions play a crucial role in ensuring economic relief for retired individuals, particularly those relying solely on pension income. As pensioners constitute a vulnerable segment of society, the tax exemptions serve as a financial safeguard, ensuring they receive maximum benefits without the strain of excessive taxation. The FBR remains committed to facilitating pensioners by maintaining and updating policies that offer tax relief to retired individuals across various sectors. The report underscores the importance of these tax exemptions in supporting pensioners and acknowledges the governmentâ€™s role in prioritizing their financial well-being. Moving forward, the FBR aims to enhance transparency and efficiency in granting such exemptions to ensure that pensioners receive their entitled benefits seamlessly. Markets Â» Cotton & Textile COTTON SPOT RATES Recorder Report Published February 4, 2025 KARACHI: official KCA spot rates for local dealings in Pakistan rupees on Monday, (February 03, 2025) =========================================================================== The kca official spot rate for local dealings in Pakistan rupees --------------------------------------------------------------------------- For base grade 3 staple length 1-1/16" Micronaire value between 3.8 to 4.9 ncl =========================================================================== Rate Ex-gin Upcountry Spot rate Spot rate Difference for price Ex-Karachi ex. Khi. as Ex-karachi on 01-02-2025 =========================================================================== 37.324 KG 18,000 285 18,285 18,285 NIL Equivalent 40 KGS 19,291 305 19,596 19,596 NIL =========================================================================== Copyright Business Recorder, 2025

Date: 2025-02-04

Details: KARACHI: The new conditions introduced by the Federal Board of Revenue (FBR) through SRO 55 (i)/2025, which require the filing of monthly stock statements, consumption data, complex purchase, sales, and stock reports, have become a significant challenge for traders due to a lack of awareness. These conditions are especially difficult for small-scale traders to comply with. Salim Valimuhammad, Chairman of the Pakistan Chemicals and Dyes Merchants Association (PCDMA), said that the business community supports economic stability and does not oppose the FBRâ€™s initiatives. However, it is crucial to raise awareness and understanding about any new measures or policies before their implementation so that the business community does not perceive them as a burden and can cooperate with the FBR in ensuring compliance. â€œThe lack of awareness regarding the complex requirements for submitting stock details under SRO 55 (i)/2025 makes it difficult for small-scale businesses and traders to file monthly sales tax returns on time. This is especially true for importers, traders, and wholesalers who, due to low profit margins, cannot afford the expenses of professional accountants or tax consultants,â€ he said. Therefore, the FBR should recognize the challenges faced by the business community and, instead of immediate implementation of the said SRO, grant some time for compliance. Awareness sessions should also be organized to help traders meet the requirements more easily. Salim Valimuhammad addressed the Chairman of FBR, stating that instead of abruptly implementing complex conditions, the FBR should consult with stakeholders, including the business community, and develop a feasible approach through mutual consultation to ensure easy compliance. PCDMA Chairman was of the view that the business community and government institutions are the wheels of the economic vehicle that drives the country toward progress. Copyright Business Recorder, 2025

Date: 2025-02-03

Details: ISLAMABAD: Federal Tax Ombudsman (FTO) has converted the punishment of disciplinary proceedings against the tax officials under the Efficiency and Discipline Rules 2020 to strict warning to those responsible for failure to timely submit comments in a case before the FTO. The punishment to the tax officials have been modified by the FTO office on the request of the FBR. On the behalf of the taxpayer, the case was pleaded by tax lawyer Waheed Shahzad Butt. The review petition was filed by the FBR before the FTO in terms of section 14(8) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance), read with Section 13(1) of the Federal Tax Ombudsman Institutional Reforms Act, 2013, against the recommendations of the FTO. FTO had recommended FBR to initiate disciplinary proceedings under the Efficiency and Discipline Rules 2020 against the Officers responsible for failure to submit parawise comments despite issuance of various notices and direct the Directorate of l&l-Customs and Directorate of l&l-IR to conduct a detailed investigation on the issues involved in the Complaint after providing proper opportunity of hearing to the Complainant and forward their recommendations to the FTO and FBR. The Tax Department prayed to withdraw the FTOâ€™s recommendation regarding holding inquiry and initiation of E&D proceedings against the officials that failed to submit parawise comments and attend the hearing. FTO order stated that arguments of both sides heard and record perused. It is observed that the investigation as required in the case has already been initiated by the FBR and hopefully would be completed. The core issue agitated by the FBR in the Review Petition is regarding disciplinary proceedings under the Efficiency and Discipline Rules 2020 against the Officers responsible for failure to submit parawise comments, requesting to the FTO to withdraw 6(i) of Recommendations dated 15.08.2024. However, this contention of the FBR cannot be accepted on the ground that appropriate time was given to the FBR for submission of parawise comments. By taking a lenient view, the recommendations of para 6(i) are modified as under: FBR to issue strict warning to the Officers responsible for failure to submit para-wise comments and ask him/her to be careful in future, FTO order added. Copyright Business Recorder, 2025

Date: 2025-02-03

Details: One of Pakistanâ€™s leading tractor manufacturers, Millat Tractors Limited, on Monday rebuked the Federal Board of Revenue (FBR) over a Rs18 billion sales tax demand, terming it â€œunrealistic and illegalâ€. In a notice to the Pakistan Stock Exchange (PSX), Millat said it shall avail all appellate forums to contest the FBRâ€™s order. â€œThis refers to the news published in BUSINESS RECORDER regarding the order of Rs18 billion in respect of Sales Tax liabilities and penalties by FBR. â€œThe said order is related to the disclosure made on June 24, 2024,â€ it said. BUSINESS RECORDER on Monday reported that FBR has raised a huge sales tax demand of Rs18 billion against a leading tractor manufacturing company in line with the implementation order of President Asif Ali Zardari. â€œThe FBR has timely implemented an order of the President and completed an audit of the said company, resulting in sales tax demand of Rs18 billion,â€ stated the report. The FBR has also confirmed to the President of Pakistan that the quasi-judicial /adjudication proceedings have been finalized against the said Lahore-based company. In this regard, Large Taxpayer Office (LTO), Lahore has submitted an implementation report dated January 25, 2025 to the President of Pakistan through the Federal Tax Ombudsman (FTO). President Zardari has directed the FTO to submit the final compliance report and explanation of the queries raised by the President in the said audit case of the Lahore-based company. Meanwhile, Millat Tractors, in its notice on Monday, rebuked the federal tax collecting authority, saying that the FBR â€œin an endeavour to meet unrealistic tax targets has instead of broadening the tax base, relied on raising unrealistic and illegal demands from existing taxpayersâ€. It further warned that such actions would hurt businesses and the current investment climate. â€œThe company shall avail all appellate forums to contest the order and is confident that justice will prevail,â€ the company concluded.

Date: 2025-02-03

Details: Karachi, February 3, 2025 â€“ The Pakistan Chemical and Dyes Merchants Association (PCDMA) has expressed concerns over the complexities arising from SRO 55(I)/2025, issued by the Federal Board of Revenue (FBR), and its potential impact on traders. The PCDMA highlighted that the newly introduced conditions under SRO 55(I)/2025, which mandate the submission of detailed monthly stock statements, consumption data, and intricate purchase, sales, and stock reports, pose significant challenges for traders. Many in the business community, particularly small-scale traders, are struggling to comply due to a lack of awareness and the complexity of the requirements. Salim Valimuhammad, Chairman of PCDMA, emphasized that while the business community supports economic stability and does not oppose the FBRâ€™s efforts, the implementation of such measures without adequate awareness creates difficulties. He stressed the importance of educating traders on the requirements before enforcing them to ensure smoother compliance. â€œThe lack of clarity surrounding the submission of stock details under SRO 55(I)/2025 makes it exceedingly difficult for small and medium-sized businesses to file their monthly sales tax returns on time. Many traders, especially importers and wholesalers operating on thin profit margins, cannot afford professional tax consultants to navigate these complex requirements,â€ he stated. PCDMA urged the FBR to acknowledge the difficulties faced by traders and grant them an adjustment period before full enforcement of SRO 55(I)/2025. The association also called for organizing awareness sessions to educate businesses and streamline compliance procedures. Addressing the FBR Chairman, Salim Valimuhammad suggested that instead of implementing such regulations abruptly, the FBR should engage in meaningful discussions with stakeholders, including PCDMA and other business associations. He proposed that policy decisions should be based on mutual consultation to ensure a more practical and business-friendly approach. PCDMA believes that collaboration between the business community and government institutions is essential for sustaining economic growth. The association reiterated that both entities must work together to keep the economic engine running efficiently. If regulatory challenges persist without proper resolution, the country risks stalling economic activity and missing out on valuable revenue generation opportunities. The PCDMA remains committed to working alongside the government to create an environment conducive to business growth while ensuring compliance with regulations in a practical and feasible manner.

Date: 2025-02-03

Details: Karachi, February 3, 2025 â€“ The All Pakistan Customs Agents Association (APCAA) has issued a stern warning to halt all customs clearance operations across the country in response to the suspension of its membersâ€™ licenses. The association has strongly condemned the move, calling it an unjust action that threatens to paralyze trade and commerce nationwide. APCAA Chairman Saifullah Khan stated that the Federal Board of Revenue (FBR) has revoked the licenses of 45 customs agents as part of an investigation into alleged irregularities in the newly introduced faceless customs assessment system. â€œThis decision is unacceptable. Our members have been unfairly targeted, and we will take all necessary steps, including legal action, to challenge this order,â€ he asserted. The APCAA has accused customs appraisers of blackmailing its agents and deliberately creating obstacles in clearance procedures. â€œOur agents have faced undue pressure and exploitation. If our grievances are not addressed, we will be left with no choice but to suspend all import and export activities across Pakistan,â€ said Khan. In light of these developments, APCAA has scheduled an emergency meeting at 4 PM today to strategize its next course of action. The association has also been engaged in discussions with the Chief Collector of Customs, but so far, no significant progress has been made. Instead, the Chief Collector has demanded detailed profiles of the affected agents, a move APCAA considers an attempt to intimidate its members. In a counter-demand, APCAA has urged the authorities to provide profiles of customs officers living in extravagant homes and owning high-end vehicles. â€œWe want transparency. How can customs officials, earning a modest government salary, afford luxury properties and expensive cars? The Chief Collector should also disclose his own financial details,â€ the association stated. APCAA insists that it has always supported the implementation of the faceless system to improve efficiency and curb corruption. However, it argues that internal mismanagement and flawed execution have caused the system to collapse. Despite an increase in imports leading to higher revenue collection, APCAA alleges that the Customs Department has misled Prime Minister Shehbaz Sharif by presenting inflated revenue figures to exaggerate the systemâ€™s success. The association has vowed to escalate its protests if corrective measures are not taken immediately, warning that an indefinite suspension of customs clearance operations could have dire consequences for Pakistanâ€™s trade and economy.

Date: 2025-02-03

Details: Karachi, February 3, 2025 â€“ The Federal Board of Revenue (FBR) has revised and clarified the procedure for obtaining a sales tax exemption on imports, ensuring a streamlined process for entitled organizations and agencies. According to the FBR, the procedure for availing a sales tax exemption is outlined in Rule 57B of the Sales Tax Rules, 2006. This rule provides a step-by-step framework to facilitate eligible entities in securing an exemption. Procedure for Availing Sales Tax Exemption 1. Application for Exemption Certificate Any organization or agency eligible for a sales tax exemption must submit a formal application to the relevant Inland Revenue officer. This application must include an original exemption order issued by the Economic Affairs Division, following the format specified by the Board. The exemption order should detail: o A precise description of the goods, including specifications and intended use. o The quantity and total value of the goods. o Reference details, including the Boardâ€™s consent under Rule 57A. 2. Verification and Authorization Process The Inland Revenue officer will retain the original exemption order for official records. Upon verification that the purchase request is genuine, the officer will issue an Authorization for Exempt Supply within 15 days. This authorization, granted to either an importer or a registered supplier, explicitly states that only the sales tax on the final transaction shall be exempt. However, the officer may deny the exemption if there are valid reasons to believe that the purchase does not qualify under grant-in-aid provisions. 3. Processing of Exempt Imports and Supplies Once the Authorization for Exempt Supply is issued, the concerned Collector of Customs or registered supplier will facilitate the tax-exempt import or supply, maintaining appropriate records for verification by the Inland Revenue Department. 4. Refund Claims for Unauthorized Exemptions If an eligible organization or agency completes an import or purchase without securing the required authorization, the Economic Affairs Division may submit a refund claim for the paid sales tax. The claim will be processed in accordance with the relevant legal provisions, provided it meets the stipulated exemption conditions. This updated procedure reinforces transparency and efficiency in availing a sales tax exemption, benefiting organizations that qualify under the established criteria.

Date: 2025-02-03

Details: Karachi, February 3, 2025 â€“ In a historic move, the Sindh government has officially approved the imposition of an agricultural income tax, marking a significant policy shift aimed at enhancing fiscal discipline and revenue generation. This landmark decision will come into force following its passage in the Sindh Provincial Assembly. According to a statement released by the Sindh Revenue Board (SRB), the approval of the Sindh Agricultural Income Tax Law aligns with the commitments set forth in the National Fiscal Pact between the federal and provincial governments. The proposed law is designed to streamline tax collection mechanisms, enhance financial accountability, and ensure a fair contribution from the agriculture sector, which remains a cornerstone of Sindhâ€™s economy. Key Provisions of the Agricultural Income Tax Bill Under the new framework, the SRB will be entrusted with the collection and enforcement of the agricultural income tax, ensuring a more efficient and structured approach. The Sindh Agricultural Income Tax Bill, 2025, is set to take effect from January 1, 2025, introducing a progressive tax regime for agricultural earnings. â€¢ Tax Exemptions and Rates: o Agricultural income up to Rs. 600,000 annually will remain exempt from taxation. o Income exceeding Rs. 5.6 million annually will be subject to a maximum tax rate of 45%. o A progressive super tax has been introduced: â€” No super tax for annual agricultural income up to Rs. 150 million. â€” A maximum super tax of 10% will apply to income exceeding Rs. 500 million annually. â€¢ Corporate Farming and Digitalization: o The law extends taxation to corporate farming, bringing small agricultural companies under a 20% tax rate, while larger corporations will be taxed at 29%. o Livestock has been excluded from the agricultural tax net. o The advance agricultural income tax, previously linked to land cultivation, will no longer be imposed. o The tax payment, collection, and filing process will be fully automated, enhancing efficiency and minimizing tax evasion. A Major Policy Shift in Agriculture Taxation The delegation of agricultural income tax administration to the SRB underscores a major policy transformation, leveraging the boardâ€™s proven expertise in tax collection and its advanced business processes. This bold reform is expected to: â€¢ Broaden the tax base, ensuring that the agriculture sector contributes equitably to provincial revenue. â€¢ Improve transparency in agricultural income assessments. â€¢ Bolster Sindhâ€™s fiscal health while reinforcing tax compliance within one of Pakistanâ€™s most crucial economic sectors. With agriculture forming the backbone of Sindhâ€™s economy, this new taxation framework is a pivotal step toward ensuring sustainable revenue generation and economic resilience.

Date: 2025-02-03

Details: Karachi, February 3, 2025 â€“ The Federal Board of Revenue (FBR) is expected to eliminate Section 7E of the Income Tax Ordinance, 2001, which pertains to the taxation of deemed property income. This potential repeal follows recommendations from a task force established by the Prime Minister, aimed at promoting real estate transactions and easing compliance burdens for taxpayers. According to sources, the FBR is actively working towards the removal of this section, pending final approval from the government. The imposition of tax under Section 7E, which was introduced through the Finance Act, 2022, has been a subject of significant controversy among taxpayers, particularly regarding its impact on filing income tax returns. Many stakeholders, including real estate investors and tax professionals, have expressed concerns over the complexities and ambiguities surrounding its implementation. Section 7E mandates that a tax be levied on a deemed income, calculated as 5% of the fair market value of capital assets situated in Pakistan, excluding specific exemptions. The provision applies to resident individuals and has led to disputes regarding its interpretation and enforcement. The tax rate under this section has been set at 20% on the deemed income, further complicating property-related tax obligations. The FBR has been under pressure from various business and real estate associations to reconsider the tax due to its impact on property investments. Critics argue that Section 7E discourages investment in real estate, as it imposes additional financial liabilities on property owners, regardless of whether the property generates actual income. Additionally, the regulation has resulted in legal challenges, with taxpayers disputing its constitutionality and scope. The FBRâ€™s anticipated decision to abolish Section 7E aligns with broader government efforts to streamline tax policies and encourage economic growth. By removing this section, the FBR aims to create a more favorable environment for property transactions and improve compliance rates among taxpayers. Furthermore, the FBR has been evaluating alternative measures to ensure revenue generation without imposing undue financial stress on taxpayers. The organization is committed to refining tax laws to balance revenue collection with economic incentives, ensuring that the tax system remains equitable and efficient. As discussions progress, stakeholders await an official announcement from the FBR regarding the fate of Section 7E. If the repeal is finalized, it would mark a significant shift in Pakistanâ€™s tax policy, potentially revitalizing the real estate sector while simplifying tax compliance for property owners across the country.

Date: 2025-02-02

Details: Karachi, February 2, 2025 â€“ The Karachi Customs Agents Association (KCAA) has announced plans to stage a protest against the recent suspension of customs agents accused of manipulating the Faceless Customs Assessment (FCA) system. The association has strongly condemned the suspension, calling it an unfair and unethical move by the authorities. READ MORE: List of 45 Customs Agents Suspended in Faceless Scandal In a circular issued on Sunday, the KCAA urged all affected members and fellow customs agents to unite against what it described as an unjust crackdown on licensed professionals. The association has called on all suspended customs agents to gather at the KCAA Camp Office, located at the Old Custom House Building, on Monday, February 3, 2025, at 11:00 AM. â€œWe request our members to participate in large numbers, along with their colleagues, to show our collective strength and solidarity against this unfair action taken by the customs authorities,â€ the statement from KCAA read. Meeting with Customs Officials Planned During an emergency meeting at the KCAA Head Office on Sunday, February 2, 2025, it was decided that a delegation, consisting of representatives from KCAA and the All Pakistan Customs Agents Association (APCAA), will meet with the Chief Collector of Customs (South) â€“ Appraisement on February 3, 2025. The delegation aims to discuss the suspension of customs agentsâ€™ licenses and the lodging of FIRs against them. The association emphasized that further action would be determined based on the outcome of this meeting. â€œAt this crucial time, we urge all customs agents to stand united in defense of our profession. Your active participation is vital to protecting our rights and ensuring that customs clearing and forwarding businesses continue to operate with dignity,â€ the KCAA statement added. FBR Crackdown on FCA Manipulation The protest follows the Federal Board of Revenue (FBR)â€™s decision to suspend 45 customs agents, citing their alleged involvement in manipulating the Faceless Customs Assessment System. This system was introduced to streamline customs clearance, reduce human intervention, and curb corruption. However, authorities claim that certain agents exploited system loopholes, prompting swift disciplinary action. READ MORE: FBR files criminal case against faceless customs manipulators The FBR reaffirmed its commitment to transparency and accountability in customs operations, warning that further investigations could lead to additional suspensions and legal action. Meanwhile, the KCAA maintains that the accused agents deserve a fair hearing and due process before any punitive measures are enforced.

Date: 2025-02-02

Details: Karachi, February 2, 2025 â€“ The Collectorate of Customs, Hyderabad, has announced an auction of non-duty paid (NDP) vehicles, scheduled to take place on February 6, 2025. This auction aims to dispose of seized vehicles and generate revenue for the national exchequer. According to officials from Hyderabad Customs, the auction will include a variety of vehicles, including SUVs, sedans, and compact cars. The vehicles up for bidding have been confiscated due to non-payment of duties and taxes. The customs authorities have urged interested buyers to participate in the auction, which will be held at the regional customs office in Hyderabad. Among the vehicles listed for auction are: â€¢ Toyota Surf (Model 1996) â€“ A high-performance SUV with a 3,000cc engine, registered as BU-4120, and bearing chassis number KZNI85-9003973. â€¢ Mitsubishi Pajero (Model 1990) â€“ A 2,477cc jeep, registered as BC-0723, with chassis number VA3-4005773. â€¢ Suzuki Swift (Model 2006) â€“ A compact car with a 1,290cc engine, registered as AYH-707, chassis number ZC11S-176697. â€¢ Suzuki Jimny (Model 2000) â€“ A 1,300cc off-road jeep, registered as AD-18967, with chassis number JS3JB33V3Y4101224. â€¢ Suzuki Swift (Model 2009) â€“ Another 1,300cc Swift, registered as AYX-280, chassis number ZC71S-552678. Officials at Hyderabad Customs have emphasized that all vehicles will be sold on an â€œas-is, where-isâ€ basis. Buyers are encouraged to thoroughly inspect the vehicles before bidding, as no claims or refunds will be entertained after the sale. The auction process will be conducted transparently, in line with legal and procedural requirements. Authorities in Hyderabad have urged potential buyers to bring valid identification documents and proof of payment to participate in the bidding process. The successful bidders will be required to complete the necessary paperwork and pay the full amount before taking possession of the vehicles. This auction is part of an ongoing effort by Hyderabad Customs to curb smuggling and ensure that non-duty paid vehicles are not illegally used on the roads. The department continues to conduct operations to seize such vehicles and will hold further auctions in the coming months.

Date: 2025-02-02

Details: Islamabad â€“ February 2, 2025 â€“ The government is preparing to announce a comprehensive tax package aimed at boosting property transactions, following recommendations from a special task force constituted by the prime minister. This initiative is expected to provide significant relief to the real estate and housing sector. According to reports, the task force has proposed multiple tax concessions for both buyers and sellers to stimulate the property market. The committee, led by Minister for Housing Riaz Hussain Pirzada, has finalized a package that includes key tax revisions and incentives intended to revitalize the property sector. Proposed Tax Reforms in Property Sector The task force has submitted its recommendations to Prime Minister Shehbaz Sharif, outlining several strategic measures to support the property market. One of the major recommendations includes allowing the construction of three-storeyed houses instead of the current two-storeyed limit. Additionally, first-time homebuyers may receive full tax exemptions, making property ownership more accessible for new investors. Among the notable tax reforms, the task force has proposed reducing property sales tax from four percent to two percent, lowering the buyerâ€™s tax from four percent to 0.5 percent, and eliminating federal excise duties on property transactions. If implemented, these measures could provide a significant boost to property sales and real estate investments. IMF Approval and Future Considerations However, the implementation of any tax rebates remains subject to approval from the International Monetary Fund (IMF). The government is expected to bring this matter up during its upcoming meeting with the Washington-based lender next month to secure necessary permissions. Additional Housing and Mortgage Reforms Apart from tax relief, the recommendations also include introducing housing subsidies for low-income individuals and facilitating home loans through an enhanced mortgage policy. Under the proposed â€˜Mera Ghar Mera Pakistanâ€™ scheme, property plots would be mortgaged to release loans for home construction, with repayment terms extending from 15 to 20 years. Furthermore, the task force has suggested increasing the taxable value of a house from the current Rs10 million to Rs50 million, which would provide additional relief to property owners. Another key recommendation is to make the Real Estate Authority operational and transfer its jurisdiction from the Ministry of Housing to the Ministry of Interior for better regulation. Prime Minister Shehbaz Sharif has scheduled a meeting on February 3 to review these recommendations and finalize the tax package. The government aims to implement reforms that ensure sustainable growth in the property sector while aligning with economic policies.

Date: 2025-02-02

Details: The Federal Board of Revenue (FBR) has provided clarity regarding the zero-rated supply of goods and services to diplomats and foreign missions under the Sales Tax Rules, 2006. These provisions ensure that diplomats and diplomatic missions receive tax exemptions on eligible purchases, promoting diplomatic reciprocity. According to the FBR, under Rule 52 of the Sales Tax Rules, 2006, zero-rated sales tax applies to supplies made to diplomats and foreign missions. This tax relief is contingent upon the fulfillment of specific conditions outlined in the regulations. Procedure for Diplomats and Diplomatic Missions Under Rule 52, any diplomat or diplomatic mission seeking zero-rated supplies from a registered supplier must apply to the Assistant Collector or Deputy Collector with jurisdiction. The application must be accompanied by an exemption certificate issued by the Ministry of Foreign Affairs. The Ministry of Foreign Affairs grants exemption certificates based on the principles of reciprocity and a minimum purchase value of Rs. 10,000. If a diplomat or diplomatic mission inadvertently pays sales tax, the Ministry forwards such claims to the FBR for a potential refund, provided all conditions are met. Once an exemption certificate is issued, the Assistant Collector or Deputy Collector records the goods being purchased and retains the certificate for official records. The diplomat or diplomatic mission is then provided an â€œAuthorization for Zero-Rated Suppliesâ€ in the prescribed STR-12 format, allowing them to make tax-free purchases from registered suppliers. Zero-Rated Supplies Through Tier-1 Retailers Under Rule 52A, tier-1 retailers supplying goods to diplomats and diplomatic missions must ensure that sales tax is charged at a zero rate. The exemption certificate issued by the Ministry of Foreign Affairs must explicitly state the description and quantity of the goods being purchased. Invoices for zero-rated supplies must reference the exemption certificateâ€™s number and issuance date. If a diplomat or diplomatic mission is mistakenly charged sales tax, the tier-1 retailer may refund the amount after issuing a credit note that details the original invoice and exemption certificate. The FBRâ€™s clarification on these provisions aims to facilitate diplomats and foreign missions while ensuring compliance with tax regulations. By streamlining the exemption process, the government reinforces its commitment to supporting diplomatic relations and upholding international tax protocols.

Date: 2025-02-01

Details: LAHORE: A show-cause notice by the tax department has survived the test on the ground that a tribunal cannot base its judgment on documents which were not part of the reply filed in response to the show-cause notice. As per details, a taxpayer had filed return but didnâ€™t disclose in it that he had a bank account in the UK, as well. Upon receipt of information regarding such bank account, a show-cause notice was issued to him that he had concealed it and also deposits therein. In reply to the said show-cause notice, the taxpayer submitted that the amount in the UK bank account represents the loan taken in London which was subsequently paid. However, he failed to produce any documentary evidence of such loan transaction and his reply was found unsatisfactory; therefore, assessing officer issued another notice requiring him to submit relevant record. However, he failed to submit the same. Consequently, he was charged to tax under the relevant section of the Income Tax Ordinance. His appeal before the Commissioner Appeal was dismissed for not producing the documentary evidence before him. The taxpayer preferred an appeal before the tribunal, where he for the very first time produced the documents. The tribunal allowed his appeal and the department filed a reference against this order. The department was of the view that the tribunal has based its judgment on documents which were not part of the reply filed in response to the show-cause notice. The higher appellate forum held that the tribunal went wrong in allowing the appeal. It was challenged by the taxpayer at the highest appellate forum, which was dismissed on the ground that no question of law arises for determination, which is based on a factual dispute. It followed by a review before the same forum. However, the review petition met with a similar fate because the taxpayer failed to establish that he has discovered any new and important matter which after the exercise of due diligence was not within his knowledge or could not be brought to the notice of the court at the time of passing of the order or judgment. Copyright Business Recorder, 2025

Date: 2025-02-01

Details: Sohail Sarfraz Published about 2 hours ago ISLAMABAD: The Islamabad High Court (IHC) has stopped the Federal Board of Revenue (FBR) from taking action against a restaurant of Islamabad, as restaurant was sealed on the allegation of non-issuance of verified sales tax invoices by Tier-I retailer. The IHC has also summoned Chief Commissioner and Commissioner Regional Tax office (RTO) Islamabad to explain their position - why the unit has been declared as Tier-I retailer. â€œTill the next date of hearing,â€ the FBR should not take coercive action against the restaurant. On the other hand, the restaurant categorically informed the court that it is providing services but they are not Tier-I retailer. According to the order of the IHC in favour of M/s The Lost Tribe, Sector: F-11, the petitioner is a registered taxpayer and operates a well-reputed restaurant in Islamabad under the name â€œThe Lost Tribeâ€, duly registered with the Federal Board of Revenue (FBR). The learned counsel, the petitioner states that the petitioner is a restaurant providing services in Islamabad. On 27.01.2025, a raid was carried out at the premises of the Lost Tribe Restaurant) in Sector F-11 and the restaurant was sealed: The sealing order incorporates the pictures of three debit/credit card receipts issued by the restaurant, which are not invoices. The allegation against the petitioner in the sealing order is that it has been found in breach of rule 150 ZEO of the Sales Tax Rules, 2006, which provide in the event that a Tier-1 retailer issues three unverified receipts. In a single day, the premises of such retailers or are liable to be sealed. He contends that the petitioner is a service provider and not a Tier-1 retailer in terms of definition provided in Section 2(43)(a) of the Sales Tax Act, 1990. He states that even in the event that It was assumed that the petitioner was a Tier-1 retailer, sealing action could only have been taken after Commissioner Inland Revenue in terms of rule 150 ZE0(3) of the Sales Tax Rules, 2006, had confirmed that the invoices in question were unverified. But no such efforts were made and no audience was provided to the petitioner. He states that the action has been taken in breach of right to natural justice and due process guaranteed by Article 10-A of the Constitution. He states that after the sealing order the petitioner sought Its de-sealing, which was allowed subject to payments in the amount of Rs 500,000 and Rs 2.5 million, which were made by the petitioner under protest. He states that no order was passed directing that the petitioner is liable for such payment and such instruction was communicated, which was verbally communicated as the petitioner business was suffering. Let notices be issued to the respondents for 04.02.2025, who will file report and para-wise comments before the next date of hearing. Let Respondents No 5 and 6 appear before the Court in person to satisfy the court that the manner in which authority was exercised was not colourable. The petitioner shall deposit the requisite fee for issuance of the notices today, the IHC order added. Copyright Business Recorder, 2025

Date: 2025-02-01

Details: Karachi, February 1, 2025 â€“ The Federal Board of Revenue (FBR) has announced the suspension of 45 customs agents involved in manipulating the Faceless Customs Assessment System. This move comes as part of ongoing efforts to uphold integrity and combat corruption within Pakistanâ€™s customs operations. The suspension of these agents is a clear message that the FBR remains committed to maintaining transparency, fairness, and efficiency in its operations. READ MORE: FBR files criminal case against faceless customs manipulators The Faceless Customs Assessment System, introduced as a key initiative by the FBR, was designed to streamline the customs clearance process, reduce human intervention, and minimize corruption. Unfortunately, some customs agents attempted to exploit vulnerabilities in this system, prompting Pakistan Customs to take immediate action. In response to this manipulation, the FBR suspended the licenses of the following customs agents: 1. M/s. M Qaseem Traders 2. M/s. Rapid Logistics (Pvt) Limited 3. M/s. Ansa International 4. M/s. Fazal & Co. 5. M/s. Mukarram Enterprises 6. M/s. Allied Universal Enterprises 7. M/s. Captain Enterprises 8. M/s. S.M. Enterprises 9. M/s. Wali Enterprises 10. M/s. Morriswala and Co. 11. M/s. Trade Line International 12. M/s. Al-Fatima International 13. M/s. M. Nadeem Associates 14. M/s. Fawad Omead Enterprises 15. M/s. Jawad & Company 16. M/s. Faisal Associates 17. M/s. Enterprises Agency 18. M/s. Eastern Agencies Corporation 19. M/s. TAU Corporation 20. M/s. Azhar Enterprises 21. M/s. Pabani Trade Linkers 22. M/s. Siddique Sons 23. M/s. Ali Impex 24. M/s. K.Y. Shippers 25. M/s. Shafco International 26. M/s. Zulfiqar Associates 27. M/s. A.I Rehman & Sons 28. M/s. Libah Enterprises 29. M/s. Junaid Qamar Enterprises 30. M/s. Shams Trading Co. 31. M/s. Fahad Impex 32. M/s. Manab Group 33. M/s. HMA Enterprises 34. M/s. Hamd Associates 35. M/s. Cargo Trading System 36. M/s. Allied Shippers International 37. M/s. Huznaib Enterprises 38. M/s. Eagle C&F Agency 39. M/s. Zeeshan Enterprises 40. M/s. Commodity Services Agency 41. M/s. Z.S Sachwani & Co. 42. M/s. Amna Enterprises 43. M/s. New Vision 44. M/s. Bismillah Logistics (Pvt) Limited 45. M/s. A.K Enterprises These agents have been suspended with immediate effect, pending further orders, and show-cause notices have been issued to them under the Customs Agents Rules, requiring them to explain their involvement in this illicit activity. The FBR has also initiated criminal proceedings against certain customs officers, agents, and private individuals who were found tampering with the system. In addition, a senior appraising officer, who was found guilty of collusion in the manipulation of the Faceless Customs Assessment System, has been suspended. Formal disciplinary proceedings have been initiated against the officer under the Efficiency and Discipline Rules. The Faceless Customs Assessment System was introduced by the FBR to enhance operational transparency and ensure that customs clearance procedures are both efficient and standardized. This new system aims to reduce the need for direct human involvement in the assessment process, thus minimizing opportunities for corruption. However, the recent attempt by these customs agents to exploit weaknesses in the system has led to swift action from Pakistan Customs. The FBRâ€™s vigilance teams, in coordination with Karachi Customs, played a pivotal role in identifying and foiling the fraudulent activities. Karachi Customs had already been directed by the FBR to closely monitor the systemâ€™s operations and report any irregularities. The latest series of suspensions and disciplinary actions demonstrate the FBRâ€™s commitment to upholding its zero-tolerance policy toward corruption and malpractice. With these decisive actions, the FBR aims to ensure that the customs clearance process remains transparent, efficient, and free from corruption, fostering a more secure and fair trading environment in Pakistan. The suspension of these customs agents is an essential step toward reinforcing the integrity of Pakistanâ€™s customs system.

Date: 2025-02-01

Details: Islamabad, February 1, 2025 â€“ The Federal Board of Revenue (FBR) has missed its tax collection target for January 2025, falling short by Rs 85 billion. The total tax revenue collected by the FBR for the month amounted to Rs 872 billion, which was significantly below the target of Rs 957 billion. While the FBR fell short of its target, the revenue collection for January still represents a notable achievement, with a 29 percent increase compared to the same month in the previous year. In January 2024, the FBR had collected Rs 677 billion. This increase reflects the revenue departmentâ€™s ongoing efforts to improve tax collection despite facing economic challenges, including a reduction in interest rates and a decline in inflation. Despite not meeting the target, the FBRâ€™s January performance highlights positive growth across various tax categories. Income tax revenue saw a rise of 28 percent, sales tax revenue grew by 29 percent, and Federal Excise Duty (FED) collection surged by 34 percent. Furthermore, Customs Duties experienced a remarkable increase of 30 percent, marking the first significant rise in this area for the year. This uptick in Customs Duties signals a revival of economic activity and a potential rebound in the countryâ€™s economic performance. The growth across multiple tax categories suggests that the FBRâ€™s efforts to improve tax administration and collection are yielding results. In addition to this, the tax revenue growth comes despite a challenging economic environment, with the reduction in interest rates and a decrease in inflation contributing to slower economic activity. In December 2024, the FBR had also missed its target, collecting Rs 1,326 billion against a target of Rs 1,373 billion. While the FBRâ€™s performance in both December and January did not meet the set targets, the overall revenue collection figures indicate a resilient economic recovery, as evidenced by the strong growth in tax revenues. The International Monetary Fund (IMF), which assesses Pakistanâ€™s tax collection on a quarterly basis, has set the target for the January to March 2025 period at Rs 3,150 billion. The IMF anticipates that tax collections will improve as economic activity picks up in March, contributing to more robust revenue growth.

Date: 2025-02-01

Details: Is Pakistan on the verge of introducing a new amnesty for property transactions, exempting buyers from disclosing their income sources? This pressing question has become the focal point of discussions within the real estate and construction industries as the government prepares to unveil its latest plans to stimulate economic activity in these crucial sectors. The real estate sector has formally urged the National Assembly Standing Committee on Finance and Revenue to revise â€œThe Tax Laws (Amendment) Bill, 2024â€ and permit property transactions of up to Rs 50 million without requiring buyers to justify their investment sources. Industry stakeholders argue that such an exemption is necessary to revitalize the property market and counteract the current slowdown. As per the proposed legislation awaiting approval, the law mandates that no individual may acquire property valued at more than 130% of their declared liquid assets in previous tax filings. If the purchase exceeds this limit, the buyer must validate their financial source before proceeding. However, prominent voices in the real estate sector claim that such restrictions will stifle investment and potentially drive capital out of the country. They advocate for at least a temporary exemption for transactions up to Rs 50 million, aiming to enhance formal registrations and inject much-needed liquidity into the real estate market. To address these concerns, the National Assemblyâ€™s Finance Sub-Committee, led by Bilal Azhar Kayani, has been tasked with evaluating a feasible exemption threshold. Originally scheduled to convene at the Federal Board of Revenue (FBR) Headquarters last Friday, the meeting was postponed due to logistical issues. It is now expected to take place next week. High-profile real estate figures, including Arif Habib, chairman of Arif Habib Dolmen REIT Management Limited (AHDRML), and representatives from the Association of Builders and Developers of Pakistan (ABAD), have actively participated in discussions. During an earlier session, Dr. Najeeb Memon, FBRâ€™s Member Policy, disclosed that the board had considered allowing purchases up to Rs 10 million without requiring an income source declaration, though no final decision had been reached. Industry experts caution that, unless modified, the proposed bill could deter investment, restricting a sector that is a significant contributor to Pakistanâ€™s economy and tax revenues. Currently, the real estate industry faces an estimated 115% taxation burden, and further regulatory constraints could suppress growth and discourage new developments. Moreover, real estate representatives warn that overregulation may prompt investors to seek opportunities abroad, particularly in tax-friendly markets like Dubai, leading to capital flight. They recommend that tax authorities should verify filer information during property registration instead of imposing stringent preemptive measures that could hamper transactions. Industry leaders are calling for government-backed incentives to support corporate developers and encourage investment in the formal real estate sector. In their proposals to the sub-committee, ABAD representatives have emphasized the necessity of investment-friendly policies that sustain economic momentum while ensuring compliance. As discussions progress, stakeholders remain optimistic that policymakers will strike a balance between taxation and regulation. A well-calibrated approach is essential to safeguard Pakistanâ€™s real estate sector, ensuring that it remains an attractive and viable investment avenue while supporting broader economic growth.

Date: 2025-02-01

Details: Islamabad â€“ The real estate sector has urged the National Assembly Standing Committee on Finance and Revenue to amend â€œThe Tax Laws (Amendment) Bill, 2024â€ to allow property transactions of up to Rs 50 million without requiring buyers to disclose their source of income. The proposed legislation, which is still awaiting approval by the National Assembly, currently mandates that no individual can purchase property worth more than 130 per cent of the liquid assets declared in their previous tax returns. If the property value exceeds this threshold, the buyer must first justify the source of investment. However, key stakeholders in the real estate sector argue that this provision could stifle investment in real estate and drive capital out of the country. They propose an exemption for transactions up to Rs 50 million, at least for one year, to stimulate growth in the property market and attract greater formal registrations. A sub-committee of the National Assembly Standing Committee on Finance, chaired by Bilal Azhar Kayani, has been set up to deliberate on an appropriate exemption threshold. The committee was scheduled to meet on Friday at the Federal Board of Revenue (FBR) Headquarters, but the meeting was postponed due to the unavailability of the FBR chairman and a meeting room on the third floor. Instead, the meeting will be held next week. Prominent real estate figures, including Arif Habib, chairman of Arif Habib Dolmen REIT Management Limited (AHDRML), and representatives of the Association of Builders and Developers of Pakistan (ABAD), participated in discussions virtually. During a previous meeting, Dr. Najeeb Memon, FBRâ€™s Member Policy, mentioned that the board was considering allowing property purchases of up to Rs 10 million without income source disclosure but had yet to finalize the decision. Real estate experts have expressed concerns that the bill, if enacted without modifications, would have adverse effects on the sector. They argue that real estate plays a vital role in the national economy and contributes significantly to tax revenues. The sector is already subject to high taxation, estimated at around 115 per cent, and further regulatory constraints could dampen investment. Moreover, real estate representatives warn that stringent tax policies could lead to capital flight, with investors diverting funds to foreign markets such as Dubai. They suggest that tax authorities should verify filer information at the time of property registration rather than imposing preemptive restrictions that could hinder transactions. The real estate sector has called on the government to introduce measures that incentivize corporate developers and promote growth in the formal property market. The representatives of ABAD have also put forward recommendations to the sub-committee, emphasizing the need for policies that facilitate rather than hinder real estate investments. With deliberations ongoing, the sector remains hopeful that the government will adopt a balanced approach to taxation and regulation, ensuring continued investment and development in Pakistanâ€™s real estate market. February 1, 2025 Islamabad, February 1, 2025 â€“ The Federal Board of Revenue (FBR) has launched criminal proceedings against a customs officer, several customs agents, and private individuals accused of tampering with the recently introduced Faceless Customs Assessment Systemâ€”a key initiative designed to bring efficiency, transparency, and uniformity to customs clearance operations. In an official statement, Pakistan Customs confirmed that its vigilance teams successfully foiled a clandestine attempt to exploit vulnerabilities in the Faceless Customs Assessment System. Foreseeing potential misuse, FBR had already instructed Karachi Customs to exercise heightened scrutiny over system operations. The latest developments affirm FBRâ€™s zero-tolerance policy against corruption and malpractice within customs procedures. As part of stringent enforcement actions, Karachi Customs has suspended the licenses of 45 customs agents allegedly complicit in this illicit activity. These individuals have also been served show-cause notices under the Customs Agents Rules, demanding explanations for their involvement. Additionally, an appraising officer found guilty of collusion was immediately suspended, with formal disciplinary inquiries initiated under the Efficiency and Discipline Rules. To ensure accountability, criminal charges have been filed against all implicated parties, including customs officials, private entities, and brokers who attempted to subvert the systemâ€™s integrity. A dedicated investigation team has been formed to probe the matter comprehensively. So far, three individuals have been arrested, while search operations and raids are actively underway to apprehend remaining suspects and bring them to justice. Despite this security breach attempt, the Faceless Customs Assessment System remains fully operational and robust, continuing to facilitate swift, automated, and corruption-free customs clearances without unnecessary bureaucratic delays. The initiative has been widely praised by trade stakeholders as a groundbreaking advancement in customs processing, streamlining procedures while eliminating opportunities for human interference. This revolutionary system was formally inaugurated by the Prime Minister of Pakistan approximately two weeks ago, underscoring the governmentâ€™s commitment to modernizing trade regulations and enhancing transparency in the customs framework. FBR has reaffirmed its stance that any individual attempting to disrupt this reformative mechanism will face the full force of the law.

Date: 2025-01-31

Details: ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday admitted that the technical solution for filing of additional resources for buying property under the proposed â€œTax Laws (Amendment) Bill, 2024â€ is yet to be developed. This was revealed by Najeeb Ahmad Memon, Member, Inland Revenue (Policy) FBR, while briefing the sub-committee of the National Assembly Standing Committee on Finance and Revenue which met under the convenor-ship of Bilal Azhar Kayani. The agenda of the committee as per its TORs was to ensure that the Revenue Division engages the Association of Builders and Developers of Pakistan (ABAD) to determine the quantum and timeline for eligibility. Talking about the method of filing of additional resources, the member said â€œthis is something where they need to have some digital technical support. The FBR is continuously working on this in order to make it user friendly and the person who buys the property can easily log in and the verification should be done in an efficient manner.â€ â€œWe are in a process of developing an effective, efficient reliable kind of technological solution,â€ he added. ABAD Chairman Muhammad Hassan Bakshi demanded that some reasonable concessions for construction sector and first-time home buyers may be incorporated with reasonable thresholds. He demanded that first-time home buyers should be exempted from wealth reconciliation for a property up to Rs50 million. Further non-filers/NTN holders should be allowed to buy a property up to Rs25 million, he demanded. However, in the absence of the FBR chairman, the committee decided to take the matter of setting a threshold in this regard on Friday (today). However, the committee recommended the FBR to revisit the registration process and prepare an easy, user-friendly, and trouble-free procedure for a layman. Bakshi said the method of filing of additional resources should be made simpler. There should be no such requirement to provide information about additional resources for the purchase of property. The NTN should be made a mandatory piece of information in the transfer documents (Sale/ Conveyance/Lease Deed). Annual income tax returns of buyers shall automatically provide the required information. Talking about definition of â€œeligible personâ€ and â€œimmediate family membersâ€ needs improvement. â€œEligible personâ€ should be defined as the one who holds a valid NTN. We are fine with the definition of â€œimmediate family membersâ€. The committee recommended that there should be no distinction in son and daughter and therefore, the word dependent children should be considered. The ABAD chairman further said that â€œCash and Cash equivalentsâ€ should be clearly defined in the law. â€œSufficient resourcesâ€ should cover the entire wealth of an individual. It must not limit it to cash and cash equivalents only. The committee recommended that cash, stocks, equivalent assets, gold and other as proposed by the FBR should be added. The ABAD chairman said that date of the implementation and threshold should be decided in a manner that it does not hit the market sentiment. Yet, it is reasonable enough to document investments of high net-worth individuals. The committee observed that the date of implementation should be once FBR gives demonstration to the committee on the proposed solutions and the law is passed. Bakshi said that while they support and admire the governmentâ€™s efforts for documentation and resource mobilisation, we believe it is of utmost importance that any reform process must not adversely affect the ongoing business. Such reforms must also not make our market uncompetitive in comparison to regional economies. Changing market practices that have been prevalent for decades is a tedious task. It must be handled carefully. Therefore, they propose that the market should be given reasonable time (at least three years) to comprehend and adjust. Committee members said that keeping in mind the prevailing situations several safeguards have been proposed. The committee would meet again on Friday (today) to finalise its recommendations. Copyright Business Recorder, 2025

Date: 2025-01-31

Details: Karachi, January 31, 2025 â€“ The Karachi Tax Bar Association (KTBA) has raised concerns regarding the IRIS portalâ€™s restriction on the auto revision of sales tax returns, causing challenges for taxpayers who need to rectify their declarations. In an official letter addressed to Ms. Aisha Farooq, Director General of Withholding Taxes at the Federal Board of Revenue (FBR), KTBA highlighted that the IRIS system is preventing the automatic revision of sales tax returns under Section 26(3) of the Sales Tax Act, 1990. Legal Framework for Sales Tax Return Revision The letter, written by KTBA President Ali A. Rahim, emphasized that Section 26(3) of the Sales Tax Act, 1990 allows a registered taxpayer to submit a revised sales tax return within 120 days of filing the original return to correct any errors or omissions. Under normal circumstances, revising a sales tax return requires Commissioner Inland Revenueâ€™s approval. However, this approval is waived if the revision is submitted within 60 days and results in either an increase in tax payable or a reduction in a refund claim. Technical Glitch in IRIS System Despite the clear legal provisions, KTBA pointed out that a major issue has arisen in the IRIS system, preventing taxpayers from revising their sales tax returns even within the 60-day periodâ€”even when an additional tax payment is made. â€œThe IRIS portal fails to allow revision within 60 days despite the additional tax payment, which is in clear violation of the proviso to Section 26(3) of the Sales Tax Act, 1990,â€ stated KTBA President Ali A. Rahim. KTBAâ€™s Call for Immediate Action The KTBA has urged the FBR Member to intervene and direct the necessary corrections in the IRIS portal to ensure compliance with Section 26(3). The association insists that automatic revision within 60 days should be permitted without requiring Commissioner Inland Revenueâ€™s approval when all stipulated conditions are met. By addressing this technical issue, KTBA believes that taxpayers will benefit from a seamless and legally compliant process, avoiding unnecessary delays and bureaucratic hurdles in revising their sales tax returns.

Date: 2025-01-31

Details: Islamabad, January 31, 2025 â€“ In a decisive move to strengthen tax compliance and curb financial irregularities, the Federal Board of Revenue (FBR) has initiated a comprehensive crackdown on excessive claim of withholding tax (WHT) deductions amounting to Rs 200 billion. According to reliable sources within the FBR, a rigorous investigation has uncovered significant discrepancies in withholding tax payment claims in annual returns of income under multiple provisions of the Income Tax Ordinance, 2001. The national tax authority has now escalated its enforcement efforts against individuals and entities involved in tax evasion through misreporting and fraudulent claims. A forensic examination of declared withholding tax deductions/collection in returns, coupled with an analysis of tax credit of deductions in government treasury, has brought to light alarming gaps in tax reporting. Investigators have found that an estimated Rs 200 billion was not duly transferred to the national exchequer, reflecting a major loophole in the tax administration system. Key Areas of Withholding Tax Evasion The most glaring discrepancy, amounting to Rs 147 billion, was identified under the category of salaries, where employees had claimed tax credits exceeding the actual deductions made by employers over the past five fiscal years. This massive tax shortfall underscores the need for stricter oversight of payroll tax compliance. Further analysis revealed additional tax gaps across multiple financial streams: * Dividends: Rs 22 billion in withholding tax remains unreconciled due to discrepancies in dividend payments. * Profit on Debt: A shortfall of Rs 9 billion has been detected in tax withholding under this head. * Prizes and Winnings: Rs 11 billion in unpaid withholding tax has been identified in this category, indicating potential underreporting by entities responsible for tax deductions. Notably, these latter three tax gaps were primarily detected in the most recent tax year, further emphasizing the need for immediate corrective action. Stringent Legal Measures in Motion To address these financial irregularities, the FBR has devised an aggressive enforcement strategy, which includes: * Demanding Proof of Deduction: Taxpayers who have claimed excessive withholding tax credits will be required to provide evidence of actual deductions. Failure to do so will result in immediate recovery of the shortfall. * Legal Action & Prosecution: Individuals and organizations found guilty of misrepresenting tax figures will face penalties, fines, and potential prosecution, reinforcing the governmentâ€™s commitment to eradicating tax fraud. * Crackdown on E-Intermediaries: The FBR has also decided to target e-intermediaries who have facilitated fraudulent filings by submitting fictitious withholding tax figures on behalf of taxpayers. * Accountability for Withholding Agents: Entities responsible for withholding tax deductions, yet failing to deposit the correct amounts into the government treasury, will be held liable under the law. Authorities have assured that all accused parties will be granted an opportunity to present their case, ensuring due process is followed before enforcement actions are executed. Expert Advice & Future Safeguards Tax professionals have advised taxpayers to reassess their filings and amend tax returns where necessary. Those who have inadvertently miscalculated withholding tax credits are urged to rectify their statements and settle outstanding dues voluntarily to avoid legal repercussions. To prevent future revenue leakages, the FBR is accelerating the implementation of the Synchronized Withholding Administration and Payment System (SWAPS). This innovative framework aims to streamline tax collection, enhance accuracy, and eliminate exploitative practices within the withholding tax mechanism. â€œStrict enforcement of SWAPS will be instrumental in ensuring greater transparency and compliance,â€ a senior FBR official stated, underscoring the governmentâ€™s resolve to fortify tax administration and boost national revenue collection. This large-scale crackdown signifies a pivotal shift in Pakistanâ€™s tax enforcement strategy, reflecting the governmentâ€™s unwavering commitment to closing tax loopholes, curbing financial malpractice, and strengthening economic stability through enhanced revenue mobilization.

Date: 2025-01-30

Details: ISLAMABAD: Pakistan Revenue Automation Limited (PRAL) will provide free of cost integration services to the registered persons including retailers for integration with the Federal Board of Revenue (FBR). According to a notification issued by the FBR on Wednesday, the PRAL will act as a licenced integrator for the purpose of point of sales (POS) system. On the other hand, the already licenced private company (licencee) shall charge fee for configuration and integration of electronic invoicing software or POS software from the integrated persons not above the threshold as may be specified by the FBR, the FBR notification added. A tax expert told Business Recorder that the decision would facilitate the retailers to get free of cost facilities of integration as well as free of cost downloadable electronic invoicing software or point of sales software from the FBR. The PRAL services would end the heavy cost to be paid to the private company for integration purposes. The retailers and others can now demand from the PRAL to install the integration software without making any payment, he added. On the other hand, another expert stated that the private company would continue to provide services for the purpose of integration of electronic invoicing. The licence was awarded to prospective licensees for integration of electronic invoicing under Chapter XIV-BB of the Sales Tax Rules, 2006 as amended vide SRO 1788(1)/2023 and Chapter VITA, Online Integration of Businesses, of the Income Tax Rules, 2002 as amended vide SRO 428(1)/2024. People would now have choice to integrate through the private company system or free of cost PRAL system. The company was selected through a competitive process by the FBR, he said. In Turkey and India, the same model has been followed, he maintained. The FBRâ€™s notification said, â€œNotwithstanding the provisions of rules l50XH, l50XI, sub-rule (2) of rule l5OXJ and l50XK, PRAL shall act as licenced integrator for the purposes of rules l50XE, sub-rule (1) of rule l50XJ and rule 150XL.â€ The PRAL shall provide free of cost integration services to the registered persons on demand, the FBR said. The PRAL, as and when required by the board, shall provide a free of cost downloadable electronic invoicing software or POS software on boardâ€™s official website. The licencee shall charge fee for configuration and integration of electronic invoicing software or POS software from the integrated persons not above the threshold as may be specified by the board through a sales tax general order. No fee shall be payable by the Board and any of its field formations, the FBRâ€™s notification added. Copyright Business Recorder, 2025

Date: 2025-01-30

Details: ISLAMABAD: The overseas Pakistanis and non-residents in United States of America (USA), Canada, Saudi Arabia, and China are timely filing complaints against the Federal Board of Revenue (FBR) with the Federal Tax Ombudsman (FTO) with the help of digital initiative. This was disclosed by Almas Ali Jovindah, Advisor Legal & Executive Secretary of the OIC Ombudsman Association during an awareness workshop organised at the Federal Tax Ombudsman (FTO) Secretariat for the law students of Sandal Law College, Faisalabad here on Wednesday. Almas highlighted the importance of technology in simplifying the adjudication process, allowing complainants from Pakistan and abroad â€” including America, Canada, Saudi Arabia, and China â€” to connect remotely for hearings. This digital initiative has helped overcome delays caused by the non-availability of parties, ensuring swift and efficient case resolutions. Federal Tax Ombudsman Dr Jah, Federal Tax Ombudsman & Secretary General of the OIC Ombudsman Association, emphasised the importance of justice and timely relief in legal practice. The youth is our future, and I look forward to seeing the legal fraternity uphold justice and ensure timely relief for every client, he remarked. He encouraged students to participate in the FTOâ€™s internship programme and contribute to promoting the institutionâ€™s mandate. The workshop was led by Almas Ali Jovindah, Advisor Legal and Executive Secretary of the OIC Ombudsman Association and Focal Person Ombudsman (FPO), alongside Muhammad Arif Humayun, Assistant Advisor. Almas enlightened the students on the pivotal role of the FTO in addressing taxpayer grievances and ensuring fairness in tax administration. He highlighted one of the most significant achievements of the FTO â€” extending relief efforts beyond individual taxpayers to organisations, marking a major milestone in its mission. Reflecting on the institutionâ€™s progress from 2021 to 2024, he stated that the Federal Tax Ombudsman has been a beacon of change, working tirelessly to address grievances and ensure justice for taxpayers. He also shared that the adjudication process has been reduced to just 35 days, significantly expediting case resolutions. Looking ahead to 2025, Almas announced plans for an extensive media campaign and nationwide internship programs, recognising the crucial role of public awareness in encouraging taxpayers to seek justice. Following his address, Muhammad Arif Humayun delivered a presentation on the FTOâ€™s working mechanisms and shared insights into significant cases handled by the institution. One exemplary case discussed was the FTOâ€™s recommendation to the Federal Board of Revenue (FBR) regarding unjustified withholding tax deductions by the Punjab Council of Arts and Culture. The decision ensured that tax practices adhered to the Income Tax Ordinance, preventing undue financial burdens on low-income individuals. Copyright Business Recorder, 2025

Date: 2025-01-30

Details: January 30, 2025 Islamabad, January 30, 2025 â€“ The Federal Board of Revenue (FBR) has successfully collected 42.56% of its annual tax target during the first six months of the fiscal year 2024-25, marking a significant improvement in revenue generation. According to the latest report issued by the Ministry of Finance, the FBR amassed a total revenue of Rs 5.625 trillion between July and December 2024. This represents a substantial 25.9% increase compared to the Rs 4.469 trillion collected in the corresponding period of the previous fiscal year. The robust performance highlights the FBRâ€™s efforts in enhancing tax compliance and broadening the tax base. For the current fiscal year, the FBR has been assigned an ambitious tax revenue target of Rs 12.913 trillion. This target is 38.9% higher than the total tax collection of Rs 9.311 trillion in the previous fiscal year. The government and the FBR remain optimistic about meeting this goal, owing to favorable economic conditions and a steady rise in industrial production. Additionally, an increase in imports has contributed to higher tax revenues, further bolstering the FBRâ€™s collections. Despite these positive indicators, the FBR faces several challenges in maintaining the current growth momentum. One of the major concerns is the easing of inflation, which poses a risk to indirect tax collections, particularly consumption-based taxes such as sales tax and excise duties. Historically, higher inflation has contributed to greater tax revenues, but a decline in inflationary pressures could potentially slow down the pace of tax collection. Another pressing issue for the FBR is the recent monetary policy shift by the State Bank of Pakistan (SBP). The central bank has implemented a sharp reduction in interest rates, which is likely to impact tax revenue from profit on debt. As interest income declines, the FBR may experience a shortfall in tax collection from this sector, necessitating alternative measures to bridge the gap. Moving forward, the FBR is expected to intensify efforts in strengthening tax administration, curbing tax evasion, and promoting voluntary tax compliance. With a strategic approach and continued economic stability, the FBR remains confident in meeting its annual revenue target for FY25.

Date: 2025-01-30

Details: The Senate Standing Committee on Finance and Revenue on Thursday questioned effectiveness of the training programmes organised for officers of the Federal Board of Revenue (FBR) in the last 20 years, an official statement revealed. The development comes as the FBR reported a revenue shortfall of Rs384 billion in the first half of the financial year 2025. The committee, led by Senator Saleem Mandviwala, sought detailed information on the outcomes of the training programmes for the FBR officers. â€œA significant portion of the meeting centered around the ongoing training programmes for FBR officers, which have been in place for over 20 years,â€ the statement from the Senate Secretariat read. â€œWhat has been achieved from the training provided to FBR officers?â€ Mandviwala asked during the meeting that was also attended by Secretary Finance Imdadullah Bosal, who assured that comprehensive details would be provided to the committee. Climate change: Senate committee pushes for â€˜strongerâ€™ renewable energy, EV initiatives During the meeting, the committee was briefed on Pakistanâ€™s current revenue shortfall of Rs384 billion for the first half of the fiscal year. The FBR collected Rs5,624 billion in taxes, falling short of the targeted Rs6,008 billion. Pakistanâ€™s tax-to-GDP ratio has risen to 10.8% in the second quarter, up from 9.5% in the first quarter, â€œalthough it remains below the IMF-agreed target of 13.6% by the end of the programmeâ€, it was told. By comparison, Indiaâ€™s tax-to-GDP ratio stands at 18%, the meeting was informed. Senator Mandviwala expressed concerns over FBRâ€™s handling of sales tax collection. â€œMany times, we have asked the FBR to collect sales tax on goods, but the people of FBR opposed it.â€ Also present in the meeting, Finance Minister Muhammad Aurangzeb responded by highlighting ongoing reforms, including a move to â€œsimplify income tax forms for salaried individuals and a push for transparency in tax collection through technological innovations like the faceless system in Customsâ€. He also discussed the governmentâ€™s intention to separate tax policy from the FBR operations in the next financial year, aiming to ease the burden on the salaried class. â€œWe are taking steps to keep the tax form simple and easy,â€ he added, noting that 60-70% of employees are not subject to the super tax, according to the statement. FBRâ€™s purchase of 1,010 vehicles Meanwhile, Senator Faisal Vawda raised alarms over the procurement process for the purhcase of 1,010 vehicles by the FBR. He alleged â€œthe company to which the order was given was raidedâ€. He further claimed that FBR officers had threatened his life, identifying individuals involved in the threats. FBR purchasing 1,010 vehicles: Senate body to write to PM, ministry In response to the allegations, FBR chairman Rashid Mahmood Langrial and Muhammad Aurangzeb pledged that a high-level investigation would be conducted. â€œStrict action will be taken against those involved in it,â€ he said, emphasizing that the committee should send the matter to the FIA for further investigation. FBR chairman announced that the procurement process for the vehicles would be halted until a full review of the process was completed. Senator Mandviwala stressed the importance of transparency in the procurement process and called for the Public Procurement Regulatory Authority (PEPRA) Board to review the vehicle purchases in line with procurement rules. â€œProcurement cannot be done without PEPRA rules,â€ he stated. Carbon tax The committee also discussed the possibility of converting certain taxes into a carbon tax, a proposal raised by Senator Sherry Rahman. While the finance minister acknowledged the World Bankâ€™s Country Partnership Framework, which includes climate and carbon concerns, some members, including Senator Farooq H. Naik, raised concerns about the impact of a carbon tax on inflation and its effect on the poor, as per the statement. The committee also stressed the need for reforms to reduce the administrative burden on taxpayers, while ensuring that tax collection remains efficient and fair.

Date: 2025-01-30

Details: Islamabad, January 30, 2025 â€“ The Inland Revenue Service Officers Association (IRSOA) has categorically and unequivocally rejected the serious yet unsubstantiated allegations made by Senator Faisal Vawda during todayâ€™s proceedings of the Senate Standing Committee on Finance. The Association has dismissed as entirely baseless the Senatorâ€™s claims that three senior officers of the Federal Board of Revenue (FBR) allegedly issued death threats concerning the procurement of official vehicles. IRSOA asserts that such accusations are not only reckless but also a blatant attempt to malign dedicated civil servants who have devoted their careers to upholding fiscal governance and national service. In an official statement, IRSOA reaffirmed that FBR officers operate with the highest degree of professionalism, integrity, and commitment to ethical conduct. â€œThese allegations are not just unfounded but deeply damaging to the morale of the entire revenue service. Our officers adhere to strict regulatory frameworks and uphold the principles of transparency in all administrative and financial matters,â€ the statement read. The procurement of official vehicles, which Senator Vawda has called into question, was carried out in full compliance with the prescribed procedures, having received necessary approvals from the federal cabinet and austerity committees. IRSOA emphasized that such administrative decisions are made with due diligence, ensuring accountability at every level. Furthermore, the Association has urged Senator Vawda to provide credible and substantive evidence to support his claims through appropriate legal and investigative channels. Publicly airing accusations without any corroborative proof not only erodes institutional credibility but also shifts focus away from meaningful discourse on national economic priorities. IRSOA also voiced concerns regarding the potential ramifications of these unfounded allegations on the morale and efficiency of FBR personnel. â€œSuch unverified remarks not only cast unwarranted aspersions on the character of public servants but also risk impeding the operational effectiveness of tax collection effortsâ€”an essential pillar of Pakistanâ€™s economic stability,â€ the statement continued. Reiterating its unwavering commitment to transparency, accountability, and adherence to the rule of law, IRSOA has called upon the Senate leadership and relevant authorities to address the matter responsibly. It urged lawmakers to ensure that parliamentary proceedings remain constructive and aligned with principles of justice and national interest. IRSOA remains steadfast in defending the integrity and dignity of its officers, vowing to continue their mission of efficient revenue collection and public service. The Association also reserves the right to pursue all available legal avenues should these baseless allegations persist, reaffirming its dedication to safeguarding the reputation of Pakistanâ€™s tax administration.

Date: 2025-01-30

Details: Karachi, January 30, 2025 â€“ The Karachi Chamber of Commerce and Industry (KCCI) has raised serious concerns over the newly introduced conditions by the Federal Board of Revenue (FBR), stating that these measures have made sales tax return filing nearly impossible for traders and small businesses. KCCI President Muhammad Jawed Bilwani, in a statement, criticized the latest requirement mandating the submission of monthly stock statements, consumption data, and intricate purchase, sales, and stock reports under notification 55(i)/2025. He stated that these stringent conditions imposed by the FBR have created significant obstacles for small-scale businesses and traders, making the timely submission of monthly sales tax returns nearly unmanageable. Expressing strong reservations, the President of KCCI emphasized that the Karachi Chamber is facing immense pressure from small traders and business owners who find the requirements of SRO 55(i)/2025 highly challenging. Many small-scale importers, traders, and wholesalers lack the resources to hire professional accountants or tax consultants due to their low profit margins. â€œThese businesses often rely on family-based manpower or a minimal number of employees, making it extremely difficult to comply with FBRâ€™s demand for extensive data reporting, including H.S. code-wise classifications, purchase records, sales transactions, and stock balances,â€ he added. KCCI has reiterated its long-standing stance that instead of simplifying tax procedures, the FBR continues to introduce unnecessary complexities that burden the already documented sector. The current inflationary pressures, harsh economic conditions, high tax rates, and security concerns are already hindering investment and business growth in Pakistan, particularly in Karachi. The imposition of these excessive compliance requirements further aggravates the situation rather than facilitating the business community. While categorically rejecting these new filing mandates for stock and production data, KCCI urged the Chairman of the FBR to reconsider the matter. President Jawed Bilwani suggested that rather than enforcing these requirements on a monthly basis, the FBR should consult with relevant stakeholders and implement a more practical solution. â€œA better approach would be to require such data on an annual basis, giving businesses ample time to compile and submit accurate reports, instead of placing them under undue stress every month,â€ he proposed. The Karachi Chamber of Commerce and Industry (KCCI) remains committed to protecting the interests of the business community and continues to demand fair and practical tax policies from the government. Moving forward, KCCI will engage in dialogue with policymakers to advocate for a more business-friendly taxation system that supports economic stability and growth.

Date: 2025-01-30

Details: Islamabad â€“ The Federal Board of Revenue (FBR) has unearthed a colossal tax fraud amounting to Rs 78 billion in the collection and deposit of withholding tax on salary income. This revelation underscores significant gaps in tax compliance and enforcement, highlighting systemic loopholes that have been exploited for years. Well-informed sources within the FBR confirmed on Thursday that tax authorities detected the massive evasion through a meticulous investigation of tax returns filed for the tax year 2019 to 2024. â€œA forensic examination of income tax returns revealed glaring discrepancies in withholding tax deductions claimed by salaried individuals under the head of salary and actually verified from CPRsâ€ an official disclosed on the condition of anonymity. â€œThe investigation initially focused on individuals in the highest salary tax slab, earning over Rs 1.5 million annually.â€ According to FBR sources, unscrupulous individuals exploited the tax authorityâ€™s leniency toward salaried taxpayers, claiming inflated withholding tax credits. Under Section 149 of the Income Tax Ordinance, 2001, employers are mandated to deduct taxes at the time of salary disbursement. Whereas, employees also need to declare their income on the basis of deducted withholding tax on salary as well as on the other source of income. In response to the staggering Rs. 78 billion tax gap, the FBR issued notices under Section 162 of the Income Tax Ordinance, 2001 to recover unpaid taxes. â€œOne prominent business entity alone remitted over Rs 200 million in response to these notices,â€ an official disclosed. This year, the FBR leveraged cutting-edge technology to reconcile withholding tax deductions, which exposed vast inconsistencies. â€œIn the past, FBR merely accepted employersâ€™ withholding tax deductions and employeesâ€™ declarations without thorough cross-verification, leading to the accumulation of unjustified tax refunds,â€ the official admitted. The situation had grown so severe that in 2021, tax refund issuance was effectively halted to curb losses. Recognizing the scale of this evasion, the FBR is now planning an expanded crackdown, intensifying monitoring of withholding taxes and conducting rigorous audits of declared income tax liabilities. To mitigate future revenue leakages, FBR officials stress the urgency of implementing the Synchronized Withholding Administration and Payment System (SWAPS), a streamlined mechanism designed to enhance tax collection accuracy and prevent exploitation of the withholding tax system. â€œStrict enforcement of SWAPS will be instrumental in ensuring greater transparency and compliance,â€ the source emphasized. This landmark revelation by the FBR signals a pivotal shift towards stringent tax oversight, reaffirming the governmentâ€™s commitment to closing tax loopholes and enhancing revenue mobilization for national development.

Date: 2025-01-29

Details: Islamabad: Pakistan Customs has issued a new valuation ruling for determining customs duties and taxes on the import of plastic raw materials. The latest valuation, released by the Directorate General of Customs Valuation on January 28, 2025, takes into account international price benchmarks such as Platts Polymerscan and ICIS while incorporating inputs from the Pakistan Plastic Manufacturers Association (PPMA). The new valuation will be updated periodically to reflect changes in global market trends. Background of the Valuation Adjustment The need for a valuation revision arose following a formal representation made by PPMA on January 3, 2025. The association submitted a price schedule for plastic raw materials based on international market trends, covering both prime quality and recycled materials imported into Pakistan from various global sources. Pakistan Customs observed significant discrepancies between declared values and assessed values of imported plastic raw materials. Particularly, the valuation of recycled plastic raw materials had not been determined under Section 25A of the Customs Act, 1969. Due to these inconsistencies, Customs initiated an exercise to align the valuation process with prevailing international market rates to ensure fair taxation and duty assessment. Customsâ€™ Valuation Review Process To address the issue, Pakistan Customs conducted a detailed analysis by retrieving 90 daysâ€™ clearance data of plastic raw material imports. The scrutiny revealed variations in declared values and assessed values, further reinforcing the need for an updated valuation mechanism. To ensure transparency and accuracy, Customs consulted key stakeholders and conducted a comparative study using international pricing sources such as Platts Polymerscan and ICIS. These publications provided a comprehensive price trend analysis for plastic raw materials, which was then cross-checked with import data from the relevant period. Following a thorough review, Pakistan Customs adjusted the customs values of plastic raw materials based on verified international pricing trends. The revised valuation is expected to improve transparency in import taxation and minimize under-invoicing and misdeclaration. Implications of the New Customs Valuation The revised customs valuation framework will help streamline import procedures and ensure that import duties are assessed fairly and consistently. Moreover, the updated valuation will provide greater predictability for importers and reduce disputes over customs value assessments. Pakistan Customs has assured that it will continue to monitor international market prices and work in collaboration with industry stakeholders to make timely adjustments when necessary. The new valuation ruling is expected to enhance compliance and promote a level playing field in the plastic manufacturing industry.

Date: 2025-01-29

Details: Islamabad: The Pakistan Business Council (PBC) has put forth comprehensive policy recommendations for the upcoming budget 2025-26, emphasizing the need for a fully authorized National Tax Authority (NTA). The PBC has strongly advocated for the separation of tax policy from the Federal Board of Revenue (FBR) and the establishment of the NTA to enhance efficiency and transparency in tax collection. Among the key recommendations, the PBC has suggested significant reforms in the taxation system, including changes in the super tax regime, gradual reductions in corporate and sales tax rates by one percent per annum, and revisions in tax slabs to account for inflation. It has also proposed measures to ease the tax burden on salaried employees in the upcoming fiscal year. According to the PBC, it is imperative that tax policy-making be separated from tax collection, ensuring that policymakers include representatives from the ministries of planning, industries, investment, and commerce. This approach will align fiscal policies with broader economic objectives, fostering sustainable economic growth. One of the most significant recommendations from the PBC is the establishment of a fully functional NTA to serve as a single-window assessment platform for taxpayers. Taxes collected through the NTA should be transferred promptly to federal and provincial authorities based on a predefined and mutually agreed mechanism. This will not only streamline compliance but also reduce administrative burdens and improve the efficiency of tax collection and distribution. The PBC has also recommended a phased reduction in the super tax rate on non-export profits by two percent annually while ensuring a progressive levy based on income slabs. Additionally, it has suggested mandatory wealth reconciliations for all resident tax return filers and limiting the formal sectorâ€™s responsibility to verify tax credentials to only its direct FBR-registered suppliers and customers. To address tax evasion, the PBC has proposed imposing a 39 percent advance tax on non-filer commercial and industrial customersâ€™ electricity and gas bills, followed by the disconnection of utility services in cases of non-compliance. Furthermore, it has recommended revising the capital gains tax on land sales, with a 39 percent tax on sales within 10 years of purchase and a reduced 15 percent tax rate for holdings exceeding 10 years. The PBC has also emphasized the need to phase out tax concessions, including those for former tribal areas, and has urged the FBR to establish Electronic Data Interface (EDI) arrangements with major trading partners to curb tax evasion. Additionally, it has suggested reducing the corporate tax rate by one percent annually until it reaches 25 percent, aligning it with other emerging economies, and cutting the General Sales Tax (GST) rate by one percent annually until it reaches 15 percent. Other policy recommendations include the gradual elimination of minimum turnover tax for listed companies, taxation based on income rather than declared overseas assets, and a reduction in withholding tax (WHT) on exporters from two percent to one percent. The PBC has also called for rationalizing WHT on the services sector and reducing WHT on recyclable materials to create a level playing field with the informal sector. Furthermore, the PBC has urged the government to exempt listed companies from Section 8B of the Sales Tax Act, 1990, which limits the offset of input tax to 90 percent of output tax. It has recommended lowering the current 50 percent monthly export threshold under Section 8B to 10 percent to improve cash flow and boost exports. The PBC has also proposed restoring Exemption Certificates for quarterly advance income tax payers and harmonizing GST refund processing for zero-rated and non-zero-rated sectors to broaden the export basket. With these recommendations, the PBC aims to create a more transparent, efficient, and business-friendly tax environment that encourages investment and economic growth in Pakistan.

Date: 2025-01-29

Details: The Karachi Tax Bar Association (KTBA) has raised an important issue with the Federal Board of Revenue (FBR) regarding a problem in the sales tax return process. On Wednesday, the KTBA urged the FBR to address an anomaly that is creating difficulties for both taxpayers and tax practitioners. The concern was communicated in a letter addressed to Ms. Aisha Farooq, the Director General of Withholding Taxes at the FBR. The KTBA explained that there is no provision in Annexure-B of the Sales Tax Return form that allows for the disallowance of input tax paid under Section 7A of the Sales Tax Act, 1990. This oversight is making it challenging for taxpayers to file accurate returns. KTBA President, Ali A. Rahim, expressed that this issue has become a serious concern and requires the immediate attention of the FBR. One of the major issues pointed out by the KTBA is the introduction of a new invoice-wise or GD (Goods Declaration)-wise feature in the IRIS Sales Tax Return system, which was implemented starting November 2024. This feature was meant to classify input tax as non-creditable input tax, but it has caused complications. Taxpayers are unable to disallow the minimum value addition tax (VAT) paid at the import stage because the necessary provision is missing from Annexure-B in the IRIS system. Before this feature was introduced, taxpayers could manually enter the amount for disallowing input tax at Serial No. 7 of the Sales Tax Return. However, with the new system, this option is no longer available, and as a result, the system automatically computes the sales tax liability, sometimes incorrectly. This creates problems for taxpayers who are unable to file their returns accurately, potentially leading to a lower tax liability than required. To resolve this issue, the KTBA has requested that the FBR add the necessary provision to Annexure-B of the Sales Tax Return. This would allow taxpayers to correctly disallow the minimum value addition tax paid at the import stage and file their returns with the correct tax liability. The KTBA also emphasized that this correction is vital to prevent any loss of tax revenue.

Date: 2025-01-29

Details: Karachi, January 29, 2025 â€“ In a move to streamline the tax system, the Federal Board of Revenue (FBR) has issued new procedures concerning the licensing, issuance of electronic sales tax invoices, and the integration of registered persons into the electronic invoicing system. The announcement came with the issuance of SRO 69(I)/2025, which amends the Sales Tax Rules, 2006, to ensure greater accountability and efficiency in the collection of sales tax. Licensing and Integration As per the new rules, all registered persons are required to integrate their point of sale systems with the FBRâ€™s computerized system for generating and transmitting electronic sales tax invoices. This will help in the automation and monitoring of taxable supplies. Rule 150Q outlines the procedure for integration, where registered persons must ensure that their hardware and software systems for invoicing meet the necessary requirements set by the FBR. The new rules also mandate that these systems must operate through a licensed integrator, ensuring a standardized and secure transmission of invoice data. The FBR will notify specific groups of registered persons required to comply with this integration, and those who have already completed the process of integrating their point of sale systems will be considered compliant under the new rules. Obligations of Integrated Persons The integrated persons, as defined by the FBR, are required to install, register, and configure their electronic invoicing systems according to the guidelines issued by the FBR. These systems must perform various functions, including generating sales tax invoices, creating digital signatures, encrypting data, and transmitting invoices to the FBRâ€™s system in real-time. Furthermore, integrated systems must also generate a unique QR code, print it on the invoice, and ensure that every adjustment, modification, or cancellation is recorded. These records are essential for maintaining accurate logs, which will be subject to departmental audits. The new rules also stress that integrated systems should be capable of detecting and reporting errors or any malpractice. If any discrepancies are detected, the system should automatically notify the FBR. This will further enhance transparency and prevent tax evasion. Requirements for Payment and Surveillance One of the most significant changes introduced by the FBR is the inclusion of electronic payment systems. All integrated persons will be required to ensure that their point of sale systems can accept payments through various digital means, including debit and credit cards, and must allow for the use of QR codes for these transactions. To support this initiative, the FBR may also mandate the use of CCTV surveillance in areas where electronic sales transactions take place. Additionally, integrated persons must display signage at their outlets indicating their compliance with the FBRâ€™s electronic invoicing system. This will serve to inform customers and authorities of their commitment to adhering to the new regulations. Record-Keeping and Auditing Another important aspect of the new regulations is the record-keeping requirement. Integrated persons must maintain electronic records of all invoices for a period of six years, which can be accessed during audits. The FBRâ€™s Inland Revenue officers are authorized to monitor these records and perform audits as necessary to ensure compliance. Moreover, integrated systems will automatically generate and store a complete sales record, which includes detailed information such as the name of the seller, recipient details, tax amounts, and descriptions of goods or services. This information must also be available for inspection by the relevant authorities. Licensing of Integrators Under the new rules, no person can carry out the integration of a registered personâ€™s invoicing system without first obtaining a license from the FBR. The FBR has designated PRAL (Pakistan Revenue Automation Limited) as a licensed integrator for providing these services, ensuring that all systems are compliant with FBR requirements. The licensing process for integrators is rigorous, and applications must be accompanied by several documents, including the companyâ€™s profile, technical capacity, financial stability, and a list of previous projects. The FBR also has the right to suspend or cancel the license of any integrator that fails to meet the prescribed standards. Penalties and Non-Compliance The FBR has also outlined severe penalties for non-compliance. Registered persons found tampering with their invoicing systems or failing to integrate their systems as required by law will face substantial fines, in addition to other punitive measures. Integrated persons who fail to comply with the new invoicing system will be penalized under the provisions of the Sales Tax Act. Future Prospects The new rules reflect the FBRâ€™s ongoing efforts to modernize Pakistanâ€™s tax system and curb the informal economy. By integrating electronic invoicing and implementing real-time monitoring, the FBR aims to increase tax compliance, reduce fraud, and improve revenue collection. This step is also in line with Pakistanâ€™s broader digitalization efforts to boost economic growth and transparency. In the coming months, businesses will need to adjust their operations to comply with the new rules, and the FBR is expected to provide further guidance and support to ensure a smooth transition to the electronic invoicing system. As Pakistan continues to embrace digital systems, these regulations are expected to play a critical role in shaping the future of tax administration in the country.

Date: 2025-01-29

Details: Karachi, January 29, 2025 â€“ The Federal Board of Revenue (FBR) has formally explained the procedural framework for conducting electronic audits (e-audits) of taxpayers under the Sales Tax Act, 1990. This initiative aims to streamline the audit process, enhance transparency, and minimize physical interaction between taxpayers and tax authorities. According to the FBR, the e-audit procedure is governed by Rule 44AC of the Sales Tax Rules, 2006. It applies to cases selected for audit under Section 25 or Section 72B of the Sales Tax Act, 1990. Once a case is selected, and the competent authority directs an e-audit, the following structured procedure is followed: Step-by-Step E-Audit Process 1. Issuance of Audit Notice: o The Commissioner Inland Revenue notifies the taxpayer under Section 25(1) of the Act, specifying the reasons for selecting their case for audit. 2. Assignment of Case to Audit Officer: o The Commissioner Inland Revenue assigns the case to an Audit Officer, who is responsible for conducting the e-audit in accordance with the prescribed guidelines. 3. Submission of Electronic Records: o The registered taxpayer is required to submit all statutory records maintained under Section 22 of the Act. These records must be uploaded through IRIS, the FBRâ€™s online tax management system, or through an electronic data carrier specified by the Board. 4. No Physical Appearance Required: o A key advantage of the e-audit system is that taxpayers are not required to appear in person or through an authorized representative. o However, if a taxpayer requests a personal hearing, the proceedings will be conducted exclusively via video conferencing through a personal computer system or at the nearest Tax Facilitation Centre established within FBRâ€™s regional offices. 5. Audit Officerâ€™s Review and Conclusion: o If, after examining all submitted documents, the Audit Officer finds no discrepancies, the case is closed in IRIS, with formal intimation to the Commissioner Inland Revenue. 6. Audit Report and Further Examination: o If discrepancies are identified, the Audit Officer compiles a detailed audit report, documenting observations and findings. This report is submitted to the Commissioner Inland Revenue and shared with the taxpayer via IRIS. 7. Assessment and Adjudication: o The Commissioner Inland Revenue assigns the case to an Adjudicating Officer to determine tax liability under Section 11 of the Sales Tax Act, 1990. The officer may also impose penalties and default surcharges under Sections 33 and 34 of the Act. 8. Issuance of Show Cause Notice: o Based on the audit findings, the Adjudicating Officer issues a show cause notice through IRIS, notifying the taxpayer of any outstanding liabilities. 9. Final Order on Tax Assessment: o After considering the taxpayerâ€™s explanation, the Adjudicating Officer issues a final order under Section 11 of the Act. FBRâ€™s Commitment to Digital Transformation The FBR has emphasized that this digital audit mechanism is designed to reduce procedural delays, enhance efficiency, and minimize compliance burdens on taxpayers. By leveraging technology, the FBR aims to foster a transparent and taxpayer-friendly environment, ultimately improving tax collection and enforcement.

Date: 2025-01-28

Details: Islamabad â€“ The Federal Board of Revenue (FBR) is intensifying its efforts to ensure transparency in Pakistanâ€™s real estate sector by scrutinizing the source of income used in property transactions. This initiative is aimed at combating tax evasion and fostering accountability within the industry. FBR Chairman Rashid Mahmood Langrial revealed that the authority is working to reduce transaction taxes in the real estate sector to encourage compliance. However, he emphasized that individuals investing in property must disclose the origins of their funds. This measure is intended to address the widespread issues of undervaluation and misdeclaration that have plagued the sector for years. The extent of these challenges was highlighted by data from the fiscal year 2023-24, which indicated that over 93.7% of property transactions in Pakistan were valued below Rs 5 million. These figures underscore the pervasive practice of underreporting property values to avoid taxation. On Monday, representatives from the real estate sector urged the National Assembly Standing Committee on Finance and Revenue to amend â€œThe Tax Laws (Amendment) Bill, 2024.â€ They proposed an exemption from disclosing the source of investment for property transactions valued up to Rs 50 million. However, during a meeting of the sub-committee at FBR Headquarters, Chairman Langrial clarified that the proposed legislation would impact only 2.5% of investors. He assured that 95% of households would remain unaffected by these measures, which are designed to curtail economic activities of ineligible entities and enhance tax collection. Tax filing services Highlighting the significant tax gap, Langrial noted that the top 5% of property transactions account for a missing revenue potential of Rs 1.6 trillion, compared to just Rs 140 billion in the remaining 90-95%. This disparity underscores the need for stringent regulations targeting high-value transactions. According to the FBRâ€™s data, 1.695 million property transactions were recorded in 2023-24. Of these, a staggering 93.7% were valued under Rs 5 million. In contrast, only 3,250 transactions (0.2%) exceeded Rs 50 million in taxable value. This data highlights the urgent need for reforms to address income concealment and promote a fairer tax system. The FBRâ€™s renewed focus on accountability and tax compliance aims to establish a more equitable real estate market, ensuring that all stakeholders contribute their fair share to national revenue.

Date: 2025-01-28

Details: BR Web Desk Published January 28, 2025 Finance Minister Muhammad Aurangzeb acknowledged the â€œdisproportionately high burdenâ€ on the countryâ€™s salaried group, hinting at a review of the current tax slabs. â€œThis is my personal view, that indeed, on the salaried class side, there is a disproportionately high burden. â€œThe reality is that we do need to think about the various tax slabs that we have. However, I cannot make any commitment around that,â€ he said. Speaking at the event titled â€œDialogue on the Economyâ€, organized by the Pakistan Business Council (PBC) on Tuesday, the finance minister said that the government intends to simplify the tax filing process for the salaried class. â€œWe want to make life simpler for the salaried class in Pakistan.â€ He informed that the government has also kicked off its budget process in the first week of January. â€œThis will allow us the time to have a detailed discussion,â€ he said. Aurangzeb said consultations with business chambers are planned to start in February, with detailed feedback expected by March-April. â€œWe are in the Fund (IMF) programme, we have made commitments, and therefore few things might have to be phased in or phased out,â€ he said. As per a Finance Division circular, the budget for the next fiscal year 2025-26 will be presented in the first week of June 2025. Meanwhile, Aurangzeb reiterated that all economic indicators are moving in the right direction. Referring to the Monetary Policy Committeeâ€™s (MPC) decision on Monday, where the central bank decided to cut the policy rate by 100 basis points (bps), the minister said that the KIBOR rate has come down to around 11%. In line with expectations, the MPC of the State Bank of Pakistan (SBP) reduced the key policy rate by 100 basis points, taking it down to 12%. This was the sixth successive cut in the key interest rate since June 2024 when it stood at 22%. Aurangzeb expressed that the reduction in interest rates would improve business confidence. Talking about SBPâ€™s projection of reaching $13 billion foreign exchange reserves by the end of the current fiscal, Aurangzeb described it as â€œa very important milestone.â€ â€œThat will essentially take us to almost 3 months of import cover,â€ he said. â€œIf all goes well, this is a critical trigger for the economy and the sovereign being re-rated to a single B category.â€ The finance minister noted that the country is moving in this direction on the back of â€œvery strong remittance flows and IT services exportsâ€. Discussing the International Monetary Fund (IMF) programme, Aurangzeb reiterated that the government â€œis going to stay firm with those commitmentsâ€. Aurangzeb further said that the government remains committed to reducing its expenditure and is pursuing the rightsizing policy.

Date: 2025-01-28

Details: Karachi, January 28, 2025 â€“ The Federal Board of Revenue (FBR) has initiated a comprehensive data collection process for officials serving in the Inland Revenue (IR) department. This move aims to compile and submit detailed records to the high-powered committee overseeing the rightsizing of the federal government. To facilitate this initiative, the FBR issued an official directive on Tuesday, instructing all Chief Commissioners of Inland Revenue (IR) and Directors General (IR) to provide necessary details regarding employees serving under various contractual arrangements. According to the FBR, contract employees appointed under the Prime Ministerâ€™s Assistance Package (PMAP) of 2006 and 2015 have already been regularized as per the Establishment Divisionâ€™s Policy dated December 23, 2022. However, those recruited under the Contract Policy of March 21, 2000, which was later amended through an Establishment Division order (OM No. 4/1/2005-CP-I) on April 13, 2005, have yet to be regularized and continue to serve on contract. In compliance with the directives of the High-Powered Committee on Rightsizing of the Federal Government, which operates under the leadership of the Minister for Finance & Revenue, the FBR has requested the submission of separate lists of employees currently employed on a contract or daily wage basis. The required information must be structured in the following format: S.# Name Designation/BPS (if on contract) Date of initial appointment on contract/daily wages Latest extension period of contract/daily wages Relevant rules/regulations governing appointment 1 The FBR has mandated that all relevant data must be submitted within a week. Additionally, every head of field formation is required to comply with this directive within the prescribed timeline, even if no employees fall under the contractual or daily wage category, in which case they must explicitly report a NIL response. This step reflects the FBRâ€™s commitment to streamlining government operations and ensuring a more structured and efficient workforce management system.

Date: 2025-01-28

Details: Islamabad, January 28, 2025 â€“ Finance Finance Minister Muhammad Aurangzeb on Tuesday announced a significant administrative shift aimed at streamlining tax administration and boosting revenue collection in Pakistan. In a pivotal move, the government has transferred policy-making powers from the Federal Board of Revenue (FBR) to the Ministry of Finance. This strategic realignment is intended to allow the FBR to concentrate exclusively on its core responsibility of tax collection, thereby enhancing its operational efficiency and productivity, the minister explained. During his address at the â€œDialogue on the Economy,â€ organized by the Pakistan Business Council (PBC), Aurangzeb expressed optimism that the positive shifts in various economic indicators would contribute to a potential upgrade in Pakistanâ€™s sovereign credit rating to the â€˜single Bâ€™ category. He noted that the country had made significant strides in several key economic areas, such as inflation control and monetary policy. Inflationary pressures have subsided, and the State Bank of Pakistan (SBP) has reduced policy rates further, which is expected to lower Kibor rates and benefit the industrial sector. The finance minister also highlighted that Pakistanâ€™s foreign exchange reserves had reached a significant milestone of $13 billion, a figure deemed adequate to cover three months of imports. He underscored the importance of this milestone, stating that it marks a critical point for the economy, positioning Pakistan for a potential sovereign rating upgrade. Aurangzeb further stressed that this achievement, combined with strong remittance inflows, robust IT services exports, and diversification of exports, would provide a strong foundation for Pakistanâ€™s economic future. Looking ahead, Aurangzeb stated that the government is committed to fostering an environment conducive to export-led growth and strengthening remittance inflows. He emphasized that Foreign Direct Investment (FDI) is a key element in the countryâ€™s economic roadmap, asserting that every incoming FDI must be geared towards generating exportable surplus to support an export-driven economy. Reflecting on his recent participation at the World Economic Forum (WEF), the minister spoke about the constructive discussions held with bilateral partners, financial institutions, and the IMF. These discussions spanned various important topics, including trade, tariffs, artificial intelligence, digitalization, and the evolving global economic landscape. In another shift from traditional fiscal practices, the government has introduced a more inclusive and transparent budget planning process. Starting in January instead of the customary April, all government departments have been tasked with presenting their budget proposals, and external stakeholders like the PBC and other chambers of commerce have been invited to provide input. Aurangzeb reiterated the governmentâ€™s firm commitment to its medium-term program with the International Monetary Fund (IMF), a three-year plan that outlines the key economic objectives for the country. He stressed that while the government has made progress in stabilizing the economy, transitioning from stabilization to sustainable growth requires a fundamental transformation of Pakistanâ€™s economic structure. This transformation is essential to avoid the recurring boom-and-bust cycles that have previously undermined economic stability. He concluded by emphasizing the critical nature of the IMF program, underscoring the need for conscious and strategic decisions regarding taxation, energy policies, privatization, and public finance to safeguard Pakistan from future economic challenges.

Date: 2025-01-28

Details: January 28, 2025 Lahore, January 28, 2025 â€“ The Punjab Excise and Taxation Department has announced an extension to the deadline for motor vehicle tax payments, providing vehicle owners additional time to clear their dues. Director of Excise and Taxation, Muhammad Ali Naveed, confirmed that the new deadline for payment is now set for January 31, 2025. This extension comes as a relief to many vehicle owners who may have missed the original deadline. However, the department has issued a stern warning to defaulters, emphasizing that strict punitive measures will be enforced for those who fail to comply with the new deadline. Ali Naveed stated that individuals who do not settle their outstanding dues by the extended deadline could face serious consequences, including the cancellation of vehicle registration and the imposition of a 200% penalty on the unpaid tax amount. In an effort to encourage timely payments, the excise director urged all vehicle owners to act swiftly and avoid complications by clearing their outstanding taxes as soon as possible. He emphasized that settling taxes promptly would prevent unnecessary hassles and ensure that vehicles remain legally registered without facing hefty penalties or registration issues. Ali Naveed also highlighted the departmentâ€™s continuous efforts to streamline and simplify the tax payment process for the convenience of the public. In particular, he pointed out that users of the Punjab Smart Card system can conveniently pay their token taxes online at any time, eliminating the need to visit physical offices for payments. This initiative is designed to offer greater ease and accessibility to taxpayers, especially for those with busy schedules or who reside in remote areas. To further assist taxpayers, the excise department has made arrangements to keep its service counters open until 4:00 PM to accommodate those who wish to make payments in person. This extended service hour ensures that individuals have ample opportunity to clear their dues before the final deadline. The department urges all vehicle owners to take advantage of the extended deadline and simplified payment options, ensuring a smooth and penalty-free tax settlement process.

Date: 2025-01-28

Details: Karachi, January 28, 2025 â€“ The Karachi Tax Bar Association (KTBA) has raised serious concerns regarding the fair market value (FMV) assessment of multi-storied built-up properties in Karachi. In a formal letter addressed to Dr. Hamid Ateeq Sarwar, the Member for Inland Revenue Operations at the Federal Board of Revenue (FBR), the KTBA emphasized the challenges that have arisen since the FBR issued the Notification SRO 1724(I)/2024 on October 29, 2024. This notification, which was meant to provide clarity on the FMV of immovable properties, has inadvertently led to confusion and operational inefficiencies. The KTBA revealed that, as a result of this new notification, Sub-Registrars in Karachi have either halted the registration of sale deeds or are refusing to process the documentation for multi-storied residential, commercial, and industrial properties. This delay is primarily due to the difficulty in determining the accurate FMV of these properties under the current regulatory framework, which lacks specific guidelines for properties with more than one story. KTBA President, Ali A. Rahim, elaborated on the situation, explaining that before the introduction of Notification SRO 1724(I)/2024, the FMV for multi-storied properties was determined under SRO 345(I)/2022, issued on March 2, 2022. Under the previous guidelines, the FMV for built-up properties with multiple stories was determined using a structured formula based on the number of floors. Specifically, residential properties with more than a ground floor saw their FMV increase by 25% for each additional floor. Commercial properties followed a more substantial increase, with a 100% rise in FMV for each additional floor. For industrial properties, the FMV was calculated by adding the plot value to the value of the total covered area across all floors. In cases where a property served multiple purposes, the FMV was derived from the average rate across the various uses. However, SRO 1724(I)/2024, the latest notification, omits any reference to multi-story properties, leaving a significant gap in the FMV determination process. This omission has caused confusion and inconsistency in the valuation of built-up residential, commercial, and industrial properties, as well as those used for multiple purposes. The absence of clear guidelines has led to differing interpretations by authorities, further complicating the registration process. The KTBA has urged the FBR to provide an immediate and clear explanation regarding the determination of FMVs for multi-storied properties. Furthermore, the KTBA has recommended that the FBR include practical examples for each category of built-up properties to ensure uniformity and prevent further delays in property transactions. The association hopes that the FBR will address this issue promptly to restore order and facilitate the smooth registration of property documents.

Date: 2025-01-28

Details: Islamabad, January 28, 2025 â€“ The Federal Board of Revenue (FBR) has officially issued the criteria for selecting cases for audit under the Sales Tax laws. These guidelines are outlined in Rule 44A of the Sales Tax Rules, 2006, which details the methodology and procedures for audit selection and conduct. Key Provisions Under Rule 44A 1. Scope and Applicability: Rule 44A applies to the selection of cases for audit conducted by the FBR under Section 72B of the Sales Tax Act, 1990. It specifies the steps for selecting cases through a computer-based ballot, using both random and parametric selection methods for tax periods under review. 2. Steps for Audit Selection: The process of selecting cases for audit involves several critical steps: o Data Utilization: The audit selection process incorporates data from all tax returns, whether filed electronically or manually. o Exclusions from Audit: The FBR identifies specific persons or classes of persons to be excluded from the audit process each year. These exclusions are announced via the FBRâ€™s web portal before the balloting process. o Balloting Process: Cases excluded from the audit are removed from the dataset, and the remaining cases are subjected to computer-based balloting. o Audit Percentage: For each tax period, a predetermined percentage of cases is selected for audit. This percentage is publicized annually through the FBRâ€™s web portal prior to balloting. o Publication of Results: Lists of selected cases are generated immediately after the computer ballot and uploaded to the FBRâ€™s web portal. o Audit Basis: The selection is based on the NTNs (National Tax Numbers) or CNICs (Computerized National Identity Cards) of taxpayers. o Risk Parameters: For parametric audits, risk parametersâ€”such as financial ratios, industry benchmarks, refund thresholds, and compliance historyâ€”are determined by the Board to identify high-risk cases. 3. Transparency Measures: The balloting process is conducted in the presence of representatives from Chambers of Commerce and Industry as well as Tax Bar Associations to ensure transparency. 4. Procedure for Selected Cases: Once cases are selected, the concerned Commissioner of Inland Revenue issues an intimation letter to taxpayers. The letter includes: o The section under which the selection is made. o The tax period(s) under audit. o Whether the selection was random or parametric. o Compliance requirements, such as providing books of accounts, supporting documents, computerized data, or attested hard copies. 5. Audit Examination and Reporting: After reviewing the taxpayerâ€™s books, records, and data, discrepancies (if any) are shared with the taxpayer in the form of an audit report. Taxpayers are required to provide explanations for these discrepancies. 6. Final Assessment: If the taxpayerâ€™s explanations are deemed unsatisfactory, the FBR issues a notice under Section 11(5) of the Sales Tax Act, 1990. This notice outlines the rationale for the assessment of tax. Subsequently, a tax assessment order is issued, ensuring the taxpayer is afforded an opportunity for a hearing before finalization. Implications for Taxpayers The updated audit criteria reinforce the FBRâ€™s commitment to enhancing transparency and accountability in the tax system. By leveraging data-driven parameters and ensuring stakeholder involvement in the audit process, the FBR aims to foster compliance while addressing tax evasion. Taxpayers are advised to maintain accurate records, comply with the prescribed documentation requirements, and respond promptly to audit-related notices. The clarity and predictability in audit selection under Rule 44A should also reduce uncertainties and promote trust in the system. For further details, taxpayers can access the complete guidelines and announcements on the FBRâ€™s official web portal.

Date: 2025-01-27

Details: Islamabad, January 27, 2025 â€“ A high-level task force, established by Prime Minister Shehbaz Sharif, convened on Monday to deliberate on the pressing issue of high taxes on property transactions and its impact on the real estate sector. The meeting, chaired by Federal Minister for Housing and Works Mian Riaz Hussain Pirzada, marked the second session of the Task Force for Housing Sector Development. Held at the Ministry of Housing and Works, it was attended by key officials, including Finance Minister Muhammad Aurangzeb, Minister of State for Finance Ali Parvez Malik, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial, and other members representing various government bodies and private sector stakeholders. This task force, specifically constituted by the Prime Minister, aims to address challenges in the housing sector. It brings together representatives from relevant government institutions and private-sector experts actively engaged in real estate. Its primary goal is to develop actionable recommendations to revitalize the sector. The task force has established four specialized working groups focusing on Taxation Issues, Access to Finance, Urban Planning and Real Estate Regulatory Authority (RERA), and a Growth Framework for Housing. These groups have been tasked with presenting well-researched and practical solutions to overcome the sectorâ€™s challenges. During the meeting, a comprehensive presentation outlined critical issues plaguing the housing sector, including a 12-million-unit housing deficit, urban sprawl, inadequate urban planning, and insufficient private sector engagement. High taxation on property transactions, complex tax procedures, and overvalued property assessments were highlighted as significant barriers, along with low mortgage penetration and high interest rates on housing loans. The task force discussed potential solutions, including introducing fixed-term low-cost housing subsidies and advocating for single-digit policy rates to facilitate affordable financing for lower-income groups. Members proposed innovative mortgage solutions such as incremental housing microfinancing, digital financing platforms, and stronger foreclosure laws to mitigate risks. Taxation issues were a focal point, with the task force recommending the revision of taxes like under Sections 236C and 236K of Income Tax Ordinance, 2001, Federal Excise Duty, and stamp duty to stimulate real estate activity while ensuring affordability for low- and middle-income groups. The establishment of RERA under a proposed RERA Act and a review of city master plans by regional development authorities were also emphasized. Additionally, incentivizing vertical expansion, removing barriers to public-private partnerships, and creating high-density zones to preserve agricultural land were discussed. The chair lauded the task forceâ€™s efforts, emphasizing the housing sectorâ€™s potential as an economic driver. He vowed to deliver a comprehensive report with quantifiable, short-, medium-, and long-term measures to foster growth in the sector.

Date: 2025-01-27

Details: Karachi, January 27, 2025 â€“ The Federal Board of Revenue (FBR) has unveiled the detailed mechanism for the adjustment of input and output tax under the sales tax laws applicable for the tax year 2025. This mechanism, as outlined in Rule 22 of the Sales Tax Rules, 2006, provides clear guidelines to ensure proper compliance. According to the FBR, the adjustment process addresses situations involving cancelled or returned supplies, changes in tax amounts, and specific conditions where credit or debit notes are issued. Key Points of the Mechanism for Adjustment: 1. Claiming Input Tax: Buyers cannot claim input tax for supplies that have been cancelled, returned, or where the tax amount has been reduced. 2. Adjustments via Credit or Debit Notes: If a buyer has already claimed input tax for such supplies, they must adjust it accordingly. This means either reducing or increasing the input tax by the amount mentioned in the debit or credit note in the tax return for the relevant period. 3. Supplierâ€™s Responsibility: Tax filing services If a supplier has already reported output tax on a transaction and later issues a debit note, they are required to adjust the output tax in the same way. This adjustment should be reflected in the tax return for the period in which the debit note was issued. 4. Timeframe for Adjustments: Any adjustments resulting in reduced output tax or increased input tax must be based on credit or debit notes issued within 180 days of the transaction. However, the FBR has allowed flexibility, as the Collector may extend this period by another 180 days under specific circumstances. 5. Special Cases for Perishable Items: For manufacturers dealing with perishable food items, if goods are returned due to expiration and subsequently destroyed, credit notes must be issued within 15 days of their return to qualify for tax adjustment. 6. Resupply of Goods: If returned or cancelled goods are resupplied, either to the original buyer or another party, the supplier must charge and account for sales tax on the new transaction in the usual way. The FBRâ€™s clear emphasis on adjustments aims to simplify tax compliance and minimize errors in tax reporting. By introducing these guidelines, the FBR seeks to ensure transparency and proper reconciliation of taxes for both buyers and suppliers. These rules further highlight the importance of issuing debit or credit notes promptly and adhering to specified timelines to benefit from tax adjustments.

Date: 2025-01-27

Details: Islamabad, January 27, 2025 â€“ The Federal Board of Revenue (FBR) has initiated a comprehensive process to compile a list of Inland Revenue (IR) officials who hold dual nationality, including the details of their spouses. This directive has been issued in response to the instructions of the Senate Standing Committee on Cabinet. The FBR has asked all Director Generals and Chief Commissioners of IR to submit the requested data in a specific format within the next week. In the formal communication, the FBR outlined the requirements for compiling the list. It emphasized that each officer and staff member with dual nationality must be identified, with comprehensive details provided. The information should include the name, designation, date of initial entry into government service, the name of the foreign country whose nationality is held, and whether the nationality was obtained by birth or later in life. Additionally, if the dual nationality was acquired after birth, the date of acquisition must be recorded. The FBR has made it clear that this data should be submitted even if the list is empty, underscoring the urgency of the request. Moreover, the FBR has requested a separate list detailing the spouses of officers and staff members who hold dual nationality. This list must include the spouseâ€™s name, designation, employment status (whether in the public or private sector or a homemaker), and details about the nationality held by the spouse. Just like the officers, the nationalityâ€™s origin (whether by birth or otherwise) and the date of acquisition should also be included if applicable. The FBR has specified that this data should be countersigned by each Chief Commissioner and Director General before being forwarded. The deadline for submission is one week from the date of the directive, which aims to ensure that the FBR has a complete and up-to-date record of officials and their families holding dual nationality. The FBRâ€™s request for this detailed data reflects its ongoing efforts to streamline the operations of Inland Revenue and ensure transparency. The move also follows concerns raised by the Senate Standing Committee regarding the potential implications of dual nationality on the governance and functioning of government bodies. By gathering this information, the FBR intends to review and manage the eligibility and conduct of IR officials, with a focus on safeguarding the integrity of public service.

Date: 2025-01-27

Details: Karachi, January 27, 2025 â€“ The Federal Board of Revenue (FBR) has announced updated withholding tax rates for property transactions applicable during the tax year 2025. These changes aim to streamline tax collection on real estate transactions and encourage compliance among taxpayers. The FBR issued the revised tax rates under Sections 236C and 236K of the Income Tax Ordinance, 2001. Section 236C applies to the sale of immovable property, while Section 236K pertains to the purchase of such assets. The updated rates emphasize the distinction between active taxpayers, late filers, and those not on the Active Taxpayers List (ATL). Updated Tax Rates for Sale of Property (Section 236C) The FBR has categorized transactions based on the value of the property: â€¢ For properties valued at or below Rs. 50 million, active taxpayers will pay 3%, late filers 6%, and those not on the ATL 10%. â€¢ Properties valued between Rs. 50 million and Rs. 100 million will attract a 3.5% tax rate for active taxpayers, 7% for late filers, and 10% for non-ATL individuals. â€¢ For properties exceeding Rs. 100 million, the rates increase to 4% for ATL individuals, 8% for late filers, and 10% for non-ATL parties. Duty-free shopping Advance Tax on Purchase of Property (Section 236K) Similarly, the FBR has revised the advance tax rates for property purchases based on fair market value: â€¢ Properties valued at or below Rs. 50 million will incur 3% for ATL taxpayers, 6% for late filers, and 13% for non-ATL individuals. â€¢ For properties worth between Rs. 50 million and Rs. 100 million, the rates are set at 3.5%, 7%, and 16% respectively. â€¢ Transactions involving properties exceeding Rs. 100 million will be taxed at 4% for ATL taxpayers, 8% for late filers, and 20% for non-ATL parties. The FBRâ€™s revisions reflect its commitment to enhancing revenue collection while incentivizing individuals to maintain active taxpayer status. By imposing higher rates on non-ATL individuals and late filers, the FBR aims to promote compliance and discourage tax evasion. These adjustments are expected to have a significant impact on the real estate sector. Taxpayers are advised to review the FBRâ€™s latest withholding tax card and ensure compliance with the updated regulations for seamless property transactions in 2025.

Date: 2025-01-26

Details: The Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial on Sunday reaffirmed determination to purchase 1,010 cars for tax officers, saying the decision would help achieve the set tax collection target for the current fiscal year 2024-25. The development came after the Senate Standing Committee on Finance and Revenue raised objections on the FBRâ€™s decision to purchase new vehicles. Senator Faisal Vawda called for an immediate halt to the purchase, arguing that the FBR officers were being rewarded with vehicles despite a significant tax shortfall. â€œThis is open corruption, and we will not sit idly by,â€ Senator Vawda asserted, accusing the FBR of misusing government funds during the Senate committee meeting earlier this week. However, on Sunday, FBR chief defended the decision, saying new cars were required for tax officers to go into the fields to collect revenue in taxes. â€œWe will buy the cars. This is the Cabinet decision,â€ Langrial said while talking to the media on the sidelines of the International Customs Day 2025 organised by the Collector of Customs Enforcement in Karachi. He claimed that the Senate Standing Committee raised objections on the procedure, but not on purchase of the cars. â€œWe will get the procedure reviewed.â€ Langrial further said the reservations and objections raised by the Senate Standing Committee â€œwill be answered clearly and loudâ€¦in a humble way and with all due respectâ€. He reiterated that the vehicles were required for the officers for field operations. â€œThey are young people (officers). How would they collect sales tax (without availability of proper transportation)? Sales tax cannot be collected until you do site visits,â€ Langrial said. Responding to a question, the FBR chief maintained that the tax collection body would achieve its set target for FY25. FBR has been tasked to collect Rs12.9 trillion in the current fiscal year. However, the tax body remained short of Rs386 billion during the first six months (Jul-Dec) of FY25 against the assigned target of Rs6,009 billion for the said period. Meanwhile, Langrial apprised that the FBR received bids to reinstall the live tracking system on both â€“ vehicles transporting containers and on containers as well â€“ to make the goods transportation system strengthened, transparent, and more secure. The vehicles move containerised cagro to factories and to Afghanistan from Pakistanâ€™s ports. Earlier this month, a media report stated that the government had temporarily halted satellite tracking of containers carrying imported goods to Afghanistan from seaports and instead begun monitoring them through human surveillance, a move that may â€œincrease the chances of smugglingâ€. PBC raises concerns on reported termination of satellite tracking of Afghan cargo FBR chairman on Sunday said the live tracking system on vehicles and containers â€œhas not been ended, but is being improvedâ€. â€œDG will announce names of the new applicants most probably this week. Tracking sensors will be installed on both the vehicles and on the containers. The new tracking system will be in place within two to three months,â€ Langrial said. The ongoing partial manual system to monitor transportation of containerised cargo â€œis fully satisfiedâ€, according to the FBR chief. The contract with the previous tracking company was ended after several years â€œto break its monopolyâ€, he added. Responding to another question, Langrial termed Karachi the commercial capital, adding that the port city would continue to take lead in tax collection for having presence of the head offices of many large businesses. Regarding the house sector, the FBR chief informed that Prime Minister Shehbaz Sharif constituted a task force for the sector. The main issue in the housing sector is the higher transaction taxes, according to Langrial. â€œWe are doing a review on the subject these days,â€ the FBR chairman said.

Date: 2025-01-26

Details: ISLAMABAD: The Islamabad High Court (IHC) has issued notice to an anchorperson in an alleged income tax evasion case. The IHC has issued an order (I.T.R No.06 of 2025) Commissioner Inland Revenue Vs anchorperson. The Federal Board of Revenue (FBR) has filed an income tax reference application challenging the Appellate Tribunal Inland Revenueâ€™s decision to annul an assessment order against the female anchorperson. The FBR contends that she misclassified her income under the Final Tax Regime (FTR) instead of the Minimum Tax Regime (MTR), thereby evading her actual tax liability. According to the FBR, the anchorperson declared receipts amounting to Rs 33.34 million in her tax return for the tax year 2017 and claimed tax deductions at 10% under the FTR. However, through an assessment order dated 05.06.2023, the Additional Commissioner Inland Revenue reclassified the receipts under the MTR, raising a tax demand of Rs 7.53 million. This assessment order was upheld by the Commissioner Inland Revenue (Appeals) on 11.12.2023. However, the Appellate Tribunal Inland Revenue (ATIR) overturned both orders on 31.10.2024, concluding that the receipts could not be treated as income for tax purposes and annulling the tax demand. Advocate Osama Shahid pleaded the FBRâ€™s case before a division bench of the IHC, comprising Chief Justice Aamer Farooq and Justice Inaam Ameen Minhas. He argued that the ATIR failed to consider key aspects of the case. Specifically, the FBRâ€™s counsel asserted that her wealth statement showed that she had incurred no business expense, and therefore, the assessment order issued by the Additional Commissioner was lawful. Further, the counsel submitted that the deemed assessment order was rightly amended under Section 122(5A) of the Income Tax Ordinance, 2001, as it was erroneous and prejudicial to revenue. After hearing the submissions on 21.01.2025, the IHC framed three questions of law for determination. The court has issued notices to anchorperson, seeking her response to the FBRâ€™s allegations. Learned counsel for the applicant (FBR) inter alia contends that respondent No.1 (anchorperson) is a service provider and on receipt of the consideration for the services the certain amount is to be deducted as withholding tax under section 153(1)(b) of Income Tax Ordinance, 2001. Learned counsel contended that for the tax year 2017 taxpayer filed the return wherein the receipts from the services provided was treated as income and as a final tax liability. It was contended that show cause notice was issued on 20.04.2023, which culminated in order-in-original and appeal filed there against was decided on 11.12.2023, which sustained the order-in-original. Copyright Business Recorder, 2025

Date: 2025-01-26

Details: Karachi, January 26, 2025 â€“ Chairman of the Federal Board of Revenue (FBR), Rashid Mahmood Langrial, highlighted the overwhelming support from Karachiâ€™s trading community for the newly introduced Faceless Customs Assessment (FCA) system. Speaking at a grand ceremony commemorating International Customs Day 2025 at the Customs House Karachi, Langrial emphasized the transformative role of the FCA system in modernizing trade processes and bolstering revenue generation. â€œThe business community in Karachi has expressed immense confidence in the Faceless Customs Assessment system introduced by Pakistan Customs,â€ Langrial remarked. He underscored the FBRâ€™s commitment to fostering transparency, efficiency, and convenience in trade practices through innovative mechanisms such as the Pakistan Single Window (PSW) and FCA systems. These measures, he noted, have significantly expedited the clearance of export goods, enhanced revenue collection, and streamlined trade processes to unprecedented levels of efficiency. Delivering the keynote address as the chief guest, Langrial also emphasized the importance of the 2025 World Customs Organization (WCO) theme, â€œCustoms Delivering on its Commitment to Efficiency, Security, and Prosperity.â€ He noted that this theme resonates deeply with Pakistan Customsâ€™ vision of evolving into a forward-thinking and dynamic institution equipped to meet the demands of a globalized economy. As part of the ceremony, the Chairman FBR hoisted the national flag, laid a wreath at the Martyrsâ€™ Monument, and offered Fateha in memory of the customs officials who sacrificed their lives in the line of duty. Collector Customs Enforcement Karachi, Moinuddin Wani, expressed gratitude to Langrial, Member Customs Operation Junaid Jalil, and other distinguished attendees for their presence. He lauded Pakistan Customsâ€™ ongoing efforts to combat smuggling, stabilize the economy, and promote business facilitation across the country. In his closing remarks, Member Customs Operation Junaid Jalil reaffirmed Pakistan Customsâ€™ commitment to combating illicit trade and facilitating economic stability. He commended customs officials for their pivotal role in supporting the nationâ€™s economic framework and expressed confidence in their continued dedication to excellence. The event also featured the distribution of certificates of appreciation by Langrial to outstanding customs officers in recognition of their exceptional performance. The ceremony, a highlight of International Customs Day celebrations, witnessed the attendance of dignitaries including the Consul Generals of Oman, Indonesia, Kuwait, representatives from Russia and the UAE, senior customs officials, law enforcement representatives, and prominent business figures. The occasion underscored the critical role of Pakistan Customs in fostering trade and economic prosperity.

Date: 2025-01-26

Details: The Federal Board of Revenue (FBR) has reaffirmed its contentious decision to procure 1,010 Honda vehicles for its officers, sparking intense criticism from the Senate Standing Committee on Finance. Allegations of corruption and mismanagement have overshadowed the announcement, as lawmakers question the rationale behind this significant expenditure during a period of fiscal challenges. Chairman Rashid Mahmood Langrial defended the move on Sunday, asserting that the new vehicles are essential for field operations aimed at achieving the ambitious tax collection target of Rs12.9 trillion for the fiscal year 2024-25. Speaking at an event marking International Customs Day in Karachi, Langrial maintained, â€œThe cars are indispensable for enabling officers in BS-17 and BS-18 to conduct site visits and collect sales tax effectively. This is a Cabinet-approved decision, and we are determined to implement it.â€ The controversy erupted after the Senate Standing Committee, led by Senator Faisal Vawda, criticized the purchase, labeling it as a misuse of public funds amidst a significant tax revenue shortfall. The FBR fell Rs386 billion short of its Rs6,009 billion target during the first half of FY25. Senator Vawda argued, â€œThis blatant misuse of taxpayer money cannot be tolerated. Rewarding officials with cars while failing to meet revenue targets is nothing short of open corruption.â€ Langrial, however, dismissed these allegations, emphasizing that objections raised by the Senate were procedural rather than substantive. â€œWe will review the procurement procedure to address concerns, but the necessity of these vehicles remains unquestionable,â€ he said, adding that the FBR is committed to addressing the committeeâ€™s reservations â€œwith all due respect.â€ In a related development, Langrial provided updates on the FBRâ€™s efforts to strengthen the live tracking system for containerized cargo. He clarified that the system, aimed at enhancing transparency and security in goods transportation, is being upgraded rather than discontinued. â€œNew tracking sensors will be installed on both vehicles and containers within two to three months. This will address vulnerabilities and minimize the risk of smuggling,â€ he stated. The previous tracking contract was terminated to dismantle monopolistic practices. Langrial also acknowledged concerns over high transaction taxes in the housing sector, revealing that Prime Minister Shehbaz Sharif has formed a task force to address the issue. He reiterated Karachiâ€™s pivotal role as the commercial hub, attributing its leadership in tax collection to the presence of major corporate head offices. As the FBR navigates criticism and operational challenges, its determination to balance fiscal accountability with ambitious revenue goals remains a topic of national debate.

Date: 2025-01-26

Details: Karachi, January 26, 2025 â€“ The Federal Board of Revenue (FBR) has directed its field tax offices, including Large Taxpayers Offices (LTOs) and Regional Tax Offices (RTOs), to adopt a standardized approach for the suspension and blacklisting of sales tax registered persons. These directives aim to ensure uniformity in compliance with Rule 12 of the Sales Tax Rules, 2006, and Section 21(2) of the Sales Tax Act, 1969. The FBR emphasized that the suspension of a registered personâ€™s status may occur if there is evidence of tax fraud, issuance of fake invoices, or other violations. Key indicators include non-availability at the declared address, refusal to allow access to business premises, submission of abnormal tax profiles, or transactions with blacklisted entities. The Commissioner may suspend such registration without prior notice pending further investigation, issuing a written order that must be shared with the concerned person and other relevant offices, including the FBRâ€™s computer systems. According to the FBR, registered persons who fail to file sales tax returns for six consecutive months will face automatic suspension without prior notification. In cases where a suspended person has dealings with buyers or suppliers under another jurisdiction, the concerned Commissioner must inform the Chief Commissioner of the respective LTO or RTO to initiate appropriate proceedings against these associated entities. The FBR also clarified that during the period of suspension, the suspended entity is not entitled to claim input tax adjustments or refunds. Additionally, other registered persons cannot claim refunds or input tax adjustments on the basis of invoices issued by the suspended party, irrespective of whether the invoices were issued before or after the suspension. Duty-free shopping If no show-cause notice is issued to the suspended person within seven days of suspension, the suspension order becomes void. However, if a notice is issued, the registered person is given 15 days to respond and present records. Based on this response and any hearing provided, the Commissioner may either revoke the suspension or proceed with blacklisting the individual. In cases of blacklisting, the FBR mandates that the Commissioner issue a detailed, appealable order specifying the reasons and consequences of blacklisting. This includes the inadmissibility of refunds or input tax claims made by the blacklisted entity or its associated parties, as well as any recoveries or penalties to be imposed. Such orders must be issued within 90 days of the notice, failing which the suspension becomes void. The FBR further instructed all LTOs and RTOs to circulate updated blacklists, along with related invoices, to all concerned sections to ensure proper implementation. Inland Revenue officers must also take action against any registered persons claiming input tax or refunds based on blacklisted invoices by issuing show-cause notices and passing orders accordingly. These guidelines reflect the FBRâ€™s commitment to strengthening tax compliance and addressing fraudulent practices while ensuring transparency and consistency across its operations.

Date: 2025-01-25

Details: The Revenue Division has proposed a one-time dispensation from the policy requiring the abolition of 60% of vacant posts in its field formations, amid challenges from the Federal Board of Revenue (FBR). The development came during a meeting of the Cabinet Committee on Rightsizing of the Federal Government on Friday. According to a statement released by the Finance Division, the meeting, chaired virtually by Finance Minister Muhammad Aurangzeb, featured detailed presentations from both the Revenue Division and the Ministry of Poverty Alleviation & Social Safety regarding their mandates, organizational structures, budget allocations, expenditures, and the impact of their work on public services. The presentation by the Revenue Division highlighted key aspects of the Federal Board of Revenue (FBR) transformation plan, focusing on initiatives designed to modernize the Customs Department. To undergo rightsizing panel review: ECC directs ministry to submit EOBI business plan As per the statement, the transformation plan, approved by the Prime Minister on September 19, 2024, aims to improve operations, including automation and technology integration, such as the Faceless Customs Assessment and Examination. The committee was briefed on steps taken by the Revenue Division to streamline operations, including the abolition of 158 posts (BS-18 and below) and the designation of 27 posts (BS-16 to 20) as â€œdying postsâ€ as part of the cabinet decision on August 27, 2024. â€œIn response to challenges faced by the FBR, the Revenue Division proposed a one-time dispensation from the requirement to abolish 60% of vacant posts within its field formations,â€ read the statement. The finance minister acknowledged the challenges the FBR had faced due to under-investment over the years and reiterated the importance of embracing technological advancements, including the implementation of automation systems, to improve efficiency and service delivery. Meanwhile, the Ministry of Poverty Alleviation & Social Safety also presented its work. Aurangzeb remarked that while much progress had been made, the fragmented approach to various departmental verticals had hindered scaling up the impact on public policy outcomes and public service delivery. 5 more ministries to be examined for rightsizing The federal minister emphasized the need for a more integrated approach. According to the statement, Aurangzeb tasked the sub-committee of the Rightsizing Committee with conducting a thorough review of both the Revenue Division and the Ministry of Poverty Alleviation & Social Safety to assess the structure, functions, and efficiencies of federal government organs. The sub-committee will engage with both entities to identify opportunities for improved public service outcomes in line with the committeeâ€™s mandate, the statement added.

Date: 2025-01-25

Details: In a new initiative, the Internal Revenue Service (IRS) has announced that nearly one million taxpayers will receive stimulus payments of up to $1,400 each. These payments are aimed at individuals who missed out on claiming the Recovery Rebate Credit (RRC) during the 2021 tax season. The IRS introduced this effort to ensure that eligible taxpayers, who may have overlooked or failed to claim the credit, receive the financial relief they were entitled to during the COVID-19 pandemic. The total value of these payments is expected to reach approximately $2.4 billion, providing much-needed support to those who experienced financial hardship during the pandemic. The payments will be issued automatically, meaning eligible individuals do not need to take any further action. Taxpayers will receive the funds either through direct deposit into their bank accounts, as per the details the IRS has on file, or as paper checks sent to the mailing addresses registered with the IRS. Purpose of the Stimulus Payments The stimulus payments being sent out by the IRS are a response to the fact that many individuals who were eligible for Economic Impact Payments (EIPs) did not claim the Recovery Rebate Credit when they filed their 2021 tax returns. The Recovery Rebate Credit was designed to allow taxpayers to claim any missed stimulus payments that they were eligible for during the pandemic. However, some individuals either left the credit section of their tax forms blank or filled it out incorrectly, often because they were unsure of their eligibility or did not fully understand how to claim it. As a result, the IRS is issuing these automatic payments to ensure that no one misses out on the assistance they qualify for. The initiative aims to correct these oversights and provide those who missed out on financial relief with the funds they are owed. Eligibility for the Payments To qualify for the stimulus payments, individuals must meet several key criteria: 1. Filed a 2021 Tax Return: To be eligible, a taxpayer must have filed a tax return for the 2021 tax year. This return serves as the basis for determining whether the person missed claiming the Recovery Rebate Credit. 2. Missed Claiming the Recovery Rebate Credit: The IRS is targeting taxpayers who made two common mistakes when filing their 2021 taxes: o They left the section for the Recovery Rebate Credit blank. o They incorrectly filled out the section by claiming $0 despite being eligible for a credit. 3. Eligible for Economic Impact Payments: The special payments are for individuals who were eligible for at least one of the three rounds of Economic Impact Payments issued during the pandemic. If they missed claiming these payments or received less than what they were entitled to, they may be eligible for this correction payment. How Much Will You Receive? The amount of the stimulus payment will vary based on individual circumstances, including the amount of previous Economic Impact Payments received and the taxpayerâ€™s income, filing status, and number of dependents. The maximum payment is $1,400 per person, but some families may receive much more. For example: â€¢ A single taxpayer who did not receive any of the earlier stimulus payments may be eligible for the full $1,400. â€¢ A family of four (two parents and two children) who missed claiming their credits could potentially receive up to $5,600 ($1,400 per family member). Delivery Methods and Timeline The IRS will send the stimulus payments through automated processes. Eligible taxpayers will not need to submit any additional forms or requests. The payments will be delivered in two main ways: â€¢ Direct Deposit: For those with a bank account linked to their most recent tax return, the payment will be automatically deposited into the account. â€¢ Paper Checks: If the IRS does not have a bank account on file, paper checks will be sent to the taxpayerâ€™s registered mailing address. Taxpayers can expect to receive their payments by late January 2025. To ensure there are no delays, itâ€™s important for taxpayers to verify that their mailing address and bank account details are up to date with the IRS. What Should You Do If Youâ€™re Eligible? If you believe you may be eligible for the special payments, here are the steps you should take: 1. Verify Your 2021 Tax Return: Check to see if you left the Recovery Rebate Credit field blank or made an error when filing your 2021 tax return. 2. File Your Tax Return: If you havenâ€™t filed your 2021 return yet, make sure to submit it before the April 15, 2025 deadline. Doing so will allow you to claim the credit. 3. Update Your Information: Ensure your mailing address and bank account details are correct in the IRS system to avoid any delays in receiving your payment. Havenâ€™t Filed Your 2021 Tax Return Yet? If you have not yet filed your 2021 tax return, you still have the opportunity to claim the Recovery Rebate Credit and potentially receive the $1,400 payment. The IRS has set an extended deadline of April 15, 2025, for filing these returns. Even individuals with little or no income during 2021 may still qualify for the credit by simply filing a return. Taxpayers who believe they are eligible should file their 2021 tax return as soon as possible to take advantage of this opportunity. With potential payments of up to $1,400 per person, it is a vital opportunity for many to receive financial relief they might have missed during the pandemic.

Date: 2025-01-25

Details: In December 2024, Pakistan witnessed a staggering Rs 862 billion in bank withdrawals, highlighting a rising wave of uncertainty among account holders. The outflow comes at a time when the government is poised to introduce stricter tax regulations aimed at targeting non-filers of income tax returns. This unprecedented withdrawal not only underscores the trepidation gripping the public but also raises alarm about the broader implications for the banking sector and the countryâ€™s economic outlook. According to data from the State Bank of Pakistan (SBP), total bank deposits in Pakistan saw a notable decline of 2.77%, dropping from Rs 31.145 trillion in November 2024 to Rs 30.283 trillion by the end of December. This fall is indicative of a growing sense of financial caution among individuals and entities who fear being swept up in the governmentâ€™s tax net. While a year-on-year comparison shows an 8.78% increase in deposits, the sharp month-on-month drop highlights an immediate loss of confidence as taxpayers brace for the governmentâ€™s crackdown on non-filers. The crux of the panic lies in the governmentâ€™s newly introduced tax measures. On December 18, 2024, a bill was presented in the National Assembly that proposes severe restrictions on individuals with taxable income who have yet to file their tax returns. These measures, particularly the proposed addition of Section 114C to the Income Tax Ordinance of 2001, aim to curtail various transactions for non-filers, including the purchase of motor vehicles, the registration of immovable properties above specified values, and opening bank accounts. For those with sizable accounts, the ability to withdraw cash exceeding certain limits would also be curtailed, further straining trust in the financial system. One of the primary drivers of this financial unease is the perception that these measures will severely restrict day-to-day financial activities for a significant portion of the population. Given that motor vehicles and property transactions often constitute major life milestones, non-filers are likely to feel the brunt of the restrictions in a way that disrupts their routine. For many, these measures signal a new phase of intrusive tax enforcement that could limit their financial autonomy. While the governmentâ€™s intention is clear â€“ to broaden the tax net and bring more people into the formal economy â€“ the fear of overreach has caused many to consider pulling their funds from the banking system. In addition to these policy changes, the recent cuts in the SBPâ€™s benchmark interest rate from 22% to 13% have added to the unease. Lower profit rates for depositors, particularly in a time of economic instability, leave many questioning the utility of keeping funds in the bank. With inflation still high and returns on savings weakening, many are opting to withdraw their money in anticipation of both the tax restrictions and the diminishing appeal of traditional savings accounts. Despite these withdrawals, the banking sector as a whole remains relatively stable, with deposits increasing by 8.78% year-on-year in December 2024 compared to the previous year. However, the massive outflows in December 2024 signify a critical inflection point, one that will require the financial sector to adapt quickly to shifting depositor behavior. Banks must now prepare for the long-term consequences of these policy changes, not just in terms of reduced deposits but also in terms of customer trust and confidence. As the Federal Board of Revenue (FBR) finalizes its proposed restrictions, the governmentâ€™s ability to strike a balance between increasing tax compliance and maintaining a stable financial system will be tested. The ripple effects of this decision will not only shape Pakistanâ€™s economic outlook for 2025 but could also define the relationship between citizens and the stateâ€™s economic policies for years to come.

Date: 2025-01-25

Details: Karachi, January 25, 2025 â€“ The Federal Board of Revenue (FBR) has officially deactivated the mandatory affidavit requirement for filing sales tax returns, a move aimed at simplifying compliance for businesses. The FBR submitted a formal statement to the Sindh High Court (SHC), requesting the disposal of ongoing petitions challenging this requirement. According to the FBR, the affidavit mandate, previously enforced for monthly sales tax returns by Chief Financial Officers (CFOs), has been rescinded in compliance with the SHCâ€™s order dated November 1, 2024. Consequently, the previous verification process at the time of filing sales tax returns has been reinstated. The FBR emphasized that this decision resolves the grievances raised by the petitioners, further urging the court to conclude the matter. This development comes after months of deliberation and criticism surrounding the affidavit requirement, which had placed additional responsibility on CFOs. In October 2024, the FBR had introduced the affidavit obligation as part of its strategy to curb the widespread issue of fake and flying invoices. These fraudulent practices have contributed significantly to Pakistanâ€™s staggering tax gap of Rs. 3.4 trillion. The FBRâ€™s initiative sought to hold CFOs accountable for ensuring the authenticity and accuracy of their companiesâ€™ sales tax returns. An internal directive issued by FBR Chairman Rashid Mehmood explicitly warned CFOs against approving fraudulent invoices. The Chairman declared that the FBR would not hesitate to pursue criminal proceedings against CFOs found complicit in filing falsified sales tax returns. â€œWe will take strict legal action against CFOs involved in endorsing fraudulent tax filings,â€ he asserted. Under the previous guidelines, CFOs were required to submit affidavits affirming the accuracy of their companiesâ€™ sales tax filings. These affidavits needed to verify that: â€¢ Declared turnover and supply values were reported accurately. â€¢ No fake or flying invoices were incorporated by vendors or supply chain entities. â€¢ All invoices corresponded to taxable supplies as outlined in annexures. â€¢ No fictitious figures were entered into the returns or annexures. The FBRâ€™s decision to remove the affidavit requirement reflects its responsiveness to industry concerns while maintaining its commitment to addressing tax fraud. This step is expected to ease compliance burdens and foster a more collaborative relationship between the FBR and taxpayers.

Date: 2025-01-25

Details: Karachi, January 25, 2025 â€“ The Federal Board of Revenue (FBR) has announced a streamlined procedure for modifying sales tax registration details under Rule 7 of the Sales Tax Rules, 2006. Businesses can now easily update their registration information to ensure compliance and avoid any potential legal complications. According to Rule 7, titled â€œChange in the Particulars of Registration,â€ the process involves notifying the FBR about changes in sales tax registration details. The procedure covers various aspects, such as updates to the name, address, or other critical particulars stated on the registration certificate. The key steps include: 1. Notification of Changes: If there is any change in the registered name, address, or other particulars, the registered person must inform the FBR using Form STR-1. This notification should be made through the computerized system within 14 days of the change to avoid penalties or delays. 2. Change of Business Category: For businesses seeking to modify their category to â€œmanufacturer,â€ additional requirements specified in Rule 5 must be met. These criteria ensure that the category change aligns with applicable regulations for sales tax registration. Tax filing services Online business courses 3. Issuance of Revised Certificate: Once the requested changes are approved, a revised sales tax registration certificate will be issued through the computerized system. The updated certificate will reflect the changes and will be effective from the date the application was submitted. 4. Commissionerâ€™s Authority: The Commissioner retains the authority to modify a personâ€™s registration details. This can be based on available information or after conducting necessary inquiries. The Commissioner must provide the concerned individual a reasonable opportunity to be heard before finalizing any modifications through a written order. The FBR emphasized that adherence to the sales tax registration guidelines is essential for businesses to maintain compliance. Timely registration updates not only reduce operational hurdles but also ensure businesses remain in good standing with tax authorities. For businesses, understanding the procedure for updating sales tax registration details is vital to keeping their records accurate and reflective of current operations. The FBRâ€™s transparent and automated approach is a step toward facilitating smoother processes for taxpayers across Pakistan.

Date: 2025-01-24

Details: ISLAMABAD: The Appellate Tribunal Inland Revenue (ATIR) has explained a structured procedure for conducting audits by Inland Revenue officials under sections 177 and 214C of the Income Tax Ordinance, 2001. This important judgement has been issued by a two-member bench of ATIR, Division Bench-I. Let this order be sent to Member (Operation) and Member(Legal) Federal Board of Revenue (FBR) for the purposes of issuing instructions to all assessing officers to ensure compliance with the aforementioned legal provisions, procedures, directions, and their mandatory nature. They should also be apprised of the serious consequences that will follow for any officers who fail to strictly adhere to these provisions and procedures, the ATIR order added. A tax expert explained the ATIR judgement that the process includes issuing intimation letters, reviewing records, addressing discrepancies with taxpayers, and preparing a comprehensive audit report. The judgment underscores the legal basis for actions such as best judgment assessments under Section 177(10) read with Section 121 when taxpayers fail to provide the required records. Additionally, it critiques deficiencies in a specific audit report, stressing the importance of a clear structure, detailed findings, proper legal references, taxpayer acknowledgment, and adherence to procedural requirements to ensure transparency, fairness, and enforceability. The ATIR order stated that the titled appeal was transferred by the learned Commissioner of Inland Revenue (Appeals-I), Islamabad, on September 18, 2024, under Section 126A(4) of the Income Tax Ordinance, 2001, as the assessed tax value in this case exceeds 20 million rupees. Consequently, this tribunal is now tasked with deciding the appeal. The appellant contests the impugned order dated February 29, 2024, issued by the assistant commissioner of Inland Revenue, Unit-AEIO-2, Range-AEOI, LTO, Islamabad for the tax year 2018, based on the grounds detailed in the memo of appeal. The ATIR order stated that we have carefully considered the arguments presented by the representatives of both sides and thoroughly reviewed the available records. The core legal issue in the present appeal pertains to the interpretation of Section 177 of the ordinance. Specifically, the question is whether, after the production of records and related documents, the conduct of an audit, issuance of an audit report upon the conclusion of audit proceedings, and seeking explanations from the taxpayer on all issues raised during the audit are prerequisites for the Assessing Officer to assume jurisdiction under Section122 of the ordinance. To ensure compliance with the above provisions of the Ordinance and to properly conduct an audit, the assessing officer should follow a structured and legally-compliant process. The ATIR has explained steps in sequence for conducting an audit either selecting the case of the taxpayer under Section 177 or 214C of the ordinance, followed by the necessary steps for completing the audit proceedings. The ATIR now address the objection raised by the learned AR for the appellant concerning the so-called audit report issued under Section 177(6) read with Section 177(10) of the ordinance. This report was communicated via bar-coded notice and is incorporated on impugned order dated February 29, 2024. The audit report exhibits substantial issues in both its substance and structure, which may undermine its validity and its compliance with the principles of transparency, fairness, and procedural integrity. A detailed analysis of the deficiencies in the report is provided, the ATIR stated. The ATIR found that the addition of Rs98,103,385 as un-reconciled credit entries is not supported by factual evidence and contains significant computational errors. Based on the detailed review and the documentary evidence provided, the purported un-reconciled amount is incorrectly assessed and should be excluded from the appellantâ€™s taxable income. Consequently, the addition to this account is hereby deleted. In light of the said discussion, the impugned order passed by the assessing officer is legally untenable and is therefore annulled, the ATIR order added. Copyright Business Recorder, 2025

Date: 2025-01-23

Details: Karachi, January 23, 2025 â€“ The Pakistan Tax Bar Association (PTBA) has voiced profound apprehension over the rejection of security clearances for foreign investors. The association has formally reached out to Syed Mohsin Raza Naqvi, Federal Minister for Interior, highlighting the challenges these decisions pose to the countryâ€™s investment landscape. With its presence in 32 cities nationwide and a diverse membership base of 12,500 professionalsâ€”including chartered accountants, lawyers, and tax practitionersâ€”the PTBA is a key stakeholder in Pakistanâ€™s fiscal ecosystem. The current Executive Committee of PTBA, assuming office this year, has pledged to facilitate both foreign and domestic investors in compliance matters, tax remittance processes, and registration formalities. A critical issue raised by the PTBA concerns the rejection of security clearance for foreign investors, particularly those establishing 100% foreign equity companies under the Companies Regulations, 2024. Per these regulations, foreign directors and subscribers must obtain security clearance by submitting GR-Performa, undertakings, and other necessary documentation via the Securities and Exchange Commission of Pakistan (SECP) to the Ministry of Interior. Despite fulfilling these formalities, numerous companies have recently been receiving abrupt rejection notices from the SECP. These notices, devoid of explanations or reasons for the denial, leave investors in a state of uncertainty. Moreover, they fail to provide any opportunity for the affected parties to address discrepancies or clarify defects in their submissions. This lack of transparency has triggered alarm among foreign investors who, after initiating substantial investments and operational activities in Pakistan, find their efforts derailed without recourse. The PTBA warns that such unilateral rejections send a detrimental message to international stakeholders and contradict the governmentâ€™s stated objective of fostering foreign direct investment. The association emphasizes that these actions jeopardize entire business setups and erode investor confidence, which could severely undermine Pakistanâ€™s ability to attract foreign capital. In its correspondence, the PTBA has urged the interior minister to intervene promptly and establish a transparent and fair process for granting security clearances. Addressing this pressing issue, the PTBA asserts, is vital to preserving Pakistanâ€™s investment climate and sustaining the trust of foreign entities willing to contribute to the nationâ€™s economic progress.

Date: 2025-01-23

Details: Karachi, January 23, 2025 â€“ Banks in Pakistan experienced a massive withdrawal of Rs 862 billion during December 2024 as the government prepared to impose stringent restrictions on non-filers of income tax returns. This significant outflow highlights the uncertainty and apprehension among account holders in response to impending policy changes. According to data released by the State Bank of Pakistan (SBP), total deposits held by banks declined by 2.77% during the month, falling from Rs 31.145 trillion in November 2024 to Rs 30.283 trillion by the end of December. This drop reflects heightened financial caution, particularly among individuals and entities that may fall outside the formal tax net. On December 18, 2024, the government introduced a bill in the National Assembly proposing strict measures targeting individuals with taxable income who remain outside the tax net. Among the key provisions is the proposed addition of Section 114C to the Income Tax Ordinance, 2001, which would empower the Federal Board of Revenue (FBR) to restrict specific transactions for non-filers. These include: â€¢ Booking, purchasing, or registering motor vehicles; â€¢ Registering, recording, or attesting the transfer of immovable properties exceeding FBR-notified values; â€¢ Selling securities, including debt securities and mutual funds, or opening accounts for such transactions; and â€¢ Conducting certain banking operations, such as: o Opening or maintaining current, savings, or investor portfolio securities accounts, except for Asaan accounts; o Withdrawing cash exceeding prescribed limits from bank accounts. This looming crackdown has created a ripple effect across the banking sector. Account holders are also concerned about declining profit rates as the SBP has implemented significant cuts to its benchmark interest rate, reducing it from 22% to 13% in recent months. Despite the December withdrawals, SBP data revealed that bank deposits registered an 8.78% year-on-year increase compared to Rs 27.84 trillion in December 2023. However, the monthâ€™s sharp decline underscores growing economic uncertainty. Banks now face a challenging environment, balancing the impact of policy changes and shifting depositor behavior. As the FBR prepares to finalize the proposed restrictions, the financial sectorâ€™s response will remain a focal point in shaping the broader economic outlook for 2025.

Date: 2025-01-23

Details: Islamabad, January 23, 2025 â€“ The Federal Board of Revenue (FBR) has come under fire from the Senate Standing Committee on Finance for failing to provide satisfactory explanations regarding the purchase of 1,010 Honda cars. The committee has now decided to escalate the matter by writing to Prime Minister Shehbaz Sharif and the Ministry of Finance to halt this procurement. The issue, initially raised by former federal minister and Senator Faisal Vawda, was brought before the committee a day earlier. The controversy revolves around the procurement of 1,010 vehicles, each with an engine capacity of 1300cc, ostensibly for operational activities. The committee questioned the rationale and justification behind the purchase, with FBRâ€™s chief admin struggling to address the concerns. During the proceedings, the FBR representative attempted to defend the decision, claiming that the Economic Coordination Committee (ECC) had approved the procurement as part of a broader plan to enhance the operational capacity of FBR officials. According to the FBR official, technical and procurement committees were established to oversee the process, which had been underway for several months and was not a sudden decision. However, the committee members raised multiple objections. They questioned why the summary submitted to the ECC explicitly specified vehicles with an engine capacity of up to 1300cc, potentially favoring a particular manufacturer. They also criticized the exclusion of other companies from the bidding process, the lack of competitive bidding, and the apparent haste in issuing the purchase order. The FBR official explained that the direct contracting was conducted in line with Public Procurement Regulatory Authority (PPRA) rules following a market survey. This justification, however, failed to satisfy the committee. Senator Saleem Mandviwalla, chairman of the committee, pointed out that the restriction to 1300cc vehicles seemed deliberate and accused the FBR of non-transparency. He emphasized the need for a fair and competitive process, stating, â€œThe FBR should not engage in such practices. Transparency must be upheld.â€ He added that social media had been abuzz with criticism of the procurement process. Former federal minister Faisal Vawda alleged that the FBR had rewarded its officials with vehicles worth Rs6 billion despite a revenue shortfall of Rs384 billion during the first half of the fiscal year. Meanwhile, Chairman Mandviwalla revealed that he had discussed the matter with Minister of State for Finance Ali Pervaiz Malik, who assured that the procurement process would be reviewed if due procedures were not followed. The Senate committee has demanded immediate action to ensure transparency and accountability in this high-value procurement, which has raised significant concerns among stakeholders.

Date: 2025-01-23

Details: Peshawar, January 23, 2025 â€“ The Peshawar Tax Bar Association has called on the Federal Board of Revenue (FBR) to reconsider and remove the mandatory password expiry condition for taxpayer portals. This appeal aims to alleviate the difficulties faced by taxpayers and practitioners in managing their compliance obligations. In a letter addressed to the FBR chairman, the Peshawar Tax Bar Association highlighted the challenges associated with the 60-day password expiry policy. While acknowledging the FBRâ€™s intent to enhance security measures, the association emphasized the need to balance security with practicality. Challenges Identified by the Peshawar Tax Bar 1. Limited Awareness and Technological Constraints: A significant portion of taxpayers in Peshawar and across Pakistan lack digital literacy, making it difficult for them to reset passwords regularly. Frequent internet disruptions exacerbate this issue, particularly in regions with limited connectivity, including Peshawar. 2. Increased Burden on Tax Practitioners: Tax practitioners in Peshawar are already managing extensive workloads, including responding to notices under various sections of the Income Tax Ordinance, such as Sections 147, 122, 177, and 161. The added responsibility of monitoring password compliance for multiple clients has become an unnecessary strain on their resources. 3. Systemic Challenges in Password Management: Frequent system downtimes and delays in receiving OTPs via email or SMS make the password reset process frustrating. These technical issues have disproportionately impacted taxpayers in Peshawar, many of whom are already diligently meeting their filing requirements. 4. Adverse Impact on Compliant Taxpayers: The password expiry policy places undue stress on registered taxpayers in Peshawar who actively comply with FBR regulations. Instead of facilitating compliance, the policy creates additional hurdles, discouraging taxpayers from engaging with the system. Proposed Recommendations from Peshawar Tax Bar To address these concerns, the Peshawar Tax Bar Association has proposed the following measures: â€¢ Eliminate the mandatory 60-day password expiry condition. â€¢ Introduce user-friendly and efficient password recovery mechanisms. â€¢ Provide dedicated facilitation measures for tax practitioners managing large client portfolios in Peshawar and other regions. By addressing these challenges, the Peshawar Tax Bar believes the FBR can significantly improve the ease of doing business in Peshawar and strengthen its image as a facilitative institution. This approach would also allow the FBR to focus on expanding the tax net by incorporating new taxpayers rather than overburdening the existing ones.

Date: 2025-01-22

Details: The Federal Board of Revenue (FBR) has commenced the process of selecting officers from BS-17 and BS-18 ranks for the provision of cars and cash rewards, sources disclosed on Wednesday. This initiative aims to recognize and incentivize officers in the Inland Revenue Service (IRS) and Pakistan Customs Service (PCS) for their contributions under the ongoing transformation plan. Interestingly, this move has sparked significant controversy, as field formations across the country have raised objections, rejecting the criteria established for the distribution of these rewards. According to insiders, the FBR has already approved the procurement of 1,010 Honda City vehicles, intended to be registered under the names of selected officials. However, the plan has been temporarily halted due to the backlash. Sources, however, insist that the scheme is merely delayed and will be implemented in the near future. The discontent among field offices, particularly Regional Tax Offices (RTOs), has been palpable. Several RTO officials have directly addressed the FBR chairman, expressing their dissatisfaction with what they perceive as an inequitable reward scheme. In a letter to the chairman, RTO officials voiced their frustration, emphasizing that the scheme exclusively benefits cadre officers of grades 17-22 while entirely sidelining non-cadre officers and employees of grades 1-18. The letter highlighted that this exclusionary approach has exacerbated an already growing sense of injustice within the organization. â€œPreviously, undisclosed allowances were added to the monthly remuneration of CSPs, drawn directly from the common pool fund and deposited into their IBAN accounts,â€ the letter stated. â€œNow, this new reward scheme further marginalizes non-cadre employees, neglecting their hard work and dedication.â€ The employees argue that this perceived favoritism is demoralizing and counterproductive, adversely affecting morale and overall productivity. They have called on the FBR to reconsider its decision and adopt an inclusive reward system that acknowledges the efforts of all employees, regardless of their cadre or grade. Adding to the urgency, disillusioned officials have warned of a potential pen-down strike if their grievances remain unaddressed. Such a strike could paralyze critical tax collection operations, forcing the FBR to confront the underlying inequities in its reward policies. The officials stated, â€œThis will expose the real workforce behind the organizationâ€™s success and reveal the inefficiencies of the privileged class that has been unfairly accommodated at the expense of others.â€ As tensions escalate, all eyes remain on the FBRâ€™s response to this mounting unrest within its ranks.

Date: 2025-01-22

Details: January 22, 2025 Karachi, January 22, 2025 â€“ Honda Atlas Cars (Pakistan) Limited has reported an impressive 296% growth in net profit for the quarter ended December 31, 2024, as the company prepares for significant sales to the Federal Board of Revenue (FBR). According to financial results shared with the Pakistan Stock Exchange (PSX) on Wednesday, Honda Atlas posted a net profit of Rs 566.40 million for the quarter, a substantial rise from Rs 143.25 million during the same period last year. This growth coincides with an impending bulk purchase of vehicles by the FBR, which has drawn significant attention. The FBR plans to acquire 1,010 Honda City 1.2L CVT vehicles to enhance its operational capabilities. This large-scale procurement is part of the FBRâ€™s broader strategy to strengthen enforcement measures and widen the tax net. These vehicles will be distributed among officers in BS-17 and BS-18 of the Inland Revenue Service (IRS) and Pakistan Customs Service (PCS). The aim is to bolster the FBRâ€™s ability to combat tax evasion while encouraging compliance across non-compliant sectors. An official Letter of Intent (LoI) has been issued by the FBR to Honda Atlas Cars (Pakistan) Limited, confirming the purchase. However, the deal has temporarily been put on hold due to political controversies surrounding the procurement. Despite this, FBR sources have clarified that the purchase is part of a comprehensive transformation plan that has been approved by all relevant authorities and is expected to move forward soon. The financial performance of Honda Atlas Cars underscores the companyâ€™s resilience and growth amid these developments. The automaker announced earnings per share (EPS) of Rs 3.97 for the quarter, a significant increase compared to Re 1 during the corresponding period last year. Furthermore, total sales surged to Rs 17.84 billion, up from Rs 12.43 billion in the same quarter a year earlier. This surge in sales and profits reflects the growing demand for Honda vehicles in Pakistan, boosted by both consumer interest and anticipated institutional purchases such as that of the FBR. Market analysts believe that the companyâ€™s financial performance positions it well to benefit from upcoming opportunities, provided the FBR deal materializes as planned. Hondaâ€™s success highlights its critical role in Pakistanâ€™s automotive sector, where demand for reliable vehicles continues to grow despite economic challenges.

Date: 2025-01-22

Details: Karachi, January 22, 2025 â€“ The Federal Board of Revenue (FBR) has officially invited stakeholders to submit their proposals concerning customs duty adjustments for the upcoming federal budget of 2025-26. This call aims to gather suggestions from industry representatives, associations, and businesses to help shape the customs duty framework for the coming fiscal year. In a bid to streamline the submission process, the FBR has provided a detailed format to facilitate stakeholders in offering their proposals related to customs duties. The proposals can cover a wide range of topics, including changes to customs tariff rates, updates to the customs rules and procedures, and potential amendments to the Customs Act of 1969. The first section of the format focuses on changes in customs tariff rates. Stakeholders are invited to present their suggestions for new or adjusted tariff codes, specifying the existing rate of duty for 2024-2025 and the proposed rate for 2025-26. They are also required to provide justifications for the proposed changes and quantify the benefits these alterations may bring to consumers or industries. This section allows for a direct discussion of how tariff adjustments might enhance competitiveness or protect local industries from unfair competition. The second section addresses proposed changes in customs rules and procedures. Stakeholders are encouraged to identify existing rules that they believe need modification, alongside proposed amendments, and provide a brief rationale for the changes. This part also allows for the identification of any amendments required in the Customs Act or other SROs (Statutory Regulatory Orders) to implement the changes effectively. Finally, the FBR has dedicated a section for suggestions related to the Customs Act, 1969. This section invites stakeholders to propose amendments to specific sections or clauses of the Act, with clear justification and the expected impact on current rules, regulations, and SROs. For industries seeking protection or concession on locally manufactured products, the FBR has provided an additional annex to guide submissions. This includes details about locally produced goods, such as the product description, PCT codes, local pricing, and installed production capacities. It also includes information on competing imported products, the total country demand, and potential customs duty concessions. This initiative underscores the importance of stakeholder engagement in shaping Pakistanâ€™s trade and customs policies. The FBR is keen on ensuring that the proposed customs duties reflect the needs of local industries while encouraging fair competition in the marketplace. The invitation to submit proposals highlights the governmentâ€™s commitment to building a comprehensive and inclusive policy framework for the 2025-26 budget.

Date: 2025-01-22

Details: KARACHI: Chief Collector of Customs Appraisement (South), Muhammad Jamil Nasir Khan, announced that the newly implemented Faceless Customs Assessment (FCA) System has drastically enhanced the efficiency of customs operations, reducing Goods Declaration (GD) clearance time from 109 hours to an average of just 18 hoursâ€”an 83% improvement. During a presentation at the Karachi Chamber of Commerce & Industry (KCCI), the Chief Collector outlined the positive impact of the FCA system on importers. He highlighted significant benefits, including lower demurrage costs and reduced reliance on public office visits and litigation. Since its mid-December launch, the FCA system has maintained robust revenue collection, amassing Rs. 86 billion within its first 15 days. Key attendees at the meeting included KCCI President Muhammad Jawed Bilwani, Senior Vice President Zia ul Arfeen, Vice President Faisal Khalil Ahmed, Chairman of the Customs & Valuation Subcommittee Arif Lakhani, former KCCI Presidents, and members of the Managing Committee. The Chief Collector emphasized that the FCA systemâ€™s rapid clearance capabilities are expected to encourage other departments to expedite their processes, enhancing Pakistanâ€™s economic competitiveness. Future initiatives include establishing a Centralized Examination Center in Karachi with bodycams for transparency and real-time monitoring. Financial backing for these enhancements is being provided by the World Bank. Plans also include introducing an incentive-based appraisal system and expanding the FCA framework by setting up Customs Assessment Units (CAUs) in Lahore and Islamabad. These units will integrate with Karachiâ€™s operations, which currently handle 80% of the countryâ€™s imports. Jamil Nasir acknowledged initial implementation challenges but credited the unwavering support of KCCI for the systemâ€™s smooth adoption. The FCA system has led to a 31% reduction in GDs routed through the red and yellow channels, a substantial increase in green channel clearances, and a 75% drop in document calling. The elimination of the group-based assessment structure has consolidated operations into a controlled environment, ensuring fair and sequential GD processing. President KCCI Muhammad Jawed Bilwani praised the FCA system, noting its widespread appreciation within the business community. He highlighted its potential to expedite the production cycles of exporters by ensuring the faster clearance of imported raw materials. â€œThis innovation not only boosts exports but also positions Pakistan to improve its port operations ranking globally,â€ he remarked. Bilwani urged the Federal Board of Revenue (FBR) to ensure the FCA systemâ€™s seamless, long-term operation. He also suggested eliminating dry ports and consolidating all consignment clearances at sea ports under the faceless system to address corruption and misdeclaration. Highlighting Pakistanâ€™s recent Current Account surplus, Bilwani stressed the importance of innovations like the FCA system in addressing the trade deficit. He further proposed sector-specific refund disbursement accounts to expedite payments, minimizing the financial burdens on exporters caused by delayed refunds. â€œThese steps are vital for achieving a trade surplus and ensuring sustained economic growth,â€ he added.

Date: 2025-01-22

Details: Islamabad, January 22, 2025 â€“ The Inland Revenue Service Officers Association (IRSOA) has announced its firm decision to boycott the recently introduced Rating and Reward System (RRS) by the Federal Board of Revenue (FBR). In a detailed statement, IRSOA strongly urged its members to stand united in rejecting what it deems a deeply flawed and counterproductive initiative. After careful deliberation, the IRSOA concluded that the RRS undermines the professional integrity and structural stability of the Inland Revenue Service (IRS). Highlighting their concerns, IRSOA stated: 1. Unfair Targeting of the IRS: The IRSOA emphasized that no other civil service in Pakistan is subjected to such an intrusive and discriminatory review system. The association believes the IRS is being unjustly singled out, and this bias is unacceptable. 2. Subjectivity and Favoritism in Evaluation: The criteria for evaluation under the RRS are entirely subjective, creating opportunities for personal biases and favoritism. For example, out of 50 officers, only 10 can be graded as category-A, effectively labeling the remaining 40 as corrupt. The IRSOA argued that this arbitrary grading mechanism enforces an unfair stigma and forces officers to label their colleagues as corrupt in order to submit evaluations. 3. Harmful Impact on Morale and Integrity: The IRSOA expressed its concerns about the demoralizing effect of such a system, where FBR officers are compelled to label their peers as lacking integrity. This practice is not only unfair but also damaging to professional relationships and the organizational culture. 4. Further Reputational Harm to the FBR: The association warned that the RRS would exacerbate the challenges already faced by the FBR, an institution frequently subjected to undue scrutiny compared to other government departments. The negative perception created by this system could harm the performance of the FBR and, by extension, impact state revenue. The IRSOA firmly believes that the RRS is not a reformative initiative but an ill-conceived mechanism that will worsen existing challenges. The association has called on the FBR administration to immediately withdraw the scheme and engage in meaningful dialogue with stakeholders to address genuine concerns. The IRSOA remains committed to promoting constructive reforms that strengthen the Inland Revenue Service and enhance its vital role in national development.

Date: 2025-01-21

Details: ISLAMABAD: Federal Tax Ombudsman (FTO) made recommendations on 13,500 taxpayersâ€™ complaints, but only 336 were challenged by the Federal Board of Revenue (FBR) before President of Pakistan during 2024. Dr Asif Mahmood Jah Federal Tax Ombudsman presented Monday annual report 2024 to Asif Ali Zardari, President of Pakistan. FTO is the first one among all the Federal Ombudsmen to present annual report 2024, which is a statutory requirement. President Asif Ali Zardari expressed great satisfaction and appreciated the extraordinary performance of FTO and emphasised to further facilitate the taxpayers for the redressal of their grievances against FBR Maladministration. Federal Tax Ombudsman Dr Asif Mahmood Jah apprised the President about the achievements of the year 2024. Annual report 2024 reflects that number of complaints in the year 2021, when the incumbent FTO took charge of the office, stood only at 2,816. However, in the year 2024, a record number of 13506 complaints were registered with the FTO against the tax functionaries. A total of 12914 complaints were decided from the complaints lodged with the FTO in the year 2024, thereby surpassing all previous records which reflects the confidence of taxpayers in FTO for the resolution of grievances against FBR officials. In 2024, FTO made recommendations on 13,500 complaints, but only 336 of those were challenged in representations with the President. The President reviewed 379 representations, including some carried over from 2023, and decided 326 cases in favour of the FTO. Annual report 2024 further reflects successful implementation of the decisions rendered by the Federal Tax Ombudsman which stands at an impressive rate of 94.7%. An amount of Rs22.79 billion was credited back to taxpayers as refund claim on the directions of FTO in the year 2024. Average time taken for the disposal of complaints was reduced to an impressive 34.11 days in the year 2024. The report stated that 1705 complaints were resolved in a matter of days, in the year 2024 through informal dispute resolution under sect 33 of FTO Ordinance. The notable surge in the registration of complaints in 2024 is attributed to record 270 outreach sessions across Pakistanâ€™s business community and other institutions conducted by Federal Tax Ombudsman. Report further states that FTO has effectively resolved a huge number of complaints from the overseas Pakistanis, most of them resolved informally. Among landmark decisions in the year 2024, FTO provided substantial relief to the often-overlooked demographic of low-paid contractual employees, teachers and Art students across Pakistan. Publications of Tax Payers Rights booklet and Pendium of important FTO orders is yet another effort by FTO in the year 2024 to empower our taxpayers. Copyright Business Recorder, 2025

Date: 2025-01-21

Details: In a significant ruling, a division bench of the Lahore High Court (LHC) dismissed an income tax reference filed by a Commissioner Inland Revenue of the Federal Board of Revenue (FBR) under Section 133(1) of the Income Tax Ordinance, 2001. The reference filed before the LHC, challenged an order issued by the Appellate Tribunal Inland Revenue, Lahore, on September 27, 2018, which favored the respondent, a business entity operating departmental stores in Lahore and Rawalpindi. The case stemmed from the respondentâ€™s e-filed income tax return for the 2014 tax year, declaring a loss of Rs. 15,734,624. The FBR had selected the respondentâ€™s case for audit under Section 214-C of the Ordinance. Subsequently, the deemed assessment was amended under Section 122(1), revising the respondentâ€™s income to Rs. 880,500,469. Dissatisfied with this assessment, the respondent filed an appeal, leading the Commissioner Inland Revenue (Appeals) [CIR (Appeals)] to partially remand the case. The respondent escalated the matter to the Appellate Tribunal, which ultimately ruled in its favor, deleting several contested additions. The petitioner argued before the LHC that the Appellate Tribunal should have remanded the case back to the CIR (Appeals) instead of deciding it directly. However, the court rejected this contention, affirming the Tribunalâ€™s authority as the final fact-finding forum to resolve the matter independently. Among the key deletions by the Appellate Tribunal were: â€¢ Rs. 252,369,772 under Section 39(3), where the Tribunal found that the Deputy Commissioner Inland Revenue (DCIR) had inconsistently applied standards by granting relief in a similar case but rejecting the respondentâ€™s verified transaction records. â€¢ Rs. 5,111,393 under Section 21(a), where sales tax was incorrectly treated as a tax on profits rather than a levy on sales. â€¢ Rs. 14,705,000 and Rs. 13,486,773 disallowances, which were set aside due to the absence of a prior show cause notice. â€¢ Rs. 7,500,000 added under Section 111, which was invalidated for lack of a separate notice. Furthermore, the court dismissed the petitionerâ€™s argument regarding a donation of Rs. 3,216,530 to Bahria Dastarkhawn, which was treated as covered under Section 61 of the Ordinance. The court clarified that determining whether the recipient qualifies as a registered non-profit organization under Section 2(36) involves factual findings beyond its jurisdiction in reference proceedings. The LHC concluded that the Appellate Tribunalâ€™s findings were grounded in factual determinations, leaving no substantive legal question for the court to address. The court emphasized that the Tribunal acted within its jurisdiction and authority in deciding the matter conclusively. Consequently, the reference filed by the FBR was dismissed for lack of merit. This decision underscores the role of the Appellate Tribunal as the final arbiter of facts in tax disputes and highlights the importance of adhering to procedural requirements in tax assessments.

Date: 2025-01-21

Details: Islamabad, January 21, 2025 â€“ The President of Pakistan has instructed the Federal Board of Revenue (FBR) to take immediate steps to address the issue of excessive taxation on electricity bills, following a significant decision that validates the recommendations of the Federal Tax Ombudsman (FTO). The Presidentâ€™s directive comes after rejecting 20 representations filed by the FBR challenging the FTOâ€™s orders. The complaints, lodged under Section 10(1) of the Federal Tax Ombudsman Ordinance, 2000, were primarily from low-income earners. These individuals argued against the withholding of Income Tax and Sales Tax on their electricity bills despite their earnings falling below the taxable income threshold. This situation led to undue financial strain on citizens already struggling to make ends meet. The FTOâ€™s investigation revealed a blanket imposition of Electricity Duty (ED) on consumers, irrespective of their income levels. This uniform approach disproportionately affected low-income households, exacerbating their financial burdens. Additionally, the investigation uncovered systemic issues in the timely remittance of ED to provincial energy departments. Instances of misuse and misallocation of funds collected under this head were also noted, raising serious concerns about transparency and accountability. One critical issue highlighted was the ambiguity surrounding the legal status of ED collection by electricity distribution companies. This lack of clarity questioned the legitimacy of taxes imposed by the FBR in conjunction with ED. Furthermore, cross-provincial discrepancies and substantial outstanding dues pointed to broader inefficiencies in the existing taxation framework. To tackle these pressing issues, the FTO recommended the formation of a committee comprising representatives from key stakeholders, including the Large Taxpayers Office (LTO), Lahore Electric Supply Company (LESCO), and the Punjab Energy Department. This committeeâ€™s mandate would be to thoroughly review the ED regime and its associated taxes, aiming to formulate policies that would alleviate the financial burden on ordinary consumers. By upholding the FTOâ€™s recommendations, the President has emphasized the urgency of addressing unjust taxation practices. This decision highlights the need for a collaborative approach among relevant stakeholders to reform the taxation system, ensuring fairness and transparency. The initiative aims to provide much-needed relief to taxpayers, particularly those from economically vulnerable segments, by reducing the financial strain imposed by excessive taxation on electricity bills.

Date: 2025-01-21

Details: Islamabad, January 21, 2025 â€“ The Federal Tax Ombudsman (FTO) reported a significant 51% increase in complaints lodged against the Federal Board of Revenue (FBR) during 2024 compared to the previous year. According to the FTOâ€™s annual report, a total of 13,506 complaints were received in 2024, up from 8,963 complaints in 2023â€”an increase of 5% beyond projected figures. The report highlighted that the FTOâ€™s robust efforts resulted in a remarkable 63.69% improvement in complaint resolution. In 2024, 12,914 complaints were disposed of, compared to 7,889 in the previous year. These figures underscore the FTOâ€™s commitment to addressing taxpayersâ€™ grievances efficiently. Focus on Broader Impact Issues In 2024, the FTO Secretariat concentrated on resolving issues with far-reaching implications. Notable cases included the revision of valuation tables for immovable property, affecting real estate transactions across Pakistan, and addressing taxation matters related to private medical colleges. Furthermore, refunds totaling Rs. 22,793 million were issued to taxpayers following FTO recommendations. The FTOâ€™s proactive interventions extended to registering new taxpayers and enhancing tax collection in the real estate sector and withholding tax regime. Relief measures included an automated system for jurisdiction changes and the restoration of blocked mobile SIMs. These initiatives not only alleviated public grievances but also safeguarded the national exchequer. Technological Advancements and Outreach The 25th Annual Report emphasized the integration of IT-based Key Performance Indicators (KPIs), developed through the Complaint Management Information System (CMIS) and Monthly Performance Review (MPR). These tools streamlined complaint handling and performance monitoring. The FTO also leveraged advanced Information and Communications Technology (ICT) to enhance accessibility. Digital platforms such as Twitter, WhatsApp, Facebook, and email were used to engage with complainants and FBR officials. The outreach campaign extended to smaller cities, making the FTOâ€™s services accessible beyond major business hubs. Special facilities were introduced for Overseas Pakistanis, allowing them to lodge complaints through the FTO website or mobile apps and track their status online in real time. Increasing Awareness and Accessibility Efforts to raise public awareness about the FTOâ€™s functional parameters led to a notable surge in complaints received. The 24/7 accessibility for the general public contributed significantly to the increase in both the number of complaints filed and their timely resolution. The FTOâ€™s systemic initiatives and focused approach during 2024 reflect a steadfast commitment to redressing public grievances and strengthening taxpayer confidence in the countryâ€™s tax administration system.

Date: 2025-01-21

Details: Karachi, January 21, 2025 â€“ The Federal Board of Revenue (FBR) has achieved a monumental milestone by collecting an impressive Rs 200 billion in taxes from immovable property transactions during the tax year 2024. This marks a substantial 30% increase compared to the Rs 153.75 billion collected in the previous tax year, according to official documentation. A detailed analysis reveals that the FBR collected Rs 104 billion in withholding tax from property purchases during the tax year 2024. This figure represents a robust 24% surge from the Rs 83.95 billion recorded in the preceding fiscal year. Meanwhile, tax revenue generated from property sales exhibited an even sharper rise, escalating by 37% to reach Rs 95.65 billion, compared to Rs 69.80 billion in the previous year. These impressive figures underscore the FBRâ€™s intensified efforts to streamline tax collection from the burgeoning real estate sector in Pakistan. The significant uptick in revenue reflects enhanced compliance measures, strengthened enforcement protocols, and a growing recognition of the importance of tax contributions to the national economy. The FBR collects withholding taxes on property transactions under two key provisions of the Income Tax Ordinance, 2001. Section 236K governs the collection of taxes on property purchases, while Section 236C pertains to taxes levied on property sales. These measures not only ensure compliance with tax regulations but also contribute to documenting and regulating the real estate market, a historically under-monitored sector in Pakistan. The unprecedented growth in tax collection from property transactions highlights the sectorâ€™s potential as a crucial revenue stream for Pakistanâ€™s economy. This achievement also aligns with the governmentâ€™s broader goals of fostering a transparent and well-regulated financial ecosystem. By targeting real estate transactions, the FBR aims to minimize tax evasion, curb speculative trading, and encourage legitimate investment practices. As Pakistan grapples with economic challenges, the Rs 200 billion collected from immovable property transactions serves as a testament to the efficacy of the FBRâ€™s policies and its commitment to enhancing the countryâ€™s fiscal stability. This achievement underscores the importance of a vigilant tax collection mechanism in bolstering the nationâ€™s financial resilience.

Date: 2025-01-21

Details: Islamabad, January 21, 2025 â€“ The Pakistan Telecommunication Authority (PTA) has called on consumers to ensure the payment of applicable taxes and duties to the Federal Board of Revenue (FBR) for mobile device registration. The PTA emphasized that only legally registered and compliant devices will be activated for use in Pakistan. In collaboration with the FBR, the PTA is actively working to promote public awareness about the importance of mobile device registration through the Device Identification, Registration, and Blocking System (DIRBS). This initiative aims to strengthen the regulation of mobile devices in Pakistan and prevent the usage of smuggled or unregistered phones. By fostering transparency and security, the PTA and FBR are contributing to the development of a robust digital ecosystem in the country. The mobile device registration process involves two key components: the payment of applicable taxes and duties to the FBR and the verification of technical requirements by the PTA through DIRBS. Once these steps are completed, the device is officially registered and activated for use. The PTA reiterated its commitment to building a secure and transparent digital future for Pakistan by ensuring that only legally imported devices operate within the countryâ€™s networks. Consumers are strongly encouraged to purchase PTA-approved devices, which can be identified by a visible â€œPTA Approvedâ€ stamp on the handset. This certification ensures that the device complies with Pakistanâ€™s regulatory standards, enabling seamless network compatibility and secure operations within the national mobile ecosystem. For up-to-date information regarding the taxes and duties applicable to mobile devices, stakeholders and consumers are advised to visit the official FBR website. Staying informed about these requirements helps ensure compliance and avoids potential disruptions in device activation. The PTAâ€™s initiative reflects the broader effort to combat the use of unauthorized devices, protect revenue collection, and enhance national security. By encouraging lawful practices and raising awareness about mobile device registration, the PTA and FBR aim to promote trust and accountability within Pakistanâ€™s telecommunications sector. This step represents another milestone in Pakistanâ€™s journey toward a fully regulated and secure digital environment, ensuring that every consumer benefits from legitimate and high-quality mobile services.

Date: 2025-01-21

Details: Karachi, January 21, 2025 â€“ The Federal Board of Revenue (FBR) has introduced updated rules for sales tax registration under the Sales Tax Rules, 2006, effective for the tax year 2025. These revisions aim to streamline the registration process and enhance compliance among taxpayers in Pakistan. The FBR has clarified the process under Rule 5 of the updated rules, detailing the application procedure for sales tax registration. According to the FBR, individuals and entities required to register for sales tax must apply electronically using Form STR-1. The application must specify the Regional Tax Office (RTO) based on specific criteria, such as the location of the registered office, factory, or main business operations. This ensures that businesses are registered in the jurisdiction where they operate, promoting efficient monitoring and compliance. To apply for registration, applicants must submit essential documents, including: â€¢ A bank account certificate in the businessâ€™s name. â€¢ Registration numbers for gas and electricity connections. â€¢ Details of all branches in case of multiple locations. â€¢ GPS-tagged photographs of business premises, machinery, and industrial utility meters for manufacturers. â€¢ A balance sheet showing business capital, assets, and liabilities for certain applicants. The FBR has also mandated biometric verification for individuals, association members, and single-shareholder companies. Registrants must visit an e-Sahulat Centre of NADRA within a month of registration to complete this process. Failure to comply will result in removal from the Active Taxpayer List. Annual biometric re-verification is also required, with non-compliance leading to restrictions on electronic filing unless authorized by the Commissioner through the IRIS system. For manufacturers, the FBR may require pre-verification, post-verification, or both to validate the authenticity of documents and business operations. Additionally, the field office can scrutinize submitted documents after registration and request any missing information. If the required documents are not provided within 15 days, or if any submissions are found to be fake or invalid, the taxpayer will be removed from the Active Taxpayer List, subject to the approval of the Member (IR-Operations), FBR. These updates reflect Pakistanâ€™s commitment to strengthening its tax infrastructure and ensuring that all businesses comply with legal requirements. By incorporating digital processes and biometric verification, the FBR aims to curb tax evasion and improve transparency in the taxation system.

Date: 2025-01-21

Details: Karachi, January 21, 2025 â€“ Pakistan has provided a massive income tax exemption amounting to Rs 91 billion to foreign individuals and entities during a single tax year. This move highlights the countryâ€™s strategy to attract foreign investment and strengthen international partnerships. According to the Federal Board of Revenue (FBR), the tax exemption was granted to agencies of foreign governments, foreign nationals, and other non-resident persons approved by the Federal Government. These exemptions were made under Clause 75 of the Second Schedule of Pakistanâ€™s Income Tax Ordinance, 2001. Sources within the FBR disclosed that this exemption was specifically applied during the tax year 2022-23. Under this clause, any profit on debt and capital gains earned by foreign government agencies or non-resident individualsâ€”on debt instruments approved by the Federal Governmentâ€”are exempt from taxation. The FBR has stated that these exemptions are part of Pakistanâ€™s broader efforts to encourage foreign collaboration and investment in critical sectors such as infrastructure, energy, and finance. By granting such tax relief, Pakistan aims to position itself as a favorable destination for international investments, ensuring that foreign governments and entities find the economic climate conducive to their operations. While this measure reflects Pakistanâ€™s commitment to fostering global partnerships, it has also sparked discussions about its implications for the domestic tax base. Critics argue that such exemptions might place additional strain on Pakistanâ€™s limited revenue streams, especially at a time when the country is grappling with economic challenges and seeking to expand its tax base. On the other hand, supporters of the policy emphasize its importance for boosting foreign direct investment (FDI) in Pakistan. By offering incentives like tax exemptions, the government can attract international capital and expertise, which are critical for driving economic growth and achieving long-term stability. Pakistanâ€™s economic policymakers believe that creating a competitive environment for foreign entities will ultimately benefit the nation through technology transfer, job creation, and increased trade opportunities. However, ensuring transparency and a balanced approach in granting such exemptions will remain crucial to maintaining public trust and achieving sustainable economic development. This Rs 91 billion exemption underscores Pakistanâ€™s proactive approach to global economic engagement, aiming to strengthen its position in the international market.

Date: 2025-01-21

Details: Karachi, January 21, 2025 â€“ The Federal Board of Revenue (FBR) has announced January 31, 2025, as the deadline for submitting proposals for the federal budget 2025-26. This initiative underscores the FBRâ€™s commitment to fostering collaboration with stakeholders in shaping the nationâ€™s fiscal policies. The FBR has urged stakeholders, including business associations, trade bodies, and tax professionals, to provide clear, actionable, and implementable suggestions. These proposals may include additions, deletions, or amendments to existing tax laws, aiming to enhance revenue collection and streamline the taxation system. Focus on Comprehensive Budget Measures As part of its efforts to formulate an inclusive and impactful federal budget, the FBR is intensifying its drive to expand the tax base and boost compliance. Sources within the organization have revealed that the budget is likely to be announced in the first or second week of June 2025. To ensure the budget addresses pressing economic challenges, the FBR is actively engaging stakeholders to contribute tax proposals targeting revenue generation and economic sustainability. Key Focus Areas for Budget 2025-26 In its directives, the FBR has outlined several key areas to guide stakeholders in formulating their proposals: 1. Expanding the Tax Base: A major priority is to bring more individuals and businesses into the tax net, ensuring equitable contribution to national revenue. 2. Integrating the Value Chain: Stakeholders are encouraged to suggest policies to bring the entire value chain of businesses under the General Sales Tax (GST) regime, promoting uniformity and compliance. 3. Promoting Progressive Taxation: The FBR aims to ensure wealthier segments of society contribute a fair share to revenue by enhancing progressive taxation measures. 4. Phasing Out Concessions and Exemptions: Gradual elimination of unnecessary tax concessions and exemptions is planned to create a level playing field for all taxpayers. 5. Facilitating Taxpayers: Simplification of tax laws and removal of redundant provisions are key priorities to improve the ease of doing business and build a taxpayer-friendly environment. 6. Reducing Tax Arbitrage and Anomalies: Proposals addressing tax inefficiencies, distortions, and procedural loopholes are being sought to ensure neutrality and economic efficiency. This proactive and inclusive approach reflects the FBRâ€™s commitment to strengthening Pakistanâ€™s tax system, mobilizing resources, and fostering sustainable economic growth. By actively involving stakeholders, the FBR aims to create a budget that addresses systemic challenges while promoting trust and collaboration in the taxation framework.

Date: 2025-01-21

Details: Karachi, January 21, 2025 â€“ The Regional Tax Office-1 (RTO-1) Karachi has taken decisive action by sealing a toy shop located in one of the cityâ€™s major commercial areas for violating Point of Sale (POS) regulations. This step is part of RTO-1 Karachiâ€™s ongoing campaign to ensure compliance with tax laws and improve transparency in business operations. According to sources, RTO-1 Karachi, an integral arm of the Federal Board of Revenue (FBR), is intensifying its crackdown on businesses failing to comply with POS requirements. On Tuesday, the tax office sealed a childrenâ€™s toy shop that was found issuing invoices not linked to the mandatory POS system. Such practices directly contravene the legal requirements aimed at documenting sales and improving tax collection. The operation was conducted within the administrative jurisdiction of Zone 3, RTO-1, specifically on Tariq Road, a bustling commercial hub in Karachi. Officials confirmed that the action was carried out under Rule 150ZEO of the Sales Tax Rules, 2006. This rule mandates the integration of retail outlets with the FBRâ€™s POS system to ensure proper reporting of sales and prevent revenue leakages. Dr. Faheem Muhammad, Chief Commissioner of RTO-1, stated, â€œViolations of POS regulations will not be tolerated under any circumstances. Businesses failing to comply with the rules will face strict penalties, including the sealing of their premises.â€ He added that RTO-1 Karachiâ€™s efforts are crucial in supporting the governmentâ€™s objective of broadening the tax net and ensuring fair tax practices across all sectors. The Zonal Commissioner overseeing Zone 3 highlighted that such actions against non-compliant businesses are necessary to deter others from flouting the regulations. â€œRTO-1 Karachi is committed to ensuring that every business operates within the legal framework,â€ the commissioner noted. RTO-1 Karachiâ€™s campaign to enforce POS compliance reflects its dedication to strengthening Pakistanâ€™s tax infrastructure. By targeting violations, RTO-1 aims to promote a culture of accountability and transparency within the business community. The Chief Commissioner reaffirmed that this drive will continue until all businesses in the region adhere to the prescribed rules, ensuring a level playing field for compliant taxpayers.

Date: 2025-01-20

Details: Islamabad, January 20, 2025 â€“ The National Assembly is set to approve the â€œTax Laws (Amendment) Bill, 2024,â€ which aims to overhaul the taxation regime by abolishing higher withholding tax rates for non-filers. This shift follows a broader government strategy to impose strict restrictions on non-compliant individuals while ensuring a more equitable tax collection system. The new tax laws will relieve non-filers from the burden of elevated withholding tax rates, but the Federal Board of Revenue (FBR) faces mounting pressure to achieve its revenue collection targets. Withholding taxes contribute approximately 70% of Pakistanâ€™s overall direct tax revenue, and their gradual removal is expected to create significant fiscal challenges. Under the proposed legislation, non-filers will be restricted from purchasing, booking, or registering vehicles over 800cc, acquiring property beyond prescribed limits, and making substantial stock purchases. Additionally, non-filers will be barred from opening new bank accounts and conducting high-value banking transactions. However, exceptions will allow non-filers to purchase motorcycles, rickshaws, and tractors, reflecting an attempt to balance restrictions with practicality for low-income individuals. The phased implementation of these tax laws is designed to mitigate economic disruption. Officials have confirmed that changes to the withholding tax regime will be incorporated into the federal budget for 2025-26. This systematic approach underscores the governmentâ€™s intent to ensure a smooth transition while addressing longstanding issues in tax compliance. The legislation also grants sweeping powers to the FBR and its officers. The Chief Commissioner of Inland Revenue will have the authority to freeze bank accounts, seal business premises, and seize movable property of non-compliant individuals. Moreover, individuals failing to register for sales tax will face property transfer bans and frozen accounts. However, accounts will be unfrozen within two days after completing the registration process. One of the billâ€™s objectives is to curtail economic transactions by ineligible persons. For example, securities brokers and financial institutions will be prohibited from facilitating transactions for non-filers. Additionally, financial institutions may be directed to freeze accounts of individuals identified as non-compliant under the tax laws. Tax experts have raised concerns over the revenue shortfall resulting from these changes. While the government plans to offset the impact by introducing new measures in the upcoming budget, questions remain about the FBRâ€™s capacity to enforce these policies effectively. The tax laws reflect a paradigm shift in Pakistanâ€™s fiscal policy, emphasizing compliance and enforcement while phasing out punitive measures like higher withholding tax rates. However, the road to implementation will require meticulous planning and robust execution to achieve the desired results.

Date: 2025-01-20

Details: Islamabad, January 20, 2025 â€“ The Federal Board of Revenue (FBR) has officially announced the test run of a newly developed Rating and Reward System for its officers, marking a significant step under its transformation plan. This initiative aims to streamline performance evaluation and foster a culture of accountability and recognition within the organization. A formal notification was issued to all Members of the FBR, Chief Collectors, Director Generals of Pakistan Customs, and Chief Commissioners and Director Generals of Inland Revenue. It detailed the procedural framework for the systemâ€™s implementation, underscoring its readiness for the pilot phase. The Rating and Reward System is designed to assess and reward officersâ€™ performance fairly and transparently, focusing on those in the PCS/IRS cadre of BS-17 and above. In preparation for this test run, previous directives required all Chief Collectors, Director Generals of Customs, Chief Commissioners-IR, and Director Generals-IR to ensure that their officers updated their email addresses and mobile numbers in their HRIS logins. This step was deemed essential to ensure seamless participation in the upcoming peer rating process. The test run is scheduled for Tuesday, January 21, 2025, between 3:00 PM and 6:00 PM. Officers are advised to log in to the system by 2:30 PM to allow sufficient time for troubleshooting and resolving any technical issues. During this time, officers will receive an email on their updated addresses linked with the HRIS. After successful login, they will be presented with a pool of peers to rate. The rating process will involve categorizing peers from A to E based on specified performance criteria. Notably, this period is dedicated exclusively to the test run, and no other official assignments will be conducted. To ensure readiness, all field formations are required to submit a certificate of compliance by 4:00 PM today, confirming their preparedness for the process. For additional facilitation, a clickable link to the Rating and Reward System will be provided to field formations for any officer who does not receive an email. This initiative is part of FBRâ€™s broader efforts to modernize its operational framework, enhance accountability, and motivate officers through merit-based rewards. The successful implementation of this system could set a benchmark for efficiency and transparency in government organizations.

Date: 2025-01-20

Details: Karachi, January 20, 2025 â€“ The Federal Board of Revenue (FBR) has revealed a staggering Rs 1.42 trillion in sales tax exemptions granted to petroleum products, despite a significant decline in consumption over the past year. This amount represents approximately 50% of the total sales tax exemptions provided in tax year 2023, according to the FBRâ€™s Tax Exemption Report for 2024. The report indicates that sales tax exemptions and concessions saw a dramatic rise of 121% during the 2023 tax year, surging from Rs 1.29 trillion in 2022. This considerable increase in tax expenditure is attributed to a range of global and domestic factors, including geopolitical tensions, fluctuations in global fossil fuel prices, and public policy interventions aimed at mitigating these pressures. Such interventions have included exemptions, zero rating, and reduced tax rates across various sectors. The FBRâ€™s report highlights that sales tax expenditures reached historically high levels in FY 2022-23 when compared to previous years, with petroleum products emerging as one of the largest beneficiaries of these exemptions. The report identifies four key components within the petroleum sectorâ€”Motor Spirit (MS), High-Speed Diesel Oil, Kerosene, and Light Diesel Oilâ€”which account for the largest share of the total sales tax expenditure. These four products alone registered an alarming 98.66% increase in tax exemptions, contributing to 43.99% of the total sales tax expenditure. However, it is essential to note that this increase is partly due to the recalculation of sales tax expenditures. The FBR explained that the comparison between FY 2021-22 and FY 2022-23 is skewed, as the latter period accounted for twelve months of data, while the former only considered five months, as these four items were zero-rated starting from February 1, 2022, under SRO 321(I)/2022. Despite a drop in consumption volumes, the rise in the prices of petroleum products during FY 2022-23 was the primary driver of the surge in sales tax expenditure. The agriculture sector also experienced significant growth in sales tax exemptions, with a notable 28.1% increase. The value of agricultural production grew from Rs 14.89 trillion in FY 2021-22 to Rs 19.08 trillion in FY 2022-23, which contributed to increased fertilizer consumption. The FBR granted Rs 232.6 billion in sales tax exemptions to local fertilizer producers, while fertilizer imports were provided Rs 19.9 billion in exemptions, totaling Rs 252.6 billion in tax concessions under the Sixth Schedule of the Sales Tax Act, 1990. Similarly, the Large-Scale Manufacturing (LSM) sector saw growth, with production rising from Rs 7.04 trillion to Rs 8.53 trillion, a 21.2% increase. The corresponding tax expenditure attributed to this sector amounted to Rs 98.2 billion. In summary, despite a decline in consumption, the massive sales tax exemptions granted to petroleum products and other sectors reflect a complex interaction of global economic factors and national policy decisions, which continue to shape Pakistanâ€™s fiscal landscape. The government faces the challenge of balancing tax exemptions with the need to ensure broader revenue generation and fiscal discipline.

Date: 2025-01-20

Details: Karachi, January 20, 2025 â€“ The Federal Board of Revenue (FBR) is intensifying its efforts to boost tax collection and expand the tax base as part of the formulation of the federal budget for 2025-26. Sources within the FBR have indicated that the budget is expected to be announced in the first or second week of June 2025. To ensure comprehensive and effective measures, the FBR has invited stakeholders to contribute tax proposals aimed at enhancing revenue generation and broadening the tax net. Focus Areas for Budget 2025-26 In its directives, the FBR has outlined several key areas to guide stakeholders in shaping their proposals. These include: 1. Expanding the Tax Base: A significant emphasis is placed on broadening the tax base to encourage wider participation in revenue generation efforts. This approach aims to identify and include more individuals and businesses that currently remain outside the tax net. 2. Integrating the Value Chain: Stakeholders have been advised to propose policies that bring the entire value chain of all businesses under the General Sales Tax (GST) regime, ensuring uniformity and improved tax compliance. 3. Promoting Progressive Taxation: The FBR seeks measures to enhance progressive taxation, ensuring that wealthier segments of society contribute a fairer share to national revenue. 4. Phasing Out Concessions and Exemptions: To create a level playing field, the FBR plans to gradually eliminate tax concessions and exemptions under all tax laws. 5. Facilitating Taxpayers: Simplifying tax laws and removing redundant provisions are key priorities. The FBR aims to improve ease of doing business and foster a taxpayer-friendly environment. 6. Reducing Tax Arbitrage and Anomalies: Proposals are encouraged to address tax distortions, procedural inefficiencies, and loopholes to ensure neutrality in taxation and promote economic efficiency. The FBR has urged stakeholders to submit clear, actionable, and implementable proposals, including suggestions for additions, deletions, or amendments to existing tax laws. The deadline for submissions is January 31, 2025. This proactive approach highlights the FBRâ€™s commitment to strengthening Pakistanâ€™s tax system, improving compliance, and mobilizing resources for sustainable economic growth. By involving stakeholders in the process, the FBR aims to create a budget that addresses systemic challenges while fostering trust and collaboration.

Date: 2025-01-20

Details: Karachi, January 20, 2025 â€“ The Federal Board of Revenue (FBR) has reached a significant achievement, with the number of active taxpayers in Pakistan surging to a record high of 6.07 million. This milestone reflects a notable increase in taxpayer participation, as reported by the FBR on Monday. The FBR issued the Active Taxpayers List (ATL) for the tax year 2024, based on tax returns filed up until January 19, 2025. The number of active taxpayers, at 6.07 million, marks an unprecedented high, surpassing the previous record of 5.34 million active taxpayers as of November 1, 2024. This rise in the number of active taxpayers is attributed to several contributing factors. Sources within the FBR informed PkRevenue that one of the primary motivators for citizens filing their income tax returns is the looming restriction on various financial transactions for non-filers. These restrictions include a ban on purchasing motor vehicles, properties, and maintaining bank accounts for individuals who fail to file their tax returns, even if they have taxable income. The FBRâ€™s new system, which allows real-time updates to the ATL, represents a crucial shift from the previous practice of updating the list annually in March. Under the updated framework introduced through SRO 1638(I)/2024, the ATL is now refreshed daily, ensuring that individuals and companies who file their income tax returns are promptly recognized. This dynamic approach aligns with the FBRâ€™s ongoing efforts to improve transparency and efficiency in Pakistanâ€™s tax administration. In order to incentivize timely filing, the FBR has introduced stringent penalties for non-compliance. These penalties include the disconnection of mobile phone SIM cards, suspension of utility services, and restrictions on foreign travel. However, exemptions exist for certain groups such as overseas Pakistanis holding National Identity Cards for Overseas Pakistanis (NICOPs), minors, students, and individuals traveling abroad for religious purposes, like Hajj or Umrah. Further legislative measures are also in the pipeline. The FBR is working with the National Assembly on the Tax Laws (Amendment) Bill, 2024, which seeks to impose stricter restrictions on transactions involving immovable properties, vehicle purchases, and bank accounts for individuals with taxable income who are not registered in the tax system. This bill aims to close existing loopholes, broaden the tax base, and enhance revenue collection. The updated ATL system, coupled with these new legislative measures, represents a significant modernization of Pakistanâ€™s tax framework. By introducing real-time taxpayer recognition, incentivizing timely compliance, and imposing stringent penalties for defaulters, the FBR is taking crucial steps toward creating a more efficient, equitable, and transparent tax system. These initiatives are expected to strengthen Pakistanâ€™s economy by fostering greater taxpayer engagement and improving revenue generation.

Date: 2025-01-20

Details: Islamabad, January 20, 2025 â€“ The National Assembly is set to approve the â€œTax Laws (Amendment) Bill, 2024,â€ which aims to overhaul the taxation regime by abolishing higher withholding tax rates for non-filers. This shift follows a broader government strategy to impose strict restrictions on non-compliant individuals while ensuring a more equitable tax collection system. The new tax laws will relieve non-filers from the burden of elevated withholding tax rates, but the Federal Board of Revenue (FBR) faces mounting pressure to achieve its revenue collection targets. Withholding taxes contribute approximately 70% of Pakistanâ€™s overall direct tax revenue, and their gradual removal is expected to create significant fiscal challenges. Under the proposed legislation, non-filers will be restricted from purchasing, booking, or registering vehicles over 800cc, acquiring property beyond prescribed limits, and making substantial stock purchases. Additionally, non-filers will be barred from opening new bank accounts and conducting high-value banking transactions. However, exceptions will allow non-filers to purchase motorcycles, rickshaws, and tractors, reflecting an attempt to balance restrictions with practicality for low-income individuals. The phased implementation of these tax laws is designed to mitigate economic disruption. Officials have confirmed that changes to the withholding tax regime will be incorporated into the federal budget for 2025-26. This systematic approach underscores the governmentâ€™s intent to ensure a smooth transition while addressing longstanding issues in tax compliance. The legislation also grants sweeping powers to the FBR and its officers. The Chief Commissioner of Inland Revenue will have the authority to freeze bank accounts, seal business premises, and seize movable property of non-compliant individuals. Moreover, individuals failing to register for sales tax will face property transfer bans and frozen accounts. However, accounts will be unfrozen within two days after completing the registration process. One of the billâ€™s objectives is to curtail economic transactions by ineligible persons. For example, securities brokers and financial institutions will be prohibited from facilitating transactions for non-filers. Additionally, financial institutions may be directed to freeze accounts of individuals identified as non-compliant under the tax laws. Tax experts have raised concerns over the revenue shortfall resulting from these changes. While the government plans to offset the impact by introducing new measures in the upcoming budget, questions remain about the FBRâ€™s capacity to enforce these policies effectively. The tax laws reflect a paradigm shift in Pakistanâ€™s fiscal policy, emphasizing compliance and enforcement while phasing out punitive measures like higher withholding tax rates. However, the road to implementation will require meticulous planning and robust execution to achieve the desired results.

Date: 2025-01-20

Details: Karachi, January 20, 2025 â€“ In a move to combat sales tax evasion and promote transparency, the Federal Board of Revenue (FBR) has announced policy to reward whistleblowers who provide credible information leading to the detection of tax fraud, evasion, or corruption. This initiative, outlined under Section 72D of the updated Sales Tax Act, 1990 for the tax year 2025, empowers the FBR to incentivize individuals who assist in uncovering fraudulent activities within the tax system. Key Provisions of Section 72D 1. Rewards for Whistleblowers: The FBR is authorized to sanction monetary rewards for whistleblowers whose credible information results in the identification of concealed sales tax, tax fraud, or misconduct. This step is expected to encourage individuals to come forward with actionable intelligence. 2. Procedure and Apportionment: The FBR will issue detailed guidelines in the official Gazette, specifying the procedures for claiming rewards and the criteria for apportioning the sanctioned amount. This will ensure a transparent and fair process for whistleblowers. 3. Rejection Criteria: Not every claim will qualify for a reward. Whistleblower claims may be rejected if: o The provided information lacks value. o The FBR already possesses the information. o The details are available in public records. o No taxes are recovered based on the information provided. 4. Definition of Whistleblower: A whistleblower is defined as an individual who reports tax evasion, concealment, fraud, corruption, or misconduct to a competent authority capable of taking action. The FBR emphasizes that this policy aims to strengthen its fight against tax evasion and enhance compliance in Pakistanâ€™s tax ecosystem. By incentivizing whistleblowers, the FBR hopes to uncover hidden revenues, streamline sales tax collection, and hold accountable those engaging in tax fraud or corruption. This initiative is part of the FBRâ€™s broader strategy to bridge revenue gaps and enhance trust within the tax system. With whistleblowers playing a vital role in identifying evasion, the FBR aims to reinforce its efforts to curb tax fraud, contributing to a more robust and transparent taxation framework. This landmark step reflects the FBRâ€™s commitment to eradicating financial misconduct and ensuring that tax revenues are effectively collected for national development.

Date: 2025-01-19

Details: Karachi, January 19, 2025 â€“ The Federal Board of Revenue (FBR) has acquired extensive data on car purchases made over the past five years to initiate a crackdown on individuals with taxable income who have failed to meet their tax obligations. Reliable FBR sources revealed to PkRevenue that excise and taxation departments from all four provinces have provided comprehensive information regarding car registrations and ownership transfers during this period. The data specifically includes individuals who are not listed on the Active Taxpayers List (ATL) but have registered or transferred vehicles in their names. Under the Income Tax Ordinance, it is mandatory for manufacturers, motor vehicle dealers, registration authorities, banks, and leasing companies to furnish monthly statements to the FBR regarding the sale or lease of motor vehicles. These statements must include detailed information such as the buyerâ€™s name and address, National Tax Number (NTN) or Computerized National Identity Card (CNIC) number, car registration number, make and model, engine capacity, year of manufacture, and the date of the vehicleâ€™s first registration in Pakistan. The FBR has now compiled this data and is actively issuing notices to individuals who purchased cars but failed to file their income tax returns. These notices require the recipients to explain their source of income and comply with tax filing requirements. According to FBR officials, this initiative aims to ensure greater compliance with tax laws and bring non-filers into the tax net. By identifying individuals who have the financial capacity to purchase motor vehicles but evade filing taxes, the FBR seeks to reduce the countryâ€™s tax gap and improve revenue collection. The sources emphasized that the collaboration between the FBR and provincial excise departments has been instrumental in obtaining this data. It is part of a broader strategy by the FBR to use technology and data analytics to track potential taxpayers more effectively. This initiative reflects the FBRâ€™s intensified focus on leveraging existing financial and registration data to target non-filers. By holding such individuals accountable, the FBR aims to promote transparency, broaden the tax base, and encourage voluntary compliance with Pakistanâ€™s tax laws.

Date: 2025-01-19

Details: Karachi, January 19, 2025 â€“ The Federal Board of Revenue (FBR) has announced that it will no longer entertain claims for sales tax refunds filed beyond a one-year period. This decision, based on Section 66 of the Sales Tax Act, 1990, emphasizes strict adherence to the stipulated time frame for refund claims. Key Provisions of Section 66 of the Sales Tax Act, 1990 Under Section 66, any sales tax refund claim stemming from inadvertence, error, misconstruction, or unclaimed input adjustments must be submitted within one year of the tax payment date. Claims exceeding this period will be automatically disallowed. Specific Guidelines for Sales Tax Refund Claims: 1. Time Limit for Claims: Refund claims related to sales tax paid or overpaid due to inadvertent errors or unclaimed input adjustments are strictly limited to a one-year filing window. Failure to comply with this timeframe will result in the rejection of such claims. 2. Commissionerâ€™s Discretion for Input Adjustments: In cases where a registered taxpayer fails to claim input tax adjustments within the relevant tax period, the Commissioner of Inland Revenue, upon thorough verification, may allow adjustments in a specified tax period. This provision grants some flexibility while maintaining compliance with the sales tax regulations. 3. Refunds Based on Judgements or Decisions: If a sales tax refund arises from a decision or judgment issued by a court, tribunal, or an officer of Inland Revenue, the one-year period will commence from the date of the ruling. This ensures that taxpayers affected by legal outcomes are given adequate time to process their claims. 4. Consumer Protection Clause: Refunds will not be granted if the incidence of sales tax has been directly or indirectly passed on to the end consumer. This measure prevents undue benefit to taxpayers at the expense of consumers. 5. Processing Timeframe: All refund applications filed under Section 66 must be resolved within 90 days from the date of submission. This ensures timely processing and reduces bureaucratic delays for legitimate claims. The FBRâ€™s decision underscores the importance of timely compliance with sales tax regulations. Taxpayers are urged to meticulously track their refund eligibility and submit claims within the designated period to avoid disallowance. This move is expected to streamline refund processes and reinforce accountability in the sales tax system.

Date: 2025-01-18

Details: Karachi, January 18, 2025 â€“ The Federal Board of Revenue (FBR) has confirmed its obligation to pay interest on delayed sales tax refunds at the annual Karachi Interbank Offered Rate (KIBOR). This provision is designed to ensure timely processing of refunds and provide relief to taxpayers facing delays. The FBR clarified that the payment of interest for delayed refunds is mandated under Section 67 of the Sales Tax Act, 1990. This section outlines the legal framework for compensating taxpayers when their refunds are not processed within the specified timelines. According to Section 67, if a refund due under Section 10 is not issued within the time frame stipulated in the law, the taxpayer is entitled to an additional payment. The amount of interest is calculated at the KIBOR rate per annum on the delayed refund amount. This interest is payable from the day after the refund deadline passes until the day the refund is issued. However, the law includes safeguards to prevent misuse. If there are grounds to believe that a refund claim is inadmissible, the interest payment is withheld until the investigation is complete, and the claim is either approved or rejected. This ensures that only legitimate claims benefit from the interest provision. Additionally, for refunds arising from orders issued under Section 66 of the Sales Tax Act, the FBR must process the refund within 45 days of the order. Failure to meet this timeline also triggers the interest payment at the KIBOR rate, starting from the date of the refund order. This provision underscores the FBRâ€™s commitment to improving refund mechanisms and building trust with taxpayers. By linking the interest rate to KIBOR, a widely recognized financial benchmark, the policy provides an equitable compensation mechanism for businesses whose cash flow may be disrupted by refund delays. Taxpayers, particularly exporters and businesses reliant on timely refunds, have often voiced concerns about prolonged delays in receiving their dues. The enforcement of Section 67 is expected to incentivize the FBR to expedite processing while offering some financial relief to affected taxpayers. With this measure, the FBR aims to strike a balance between safeguarding public funds and addressing taxpayer grievances, promoting greater efficiency in tax administration.

Date: 2025-01-18

Details: Karachi, January 18, 2025 â€“ In a landmark move to bolster transparency and enhance tax compliance, the Sindh province has commenced real-time sharing of property transaction details with the Federal Board of Revenue (FBR). This initiative, spearheaded by the Board of Revenue (BOR) Sindh, ensures that comprehensive data on property buyers and sellers is now directly accessible to the FBR. Sources within the FBR have confirmed that the online streaming mechanism is now operational, providing the tax authority with instant access to information on immovable property transactions. â€œThrough this system, the FBR receives real-time details of both buyers and sellers, including their tax filer status,â€ stated an official, speaking on condition of anonymity. This critical data enables the FBR to monitor high-value transactions and investigate the source of funds used for property purchases, particularly targeting non-filers and those evading taxes. The property sector, often referred to as Pakistanâ€™s largest undocumented industry, has long been a focal point of concern due to its significant role in the countryâ€™s grey economy. To address this, the FBR has intensified its crackdown on individuals with taxable income who remain outside the formal tax net. By leveraging the new data-sharing arrangement with Sindh, the FBR aims to identify and pursue such individuals more effectively. As part of its broader strategy to formalize the real estate sector, the FBR has set strict thresholds for property transactions, mandating that payments exceeding a certain limit must be made through banking channels. This policy not only promotes transparency but also aids in curbing the flow of unregulated funds within the sector. Recently, the FBR further strengthened its efforts by revising property valuations in Karachi, significantly increasing rates to align them more closely with market values. This move is expected to enhance revenue collection by minimizing discrepancies between declared and actual property prices. The online sharing of property transaction data marks a significant step forward in the governmentâ€™s efforts to integrate the real estate sector into the documented economy. By closing loopholes and monitoring transactions in real time, the FBR is poised to target tax evasion and bring more individuals into the tax net, ultimately strengthening Pakistanâ€™s fiscal framework.

Date: 2025-01-18

Details: The Federal Board of Revenue (FBR) has recently brought grave allegations against a company entrusted with the critical task of monitoring and tracking cargo in transit. This controversy has raised serious concerns about the efficiency, accountability, and transparency of the systems meant to oversee Pakistanâ€™s trade operations. The FBR has taken a decisive step by canceling the companyâ€™s license after identifying several glaring failures in its operations. However, the situation demands a deeper probe to ascertain the extent of negligence and to hold the responsible parties accountable. Merely canceling the license is insufficient without enforcing stricter accountability measures and learning from these lapses. In its statement, the FBR disclosed: â€œDuring the course of the hearing, TPL accepted that its devices were unable to provide satellite services and that they sent unnecessary or frivolous alerts.â€ Such deficiencies point to an alarming lack of oversight and technical competence, particularly for a task as critical as ensuring the secure movement of transit cargo. The FBR further highlighted that taxpayer money, amounting to a staggering Rs 445 million, was expended on the companyâ€™s flawed services. As a custodian of public funds, the FBR is obligated to explain not only the rationale for continuing with the company for so long but also the corrective measures it intends to implement. The decision to revoke the companyâ€™s license was not taken lightly, according to the FBR. It followed due legal processes and was based on a range of violations, including: â€¢ The use of outdated tracking technology incapable of providing live satellite tracking. â€¢ Frequent technical malfunctions that hindered real-time monitoring. â€¢ Cyber-attacks that led to the suspension of operations, compromising the integrity of cargo tracking. â€¢ Exorbitant fees and windfall profits despite delivering substandard services. â€¢ Multiple violations documented by field formations. The FBRâ€™s action has effectively dismantled the monopoly of a company that profited excessively while providing subpar services. However, this episode underscores a broader systemic issueâ€”weak regulatory mechanisms and a lack of stringent monitoring protocols. It is imperative that the FBR conducts a thorough investigation to identify lapses in its own oversight and ensures such failures are not repeated. Strengthening regulatory frameworks and introducing advanced technology are essential to restore confidence in Pakistanâ€™s trade operations and safeguard public resources. The transit trade monitoring debacle should serve as a wake-up call for comprehensive reform.

Date: 2025-01-17

Details: LAHORE: The Customs Appellate Tribunal has dismissed an appeal filed by the Collectorate, upholding the decision of the Collector Adjudication to release a confiscated vehicle on payment of redemption fine along with penalty. Brief facts of the case are that during the course of routine checking at a road, the Customs team saw a Suzuki Car. They signaled to stop but the driver ignored the signal and accelerated the car, which was chased by the Customs team. The driver entered in the nearby village, parked the car on the road side and escaped in the crowded area. The car was taken into the custody. A preliminary search was conducted. During the search of car, 22 bags of Indian gutka were recovered. Therefore the recovered foreign origin banned goods were taken into custody and brought to the Customs Office. The smuggled goods along with vehicle had been seized under the law. Notice was issued to the unknown persons and a copy thereof was pasted on the Notice Board of Customs Office. However, the Adjudication officer maintained that nothing has been placed on record to the effect that the seized vehicle has been found carrying of smuggled goods in false cavities or being used exclusively or wholly for transportation of offending goods. Therefore, the request of claimant of the vehicle was allowed to redeem the vehicle against payment of redemption fine. The department being aggrieved with the order filed an appeal before the tribunal. The Tribunal found that there was no evidence to prove that the vehicle was used in smuggling activities or that it had secret cavities to conceal smuggled goods. The Collectorate failed to produce any fresh evidence to justify interference with the impugned orders. In a separate case, the Tribunal waived the penalty imposed on the owner of the vehicle, who had rented it out to someone who allegedly used it for smuggling. The owner claimed he was unaware of the renter's intentions and was only trying to earn a living. The Tribunal, exercising its powers, waived the penalty in full, citing justice and fair play. The decision highlights the importance of considering the circumstances of each case and the need for fairness in the application of Customs laws. Copyright Business Recorder, 2025

Date: 2025-01-17

Details: ISLAMABAD: The Federal Board of Revenue (FBR) has made it mandatory for the licencees of Special Technology Zones Authority (STZA) to obtain registration under the Pakistan Single Window (PSW) for carrying out import and export activity. The FBR has issued SRO 24(I)/2025 to propose amendments in the Customs Rules, 2001, here on Thursday. The licencee of the authority, after acquisition of a valid licence from the authority, shall apply for a subscription to the PSW as per applicable rules under the Pakistan Single Window Act, 2021. The user ID of a licencee of the authority may be blocked by the Collector of Customs or any Customs officer designated by the Collector upon any violation under the act or these rules on the request of the authority provided an opportunity of being heard was provided to the licencee by the authority of competent jurisdiction, the new rules said. Upon constitution of any offence investigated by the authority of competent jurisdiction under the act or relevant rules, the collector of Customs or any Customs officer designated by the collector may temporarily restrict the licenceeâ€™s access in the PSW or its allied system following which the licencee shall be barred from availing the services of the PSW, its allied components or services, to the extent of the functions regulated by the STZA provided that a notice, electronically or otherwise, as the case may be, shall be issued within three days of restricting access to the PSW platform after providing the licencee the opportunity of being heard. The rules revealed that upon the import of every consignment, the authorized officer of STZA shall certify in the prescribed manner and format, as per Appendix-A, through the STZAâ€™s one-window facility and thereafter the approved list shall be shared with PSW electronically by the STZAâ€™s one-window facility, the rules said. Only those goods shall be considered for the benefits under these rules and PCT heading 9917 (4) of the First Schedule to theCustoms Act, 1969 which are transmitted to the PSW by the STZAâ€™s one-window facility and the quantities shall be auto-debited by the system as per goods imported and cleared by Customs. A goods declaration or single declaration filed in respect ofthe goods imported for a Zone along with other documents showing details of the goods as required under the Act and the rules made thereunder shall be assessed by the concerned officer of the Customs Collectorate to ascertain the admissibility of claimed exemptions in respect of goods imported, the FBR added. Copyright Business Recorder, 2025

Date: 2025-01-17

Details: The Federal Board of Revenue (FBR) has officially announced the Azerbaijan-Pakistan Transit Trade Rules 2024, a landmark step towards enhancing bilateral and transit trade between the two nations. These regulations, issued via SRO 25(I)/2025 on Thursday, facilitate the streamlined processing of Azerbaijanâ€™s transit trade cargo through Pakistanâ€™s key ports, including Karachi Port, Port Muhammad Bin Qasim, and Gwadar Port. This development stems from the Azerbaijan-Pakistan Transit Trade Agreement 2024, reflecting the mutual commitment of both countries to boost economic collaboration. Under the new rules, vehicles registered in Azerbaijan and equipped with valid permits will be allowed entry into Pakistan to transport transit and bilateral trade cargo. Remarkably, these vehicles are exempted from providing financial security for duties and taxes on a reciprocal basis, as mutually agreed by Azerbaijan and Pakistan. This provision aims to simplify procedures, reduce costs, and encourage greater trade activity between the two nations. The rules mandate that all transport operators and Customs clearing agents handling transit goods establish and maintain a â€œRevolving Insurance Guarantee PD Accountâ€ with Customs authorities. This measure is designed to ensure accountability and efficient handling of transit operations. Additionally, the Directorate General of Reforms and Automation in Karachi is tasked with generating user IDs for relevant entities, enabling seamless electronic submission of registration details through the Customs Computerized System. These entities include foreign traders, government organizations, United Nations agencies, and diplomatic missions. The regulations further specify that vehicles engaged in transit and bilateral trade must be licensed by competent authorities of the contracting parties. These vehicles must carry valid permits issued in a prescribed format when entering or exiting Pakistan. The responsibility for issuing and regulating these permits at respective land border Customs stations lies with the Directorate of Transit Trade in Peshawar, Quetta, and Gwadar. This initiative underscores the strategic importance of Pakistan as a trade corridor, leveraging its ports and infrastructure to facilitate international commerce. By fostering a more efficient and secure transit trade environment, the Azerbaijan-Pakistan Transit Trade Rules 2024 represent a significant step in strengthening economic ties and expanding regional trade opportunities.

Date: 2025-01-17

Details: Prime Minister Shehbaz Sharif issued a stern warning to officials of the Federal Board of Revenue (FBR) on Thursday, emphasizing that any individual found fabricating cases or presenting weak grounds in tax-related matters will face exemplary punitive actions. This declaration underscores the premierâ€™s zero-tolerance policy towards malpractice and inefficiency within the revenue body. During a high-level review meeting focused on expediting the FBRâ€™s legal proceedings, Shehbaz directed authorities to accelerate efforts for the swift resolution of tax revenue cases currently under trial. He instructed the engagement of top-tier legal professionals to strengthen the FBRâ€™s representation in courts, ensuring that the organizationâ€™s legal standing is robust and effective. Highlighting ongoing reforms, the prime minister noted that the transformational measures within the FBR are being implemented without delay, yielding positive outcomes. In addition, he ordered a comprehensive forensic audit of tax-related cases to identify discrepancies and ensure transparency. Shehbaz also underscored the importance of incentivizing integrity and diligence among FBR officers. He announced that officials who demonstrate honesty, hard work, and merit in building legitimate cases will be rewarded with special incentives, fostering a culture of accountability and excellence within the organization. The meeting was briefed on significant progress following the prime ministerâ€™s earlier directives. Senior officials reported that reputable legal experts had been incorporated into the FBRâ€™s panel, leading to the resolution of 586 cases in the High Court and 637 pending cases in the Supreme Court between July and December 2024. Despite these achievements, it was revealed that an alarming 33,522 cases involving a staggering Rs4.7 trillion remain pending across various courts and tribunals nationwide. To address this backlog, a litigation management dashboard for higher courts has been developed within the FBR, streamlining the monitoring and management of legal cases. Additionally, the Ministry of Law and Justice is finalizing a tax tribunals management system, slated for launch in the near future, which is expected to further enhance efficiency in resolving tax disputes. The meeting was attended by prominent officials, including Minister for Economic Affairs Ahad Khan Cheema, Attorney General Mansoor Awan, the FBR chairman, and other senior representatives. The governmentâ€™s determined stance reflects its commitment to fostering a fair and transparent tax system while addressing the nationâ€™s critical fiscal challenges.

Date: 2025-01-17

Details: Islamabad, January 17, 2025 â€” Prime Minister Muhammad Shehbaz Sharif has instructed authorities to deploy state-of-the-art cargo scanning systems at Karachi and other major trading hubs across Pakistan to combat smuggling and enhance trade monitoring. The directive came during a high-level review meeting on transit cargo and tracking systems chaired by PM Shehbaz on Friday. â€œThe outdated systems for tracking, tracing, and scanning in trading hubs must be replaced with advanced, modern technology,â€ PM Shehbaz emphasized during the meeting. He also called for third-party validation to ensure the quality and efficiency of the services provided by cargo tracking entities. Highlighting the progress already achieved, PM Shehbaz noted a significant reduction in smuggling activities due to improved tracking mechanisms. He specifically mentioned that Pakistanâ€™s successful implementation of these measures had facilitated the export of sugar worth $211 million to Afghanistan. PM Shehbaz further elaborated on the broader economic benefits of these initiatives, stating that a robust and integrated communication and cargo tracking system would position Pakistan as a central hub for transit trade in the region. This development, he added, would strengthen economic ties with neighboring countries and foster regional connectivity. The prime ministerâ€™s proactive approach reflects his commitment to enhancing Pakistanâ€™s trade infrastructure and eliminating inefficiencies in the system. During the meeting, he stressed the importance of aligning Pakistanâ€™s trade and transit operations with international standards, ensuring transparency and accountability at all levels. The meeting was attended by key stakeholders, including Finance Minister Muhammad Aurangzeb, Minister for Economic Affairs Division Ahad Khan Cheema, Federal Board of Revenue (FBR) Chairman, and senior government officials. They provided updates on the implementation of existing tracking systems and outlined plans for further advancements under PM Shehbazâ€™s guidance. Addressing the participants, PM Shehbaz reiterated his vision for a streamlined and efficient trade network. He underlined the critical role of modern technology in reducing revenue losses and curbing illegal trade, thereby bolstering the national economy. With PM Shehbaz driving these reforms, Pakistan is poised to achieve greater economic stability and establish itself as a pivotal player in regional trade dynamics.

Date: 2025-01-17

Details: The Punjab government has unveiled a groundbreaking property tax mechanism aimed at simplifying processes, eliminating ambiguities, and fostering greater transparency in the taxation system. The new framework, effective from January 1, 2025, represents a significant reform in property taxation, marking the first major overhaul in 65 years. Masood Mukhtar, Secretary Excise, Taxation, and Anti-Narcotics, announced that under the revised system, property taxes will be calculated based on the District Collectorâ€™s (DC) table for all categories of properties. This marks a shift from the traditional method of tax assessment based on rental value to a more streamlined approach grounded in the capital value of properties. Property owners will now have the opportunity to self-assess the value of their properties, with their declared valuation being accepted as the basis for tax collection. â€œThis reform is a monumental step toward simplifying the property tax framework, ensuring consistency across districts, and enhancing transparency,â€ Mukhtar stated. â€œThese changes are not intended to impose additional financial burdens but rather to benefit the public by creating a fair and straightforward system.â€ Umar Sher Chattha, Director General Excise and Taxation Punjab, provided further insights into the incentives associated with these reforms. Existing taxpayers will not face any additional tax liabilities under the new system until June 30, 2025, providing a transitional period for adjustment. Additionally, individuals entering the tax net for the first time will enjoy substantial concessions, with up to a 50% reduction in outstanding dues. New taxpayers will also benefit from a reduced payment obligation, requiring only 25% of the total tax for the initial six months. These initiatives reflect the Punjab governmentâ€™s dedication to fostering a more inclusive and efficient taxation environment. By empowering property owners, reducing tax complexities, and introducing incentives, the reforms aim to encourage greater compliance while ensuring equitable tax collection. Furthermore, this new system is anticipated to bolster economic growth in the province by increasing revenue transparency and strengthening accountability within the taxation framework. As the reforms take effect, the governmentâ€™s commitment to public welfare and economic progress remains evident, setting a precedent for effective governance and fiscal responsibility.

Date: 2025-01-16

Details: January 16, 2025 The Lahore Chamber of Commerce and Industry (LCCI) has called for a significant reduction in taxes on the real estate sector to stimulate growth in the construction industry and attract both local and foreign investments. Recognizing the sectorâ€™s vital role in driving economic activity, the LCCI organized a seminar titled â€œReal Estate Taxationâ€ on Wednesday to address the challenges faced by the industry and propose practical solutions. The seminar was attended by key stakeholders, including Chairman of the Prime Ministerâ€™s Task Force for Housing Hafiz Muhammad Nauman, LCCI President Mian Abuzar Shad, Vice President Shahid Nazir Chaudhry, and Convener of the Real Estate Standing Committee Muhammad Rafiq Hasrat. A large audience of stakeholders deliberated on the tax-related issues plaguing the sector and explored viable reforms to revitalize investment and growth. Hafiz Muhammad Nauman highlighted initiatives by the federal and Punjab governments to support the construction and real estate sectors, acknowledging their critical contribution to economic growth and job creation. He emphasized that a thriving real estate sector is essential for a robust economy. LCCI President Mian Abuzar Shad and Vice President Shahid Nazir Chaudhry expressed serious concerns over the heavy tax burdens that have hindered investment in the sector. They proposed lowering the tax rate to a uniform one percent and advocated for the reduction or abolition of Federal Excise Duty on property transactions to encourage affordability and attract investments. Such measures, they argued, would not only rejuvenate the real estate sector but also have a positive impact on the 50 allied industries connected to construction. Muhammad Rafiq Hasrat, Convener of the LCCI Standing Committee on Real Estate, provided an in-depth analysis of the existing tax framework, including profit taxes, capital gains taxes, federal excise duties, and advance sales taxes. He pointed out that the additional taxes introduced under the Finance Act 2024, along with higher rates, have dampened investor confidence and slowed down real estate activities, leading to stagnation in the sector. President Mian Abuzar Shad underscored the broader economic implications of a struggling real estate market, stressing its role as the backbone of the economy. He highlighted that meaningful progress requires immediate tax relief and the introduction of investor-friendly policies. He called upon the government to urgently address these taxation issues, emphasizing that the real estate sector has the potential to transform Pakistanâ€™s economy by generating jobs and boosting allied industries. The seminar concluded with a unified appeal to the government to prioritize the revival of the real estate sector by implementing tax reforms. Mian Abuzar Shad appreciated the governmentâ€™s focus on the construction industry but reiterated that alleviating the tax burden is essential for unlocking the sectorâ€™s full potential and fostering sustainable economic growth.

Date: 2025-01-16

Details: The Sales Tax Act, 1990, clearly outlines the procedures for service of notices, orders, or decisions to taxpayers or other persons under its jurisdiction. These procedures are governed by Section 56 of the Act, which specifies the acceptable modes of service to ensure proper communication and compliance. Section 56: Service of Orders, Decisions, and Notices Subsection (1): Service on Resident Individuals For resident individuals, notices, orders, or requisitions are deemed properly served if: 1. Personal Service: The notice is served directly to the individual. If the individual is under legal disability or is a non-resident, the notice may be served on their representative. 2. Registered Post or Courier: The notice is sent via registered post or courier service to the individualâ€™s usual or last known address in Pakistan. 3. Service Under Civil Procedure: The notice is served in accordance with the procedures for serving summons under the Code of Civil Procedure, 1908 (Act V of 1908). 4. Electronic Communication: The notice is sent electronically through email or to the e-folder maintained for e-filing of sales tax and Federal excise returns by the registered person. Subsection (2): Service on Other Persons For entities other than resident individuals, notices, orders, or requisitions are considered properly served if: 1. Personal Service: The notice is served on the representative of the person. 2. Registered Post or Courier: The notice is sent via registered post or courier service to the registered office or address designated for receiving notices under the Act. If no such address exists, the notice is sent to any office or place of business of the person in Pakistan. 3. Service Under Civil Procedure: The notice is served as per the procedures for serving summons under the Code of Civil Procedure, 1908. 4. Electronic Communication: The notice is sent electronically through email or to the e-folder maintained for e-filing purposes. Subsection (3): Service on Dissolved Associations If an association of persons is dissolved, any notice, order, or requisition may be served on the principal officer or any member of the association who held that position immediately prior to dissolution. Subsection (4): Service on Discontinued Businesses For businesses that have been discontinued, notices, orders, or requisitions can be served directly on the individual or their representative at the time of business discontinuation. Subsection (5): Validity of Service Once a notice under this Act has been complied with in any manner, its validity cannot be questioned. In summary, Section 56 ensures a structured and reliable framework for serving notices under the Sales Tax Act, 1990, accommodating various scenarios to facilitate compliance and legal enforcement.

Date: 2025-01-16

Details: Karachi, January 16, 2025 â€“ Officers of Inland Revenue (IR) have been provided with extensive mechanisms under the Sales Tax Act, 1990, to ensure the recovery of outstanding sales tax arrears. These measures are outlined in Section 48 of the Act, offering a comprehensive framework to address cases of unpaid taxes. Section 48: Recovery of Arrears of Tax Under subsection (1) of Section 48, IR officers are empowered to employ various methods to recover dues. These include: 1. Deductions from Amounts Owed: IR officers can deduct the due tax directly from any funds payable to the defaulter that are within the control of the IR, Income Tax, Customs, or Central Excise Departments. 2. Third-Party Payments: Officers may issue a written notice to any person holding or likely to hold money on behalf of the defaulter, requiring them to pay the specified amount directly to the IR. 3. Restricting Goods Movement: The removal of goods from the defaulterâ€™s business premises can be halted until the arrears are fully settled. 4. Blocking Imports and Bank Accounts: Officers may issue written notices to stop the clearance of imported or manufactured goods or to attach the defaulterâ€™s bank accounts. 5. Sealing Business Premises: If required, the business premises of the defaulter can be sealed until the outstanding taxes are recovered. 6. Attachment and Sale of Assets: IR officers have the authority to attach and sell movable or immovable assets of the defaulter or any guarantor who fails to meet their obligations under guarantees or bonds. Restrictions and Appeals However, the Act also provides safeguards to taxpayers. IR officers cannot issue recovery notices if the taxpayer has filed an appeal under Section 45B or Section 46, provided the appeal remains undecided and the taxpayer has paid at least 10% of the disputed tax amount. Write-Off Provisions Subsection (1A) grants the Federal Board of Revenue (FBR) or its authorized officers the authority to write off arrears if they are deemed irrecoverable. This process is governed by rules prescribed by the Board. Legal Authority Subsection (2) empowers IR officers with the same authority as Civil Courts under the Code of Civil Procedure, 1908, for recovering amounts due under a decree. Subsection (3) extends these provisions to include assistance in tax collection and recovery under international agreements, treaties, or inter-governmental arrangements. In conclusion, the Sales Tax Act, 1990, equips Inland Revenue officers with diverse and robust tools to recover sales tax arrears while maintaining provisions to protect taxpayer rights during appeals. This balanced approach ensures efficient tax collection while upholding procedural fairness.

Date: 2025-01-16

Details: Islamabad, January 16, 2025 â€“ The Federal Board of Revenue (FBR) has taken a significant step towards enhancing its data management capabilities by announcing the establishment of a dedicated Data Governance Office. This initiative aligns with the recently approved Data Governance and Information Security Policy of the FBR. According to an official notification, the Data Governance Office will operate under the Directorate General of IT & DT. The office has been tasked with ensuring the efficient management, acquisition, and integration of data across various FBR departments and field offices. The notification outlined the creation of two key posts within the office, along with their respective responsibilities: 1. Chief (Chief Data Management & Governance): â€¢ Overseeing the implementation of the Data Governance Policy across the organization. â€¢ Managing and utilizing data effectively, including conducting advanced analytics. â€¢ Coordinating and liaising with all FBR wings and field offices to ensure compliance with the data governance policy. â€¢ Driving innovation in data management practices, particularly through the use of Artificial Intelligence (AI) and Machine Learning (ML) technologies. â€¢ Handling all requests for information and overseeing the development of Management Information System (MIS) reports, ensuring that these are routed through the Chief (Data Management & Governance). 2. Chief (Data Acquisition & Integration): â€¢ Establishing partnerships and liaising with third parties to acquire relevant data. â€¢ Identifying critical fields of data necessary for improved decision-making and operations. â€¢ Ensuring the seamless integration of data to optimize revenue mobilization and the Broadening of Tax Base (BTB) initiatives. â€¢ Monitoring the flow of data into the FBR system and recommending corrective actions in cases of non-compliance. â€¢ Disseminating actionable data to FBR field formations and ensuring its transparent and efficient utilization. This newly established Data Governance Office aims to modernize the FBRâ€™s data infrastructure and support its broader objectives of improving transparency, enhancing operational efficiency, and leveraging technology for better tax administration. The FBRâ€™s commitment to adopting innovative solutions reflects its determination to strengthen Pakistanâ€™s revenue collection framework and foster economic growth.

Date: 2025-01-15

Details: Karachi, January 14, 2025 â€” The Federal Board of Revenue (FBR) has unveiled a detailed procedure governing the actions of Inland Revenue (IR) officers in the arrest of individuals suspected of violating tax laws. The process, established under Section 37B of the Sales Tax Act, 1990, outlines clear guidelines to ensure compliance with legal and procedural safeguards. The FBR has emphasized the importance of adherence to these protocols to uphold fairness and transparency in enforcement actions. Key Provisions of Section 37B Section 37B of the Sales Tax Act, 1990, serves as the foundation for the arrest procedure. Below are the main provisions: 1. Immediate Notification to Special Judge When an IR officer, authorized by the FBR, arrests a person under Section 37A of the Act, they must promptly inform the Special Judge. The Special Judge will then provide directions regarding the time, place, and date for producing the arrested individual, and the officer is obligated to comply with these directives. 2. Production Before Judicial Authority Any person arrested under the Act must be presented before the Special Judge or, if unavailable, the nearest Judicial Magistrate, within 24 hours of the arrest. This timeframe excludes the duration required for travel to the relevant judicial authority. 3. Bail Considerations Upon presentation of the individual, the Special Judge may decide on granting bail based on a review of the available records and after hearing the prosecution. Bail can be granted with or without sureties. However, the Special Judge retains the authority to cancel bail at a later stage if deemed necessary, following due process. 4. Detention and Custody The Judicial Magistrate or Special Judge may authorize the detained individual to remain in custody to facilitate their earliest production before the appropriate judicial authority. This custody period must not exceed 14 days and is aimed at ensuring thorough inquiry or investigation. 5. Inquiry by Inland Revenue Officers An IR officer conducting an inquiry has the same powers as a police officer under the Code of Criminal Procedure, 1898. However, these powers must be exercised in accordance with Section 37B. During the inquiry, the officer must document the arrest details and maintain transparency in their investigation. Record Maintenance The FBR mandates that all IR officers maintain a â€œRegister of Arrests and Detentions,â€ where they record critical details such as: â€¢ Name and particulars of the arrested individual â€¢ Time and date of arrest â€¢ Evidence or items recovered â€¢ Names of witnesses involved â€¢ Day-to-day progress of the inquiry This register must be available for review by the Special Judge when requested. Safeguards and Rights To safeguard the rights of individuals, the FBR has incorporated several checks and balances: â€¢ If the inquiry reveals insufficient evidence, the IR officer must release the individual and submit a report to the Special Judge for discharge. â€¢ A Magistrate of the First Class may record any statement or confession during the inquiry, ensuring compliance with Section 164 of the Code of Criminal Procedure. â€¢ The FBR, with ministerial approval, can authorize additional officers to exercise these powers, ensuring adequate oversight. Importance of Compliance The FBR has reiterated that the arrest procedure under Section 37B is a vital tool for maintaining accountability in tax administration. However, strict adherence to these provisions is essential to prevent misuse of authority and protect the rights of individuals. Broader Implications This procedural framework highlights the FBRâ€™s commitment to maintaining a balance between enforcing tax compliance and respecting the rule of law. By clearly defining the responsibilities of IR officers and judicial authorities, the FBR aims to foster transparency and build public trust in its operations. In summary, the arrest procedures outlined by the FBR under Section 37B provide a robust mechanism for Inland Revenue officers to conduct inquiries while ensuring fairness and legal compliance. These measures underscore the FBRâ€™s role in upholding the integrity of Pakistanâ€™s tax system and promoting accountability.

Date: 2025-01-15

Details: Karachi, January 15, 2025 â€“ A startling revelation has emerged from the Federal Board of Revenueâ€™s (FBR) official tax collection data, exposing that the vast network of FBR officials contributed a mere 2% to the overall tax collection efforts. This revelation highlights a pressing need for systemic reforms within Pakistanâ€™s premier tax authority. The FBRâ€™s tax collection report for the fiscal year 2023-24 underscores the boardâ€™s overwhelming dependence on voluntary payments and automated mechanisms, such as withholding taxes and advance tax systems, for revenue generation. Astonishingly, the direct tax collection through audit-driven efforts amounted to only Rs 127 billion, representing a meager 1.37% of the total direct tax revenues. The audit process, aimed at uncovering arrears and generating current demand, has thus delivered limited returns. The FBR acknowledged the need for field formations to intensify efforts in recovering outstanding tax demands. A deeper analysis of the data reveals that total sales tax collection during 2023-24 stood at an impressive Rs 3,087 billion. However, Rs 1,846 billion of this was generated at the import stage, while Rs 1,223 billion came from domestic supplies. Notably, the electricity and petroleum (POL) sectors contributed Rs 365 billion and Rs 145 billion, respectively, to the sales tax revenue. Taxpayers, practitioners, and other stakeholders have questioned the efficacy of FBRâ€™s operations. Alarming figures reveal that out of approximately 260,000 manufacturers in the country, only 42,000 are registered with the FBR. This glaring discrepancy points to gaps in enforcement and compliance mechanisms. Despite this underwhelming performance, the FBR recently announced plans to procure 1,010 new vehicles for its field staff to enhance enforcement capabilities. Critics argue that many Inland Revenue Service (IRS) officers already have department-provided vehicles, while also receiving conveyance allowances. Over the past decade, the FBR has seen 15 chairmen, each promising significant reforms in tax collection. Although tax revenues have grown, the tax-to-GDP ratio remains below double digits, a metric that underscores the inefficiency of the existing tax administration framework. The urgent need for robust reforms and accountability within the FBR is imperative to bolster Pakistanâ€™s fiscal health and economic stability.

Date: 2025-01-15

Details: ISLAMABAD: The government of Pakistan is set to extend the regulatory duty on steel products for an additional three months, according to reliable sources. This decision comes in light of recommendations made by the Tariff Policy Board (TPB) to sustain support for the domestic steel industry. Reports indicate that the regulatory duty of 5% and 10% on flat steel products, initially imposed under the Finance Act 2024, will now remain in effect until March 31, 2025. This measure, aimed at providing temporary protection to the local steel industry, was originally set to expire on December 31, 2024. The extension aligns with the framework of the National Tariff Policy 2019-24, which mandates that all tariff-related proposals must undergo thorough examination by the Tariff Policy Centre before being submitted for Cabinet or Parliamentary approval. In response to industry appeals for continued regulatory support, the Tariff Policy Board convened its 61st meeting on December 26, 2024. Following deliberations, the Board recommended extending the regulatory duty on 36 tariff lines of flat steel products until March 31, 2025. It further specified that the existing regulatory duty rates of 5% and 10% would revert to their original levels of 0% and 5%, respectively, effective April 1, 2025. The Ministry of Commerce, in a summary presented to the Economic Coordination Committee (ECC), highlighted the federal governmentâ€™s authority under Sub-Section 3 of Section 18 of the Customs Act, 1969, to implement regulatory duties. The Ministry proposed the extension of regulatory duties on relevant iron and steel flat products as per the TPBâ€™s recommendations. Official documents reveal that International Steel Limited has requested a further extension of the regulatory duty on various finished flat steel products until June 30, 2025. Additionally, the company suggested imposing a 10% regulatory duty on Galvalume steel coils and sheets to curb circumvention of anti-dumping duties ranging from 5.36% to 40%. However, the TPBâ€™s earlier recommendation in May 2024 capped regulatory duty changes to a sunset clause of December 31, 2024. During the TPBâ€™s discussions, the Joint Secretary (Tariff Policy) clarified that current tariff structures on flat steel products include customs duties (11%-20%), additional customs duties (2%-6%), regulatory duties (5%-10%), and anti-dumping duties (5.36%-40.47%). He noted that imports of flat steel products increased by only 4% in value during July-November 2024 compared to the previous fiscal year. Meanwhile, imports of Galvalume steel decreased by 13% in value and 8% in quantity, contradicting claims of a surge. The Joint Secretary further cautioned that maintaining or increasing regulatory duties could negatively impact downstream industries. He also emphasized Pakistanâ€™s commitment under the IMF program to avoid increasing trade-weighted average tariffs and to work towards their reduction during the programâ€™s duration.

Date: 2025-01-14

Details: January 14, 2025 Lahore, January 14, 2025 â€“ The Punjab government has intensified its efforts to broaden the tax base by extending initiatives to the district level, aiming to incorporate more taxable services into the formal tax net. This step is part of a broader strategy to enhance revenue collection and ensure equitable compliance. The Punjab Revenue Authority (PRA) has unveiled a detailed plan to identify and bring unregistered tax defaulters into the tax framework. Leveraging the expertise of officials at the district and tehsil levels, the PRA aims to systematically gather data on individuals and entities engaged in taxable services but not yet registered. Speaking to the media on Tuesday, a PRA spokesperson explained that the task of expanding the tax base at the district level has been assigned to the Additional Deputy Commissioner (General). At the tehsil level, the respective Assistant Commissioners will oversee data collection efforts. These officials will work under the provisions of the Punjab Sales Tax on Services Act, focusing on unregistered businesses and service providers. The initiative targets a wide range of unregistered entities, including marriage halls, hotels, motels, guest houses, catering services, restaurants, cable TV operators, and internet service providers. Additionally, data will be collected on builders, real estate agents, property dealers, automobile dealers, beauty parlors, salons, clinics, tour operators, commission agents, and a total of 21 identified service categories. To facilitate the smooth execution of this initiative, the PRA has granted officials special powers under relevant sections of the PRA Act for a two-year period. This authorization enables them to effectively gather and analyze data, ensuring that non-compliant businesses are brought into the tax net. The PRA spokesperson emphasized that this measure is a significant step toward strengthening Punjabâ€™s revenue framework. By broadening the tax base and targeting unregistered individuals and businesses, the government aims to enhance tax compliance and reduce reliance on external funding sources. This district-level initiative is expected to contribute substantially to the provinceâ€™s financial health, fostering a more robust and transparent tax system while promoting fairness and accountability in revenue collection.

Date: 2025-01-14

Details: Islamabad, January 14, 2025 â€“ The Senate Standing Committee on Finance and Revenue has raised concerns over the Federal Board of Revenue (FBR)â€™s recent acquisition of 1,010 new Honda cars for its officials. The committee has formally directed the FBR chairman to provide detailed information regarding this procurement, citing the need for transparency and fiscal responsibility. In its directive, the Senate committee emphasized the importance of a clear justification for the purchase, especially considering the significant number of vehicles involved. The committee has requested an explanation of the necessity of this acquisition at this time and its alignment with the FBRâ€™s operational goals. Additionally, the Senate committee has sought information on the procurement process, including adherence to relevant guidelines, tendering or bidding procedures, and the approvals obtained. These inquiries aim to ensure that the transaction complies with principles of financial prudence, accountability, and transparency. The committeeâ€™s notice comes after the FBR announced the purchase of 1,010 Honda City 1.2L CVT vehicles as part of its efforts to enhance enforcement capabilities and curb tax evasion. According to FBR sources, this acquisition is a strategic move to bolster operational efficiency and expand the tax net. Official documents reveal that the FBR issued a Letter of Intent (LoI) to Honda Atlas Cars (Pakistan) Limited, confirming the procurement. The vehicles will be allocated to officers in BS-17 and BS-18 grades within the Inland Revenue Service (IRS) and Pakistan Customs Service (PCS). These officers play a critical role in enforcing compliance, particularly in implementing key systems such as the Point of Sale (POS) system, track and trace mechanisms, and digital invoicing protocols. The FBR has stated that these vehicles are intended to facilitate field operations, improve tax collection efficiency, and enhance monitoring capabilities. By targeting non-compliant sectors and reducing tax evasion, the initiative aims to improve overall compliance and transparency in the tax system. The Senate committeeâ€™s intervention underscores the importance of oversight in public spending, ensuring that such significant expenditures are justified and contribute effectively to the nationâ€™s economic goals. The FBR is expected to present its detailed report in the coming weeks.

Date: 2025-01-14

Details: Karachi, January 14, 2025 â€“ The Federal Board of Revenue (FBR) has revealed that the financial sector emerged as the largest beneficiary of income tax relief during the tax year 2024. The findings were disclosed in a detailed report highlighting the exemptions and concessions provided across various sectors. The FBR reported that a total of Rs 459 billion in income tax relief was granted in the form of exemptions and concessions during the period. Of this amount, the financial sector alone accounted for a significant 25.27%, availing Rs 116 billion worth of tax concessions or exemptions. This underscores the sectorâ€™s dominant position in benefitting from the FBRâ€™s tax relief measures. Breakdown of Tax Relief Across Sectors According to the FBR, the pension segment was the second-largest beneficiary, receiving Rs 78.34 billion in tax exemptions during the year. This substantial relief reflects the governmentâ€™s focus on supporting retired individuals and reducing their financial burden. Social security programs ranked third, with Rs 61 billion in tax relief. Taxpayers classified under Clause 56 of Part 4 of the Second Schedule of the Income Tax Ordinance, 2001, benefited from Rs 60 billion worth of exemptions, according to the FBR. The FBR also reported that Rs 57.42 billion in tax relief was extended to state apparatus, indicating the prioritization of essential government functions. Additionally, the energy and mining sector benefited from Rs 41.35 billion in exemptions, supporting critical industries vital to national development. Other Beneficiaries The health and pharmaceutical sectors collectively received Rs 14.53 billion in tax relief, while the manufacturing sector availed Rs 13.61 billion. At the lower end of the spectrum, the education sector, despite its importance, received the least tax benefit among the top 10 sectors, amounting to Rs 6.52 billion. FBRâ€™s Perspective The FBR highlighted that these tax relief measures are part of a broader strategy to stimulate economic growth, support essential sectors, and provide financial ease to specific segments of the economy. By offering significant concessions to the financial sector and other industries, the FBR aims to foster economic stability and incentivize growth in key areas. These findings reinforce the pivotal role of the FBR in shaping fiscal policies that balance revenue generation with economic support.

Date: 2025-01-14

Details: Karachi, January 14, 2025 â€“ The Federal Tax Ombudsman (FTO) has instructed the Federal Board of Revenue (FBR) to clarify issues surrounding the withholding tax deduction on internet usage. The directive comes in response to a complaint regarding discrepancies in tax deduction certificates issued by M/s. Wateen Telecom Ltd. The complainant, a salaried taxpayer and long-time user of M/s. Wateen Telecom Ltd., highlighted that the company failed to issue a correct tax deduction certificate for the year. Historically, the company provided certificates reflecting a 15% deduction as per the Income Tax Ordinance, 2001, but this yearâ€™s certificate did not align with the payments made. The complainant approached the FBR for resolution but received no satisfactory response, prompting the intervention of the FTO. Investigation Details The FTO forwarded the complaint to the Secretary of the Revenue Division under section 10(4) of the FTO Ordinance and section 9(1) of the Federal Ombudsmen Institutional Reforms Act, 2013. In response, the Commissioner-IR, Zone-V RTO, Lahore, stated that the FBR does not maintain detailed records of internet usage or billing information for taxpayers. They argued that there was no malintent by the department and requested the complaint be dismissed. During the hearings, the complainant reiterated that M/s. Wateen Telecom Ltd. typically provides accurate certificates but had failed to do so this year. The company separated the monthly internet line rent into two components, excluding one from the tax withholding calculation without citing relevant laws. FTOâ€™s Observations The FTOâ€™s findings noted that although the telecom company responded to the queries and explained the billing differences, it failed to justify the legal basis for altering the tax deduction method. Furthermore, the FTO criticized the FBR for its lack of oversight, highlighting that other telecom companies might adopt similar practices, leading to broader issues. The FTO deemed this negligence as maladministration under section 2(3)(ii) of the FTO Ordinance, 2000. Recommendations The FTO directed FBRâ€™s Members IR-Operations and Policy to investigate the explanations provided by M/s. Wateen Telecom Ltd. and deliver findings based on the relevant laws. The FTO emphasized the need for the FBR to proactively address such matters to protect taxpayersâ€™ rights and maintain accountability within the telecom sector.

Date: 2025-01-14

Details: ISLAMABAD: The Federal Board of Revenue (FBR) has officially activated the International Centre of Tax Excellence (ICTE) to enhance international tax cooperation, revenue forecasting, tax analysis, and the overall design and delivery of tax administration. This initiative aims to maximize revenue collection and modernize Pakistanâ€™s tax system. In a recent notification, the FBR has assigned additional responsibilities to several Inland Revenue Service (IRS) officers (BS-18 to BS-20) to oversee the ICTEâ€™s operations for a three-month period or until the appointment of regular staff. The officers include Samira Mahmood Quiz (IRS/BS-20), Chief of International Tax Operations; Frida Muhammad (IRS/BS-19), Chief (OPS) of International Taxes; and Mehdi Hassan (IRS/BS-18), Secretary (OPS) for AEOI, as per the Directorate General of International Tax Operations, FBR. Functions of the ICTE Under Section 230J of the Income Tax Ordinance 2001, the ICTE has been established to contribute significantly to tax policy development. Its primary objectives include drafting model tax policies, conducting interdisciplinary research, fostering international tax cooperation, and organizing seminars and workshops on international taxation. It also focuses on building the capacity of Inland Revenue officers, enhancing tax analysis, and closing tax gaps within existing provisions. Governance Structure The ICTE will operate under a robust governance framework. A Nominating Committee comprising the Minister-in-Charge, Secretary Revenue Division, and Secretary Finance will recommend candidates for the roles of Executive Director and independent members of the Executive Committee to the federal government. The Executive Committee will include the FBR Chairman, Member (IR-Policy), Member (IR Operations), and two independent members appointed by the federal government. The Executive Director, serving as the committeeâ€™s secretary, will also act as the chief executive of the institute, overseeing its daily operations and ensuring its independence. Staffing and Data Handling At least 50% of the ICTEâ€™s workforce will comprise serving or retired Inland Revenue officers with over five years of experience in tax policy or administration. Staff remuneration and terms will be determined by the federal government. The FBR may establish monitoring committees and appoint project directors to facilitate the instituteâ€™s establishment. Additionally, any taxpayer data provided to the ICTE for analysis will be anonymized to ensure confidentiality in compliance with Section 216 of the Income Tax Ordinance. This step is part of FBRâ€™s broader vision to modernize Pakistanâ€™s tax administration and enhance fiscal governance.

Date: 2025-01-13

Details: Karachi, January 13, 2025 â€“ The Classification Committee of Pakistan Customs has issued its verdict on the classification of â€œKola Vanilla Extract,â€ a product imported by Pepsi Cola International. This decision, forwarded by the Collectorate of Customs (Appraisement) Islamabad, resolves a long-standing debate about the appropriate tariff heading for the product. The dispute arose when M/s Pepsi Cola International sought clearance for â€œKola Vanilla Extractâ€ under Pakistan Customs Tariff (PCT) heading 1302.1900 via Goods Declaration No. 602, dated December 30, 2013. However, the Directorate General of Audit (Customs & Petroleum) Lahore raised an audit objection during their 2013-14 review of Islamabad Dry Port, asserting that the extract should instead fall under PCT heading 3302.1010. This heading carries a 10% customs duty and a 50% federal excise duty (FED), as it pertains to flavors and concentrates used in aerated beverages. According to Chapter 13â€™s introductory notes in the First Schedule of the Customs Act 1969, the disputed PCT heading excludes preparations based on odoriferous substances for beverage manufacture. Similarly, Chapter 33â€™s notes exclude vegetable extracts of heading 13.02, emphasizing the productâ€™s misclassification. Upon detailed examination, the Classification Committee ruled that â€œKola Vanilla Extract,â€ a mixture of kola and vanilla extracts, propylene glycol, glycerin, sugar, and caramel, does not qualify as a raw extract under Chapter 13.02. Applying General Interpretative Rules (GIR) 1 and 3(b), the committee determined that the extractâ€™s essential character lies in its use as a beverage concentrate. Consequently, the product is classified under PCT heading 2106.9010. The committeeâ€™s findings underscore the importance of correctly interpreting tariff rules and chapter notes. The decision emphasizes that the ruling applies strictly to the documented specifications of the product as provided by the referring Collectorate. Any subsequent discovery of false or incomplete information could render the ruling null and void. This classification decision resolves a significant issue for Pepsi Cola International, aligning the productâ€™s tariff heading with its actual characteristics and usage, and upholding the integrity of customs regulations in Pakistan.

Date: 2025-01-13

Details: Finance Minister Muhammad Aurangzeb on Monday expressed optimism that Pakistan will successfully meet its tax collection target for the fiscal year 2024-25. During a televised interview on Bloombergâ€™s program, The Asia Trade, Aurangzeb highlighted that Pakistanâ€™s tax-to-GDP ratio had risen to 10.8% by December 2024. Aurangzeb emphasized that the country is on track to achieve its tax collection goals, stating that reaching the target is essential for Pakistanâ€™s fiscal sustainability. He reaffirmed the governmentâ€™s commitment to expanding and deepening the tax base to improve revenue collection and economic stability. In July 2024, Pakistan signed a 37-month, $7 billion Extended Fund Facility (EFF) with the International Monetary Fund (IMF) to promote economic stability and inclusive growth. In September, the IMF Executive Board approved the EFF, enabling Pakistan to receive the first tranche of Special Drawing Rights (SDR) worth $760 million, equivalent to $1.03 billion. Aurangzeb confirmed that the IMF mission for the first official review of the program is expected to arrive between mid to late February 2025. Discussing macroeconomic indicators, Aurangzeb stated that the government aims for a GDP growth rate of 3-3.5% this fiscal year, with plans to increase it to 6% within the next two to three years. The governmentâ€™s primary focus is to transition the economy to an export-led model, which he believes is crucial for sustainable growth. Aurangzeb expressed confidence in further credit rating upgrades for Pakistan during the ongoing fiscal year. He noted that all three major credit rating agencies had improved their outlook on Pakistan over the past 8-10 months. However, he emphasized the need for Pakistan to return to the single B category to regain access to the international capital market. Aurangzeb shared plans to tap into the Panda bond market and the Chinese capital market, acknowledging past missed opportunities in this regard. Pakistan is preparing to launch its inaugural Panda bond issue within six to nine months, aiming to raise $200-250 million. China International Capital Corporation Limited (CICC) has been appointed as an advisor for this initiative. Currently in Hong Kong, Aurangzeb is attending the 18th Asian Financial Forum (AFF), where he is engaging with senior officials from leading Asian financial institutions. He is also meeting prominent members of the Pakistani community in Hong Kong to discuss opportunities and challenges. The AFF serves as a significant platform for finance and business leaders to address key issues affecting the global economy from an Asian perspective, and Aurangzebâ€™s participation underscores Pakistanâ€™s commitment to strengthening its economic ties in the region.

Date: 2025-01-13

Details: Islamabad, January 13, 2025 â€“ Prime Minister Muhammad Shehbaz Sharif on Monday expressed his desire that artificial intelligence should take control the clearance at Pakistan Customs. He desired that the faceless customs system should be shifted to artificial intelligence by minimizing the human intervention. The prime minister chaired a review meeting on the matters related to the Federal Board of Revenue (FBR). Prime Minister Muhammad Shehbaz Sharif on Monday said that after functioning in Karachi, the faceless customs assessment system should be broadened and implemented in other cities as soon as possible so that all imports across the country could benefit from this system. The meeting was attended by Minister for Economic Affairs Ahad Khan Cheema, Minister for Law and Justice Azam Nazeer Tarar, Minister of State for Finance and Revenue Ali Pervez Malik, and other senior officials, PM Office Media Wing said in a press release. PM Shehbaz desires implementation of faceless customs assessment system in other cities PM desires implementation of faceless customs assessment system in other cities Prime Minister Shehbaz Sharif observed that significant progress had been achieved in the digitization and reforms within the FBR in previous months, adding for the first time in history, a system with faceless digitization system had been introduced in the customs process, marking a significant milestone in the digitization of the FBR. The prime minister directed the Ministry of Information Technology and Telecommunication and FBR to work together to further improve the faceless customs assessment system. PM Shehbaz also directed for the development of a comprehensive strategy for the implementation of the track and trace system in various industrial sectors. The meeting was briefed over the recent FBR reforms. The faceless customs system at all Karachi port terminals would be made fully operational by the end of February 2025, it was told. Besides, efforts were underway to ensure its operation nationwide soon. A central control room was being established to monitor the faceless customs system, it was further added. The meeting was apprised that body cameras and tablets would be used to make the inspection recording system more transparent. Whereas mobile signal jammers and CCTV cameras were also being installed at all terminals to enhance the transparency of the inspection system. A transparent recruitment process for the new customs system had been initiated while a track and trace system had been implemented in all industrial units of the tobacco, fertilizers, sugar, and cement industries, the meeting was briefed. The implementation of the track and trace system led to a significant increase in revenue from the tobacco, sugar, cement, and fertilizer industries in the fiscal year 2023-2024 compared to the previous corresponding year. Further improvement in revenue from these industries was expected with the full implementation of the track and trace system this year, it was added. The meeting was told that under the prime ministerâ€™s directive, the upgradation of the web-based One Customs began and its design was expected to be completed by the end of March.

Date: 2025-01-13

Details: Karachi, January 13, 2025 â€“ A heated debate has erupted among taxpayers over the Federal Board of Revenueâ€™s (FBR) plan to purchase 1,010 Honda City 1.2 L CVT cars as part of its initiative to strengthen enforcement measures. Social media platforms have been abuzz with critical messages from taxpayers and stakeholders, expressing frustration and skepticism about the decision. Critics argue that using taxpayersâ€™ money to procure such a large fleet of vehicles for the FBRâ€™s field staff lacks justification. Many are demanding a clear rationale for the expenditure and an explanation of the anticipated benefits. The FBR has defended the move, emphasizing that the acquisition aims to enhance its operational capabilities and improve enforcement against tax evasion. According to an official document, the FBR has issued a Letter of Intent (LoI) to Honda Atlas Cars (Pakistan) Limited, finalizing the purchase of the vehicles. These cars are slated for allocation to officers in BS-17 and BS-18 grades, who play a critical role in field enforcement activities. FBR officials explained that the vehicles are essential for enforcing Point of Sale (POS) systems, e-invoicing, and the Track and Trace system. Currently, officers often use personal or rented vehicles, which not only undermines the authority of the state but also exposes personnel to security risks. â€œFor effective enforcement in non-salaried sectors, the FBRâ€™s field presence must be visible,â€ an official remarked. The department also clarified that these vehicles are strictly for official use and will be marked with distinct stickers to discourage personal use. As part of the procurement plan, the FBR will make an upfront payment of Rs. 3 billion to cover the full cost of 500 units and a partial payment for the remaining 510 units. The balance will be settled upon the delivery of the first batch of 510 cars. The phased delivery process is expected to conclude by May 2025. Despite the FBRâ€™s assurances, public sentiment remains divided. Many argue that such a significant expenditure demands greater transparency, with calls for the FBR to provide detailed projections on how this investment will enhance tax collection and enforcement. As the controversy unfolds, the FBRâ€™s efforts to justify its decision will be closely scrutinized, particularly as it navigates the balance between operational efficiency and public accountability.

Date: 2025-01-12

Details: Islamabad, January 12, 2025 â€“ The Federal Board of Revenue (FBR) has announced the purchase of 1,010 Honda City 1.2 L CVT vehicles to bolster its enforcement efforts against tax evasion. This significant acquisition is part of the FBRâ€™s strategy to enhance its operational capabilities and expand its tax net. According to an official document, the FBR has issued a Letter of Intent (LoI) to Honda Atlas Cars (Pakistan) Limited, confirming the purchase. FBR sources reveal that the vehicles will be allocated to officers of the Inland Revenue Service (IRS) and Pakistan Customs Service (PCS) in BS-17 and BS-18. The cars are intended to support a more robust enforcement drive, targeting tax evasion and encouraging compliance among non-compliant sectors. These officers will be tasked with ensuring the effective implementation of key systems, including the Point of Sale (POS) system, the track and trace mechanism, and newly introduced digital invoicing compliance. This initiative aims to streamline tax collection and improve transparency within the system. Special Specifications The FBR has requested Honda Atlas Cars to include several custom features in the vehicles, such as: â€¢ Navigation system with a reverse camera. â€¢ High-grade interior for enhanced comfort. â€¢ Free periodic maintenance for up to 20,000 kilometers or 12 months. â€¢ An extended warranty covering four years or 100,000 kilometers, subject to regular maintenance at authorized Honda dealerships. â€¢ FBR logos prominently displayed on the front doors and windscreen. â€¢ A tracker system with one-year service charges of Rs 8,500 (exclusive of tax), with costs borne by the FBR. Financial Details The FBR will pay upfront Rs 3 billion for purchase of 1,010 vehicles (as full payment for 500 units and partial payment of balance amount for remaining 510 units), and the balance payment shall be made as and when delivery of the first batch is completed i.e. 510 units The balance will be cleared upon the delivery of the first batch of vehicles. The phased delivery process is expected to be completed by May 2025. Strategic Impact This large-scale acquisition underscores the FBRâ€™s commitment to strengthening its enforcement mechanisms. By equipping officers with advanced vehicles, the organization aims to enhance mobility, efficiency, and effectiveness in its operations. This move is expected to significantly contribute to cracking down on tax evasion and integrating more entities into the formal tax system.

Date: 2025-01-12

Details: Islamabad, January 12, 2025 â€“ Prime Minister Muhammad Shehbaz Sharif has announced a reward of Rs 15 million for the team responsible for implementing the innovative Faceless Customs Assessment System, marking a major leap forward in modernizing Pakistanâ€™s customs operations. The announcement came during a meeting between Prime Minister Shehbaz and Chief Collector Customs Karachi Zone, Jameel Nasir. Shehbaz praised Nasir and his team for their exceptional efforts in developing and executing this cutting-edge system, which is designed to enhance transparency, efficiency, and service delivery in customs operations across the country. â€œThanks to the Faceless Customs Assessment System, we have witnessed a remarkable improvement in the transparency and effectiveness of customs operations,â€ stated Prime Minister Shehbaz. He emphasized that this system represents a key milestone in creating a business-friendly environment and boosting investor confidence. Shehbaz underscored the importance of incorporating state-of-the-art technologies, particularly artificial intelligence, to further enhance the systemâ€™s capabilities. He directed relevant authorities to ensure the customs process becomes world-class, foolproof, and aligned with international standards. The Faceless Customs Assessment System aims to eliminate human interaction in critical customs procedures, reducing corruption and delays. It also simplifies processes for traders and businesses, fostering a more favorable environment for commerce and investment. Prime Minister Shehbaz stressed the need for ongoing modernization of the customs framework, ensuring that it remains fair, transparent, and efficient. He highlighted that such initiatives not only improve governance but also play a crucial role in Pakistanâ€™s economic growth. â€œThe Faceless Customs Assessment System is a cornerstone in Pakistanâ€™s journey toward economic digitalization and will significantly contribute to enhancing our competitiveness globally,â€ Shehbaz remarked. This system is also a vital step in the digital transformation of the Federal Board of Revenue (FBR). By leveraging technology, the FBR aims to streamline operations, improve taxpayer compliance, and enhance revenue collection. Prime Minister Shehbaz concluded the meeting by reiterating the governmentâ€™s commitment to reforms that facilitate economic growth while ensuring accountability and transparency. He expressed confidence that such innovative solutions would pave the way for a more robust and efficient economic system. The reward of Rs 15 million is a testament to Shehbazâ€™s recognition of excellence and his focus on incentivizing efforts that drive innovation and progress in public administration.

Date: 2025-01-12

Details: Rashid Mahmood Langrial, Chairman of the Federal Board of Revenue (FBR), has announced plans to introduce new legislation aimed at making shopping more challenging for individuals who fail to file their tax returns. Speaking at ThinkFest, Langrial criticized the widespread culture of tax evasion in Pakistan and highlighted the need for significant reforms in the tax system. According to FBR Chairman, many individuals who are legally obligated to pay taxes are not fulfilling their responsibilities. He pointed out that issues exist on both sides of the systemâ€”taxpayers and tax collectors. Additionally, he emphasized that the countryâ€™s tax rates are not correctly structured, leading to inefficiencies and inequalities in revenue collection. The proposed law seeks to target non-filers, making it more difficult for them to engage in regular shopping activities. FBR chief expressed frustration over the prevalence of tax evasion, noting that even individuals offering advice on fixing the system often turn out to be tax-evaders themselves. He reiterated the need for accountability and proper enforcement mechanisms. The FBR faced a significant tax shortfall of Rs386 billion from July to December. During this period, the revenue collection totaled Rs5,623 billion, falling short of the target of Rs6,009 billion set by the International Monetary Fund (IMF). Despite this shortfall, Langrial remained optimistic about achieving the revenue target of Rs13,500 billion for the current fiscal year. FBR chairman argued that Pakistanâ€™s tax rates need adjustment to ensure fairness and efficiency. He explained that the tax system is designed to include the wealthiest 5% of the population but has struggled to achieve this goal. While the salaried class is consistently taxed, authorities have been less successful in collecting taxes from affluent individuals. The FBR chief acknowledged the need to reduce tax rates on certain items while expanding the tax net. Additionally, Langrial revealed that over 0.4 million retailers have been added to the tax net this year, though many have yet to disclose their monthly income. He also stressed the importance of curbing the smuggling of petroleum products, which contributes to significant revenue losses.

Date: 2025-01-12

Details: Karachi, January 12, 2025 â€“ The Large Taxpayers Office (LTO) Karachi has established the Inland Revenue Enforcement Network (IREN) to address tax evasion within its jurisdiction. This initiative aligns with directives issued by the Federal Board of Revenue (FBR), which outlined the scope and functions of the IREN network and the enforcement units within field formations possessing legal territorial or tax jurisdiction over specific cases. According to the FBRâ€™s Order dated September 19, 2019, the roles of the concerned enforcement units and the IREN Squad are clearly defined: For Concerned Field Office: â€œAll enforcement activities shall be conducted by the concerned enforcement unit (RTO/LTO/Directorate) holding legal territorial or tax jurisdiction in accordance with the provisions of the Sales Tax Act, 1990, Federal Excise Act, 2005, and related rules and procedures. Post-enforcement actions shall also be conducted by the concerned enforcement units/field formations as per law.â€ For IREN Unit/Squad: â€œPrimarily, this unit/squad will be responsible for the following functions and operations: 1. Educating and facilitating taxpayers, particularly traders, to raise awareness about the legal and penal consequences of engaging in illicit activities, such as tax evasion and the illegal trade of specified goods, including tobacco and cigarettes. 2. Conducting raids, searches, and seizures of premises or storage facilities involved in the sale or distribution of non-tax-paid goods, with confiscation carried out where applicable under the law. 3. Deploying mobile squads to inspect vehicles reportedly transporting illegal or tax-evaded goods. 4. Monitoring major distributors of specified goods, including local cigarette brands originating from manufacturers in Khyber Pakhtunkhwa (KPK) and Azad Jammu and Kashmir (AJK). 5. Establishing close coordination with regional enforcement hubs for effective and coordinated actions. 6. Initiating post-enforcement proceedings, including criminal prosecution against individuals involved in these illegal activities.â€ The LTO Karachi emphasized that all enforcement and post-enforcement actions will remain the responsibility of the concerned enforcement units within the relevant field formations. To enhance transparency, the LTO proposed that in cases involving confiscated goods due to counterfeit tax stamps, the re-verification of these stamps should be conducted jointly by the IREN squad and the relevant enforcement units. This joint verification approach aims to ensure accountability and fairness while tackling tax evasion, particularly in sectors like tobacco, where illegal trade has significant economic repercussions. The LTO Karachiâ€™s initiative underscores its commitment to combating tax evasion and promoting compliance with tax laws.

Date: 2025-01-11

Details: Karachi, January 11, 2025 â€“ The Federal Board of Revenue (FBR) has disclosed that TPL, the company licensed for tracking and monitoring transit cargo, has acknowledged the failure of its satellite services. According to FBR, TPL admitted that its tracking devices were unable to provide the necessary satellite services and, instead, often generated unnecessary or frivolous alerts. The FBR further clarified that the suspension of TPLâ€™s license was not a sudden decision, as reported by certain sections of the media. Rather, it followed a thorough legal process. The board explained that during the hearings, TPL conceded to the malfunctioning of its devices, which were unable to provide accurate satellite tracking for cargo movement. This admission came as part of the review of the companyâ€™s operational performance and technical capabilities. TPL, which is a publicly listed company on the Pakistan Stock Exchange (PSX), has yet to inform its shareholders about this significant development. Furthermore, there has been no reaction from the PSX, which typically monitors and raises questions in such circumstances. In recent reports, some national press outlets claimed that the FBR had replaced satellite tracking with human monitoring for transit cargo, based on new monitoring processes. These media outlets also reported that the license of the only company offering satellite tracking had been revoked, and that the license was granted to four other companies that had qualified technically four years ago. However, critics argued that these new companies lacked modern tracking equipment and sufficient experience to manage such a vital task. FBR responded to these claims, stating that these reports stemmed from misunderstandings about the previous satellite system, the current interim measures in place, and the FBRâ€™s efforts to develop a more advanced, reliable, and secure cargo monitoring system. The board emphasized that TPLâ€™s license was not terminated without cause but followed a detailed legal process. The reasons for the decision included: â€¢ Outdated tracking technology, â€¢ Frequent technical failures, â€¢ Inability to provide live satellite tracking in transit while still charging significant fees, amounting to Rs. 445 million in revenue, â€¢ Disruptions in operations due to cyber-attacks, and â€¢ Multiple violations leading to investigations by various enforcement units. These issues led to the breaking of TPLâ€™s monopoly, which had been in place since 2013. While the company charged excessive fees for substandard services, it compromised the integrity of the cargo it was supposed to monitor. To address the current situation and ensure the safe movement of transit and transshipment cargo, the FBR has introduced several interim measures. These steps include: 1. The installation of PMD (Pakistan Maritime Device) tracking devices on vehicles, 2. The movement of cargo in convoys under Customs escort from the port of arrival to the port of destination, 3. Random scanning of cargo at both destination and arrival ports to prevent pilferage, 4. A 24/7 centralized Customs Control Room for real-time tracking of vehicles, and 5. Enhanced surveillance of cargo by field units of enforcement formations. Additionally, the FBR has initiated a transparent and competitive process for selecting new companies to handle cargo tracking. This involves the issuance of a fresh Expression of Interest (EOI), aimed at selecting companies that can deploy the latest technologies for efficient cargo monitoring. The FBR emphasized that the requirement for Container Surveillance Devices (CSDs) remains in place and will be incorporated into the new system, which will combine both GSM and satellite technologies for enhanced tracking capabilities. Through this process, the FBR is working towards creating a modernized and efficient cargo monitoring system, addressing the shortcomings of the previous system while ensuring a safe, reliable, and state-of-the-art technology-driven approach for the future of Pakistanâ€™s transit cargo tracking.

Date: 2025-01-11

Details: The Federal Board of Revenue (FBR) has clarified the rates and application of default surcharge for taxpayers who fail to meet their tax payment obligations. This surcharge is governed under Section 34 of the Sales Tax Act, 1990, and applies to both intentional and unintentional delays or errors in tax payments. What is Default Surcharge? Default surcharge is an additional charge imposed on taxpayers who fail to pay their due taxes on time, make inadmissible claims for refunds, or incorrectly apply tax rates such as the zero percent rate on supplies. Applicable Rates Under Section 34, the following rates for default surcharge are applied: 1. General Default: Taxpayers failing to pay their due taxes or receiving erroneous refunds are liable to pay default surcharge at either 12 percent per annum or KIBOR (Karachi Interbank Offered Rate) plus 3 percent per annum, whichever is higher. 2. Tax Fraud Cases: For cases involving tax fraud, the rate increases significantly. Taxpayers must pay default surcharge at 2 percent per month of the amount of tax evaded or the refund fraudulently claimed until the full liability, including the surcharge, is cleared. Calculation of Default Surcharge The FBR has outlined specific methods for calculating default surcharge: â€¢ For Inadmissible Input Tax Credit or Refund: The default period is calculated from the date the credit adjustment was made or the refund was received. â€¢ For Non-payment of Tax: The period begins on the 16th day of the month following the due date of the tax period and continues until the tax is paid in full. Important Notes The FBR emphasized that the default surcharge applies in addition to the tax liability and does not include penalties, which are calculated separately. Why It Matters Taxpayers are urged to comply with the rules to avoid the burden of default surcharge. The rates, particularly in fraud cases, can accumulate quickly, making it costly to delay or evade tax payments. Understanding the implications of default surcharge is essential for all taxpayers to ensure timely compliance and avoid additional financial liabilities. The FBR continues to encourage adherence to tax regulations to maintain fiscal discipline and transparency.

Date: 2025-01-11

Details: LAHORE: A State-Owned Enterprise (SOE) has challenged a blatant disregard for the law by the tax department for adopting coercive measures against it, issuing recovery notices without following the mandatory procedure of constituting an Alternative Dispute Resolution Committee (ADRC). The SOE had approached the relevant appellate forum, seeking a direction against the department to refrain from initiating or taking any coercive recovery measures in respect of default surcharge amount against it till the constitution of the ARDC. The Income Tax Ordinance 2001 explicitly requires the tax authorities to constitute an ADRC to resolve disputes with state-owned enterprises. However, the tax department has been flouting this provision, resorting to strong-arm tactics to recover taxes. The appellate forum maintained that it is not in dispute that pursuant to Section 134-A of the Income Tax Ordinance, 2001, read with Section 47A(2) of the Sales Tax Act, 1990, duly amended by Finance Act, 2024, a mechanism has been provided for SOE to approach FBR in respect of adverse orders passed by the Inland Revenue Department under both these fiscal laws. The most significant and the relevant amendment made, which is fully applicable to the dispute, is that now it is mandatory for SOE to go for ADR, whereas the limit of Rs50 million is also not applicable. Earlier, the management of an SOE was reluctant to go for mediation in any business transaction due to fear of prosecution, but through newly amended provisions, they have been protected from any suit, prosecution or other legal proceedings. Since referral to ADR is now mandatory for SOE, a right to appeal has also been provided to SOE when matter is not decided by ADRC within the stipulated period. The affected state-owned enterprises have been left with no choice but to approach the courts, seeking relief against the unlawful actions of the tax department. The courts have taken a dim view of the tax departmentâ€™s actions, directing them to withdraw the recovery notices and follow the due process of law. Tax experts are of the view that it is imperative that the tax department respects the law and follows the established procedures to avoid such confrontations in the future. Copyright Business Recorder, 2025

Date: 2025-01-11

Details: Karachi, January 11, 2025 â€“ The Sales Tax Act, 1990, empowers officers of Inland Revenue (IR) to arrest and prosecute individuals for non-compliance with tax laws, strengthening enforcement mechanisms for tax evasion and fraud. Powers Under Section 37 Section 37 of the Sales Tax Act grants IR officers the authority to summon individuals to provide evidence or produce documents during inquiries. Key provisions include: 1. Summoning Authority: Any IR officer can summon individuals to appear and provide evidence or documentation related to ongoing inquiries under the Act. 2. Obligation to Attend: Summoned individuals must attend in person or via an authorized representative as directed by the officer. However, exemptions apply to those protected under Sections 132 and 133 of the Code of Civil Procedure, 1908. 3. Judicial Proceeding Status: Inquiries conducted by IR officers are considered judicial proceedings under Sections 193 and 228 of the Pakistan Penal Code, 1860. Arrest and Prosecution Under Section 37A Section 37A specifically empowers IR officers to arrest individuals suspected of tax fraud or other prosecutable offences under the Act. Notable provisions include: 1. Authority to Arrest: Officers of IR, not below the rank of Assistant Commissioner or equivalent, can arrest individuals based on substantial evidence indicating involvement in tax fraud or similar offences. 2. Arrest Procedure: Arrests are conducted in accordance with the Code of Criminal Procedure, 1898, ensuring procedural compliance. 3. Compounding Offences: The Commissioner can compound offences if the accused pays the evaded tax, default surcharge, and penalties either before or after recovery proceedings commence. 4. Corporate Accountability: For corporate tax fraud, directors or officers of the company deemed personally responsible may also face arrest. This does not absolve the company of its liability to pay the evaded tax, surcharge, and penalties. Strengthening Compliance These provisions underline the governmentâ€™s commitment to curbing tax fraud and enhancing compliance. By equipping IR officers with arrest and prosecution powers, the Sales Tax Act reinforces deterrence against tax evasion. Taxpayers are urged to adhere to tax laws to avoid legal repercussions. The FBR continues its efforts to ensure transparency and accountability in the tax system, emphasizing voluntary compliance to avoid the stringent penalties outlined in the Act.

Date: 2025-01-11

Details: Islamabad, January 11, 2025 â€“ The Federal Board of Revenue (FBR) has agreed to consider to grant significant tax relief on property transactions, aiming to stimulate the construction and real estate sectors. Reportedly, FBR Chairman Rashid Mahmood has agreed in principle to reduce withholding taxes on property sales and purchases, reconsider the 5% Federal Excise Duty (FED) on property transactions, and introduce incentives for first-time homebuyers and affordable housing schemes. The decision was discussed during a meeting of the Working Group on Taxation under the Task Force for Housing Sector Development, chaired by the FBR Chairman. Stakeholders highlighted concerns over high transaction taxes, which currently amount to as much as 13% on a single transactionâ€”4% each for sales/purchases, 5% FED, and 4% provincial stamp duty. This burden has significantly curtailed transaction volumes in the real estate market. In response, the FBR Chairman proposed a comprehensive review of tax rates under sections 236C and 236K of the Income Tax Ordinance, 2001, contingent on provincial governments refraining from increasing their own taxes. He also formed a committee led by the Member Policy (FBR) to rationalize transaction taxes, address definitional issues under Section 7E, and recommend fiscal measures for low-cost housing. The committee comprises experts from the real estate sector, housing authorities, and government representatives, including Ahsan Malik (Real Estate Analyst), Sardar Tahir Mehmood (President, Federation of Realtors, Pakistan), and Maj. Gen. Aamir Aslam (Chairman, NAPHDA). This committee will also align property valuation rates with market values, conduct annual reviews, and strengthen valuation mechanisms in collaboration with FBRâ€™s Inland Revenue Operations Wing. While showing flexibility in addressing tax concerns for developed and idle properties, the FBR Chairman maintained a firm stance against granting concessions to non-filers. However, he acknowledged the need to streamline the verification process for non-residents through online systems in collaboration with NADRA, reducing dependency on field offices. Real Estate Analyst Ahsan Malik expressed optimism, stating that the relief package is likely to be finalized and announced by February 2025. He emphasized that the package would promote first-time homeownership and provide incentives for affordable housing. The proposals will undergo further deliberation in the upcoming Executive Committee meeting of the National Tax Council, which will also coordinate with provinces to ensure uniformity in property-related taxation. This initiative marks a crucial step toward revitalizing Pakistanâ€™s real estate sector and making housing more accessible to the masses.

Date: 2025-01-10

Details: LAHORE: A senior official of the Inland Revenue department has got rescinded adverse remarks made by the Federal Tax Ombudsman (FTO), proving it a violation of the principles of natural justice. The official of the Inland Revenue department had challenged the FTOâ€™s order, arguing that it was passed without giving him a fair hearing. He was of the view that the FTO had recorded some adverse findings against him working in Federal Board of Revenue (FBR) as an Additional Commissioner (Audit). The FTO, in its order, had recommended that the officer was not suitable for any field posting. The appellate forum agreed with him, holding that the FTOâ€™s conduct was in violation of the principles of natural justice. The forum noted that the FTOâ€™s role is to investigate complaints of maladministration and not to supervise or discipline officials of the Federal Board of Revenue (FBR). The forum also held that the FTO does not have the jurisdiction to challenge the orders of a constitutional court. It maintained that the acts and functions ,i.e. (passing of orders) by officers of Federal Board of Revenue, while performing quasi-judicial functions under tax laws, are not always subject to administrative control of Federal Board of Revenue, so as to bring disciplinary proceedings against such officers for passing orders while performing such functions. Therefore, conduct of the Federal Tax Ombudsman recording adverse findings against officer while deciding a complaint of a taxpayer could not be sustained as it was done without any notice and without following the principles of natural justice. Such act of the Federal Tax Ombudsman was in violation of judgments of constitutional courts, and order in question amounted to violating such judgments. The forum set aside the FTOâ€™s order, along with all subsequent actions initiated against the petitioner. The court also declined to initiate any proceedings against the FTO. According to the tax experts, the judgment is significant, as it clarifies the role and jurisdiction of the FTO and emphasizes the importance of following the principles of natural justice in administrative proceedings. Copyright Business Recorder, 2025

Date: 2025-01-10

Details: Karachi, January 10, 2025 â€“ The Federal Board of Revenue (FBR) has successfully acquired detailed customer data for both pre-paid and post-paid telecom subscribers from all major telecom companies for the fiscal year 2023-24. This significant move is part of FBRâ€™s ongoing effort to integrate third-party databases to enhance data accuracy and improve tax compliance across various sectors. The FBR stated that the collection of this customer information forms a crucial component of its broader strategy to strengthen monitoring and ensure transparency in the financial ecosystem. By obtaining telecom data, the FBR aims to improve its ability to track high-value transactions, verify taxpayer information, and better target potential tax evaders. The integration of third-party data into the FBRâ€™s systems is progressing steadily across various sectors. A breakdown of the current status reveals the following updates: â€¢ Telecom Data: The FBR receives monthly CSV files from telecom companies, including Zong, Ufone, Mobilink, and Telenor, containing data on both pre-paid and post-paid customers. This data is securely transferred via PRALâ€™s FTP server, enabling the FBR to effectively monitor telecom usage patterns and identify inconsistencies with declared incomes. â€¢ Bank Data: The FBR also receives monthly data from banks, including details on cash withdrawals, deposits, credit card transactions, and profits earned on debt. This data is uploaded in Excel format via PRALâ€™s portal, providing the FBR with critical insights into the financial activities of individuals and businesses. â€¢ AGPR Data: The FBR receives yearly salary data and monthly contractorsâ€™ data from the Account General of Pakistan Revenue (AGPR), further enhancing its ability to track income sources and detect discrepancies. â€¢ Excise Data: The FBR has access to excise data from the provincial excise departments (Sindh, Punjab, KPK) and federal excise, covering a five-year span from 2018 to 2022. Ongoing efforts are being made to integrate excise data from Sindh province online for better real-time monitoring. â€¢ PITB Data: The FBR also receives monthly data on Punjab token taxes, downloaded in Excel format from the Punjab Information Technology Board (PITB) website, which contributes to more accurate vehicle tax assessments. â€¢ BOR Sindh Data: Through online integration, the FBR receives valuable data on file and non-filer information, as well as payment verifications under sections 236C and 236K, from the Board of Revenue Sindh (BOR). â€¢ DISCOs Data: The FBRâ€™s integration with Distribution Companies (DISCOs) allows the agency to receive sales invoice data via APIs, facilitating more accurate energy consumption data tracking. Through these various data integrations, the FBR continues to enhance its ability to track economic activities and ensure tax compliance, ultimately boosting revenue generation efforts for the government.

Date: 2025-01-10

Details: Karachi, January 10, 2025 â€“ The Federal Board of Revenue (FBR) has announced stringent measures against sales tax fraud, including a jail term of up to 10 years for offenders. These penalties are prescribed under the Sales Tax Act, 1990, and aim to curb fraudulent practices that undermine the countryâ€™s revenue collection efforts. According to the FBR, any individual found committing, causing, or attempting to commit sales tax fraud, or assisting in such activities, will face severe consequences. The FBR outlined the penalties and jail terms applicable for these violations: 1. Penalties for Direct Offenders: The person directly involved in committing or attempting sales tax fraud will be subject to a penalty of either Rs. 25,000 or 100% of the tax evaded, whichever is higher. Beyond this financial penalty, the FBR stated that, upon conviction by a Special Judge, the offender could face imprisonment of up to five years if the tax evaded is less than one billion rupees. If the tax evasion amounts to one billion rupees or more, the jail term may extend to ten years, accompanied by a fine equivalent to the amount of tax evaded. 2. Penalties for Abettors and Facilitators: The FBR emphasized that individuals who abet or connive in committing tax fraud are equally culpable. Such individuals, upon conviction, may face imprisonment of up to five years for evaded amounts under one billion rupees. For tax evasion of one billion rupees or more, the jail term can extend to ten years. These offenders will also be liable for fines up to the amount of the evaded tax. The FBRâ€™s stringent measures reflect its commitment to combating tax fraud and enhancing compliance with tax laws. Sales tax fraud has long been a challenge for Pakistanâ€™s tax administration, leading to significant revenue losses. By enforcing these penalties, the FBR aims to deter individuals and businesses from engaging in fraudulent practices. The FBRâ€™s announcement serves as a clear warning to potential offenders and reinforces the governmentâ€™s resolve to ensure fair tax practices. The measures also highlight the FBRâ€™s efforts to strengthen Pakistanâ€™s tax regime and promote transparency within the system. Stakeholders are urged to comply with tax regulations to avoid severe penalties and legal repercussions.

Date: 2025-01-10

Details: Islamabad, January 10, 2025 â€“ Prime Minister Shehbaz Sharif, in a meeting held on Friday, emphasized the need for urgent measures to expedite the resolution of legal cases related to the Federal Board of Revenue (FBR) and its revenue collection efforts. He directed relevant authorities to recruit highly skilled professionals for the appellate tribunals, aiming to clear the backlog of pending cases swiftly. Prime Minister Shehbaz Sharif chaired the session, where he underlined the importance of appointing talented individuals with international caliber to ensure the efficient functioning of the tribunals. According to a statement from the PM Office, Shehbaz instructed that these professionals should be offered competitive salaries and benefits that align with their expertise and responsibilities. This, he believes, will attract the right talent needed to handle the complex legal issues surrounding the FBRâ€™s revenue operations. Shehbaz also stressed the urgent need to address the backlog of cases that has been hindering the efficient functioning of the FBR. He warned that any delays in this process would not be tolerated and urged for a focused, solution-oriented approach from the concerned officials. The prime ministerâ€™s push for reform comes at a time when Pakistan is striving to enhance its tax collection capabilities and streamline its revenue systems. In his remarks, Prime Minister Shehbaz highlighted the progress being made on FBR reforms, which have been designed to strengthen the countryâ€™s tax administration. A key reform includes the introduction of a Faceless Customs Assessment System at the Karachi Port, a significant initiative aimed at curbing corruption and reducing clearance times for goods. Shehbaz reiterated his governmentâ€™s commitment to broadening the tax base and ensuring that tax evaders are brought into the system. He pointed out that this would help reduce the financial burden on the low income group, ensuring that all sectors contribute fairly to the national revenue pool. He also instructed that reforms in the Inland Appellate Tribunals be completed within the stipulated timeframe. The meeting was attended by key officials, including Federal Economic Affairs Minister Ahad Khan Cheema, Minister of State for Finance Ali Pervaiz Malik, the Attorney General of Pakistan, and other senior officers.

Date: 2025-01-10

Details: Karachi, January 10, 2025 â€“ The Federal Board of Revenue (FBR) has uncovered a massive money laundering scheme amounting to Rs 106 billion, linked to fraudulent practices in solar panel imports. This revelation came after an intensive investigation led by the Post Clearance Audit (PCA), South, a key arm of the FBR. The FBRâ€™s findings reveal that the operation was orchestrated by two brothers who utilized a network of seven shell companies based in Peshawar and Lahore. These companies, despite having a combined declared financial worth of only Rs 119 million, managed to launder billions through over-invoicing solar panel imports. According to the FBR, the perpetrators inflated prices by up to 500%, importing panels at $0.35â€“0.70 per watt that were originally priced at $0.15 per watt in China. The investigation uncovered that the scheme involved the deposition of Rs 42 billion in cash across various commercial banks to disguise the illicit origins of the money. One glaring example cited by the FBR involved a dummy company, unregistered with the Securities and Exchange Commission of Pakistan (SECP), importing solar panels worth Rs 2.5 billion. The companyâ€™s supposed proprietor had an annual income declaration of only Rs 250,000, highlighting the schemeâ€™s audacious scope. The FBRâ€™s report also revealed that the laundered funds were funneled to four Chinese companies owned by the same brothers, creating a direct link between the Pakistani and Chinese operations. This complex setup exploited the duty-free regime for solar panel imports, with the banking sector allegedly failing to adequately scrutinize suspicious transactions. â€œFor each import consignment, money was transferred abroad twiceâ€”once through Hawala/Hundi networks and once via the banking channel,â€ the FBR report stated, emphasizing the severe financial shocks inflicted on the country due to over-invoicing. The FBRâ€™s findings spotlight systemic loopholes in monitoring and enforcement, with the PCA playing a pivotal role in uncovering the scam. The case also underscores the need for enhanced collaboration between the FBR, SECP, and banking institutions to prevent such fraudulent activities. This incident further strengthens the FBRâ€™s commitment to combating financial crimes, ensuring accountability, and safeguarding Pakistanâ€™s economic interests in the face of such significant challenges.

Date: 2025-01-09

Details: ISLAMABAD: The Federal Board of Revenue (FBR) has directed Inland Revenue field formations and business community to submit income tax and sales tax-related budget proposals (2025-26) for bringing the entire value chain of all businesses into the sales tax regime, promoting progressive taxation and withdrawing concessions/exemptions. The FBR has given a deadline of January 31, 2025 to the field formations as well as the business community to submit their budget proposals for the next fiscal year. The FBR has not asked the business community to submit budget proposals on tax concessions, reduction in higher tax rates or proposals to allow any new income tax, sales tax/FED exemptions. According to the FBRâ€™s directive to its field formations as well as business community on Wednesday, the FBR has invited budget proposals for the upcoming budget for Fiscal Year 2025-26 relating to Income Tax, Sales Tax, Federal Excise Duty and ICT (Tax on Services) Ordinance, 2001. The FBR stated that in order to enhance the budget formulation process and to reduce backend procedural burdens, the Federal Board of Revenue (FBR) plans to commence its budget process earlier this year. As a plan, the FBR has started developing proposals for the Finance Bill, 2025. In pursuit of leveraging the collective expertise and insights of all stakeholders to refine tax policies, the FBR cordially invite proposals for the forthcoming Budget for the Fiscal Year 2025-26. The suggestions in the following policy areas shall be highly appreciated: (i) Broadening of tax base for a wider participation in revenue generation efforts. (ii) Policy suggestions for bringing entire value chain of all businesses in GST regime. (iii) Promoting progressive taxation by introducing various measures where incidence of tax is higher on affluent classes. (iv) Phasing out of tax concessions and exemptions under all tax laws. (v) Facilitation of taxpayers and ease of doing business by removal of redundancy and simplification of tax laws. (vi) Measures to reduce tax arbitrage opportunities and infuse efficiency in economy by following neutrality principle in taxation. (vii) Removal of tax distortions, procedural lapses and anomalies. The areas identified above are just illustrative and not exhaustive. The proposals are expected to be clear, meaningful and implementable through addition, deletion, or further amendments to the tax laws. It is requested that the proposals may be provided by January 31, 2025, FBR added. Copyright Business Recorder, 2025

Date: 2025-01-09

Details: KARACHI: â€œThe Federal Tax Ombudsman (FTO) has achieved unprecedented success in 2024, maintaining an impressive 95.6% resolution rate after disposing of a record-breaking 12,914 complaintsâ€. This was stated by Faiz Elahi Memon, Advisor Incharge FTO along with other advisors including Gul Rehman, Badruddin Qureshi and Majid Yousfani at a press briefing held at FTO regional office, Karachi. He said that the FTO office successfully disposed of 12,914 complaints out of total 13,506 complaints received in 2024, adding that around Rs 22 billion tax refunds were released by the FBR on the FTO recommendations. Moreover, he said that the South Region, encompassing Karachi, Hyderabad, and Sukkur, emerged as a significant hub of activity with 2,477 total complaints. Karachi led with 1,989 cases, followed by Hyderabad with 335 and Sukkur with 153. â€œThis surge in complaints is largely attributed to an extensive public awareness campaign, featuring 78 Outreach Awareness Sessions conducted throughout these regions,â€ he informed. A notable victory for consumers came when the FTO facilitated Rs 48 million in refunds to 800 vehicle owners who had been overcharged on sales tax by Pak Suzuki Motor Company Limited. The refunds were issued after it was determined that customers had paid excess tax on vehicles up to 1000CC, where the actual applicable rate was 12.5 percent. The office also demonstrated proactive oversight through suo moto actions, particularly in the education sector. Under the FTOâ€™s directives, investigations were launched into more than 25 private sector medical colleges regarding excessive fee charges, with findings reported to relevant FBR authorities. Furthermore, Memon said that teachersâ€™ tax rebate issues received special attention, with the FTO successfully resolving complaints from educators who had been denied their rightful allowances by employers. This intervention provided significant relief to the teaching community who approached the Forum for assistance. The record-breaking performance underscored the FTOâ€™s crucial role in ensuring tax justice and maintaining transparency in the countryâ€™s federal tax system, while providing substantial relief to taxpayers across various sectors. Copyright Business Recorder, 2025

Date: 2025-01-09

Details: Karachi, January 8, 2025 â€“ Karachi, Pakistanâ€™s commercial and financial powerhouse, has once again proven its pivotal role in the national economy, contributing a significant 46% to the Federal Board of Revenueâ€™s (FBR) total revenue collection in the fiscal year 2023-24. According to an official report from FBR, the city generated a remarkable Rs 4,253 billion in duties and taxes during this period, out of the national total of Rs 9,299 billion. The report highlights that Karachiâ€™s contributions to the national tax pool were not limited to one sector but spanned multiple categories, including income tax, sales tax, and federal excise duty. The FBRâ€™s Inland Revenue offices in Karachi collected Rs 3,400 billion, accounting for 41.48% of the overall total tax receipts. The breakdown of this collection reveals the critical role of Karachiâ€™s tax offices in the national economy, with the Large Taxpayers Office (LTO) Karachi alone contributing Rs 2,523 billion. Other Inland Revenue offices, such as Regional Tax Offices (RTO) â€“ II Karachi, RTO-I Karachi, Medium Tax Office (MTO) Karachi, and Corporate Tax Office (CTO) Karachi, collectively added Rs 877 billion to the cityâ€™s tax contribution. In addition to Inland Revenue contributions, Karachi was the leading player in customs duty collection as well. The city generated an impressive Rs 853 billion in customs duties, representing 77.26% of the total customs duty collected nationwide, which amounted to Rs 1,104 billion for the fiscal year. This significant figure was driven by customs stations located across the city, including Port Qasim Appraisement Karachi, which alone contributed Rs 278 billion. Other key customs stations such as Appraisement (East) Karachi, Appraisement (SAPT) Karachi, and Enforcement Karachi added further substantial amounts, totaling millions more in customs revenue. Customs stations like Jinnah International Airport (JIAP) Karachi and Ports also contributed to the cityâ€™s vital role in national customs revenue, collectively generating millions in duties. The robust performance of Karachiâ€™s tax and customs infrastructure underscores the cityâ€™s centrality to Pakistanâ€™s economic landscape. This contribution not only showcases Karachiâ€™s importance in terms of revenue generation but also emphasizes the critical role of the cityâ€™s tax and customs administration in Pakistanâ€™s ongoing economic development.

Date: 2025-01-09

Details: Hyderabad, January 9, 2025 â€“ The Model Customs Collectorate (MCC) Hyderabad has officially announced the auction of several Non-Duty Paid (NDP) vehicles, set to take place on January 14, 2025. This auction presents an opportunity for potential buyers to acquire various vehicles that are no longer in regular customs clearance, providing a wide range of models for public bidding. In a formal notification issued by MCC Hyderabad, it was revealed that the auction will feature multiple vehicles, each having distinct specifications. Among the vehicles up for auction is a Toyota Surf (Registration No. BU-4120), with Chassis No. KZNI85-9003973, a 3000CC engine, and a model year of 1996. Another notable vehicle is the Mitsubishi Pajero Jeep (Registration No. BC-0723), with Chassis No. VA3-4005773, a 2477CC engine, and a model year of 1990. These vehicles are some of the most sought-after in the region, appealing to a variety of automotive enthusiasts and potential buyers in Hyderabad. Additionally, the auction will include a Suzuki Swift Car (Registration No. AYH-707) with Chassis No. ZC11S-176697, featuring a 1290CC engine and a model year of 2006. The Suzuki Jimny Jeep (Registration No. AD-18967), with Chassis No. JS3JB33V3Y4101224, is also among the vehicles available, boasting a 1300CC engine and a model year of 2000. Lastly, another Suzuki Swift Car (Registration No. AYX-280) with Chassis No. ZC71S-552678 and a 1300CC engine, model year 2009, will also be auctioned. The MCC Hyderabad clarified that the auction will proceed under the prevailing terms and conditions, governed by the relevant rules and regulations for NDP vehicles. Buyers interested in participating must meet all the necessary requirements and regulations set by the customs authority. This announcement has generated significant interest among local automotive dealers and individuals in Hyderabad, who view the auction as an opportunity to acquire well-maintained vehicles at potentially lower costs. The event is expected to attract a substantial turnout from the cityâ€™s automotive community.

Date: 2025-01-09

Details: Karachi, January 9, 2025 â€“ The Federal Board of Revenue (FBR) has exposed significant failures in a companyâ€™s ability to monitor and track transit cargo destined for Afghanistan, leading to the termination of its license. In a detailed statement, the FBR addressed concerns raised by recent media reports, clarifying the rationale behind its actions and highlighting measures taken to ensure effective cargo monitoring during the interim period. The FBR emphasized that contrary to claims made in the press, the termination of the license was not abrupt or baseless. It followed a thorough legal process and was grounded on multiple critical deficiencies, including: 1. The use of outdated tracking technology. 2. Frequent technical malfunctions. 3. Inability to provide live satellite tracking despite charging fees amounting to Rs 445 million. 4. Suspension of operations due to cyber-attacks. 5. Multiple violations resulting in cases registered by field formations. 6. Admission by the company, TPL, that its devices failed to deliver satellite services and frequently generated unnecessary or frivolous alerts. These failures compromised the integrity of transit cargo monitoring while allowing the company to profit significantly. By terminating the license, the FBR ended the monopoly of a firm providing substandard services at exorbitant costs. The decision underscores the FBRâ€™s commitment to ensuring a transparent, risk-free, and technologically advanced system for cargo tracking. The FBR clarified that the license has been reassigned to four companies previously evaluated and deemed technically eligible under the Tracking and Monitoring of Cargo Rules. However, these licenses had to be canceled earlier due to court rulings. In the interim, the FBR has implemented several measures to ensure the secure transportation of transit and transshipment cargo: 1. Installation of PMD devices on vehicles. 2. Movement of cargo in convoys under Customs escort from arrival ports to destination ports. 3. Selective scanning of cargo at both arrival and destination ports. 4. Establishment of a centralized Customs Control Room operating 24/7 for real-time vehicle tracking. 5. Enhanced surveillance of ATT/TP cargo by enforcement units throughout the network. The FBR has also initiated a new tendering process to select qualified companies through a competitive and transparent bidding process. This approach aims to deploy state-of-the-art GSM and satellite tracking technologies, including Container Surveillance Devices (CSDs), for foolproof cargo monitoring. The FBR reiterated its dedication to implementing a robust tracking system that safeguards the integrity of transit cargo operations while ensuring transparency and accountability.

Date: 2025-01-09

Details: Karachi, January 9, 2025 â€“ The Regional Tax Office (RTO-I) Karachi has extended its crackdown on tax defaulters by taking action against six additional wedding halls. This move comes as part of the ongoing efforts to enforce compliance with tax laws and broaden the tax net. RTO-I Karachi, a key revenue-collecting agency under the Federal Board of Revenue (FBR), initiated these actions due to non-compliance with Section 236CB of the Income Tax Ordinance, 2001. The section mandates the collection and deposit of withholding tax on functions held at marriage halls. Despite repeated notices and reminders, these wedding hall owners failed to adhere to tax regulations, prompting RTO-I Karachi to intensify its enforcement measures. The Marriage Hall Association, which represents the interests of wedding hall operators, has also been criticized for its lack of cooperation in ensuring compliance. According to RTO-I Karachi officials, the association has not been successful in persuading its members to fulfill their tax obligations. This lack of collaboration has necessitated direct action against the defaulters. In recent weeks, RTO-I Karachi has been actively conducting inspections and issuing penalties to non-compliant businesses. The six wedding halls targeted in this operation are part of a broader strategy to address widespread non-compliance within the industry. Officials emphasize that these measures are not only aimed at recovering unpaid taxes but also at creating a level playing field for compliant businesses. RTO-I Karachi has urged all wedding hall owners and other business operators to ensure timely compliance with tax laws to avoid legal consequences. The office has reiterated its commitment to using a combination of â€œPeople, Process, and Technologyâ€ to enhance tax collection efficiency and transparency. This latest action is part of a series of initiatives by RTO-I Karachi to expand the tax base and strengthen enforcement. As tax compliance is crucial for the countryâ€™s economic stability, the RTO-I Karachiâ€™s efforts are expected to significantly contribute to increasing government revenues and fostering a culture of accountability among businesses.

Date: 2025-01-09

Details: Karachi, January 9, 2025 â€“ The Pakistan Business Council (PBC) has raised serious concerns regarding the Federal Board of Revenueâ€™s (FBR) decision to terminate satellite tracking of transit cargo containers destined for Afghanistan. In a detailed letter addressed to the FBR chairman, the PBC highlighted the potential risks and adverse consequences of this policy change. The PBC emphasized that relying on Customs resources to physically monitor cargo movement, coupled with the placement of tracking devices on prime mover trucks instead of containers, increases the risk of cargo diversion. The absence of container-specific tracking compromises the integrity of the transit trade, creating loopholes for misuse. The misuse of transit trade arrangements, according to the PBC, has significant repercussions. It results in tax revenue losses, undermines local industries, and adversely affects employment opportunities. The PBC has consistently recommended measures to mitigate these risks. Among these suggestions is extending container tracking beyond the Pakistan-Afghanistan border and verifying that returning containers are empty. The council stressed that without container lock monitoring devices, there is no technical assurance that prime mover trucks will transport the intended cargo, as containers can be switched through collusion. The PBC urged the FBR to inform stakeholders about the timeline for deploying the necessary technology to ensure that transit cargo leaves Pakistan and does not return. The council also sought clarity on interim measures, specifically how the proposed â€œPeople, Process, Technologyâ€ framework will be implemented to address potential losses in tax revenue and support the formal economy. In its correspondence, the PBC reiterated its commitment to assisting the FBR in developing robust systems to safeguard Pakistanâ€™s economic interests. It called for a transparent approach to managing transit trade and urged the authorities to ensure that the proposed measures are both effective and equitable. The PBCâ€™s concerns reflect the broader need for comprehensive solutions that balance facilitation of trade with strict enforcement mechanisms. The councilâ€™s proactive stance underscores the importance of stakeholder engagement in shaping policies that impact the countryâ€™s fiscal and industrial landscape. By addressing these issues promptly, the PBC believes Pakistan can safeguard its revenue streams and foster sustainable economic growth.

Date: 2025-01-09

Details: Karachi, January 9, 2025 â€“ The Federal Board of Revenue (FBR) has issued a stern warning against obstructing its officials during the performance of their duties, emphasizing that such actions could lead to severe penalties, including imprisonment. The FBR clarified that under the Sales Tax Act, 1990, obstruction of FBR officials is classified as a serious offense. The act provides clear guidelines and punitive measures to deter such behavior and ensure compliance with tax laws. Key Provisions Under the Law The FBR outlined the consequences for individuals who deny or obstruct authorized officers from accessing business premises, registered offices, or any location where relevant records are maintained. Obstruction also includes refusing access to stocks, accounts, or records, or failing to present the required documents under Sections 25, 38, 38A, or 40B of the Sales Tax Act. According to the FBR, individuals found guilty of such acts will face: â€¢ Monetary Penalties: A fine of Rs. 25,000 or 100% of the tax amount involved, whichever is higher. â€¢ Imprisonment: Conviction by a Special Judge could lead to imprisonment for up to five years. â€¢ Additional Fines: An additional fine equal to the tax evaded or attempted to be evaded may also be imposed. FBRâ€™s Stance on Compliance The FBR underscored the critical role of its officials in maintaining tax compliance and preventing evasion. â€œObstructing FBR officials not only hampers enforcement but also undermines the integrity of Pakistanâ€™s tax system,â€ the statement said. The FBR further highlighted the importance of cooperation from businesses and individuals in providing access to premises and records as required under the law. Non-compliance not only leads to punitive actions but also disrupts legitimate business operations. Encouraging Voluntary Compliance The FBR reiterated its commitment to improving tax collection and urged taxpayers to fulfill their obligations voluntarily. The board also encouraged businesses to maintain transparent records and ensure timely submission of documents to avoid penalties and legal consequences. By enforcing these measures, the FBR aims to strengthen compliance and discourage practices that hinder the collection of revenue critical for the countryâ€™s development.

Date: 2025-01-08

Details: KARACHI: The Sindh Assembly unanimously passed a resolution on Tuesday, during Private Membersâ€™ Day, against the continuous increase in toll taxes imposed by the National Highway Authority (NHA). The resolution was tabled by PPP legislator Heer Ismail Soho, criticising the NHA for repeatedly increasing toll taxes on highways and motorways over the past few months. She pointed out that while the official notifications do not specifically mention any highway or motorway in Sindh, the additional taxes are still being collected within the province. NHA raising toll taxes from today She further remarked: â€œNHA should be renamed a â€˜Punjab Highway Authorityâ€™, as it completely ignores the dilapidated condition of roads in Sindh. If thereâ€™s any road in the worst condition in Pakistan, it is the one from Karachi to Hyderabad and Sukkurâ€. Despite this, she said that people are being charged toll taxes of up to two or three thousand rupees from Karachi to Sukkur. She revealed that toll taxes have been raised three times in the past seven months. Sindh Information Minister Sharjeel Inam Memon supported the resolution, stating, â€œThis resolution is not just for the people of Sindh but for all of Pakistan. The NHA is mistreating Sindh by neglecting its roads, which are in terrible condition and result in fatal accidents. While the federal government collects taxes, it provides no corresponding facilities.â€ He said that despite years of neglect, new toll plazas are being established, while the Hyderabad-Sukkur road remains one of the worst in Pakistan. â€œThis road is not just used by Sindhâ€™s residents but by people from across the country,â€ Memon added. During the session, a resolution presented by PTI member Muhammad Shabbir Qureshi was rejected by a majority vote. Qureshi expressed concerns about the worsening gas shortages during the winter months, highlighting that only Karachiâ€™s CNG stations were being closed. He argued for equitable treatment, demanding that fuel stations across Pakistan should also be shut down to address the issue. However, the resolution failed to gain support and was ultimately dismissed. Copyright Business Recorder, 2025

Date: 2025-01-08

Details: Karachi, January 8, 2025 â€“ The Federal Board of Revenue (FBR) has highlighted a concerning rise in delays for processing sales tax refunds, signaling inefficiencies in the system despite an increase in processed claims. An FBR report reveals that the average time for processing sales tax refunds through the FASTER system surged to 119 days during fiscal year 2023-24, compared to just 44 days in fiscal year 2020-21. The number of processed refund orders rose from 33,013 in FY 2021 to 40,447 in FY 2024. However, the time taken to process these claims has shown a troubling upward trend. According to the FBR, processing time improved slightly from 44 days in FY 2021 to 40 days in FY 2022 but then spiked to 64 days in FY 2023 and further to 119 days in FY 2024. This sharp rise underscores growing inefficiencies, despite the increased volume of processed claims. The report emphasizes the need for system optimization to streamline refund processing and enhance efficiency. In contrast, the FBR reported notable progress in processing income tax refunds. Although the number of processed orders decreased significantly from 53,583 in FY 2021 to 13,366 in FY 2024, the time taken for processing has shown some improvement. Refund processing times dropped from a staggering 598 days in FY 2021 to 364 days in FY 2022. However, this was followed by an increase to 566 days in FY 2023 before improving again to 448 days in FY 2024. These fluctuations in processing times for both sales tax and income tax refunds highlight inconsistencies in the systemâ€™s efficiency. While some progress has been made in streamlining operations, the delays in sales tax refunds, in particular, call for urgent reforms and technological advancements to meet taxpayer expectations and maintain trust. The FBRâ€™s findings emphasize the importance of addressing these systemic issues to improve overall refund processing timelines and ensure a smoother experience for taxpayers.

Date: 2025-01-08

Details: Karachi, January 8, 2025 â€“ The Federal Board of Revenue (FBR) has disclosed concerning statistics, revealing that out of 13.45 million registered taxpayers, only 38% are part of the Active Taxpayers List (ATL). This highlights significant gaps in compliance and enforcement. According to the FBR, the income tax ATL as of June 30, 2024, included 5.17 million taxpayers, marking a 30% increase from the 3.99 million recorded on June 30, 2023. Despite this growth, the proportion of taxpayers on the ATL remains low compared to the total registered taxpayer base. The registered taxpayer population saw a substantial 36.2% growth, increasing from 9.87 million in 2023 to 13.45 million by June 2024. This growth reflects the FBRâ€™s efforts to expand the tax net, with 3.574 million new taxpayers registered during the period. Tax experts have criticized the FBR for its inability to translate the rising number of registrations into active compliance. They argue that despite the substantial increase in registered taxpayers, the FBRâ€™s enforcement of return filing remains inadequate, preventing a corresponding rise in the ATL. The FBR noted significant growth in taxpayer registration across various regional tax offices (RTOs) in Pakistan. RTO Multan achieved the highest increase, with a remarkable 59.2% growth in registered taxpayers, followed by RTO Bahawalpur and RTO Sahiwal. A detailed analysis shows that all four provinces are represented in the top 10 regions with the highest percentage increases in registered taxpayers. However, seven RTOs recorded less than a 10% increase in registered taxpayers, indicating uneven performance across regions. This disparity highlights the need for targeted strategies to boost taxpayer compliance in underperforming areas. While the increase in taxpayer registrations is a positive development, the FBR faces significant challenges in ensuring compliance and expanding the ATL. Bridging the gap between registered taxpayers and those on the ATL is crucial for improving revenue collection and achieving fiscal stability. Tax enforcement measures and incentives for compliance will be key to addressing this issue effectively.

Date: 2025-01-08

Details: Islamabad, January 8, 2025 â€“ The Federal Board of Revenue (FBR) has said that Rs 21.3 billion collected as Special Customs Duty (SCD) during fiscal year 2023-24 remains unreconciled with the Accountant General of Pakistan Revenue (AGPR) due to prevailing ambiguities. The FBR reported that the total Customs Duty collection of Rs 1.1 trillion includes Rs 21.3 billion as SCD. This duty was initially imposed as an Export Development Surcharge (EDS) under Section 11 of the Finance Act 1991 (Act XII of 1991) and later revised through an SRO issued by the Ministry of Finance, Revenue Division, on January 4, 2003. Traditionally, the FBR reconciled SCD collections with AGPR under account head B-02203 (Receipts). However, amendments introduced by the Finance Act 2022 to the Export Development Fund (EDF) Act 1999 mandated that â€œwhole receipts of Export Development Surchargeâ€ be directly transferred to the EDF account by the State Bank of Pakistan (SBP). This procedural change created confusion, resulting in non-alignment of figures between FBR and AGPR. The Finance Division, through a letter dated January 25, 2024, directed FBR and AGPR to resolve the reconciliation issue. However, discrepancies persist, and correspondence between the departments continues to address this matter. The Special Customs Duty plays a crucial role in supporting export development initiatives. Despite its integration within the larger Customs Duty framework, the lack of clarity in its allocation and reconciliation has raised questions about transparency and efficiency in managing these funds. Experts highlight that without resolving this issue, the intended impact of SCD on national export goals may be undermined. Efforts are underway to ensure that accurate reconciliation processes are established to maintain the integrity of Customs Duty collections. Resolving the ambiguity surrounding the Special Customs Duty is vital for enhancing fiscal accountability and ensuring its effective contribution to export development programs.

Date: 2025-01-08

Details: Karachi, January 8, 2025 â€“ Prime Minister Muhammad Shehbaz Sharif launched the Faceless Customs Assessment System at the Karachi Port on Wednesday, marking a significant milestone in Pakistanâ€™s customs operations. This innovative system, part of the Federal Board of Revenueâ€™s (FBR) modernization efforts, was introduced under Shehbazâ€™s leadership and aims to streamline customs clearance procedures. The Faceless Customs Assessment System is designed to enhance efficiency, transparency, and integrity in the clearance process. With the system now in place, the time required for customs clearance has been drastically reduced. Importers can expect their goods to be cleared in as little as 15 to 20 minutes, with the maximum clearance time extending to 19 hours. This substantial reduction in clearance time promises to significantly improve the ease of doing business in the country, facilitating smoother trade operations at the Karachi Port. One of the standout features of the Faceless system is its elimination of direct interaction between importers and customs officers. Under this system, neither the customs officers nor the importers know each otherâ€™s identities. This â€˜facelessâ€™ interaction ensures a higher degree of impartiality and reduces the potential for corruption, as the anonymity of the process minimizes opportunities for malpractice. This approach is a key part of FBRâ€™s ongoing reform program, which aims to modernize Pakistanâ€™s customs sector and make it more efficient and transparent. Furthermore, the Faceless Assessment System eliminates the possibility of using social media applications on the computers involved in the customs process, thereby ensuring that officers stay focused on their duties. The system also encourages faster workflows, with only dedicated and honest officers appointed to manage the new digitalized procedures. To ensure the comfort and well-being of the officers operating the system, the government has provided them with necessary amenities, including food, prayer facilities, and washrooms within the same working area. To maintain productivity and discipline, mobile phone usage is strictly prohibited within the operational area. Since its implementation, the Faceless Customs Assessment System has significantly decreased complaints by 80% and marked a substantial step forward in Pakistanâ€™s efforts to combat corruption in customs operations. This system is a pivotal move toward improving the business environment and governance in the country.

Date: 2025-01-08

Details: Islamabad, January 8, 2025 â€“ The Ministry of Commerce has announced a deadline for submitting tariff-related budget proposals for the fiscal year 2025-26. Stakeholders have been invited to provide their input by February 15, 2025, to ensure their suggestions are considered during the preparation of Pakistanâ€™s upcoming federal budget. The ministry has specified that the proposals should focus on changes to Pakistan Customs Tariffs, encompassing adjustments to rates, exemptions, or any other tariff-related measures that could impact trade and industry. To streamline the process, the Tariff Policy Center (TPC) and Tariff Policy Wing (TRP) of the Ministry of Commerce have devised specific formats for submission. The ministry emphasized that stakeholders must use the prescribed formats, prepared on Microsoft Excel, and refrain from using alternative templates. Adhering to the given format will allow for a systematic evaluation and processing of proposals. Stakeholders are also encouraged to carefully study the existing customs tariff rates and provisions before formulating their submissions. To strengthen their cases, stakeholders should support proposals with statistical data, market analysis, or any relevant documentation. This ensures that submissions are not dismissed due to incomplete or unsubstantiated information. Local manufacturers seeking tariff protection for their finished products or concessions on raw materials are required to provide comprehensive data as per the specified format. This includes detailed information about production costs, market trends, and the potential impact of proposed changes. The Ministry of Commerce has reiterated the importance of adhering to the deadline, emphasizing that proposals received after February 15, 2025, will not be entertained. The ministry also urged stakeholders to act promptly and responsibly, as their inputs play a crucial role in shaping Pakistanâ€™s trade and industrial policies. This initiative underscores the governmentâ€™s commitment to fostering a collaborative approach in budget planning. By involving key stakeholders from various sectors, Pakistan aims to create a more efficient and equitable tariff structure that supports economic growth and competitiveness. Stakeholders, including industry representatives, trade bodies, and exporters, are encouraged to seize this opportunity to contribute to Pakistanâ€™s fiscal and trade policies for the upcoming year.

Date: 2025-01-07

Details: Islamabad, January 7, 2025 â€“ The Federal Board of Revenue (FBR) on Tuesday called upon stakeholders to submit their tax proposals for the upcoming Budget 2025-26. This initiative aims to enhance inclusivity and transparency in the budget-making process. In a formal announcement, the FBR invited the business community, tax bars, and other relevant stakeholders, including tax offices, to contribute their insights and suggestions for the fiscal year 2025-26. The move underscores the FBRâ€™s commitment to refining tax policies and ensuring the budget aligns with the economic realities and aspirations of Pakistan. The FBR emphasized that starting the budget formulation process earlier this year would help streamline the preparation of the Finance Bill, 2025. â€œTo leverage the collective expertise and insights of all stakeholders, we cordially invite proposals for the forthcoming Budget for the Fiscal Year 2025-26,â€ the FBR stated. Stakeholders were encouraged to provide their input on several key policy areas that could shape the budget. These include: â€¢ Broadening the tax base to ensure wider participation in revenue generation efforts. â€¢ Introducing measures to incorporate the entire value chain of businesses into the General Sales Tax (GST) regime. â€¢ Promoting progressive taxation by implementing policies that place a higher tax burden on affluent classes. â€¢ Phasing out tax concessions and exemptions across all tax laws to ensure equity. â€¢ Simplifying tax laws and removing redundancies to facilitate taxpayers and enhance ease of doing business. â€¢ Reducing tax arbitrage opportunities and improving economic efficiency through neutrality in taxation. â€¢ Addressing tax distortions, procedural anomalies, and lapses to refine the overall system. The FBR clarified that these areas are illustrative rather than exhaustive, and proposals should be clear, actionable, and geared toward practical implementation. Recommendations could include additions, deletions, or amendments to existing tax laws. To ensure timely consideration, the FBR urged stakeholders to submit their proposals by January 31, 2025. This timeline allows ample opportunity for thorough review and incorporation of the suggestions into the budget framework. By engaging stakeholders early in the process, the FBR aims to make Budget 2025-26 a cornerstone for economic stability and growth, reinforcing Pakistanâ€™s financial resilience. The FBRâ€™s initiative reflects a broader vision of inclusive policy-making, ensuring the budget meets the nationâ€™s socio-economic needs effectively.

Date: 2025-01-07

Details: The Federal Board of Revenue (FBR) has made remarkable advancements in the automation of its operations, marking a transformative shift in how the agency manages tax and customs processes in Pakistan. One of the most significant developments has been the complete automation of Inland Revenue and Pakistan Customs operations. This includes crucial modules for income tax returns, refund claims, and trade facilitation systems, such as the Gwadar Free Zone and valuation management systems, which streamline both compliance and service delivery. The FBRâ€™s efforts go beyond mere automation. The organization has focused on redesigning its processes to increase efficiency, enhance transparency, and improve compliance. For instance, automated systems for duty drawbacks, tariff management, and dispute resolution have been implemented to make operations more streamlined and minimize delays. These changes not only ensure smoother processes but also provide a more predictable and reliable system for taxpayers and businesses. The development of various IT applications has also played a pivotal role in supporting these automation efforts. The Tax Asaan Mobile App, which simplifies tax filing for users, and PASSTRAK, which facilitates currency declaration compliance, are notable examples. These applications reflect the FBRâ€™s commitment to making tax processes more user-friendly and accessible. Furthermore, the introduction of mobile applications dedicated to complaint management and digital invoicing further underscores the FBRâ€™s goal to create an efficient, taxpayer-friendly environment. In addition to these advancements, the FBR has implemented several measures aimed at enhancing customs efficiency. The introduction of virtual assessments and self-declaration systems at ports is one such initiative, helping to reduce dwell time and speed up the clearance process for imports and exports. These digital systems not only reduce congestion at ports but also increase transparency, reduce human errors, and lower the potential for fraud. Taken together, these initiatives showcase the FBRâ€™s unwavering commitment to leveraging modern technology and innovative solutions to revolutionize Pakistanâ€™s tax administration. By embracing automation and digital tools, the FBR is enhancing operational efficiency, improving service delivery, and ultimately fostering a more streamlined and taxpayer-friendly environment.

Date: 2025-01-07

Details: Karachi, January 7, 2025 â€“ The Large Taxpayers Office (LTO) Karachi has retained its position as the highest tax-collecting office within the Federal Board of Revenue (FBR), contributing a significant 31% to the total inland tax collection for the fiscal year 2023-24. According to the FBRâ€™s performance report for the tax year, LTO Karachi collected an impressive Rs. 2.52 trillion out of the total Rs. 8.21 trillion in inland taxes. This achievement underscores the pivotal role Karachi plays in the countryâ€™s tax ecosystem. The top five contributors to the FBRâ€™s inland revenue collection are LTO Karachi, LTO Lahore, LTO Islamabad, RTO Lahore, and LTO Multan. LTO Karachi leads the pack with its 31% share, followed by LTO Lahore at 17.09% and LTO Islamabad at 14.18%. RTO Lahore and LTO Multan contributed 4.7% and 4.1%, respectively. Collectively, these five offices accounted for 71% of the total inland revenue, highlighting their critical importance to Pakistanâ€™s fiscal stability. The remaining tax offices contributed 29.3% to the overall collection. Performance Across Tax Instruments The FBR report also shed light on its overall performance for FY 2023-24, showcasing remarkable achievements in several tax areas. Direct taxes emerged as the top-performing category, exceeding the revised target by 121.8%. Income Tax collections reached 121.2% of the target, while the Collection of Wealth Tax (CVT) surpassed expectations with a performance of 125.2%. The Workers Welfare Fund (WWF) and Workers Profit Participation Fund (WPPF) collections were particularly noteworthy, achieving a remarkable 196.8% of the target. This reflects the FBRâ€™s enhanced efficiency in tapping into diverse revenue streams. Despite some shortfalls in Sales Tax (85.6%) and Customs Duty (83.4%), these categories still made significant contributions to the overall revenue pool. Additionally, Federal Excise Duty (FED) collections performed steadily, reaching 96.2% of the target, showcasing resilience in challenging economic conditions. These results highlight the FBRâ€™s strong commitment to strengthening Pakistanâ€™s revenue base, ensuring fiscal sustainability, and driving economic growth. LTO Karachiâ€™s outstanding contribution remains a cornerstone of this success.

Date: 2025-01-06

Details: Karachi, January 6, 2025 â€“ The Pakistan Stock Brokers Association has voiced concerns regarding the proposed Section 114C of the Income Tax Ordinance, 2001, introduced as part of the Tax Law (Amendment) Act, 2024. In a letter addressed to Finance Minister Muhammad Aurangzeb, the association highlighted potential repercussions of the amendment, currently under review in the National Assembly. The proposed changes aim to enhance economic documentation and compliance mechanisms but have raised alarm within the financial sector, particularly among stock brokers and investors. The proposed Section 114C imposes restrictions on economic transactions by certain individuals and entities, specifically targeting ineligible persons. The provision reads: â€œ114C. Restriction on economic transactions by certain persons. (1) Notwithstanding anything contained in any law for the time being in force â€“ (c) any person authorized to sell securities, including debt securities or units of mutual funds, or to open and maintain accounts or clear such transactions, shall not sell, open an account, or clear the sale of securities or mutual funds for an ineligible person being an individual or an association of persons; (2) The provision of sub-section (1) shall not apply to â€“ (d) investment in securities up to such limit as may be notified by the Board from time to time.â€ The stock brokers acknowledged the governmentâ€™s intent to enhance economic transparency and strengthen compliance. However, they warned that implementing the amendment without consulting key stakeholders could adversely affect the stock market and undermine investor confidence. â€œThe amendment, if passed in its current form, could create operational challenges for brokers and discourage potential investors, thereby hindering market growth,â€ the association stated. To address these concerns, the Pakistan Stock Brokers Association has requested an urgent meeting with the finance minister. The objective is to discuss the implications of Section 114C and collaboratively identify solutions that ensure the integrity of the stock market while achieving the governmentâ€™s policy goals. The association emphasized the need for a balanced approach that accommodates the interests of all stakeholders, safeguarding the financial sectorâ€™s stability and fostering sustainable growth in Pakistanâ€™s capital markets.

Date: 2025-01-06

Details: Islamabad, January 6, 2025 â€“ The Appellate Tribunal Inland Revenue (ATIR), Division Bench-I, Islamabad, has rejected an appeal filed by a non-resident taxpayer, citing strict procedural non-compliance. This decision highlights the challenges faced by taxpayers living abroad, particularly under a legal framework that does not accommodate digital or proxy submissions. The tribunal emphasized that appeals must adhere rigorously to the procedural requirements stipulated by law. Under the current regulations, there is no provision for electronic submissions or remote participation, making it impossible for non-residents to file appeals without physical presence. Legal experts have criticized this rigid approach, arguing that justice should not be sacrificed on the altar of technicalities. They stress that the Federal Board of Revenue (FBR), in collaboration with the Ministry of Law and ATIR, must introduce mechanisms to address these shortcomings, especially for non-residents who contribute significantly to Pakistanâ€™s economy through foreign remittances. According to Blackâ€™s Law Dictionary, a signature is defined as: â€œ(1) a personâ€™s name or mark written by that person or at the personâ€™s direction, or (2) any name, mark, or writing used with the intention of authenticating a document.â€ The case underscores the inflexible nature of procedural requirements, which disproportionately impact non-resident taxpayers. In this instance, the taxpayer had submitted documents such as affidavits and applications for condonation of delay, all bearing scanned signatures. Despite substantial compliance in other aspects, the tribunal ruled these submissions invalid due to their failure to meet legal standards. The appeal, filed under Section 131 of the Income Tax Ordinance, 2001, challenged a previous order issued by the Office of Inland Revenue, Unit-I, Zone South, RTO Islamabad, for the tax year 2018. Represented by M/s EY Ford Rhodes, the taxpayer filed the appeal electronically. However, the ATIR rejected the filing, citing Rule 77 of the Income Tax Rules, 2002, which mandates physical filing and handwritten signatures from the appellant or an explicitly authorized representative. The tribunal further noted that while the Power of Attorney (POA) authorized representation in proceedings, it did not explicitly grant permission to file the appeal. This omission, combined with the reliance on scanned signatures, ultimately led to the appealâ€™s dismissal. This decision has reignited calls for reforms in Pakistanâ€™s tax administration system. Stakeholders argue that enabling electronic filings and remote access would simplify compliance for non-residents while enhancing the efficiency of tax administration. As Pakistan aims to modernize its fiscal policies, addressing these procedural bottlenecks will be crucial in fostering trust and ensuring equitable treatment for all taxpayers.

Date: 2025-01-06

Details: Karachi, January 6, 2025 â€“ The Sindh High Court (SHC) has instructed the Federal Board of Revenue (FBR) to provide detailed information regarding tax officials implicated in cases initiated by the National Accountability Bureau (NAB). This directive highlights the need for transparency and accountability within the FBR. The SHC has specifically asked the FBR to furnish comprehensive details of officers currently facing NAB cases in NAB courts. Additionally, the court has inquired whether any conviction orders have been issued against these officers and, if so, what actions the FBR and its field formations have taken in response to such convictions. This directive stems from a case in which a tax officer, despite being convicted by a NAB court, continued to enjoy official perks and maintain their position. The SHC expressed concern over the apparent lack of communication between the FBR and NAB authorities, which allowed the convicted individual to benefit from their role unlawfully. The court noted, â€œThis evident lack of communication between the FBR and NAB authorities has resulted in a situation where the appellant continued to enjoy perks and position despite their conviction. This raises concerns that other FBR employees in similar cases may also have been reinstated to their previous positions.â€ To address these concerns, the SHC has ordered the FBR to take immediate action. In compliance with the courtâ€™s directive, the FBR has issued instructions to its field offices, requiring them to compile and submit detailed reports on such cases by January 10, 2025. These reports must include information on actions taken against convicted officers and any measures implemented to prevent similar situations in the future. The case underscores the critical need for improved coordination between the FBR and NAB to ensure accountability and prevent convicted individuals from exploiting systemic gaps. As the FBR works to comply with the SHCâ€™s order, it remains to be seen whether this effort will lead to meaningful reforms in addressing corruption and misconduct among tax officials. The outcome will also serve as a test of the FBRâ€™s commitment to maintaining integrity and transparency within its ranks.

Date: 2025-01-06

Details: Karachi, January 6, 2025 â€“ The Federal Board of Revenue (FBR) has outlined specific penalties for individuals found guilty of falsifying sales tax records, as per the provisions of the Sales Tax Act, 1990. These new measures are designed to address the serious issue of fraudulent activities related to sales tax documentation and ensure the integrity of Pakistanâ€™s tax system. According to the FBR, individuals who engage in any of the following actions will be subject to severe penalties: â€¢ Submitting False Documents: Any person who submits a forged or false document to an Inland Revenue officer will be penalized. â€¢ Altering Sales Tax Records: Those who destroy, alter, mutilate, or falsify records, including sales tax invoices, are liable for penalties. â€¢ Fraudulent Statements and Declarations: Individuals who knowingly or fraudulently make false statements, false declarations, or provide misleading representations, or use forged or falsified documents, will also face penalties. In all such cases, the FBR has set a penalty amount of either twenty-five thousand rupees or one hundred percent of the amount of tax that has been evaded or is sought to be evadedâ€”whichever is higher. This substantial penalty serves as a deterrent against fraudulent activities in the sales tax sector. Additionally, the FBR has stressed that those found guilty of such offenses may face further legal consequences. Upon conviction by a Special Judge, the offender could face imprisonment for a term of up to five years if the amount of tax evaded or sought to be evaded is less than one billion rupees. In cases where the amount exceeds one billion rupees, the prison sentence may extend to ten years. Furthermore, a fine equivalent to the amount of tax evaded or sought to be evaded may be imposed, or both imprisonment and a fine may be applicable. These stringent measures reflect the FBRâ€™s commitment to enforcing compliance and upholding the integrity of the tax system. The FBRâ€™s latest move to penalize individuals involved in falsifying sales tax records serves as a strong reminder of the severe consequences of tax fraud. It underscores the importance of accurate record-keeping and honesty in all business and tax-related activities. With these updated regulations, the FBR aims to safeguard the countryâ€™s tax system from fraudulent practices and to ensure that all businesses contribute their fair share to the national revenue.

Date: 2025-01-06

Details: Karachi, January 6, 2025 â€“ The Federal Board of Revenue (FBR) has announced a specific monetary penalty for individuals who fail to obtain sales tax registration before making taxable supplies. This penalty is part of the enforcement of the Sales Tax Act, 1990, which governs the registration and taxation of goods and services in Pakistan. According to the FBR, individuals who are required to apply for registration under the Sales Tax Act and fail to do so before initiating taxable supplies will be subject to a penalty. The penalty, as specified under the law, is either a fixed amount of ten thousand rupees or five percent of the tax amount involvedâ€”whichever is greater. This move aims to encourage compliance with the registration requirement, ensuring that businesses operate within the legal framework and contribute to the countryâ€™s tax system. The FBR also clarified that if an individual who is obligated to register under the Sales Tax Act fails to do so within sixty days from the commencement of taxable activity, further legal action will be taken. In such cases, the individual will be liable to face severe consequences. Upon conviction by a Special Judge, the person could be sentenced to imprisonment for up to three years, a fine equivalent to the tax amount involved, or both. The FBRâ€™s new regulation underscores the importance of timely sales tax registration and the consequences of non-compliance. With this announcement, the tax authority seeks to ensure that businesses contribute to the tax system from the outset of their taxable activities. In addition to monetary penalties, the threat of imprisonment highlights the seriousness of this issue and serves as a reminder to all taxpayers about their legal obligations under the Sales Tax Act. The FBRâ€™s approach reflects its commitment to enforcing tax regulations and maintaining a fair and efficient taxation system in Pakistan. As businesses continue to grow and engage in taxable activities, timely registration under the Sales Tax Act is essential to avoid penalties and legal repercussions.

Date: 2025-01-05

Details: ISLAMABAD: Appellate Tribunal Inland Revenue (ATIR) in a landmark decision has referred a case to the chairman, Federal Board of Revenue (FBR), directing the matter to be treated as a test case against assessing officers to issue instructions to all assessing officers operating under fiscal statutes to comply with binding orders. Assessing officers are also to be made aware of the serious consequences that may arise if such orders are not strictly adhered to. It is reliably learnt that this pivotal appeal was argued by tax lawyer Waheed Shahzad Butt, who highlighted the critical issue of futile litigation and the misuse of taxpayer money by certain FBR officers by missing fiscal laws to show fake performance. The ATIRâ€™s referral underscores the need for systemic reform and accountability within the FBR, aiming to curtail wasteful litigation practices and ensure compliance with established legal precedents. This decision serves as a call to action for FBR leadership to reinforce the rule of law and prioritize efficient use of public resources. ATIR order stated: â€œWe (tribunal) add with grave concern that it was not open to the assessing officer to ignore the law laid down by this Tribunal. It was not proper on his part not to follow binding decisions of this Tribunal. He is bound to obey the law declared by this Tribunal. It is not even the case of the OIR that the decisions of this Tribunal have been stayed/suspended/modified by the High Court. We are very clear and we have no doubt in our minds that when a point is concluded by a decision of this Tribunal, all subordinate authorities within the territorial jurisdiction of Tribunal are bound by it and must scrupulously follow the said decision in letter and spirit.â€ ATIR order further added: â€œIt is now settled law that the highest authority for factual determination in tax matters is the Tribunal, reliance may be placed on 2022 SCMR 1082, 2021 PTD 1367, CP 1842-L of 2022). We have further seen in this order to our dismay and shock that in spite of clear instructions in Circular 1(7)DT-14/92 providing guidance/instructions to the field formations, OIR willfully ignored the cited order of the Tribunal. In the present case the law has been flouted blatantly and it appears without any fear of accountability and sense of responsibility. â€œWe expect that the learned chairman, FBR shall take this matter as a test case. Let this order be sent to the learned Member Operations-IR, FBR for the purposes of issuing instructions to all assessing officers working under fiscal statutes to comply with the above said circular. They should also be made aware of serious consequences in case binding orders are not strictly followed,â€ ATIR order added. Copyright Business Recorder, 2024

Date: 2025-01-05

Details: Recorder Report Published January 5, 2025 LAHORE: The tax experts have questioned the new eligibility criteria introduced by the government for individuals and companies looking to purchase immovable properties. According to the new rules, a person is considered eligible if they have filed their income tax return for the preceding tax year and have sufficient resources to cover the transaction. Sufficient resources are defined as having at least 130% of the cash and cash equivalent assets declared in their wealth statement for the previous tax year. Tax expert Ashfaq Tola said if someone wants to buy a property in Tax Year 2025, he will be considered an eligible person if they filed their income tax return for Tax Year 2024 and have sufficient resources to cover the transaction. On the other hand, an â€œineligible personâ€ is someone who does not meet these criteria. This includes individuals who have not filed their income tax return for the preceding tax year or do not have sufficient resources to cover the transaction. To illustrate this, said Shahid Hussain, another tax consultant, consider the case of Mr A, who filed his income tax return for Tax Year 2024 and declared his wealth at PKR 100. However, he wants to purchase a property worth PKR 500. Despite being a filer, Mr A would be considered an ineligible person due to insufficient resources. According to the tax practitioners, the new rules aim to ensure that individuals and companies have the necessary financial resources to undertake immovable property transactions. They have advised taxpayers to carefully review their financial situation and ensure they meet the eligibility criteria before entering into any property transactions. Copyright Business Recorder, 2025 ISLAMABAD: The Islamabad Excise and Taxation Department has extended the deadline for vehicle token tax payments by 15 days, said a press release on Sunday. The decision is taken to facilitate vehicle owners, providing them with more time to clear their dues and avoid legal penalties, the press release added.

Date: 2025-01-05

Details: Karachi, January 5, 2025 â€“ The Federal Board of Revenue (FBR) has outlined severe consequences for the failure to deposit sales tax dues, including a potential three-year jail term. According to the Sales Tax Act, 1990, individuals who fail to remit the required sales tax within the prescribed deadlines face strict fines, penalties, and even imprisonment. Under the FBRâ€™s regulations, anyone who does not deposit the full sales tax amount, or any part of it, as required by the law or the related rules and orders will incur a penalty. The penalty for non-payment will be either a fine of ten thousand rupees or five percent of the tax amount due, whichever is greater. However, if the sales tax amount is settled within ten days of the due date, the penalty reduces to a daily fine of five hundred rupees for each day of default. The FBR also clarified that no penalty will be imposed for the first instance of miscalculation of sales tax during the year. However, failure to pay the sales tax due, even after the issuance of a notice by an officer of Inland Revenue (not below the rank of Assistant Commissioner), will lead to more severe repercussions. If the defaulter does not pay within sixty days of receiving such a notice, they will be further liable to a penalty. This could include a conviction that may result in imprisonment for up to three years, a fine equal to the tax amount owed, or both. This stringent penalty system reflects the FBRâ€™s commitment to improving compliance with the sales tax laws and ensuring timely payments. The law is designed to discourage delays in the deposit of sales tax, emphasizing that non-compliance can lead to significant legal consequences, including imprisonment. The FBRâ€™s move highlights the importance of adhering to tax deadlines and encourages businesses and individuals to prioritize their sales tax obligations to avoid severe financial and legal repercussions.

Date: 2025-01-05

Details: Karachi, January 5, 2025 â€“ The Federal Board of Revenue (FBR) will impose strict penalties to address delays and non-compliance in filing sales tax returns, emphasizing the importance of timely submissions under the Sales Tax Act, 1990. According to the FBR, individuals or entities failing to furnish sales tax returns by the due date will face financial repercussions. The prescribed penalty for such delays is PKR 10,000. However, a concessionary penalty applies to those filing their returns within ten days of the due date, amounting to PKR 200 per day of delay. The FBR also outlined penalties for failing to meet other requirements under the Act. For instance, any individual who does not issue a proper invoice as mandated by law will be liable to pay a penalty of PKR 5,000 or 3% of the tax amount involved, whichever is higher. In cases of unauthorized issuance of invoices that include a tax amount, stricter penalties are imposed. Offenders will be required to pay either PKR 10,000 or 5% of the tax amount involved, whichever is higher. These measures aim to ensure transparency and compliance within the tax system, reducing fraudulent practices and encouraging adherence to legal obligations. The FBRâ€™s directive highlights its commitment to improving tax administration and accountability in Pakistan. Businesses and individuals are advised to take these penalties seriously and ensure compliance to avoid unnecessary financial burdens. Timely filing of sales tax returns is essential not only to avoid penalties but also to maintain a smooth relationship with the tax authorities. Tax consultants and professionals have welcomed these measures, considering them a step toward fostering a more disciplined tax environment. However, they have also urged the FBR to improve facilitation for taxpayers by enhancing online systems and addressing technical glitches, which can sometimes contribute to delays. As the FBR continues its drive to improve tax compliance, taxpayers in Karachi and across Pakistan are encouraged to be proactive in meeting their obligations, ensuring their returns are filed accurately and on time.

Date: 2025-01-04

Details: Karachi, January 4, 2025 â€“ The Federal Board of Revenue (FBR) has made it mandatory for registered taxpayers to furnish comprehensive transaction details in their sales tax returns. This directive, aimed at ensuring transparency and compliance, requires taxpayers to adhere to the provisions outlined in Section 26 of the Sales Tax Act, 1990. Under Section 26 of the Sales Tax Act, 1990, the FBR stipulates that all registered persons must submit accurate and complete returns by the due date. These returns must include detailed records of sales, purchases, taxes due, taxes paid, and any additional prescribed information. The returns are to be filed electronically through designated banks or other offices specified by the FBR. The FBR has emphasized the importance of digital filing, noting that returns submitted electronically via the web or other computer-readable media will be considered valid. To facilitate this process, the FBR may issue notifications defining eligibility criteria for electronic data submission and the roles of e-intermediaries responsible for digitizing and transmitting the data securely. To address non-compliance, the FBR allows officers of Inland Revenue to issue notices to individuals or entities that fail to file returns. These notices require submission within a specified timeframe, generally within 15 days of receipt, though this period may vary. In cases of tax fraud, such notices can be issued up to 15 years after the relevant financial year, while for other cases, the limit is five years. The FBR also permits taxpayers to file revised returns to correct omissions or inaccuracies. Taxpayers can do so within 120 days of the original filing, subject to approval from the Commissioner Inland Revenue. If revisions are made within 60 days and result in higher tax payments or lower refund claims, no additional approval is required. For those who voluntarily disclose and pay any evaded taxes before an audit notice is issued, the FBR provides penalty waivers, provided the taxpayer deposits the evaded tax amount along with the applicable default surcharge. However, penalties escalate if payment occurs after receiving an audit notice or show-cause notice. Additionally, the FBR reserves the right to require specific details or summaries of transactions for particular goods or sectors through official notifications. This measure underscores the FBRâ€™s commitment to enhancing accountability and ensuring compliance within the tax framework. The FBRâ€™s latest directive reinforces its role in promoting fiscal discipline and transparency in Pakistanâ€™s taxation system.

Date: 2025-01-04

Details: Karachi, January 4, 2025 â€“ The Federal Board of Revenue (FBR) has introduced a clear procedure for taxpayers seeking an extension in filing their sales tax returns. This step aims to streamline compliance and provide relief to registered persons facing genuine difficulties. Under Section 26AB of the Sales Tax Act, 1990, taxpayers can apply for an extension in submitting their returns. This section outlines the requirements and conditions under which such requests may be approved. According to Section 26AB, a registered person obligated to furnish a return under Section 26 must formally apply in writing to the Commissioner for an extension. The application should be submitted by the original due date for filing the return, as stipulated under Section 2(9) of the Act. The Commissioner may grant an extension if satisfied that the applicant is unable to file their return on time due to specific circumstances, such as: â€¢ Absence from Pakistan. â€¢ Sickness or unforeseen misadventures. â€¢ Any other reasonable cause deemed valid. The extension period typically cannot exceed 15 days from the original due date unless exceptional circumstances justify a longer duration. If the Commissioner denies an extension, the taxpayer can escalate the matter to the Chief Commissioner, who may grant additional time, again not exceeding 15 days without exceptional justification. While these extensions offer flexibility in submitting returns, they do not alter the due date for the payment of sales tax under Section 6. Consequently, any delay in payment beyond the original deadline will attract default surcharges as specified under Section 34. The FBR emphasized that these measures aim to balance compliance requirements with fairness, ensuring that taxpayers facing genuine difficulties are not unduly penalized. This procedural clarification also reinforces the importance of timely return filing to maintain transparency in the tax system. Tax practitioners and registered persons are advised to review the provisions of Section 26AB thoroughly to understand the process for requesting extensions. With clear guidelines in place, the FBR expects taxpayers to adhere to deadlines unless valid reasons necessitate an extension. The move underscores the FBRâ€™s commitment to fostering a taxpayer-friendly environment while ensuring compliance with sales tax regulations.

Date: 2025-01-03

Details: Hamid Waleed Published about 2 hours ago LAHORE: The Income Tax department has proved that the Civil Aviation Authority (CAA), a state-owned enterprise (SOE), would have to opt for the Alternate Dispute Resolution (ADR) to establish its claim that it was exempt from paying income tax and didnâ€™t have to follow the ARD process. It may be noted that the SOEs are claiming exemption from paying income tax despite an amendment to section 134A of the Income Tax, requiring SOEs to mandatorily go for ARD to prove their exemptions. The ADR process is available to resolve tax disputes between state-owned enterprises and the Federal Board of Revenue. Initially, said sources, when this scheme was launched it had its teething problems for a number of reasons, including, but not limited to, the authority of FBR in terms of Section 134A(2) of the Ordinance not to accept the decision of an ADR committee if it was in favour of the taxpayer; a right of further appeal if the, taxpayer was not satisfied with the order of FBR; and composition of ADRC Committees which were headed by the officers of the FBR. Finally, on 06.05.2024 Tax Laws (Amendment) Act, 2024, was promulgated, whereby the newly amended Section 134-A of the Ordinance is to apply mutatis mutandis on the Sales Tax Act,1990 and the Federal Excise Act, 2005; the limit of Rs.100 million has been reduced to Rs 50 million. The sources said the most significant and relevant amendment made, which is fully applicable to the CAA, is that now it is mandatory for SOE to go for ADR, whereas the limit of Rs 50 million is also not applicable. Earlier, the management of an SOE was reluctant to go for mediation in any business transaction due to fear of prosecution, but through the newly amended provisions, they have been protected from any suit, prosecution or other legal proceedings. Since referral to ADR is now mandatory for SOE, a right to appeal has also been provided to SOE when the matter is not decided by ADRC within the stipulated period. Accordingly, the relevant appellate forum has directed the CAA to use the ADR process or follow the Rules of Business to resolve the dispute. Copyright Business Recorder, 2025

Date: 2025-01-03

Details: Zahid Baig Published about an hour ago LAHORE: Referring to a 4.76 percent decline in domestic cement despatches during the month of December 2024, the All Pakistan Cement Manufacturers Association (APCMA) said on Thursday that a reduction of duties and taxes on cement can boost sales and improve the sector. According to the data released by the All Pakistan Cement Manufacturers Association (APCMA), local cement despatches by the industry during December 2024 were 3.370 million tons compared to 3.539 million tons in December 2023, showing a decline of 4.76%. Exports despatch, however, increased by 49.35% as the volumes increased from 524,656 tons in December 2023 to 783,550 tons in December 2024. Total cement deliveries during December 2024 were 4.154 million tons against 4.063 million tons dispatched during the same month of last fiscal year, showing an increase of 2.23%. In December 2024, North-based cement mills dispatched 2.9 million tons cement showing a decline of 3.71% against 3.012 million tons despatches in December 2023. South-based mills despatched 1.254 million tons of cement in December 2024, which was 19.25% more compared to the despatches of 1.052 million tons during December 2023. North based cement mills despatched 2.786 million tons cement in domestic markets in December 2024 showing a decline of 5.11% against 2.936 million tons despatches in December 2023. South based mills despatched 584,684 tons cement in local markets during December 2024 that was also 3.04% less compared to the despatches of 603,010 during December 2023. Exports from North-based mills increased by 50.18% as the quantities increased from 75,967 tons in December 2023 to 114,089 tons in December 2024. Exports from the South also increased by 49.20% to 669,461 tons in December 2024 from 448,689 tons during December 2023. During the first six months of the current fiscal year, total cement despatches (domestic and exports) were 22.933 million tons that is 3.97% lower than 23.881 million tons despatched during the corresponding period of last fiscal year. Domestic despatches during this period were 18.122 million tons against 20.228 million tons during same period last year showing a reduction of 10.41%. Export despatches were 31.69% more as the volumes increased to 4.810 million tons during the first six months of the current fiscal year compared to 3.653 million tons of exports during the same period of last fiscal year. Commenting on the figures, APCMA spokesman expressed grave concerns over the continuous decline in local cement demand. He emphasized that local off-take plays a major role in the industryâ€™s economic growth. â€œReduction of duties and taxes by the government can bring the cost of the commodity down, which can boost the sales and enable the sector to use its idle capacity,â€ he added. Copyright Business Recorder, 2025

Date: 2025-01-03

Details: Sohail Sarfraz Published about an hour ago ISLAMABAD: The Appellate Tribunal Inland Revenue (ATIR) has held that long silence and inaction by Federal Board of Revenueâ€™s officials in recovering confirmed tax demand constitutes a sufficient ground to condone delays in filing appeals by the taxpayers before the ATIR. It is reliably learnt that appeal was argued by Lahore based tax lawyer Waheed Shahzad Butt, who emphasized that in revenue matters, courts and tribunals should adopt a more lenient approach toward taxpayers seeking condonation of delays. Tax lawyer contended that such matters should not be decided solely on technical grounds but rather evaluated with a broader understanding of justice and fairness. The ATIR underscored the mandatory requirement for the service of orders on taxpayers before initiating any tax recovery proceedings. The decision highlighted that failure to properly serve the taxpayer creates a procedural lacuna, undermining the legitimacy of recovery actions. The ruling sets a precedent that aligns with the principles of natural justice and taxpayer rights. It calls upon the FBR to act promptly and efficiently in executing tax demands while ensuring that procedural safeguards, such as serving the taxpayer, are strictly adhered to, Waheed added. Appellant stated: â€œWe were completely unaware of any confirmation of outstanding tax demand or the issuance of any adverse order until receipt of recently recovery notice dated 04.12.2024 received on 5th day of December 2024, the first recovery notice received by the appellant, is the instant recovery notice, since the passing of any appellate order. We have conducted a thorough in-house investigation and can confirm that no prior notice for adverse appellate order under any provisions of Income Tax Ordinance, 2001 was either served at appellantâ€™s registered address. This humble applicant is aggrieved with the meaningful silence on the part of sub-ordinate tax employees, as it is, in our honest and considered view, in manifest breach of the provisions of Article 4, 5(2) & 10A of the Constitution read with binding verdicts.â€ Regarding the miscellaneous application for condonation, neither any written notice nor any appellate order was ever issued/served by the appellate forum. There is complete silence on the part of RTO tax functionaries during the period till 04.12.2024 (when recovery notice has been issued in terms of Section 138). In the circumstances, the delay is not deliberate, therefore, we accept the request of the taxpayer and condone the delay, the ATIR ordered. Copyright Business Recorder, 2025

Date: 2025-01-02

Details: ISLAMABAD: Federal Tax Ombudsman (FTO) has promptly resolved 12,941 complaints filed by taxpayers against the Federal Board of Revenue (FBR) during 2024 against highest number of 13,506 complaints received during this period. Senior FTO officials informed media here on Wednesday that the number of complaints filed against the FBR remained highest during 2024. This record number of 13,506 complaints has been received by the FTO office during 2024. In this regard, during last calendar year ending December 31, 2024, FTO office received all time high number of complaints at 13,506. Simultaneously, FTO Secretariat, and all Regional Offices disposed of 12,914complaints, which works out for 95.6% of total complaints. This all time high number of complaints is due to vigorous awareness sessions conducted by the FTO and his Advisors throughout the country. The Chambers of Commerce & Industries of all big cities, Tax Bar Associations, business community Associations and Tax law practicing bodies were targeted to disseminate information about the role and functions of FTO organisation, which resulted into this colossal number of complaints. As a result of outreach and awareness sessions, a record number of complaints and decisions of FTO were rolled out. Resultantly, grievances of thousands of Complainants were redressed. During the year under consideration, in addition to regular complaints, the FTO also encouraged poor and less privileged Complainants for informal resolution of their grievances. â€œAs such we received 1540 informal complaints and the same were resolved. In addition to that we received 143 reference cases which were also disposed of. The total number of Own Motion initiatives stood at 32 through which relief was granted to large number of Complainants/ individuals.â€ Since FTO organisation is a relief-oriented entity; therefore, this Secretariat provided relief to low paid employees by holding proper taxation of the same. In addition, thousands of Folk Artists were provided relief by ameliorating the situation in the then ongoing withholding taxes. Similarly, relief on account of tax rebate to teachers, in the relevant year, were also provided in a large number of cases, FTO officials added. Copyright Business Recorder, 2025

Date: 2025-01-02

Details: Section 21 of the Sales Tax Act, 1990, provides detailed guidelines for de-registration, blocking, and suspension of taxpayer registration. It is a vital mechanism used by the Federal Board of Revenue (FBR) to address tax evasion and ensure compliance. Hereâ€™s an expanded overview: 1. De-registration The FBR or an authorized officer has the authority to de-register individuals or groups not required to be registered under the Act. This ensures that only eligible and active businesses remain part of the sales tax network. 2. Suspension for Tax Fraud If the Commissioner has evidence that a registered person is involved in issuing fake invoices or committing tax fraud, they can suspend or block that individual. This decision is taken following a set procedure prescribed by the FBR and is officially notified in the Gazette. 3. Effects of Suspension During the suspension period, invoices issued by the taxpayer are invalid for sales tax refunds or input tax credits. If the taxpayer is blocked, any refund or credit claims based on their invoices, whether issued before or after blocking, are automatically rejected. However, the law ensures fairness by allowing the taxpayer to present their case before a final decision is made. 4. Actions Against Suspicious Activity If the FBR, Commissioner, or an authorized officer suspects a taxpayer of fraudulent activities, such as issuing fake invoices, claiming fraudulent refunds, or not conducting actual business, they can take the following actions: â€¢ Block refunds or input tax adjustments. â€¢ Initiate further investigation and appropriate legal proceedings. 5. Review of Orders The Chief Commissioner can review and modify suspension or blocking orders after examining the records and conducting necessary inquiries. Importantly, no order can be finalized without giving the taxpayer an opportunity to be heard, ensuring due process. Summary Section 21 serves as a critical tool for maintaining transparency and deterring fraudulent activities in Pakistanâ€™s tax system. It balances stringent action against tax evasion with safeguards for taxpayersâ€™ rights, emphasizing accountability and fairness in the tax administration process.

Date: 2025-01-01

Details: LAHORE: The importers of Cocoa Powder have failed to claim exemption under two different notifications simultaneously. According to details, the importers had claimed exemption from customs duty in terms of SRO 1261, which was neither disputed nor denied by the department. However, at the same time, the importers were also entitled to exemption from additional customs duty in terms of serial No. 3(vi) of SRO 967 read with serial No.2, chapter VII, Part-II, table-B of fifth schedule to the Customs Act, 1969. But the department was of the view that the importers cannot claim exemption under two different notifications/SROs simultaneously. The department pointed out that additional customs duty was levied pursuant to SRO 967(I)/2022 on all goods, therefore, the importers could not claim benefit of this SRO for its peculiar enforcement. Since importers were aggrieved of levy of additional customs duty on importing Cocoa Powder, therefore, they challenged the departmental order. The importers also referred to a letter from the Federal Board of Revenue (FBR) holding that an importer can claim the benefit of more than one notification at a time, therefore, they should be allowed for the same. But the department took the plea that the importers are not entitled to exemption from additional customs duty in terms of SRO 967, as the same is available only to such important, which are chargeable to the customs duty under the fifth schedule of the Act while the department has charged them under the first schedule to the Act. According to the department, it was not a case of claiming of exemption under two different notifications/SROs simultaneously, rather the porters were otherwise not entitled to claim any exemption under SRO 967. The relevant appellate forum maintained that the argument that the importers claim for exemption under two different SROs has been denied in violation of FBRâ€™s letter is misconceived because they are not entitled for any exemption pursuant to serial No.3 of SRO 967. Copyright Business Recorder, 2024

Date: 2025-01-01

Details: ISLAMABAD: The Pakistan Association of Large Steel Producers (PALSP) has urged upon the government to withdraw unfair tax exemption enjoyed by units of erstwhile tribal areas, which is massively misused and all products produced in tribal areas are sold in tariff areas of Pakistan. According to a communication of PALSP to the prime minister, the PALSP appreciates some of the recent initiatives of the government, aimed at revival of the local industry. However, the purpose agenda of the meeting of the Committee on Taxation Regime of NMDs held on 26th Dec 2024 has sent shockwaves to the steel as well as many other industries of the country. After attending the meeting, we noticed with great concern that the core agenda of the meeting is to perpetuate the killing exemptions unfairly granted to NMDs for the last 6/7 years. These exemptions to NMDs who are now part of Pakistan, give impression of one state and two rules within the same country. The tax exemption enjoyed by the industrial units in (Fata/Pata) NMDs is massively misused and all products produced in Fata/Pata are being sold to tax areas without any resistance, causing closure of tens of steel units in Hattar estate, Islamabad and Gadoon Industrial Estate. This is most unfair detrimental measure being practiced since last 6/7 years to ruin and destroy the local tax paying industry. PALSP protests against any measure aimed at perpetuation of these discriminatory exemptions to NMDs. The association has appealed to the government and to all those who matter to put a stop to these exemptions forthwith. The steel industry is facing unprecedented crisis and as a result the foreign investors like Century Steel, the first Chinese private sector investment, has already threatened to quit and stop further investments, casting a shadow over the industryâ€™s future. Apart from steel industry - Long, Flat, Round industry, other important industries including ghee, plastics and tea are suffering due to massive misuse of tax exemptions enjoyed by the NMDs based industrial units. As a result, over 60% of the local steel industry have been wiped out, with more than 50 units closed down in KPK, Islamabad, Lahore, Karachi, and Gujranwala/Daska. The KPKâ€™s largest steel unit, producing 400 tons rebars daily, has been shut down causing loss of billions to the exchequer, the association stated. The exemptions were extended to FATA/PATA to give relief to people living in the area but the facility/concessions were massively misused and the goods produced in the non-taxed areas are blatantly sold in rest of the country/taxed areas without the levy of Sales Tax. These exemptions pamper a very small fraction of 2% of industry in Fata/Pata at the cost of devastation to 98% industry in rest of the country, the association stated. In the budget FY 2024-25, the sales tax exemption given to industry of NMDs were extended only for one year with the condition of bank pay order in favor of the FBR at the time of clearance of Raw Materials at import state to safeguard the FBR revenue. However, Fata/Pata industries challenged this budgetary decision in the Peshawar High Court and pleaded to allow post-dated cheques instead of pay-orders for payment of tax/Customs duties. As a result, in the judgement dated 31-10-2024, the PHC ruled in favor of the ex-Fata/Pata mills, setting aside finance bill amendment No. 151 of the fifth schedule of the sales tax Act, 1990, the association maintained. Those who are pleading for perpetuation of exemptions to NMDs include influentials from political and trade bodies who have stakes in FATA/PATA as they own steel and ghee units in these areas. These are the elements who misguided the govt and working for the perpetuation of these exemptions solely for their personal vested interests; with no relief intended for the common man of NMDs. The government is urged to establish fair and transparent tax system applied uniformly across all regions of the country. The government must avoid any move aimed at perpetuation of the unfair tax exemptions to NMDs to avoid further damage to the steel, oil, ghee, plastic, tea as well as other industries, it added. Copyright Business Recorder, 2024

Date: 2025-01-01

Details: Karachi, January 1, 2025 â€“ The Regional Tax Office (RTO) â€“ 1 Karachi, an important wing of the Federal Board of Revenue (FBR), has taken decisive action by sealing two prominent bakeries in the city for failing to comply with Point of Sale (POS) regulations. According to FBR sources, the RTO â€“ 1 Karachi conducted operations against the bakeries located in Saddar and Clifton after identifying non-compliance with the mandated POS integration. The Federal Board of Revenue emphasized that this measure aims to ensure transparency in business transactions, prevent revenue leakage, and promote compliance with tax laws. The crackdown was carried out under the strict instructions of Chief Commissioner Inland Revenue, Dr. Faheem Muhammad. FBR officials stated that this operation underscores their commitment to enforcing tax regulations and curbing practices that undermine the tax system. They reiterated the importance of POS compliance as a key mechanism to monitor real-time sales data and improve revenue collection. The FBR has consistently highlighted the need for businesses to adhere to POS regulations, which require integration of their systems with the FBRâ€™s network. This integration facilitates accurate reporting of sales and ensures that due taxes are collected efficiently. By sealing these bakeries, the FBR has sent a strong message to the business community that non-compliance will not be tolerated. â€œThis action is not only about penalizing violators but also about fostering a culture of accountability and transparency in business practices,â€ FBR sources stated. â€œWe urge all businesses to fulfill their legal obligations to avoid such consequences in the future.â€ The FBRâ€™s operation in Karachi is part of a broader campaign to enforce POS regulations across various sectors. Officials noted that while the majority of businesses have complied with the requirements, certain entities continue to evade integration, necessitating such stringent actions. The sustained efforts of the FBR reflect its determination to modernize Pakistanâ€™s tax collection system and ensure equitable taxation.

Date: 2024-12-31

Details: Karachi, December 31, 2024 â€“ Pakistan has announced the exemption of customs duties on 261 tariff lines for imports from D-8 countries, a move effective from January 1, 2025. This initiative is part of Pakistanâ€™s commitment to fostering regional trade under the D-8 Preferential Trade Agreement (PTA). The Federal Board of Revenue (FBR) has issued a statutory regulatory order (SRO 2075) detailing the gradual reduction of these duties, which will continue until 2028. This development aligns with Pakistanâ€™s strategy to enhance economic cooperation with D-8 member states, which include Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, and Turkiye. According to the FBR, imports from these countries must comply with the D-8 Preferential Trade Agreement Rules of Origin, 2024, as outlined in the Import Policy Order, 2020. This ensures that only eligible goods, originating from member states and adhering to the specified criteria, benefit from the reduced customs duties. Under the provisions of Section 18C and Section 19 of the Customs Act, 1969, Pakistan has exercised its authority to implement this exemption. The FBR emphasized that in cases where the agreed customs duty rates in the D-8 trade agreement are lower than existing rates, the preferential lower rates will take precedence. This policy adjustment is expected to stimulate trade among D-8 countries by lowering the cost of imports and fostering economic collaboration. By reducing trade barriers, Pakistan aims to strengthen ties with its D-8 counterparts and attract a wider range of goods into its markets. Economic analysts believe this move could lead to a more competitive market environment and increased availability of goods in Pakistan. Furthermore, it signals the countryâ€™s active participation in regional trade agreements, which could pave the way for broader economic integration and mutual benefits among member states. The phased approach to duty reductions reflects Pakistanâ€™s commitment to a balanced implementation strategy, ensuring both compliance with international agreements and support for domestic industries during the transition period.

Date: 2024-12-31

Details: Karachi, December 31, 2024 â€“ The Federal Board of Revenue (FBR) is poised to collect an estimated Rs 70 billion from the banking sector after the promulgation of the Income Tax (Amendment) Ordinance, 2024, a significant development aimed at bolstering revenue collection. President Asif Ali Zardari signed the ordinance into law late Monday night, introducing pivotal changes to the Advance Deposit Ratio (ADR) of banks. This measure is expected to generate substantial revenue, addressing shortfalls in the FBRâ€™s tax collection efforts. The ordinance imposes a 44% tax on banking companies for the tax year 2025, marking a notable adjustment in the taxation structure. This rate will taper slightly in subsequent years, reducing to 43% for the tax year 2026 and 42% for the tax year 2027 and beyond. These revisions in the tax framework are designed to streamline fiscal contributions from the banking sector, a critical component of the national economy. The Income Tax (Amendment) Ordinance, 2024 also amends the First Schedule and Seventh Schedule of the Income Tax Ordinance, 2001. It delineates tax rates across various company categories: â€¢ Banking Companies: 44% (2025), 43% (2026), and 42% (2027 onward). â€¢ Small Companies: 20%. â€¢ Other Companies: 29%. A key aspect of the ordinance pertains to the computation of gross advances and deposits. For tax purposes, these are defined as the amounts reflected at the end of the accounting period in the annual audited accounts. The ordinance further stipulates that from the tax year 2025 onward, profits and gains of banking companies will be subjected to tax rates specified under Division II, Part I, of the First Schedule. The FBR anticipates receiving the Rs 70 billion from banks by December 31, 2024, offering a critical boost to the governmentâ€™s efforts to meet its revenue targets. Analysts have noted that this measure, though robust, underscores the increasing reliance on the banking sector to bridge fiscal gaps. This development highlights the governmentâ€™s proactive stance in addressing tax shortfalls, leveraging targeted legislative measures to ensure enhanced fiscal contributions from key economic sectors. The ordinance is expected to not only bolster revenue streams but also reinforce fiscal discipline within the banking industry.

Date: 2024-12-31

Details: Karachi, December 31, 2024 â€“ The Federal Board of Revenue (FBR) has issued a stern warning to individuals and businesses failing to comply with sales tax laws. Non-compliant taxpayers may face the disconnection of their gas and electricity connections under strict provisions of the Sales Tax Act, 1990. According to the FBR, Section 14AB of the Sales Tax Act empowers tax authorities to instruct gas and electricity distribution companies to disconnect utility services for non-compliant entities. This enforcement measure is aimed at encouraging compliance with sales tax registration and integration requirements. The FBR explained that under Section 14AB, it has the authority to direct the disconnection of utility services for two categories of taxpayers: 1. Unregistered Individuals or Entities: Any person, including tier-1 retailers, who fail to register for sales tax purposes. 2. Non-Integrated Tier-1 Retailers: Retailers who, despite being registered, have not integrated their systems with the FBRâ€™s Computerized System for real-time sales tax reporting. The FBR clarified that the discontinuation of gas and electricity connections will be enforced through a Sales Tax General Order. However, it added that compliance could lead to the restoration of utility services. Upon registration or integration with the FBR system, the relevant taxpayerâ€™s gas and electricity connections will be reinstated through another Sales Tax General Order. This move by the FBR underscores its commitment to enhancing tax compliance and broadening the tax net. The authority has been actively pursuing measures to bring non-compliant businesses into the formal economy, ensuring equitable tax collection and reducing revenue leakages. Tax experts have highlighted the importance of complying with FBR regulations to avoid operational disruptions. Gas and electricity are essential for business continuity, and losing access to these services could result in significant financial losses for non-compliant entities. The FBRâ€™s announcement serves as a reminder to taxpayers, particularly tier-1 retailers, to adhere to sales tax laws and integrate their operations with the FBRâ€™s computerized system. By doing so, they can avoid potential disconnections and contribute to the nationâ€™s economic stability.

Date: 2024-12-29

Details: ISLAMABAD: The Customs Classification Committee of the Federal Board of Revenue (FBR) has declared that â€œKola Vanilla Extractâ€, used as a flavouring agent/ preservative in the manufacturing of beverages is appropriately classifiable under Pakistan Customs Tariff (PCT) Heading 2106.9010. This ruling is based on characteristics and use of imported goods. In this regard, Customs Classification Committee has issued a new valuation ruling. Background of the issue revealed that the Collectorate of Customs (Appraisement) Islamabad forwarded a reference for the determination of actual classification of â€œKola Vanâ€ imported by M/s. Pepsi Cola International and sought clearance under PCT heading 1302.1900. However, the Directorate General of Audit (Customs & Petroleum) Lahore during the audit of Islamabad dry-port for the year 2013-14 raised audit observation No. 09 (DP-2256) stating that: â€˜According to 1st schedule to the customs act 1969, flavours and concentrates for aerated beverages are classifiable under PCT heading 3302.1010 with customs duty @ 10% and federal excise duty @50% ad valorum. Further, introductory notes to chapter 13 clearly state that 1302 does not cover â€œEssential oils, concretes, absolutes, resinoids, extracted oleoresins, aqueous distillates or aqueous solutions of essential oils or preparations based on odoriferous substances of a kind used for the manufacture of beverages (chapter 33)â€. Since, â€˜Kola Vanâ€™ consisting of natural saponins, sugar, glycerin and ethanol which has been used as preservative, therefore, â€˜Kola Vanâ€™ being an odoriferous substance and flavoring agent, is appropriately classifiable under PCT heading 3302.1010. It was, further pointed out that M/s. Pepsi Cola has already availed clearance of Kola Van under HS code 3302.1010 vide GD No. ICSI-HC-2944-30-05-2017 and ICSI-HC-679-04-10-2016. The Collectorate of Customs Islamabad referred the case to the Adjudication Collectorate. The adjudicating authority decided the case in favour of the department vide order in original No. 70/2017 dated 14.05.2017. Being aggrieved, the importer filed an appeal before the Appellate Tribunal vide Appeal No. 139/CU/IB/2017. During hearing proceedings, the Appellate Tribunal directed to refer the subject case to the Classification Centre Karachi for determination of appropriate classification of goods. In view of the directions of the Appellate Tribunal, Islamabad, the case was forwarded to the Classification Center, Collectorate of Customs Appraisement (East), Karachi along with relevant documents for determination of appropriate classification. After thorough examination, the Classification Committee concludes that â€œKola Vanilla Extract,â€ comprising kola and vanilla extracts, propylene glycol, glycerin, sugar, and caramel, and by the application of relevant Tariff rules confirm that the product is not a raw extract as defined under Chapter 13.02. As per GIR -1, the product must be classified according to the terms of the headings and Chapter Notes. Furthermore, Chapter Note 1(ij) to Chapter 13 explicitly excludes preparations based on odoriferous substances used for the Manufacture of beverages, while Chapter Note 1(a) to Chapter 33 excludes vegetable extracts of heading 13.02. Additionally, GIR 3(b) provides that for mixtures or composite goods, classification is based on the component that gives the essential character. In this context the productâ€™s use as a concentrate for aerated beverages determines its essential character. In light of the foregoing analysis, â€œKola Vanilla Extractâ€ is appropriately classifiable under PCT Heading 2106.9010 based on characteristics and use of imported goods by application of GIR-1 and 3(b), the ruling added. Copyright Business Recorder, 2024

Date: 2024-12-29

Details: Karachi, December 29, 2024 â€“ Pakistanâ€™s banks face a pivotal moment as it navigates the fallout from recent tax reforms. Analysts at Arif Habib Limited highlighted on Sunday that while the removal of the Advance to Deposit Ratio (ADR) tax on income from government securities brings relief, it comes at the cost of a higher corporate tax burden. The federal cabinetâ€™s approval of a new ordinance has eliminated the ADR tax, previously levied at rates between 10-16%, but has simultaneously raised the corporate income tax rate for banks. This restructuring has far-reaching implications for the sectorâ€™s profitability and operational dynamics. Corporate Tax Hike: A Double-Edged Sword The elimination of the ADR tax marks a significant policy shift, sparing banks from additional levies tied to government securities. However, this relief is offset by a corporate tax increase from 39% to 44% for the fiscal year ending December 31, 2024. While the government plans a gradual reduction in the tax rateâ€”dropping to 43% in 2026 and 42% in 2027â€”the immediate impact on banking profitability cannot be overlooked. Sector analysts project a 10% decline in banking sector earnings for 2024, followed by an 8% reduction in 2025 and 6% in 2026. This adjustment translates to an estimated PKR 62-65 billion in additional revenue for the government, bolstering its tax collection efforts amid fiscal constraints. Clarity Amidst Turbulence Despite the financial strain posed by higher taxes, the removal of the ADR tax brings a sense of stability to the sector. For over two years, banks have grappled with fluctuating tax policies, often prioritizing ADR compliance to evade punitive taxes. With this obstacle removed, banks can now concentrate on their core operations and strategic growth. This clarity is especially critical for investors, as it provides a foundation for more predictable earnings and financial trajectories. While the short-term impact on earnings per share (EPS) and return on equity (ROE) is negativeâ€”ROE estimates have been adjusted downward from 20% to 18.8%â€”analysts believe the sector is well-positioned to adapt. A Roadmap for Optimism The governmentâ€™s phased reduction in corporate tax rates offers a glimmer of hope for the banking sector. Coupled with the elimination of ADR-related pressures, this reform could empower banks to optimize their lending portfolios and recalibrate their strategies for sustained growth. As the sector adjusts to these changes, the focus will likely shift toward efficiency and innovation, ensuring resilience in the face of evolving fiscal policies. While challenges persist, the long-term outlook remains cautiously optimistic, supported by newfound regulatory clarity and a gradual easing of tax burdens.

Date: 2024-12-29

Details: Karachi, December 29, 2024 â€“ Section 11C of the Sales Tax Act (STA), 1990, empowers tax authorities to adjust or modify assessments and orders based on decisions made by higher judicial bodies. This provision is designed to ensure that tax assessments align with the latest legal interpretations. Sub-section (1): Alignment with Judicial Orders When a question of law is decided by a High Court or the Appellate Tribunal in the case of a registered taxpayer, the Commissioner or an officer of Inland Revenue has the authority to apply the same decision to similar cases under their review. This is applicable even if an appeal or reference against the High Court or Tribunalâ€™s decision has been filed. The decision can be followed for assessments pending before the Commissioner or Inland Revenue officers, provided it addresses the same legal question. However, this alignment remains valid only until the decision of the High Court or Tribunal is reversed or modified by a higher authority. Sub-section (2): Adjustment Following Reversal or Modification If the High Court or Tribunalâ€™s decision is later reversed or altered, the Commissioner or Inland Revenue officer can revise the assessments or orders where the original decision was applied. Importantly, this revision can be made even if the statutory time limit for making such changes has expired. Authorities are given a one-year window from the date of receiving the new decision to ensure that the assessments or orders conform to the final legal ruling. This section highlights the adaptability of the tax system to judicial rulings, ensuring consistency in the application of tax laws. It allows for the temporary application of judicial decisions while providing a mechanism to rectify assessments when legal interpretations evolve. Tax experts emphasize the importance of clear communication between the judiciary and tax authorities to prevent undue delays and ensure taxpayers are not adversely affected by frequent changes in assessments. This provision demonstrates the balance between adhering to legal precedents and maintaining flexibility to address changes in judicial outcomes.

Date: 2024-12-29

Details: Karachi, December 29, 2024 â€“ The Federal Board of Revenue (FBR) has been granted the authority to recover short-paid sales tax amounts without issuing prior notice to the taxpayer. This authority is enshrined in Section 11A of the Sales Tax Act, 1990, which allows the FBR to act swiftly in cases of underpayment. Under Section 11A, the FBR is empowered to recover short-paid tax amounts directly from registered taxpayers who pay less than the tax due as declared in their returns. The provision enables the FBR to take recovery measures without the requirement of issuing a prior show-cause notice. These measures may include halting the removal of goods from the taxpayerâ€™s business premises and attaching the taxpayerâ€™s business bank accounts. The recovery process also incorporates the application of a default surcharge on the short-paid amount. This authority, however, comes with certain stipulations. While the FBR can proceed without prior notice for recovery, it cannot impose penalties under Section 33 of the Sales Tax Act unless a show-cause notice is issued to the taxpayer. Additionally, the recovery actions are without prejudice to any other legal measures outlined in Section 48 of the Act or the related rules. The introduction of this provision underscores the FBRâ€™s focus on ensuring tax compliance and addressing revenue shortfalls. It is designed to deter deliberate underpayment by taxpayers and provide the FBR with a mechanism to act decisively in recovering dues. However, it also raises concerns about the potential impact on businesses, particularly small and medium enterprises (SMEs), which may inadvertently underpay taxes due to errors or misunderstandings. Tax experts suggest that while the provision strengthens the FBRâ€™s enforcement capabilities, it should be exercised with caution to avoid undue hardship on businesses. Clear guidelines and safeguards are essential to ensure that legitimate taxpayers are not unfairly targeted. The balance between strict enforcement and taxpayer facilitation remains a critical challenge for the FBR as it seeks to boost revenue collection in an increasingly complex economic environment.

Date: 2024-12-28

Details: Karachi, December 28, 2024 â€“ The Regional Tax Office (RTO)-1 Karachi has undertaken a stringent crackdown on retail outlets violating Point of Sale (POS) regulations, sealing 19 establishments and recovering approximately Rs 25.5 million in penalties. According to an official statement released on Saturday, the RTO-1 Karachi has escalated its enforcement measures against POS violations within its administrative zones. The initiative reflects an intensified effort to ensure compliance with the Federal Board of Revenueâ€™s (FBR) directives regarding the mandatory integration of retail outlets into the POS system. The targeted action led to the sealing of 19 retail outlets found in breach of POS requirements. The penalties imposed on these outlets culminated in the recovery of Rs 25.5 million. This operation spanned all four administrative zones under the jurisdiction of RTO-1 Karachi, underscoring the comprehensive nature of the enforcement drive. Additionally, the RTO-1 Karachi successfully integrated seven new retail outlets into the FBRâ€™s POS system during the same period. This proactive measure aims to enhance transparency and improve tax compliance among businesses. Chief Commissioner RTO-1, Dr. Faheem Mohammad, has issued unequivocal directives to his team of Commissioners, emphasizing the importance of verifying POS systems within their respective jurisdictions. He instructed them to conduct thorough inspections and take swift, lawful actions against non-compliant entities. Dr. Faheem further underscored that the ongoing surprise inspections and enforcement activities would be intensified in the coming days. The objective is to deter violations and encourage greater adherence to the POS regulations, thereby strengthening the overall tax administration framework. The deployment of Point of Sale systems is pivotal for ensuring accurate documentation of sales and minimizing tax evasion. The FBRâ€™s persistent efforts in enforcing POS compliance signify its commitment to fostering a transparent and equitable tax ecosystem.

Date: 2024-12-28

Details: Islamabad, December 28, 2024 â€“ The Federal Board of Revenue (FBR) has taken decisive action against four Pakistan Customs officials for violating Civil Servants rules, emphasizing its commitment to ensuring accountability and maintaining discipline within its ranks. According to an official notification issued on December 27, 2024, the FBR invoked its powers under Rule-5(1) of the Civil Servants (Efficiency and Discipline) Rules, 2020, to suspend the officials with immediate effect. The suspension will remain in place until the conclusion of disciplinary proceedings under the same rules. The suspended officers, who were serving at the Collectorate of Customs in Sambrial, Sialkot, include: 1. Mr. Atif Hanif â€“ Principal Appraiser (Time Scale-17) 2. Mr. Adnan â€“ Appraising Officer (BS-16) 3. Mr. Muhammad Anique Jamil â€“ Inspector (BS-16) 4. Mr. Adeel Qurban â€“ Appraising Officer (BS-16) The notification underscores the FBR zero-tolerance approach toward misconduct and its efforts to uphold the highest standards of professionalism and transparency. By enforcing these disciplinary measures, the FBR aims to send a strong message to all officials about the importance of adhering to rules and regulations. The disciplinary proceedings against these officials will be conducted in accordance with the Civil Servants (Efficiency and Discipline) Rules, 2020. These proceedings are designed to provide a fair and impartial platform for investigating alleged misconduct and determining appropriate actions based on the findings. The FBR decision to suspend these officials is part of a broader initiative to improve governance and strengthen integrity within its workforce. Such actions reflect the organizationâ€™s resolve to ensure accountability at all levels and to address any behavior that compromises the efficiency and credibility of its operations. This development also highlights the FBRâ€™s commitment to its reform agenda, which includes enhancing institutional transparency and fostering a culture of compliance among its employees. Further updates on the outcome of these disciplinary proceedings are awaited.

Date: 2024-12-27

Details: ISLAMABAD: Minister for Finance Muhammad Aurangzeb Thursday unveiled the governmentâ€™s strategy to implement digitisation in the Federal Board of Revenue (FBR) for bringing high net worth individuals into the tax net. The FBR so far sent out tax notices to 186,000 high net worth individuals for possessing substantial assets, income and vehicles but never contributed up to the desired mark. The top five percent wealthy individuals, i.e. 670,000 are the potential tax dodgers in the country who spent money but never bothered to come into the tax net. These 0.6 million high net worth individuals are on the radar screen of tax authorities. However, the minister for finance did not reply directly when asked whether the government would bring mini budget or make an effort to convince the IMF for slashing down the FBRâ€™s tax collection target keeping in view the shortfall in the range of Rs0.34 trillion. The minister for finance replied that they would show the IMF sincere efforts undertaken by the government, adding that some assumptions were changed as inflation came down at accelerated pace. We will share all details with the IMF mission in â€œgood faithâ€ when they will come for review talks, he added. Flanked by Minister of Information and Broadcasting Ataullah Tarar, State Minister Ali Pervez Malik and FBR Chairman Rashid Mahmood Langrial, the Minister for Finance said that the National Fiscal Pact was signed by the Centre and Provinces and it would be implemented in cooperation with the federating units. He said that the Agriculture Income Tax (AIT) law was passed by the Punjabâ€™s assembly while other provinces were making progress at different stages. The finance minister said that the FBR achieved revenue growth of 29 percent but the target for current fiscal year was set with an ambitious target of 40 percent. Sharing the criteria for prioritising potential high net worth individuals, the FBR chairman said that the FBR identified 190,000 non-filers on the basis of six factors such as who earned bank profit of Rs1.3 million per annum, own more than three vehicles with cumulative value of Rs10 million, transaction of more than two properties with cumulative value of Rs16 million, withdrawal of more than Rs3.5 million per annum and possess two bank accounts, deposited at least Rs28 million and owns a credit card. The FBR chairman said that the FBR could easily collect Rs50 to Rs60 billion from these high net worth individuals but conceded that the tax laws could not be implemented as criminal law so there was a set procedure which would be followed. The FBRâ€™s official data shows that Regional Taxpayer Office (RTO), Lahore, sent out tax notices to 38,828, RTO-II Karachi 15,000, and LTU Karachi only 75 individuals. For sharing digitalisation update for execution of FBRâ€™s Transformation Plan, the tax compliance gap stood at Rs7.1 trillion including sales tax of Rs4.1 trillion, income tax Rs2.4 trillion and Customs Duty Rs0.6 trillion. Only 38,002 have filed their returns and deposited Rs377.62 million. It was agreed by the government and FBR high-ups that in the short run the FBR might face revenue shortfall but there is no other way to plug leakages. â€œOur hands have been tied and there is no other way for broaden the tax base,â€ the finance minister said, adding that how long the FBR would collect taxes from salaried and formal manufacturing sector so the retailers and others would have to come into the tax net. He said that the tax-to-GDP ratio hovered around nine to 10 percent which would be jacked up to 13.5 percent over 5-year period. The FBR chairman said that the government undertook actions against sugar sector and also implemented faceless assessment and examination mechanism to end collusion among the importers and Customs high-ups. He said that the PRALâ€™s new board was inducted. The new hiring will be done with an injection of Rs4 billion. The FBR will hire 550 new auditors to improve efficiency, he added.

Date: 2024-12-27

Details: December 27, 2024 Karachi, December 27, 2024 â€“ In a move to curb tax evasion, the Regional Tax Office-1 (RTO-1) Karachi has announced stringent action against four prominent wedding halls in the city for failing to deposit taxes mandated under Section 236CB of the Income Tax Ordinance, 2001. The RTO-1 identified these wedding halls as habitual offenders who ignored multiple directives to collect taxes from customers and remit the amounts to the national treasury. Despite repeated notices and warnings, the management of these venues deliberately failed to comply, prompting the authorities to escalate enforcement measures. This crackdown is part of RTO-1â€™s broader campaign to expand the tax net and ensure rigorous adherence to tax regulations. Officials have emphasized that non-compliance will no longer be tolerated, and violators will face severe consequences. These include not only legal action but also the potential sealing of premises under applicable tax laws. Such steps, the RTO asserts, are crucial to dismantling entrenched tax evasion practices and establishing fiscal accountability within the sector. The Federal Board of Revenue (FBR) has underscored the importance of compliance, reiterating clear directives for all wedding hall owners to fulfill their statutory duties. Wedding venues, given their high revenue generation, are seen as critical nodes for tax collection. Ensuring their compliance is integral to fostering a robust and equitable tax system. â€œThis initiative goes beyond merely enhancing revenue streams for the national treasury. It seeks to institutionalize a culture of compliance, ensuring that all stakeholders contribute their fair share to the countryâ€™s economic stability,â€ an RTO official stated. With the tax net expansion being a cornerstone of fiscal reform, RTO Karachiâ€™s decisive actions send a clear message to other non-compliant entities. The authorities have indicated that they will maintain relentless vigilance to prevent revenue leaks and uphold the integrity of the tax system. Business owners are now urged to rectify their practices proactively and avoid punitive measures, as the government intensifies efforts to enforce transparency and accountability across all economic sectors.

Date: 2024-12-27

Details: December 27, 2024 Islamabad, December 27, 2024 â€“ In a decisive effort to broaden the tax base, the Federal Board of Revenue (FBR), in collaboration with the National Database and Registration Authority (NADRA), has identified approximately 4.9 million wealthy individuals to be incorporated into the tax net. This joint initiative reflects the governmentâ€™s firm commitment to addressing tax evasion and ensuring fiscal equity. Advisor to the Finance Minister, Khurram Shahzad, revealed that this collaboration marks a significant step toward tackling non-filers and under-filers. Speaking in an interview, Shahzad emphasized that the FBR, leveraging NADRAâ€™s vast database, has developed a comprehensive report to tighten laws against tax evasion and steer the economy toward greater stability and transparency. Shahzad announced that the government has adopted a zero-tolerance policy on tax evasion, signaling an era of strict enforcement. Those who fail to comply with tax regulations will face severe restrictions, including being barred from purchasing vehicles and properties, limited access to financial services such as mutual fund investments, and challenges in bank account management. These measures are designed to pressure non-filers into fulfilling their legal tax obligations. The advisor also disclosed plans to introduce a state-of-the-art digital platform to tackle under-filing. This advanced system will employ sophisticated algorithms to detect discrepancies between declared assets and their actual values, minimizing human intervention and ensuring greater accuracy and transparency in tax reporting. The initiative aims to ensure that affluent individuals who have thus far avoided taxation contribute their fair share, thereby alleviating the financial burden on low-income segments. Shahzad highlighted the FBRâ€™s upgraded data analytics capabilities, which estimate a staggering tax gap of Rs 7.1 trillion. Closing this gap is a top priority for the government as it seeks to enhance revenue streams and reduce dependency on external borrowing. Responding to concerns, Shahzad reaffirmed the governmentâ€™s commitment to resolving outstanding issues with traders through mutual dialogue, fostering a cooperative relationship with the business community. The governmentâ€™s renewed focus on fiscal discipline and tax compliance, coupled with this joint effort by FBR and NADRA, aims to strengthen Pakistanâ€™s revenue base, foster economic growth, and ensure sustainable development. This strategic move underscores the governmentâ€™s dedication to equitable taxation and long-term financial stability.

Date: 2024-12-27

Details: Karachi, December 27, 2024 â€“ Financial analysts assert that the recently approved tax bill is unlikely to exert any substantial influence on the stock market, primarily due to the minimal involvement of non-filers in trading activities. Experts at Chase Securities Limited observed that the Senate ratified the new legislation a day earlier, instituting stringent restrictions on non-filersâ€™ ability to purchase high-value assets such as real estate, automobiles, and shares exceeding specified thresholds. â€œGiven the negligible participation of non-filers in the equity market, the implications for market performance are limited. However, this legislative measure underscores a significant stride toward fostering a more equitable taxation regime,â€ the analysts remarked. Non-tax-paid income has traditionally been funneled into relatively unregulated sectors like real estate. By barring non-filers from acquiring premium real estate, the government aims to promote economic documentation and tax compliance. Over time, this policy could positively affect the stock market by enlarging the pool of eligible investors who participate through formal and tax-compliant channels. Market Outlook Amid Year-End Consolidation Meanwhile, the stock market is undergoing a consolidation phase, with year-end profit-taking being a predominant theme. With only three trading sessions remaining before 2024 draws to a close, this period of recalibration is viewed as constructive, enabling investors to reassess their strategies and adjust portfolios accordingly. Despite the profit-booking trend, the equity market continues to offer compelling valuations. Analysts highlighted that alternative investment avenues, such as real estate, bank deposits, and fixed-income instruments, currently yield lackluster returns. In contrast, certain stocks in the market continue to deliver double-digit dividend yields, making them an attractive proposition for value-focused investors. Market participants are encouraged to leverage the prevailing consolidation phase to identify undervalued stocks and position themselves strategically for long-term growth. With the upcoming fiscal adjustments and anticipated improvements in economic transparency, the equity market is poised to benefit from enhanced investor confidence and broader participation. A Positive Signal for Economic Reform The introduction of this tax bill sends a clear message about the governmentâ€™s commitment to addressing systemic inefficiencies and strengthening tax compliance. Analysts believe that this is not only a step toward economic formalization but also a move that lays the groundwork for sustainable growth across various sectors, including equities. Investors are advised to stay vigilant, capitalize on the present opportunities, and prepare for a market landscape that could see gradual yet meaningful structural transformation in the coming years.

Date: 2024-12-27

Details: Islamabad, December 27, 2024 â€“ The Finance Ministry on Friday disclosed a significant shortfall in revenue collection by the Federal Board of Revenue (FBR) up to November 2024. This revelation came as part of the monthly economic outlook for December 2024. According to the report, the Finance Ministry stated that the FBR collected Rs 852 billion in November 2024, reflecting a 15.8% increase compared to Rs 736 billion collected in the same month last year. Despite, reportedly, this growth, the FBR fell short of its revenue collection target of Rs 1 trillion set for November 2024. Over the first five months of the fiscal year 2024-25 (July to November), the Finance Ministry reported that the FBR collected Rs 4.295 trillion. This represents a 23.2% increase from Rs 3.485 trillion collected during the corresponding period of the previous fiscal year. However, reportedly, the FBR still missed the revenue collection target of Rs 4.64 trillion set for this period. For the current fiscal year, the FBR has been tasked with achieving a tax collection target of Rs 12.913 trillion, which is a 38.9% increase over the Rs 9.311 trillion collected in the previous fiscal year. Despite the shortfall, the Finance Ministry remains optimistic about meeting these ambitious targets. The Finance Ministry emphasized the governmentâ€™s efforts to sustain economic recovery. Achieving agricultural production targets is a key priority, with support being extended to farmers to meet desired crop yields. However, challenges such as below-normal rainfall may cause water stress, particularly during critical stages for Rabi crops like wheat and barley in rain-fed zones. On the industrial front, the Finance Ministry highlighted the robust performance of key sectors that are driving large-scale manufacturing (LSM). Notably, the automobile and cement industries demonstrated strong growth in November, providing a significant boost to their allied sectors. The interconnectedness of industrial activities is expected to reinforce overall economic resilience. Additionally, the easing of monetary policy in December is anticipated to stimulate economic activity further. Increased private-sector credit demand signals growing confidence in the economy, which could lead to higher production levels and enhanced output. The Finance Ministry also noted stability in external accounts, supported by remittance inflows, export growth, and stable imports. Exchange rate stability and contained inflation, projected at 4.0-5.0% for December 2024, are expected to complement these improvements. Furthermore, prudent fiscal management and higher revenues during July-October have created fiscal space for development spending, laying the groundwork for sustainable economic growth.

Date: 2024-12-26

Details: Karachi, December 26, 2024 â€“ The Federal Board of Revenue (FBR) has issued a detailed explanation regarding the joint and several liability of registered persons within the supply chain when taxes remain unpaid. This clarification is provided under Section 8A of the Sales Tax Act, 1990. According to Section 8A, a registered person who receives a taxable supply from another registered person is considered jointly and severally liable for the unpaid tax in certain circumstances. Specifically, if the recipient of the supply knows or has reasonable grounds to suspect that some or all of the tax due on the supplied goods, or any previous or subsequent supply, will remain unpaid, both the recipient and the supplier are responsible for settling the unpaid tax. The burden of proof in these cases lies with the FBR, which must demonstrate that the unpaid tax is indeed owed. The FBR further clarified that the joint and several liability applies not only to the immediate supplier and recipient but extends across the entire supply chain, potentially involving multiple parties. This provision ensures that the tax authorities can pursue any party in the supply chain when taxes remain unpaid, promoting greater accountability and compliance. Additionally, the FBR retains the power to issue exemptions to specific transactions or classes of transactions under this provision. Through an official notification in the gazette, the FBR can exempt certain supplies from the joint and several liability rules outlined in Section 8A, offering some flexibility to businesses under specific conditions. This clarification by the FBR is expected to provide better transparency and understanding for businesses operating within the supply chain, ensuring that all parties are aware of their responsibilities in relation to unpaid taxes. The FBRâ€™s emphasis on accountability aims to reduce tax evasion and improve compliance across the board. In conclusion, the FBRâ€™s explanation on joint and several liability underscores the importance of vigilance within the supply chain and highlights the shared responsibility of registered persons for ensuring the full payment of taxes due.

Date: 2024-12-26

Details: FBR ALLOWS REFUNDS OF INPUT TAX UNDER SALES TAX ACT Date: 2024-12-26 Details: Karachi, December 26, 2024 â€â€œ The Federal Board of Revenue (FBR) has authorized refunds of input tax under Section 10 of the Sales Tax Act, 1990, bringing relief to registered persons who face an excess of input tax over output tax during a tax period. This provision, as clarified by the FBR, aims to streamline the refund process and ensure smoother tax compliance for businesses. According to Section 10 of the Sales Tax Act, if the input tax paid by a registered person on taxable purchases exceeds the output tax on zero-rated local supplies or exports during a specific tax period, the registered person is entitled to a refund of the excess input tax. The FBR mandates that the refund must be processed within forty-five days from the submission of the refund claim. However, the refund procedure is subject to specific conditions that the FBR may prescribe through an official notification in the Gazette. In cases where the input tax exceeds the output tax for supplies other than zero-rated or exports, the excess input tax may not be refunded immediately. Instead, the registered person can carry forward the excess input tax to the next tax period. This carried-forward input tax will be treated as input tax for the following period, alongside any input tax that remains unadjusted as per Section 8B. The FBR may also set out procedures for claiming refunds of such excess input tax through notifications. Additionally, the FBR has the discretion to direct that refunds of input tax related to exports will be paid at fixed rates and according to specified methods, as determined in an official notification. This ensures clarity for exporters regarding how to process input tax refunds for export transactions. However, the FBR also stipulates certain conditions that can affect the refund process. For instance, if a registered person has outstanding tax liabilities, including default surcharges or penalties, these amounts will be deducted from any input tax refund. The refund of input tax will only be made after the adjustment of such liabilities, ensuring that the registered person settles any unpaid dues. To safeguard against fraudulent claims, the FBR has outlined a strict procedure for investigating refunds of input tax. If there is reason to believe that a person has claimed input tax credit or a refund that was not admissible, the FBR is required to complete the inquiry, audit, or investigation within sixty days. In complex cases, this period may be extended up to one hundred and twenty days by an officer not below the rank of Additional Commissioner Inland Revenue. Furthermore, the FBR may extend this period for up to nine months in exceptional cases, provided that the extension is justified in writing. Through these measures, the FBR aims to create a transparent and efficient process for the refund of input tax, ensuring that businesses receive their due refunds while maintaining compliance with the law.

Date: 2024-12-26

Details: Citizens involved in property transactions outside the banking system are now facing a tax penalty, according to tax experts. This development follows heightened taxation measures on buying and selling immovable properties and an increase in property valuation rates by the Federal Board of Revenue (FBR). The issue stems from penalties imposed under the Income Tax Ordinance, 2001, on property purchases conducted through non-banking transactions. These penalties are being levied as part of an effort to enforce financial transparency and curb undocumented transactions in the real estate sector. According to Section 75A of the Income Tax Ordinance, 2001, read with entry no. 21 of Chapter X, a five percent penalty applies to property purchases made outside the banking system if the fair market value of the property exceeds five million rupees. Similarly, for other assets exceeding one million rupees in value, the penalty is also applicable. These measures aim to promote banking transactions and ensure proper documentation in financial dealings. The Board of Revenue of Punjab recently issued a directive to the Registrar Cooperative Societies, Punjab, the Director General of the Punjab Land Records Authority, and district registrars and deputy commissioners across the province. The directive mandates the recovery of penalties from sub-registrars, assistant directors of land records, and transferring officers who serve as withholding agents in property transactions. During a pre-Public Accounts Committee (PAC) meeting chaired by the Senior Member of the Board of Revenue, Punjab, concerns were raised regarding the non-compliance of withholding agents in collecting these penalties. The authorities expressed dissatisfaction over the lack of progress and instructed field formations to ensure strict compliance with the law. A subsequent circular from the Board of Revenue of Punjab emphasized that sub-registrars, assistant directors of land records, and transferring/attesting officers must enforce the penalty. Failure to do so will result in accountability for the concerned officers. The imposition of these penalties has sparked debate among property buyers and sellers, many of whom feel burdened by increasing costs and stringent regulations. Tax experts, however, argue that these measures are essential to bring undocumented transactions into the formal economy and enhance government revenue.

Date: 2024-12-26

Details: In a startling revelation, it was learnt that the top 5% earners in Pakistan have not paid taxes to the tune of Rs1.6 trillion. The figures were shared by Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial while addressing a press conference on Thursday alongside Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb and Minister of State for Finance and Revenue Ali Pervaiz Malik. Addressing the attendees, the FBR chief said the governmentâ€™s tax gap for the current fiscal year would be Rs7.1 trillion, which was around Rs6.2 trillion last year. He said the governmentâ€™s major interventions are focused on top 5% of earners. Langrial shared that around 3.3 million individuals fall under the top 5% of the earning category. Out of these, only 0.6 million file returns while the remaining 2.7 million do not file income tax returns. â€œThey are either filing below this category or are not filing at all. Their tax liability stands over Rs1.6 trillion,â€ revealed Langrial. The FBR chairman stated that even if the government adds all categories below the top 5% of earners, the total unpaid tax liability is not over Rs140 billion. Meanwhile, Aurangzeb said reforms in taxation are a vital part of the governmentâ€™s structural reform agenda. He said that the Tax amendment bill introduced recently in the parliament aims to bring effective compliance in the tax regime. Talking about the digitization efforts of the government, the finance minister informed that in September, Prime Minister Shehbaz Sharif approved the design phase for digitization â€œand after that, in the last three to four months, we have now entered the execution phaseâ€. He said that the government is focused on modernising the internal systems of FBR. â€œWe are not only focused on increasing revenue, we also intend to improve the economy, ease of doing business to make this a win-win for the country,â€ he said. Aurangzeb said the government intends to increase the tax-to-GDP ratio to at least 13%. â€œBecause thatâ€™s where our fiscal situation would become at least sustainable.â€ Responding to a query, Aurangzeb acknowledged that â€œcompared to the tax revenue target, we are behindâ€. â€œWe are making every possible effort to get to the target. When the International Monetary Fund (IMF) mission visits, we will have a discussion with them in good faith,â€ he said. He shared the inflation rate has become a key agenda item of the Economic Coordination Committee (ECC), and will be monitored regularly. Minister of State for Finance and Revenue Ali Pervaiz Malik said the government intends to enhance its tax revenue sources to a reasonable extent. The state minister shared that till October 2024, around 5 million individuals filed their tax returns, which was around 3 million last year. The minister said the government after analysing consumption data identified around 190,000 individuals â€œwho should have been included in the taxation net were non-filersâ€. â€œSafely assuming these individuals were liable to pay Rs50-60 billion in direct taxes,â€ he said. Addressing a query, Langrial said the GST rate may be reduced to 10-12% in the coming years. Meanwhile, in a separate query, Information Minister Attaullah Tarar brushed off concerns regarding voices raised by international agencies against the recent conviction of 25 civilians by a military court for their alleged involvement in the May 9 riots last year. â€œWe remain fully compliant with all requirements of international forums. There are no compliance issues,â€ he maintained. Earlier, the European Union (EU) strongly reacted to the recent conviction saying that â€œthese verdicts are seen as inconsistent with the obligations that Pakistan has undertaken under the International Covenant on Civil and Political Rights (ICCPR).â€

Date: 2024-12-26

Details: Islamabad, December 26, 2024 â€“ The Federal Board of Revenue (FBR) has dismissed Muhammad Ali Ijaz Malik, an Inspector of Pakistan Customs (BS-16), for misconduct following an extensive inquiry under the Civil Servants (Efficiency & Discipline) Rules, 2020. This decision comes as part of FBRâ€™s commitment to uphold integrity and discipline within its ranks. The disciplinary proceedings against Mr. Malik, formerly stationed at the Collectorate of Customs (Enforcement) in Lahore, were initiated due to his unauthorized absence from duty. He was placed under suspension on June 14, 2024, and served with a charge sheet and statement of allegations a day earlier. The charges fell under Rule 2(1)(k) and Rule-3(b) of the Efficiency & Discipline Rules. Ms. Aneeqa Afzal (PCS/BS-19) was appointed as the Inquiry Officer to investigate the matter. After a thorough review, she submitted her findings on September 10, 2024, substantiating the charge of misconduct and recommending the major penalty of removal from service. Subsequently, a Show Cause Notice was issued to Mr. Malik on October 1, 2024. In his reply dated October 26, 2024, Mr. Malik denied the allegations and requested a personal hearing via Zoom, which was granted on December 12, 2024. During the hearing, both Mr. Malik and the Departmental Representative, Ms. Saima Ayyaz, Additional Collector of Customs Enforcement, Lahore, presented their arguments. However, Mr. Malik failed to provide substantial evidence to refute the charges. The Member (Admn/HR), FBR, acting as the competent authority under Rule-2(c) of the Civil Servants (Efficiency & Discipline) Rules, concluded that Mr. Malikâ€™s defense was inadequate and upheld the findings of the inquiry. Consequently, the authority imposed the major penalty of removal from service under Rule-4(3)(d). Mr. Malik retains the right to appeal this decision within 30 days to the designated appellate authority, as per the Civil Servants (Appeals) Rules, 1977. This action underscores FBRâ€™s zero-tolerance policy toward misconduct and its resolve to maintain accountability within its workforce. By enforcing stringent disciplinary measures, the FBR aims to ensure that public servants adhere to the highest standards of professionalism and responsibility in their roles.

Date: 2024-12-26

Details: Karachi, December 26, 2024 â€“ The Federal Board of Revenue (FBR) has announced the implementation of a new point-scoring mechanism for customs agents, aimed at enhancing efficiency and accountability in the consignment declaration process. The initiative was formalized through SRO 2071(I)/2024, issued on December 24, 2024. Under the new system, customs agents will be subject to a point-based evaluation tied to their performance in accurately declaring consignments. Points will be deducted for violations such as misdeclaration, false statements, and errors in description, classification, valuation, origin, or unit of measurement. The FBR stated that a reduction in aggregate points to zero would result in the automatic blocking of the agentâ€™s license and initiate proceedings for revocation or cancellation. â€œA license shall be blocked and proceedings for revocation or cancellation shall be initiated in cases where aggregate points are reduced to zero or when an agent fails to file any goods declaration within the past year and does not appear for identification and confirmation before the licensing authority,â€ the FBR outlined. The computerized customs system will monitor agentsâ€™ adherence to regulations and apply penalties through automatic point deductions. Agents begin with an aggregate of 50 points, which are gradually reduced based on violations. Restoration of blocked licenses will require adherence to specific protocols as per the new regulations. In addition to the point-scoring mechanism, the FBR has introduced a qualification test for granting customs agent licenses. The examination will assess candidatesâ€™ knowledge of customs laws, allied regulations, rules and procedures, as well as their proficiency in using the computerized customs system. The test will be conducted by an accredited institution specified in advertisements published in leading national newspapers. Provisional license holders are required to appear in the first examination conducted under these rules. Failure to do so will result in the cancellation of their provisional licenses. Candidates will have a maximum of three attempts to pass, with the final opportunity provided after two consecutive failures. To qualify, applicants must secure a minimum of 50% marks in the written examination. The FBRâ€™s measures aim to strengthen compliance and professionalism within the customs clearance process, ensuring greater accuracy and integrity in consignment declarations while aligning Pakistanâ€™s customs practices with global standards.

Date: 2024-12-26

Details: Karachi, December 26, 2024 â€“ The Pakistan Tax Bar Association (PTBA), the premier tax advisory body in the country, has strongly recommended that the Federal Board of Revenue (FBR) adopt Two-Factor Authentication (2FA) for securing taxpayer accounts on the IRIS portal. In a letter to FBR Chairman Rashid Mahmood Langrial, PTBA President Anwar Kashif Mumtaz underscored the urgent need for enhanced security measures. He noted the current systemâ€™s requirement for taxpayers to update their IRIS passwords every 60 days, a practice fraught with inconvenience and vulnerability to cyber threats. Mumtaz expressed concern over the misuse of the IRIS portal by malicious actors, who exploit security gaps to submit falsified documents. Such fraudulent activities not only result in significant revenue losses but also tarnish the portalâ€™s credibility. The PTBA acknowledged FBRâ€™s ongoing efforts to digitize its operations, emphasizing the potential benefits of such initiatives. However, it also highlighted the challenges posed by low literacy levels and limited internet access, particularly in rural regions and on the outskirts of major cities. The association warned that the bi-monthly password update requirement could exacerbate these challenges, increasing the cost of doing business and deterring compliance. To mitigate risks and align with international best practices, the PTBA proposed the adoption of 2FA or Multi-Factor Authentication (MFA). Both mechanisms enhance security by requiring additional layers of verification before granting access. The association noted that 2FA is widely regarded as a user-friendly and effective method. â€œUnder the 2FA system, users first enter their passwords and then provide a One-Time Password (OTP) sent to their mobile devices or generated by an authenticator app,â€ the PTBA explained. â€œThis ensures robust protection against unauthorized access, even if the primary password is compromised.â€ The PTBA stressed the necessity of implementing such measures to safeguard taxpayer data and bolster trust in the digital platform. â€œIncorporating 2FA will align the IRIS portal with global standards, enhancing both security and user experience,â€ the association stated. In conclusion, the PTBA urged the FBR to prioritize this matter and swiftly integrate modern authentication protocols into the IRIS portal, enabling Pakistanâ€™s digitalization efforts to meet the benchmarks of advanced economies.

Date: 2024-12-26

Details: Citizens involved in property transactions outside the banking system are now facing a tax penalty, according to tax experts. This development follows heightened taxation measures on buying and selling immovable properties and an increase in property valuation rates by the Federal Board of Revenue (FBR). The issue stems from penalties imposed under the Income Tax Ordinance, 2001, on property purchases conducted through non-banking transactions. These penalties are being levied as part of an effort to enforce financial transparency and curb undocumented transactions in the real estate sector. According to Section 75A of the Income Tax Ordinance, 2001, read with entry no. 21 of Chapter X, a five percent penalty applies to property purchases made outside the banking system if the fair market value of the property exceeds five million rupees. Similarly, for other assets exceeding one million rupees in value, the penalty is also applicable. These measures aim to promote banking transactions and ensure proper documentation in financial dealings. The Board of Revenue of Punjab recently issued a directive to the Registrar Cooperative Societies, Punjab, the Director General of the Punjab Land Records Authority, and district registrars and deputy commissioners across the province. The directive mandates the recovery of penalties from sub-registrars, assistant directors of land records, and transferring officers who serve as withholding agents in property transactions. During a pre-Public Accounts Committee (PAC) meeting chaired by the Senior Member of the Board of Revenue, Punjab, concerns were raised regarding the non-compliance of withholding agents in collecting these penalties. The authorities expressed dissatisfaction over the lack of progress and instructed field formations to ensure strict compliance with the law. A subsequent circular from the Board of Revenue of Punjab emphasized that sub-registrars, assistant directors of land records, and transferring/attesting officers must enforce the penalty. Failure to do so will result in accountability for the concerned officers. The imposition of these penalties has sparked debate among property buyers and sellers, many of whom feel burdened by increasing costs and stringent regulations. Tax experts, however, argue that these measures are essential to bring undocumented transactions into the formal economy and enhance government revenue.

Date: 2024-12-25

Details: Karachi, December 25, 2024 â€“ The Federal Board of Revenue (FBR) has taken an unprecedented step by deciding to keep its collection windows open on the last Saturday and Sunday of December 2024. This initiative is aimed at maximizing tax collection for the second quarter of the fiscal year ending December 31, 2024. The FBR has issued clear directives to the Chief Commissioners of its field formations, including the Large Taxpayers Offices (LTOs), Medium Taxpayers Office (MTO), Corporate Tax Offices (CTOs), and Regional Tax Offices (RTOs). These offices have been instructed to ensure that their teams remain operational and observe regular working hours on Saturday, December 28, 2024, and Sunday, December 29, 2024. According to the FBR, this decision is a proactive enforcement measure designed to facilitate the achievement of revenue collection targets for the second quarter of FY2024-25. The organization has stressed the importance of taking every possible step to ensure taxpayers are supported and motivated to meet their tax obligations within the stipulated timeline. Sources within the FBR revealed that the authority is grappling with a significant shortfall in revenue collection for the current fiscal year. This shortfall has prompted the revenue body to implement aggressive strategies to optimize tax inflows before the end of the quarter. By keeping its collection offices operational over the weekend, the FBR aims to provide taxpayers with additional opportunities to fulfill their tax obligations, thereby contributing to a stronger fiscal performance for the government. This move also reflects the FBRâ€™s commitment to achieving its broader revenue goals for FY2024-25. The FBRâ€™s decision underscores its determination to adopt innovative solutions to address revenue collection challenges. By focusing on extended operational hours and proactive enforcement, the FBR is ensuring that both taxpayers and tax offices have the necessary support to meet critical deadlines. This measure is part of a series of steps the FBR has introduced to streamline its operations and bolster compliance, ultimately strengthening Pakistanâ€™s tax collection framework.

Date: 2024-12-25

Details: December 25, 2024 Karachi, December 25, 2024 â€“ The Federal Board of Revenue (FBR) has recorded an impressive 135% increase in the collection of capital gains tax (CGT) during the first five months of the fiscal year 2024-25 (5MFY25). This substantial growth underscores the FBRâ€™s effective enforcement measures and improved tax compliance mechanisms. According to FBR sources, CGT revenue surged to Rs 12.14 billion, a significant rise from the Rs 5.16 billion collected during the same period of the previous fiscal year. This remarkable performance reflects the governmentâ€™s strategic efforts to enhance tax collection and broaden the revenue base. The CGT is levied under Section 37A of the Income Tax Ordinance, 2001, which governs the taxation of capital gains arising from the disposal of securities. The FBR applies this provision to a wide range of financial instruments, including public company shares, Modaraba certificates, corporate and government debt securities, exchange-traded funds, and derivative products. Key Features of Section 37A Section 37A outlines the key rules for computing and taxing capital gains: 1. Applicability and Tax Rates o The FBR taxes capital gains on the disposal of securities, except for transactions explicitly exempt under the Income Tax Ordinance. o Exemptions include certain listed shares disposed of outside registered stock exchanges or IPO shares not reported to the National Clearing Company of Pakistan Limited (NCCPL). 2. Calculation Formula o The formula for computing capital gains is the difference between the consideration received (A) and the cost of acquisition (B). 3. Holding Period o The holding period is determined by the interval between the acquisition and disposal dates. 4. Loss Offset Rules o Losses from securities disposal can only be offset against gains from other securities during the same tax year. Unused losses may be carried forward for up to three years. 5. Defined Securities o Instruments classified as securities include shares, Sukuk, Treasury Bills, Pakistan Investment Bonds, and derivative products traded on platforms like the Pakistan Mercantile Exchange. Implications of FBRâ€™s Performance The 135% growth in CGT collection highlights robust market activity and the FBRâ€™s success in fostering a transparent tax environment. By improving regulatory frameworks and enforcing compliance, the FBR has taken a significant step toward achieving its fiscal objectives. This enhanced performance not only bolsters Pakistanâ€™s financial stability but also underscores the FBRâ€™s pivotal role in strengthening investor confidence and optimizing revenue generation.

Date: 2024-12-25

Details: Karachi, December 24, 2024 â€“ Tax bars across Pakistan have strongly criticized the recently introduced password expiry policy by the Federal Board of Revenue (FBR), urging its immediate revocation. The policy, which mandates password changes every 60 days for users accessing the IRIS tax portal, has been denounced as an unnecessary complication for taxpayers and practitioners alike. Under the FBRâ€™s policy, users are required to reset their passwords using the â€˜Forgot Passwordâ€™ or â€˜Change Passwordâ€™ options once their credentials expire. However, leading tax bars argue that this measure creates undue inconvenience without delivering substantial benefits. The Lahore Tax Bar Association (LTBA), in a letter addressed to the FBR, highlighted the impracticality of this policy. â€œIncome tax returns are filed annually, making a 60-day password expiration cycle redundant,â€ stated the LTBA. It further criticized the policy for imposing undue hardship on taxpayers and practitioners, diminishing user convenience, and offering no tangible improvements to system security. The LTBA urged the FBR to reconsider this policy to ensure a smoother and more user-friendly experience for all stakeholders. Similarly, the Sialkot Tax Bar Association expressed its concerns in a formal communication to the FBR chairman. While acknowledging the intention to enhance cybersecurity, the association noted the absence of a transparent rationale or detailed guidelines for implementing the policy. â€œThe policy, as it stands, undermines taxpayer confidentiality and the fundamental right to privacy,â€ it emphasized. The Sialkot Tax Bar also highlighted the disproportionate burden placed on non-resident taxpayers, who often face greater challenges in complying with frequent password resets. The Multan Tax Bar Association raised additional objections, citing the low levels of digital literacy among a significant portion of Pakistanâ€™s taxpayers. â€œMany taxpayers lack the technical knowledge to reset passwords, compounded by unreliable internet connectivity in various regions,â€ it stated. The association also pointed out the operational difficulties stemming from system downtimes and failures in receiving one-time passwords (OTPs) via email or SMS. Such issues, it argued, make compliance with the 60-day password reset requirement virtually unfeasible for a large segment of taxpayers. Moreover, the Multan Tax Bar noted that the password reset process is often cumbersome and time-intensive, detracting from the efficiency of tax filing. â€œThis policy exacerbates the challenges faced by already compliant taxpayers and erodes trust in the digital tax system,â€ it asserted. In unison, tax bars across the country have urged the FBR to reconsider the policy, arguing that a more balanced approach is neededâ€”one that ensures system security without imposing undue burdens on taxpayers.

Date: 2024-12-25

Details: Islamabad: Finance Minister Muhammad Aurangzeb has highlighted a growing sentiment among citizens, who are willing to pay higher taxes but are reluctant to interact with tax authorities. Speaking during a review of the Tax Laws (Amendment) Bill, 2024 a day earlier, at the Senate Standing Committee on Finance held at the Parliament House on Tuesday, the finance minister emphasized the pressing need to restore credibility and trust in tax authorities. â€œMany people approach us, expressing their willingness to contribute more to the national treasury. However, they prefer not to deal directly with the tax authority. Restoring this trust must begin with the Federal Board of Revenue (FBR). Itâ€™s not sustainable for citizens to avoid interacting with their countryâ€™s tax system,â€ Aurangzeb remarked. The session was chaired by Senator Saleem Mandviwalla and attended by PTI Senators Mohsin Aziz and Shibli Faraz. The committee deliberated on sales tax provisions within the proposed bill, with further discussions scheduled for the next meeting. Under the FBRâ€™s transformation plan, Aurangzeb explained that top priority is being given to rebuilding confidence in the tax system. Technology will play a pivotal role in this transformation, aiming to curb corruption and harassment while broadening the tax base. The minister noted that the Tax Laws (Amendment) Bill, 2024, seeks to address revenue leakage and under-filing. â€œThe salaried class bears a heavy tax burden, including super tax and CVT on income,â€ the minister acknowledged. He stressed the importance of rationalizing the tax structure by targeting segments of society that currently evade taxes. â€œThe bill introduces mechanisms to ensure compliance and expand the tax net,â€ he added. Aurangzeb also mentioned ongoing efforts to downsize federal ministries, with updates expected by January 2025. This rightsizing initiative aims to optimize government operations and reduce expenses. To enhance tax policy formulation, the finance minister announced plans to establish a Tax Policy Unit separate from the FBR. This unit, expected to launch within six months, will analyze the economic impact of tax policies. FBR Chairman Rashid Mahmood Langrial clarified that tax officialsâ€™ primary role remains tax collection, while the new unit will handle policy analysis. Langrial assured the committee that the amendment bill would not introduce new taxes but would address non-filing and under-filing issues. He emphasized that 95% of households would remain unaffected by the proposed changes. Aurangzeb expressed confidence that the reforms could raise Pakistanâ€™s tax-to-GDP ratio from the current 10.3% to 13% within five years, noting that neighboring countries boast ratios as high as 18%. He stressed the importance of ensuring contributions from traditionally non-compliant sectors to avoid further burdening taxpayers like the manufacturing sector and salaried class. â€œIf we fail to tax non-compliant sectors, how will we manage future budgets? Should we continue increasing the burden on already overtaxed groups?â€ Aurangzeb questioned, underscoring the necessity of broad-based tax reforms to ensure economic sustainability.

Date: 2024-12-24

Details: Karachi, December 23, 2024 â€“ The Federal Board of Revenue (FBR) has unveiled a dedicated welfare cell at field office levels nationwide, aiming to provide comprehensive support to the families of Inland Revenue Service (IRS) and Pakistan Customs Service (PCS) officers who have passed away during active service. The FBR emphasized that this initiative seeks to address the pressing challenges and grievances faced by the families of deceased officers. By establishing the Welfare Cell within FBR formations across the country, the organization aims to streamline the delivery of entitlements and services to these bereaved families. Objective: The welfare cellâ€™s primary objective is to ensure efficient service delivery, prompt assistance, and an enhanced quality of life for the affected families. Purpose and Scope: The Welfare Cellâ€™s responsibilities are expansive, encompassing: 1. Facilitating access to pensions, healthcare, education, and other entitlements owed to the families of deceased officers. 2. Supporting families in navigating issues with government departments and service providers. 3. Assisting them in claiming their rightful benefits. 4. Addressing grievances and resolving issues faced by these families with speed and efficiency. 5. Recommending policy improvements to enhance the welfare mechanisms for the families of deceased officers. To ensure swift resolution of issues, the FBR has designated focal persons at every field station across Pakistan. Families encountering difficulties are encouraged to report their grievances to these focal points. Unresolved matters will be escalated to the Chief (Admin & Finance) at FBR Headquarters in Islamabad for further action. Quarterly Reporting and Database Management: The focal persons are mandated to maintain a detailed database of deceased officers, documenting information such as names, addresses, designations, dates of death, and the current status of their families. These records will be updated regularly and submitted to the FBRâ€™s Chief (Admin & Finance) on a quarterly basis, ensuring transparency and accountability. Furthermore, the focal persons are required to provide quarterly reports by the 10th of April, July, October, and January each year, detailing the status of grievances resolved and any pending matters. This welfare initiative underscores the FBRâ€™s commitment to honoring its officersâ€™ service and ensuring their families receive the support they deserve, thereby fostering a culture of care and responsibility within the organization.

Date: 2024-12-23

Details: Karachi, December 23, 2024 â€“ The Federal Board of Revenue (FBR) has reported an impressive 95% increase in tax collection from dividend payouts during the first five months of the current fiscal year 2024-25. This significant surge reflects the FBRâ€™s enhanced efficiency and the impact of recent tax policy changes. According to data shared by the Large Taxpayers Office (LTO) Karachi, tax revenue under the category of dividend payouts surged to Rs 28 billion between July and November 2024, compared to Rs 14.25 billion collected during the same period last year. FBR officials have attributed this remarkable growth to the amendments introduced through the Finance Act, 2024, which revised tax rates on dividends across various sectors. The updated rates under Section 150 of the Income Tax Ordinance are as follows: â€¢ 7.5% for dividends paid by Independent Power Producers (IPPs) where the payment is a pass-through item under agreements with the Central Power Purchasing Agency (CPPA-G). â€¢ 15% for mutual funds, Real Estate Investment Trusts (REITs), and other entities, except for specific exceptions. Notably, dividends from mutual funds deriving over 50% of income from profit on debt are taxed at a higher rate of 25%. â€¢ 0% for dividends received by a REIT scheme from a Special Purpose Vehicle (SPV). However, other entities receiving dividends from SPVs are taxed at 35%. â€¢ 25% for dividends received from companies where no tax is payable due to exemptions, carried-forward losses, or tax credits. The FBR emphasized that these changes are part of its broader strategy to strengthen revenue generation and promote compliance. By implementing differentiated tax rates, the FBR aims to align the tax regime with economic realities and encourage equitable tax contributions. This growth in tax collection is a testament to the FBRâ€™s efforts to enhance transparency and efficiency in tax administration. Officials believe the upward trend will continue as the agency refines its processes and enforces tax policies more effectively. The FBRâ€™s achievement underscores its critical role in Pakistanâ€™s economic framework, with rising collections helping to address fiscal challenges and support developmental initiatives. The revenue boost from dividends is expected to contribute significantly to the countryâ€™s overall tax base.

Date: 2024-12-23

Details: Karachi, December 23, 2024 â€“ The Federal Board of Revenue (FBR) on Monday announced that the Active Taxpayers List (ATL) has grown significantly, reaching 5.83 million for the tax year 2024. The FBR stated that this milestone reflects the number of income tax returns filed by December 22, 2024. This increase represents an addition of approximately 490,000 new taxpayers since the ATLâ€™s launch on November 1, 2024, signaling notable progress in tax compliance across the country. FBR officials predict further growth in the number of return filers following the passage of the Tax Laws (Amendments) Bill, 2024, by the National Assembly. This legislation introduces stringent measures for non-filers, including restrictions on purchasing immovable properties and motor vehicles, as well as bans on operating bank accounts and withdrawing cash. The updated ATL operates under a new framework established through amendments in SRO 1638(I)/2024. Unlike previous years when the ATL was issued annually in March, the new procedures ensure the list is updated immediately after the tax filing deadline. Furthermore, the ATL is now refreshed daily, enabling real-time inclusion for taxpayers who submit their income tax returns (ITRs). â€œThis dynamic system reflects FBRâ€™s dedication to enhancing transparency and efficiency in tax administration,â€ said an FBR representative. â€œTaxpayers who file on time or within approved extensions are promptly added to the ATL. Those filing late can regain active status by paying a prescribed surcharge under Section 182A of the Income Tax Ordinance.â€ To bolster compliance, the FBR has introduced strict penalties for non-filers, including potential disconnection of mobile SIM cards, suspension of utility services, and restrictions on foreign travel. These measures aim to cultivate a culture of timely tax submission and discourage tax evasion. Exemptions from these measures apply to specific groups, such as holders of National Identity Cards for Overseas Pakistanis (NICOP), minors, students, and individuals traveling abroad for religious purposes like Hajj or Umrah. The revamped ATL system represents a significant advancement in modernizing Pakistanâ€™s tax ecosystem. By ensuring timely recognition for compliant taxpayers and implementing tough measures against defaulters, the initiative strengthens trust between taxpayers and the state. Amid economic challenges, a robust tax framework is essential for fiscal stability. The FBRâ€™s proactive measures aim to expand the taxpayer base, enhance transparency, and contribute to Pakistanâ€™s sustainable economic growth.

Date: 2024-12-23

Details: Karachi, December 23, 2024 â€“ The Federal Board of Revenue (FBR) has clarified that tax credit will not be allowed on supplies of certain goods, following the stipulations set under Section 8 of the Sales Tax Act, 1990. This new directive is part of the governmentâ€™s effort to regulate the input tax credit system and ensure that only eligible businesses benefit from tax credits. Under Section 8, which outlines the restrictions on tax credits, registered persons are prohibited from reclaiming or deducting input tax on certain goods or services. Specifically, the FBR has outlined several categories where tax credit cannot be claimed. These include goods or services used for purposes other than taxable supplies, goods for personal or non-business consumption, and those used in building or construction, such as paints, pipes, and electrical fittings. However, goods acquired for resale or direct use in the production of taxable goods are exceptions. Additionally, the tax credit will not be allowed for goods and services for which sales tax has not been deposited by the supplier in the government treasury, as well as for purchases where discrepancies are found through CREST or the supply chain input tax is unverifiable. The FBR also prohibits claims on fake invoices, and purchases from suppliers failing to provide required information through notifications. Furthermore, registered persons are restricted from claiming input tax on goods and services related to non-taxable supplies, including vehicles and their parts, office equipment (excluding electronic cash registers), and agricultural machinery subject to a 7% sales tax under the Eighth Schedule of the Act. The FBR also announced that from a specified date, input tax credits will not be allowed if the supplier has not declared the goods in his return or has failed to pay the due tax. For businesses dealing in both taxable and non-taxable supplies, only the portion of input tax attributable to taxable supplies may be claimed. This proportion must be determined according to the FBRâ€™s guidelines. Moreover, businesses dealing with unregistered distributors are restricted from claiming input tax on supplies unless the sale invoices include the recipientâ€™s NIC or NTN number, as mandated under Section 23 of the Act. In conclusion, the FBRâ€™s notification aims to tighten the regulations around tax credit claims to prevent misuse of the system and ensure compliance with tax laws. Registered businesses must be diligent in adhering to these provisions to avoid penalties or denial of input tax credit claims.

Date: 2024-12-22

Details: ISLAMABAD: Leading agriculture experts Saturday strongly recommended that there is an urgent need to engage rural youth in agricultural productive activities after imposition of Agri tax from January 2025. Taking to media at the National Press Club here on Saturday, Khan Faraz, an agro expert informed that with limited income opportunities from farming, many are at risk of drifting towards illegal or unproductive paths. Therefore, policymakers must address this growing aspiration gap as Pakistan is an agricultural country. Agriculture is the mainstay of the countryâ€™s economy. Agriculture contributes around 23 percent to the GDP and employs 33.4 percent of the countryâ€™s labour. About 70 percent of the countryâ€™s exports are directly or indirectly derived from agriculture. Khan Faraz said they low landholding has emerged as a major challenge in the rural regions of Pakistan. In 1990, the average landholding in the country was approximately five hectares (12.4 acres). Today, that figure has shrunk to around three hectares (7.4 acres). This decline is compounded by significant land inequality. While a few large landlords control the majority of the land, many smallholders now own less than one hectare. For rural populations heavily reliant on agriculture, high fertility rates and the division of family land among heirs have led to increasingly smaller farm sizes, leaving many families in economic distress as alternative income sources remain scarce. Also, inheritance practices, urbanization has contributed to the problem, with agricultural land being converted into housing and commercial developments. Land fragmentation is another persistent issue, further exacerbated over time. Small landholdings struggle to achieve economies of scale, severely affecting agricultural productivity. Farmers operating on small plots often cannot afford modern machinery or technology, making their operations less efficient compared to larger farms. The high cost of production per unit for smallholders reduces profitability and competitiveness. Also, climate change disproportionately affects smallholders compared to large landholders. In view of the above, there is an urgent need to engage rural youth, most of whom are under the age of 30, in productive activities. With limited income opportunities from farming, many are at risk of drifting towards illegal or unproductive paths. Therefore, policymakers must address this growing aspiration gap -- the disparity between what individuals hope to achieve and the opportunities available in their communities, agricultural expect added. Copyright Business Recorder, 2024

Date: 2024-12-22

Details: Karachi, December 22, 2024 â€“ Registered persons under the Sales Tax Act, 1990, have been permitted to deduct input tax from output tax on supplies made during a tax period. This provision, governed by Section 7 of the Act, aims to streamline the determination of tax liability for registered taxpayers. The Federal Board of Revenue (FBR) clarified that this allowance is part of the updated Sales Tax Act, 1990. Section 7 outlines the conditions and provisions under which input tax deduction is permissible, ensuring compliance and proper tax management. Key Provisions of Section 7: 1. Determination of Tax Liability: Sub-section (1) of Section 7 allows registered persons, subject to Sections 8 and 8B, to deduct input tax paid or payable during a tax period from the output tax. This deduction excludes further tax under Sub-section (1A) of Section 3. Adjustments specified in Section 9 are also permissible. Furthermore, if input tax is not claimed within the relevant period, registered persons may claim it in their returns for any of the six succeeding tax periods. This provision ensures flexibility in managing sales tax obligations. 2. Conditions for Input Tax Deduction: Sub-section (2) specifies that input tax can only be deducted if certain conditions are met: o The registered person holds a tax invoice bearing their registration number for taxable supplies. o For electricity or gas supplies, a bill with the registration number and installation address must be available. o For imported goods, the bill of entry or goods declaration must display the sales tax registration number. o Goods purchased in auctions require a treasury challan with the registration number showing sales tax payment. 3. Special Permissions: Sub-sections (3) and (4) allow the FBR or Federal Government, through notifications, to impose conditions, limitations, or restrictions on the deduction of input tax. These measures can be tailored to specific goods, persons, or classes of persons to ensure proper sales tax management. 4. Restrictions on Wastage: Sub-section (5) empowers the FBR to impose restrictions on wastage of materials for which input tax has been claimed. This provision aims to curb misuse and maintain sales tax accountability. The updated provisions emphasize the importance of proper documentation and adherence to sales tax regulations. By allowing input tax deductions, the Sales Tax Act provides registered persons with an efficient mechanism to manage their sales tax obligations, ensuring transparency and compliance in the taxation system.

Date: 2024-12-22

Details: Tax experts at Tola Associates and Tola & Tola have raised concerns regarding numerous amendments introduced through the Tax Laws (Amendments) Bill, 2024. They argue that several provisions within the Bill conflict with fundamental constitutional rights, rendering them problematic from a legal and practical standpoint. Among the contentious amendments is the definition of an â€œeligible personâ€ and the imposition of restrictions on taxpayers. Experts assert that these provisions may violate Articles 18 and 23 of the Constitution of Pakistan, which guarantee the freedom of trade, business, and property ownership. For instance, requiring individuals to include property in their wealth statements at a fixed cost of PKR 100 is seen as unreasonable and contrary to constitutional protections related to property rights. Another significant point of contention is the restriction on cash withdrawals beyond a threshold prescribed by the Federal Board of Revenue (FBR). This measure, experts argue, is impractical and violates Articles 18 and 23. Businesses operating in remote areas, where internet banking is inaccessible, may need to withdraw cash for essential expenses such as salaries and lodging. The inability to do so could severely hinder their operations. Legal precedent from the Supreme Court of Pakistan reinforces the principle that taxpayers have the right to manage their affairs within the bounds of the law without undue interference. Furthermore, the amendments also extend discriminatory restrictions to non-resident persons, which tax experts believe contravene Article 25 of the Constitution, ensuring equality among citizens. For example, subjecting non-residents to resource verification requirements and imposing limits on property transactions could disproportionately affect their rights and interests. Section 175AA of the Bill, which allows the FBR to access taxpayer information from banks, has also drawn criticism. Experts contend that this provision infringes on Article 14 of the Constitution, which upholds the right to privacy. The absence of a clearly defined degree of variance for discrepancies further exacerbates concerns, as even minor mismatches could lead to unwarranted data sharing. Moreover, the amendments permitting third-party auditors to access taxpayer information pose significant risks. Tax experts warn that this could result in conflicts of interest, especially if auditors represent competitors, and undermine the taxpayerâ€™s right to conduct business freely under Article 18. The proposed amendments have sparked a heated debate, with experts calling for a thorough review to align the Bill with constitutional principles. Ensuring fairness and adherence to fundamental rights remains essential for maintaining public trust in the countryâ€™s taxation system.

Date: 2024-12-21

Details: 1. Concept of an eligible person introduced [Section 114C(5)(B)] Tola Associates and Tola & Tola Published December 21, 2024 Updated about an hour ago The Bill has proposed to introduce the concept of an â€œeligible personâ€, through enacting a new Section 114C to the ITO. An eligible person has been defined in Section 114C(5)(b) as a person, who has filed a return of income for the tax year immediately preceding the year of transaction mentioned in sub-section (l) and has sufficient resources in the wealth statement in case of an individual, or financial statement in case of a company or an association of persons, as the case may be, for such transaction. Further, as per the proviso to the aforesaid sub-section, in case of an individual, the eligible person shall include his immediate family members. For e.g., if a person opts to buy an immoveable property during Tax Year 2025, he will be an eligible person if he has filed a return of income for Tax Year 2024. Ineligible person â€¢ An ineligible person has been defined under Section 114C(5)(d) as a person who is not an eligible person. Cash Equivalent Assets â€¢ The Bill has proposed to define cash equivalent assets as assets that may be prescribed. However, it is unclear as to who may prescribe said assets. Sufficient resources [Section 114C(5)(f)] â€¢ The Bill has proposed to define sufficient resources as 130% of the cash and equivalent assets, declared by a person in his wealth statement filed for the latest tax year or in the case of a company or association of persons cash and equivalent assets, declared in the financial statements attached with the income tax return for the latest tax year. Immediate family members [Section 114C(5)(c) â€¢ The Bill has proposed to define immediate family members in respect of an individual, shall include his parents, spouse, son (below the age of twenty-five years), daughter (who is unmarried, or widowed, or divorced) or a special child who has a long term physical, mental, intellectual or sensory impairment which in interaction with various barriers may hinder his full and effective participation in society on an equal basis with others. Restrictions proposed on transactions made by an ineligible person [Section 114C(1)] â€¢ Application for booking, purchase or registration of a motor vehicle shall not be accepted or processed by manufacturer of motor vehicle or vehicle registering authority of excise and tax department. â€¢ Application or request to any authority responsible for registering, recording or attesting transfer of any immovable property, more than such value in aggregate in a tax year as may be notified by the Board from time to time, shall not be accepted or processed. This means that the restriction shall not apply on purchase or sale of immoveable property unless the FBR notifies the threshold vide a SRO / Notification. â€¢ Any person, authorized to sell securities including debt securities or units of mutual funds including a person authorized to open and maintain an account or clear such transactions, shall not sell, open an account or clear sale of securities, mutual funds, to an ineligible person being an individual or an AOPs; â€¢ Banking Companies have been restricted from opening or maintaining an already opened current, savings or an investor account of those persons that have been notified by the Board. This means this restriction will become effective once the names are notified by the FBR General restriction proposed on cash withdrawals by any person â€¢ Banking Companies have been restricted from allowing cash withdrawals from the bank accounts of any person in excess of the limit prescribed by the Board. This means that this general restriction will come into effect once the threshold has been notified by the FBR. Certain transactions proposed to be carved out from the aforestated restrictions â€¢ An ineligible person can purchase rikshaws, motorcycle rickshaws or tractors; â€¢ An ineligible person can purchase a pick-up vehicle up to 800CC; â€¢ An ineligible person can purchase motor vehicles other than the above, or trucks and buses, subject to the limitations notified by the Board. This means that for vehicles other than rikshaws, motorcycle rikshaws, tractors, or a pick-up vehicle up to 800CC, an ineligible person cannot purchase the same until the Board notifies the limitations and restrictions; â€¢ A transaction conducted by a public company or a non-resident person, except for cash withdrawals from their bank accounts. Certain transactions proposed to be carved out from the aforestated restrictions â€¢ If an ineligible person files their income tax return for the latest completed tax year, and files a source of investment and expenditure statement / declaration on the Boardâ€™s web portal specifying the sources of funds for making such transaction. It may be noted that the sources of investment and expenditure statement filed by the person and sufficient resources mentioned in sub-section (5), shall not be construed as nature and source of income for the purposes of Section 111. 2- Exchange of banking and tax information related to high-risk persons â€¢ The Bill has proposed to introduce Section 175AA in the ITO, whereby the Board has been authorized to share information of turnover, income including taxable income, for one or more tax years, identification data including bank account numbers declared in the income tax return, wealth statement, financial statement or in any other document to the Board, in respect of persons or classes of persons, along with data based algorithms, as may be prescribed, with scheduled banks in Pakistan; and â€¢ Where the data is shared as above by the Board, the Banks have been obliged to provide particulars such as name, account numbers of those persons, where the banking information is at variance with the data algorithms provided by the Board as above. â€¢ The information received under Section 175AA of the ITO shall be used for tax purposes and be kept confidential as per Section 175AA(2). â€¢ Section 175AA has been given a general overriding effect through a non-obstante clause, and specifically over Banking Companies Ordinance 1962, Section 216 of the ITO and any regulations made under the State Bank of Pakistan Act 1956. 3- The board proposed to be empowered to appoint auditors, and auditors have been proposed to be given the status of income tax authority â€¢ The Bill has proposed to amend Section 222 of the ITO, whereby the Board has been empowered to appoint auditors on a contractual basis or through a third-party arrangement as the Board deems fit for carrying out the purposes of this Ordinance. â€¢ A corresponding amendment has been proposed to be made under Section 207, whereby, the auditor appointed u/s 222(2) has been proposed to be given the status of an Income tax authority. â€¢ A corresponding amendment has been proposed to be made under Section 216, to allow disclosure of particulars mentioned in Section 216(1) to the auditor appointed by the board u/s 222(2) to assist any authority mentioned in Section 207(1)(b) to (g), after a non-disclosure agreement (â€œNDAâ€) is made with the auditor as may be prescribed. The said amendment fails to mention who the NDA shall be prescribed by. Points to ponder: â€¢ The concept of an eligible person and the consequent restrictions as stated above may violate Articles 18 (Freedom of trade, business or profession), and Article 23 (Provision as to property) of the Constitution of Islamic Republic of Pakistan 1973 (â€œConstitutionâ€). Person as his wealth statement for the previous tax year shall include the property at the cost of PKR 100. This is violative of Article 23, as the restriction in question is not reasonable. Restricting any person, including a nonresident person or a public company, from withdrawing cash from their bank account beyond a threshold prescribed / notified by the FBR. This restriction needs to be revisited as restricting a taxpayer to withdraw his money beyond a certain threshold is impractical. This is violative of Articles 18 and 23 of the Constitution. For e.g. there are certain companies that have employed their manpower in remote areas to their clients premises that lack basic internet facilities and hence internet or mobile banking may not be accessible. Therefore, the Company may have to incur expense such as their salaries and lodging in cash for which cash withdrawals need to be made. It is settled law that the revenue authorities cannot dictate the taxpayer as to how a taxpayer may conduct its business. Reliance is placed on a judgment of the Honâ€™ble Supreme Court of Pakistan (â€œSCPâ€) reported as 1992 PTD 954 wherein the Honâ€™ble SCP held as follows: â€œ6. â€¦ An assess is entitled to manage his own affairs to the best of his benefit even by in adopting legal modes which may result in reduction of tax and the same if covered by the provisions of law cannot be challenged on the ground of prudence, advisibility or business practice.â€ â€¢ Further, subjecting non-resident persons to â€¢ The concept of sufficient resource needs to be this restriction is discriminatory and may revisited. Pursuant to the Bill, if Mr. X owns violate Article 25 (Equality of all citizens) of an immoveable property and has declared it the Constitution. in his wealth statement at PKR 100 (cost), and sells it after 10 years at PKR 500, and wishes to purchase a property worth PKR 400, then he will not be considered an eligible â€¢ Filing of sources of investment and expenditure statement is against the self-assessment scheme under the ITO. Therefore, it may be held to be ultra vires the ITO by the Honâ€™ble Courts of law in Pakistan. â€¢ Section 175AA may violate Article 14 of the Constitution, as it breaches the taxpayerâ€™s right of privacy. Further, no degree of variance has been specified in Section 175AA(1)(b). As such, the FBR may obligate the Bank to share particulars of the taxpayer even if there is the slightest degree of variance. The same seems arbitrary and must be revisited. â€¢ The appointment of third party auditors and the sharing of information of the taxpayer to them may violate Article 14 of the Constitution. Further, it puts the taxpayer at risk, as the auditor may be the auditor of the taxpayerâ€™s competitor, and as such access to the taxpayerâ€™s information may give rise to a conflict of interest. Further, it may also militate the taxpayerâ€™s right to do business as enshrined in Article 18 of the Constitution. Amendments in Sales Tax Act, 1990 1- Introduction of an automated risk management system for the purpose of input tax adjustment (Section 8B(4)) â€¢ In section 8B subsection (4) of the STA, which pertains to the Boardâ€™s power to prescribe a limit of input tax adjustment for any person. The Bill has proposed the introduction of a data based automated risk management system that is aimed to limit input tax allowances. â€¢ Further, a new proviso is to be added that provides a registered taxpayer to contest the action taken under abovementioned section by filing an application with the concerned Commissioner who shall decide the case within a stipulated time of sixty days from the date of filing of such application 2- Concept of bar on operations of Bank Accounts (Section 14AC) â€¢ The Commissioner shall have the power to direct can direct property registering authority to bar the transfer of immovable property of a person who fails to register under the law. The Commissioner may in writing order the bar to be removed on transfer of immoveable property not later than two working days upon registration. An aggrieved person can appeal to the chief Commissioner within 30 days of the decision. 3- Introduction of other coercive actions for non-registration (Section 14AE) â€¢ If a person fails to register under the law, the Chief Commissioner has the authority to seal their business premises, seize movable property, or appoint a receiver to manage their taxable activity. However, these actions cannot be taken unless a public notice is issued specifying the date of action, and a committee, including the Chief Commissioner, concerned Commissioner, and a representative from the Chamber of Commerce and trade bodies, provides the person an opportunity to be heard through an open court. The decision must also be made public through the Boardâ€™s website and a newspaper. â€¢ If the person registers, the Chief Commissioner is obligated to remove the appointed receiver not later than two working days. â€¢ Any person aggrieved by the Order of the Commissioner under Section 14AE(1) can prefer representation before the Board within 30 days of receiving the decision. 4- Appointment of experts and auditors (Section 32B) â€¢ The Board or the Commissioner may appoint as many experts as needed for tasks such as audit, investigation, litigation, or valuation. Additionally, the Board may appoint auditors, either directly or through a third party including a payroll firm and confer such powers as may deemed necessary to assist the authorities mentioned in subsection (1) of section 30 of the STA which include a Chief Commissioner Of Inland Revenue, Commissioner Of Inland Revenue, Commissioner of Inland Revenue (Appeals), Additional Commissioner of Inland Revenue, Deputy Commissioner of Inland Revenue, District Taxation Officer Inland Revenue, Assistant Commissioner of Inland Revenue, Assistant Director Audit Inland Revenue, Inland Revenue Officer, Superintendent Inland Revenue, Inland Revenue Auditor Officer, Inspector Inland Revenue and officer of Inland Revenue with any other designation. 5- Amendment in Section 56B (Disclosure of information by a public servant) â€¢ In subsection (1) after the word â€œservantâ€ the expression â€œ, expert or auditor appointed under section 32Bâ€ shall be inserted. This imposes a duty on the experts and auditors to not disclose any information acquired under any provision of this Act, subject to Section 216 of the ITO. Amendments in Sales Tax Act, 1990 6- Amendment in Section 73 (Certain transactions not admissible) â€¢ The Bill has proposed to amend subsection (4) whereby the words â€œaggregate. one hundred million rupees in financial year or ten million rupeesâ€, the words â€œa financial year orâ€ shall be substituted. Further, after the word â€œActâ€, the words â€œas may be specified by the Board through a sales tax general orderâ€ shall be inserted. â€¢ This proposed amendment shall remove the limit prescribed for input tax adjustment for supplies to unregistered persons. Moreover, the Board, through a sales tax general order will specify the threshold of the said supplies Points to ponder: â€¢ Incorporating measures directed to risk such as the automated risk management system to further limit input tax adjustments is crucial. However, it may present fairness and transparency issues. Further, the system may be vulnerable to faults which will lead to burden on the appellate fora which is already drowning in a plethora of cases. â€¢ This may violate Articles 18 and 23 of the Constitution. Further, an appeal to should lie before either the Tribunal or a Committee consisting of independent members from the business community as well in order to give a fair hearing to the person as enshrined under Article 10A of the Constitution. The Chief Commissioner is not an independent forum. â€¢ The bar on transfer of immovable property for non-registered taxpayers under the STA is a disproportionate measure, as the STA governs taxpayers who sell goods, whereas, the bar is being placed on transfer of immoveable property that can also be a personal asset of the person. This may violate Article 23 of the Constitution. â€¢ Measures such as sealing up business premises and/or appointing receivers to go in enhancing compliance are extreme and can hurt a business. Further, the reputation loss that such action causes can be immense and can certainly discourage a conducive environment to do business. Moreover, an appeal from the Chief Commissionerâ€™s Order should lie before the Honâ€™ble ATIR or the Honâ€™ble High Courts of law instead of the Board to give an independent and free hearing. â€¢ The appointment of third party auditors and the sharing of information of the taxpayer to them may violate Article 14 of the Constitution. Further, it puts the taxpayer at risk, as the auditor may be the auditor of the taxpayerâ€™s competitor, and as such access to the taxpayerâ€™s information may give rise to a conflict of interest. Further, it may also militate the taxpayerâ€™s right to do business as enshrined in Article 18 of the Constitution. Amendments in Federal Excise Act, 2005 1- Amendment in Section 26 (Power to seize) â€¢ In sub-section (l), after the word â€œthereunderâ€â€œ the expression â€œor dutiable goods without affixing or affixing counterfeited tax stamps, banderoles, stickers, labels or barcodes, as required under section 45A for monitoring or tracking by electronic or other meansâ€ shall be inserted. The amendment adds that goods without the required tax stamps, banderoles, stickers, labels, or barcodes (which are essential for monitoring or tracking by electronic or other means as per section 45A) will be considered non-compliant with the law. 2- Amendment in Section 27 (Confiscation of goods subject to federal excise duty) â€¢ In sub-section (1), after the word â€œcounterfeitingâ€, the expression â€œor such goods without affixing or affixing counterfeited tax stamps, banderoles, stickers, labels or barcodes, as required under section 45A for monitoring or tracking by electronic or other meansâ€ shall be inserted. â€¢ New sub-section is added, namely subsection (4) where the Board may authorize the Federal or Provincial Government to exercise the powers and duties of Inland Revenue officers under section 26 and sub-section (1) of section 27 in cases of goods which are subject to monitoring under section 45A and counterfeited goods POINTS TO PONDER: â€¢ Allowing seizure of goods without proper tax stamps or with counterfeit markings enhances control over excise duties and reduces tax evasion. However, businesses may struggle to comply with these requirements. â€¢ Expanding confiscation grounds to include goods missing proper documentation strengthens enforcement but may negatively impact legitimate businesses. The ability for the Board to authorize enforcement actions provides additional flexibility. Amendments in Islamabad Capital Territory (Tax on Services) Ordinance, 2001 1- Amendments in Section 3 subsection (1) (Scope of Tax) â€¢ The amendment to the Islamabad Capital Territory (Tax on Services) Ordinance, 2001, will require service providers listed in Table 1 or Table 2 of the Schedule to integrate their businesses with the Boardâ€™s computerized system for real-time service reporting. Copyright Business Recorder, 2024

Date: 2024-12-21

Details: Islamabad, December 21, 2024 â€“ Prime Minister Muhammad Shehbaz Sharif has issued firm directives to authorities to bring tax defaulters into the tax net and enforce strict measures against non-compliance. Presiding over a high-level meeting on Saturday, the Prime Minister reviewed strategies aimed at enhancing revenue collection and bolstering the performance of the Federal Board of Revenue (FBR). During the briefing, officials provided updates on the deployment and monitoring of video analytics systems in the sugar industry. Stressing the transformative role of technology, PM Shehbaz remarked, â€œEnhancing FBRâ€™s efficiency through advanced technology is among the governmentâ€™s top priorities.â€ He highlighted that integrating video analytics in the sugar industry would significantly improve revenue collection, combat hoarding, and stabilize market prices. â€œOur foremost objective is to ensure an uninterrupted supply of sugar at affordable prices for the public,â€ he stated, directing authorities to closely monitor sugar stocks to maintain stability in the supply chain. The Prime Minister also called for uncompromising action against tax evasion and under-reporting by sugar mills, reiterating that these measures are essential to securing billions of rupees in additional revenue for the national exchequer. He emphasized that digitization across the revenue collection system, particularly within the FBR, is critical for achieving fiscal sustainability. In addition to addressing challenges in the sugar sector, PM Shehbaz instructed the rapid expansion of video analytics technology to the cement and tobacco industries. These steps, he noted, would further streamline revenue collection, enhance transparency, and curb illegal practices. Shehbaz underscored the importance of expediting the digitization of the FBRâ€™s value chain to maximize the systemâ€™s potential. He expressed confidence that such initiatives would lead to a more robust and transparent taxation framework, ultimately strengthening Pakistanâ€™s economic foundations. The meeting was attended by Federal Minister for Economic Affairs Ahad Khan Cheema, Federal Minister for Information and Broadcasting Attaullah Tarar, Minister of State for Finance Ali Pervaiz Malik, and other senior government officials. The attendees expressed their commitment to implementing the Prime Ministerâ€™s directives and ensuring the timely execution of revenue-enhancing strategies. The Prime Minister reaffirmed his administrationâ€™s resolve to take decisive actions against tax evasion while leveraging technology to modernize the revenue collection process and support the countryâ€™s economic growth.

Date: 2024-12-21

Details: Islamabad, December 21, 2024 â€“ Following directives from Prime Minister Shehbaz Sharif, a high-level committee has been formed to devise a comprehensive taxation regime for the Newly Merged Districts (NMDs). The Federal Board of Revenue (FBR) announced the committeeâ€™s establishment on Saturday through an official notification. The committee includes a diverse group of representatives from government and industry to ensure a balanced and practical approach to transitioning the NMDs into the formal taxation system. The members of the committee are as follows: 1. Rana Sana Ullah Khan, Federal Minister for IPC and Adviser to the Prime Minister on Political and Public Affairs, as Convener. 2. Amir Muqam, Member of the National Assembly. 3. Minister of State for Finance and Revenue. 4. Chairman, Federal Board of Revenue. 5. Chief Secretary, Khyber Pakhtunkhwa. 6. Representative of Pakistan Association of Large Steel Production. 7. Representative of PVMA. 8. Zahidullah Shinwari, Former President of KPCCI. The committeeâ€™s Terms of Reference (TORs) are designed to address critical issues related to the taxation framework in these areas: 1. Formulating strategies to implement the recommendations of the steering committee on the Prime Ministerâ€™s Program for NMDs. 2. Reviewing the current tax exemption regime, evaluating its revenue impact, and addressing misuse affecting industries in the region. 3. Proposing actionable steps to integrate NMDs into the taxation system after the exemptions expire on June 30, 2024, as outlined in the PMâ€™s program for NMDs. 4. Engaging with stakeholders to raise awareness and facilitate industries in the NMDs for a smooth transition to the regular tax regime. 5. Addressing any ancillary issues related to the taxation process. The committee has been directed to submit its findings and recommendations to the Prime Minister within four weeks. The FBR will provide secretarial support to the committee, with its Member (IR-Policy) acting as the committeeâ€™s secretary. This initiative underscores the governmentâ€™s commitment to fostering economic development and fiscal integration in the NMDs. By implementing a structured taxation framework, the government aims to promote industrial growth, curb misuse of exemptions, and ensure sustainable revenue generation in these regions.

Date: 2024-12-21

Details: Islamabad, December 21, 2024 â€“ Following directives from Prime Minister Shehbaz Sharif, a high-level committee has been formed to devise a comprehensive taxation regime for the Newly Merged Districts (NMDs). The Federal Board of Revenue (FBR) announced the committeeâ€™s establishment on Saturday through an official notification. The committee includes a diverse group of representatives from government and industry to ensure a balanced and practical approach to transitioning the NMDs into the formal taxation system. The members of the committee are as follows: 1. Rana Sana Ullah Khan, Federal Minister for IPC and Adviser to the Prime Minister on Political and Public Affairs, as Convener. 2. Amir Muqam, Member of the National Assembly. 3. Minister of State for Finance and Revenue. 4. Chairman, Federal Board of Revenue. 5. Chief Secretary, Khyber Pakhtunkhwa. 6. Representative of Pakistan Association of Large Steel Production. 7. Representative of PVMA. 8. Zahidullah Shinwari, Former President of KPCCI. The committeeâ€™s Terms of Reference (TORs) are designed to address critical issues related to the taxation framework in these areas: 1. Formulating strategies to implement the recommendations of the steering committee on the Prime Ministerâ€™s Program for NMDs. 2. Reviewing the current tax exemption regime, evaluating its revenue impact, and addressing misuse affecting industries in the region. 3. Proposing actionable steps to integrate NMDs into the taxation system after the exemptions expire on June 30, 2024, as outlined in the PMâ€™s program for NMDs. 4. Engaging with stakeholders to raise awareness and facilitate industries in the NMDs for a smooth transition to the regular tax regime. 5. Addressing any ancillary issues related to the taxation process. The committee has been directed to submit its findings and recommendations to the Prime Minister within four weeks. The FBR will provide secretarial support to the committee, with its Member (IR-Policy) acting as the committeeâ€™s secretary. This initiative underscores the governmentâ€™s commitment to fostering economic development and fiscal integration in the NMDs. By implementing a structured taxation framework, the government aims to promote industrial growth, curb misuse of exemptions, and ensure sustainable revenue generation in these regions.

Date: 2024-12-21

Details: The Tax Laws (Amendment) Bill, 2024 introduces a series of proposed restrictions targeting non-compliant individuals and entities under Section 114C(1) of the Income Tax Ordinance, 2001. These amendments are aimed at curbing tax evasion and improving tax compliance by restricting certain transactions for individuals and businesses that fail to meet tax obligations. The bill, as outlined by Tola Associates and Tola & Tola, specifies several key restrictions that will come into effect once notifications are issued by the Federal Board of Revenue (FBR). Restrictions on Vehicle Purchases and Registrations The bill imposes a significant restriction on the purchase and registration of motor vehicles. Under the proposed amendments, individuals who are deemed non-compliant will not be allowed to apply for booking, purchase, or registration of a motor vehicle. Specifically, vehicle manufacturers or registering authorities under the excise and tax departments will be prohibited from processing such applications from non-compliant persons. This restriction aims to limit the ability of individuals with unresolved tax issues from acquiring new vehicles, thereby encouraging tax compliance. Restrictions on Property Transactions Another proposed restriction concerns transactions related to immovable property. The bill specifies that applications or requests for the registration, recording, or attestation of transfers of immovable property will not be accepted from non-compliant individuals if the transaction exceeds a certain value, as defined by the FBR. This value threshold will be notified periodically through an SRO or Notification. This measure is designed to target large property transactions, which often involve significant amounts of unreported income, thereby discouraging non-compliance in the real estate sector. Securities Transactions The proposed amendments also affect individuals and entities involved in securities transactions. Anyone authorized to sell securities, including debt securities or mutual fund units, will face restrictions on selling or clearing transactions for ineligible persons, which include individuals or Associations of Persons (AOPs) who are not compliant with their tax obligations. This includes restrictions on opening and maintaining accounts for such individuals or entities, which will significantly hinder their ability to engage in the securities market unless they meet the required compliance standards set by the FBR. Banking Restrictions Banking companies will also be restricted under the proposed amendments. Specifically, they will not be allowed to open or maintain current, savings, or investment accounts for persons who are listed by the FBR as non-compliant. The implementation of this restriction will occur once the FBR notifies the names of the individuals or entities that fall under this category. This will prevent non-compliant individuals from accessing basic banking services, adding another layer of pressure to ensure compliance with tax regulations. Cash Withdrawal Restrictions Additionally, banking companies will face restrictions on cash withdrawals. They will be prohibited from allowing withdrawals in excess of a limit prescribed by the FBR. This general restriction on cash withdrawals is aimed at discouraging large cash transactions, which are often used to conceal income or evade taxes. Like other restrictions, this will come into effect once the FBR notifies the threshold for maximum allowable withdrawals. Exemptions from Restrictions While the proposed restrictions are broad, the bill does carve out certain exceptions. Ineligible persons will still be allowed to purchase specific types of vehicles, such as rickshaws, motorcycle rickshaws, tractors, and pickup vehicles up to 800CC. Furthermore, the purchase of motor vehicles other than the specified types, or vehicles such as trucks and buses, will also be permitted, but only if the limitations and restrictions set by the FBR are met. Additionally, certain transactions conducted by public companies or non-resident persons will not be subject to these restrictions, with the exception of cash withdrawals from their bank accounts. This allows some flexibility for businesses and foreign investors, who may not be directly involved in tax evasion practices but still need to comply with the overarching tax regulations. Compliance through Documentation For non-compliant individuals, the bill proposes a pathway to compliance. If an ineligible person files their income tax return for the latest completed tax year and submits a source of investment and expenditure statement on the FBRâ€™s web portal, they may be exempted from certain restrictions. This statement must specify the sources of funds used for making specific transactions. It is important to note that the filing of such a statement will not be construed as an acknowledgment of the nature and source of income for the purposes of Section 111 of the Income Tax Ordinance, 2001. This provision aims to provide a mechanism for individuals to correct their tax status by disclosing their financial activities transparently, thereby enabling them to access restricted transactions once they demonstrate their compliance with tax laws. Conclusion The Tax Laws (Amendment) Bill, 2024 introduces a significant set of restrictions targeting non-compliant individuals and entities. These measures, once implemented, will affect a wide range of transactions, from vehicle purchases to banking activities and property deals. While these restrictions are aimed at enhancing tax compliance, they also come with carve-outs and exceptions that provide opportunities for individuals and businesses to rectify their status and avoid the penalties associated with non-compliance. The effectiveness of these measures will ultimately depend on the timely issuance of notifications by the FBR and the level of enforcement across various sectors.

Date: 2024-12-21

Details: Karachi, December 21, 2024 â€“ In a landmark move aimed at tightening tax compliance, the Federal Board of Revenue (FBR) is set to be granted sweeping powers to obtain and cross-check taxpayersâ€™ bank details with the income and assets declared in their returns. This significant development comes as part of the proposed amendments under the Tax Laws (Amendment) Bill, 2024, which includes a provision for the exchange of banking and tax information, specifically targeting high-risk individuals and entities. According to a detailed commentary on the bill released by Tola Associates and Tola & Tola, the proposed amendments would introduce Section 175AA to the Income Tax Ordinance (ITO), 2001. This provision would empower the FBR to access a taxpayerâ€™s comprehensive financial data, including turnover, taxable income, and other critical financial information, for one or more tax years. Furthermore, the amendment allows the FBR to obtain the identification data, such as bank account numbers, as declared in the income tax returns, wealth statements, or financial statements, and cross-check it with data algorithms prescribed by the tax authorities. A key aspect of the bill is the mandatory obligation placed on scheduled banks to provide specific details, including the names and account numbers of individuals whose banking information shows discrepancies when compared to the data provided by the FBR. The bill stipulates that if any inconsistency is found between the bank records and the prescribed data algorithms, banks must report these discrepancies to the FBR, ensuring enhanced transparency and accountability in financial dealings. To safeguard sensitive information, Section 175AA also includes provisions to maintain the confidentiality of any data shared between the FBR and financial institutions. The use of this data will be strictly for tax purposes, in accordance with the regulations laid out in the section. In a further bid to ensure the unimpeded implementation of these provisions, Section 175AA has been given an overriding effect. It specifically overrides several key regulations, including the Banking Companies Ordinance of 1962, Section 216 of the Income Tax Ordinance, and any regulations under the State Bank of Pakistan Act of 1956. This non-obstante clause strengthens the FBRâ€™s ability to access financial data, even if other legal provisions may otherwise restrict such actions. The amendments reflect the governmentâ€™s ongoing efforts to combat tax evasion, particularly among high-risk taxpayers, by leveraging data analytics and cross-referencing bank details with income declarations. While the move is expected to boost the countryâ€™s tax collection efforts, it also raises concerns about privacy and the potential for misuse of financial information. As the bill progresses, the implementation and oversight of these powers will be crucial to balancing effective tax enforcement with the protection of individual rights.

Date: 2024-12-21

Details: Karachi, December 21, 2024 â€“ The Government of Pakistan has introduced the concept of â€œeligible personsâ€ for conducting financial transactions in the country. This proposal is part of the Tax Laws (Amendment) Bill, 2024, aiming to streamline financial activity and ensure compliance with tax regulations. According to an analysis by Tola Associates and Tola & Tola, the Bill proposes a new Section 114C to the Income Tax Ordinance, 2001, defining â€œeligible personsâ€ authorized to engage in financial transactions. Under Section 114C(5)(b), an eligible person is described as someone who has filed an income tax return for the tax year immediately preceding the transaction year. Additionally, the person must have sufficient financial resources reflected in a wealth statement (for individuals) or financial statements (for companies or associations of persons) to justify the transaction. In the case of individuals, the definition of an eligible person also extends to immediate family members, as outlined in the proviso to Section 114C. For example, if an individual intends to purchase immovable property in the Tax Year 2025, they must have filed their income tax return for Tax Year 2024 to qualify as an eligible person. Conversely, the law defines an â€œineligible personâ€ under Section 114C(5)(d) as anyone who does not meet the eligibility criteria. This distinction aims to ensure financial transactions are conducted only by those compliant with tax regulations, minimizing potential misuse and tax evasion. This initiative is part of broader reforms to enhance financial transparency and improve tax collection in Pakistan. By introducing the eligible person requirement, the government seeks to encourage tax compliance and accountability in financial dealings. Experts believe this amendment could significantly impact individuals and businesses by making it mandatory for them to maintain up-to-date tax records and sufficient financial disclosures. While some may view the policy as an added burden, it is expected to contribute to greater financial discipline and a more robust tax system in the country. As the Tax Laws (Amendment) Bill, 2024, progresses, the government will likely provide further clarity on its implementation and potential implications for taxpayers and businesses alike.

Date: 2024-12-20

Details: Karachi, December 20, 2024 â€“ Leading tax experts have expressed grave concerns over the proposed amendments to tax laws, warning that these measures could unintentionally drive a significant shift towards a cash-based economy. The proposed amendments, outlined in the Tax Laws (Amendment) Bill, 2024, were tabled in Parliament on December 18, and include stringent actions against non-filers, such as restrictions on purchasing immovable property, vehicles, and operating bank accounts. Critics argue that these amendments, while intended to tighten compliance, could undermine public trust and disrupt the banking system. Ali A. Rahim, President of the Karachi Tax Bar Association (KTBA), termed the measures â€œharshâ€ and predicted that they would deepen the trust deficit between the public and the Federal Board of Revenue (FBR). Rahim highlighted that such measures, especially those targeting the banking sector at the year-end, could trigger massive cash withdrawals, undermining financial stability. Rahim also emphasized the broader implications of these restrictions, noting that barring non-filers from purchasing assets or conducting transactions could exacerbate financial exclusion and encourage informal economic activities. Syed Rehan Hasan Jafri, a former KTBA president, echoed these sentiments, asserting that the proposed measures would inadvertently promote the cash economy. â€œBefore the amendments are enacted, individuals will likely withdraw substantial amounts from banks to avoid potential restrictions,â€ Jafri said. He further criticized the FBRâ€™s punitive approach, arguing that enhancing the Broadening of Tax Base (BTB) initiatives would be a more effective and equitable strategy. Jafri cited the example of long-term tax filers who might face punitive actions for missing a single yearâ€™s filing, describing such enforcement as â€œunjust and counterproductive.â€ In contrast, Syed Zafar Ahmed, immediate past president of KTBA, expressed cautious support for the amendments but questioned the FBRâ€™s capacity to implement them effectively. Ahmed criticized the timing and lack of clarity surrounding the proposals, stating that the measures should have been introduced decades ago. â€œIn an era of digital records and data mining, where the FBR already possesses extensive transaction data, these laws appear redundant,â€ Ahmed remarked. He accused the authorities of creating unnecessary confusion instead of leveraging existing data to enhance compliance. As debate intensifies, stakeholders urge the government to reconsider its approach, emphasizing collaboration and transparency to rebuild public trust and achieve sustainable tax reforms.

Date: 2024-12-20

Details: Karachi, December 20, 2024 â€“ The Pakistan Tax Bar Association (PTBA) has raised critical concerns over the utilization of taxpayer funds, particularly for foreign trips and inflated government salaries. This pressing issue was articulated in a formal letter addressed to Syed Naveed Qamar, Chairman of the Standing Committee on Finance and Revenue, National Assembly. Anwar Kashif Mumtaz, President of PTBA, voiced the associationâ€™s apprehensions, emphasizing the precarious state of Pakistanâ€™s finances. â€œThe exchequer is under immense strain, and tax revenue collection has consistently fallen short of expectations,â€ he remarked. Mumtaz underscored that the apparent imprudent allocation of taxpayer fundsâ€”ranging from extravagant official delegations abroad to non-development budget hikes and recent salary revisions for government employeesâ€”demands urgent scrutiny. â€œThe taxpayers have an inherent right to transparency and accountability regarding the utilization of their hard-earned money,â€ Mumtaz stated. He further urged for clarity on how these expenditures contribute to the nationâ€™s welfare, particularly when Pakistanâ€™s economic challenges call for stringent fiscal discipline. The PTBAâ€™s letter recommended the establishment of a high-powered taxpayer committee. This proposed body would oversee and approve government spending involving taxpayer contributions. Such oversight, the PTBA suggested, should extend to foreign delegations, government employee salary increments, and other expenditures. Even development projects should detail the allocation of taxpayer funds and demonstrate measurable benefits, particularly in critical sectors like infrastructure, health, education, and transportation. In their submission, the PTBA invoked Article 19A of the Constitution, emphasizing the citizensâ€™ right to access information. They implored the concerned ministry to disclose comprehensive details on taxpayer money allocation and outcomes. â€œTaxpayer oversight is not only a necessity but a democratic right,â€ Mumtaz asserted. The PTBAâ€™s call for a systemic overhaul highlights growing frustration among taxpayers, demanding transparency and a clear correlation between public spending and national development. Their proposal, if implemented, could set a precedent for fiscal responsibility and public accountability at the national level.

Date: 2024-12-20

Details: December 20, 2024 Islamabad, December 20, 2024 â€“ The Federal Board of Revenue (FBR) announced an extended work schedule for its tax offices during upcoming weekends in December 2024 to ensure smooth collection of duties and taxes. In an official notification, the FBR directed Chief Commissioners of Inland Revenue across Large Taxpayers Offices (LTOs), Medium Taxpayers Offices (MTOs), Corporate Tax Offices (CTOs), and Regional Tax Offices (RTOs) to observe regular working days on Saturday, December 21; Saturday, December 28; and Sunday, December 29, 2024. This step aims to bolster enforcement efforts and support revenue collection targets for the second quarter of the fiscal year 2024-25. Objective Behind the Decision The FBRâ€™s decision reflects its proactive approach to achieving revenue targets amidst tightening fiscal challenges. The directive ensures that taxpayers and businesses can fulfill their obligations during the extended hours, minimizing delays in tax submission and compliance. It also underscores the governmentâ€™s commitment to maintaining momentum in revenue generation during the critical end-of-year period. The directive specifically focuses on enhancing operations within key tax offices. These offices, including LTOs, MTOs, CTOs, and RTOs, play a vital role in facilitating large-scale revenue collection from corporate entities, medium-scale enterprises, and regional taxpayers. Implementation and Compliance Tax offices across Islamabad and other regions are instructed to remain fully operational during the specified holiday dates, observing their regular schedules. Field formations are tasked with expediting enforcement measures and resolving any pending matters that could impact revenue collection. The FBR has also advised its officers and staff to coordinate with taxpayers, ensuring smooth operations and adherence to compliance deadlines. This initiative aims to eliminate bottlenecks in tax collection while providing businesses the flexibility to meet their fiscal responsibilities. Anticipated Impact The extended working schedule is expected to provide significant support in achieving second-quarter revenue goals for fiscal year 2024-25. It also highlights the FBRâ€™s dedication to ensuring an efficient and accountable tax administration system. This step reinforces the FBRâ€™s strategic focus on meeting fiscal targets while accommodating taxpayersâ€™ needs, particularly during the busy holiday season. Businesses and individuals are encouraged to utilize these additional working days to settle outstanding tax obligations and contribute to the nationâ€™s economic stability.

Date: 2024-12-19

Details: LAHORE: Federal Tax Ombudsman Dr Asif Mahmood Jah said on Wednesday that taxpayersâ€™ rights are fully protected under the federal tax laws of income tax, Customs and sales tax to redress their genuine grievances. Speaking to the members of Advisory Committee, he emphasised the importance of understanding these rights to ensure the prompt addressing their tax related issues. He noted that the existing legal framework provides sufficient safeguards to protect taxpayers against arbitrary decisions or unfair treatment. He urged taxpayers to familiarise themselves with the provisions of the law, which are specifically designed to ensure transparency, fairness, and accountability in tax matters. He underscored that a collaborative approach is necessary where both taxpayers and tax authorities work together to build trust and promote compliance. By understanding their rights and responsibilities, taxpayers can not only protect themselves but also contribute positively to the countryâ€™s taxation system. President Lahore Chamber Mian Abuzar Shah also joined the meeting as guest of honour. Dr Asif Jah further highlighted the role of the FTO in resolving taxpayersâ€™ complaints efficiently and impartially. He reassured that his office remains committed to addressing issues such as maladministration, undue delays, and misapplication of tax laws. He urged taxpayers to report their grievances with confidence, as mechanisms are in place to provide relief without any external pressures. He said economy of any country depends upon its tax system and its is rightly well said that tax is byproduct of the economy. He said the professional understanding of complete tax laws is challenging for general public especially tax payers. He said understanding their rights by the tax payers is crucial so that they may not be deprived by the tax collectors due to ignorance. Copyright Business Recorder, 2024

Date: 2024-12-19

Details: Karachi, December 19, 2024 â€“ Pakistan has decided to implement stringent measures to curb tax evasion by prohibiting bank cash withdrawals for individuals who evade taxes. This landmark move, introduced through the Tax Amendment Bill 2024, was presented in Pakistanâ€™s Parliament a day earlier and aims to strengthen the Federal Board of Revenueâ€™s (FBR) capacity to enforce tax compliance. The bill introduces Section 114C to the Income Tax Ordinance of 2001, granting the FBR authority to direct banks to refrain from opening or maintaining current, savings, or investor portfolio securities accounts for individuals who fail to file income tax returns. This provision specifically targets those absent from the Active Taxpayers List (ATL), further incentivizing compliance with tax filing requirements. A pivotal aspect of the legislation is its restriction on cash withdrawals. The FBR will determine and notify limits on cash withdrawals from the accounts of non-filers, creating a significant deterrent to non-compliance. By limiting access to liquidity, Pakistan seeks to minimize economic participation by those shirking their tax obligations. The bill extends beyond cash restrictions, imposing additional measures on non-filers. It prohibits them from applying for, booking, purchasing, or registering motor vehicles, with compliance enforced by manufacturers and the Excise and Taxation Department. Moreover, non-filers will be barred from registering, recording, or transferring immovable property exceeding a specified value, as notified periodically by the FBR. Transactions in securities, including mutual funds and debt instruments, are similarly restricted. Despite its comprehensive nature, the bill provides exceptions to facilitate certain economic activities. Non-filers may acquire rickshaws, motorcycle rickshaws, or tractors, and vehicles with engine capacities up to 800 CC, subject to further conditions. Limited investments in securities are also permissible within thresholds set by the FBR. Crucially, individuals who file tax returns for the latest fiscal year and disclose sources of income and expenditure will be exempt from these restrictions. These reforms form part of Pakistanâ€™s broader strategy to enhance tax compliance, widen the tax net, and reduce evasion. By leveraging financial institutions and curtailing access to key services, the FBR aims to foster a culture of accountability and boost revenue collection. If enacted, the legislation will significantly impact Pakistanâ€™s banking, property, and vehicle registration sectors, reshaping the financial landscape for non-compliant taxpayers while reinforcing the nationâ€™s fiscal framework.

Date: 2024-12-18

Details: Karachi, December 18, 2024 â€“ Registered taxpayers in Pakistan may face significant challenges as the federal government has proposed the removal of input tax adjustment for supplies made to unregistered persons. The amendment, introduced as part of the Tax Laws (Amendment) Bill, 2024, seeks to tighten compliance and broaden the tax net under the Sales Tax Act, 1990. The proposal involves amending sub-section (4) of Section 73 of the Sales Tax Act, 1990. This adjustment aims to disallow registered persons from claiming input tax deductions on taxable supplies made to individuals or entities not registered under the Act. Following the proposed amendment, sub-section (4) would now read: â€œA registered person shall not be entitled to deduct input tax (credit adjustment or deduction of input tax) which is attributable to such taxable supplies exceeding, in a financial year or in a tax period, as are made to certain persons who are not registered under this Act.â€ However, the government has provided exceptions to this restriction. The proposed amendment explicitly states that the removal of input tax adjustment will not apply to supplies made to the following: 1. Federal, provincial, or local government departments and authorities that are not engaged in taxable supply activities. 2. Foreign missions, diplomats, and privileged persons who are exempted under diplomatic arrangements. 3. Individuals or entities not involved in the supply of taxable goods, thereby falling outside the scope of the Act. 4. Persons or categories of persons specified by the Federal Board of Revenue (FBR), subject to conditions outlined in an official Gazette notification. The move is part of the governmentâ€™s broader strategy to encourage tax compliance and increase the number of registered persons under the Sales Tax Act, 1990. By disallowing input tax adjustment on transactions with unregistered individuals, the measure aims to incentivize registration within the taxable supply chain. While the amendment seeks to strengthen tax administration, businesses may face operational hurdles in dealing with unregistered suppliers, potentially increasing compliance costs and disrupting supply chains. The government, however, has emphasized that exceptions and conditions are designed to minimize the impact on essential sectors and non-commercial entities. If enacted, this amendment could significantly reshape the operational dynamics of registered taxpayers and encourage greater registration compliance across Pakistan.

Date: 2024-12-18

Details: Karachi, December 18, 2024 â€“ The government of Pakistan has introduced stringent measures to enforce compliance with the Sales Tax Act, 1990. Aimed at broadening the tax net, these measures target individuals and entities who fail to obtain mandatory registration. The proposed amendments, introduced as part of the Tax Laws (Amendment) Bill, 2024, include the addition of Section 14AE to the Sales Tax Act. The proposed Section 14AE grants the Chief Commissioner extensive powers to take action against unregistered persons. According to sub-section (1), those failing to secure registration under the Sales Tax Act could face actions such as: â€¢ Sealing of business premises, â€¢ Seizure of movable property, or â€¢ Appointment of a receiver to manage the taxable activities of the defaulter. However, safeguards have been outlined to ensure fair implementation. Sub-section (2) mandates that such actions can only proceed after: (a) Issuing a public notice detailing the date from which the premises will be sealed, property attached, or a receiver appointed. (b) Convening a committee comprising the Chief Commissioner, the concerned Commissioner, and a representative from the Chamber of Commerce or relevant trade bodies. This committee must provide an open-court hearing to the affected individual. (c) Making the decision public by publishing it on the Federal Board of Revenueâ€™s (FBR) website and in newspapers. In cases where defaulters comply by obtaining registration, sub-section (3) stipulates that the Chief Commissioner must issue an order to lift the imposed restrictions, such as removing an appointed receiver, within two working days. Further, sub-section (4) offers an avenue for appeal. Aggrieved persons may challenge the decision within 30 days by submitting a representation to the FBR, ensuring an added layer of accountability. The enforcement of these provisions will begin on a date to be notified by the FBR through the official Gazette, as per sub-section (5). These measures reflect Pakistanâ€™s commitment to strengthening its tax system by compelling registration among non-compliant entities. By focusing on registration enforcement, the government aims to reduce tax evasion, enhance revenue collection, and ensure equitable participation in the countryâ€™s tax regime. The proposed actions, while coercive, include mechanisms to balance enforcement with due process, creating a transparent system for improving registration compliance.

Date: 2024-12-18

Details: Karachi, December 18, 2024 â€“ In a step toward enhancing tax compliance, the federal government has proposed restrictions on the transfer of immovable property for individuals or entities failing to register under the Sales Tax Act, 1990. This measure was introduced as part of the Tax Laws (Amendment) Bill, 2024, tabled in the National Assembly on Wednesday. The proposed amendment, through the introduction of Section 14AD to the Sales Tax Act, grants the Commissioner the authority to bar property transactions by non-compliant individuals. According to Section 14AD, sub-section (1) empowers the Commissioner to direct property registration authorities to halt the transfer of immovable property owned by individuals or entities that have not registered for tax purposes. This directive, issued through a formal written order, aims to compel non-registered persons to comply with tax laws by restricting access to property-related transactions. Sub-section (2) provides relief for individuals who subsequently fulfill their tax registration obligations. Once registered under the Sales Tax Act, the Commissioner is required to issue an order to lift the restriction on property transfers. This process must be completed within two working days, ensuring minimal delay for compliant taxpayers. To ensure fairness, sub-section (3) offers an appeals mechanism for individuals or businesses dissatisfied with the Commissionerâ€™s decision. Affected parties may file an appeal with the Chief Commissioner of Inland Revenue within 30 days of receiving the directive. This provision introduces a layer of accountability and ensures that taxpayers have recourse against potentially erroneous decisions. The implementation of these measures will commence on a date specified by the Federal Board of Revenue (FBR) through a notification in the official Gazette, as outlined in sub-section (4). This amendment is part of the governmentâ€™s broader strategy to tighten enforcement and broaden the tax net. By targeting non-compliance in property transactions, the government aims to encourage registration under the Sales Tax Act and enhance revenue collection. The restriction on property transfers is expected to be a powerful deterrent against tax evasion, as immovable property is often a significant asset class. If implemented effectively, this measure could significantly boost Pakistanâ€™s efforts to strengthen its tax system and ensure equitable financial accountability across all sectors.

Date: 2024-12-18

Details: Karachi, December 18, 2024 â€“ In a development aimed at tightening tax compliance, the federal government has proposed a key amendment to the Sales Tax Act of 1990. The government tabled the Tax Laws (Amendment) Bill, 2024 in the National Assembly on Wednesday, which introduces Section 14AC to the Sales Tax Act. The proposed section grants the Commissioner the authority to bar the operations of bank accounts for individuals or entities that fail to register for tax purposes. According to the newly proposed Section 14AC, sub-section (1) empowers the Commissioner to direct banking companies, scheduled banks, and other financial institutions to restrict the operations of the bank accounts of any person who fails to obtain registration under the Sales Tax Act. This provision marks a significant step in enforcing tax compliance by directly affecting the financial operations of non-compliant individuals or businesses. Sub-section (2) outlines the procedure for lifting the restrictions. Once the individual or business becomes registered under the Sales Tax Act, the Commissioner is required to issue an order for the removal of the bar on the bank account. This order must be communicated within two working days, ensuring a relatively swift process for those who comply with the registration requirements. Sub-section (3) provides a mechanism for individuals or businesses that are aggrieved by the Commissionerâ€™s decision. If a person disagrees with the order to bar their bank account, they may file an appeal with the Chief Commissioner Inland Revenue within thirty days from the receipt of the decision. This appeals process allows for transparency and a fair review of the decisions made under this new provision. Finally, sub-section (4) states that the provisions of Section 14AC will come into effect from a date to be determined by the Board, which will issue a notification in the official Gazette to confirm the commencement of this measure. This amendment aims to strengthen tax enforcement by making it more difficult for businesses or individuals to operate without proper registration under the Sales Tax Act. By restricting access to essential financial services such as bank accounts, the government hopes to increase tax compliance and broaden the tax base, thereby boosting revenue collection.

Date: 2024-12-18

Details: Karachi, December 18, 2024 â€“ The Federal Board of Revenue (FBR) is poised to introduce a significant change in the banking sector with the potential imposition of a ban on cash withdrawals by individuals who are non-filers of income tax returns. This move, which has been incorporated into the Tax Amendment Bill 2024, was presented in Parliament today and aims to enhance the FBRâ€™s ability to curb tax evasion by restricting certain financial transactions for non-compliant individuals. The bill proposes the addition of a new section, Section 114C, to the Income Tax Ordinance of 2001. Under this new provision, the FBR would be empowered to issue directives to banks, instructing them not to open or maintain current or savings accounts, or investor portfolio securities accounts (excluding Asaan accounts), for individuals who fail to file their income tax returns. This provision targets individuals who are not listed on the Active Taxpayers List (ATL), thus further incentivizing compliance with tax filing obligations. A critical component of the proposed changes is the restriction on cash withdrawals. The FBR will have the authority to notify the maximum amount of cash that can be withdrawn from the bank accounts of non-filers, further discouraging non-compliance. The new policy could significantly impact individuals who are not fulfilling their tax responsibilities, as the FBR seeks to limit their economic activities by restricting access to liquidity. In addition to the cash withdrawal restrictions, Section 114C also outlines several other measures designed to limit the economic engagement of non-filers. For instance, the bill proposes that ineligible individuals (those who have not filed their returns) will be prohibited from applying for, booking, purchasing, or registering a motor vehicle. This restriction applies to both manufacturers of motor vehicles and the relevant authorities within the Excise and Taxation Department. Furthermore, any applications or requests from non-filers to register, record, or transfer immovable property above a certain value, which will be periodically notified by the FBR, will not be processed. The bill also prohibits non-filers from engaging in transactions involving securities, including the buying, selling, or opening accounts for mutual funds, debt securities, or other investments. However, the proposed bill does include some exceptions. These restrictions will not apply to certain purchases, including the acquisition of rickshaws, motorcycle rickshaws, or tractors. Additionally, individuals may still purchase vehicles with engine capacities up to 800 CC, subject to further restrictions outlined by the FBR. There are also provisions for non-filers to invest in securities, up to a specified limit, as set by the FBR. Importantly, non-filers who submit their tax returns for the latest completed year and provide a statement detailing their sources of investment and expenditure will be exempt from these restrictions. The proposed measures are part of the governmentâ€™s broader strategy to improve tax compliance, reduce tax evasion, and broaden the tax net. By leveraging financial institutions and restricting access to essential services for non-filers, the FBR hopes to encourage individuals to fulfill their tax obligations, thus strengthening Pakistanâ€™s revenue collection system. If passed, this legislation will have far-reaching implications for the countryâ€™s banking, property, and vehicle registration sectors, significantly altering the financial landscape for non-compliant taxpayers.

Date: 2024-12-18

Details: Karachi, December 18, 2024 â€“ The Federal Board of Revenue (FBR) has officially ceased the issuance of No Objection Certificates (NOCs) for the registration of specialized trusts, including Employees Provident Funds, Gratuity Funds, and Superannuation Funds. This decision marks a significant shift in the regulatory process concerning these trusts. The FBR has communicated this directive to the Chief Commissioners of Inland Revenue (CCIRs) at Large Taxpayer Offices (LTOs), Medium Taxpayer Offices (MTOs), Corporate Tax Offices (CTOs), and Regional Tax Offices (RTOs). According to the FBR, for registering a specialized trust under the Punjab Trust Act, 2020, or similar Trust Acts enforced within the Islamabad Capital Territory and other provinces, the trustee must now obtain an NOC from the relevant regulator. This NOC must include the prescribed information required for registering a specialized trust. The FBR clarified that the term â€œregulator,â€ as referenced in Section 3 of the Punjab Trusts Act, 2020, is defined under Schedule IV of the Anti-Money Laundering Act, 2010. The FBR emphasized that, under current laws, it is not authorized or notified as a regulator in matters related to specialized trusts. Consequently, the FBR has directed its field formations to discontinue issuing NOCs for specialized trusts such as Employees Provident, Gratuity, or Superannuation Funds. Applicants or taxpayers, whether their cases are pending or prospective, are advised to approach the federal government through the Finance Division to obtain the required NOC. This move by the FBR is seen as part of its broader effort to streamline regulatory functions and ensure alignment with existing legal frameworks. By transferring the responsibility for issuing NOCs to the federal government, the FBR aims to eliminate any ambiguity in its regulatory authority concerning specialized trusts. Industry stakeholders and taxpayers impacted by this decision are encouraged to seek further guidance from the Finance Division. The FBRâ€™s decision underscores its commitment to adhering to legislative boundaries while ensuring transparency in its operations regarding specialized trusts.

Date: 2024-12-17

Details: ISLAMABAD: The Federal Board of Revenue (FBR) has issued a notification on suspension of nine Inland Revenue officials/officers involved in malpractices and were working in connivance with the sugar mills to evade sales tax and federal excise duty. The suspended officials were working at Regional Tax Office-I, Karachi; Regional Tax Office Hyderabad; Regional Tax Office, Sukkur; Corporate Tax office Lahore and Regional Tax Office, Faisalabad. According to the notification issued by the FBR on Monday, in exercise of powers conferred under Rule 5(1) of Civil Servants (Efficiency & Discipline) Rules, 2020, the Competent Authority is pleased to place the following officers / officials under suspension with immediate effect, for a period of 120 days or till further orders, whichever is earlier: The suspended officials are Muhammad Mohsin Khan (Inland Revenue Officer/Time Scale BS-17), Regional Tax Office-I, Karachi; Arshad Mahmood (Inland Revenue Officer/Time Scale BS-17), Regional Tax Office-I, Karachi; Ubaidullah Buksh (Inspector-IR/Time Scale BS-17) Regional Tax Office Hyderabad; Sarfraz Ahmad (Office Superintendent/BS-16), Regional Tax Office, Faisalabad; Munir-ul-Haq (Senior Auditor/BS-16), Regional Tax Office, Hyderabad; Zulfiqar Ali Magsi, (Inspector-IR/BS-16), Regional Tax Office, Sukkur; Muhammad Arslan Yaqoob (UDC/BS-13), Corporate Tax Office, Lahore; Syed Mansoor Hussain Yousifzai (UDC/BS-13), Regional Tax Office Hyderabad and Saqlain Haider (LDC/BS-11), Regional Tax Office, Faisalabad. Permanent posting of the staff in the previous season resulted in controlling the smuggling of sugar, which brought about drastic reduction in sugar price and the hording of sugar was controlled because of adequate supply. During the current crushing and production season of 2024-25 the Federal Board of Revenue has intensified its efforts to ensure compliance with tax laws and has taken strict action against irregularities in sugar mills across Pakistan. These nine officers/ officials of the Federal Board of Revenue, who were found to be involved in malpractice and were working in connivance with the mills to evade taxes have been suspended on the credible information and the reports from the monitoring agencies. Copyright Business Recorder, 2024

Date: 2024-12-17

Details: December 17, 2024 Karachi, December 17, 2024 â€“ The Federal Board of Revenue (FBR) has issued a detailed clarification on the treatment of sales tax when there is a change in the applicable tax rate. This clarification is designed to provide clear guidance to taxpayers and ensure uniform compliance. The FBR stated that the procedure for handling changes in the tax rate is explicitly outlined in Section 5 of the Sales Tax Act, 1990. This section establishes the framework for determining the applicable tax rate based on the timing and circumstances of supply or importation. Key Provisions on Tax Rate Changes: 1. Taxable Supplies: o For taxable supplies made by registered persons, the applicable tax rate will be the rate in effect at the time of the supply. 2. Imported Goods: o For goods entered for home consumption, the applicable tax rate will be the rate in effect on the date the goods declaration is presented under Section 79 of the Customs Act, 1969. o For goods cleared from a warehouse, the applicable tax rate will be the rate in effect on the date the goods declaration for clearance is presented under Section 104 of the Customs Act, 1969. Special Provisions: â€¢ If a goods declaration is presented in advance of the arrival of the conveyance transporting the goods, the tax rate will be the one in effect on the date the manifest of the conveyance is submitted. â€¢ If the tax is not paid within seven days of the goods declaration under Section 104 of the Customs Act, 1969, the applicable tax rate will be the one in effect on the actual date of payment. This clarification emphasizes the importance of timing in determining the tax rate, ensuring that taxpayers can accurately calculate their liabilities in accordance with the prevailing laws. The FBRâ€™s guidance provides much-needed clarity and reduces the potential for disputes arising from rate changes. The FBR has urged taxpayers to familiarize themselves with these provisions and comply accordingly to avoid penalties or delays in the clearance of goods. This directive is effective immediately and aligns with the FBRâ€™s efforts to streamline tax administration and enhance transparency.

Date: 2024-12-17

Details: December 17, 2024 Islamabad, December 17, 2024 â€“ The Federal Board of Revenue (FBR) has taken a significant step toward enhancing transparency and compliance by integrating the Fast-Moving Consumer Goods (FMCG) sector with its digital invoicing system. This initiative aims to streamline tax collection and improve documentation within the sector. To implement this integration, the FBR issued Sales Tax General Order (STGO) No. 2 of 2024 on December 17, 2024. The order builds upon the earlier notification SRO 28(1)/2024, dated January 10, 2024, which mandated that all registered entities within the FMCG value and supply chain install an electronic invoicing system as specified under Chapter XIV of the Sales Tax Rules, 2006. The FBR explained that a phased, system-based approach will be used to operationalize these provisions. In Phase 1, FMCG manufacturers and importers will be integrated into the digital invoicing system. To this end, a list of 107 identified FMCG manufacturers and importers, referred to as integrated suppliers, has been published on the FBRâ€™s official web portal. These entities are required to complete the integration process by December 31, 2024. Entities that believe they are not part of the FMCG manufacturing or importing category may apply for exclusion from this list. Such requests must be submitted to the relevant Commissioner of Inland Revenue (IR), who will issue an exclusion certificate upon verification. Subsequently, all exclusion certificates will be forwarded to the IR Operations Wing of the FBR. To ensure smooth implementation, Chief Commissioners-IR are tasked with appointing dedicated focal persons to coordinate with PRAL (Pakistan Revenue Automation Limited) and achieve the integration targets. Additionally, these officials must submit weekly progress reports to the IR Operations Wing. This initiative underscores the FBRâ€™s commitment to modernizing tax administration and ensuring compliance across key economic sectors. The order, approved by the Member (IR-Operations), is effective immediately and is expected to bolster transparency and efficiency in tax collection within the FMCG sector.

Date: 2024-12-16

Details: Islamabad, December 16, 2024 â€“ Finance Minister Muhammad Aurangzeb has commended the formal sector for shouldering the brunt of front-loaded tax measures introduced under the governmentâ€™s economic stabilization program. Speaking at a meeting with the Pakistan Business Council (PBC), Aurangzeb assured that the government would ease this burden as fiscal conditions improve. During his visit to the PBC, Aurangzeb, accompanied by his advisor Khurram Shehzad, engaged in a detailed discussion on the economy. He highlighted significant progress in reducing the twin deficits and shared measures aimed at making the ongoing International Monetary Fund (IMF) program the last one Pakistan would require. PBC Chairman Shabbir Diwan praised the strides made in economic stability over the past nine months. He emphasized the contributions of PBC members, who collectively pay a third of direct taxes, generate 40% of Pakistanâ€™s exports, and create employment opportunities for millions in their value chains. Aurangzeb acknowledged these efforts, reiterating his appreciation for the formal sectorâ€™s sacrifices and its role in driving economic progress. Aurangzeb lauded the quality of PBCâ€™s research, particularly its objective advocacy on taxation and its â€œMake-in-Pakistanâ€ initiative. He specifically praised a PBC report distinguishing between beneficial and harmful foreign direct investment (FDI). Members of the PBC offered valuable recommendations, including promoting exports of nontraditional goods and utilizing the countryâ€™s underutilized production capacity. Discussions also touched upon Pakistanâ€™s textile industry, with the PBC urging the government to negotiate lower tariffs on apparel exports to the United States, particularly those made from US cottonâ€”a commodity for which Pakistan is now a leading importer. Aurangzeb acknowledged the need to review the Export Facilitation Scheme to allow domestic industries to supply exporters without incurring sales tax. Additionally, he agreed to examine reducing the 2% withholding tax on export receipts for low-margin items. On import substitution, Aurangzeb highlighted progress made by the fast-moving consumer goods (FMCG) sector in indigenizing inputs. However, he cautioned against indefinite protectionism and advocated support for industries meeting export sales targets. Addressing taxation, the minister emphasized the need to level the playing field between the formal and informal sectors and sought the formal sectorâ€™s assistance in identifying tax evaders. Aurangzeb further outlined ongoing reforms in the Federal Board of Revenue (FBR), including integrating advanced technology to broaden the tax base. Concluding the session, he requested PBC CEO Ehsan Malik to summarize the discussion and compile membersâ€™ proposals for further consideration. This wide-ranging interaction underscores Aurangzebâ€™s commitment to fostering public-private collaboration in driving Pakistanâ€™s economic recovery and growth.

Date: 2024-12-16

Details: Karachi, December 16, 2024 â€“ The Federal Board of Revenue (FBR) has issued a detailed list of goods eligible for zero-rating of sales tax for the tax year 2025. This development aligns with Section 4 of the updated Sales Tax Act, 1990, which specifies the categories of goods entitled to this concession. Zero-Rating of Sales Tax: Key Provisions According to the FBR, the following goods will be subject to a zero percent sales tax rate, notwithstanding the provisions of Section 3, except for sub-section (1A): 1. Exported Goods and Fifth Schedule Items o Goods exported out of Pakistan or specified in the Fifth Schedule of the Sales Tax Act, 1990, will qualify for zero-rating. 2. Supplies for Conveyances o The supply of stores and provisions for consumption aboard conveyances proceeding to destinations outside Pakistan, as specified under Section 24 of the Customs Act, 1969 (IV of 1969), is included. 3. Goods Specified by Federal Government Notifications o The Federal Government may designate additional goods for zero-rating through notifications in the official Gazette, particularly in circumstances requiring immediate action. These include situations related to national security, natural disasters, national food security in emergencies, or the implementation of bilateral and multilateral agreements. Conditions and Restrictions The FBR has clarified that zero-rating will not apply in the following cases: â€¢ Re-imported Goods o Goods exported but intended to be re-imported into Pakistan are excluded. â€¢ Unexported Goods o Goods entered for export under Section 131 of the Customs Act, 1969, but not actually exported, do not qualify. â€¢ Exports to Specific Countries o Goods exported to countries specified by the Federal Government via notification in the Gazette are also excluded. Additionally, the Federal Government reserves the right to restrict the credit for input tax paid and claimed by individuals making zero-rated supplies of goods otherwise subject to sales tax. FBRâ€™s Focus on Compliance The FBR has reiterated its commitment to ensuring compliance with the updated Sales Tax Act. By clearly defining the criteria and limitations for zero-rated goods, the FBR aims to streamline the process and prevent misuse of this facility. Officials encourage taxpayers to stay informed and adhere to these provisions to avoid potential penalties. With these measures, the FBR underscores its role in balancing tax concessions with national economic interests and regulatory compliance.

Date: 2024-12-16

Details: Karachi, December 16, 2024 â€“ The Large Taxpayers Office (LTO) Karachi achieved a groundbreaking milestone, collecting a record Rs 1.11 trillion in the first five months of the fiscal year 2024-25 (Julyâ€“November). This marks a remarkable 20% growth compared to the Rs 924 billion collected during the same period in the previous fiscal year. Gross tax collection for LTO Karachi during this period reached Rs 1.16 trillion, with refunds amounting to Rs 47 billion issued to taxpayers. As the largest revenue-collecting arm of the Federal Board of Revenue (FBR), LTO Karachi maintained robust growth across all tax categories under its jurisdiction, further strengthening its position as a key driver of national revenue. Direct tax collection remained the cornerstone of LTO Karachiâ€™s performance, with Rs 542 billion collected during the Julyâ€“November period, a 20% increase from Rs 451 billion in the same months of the previous fiscal year. Refunds issued under direct taxes also rose significantly to Rs 18.53 billion, compared to Rs 3.67 billion in the corresponding period last year. The office anticipates continued growth in direct tax revenues, bolstered by the exceptional performance of the corporate sector in the current fiscal year. Under indirect taxes, sales tax collections recorded an 18% growth, amounting to Rs 494 billion, up from Rs 420 billion in the previous fiscal year. Sales tax on domestic transactions posted a striking 30% growth, reaching Rs 203 billion. However, challenges persisted in collecting sales tax at the import stage due to a reduced import bill. Despite this, sales tax at the import stage rose by 6%, with collections totaling Rs 314 billion compared to Rs 296 billion in the corresponding period last year. Federal Excise Duty (FED) collection also showcased exceptional performance, increasing by an impressive 45% to Rs 76.46 billion during the first five months of 2024-25, compared to Rs 52.60 billion in the same period last year. LTO Karachiâ€™s consistent growth across all tax categories underscores its pivotal role in Pakistanâ€™s fiscal framework. With improving corporate sector performance and strategic tax measures, the office is poised for continued success in the remainder of the fiscal year.

Date: 2024-12-16

Details: Karachi, December 16, 2024 â€“ The Federal Board of Revenue (FBR) has reaffirmed December 31, 2024, as the final deadline for corporate entities to file their income tax returns for the tax year 2024. A senior official emphasized that the date will not be extended further, urging companies to fulfill their obligations promptly to avoid penalties. Filing Guidelines under Section 118 of the Income Tax Ordinance, 2001 The FBR has outlined comprehensive guidelines for corporate taxpayers under Section 118 of the Income Tax Ordinance, 2001. Companies are required to adhere to the following directives: 1. Mandatory Filing Requirements o A return of income under Section 114, a wealth statement under Section 116, or a foreign income and assets statement under Section 116A, if applicable, must be submitted as prescribed. 2. Specific Deadlines o For companies with a tax year ending between January 1 and June 30, the return must be filed by December 31 of the following year. o For all other cases, the filing deadline is September 30 of the subsequent year. 3. Electronic Filing Mandate o Taxpayers with salary income exceeding PKR 500,000 are required to file their returns electronically. Submissions must include proof of tax deduction or payment, as well as wealth statements or foreign income and asset declarations where applicable. Key Provisions and Consequences of Non-Compliance â€¢ Wealth Statements and Notifications o Wealth statements must be submitted by the specified due date or the return filing deadline, as required. â€¢ Returns by Non-Registered Taxpayers o Taxpayers without a National Tax Number (NTN) must register alongside filing their returns. Submissions without NTN registration will be deemed invalid under Sub-section (6) of the Ordinance. FBRâ€™s Message to Taxpayers The FBR has reiterated the importance of timely compliance, urging corporate entities to utilize e-portal services for efficient and error-free submissions. Officials stress that adherence to the deadline reflects a companyâ€™s commitment to transparency and contributes to the national exchequer. Compliance and Strategic Importance Corporate tax compliance plays a critical role in fostering economic stability and maintaining trust between businesses and regulatory authorities. The December 31 deadline offers companies ample time to consolidate financial records and ensure accurate filings. This announcement underscores the FBRâ€™s dedication to enforcing tax regulations and streamlining compliance. Businesses are encouraged to act promptly to avoid penalties and maintain good standing with tax authorities as the tax year concludes.

Date: 2024-12-15

Details: Karachi, December 15, 2024 â€“ The Federal Board of Revenue (FBR) has announced a significant tax policy revision, imposing a 24% advance income tax on brokerage commissions earned by individuals not included in the Active Taxpayers List (ATL) for the tax year 2025. This move aims to ensure compliance and widen the tax net. According to the FBRâ€™s updated tax rate card for the tax year 2024, persons listed on the ATL are subjected to an advance income tax of 12% on brokerage commissions. However, this rate is doubled for those not on the ATL, pushing it to 24%. The provision is intended to encourage greater tax compliance and penalize non-ATL persons. Brokerage and commissions are taxed under Section 233 of the Income Tax Ordinance, 2001. The ordinance specifies that commission earned by advertising agents is taxed at a rate of 10% for ATL-listed individuals and 20% for those not on the ATL. In another case, life insurance agents earning less than Rs. 0.5 million annually are subject to an 8% tax if listed on the ATL. For non-ATL individuals, this rate is increased to 16%. Key Provisions under Section 233 1. Scope of Brokerage and Commission: Payments on account of brokerage or commission by entities such as the federal or provincial government, local authorities, companies, or associations with a turnover exceeding Rs. 100 million must deduct advance tax at the prescribed rates. This deduction applies to both ATL and non-ATL persons. 2. Retention by Agents: When an agent retains brokerage or commission from amounts remitted to the principal, it is deemed that the commission has been paid by the principal. The FBR mandates the principal to collect advance tax from the agent in such cases. 3. Tax on Advertising Agents: Principals making payments to advertising agents, directly or through media channels, must deduct tax at the rates specified under Division II of Part IV of the First Schedule. This is in addition to other applicable deductions, ensuring comprehensive tax compliance. 4. Minimum Tax Clause: The tax deducted under Section 233 is treated as the minimum tax on the income of advertising agents or other individuals earning brokerage or commission. By doubling tax rates for non-ATL persons, the FBR underscores its commitment to fostering accountability within the tax regime. The measure also aims to ensure equitable taxation across sectors and enhance revenue collection efficiency. The FBRâ€™s stringent enforcement of these regulations is expected to deter tax evasion while promoting a more inclusive fiscal framework. Taxpayers are urged to comply with ATL requirements to benefit from reduced tax rates and avoid penalties under the updated regime. The FBRâ€™s consistent emphasis on broadening the tax base highlights its role in strengthening Pakistanâ€™s economic stability and governance.

Date: 2024-12-15

Details: Karachi, December 15, 2024 â€“ The Federal Board of Revenue (FBR) has clarified the treatment for the collection of excess sales tax, as outlined in Section 3B of the Sales Tax Act, 1990. This section addresses scenarios where excess tax is collected from consumers, whether due to misinterpretation of legal provisions or other reasons. Key Provisions of Section 3B According to the FBR, the following rules apply: 1. Obligation to Pay Excess Tax to the Federal Government: Sub-section (1) mandates that any person who collects sales tax, either mistakenly or otherwise, and passes the burden onto consumers, must remit the excess tax to the Federal Government. The FBR emphasized that this applies irrespective of whether the tax was initially payable or not. 2. Recovery of Excess Tax as Arrears: Sub-section (2) states that any excess tax collected will be treated as arrears of tax. The FBR clarified that this amount is recoverable under the Sales Tax Act, 1990, and no refund claims will be entertained. Furthermore, such claims cannot be pursued in any court, including the Supreme Court or High Courts. 3. Burden of Proof on the Collector: Under sub-section (3), the burden of proving whether the tax incidence was passed on to consumers lies with the person who collected the tax. The FBR highlighted the importance of maintaining accurate records and documentation to substantiate such claims. FBRâ€™s Oversight and Enforcement The FBR has reiterated its commitment to ensuring compliance with these provisions. Businesses are urged to adhere strictly to the Sales Tax Act, 1990, and avoid any practices that could lead to the collection of excess tax. The FBRâ€™s enforcement mechanisms will include audits and penalties for non-compliance. By providing these clarifications, the FBR aims to safeguard consumer rights while reinforcing tax compliance. Businesses are advised to regularly consult FBR notifications and guidelines to avoid potential legal and financial repercussions. Implications for Businesses The FBRâ€™s stance on excess tax collection underscores the importance of transparency and adherence to tax laws. Companies are encouraged to conduct periodic reviews of their tax collection processes to ensure alignment with FBR regulations. Failure to comply may result in penalties, legal disputes, and reputational damage. The FBRâ€™s proactive approach reflects its broader goal of fostering accountability and protecting the interests of consumers in Pakistanâ€™s tax framework.

Date: 2024-12-15

Details: Karachi, December 15, 2024 â€“ Pakistan has maintained its regular sales tax rate at 18% for the tax year 2025. This decision aligns with the Federal Board of Revenueâ€™s (FBR) directive, following the increase in the sales tax rate from 17% to 18% introduced through the Finance (Supplementary) Act, 2023. The sales tax framework is governed by Section 4 of the Sales Tax Act, 1990, which outlines the scope and applicability of this tax. It stipulates that the tax is charged, levied, and paid at the rate of 18% on: 1. Taxable supplies made by a registered person in the course or furtherance of any taxable activity. 2. Goods imported into Pakistan, irrespective of their final destination within the country. Additional Tax for Unregistered Entities An additional tax of 4% is levied on taxable supplies made to entities or individuals who are not registered taxpayers, as outlined in subsection (1A). However, the Federal Government retains the authority to exempt certain taxable supplies from this additional tax via official notifications. Specialized Tax Provisions Section 4 also includes provisions for specific goods and industries. For instance: 1. Tenth Schedule: Tax on goods listed under this schedule can be levied based on production capacity or on a fixed basis, depending on the nature of the business. Different rates may apply across regions or industries. 2. Third and Eighth Schedules: Goods specified in these schedules are taxed at varying rates. For items in the Third Schedule, an 18% tax is levied on the retail price, which must be prominently displayed on packaging by manufacturers or importers. Items in the Eighth Schedule may have varying rates subject to conditions and limitations. The Act grants the Federal Government authority to adjust tax rates, collection methods, and applicability through notifications in the official Gazette. Tax Liability and Collection Tax liability is assigned as follows: 1. For the supply of goods: The supplier is responsible for tax payment. 2. For imported goods: The importer bears the tax liability. In certain cases, such as goods specified in the Ninth Schedule, the liability to charge, collect, and pay tax is explicitly outlined, including special rates and procedures. Special Rules for Retailers The Sales Tax Act imposes unique conditions on retailers: 1. Electricity Billing: Non-Tier-1 retailers are taxed via their monthly electricity bills at rates of 5% (bills under PKR 20,000) and 7.5% (bills exceeding PKR 20,000). These rates are in addition to standard electricity supply taxes. Tier-1 retailers must integrate their retail systems with the FBRâ€™s computerized system for real-time sales reporting. 2. Minimum Production Requirements: The Thirteenth Schedule mandates minimum production levels for certain goods. If actual production falls short, the minimum production is treated as the taxable quantity for the month. Sector-Specific Applications The Federal Government exercises significant flexibility in implementing sales tax provisions for specific sectors. For instance, natural gas supplied to CNG stations is taxed at 18% of the value supplied, while the electricity provider is tasked with collecting tax from CNG stations based on consumption levels. Policy Implications By maintaining the sales tax rate at 18%, the government aims to ensure steady revenue generation amidst fiscal challenges. This rate adjustment reflects the broader goals of tax rationalization and compliance improvement. However, the impact on inflation and consumer spending will require careful monitoring. The FBR has emphasized its commitment to streamlining tax collection mechanisms and broadening the tax base. Through a combination of policy clarity and technological integration, the board aims to improve compliance and reduce tax evasion. Notifications and exemptions granted under the Act provide flexibility but also necessitate vigilant oversight to prevent misuse. In conclusion, the decision to retain the 18% sales tax rate underscores Pakistanâ€™s efforts to stabilize its fiscal framework while balancing the needs of businesses and consumers. The detailed provisions of the Sales Tax Act, 1990, provide a robust structure for tax administration, ensuring consistency and adaptability in a dynamic economic landscape.

Date: 2024-12-15

Details: Islamabad â€“ The Federal Board of Revenue (FBR) has intensified its enforcement efforts to combat tax evasion in the sugar industry, launching a series of operations against non-compliant sugar mills in Punjab and Sindh. As part of these actions, the FBR has sealed several mills, confiscated unstamped sugar stocks, and suspended nine officials implicated in malpractice and connivance with mills to evade taxes. On the directives of Prime Minister Shehbaz Sharif, the FBR introduced an improved production monitoring system at the start of the 2024-25 sugarcane crushing season. This system employs five layers of oversight, including track-and-trace stamps, automated bag-counting hoppers, video surveillance, digital eye-counting technology, an electronic invoicing system for sugar dispatches, and the physical presence of FBR staff to oversee production and sales. Additional monitoring by the Federal Investigation Agency (FIA) and Intelligence Bureau (IB) ensures transparency. To enhance the systemâ€™s efficacy, integrated CCTV cameras and random inspections by senior officers and the Inland Revenue Enforcement Network are in place. Law enforcement agencies, including police and Pakistan Rangers, provide additional support to ensure strict compliance. This season, Pakistanâ€™s sugar sector, which comprises 80 operational mills, expects a sugarcane crop of 70 million metric tons, producing over 7 million metric tons of sugar. With over 1 million metric tons of opening stock, the country is poised to meet domestic demand while exporting sugar, molasses, and ethanol to bolster foreign exchange reserves. The permanent deployment of FBR staff during the last season curbed sugar smuggling, stabilized prices, and mitigated hoarding. Key Enforcement Actions In Punjab, a large sugar mill was sealed by LTO Lahore for failing to install required cameras and hand over the Network Video Recorder (NVR). Similarly, godowns of another mill in Khushab District were sealed for inspection of unstamped sugar bags. Investigations are ongoing, and further legal actions are expected. In Sindh, the Deputy Commissioner Inland Revenue (DCIR) of LTO Karachi discovered a concealed production chute at a mill in Shaheed Benazirabad district, hidden behind a high brick wall. The undeclared chute, evading FBRâ€™s monitoring system, was sealed, and 1,200 metric tons of sugar were confiscated. A hefty penalty of Rs. 25 million was imposed. In Mirpurkhas Division, the FBR sealed production chutes at a mill that violated sales tax rules by withholding its NVR. The mill paid a penalty of Rs. 0.5 million for de-sealing. A separate case in Tando Allahyar revealed that a mill disconnected its chutes from the monitoring system. FBR promptly seized 150 metric tons of non-tax-paid sugar and impounded five vehicles transporting it. Additionally, nine FBR officials involved in collusion with mills were suspended following credible reports from monitoring agencies. The FBR reaffirmed its zero-tolerance policy toward tax evasion and emphasized its commitment to safeguarding government revenue. These actions reflect a broader campaign to ensure compliance within the sugar industry and uphold transparency in tax enforcement.

Date: 2024-12-14

Details: Karachi, December 14, 2024 â€“ The Federal Board of Revenue (FBR) has announced the launch of the Faceless Customs Assessment (FCA) System, which will be operational from December 15, 2024, in Karachi. This initiative, part of the FBRâ€™s Transformation Plan approved by the Prime Minister of Pakistan, aims to revolutionize the customs assessment process. According to the FBR, all import goods declarations filed after 12:00 AM in the Appraisement Collectorates of Karachi will be directed to the newly established Central Appraising Unit (CAU) for assessment. The CAU, located at the South Asia Pakistan Terminal in Karachi, was set up in accordance with CGO No.6 of 2024, recently issued by the FBR. The introduction of the FCA System is expected to bring significant improvements to the Customs departmentâ€™s operations. By reducing clearance times and increasing efficiency and transparency in assessments, the system will facilitate trade and enhance the overall customs experience. Following the successful implementation of this system in Karachi, the FBR plans to extend it to upcountry ports and border stations. The appraisement function of Customs will be relocated outside the Customs Collectorates, and all necessary arrangements have already been finalized. The CAU has been equipped with a sanitized environment for appraisers and principal appraisers, with 55 officers already posted to ensure smooth operations. To enhance productivity and ensure accountability, an incentive-based performance management mechanism has been introduced for customs appraising officers stationed at the CAU. This system rewards officers who demonstrate diligence and integrity in their duties, fostering a culture of responsibility and efficiency. In addition, the FBR has revamped the eligibility criteria and licensing regime for Customs Clearing Agents. A new points-based scoring system will be implemented to ensure accuracy and quality in declarations. Agents providing honest and accurate descriptions, values, and origins of goods will earn higher scores, improving their profiles. Conversely, agents who fail to meet the required standards will lose points, and repeated underperformance could lead to license cancellations. The FCA System marks a critical step towards modernizing Pakistanâ€™s customs processes, ensuring transparency, and fostering a trade-friendly environment.

Date: 2024-12-14

Details: Karachi, December 14, 2024 â€“ The Federal Board of Revenue (FBR) has taken decisive disciplinary action by suspending nine officials of the Inland Revenue (IR) department over alleged violations of the code of conduct. According to an official notification issued by the FBR on Saturday, the suspensions were implemented under Rule 5(1) of the Civil Servants (Efficiency & Discipline) Rules, 2020. The competent authority approved the suspension of these officials for an initial period of 120 days or until further orders, whichever comes first. The suspended officials belong to various Regional Tax Offices (RTOs) across the country, highlighting the FBRâ€™s commitment to maintaining discipline and upholding professional standards across its ranks. The notification emphasized that this action is part of the FBRâ€™s broader efforts to ensure accountability within the organization. The list of suspended officials includes: 1. Muhammad Mohsin Khan, Inland Revenue Officer (BS-17), RTO-I, Karachi 2. Arshad Mahmood, Inland Revenue Officer (BS-17), RTO-I, Karachi 3. Ubaidullah Buksh, Inspector-IR (BS-17), RTO, Hyderabad 4. Sarfraz Ahmad, Office Superintendent (BS-16), RTO, Faisalabad 5. Munir-ul-Haq, Senior Auditor (BS-16), RTO, Hyderabad 6. Zulfiqar Ali Magsi, Inspector-IR (BS-16), RTO, Sukkur 7. Muhammad Arslan Yaqoob, UDC (BS-13), Corporate Tax Office, Lahore 8. Syed Mansoor Hussain Yousifzai, UDC (BS-13), RTO, Hyderabad 9. Saqlain Haider, LDC (BS-11), RTO, Faisalabad The FBRâ€™s decision to suspend these officials underscores its zero-tolerance policy toward misconduct and non-compliance with professional ethics. By addressing such issues promptly, the FBR aims to reinforce integrity within its workforce and improve public trust in its operations. The Inland Revenue department plays a crucial role in ensuring tax compliance and revenue collection. Therefore, the FBRâ€™s swift action against erring officials is intended to send a clear message that unethical behavior will not be tolerated. This development highlights the FBRâ€™s ongoing reforms to strengthen governance, transparency, and accountability within the organization, aligning with its mandate to facilitate fair tax administration in Pakistan.

Date: 2024-12-13

Details: Karachi, December 13, 2024 â€“ The Federal Board of Revenue (FBR) has issued detailed instructions to all Chief Commissioners of Inland Revenue (CCIRs) regarding the issuance of notices for unexplained income. These guidelines emphasize the procedural requirements that must be adhered to before initiating proceedings for amending tax assessments. In a communication with the CCIRs, the FBR underscored the necessity of issuing a separate notice or initiating proceedings under Section 111 of the Income Tax Ordinance, 2001, before any amendments are made under Section 122 of the Ordinance. This directive follows recent legal precedents set by superior courts. The FBR highlighted a key judgment by the Lahore High Court (Rawalpindi Bench) in â€œZubair Khan Versus Commissioner Inland Revenue Jhelum Zoneâ€ (2024 PTD 1112). The court ruled that invoking the provisions of Section 122 requires the prior issuance of a separate notice under Section 111 to include unexplained income or assets in taxable income. A notice under Section 122(9) alone is insufficient for this purpose. Additionally, the FBR referenced earlier rulings reinforcing this position, including â€œCommissioner Inland Revenue, T.R.O.â€™ Faisalabad v. Faqir Hussain and anotherâ€ (2019 PTD 1828) and â€œCommissioner Inland Revenue, Multan Zone v. Falah ud Din Qureshiâ€ (2021 PTD 192). Both judgments confirmed that a specific notice under Section 111 is mandatory for additions related to unexplained income or assets. In a recent Supreme Court judgment, â€œThe Commissioner Inland Revenue v. Millat Tractors (Ltd)â€ (2024 SCMR 700), it was conclusively held that no addition under Section 111 can be made during an amended order under Section 122 without separate proceedings initiated through a notice under Section 111. To ensure compliance, the FBR outlined a four-step procedure for taxation officers: 1. Issue a specific show-cause notice under Section 111 where applicable. 2. After receiving the taxpayerâ€™s reply, pass a speaking order under Section 111, explicitly stating the relevant clause for the addition. 3. Serve another show-cause notice under Section 122(9) confronting the conclusions from the Section 111 order, along with other legal violations. 4. After receiving the reply, issue a speaking order amending the deemed assessment order. The FBR emphasized that these instructions, based on Supreme Court judgments, are binding on all officers and appellate forums. Non-compliance with these directives will be viewed seriously. The FBR advised all assessing officers to strictly adhere to these instructions to ensure quality and legally sound tax orders in the interest of revenue collection.

Date: 2024-12-13

Details: Karachi, December 13, 2024 â€“ Banks in Pakistan are under significant pressure to meet Advance to Deposit Ratio (ADR) ratios and are now offering loans below market rates to address this challenge. According to a research report by Insight Securities (Pvt) Limited, domestic banks have enjoyed robust profits over the past two years, driven by record-high interest rates and resilient asset quality. These factors enabled them to navigate macroeconomic challenges effectively. However, the faster-than-expected decline in inflation and subsequent reduction in the policy rate have put pressure on the sectorâ€™s Net Interest Margins (NIMs). Compounding this issue is the ADR tax, which has become a contentious topic between banks and regulators. While banks have challenged this tax in courts and secured stay orders, it continues to be levied on their balance sheets. To meet ADR targets, banks have resorted to strategies such as shedding high-cost deposits and offering loans at below-market rates, leading to market distortions rather than promoting meaningful private sector lending. The trend is evident in the surge in advances, particularly after September 2024, which coincided with lower interest rates and a degree of economic stability. However, a significant portion of this increase appears to stem from banksâ€™ efforts to meet year-end ADR requirements. This is further corroborated by declining deposit volumes during the same period. Such taxation measures fail to generate substantial revenue for the government or stimulate private sector growth effectively. The formation of a committee, led by Deputy Prime Minister and Foreign Minister Ishaq Dar, underscores the importance of resolving these issues. The committeeâ€™s mandate includes reviewing the legal framework for fiscal measures related to ADR, exploring alternative taxation schemes on bank profits from government securities, and collaborating with the banking sector and the Federal Board of Revenue (FBR) to develop consensus-driven solutions. Approximately 70% of the banking sectorâ€™s profitability is derived from government securities. Any changes in taxation on this front are likely to erode profitability further. Insight Securities suggests shifting from a year-end ADR threshold to an average basis, which would encourage systematic private sector credit flow. This approach would allow banks to base lending on strategic and risk considerations rather than year-end compliance efforts. Tax collection challenges remain critical, especially under the IMF program where revenue targets are stringent. In this context, the government might consider directly increasing the tax rate on the banking sector, given its reliance on income from government securities. According to estimates, a 10% additional tax could reduce the sectorâ€™s profitability by approximately 19%, highlighting the delicate balance required in addressing fiscal and economic goals

Date: 2024-12-12

Details: The Federal Board of Revenue (FBR) has clarified the definition of Tier-1 retailers as outlined under the Sales Tax Act, 1990. This classification is significant for taxation purposes, particularly regarding compliance and documentation requirements. According to the FBR, Tier-1 retailers include any retailer that meets one or more of the following criteria: 1. National or International Chain Stores: Retailers that are part of a national or international chain of stores are classified as Tier-1. This includes brands and franchises operating across multiple locations. 2. Retailers in Air-Conditioned Malls or Plazas: Those operating within air-conditioned shopping malls, plazas, or centersâ€”excluding kiosksâ€”fall under this category. 3. High Electricity Consumption: Retailers whose cumulative electricity bill for the preceding 12 consecutive months exceeds PKR 1,200,000 are categorized as Tier-1. This criterion serves as a proxy for identifying larger-scale operations. 4. Wholesaler-Cum-Retailers: Businesses engaged in both bulk imports and wholesale supplies of consumer goods, as well as direct retail sales to consumers, qualify as Tier-1 retailers. 5. Point-of-Sale (POS) Systems: Retailers who have installed point-of-sale systems for accepting payments via debit or credit cards or through digital payment service providers authorized by the State Bank of Pakistan are also included. 6. Withholding Tax Thresholds: Retailers whose deductible withholding tax under Sections 236G or 236H of the Income Tax Ordinance, 2001, exceeds thresholds specified by the FBR are considered Tier-1. 7. Other Criteria as Specified: Any other individuals or classes of persons designated by the FBR through official notification may also be classified as Tier-1 retailers. The classification of Tier-1 retailers is designed to enhance transparency and ensure tax compliance, particularly for businesses operating on a larger scale. Such retailers are subject to specific documentation and filing requirements, including the integration of their POS systems with the FBRâ€™s real-time sales monitoring system. This framework allows the government to streamline revenue collection, reduce tax evasion, and promote fair taxation practices. Businesses classified under Tier-1 are advised to familiarize themselves with these obligations to avoid penalties and ensure smooth operations.

Date: 2024-12-12

Details: Karachi, December 12, 2024 â€“ The Federal Board of Revenue (FBR) has clarified the concept of â€œtime of supplyâ€ for the collection of sales tax, eliminating ambiguities that previously existed among taxpayers and businesses. The FBR explained that the definition and rules governing the time of supply are detailed in the updated Sales Tax Act, 1990, applicable to the tax year 2025. Understanding the time of supply is crucial for businesses to determine when sales tax should be calculated and reported. As per the FBR, the time of supply is defined as follows: 1. For Goods (Except Under Hire Purchase Agreements): The time of supply is either when the goods are delivered or made available to the recipient or when the supplier receives any payment for the goods, whichever occurs earlier. 2. For Goods under Hire Purchase Agreements: The time of supply is when the hire purchase agreement is entered into, regardless of the timing of delivery or payment. 3. For Services: The time of supply is when the services are rendered or provided to the recipient. Additionally, the FBR provided further guidance for scenarios involving part payments: â€¢ For Taxable Supplies: Any part payment received within a tax period must be included in the return for that tax period. â€¢ For Exempt Supplies: If a part payment pertains to an exempt supply, it should be included in the return for the tax period in which the exemption is withdrawn. These clarifications are intended to assist taxpayers in meeting compliance requirements and avoid errors in sales tax reporting. The provisions ensure that the timing of tax collection aligns with actual business transactions, reducing discrepancies and improving transparency. Businesses and taxpayers are encouraged to familiarize themselves with these updated guidelines to streamline their tax submissions and maintain accurate records. The FBR reiterated its commitment to providing clear regulations to facilitate compliance and reduce administrative complexities for taxpayers across Pakistan. For further inquiries, taxpayers are advised to consult the updated Sales Tax Act, 1990, or seek professional tax advice to ensure proper implementation of these rules.

Date: 2024-12-12

Details: ISLAMABAD â€“ Chairman Federal Board of Revenue (FBR) Rashid Mahmood Langrial clarified the issue of Federal Excise Duty (FED) on imported electric vehicles (EVs) and hybrid electric vehicles (HEVs) during a briefing to the Senate Standing Committee on Finance and Revenue. He stated that the Ministry of Law would determine whether imported SUVs, including those classified as EVs and HEVs, fall under the 30% FED category. Speaking to the committee on Wednesday, the FBR chairman explained that, under Serial No. 55C of Table-1 in the First Schedule of the Federal Excise Act, 2005, imported double-cabin (4Ã—4) pickup vehicles are subject to a 30% FED ad valorem. This provision applies to all types of double-cabin pickups, regardless of engine type or capacity. However, the Senate Standing Committee noted discrepancies in the interpretation of the law. It pointed out that Serial No. 55C does not explicitly mention EVs or HEVs in the description of taxable goods. Furthermore, the PCT codes referenced in this provision do not apply to double-cabin EVs or HEVs, raising doubts about the applicability of FED on such vehicles. To address this ambiguity, the Senate Standing Committee directed the FBR to seek a formal legal opinion from the Ministry of Law. This step aims to resolve the differing interpretations and provide clarity on the chargeability of FED for these categories of vehicles. The issue has broader implications for Pakistanâ€™s automotive sector, as the government seeks to promote the adoption of EVs and HEVs to reduce environmental impact and fuel dependency. A clear interpretation of the law will help streamline import policies and support the industryâ€™s transition to greener alternatives. In addition to this discussion, the FBR chairman highlighted staffing updates within customs field formations. He mentioned that 1,642 posts designated for customs recruitment are to be filled based on provincial and regional domicile, underscoring the organizationâ€™s focus on enhancing operational capacity. The resolution of this legal issue will not only provide clarity for importers and manufacturers but also ensure that Pakistanâ€™s taxation policies align with its sustainability goals. The Ministry of Lawâ€™s interpretation is eagerly awaited to settle the matter definitively.

Date: 2024-12-12

Details: Islamabad, December 12, 2024 â€“ Prime Minister Shehbaz Sharif has taken decisive action against sales tax fraud by forming a high-powered joint inquiry team to investigate and address this pressing issue. According to a statement from the Prime Ministerâ€™s Office, the team has been constituted with immediate effect and comprises the following members: 1. Musadiq A. Malik, Federal Minister â€“ Convener 2. Bilal A. Kayani, Member of National Assembly (MNA) â€“ Member 3. Tanvir Akhtar Malik, Member of the Federal Board of Revenue (FBR) â€“ Member 4. Ghazi Akhtar Khan â€“ Member 5. Dr. Fareed Zafar â€“ Member 6. Representative of the Intelligence Bureau (IB) â€“ Member 7. Munir Masood Marath, Director/ADG (North), Federal Investigation Agency (FIA) â€“ Member 8. Representative of the Financial Monitoring Unit (FMU) â€“ Member 9. Amir Abbas Khan, Director Intelligence and Investigation, Inland Revenue, FBR â€“ Member Terms of Reference (ToRs) The inquiry team has been tasked with the following objectives: 1. Examine Intelligence Bureau reports on sales tax fraud cases and analyze financial and accounting transactions. This includes identifying connivance by public officials and PRAL employees with perpetrators and abettors of these frauds. 2. Assess the role of the Federal Tax Ombudsman (FTO) in influencing legal proceedings of sales tax fraud cases and evaluate the impact of their public communications on such cases. 3. Identify policy, automation, and enforcement loopholes that enable sales tax fraud, such as inadmissible input adjustments and fake invoices. Propose concrete measures to eliminate these vulnerabilities. 4. Recommend actions, including departmental and penal measures, against all parties involved to prevent future fraud and address maladministration by FBR officials. 5. Suggest improvements to FBRâ€™s Sales Tax modules to address automation gaps that have contributed to recurring scams and significant revenue losses. The inquiry team is expected to present its comprehensive report within 30 days, detailing actionable steps to curb sales tax fraud and strengthen the regulatory framework. This initiative underscores the governmentâ€™s commitment to combating corruption and safeguarding public revenue by addressing systemic inefficiencies and ensuring accountability.

Date: 2024-12-11

Details: ISLAMABAD: The Federal Tax Ombudsman (FTO) Secretariat received 10,515 complaints during the past ten months, of which 9,900 have been resolved, an impressive uptick from previous periods. Talking to media here on Tuesday, FTO officials informed that in a substantial advancement for taxpayer rights and fair tax administration, the Office of the Federal Tax Ombudsman (FTO) has seen impressive strides under the leadership of Dr. Asif Mahmood Jah. Since its inception in 2000, the FTO office faced hurdles, such as limited engagement and responsiveness. However, with Dr Jah, an accomplished tax expert, taking the reins, the office has undergone a significant transformation, increasing both the volume and the efficiency of complaint resolutions. Over the past ten months, the FTO Secretariat received 10515 complaints, of which 9900 have been resolved an impressive uptick from previous periods. Highlighting this achievement, Advisor Legal, and Almas Ali Jovindah, emphasized the notable progress made. Particularly, the proactive use of Section 33 of the FTO Ordinance, aimed at informal dispute resolutions, has surged, streamlining the resolution process for taxpayers. A key impact of the FTOâ€™s intervention has been the expedited processing of delayed tax refunds. In just ten months, Rs 2.00 Billion was refunded to taxpayers, a marked increase from Rs 17.742 Billion in 2023. Additionally, Dr. Jah has championed a record number of 31 own-motion investigations, addressing systemic issues within the tax administration, reaffirming the and a FTOâ€™s dedication to eradicating taxpayer grievances. In the first ten months of the current calendar year, the number of complaints has increased by 67%. And we have conducted 117 outreach sessions in 2024. The FTOâ€™s performance has also been bolstered by a seasoned advisory team conducting extensive outreach efforts to educate the public on their tax rights. This has fostered greater awareness and trust, with taxpayers feeling more secure in seeking redress from the institution. Technological advancements have further revolutionized the adjudication process. The integration of paperless and remote hearing solutions, such as custom Zoom links, has made proceedings more efficient and accessible for taxpayers worldwide, benefiting individuals in the United States, Canada, Saudi Arabia, and China. A recent case exemplifies this commitment: the FTO issued recommendations to the Federal Board of Revenue (FBR) on unjustified withholding tax deductions by the Punjab Council of Arts and Culture. The decision corrected tax practices to align with the Income Tax Ordinance, ensuring that low-income individuals were not burdened unfairly. Furthermore, the FTO has taken a strong stance against FBRâ€™s SRO 350(I)/2024, which inadvertently disrupted sales tax filings and business operations. The FTO has urged FBR to rectify these issues by simplifying filing processes, providing guidelines, and updating the IRIS system to support compliance without hindrance. The call for an automated system to recognize mutual transactions between buyers and sellers reflects the FTOâ€™s commitment to convenience and fairness in tax administration. These developments underscore the FTOâ€™s expanding role and renewed commitment to transparency, accountability, and the protection of taxpayer rights. Through decisive action and strategic reforms, the FTO continues to set new benchmarks for efficiency and fairness in Pakistanâ€™s tax administration. Copyright Business Recorder, 2024

Date: 2024-12-11

Details: The banking sectorâ€™s gross Advance-to-Deposit Ratio (ADR) maintained its upward trajectory, hitting nearly 48% as of November 29, 2024. The banking sectorâ€™s ADR improved to 47.8% as of November 29, 2024, up from 44.3% recorded in October 2024, stated brokerage house Arif Habib Limited (AHL) on Wednesday. â€œThe ratio had previously bottomed out at 38.4% in August 2024. Since then, the ADR has increased by 944 basis points (bps) to reach its current level of 47.8%,â€ the brokerage house added. As per the data, as of November 29, 2024, the banking sectorâ€™s advances stood at Rs14.9 trillion, up from Rs13.8 trillion recorded in October 2024. Meanwhile, the sectorâ€™s deposits remained largely stable at Rs31.1 trillion as of November 29, 2024. The government, vide Finance Act 2022, introduced higher tax rates on investment income for banks with ADR ratio below 50%. This tax aims to increase commercial lending and tax passive income at a higher rate being an income from non-exertion. Therefore, in order to avoid this additional tax and maintain high profits, banks are aggressively disbursing loans to the private sector to achieve the 50% ADR target and also announced some measures to discourage large deposits. Last month, in a move to avoid a potential government-imposed tax, some commercial banks announced the imposition of a 5-6% monthly fee on checking accounts having deposits/balances ranging from Rs1 billion to Rs5 billion on the last day of the month aimed to discourage large deposits. However, the fee was later reversed as the State Bank of Pakistan (SBP) granted some relaxations to the banks and officially announced that the Minimum Profit Rate requirement would not apply to the deposits of financial institutions, public sector enterprises and public limited companies. The ADR issue was also the focus of a high-level meeting held on Tuesday, chaired by Deputy Prime Minister and Foreign Minister Senator Mohammad Ishaq Dar. The participants discussed the use of ADR policy on the overall lending to productive sectors of the economy, its impact on tax revenue targets and the optimum environment for the banking sector.

Date: 2024-12-11

Details: LAHORE: A â€˜cleverâ€™ taxpayer has failed to bypass the established procedures for resolving tax disputes, as the relevant appellate forum has held that no other solution could be sought where an alternate remedy is available. In a recent incident, despite a ruling that taxpayers could not bypass the established procedures for resolving tax disputes, the said taxpayer remained undeterred. He continued to file petitions and applications, hoping to find a way to avoid paying his taxes. But all his attempts remained unsuccessful and his applications were being dismissed one by one. Ultimately, the taxpayer realized that he could no longer evade the tax system. With a sigh, he reluctantly paid his taxes, acknowledging that the law had finally caught up with him. According to sources from among the tax authorities, this classic case serves as a reminder that while loopholes and lawsuits may provide temporary relief, they are no substitute for compliance with the law. As the courts continue to refine their procedures for resolving tax disputes, such taxpayers would do well to heed the warning: the tax system is not a game to be gamed, but a vital institution that underpins our society, they added. It is worth noting that he taxpayers are found manoeuvring with the tax recovery system with the help of tax consultants, who linger on recovery proceedings by highlighting the loopholes. In most of the cases, taxpayers had found a way to outsmart the tax system by challenge every tax notice that comes their way, seeking stay orders from the courts to avoid paying their dues. Strategy of all such taxpayers is simple yet effective, as they approach the relevant appellate forums, citing grievances and requesting the concerned authorities to intervene. Meanwhile, they would also file a reference application and a stay application, which often gets stuck in the system. Ultimately, they continue to delay payment of their taxes. The purpose of similar strategies on the part of taxpayers is very simple and that is to evade their tax obligations. Interestingly, the appellate authorities are not oblivious to such antics. Copyright Business Recorder, 2024

Date: 2024-12-11

Details: Karachi, December 11, 2024 â€“ Ali A. Rahim has been elected unopposed as the President of the Karachi Tax Bar Association (KTBA) for the tax year 2025. In the 68th Annual General Meeting of the KTBA held on Wednesday, following office bearers and members of the executive committee have been elected for the year 2025. In addition to Rahim, several other office bearers were also elected unopposed. These include Syed Faiq Raza Rizvi as Vice President, Shams Mohiuddin Ansari as General Secretary, Ghulam Rabbani as Joint Secretary, and Muhammad Tariq as Librarian. Their unopposed election underscores broad-based agreement among members on the leadership slate for the coming year. Meanwhile, successful candidates for the KTBA Executive Committee include Hunain Mithani, Imran Hyder, Khadim Rasool, Khalid Mahmood, Muhammad Mehmood Bikiya, Saud-ul-Hasan, Syed Hamza Ahmed Hashmi, and Wasif Iqbal. These individuals bring a wealth of expertise to support KTBAâ€™s mission. About KTBA The Karachi Tax Bar Association, originally founded as the Income Tax Practitionersâ€™ Association in 1956, has a long history of fostering professional excellence among tax consultants and practitioners. Over the decades, KTBA has grown to become one of Pakistanâ€™s largest professional bars, comprising advocates, accountants, and tax consultants. The Association is known for its high standards of integrity, efficiency, and dedication to the advancement of the profession. KTBA has been instrumental in organizing seminars, workshops, and conferences to address taxation issues and fiscal policies. Its publications, including News & Views, papers, and periodicals, aim to enhance professional education among members and the wider public. In its enduring commitment to fostering a robust tax culture, KTBA has played an active role in advising the government on fiscal matters and policies to strengthen Pakistanâ€™s economy. The Association is also set to organize Pakistanâ€™s first-ever National Tax Conference under the theme Tax Culture for Revival of Economy, further solidifying its reputation as a key stakeholder in national economic reform. Beyond its professional mandate, KTBA is affiliated with national and international organizations, emphasizing capacity-building initiatives. Plans to establish a training academy and incentives such as scholarships and awards for academic excellence reflect its dedication to professional development. Under Ali A. Rahimâ€™s leadership, KTBA aims to continue its legacy of excellence and innovation in promoting a progressive and equitable tax culture in Pakistan.

Date: 2024-12-11

Details: Islamabad, December 11, 2024 â€“ The Federal Board of Revenue (FBR) has issued an official clarification addressing recent confusion regarding proposed amendments to the Baggage Rules, 2006. The clarification comes after the release of draft SRO 2028(I)/2024 dated December 6, 2024, which led to widespread misinterpretation about the valuation limits on personal baggage. The draft SRO proposed amendments to Notification No. SRO 666(I)/2006 dated June 28, 2006, specifically elaborating on the definition of â€œcommercial quantityâ€ within the Baggage Rules, 2006. It set a limit of USD 1200 for goods brought in baggage that are presumed to be intended for trading or pecuniary gain. However, this clarification has been misconstrued in media and public discussions as a fixed valuation cap on all personal baggage, creating unwarranted concerns. The FBR clarified that the USD 1200 limit applies only to goods brought for potential commercial purposes. It explicitly excludes items of personal use or gifts brought by passengers. The intention behind the proposed amendment was to prevent misuse of the baggage facility by commercial carriers, ensuring fair application of customs regulations. Consequently, the FBR strongly rebutted the notion that personal baggage exceeding USD 1200 in value would be confiscated, labeling such claims as baseless. In response to the public confusion, particularly on social media, the FBR has decided to withdraw the draft Notification to prevent further misunderstandings. The agency reiterated its commitment to providing clear and transparent guidelines to facilitate passengers while maintaining compliance with customs regulations. This clarification underscores the FBRâ€™s dedication to addressing public concerns and ensuring that amendments to customs policies are accurately understood. Moving forward, the FBR aims to refine its communication strategies to minimize ambiguities and enhance public awareness about such policy updates. The amendments have been aimed to strengthen monitoring of personal baggage and prevent misuse by individual misusing the facility to deprive bona fide passengers.

Date: 2024-12-11

Details: Islamabad, December 11, 2024 â€“ The Federal Board of Revenue (FBR) has officially updated the definition of sales tax fraud, refining its core language to ensure greater clarity and prevent misinterpretation. This updated definition, which comes as part of the revised Sales Tax Act of 1990, will apply to the tax year 2025 and aims to strengthen the enforcement of sales tax regulations across Pakistan. According to the FBR, sales tax fraud now includes any intentional attempt to understate or underpay tax liabilities, or to overstate entitlements to tax credits or refunds, in direct violation of the duties and obligations set forth under the Sales Tax Act. This can be achieved through various deceptive practices, such as submitting false returns, statements, or documents, or by deliberately withholding accurate information. The intent behind these actions is to cause a loss of tax revenue to the government. The updated definition explicitly includes several fraudulent practices that fall under the scope of sales tax fraud. These include: (a) Suppression of taxable supplies, where goods or services liable to tax under the Sales Tax Act are deliberately concealed. (b) False claims of input tax credit, where businesses wrongfully claim tax credits they are not entitled to. (c) Failure to issue tax invoices for taxable goods, making supplies without proper documentation, which violates both the Act and the regulations it outlines. (d) Issuance of tax invoices without actual supply of goods, resulting in inadmissible claims for input tax credits or refunds. (e) Tax evasion through undue claims of input tax credits or refunds that are not legitimate, using means beyond the illegal actions described in clauses (a) to (d). (f) Failure to deposit collected tax amounts, where businesses collect tax but do not remit it to the government within the prescribed period of three months from the due date. (g) Falsification of financial records, whether by altering invoices or creating fake documents or accounts, with the aim of evading tax or obtaining unauthorized refunds. (h) Tampering with or destroying material evidence or documents required to be kept under the Sales Tax Act, whether by digital or manual means. (i) Handling goods that are liable to confiscation, which includes actions such as concealing, supplying, or purchasing goods that should be confiscated under the law. (j) Failure to register under the Sales Tax Act while making taxable supplies, a clear violation of registration requirements. (k) Intentional omission or action designed to cause a loss of tax revenue, whether by omission, manipulation, or other means. The FBR has clarified that any action or omission under these categories will be treated as intentional unless the accused can prove they had no knowledge, motive, or intent to commit the fraud. This strengthened definition is aimed at ensuring that those who attempt to evade taxes are held accountable and that the government can better safeguard its tax revenues.

Date: 2024-12-10

Details: Karachi, December 10, 2024 â€“ The Federal Board of Revenue (FBR) has officially designated 34 banks to act as agents under the Synchronized Withholding Administration and Payment System (SWAPS). This initiative is intended to streamline the deduction and collection of withholding taxes, integrating these functions into the advanced SWAPS portal. The designation was formalized through SRO 2041(I)/2024, with the FBR notifying the following banks as SWAPS agents: 1. Al Baraka Bank (Pakistan) Limited 2. Allied Bank Limited 3. Askari Bank Limited 4. Bank Al-Falah Limited 5. Bank Al-Habib Limited 6. Bank Islami Pakistan Limited 7. Bank of China Limited 8. Citi Bank N.A. 9. Deutsche Bank AG 10. Dubai Islamic Bank Pakistan Limited 11. Faysal Bank Limited 12. First Women Bank Limited 13. Habib Bank Limited 14. Habib Metropolitan Bank Limited 15. Industrial and Commercial Bank of China 16. Industrial Development Bank of Pakistan Limited 17. JS Bank Limited 18. MCB Bank Limited 19. MCB Islamic Bank Limited 20. Meezan Bank Limited 21. National Bank of Pakistan 22. Punjab Provincial Cooperative Bank Limited 23. Samba Bank Limited 24. SILK Bank Limited 25. Sindh Bank Limited 26. SME Bank Limited 27. Soneri Bank Limited 28. Standard Chartered Bank (Pakistan) Limited 29. Summit Bank Limited 30. The Bank of Khyber 31. The Bank of Punjab 32. United Bank Limited 33. Zarai Tarqiati Bank Limited 34. State Bank of Pakistan The FBR clarified that these banks are responsible for collecting and depositing withholding taxes under Sections 153(1)(a) and 153(1)(b) of the Income Tax Ordinance, 2001. Until the SWAPS system is fully operational, the banks will continue their tax collection duties under the existing withholding tax regime. Integration with the SWAPS portal requires compliance with specified parameters and APIs shared with these banks. Once fully implemented, SWAPS is expected to enhance tax administration by synchronizing and automating withholding tax processes, thereby improving transparency and efficiency. This measure is part of the FBRâ€™s broader efforts to modernize Pakistanâ€™s tax collection systems and integrate advanced technology to enhance compliance and reduce manual errors.

Date: 2024-12-10

Details: Karachi, December 10, 2024 â€“ The Federal Board of Revenue (FBR) has announced a significant modernization of its customs operations with the launch of the Faceless Customs Assessment (FCA) system. This initiative aims to enhance trade facilitation, ensure faster clearance of Goods Declarations (GDs), and promote transparency and uniformity in customs processes. The FBR formalized this new system by issuing Customs General Order (CGO) No. 06 of 2024. At the heart of this initiative is the establishment of a Central Appraising Unit (CAU) in Karachi. According to the FBR, the FCA system is designed to improve the quality of assessments, rationalize workloads among Appraising Officers (AOs), and reduce human interaction to minimize opportunities for bias or malpractice. Operational Structure and Rollout The CAU will handle consignments arriving at all terminals within Karachi Port and Port Muhammad Bin Qasim (PMBQ). Goods Declarations filed at various Collectorates in Karachi will be allocated to the CAU for assessment. In its initial phase, the FCA will operate exclusively within Karachiâ€™s port terminals, with plans for a phased rollout to Air Freight Units (AFUs), dry ports, and border customs stations across Pakistan. Located at a designated site in Karachi, the CAU will operate under strict protocols to ensure the security and integrity of its processes. Cellular devices are prohibited within the CAU premises, and the work environment will remain isolated to maintain the confidentiality of operations. Assessment Workflow and Transparency The GDs allocated to the CAU will be processed using the Customs Computerized System (CCS). AOs at the CAU will assess GDs in a random, group-less setting, following a â€˜first in, first outâ€™ (FIFO) methodology. Assessments will adhere to the Customs Act, 1969, and related rules, including valuation rulings, public notices, and Board-issued instructions. To enhance accountability, the system will include a random quality assurance mechanism. Selected GDs will undergo additional scrutiny by a dedicated team responsible for performance evaluation and oversight. In cases of disputed assessments, a review will be conducted by the Principal Appraiser (PA) within the CAU. Handling of Specialized GDs and Post-Clearance Activities Certain GDs, such as those requiring provisional assessment under Section 81 of the Customs Act or involving exemptions, will be referred to the Assistant or Deputy Collector of the respective Collectorate for further processing. In instances of misdeclaration or legal violations, AOs will forward cases to PAs for appropriate action under the law. Post-clearance actions, including contravention cases, audit observations, recovery of short-paid amounts, and litigation, will be managed by the respective Collectorate. Additionally, the Collector Headquarters-Appraisement (South) in Karachi will maintain complete visibility of GDs processed by the CAU to ensure vigilance and anti-evasion measures. A Step Forward for Trade Facilitation The introduction of the Faceless Customs Assessment system represents a major step forward in modernizing Pakistanâ€™s customs operations. By leveraging technology and reducing human interaction, the FBR aims to provide a streamlined, transparent, and efficient customs environment, fostering confidence among traders and enhancing the overall trade experience in the country.

Date: 2024-12-09

Details: The Income Tax Rules, 2002, through Rule 15, provide relief to resident taxpayers from the burden of double taxation on foreign-sourced income. This rule supports Sections 102 and 103 of the Income Tax Ordinance, 2001, which address international double taxation relief for resident individuals. Definition of Foreign Income Tax Under Rule 15, a foreign levy qualifies as a foreign income tax if: 1. Nature of Levy: o The levy is recognized as a tax. o It is substantially equivalent to the income tax imposed under the Income Tax Ordinance, 2001. 2. Compulsory Payment: o The levy must involve a mandatory payment under the taxing authority of the foreign country. o Penalties, fines, interest, or similar obligations are not considered taxes for these purposes. 3. Exclusions: o A levy does not qualify as a tax if it offers the payer a direct or indirect economic benefit in exchange for payment. Substantial Equivalence to Local Tax A foreign tax is deemed substantially equivalent to Pakistanâ€™s income tax if it meets the following conditions: 1. Tax on Income-Generating Events: o The foreign tax applies to events that result in income, gains, or profits. 2. Computation Method: o The taxable amount under the foreign tax law is calculated by deducting significant expenses or depreciation from gross receipts. 3. Characterization of Income: o Dividend or interest income earned from foreign sources, when taxed by the Federal Board of Revenue (FBR), retains the same character as defined under the Ordinance. Specific examples of equivalent foreign taxes include withholding taxes on dividends or gross receipts for non-residents and final tax on wages deducted via withholding. Economic Benefits and Specific Provisions The rule also outlines â€œeconomic benefitsâ€ and their exclusions: â€¢ Economic Benefit: This includes property, services, payments, rights to resources or patents, or the discharge of obligations provided by the foreign country. â€¢ Specific Economic Benefit: It excludes benefits that are not equally available to all individuals subject to the foreign countryâ€™s income tax or the general population in cases where no broad income tax exists. This comprehensive framework ensures that resident taxpayers can avoid paying tax twice on the same income, promoting compliance and fairness in cross-border taxation.

Date: 2024-12-09

Details: The Federal Board of Revenue (FBR) has outlined the procedure for resident taxpayers to claim a foreign tax credit under Rule 16 of the Income Tax Rules, 2002. This rule implements Section 103 of the Income Tax Ordinance, 2001, which allows relief for taxes paid abroad, ensuring that resident taxpayers do not face double taxation on their foreign income. Procedure for Claiming the Credit To claim a foreign tax credit, taxpayers must follow these steps as specified by the FBR: 1. Submission of Application: o A resident taxpayer must submit an application for the foreign tax credit along with their annual return of income for the relevant tax year. o The application should be prepared using the format provided in Part I of the First Schedule to the Income Tax Rules. 2. Supporting Documentation: o The application must be accompanied by evidence of the foreign tax paid, as required under sub-rule (4). o If the tax was deducted at the source, the taxpayer must provide: ï‚§ A declaration from the payer confirming that income tax was deducted. ï‚§ A certified copy of the receipt issued by the foreign tax authority for the deducted amount. o In cases where tax was directly paid, the taxpayer must submit the original or a certified copy of the receipt from the foreign tax authority. 3. Alternative Evidence: o The FBR allows some flexibility for taxpayers who cannot obtain the required evidence. In such cases, the Commissioner of Income Tax may accept secondary evidence deemed satisfactory. Importance of Compliance The FBR has emphasized the need for proper documentation to process foreign tax credit claims efficiently. By providing a clear process, the FBR ensures that resident taxpayers can claim legitimate credits while maintaining compliance with tax regulations. The implementation of Rule 16 by the FBR simplifies the procedure, mitigates disputes, and facilitates cross-border tax compliance, reflecting the FBRâ€™s commitment to supporting taxpayers in managing international tax obligations.

Date: 2024-12-09

Details: Karachi, December 9, 2024 â€“ The Federal Board of Revenue (FBR) has announced the inclusion of over 5.7 million individuals and entities in its Active Taxpayers List (ATL) for the tax year 2024. This reflects an addition of approximately 360,000 new taxpayers since the listâ€™s launch on November 1, 2024, underscoring a significant improvement in tax compliance. The updated ATL now operates under a new framework introduced through amendments in SRO 1638(I)/2024. Unlike previous years when the list was released annually in March, the latest procedures ensure the ATL is available immediately after the tax filing deadline. Moreover, the ATL is now updated daily, offering real-time recognition for those who submit their income tax returns (ITRs). â€œThis dynamic system highlights FBRâ€™s commitment to enhancing transparency and efficiency in tax administration,â€ stated an FBR official. â€œTaxpayers who file their returns on time or within any approved extensions are promptly added to the ATL, while those filing late can regain active status by paying a prescribed surcharge under Section 182A of the Income Tax Ordinance.â€ To further encourage compliance, the FBR has rolled out stringent penalties for non-filers. These include potential disconnection of mobile phone SIM cards, suspension of utility services, and restrictions on foreign travel. Such measures aim to foster a culture of timely tax submission while deterring tax evasion. Despite the stricter measures, exemptions apply to specific categories, such as holders of National Identity Cards for Overseas Pakistanis (NICOP), minors, students, and individuals traveling abroad for religious purposes like Hajj or Umrah. The revamped ATL system marks a significant step in the FBRâ€™s efforts to modernize Pakistanâ€™s tax ecosystem. By ensuring timely recognition of compliance and imposing strict measures against defaulters, the initiative seeks to build trust between taxpayers and the state. As Pakistan grapples with economic challenges, a robust tax infrastructure is critical for fiscal stability. The FBRâ€™s proactive approach in expanding the taxpayer base and enhancing transparency aims to contribute to sustainable economic growth and reinforce the nationâ€™s financial resilience.

Date: 2024-12-09

Details: Karachi, December 9, 2024 â€“ The Federal Board of Revenue (FBR) has introduced amendments to the Baggage Rules, 2006, through SRO 2028(I)/2024, aiming to tighten regulations and curb misuse of baggage exemptions for commercial purposes. Under the revised rules, the FBR clarified that items classified as â€œcommercial quantityâ€ are now explicitly excluded from baggage allowances. The term â€œcommercial quantityâ€ refers to goods seemingly intended for trade or profit, with a total value exceeding $1,200, or in the case of mobile phones, more than one device beyond the passengerâ€™s personal use. The amendments also introduced stricter measures for handling goods brought in commercial quantities. These items will no longer be eligible for release upon payment of duty, taxes, and redemption fines. Instead, they will be subject to confiscation, pending adjudication. This latest notification builds on SRO 1649(I)/2024, which had earlier imposed penalties for bringing commercial quantities of goods under baggage rules. Previously, travelers faced a penalty of 30% of the goodsâ€™ declared value in addition to applicable duties and taxes. Now, under the updated policy, such goods will face outright confiscation, further deterring individuals from bypassing formal import procedures. Historically, the Baggage Rules allowed Pakistani nationals, dual citizens, expatriates, and individuals of Pakistani origin to bring in personal or household items duty-free. This concession facilitated travelers without adding financial burdens. However, concerns have grown over the misuse of these exemptions for commercial purposes, undermining the rulesâ€™ original intent. The FBRâ€™s move aims to restore the integrity of the baggage exemptions, ensuring they cater exclusively to genuine travelers. By closing loopholes, the government seeks to strike a balance between facilitating legitimate imports and regulating commercial activities within formal frameworks. This policy shift reflects the FBRâ€™s broader strategy to combat illicit trade, safeguard formal import channels, and enhance revenue collection. Once implemented, the revised baggage rules are expected to strengthen enforcement, align import practices with Pakistanâ€™s economic policies, and uphold fiscal discipline. These amendments signify the governmentâ€™s commitment to curbing regulatory abuse while promoting transparency and accountability in cross-border trade.

Date: 2024-12-09

Details: Karachi, December 9, 2024 â€“ The government is exploring potential tax schemes for banks in light of the challenges surrounding the Asset to Deposit Ratio (ADR), which may impact tax collection from the financial sector. Prime Minister Shehbaz Sharif has formed a committee to address this pressing issue, with the objective of ensuring optimal tax revenue while maintaining a fair regulatory framework. The committee, led by Deputy Prime Minister Ishaq Dar, comprises several key figures, including Finance Minister Mohammad Aurangzeb, Law Minister, the Minister of State for Finance and Revenue, the Attorney General of Pakistan, Finance Secretary, Chairman of the Federal Board of Revenue (FBR), Governor of the State Bank of Pakistan, and Ms. Asma Hamid. The committeeâ€™s Terms of Reference (ToRs) are outlined as follows: 1. To evaluate the current legal framework governing fiscal measures related to the ADR of the banking sector. 2. To explore alternative fiscal schemes to tax bank profits derived from investments in government securities. 3. To collaborate with the banking sector and FBR to form a consensus on possible solutions. 4. To present recommendations for an optimal solution, ensuring government revenue realization by December 31, 2024. 5. To suggest non-fiscal regulatory measures to increase advances to the private sector. The committee is tasked with submitting its report within one week, including any necessary legal amendments and regulatory changes to address the ADR challenge. According to analysts at Topline Securities Limited, banks must meet a 50% Gross ADR target by December 31, 2024, to avoid higher taxes on income from government securities. As of November 15, 2024, the ADR stood at 47%, up from 40% in June 2024. If banksâ€™ ADR falls between 40-50%, they will face an additional 10% tax, whereas an ADR below 40% will result in a 16% tax increase on income from government securities. In the first nine months of 2024, listed banks reported pre-tax profits of Rs913 billion, with full-year profits expected to reach Rs1,200 billion. Approximately 80% of this profit is derived from government securities. If the ADR stays within the 40-50% range, the government could collect an additional Rs96 billion in taxes, while a drop below 40% could raise the figure to Rs154 billion. For banks, any increase in taxes due to changes in ADR rules could have negative consequences on profitability. The committee might consider measures such as revising the definition of â€œadvancesâ€ and â€œdepositsâ€ or adjusting the formula for taxing low ADR banks. Additionally, a hike in corporate tax or a surcharge on income from government securities could be proposed. Despite these uncertainties, analysts maintain a Market Weight stance on the banking sector due to its attractive valuations. However, any additional taxes could reduce banksâ€™ profitability by 12-15%. The industry awaits further clarity on the committeeâ€™s recommendations.

Date: 2024-12-09

Details: Karachi, December 9, 2024 â€“ Pakistan Customs has announced the minimum export value for Kino for the export season spanning December 1, 2024, to May 15, 2025. This initiative aims to standardize export valuations and address concerns raised by various stakeholders in the fruit export sector. Under Valuation Ruling No. 4/2024, the minimum export value of Kino has been set at $410 per metric ton for most markets. For exports to Afghanistan, specifically for B and C grade Kino, the value has been established at $310 per metric ton. Background of the Valuation Process This valuation exercise was undertaken following directives from the Federal Board of Revenue (FBR) and the Ministry of Commerce. The FBR, through a letter dated January 18, 2023, instructed the Directorate of Customs Valuation, Lahore, to determine export values for certain commodities, including Kino. Subsequently, the Directorate initiated the process under Sections 25 and 25A of the Customs Act, 1969. Stakeholder Engagement and Analysis Four meetings were convened with key stakeholders, including representatives from the Trade Development Authority of Pakistan (TDAP), the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), the All Pakistan Fruit & Vegetable Exporters, Importers & Merchants Association (PFVA), and Kino exporters. These consultations, held between May and November 2024, involved detailed deliberations on valuation criteria. Stakeholder proposals, supporting documents, export data from PRAL, and market trends were thoroughly reviewed to finalize the export values. Methodology and Implementation The valuation process adhered to Section 25 (15) of the Customs Act, incorporating export data, international market trends, and stakeholder feedback. If declared transaction values exceed the determined customs values, the higher declared values will apply, ensuring fairness in assessments. Validity and Appeal Provisions This valuation ruling remains effective until revised or rescinded by competent authorities. Exporters may appeal this ruling within 30 days under Section 25D of the Customs Act. Customs officers are directed to apply these values consistently and address any anomalies promptly. The ruling emphasizes accurate declarations and compliance with export regulations to avoid discrepancies and facilitate smooth trade operations. Stakeholders may request revisions by submitting proposals with justifications to the Directorate. This collaborative framework seeks to ensure transparency and equitable practices in Kino exports.

Date: 2024-12-08

Details: The Federal Board of Revenue (FBR) has outlined the definition of a â€œresident individualâ€ for income tax purposes, elaborating the criteria under Rule 14 of the Income Tax Rules, 2002. This rule, which aligns with Section 82 of the Income Tax Ordinance, 2001, provides a detailed framework for determining an individualâ€™s residential status within Pakistan for taxation. Purpose and Applicability Rule 14 specifies the method for calculating the number of days an individual is present in Pakistan during a tax year to establish their status as a resident or non-resident taxpayer. An individualâ€™s tax obligations are directly influenced by this classification, with residents taxed on their global income and non-residents taxed only on Pakistan-sourced income. Key Provisions of Rule 14 1. General Count of Days: o Any part of a day spent in Pakistan is considered a full day for determining residency. This includes both the day of arrival and the day of departure. 2. Days Counted as Presence in Pakistan: Certain situations, even when not directly related to professional activities, are counted as full days of presence: o Public holidays spent in Pakistan. o Leave days, including sick leave. o Days during which activities in Pakistan are disrupted due to strikes, lock-outs, or supply delays. o Holidays taken before, during, or after any business or activity conducted in Pakistan. 3. Exemptions for Transit: Time spent in Pakistan solely for transit purposes between two destinations outside the country does not count as a day of presence. Significance of the Definition The clarification is critical for taxpayers to determine their residential status accurately, ensuring compliance with Pakistanâ€™s tax laws. Misinterpretation of residency criteria can lead to incorrect tax filings or liabilities. By counting even partial days and accounting for non-work-related stays, the rule reinforces a comprehensive approach to defining residency. This precise definition helps align Pakistanâ€™s taxation framework with global standards, while providing clear guidelines for both local taxpayers and foreign individuals conducting activities in the country. Disclaimer This article is intended for informational purposes only and should not be considered as legal or financial advice. Taxpayers are encouraged to consult with a qualified tax professional or legal expert for guidance specific to their circumstances and compliance with tax laws in Pakistan.

Date: 2024-12-08

Details: The Income Tax Rules, 2002, under Rule 13N, prescribe a detailed and structured procedure for the computation and collection of capital gains tax (CGT). This rule delineates the roles, responsibilities, and mechanisms involved, primarily focusing on the National Clearing Company of Pakistan Limited (NCCPL) and other related entities. Applicability and Scope The provisions of Rule 13N and the Eighth Schedule of the Income Tax Ordinance apply to capital gains derived from listed securities. This framework became effective from April 24, 2012, for most securities and July 1, 2012, for redeemable capital instruments. For Foreign Institutional Investors (FIIs), the rules apply from July 1, 2014, ensuring all investors are subject to the same taxation regime, without exemptions. Computation of Capital Gains 1. Data Sources: NCCPL calculates capital gains using transaction data obtained from stock exchanges, the Central Depository Company (CDC), Asset Management Companies (AMCs), and the Pakistan Mercantile Exchange (PMEX). 2. Adjustments for Errors: In case of discrepancies in acquisition dates or other critical details, NCCPL can rectify such errors with prior approval from the Commissioner of Inland Revenue. 3. Methodology: Gains are calculated using the First In, First Out (FIFO) method, except for same-day transactions or futures contracts, where the average method is applied. Collection and Adjustment NCCPL collects CGT monthly, ensuring adjustments for losses, including carry-forward losses as per Section 37A and relevant sub-rules. For open-ended mutual funds and commodity futures, AMCs and PMEX calculate and deposit CGT, while NCCPL verifies their calculations. Refunds below PKR 1,000 are carried forward, while higher amounts are adjusted at the year-end. The applicable CGT rates depend on the investorâ€™s status as a filer or non-filer, determined by the Active Taxpayers List (ATL) at the time of transaction. Handling Losses â€¢ Current Year Losses: Capital losses from listed securities in a financial year are offset against gains from the same year. â€¢ Carry-Forward Losses: Losses from Tax Year 2019 onwards can be carried forward for up to three years, provided the taxpayer appears on the ATL for the relevant year. Adjustments are made on a FIFO basis. Deductions and Incidental Expenses NCCPL deducts a percentage from transaction values to account for brokerage, commissions, and other incidental expenses. However, this deduction does not apply to open-ended mutual funds or PMEX transactions. Additionally, financing costs for leveraged products are deducted from gains. Issuance of Certificates and Reporting â€¢ NCCPL issues annual certificates to taxpayers, verifying their capital gains and tax liabilities within 45 days of the financial year-end. â€¢ Quarterly statements of tax collections are electronically submitted to the Federal Board of Revenue (FBR). Opt-Out Option Taxpayers can opt out of the Eighth Scheduleâ€™s regime by filing an irrevocable undertaking with NCCPL, supported by the Commissionerâ€™s approval. In such cases, NCCPL reports the taxpayerâ€™s gains and liabilities to the FBR. Final Provisions The rules emphasize precision and transparency in CGT collection. For unresolved issues, NCCPL can seek clarifications from the FBR and make necessary adjustments. Additionally, AMCs and PMEX remain accountable for ensuring that any outstanding tax liabilities are reported and settled before account closures. This systematic procedure ensures fairness, clarity, and compliance, enhancing Pakistanâ€™s tax administration while fostering investor confidence in the financial markets.

Date: 2024-12-08

Details: Karachi, December 8, 2024 â€“ The Federal Board of Revenue (FBR) has issued directives to Pakistan Stock Exchange (PSX) investors, requiring them to maintain detailed records of their securities transactions and accounts. This initiative by the FBR is in line with the Income Tax Rules, 2001, and aims to enhance transparency and compliance within the stock market. As per Rule 13I of the Income Tax Rules, the FBR mandates that investors keep records that allow for the verification of their tax obligations. The following guidelines, outlined by the FBR, must be adhered to by all investors: 1. Separate Accounts for Brokerage Activities: Investors are required to maintain distinct records for each brokerage account to ensure clarity and facilitate verification by the FBR. 2. Detailed Documentation: o Fortnightly Ledger Statements: Investors must keep fortnightly ledger statements for every brokerage account, including those held in their own names or benami accounts. o Fortnightly CDC Statements: The FBR requires fortnightly statements of Central Depository Company (CDC) sub-accounts associated with each brokerage account. o Annual Records of Securities: Investors must document the value and details of securities held in their accounts as of June 30 each year, as specified by the FBR. o Cash Balances: A record of cash balances in brokerage accounts on June 30 is mandatory. o Funds Deposited: The FBR emphasizes the need for a thorough record of funds deposited into brokerage accounts. o Funds Withdrawn: Investors are also required to maintain a record of all withdrawals from their brokerage accounts. This directive by the FBR underscores its commitment to curbing tax evasion and ensuring accountability in stock market activities. By implementing these measures, the FBR seeks to foster transparency and strengthen the regulatory framework governing Pakistanâ€™s securities market. The FBR has advised investors to comply with these requirements to avoid penalties or complications during audits. Proper documentation will not only ensure adherence to tax laws but also support the FBRâ€™s broader efforts to enhance fiscal discipline and improve revenue collection.

Date: 2024-12-08

Details: Karachi, December 8, 2024 â€“ The Federal Board of Revenue (FBR) has imposed stricter limitations on entertainment expenditures eligible for deduction against income tax liability, as outlined in the Income Tax Rules, 2002. According to FBR officials, Rule 10 of the Income Tax Rules defines the parameters for entertainment expenses that qualify for tax adjustments under clause (d) of section 21 of Income Tax Ordinance, 2001. This rule aims to ensure that only business-related entertainment costs are deductible, subject to specific conditions detailed below: 1. Expenditures Outside Pakistan: Entertainment costs incurred abroad for business transactions or allocated as head office expenditures. 2. Foreign Customers and Suppliers: Entertainment expenditures within Pakistan for foreign clients and suppliers. 3. On-Premises Costs: Entertainment of customers and clients conducted at the taxpayerâ€™s business premises. 4. Meetings and Events: Expenses for entertainment at shareholder meetings, as well as gatherings of agents, directors, or employees. 5. Branch Openings: Entertainment expenditures associated with the inauguration of new business branches. To qualify for a deduction, Rule 10(2) stipulates that these expenditures must directly relate to the taxpayerâ€™s business operations. This ensures that non-business-related or personal entertainment costs are excluded from tax benefits. Furthermore, the rule defines â€œentertainmentâ€ as the provision of meals, refreshments, or reasonable leisure facilities. Such activities must align with traditional business practices and the cultural norms of Pakistanâ€™s corporate environment. The revised guidelines aim to curb misuse of entertainment expenditures by ensuring that only legitimate business-related costs are eligible for tax relief. By clarifying these restrictions, the FBR intends to enhance compliance, reduce ambiguities, and align deductions with the countryâ€™s evolving tax policies. These changes reflect the governmentâ€™s broader efforts to tighten tax regulations and promote fair practices, ultimately improving revenue collection and supporting economic reforms. Businesses are advised to carefully review these guidelines to avoid potential disputes and ensure proper documentation for all claims.

Date: 2024-12-07

Details: ISLAMABAD: The Islamabad High Court (IHC) has issued an interim order restraining the Law Ministry from finalizing the appointments of Members for the Appellate Tribunal Inland Revenue (ATIR). This decision was made in response to a petition challenging the transparency and legality of the recruitment process for these positions. The petition, filed by Mudassir Malik, a lawyer from Abbottabad, raised concerns about the manner in which the recruitment process was being conducted. He particularly objected to the invitation for written tests scheduled for December 8, 2024, at NUST Islamabad, claiming procedural irregularities. Acknowledging the significance of the matter, the IHC intervened, highlighting the potential for legal complications if appointments were finalized without addressing the concerns raised. The petitionerâ€™s counsel argued that proceeding with appointments could create vested rights and lead to multiple legal disputes. The central issue revolves around the procedural framework governing the appointments of ATIR Members, with allegations that it lacks transparency and compliance with legal standards. In its interim order, the IHC allowed the Law Ministry to continue the evaluation process, including conducting the scheduled written tests. However, it prohibited the finalization of any appointments until the case is resolved. The court emphasized that the recruitment process would remain subject to the outcome of the ongoing proceedings. The matter is set to be heard again on February 13, 2025. This legal intervention reflects the judiciaryâ€™s role in ensuring transparency and accountability in public sector appointments. By temporarily halting the finalization of the recruitment process, the court has provided an opportunity for a thorough review of the procedure while safeguarding the petitionerâ€™s concerns. The decision underscores the importance of adherence to legal frameworks in administrative processes, particularly for positions as critical as ATIR Members, who play a pivotal role in resolving tax disputes. The caseâ€™s outcome will likely clarify whether the recruitment mechanism aligns with established legal and procedural standards, shaping the future of such appointments in Pakistan.

Date: 2024-12-07

Details: Karachi, December 7, 2024 â€“ The Federal Board of Revenue (FBR) has issued a detailed explanation of the tax treatment applicable to bonus shares issued by companies during the tax year 2025, as per Section 236Z of the Income Tax Ordinance, 2001. Under Section 236Z, specific rules govern the taxation of bonus shares to ensure compliance and transparency. Key provisions include: 1. Withholding of Bonus Shares: Companies issuing bonus shares must withhold 10% of the shares to be distributed to shareholders, regardless of any other prevailing law (Sub-section 1). 2. Tax Collection and Value Determination: The withheld shares are released only when the shareholder pays a tax equivalent to 10% of the value of the issued shares, including the withheld portion. The value is determined based on the day-end price on the first day of book closure for listed companies, while for other companies, it follows prescribed valuation rules (Sub-section 2). 3. Tax Deposit Deadline: Companies must deposit the tax collected within 15 days of book closure, even if shareholders have not paid the tax amount (Sub-section 3). 4. Companyâ€™s Right to Recover Tax: Companies depositing tax on behalf of shareholders can recover the tax before issuing the bonus shares (Sub-section 4). 5. Non-Payment Consequences: If a shareholder fails to pay the tax or collect their bonus shares within 15 days of issuance, the company has the right to sell the withheld shares to recover the tax amount (Sub-section 5). 6. Income Attribution: Bonus shares issued are considered part of the shareholderâ€™s income. Any tax collected or proceeds from disposed shares are deemed to be paid on behalf of the shareholder (Sub-section 6). 7. Final Tax Regime: Tax paid under Section 236Z is treated as the final tax liability on income derived from bonus shares (Sub-section 7). Additionally, the applicable tax rate differs based on the shareholderâ€™s tax status. Individuals on the Active Taxpayers List (ATL) are taxed at 10%, while those not on the list face a higher rate of 20%. This detailed framework ensures compliance with tax laws while providing clarity on the responsibilities of both companies and shareholders regarding the issuance and taxation of bonus shares. It emphasizes the FBRâ€™s commitment to streamlining tax processes for the financial year ahead.

Date: 2024-12-07

Details: Karachi, December 7, 2024 â€“ Pakistan Single Window (PSW), in collaboration with Alibaba, one of the worldâ€™s leading e-commerce platforms, is working on an innovative e-commerce module aimed at enhancing the clearance process for cross-border trade. According to Muhammad Asim Awan, Deputy Collector of Customs and Domain Officer at PSW, the module will integrate all e-commerce-related stakeholders into a unified platform. This initiative is designed to address several challenges faced in the e-commerce sector, including the complexities of trade documentation and clearance. Awan shared this information during a recent meeting with officials from the Karachi Chamber of Commerce and Industry (KCCI). He highlighted the pressing need for technological solutions to streamline Pakistanâ€™s cross-border trade, noting that a significant portion of trade activities is subject to regulatory processes. Currently, 67% of all import declarations and 12% of exports require various permits, certifications, and approvals from different government departments. When factoring in State Bankâ€™s forms for imports and exports, this figure reaches 100%, demonstrating the bureaucratic hurdles businesses face. The integration of the e-commerce module will help facilitate smoother transactions by connecting customs, importers, exporters, logistics providers, and other relevant entities into a single platform. This collaboration with Alibaba aims to increase efficiency, reduce clearance times, and promote transparency in trade operations. PSWâ€™s broader vision includes enhancing Pakistanâ€™s trade landscape by leveraging technology. The introduction of a single window for trade offers multiple benefits, such as improved government revenue, better compliance with regulations, faster processing times, and reduced red tape. According to Awan, PSW will trigger a digital transformation in trade-related public sector entities, further improving port operations and logistics through innovative solutions. Looking ahead, PSW will also integrate several key stakeholders, including the Drug Regulatory Authority of Pakistan (DARP), the Board of Investment (BOI), the Ministry of Foreign Affairs (MOFA), and various private sector service providers. This integration is expected to make the clearance process faster and more efficient, saving time and money for businesses. Furthermore, PSW plans to enhance the functionality of the Web-Based One Customs (WeBOC) system and expand international collaborations with countries like China and Egypt, as well as the International Plant Protection Conventionâ€™s (IPPC) e-Phyto Hub, aiming to modernize trade operations across borders.

Date: 2024-12-06

Details: Karachi, December 6, 2024 â€“ The Federal Board of Revenue (FBR) has announced updated advance tax rates on the purchase and transfer of immovable property for the tax year 2025. These updates, implemented under the Finance Act, 2024, have been incorporated into the Income Tax Ordinance, 2001, and specifically explained under Section 236K of the ordinance. Section 236K outlines the rules for collecting advance tax at the time of property registration, transfer, or allotment, according to the FBR. As per the revised provisions: Key Provisions of Section 236K 1. Collection of Advance Tax Sub-section (1) mandates that individuals responsible for registering, recording, or attesting the transfer of immovable property must collect advance tax from the buyer or transferee. This applies to local authorities, housing societies, cooperative societies, public and private real estate projects, and registrars of properties. 2. Adjustable Advance Tax Sub-section (2) clarifies that the advance tax collected is adjustable against the purchaserâ€™s final tax liability. However, for non-resident individuals holding a Pakistan Origin Card (POC), National Identity Card for Overseas Pakistanis (NICOP), or Computerized National Identity Card (CNIC), who acquire property through Foreign Currency Value Accounts (FCVA) or NRP Rupee Value Accounts (NRVA), the tax collected is considered a final discharge of liability. 3. Tax on Installments Sub-section (3) specifies that for properties purchased through installment plans, advance tax is collected with each installment. Once the cumulative tax amount equals the required rate, no additional tax will be collected when the property is transferred to the buyer. 4. Exemption for Expatriate Schemes Sub-section (4) provides exemptions for property purchased under federal or provincial government schemes designed for expatriate Pakistanis. These transactions must be made in foreign exchange remitted through formal banking channels. Implications of the Changes With these updates the FBR aims to improve compliance and transparency in real estate transactions while addressing the unique circumstances of overseas Pakistanis. The adjustments also streamline the taxation process for installment-based property purchases and encourage proper documentation in property dealings. The FBR emphasizes that these changes are part of ongoing efforts to increase revenue collection and curb tax evasion in the real estate sector, a significant contributor to Pakistanâ€™s economy. With these new provisions, taxpayers, particularly property buyers, are advised to stay informed and ensure compliance with the updated tax requirements. Further details and specific rates can be referenced in Division XVIII of Part IV of the First Schedule to the Income Tax Ordinance, 2001. Advance Tax on purchase of immovable property under Section 236K Description On ATL Tax rate for late filers Not on ATL Where the fair market value does not exceed Rs 50 million 3% 6% 13% Where the fair market value exceeds Rs 50 million but does not exceed Rs 100 million 3.5% 7% 16% Where the fair market value exceeds Rs 100 million 4% 8% 20%

Date: 2024-12-06

Details: ISLAMABAD: The Federal Board of Revenue (FBR) Thursday constituted committees for procurements at FBR in connection with FBR Transformation Plan for 2024-25 and 2025-26. According to a notification issued here on Thursday by the FBR, the competent authority has notified committees for procurements at FBR in connection with FBR Transformation Plan or any other procurement as assigned to these committees by the competent authority from time to time for the financial years 2024-25 and 2025-26. The Committees shall perform their functions as per provisions of Public Procurement Rules, 2004 as amended from time to time. The Procurement Committee: Member (Admn/HR) would be the chairman of the committee. Members included Member (Audit/CRM), Member (Customs Operations), Chief (Admn & Finance), Secretary (Admn), (Chair/Convener) and any other Co-opted Member (s) nominated by the Chair of the Committee. Terms of reference included procurement Committee shall approve the procurement activity before and after the Bid opening and evaluation report respectively; validate the need of procurement. The committee shall approve the bid evaluation report and decide to award the contract to qualified bidder. In order to support the Procurement Committee, following Committee shall Support: Technical/Financial Evaluation Committee: Member (IR-Operations) would be the convener. Members are Member (Customs Policy), Chief (R&A), Chief (Management/ HR-IR), Chief (Management/ HR-Customs), Chief (F&C) â€” Customs, Secretary (Expenditure) â€” IR, Second Secretary (IR-CPF) TORs of Technical Evaluation Committee: Committee shall formulate/design the tender documents for the procurement activity. It shall confirm that the evaluation criterion is proportionate and appropriate to the type, nature, market conditions, complexity, risk, value and objective of what is being procured. The committee shall decide the â€œMarket Approach Optionsâ€, â€œSelection Methodâ€, â€œProcurement Magnitudeâ€, â€œSpecificationsâ€, â€œCustomized Procurement Documentâ€ and shall receive, open and evaluate the bids/ proposal. For solicitation of any additional information clarification from bidders/prospective consultants the Procurement Specialist would provide necessary coordination support, subject to condition that no change in the price or substance of the bid shall be sought, offered, or permitted. Bid/proposals once made non-responsive would not be subsequently made responsive by altering the content of bid/proposal or on the basis of any extrinsic to the contents of bid/proposals or procurement documents. Incidence of Conflict of Interest of bidders/consultants/prospers and evaluators should immediately be submitted in writing and the team member found to have any conflicting interest would be replaced by another team member. Physical Inspection Committee included Chief (IR-Operations), Secretary (Coordination), Secretary (E&C), Second Secretary (Stores/ Transport) (Chair/Convener) and any other Co-opted Member nominated by the Chair of the Committee). TORs of Physical Inspection Committee included to conduct the inspection and physical verification of delivered items/ equipment and services (in case of service related procurements) and check the delivered items/equipment is in conformance with the given specifications (same shall apply mutatis mutandis to service procurements). The committee will check that the supplied goods/items are stored, supplied, and retained according to SoPs and supplied in prescribed quantity. Copyright Business Recorder, 2024

Date: 2024-12-06

Details: Karachi, December 6, 2024 â€“ The Federal Board of Revenue (FBR) has issued instructions to Chief Commissioners of Inland Revenue (CCIRs) to expedite property transactions for overseas Pakistanis, ensuring that the verification and approval process is completed within a single business day. This initiative is part of the FBRâ€™s continued efforts to streamline the process for overseas Pakistanis involved in real estate transactions, making it more efficient and accessible. This directive comes in response to the recent extension of tax exemptions for overseas Pakistanis engaging in property transactions. The FBR aims to make these exemptions more easily accessible and efficient, thus encouraging expatriates to invest in the Pakistani real estate market. The move is designed to facilitate property sales and purchases by overseas Pakistanis who hold a Pakistan Origin Card (POC) or a National Identity Card for Overseas Pakistanis (NICOP). The tax exemptions, introduced through the Finance Act of 2022 under Clause 111AC of the Income Tax Ordinance, 2001, provide relief to non-resident individuals by exempting them from higher tax rates under Sections 236C and 236K, even if they are not listed on the Active Taxpayers List (ATL). This provision is aimed at making property transactions smoother for overseas Pakistanis by eliminating additional tax burdens that would typically apply to non-residents. To streamline the process, the FBR has updated its IRIS tax system. Overseas Pakistanis wishing to claim these exemptions must upload their POC or NICOP details when creating their withholding tax challan under Sections 236C and 236K. Once submitted, a provisional Payment Slip ID (PSID) will be generated, which will be forwarded to the CCIR for review and approval. Upon receiving the PSID, the CCIR will assign the case to the relevant Commissioner Inland Revenue (CIR) for verification of the applicantâ€™s non-resident status. After confirming eligibility, the exemption will be granted, and the taxpayer will receive an SMS and email notification, allowing them to proceed with their property transaction without incurring higher taxes. The FBRâ€™s initiative underscores its commitment to simplifying the tax process for overseas Pakistanis and encouraging investment in the countryâ€™s real estate sector. By ensuring faster processing and greater transparency, the FBR aims to build trust with expatriates, recognizing their significant contributions to the national economy. This effort is expected to further boost confidence in Pakistanâ€™s property market and attract more investment from overseas Pakistanis.

Date: 2024-12-06

Details: Karachi, December 6, 2024 â€“ The Federal Board of Revenue (FBR) has officially notified rules to regulate Azerbaijan-Pakistan transit trade operations as per the recently signed Azerbaijan-Pakistan Transit Trade Agreement (PATTA) 2024. This development, announced on Friday, aims to streamline cargo movement between the two nations through designated Pakistani ports while enhancing bilateral trade relations. The FBR issued SRO 2016(I)/2024, detailing amendments to the Customs Rules of 2001. These provisions cover the processing of transit trade cargo to and from Azerbaijan via Pakistanâ€™s key ports, including Karachi Port, Port Muhammad Bin Qasim, and Gwadar Port. This move underscores the strategic importance of these ports in facilitating regional connectivity and trade. User Registration and Access The rules outline the procedure for foreign users, including traders, government organizations, United Nations entities, and diplomatic missions based in Azerbaijan, to register with Pakistanâ€™s Customs Computerized System (CCS). The Directorate General Reforms and Automation in Karachi will generate user IDs for focal representatives of Azerbaijanâ€™s Ministry to facilitate electronic submission of the requisite registration forms. Transport Vehicle Regulations The rules also address the licensing and operation of commercial vehicles engaged in bilateral and transit trade. Vehicles must be licensed by the contracting parties and carry valid permits issued for a single round trip. These permits are vehicle-specific and non-transferable, with validity tied to the visa duration of the driver. In special cases, vehicles may remain in Pakistan for up to 90 days, provided the Customs authorities are notified. Exemptions and Permits Certain goods and activities, such as humanitarian aid, postal services, live animals for sporting events, and art exhibits, are exempt from requiring transport permits. Additionally, lightweight vehicles under 3.5 tons are also excluded from permit requirements, ensuring flexibility for smaller-scale operations. Levies and Scanning Procedures The FBR will levy charges for administrative services, including weighment, scanning, and sealing of containers. These fees will be non-discriminatory and uniformly applied. Containers of transit cargo will undergo selective scanning at entry points and en-route based on a Risk Management System (RMS). Penalties for Violations Under PATTA, the contracting parties reserve the right to take punitive action against offenders violating customs regulations. This includes the exclusion of individuals or entities from participating in transit trade activities. Violations by drivers or transport operators will be addressed as per national laws, ensuring strict compliance with international and domestic regulations. This framework signifies a major step toward boosting economic ties and improving regional trade connectivity between Azerbaijan and Pakistan. It emphasizes efficiency, transparency, and cooperation, further solidifying Pakistanâ€™s position as a regional trade hub.

Date: 2024-12-06

Details: Islamabad, December 6, 2024 â€“ The Federal Board of Revenue (FBR) announced on Friday the expansion of its Single Sales Tax Return (SSTR) facility to include two additional sectors. This move is part of the FBRâ€™s ongoing efforts to streamline tax compliance and simplify the filing process for taxpayers. In a joint statement, the FBR, along with all Provincial Revenue Authoritiesâ€”namely the Balochistan Revenue Authority (BRA), Khyber Pakhtunkhwa Revenue Authority (KPRA), Sindh Revenue Board (SRB), and Punjab Revenue Authority (PRA)â€”confirmed their unanimous decision to extend the SSTR facility to the Exploration and Production (E&P) sector, which includes oil and gas companies, as well as to microfinance banks. Taxpayers operating in these two sectors are now required to submit their sales tax returns through the Single Sales Tax Return system starting from the tax period of November 2024, with the first returns due in December 2024. This initiative aims to reduce administrative burdens, eliminate redundancies, and ensure a unified approach to sales tax filing across federal and provincial tax jurisdictions. The FBR emphasized that the SSTR is designed to provide a user-friendly and efficient solution for taxpayers, consolidating all sales tax-related obligations into a single platform. The system eliminates the need for businesses to file separate returns with federal and provincial authorities, thereby enhancing compliance and reducing the risk of errors or inconsistencies in tax submissions. Stakeholders in the E&P and microfinance sectors are advised to access the Single Sales Tax Return through the dedicated Single Portal, which is now fully operational. The portal serves as a centralized platform, offering guidance, support, and ease of access for taxpayers to file their returns. The expansion of the SSTR facility to these two key sectors is seen as a significant step towards modernizing Pakistanâ€™s tax framework. It aligns with the governmentâ€™s broader goals of fostering a business-friendly environment and promoting digital transformation in the tax administration system. By extending this facility, the FBR aims to encourage greater compliance, improve tax collection efficiency, and support the countryâ€™s economic growth.

Date: 2024-12-06

Details: Karachi, December 6, 2024 â€“ The Federal Board of Revenue (FBR) has announced December 31, 2024, as the final deadline for corporate entities to file their income tax returns for the tax year 2024. FBR officials have emphasized that this deadline will not be extended, urging companies to comply promptly to avoid penalties. Filing Guidelines under Section 118 of the Income Tax Ordinance, 2001 The FBR has outlined the procedure for filing income tax returns and accompanying documents under Section 118 of the Income Tax Ordinance, 2001. Corporate taxpayers must adhere to the following guidelines: 1. Mandatory Filing Requirements o A return of income under Section 114, a wealth statement under Section 116, or a foreign income and assets statement under Section 116A, where applicable, must be furnished in the prescribed manner. 2. Specific Deadlines o For companies with a tax year ending between January 1 and June 30, the return must be filed by December 31 of the following year. o For other cases, the filing deadline is September 30 of the subsequent year. 3. Electronic Filing Mandate o Taxpayers with salary income exceeding PKR 500,000 must file their returns electronically, including proof of tax deduction or payment, along with wealth statements or foreign income and asset statements if applicable. Key Provisions and Consequences of Non-Compliance â€¢ Wealth Statements and Notifications o Taxpayers are required to submit wealth statements by the due date specified in the notice or the due date for filing the return of income, as applicable. â€¢ Returns by Non-Registered Taxpayers o Taxpayers not registered with a National Tax Number (NTN) must apply for registration alongside their return filing. Failure to do so will render their return invalid. Sub-section (6) further clarifies that returns filed without NTN registration will not be treated as valid submissions. FBRâ€™s Message to Taxpayers The FBR has stressed the importance of meeting this deadline, highlighting its commitment to streamlining tax compliance processes. Officials encourage corporate entities to leverage e-portal services for efficient and error-free submissions. Compliance and Strategic Importance Corporate tax compliance is pivotal for maintaining transparency and contributing to the national exchequer. The December 31 deadline offers businesses sufficient time to consolidate financial records and file accurate returns. This announcement reiterates the FBRâ€™s intent to enforce deadlines and ensure adherence to tax regulations. With the tax year concluding soon, timely filing is crucial to avoid penalties and maintain good standing with tax authorities.

Date: 2024-12-05

Details: â€¢ Meeting's agenda focuses on fostering collaboration between federal, provincial authorities to enhance tax systems, improve compliance, and boost revenue collection, Finance Division says BR Web Desk Published December 4, 2024 Finance minister Muhammad Aurangzeb chaired on Wednesday a meeting of the National Tax Council (NTC), which brought together key federal and provincial stakeholders to discuss critical matters related to tax reforms and harmonisation, the Finance Division said in a statement. The meeting was held in the context of a recently signed National Fiscal Pact between the federation and provinces, emphasising the need for realising the full tax potential from under-taxed sectors, particularly real estate, property, and agricultural income, it added. â€˜No hiccupsâ€™: finance ministry reaffirms commitment to IMF programme, refutes speculation According to details, the agenda of the meeting focused on fostering collaboration between federal and provincial authorities to enhance tax systems, improve compliance, and boost revenue collection. Key discussions revolved around: â€¢ Data sharing and tax digitisation: strengthening information-sharing mechanisms between the Federal Board of Revenue (FBR) and provincial revenue authorities, leveraging advanced tools for data analysis, and implementing digital solutions to streamline tax collection. â€¢ â Harmonisation of GST: advancing efforts to harmonise the General Sales Tax (GST) across provinces and transitioning to a unified tax portal for better efficiency and transparency. â€¢ â Provincial tax reforms: reviewing measures to enhance agricultural income tax and property taxation, ensuring alignment with federal policies while addressing existing challenges. â€¢ â Broader tax base: exploring strategies to transition GST on services to a broader framework, aligning with international best practices to minimise ambiguities and improve administration. The council emphasised the importance of cohesive policy implementation, capacity building, and robust stakeholder engagement to achieve sustainable reform goals. Finance minister reiterated the governmentâ€™s commitment to fostering collaboration among all stakeholders for a unified and efficient tax framework. The meeting concluded with actionable steps to advance the discussed reforms in a timely manner, the statement read. Govt has no room for complacency, says Aurangzeb On Monday, Aurangzeb said there was no room but to stay the course of reform agenda to ensure it was the last International Monetary Fund (IMF) programme, as well as long-term economic development. â€œThe key message by the multilateral and bilateral partners, as well as, local think-tanks for Pakistan is to stay the course of reform agenda including taxation, energy and state-owned entities (SOEs), as well as, public finances,â€ said the minister, while briefing the National Assembly Standing Committee on Finance. The IMF Executive Board approved the 37-month, $7-billion Extended Fund Facility for Pakistan in September this year. The first review of the countryâ€™s reforms is due in the first quarter of 2025.

Date: 2024-12-05

Details: ISLAMABAD: National Tax Council (NTC) Wednesday reviewed provincial tax reforms including measures to enhance agricultural income tax and property taxation. A meeting of the NTC was held here on Wednesday at the Finance Division under the chairmanship of Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb. It brought together key federal and provincial stakeholders to discuss critical matters related to tax reforms and harmonization. The meeting was held in the context of the recently signed National Fiscal Pact between the federation and the provinces, emphasising the need for realising the full tax potential from under-taxed sectors, particularly real estate, property, and agricultural. Officials informed that the NTC was unanimous to expedite enactment of provincial agriculture income tax laws by the respective provincial governments. Punjab has already enacted the law. The law has been approved by the KPâ€™s cabinet and its placement in assembly is awaited. The law has also been approved by the provincial government of Balochistan on November 11, 2024 and its placement in assembly is awaited. In case of Sindh, the work and preparations on the amended law has already been done. The meeting was attended by Ali Parvez Malik, the Minister of State for Finance & Revenue; Mian Mujtaba Shuja-ur-Rehman, the Finance Minister of Punjab; Muzzamil Aslam, the Finance Minister of KPK; Mir Shoib Nausherwani, the Finance Minister of Balochistan; Chairman FBR, chairmen of Provincial Revenue Boards, and the Federal and Provincial Finance Secretaries. Additionally, experts from the World Bank and senior officials from Finance Division and provincial finance departments were also present. The agenda of the meeting focused on fostering collaboration between federal and provincial authorities to enhance tax systems, improve compliance, and boost revenue collection. Key discussions revolved around: 1. Data Sharing and Tax Digitization: Strengthening information-sharing mechanisms between FBR and provincial revenue authorities, leveraging advanced tools for data analysis, and implementing digital solutions to streamline tax collection. 1. Harmonization of GST: Advancing efforts to harmonize the General Sales Tax (GST) across provinces and transitioning to a unified tax portal for better efficiency and transparency. 2. Provincial Tax Reforms: Reviewing measures to enhance agricultural income tax and property taxation, ensuring alignment with federal policies while addressing existing challenges. 3. Broader Tax Base: Exploring strategies to transition GST on services to a broader framework, aligning with international best practices to minimize ambiguities and improve administration. The Council emphasised the importance of cohesive policy implementation, capacity building, and robust stakeholder engagement to achieve sustainable reform goals. Participants acknowledged the potential of these measures to support national fiscal stability and promote equitable growth. The Federal Minister for Finance and Revenue reiterated the governmentâ€™s commitment to fostering collaboration among all stakeholders for a unified and efficient tax framework. The meeting concluded with actionable steps to advance the discussed reforms in a timely manner. Copyright Business Recorder, 2024

Date: 2024-12-05

Details: Karachi, December 5, 2024 â€“ The Federal Board of Revenue (FBR) has updated advance income tax rates for retailers, distributors, dealers, and wholesalers applicable for the tax year 2025. These tax rates are governed by Sections 236G and 236H of the Income Tax Ordinance, 2001, and aim to enhance tax compliance and streamline revenue collection. Advance Tax on Sales to Distributors, Dealers, and Wholesalers (Section 236G) Under Section 236G, manufacturers and commercial importers must collect advance tax at the specified rates when selling to distributors, dealers, or wholesalers. This tax, collected at the time of sale, is adjustable against the final tax liability of the recipient for the tax year. The updated rates are as follows: â€¢ For fertilizer supplies: o ATL-listed recipients (Active Taxpayers List for both Sales Tax and Income Tax): 0.25%. o Non-ATL recipients: 0.7%. â€¢ For non-fertilizer supplies: o ATL-listed recipients: 0.1%. o Non-ATL recipients: 2%. These provisions encourage businesses to ensure their inclusion in the Active Taxpayers List (ATL) to benefit from significantly reduced tax rates. Advance Tax on Sales to Retailers (Section 236H) Section 236H applies to sales made by manufacturers, distributors, dealers, wholesalers, or commercial importers to retailers. It also extends to distributors or dealers selling to other wholesalers within the same sectors. Like Section 236G, this tax is adjustable against the taxable income of the retailer in the same tax year. The advance tax rates under Section 236H are as follows: â€¢ ATL-listed recipients: 0.5%. â€¢ Non-ATL recipients: 2.5%. Promoting Compliance and Efficiency The updated tax measures aim to improve compliance and provide an equitable taxation framework for businesses. The FBR emphasizes the benefits of being listed on the ATL, such as lower tax rates and a smoother compliance process. These adjustments also encourage businesses to fulfill their tax obligations and maintain transparency in their operations. The FBR has called on all stakeholders to review these updated rates and ensure compliance to avoid penalties. These advance taxes are expected to bolster revenue collection and foster a transparent and efficient taxation system in Pakistan, paving the way for better resource management and economic stability.

Date: 2024-12-05

Details: Karachi, December 5, 2024 â€“ Pakistan Single Window (PSW) has announced a series of initiatives aimed at streamlining processes and integrating various organizations and stakeholders to ensure swift and efficient clearance for businesses. These efforts are designed to simplify the clearance procedures for the trade community by enhancing coordination between regulatory bodies, service providers, and other key players. In a recent seminar organized by the Karachi Chamber of Commerce & Industry (KCCI), Muhammad Asim Awan, Deputy Collector Customs & Domain Officer at PSW, highlighted the upcoming integrations set to further improve the efficiency of the system. Among the entities to be integrated with PSW are the Drug Regulatory Authority of Pakistan (DARP), the Board of Investment (BOI), the Ministry of Foreign Affairs (MOFA), and several private sector stakeholders, including laboratories, pre-shipment inspection companies, and transporters. This integration aims to create a seamless process that would provide hassle-free, fast, and efficient services to the business community, saving valuable time and reducing administrative burdens. Awan emphasized that integrating all regulatory functions at the port will significantly improve the speed of clearance, reducing the average time per consignment by up to three days and cutting costs by US$50 per container. Furthermore, technical upgrades to the Web-Based One Customs (WeBOC) system will be implemented, alongside the integration of DPP Treatment Providers and external laboratories. Additionally, international integration efforts are underway with initiatives such as the China Single Window, Egypt, and the e-Phyto Hub of the International Plant Protection Convention (IPPC). The seminar, which drew a large crowd, included key figures from the business community, including KCCI President Muhammad Jawed Bilwani, Vice President Faisal Khalil Ahmed, and former Vice Presidents Younus Soomro and Haris Agar. PSW representatives, including SVP Arshad Hussain, Manager Azka Rehman, and Senior Software Support Engineer Muhammad Hamza, also attended. Many importers and exporters participated in the session, both in person and online. Awan also shared that PSW, in collaboration with Chinese e-commerce giant Alibaba, is working on developing an e-commerce module to bring all relevant stakeholders under a single platform. This initiative is expected to address various challenges related to e-commerce, making the process smoother for businesses involved in cross-border online trade. On the subject of Pakistanâ€™s cross-border trade, Awan revealed that 67% of all import declarations and 12% of export declarations are regulated by various government agencies requiring permits, certifications, and licenses. When considering related import and export forms from the State Bank, this number rises to 100%. He outlined the many benefits of the single-window system, including enhanced government revenue, improved compliance, better resource allocation, faster clearance times, and greater transparency. These improvements are expected to reduce bureaucratic hurdles, simplify port operations, and enable a smoother trade process. KCCI President Jawed Bilwani also spoke during the session, highlighting the growing interest in PSW services among the business community. He noted that while the introduction of PSW was expected to reduce business costs by accelerating clearance times and eliminating demurrage charges, delays in clearance still remain a significant concern. He called for immediate action to address these delays and improve the overall efficiency of the system. Bilwani also praised the self-clearance system introduced under PSW, which has proven to be beneficial for many KCCI members. He expressed a desire for more information on how many businesses are using this facility, the annual growth in PSW participation, and how long it will take to integrate every exporter and importer into the system. He concluded by emphasizing the importance of encouraging all businesses to join PSW, as this would further reduce the cost of doing business in Pakistan. Through these initiatives and integrations, PSW is set to transform Pakistanâ€™s cross-border trade landscape, bringing efficiency, cost savings, and transparency to the logistics and trade sector.

Date: 2024-12-04

Details: Islamabad, December 4, 2024 â€“ The National Tax Council (NTC) convened on Wednesday to explore measures aimed at boosting revenue through enhanced agricultural income and property taxation. The session, chaired by Minister for Finance and Revenue Senator Muhammad Aurangzeb, underscored the importance of federal-provincial collaboration to achieve comprehensive tax reforms and improve compliance. The NTC meeting was part of ongoing efforts following the recently signed National Fiscal Pact, which emphasizes optimizing revenue collection from under-taxed sectors such as agriculture and real estate. Key participants included Minister of State for Finance Ali Parvez Malik, provincial finance ministers, the Chairman of the Federal Board of Revenue (FBR), and representatives from provincial revenue boards. Experts from the World Bank and senior officials from federal and provincial finance departments also contributed. Central to the discussions was the need to strengthen information-sharing mechanisms between the FBR and provincial revenue authorities. Participants highlighted the role of advanced data analytics and digital tools in streamlining tax collection and addressing inefficiencies. A key focus was harmonizing the General Sales Tax (GST) system across provinces and transitioning to a unified tax portal to ensure greater transparency and operational efficiency. The NTC also reviewed strategies to enhance agricultural income tax and property taxation, aligning these efforts with federal policies while addressing specific regional challenges. The meeting emphasized adopting a unified approach to GST on services, drawing on international best practices to minimize administrative ambiguities and foster better governance. Stakeholders stressed the importance of cohesive policy implementation, capacity building, and proactive stakeholder engagement to ensure the success of proposed reforms. The council recognized that modernizing taxation in agriculture and property sectors would significantly bolster national revenue and contribute to equitable economic growth. Minister Aurangzeb reiterated the governmentâ€™s commitment to fostering a unified and efficient tax framework. He called for timely implementation of actionable steps discussed in the meeting, emphasizing the need for continued cooperation among all stakeholders. The NTC meeting concluded with a clear roadmap for advancing the proposed reforms, signaling a renewed commitment to achieving sustainable fiscal stability and strengthening Pakistanâ€™s economic foundation.

Date: 2024-12-04

Details: Karachi, December 4, 2024 â€“ The Federal Board of Revenue (FBR) has updated advance tax rates for foreign TV dramas, plays, and advertisements in Pakistan for the tax year 2025. These changes aim to regulate content featuring foreign talent and promote compliance within the entertainment industry. The revised tax rates fall under Section 236CA of the updated Income Tax Ordinance, 2001, which mandates the collection of advance tax on foreign content aired on landing rights channels in Pakistan. Key Provisions of Section 236CA: 1. Tax on Foreign TV Plays and Dramas: Licensing authorities certifying any foreign TV drama serial or a play dubbed in Urdu or other languages for screening must collect advance tax at the specified rates. 2. Tax on Advertisements Featuring Foreign Actors: Licensing authorities certifying advertisements featuring foreign actors for airing on landing rights channels are required to collect advance tax at the specified rates. 3. Minimum Tax Requirement: The collected advance tax is treated as the minimum tax for income arising from the certified drama serials, plays, or advertisements. Updated Tax Rates: â€¢ Foreign-Produced TV Drama Serial or Play: o Per Episode: PKR 1,000,000 â€¢ Single-Episode Foreign TV Play: o Flat Rate: PKR 3,000,000 â€¢ Advertisement Featuring Foreign Actor: o Per Second: PKR 100,000 Additional Surcharge for Non-ATL Entities For individuals or entities not listed on the Active Taxpayers List (ATL), these rates will be doubled. This step aligns with the governmentâ€™s broader strategy to encourage compliance and expand the tax net. The FBRâ€™s latest move reflects its efforts to ensure equitable taxation and support the local entertainment industry by regulating the influx of foreign content. These measures are expected to generate substantial revenue while leveling the playing field for local artists and production houses. By imposing these taxes, the government aims to strike a balance between fostering creative diversity and prioritizing local talent and productions within the national entertainment landscape.

Date: 2024-12-04

Details: Islamabad, December 4, 2024 â€“ The Federal Board of Revenue (FBR) announced the formation of multiple procurement committees on Wednesday to facilitate the implementation of its Transformation Plan. These committees are tasked with ensuring compliance with Public Procurement Rules, 2004 (as amended) and handling procurements related to the Transformation Plan for financial years 2024-25 and 2025-26, as well as other assignments designated by the competent authority. Key Committees and Their Responsibilities 1. Procurement Committee The Procurement Committee is chaired by the Member (Admin/HR) and includes representatives from various operational sectors. Its primary responsibilities include: â€¢ Approving procurement activities before and after bid evaluations. â€¢ Validating the necessity of procurement. â€¢ Reviewing and approving bid evaluation reports. â€¢ Deciding contract awards for qualified bidders. A quorum of two-thirds of the committee members is required for decisions. 2. Technical/Financial Evaluation Committee Supporting the Procurement Committee, this committee, chaired by the Member (IR-Operations), focuses on: â€¢ Designing tender documents. â€¢ Ensuring evaluation criteria align with the nature, complexity, and value of procurements. â€¢ Deciding market approach options, specifications, and procurement methods. â€¢ Evaluating bids and ensuring compliance with procurement regulations. This committee safeguards against conflicts of interest, with any member found in conflict being replaced promptly. 3. Physical Inspection Committee This committee, led by the Chief (IR-Operations), oversees the inspection and verification of procured items, ensuring they conform to specifications. Key tasks include: â€¢ Verifying delivered goods or services match required standards. â€¢ Ensuring items are stored and retained as per protocols. 4. Grievance Redressal Committee According to the FBR, the Grievance Redressal Committee, chaired by the Member (IR-Legal), addresses concerns raised by bidders during the procurement process. Responsibilities include: â€¢ Hearing complaints from aggrieved bidders. â€¢ Analyzing grievances and making recommendations in compliance with procurement rules. â€¢ Preparing formal reports detailing decisions and justifications. The committee can co-opt experts as necessary to resolve complex grievances effectively. Objective and Framework The FBR emphasized that these committees are structured to ensure transparency, fairness, and compliance in procurement processes. By assigning specialized roles to each committee, the FBR aims to streamline operations, minimize risks, and enhance accountability in implementing its Transformation Plan. These measures reflect FBRâ€™s commitment to upholding public procurement standards while driving modernization efforts.

Date: 2024-12-04

Details: The Federal Board of Revenue (FBR) has introduced a significant policy change, requiring the Customs Department to conduct forensic laboratory tests through reputable forensic labs before auctioning confiscated vehicles. This move aims to enhance transparency in the auction process and ensure the sale of non-tampered vehicles to buyers. According to the FBR, the new rule, however, does not apply to un-cleared or overstayed vehicles imported through ports. These categories of vehicles remain exempt from the forensic testing requirement. This development comes as part of an amendment to the Customs Rules 2001, implemented through SRO 1964(I)/2024, issued by the FBR on November 27, 2024. The amendment reflects FBR commitment to curbing the auction of tampered vehicles, a practice that has raised concerns over the integrity of auctioned assets. Under the revised procedure, all confiscated vehiclesâ€”except for port-imported overstayed or un-cleared vehiclesâ€”must undergo a forensic test before being placed in an auction. This ensures that potential buyers can have confidence in the authenticity and condition of the vehicles they purchase. The timing of the forensic test is critical, as it must be conducted prior to the auction process. This step will help identify any tampering, such as chassis modifications, engine alterations, or other discrepancies that might compromise the vehicleâ€™s integrity. By mandating forensic tests, the FBR aims to foster greater transparency in its operations and protect buyers from fraudulent practices. This policy is also expected to act as a deterrent to the manipulation of confiscated vehicles, ensuring only legitimate and untampered assets are auctioned. The decision is seen as a positive step toward modernizing the auction process, aligning it with international best practices, and bolstering public trust in government auctions. Buyers can now look forward to acquiring vehicles with verified credentials, reducing risks associated with tampered assets. The FBRâ€™s move is part of broader efforts to improve the regulatory framework, enhance operational efficiency, and uphold ethical standards in the management of confiscated assets.

Date: 2024-12-04

Details: Finance Minister Muhammad Aurangzeb has reaffirmed the governmentâ€™s commitment to integrating the wholesale and retail sectors into the tax net while ensuring that small traders and shopkeepers receive maximum facilitation during this transition. Speaking at a meeting with trade representatives at the Finance Ministry, Aurangzeb emphasized the importance of broadening the tax base for the effective functioning of the country. â€œTo run the country effectively, everyone must contribute their fair share in taxes,â€ he stated. The meeting, aimed at discussing tax reforms and business integration into the formal economy, underscores the governmentâ€™s focus on equitable tax collection and economic transparency. Prominent attendees included Federal Minister Rana Sanaullah, State Minister Ali Pervez, and Federal Board of Revenue (FBR) Chairman Rashid Langrial. Naeem Mir, Chairman of the Supreme Council All Pakistan Traders Association, also participated via video link from Lahore. Aurangzeb highlighted the necessity of reforming the wholesale and retail sectors, which have historically remained outside the tax net, despite their substantial contribution to the economy. He assured small traders that the government would introduce measures to make compliance easier and less burdensome. Naeem Mir lauded the FBRâ€™s adoption of advanced technologies, such as data analytics and Artificial Intelligence (AI), to combat tax evasion. He emphasized that this modernized approach aligns with Prime Minister Shehbaz Sharifâ€™s vision of digitalizing tax operations, a shift aimed at improving efficiency and reducing manual intervention. The trade representatives expressed their readiness to collaborate with the government in its efforts to expand the tax network. They assured their support for initiatives designed to promote transparency and fairness in the tax collection process. Aurangzebâ€™s assurances come at a time when the government is striving to stabilize the economy and increase revenue collection. The inclusion of small traders and shopkeepers in the tax net is seen as a critical step toward achieving these goals while fostering a culture of compliance and responsibility. The meeting concluded with a mutual understanding of the need for collective efforts to strengthen the tax system, with all stakeholders pledging their cooperation for the greater good of the country.

Date: 2024-12-03

Details: December 3, 2024 KARACHI, December 3, 2024 â€“ The Federal Board of Revenue (FBR) has updated advance tax rates applicable to marriage gatherings across Pakistan for the tax year 2025. These updates, issued under Section 236CB of the Income Tax Ordinance, 2001, aim to enhance compliance and revenue collection from events held at marriage-related venues. Key Provisions of Section 236CB According to the FBR, advance tax is to be collected by prescribed entities from individuals arranging or hosting marriage functions. Sub-section (1) mandates that the tax be charged on the total bill for events held at marriage halls, marquees, hotels, restaurants, commercial lawns, clubs, community centers, or any other venue used for such purposes, subject to prescribed limitations. In cases where food, services, or facilities are provided by a third party, Sub-section (2) stipulates that the prescribed person must collect additional advance tax on these payments from the host. Sub-section (3) clarifies that all advance tax collected under Section 236CB is adjustable against the taxpayerâ€™s overall liability. Definitions and Applicability Sub-section (4) of the ordinance expands on relevant definitions. A â€œfunctionâ€ includes not just marriage events but also wedding-related celebrations, seminars, workshops, exhibitions, concerts, and other similar gatherings. The term â€œprescribed personâ€ encompasses owners, leaseholders, operators, or managers of marriage venues, whether halls, marquees, hotels, or lawns. Updated Tax Rates for Marriage Functions The revised tax rates outlined in Section 236CB impose a 10% advance tax on the total bill for individuals listed on the Active Taxpayers List (ATL). For those not appearing on the ATL, the rate doubles to 20%, underscoring the FBRâ€™s push to encourage registration on the taxpayer roll. Marriage gatherings, being prominent social events, represent a significant segment of taxable activities in the hospitality sector. These new rates aim to ensure equitable taxation and foster compliance while generating substantial revenue from the growing trend of elaborate wedding celebrations. The FBR emphasizes that venue operators and service providers must rigorously adhere to these regulations, ensuring efficient tax collection on marriage-related functions throughout the country.

Date: 2024-12-03

Details: KARACHI, December 3, 2024 â€“ The Federal Board of Revenue (FBR) has announced updated advance tax rates on the sale or transfer of immovable property in Pakistan for the tax year 2025. These changes, outlined under Section 236C of the Income Tax Ordinance, 2001, aim to streamline tax compliance and ensure clarity for property transactions. The FBR specifies that under Sub-section (1) of Section 236C, any entity responsible for registering, recording, or attesting property transfers is required to collect advance tax from the seller or transferor at the rates prescribed in Division X of Part IV of the First Schedule. These entities include local authorities, housing societies, real estate projects, joint ventures, and private registrars. Exemptions Defined by the FBR Certain categories are exempt from this provision, including dependents of Pakistan Armed Forces martyrs, individuals who die in service of the armed forces or government, and war-wounded personnel. The FBR clarified that this exemption applies to the first sale of immovable property allotted by the government or a recognized authority, in acknowledgment of services rendered by the aforementioned individuals. For non-resident Pakistanis holding a Pakistan Origin Card (POC), National Identity Card for Overseas Pakistanis (NICOP), or a CNIC, who acquired property via a Foreign Currency Value Account (FCVA) or NRP Rupee Value Account (NRVA), the tax collected on such transactions will serve as the final discharge of tax liability for capital gains. Adjustability and Minimum Tax The FBR stated that the advance tax collected is adjustable, except when the property is both acquired and disposed of within the same tax year. In such cases, it will be treated as a minimum tax. Moreover, under Sub-section (2A), property transfers cannot be registered unless the seller provides evidence of discharging tax liabilities under Section 7E. Revised Tax Rates by the FBR â€¢ Transactions â‰¤ Rs. 50 million: ATL 3%, Late Filers 6%, Non-ATL 10%. â€¢ Rs. 50â€“100 million: ATL 3.5%, Late Filers 7%, Non-ATL 10%. â€¢ > Rs. 100 million: ATL 4%, Late Filers 8%, Non-ATL 10%. These measures by the FBR aim to bolster transparency and revenue collection in Pakistanâ€™s real estate sector.

Date: 2024-12-03

Details: ISLAMABAD: The federal government has confirmed that provinces failed to meet the deadline for amending their agriculture income tax legislation, which was set for October 2024. This was disclosed during a presentation to the National Assembly Standing Committee on Finance, where officials provided an update on the quantitative performance criteria and structural benchmarks related to Pakistanâ€™s ongoing International Monetary Fund (IMF) program. The committee was informed that each province was required to amend its agriculture income tax laws in order to align with the federal personal income tax regime for small farmers and the federal corporate income tax system for commercial agriculture. These changes were essential to ensure the commencement of taxation from January 1, 2025. However, the deadline for these amendments, which was set for the end of October 2024, has now been missed by the provinces. Despite the missed deadline, progress has been made in some regions. Officials revealed that Punjab has successfully enacted the necessary legislation. In Khyber Pakhtunkhwa (KP), the law has been approved by the provincial cabinet, and it is now awaiting presentation in the assembly. In Balochistan, the law was approved on November 11, 2024, and is also waiting for assembly approval. However, in Sindh, the provincial cabinet has not yet sought approval for the amendments, although work on the law has already been completed. The Finance Ministry officials also outlined that the federal government plans to introduce a 5% Federal Excise Duty (FED) on pesticides and fertilizers in the upcoming fiscal budget. This move is part of broader revenue collection efforts, which include increasing the provincesâ€™ tax collections in key areas such as sales tax on services, property tax, and agricultural income tax. According to the document presented to the committee, the federal and provincial governments had agreed to a series of steps aimed at improving revenue collection and devolution of spending responsibilities. These include transitioning the services GST system to a negative list approach starting in FY 2025-26, raising corporate tax revenue from agriculture, and expanding property taxation. Additionally, provinces are expected to make contributions to federal health and education initiatives and reduce their involvement in support price announcements for raw commodities. Governance measures have also been outlined, such as the implementation of the Electronic Pakistan Acquisition and Disposal System (e-PADS) and the adoption of green budget tagging by June 2025. Furthermore, provinces are expected to cooperate with national agencies like the Financial Monitoring Unit (FMU) and the National Accountability Bureau (NAB) to enforce anti-corruption and financial transparency measures. The deadline missed by the provinces highlights the challenges in aligning provincial and federal fiscal strategies, but the government continues to work on key reforms aimed at improving tax compliance, expanding revenue sources, and strengthening governance at all levels.

Date: 2024-12-02

Details: December 2, 2024 Islamabad, December 2, 2024 â€“ The Appellate Tribunal Inland Revenue (ATIR) Islamabad dismissed an appeal filed by the Federal Board of Revenue (FBR) against M/s. Supernet Limited. The tribunal ruled the appeal non-maintainable under the amended provisions of the Income Tax Ordinance, 2001, introduced through the Tax Laws (Amendment) Act, 2024. The case originated from an appeal filed by the Commissioner Inland Revenue (CIR) of the Large Taxpayers Office (LTO), Islamabad. This appeal challenged an earlier decision by the Commissioner Inland Revenue (Appeals-I), dated April 30, 2024, concerning tax matters for the year 2018. The core issue revolved around whether the amended Section 131 of the Income Tax Ordinance allowed the Commissioner to appeal as a â€œperson.â€ During the proceedings, objections were raised by the respondentâ€™s legal representative regarding the applicability of Section 131, as redefined in the amendment. The revised section replaced the terms â€œtaxpayer or Commissionerâ€ with â€œany personâ€ as eligible appellants. This shift sparked a legal debate about whether the Commissioner, as defined under Section 2(13), could be categorized as a â€œpersonâ€ under Section 2(42) and Section 80 of the ordinance. The ATIR highlighted the deliberate exclusion of the term â€œCommissionerâ€ from the revised section, noting that while the unamended version explicitly granted appeal rights to both taxpayers and Commissioners, the amendment restricts appeals to â€œany personâ€ other than a state-owned enterprise (SOE). Furthermore, the tribunal observed that while the amended Section 133 still allows the Commissioner to file a reference application before the High Court, such provisions do not extend to appeals under the newly substituted Section 131. The departmentâ€™s representative argued that the appeal was filed before the amendmentâ€™s implementation and should therefore be considered under the earlier provisions. However, the tribunal rejected this argument, asserting that the amendment applied at the time of adjudication. In its detailed judgment, the ATIR concluded that the appeal did not align with the amended legal framework and dismissed it as non-maintainable. This ruling underscores the importance of understanding legislative changes and their implications on ongoing and future tax cases. It also highlights the need for clear statutory language to avoid ambiguities in legal interpretations.

Date: 2024-12-02

Details: Karachi, December 2, 2024 â€“ The Karachi Chamber of Commerce and Industry (KCCI) has urged the authorities to remove the Minimum Retail Price (MRP) regulation from the tax valuation of tea. In a statement issued on Monday, KCCI President Muhammad Jawed Bilwani expressed strong opposition to the recent decision by the Federal Board of Revenue (FBR) to set the MRP of Rs1200 per kg on the import of black tea in bulk, which is then subject to sales tax and withholding tax. Bilwaniâ€™s remarks came in response to concerns raised by the Pakistan Tea Association (PTA), which believes that the MRP fixation would harm legitimate tea importers and further exacerbate the financial strain on lower-income households in Pakistan. The KCCI president emphasized that this regulation would not only force importers to pay higher taxes but would also push up the prices of tea, making it unaffordable, particularly for economically disadvantaged segments of society. â€œThe imposition of a flat MRP per kilogram will disproportionately affect the lower-income groups, particularly in urban and rural areas,â€ Bilwani explained. â€œThis policy places an additional financial burden on households already struggling with inflation and the rising cost of essential goods.â€ Bilwani made these statements during a meeting with the PTA delegation at the KCCI, which included PTA Chairman Muhammad Altaf, KCCI Vice President Faisal Khalil Ahmed, Chairman of KCCIâ€™s Federal Taxation Subcommittee Abu Bakar Shamsi, and several other key stakeholders from both KCCI and PTA. Bilwani proposed that instead of a uniform MRP, a more nuanced approach should be adopted. He pointed out that black tea is imported at prices ranging from $0.80 to $4.5 per kg, yet the MRP regulation would force all tea, regardless of cost, to be taxed as though it were Rs1200 per kg, significantly inflating the cost for consumers. This would make even the least expensive tea unaffordable for the masses, he said. Further, Bilwani raised concerns about the exemptions given to areas like FATA and PATA, highlighting that these regions accounted for 23 million kilograms of tea in 2023-24. While this tea was exempt from taxes, much of it ended up being sold in other parts of Pakistan, depriving the national exchequer of an estimated Rs25 billion annually. PTA Chairman Muhammad Altaf echoed KCCIâ€™s concerns, stating that the MRP fixation ignores the nature of tea trade, where tea is imported in bulk, processed, and then sold. He urged that the sales tax be applied based on the import value, as specified under the Sales Tax Act, rather than a fixed MRP, which could increase tea prices by Rs150 to Rs300 per kg. Altaf warned that if this policy continued, it would lead to substantial revenue losses, not only for tea traders but for the national economy as well. He called on KCCI to support their efforts in addressing the issue. The KCCI has promised to work closely with PTA to seek a resolution and ensure that Pakistanâ€™s tea industry remains competitive while protecting consumers from unjust tax policies.

Date: 2024-12-02

Details: Karachi, December 2, 2024 â€“ The Federal Board of Revenue (FBR) has introduced significant amendments to the rules governing the temporary import of vehicles by tourists into Pakistan. These changes, formalized through SRO 1965(I)/2024 on November 27, 2024, modify Rule 77 of the Customs Rules, 2001, with stricter conditions and streamlined processes. According to the FBR, tourists importing vehicles under a carnet-de-passage or against a bank guarantee can retain the vehicle in Pakistan for up to three months without paying customs duties. This allowance is contingent on the tourist declaring at the customs entry point that they will not transfer ownership of the vehicle during their stay. The FBR has clarified that if exporting the vehicle within the initial three-month period is impractical, tourists can request an extension from the relevant Collector. This extension, not exceeding three additional months, is conditional on a valid carnet-de-passage or bank guarantee and a commitment to remain in the country during the extended period. However, the FBR has imposed restrictions to prevent misuse of these provisions. Vehicles re-entering Pakistan within one year of their exit, whether owned by the same non-Pakistani tourist or a different one, will only be granted temporary release for 14 days, unless operated by recognized foreign tour agencies. Such agency-operated vehicles may be allowed a maximum re-entry period of three months. In cases where exporting the vehicle becomes impossible due to health issues, accidents, or other uncontrollable circumstances, the FBR permits an additional extension of up to six months. This requires approval from the Chief Collector of Customs and a fresh bank guarantee if the existing one does not cover the extended period. The FBR emphasized that failure to obtain a valid extension will result in the vehicle being surrendered to the jurisdictional Collectorate for adjudication. Additionally, the FBR has allowed vehicles passing through Pakistan en route to another country to transit without a carnet-de-passage or bank guarantee. These vehicles will travel under Customs escort, with the applicable charges determined by the respective Collector. The vehicleâ€™s particulars will also be noted on the touristâ€™s passport. The FBRâ€™s amendments aim to enhance regulation while accommodating genuine tourists, ensuring compliance and preventing the misuse of temporary import facilities.

Date: 2024-12-02

Details: Karachi, December 2, 2024 â€“ The Federal Board of Revenue (FBR) has added approximately 0.3 million taxpayers to its Active Taxpayers List (ATL) for the tax year 2024 during November. The updated list now reflects 5.64 million active taxpayers as of December 1, 2024, based on income tax returns filed up to that date. The latest ATL was initially released on November 1, 2024, with 5.34 million active taxpayers. The addition of 300,000 taxpayers marks significant progress in expanding Pakistanâ€™s tax net and improving compliance. The FBRâ€™s updated procedures, introduced via amendments under SRO 1638(I)/2024, have modernized the ATL system. Unlike previous years, when the ATL was issued annually in March, the new framework mandates its release immediately after the tax filing deadline. Daily updates to the ATL now ensure real-time recognition of taxpayersâ€™ compliance, allowing them to achieve active status promptly upon filing their returns. â€œThis daily update mechanism demonstrates FBRâ€™s dedication to operational transparency and efficiency,â€ an official from the FBR stated. â€œIt ensures the ATL remains a dynamic and accurate reflection of the taxpayer base, benefiting all stakeholders involved.â€ Taxpayers filing their Income Tax Returns (ITR) on time, or within any granted extension, are automatically included on the ATL. Late filers can still attain active status, but only after paying a surcharge as outlined in Section 182A of the Income Tax Ordinance. This balanced approach, combining flexibility with stringent measures, aims to foster a more inclusive tax culture. To further boost compliance, the FBR has introduced strict penalties for non-filers, which will be enforced following the ATL 2024 release. Penalties include suspension of mobile phone SIM cards, disconnection of utilities, and restrictions on foreign travel. These measures are part of FBRâ€™s broader strategy to deter tax evasion and encourage timely filings. Certain exemptions apply, including for holders of the National Identity Card for Overseas Pakistanis (NICOP), minors, students, and individuals traveling abroad for religious purposes such as Hajj or Umrah. The revamped ATL system highlights FBRâ€™s commitment to strengthening Pakistanâ€™s tax infrastructure. By enhancing taxpayer recognition and fostering compliance, the initiative aims to build trust between citizens and the state, paving the way for greater fiscal stability and sustainable economic growth.

Date: 2024-12-01

Details: Karachi, December 1, 2024 â€“ In an uncommon weekend move, the Federal Board of Revenue (FBR) announced a significant reshuffling of Inland Revenue Service (IRS) officers, signaling its urgency to address a growing revenue shortfall. A total of 60 IRS officers, ranging from BS-17 to BS-20, were transferred to new positions. These ranks, critical to revenue operations, include Commissioners, Additional Commissioners, Deputy Commissioners, and Assistant Commissionersâ€”key roles tasked with assessment, auditing, and tax recovery. The timing and scale of these changes underscore the FBRâ€™s efforts to bolster revenue collection, particularly as the first five months of the fiscal year (Julyâ€“November) have witnessed a widening gap between actual collections and targets. This reshuffle reflects the FBRâ€™s intent to bridge the revenue deficit in December, a pivotal month for tax receipts. During this period, the board expects to collect advance taxes and income tax returns from the corporate sector. Decemberâ€™s revenue performance is vital, especially with economic pressures mounting on Pakistanâ€™s fiscal stability. However, critics argue that such mid-year administrative shifts may hinder rather than help revenue efforts. They contend that officers familiar with their jurisdictions are better positioned to ensure taxpayer compliance and maximize collections. Reassigned officers, in contrast, may require time to adjust to their new roles, potentially slowing progress in achieving targets. Notably, this is not the first instance of such measures; a similar reshuffle was undertaken in November, but it failed to yield the desired results. Skeptics caution that frequent transfers could disrupt continuity and diminish efficiency, especially in high-pressure months like December. The urgency behind the FBRâ€™s latest move highlights the challenges faced by the organization in navigating economic pressures and achieving its fiscal objectives. Whether this strategy will improve revenue collection remains to be seen, but it has undoubtedly sparked debate over its potential impact during a crucial period for Pakistanâ€™s tax administration.

Date: 2024-12-01

Details: Karachi, December 1, 2024 â€“ The Federal Board of Revenue (FBR) has reaffirmed its advance income tax policy on the sale of property and goods through auctions for the tax year 2025. The FBR has announced that the existing tax rates will remain unchanged, ensuring consistency in its approach to revenue collection under Section 236A of the Income Tax Ordinance, 2001. Scope of Section 236A Section 236A mandates the collection of advance income tax from individuals or entities involved in property and goods transactions conducted through public auction or tender. This applies to a variety of sellers, including: 1. Government and local authorities. 2. Foreign contractors or consultants. 3. Companies and consortiums. 4. Customs or Inland Revenue collectors. The tax is computed on the gross sale price and is collected from the buyer at the time of the transaction. Notably, auctions involving confiscated or attached goods, as well as the renewal of licenses previously awarded through auction or tender, also fall within the scope of this provision. If payments are made in installments, advance tax is collected with each installment to ensure compliance and consistent revenue collection. Tax Credits and Final Taxation Buyers are eligible for a credit on the advance tax paid in the year of purchase, subject to specific provisions. For taxpayers falling under Sections 98B or 145, the credit applies to the relevant tax year as determined by the timeline outlined in these sections. However, in cases involving the lease of toll collection rights, the tax collected is considered final, with no further adjustments or credits applicable. Tax Rates for Auctions The advance income tax rates vary depending on the nature of the property and the taxpayerâ€™s compliance status: 1. Goods and property (excluding immovable property): â€¢ ATL-listed individuals: 10% of the gross sale price. â€¢ Non-ATL individuals: 20% of the gross sale price. 2. Immovable property and train management services auctioned by Pakistan Railways: â€¢ ATL-listed individuals: 5% of the gross sale price. â€¢ Non-ATL individuals: 10% of the gross sale price. Broader Implications These provisions emphasize the governmentâ€™s commitment to increasing tax compliance and broadening the tax base. By imposing higher tax rates on non-compliant individuals not listed on the Active Taxpayers List (ATL), the FBR aims to incentivize registration and discourage tax evasion. This policy, though stringent, reflects the FBRâ€™s ongoing efforts to optimize revenue collection while ensuring fairness in the taxation process. It plays a crucial role in stabilizing Pakistanâ€™s fiscal framework amidst economic challenges.

Date: 2024-12-01

Details: Karachi, December 1, 2024 â€“ The Federal Board of Revenue (FBR) has reiterated its policy of collecting advance income tax from telephone and internet users under Section 236 of the Income Tax Ordinance, 2001. This move, applicable for the tax year 2025, ensures continuity in the tax rates for most users while enforcing stricter penalties for non-compliant taxpayers. The FBR stated that the tax rates outlined in the Income Tax General Order (ITGO) apply to individuals not listed on the Active Taxpayers List (ATL). These measures aim to enhance compliance and discourage tax evasion, particularly from non-compliant individuals who face significantly higher rates. Scope of Advance Income Tax Section 236 mandates the collection of advance income tax on several telecommunication and internet-related transactions, including: â€¢ Telephone bills: Applicable to subscribers. â€¢ Prepaid cards: For telecommunication and internet services. â€¢ Electronic transactions: Sale of units via any electronic medium. â€¢ Internet bills: For individual subscribers. The process for tax collection varies by transaction type. Service providers issuing telephone or internet bills are responsible for including the advance tax in the billing process. Similarly, sellers of prepaid cards and electronic units must collect this tax at the point of sale. Exemptions The following entities and individuals are exempt from this tax: 1. Government bodies. 2. Foreign diplomats or diplomatic missions. 3. Tax-exempt individuals who provide a certificate from the Commissioner. Advance Tax Rates The applicable rates under Section 236 are as follows: â€¢ Landline telephone users: For monthly bills exceeding Rs. 1,000, a 10% tax applies to the amount exceeding this threshold. â€¢ Internet and mobile phone users: A 15% tax is charged on the bill amount or the sale price of prepaid cards and electronic units. â€¢ Non-compliant taxpayers (under ITGO): A steep 75% tax is imposed on the same transactions for individuals not listed on the ATL. Implications These measures reflect the governmentâ€™s efforts to broaden the tax net and ensure equitable revenue collection. Non-compliant individuals are heavily penalized, incentivizing registration on the ATL. Meanwhile, regular taxpayers face consistent rates, underscoring the importance of compliance for financial accountability. This policy, while controversial, aligns with the governmentâ€™s strategy to strengthen Pakistanâ€™s revenue base amid economic challenges.

Date: 2024-12-01

Details: Karachi, December 1, 2024 â€“ Chief Financial Officers (CFOs) of companies implicated in submitting fake sales tax invoices are under strict scrutiny by the Federal Board of Revenue (FBR). The national tax agency has vowed to take severe actions against individuals and organizations involved in such fraudulent practices, which have caused significant losses to the national exchequer. According to FBR officials, the agency remains resolute in its policy to act against CFOs who verify monthly sales tax returns containing fake or â€œflyingâ€ invoices. Legal provisions empower the FBR to arrest such individuals, emphasizing a no-tolerance approach to tax fraud. While the FBR refrains from publicizing the names of accused CFOs, the focus is on recovering the evaded tax amounts along with penalties, additional taxes, and default surcharges. Officials clarified that public disclosures would only follow if recovery efforts fail. The current crackdown is unprecedented in Pakistanâ€™s history, targeting senior executives and key players in the corporate sector, particularly those in large organizations complicit in sales tax fraud. Political backing has strengthened the FBRâ€™s resolve, enabling enforcement against influential individuals and companies involved in tax evasion. In one notable case, a prominent textile exporter in Faisalabad was compelled to deposit a substantial sum, including the evaded principal tax and associated penalties, signaling the FBRâ€™s seriousness in combating fraud. The revenue loss from such schemes is estimated to run into hundreds of millions of rupees. The crackdown forms part of a nationwide campaign to dismantle organized networks of fraudsters and beneficiaries while enhancing overall tax compliance. Arrests of CFOs from major textile companies mark a significant milestone in the FBRâ€™s efforts to ensure accountability within influential sectors. FBR sources revealed that CFOs implicated in such frauds have been urged to settle their outstanding liabilities, amounting to billions of rupees, including principal amounts and penalties, to avoid legal prosecution. This aggressive stance by the FBR demonstrates its commitment to curbing tax fraud and safeguarding public revenue, setting a new precedent for transparency and accountability in Pakistanâ€™s corporate and taxation landscape.

Date: 2024-12-01

Details: Islamabad, December 1, 2024 â€“ The Federal Board of Revenue (FBR) is grappling with an expanding revenue shortfall for November 2024, compounding challenges in meeting the national tax agencyâ€™s collection targets for the fiscal year. The FBR was tasked with collecting over Rs 1 trillion in November 2024. However, provisional figures indicate revenue collection reached approximately Rs 855 billion, falling short by Rs 148 billion. Officials expect this figure to rise marginally by Rs 4â€“5 billion upon final reconciliation and data compilation, but the gap will remain significant. During the first five months of FY 2024â€“25 (Julyâ€“November), the FBR collected Rs 4.295 trillion against a cumulative target of Rs 4.64 trillion, reflecting a shortfall of Rs 344 billion. Despite this, year-over-year growth has been notable, with November 2024 revenues totaling Rs 851 billion compared to Rs 736 billion in November 2023, marking an increase of Rs 115 billion. Sources attribute the November shortfall to several disruptive factors, including recent political protests and government-imposed lockdowns. These events brought economic activity to a halt for nearly five days, affecting key sectors such as manufacturing, trade, and services. The protests created a climate of uncertainty, severely impacting business operations and subsequently hindering tax collection efforts. Despite the eventual resolution of the political unrest, its ripple effects lingered throughout the month, contributing to an estimated revenue shortfall of Rs 160 billion against the ambitious target. FBR officials have acknowledged the impact of these disruptions on revenue performance and emphasized the need for stability to achieve fiscal objectives. Looking ahead, the FBR faces mounting pressure to bridge the cumulative shortfall as the fiscal year progresses. Enhanced enforcement measures, broadening the tax base, and addressing administrative inefficiencies will be critical in boosting collections. However, achieving the full-year target of Rs 9.415 trillion may require additional policy interventions and political stability. The widening revenue gap underscores the challenges confronting the FBR amidst a volatile political and economic landscape, highlighting the urgency of strategic reforms to meet the

Date: 2024-12-01

Details: ISLAMABAD: Islamabad High Court (IHC) has issued notices to the Federal Tax Ombudsman (FTO), Chairman Federal Board of Revenue (FBR) and Chief Commissioner Inland Revenue in connection with a petition challenging the decision that minute sheets in tax assessment proceedings constitute internal records of the FBR and are inaccessible to taxpayers. It is reliably learnt that the matter arose after a taxpayer, Khurram Shahzad Butt, sought access to specific documents (minute/ order sheets) from CTO, Islamabad, which are prepared during assessment proceedings by the CTO tax employee. CTOâ€™s refusal to provide copies of order sheets raises serious questions about transparency and accountability in the FBR. This lack of access to crucial documentation hinders FBRâ€™s ability to effectively communicate with the public. It is accused that the CTO is allegedly involved in an attempt to undermine the authority of SCP in Mukhtar Ahmad Ali vs. The Registrar, Supreme Court (2023 SCP 312) and binding verdicts in Waheed Shahzad Butt vs. FOP (PLD 2016 Lah. 872) read with Article 19A of the Constitution. Tribunal upholds tax authorityâ€™s right to correct erroneous assessment When contacted, Khurram Shahzad Butt told this correspondence that viewpoint in classifying order sheets as confidential documents constitute a blatant contempt of orders issued by the Supreme/ High Court and even contrary to orders passed by former FTO belonging to the judiciary. IHC order states â€œPetitioners are aggrieved by order pursuant to which a complaint seeking the order sheets maintained by the Taxation Officer in relation to tax assessment of the petitioners was denied. FTO did not appreciate that the minute sheet being referred to by the Tax Department actually means the order sheets in the assessment proceedings relating to the petitionersâ€™ case. Petitioners are entitled to a copy of such order sheets as they reflect the manner in which the adjudicatory process has been conducted by the taxation authorities. He states that the assessment order has been passed against the taxpayers and they have a right to be provided copies of the order sheets reflecting the manner in which the adjudication of tax demand was carried out by the Tax Department. Let notices be issued to the respondents for 23.01.2025, who will file report and para-wise comments within a period of seven days. Let respondents 3 and 4 ensure that responsible officers from their offices appear before the Court on the next date of hearing along with the record of the hearings in which assessment proceedings were carried out, IHC ordered. Copyright Business Recorder, 2024

Date: 2024-11-29

Details: Karachi, November 29, 2024 â€“ The Federal Board of Revenue (FBR) has announced an extension of tax exemptions for overseas Pakistanis involved in property transactions, reaffirming its commitment to facilitating expatriates. To streamline the process, the FBR has directed tax offices to ensure smooth implementation of these exemptions, particularly for sales and purchases of immovable properties by overseas Pakistanis holding a Pakistan Origin Card (POC) or a National Identity Card for Overseas Pakistanis (NICOP). According to the FBR, the exemptions are granted under Clause 111AC, introduced through the Finance Act, 2022, which amends the Income Tax Ordinance, 2001. This clause exempts non-resident individuals holding POC or NICOP from higher tax rates under Sections 236C and 236K, even if they are not listed on the Active Taxpayers List (ATL). To facilitate the process, the FBR is updating its IRIS tax system. Non-resident taxpayers wishing to claim these exemptions will need to upload their POC or NICOP details while creating their withholding tax challan under Sections 236C and 236K. Upon submission, a provisional Payment Slip ID (PSID) will be generated and forwarded to the Chief Commissioner Inland Revenue (CCIR) for review. The CCIR will then assign the case to the relevant Commissioner Inland Revenue (CIR) for verification of the applicantâ€™s non-resident status. Once the CIR confirms the taxpayerâ€™s eligibility, the exemption will be granted. The taxpayer will be notified via SMS and email, enabling them to proceed with their property transactions without incurring the higher tax rates. To expedite the process, the FBR has instructed CCIRs to ensure that verification and approval are completed within one business day. This swift resolution aims to enhance efficiency and provide convenience to overseas Pakistanis engaging in real estate transactions. The FBRâ€™s move reflects its ongoing efforts to strengthen ties with overseas Pakistanis by providing tax relief and simplifying processes, recognizing their vital contributions to the national economy. By ensuring priority handling and transparency, the FBR hopes to foster confidence and encourage further investment in Pakistanâ€™s real estate sector.

Date: 2024-11-29

Details: Islamabad, November 29, 2024 â€“ The Federal Board of Revenue (FBR) has called on the State Bank of Pakistan (SBP) to make special arrangements for facilitating tax payments on Saturday, November 30, 2024. In an official communication addressed to the SBP Governor, the FBRâ€™s Member Inland Revenue (Operations) emphasized the need for proactive enforcement measures to help achieve the revenue collection targets for the second quarter of the fiscal year 2024-25. The FBR noted that November, a crucial month for revenue collection, concludes on Saturday, November 30. According to the FBR, a significant portion of revenue is historically collected during the final days of the month, particularly in the last two or three days. To ensure taxpayers can meet their obligations without hindrance, the FBR urged the SBP to collaborate by extending working hours for tax deposit services. The FBR highlighted that, in previous instances, the SBP and the National Bank of Pakistan (NBP) have accommodated such requests by keeping their branches operational for extended hours. This cooperation has been pivotal in facilitating timely tax payments and achieving collection targets. To maintain this tradition, the FBR has requested that all SBP branches, authorized branches of NBP, and the National Institute of Facilitation Technologies (NIFT) remain open on Saturday, November 30, 2024, until 6:00 PM. The extended operational hours aim to streamline the process for taxpayers and support efficient revenue collection. Additionally, the FBR has requested arrangements to ensure that all tax collections made at NBP branches on November 30 are transferred to the SBP on the same day and accurately reported. This measure is intended to ensure smooth fund transfers and timely reconciliation of collected amounts. The FBRâ€™s proactive approach underscores the importance of achieving revenue goals to meet fiscal objectives, as well as the critical role of collaboration between financial institutions and tax authorities in this process.

Date: 2024-11-29

Details: ISLAMABAD, November 29, 2024 â€“ The Federal Board of Revenue (FBR) has projected a significant shortfall in revenue collection for November 2024, attributing it to disruptions caused by recent political protests and government-imposed lockdowns. The political turmoil, which brought economic activities to a standstill for five days, has severely impacted the FBRâ€™s ability to meet its revenue targets. While the protests have been dismantled, the resulting uncertainty and halts in business activity have led to an anticipated shortfall of Rs160 billion against the November target of Rs1,003 billion. So far, the FBR has managed to collect approximately Rs700 billion. If the projected shortfall materializes, it will exacerbate the existing revenue gap, increasing the cumulative shortfall for the first five months of the fiscal year to Rs349 billion. The FBR already recorded a deficit of Rs189 billion during the July-October period of the current fiscal year. Officials estimate that even with maximum effort, the FBR may collect Rs840-850 billion for November, leaving a gap of Rs150-160 billion. â€œThe lockdowns and disruptions from the PTI protest call have worsened the shortfall. Initial projections estimated a deficit of Rs100 billion, but the figure is now expected to rise significantly,â€ said a senior FBR official. This growing shortfall poses a challenge for the government in meeting the International Monetary Fundâ€™s (IMF) revenue targets. Under the IMF agreement, the government set an ambitious revenue collection target of Rs12,913 billion for the fiscal year 2024-25, with parliament approving an even higher goal of Rs12,970 billion. The FBR must achieve a revenue growth rate of 40% to meet these targets, a steep climb given the current shortfall and the 25% growth achieved so far compared to the previous fiscal year. With only two days remaining in November, the FBR faces mounting pressure to recover lost ground. However, continued political instability threatens further losses, leaving the government scrambling to address the fiscal challenges and reassure the IMF.

Date: 2024-11-29

Details: Karachi, November 29, 2024 â€“ Karachiâ€™s large taxpayers have paid Rs 12.50 billion as advance tax on electricity consumption during the first four months (July â€“ October) of the current fiscal year 2024-25, according to sources from the Federal Board of Revenue (FBR). The payment marks a significant surge, highlighting a substantial increase in tax collection for the period. The Large Taxpayers Office (LTO) Karachi, which is the primary revenue-generating arm of the FBR, has collected Rs 12.50 billion in advance tax payments on electricity consumption for the four-month period. This amount represents a 128% increase compared to the Rs 5.50 billion collected in the same period last year, according to FBR sources. The increase in tax revenue can be attributed to several factors, but the most significant of these is the unprecedented rise in electricity tariffs over the past year, which has resulted in higher electricity bills and, consequently, higher tax payments. The FBR collects advance tax on electricity consumption under Section 235 of the Income Tax Ordinance, 2001. This section mandates that advance tax is charged on the amount of electricity consumed by commercial, industrial, and certain domestic consumers. The tax is levied on the electricity bills issued to these consumers, and the rates vary based on the amount of the bill and the type of consumer. Key Provisions of Section 235 on Electricity Consumption: â€¢ Sub-section (1): Advance tax is collected on electricity consumption at rates specified in the First Schedule of the Income Tax Ordinance. However, domestic consumers listed on the Active Taxpayersâ€™ List (ATL) are exempt from this tax. â€¢ Sub-section (2): The electricity bill issuer is responsible for charging the advance tax in the same manner as other charges are applied to the bill, including sales tax and incidental charges. â€¢ Sub-section (3): Tax is not collected from individuals who provide a certificate proving their income is exempt or that they have already paid advance tax under Section 147 of the Ordinance. Additionally, individuals whose income is subject to a final tax regime are also exempt. â€¢ Sub-section (4): The advance tax collected under this section is treated as a minimum tax for taxpayers other than companies if the total bill amount does not exceed Rs 360,000 annually. For companies, the advance tax is adjustable against the tax liability at the end of the fiscal year. The tax rate is tiered according to the size of the bill. For example: â€¢ For bills up to Rs 500, no tax is applied. â€¢ For bills exceeding Rs 500 but not more than Rs 20,000, a tax rate of 10% is applied. â€¢ For bills over Rs 20,000, the tax rate becomes Rs 1,950 plus 12% of the amount exceeding Rs 20,000 for commercial consumers, and 5% for industrial consumers. Domestic consumers are charged differently, with no tax on bills below Rs 25,000, and a tax rate of 7.5% for bills of Rs 25,000 or more. Tax Collection Performance for October 2024 In October 2024, the FBR recorded Rs 2.05 billion in advance tax collection on electricity consumption. This was a notable increase of 21% compared to the Rs 1.7 billion collected in October 2023. This surge in collections reflects both the increase in electricity rates as well as growing compliance with tax regulations by large consumers in Karachi. The significant rise in advance tax payments highlights not only the impact of higher electricity costs but also the FBRâ€™s continued efforts to ensure that large taxpayers are contributing appropriately to the national tax revenue. The collected Rs 12.50 billion in advance tax will go a long way in supporting the federal governmentâ€™s fiscal objectives, as it strives to meet its budgetary goals for the year. Despite the challenges posed by rising electricity costs, the FBR has shown resilience in its revenue collection efforts, with the tax paid by Karachiâ€™s large taxpayers serving as a vital source of income for the government. As electricity consumption continues to be a major component of business expenses in Karachi, it is expected that this trend in tax collection will continue to grow in the coming months.

Date: 2024-11-29

Details: ISLAMABAD, November 29, 2024 â€“ The Federal Board of Revenue (FBR) has reported that over 1,500 exporters are utilizing the Export Facilitation Scheme (EFS), enabling duty- and tax-free imports into Pakistan. FBR officials highlighted that EFS has become the leading export-focused initiative, simplifying processes for exporters through single administrative documents, with particular emphasis on small and medium enterprises. Currently, more than 1,500 exporters are benefitting from this scheme. Under the EFS, manufacturers-cum-exporters (users) must now pay sales tax on the procurement of locally sourced input goods used in finished products. According to SRO 1042(I)/2024, users can acquire input goods without customs duties, federal excise duties, sales tax, or withholding tax, based on their authorization. All such input goods must be retained within the userâ€™s declared manufacturing premises. The scheme allows the duty- and tax-free import of input goods through a Goods Declaration referencing the userâ€™s authorization. However, local input goods must be procured with applicable sales tax, as per FBRâ€™s statement. Revised rules have further expanded the scope of EFS, enabling manufacturers-cum-exporters to import specific textile inputs within allocated quotas. Additionally, the FBRâ€™s report addressed measures to mitigate the shortage of petroleum products in the country. A new scheme was introduced for the import, domestic sale, and re-export of petroleum products on foreign suppliersâ€™ accounts under customs bonded facilities. Operationalization involved rule notifications by the FBR in coordination with relevant ministries and stakeholders. To address congestion at dry ports and reduce clearance times, the FBR has notified additional dry ports and Customs stations. These include Dry Port Jia Bagga, M/s Sky Media (Pvt) Ltd, Karachi, and M/s Seaboard Logistics (SMC-PVT) Ltd, Karachi. The Qasim Freight Station Off-dock Terminal Karachi has also been declared a customs station, along with an expansion of areas covered by existing customs facilities.

Date: 2024-11-28

Details: Karachi, November 28, 2024 â€“ The Pakistan Tax Bar Association (PTBA) has called on the Federal Board of Revenue (FBR) to share updates on the progress made following its initiatives for documenting the economy and enhancing the tax systemâ€™s productivity through digital transformation. In a letter addressed to FBR Chairman Rashid Mahmood Langrial, PTBA President Anwar Kashif Mumtaz commended the FBRâ€™s steps toward digital transformation. He emphasized the importance of transparency in these initiatives, stating, â€œWe would appreciate it if you could kindly share the progress on the following areas of concern, which are crucial for the documentation of the economy and the productivity of the tax system.â€ The PTBA noted that the FBR has legitimized the category of non-filers by imposing higher tax deduction rates under various provisions of the Income Tax Ordinance, 2001. FBR officers have significant information on non-filers, collected during audits, monitoring of withholding taxes, and further tax paid under the Sales Tax Act, 1990. This includes taxes deducted under Sections 236G and 236H of the Income Tax Ordinance. The PTBA requested the FBR to provide data on non-filers who have transitioned to filers. The PTBA also highlighted that over two years have passed since the implementation of the point-of-sale (POS) system to document the supply chain. It inquired about the number of POS installations across Pakistan and the impact of this initiative on tax revenue collected through the real-time invoice mechanism. Additionally, the PTBA expressed concern over fraudulent refund and input claims by taxpayers, which the FBR frequently highlights in the media. It requested the FBR to publish data on registered FIRs, amounts of tax evaded, and actions taken against offenders. The PTBA raised concerns about ongoing challenges taxpayers face in obtaining refunds, despite the establishment of refund zones. It urged the FBR to share statistics on refund zone performance and expedite automated refund processes, particularly for salaried individuals, to build trust between taxpayers and the FBR. Finally, the PTBA requested clarity on the monitoring of withholding taxes through technology introduced under the Finance Act, 2022, specifically SWAPS and SWAPS agents. It sought a timeline for the implementation of this technology to enhance tax compliance and monitoring.

Date: 2024-11-28

Details: Karachi, November 28, 2024 â€“ The Federal Board of Revenue (FBR) has clarified that no reductions in property valuations are available under its latest notification for Karachi. The Regional Tax Office (RTO) â€“ 1 Karachi, a key arm of the FBR, issued this clarification in response to doubts raised about Notification No. SRO 1724(I)/2024, dated October 29, 2024, which outlines updated property valuation tables for the city. The FBR explained that the new notification explicitly supersedes the earlier SRO 345(I)/2022, dated March 2, 2022. The withdrawal of the earlier notification nullifies the calculation method for rebate allowances, effectively removing any reductions in property values previously available. This clarification was issued in response to a query from the sub-registrar of SITE Town, Karachi. The move has sparked concerns across Karachiâ€™s real estate sector, particularly as it follows a well-structured valuation system introduced under the now-superseded March 2022 notification. That system had provided specific rebates for property valuations based on factors such as the age, location, and structure of buildings. It also offered allowances for older buildings and multi-story properties, ensuring a more equitable tax assessment that reflected market realities. Prominent High Court advocate Owais Yakoob Kapadia recently addressed the issue in a formal letter to the FBR Chairman. Kapadia criticized the abrupt removal of rebates without prior notice or consultation with stakeholders, describing it as a departure from established practices that could destabilize Karachiâ€™s real estate market. He argued that the March 2022 notification introduced crucial fairness by factoring in a propertyâ€™s desirability and livability, helping property owners manage their tax liabilities effectively. Kapadia also highlighted the potential fallout of the new SRO, which omits critical deductions. He warned that property owners, particularly those with older buildings or multi-storey structures, could face significantly higher tax assessments. These increased tax burdens could disrupt financial planning, especially for middle-income property owners who rely on such rebates to balance costs. The FBRâ€™s clarification reinforces its stance that the rebates are no longer in effect. However, this decision has raised concerns about the potential impact on Karachiâ€™s real estate market, as stakeholders seek clarity on how these changes will affect long-term property valuations and market stability.

Date: 2024-11-28

Details: Islamabad â€“ The Federal Board of Revenue (FBR) has embarked on an ambitious initiative to register 1.35 million potential taxpayers identified through third-party data analysis. The FBR has shared this data with Inland Revenue field formations, tasking them with further action to expand the tax base. According to the FBRâ€™s 2023-24 report on broadening the tax base, this effort is part of a comprehensive strategy leveraging technology, data analytics, and real-time collaboration with key organizations. A major highlight is the ongoing partnership with NADRA to establish real-time, machine-to-machine data integration with entities managing financial transaction records. The FBR has adopted innovative tools, such as monitoring dashboards and targeted nudging campaigns. High-profile unregistered individuals are being contacted via SMS and WhatsApp messages, urging them to file their returns. In addition, the FBR has launched a media awareness campaign to encourage taxpayers to utilize the revamped Maloomat portal for easier tax compliance. To bolster these efforts, the FBR has signed MoUs with 28 organizations for real-time data sharing. A special committee, led by the NADRA Chairman and senior officials, has been established to provide recommendations for widening the tax base. These recommendations are now being implemented. The FBR has also upgraded its infrastructure, designating 145 District Tax Offices (DTOs) with specific jurisdiction to target non-filers. As part of enforcement measures, telecom companies have been instructed to temporarily disable SIMs of non-filers under Section 114B of the Income Tax Ordinance, 2001. In the 2023 tax year, the FBR achieved a record-breaking 3.6 million new taxpayer registrations, with over 1.78 million filing their returns. Further enhancements, including the introduction of thresholds under Clause 2(43A)(g) through SRO 1842 of 2023, have streamlined the integration of Tier-1 retailers into the tax net. Retailers whose deductible withholding tax under Sections 236G or 236H exceeds prescribed limits are now subject to integration requirements. These measures reflect the FBRâ€™s commitment to increasing tax compliance and fostering a more inclusive taxation system. By leveraging technology, data integration, and targeted campaigns, the FBR aims to strengthen Pakistanâ€™s tax infrastructure and broaden the revenue base.

Date: 2024-11-28

Details: Islamabad, November 28, 2024 â€“ The Pakistan Carpet Manufacturers and Exporters Association (PCMEA) has called for immediate relief from customs duties that are severely hampering the survival and growth of the carpet manufacturing sector. A delegation from the association, led by Abdul Latif Malik (Patron In-Chief), Usman Ashraf (Senior Vice Chairman), and Riaz Ahmed (Vice Chairman), met with Federal Minister for Commerce, Jam Kamal Khan, to discuss the ongoing challenges facing the industry. During the meeting, Abdul Latif Malik explained the intricate process involved in the production of Pakistani carpets. Raw materials are sent to Afghanistan, where carpets are initially woven, and then returned to Pakistan for final processing before being exported globally. Despite this complex supply chain and the fact that 99% of these carpets are destined for export, the sector has been unable to benefit from customs duty exemptions provided by the Federal Board of Revenue (FBR). This lack of incentives is putting immense pressure on the sector, especially small and medium-sized enterprises (SMEs), many of which are being forced to close down due to the burden of customs duties at the Afghan-Torkham border. Abdul Latif Malik stressed that for the survival and growth of the industry, it is crucial to make semi-finished carpets duty-free. â€œTo save this sector and ensure its future, it is essential to provide a lifeline through duty relief,â€ he stated, emphasizing that government support is vital to maintaining the competitiveness of Pakistanâ€™s carpet exports. Minister Jam Kamal Khan expressed his full support for the sector, recognizing its potential as a key driver of export growth for Pakistan. He underscored the importance of promoting â€œMade in Pakistanâ€ products and addressing intellectual property concerns, particularly the protection of patents for Pakistani carpets. The Minister also proposed organizing a meeting with the FBR and other relevant stakeholders in the near future to discuss solutions and address the sectorâ€™s pressing concerns. The PCMEA is hopeful that with timely government intervention, the sector can regain its competitive edge in international markets, enabling carpet manufacturers to thrive and contribute significantly to Pakistanâ€™s export economy.

Date: 2024-11-27

Details: Karachi, November 27, 2024 â€“ The Federal Board of Revenue (FBR) has reported a significant increase in tax collection from new car registrations, reflecting a 111% surge in the first four months of the fiscal year 2024-25 (Julyâ€“October). The Large Taxpayers Office (LTO) Karachi, the major revenue collection arm of the FBR, revealed that Rs 1.11 billion was collected during this period, up from Rs 526 million in the corresponding months of the previous fiscal year. Factors Behind the Surge The rise in tax collection is attributed to a robust recovery in Pakistanâ€™s automotive sector, with manufacturing activity and vehicle sales increasing substantially. The Pakistan Auto Manufacturers Association (PAMA) reported a record-breaking 112% Year-on-Year (YoY) growth in car sales in October 2024, with 13,108 units sold, marking a 27% month-on-month (MoM) increase compared to September 2024. This growth brought total car sales for the first four months of FY25 to 40,693 units, a 50% increase from 27,162 units sold during the same period last year. The sharp rise is fueled by improved consumer confidence, enhanced financing options, and optimism surrounding Pakistanâ€™s economic stability. Analystsâ€™ Insights Analysts at Topline Securities Limited highlighted key drivers behind this recovery, including the stabilization of interest rates, the introduction of new car models, and the growing adoption of hybrid electric vehicles (HEVs) and electric vehicles (EVs). With interest rates gradually declining, the market for automobiles is poised for sustained growth. October 2024 Performance In October alone, advance tax collection from new car registrations grew by 73% YoY, reaching Rs 335 million, up from Rs 193 million in October 2023. The positive momentum in the automotive sector signals renewed consumer interest and economic optimism. This surge in sales and tax collection underscores the vital role of the auto industry in Pakistanâ€™s broader economic recovery, providing a much-needed boost to government revenues through direct and indirect channels.

Date: 2024-11-27

Details: Islamabad, November 27, 2024 â€“ Tax revenue from cash withdrawals in Pakistan witnessed a sharp decline, plunging 21% year-on-year (YoY) in October 2024. According to figures from the Federal Board of Revenue (FBR), the advance tax collection dropped to Rs 721 million, compared to Rs 908 million in the same month last year. The Large Taxpayers Office (LTO) Karachi reported the data, highlighting the impact of revised tax measures under the Finance Act, 2023. The reintroduction of Section 231AB to the Income Tax Ordinance, 2001, brought back the advance tax on cash withdrawals, aiming to target individuals with taxable income who remain outside the tax net. Key Provisions of Section 231AB Under the section, every banking institution is required to deduct an adjustable tax at a rate of 0.6% on daily cash withdrawals exceeding Rs 50,000, provided the individualâ€™s name does not appear on the Active Taxpayersâ€™ List (ATL). The limit applies to the aggregate sum of cash withdrawals made in a single day. Previously, this tax was enforced under Section 231A, which was abolished in the Finance Act, 2021, only to be reinstated two years later with modifications. Implications of Decline FBR officials attributed the reduction in tax collection to a positive outcome of the measure. The drop suggests that more individuals are filing their tax returns to become compliant taxpayers, thereby avoiding the additional tax levied on cash withdrawals. Despite the YoY decline, cumulative tax collection from cash withdrawals during the first four months of the fiscal year 2024-25 stood at Rs 3.17 billion, down from Rs 3.81 billion during the same period in the previous fiscal year. The reduction in revenue, while concerning at face value, underscores a shift towards formalizing the economy by encouraging individuals to join the tax net. This aligns with the governmentâ€™s broader objective of expanding the taxpayer base and improving compliance to ensure a fair distribution of tax burdens.

Date: 2024-11-26

Details: KARACHI, November 26, 2024 â€“ Pakistan has introduced an advance income tax requirement on individuals and agencies hiring foreign nationals for domestic work. The Federal Board of Revenue (FBR) clarified that this provision already exists under Section 231C of the Income Tax Ordinance, 2001. According to Section 231C, two key provisions govern the imposition of this tax on foreign domestic workers: Sub-section (1) mandates that any authority responsible for issuing or renewing a domestic aide visa for a foreign national must collect an advance tax from the employing agency, sponsor, or individual. This tax amounts to two hundred thousand rupees at the time the visa is issued or renewed. This tax applies to those who hire foreign nationals for domestic work, including domestic aides such as housemaids or drivers. Sub-section (2) clarifies that the advance tax collected under this section is adjustable. This means that it can be credited against the total tax liability of the agency, sponsor, or person who hired the foreign domestic worker. The tax is applicable for the relevant tax year and is intended to contribute to the overall income tax obligations of the employer. This new tax policy aims to regulate the employment of foreign workers in domestic roles and generate additional revenue for the government. It also seeks to standardize the hiring process for foreign domestic workers, ensuring that proper tax procedures are followed. Experts have pointed out that this move could lead to a formalization of the domestic labor market, making it easier to track foreign employment and prevent illegal hiring practices. However, concerns have been raised about the impact on families and individuals who rely on foreign workers for domestic services, as the tax could increase overall hiring costs. The FBRâ€™s decision underscores Pakistanâ€™s ongoing efforts to expand its tax net and ensure compliance with tax regulations, particularly in sectors that have traditionally been less regulated.

Date: 2024-11-26

Details: Islamabad, November 26, 2024 â€“ Pakistan and the World Bank held discussions on Tuesday to develop a robust and transparent tax policy framework aimed at boosting revenue mobilization, improving compliance, and ensuring equitable taxation. Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, met with Najy Benhassine, the World Bankâ€™s Country Director, and his team at the Finance Division. The meeting was also attended by the Finance Secretary and senior officials of the Finance Division. During the discussions, the Finance Minister underscored the significance of collaborating with the World Bank to advance Pakistanâ€™s economic reforms and developmental goals. He expressed appreciation for the World Bankâ€™s financial and technical support across various sectors and reiterated the governmentâ€™s commitment to fiscal discipline, sustainable growth, and efficient resource management. The dialogue emphasized the need for a transparent tax policy framework to enhance revenue collection, improve compliance, and ensure fair taxation. The World Bank team also offered technical assistance to modernize Pakistanâ€™s budget-making process, improve transparency and accountability in public financial management, and establish an effective debt management mechanism for fiscal sustainability and risk mitigation. Key issues discussed included the Agricultural Income Tax Regime, harmonization of General Sales Tax (GST) in coordination with provinces, and strengthening the role of the National Tax Council. Both sides also agreed on the importance of leveraging technology and digitalization to enhance tax collection systems, reduce leakages in public revenue streams, and improve data-driven policy decisions to foster economic inclusivity. Najy Benhassine commended the governmentâ€™s reform initiatives and assured continued support from the World Bank in addressing critical economic challenges. He reiterated the World Bankâ€™s commitment to aiding Pakistan in achieving its developmental objectives. The Finance Minister thanked the World Bank for its unwavering support and reaffirmed the governmentâ€™s resolve to implement reforms aimed at fostering sustainable economic growth and ensuring long-term fiscal stability.

Date: 2024-11-26

Details: Islamabad, November 26, 2024 â€“ Political instability is posing significant challenges for the Federal Board of Revenue (FBR) in achieving its tax collection target for November 2024, according to sources within the department. The Pakistan Tehreek-i-Insaf (PTI) has launched protests this month to push for their demands, further disrupting the economic landscape and complicating the FBRâ€™s efforts to meet revenue goals. The FBR is already struggling to achieve its annual tax collection target, and the ongoing political uncertainty has exacerbated the situation. For November 2024, the FBR aims to collect Rs1 trillion but has so far managed only Rs550 billion as of November 25, 2024. Meeting the target seems unlikely without implementing additional taxation measures or a mini-budget. Despite the revenue shortfall, the government has reiterated its commitment to avoiding a mini-budget for generating additional revenue in the fiscal yearâ€™s second quarter. In response to an anticipated shortfall of Rs230 billion for the October-December 2024-25 quarter, the FBR has initiated short-term measures. These include issuing notices to 5,000 high-net-worth non-filers in the first phase, with an estimated tax liability of Rs7 billion. In October 2024, the FBR collected Rs877 billion against a target of Rs980 billion, resulting in a shortfall of Rs103 billion. For the first four months of 2024-25, total collections stood at Rs3,440 billion, falling short of the Rs3,636 billion target by Rs196 billion. The FBR attributes these shortfalls to shifting economic assumptions, including revised GDP growth rates, import levels, inflation, and large-scale manufacturing output. To address the deficit, the FBR has planned a mix of short- and long-term measures, including enforcement actions projected to generate Rs320 billion. Contingency revenue measures agreed upon by the government include increasing federal excise duty (FED) on sugary drinks and raising withholding tax rates on machinery and raw material imports, as well as on contracts and services. These measures are expected to yield Rs10.8 billion per month, contributing an estimated Rs97.2 billion over the remaining three quarters of the fiscal year. The FBR remains under pressure to meet its ambitious targets amid an evolving economic and political environment.

Date: 2024-11-25

Details: PESHAWAR: A meeting of the Sarhad Business Alliance (SBA) was held under the join chairmanship of Haji Ghulam Ali Patron-in-Chief and Syed Zahir Ali Shah Chairman here on Sunday. The meeting discussed the problems of the business community and considered solutions and demanded of the Federal Board of Revenue (FBR) to withdraw recent increase in property tax with immediate effect. The participants of the meeting expressed their resolve for the digitization of the registration of new members and making all possible efforts for easing doing business in the province. The aim of this initiative is to facilitate the registration process for traders, a comprehensive strategy for its implementation has been drawn up and emphasis has been placed on the activation of relevant committees. Those who attended the meeting were included Muhammad Ishaq, Ghulam Bilal Javed, Syed Sirajuddin, Adnan Jalil, Dr. Mohib Afridi, Haji Waheed, Shahzad Siddiqui, Shakeel Saraf, Malik Inamur Rahman and others. On this occasion, president SBA, Mohammad Ishaq said that the services of Sarhad Business Alliance for solving the problems faced by the business community are commendable. He emphasized that the process of digitization will provide new facilities to the business community and further stabilizes the business environment. In the meeting, the current economic situation and the problems faced by the business community were discussed in detail. The participants emphasised that the government should immediately take effective measures to remove the obstacles faced by the business community. They agreed that unity and solidarity is the solution to all problems and the protection of the rights of traders will be the first priority. In the meeting, the federal and provincial governments were demanded to provide relief to the business community in electricity and gas and the federal government. Copyright Business Recorder, 2024

Date: 2024-11-25

Details: Advance tax on motor vehicles is levied under Section 231B of the Income Tax Ordinance, 2001, as amended by the Federal Board of Revenue (FBR) for the tax year 2024-25. Key Provisions of Section 231B: 1. Collection at Registration: o Motor vehicle registering authorities of the Excise and Taxation Department are required to collect advance tax at registration, as per rates outlined in Division VII, Part IV of the First Schedule. o No tax collection is required after five years from the vehicleâ€™s first registration, based on the provisions of sub-section (6). 2. Leasing Arrangements: o Leasing entities, including scheduled banks, non-banking financial institutions, investment banks, modarabas, and development finance institutions, must collect advance tax at 4% of the vehicleâ€™s value when leasing to individuals not listed in the Active Taxpayers List (ATL). 3. Transfer of Ownership: o Advance tax is also collected during the transfer of vehicle registration or ownership, based on rates in Division VII, Part IV of the First Schedule. o This provision excludes transfers occurring more than five years after the vehicleâ€™s initial registration. 4. Pre-Registration Sales: o For locally manufactured vehicles sold before registration, the registering authority collects tax as per Division VII, Part IV of the First Schedule. 5. Collection at Sale by Manufacturer: o Manufacturers must collect advance tax at specified rates when selling motorcars or jeeps. 6. Adjustability of Tax: o Advance tax collected under this section is adjustable against the taxpayerâ€™s liability. However, exemptions apply for cases where tax has already been collected under sub-section (3) or Section 148. 7. Exemptions: o The following entities are exempt from this tax: ï‚§ Federal, Provincial, and Local Governments ï‚§ Foreign diplomats and diplomatic missions in Pakistan 8. Definition of â€œDate of First Registrationâ€: o The date varies depending on the source of acquisition, including Armed Forces, diplomatic missions, or government entities, or is determined by the Excise and Taxation Department for other cases. 9. Exclusion Criteria: o Certain vehicles are exempt, including public transport, goods carriers, agricultural machinery, rickshaws, motorcycles, and motor vehicles with an engine capacity of up to 200cc. This regulation aims to streamline tax collection on motor vehicles while ensuring a level playing field for all taxpayers.

Date: 2024-11-25

Details: Karachi, November 25, 2024 â€“ The Federal Board of Revenue (FBR) has mandated banks to deduct 0.6% advance tax on cash withdrawals exceeding PKR 50,000 in a single day from individuals not listed on the Active Taxpayers List (ATL). This directive has been issued under Section 231AB of the Income Tax Ordinance, 2001, aiming to enhance tax compliance and documentation in the economy. The FBR clarified that banks are obligated to collect this tax from non-ATL individuals at the time of withdrawal. The regulation, which applies to aggregate daily cash withdrawals exceeding PKR 50,000, serves as a deterrent for non-compliance with tax laws. According to the FBR, this measure is expected to not only improve tax collection but also encourage individuals to register as taxpayers and regularly file returns. The FBR explained the provision under Section 231AB: â€œEvery banking company shall deduct advance adjustable tax at the rate of 0.6% of the cash withdrawal from a person whose name is not appearing in the active taxpayersâ€™ list on the sum total of the payments for cash withdrawal in a day, exceeding fifty thousand rupees.â€ This policy targets non-ATL persons, who are often perceived as evading their fair share of taxes. The FBR has reiterated its commitment to ensuring a level playing field for all taxpayers by strictly implementing this rule. Banking institutions have been instructed by the FBR to ensure full compliance with the directives. Additionally, the FBR emphasized that the deduction is adjustable, meaning the amount collected as tax can be credited against the taxpayerâ€™s liability during the filing of their annual tax returns. The FBR has also urged individuals to verify their ATL status and avoid unnecessary deductions by filing their tax returns promptly. The ATL status can be confirmed through the FBRâ€™s online portal or mobile app. This measure by the FBR is part of broader efforts to widen the tax net and curb the informal cash economy. It is expected that these initiatives will contribute to improved revenue generation and economic stability. The FBR has requested all stakeholders to cooperate in achieving these objectives. The FBRâ€™s persistent focus on increasing compliance aligns with the governmentâ€™s agenda of fiscal discipline and transparency. It remains to be seen how effectively the banking sector and the FBR implement these directives to meet the desired outcomes.

Date: 2024-11-24

Details: Karachi, November 24, 2024 â€“ The Income Tax Ordinance, 2001, empowers the Federal Board of Revenue (FBR) to arrest individuals involved in income concealment, enhancing its authority to tackle tax evasion effectively. Section 203B of the updated ordinance outlines the powers and procedures that the FBR can exercise in such cases. Under Sub-Section (1) of Section 203B, the FBR may arrest taxpayers if evidence from audits shows that income concealment has led to tax evasion of Rs. 100 million or more for filers and Rs. 25 million or more for non-filers. This step requires written approval from a committee comprising the Minister for Finance and Revenue, the Chairman of the FBR, and the senior-most member of the FBR. The Sub-Section (2) establishes this committee as a key mechanism to ensure that the FBR exercises its powers responsibly and with proper oversight. Arrests conducted under the ordinance must comply with the Code of Criminal Procedure, 1898, as stated in Sub-Section (3). This ensures that the FBR operates within legal frameworks while taking enforcement actions. Sub-Section (4) allows the Chief Commissioner, with prior approval from the FBR, to compound offences in specific cases. If the taxpayer pays the due tax amount along with surcharges and penalties, the FBR may resolve the matter without proceeding to court. This provision highlights the FBRâ€™s role in providing flexible solutions while maintaining accountability. In cases involving corporate offences, Sub-Section (5) authorizes the FBR to hold company directors or officers personally liable for actions contributing to income concealment. However, such arrests do not absolve the company of its financial liabilities, including taxes and penalties. The FBRâ€™s enhanced powers under the Income Tax Ordinance aim to strengthen its efforts in combating tax evasion and promoting compliance. These measures reinforce the FBRâ€™s role in ensuring taxpayers meet their legal obligations while addressing financial irregularities. By leveraging its authority under Section 203B, the FBR continues to demonstrate its commitment to building a transparent and accountable tax system, ensuring that both individuals and corporations contribute their fair share to national revenues.

Date: 2024-11-24

Details: Karachi, November 24, 2024 â€“ The Income Tax Ordinance, 2001, grants tax officials of the Federal Board of Revenue (FBR) the authority to arrest individuals accused of concealing income. Section 203B of the updated ordinance outlines the specific powers and procedures tax officials must follow in such cases. Under Sub-Section (1) of Section 203B, tax officials can arrest taxpayers if, based on material evidence from audits, it is determined that income concealment has resulted in tax evasion of Rs. 100 million or more for filers and Rs. 25 million or more for non-filers. Such arrests require written approval from a committee comprising the Minister for Finance and Revenue, the Chairman of the Board, and the senior-most member of the Board. Sub-Section (2) emphasizes the role of the committee, ensuring that tax officials adhere to stringent oversight when exercising their arrest powers. Arrests carried out under this ordinance must comply with the Code of Criminal Procedure, 1898, as stipulated in Sub-Section (3). This ensures that tax officials conduct arrests lawfully and in alignment with established legal standards. In specific cases, Sub-Section (4) allows the Chief Commissioner, with prior Board approval, to compound offences if the taxpayer agrees to pay the due tax amount along with default surcharges and penalties. This provision offers taxpayers a chance to resolve disputes before or after legal proceedings, with tax officials playing a pivotal role in facilitating such resolutions. For corporate offences, Sub-Section (5) empowers tax officials to hold company directors or officers personally accountable for acts contributing to income concealment or related offences. Arrests under this provision, however, do not exempt the company from its financial obligations, including taxes, surcharges, and penalties. These measures reinforce the authority of tax officials in combating tax evasion and ensure strict compliance with the Income Tax Ordinance, highlighting the governmentâ€™s commitment to addressing financial irregularities. Tax officials are central to the enforcement of these regulations, ensuring that taxpayers adhere to their legal obligations and contributing to a transparent tax system.

Date: 2024-11-24

Details: The Peshawar High Court (PHC) has ruled that the requirement of a pay order for the clearance of tax-exempt consignments undermines the exemption regime granted to certain businesses. In its judgment in the case of M/s Taj Vegetable Oil Processing Unit (Pvt) Limited and Others Vs Federation of Pakistan, the PHC stated that the condition of submitting a pay order equivalent to the sales tax amount at the time of clearance contradicts the purpose of the exemption, which had been granted to the petitioners based on their geographical location and business activities. The PHC noted that while the petitioners are not liable to pay tax on raw materials imported through the concessionary regime, they are allowed to sell their products outside the former tribal areas with payment of sales tax. However, the imposition of a pay order equivalent to the sales tax would convert the exemption into a tax payment regime, effectively nullifying the original exemption and instead introducing a mechanism similar to the payment of sales tax under Section 3 of the Sales Tax Act, 1990. According to the PHC, the requirement for a pay order from businesses in the former tribal areas is unreasonable, as it deprives them of using their funds for business activities, and violates Articles 23 and 24 of the Constitution. The court emphasized that the intent of the exemption legislation was to regulate the exemption and not impose taxes. Furthermore, the PHC reviewed the provisions of the Sales Tax Act, 1990, and found that no entry in the Sixth Schedule to the Act made the exemption contingent on the payment order. The exemption allows businesses to avoid sales tax under the Act, and the introduction of a pay order condition was deemed to be discriminatory and unreasonable. The court concluded that the amendment to Entry No. 151 of the Sixth Schedule was unconstitutional, discriminatory, and violated the principles of reasonableness and fairness as outlined in Articles 18, 23, 24, and 25 of the Constitution. As a result, the petitioners are now required to provide post-dated cheques for sales tax, and any pay orders previously submitted will be returned. The PHCâ€™s ruling protects the exemption regime for businesses in the former tribal areas.

Date: 2024-11-22

Details: November 22, 2024 Karachi, November 22, 2024 â€“ The Federal Board of Revenue (FBR) has issued a strong warning that making false statements in tax filings could lead to severe legal consequences, including up to two years in prison. This reminder is based on the provisions of the Income Tax Ordinance, 2001, specifically Section 195. The FBR explained that individuals who knowingly or recklessly provide false or misleading information to tax authorities could face criminal charges. Under Section 195(1), anyone found guilty of this offense may be penalized with a fine, a prison sentence of up to two years, or both. Even if a misleading statement is made by mistake, the law still allows for penalties, though the punishment would generally be limited to a fine. In particular, Section 195(1)(a) outlines that anyone who intentionally provides false or materially misleading information to the income tax authorities is committing an offense. Additionally, Section 195(1)(b) makes it clear that omitting important details that render a statement misleading is also punishable. This is part of the FBRâ€™s broader effort to ensure transparency and integrity in the countryâ€™s tax system. However, the FBR has also made provisions for taxpayers who may unintentionally file misleading statements. Under Section 195(2), individuals will not be penalized if they can prove they had no knowledge, and could not reasonably have known, that their statements were false or misleading. This safeguard is designed to protect honest taxpayers from unintentional errors. The FBRâ€™s renewed focus on false statements is part of its ongoing campaign to tackle tax evasion and ensure compliance with tax laws. By enforcing stricter penalties for misleading information, the FBR aims to bolster trust in Pakistanâ€™s tax system and improve revenue collection. Officials also highlighted the importance of Section 182 in the Income Tax Ordinance, which provides further clarity on assessing the accuracy of tax statements. By linking this section to the penalties under Section 195, the FBR aims to remove any uncertainty around enforcement. The FBR has urged all taxpayers to take extra care when filing their tax returns, stressing that even minor mistakes could lead to serious consequences. It also recommended that taxpayers consult with tax professionals to ensure their filings are accurate and compliant with the law, helping to safeguard the countryâ€™s fiscal health.

Date: 2024-11-22

Details: November 22, 2024 ISLAMABAD: The Federal Board of Revenue (FBR) will automatically provide telecom companies with a list of taxpayers who have filed their income tax returns to facilitate the unblocking of their mobile SIMs. On the directive of the Federal Tax Ombudsman (FTO), the FBR issued a standard operating procedure (SOP) on Thursday for implementing the Income Tax General Order under Section 114B of the Income Tax Ordinance, 2001. As per the SOP, telecom service providers are required to reactivate services within one to two business days upon receiving confirmation of a taxpayerâ€™s compliance. If a taxpayerâ€™s mobile service remains suspended after filing their tax return within three business days, or if there are objections regarding the suspension, they may file a grievance with the relevant Commissioner. The Commissioner will review the case and, if justified, escalate it to the FBR for resolution or coordinate with the issuing authority. Key steps outlined in the SOP include: 1. Identification and Verification of Non-ATL Individuals: A list of non-filers for the specified tax year will be generated from the FBR database and sent to field formations for scrutiny. Verification of notices issued under Section 114 and non-filer status will also be conducted. 2. Chief Commissionersâ€™ Certification: Chief Commissioners will validate cases for inclusion in the Income Tax General Order and issue certificates confirming their non-filer status. 3. Issuance of Income Tax General Order (ITGO): The FBR will issue an ITGO outlining consequences under Section 114B(2) and directing service providers to implement it immediately. 4. Communication to Service Providers: The ITGO will be formally sent to telecom operators and utility companies, requiring compliance within a specified timeframe. Non-compliance may result in legal action under Sections 182 and 196 of the Income Tax Ordinance, 2001. 5. Monitoring and Enforcement: The FBR will monitor enforcement through a dedicated team, ensuring compliance, tracking outcomes, and providing regular updates to higher authorities.

Date: 2024-11-21

Details: November 21, 2024 The Regional Tax Office (RTO) Islamabad took stern action on Thursday by sealing five prominent restaurants in the city for issuing fake invoices and receipts. The crackdown follows complaints from citizens who reported that these restaurants were involved in issuing counterfeit receipts, according to a press release from the Federal Board of Revenue (FBR). This action is part of FBRâ€™s broader strategy to bring Tier-1 retailers and restaurants under the tax net through the Point of Sale (POS) Invoicing system. The FBR, using its advanced POS tracking software, verified the authenticity of the reported receipts. Following this verification, a team from RTO Islamabad, led by Deputy Commissioner, took immediate action by sealing the five restaurants. In addition to the closure of these establishments, a total penalty of Rs 1.5 million was imposed on them. The FBR also highlighted the launch of its Point of Sales Prize Scheme, which started on October 25. Initially, this scheme has been introduced in Islamabad for Tier-1 restaurants. The initiative will gradually be extended to all Tier-1 retailers, with a nationwide rollout expected by the end of this month. Under the scheme, citizens and consumers who report fake receipts through the Tax Asaan app are eligible for cash rewards. After the FBR verifies the authenticity of the reported receipts, cash prizes will be directly transferred to the winnersâ€™ bank accounts. The restaurants involved in issuing fake receipts will then face penalties, including closure. The objective of this initiative is clear: to combat the prevalent culture of fake invoicing and ensure that the appropriate taxes are paid into the national exchequer. The FBRâ€™s drive aims to promote transparency, increase tax compliance, and discourage tax evasion by involving the public in the process. FBR officials reiterated their commitment to ensuring tax compliance through stringent enforcement of tax regulations. By taking such actions, the FBR hopes to send a strong message to all businesses, ensuring that they adhere to tax laws and contribute their fair share to the economy. The initiative is part of the FBRâ€™s ongoing efforts to modernize and enhance Pakistanâ€™s tax system, making it more efficient and accountable.

Date: 2024-11-20

Details: ISLAMABAD: The Federal Board of Revenue (FBR) has suffered a huge revenue loss on account of restrictions on border trade and the closure of border points along the Pakistan-Iran border. Information received from these areas revealed that Rakhshan and Makran Border Trade Alliance had called for a complete shutdown in towns such as Washuk, Panjgur, Nokundi, and other border areas to protest the three-day weekly halt in border trade and the restrictions on oil transportation. According to alliance officials, the residents of these areas rely entirely on border trade for their livelihood, as opportunities for agriculture and industry are limited. The closure of the trade points has deprived thousands of families who depend on Iranian oil and other border trade for their income. In Nokundi, the closure of the Pakistan-Iran border has disrupted the transport of essential goods, putting additional strain on both traders and residents. Trade union leaders have also lamented that security checkpoints have exacerbated their difficulties, causing delays and financial losses. In Panjgur, trade leaders condemned the border restrictions, stressing that generations of livelihoods and the local economy are dependent on this cross-border trade. During the last meeting of the Senateâ€™s Standing Committee on Finance, chaired by Saleem Mandviwala, the committee reviewed the matter of the Iranian authorities collecting a 10% tax on Pakistani commercial vehicles. Chairman, Federal Board of Revenue (FBR) has recommended imposing a tax on Iranian vehicles, suggesting that the Ministry of Foreign Affairs engage with the Iranian Ambassador to resolve the issue. Senator Manzoor Ahmed Kakar raised concerns that Iran imposes a 10% levy on Pakistani commercial vehicles at the border, and additionally charges $1 per kilometre for every kilometre travelled within Iran. The FBR Chairman pointed out that Iranian commercial vehicles entering Pakistan are not taxed, and stated that Iran should either stop charging the levy on Pakistani traders, or Pakistan should also impose a similar tax on Iranian vehicles. He emphasised the key role of the Ministry of Commerce in this matter. Copyright Business Recorder, 2024

Date: 2024-11-20

Details: Islamabad, November 20, 2024 â€“ The Federal Board of Revenue (FBR) announced on Wednesday that the last two Saturdays of November 2024 would be observed as normal working days. In a communication circulated to Chief Commissioners Inland Revenue (CCIR) of Large Taxpayers Offices (LTOs), Medium Taxpayers Offices (MTOs), Corporate Tax Offices (CTOs), and Regional Tax Offices (RTOs), the FBR directed the observance of the last two Saturdays of November as regular working days for the collection of duties and taxes. The FBR stated that all LTOs, MTOs, CTOs, and RTOs shall remain operational on the upcoming two Saturdays, November 23, 2024, and November 30, 2024, respectively. Sources in the FBR revealed that the decision was made due to the revenue shortfall faced by the national tax agency. It is pertinent to mention that the FBR is facing a significant revenue shortfall for the period of July to October 2024, in its pursuit of the Rs. 12.9 trillion tax collection target. In recent meetings with the International Monetary Fund (IMF), the FBR assured the organization that it would be able to achieve the tax collection target for the fiscal year 2024-25. The FBR also assured that it would achieve the target without introducing any new tax measures during the remaining months of the current fiscal year. Amid the massive shortfall in revenue collection, there were rumors that the government might introduce a mini-budget. The latest decision by the FBR to keep the tax collection offices open on Saturdays appears to be part of efforts to boost revenue collection to the optimum level. The FBRâ€™s move to extend working days underscores the urgency to bridge the widening revenue gap and meet international commitments. It highlights the ongoing struggle of the tax agency to ensure compliance and widen the tax net. This decision is expected to facilitate taxpayers and businesses, enabling them to clear outstanding dues conveniently. However, critics argue that such measures may only provide temporary relief unless accompanied by structural reforms in tax policy and enforcement. Observers note that maintaining transparency and efficiency during these extended working hours will be critical in achieving the desired outcomes. With the IMF closely monitoring Pakistanâ€™s fiscal performance, such steps reflect the governmentâ€™s resolve to avoid further fiscal instability and reliance on supplementary taxation.

Date: 2024-11-19

Details: ISLAMABAD: Speakers at a seminar on Monday expressed serious concern that the absence of taxation on smokeless tobacco products and minimal regulation on nicotine pouches has allowed the industry to target consumers through alternative channels. The seminar titled â€œTaxing Tobacco: A Path to Reducing Consumption and Saving Livesâ€, was organized by the Sustainable Development Policy Institute (SDPI), served as a pivotal forum to address the critical need for a robust and sustainable tobacco taxation policy in Pakistan. Experts believed that the current two-tiered tobacco taxation system enables the tobacco industry to undermine the impact of tax increases. By preemptively raising prices ahead of budget announcements, the industry dilutes the intended public health benefits. The absence of taxation on smokeless tobacco products such as Naswar and the minimal regulation of nicotine pouches further exacerbate the issue, creating loopholes that allow the industry to target consumers through alternative channels. Against this backdrop, the seminar served as a call to action for developing a structured, long-term taxation policy that ensures equitable coverage of all tobacco products, reduces affordability, and mitigates health risks. Drawing inspiration from the World Health Organizationâ€™s Framework Convention on Tobacco Control (FCTC) and the MPOWER framework, discussions revolved around adapting global best practices to the Pakistani context. Speakers underscored the importance of introducing health-specific taxes to fund public health programs, combating cross-border smuggling through regional collaboration, and expanding the track-and-trace system to include exports and smokeless tobacco products. The recommendations were aligned with the WHOâ€™s guideline of achieving a minimum 70% tax share in the retail price of tobacco products, a benchmark Pakistan has yet to meet. Syed Wasif Ali Naqvi, Senior Research Associate and Head of Policy Advocacy and Outreach at SDPI, reiterated that tobacco taxation is a proven tool for reducing tobacco use and generating revenue. He acknowledged the persistent challenges posed by a lack of long-term policies and industry interference. Dr Waseem Iftikhar Janjua highlighted the irrationality in the tobacco taxation system of Pakistan and emphasized the necessity of a progressive taxation policy to reduce the affordability of tobacco products while aligning with global health standards. He highlighted the disparity between Pakistanâ€™s tobacco tax rate and the WHO-recommended benchmark, advocating for regular adjustments to account for inflation. Dr Waseem also called for comprehensive policies governing nicotine pouches and smokeless tobacco products, given their growing market share and the absence of regulation. His analysis of loose cigarette salesâ€”a prevalent practice among youthâ€”underscored the need for stricter enforcement to deter initiation and reduce affordability. Asif Iqbal stressed the importance of a stable 3-5-year taxation framework to address the uncertainties and reactive measures that dominate annual budget cycles. He pointed to the widening tax gap between economy-tier and premium-tier brands as a critical area for reform, advocating for gradual increases in economy-tier taxes to minimize disparities. Khurram Hashmi, Senior Technical Lead, Vital Strategies, focused on countering the tobacco industryâ€™s narrative by highlighting stringent policiesâ€™ health and economic benefits. He called for a unified approach among anti-tobacco stakeholders to ensure consistent advocacy and influence during budget deliberations. He underscored the goal of prioritizing public health over industry profits through equitable and effective taxation measures. Copyright Business Recorder, 2024

Date: 2024-11-19

Details: Prime Minister Shehbaz Sharif on Tuesday directed authorities including the Federal Board of Revenue (FBR), Federal Investigation Agency (FIA), and Intelligence Bureau (IB) to take joint action against tax evasion, undocumented sales, and price hikes in sugar sales. According to a statement released by the Prime Ministerâ€™s Office (PMO), a notification has been issued. PM Shehbaz directed the FBR, IB, and FIA to prevent sales tax evasion in the sugar sector. He also ordered authorities to take strict legal action against sugar mill owners involved in tax evasion and hoarding. With the sugar crushing season set to begin, PM Shehbaz instructed authorities to ensure 100% GST collection from sugar mills and dealers. Moreover, the PM also directed the installation of cameras in sugar mills. â€œThe decision aims to prevent hoarding of sugar and ensure price stability,â€ read the PMOâ€™s statement. Through cameras, the process and storage in sugar mills will be monitored to ensure payment of sales tax. As per the PMOâ€™s statement, PM Shehbaz clarified that any increase in sugar prices would not be tolerated. Moreover, the government would undertake a crackdown on speculative trading. â€œStrict action has been directed against the sugar speculation mafia,â€ read the statement. As per PM instruction, similar actions will be taken in other sectors, including steel, cigarettes, cement, and beverages. On Monday, PM Shehbaz, during a briefing by the Finance Ministry, directed the authorities to track down tax evaders and their abettors to ensure everyone pays the taxes they owe. PM Sharif directed for accelerating actions against tax defaulters, and reiterated to bring the tax evaders and their facilitators to book. â€œThe countryâ€™s economy can progress well when all the stakeholders meet their responsibilities. All sectors should pay taxes to play their role in the national progress,â€ he said.

Date: 2024-11-19

Details: Islamabad, November 19, 2024 â€“ Prime Minister Muhammad Shehbaz Sharif has directed a coordinated effort by the Federal Board of Revenue (FBR), Federal Investigation Agency (FIA), and Intelligence Bureau to address tax evasion, undocumented sugar sales, and price manipulation in the sugar sector. According to a statement from the Prime Ministerâ€™s Office, the directives come ahead of the sugar crushing season, with a focus on ensuring the complete collection of General Sales Tax (GST) from sugar mills and dealers. The Prime Minister emphasized the importance of transparency in the sector to curb tax evasion and stabilize prices. As part of the strategy, PM Shehbaz ordered the installation of cameras at sugar mills to prevent hoarding and monitor production. He warned sugar mill owners against engaging in tax evasion or hoarding practices, cautioning that any violations would result in strict legal action. â€œNo increase in sugar prices will be tolerated,â€ Prime Minister Shehbaz stated, underlining his administrationâ€™s commitment to protecting consumers from undue financial burdens. In addition to the sugar industry, PM Shehbaz instructed authorities to implement similar measures in other critical sectors, including steel, cement, cigarettes, and beverages. These sectors have been identified as areas where tax evasion and undocumented sales are prevalent. A formal notification detailing the Prime Ministerâ€™s directives has been issued, calling for immediate enforcement of the new measures. The move is part of the governmentâ€™s broader strategy to enhance tax compliance and address structural inefficiencies in Pakistanâ€™s economy. By targeting key industries, the government aims to not only boost revenue but also ensure fair market practices. Experts have lauded the decision, noting that tax evasion and undocumented transactions in the sugar sector significantly impact government revenue and contribute to price volatility. The installation of cameras at mills is seen as a step toward improving oversight and accountability in the sector. With the sugar crushing season set to begin, the governmentâ€™s firm stance signals its determination to eliminate malpractice and safeguard consumer interests. However, industry stakeholders have expressed concerns over the potential for overregulation and its impact on production efficiency. The coordinated actions by the FBR, FIA, and Intelligence Bureau will play a critical role in ensuring compliance and maintaining price stability, as the government works to strengthen the nationâ€™s economic framework.

Date: 2024-11-19

Details: Islamabad, November 19, 2024 â€“ Rashid Mahmood, Chairman of the Federal Board of Revenue (FBR), provided an in-depth briefing to the World Bank team on Tuesday regarding the FBRâ€™s comprehensive transformation plan aimed at enhancing revenue collection and tax compliance in Pakistan. The meeting, held at FBR headquarters, was attended by World Bank Country Director Najy Benhassine, Lead Country Economist Tobias Akhtar Haque, Public Sector Specialist Ms. Irum Touqeer, and Senior Operations Officer Ms. Eva Liselotte Lescrauwaet. Discussions focused on aligning initiatives under the Pakistan Raises Revenue Project with the FBRâ€™s broader transformation agenda. Chairman Mahmood outlined the governmentâ€™s vision for reforming the tax system, emphasizing the dual goals of increasing revenue and simplifying compliance for taxpayers. He identified several key focus areas, including digitalization, human resource capacity building, anti-smuggling measures, and broad-based tax administration reforms. These initiatives are designed to address gaps in tax compliance while modernizing the countryâ€™s revenue collection mechanisms. One of the highlights of the discussion was the Chairmanâ€™s request for additional World Bank support to establish digital enforcement stations, digitize supply chains, and conduct feasibility studies for the proposed initiatives. These efforts, he noted, are critical to streamlining tax operations and ensuring transparency. The World Bank team expressed its commitment to supporting Pakistanâ€™s revenue mobilization efforts through its Pakistan Raises Revenue Project. Country Director Najy Benhassine reaffirmed the organizationâ€™s dedication to collaborating with the FBR to implement transformative reforms. â€œWe are aligned with the FBRâ€™s vision and will continue working closely to achieve the shared objective of sustainable revenue growth for Pakistan,â€ he stated. The FBRâ€™s transformation plan reflects the governmentâ€™s broader strategy to modernize Pakistanâ€™s tax infrastructure, reduce tax evasion, and enhance service delivery. By leveraging digital tools and strengthening institutional capacity, the FBR aims to foster a more efficient and equitable tax system. The meeting concluded with both parties expressing optimism about the collaborative efforts. The World Bank team reiterated its support for the planned activities, emphasizing the importance of long-term partnerships to ensure the success of reform initiatives. As Pakistan continues to navigate economic challenges, the FBRâ€™s transformation plan represents a critical step toward building a resilient and sustainable revenue system that supports the countryâ€™s development goals.

Date: 2024-11-19

Details: Karachi, November 19, 2024 â€“ The Federal Board of Revenue (FBR) is preparing to take legal action against banks and other companies for submitting incomplete or inaccurate declarations, a move that underscores the governmentâ€™s commitment to strengthening compliance within the financial sector. The FBRâ€™s latest stance comes under the provisions of Section 191A of the Income Tax Ordinance, 2001, which outlines penalties for failure to provide complete and accurate information in tax returns. The tax authority has made it clear that both banking companies and other entities will be subject to prosecution if they fail to meet the required standards for filing tax returns. According to the FBR, Section 191A specifically addresses the issue of incomplete or blank declarations and documentation. It states that any company, including banks and associations of persons, can face legal consequences if they fail to fully disclose all relevant particulars or information in their tax return. This includes failing to provide a complete declaration of the records kept by the taxpayer, submitting blank or incomplete details, or attaching incomplete annexures, statements, or documents that were required by law. FBR officials have stated that these violations are considered serious offenses. The penalties for such offenses may include a fine, imprisonment for up to one year, or both, upon conviction. The aim is to ensure that all financial entities, including banks, adhere to the rigorous standards set forth by the tax code to promote transparency and accountability. The move to prosecute banks and other businesses comes as part of the FBRâ€™s broader efforts to improve tax compliance and close loopholes in the financial reporting system. The FBR has made it clear that it will take stringent actions to enforce the law, as the completeness and accuracy of tax returns are critical for maintaining the integrity of the countryâ€™s tax system. The FBRâ€™s latest directive is expected to have significant implications for the banking sector, as it heightens scrutiny on financial institutions to comply with all regulatory requirements. Banks, which play a central role in the nationâ€™s economy, are being closely monitored to ensure they meet the expectations of the FBR. As the deadline for submitting tax returns approaches, the FBR has urged all companies, including banks, to double-check their documentation and ensure they meet the standards outlined in Section 191A. The tax authority has also indicated that it will not hesitate to prosecute any entities found in violation of these rules. This move underscores the FBRâ€™s ongoing efforts to strengthen the countryâ€™s tax compliance framework and hold financial entities accountable for their reporting practices.

Date: 2024-11-18

Details: Islamabad, November 18, 2024 â€“ The Federal Board of Revenue (FBR) has announced a series of changes to the nomenclature of customs formations across Pakistan. These adjustments aim to align the customs framework with modern operational needs, enhancing clarity and efficiency. In a detailed statement, the FBR outlined the following updates: 1. Khyber Pakhtunkhwa: The Chief Collector of Customs Khyber Pakhtunkhwa, Custom House, Peshawar, has been renamed Chief Collector of Customs Appraisement (North), Custom House, Peshawar. 2. Balochistan: The Chief Collector of Customs Balochistan, Custom House, Quetta, is now designated as Chief Collector of Customs Appraisement Balochistan, Custom House, Quetta. 3. Islamabad: o The Collectorate of Customs, Islamabad, is now the Collectorate of Customs Enforcement, Islamabad. o The Collectorate of Customs, Islamabad International Airport, Islamabad, has been renamed Collectorate of Customs Airports, Islamabad. 4. Lahore: The Collectorate of Customs, Allama Iqbal International Airport, Lahore, has been rebranded as Collectorate of Customs Airports, Lahore. 5. Gwadar: The Collectorate of Customs, Gwadar, is now termed the Collectorate of Customs Appraisement, Gwadar. 6. Khuzdar: The Collectorate of Customs (Enforcement), Khuzdar, has been restructured as Collectorate of Customs Enforcement, Gadani. 7. Hyderabad: The Collectorate of Customs, Hyderabad, is now renamed Collectorate of Customs Enforcement, Hyderabad. 8. Karachi Airports: The Collectorate of Customs, Jinnah International Airport (JIAP), Karachi, has been renamed Collectorate of Customs Airports, Karachi. 9. IOCO Directorates: o The Directorate of Input-Output Coefficient Organization (IOCO) (South), Karachi, is now the Collectorate of IOCO, Karachi. o The Directorate of IOCO (Central), Lahore, has been renamed Collectorate of IOCO, Lahore. o The Directorate of IOCO (North), Islamabad, is now designated Collectorate of IOCO, Islamabad. Implications of the Changes The FBRâ€™s decision is part of its ongoing reforms to streamline customs operations nationwide. By standardizing the nomenclature, the department aims to enhance administrative coherence and improve the efficiency of customs procedures across regions. The FBR has urged stakeholders and the public to refer to the updated titles for all official communications and processes involving these customs formations.

Date: 2024-11-18

Details: Karachi, November 18, 2024 â€“ A recent abrupt change in the Green Channel parameters by the Pakistan Customs Department has thrown the nationâ€™s import system into disarray, leaving thousands of containers stranded at ports and causing severe financial repercussions for importers. The new enforcement-driven approach has resulted in significant delays in the clearance of legitimate goods, with potential disruptions in the supply of essential items, including medicines, medical devices, steel, and pulses. The business community has raised serious concerns over the Customs Departmentâ€™s decision to tighten regulations and shift focus towards enforcement, which has led to an unprecedented drop in Green Channel clearance rates. Previously, over 47% of containers were cleared through the Green Channel, but this rate has now plummeted to less than 26%. As a result, an overwhelming number of containers are being marked for examination and further assessment, overwhelming terminal operators and customs officers. This has significantly increased the processing time, with legitimate imports now facing delays of up to four days just for grounding containers, followed by an additional two to three days for the examination and clearance process. This delay in clearance has sparked a cascade of consequences, with importers incurring extra costs. The most significant of these is the exorbitant demurrage fees charged by private terminal operators and shipping companies. Importers are forced to pay additional charges every five days in addition to the container rents. These costs continue to accumulate, leading to serious financial losses for businesses already facing the challenges of a difficult economic climate. This increase in operational expenses not only strains the importers but also affects the larger economy, as the cost of doing business rises across the board. Khurram Ijaz, former Vice President of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) and Chairman of the Customs Advisory Council, has voiced strong concerns about the changes in Green Channel parameters, which were implemented without prior notice. He stated that the sudden shifts in customs practices have created a bottleneck at the ports, with significant delays in clearing import containers, leading to a growing backlog. He criticized the lack of communication from Pakistan Customs, highlighting the need for proper advance notice when making such critical changes. Ijaz emphasized that if any alterations were to be made to the Green Channel system, they should have been communicated transparently to importers to ensure smooth processing of goods. He further noted that the number of officers responsible for assessments should have been increased to handle the extra workload and prevent unnecessary delays. He pointed out that enforcement-heavy measures had inadvertently targeted legitimate importers who were already compliant with regulations and relied on efficient processes to keep their businesses running. The FPCCI official called on the Chairman of the Federal Board of Revenue (FBR) and the Chief Collector of Customs to strike a balance between enforcing customs measures and facilitating trade. He highlighted that more than 90% of importers adhere to regulations and should not be penalized with burdensome delays, as such actions harm the broader goal of encouraging trade and investment. To address these issues, Ijaz recommended a review of the Risk Management System (RMS) criteria to improve Green Channel clearance rates. He also called for the creation of a dedicated department to handle examinations and assessments, separate from litigation matters, in order to streamline operations and reduce delays. A more efficient, risk-based approach to customs clearance, he added, would benefit both importers and the countryâ€™s economic stability. Ijaz concluded by urging the relevant authorities to promptly address the concerns of the business community and restore a balance between enforcement and facilitation to ensure the smooth flow of legitimate trade.

Date: 2024-11-18

Details: The Federal Board of Revenue (FBR) has revised its Active Taxpayers List (ATL) for the tax year 2024, reflecting a significant increase in active taxpayers. As of November 18, 2024, the list includes 5.52 million individuals, a rise from the 5.37 million taxpayers recorded in the initial ATL published on November 1, 2024. This update adds approximately 150,000 new taxpayers who filed their income tax returns during the first 10 days of November. The FBRâ€™s move to update the ATL daily marks a departure from its previous practice of issuing the list annually in March. Real-Time Updates for Improved Compliance The shift to a real-time update mechanism follows amendments introduced via SRO 1638(I)/2024. These changes aim to enhance operational efficiency and compliance while promoting transparency. â€œThe daily updates ensure that the ATL accurately reflects the taxpayer base and provides immediate recognition to those fulfilling their obligations,â€ an FBR spokesperson explained. Under the revised system, taxpayers who file their returns on or before the October 31 deadlineâ€”or within any granted extensionâ€”are promptly included in the ATL as active taxpayers. Late filers can still secure inclusion but must pay a surcharge, as mandated by Section 182A of the Income Tax Ordinance. Broader Efforts to Boost Compliance This dynamic ATL approach is part of the FBRâ€™s broader strategy to streamline Pakistanâ€™s tax system and enhance compliance. To enforce compliance, the FBR has introduced penalties for non-filers, such as: â€¢ Suspension of SIM cards â€¢ Disconnection of utility services â€¢ Restrictions on international travel These measures aim to encourage greater participation in the tax system. However, exemptions apply to specific groups, including Overseas Pakistanis with NICOPs, minors, students, and individuals traveling for religious purposes, such as Hajj or Umrah. Building a Stronger Tax Base The real-time updates to the ATL symbolize a shift toward a more responsive and inclusive tax system. By recognizing taxpayersâ€™ contributions promptly and implementing stricter compliance measures, the FBR seeks to foster fiscal stability and improve taxpayer engagement. This proactive approach underscores the FBRâ€™s commitment to creating a transparent, efficient, and robust tax framework, critical for strengthening Pakistanâ€™s economy.

Date: 2024-11-17

Details: Karachi, November 17, 2024 â€“ The Federal Board of Revenue (FBR) has reiterated that failing to file an income tax return as mandated by the Income Tax Ordinance, 2001, constitutes a punishable offense. The agency emphasized the legal repercussions associated with non-compliance, underscoring its commitment to enforcing tax regulations. Section 191 of the Income Tax Ordinance explicitly outlines the penalties for individuals and entities failing to meet statutory tax obligations. According to the FBR, violations under this section can result in fines, imprisonment, or both, depending on the nature and severity of the non-compliance. The law categorically states that failure to comply with various provisions, including notices issued under Sections 114(3), 114(4), 117(3), or 116(1), constitutes a criminal offense. Non-compliance with obligations such as paying advance tax under Section 147, collecting or deducting tax under Part V of Chapter XII, and submitting accurate particulars of specified persons under Section 165(1) are also considered violations. Furthermore, failure to fulfill additional responsibilities such as: â€¢ Declaring business bank accounts in registration forms or returns, â€¢ Integrating business operations with the FBRâ€™s computerized system, and â€¢ Issuing verifiable tax invoices through the FBR system, all fall under punishable offenses under Section 191. For individuals found guilty, penalties may include fines or imprisonment for up to one year, or both. In cases where the convicted party continues to neglect filing obligations after the court specifies a deadline, the offense escalates. This could result in a fine of up to Rs. 50,000, imprisonment for up to two years, or both. The FBR stressed that these provisions are in place to strengthen the countryâ€™s tax compliance framework, ensuring that taxpayers meet their obligations promptly and accurately. By criminalizing non-compliance, the FBR aims to deter tax evasion and reinforce the integrity of Pakistanâ€™s tax system. Taxpayers are urged to fulfill their legal responsibilities by filing returns on time and adhering to all related requirements. Compliance not only mitigates the risk of penalties but also contributes to the nationâ€™s fiscal health and economic stability. The FBR continues to encourage taxpayers to seek guidance and utilize available resources to meet their obligations under the law

Date: 2024-11-17

Details: Karachi, November 17, 2024 â€“ The Federal Board of Revenue (FBR) has clarified the implications of Section 182A of the Income Tax Ordinance, 2001, emphasizing its importance for individuals and entities failing to file their income tax returns within the due date. Section 182A targets non-filers, laying out penalties and restrictions for those who fail to submit their tax returns as required under Section 114 by the deadline specified in Section 118 or any extensions granted under Section 214A or Section 119. According to the FBR, the primary consequences of non-compliance under Section 182A include: 1. Exclusion from the Active Taxpayers List (ATL): Non-filers will not be included in the ATL for the tax year in which they miss the deadline. However, they can be reinstated by filing the return late and paying a surcharge: â€” Rs. 20,000 for companies â€” Rs. 10,000 for associations of persons (AOPs) â€” Rs. 1,000 for individuals 2. Forfeiture of Tax Benefits: Non-filers will lose the right to carry forward losses under Part VIII of Chapter IV for the relevant tax year. 3. Refund Restrictions: Refunds will not be issued to individuals or entities during the period they remain excluded from the ATL. 4. No Additional Payment for Delayed Refunds: Non-filers are not entitled to additional payments for delayed refunds under Section 171 during the period of exclusion from the ATL. The time spent outside the ATL will not be considered for calculating delayed refund payments. These measures, which have been in place since Tax Year 2018, are designed to enforce compliance and encourage timely filing of tax returns. The first Active Taxpayers List incorporating these provisions was issued on March 1, 2019, as per the Income Tax Rules, 2002. The FBR reiterated that timely filing of tax returns ensures inclusion in the ATL, offering benefits such as reduced withholding tax rates and expedited refunds. Section 182A serves as a critical mechanism to promote compliance and discourage tax evasion. Taxpayers are urged to understand these provisions and file their returns promptly to avoid penalties and disruptions in tax-related benefits.

Date: 2024-11-17

Details: Hyderabad, November 17, 2024 â€“ In a significant move to combat tax evasion, the Regional Tax Office (RTO) Hyderabad has confiscated a massive quantity of non-duty paid cigarettes. This operation is part of an ongoing nationwide campaign by the Federal Board of Revenue (FBR) against tax and duty evasion in the tobacco sector. Officials from RTO Hyderabad revealed that the crackdown targeted multiple retailers in Hyderabad City suspected of selling counterfeit and non-duty-paid cigarettes. An estimated one million sticks of illicit cigarettes were seized during the operation. The seized inventory reflects the widespread issue of tax evasion in the tobacco market, a sector that plays a vital role in contributing to Pakistanâ€™s national revenue. The crackdown was executed under the directives of Chief Commissioner Inland Revenue (CCIR) Qazi Hifzurahman, emphasizing the RTOâ€™s commitment to eradicating illegal trade practices. â€œThe operation will continue unabated,â€ officials stated, vowing to pursue those involved in the sale of counterfeit cigarettes. Describing the perpetrators as â€œmerchants of death,â€ the RTO pledged to hold violators accountable and ensure strict adherence to tax compliance laws. The tobacco sector is a major contributor to Pakistanâ€™s revenue, generating substantial funds through duties and taxes. However, tax evasion in the form of counterfeit and non-duty-paid cigarettes poses a significant challenge to the FBRâ€™s revenue collection efforts. These illicit practices not only deprive the government of critical funds but also encourage the proliferation of low-quality, unregulated products in the market. Despite stringent monitoring mechanisms, many tax evaders exploit gaps in the system, causing immense financial losses to the state. The confiscation of such a large quantity of illegal cigarettes highlights the scale of the problem and underscores the importance of continued enforcement efforts. The RTO Hyderabadâ€™s initiative aligns with the FBRâ€™s broader agenda to curb illicit trade and safeguard the economy. By targeting offenders in the tobacco industry, authorities aim to send a strong message about the consequences of tax evasion while protecting the legitimate market from unfair competition. This operation is expected to bolster the governmentâ€™s revenue collection and ensure compliance among businesses, marking another step toward financial stability and accountability in the country.

Date: 2024-11-16

Details: Islamabad, November 16, 2024 â€“ The Federal Board of Revenue (FBR) announced a significant reshuffle within Pakistan Customs Service (PCS) on Saturday, transferring 69 officers in grades BS-17 and BS-18 across various regions of the country. The transfer orders, which were issued on a public holiday, highlight the FBRâ€™s urgency to streamline operations and strengthen the enforcement of anti-smuggling measures. Sources within the FBR revealed that the reshuffle is part of the ongoing transition within Pakistan Customs, aimed at optimizing the performance of key officials to address growing concerns over smuggling and to enhance revenue collection. The FBRâ€™s strategy involves placing experienced and capable officers in critical positions to meet the demands of these pressing challenges. The reshuffle comes as part of FBRâ€™s larger initiative to combat illegal trade, safeguard revenue, and support local industries. The FBR is increasingly focusing on efforts to curb smuggling, which has been identified as a significant threat to both the economy and the nationâ€™s revenue collection. The aim is to deploy the right people to key roles to streamline operations, improve enforcement, and enhance compliance within the customs sector. Some of the key transfers and postings include the following: 1. Muhammad Aftab (Pakistan Customs Service, BS-18) has been transferred and posted as Deputy Collector at the Collectorate of Customs Enforcement, Gadani, from his previous role as Deputy Director at the Directorate of IPR Enforcement (South), Karachi. 2. Hamid Hussain (Pakistan Customs Service, BS-18) will now serve as Deputy Director at the Directorate of IPR Enforcement (South), Karachi, from his previous role as Deputy Collector at the Collectorate of Customs, Gwadar, with additional responsibility for the Directorate of Transit Trade in Gwadar. 3. Waheed Anwar Abro (Pakistan Customs Service, BS-18) has been appointed as Deputy Collector at the Collectorate of Customs Appraisement, Port Muhammad Bin Qasim, Karachi, after serving as Deputy Collector at the Office of the Chief Collector of Customs Enforcement (South), Custom House, Karachi. 4. Maqbool Ahmad (Pakistan Customs Service, BS-18) has been transferred to Deputy Collector (HQ/Projects) at the Collectorate of Customs Enforcement, Multan, from his previous role as Deputy Director at the Directorate General of Customs Valuation, Karachi. 5. Muhammad Arslan Majeed Rana (Pakistan Customs Service, BS-18) will now serve as Deputy Director at the Customs Academy of Pakistan (CAP), Karachi, after serving as Deputy Director at the Directorate General of Customs Valuation, Karachi. 6. Ms. Arma Hassan (Pakistan Customs Service, BS-18) has been posted as Deputy Director at the Directorate of Transit Trade (HQ), Karachi, from her previous role as Deputy Collector at the Collectorate of Customs Appraisement (East), Custom House, Karachi. 7. Ms. Sadia Usman (Pakistan Customs Service, BS-18) will now serve as Additional Collector (OPS) at the Collector HQs-Airports, Islamabad, after serving as Deputy Director at the Directorate of Post Clearance Audit (North), Islamabad. 8. Muhammad Zohaib (Pakistan Customs Service, BS-18) has been appointed Deputy Collector at the Collector HQs-Airports, Islamabad, after his tenure as Deputy Collector at the Collectorate of Customs Enforcement, Sargodha. 9. Ali Mohtashim Minhas (Pakistan Customs Service, BS-18) has been transferred to Deputy Collector at the Collectorate of IOCO, Lahore, from his previous role at the Collectorate of Customs Enforcement, Lahore. 10. Ms. Sadaf Rehman Khan (Pakistan Customs Service, BS-18) has been transferred and posted as Deputy Director at the Directorate General of Customs Valuation, Karachi, after serving as Deputy Director at the Directorate General of Transit Trade, Karachi. The reshuffle aims to strengthen Pakistanâ€™s customs enforcement and is expected to result in better compliance, more effective monitoring of goods, and enhanced capacity to deal with the growing threat of illegal trade. FBR initiative also demonstrates its commitment to adapting to the evolving challenges in the global and domestic trade landscape. The transfers reflect the governmentâ€™s determination to improve the overall efficiency of the Customs department, ensuring better revenue collection and effective safeguarding of national interests.

Date: 2024-11-16

Details: The Pakistan Tax Bar Association (PTBA) has urged the newly appointed Chief Justice of Pakistan, Justice Yahya Afridi, to address key high-profile tax cases that remain unresolved. These cases include matters related to the super tax, Capital Value Tax, and the Section 7E levy. In a detailed letter, PTBA highlighted the significant challenges posed by these pending cases, particularly the 4B and 4C super taxes and the Capital Value Tax. They emphasized the need for an efficient resolution to reduce the backlog and provide clarity to taxpayers. As part of their recommendations, PTBA proposed integrating resolved tax cases into an automated judicial system. This system would assist courts and tribunals in expediting cases at the preliminary â€œKacha Peshiâ€ stage, potentially easing the burden on the judiciary and curtailing prolonged litigation. The association also voiced concerns regarding recent amendments introduced through the Tax Laws Amendment Act, 2024. Under these changes, appellate remedies under income and sales tax laws have been redefined. For disputes involving demands below Rs. 20 million, appeals can now only be filed as references in High Courts, with a mandatory 30% payment required to obtain a stay. Additionally, a Rs. 50,000 fee has been imposed on such filings. PTBA argued that these measures would increase the workload of High Courts, restrict taxpayersâ€™ rights to an impartial and timely hearing, and limit the courtsâ€™ discretion in granting stays. To further streamline tax litigation, PTBA requested representation in a committee recently established by the Chief Justice to oversee tax-related cases. The association offered its expertise to develop mechanisms that could expedite case disposal. â€œThese reforms are essential for addressing Pakistanâ€™s economic challenges, reducing litigation delays, and fostering an environment conducive to foreign and local investment,â€ the PTBA stated. The associationâ€™s proactive approach underscores the critical role of judicial reforms in resolving Pakistanâ€™s economic and taxation issues.

Date: 2024-11-16

Details: Islamabad, November 16, 2024 â€“ Experts at a seminar titled â€œTaxing Tobacco: A Path to Reducing Consumption and Saving Livesâ€ highlighted the pressing need for a comprehensive and sustainable tobacco taxation policy in Pakistan. Organized by the Sustainable Development Policy Institute (SDPI), the seminar brought together policymakers, public health experts, and civil society representatives to underscore the transformative potential of taxation as a public health and economic tool, according to a press release issued on Saturday. Tobacco Taxation: A Critical Public Health Imperative Speakers at the seminar stressed that Pakistanâ€™s existing two-tiered tobacco taxation system inadvertently enables the tobacco industry to circumvent public health objectives. Industry practices, such as preemptively raising prices ahead of budget announcements, were identified as mechanisms to dilute the impact of tax increases. Moreover, the absence of taxes on smokeless tobacco products like Naswar and the minimal regulation of nicotine pouches create significant loopholes, allowing the industry to exploit alternative markets and sustain consumption. Experts advocated for a unified, long-term taxation framework encompassing all tobacco products. Such a policy would reduce affordability, address health disparities, and align with global best practices, particularly the World Health Organizationâ€™s (WHO) Framework Convention on Tobacco Control (FCTC) and MPOWER framework. Recommendations and Strategies for Reform Participants called for adopting health-specific taxes to fund public health initiatives and emphasized combating illicit cross-border trade through regional collaboration. Expanding the track-and-trace system to include exports and smokeless tobacco products was highlighted as a crucial step toward enforcement. Notably, the seminar reiterated the WHOâ€™s guideline of ensuring a minimum 70% tax share in the retail price of tobacco productsâ€”a target that Pakistan has yet to achieve. Regular tax adjustments to account for inflation were deemed essential to maintaining affordability controls. Expert Insights â€¢ Syed Wasif Ali Naqvi, Senior Research Associate at SDPI, emphasized that tobacco taxation is a proven strategy for reducing consumption while generating significant government revenue. He criticized the absence of long-term policies, noting that industry interference remains a persistent barrier. â€¢ Dr. Waseem Iftikhar Janjua called for progressive taxation to reduce the affordability of tobacco products, particularly loose cigarettes, a common entry point for youth smokers. He underscored the necessity of regulating nicotine pouches and smokeless tobacco products to curb their growing market presence. â€¢ Asif Iqbal highlighted the importance of a stable 3â€“5-year taxation framework, pointing out that the widening tax gap between economy-tier and premium-tier brands undermines equity. He advocated for gradual tax increases on economy-tier products and targeted measures to combat illicit trade. â€¢ Khurram Hashmi, Senior Technical Lead at Vital Strategies, focused on countering industry narratives. He highlighted the economic and health benefits of stringent taxation policies and called for unified advocacy among anti-tobacco stakeholders during budget deliberations. A Call to Action The seminar concluded with a collective call for evidence-based taxation reforms aimed at reducing tobacco consumption and prioritizing public health over industry profits. Pakistanâ€™s current taxation framework, heavily influenced by political considerations, requires strategic realignment to achieve sustainable health and economic outcomes. By consolidating recommendations from civil society and public health advocates, the event aimed to build momentum for robust anti-tobacco measures in the upcoming budget, addressing the tobacco industryâ€™s pervasive influence and advancing the nationâ€™s public health agenda.

Date: 2024-11-16

Details: Karachi, November 16, 2024 â€“ The Federal Board of Revenue (FBR) has clarified the monetary penalty for individuals found guilty of concealing income under the Income Tax Ordinance, 2001. The FBRâ€™s latest directive aims to strengthen tax compliance and ensure transparency in income declarations. According to the FBR, any person who conceals their income or provides inaccurate details regarding their income, including suppressing income or claiming deductions for expenses that were not actually incurred, will be penalized. This also includes any act of providing misleading information to the Income Tax authorities or the appellate tribunal during proceedings under the Income Tax Ordinance. The FBR stated that the penalty for concealing income would be one hundred thousand rupees or an amount equal to the tax that the person sought to evadeâ€”whichever of the two amounts is higher. This penalty is designed to deter individuals from engaging in tax evasion by hiding or misrepresenting their income. However, the FBR also clarified that penalties would not be imposed in cases where a claim for exemption from tax on certain income or a deduction for any expense is simply disallowed. In such instances, no penalty will apply unless it can be proven that the person made the claim with knowledge that it was incorrect or fraudulent. This distinction is crucial to avoid penalizing taxpayers who may make honest mistakes when filing their taxes. The new regulations aim to address the growing issue of concealed income in Pakistan, which significantly undermines the countryâ€™s tax collection system. Concealing income and making false claims not only harms the economy but also places an unfair burden on honest taxpayers who comply with the law. The FBRâ€™s move is part of a broader initiative to combat tax evasion and improve tax compliance in Pakistan. By setting clear penalties for income concealment, the FBR hopes to encourage more people to honestly report their earnings and avoid attempts to evade taxes. The government is also working on enhancing its monitoring and enforcement mechanisms to detect hidden income and ensure that all taxpayers contribute their fair share to the national revenue. As the FBR continues to implement measures to curb tax evasion, individuals and businesses are advised to be vigilant in accurately reporting their income and expenditures to avoid penalties under the Income Tax Ordinance. With the implementation of these measures, the FBR aims to foster a more transparent and equitable taxation system in Pakistan.

Date: 2024-11-15

Details: ISLAMABAD: Minister of State for Finance and Revenue, Ali Pervaiz Malik said Thursday that the government will reduce tax burden on salaried class and withdraw tax on milk if the Federal Board of Revenue (FBR) is able to recover Rs 300 billion to Rs 350 billion of tax evasion from non-duty paid and smuggled cigarettes. He was addressing the roundtable discussion on the FBRâ€™s Track and Trace System (TTS) compliance held here on Thursday. Malik stated that the prime minister has directed the FBR to reduce the incidence of income tax on salaried class which is only possible by controlling evasion of Rs300 billion to Rs350 billion within the illicit trade of cigarettes within the tobacco sector. Rs237bn FED collected from cigarettes in 2023-24 Hosted by the Institute of Public Opinion and Research (IPOR) in collaboration with PILDAT, the event united key stakeholders, including government officials, industry leaders, policy experts, and media representatives, to evaluate the findings from IPORâ€™s latest study. The event was chaired by Ali Pervaiz Malik, who shared his perspective on the governmentâ€™s commitment to ensuring compliance within all the sector, stressing that enhanced regulatory measures are needed to achieve TTS goals. He highlighted the ongoing digitalisation process and the importance of integrating technology to improve efficiency. He also emphasised that economic stability is a collective effort, requiring collaboration across all sectors. Malik underscored the need to raise awareness about these challenges to build a more resilient and stable economy. The session began with the welcome remarks by Mamoon Bilal, advisor PILDAT, followed by presentation on the key findings from the IPOR study by Tariq Junaid, CEO of IPOR, who underscored the troubling levels of non-compliance within the industry. Salaried class: Higher income tax rate of up to 35pc imposed Efforts to implement the track and trace system in the tobacco sector kick started in 2021 along with three other sectors - cement, fertiliser and sugar. Since July 2022 selling a cigarette pack without a track and trace stamp is illegal. However, since the deadline, track and trace compliance remains a distant dream. The IPOR conducted a market research study in 11 cities across Punjab and Sindh covering 40 retail outlets in 18 markets covering a total of 720 outlets. The focus of the study was twofold; ascertaining level of TTS compliance at point of sale and measuring compliance of the Minimum Legal Price (MLP) for cigarettes which is mandated by the FBR. According to the report, out of 264 cigarette brands surveyed, only 19 fully adhered to the TTS regime requirements, which mandate the use of Track and Trace stamps. Non-compliant brands accounted for 58 per cent of the market, comprising locally manufactured duty-not-paid (DNP) brands (65 per cent) and smuggled brands (35 per cent) with violations ranging from missing TTS stamps to non-adherence to pricing or health warning regulations. Furthermore, 197 brands were found to be selling below the minimum legal price whereas 48 brands which were selling above the MLP were non-compliant to the stipulated legal requirements. 19 brands were found to be compliant to all stipulated legal requirements and were selling above the MLP. The roundtable provided a platform for stakeholders to engage in in-depth discussions about the challenges facing the TTS system, its enforcement at the retail level, and the overall impact of non-compliance on the FBRâ€™s tax collection and public health efforts. Key speakers included Muhammad Zaheer Qureshi, project director for the Track and Trace System at FBR, who outlined the current state of compliance enforcement and emphasised the importance of robust tracking mechanisms to deter tax evasion. He highlighted the challenges faced in implementing the Track and Trace System, including issues of industry compliance and technological adaptation, and shared insights into how the FBR is tackling these obstacles through enhanced regulatory oversight. The roundtable concluded with actionable recommendations, including strengthening enforcement at retail levels to curb access to non-compliant brands, increasing penalties for violations, launching public awareness campaigns to educate consumers on the significance of purchasing compliant products. Copyright Business Recorder, 2024

Date: 2024-11-15

Details: KARACHI: The countryâ€™s tax appeal system has fallen into â€œdysfunctionâ€ phase six months after major reforms were implemented through the Tax Laws (Amendment) Act 2024, putting Rs. 2.7 trillion tax litigations into an uncertain situation. In a letter sent to the minister for law and justice, the Pakistan Tax Bar Association (PTBA) said the legislation, which was touted as a solution to unlock Rs 2.7 trillion in pending tax litigation, has instead created new bottlenecks and failed to deliver on its key promises. â€œThe tax judicial forum up to the Appellate Tribunal Inland Revenue (ATIR) appears dysfunctional and getting justice has become both difficult and expensive for taxpayers,â€ said PTBA. Deterioration of ATIR working: PTBA urges law minister to form oversight body The letter highlights severe understaffing at the ATIR, with major cities operating at less than half capacity. Karachi, the countryâ€™s financial hub, currently has only four tribunal members against a sanctioned strength of 12. Operational inefficiencies have compounded the staffing issues. Tribunal benches are reported to start late and end early, operating from 11 AM to 3 PM instead of following standard High Court hours. The letter said that judgment deliveries were frequently delayed, and case disposal statistics were being manipulated by counting simple stay order extensions as fully resolved cases. â€œThe situation is particularly concerning in terms of case backlog,â€ noted the PTBA and added that the cases dating back to 2014 were being pushed further back as the tribunal was prioritizing newer cases filed in 2024, creating a growing backlog of older disputes,â€œ it said. The reform law had promised transparent recruitment of new tribunal members with competitive salary packages. However, six months later, these positions remain largely unfilled. â€œThe complete recruitment process hasnâ€™t even begun in earnest,â€ the PTBA said. It said that the financial implications for taxpayers had also increased as the mandatory High Court references were required in the new system for certain cases, with reference fees set at Rs 50,000. This, combined with complex appeal procedures, has significantly increased litigation costs for taxpayers, the letter said. The PTBA recommended the formation of an oversight committee, fast-tracking recruitment of tribunal members, review of the high court reference system, reconsideration of reference fees and modification of the 30 percent payment requirement for filing references. Copyright Business Recorder, 2024

Date: 2024-11-15

Details: Islamabad, November 15, 2024 â€“ The Federal Board of Revenue (FBR) has issued new guidelines outlining the functions and jurisdiction of the Directorate General of Intelligence and Investigation (I&I) Customs. The FBR formalized these changes through SRO 1815(I)/2024, released on Friday. Expanded Functions of DG I&I Customs The FBR detailed the responsibilities of the Directorate General, emphasizing its role in combating tax evasion, smuggling, and financial crime. According to the FBR, key tasks include: 1. Intelligence Gathering: Collecting information on duty or tax evasion linked to imports, exports, and concessionary schemes. The insights will be shared with the FBR and relevant field formations through intelligence alerts. 2. Anti-Smuggling Operations: Monitoring smuggling activities, including identifying trends, beneficiaries, and facilitators, and reporting findings to the FBR and concerned authorities. 3. Data Analysis: Leveraging advanced technologies like data analytics, machine learning, and non-intrusive intelligence methods to detect organized fraud. 4. Targeted Operations: Conducting operations against tax and customs violations with prior or post-facto approval from Member Customs (Operations). Strengthening AML Compliance The FBR has assigned the Directorate additional responsibilities under the Anti-Money Laundering Act, 2010. These include exercising powers under Section 26 of the Customs Act, 1969, specifically for AML-related offenses. The FBR aims to enhance compliance and coordination with international and national agencies. Collaborations and Strategic Partnerships In line with FBR directives, the Directorate will establish stronger connections with international bodies, local agencies, and the National Targeting Centre to streamline enforcement actions. FBRâ€™s Vision for Enhanced Oversight The FBRâ€™s notification underscores its commitment to improving oversight and operational efficiency. By equipping the DG I&I Customs with clear directives and advanced tools, the FBR seeks to ensure greater transparency and accountability in trade and customs operations. Looking Ahead These updates represent a significant step in the FBRâ€™s efforts to combat illicit trade and financial crimes. The focus on intelligence-driven operations and advanced data analysis reflects the FBRâ€™s resolve to modernize Pakistanâ€™s customs framework and align it with global best practices. The FBRâ€™s comprehensive approach highlights the importance of robust enforcement mechanisms in safeguarding national revenue streams and promoting lawful trade.

Date: 2024-11-15

Details: Karachi, November 15, 2024 â€“ Pakistanâ€™s provincial governments have collectively gathered Rs 122 billion in sales tax on services during the first quarter (July â€“ September) of fiscal year 2024-25, according to data released by the federal finance ministry. This marks a 15% increase from the Rs 106.28 billion collected during the same period in the previous fiscal year. The province of Sindh led the charge, collecting Rs 58 billion, reflecting a growth of 20.25% compared to Rs 48.23 billion in the first quarter of fiscal year 2023-24. Sindhâ€™s strong performance was bolstered by the growing demand for services and efficient tax administration, contributing significantly to the national revenue pool. Punjab, the countryâ€™s most populous province, followed closely behind with Rs 50.86 billion in sales tax on services, up by 8% from Rs 47.03 billion collected in the corresponding period of the previous fiscal year. The growth in Punjabâ€™s tax collection highlights the provinceâ€™s expanding service sector, particularly in urban areas like Lahore, which have seen rapid economic development. Khyber Pakhtunkhwa (KP) posted a remarkable 32% increase in its sales tax collection, reaching Rs 9 billion, up from Rs 6.82 billion in the same period last year. This surge is attributed to the provinceâ€™s expanding infrastructure and services, especially in sectors such as telecommunications and real estate, which have contributed to higher tax revenue. Balochistan, while the smallest contributor among the provinces, also saw an increase in sales tax collections, amounting to Rs 4.37 billion for the first quarter, up 5.81% from Rs 4.13 billion collected during the same period last year. This modest growth is reflective of the provinceâ€™s ongoing development initiatives and gradual diversification of its service-based economy. The overall increase in sales tax on services collected by the provinces is a positive indicator of economic activity, with significant contributions from key sectors such as telecommunications, banking, transport, and real estate. The federal finance ministryâ€™s data also reflects the positive trend in provincial tax collection, demonstrating a more efficient and broad-based tax system in place. The growth in sales tax revenue will help bolster provincial budgets, providing the necessary funds to support public services and infrastructure development. As Pakistanâ€™s economy continues to recover, the provinces are expected to play a crucial role in driving sustainable fiscal growth.

Date: 2024-11-15

Details: Lahore, November 15, 2024 â€“ In a significant move, the Punjab Assembly passed the Punjab Agricultural Income Tax (Amendment) Bill 2024 on Thursday, despite opposition protests and a walkout by members of the Pakistan Peoples Party (PPP) and Pakistan Tehreek-e-Insaf (PTI). The bill, which seeks to increase taxation on agricultural income in Punjab, will now go to the governor for final approval, though insiders suggest it may be sent back to the Assembly for reconsideration. The legislation, part of a broader push to tax agricultural income more equitably, extends the tax net to include income from livestock owned by farmers. This approach is intended to broaden the tax base by ensuring that higher-earning farmers contribute proportionately. However, the billâ€™s opponents argue it aligns too closely with international lending pressures, particularly from the International Monetary Fund (IMF), rather than addressing the unique needs of Pakistanâ€™s farmers. Under the new tax framework, higher-earning farmers will face a progressive tax rate on their agricultural income, including revenue from livestock. In addition, the bill stipulates a daily penalty of 0.1% on unpaid taxes for tax defaulters. Punjab Minister for Parliamentary Affairs Mian Mujtaba Shuja ur Rehman described the bill as part of a â€œnew regime of agricultural income taxation,â€ aimed at improving equity and revenue generation. The opposition, however, raised strong objections. PPP parliamentary leader Syed Ali Haider Gilani criticized the government for failing to consult opposition parties on the billâ€™s draft, describing the PPP as a â€œpro-farmerâ€ party that cannot support legislation imposing undue financial pressure on farmers. He argued that the agricultural sector, a lifeline for many in Pakistan, requires policies that bolster rather than burden farmers. PTI senior legislator Rana Aftab Ahmad Khan denounced the billâ€™s passage as a â€œblack dayâ€ for agriculture, arguing that taxing the sector harms economic growth. He pointed out that the oppositionâ€™s recommendations had been ignored, stating that the law minister, not the parliamentary affairs minister, should have overseen this legislation. Khan also suggested that under Article 142 of the Constitution, agricultural taxes are beyond the provincial legislatureâ€™s mandate, potentially rendering the bill unconstitutional. Other opposition voices echoed these concerns. PTI MPA Ahmar Rasheed Bhatti called the bill anti-farmer, while Nadeem Qureshi, an opposition MPA from Multan, argued that a 40% tax on agricultural income would economically cripple farmers, likening it to an â€œeconomic death sentenceâ€ for those in agriculture. The billâ€™s passage signals a critical step toward restructuring Punjabâ€™s tax policy, but the strong opposition highlights the ongoing debate over balancing fiscal reforms with protections for Pakistanâ€™s agricultural community.

Date: 2024-11-15

Details: Karachi, November 15, 2024 â€“ Pakistan has seen a significant surge in motor vehicle tax collection, with a 54% increase in the first quarter (July â€“ September) of the fiscal year 2024-25. According to recent data released by the federal finance ministry, the total collection for this period reached Rs 13.82 billion, up from Rs 8.98 billion in the same quarter of the previous fiscal year. Motor vehicle taxes are collected by provincial governments in Pakistan, and the latest figures show strong performance across the country. Punjab, the largest province in terms of population and economic activity, led the charge with a collection of Rs 8.92 billion during the July-September period of the current fiscal year. This marks a notable 50% increase compared to Rs 5.55 billion collected in the same period last year. Sindh, home to the countryâ€™s largest city Karachi, also showed impressive growth, with a 69.4% increase in motor vehicle tax collection. The province collected Rs 4.32 billion during the first quarter of FY25, compared to Rs 2.55 billion in the corresponding period of the previous fiscal year. Khyber Pakhtunkhwa, another key province, posted a solid 36% increase in its tax revenue, collecting Rs 862 million in motor vehicle taxes, up from Rs 635 million in the same quarter of FY24. Meanwhile, Balochistan recorded a 25.5% increase, with the province collecting Rs 320 million in motor vehicle taxes, compared to Rs 255 million during the same period last year. The increase in motor vehicle tax collection is seen as a positive sign for Pakistanâ€™s economy, reflecting both the rise in vehicle ownership and improved compliance with tax regulations. It is also indicative of the provincial governmentsâ€™ growing efficiency in tax collection efforts. Experts suggest that the surge in tax collection could help address budget deficits and strengthen the financial position of provincial governments. The trend may also encourage further reforms in the motor vehicle taxation system to ensure continued growth in revenue. With the first-quarter results already showing such strong performance, there is optimism that this momentum could continue throughout the remainder of the fiscal year. As the government focuses on enhancing its tax collection mechanisms, the continued growth in motor vehicle tax revenue is likely to play a key role in achieving fiscal stability.

Date: 2024-11-15

Details: Islamabad, November 15, 2024 â€“ Minister of State for Finance and Revenue, Ali Pervaiz Malik, has emphasized the need to alleviate the tax burden on salaried individuals by curbing widespread tax evasion in the tobacco industry. Addressing a roundtable on Thursday, he expressed the governmentâ€™s commitment to reducing income tax for the salaried class, contingent upon the Federal Board of Revenue (FBR) recovering an estimated Rs 300-350 billion lost to non-duty-paid and smuggled cigarettes. The roundtable discussion, hosted by the Institute of Public Opinion and Research (IPOR) in collaboration with PILDAT, brought together government officials, industry leaders, policy experts, and media representatives. The event focused on the FBRâ€™s Track and Trace System (TTS) compliance, a regulatory initiative designed to curb tax evasion across multiple sectors, including tobacco. In his keynote address, Malik reiterated the governmentâ€™s dedication to ensuring economic stability through collaboration among all sectors. He highlighted the pressing need for increased compliance within the tobacco industry, particularly regarding the TTS, which has been operational since 2021. Malik stressed the role of technology and digitalization in streamlining regulatory processes, urging stakeholders to work collectively toward achieving the systemâ€™s goals. The IPORâ€™s latest study on TTS compliance revealed troubling findings. Conducted across 11 cities in Punjab and Sindh, the research covered 720 retail outlets. Of the 264 cigarette brands surveyed, only 19 fully complied with TTS regulations. A staggering 58% of the market was dominated by non-compliant brands, comprising 65% locally manufactured duty-not-paid products and 35% smuggled goods. Non-compliance extended beyond missing TTS stamps to violations of minimum legal pricing (MLP) and health warning requirements. The study noted that 197 brands sold cigarettes below the MLP, while 48 brands, despite being priced above the MLP, failed to meet other legal standards. These findings underscore the challenges the FBR faces in enforcing regulations within the sector. Speakers at the event, including Muhammad Zaheer Qureshi, project director for the TTS at FBR, highlighted the systemâ€™s enforcement gaps and technological hurdles. He outlined the importance of robust tracking mechanisms to deter tax evasion and emphasized the need for increased penalties for violations and enhanced consumer awareness campaigns. Efforts to implement TTS compliance in the tobacco sector have faced setbacks since its inception. While selling unstamped cigarette packs has been illegal since July 2022, compliance remains inconsistent, affecting the FBRâ€™s tax collection targets and public health objectives. The roundtable concluded with recommendations to strengthen enforcement at the retail level, introduce stricter penalties for non-compliance, and educate consumers about the importance of purchasing compliant products. Stakeholders agreed on the critical role of sustained regulatory oversight and industry collaboration in addressing these challenges. With the governmentâ€™s directive to reduce the tax burden on salaried individuals tied to curbing illicit trade, achieving TTS compliance is now seen as a pivotal step toward fiscal sustainability and equitable taxation.

Date: 2024-11-14

Details: Former Caretaker Federal Minister for Commerce Dr Gohar Ejaz urged the government to meet its collection target by taxing the â€œabnormal profits of sacred cowsâ€ in certain sectors rather than burdening the common man. â€œThe tax shortfall of over 180 billion in the first four months must not be met by directly or indirectly taxing common people who are already struggling to meet their basic living standards due to 60% inflation in the last 2.5 years,â€ said Ejaz, in a post on X platform on Thursday. Ejaz who also chairs the FPCCI Pakistan Economic Revival and Growth Think Tank, said that reforms in the taxation system must meet the shortfall in tax collection to tax â€œabnormal profitsâ€ of â€œsacred cowsâ€ â€œin specific sectors, due to policy weaknesses. â€œWe must provide relief in electricity rates, not only by reducing Rs12 per unit on incremental electricity usage but by applying an Rs12 per unit reduction for all consumersâ€”residential, commercial, industrial, and agriculturalâ€”on their total consumption. â€œThis can be achieved by finalizing the capacity payment agreement on a take-and-pay basis by December 31, 2024,â€ he added. The remarks come as an International Monetary Fund (IMF) delegation visits Pakistan to discuss recent developments and Extended Fund Facility (EFF) programme. Reports indicate that measures aimed at curtailing expenditure and increasing tax collection are to be high on the agenda of the IMF-Pakistan meetings. The Federal Board of Revenue (FBR) collected Rs877 billion during October 2024 against the assigned target of Rs980 billion, reflecting a shortfall of Rs103 billion. The FBR has collected Rs3,440 billion during the first four months of 2024-25 against the assigned target of Rs3,636 billion set for July-October of current fiscal year, reflecting a shortfall of Rs196 billion. On Tuesday, the FBR conveyed to the IMF team that there is no urgent need to enforce additional taxation measures (contingency revenue measures), except to examine a proposal to impose a lower rate of sales tax between 5-7% on petroleum products to overcome revenue shortfall in 2024-25.

Date: 2024-11-14

Details: LAHORE: Speaker Punjab Assembly Malik Muhammad Ahmad Khan on Wednesday emphasized the importance of open discussion on implementing agricultural tax in Punjab. He stated that the topic of agricultural tax should not be considered taboo, and Assembly members should actively share their views on the matter. During a conversation with the newly elected President and Secretary of the Punjab Assembly Press Gallery, the Speaker said, â€œIn Punjab, 70% of small farmers will not fall under the tax bracket, while agricultureâ€™s contribution to government revenue stands at around three billion rupees. However, subsidies provided to farmers are approximately 300 times this amount. We want Assembly members to engage in a thorough discussion on the farmersâ€™ tax bill.â€ Speaker Malik Muhammad Ahmad Khan further noted that over half of Punjabâ€™s population is linked to agriculture, yet this sector contributes only three billion rupees to the GDP. When agricultural tax is implemented, it will be essential to assess its balance with subsidies. â€œIt is necessary to ask, if the industrial sector has rights, then why shouldnâ€™t farmers have the same rights? Farmers are an integral part of our society,â€ he said. The Speaker also highlighted that in times of crop failure, will the government step forward to support the farmers, or will they be left helpless? He stressed that there should be a conversation on agricultural tax to safeguard farmersâ€™ rights through strong arguments. Malik Muhammad Ahmad Khan expressed concerns over the issue of smog, stating, â€œWe need to learn from the experiences of countries like China, the UK, and others. The Assembly is the place to come together and find a solution to this problem.â€ In response to a question, he said that globally, the trend is shifting away from land reforms towards corporate agriculture. â€œWe need further measures to give agriculture the status it deserves to secure the future of Punjabâ€™s farmers.â€ Earlier, during the session Standing Committee Chairman Noor Alam Watto presented the committeeâ€™s report in the assembly. Speaker Malik Muhammad Ahmad Khan reserved Thursday for discussion on the Agricultural Income Tax Bill. Expressing empathy, Khan said, â€œIf you donâ€™t want tax, my heart beats with you.â€ He assured Rana Aftab of an open discussion on concerns. Speaker invited the opposition to present any amendments to the bill during Thursdayâ€™s voting session. The Punjab Assembly unanimously passed a resolution condemning the attack on former Chief Justice Qazi Faez Isaâ€™s car in London. Government member Ahsan Raza presented the resolution, calling the attack a terrorist act planned by a political party to spread chaos. The resolution demanded that a strict legal action against those involved. Pakistanâ€™s government should talk to British government and register cases against culprits. The Speaker gave a ruling that a copy of the resolution should be sent to the federal government. He also directed that a copy should be sent to British diplomatic police, who visited the Pakistani High Commission. Government member Ali Haider Gillani informed the Punjab Assembly that Peopleâ€™s Party member Mamtaz Changâ€™s life is under threat. Speaker Malik Muhammad Ahmad Khan has formed a three-member committee, led by Gillani and including Mujtaba Shuja-ur-Rehman, to address these concerns. The threats against Chang stem from his vocal opposition to dacoits in Kachhi, particularly some SHOs who allegedly operate a â€œpolice state,â€ harassing and intimidating locals, including women and relatives Â¹. Gillani emphasized that Changâ€™s advocacy against Kachhi dacoits has made him renowned, but also targeted by these elements and even some police officials, who have issued death threats. The committee will convene an emergency meeting on Thursday morning, summoning the Regional Police Officer (RPO) to investigate these threats. This development follows Changâ€™s repeated expressions of concern for his safety through calls to attention and adjournment motions in the assembly, highlighting the risks faced by those speaking out against criminal elements in Kacha area. Copyright Business Recorder, 2024

Date: 2024-11-14

Details: Karachi, November 14, 2024 â€“ The Pakistan Tax Bar Association (PTBA) has expressed significant concerns regarding the Tax Laws (Amendment) Act, 2024, questioning its effectiveness in streamlining tax-related litigation and ensuring taxpayersâ€™ rights. In a letter addressed to Azam Nazeer Tarar, the Minister of Law and Justice, the PTBA has highlighted several issues that have emerged since the lawâ€™s implementation six months ago. The organization claims that instead of addressing inefficiencies in the tax litigation process, the act has added further complications, particularly in the functioning of the Appellate Tribunal Inland Revenue (ATIR). Amendments in the Appeal System and the Rationale Behind Them The Tax Laws (Amendment) Act, 2024, introduced structural changes to the appellate system, including adjustments to the pecuniary jurisdiction across the tax laws governed under the Income Tax Ordinance, 2001; Sales Tax Act, 1990; Federal Excise Act, 2005; and Customs Act, 1969. This shift aimed to expedite tax-related litigation processes, with the ultimate goal of resolving cases stuck in litigationâ€”estimated to total approximately Rs 2.7 trillion. The PTBA has reported that the well-established protocol, which allowed only legal questions to be referred to high courts, was disrupted. The amendments proposed recruitment of new members to the ATIR, offering competitive salary packages to attract qualified individuals. However, six months later, PTBA members report little to no improvement in the resolution of pending cases, and the appellate forums, especially the ATIR, are perceived as increasingly dysfunctional. PTBAâ€™s Key Concerns: Reality Check on the Actâ€™s Performance PTBAâ€™s letter raises several critical questions, casting doubt on whether the goals of the Tax Laws (Amendment) Act have been achieved. One of the primary questions relates to the effectiveness of tax adjudication processes post-enactment. The PTBA inquires about the number of cases that have been adjudicated, the decisions made in favor of taxpayers versus tax authorities, and the volume of cases remanded for re-adjudication. Furthermore, the PTBA points out the growing backlog of cases where judgments have been reserved but not issued, with no clear explanation provided. The PTBA also draws attention to the underwhelming progress in recruiting ATIR members. Despite assurances, the ATIRâ€™s branches across Karachi, Lahore, Islamabad, and Peshawar are operating below capacity. For example, in Karachi, only four members (three accountants and one judicial member) are present, though the sanctioned number is 12 (six accountant and six judicial members). This staffing shortage, according to PTBA, is causing delays, disrupting hearings, and impacting the quality of adjudication. Concerns Over Working Hours and Judgement Delays A major grievance expressed by PTBA members pertains to the ATIRâ€™s working hours. While tribunals in Sindh were expected to adopt the working hours of the Sindh High Court, starting at 8:30 a.m., PTBA reports that ATIR benches commence hearings around 11:00 a.m., with proceedings lasting until 3:00 p.m. Consequently, many cases are left unresolved, while judgments are often delayed or lack sufficient detail. Adding to the confusion, short-term orders for extending stay applications are recorded as â€œdisposals,â€ misleadingly inflating case resolution statistics. PTBA has called for a comprehensive report on post-May 2024 tribunal cases to verify these claims and evaluate the actâ€™s impact. Increased Appeal Fees and Reduced Tribunal Benches The amendments also included a significant hike in appeal fees, justified by the promise of an expanded ATIR bench structure with highly qualified members selected through a transparent process. However, PTBA has observed a reduction in functional benches; Karachi, for instance, now operates with only three benches instead of the previous six. PTBA members report deteriorating confidence in the ATIRâ€™s ability to provide impartial and fair rulings. This lack of trust is described as a â€œdisasterâ€ for judicial proceedings under tax laws, with taxpayers and legal professionals increasingly frustrated. Alternate Dispute Resolution and the Need for Procedural Reforms The PTBA also pointed out that the ATIR has failed to promote Alternate Dispute Resolution (ADR) mechanisms, as mandated by Section 132 of the Income Tax Ordinance, 2001. The tribunal is required to inform taxpayers of ADR options during the first hearing, but PTBA reports that this provision is not being implemented, with almost no cases referred to ADR. This lapse has prevented taxpayers from exploring faster, less costly alternatives to conventional litigation. Backlog of Appeals and Delays in Commissioner Inland Revenue (Appeals) Decisions Another key issue raised by PTBA is the mounting backlog of appeals at the Commissioner Inland Revenue (Appeals) level. Even when cases are adjudicated, they are frequently remanded for further review, contributing to an unending cycle of delays. The scarcity of operational Commissioner Appeal positions compounds the problem, further slowing the appellate process and creating bottlenecks that undermine the actâ€™s intended purpose. Unresolved Older Cases: Prioritization of Recent Appeals The PTBA has criticized the ATIRâ€™s prioritization of newer cases from 2024, which it says is pushing unresolved cases dating back to 2014 further down the queue. This approach, they argue, is unfair to taxpayers who have waited years for a resolution, only to be bypassed by recent cases. The PTBA suggests an honest assessment of the tribunalâ€™s performance in this regard, asserting that the ATIR has â€œmiserably failedâ€ to deliver on the actâ€™s promises of streamlined processes. Recommended Amendments and PTBAâ€™s Plea for Oversight In addition to highlighting grievances, the PTBA has proposed several amendments to the tax laws to alleviate taxpayer hardship. Key recommendations include: 1. Reviewing the Appeal Pathway: The PTBA suggests re-evaluating the requirement for taxpayers with lower tax demands to file appeals with high courts. Instead, they recommend permitting appeals before the tribunal. 2. Discretion on Reference Fees and Payment Conditions: PTBA recommends removing or allowing judicial discretion on the mandatory payment of a 30% reference fee under Section 133 (10) and a Rs. 50,000 fee as stipulated in Section 133 (12) of the Income Tax Ordinance, 2001. The PTBA has urged the Law Minister to establish an oversight committee to address these systemic issues and accelerate the recruitment of qualified tribunal members. They emphasize that further delays will erode taxpayersâ€™ fundamental rights to a fair trial and undermine confidence in Pakistanâ€™s tax appellate system. By voicing these concerns, PTBA remains committed to supporting the improvement of judicial institutions to ensure that taxpayers receive impartial, efficient, and accessible justice.

Date: 2024-11-14

Details: Islamabad, November 14, 2024 â€“ In a decisive move to meet Pakistanâ€™s ambitious revenue collection target without resorting to a mini budget, the Federal Board of Revenue (FBR) has shared an actionable plan with the International Monetary Fund (IMF). FBR has committed to achieving the 2024-25 revenue target of PKR 12.9 trillion, reinforcing its stance against imposing additional taxation measures. Insiders familiar with these developments disclosed on Wednesday that FBRâ€™s revenue target remains steadfast, with no plans to lower it for the current fiscal year. Contrary to concerns, sources assert there will be no sales tax imposition on petroleum products, ensuring the public is shielded from additional financial strain in this sector. Moreover, the government aims to initiate a nationwide agricultural income tax in 2025, addressing a longstanding gap in tax collection. As a result of recent policy reforms and enforcement initiatives, the tax-to-GDP ratio has risen from 8.8% to 10.3%, a development met with approval by the IMF. This increase is seen as a positive indicator of Pakistanâ€™s fiscal discipline and efforts to broaden its tax base. Looking ahead, sources suggest that stable exchange rates and an anticipated reduction in policy rates will fuel economic activity in December, expected to bolster revenue collection in the second quarter of 2024-25. To streamline tax compliance further, the FBR has drafted the Tax Laws Amendment Ordinance 2024, which has been submitted to the Prime Minister for approval. This ordinance introduces a unified family income tax return, eliminating the classifications of non-filers and late filers, and focuses solely on enforcement rather than rate increases. Discussions with the IMF also covered the Tajir Dost Scheme, which seeks to bring small retailers into the tax net. The FBR disclosed that it has already collected PKR 12 billion in taxes from retailers in the first quarter of 2024-25. However, it clarified that only 500,000 potential retailers are being targeted under the Tajir Dost Scheme, rather than the estimated three million small shopkeepers. An FBR source emphasized that the Tajir Dost Scheme is only a mechanism within a broader strategy to register retailers. â€œThe Tajir Dost Scheme is not the IMFâ€™s main objective; rather, the focus is on expanding the tax net to encompass major retail players. The scheme is simply one approach among several, including tax provisions under sections 236G and 236K of the Income Tax Ordinance 2001,â€ the source explained. The ultimate aim of FBR, in alignment with IMF expectations, is to bring significant, revenue-generating retailers into compliance, marking a critical step toward improving Pakistanâ€™s tax ecosystem without compromising public welfare or introducing disruptive fiscal measures.

Date: 2024-11-13

Details: November 13, 2024 Islamabad, November 13, 2024 â€“ The Federal Board of Revenue (FBR) is contemplating a strategic reversal of the sales tax exemption on petroleum products, potentially introducing a modest 5-7% tax to stabilize fiscal revenues amid a challenging economic landscape. This proposal, now under review, emerged during recent discussions between the FBR and the International Monetary Fund (IMF), aimed at addressing Pakistanâ€™s budgetary needs while avoiding abrupt price surges in fuel. During a series of high-level meetings, FBR officials informed the IMF mission that they currently do not foresee the need for extensive additional revenue measures for 2024-25, aside from the possible reintroduction of a reduced sales tax on petroleum. This tax adjustment, while not yet finalized, is being scrutinized as a critical step to offset a substantial revenue deficit without imposing excessive financial burdens on consumers. Sources within the FBR disclosed that a review of sales tax on petroleum products is ongoing, with emphasis on achieving the year-end revenue target of PKR 12.97 trillion. At this stage, the FBR communicated that initiating contingency revenue measures would be premature, and it prefers to implement a targeted, incremental approach. This measured stance underscores the FBRâ€™s cautious navigation of fiscal policy adjustments, particularly during the early stages of the fiscal year. The FBR has faced considerable fiscal strain due to prior sales tax exemptions on petroleum products, with a reported revenue loss of PKR 1.25 trillion during the 2022-23 period, as detailed in the Tax Expenditure Report-2024. This report underscores the financial impact of tax exemptions on key petroleum products, including Petrol (MS), High-Speed Diesel (HSD), Kerosene, and Light Diesel Oil (LDO). These products, accounting for a combined 43.99% of total sales tax exemptions, saw a nearly 99% growth in tax expenditures over a short period, underscoring the significant fiscal drain attributable to this policy. Additionally, discussions during the IMF-FBR meetings highlighted advancements in digital tax management, with the FBR detailing its plan to expand digital monitoring across various sectors. This expansion aims to enhance compliance and track revenue flow in critical industries, including petroleum, beverages, pharmaceuticals, and steel, through a comprehensive track-and-trace system. These technological initiatives form part of a broader effort to streamline the supply chain and optimize tax collection without resorting to abrupt tax hikes. The IMF team expressed interest in these digitalization strategies, viewing them as instrumental in broadening the FBRâ€™s tax base and curtailing revenue losses. The FBRâ€™s ongoing efforts underscore its commitment to sustainable fiscal solutions, balancing revenue generation with economic stability amid evolving fiscal demands. As the proposal for a limited sales tax on petroleum advances, stakeholders across the economic spectrum await further updates on this pivotal decision, which holds significant implications for Pakistanâ€™s revenue landscape and the broader fiscal health of the economy.

Date: 2024-11-13

Details: Islamabad, November 13, 2024 â€“ In a move towards modernizing Pakistanâ€™s tax infrastructure, the Federal Board of Revenue (FBR) launched its latest digital innovation, ePayment 2.0, on Wednesday. This new system enables taxpayers to make direct payments for taxes and duties securely and efficiently, all from the comfort of their bank accounts. The FBRâ€™s launch of ePayment 2.0 is a significant step aligned with the governmentâ€™s commitment to advancing tax administration through digital solutions. The new system is integrated directly within the IRIS 2.0 portal, a comprehensive platform designed to simplify tax processes for individuals and businesses across Pakistan. Through ePayment 2.0, taxpayers can complete transactions online via internet banking, ATMs, and mobile banking apps, eliminating the hassle of visiting banks physically. The ePayment 2.0 platform encompasses a wide array of taxes, including Income Tax, Sales Tax, Federal Excise Duty, and Withholding Taxes. This new development replaces the previous ePayment system, which required users to access a separate portal. With ePayment 2.0, all necessary tax payment features are now unified under the IRIS 2.0 interface, enabling taxpayers to manage their tax obligations more conveniently and efficiently. One of the key features of ePayment 2.0 is the simplified generation of a unique Payment Slip ID (PSID), which allows both registered and unregistered taxpayers to complete payments quickly and accurately. Upon successful payment, the system issues a Computerized Payment Receipt (CPR), which is sent via email and SMS, providing users with instant confirmation. This streamlined experience makes record-keeping and future compliance simpler, as taxpayers can easily retrieve payment receipts within the IRIS 2.0 platform. The new system introduces a precise multi-step workflow designed to minimize errors and delays, making tax payments more reliable. Taxpayers can generate a PSID, proceed with payment through various banking channels, and instantly receive a CPR, creating a seamless and transparent process. To further support user convenience, ePayment 2.0 includes an enhanced PSID search feature, allowing taxpayers to retrieve their payment records with ease. This automation and integration improve not only the accuracy of payments but also the overall efficiency of Pakistanâ€™s tax system, reflecting FBRâ€™s vision for a compliant and business-friendly environment. The inauguration of ePayment 2.0 was held at PRAL Headquarters in Islamabad, attended by Aisha Farooq, FBRâ€™s Director General (IT&DT). Her remarks emphasized the strategic value of this digital initiative within FBRâ€™s broader modernization efforts. She highlighted how the system not only simplifies the tax payment process but also reinforces FBRâ€™s role in setting new standards for digital tax administration. By integrating ePayment 2.0 into IRIS 2.0, FBR provides taxpayers with a streamlined, user-friendly experience that removes the need for multiple platform logins and creates a single, cohesive interface. This unified portal allows taxpayers to manage all essential functions from one place, making tax compliance easier and more accessible. With this launch, FBR reinforces its commitment to supporting taxpayers and fostering a digitally progressive Pakistan. Through ePayment 2.0, FBR continues to lead in digital innovation, making tax administration not only efficient but also accessible for the people of Pakistan.

Date: 2024-11-13

Details: ISLAMABAD: Federal Tax Ombudsman (FTO) has directed Chairman Federal Board of Revenue (FBR) to issue an appreciation letter to Fayyaz Rasool Maken, Collector Port Muhammad Bin Qasim, Karachi for taking keen and timely action not only to safeguard revenue but also making merit based decision to facilitate taxpayer. This is for the first time that the FTO has highly appreciated the performance of a senior customs official working in the field formations. In this regard, the FTO has issued instructions to the FBR through an order issued on Tuesday. According to the FTOâ€™s order, Secretary Revenue Division FBR must issue appreciation letter to Fayyaz Rasool Maken for making merit based decision making to address the bonafide issues of the taxpayers; and report compliance within 30 days. The FBR will also direct the Collector of Customs, Port Muhammad Bin Qasim, Karachi to undo the cancellation of the auctioned vehicle and allow the bidder to lift the vehicle after payment of 75% of the bid amount. FTO further stated that, the facts amply highlight how the Collector (Appraisement), Port Qasim has taken keen interest and timely action not only to safeguard revenues but also to make merit-based decision-making to address the bona fide issues of the taxpayers. Had the Collector not taken the decisive action and gone through minutely the relevant records, the instant issue would have been complicated, obstructing a smooth resolution of the matter,â€ FTO added. Details of the issue revealed that the petitioner contended that he was successful bidder of the subject lot consisting of a vehicle auctioned on Feb 20, 2024 by Port Qasim Appraisement and deposited earnest money on the same day. The bid was approved by AC-Auction, but the vehicle was not delivered to him despite many visits to Port Qasim and it was learnt that the earnest money had been deposited in treasury of the government. After almost five months, in July, 2024, he was informed that the auction had been cancelled by the then Collector for the reason that RP of vehicle had not been calculated correctly. The Department calculated new RP in which depreciation was not allowed as provided in Para 7 of CGO 12 of 2002. He further contended that he should not be punished for the mistake and delays of five months by the Collectorate and demanded that the vehicle should be handed over to him on the basis of already approved bid. The Collector further stated that, since the auction proceedings have already been cancelled, the lot shall be put in next auction and the bidder can participate in the bid. While replying to the Collectorâ€™s aforesaid contention, the bidder stated that he has offered bid of Rs14,200,000 which is higher than the Reserve Price of Rs13,897,240 and pressed for allowing him to deposit the remaining 75% of the bid amount enabling him to lift the vehicle, FTO order added. Copyright Business Recorder, 2024

Date: 2024-11-13

Details: Islamabad, November 12, 2024 â€“ The Federal Board of Revenue (FBR) has announced the immediate transfer and posting of a batch of Inland Revenue Service (IRS) officers at the BS-19 and BS-20 levels. These changes, as stated by the FBR, are aimed at optimizing efficiency across various departments and regional offices. The new postings are effective immediately and will remain in place until further orders. The FBR has outlined specific transfers within the IRS, and the details are as follows: 1. Ms. Yasmin Yusuf Khan (IRS/BS-20) has been reassigned from her role as Chief of TPA Audit/CRM Wing at the FBR Headquarters in Islamabad to Chief (Accounting) in the Organizational Audit Wing at the FBR Headquarters in Islamabad. 2. Ms. Shabana Aziz (IRS/BS-19) has been appointed as Commissioner Inland Revenue, (OPS) in Zone-III of the Corporate Tax Office, Lahore. She was previously awaiting a posting. 3. Shahid Sattar (IRS/BS-19) has been transferred to Commissioner Inland Revenue, (OPS) in Zone-II of the Large Taxpayers Office, Multan. He also assumes additional responsibilities as Commissioner-IR (OPS) in Zone-IV of the same office. Previously, he served as Commissioner (OPS) in Zone-III of the Corporate Tax Office, Lahore. 4. Abdur Razzaq Khan (IRS/BS-19) is now Commissioner Inland Revenue, (OPS) for IP/TFD/HRM at the Regional Tax Office, Rawalpindi. His prior post was Commissioner (OPS) in the Refunds section at the Regional Tax Office, Sahiwal. 5. Muhammad Waqas Hanif (IRS/BS-19) has been reassigned from Chief (OPS) (Accounting) in the Organizational Audit Wing at the FBR Headquarters to Chief (OPS) in the TPA Audit/CRM Wing at the FBR Headquarters in Islamabad. 6. Naeem Hassan (IRS/BS-19) will now serve as Additional Commissioner Inland Revenue at the Large Taxpayers Office, Islamabad, transferred from his previous position as Additional Commissioner at the Regional Tax Office in Rawalpindi. 7. Fayaz Hussain Abro (IRS/BS-19) has been relocated to the Corporate Tax Office in Karachi as Additional Commissioner Inland Revenue, moving from his prior post as Additional Commissioner at Regional Tax Office II in Karachi. 8. Husnain Ahmad Hali (IRS/BS-19) has been posted as Additional Commissioner Inland Revenue at the Regional Tax Office in Hyderabad, transferring from his former role as Additional Commissioner at the Regional Tax Office in Lahore. 9. Ms. Safia Afridi (IRS/BS-19) has been reassigned to Regional Tax Office II in Karachi as Additional Commissioner Inland Revenue. She was previously Additional Director in the Directorate of Internal Audit (IR) in Karachi. 10. Ms. Samreen Razaque (IRS/BS-19) will now serve as Additional Commissioner Inland Revenue at the Corporate Tax Office in Karachi, transferred from her previous role as Additional Commissioner at Regional Tax Office I in Karachi. According to the FBR, officers who have been receiving a performance allowance prior to these transfers will continue to draw this allowance at their new assignments. The FBR has directed the affected officers to submit immediate charge relinquishment and assumption reports to ensure that records are updated and further administrative procedures can proceed smoothly. This restructuring is part of the FBRâ€™s ongoing efforts to streamline tax administration and enhance organizational performance across its regional and functional offices.

Date: 2024-11-13

Details: LAHORE: A tax tribunal has upheld the tax authorityâ€™s right to correct erroneous assessment orders even if the taxpayerâ€™s return shows losses. The decision is expected to have far-reaching implications for tax disputes in the country. The case centred on the tax authorityâ€™s invocation of Section 66-A of the Income Tax Ordinance, 1979, to amend/correct an original assessment order. The taxpayer had argued that the order, although potentially erroneous, was not prejudicial to the interest of the revenue. However, the tribunal disagreed, holding that both conditions for invoking Section 66-A â€“ the order being erroneous and prejudicial to the interest of the revenue were fulfilled. The taxpayer approached the tribunal under Section 136(2) of the Ordinance, proposing a question of law regarding whether the subsidy granted by the federal government to reimburse losses suffered by it should be treated as a capital receipt or a revenue receipt. The taxpayer believed that the order passed under Section 66-A of the Ordinance was without lawful authority and jurisdiction as it was neither erroneous nor prejudicial to the interest of the revenue, as the subsidy granted by the federal government was a capital receipt, not taxable as trading revenue. He said no conditions were attached to the subsidy, and it does not fall under any heads of income under Section 15 of the Ordinance. According to the tribunal, even if a return shows losses, an assessment can still be prejudicial to revenue interests. Furthermore, any carry-forward loss pursuant to an erroneous assessment order will remain prejudicial to revenue interests. The tax authority welcomed the decision, stating that it would help prevent taxpayers from exploiting errors in assessment orders to avoid paying taxes. â€œThis ruling is a significant victory for the tax authority and ensures that taxpayers cannot take advantage of errors to evade taxes,â€ they added. Tax experts also hailed the decision, saying it would clarify the scope of Section 66-A and tax authorityâ€™s powers to correct erroneous assessment orders. â€œThis ruling provides much-needed clarity on the application of Section 66-A and will help reduce disputes between taxpayers and the tax authority,â€ said a tax consultant. Copyright Business Recorder, 2024

Date: 2024-11-13

Details: Karachi, November 13, 2024 â€“ The Federal Board of Revenue (FBR) has announced its plan to enforce strict measures on shopkeepers failing to comply with tax registration and payment requirements under the Income Tax Ordinance, 2001. According to the FBR, shops belonging to individuals who default on their tax obligations may be sealed for a specified period as a first-step enforcement strategy. As per FBR guidelines, if any trader or shopkeeper is required to apply for tax registration but fails to do so, or if they neglect to pay advance tax as stipulated under a special procedure in Section 99B of the Income Tax Ordinance, their business premises will face closure. FBR stated that in the case of a first default, the offending shop will be sealed for seven days. If subsequent defaults occur, the closure period will extend to 21 days, applying more pressure on shopkeepers to ensure compliance. Section 99B of the Income Tax Ordinance, 2001, provides a framework for FBR to introduce a special procedure tailored for small traders and shopkeepers. This section grants FBR the authority to specify, through an official notification, procedures governing tax payments, filing of returns, and assessment of traders and shopkeepers operating in designated regions. According to FBRâ€™s policy, this approach aims to streamline the tax compliance process for small businesses while maintaining accountability. The FBR emphasized that the move to seal shops is intended to foster tax compliance and expand the tax net in Pakistan. Through the enforcement of Section 99B, FBR seeks to simplify the tax payment process for shopkeepers, enabling a smoother registration process. However, non-compliance will lead to stringent measures to ensure that shopkeepers fulfill their legal tax obligations. In collaboration with local authorities, FBR plans to implement this policy across various cities to address longstanding compliance issues. Shopkeepers are encouraged to regularize their tax status to avoid any disruptions in their business activities. By enforcing this policy, FBR aims to create a fairer system for registered businesses and increase government revenues. FBRâ€™s actions are part of a broader initiative to combat tax evasion, a persistent issue impacting revenue generation in Pakistan. This new measure underscores FBRâ€™s commitment to strict enforcement and accountability, particularly within the small business sector. Through consistent enforcement and support for new registrations, FBR anticipates improved tax compliance rates among shopkeepers and traders across the country. The FBR has advised shopkeepers to consult local tax offices or FBRâ€™s official website for further information on the registration process to avoid potential penalties and ensure uninterrupted operations.

Date: 2024-11-12

Details: LAHORE: A draft bill to amend the Punjab Agricultural Income Tax 2024 was presented in the Punjab Assembly on Monday. Parliamentary Affairs Minister Mujtaba Shuja-ur-Rehman introduced the bill. Speaker Malik Muhammad Ahmad Khan referred the bill to the relevant standing committee for consideration. Pakistan Peopleâ€™s Party (PPP) MPA Neelum Jabbar has submitted a resolution to ban shopping bags, citing the harmful effects of polythene bags on the environment. These bags donâ€™t decompose in soil and damage crops by blocking the soilâ€™s pores, ultimately harming agricultural productivity The resolution urges the government to impose a complete ban on shopping bags to prevent environmental pollution and promote eco-friendly alternatives. The resolution highlights the urgent need to address the issue, as polythene bags contribute significantly to environmental degradation. By banning shopping bags, Pakistan can reduce plastic waste, promote sustainable practices, and protect its natural resources. Speaking on the point of order opposition member Rana Aftab Ahmed Khan has requested to install air purifiers in the Punjab Assembly to combat smog. Ahmed pointed out that the Environmental Department has made it mandatory for all high-rise buildings to install air purifiers. He said that Punjab Assembly area is one of the worst-affected regions by smog, Ahmed urged that air purifiers be installed in the assembly as well. The situation is dire, with over 35,000 people hospitalized due to smog-related issues, and medicines running low. This measure would help mitigate the harmful effects of smog on the health of assembly members and staff. By installing air purifiers, the assembly can contribute to improving air quality and protecting the well-being of those within its premises. Government member Amjad Ali Javed stated that discussions are underway to increase salaries in the country, which is facing economic challenges. However, he pointed out that judgesâ€™ salaries were recently increased overnight, while ordinary citizens face budget cuts and layoffs from institutions to save government funds. During the Punjab Assembly session, Parliamentary Secretary Hassan Askari responded to questions about the Department of Industry, Trade, and Investment. Answering Opposition member Nadia Kharâ€™s query, Askari said that a feasibility study will be conducted at the local level to establish a Technical Training and Vocational Training Center in Kot Addu district if needed. He also promised to provide transportation for the Technical Institute. The Punjab Assembly Speaker questioned the authority of Faisalabad Industrial Estate Development Management Company (FIEDMC) Chairman Mian Ans Jaan to allocate the most expensive plot for a factory, asking if he had the power to do so. Parliamentary Secretary Hassan Askari responded that plots cannot be allocated without following the proper procedure. The Speaker requested clarification from the department on the plot allocation process, emphasizing that Mian Ans Jan should not allocate expensive plots without justification. Opposition member Sardar Muhammad Awais Dreshak suggested that the government establish an Industrial Estate in Rajanpur and Kot Mithan, which falls along the CPEC route. This, he argued, could become a hub for business activity in the future. PPP MPA Mamtaz Chang said that Rahim Yar Khan has two of Asiaâ€™s largest fertilizer factories and seven sugar industries, established in 2011. However, the fertilizer factories are contaminating the drinking water, making it bitter, and also affecting the underground water. To address this issue, factories should be relocated away from rivers and water sources to prevent further pollution, whether they are fertilizer or sugar mills. Provincial Law Minister Sohaib Ahmed Bharat requested that all questions be postponed to allow for thorough answers to issues related to FIEDMIC. Mumtaz Chang, a member of the Peopleâ€™s Party, addressed the assembly, expressing concerns about corruption among police officials Kachha area. He presented evidence against corrupt SHOs and threatened to resign from his assembly membership if no action is taken. Chang emphasized that he is not there to sell petty interests but to represent the peopleâ€™s voice. He criticized the governmentâ€™s inaction against kidnappings and robberies in Sadikabad and Nawababad, warning that if the government fails to act, they should accept his resignation. Chang said action was taken against Secretary for his wrong doings. Chang shared personal experiences, stating that people from his constituency were kidnapped and two were injured. False reports are presented in the assembly, claiming 1,000 police personnel are deployed in Kachha area, yet none are present at checkpoints. Copyright Business Recorder, 2024

Date: 2024-11-12

Details: LAHORE: The Federal Tax Ombudsman (FTO) Dr Asif Mahmood Jah has directed the Federal Board of Revenue (FBR) to address discriminatory sales tax registration. He issued these directions while disposing of a complaint filed by a business community forum regarding sales tax registration. The complainant sought deletion of retailers with single shops from the list of Tier-1 retailers required to integrate with the FBRâ€™s Point of Sale (POS) System. According to SRO 608(1)/2014, retailers with shop areas measuring 1000 sq ft or more fall under Tier-1 and must integrate with the FBR POS System. The complainant argued that sales tax is applicable on turnover, not area, and failed to understand the correlation between shop area and sales tax registration. The FBR clarified that sales tax is imposed on taxable supply, not area, and Tier-1 retailers pay sales tax under the standard regime. However, stakeholders, including the Lahore Chamber of Commerce and Industry (LCCI) and Anjuman-e-Tajran, supported the complainantâ€™s view. The Federal Tax Ombudsman noted that while the FBRâ€™s objective is documentation of the economy, the current measure creates a discriminatory environment. POS-integrated retailers operate under a tight regulatory regime, while non-integrated retailers enjoy a â€œtax havenâ€ environment, fostering unhealthy competition and encouraging malpractices. The Ombudsman recommended that the FBR hold exhaustive pre-budget sessions with stakeholders, including the Federation of Chambers of Commerce and Industry, to address concerns and facilitate taxpayers. This should be done without creating discrimination among stakeholders. The complaint was disposed of accordingly, with the FBR directed to reconsider its sales tax registration criteria. The decision aims to promote a fair and equitable tax system, encouraging compliance and economic growth. Copyright Business Recorder, 2024

Date: 2024-11-12

Details: ISLAMABAD: The Federal Board of Revenue (FBR) has collected Rs 11.854 billion under the head of Workerâ€™s Welfare Fund/Workerâ€™s Profit Participatory Fund in 2023-24 as compared to Rs 10.105 billion, reflecting an increase of 17.3 percent. The FBRâ€™s data revealed that the Capital Value Tax collection amounted to Rs 56.108 billion in 2023-24 as compared to Rs 50.346 billion in 2022-23, showing an increase of 11.4 percent. According to the FBRâ€™s data, total collection under other heads of the direct taxes totalled at Rs 67.962 billion during 2023-24 against Rs 60.451 billion, reflecting an increase of 12.4 percent. In January 2023, FBR has already segregated the Workers Welfare Fund (WWF) from other taxes being collected by the board. Last year, the FBR had issued a clarification on the directions of the Federal Tax Ombudsman (FTO): (I) Record of all refunds of WWF and WWPF need to be separately maintained by IR field formations. While furnishing final MPR for the month of June of each FY, IR field formations must reflect the overall refund amount of WWF, if any, paid by them during the year. ii) This overall amount of refund of WWF communicated IR field formations must be separately summed up by Secretary Revenue Budget, IR, FBR. (iii) The aforesaid accumulative amount of refunds of a non tax levy/WWF paid from revenue collection need to be adjusted at the time of final yearly adjustment of Federal Accounts. (iv) In a decisions this office (FTO) has already held that any liability of WWF cannot be adjusted against determined tax refund because only inter-tax/intra tax adjustment is covered under the law. FBRâ€™s letter dated March 2, 2022 also holds the same view. (v) Refund order u/s 170(4) of Income Tax Ordinance, 2001 covers only issuance of Tax refunds. Apparently refund of any non-tax levy is not covered under the said section. If any such refund is to be issued than the order will have to be passed u/s 4(6) of WWF Ordinance 1971. It was clarified by the FBR that WWF is collected by the officers of Inland Revenue from the Industrial Establishments at two percent whose total income is not less than five lac rupees. The mode of payment and recovery from industrial undertaking is mentioned in Section 4 of the WWF before ordinance 1971. The said amount is paid by the Industrial Establishment on or before the date prescribed for filing of return and proof of payment is furnished to the concerned officer, if the officer does not agree with the working of the industrial establishment, shall pass an order by taking into account the amount paid by before the date specified in the order. Similarly, the excess amount shall be refunded by the concerned officer to the Industrial Establishment. The amount of tax and WWF should be bifurcated that is refundable should be refunded from the WWF account only, FTO added. Copyright Business Recorder, 2024

Date: 2024-11-12

Details: Islamabad, November 12, 2024 â€“ The Economic Coordination Committee (ECC) of the Cabinet has approved five critical proposals from the Federal Board of Revenue (FBR) as part of its Transformation Plan aimed at enhancing efficiency, revenue generation, and capacity building within the FBR. The meeting, chaired by Finance Minister Senator Muhammad Aurangzeb, was held today at the Finance Division, where detailed discussions led to the endorsement of the proposals with certain stipulations. The five approved proposals are part of the broader FBR Transformation Plan, which was initially approved by the Prime Minister. These proposals focus on specific areas critical to FBRâ€™s operations: 1. Enhancing FBRâ€™s Operational Expertise and Organizational Capacities â€“ aiming to upgrade FBRâ€™s overall functional and structural competencies. 2. Performance Management Regime for FBR Officers â€“ establishing a performance-based framework to evaluate FBR officers effectively. 3. Capacity Building Program for FBR Officers â€“ targeting skill development and ongoing training for FBR personnel. 4. Anti-Smuggling Measures under FBR Transformation Plan â€“ implementing stricter anti-smuggling controls to improve revenue collection. 5. Mobility and Transit Accommodation Arrangements for FBR Officers â€“ improving logistics and accommodations for FBR officers to support their duties. The ECC granted principled approval to all five proposals, contingent on a third-party impact evaluation of the processes and Key Performance Indicators (KPIs) set under these proposals. This evaluation will be conducted before the next fiscal budget, with a follow-up assessment at the end of 2025. The aim is to assess the initiativesâ€™ impact on FBRâ€™s broader goals of resource mobilization and enhanced revenue generation. Additionally, the ECC directed that the Revenue Division and Finance Division coordinate to establish the budgetary mechanics, including allocations and budget releases required to support these proposals. This collaboration will ensure that the financial resources align with the planâ€™s intended outcomes. In other decisions, the ECC approved a Technical Supplementary Grant (TSG) of Rs. 16.995 billion for the Ministry of Communications (Postal Services Wing) to clear outstanding liabilities for Pakistan Post Office Department partners. This allocation will settle verified claims, ensuring financial stability for companies working with Pakistan Post. The ECC also approved a TSG of Rs. 1.317 billion for the Election Commission of Pakistan to support Local Government bye-elections in Sindh, Khyber Pakhtunkhwa, Balochistan, and Islamabad, along with upcoming local government elections in Punjab for the fiscal year 2024-25. Key attendees of the ECC meeting included prominent federal ministers and senior officials from relevant ministries, such as Industries and Production Minister Rana Tanveer Hussain, Power Minister Sardar Awais Ahmad Khan Leghari, and Commerce Minister Jam Kamal Khan. The Governor of the State Bank of Pakistan, FBR Chairman, and other senior officials also participated, underscoring the collaborative government approach in financial and administrative planning for 2024-25. The ECCâ€™s decisions today signal a significant step toward advancing Pakistanâ€™s revenue infrastructure and supporting governmental and local election processes.

Date: 2024-11-12

Details: Karachi, November 12, 2024 â€“ As Pakistan faces a widening revenue gap, the government is preparing for the introduction of another mini budget to bridge the anticipated fiscal shortfall for the year 2024-25. With the International Monetary Fund (IMF) delegation currently reviewing the nationâ€™s progress under the Extended Fund Facility (EFF), sources indicate that the mini budget is expected to follow closely after the completion of the IMF teamâ€™s visit. According to officials from the Federal Board of Revenue (FBR), the upcoming mini budget will be crucial to meeting the revenue collection targets, which are under significant pressure. The FBR has projected a shortfall of Rs 230 billion in the second quarter (October-December) of the current fiscal year. The first four months of 2024-25 have already shown a concerning trend, with the FBR collecting Rs 3,440 billion, falling short of the target of Rs 3,636 billion by Rs 196 billion. To address this shortfall, the government has agreed to implement several contingency revenue measures, which will form the crux of the mini budget. These measures are designed to generate approximately Rs 10.8 billion per month in additional revenue. Among the key steps is an increase in federal excise duty (FED) on aerated and sugary drinks, as well as a rise in withholding tax rates on the import of machinery, raw materials, and services. Collectively, these adjustments are expected to raise Rs 97.2 billion in the remaining three quarters (October-June) of the fiscal year. The IMF, in its latest report, highlighted that should the three-month rolling average revenue collection fall short by just one percent, the government would need to adopt one or more of the following contingency measures: an increase in advance income tax on machinery imports by one percentage point, which is expected to generate Rs 2 billion per month; an increase in advance income tax on raw materials for industrial undertakings by one percentage point, projected to yield Rs 3.5 billion per month; and a rise in advance income tax on raw materials for commercial importers, anticipated to collect Rs 1 billion per month. Additionally, increases in withholding tax rates on supplies, services, and contracts, along with a five percentage point hike in FED on sugary drinks, are all part of the revenue-generating strategy. If adopted, these measures will collectively help mitigate the looming fiscal gap, with a total expected revenue generation of Rs 97.2 billion through the mini budget. The looming mini budget underscores Pakistanâ€™s struggle to meet its fiscal targets while balancing the demands of the IMF. As the government moves forward with these measures, the effectiveness of the mini budget will be closely monitored by both domestic and international stakeholders.

Date: 2024-11-12

Details: On Monday, the Federal Board of Revenue (FBR) presented the International Monetary Fund (IMF) with an overview of Pakistanâ€™s current fiscal standing, detailing revenue collection progress for the fiscal year 2024-25 and addressing strategies to bridge a projected shortfall of Rs 230 billion for the second quarter (October-December). The FBRâ€™s discussions with the IMF encompassed revenue potential, enforcement tactics, retailer registration, and broader tax base reforms, with the aim of bolstering fiscal resilience. The IMF delegation, led by Nathan Porter, commenced meetings with the FBRâ€™s leadership, including its chairman, the Member of Inland Revenue (Policy), and other senior tax officials. The FBR chairman outlined both short-term and long-term strategies to mitigate the anticipated deficit, which remains a pressing concern. The IMF team, currently in Pakistan to review the countryâ€™s progress on the Extended Fund Facility (EFF) program, is scheduled to meet with the finance minister on Tuesday. However, this mission is not yet part of the EFFâ€™s first official review, which is expected to occur no earlier than the first quarter of 2025. Last week, the finance minister highlighted that this visit serves primarily as a status assessment of the $7 billion EFF program. The government has already surpassed initial IMF targets by integrating traders and shopkeepers into the tax framework, generating Rs10 billion in tax revenue in the first quarter. This sum includes additional tax revenue collected from suppliers providing goods to unregistered shopkeepers. Moving forward, the FBR plans to implement a data-driven approach for large retailers, suspending the current fixed tax per shop policy and instead leveraging data on returns, data security, and electricity consumption to identify eligible businesses. Under this revised policy, the FBR aims to minimize physical inspections, focusing instead on substantial data evidence to detect tax evasion among large retail operations. Consequently, the tax system will no longer rely on collecting a fixed tax from each shop, irrespective of its size. These reforms signify a departure from blanket taxation measures toward a more nuanced approach based on verified financial information. In terms of current collection figures, the FBR reported a collection of Rs877 billion in October 2024 against a target of Rs980 billion, leaving a deficit of Rs103 billion. For the first four months of the fiscal year, the cumulative revenue stands at Rs3,440 billion, shy of the Rs3,636 billion target set for July-October. The FBR attributes this shortfall to changing economic indicators such as GDP growth, import trends, inflation rates, and fluctuations in large-scale manufacturing output, which all informed the initial revenue targets. As part of the contingency plan, the FBR has outlined a series of policy measures, including tax rate hikes anticipated to generate Rs1,190 billion, enforcement initiatives amounting to Rs320 billion, and retailer schemes projected to yield Rs50 billion. Furthermore, expected revenues from the Sindh region and import-led growth in large-scale manufacturing were forecasted to deliver Rs2,047 billion. Despite these projections, evolving economic dynamics have led to a sales tax shortfall of Rs147 billion on imports from July to September. Nonetheless, income tax collection exceeded expectations, totaling Rs1,230 billion against a target of Rs1,098 billion for the first quarter. In a bid to recover revenue, the FBR has crafted a strategy to target non-compliant high-net-worth individuals. Through third-party data analytics, the agency has identified 190,000 individuals liable for Rs7 billion in taxes. Notices are now being dispatched, with 50,000 non-filers under active pursuit and 25,000 cases anticipated to reach assessment orders. Under the contingency revenue measures agreed upon with the IMF, the government plans to increase the federal excise duty on sugary beverages and raise withholding tax rates on machinery, raw material imports, and services. Collectively, these adjustments aim to contribute an additional Rs10.8 billion monthly throughout the remainder of 2024-25, with a projected cumulative impact of Rs97.2 billion for the October-June period. In its recent report, the IMF underscored that any shortfall exceeding one percent of the projected revenue could prompt further fiscal tightening. Options include incremental hikes in advance income tax on machinery and raw material imports, as well as higher withholding tax rates on supplies, services, and contracts. The excise duty on aerated drinks may also see an increase of five percentage points, expected to bring in an extra Rs2.3 billion monthly. Through these discussions and forthcoming reforms, Pakistan aims to strengthen its fiscal framework and navigate the challenging economic landscape while upholding its commitments under the EFF program. The governmentâ€™s ongoing efforts highlight a commitment to implementing efficient tax policies that respond dynamically to macroeconomic shifts, setting a foundation for future financial stability.

Date: 2024-11-11

Details: Islamabad, November 11, 2024 â€“ The Inland Revenue Service Officers Association (IRSOA) has issued a stern condemnation regarding the unlawful detention of a team from the Regional Tax Office (RTO) Karachi, led by Assistant Commissioner (IR) Rai Hamza Ahmed. The incident, which occurred at a private wedding hall, saw the officers and their staff detained for over four hours while they were performing their official duties. The IRSOA has called this egregious act a direct affront to the rule of law, underscoring the growing concerns over the safety and efficiency of tax enforcement personnel in Pakistan. The officers, who were engaged in their legally sanctioned work, were obstructed by the management and staff of the wedding hall, which is believed to have been involved in non-compliant activities. This interference not only hindered vital administrative operations but also posed significant risks to the safety of IRS personnel. â€œThis shocking incident highlights the precarious situation in which our officers operate daily,â€ said a spokesperson for IRSOA. â€œIt is an undeniable reminder of the increasing dangers faced by IRS personnel while executing their responsibilities.â€ The association has consistently called for enhanced protection and resources for tax enforcement units, which it insists are crucial for the effective execution of duties. In light of the incident, the IRSOA reiterated its demand for a robust restructuring of the Inland Revenue Enforcement Network (IREN), which was established via SRO 250(I)/2019. While IREN has made substantial strides, particularly considering its limited resources, the association stresses that it must be empowered as a fully equipped and independent force capable of safeguarding the rights and safety of its officers. The IRSOA further proposed the establishment of dedicated enforcement Squads/Units at each RTO level to bolster the agencyâ€™s operational effectiveness and to address the alarming enforcement gap, currently estimated at a staggering four trillion rupees. â€œThe lack of swift and adequate action in this matter is deeply troubling,â€ the IRSOA stated. â€œWe call upon relevant authorities to not only hold those responsible for this unlawful detention accountable but also to take concrete measures to ensure that such incidents do not occur again.â€ The association has also expressed its resolute support for the affected officers, assuring that it is in active discussions with senior officials at the Federal Board of Revenue (FBR) to ensure a prompt and just resolution. As of now, the IRSOA remains steadfast in its commitment to protecting its members and safeguarding the integrity of the nationâ€™s tax system.

Date: 2024-11-11

Details: Karachi, November 11, 2024 â€“ The Federal Board of Revenue (FBR) has officially updated the Active Taxpayers List (ATL) for the tax year 2024, revealing that 5.47 million individuals now hold active taxpayer status. This marks a significant increase from the initial ATL published on November 1, 2024, which listed 5.37 million taxpayers. The latest update, issued on November 10, 2024, added approximately 130,000 new taxpayers who filed their income tax returns during the first ten days of the month. This year, the FBR has implemented a new strategy for ATL updates. Instead of issuing the list annually in March, as has been the case in previous years, the FBR now publishes the ATL immediately after the income tax return filing deadline, which was on October 31, 2024. Furthermore, the FBR is now updating the ATL on a daily basis, ensuring that it reflects the most current data. The shift in policy stems from recent amendments made through SRO 1638(I)/2024, which aimed at improving operational efficiency and compliance. â€œThe real-time update mechanism reflects the FBRâ€™s commitment to transparency,â€ said an FBR spokesperson. â€œIt ensures that the ATL accurately and promptly represents the taxpayer base, providing immediate recognition to taxpayers who fulfill their obligations.â€ Under the updated system, individuals who file their Income Tax Returns (ITR) on time, or within any granted extension, will have their status updated to â€œactiveâ€ on the ATL without delay. Late filers may still be included, but will be subject to a surcharge, as per section 182A of the Income Tax Ordinance. This new approach is part of the FBRâ€™s broader effort to enhance compliance and streamline the tax system. As part of this drive, the FBR has introduced stringent penalties for non-filers. Measures include suspending mobile phone SIM cards, disconnecting utility services, and restricting international travel for those who remain non-compliant. These penalties are designed to encourage greater tax compliance across the country. However, there are exemptions for certain groups, including Overseas Pakistanis with National Identity Cards (NICOP), minors, students, and individuals traveling for religious purposes, such as Hajj or Umrah. By adopting this more dynamic approach to the ATL, the FBR aims to build a stronger, more inclusive tax system, enhance taxpayer engagement, and foster fiscal stability in Pakistan.

Date: 2024-11-10

Details: Islamabad, November 10, 2024 â€“ The Federal Board of Revenue (FBR) has issued a special notification transferring three senior officers of the Pakistan Customs Service (PCS), in grade BS-19, to FBR Headquarters in Islamabad. The transfers were announced on Sunday, a non-working day, highlighting the urgency behind these new postings. In the official notice, the FBR stated that the transferred officers would assume their new roles immediately and remain in position until further orders. The three PCS officers involved are: 1. Haroon Waqar Malik: Previously serving as the Additional Collector at the Collectorate of Customs Enforcement (Ports) in Karachi, Malik has been appointed as Secretary at the FBR Headquarters in Islamabad. 2. Honnak Baloch: Formerly the Additional Director at the Directorate of Input Output Coefficient Organization (South) in Karachi, Baloch has been transferred to the position of Secretary at FBR Headquarters. 3. Ataullah Shabbir: Shabbir, who was serving as Additional Director at the Directorate of Post Clearance Audit (South) in Karachi, has also been appointed as Secretary at FBR Headquarters. Sources within the FBR report that these transfers are part of a broader, strategic restructuring initiative within Pakistan Customs. The new assignments are aimed at enhancing operational efficiency and ensuring that the expertise of senior PCS officers is utilized in key decision-making roles at the FBRâ€™s main office. This transfer order supersedes a previous notification from November 8, 2024, which had assigned these officers to other positions. The FBRâ€™s latest directive cancels any prior orders for these officers, reinforcing the immediate nature of the transfers. As stipulated in the notification, officers drawing performance allowances prior to this transfer will continue to receive these allowances in their new roles, with the exception of postings within the FBR Headquarters in Islamabad. The officers were instructed to relinquish their current posts and submit charge assumption and relinquishment reports promptly to the FBR for official records and additional administrative procedures. This directive emphasizes that the transferred officers are expected to assume their new responsibilities without delay. The transfer of these key PCS officers to FBR Headquarters reflects a focused effort by the FBR to streamline operations and place experienced personnel in positions critical to its mandate, marking a notable shift in Pakistan Customsâ€™ operational framework.

Date: 2024-11-10

Details: Karachi, November 10, 2024 â€“ The Federal Board of Revenue (FBR) has announced penalties for individuals and businesses who fail to submit their income tax returns and asset declarations by the due date. These penalties are aimed at encouraging timely compliance with tax laws and apply under Section 182 of the Income Tax Ordinance, 2001. The FBR stated that anyone who does not file their tax return as required by Section 114 within the deadline will face penalties based on how late the return is submitted. Penalty Details The penalties are structured to increase with each day the tax return is late. Taxpayers who miss the deadline will have to pay either: 1. 0.1% of the tax payable for that year for each day of delay, or 2. A fixed penalty of Rs. 1,000 per day for every day the return is late, whichever amount is higher. There are also minimum and maximum limits on these penalties: â€¢ For individuals with 75% or more of their income from a salary, the minimum penalty is set at Rs. 10,000. â€¢ For all other cases, the minimum penalty is Rs. 50,000. However, the FBR has set a cap on these penalties, ensuring that the total penalty does not exceed 200% of the total tax payable for the given tax year. Reductions for Late Filing To provide some relief, the FBR offers a reduction in penalties if the tax return is submitted within three months after the original or extended due date: â€¢ Filing within one month after the due date results in a 75% reduction in the penalty. â€¢ Filing within two months after the due date results in a 50% reduction. â€¢ Filing within three months after the due date results in a 25% reduction. Explanation of â€œTax Payableâ€ According to the FBR, the term â€œtax payableâ€ means the tax calculated on the taxpayerâ€™s income for the year, based on the assessments under Sections 120, 121, 122, or 122D of the Income Tax Ordinance. The FBR has introduced these penalties as a measure to improve timely tax filing and ensure compliance. Taxpayers are advised to be mindful of the filing deadlines to avoid these penalties. This step is part of the governmentâ€™s efforts to strengthen tax enforcement, increase transparency, and improve revenue collection.

Date: 2024-11-10

Details: The Islamabad High Court (IHC) has issued a stay order against the Federal Board of Revenue (FBR) on its tax computation approach for banks, halting any further proceedings until the case is heard at a later date. The FBRâ€™s method of taxing bank income based on a gross advances-to-deposit ratio has sparked legal opposition, with banks challenging the agencyâ€™s authority in the matter. At the core of the issue is Rule 6C(6A) of the 7th Schedule to the Income Tax Ordinance, 2001, which the FBR is using to impose tax on income from federal government securities. The petitioner, a prominent banking institution, asserts that the FBR lacks the jurisdiction to regulate banking business, a power that the State Bank of Pakistan (SBP) solely holds under the State Bank of Pakistan Act, 1956. The IHC has directed that no coercive actions be undertaken by the tax authority against the petitioner based on computations made under the impugned rule until the next court hearing. The IHC has also issued notices to the FBR and the Attorney General, requiring them to submit comprehensive reports and point-by-point responses within a two-week timeframe. This interim order underscores the judiciaryâ€™s recognition of the gravity of the regulatory and jurisdictional dispute, as well as the potential repercussions for the financial sector. Counsel for the petitioner contended that the FBRâ€™s tax formula, which relies on the gross advances-to-deposit ratio, unfairly extends beyond the purview of a Money Bill, thereby violating Article 73 of the Constitution. The counsel argued that the FBRâ€™s approach constitutes an overreach into banking regulation, an area entrusted exclusively to the SBP. According to the petitioner, the retroactive imposition of taxes on investments in federal securities is legally untenable, as these investments have not yet matured and cannot be taxed retrospectively. Additionally, the petitioner emphasized that the impugned rule conflicts with Section 46B(3) of the State Bank of Pakistan Act, which endows the SBP with exclusive authority over regulatory directives to banks and explicitly restricts other public authorities from issuing directions that could counter the SBPâ€™s declared policies. The petitioner asserts that it operates under SBPâ€™s prudential regulations, rejecting any authority other than the central bankâ€™s right to direct its business conduct. By challenging Rule 6C(6A), the petitioner aims to uphold the SBPâ€™s regulatory supremacy and preserve the established legislative boundaries that distinguish the roles of the SBP and the FBR. The IHCâ€™s intervention highlights the importance of regulatory clarity in Pakistanâ€™s financial sector, where dual oversight can lead to complexities. The upcoming hearings are expected to provide judicial guidance on the interplay between tax regulations and central bank authority, a critical issue for financial institutions operating in the country.

Date: 2024-11-09

Details: Karachi, November 9, 2024 â€“ The Karachi Chamber of Commerce and Industry (KCCI) expressed its strong opposition on Saturday to the recent reinstatement of the affidavit requirement for filing sales tax returns. KCCI President Muhammad Jawed Bilwani sharply criticized the move, demanding the immediate suspension of the affidavit mandate until substantial consultations with stakeholders have been conducted and effective alternatives identified. Bilwani emphasized that the Federal Board of Revenue (FBR) had previously acknowledged the problematic nature of this requirement by temporarily suspending it for September 2024. At the time, the FBR issued a press release confirming that the affidavit would not be required for that tax period and pledged to engage with stakeholders to gather proposals for addressing the persistent issue of fraudulent sales tax claims. The FBR had committed to exploring these stakeholder suggestions until October 31, with the aim of finding a balanced approach. However, Bilwani lamented that, despite this assurance, no consultations have occurred, nor have any viable alternative solutions been examined. â€œThis unilateral decision disregards the overwhelming pressures already faced by the business community,â€ Bilwani asserted, highlighting the growing operational challenges for businesses. He criticized the requirement as an added burden that introduces unnecessary bureaucracy and creates an atmosphere of intimidation for businesses trying to comply with the law. The affidavit obligation, according to Bilwani, places unreasonable demands on taxpayers and their chief financial officers (CFOs). He pointed out that CFOs and taxpayers are now being asked to affirm the legitimacy of tax credits connected to invoices from suppliers, even though their ability to verify such information is limited to FBRâ€™s online resources. â€œTaxpayers simply cannot be held accountable for the authenticity of upstream invoices in the supply chain, which they have no direct means of verifying,â€ he noted, adding that the FBR already possesses extensive powers for auditing and investigation. Expecting individual taxpayers to bear responsibility for verifying these credits, he argued, is an abdication of FBRâ€™s own responsibilities. Bilwani further expressed concern over the severe legal repercussions associated with non-compliance. The affidavit requirement compels CFOs to vouch for the accuracy of submitted returns under the threat of imprisonment, with penalties reaching up to ten years under Section 33(13) of the Sales Tax Act of 1990. â€œThis is a misplaced expectation, particularly when legal proceedings on similar matters are ongoing,â€ he added, urging the FBR to rethink its stance. The KCCI concluded its statement by reiterating its call for the FBR to remove the affidavit requirement and, instead, focus on solutions that do not unfairly burden taxpayers for issues that lie beyond their control.

Date: 2024-11-09

Details: Karachi, November 9, 2024 â€“ The Federal Board of Revenue (FBR) has released draft amendments under SRO 1789 (I)/2024 to streamline the inter-port movement of international transshipment cargo within Pakistan. These amendments introduce detailed procedures for transferring goods between terminals at Karachi Port and Port Muhammad Bin Qasim, aiming to improve transparency, security, and efficiency in cargo handling. According to the proposed rules under Rule 510G of the Customs Rules, 2001, inter-port movement of transshipment cargo is restricted to specific authorized bonded carriers. The FBR has stipulated that only licensed carriers, operating under Chapter XIV of the Customs Rules, are eligible to handle these transfers. This restriction is intended to enhance accountability and ensure that only vetted entities are involved in this critical aspect of international trade. The new guidelines specify that requests for inter-port movement must be submitted by the shipping line or terminal operator responsible for the cargo. Upon receipt of these requests, the concerned Collector of Customs reviews and verifies the details through the Customs Computerized System (CCS). This process ensures that both the sending and receiving terminals have full visibility of the cargoâ€™s movement, minimizing the risk of mismanagement. According to the FBR, this approach will not only strengthen cargo tracking but also streamline the release process. For additional security, the FBR has mandated that customs staff affix a PCCSS (Pakistan Customs Container Security System) seal on each container before it is transported. The customs sealing team checks details such as container number, vehicle registration, and bonded carrier identity against the data in the CCS. Once verified, a â€œTransport Noteâ€ is generated, which serves as a record of the cargo transfer. This document is signed by both customs personnel and the carrierâ€™s representative, further solidifying accountability. The FBR has also implemented strict timelines for the movement of cargo between ports to prevent delays. For movements within the same port, the FBR mandates a two-hour delivery window. For transfers between Karachi Port and Port Muhammad Bin Qasim, the time limit is four hours. Should a carrier fail to meet these deadlines, the CCS system will automatically flag the issue, and the FBR may pursue legal action if no valid justification for the delay is provided. Upon arrival at the receiving terminal, customs officials verify the PCCSS seal, along with the transport note and weighment slip. The FBR has established that any discrepancies in weight or broken seals must be thoroughly examined, with customs staff and representatives of both the bonded carrier and port terminal present during the inspection. If discrepancies are found, the FBR will conduct a full inventory check and may impose fines or other penalties on the responsible parties. The FBR also requires that any cargo loss, damage, or pilferage be covered by the bonded carriersâ€™ guarantees, which are held against potential liabilities. According to the FBR, these guarantees will be utilized to cover any duties, taxes, or damages incurred during transit. Furthermore, under the new amendments, the FBR has clarified the role of cross-stuffing, particularly at Gwadar Port. Cross-stuffingâ€”the process of transferring cargo between containersâ€”is permitted under customs supervision, provided that it occurs within designated bonded premises. This is expected to offer more flexibility for international cargo owners, who may opt for cross-stuffing to optimize container use. Overall, these updates by the FBR underscore the agencyâ€™s commitment to tightening regulatory control over international transshipment cargo. By enforcing these structured guidelines and timelines, the FBR aims to enhance the security, efficiency, and accountability of cargo transfers across Pakistanâ€™s major ports. These regulations represent an important step toward a more robust customs framework, which is crucial for Pakistanâ€™s role in regional and global trade networks.

Date: 2024-11-09

Details: Karachi, November 9, 2024 â€“ Pakistanâ€™s Income Tax Ordinance, 2001, have set a definitive limit on how long the Commissioner Inland Revenue (CIR) may demand audit records from taxpayers. As per the latest update for the tax year 2024-25, Section 177 stipulates that the CIR may only request records for audit within six years from the end of the relevant tax year. In an effort to streamline and bring clarity to the audit process, Section 177 was revised to address the conduct of audits, outlining specific limitations and procedural requirements that the CIR must follow. The updated legislation explicitly states that the CIR is not allowed to demand audit records after a six-year period, effectively putting a timeframe on the audit authorityâ€™s power to investigate past returns. Under the provisions, the CIR has the authority to request any relevant records or documents from taxpayers within the six-year window. The law specifies that this may include books of accounts maintained electronically, in which case the taxpayer must provide the CIR or authorized officers with full access to the electronic system on which such data is stored. The CIR may also require hard copies of pertinent information for examination. This streamlined access requirement aims to facilitate efficient auditing within the stipulated timeframe. According to the ordinance, CIR powers to access records and initiate audits are subject to two primary conditions: firstly, the CIR must document the reasons for requesting taxpayer records in writing, and secondly, these reasons must be communicated to the taxpayer. These clauses were incorporated to enhance transparency and ensure taxpayers understand the basis for an audit. CIR is therefore obligated to act within a framework of documented justification when calling records. Additionally, should a taxpayer fail to provide the necessary documents or offer an incomplete record, the CIR is empowered to assess taxable income using â€œsectoral benchmark ratios,â€ which are standard ratios based on comparable cases within the industry. This provision was designed to ensure that the CIR can determine an approximate income even in cases where full records are not accessible. The CIR may calculate income by using these benchmarks when records are insufficient or explanations lack detail. In the course of conducting audits, the CIR is also authorized to use electronic means, including video links, as outlined in subsection 2A of Section 177. This flexibility supports the modernization of audit processes, making remote audits feasible. This amendment enables the CIR to complete audits efficiently by leveraging digital tools. Once an audit is complete, the CIR must compile a comprehensive audit report, incorporating any explanations provided by the taxpayer in response to issues identified during the audit. The report should present observations, findings, and any necessary adjustments to the assessment. However, before making any amendments to the assessment, the CIR must offer the taxpayer an opportunity to respond, thus ensuring fair treatment. Moreover, the amendments clarify that a prior audit in a given tax year does not exempt a taxpayer from further audits in subsequent years if justified by reasonable grounds. This implies that CIR can continue to monitor taxpayers in the future as long as there is a legitimate reason. The Federal Board of Revenue (FBR) also retains the right to assign external audit firms to assist in audits, including those specializing in cost management or forensic audits, which may delve deeper into financial records to detect irregularities. Such appointments can be made by the CIR on a case-by-case basis, allowing the CIR access to expert insights when needed. Another key update to Section 177 is the formation of special audit panels, which may consist of Inland Revenue officers, chartered accountants, cost management experts, and international specialists appointed under agreements with the FBR. These special panels allow the CIR to conduct forensic audits or complex audits involving foreign expertise. The presence of a special panel with diverse expertise provides the CIR with additional resources to conduct more detailed audits. To address any procedural gaps, the law specifies that if any member of the special audit panel is absent, the audit process can still proceed under the chairmanâ€™s oversight. This continuity clause ensures that an auditâ€™s validity remains unaffected by the absence of a single panel member. The law underscores that the CIR has independent authority under Section 177, free from constraints under Section 214C, further reinforcing that the CIRâ€™s ability to conduct audits is comprehensive within the six-year limit. By establishing these boundaries, the ordinance seeks to balance the CIRâ€™s power to ensure compliance with taxpayer protections against indefinite audit demands. In conclusion, the amendment to the Income Tax Ordinance represents a significant move toward a more defined and accountable audit framework, limiting CIR authority to six years. By clarifying the procedures and introducing measures to safeguard taxpayer rights, the FBR and CIR aim to foster a transparent tax system with balanced powers and responsibilities.

Date: 2024-11-09

Details: Finance Minister Mohammad Aurangzeb has emphasized that itâ€™s time to include the real estate, retail, and agriculture sectors in Pakistanâ€™s tax system. He stated that the government could no longer rely solely on taxes from salaried workers and manufacturers, whose tax rates already reach up to 50%. Aurangzeb argued that further tax increases on these groups are not feasible, and the only solution is to expand the tax base. He made it clear that taxes must be collected from these sectors to ensure a fair and sustainable tax system for all. Aurangzeb also pointed out that he disagreed with the argument that real estate boosts 40 other industries. He said the government must focus on these sectors, which have long been outside the tax system. He added that as a salaried person, he had paid taxes, and that information would be made public under asset and income declarations for parliamentarians. The Finance Minister also spoke about Pakistanâ€™s relationship with the International Monetary Fund (IMF), saying there was a trust and credibility gap due to unfulfilled commitments. The IMF is scheduled to visit Islamabad to assess the situation. According to Aurangzeb, the government had met its revenue targets from retailers and wholesalers for the first quarter of the fiscal year, and the IMF had approved the winter electricity package. He acknowledged, however, that structural reforms agreed with the IMF had not always been fully implemented. Speaking about the state-owned Pakistan International Airlines (PIA), Aurangzeb said the government could not manage it effectively and would again pursue privatization as a solution. Aurangzeb also provided an update on the governmentâ€™s plans for agriculture taxation. He confirmed that all four provincial cabinets had agreed to implement an agriculture income tax, which will take effect from January 1, 2025, with collections beginning in the next fiscal year. The Minister highlighted that the era of relying on foreign financial aid from countries like China, Saudi Arabia, the UAE, and Qatar is over. Now, Pakistan needs to focus on attracting foreign direct investment (FDI) through viable projects. Aurangzeb stressed that the country could not rely on increasing imports for growth, as this would lead to a balance of payments crisis. Instead, Pakistan must focus on export-led growth to achieve long-term economic stability.

Date: 2024-11-09

Details: Karachi, November 9, 2024 â€“ The Federal Board of Revenue (FBR) is now getting real-time data from 28 different departments to help find new taxpayers. This data-sharing partnership includes agreements with these organizations, allowing important information to be transferred directly to the FBR. As part of its efforts to widen the tax base, the FBR has already registered over 1.35 million potential taxpayers. This step is aimed at increasing national tax collection by bringing in people and businesses that have not been paying taxes. The FBR has shared third-party data from 46 sources with its offices across the country to help identify new taxpayers. As a result, more than 1.35 million people who were not previously registered have now been added to the tax system. This move is part of the governmentâ€™s larger efforts to address Pakistanâ€™s tax shortfall and improve compliance. For the fiscal year 2024, the Special Investment Facilitation Council (SIFC) set a goal of registering 1 million new taxpayers. The FBR is working hard to meet this target through a variety of strategies, including the use of technology, data analysis, and stronger partnerships with other government agencies. Key Measures for Taxpayer Registration The FBR is using several innovative strategies to reach its goal: 1. Technology and Data Analysis: The FBR is using advanced technology and data analysis tools to track and manage the registration process. This helps them monitor progress and fix any issues quickly. 2. Collaboration with NADRA: The FBR is working with the National Database and Registration Authority (NADRA) to access financial transaction data in real-time, which helps identify taxpayers more efficiently. 3. Encouraging Compliance: The FBR has launched a campaign using SMS and WhatsApp messages to remind people to register and pay taxes. This initiative, called REMIT, encourages people who havenâ€™t filed taxes to do so. 4. Public Awareness Campaigns: The FBR is running a media campaign to educate the public on the importance of tax registration. The campaign promotes the Malomaat portal, which allows citizens to file their tax returns. 5. Data Sharing: By partnering with 28 different departments, the FBR is able to get real-time data to help identify new taxpayers. 6. Improved Tax Tools: The FBR has updated the Malomaat portal and introduced new tools, like Tax Ray, to help officials identify and register taxpayers. With these efforts, the FBR is modernizing Pakistanâ€™s tax system and working to increase the countryâ€™s tax revenue. These initiatives are expected to play a key role in achieving the governmentâ€™s financial goals.

Date: 2024-11-09

Details: In a major move aimed at strengthening the functioning of Pakistan Customs Service (PCS), the Federal Board of Revenue (FBR) on Friday announced the transfers and postings of 59 officers across various key positions from BS-17 to BS-20. The sweeping reshuffle, which affects both senior and mid-career officers, is part of a broader restructuring strategy under the leadership of the newly appointed FBR chairman. Sources within the FBR indicated that these transfers were long overdue, as the new chairman sought to realign the department to meet evolving challenges. The reshuffle is not only a routine administrative decision but a step toward reinforcing the monitoring of foreign trade and ensuring a more robust collection of duties and taxes. One of the primary objectives of this large-scale transfer is to improve the efficiency and transparency of customs operations, particularly in the areas of import/export monitoring and anti-smuggling enforcement. By strategically placing officers in key posts, the FBR aims to better track goods entering the country and curb the growing issue of underreporting and misdeclaration, which has often resulted in revenue loss. Additionally, the FBRâ€™s reshuffle appears to be aligned with a broader strategy to rid the Customs department of corruption. Sources pointed out that the new appointments are intended to create a more trade-friendly environment, one that fosters integrity and accountability. With Pakistanâ€™s economy in a critical phase, these changes reflect the urgency to streamline customs processes and improve the overall business climate. The transfer of 59 officers from BS-17 to BS-20 is seen as a comprehensive effort to address systemic inefficiencies and to inject fresh perspectives into the department. The FBRâ€™s decision also underscores the growing importance of enhancing operational transparency within Pakistanâ€™s customs infrastructure. The reshuffling exercise is expected to bring about a more focused approach to customs enforcement, especially in implementing anti-smuggling measures that are vital to the countryâ€™s economic stability. As the FBR strives to bolster revenue collection and curb illicit trade, the move is seen as an essential step in modernizing customs practices and improving service delivery. With these strategic postings, the FBR is positioning itself to play a more critical role in Pakistanâ€™s economic revival, ensuring that the Customs department is equipped to handle the demands of an increasingly complex global trade environment.

Date: 2024-11-09

Details: In a sweeping overhaul, the Federal Board of Revenue (FBR) on Friday announced the transfer and reassignment of 140 Inland Revenue Service (IRS) officers across several critical roles. The large-scale reshuffle includes officers in grades BS-17 through BS-20 and is viewed as a strategic move aimed at bolstering revenue generation and addressing the departmentâ€™s ongoing fiscal challenges. According to sources within the FBR, these transferred officers occupy pivotal roles that are essential to revenue collection, particularly in audit, assessment, and decision-making capacities. The changes come as part of a broader restructuring strategy under the leadership of the newly appointed FBR chairman, whose tenure has seen a renewed focus on meeting revenue targets. The reshuffle also reflects the FBRâ€™s urgency to address a substantial revenue shortfall encountered in the first four months of the fiscal year. By reallocating key personnel to high-stakes positions, the FBR aims to optimize tax collection mechanisms and ensure more effective compliance enforcement. The reassignments were detailed in three separate notifications, each designating the transfer of officers at different grade levels. Among those transferred, 17 officers in BS-20 were reassigned, a group which includes senior personnel with responsibilities for revenue generation, audit assessments, and critical decision-making. The BS-20 positions are considered instrumental in shaping the FBRâ€™s fiscal strategy, as these officers oversee revenue audits and high-value assessments that directly impact revenue flow. The largest group affected in the reshuffle consists of 67 BS-19 officers, many of whom are now placed on critical roles as commissioners under OPS (Own Pay Scale). This grade level is integral to supporting senior commissioners in revenue-related operations, and the new assignments are expected to empower BS-19 officers to contribute more effectively to the FBRâ€™s objectives. Additionally, 54 officers in BS-18 were transferred, along with two officers in BS-17. Though fewer in number, these roles are crucial for implementing revenue collection policies at an operational level and ensuring the smooth functioning of tax compliance processes across regions. Sources indicate that the reshuffle serves as part of the FBRâ€™s broader strategy to revamp its workforce amid mounting fiscal pressures. By strategically redistributing experienced personnel into revenue-critical positions, the FBR aims to tackle the pressing shortfall and drive enhanced revenue performance for the remainder of the fiscal year. As the restructured IRS workforce settles into these roles, the FBR is optimistic that the changes will contribute to stabilizing revenue and meeting the ambitious targets set forth under the current administration.

Date: 2024-11-09

Details: ISLAMABAD: Directorate General of Intelligence and Investigation-Inland Revenue (IR) has prevented revenue loss of over Rs 16 billion by busting gangs/fraudsters using foreign IPs/VPN/Proxy Servers and â€œVPN/USA basedâ€ computer servers for declaring fake carry forward input tax. The directorate has strongly recommended the Federal Board of Revenue (FBR) that in order to preempt fraudulent attempts in future it is recommended that system controls and checks may immediately be placed on taking fake tax credit in Brought Forward (BF) and Carry Forward (CF) columns of returns and checks on return filing system to block access on â€œIRISâ€ through Proxy/foreign based servers and VPN, as has been done on customs system of Goods Decelerations and Clearance under PSW and WeBOC. Details of the case revealed that the Directorate of I&I-IR, Karachi has detected a unique scam within a few days of execution by fraudsters. In this case foreign IPs/VPN/Proxy Server have been used by unscrupulous elements to mask their identity and hide domestic location. During last one year many gangs have been busted and a number of culprits arrested from different cities of the country on the basis of local IP address location, however, this time to hoodwink tax authorities, fraudsters used â€œVPN/USA basedâ€ computer servers located in â€œDallas, Texasâ€ and â€œNew Jerseyâ€ to access FBRâ€™s e-filing system. During short period of sixteen days (June 13-29, 2024) and particularly immediately after announcement of Federal Budget on 12.6.2024, Waqar Enterprises (Importer and Distributor) registered with the Regional Tax Office-II, Karachi injected fake input of Rs 3,085 million of Coal Sector (HS Code 2701), parked through revised sales tax returns of three previous months (Jan, Feb & March-2024,) and by declaring fake carry forward input tax. The above layering and parking of fake input tax was apparently made to avoid applicability of new tax measures on coal sector i.e. withholding tax. In a case falling under jurisdiction of RTO-II Karachi, the registered person has blatantly breached IRIS return filing system by taking fake tax credit in brought forward (B/F) and carry forward (C/F) columns of returns. As per system controls, C/F amount is automatically uploaded/accounted for in next month return from previous tax period, whereas in the instant case heavy B/F amounts of tax credit declared in returns without having the same corresponding C/F input tax. The said fraudulent method has not only raised serious question mark on IRIS system controls but resulted into uploading of fake output/input tax in system as had previously been done by fraudsters through uploading of â€œfake Credit Notesâ€ fake â€œAnnex-Câ€ and â€œNegative input taxâ€ which was detected and prevented by DG I&I-IR. In some other cases similar fraudulent activity has been detected involving total revenue loss so far detected as Rs 16,000 million out of which substantial amount has been blocked by timely action of DG I&I-IR and further efforts are in hand to prevent fake input tax from reaching to end users. Copyright Business Recorder, 2024

Date: 2024-11-07

Details: Tax officials in Pakistan have been granted the authority to enter the premises of taxpayers for conducting audits or surveys, according to the Federal Board of Revenue (FBR). The empowerment stems from Section 175 of the Income Tax Ordinance, 2001, which grants tax officials extensive powers to access taxpayer premises without prior notice for the purposes of auditing accounts and conducting surveys related to tax liabilities. The regulations, as outlined in Section 175, allow tax officials to enter any taxpayerâ€™s premises at any time, enabling them to carry out audits or surveys to verify the accuracy of financial records. Under these provisions, tax officials can access a range of documents, including physical records and computer data, that are essential to determining the taxpayerâ€™s liability. This marks a significant shift in the FBRâ€™s approach to tax enforcement, aiming to ensure compliance and tackle tax evasion. According to the details provided by the FBR, tax officials now have â€œfull and free accessâ€ to taxpayer premises, accounts, documents, and computer systems. This includes the right to examine documents, make extracts or copies, and impound materials when necessary for further investigation. In cases where information is stored digitally, tax officials are empowered to seize computers or data storage devices to copy the necessary data. This expanded authority is seen as a means to make tax audits more thorough and reduce opportunities for tax evasion. Moreover, tax officials can also inventory any articles found on taxpayer premises during such audits. The FBR has clarified that in order to enforce these powers, the Commissioner of the FBR or any designated officer has the authority to act without prior notice, which may raise concerns about privacy but is intended to prevent taxpayers from tampering with records before an audit. The law also allows tax officials to involve external experts and valuers. These professionals can be authorized by the Commissioner to enter premises and perform specific tasks to aid in the audit or survey. This provision aims to ensure that audits are conducted by experts who can accurately assess complex financial situations. Taxpayers are required to cooperate with the tax officials during such inspections. The occupier of the premises â€“ whether the owner, manager, or another responsible person â€“ must provide reasonable assistance to tax officials to ensure the smooth conduct of audits and surveys. The tax authorities also assure that any documents or computers seized during an audit will be signed for by the Commissioner or an authorized officer to ensure proper documentation. For those whose accounts, documents, or computers are impounded, the law provides a provision for examination and copying of the seized materials under supervision. However, the law stipulates that if any seized items are lost or destroyed during the process, the FBR will compensate the owner of the materials for the loss. One of the key provisions in Section 175 is that it overrides any laws relating to privilege or public interest concerning access to premises or the production of documents. This provision underscores the importance of tax compliance and the governmentâ€™s commitment to ensuring that tax laws are enforced without interference. The FBR is also authorized to issue additional rules related to real-time electronic access for audits, which could streamline the audit process and improve the accuracy of tax assessments. Tax officials are expected to leverage these powers to improve tax compliance and reduce the tax gap, an issue that has long plagued Pakistanâ€™s economy. The move to empower tax officials to conduct unannounced inspections is seen as a necessary step in improving Pakistanâ€™s tax system, although it is likely to face challenges from taxpayers concerned about the potential for misuse of power. Nonetheless, the FBR is hopeful that the increased transparency and enforcement will help boost the countryâ€™s tax revenue and improve overall economic stability.

Date: 2024-11-07

Details: The Federal Tax Ombudsman (FTO) Secretariat has reported a dramatic 67% increase in taxpayer complaints filed against the Federal Board of Revenue (FBR) this year, reflecting rising dissatisfaction and a renewed commitment to transparency within Pakistanâ€™s tax administration. During a press briefing, Almas Ali Jovindah, Advisor for the FTOâ€™s Legal & Media Wing, disclosed that the FTO received 10,515 complaints over the last 10 months, of which 9,900 have been successfully resolved â€” a commendable improvement over previous years. Jovindah underscored that actionable measures against corrupt tax officials rely on formal complaints from affected taxpayers. He encouraged the business community to utilize the FTOâ€™s services without fear of retribution, noting that reports of bribery or illicit demands should be brought directly to the FTO to ensure accountability within the FBR. Highlighting advancements in the FTOâ€™s complaint resolution process, Jovindah emphasized the increased application of Section 33 of the FTO Ordinance, which supports informal dispute resolution. This procedural refinement has significantly accelerated complaint processing, providing a faster, less bureaucratic route for taxpayers to resolve disputes. A particularly impactful outcome of the FTOâ€™s interventions has been the swift processing of delayed tax refunds. Over the past 10 months alone, Rs 2 billion in refunds have been disbursed to taxpayers, a substantial increase from the Rs 17.742 billion refunded in all of 2023. Additionally, the FTO initiated a record 31 â€œown-motionâ€ investigations this year, addressing systemic issues within the tax administration and reinforcing its commitment to tackling widespread grievances. The surge in complaints has prompted the FTO to intensify its outreach, with 117 sessions conducted in 2024 to educate taxpayers on their rights and the ombudsmanâ€™s role in securing them. Jovindah acknowledged that a seasoned advisory team has contributed to this progress, fostering trust and empowering taxpayers to seek redress confidently. Furthermore, the FTOâ€™s modernization efforts have been instrumental in enhancing accessibility. With the adoption of digital platforms like custom Zoom links for remote hearings, the FTO has streamlined its adjudication process, making it accessible to Pakistani taxpayers residing abroad in countries such as the United States, Canada, Saudi Arabia, and China. These technological advancements have not only improved efficiency but also provided a reliable, paperless solution for those seeking justice from afar. The 67% increase in complaints signals that taxpayers are more proactive in holding tax authorities accountable, a shift welcomed by the FTO as it continues to fortify Pakistanâ€™s tax administration and support equitable treatment for all taxpayers.

Date: 2024-11-06

Details: LAHORE: The Regional Tax Office (RTO) negligence has led to the invalidation of default surcharge notices issued to a power generation company. This shocking revelation highlights the departmentâ€™s lack of accountability and transparency in its dealings with taxpayers. Sources reveal that the tax department failed to adhere to procedural requirements, resulting in the notices being declared â€œwithout lawful authority and jurisdiction.â€ The departmentâ€™s negligence includes failure to adjudicate the quantum of default surcharge and issuance of separate proceedings under Sections 161 and 205 of the Income Tax Ordinance, 2001, which is not permissible. Also, the department did not consider the taxpayerâ€™s compliance history, said the sources. Taxpayers have long complained about harassment and unfair treatment by tax authorities. This incident vindicates their stance, as the companyâ€™s representatives welcomed the development. The incident raises questions about the departmentâ€™s ability to manage tax affairs efficiently. The relevant appellate forum set aside the impugned show-cause notices and subsequent orders. The forum held that the tax officerâ€™s negligence and lack of jurisdiction rendered the notices invalid. Experts say this incident underscores the need for tax authorities to ensure fairness and transparency. â€œThis is a clear case of departmental negligence, which can erode taxpayer confidence,â€ noted tax expert, Ashfaq Khan. While expressing concerns, he said this incident reinforces the need for reform. Financial analysts believe this is a wake-up call for the tax department to streamline its processes and ensure adherence to the law. They said the departmentâ€™s negligence has resulted in unnecessary litigation and financial burden on taxpayers. To prevent such incidents, they added, the tax department must ensure proper training for officials, streamline procedures, and enhance transparency and accountability. Pakistanâ€™s business community demands a business-friendly environment to promote economic growth. The tax departmentâ€™s negligence hinders this goal. Immediate action is necessary to address these issues and ensure accountability. As one tax practitioner noted, â€œthe tax department must prioritize fairness, transparency, and efficiency to regain taxpayer trust.â€ Only then they can create in Pakistan a conducive environment for businesses to thrive. The present case serves as a stark reminder of the need for reform within the tax department,â€ they stressed. Copyright Business Recorder, 2024

Date: 2024-11-06

Details: Karachi, November 5, 2024 â€“ The Federal Board of Revenue (FBR) announced a significant increase in sales tax revenue from electricity for fiscal year 2023-24, marking a year-on-year (YoY) surge of 63.4%. According to the FBRâ€™s annual report, the sales tax collected from electricity rose to an impressive Rs. 364.66 billion, up from Rs. 223.22 billion in the preceding fiscal year, underscoring the substantial impact of rising power tariffs on tax revenues. This impressive upswing in revenue collection has been pivotal in boosting the FBRâ€™s overall Sales Tax Domestic (STD) revenues, which reached a total of Rs. 1,222.8 billion for FY2023-24. This represents a 22.6% increase from Rs. 997.8 billion collected in the previous fiscal year, adding Rs. 225.0 billion to the national treasury. Key Sectors Driving Domestic Sales Tax Revenue Sales tax revenue from domestic sectors continued to reflect robust growth, with fifteen major sectors collectively contributing 62.4% of the FBRâ€™s domestic sales tax collections. Electrical energy emerged as the highest contributor, accounting for a notable 22.5% of the total, a leap driven primarily by increased power tariffs. This rise places electrical energy at the forefront of domestic sales tax revenue contributors. Performance of Other Major Sectors Among other top-performing sectors, sugar, cement, and cigarettes demonstrated robust growth in their sales tax contributions. Sugar, for instance, contributed Rs. 98.19 billion, showing a year-on-year increase of 28.5%. Cement, another essential sector, generated Rs. 66.61 billion, reflecting an impressive growth rate of 59.5%. Meanwhile, cigarettes, a consistently high-revenue product, saw an even stronger growth rate of 64.3%, with a collection of Rs. 60.66 billion. Conversely, some sectors displayed declining contributions. POL (Petroleum, Oil, and Lubricants) products, traditionally one of the more substantial contributors to sales tax revenue, saw a contraction in their share. Revenue from POL products fell by 4.3%, with its contribution decreasing from 11.9% in FY2022-23 to 9.0% in FY2023-24. Similarly, natural gas showed a minor decline in revenue, with a collection of Rs. 46.5 billion, marking a 2.5% drop from the prior year. Breakdown of Key Contributors to Sales Tax Revenue Commodity/Item FY2023-24 Collection (Rs. bn) FY2022-23 Collection (Rs. bn) Growth (%) FY2023-24 Share (%) FY2022-23 Share (%) Electrical Energy 364.66 223.22 63.4 22.5 17.5 POL Products 145.35 151.86 -4.3 9.0 11.9 Sugar 98.19 76.43 28.5 6.1 6.0 Cement 66.62 41.76 59.5 4.1 3.3 Cigarettes 60.66 36.93 64.3 3.7 2.9 Cotton Yarn 57.12 46.75 22.2 3.5 3.7 Source: FBR The collective revenue from these top fifteen items totaled Rs. 1,010.95 billion in FY2023-24, reflecting a year-on-year growth of 31.4% and accounting for 62.4% of the total STD collection, an increase from the previous yearâ€™s share of 60.2%. Implications of Rising Sales Tax Collection The FBRâ€™s surge in sales tax collection highlights the positive effect of strategic policy adjustments and tax reforms aimed at optimizing revenue from critical sectors. The significant growth in sales tax revenue from electricity can be attributed to recent adjustments in power tariffs, which, while impacting consumers, have also fueled tax revenue growth. These figures underscore the governmentâ€™s focus on strengthening domestic revenue sources amid fiscal challenges. The FBRâ€™s performance in FY2023-24 not only reflects successful tax policy implementation but also points to a robust mechanism for supporting Pakistanâ€™s economic needs through domestic revenue collection. As the FBR continues refining its strategies, the emphasis on sustainable and sector-specific tax policies may become increasingly central to fiscal planning and economic stability.

Date: 2024-11-06

Details: Karachi, November 6, 2024 â€“ The Federal Board of Revenue (FBR) is under mounting pressure to clarify its recent changes to Karachi property valuation guidelines, which appear to remove previously allowed rebates on certain property classifications. This call for clarity stems from concerns over the sudden elimination of rebates that were available under prior notifications, causing uncertainty among property owners and potential investors. Owais Yakoob Kapadia, a prominent advocate of the High Court, has formally addressed the issue, raising crucial points in a letter to the FBR Chairman. Kapadia contends that the recent SRO, dated October 29, 2024, has retracted rebates without prior notice or public consultation, contradicting the provisions outlined in the previous SRO No. 345(I)/2022, dated March 2, 2022. This unexpected shift has created widespread confusion within the real estate sector and raised concerns about the potential adverse effects on property valuations and market stability in Karachi. In his letter, Kapadia meticulously outlined the valuation structure and rebate provisions stipulated in the March 2022 notification. This notification provided detailed guidelines on how property valuations were determined, including allowances for residential and commercial properties based on their age, location, and structural components. The March 2022 SRO set forth a well-structured valuation system that allowed for certain rebates on property values, especially for buildings with additional stories and older structures. The key points from the earlier SRO, which have now been seemingly excluded, included the following: 1. Base Values for Covered Areas: Valuation of property was calculated per square yard of the covered area on the ground floor, with adjustments for additional floors. This method applied to both residential and commercial properties, allowing for straightforward valuation based on actual built-up space. 2. Rebates for Multi-Storey Buildings: For residential buildings with more than one storey, an incremental valuation increase of 25% was allowed for each additional story above the ground floor. This provision was especially advantageous for owners of multi-storey properties, helping to more accurately reflect the valuation of added space without significantly inflating property tax obligations. 3. Property Age-Based Deductions: A sliding scale of rebates was applied to properties based on their age, recognizing the depreciation and reduced market value of older structures. For residential buildings: o Structures between 5-10 years old were eligible for a 5% reduction in value. o Buildings aged 10-15 years qualified for a 7.5% reduction. o Properties older than 20 years were valued equivalent to an open plot, reflecting maximum depreciation. For flats and apartments, a similar deduction scale was applied, with reductions reaching up to 50% for properties over 30 years old. Commercial buildings were also eligible for age-based reductions, though at different percentages. 4. Special Valuation Adjustments: The previous SRO also contained provisions for unique property characteristics. For instance: o Defence Housing Authority Plots: Properties within the Defence Housing Authority (DHA) facing major roads were assessed at a premium value, while those with less favorable placements, such as rear or school-facing plots, qualified for a 25% reduction. o High-Rise Buildings: Buildings with more than five stories received distinct valuation treatment. These provisions were developed to align property valuations more closely with the actual market value of properties, considering factors that impact both desirability and livability. By introducing these reductions, the FBR sought to maintain fairness in tax assessments for both residential and commercial property owners. Kapadiaâ€™s letter to the FBR stresses that the recent notification effectively nullifies these longstanding rebates, sparking a wave of uncertainty in the real estate market. According to Kapadia, this lack of clarity and abrupt departure from prior policy puts the public at risk of financial strain, as many property owners rely on these rebates to mitigate their tax liabilities. The newly issued SRO, which omits any mention of the previously allowed deductions, could lead to significant tax hikes for property owners of older buildings or multi-storey structures. Without the rebates, properties that were previously deemed â€œtax-friendlyâ€ due to age or configuration could see inflated tax assessments, disrupting financial planning for property owners. In his appeal to the FBR, Kapadia urged for immediate clarification on whether the rebate provisions will be permanently removed or merely require administrative revision in the notification. The absence of these rebates may hinder property transactions, slow down real estate investments, and potentially devalue older properties, affecting both individual owners and the broader economy. â€œGiven the significant impact on public welfare, it is imperative that the FBR revisits this decision,â€ Kapadia wrote. â€œIssuing clear guidance to confirm whether the previous rebates remain in effect will bring much-needed relief and prevent market destabilization.â€ The real estate sector in Karachi, one of the largest and most dynamic in Pakistan, has long been influenced by the FBRâ€™s valuation tables and tax policies. Developers, investors, and property owners often rely on the predictability of such measures to make informed financial decisions. A sudden policy reversal or ambiguity in rebate applicability has the potential to deter investment, stalling the real estate marketâ€™s growth trajectory. Market analysts warn that, without a clear response from the FBR, Karachiâ€™s property values could experience fluctuations, affecting property transfers, rental rates, and investor confidence. The lack of rebates may also disproportionately impact those owning older properties, leading to unintended financial burdens.

Date: 2024-11-06

Details: Karachi, November 6, 2024 â€“ In a decisive move to bolster Pakistanâ€™s tax base, the Federal Board of Revenue (FBR) has launched the registration of over 1.35 million potential taxpayers as part of its broadening of the tax base (BTB) initiative. This ambitious step aims to enhance national revenue collection by incorporating individuals and entities that have not yet fulfilled their tax obligations. The FBRâ€™s latest report reveals that a total of 46 sets of third-party data have been shared with field offices across the country to facilitate the registration of new taxpayers. As a result, more than 1,354,009 previously unregistered taxpayers have been identified for inclusion in the formal tax system. This move comes as part of the governmentâ€™s broader fiscal reforms aimed at addressing Pakistanâ€™s tax shortfall and improving compliance among its citizens. For fiscal year 2024, the Special Investment Facilitation Council (SIFC) set an ambitious target of registering 1 million new taxpayers, a goal the FBR is aggressively pursuing with a multi-faceted strategy. The boardâ€™s efforts to expand the tax net are underscored by the strategic use of technology, data analytics, and enhanced collaboration with key government agencies. Strategic Measures for Taxpayer Registration The FBR has employed several innovative measures to meet its BTB target: 1. Technology and Data Analytics: The FBR has integrated cutting-edge data analytics and real-time monitoring dashboards to track and manage the progress of taxpayer registration. This approach ensures continuous oversight and facilitates prompt action on discrepancies. 2. Collaboration with NADRA: A key component of the FBRâ€™s strategy is the collaboration with the National Database and Registration Authority (NADRA), aiming to establish machine-to-machine integration for real-time access to financial transaction data from major organizations. 3. Nudging Initiatives: In a bid to encourage compliance, the FBR has initiated a robust nudging campaign through SMS and WhatsApp messages targeted at high-profile unregistered individuals. This initiative, dubbed the REMIT Initiative, aims to urge non-filers to come forward and fulfill their tax obligations. 4. Public Awareness Campaigns: To raise awareness and educate the public on the importance of tax registration, the FBR has launched an extensive media campaign. The campaign promotes the Malomaat portal, encouraging citizens to use the platform to file their returns. 5. Data Sharing Partnerships: To streamline taxpayer identification, the FBR has signed Memorandums of Understanding (MOUs) with 28 departments and organizations, facilitating the transfer of critical data on a real-time basis. 6. Enhanced Tax Tools: The Maloomat portal has been revamped, and new tools like Tax Ray have been introduced to support field formations in their efforts to identify and register new taxpayers. The FBRâ€™s focused approach, combining technological innovations with strategic partnerships and targeted outreach, reflects a comprehensive effort to modernize Pakistanâ€™s tax system and improve compliance rates. These steps are expected to significantly contribute to the governmentâ€™s revenue generation efforts, bringing the country closer to its fiscal goals.

Date: 2024-11-06

Details: Karachi, November 6, 2024 â€“ The Federal Board of Revenue (FBR) has announced a significant achievement in the collection of customs duties on petroleum, oil, and lubricants (POL) products during the fiscal year 2023-24. A total of Rs 330 billion was collected, marking a 14% increase from the Rs 289 billion collected in the previous fiscal year. This growth underscores the resilience of the countryâ€™s import duties and highlights the continued importance of the POL sector in Pakistanâ€™s economy. According to FBRâ€™s annual report, the total customs duty collection for FY2023-24 reached Rs 1,104.1 billion, a notable 18.5% increase from the previous fiscal yearâ€™s collection of Rs 931.7 billion. The customs duty contributed approximately 12% to the overall FBR revenue for the fiscal year, reflecting the critical role of trade taxes in financing government operations. The POL sector, which includes petroleum products, oil, and lubricants, remains the largest contributor to the national customs duty revenues. It accounted for 29.1% of total customs duty collections in FY2023-24, a slight decrease from the 29.8% share in the prior year. Despite the small dip in share, the revenue from POL products saw an increase of 14.1%, from Rs 289 billion in FY2022-23 to Rs 329.6 billion in FY2023-24. The FBRâ€™s positive growth trend in customs duty collection also included strong performances from other sectors. The vehicles category, for example, saw a significant surge of 42% in its contribution, with Rs 125.3 billion collected in FY2023-24 compared to Rs 88.2 billion in FY2022-23. The vehicle sectorâ€™s share in overall customs duty rose to 11%, up from 9.1% in the previous year, making it the second-largest contributor after POL products. While the customs duty collection from the POL and vehicle sectors showed impressive growth, some categories witnessed a decline. Edible oil, a key import item, saw a decrease of 12.7% in collections, which was attributed to a 13.9% drop in the import volume of edible oil. This decline, despite the overall positive performance in customs duty collection, highlights the complexities of global trade dynamics and the impact of shifting import trends on revenue generation. Other sectors that contributed to the FBRâ€™s customs duty revenues included articles of iron and steel, electrical machinery, and machinery & mechanical appliances. The iron and steel sector, for instance, experienced a 27.2% growth, with a total collection of Rs 66.6 billion, while electrical machinery saw a 37.8% increase, collecting Rs 51.8 billion. The machinery sector grew by 26.9%, bringing in Rs 47.2 billion. The FBRâ€™s strategy to improve revenue collection and curtail smuggling has played a key role in bolstering customs duty figures, despite global economic challenges. The positive growth trajectory is indicative of the broader recovery in Pakistanâ€™s trade sector, which had previously been hampered by external and internal economic factors. The overall customs duty revenue of Rs 1,104.1 billion is expected to provide significant fiscal support to the government, enabling it to meet its budgetary targets and continue funding critical development projects. With the POL sectorâ€™s dominance and robust performance across other categories, FBR is optimistic about sustaining this upward revenue trend in the coming fiscal years.

Date: 2024-11-06

Details: Islamabad, November 6, 2024 â€“ The Federal Board of Revenue (FBR) has announced significant revisions to its Tajir Dost Scheme, a tax initiative aimed at bringing shopkeepers and small traders into the tax net. The adjustments focus on simplifying the scheme by refining the criteria for retailer registration and suspending the previous policy of fixed tax per shop. Under the revised policy, the FBR will prioritize registration based on data-driven analysis, leveraging commercial electricity consumption records, tax return analysis, and secure data insights. This strategic shift intends to capture larger, high-potential retailers and shopkeepers, specifically targeting wholesale markets and premium retail zones. The FBRâ€™s approach aims to increase efficiency by concentrating on traders with higher revenue potential and evidence of income concealment, rather than conducting exhaustive physical surveys or imposing a one-size-fits-all fixed tax. The policy update emerged from a meeting between FBR officials and Muhammad Naeem Mir, Chief Coordinator of the Tajir Dost Scheme-2024. Mir noted that the FBRâ€™s revised strategy reflects a practical acknowledgment of revenue realities, particularly the minimal fiscal contribution of very small traders. â€œThereâ€™s limited utility in registering minor shopkeepers who contribute insignificantly to the national exchequer,â€ he stated, emphasizing that the FBR will now pivot its focus toward retailers with a greater revenue footprint. One of the hallmark features of the revamped scheme is its data-centric, non-intrusive methodology. Registration will now be grounded in verifiable information on tax evasion and income concealment, moving away from the door-to-door market surveys that previously characterized the FBRâ€™s outreach efforts. In this refined model, shopkeepers will be assessed based on commercial electricity meter data and stock reports derived from filed tax returns, ensuring a more targeted approach toward tax liability estimation. The decision to adopt this evidence-based model aligns with the FBRâ€™s ambitious revenue collection target of PKR 50 billion from the retail sector. By honing in on larger retail players and identified tax evaders, the FBR aims to bolster its tax base without overburdening small traders, who contribute marginally to overall revenue. To this end, the FBRâ€™s analytical teams are now conducting an in-depth review of nil-filers and shopkeepers with declared stock positions, cross-referencing these with commercial electricity consumption to detect discrepancies. The revamped scheme signifies a critical shift in Pakistanâ€™s tax administration, prioritizing impactful compliance over exhaustive coverage. With the suspension of the fixed tax per shop policy, the FBR signals a commitment to equitable tax practices by ensuring that only substantial, tax-liable entities bear the tax burden. The revised Tajir Dost Scheme underscores a more precise and economically viable approach to retail sector taxation, aiming to enhance compliance and foster a fairer commercial tax landscape.

Date: 2024-11-05

Details: Karachi, November 5, 2024 â€“ In its annual report released on Tuesday, the Federal Board of Revenue (FBR) unveiled a suite of pivotal income tax measures aimed at bolstering revenue collection for the fiscal year 2023-24. These reforms are part of a broader strategy to enhance tax compliance and broaden the tax base, reflecting the governmentâ€™s commitment to improving fiscal health in a challenging economic landscape. The FBRâ€™s report outlines several key initiatives designed to optimize revenue generation and ensure a fairer tax system. Notably, these measures include: 1. Enhancement of the Super Tax Scope: The FBR has broadened the scope of the Super Tax under Section 4C of the Income Tax Ordinance, 2001, introducing additional income slabs and rates for individuals and entities with earnings exceeding Rs. 150 million. This progressive approach aims to ensure that high-income earners contribute a fair share of taxes, thereby enhancing equity within the tax system. 2. Reintroduction of Advance Withholding Tax on Cash Withdrawals: A new policy mandates the collection of an adjustable advance tax at a rate of 0.6% from non-Active Taxpayers List (ATL) individuals withdrawing cash exceeding Rs. 50,000 per day from their bank accounts. This move is expected to encourage more individuals to register as taxpayers, thereby increasing the overall number of filers and promoting compliance. 3. Increase in Withholding Tax Rates: The withholding tax rates applicable to the supply of goods, services rendered, and execution of contracts have been raised by 1% for both resident and non-resident entities with a permanent establishment in Pakistan. This adjustment, the first in over five years, is aimed at modernizing the tax regime and ensuring it keeps pace with economic conditions. 4. Final Tax on Bonus Shares: The FBR has reinstated withholding tax as a final tax on bonus shares issued by companies, imposing a rate of 10% for ATL taxpayers and 20% for non-ATL taxpayers. This tax applies to bonus shares, deemed as income for shareholders, and will be calculated based on the day-end price for listed companies. 5. Enhanced Withholding Tax Rates on International Payments: To address the outflow of foreign exchange, withholding tax rates on payments made through debit and credit cards for foreign transactions have increased significantlyâ€”from 1% to 5% for ATL individuals and from 2% to 10% for non-ATL individuals. 6. Tax on Foreign Domestic Helpers: In a bid to improve tax compliance among employers of foreign domestic workers, an adjustable advance tax of Rs. 200,000 has been levied on employers or sponsors of foreign domestic helpers. This tax will be collected at the time of issuing work permits, thus formalizing the employment of foreign workers and ensuring tax accountability. 7. Imposition of Additional Tax on Exceptional Profits: Recognizing the extraordinary profit margins in several business sectors, the FBR has introduced a provision in the Income Tax Ordinance, 2001, allowing for an additional tax of up to 50% on income, profits, and gains reported in financial statements. This measure aligns with international best practices and aims to tax excessive profits more rigorously. These comprehensive measures signify the FBRâ€™s proactive approach to reforming Pakistanâ€™s tax landscape. By targeting high earners and previously untaxed sectors, the FBR aims not only to increase revenue collection but also to create a more equitable tax system that addresses the needs of a diverse economy. As these policies are implemented, the FBR anticipates that they will yield significant results in enhancing compliance, expanding the taxpayer base, and ultimately contributing to Pakistanâ€™s economic resilience. The commitment to reform is a critical step towards achieving fiscal stability and ensuring that the country meets its financial obligations in a dynamic global economic environment.

Date: 2024-11-05

Details: Karachi, November 5, 2024 â€“ In a bid to bolster its tax-to-GDP ratio, Pakistan is set to introduce surcharges on fossil fuels as part of an aggressive revenue collection strategy outlined in the latest annual report by the Federal Board of Revenue (FBR), released on Tuesday. This initiative is in response to commitments made to the International Monetary Fund (IMF) under a new financial arrangement aimed at stabilizing the countryâ€™s economy. The FBR report emphasizes that Pakistan has committed to increasing its tax-to-GDP ratio to 13.7% by the fiscal year 2028-29. Currently, the ratio stands at a precariously low level, necessitating an additional 2.6% increase to meet this ambitious target. The report indicates that a significant portion of this increase will be derived from the imposition of surcharges on fossil fuels, alongside efforts to enhance the provincial tax base and augment non-tax revenue streams at the federal level. The recent completion of the IMFâ€™s 2024 Article IV consultation with Pakistan, alongside the approval of a 37-month Extended Arrangement under the Extended Fund Facility (EFF) amounting to SDR 5,320 million (approximately US$7 billion), has catalyzed these reforms. The agreement, finalized on May 23, 2024, mandates a rigorous Fiscal Framework aimed at improving Pakistanâ€™s economic resilience. Under this framework, the Government of Pakistan (GoP) is expected to achieve a tax-to-GDP ratio of 13.7%, with an ambitious target of 11.1% of that increase anticipated to come from the FBRâ€™s intensified policy and enforcement measures. Supported by the World Bank, the FBR is implementing a comprehensive Revenue Mobilization Program as part of this reform initiative, focusing on expanding the tax net and enhancing compliance. Key components of the Medium-Term Fiscal Framework (MTFF) established under the EFF include several critical measures designed to broaden the tax base and eliminate existing inefficiencies in the tax system. Among these measures is the elimination of preferential tax treatments that have historically benefitted certain sectors, thereby reducing the overall tax contribution from the economy. The reforms also propose a significant expansion of the coverage of Personal Income Tax (PIT) and Corporate Income Tax (CIT) to include previously untaxed sectors. This expansion will be complemented by a reduction in tax slabs, which is expected to raise the maximum tax rate to an unprecedented 45%. Furthermore, the simplification of PIT regulations for salaried and non-salaried individuals is anticipated to streamline tax compliance, thereby encouraging greater participation in the formal tax system. Another crucial aspect of the proposed reforms includes expanding the coverage and rates of the Federal Excise Duty (FED). By enhancing these taxes, the government aims to capture revenue from sectors that have previously been inadequately taxed, ensuring a more equitable distribution of the tax burden. Additionally, the overhaul of income tax and withholding tax regulations for motor vehicle registrations is set to create a more transparent and efficient tax collection process. These measures are intended not only to increase revenue but also to build public trust in the taxation system by ensuring that all sectors contribute their fair share to the national coffers. While these initiatives represent a proactive approach to address Pakistanâ€™s fiscal challenges, the proposed fossil fuel surcharges have sparked a debate about their potential impact on consumers and businesses. Critics argue that increased costs associated with fossil fuels could exacerbate the financial burdens on households already struggling with inflation, while proponents assert that these surcharges are essential for enhancing the countryâ€™s fiscal health. As Pakistan embarks on this ambitious journey to reform its tax system, the successful implementation of these measures will be crucial for achieving the targeted tax-to-GDP ratio and ensuring sustainable economic growth. The governmentâ€™s commitment to improving fiscal discipline, coupled with the backing of international financial institutions, signals a pivotal moment in Pakistanâ€™s efforts to stabilize its economy and pave the way for long-term prosperity. The outcomes of these reforms will not only shape Pakistanâ€™s economic landscape but also influence its relationships with international creditors and investors in the coming years.

Date: 2024-11-05

Details: Karachi, November 5, 2024 â€“ The Federal Board of Revenue (FBR) has recorded a remarkable 36.5% increase in withholding tax (WHT) collection for the fiscal year 2023-24, according to its annual report released on Tuesday. This growth, from Rs 2,007 billion in FY2022-23 to Rs 2,740 billion in FY2023-24, underscores the FBRâ€™s enhanced efforts in tax enforcement and compliance. The FBR attributed this robust performance to improved compliance strategies and an increase in economic activities that have strengthened revenue collection across key withholding tax categories. Notably, the largest surge was seen in withholding tax from dividends, which grew by an astounding 69.9%. Following this, significant increases were recorded in collections from technical fees, bank interest and securities, salaries, and property sales, with growth rates of 53.6%, 52.8%, 39.3%, and 37%, respectively. The breakdown of withholding tax contributions revealed that contract payments (Section 153) held the highest share, contributing 18% of the total WHT revenue. This was closely matched by profit on debt and bank interest (Section 151) at 18%, followed by salaries (Section 149) at 13%, dividends (Section 150) at 5%, and electricity bills (Section 235) at 5%. Together, these five major items contributed to 59% of the total withholding tax collection, underscoring the dominance of these revenue streams. The FBR report emphasized that the notable increases across various tax sections illustrate the governmentâ€™s dedication to strengthening tax collection mechanisms. Improved monitoring and enforcement policies played a central role in achieving these gains. Individual Tax Head Analysis Section 151: Bank Interest & Securities registered a striking 52.8% increase, reaching Rs 489,100 millionâ€”an increase of Rs 169,087 million over the previous year. This boost is attributed to rigorous monitoring of financial transactions and enhanced scrutiny in the banking sector. Contracts (Section 153) followed as a significant contributor, recording a 27.4% rise from Rs 389,386 million in FY2022-23 to Rs 496,050 million in FY2023-24. This uptick is likely a result of the expansion in infrastructure and development projects across the country, which have driven up contract-based activities and tax contributions. The Salaries category (Section 149) also posted strong growth, increasing by 39.3% to reach Rs 367,890 million. This increase is largely attributed to revisions in salary brackets and intensified withholding tax compliance efforts among employers. Among the highest growth rates was seen in Dividends (Section 150), which soared by 69.9%, reaching Rs 145,006 million. The FBR cited improved dividend distributions across sectors and targeted policies aimed at preventing tax evasion as key drivers behind this remarkable increase. The withholding tax on Electricity Bills (Section 235) rose by 30%, generating Rs 124,269 million. This reflects a wider compliance base in the utilities sector. Likewise, the tax on Sales of Property (Section 236C) saw an impressive 37% increase, collecting Rs 95,651 million. This growth aligns with increased activity in Pakistanâ€™s real estate market. In a surprising development, Cash Withdrawals (Section 231A) generated Rs 32,422 million, a significant jump from just Rs 20 million the previous year. This increase likely resulted from the FBRâ€™s enhanced monitoring and possibly new levies targeting large cash withdrawals. Another notable rise was seen in the tax on Remitting Amounts Abroad (Section 236Y), which surged to Rs 18,789 million, reflecting the FBRâ€™s drive to capture revenue from outbound financial transactions. Continued Commitment to Fiscal Strength The report highlights the FBRâ€™s dedication to broadening the tax base and improving fiscal discipline. However, the report also noted that certain tax categories, such as Commission (2.5% growth) and Purchase by Retailers (11% growth), showed comparatively modest increases. This suggests potential for further focus and improvements in these areas to ensure a balanced and diversified revenue stream. The FBR report commented on the agencyâ€™s efforts, noting that the significant growth in withholding tax collection for FY2023-24 aligns with the broader governmental goals of enhancing fiscal sustainability and building a resilient economy. The FBRâ€™s improved collection performance reflects its ongoing commitment to implementing targeted tax policies and compliance measures designed to secure a stable revenue base. Looking forward, the FBR has expressed optimism that sustained revenue growth, supported by continued economic expansion and robust enforcement measures, will further bolster Pakistanâ€™s fiscal health. The agency remains committed to refining its policies to capture underutilized revenue sources, which are essential for financing critical infrastructure, healthcare, and education programs. The impressive 36.5% increase in withholding tax collection not only enhances fiscal stability but also positions Pakistan to invest more effectively in its development agenda, fostering long-term economic growth and resilience.

Date: 2024-11-05

Details: Karachi, November 5, 2024 â€“ The Federal Board of Revenue (FBR) has announced that it must collect an additional Rs 3.61 trillion to achieve its ambitious revenue target of Rs 12.91 trillion for the fiscal year 2024-25. This goal represents a 38.9% increase from last yearâ€™s collection of Rs 9.31 trillion, posing a substantial challenge for the revenue authority. According to the FBRâ€™s report, achieving this target will require considerable increases across multiple tax categories. Direct taxes, which formed a significant portion of last yearâ€™s revenue, are set to rise by 19.9%, with the target increasing from Rs 4.53 trillion in FY 2023-24 to Rs 5.43 trillion in FY 2024-25. Sales tax, another major component, will require an even more significant boost of 59.8%, aiming to generate Rs 4.93 trillion this fiscal year compared to Rs 3.08 trillion collected previously. Federal Excise Duty (FED) and customs duty also have steep growth targets. FED collections are expected to increase by 65.2%, aiming for Rs 953.9 billion in FY 2024-25, compared to Rs 577.5 billion in the previous year. Similarly, customs duty collections must grow by 44.3% to reach Rs 1.59 trillion, up from Rs 1.10 trillion in FY 2023-24. Reflecting on last yearâ€™s performance, the FBR highlighted shifts in its revenue composition. Direct taxes grew in prominence, accounting for 48.7% of total revenue in FY 2023-24, up from 45.7% the previous year. This shift was driven by a significant rise in advance taxes, which increased by 56.9%, and collections on withholding taxes, which rose by 36.5%. The composition of direct taxes has also evolved; the share of advance taxes grew from 29.8% to 33.8%, while withholding taxes saw a slight decrease from 61.4% to 60.5% between FY 2022-23 and FY 2023-24. Achieving the FY 2024-25 target is expected to present a formidable challenge, given the substantial percentage increases required across all tax categories. FBR officials have indicated plans to enhance tax compliance and broaden the tax base to meet this goal. Additionally, the board has called for stricter measures to combat tax evasion and improve collection efficiency. However, analysts suggest that the success of these measures will depend heavily on economic stability and the overall growth rate. Some experts have raised concerns about the impact of inflation and a slowing economy on taxpayers, which could pose obstacles to achieving the target. They warn that an excessive reliance on indirect taxes, particularly sales tax, may burden consumers and businesses, potentially affecting economic growth. In its report, the FBR underscored its commitment to meeting the target, viewing it as essential for funding Pakistanâ€™s development and reducing fiscal deficits. The authority is now under pressure to innovate and implement strategies that could lead to improved collection performance throughout FY 2024-25.

Date: 2024-11-05

Details: Karachi, November 5, 2024 â€“ Despite substantial increases in revenue collection, Pakistanâ€™s Federal Board of Revenue (FBR) has struggled to elevate the tax-to-GDP ratio, a critical indicator of fiscal health, over the past decade. According to a recent report, the tax-to-GDP ratio has stagnated, highlighting a challenge in translating revenue gains into proportional economic growth. The tax-to-GDP ratio is widely recognized as a key metric for evaluating a countryâ€™s tax revenue in relation to the size of its economy. This measure provides insights into tax policy trends and allows for international comparisons, with higher ratios generally observed in developed nations. A robust tax-to-GDP ratio is essential for a government to fund infrastructure, healthcare, education, and other critical sectors. According to the World Bank, a tax-to-GDP ratio exceeding 15% is instrumental for sustainable economic development and poverty alleviation. The FBR report revealed that while tax collection has surged, the tax-to-GDP ratio has failed to rise correspondingly. Over the past decade, the ratio has hovered between 8.41% and 9.81%, with the latest data indicating a modest increase from 8.54% in FY2022-23 to 8.77% in FY2023-24. Although this uptick aligns with the FBRâ€™s enhanced revenue collection efforts, it falls short of the structural progress needed to significantly boost the tax-to-GDP ratio. FBR officials attribute recent gains to a series of policy reforms and stringent enforcement measures, including crackdowns on tax evasion and improved compliance frameworks. These efforts contributed to a notable 30% increase in total tax revenue during FY2023-24. However, experts caution that while revenue growth is promising, the static tax-to-GDP ratio suggests an underlying challenge in broadening the tax baseâ€”a critical component in achieving a higher, more sustainable ratio. An encouraging trend in recent years has been the shift towards direct taxation. The proportion of direct taxes relative to GDP rose from 3.10% in FY2020-21 to 4.27% in FY2023-24. This shift reduces the burden of indirect taxes on consumers, indicating gradual progress towards a more equitable and progressive tax system. However, with indirect taxes still representing a considerable portion of revenue, further structural reforms are necessary to enhance fiscal stability. FBRâ€™s officials stated that while the current trajectory is promising, sustaining this momentum will require comprehensive economic reforms, greater public engagement, and more efficient allocation of tax resources. The government is optimistic that continued revenue growth will eventually translate into a higher tax-to-GDP ratio, but experts argue that without a fundamental shift in tax policy and public sector efficiency, the goal may remain elusive.

Date: 2024-11-05

Details: Karachi, November 5, 2024 â€“ The Federal Board of Revenue (FBR) has reiterated that all taxpayers in Pakistan must retain their tax records for a minimum of six years, as stipulated under Section 174 of the Income Tax Ordinance, 2001. This directive serves to ensure transparency and accountability, with specific record-keeping requirements set to facilitate audit and compliance procedures. Section 174 mandates that every taxpayer, unless exempted by the Commissioner, must maintain all accounts, documents, and records pertinent to their tax obligations within Pakistan. This requirement underscores the necessity for individuals and entities to keep thorough documentation that substantiates their financial activities, including income, expenses, and transactions. The FBR has clarified that any failure to provide adequate records may lead to significant consequences. According to Section 174(2), if a taxpayer is unable to produce documentation for a claimed deduction without reasonable cause, the Commissioner holds the authority to disallow or reduce the deduction. This provision is aimed at discouraging inaccurate or unsupported claims and promoting compliance with tax laws. Furthermore, the legislation specifies a six-year retention period for all accounts and documents related to each tax year. In cases where legal proceedings are ongoing, including assessments, appeals, or petitions, taxpayers are required to retain their records until a conclusive resolution is reached. This clause is critical for individuals or businesses involved in any ongoing disputes or adjustments, as it mandates the preservation of records to substantiate their financial positions throughout the legal process. Additionally, certain exemptions to the six-year limitation are provided, particularly regarding records that relate to undeclared income, assets, or expenses, as outlined in sub-section 2 of Section 111. These records, the FBR stipulates, are subject to indefinite retention due to their potential implications on tax liability and compliance. The ordinance also defines â€œdeductionâ€ under Section 174(4) as any amount recorded within trading, manufacturing, receipts and expenses, or profit and loss accounts. This clarity is intended to assist taxpayers in identifying which entries require detailed record-keeping to substantiate deductions accurately. In a further move to modernize tax compliance, Section 174(5) empowers the Commissioner to mandate the installation of an Electronic Tax Register. This digital solution is expected to streamline data retention, making it easier to access, store, and monitor financial transactions relevant to tax assessments. The FBRâ€™s directive highlights the critical role of meticulous record-keeping in achieving transparency and minimizing disputes, emphasizing that proper compliance safeguards taxpayers and strengthens the nationâ€™s fiscal system.

Date: 2024-11-04

Details: Karachi, November 4, 2024 â€“ In a move aimed at reinforcing transparency and broadening the tax net, the Federal Board of Revenue (FBR) has instructed banks to provide detailed information on account holders involved in transactions subject to withholding tax deductions. This directive, grounded in Section 165A of the Income Tax Ordinance, 2001, underscores the FBRâ€™s commitment to enhancing tax compliance and tackling tax evasion across Pakistan. Under Section 165A, banks are now required to disclose comprehensive financial data of account holders conducting significant transactions. Specifically, banks must furnish lists of account holders making daily cash withdrawals exceeding Rs 50,000, with monthly totals of such withdrawals reaching Rs 1 million or more. Additionally, account holders with deposits surpassing Rs 10 million in a single calendar month must also be reported. Other financial activities under scrutiny include credit card payments exceeding Rs 200,000 in a month, profit earned on debt, and information on newly opened or re-designated business accounts. The FBR emphasized that this mandate supersedes various legal protections under previous regulations, including the Banking Companies Ordinance of 1962, the Protection of Economic Reforms Act of 1992, and the Foreign Exchange Regulation Act of 1947. By requiring banks to report high-value transactions, the FBR aims to enhance its ability to detect income inconsistencies, thereby enabling more effective tax assessments. To streamline compliance, each bank must designate a senior officer at the head office to liaise directly with the FBR, ensuring the efficient provision of requested data. Furthermore, banks and their officers are shielded from civil, criminal, or disciplinary liabilities when disclosing information in compliance with this ordinance, granting them legal immunity in carrying out their duties under Section 165A. While some may view this initiative as an intensification of regulatory oversight, the FBR has assured account holders and financial institutions that all information gathered under this provision will remain strictly confidential, as stipulated by Section 216 of the ordinance. The data is solely intended for tax-related purposes and will be handled with the highest standards of discretion to preserve account holder privacy. This step reflects the FBRâ€™s determination to close the tax gap and improve revenue collection in Pakistan. By compelling banks to disclose significant account activity, the FBR can more accurately identify taxable income, ensure fair tax contributions, and curb tax evasion. This new compliance measure also seeks to level the playing field for honest taxpayers by bringing previously unreported or underreported income into the formal tax system. As Pakistan strives to achieve a more robust economic framework, the FBRâ€™s directive to banks represents a strategic maneuver to enhance transparency, accountability, and compliance within the financial system.

Date: 2024-11-04

Details: Karachi, November 4, 2024 â€“ The Federal Board of Revenue (FBR) finds itself grappling with a widening gap in tax targets, exacerbated by a sharp decline in corporate profitability for the first quarter of the fiscal year 2024-25. This financial shortfall underscores the mounting difficulties the FBR faces in achieving its ambitious revenue goals amid a complex economic landscape. In October 2024, the FBR managed to collect approximately Rs 877 billion, falling notably short of its Rs 980 billion targetâ€”a deficit of Rs 103 billion. Cumulatively, the FBRâ€™s collections for the first four months of the fiscal year reached Rs 3,440 billion, falling Rs 196 billion below the set target of Rs 3,636 billion for July through October. This underperformance has intensified scrutiny on FBRâ€™s revenue strategies and future tax collection outlook. The decline in corporate profitability compounds these challenges, with companies listed on the KSE-100 index reporting a substantial 14% year-on-year drop in earnings for the first quarter of 2024-25. According to an analysis by Topline Securities Limited, these firms collectively earned Rs 403 billion in the first quarter, a sharp fall from the Rs 468 billion reported during the same period last year. The deteriorating corporate landscape, characterized by reduced profitability, will inevitably pressure the FBRâ€™s revenue projections in the coming quarters, further widening the fiscal gap. Compounding these issues, Pakistanâ€™s economic growth has decelerated, with inflation and GDP projections both trending downward. This economic slowdown reduces the tax base, challenging the FBRâ€™s ability to meet its revenue goals. In response, the FBR is reportedly contemplating various revenue-enhancing measures aimed at bridging the tax deficit. These may include stringent enforcement protocols, incentives for retailers to formalize, leveraging import revenue, and increasing large-scale manufacturing (LSM) contributions. Despite the shortfall, the FBR saw a notable uptick in income tax collections, which reached Rs 1,230 billion, surpassing the target of Rs 1,098 billion for the first quarter. However, sources within the FBR clarified that the bureau has refrained from withholding refunds as a means to artificially inflate revenue. In fact, under direct orders from the FBR Chairman, all pending Sales Tax Refund Payment Orders for exporters, totaling Rs 32 billion and processed through the â€œFasterâ€ system as of September 30, 2024, were released on November 1. As the fiscal year unfolds, the FBR is under pressure to balance revenue collection targets with the need to support a sluggish economy. The boardâ€™s strategy will need to be both agile and robust, as it seeks to reconcile ambitious tax goals with a weakened corporate sector and a contracting economic landscape.

Date: 2024-11-04

Details: LAHORE: After years of struggling with errors in tax assessments, Pakistani taxpayers are embracing a simplified rectification process under Section 57 of the Sales Tax Act, 1990. This change has brought significant relief to businesses, saving them from lengthy disputes and financial losses, said sources from the Regional Tax Office (RTO) of the Federal Board of Revenue (FBR). They said the rectification process allows taxpayers to correct errors within a 5-year time limit, including those beyond arithmetical or clerical mistakes. Authorities, including the Officer of Inland Revenue, Commissioner, Commissioner (Appeals), or Appellate Tribunal, can initiate rectification. Pakistanâ€™s tax system reforms continue, with this development paving the way for a more business-friendly environment. This welcome change demonstrates the governmentâ€™s commitment to facilitating taxpayers and promoting economic growth. With the simplified rectification process, taxpayers can focus on growing their businesses rather than navigating complex tax disputes. As Pakistan strives for economic growth, this development is a crucial step toward creating a more efficient and transparent tax system. Taxpayers are optimistic about the future, thanks to this simplified process. As one Anjum Ali puts it, â€œWe can now concentrate on expanding our business, knowing that errors can be rectified efficiently,â€ he said, adding that the rectification process under Section 57 has brought hope to Pakistani taxpayers, promising a brighter future for businesses and the economy. When contacted tax practitioners, they welcomed the development, saying, â€œThis change is a game-changer. Previously, even minor errors would lead to prolonged disputes, affecting our business cash flow.â€ The rectification process, expanded in 2013, allows taxpayers to correct mistakes â€œapparent from the recordâ€ reducing disputes and saving businesses from unnecessary financial burdens. One small businessman recalled facing a Rs500,000 penalty due to a clerical error. â€œIf this process existed then, I wouldnâ€™t have lost sleep over it,â€ he said. Industry experts hail this development as a significant step forward, promoting transparency and trust between taxpayers and authorities. According to tax consultant Jawad Ahmed, â€œThis simplified process reduces disputes and litigation, resolves errors faster, increases transparency, and protects taxpayersâ€™ substantive rights.â€ For taxpayers like Ali and Khan, this change means less stress and anxiety, less time and resources, and improved financial stability. Copyright Business Recorder, 2024

Date: 2024-11-03

Details: Islamabad, November 3, 2024 â€“ The Federal Tax Ombudsman (FTO) has formally directed the Federal Board of Revenue (FBR) to establish a standardized operating procedure (SOP) for taxpayers affected by blocked mobile phone SIMs, ensuring clear guidelines for their reactivation. In a proactive move, the FTO launched an investigation after discovering that the FBR had recently blocked SIMs for over 506,671 individuals. This action, carried out under Section 114B of the Income Tax Ordinance, 2001, was enforced through Income Tax General Order (ITGO) No. 1/2024, issued on April 29, 2024. The order mandates the blocking of SIMs for taxpayers who do not appear on the Active Taxpayers List (ATL), ostensibly as a measure to enforce compliance with tax filing requirements. However, the order does not specify a procedure for reactivating the SIMs of individuals who regain active taxpayer status. Upon investigating complaints from affected taxpayers, the FTO found multiple instances of blocked SIMs despite compliance with ATL requirements. Several taxpayers reported that their SIMs remained inactive even after filing returns and paying the necessary surcharge for ATL listing. This lack of a clear reactivation process has placed a burden on taxpayers and created operational ambiguity. The absence of an SOP to guide taxpayers on restoring blocked SIMs has amplified frustrations among individuals who have adhered to FBRâ€™s tax compliance requirements. Following these complaints, the FTO initiated an investigation into the FBRâ€™s processes, particularly scrutinizing the effectiveness and transparency of the measures associated with SIM blocking. The FTO issued hearing notices to FBR representatives; however, the Member IR Operations did not participate in the investigation. Instead, FBR responded with a written statement, arguing that the FTOâ€™s intervention over blocked SIMs extended beyond its jurisdiction. According to FBR, the SIMs were blocked following a vetting process with chief commissioners, who identified these taxpayers as non-filers. Furthermore, the FBR clarified that notices had been sent to taxpayers, urging them to file their income tax returns. Individuals who failed to comply with these notices were subsequently included in the ITGO list, resulting in the blocking of their SIMs. FBRâ€™s response also emphasized that responsibility for SIM reactivation rests primarily with the Ministry of Information Technology (IT) and the Pakistan Telecom Authority (PTA). Before implementing the ITGO, the FBR engaged in discussions with the Ministry of IT, PTA, and telecom operators to develop a mechanism for reactivating blocked SIMs. However, while the FBR indicated that delays in reactivation are generally minimal, it acknowledged that specific cases might encounter delays. After reviewing FBRâ€™s written response, the FTO observed that, despite its collaboration with the Ministry of IT, the FBR has not outlined a defined SOP for reactivation requests. Instead, the ITGO only specifies that blocked SIMs remain inactive until reactivation is authorized by either the Commissioner IR or the FBR. This lack of procedural clarity, the FTO noted, constitutes maladministration, as it fails to address taxpayersâ€™ concerns adequately and transparently. In response, the FTO has urged the FBR to establish and implement an SOP to streamline the reactivation of blocked SIMs. This SOP should clarify the steps required for affected individuals to regain SIM functionality, ensuring that compliant taxpayers are not unduly penalized. By establishing a transparent and efficient reactivation process, the FBR can address taxpayer grievances more effectively and prevent further complications arising from procedural ambiguity. The FTOâ€™s directive aims to ensure that the FBR adopts a structured approach to handling blocked SIMs, mitigating the operational inconsistencies that have affected taxpayers. With a formalized SOP in place, taxpayers will benefit from a more straightforward process, reducing the administrative burdens and delays they currently experience.

Date: 2024-11-03

Details: Lahore, November 3, 2024 â€“ The Punjab Revenue Authority (PRA) is expanding its footprint to enhance accessibility and streamline tax collection across Punjab. Announcing the operationalization of additional offices, the PRA spokesperson revealed that this move is part of a strategic initiative to enhance taxpayer services and optimize revenue collection in the province. The recent notification confirms that PRA offices in Kasur and Sheikhupura are now fully functional, while the Bahawalpur office, activated a few months prior, continues to operate effectively. These new offices aim to decentralize the PRAâ€™s services, offering a closer point of contact for residents in these regions. According to the PRA spokesperson, Enforcement Officers Aqil Sardar and Umar Munir have been appointed to lead operations in the newly inaugurated offices of Kasur and Sheikhupura, respectively, ensuring that the tax processes are managed efficiently and in accordance with provincial goals. In addition to Kasur, Sheikhupura, and Bahawalpur, the PRA has outlined plans to establish offices in nine more districts. The Authority is actively working to set up centers in Murree, Okara, and Jhelum, with other locations to be disclosed in the coming months. These expansions aim to provide taxpayers with greater ease of access and to address localized tax concerns more effectively. Highlighting the broader objectives behind this expansion, the spokesperson explained that the PRAâ€™s long-term goal is not only to improve taxpayer convenience but also to bolster the revenue base significantly. She emphasized that the presence of PRA offices in these newly added districts would streamline tax collection by reducing logistical barriers and enhancing compliance. This decentralized approach aligns with the PRAâ€™s overarching strategy to achieve substantial growth in tax revenues, which are crucial for funding public services and development initiatives across Punjab. By facilitating direct engagement with taxpayers, the Authority hopes to foster a sense of responsibility and transparency among individuals and businesses. The spokesperson elaborated that this initiative is one of several measures being implemented by the PRA to boost revenue collection through improved taxpayer support. Expanding the PRAâ€™s presence across additional districts allows the organization to address taxpayer concerns promptly and to offer guidance on compliance, fostering a proactive tax culture throughout Punjab. The PRAâ€™s expansion is thus set to play a pivotal role in the provinceâ€™s economic strategy, enhancing revenue generation while creating a more accessible and responsive tax environment.

Date: 2024-11-03

Details: Karachi, November 3, 2024 â€“ The Federal Board of Revenue (FBR) has issued a streamlined procedure for taxpayers seeking income tax refunds under the Income Tax Ordinance, 2001. In a detailed announcement, the FBR outlined the steps required to apply for refunds under Section 170 of the ordinance, providing clarity for taxpayers who have paid more tax than what they owe. Section 170 of the ordinance states that any taxpayer who has overpaid their tax obligations can apply for a refund from the Commissioner of Income Tax. Specifically, if a taxpayer has paid tax beyond the amount chargeable under the law, they are eligible to request reimbursement for the excess. Additionally, those who have repaid advances or loans previously treated as dividends may also claim a refund on any tax paid on such amounts. To initiate the refund process, taxpayers must submit an application in a prescribed form, verified according to specified guidelines. The FBR mandates that refund applications be filed within three years of either the issuance of the assessment order or the payment date of the tax in question, whichever is later. Once an application is received, the Commissioner will assess whether a tax overpayment has indeed occurred. Upon confirming the excess, the Commissioner will first apply the surplus towards reducing any other tax liabilities under the Income Tax Ordinance. Any remaining balance will be used to settle other outstanding tax obligations, with the remainder, if any, refunded to the taxpayer. The Commissioner is required to issue a written decision on the refund request within 60 days of receiving the application, after giving the taxpayer an opportunity to be heard. Taxpayers dissatisfied with the Commissionerâ€™s decision or who face delays beyond the stipulated timeframe may appeal under Part III of the ordinanceâ€™s relevant chapter. In a further development, the FBR has also outlined an automated refund mechanism under Section 170A. Starting from the 2021 tax year, the FBR may electronically process and issue refunds directly to taxpayers who have filed their income returns without requiring a separate refund application. Refund amounts verified by the FBRâ€™s computerized system will be automatically transferred to the taxpayerâ€™s registered bank account. This automated approach under Section 170A marks a significant step towards enhancing efficiency in Pakistanâ€™s tax administration, reducing procedural delays, and ensuring timely refunds for compliant taxpayers. By introducing these new guidelines, the FBR aims to streamline the refund process, support taxpayer convenience, and improve compliance across the country.

Date: 2024-11-02

Details: LAHORE: The tax departmentâ€™s automatic selection of tax returns for audit has come under scrutiny, with critics labelling it a misuse of authority. Section 214D of the tax ordinance has been deemed â€œcoerciveâ€ and even â€œdraconianâ€ due to its stringent measures to ensure timely filing of returns. Taxpayers who default on filing within the stipulated period are automatically subject to audit under Section 177, imposing a significant burden. It may be noted that the audit requirements outlined in Section 177 are broad and onerous, placing an undue weight on taxpayers. This has led to numerous legal disputes and controversies, with the courts frequently intervening. Normally, selection for audit follows a rigorous process, involving various statutory filters outlined in Federal Board of Revenue circulars. However, the tax departmentâ€™s automatic selection process bypasses these safeguards, raising concerns about fairness and transparency. Taxpayers are worried about the arbitrary nature of the audit selection process. With the tax departmentâ€™s increased scrutiny, even small discrepancies can trigger an audit, causing undue stress and financial burdens. Experts urge the tax department to revisit its audit selection process, ensuring it is fair, transparent, and in line with statutory guidelines. By doing so, the department can alleviate taxpayersâ€™ concerns and promote a more positive relationship between taxpayers and the government. Pakistanâ€™s tax practitioners are united in their criticism of the tax departmentâ€™s automatic audit selection process under Section 214D of the Tax Ordinance. Experts deem the practice â€œunfairâ€, â€œcoerciveâ€, and â€œcontrary to legislative intentâ€. Ali Ahmed, a tax lawyer said, â€œAutomatic audit selection bypasses statutory filters, allowing the tax department to harass taxpayers. This draconian measure imposes undue stress and financial burdens on businesses.â€ Muhammad Suleiman, another lawyer, maintained that Section 214Dâ€™s broad language enables arbitrary audit selections. Taxpayers are left vulnerable to discretionary decisions, undermining the principle of fairness in tax administration. â€œThe tax departmentâ€™s aggressive policies create a climate of fear. Taxpayers are reluctant to comply due to the risk of unwarranted audits. This approach hampers voluntary compliance and fosters distrust,â€ he added. Pakistanâ€™s tax community demands change, advocating for a fair and equitable tax administration system. Copyright Business Recorder, 2024

Date: 2024-11-01

Details: Islamabad, November 1, 2024 â€“ The Federal Board of Revenue (FBR) announced on Friday the transfer and posting of 35 senior officers of the Pakistan Customs Service (PCS) in BS-19 and BS-20. The reshuffling aims to streamline operations and improve management within the Customs Service, ensuring strategic placement of experienced officers in key positions nationwide. According to Notification No. 2778-C-I/2024, effective immediately, this realignment reflects FBRâ€™s commitment to enhancing customs operations, with officers reassigned to significant roles across Pakistan. Below is the list of few officers and their new postings: 1. Ashraf Ali (BS-20): Transferred as Collector, Collectorate of IOCO, Karachi, from his prior position as Director, Input Output Coefficient Organization (South), Karachi. 2. Ms. Azmat Tahira (BS-20): Appointed Director, Post Clearance Audit (Central), Lahore, from her previous role as Director, National Nuclear Detection Architecture (NNDA), Lahore. 3. Ms. Saima Aftab (BS-20): Now posted as Collector, Collectorate of IOCO, Lahore, transferred from the Directorate of Transit Trade, Lahore. 4. Fayaz Rasool (BS-20): Transferred as Chief, FBR HQ, Islamabad, from his prior post as Collector, Customs Appraisement, Port Muhammad Bin Qasim, Karachi. 5. Muhammad Tahir (BS-20): Assigned to Director, Post Clearance Audit (North), Islamabad, with additional responsibilities overseeing the Directorate General of Law & Prosecution, Islamabad. 6. Munib Sarwar (BS-20): Posted as Director, NNDA, Lahore, after serving as Director, Input Output Coefficient Organization (Central), Lahore. 7. Ms. Tayyeba Kayani (BS-20): Appointed Collector, Customs Airports, Lahore, formerly Director, Intelligence & Investigation, FBR, Lahore. 8. Muhammad Nayyer Shafiq (BS-20): Transferred as Collector, Customs Appraisement, Port Muhammad Bin Qasim, Karachi, from Collectorate of Customs Appraisement (East), Lahore. 9. Muhammad Saeed Watto (BS-20): Now Collector, Customs Enforcement, Lahore, transferred from Director, Intelligence & Investigation, FBR, Multan. 10. Ms. Ayesha Niaz (BS-20): Appointed as Collector, Customs Enforcement, Islamabad, with additional charge as Director, National Targeting Center, Islamabad, transferred from Chief, DRD & Exemptions, FBR HQ, Islamabad. FBR clarified that all officers currently receiving performance allowances will continue to draw this at their new postings. Officers are required to report their charge relinquishment and assumption to FBR immediately to facilitate seamless transitions. This strategic deployment is intended to ensure that customs operations remain efficient and responsive, aligning resources with FBRâ€™s long-term operational goals across key ports, enforcement areas, and investigation units.

Date: 2024-11-01

Details: Islamabad, November 1, 2024 â€“ The Federal Board of Revenue (FBR) issued a notification on Friday detailing a significant reshuffle among Inland Revenue Service (IRS) officers in grades BS-20 and BS-21. The changes affect numerous senior officers across various posts, aiming to optimize operations within the IRS. Below is the full list of the newly assigned roles: 1. Sajidullah Siddiqui (BS-21): Transferred to Member, Federal Board of Revenue (HQ), Islamabad, from Chief Commissioner, Large Taxpayers Office, Karachi. 2. Dr. Hamid Ateeq Sarwar (BS-21): Moved to Member, Inland Revenue Operations, FBR (HQ), Islamabad, from Member, IR-Policy, FBR (HQ), Islamabad. 3. Mir Badshah Khan Wazir (BS-21): Assigned as Member, Legal-IR Wing, FBR (HQ), Islamabad, previously Member, IR-Operations, FBR (HQ), Islamabad. 4. Dr. Muhammad Sarmad Qureshi (BS-21): Reassigned to Chief Commissioner Inland Revenue, Regional Tax Office, Multan, from Chief Commissioner, Regional Tax Office I, Karachi. 5. Faheem Mohammad (BS-21): Appointed Chief Commissioner Inland Revenue, Regional Tax Office I, Karachi, from Chief Commissioner, Regional Tax Office, Sargodha. 6. Muhammad Tariq Arbab (BS-21): New Director General, Directorate General of Broadening of Tax Base, FBR (HQ), Islamabad, from Member, Legal-IR Wing, FBR (HQ), Islamabad. 7. Ishtiaq Ahmed Khan (BS-21): Transferred to Member, FBR (HQ), Islamabad, from Chief Commissioner, Large Taxpayers Office, Islamabad. 8. Najeeb Ahmad Memon (BS-20): Transferred to Member (OPS), Inland Revenue Policy, FBR (HQ), Islamabad, from Member (OPS), FBR (HQ), Islamabad. 9. Zubair Bilal (BS-20): Moved to Chief Commissioner Inland Revenue (OPS), Large Taxpayers Office, Karachi, from Chief Commissioner (OPS), Large Taxpayers Office, Lahore. 10. Sahibzada Abdul Mateen (BS-20): Assigned as Chief Commissioner Inland Revenue (OPS), Regional Tax Office, Bahawalpur, from Chief Commissioner (OPS), Medium Taxpayers Office, Karachi. 11. Sajjad Taslim Azam (BS-20): Appointed Chief Commissioner Inland Revenue (OPS), Large Taxpayers Office, Lahore, previously Chief Commissioner (OPS), Regional Tax Office, Multan. 12. Faridullah Jan Khan (BS-20): Transferred to Chief Commissioner Inland Revenue, Regional Tax Office, Sargodha, from Director General (OPS), Directorate General of Broadening of Tax Base, FBR (HQ), Islamabad. 13. Muhammad Khalid Malik (BS-20): Posted as Chief, FBR (HQ), Islamabad, from Chief Commissioner (OPS), Regional Tax Office, Hyderabad. 14. Aftab Alam (BS-20): Assigned as Chief Commissioner Inland Revenue (OPS), Medium Taxpayers Office, Karachi, from Chief Commissioner (OPS), Regional Tax Office, Bahawalpur. 15. Qazi Hifzur Rehman (BS-20): Transferred to Chief Commissioner Inland Revenue (OPS), Regional Tax Office, Hyderabad, from Commissioner, Zone-III, Large Taxpayers Office, Karachi. 16. Ahmad Kamal (BS-20): Appointed Director General (OPS) Sales Tax, FBR (HQ), Islamabad, from Chief Commissioner (OPS), Corporate Tax Office, Islamabad. 17. Zain-ul-Abidin Sahi (BS-20): Moved to Chief Commissioner Inland Revenue (OPS), Large Taxpayers Office, Islamabad, from Chief, Information Technology, FBR (HQ), Islamabad. 18. Hassan Zulfiqar (BS-20): Appointed as Chief Commissioner Inland Revenue (OPS), Corporate Tax Office, Islamabad, from Commissioner Inland Revenue, AEOI Zone, Islamabad. The FBR confirmed that officers currently receiving a performance allowance would continue to receive it at their new posts. The officers are expected to promptly submit charge Relinquishment/Assumption reports to the FBR upon taking or leaving their designated posts, ensuring smooth transitions and compliance with administrative procedures. This reshuffle underscores the FBRâ€™s commitment to enhancing the effectiveness and efficiency of tax operations in Pakistan, redistributing roles to meet evolving administrative and operational needs within the Inland Revenue Service.

Date: 2024-11-01

Details: Islamabad, November 1, 2024 â€“ The Federal Board of Revenue (FBR) released its Active Taxpayers List (ATL) on Friday, marking a pivotal shift in Pakistanâ€™s tax compliance framework. This yearâ€™s ATL reflects filings based on income tax returns for the fiscal year 2024, with approximately 5.34 million taxpayers now classified as active following timely submissions by October 31, 2024. The FBRâ€™s move to expedite the ATL publication, grounded in recent amendments via SRO 1638(I)/2024, is aimed at streamlining processes and improving compliance. Unlike previous years, when the ATL was issued annually in March, the latest amendments mandate its issuance immediately following the tax filing deadline. The new approach ensures a daily update to the ATL, enabling real-time reflection of compliance and affording taxpayers immediate recognition of active status upon fulfilling their obligations. â€œThis real-time update mechanism underscores FBRâ€™s commitment to enhancing operational transparency,â€ an FBR official stated. â€œThe adjustment allows the ATL to serve as a current and comprehensive reflection of the taxpayer base, offering an efficient and accurate system for all stakeholders.â€ Under this new system, taxpayers who file their Income Tax Returns (ITR) by the deadline, or within any granted extension, will see their status promptly updated to â€œactiveâ€ on the ATL. Those who file after the deadline can still be included, subject to payment of a surcharge stipulated under section 182A of the Income Tax Ordinance. This flexibility, paired with daily ATL updates, reflects FBRâ€™s focus on fostering an inclusive and responsive tax environment. The FBR has further bolstered its compliance drive by introducing stringent penalties for non-filers, set to be enforced following the ATL 2024 issuance. Harsh measures against those absent from the ATL will include actions such as the suspension of mobile phone SIM cards, disconnection of utilities, and restrictions on foreign travel for non-complaint citizens. These penalties are designed to prompt broader compliance while also signaling the FBRâ€™s determination to address tax evasion. While these restrictions will apply widely, exemptions have been put in place for certain groups, including holders of the National Identity Card for Overseas Pakistanis (NICOP), minors, students, and individuals traveling abroad for Hajj or Umrah. The new ATL framework signifies FBRâ€™s commitment to reinforcing Pakistanâ€™s tax system and ensuring timely recognition of compliant taxpayers. This proactive approach aims not only to streamline the tax system but also to enhance trust between the state and its taxpayers, contributing to greater fiscal stability in the country.

Date: 2024-11-01

Details: Karachi, November 1, 2024 â€“ The Federal Board of Revenue (FBR) has imposed a substantial tax demand against Bank Makramah, citing discrepancies in its financial reporting. According to the bankâ€™s recently published financial statement, the FBR has disputed various tax treatments applied by Bank Makramah, leading to huge tax demand, which the bank has challenged through appeals. The bank, which had submitted its Income Tax Returns up to the financial year ending December 31, 2023 (tax year 2024), revealed that the FBR disputed its tax assessments from as early as 2003, across various regions and former entities now consolidated under Bank Makramah. These amended assessments reflect the FBRâ€™s concerns regarding the bankâ€™s accounting of several key financial treatments. For assessments from tax years 2009 through 2023, the FBR issued an additional tax demand of Rs. 418.48 million. This demand, contested by the bank, was paid, stayed, or offset against available refunds. In a similar vein, for assessments related to Bank Makramahâ€™s AJK Region from tax years 2013 to 2017, the FBR issued a further Rs. 57.96 million in tax demands. Moreover, assessments concerning the legacy of ex-My Bank Limited, acquired by Bank Makramah, led to a disputed tax demand of Rs. 456.62 million for the tax years 2003 to 2011. An additional Rs. 89.74 million tax demand was also raised regarding ex-Atlas Bank Limited, now under Bank Makramah, for the years 2003 to 2010. Key issues cited in the amended assessments include disallowances of mark-up payables, reclassification of mutual fund distributions to corporate tax rates, disallowances of provisions for non-performing loans, adjustments of Head Office expenses, and allocation of expenses against dividend and capital gains income. These matters, still pending across various appellate forums, have led Bank Makramah to file appeals challenging the amended orders. Further complicating the matter is the introduction of SRO 1588(I)/2023, dated November 21, 2023, which designates banking companies as a sector under section 99D of the Income Tax Ordinance 2001, specifically affecting tax years 2022 and 2023. Bank Makramah, alongside other financial institutions, has legally contested this additional levy. The Sindh High Court, Islamabad High Court, and Lahore High Court have granted stay orders, suspending the application of this SRO, leaving the matter unresolved. Despite these substantial tax demands, Bank Makramahâ€™s management remains confident of a favorable outcome, and no financial adjustments or provisions have been made in its unconsolidated financial statements pending the appeal results.

Date: 2024-10-31

Details: ISLAMABAD: The Federal Board of Revenue (FBR) has removed from services Ghulam Mustafa, Inspector Customs, Collectorate of Customs Enforcement, Sargodha for illegal removal of goods with the help of smugglers from Customs Warehouse, D G Khan Division. According to a notification issued by the FBR on Wednesday, disciplinary proceedings were initiated under the Civil Servants (Efficiency & Discipline) Rules, 2020 against Ghulam Mustafa, on account of his involvement in illegal removal of goods from Customs Warehouse, D G Khan Division and replacement of goods from truck worth of Rs 76 million in connivance with smugglers. Accordingly, the accused officer was placed under suspension and an Order of Inquiry along with Charge Sheet and Statement of Allegations on the charges of â€œInefficiency, Misconduct & Corruptionâ€ under Rule: 3(a)(b)&(c) and Rule: 2(1)(h)&(k) of the Civil Servants (Efficiency & Discipline) Rules, 2020, were served upon the accused officer. Syed Ali Akbar Zaidi (PCS/BS-19) was appointed as Inquiry officer to scrutinize conduct of the accused officer. The Inquiry Officer furnished inquiry report and established the charges of â€œInefficiency, Misconduct & Corruptionâ€ and recommended imposition of major penalty of â€œReduction to a lower post and pay scale for a period of three yearsâ€ under Rule-4(3)(b) of the Civil Servants (E&D) Rules, 2020. Accordingly, a Show Cause Notice dated 02.07.2024 under Rule-16(6) of the Civil Servants (E&D) Rules, 2020 was served upon the accused officer. The accused officer prayed that no documentary evidences were provided to him by the Collectorate and raised some other issues pertaining to inquiry proceedings. Therefore, the Authority directed the DR to provide relevant documents to the accused within a period of one month positively. In compliance, the Collectorate provided the requisite relevant documents to the accused officer. During course of personal hearing, the Departmental Represen-tatives narrated the detail of the case and played audio recording conversations of the accused with the subordinate officer and smugglers. These audio recording had already been verified by the Forensic Lab as authentic. All documentary evidences established without any shadow of doubt, involvement of the accused in illegal removal of goods from Customs Warehouse DG Khan Division. The accused officer reiterated the points already raised in his reply to Show Cause Notice and could not offer anything new or any plausible grounds in his defence that was not already available on record. The Member (Admn/HR), FBR, being the Authority under Rule-2(1)(c) of the Civil Servants (E&D) Rules, 2020, in this case, has gone through the available record, facts of the case, findings/recommendations of the Inquiry Officer, arguments put forth by the representatives of the Collectorate and accused officer during the course of personal hearing, is of the considered opinion that the accused officer miserably failed to prove his innocence. Hence, the accused officer is found guilty of â€œInefficiency, Misconduct & Corruptionâ€, therefore, the Authority did not agree with the recommendation of inquiry officer and has decided to impose a major penalty of â€œRemoval from Serviceâ€ upon Ghulam Mustafa, Inspector Customs (BS-16/under suspension) under Rule: 4(3)(d) of the Civil Servants (E&D) Rules, 2020. Copyright Business Recorder, 2024

Date: 2024-10-31

Details: LAHORE: In a brazen display of disregard for the law, taxpayers in Pakistan continued to defy the Federal Excise Act of 2005, despite clear amendments aimed at curbing tax evasion, said sources. They said the controversy centred around Section 3A, introduced through the Finance Act 2007, empowering the federal government to levy special excise duty on locally produced and imported goods. According to the sources, the legislative journey began with a bill introduced in the National Assembly, passed on June 22, 2007, and ratified by the President on June 30, 2007. The Finance Act 2007 was subsequently published in the official gazette, making Section 3A effective from July 1, 2007. However, they added, taxpayers remained recalcitrant, refusing to comply with the amended law. They contested the vires of Section 3A and the accompanying notification, issued by the federal government. The dispute landed in the courts, where taxpayers argued that the special excise duty was unconstitutional and excessive. As the legal battle raged on, said the sources, taxpayers continued to flout the law, evading taxes and undermining the governmentâ€™s revenue collection efforts. The government, determined to enforce the law, persisted in its efforts to recover the due taxes. The standoff highlighted the cat-and-mouse game between taxpayers and tax authorities. While the government sought to plug revenue loopholes, taxpayers exploited every available loophole to avoid paying their fair share. The sources said the implications were far-reaching, which included reduction in government revenue, inequitable distribution of tax burden, and encouragement to tax evasion. They added that the episode underscored the need for stricter tax compliance measures and increased public awareness about the importance of contributing to the national exchequer. They have further emphasized that taxpayers must respect the law and contribute to national revenue. Moreover, they said, the government must ensure effective tax administration and enforcement and continuous legislative refinements are necessary to address emerging tax evasion tactics. According to some tax practitioners, the saga served as a reminder that tax compliance is crucial for a nationâ€™s economic well-being, and disregard for the law would only perpetuate an unjust system. Copyright Business Recorder, 2024

Date: 2024-10-31

Details: PESHAWAR: As the wedding season kicks off and winter approaches, the Khyber Pakhtunkhwa Revenue Authority (KPRA) has launched a targeted monitoring and enforcement drive in wedding halls and restaurants across the province. The initiative, directed by KPRAâ€™s Director General Fauzia Iqbal, aims to enhance tax compliance within these sectors during this peak business period. Teams of KPRA are conducting visits to wedding halls and restaurants in Peshawar and other districts to check records and educate management on sales tax on services. The teams are also issuing instructions to ensure that the management of the businesses pay their sales tax on services based on their actual sales, avoid tax evasion and underreporting, and submit their monthly sales returns on time. According to a statement from KPRAâ€™s communication wing, the campaign aims to enhance tax compliance in these sectors due to the increase in business activities in restaurants with the approach of winter and the onset of the wedding season in the region. Teams comprising KPRA officers, including assistant collectors and inspectors, have been tasked with visiting wedding halls and restaurants as part of this special drive to improve compliance through in-person visits and to provide on-the-spot support to management by addressing their issues directly. Director General KPRA, Fauzia Iqbal, highlighted in her statement that the timely payment of sales tax on services is essential for a financially self-reliant Khyber Pakhtunkhwa. â€œWe urge taxpayers and the business community to pay their taxes on time, submit their returns regularly, and play their role in the development of our country,â€ she stated. To make tax compliance easier for wedding halls, KPRA has introduced a fixed tax regime alongside the percentage-based system. Under this new regime, wedding halls have been categorized based on their sizes, with a fixed tax applied to each category. This tax is to be collected from clients on a per-event basis and deposited directly into KPRAâ€™s account. Fouzia Iqbal emphasized that KPRA is committed to making the tax payment process simpler and more accessible. â€œOur teams are here to guide taxpayers and are actively reaching out to provide assistance,â€ she assured. Copyright Business Recorder, 2024

Date: 2024-10-31

Details: Under the direction of the Chairman FBR and as part of FBR's comprehensive digitalization efforts to optimize tax administration and boost revenue collection, FBR has launched an advanced Stock Register system via the Information Center 2.0 platform. This robust digital infrastructure grants tax officers real-time, in-depth access to registered personsâ€™ data, bolstering transparency and securing compliance with Income Tax (IT) and Sales Tax (ST) regulations. The Stock Register within Information Center 2.0 functions as a sophisticated management information and reporting system, empowering tax officers to securely retrieve detailed stock data to facilitate precise tax assessments and mitigate the risk of tax evasion. The system centralizes taxpayer profiles, offering thorough views of IT & ST filing histories, summaries, and authorized representative profiles. This integrated access is further strengthened by tax and declaration comparisons, providing comprehensive oversight capabilities. By meticulously recording stock movements capturing essential details such as quantities, valuations, and transaction dates, the system enables tax officers to enforce regulatory compliance and validate accurate stock and compliance reports. The Information Center 2.0 portal enhances FBRâ€™s capacity to strengthen the national exchequer. The platform integrates diverse data streams, including ST annexures, Customs import details, and reports on taxpayers as withholdees and withholding agents, establishing an efficient and holistic framework for tax oversight. Accessible exclusively through the IRIS tax officers' platform at FBR field formations, Information Center 2.0 features advanced filters and search functionalities, enabling swift data retrieval to support compliance and precise assessments. This initiative, aligned with FBRâ€™s commitment to modernization, represents a pivotal advancement in tax collection efforts, striking a balance between efficient revenue generation and sustaining economic growth. It fosters robust reporting, minimizes tax evasion, and strengthens resource and financial management across the business landscape, ensuring adherence to tax regulations through a centralized and transparent data ecosystem.

Date: 2024-10-30

Details: Karachi, October 30, 2024 â€“ In a recent appeal to Prime Minister Shehbaz Sharif, the Pakistan Tax Bar Association (PTBA) has called for urgent intervention to resolve the ongoing federal-provincial tax disputes that have created significant uncertainty and administrative burdens for compliant taxpayers. In a letter addressed to the Prime Minister, PTBA President Anwar Kashif Mumtaz highlighted the detrimental impact these conflicts have on businesses, investors, and the economy at large. Since the devolution of sales tax on services to the provinces under the 18th Amendment to the Constitution, disagreements have erupted between the federation and provincial governments regarding the rightful collection of taxes on services. According to the PTBA president, these disputes extend beyond sales tax on services to include issues such as the Workers Welfare Fund (WWF), toll manufacturing, and distribution business taxes. The PTBA noted that these disagreements have led to an environment where both provincial and federal authorities attempt to assert their right to collect taxes, often imposing double taxation on businesses. â€œCompliant taxpayers are bearing the brunt of these disputes, facing burdensome tax compliance requirements and the threat of double taxation,â€ Mumtaz stated in the letter. â€œThe resultant litigation has ended up in court, where it has languished for years, adding significant costs to businesses and portraying Pakistan unfavorably to potential investors.â€ The PTBA underscored that the current tax structure has led to overlapping jurisdictions, with both provincial and federal authorities struggling to clearly delineate their boundaries. This confusion has exacerbated the challenges businesses face in forecasting tax obligations, rendering tax planning precarious and discouraging investment. The government established the National Tax Council (NTC) to address these issues; however, the PTBA expressed concern over its sluggish progress. Although several meetings have been held, tangible progress remains limited, with only the issue of toll manufacturing resolved so far, giving provincial authorities the right to collect this tax. Other critical issues remain unresolved, casting doubt on the NTCâ€™s effectiveness in fostering cooperation between federal and provincial tax bodies. The PTBA has urged the Prime Minister to direct the NTC to expedite its work and to prioritize the establishment of a unified tax framework. Such a framework would encompass a single sales tax return, simplifying compliance for businesses and reducing the likelihood of double taxation. â€œA single, streamlined tax return would ease compliance burdens and reduce the exposure of businesses to conflicting regulations,â€ the PTBA suggested, adding that this measure would instill confidence among local and foreign investors, potentially revitalizing economic growth. In his letter, Mumtaz emphasized that the trust deficit among taxpayers can only be bridged if the government demonstrates its commitment to creating a transparent and predictable tax environment. He further called for â€œdecisive actionâ€ to mitigate these issues, stating that a coordinated tax policy would significantly improve Pakistanâ€™s business environment. The PTBAâ€™s appeal to the Prime Minister comes at a crucial time, as Pakistan faces challenges in attracting foreign investment and maintaining economic stability. By prioritizing the resolution of tax jurisdiction conflicts, the government could alleviate pressures on taxpayers, create a more investor-friendly environment, and enhance revenue collection efficiency for both federal and provincial governments.

Date: 2024-10-30

Details: Islamabad, October 30, 2024 â€“ In a landmark step towards promoting a more inclusive and supportive work environment for women, the Federal Board of Revenue (FBR) has issued directives to establish day care centers across all its field formations by November 1, 2024. This initiative aligns with the Prime Ministerâ€™s Women Empowerment Package 2024, which aims to facilitate working mothers in the public sector. An official memo from the FBR circulated on October 30, 2024, underscored the importance of this directive and urged all chief commissioners of Inland Revenue, chief collectors of Pakistan Customs, and Director Generals to prioritize this measure. The initiative is a major component of the Women Empowerment Package announced earlier this year on International Womenâ€™s Day. The package emphasizes womenâ€™s right to an accommodating and supportive work environment, which includes the establishment of day care facilities across public sector entities and a flagship day care center within the Pakistan Secretariat. The Prime Ministerâ€™s Women Empowerment Package 2024 reflects the governmentâ€™s dedication to enhancing gender equality and supporting womenâ€™s full participation in the workforce. This package encompasses a wide range of measures, including the creation of flexible work options, the establishment of safe workplace environments, and now, the setting up of day care centers to assist working mothers. By doing so, the government hopes to alleviate the challenges many women face when balancing work responsibilities with family obligations. In a statement, the FBR highlighted that the establishment of day care centers will not only benefit women employees but will also foster a more productive and inclusive work environment. Women currently comprise a significant proportion of the workforce in various public sector roles, including at the FBR. Ensuring the availability of day care facilities near their workplaces is expected to ease their concerns and improve their focus and commitment to work. The FBR Chairman, in his directive, emphasized the importance of implementing this order promptly, urging all field formation heads to make the necessary arrangements by the November 1 deadline. The urgency of this deadline reflects the FBRâ€™s commitment to making immediate progress in supporting women employees. This step marks an important move towards closing gender gaps within Pakistanâ€™s public sector, paving the way for a more inclusive workplace culture that values and supports womenâ€™s contributions. The establishment of day care facilities will not only benefit the employees but also contribute to a stronger, more balanced workforce across the nationâ€™s public sector.

Date: 2024-10-30

Details: Islamabad, October 30, 2024 â€“ The Federal Board of Revenue (FBR) has raised significant concerns over the Khyber Pakhtunkhwa (KP) governmentâ€™s recent imposition of a 2% Infrastructure Development Cess (IDC) on exports. In a statement to the Senate, the FBR highlighted potential repercussions of the cess on Pakistanâ€™s export competitiveness, a stance echoed by the Pakistan Business Council (PBC). The KP government imposed this 2% IDC on export consignments via air, road, or rail through Section 3(c) of the Khyber-Pakhtunkhwa Infrastructure Development Cess Act, 2022. This cess, effective since August 23, 2024, applies to goods exported from KPâ€™s border posts, notably those transiting to Afghanistan. According to the FBR, this levy, while legal under provincial powers, could hinder Pakistanâ€™s export potential by adding financial burdens on exporters. Federal laws authorize the Federation to impose taxes and duties on imports and exports, while provinces can levy taxes on goods and services produced within or transported through their jurisdictions. In the case of exports, however, the FBR argues that imposing additional charges could undermine foreign exchange inflows. The FBR emphasized that no duties or taxes are generally levied on exports to avoid discouraging foreign trade, a critical source of revenue for Pakistan. A substantial portion of KPâ€™s exports is routed to Afghanistan, a key trade partner. Imposing an additional 2% cess on exports through KPâ€™s border posts could adversely affect trade with Afghanistan and Central Asia, which Pakistan is actively working to expand as part of its broader export growth strategy. The PBC warns that this increased cost may deter traders from choosing Pakistan as a transit route, jeopardizing the growth of regional trade and diminishing Pakistanâ€™s foothold in Central Asian markets where demand differs from traditional export destinations. Currently, the cess is not collected by Pakistan Customs but by banks on behalf of the provincial government. However, the FBR and PBC have both called on the federal government to intervene, urging a removal of this IDC for the sake of export competitiveness. The PBC further suggested that a formal agreement among all provinces, facilitated through the Council of Common Interests, could standardize exemptions on export-related provincial levies to foster national trade objectives. As Pakistan faces mounting economic challenges, maintaining competitive export markets is critical to its financial stability. For KP, while the IDC could generate revenue, the FBR and PBC caution that it may have the unintended effect of limiting the provinceâ€™s economic integration with neighboring markets. In the context of growing regional competition, particularly from neighboring countries expanding trade in Central Asia, the export cess may ultimately disadvantage Pakistanâ€™s economic ambitions.

Date: 2024-10-30

Details: Islamabad, October 30, 2024 â€“ In a move aimed at aligning property values with actual market rates, the Federal Board of Revenue (FBR) has revised the valuations of immovable properties across Pakistan, significantly impacting withholding tax collection. This comprehensive adjustment, effective from November 1, 2024, marks an upward revision of up to 75% in the values of properties in 56 cities, with new valuations meticulously outlined for residential, commercial, and industrial sectors. After extensive deliberations with key stakeholders, including developers and builders, the FBR issued notifications late Tuesday. The adjustment is backed by Section 68(4) of the Income Tax Ordinance, 2001, authorizing the FBR to set fair market values for properties across specified areas and categories. The new valuation tables, vetted by the Law and Justice Division, underscore the FBRâ€™s intensified efforts to bring assessed property values closer to prevailing market rates. This adjustment, the fifth in a series since 2018, follows previous valuations set in 2018, 2019, 2021, and 2022. Unlike last year, when valuations remained unchanged, the current recalibration underscores the FBRâ€™s resolve to enhance tax revenue while discouraging under-declaration of property values. This increment aims to diminish the discrepancies between the official valuations and actual market prices, fortifying transparency in Pakistanâ€™s real estate sector. The upward valuation extends across a broad spectrum of Pakistani cities, encompassing major urban centers such as Islamabad, Karachi, Lahore, Quetta, and Peshawar, as well as smaller cities like Attock, Gujrat, Mansehra, Sargodha, and Toba Tek Singh. The newly notified values distinguish between residential, commercial, and industrial properties, reflecting unique market conditions in each segment. The enhanced valuation tables, finalized after extensive feedback from the construction and real estate industries, represent a progressive yet cautious recalibration, factoring in the reservations of developers and property stakeholders. While some areas see modest increases, other high-value urban centers face a marked rise, with valuations now closely paralleling 75% of market rates. The FBRâ€™s revision aligns with the Federal Tax Ombudsmanâ€™s recent directive, which had set an October 11, 2024, deadline for updating immovable property values. As the new valuations come into effect, the real estate industry anticipates varied impacts. Developers and investors face higher tax liabilities, yet these adjustments are seen as a critical step toward a more transparent and equitable taxation system. This landmark revision reinforces the FBRâ€™s commitment to fostering greater financial accountability within Pakistanâ€™s property sector, ensuring that property valuations better reflect the realities of a dynamic real estate market. The new valuations are expected to play a pivotal role in reshaping the tax landscape, directly impacting the economy and bringing Pakistan one step closer to bridging gaps in tax revenue collection.

Date: 2024-10-29

Details: ISLAMABAD: Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to instruct Member-IR (Operations) to issue a Standing Operating Procedure (SOP) for guidance of the aggrieved taxpayers (non-filers) for reactivation of blocked mobile phone Sims. According to an order of the FTO issued on Monday, Chairman FBR should also call for the explanation of the officer concerned for not attending the hearings on due dates. While investigating various complaints, it was observed that recently, the SIMs of 506,671 taxpayers have been blocked by FBR under section 114B of the Income Tax Ordinance, 2001 (the Ordinance), vide Income Tax General Order (ITGO) No. 1/2024 on account of Inactive Taxpayers. However, the referred ITGO does not prescribe any SOP regarding reactivation of SIMs. It only mentions that the SIMs of these will remain blocked until ordered by Commissioner or FBR. Similarly, while investigating Complaint No. 5785/ISB/IT/2024, the SIM of a taxpayer was blocked despite being on the Active Taxpayersâ€™ List. Moreover, instances have been reported wherein the SIMs have not been reactivated even after the taxpayers have fulfilled requirements for being on ATL and filed tax return along with surcharge for ATL. Whereas, no written SOPs are available as to how the SIMs of a taxpayer will be reactivated once he becomes an active taxpayer on FBR portal. In view of above an own motion investigation was initiated on account of SIMs having been blocked by FBR for being â€˜Inactive Taxpayerâ€™ creating hardships for taxpayers. It is evident that the law does not prescribe any SOP regarding reactivation of SIMs nor does the ITGO dated 29.04.2024 lay down any procedure for the aggrieved person to applying for reactivation of his blocked SIM. It only mentions that the SIMs of these will remain blocked until ordered by Commissioner IR or FBR. Therefore, it is observed that no SOP has been laid down by the Board for guidance of the aggrieved taxpayers. Therefore, these inconsistencies, infirmities and deficiencies stated above constitute maladministration in terms of section 2(3)(ii) of the FTO Ordinance, 2000. It is further observed that the IR (Operations Wing) was issued hearing notices twice but no one attended hearing on fixed dates. This serious neglect on the part of the IR wing (Operations) shows inefficiency in discharge of duties which constitutes maladministration in terms of section 2(3)(ii) of the FTO Ordinance, FTO order added. Copyright Business Recorder, 2024

Date: 2024-10-29

Details: Karachi, October 29, 2024 â€” The Federal Board of Revenue (FBR) reported a 15% decline in tax collection on cash withdrawals in the first quarter (Q1) of the fiscal year 2024-25, highlighting the effects of an aggressive return-filing drive. Data of a leading tax collecting arm of the FBR shows that advance tax on cash withdrawals totaled PKR 2.45 billion from July to September 2024, down from PKR 2.90 billion in the corresponding quarter of the previous fiscal year. FBR sources indicate that the decreased collection is attributed largely to an expanded campaign encouraging non-filers to submit tax returns. This drive has reportedly shifted many individuals and businesses into filing status, thus exempting them from the advance tax on cash withdrawalsâ€”a measure designed to incentivize compliance. The advance tax on cash withdrawals remains a significant revenue stream for the FBR. This tax is applicable only to individuals and businesses not appearing on the Active Taxpayersâ€™ List (ATL). To widen the tax base and counter evasion, the FBR reintroduced this tax after a two-year hiatus. Originally, the advance tax on cash withdrawals was mandated under Section 231A of the Income Tax Ordinance. However, in 2021, the provision was removed. Through the Finance Act of 2023, the FBR reintroduced the tax under the newly added Section 231AB, effective for the fiscal year 2023-24 onward. Under Section 231AB, banks are required to deduct an adjustable 0.6% tax on cash withdrawals from individuals whose names do not appear on the ATL if daily withdrawals exceed PKR 50,000. The cumulative limit ensures that even multiple smaller transactions that surpass this threshold within a single day are subject to the tax, reinforcing the push for tax compliance. The FBRâ€™s decision to revive this tax and couple it with its expansive return-filing initiative reflects a dual-pronged strategy. On one hand, it provides a disincentive for cash-heavy transactions from non-compliant individuals, and on the other, it encourages taxpayers to file returns, thus widening the tax net. FBR officials emphasize that while the drop in collection from this source could appear counterproductive at a glance, the broader success of the return-filing campaign is expected to bring long-term benefits to revenue generation. Increased compliance will ultimately contribute to a more robust tax base, which is crucial for achieving sustainable revenue growth. Looking ahead, the FBR aims to continue refining its policies to balance immediate revenue requirements with the long-term goal of fostering a compliant and transparent economic landscape.

Date: 2024-10-29

Details: Karachi, October 29, 2024 â€” The Government of Pakistan has formally recognized the remarkable contributions of Sajidullah Siddiqui, a BS-21 officer of the Inland Revenue Service (IRS), who is set to retire in March 2025. Siddiqui, currently serving as Chief Commissioner at the Large Taxpayers Office (LTO) in Karachi, has been commended for his outstanding dedication and impact on Pakistanâ€™s revenue generation and tax administration. In an official memorandum, the Federal Board of Revenue (FBR) expressed profound gratitude for Siddiquiâ€™s tireless service over decades. The document stated that on reaching the age of superannuation, Sajidullah Siddiqui, IRS/BS-21, would retire from government service effective March 27, 2025. The statement continued, â€œThe Government of Pakistan expresses its appreciation for the services rendered by Sajidullah Siddiqui and wishes him health and success in his future endeavors.â€ Sajidullah Siddiquiâ€™s career has been marked by his dedication to enhancing transparency and efficiency within Pakistanâ€™s tax system. His extensive experience across multiple roles within the FBR has contributed significantly to streamlining tax processes, reducing bureaucratic delays, and encouraging compliance. Moreover, Siddiquiâ€™s expertise in international taxation has been a considerable asset to Pakistan, enabling the country to better navigate the complexities of cross-border revenue issues. Currently heading the Large Taxpayers Office in Karachiâ€”known informally as the â€œmini FBRâ€ due to its substantial contribution to national tax revenueâ€”Siddiqui oversees one of the most crucial arms of Pakistanâ€™s tax collection system. His leadership at LTO has fortified tax compliance and transparency, bolstering the officeâ€™s role as a critical source of revenue for the state. Colleagues and tax professionals alike have acknowledged Siddiquiâ€™s exceptional service and expressed gratitude for his mentorship. â€œWorking with Sajidullah Siddiqui has been a privilege,â€ said one senior FBR official. â€œHis experience and guidance have been invaluable, not only in honing our tax procedures but in shaping the next generation of revenue officers.â€ Tax practitioners have also praised Siddiquiâ€™s acumen in resolving complex tax disputes efficiently, often averting prolonged litigation. His approach to tax enforcement and dispute resolution has fostered a more cooperative and responsive relationship between the FBR and Pakistanâ€™s business community. As Sajidullah Siddiqui nears retirement, his legacy within the FBR and the broader Pakistani tax system is both substantial and enduring. His efforts have left an indelible mark on the countryâ€™s fiscal landscape, and he will be remembered as a dedicated public servant who championed integrity, transparency, and efficiency in Pakistanâ€™s revenue administration.

Date: 2024-10-29

Details: Islamabad, October 29, 2024 â€” The Federal Board of Revenue (FBR) has issued a significant reshuffle of top Pakistan Customs Service (PCS) officials, transferring and posting 14 senior officers across key positions. The move, effective immediately, affects both BS-20 and BS-21 officers and is seen as an effort to streamline operations within Pakistanâ€™s customs administration. In a detailed notification, the FBR outlined the following new appointments: 1. Ms. Rabab Sikandar (Pakistan Customs Service/BS-21) â€“ Reassigned as Chief Collector of Customs Appraisement (Punjab), Lahore. Previously served as Chief Collector of Customs Enforcement (Punjab), Lahore. 2. Ms. Shahnaz Maqbool (Pakistan Customs Service/BS-21) â€“ Now Member, FBR Headquarters, Islamabad. Formerly held the position of Director General, Directorate General of Customs Risk Management, Islamabad. 3. Ms. Seema Raza Bokhari (Pakistan Customs Service/BS-21) â€“ Appointed as Member, FBR Headquarters, Islamabad. Previously held the role of Chief Collector of Customs (North), Islamabad. 4. Muhammad Junaid Jalil Khan (Pakistan Customs Service/BS-21) â€“ Currently serves as Member (Customs Operations) at FBR Headquarters, Islamabad, and has been given the additional role of Director General (OPS) at the Directorate General of NNDA, Islamabad. 5. Ms. Saima Shehzad (Pakistan Customs Service/BS-21) â€“ Transferred to FBR Headquarters, Islamabad as Member from her previous post as Chief Collector of Customs Appraisement (Punjab), Lahore. 6. Ashhad Jawwad (Pakistan Customs Service/BS-21) â€“ Appointed as Director General, Directorate General of Customs Risk Management, Islamabad. He was previously a Member at FBR Headquarters, Islamabad. 7. Muhammad Yaqoob Mako (Pakistan Customs Service/BS-21) â€“ Reassigned as Chief Collector of Customs (Appraisement), Balochistan, Quetta from his prior role as Chief Collector of Customs Balochistan, Quetta. 8. Irfan-ur-Rehman Khan (Pakistan Customs Service/BS-21) â€“ Takes on the role of Chief Collector of Customs Exports & IOCO, Karachi, after previously serving as Chief Collector of Customs (Exports), Karachi. 9. Muhammad Mohsin Rafiq (Pakistan Customs Service/BS-20) â€“ Appointed Director General (OPS) at the Directorate General of Transit Trade, Karachi. He formerly served as Chief Collector of Customs (OPS), Appraisement (South), Karachi. 10. Ms. Qurat-ul-Ain Dogar (Pakistan Customs Service/BS-20) â€“ Now posted as Member (OPS), FBR Headquarters, Islamabad. She previously held the position of Director General (OPS) at the Directorate General of Input Output Coefficient Organization, Karachi (based in Lahore). 11. Muhammad Jamil Nasir Khan (Pakistan Customs Service/BS-20) â€“ Transferred to the role of Chief Collector of Customs (OPS), Appraisement (South), Karachi, from his prior post as Chief Collector of Customs (OPS), Khyber Pakhtunkhwa, Peshawar. 12. Hassan Saqib Sheikh (Pakistan Customs Service/BS-20) â€“ Assigned as Chief Collector of Customs (OPS) (Airports), Islamabad, moving from his previous role as Chief at FBR Headquarters, Islamabad. 13. Kh. Khurram Naeem (Pakistan Customs Service/BS-20) â€“ Appointed Chief Collector of Customs (OPS), Appraisement (North), Peshawar, after serving as Director, Directorate General of Intelligence & Investigation, FBR, Islamabad. 14. Basit Maqsood Abbasi (Pakistan Customs Service/BS-20) â€“ Now Chief Collector of Customs (OPS) Enforcement, Islamabad, from his previous position as Collector, Collectorate of Customs Enforcement, Karachi. The FBR clarified that officers who were receiving performance allowances before this notification will continue to receive them in their new postings, except for those now stationed at FBR Headquarters in Islamabad. Additionally, the FBR has instructed these officers to submit their charge Relinquishment and Assumption reports immediately for record-keeping and further administrative processing. This reshuffle underscores the FBRâ€™s commitment to enhancing efficiency within the Pakistan Customs Service, aiming to strengthen its oversight across various regions and key operations.

Date: 2024-10-28

Details: ISLAMABAD: The Federal Board of Revenue (FBR) has removed duplication of functions/roles between the Directorate General of Intelligence and Investigation (Customs) and newly created Directorate General of Enforcement (Customs). The FBR on Sunday categorically refutes the recent misleading claims by certain sections of media which misrepresented the role and performance of the Directorate General of Intelligence and Investigation (Customs). Contrary to the baseless claims, the Directorateâ€™s mandate and functions remain intact, while specific changes stem from the Federal Board of Revenue (FBR) transformation plan approved by Prime Minister Shehbaz Sharif. The reorganization aims to eliminate duplicative enforcement roles within Customs, streamlining anti-smuggling and enforcement operations under a unified structure without compromising the Directorateâ€™s core functions. Only certain regional offices, deemed redundant under the new structure, will be closed, with staff reallocated to the Enforcement setups to strengthen and beef up anti-smuggling efforts. The Directorateâ€™s contributions have been exceptional, particularly in seizing smuggled goods and recovering evaded revenue. The Directorate has performed phenomenally with meagre resources of 293 operational personnel for the complete setup all across Pakistan. The Directorate General has implemented a collaborative anti-smuggling strategy, coordinating with intelligence and law enforcement agencies to maximize its enforcement capacity. The Directorate General of Intelligence and Investigation (DG I&I) Customs continues to uphold its critical role in overall Customs setup, and this role has now been further strengthened with additional technical resources and the capability to execute sting operations when potential violations of the Customs Act or related laws are identified. Positioned at a central role within Pakistan Customs, DG I&I now enjoys comprehensive access to critical data to initiate information based operations as necessary. In light of the enormous scope of anti-smuggling jurisdiction and the shortage of personnel, a collaborative anti-smuggling strategy has been implemented through this Transformation and FBR reaffirms Directorateâ€™s unwavering commitment to combating smuggling and protecting the countryâ€™s economic frontiers, FBR added. Copyright Business Recorder, 2024

Date: 2024-10-28

Details: Karachi, October 28, 2024 â€“ The Federal Board of Revenue (FBR) has explained the deduction of tax at source from salary payments, as stipulated under Section 149 of the Income Tax Ordinance, 2001. This update aims to clarify the rules governing tax obligations for employers who are responsible for withholding tax from employee salaries, as per the latest amendments to the Income Tax Ordinance updated on June 30, 2024. Section 149 mandates that employers are obligated to withhold tax from an employeeâ€™s salary at the time of payment, based on the average tax rate applicable to the individual employee. This average rate is computed in accordance with Division I of Part I of the First Schedule under the Income Tax Ordinance. Employers must consider the total estimated income of the employee under the â€œSalaryâ€ head for the tax year, adjusting for any prior taxes withheld or applicable tax credits under sections 61 and 63, contingent upon submission of relevant documentation. These credits can pertain to, among other things, charitable donations and employee provident fund contributions. The ordinance further clarifies that the withholding tax should account for the following components: 1. Prior Taxes Withheld: Employers should adjust the tax deducted based on any previous withholding under the ordinance. 2. Adjustment for Previous Errors: Any excessive or deficient deductions from previous salary payments should be corrected within the tax year. 3. Missed Deductions: Employers must account for instances where tax deductions were omitted during the year and adjust accordingly. To ensure an accurate average tax rate for each employee, the ordinance provides a formula to compute this rate. This formula considers two main components: Component A, the potential tax payable if the employeeâ€™s taxable income is assumed to be the estimated salary, and Component B, which includes the employeeâ€™s anticipated annual salary and any additional tax liabilities as defined under Section 4AB. Additionally, specific rules are laid out for directorship fees or fees for attending board meetings. Employers are required to deduct 20 percent of the gross amount paid for these fees at the time of payment, irrespective of the employeeâ€™s average tax rate. Notably, the tax deducted under this provision remains adjustable, meaning that any excess amounts withheld may be credited in subsequent calculations. The FBRâ€™s clarification underscores its commitment to ensuring compliance with tax laws and providing guidance for employers. It emphasizes that failure to correctly apply these deductions can lead to tax discrepancies, penalties, or a need for subsequent tax adjustments. The update reflects FBRâ€™s ongoing efforts to foster transparency and enhance accountability within Pakistanâ€™s tax regime, particularly concerning the withholding tax obligations of employers.

Date: 2024-10-28

Details: Karachi, October 28, 2024 â€” Meezan Bank has expressed strong confidence in winning its ongoing tax dispute with the Federal Board of Revenue (FBR), which involves the disallowance of expenses tied to the now-defunct HSBC Bank Middle East â€“ Pakistan Branch. Meezan Bank, in a report, outlined the key areas of contention that the FBR raised while amending previous tax assessments, notably for the tax year 2023. According to Meezan Bankâ€™s statement, the Income Tax Department had revised deemed assessment orders for multiple prior years, challenging several expense categories. These disallowed items predominantly involved allocations tied to dividend and capital gains, provisions for Islamic financing and related assets, as well as provisions for investments and other miscellaneous assets. The amended tax order for the 2015 tax year presented additional complexities, including the taxability of gains on bargain purchases, non-adjustment of losses associated with HSBC Bank Middle East â€“ Pakistan branches, and the imposition of a super tax. Despite the amendments and heightened tax liabilities, Meezan Bank has gained some ground in its appeal efforts. The Appellate Tribunal Inland Revenue (ATIR) ruled in favor of Meezan Bank on various issues, offering a partial victory in the prolonged legal skirmish. However, both the bank and the FBR have since filed references with the High Court of Sindh, seeking a conclusive ruling on these unresolved matters. The crux of Meezan Bankâ€™s optimism lies in its legal counselâ€™s assessment. After consulting with its tax advisors, the bankâ€™s management remains assured of a favorable outcome. Consequently, Meezan Bank has opted not to set aside provisions in its financial statements for these tax liabilities, trusting the court will ultimately rule in its favor. The potential liabilities under dispute are significant, totaling Rs 1,096 million in gains on bargain purchases and Rs 706 million in HSBC-related losses. Meezan Bankâ€™s stance in this legal dispute underscores a critical issue facing the banking industry: the FBRâ€™s increasingly assertive stance on complex tax adjustments. The FBRâ€™s recent moves signal a stricter approach to tax governance, with an eye on high-profile financial institutions as potential sources of revenue. This case holds broad implications for banking practices in Pakistan, especially as Islamic finance and international assets become more integrated into local portfolios. A favorable ruling for Meezan Bank could set a precedent, reinforcing the institutionâ€™s confidence while also shaping future FBR assessments and interpretations of complex tax items across the industry.

Date: 2024-10-28

Details: Karachi, October 28, 2024 â€“ In a record-breaking surge, Pakistanâ€™s tax authorities reported a 176% increase in revenue collection from advance tax on electricity consumption during the first quarter of fiscal year 2024-25, spanning July to September. The dramatic rise, attributed to escalating power tariffs, underscores the financial strain on consumers while offering the Federal Board of Revenue (FBR) a substantial revenue boost. The FBR collected Rs 10.40 billion in advance tax from electricity consumption in the first quarter of FY2025, a marked increase from Rs 3.77 billion collected in the same period last year, sources within the FBR confirmed. This increase was largely driven by sustained hikes in electricity charges, which have intensified over recent months, fueled by ongoing capacity payment challenges in the energy sector. Under Section 235 of Pakistanâ€™s Income Tax Ordinance, 2001, the FBR levies advance tax on electricity bills issued to commercial, industrial, and domestic consumers. According to the law, rates are defined in Division IV of Part IV of the First Schedule and applied directly to the billed electricity amount. However, there are provisions for exemption; domestic consumers listed on the Active Taxpayersâ€™ List (ATL) are not subject to the advance tax on their electricity bills, offering some respite for individual households. Sources highlighted that the advance tax on electricity consumption is calculated on the entire electricity bill, including all incidental charges, such as sales tax, to ensure a comprehensive tax application. Electricity providers are mandated to apply this tax to the consumption bill, ensuring compliance with Section 235. This includes not only the core consumption charges but also auxiliary costs, enhancing revenue consistency. Exemptions are available to certain taxpayers who can produce a certification from the Commissioner, confirming that their annual income falls within exempted thresholds or that they have already discharged their advance tax liabilities under Section 147. Additionally, taxpayers governed by Pakistanâ€™s final tax regime or minimum tax regime are similarly excluded from this levy if they meet the qualifying criteria. The surge in electricity tariffs has sparked widespread public outcry, reflecting the strain on households and businesses alike. Capacity payment challenges and broader energy sector inefficiencies have led to consistently elevated electricity costs, which, while challenging for consumers, have led to higher tax revenues for the FBR. This remarkable uptick in revenue signals the increasing role of utility taxation as a key revenue stream for Pakistan. As the fiscal year progresses, the FBRâ€™s strategic leveraging of utility charges for tax collection will continue to shape Pakistanâ€™s fiscal landscape, raising questions about the long-term sustainability of relying on rising utility costs to drive tax revenue.

Date: 2024-10-27

Details: The Federal Board of Revenue (FBR) has officially set the valuation of immovable properties, a significant move aimed at enhancing the collection of withholding tax. This initiative comes as part of the FBRâ€™s broader strategy to streamline tax collection procedures related to real estate transactions. The FBR is now collecting withholding tax at the time of the sale and purchase of immovable properties based on these valuations, ensuring a systematic approach to tax compliance. Valuation Of Immovable Properties The valuations set by the FBR are meticulously categorized according to localities and areas, reflecting the diverse real estate landscape across the country. This granular approach allows for a more accurate assessment of property values, tailored to specific regions. As such, citizens intending to buy or sell immovable properties should be acutely aware of the applicable valuations before proceeding with their transactions. Familiarity with these valuations can significantly impact the financial implications of property dealings. Moreover, the FBR has indicated plans to revise the valuation tables of immovable properties in the near future. This revision aims to keep pace with the ever-changing real estate market dynamics and to ensure that the valuations remain relevant and equitable. The FBR collects withholding tax under Section 236C of the Income Tax Ordinance, 2001, which pertains to the sale of properties, and under Section 236K, which governs the purchase of immovable properties. The valuation tables issued by the FBR serve as essential documents for all parties involved in property transactions. They stipulate the minimum tax obligations that must be adhered to during the sale and purchase process. In cases where a seller or purchaser declares a property value below the established valuation tables, they are still required to pay withholding tax based on the prescribed values. Conversely, if the declared value of the property exceeds the rates specified in the valuation table, the withholding tax payment will be calculated on the higher declared value. Understanding the implications of these valuation tables is crucial for all real estate stakeholders. It not only ensures compliance with tax regulations but also aids in making informed decisions regarding property transactions. As the FBR continues to refine its approach to property valuations and withholding tax collection, it is imperative for citizens to stay updated on these developments to avoid potential financial repercussions. Therefore, checking the latest valuation tables before engaging in any property transactions is highly advisable.

Date: 2024-10-27

Details: The Federal Board of Revenue (FBR) has issued stringent directives to customs officials, urging strict adherence to the rulings passed by appellate tribunals. Through Customs General Order (CGO) No. 2 of 2024, the FBR has emphasized that customs authorities are required to implement tribunal and adjudicative forum orders promptly, barring instances where stay orders are issued by a higher appellate forum. This directive comes in light of recent incidents highlighting the need for compliance. In a notable case, customs officials seized a substantial quantity of gold under suspicions of smuggling. During subsequent investigations, the goldâ€™s owner asserted that the accused was simply transporting the gold to his shop in a different city. As a result, the Collector of Customs allowed the release of the vehicle involved, contingent upon payment of a redemption fee. However, the case took a turn when the owner contested the customs decision before the tribunal. The tribunal partially upheld the appeal, ordering the release of some gold pieces identified as domestically sourced while maintaining the seizure of foreign-origin gold. Instead of implementing this partial release, customs officials delayed, opting to challenge the tribunalâ€™s decision. This led to an extended legal battle, eventually reaching the apex court, which ultimately ruled against the customs department, mandating compliance with the tribunalâ€™s order. Legal experts within the customs field affirm the importance of tribunal decisions, underscoring that the tribunal, functioning as a judicial entity, operates within the bounds of the Customs Act. They assert that the tribunalâ€™s statutory powers, granted by the Act, encompass both explicit and implied authorities necessary for exercising its jurisdiction effectively. As a judicial body, the tribunal also possesses incidental and ancillary powers essential for enforcing its rulings and fulfilling the legislative intent behind the Customs Act. These powers are not merely inherent to the tribunal itself but reflect the legislatureâ€™s objective to ensure that the tribunalâ€™s jurisdiction is exercised comprehensively and meaningfully. The FBRâ€™s recent directive aims to address the delays and non-compliance that can undermine the efficacy of the tribunalâ€™s orders, ensuring that decisions are respected and enforced without unnecessary obstructions. The FBRâ€™s renewed focus on upholding tribunal rulings underscores its commitment to procedural transparency and judicial respect within customs operations. By mandating compliance, the FBR signals a clear message to customs officials: uphold judicial orders with diligence to strengthen the integrity of the customs adjudication system and reinforce the principles of law and order in revenue administration.

Date: 2024-10-27

Details: Karachi, October 27, 2024 â€“ The Federal Board of Revenue (FBR) is set to initiate a sweeping crackdown on individuals who have failed to submit their income and asset declarations by the approaching October 31 deadline. This decisive stance follows two previous extensions granted by the FBR, first on September 30 and subsequently on October 14, aimed at accommodating taxpayers and encouraging timely compliance. Sources within the FBR confirm that there will be no further extensions. Instead, the board has crafted an exhaustive plan to take stringent action against defaulters who neglected to file their returns despite repeated extensions. This initiative is part of an intensified effort to increase compliance and revenue generation as the country continues to grapple with economic challenges. As of October 26, the FBR has received a total of 4.821 million income tax returns for the tax year 2024, nearly doubling the 2.407 million returns filed by the same date in 2023. The surge in filings reflects heightened awareness and perhaps the looming threat of repercussions, yet a significant portion of these returns â€“ approximately 1.820 million â€“ reported nil income, indicating zero tax deposited. This figure represents a marked increase compared to 859,929 nil-income returns submitted out of the total 2.407 million in 2023. FBR data further reveals that taxpayers submitted Rs 123 billion along with their 4.821 million returns for the current tax year, a stark contrast to the Rs 56.55 billion collected by this point in 2023. The increase underscores the FBRâ€™s intensified measures and rigorous campaigns encouraging people to file comprehensive returns with due payments. Nevertheless, the agency remains cautious about the high volume of nil-filers, particularly among new registrants. From July 1, 2023, to the present, the FBR registered 1,161,665 individuals, including 706,940 who declared nil-income. Of these, 528,638 were added since July 1, 2024, with 363,792 failing to report taxable income. This trend of nil-filing, especially among new registrants, remains a concern for the FBR as it seeks to broaden the tax base and improve revenue collection. The FBRâ€™s planned crackdown will likely target non-compliant individuals with punitive measures, including fines, penalties, and, where applicable, legal proceedings. The revenue bodyâ€™s robust stance signals a turning point in Pakistanâ€™s fiscal policy, underscoring the critical need for consistent tax compliance to stabilize and strengthen the national economy. As the October 31 deadline looms, taxpayers are urged to fulfill their obligations promptly. The FBRâ€™s preparations underscore a commitment to rectifying Pakistanâ€™s tax culture, fostering accountability, and ensuring that each eligible citizen contributes to the nationâ€™s economic resilience.

Date: 2024-10-27

Details: Islamabad, October 27, 2024 â€“ The Federal Board of Revenue (FBR) has sealed two prominent restaurants in Islamabadâ€™s commercial districts, Blue Area and Super Market, for allegedly issuing counterfeit invoices through their Point of Sale (POS) systems. This decisive action, executed by the Regional Tax Office (RTO) Islamabad, marks a significant step in the FBRâ€™s campaign to bring Tier-1 retailers and restaurants within the tax net. The RTO Islamabad, a critical arm of the FBR, has been on a targeted mission to ensure that all high-profile businesses comply with POS invoicing regulations. These measures are part of a broader FBR initiative, supported by the recently introduced POS Prize Scheme, aimed at promoting transparency and compliance among Tier-1 retailers, who often operate with substantial daily cash flows. The FBRâ€™s recent enforcement actions followed the discovery of non-authentic receipts through sophisticated POS tracking software. After verifying the discrepancies via established procedures, a dedicated RTO team, led by the Deputy Commissioner, moved swiftly to seal the two restaurants and imposed fines of Rs. 500,000 each. This financial penalty highlights the FBRâ€™s zero-tolerance policy toward businesses attempting to evade taxes through deceptive practices. Launched on October 25, the POS Prize Scheme is an innovative approach to engage citizens in combatting tax evasion. Through the Tax Asaan App, consumers can report suspicious or fake invoices directly to the FBR. Verified reports will render consumers eligible for cash rewards, which will be credited directly to their bank accounts. The FBR hopes that this reward-based system will mobilize citizens, fostering a culture of compliance and responsibility in tracking financial transactions. While currently limited to Islamabad, the POS Prize Scheme is poised to expand nationwide in the coming month. This rollout will progressively encompass all Tier-1 retailers, further tightening FBRâ€™s grip on tax evasion across multiple sectors. This latest initiative is part of a wider FBR strategy to curb the culture of fake invoicing, ensuring that all taxes owed are duly collected and deposited into the national treasury. As a custodian of public revenue, the FBR remains dedicated to bolstering the national economy through strict enforcement of tax regulations. By leveraging technological tools and citizen involvement, the FBR is set to redefine tax compliance standards across Pakistan. This decisive action signals a new chapter in Pakistanâ€™s tax collection efforts, underscoring the FBRâ€™s unwavering commitment to transparency and fiscal responsibility.

Date: 2024-10-27

Details: The Federal Board of Revenue (FBR) issued a formal clarification on Sunday, addressing recent media reports that misrepresented the role and achievements of the Directorate General of Intelligence and Investigation (Customs). In response, FBR reaffirmed the Directorateâ€™s critical mandate in anti-smuggling and revenue enforcement, emphasizing that its core functions remain intact despite recent structural adjustments. According to an official statement, FBRâ€™s reorganization plan, approved by Prime Minister Shehbaz Sharif, is focused on enhancing operational efficiency within Customs by eliminating redundant functions, streamlining anti-smuggling activities, and fortifying enforcement operations under a more cohesive structure. Contrary to claims, the FBR highlighted that the Directorateâ€™s operational effectiveness and scope have not been reduced but rather refocused to strengthen anti-smuggling initiatives. Under the revised structure, certain regional offices deemed redundant will be consolidated, with personnel reassigned to bolster frontline enforcement units. This strategic reallocation aims to optimize resource distribution across Customs operations, enhancing the overall capacity of Customs Intelligence to counter smuggling and enforce revenue laws effectively. Despite limited resources, the Directorate General has achieved remarkable results in intercepting smuggled goods and recovering significant revenue lost to illicit trade. Operating with just 293 personnel nationwide, the Directorate has employed a collaborative anti-smuggling strategy, working closely with intelligence and law enforcement agencies to expand its enforcement reach. The FBR also underscored the Directorateâ€™s recent enhancement with additional technical resources and expanded access to critical data, enabling information-driven, swift enforcement actions. These advancements strengthen DG I&Iâ€™s ability to conduct sting operations when violations of the Customs Act or related regulations are detected. As a pivotal component within Pakistan Customs, DG I&I now holds a reinforced position with broad access to essential intelligence data, empowering it to conduct proactive operations based on actionable information. This capability is vital, given the expansive nature of its jurisdiction and the persistent personnel limitations. The FBR emphasized that the Directorate remains unwavering in its commitment to combating smuggling and safeguarding Pakistanâ€™s economic interests. Under the new anti-smuggling strategy and structural reform, DG I&I is positioned to not only retain but also enhance its role within Pakistanâ€™s Customs ecosystem, supporting the nationâ€™s broader economic objectives through sustained vigilance against smuggling networks. In conclusion, the FBR reaffirmed its confidence in the Directorateâ€™s continued effectiveness and pledged ongoing support to bolster its resources, ensuring that DG I&I remains a robust guardian of Pakistanâ€™s economic frontiers.

Date: 2024-10-26

Details: Karachi, October 26, 2024 â€“ The Federal Board of Revenue (FBR) has detailed the process for collecting advance tax at the import stage for the fiscal year 2024-25. According to the FBR, this process is primarily governed by Section 148 of the Income Tax Ordinance, 2001. The ordinance, recently updated to reflect amendments until June 30, 2024, specifies the collection of tax for various classes of imported goods, emphasizing compliance at customs points across Pakistan. The FBR clarified that all importers are required to pay an advance tax on imported goods, with rates specified in Part II of the First Schedule of the Income Tax Ordinance. Under this provision, the Collector of Customs is tasked with collecting advance tax on goods classified in Parts I to III of the Twelfth Schedule. These classifications determine the applicable rates, with adjustments or amendments allowed by the FBR through official Gazette notifications. The board also reserves the right to classify imported goods, allowing flexibility for products used both as raw materials and finished goods, particularly if imported for personal or business-specific purposes. Under subsection (5), the FBR specified that this advance tax is collected simultaneously with customs duty. If certain goods are exempt from customs duty, the tax is collected at the point when customs duty would otherwise be applicable. This allows the FBR to apply tax consistently, irrespective of duty exemptions, ensuring that all importers contribute tax revenue based on the assessed value of imported goods. The Customs Act of 1969 serves as the framework for FBRâ€™s procedures regarding the collection of import taxes, specifically when it pertains to the valuation of imported goods. Further, subsection (6A) of Section 148 authorizes the FBR to establish a minimum value for goods at which advance tax is calculated, making valuation adjustments to avoid discrepancies at customs checkpoints. This valuation considers the retail price of goods or, if the goods are not subject to retail price tax, the value as determined under the Customs Act. The cumulative customs duty, federal excise duty, and sales tax, if applicable, are added to the value for a more accurate tax assessment. In another key provision, subsection (7), the FBR classifies the advance tax collected on imported goods as a â€œminimum taxâ€ on income derived from imports. However, for industrial businesses importing goods strictly for their own use, this minimum tax clause does not apply. To clarify further, certain essential goodsâ€”such as edible oils, packaging materials, paper, paperboard, and plasticsâ€”are subject to a special category under subsection (7A), with the FBR authorized to revise this list through Gazette notifications. For clarity, FBR has defined specific terms in subsection (9) to aid in the enforcement of Section 148. The â€œCollector of Customsâ€ refers to officials appointed under the Customs Act, 1969, encompassing additional or deputy collectors responsible for overseeing the customs process. The â€œvalue of goodsâ€ is calculated based on either the retail price or an adjusted customs valuation that incorporates any applicable federal excise duty and sales tax. The FBRâ€™s recent explanation aims to ensure compliance across all importers, maintain transparency in tax collection, and streamline revenue contributions from imports. This comprehensive tax structure strengthens revenue from imports and aims to facilitate efficient tax collection aligned with the countryâ€™s fiscal policies.

Date: 2024-10-26

Details: Karachi, October 26, 2024 â€“ The Federal Board of Revenue (FBR) has appointed Wajid Ali, a senior BS-21 officer from the Pakistan Customs Service (PCS), as the new Member of Customs Policy. This high-level appointment aligns with FBRâ€™s ongoing efforts to reform and modernize Pakistanâ€™s customs and taxation framework, signaling a strategic shift in leadership to drive enhanced policy initiatives. The notification released by the FBR outlined that Wajid Ali would transition from his previous role as Director General of the Directorate General of Transit Trade in Karachi to assume the critical role of Member Customs Policy. Aliâ€™s vast experience in customs management and his recent responsibilities in transit trade position him well to contribute meaningfully to policy development. This new role entrusts him with the responsibility of shaping strategic customs policies and advancing FBRâ€™s broader reform agenda, which aims to streamline customs operations and improve efficiencies for both local and international stakeholders. In parallel, Muhammad Mohsin Rafiq, a BS-20 officer currently serving as Chief Collector of Customs, Appraisement (South) at the Custom House in Karachi, has been assigned the additional role of overseeing the Directorate General of Transit Trade. Rafiqâ€™s oversight will continue until a permanent director general is appointed, ensuring continuity and stability in the Directorateâ€™s operations amid this transition. FBR insiders reveal that these strategic appointments reflect a broader transformation initiative within the customs framework. In recent months, the FBR has undertaken sweeping changes aimed at modernizing the jurisdiction of customs stations, redistributing responsibilities, and optimizing the roles of customs officers across the country. Notably, the board has also implemented reforms aimed at reducing the discretionary powers of the Directorate General of Intelligence and Investigation within Customs. This move intends to create a more balanced approach to tax collection and customs oversight, reducing the potential for misuse of authority and enhancing taxpayer facilitation. The FBRâ€™s leadership anticipates significant contributions from Wajid Ali in executing these reforms, particularly given his extensive background in customs policy and trade facilitation. His expertise is expected to drive innovations within the Pakistan Customs framework, aiding in the overall goal of transforming the customs operations to be more effective and transparent.

Date: 2024-10-25

Details: Karachi, October 25, 2024 â€“ The Federal Board of Revenue (FBR) has announced significant amendments to regulations governing the temporary import of vehicles by tourists, aimed at enhancing compliance and ensuring that imported vehicles are utilized solely for travel purposes. These draft amendments, outlined in SRO 1650(I)/2024, were released today to address the evolving challenges associated with cross-border vehicle movement and to prevent misuse of the current import facilities. The proposed regulations permit tourists to import vehicles temporarily under a â€œcarnet de passageâ€ or a valid bank guarantee, without incurring customs duties, for a maximum period of three months. However, the importers must declare at the customs entry point that they will neither transfer nor sell the vehicle during their stay in Pakistan. This measure underscores the FBRâ€™s commitment to limiting the misuse of temporary imports for commercial or local usage. If circumstances prevent the vehicle from being exported within the specified three-month timeframe, tourists can apply for an extension, subject to approval by the local customs collector. However, extensions are capped at an additional three months, contingent upon the submission of a renewed carnet de passage or bank guarantee, ensuring the FBR maintains strict control over the vehicleâ€™s temporary status. In a bid to counteract repeated short-term imports, the FBR has stipulated that vehicles re-entering Pakistan within a year after their exit will not be granted an extended temporary release. Such vehicles, whether brought in by the same tourist or another non-Pakistani visitor, will only be eligible for a maximum of 14 days. Exceptions exist only for vehicles operated by registered foreign tour agencies, which are allowed to re-enter for a duration of up to three months within a year, ensuring that recognized tourism facilitators retain operational flexibility without compromising regulatory oversight. The amendments also make provisions for exceptional cases, such as health issues, accidents, or other unforeseen circumstances that might prevent the export of a vehicle. Under these conditions, the FBR may grant a further extension of up to six months, but only if the existing bank guarantee or carnet de passage is extended to cover the prolonged period. Failing this, tourists will be required to surrender the vehicle to the relevant customs authorities. For tourists seeking to retain their vehicles in Pakistan beyond the authorized period, an import permit from the Ministry of Commerce is mandatory. In such cases, full customs duties and taxes become payable, ensuring adherence to Pakistanâ€™s import regulations and fiscal policies. The amendments also address transit vehicles, permitting tourists to bring vehicles through Pakistan en route to other destinations without customs duties. However, if these vehicles lack a carnet de passage or bank guarantee, they will need to be escorted from the entry to the exit customs point, with the escort fees determined by the customs authorities. This directive, designed to streamline transit vehicle management, includes stamping the vehicleâ€™s passage in the touristâ€™s passport to document the import and exit process formally. Through these amendments, the FBR aims to bolster transparency and accountability in the temporary import of vehicles, safeguarding Pakistanâ€™s economic interests while supporting legitimate tourism. Once ratified, these regulations are expected to reinforce compliance, deter misuse, and ensure that temporary imports align with national economic and security considerations.

Date: 2024-10-25

Details: Karachi, October 25, 2024 â€“ The Federal Board of Revenue (FBR) has proposed amendments to the Baggage Rules, 2006, introducing provisions for the confiscation of goods brought into Pakistan in commercial quantities. The draft amendments, published through SRO 1649(I)/2024, signal FBRâ€™s intent to intensify regulatory scrutiny over items entering the country under personal baggage exemptions. Currently, travelers arriving in Pakistan who bring goods in commercial quantities face a penalty amounting to 30% of the goodsâ€™ declared value in addition to any applicable customs duties and taxes. However, under the newly proposed amendments, such goods will now be subject to outright confiscation, pending evaluation by an adjudicating authority. This development marks a significant shift in policy, with the FBR aiming to dissuade individuals from bypassing formal import channels by importing goods under the guise of personal baggage. The FBR has extended an invitation to stakeholders for feedback on the draft changes, allowing a 15-day window from the date of publication to submit input. This consultative approach underscores FBRâ€™s commitment to transparency and its efforts to engage with the public on regulatory changes that may affect Pakistani travelers and citizens residing abroad. Historically, the Baggage Rules facilitated duty-free entry of items for Pakistani nationals, including those with dual citizenship, foreign nationals of Pakistani origin, and expatriates. This concession enabled travelers to import goods for personal or household use without incurring additional financial burdens. However, due to rising concerns over the misuse of these privileges for commercial gains, the FBR has acted to reinforce the original intent of the baggage exemptions, ensuring they are not exploited for business purposes. The FBR also clarified that restricted goods under the Baggage Rules remain subject to additional regulations, including specific licenses, permissions, and potential conditions on import and export. This means that items subject to legal controls or restrictions cannot bypass the formal channels even under baggage provisions, as they will face strict confiscation procedures if improperly declared. With these amendments, the FBR aims to strike a balance between facilitating genuine travelers and ensuring that commercial imports are regulated within formal structures. This step reflects the governmentâ€™s broader commitment to curbing illicit trade practices and enhancing revenue collection through regulated import channels. Once ratified, the revised rules are expected to bolster enforcement, ensuring that import activities align with Pakistanâ€™s economic policies and contribute to the countryâ€™s fiscal integrity.

Date: 2024-10-25

Details: Karachi, October 25, 2024 â€“ The Federal Board of Revenue (FBR) has imposed a severe disciplinary penalty, removing customs officer Shahid Naseem Joiya from service due to corruption and serious misconduct. Joiya, a suspended Superintendent (BS-16) of the Customs Enforcement division in Sargodha, faced allegations of involvement in the illicit removal of high-value goods from the Customs Warehouse in Dera Ghazi Khan. The incident, which reportedly took place on the night of February 1, 2024, was marked by the unauthorized removal and substitution of goods worth Rs 76 million in alleged collusion with smugglers. The FBRâ€™s disciplinary process began promptly after the incident, with Joiya being suspended from service. An Order of Inquiry was issued alongside a charge sheet and statement of allegations on April 16, 2024, detailing accusations of â€œinefficiency,â€ â€œmisconduct,â€ and â€œcorruptionâ€ under Rule-3(a)(b)&(c) of the Civil Servants (Efficiency & Discipline) Rules, 2020. Syed Ali Akbar Zaidi (PCS/BS-19) was appointed as the Inquiry Officer to conduct a thorough investigation into the officerâ€™s alleged malfeasance. The inquiryâ€™s findings, submitted in a report on June 14, 2024, revealed substantial violations that had incurred significant financial losses for the government, with only a portion of the pilfered goods recovered. The report concluded Joiya was culpable of â€œinefficiency,â€ â€œmisconduct,â€ and â€œcorruptionâ€ and recommended the stringent penalty of â€œRemoval from Serviceâ€ under Rule-4(3)(d) of the Civil Servants (E&D) Rules, 2020. Subsequent to the inquiry, a Show Cause Notice dated June 28, 2024, was served to the accused, offering him an opportunity to defend against the charges. Joiya responded by denying all allegations and requested a personal hearing. As per Rule-17 of the Civil Servants (Efficiency & Discipline) Rules, 2020, he was granted a hearing on August 20, 2024. At this hearing, Joiya claimed he had not been provided with relevant evidence by the Collectorate. The FBR directed the Departmental Representative (DR) to furnish all pertinent documents within a month, ensuring a transparent process. After the requisite documents were provided, Joiya was given a second opportunity for a personal hearing on October 23, 2024, attended by Deputy Collector Muhammad Zohaib, Assistant Collector Naeem Raza, and Joiya himself. During this session, the DR presented a detailed narrative of the case and played authenticated audio recordings of conversations implicating Joiya in collusion with smugglers and subordinate officials. Verified by forensic analysis, these recordings, along with extensive documentation, provided incontrovertible evidence of his involvement. After reviewing the inquiry findings, evidence, and arguments presented during the hearing, the FBRâ€™s Member (Admn/HR) concluded that Joiya had failed to substantiate his innocence. Based on the gravity of the offense, the Authority imposed the major penalty of â€œRemoval from Serviceâ€ under Rule-4(3)(d) of the Civil Servants (E&D) Rules, 2020. Additionally, the period of Joiyaâ€™s suspension, effective from February 6, 2024, will be treated as Extraordinary Leave Without Pay (EOL) under the Revised Leave Rules, 1980. The officer retains the right to appeal this decision within 30 days as per the Civil Servants (Appeals) Rules, 1977. This decisive action by the FBR underscores its commitment to maintaining integrity and accountability within its ranks, as it continues to enforce strict measures against corruption within public service.

Date: 2024-10-25

Details: Karachi, October 25, 2024 â€“ The Federal Board of Revenue (FBR) has implemented a significant measure to collect advance income tax from individuals and businesses registered for provincial sales tax. Under the authority granted by Section 147A of the Income Tax Ordinance, 2001, this advance tax targets individuals registered with provincial revenue authorities, aligning with FBRâ€™s broader strategy to increase compliance and broaden the tax base. As outlined by the FBR, provincial sales tax registrants are now required to pay a monthly adjustable advance income tax at a rate of three percent of their declared turnover. This advance tax is intended to coincide with the monthly sales tax return filings, ensuring streamlined compliance across both tax obligations. Those fulfilling these requirements will later be able to utilize the paid amount as a tax credit to offset their income tax liabilities, potentially minimizing their final tax dues. The FBR has clarified that this advance tax payment will be integrated into the overall advance tax calculation process, as specified under Section 147 of the Income Tax Ordinance. This means that all provisions applicable to advance tax payments under regular assessment procedures will similarly apply to this new tax on provincial sales tax registrants. One of the advantageous aspects of this provision is the tax credit mechanism for the taxpayers. Taxpayers who have paid the advance income tax will be granted tax credits against their taxable income for the year. If any portion of this credit remains unused after being applied to the taxpayerâ€™s liability, it will be eligible for a refund under Section 170 of the Ordinance, effectively allowing taxpayers to reclaim excess payments, thereby alleviating potential financial strain. Additionally, the FBR has issued a safeguard to avoid duplicate taxation efforts. Taxpayers whose names appear on the Active Taxpayersâ€™ List (ATL) as of June 30 of the preceding tax year are exempt from this advance tax. This condition aims to reward compliance and prevent redundancies within the tax system, incentivizing taxpayers to maintain active compliance to secure future exemptions. The introduction of this tax marks a notable shift in FBRâ€™s approach to advance tax collection, leveraging provincial registration as a gateway to income tax compliance. By capturing a larger spectrum of sales tax registrants, the FBR hopes to strengthen its revenue base while incentivizing taxpayers to proactively manage their tax obligations. As compliance continues to expand, the FBR anticipates a bolstered fiscal environment with smoother interprovincial tax integration.

Date: 2024-10-25

Details: Islamabad, October 25, 2024 â€“ The Federal Board of Revenue (FBR) has revised the transshipment rules for Iranian transport operators involved in the movement of goods across Pakistanâ€™s borders. The new rules are part of the efforts to strengthen regulatory frameworks governing international trade and transportation, especially under the Bilateral Road Transportation of Goods agreement between Pakistan and Iran. To implement these changes, the FBR issued SRO 1446(1)/2024, introducing further amendments to the Customs Rules, 2001. Under the new guidelines, Iranian transport operators and bonded carriers are now required to submit bank guarantees to cover duties and taxes applicable on goods being transshipped through Pakistan. These changes aim to ensure that imported goods destined for other countries, but transiting through Pakistan, comply with customs duties and regulations. The FBR has outlined specific conditions for Iranian operators to qualify as bonded carriers, detailing their operational responsibilities under this new framework. The notification issued on Thursday clarifies that a â€œcarrierâ€ refers to entities such as Pakistan Railways, National Logistic Cell (NLC), Sambrial Dry Port Trust, Faisalabad Dry Port Trust, Multan Dry Port Trust, and Iranian transport operators. These carriers must be licensed under Chapter VIII of the Customs Rules, 2001, and must adhere to the standards set forth by the FBR. One of the key updates in the rules pertains to transshipment from Taftan to the NLC Dry Port in Quetta. According to the notification, Iranian carriers transporting goods along this route must provide a bank guarantee equivalent to the customs duties and taxes levied on the goods. This amount will be determined by the Collectorate of Customs Appraisement in Taftan, in accordance with Article 7 of the 1987 Bilateral Road Transportation Agreement between Pakistan and Iran. The bank guarantee serves as a safeguard to prevent misuse of the transshipment facility. If an Iranian carrier is found to be misusing the system, the FBR has stated that the guarantee will be forfeited, and additional penalties may be imposed under the relevant customs laws and regulations. This step is part of the broader strategy to curb illegal trade practices and ensure that transit goods comply with Pakistani customs requirements. The FBRâ€™s amendments reflect Pakistanâ€™s commitment to regulating cross-border transportation and facilitating smoother trade operations while minimizing revenue losses from the potential misuse of transshipment processes. These updates will also help promote more transparent trade relations between Pakistan and Iran.

Date: 2024-10-25

Details: Karachi, October 25, 2024 â€“ In a significant move to streamline operations and ease taxpayer concerns, the Federal Board of Revenue (FBR) has reduced the powers of the Directorate General of Intelligence and Investigation (I&I) Customs. The FBR has formally abolished several enforcement functions of I&I Customs, including its authority to conduct anti-smuggling operations. This change is part of a broader initiative to reorganize customs intelligence and improve efficiencies across the department. The FBR has officially communicated these changes to the Directorate General, directing them to cease all anti-smuggling activities and halt their ability to block or de-block shipments through the WeBOC customs clearance system. Additionally, the FBR has explicitly prohibited I&I Customs from carrying out â€˜sting operations.â€™ These directives are aimed at preventing overreach by customs authorities and reducing the operational burden on taxpayers. To ensure proper governance, the FBR announced it would soon release a new Charter of Functions, along with a Customs General Order (CGO) that will define the jurisdictions of the Directorate of I&I and lay out detailed procedures for any future sting operations. These operations, if necessary, will require prior approval from the Member Customs (Operations). This new framework is intended to create a more transparent and regulated approach to enforcement. In light of these changes, the FBR has also initiated a broader reorganization of I&I Customs. A committee was formed to review its structure, leading to the closure of certain regional directorates, including those in Rawalpindi, Multan, Hyderabad, and Gawadar. Concurrently, the FBR will establish a new office under the Director General (Enforcement), which will take over many of the functions previously held by I&I Customs. Key functions such as management of customs warehouses and some human resources will be transferred to this new enforcement office. To facilitate this transition, the FBR has tasked the Directorate General of I&I Customs with completing a series of tasks, including taking stock of all existing warehouses, reviewing office space, vehicles, and budgetary status, and reporting on ongoing inquiries and human resource allocations. The deadline for this report is November 12, 2024. These reforms are part of the FBRâ€™s strategy to enhance operational efficiency, eliminate duplicative efforts, and safeguard national trade security and economic interests. By curtailing certain powers of customs intelligence, the FBR aims to simplify procedures, facilitate trade, and reduce the administrative burden on taxpayers while maintaining effective enforcement where necessary.

Date: 2024-10-24

Details: ISLAMABAD: Chairman Federal Board of Revenue (FBR) Rashid Mahmood, Wednesday, said that the FBR has moved seven summaries to the prime minister for enforcement including two summaries for taking action against sales of illicit cigarettes and smuggled products under the FBRâ€™s transformation plan. The FBR chairman informed the Senate Standing Committee on Finance, on Wednesday, that the FBR will generate Rs200 billion to Rs250 billion through these enforcement efforts. By January 2025, the implementation of new enforcement measures would be done under the FBRâ€™s transformation plan. Out of seven summaries moved to the prime minister, two are related to check smuggling, he pointed out. In this regard, the FBR will empower provincial authorities to take enforcement action against illicit sales of cigarettes and other smuggled commodities through amendments in the FBR rules. Under the FBRâ€™s transformation plan, provincial departments would be empowered to take action against sales of illicit cigarettes. The FBR has limited workforce of 100 officers for conducting enforcement activities and need coordinated efforts of provinces. About the progress on track and trace, the FBR chairman informed that the track and trace system has been fully implemented at the tobacco sector. During the upcoming crushing season, the system would be 100 percent installed at all sugar mills. In case of cement, the production lines of all cement units have not been covered under the system. In this regard, meetings are taking place between the FBR and the cement manufacturers and hopefully it would be fully implemented in coming weeks. The FBR chairman categorically stated that the FBR will bring multiple companies to execute the project of the track and trace system in different sectors. Rashid Mahmood said that the FBR is reviewing the digital invoicing regime. The FBR will replace the digital invoicing licensing regime with the certification regime. This will facilitate the small and medium size businesses to have digital invoicing system without giving huge amount of registrations to the license holder. The FBR will abolish the licensing regime for the digital invoicing and replace it with the certification regime, he added. Copyright Business Recorder, 2024

Date: 2024-10-24

Details: Karachi, October 23, 2024 â€“ The Federal Board of Revenue (FBR) has issued a detailed procedure outlining the tax assessment for individuals planning to leave Pakistan, ensuring compliance with Section 145 of the Income Tax Ordinance, 2001. This move seeks to address the tax liabilities of those departing the country with no intention of returning. The FBR clarified that individuals who intend to leave Pakistan during the current tax year, or shortly after its expiration, must provide formal notice and submit their tax returns. As per Section 145 of the Income Tax Ordinance, any person likely to depart from Pakistan must inform the Commissioner at least 15 days prior to their intended departure date. In addition to the notice, individuals are required to submit a tax return that covers the period from the end of their most recent tax year to the date of departure. If an assessment for the previous year has not been completed or a return has not been filed, they must submit a return for the relevant period ending on the departure date. This time frame will be treated as a distinct tax year for tax calculation purposes. To further safeguard against tax evasion, the FBR emphasized that the Commissioner holds the authority to serve a notice demanding the submission of a return if they believe an individual is likely to leave Pakistan without fulfilling their tax obligations. This is particularly applicable to individuals suspected of having no plans to return, allowing the Commissioner to enforce timely tax assessments. The taxable income of the departing individual will be charged at the rates applicable to the corresponding tax year, ensuring that all provisions of the Income Tax Ordinance are adhered to during the assessment process. Moreover, the FBR has introduced stringent measures aimed at preventing offshore tax evasion. If the Commissioner has reason to believe that an individual leaving Pakistan is involved in offshore tax fraud or is attempting to dispose of assets to evade taxes, the FBR can take decisive action. Under this provision, the Commissioner may freeze any domestic assets, including those beneficially owned by the individual, for up to 120 days or until the completion of legal proceedings. These measures underscore the FBRâ€™s commitment to strengthening tax compliance and curbing potential tax evasion by individuals attempting to bypass their fiscal responsibilities upon leaving the country. The enforcement of these rules is expected to enhance transparency and accountability within Pakistanâ€™s tax regime.

Date: 2024-10-24

Details: Pakistan Prime Minister Shehbaz Sharif on Thursday said the use of modern technology was essential to bring improvement in the countryâ€™s tax and revenue system. He remarks came as he chaired a meeting on the progress of reforms in the Federal Board of Revenue (FBR) on Thursday, according to a statement from the Prime Ministerâ€™s Office (PMO). During the meeting, PM Shehbaz directed the FBR to make full use of technology to improve revenue collection. PM Shehbaz emphasised the need to make the system for preventing smuggling in the country more effective. He also sought a roadmap for the reconstruction of the Pakistan Revenue Automation Limited (PRAL), the PMO said. Last month, the Cabinet Committee on State-Owned Enterprises (CCoSOEs) approved the reconstitution of the Board of Directors (BoD) of the PRAL. â€œThe meeting considered the recommendation of five majority independent directors and four ex-officio members by the Board Nominations Committee as per Section (1) of Section 10 of the Enterprises (Governance and Operations) Act, 2023,â€ read the statement from Finance Division then. It is pertinent to mention that PRAL, established in 1994, is responsible for providing technology-driven solutions to the FBR, playing a vital role in automating the countryâ€™s tax collection system. In the meeting on Thursday, the prime minister said a taxpayer-friendly environment should be provided within FBR, as he directed the relevant officials to ensure timely completion of reforms in the board. FBR faces shortfall in first quarter of FY25 Despite taxation measures of Rs1,800 billion in the budget (2024-25), the FBR suffered a massive shortfall of over and above Rs87 billion during the first quarter (July-September) 2024-25. The FBR collected Rs2,452 billion against the assigned target of Rs2,539 billion set for the first quarter of current fiscal year. However, the board achieved the monthly target of Rs985 billion set for September, 2024 by collecting net revenue of Rs996 billion during the month. According to the list of retailers compiled by the FBR till October 17, 2024, the FBR has integrated 160 big retailers with the Point of Sales (POS) system during October, taking the total number of registered Tier-I retailers to 9,290. The board also extended the deadline for filing the income tax returns further till October 31, 2024.

Date: 2024-10-24

Details: Islamabad, October 24, 2024 â€“ In a significant policy shift, the Federal Board of Revenue (FBR) has announced that it will now update the Active Taxpayers List (ATL) on a daily basis, departing from its previous practice of weekly updates. This adjustment comes in the wake of sweeping reforms introduced through SRO 1638(I)/2024, dated October 18, 2024, aimed at enhancing transparency and ensuring real-time accuracy in taxpayer records. The FBR, in its official statement released on Thursday, underscored that these changes were introduced under section 237 of the Income Tax Ordinance, 2001. â€œThese amendments are aimed at improving the efficiency and responsiveness of the Active Taxpayers List system, allowing for more immediate recognition of compliance by taxpayers,â€ the statement read. Previously, the ATLâ€”a list critical for determining whether individuals and businesses are eligible for various tax benefitsâ€”was updated on a weekly basis, with the shift to an annual cycle occurring each March. However, under the new framework, any taxpayer who files their Income Tax Returns (ITR) for the current tax year, 2024, by the stipulated deadline or within any granted extension, will be included in the ATL immediately. This move is expected to streamline tax compliance processes and eliminate the delays previously experienced in acknowledging a taxpayerâ€™s active status. Additionally, taxpayers who fail to file their returns within the due or extended date will still have an opportunity to be included in the ATL, provided they pay the surcharge stipulated under section 182A of the Income Tax Ordinance. This provision serves as a safety net for taxpayers who may have missed the initial deadlines, allowing them to regain their status as active taxpayers in a timely manner. This overhaul marks a pivotal transformation in FBRâ€™s operational strategies. By shifting to daily updates, the FBR aims to bolster taxpayer confidence by ensuring that their compliance is recognized immediately, thus facilitating smoother and more transparent interactions with the tax authority. The new system will also reduce the administrative burden on both taxpayers and the FBR, as updates are processed in real-time. These reforms represent a concerted effort by the FBR to modernize its tax administration and foster greater efficiency. By enhancing the agility of its ATL system, the FBR reaffirms its commitment to fostering a taxpayer-friendly environment, ultimately promoting higher levels of compliance across the board.

Date: 2024-10-24

Details: Islamabad, October 24, 2024 â€“ Prime Minister Shehbaz Sharif on Thursday instructed the Federal Board of Revenue (FBR) to foster a more taxpayer-friendly atmosphere in a bid to build trust and enhance tax compliance. The prime minister made these remarks while chairing a review meeting focused on FBR reforms, according to a press release from the PM Office. During the meeting, Prime Minister Shehbaz stressed the importance of making the tax system more approachable and transparent. He emphasized the need for improving the experience of taxpayers, stating that a supportive environment could help bridge the trust gap between the tax-collecting authorities and the public. In addition to promoting a more taxpayer-friendly atmosphere, the prime minister directed FBR officials to focus on capacity building. He highlighted the importance of equipping FBR officers with the skills and tools necessary to enhance their efficiency. â€œThe capacity building of officers and their effective use in the field are crucial to strengthening the tax collection system,â€ he said. Prime Minister Shehbaz also urged the FBR to embrace modern technology to improve tax collection and streamline revenue processes. He instructed the board to develop a robust strategy for restructuring Pakistan Revenue Automation Limited (PRAL), the technology arm of the FBR, which handles the automation of tax processes. â€œModern technology can significantly improve tax collection mechanisms and reduce inefficiencies, creating a system that works better for both taxpayers and the government,â€ he noted. Additionally, the prime minister directed the FBR to strengthen its systems to combat smuggling, which continues to be a major drain on Pakistanâ€™s economy. He called for enhanced effectiveness in preventing illegal trade and urged FBR officers to carry out reforms aimed at curbing this issue. The meeting also included discussions on ongoing FBR reform initiatives, with the prime minister urging the timely completion of these measures. He underscored that the reform process must be accomplished swiftly to ensure better tax collection and improve the overall efficiency of the revenue authority. Prime Minister Shehbazâ€™s directives come amid ongoing efforts to increase tax revenues in Pakistan, where tax compliance remains low, and the informal economy is substantial. The focus on creating a more taxpayer-friendly atmosphere is expected to encourage more citizens to participate in the formal economy, thereby contributing to the countryâ€™s financial stability. The FBR is expected to implement the prime ministerâ€™s instructions in the coming months, with a particular emphasis on technological innovation, capacity building, and curbing illegal trade through smuggling.

Date: 2024-10-24

Details: Islamabad, October 24, 2024 â€“ The Federal Board of Revenue (FBR) has announced ambitious plans to generate up to Rs 250 billion through a series of robust anti-smuggling initiatives, signaling a major crackdown on illicit trade. Rashid Mahmood, Chairman of the FBR, revealed a day earlier that the board has forwarded seven key summaries to the Prime Minister for approval. These proposals, part of the FBRâ€™s comprehensive transformation plan, include two major initiatives specifically designed to combat the sale of smuggled goods and illicit cigarettes. The FBR is confident that these measures will yield between Rs 200 billion to Rs 250 billion in revenue. During his briefing to the Senate Standing Committee on Finance, Mahmood highlighted that full implementation of these enforcement actions is expected by January 2025. Of the seven summaries, two directly focus on curbing smuggling activities, a critical component of the broader effort to reinforce economic oversight. One significant move involves empowering provincial authorities to take swift action against the sale of contraband items, particularly cigarettes and other high-demand smuggled goods. This expansion of enforcement responsibilities will be facilitated through amendments to the FBRâ€™s rules, extending greater autonomy to provincial bodies. Mahmood acknowledged that the FBRâ€™s limited workforce of just 100 officers makes coordinated efforts with provincial departments essential to combat the widespread nature of smuggling. Provincial enforcement of illicit sales will be key to success, particularly in targeting illegal cigarette trade, a major area of concern. On the progress of the track-and-trace system, Mahmood proudly stated that the system has been fully deployed in the tobacco sector. This sophisticated system, designed to monitor production and prevent tax evasion, is being extended to other industries. By the upcoming sugarcane crushing season, the system will be operational in all sugar mills, ensuring comprehensive oversight of sugar production. However, Mahmood noted that while some cement units have been integrated into the system, work remains to achieve full implementation. Ongoing discussions between the FBR and cement manufacturers are expected to resolve these issues in the coming weeks. In a further overhaul of existing frameworks, Mahmood announced that the FBR is reviewing its digital invoicing regime. The current licensing system for digital invoicing will be abolished and replaced with a more accessible certification regime. This shift aims to facilitate small and medium-sized enterprises (SMEs), allowing them to adopt digital invoicing systems without the burden of expensive registrations. By combining stringent enforcement with technological innovation, the FBR is poised to bolster revenue streams and crack down on smuggling, a persistent drain on the national economy.

Date: 2024-10-24

Details: Minister of State for Finance, Ali Pervez Malik, a day earlier, made it clear that there are no ongoing discussions or plans for tax exemptions based on the Advance-to-Deposit Ratio (ADR) for banks. Speaking at the Senate Standing Committee on Finance, Malik emphasized that no proposal concerning an ADR-based tax exemption is currently under consideration. During the committee meeting, the Chairman of the Federal Board of Revenue (FBR), Rashid Mahammad, reinforced the ministerâ€™s statement, adding that any changes to the tax policy related to ADR would not occur until next year. He specified that no modifications to the current tax framework would be implemented before December 2024, as the tax authorities are unable to accurately forecast the expected ADR for banks by the yearâ€™s end. The banking sector follows the calendar year as its tax year, meaning the current tax year 2025 will end on December 31, 2024. FBR Chairman Mahammad provided details from the half-yearly financial reports of four major banks, covering the period from January to June 2024. The reported ADR for these banks ranged from 21 percent to 46 percent, highlighting significant variation across the sector. Mahammad explained that the ADR, which reflects the ratio of loans extended to deposits held, increases when banks lend more to the private sector rather than investing in government securities. However, because of fluctuating lending patterns, the FBR is unable to predict the ADR as of December 31, 2024, with any certainty. Despite speculation regarding possible tax breaks, Mahammad clarified that no ADR-based tax exemptions currently exist. The tax rates for banking companies are structured around their annual ADR performance. Banks with an ADR of more than 50 percent are subject to a 39 percent tax on their taxable income. However, if the ADR falls between 40 percent and 50 percent, the tax rate rises to 49 percent. Banks with an ADR below 40 percent face a significantly higher tax rate of 55 percent. This tiered tax system aims to encourage banks to lend more to the private sector, although it remains to be seen whether this strategy will lead to an increase in ADR levels. For now, banks can expect no relief from the existing tax framework.

Date: 2024-10-23

Details: ISLAMABAD: The Federal Tax Ombudsman (FTO) has expressed serious concern that Federal Board of Revenueâ€™s SRO 350(I)/2024, issued to curb the menace of fake/flying invoices, practically resulted in non-filing of sales tax returns, disruption of supply chain mechanism and blockage of business operations. Taking serious notice of hardships caused to sales tax registered persons in submission of sales tax, the FTO is shocked that SRO 350(I)/2024 has caused injustice to the sales tax taxpayers and directed the FBR to remove complexities arising out of this notification for buyers and sellers. The FTO has directed the FBR to issue guidelines and clarificatory instructions to the Registered Persons how to navigate the complexities arising out of SRO 350(1)/2024. The FTO has further directed the FBR should direct Member (IR-Operations), and Member (ST-Policy) to update Iris in line with SRO 1130(1)/2024 without further delay and explore the possibility of further facilitation in filing of sales tax returns by the buyers as well as sellers so far as possible and examine the issue of extension in grace period of six days seriously as already allowed to the suppliers. The FTOâ€™s order revealed that the perusal of problems/difficulties faced by the complainants in juxta position with the provisions subsequently inserted through SRO 1130(l)/2024 reflects that most of the issues, discrepancies and difficulties have been resolved. It is also observed here that this Forum recognizes basic objective behind issuance of SRO 350(1)/2024 i.e. to curb the menace of fake and flying invoices. However, the corrective measures should have not been done at a high cost in terms of inconvenience, inability to file the returns, disruption of supply chain mechanism and blockage of business operations. In this vain, the FBR needs to further consider the issues emanating from operation of SRO 350(1)/2024 and must extend facilitation and remove injustices caused to the sales tax taxpayers. During hearing, some of the complainants stated that though purchases of 3rd Schedule items have been exempted but buyers of other items still suffer. They suggested that in such cases, the buyers should be made withholding agents of sellers. The ARs/complainants further pleaded the FBR should make filing of sales tax returns more flexible to facilitate the taxpayers. They suggested that some mechanism should be developed which enables simultaneous filing of sales tax returns for entities engaged in mutual transactions as buyers and sellers. They also argued that under SRO 1130(l)/2024, a grace period of 6 days has been provided for filing of sales tax returns by the suppliers, which needs to be extended reasonably to provide further facilitation. Also the FBR should develop and implement an automated system that can recognize and accommodate the reciprocal nature of transactions between entities that function as both suppliers and purchasers. They further stated that although FBR has notified SRO 1130(I)/2024, however, Iris software has not been updated accordingly by the PRAL. The referred omissions and commissions in issuance of SRO 350(1)/2024 and subsequently in its operations constitute maladministration, the FTO order added. Copyright Business Recorder, 2024

Date: 2024-10-23

Details: LAHORE: The Lahore Chamber of Commerce & Industry (LCCI) has organised an awareness session on the filing of income tax returns in collaboration with the Chief Commissioner Regional Tax Office (RTO) Lahore. Chief Commissioner RTO Lahore Ahmad Shuja gave a detailed presentation on income tax return filing and related statistics. The session, aimed at guiding the business community, was attended by LCCI President Mian Abuzar Shad, Vice President Shahid Nazir Chaudhry, Executive Committee members and representatives from various business sectors. Chief Commissioner RTO Lahore Ahmad Shuja in his address emphasized the importance of compliance with tax regulations and highlighted the benefits of filing tax returns on time. He assured that the RTO Lahore was committed to providing maximum support to facilitate businesses in the process. â€œResponse from the Lahore taxpayers is marvellous and encouraging,â€ the Chief Commissioner said and added that the number of tax returns was increasing in RTO Lahore region. He said that 180,645 returns had been received during 1st October 2024 to 20 October 2024 as compared to 69,061 during the same period of 2023 which shows 111 percent increase. President LCCI, Mian Abuzar Shad, expressed his gratitude to the Chief Commissioner RTO Lahore for his collaboration and pledged the Chamberâ€™s commitment to educate the business community about tax compliance. He stressed that timely filing of income tax returns is not only a legal obligation but also a means of contributing to the national economy. LCCI Vice President Shahid Nazir Chaudhry stressed up on the need for simplifying tax procedures for the business community. He appreciated the Chief Commissionerâ€™s willingness to address individual concerns and encouraged the attendees to actively participate in the session. The session included a detailed presentation by RTO Lahore officials on the step-by-step process of filing income tax returns along with a question and answer session where participants raised their specific concerns. Topics such as tax exemptions, online filing and penalties for late submissions were thoroughly discussed. Copyright Business Recorder, 2024

Date: 2024-10-23

Details: Karachi, October 23, 2024 â€“ The Federal Board of Revenue (FBR) has launched a rigorous crackdown on high net worth individuals who have failed to file their income tax returns for the tax year 2023. On Wednesday, the FBR directed its Large Taxpayer Offices (LTOs), Medium Taxpayer Offices (MTOs), Corporate Tax Offices (CTOs), and Regional Tax Offices (RTOs) to conduct detailed scrutiny and audits of these non-filers. This move is part of FBRâ€™s ongoing effort to enhance tax compliance and bring affluent individuals into the formal tax net. The tax authority had earlier shared data on high net worth individuals who failed to file their returns, sending this information to various tax offices for desk audits and enforcement measures. The FBR expects that tax proceedings to enforce compliance with income tax regulations for 2023 should have already been initiated. However, the recent directive aims to ensure that any pending actions are promptly enforced. The FBRâ€™s instructions are clear: any anomalies discovered in the enforced returns must be scrutinized, and tax offices are mandated to take appropriate legal action to collect the estimated tax liabilities. This initiative underscores the governmentâ€™s resolve to close the tax gap by targeting individuals who possess significant wealth but fail to meet their tax obligations. The FBRâ€™s audit focuses on individuals whose wealth and financial activities suggest that they fall within the high net worth category but have not complied with filing requirements. This group includes those whose assets, income, or expenditures demonstrate significant economic stature but remain outside the formal tax system. The board is keen to address the disparity between reported and actual incomes in order to boost revenue collection and ensure a fairer tax system. By empowering tax offices across the country to enforce compliance, the FBR aims to eliminate loopholes and minimize tax evasion. The directive comes amidst broader efforts to expand the tax base and improve revenue streams as Pakistan grapples with economic challenges and fiscal constraints. FBRâ€™s move to audit high net worth non-filers signals a clear message: wealth without accountability will no longer be tolerated. The crackdown not only strengthens the tax net but also reinforces the governmentâ€™s commitment to enhancing financial transparency and fostering a culture of tax compliance. This heightened focus on high net worth non-filers is expected to bring in substantial revenue for the exchequer while promoting equitable taxation across all economic segments.

Date: 2024-10-22

Details: Lahore, October 22, 2024 â€“ The Regional Tax Office (RTO) Lahore has recorded a remarkable 162% increase in income tax return filings for the tax year 2024. In an awareness session held at the Lahore Chamber of Commerce and Industry (LCCI), Chief Commissioner RTO Lahore Ahmad Shuja announced that the office received 180,645 returns between October 1 and October 20, 2024, compared to 69,061 during the same period in 2023. The event, aimed at educating the business community on income tax return filing, featured a detailed presentation from Chief Commissioner Shuja on the process and statistics related to tax compliance. LCCI President Mian Abuzar Shad, Vice President Shahid Nazir Chaudhry, Executive Committee members, and representatives from various business sectors attended the session. Chief Commissioner Ahmad Shuja emphasized the importance of timely tax compliance and outlined the benefits of filing tax returns. He reassured the business community that RTO Lahore is dedicated to supporting businesses through the process, providing guidance and resources to make it more accessible. â€œThe response from taxpayers in Lahore has been overwhelming and encouraging,â€ Shuja stated, highlighting the rising number of tax returns being filed in the region. LCCI President Mian Abuzar Shad thanked the Chief Commissioner for his collaboration and praised RTO Lahoreâ€™s efforts to engage the business community. He stressed that timely income tax return filings not only fulfill a legal obligation but also contribute to the national economy. â€œIt is vital for every business to comply with tax regulations to help build a strong financial foundation for the country,â€ Shad added. Vice President Shahid Nazir Chaudhry echoed these sentiments, calling for the simplification of tax procedures to further encourage compliance. He appreciated the Chief Commissionerâ€™s efforts to address individual concerns and urged business representatives to actively participate in such sessions. The event also included an in-depth presentation by RTO Lahore officials on the step-by-step process of filing income tax returns, along with a Q&A session. Participants raised concerns regarding tax exemptions, online filing methods, and the penalties associated with late submissions. The officials provided detailed answers and reassured attendees that their feedback would be considered in future updates to the system. Executive Committee members of LCCI praised RTO Lahore for its commitment to transparency and for making the tax filing process more user-friendly. They urged the authorities to continue holding such sessions to keep the business community well-informed and engaged in tax compliance efforts.

Date: 2024-10-22

Details: Karachi, October 22, 2024 â€“ The Federal Board of Revenue (FBR) has initiated the disconnection of electricity connections for individuals and businesses who have failed to obtain mandatory sales tax registration. This decisive action is part of a broader effort to tighten compliance and curtail revenue losses. On Tuesday, the FBR issued formal directives to chief commissioners of Large Taxpayers Offices (LTOs), Corporate Tax Offices (CTOs), Medium Tax Office (MTO), and Regional Tax Offices (RTOs) to verify the identities of suspected non-compliant persons. These individuals, engaged in taxable activities, have been operating without proper sales tax registrationâ€”a violation of the Sales Tax Act, 1990. The FBRâ€™s move comes after identifying 500 individuals and entities with industrial and commercial electricity connections who are believed to be evading sales tax obligations. These electricity consumers are suspected of conducting business transactions subject to taxation but have sidestepped the requirement to register under Section 14 of the Sales Tax Act. According to the FBR, every individual or entity making taxable supplies, including zero-rated supplies, is legally bound to register for sales tax. This obligation ensures transparency in business activities and prevents revenue leakage, critical for sustaining the national exchequer. The list of suspected tax evaders was compiled in collaboration with various Distribution Companies (DISCOs), which provided details of electricity consumers holding industrial and commercial connections but lacking tax registration. The FBR has instructed its regional offices to appoint focal persons to liaise with the respective DISCOs for complete verification of these consumersâ€™ addresses and activities. The FBR also mandated the formation of teams comprising tax officers and officials to conduct on-the-ground verifications of electricity connections at the identified addresses. This verification will determine the eligibility of the unregistered individuals for mandatory sales tax registration under Section 14 of the Sales Tax Act, 1990. Following the verification process, the FBR will forward the details of non-compliant consumers to the relevant authorities for immediate disconnection of their electricity supply under Section 14AB of the Sales Tax Act, 1990. This drastic measure is intended to compel compliance and enforce the rule of law in tax matters. This crackdown underscores the FBRâ€™s commitment to broadening the tax base and ensuring that all eligible taxpayers fulfill their legal obligations. As the campaign unfolds, businesses and individuals failing to comply with tax laws are likely to face significant financial and operational consequences, setting a stern precedent in Pakistanâ€™s ongoing efforts to combat tax evasion.

Date: 2024-10-21

Details: Karachi, October 21, 2024 â€” The Federal Board of Revenue (FBR) is poised to terminate the active status of approximately 6.1 million taxpayers as a result of recent amendments introduced to the Income Tax Rules, 2002. These changes will impact taxpayers who fail to meet the deadline for filing income tax returns for the tax year 2024. According to the FBRâ€™s amendments, the active taxpayer status for the tax year 2023 will expire on the last date for filing income tax returns for the 2024 tax year. This deadline, currently set for October 31, 2024, may mark a significant shift in tax compliance as the FBR moves to enforce stricter timelines. READ: FBR to Launch New Active Taxpayers List on November 1, 2024 If the FBR adheres to the October 31 deadline, the Active Taxpayers List (ATL) for the tax year 2023 will automatically expire on the same day, and a new ATL for the tax year 2024 will be issued on November 1, 2024. This change in timing represents a departure from the FBRâ€™s previous practice of releasing the ATL annually on March 1st, based on returns filed by the end of February. The new amendment reflects the FBRâ€™s intention to introduce a more dynamic, responsive system, ensuring timely updates to the ATL. The latest ATL, issued on Monday, October 21, 2024, shows that around 6.1 million taxpayers currently hold active status. However, those who fail to submit their returns for the 2024 tax year by the stipulated deadline risk losing this status, unless they secure prior approval from the Commissioner of Inland Revenue. Late filers will have the opportunity to be added to the ATL, but only after paying a surcharge. Historically, the FBR has been more lenient with deadlines, offering extensions to accommodate the public. The original deadline for tax year 2024 was set for September 30, 2024, but was extended twiceâ€”first to October 14, 2024, and then to October 31, 2024. Despite the extensions, FBR insiders suggest that further leniency is unlikely. As a result, the release of the new ATL on November 1, 2024, seems highly probable. The significance of being on the ATL cannot be overstated. Individuals and businesses whose names are included benefit from reduced withholding tax rates on various transactions and are eligible to participate in public procurement processes. The ATL serves as a certification of compliance with tax obligations, providing financial advantages to those who file on time. Non-compliance, however, results in financial disadvantages, such as higher withholding taxes on income, banking transactions, and purchases. A key feature of the latest amendments is the shift from weekly to daily updates of the ATL. This change is expected to ensure a more accurate and real-time reflection of compliance. Taxpayers who miss the October 31 deadline but later file their returns and pay the surcharge will be promptly added to the ATL, allowing them to restore their active status with minimal delay. Moreover, the FBR has introduced provisions for companies and associations of persons (AOPs) established after June 30, 2024. These entities will automatically be included in the ATL, even though their tax returns are not yet due. This inclusion allows new businesses to take advantage of the active taxpayer status without waiting for the next filing cycle. The amendments also extend to taxpayers filing returns in Azad Jammu and Kashmir (AJK) or Gilgit-Baltistan (GB). Taxpayers in these regions who have filed returns with their respective revenue boards will be included in the national ATL, provided they maintain temporary or permanent addresses in these territories. The FBRâ€™s swift issuance of the ATL, following the deadline, underscores its commitment to improving tax compliance and modernizing Pakistanâ€™s tax infrastructure. By transitioning to a more agile and real-time system, the FBR aims to promote greater transparency and accountability in the nationâ€™s tax administration. As the deadline approaches, businesses and individuals are urged to file their returns promptly to avoid losing active taxpayer status. While the option to pay a surcharge and restore oneâ€™s name on the ATL remains, the financial and administrative benefits of timely filing far outweigh the consequences of exclusion. In this new era of tax compliance, the FBRâ€™s reforms promise to enhance fiscal responsibility and contribute to the countryâ€™s economic stability.

Date: 2024-10-21

Details: Karachi, October 21, 2024 â€“ The Federal Board of Revenue (FBR) has issued a new mechanism enabling the recovery of unpaid taxes through third parties. This procedure, codified under Section 140 of the Income Tax Ordinance, 2001, empowers the government to recover outstanding taxes by requiring entities or individuals holding money on behalf of the taxpayer to make direct payments to the government, according to the FBR. The FBR said that the mechanism is designed to prevent delays in tax recovery by bypassing the taxpayer, especially in cases of default or non-compliance. Through this provision, the Commissioner of Inland Revenue can legally demand payment from third parties, such as banks or employers, who owe or hold funds for the taxpayer, thereby securing the due tax without relying solely on voluntary compliance from the taxpayer. Broad Scope of Application According to the FBR, Section 140 is designed to capture a wide range of scenarios where third parties might owe money to a taxpayer. This includes situations where a taxpayerâ€™s bank holds deposits or an employer owes them a salary. The Commissioner is authorized to issue a written notice demanding that such entities divert the owed amounts directly to the tax authorities to satisfy the taxpayerâ€™s unpaid tax liability. The FBR said that the law also covers future payments, meaning that even if a third party is scheduled to owe money to the taxpayer at a later date, they may still be required to comply. The broad definition of â€œpersonâ€ within the law ensures that not only individuals or businesses but also courts, tribunals, and other entities are included within the scope of this recovery mechanism. Conditions and Protections for Taxpayers Despite its wide-reaching implications, the FBR emphasized certain protections for taxpayers. A notice demanding payment from third parties cannot be issued if the taxpayer has filed an appeal against their tax assessment and has already paid 10% of the disputed tax amount. This ensures that taxpayers undergoing legitimate dispute processes are not prematurely subjected to collection actions while their appeals are pending. Furthermore, the notice can only demand payments that are currently due or will become due. In cases where periodic payments, such as salaries, are owed to the taxpayer, the Commissioner may instruct the payer to make deductions in installments until the full amount is recovered. This incremental recovery process provides flexibility and prevents excessive financial burden on third parties. Enforcement and Compliance Once a third party complies with the notice and makes the payment, they are legally absolved of any financial liability towards the taxpayer for the amount paid to the government. The receipt from the Commissioner serves as evidence of compliance, safeguarding third parties from future disputes. Moreover, Sections 160 to 163 of the tax law govern the withholding and deduction process in these cases, ensuring procedural integrity. In essence, the FBRâ€™s new enforcement strategy under Section 140 is a robust tool for ensuring tax compliance while balancing protections for both taxpayers and third parties involved in the recovery process.

Date: 2024-10-21

Details: Islamabad, October 21, 2024 â€“ In a bold move aimed at streamlining tax compliance and broadening the tax net, Finance Minister Mohammad Aurangzeb has announced that the government is drafting legislation to eliminate the category of non-filers from the Income Tax Ordinance, 2001. This step, long demanded by fiscal reform advocates, is expected to create a more transparent and accountable taxation system in Pakistan. During a Senate session on Sunday, Aurangzeb emphasized that non-compliant individuals will face stringent penalties as prescribed under the Income Tax Ordinance. â€œThe concept of non-filers will no longer exist,â€ he asserted, highlighting that the new legislation will introduce harsher penalties for those who fail to comply with tax regulations. The governmentâ€™s initiative is aimed at closing tax loopholes and enhancing revenue collection. Reports also indicate that the Federal Board of Revenue (FBR) is drafting a comprehensive bill to abolish both non-filers and late-filers categories, addressing a long-standing gap in the countryâ€™s taxation framework. The category of â€œlate-filer,â€ introduced through the Finance Act of 2024, is already being contested in the Lahore High Court. The new legislation is expected to create an equitable system where every individual engaged in significant financial transactions, such as purchasing properties or vehicles, will be required to declare their sources of income. Under the proposed law, if a tax-compliant filer can justify their sources of income, their immediate family membersâ€”including spouses, parents, and dependent childrenâ€”would not be required to file separate tax returns for financial transactions. However, the primary filer will be responsible for providing the necessary details to explain the familyâ€™s income. The FBR aims to simplify compliance for ordinary citizens by allowing certain transactions, such as purchasing motorcycles or cars up to 1300cc, without stringent income justification. Property transactions up to Rs. 10 million may also be exempt from detailed scrutiny. However, for larger purchases or high-value transactions, individuals will need to declare their income sources to avoid penalties. In an effort to modernize the system, the FBR plans to launch a mobile app where taxpayers can declare their financial resources, reducing the need for time-consuming visits to tax offices. The app will serve as a digital platform for declaring income and ensuring compliance, making it easier for taxpayers to meet their obligations. The system will also link key financial activities, such as opening bank accounts and making investments, to tax filing, creating disincentives for non-compliance. These reforms are expected to be rolled out in the coming months, marking a significant transformation in Pakistanâ€™s tax regime. The governmentâ€™s proactive stance reflects its commitment to fostering economic transparency and ensuring accountability among all taxpayers.

Date: 2024-10-20

Details: Karachi, October 20, 2024 â€” In a recent report, the State Bank of Pakistan (SBP) revealed a concerning decline in the provincial tax revenue-to-GDP ratio, which fell to 0.7% during the fiscal year 2023-24, down from 0.8% in the previous year. This decrease occurred despite substantial nominal growth in provincial tax collections, which surged by 19.2%, nearly three times the rate of growth observed in the prior year. The SBP highlighted that this growth was driven predominantly by indirect taxes, particularly sales tax on services and other levies such as the infrastructure development cess. These indirect taxes played a pivotal role in bolstering provincial revenues amid a broader economic landscape characterized by inflationary pressures. Sales tax on services saw a significant rise in collection, mirroring the inflation-driven increase in the sales tax on goods. Services such as communication, which includes call and internet charges, saw a price hike of 7.8%, while the readymade food sector, encompassing restaurants and hotels, witnessed a staggering 23.7% rise in prices during FY24. This inflationary boost, the SBP noted, inflated the base of taxable services, thus contributing to higher tax receipts in nominal terms. However, the SBP report also pointed out a key concern: despite these nominal gains, the sales tax on services as a percentage of GDP remained stagnant at 0.5% for the sixth consecutive year. This stagnation, the SBP indicated, underscores the persistent challenges faced by provincial governments in expanding their tax base and enhancing revenue collection efficiency. The unyielding sales tax-to-GDP ratio, coupled with the overall dip in the provincial tax revenue-to-GDP ratio, signals the limitations of current revenue mobilization efforts. While inflation provided a temporary lift to collections, it appears insufficient to offset structural inefficiencies and an overreliance on indirect taxes. Moreover, the provincial governmentsâ€™ dependence on indirect taxes, which are less progressive and often more burdensome for lower-income groups, raises questions about the sustainability and equity of provincial tax systems. The SBPâ€™s analysis suggests that a more diversified and robust approach to revenue generation is essential if provinces are to improve their tax revenue-to-GDP ratio in future fiscal years. The report concludes by emphasizing the need for comprehensive reforms in provincial tax policy, with a focus on expanding the tax net, improving compliance, and enhancing the capacity of provincial tax authorities to mobilize resources more effectively. Without these reforms, the provincial tax revenue-to-GDP ratio risks further decline, potentially jeopardizing provincial fiscal sustainability.

Date: 2024-10-20

Details: Karachi, October 20, 2024 â€” The State Bank of Pakistan (SBP) has attributed a significant surge in Federal Board of Revenue (FBR) tax collection for the fiscal year 2023-24 to elevated interest rates. In its latest report, the SBP highlighted that higher interest rates played a pivotal role in boosting taxes, particularly through income tax paid by banks and withholding taxes on individual earnings from bank deposits and government securities investments. The report notes that banks reaped substantial profits due to the governmentâ€™s increased borrowing at higher interest rates, which translated into significant tax payments. The banking sector witnessed a 41.4% rise in net investments during CY23, a stark contrast to the 26.4% increase in CY22. The bulk of these investments were concentrated in government securities, leading to a notable increase in banksâ€™ net interest income as a percentage of their gross income, which climbed from 79.8% in CY22 to 82.9% in CY23. The SBP report underscores the role of withholding taxes, which saw an uptick due to profits earned by individuals from bank accounts and government securities. This surge in profits, according to the central bank, was driven by two key factors: attractive returns due to higher interest rates and a growing tendency among individuals to invest in risk-free government securities as a hedge against inflation. This behavior, the SBP explained, aligns with historical patterns, where individuals flock to secure investments during periods of elevated interest rates. Additionally, the SBP pointed to heightened public awareness about risk-free investment opportunities, which likely spurred further investment in government securities. This shift toward safer investments helped fuel the increase in tax collection related to bank interest and securities. The report also highlighted the role of inflation in bolstering indirect taxes. Although inflation decelerated toward the end of FY24, its elevated levels still contributed significantly to higher tax collection. Around half of the 26.8% increase in domestic sales tax was attributed to soaring electricity prices, while rising prices of commodities such as sugar, cement, and cigarettes further boosted sales tax and Federal Excise Duty (FED) collection. Moreover, corporate profits saw an upswing, with many non-financial firms benefiting from improved net profit margins. This rise in profitability translated into higher dividend payments to shareholders, leading to an increase in withholding tax collections. Lastly, the SBP noted that the depreciation of the Pakistani rupee, combined with a 14.9% increase in import volumes (in PKR terms), helped offset lower unit values of imports. Consequently, taxes collected at the import stage surged by 20.2%, reversing the previous yearâ€™s decline. The SBP report paints a complex picture of the economic landscape, where high interest rates, inflation, and shifting investment behaviors converge to drive robust tax collection in FY24.

Date: 2024-10-20

Details: Karachi, October 20, 2024 â€” The State Bank of Pakistan (SBP) has attributed a significant surge in Federal Board of Revenue (FBR) tax collection for the fiscal year 2023-24 to elevated interest rates. In its latest report, the SBP highlighted that higher interest rates played a pivotal role in boosting taxes, particularly through income tax paid by banks and withholding taxes on individual earnings from bank deposits and government securities investments. The report notes that banks reaped substantial profits due to the governmentâ€™s increased borrowing at higher interest rates, which translated into significant tax payments. The banking sector witnessed a 41.4% rise in net investments during CY23, a stark contrast to the 26.4% increase in CY22. The bulk of these investments were concentrated in government securities, leading to a notable increase in banksâ€™ net interest income as a percentage of their gross income, which climbed from 79.8% in CY22 to 82.9% in CY23. The SBP report underscores the role of withholding taxes, which saw an uptick due to profits earned by individuals from bank accounts and government securities. This surge in profits, according to the central bank, was driven by two key factors: attractive returns due to higher interest rates and a growing tendency among individuals to invest in risk-free government securities as a hedge against inflation. This behavior, the SBP explained, aligns with historical patterns, where individuals flock to secure investments during periods of elevated interest rates. Additionally, the SBP pointed to heightened public awareness about risk-free investment opportunities, which likely spurred further investment in government securities. This shift toward safer investments helped fuel the increase in tax collection related to bank interest and securities. The report also highlighted the role of inflation in bolstering indirect taxes. Although inflation decelerated toward the end of FY24, its elevated levels still contributed significantly to higher tax collection. Around half of the 26.8% increase in domestic sales tax was attributed to soaring electricity prices, while rising prices of commodities such as sugar, cement, and cigarettes further boosted sales tax and Federal Excise Duty (FED) collection. Moreover, corporate profits saw an upswing, with many non-financial firms benefiting from improved net profit margins. This rise in profitability translated into higher dividend payments to shareholders, leading to an increase in withholding tax collections. Lastly, the SBP noted that the depreciation of the Pakistani rupee, combined with a 14.9% increase in import volumes (in PKR terms), helped offset lower unit values of imports. Consequently, taxes collected at the import stage surged by 20.2%, reversing the previous yearâ€™s decline. The SBP report paints a complex picture of the economic landscape, where high interest rates, inflation, and shifting investment behaviors converge to drive robust tax collection in FY24.

Date: 2024-10-20

Details: Karachi, October 20, 2024 â€“ The Federal Board of Revenue (FBR) has introduced updated guidelines for tax officials outlining procedures for recovering unpaid taxes through property auctions or, in certain cases, arrest of defaulters. These measures are intended to strengthen enforcement and ensure efficient tax collection from those failing to meet their obligations. The guidelines fall under Section 138 of the Income Tax Ordinance, 2001, which details the process for tax recovery through the auction or sale of a defaulterâ€™s property. Section 138 grants tax authorities the legal framework to pursue overdue taxes when standard collection methods fail. According to the FBR, the procedure involves several key steps: 1. Issuance of Notice: The first step involves the Commissioner of Inland Revenue issuing a formal notice to the taxpayer in a prescribed form, requesting payment of the overdue tax within a specified period. This is a crucial opportunity for taxpayers to settle their dues before further action is taken. 2. Modes of Recovery: If the taxpayer fails to comply with the notice within the given timeframe, or if an extension is not granted by the Commissioner, authorities may proceed with one or more of the following recovery methods: o Attachment and Sale of Property: The taxpayerâ€™s movable or immovable property may be seized and auctioned off to recover the outstanding amount. o Appointment of a Receiver: A receiver may be appointed to manage the taxpayerâ€™s property, with any profits from the property used to clear the tax debt. o Arrest and Detention: In extreme cases, the taxpayer may be arrested and detained for a period not exceeding six months. o Other Modes: Additional measures such as those listed in Section 48 of the Sales Tax Act, 1990, may also be employed to recover the tax. 3. Legal Authority: For enforcement, the Commissioner holds the same authority as a Civil Court under the Code of Civil Procedure, 1908. This grants tax officials substantial legal power to recover overdue amounts through property seizures and other court-backed measures. 4. Rules and Regulations: The FBR retains the right to create and update rules to govern the detailed procedures involved in these recovery actions, ensuring that all processes comply with the law while remaining efficient and effective. The FBRâ€™s updated approach highlights its determination to combat tax evasion and ensure that defaulters face consequences, including property auctions and arrests if necessary. These guidelines are expected to enhance transparency and accountability in the tax recovery process, reinforcing the governmentâ€™s commitment to efficient tax administration.

Date: 2024-10-18

Details: October 18, 2024 Karachi, October 18, 2024 â€“ In a striking revelation, the State Bank of Pakistan (SBP) has shed light on the alarming state of Pakistanâ€™s C-Efficiency Ratio (CER) and the effective General Sales Tax (GST) rate during the fiscal year 2023-24. The SBPâ€™s findings underscore critical challenges in the countryâ€™s tax enforcement and base expansion, painting a concerning picture for policymakers. The C-efficiency ratio, or CER, is a crucial metric in determining a countryâ€™s tax efficiency. It measures the ratio of actual sales tax revenues to the product of the standard GST rate and final consumption. A higher CER indicates a well-enforced, broad-based VAT system with few exemptions, while a lower CER signals base erosion due to exemptions, concessions, or poor enforcement. A CER of 100% would suggest a perfectly enforced VAT with no loopholes, exemptions, or concessions. However, most countries fall short of this ideal due to various factors, such as policy choices aimed at protecting lower-income households or enforcement difficulties. The SBP revealed that Pakistanâ€™s CER stood at a meager 20.7% in FY24, down from an already low 22.6% in FY23. This sharp decline illustrates a further erosion of Pakistanâ€™s GST revenue base, signaling worsening compliance and enforcement. In contrast, countries like New Zealand boast one of the highest CERs globally, at around 90%, with minimal exemptions limited to areas like donated goods, financial services, penalty interest, and fine metals. The implications of Pakistanâ€™s low CER are stark. As the SBP report highlights, Pakistanâ€™s effective GST rate is now merely one-fifth of its actual weighted GST rate on goods and services. This signifies that GST is being applied to an ever-narrowing tax base, with significant gaps in compliance and enforcement, resulting in lost revenue. While the government introduced corrective measures in the Finance Act 2023 to broaden the tax base, these efforts have yet to yield the desired results, the SBP added. The SBP further stated that the Finance Act 2024 aimed to further rationalize sales tax expenditures, marking a positive step towards broadening the base. However, elevated GST rates on goods and services remain a pressing concern. High GST rates can exacerbate compliance challenges, as taxpayers face increased burdens, leading to potential evasion or avoidance. Thus, the current situation presents a dual challenge: balancing tax efficiency with the need to alleviate the tax burden on citizens. International best practices emphasize that a broad-based, uniformly enforced, and relatively low sales tax rate is more likely to generate higher revenue yields. Cross-country comparisons consistently show an inverse relationship between CER and GST rates, meaning that lower rates paired with better enforcement can lead to more effective revenue collection. SBPâ€™s sensitivity analysis underscores the immense potential for revenue gains if Pakistan improves its CER. The report suggests that by broadening the tax base and enhancing enforcement, revenue collection could increase significantly. Even if the GST rate were lowered to 13-15%, the CER could rise, resulting in a potential 1.5-fold increase in collections to Rs 5.4 trillion. In a scenario where CER and GST rates align with international medians (52% CER and 15% GST), Pakistan could witness a 2.1-fold rise in collections, reaching Rs 7.7 trillion. These findings highlight that improved tax efficiency, combined with better compliance and enforcement, could lead to substantial revenue gains, potentially allowing the government to reduce the standard GST rate without jeopardizing revenue targets.

Date: 2024-10-18

Details: Recorder Report Published October 18, 2024 LAHORE: Punjab Finance Minister Mian Mujtaba Shuja-ur-Rehman noted the disparities in the tax burden, saying that tier-1 retailers, representing only 10 percent of the sector, shoulder a 25-30 percent tax burden while smaller retailers contribute less than five percent; hence, he called for reforms to ensure a fairer tax structure and create an environment that promotes business growth across the board. He expressed these views while addressing the 4th Pakistan Future of Retail Business Summit and Expo, held here on Thursday, with theme â€˜Building a Stronger and Smarter Retail Ecosystemâ€™ which addressed the evolving dynamics of the retail sector. The Minister emphasised the need to shift Pakistanâ€™s economic focus beyond agriculture and industry. He highlighted the significant role of the retail and wholesale sectors, which contribute over Rs 20 trillion to the national economy, making up 18 percent of the GDP and providing employment to over 10 million people. He averred that retail is a vital component of domestic commerce and plays a crucial role in driving national prosperity. He noted the substantial progress in Pakistanâ€™s retail landscape, with organised retail stores and the growth of e-commerce bringing local brands to international prominence, boosting the countryâ€™s export revenues. Despite these successes, the Minister acknowledged challenges, particularly the fact that 90 percent of the retail sector operates informally, hindering its full potential. He emphasised the need to modernise regulations and implement a single-window compliance system at all levels of government. â€œStreamlining the regulatory framework would encourage retailers to formalise their businesses, enhance tax contributions and foster a more competitive market,â€ he added. On this occasion, the Minister outlined several initiatives undertaken by the Punjab government to support the retail sector and boost economic growth. These included the establishment of Special Economic Zones (SEZs) to attract both local and international investment, fostering industrial growth and creating job opportunities. He also highlighted efforts to simplify business operations through digital platforms and one-window services, making it easier for businesses to start and expand with reduced bureaucratic hurdles. â€œIn addition, the Punjab Trade and Investment Policy is aimed at enhancing the competitiveness of sectors like retail, logistics, and manufacturing. The government is also focusing on infrastructure development, ensuring improved connectivity across the province, and providing essential logistics support to businesses. Small and medium enterprises (SMEs) are being offered financial and technical assistance to help them scale up and compete in global markets,â€ he said and lauded the Punjab Skills Development Fund (PSDF), which equips the youth with vocational and technical skills, aligning them with the demands of modern industries. Mujtaba Shuja-ur-Rehman reaffirmed the governmentâ€™s commitment to creating an environment conducive to business that fosters innovation and growth in the retail sector. He noted that the modernisation of the retail industry would lead to significant job creation, enhanced exports and overall economic prosperity for Pakistan. He appreciated the role of platforms like the Future of Retail Business Summit in encouraging dialogue between stakeholders and addressing challenges that can propel the sector forward. He encouraged the participants to capitalise on this opportunity to build a resilient and dynamic retail ecosystem that benefits not only the business community but the entire economy. Copyright Business Recorder, 2024

Date: 2024-10-18

Details: October 18, 2024 Karachi, October 18, 2024 â€“ The Federal Board of Revenue (FBR) is poised to unveil the new Active Taxpayers List (ATL) for the tax year 2024 on November 1, 2024, marking a pivotal moment in Pakistanâ€™s tax management system. The launch is contingent on the return filing deadline not being extended beyond October 31, 2024, following the series of recent deadline extensions. The FBR, through an official notification, SRO 1638(I)/2024, made the announcement on Friday, outlining crucial amendments in its procedures to streamline the process. Historically, the FBR had published its ATL annually on March 1st, based on the tax returns filed by the end of February each year. However, under the latest directive, this timeline has shifted significantly. The new amendment stipulates that the FBR will release the updated ATL the very next day following the final extended filing deadline. In this case, if the October 31, 2024 deadline stands firm, the new ATL will be issued on November 1, 2024. The filing deadline for tax year 2024 was initially set for September 30, 2024, but was later extended to October 14, 2024, and then once again to October 31, 2024. Although some taxpayers may be hopeful for another extension, FBR insiders indicate that it is highly unlikely the deadline will be pushed further. This expectation solidifies the likelihood of the new ATL being published on November 1. Significance of ATL for Active Taxpayer Status The Active Taxpayers List holds significant implications for businesses and individuals in Pakistan. Taxpayers whose names appear on the ATL are entitled to a host of benefits, including lower withholding tax rates on various transactions and eligibility for participation in public procurement processes. The list essentially serves as a certification of compliance, rewarding those who fulfill their tax obligations in a timely manner. According to the amendment, taxpayers who fail to file their returns by the stipulated deadline will lose their active taxpayer status, unless they secure prior approval from the Commissioner of Inland Revenue. Those who file late may still be added to the ATL, but only after paying a surcharge. The FBRâ€™s announcement emphasized that the ATL for tax year 2023 will expire on October 31, 2024. Only individuals and companies that have filed their income tax returns for the tax year 2024 by the deadline will maintain their active taxpayer status in the new ATL. Non-filers after the deadline will have to bear the consequences of being excluded from the ATL, which includes facing higher withholding taxes and other financial disadvantages. Amendment for Timely ATL Updates A crucial change introduced in the latest notification is the shift from weekly updates to daily updates for the ATL. This procedural refinement ensures that individuals or companies filing their returns after the initial deadline but paying the requisite surcharge are swiftly included in the ATL, providing a real-time reflection of compliance. The FBR has also catered to the unique circumstances of companies and associations of persons (AOPs) formed after June 30, 2024. These entities will automatically be included in the ATL, even though their tax returns are not yet due, providing them with timely access to the benefits of active taxpayer status. Further clarifying the amendment, the FBR extended its provisions to those filing returns in Azad Jammu and Kashmir (AJK) or Gilgit-Baltistan (GB). If a person has filed returns with the respective regional revenue boards, their names will be included in the national ATL, provided they have either temporary or permanent addresses in these territories. Enforcement and Compliance The swift issuance of the ATL following the filing deadline reflects the FBRâ€™s commitment to bolstering tax compliance and modernizing Pakistanâ€™s tax infrastructure. The FBRâ€™s decision to make the ATL a dynamic, daily-updated list demonstrates a proactive approach toward ensuring tax transparency and enhancing the efficacy of the system. As the new ATL looms, tax professionals, businesses, and individual taxpayers are urged to ensure they meet the filing deadline to avoid the financial repercussions associated with being excluded from the list. Late filers, while allowed to pay a surcharge to restore their names on the list, face the loss of various benefits in the interim, a prospect that has spurred a flurry of activity among taxpayers in the run-up to the deadline. With this announcement, the FBR has set the stage for a more agile, responsive, and transparent tax administration, underscoring the importance of punctual tax return filing for those who wish to enjoy the privileges of being on the Active Taxpayers List. As the deadline approaches, the nationâ€™s taxpayers brace themselves for a new chapter in tax compliance that aims to enhance fiscal responsibility and strengthen Pakistanâ€™s economy.

Date: 2024-10-18

Details: October 18, 2024 Karachi, October 18, 2024 â€“ Major textile exporters have raised concerns about Pakistanâ€™s international reputation following the Federal Board of Revenueâ€™s (FBRâ€™s) aggressive crackdown on sales tax fraud. The Pakistan Textile Council (PTC), representing leading textile and apparel exporters, has issued a stark warning that foreign buyers are losing confidence in the countryâ€™s credibility due to the FBRâ€™s recent actions. In a letter addressed to Prime Minister Shehbaz Sharif, the PTC urged the government to halt the FBRâ€™s ongoing campaign, which they described as a â€œdisturbing and unjustified harassmentâ€ of exporters and manufacturers. The textile sector, which accounts for nearly 30% of Pakistanâ€™s total exports, is facing severe disruptions as a result of the FBRâ€™s aggressive approach, the council noted. While the PTC reaffirmed its commitment to supporting legitimate efforts to combat tax evasion and fraud, it condemned the current crackdown as disproportionately harmful to lawful businesses. â€œThis campaign is not only damaging Pakistanâ€™s most crucial industries but is also jeopardizing the economic recovery that your administration has worked tirelessly to achieve,â€ the PTC said in its letter to the prime minister. The council expressed deep concern over the FBRâ€™s alleged misuse of governmental authority, accusing the tax body of intimidating entrepreneurs and executives under the guise of fighting tax fraud. â€œThese unlawful actions are doing more harm than good, eroding business confidence and demoralizing the very sectors that generate employment and drive exports,â€ the PTC warned. The international fallout has been swift. According to the PTC, foreign buyers of Pakistani textiles have already raised red flags, voicing concerns about the countryâ€™s reliability as a supplier. This erosion of trust could have devastating consequences for Pakistanâ€™s export economy, leading to suppressed economic activity, job losses, shrinking exports, and ultimately, further strain on tax revenues. While the PTC emphasized its support for holding bad actors accountable, it strongly opposed what it called the â€œcollective punishmentâ€ of the entire business community. â€œThis will not yield higher legitimate revenues nor will it result in meaningful improvements in tax governance,â€ the council stated. â€œThe root cause of Pakistanâ€™s low tax-to-GDP ratio lies with the corrupt machinery of the FBR itself, not with law-abiding businesses.â€ The PTC urged Prime Minister Sharif to intervene personally to end what it described as the FBRâ€™s â€œreign of terrorâ€ and to foster a more constructive relationship between the tax authorities and the business community to ensure sustainable economic growth. E-INTERMEDIARIES FACE LICENSE CANCELLATION IN TAX FRAUD CASES October 18, 2024 Karachi, October 18, 2024 â€“ The Federal Board of Revenue (FBR) has initiated stringent legal action against e-intermediaries involved in widespread sales tax fraud. This decisive move follows the identification of numerous fraud cases linked to the manipulation of sales tax records, particularly through fake and flying invoices, as well as the suppression of sales. The FBR has signaled its intent to cancel the licenses of implicated e-intermediaries, holding them jointly responsible alongside company executives for their role in facilitating tax evasion. According to official sources, the FBR has launched prosecution under the law against both e-intermediaries and company officials complicit in these fraudulent activities. The board emphasized that e-intermediariesâ€”appointed under Section 52A of the Sales Tax Act, 1990â€”are entrusted with filing electronic returns and other critical documents on behalf of registered taxpayers. However, when these intermediaries knowingly or willfully provide false information to evade taxes, they become equally accountable. Under the Sales Tax Act, 1990, sub-section (5) of Section 52A explicitly states that e-intermediaries are jointly and severally liable alongside the registered person if false or incorrect data is submitted with the intent to avoid tax liabilities. This legal provision empowers the FBR to not only recover unpaid taxes but also initiate broader legal consequences against those involved. â€œIn cases where the use of fake or flying invoices is established, the FBR officers are instructed to proceed against these e-intermediaries under Section 37A of the Act,â€ said an official source. â€œThis includes immediate suspension and subsequent cancellation of their licenses, following the prescribed procedure under the sales tax law.â€ The crackdown comes amid growing concerns over the rising trend of sales tax fraud in Pakistan, where unscrupulous businesses have exploited loopholes in the system to evade taxes and claim unwarranted refunds. E-intermediaries, who are tasked with ensuring the proper filing of tax returns, have been found to play a pivotal role in these schemes by submitting falsified documents on behalf of registered entities. The Sales Tax Act, 1990 provides clear legal recourse for such cases. It stipulates that an e-intermediary, knowingly submitting false documents or declarations to evade tax payments, will be held accountable for the recovery of any tax shortfall or excess refunds granted due to the misrepresentation. The law also allows for additional punitive measures, including criminal prosecution, which could result in significant penalties or imprisonment for those involved. The FBRâ€™s aggressive stance marks a major step towards tightening the regulatory framework and restoring public confidence in the countryâ€™s tax system.

Date: 2024-10-17

Details: Recorder Report Published October 17, 2024 ISLAMABAD: The Federal Board of Revenue (FBR) has failed to timely submit comments before the Federal Tax Ombudsman (FTO), who is investigating the FBR for burdening taxpayers with heavy cost for online integration of their businesses through a private limited company. The FTO is also investigating the FBR for violation of privacy under section 216 of the Income Tax Ordinance, 2001 and burdening the taxpayers with heavy cost in forcefully implementation of SRO.428 for online integration of businesses and configure retail outlets with FBRâ€™s e-computerized system. It is reliably learnt that the office of the FTO had registered complaint against the FBR and issued notice to Chairman FBR and CCIR to submit comments on or before 16.10.2024 on the allegations contained in the complaints but FBR has not filed any comments despite service of legal notices issued under FTO Ordinance, 2000. When contacted, tax lawyer Waheed Shahzad Butt informed earlier on the similar issue Peshawar High Court has frozen the salary of FBR Chairman for not submitting reply to repeated reminders in a pending tax case. The PHC had issued instructions to the Accountant General of Pakistan (AGP) to implement the court order. Waheed was of the view that taxpayers expected the enforcement of law and Constitutional rights and exercised the powers conferred on FBR by the Legislature honestly in the interest of Pakistan. However, some tax officials are involved in violation of constitutional rights of the taxpayers for claiming huge rewards out of precious taxpayerâ€™s money but they do not care to obey the orders of courts/tax ombudsman. Tax officials misusing the law must be removed from the services in the process of re-structuring/overhauling of FBR as ordered by the Apex authority Special Investment Facilitation Council (SIFC), he accused. To avoid heavy cost of litigation and wastage of precious time/resources, kindly issue recommendations to the FBR to provide complete documentation, SOP(s), Flow Chart of Fiscal/tax information provided to private company selected by FBR, breach of personal privacy under the law (Section 216), exorbitant charges, similar practices in neighbouring and other countries, lawful mandate to nominate one private company across Pakistan for point of sales (POS) activities, and other ancillary documents/data. The FBR should initiate proceedings under Section 198 of the ITO, 2001 against tax employees responsible for this biased, one sided forceful implementation of a good law through a private limited company at exorbitant cost, in the light of the apex court judgments PLD 2021 SC 1 and PLD 2022 SC 119, the complainant added. Copyright Business Recorder, 2024

Date: 2024-10-17

Details: October 17, 2024 Karachi, October 17, 2024 â€“ The Federal Board of Revenue (FBR) has eased the requirement for submitting an affidavit alongside the sales tax return for September 2024, which is due to be filed in October. This relaxation follows appeals from trade bodies and aims to build trust among all stakeholders, the FBR announced on Thursday. The decision comes after considerable pressure from trade bodies, which had expressed concerns over the new affidavit condition. In response, the FBR stated that alternative proposals to curb the submission of falsified sales tax returns would be accepted until October 31, 2024. These proposals will help shape future policy in ensuring transparency in the tax submission process. While the affidavit requirement has been relaxed, the FBR stressed that this does not signal any weakening of enforcement under the Sales Tax Act of 1990. The FBR reaffirmed that false declarations, the use of fake or flying invoices, and the suppression of sales remain serious offences. Taxpayers are urged to exercise extreme caution when filing their returns, as violations can lead to both monetary penalties and criminal prosecution under Section 33 of the Sales Tax Act. According to the FBR, the decision to introduce the affidavit was driven by alarming findings during a data-driven analysis of sales tax returns filed by major businesses. This analysis revealed widespread fraudulent practices, particularly a lack of due diligence by authorized representatives and Chief Financial Officers (CFOs). Discrepancies were found within sectors and sub-sectors, suggesting that many companies were not accurately reporting their sales. The FBR underscored that the affidavit was meant to hold CFOs and authorized representatives accountable for the accuracy of the tax returns they submit. By requiring an affidavit, the FBR intended to emphasize the existing legal responsibilities of these individuals under Section 26 of the Sales Tax Act. However, after receiving numerous complaints from trade bodies, including the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), about the difficulties caused by the affidavit, the FBR chose to temporarily relax the condition. The FBR clarified that the affidavit did not impose any new legal obligations but served as a reminder to taxpayers of the potential criminal liability for submitting false information. Moving forward, the Board remains committed to enhancing tax compliance while ensuring that stakeholdersâ€™ concerns are addressed in a constructive manner. The relaxation of the affidavit requirement represents an effort to balance regulatory enforcement with the practical challenges faced by businesses.

Date: 2024-10-17

Details: October 17, 2024 Karachi, October 17, 2024 â€“ The State Bank of Pakistan (SBP) on Thursday proposed a series of tax reforms aimed at significantly increasing the countryâ€™s tax-to-GDP ratio, which has stagnated at approximately 10% for the last two and a half decades. This figure is notably below Pakistanâ€™s estimated tax potential, which is believed to be 22.3% of GDP. In comparison to other emerging and developing economies, as well as regional peers, Pakistanâ€™s tax-to-GDP ratio is one of the lowest, underscoring the need for urgent reforms. Given that federal tax collections make up around 90% of the total tax revenue, the SBP emphasized the importance of overhauling federal tax structures. Drawing on international best practices, the central bank outlined several key recommendations aimed at raising Pakistanâ€™s tax-to-GDP ratio and improving overall tax efficiency. 1. Proper Implementation of Value Added Tax (VAT) VAT is one of the most commonly used consumption-based taxes worldwide, yet it remains underutilized in Pakistanâ€™s tax system. A lack of trust between taxpayers and tax authorities hampers the effectiveness of the VAT refund and input tax credit process, which is crucial for VATâ€™s success. The tax base for VAT in Pakistan is narrow, often leading to rate increases and delays in refunds, which creates additional pressure to meet revenue targets. To optimize VAT, the SBP recommends streamlining the refund process through digital solutions to reduce human intervention. The introduction of a broad-based, low, and uniform VAT on goods and services across all regions is also suggested. This approach would strengthen VATâ€™s role as a vital indirect tax and reduce the administrative burden on businesses. 2. Rationalization of Corporate Income Tax (CIT) At 29%, Pakistanâ€™s corporate income tax (CIT) is among the highest in the world, with certain sectors such as banking subject to even higher rates. The inclusion of additional taxes, like the super tax, further raises the effective CIT rate, which distorts economic incentives and encourages tax evasion. High CIT rates have a detrimental effect on corporate investment, foreign direct investment, innovation, and overall economic growth. The SBP proposes lowering the CIT rate to encourage business investment and innovation. Rationalizing the corporate tax structure could also curb tax evasion and fraudulent practices, ultimately increasing revenue collection. 3. Rationalizing Tax Expenditure Tax expenditures, including exemptions, concessional rates, and tax holidays, account for 4.6% of Pakistanâ€™s GDPâ€”substantially higher than the 3.2% average in low-middle income countries. The SBP recommends rationalizing or eliminating these expenditures, except for those benefiting exporters, after conducting cost-benefit analyses. Exemptions granted through statutory regulatory orders (SROs) have introduced ad-hocism into the tax system, which undermines predictability and fairness. This system often favors powerful business lobbies, leaving small and medium enterprises (SMEs) and other taxpayers at a disadvantage. 4. Simplification of the Tax System Pakistanâ€™s tax system is complex and fragmented, resulting in higher compliance and administrative costs. Disparate tax bases, such as VAT on goods versus services and taxes on agricultural versus non-agricultural incomes, create unnecessary complications. The SBP suggests harmonizing tax rates and simplifying tax laws to reduce inter-jurisdictional frictions and compliance costs. One positive step towards simplification is the Federal Board of Revenueâ€™s (FBR) implementation of a Single Sales Tax Portal/Return system for the telecommunications sector, which has reduced the number of returns filed by the sector. However, sales tax rates still vary across jurisdictions, and broader reforms are needed to simplify the system across all sectors. 5. Efficient Use of Federal Excise Duty (FED) Federal excise duty (FED) can serve as a complementary tool for revenue mobilization, especially as long-term reforms take effect. However, FED collection in Pakistan is low and declining. The SBP suggests removing distortions caused by varied tax rates and improving the implementation of FED to enhance its effectiveness as a revenue-generating tool. 6. Improving Tax Administration Enhancing tax administration through the use of information and communications technology (ICT) is critical for improving enforcement and compliance. Currently, the FBRâ€™s spending on ICT as a percentage of total operational expenditure is low. Digital solutions like the Track and Trace System and FASTER Plus, though in place, face operational challenges and lack proper integration. To maximize the benefits of these technologies, the SBP suggests applying solutions like the Single Sales Tax Portal and Track and Trace System comprehensively across all sectors. Additionally, the cost of adopting digital tools, such as point of sale (POS) machines, should be reduced to encourage widespread use, helping to formalize the economy and expand the tax base. The introduction of risk-based audits in 2019 was a step in the right direction, but these audits are yet to be fully applied across all levels of the tax apparatus. Manual interventions still dominate regional tax offices, which undermines the effectiveness of audits. The SBP recommends phasing out these manual processes and strengthening enforcement strategies to improve recovery rates. 7. Broad-based Ownership of Reforms Finally, the SBP emphasizes the need for broad-based ownership of all these reforms. Successful implementation requires the cooperation of federal and provincial governments, tax authorities, and businesses. A unified commitment to these reforms will be key to transforming Pakistanâ€™s tax system, increasing the tax-to-GDP ratio, and fostering sustainable economic growth. In conclusion, the SBPâ€™s recommendations provide a comprehensive roadmap for raising Pakistanâ€™s tax-to-GDP ratio. By implementing these reforms, Pakistan can strengthen its revenue base, reduce fiscal deficits, and promote long-term economic growth. However, success will depend on the political will and the commitment of all stakeholders to drive these changes forward.

Date: 2024-10-17

Details: October 17, 2024 Section 123 of Pakistanâ€™s Income Tax Ordinance, 2001, provides guidelines for provisional assessment in cases where concealed or undisclosed assets are discovered by the government. This section enables the Commissioner of the Federal Board of Revenue (FBR) to take swift action against individuals who have hidden assets that were not reported for taxation purposes. Key Provisions of Section 123: 1. Provisional Assessment of Concealed Assets: According to Subsection (1) of Section 123, if a concealed asset belonging to an individual is uncovered by any department or agency of the Federal Government or Provincial Government, the Commissioner of Inland Revenue may issue a provisional assessment order. This order is issued for the last completed tax year of the individual, taking into account the hidden asset. It can be issued before any formal assessment order under Section 121 or any amended assessment order under Section 122 is finalized. The provisional order ensures that the concealed asset is included in the tax calculations for the relevant year. 2. Provisional Assessment of Offshore Assets: Subsection (1A) extends the Commissionerâ€™s powers to offshore assets, which are often more challenging to track. If an offshore asset, which was not previously declared by the taxpayer, is identified by the Commissioner or any government agency, a provisional assessment order may be issued. Similar to concealed assets, this provisional order covers the last completed tax year of the individual and incorporates the value of the newly discovered offshore asset. This provision addresses tax evasion through hidden offshore accounts or investments. 3. Timely Finalization of Provisional Assessments: Subsection (2) emphasizes that provisional assessments must be finalized â€œas soon as practicable.â€ This means the Commissioner is required to conclude the provisional assessment process promptly, ensuring that the taxpayerâ€™s liability is accurately determined based on the hidden assets. 4. Definition of Concealed Asset: Under Subsection (3), a â€œconcealed assetâ€ is defined as any property or asset that, in the opinion of the Commissioner, was acquired using income that is subject to taxation under the Income Tax Ordinance but was not disclosed by the taxpayer. Purpose and Impact: The main objective of Section 123 is to combat tax evasion by targeting hidden or undeclared assets, whether domestic or offshore. By allowing the issuance of provisional assessment orders, this section ensures that the revenue authorities can quickly incorporate concealed assets into tax calculations, preventing individuals from benefiting from non-compliance with tax laws.

Date: 2024-10-17

Details: October 17, 2024 Karachi, October 17, 2024 â€“ In a positive turn for Pakistanâ€™s economic stability, the countryâ€™s net foreign exchange (forex) reserves saw a modest uptick of $64 million by the week ending October 10, 2024, as reported by the State Bank of Pakistan (SBP) on Thursday. The countryâ€™s total forex reserves now stand at $16.111 billion, marking a slight increase from $16.047 billion recorded a week prior, on October 4, 2024. The noteworthy expansion in reserves comes largely from the SBPâ€™s holdings, which experienced a robust surge. The official reserves held by the SBP swelled by $215 million during the same period, rising from $10.808 billion to $11.023 billion. This significant rise can be primarily attributed to inflows from the International Monetary Fund (IMF). Pakistan recently received a tranche of $1 billion under the IMFâ€™s Extended Fund Facility (EFF), which has bolstered the central bankâ€™s reserves and provided a much-needed cushion against external shocks. The IMFâ€™s Extended Fund Facility has been pivotal in stabilizing Pakistanâ€™s financial sector, especially as the country navigates challenges including high inflation, fiscal imbalances, and fluctuating global commodity prices. This injection of foreign capital strengthens Pakistanâ€™s ability to meet its external obligations and stabilize its currency, reducing pressure on the rupee. However, while the SBPâ€™s reserves received a boost, the commercial banking sector witnessed a significant decline in its forex holdings. The reserves held by commercial banks plummeted by $151 million, falling from $5.239 billion to $5.088 billion in the week ending October 10, 2024. This stark contrast highlights a potential liquidity strain in the private banking sector, which could reflect broader economic pressures on the domestic market. The divergence between rising central bank reserves and falling commercial bank holdings suggests a complex interplay of forces, potentially driven by market demand for foreign currency, external debt repayments, or reduced foreign inflows into the private sector. This dynamic will be closely watched by market analysts, as it may signal emerging challenges in managing liquidity and foreign exchange within the commercial banking system. Overall, the rise in Pakistanâ€™s net forex reserves, fueled by the SBPâ€™s inflows, is a positive development, yet the decline in commercial bank reserves suggests underlying vulnerabilities that may require further attention. The countryâ€™s financial authorities will need to maintain vigilance in balancing fiscal discipline with the demands of the domestic economy in the months ahead.

Date: 2024-10-17

Details: October 17, 2024 Karachi, October 17, 2024 â€“ The State Bank of Pakistan (SBP) has projected the countryâ€™s gross domestic product (GDP) growth at 3.5% for the fiscal year 2024-25, just shy of the governmentâ€™s target of 3.6%. This projection was outlined in the SBPâ€™s Annual Report on Pakistanâ€™s Economy for FY24, released on Thursday, which also forecast inflation at 13.5%, higher than the governmentâ€™s target of 12%. The SBPâ€™s projection is grounded in the countryâ€™s ongoing macroeconomic stabilization, bolstered by successful engagement with the International Monetary Fund (IMF) and improved global economic conditions. Despite the slightly lower GDP estimate, the report emphasized Pakistanâ€™s improving economic trajectory, driven by recovery in key sectors, rising remittances, and a stabilizing external account. Key Economic Indicators One of the reportâ€™s standout observations was the forecast of remittances inflows for FY25 at $33 billion, surpassing the governmentâ€™s target of $30.5 billion. This steady increase in remittances is expected to provide critical support for Pakistanâ€™s foreign exchange reserves, which have shown signs of improvement in recent months. As of the week ending October 4, 2024, the State Bankâ€™s reserves had risen to $16.05 billion, up from $15.983 billion the previous week, indicating stronger foreign inflows. On the fiscal front, the report painted a mixed picture. The fiscal deficit is expected to remain around 6.5% of GDP, exceeding the governmentâ€™s target of 5.9%. Similarly, the current account deficit is forecast to hover around 1%, well within the manageable range given the narrowing trade deficits and improving remittance inflows. The SBP noted that sustained fiscal consolidation efforts would be vital to maintaining economic stability in the coming years. Macroeconomic Improvements in FY24 The SBPâ€™s report highlighted the notable improvement in Pakistanâ€™s macroeconomic conditions during FY24. Stabilization policies, combined with favorable external factors, helped Pakistan navigate through a challenging year. Agricultural productivity played a significant role in the countryâ€™s economic recovery, with record wheat and rice harvests and a rebound in cotton production providing a much-needed boost. The narrowing of the current account deficit to a 13-year low in FY24 was a significant achievement. Strong growth in remittances and exports managed to offset a slight uptick in imports. Additionally, the IMFâ€™s Stand-By Agreement (SBA), signed earlier this year, helped catalyze further inflows from multilateral and bilateral sources, contributing to a buildup of foreign exchange reserves and easing pressure on the rupee. A gradual appreciation of the exchange rate, combined with higher-than-anticipated fiscal consolidation, resulted in a notable decline in the public debt-to-GDP ratio in FY24. The SBP maintained its tight monetary stance, keeping the policy rate at 22% for much of FY24, a necessary move to contain inflation and stabilize financial markets. Inflation and Policy Adjustments Inflation in FY24 dropped from its peak of 38% in May to 12.6% by June, averaging 23.4% for the yearâ€”an improvement compared to the previous yearâ€™s 29.2%. The SBPâ€™s tight monetary policy and administrative reforms in the foreign exchange and commodity markets helped mitigate inflationary pressures. By June 2024, the SBP cut the policy rate by 150 basis points to 20.5%, signaling a cautious return to easing policies as inflationary pressures subsided. Looking ahead to FY25, the SBP forecast inflation at 13.5%, though it noted the potential for inflation to fall below this range if fiscal consolidation efforts continue to gain traction. A reduction in global commodity prices, coupled with a stronger rupee, is expected to contribute to a more favorable inflationary environment in the coming year. Structural Challenges and Reform Agenda Despite these positive developments, the SBP report underscored that structural impediments continue to constrain Pakistanâ€™s long-term growth potential. Key challenges include falling investment, low savings, a lack of research and development, and inefficiencies in the energy sector. The report highlighted the accumulation of circular debt as a significant hurdle, noting that while the government has introduced energy price adjustments, more comprehensive reforms are needed to resolve systemic issues. The report also delved into the inefficiencies of state-owned enterprises (SOEs), which continue to be a drain on fiscal resources. The SBP stressed the need for sectoral policy and regulatory reforms to enhance the competitiveness of SOEs, including the implementation of recently introduced corporate governance reforms. Outlook for FY25 The SBP expressed cautious optimism for FY25, projecting GDP growth in the range of 2.5% to 3.5%. The approval of the IMFâ€™s Extended Fund Facility (EFF) in September 2024 is expected to strengthen Pakistanâ€™s external position, improve its credit rating, and boost investor confidence. With global inflation falling and commodity prices remaining stable, the external environment is conducive to further macroeconomic stabilization. However, the report emphasized the importance of continued fiscal discipline, policy reforms, and effective governance to sustain these gains and steer Pakistan toward sustainable long-term growth.

Date: 2024-10-16

Details: Karachi, October 16, 2024 â€“ In a decisive move to dismantle the entrenched practice of sales tax fraud, the Federal Board of Revenue (FBR) has unveiled a robust strategy aimed at curbing the use of fake and flying invoices. These fraudulent invoices have long enabled tax evasion and illegal refunds, creating significant losses to the national exchequer. According to official sources, the FBR has issued stringent directives to its regional tax offices (RTOs) across the country, mandating them to aggressively target not only the perpetrators behind these fraudulent schemes but also the beneficiariesâ€”legitimate firms complicit in such activities. The new measures represent a departure from past efforts, which focused primarily on suspending or blocking dubious firms. The FBR has recognized that these methods have proven insufficient, as fraudsters easily create new registrations to perpetuate their schemes. The FBR stated that while suspending non-existent or fraudulent firms is a necessary step, it has not been effective in addressing the root of the problem. â€œBogus firms can vanish overnight, leaving no trail for recovery,â€ the FBR explained. The inability to recover taxes from these non-existent entities has led to mounting tax demands without resolving the underlying issue of fraudulent invoicing. To combat this, the FBR has instructed RTOs to concentrate on tracing and prosecuting the actual buyers and suppliers involved with these fake firms. â€œIt is imperative that we target the real culprits, who are knowingly purchasing or selling invoices without the physical transfer of goods, with the sole purpose of evading taxes or claiming illegal refunds,â€ the FBR directive emphasized. The FBRâ€™s orders call for immediate enforcement actions under the relevant assessment and penal provisions of the tax code, ensuring that those who have benefited from these fraudulent schemes are held accountable. Moreover, the agency stressed the importance of precision in drafting show-cause notices and legal orders. Weak or vaguely worded notices often lead to the collapse of cases during appeals, providing undue relief to the accused. â€œToo many cases have failed at the appellate stage simply because the orders stated that purchases were made from a suspended or blocked entity. This is insufficient. It must be explicitly shown that the beneficiary acted with full knowledge of the fraudulent nature of the transactions,â€ the FBR instructed, adding that it is crucial to demonstrate intent to evade taxes or claim illicit refunds. By directly targeting beneficiaries and improving the legal robustness of its actions, the FBR is signaling its commitment to eradicating this pervasive form of tax fraud and strengthening the integrity of Pakistanâ€™s tax system.

Date: 2024-10-16

Details: Karachi, October 16, 2024 â€“ Federal Board of Revenue (FBR) Chairman, Rashid Mahmood Langrial, has expressed grave concern over the widespread sales tax fraud in Pakistan, particularly highlighting how â€œflying invoicesâ€ have morphed into a full-fledged business. Speaking at the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) on Wednesday, the FBR chairman shared a startling anecdote about a recent encounter where an individual openly admitted that his business revolved around issuing fraudulent invoices. â€œThey even call illegal activities a business,â€ Langrial remarked, underscoring the brazenness with which such activities are carried out. In a further shocking revelation, Langrial disclosed that corruption within the FBR itself is fueling the problem. He shared that retired FBR officers have admitted to taking bribes for processing refunds. According to the officers, smaller sums are accepted for legitimate cases, while significantly larger amounts are demanded for fraudulent refunds. This revelation highlights the systemic issues plaguing the countryâ€™s tax collection infrastructure. Struggling Economy on the Mend Turning to Pakistanâ€™s economic situation, Langrial acknowledged that the past few years had been incredibly challenging. However, he expressed optimism that the situation is now improving. With inflation on the decline, the policy rate has also begun to decrease, a key indicator of economic recovery. He noted that economists are predicting further cuts in the policy rate in the coming months, signaling a more stable financial environment on the horizon. Langrial emphasized that despite the pervasive tax evasion, there are still many upright individuals and businesses contributing their fair share to the economy. â€œThere are traders and industrialists who do not evade even a single rupee of tax,â€ he said. â€œThese people do not feed their children anything illicit.â€ He also acknowledged the existence of dedicated officers within the FBR who are working diligently for the betterment of the country, though he lamented that their numbers are far too few. Tax Collection Woes Langrial painted a bleak picture of the nationâ€™s tax collection system, highlighting that despite efforts over the years, the system remains deeply flawed. â€œWhere it stood in 2008, it still stands today,â€ he said. â€œIt is not right to use the entire yearâ€™s tax collection to pay off just the interest on debt.â€ He added that under the current circumstances, the economy is essentially running on borrowed time, with no clear path to solvency. Perhaps the most startling statistic shared by the chairman was that 90% of Pakistanâ€™s population does not pay taxes. Out of 43 million households in the country, only 4 million are registered taxpayers. This stark disparity, combined with a high GST rateâ€”recently increased from 16% to 18%â€”poses a significant burden on those who do pay taxes. Langrial argued that the tax rate is too high and must be reduced, especially for corporate taxpayers. â€œThe corporate tax rate should not exceed 25 percent,â€ he asserted, adding that further increasing taxes would only worsen the situation. Reforms and Accountability Regarding the Tajir Dost Scheme, which aims to create a more business-friendly environment, Langrial acknowledged that there might be design flaws but maintained that the FBR should not abandon its efforts. He also defended the recent requirement for Chief Financial Officers (CFOs) of companies to file affidavits verifying the accuracy of invoices. â€œThis is all present in the sales tax law,â€ he said, reminding critics that penalties and arrests for fraudulent activities have long been part of the legislation. â€œThose who commit fraud and evade sales tax need to be caught,â€ Langrial concluded, reinforcing the FBRâ€™s commitment to reform and accountability. With the FBR stepping up efforts to combat fraud and promote transparency, the country faces a crucial turning point in its economic recovery journey.

Date: 2024-10-16

Details: Karachi, October 16, 2024 â€“ The Federal Board of Revenue (FBR) has taken a significant step towards combatting tax evasion and enhancing fiscal integrity by directing tax offices to assign senior officers with the crucial responsibility of identifying fake and flying invoices. In response to the rampant issue of fraudulent billing practices, the FBR has mandated that each Chief Commissioner of Income Tax (CCIR) appoint at least two senior officials of impeccable integrity to tackle this pressing challenge within their respective jurisdictions. Recognizing the sensitive nature of this task, the FBR has emphasized the importance of a dedicated and methodical approach. The responsibility for this function is primarily designated to the Assessment & Processing Cell (A&P Cell), where it exists. The designated officers will be granted unrestricted access to an array of sales tax and Federal Excise Duty (FED) data available on platforms such as IRIS, ITMS, CREST, and FASTER, which are essential for effective data analysis and examination of the entire supply chain. To ensure optimal performance, CCIRs are instructed to coordinate with the Member of IT to facilitate access for their appointed staff. The FBR underscored the need for these officers and the A&P Cell to gather comprehensive data and conduct thorough scrutiny to ascertain the authenticity of sales tax declarations. This rigorous examination will focus on various characteristics indicative of fraudulent activities, enabling the detection of fake and flying invoices. Among the critical factors to be analyzed are: 1. High Transaction Volume with Minimal Tax Payment: A notable disparity between the volume of transactions and the net sales tax remitted raises red flags. 2. Equal Purchase and Input Tax Values: Instances where the value of purchases and the corresponding input tax are equal to or exceed the value of outputs and output tax warrant investigation. 3. Unrealistic Carry Forwards and Stock Levels: Consistent carry forwards that appear disproportionately high, alongside unrealistic stock levels, signal potential malpractice. 4. Discrepancies in Wealth Statements: A glaring contrast between a registered entityâ€™s declared capital and its substantial stock holdings is another warning sign. 5. Excessive Use of Credit Notes: Frequent issuance of significant credit notes to evade sales tax obligations necessitates scrutiny. 6. Recent Registrations with High Transactions: Newly registered firms, particularly those with a history of dormant activity, displaying sudden spikes in transactions within two years, require further examination. 7. Registered Addresses in Low-Income Areas: Businesses registered at addresses in economically disadvantaged regions may be scrutinized for legitimacy. 8. Non-Filing or Low-Filing of Income Tax Returns: Entities that either fail to file income tax returns or submit returns reflecting low income despite declaring large transactions should be thoroughly investigated. 9. Inconsistent Nature of Supplies: Instances where the nature of purchases does not align with the nature of supplies indicate fraudulent activities. 10. Focus on Commercial Importers: Special attention will be paid to commercial importers and dealers associated with large corporations, especially those involved in petroleum products, as they are often engaged in issuing flying invoices. Diligently comparing imported goods with the nature of the buyersâ€™ business is expected to reveal discrepancies. The FBR noted that fraudulent actors typically operate in networks. Identifying the issuer of fake or flying invoices necessitates a meticulous examination of both forward and backward transactions, as outlined in Annex A and Annex C of their sales tax returns. Such scrutiny will unveil other wrongdoers within the supply chain. Once the data on fake and flying invoices, along with the details of the registered entities involved in these fraudulent activities, has been captured, the staff will also verify the physical existence of these registered persons. Reports generated from these findings will be documented as part of the FBRâ€™s official records. Through this comprehensive initiative, the FBR aims to fortify Pakistanâ€™s tax framework, enhance compliance, and safeguard the national revenue system from fraudulent practices.

Date: 2024-10-15

Details: Islamabad, October 15, 2024 â€“ The Federal Board of Revenue (FBR) has announced a further extension for the filing of income tax returns for the tax year 2024, moving the deadline to October 31, 2024. This latest extension offers taxpayers additional time to fulfill their filing obligations amid mounting requests from trade bodies and tax professionals. The FBR issued Circular No. 3 of 2024-25 (Income Tax) on October 14, 2024, formalizing the new deadline for those who were originally required to file their returns by September 30, 2024. This marks the second extension, with the deadline previously extended to October 14, 2024, through Circular No. 2. The new cutoff date of October 31, 2024, is aimed at providing relief to taxpayers struggling to meet the deadline. According to the circular, the decision to extend the deadline was made after taking into consideration multiple factors, including persistent requests from various trade bodies, tax bar associations, and the impact of banking holidays in Islamabad and Rawalpindi, which further complicated taxpayersâ€™ ability to meet the October 14 deadline. This move comes as a welcome relief for businesses and individuals who had been grappling with procedural and logistical challenges, including those posed by the FBRâ€™s online portal. While the extension allows taxpayers more time to complete their returns, it also reinforces the FBRâ€™s commitment to accommodating genuine concerns, ensuring that compliance is not hindered by avoidable delays. However, the extension was not without some controversy. Earlier on October 14, the FBR had issued a statement asserting that no further extensions would be granted beyond the existing deadline. This clarification had caused widespread concern among taxpayers and professionals, who feared penalties for late filings. The sudden change of stance by the FBR underscores the agencyâ€™s responsiveness to evolving circumstances and pressures from stakeholders. The FBRâ€™s decision to extend the deadline again highlights the delicate balance it must maintain between enforcing tax compliance and addressing practical challenges faced by taxpayers. It also reflects the growing influence of professional associations and trade bodies in shaping tax administration policies. The extension to October 31 provides taxpayers with the opportunity to rectify any outstanding filing issues and avoid penalties associated with late submissions. This additional time also signals the FBRâ€™s determination to ensure maximum compliance, while offering flexibility where needed. Taxpayers are strongly advised to use this period to complete their returns diligently, as further extensions are unlikely.

Date: 2024-10-15

Details: ISLAMABAD: The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to take immediate action against the delinquent tax officers of Regional Tax Office (RTO) Rawalpindi involved in repeated maladministration to the sales tax registered taxpayers. According to an order issued by the FTO against the RTO Rawalpindi, the agony suffered and borne by the taxpayer since 2011 must be immense. The FTO office is shocked that the RTO Rawalpindi attached the bank account of the complainant and recovered the sales tax demand, amounting to Rs 16, 73,244 without due process of law. The FTO has directed the FBR to instruct Member-IR (Operations) FBR to get conducted a fact-finding enquiry to identify delinquent officers responsible for maladministration in this case. The chief commissioner, RTO, Rawalpindi to allow refund of already-recovered amount of Rs 1,673,244. The FTO order revealed that an in-depth study of the whole case casts serious aspersions on the working of FBR. Initially, a demand of Rs 2,552,008 (principal amount) was created by audit officer for the tax period 2009 and 2010 on the grounds of (i) non-production of record (ii) difference in Income Tax and Sales Tax Returns and (iii) discrepancy in E-Folder of FBR Web Portal and STR declaration. On rejection of appeal, by the CIR (Appeal) vide order dated 31.05.2012 the department recovered Rs 1,673,244 on 06.06.2012 pertaining to ground (iii) as aforementioned by attaching bank account of the complainant. The department again decided the case and reduced the recoverable amount to Rs 1,674,321. Now in compliance of CIR (Appeals-III) Rawalpindi, the Assistant Commissioner-IR A&E, Unit-I (City Zone) RTO Rawalpindi vide Sales Tax Order-in-Remand No 40/2023-24 has vacated the earlier adjudged liability of Rs 1,624,321. During hearing, the AR informed that he has not received the said Order-in-Remand. Accordingly, a copy was provided to him. This is a serious case infested with multiple shades of maladministration, the FTO order added. Copyright Business Recorder, 2024

Date: 2024-10-15

Details: Karachi, October 15, 2024 â€“ The Federal Board of Revenue (FBR) has made it clear that incomplete income tax returns will now be treated as invalid, ushering in a stricter regime to ensure compliance. This move aligns with Section 120 of the Income Tax Ordinance, 2001, which outlines the criteria for submitting and accepting tax returns. According to FBR, a tax return will only be accepted if it meets the stringent requirements detailed in Section 120. These stipulations emphasize the need for taxpayers to submit a complete and accurate return of income. The consequences of failing to do so are severe, with the FBR reiterating that any return deemed incomplete will be rendered invalid, as though it had never been submitted. Legal Provisions Under Section 120 The FBRâ€™s directive is grounded in the provisions of Section 120 of the Income Tax Ordinance, which mandates that a return must be complete for it to be assessed. Once a valid return is submitted, it is considered an official assessment of the taxpayerâ€™s income and the tax due, with the Commissioner automatically issuing an assessment order on the day the return is filed. However, Section 120 also introduces a crucial clause: if a taxpayer fails to meet the full requirements of the ordinance, including any deficiencies or omissions, their return will be rejected. This invalidation carries significant repercussions, as the taxpayer will be considered non-compliant, subjecting them to potential penalties and additional scrutiny. The ordinance empowers the Commissioner to audit the tax affairs of individuals under Section 177, even after the submission of a complete return. This additional oversight ensures that even after compliance, taxpayers remain subject to detailed reviews. The Role of Automation in Tax Return Processing To further streamline the process and ensure accuracy, Section 120(2A) mandates that all tax returns are processed through an automated system. This system makes adjustments for: 1. Arithmetic errors â€“ Incorrect calculations of taxable income or tax payable. 2. Incorrect claims â€“ Errors or inconsistencies evident from the information in the return. 3. Disallowance of losses and deductions â€“ Under specific parts of the ordinance, including any tax credits or carryforward losses. Before making any adjustments, however, the system will generate a notice to the taxpayer, providing them with 30 days to address the discrepancies. In the absence of a response, the system will automatically make the adjustments and notify the taxpayer through the IRIS online system. Addressing Incomplete Returns If a taxpayer submits an incomplete return, the Commissioner is required to issue a notice highlighting the deficiencies. This notice gives the taxpayer an opportunity to rectify the errors by submitting the missing information by the date specified. Should the taxpayer fail to comply within the prescribed timeframe, the return will be invalidated, essentially nullifying the submission. Moreover, no notices can be issued after 180 days from the end of the financial year in which the return was furnished. If no adjustments are made within this period, the amounts declared by the taxpayer will be deemed final. Implications for Taxpayers This move by the FBR represents a significant tightening of tax enforcement, aimed at increasing transparency and compliance. The automated systems ensure that errors are detected and corrected swiftly, leaving little room for mistakes or intentional underreporting. For taxpayers, it underscores the importance of ensuring their returns are complete and accurate from the outset. Any misstep or failure to comply could result in their returns being declared invalid, leading to audits, penalties, and further legal action. With the FBRâ€™s emphasis on precision and accountability, taxpayers must now exercise greater diligence in meeting their obligations, ensuring that all aspects of their returns align with the stringent requirements set forth in the Income Tax Ordinance.

Date: 2024-10-15

Details: Karachi, October 15, 2024 â€“ The latest figures released by the Federal Board of Revenue (FBR) have brought to light a concerning rise in nil-filers, representing a significant portion of income tax returns filed for the tax year 2024. According to the FBRâ€™s data, out of the 4.436 million income tax returns submitted, a staggering 1.636 million, or 37%, were nil-filers. These returns, marked by zero taxable income, contributed no tax revenue to the national treasury. This notable increase in nil-filers demonstrates a growing trend of individuals and entities filing income tax returns without declaring any taxable income. In comparison to the previous year, when 778,137 individuals filed nil-returns, constituting 36% of the total 2.166 million returns filed by mid-October 2023, the surge is evident. Over the entirety of the 2023 tax period, the total number of returns stood at 6.4 million. The FBR has expressed concern over the escalating number of nil-filers, as this trend undermines the revenue collection efforts of the government. Despite the increase in the number of returns filed, the number of contributors to the tax pool remains disproportionately low. The trend not only exacerbates fiscal pressures but also raises questions about tax compliance and enforcement in the country. While the surge in nil-filers is alarming, the FBR has also reported a substantial increase in tax revenue collected during the current year. For tax year 2024, the revenue body collected Rs. 114 billion alongside the 4.436 million returns filed, more than double the Rs. 52 billion collected during the previous tax year. This growth in tax collection, although significant, is overshadowed by the parallel rise in nil-filers, raising concerns about the effectiveness of the tax net expansion. The FBRâ€™s registration data further highlights this issue. Between July 1, 2023, and the present, a total of 1,035,922 individuals registered with the FBR, out of which 622,102 were nil-filers. In addition, from July 1, 2024, onwards, 450,405 new taxpayers were registered, of whom 307,482 filed nil-income returns. This growing segment of nil-filers underscores the challenges faced by the FBR in expanding the tax base while ensuring compliance. Without significant policy reforms and stronger enforcement measures, the burgeoning number of nil-filers threatens to compromise the governmentâ€™s ability to meet its revenue targets, potentially impacting public services and infrastructure development. The FBRâ€™s response to this trend will be pivotal in determining the future of tax collection in Pakistan.

Date: 2024-10-14

Details: Karachi, October 14, 2024 â€“ The Large Taxpayers Office (LTO) Karachi convened a high-profile conference on Monday with corporate sector leaders, issuing a stern warning that the Federal Board of Revenue (FBR) has officially declared war on fraudulent sales tax practices. The conference, attended by all LTO Karachi commissioners, conveyed a clear message from the government and the Ministry of Finance regarding zero tolerance for the use of fake and flying invoices in sales tax filings. The LTO is now fully committed to eradicating these fraudulent practices, which have plagued Pakistanâ€™s revenue system and led to substantial losses for the national exchequer. During a comprehensive presentation, Dr. Najeeb Ullah, Commissioner of Inland Revenue, Zone 1, LTO Karachi, revealed disturbing findings from ongoing inquiries and data analytics. â€œInvestigations have exposed gross anomalies and malpractices in sales tax declarations,â€ Dr. Najeeb Ullah noted, adding that the majority of fake and excessive input tax claims trace back to major beneficiaries operating within the jurisdictions of LTOs, MTOs, and CTOs. â€œThere has been a continuous stream of contravention reports and communication slips, which LTO initially tried to address in a civil and amicable manner,â€ he stated. However, the increasing volume and undeniable evidence of malpractices, even among very large companies, has led the FBR to declare, â€˜ENOUGH,â€™ and overhaul its strategy. LTO Karachi, as the flagship organization of the FBR, plays a pivotal role in tax collection and compliance for the countryâ€™s largest taxpayers. The office has traditionally aimed to facilitate voluntary compliance, fostering trust between the corporate sector and tax authorities. However, the growing tide of sales tax fraud has pushed the FBR to adopt a more aggressive stance. Dr. Najeeb Ullah further highlighted that the extensive scale of this revenue leakage would not have been possible without the complicity of highly skilled professionals in legal, accountancy, and IT sectors. He also pointed to systemic weaknesses within the FBR itself, including procedural lapses and internal collusion. â€œItâ€™s a desperate situation,â€ he admitted, emphasizing that desperate times call for extraordinary measures. The FBR has now declared all-out war on fraudulent sales tax practices to protect the integrity of the countryâ€™s revenue system. He warned that any discrepancies or deviations from industry benchmarks would be scrutinized, with ample opportunity given to explain the anomalies. However, in cases where evidence of fake or flying invoices, failure to adhere to the withholding sales tax regime, or avoidance of liability under Section 8B of Sales Tax Act, 1990 is found, legal and criminal proceedings will be swiftly initiated. The LTOâ€™s firm stance marks a critical turning point in the governmentâ€™s efforts to curb tax fraud and ensure that Pakistanâ€™s largest businesses comply fully with tax regulations.

Date: 2024-10-14

Details: Karachi, October 14, 2024 â€“ The Karachi Tax Bar Association (KTBA) has called on the Federal Board of Revenue (FBR) to accept applications for extensions in return filing deadlines without imposing restrictive conditions. In a formal communication addressed to Badshah Khan Wazir, Member of IR Operations at FBR, KTBA President Syed Zafar Ahmad raised several critical issues regarding the current return filing process and the challenges faced by taxpayers. The association advocated for a more flexible and accommodating approach in granting date extensions, especially for those facing genuine difficulties. One of the key points highlighted by the KTBA is the frequent technical difficulties associated with the FBRâ€™s online tax portal, IRIS. As is often the case on critical filing deadlines, the system becomes overwhelmed, resulting in connectivity and access issues for taxpayers attempting to file their returns. In light of these challenges, the KTBA proposed that manual extension applications be accepted as an alternative. The association emphasized that taxpayers should be allowed to submit extension requests in person at designated Tax Facilitation Desks (TFDs) under Section 119 of the Income Tax Ordinance. The KTBA also raised concerns over what it described as the â€œen masse rejectionâ€ of extension requests by field formations, particularly in Karachi, on the eve of the September 30th deadline. According to the KTBA, many applications were rejected instantaneously without proper consideration, leading to the perception that the FBR had preemptively decided to deny all extension requests, regardless of the merit of the cases presented. The association urged FBR leadership to instruct field formations to carefully review each application on its own merits, rejecting only those that lacked valid justification. The KTBA warned that blanket rejections could force legitimate taxpayers into the category of late filers, causing unnecessary penalties and hardships. Another key issue raised by the KTBA was the imposition of tax pre-payment conditions for granting extensions. The association argued that such requirements were not supported by any provision of law under Section 119 of the Income Tax Ordinance. KTBA pointed out that in several cases, particularly near the last deadline, extensions were granted only if taxpayers made advance payments, a practice that the association deemed both â€œillicitâ€ and arbitrary. While reaffirming its commitment to timely compliance, the KTBA stressed that granting these extensions without conditions would not only alleviate taxpayer grievances but also foster greater cooperation and trust between taxpayers and the tax authorities.

Date: 2024-10-14

Details: Islamabad, October 14, 2024 â€“ In an aggressive push against tax evasion, the Federal Board of Revenue (FBR) has arrested several Chief Financial Officers (CFOs) linked to large-scale sales tax fraud. The arrests are part of a nationwide operation led by the Directorate of Intelligence and Investigation (I&I) of Inland Revenue (IR), targeting individuals and companies suspected of causing colossal losses to the national exchequer through tax malpractices. This development comes after an announcement made on October 10, 2024, by Finance Minister, Chairman of FBR, and Director General of Intelligence & Investigation. During the press conference, the officials declared their intention to launch a comprehensive crackdown on businesses engaged in fraudulent activities, particularly those utilizing fake or â€œflyingâ€ invoices to evade taxes. The crackdown, which has now moved into full force, has already led to the arrest of five high-profile suspects, including one of the leading fraudsters accused of creating dummy companies and four CFOs from major corporations, all implicated in sales tax fraud amounting to billions of rupees. In a major operation conducted by the Directorate of Intelligence & Investigation-Inland Revenue in Hyderabad, the CFO and Purchase Officer of a prominent Lahore-based battery manufacturer were taken into custody. The accused are alleged to have collaborated in a fraudulent scheme that falsely claimed input tax on lead, leading to over a billion rupees in tax losses. The Hyderabad team, with assistance from the Lahore office, executed the arrests after filing a First Information Report (FIR) detailing the massive scale of the tax fraud. Meanwhile, another successful raid was conducted by the Directorate in Faisalabad, where CFOs of two sister concerns associated with a leading textile unit were arrested. These individuals are accused of abetting a tax fraud scheme that involved claiming fake input tax on coal purchases. This fraudulent activity is believed to have caused hundreds of millions of rupees in revenue losses. FIRs have already been registered against these suspects and other beneficiaries involved in this complex web of deceit. The crackdown intensified with the arrest of Taswar Shahid, a key figure implicated in numerous FIRs related to generating fake sales tax inputs. Shahid, whose pre-arrest bail was rejected by the court earlier today, was apprehended outside the courtroom. He is considered a linchpin in a well-organized gang that operated numerous fake companies, funneling billions of rupees in fraudulent tax benefits to end-user businesses. His arrest represents a significant victory in FBRâ€™s battle against this entrenched tax evasion network. The arrests come in the context of FBRâ€™s broader strategy to curb tax fraud and improve compliance with the nationâ€™s tax laws. Sales tax fraud, particularly involving fake invoices, has been a longstanding problem, contributing to significant revenue shortfalls. This latest operation reflects the agencyâ€™s heightened resolve to eliminate corrupt practices that have eroded public trust and drained national resources. According to FBR officials, the individuals arrested are part of a sophisticated scheme designed to manipulate the tax system for financial gain. The CFOs and their accomplices exploited loopholes and falsified tax records, effectively evading billions of rupees in sales tax. These losses directly impact the countryâ€™s ability to fund essential public services and infrastructure development. The FBR has pledged to continue its efforts to dismantle these criminal networks. In a statement, the FBR highlighted that it would leave no stone unturned in its mission to enforce compliance and ensure that all businesses and individuals pay their fair share of taxes. These enforcement measures are seen as a crucial step toward restoring fiscal discipline and reinforcing the credibility of the tax collection system. As the crackdown continues, further arrests and investigations are expected, with FBR emphasizing that no individual or entity involved in tax fraud will be spared. This initiative signals the agencyâ€™s determination to hold accountable those who flout the law, ensuring that tax revenue is properly collected and utilized for the countryâ€™s development. The nation now watches closely as the FBR intensifies its battle against one of the largest tax fraud syndicates in recent memory.

Date: 2024-10-13

Details: Karachi, October 13, 2024 â€“ The Federal Board of Revenue (FBR) has announced a clear process for taxpayers who are unable to meet the income tax filing deadline, offering a pathway to secure an extension. This clarification comes as many taxpayers face unexpected challenges in meeting their obligations. The procedure for obtaining an extension is outlined in Section 119 of the Income Tax Ordinance, 2001. According to the FBR, taxpayers required to submit their income tax returns under Section 114 or 117, or a wealth statement under Section 116, may request an extension in writing from the relevant Commissioner of Income Tax. The request must be submitted before the filing deadline. The Commissioner may grant an extension under certain circumstances, including: 1. Absence from Pakistan â€“ Taxpayers who are abroad and unable to file their returns on time. 2. Illness or Misadventure â€“ Unexpected health issues or other unforeseen misfortunes that prevent timely filing. 3. Other Reasonable Causes â€“ Situations deemed justifiable by the Commissioner, based on the taxpayerâ€™s request. An extension, however, is subject to specific limitations. As per the ordinance, any extension granted cannot exceed 15 days from the original deadline unless there are exceptional circumstances warranting a longer extension. If a taxpayerâ€™s request for an extension is denied by the Commissioner or if the granted extension is deemed insufficient, the taxpayer has recourse. They can escalate their application to the Chief Commissioner, who may grant an additional extension for a period not exceeding 15 days, unless extraordinary circumstances justify an even longer extension. One important caveat highlighted by the FBR is that obtaining an extension for filing the tax return does not alter the due date for tax payment. Taxpayers are still required to pay any due taxes by the original deadline, as failure to do so may result in the imposition of a default surcharge under Section 205 of the ordinance. The FBR encourages all taxpayers to be mindful of their tax obligations and utilize the extension mechanism responsibly. Taxpayers are reminded that while the extension provides relief for document submission, it does not exempt them from penalties related to non-payment of taxes by the stipulated deadline. With this clarification, the FBR aims to alleviate concerns for individuals and businesses facing difficulties in meeting the tax filing deadline, while ensuring compliance with the tax laws of Pakistan.

Date: 2024-10-13

Details: Karachi, October 13, 2024 â€“ The Federal Board of Revenue (FBR) is likely to further extend the deadline for filing income tax returns for the tax year 2024 due to the public holidays declared in Islamabad. The extension comes in light of the three-day public holiday (October 14â€“16), announced by the federal government in the capital due to the Conference of the Shanghai Cooperation Organization (SCO). The deadline for filing returns was initially extended from September 30 to October 14, 2024, but the unexpected closure of government offices during the upcoming holidays has disrupted tax filing operations. FBR headquarters, located in Islamabad, will remain closed throughout this period, impeding the administrative functions necessary to assist taxpayers during the final days of the extended deadline. Despite the possibility of another extension, FBR Chairman has consistently expressed a firm stance against further delays. In a recent interview, he categorically asserted that the filing deadline would not be extended beyond October 14, and that the tax authority is prepared to launch a comprehensive crackdown on non-compliant taxpayers following the cutoff date. Nevertheless, the holiday-induced shutdown in Islamabad might force the agency to reconsider its rigid position. The looming extension has created a mixed response from stakeholders. While FBR has reported record-breaking submissions of tax returns for 2024, individual taxpayers, business communities, and tax bar associations have remained unusually silent on demanding an official extension. This contrasts with previous years, where such groups were vocal about filing difficulties and requested more time to comply with tax regulations. However, according to a senior tax consultant, unresolved issues persist with the FBRâ€™s online tax filing portal. One notable problem involves the automatic deletion of draft returns, causing frustration among taxpayers attempting to meet the deadline. The consultant emphasized that these technical issues have been repeatedly flagged by tax professionals and urged the FBR to extend the deadline to ensure all taxpayers can successfully submit their returns. Given the confluence of technical difficulties and the disruption caused by the Islamabad holidays, an official announcement on the potential extension is expected soon. For now, taxpayers nationwide await clarification from the FBR, hoping for more time to fulfill their obligations without penalties. The decision will not only impact compliance but also set the tone for the FBRâ€™s enforcement strategy in the upcoming fiscal year.

Date: 2024-10-13

Details: Karachi, October 13, 2024 â€“ The Federal Board of Revenue (FBR) has shifted its focus toward holding Chief Financial Officers (CFOs) accountable for ensuring the authenticity of sales tax returns. The decision comes after the FBR admitted its failure to eliminate the rampant use of fake and flying invoices, a problem that has contributed to a staggering tax gap of Rs 3.4 trillion. In an internal note circulating across FBRâ€™s field formations, Chairman Rashid Mehmood has explicitly warned CFOs to ensure the approval of only genuine invoices in their monthly tax filings. He made it clear that the FBR will not hesitate to initiate criminal proceedings against CFOs who sign off on fraudulent sales tax returns, stating: â€œWe will initiate criminal proceedings against the CFOs of companies involved in signing the approval of fraudulent sales tax returns.â€ Under the new guidelines, CFOs are now required to submit affidavits confirming the accuracy of their companiesâ€™ sales tax filings. These affidavits will affirm that: â€¢ The declared turnover and value of supply have been accurately reported. â€¢ No fake or flying invoices have been included by immediate vendors or other entities in the supply chain. â€¢ All invoices correspond to taxable supplies, as listed in the required annexures. â€¢ No fictitious figures have been entered into any part of the return or its annexures. The CFO declaration also includes: â€œI â€¦ confirm that I am fully cognizant of the severe legal consequences, including but not limited to arrest under Section 37 of the Sales Tax Act, 1990, and imprisonment for up to 10 years.â€ This warning underscores the seriousness of the FBRâ€™s crackdown on fraudulent practices. The FBR has provided a sample affidavit to guide CFOs on the required submission, which must be filed in hard copy. This move follows revelations of widespread misuse of flying invoicesâ€”fake invoices used to claim illegitimate input tax adjustmentsâ€”by taxpayers. A senior FBR official, speaking on condition of anonymity, mentioned that the affidavit requirement is not new but has existed as part of the online sales tax return filing system. However, the renewed emphasis on it signals the FBRâ€™s desperation to ensure compliance and crack down on companies that exploit loopholes to evade taxes. Despite the FBRâ€™s efforts, tax experts have voiced opposition to the strategy of holding CFOs accountable for fraudulent invoicing. According to one expert, large companies consist of numerous departmentsâ€”such as procurement, quality control, production, and taxationâ€”each with its own standard operating procedures. â€œMaking the CFO sign an affidavit is akin to asking the FBR Chairman to sign an affidavit declaring there is no corruption in the FBR,â€ the expert quipped, pointing to the limitations of the CFOâ€™s role within a large organization. Syed Rehan Jafri, former president of the Karachi Tax Bar Association, criticized the FBRâ€™s approach, stating that CFOs are merely employees, and the legal responsibility should rest with the companyâ€™s directors or owners. â€œThe CFO is not the owner; the legal obligation lies with the directors or owners of the company,â€ he remarked. Jafri further suggested that the FBR should first address corruption within its own ranks, as bribery and internal misconduct have long plagued the tax authority. As the FBR intensifies its measures to reduce the tax gap, the ongoing debate between the tax authority and industry experts highlights the complexities involved in tackling tax evasion in Pakistanâ€™s business landscape.

Date: 2024-10-13

Details: Karachi, October 13, 2024 â€“ In a significant regulatory update, Pakistan Customs has announced revised customs valuations for the import of power tools, a move aimed at curbing under-invoicing and ensuring more accurate duty and tax assessments. The new valuation has been detailed in a ruling issued by the Directorate General of Customs Valuation, Karachi, which now classifies power tools into three distinct categories based on brand and market standing. This new measure will impact the import process, with potentially far-reaching implications for importers, retailers, and consumers alike. The reclassification, which applies to 31 different types of power tools, is part of an effort to standardize customs valuations and ensure a fairer taxation system. Under the new system, Category A consists of premium brands such as Bosch, Makita, Hitachi, Dewalt, and Hyundai, which command higher prices in both domestic and international markets. Category B includes mid-range brands such as Inge, Total, EM Top, Sancan, and Energizer, while Category C covers more affordable, low-end brands. The valuation ruling is based on a comprehensive analysis of import data, current market trends, and the prevailing differences between declared and actual market prices. Pakistan Customs has exercised its authority under Sections 25 and 25A of the Customs Act, 1969, to conduct this revision. The intent behind the new valuation framework is to align declared values with actual market prices, thereby eliminating discrepancies that often lead to revenue losses for the government. Stakeholders in the industry have long voiced concerns about rampant under-invoicing practices that enable certain importers to evade duties and taxes by declaring lower-than-market prices. These concerns have been substantiated by data from the Pakistan Revenue Automation Limited (PRAL), which reveals significant inconsistencies between declared and actual import values. According to market inquiries and international price publications, the previous customs values were found to be on the lower side, further supporting the need for an overhaul. The introduction of these revised valuations is expected to create a level playing field for importers and deter unfair trade practices. Additionally, it could lead to more competitive pricing for consumers, as importers of premium and mid-range brands will now face stricter scrutiny in terms of invoicing. By addressing long-standing issues of under-invoicing, Pakistan Customs aims to boost transparency in trade practices while simultaneously increasing revenue generation for the national exchequer. This ruling reflects the governmentâ€™s broader efforts to reform trade policies and strengthen its revenue collection mechanisms.

Date: 2024-10-13

Details: Karachi, October 13, 2024 â€“ The Large Taxpayers Office (LTO) Karachi collected a staggering Rs 680 billion during the first quarter (July-September) of the fiscal year 2024-25. This robust performance comes despite modest growth in revenues from imports, underscoring the remarkable resilience and efficiency of domestic tax collection efforts. Sources within the Federal Board of Revenue (FBR) revealed that LTO Karachiâ€™s net tax collection surged by 24%, a considerable leap from the Rs 548 billion collected in the same period of the preceding fiscal year. This remarkable increase can largely be attributed to the stellar performance in domestic revenue collection, which soared by 35% to reach Rs 457 billion, compared to Rs 339 billion collected during the first quarter of the previous year. In contrast, the tax collection from imports grew by a mere 5%, reaching Rs 220 billion, up from Rs 209 billion in the corresponding quarter last year. The slower growth in import-related taxes reflects a significant reduction in the countryâ€™s import bill, a trend that has impacted overall revenue streams traditionally reliant on import duties. The LTO Karachi, the largest revenue-generating arm of the FBR, has been instrumental in driving the countryâ€™s fiscal progress. Despite persistent economic challenges, particularly the contraction in imports, the office managed to post an impressive 35% increase in domestic revenue collection, an achievement that demonstrates the tenacity and diligence of its officers and officials. Direct taxes saw substantial growth, registering a 25% increase to reach Rs 342 billion during the first quarter, up from Rs 273 billion during the same period last year. It is also noteworthy that LTO Karachi issued tax refunds amounting to Rs 18 billion in this quarter, reflecting a staggering 444% increase compared to the Rs 3.3 billion refunded in the first quarter of FY24. This significant rise in refunds indicates an improved focus on taxpayer facilitation and compliance. Sales tax collection from domestic sources experienced a remarkable 57% surge, reaching Rs 106 billion, compared to Rs 68 billion in the same quarter of the previous fiscal year. Similarly, the Federal Excise Duty (FED) collection grew by an impressive 59%, totaling Rs 43 billion during the period under review, compared to Rs 27 billion in the prior yearâ€™s first quarter. Despite the challenges posed by lower imports, LTO Karachiâ€™s exemplary performance underscores the increasing reliance on domestic revenue streams and signals a positive trajectory for Pakistanâ€™s fiscal landscape in FY25.

Date: 2024-10-11

Details: Karachi, October 11, 2024 â€“ Rashid Mahmood Langrial, Chairman of the Federal Board of Revenue (FBR), has laid out a demanding agenda for his upcoming visit to Karachi. During the public holidays announced in Islamabad for the Shanghai Cooperation Organization (SCO) Summit, Langrial will capitalize on this period by engaging in pivotal meetings and performance evaluations in the economic hub of Pakistan. The government of Pakistan has declared holidays in Islamabad from October 14 to October 16, 2024, to accommodate the SCO Summit. However, rather than taking a pause, the FBR Chairman has opted to intensify his engagements in Karachi, focusing on the review of the first fiscal quarterâ€™s (July-September) revenue performance for 2024-25. Moreover, he will strategize for the successful attainment of Octoberâ€™s ambitious revenue targets. According to reliable sources within the FBR, Langrialâ€™s schedule will kick off on Monday, October 14, with a series of high-level meetings with key tax authorities in Karachi. The Chairman will convene with Chief Commissioners of Karachiâ€™s Large Taxpayers Office (LTO), Medium Taxpayers Office (MTO), Corporate Tax Office (CTO), as well as Regional Tax Offices (RTO) I and II. These discussions are expected to focus on resolving pressing tax-related issues and aligning efforts to enhance revenue collection mechanisms. The following day, Tuesday, October 15, will see the Chairman shift his attention to Pakistan Customs. Langrial will meet with the Chief Collectors to address pressing matters within customs operations, including strategies for efficient border control and enhanced revenue collection through customs duties. His focus on these key institutions underscores his determination to drive fiscal discipline and enhance operational effectiveness across both Inland Revenue and Customs. On the concluding day of his Karachi tour, Wednesday, October 16, Langrial will hold a highly anticipated dialogue with the business community. He is scheduled to meet members of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), offering them a platform to voice their concerns. This exchange is expected to cover a wide range of issues, from tax policy challenges to regulatory bottlenecks, with an aim to foster stronger collaboration between the government and business stakeholders. Accompanying the FBR Chairman on this vital visit will be Member Inland Revenue (IR-Operations) and Member Customs Operations, further indicating the significance of this Karachi-based initiative during the Islamabad holidays. This proactive approach reflects Langrialâ€™s commitment to steering the FBR towards achieving its revenue targets in the ongoing fiscal year, while addressing the concerns of both tax administrators and the business community.

Date: 2024-10-11

Details: Karachi, October 11, 2024 â€“ Pakistan has reaffirmed its strong commitment to the International Monetary Fund (IMF) to substantially increase tax collection in the fiscal year 2024-25. In its latest country report, the IMF outlined Pakistanâ€™s pledge to implement robust fiscal policies designed to bolster tax revenues and meet stringent economic goals, as the country faces ongoing economic challenges. These measures are part of Pakistanâ€™s broader strategy to fulfill its commitments under the IMFâ€™s Extended Fund Facility (EFF) and stabilize its economy. Comprehensive Tax Measures The governmentâ€™s key objective is to strengthen general government tax revenues to 12.3 percent of GDP, with new tax measures expected to generate over PKR 1,723 billion, equivalent to 1.4 percent of GDP. This will involve significant changes across multiple tax domains, ranging from personal and corporate income taxes to sales tax, excise duties, and customs duties. Personal and Corporate Income Tax (PIT and CIT) One of the central components of the revenue-enhancement plan is reforming personal and corporate income tax structures. Measures targeting personal income tax (PIT) and corporate income tax (CIT) are projected to bring in PKR 357 billion. Exporters will be integrated into the regular tax regime, while personal income tax reforms will streamline taxation for both salaried individuals (SI) and non-salaried individuals (NSI). Specifically, the number of tax slabs will be reduced to five, with the highest tax rate for NSIs being increased to 45%. This is a significant move towards broadening the tax base and ensuring more equitable tax enforcement. Sales Tax Overhaul The transformation of the sales tax structure is set to generate PKR 286 billion. The majority of products currently exempt or zero-rated will be brought under the standard tax rate. However, certain key sectors, such as education, health, and agricultural inputs, will be taxed at reduced rates of 5% or 10%. Essential food items, health products, and goods acquired by charitable hospitals will continue to benefit from tax exemptions. Pakistanâ€™s export sector will also see a shift, with the budget terminating the preferential Export Facilitation Scheme for locally purchased inputs. Federal Excise Duty (FED) Expansion The government also aims to widen the scope of the Federal Excise Duty (FED), enhancing rates on various products, which is expected to generate PKR 413 billion. New FEDs will be levied on property sales, sugar, acetate tow, and lubricants. Additionally, a harmonized FED will be applied to locally manufactured cigarettes, e-cigarettes, and nicotine pouches, aligning it with that on imported cigarettes. Excise duties will also increase on cement and airline tickets. These changes reflect the governmentâ€™s intent to raise revenue through excise duties, particularly targeting sectors that have previously enjoyed leniency in tax obligations. Enhanced Withholding Taxes To further strengthen tax collection, Pakistan plans to enhance withholding taxes and direct taxation measures, bringing in an additional PKR 240 billion. Key steps include raising the withholding tax for non-filers across various sectors, including manufacturing, wholesale, and retail. Progressive taxation on property transactions and the elimination of reduced rates for capital gains are also expected to contribute to the tax haul. Additionally, the income tax on dividend income from mutual funds will be increased to a maximum of 25%, and a new ad-valorem tax will replace the nominal tax on motor vehicle registration. Customs Duty Rationalization In line with efforts to rationalize tariffs, the government will eliminate various exemptions and concessions on customs duties, generating PKR 65 billion. This includes withdrawing concessions on imports of home appliances, electric vehicles, and specific food items, such as fresh and dry fruits (except Afghan apples). These measures are part of broader tariff policy reforms aimed at curbing unnecessary imports and boosting local production. Compliance and Revenue Administration Improved compliance measures are expected to generate PKR 157 billion, with initiatives such as the imposition of minimum import values on certain goods for withholding tax and sales tax collection. Additionally, Pakistan will enhance cross-adjustment of sales taxes between the federal and provincial governments, reevaluate property valuation tables to align with market rates, and introduce anti-fraud measures to prevent tax evasion. Moreover, under the Tajir Dost scheme, efforts to bring retailers into the tax net are anticipated to significantly increase revenue, supported by the implementation of the Compliance Risk Management (CRM) framework. These steps, alongside an expansion of the Compliance Improvement Plan (CIP), are projected to add PKR 250 billion to the national exchequer. Clearing Arrears In a bid to ease financial pressure on businesses, Pakistan has also committed to clearing outstanding GST credit claims owed to companies involved in the commercialization of petroleum products. A total of PKR 80 billion in arrears will be settled during FY25, with an initial payment of PKR 35 billion. Conclusion Pakistanâ€™s aggressive tax collection strategy for FY25, driven by reforms in income tax, sales tax, excise duties, and customs duties, reflects the governmentâ€™s resolve to meet its commitments to the IMF and strengthen its fiscal position. With these ambitious measures, Pakistan aims to not only enhance tax revenues but also build a more transparent, efficient, and equitable taxation system, critical for the countryâ€™s economic growth and stability.

Date: 2024-10-11

Details: Islamabad, October 2024 â€“ Rashid Mehmood Langrial, Chairman of the Federal Board of Revenue (FBR), has reiterated the governmentâ€™s resolve to freeze the bank accounts of individuals who fail to file their income tax returns. In a candid interview with a private TV channel, FBR Chairman underscored the governmentâ€™s determination to eliminate the category of non-filers and tighten the noose around tax evaders engaging in significant financial transactions. FBR Chairman Langrial clarified that while the average citizen will still be able to purchase smaller assets such as plots or used vehicles, individuals engaging in large-scale transactions will face severe restrictions. Those who fail to file their tax returns by the final deadline of October 14, 2024, will be subjected to stringent penalties, including a ban on purchasing properties exceeding Rs10 million, the acquisition of new vehicles, and the freezing of bank accounts. The government is even contemplating restrictions on air travel for persistent non-filers, in line with international practices where such punitive measures extend to up to 15 different types of sanctions. Langrial highlighted that under-filingâ€”where individuals or corporations misreport their income to evade taxesâ€”remains a substantial issue in Pakistanâ€™s tax system. With only three million individuals paying taxes in a nation of over 240 million, he acknowledged that the widespread poverty reduces the pool of potential taxpayers. However, the FBRâ€™s analysis has identified a significant portion of the population that is deliberately under-reporting income to avoid paying their fair share of taxes. He provided stark examples from the corporate sector, where companies operating in the same industry exhibit glaring discrepancies in their tax declarations. For instance, in the cement sector, one company declared coal costs at Rs3,500 per ton, while another declared Rs5,000 per tonâ€”a disparity that points to tax evasion. Similarly, in the beverage industry, some companies report sugar inputs as low as 3-4%, while others report as high as 16%, raising suspicions about the accuracy of their financial reporting. Langrial condemned such deceptive practices, equating them to criminal acts, and reaffirmed the FBRâ€™s stance against tax amnesties. He also highlighted the challenges faced by field officers, whose minimal salary packages hinder their ability to effectively combat tax evasion. To address this, he has requested the Prime Minister to enhance the mobility and resources of tax enforcement officers. Smuggling was also flagged as a significant issue undermining the countryâ€™s tax revenues. Langrial emphasized that while the FBRâ€™s comprehensive reform plan has been approved, its implementation will take several months, as procedural and legislative changes must be enacted. He concluded by outlining the potential for Pakistanâ€™s tax-to-GDP ratio to rise significantly. With targeted reforms and the provinces contributing more effectively, Langrial projected that the country could achieve a tax-to-GDP ratio of 18%, helping to stabilize the economy and increase revenue collection for the state.

Date: 2024-10-11

Details: Karachi, October 11, 2024 â€“ The Sindh Revenue Board (SRB) has taken firm legal action against a restaurant in Latifabad, Hyderabad, by lodging a First Information Report (FIR) following an incident involving the harassment of a lady officer during an official inspection. The incident has not only highlighted misconduct by the restaurantâ€™s management but also underscored serious issues of persistent tax evasion. In a statement released on Friday, the SRB reiterated its unwavering commitment to enforcing compliance with the Sindh sales tax law while maintaining professionalism and respect in its interactions with all taxpayers. However, the unacceptable behavior exhibited by the restaurantâ€™s management during the inspection prompted the SRB to take decisive action. The establishment has been continuously failing to meet its tax obligations, further aggravating the situation. The restaurant has a long history of non-compliance, particularly its failure to issue POS-integrated invoices as mandated by law, a critical step in documenting sales and tax payments. Despite multiple show-cause notices, public complaints filed via platforms like the Pakistan Citizenâ€™s Portal, and several assessment and adjudication orders, the restaurant has consistently evaded paying taxes. It currently faces a penalty of PKR 6.73 million for unpaid Sindh sales tax. During a recent inspection, tensions escalated when the restaurantâ€™s management not only ignored legal requirements but also misbehaved with a lady officer who was fulfilling her official duties. In response, the SRB promptly filed an FIR against the restaurant owner, sending a clear message that such behavior and tax evasion will not be tolerated. The SRB stressed that it takes the protection and professionalism of its officers seriously, and it stands by its commitment to shield its officers from harassment or undue pressure while they carry out their responsibilities. The SRB has called on the public, especially business owners, to actively contribute to fostering a culture of tax compliance. It urged all businesses, particularly those in the restaurant sector, to strictly adhere to the Sindh sales tax law, including the issuance of SRB-prescribed QR-coded POS invoices. The board emphasized that compliance with tax laws is not just a legal duty but also a collective responsibility, essential for ensuring transparency and the legitimate collection of public revenue. With the FIR now lodged, the SRB has set a precedent that both tax evasion and misconduct will lead to serious legal consequences. The board reaffirmed its resolve to combat tax evasion and maintain integrity in the taxation system, supporting Pakistanâ€™s economic stability.

Date: 2024-10-11

Details: Islamabad, October 11, 2024 â€“ The Federal Board of Revenue (FBR) is poised to release revised valuation tables for immovable properties across 42 major cities in Pakistan, a move expected to reshape the property market landscape and increase tax revenues from real estate transactions. This long-awaited update, which has been sent to the Law and Justice Division for vetting, marks a significant shift in property valuation aimed at aligning official rates with market realities. The revised valuations are expected to be officially notified by the FBR today, October 11, 2024, as part of the governmentâ€™s strategy to boost revenue from property sales and purchases. The move will bring property valuations closer to their actual market values, with rates likely to increase to 80-90% of the estimated market figures, compared to the current 75%. This adjustment will have profound implications for both property buyers and sellers, as well as investors and developers across the country. This revision comes after a pause in 2023, when the FBR refrained from increasing property valuations. Prior adjustments were made in 2018, 2019, 2021, and 2022, highlighting the FBRâ€™s periodic efforts to keep property values in line with market dynamics. Notably, in some areas such as Gwadar, property values have decreased under the new regulations, but for the majority of locations, valuations have seen substantial increases. In some instances, the property rates have been hiked by as much as 75%, reflecting the FBRâ€™s intent to close the gap between declared and actual values. The updated tables will distinguish between commercial, industrial, and residential properties, providing a more nuanced approach to property valuations. This segmentation is expected to facilitate more precise taxation and align property-related taxes with the nature and use of the property. The cities affected by this revision include major hubs such as Lahore, Karachi, Islamabad, and Faisalabad, along with several others like Peshawar, Rawalpindi, Quetta, and Sialkot. The revised valuation tables will also impact smaller cities, such as Abbottabad, Mardan, and Narowal, ensuring nationwide consistency in property tax regulations. The Federal Tax Ombudsman (FTO) has played a pivotal role in pushing for this revision, setting a deadline of October 11, 2024, for the FBR to comply. The FTO has issued a stern warning to FBR officials, stating that failure to meet this deadline would result in proceedings for â€œDefiance of Recommendationsâ€ under Section 12(2) of the FTO Ordinance, 2000. This underscores the urgency and importance of the FBRâ€™s compliance with the revision, aimed at enhancing transparency and efficiency in property taxation.

Date: 2024-10-10

Details: Islamabad, October 10, 2024 â€“ The Federal Board of Revenue (FBR) has issued a directive on Thursday halting the recruitment process for positions under Basic Scale (BS) grades 1 to 4 in both the Pakistan Customs and Inland Revenue Service (IRS). This suspension of recruitment applies with immediate effect, as outlined in a circular issued to the heads of Customs and IRS field formations across the country. The FBR has clarified that this pause in the recruitment process applies to all ongoing recruitments in the BS-1 to BS-4 grades, except for cases where an offer of appointment had already been issued by the respective field formations on or before October 10, 2024. Recruitment processes for all other positions that have not reached this stage will now be stopped. The circular further instructs the relevant field formations to provide detailed information on the posts for which appointment letters have already been issued. This information is to be submitted to the FBR no later than October 11, 2024. The FBR has emphasized the need for timely compliance with this directive in order to ensure proper management of the recruitment process. The decision to halt recruitment was made with the approval of the Secretary of Revenue Division, who is also the Chairman of the FBR. However, the reasons behind this sudden suspension of hiring for these grades have not yet been officially disclosed. Analysts speculate that this could be part of broader administrative reforms or adjustments in the federal governmentâ€™s hiring strategy, although no formal statement on this has been made by the FBR. The halt has created uncertainty among candidates who were actively participating in the recruitment process. Several potential candidates have expressed concerns over the future of these recruitments, particularly those who were in the final stages of the hiring process but had not yet received appointment letters. The FBRâ€™s directive comes at a time when many government departments are working to streamline operations and ensure fiscal discipline in light of ongoing economic challenges in the country. For now, field formations of both Pakistan Customs and the IRS are awaiting further instructions from the FBR as the recruitment process remains suspended until further notice.

Date: 2024-10-10

Details: Islamabad, October 10, 2024 â€“ In a bold move to address rampant tax evasion and boost revenue collection, Pakistan has launched a large-scale operation targeting sales tax fraud across various sectors of the economy. Finance Minister Mohammad Aurangzeb and Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial made the announcement in a press conference, revealing that the country faces a staggering tax gap of Rs 3.4 trillion due to widespread fraud. The FBRâ€™s study on sales tax evasion uncovered significant discrepancies across multiple industries, pointing to a tax gap largely driven by non-compliance and fraudulent activities. According to the report, only 14% of the 300,000 manufacturers required to register for sales tax are properly registered. Furthermore, many of the registered entities engage in practices like misreporting turnover, claiming excessive input tax, and utilizing fake or flying invoices. The finance minister emphasized that Pakistan collects sales tax in line with international best practices, following the Value Added Tax (VAT) model, which places trust in businesses to collect taxes from buyers. However, he noted with concern that this trust has been breached on a massive scale, particularly in high-profile sectors such as iron and steel, cement, beverages, and batteries. â€œThese sectors have been exploiting loopholes in the tax system, claiming input tax far beyond acceptable industrial benchmarks, Aurangzeb remarked, highlighting the deep-rooted nature of the malpractices. Despite the governmentâ€™s efforts in the previous fiscal year, including stepped-up enforcement measures and enhanced reporting, a substantial portion of sales tax evasion persists. To combat this, the government is intensifying its crackdown on tax fraud. Finance Minister Aurangzeb outlined that the FBR has already gathered substantial evidence of fraudulent activities in various sectors. Specific cases were identified: 11 in the battery sector, 897 in the iron and steel industry, and 253 instances of beneficiaries making false input tax claims related to coal purchases. In total, the estimated amount of sales tax fraud committed stands at a shocking Rs 227 billion. Criminal proceedings are now underway against these offenders, the minister warned, â€œand a massive enforcement crackdown is imminent. The finance minister reiterated that sales tax fraud is a criminal offense, punishable under Pakistani law with severe consequences, including arrests, hefty fines, and imprisonment of up to 10 years. The crackdown will not only target business owners but will also extend to key executives, including directors, CEOs, CFOs, and other authorized personnel involved in fraudulent activities. Aurangzeb underscored that the government is fully committed to enforcing transparency and accountability in the taxation system. The planned enforcement measures are expected to be rolled out in the coming weeks, as part of a broader effort to recover lost revenue and strengthen Pakistanâ€™s financial standing. â€œThe nation can no longer afford to tolerate such widespread tax evasion. We are taking strong action to close these gaps and ensure that all businesses pay their fair share, he concluded. This operation signals a decisive step towards curbing financial corruption and reinforcing the integrity of Pakistanâ€™s economic framework.

Date: 2024-10-10

Details: Islamabad, October 10, 2024 â€” The Chairman of the Federal Board of Revenue (FBR), Rashid Mahmood Langrial, has unequivocally declared that there will be no further extension for the income tax return filing deadline for the tax year 2024. Langrialâ€™s announcement follows an initial deadline extension from September 30 to October 14, 2024, granting taxpayers additional time to comply with their legal obligations. Despite the grace period, the FBR remains resolute in its stance against any further delays. Langrial, speaking to reporters, underscored the importance of adhering to the new deadline, stressing that the tax authorities are preparing for a robust crackdown on non-filers beginning next month. â€œThe extension provided ample time for compliance, and we are now set to take decisive action against those who continue to evade their tax responsibilities,â€ Langrial stated firmly. The FBR Chairman revealed a significant rise in the number of income tax returns filed this year, more than doubling to a total of four million, a clear indication of the governmentâ€™s intensified efforts to bring more individuals and entities into the tax net. However, he stressed that this achievement does not diminish the need for stricter measures against those who persist in avoiding their civic duty. Armed with a comprehensive data set, the FBR plans to identify and prosecute defaulters rigorously. Prime Ministerâ€™s firm directives have bolstered the FBRâ€™s resolve to pursue tax evaders without leniency. Langrial reiterated that there would be no exemptions or favors for those attempting to skirt the law, ensuring that all eligible taxpayers contribute their fair share to national development. â€œThe Prime Minister has made it clear: no tax thief will be spared,â€ Langrial affirmed, adding that the government is committed to holding every defaulter accountable. In addition to enforcement, the FBR is leveraging enhanced technology and data analytics to streamline the tax filing process and strengthen its enforcement capabilities. Langrial assured that the governmentâ€™s comprehensive crackdown would bring more individuals into the tax net, further improving the countryâ€™s revenue collection and economic stability. With the deadline now fast approaching, the FBRâ€™s message to taxpayers is unmistakable: comply promptly or face the consequences. As the October 14 cutoff looms, the FBRâ€™s proactive stance signals a turning point in Pakistanâ€™s tax enforcement strategy, marking the beginning of a more stringent era in tax compliance.

Date: 2024-10-09

Details: KARACHI: Chairman of the FPCCI Advisory Board and National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum (PBIF), Mian Zahid Hussain said that the possibility of a mini-budget is decreasing due to tax reforms. He claimed that fully digitising the FBR would double revenue collection and free taxpayers from harassment. Mian Zahid Hussain said that the finance minister is not in favour of the mini-budget, but it depends on the cooperation of the tax bureaucracy. He told the business community that if the bureaucracy works hard, it can save the masses and businesses from further burdens. He stated that the implementation of tax reforms will expedite the countryâ€™s economic recovery, thereby offering relief to both the public and the business community. He noted that some expenses should be transferred to the provinces, and those provinces that show laziness in collecting agricultural income tax should be considered for deduction from their payments. According to Mian Zahid Hussain, investors and the international community are once again confident in the Pakistani economy, but another five percent interest rate reduction is necessary to improve the situation. Lauding the role of SIFC, he said that Pakistanâ€™s global ranking is also improving, and there is a need to attract foreign investment as well as pay attention to local investors so that they can do their job. The inflation rate has dropped to less than nine percent, the rupee remains stable, and exports, particularly those from the IT, textile, and agricultural sectors, are on the rise. Therefore, the central bank should avoid unnecessary precautions and immediately lower interest rates to stimulate business activities. A reduction in interest rates will ease the governmentâ€™s burden, boost business activity, and create jobs for the masses, he remarked. Copyright Business Recorder, 2024

Date: 2024-10-09

Details: ISLAMABAD: The Federal Board of Revenue (FBR) has placed strict checks on the import of duties and taxes free vehicles imported by the companies operating in Gwadar Zone. The FBR on Tuesday issued regulatory mechanism â€œImport of Vehicles by Gwadar Zone and Free Zone Area Concession Holder and its Operating Companies Rules, 2024â€. The FBR has declared that at the time of import, the importer shall furnish to the Collector of Customs on the set format an undertaking to abide by the conditions as laid down in the PCT Code 9917 (3) (iii) of Pakistan Customs Tariff and rules made there under failing which they shall be liable to pay the duty and taxes as leviable on each vehicle at the time of import and any other penalties that may be imposed in accordance with the law. The clearance of vehicles shall strictly be handled by the Collectorate of Customs, Gwadar in order to properly monitor such imports and to ensure centralization of record/data. However, if import is made from any other port, the same shall be processed through Transshipment Permit (TP) for destination Port Gwadar for clearance at Gwadar Collectorate. The eligible importer shall furnish to the Authority or any other officer authorised by it in this behalf details of vehicles intended to be imported for the sole purpose of construction, development and operations of Gwadar Port and Free Zone Area, and the Authority or the officer authorized by it, as the case may be, shall ascertain actual requirement of such importer based on the nature of activities of the importer strictly in accordance with the scope as defined under PCT Code 9917(3) (iii) of Pakistan Customs Tariff The Authority shall also take into account vehicles which have already been imported prior to issuance of the regulatory mechanism in order to regularize the same in terms of their bonafide use and to ascertain future requirements of concerned importer, FBR added. In order to avail exemption, eligible importer shall furnish to the Authority a Declaration Form duly signed by the chief executive officer of the Company which shall be certified by the Authority, i.e. Chairman of Gwadar Port Authority, in respect of each vehicle imported, certifying in prescribed manner that such imported vehicles are genuine and bonafide requirements for construction, development and operations of Gwadar Port and Free Zone Area in accordance with the prescribed quotas to be determined by the Authority. The authority shall verify that the conditions in these rules have been satisfied before the issuance of this Authorization. The Authority shall verify genuineness of request of the importing company, and after getting formal approval of the import of vehicles from the Ministry of Maritime Affairs, Government of Pakistan, an authorization letter as per actual requirements of the eligible company in the format as per Annex-B shall be submitted by the Authority through WeBOC system. Thereafter, the importing company shall initiate the process of import, FBR added. Copyright Business Recorder, 2024

Date: 2024-10-09

Details: LAHORE: A freight forwarding agent has proved that charging fees for rendering services cannot be treated as part of his turnover, as all such charges are reimbursable expenses, incurred at the behest of the recipient of service. The tax department, on the other hand, was adamant to treat freight charges, terminal charges, shipment handling charges, duties and taxes as part of invoiced amount, which cannot be excluded from the ambit of turnover as defined in the law. Therefore, the department had levied minimum tax on the turnover, which was challenged by the taxpayer. Sources said the turnover, in terms of clause (b) of subsection (3) of section 113 of the Ordinance, means the gross fees paid for rendering of services other than those covered by final discharge of tax liability, for which tax is separately paid or payable. The contentious question was whether the amounts, comprising of freight charges, terminal charges, shipment handling charges payment of duties and other taxes could be treated as gross receipts. Factually, they said, the claim of reimbursement of other amounts was not disputed. There was no cavil that the term gross fee, in the context of rendering of or providing of services, would exclude reimbursable expenses for the purposes of ascertaining the volume of the â€œturnover". Accordingly, it was held by the relevant forum that the gross fee and not the gross receipts, which shall be treated as part of turnover for the purposes of commuting the minimum tax liability and amounts comprising of freight charges, terminal charges, shipment handling charges payment of duties and other taxes have had to be excluded for the purposes of turnover. It was further held this was not the case of the department that amounts consisting of freight charges, terminal charges, shipment handling charges payment of duties and other taxes were treated as part of gross receipts for the purposes of deduction of withholding tax. Copyright Business Recorder, 2024

Date: 2024-10-09

Details: Islamabad, October 9, 2024 â€“ The Federal Board of Revenue (FBR) has announced the complete elimination of the redemption fine for smuggled goods, intensifying the governmentâ€™s crackdown on illegal trade activities. In a bold directive from Prime Minister Muhammad Shehbaz Sharif, all relevant governmental bodies, especially the FBR and Pakistan Customs, have been tasked with implementing stricter measures to curb smuggling across Pakistan. A pivotal element in this enhanced campaign is the recent amendment introduced via SRO 1619(I)/2024 dated October 3, 2024, which revises the existing S.R.O. 499(I)/2009, originally issued on June 13, 2009. This new regulation grants authorities the power to confiscate vehicles and any other means of transportation involved in smuggling activities, with no possibility of recovery through a redemption fine. This strategic amendment signifies the governmentâ€™s unwavering commitment to eliminating smuggling, a scourge that has severely undermined Pakistanâ€™s economy for years. Smuggling not only drains vital national revenues but also nurtures an unregulated, informal market that destabilizes legitimate trade. Under the updated regulation, any vehicle or conveyance implicated in the illegal transport of smuggled goods will face immediate and irreversible confiscation. This marks a sharp departure from the previous policy, where offenders could reclaim their seized assets by paying a redemption fine. The closure of this loophole ensures that the instruments facilitating smuggling are permanently removed from circulation, thereby crippling the logistics of such illicit operations. The Chairman of the FBR has directed customs officials and law enforcement agencies to act swiftly and decisively to enforce the new amendment. He called for coordinated efforts across all relevant departments to ensure that once vehicles or other conveyances used in smuggling are apprehended, they are permanently confiscated and never returned to operation. This strengthened enforcement is a crucial step towards safeguarding Pakistanâ€™s economic sovereignty and holding those who support illegal trade accountable. The amendment is just one of many robust measures the government is adopting to eliminate smuggling and protect the integrity of the nationâ€™s economy. By closing the doors of redemption, Pakistan inches closer to securing its economic borders and dismantling the networks of illicit trade that have long hindered its financial growth.

Date: 2024-10-09

Details: Islamabad, October 9, 2024 â€“ In a move reflecting ongoing accountability efforts, the Federal Board of Revenue (FBR) has suspended a senior official from the Inland Revenue Service (IRS) for a period of 120 days. This decision, announced in an official memorandum on Wednesday, underscores the FBRâ€™s commitment to enforcing discipline within its ranks. The suspended official, Ms. Sajida Kausar, who holds the position of Commissioner-IR (Zone-I) at the Large Taxpayers Office in Islamabad, was placed under suspension in accordance with Rule 5(1) of the Civil Servants (Efficiency & Discipline) Rules, 2020. The suspension takes effect immediately and will remain in place for 120 days or until the Authority reaches a decision regarding her case, whichever occurs first. The FBRâ€™s action comes amidst heightened scrutiny of tax administration practices and an increasing call for transparency in government operations. While the specific reasons behind Ms. Kausarâ€™s suspension have not been disclosed, the decision indicates the FBRâ€™s proactive stance towards addressing inefficiencies and ensuring accountability among its officials. This suspension is part of a broader initiative by the FBR to bolster the integrity of the tax collection process, particularly as the country grapples with economic challenges and the need for improved revenue generation. By holding top officials accountable, the FBR aims to foster a culture of efficiency and discipline within its workforce. Ms. Kausarâ€™s tenure at the Large Taxpayers Office has been marked by a focus on enhancing tax compliance among major corporations. However, her suspension raises questions about the operational dynamics within the IRS and the FBRâ€™s broader strategy to tackle systemic issues. As the investigation unfolds, the FBR is expected to continue its vigilance in enforcing standards of conduct within its ranks, ensuring that officials uphold the principles of transparency and accountability essential for the effective functioning of the tax system. The outcome of this suspension will likely have implications for the FBRâ€™s ongoing reform efforts and its ability to restore public confidence in Pakistanâ€™s tax administration.

Date: 2024-10-09

Details: Lahore â€“ The Lahore High Court (LHC) has declared that the enhanced rates of withholding tax on late filers of income tax returns, introduced by the Finance Act 2024, will not apply to transactions, returns, or assessments that were finalized before the enactment of the new law. This verdict represents a major development in tax legislation, providing clarity for taxpayers on the scope of the amendments. The judgment of the LHC was delivered in response to a petition filed by the Defence Housing Authority (DHA), challenging the retrospective enforcement of the new withholding tax provisions. The DHA had sought a ruling from the court asserting that the changes made to Section 100BA, in conjunction with Rule 1-A of the Tenth Schedule of the Income Tax Ordinance 2001, as amended by the Finance Act 2024, were prospective in nature and should not affect previously completed tax filings. The LHC upheld the petition, categorically stating that the provisions introduced under Rule 1-A and its accompanying proviso do not possess any retrospective power. The courtâ€™s ruling explicitly emphasizes that these tax law changes cannot be retroactively applied to transactions, returns, or assessments that were concluded prior to the promulgation of the Finance Act 2024. In its order, the LHC made clear that Rule 1-A and the corresponding amendments brought through the Finance Act would only impact future tax obligations, reinforcing the principle that tax laws must be forward-looking unless explicitly stated otherwise. This decision has significant implications for taxpayers, particularly those who finalized their income tax filings or transactions before the 2024 fiscal changes came into effect. Legal experts have lauded the LHCâ€™s judgment as a victory for taxpayer rights, arguing that the ruling safeguards individuals and businesses from the undue burden of retroactive taxation. By preventing the application of enhanced withholding tax rates on past filings, the decision provides a measure of relief for those who may have been adversely impacted by the new legislation had it been enforced retroactively. The Finance Act 2024 introduced several revisions to Pakistanâ€™s tax framework, including increased penalties and higher withholding tax rates for late filers of income tax returns. However, this ruling reaffirms that these changes will only affect future financial actions and not past transactions, ensuring a clearer, more predictable tax landscape for the country.

Date: 2024-10-08

Details: Karachi, October 8, 2024 â€“ The Federal Board of Revenue (FBR) has introduced stringent new regulations for the grant of customs agents licenses in an effort to bolster compliance and integrity within Pakistanâ€™s customs processes. The FBR unveiled these changes via SRO 1618 (I)/2024, which outlines draft amendments to the Customs Rules, 2001. The newly proposed regulations, set to take effect soon, include stricter eligibility criteria, a qualification test, and a performance-based point system designed to maintain high standards for customs agents across the country. Qualification Test and Eligibility Criteria Beginning November 1 of each year, the FBR will invite applications for customs agents licenses through advertisements in reputable national newspapers. Prospective applicants must meet specific eligibility conditions outlined by the FBR. One of the core components of the new framework is a mandatory qualification test, which will assess applicants on customs laws, regulations, procedures, computer proficiency, and knowledge of the Customs Computerized System. The qualification test will be conducted by an accredited institution specified in the FBRâ€™s advertisements. Importantly, applicants must secure a minimum of 50% marks to pass the written examination. Provisional license holders will also be required to sit for the test, with failure to appear or qualify resulting in the cancellation of their provisional licenses. Point-Based System and Penalties Under the new rules, the Customs Computerized System will introduce a point-based system to ensure compliance. Licensees will start with a total of 10 points, which can be deducted for infractions such as misdeclaration, false statements, or other violations of customs regulations. If a licenseeâ€™s points are reduced to zero, their license will be automatically blocked, and proceedings for revocation or cancellation will begin. License Blocking and Revocation In addition to the point-based system, licenses will be blocked and subject to revocation if the following conditions are met: â€¢ A licenseeâ€™s aggregate points fall to zero. â€¢ The licensee fails to file any goods declarations within a one-year period. â€¢ The licensee is inactive for an entire financial year, having not submitted any goods declarations. These measures signal the FBRâ€™s commitment to ensuring that only competent and compliant customs agents are licensed to operate. By raising the bar for qualification and enforcing a system of checks and balances, the FBR aims to enhance the efficiency and transparency of Pakistanâ€™s customs processes.

Date: 2024-10-08

Details: Karachi, October 8, 2024 â€“ In a major policy development aimed at fostering economic activity around the Gwadar Port and Free Zones, the Federal Board of Revenue (FBR) announced a tax holiday for vehicles imported by entities operating within these areas. Through a draft amendment to the Customs Rules, 2001, the FBR has laid out comprehensive guidelines for the duty and tax exemptions that will apply to eligible companies. The tax concession is set to streamline the import process, promote infrastructural development, and facilitate business activities in Gwadar, one of Pakistanâ€™s most strategically significant regions. The FBRâ€™s initiative, formalized through the issuance of SRO 1621(I)/2024, outlines the rules for importing vehicles free of duties and taxes. These amendments will become part of the main legislative framework after a 15-day public commentary period. The new regulations will be known as the â€œImport of Vehicles by Gwadar Zone and Free Zone Area Concession Holder and its Operating Companies Rules, 2024.â€ Eligibility and Import Process The key beneficiaries of this regulatory framework are concession holders and their operating companies. Under the rules, these entities can import vehicles under PCT Code 9917(3) (iii) of the Pakistan Customs Tariff, which governs duty concessions for specified imports. The vehicles imported under this scheme are solely intended for the construction, development, and operational activities of Gwadar Port and the surrounding Free Zones. A declaration form must be submitted by the eligible importers to the Gwadar Port Authority or any other authorized officer, detailing the vehicles intended for import. This declaration, signed by the companyâ€™s chief executive, must confirm that the vehicles are required for legitimate operational purposes. The authority will evaluate the actual requirement of the vehicles based on the importerâ€™s scope of activity and will regularize vehicles already imported under previous provisions. Stringent Certification and Authorization To avail the exemption, each vehicle imported under this scheme must be certified by the Gwadar Port Authorityâ€™s chairman. This certification verifies that the imported vehicles are genuinely needed for the companyâ€™s operational needs, in accordance with predefined quotas. The certification process will ensure that the conditions laid out in the rules are strictly adhered to before the issuance of an authorization letter, which will also require approval from the Ministry of Maritime Affairs. This authorization will be submitted through the WeBOC system, Pakistanâ€™s electronic system for customs clearance, allowing the importing company to initiate the import process. Clearance and Compliance The customs clearance of vehicles will be overseen by the Gwadar Collectorate to ensure centralized monitoring and compliance. In the case of imports arriving at other ports, transshipment permits will be used to transfer the vehicles to Gwadar for final clearance. Importers are required to provide an undertaking that they will comply with all regulations, failing which they will be liable to pay the applicable duties, taxes, and penalties. Vehicle Registration and Record Keeping Once imported, vehicles must be registered under the Motor Vehicle Ordinance, 1965, with the Excise and Taxation Department. The importers are also required to submit the registration certificates to the Collectorate of Customs, Gwadar, within 30 days of the vehicleâ€™s registration. Moreover, both the importer and the Gwadar Port Authority must maintain comprehensive records of all vehicles imported under this scheme. These records will be subject to inspection by customs officers, ensuring transparency and accountability in the use of the duty-exempt vehicles. Restrictions on Disposal One of the key conditions of this tax holiday is that the vehicles cannot be sold or otherwise disposed of without the prior approval of the FBR. Any unauthorized sale or disposal within ten years of importation will trigger the requirement to pay the full duties and taxes applicable at the time of import. In cases where vehicles are sold after ten years, a reduced duty payment of 75% will apply, and after 20 years, the payment will drop to 50%. Surrender and Penalties In the event that the vehicles are no longer needed, they can be surrendered to the Collector of Customs, Gwadar, for further disposal or governmental use. Any violation of the rules, such as unauthorized sales or transfers, will result in the full payment of duties and taxes, along with other penalties as dictated by law. Conclusion This tax holiday for vehicle imports into Gwadarâ€™s Free Zones underscores Pakistanâ€™s commitment to accelerating the development of its most strategically important port. By incentivizing businesses through tax exemptions and facilitating smoother operational processes, the government aims to transform Gwadar into a major hub for trade and industry, driving both local and national economic growth.

Date: 2024-10-08

Details: Karachi, October 8, 2024 â€“ The Federal Board of Revenue (FBR) has mandated that Pakistani residents with substantial foreign income and assets must declare these holdings as part of their annual tax returns. This new requirement, governed by Section 116A of the Income Tax Ordinance, 2001, will apply to individuals whose foreign income and assets exceed certain thresholds. According to the FBR, this directive will help strengthen the countryâ€™s tax compliance framework by ensuring that foreign income and assets are accurately accounted for. Under the amended regulations, every resident taxpayer who earns foreign income of at least 10,000 US dollars or holds foreign assets valued at 100,000 US dollars or more must submit a detailed statement of these holdings. The declaration must accompany the taxpayerâ€™s annual return and adhere to the prescribed form and verification process. Key Provisions Under Section 116A The FBR has outlined several key requirements for taxpayers under Section 116A of the Income Tax Ordinance. These include the following obligations: 1. Disclosure of Total Foreign Assets and Liabilities: Taxpayers must provide a comprehensive declaration of their total foreign assets and liabilities as of the last day of the tax year. This will include details of properties, bank accounts, investments, and any other foreign financial holdings, ensuring full transparency of offshore wealth. 2. Details of Asset Transfers: Any foreign assets transferred by the taxpayer to another individual during the tax year must be reported, along with the consideration for the transfer. This provision aims to prevent the concealment of foreign assets through transfers or other indirect means. 3. Foreign Income and Expenditure: Taxpayers are required to disclose their foreign income in detail, including the sources of this income, and any expenditures incurred during the year. Expenditures necessary to generate foreign income must also be itemized, creating a comprehensive picture of the taxpayerâ€™s international financial activities. Failure to comply with these requirements will not go unnoticed. The Commissioner of Inland Revenue has the authority to issue notices to any individual who, in the Commissionerâ€™s judgment, was obligated to file a foreign income and assets statement but failed to do so. The taxpayer must then submit the required statement by the date specified in the notice. The FBRâ€™s move is part of broader efforts to tighten oversight on international financial activities and increase accountability among Pakistani taxpayers with foreign interests. By compelling individuals with substantial foreign assets and income to declare their holdings, the government aims to combat tax evasion, improve revenue collection, and ensure that all taxpayers contribute fairly to the national economy. This new policy is expected to have far-reaching implications, particularly for high-net-worth individuals with offshore interests, and underscores the FBRâ€™s commitment to enhancing financial scrutiny and fostering a culture of compliance.

Date: 2024-10-07

Details: ISLAMABAD: Director Excise & Taxation Department, Islamabad, Bilal Azam has assured his departmentâ€™s commitment to providing more transparent and user-friendly services for residents, particularly in vehicle registration and token tax payment. In an exclusive interview with APP, he highlighted the importance of leveraging digital solutions to enhance accessibility for residents while actively working to eliminate the role of agents who contribute to corrupt practices. Admitting the agent mafiaâ€™s existence despite a number of modern solutions, especially mobile facilities, he underscored citizensâ€™ role to utilize the departmentâ€™s digital online services, which are designed to simplify processes and reduce the reliance on intermediaries. By fostering awareness and engagement, Azam believes the community can play a vital role in transforming service delivery and promoting transparency. Responding to queries and public concerns raised by this agencyâ€™s scribe, Azam outlined a two-step process for vehicle registration and transfer. Applicants can simply call the departmentâ€™s helpline at 111-383-383 to provide their details and schedule a visit from a mobile registration van, which may arrive on the same day or the next. This initiative not only caters to individual needs but also represents a move towards personalized public service. Additionally, mobile vans are stationed at five locations throughout the week, expanding access for those who prefer to handle their affairs in person. The introduction of the Islamabad Citizen App marks another milestone, allowing residents to pay their token tax via smartphone, thereby reducing congestion at physical offices. This digital approach addresses the challenges posed by the high volume of vehicle registrations, making it easier for citizens to manage their obligations from the comfort of their homes. Moreover, ETO highlighted the departmentâ€™s ongoing commitment to regulatory enforcement, with teams actively monitoring issues such as tinted windows and fancy number plates. Fines collected from these operations contribute to the national treasury, reinforcing the departmentâ€™s role in maintaining public safety and order. The Excise & Taxation Department has witnessed notable growth in vehicle registrations in recent years and annually over 50,000 new vehicles are registered, resulting in a significant increase in total registration, reaching almost 1.5 million up till now. With the implementation of digital initiatives, the average processing time for vehicle registration has been reduced from several weeks to a few days, leading to a significant decline in the number of physical visits to the office. Looking ahead, the Excise & Taxation Department is set to further digitize its operations, with plans for continued enhancements to better serve the public. Azam urged vehicle owners to comply with regulations by removing any modifications that could lead to fines, thus fostering a cooperative relationship between the department and the community. Through these initiatives, the department is not just transforming vehicle registration and tax payment procedures; it is also setting a standard for public service that prioritizes efficiency, accessibility, and accountability. As they pave the way for a more modernized system, the department invites residents to engage with these services and experience the benefits firsthand. â€œMany citizens from across the country seek to register their vehicles in the federal capital, as it adds significant value to their registration. However, this influx also places an increased workload on our local office. To address this, I emphasize the importance of streamlining our processes and suggest that provincial vehicle registration offices, like those in Punjab, implement similar efficiencies. By doing so, we can better manage the demand and ensure a smoother experience for all vehicle owners, while maintaining the integrity of our servicesâ€ Azam highlighted. â€œIn our ongoing efforts to enhance public services, I urge the media to help raise awareness among citizens about our latest online services. By fully utilizing these digital platforms, residents can significantly reduce the rush at our offices and streamline their own processes. This not only promotes public ease but also helps us discourage unfair practices associated with intermediaries. Together, we can create a more transparent and efficient system that benefits everyoneâ€, concluded the Excise head in his final remarks.

Date: 2024-10-07

Details: The Federal Board of Revenue (FBR) has released a detailed guide for taxpayers on how to modify or change their email address or mobile number when logging into the IRIS portal, especially for filing income tax returns. With taxpayers often logging into the IRIS system only at the time of return filing, forgetting passwords and using outdated contact information has become a common challenge. To address this, the FBR has outlined three straightforward methods through which individuals can update their registration information. Common Challenges for Taxpayers A significant number of taxpayers face login issues during the return filing period due to forgotten passwords or outdated contact details. Recovery of the password requires accurate email addresses and mobile phone numbers, and many taxpayers fail to provide these. The updated procedure ensures that taxpayers can resolve this hurdle by updating their contact details through various accessible methods. Three Ways to Change Registration Information The FBR has categorized the methods for changing or modifying personal registration details into three main processes: through the IRIS portal, via the FBR helpline, and by visiting a Regional Tax Office (RTO). Below are the steps involved for each method. 1. Updating Information through IRIS Portal Taxpayers can log into the IRIS system and modify their details directly by accessing the systemâ€™s registration form (Form 181). This is an online process and can be done at any time. The information that can be updated through this method includes: o Mobile number o Email address o Personal or residential address o Business address o Addition of business branches o Legal representatives (as per section 87 of the Income Tax Ordinance, 2001) o Bank account information 2. Updating Information via FBR Helpline If accessing the IRIS system is not possible, taxpayers can contact the FBR helpline, either by phone or email, to request updates. The following details can be modified through the helpline: o Name o Date of birth o Gender o Disability status o old-age citizen status 3. Visiting a Regional Tax Office (RTO) For certain cases, such as discontinuing a business or updating sensitive information, visiting the relevant Regional Tax Office (RTO) is required. Taxpayers will need to provide the necessary documentation for changes to be made. This applies to: o Business discontinuation o Jurisdiction for income tax assessment o Deregistration o Updating CNIC numbers o Pakistan Origin Card (POC) information Streamlining Tax Compliance By providing these various options, the FBR aims to streamline the process of tax compliance and ensure that taxpayers can easily access their accounts for return filing. This updated procedure minimizes confusion and provides flexibility, reducing the burden on taxpayers and the FBR alike.

Date: 2024-10-07

Details: The Federal Board of Revenue (FBR) has expressed serious concern over an increasing trend of senior officials, particularly Chief Commissioners of Inland Revenue (IR) and Chief Collectors of Pakistan Customs, leaving their designated stations without obtaining prior approval from the concerned authorities. In a statement issued recently, the FBR emphasized that such actions constitute â€œmisconductâ€ under the Civil Servants (Efficiency & Discipline) Rules, 2020, and are a direct violation of the Government Servants (Conduct) Rules, 1964. This stern reminder from the FBR underscores the necessity for adherence to regulatory protocols and upholding the standards of discipline expected from high-ranking public officials. The FBR reiterated that the departure of officials without formal approval disrupts the organizational workflow and hampers effective governance, particularly in the crucial domains of tax collection and customs regulation. These officials, occupying critical positions in the governmentâ€™s revenue machinery, are expected to lead by example and demonstrate unwavering compliance with the rules governing their conduct. To curb this recurring practice, the FBR has mandated that all Chief Commissioners-IR and Chief Collectors of Customs must obtain prior written approval from the concerned Member (Operations) before leaving their stations of posting for any reason, including official tours and meetings. This directive is designed to ensure transparency and accountability, reinforcing the principle that senior officers must remain accountable for their whereabouts, even during official duties. In addition, the FBRâ€™s directive also extends to Commissioners-IR and Collectors of Customs. They, too, are required to secure station leave approval from the relevant Member (Operations) prior to any departure from their designated posts. The FBR emphasized that this requirement applies uniformly, whether the absence is related to official work or personal reasons. The regulatory body has expressed its dissatisfaction with the lack of adherence to these protocols in recent times, which it views as detrimental to maintaining discipline and efficiency within the institution. The FBRâ€™s message serves as a clear warning that any deviation from these rules will be considered a serious breach of conduct and could result in disciplinary action under the Civil Servants (Efficiency & Discipline) Rules, 2020. By taking this strong stance, the FBR aims to restore rigor in the administration of its operations, ensuring that its leadership remains committed to upholding the integrity of Pakistanâ€™s revenue collection and customs processes. This measure seeks to reinforce a culture of accountability and discipline across the board, essential for the smooth functioning of one of the countryâ€™s most critical financial institutions.

Date: 2024-10-07

Details: Karachi, October 7, 2024 â€“ In a shocking revelation, the Federal Tax Ombudsman (FTO) has identified a monumental tax fraud worth Rs 14.66 billion attributed to a cybercrime breach within the Federal Board of Revenue (FBR). The crime, which infiltrated FBRâ€™s system, resulted in unauthorized access and the misuse of taxpayer data, leading to colossal losses for the national exchequer. This fraud case marks one of the most significant cyberattacks targeting Pakistanâ€™s tax infrastructure. The FTOâ€™s findings, based on a detailed investigation, point to serious lapses in securing the complainantâ€™s user ID, password, and sensitive taxpayer data. These vulnerabilities facilitated the cybercriminals to commit tax fraud on behalf of the complainant, raising questions about the overall integrity of the FBRâ€™s system. The FTO labeled this breach as a case of maladministration, highlighting the glaring gaps in FBRâ€™s ability to protect its system from such sophisticated attacks. The Case in Detail The case revolves around an individual, a retired Armed Forces personnel, who registered for sales tax under the business name â€˜Gravity Tradersâ€™ in 2010. The complaint filed against the Commissioner RTO-II, Karachi, accuses the tax authority of fraudulently attributing Rs 81.43 billion in transactions to the complainant for the tax periods between September 2023 and January 2024. These transactions led to a corresponding sales tax liability of Rs 14.66 billion. The complainant was blocking by the tax authority on March 27, 2024, for allegedly declaring fake supplies, despite having filed â€˜nullâ€™ sales tax returns for the same period. The FTOâ€™s investigation revealed that the complainant was neither served a proper show cause notice nor given an opportunity to defend himself before his Sales Tax Registration (STRN) was blocked. Upon reviewing the complaint, the FTO referred the matter to the Revenue Division Secretary for comments, as outlined in Section 10(4) of the FTO Ordinance and Section 9(1) of the Federal Ombudsmen Institutional Reforms Act, 2013. The tax authorityâ€™s defense, submitted through an Excel sheet, revealed large-scale fake supplies declared in the complainantâ€™s name. These fake supplies were used by various buyers to claim huge input tax during the relevant periods. A Coordinated Cybercrime Operation The FTOâ€™s investigation uncovered that a sophisticated gang of cybercriminals had exploited dormant taxpayer accounts to execute fake transactions. These criminals, likely working in collusion with current and former employees of the FBR and PRAL (Pakistan Revenue Automation Limited), gained unauthorized access to the system, forging sales records to benefit certain manufacturers and end consumers. The modus operandi of the gang involved extracting inactive taxpayer accounts from the FBR website and misusing their credentials to fabricate fake transactions. This cybercrime not only robbed the national treasury but also tarnished the credibility of Pakistanâ€™s tax administration system. A comprehensive review of forward and backward transactions from multiple tax offices, including RTO-I and RTO-II Karachi, LTO Lahore, and RTO Faisalabad, revealed the involvement of several entities in this fraud. Bank account scrutiny and in-depth investigations into buyer-supplier relations further corroborated the fraudulent activities. Flaws in FBRâ€™s Cybersecurity System The FTOâ€™s report criticized the FBR for its failure to safeguard the integrity of taxpayer data. It was discovered that cybercriminals had changed the complainantâ€™s contact information, including phone numbers and email addresses, on the FBRâ€™s web portal. These changes were made to block the complainant from accessing the system and prevent any revisions to the tax returns. Such security lapses enabled the perpetrators to exploit the system unchecked. The FTO also flagged the PRAL system, which failed to capture essential sales tax documents, such as Annexure C, for several tax periods. The absence of these documents further hindered the investigation and highlighted significant flaws in FBRâ€™s data management and audit processes. A Call for Accountability and Reform The FTOâ€™s report calls for a thorough investigation to identify the insiders involved in facilitating the cybercrime. The report urges the FBR to launch legal proceedings against those responsible, including companies and individuals who knowingly participated in the fraudulent scheme. The key beneficiaries of this fraud are accused of evading taxes by using fake invoices and manipulating sales records. The FTO also recommended that the Chief Commissioners of various tax zones initiate proceedings against the culprits, ensuring that those involved in the tax fraud are brought to justice. Additionally, the report stresses the need for reform in FBRâ€™s IT infrastructure to prevent such breaches in the future. Enhanced cybersecurity measures, stricter enforcement, and real-time monitoring of transactions are essential to safeguard the system from future cyberattacks. The Road Ahead This case exposes serious vulnerabilities in Pakistanâ€™s tax administration, highlighting the growing threat of cybercrime in the financial sector. The incident underscores the urgent need for the FBR to strengthen its security protocols, ensure transparency, and enforce stricter controls on access to taxpayer data. As the investigation continues, the FBR is expected to take decisive action against those involved in the tax fraud while also addressing the systemic issues that allowed this breach to occur. The success of these measures will determine the future resilience of Pakistanâ€™s tax administration system in the face of increasingly sophisticated cyber threats. With Rs 14.66 billion at stake, this case serves as a wake-up call for the countryâ€™s tax and financial authorities to prioritize data security and safeguard the nationâ€™s revenue from the growing menace of cybercrime.

Date: 2024-10-07

Details: Islamabad, October 7, 2024 â€“ The Federal Board of Revenue (FBR) has confirmed the governmentâ€™s plans to introduce a money bill aimed at imposing stringent restrictions on non-filers of income tax returns, marking a major step in its efforts to enhance tax compliance across the country. In an announcement on Monday, a senior official from the FBR disclosed that the national tax agency is poised to bring approximately 2.8 million potential taxpayers into the formal tax net. This expansion, the official highlighted, is expected to inject a significant Rs1.6 trillion into the national economy. Speaking to the Associated Press of Pakistan (APP), FBR spokesperson Bakhtiar Muhammad stated, â€œThere are around 3.5 million top households liable to pay taxes, yet 2.8 million of them are evading their fiscal obligations.â€ The spokesperson emphasized that the FBR is now intensifying efforts to enforce compliance among these individuals. The current government, determined to bolster the countryâ€™s tax-to-GDP ratio, has implemented a comprehensive fiscal strategy, which has already yielded notable improvements in tax filings and revenue collection. Bakhtiar noted that, as a result of the governmentâ€™s prudent fiscal policies, tax return filings have surged by an extraordinary 105% compared to the previous fiscal year. Filings increased from 1.8 million to 3.7 million in the 2024-25 fiscal year alone, a significant achievement. To further tighten the noose on non-compliance, the FBR plans to introduce 15 specific restrictions on non-filers over the next two to three months. These restrictions will be enacted through a finance bill, making life increasingly difficult for individuals who fail to file their tax returns. â€œNon-filers will be prohibited from purchasing properties and vehicles, traveling abroad, and opening current accounts in any bank,â€ Bakhtiar added. He also underscored that the FBR intends to completely abolish the non-filer category, making tax filing mandatory for all eligible individuals. The FBR is also enhancing its capacity for enforcement through advanced automation systems. Bakhtiar highlighted that income generated from both investments and spending will soon be inaccessible to non-filers, as the FBR plans to integrate payment and invoicing systems into its tax collection apparatus. â€œThis development will effectively make tax evasion impossible,â€ he asserted, adding that automation is a key tool in ensuring tax compliance. In parallel, the FBR is undertaking a sweeping digital transformation of its customs processes, aimed at improving efficiency in examination and appraisal functions. On the revenue front, the FBR has already exceeded its September 2024 target by collecting Rs1.106 trillion. This accomplishment is part of broader revenue collection efforts that are closely tied to the FBRâ€™s ongoing reform agenda, which includes both policy enhancements and digital initiatives. In a related development, FBR Chairman Rashid Mahmood Langrial recently met with officials from the World Bank (WB) to discuss the ongoing FBR Transformation Plan. The plan, which falls under the â€œPakistan Raises Revenueâ€ project, encompasses a range of initiatives including tax policy reforms, digitalization, human resource capacity building, and anti-smuggling measures. To expedite the FBRâ€™s digitization efforts, the board has also restructured its internal framework. Senior tax officialsâ€™ roles have been redefined, particularly to streamline operations and foster a faster digital transition. Notable changes include the re-designation of the Member (Public Relations) post to Member (Taxpayers Services), and the post of Member (Accounting) to Member (Organizational Audit). Additionally, the FBR has merged the roles of Member (Information Technology) and Member (Digital Initiatives) into a new position, Director General (Information Technology and Digital Transformation). This restructuring is expected to sharpen the agencyâ€™s focus on tax compliance and improve the efficiency of its operations. These sweeping reforms, along with the forthcoming restrictions on non-filers, reflect the FBRâ€™s robust commitment to enforcing tax compliance, modernizing its systems, and expanding the countryâ€™s tax base.

Date: 2024-10-07

Details: Islamabad: The Federal Tax Ombudsman (FTO) has launched a major initiative to facilitate taxpayers in filing their annual income tax returns, offering free-of-cost services to the public. The newly established Facilitation Desk at the FTO headquarters has already seen a significant number of taxpayers, including individuals and salaried employees, taking advantage of the service. This initiative comes as a relief for many taxpayers who previously had to rely on costly tax advisors to file their returns. With the help of FTO, taxpayers can now submit their income tax returns swiftly and without any financial burden. Many individuals have expressed their appreciation for the effort, noting that this initiative saves them substantial fees while ensuring compliance with tax regulations. The Federal Tax Ombudsman, in collaboration with the Federal Board of Revenue (FBR), has implemented this program just in time for the extended tax return filing deadline, which has been pushed to October 14th. The Facilitation Desk, located at the FTO Secretariat in Islamabad, has been set up to assist taxpayers in overcoming hurdles related to the filing process, including issues with password retrieval and technical challenges on the FBRâ€™s online portal. Trained FBR officials have been assigned to the desk to provide hands-on support to those struggling to file their returns. This direct assistance is only available in person at the FTO headquarters, as the office has clarified that no guidance will be given over phone calls. The FTO office emphasized that this in-person service ensures more accurate and efficient handling of taxpayer queries. The office has also highlighted the growing number of individuals benefiting from the service, noting that the response has been overwhelmingly positive. Taxpayers, particularly from the salaried class, have commended the FTOâ€™s efforts to simplify the tax filing process and eliminate the need for costly middlemen. This move reflects the FTOâ€™s broader commitment to resolving tax-related issues and ensuring that taxpayers can meet their obligations without facing unnecessary financial strain or procedural difficulties. As the filing deadline approaches, the FTO continues to encourage individuals to visit their Facilitation Desk and take advantage of this valuable service. The office remains dedicated to assisting taxpayers and plans to expand its support measures in the future, further reinforcing its mission of alleviating taxpayer grievances.

Date: 2024-10-06

Details: KARACHI: Ateeq Ur Rehman economic & financial analyst said that imposing more taxes for generating more revenue is not the solution rather the expansion of the tax base should be by incorporating new tax payers and not over burdening the existing tax payers. Non-Tax Revenue (NTR) is the other source of increasing the revenue like, License Fees, Surplus Profits of Regulatory Bodies, Passport Fees, Petroleum Development levy, Natural gas Development Surcharge, Cellular Mobile Operators Fees, Optic Fiber Cable License Fees, Dividends, Mark-Ups and others. Attracting investments in Agriculture, Oil & Gas, Mining, Fintech, Equipment, Transfer of Technology, Pharmaceuticals, Maritime should be priority. Predominantly and largely by inviting land lock countries to boost facilities of our ports. Pakistanâ€™s Blue Economy can generate over US$100 billion, which had not been used up to its full potential. Incorporating blue economy in the national economy is of utmost importance for a country like Pakistan. Pakistanâ€™s coastline of 1001km is home to different species of fishes, marine animals, plants and mineral resources, renewable energy, etc. The development of economic and industrial zones, import substitution and value added industries are eminent for the growth of revenue of our country. Acquiring and complying with international certification would go a long way solving our revenue deficit problems by generating â€œProduce of Pakistan and Made in Pakistanâ€. The FBR so far-fetched Rs2556 billion against the target of Rs2652 billion, a shortfall of Rs96 billion in first quarter (July to September), thus facing a gigantic task for achieving highly ambitious tax collection target of Rs12913 billion for the current fiscal year. Moreover it has been a challenging situation to achieve growth in revenue close to 40% during remaining 3 quarters (October to June) of the current fiscal year having IMF Pressures. Maybe government would have to consider taking additional revenue measures during the current year whereas growth rate is declining due to imposition of more taxes. Exporters and other businesses are hard hit by massive increase in electricity and other energy prices, withdrawing subsidies without compensation, high interest rate, declining the benefits of exchange rate, etc. Copyright Business Recorder, 2024

Date: 2024-10-06

Details: Karachi, October 6, 2024 â€“ The Federal Board of Revenue (FBR) has imposed a stringent five-year time limit on the modification of wealth statements. Taxpayers will no longer be permitted to revise their wealth statements after the expiration of this five-year window, a rule that underscores the FBRâ€™s commitment to ensuring timely and accurate tax compliance. The wealth statement, a critical document for individuals filing income tax returns, serves as a detailed account of a taxpayerâ€™s assets, liabilities, and expenditures. Its importance lies in ensuring that individuals accurately declare their wealth, both domestic and foreign, for a given tax year. The FBR, through Section 116 of the Income Tax Ordinance, 2001, has made it mandatory for certain individuals to file this statement alongside their income tax returns. The FBRâ€™s recent directive reinforces the legal framework governing wealth statements. According to the ordinance, a Commissioner may issue a written notice requiring any individual to submit a wealth statement. This statement, which must be submitted in the prescribed form and verified in a specified manner, includes particulars such as: â€¢ Total Assets and Liabilities: This includes all assets, both domestic and foreign, as well as liabilities on the specified date. Additionally, the taxpayer must disclose the assets and liabilities of their spouse, minor children, and other dependents if they are reliant on the taxpayer. â€¢ Transfer of Assets: The statement must also detail any assets transferred to another person during the specified period, along with the consideration for the transfer. â€¢ Expenditures: Taxpayers are required to report the total expenditures incurred by themselves, their spouses, minor children, and other dependents. â€¢ Reconciliation Statement: A reconciliation statement must also be included, reconciling the taxpayerâ€™s wealth over the period in question. One of the most significant aspects of this new directive is the clarification that taxpayers are allowed to revise their wealth statements if they discover any omissions or inaccuracies. However, this must be done within the specified five-year window. The FBR emphasized that any revision outside this timeframe will be deemed invalid, except in cases where the taxpayer has not yet received a notice under Section 122(9) of the Income Tax Ordinance. This decision is likely aimed at preventing the manipulation of financial disclosures and ensuring that individuals adhere to a strict timeline for declaring any changes in their wealth. The FBR has also reserved the right to void any revisions that appear to be made in bad faith, following a thorough review and providing the taxpayer with an opportunity to be heard. Furthermore, this five-year restriction also extends to revisions made by taxpayers who are members of an association of persons (AOP). They too must file their wealth statements alongside their individual and AOP income tax returns, ensuring that all relevant financial information is transparently disclosed. This move by the FBR reflects the growing emphasis on financial accountability and the need to close potential loopholes in the tax reporting system. By limiting the ability to revise wealth statements, the FBR ensures that individuals cannot retroactively adjust their financial disclosures beyond a reasonable timeframe, thereby enhancing the integrity of Pakistanâ€™s tax system. Taxpayers are urged to remain vigilant about their wealth declarations and ensure timely compliance with FBR regulations, as failure to adhere to these guidelines may result in penalties and scrutiny. This decision is expected to strengthen the countryâ€™s tax administration and promote fairer tax practices across the board.

Date: 2024-10-04

Details: Karachi, October 4, 2024 â€“ The Federal Board of Revenue (FBR) has announced stringent measures aimed at ensuring compliance with tax return filings for the fiscal year 2024-25. This decisive action follows the provisions outlined in the Income Tax Ordinance, 2001, which has been updated as of June 30, 2024, empowering the FBR to impose penalties and enforce compliance among taxpayers. The FBRâ€™s latest initiative focuses on Section 114B of the Income Tax Ordinance, which grants the board the authority to enforce the filing of returns. Under this section, the FBR has outlined specific powers and repercussions for individuals who fail to appear on the active taxpayersâ€™ list yet remain liable to file their returns. According to Section 114B: 1. General Orders: The FBR can issue income tax general orders against individuals not listed as active taxpayers. This move is intended to identify and target those who have evaded their tax responsibilities. 2. Consequences for Non-compliance: The repercussions for individuals mentioned in these orders are severe and may include: â€“ Disabling of mobile phones and SIM cards. â€“ Disconnection of electricity and gas services. â€“ Restrictions on foreign travel for Pakistani citizens, although exceptions will be made for individuals holding National Identity Cards for Overseas Pakistanis (NICOP), minors, students, and those traveling abroad for Hajj or Umrah, among other specified categories. 3. Restoration of Services: The FBR or the jurisdictional Commissioner may restore mobile and utility services if they determine that the individual has either filed their return or is not liable to do so under the ordinance. 4. Conditions for Action: No individual will be included in the general order without fulfilling specific criteria: â€“ A notice under sub-section (4) of Section 114 must have been issued. â€“ The compliance deadline for this notice must have lapsed. â€“ The individual must not have filed their return. 5. Additional Provisions: Actions taken under this section do not preclude other actions available under the provisions of the ordinance, indicating that the FBR retains additional enforcement options at its disposal. The FBRâ€™s announcement signifies a robust commitment to enhancing tax compliance and addressing the rampant tax evasion that has plagued the system for years. By imposing harsh consequences, the FBR aims to bolster the integrity of the tax system and ensure that all eligible individuals contribute their fair share. Taxpayers are urged to take immediate action to fulfill their obligations and avoid the impending penalties. This decisive enforcement strategy may usher in a new era of accountability within Pakistanâ€™s taxation framework.

Date: 2024-10-03

Details: Islamabad, October 3, 2024 â€“ In a significant move to enhance Pakistanâ€™s tax collection framework and facilitate economic growth, World Bank (WB) Country Director Najy Benhassine met with Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial on Thursday to discuss the FBRâ€™s Transformation Plan. The meeting focused on strategies to maximize revenue growth and align efforts under the ongoing Pakistan Raises Revenue Project. Najy Benhassine was joined by a delegation that included Tobias Akhtar Haque, Lead Country Economist, Ms. Lucy Pan, Senior Economist, and Ms. Irum Touqeer, Public Sector Specialist. The high-level discussion was aimed at deepening cooperation between the World Bank and FBR, especially in the realm of tax reforms and digitalization of the tax system. Chairman Langrial provided an extensive overview of the FBR Transformation Plan, a reform initiative backed by the Prime Minister, which seeks to modernize the countryâ€™s tax system. He outlined the governmentâ€™s vision for transforming the FBR into a more efficient and transparent institution, with a focus on sustainable revenue generation while making compliance easier for taxpayers. The chairman emphasized that the core objective of these reforms is to boost revenue growth without overburdening taxpayers. The Transformation Plan, as explained by the FBR Chairman, encompasses several key areas. These include tax policy reforms, digitalization of the tax collection process, capacity-building initiatives for human resources, anti-smuggling measures, and broad-based reforms in tax administration. These efforts are designed to improve tax compliance and close the gaps that currently exist in the system. One of the significant elements of the Transformation Plan is the use of digital tools to enhance transparency and simplify tax procedures. This will allow businesses and individuals to comply with tax requirements more efficiently, reducing bureaucratic hurdles. The plan also includes measures to improve the capacity of the FBR staff, ensuring they have the necessary skills and resources to handle the complexities of modern tax administration. The World Bankâ€™s Country Director, Najy Benhassine, praised the FBRâ€™s reform agenda, expressing strong support for the initiatives outlined. He reaffirmed the World Bankâ€™s commitment to assist Pakistan in its efforts to improve revenue mobilization and create a more robust, fair, and efficient tax system. â€œWe are committed to supporting Pakistan in this critical reform journey, which is key to achieving sustainable economic growth,â€ Benhassine stated, reiterating the World Bankâ€™s role in aiding the countryâ€™s tax reforms and development projects. The meeting marks another milestone in the ongoing collaboration between the FBR and the World Bank, as both institutions work together to create a more prosperous and economically stable Pakistan.

Date: 2024-10-03

Details: Islamabad, October 3, 2024 â€“ In a decisive move to combat smuggling across Pakistanâ€™s western borders, the Federal Board of Revenue (FBR) on Thursday delegated key customs powers to the Frontier Corps (FC) Balochistan. This measure aims to curb the illicit trade and smuggling activities rampant in the provinceâ€™s border regions. Through SRO 1508(I)/2024, dated September 24, 2024, the FBR officially granted FC Balochistan (North and South) the authority to act as customs officers under the Customs Act of 1969. The newly conferred powers enable the FC to operate within their respective jurisdictions to thwart smuggling activities while safeguarding legitimate trade. The decision is effective immediately and reflects the governmentâ€™s ongoing commitment to strengthening border security and maintaining economic stability. The FBR has imposed several conditions on the FCâ€™s authority to ensure the smooth execution of its mandate while avoiding disruptions to lawful trade. Notably, the FCâ€™s powers will be restricted to non-customs areas within Balochistan, specifically excluding designated customs stations, ports, border customs stations, international airports, and bonded warehouses. Moreover, the personnel of FC Balochistan have been instructed not to interfere with any bona fide passengerâ€™s baggage or goods already cleared by customs authorities. This clause seeks to prevent unnecessary delays and ensures the facilitation of legitimate trade and travel. â€œThe primary objective of this delegation of powers is to intensify efforts against smuggling, particularly in remote and hard-to-reach areas where the Frontier Corps has an established presence,â€ stated an FBR official. â€œHowever, we are also ensuring that the flow of lawful trade remains unobstructed.â€ The FBR has mandated the FC to exercise due diligence in performing their duties, ensuring they do not disrupt legitimate imports, exports, or general public activities. The FC personnel will provide assistance to customs officers in line with Section 7 of the Customs Act, reinforcing collaboration between law enforcement agencies. In addition to their new customs functions, the FC is required to deposit any seized goods suspected of being smuggled into state warehouses, which must be approved by the Collector of Customs. Furthermore, the Officer Commanding (OC) of each FC formation will be responsible for submitting monthly reports detailing all seizures to the relevant customs enforcement authority. This collaboration between the FBR and FC Balochistan underscores the governmentâ€™s strategy to tighten border controls and enhance enforcement efforts in combating illegal smuggling, a persistent challenge to Pakistanâ€™s economy.

Date: 2024-10-03

Details: Karachi, October 3, 2024 â€“ The Federal Board of Revenue (FBR) has announced the categories of individuals and entities required to file income tax returns for the tax year 2024-25, in compliance with Section 114 of the Income Tax Ordinance, 2001. This notification outlines the obligations for taxpayers across different sectors, ensuring broader compliance with Pakistanâ€™s tax laws and streamlining the countryâ€™s tax collection process. Who Must File Income Tax Returns? According to the FBR, the following persons and entities are legally obligated to file their income tax returns: 1. Companies and Individuals Earning Taxable Income: Every company, and any individual (excluding companies) whose taxable income exceeds the threshold defined by the Income Tax Ordinance, is required to submit a tax return. This includes non-profit organizations as per Section 2(36) of the Ordinance. 2. Final Taxation Subjects: Persons whose income falls under final taxation provisions are also obligated to file returns. These taxpayers must report all income subject to taxation and provide relevant documentation. 3. Owners of Significant Property or Assets: Any individual who owns immovable property measuring 500 square yards or more, or a flat in areas within municipal limits, cantonments, or Islamabad Capital Territory, is required to file tax returns. Additionally, those who possess immovable property or flats of similar size in rated areas must also comply with the filing requirements. 4. Motor Vehicle Owners: The obligation extends to individuals who own motor vehicles with an engine capacity exceeding 1000 CC. This stipulation aims to capture those with substantial assets that signify higher income levels. 5. National Tax Number (NTN) Holders: Any person who has obtained a National Tax Number (NTN) is automatically required to submit tax returns. Holding an NTN suggests engagement in taxable activities and income generation, and the FBR mandates compliance from these individuals. 6. High Electricity Consumers: Individuals with commercial or industrial electricity connections whose annual bill exceeds PKR 500,000 must file returns, reflecting their significant business operations and energy consumption. 7. Professionals and Business Entities: Registered professionals and business entities, including those affiliated with organizations like the Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council, and other similar professional bodies, are required to file returns. This ensures accountability and transparency among professionals contributing to the countryâ€™s economic activity. 8. Foreign Income and Assets Declaration: Residents with foreign income or assets must file a return in line with Section 116A of the Ordinance. This is part of the FBRâ€™s ongoing effort to combat tax evasion and encourage the declaration of offshore assets. Filing Guidelines The FBR has emphasized the need for taxpayers to submit their returns in the prescribed format, accompanied by annexures, statements, or documents as required. Each return must include all relevant details, such as income particulars, tax payments, and records of wealth, foreign income, and assets. The filing must also be supported by the appropriate tax payments, where applicable, to ensure that taxpayers fulfill their financial obligations to the state. The filing of returns can be done electronically, as specified by the FBR, through the web or other computer-readable media. The FBR is also expected to release further guidelines on e-intermediaries authorized to digitize and transmit tax data to the department. Special Notices and Requirements The FBR has made provisions for special cases where the Commissioner may issue a written notice requiring a return for less than twelve months. This can occur in situations such as the death of a taxpayer, bankruptcy, liquidation, or permanent departure from Pakistan. In such cases, returns must be filed within the time specified in the notice. Additionally, the Commissioner may issue notices to persons who, in their opinion, are required to file returns but have failed to do so. These individuals must submit their tax returns within 30 days of receiving such a notice. The Commissioner can issue notices for the last five or ten tax years, depending on the circumstances. Revised Returns and Penalties In cases where taxpayers discover omissions or errors in their filed returns, they may submit revised returns, subject to specific conditions. The revision must include updated accounts and reasons for the changes, and it may require the Commissionerâ€™s approval. Failure to meet the specified conditions will render the revised return invalid. Taxpayers who voluntarily revise their returns and pay any tax shortfalls before receiving audit notices or other compliance requests may avoid penalties. However, if the taxpayer revises their return after the issuance of a show-cause notice, they are liable to pay not only the tax and default surcharge but also 50% of the penalties imposed. Conclusion The FBRâ€™s comprehensive guidelines for the 2024-25 tax year highlight its commitment to improving compliance and broadening the tax net. By clarifying the categories of individuals and entities required to file returns, the FBR aims to promote transparency, accountability, and fairness in Pakistanâ€™s taxation system. Taxpayers are urged to meet these requirements promptly to avoid penalties and ensure their contribution to the nationâ€™s financial well-being.

Date: 2024-10-02

Details: Islamabad, October 2, 2024 â€“ The Federal Board of Revenue (FBR) on Wednesday unveiled a series of re-designations and mergers within its organizational structure as part of an ongoing transformation and restructuring initiative. The changes, which are effective immediately, aim to streamline operations and enhance efficiency across various departments of the FBR. In an official memorandum, a spokesperson for the FBR confirmed that the decisions were made during a high-level meeting held on September 18, 2024. The restructuring includes modifications to key positions and reporting hierarchies at FBR headquarters in Islamabad. The spokesperson emphasized that the changes reflect the FBRâ€™s commitment to modernization and improved service delivery. Among the key changes is the re-designation of the post of Member (Public Relations) to Member (Taxpayers Services). This shift is designed to focus on improving taxpayer engagement and facilitating better communication between the FBR and the public. The newly re-designated position underscores the FBRâ€™s intention to enhance services for taxpayers, streamlining processes to create a more user-friendly environment. In another significant change, the post of Member (Accounting) has been re-designated as Member (Organizational Audit). This restructuring aims to strengthen internal audits and ensure robust oversight within the organization. The enhanced focus on organizational audit is expected to bolster the transparency and accountability of the FBRâ€™s operations. Moreover, the posts of Member (Information Technology) and Member (Digital Initiatives) have been merged, forming a new position titled Director General (Information Technology and Digital Transformation). This newly created role will be responsible for driving digital initiatives and overseeing the FBRâ€™s technology infrastructure. The Director General (IT & Digital Transformation) will report directly to the Member (IR-Operations), indicating the central role digital transformation plays in the FBRâ€™s broader operational framework. Additional adjustments include the Director General (Revenue Analysis) now reporting to the Member (IR-Policy) and the Director General, Internal Audit (IR) reporting to the Member (Organizational Audit). These changes are aimed at improving reporting lines and fostering a more cohesive internal structure. Furthermore, the functions and powers previously held by the Member (Information Technology) and Member (Digital Initiatives) will now be consolidated under the authority of the Member (IR-Operations). This move is part of the FBRâ€™s broader objective to streamline decision-making and improve operational efficiency. These structural changes are part of the FBRâ€™s ongoing efforts to modernize its systems, enhance governance, and improve service delivery for taxpayers across Pakistan. The re-designations will remain in effect until further orders, as the FBR continues to adapt to the evolving needs of the economy and its stakeholders.

Date: 2024-10-02

Details: Karachi, October 2, 2024 â€“ The Federal Board of Revenue (FBR) has issued a comprehensive clarification regarding the application of minimum tax under the Income Tax Ordinance, 2001, for the tax year 2024-25. This elucidation aims to provide taxpayers with a clearer understanding of their obligations and the underlying principles governing minimum taxation, particularly in light of the evolving economic landscape. The FBR has stated that the minimum tax framework is codified under Section 113 of the Income Tax Ordinance, 2001. This provision is pivotal for ensuring that certain taxpayers contribute a baseline level of tax, even in instances where they might otherwise report losses or benefit from various exemptions and deductions. Under Section 113, the minimum tax applies to a diverse group of entities, including resident companies, permanent establishments of non-resident companies, individuals, and associations of persons. Specifically, it pertains to those with a turnover exceeding one hundred million rupees in the tax year 2017 or any subsequent year. The section delineates scenarios where tax may be minimal or nonexistent due to a range of factors, such as operational losses, the offsetting of prior year losses, exemptions, and the utilization of credits or deductions. To elaborate, the FBR has outlined that if a taxpayer finds themselves in a position where they owe no tax or their tax liability is below the stipulated minimum, the entirety of their turnover will be deemed as taxable income for that year. This provision is crucial in ensuring that all businesses contribute equitably to the national revenue, regardless of their immediate financial performance. Moreover, the tax authority emphasizes that the concept of â€œturnoverâ€ encompasses a broad spectrum of income streams. It includes gross sales, receipts from services, contract executions, and even the companyâ€™s share of income from partnerships, while expressly excluding amounts classified as deemed income already subjected to final tax assessments. The FBR has further stipulated that for taxpayers to ascertain their minimum tax liability, they must compute their tax based on the rates specified in Division IX of Part I of the First Schedule. In instances where the minimum tax calculated surpasses the actual tax owed under the aforementioned provisions, the surplus amount can be carried forward to offset future tax liabilities. This carryforward mechanism allows for financial relief and encourages compliance among taxpayers, as it provides a safety net for those facing temporary economic challenges. The FBR has also clarified that if a taxpayer pays the minimum tax due to having no tax liability for the year, the entire amount paid can be carried forward for a maximum of three subsequent tax years. This flexibility is particularly beneficial for startups and businesses navigating the uncertainties of market conditions. Additionally, it is essential to note that the tax authority has taken care to define â€œturnoverâ€ clearly, encompassing not only gross sales and service fees but also gross receipts from contract work. This clarity ensures that businesses are adequately informed about what constitutes their taxable income, preventing ambiguities that could lead to compliance issues. The FBRâ€™s articulation of the minimum tax application underscores its commitment to enhancing the tax compliance landscape in Pakistan. By establishing a clear framework, the tax authority aims to foster a culture of transparency and responsibility among taxpayers, thereby augmenting national revenue and contributing to the countryâ€™s fiscal health. As businesses prepare for the tax year 2024-25, they are encouraged to familiarize themselves with the nuances of the minimum tax provisions and consult with tax professionals to ensure compliance. The FBR remains dedicated to providing guidance and support to facilitate a smooth transition into the new tax regime, ultimately benefiting both taxpayers and the broader economy. In conclusion, the FBRâ€™s comprehensive overview of minimum tax application highlights its vital role in ensuring equitable taxation across the board. As the economic climate evolves, this proactive approach will help maintain the integrity of Pakistanâ€™s tax system and bolster public trust in governmental fiscal policies.

Date: 2024-10-01

Details: KARACHI: High tax rates coupled and spiraling costs have compelled major listed corporations in Pakistan to reduce headcount in the last couple of years while Islamabad kept hopping from one International Monetary Fund (IMF) bailout to another. Engro Corp, a major conglomerate in Pakistan with a market cap of over $580 million, has cut jobs across its trading, logistics, and pesticides businesses as well as some of its functional departments, while Amreli Steels said it was temporarily shutting down operations at its Karachiâ€™s SITE rolling mill. Engro Corp did not respond to a request for comment, but multiple sources indicated that the company severed ties with over a 100 employees across multiple business lines. Thank you and congratulations, Pakistan Similarly, Amreli Steels reduced its production capacity by 30%, but an official â€“ not authorised to speak to the media on the matter â€“ indicated that over 300 staff members were let go across its divisions. Several posts on LinkedIn also conveyed that several layoffs occurred even before the company announced a loss of Rs6.1 billion amid a drop in sales and high expenses during the year that ended June 30, 2024. In July, Aruj Industries Limited, a Pakistani fabric manufacturer and exporter, announced that it will temporarily halt production activities, a few days after another Karachi-based textile unit â€” Naz Textiles (Private) Ltd â€” said it was shutting down its doors. Last week, Indus Motor Company also conveyed it was shutting its plant for five days citing low inventory and a shortage of components. Its CEO, however, maintained there have been no layoffs. These announcements â€“ some of them made publicly with the PSX â€“ highlight the issues facing Pakistanâ€™s economy that announced its GDP grew by 3.07% in the April-June quarter of 2023-24. However, the growth has come largely on the back of agriculture as industrial activity contracted 3.59% during the three-month period, a statement by the National Accounts Committee showed. This was the sectorâ€™s third contraction on a quarterly basis during the fiscal year. During a consultative meeting on the Federal Board of Revenueâ€™s (FBR) planned transformation plan last week, chairman Rashid Mahmood Langrial admitted that high taxation was discouraging enterprises from staying in Pakistan and elevated rates were pushing the countryâ€™s skilled individuals to leave the country. Pakistanâ€™s budget for fiscal year 2024-25 has also been criticised for raising tax rates on formal sectors of the economy, including the easy-to-target salaried individuals, and several protests have taken place to highlight their concerns. In a press conference on Sunday, Finance Minister Muhammad Aurangzeb acknowledged the high tax rates, but fell short of divulging concrete measures that would be taken. The governmentâ€™s plan to tax traders has faced stiff resistance, and tax and duty exemptions for former Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA) were also extended. Despite high rates, the FBR is also likely to face a revenue shortfall of over Rs100 billion during the first quarter (July-September) 2024-25, stoking fears that a â€˜mini-budgetâ€™ may be on the cards. Analysts say with Pakistan enrolled in another bailout, progress on tax collection, power sector reforms, and privatisation is going to be keenly followed. Copyright Business Recorder, 2024

Date: 2024-10-01

Details: Islamabad, October 1, 2024 â€“ In a significant move, the Federal Board of Revenue (FBR) has granted a 14-day extension for the filing of income tax returns for the tax year 2024, providing relief to millions of taxpayers. The announcement, made at the stroke of midnight on September 30, 2024, came after mounting pressure from various trade associations, tax bar councils, and the general public. The FBR issued Circular No. 02 of 2024-25 IR-Operations (Income Tax) to officially confirm the extension. According to the circular, the deadline for filing income tax returns, originally set for September 30, 2024, has now been extended to October 14, 2024. This decision grants individuals and entities a crucial two-week window to complete their tax filings. In the official statement, the FBR acknowledged that the extension was granted in response to numerous requests from professional bodies and trade organizations across the country. The FBR had initially refused to extend the deadline, sparking frustration among taxpayers and tax practitioners, many of whom were struggling with technical glitches on the FBRâ€™s online filing system. Just hours before the extension, the FBR had issued a stern refusal, dismissing media reports about any potential delay in the deadline. The sudden shift in the FBRâ€™s stance underscores the pressure it faced from key stakeholders, who argued that the technical issues and time constraints were preventing taxpayers from meeting the original deadline. â€œThe extension is a much-needed relief,â€ said a senior tax consultant in Islamabad. â€œMany taxpayers were experiencing difficulties with the FBRâ€™s e-filing system, and this extension will allow them to comply with their tax obligations without facing penalties.â€ The decision has been broadly welcomed by trade and business communities, as well as individual taxpayers who had been anxiously waiting for a reprieve. Several prominent tax bar associations had earlier raised concerns about the potential penalties taxpayers could face due to the short timeline and system glitches. The 14-day extension will allow taxpayers who missed the original deadline to file their returns without incurring penalties or facing legal repercussions. However, the FBR emphasized that this would be the final extension, urging all taxpayers to utilize this grace period and submit their returns promptly. As the new deadline approaches, taxpayers are encouraged to take advantage of this extension and avoid the last-minute rush to file, ensuring compliance with tax laws while avoiding potential fines and sanctions.

Date: 2024-10-01

Details: Islamabad, October 1, 2024 â€“ In a significant move to alleviate challenges faced by taxpayers, the Federal Tax Ombudsman (FTO) Dr. Asif Mahmood Jah on Tuesday launched a dedicated taxpayer facilitation desk at the FTO headquarters in collaboration with the Federal Board of Revenue (FBR). This initiative aims to streamline the tax return filing process and address hardships encountered by taxpayers, as the deadline for filing returns has been extended to October 14, 2024. The newly established facilitation desk is part of the FTOâ€™s ongoing efforts to enhance taxpayer support and ensure that individuals and businesses can meet their tax obligations with ease. According to an official news release, the desk will provide a range of services to help filers overcome common issues, such as password retrieval and technical difficulties on the FBRâ€™s tax return portal. Dr. Asif Mahmood Jah emphasized the importance of this initiative, stating, â€œOur primary objective is to make the tax filing process more accessible and convenient for all taxpayers. By offering direct assistance at the FTO Secretariat, we are ensuring that taxpayers can resolve their issues promptly and meet their deadlines without unnecessary stress.â€ The facilitation desk will be staffed by trained FBR officials who are well-versed in handling tax-related matters and are equipped to offer hands-on support to those struggling with filing their returns. The FBR personnel will provide personalized guidance to ensure taxpayers can successfully navigate the online filing system, rectify errors, and retrieve passwords if necessary. It is important to note that assistance will only be provided in person at the FTO Secretariat in Islamabad. No inquiries will be addressed via phone calls or other remote means, underscoring the need for taxpayers to visit the desk directly for any filing-related issues. The FTO has urged all taxpayers experiencing difficulties with their returns to avail themselves of this opportunity, assuring them that their concerns will be promptly addressed. This proactive approach reflects the FTO Secretariatâ€™s commitment to providing comprehensive facilitation services and reinforcing taxpayer confidence in the system. â€œThe FTO remains dedicated to resolving tax-related issues and providing relief to taxpayers,â€ the statement further read. â€œWe encourage all those facing challenges with their tax returns to visit the facilitation desk and ensure their compliance before the extended deadline.â€ With the tax return filing deadline fast approaching, the FTOâ€™s initiative is expected to play a crucial role in easing the tax burden on citizens and contributing to a more efficient and user-friendly tax filing process across the country.

Date: 2024-10-01

Details: Karachi, October 1, 2024 â€“ The Federal Board of Revenue (FBR) has extended its tax treatment regulations concerning unexplained income and assets for the fiscal year 2024-25, under Section 111 of the Income Tax Ordinance, 2001. This section outlines how the government will tax any income or assets that remain unexplained by individuals or entities, providing a comprehensive framework for the declaration and taxation of such assets. According to the FBR, Section 111 covers various scenarios where unexplained income or assets may arise. This includes any amount credited in a personâ€™s financial records, investments, ownership of money or valuable articles, incurring of expenses, or any concealed income. The section also addresses inaccuracies in declared income, including the suppression of production, sales, or receipts that are taxable in whole or in part. The FBR emphasizes that if a person fails to provide a satisfactory explanation regarding the origin of such income or assets, or if the explanation is deemed insufficient by the Commissioner, the amount in question will be included in the taxpayerâ€™s chargeable income. Specifically, the amount will fall under the â€œIncome from Other Sourcesâ€ category if not adequately explained, while suppressed income or sales will be categorized as â€œIncome from Business.â€ Key Provisions of Section 111 1. Unexplained Income: If a taxpayer cannot explain the source of any amount credited to their accounts, the value of investments, or funds used for expenditures, these will be included in their taxable income under the head of â€œIncome from Other Sources.â€ 2. Suppressed Production or Sales: If the taxpayer suppresses production, sales, or any amount chargeable to tax, the unreported income will be included under â€œIncome from Business.â€ 3. Agricultural Income: The FBR provides an exception for agricultural income. If a taxpayer explains the source of unexplained assets or expenditures by way of agricultural income, such explanations will be accepted to the extent that agricultural tax has been paid under relevant provincial laws. 4. Foreign Assets and Income: Unexplained income from foreign sources is also covered under Section 111. If a taxpayer has foreign assets or concealed foreign-source income, it will be taxed in the year the Commissioner discovers it, even if the income or assets were acquired in a previous tax year. This ensures that foreign income cannot escape taxation merely because it was acquired before the tax year in which it was discovered. 5. Year of Discovery: The â€œyear of discoveryâ€ of foreign assets or concealed income is defined as the year in which the Commissioner issues a notice requiring the taxpayer to explain the nature and source of those foreign assets. Taxation of Unexplained Investments The FBR further clarified that if the declared cost of any investment, valuable article, or expenditure is less than the reasonable market value, the Commissioner has the authority to include the difference in the taxpayerâ€™s taxable income under â€œIncome from Other Sources.â€ This regulation ensures that individuals or businesses cannot undervalue assets to avoid higher taxes. Exemptions and Clarifications Foreign exchange remittances up to Rs. 5 million that are brought into Pakistan through formal banking channels will not be subject to taxation under Section 111. Remittances received through money transfer services or exchange companies are also considered legitimate foreign exchange transactions. Furthermore, the FBR has stipulated that taxpayers who rely on final tax sources to explain any amounts must furnish audited financial statements to justify any excess income that may be attributable to business activities. This prevents misuse of final tax provisions as a cover for undeclared income. Compliance and Reporting To ensure robust compliance, the FBR has stated that a separate notice is not required for cases falling under Section 111 if the taxpayer has already been confronted through a notice issued under Section 122(9) of the Income Tax Ordinance, which pertains to amendments in assessments. The FBRâ€™s continued enforcement of Section 111 highlights its focus on cracking down on undeclared wealth and hidden assets, both domestically and internationally. Taxpayers are urged to maintain transparent financial records and provide satisfactory explanations for any unexplained income or assets to avoid penalties and additional taxes. This extension of the tax treatment for the 2024-25 fiscal year demonstrates the FBRâ€™s commitment to ensuring that all income, whether local or foreign, is adequately accounted for and taxed according to the law.

Date: 2024-10-01

Details: Islamabad, October 1, 2024 â€“ In a mixed financial performance for the start of the fiscal year, the Federal Board of Revenue (FBR) managed to surpass its revenue collection target for September 2024, but fell short of the ambitious tax collection target for the first quarter (July-September) of the fiscal year 2024-25. This outcome highlights the ongoing challenges in tax mobilization, despite various revenue-generating measures introduced earlier this year. According to official figures, the FBR collected net revenue of Rs 996 billion in September, exceeding the target of Rs 985 billion set for the month. This achievement signals that the revenue authority is capable of mobilizing substantial resources, at least in the short term. However, this success could not offset the revenue shortfall faced during the entire first quarter, where the FBR fell Rs 87 billion short of its Rs 2,539 billion target. The total collection for the quarter was Rs 2,452 billion, a gap that raises concerns about the countryâ€™s broader fiscal health and the governmentâ€™s ability to meet its full-year objectives. The revenue shortfall is notable, particularly in light of the extensive revenue measures introduced in the federal budget for 2024-25. These measures were expected to generate Rs 1,800 billion over the fiscal year, underscoring the FBRâ€™s ongoing struggle to fully capitalize on the projected windfall. The performance for the first quarter is troubling because it exacerbates pressure on the government to meet the annual tax collection target of Rs 12,915 billion for the current fiscal year. Given the magnitude of this target, the FBR may face even tougher hurdles in the upcoming quarters, requiring enhanced measures to bridge the gap between actual collections and expectations. Additionally, the FBR has ramped up its efforts to broaden the tax base by increasing the number of registered taxpayers. The tax body received 3.6 million income tax returns for the tax year 2024, a notable jump from the 1.9 million returns filed during the same period last year. However, of these 3.6 million returns, 1.3 million came from nil-filersâ€”individuals or entities that declared no taxable income. This growing trend of nil-filing, paired with the high number of non-filers, underscores a structural challenge in expanding the tax base. In response, the FBR is reportedly preparing to introduce a set of enforcement measures targeting non-filers and nil-filers. Sources indicate that the government is expected to issue an Ordinance aimed at tightening compliance and bringing non-filers under the tax net. This could also include the abolition of the non-filer category altogether and the restructuring of non-registered business entities. The overarching goal is to incentivize compliance and boost revenues in the remaining three quarters of the fiscal year. Prime Minister Shehbaz Sharif recently gave the green light to the FBRâ€™s transformation plan, which includes these enforcement measures. If implemented effectively, these steps could help the government achieve its fiscal targets for the year, despite the current shortfall. The FBRâ€™s advance tax collection drive, especially in sectors such as banking and the corporate sector, is also expected to play a crucial role in mitigating the shortfall. However, the FBRâ€™s performance in the first quarter does little to alleviate broader concerns about Pakistanâ€™s ability to navigate its complex fiscal challenges. The shortfall from the initial two months of the fiscal year, where tax collection stood at Rs 1,456 billionâ€”Rs 98 billion short of the Rs 1,554 billion targetâ€”underscores the difficulty of the task ahead. As the fiscal year progresses, the FBR will need to ramp up its efforts to close these gaps and ensure that revenue collections align with projections. Without significant improvements, the governmentâ€™s broader economic agenda may be jeopardized, threatening critical development projects and public services that depend heavily on robust revenue streams.

Date: 2024-09-30

Details: Karachi, September 30, 2024 â€“ The Federal Board of Revenue (FBR) has introduced new guidelines for transactions between associates under the Income Tax Ordinance, 2001. These rules aim to clarify and regulate how income, deductions, and tax credits should be managed between related parties. The guidelines come under Section 108 of the Income Tax Ordinance, which explains how transactions between associates should be handled. According to Section 108, the FBR said that the Commissioner of Inland Revenue has the power to adjust income and expenses between related parties, ensuring that the amounts reflect what they would have been if the transaction had been made at an â€œarmâ€™s length.â€ An armâ€™s length transaction is one where both parties act independently and in their own best interests. The FBR further explained that the Commissioner can determine the source and type of income, whether it is revenue, capital, or otherwise, as part of the adjustments. One important aspect of the new guidelines is the requirement for taxpayers involved in transactions with associates to maintain specific documentation. These include: 1. A master file and a local file that contains important documents and information about the transaction. 2. A country-by-country report, if applicable, which gives details about the operations of the associated entities across different countries. 3. Other relevant documents and information about the transaction. Taxpayers are required to keep these files for a certain period as prescribed by the FBR. If the Commissioner requests these documents during an investigation, the taxpayer must provide them within 30 days. However, the Commissioner can extend this deadline by up to 45 days in special cases. Moreover, from the tax year 2024 onward, if a taxpayer claims a deduction for royalty payments to an associate for the use of intellectual property like brand names, logos, patents, or trademarks, they must provide proof that the transaction benefited the associate. If they fail to do so, 25% of their sales promotion, advertising, and publicity expenses will be disallowed. These guidelines are part of the FBRâ€™s effort to ensure transparency in tax matters and to prevent tax evasion through inappropriate transactions between related parties.

Date: 2024-09-30

Details: Islamabad, September 30, 2024 â€“ In a move that has disappointed millions of taxpayers across the country, the Federal Board of Revenue (FBR) on Monday confirmed that it will not be extending the deadline for the submission of income tax returns for the tax year 2024. The decision, announced just hours before the midnight deadline, left many taxpayers scrambling to complete their filings. Contrary to widespread media speculation about a possible extension, the FBR issued an unequivocal statement, declaring that no such relief would be granted. â€œThere will be no extension in the deadline for filing income tax returns for the financial year 2024,â€ the FBR clarified, adding that reports suggesting otherwise were entirely baseless. The announcement came as a final directive to taxpayers, urging them to comply with the existing deadline to avoid penalties. With the clock ticking, the FBR called on all individuals and businesses who had yet to file their returns to do so without further delay. The tax authority reminded taxpayers of the legal ramifications of failing to meet the deadline, which includes potential fines, penalties, and other legal consequences. â€œWe urge all taxpayers to submit their income tax returns immediately to avoid legal action,â€ the FBRâ€™s statement warned, underscoring the seriousness of the situation. Despite the FBRâ€™s firm stance, many taxpayers and tax professionals continued to hope for a last-minute extension, citing various technical challenges faced during the online filing process. Numerous complaints have surfaced about system glitches on the FBRâ€™s electronic portal, which many claim has caused significant delays in completing the filing process. Tax practitioners have voiced frustration, arguing that the systemâ€™s technical issues should warrant an extension to ensure fairness for all filers. â€œThe online system has been inconsistent, causing interruptions in filing returns. Many taxpayers have been unable to submit their returns due to these system failures,â€ said a leading tax consultant. Calls for an extension have grown louder, with many taxpayers expressing concern over potential penalties if they are unable to meet the deadline due to no fault of their own. However, the FBR remained unmoved, reiterating that the deadline is final. Taxpayers are now left with the daunting task of resolving their filing issues before the midnight cut-off, as any failure to comply will result in strict legal enforcement. As the deadline approaches, taxpayers await to see whether the FBR will reconsider its decision in response to the growing calls for leniency. However, with the official stance unchanged, the pressure is mounting for millions to file within the limited time frame available.

Date: 2024-09-30

Details: Islamabad, September 30, 2024 â€“ In a significant stride towards simplifying Pakistanâ€™s tax compliance regime, the Federal Board of Revenue (FBR) on Monday showcased the much-anticipated Single Sales Tax Return (SSTR) for three pivotal sectors of the economy. This initiative, aimed at streamlining tax collection and enhancing transparency, marks a major step in the FBRâ€™s ongoing efforts to modernize tax administration in the country. According to an official press statement, the Design, Development, and Implementation team of the FBR led a detailed demonstration session at its headquarters. The session, focused on the Oil and Gas sector, Exploration & Production (E&P) companies, and the Microfinance Banking sector, drew participation from a wide range of industry stakeholders. The move is being lauded as a forward-looking step towards unifying the tax return process, fostering better compliance, and reducing the complexity associated with sector-specific taxation. The session was attended by representatives from leading microfinance banks, including Mobilink Microfinance Bank, NRSP Microfinance Bank, U Microfinance, Telenor Microfinance, and Finca Microfinance Bank Ltd. Additionally, key players from the oil and gas industry, such as MOL Pakistan, Mari Petroleum, Government Holding Private Limited, Pakistan Oilfield Limited, Orient Petroleum Inc, Pakistan Exploration Pvt Limited, KUFPEC, Pakistan Petroleum Limited, and others, participated. Prominent tax management professionals from KPMG were also in attendance, reflecting the high level of interest and collaboration between the private sector and the FBR. FBRâ€™s technical experts from various wings, including PRAL (Pakistan Revenue Automation Ltd), the IT Wing, the Sales Tax & Federal Excise Policy, and the Pakistan Raises Revenue Program, conducted an in-depth technical session, elaborating on the functionalities of the SSTR. The demonstration was a key moment in the FBRâ€™s digital transformation journey, highlighting its commitment to reducing bureaucratic red tape and adopting technology-driven solutions. Following the success of the telecom sectorâ€™s implementation of the SSTR, the FBR is poised to expand this initiative to other sectors. Through extensive stakeholder consultations and close coordination with provincial tax authorities, the SSTR will soon become a hallmark of Pakistanâ€™s tax reform efforts. This harmonized approach is expected to enhance efficiency, reduce duplication of efforts, and offer a more seamless experience for businesses across sectors. As the FBR continues to innovate and evolve, the introduction of the Single Sales Tax Return for the Oil & Gas, E&P, and Microfinance sectors is being hailed as a crucial step towards aligning Pakistanâ€™s tax system with global best practices.

Date: 2024-09-30

Details: As the clock ticks down to the final hours of the income tax filing deadline, a critical question reverberates among Pakistanâ€™s taxpayers: Has the Federal Board of Revenue (FBR) extended the deadline for filing income tax returns for the tax year 2024? With the deadline expiring today, millions of taxpayers remain in limbo, awaiting clarity from the countryâ€™s apex tax authority. Sources within the FBR have hinted that an extension is possible, but no formal decision has been taken as yet. The pressing concern stems from the considerable strain on the system, leaving the tax authority under immense pressure to grant taxpayers additional time. With only one day remaining to submit returns, technical issues and system breakdowns have plagued the process, intensifying calls for an extension. Historically, the FBR has accommodated such demands by extending the deadline. In the previous year, the deadline for filing tax returns was extended by a full month, moving from September 30 to October 31, 2023. Many speculate that a similar reprieve could be in the works for this year, given the mounting complaints from both individual taxpayers and businesses alike. The primary source of contention this year has been the notorious dysfunctionality of the IRIS portalâ€”the governmentâ€™s e-filing platform. The system has been marred by frequent technical glitches, sluggish response times, and periodic crashes, leaving users unable to file their returns without encountering frustrating delays. These issues have raised alarms, particularly for taxpayers who are racing against the deadline, only to be stymied by the platformâ€™s inefficiencies. The Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the preeminent representative of Pakistanâ€™s business community, has taken a leading role in lobbying for an extension. Citing the â€œmultitude of technical bottlenecksâ€ and systemic inefficiencies, the FPCCI has formally urged the FBR to push the deadline back by 30 days. Atif Ikram Sheikh, the FPCCIâ€™s president, lamented the incapacity of the IRIS system to manage the increased traffic. He highlighted that the portalâ€™s instability and cumbersome interface particularly disadvantage small business owners and individuals who lack familiarity with digital tax filing procedures. â€œFor the common man, navigating the system has become a herculean task,â€ he remarked, emphasizing that without a deadline extension, many law-abiding citizens might inadvertently find themselves penalized. In solidarity with the business community, the Pakistan Tax Bar Association (PTBA) has also raised its voice, amplifying the call for leniency. PTBA President Anwar Kashif Mumtaz expressed deep concern over the near paralysis of the IRIS system, which he claims has rendered compliance virtually unattainable. In a formal appeal to FBR Chairman Rashid Mehmood, the PTBA urged for a one-month extension, citing the unprecedented technical obstacles that have plagued the current filing cycle. The association contends that penalizing taxpayers under these circumstances would be both unjust and counterproductive, as many of the delays stem from factors beyond their control. Despite the introduction of digital infrastructure like the IRIS portal, its poor performance in recent years has eroded confidence in Pakistanâ€™s e-filing system. The platform, once heralded as a step toward modernization, now faces criticism for its inability to handle the growing volume of returns, system shutdowns, and computational errors. Both the FPCCI and PTBA believe that, unless the government addresses these critical issues, even an extension might not suffice to restore taxpayer confidence in the system. As September 30 approaches its conclusion, the pressure on the FBR to extend the deadline intensifies. While no formal announcement has yet been made, the growing clamor for relief, supported by key business and professional organizations, strongly suggests that an extension is likely. However, unless substantial improvements are made to the IRIS system, taxpayers may continue to face difficulties, even with additional time.

Date: 2024-09-30

Details: Karachi, September 30, 2024 â€“ The National Clearing Company of Pakistan Limited (NCCPL) has announced that the collection of Capital Gain Tax (CGT) for the month of August 2024 will take place on October 8, 2024. This directive, issued to Clearing Members, the Pakistan Mercantile Exchange (PMEX), and Asset Management Companies (AMCs), underscores the importance of compliance with tax obligations within the designated timeframe. In an official notification, the NCCPL communicated that the aggregate amount of CGT, arising from the disposal of shares traded on the Pakistan Stock Exchange (PSX) between August 1 and August 31, 2024, will be collected on Tuesday, October 8, 2024. This tax will be collected through the respective settling banks of the Clearing Members. All Clearing Members have been urged to ensure that the requisite amount is available in their settling bank accounts. Detailed reports and data for the concerned period have already been made accessible through the CGT System. Furthermore, the NCCPL also confirmed that CGT arising from the trading of future commodity contracts at the Pakistan Mercantile Exchange during the same period will be collected on October 8, 2024. Necessary details and reports for these transactions have likewise been made available for review. In addition, the CGT pertaining to the redemption of units from open-end mutual funds for the period between August 1 and August 31, 2024, has also been finalized. Reports for this segment are similarly accessible through the CGT System. Clearing Members and the Pakistan Mercantile Exchange have been advised to verify investor-wise details of capital gains or losses, and the corresponding tax liabilities through the available reports and downloads. The NCCPL emphasized that non-compliance, including partial or non-collection of the CGT, will prompt appropriate actions as per the NCCPLâ€™s Rules and Regulations. This notification serves as a reminder to financial market participants to adhere to the tax collection process in a timely manner, ensuring smooth operations within Pakistanâ€™s financial infrastructure. With the enforcement of CGT regulations, authorities aim to promote transparency and fiscal discipline within the capital markets, crucial for the overall economic stability of the country.

Date: 2024-09-29

Details: Karachi, September 29, 2024 â€“ The Federal Board of Revenue (FBR) finds itself under mounting pressure to extend the deadline for filing income tax returns for the tax year 2024. With the September 30 deadline looming, only a single day remains for taxpayers to submit their returns, and complaints of system breakdowns and technical delays are pouring in from across the country. As the apex tax-collecting authority in Pakistan, the FBR is being inundated with requests from individuals and organizations alike, urging for an extension. Despite the persistent clamor, the board has yet to make an official decision on the matter. However, given the pattern in previous years, sources within the FBR suggest that an extension may be on the horizon. Last year, the FBR granted a one-month extension, pushing the deadline to October 31, 2023, and many believe a similar reprieve might be announced this time as well. One of the primary concerns fueling these extension demands is the ongoing dysfunction of the IRIS portalâ€”the primary platform for e-filing tax returns in Pakistan. Over the past few weeks, the portal has been riddled with technical glitches and frequent crashes, leaving users frustrated and unable to submit their returns in a timely manner. This breakdown in the system has caused significant disruptions for taxpayers and tax professionals, many of whom are scrambling to meet the deadline despite the platformâ€™s failures. The Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the countryâ€™s foremost business representative body, has thrown its weight behind the call for an extension. The FPCCI has formally requested the FBR to grant a 30-day extension, citing the numerous technical difficulties and system inefficiencies that have plagued the tax filing process this year. Atif Ikram Sheikh, President of the FPCCI, voiced his concerns over the situation, pointing out that the FBRâ€™s online filing system has struggled to cope with the sheer volume of submissions. â€œThe system is cumbersome for the common man, and it needs urgent improvements to address delays and downtimes,â€ Sheikh remarked. He also noted that the technical challenges faced by taxpayers, particularly small business owners and individuals unfamiliar with digital filing processes, are becoming untenable. The FPCCI believes that without an extension, many law-abiding taxpayers may find themselves penalized for circumstances beyond their control. Adding to the chorus of demands, the Pakistan Tax Bar Association (PTBA) has also petitioned the FBR, citing the near-complete paralysis of the IRIS system as the primary reason for the filing delays. PTBA President Anwar Kashif Mumtaz, in a letter to FBR Chairman Rashid Mehmood, urged the board to announce a one-month extension to alleviate the mounting pressure on taxpayers. He stressed that the technical failings of the IRIS portal have created a situation where compliance is virtually impossible, and extending the deadline is the only logical solution. The IRIS portal has long been the backbone of Pakistanâ€™s online tax filing system, but its performance in recent years has left much to be desired. According to the PTBA, the systemâ€™s frequent shutdowns, computational errors, and sluggish response times have rendered it ineffective at handling the increased volume of tax returns. As the clock ticks toward the September 30 deadline, the pressure on the FBR to act grows more intense. While the board has yet to announce any formal extension, the volume of complaints and the backing of key business and professional organizations suggest that an extension may be inevitable. However, unless significant improvements are made to the IRIS portal, even an extension may not be enough to restore confidence in Pakistanâ€™s e-filing system.

Date: 2024-09-29

Details: Karachi, September 29, 2024 â€“ The Federal Board of Revenue (FBR) has introduced new guidelines for the taxation of permanent establishments in Pakistan for the tax year 2024-25. These guidelines, extending the current regulations, govern the taxation of permanent establishments under Section 105 of the Income Tax Ordinance, 2001. A permanent establishment (PE) refers to a fixed place of business through which a non-resident person carries out business in Pakistan. The taxation of such establishments is crucial for ensuring fair tax practices and compliance. According to the FBR, Section 105 outlines the principles to determine the taxable income of a permanent establishment in Pakistan. The key points of these guidelines include the following: Independent Entity Concept The first principle laid out by the FBR is that a permanent establishment in Pakistan is treated as a distinct and separate entity. This means that even though the PE is part of a non-resident company, it is taxed as if it operates independently. Its profits are computed based on its activities in Pakistan, under the same or similar conditions as any local entity performing comparable functions. Allowable Deductions The FBR clarifies that deductions are allowed for expenses incurred by the PE for its business activities. This includes executive and administrative expenses, regardless of whether they are incurred in Pakistan or in another country. This provision ensures that PEs are only taxed on their net profits after considering legitimate business expenses. However, certain payments made by the PE to its head office or other branches are not eligible for deductions. These include: 1. Royalties, fees, or similar payments for using tangible or intangible assets. 2. Compensation for services, such as management services, performed by the head office for the PE. 3. Interest on debt, except for loans connected to banking businesses. This rule ensures that PEs do not artificially reduce their taxable income by transferring profits to their head offices or other branches through these types of payments. Internal Charges Similarly, when a PE charges its head office for services or assets, these amounts are not considered when calculating the PEâ€™s taxable income. This rule is designed to prevent manipulation of profits by inflating internal charges between a PE and its head office. Limit on Head Office Expenditures The FBR has set a limit on the amount of head office expenditure that can be deducted by a PE in Pakistan. This limit is proportional to the PEâ€™s turnover in Pakistan relative to the worldwide turnover of the non-resident company. The purpose of this rule is to ensure that head office expenses are allocated fairly and that PEs in Pakistan are not deducting an excessive share of their parent companyâ€™s costs. Exclusions from Deductions There are further restrictions on deductions for certain types of expenditures. For instance, no deduction is allowed for: 1. Interest on debt used to finance the operations of the PE. 2. Insurance premiums paid on such debt. This prevents PEs from claiming deductions for financing costs that are not directly related to their business operations in Pakistan. Definition of Head Office Expenditure The FBR also defines what qualifies as â€œhead office expenditureâ€ for the purposes of calculating deductions. These include general administration costs incurred outside Pakistan, such as rent, taxes (excluding foreign income tax), salaries for head office employees, travel expenses, and other prescribed costs. In conclusion, the FBRâ€™s updated guidelines ensure transparency and fairness in the taxation of permanent establishments. By treating PEs as independent entities and restricting certain deductions, the FBR aims to prevent tax avoidance and ensure that non-resident companies pay their fair share of taxes on profits earned in Pakistan. These guidelines are vital for strengthening the tax system and ensuring compliance by multinational corporations operating in the country.

Date: 2024-09-28

Details: Karachi, September 27, 2024 â€“ The Pakistan Tax Bar Association (PTBA) has urged the government to extend the deadline for filing income tax returns for the current fiscal year, offering a crucial opportunity for non-filers to comply and become active taxpayers. In a statement released on Friday, the PTBA lauded the governmentâ€™s recent decision to abolish the non-filer category but emphasized the need for an extension to facilitate this transition. With the September 30, 2024 deadline fast approaching, the PTBA has requested the authorities to extend the filing deadline to October 25, 2024. This extension, they argue, would provide non-filers a final opportunity to regularize their tax status and contribute to the nationâ€™s economic progress. â€œThis will offer them a last chance to become tax-compliant and support Pakistanâ€™s development,â€ the PTBA stated. The PTBA commended the government for its bold move to eliminate the non-filer category, describing it as a progressive step toward enhancing tax compliance and ensuring greater financial transparency. â€œThis initiative instills confidence in those who regularly file their taxes, while non-filers, who have previously bypassed their responsibilities, will now face the consequences of remaining outside the tax net,â€ the association remarked. The PTBA further highlighted that non-filers would no longer be able to purchase property or open bank accounts under the new regime, compelling them to fulfill their civic duties. Drawing comparisons with developed economies, the PTBA noted that the existence of a non-filer category is virtually unheard of in nations with robust financial systems. â€œAbolishing this category is a vital measure that will not only increase Pakistanâ€™s tax revenues but also enhance the overall tax infrastructure. This, in turn, will help alleviate the countryâ€™s reliance on external debt, providing long-term benefits for future generations,â€ the association emphasized. The PTBA stressed that the collected tax revenue should be judiciously allocated to vital sectors such as healthcare, education, and infrastructure. â€œTaxation is a form of public trust. It should be used to improve the lives of the people, thereby completing the tax cycle and restoring the publicâ€™s faith in the system. This will pave the way for economic relief from inflation and excessive taxation,â€ the PTBA argued. Moreover, the PTBA believes that these reforms will help bridge the socioeconomic gap between the elite and the impoverished, creating a more equitable society. â€œA strong, safe, and prosperous Pakistan can only be realized when privileges are extended to all citizens, ensuring that future generations inherit a nation of stability and opportunity,â€ the PTBA concluded.

Date: 2024-09-28

Details: September 28, 2024 Islamabad, September 27, 2024 â€“ The Federal Board of Revenue (FBR) has announced the formation of multiple working groups to develop and implement the FBRâ€™s ambitious Transformation Plan. This strategic move aims to bring together key stakeholders from various sectors to refine and finalize the proposals related to the modernization and digitalization of Pakistanâ€™s tax system. The FBRâ€™s Transformation Plan, which has received in-principle approval, is designed to overhaul the countryâ€™s tax infrastructure, streamline processes, and enhance operational efficiency through digital solutions. The working groups, each focusing on a specific work stream, will crystallize proposals through consultations with stakeholders and draft an implementation roadmap with clear timelines. The plan is aligned with Prime Ministerâ€™s vision of improving tax administration and broadening the tax base in the country. Key Work Streams and Responsibilities The working groups have been structured to address various key areas, or â€œwork streams,â€ of the Transformation Plan. Each group consists of high-ranking officials and experts, ensuring the involvement of relevant ministries and departments. Work Stream-I: PRAL and Digitalization This stream will focus on the transformation of Pakistan Revenue Automation Limited (PRAL), the FBRâ€™s digital arm. Additionally, the group will work on the digitalization of the value chain and internal systems, aiming to create a more efficient, technology-driven tax framework. The members of this group include the Secretary of IT, Tania Aidrus (a prominent figure in Pakistanâ€™s digitalization efforts), Asif Peer (a technology expert), and the CEO of Pakistan Single Window (PSW), along with the Chairman of FBR. Their collective expertise is expected to revolutionize the tax administration by incorporating advanced technologies to simplify and secure transactions. Work Stream-II: HR and Capacity Building The second work stream is dedicated to improving human resources and operational capacities within the FBR. The focus will be on enhancing the capabilities of tax officers and establishing a Model Tax Office to create a standardized, efficient, and transparent operational framework across all tax jurisdictions in Pakistan. Led by the Minister of the Establishment Division, this group will also include key figures such as the Chairman of FBR, Secretary of the Establishment Division, and Hamid Yaqoob Sheikh from the Finance Division. This team will play a crucial role in addressing capacity gaps and improving the overall performance of the organization. Work Stream-III: Anti-Smuggling and Customs Reform The third work stream is centered on combating smuggling and implementing reforms in customs procedures. It will oversee the implementation of Business Process Reengineering (BPR) and the introduction of new scanning and risk management systems to enhance the efficiency of customs operations. This stream will also focus on faceless and digital key mechanisms, which aim to reduce corruption and human involvement in customs processes. This group will be headed by the Minister for Economic Affairs, and its members include representatives from the Ministry of Interior, the Director General of Military Operations (DGMO), and key FBR officials. The introduction of these reforms is expected to curb illegal trade and improve revenue collection from customs. Work Stream-IV: Policy Changes Aimed at revising and updating tax policies, the fourth work stream will focus on legislative changes and policy adjustments. This group comprises notable members, including the Minister for Law and Justice, the Attorney General of Pakistan, the Governor of the State Bank of Pakistan, and representatives from the Pakistan Business Council and Pakistan Bankers Association. This stream will focus on making policy reforms that are aligned with the modern tax needs of the country, ensuring a fair and transparent tax system that supports economic growth and attracts foreign investment. Work Stream-V: Donor Programs The final work stream will coordinate with international donors to secure financial and technical assistance for the FBRâ€™s reforms. This group will work closely with donor agencies and multilateral institutions to align their programs with the FBRâ€™s reform agenda. Chaired by the Minister for Economic Affairs, this group will also include the Secretary of Economic Affairs Division (EAD) and key officials from the Finance Division and FBR. Their role will be critical in securing the necessary funding and ensuring that donor-backed programs are implemented effectively. Terms of Reference and Timeline The Terms of Reference (TORs) for the working groups include reviewing the operational plans for each intervention under the FBRâ€™s Transformation Plan, finalizing implementation modalities, and sequencing the proposed interventions for optimal results. The groups are also tasked with defining clear timelines and identifying any legislative changes or resources required to ensure smooth implementation. These working groups have been given a tight timeline to submit their final implementation plans for approval. They are expected to complete their deliberations within three days and present their recommendations to the Prime Minister. A Step Towards Modernization The FBRâ€™s Transformation Plan, backed by these working groups, is a significant step toward modernizing Pakistanâ€™s tax system. With a focus on digitalization, capacity building, anti-smuggling reforms, policy adjustments, and international collaboration, this initiative aims to create a more transparent, efficient, and robust tax infrastructure, contributing to economic growth and stability in Pakistan.

Date: 2024-09-27

Details: ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday announced a prize scheme for the customers of integrated Tier-1 retailers, who would report unverified invoices issued by big retailers. The FBR has notified the scheme for customers through issuance of SRO 1513(I)/2024 to amend the Sales Tax Rules, 2006. The total prize money and the denomination of the prizes for customers, who would report unverified invoices issued by integrated Tier-1 retailers, shall be decided by the Board. The revised procedure for prize scheme revealed that the customers of integrated Tier-1 retailers, who reports unverified invoices issued by Tier-l retailers, shall be entitled to prizes in respect of their purchases from the integrated Tier-1 retailers. In case of unverified invoice, the customer shall report the same through the application or WhatsApp number, as the case may be, providing the following details: Name of the customer; CNIC of the Customer; Mobile Number of the Customer; IBAN of the customer; proof of digital payment; picture of the unverified invoice and GPS Tagged picture of the business premises that has issued unverified invoice, the FBR said. Provided that if the proof of digital payment is not provided by the customer, the right to claim the prize shall stand forfeited, the FBR maintained. In case of unverified invoice, an alert shall be generated in the IRIS login of the Commissioner Inland Revenue and he shall authenticate the unverified invoice to establish the entitlement or otherwise of the customer for the prize. Provided that the Commissioner shall also take necessary action in terms of S No 24 in the Table of section 33 of the Sales Tax Act, the FBR said. In case the particulars, as provided by the customer are found incorrect or incomplete at any stage, the onus for delay in the disbursement of prize shall rest with the customer, the FBR added. Copyright Business Recorder, 2024

Date: 2024-09-27

Details: ISLAMABAD: The Federal Tax Ombudsman (FTO), while canceling an illegal auction of an imported vehicle, reprimanded the Collectorate of Customs Appraisement (West), Karachi, which miserably failed to protect the rights of citizens under the Constitution. In this regard, the FTO has directed the Federal Board of Revenue (FBR) to cancel an illegal auction of an imported vehicle by Customs Karachi and hand it over to the actual importer due to mal-administration committed by Customs officials of the Collectorate of Customs Appraisement (West), Karachi. The FTOâ€™s order revealed that Ministry of Commerce was issuing condonation letter to the importer, but relevant Customs officials, deliberately auctioned the vehicle in haste without realising the genuine hardship of the importer. According to the directive of the FTO to the FBR, the Collector, Collectorate of Customs Appraisement (West), Karachi would cancel the subject auction proceedings, recover the vehicle and hand it over to the complainant, in terms of the Ministry of Commerceâ€™s Import Authorization. Details of the case revealed that the complaint was filed against the Collectorate of Customs Appraisement (West), Karachi, under Section 10(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance) regarding cancellation of auction and recovery of vehicle. The complainant imported used vehicle was handed over to shipping line in last week of December in Japan but due to unforeseen technical reasons, the vesselâ€™s departure was delayed and arrived on Feb 15, 2024, which constitute minor deviation from condition as specified in para 3(2) of Appendix-E of Import Policy Order (IPO), 2016. The complainant applied for condonation from the Ministry of Commerce, which is in process and after calling for report from FBR will be presented in meeting chaired by Ministry of Commerce, to condone delay by exercising powers granted under para 20 of IPO, 2016. However, the customs department auctioned the vehicle without following pre-requisite procedure as specified in Customs Act, 1969 (Act) against very low price compared to its market value. The complainant prayed that the directions be issued to the department to cancel the auction and recover the vehicle.The FTO found that there was a minor deviation as per the conditions specified in para 3(2) of Appendix-E of Import Policy Order in vogue. The complainant had duly applied to the Ministry of Commerce for condonation of minor deviation, and where the matter was still under examination. It would be further important to note that this issue of condonation in the subject case was well in the notice of the department as the department in their comments have admitted that in case of three such other vehicles, the Ministry of Commerce had already communicated condonation to the department while the case of this vehicle was still pending for decision. Copyright Business Recorder, 2024

Date: 2024-09-27

Details: Karachi, September 27, 2024 â€“ The Federal Board of Revenue (FBR) has recently provided detailed guidelines regarding the imposition of Capital Gain Tax (CGT) on the disposal of assets located outside Pakistan during the tax year 2024-25. This move is part of the governmentâ€™s efforts to enhance transparency in taxation and ensure proper tax compliance, particularly when it comes to transactions involving non-resident entities. The FBR elaborated on the relevant legal provisions governing the disposal of assets by non-residents under Section 101A of the Income Tax Ordinance, 2001. This section outlines the tax treatment for capital gains arising from the disposal of assets outside Pakistan, particularly when the assets are located within the country or derive their value from Pakistani assets. Key Provisions of Section 101A According to the FBR, under Section 101A(1), any gain realized from the disposal or alienation of assets located in Pakistan by a non-resident company is considered Pakistan-source income. This means that even if the transaction takes place outside the country, if the assets in question are located in Pakistan or derive value from Pakistani assets, the gain is subject to taxation in Pakistan. The tax on such gains is charged at the rates and in the manner specified in Section 101A(10), which outlines a higher tax calculation mechanism to ensure compliance and revenue generation. Applicability to Non-Resident Companies Section 101A(3) stipulates that the tax also applies when a non-resident company disposes of shares or interest in another non-resident company, provided that these shares or interests derive their value primarily from assets located in Pakistan. The FBR further clarified that if the value of these Pakistani assets exceeds PKR 100 million and constitutes at least 50% of the non-resident companyâ€™s total assets, the disposal would be subject to CGT in Pakistan. Moreover, Section 101A(5) emphasizes that the fair market value of the assets will be determined as prescribed, without considering any liabilities, to ensure accurate taxation of capital gains. Tax Deduction and Advance Payment The FBR also highlighted the responsibilities of parties involved in such transactions. Under Section 101A(8), any person acquiring an asset from a non-resident company is required to deduct tax from the gross consideration paid. This tax deduction, set at 10% of the assetâ€™s fair market value, must be remitted to the Commissioner of the Federal Government within 15 days of the payment. Additionally, if the transaction involves a non-resident company holding assets through a resident company, Section 101A(9) requires the resident company to collect advance tax from the non-resident company. This tax must be collected within 30 days of the transaction and remitted accordingly. The FBR clarified that any tax already deducted by the acquiring party under Section 101A(8) would be credited toward this tax obligation, avoiding double taxation. Tax Rate Calculation For calculating the tax liability on the capital gain, Section 101A(10) provides two methods. The higher of the following will be used: 1. 20% of the difference between the fair market value and the cost of acquisition of the asset. 2. 10% of the assetâ€™s fair market value. This dual method ensures that both the assetâ€™s market value and acquisition cost are taken into consideration for fair taxation. Exemptions and Overlapping Provisions Finally, the FBR clarified that if tax is paid under Section 101A(8) or (9), no additional tax is required under Section 22(8) or Sections 37 and 37A of the Income Tax Ordinance. However, if the gain is taxable under other provisions of the Ordinance, Section 101A(12) provides that those provisions will take precedence. Conclusion The FBRâ€™s elaboration on CGT for the disposal of assets outside Pakistan is a critical step toward regulating international financial transactions involving Pakistani assets. By clearly defining the tax obligations of non-resident companies and those acquiring assets, the government aims to prevent tax evasion and boost revenue collection from cross-border transactions. This is expected to have a significant impact on non-resident companies and investors who hold assets with significant ties to Pakistan.

Date: 2024-09-27

Details: Karachi, September 27, 2024 â€“ As the Federal Board of Revenue (FBR) approaches the September 30 deadline for the filing of income tax returns for the fiscal year 2024, taxpayers and tax professionals across the country are increasingly voicing concerns over the feasibility of meeting this target. Despite the FBRâ€™s insistence on upholding the deadline, widespread appeals from business communities, tax associations, and individuals are fueling expectations of an extension. The FBR has repeatedly announced that the September 30 deadline for income tax submissions would not be extended. However, growing challenges faced by taxpayers, along with vociferous demands from the tax fraternity and business associations, suggest that an extension may be inevitable. Reports indicate that over six million returns have already been filed for the tax year 2023, with numbers continuing to climb. However, tax professionals warn that this success may not be replicable in 2024 without additional time. The Pakistan Tax Bar Association (PTBA), a prominent body representing tax professionals nationwide, has stressed the need for an extension, citing incomplete returns and ongoing preparatory work. According to the PTBA, only 40% of expected returns have been filed as of late September, with an additional 25% currently in progress and approximately 35% yet to begin the filing process. These figures highlight the logistical challenges faced by the tax fraternity in meeting the deadline. â€œAn extension is essential to ensure that taxpayers can file their returns accurately and in compliance with the law,â€ PTBA representatives urged. â€œWithout more time, many filers will face penalties or submit erroneous returns, which would be detrimental both to taxpayers and the tax administration.â€ The Karachi Chamber of Commerce and Industry (KCCI), the largest business body in Pakistan, has also called for an extension, proposing a new deadline of October 31, 2024. KCCI President Iftikhar Ahmed Sheikh has argued that the ongoing election activities in various chambers of commerce and trade bodies throughout the country have distracted business owners from finalizing their tax documentation. The chamber emphasized the undue burden this placed on taxpayers, many of whom are scrambling to meet the September 30 deadline. â€œA one-month extension would provide ample time for businesses to focus on their tax obligations without compromising their participation in the crucial electoral processes that shape Pakistanâ€™s commercial landscape,â€ Sheikh said in a statement. Meanwhile, the Rawalpindi-Islamabad Tax Bar Association (RITBA) has raised concerns about persistent technical issues within the FBRâ€™s online tax filing system, IRIS, further complicating the process for taxpayers. The association pointed to errors in the minimum tax computations and other discrepancies in the tax forms that have significantly delayed the return filing process. Moreover, RITBA noted that the sheer volume of tax filers has placed considerable strain on the IRIS system, leading to frequent system crashes, slowdowns, and delays. â€œThe technical glitches in IRIS are creating unnecessary obstacles for filers. With the system being overwhelmed by the increased number of tax filers, itâ€™s becoming almost impossible for many to submit accurate returns on time,â€ RITBA stated. The association also underscored the positive trend of an expanding tax base in recent years, with more individuals and businesses joining the formal economy. However, this growth has exposed the limitations of the existing infrastructure, necessitating urgent reforms to accommodate the larger number of filers. Despite these mounting calls for leniency, the FBR has yet to indicate whether it will reconsider its stance on the deadline. As the tax community waits for a potential announcement, the pressure continues to build on the FBR to address both technical challenges and the widespread demands for an extension. The decision, expected in the coming days, could have far-reaching implications for taxpayers and the governmentâ€™s ability to meet its revenue collection goals for the fiscal year.

Date: 2024-09-27

Details: Karachi, September 27, 2024 â€“ In a significant move aimed at promoting tax compliance and transparency, the Federal Board of Revenue (FBR) has made sweeping changes to the Point of Sale (POS) Prize Scheme, as announced through SRO 1513(I)/2024 issued on September 26, 2024. The revised scheme primarily targets customers reporting unverified invoices issued by Tier-1 retailers. This revision marks a departure from the previous mechanism, where customers of integrated Tier-1 retailers could participate in prize draws simply by making purchases from these retailers. The earlier system allowed customers whose names and CNICs (Computerized National Identity Cards) were selected through a computerized draw to claim prizes, irrespective of whether the invoices were verified or not. However, with these amendments, the FBR aims to heighten accountability by requiring customers to report unverified invoices for prize eligibility. Under the revised scheme, customers must now report unverified invoices through a designated WhatsApp number or via an application provided by the FBR. This modernization replaces the former SMS-based verification method, making the process more accessible and seamless for consumers. To ensure that customers provide accurate details, the FBR has outlined a comprehensive list of information that must accompany the report of an unverified invoice. This includes the customerâ€™s name, CNIC, mobile number, IBAN, proof of digital payment, and a GPS-tagged picture of the business premises where the unverified invoice was issued. The initiative signifies the FBRâ€™s efforts to ensure that retailers, especially those in the Tier-1 category, are fully compliant with tax regulations. By encouraging customers to report discrepancies, the FBR hopes to minimize the issuance of unverified invoices, which has been a loophole for tax evasion. Furthermore, this move aligns with the governmentâ€™s broader digitalization agenda, fostering transparency in the retail sector and empowering consumers to play a more active role in the tax collection process. The consequences of failing to meet the reporting requirements are clear. If a customer is unable to provide proof of digital payment, their right to claim a prize will be forfeited. Similarly, any inaccuracies in the information provided may result in delays in the disbursement of prizes, with the onus falling squarely on the customer. In cases of reported unverified invoices, the Commissioner of Inland Revenue will authenticate the information to determine the customerâ€™s eligibility for the prize. The Commissioner is also authorized to take further action under the provisions of Section 33 of the Sales Tax Act, adding another layer of scrutiny to ensure the integrity of the prize scheme. This strategic overhaul of the POS Prize Scheme underscores the FBRâ€™s commitment to fostering a tax-compliant environment and curbing tax evasion in the country.

Date: 2024-09-26

Details: ISLAMABAD: Experts have asked the Federal Board of Revenue (FBR) to provide another seven days for understanding SRO 1448(I)/2024 pertaining to the changes of the Active Taxpayers List Rules. In a communication to FBR on Wednesday, real estate analyst Muhammad Ahsan Malik said that the notification in the draft form pertains to changes made in the ATL rules which are going to affect common man and taxpayers but there is no explanatory note or Statement of its effect and intent given in the notification. Therefore this notification cannot be understood by the general public because it is just a list of deletions and additions in the existing rules but what is the impact of those additions and amendments has not been provided by FBR. It is therefore recommended that another seven daysâ€™ notice be provided for comments by the general public and FBR must publish a comparative statement of the intended changes and state how the proposed changes are going to affect the taxpayers and general public. This is very important because without it, this draft SRO is just a formality and the FBR is trying to hide behind technicalities and will amend the rules just to make legal compliance of publishing it for comments whereas the real effect will remain hidden from the eyes of the general public, he added. Under S.R.O. 1448(I)/2024, the FBR will also include name of a person in the Active Taxpayers List (ATL), who will files return for the latest tax year, by the due date or extended due date by the Commissioner or due date extended by the Board. As per FBR, a personâ€™s name shall be included in the ATL, if he files return of income tax for the latest tax year, by the due date specified in section 118 or by the due date as extended under section 119 by the Commissioner or by the due date as extended by the Board under section 214A. The FBR explained that the â€œlatest tax yearâ€ means the tax year last completed before the date on which return is filed and shall include the tax year previous to that year in case the due date or extended due date for filing of return for the last completed year has not expired. In case a person files his income tax return for the latest tax year, after the due date or extended due date as mentioned in sub rule (1), his name shall be included in the active taxpayerâ€™s list, if he pays surcharge as specified in proviso to clause (a) of sub-section (1) of section 182A of the Ordinance. The name of a company or an association of persons, whose return is not due to be filed because of incorporation or formation of such company or association of persons after the 30th day of June relevant to the latest tax year, shall be included in the active taxpayersâ€™ list, FBR added. Copyright Business Recorder, 2024

Date: 2024-09-26

Details: Finance Minister Muhammad Aurangzeb has said the government is going to abolish the category of non-filers from the tax laws to increase its revenue while reducing burden on existing filers. â€œItâ€™s about time to remove this category of non-filers,â€ the finance minister said in an interview to VOICE OF AMERICA on the sidelines of his visit to New York, USA. â€œPakistan is probably the only country in the world where there is this term of non-filers. Either you are a filer or you simply are not paying taxes,â€ he added. â€œThe government is going to abolish this category.â€ Non-filers must be brought into the tax net: PM The finance czar explained that the government â€œcannot turn the face other wayâ€ after taking a certain amount from non-filers. â€œThe government cannot afford this anymore,â€ he urged. The development comes after the Federal Board of Revenue (FBR) Chairman Rashid Mahmood was quoted as saying in multiple reports on Wednesday that the government had decided to abolish the category of non-filers. During the same day, FBR Member Inland Revenue (Policy) Dr Hamid Ateeq Sarwar informed the Senate Standing Committee on Finance that the prime minister had only approved enforcement measures against non-filers and restrictions on non-filers, nil-filers or filers, involved in massive under-declarations or mis-declarations in returns. The FBR member said the number of return filers for tax year 2023 reached 6 million and the government was expecting more returns after the exercise against non-filers of income tax returns. He disclosed that 2.5 million persons had filed zero-income returns. The computer system would not allow financial transactions of zero-income till they explained their source of income or earnings etc, according to Sarwar. In his interview, the finance minister also said restrictions would be imposed on those who do not pay taxes, making it difficult for them to undertake a number of activities He said the government has data about peopleâ€™s lifestyles, which includes information on how many cars people own, their foreign trips, and other expenses. Non-filers, tax evaders: Data sharing among key stakeholders under way: McKinsey The minister said based on the data, the FBR would bring non-taxpayers into the tax net without detaining them. â€œWhen I was a banker, people would come to me and say the parallel economy of Rs9 trillion cash in circulation is running the country. â€œHowever, the country needs to move forward with a documented economy and bringing the undocumented economy into the tax net will automatically double Pakistanâ€™s current economy of around $330 billion,â€ Aurangzeb said. He said additional burden placed on the salaried and manufacturing classes would be reduced, and retailers, wholesalers, agriculture sector, and property sector must be brought into the tax net. â€œThere will be transitional pain, but this is important to run the country in the right direction,â€ the finance minister emphasised. â€˜No delay in IMF bailout programmeâ€™ Answering a question, the finance minister said there was no delay in the International Monetary Fund (IMF) programme and completion of the 9-month Stand-By Arrangement (SBA) had brought the country in a good position to discuss a new programme with the IMF, which was followed by the signing of the staff-level agreement in July. However, Aurangzeb mentioned that the failure of implementing structural benchmarks such as increasing tax-to-GDP ratio, energy reforms, SOE reforms, and privatisation programme, which had been agreed with the IMF in the previous programmes caused a â€œdeficit of credibility and trustâ€. â€œThis time we are very determined that we are going through this reform agenda,â€ he said.

Date: 2024-09-26

Details: September 26, 2024 Islamabad, September 26, 2024 â€“ In a significant move aimed at simplifying the tax filing process and improving ease of business in Pakistan, the Federal Board of Revenue (FBR) has formed a new committee to oversee the design, development, and implementation of a single sales tax return (SSTR) system for all sectors. This initiative is part of the FBRâ€™s ongoing reforms to streamline tax procedures across multiple jurisdictions. According to a notification issued by the FBR on Thursday, the decision to establish the committee was made following directives from the FBR Chairman, who emphasized the need for a unified platform for sales tax returns to ease the compliance burden on businesses. The Single Portal will allow businesses operating in different sales tax jurisdictions to file their returns through a single, unified system. The new committee has been reconstituted to replace the one set up in October 2023, which was focused on developing an SSTR for the telecom sector. The FBR has already implemented the single portal for telecom, and the goal now is to extend the SSTR to all sectors by May 31, 2025. The committee, composed of both senior FBR officials and technical experts from Pakistan Revenue Automation Limited (PRAL), will lead the design and execution of this nationwide system. The SSTR initiative is part of the broader reforms under the Pakistan Raises Revenue Program (PRRP), which aims to modernize tax collection and make compliance easier for businesses. Committee Structure The newly reconstituted committee comprises two main teams: the Supervisory Team and the Implementation Team. Supervisory Team: 1. Ardsher Saleem Tariq (IRS/BS-21) â€“ Member (Reforms & Modernization), FBR 2. Aamer Amin Bhatti (IRS/BS-20) â€“ Chief (ST&FE) IR-Policy Wing, FBR Implementation Team: 1. Zain-ul-Abidin Sahi (IRS/BS-20) â€“ Chief (IT Systems), FBR, and Head of Implementation 2. Ms. Mahwish Khan (IRS/BS-18) â€“ Second Secretary, Business Process Reengineering, FBR 3. Fariduddin Khan (AOST/BS-18) â€“ Second Secretary, Withholding Tax (WHT), FBR 4. Faisal Sulaiman â€“ Senior Business Analyst, PRAL 5. Shahid Sharif â€“ Manager (Development), PRAL Coordination & Support: 1. Muhammad Khalid Jamil (IRS/BS-20) â€“ Director Program, PRRP, FBR 2. Ms. Sadia Akmal (IRS/BS-19) â€“ Additional Director, Coordination & Internal Communication, PRRP, FBR Responsibilities and Timeline The committee is tasked with ensuring that the Single Portal for filing sales tax returns is fully developed by December 2024, with implementation across all sectors and jurisdictions set for May 31, 2025. The Terms of Reference (TORs) for the committee are as follows: 1. Outreach â€“ The committee will engage with chambers of commerce and various trade bodies to inform and involve them in the development process. 2. Stakeholder Consultation â€“ The committee will hold consultations with all relevant stakeholders, including representatives of taxpayers, field formations of the FBR, and Provincial Revenue Administrations (PRAs) to ensure that concerns are addressed. 3. Supervision and Transition â€“ The committee will supervise software development, User Acceptance Testing (UAT) by PRAs and taxpayers, and manage the transition from the existing sales tax return system to the new SSTR for all sectors. The FBR noted that the committee has the authority to bring in additional resources from both the FBR and PRAL for consultation with various stakeholders and provincial authorities, as necessary. Objective: Simplifying Compliance The Single Sales Tax Return system is expected to significantly reduce the compliance burden on businesses by allowing them to file their sales tax returns through a single portal, irrespective of the sector or jurisdiction they operate in. This step is seen as critical to enhancing the ease of doing business in Pakistan and is part of the governmentâ€™s larger agenda to modernize and streamline tax administration. With a clear timeline set for the development and implementation phases, the FBR is aiming to make tax compliance smoother, ultimately contributing to a more business-friendly environment in the country.

Date: 2024-09-26

Details: Islamabad, September 26, 2024 â€“ The Federal Board of Revenue (FBR) has imposed a major penalty of dismissal from service on Muhammad Furquan Baig, Inspector-IR (BS-16), for inefficiency and misconduct. The disciplinary action was initiated after Baigâ€™s extended and unexplained absence from duty since January 1, 2024. According to a statement from the FBR, a charge sheet and statement of allegations were issued to Baig on February 27, 2024, under the Civil Servants (Efficiency & Discipline) Rules, 2020. Baig had reportedly failed to submit a leave application or secure prior approval from his superiors before being absent from his post at the Regional Tax Office (RTO) in Lahore. Despite multiple attempts by the FBR to reach out to him via explanation letters sent through WhatsApp and postal services, Baig did not respond and remained absent without any formal intimation. Further investigation revealed that Baig had left Pakistan on January 25, 2024, from Allama Iqbal International Airport in Lahore without informing the authorities or obtaining necessary clearance. His travel history was confirmed by the Federal Investigation Agency (FIA), and as of September 2024, he has not returned to Pakistan. The FBR appointed Zubair Khan, Additional Commissioner-IR, as the inquiry officer to look into the charges against Baig. The inquiry report, submitted on June 29, 2024, confirmed that Baig was guilty of the charges and recommended the imposition of the major penalty of dismissal from service under Rule 4(3)(e) of the Civil Servants (Efficiency & Discipline) Rules, 2020. Following the inquiry, a show-cause notice was issued to Baig on July 11, 2024. Despite being emailed the inquiry report and show-cause notice, as well as receiving the documents through postal services, Baig did not respond. The FBR even resorted to publishing a final show-cause notice in the â€œDawnâ€ newspaper on August 23, 2024, but there was still no reply. After reviewing the case records, inquiry report, and recommendations, the FBRâ€™s Member (Admn/HR) found Baig guilty of inefficiency and misconduct. Consequently, the major penalty of dismissal from service was imposed, in line with the applicable disciplinary rules. Baig has the right to appeal this decision within 30 days under the Civil Servants (Appeal) Rules, 1977, should he choose to challenge the penalty.

Date: 2024-09-26

Details: Islamabad, September 26, 2024 â€“ The Rawalpindi-Islamabad Tax Bar Association (RITBA) has raised concerns over technical issues in the Federal Board of Revenueâ€™s (FBR) online tax filing system, IRIS, and called for an extension of the income tax return filing deadline for the tax year 2024. In a letter addressed to Finance Minister Muhammad Aurangzeb, RITBA outlined various challenges taxpayers are facing and urged authorities to extend the filing deadline by at least one month, up to October 31, 2024. The RITBA pointed out that the income tax return form for the 2024 tax year was issued under SRO 947(I)/2024, and the electronic return form for traders and non-filers for the tax year 2023 was notified through SRO 1321(I)/2024 on August 28, 2024. This gave taxpayers, especially traders, only 32 days to complete their returnsâ€”a timeframe RITBA deems insufficient given the complexities involved. One of the significant challenges identified by RITBA is the consistent miscalculation in minimum tax computations within the IRIS portal, along with missing or incorrect columns in the form. These technical glitches have created major obstacles for taxpayers attempting to finalize and submit their returns. According to RITBA, these errors make it difficult for taxpayers to ensure the accuracy of their filings, causing delays and frustration. RITBA also highlighted that the number of tax filers has grown substantially in recent years, a positive development for the countryâ€™s tax base. However, this increase in filers has placed immense pressure on the IRIS system, leading to frequent slowdowns, system crashes, and lengthy delays. The current load on the system, coupled with technical issues, is preventing a large number of taxpayers from submitting their returns in a timely manner. Additionally, RITBA noted that the recent elections held by the Rawalpindi Chamber of Commerce and Industry (RCCI) further complicated matters. The elections, which involved the business community in the region, took up significant time and diverted attention away from tax return preparation, contributing to the delays in filing. The association also pointed to the broader economic challenges in the country, including the ongoing energy crisis and frequent load shedding, which have affected the ability of both taxpayers and tax practitioners to work efficiently. The process of preparing and submitting tax returns, already a time-intensive task, has been made even more difficult by these disruptions. Furthermore, RITBA reported that many taxpayers did not receive necessary deduction certificates from various government bodies, such as GEPCO, LESCO, PTCL, and mobile service providers, until mid-August, which further delayed the filing process. RITBA emphasized the importance of ensuring taxpayersâ€™ constitutional rights are respected, specifically the right to a fair and reasonable opportunity to comply with tax obligations. The association argued that extending the deadline for tax filing would allow taxpayers to meet their obligations without unnecessary penalties for late submissions due to factors beyond their control. â€œAs of today, the IRIS portal continues to generate incorrect calculations in key areas, particularly in relation to minimum tax liabilities,â€ RITBA stated, underscoring the need to resolve these technical issues before the current deadline. They urged the government to address these concerns and extend the filing deadline to avoid further inconvenience for taxpayers and ensure accurate tax reporting. RITBA concluded by requesting an extension of the tax return filing deadline for the 2024 tax year by at least one month, until October 31, 2024, to give taxpayers sufficient time to file their returns accurately and avoid unnecessary hardships.

Date: 2024-09-26

Details: Islamabad, September 26, 2024 â€“ The Federal Board of Revenue (FBR) announced on Thursday that it will initiate a nationwide awareness campaign to promote tax compliance before introducing strict penalties for tax evaders. The campaign is part of the governmentâ€™s broader efforts to improve Pakistanâ€™s tax compliance culture and ensure that all eligible taxpayers fulfill their legal obligations. Speaking to PTV News, FBR Spokesperson Bakhtiar Muhammad outlined the departmentâ€™s plans to conduct seminars, workshops, and media outreach programs aimed at educating the public on tax laws, filing procedures, and the benefits of timely tax compliance. The initiative will utilize multiple channels, including digital platforms, print and electronic media, to maximize its reach across the country. â€œWe are launching this campaign to educate people and businesses about their tax responsibilities,â€ said Bakhtiar. â€œOnce the awareness campaign concludes, the FBR will take a zero-tolerance approach to tax evasion, with strict penalties and legal actions awaiting those who fail to comply with tax regulations.â€ The campaign aims to make taxpayers aware of the importance of filing returns promptly and accurately. FBR officials hope that this educational drive will reduce the need for punitive measures, encouraging individuals and businesses to meet their tax obligations voluntarily. The FBRâ€™s initiative follows its recent success in improving taxpayer response last year, after it refused to extend the deadline for tax return filings. â€œThe decision to not extend the deadline for filing returns last year was met with an overwhelming response from taxpayers,â€ Bakhtiar noted, emphasizing the positive impact of strict adherence to deadlines on tax compliance. The FBR has reiterated that there will be no extension in the filing deadline this year as well. Taxpayers are being urged to file their returns by the September 30, 2024 deadline to avoid system delays that typically occur when many users try to access the online submission portal at the last minute. In addition to the campaign, the FBR is also working on strengthening its enforcement capabilities. Once the awareness phase is completed, those who fail to comply with tax regulations can expect severe consequences. â€œWe will not hesitate to impose penalties and initiate legal action against non-compliant individuals and businesses,â€ Bakhtiar warned. The FBRâ€™s efforts align with the governmentâ€™s broader objectives of boosting revenue collection and reducing the budget deficit, which is critical for Pakistanâ€™s economic stability. By encouraging voluntary compliance and preparing to take strict action against evaders, the FBR hopes to enhance the countryâ€™s tax base and support the national economy.

Date: 2024-09-26

Details: Karachi, September 26, 2024 â€” The Federal Board of Revenue (FBR) has released comprehensive guidelines regarding the taxation of income based on its geographical source within Pakistan for the 2024-25 tax year. These guidelines, derived from Section 101 of the Income Tax Ordinance, 2001, detail how different forms of income are classified and taxed based on their connection to Pakistan. Overview of Geographical Source Rules The FBR has emphasized that understanding the geographical source of income is essential to determining the taxation for both residents and non-residents engaged in economic activities within Pakistan. Section 101 of the Income Tax Ordinance defines the specific criteria for what constitutes Pakistan-source income. Key Provisions of Section 101 for Taxation 1. Income from Employment According to the FBR, salary is considered Pakistan-source income if: â€¢ It is received from employment exercised in Pakistan, regardless of where it is paid. â€¢ It is paid by the Federal, Provincial, or Local Government of Pakistan, regardless of where the employment is exercised. 2. Taxation of Business Income for Residents For residents, business income is treated as Pakistan-source income if it is derived from any business carried out within Pakistan. 3. Taxation Business Income for Non-Residents Non-residents are also subject to tax on their business income if it can be directly or indirectly attributed to Pakistan. This includes: â€¢ Income from a permanent establishment in Pakistan. â€¢ Sales of goods or services in Pakistan, even if similar products are sold through a permanent establishment. â€¢ Any business activities related to a business connection in Pakistan. â€¢ Importation of goods tied to supply chains, installation, or construction carried out by associates or permanent establishments. Significant Economic Presence The guidelines also expand the scope of taxation for non-residents by introducing the concept of â€œsignificant economic presence.â€ This concept applies to non-resident entities engaging in business activities through digital platforms. Transactions involving goods, services, or data downloaded in Pakistan, as well as systematic digital interactions with Pakistani users, are now considered taxable income under the geographical source rules. Specific Income Categories Several other categories of income have been clearly outlined by the FBR as Pakistan-source income under the Income Tax Ordinance: 1. Dividends Dividends are classified as Pakistan-source income if they are paid by a resident company. 2. Profit on Debt Any profit on debt is considered Pakistan-source income if paid by a resident person, with certain exceptions for businesses carried on outside Pakistan through a permanent establishment. 3. Royalties Royalties are deemed Pakistan-source income when paid by a resident person, unless the royalty pertains to business activities outside Pakistan through a permanent establishment. 4. Rental Income Income generated from the lease of immovable property located within Pakistan is treated as Pakistan-source income. 5. Gains from Asset Disposal Any gain from the disposal of assets or properties used to derive business income in Pakistan will also be considered Pakistan-source income. 6. Fees for Offshore Digital Services Fees paid for offshore digital services, including software downloads and other online services, are taxable as Pakistan-source income if paid by a resident or borne by a permanent establishment in Pakistan. Clarifications on Business Income The FBR has provided clarifications on the taxation of non-resident business income, including income derived from independent services like professional services, entertainment, or sports activities. If a non-resident individual is paid by a resident person or their services are borne by a permanent establishment in Pakistan, that income will be taxed as Pakistan-source income. Other Taxable Categories In addition to the main categories of income, the FBR has outlined the following as Pakistan-source income: â€¢ Pensions or annuities paid by residents or borne by permanent establishments. â€¢ Technical fees paid by residents for services utilized in Pakistan. â€¢ Any income not explicitly mentioned in the previous sections if it is paid by a resident or borne by a permanent establishment in Pakistan. Conclusion The FBRâ€™s guidelines on the taxation of geographical sources of income are a critical component of Pakistanâ€™s tax regime, particularly as the country expands its taxation scope to cover digital transactions and cross-border services. These rules ensure that income earned through significant economic activity in Pakistan, whether by residents or non-residents, is appropriately taxed, supporting the governmentâ€™s revenue collection efforts. Taxpayers and businesses are advised to familiarize themselves with these provisions to ensure compliance and avoid potential penalties during the 2024-25 tax year.

Date: 2024-09-26

Details: Karachi, September 26, 2024 â€“ The Federal Board of Revenue (FBR) is preparing to implement amended rules governing the inclusion of individuals and entities in the Active Taxpayers List (ATL). These amendments, which are now finalized, are expected to be formally introduced soon. According to official sources, the FBR issued notification SRO 1448(I)/2024 on September 18, 2024, proposing key changes to the Income Tax Rules, 2002, primarily focused on ATL-related criteria. Stakeholders were invited to submit their feedback within seven days, a period that has now passed. However, tax experts are calling for an extension of the comment period, arguing that the implications of the amended rules have not been adequately explained. â€œThe draft notification details deletions and additions to the existing ATL rules but lacks an explanatory note outlining the impact of these changes on taxpayers and the general public,â€ stated a tax analyst. The experts emphasized that without a comparative statement clearly explaining the changes and their effects, the public is left in the dark about how these amendments will influence tax obligations. â€œFBR should provide an additional seven days for public comments and issue a comprehensive breakdown of the proposed changes,â€ one expert recommended. They further criticized the FBR for using technicalities to rush through legal formalities without providing sufficient transparency on the real impact of the changes. Under the new rules introduced by SRO 1448(I)/2024, a personâ€™s name will be included in the ATL if they file their income tax return for the latest tax year by the due date or any extended due date. The FBR clarified that the â€œlatest tax yearâ€ refers to the most recent tax year for which returns are due, including the prior tax year if the filing deadline for that year has not yet passed. If a taxpayer files their return after the due date, they may still be included in the ATL by paying a surcharge, as specified in section 182A of the Income Tax Ordinance. For companies or associations of persons formed after June 30 relevant to the latest tax year, their inclusion in the ATL will be automatic, provided other criteria are met. The FBRâ€™s amendments aim to ensure greater compliance with tax regulations, but concerns remain about the clarity and accessibility of these changes. The tax authorities are under increasing pressure to ensure that these rules are well understood by both taxpayers and the public, as they could significantly affect those attempting to remain compliant with tax filing deadlines.

Date: 2024-09-26

Details: Islamabad, September 26, 2024 â€“ The Federal Board of Revenue (FBR) is preparing to implement strict enforcement actions against non-filers of income tax returns, following the approval of the prime minister. Dr. Hamid Ateeq Sarwar, FBR Member Inland Revenue (Policy), revealed these plans on Wednesday, affirming that the government has no intentions of introducing any new taxation measures or a mini-budget for the fiscal year 2024-25. Speaking to the Senate Standing Committee on Finance, Dr. Sarwar clarified that the governmentâ€™s immediate focus is on enforcing compliance from non-filers and tightening restrictions on individuals, including filers, who are involved in significant under-declaration or mis-declaration of their income in tax returns. The enforcement measures aim to improve transparency and increase the tax net without placing additional tax burdens on the general public. Dr. Sarwar also emphasized that the deadline for filing income tax returns would not be extended beyond September 30, 2024. As of now, six million individuals have filed their returns for the tax year 2023, a figure that is expected to rise due to the ongoing campaign targeting non-filers. Out of the six million returns filed, a staggering 2.5 million are zero-income returns, highlighting a significant number of individuals declaring no taxable income. In response, the FBR has set up a system to block financial transactions for those filing zero-income returns until they provide proper documentation explaining their sources of income. This move is expected to clamp down on tax evasion and encourage greater compliance. While addressing the media at the Parliament House, Dr. Sarwar also outlined the FBRâ€™s plan to meet its revenue collection target of Rs2,652 billion for the first quarter of the fiscal year 2024-25, which ends in September. The FBR is optimistic about collecting Rs50 billion alongside tax returns, with additional contributions from advance tax payments, primarily from corporate entities and banks. He also noted that gas companies are expected to contribute their due share of taxes within the current month. Additionally, the FBR aims to broaden the scope of its taxation by expanding the number of Tier-I retailers, adding standalone stores to the category. This effort is part of a broader strategy to bolster tax compliance and revenue generation across different sectors. The governmentâ€™s decision to focus on enforcement rather than introducing new taxes reflects its commitment to maintaining fiscal discipline while ensuring that all eligible individuals and businesses contribute their fair share to national revenue.

Date: 2024-09-25

Details: ISLAMABAD: Chairman Federal Board of Revenue (FBR) Rashid Mahmood Tuesday took into confidence leading business groups and tax compliant companies on FBR transformation plan, digitization and action against non-filers and limitations on non-compliant taxpayers and existing filers, involved in mis-declarations or under-declarations. In this regard, FBR Charmin gave a detailed presentation to leading business and trade groups at the FBR Headquarters on measures to convert the cash economy into the documented economy. The measures would also reduce the existing tax gap of Rs7.1 trillion. However, there was no discussion on agriculture tax or improving taxation from agriculture sector during this special meeting of the FBR. The FBR has invited businessmen from all main industries to a briefing on the planned FBR transformation plan. Ali Pervez, the State Minister for Finance and Revenue, attended the meeting with senior tax managers and FBR Members. FBR Chairman Rashid Mahmood Langrial and Member Inland Revenue (Policy) Dr. Hamid Ateeq Sarwar gave presentation to the business community. FBR Chairman said that FBR has no choice, but to end the menace of non-filling or nil-filing of returns. â€œNon-filer will not exist in our books or non-filers would be non-existent in future. There would be no concept of non-filers in futureâ€, he added. He categorically said that if the situation did not improve, it would be impossible for the government to collect taxes even with new tax measures. To increase tax-to-GDP ratio, drastic steps are being taken to reduce burden on existing taxpayers. On the smuggling side, Chairman FBR said that the FBR will setup special focal points to check smuggling of non-customs duty paid vehicles and other smuggling-prone items at provincial borders. All provincial points would be linked with the digital databases of excise and taxation. He said that the high tax rates would dissuade enterprises from staying in Pakistan, as has happened in the textile industry. He went on to say that high tax rates for the salaried class will force highly skilled individuals to leave Pakistan. The FBR would establish disincentives for non-compliant taxpayers, beginning with registration and tying the availability of facilities such as investments and the creation of bank accounts to the filing of tax returns. There will be no monetary transactions, and the source will have to be established via different digital interventions. The FBR chairman stated that non-filing is a fraud method that was established domestically. "We must do away with the concept of non-filers. There is agreement to eliminate this idea," the chairman stated, adding that the FBR will create extra facts to assess people's financial transactions. At the registrar's office, property transactions will be linked to two categories: eligible and ineligible. In 2023, non-filers paid out Rs20 billion in tax. Moreover, FBR got more than Rs423 billion under withholding taxes which was unclaimed by any persons. This is a grey area which need to be traced and identified such people. A presentation slide of FBR revealed Tiers of taxpayers based on the filed amounts, earning income more than Rs 10 million or income less than Rs 10 million etc. Based on these filed amounts, taxpayers would be able to purchase motor vehicles, purchase immovable properties or make investment in securities, mutual funds and money market instruments or operate bank account except Assan Account and also specified per person annual cash deposit/withdrawal limit (Rs 30 million per year). The reforms will include a cap on cash cheques issuance. The FBR will provide information to all banks based on people's declared incomes in tax returns and construct a specific limit; any crossing of that red line for financing transactions will be reported to FBR. This system will be in place in a few months. Tax authorities informed the business community that the existing situation has resulted in an Rs7.1 trillion tax gap in fiscal year 2004, which has become chronic and must be reduced. During the special meeting of business leaders at the FBR headquarters, FBR Chairman further said that the main difficulty for customs enforcement is smuggling, which has surpassed Rs750 billion in volumes. Smuggled petroleum goods alone account for Rs500 billion of this total smuggling in the country. A comparable cost arises from the pilferage of Afghan transit trade cargos in the domestic market. He said that the FBR is engaging in data mining and using artificial intelligence for broadening the tax base. Patron-in-Chief Khurram Mukhtar suggested that a comprehensive mapping of the manufacturing landscape across the country and all sectors should be conducted through both digital and desktop surveys. This process will enable us to gather sectoral data on capacities, output, and the nature of businesses, which is essential for informed decision-making and accurate assessment of tax potential. There is a need to distinguish between compliant and non-compliant taxpayers. Compliant taxpayers will get all benefits, and the compliance base will expand, resulting in rate decreases. The meeting was informed about the potential tax gap in 20 sectors. The biggest tax gap was reported about textile at Rs700 billion, followed by Rs100 billion in cement sector. However, the textile association representatives did not agree with the calculations of the FBR regarding tax gaps. One of the participants recommended to FBR the proper implementation of current legislation. However, many businesspeople attributed the majority of the suggested actions in the FBR reform plan to the government's political determination to lower the cash economy and tax gap. A textile representative has advised the FBR to adequately educate the public about the proposed measures. He stated that the FBR should not act hastily and that any changes should be adequately communicated to citizens. Copyright Business Recorder, 2024

Date: 2024-09-25

Details: ISLAMABAD: The delay in implementation of a key budgetary measure (2024-25) to exempt local scrap from sales tax has resulted in the practice of flying invoices, causing revenue loss of over Rs 5 billion per month. In a communication to Senator Saleem Mandviwalla, Chairman Senateâ€™s Standing Committee on Finance, Pakistan Association of Large Steel Producers have highlighted inordinate delays in resolving critical issues of steel industry resulting in huge revenue loss to the national kitty. Pakistan Association of Large Steel Producers (PALSP) is struggling and knocking every door for the resolution of the most critical issues of the steel industry. However, due to inordinate delays on the part of the concerned authorities, not only steel industry is bleeding but also the government is losing billions and billions in revenue. As a result of PALSPâ€™s struggle spread at over one year, the government took excellent decision through budgetary amendment and exempted the local scrap from levy of sale tax. The amendment was proposed by the steel sector to curb the menace of flying invoices in steel sector. The expected benefit of the said amendment for the national exchequer is to net an additional revenue of Rs 40 to Rs 50 billion annually. As a result of the inordinate delay in enforcement of this budgetary decision the practice of flying invoices is still not under control and government is losing nearly over 5 billion per month. The documented steel sector has also highlighted an enabling amendment made in Export Facilitation Scheme- (Draft Amendments SRO 1069 (I)/2024). As a result of associationâ€™s working/ struggle of 20 months with FBR the amendment in EFS rules to exclude value of wastage/iron and steel remeltable scrap from value of input goods for value addition purpose was issued by FBR vide SRO1069(I)/2024. However, it was disappointing that the draft or the proposed amendments were not in line with the protracted discussions held between steel industry and FBR/Customs authorities. The leading players of steel industry players have diversified into exports of copper to China and this segment has emerged as the 5th largest exporting sector in few years. Unfortunately, due to long delays in resolving this issue, exports of copper crashed last year from US$1,113 million in 2022-23 to US$713 million in 2023-24 (Massive 36% reduction in just one year). In case of better facilitation; fast pace resolution of irritants, exports of copper to China could be increased to several billion US$ in a short span of time. This is an opportunity for our country to boost exports of copper to China. If this situation continues due to indecision; delays on the part of FBR authorities, this will result in loss of a big exporting opportunity for the country which is badly in need of increasing exports. The steel industry has requested the committee to summon all relevant authorities/departments/ministries for the earliest resolution of the said issue. This will not only help the struggling steel industry but would also help in massive increase of our exports as well as in government revenues, it added. Copyright Business Recorder, 2024

Date: 2024-09-25

Details: ISLAMABAD: September 26, 2024 â€” To boost the export industry, the Federal Board of Revenue (FBR) has officially introduced a new, fast-tracked sales tax refund system for exporters, effective from October 1, 2024. According to a notification issued by the FBR, the updated â€œFASTERâ€ system will allow all categories of exporters to receive their sales tax refunds within 72 hours, providing much-needed liquidity to the sector. Previously, the FASTER system was limited to five leading export-oriented sectors, namely textiles, carpets, leather, sports goods, and surgical instruments. However, this restriction has now been lifted, enabling all exporters to benefit from this accelerated refund process. The decision marks a major step forward in facilitating the broader export community in Pakistan and enhancing the ease of doing business. The change was enacted through Statutory Regulatory Order (SRO) 1507 (I)/2024, which amends the Sales Tax Rules, 2006. Under the new regulations, exporters can now expect prompt payment of refunds for tax periods starting from July 2019 onward, and for all refund claims submitted from October 1, 2024. This broadening of scope will likely ease cash flow concerns for businesses across a range of industries by ensuring faster access to their due refunds. The new procedure extends to all types of exporters, encompassing both manufacturers and commercial exporters. A key feature of the update is that commercial exporters will need to provide an export proceeds realization certificate or bank credit advice to process their refund claims. While the FASTER system remains the primary channel for quick refunds, claims that do not meet the necessary criteria will be processed through the Sales Tax Automated Refund Repository (STARR) system. This dual mechanism is designed to ensure that all legitimate refund claims are processed efficiently, even if they are not eligible for the expedited FASTER channel. Another notable amendment involves the treatment of refunds for goods supplied at zero-rate. According to the FBR, the refund in such cases will be restricted to the input tax paid on purchases or imports that are actually consumed in the manufacturing of the goods. This move aims to streamline and clarify the refund process for zero-rated supplies, offering greater transparency and precision in the tax system. This expansion of the FASTER system to all exporters is expected to provide a significant boost to Pakistanâ€™s export sector, improving cash flow and enhancing competitiveness in international markets. The FBRâ€™s focus on improving tax refund processes reflects its commitment to supporting the countryâ€™s economic growth and bolstering its export potential.

Date: 2024-09-25

Details: Lahore, Pakistan â€“ September 25, 2024 â€“ The Lahore Tax Bar Association (LTBA) has formally appealed the government to extend the deadline for filing income tax returns for the tax year 2024. In a letter addressed to Prime Minister Shehbaz Sharif, the LTBA has requested that the current deadline of September 30, 2024, be pushed to October 31, 2024. The LTBA cites a number of technical and logistical challenges, including issues with the FBRâ€™s online tax system, IRIS, which have significantly hampered the tax filing process for individuals and Associations of Persons (AOPs). The LTBA, representing a significant portion of the tax-filing community, explained that it has been inundated with complaints from members about persistent technical difficulties with the FBRâ€™s IRIS system. The system, they claim, frequently becomes unresponsive, forcing users to restart the filing process, which leads to a loss of already entered data. Additionally, the systemâ€™s operation during weekends is limited, which further complicates the tax return filing for many. Furthermore, the LTBA outlined several other critical issues impacting the e-filing of returns. These include the inability to generate Payment Slip IDs (PSIDs) for income tax withheld, difficulty in retrieving data related to tax withholdings against National Tax Numbers (NTNs), and errors in tax calculations. A particular point of concern was section 114(1), under which data from wealth statements is not being imported correctly, with last yearâ€™s opening balances not carried forward accurately. The LTBA also highlighted the wider context that has exacerbated the challenges taxpayers are facing this year. The recent elections for the Lahore Chamber of Commerce and Industry (LCCI), held on September 23 and 24, 2024, have consumed much of the business communityâ€™s time and attention. As many LTBA members were involved in these elections, the disruption further delayed the processing of tax returns. Compounding these issues are widespread slow internet speeds, which have slowed down the filing process, especially in remote areas. Additionally, a viral infection causing sore throats and fever has been affecting the population, with recovery times taking six to eight days. This illness has further diminished the capacity of taxpayers to focus on meeting the September 30 filing deadline. In light of these challenges, the LTBA estimated that as of now, only 40% of tax returns are expected to be submitted by the deadline, with another 25% still in progress and 35% yet to be initiated. Given the significant number of taxpayers still struggling to file, the association warned that the remaining time is inadequate for many to complete their returns. Despite the fact that 90% of the tax demand has already been fulfilled through withholding and advance taxes, the association expressed concern that taxpayers may not be able to meet the final deadline without facing penalties or surcharges. The LTBA has, therefore, urged the Prime Minister to consider granting taxpayers, especially those on the Active Taxpayers List (ATL), relief from any penalties or default surcharges if they fail to meet the September 30 deadline. Citing previous instances where extensions were granted, the LTBA requested the government to extend the deadline to October 31, 2024, to provide taxpayers with ample time to fulfill their obligations. â€œThis extension would allow taxpayers to arrange their payments and file accurate declarations without the fear of incurring penalties,â€ the LTBA argued in its appeal. The association believes that this additional time would be instrumental in enabling taxpayers to comply with the regulations, particularly in light of the various technical and health-related hurdles they are currently facing. The government has yet to issue a formal response to the LTBAâ€™s request, but given the widespread impact of these challenges, it is anticipated that the appeal may be considered favorably, as was the case in previous years when similar requests were made.

Date: 2024-09-25

Details: Karachi, September 25, 2024 â€” The Federal Board of Revenue (FBR) has ramped up its efforts to ensure taxpayer compliance by sending out SMS reminders to registered mobile numbers, urging citizens to submit their annual income tax returns by the September 30, 2024, deadline. This initiative aims to promote timely tax filing and prevent the consequences of non-compliance, which include hefty penalties and service disruptions. In the SMS, the FBR emphasizes the importance of adhering to the legal obligation to file income tax returns on time, with a clear warning that the deadline will not be extended. â€œSubmit your annual income tax return by September 30, 2024. The deadline will not be extended,â€ the message reads, signaling the governmentâ€™s firm stance on maintaining the current timeline. In addition to SMS, the FBR has sent similar messages to taxpayers via their registered email addresses. These communications stress the potential consequences of failing to file tax returns, including the suspension of mobile phone services and the disconnection of essential utilities such as gas and electricity. The FBR is leveraging this multi-channel communication strategy to reach a broad spectrum of taxpayers, reminding them of their obligations and the penalties they could face for neglecting them. The warning further states that non-filers risk losing several key privileges. Individuals who fail to comply with tax filing requirements will not only face service disconnections but also be barred from international travel. The FBR has made it clear that these actions are part of a broader effort to enforce tax laws and bring more individuals into the tax net, a key goal in Pakistanâ€™s economic policy. Taxpayers who are required to file returns but fail to do so by the deadline will also be subject to financial penalties. Non-filing of returns may result in increased scrutiny from tax authorities and possible legal repercussions. The FBR has emphasized that timely compliance will not only prevent such penalties but also allow taxpayers to continue enjoying benefits such as access to essential utilities and mobile services. This move is part of the FBRâ€™s broader campaign to increase tax compliance and meet its revenue targets. By issuing these reminders, the FBR is attempting to reduce the number of last-minute filings and ensure a smoother return submission process. The authority has stressed the need for taxpayers to fulfill their obligations, warning that there will be no grace period for late submissions. With the deadline fast approaching, the FBRâ€™s campaign highlights the importance of compliance and the significant consequences that await those who fail to meet their tax obligations on time.

Date: 2024-09-25

Details: Islamabad, September 2024 â€” The Pakistan Tax Advisors Association (PTAA) has called upon the Federal Board of Revenue (FBR) to extend the deadline for filing income tax returns and wealth statements for the tax year 2024 from September 30 to November 30. In a formal letter addressed to the FBR Chairman, the association raised several critical concerns, emphasizing the pressing need for additional time due to ongoing challenges faced by taxpayers and tax practitioners alike. The tax advisors cited several underlying issues as justifications for the extension. One of the primary factors is the ongoing economic crisis and financial instability in the country, which has made it difficult for taxpayers to gather necessary resources for filing their returns on time. Coupled with this, the inefficiency and frequent malfunctions of the FBRâ€™s IRIS have exacerbated delays in return preparation and submission. In the letter, the tax advisors noted, â€œThe slow functioning of the IRIS system has become a persistent bottleneck, with many taxpayers and tax professionals struggling to access the platform effectively. Load shedding and electricity outages in different regions have only added to the difficulties.â€ They further stressed that these combined challenges, along with the heavy burden on tax practitioners, advocates, and chartered accountants, make it impossible to meet the current September 30 deadline. The association also pointed out that the sheer volume of tax returns required to be filed necessitates significant time for preparation. The complexities involved in completing and submitting tax returns, combined with the tax payment process through Computerized Payment Receipts (CPRNS) in banks, require more time than what the current deadline allows. â€œThe burden on tax practitioners is immense, as they are managing a high volume of returns for their clients under these challenging circumstances,â€ the PTAA added. Many members from across the country have reached out to the association, voicing their concerns and requesting the FBR to provide relief by extending the deadline. The tax advisors concluded their appeal by underscoring the importance of meeting the financial targets set by the FBR. They argued that an extension would not only alleviate the pressure on taxpayers and practitioners but also ensure compliance on a larger scale. â€œBy granting an extension to November 30, the FBR will facilitate both taxpayers and tax practitioners, enabling them to file returns without undue stress, while also securing the governmentâ€™s revenue goals.â€ It remains to be seen whether the FBR will respond to this request, but the PTAAâ€™s call has undoubtedly raised awareness of the critical need for flexibility in light of the current economic and operational constraints.

Date: 2024-09-25

Details: Karachi, September 25, 2024 â€“ The Pakistan Customs Appraisement (East) has issued an official classification of high-speed washers, declaring that these items will be subject to zero percent customs duty upon import. This ruling resolves a classification dispute and rejects a previous opinion from the Directorate of Intelligence and Investigation, Lahore, which had argued for a 20 percent customs duty on the import of â€œHigh-Pressure Washers.â€ The dispute began when the Directorate of Intelligence and Investigation, Lahore framed a case against an importer, claiming that high-pressure washers imported by M/s MA Tools & Equipment House (Pvt) Limited, Lahore, had been incorrectly cleared at zero percent duty. The Directorateâ€™s position was that the imported items should have been classified under a tariff heading that carried a 20 percent duty. The case centered on the classification of the imported item, which the importer had declared as a â€œPortable Sprayer (High-Pressure Washer)â€ under the Pakistan Customs Tariff (PCT) Code 8424.4100, a category for â€œAgricultural and Horticultural Sprayers.â€ The Directorate of Intelligence and Investigation contested this, claiming that the correct classification should be under PCT Code 8424.2090, which applies to high-pressure spray guns. In response, the importer argued that high-pressure washers are not agricultural or horticultural sprayers and should be classified differently. They proposed that the appropriate classification would be under PCT heading 8424.3000, which covers steam or sand blasting machines and similar jet-projection machines. After a thorough review, the Customs Classification Committee ruled in favor of the importer, affirming that high-pressure washers should not be classified under the heading for spray guns or agricultural sprayers. The committee highlighted that high-pressure washers are designed specifically for cleaning tasks, such as removing contaminants from vehicles, buildings, and other surfaces, using controlled streams of water. Their specialized design, which includes multiple attachments for various cleaning functions, sets them apart from standard spray guns. The committee also took into account international classification rulings on high-pressure washers, further supporting its decision. It concluded that classifying these machines under PCT heading 8424.2000, which includes spray guns and similar hand-held appliances, would be incorrect. Instead, high-pressure washers should be categorized according to their primary function as jet-projection machines. The ruling is a significant clarification for importers, as it ensures that high-speed washers will continue to benefit from zero percent customs duty, supporting businesses and consumers who rely on these products for industrial and commercial cleaning purposes. This decision underscores Pakistan Customsâ€™ commitment to ensuring fair and accurate classification of goods,

Date: 2024-09-25

Details: Karachi, September 25, 2024 â€“ The Federal Board of Revenue (FBR) has issued updated guidelines for individuals and entities who have either failed to file their annual income tax returns or submitted them after the due date. These new guidelines aim to clarify the rules governing such cases and emphasize the legal consequences for non-filers and late filers under Pakistanâ€™s tax laws. In its official statement, the FBR highlighted that these provisions pertain to the appearance of individuals on the Active Taxpayers List (ATL), which is a critical factor in determining tax liabilities and eligibility for certain benefits. The rules are governed by Section 100BA of the Income Tax Ordinance, 2001, which specifically addresses the treatment of non-filers and those who file returns late. Key Provisions Under Section 100BA: According to Section 100BA of the Income Tax Ordinance, 2001: 1. Advance Income Tax and Tax Computation: The collection or deduction of advance income tax, as well as the computation of taxable income and the tax payable, for persons not listed on the ATL, or for those who appear on the ATL but have not filed their returns by the specified deadline, will be governed by the rules laid out in the Tenth Schedule of the Income Tax Ordinance. 2. Tenth Schedule Overrides Conflicting Provisions: The FBR also made it clear that the provisions of the Tenth Schedule take precedence over any other sections or rules in the Income Tax Ordinance that may conflict with them. This means that even if there are other provisions elsewhere in the Ordinance, the Tenth Schedule will still apply to non-filers and late filers. Active Taxpayers List (ATL): The ATL is a crucial element in Pakistanâ€™s tax administration system. Individuals and businesses on this list enjoy various benefits, including lower withholding tax rates on financial transactions, investments, and other activities. Failure to appear on the ATL can lead to higher tax deductions, financial penalties, and other consequences. Implications for Non-Filers and Late Filers: For those who do not file their tax returns by the due date or fail to file them at all, the consequences are severe. Non-filers are subjected to higher withholding taxes on various transactions, such as banking, property purchases, and vehicle registrations. Additionally, they may face further legal action from the FBR if they do not comply with the tax regulations. The FBR has emphasized the importance of timely tax filing to avoid penalties and legal complications. Non-filers and late filers are encouraged to rectify their tax status by submitting their returns and ensuring compliance with the applicable laws. The updated guidelines serve as a reminder for taxpayers to adhere to the deadlines set forth under Section 118 of the Income Tax Ordinance and its related provisions. Taxpayers are also urged to consult the Tenth Schedule for detailed rules regarding late and non-filers.

Date: 2024-09-25

Details: ISLAMABAD, September 25, 2024 â€” The Federal Board of Revenue (FBR) is preparing to introduce stricter curbs on non-filers of tax returns, aiming to prevent them from engaging in various financial and commercial transactions. These measures are expected to be part of a new money bill that will be presented in the coming weeks, as part of the governmentâ€™s broader efforts to increase tax compliance and boost revenue. FBR Chairman Rashid Mahmood Langrial revealed that the new restrictions will target non-filers by prohibiting them from purchasing property, buying cars, investing in mutual funds, opening current accounts, and engaging in international travel, with the exception of religious pilgrimages. These moves are intended to eliminate the non-filer category, a mechanism that previously allowed individuals to avoid full tax obligations by paying nominal fees on transactions. Under the proposed measures, 15 specific activities will be restricted for non-filers, with an initial focus on five key areas. These restrictions will gradually be rolled out over the next few months as part of the FBRâ€™s broader transformation plan, which has already received approval from the prime minister. â€œNon-filers will no longer be able to evade taxes by paying minimal fees,â€ Langrial said during a consultative meeting with business leaders on Tuesday. He emphasized that the concept of non-filers is outdated and does not exist in most countries. â€œOur focus will shift to compliant versus non-compliant taxpayers, using machine learning and advanced algorithms to identify individuals who are not filing their tax returns.â€ The FBRâ€™s new approach aims to close the gap between the fees collected from non-filers and the potential tax revenue that could be raised from these individuals. Last year, only Rs25 billion was collected from non-filers, while much higher sums went uncollected. Implementation Strategy The restrictions on non-filers are expected to be enforced through an ordinance, with the FBR already working on drafting the necessary rules in consultation with the law ministry. These new measures will gradually be phased in, giving individuals time to adapt, according to the FBR chairman. Under the new regulations, non-filers will also be barred from opening standard bank accounts, although basic accounts for low-income individuals will still be allowed. Additionally, the FBR is collaborating with the State Bank of Pakistan to track individuals whose income levels do not match their transaction volumes, allowing commercial banks to report such discrepancies. Crackdown on Smuggling and Cash Transactions To further strengthen tax compliance, the FBR is enhancing its automation and increasing manpower at critical border points to combat smuggling. Langrial also mentioned new efforts to limit the use of bank cheques as a form of alternative currency in certain sectors, ensuring that economic activities are more closely linked to banking operations. These initiatives, according to the FBR chairman, are designed to create disincentives for non-compliance while encouraging more individuals to become compliant taxpayers.

Date: 2024-09-24

Details: Karachi, September 24, 2024 â€“ The Pakistan Tax Bar Association (PTBA) has taken a stand for taxpayers by formally requesting Prime Minister Shehbaz Sharif to extend the deadline for filing tax returns. In a letter to the Prime Minister, the PTBA expressed concerns about the challenges faced by taxpayers in meeting the September 30 deadline, citing technical issues with the Federal Board of Revenueâ€™s (FBR) online system and the increasing financial strain on tax filers. The PTBA highlighted ongoing issues with the FBRâ€™s online platform, which is essential for filing tax returns. According to the tax association, users frequently experience technical problems, such as the system freezing or malfunctioning. Worse, when users attempt to restart the filing process, the data they have entered disappears, leading to frustration and delays. The association also noted that the systemâ€™s functionality is particularly unreliable during weekends, further limiting taxpayersâ€™ ability to file their returns on time. In addition to these technical challenges, the PTBA brought attention to the governmentâ€™s inability to implement the Tajir Dost Scheme effectively. The scheme was aimed at bringing more traders into the tax net by requiring them to register with the FBR. However, many individuals who should have registered under the scheme have not done so, openly challenging the governmentâ€™s authority. The PTBA criticized the fact that non-filers continue to operate without consequences, while tax-compliant individuals face increasing pressure. The PTBA expressed concern that taxpayers who have long been filing their returns in compliance with the law are now being unfairly penalized. The association emphasized that these individuals are already burdened with multiple forms of taxation, including income tax, super tax, tax on deemed income, and capital value tax, in addition to paying sales tax on almost every item they purchase. Despite contributing their fair share, the PTBA argued that taxpayers receive little in return from the government in terms of basic services and fundamental rights. The PTBA warned that threatening tax filers with punitive measures, such as blocking their SIM cards or disconnecting utilities, could damage the social contract between the government and the people. â€œThese measures will weaken the social contract,â€ the PTBA stated in its letter. It argued that such actions target those who are already complying with the law, while non-filers continue to evade accountability. Historically, the deadline for filing tax returns has been extended to accommodate various challenges. However, the PTBA pointed out that this year, businesses and individuals are facing particularly severe financial difficulties. The association estimated that by the current deadline of September 30, only about 40% of returns will be filed, with another 25% in progress and 35% still in preparation. With such a large portion of returns incomplete, the PTBA stressed that more time is needed to ensure that all taxpayers can file their returns accurately and on time. The PTBA suggested that the Prime Minister recognize the contributions of taxpayers who are already listed in the Active Taxpayers List (ATL) for 2023 by offering them an extension. It recommended allowing tax filers to submit their returns without penalties or surcharges until October 25, 2024. Such a gesture, the PTBA argued, would boost taxpayer confidence in the government and help bridge the trust gap between the two parties. In conclusion, the PTBA urged the government to consider this relief as a way to acknowledge the sacrifices made by taxpayers, who continue to meet their obligations despite financial hardships. Providing an extension would strengthen the relationship between the government and its tax base, encouraging greater compliance and reinforcing the commitment of taxpayers to the countryâ€™s economic well-being.

Date: 2024-09-24

Details: Karachi, September 24, 2024 â€“ The Sindh Revenue Board (SRB) has taken decisive action against a prominent restaurant in Karachi for its continued non-compliance with Sindh sales tax laws. The SRB has sealed the premises of M/s Alaska Restaurant, located in Clifton Block-4, citing violations of the rules related to e-invoicing and tax filing obligations. In a statement released on Tuesday, the SRB confirmed that Alaska Restaurant had been found persistently failing to adhere to the regulations surrounding the Sindh Sales Tax (SST) despite its integration with the SRBâ€™s Point of Sale (POS) e-invoicing system. The restaurant allegedly failed to file the prescribed tax returns and was involved in suppressing sales, leading to a significant loss in SST revenue. The SRB highlighted that it had issued multiple warnings to the restaurant, urging it to comply with the tax laws and avoid penalties. However, despite these repeated warnings, Alaska Restaurant continued its non-compliant behavior, leaving the SRB with no choice but to take enforcement action. The restaurantâ€™s non-compliance constitutes offenses punishable under Sindh sales tax laws. As a result, the SRB officers sealed the premises of the restaurant, and further actions are expected to be taken in accordance with the legal provisions. The SRB emphasized that this step was necessary to enforce tax compliance and prevent revenue loss that directly impacts the provincial economy. This sealing action serves as a reminder of the SRBâ€™s ongoing efforts to ensure that businesses, especially those in the hospitality sector, comply with the legal requirements to issue proper SRB-prescribed POS tax invoices to their customers. These invoices are crucial for ensuring transparency and accurate reporting of sales, which in turn contributes to the collection of the SST. The SRB has warned that similar enforcement actions will continue against other restaurants and businesses that fail to meet their legal tax obligations. The Board has stressed the importance of compliance in maintaining a fair and transparent business environment, especially as it pertains to the hospitality sector, which is a key contributor to provincial revenue. This action underscores the SRBâ€™s commitment to upholding tax laws and ensuring that businesses operate within the legal framework, thus contributing their fair share to the Sindh treasury.

Date: 2024-09-24

Details: Karachi, September 24, 2024 â€“ The Federal Board of Revenue (FBR) has introduced revised tax guidelines for Associations of Persons (AOPs) for the tax year 2024-25, aimed at clarifying the principles of taxation under Section 92 of the Income Tax Ordinance, 2001. The updated guidelines focus on how AOPs will be taxed separately from their members and provide important details regarding exemptions and company-specific rules. According to the FBR, Section 92 outlines that an AOP will be liable to tax independently from its members. If the AOP pays tax, the income received by its members from the AOP will be exempt from further taxation. However, this exemption comes with several important conditions and exclusions. One significant provision is that if any member of the AOP is a company, the companyâ€™s share in the AOPâ€™s income will not be included in the total income of the AOP for tax purposes. Instead, the company will be taxed separately according to the corporate tax rate applicable to its share of income. This ensures that companies participating in AOPs are taxed fairly and according to corporate tax structures, while other AOP members can still benefit from the tax exemptions. Another key update in the guidelines addresses AOPs with large turnovers. Specifically, if an AOP has a turnover of 300 million rupees or more during the current tax year or any of the preceding tax years, the income received by the members will not be exempt unless the AOP submits audited financial statements. These financial statements must be filed by a firm of Chartered Accountants or Cost and Management Accountants, as defined under their respective ordinances. The FBR further clarified that if the AOPâ€™s income is fully exempt from tax under other provisions of the Income Tax Ordinance, the share received by the members in their capacity as AOP members will also remain exempt, reinforcing the principle of no double taxation on the same income. These revised guidelines for AOPs seek to streamline the tax filing process and ensure greater transparency, especially for large-scale AOPs and those involving corporate entities. The FBR has emphasized the importance of timely submission of financial statements to avoid any loss of exemptions and to remain compliant with the new regulations. By issuing these updated tax rules, the FBR aims to foster a more structured approach to AOP taxation while maintaining fairness and clarity in the taxation of both individuals and corporate members involved in such associations.

Date: 2024-09-24

Details: Islamabad, September 24, 2024 â€“ In a significant move to enhance trade relations between Pakistan and Iran, the Ambassador of Iran to Pakistan, H.E. Dr. Reza Amiri Moghaddam, met with Chairman Federal Board of Revenue (FBR), Rashid Mahmood Langrial, at the FBR headquarters Tuesday. The meeting focused on discussing various matters concerning customs, cross-border trade, and the management of trade flows to ensure the smooth facilitation of economic activities between the two neighboring countries. During the meeting, both sides underscored the need to resolve key issues hindering the growth of bilateral trade, with particular emphasis on removing trade â€œirritantsâ€ that have impeded the full realization of economic potential. The officials expressed optimism about boosting economic cooperation through collaborative efforts, which will not only strengthen ties between Iran and Pakistan but also enhance regional economic integration. The discussion revolved around the vital role that customs procedures play in promoting or hindering cross-border trade. Both Pakistan and Iran are keen to simplify these processes and eliminate bottlenecks that slow down the movement of goods and services across their shared border. To this end, the two sides agreed to form a joint sub-committee, which will be tasked with delving deeper into customs-related issues and proposing solutions aimed at streamlining procedures for traders on both sides. This sub-committee will comprise technical experts from both countries, who will work collaboratively to identify and address the key challenges that businesses face. The sub-committee will focus on modernizing customs protocols, improving infrastructure at border crossings, and ensuring transparency and efficiency in trade transactions. The objective is to ensure a smoother, faster flow of goods, which could stimulate greater economic activity and open new avenues for trade between the two countries. Both officials expressed their commitment to building upon the strong foundation of brotherly relations that already exist between Pakistan and Iran. They reiterated the importance of bilateral trade in fostering mutual economic growth and agreed that concerted efforts were needed to address challenges and maximize trade potential. This meeting comes at a critical juncture as both countries seek to expand their economic ties. The agreed-upon measures, if implemented, could not only address longstanding customs issues but also serve as a catalyst for boosting regional trade and cooperation.

Date: 2024-09-24

Details: Karachi, September 24, 2024 â€“ In a strategic move to address revenue shortfalls, the Federal Board of Revenue (FBR) has extended collection timings for Pakistan Customs, aiming to generate additional revenue through enhanced duty and tax collection. This decision comes as the FBR ramps up efforts to meet its targets for the first quarter of the fiscal year, which ends on September 30, 2024. In an official communication circulated to all customs stations across the country, the FBR directed that Pakistan Customsâ€™ field formations will remain open on Saturday and Sunday, September 28 and 29, 2024, ensuring uninterrupted collection of duties and taxes over the last three days of the quarter. Additionally, the working hours have been extended for these days, with offices remaining open until 10 PM on September 28 and 29, and extending further until midnight on September 30. The FBRâ€™s decision is seen as part of its broader strategy to plug revenue gaps as it faces a critical shortfall in collections. By allowing Pakistan Customs to operate beyond standard hours, the government hopes to tap into the significant amounts of customs duties and taxes that are typically collected at the end of each quarter, especially from the import and export sectors. In tandem with the extended hours, the FBR has also directed customs officials to ensure the same-day transfer of collected revenue to the State Bank of Pakistan (SBP). To facilitate this, the chief collectors of Pakistan Customs have been instructed to establish a direct liaison with the SBP and authorized branches of the National Bank of Pakistan (NBP), ensuring the swift transfer of funds. This coordination is crucial for streamlining the process and ensuring that the collected revenue is deposited into government accounts without delay. The move reflects the FBRâ€™s focus on accelerating revenue collection to meet the national fiscal targets, which are critical for maintaining economic stability. The extension of collection hours is likely to benefit industries that rely heavily on import and export activities, as it ensures that their goods can be cleared without delays over the weekend. Businesses have also welcomed the decision, as it provides them with additional flexibility to complete customs procedures before the quarter ends. With the extended operating hours, the FBR hopes to maximize collections and make significant headway in addressing the revenue shortfall, while ensuring smooth and efficient tax administration through Pakistan Customs.

Date: 2024-09-23

Details: ISLAMABAD: The poor farmers and agriculturists have expressed serious concern over the Federal Board of Revenueâ€™s (FBR) new revenue measure to raise sales tax on tractors from 10 to 18 percent, which would be a disaster for the entire farming community. In an urgent communication to Chairman FBR, Nabi Bux Sathio, Senior Vice President Sindh Chamber of Agriculture Hyderabad, Sindh has strongly proposed rationalization of tax structure and abolishment of levy of sales tax on tractors to support the agriculture sector. The farmers have shared negative implications of FBRâ€™s proposed raise in sales tax on tractors on the farmersâ€™ community. The tax rationalization package proposed by Sindh Chamber of Agriculture covers reduction of import duty/sales tax on imported tractors and continuation or reduction in existing sales tax rate on locally manufactured tractors. Sindh Chamber of Agriculture has informed FBR that the chamber, as representatives of the farming and agricultural community in Sindh, feel compelled to shed light on the significant challenges and hardships faced by our fellow farmers and agriculturists in recent times. The agricultural sector plays a pivotal role in Pakistanâ€™s economy, contributing 24% to the gross domestic product (GDP) and employing 37.4% of the workforce. However, the sector is currently grappling with a myriad of complex issues. These include the lack of investment and support, the adverse effects of climate change, and the dwindling availability of water, exacerbating the challenges faced by farmers and agriculturists. Moreover, farmers have been severely impacted by the inability to secure fair prices for their produce. The governmentâ€™s announcement of support prices for wheat and cotton has not translated into actual purchases at the stipulated rates, leaving farmers with no choice but to sell their crops at significantly lower prices. The situation is further compounded by the low prices offered for rice and the potential delay in the sugar cane crushing season, which has added to the woes of the farming community, it stated. In addition to these hardships, the reported news is that the FBR has proposed increase in the sales tax on locally manufactured tractors only serves to burden the already struggling farmers. Despite a notable surge in the domestic tractor industry, there remains a substantial gap between the actual availability of tractors and the required horsepower per acre, further underscoring the challenges faced by farmers in accessing essential agricultural machinery. To address these pressing issues, Sindh Chamber of Agriculture has urged the FBR Chairman to consider the said recommendations: Firstly, the government should maintain or reduce the existing sales tax rate on locally manufactured tractors from 10% to 5%. Secondly, the government should reduce the custom duty on imported tractors from 15 percent to 5 percent. Thirdly, Lower the sales tax on imported tractors from 10 percent to 5 percent and eliminate the additional advance sales tax of 3 percent on imports. Implementing these recommendations will not only provide immediate relief to farmers but will also act as a catalyst for revitalizing Pakistanâ€™s agricultural sector. By supporting the backbone of our economy, we can ensure a prosperous and self-reliant future for the nation. The said measures will secure the livelihoods of millions and bolster national growth. The Sindh Chamber of Agriculture remained hopeful that the Federal Board of Revenue will prioritize these crucial reforms and stand with the farming community during this challenging time, it added. Copyright Business Recorder, 2024

Date: 2024-09-22

Details: Karachi, September 22, 2024 â€“ The Federal Board of Revenue (FBR) has announced its decision to utilize Artificial Intelligence (AI) for an in-depth examination of income tax returns and wealth declarations submitted for the tax year 2024. This strategic shift is part of FBRâ€™s broader initiative to modernize tax compliance processes and enhance the accuracy and efficiency of its auditing mechanisms. According to insider sources at the FBR, the organization has made comprehensive arrangements to conduct a meticulous AI-based examination of declared incomes and assets. The AI system will evaluate the tax returns based on specific benchmarks, allowing the FBR to identify discrepancies, underreporting, or potential tax evasions with greater precision. Focus on High-Value Transactions Individuals conducting substantial banking transactions during the tax year are expected to be a primary focus of the AI examination. The FBR has noted a record increase in banking deposits as of June 30, 2024, and plans to scrutinize these transactions rigorously. In addition to banking activity, AI will monitor high-value property deals, vehicle purchases, and international travel, all of which are typically indicators of taxable income that may not be fully declared. The application of AI aims to streamline the process of identifying potential tax discrepancies, ensuring that individuals and businesses comply with the tax code and contribute their fair share to the national exchequer. The FBRâ€™s reliance on data-driven technology reflects a shift towards a more proactive approach to tax collection, minimizing human error and inefficiencies in the audit process. FBR Determined to Enforce Deadline The FBR has made it clear that the deadline for filing income tax returns for the 2024 tax year will not be extended beyond September 30, 2024. In a statement made earlier, FBR spokesperson Bakhtiar Muhammad emphasized the importance of timely submissions, urging citizens to avoid a last-minute rush. He cautioned that no grace period or filing extensions would be granted, reinforcing the urgency of adhering to the deadline. â€œTaxpayers must submit their returns promptly,â€ said Bakhtiar Muhammad. â€œBy ensuring timely compliance, we are fostering a culture of tax responsibility, which is critical for the economic stability and growth of the country.â€ The FBR is adamant that the introduction of AI will expedite its ability to process returns and detect anomalies, which will ultimately boost revenue collection for the government. The spokesperson emphasized that fostering tax compliance would contribute to Pakistanâ€™s broader economic goals, including fiscal stability, better infrastructure, and social welfare initiatives. Leveraging Modern Technology for Tax Compliance The AI initiative is part of the FBRâ€™s ongoing efforts to revolutionize its tax system through the integration of advanced technologies such as data analytics and machine learning. These tools will enable the FBR to identify tax evasion more effectively and refine the auditing process, resulting in faster and more accurate verifications. In parallel with the AI system, the FBR is focusing on upgrading its tax infrastructure and making the tax filing process more user-friendly. The Iris portal, FBRâ€™s digital tax submission system, is designed to simplify the process for taxpayers, reducing errors and improving accessibility. The platform has undergone continuous enhancements to ensure it meets the growing needs of taxpayers, allowing them to file returns efficiently without facing technical hurdles. The FBR has also prioritized building a highly skilled and professional workforce to support its modernization efforts. Through comprehensive training and development programs, the FBR aims to cultivate a culture of professionalism and integrity among its employees, fostering a motivated and high-performing team capable of addressing the complexities of modern tax administration. As Pakistan navigates its fiscal challenges, the integration of AI into the tax system represents a significant step toward ensuring accountability, transparency, and improved revenue collection for the countryâ€™s future economic success.

Date: 2024-09-22

Details: Karachi, September 22, 2024 â€“ The Sindh Revenue Board (SRB) has initiated unannounced inspections of restaurants and cafes across Karachi to scrutinize their compliance with tax regulations, particularly the deduction and collection of Sindh Sales Tax (SST) on services. The inspections were conducted in response to consumer complaints and rising concerns on social media regarding non-compliance with the Sindh Sales Tax on Services Act, 2011. The SRB issued a statement on Sunday detailing the operation, which took place on September 21, 2024, in areas such as Sehar Commercial and Khayaban-e-Sehar in Defence Housing Authority (DHA). The purpose of these surprise visits was to ensure that restaurants were adhering to legal requirements, including issuing proper tax invoices and integrating their Point of Sale (POS) systems with SRBâ€™s digital infrastructure. The SRB emphasized that restaurants and cafes must comply with the SST rates specified in its circular dated June 30, 2024. According to the guidelines, a 15% sales tax applies to cash transactions for restaurant services, while a reduced rate of 8% is applicable to digital payments made through debit cards, credit cards, mobile wallets, or QR code scanning. Exceptions to this reduced rate exist in cases where the SRB has permitted a 15% tax even on digital payments. During these inspections, SRB officials verified whether businesses had properly integrated their POS systems with SRBâ€™s online system and were applying the correct SST rates. The board issued a stern warning that any business found underreporting sales, failing to apply the prescribed SST rates, or avoiding proper integration with the SRB system would face strict legal action. The SRB reiterated its commitment to enforcing tax compliance and protecting the governmentâ€™s revenue stream from evasion. Additionally, the SRB has assured the public that such surprise inspections will continue in the future to ensure widespread compliance. Restaurants and cafes that attempt to evade taxes or fail to adhere to the correct procedures will face significant penalties. The statement further stressed that the SRB is committed to resolving taxpayer complaints promptly. Any establishment found attempting to circumvent tax obligations will be held accountable, ensuring that no business can exploit loopholes to avoid legitimate tax contributions. The SRBâ€™s efforts aim to create a fair and transparent tax environment, strengthening the governmentâ€™s fiscal position and ensuring the smooth functioning of public services. These proactive measures reflect the SRBâ€™s ongoing commitment to maintaining tax integrity across the province, particularly in the restaurant and hospitality sectors.

Date: 2024-09-22

Details: Islamabad, September 21, 2024 â€“ The Inland Revenue Service Officers Association (IRSOA) has voiced strong opposition to the Federal Board of Revenueâ€™s (FBR) new transformation plan, expressing grave concerns over its content and execution. The IRSOA, which represents over 1,300 officers instrumental in collecting more than Rs. 9 trillion annually, criticized the plan on several fronts, claiming it was not developed in consultation with the officers and raised serious concerns about transparency and fair treatment within the department. Non-Indigenous Plan Lacking Consultation A key criticism from the IRSOA is that the transformation plan was not an internally generated initiative by the FBR. Despite media reports suggesting otherwise, the association clarified that a task force of IRS officers was hastily assembled to analyze data and identify tax gaps, without any role in formulating the planâ€™s recommendations or proposals. This lack of internal input has resulted in widespread dissatisfaction among officers. Adding to this frustration is the alleged absence of dialogue between the IRSOA and the newly appointed FBR Chairman. The association highlighted that repeated requests for meetings, including formal submissions, were ignored. The lack of consultation has exacerbated feelings of alienation among the officers who feel their concerns are being sidelined. Unfair Treatment of IRS Officers The IRSOA strongly criticized what it perceives as discriminatory practices within the transformation plan, particularly the implementation of the 60/40 peer rating system for performance assessments. Officers argue that this system is demoralizing and unfair, especially when compared to other civil service groups. Instead of subjective peer evaluations, the IRSOA proposed that performance assessments be based on objective measures such as new taxpayer registrations, recovery performance, and audit outcomes. The association also expressed concern over limited career advancement opportunities for IRS officers, including exclusion from key positions within the FBR hierarchy, foreign training opportunities, and other privileges. This has left many officers feeling undervalued, adding to the demotivation of an already overstretched workforce. Resource Deficiencies and Work Culture Despite their commitment and efficiency, IRS officers face significant challenges in terms of resource constraints and an unproductive work culture. Officers are reportedly burdened with excessive reporting requirements to senior officials, preventing them from focusing on core responsibilities. The transformation plan, according to IRSOA, fails to address basic needs such as adequate salaries, transportation, and accommodation for junior officers. Without providing essential resources, IRSOA argues, the transformation plan is destined to fail. The association also highlighted concerns over disparities in how integrity issues are addressed within the FBR, noting that IRS officers often face harsher scrutiny compared to their counterparts in the Pakistan Customs Service (PCS). These discrepancies, combined with inadequate logistical support, have further strained field units, leaving officers to cover their operational expenses out of pocket. Specific Demands and Concerns The IRSOA has issued a set of specific demands to address these concerns. These include aligning salaries and allowances for IRS officers with those of other service groups, providing logistical support for field enforcement activities, ensuring necessary staff and amenities for field formations, and devolving authority to empower officers in the field. The association also stressed the need for prioritizing career progression and international training opportunities to enhance the skills and experience of IRS officers. Transformation and Accountability The planâ€™s approach to accountability has also drawn criticism. The IRSOA strongly opposes the hiring of external auditors from the private sector, citing concerns over accountability and potential data leaks. Instead, the association advocates for recruiting auditors from within the organization to ensure accountability and prevent scandals like those involving Pakistan Revenue Automation Limited (PRAL) in the past. By outsourcing audits to private firms, IRSOA warns that the FBR risks repeating past mistakes, which could lead to corruption scandals. Should this occur, the IRSOA places the responsibility squarely on the FBR Chairman, who, despite lacking prior experience within the organization, has presided over significant losses in recent months. Digital Strategy and Unit Empowerment IRSOA also emphasized the importance of aligning FBRâ€™s digital strategy with its objectives, particularly in enhancing taxpayer experience and operational efficiency. Improved data analytics and intelligence sharing, they argue, are critical for increasing tax revenue. However, the transformation plan fails to institutionalize access to vital data and decentralize it to relevant stakeholders. Furthermore, the lack of empowerment for field units is cited as a major shortcoming of the plan. IRS officers are overburdened with unproductive tasks and are not provided with the necessary support to perform their duties effectively. The association called for a redesign of job descriptions and performance evaluations that focus on clear, relevant metrics. Conclusion: Missed Opportunity In closing, the IRSOA expressed disappointment over the presentation of the transformation plan, which included imagery they deemed inappropriate and demoralizing, particularly the depiction of the FBR as a snake. This, they said, reflected poorly on how the organization is viewed and represented by its leadership. While the IRSOA remains committed to the goal of effective tax collection, they urge the FBR leadership to address these serious concerns. Without the necessary resources, transparency, and empowerment, the transformation plan is unlikely to achieve its desired objectives. The IRSOA warns that at a time of economic crisis, the country is missing a golden opportunity to transform itself into a self-reliant state.

Date: 2024-09-22

Details: Karachi, September 22, 2024 â€“ The Federal Board of Revenue (FBR) has issued clear guidelines categorizing resident and non-resident persons for tax purposes under the Income Tax Ordinance, 2001 for the tax year 2024-25. This classification is essential for determining the tax liabilities of individuals, companies, and associations of persons. The FBR explained that under Section 81 of the Income Tax Ordinance, 2001, a person is categorized as either a resident or a non-resident for tax purposes. A person will be considered a resident for a given tax year if they fall into one of the following categories: 1. Resident Person: â€“ Individual, company, or association of persons: A person residing in Pakistan for the year. â€“ Federal Government: Automatically considered a resident. On the other hand, a non-resident person is defined as any individual or entity that does not meet the criteria for being considered a resident during that tax year. Further clarifications were provided under Section 82 of the Ordinance, which focuses on defining a resident individual. The FBR outlined that an individual will be considered a resident for tax purposes if: â€¢ They are physically present in Pakistan for a cumulative period of 183 days or more during the tax year. â€¢ They are an employee or official of the Federal Government or a Provincial Government posted abroad during the tax year. â€¢ A citizen of Pakistan who is not present in any other country for more than 182 days in the tax year or is not classified as a resident taxpayer of another country. The FBR also elaborated on the status of a resident company under Section 83. A company is deemed to be a resident company for a tax year if it meets any of the following conditions: â€¢ It is incorporated or formed under any law in Pakistan. â€¢ The control and management of the companyâ€™s affairs are situated entirely within Pakistan at any point during the year. â€¢ It represents the Provincial Government or a Local Government in Pakistan. Lastly, the FBR provided clarification regarding resident associations of persons under Section 84. An association of persons (AOP) is considered a resident if the control and management of its affairs are located wholly or partly within Pakistan at any time during the tax year. These definitions are crucial for understanding tax liabilities and ensuring compliance with Pakistanâ€™s tax regulations. Resident persons are subject to tax on their global income, while non-resident persons are only taxed on income sourced within Pakistan. The FBRâ€™s categorization helps streamline the tax process and ensures that individuals and entities adhere to the applicable tax framework.

Date: 2024-09-21

Details: The Cabinet Committee on State-Owned Enterprises (CCoSOEs) on Saturday approved the reconstitution of Pakistan Revenue Automation (PVT.) Ltdâ€™s (PRAL) Board of Directors (BoD). The approval was given during the CCoSOEs meeting, which was virtually chaired by Federal Minister for Finance and Revenue Muhammad Aurangzeb. As per a statement by the Finance Division, the meeting considered a proposal by the Revenue Division regarding the reconstitution of the BoD of PRAL as per terms specified under the State Owned Enterprises Act 2023. â€œThe meeting considered the recommendation of five majority independent directors and four ex-officio members by the Board Nominations Committee as per Section (1) of Section 10 of the Enterprises (Governance and Operations) Act, 2023,â€ read the statement. FBR digitisation: Aurangzeb calls for utilisation of PRAL, REMIT data It is pertinent to mention that PRAL, established in 1994, is responsible for providing technology-driven solutions to FBR, playing a vital role in automating the countryâ€™s tax collection system. Meanwhile, during the meeting, the committee was told that all the five members recommended for positions of independent directors were drawn from the private sector and possessed relevant experience in top management positions. â€œThe meeting considered the summary and accorded strong endorsement to the proposal,â€ the Finance Division said. Meanwhile, Finance Minister Aurangzeb lauded the step to have a majority of independent directors on the board and complemented the selection of prominent professionals from the SME sector to run the board professionally, read the statement. â€œHe hoped the new board would be able to observe strong oversight and good management of PRAL to help achieve revenue generation goals,â€ the Finance Division said. The meeting was attended by Minister for Maritime Affairs Qaiser Ahmed Shaikh, Chairman FBR Rashid Mahmood Langrial, Chairman Securities and Exchange Commission of Pakistan (SECP) Akif Saeed, federal secretaries, and senior officers from relevant ministries and departments.

Date: 2024-09-20

Details: LAHORE: Chief Coordinator Tajir Dost Scheme Mohammad Naeem Mir said on Thursday that SRO 1064 is likely to be amended to make it more effective. Mir was addressing a press conference along with Sohail Dar and Ahmed Hassan, focal person for the scheme at the Conference Hall of Regional Tax Office (RTO). Mir said the proposed amendments suggest that the power review would trickle down to the regional level from the Federal Board of Revenue (FBR) and assistant commissioners will chair regional committees to review the imposition of tax in all 42 cities of the country. According to him, the committees would review applications from traders seeking a reduction in rate in line with their capacity to pay. He said the city of Lahore has been divided into 12 regions and equal number of committees would review any such requests from traders, seeking exemption from flat rate of tax under the scheme. Earlier, the Board was vested with the power of review, which is likely to be amended ahead he said and added that these committees would also have the power of reviewing different sectors of economy in terms their paying capacity. He said fresh amendments would also dispel the prevailing impression that advance tax is a minimum tax, saying the advance tax is an adjustable tax in line with the liability of taxpayers. Furthermore, he said, the rate of advance tax for wholesalers is likely to reduce to 0.5 percent from existing 2.5 percent under section 236-H of the law. Mir said registration under Tajir Dost Scheme would automatically register taxpayers and their names would appear on the active taxpayer list immediately. Those who have got themselves registered with the scheme in 2023 would also be covered under the new arrangement, he added. He said fresh amendments in SRO 1064 would also withdraw the power of audit from regional offices to the Federal Board of Revenue. Also, traders would be facilitated to submit their returns on quarterly basis than monthly basis. Copyright Business Recorder, 2024

Date: 2024-09-20

Details: Prime Minister Shehbaz Sharif on Friday said digitisation of the Federal Board of Revenue (FBR) and its improved enforcement mechanism were the need of the hour to bring about economic reforms in the country. The prime minister, chairing a meeting to review matters related to the FBR, directed authorities concerned to formulate a comprehensive strategy to improve FBRâ€™s enforcement, according to a PM Office press release. Calling the FBR the backbone of the national economy and appreciating its transformation plan, the prime minister said enhanced tax receipts would upgrade service delivery and the social sector. Sales tax laws on distribution: PBC approaches NTC for resolution of federation-provinces dispute He called for consulting the prominent taxpayers and all stakeholders on the FBR transformation plan and seeking approval of amendments in coordination with the relevant government departments for their effective implementation. The prime minister said the promotion of the private sector was among government priorities, calling it inevitable for a strong economy. He instructed a third-party audit of FBRâ€™s projects and expedited efforts to curb smuggling. During the briefing, PM Shehbaz was told that the FBR transformation plan featured effective utilisation of technology, awarding efficient officers to improve tax receipts, and improving enforcement of taxation laws. Formulated by FBR officers and experts within the last 40 days, the programme is expected to ensure tax collection without impeding economic development besides facilitating the honest taxpayers. Sales tax condonation for time limit: FBR issues â€˜checklistâ€™ for taxpayers It also provides for strict action or restrictions on transactions against those failing to pay full tax on time or those involved in fraud, to prevent tax evasion. It was told that such measures would be enforced after consultation with the good taxpayers. The meeting approved the FBRâ€™s Home Grown Transformation Plan that has been formulated on the prime ministerâ€™s directives in consultation with economic and technological experts after analysing the tax receipts during the last 25 years. In the first phase, the efficient and competent officers would be posted in Karachi, the large taxpayer unit contributing 32% of receipts, who would be assisted by the auditors and experts. The plan also features the reward for best-performing officers, and a mandatory professional degree from the best universities for the officers, after their common and specialised training programmes. FBR asked to bring all hidden issues before PM immediately The participants were told that to curb custom duties theft, an appraisal and enforcement mechanism had been devised to assign the task to appraisers and inspectors without their prior knowledge, who would also be monitored through cameras. A carrot and stick policy would be enforced for customs inspectors and new check posts would be set up in collaboration with the FWO to curb smuggling. Federal ministers Ahsan Iqbal, Azam Nazeer Tarar, Ahad Khan Cheema, Muhammad Aurangzeb, Abdul Aleem Khan, and Dr Musaddik Malik, Minister of State Ali Pervaiz Malik, Coordinator to PM Rana Ehsan Afzal, Attorney General Mansoor Awan, State Bank Governor Jameel Ahmed, FBR Chairman Rashid Mehmood Langrial and relevant senior officers attended the meeting.

Date: 2024-09-20

Details: Karachi, September 20, 2024 â€” In a significant move aimed at enhancing transparency and combating tax evasion, the Federal Board of Revenue (FBR) has mandated that all immovable property transactions exceeding Rs 5 million must be conducted through the banking channel. This requirement, upheld for the tax year 2024-25, ensures that large-scale property purchases are properly documented and traceable within the formal banking system. The FBR has implemented this rule under Section 75A of the Income Tax Ordinance, 2001. The section explicitly outlines the requirements for purchasing property and other high-value assets using the banking system. According to Section 75A, the mandate applies to: â€¢ Immovable property with a fair market value greater than Rs 5 million. â€¢ Other assets with a fair market value exceeding Rs 1 million. For such transactions, payments must be made through specific banking instruments, including a crossed cheque, crossed demand draft, crossed pay order, or any other banking instrument that clearly indicates the transfer of funds between bank accounts. The provision ensures greater accountability by requiring a clear paper trail for all large transactions. The fair market value for immovable properties, as defined by this section, will be determined based on either the value notified by the FBR under Section 68 or the value established by provincial authorities for stamp duty purposesâ€”whichever is higher. Failure to comply with these guidelines will have serious consequences for the buyer. If the property purchase does not follow the specified banking procedures, the buyer will face penalties, including: 1. Ineligibility for Allowances: The asset will not qualify for tax allowances under Sections 22, 23, 24, and 25 of the Income Tax Ordinance, which typically relate to depreciation and other deductions. 2. Exclusion from Cost Consideration: The amount paid for the property will not be recognized as a cost when calculating capital gains under Section 76. This means that upon selling the asset, the buyer may face higher tax liabilities as they wonâ€™t be able to deduct the original purchase price when determining profits or gains. The move is part of a broader strategy by the FBR to regulate large-scale financial transactions more strictly, ensuring that all such purchases are transparent and within the tax net. By making banking channels mandatory for significant property transactions, the FBR aims to curb illegal practices such as under-reporting of property values, money laundering, and other forms of financial malfeasance. This mandate reinforces the governmentâ€™s commitment to bolstering the formal economy and ensuring that large financial transactions are fully compliant with tax regulations. Property buyers and investors are advised to strictly adhere to these guidelines to avoid legal and financial penalties.

Date: 2024-09-19

Details: ISLAMABAD: The Federal Board of Revenue (FBR) will include name of a person in the Active Taxpayers List (ATL), where such person has filed return in the Azad Jammu and Kashmir Central Board of Revenue or Gilgit Baltistan Council Board of Revenue. The FBR has issued S.R.O. 1448(I)/2024 to propose amendments in the Income Tax Rules here on Wednesday. According to the FBR, a personâ€™s name, where such person has filed return in the Azad Jammu and Kashmir Central Board of Revenue or Gilgit Baltistan Council Board of Revenue, shall be included in the active taxpayersâ€™ list, if his temporary and permanent addresses are in the Azad Jammu and Kashmir or Gilgit-Baltistan.â€. The Federal Board of Revenue (FBR) will also include name of a person in the Active Taxpayers List (ATL), who will files return for the latest tax year, by the due date or extended due date by the Commissioner or due date extended by the Board. As per FBR, a personâ€™s name shall be included in the ATL, if he files return of income tax for the latest tax year, by the due date specified in section 118 or by the due date as extended under section 119 by the Commissioner or by the due date as extended by the Board under section 214A. The FBR explained that the â€œlatest tax yearâ€ means the tax year last completed before the date on which return is filed and shall include the tax year previous to that year in case the due date or extended due date for filing of return for the last completed year has not expired. In case a person files his income tax return for the latest tax year, after the due date or extended due date as mentioned in sub rule (1), his name shall be included in the active taxpayerâ€™s list, if he pays surcharge as specified in proviso to clause (a) of sub-section (1) of section 182A of the Ordinance. The name of a company or an association of persons, whose return is not due to be filed because of incorporation or formation of such company or association of persons after the 30th day of June relevant to the latest tax year, shall be included in the active taxpayersâ€™ list, FBR added. Copyright Business Recorder, 2024

Date: 2024-09-19

Details: Karachi, September 19, 2024 â€“ The Federal Board of Revenue (FBR) issued a stern reminder to taxpayers on Thursday regarding the upcoming deadline for filing income tax returns for the fiscal year 2024, with warnings of serious consequences for non-compliance. Taxpayers across the country have received official notifications via their registered emails, urging them to submit their income tax returns by September 30, 2024. The communication, sent under subsection 114(1)(b)(vii) of the Income Tax Ordinance 2001, highlighted the legal obligations for taxpayers to file their returns and outlined the penalties for failing to do so. The FBR warned that failure to meet the deadline could result in punitive actions, including the suspension of mobile phone SIMs, disconnection of electricity and gas connections, and potential restrictions on international travel. â€œUnder subsection 114(1)(b)(vii) of the Income Tax Ordinance 2001, you are required to submit your income tax return for the fiscal year 2024 by or before September 30,â€ the message read. The warning also emphasized that the FBR possesses a complete record of taxpayersâ€™ financial transactions. With the increasing use of digital tracking systems and enhanced monitoring, the FBR is equipped with detailed information on individualsâ€™ income, expenditures, and transactions, allowing it to identify discrepancies in tax filings. As such, taxpayers have been urged to file accurate and complete returns. â€œThe FBR intends to conduct extensive audits, which could result in additional taxes and hefty penalties,â€ the message stated. This signals that the FBR is ramping up its enforcement efforts, and those who fail to file or misreport their financial details could face significant financial and legal repercussions. The FBRâ€™s strict approach this year is likely part of its broader strategy to boost tax compliance and expand the countryâ€™s tax net. Over the years, Pakistan has struggled with low tax compliance, with a large portion of the economy remaining undocumented. In recent months, the FBR has increased its efforts to curb tax evasion and bring more individuals and businesses into the formal tax regime. Tax professionals are advising taxpayers to ensure that they meet the September 30 deadline and avoid last-minute submissions to reduce the risk of errors. With the FBR signaling its intent to carry out comprehensive audits, taxpayers are advised to take this warning seriously and file their returns in a timely and accurate manner.

Date: 2024-09-19

Details: As the deadline of September 30, 2024, for filing annual income tax returns for the tax year 2024 draws near, taxpayers in Pakistan are advised to gather the necessary documents to ensure smooth compliance with tax regulations. The Federal Board of Revenue (FBR) has stressed the importance of this yearâ€™s filings and announced its intention to take stringent action against non-compliant taxpayers, particularly by scrutinizing past transactions and bank accounts of tax evaders. Filing the income tax return for the tax year 2024 is crucial to avoid penalties and legal consequences. Proper preparation is key to ensuring that all required information is accurately submitted to the FBRâ€™s online portal, thus avoiding potential complications in the future. Tax experts have compiled a checklist of essential documents that every taxpayer should have ready to make the correct entries. Key Documents Required for Filing Income Tax Return 2024: 1. Salary and Pension Slips: Taxpayers who are salaried or retired should gather their salary slips or pension slips covering the period from July 2023 to June 2024. 2. Bank Account Statements: Complete statements of all bank accounts, including those from National Savings and mobile wallets, should be obtained for the same period (July 2023 to June 2024). This is critical for documenting income and expenditure. 3. Foreign Transactions Certificates: If any amount was sent or received from abroad, a certificate detailing these transactions is required. This ensures transparency in foreign remittances and income sources. 4. Gift Deeds, Loans, and Insurance: Any declarations regarding gifts, loans taken or given, or insurance policies need to be included. 5. Business Details: For those who own or manage businesses, detailed records of investments, profits and losses, and expenses must be provided. 6. Mobile Phone SIM Tax Certificates: Tax certificates for all mobile phone SIMs should be kept on hand, as mobile phone usage is subject to certain taxes. 7. Property Details: Complete information on all properties (whether gifted, inherited, residential, commercial, agricultural, etc.) should be provided. This includes land, shops, and plots. 8. Assets: Details of assets like vehicles, motorcycles, jewelry (gold), prize bonds, livestock (cows, buffaloes, horses), and even pets must be included. 9. Personal and Household Items: The value of personal and household items in Pakistani Rupees should be listed, especially for high-value goods. 10. Assets in Othersâ€™ Names or Installments: If any asset has been purchased in someone elseâ€™s name or on installment, it must be disclosed. 11. Annual Expenses: A complete statement of annual expenses, including utility bills, educational and medical expenses, kitchen expenditures, vehicle maintenance, travel, shopping, and donations (such as Zakat), is essential. 12. Annual Savings: Documenting all annual savings is equally important for accurately calculating net income. FBRâ€™s Stance on Non-Compliance The FBR has made it clear that it will take serious action against those who fail to file their returns or attempt to conceal income. This includes reviewing previous yearsâ€™ transactions and bank accounts to detect tax evasion. By ensuring that all the necessary documents are in place, taxpayers can avoid potential issues and remain in good standing with the FBR. As the September 30 deadline approaches, it is imperative to act swiftly and file the income tax return on time.

Date: 2024-09-19

Details: Karachi, September 19, 2024 â€“ The Federal Board of Revenue (FBR) has provided a comprehensive clarification regarding the disposal and acquisition of assets under Pakistanâ€™s Income Tax laws. The updated provisions, outlined in Section 75 of the Income Tax Ordinance, 2001 (as of June 30, 2024), aim to ensure transparency and proper tax compliance concerning asset transactions in the country. Under Section 75 of the Ordinance, the FBR defines how the disposal and acquisition of assets will be treated for tax purposes, providing clarity for individuals and businesses alike. These regulations cover a range of scenarios where ownership of assets changes hands, whether through sale, transfer, or other means. Key Provisions on Disposal of Assets: 1. Ownership Transfer: A person is considered to have disposed of an asset when they part with ownership. This can occur through various forms, including: o Selling, exchanging, transferring, or distributing the asset. o Cancelling, redeeming, relinquishing, destroying, losing, or surrendering the asset. 2. Transmission by Succession: In cases of inheritance, the transmission of an asset via succession or will is treated as the disposal of the asset by the deceased individual at the time the asset is transferred to the beneficiary. 3. Business to Personal Use: If a business asset is converted for personal use, it is treated as having been disposed of at the time of conversion by the owner. Furthermore, if a business asset is discarded or ceases to be used in business, it is also considered disposed of. 4. Partial Disposal: The law also recognizes the disposal of a part of an asset, ensuring that partial transactions are adequately covered under tax regulations. Key Provisions on Acquisition of Assets: 1. Ownership Acquisition: A person is deemed to have acquired an asset at the moment they begin to own it. This includes situations where the person is granted any right over the asset. 2. Personal to Business Use: If a personal asset is repurposed for business use, the law treats it as an acquisition of the asset by the owner for business purposes at the time of application. Definitions: â€¢ Business Asset: Defined as an asset used wholly or partly in the course of a business, which includes stock-in-trade and depreciable assets. â€¢ Personal Asset: Defined as an asset held entirely for personal use without any business application. The FBRâ€™s updated provisions provide much-needed clarity for taxpayers engaged in transactions involving assets. By outlining how disposals and acquisitions are treated under the Income Tax Ordinance, the FBR ensures that all relevant parties can accurately account for their assets in compliance with tax laws. These measures are particularly significant for businesses and individuals in Pakistan, as they help streamline the process of reporting asset changes, ensuring proper tax obligations are met.

Date: 2024-09-18

Details: Karachi, September 18, 2024 â€“ The Federal Board of Revenue (FBR) has provided a detailed explanation of the duration of the tax year in Pakistan as per the Income Tax Ordinance, 2001, updated until June 30, 2024. This explanation aims to clarify how the tax year is defined and structured for income tax purposes, providing essential guidance for taxpayers across the country. Under Section 74 of the Income Tax Ordinance, 2001, the tax year in Pakistan is a period of 12 months that ends on June 30. This period is referred to as the â€œnormal tax yearâ€ and is denoted by the calendar year in which the last day of the tax year, i.e., June 30, falls. For instance, the tax year ending on June 30, 2024, would be referred to as the tax year 2024. Normal vs. Special Tax Year The FBR further elaborated on the distinctions between a â€œnormal tax yearâ€ and a â€œspecial tax year.â€ A normal tax year applies to most taxpayers, where the 12-month period for tax calculation aligns with the fiscal year, from July 1 to June 30. However, certain individuals or entities may have different income periods under the repealed Ordinance or specific cases where they are permitted to use a â€œspecial tax year.â€ This special tax year may follow a different 12-month cycle than the normal tax year and is denoted by the calendar year in which it closes. Flexibility in Tax Year Selection The FBR has made provisions for taxpayers with varying income cycles to apply for the use of a special tax year. Section 74(3) of the Ordinance allows taxpayers to request the Commissioner of Income Tax to grant permission for using a 12-month period other than the normal tax year. The application must demonstrate a compelling need, and the Commissioner has the authority to grant or reject the request after providing an opportunity for the applicant to present their case. The Ordinance also stipulates that any taxpayer using a special tax year can apply to revert to the normal tax year by submitting a written application. Similar to the process of adopting a special tax year, this request is subject to the Commissionerâ€™s approval, and the decision is based on the taxpayerâ€™s justification. Special Circumstances and Transitional Tax Year In cases where there is a transition from a normal tax year to a special tax year, or vice versa, the FBR has introduced the concept of a â€œtransitional tax year.â€ This refers to the period between the end of the last tax year before the change and the start of the new tax year. This separate tax year helps ensure a smooth transition for taxpayers when changing their tax year cycle. The FBR has also highlighted the option for a class of persons to be allowed, by official notification in the Gazette, to adopt a different tax year. The Board can permit certain groups to switch between the normal and special tax years based on their specific circumstances. Appeals and Review Process If a taxpayer is dissatisfied with a decision by the Commissioner under Sections 74(3), 74(4), or 74(7), they have the right to appeal. The dissatisfied party can file a review application with the FBR, and the Boardâ€™s decision on such applications will be considered final. Conclusion The FBRâ€™s clarification on the tax year duration serves as an important reminder for all taxpayers in Pakistan to comply with the tax systemâ€™s requirements. By offering flexibility through the option of a special tax year and a detailed review process, the FBR ensures that the tax system can accommodate diverse business and income cycles while maintaining a transparent and fair tax administration. Taxpayers are encouraged to stay informed and consult with tax professionals or the FBR for any specific queries regarding their tax year and related obligations.

Date: 2024-09-18

Details: ISLAMABAD: The Federal Board of Revenue (FBR) will include name of a person in the Active Taxpayers List (ATL), where such person has filed return in the Azad Jammu and Kashmir Central Board of Revenue or Gilgit Baltistan Council Board of Revenue. The FBR has issued S.R.O. 1448(I)/2024 to propose amendments in the Income Tax Rules here on Wednesday. According to the FBR, a personâ€™s name, where such person has filed return in the Azad Jammu and Kashmir Central Board of Revenue or Gilgit Baltistan Council Board of Revenue, shall be included in the active taxpayersâ€™ list, if his temporary and permanent addresses are in the Azad Jammu and Kashmir or Gilgit-Baltistan.â€. The Federal Board of Revenue (FBR) will also include name of a person in the Active Taxpayers List (ATL), who will files return for the latest tax year, by the due date or extended due date by the Commissioner or due date extended by the Board. As per FBR, a personâ€™s name shall be included in the ATL, if he files return of income tax for the latest tax year, by the due date specified in section 118 or by the due date as extended under section 119 by the Commissioner or by the due date as extended by the Board under section 214A. The FBR explained that the â€œlatest tax yearâ€ means the tax year last completed before the date on which return is filed and shall include the tax year previous to that year in case the due date or extended due date for filing of return for the last completed year has not expired. In case a person files his income tax return for the latest tax year, after the due date or extended due date as mentioned in sub rule (1), his name shall be included in the active taxpayerâ€™s list, if he pays surcharge as specified in proviso to clause (a) of sub-section (1) of section 182A of the Ordinance. The name of a company or an association of persons, whose return is not due to be filed because of incorporation or formation of such company or association of persons after the 30th day of June relevant to the latest tax year, shall be included in the active taxpayersâ€™ list, FBR added. Copyright Business Recorder, 2024

Date: 2024-09-18

Details: Karachi, September 18, 2024 â€“ In a significant development, the Federal Board of Revenue (FBR) has unveiled comprehensive amendments to the rules governing the Active Taxpayers List (ATL). The FBR, through the issuance of SRO 1448(I)/2024, has introduced sweeping changes to Rule 81B of the Income Tax Rules, 2002, in an effort to streamline tax compliance and enhance transparency in Pakistanâ€™s taxation system. The ATL serves as a vital tool for taxpayers, allowing them to avail reduced rates of withholding tax on various financial transactions. In the new draft amendments, the FBR has simplified the language and procedure surrounding the inclusion of taxpayers in the ATL, ensuring greater clarity and precision. One of the key amendments is the substitution of the existing wording in Rule 81B, sub-rule (1), which now mandates that the ATL will be published under section 181A of the Income Tax Ordinance. This ensures that taxpayers clearly understand the conditions for inclusion in the list. Under the new sub-rule (2), taxpayers will only be added to the ATL if they have filed their income tax returns by the due date specified in section 118, or if an extension has been granted under section 119 by the Commissioner or the FBR under section 214A. This step is intended to encourage timely compliance from all eligible individuals and businesses. Furthermore, the newly introduced sub-rule (2A) stipulates that taxpayers who file their returns after the due date will only be added to the ATL upon payment of a surcharge, as outlined in section 182A of the Income Tax Ordinance. This surcharge serves as a penalty for late submission while still allowing taxpayers to access the benefits of being listed on the ATL. In another notable shift, the FBR has moved from weekly to daily updates of the ATL. Previously, the list was updated every Sunday at midnight, but now the updates will occur on a daily basis, ensuring that newly compliant taxpayers can promptly benefit from their inclusion. The amendments also provide clarity on the inclusion of companies or associations of persons that were incorporated after the 30th of June of the relevant tax year. Such entities will automatically be added to the ATL, further simplifying the process for newly formed businesses. Lastly, the changes ensure that taxpayers in Azad Jammu and Kashmir and Gilgit-Baltistan, who file their returns with local tax authorities, will also be included in the ATL, provided their addresses are registered in these regions. These reforms mark a pivotal step towards creating a more efficient and transparent tax system in Pakistan.

Date: 2024-09-15

Details: ISLAMABAD: The Federal Board of Revenue (FBR)â€™s â€œFASTERâ€ refund payment system took eight to 19 days for processing of refunds, whereas, â€œSTARRâ€ system took 286 to 753 days for processing/payment of sales tax refunds. An impact study (2023-24) of Fully Automated Sales Tax E-refund (FASTER) system of the Auditor General of Pakistan (AGP) revealed that both the systems are running parallel for processing of refund payments. The main difference between the two systems is that cases through FASTER are processed centrally for all stages i.e. from verification of claims to upto authorisation of payment at the FBR headquarters. On the other hand, the processing and sanctioning of refund through STARR system is dealt by the respective field formation. The refunds through the â€œFASTERâ€ have increased in comparison to refunds through STARR, both in terms of number of claims as well as total claimed amount. The report added that the â€œFASTERâ€ took eight to 19 days on average for processing while processing through the â€œSTARRâ€ system varied from 286 to 753 days. Post-processing delays are another hurdle faced by taxpayers while claiming input tax refunds. Average credit days ranged from 153 to 173 days in STARR, while cases processed through â€œFASTERâ€ took nine to 29 days, report maintained. The AGP has recommended that there should be one platform for processing of refund cases. Other sectors not falling within its ambit as of now may also be allowed to file refund claims through â€œFASTERâ€. The tax gap framework of the FBR needs to be reviewed to incorporate refund liabilities and potential refunds. The department needs to address the systemic issue of non-payment of refunds. Risk categorisation of pending refund claims be carried out and payments be prioritised according to risk, the AGP report added. Copyright Business Recorder, 2024

Date: 2024-09-15

Details: Karachi, September 15, 2024 â€“ The Federal Board of Revenue (FBR) has updated the withholding tax rates on the usage of telephone and internet services for the tax year 2024-25. This update follows the release of the FBRâ€™s withholding tax card for the current tax year, which outlines the applicable tax rates under Section 236 of the Income Tax Ordinance, 2001. For the tax year 2024-25, the FBR has announced the following withholding tax rates on telephone and internet services: 1. Telephone Subscribers (Non-Mobile): o For telephone subscribers, excluding mobile phone users, where the monthly bill exceeds Rs 1000, a 10% withholding tax will be applied on the portion of the bill exceeding this threshold. o This tax rate is targeted at landline users with higher billing amounts. 2. Mobile and Internet Subscribers (Including Prepaid Cards): o For users of mobile phones, internet services, and prepaid telephone or internet cards, a 15% withholding tax will be applied to the total bill or the sales price of the prepaid card. o This also includes the sale of units through any electronic medium, ensuring that tax is deducted on all forms of prepaid telecommunications and internet services. 3. Persons Listed in Income Tax General Order Under Section 114B: o For individuals and entities listed under Section 114B of the Income Tax Ordinance, 2001, a significantly higher withholding tax rate of 75% will be imposed on their telephone and internet bills or the sale price of prepaid cards. o This elevated rate applies to taxpayers who have not complied with the income tax filing requirements set by the FBR. The updated withholding tax rates aim to broaden the tax base and ensure compliance from all subscribers, including non-filers. By imposing a higher rate of withholding tax on non-compliant individuals and businesses, the FBR seeks to encourage timely filing of tax returns and proper documentation of income. These tax updates reflect the governmentâ€™s ongoing efforts to increase revenue collection through direct taxation methods, such as withholding taxes. By targeting the telecommunications and internet sectors, which have seen exponential growth in recent years, the FBR aims to tap into these revenue streams while promoting tax compliance. Subscribers are advised to review their monthly bills and ensure that the appropriate tax rates are being applied. It is also crucial for non-filers to become compliant to avoid higher tax rates on their telecom and internet services.

Date: 2024-09-15

Details: Karachi, September 15, 2024 â€“ The Federal Board of Revenue (FBR) has announced the continuation of the tax credit facility for taxpayers who are reporting their sales on a real-time basis during tax year 2024-25. This move is aimed at encouraging businesses to integrate their sales systems with the FBRâ€™s computerized platform to promote transparency and ensure accurate tax reporting. The FBR recently updated the Income Tax Ordinance, 2001, as of June 30, 2024, and retained the provision of tax credit for businesses providing real-time access to their sales under Section 64D of the Ordinance. This section provides an incentive for businesses to invest in point-of-sale (POS) systems, a crucial step in digitizing Pakistanâ€™s tax infrastructure. According to the FBR, Section 64D of the Income Tax Ordinance, 2001 stipulates: 1. Any individual or business required to integrate with the FBRâ€™s computerized system for real-time sales reporting will be entitled to a tax credit for the amount invested in purchasing a point-of-sale (POS) machine. 2. The tax credit for the tax year in which the POS machine is installed, integrated, and configured with the FBRâ€™s system will be the lesser of: o The amount actually invested in the purchase of the POS machine, or o A maximum of Rs. 150,000 per machine. 3. The term point-of-sale machine refers to a device used for processing and recording sales transactions, either through cash, credit/debit cards, or online payments in an internet-enabled environment. This continuation of tax credit is part of the FBRâ€™s broader strategy to digitize tax collection, improve sales reporting accuracy, and reduce tax evasion. By offering tax incentives, the FBR aims to encourage more businesses, particularly in the retail and service sectors, to adopt real-time sales reporting. This step also assists businesses in streamlining their operations and ensuring compliance with national tax regulations. Real-time reporting is expected to boost revenue collection and minimize tax discrepancies. It ensures that sales data is promptly captured, reducing the chances of misreporting or underreporting sales, which has been a persistent issue in the informal sectors of the economy. Additionally, real-time integration allows the FBR to maintain a comprehensive and up-to-date database of sales transactions across the country. The tax credit facility has been well-received by businesses looking to reduce their tax liability while investing in necessary technological infrastructure. The FBRâ€™s initiative not only incentivizes businesses to comply with tax regulations but also contributes to the ongoing digital transformation of Pakistanâ€™s financial system.

Date: 2024-09-13

Details: Karachi, September 13, 2024 â€“ The Karachi Tax Bar Association (KTBA) has called upon the Federal Board of Revenue (FBR) to introduce an exemption for taxpayers reporting the disposal of fixed assets, highlighting significant procedural challenges faced by taxpayers in complying with current regulations. In a formal letter addressed to FBR Chairman Rashid Mahmood, KTBA President Syed Zafar Ahmed expressed concerns regarding taxpayersâ€™ difficulties in reporting transactions involving the sale and disposal of fixed assets. The KTBA underscored the importance of rectifying these issues to ensure timely compliance with tax regulations and prevent unnecessary delays in filing returns. The KTBA outlined the standard procedure under which taxpayers are required to issue a sales tax invoice at the standard rate of 18%, as stipulated under Section 3(1) of the Sales Tax Act, 1990. This invoice is intended to be declared in Annexure-C of the Sales Tax Return (STR) for the tax period in which the relevant sale occurs. However, taxpayers encounter significant obstacles when attempting to report such transactions due to a restriction on the FBRâ€™s electronic portal, which stems from the enforcement of Sales Tax General Order (STGO) No. 13 of 2022. The STGO No. 13 of 2022 was originally introduced to regulate transactions involving the buying and selling of goods in their original state, specifically targeting entities such as importers, wholesalers, dealers, and distributors. The KTBA emphasized that this order is irrelevant to many taxpayers, particularly service providers and those engaging in the disposal of fixed assets. Despite not falling under the specified categories, these taxpayers are still subject to restrictions that impede their ability to declare sales transactions involving fixed assets. â€œThe imposition of these restrictions on service providers is unjustifiable, as they were not intended to be subject to the STGO No. 13 of 2022 in the first place,â€ stated KTBA President Syed Zafar Ahmed in the letter. â€œThis not only creates unnecessary hurdles but also places taxpayers in a precarious position, preventing them from meeting their tax obligations in a timely manner.â€ The KTBA further noted that numerous taxpayers have sought assistance from the FBR Helpline through various emails, requesting the removal of these portal restrictions. Unfortunately, these appeals have largely gone unanswered, leaving taxpayers unable to declare sales invoices and submit their STRs for the relevant tax periods by the stipulated deadlines. As a result of these challenges, many taxpayers are unable to fulfill their sales tax liability within the prescribed timeframe, potentially subjecting them to penalties or additional scrutiny. The KTBA has strongly urged the FBR to take immediate action by revisiting the provisions of STGO No. 13 of 2022 and implementing an exception for the reporting of fixed asset disposals. The association has called for the FBR to address the concerns swiftly, ensuring that taxpayers are not unfairly penalized for issues arising from a misapplication of regulations. By removing these restrictions and providing the requested exemptions, the FBR would facilitate smoother tax compliance processes for affected businesses, fostering a more cooperative relationship between the revenue authority and the taxpayer community. In conclusion, the KTBA remains hopeful that the FBR will respond proactively to their requests, alleviating the current difficulties faced by taxpayers and ensuring that the regulatory environment remains conducive to economic growth and compliance.

Date: 2024-09-13

Details: Karachi, September 13, 2024 â€“ The Federal Board of Revenue (FBR) has released updated withholding tax rates applicable to electricity bills for the tax year 2024-25. These rates, outlined under Section 235 of the Income Tax Ordinance, 2001, apply to both commercial, industrial, and domestic consumers, and are part of the FBRâ€™s broader effort to streamline tax collection on utility services. Withholding Tax on Commercial and Industrial Consumers: For commercial and industrial electricity users, the withholding tax is based on the gross amount of the monthly electricity bill. The rates for tax year 2024-25 are as follows: 1. Gross amount of bill up to Rs 500: No withholding tax will be applied, and the tax rate will be zero. 2. Gross amount of bill exceeds Rs 500 but does not exceed Rs 20,000: A 10% tax will be levied on the total bill amount. 3. Gross amount of bill exceeds Rs 20,000: o For commercial consumers, a fixed tax of Rs 1950 will apply, along with 12% of the amount exceeding Rs 20,000. o For industrial consumers, a fixed tax of Rs 1950 will apply, along with 5% of the amount exceeding Rs 20,000. These revised rates aim to align the tax burden with consumption, ensuring that larger consumers contribute more to the national exchequer while smaller users are exempted or taxed at lower rates. Withholding Tax on Domestic Consumers: For domestic electricity users, the withholding tax is specifically targeted at individuals who are not listed on the Active Taxpayers List (ATL). The FBR clarified that individuals who appear on the ATL will not be subject to this tax. The tax rates for non-ATL domestic consumers are structured as follows: 1. Monthly bill less than Rs 25,000: No withholding tax will be applied, and the rate will be zero. 2. Monthly bill of Rs 25,000 or more: A withholding tax of 7.5% will be imposed on the total bill amount. This differential tax treatment incentivizes individuals to appear on the ATL, which can exempt them from this additional cost on their electricity bills. For non-ATL domestic consumers with high electricity usage, the 7.5% withholding tax on bills exceeding Rs 25,000 could add a significant financial burden. Encouraging Tax Compliance: The FBRâ€™s withholding tax regime on electricity bills is part of its strategy to enhance tax compliance and expand the taxpayer base. By imposing higher taxes on non-ATL individuals, the FBR aims to encourage greater participation in the formal tax system while ensuring that those who consume more pay proportionately. As these new withholding tax rates take effect for the tax year 2024-25, both commercial and domestic electricity consumers are encouraged to review their electricity bills and ensure they remain compliant with the FBRâ€™s regulations.

Date: 2024-09-13

Details: Karachi â€“ The Pakistani government is gearing up to introduce a mini-budget aimed at generating an additional Rs650 billion in revenue. This fiscal strategy will primarily target tax evaders and include an increase in the General Sales Tax (GST) on properties, tractors, and other goods. As part of its commitment to the International Monetary Fund (IMF), the government will also revise real estate valuation tables in 42 cities by the end of September 2024. This update will enable the Federal Board of Revenue (FBR) to adjust and notify new property tax rates. While the FBR has ruled out a blanket increase in the standard GST rate from 18% to 19%, selective hikes may still be implemented for specific items, including tractors. Additionally, thereâ€™s a possibility that withholding taxes on property sales and purchases could rise. The mini-budget will require the approval of Prime Minister Shehbaz Sharif and the federal cabinet. The final decision on whether to present it as a money bill in parliament or as a presidential ordinance will be made after consultations with political allies, particularly the Pakistan Peoples Party (PPP). To combat tax evasion, the FBR plans to take stringent measures against defaulters, including freezing bank accounts, banning property and vehicle purchases, and cutting off essential services. These harsh tactics are part of an ongoing effort to bring non-filers and under-filers into compliance. An important briefing on the mini-budget was initially scheduled for Thursday but has been postponed. The final decision on its introduction is expected to come before the IMFâ€™s Executive Board meeting at the end of September. The FBR has revealed that only 8% of the estimated 5.5 to 6 million income tax and GST filers contribute a staggering 92% of the total tax revenue. To address this imbalance, the FBR plans to utilize data from the National Database and Registration Authority (NADRA) and employ artificial intelligence (AI) to identify under-filers. The FBR is also targeting the salaried class, both in the public and private sectors. Detailed information on assets held by public sector employees at both federal and provincial levels will be scrutinized, followed by an examination of those in the private sector. Official data highlights a significant portion of taxpayers filing returns below the taxable threshold. For example, 0.6 million salaried individuals filed returns under the Below Taxable Limit (BTL) category. In the 2023-24 tax year, 1.3 million salaried filers paid Rs251.4 billion in income tax, with only 15,000 individuals reporting an income exceeding Rs10 million, contributing Rs93 billion of that total. Sales tax compliance tells a similar story: out of 24,000 sales tax filers, only 5,043 manufacturers contributed Rs745 billion in taxes during the last fiscal year. Furthermore, of the 80,000 registered companies, just 6,000 reported an annual income over Rs10 million, while a staggering 47,000 companies filed nil returns. Among 100,000 registered Associations of Persons (AOP), fewer than 4,000 reported income exceeding Rs10 million, while 60,000 AOPs also filed nil returns. The business community mirrors these trends, with 2.4 million out of 3.7 million filers submitting nil returns. Only 20,000 reported an annual income above Rs10 million. Meanwhile, 630,000 out of 2 million salaried filers also filed nil returns. To address these issues, the FBR has developed distinct notices for filers and non-filers. For filers, the notices will highlight their transactions throughout the fiscal year, including property or vehicle purchases, and encourage them to declare appropriate income and taxes. For non-filers, the FBR will issue warnings based on their spending patternsâ€”such as real estate purchases or high utility billsâ€”that suggest they should be paying higher taxes. Non-compliance may trigger punitive measures. As Pakistan teeters on the brink of yet another mini-budget, all eyes are on the governmentâ€™s next move and its potential to rectify the countryâ€™s fiscal imbalances while meeting the IMFâ€™s stringent requirements.

Date: 2024-09-13

Details: Karachi, September 13, 2024 â€“ The Federal Board of Revenue (FBR) has announced the tax credit benefits available for contributions made to approved pension funds during the tax year 2024-25. The FBR, in its updated Income Tax Ordinance, 2001 (valid as of June 30, 2024), highlighted the details under Section 63, which governs contributions to pension funds. Eligibility and Scope: As per Section 63, individuals classified as â€œeligible personsâ€ under sub-section (19A) of Section 2 of the Ordinance, and who derive income chargeable under the heads â€œSalaryâ€ or â€œIncome from Business,â€ are entitled to a tax credit. This tax credit applies to contributions made during the tax year to an approved pension fund under the Voluntary Pension System Rules, 2005. The goal of the tax credit is to incentivize long-term savings through pension funds by offering tax relief on contributions made by individuals, helping them secure financial stability for retirement. How the Tax Credit is Calculated: The FBR has provided a specific formula for calculating the tax credit: (A/B) x C, where: â€¢ A represents the amount of tax assessed before any tax credit allowances. â€¢ B is the taxable income of the person for the relevant tax year. â€¢ C is the lesser of: o The total contribution made to the pension fund during the year; or o 20% of the individualâ€™s taxable income for the year. Additionally, individuals who joined the pension fund at or after the age of 41 (within the first 10 years starting from July 1, 2006) are eligible for an extra 2% contribution per year, exceeding the age of 40. However, the total contribution cannot exceed 50% of the taxable income of the preceding year. It is also noted that this additional contribution provision expired on June 30, 2019, limiting the allowance to 30% of the total taxable income of the preceding year thereafter. Limitations: The FBR clarified that any transfer of existing balances from approved employment pension schemes, annuity schemes, or occupational saving schemes to individual pension accounts managed by pension fund managers will not qualify for a tax credit under this section. This initiative is designed to encourage individuals to build personal savings for retirement while enjoying tax relief, thereby promoting financial security in later years. The FBR continues to refine its tax regulations to encourage savings and investments in long-term financial instruments such as pension funds, providing individuals with incentives to plan for their future.

Date: 2024-09-13

Details: ISLAMABAD: The Federal Board of Revenue (FBR) has empowered Commissioner-Inland Revenue (IR) to condone time-limits specified under any of the provisions of the Sales Tax Act 1990 to facilitate sales taxpayers. In this regard, the FBR has issued S.R.O.1444(I)2024 here on Thursday to supersede notification No' S.R.O. 394(l)2009. According to the notification, the FBR has empowered Commissioner-IR having jurisdiction to condone time-limit where any time or period has been specified under any of the provision of the said Act or rules made there under. During this period, any application of taxpayer is to be made or any act or thing is to be done, so that he may, in any case or class or cases, permit such application to be made or such act or thing to be done within such time or period as he may consider appropriate. This is subject to the following limitations and conditions, namely:-(i); The registered person concerned or any person authorized by him shall submit an application to the Commissioner-IR having jurisdiction stating therein the grounds of delay for condonation of the time-limit. (ii); If no further information or documents are required in respect of the case, the Commissioner-IR shall take into consideration the grounds of delay and decide the case within thirty days from the date of receipt of the application. (iii); If the Commissioner-IR is of the opinion that further information and documents are required in respect of the case, he may ask for submission of such information and documents and, after receipt of the requisite information and documents, take the case into consideration and decide the case within 45 days of the receipt of the application. (iv); The Commissioner-IR shall decide the case on merit and record the reasons for approval or rejection of the application. (v); In case of approval of the application, the Commissioner-IR may condone the time-limit up to three years. The Commissioner-IR shall, not later than seventh day of every month, furnish in soft form or otherwise to the concerned Chief Commissioner-IR a report of cases processed in the calendar month, on the specified format, FBR added. Copyright Business Recorder, 2024

Date: 2024-09-12

Details: Karachi, September 12, 2024 â€“ The Federal Board of Revenue (FBR) has granted powers to Commissioners of Inland Revenue (IR) to condone time-limits in order to facilitate taxpayers. The FBR issued SRO 1444(I)/2024 on Thursday, officially allowing Commissioners-IR with jurisdiction to extend deadlines for applications or actions required under the Sales Tax Act, 1990, or its rules. This new directive gives taxpayers more flexibility in complying with time-sensitive provisions, provided they follow specific conditions. The FBR clarified that the Commissioner-IR may condone such time-limits if an application is submitted explaining the reasons for delay, and if deemed appropriate, extend the time period for up to three years. Key Conditions for Condonation The FBR outlined several conditions that must be met for the time-limit to be condoned. These include: 1. Application Submission: The registered taxpayer, or a representative authorized by them, must submit an application to the relevant Commissioner-IR. The application should clearly state the grounds for the delay. 2. Processing Without Further Documentation: If no additional documents or information are required, the Commissioner-IR must make a decision based on the grounds provided within 30 days of receiving the application. 3. Requests for Additional Information: If the Commissioner-IR requires more documentation, the taxpayer must submit the requested materials. In such cases, the decision must be made within 45 days from the receipt of the complete application. 4. Merit-Based Decision: The Commissioner-IR is required to decide the case based on its merits, providing clear reasons for either approving or rejecting the application. 5. Three-Year Limit: If the application is approved, the Commissioner-IR has the authority to condone the time-limit for up to three years. Reporting Requirements In addition to granting the Commissioners this discretion, the FBR has mandated that each Commissioner-IR must submit a report to their respective Chief Commissioner-IR by the seventh day of each month. This report should include details of all cases processed during the preceding month. The FBRâ€™s move aims to make tax compliance easier and more efficient, particularly for businesses and individuals facing unavoidable delays in fulfilling their tax obligations. This change is expected to provide much-needed relief for taxpayers dealing with complex filing requirements under the Sales Tax Act. The ability to condone time-limits, combined with clear guidelines and accountability measures, signals the FBRâ€™s commitment to improving tax administration while balancing the needs of taxpayers.

Date: 2024-09-12

Details: Karachi, September 12, 2024 â€“ The National Clearing Company of Pakistan Limited (NCCPL) announced on Thursday that it will collect Capital Gain Tax (CGT) from clearing members of the stock market on Monday, September 23, 2024. This collection pertains to the capital gains realized on the disposal of shares at the Pakistan Stock Exchange (PSX) during the period from July 1, 2024, to July 31, 2024. In its official statement, the NCCPL urged all clearing members to ensure the availability of the requisite funds in their respective settling bank accounts by the deadline. â€œThe aggregate amount of CGT will be collected through the settling banks of the clearing members,â€ the announcement stated, adding that detailed reports and necessary information for the specified period have already been made available through the CGT System. Commodity Contracts and Mutual Funds In addition to stock market transactions, the NCCPL will also be collecting CGT arising from the trading of future commodity contracts at the Pakistan Mercantile Exchange (PMEX) for the same periodâ€”July 1 to July 31, 2024. The collection for this sector is also scheduled for September 23, 2024, and relevant reports have been shared with the concerned parties. Moreover, the NCCPL confirmed that the CGT arising from the redemption of units in open-end mutual funds during the aforementioned period has also been finalized. Clearing members, PMEX, and mutual fund operators have been asked to verify investor-wise capital gain or loss and the corresponding tax details through the available reports and downloads from the CGT System. Ensuring Compliance The NCCPL emphasized the importance of compliance with the collection requirements, warning that any failure to collect or remit the CGT in full would result in appropriate actions under the relevant rules and NCCPL regulations. Clearing members and participants in the PSX and PMEX are encouraged to review all investor-specific details of capital gains or losses and ensure the timely submission of taxes. This announcement follows a routine practice of collecting CGT from financial market participants, but it serves as an important reminder for stakeholders to ensure timely payments and compliance to avoid any penalties or regulatory actions. Looking Ahead As the deadline approaches, stock market participants, mutual fund operators, and commodity traders are expected to meet their obligations, ensuring smooth tax collection. The NCCPLâ€™s consistent oversight and transparent reporting through the CGT system are designed to facilitate this process, providing investors and clearing members with the necessary tools to verify their tax liabilities.

Date: 2024-09-12

Details: Karachi, September 12, 2024 â€“ The Federal Board of Revenue (FBR) has officially announced the tax rates for the registration or transfer of ownership of motor vehicles for the tax year 2024-25. These rates, notified under Section 231B(2) of the Income Tax Ordinance, 2001, apply differently to individuals on the Active Taxpayers List (ATL) and those not on the list (non-ATL), offering incentives for tax compliance. Vehicle Registration Tax Rates for TY 2024-25 The FBR has categorized vehicles based on engine capacity, with varying tax rates for those registered under ATL and non-ATL. Below are the detailed tax rates: 1. Vehicles with engine capacity up to 850 cc: o ATL: No tax o Non-ATL: No tax 2. Vehicles with engine capacity between 851 cc and 1000 cc: o ATL: Rs 5,000 o Non-ATL: Rs 15,000 3. Vehicles with engine capacity between 1001 cc and 1300 cc: o ATL: Rs 7,500 o Non-ATL: Rs 22,500 4. Vehicles with engine capacity between 1301 cc and 1600 cc: o ATL: Rs 12,500 o Non-ATL: Rs 37,500 5. Vehicles with engine capacity between 1601 cc and 1800 cc: o ATL: Rs 18,750 o Non-ATL: Rs 56,250 6. Vehicles with engine capacity between 1801 cc and 2000 cc: o ATL: Rs 25,000 o Non-ATL: Rs 75,000 7. Vehicles with engine capacity between 2001 cc and 2500 cc: o ATL: Rs 37,500 o Non-ATL: Rs 112,500 8. Vehicles with engine capacity between 2501 cc and 3000 cc: o ATL: Rs 50,000 o Non-ATL: Rs 150,000 9. Vehicles with engine capacity above 3000 cc: o ATL: Rs 62,500 o Non-ATL: Rs 187,500 Special Cases For vehicles where engine capacity is not applicable, such as electric vehicles or vehicles valued at Rs 5 million or more, the FBR has set a flat rate for tax collection. In these cases, the tax rate is Rs 20,000. Additionally, the FBR has introduced a depreciation factor for older vehicles. For each year that passes from the date of first registration in Pakistan, the applicable tax rate will be reduced by 10%. This policy encourages the registration of older vehicles by reducing the tax burden as the vehicle ages. Incentives for ATL Compliance The significant disparity between tax rates for ATL and non-ATL individuals serves as an incentive for taxpayers to maintain active tax compliance. Those on the ATL can enjoy significantly reduced rates, often paying only one-third of the tax rate compared to those who are not on the list. Conclusion The FBRâ€™s latest tax rates for vehicle registration and transfer of ownership in the 2024-25 tax year offer clear benefits to those compliant with tax regulations, while imposing higher costs on non-compliant individuals. Vehicle owners are advised to review their tax status and ensure their inclusion on the ATL to benefit from the reduced rates when registering or transferring vehicle ownership in the upcoming tax year.

Date: 2024-09-12

Details: Karachi, September 12, 2024 â€“ The Federal Board of Revenue (FBR) has officially announced the tax rates for the registration or transfer of ownership of motor vehicles for the tax year 2024-25. These rates, notified under Section 231B(2) of the Income Tax Ordinance, 2001, apply differently to individuals on the Active Taxpayers List (ATL) and those not on the list (non-ATL), offering incentives for tax compliance. Vehicle Registration Tax Rates for TY 2024-25 The FBR has categorized vehicles based on engine capacity, with varying tax rates for those registered under ATL and non-ATL. Below are the detailed tax rates: 1. Vehicles with engine capacity up to 850 cc: o ATL: No tax o Non-ATL: No tax 2. Vehicles with engine capacity between 851 cc and 1000 cc: o ATL: Rs 5,000 o Non-ATL: Rs 15,000 3. Vehicles with engine capacity between 1001 cc and 1300 cc: o ATL: Rs 7,500 o Non-ATL: Rs 22,500 4. Vehicles with engine capacity between 1301 cc and 1600 cc: o ATL: Rs 12,500 o Non-ATL: Rs 37,500 5. Vehicles with engine capacity between 1601 cc and 1800 cc: o ATL: Rs 18,750 o Non-ATL: Rs 56,250 6. Vehicles with engine capacity between 1801 cc and 2000 cc: o ATL: Rs 25,000 o Non-ATL: Rs 75,000 7. Vehicles with engine capacity between 2001 cc and 2500 cc: o ATL: Rs 37,500 o Non-ATL: Rs 112,500 8. Vehicles with engine capacity between 2501 cc and 3000 cc: o ATL: Rs 50,000 o Non-ATL: Rs 150,000 9. Vehicles with engine capacity above 3000 cc: o ATL: Rs 62,500 o Non-ATL: Rs 187,500 Special Cases For vehicles where engine capacity is not applicable, such as electric vehicles or vehicles valued at Rs 5 million or more, the FBR has set a flat rate for tax collection. In these cases, the tax rate is Rs 20,000. Additionally, the FBR has introduced a depreciation factor for older vehicles. For each year that passes from the date of first registration in Pakistan, the applicable tax rate will be reduced by 10%. This policy encourages the registration of older vehicles by reducing the tax burden as the vehicle ages. Incentives for ATL Compliance The significant disparity between tax rates for ATL and non-ATL individuals serves as an incentive for taxpayers to maintain active tax compliance. Those on the ATL can enjoy significantly reduced rates, often paying only one-third of the tax rate compared to those who are not on the list. Conclusion The FBRâ€™s latest tax rates for vehicle registration and transfer of ownership in the 2024-25 tax year offer clear benefits to those compliant with tax regulations, while imposing higher costs on non-compliant individuals. Vehicle owners are advised to review their tax status and ensure their inclusion on the ATL to benefit from the reduced rates when registering or transferring vehicle ownership in the upcoming tax year.

Date: 2024-09-12

Details: Karachi, September 12, 2024 â€“ The Federal Board of Revenue (FBR) has announced that individuals and organizations making charitable donations during the tax year 2024-25 will be eligible to claim tax credits under the Income Tax Ordinance, 2001. This provision, outlined in Section 61 of the Ordinance, allows taxpayers to reduce their tax liability based on contributions made to specific educational, healthcare, and non-profit organizations. The FBR, in its updated version of the Income Tax Ordinance as of June 30, 2024, reiterated that the tax credit for charitable donations will remain applicable for the tax year 2024-25. This initiative is designed to incentivize philanthropy and provide financial relief to individuals and companies supporting worthy causes across Pakistan. Eligibility for Tax Credit Under Section 61 of the Income Tax Ordinance, 2001, a taxpayer is entitled to a tax credit for donations made to: 1. Educational Boards and Universities: Donations made to any board of education or university established by federal or provincial law are eligible for the tax credit. 2. Government-Run Educational Institutions and Hospitals: Contributions to educational institutions, hospitals, or relief funds established or managed by the Federal Government, Provincial Government, or Local Government are included in the eligible donations. 3. Non-Profit Organizations: Donations to non-profit organizations that meet the criteria under Section 100C of the Ordinance, as well as entities listed in the Thirteenth Schedule of the Income Tax Ordinance, are also eligible. Computation of Tax Credit The amount of tax credit a taxpayer can claim is determined by a specific formula, which calculates the credit based on the personâ€™s taxable income and the value of the donations made during the year. The formula for computing the tax credit is as follows: (A/B)Ã—C Where: â€¢ A is the tax assessed to the individual before the tax credit is applied. â€¢ B is the taxpayerâ€™s taxable income for the year. â€¢ C is the lesser of: o The total amount of donations (including the fair market value of any property given), or o A fixed percentage of the taxable income: ï‚§ 30% for individuals and associations of persons. ï‚§ 20% for companies. The law provides additional guidelines for donations made to associates. In such cases, the tax credit is capped at a lower rate: 15% for individuals and associations of persons, and 10% for companies. Property Donations and Crossed Cheques The law also specifies that when donations are made in the form of property, the fair market value of the property at the time it is donated will be used to calculate the tax credit. For cash donations to be eligible, the payment must be made through a crossed cheque drawn on a bank, ensuring a traceable and verifiable transaction. FBRâ€™s Role in Monitoring and Approval The FBR retains the authority to regulate the procedure for granting approval for eligible organizations under Section 2(36)(c) of the Ordinance. This ensures that the organizations benefiting from these donations meet the necessary criteria and that the tax credit is only claimed for legitimate contributions. Encouraging Charitable Giving The provision of tax credits for charitable donations continues to play a significant role in encouraging philanthropic efforts across Pakistan. By offering financial incentives, the FBR aims to boost contributions to educational, healthcare, and non-profit sectors, helping to foster a culture of giving. The government, through this policy, seeks to not only support organizations working for the welfare of society but also provide relief to taxpayers contributing to these causes. Taxpayers are encouraged to review their donations and ensure they meet the requirements set out under the Income Tax Ordinance to take full advantage of this beneficial scheme for the tax year 2024-25.

Date: 2024-09-12

Details: Karachi, September 12, 2024 â€“ The Federal Board of Revenue (FBR) has planned a comprehensive crackdown on individuals who are registered as active taxpayers but have failed to contribute any taxes. This decisive move is driven by the need to address a growing shortfall in revenue collection and aims to boost government funds to meet fiscal demands. According to FBR sources, the agency has identified around two million â€œnil filersâ€ among the six million registered taxpayers. These individuals file tax returns indicating no taxable income, yet many of them are suspected of earning substantial incomes. To combat this tax evasion, the FBR is preparing to implement severe punitive measures, which could include freezing bank accounts, restricting the purchase of properties and vehicles, and even disconnecting utility services for repeat offenders. One of the major proposals put forward by the FBR is the categorization of non-payers into three tiers based on the severity of their tax evasion. This would allow for targeted actions, ensuring that the consequences are proportionate to the level of evasion. For instance, individuals who submit incorrect or incomplete returns could face a hefty fine of up to Rs1 million. However, such measures would need parliamentary approval through either a mini-budget or an ordinance to be enforced. Those who fail to file any returns at all will face the harshest penalties, including frozen bank accounts and restrictions on purchasing high-value items like real estate or vehicles. The FBR is also considering disconnecting electricity and gas services for those evading taxes between Rs0.5 million and Rs1 million. These actions reflect a serious attempt by the government to close loopholes and address the prevalent culture of tax evasion in Pakistan. To further enhance enforcement, the FBR is looking to implement advanced technological solutions, including artificial intelligence (AI) and third-party monitoring. By increasing transparency and using AI to audit returns, the FBR hopes to identify discrepancies more effectively and crack down on inaccurate tax filings. The urgency of these measures stems from a substantial tax shortfall of over Rs220 billion in the first quarter of the current fiscal year. The government had set an ambitious annual target of Rs12,970 billion, and missing this goal could have serious repercussions. The International Monetary Fund (IMF) has already been closely monitoring Pakistanâ€™s revenue collection efforts as part of the countryâ€™s financial assistance program, and a continued shortfall may lead to further pressure from the IMF for additional taxation measures. In response to these challenges, the FBR has made it clear that instead of imposing additional taxes on compliant taxpayers, it will focus on penalizing those who are evading their financial responsibilities. These measures are seen as critical steps to ensure that all citizens pay their fair share, thereby reducing the burden on the economy and helping Pakistan meet its fiscal goals.

Date: 2024-09-06

Details: Karachi, September 6, 2024 – The Federal Board of Revenue (FBR) has announced updated income tax rates on payments made for goods and services under Section 153 of the Income Tax Ordinance, 2001. These rates, which have been issued for the tax year 2024-25, differentiate between individuals and entities listed on the Active Taxpayers List (ATL) and those who are not. The withholding tax card recently released by the FBR outlines specific rates based on the nature of the goods or services provided, with significantly higher taxes imposed on non-ATL individuals and companies. Key Rates on Sales of Goods: • For the sale of rice, cotton seed, or edible oils, the tax rate is 1.5% for ATL entities and 3% for non-ATL. • On the sale of goods via toll manufacturing (companies), the rate is 9% for ATL and 18% for non-ATL. • For the sale of goods (other than toll manufacturing for companies), ATL members face a 5% tax rate, while non-ATL pay 10%. • In the case of toll manufacturing for non-company entities, the rate jumps to 11% for ATL and 22% for non-ATL. • For the sale of goods not involving toll manufacturing for non-company entities, ATL taxpayers pay 5.5%, whereas non-ATL taxpayers face 11%. Key Rates on Services: • For certain services, the rate is 4% for ATL and 8% for non-ATL. • For services other than those specifically listed, companies face a 9% rate for ATL and 18% for non-ATL. Non-company entities pay 11% if on the ATL and 22% if off it. • Payments made to electronic and print media for advertising services are taxed at 1.5% for ATL and 3% for non-ATL. Sportspersons are subject to a 10% tax rate if listed on the ATL, which rises to 20% for those who are not. For companies, the tax on other types of payments is 7.5% for ATL members and 15% for non-ATL, while other cases face 8% for ATL and 16% for non-ATL. Under Section 153(2), the tax rate for ATL taxpayers is set at 1%, while non-ATL individuals and entities must pay 2%. These new tax rates aim to encourage compliance with tax regulations, especially by incentivizing taxpayers to remain on the ATL, ensuring they benefit from lower tax obligations.

Date: 2024-09-06

Details: LAHORE: The tax department has failed to object to adjustment of unverified refund towards current year’s liability. An assessment officer of Corporate Tax Office (CTO) had objected to the adjustment of previous year refund towards the current year’s tax liability. The assessment officer had observed that the taxpayer, a poultry feed manufacturer, had wrongfully adjusted unverified refund of previous year towards the current year’s tax liability. This was termed as mistake warranting rectification under the law. Accordingly, he issued notice to the taxpayer for explanation. However, the taxpayer couldn’t furnish reply to the notice, followed by passing of the controversial order by the assessment officer. In his appeal before the Commission, the taxpayer contended that the adjustment was as per rules as well as established practice. He said the officer of Inland Revenue had failed to establish the existence of mistake apparent from record in the self-assessment order. He further explained that adjustment of refund was as per format of the return of total income prescribed under the Income Tax Rules, 2002 and disallowance of adjustment without proving its admissibility in relevant tax year was illegal. According to the taxpayer, there was a column under the head of computation with description ‘refund adjustment of other year(s) against demand of this year’. He had made the adjustment in question under this column, as there was no requirement of additional documentation for making the adjustment. He maintained that unless refund claimed by a taxpayer is found inadmissible after due verification under the law, the same cannot be disallowed merely on basis that it was unverified. He said the department has neither disputed tax overpaid for preceding year nor was there any verification process employed by the department to declare it is inadmissible. He further said that the observation of the department that refund is only due when the Commissioner is satisfied that tax has been overpaid and an adjustment is due as per law is misconceived because such provision of law becomes relevant where issuance or adjustment of refund is made by the department, and not by the taxpayer. However, the Commissioner Appeals rejected the appeal, but his order could not sustain at the higher appellate forums. Copyright Business Recorder, 2024

Date: 2024-09-06

Details: Karachi, September 6, 2024 – The Federal Board of Revenue (FBR) has clarified the provisions regarding deductions for intangibles under the Income Tax Ordinance, 2001. In its latest update, issued until June 30, 2024, the FBR has outlined the procedures and rules for the amortization of intangible assets, providing a clear framework for taxpayers. Section 24 of the Income Tax Ordinance, 2001, governs the deduction of intangibles. According to the FBR, the amortization deduction is available to businesses for intangible assets that are used to generate income chargeable to tax and that have a useful life exceeding one year. The rules are designed to ensure that businesses properly account for and deduct the cost of intangible assets over time, rather than all at once. Key Provisions under Section 24 1. Eligibility for Deduction: Taxpayers are entitled to an amortization deduction for intangibles used wholly or partially in a tax year to derive income from business. However, this deduction is only applicable if no other section of the Income Tax Ordinance provides a full deduction for the cost of the intangible in the same tax year. 2. Amortization Formula: The amortization deduction is calculated by dividing the cost of the intangible by its normal useful life in years. If the intangible’s useful life is not determinable, the law assumes a default useful life of 25 years. 3. Partial Use: In cases where the intangible is used only partly for generating business income, the deduction is adjusted accordingly to reflect the proportion of the asset used for business purposes. Similarly, if the intangible is not used for the entire tax year, the deduction is prorated based on the number of days the intangible was in use. 4. Maximum Deduction: The total amount of deductions allowed cannot exceed the actual cost of the intangible asset, ensuring that businesses do not claim more than what they invested in acquiring or creating the intangible. 5. Disposal of Intangibles: Upon disposal of an intangible, no further amortization deduction is allowed for that year. If the proceeds from the sale exceed the written-down value of the intangible, the excess is treated as business income and is chargeable to tax. Conversely, if the proceeds are less than the written-down value, the shortfall is deducted from the taxpayer’s business income. 6. Determination of Written-Down Value: The written-down value at the time of disposal is calculated as the original cost of the intangible, reduced by the cumulative deductions claimed over the years. This ensures that the remaining value of the intangible is appropriately accounted for in the taxpayer’s financial records. 7. Definition of Intangibles: The ordinance broadly defines “intangibles” to include patents, inventions, copyrights, trademarks, scientific knowledge, software, franchises, intellectual property, and other rights or assets that provide a benefit for more than one year. Notably, self-generated goodwill and accounting adjustments are excluded from the definition. This section of the law emphasizes a structured approach to handling intangible assets for tax purposes, helping businesses manage their finances more efficiently while complying with the tax regulations. By providing detailed guidelines, the FBR aims to foster transparency in how businesses report and deduct the value of intangibles, contributing to a more streamlined tax collection process.

Date: 2024-09-05

Details: Karachi, September 5, 2024 – The Federal Board of Revenue (FBR) has officially notified a significant tax increase for individuals earning profit from bank deposits but who are not listed on the Active Taxpayers List (ATL). The tax rate for these non-ATL individuals has been set at 35%, a substantial hike from the rate applied to ATL members. The FBR has updated its withholding tax card for the tax year 2024-25, outlining the new rates for various forms of profit on debt under Section 151 of the Income Tax Ordinance, 2001. According to the notification, profits from bank deposits will be subject to different tax rates depending on whether the taxpayer is included in the ATL or not. For individuals and entities listed on the ATL, the tax rate remains at 15%. However, non-ATL individuals will be subject to a much higher rate of 35%, more than double the standard rate. This significant discrepancy is part of the FBR’s efforts to encourage taxpayers to ensure their inclusion on the ATL by filing their tax returns on time and regularly. The FBR also elaborated on the tax treatment of profit on debt generated through Sukuk investments by Special Vehicle Purpose (SPV) entities or companies. The tax rate structure varies across different types of taxpayers: • Companies: 25% for ATL members, but 35% for non-ATL members. • Individuals or Associations of Persons (AOPs) earning more than Rs. 1 million: 12.5% for ATL members, 35% for non-ATL. • Individuals or AOPs earning less than Rs. 1 million: 10% for ATL members, 35% for non-ATL. These measures are in line with the FBR’s strategy to increase tax compliance and broaden the tax net. By setting higher tax rates for those outside the ATL, the government aims to incentivize individuals and companies to submit their tax returns on time, thus contributing to national revenue growth. This notification comes as part of broader reforms under the Income Tax Ordinance, 2001, which seeks to streamline tax procedures and ensure that non-compliant taxpayers face higher liabilities. The FBR’s withholding tax regime plays a critical role in ensuring the collection of revenue at the source, especially from non-ATL individuals who may otherwise evade formal taxation. Taxpayers are encouraged to verify their status on the ATL and ensure timely filing of their returns to avoid the significantly higher tax rate.

Date: 2024-09-05

Details: Karachi, September 5, 2024 – The Federal Board of Revenue (FBR) has explained the deduction of the initial allowance for eligible depreciable assets under the Income Tax Ordinance (ITO), 2001, which has been updated as of June 30, 2024. The deduction falls under Section 23 of the Ordinance, which outlines specific provisions for businesses regarding tax calculations. According to the FBR, the initial allowance is applicable to taxpayers who place an eligible depreciable asset into service in Pakistan for the first time during a tax year. This deduction is granted on the condition that the asset is being used by the taxpayer for business purposes for the first time, or in the year when commercial production begins, whichever occurs later. The purpose of this allowance is to incentivize businesses to invest in new assets, fostering economic growth. The amount of the initial allowance is calculated by applying the specified rate, as mentioned in Part II of the Third Schedule of the Ordinance, to the cost of the asset. To determine the cost of the asset, the rules laid out in Section 76 are applied. This ensures uniformity in how the costs of assets are computed across various businesses and industries. The ordinance further clarifies that certain financial institutions, such as leasing companies, investment banks, modarabas, scheduled banks, and development finance institutions, are entitled to claim this deduction on leased assets. However, the deduction in these cases is allowed only against the rental income derived from leasing such assets, adding a layer of specificity for financial sector entities. Additionally, the FBR explains that not all assets qualify for the initial allowance. Excluded from eligibility are: • Road transport vehicles, unless they are used for hire. • Furniture and fittings. • Any plant or machinery previously used in Pakistan. • Plant or machinery for which a deduction has already been granted under other provisions of the ordinance. • Immovable property or any structural improvements made to immovable property. By delineating these exclusions, the FBR ensures that the allowance is granted only for new, productive investments that genuinely contribute to the economic activities within the country. This measure also prevents businesses from double-dipping by claiming deductions on assets that have already received tax benefits. This clarification by the FBR aims to facilitate businesses in planning their tax obligations and making informed decisions regarding asset investments, thereby contributing to overall economic development.

Date: 2024-09-05

Details: Islamabad, September 5, 2024 – The Federal Board of Revenue (FBR) on Thursday announced new rules for the collection of Federal Excise Duty (FED) on property transactions. The updated regulations were formalized through SRO No. 1376(I)/2024, amending the Federal Excise Rules, 2005, and introducing a new chapter titled “Excise Duty on Property.” Under the new rules, developers and builders are mandated to collect FED at different rates based on the buyer’s tax status and compliance. The rules stipulate that: 1. 3% Duty: Applicable if the buyer is listed on the active taxpayer list maintained under Section 181A of the Ordinance at the time of property acquisition. 2. 5% Duty: Applicable if the buyer has not filed an income tax return by the due date, as specified in Rule IA of the Tenth Schedule of the Ordinance. 3. 7% Duty: Applicable if the buyer is not listed on the active taxpayer list at the time of acquisition. The collected FED must be credited to the Federal Government on the same day via a computerized payment receipt (CPR) or SWAPS payment receipt (SPR). Additionally, developers or builders are required to submit a monthly statement to the Commissioner using Form ‘B’. If the duty is not paid or is short-paid by the developer or builder, the Officer Inland Revenue responsible for the developer or builder will take necessary actions to collect the unpaid or short-paid amount under Section 14 of the Act. A default surcharge, as specified in Section 8 of the Federal Excise Act, will also be levied for the period from when the duty was due until it is paid. However, if it is established that the duty, which was supposed to be collected by the developer or builder, has been paid by the buyer, no recovery will be made from the developer or builder. In such cases, the developer or builder will be liable to pay only the default surcharge, calculated from the date the duty was due to the date it was actually paid. The introduction of these rules aims to streamline the collection of FED on property transactions and ensure compliance among developers and builders. The FBR’s move is expected to enhance revenue collection and enforce stricter adherence to tax regulations within the real estate sector.

Date: 2024-09-05

Details: Islamabad, September 5, 2024 – The Federal Board of Revenue (FBR) has imposed the penalty of dismissal from service upon Fayzan Atif, a Customs Inspector (BS-16) from the Collectorate of Customs (Enforcement), Sargodha. The dismissal stems from a charge of “misconduct” under the Civil Servants (Efficiency & Discipline) Rules, 2020. According to an FBR statement, disciplinary proceedings were initiated after Atif failed to report for duty following his transfer in October 2023. Despite submitting multiple requests for medical leave, the Collectorate did not approve his absence. He was instructed to report for a medical evaluation, which he failed to do, leading to his unauthorized absence. The matter escalated when Atif continued to disregard official orders and remained absent even after being issued an explanation memo and a charge sheet. An inquiry into the matter was conducted by Ms. Farah Farooq, a PCS officer (BS-19), who initially recommended a minor penalty of “censure.” However, following a thorough review of the case, including an online personal hearing on August 20, 2024, the FBR determined that the gravity of Atif’s misconduct warranted a stricter penalty. Atif, during his hearing, failed to provide any substantial evidence to support his claims of innocence. The FBR’s decision to impose the major penalty of dismissal was based on Atif’s continued defiance of official orders, refusal to attend his duties, and failure to cooperate with the disciplinary process. The inquiry revealed that despite being instructed to appear before a Civil Surgeon to validate his medical leave, Atif did not comply, further undermining his defense. The final ruling, issued by the Member (Admn/HR) of the FBR, overruled the inquiry officer’s recommendation, determining that Atif’s actions constituted a clear breach of conduct. The dismissal marks a significant enforcement of discipline within the customs department, sending a strong message against misconduct. Atif’s dismissal underscores the FBR’s commitment to maintaining a disciplined workforce and upholding the rules governing civil servants in Pakistan. The ruling comes amid efforts by the FBR to ensure adherence to standards across its departments, particularly in key enforcement areas such as customs operations.

Date: 2024-09-05

Details: ISLAMABAD: A research study has revealed that the government of Pakistan can generate at least Rs79.61 billion annually by taxing absentee landlords in Pakistan. Irfan Ahmad Baig from MNS University of Agriculture Multan; while sharing the findings of his research study, on the concluding day of the 4th RASTA Conference 2024, organized by Pakistan Institute of Development Economics (PIDE), here on Wednesday. Baig, while discussing the complexities of taxing rental income in the agriculture sector, stated that the sector can raise substantial revenue for public services and equitable growth, saying that reforms are needed for better tax collection and compliance, especially for rental incomes. Baig in his presentation shed light on the skewed land distribution in Pakistan, where a small percentage of large landowners hold a significant portion of the land. He argued for comprehensive agrarian tax reform to address this disparity and suggested that taxing absentee landlords could be an effective way to generate revenue for public services and infrastructure development. Khair Muhammad Kakar from UET Khuzdar presented a comprehensive analysis of the impact of government policies on olive production in Pakistan. His research highlighted that while government initiatives have promoted olive cultivation, several challenges persist, such as limited technical knowledge among farmers, inadequate access to quality plant materials, and insufficient processing facilities. Kakar emphasized the need for consistent and targeted policy interventions to overcome these barriers and enhance olive production, particularly, in regions like Balochistan, which show considerable potential. Khair Muhammad Kakar explored critical topics such as the impact of government policies on olive production in Pakistan, the political economy of wheat subsidy and food security in Gilgit-Baltistan, and taxing rental income in agriculture. Saranjam Muhammad from Karakoram International University, Gilgit, provided an in-depth examination of the political economy of wheat subsidies and food security in Gilgit-Baltistan. His study revealed that despite the region receiving substantial wheat subsidies since the 1970s, food insecurity remains a significant issue, affecting over 50 per cent of the population. Baig’s analysis identified inefficiencies in the subsidy distribution, with wealthier households benefiting disproportionately. He recommended a targeted subsidy approach, improved transparency in distribution, and support for local agriculture to address these inefficiencies and enhance food security in the region. Dr. Durre Nayab, Director of Research at PIDE Islamabad, presented the findings from the Pakistan Panel Household Survey (PPHS) 2024 Round. She said that PPHS 2024 marks a significant milestone in socio-economic research, offering comprehensive insights into the dynamic shifts within Pakistan’s households over the past decades. Initiated by the Pakistan Institute of Development Economics (PIDE) with financial backing from the World Bank in 2001, the survey has evolved through various rounds, with the 2024 iteration expanding its urban representation and covering 14 additional districts. For the first time, the survey includes digital data collection methods, ensuring a broader scope and more detailed data on education, employment, household assets, and new metrics such as financial literacy and care work employment. The PPHS 2024 also introduced new modules, focusing on CNIC/B-form registrations, eating-out expenditures, and subjective welfare, making it one of the most extensive panel surveys ever conducted in Pakistan. This landmark survey is vital for policymakers, economists, and researchers, providing critical data to understand the socio-economic transitions in the country. With a robust sample of over 8,500 households, the PPHS 2024 allows for deeper analysis of urban and rural dynamics, offering a clearer picture of poverty, labor mobility, and household consumption patterns. The findings will help shape future policies aimed at addressing social inequality, employment trends, and household security, underscoring the importance of long-term data tracking in socio-economic development. Ayezza Sattar talking on “Fiscal Management” presented a case study on the governance structure within the Ministry and its public sector entities. Her study highlighted significant flaws in the administrative framework, including a lack of cohesion among the various wings of the Ministry and issues related to political interference and intellectual integrity. Sattar called for amendments to the Rules of Business and a redistribution of work within the Ministry to address these issues and improve governance outcomes. Asadullah Khan from Karakoram International University, Gilgit, focused on the governance of public sector projects in Gilgit-Baltistan, particularly, in the power sector. His analysis revealed systemic issues in project management, including poor stakeholder management, ineffective governance mechanisms, and bureaucratic delays. Khan recommended the adoption of e-procurement, better planning, and robust risk management strategies to improve the performance of these projects. Sobia Khurram from the University of the Punjab, Lahore, explored the barriers to the adoption of tax e-filing in Pakistan. Copyright Business Recorder, 2024

Date: 2024-09-05

Details: Karachi, September 5, 2024 – The Federal Board of Revenue (FBR) is contemplating a halt on tax refunds for the month of September 2024 in a bid to meet its ambitious tax collection targets, sources said. This move comes in the wake of a significant shortfall in revenue during the first two months of the current fiscal year. According to sources within the FBR, the national tax agency missed its collection target by Rs 98 billion for July and August 2024. The net collection during this period amounted to Rs 1,456 billion, falling short of the target of Rs 1,554 billion. A substantial portion of this shortfall has been attributed to the issuance of tax refunds, which surged during these two months. The FBR disbursed refunds totaling Rs 132 billion during July and August of the current fiscal year, marking a 44% increase compared to Rs 92 billion issued during the same period last year. Insiders noted that the outgoing FBR chairman authorized these substantial refunds prior to his resignation. However, the FBR is legally obligated to issue refunds to taxpayers, a duty that has now placed additional strain on the agency’s revenue targets. In light of the revenue shortfall, the FBR may suspend further refunds to ensure it meets the monthly and quarterly tax targets for the quarter ending September 30, 2024. Failure to achieve these targets could lead to an increase in tax rates for the remainder of the fiscal year, as the government seeks to cover the deficit. Meeting the revenue collection goals is crucial for Pakistan to secure a $7 billion bailout package from the International Monetary Fund (IMF). The suspension of refunds, while controversial, may be seen as a necessary step to align with the IMF’s stringent fiscal requirements. As the FBR navigates this challenging fiscal landscape, the decision to pause refunds could have far-reaching implications for businesses and taxpayers, potentially leading to delays in receiving due payments and impacting cash flow for many. The coming weeks will be critical as the FBR strives to balance its legal obligations with the pressing need to meet fiscal targets.

Date: 2024-09-04

Details: Karachi, September 4, 2024 – The Federal Board of Revenue (FBR) has provided a comprehensive explanation on the deduction of depreciation against tax liability for the tax year 2024-25, a critical aspect for businesses managing their assets and tax obligations. This clarification, as per the updated Income Tax Ordinance, 2001, effective until June 30, 2024, outlines the intricacies of Section 22, which governs the depreciation deductions. Understanding Section 22 of the Income Tax Ordinance Section 22 of the Income Tax Ordinance delineates the conditions and methodology for claiming depreciation on depreciable assets. These assets, which are used in a taxpayer’s business during the tax year, are eligible for depreciation deductions, helping to reduce the taxable income. 1. Eligibility and Calculation of Depreciation: According to the FBR, depreciation is allowed on assets that are used in a business during the tax year. The depreciation deduction is calculated by applying the specified rate from Part I of the Third Schedule to the written down value (WDV) of the asset at the beginning of the year. This WDV is adjusted based on the asset’s cost and previous depreciation deductions. 2. Partial Business Use: If an asset is used partially for business and partially for other purposes, the depreciation deduction is limited to the portion attributable to business use. This ensures that only the business-related depreciation impacts the taxable income. 3. Written Down Value Adjustments: The WDV of an asset at the beginning of the tax year is crucial. For newly acquired assets, the WDV is the cost reduced by any initial allowance under Section 23. For older assets, it’s the cost reduced by all prior depreciation deductions. This calculation maintains the accuracy of asset valuation over time. Special Considerations and Provisions 1. Assets Used in Exempt Businesses: Depreciation is considered to have been allowed even if the business was exempt from tax in previous years. Post-exemption, the WDV is recalculated by reducing the total depreciation, ensuring consistency in the asset’s valuation. 2. Disposition of Assets: When a depreciable asset is disposed of during a tax year, depreciation for that year is not allowed. If the sale price exceeds the WDV, the excess is taxable as business income. Conversely, if the sale price is less, the shortfall is deductible, reducing the taxable income. 3. Depreciation Limits and Leasing Considerations: The cumulative depreciation allowed cannot exceed the asset’s cost. Special rules apply to leasing companies, investment banks, and similar entities, where depreciation is only deductible against lease income, ensuring that depreciation benefits align with business operations. 4. Passenger Transport Vehicles and Immovable Property: For passenger vehicles not used for hire, the depreciation cost is capped at PKR 7.5 million. The cost of immovable property excludes land, focusing only on structural improvements, which depreciate over time. 5. Export and Transfer of Assets: Assets exported or transferred out of Pakistan are treated as disposed of at their cost, effectively ceasing further depreciation deductions in Pakistan. Defining Depreciable Assets The FBR defines a depreciable asset as any tangible movable or immovable property, excluding unimproved land, with a useful life exceeding one year, that depreciates through normal wear and tear or obsolescence, and is used to generate taxable business income. This definition clarifies the types of assets eligible for depreciation, aiding businesses in tax planning. Conclusion Understanding and applying the rules of depreciation under the Income Tax Ordinance is essential for businesses to maximize their tax benefits. The detailed provisions in Section 22 offer a clear pathway for businesses to manage their depreciable assets effectively, ensuring compliance and optimal tax outcomes for the tax year 2024-25.

Date: 2024-09-04

Details: Islamabad – The Federal Board of Revenue (FBR) has initiated crucial discussions with traders to address concerns surrounding the advance tax under the Tajir Dost Scheme. The scheme, aimed at streamlining tax collection from business outlets and retail shops across the country, has met with resistance from the trading community, who are demanding significant changes to the current tax valuation tables. In a meeting held at the FBR House on Tuesday, a joint committee comprising members from both the FBR and the traders’ community reviewed the valuation tables that are being used to determine the fixed monthly advance tax. The meeting was attended by key FBR officials, including the Chairman, the Member Inland Revenue Policy, and the Member Inland Revenue (Operations). On the traders’ side, notable participants included Ajmal Baloch, President of All Pakistan Anjuman-e-Tajran, and other prominent leaders such as Kashif Chaudhry and Sharjeel Mir. The traders have expressed strong opposition to the existing valuation tables, urging the FBR to withdraw them. They argue that the current method of tax assessment is not only burdensome but also fails to reflect the ground realities of various businesses across different regions. In response, the FBR has asked the traders to propose alternative methods for tax collection that would be fair and feasible for both sides. During the meeting, both parties reviewed the valuation tables of different cities and took note of the amendments proposed by the committee. This collaborative approach is seen as a positive step towards finding a mutually agreeable solution. Chief Coordinator of the Tajir Dost Scheme, Naeem Mir, emphasized the importance of the scheme during a separate meeting with traders at the Central Secretariat on Tuesday. He stated that the Tajir Dost Scheme is a national project that must be implemented in letter and spirit, as the country’s economy heavily relies on tax collection. “There is no option other than implementing the Tajir Dost Scheme as the country cannot be run without collecting taxes,” Mir asserted. Mir acknowledged the challenges faced by traders in paying taxes and pointed out that, prior to the launch of the Tajir Dost Scheme, no viable tax collection mechanism was in place. He highlighted the need for consensus among stakeholders and expressed optimism about the scheme’s successful implementation. He further mentioned the introduction of the “Asaan” tax return form by the FBR, which offers an easy registration process for non-filer traders, urging them to take advantage of this opportunity. Mir concluded by stressing that the Prime Minister has directed the FBR to prioritize the justified demands of traders and to ensure they are fully facilitated, recognizing their essential role in the economy.

Date: 2024-09-04

Details: Karachi, September 4, 2024 – The Federal Board of Revenue (FBR) has imposed staggering tax rates of up to 70% on dividend income for individuals and entities not listed on the Active Taxpayers List (ATL) for the tax year 2024-25. This significant move, reflected in the updated withholding tax card, underscores the FBR’s intent to enforce compliance and penalize those outside the ATL. The FBR said that the rates, applicable under Section 150 of the Income Tax Ordinance, 2001, show a stark contrast between ATL and non-ATL taxpayers, further widening the financial implications for those not in compliance with tax regulations. The breakdown of the new tax rates on dividend income is as follows: • Independent Power Purchasers (IPPs): For ATL members, the tax rate is 7.5%. However, non-ATL entities will face a doubled rate of 15%. This rate applies specifically to dividends considered a pass-through item. • Mutual Funds, Real Estate Investment Trusts (REITs), and Other Categories: Individuals and entities on the ATL will continue to be taxed at 15%, while non-ATL taxpayers will encounter a significant hike, with the rate set at 30%. • Mutual Funds with Significant Debt Income: For mutual funds deriving 50% or more of their income from profit on debt, the tax rate is 25% for ATL participants. Non-ATL individuals will be subjected to a substantial 50% rate, doubling the burden. • REIT Scheme Special Purpose Vehicles (SPVs): Dividends received by a REIT scheme SPV will remain tax-exempt for both ATL and non-ATL entities. • Dividends from Other Special Purpose Vehicles: Dividends received from SPVs defined under the Real Estate Investment Trust Regulations, 2015, are taxed at 35% for ATL taxpayers, while non-ATL recipients will face a punitive 70% tax rate. • Companies with Exempt Income or Business Losses: For companies where no tax is payable due to income exemptions or carry-forward business losses, the tax rate stands at 25% for ATL entities and 50% for non-ATL entities. The FBR’s move is seen as a strict measure to ensure greater tax compliance and to discourage the avoidance of tax obligations. The significant difference in rates between ATL and non-ATL taxpayers highlights the advantages of being part of the ATL and serves as a warning to those who remain non-compliant. As the tax year progresses, the impact of these rates on dividend income, particularly for non-ATL entities, is expected to be substantial.

Date: 2024-09-04

Details: Karachi, September 4, 2024 – The Federal Board of Revenue (FBR) has released the salary tax card for the tax year 2024-25, offering a relief to salaried individuals by exempting annual incomes up to Rs 600,000 from income tax. This move, aimed at easing the financial burden on lower-income earners, is part of a broader set of tax reforms introduced by the FBR. According to the newly issued withholding tax card, individuals earning up to Rs 600,000 annually will not be liable to pay any income tax for the current fiscal year. For those earning above the exempted amount, the FBR has outlined a progressive tax structure: 1. Income Between Rs 600,000 and Rs 1.2 Million: Salaried individuals with an annual income exceeding Rs 600,000 but not exceeding Rs 1.2 million will be taxed at 5% on the amount above Rs 600,000. This means if your income is Rs 1 million, your tax liability will be Rs 20,000 (5% of Rs 400,000). 2. Income Between Rs 1.2 Million and Rs 2.2 Million: For those whose income falls between Rs 1.2 million and Rs 2.2 million, a fixed tax of Rs 30,000 will be applied, plus 15% on the amount exceeding Rs 1.2 million. For example, an income of Rs 1.5 million will incur a tax of Rs 75,000 (Rs 30,000 + 15% of Rs 300,000). 3. Income Between Rs 2.2 Million and Rs 3.2 Million: A fixed tax of Rs 180,000 will be levied on individuals earning between Rs 2.2 million and Rs 3.2 million, along with 25% on the amount exceeding Rs 2.2 million. For an income of Rs 2.5 million, the tax would be Rs 255,000 (Rs 180,000 + 25% of Rs 300,000). 4. Income Between Rs 3.2 Million and Rs 4.1 Million: Those earning between Rs 3.2 million and Rs 4.1 million will be taxed Rs 430,000 plus 30% on the amount exceeding Rs 3.2 million. An income of Rs 3.5 million, for instance, would attract a tax of Rs 520,000 (Rs 430,000 + 30% of Rs 300,000). 5. Income Above Rs 4.1 Million: Individuals with annual incomes exceeding Rs 4.1 million will face a fixed tax of Rs 700,000, plus 35% on the amount exceeding Rs 4.1 million. For example, an income of Rs 5 million would result in a tax liability of Rs 1,005,000 (Rs 700,000 + 35% of Rs 900,000). The above tax calculation is indicative. Taxpayers are advised to consult tax practitioners or visit official website of the FBR. The FBR has emphasized that employers are responsible for deducting the applicable tax from employees’ salaries before disbursing their pay. This new tax card is expected to streamline the tax collection process while providing relief to lower-income earners, ultimately contributing to a more equitable tax system.

Date: 2024-09-04

Details: Karachi, September 4, 2024 – The Federal Board of Revenue (FBR) has announced the import tax rates applicable during the tax year 2024-25, distinguishing between those listed in the Active Taxpayers List (ATL) and those not on the list. This move by the FBR aims to encourage tax compliance by offering favorable tax rates to those who are registered on the ATL, while imposing higher rates on non-ATL individuals and entities. According to the recently issued withholding tax card for tax year 2024-25, the FBR has specified different tax rates based on the category of goods being imported and the taxpayer’s status on the ATL. The tax rates are categorized under various parts of the 12th Schedule of the Income Tax Ordinance, 2001, reflecting the complexity and diversity of imported goods. For goods falling under Part-I of the 12th Schedule, the tax rate for ATL importers is set at 1%, while non-ATL importers will be subject to a 2% tax rate. This category generally includes essential goods that are critical for economic activities, making the tax rates relatively low. For goods under Part-II of the 12th Schedule, the tax rate is doubled. ATL importers will face a 2% tax, while non-ATL importers will be taxed at 4%. When these goods are imported by commercial importers, the rates increase further, with ATL importers paying 3.5% and non-ATL importers facing a 7% tax. This category often includes items that have a higher economic impact, hence the higher tax rates. Part-III of the 12th Schedule covers goods that are generally considered luxury or non-essential items. Here, ATL importers are subject to a 5.5% tax rate, while non-ATL importers will pay a hefty 11% tax. For commercial importers bringing in these goods, the rates are slightly higher at 6% for ATL and 12% for non-ATL. Manufacturers importing goods specified in SRO 1125 (I)/2011, dated December 31, 2011, will benefit from a 1% tax rate if they are on the ATL, whereas non-ATL manufacturers will pay a 2% tax. This provision is designed to support the manufacturing sector by providing lower tax rates to those who are compliant with tax regulations. Pharmaceutical products, which are essential for public health, are subject to a 4% tax rate for ATL importers and 8% for non-ATL importers. This distinction underscores the government’s intent to ensure affordable access to medicines while promoting tax compliance. The import of Completely Knocked Down (CKD) Kits for Electric Vehicles (EVs) is taxed at 1% for ATL and 2% for non-ATL, reflecting the government’s push towards promoting environmentally friendly transportation solutions. For mobile phones, the tax rates vary significantly depending on the model and its classification under the Pakistan Customs Tariff (PCT) codes. Under PCT 8517.1219, the tax ranges from Rs 70 to Rs 11,500 for ATL and Rs 140 to Rs 23,000 for non-ATL. For PCT 8517.1211, the rates range from Rs 0 to Rs 5,200 for ATL and Rs 0 to Rs 10,400 for non-ATL. The FBR’s differentiated tax rates serve as both an incentive for tax compliance and a measure to penalize those who remain outside the formal tax net. By imposing higher rates on non-ATL importers, the FBR aims to broaden the tax base and increase revenue, while providing relief to compliant taxpayers.

Date: 2024-09-03

Details: Islamabad, September 3, 2024 – The Federal Board of Revenue (FBR) is exploring the possibility of implementing a mini budget to address a significant revenue shortfall by the end of the current month. According to reliable sources, the FBR is planning to propose an increase in withholding tax rates to the federal government. This move is aimed at boosting revenue collection amid disappointing tax performance during the first two months of the fiscal year. If the FBR fails to meet its September target, the proposed tax hikes would be introduced through a supplementary Finance Bill. Withholding taxes account for over 70% of the total direct tax collection in Pakistan. While the government may not increase the standard sales tax rate, it is considering raising withholding tax rates by 1% to bridge the revenue gap. The FBR has faced a substantial shortfall of Rs 98 billion in tax collection during the first two months of the fiscal year. The net collection of Rs1,456 billion fell short of the assigned target of Rs1,554 billion for this period. Given the decline in import taxes and other factors, the FBR is likely to face a shortfall of nearly Rs 100 billion in September. The government’s planned autonomous growth of 18% in domestic taxes may be revised downward to 11% in the coming months due to the current economic situation. Sources within the FBR emphasized that harsh measures such as reprimanding senior tax officials or threatening transfers and postings would not be effective in increasing tax collection. They advocated for a more strategic approach, including digitization efforts to improve the monitoring of withholding taxes through the “SWAPS” system and addressing illegal sales tax adjustments through data analysis and verification. The implementation of a mini budget would mark a significant step by the government to address the revenue shortfall and ensure financial stability. However, the specific measures and their potential impact on the economy remain to be seen.

Date: 2024-09-02

Details: Karachi, September 2, 2024 – The Federal Board of Revenue (FBR) has suspended Ms. Shiraza Hameed, a Deputy Commissioner of the Inland Revenue Service (IRS), following allegations of issuing an illegal refund. This development marks a significant step in FBR’s efforts to ensure strict adherence to tax regulations and maintain the integrity of its operations. According to an official notification released by the FBR, the suspension was initiated after receiving a report from the Director General of the Directorate General of Intelligence & Investigation (Inland Revenue), Islamabad. The report detailed the issuance of an illegal refund, prompting immediate action from the competent authority. The Secretary Revenue Division/Chairman of FBR, exercising powers under Rule 5(1) of the Civil Servants (Efficiency & Discipline) Rules, 2020, ordered the suspension of Ms. Shiraza Hameed. As a BS-18 officer currently serving as the Deputy Commissioner-IR at the Large Taxpayers Office in Lahore, Ms. Hameed’s suspension is effective immediately and will last for a period of 120 days or until further orders, whichever is earlier. An official from the FBR stated that the organization is committed to taking decisive actions against any form of misconduct or negligence within its ranks. “The suspension of Ms. Shiraza Hameed is a clear indication of FBR’s zero-tolerance policy towards any violations of the law by its officers. We are determined to uphold the highest standards of professionalism and integrity in our operations,” the official said, requesting anonymity due to the sensitivity of the matter. The decision to suspend Ms. Hameed sends a strong message across the department, emphasizing the importance of adhering to the rules and regulations governing the country’s tax system. The FBR aims to ensure that all tax officers perform their duties with the utmost integrity and accountability. This move is part of a broader strategy to boost the morale of the department by demonstrating a firm stance against any actions that compromise the credibility of the tax system. As the investigation into the matter continues, the FBR has assured that it will take all necessary steps to ensure transparency and justice. Any further developments regarding Ms. Hameed’s case will be closely monitored, and appropriate actions will be taken based on the findings of the ongoing inquiry. The FBR’s swift response in this case underscores its commitment to maintaining public trust in its operations and reinforcing the principles of fairness and legality in tax administration.

Date: 2024-09-02

Details: ISLAMABAD: President Asif Ali Zardari has confirmed a landmark order issued by Federal Tax Ombudsman (FTO), who has directed the Federal Board of Revenue (FBR) to reprimand the officers who took the coercive measures (bank attachments recovery) during the pendency of appeal before the first appellate forum. It is learnt that a Gujranwala-based taxpayer, Usman Iqbal Aujla, through advocate Waheed Shahbaz Butt had filed a complaint against the maladministration by FBR functionaries to recover funds from his bank accounts without following due process of law. After comprehensive investigation and detailed hearings before the Adviser Rana Hassan Akhtar, a landmark order has been issued by the FTO Dr Asif Jah against the FBR functionaries involved in illegal tax recovery moves. FBR has challenged this order before the President Zardari has confirmed this order with additional observation that opportunity of hearing to officers be provided before taking action against them. When contacted Waheed Butt told that while recovery from the bank account of the taxpayer, the conduct of FBR officers was tantamount to maladministration and administrative excess in the discharge of duties were also the acts of maladministration, for which the forum of FTO is the only remedy available to the taxpayers of Pakistan. It is fundamental that all statutes be applied with fairness and justice, and public functionaries like FBR officers are constitutionally mandated to act in a just and fair manner. Every public functionary including FBR officers are obligated to adhere to the commands of the Constitution. Public functionaries are duty-bound to act in accordance with the law, Waheed Butt added. FTO recommended FBR to direct the CCIR concerned to reprimand the officer concerned who took the coercive measure in this case during the pendency of appeal before the CIR (Appeals), in clear violation of FBR’s own Circulars. The FBR should direct the Member-IR (Operations), to examine such cases across the country and to see whether instructions conveyed are being complied with and to take remedial action wherever required and issue warning to the tax functionaries involved in violation of said instructions, FTO ordered. Copyright Business Recorder, 2024

Date: 2024-09-01

Details: ISLAMABAD: Pakistan Polypropylene Woven Sacks Manufacturers Association has proposed to Finance Minister Muhammad Aurangzeb to alter tax laws to address the concerns of taxpayers and investors and revive their confidence and trust to increase tax collection. The association, in its letter to Finance Minister, pointed out problems and their digital solutions which are as follows: Automation of issuance of Withholding Income Tax Exemptions: At present, Section 159 empowers the Commissioner IR to issue withholding income tax exemptions u/s 153 and u/s 235. These unbridled discretionary powers are blatant violation of auto issuance of tax exemption in IRS, where commissioner fails to issue order within 15 days, under mandatory second proviso of Section 159. This anomaly can be solved by allowing the IRS system to automatically calculate the eligibility of taxpayer and issuing tax exemption certificates without any involvement of the Commissioner as data pertaining to advance tax and sales is readily available in existing ITMS system employed by the FBR. Implementation of electronic processing and auto issuance of tax refunds u/s 170A: The federal government in 2021 introduced provision u/s 170A in Income Tax ordinance 2001 for digital automation of tax refunds. The law, empowers the FBR to issue tax refunds to the taxpayers, without requiring refund application to the extent the tax credit is verifiable by the FBR computerized system. However, despite lapse of three years, no refund has been processed under section 170A. As a result, the income tax refunds are delayed by raising frivolous tax demands. While, under Section 170(4), the Commissioner is required to process the refund applications within 60 days. It is proposed that FBR should implement the auto tax refund mechanism envisaged u/s 170A in letter and spirit and discretionary powers of the Commissioner/IRS Officers for pick and choose the tax refund cases and processing of tax refunds may be done away with. By automating the systematic issuance of refunds, the transparency in tax system could be achieved. The backlash on corruption allegations whenever a refund is allowed has discouraged the taxmen to issue Refunds. End of misuse of assessment power under section 122(5A): It has been stated that the powers conferred by Section 122(5A) have always been misinterpreted and become a tool for harassment of taxpayers and deteriorated the concept of self-assessment envisaged in the Income Tax Ordinance. Under Section 122(5A) is Para-Materia to the Section 66A of Income Tax Ordinance 1979 envisages a revision by a superior assessing authority of an assessment already framed after audit or assessment. There is no provision of exercising revisionary powers unless primary review by way of an audit or assessment has been made. Therefore, the powers envisaged under section 122(1) & (4) and Section 177 for amendment in original/deemed assessment order, ipso facto cannot be exercised through Section 122(5) A is illegal. As per scheme of law, the amended assessment u/s 122 (of an original assessment order u/s 120) by way of an audit or definite information, can be further amended if there is an error which is prejudicial to the interest of revenue, as described u/s 122(5A) of the Ordinance. In order to remove misinterpretation of this provision, it is recommended that either an explanation clause may be inserted after Section 122(5A), stating that the provision of Section 122(5A) is only applicable to the assessment orders already amended u/s 122(1) & (4), subject to meeting of prescribed conditions. Or, the controversial Section 122(5A) may be omitted from the Act, as it would eliminate the anomalies. Reforms in adjudication framework: The recent amendments brought through Tax Laws Amendment Act 2024 in Income Tax Ordinance 2001 and Sales Tax Act 1990, have curtailed the adjudication hierarchy from two quasi-judicial bodies, ie, Commissioner/Collector Appeals and Appellate Tribunal, to only one. According to the new mechanism prescribed under section 126A, the taxpayer or tax officer, aggrieved by the Order of first Appellate form, ie, CIR-A or ATIR, has to file reference before the high court. The condition of heavy appeal/reference fee and payment of 30 percent of disputed demand to avail stay at High Court level amounts to curtailment of fundamental right of citizens. The pecuniary limits of hearing appeals at the levels of Commissioners of Appeals and Tax Tribunal would be extensively abused to collect tax through capricious orders creating exorbitant demands. There are approximately 98,000 tax cases pending adjudication in various courts involving amount of Rs 3.6 trillion, 80% of which are pending at ATIR stage. In this new appeal framework not only the burden of pending cases at high courts would be manifold but it would also affect the capacity of Appellate Tribunals, since there are only four IR Appellate Tribunals across the country. It is therefore, proposed that first appellate forum of Commissioner appeals may be revived, allowing appointment of independent Commissioners from Professional Bodies registered in Pakistan, ie, Chartered Accountants or Cost and Management Accountants with vast experience in the taxation field or selecting Retired Commissioners IR having relevant experience by Ministry of Law with no involvement of the FBR. With shortened adjudication structure and increase in number of Tribunal panels having proposed composition will ensure speedy dispensation of justice and quality judgments. Tax payers and FBR will benefit by this. An Oversight body comprising of High Court judges will help to safeguard transparency and accountability in adjudication process. Therefore, Tribunals be placed under the respective jurisdiction of high courts instead of the Ministry of Law. The Chairman of the Tribunal be appointed by a committee comprising of Chief Justices of the High Courts. The formation of independent Tribunals for tax adjudication and separation of executive and judiciary is the only way to provide effective and expeditious justice. Monitoring of quality of assessment Orders: At par with international practice, there is need to devise mechanism for monitoring of the quality of Assessment Orders passed by Tax Officer. At present, due to lack of any check and balance, numerous frivolous tax litigation cases are initiated to stop tax refunds in violation of law as there is no accountability for harassment to the tax payers which has ruined the business sentiments and discourages people to come into the tax net. It is proposed that a scheme for the quality of the assessment be devised and the assessing officer must clearly identify the issues, give sufficient opportunity to the taxpayer to give his response, and evaluate and analyze the response in detail and accordingly give his finding and conclusion in accordance with provisions of the law. The most important aspect to be considered in judging the performance of an assessing officer is the frequency of success of assessments cases in appellate forums, passed during a particular period so that it may not discourage people from coming into tax net. Punitive action may be taken against the officials involved in framing of frivolous and substandard assessment cases. The Tajir Dost Scheme (TDS) was launched this year to bring the traders and shopkeepers into tax net, it has so far failed because there is a common perception that once they get enrolled they may face regular harassment by tax officials. Chairman of the association, Iskandar Khan, has stated that objectives of TDS cannot be achieved unless their reservations are addressed and a simplified self-assessment taxation scheme is introduced under Final Tax Regime with single flat rate of turnover tax (income tax and sales tax) on self-assessed turnover of traders/retailers, with consultation of trade & retail unions. Further, ten years audit exemption may also be offered for those who voluntarily register and pay tax under the scheme. The association has requested the finance minister to implement their proposals to build an equitable tax system to gain the confidence of taxpayers. Copyright Business Recorder, 2024

Date: 2024-09-01

Details: Karachi, September 1, 2024 – The Federal Board of Revenue (FBR) expressed optimism on Sunday about meeting its first-quarter revenue collection target for the fiscal year 2024-25, anticipating a rebound in imports driven by lower inflation and a reduced policy rate. In a statement, the FBR announced that it had missed its revenue collection target for the first two months of the current fiscal year. “Against a target of Rs. 1,554 billion, FBR has collected Rs. 1,456 billion in net revenue, and refunds of Rs. 132 billion (44% more than last year) were issued to exporters to resolve their liquidity problems,” the statement detailed. The FBR reported gross revenues of Rs. 1,588 billion for July and August 2024. Domestic income tax collection reached Rs. 593 billion, compared to Rs. 437 billion in the same period last year, marking a 36% growth year-on-year. Additionally, domestic sales tax collection showed robust growth, with nearly Rs. 314 billion collected, reflecting a 40% increase from the previous year. Federal Excise Duty (FED) collections also witnessed an upward trend, amounting to Rs. 86 billion, which is a 13% year-on-year increase. Cumulatively, these figures represent an overall growth of almost 35% in the collection of domestic taxes. However, the positive momentum in domestic tax collection was not mirrored on the import side, due to a continued contraction in imports. In August 2024, imports in U.S. dollar terms declined by 2.2% compared to August 2023. Similarly, in Pakistani rupee terms, imports in August 2024 showed a 7% decline compared to the same period last year. The reduction in imports was particularly noticeable in high-duty items such as vehicles, home appliances, and miscellaneous consumer goods like garments, fabrics, and footwear, significantly altering the import mix. This trend adversely affected the collection of customs duties and other taxes collected at the import stage. Despite this, there was a modest 4% increase in customs duty collection, contributing to an overall 21% growth in net revenue collection compared to the previous year. Despite these challenges, the FBR remains confident about achieving its revenue targets for the first quarter. “FBR is likely to achieve the revenue targets of the first quarter as both the economic activity and imports are expected to show a healthy turnaround in the month of September due to a lower policy rate and other interventions being made by the Government in recent months,” the statement noted. The FBR also highlighted that its growth prospects are likely to improve significantly as a result of ongoing digitization efforts and reforms, which are being closely monitored by the Prime Minister and the Finance Minister. These reforms include end-to-end monitoring of supply chains, automated production monitoring, point-of-sale (POS) integration, artificial intelligence-based data integration, import scanning, and strict integrity management of the FBR workforce. Additionally, the FBR is revamping its business processes to facilitate business growth and ease. The strategic focus on reform and digitization is expected to streamline tax collection and compliance, fostering a more robust economic environment. With these initiatives, the FBR aims to enhance transparency and efficiency in revenue collection, ultimately contributing to the country’s economic stability and growth. As the government continues to implement policies aimed at boosting economic activity and enhancing revenue generation, the FBR’s proactive approach in adjusting to these changes reflects its commitment to achieving its fiscal targets and supporting Pakistan’s economic recovery. The coming months will be critical in determining whether these measures will lead to a sustained improvement in import activity and overall revenue collection.

Date: 2024-09-01

Details: Karachi, September 1, 2024 – The Federal Board of Revenue (FBR) has provided clarity on the definition and treatment of speculation business under the Income Tax Ordinance, 2001, as applicable for the tax year 2024-25. The FBR’s recent update to the Income Tax Ordinance, 2001, as of June 30, 2024, includes a detailed explanation in Section 19, which delineates the framework for taxation on speculative activities. Section 19 of the Income Tax Ordinance, 2001, categorizes speculation business as distinct and separate from other business activities conducted by an individual or entity. This distinction is crucial for tax purposes, as it ensures that income and losses from speculative activities are calculated and treated independently from other forms of business income. Key Provisions of Section 19: 1. Separate Treatment of Speculation Business: Subsection (1) of Section 19 stipulates that if a person engages in speculation business, that business is considered a separate entity from any other business they may conduct. This separation is significant as it implies that each business’s profits and losses are calculated independently. Furthermore, the rules governing taxation, as outlined in this part of the Ordinance, are applied distinctly to both the speculation business and any other business the person may operate. 2. Income and Losses from Speculation Business: Any income generated from speculative activities falls under the head “Income from Business” for the relevant tax year. Conversely, any losses incurred from speculation activities, as computed under this part of the Ordinance, must be addressed in accordance with Section 58. This provision ensures that the losses are not offset against other business incomes, thereby maintaining the integrity of the separate treatment mandate. 3. Definition of Speculation Business: Subsection (2) provides a clear definition of what constitutes a speculation business. According to this provision, a speculation business involves any business where contracts for the purchase and sale of commodities, including stocks and shares, are periodically or ultimately settled without the actual delivery or transfer of the commodity. This definition is critical in distinguishing genuine trading activities from speculative endeavors. Exceptions to Speculation Business Classification: Section 19 also outlines specific exceptions to what is considered speculation business. These exceptions include: • Hedging Contracts in Manufacturing or Mercantile Businesses: Contracts entered into by a person involved in manufacturing or mercantile businesses to guard against potential losses due to future price fluctuations are not considered speculative. This exception applies when such contracts are intended to fulfill actual delivery obligations. • Investor and Dealer Hedging: Contracts related to stocks and shares entered into by a dealer or investor to protect against losses in their stock holdings due to price changes are also excluded from the definition of speculation business. • Jobbing and Arbitrage in Forward Markets or Stock Exchanges: Transactions involving jobbing or arbitrage conducted by a member of a forward market or stock exchange are not classified as speculative, provided these are intended to mitigate losses that may arise in the ordinary course of their business. By clearly defining speculation business and its exceptions, the FBR aims to ensure proper taxation and to distinguish between genuine business activities and speculative ventures. This clarification helps in preventing misuse of the tax system and ensures that speculative activities are appropriately taxed in accordance with the law.

Date: 2024-09-01

Details: Karachi: The Federal Board of Revenue (FBR) is preparing to implement performance-based transfers of senior officers, focusing on revenue collection efficiency. This move comes as the FBR faces concerns over a revenue shortfall in the first two months of the current fiscal year. According to sources within the FBR, the new Chairman is closely monitoring the performance of each Commissioner of Inland Revenue (IR) to identify those responsible for the revenue shortfall observed in August 2024. The Chairman’s active involvement underscores the FBR’s commitment to improving its revenue collection efforts and holding senior officials accountable for meeting their targets. To facilitate this process, the FBR has instructed all Chief Commissioners of Inland Revenue to submit detailed data on net revenue collection and monthly targets for the months of July and August 2024. This includes a comparative analysis of the growth in revenue collection for these months over the past year. The information is crucial for evaluating the effectiveness of each Commissioner and determining who has fallen short of their assigned targets. On Saturday, the FBR reiterated its directive to all Chief Commissioners IR to provide comprehensive, Commissioner-wise details of revenue performance for August 2024. The FBR has also requested data on net collections and targets assigned to each field office for July and August of both 2023 and 2024. This detailed data collection aims to give the Chairman and senior FBR officials a clear picture of which Commissioners have met or exceeded their goals and which have not. Sources suggest that following this performance evaluation, the Chairman of the FBR is expected to make transfers of senior officials, including Chief Commissioners and Commissioners, who did not meet their revenue targets for August 2024. This action is part of a broader strategy to ensure that the FBR meets its overall revenue collection goals for the fiscal year. The decision to implement performance-based transfers reflects the FBR’s ongoing efforts to enhance accountability and efficiency within the organization. By aligning senior officers’ performance with the FBR’s revenue collection targets, the board aims to create a more results-driven culture that prioritizes the achievement of fiscal goals. This initiative is seen as a critical step towards addressing the challenges faced by the FBR in revenue collection and ensuring that all field offices are actively contributing to the overall financial health of the country. As the FBR continues to analyze performance data, further actions may be taken to strengthen its revenue collection framework and improve its operational effectiveness.

Date: 2024-08-31

Details: KARACHI: Taxpayers in Karachi are grappling with significant challenges in paying sales tax and claiming debit/credit notes, due to lack of necessary amendments after the reintroduction of sales tax on advances. The issue was raised by the Karachi Tax Bar Association (KTBA) in a letter sent to the Member IR, operations. The KTBA highlighted that while the concept of sales tax on advances has been reintroduced after a five-year hiatus, the corresponding changes in the IRIS (Inland Revenue Information System) have not been implemented. This oversight has led to numerous technical and mechanical issues for taxpayers. The reintroduction of sales tax on advances came through changes in the definition of “time of supply” under Section 22(44)(a) of the Sales Tax Act, 1990. However, the IRIS system has not been updated to accommodate these changes, creating a disconnection between the law and its practical implementation. It said that the taxpayers were unable to declare and pay sales tax on advance receipts in current returns besides facing difficulties in taking due credit through adjustments as previously practiced. Furthermore, it said that over the past year, the Federal Board of Revenue (FBR) has implemented significant restrictions on the declaration of credit notes through the IRIS portal. Under these limitations, suppliers cannot declare credit notes independently without buyers first declaring debit notes. The letter said the debit notes require reference to IRIS-assigned invoice numbers and the portal calculating credit note amounts based on the difference between actual and adjusted invoice amounts. A six-month time limit for suppliers to issue credit notes after declaring sales tax invoices and the inability to declare credit notes against unregistered buyers in Sales Tax Returns (STRs) have substantially altered the process of handling credit and debit notes within the tax system. Consequently, the implications of the above rule are not possible, and taxpayers will remain unable to declare and pay sales tax on advance receipts in their current return and take due credit through adjustments as practiced earlier. Keeping said in view, the KTBA has requested clarification and guidelines on how to declare advance invoices and make necessary adjustments in tax returns, especially for actual supplies or cancellations. Copyright Business Recorder, 2024

Date: 2024-08-31

Details: Karachi, August 31, 2024 – The Federal Board of Revenue (FBR) has collected an impressive Rs 183 billion from taxes on immovable property transactions during the tax year 2023-24 (TY24). This marks a significant increase of 17% compared to the Rs 157 billion collected in the previous tax year, according to official sources. The substantial growth in tax collection is primarily attributed to higher rates and revised valuation tables implemented by the FBR, alongside stringent measures to bring more taxpayers into the fold. A detailed breakdown of the tax collection shows a notable rise in withholding taxes collected on both the sale and purchase of immovable properties. During TY24, the FBR collected Rs 87 billion as withholding tax on the sale and transfer of properties. This represents a 21% increase from the Rs 72 billion collected in the previous tax year. Furthermore, withholding taxes from property buyers saw a significant rise as well. The FBR collected Rs 96 billion in TY24 compared to Rs 85 billion in the preceding tax year, reflecting an increase of 13%. These withholding taxes are collected under the provisions of Sections 236 and 236K of the Income Tax Ordinance, 2001. Section 236 of the ordinance pertains to the collection of withholding tax on the sale and transfer of immovable properties. In contrast, Section 236K deals with the withholding tax on the purchase of immovable properties. The increased tax rates and the revision of valuation tables have been instrumental in boosting revenue under these sections. The FBR’s strategy to revise valuation tables and introduce higher tax rates for individuals not listed on the Active Taxpayers List (ATL) has also significantly contributed to the surge in collections. By targeting those outside the ATL with elevated rates, the FBR has not only increased revenue but also encouraged more taxpayers to register and comply with tax regulations. Over the years, the collection of taxes on property transactions has become a substantial source of revenue for the FBR. The latest figures underscore the success of the FBR’s efforts to broaden the tax base and ensure greater compliance. The increased collection also reflects the growth in property transactions and the effectiveness of the FBR’s policies in capturing these transactions for tax purposes. As the FBR continues to refine its policies and enforcement mechanisms, further growth in tax collections from property transactions is expected in the coming years. The agency remains committed to enhancing transparency and efficiency in tax collection, aiming to contribute more significantly to the national exchequer.

Date: 2024-08-30

Details: LAHORE: Raza Ashfaq Sheikh, Commissioner Inland Revenue and Member Sales Tax Appellate Tribunal Punjab, has explained refunds payment system under the Sales Tax under the Finance Act, 2024 to the All Pakistan Textile Mills Association (APTMA) member mills, saying that the Federal Board of Revenue (FBR) has devised three automated systems to streamline the payment system. He was addressing a workshop organised by the All Pakistan Textile Mills Association (APTMA) for its member mills relating to Sales Tax budgetary measures especially those affecting textile industry. Secretary General Mohammad Raza Baqir welcomed the visiting Commissioner IR at the APTMA Lahore office. A good number of representatives from the APTMA member mills attended the workshop. Commissioner IR said the FBR has three systems, including FASTER, ERS and STARR to deal with refunds of Sales Tax. He also explained the Sales Tax General Order (STGO) 9 of 2023 to the participants of the workshop. According to him, the scheme of things under the Sales Tax law can be divided into three categories, namely legal provisions, automated systems and check for scrutiny and audit. He said sections 8B, 10, 66 and 67 deal with refunds payment under the Sales Tax Act, 1990. Besides, rules under chapters V, VA, VB and VC spell out fundamentals of the refund scheme. Earlier, Secretary General APTMA Mohammed Raza Baqir said the APTMA has decided to hold workshops to apprise and educate member mills about the tax system to avoid any future litigation from FBR field formations. Representatives of member mills, dealing with tax matters, attended the workshop to discuss their concerns and get clarifications thereon from the senior FBR officer. They also raised queries about the delays in clearance of refund claims and STGO 9 of 2023, which were duly addressed by the visiting Commissioner IR. Copyright Business Recorder, 2024

Date: 2024-08-30

Details: Karachi, August 30, 2024 – The Federal Board of Revenue (FBR) has released the updated guidelines for business income tax for the tax year 2024-25, offering detailed insights into tax obligations under the Income Tax Ordinance, 2001. According to the FBR’s recent update, the tax on income from business is governed under Section 18 of the Ordinance. This section outlines various categories of business income that are subject to taxation, aiming to provide clarity and comprehensive coverage. Key Provisions Under Section 18 1. General Income from Business: o Profits and Gains: All profits and gains from any business activity conducted within the tax year are chargeable under the “Income from Business” head. This encompasses any form of business operation undertaken by an individual or entity during the year. o Trade and Professional Associations: Income derived from the sale of goods or provision of services to members by trade, professional, or similar associations is taxable. The FBR clarifies that co-operative societies earning income from such activities are also subject to tax under this provision. 2. Income from Leasing and Rentals: o Movable Property: Income generated from the hire or lease of tangible movable property falls under taxable business income. This includes revenue from leasing assets, whether owned by the lessor or not. 3. Benefits and Perquisites: o Fair Market Value: The fair market value of any benefit or perquisite, convertible or non-convertible into money, derived from a business relationship is taxable. This also includes benefits like the waiver of profit on debt as outlined by the State Bank of Pakistan’s Circular No.29 of 2002. 4. Management Fees: o Management Companies: Income earned by management companies, including modaraba management companies, from management fees is taxable under the “Income from Business” category. However, this does not include income already taxed under other specific sections such as 5A, 5AA, 6, 7, and 7A. 5. Profit on Debt: o Tax Treatment: Profits derived from debt by individuals or entities whose primary business involves such income are taxed under the “Income from Business” head, rather than “Income from Other Sources”. 6. Leasing Income: o Scheduled Banks and Investment Institutions: Any payments received by scheduled banks, investment banks, development finance institutions, modarabas, or leasing companies from leasing assets are considered business income. This includes amounts paid or payable by lessees. 7. Mutual Fund Distributions: o Banking and Non-Banking Finance Companies: Amounts received by banking or non-banking finance companies from mutual funds or Private Equity and Venture Capital Funds, representing distributions from profit on debt, are taxable under the “Income from Business” head. Implications and Compliance The updated guidelines aim to streamline the taxation process for businesses and provide clearer definitions for various income streams. By delineating the scope of taxable income and clarifying ambiguities, the FBR seeks to enhance compliance and reduce disputes. Businesses are advised to review the detailed provisions of Section 18 and ensure accurate reporting of their income according to the new regulations. The updated guidelines emphasize the importance of proper accounting and documentation to facilitate smooth tax reporting and compliance. For further details and to address specific queries, businesses are encouraged to consult with tax professionals or directly engage with the FBR to ensure adherence to the new tax guidelines for the 2024-25 fiscal year.

Date: 2024-08-30

Details: Karachi, August 30, 2024 — The Karachi Tax Bar Association (KTBA) has raised serious concerns about the complications faced by taxpayers in dealing with sales tax on advances, following recent legislative changes. In a letter addressed to Mir Badshah Khan Wazir, Member (Inland Revenue – Operations) of the Federal Board of Revenue (FBR), KTBA President Syed Zafar Ahmed highlighted several technical and procedural issues that have emerged since the reintroduction of the concept of sales tax on advances in the Finance Act, 2024. The KTBA pointed out that the reintroduction of sales tax on advances, after a gap of five years, came through changes in the definition of the ‘time of supply’ under Section 22(44)(a) of the Sales Tax Act, 1990. However, corresponding updates to the Integrated Revenue Information System (IRIS) — the FBR’s tax management software — have not been implemented, leading to numerous difficulties for taxpayers. “This has given rise to several technical and mechanical irritants,” the KTBA stated in its letter. It emphasized that while the Sales Tax Rules, 2006, specifically Rule 160, outline the treatment of advance payments against supplies, the necessary modifications to align the IRIS system with these rules have not been made. Complications Due to New Rules Under the newly introduced Rule 160, taxpayers receiving advance payments are required to issue an advance receipt invoice at the time of receiving the payment. The output tax on such amounts must be reflected in the tax return for the period in which the advance is received. When the actual supply is made, a sales tax invoice is to be issued, referencing the advance invoice and taking due credit for the sales tax already accounted for. However, the KTBA has highlighted several issues with this process: 1. Credit Note Restrictions: For the last year, the FBR has imposed restrictions on declaring credit notes on the IRIS portal. Suppliers cannot declare credit notes unless a debit note is declared by the buyer. Additionally, the credit note must be issued within six months of declaring the sales tax invoice, which complicates the process for transactions that extend beyond this timeframe. 2. Issues with Unregistered Buyers: The IRIS portal does not allow the declaration of credit notes against unregistered buyers, creating a significant obstacle for suppliers dealing with such customers. This restriction prevents suppliers from adjusting sales tax in their returns when the actual supply differs from the advance invoice. 3. Complexity with Multiple Products: Many distributors deal in multiple products, some of which fall under different tax regimes (such as goods taxable at a standard 18% rate, exempt goods, and goods taxable at a reduced rate). The current system does not provide a clear mechanism for handling sales tax chargeability on advance invoices and subsequent adjustments for these varied products. 4. Delayed Supplies and Adjustments: Actual supplies made by distributors often vary in quantity from the advance invoice issued at the time of receiving the advance payment. Adjustments based on actual quantities can only be made through a credit note, but this process has been restricted on the FBR portal, further complicating compliance. 5. Cancellation of Supplies: In cases where a supply is canceled, taxpayers are unable to declare a credit note until a debit note is issued by the buyer, which could lead to complications in reversing advance sales tax and sales tax withholding already declared and paid in returns. Call for Clarification and Reforms The KTBA warned that the inability to declare or pay sales tax on advance invoices and to take necessary adjustments could lead to a deterrent effect on businesses. “Taxpayers will remain unable to declare or pay sales tax on advance invoices in their returns and take due credit/adjustments, which will deter them from charging sales tax on advances,” the KTBA stated. In light of these issues, the KTBA has urged the FBR to provide immediate clarifications and guidelines on how to declare advance invoices and take credit or adjustments in the tax return at the time of actual supplies or in case of cancellation of supplies. “It is, therefore, requested to kindly provide clarification/guideline for the declaration of advance invoices and how to take credit/adjustments in the return at the time of actual supplies or in case of cancellation of supplies,” the letter concluded.

Date: 2024-08-29

Details: ISLAMABAD: The Federal Board of Revenue has allowed exporters to remove unmanufactured tobacco from the GLT units without payment of any duties. The tax department on Wednesday issued Federal Excise General Order No 1 of 2024 regarding mitigating the hardship faced by exporters of unmanufactured tobacco. FEGO No.02 of 2005 (FEGO) in its paras (ii) & (iii) stipulates that removal of unmanufactured tobacco from manufacturing premises, whether for sale or for storage, can only take place upon payment of duty. This has created difficulties for exporters of unmanufactured tobacco who are otherwise entitled to zero-rating in terms of Section 5 of the Act, however, in view of the above-referred provisions of the FEGO, are required to pay FED upon removal of unmanufactured tobacco from manufacturing premises to a warehouse for storage. Now, therefore, in exercise of the powers conferred by Section 43 of the FED, 2005, the board is pleased to direct that a GLT unit engaged in the export of unmanufactured tobacco may be allowed to remove unmanufactured tobacco from its manufacturing premises to a declared warehouse without payment of duty. Sources said that the adjustable excise duty of Rs390 per kg is a liability on the cigarette manufacturers at the GLT stage and the manufacturers can adjust this in their monthly tax returns. However tobacco Industry people claimed that this will pave the way for unmanufactured tobacco to be exported through zero-rated excise and smuggled back into the country to make tax evaded cigarettes. The FBR in its order made some conditions that the DCIR concerned shall certify that there is no space available for storage inside the manufacturing premises of such GLT unit and unmanufactured tobacco shall only be stored in a warehouse duly declared to the concerned Commissioner-IR. In addition, the GLT unit availing this facility shall have confirmed export orders for unmanufactured tobacco and all movement of unmanufactured tobacco including from manufacturing premises to warehouse or removal for exports, as the case may be, shall take place under the supervision of an officer of Inland Revenue not below the rank of Assistant Commissioner-IR, duly authorized by concerned Commissioner-IR in this behalf. The keys of the warehouse shall be in the custody of an officer designated by the Commissioner-IR concerned while a register, as specified in Annex-I to this General Order, shall be maintained at the manufacturing premises of the GLT Unit recording movement of unmanufactured tobacco, whereas a register as specified in Annex-II shall be maintained at warehouse. At the time of movement of unmanufactured tobacco from manufacturing premises to warehouse, located outside the manufacturing premises, a transport advice in duplicate As specified in Annex-III to this General Order shall be issued. Original advice shall accompany the vehicle up to the destination mentioned in the advice, the order reads. Removal of unmanufactured tobacco from manufacturing premises to a declared warehouse outside the manufacturing premises shall be allowed subject to provision of bank guarantee to the extent of amount of federal excise duty involved and in case of any pilferage, bank guarantee shall be realized. On the other hand, the Bank guarantee shall be released to the extent of export proceeds realized against the export of unmanufactured tobacco. An officer of Inland Revenue not below the rank of Assistant Commissioner-IR, duly authorized by concerned Commissioner-IR, shall have free access at all time to any warehouse used for the storage of unmanufactured tobacco. Copyright Business Recorder, 2024

Date: 2024-08-29

Details: Federal Minister for Power Sardar Owais Ahmed Khan Leghari said the incumbent government has no intention to impose taxes on imported solar panels as it seeks to encourage the renewable energy sector. “Although a number of proposals were made to impose tax on the import of solar panels, however, the Prime Minister refused it completely. Our policy is not to tax import of solar panels (but) to encourage it further,” he said. Nepra concerned at drop in power consumption The remarks from the federal minister were made in a video message on social media platform X (formerly known as Twitter) uploaded on Thursday. In the video, Leghari discussed the problems of the country’s complex power sector and the plans of the current government to deal with them. He said that owing to high energy prices, a number of agricultural tube wells were shifted to solar energy. “We are optimistic that as electricity rate declines, they will switch to the national system.” The Federal Minister of Energy informed that the government is purchasing expensive electricity from 125,000 net-metering consumers. “However, we want to give them this incentive to encourage growth in solar energy sector,” he said. Rising electricity rates have become a significant challenge for the incumbent government. Last month, the federal government announced an increase in electricity prices of up to Rs7.12 per unit for domestic consumers, raising the base tariff from Rs29.78/KWh in FY24 to Rs35.50/KWh in FY25 to comply with International Monetary Fund (IMF) requirements. Solar PV panels: Duties on plant, machinery and raw material to go away Prime Minister Shehbaz Sharif recently introduced a Rs50-billion energy subsidy package for low-income households consuming up to 200 units from July to September 2024. However, experts warned that this may be insufficient, as mounting public discontent could lead to civil unrest.

Date: 2024-08-29

Details: Karachi, August 29, 2024 – In a notable update for property owners across Pakistan, the Federal Board of Revenue (FBR) has announced several deductions available under the Income Tax Ordinance, 2001, for calculating tax on income derived from property. The announcement, which is part of the ordinance updated up to June 30, 2024, details the various expenses and allowances that property owners can claim when computing their taxable income under the category “Income from Property.” Key Deductions Under Section 15A The deductions, outlined in Section 15A of the ordinance, are aimed at providing relief to property owners by reducing their taxable income through various allowable expenses. Here’s a breakdown of the key deductions: 1. Repairs Allowance: Property owners can claim an allowance for repairs equal to one-fifth (20%) of the rent chargeable to tax on the building for the year. This deduction is calculated before applying any other deductions under this section, providing significant relief for maintaining property standards. 2. Insurance Premiums: Any premium paid by the property owner to insure the building against risks such as damage or destruction is deductible. This encourages property owners to safeguard their investments without bearing the full tax burden on insurance costs. 3. Local Taxes and Charges: Deductions are also allowed for local rates, taxes, charges, or cess paid to any local authority or government, provided these are not taxes payable under the Income Tax Ordinance. This helps in mitigating the financial impact of local property-related levies. 4. Ground Rent: If a property owner pays ground rent, this amount is deductible when calculating the income tax on the property, recognizing the cost associated with leasing land. 5. Interest on Loans: The ordinance allows for the deduction of any profit or interest paid on loans or mortgages taken to acquire, construct, renovate, extend, or reconstruct the property. This provision is particularly beneficial for property investors and homeowners who rely on financing to manage their properties. 6. House Building Finance Corporation and Bank Investments: For properties financed through schemes with the House Building Finance Corporation or banks, deductions are available for the share in rent and appreciation in property value (excluding the return of capital) paid to these institutions. This supports collaborative investments and incentivizes property development. 7. Mortgage Interest: Property owners can also deduct the interest paid on mortgages or other capital charges. This deduction helps offset the costs of borrowing against the property, making it easier to manage loans. 8. Administrative and Collection Costs: An expenditure up to 4% of the rent chargeable to tax is deductible if it’s incurred exclusively for deriving rent. This includes administration and collection charges, recognizing the costs involved in property management. 9. Legal Expenses: Any expenditure incurred for legal services to defend the title of the property or in legal suits related to the property is deductible. This provision ensures that property owners are not financially penalized for protecting their property rights. 10. Bad Debts from Unpaid Rent: If rent is deemed irrecoverable under certain conditions, an allowance for unpaid rent can be claimed. However, if this rent is subsequently recovered, it becomes taxable in the year of recovery. Provisions for Unpaid Liabilities and Recouped Deductions The FBR has also outlined conditions under which unpaid liabilities, if not settled within three years of the deduction, will be charged back as taxable income. Conversely, if these liabilities are later paid, a deduction is allowed in the year of payment. This ensures fairness in the tax system by preventing indefinite deferral of liabilities while allowing flexibility for eventual payments. Ensuring Fair Tax Practices The newly announced deductions underscore the FBR’s commitment to creating a fair and balanced tax environment for property owners, promoting transparency, and ensuring compliance with tax laws. Property owners are encouraged to take note of these deductions and consult with tax professionals to maximize their tax benefits while adhering to legal obligations. By clarifying these deductions, the FBR aims to simplify the tax filing process and provide property owners with the necessary tools to accurately compute their taxable income. As the tax year progresses, property owners should remain vigilant and proactive in understanding their rights and responsibilities under the Income Tax Ordinance. For further details, property owners can refer to the FBR’s official website or consult with tax experts to ensure compliance and optimize their tax planning strategies.

Date: 2024-08-29

Details: Karachi, August 29, 2024 – The Federal Board of Revenue (FBR) has announced the deadlines for submitting annual income tax returns for the tax year 2024. This announcement is a critical step in ensuring that all taxpayers, including individuals, Associations of Persons (AOPs), and companies, are well-prepared to meet their tax obligations within the designated timelines. According to the schedule released by the FBR, the deadline for filing income tax returns for individuals and AOPs is set for September 30, 2024. This date marks the final day for these entities to submit their tax returns for the fiscal period covering July 1, 2023, to June 30, 2024. The FBR emphasizes that timely submission is crucial to fulfilling tax obligations and avoiding any potential penalties for late filing. Different Deadlines for Different Entities For companies operating on a regular tax year, the FBR has set a separate deadline. These companies must file their income tax returns on or before December 31, 2024. This extended timeframe is designed to allow companies additional time to accurately compile and submit their financial information, taking into account the complexity of corporate financial reporting. However, the FBR has outlined an earlier deadline for companies with a special tax year, requiring them to file their returns on or before September 30, 2024. This distinction recognizes that companies with fiscal years that do not align with the standard calendar year have unique reporting requirements. The FBR’s directive ensures that all entities, regardless of their fiscal year, adhere to a structured filing timeline. Understanding the Tax Year and Special Tax Year The FBR has provided a detailed explanation of what constitutes a tax year. It is defined as a period of twelve months concluding on the 30th of June, aligning with Pakistan’s financial year. The tax year is identified by the calendar year in which this period ends. For instance, the tax year 2024 pertains to the period from July 1, 2023, to June 30, 2024. In addition to defining a regular tax year, the FBR has also clarified the concept of a special tax year. A special tax year refers to any twelve-month period that ends on a date other than June 30. This period is denoted by the calendar year in which the closing date of the special tax year falls. For example, if a special tax year concludes on December 31, 2023, it is associated with the calendar year 2024. Similarly, a special tax year that spans from October 1, 2022, to September 30, 2023, is also linked to the calendar year 2024. Importance of Adherence and Compliance The FBR’s notification serves as a critical guide for all taxpayers to plan and prepare for the upcoming tax year. It underscores the importance of adhering to the prescribed deadlines and filing accurate returns. By doing so, taxpayers can contribute to a transparent and efficient taxation process, which is vital for the country’s economic stability and growth. Moreover, the FBR’s announcement highlights its commitment to providing clear guidelines and facilitating a smooth tax filing process for all entities under its jurisdiction. As the tax season approaches, taxpayers are encouraged to stay informed, understand the relevant deadlines, and ensure compliance to avoid any potential penalties or complications. With these deadlines in place, the FBR aims to promote a culture of timely and accurate tax filing, which is essential for enhancing revenue collection and fostering a compliant taxpayer base. As always, taxpayers are advised to consult with tax professionals or visit the FBR’s official website for any additional information or assistance regarding their tax obligations for the year 2024.

Date: 2024-08-28

Details: Karachi, August 28, 2024 – The Federal Board of Revenue (FBR) has provided a comprehensive explanation of the tax implications on income derived from property for the tax year 2024-25. This clarification follows the issuance of the updated Income Tax Ordinance, 2001, which is effective as of June 30, 2024. The FBR has specifically outlined that income from property is governed under Section 15 of the Ordinance. This section details the circumstances under which property income is taxable and offers clarity on what constitutes “rent” for tax purposes. Under Section 15(1), any rent received or receivable by a person within a tax year, except rent that is exempt under the Ordinance, will be taxable under the head “Income from Property.” This means all rental income, unless specifically excluded by the law, is subject to taxation. Section 15(2) provides a more detailed definition of what qualifies as “rent.” It states that rent encompasses any amount received or receivable by the owner of land or a building as consideration for its use, occupation, or the right to use or occupy it. This also includes any forfeited deposits paid under a contract for the sale of land or a building. However, the FBR highlights exceptions to this rule in Section 15(3). If a building is leased out together with plant and machinery, any rent received for such a lease is not classified as income from property. Instead, it is taxed under the head “Income from Other Sources.” Further, Section 15(3A) addresses situations where rental income includes amounts for amenities, utilities, or other services connected with the property. In such cases, the income derived from these additional provisions is also chargeable under “Income from Other Sources” rather than being treated as pure rental income. An interesting aspect of the ordinance is laid out in Section 15(4). It stipulates that if the rent received or receivable is less than the fair market rent, the individual is treated as having received the fair market rent for the duration the property is rented out during the tax year. This provision ensures that properties are taxed on a fair market value basis, preventing tax avoidance through undervaluing rental agreements. However, there is a critical exception under Section 15(5). This sub-section specifies that the rule of fair market rent does not apply if the fair market rent is already included in the lessee’s income under the head “Salary.” These clarifications from the FBR aim to ensure transparency and fairness in the taxation of property income, aligning with broader efforts to streamline tax regulations and improve compliance. Property owners and investors are encouraged to familiarize themselves with these provisions to ensure proper tax filing and avoid potential penalties. The FBR’s updated ordinance provides a clear framework for taxpayers, ensuring all forms of property income are adequately accounted for in the coming tax year.

Date: 2024-08-28

Details: Moody’s Ratings (Moody’s) on Wednesday upgraded the government of Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa2 from Caa3. “We have also upgraded the rating for the senior unsecured MTN programme to (P)Caa2 from (P)Caa3. Concurrently, the outlook for Government of Pakistan is changed to positive from stable,” read the statement. The upgrade to Caa2 reflects Pakistan’s improving macroeconomic conditions and moderately better government liquidity and external positions, from very weak levels. “Accordingly, Pakistan’s default risk has reduced to a level consistent with a Caa2 rating,” it said. The global credit rating agency, which downgraded Pakistan in February 2023, said that “there is now greater certainty on Pakistan’s sources of external financing, following the sovereign’s staff-level agreement with the International Monetary Fund (IMF) on 12 July 2024 for a 37-month Extended Fund Facility (EFF) of $7 billion”. “We expect the IMF Board to approve the EFF in the next few weeks,” it said. Moody’s expects Pakistan will be able to cover its financing needs with funding from official partners, although there remains uncertainty around the government’s ability to sustain reform implementation In its report, Moody’s noted that Pakistan’s foreign exchange reserves have about doubled since June 2023, although they remain below what is required to meet its external financing needs. “The country remains reliant on timely financing from official partners to fully meet its external debt obligations,” it said. The agency said Pakistan’s Caa2 rating continues to reflect the country’s “very weak debt affordability, which drives high debt sustainability risk”. “We expect interest payments to continue absorbing about half of government revenue over the two to three years.” The Caa2 rating also incorporates the country’s weak governance and high political uncertainty, it said. On the other hand, the positive outlook reflects a balance of risks skewed to the upside. It captures the possibility that the government is able to further lower its government liquidity and external vulnerability risks, and achieve a better fiscal position than we currently expect, supported by the IMF programme, said the credit rating agency. “Sustained reform implementation, including revenue-raising measures, can increase the government revenue base and improve Pakistan’s debt affordability,” it said. Moreover, a record of completing IMF reviews on a timely manner would also allow Pakistan to continually unlock financing from official partners, sufficient to meet its external debt obligations and support further rebuilding of its foreign exchange reserves, it said. Back in July, Pakistan and the IMF reached a staff-level agreement for a 37-month loan programme. But the final approval will need to come from the IMF Executive Board after Pakistan secures “timely confirmation of necessary financing assurances from development and bilateral partners.” This includes rollovers or disbursements on loans from Pakistan’s long-time allies Saudi Arabia, the United Arab Emirates, and China. Moody’s on Wednesday said the upgrade to Caa2 from Caa3 rating also applies to the backed foreign currency senior unsecured ratings for The Pakistan Global Sukuk Programme Co Ltd. “The outlook for the Pakistan Global Sukuk Programme Co Ltd is positive,” it said. “We have also raised Pakistan’s local and foreign currency country ceilings to B3 and Caa2 from Caa1 and Caa3, respectively.” Moody’s downgrades five Pakistani banks Moody’s was of the view that the two-notch gap between the local currency ceiling and sovereign rating is driven by the government’s relatively large footprint in the economy, weak institutions, and high political and external vulnerability risk. “We estimate Pakistan’s external financing needs to be about $26 billion for fiscal 2025 (ending June 2025), comprising of around $22 billion of external principal debt repayments in fiscal 2025 and another $4 billion (about 1% of GDP) to finance the current account deficit,” said Moody’s. Pakistan’s financing needs for fiscal 2026-2027 will be similar, it projected. Moody’s expects Pakistan will be able to cover its financing needs with funding from official partners, although there remains uncertainty around the government’s ability to sustain reform implementation. Cannot defer reform agenda anymore, says Aurangzeb “The coalition government formed after elections held in February 2024 may not have sufficiently strong electoral mandate to continually implement revenue-raising measures without stoking social tensions. Slippages in reform implementation or results could lead to delays in or withdrawal of financing support from official partners,” it warned.

Date: 2024-08-28

Details: Karachi, August 28, 2024 – The Federal Board of Revenue (FBR) on Wednesday issued a general order to ease the export process for unmanufactured tobacco, addressing longstanding concerns among exporters regarding the payment of federal excise duty (FED). Unmanufactured tobacco, classified under S.No.7 to Table-I of Schedule-I of the Federal Excise Act, 2005, is subject to FED. According to Federal Excise General Order No.02 of 2005 (FEGO), the removal of unmanufactured tobacco from manufacturing premises for sale or storage is only allowed upon the payment of this duty, the FBR said. This regulation has created challenges for exporters who, despite being eligible for zero-rating under Section 5 of the Act, have been required to pay FED when moving unmanufactured tobacco from manufacturing premises to warehouses for storage, the FBR added. To mitigate these difficulties, the FBR has now exercised its authority under Section 43 of the Federal Excise Act, 2005, to permit GLT units engaged in the export of unmanufactured tobacco to transfer their products from manufacturing premises to designated warehouses without paying FED. This measure is subject to several conditions to ensure compliance and security. Key conditions include: 1. Certification of Storage Space: The Deputy Commissioner Inland Revenue (DCIR) must certify that there is no available space within the manufacturing premises of the GLT unit for storing unmanufactured tobacco. 2. Declared Warehouse: Unmanufactured tobacco must be stored in a warehouse that has been officially declared to the relevant Commissioner Inland Revenue (IR). 3. Confirmed Export Orders: The GLT unit must have confirmed export orders for the unmanufactured tobacco in question. 4. Supervised Movement: All movements of unmanufactured tobacco, whether from the manufacturing premises to the warehouse or for export, must be supervised by an officer of Inland Revenue not below the rank of Assistant Commissioner-IR. This officer must be authorized by the concerned Commissioner-IR. 5. Warehouse Security: The keys to the warehouse will remain in the custody of an officer designated by the Commissioner-IR to ensure security and prevent unauthorized access. 6. Record Maintenance: The GLT unit must maintain specific registers at both the manufacturing premises and the warehouse, as outlined in Annex-I and Annex-II of the General Order, to record the movement of unmanufactured tobacco. 7. Transport Advice: A transport advice, issued in duplicate and specified in Annex-III, must accompany all shipments from the manufacturing premises to the warehouse. 8. Bank Guarantee Requirement: Before moving unmanufactured tobacco to a warehouse outside the manufacturing premises, the GLT unit must provide a bank guarantee covering the amount of FED involved. This guarantee will be realized in case of pilferage and will be released proportionately as export proceeds are realized. 9. Access for Inland Revenue Officers: An authorized officer of Inland Revenue, not below the rank of Assistant Commissioner-IR, must have unrestricted access to any warehouse used for storing unmanufactured tobacco at all times. This new policy aims to streamline the export process for unmanufactured tobacco and support exporters by reducing the financial burden associated with the upfront payment of excise duties. The FBR’s initiative is expected to enhance compliance and facilitate smoother operations for the industry, promoting Pakistan’s tobacco exports in the global market.

Date: 2024-08-28

Details: Karachi, August 28, 2024 – The Federal Board of Revenue (FBR) on Wednesday introduced a simplified return form for traders, making the declaration of deemed income mandatory under the new guidelines. The move comes as part of the FBR’s ongoing efforts to streamline tax compliance and increase transparency within the trading community. The notification, issued under SRO 1321(I)/2024 on August 28, 2024, outlines the new requirements for traders filing income tax returns for the tax year 2024 and beyond. The simplified return form, now available in both English and Urdu, is designed to facilitate a broader understanding and ensure accurate declarations among traders. According to the new guidelines, traders must pay taxes on taxable income or final tax. Additionally, the declaration mandates the inclusion of deemed income under Section 7E of the Income Tax Ordinance, 2001. This section pertains to the calculation and payment of deemed income tax, a measure aimed at broadening the tax base and ensuring fair contributions from all traders. The return form requires traders to declare various financial details, including business turnover or receipts, total trading purchases, other expenditures, net profit or taxable income, and any income other than business, such as interest or rental income. Traders with agricultural land are also required to declare it, along with any relevant bank account details. In addition to business income, the second part of the return form focuses on the details of taxes paid during the year. Traders must provide information about total adjustable tax payments, including those on profit from debt, telephone and internet services, electricity, and taxes collected from distributors, dealers, or wholesalers under Section 236G and from retailers under Section 236H. Furthermore, details of purchase or transfer of immovable property under Section 236K and sale or transfer of immovable property under Section 236C must also be declared. The FBR has also mandated the declaration of advance tax payments under the Tajir Dost Special Procedure, 2024. This special procedure aims to simplify the tax filing process for traders, encouraging compliance and reducing the administrative burden associated with tax returns. As part of the wealth statement form, traders are required to declare immovable property, movable property, including business capital, and other assets. This comprehensive approach ensures that all assets and liabilities are accurately reported, providing a clear picture of a trader’s financial position. The release of the simplified return form coincided with a nationwide protest by traders, who shut down businesses across Pakistan to demonstrate against high taxes and inflated electricity bills. The timing of the FBR’s announcement has sparked significant debate within the business community, with many traders expressing concerns over the increased tax obligations and the perceived lack of consultation before implementing the new requirements. Despite the backlash, the FBR maintains that the introduction of the simplified return form is a necessary step toward improving tax compliance and ensuring that all traders contribute fairly to the national revenue. By making the return form available in both languages and simplifying the declaration process, the FBR aims to encourage more traders to comply with tax regulations and reduce the informal economy’s impact on the country’s fiscal health. The FBR has urged traders to review the new return form carefully and ensure all required information is accurately declared to avoid penalties or legal action. The simplified return form and additional information on the new requirements are available on the FBR’s official website.

Date: 2024-08-28

Details: Karachi, August 28, 2024 – The Federal Board of Revenue (FBR) on Wednesday introduced a simplified return form for traders, making the declaration of deemed income mandatory under the new guidelines. The move comes as part of the FBR’s ongoing efforts to streamline tax compliance and increase transparency within the trading community. The notification, issued under SRO 1321(I)/2024 on August 28, 2024, outlines the new requirements for traders filing income tax returns for the tax year 2024 and beyond. The simplified return form, now available in both English and Urdu, is designed to facilitate a broader understanding and ensure accurate declarations among traders. According to the new guidelines, traders must pay taxes on taxable income or final tax. Additionally, the declaration mandates the inclusion of deemed income under Section 7E of the Income Tax Ordinance, 2001. This section pertains to the calculation and payment of deemed income tax, a measure aimed at broadening the tax base and ensuring fair contributions from all traders. The return form requires traders to declare various financial details, including business turnover or receipts, total trading purchases, other expenditures, net profit or taxable income, and any income other than business, such as interest or rental income. Traders with agricultural land are also required to declare it, along with any relevant bank account details. In addition to business income, the second part of the return form focuses on the details of taxes paid during the year. Traders must provide information about total adjustable tax payments, including those on profit from debt, telephone and internet services, electricity, and taxes collected from distributors, dealers, or wholesalers under Section 236G and from retailers under Section 236H. Furthermore, details of purchase or transfer of immovable property under Section 236K and sale or transfer of immovable property under Section 236C must also be declared. The FBR has also mandated the declaration of advance tax payments under the Tajir Dost Special Procedure, 2024. This special procedure aims to simplify the tax filing process for traders, encouraging compliance and reducing the administrative burden associated with tax returns. As part of the wealth statement form, traders are required to declare immovable property, movable property, including business capital, and other assets. This comprehensive approach ensures that all assets and liabilities are accurately reported, providing a clear picture of a trader’s financial position. The release of the simplified return form coincided with a nationwide protest by traders, who shut down businesses across Pakistan to demonstrate against high taxes and inflated electricity bills. The timing of the FBR’s announcement has sparked significant debate within the business community, with many traders expressing concerns over the increased tax obligations and the perceived lack of consultation before implementing the new requirements. Despite the backlash, the FBR maintains that the introduction of the simplified return form is a necessary step toward improving tax compliance and ensuring that all traders contribute fairly to the national revenue. By making the return form available in both languages and simplifying the declaration process, the FBR aims to encourage more traders to comply with tax regulations and reduce the informal economy’s impact on the country’s fiscal health. The FBR has urged traders to review the new return form carefully and ensure all required information is accurately declared to avoid penalties or legal action. The simplified return form and additional information on the new requirements are available on the FBR’s official website.

Date: 2024-08-28

Details: Karachi, August 28, 2024 – The Karachi Tax Bar Association (KTBA) has brought attention to the tax challenges faced by Pakistan’s pharmaceutical sector following recent changes in sales tax regulations. In a recent correspondence with Hameed Ateeq Sarwar, Member (Inland Revenue – Policy) of the Federal Board of Revenue (FBR), KTBA President Syed Zafar Ahmed highlighted the issues arising from the amendments to the Sales Tax Rules, 2006. The concern revolves around a new provision introduced under Rule 18A of the Sales Tax Rules, 2006, via SRO 1130 of 2024, dated August 1, 2024. This provision specifies that the second proviso to sub-rule (3) of Rule 18, which was initially inserted through SRO 350 of 2024 dated March 7, 2024, will not apply to invoices issued by certain registered entities from March 7, 2024. These entities include gas transmission and distribution companies, electricity distribution companies, independent power producers or WAPDA, manufacturers, distributors, wholesalers, or retailers of Third Schedule items, petroleum exploration and production companies, and other registered buyers. Under the current sales tax regime, as outlined in Serial No. 81 and 82 of the Eighth Schedule of the Sales Tax Act, 1990, the pharmaceutical sector is subjected to a fixed 1% sales tax rate without the right to claim any input tax. This rule has created a unique situation for the sector, as explained by the KTBA. Syed Zafar Ahmed, President of KTBA, pointed out that once the sales tax for the entire supply chain has been paid by pharmaceutical manufacturers, requiring vendors or suppliers to submit returns under Rule 18(3) becomes redundant in these cases. “The condition for vendors or suppliers to submit returns under Rule 18(3) is unnecessary once the sales tax for the entire supply chain has been paid by pharma manufacturers,” Ahmed emphasized. The KTBA has requested the FBR to extend the provisions of Rule 18A of the Sales Tax Rules, 2006, to include the pharmaceutical sector. This inclusion would align the pharma sector with other entities exempted under the recent amendments, providing relief to the industry from the additional administrative burden. The recent changes have prompted a call for clarity and fairness in the application of sales tax laws. The KTBA’s appeal to the FBR underscores the need for more comprehensive and considerate tax policies that accommodate the unique dynamics of different industries. As the FBR considers these requests, stakeholders in the pharmaceutical sector remain hopeful for a favorable resolution that addresses their tax concerns while ensuring compliance with national tax regulations.

Date: 2024-08-27

Details: Karachi – The Karachi Tax Bar Association (KTBA) has called upon the Federal Board of Revenue (FBR) to extend the deadline for filing sales tax returns, citing significant challenges posed by the recent implementation of SRO 350(I)/2024. The request was made in a formal letter dated August 26, 2024, from KTBA President Syed Zafar Ahmed to the Member Inland Revenue – Operations at the FBR. KTBA’s plea highlights the complexities and operational hurdles faced by taxpayers in complying with the new regulations under SRO 350 of 2024. The association noted that the new rules have made it virtually impossible for registered taxpayers to file their sales tax returns unless their suppliers have fully discharged their sales tax liabilities, declared their customers in Annexure-C, and filed their returns in compliance with Section 26 of the Sales Tax Act, 1990. Challenges in Compliance The core issue, as outlined by the KTBA, revolves around the inability of taxpayers to submit their sales tax returns if their suppliers fail to do so. This failure not only prevents the submission of monthly sales tax returns but also impedes the adjustment of input tax. Furthermore, it creates discrepancies in the legitimacy of refundable claims related to exports, as reported in Row 29 of the sales tax return. The letter emphasized that the current system marks submitted returns as provisional and non-editable drafts. This issue is further compounded by frequent error messages on the FBR web portal, particularly the error stating: “Row 29 cannot be greater than Row 28.” Consequences of the Current System The KTBA has outlined several consequences resulting from the current situation: • Filing Hindrances: Registered taxpayers are unable to file their sales tax returns within the stipulated time frame due to persistent error messages. • Non-Active Status: The failure to file returns for two consecutive tax periods has led to taxpayers being marked as ‘non-active’ on the IRIS portal. • Additional Tax Charges: Due to the non-active status, taxpayers are subjected to an additional sales tax of 4% under Section 3(1A) of the Sales Tax Act, 1990, which is non-adjustable. KTBA’s Recommendations In response to these challenges, the KTBA has proposed several measures to the FBR: 1. Extension of Filing Deadline: The KTBA has requested an extension for the e-filing of sales tax returns under Section 26AB of the Act until the issues are resolved. This extension should be automatic for all registered persons unless explicitly rejected. 2. Maintaining ‘Active’ Status: A mechanism should be implemented to ensure that taxpayers remain in an ‘Active’ status on IRIS, even if they cannot file returns due to portal issues. 3. Final Submission Recognition: To avoid the non-active status, the first submission of the return should be marked as the final submission on the IRIS portal. 4. Editable Return Fields: The KTBA has requested that Row 29 of the sales tax return be made editable to allow for necessary adjustments. The KTBA’s appeal underscores the urgent need for the FBR to address these technical and procedural challenges to prevent widespread non-compliance and undue penalties on taxpayers. The association hopes for a prompt and favorable response from the FBR to mitigate these issues.

Date: 2024-08-27

Details: KARACHI, August 27, 2024: The Federal Board of Revenue (FBR) has suspended Jawad-ul-Hassan, a BS-18 officer of the Pakistan Customs Service (PCS), for 120 days due to alleged misconduct involving pressuring authorities for a preferred posting. The decision was announced on Tuesday following an investigation into his actions. Jawad-ul-Hassan, who was serving as Deputy Collector at the Collectorate of Customs Enforcement in Dera Ismail Khan, has been suspended with immediate effect. The suspension is a result of his violation of directives issued by the Chairman of FBR and Secretary of the Revenue Division, which explicitly prohibit the exertion of undue influence to secure “choice postings.” The FBR’s notification stated that Jawad-ul-Hassan’s actions breached the Civil Servants (Efficiency & Discipline) Rules, 2020. Under Rule 5(1) of these rules, any civil servant found to be engaging in practices that undermine the integrity of the administrative process, such as attempting to manipulate postings for personal gain, is subject to disciplinary action, including suspension. The decision to suspend Jawad-ul-Hassan underscores the FBR’s commitment to maintaining transparency and accountability within its ranks. An FBR spokesperson emphasized that the organization has a zero-tolerance policy for any form of misconduct, especially when it compromises the merit-based system of postings and appointments. “The FBR is dedicated to upholding the highest standards of professional conduct among its officers,” the spokesperson stated. “Any attempt to influence postings or appointments through improper means not only contravenes official directives but also undermines the principles of fairness and integrity that are fundamental to our service.” This action is part of the FBR’s broader initiative to enforce discipline and ensure that all officers adhere strictly to the rules and regulations governing their conduct. By suspending Jawad-ul-Hassan, the FBR aims to send a clear message that such behavior will not be tolerated and that there will be consequences for those who attempt to subvert the system. The suspension is effective immediately, and Jawad-ul-Hassan will remain off-duty for a period of 120 days while the FBR continues its investigation into the matter. Further disciplinary measures may follow based on the findings of this investigation. The FBR has urged all officers and employees to conduct themselves with integrity and to comply fully with the guidelines and directives issued by the authority. This case serves as a reminder that the FBR is committed to fostering a culture of accountability and transparency within its organization, ensuring that all public servants act in the best interest of the country and its citizens.

Date: 2024-08-27

Details: MULTAN: The Federal Board of Revenue (FBR) will revise SRO 1064 of the Tajir Dost Scheme, considering the demands and concerns of traders, according to Naeem Mir, Chief Coordinator of the scheme. During a news conference held at the Circuit House on Monday, Mir announced the upcoming changes alongside Chief Commissioner Inland Revenue, Sajid Tasleem Azam, and Ahmad Hassan, the scheme’s focal person. Mir stated that they conducted an awareness session with trader representatives from the Multan division, where the representatives voiced their concerns and reservations about the scheme. “The session allowed traders to express their issues openly, and we were able to clarify many misunderstandings surrounding the Tajir Dost Scheme,” Mir said. One of the primary objections raised by the traders was regarding the tax valuation table of the scheme. In response to these concerns, the FBR has decided to amend SRO 1064. Mir emphasized that the government will not advocate for non-filers, as the tax burden unfairly falls on the salaried class. To address these issues, a new procedure for revising the evaluation table is being developed. “We are forming a committee at the commissioner level, which will include local trader representatives,” Mir explained. This committee will be responsible for determining the tax amounts for various areas and markets, taking into account the different income levels of traders within those regions. Only individuals earning an income will be required to pay taxes, ensuring fairness across the board. Mir also noted that Prime Minister Muhammad Shehbaz Sharif has instructed that consultations with traders should occur at every level. “The Chairman of the FBR has invited trader representatives for further discussions tomorrow at 3 PM,” he added. Mir emphasized that the FBR wants to include the input of trader organizations in the newly amended SRO. A simplified Urdu tax return form will also be introduced to make the process more accessible. “All objections to the scheme have been addressed, and there is no justification left for a strike against it,” Mir stated. He acknowledged that peaceful protest is a constitutional and legal right but stressed that any demonstration should be based on legitimate reasons. “No illegal actions or mistreatment will be taken against any trader. Traders are our own people and are the driving force of the state,” he added. Mir concluded by emphasizing the importance of respecting traders and being open to alternative suggestions if the scheme is not acceptable. “Every feasible suggestion will be welcomed, but discussions and negotiations are the only way forward. We urge trader representatives to show generosity and actively participate in the negotiation process,” he said. This proactive approach by the FBR aims to create a more collaborative environment between the government and traders, ensuring that the tax system is fair, transparent, and inclusive.

Date: 2024-08-26

Details: Karachi, August 26, 2024 – The Federal Board of Revenue (FBR) has issued a detailed explanation regarding the taxable salary income for the tax year 2024-25, according to the Income Tax Ordinance, 2001, updated until June 30, 2024. This clarification by the FBR provides important guidance for employees and employers about the components of salary that are subject to tax under the head “Salary.” Defining Salary Under Section 12 the FBR said that according to Section 12 of the Income Tax Ordinance, 2001, any salary received by an employee in a tax year, excluding salary exempt from tax under this Ordinance, shall be chargeable to tax under the head “Salary.” The definition of salary includes various forms of remuneration, allowances, and other payments made by an employer to an employee. The FBR specifies that salary encompasses: 1. Basic Pay and Wages: This includes basic salary, wages, and other remuneration such as leave pay, payment in lieu of leave, overtime payments, bonuses, commissions, fees, gratuities, and work condition supplements (e.g., for unpleasant or hazardous working conditions). 2. Perquisites: These are benefits provided by an employer that may or may not be convertible to money. 3. Allowances: Any allowances provided by an employer, including cost of living, subsistence, rent, utilities, education, entertainment, or travel allowances, fall under the taxable category. However, allowances solely expended in the performance of the employee’s duties are exempt. Notably, allowances paid as a fixed amount or as a percentage of salary or those not entirely spent on behalf of the employer are not considered exempt. 4. Reimbursements: Any expenses incurred by an employee but reimbursed by the employer, other than those on behalf of the employer in performing duties, are taxable. 5. Profits in Lieu of Salary: This includes any payments received as consideration for entering or changing an employment agreement, termination payments, compensation for redundancy or loss of employment, payments from provident or other funds not as repayments of employee contributions, and amounts received for restrictive covenants regarding past, present, or future employment. 6. Pensions and Annuities: These, along with any supplements to them, are considered part of the salary. 7. Other Taxable Items: Any amount chargeable under the head “Salary” as per section 14 is included. Additional Provisions and Employer Contributions The FBR also clarified that if an employer agrees to pay the tax chargeable on an employee’s salary, the employee’s income under the head “Salary” shall be grossed up by the amount of tax payable by the employer. Furthermore, no deductions are allowed for any expenditure incurred by an employee in deriving amounts chargeable to tax under the head “Salary.” For tax purposes, any amount or perquisite received by an employee is treated as income from employment, regardless of whether it is provided by the current employer, a past or prospective employer, or a third party under an agreement with the employer or the employee. Election for Tax Rates and Arrear Payments Employees receiving payments related to termination, such as redundancy compensation or golden handshake payments, may elect for these amounts to be taxed at a specific rate calculated based on the total tax paid over the previous three years. Similarly, employees receiving salary in arrears that results in higher tax rates than if the salary had been paid in the year services were rendered can opt to have the amount taxed at the rates applicable for the relevant service year. Such elections must be made by the due date for filing the employee’s return of income or employer certificate for the tax year in which the amount was received, or by a later date as allowed by the Commissioner. Conclusion This comprehensive explanation by the FBR is aimed at ensuring clarity and compliance among taxpayers, particularly employees and employers, concerning taxable salary components for the tax year 2024-25. Taxpayers are encouraged to review these guidelines carefully to understand their obligations and to seek professional advice if needed to comply with the updated tax laws.

Date: 2024-08-26

Details: ISLAMABAD: President Asif Ali Zardari has upheld the Federal Tax Ombudsman (FTO) decision granting tax relief to thousands of art students and performers in Punjab. In this regard, the president has rejected 141 representations of the Federal Board of Revenue (FBR). This decision addresses longstanding complaints about excessive tax deductions from payments made to artists participating in arts and cultural events. The president, in his order, emphasized the legal correctness of the FTO’s decision, stating, “The withholding tax is to be deducted under Section 153(1)(b) and not under Section 156 of the ordinance of 2001. In this view of the matter, the order of the Federal Tax Ombudsman is upheld. The representation is dismissed.” The controversy began when hundreds of complaints were filed with the Federal Tax Ombudsman. These complaints, primarily from students of arts and music across various academies, addressed the withholding tax deductions from the compensation they received for participating in events organized by the Punjab Council of Arts and Culture, Lahore. The deductions, at rates of 20% for filers and 40% for non-filers, imposed a significant financial burden on the students, many of whom are from low-income backgrounds. The Regional Tax Officer (RTO) had argued that these payments constituted prize money and were subject to taxation under Section 156 of the Income Tax Ordinance, 2001. However, the Punjab Council of Arts and Culture clarified that the payments were honoraria or participation fees, not prize money as suggested by the tax authorities. Upon reviewing the relevant laws, the FTO concluded that Section 156, which pertains to prizes and winnings such as those from lotteries or raffles, did not apply to the payments in question. Instead, these payments were for services rendered and fell under Section 153(1)(b) of the Income Tax Ordinance, 2001. The FTO found that the excessive taxation under section 156 was unjustified and a case of maladministration. Following the FTO’s findings, instructions were issued to the Federal Board of Revenue (FBR) to prevent the Punjab Council from applying Section 156 inappropriately. Instead, tax deductions, where applicable, should be made under Section 153(1)(b), with no withholding of tax for payments below thirty thousand Rupees in aggregate during a financial year. This ruling has provided much-needed relief to the students, ensuring that tax laws are applied correctly and fairly, particularly for those in financially vulnerable positions. The president’s dismissal of the Federal Board of Revenue’s representations further solidifies this decision, marking a win for the arts community in Punjab. Copyright Business Recorder, 2024

Date: 2024-08-25

Details: LAHORE: Seeking record after selecting a group of taxpayers for audit is unlawful, said tax practitioners. They said the practice of doing so was rampant during the time of former Chairman FBR Dr Mohammed Ashfaq Ahmed when tax authorities were involved in selecting taxpayers for audit for various tax periods and calling upon them to produce record and documents for the purpose of audit. According to them, not only the assessing officers but the competent authorities were also found issuing follow up notices, listing the record and documents required for the audit. They said most of the notices were issued under sales tax and federal excise act without mentioning any scrutiny of tax returns. Rather, taxpayers were simply informed that they have been selected for audit in exercise of powers under the relevant laws. However, none of the notices has ever assigned reasons for selecting the taxpayers for audit. According to these circles, most of such notices were challenged in the courts of law on the ground that issuance of notices calling upon to produce record and selecting them for audit at the same time was against the spirit of the law, as no reason was ever assigned to the action by the department. They further pointed out that issuing notices without giving reasons for audit was arbitrary and amounts to mala fide as well as roving and fishing inquiry into their tax affairs. They said the department was issuing notices mechanically on or about the same time, which meant they were under pressure to do so. According to the tax experts, the tax laws provide a safeguard to them when it stipulates that the tax authorities would have to give reasons for audit selection. Especially, when this selection was not through computer ballot but carried out manually by the competent authorities. It may be noted that the authorities of the Inland Revenue Service were found sharing with media the kind of pressure they were facing at the hands of the FBR high-ups. They were also found suggesting the ill-fated taxpayers to approach the courts of law for a remedy against the audit notices. Copyright Business Recorder, 2024

Date: 2024-08-25

Details: Islamabad, August 25, 2024 – The Federal Board of Revenue (FBR) has issued a draft Statutory Regulatory Order (SRO) 1290(I)/2024 on August 24, 2024, aimed at resolving tax disputes involving state-owned enterprises (SEOs) through Alternate Dispute Resolution Committees (ADRCs). According to the new directive, all SEOs must address their tax-related disputes with the FBR using ADRCs, regardless of the tax liability involved. This move is part of the FBR’s efforts to streamline the resolution process and reduce the backlog of pending cases. The issuance of SRO 1290(I)/2024 amends the existing Income Tax Rules, 2002, to accommodate the revised guidelines. The SRO defines a “state-owned enterprise” in line with the State-Owned Enterprises (Governance and Operations) Act, 2023. Under the new rules, any SEO, irrespective of the amount of tax liability, can apply for a resolution of its disputes through the ADRC mechanism. The FBR mandates that any SEO that feels aggrieved must submit a formal application to the Board for the appointment of an ADRC. This provision applies to all taxpayers, including individual entities and classes of persons seeking dispute resolution. To facilitate this process, the FBR will establish a panel comprising retired officers of the Inland Revenue Service (IRS) in BS-21 and above, chartered accountants, cost and management accountants, advocates with at least ten years of experience in taxation, and reputable business professionals. These panel members will be selected based on criteria specified in Part II of the Schedule to the rule, and they will provide secretariat support to the ADRC. Once appointed, the ADRC has the authority to review the case, gather additional information, request expert opinions, or conduct inquiries as necessary. The committee is required to reach a decision within 45 days of its formation, which can be extended by an additional 15 days if necessary, with reasons documented in writing. The decision made by the ADRC is binding on the Commissioner, provided the applicant is satisfied with the outcome and withdraws any pending appeals before a court or appellate authority. This withdrawal must be communicated to the Commissioner in the prescribed form within 60 days of receiving the ADRC’s decision. If this communication is not made within the stipulated time frame, the ADRC’s decision will not be binding on the Commissioner. Following the ADRC’s decision, the applicant must pay the taxes determined by the committee. All prior decisions and orders will be modified to reflect the committee’s ruling. Additionally, each member of the ADRC will receive a one-time remuneration of Rs 100,000 for their services. The FBR has committed to disbursing this payment within 15 days of receiving the committee’s decision from its budget allocation. This initiative by the FBR aims to provide a more efficient and structured approach to resolving tax disputes, thereby enhancing compliance and fostering a more cooperative relationship between the tax authority and state-owned enterprises.

Date: 2024-08-25

Details: Islamabad, August 25, 2024 – The salary class in Pakistan has made a substantial contribution to the country’s tax revenues, paying Rs 322 billion in income tax during the fiscal year 2023-24. This remarkable figure was disclosed by official sources in the Federal Board of Revenue (FBR), highlighting the significant role of salaried individuals in the national tax collection framework. According to the FBR, the income tax collected from the salary class grew by 22% compared to the previous fiscal year. In the fiscal year 2022-23, the salaried class had paid Rs 264 billion, indicating a substantial increase of Rs 58 billion in just one year. This rise underscores the growing importance of income tax from salaried individuals as a crucial source of revenue for the government. Breakdown of Contributions by Different Segments The FBR collects income tax from the salaried class by applying Section 149 of the Income Tax Ordinance, 2001. The breakdown of the tax paid by different segments of the salaried class during the fiscal year 2023-24 reveals interesting trends: 1. General Salary Class (Others): Individuals categorized under ‘others’ contributed the most, with a total of Rs 159.32 billion paid in income tax. This figure represents a 21.6% increase from the Rs 131 billion collected in the previous fiscal year. The ‘others’ category typically includes private-sector employees and non-corporate entities, reflecting a diverse group of taxpayers who have shown strong compliance and increased earnings. 2. Corporate Salary Class: The corporate salaried class, which includes employees of corporate entities, contributed Rs 106.52 billion in income tax for the fiscal year 2023-24. This segment saw the highest growth rate among all categories, with a 37% increase from the Rs 77.80 billion collected in the fiscal year 2022-23. This significant rise can be attributed to higher salaries in the corporate sector, possibly due to economic recovery and inflation adjustments. 3. Federal Government Employees: The income tax collected from federal government employees amounted to Rs 22.56 billion, showing a notable increase of 54% compared to the previous fiscal year’s collection of Rs 14.66 billion. This sharp rise could reflect salary increments, promotions, and increased compliance within the federal government sector. 4. Provincial Government Employees: In contrast to other segments, the tax contribution from provincial government employees declined by 18%, falling from Rs 32.22 billion in the fiscal year 2022-23 to Rs 26.34 billion in 2023-24. The decrease in tax collection from this segment may be due to factors such as budgetary constraints or changes in provincial salary structures. Implications and Future Outlook The substantial tax contributions from the salaried class are crucial for Pakistan’s fiscal stability and development. The increase in income tax collection aligns with the government’s broader strategy to enhance revenue collection and reduce dependency on indirect taxes. By focusing on direct taxes such as income tax, the government aims to create a more equitable tax system that ensures higher-income earners pay their fair share. Moreover, the significant growth in tax contributions from the corporate salary class suggests a robust economic recovery and a potentially expanding job market. However, the decline in contributions from provincial government employees indicates a need for targeted measures to enhance compliance and revenue generation in that sector. The FBR’s emphasis on enforcing tax laws and improving collection mechanisms has evidently yielded positive results. Moving forward, continued efforts to broaden the tax base, enhance compliance, and streamline collection processes will be essential in sustaining and increasing the revenue generated from the salaried class. As the fiscal year 2024-25 progresses, the FBR will likely continue to refine its strategies to maximize tax compliance and revenue collection, ensuring a more stable and prosperous economic future for Pakistan.

Date: 2024-08-25

Details: Karachi, August 25, 2024 – The Federal Board of Revenue (FBR) has provided a detailed explanation regarding the computation of taxable income in Pakistan for the tax year 2024-25. The FBR’s guidelines, outlined in the Income Tax Ordinance, 2001 (updated until June 30, 2024), provide clarity on how individuals and entities should calculate their taxable income, which forms the basis for tax liabilities. The computation process is detailed in Sections 9, 10, and 11 of the Ordinance, each defining a critical aspect of the taxable income calculation. Section 9: Taxable Income According to Section 9, taxable income is defined as the total income of a person for a tax year, as specified under clause (a) of Section 10. This total income is then reduced (but not below zero) by any deductible allowances under Part IX of the Ordinance. Essentially, this section establishes that a taxpayer’s taxable income is the sum of all income heads minus any eligible deductions or allowances, ensuring that the taxable income cannot fall below zero. Section 10: Total Income Section 10 explains that the total income of a person for a tax year is the aggregate of: • Income under all heads for the year: This includes earnings from various sources such as salary, business, property, and investments. • Income exempt from tax: This encompasses income that is exempt under specific provisions of the Ordinance, reflecting earnings that are not subject to tax. This section provides a comprehensive definition of total income by accounting for all possible income sources and tax exemptions. It is crucial for taxpayers to accurately report their total income, including exempt income, to avoid discrepancies and ensure compliance. Section 11: Heads of Income Section 11 categorizes income under five distinct heads: 1. Salary: Earnings derived from employment, including wages, bonuses, and other compensation. 2. Income from Property: Income generated from the ownership of property, such as rental income. 3. Income from Business: Profits earned from business operations, including self-employment. 4. Capital Gains: Profits from the sale or transfer of capital assets like stocks, bonds, or real estate. 5. Income from Other Sources: Any other income not classified under the above heads, such as dividends, interest, and lottery winnings. Each head of income is subject to specific rules for calculation. The income under each head is computed by adding up all amounts that are taxable under that head for the year and subtracting any allowable deductions. If the deductions under a particular head exceed the income, it results in a loss for that head, which is then addressed according to Part VIII of the Ordinance. Furthermore, the computation differs based on residency status: • Resident Individuals: The income is calculated by including both Pakistan-source income and foreign-source income. • Non-Resident Individuals: Only Pakistan-source income is considered for tax purposes. Implications for Taxpayers The updated ordinance provides a clear framework for taxpayers to calculate their taxable income for the tax year 2024-25. Understanding these sections is essential for taxpayers to ensure accurate filings and avoid potential penalties. The inclusion of all income types and proper deduction application is vital for an accurate tax assessment. Taxpayers are encouraged to consult with tax professionals or refer to the FBR’s guidelines to ensure compliance and optimize their tax liabilities. The FBR’s detailed breakdown allows for a more transparent and systematic approach to income tax computation, fostering greater compliance and understanding among taxpayers in Pakistan. As the tax landscape continues to evolve, staying informed of such updates is crucial for all taxpayers, ensuring that they meet their obligations while effectively managing their finances.

Date: 2024-08-23

Details: KARACHI: The Pakistan Iron & Steel Merchants Association (PISMA) has issued an urgent appeal to the Federal Board of Revenue (FBR), calling for the immediate withdrawal of a recently implemented 2.5 percent withholding tax. This demand comes in the wake of a reported 80 percent plunge in sales volume within the iron and steel sector. In a letter to the FBR chairman, the PISMA outlined the devastating impact of the tax measure, which was introduced in the budget 2024-25. According to the association, the new withholding tax, levied under Section 236 and targeting non-filers, has decimated their business, reducing it to a mere 20 percent. The PISMA said that approximately 90 percent of their clientele are non-filer and the financial ramifications of this tax are significant, adding between 7,000 to 7,500 Pakistani rupees per metric ton to the cost. Therefore, the collection of this additional tax is impossible, as buyers are unwilling to shoulder the extra expense. Moreover, there are also concerns that this measure could inadvertently encourage corruption. The PISMA also highlighted the challenging position of distributors, who typically receive a 1.5 percent commission on sales. After factoring in a 12 percent income tax deduction, their net commission amounts to just 1.32 percent, or between 3,000 to 3,500 rupees per metric ton. This slim margin leaves distributors unable to absorb the new tax burden, the letter said. Given the steel sector’s substantial contribution to national tax revenues, the PISMA is strongly urging the FBR to rescind the 2.5 percent withholding tax under section 236H for distributors. Meanwhile, industry experts warn of potential widespread closures if the tax remains in effect, as many distributors may find it financially untenable to continue operations under these conditions. Copyright Business Recorder, 2024 Prime Minister of Pakistan for their implementation. Copyright Business Recorder, 2024

Date: 2024-08-23

Details: Karachi, August 26, 2024 – The Federal Board of Revenue (FBR) has issued a detailed explanation regarding the taxable salary income for the tax year 2024-25, according to the Income Tax Ordinance, 2001, updated until June 30, 2024. This clarification by the FBR provides important guidance for employees and employers about the components of salary that are subject to tax under the head “Salary.” Defining Salary Under Section 12 the FBR said that according to Section 12 of the Income Tax Ordinance, 2001, any salary received by an employee in a tax year, excluding salary exempt from tax under this Ordinance, shall be chargeable to tax under the head “Salary.” The definition of salary includes various forms of remuneration, allowances, and other payments made by an employer to an employee. The FBR specifies that salary encompasses: 1. Basic Pay and Wages: This includes basic salary, wages, and other remuneration such as leave pay, payment in lieu of leave, overtime payments, bonuses, commissions, fees, gratuities, and work condition supplements (e.g., for unpleasant or hazardous working conditions). 2. Perquisites: These are benefits provided by an employer that may or may not be convertible to money. 3. Allowances: Any allowances provided by an employer, including cost of living, subsistence, rent, utilities, education, entertainment, or travel allowances, fall under the taxable category. However, allowances solely expended in the performance of the employee’s duties are exempt. Notably, allowances paid as a fixed amount or as a percentage of salary or those not entirely spent on behalf of the employer are not considered exempt. 4. Reimbursements: Any expenses incurred by an employee but reimbursed by the employer, other than those on behalf of the employer in performing duties, are taxable. 5. Profits in Lieu of Salary: This includes any payments received as consideration for entering or changing an employment agreement, termination payments, compensation for redundancy or loss of employment, payments from provident or other funds not as repayments of employee contributions, and amounts received for restrictive covenants regarding past, present, or future employment. 6. Pensions and Annuities: These, along with any supplements to them, are considered part of the salary. 7. Other Taxable Items: Any amount chargeable under the head “Salary” as per section 14 is included. Additional Provisions and Employer Contributions The FBR also clarified that if an employer agrees to pay the tax chargeable on an employee’s salary, the employee’s income under the head “Salary” shall be grossed up by the amount of tax payable by the employer. Furthermore, no deductions are allowed for any expenditure incurred by an employee in deriving amounts chargeable to tax under the head “Salary.” For tax purposes, any amount or perquisite received by an employee is treated as income from employment, regardless of whether it is provided by the current employer, a past or prospective employer, or a third party under an agreement with the employer or the employee. Election for Tax Rates and Arrear Payments Employees receiving payments related to termination, such as redundancy compensation or golden handshake payments, may elect for these amounts to be taxed at a specific rate calculated based on the total tax paid over the previous three years. Similarly, employees receiving salary in arrears that results in higher tax rates than if the salary had been paid in the year services were rendered can opt to have the amount taxed at the rates applicable for the relevant service year. Such elections must be made by the due date for filing the employee’s return of income or employer certificate for the tax year in which the amount was received, or by a later date as allowed by the Commissioner. Conclusion This comprehensive explanation by the FBR is aimed at ensuring clarity and compliance among taxpayers, particularly employees and employers, concerning taxable salary components for the tax year 2024-25. Taxpayers are encouraged to review these guidelines carefully to understand their obligations and to seek professional advice if needed to comply with the updated tax laws.

Date: 2024-08-22

Details: ISLAMABAD: Chairman Federal Board of Revenue (FBR) Rashid Mahmood Langrial Wednesday said that cleansing of retrieved data is necessary to make it actionable for identifying potential taxpayers. The second meeting of the Task Force on Digitalisation of Federal Board Revenue was held Wednesday at FBR Headquarters which was chaired by Minister of State for Finance and Revenue Ali Pervez Malik and co-chaired by DG C41, Major General Syed Ali Raza. Chairman FBR called for enabling FBR to optimally utilise IT services of PRAL by transforming the latter into an efficient entity. He stressed upon focusing on improving other areas along-with digitising FBR. He said that cleansing of retrieved data is also necessary to make it more actionable. He expressed optimism that FBR is committed to enhance revenue collection through implementation of data automation and other innovative solutions. The meeting was also attended by Chairman FBR Rashid Mahmood Langrial, Members and other senior officers of the Board along-with Task Force members including, among others, Ghazi Akhtar from Lotte Akhtar Beverages Ltd, Javed Ashraf from NADRA and Fareed Zafar from LUMS while Asif Peer from Systems Ltd, Amir Malik, CEO PRAL, Waqasul Hasan and Tania Aidrus joined virtually. In his opening remarks, State Minister for Finance recapitulated that the Task Force is mandated to come up with practicable recommendations to transform FBR into a modern and digitalised organisation to achieve sustained growth in national revenues. He also welcomed Dr Javed Ashraf from NADRA as the newest member of the Task Force. On the occasion, Conveners of the Working Groups, designated in the previous meeting, gave separate presentations along-with their initial findings on their assigned area/ TORs. Starting off, Asif Peer gave presentation on restructuring of PRAL focusing on its governance structure, talent & capabilities, working model and technology. He also presented the analysis and initial findings to turn PRAL into a high performing organisation. Dr Javed Ashraf gave his Group’s presentation on how to retrieve and integrate data from relevant organisations to develop a systematic and organised data profile to identify potential taxpayers. His presentation also suggested short, medium and long term recommendations to achieve the desired objectives. This was followed by Ghazi Akhtar’s presentation on supply chain automation and Track & Trace System (TTS) which, among others, laid emphasis on utilising the already available data to bring wholesalers into the tax net as well as make TTS more efficacious and operative to effectively collect due taxes from the relevant sectors. Tania Aidrus gave presentation on last TOR; i.e., trade data sharing interface with trading partners wherein it was stated that true value and quantity of trade data is not captured in Customs system of WEBOC/ PSW. She also presented her Group’s initial analysis. Speaking on the occasion, Minister of State appreciated the initial findings and recommendations of the Working Groups. He emphasized the need to harvest the already available data to identify potential taxpayers and bring them under the tax net for enhanced revenue collection and broadening of tax base. He was of the view that improving visibility of data integration will bring transparency in the system. He also directed to invite representatives from Ministries of Foreign Affairs & Commerce, SECP and State Bank of Pakistan in the next meeting. The presentations were followed by extensive discussion among the Task Force members. The forum decided that all the Working Groups will further firm up their initial findings and submit the final recommendations pertaining to their relevant area (s) in the next meeting of the Task Force which will be then presented to the Prime Minister of Pakistan for their implementation. Copyright Business Recorder, 2024

Date: 2024-08-22

Details: Karachi, August 22, 2024 – The Federal Board of Revenue (FBR) has officially set the income tax rates applicable to shipping and air transport services operated by non-resident entities. These rates, established under the Income Tax Ordinance, 2001, which was updated until June 30, 2024, outline the tax obligations for foreign operators conducting business within Pakistan’s borders. The income generated by non-resident persons through shipping and air transport is governed under Section 7 of the Ordinance. This section specifies the circumstances under which tax is imposed and details the applicable rates for different types of transport services. According to the FBR, the tax structure is designed to cover all income generated by foreign operators from the carriage of passengers, livestock, mail, or goods, regardless of whether the income is received within Pakistan or internationally. The provisions under Section 7 of the Income Tax Ordinance are as follows: 1. Scope of Taxation: The FBR mandates that a tax shall be imposed on every non-resident person engaged in the business of operating ships or aircraft, whether as owners or charterers. The tax applies to two primary categories of income: o The gross amount received or receivable for the carriage of passengers, livestock, mail, or goods that are embarked within Pakistan, regardless of where the payment is received. o The gross amount received or receivable within Pakistan for the carriage of passengers, livestock, mail, or goods that are embarked outside Pakistan. 2. Tax Computation: The income tax on non-resident operators is calculated by applying the relevant rate to the gross amounts described above. The rates, as specified by the FBR, vary based on the type of transport service: o Shipping Income: Non-resident operators involved in shipping are subject to an income tax rate of 8% on the gross amount received or receivable for their services. o Air Transport Income: For air transport operators, the income tax rate is set at 3% of the gross amount received or receivable. These tax rates are outlined in Division V of Part I of the First Schedule of the Income Tax Ordinance, providing a clear framework for the taxation of foreign shipping and air transport operators. The FBR’s decision to implement these specific rates reflects an effort to streamline the taxation process for foreign entities operating in Pakistan. By establishing clear guidelines and rates, the FBR aims to ensure that non-resident operators contribute their fair share of taxes on income generated from activities within Pakistan. This move is also intended to create a level playing field for local and foreign operators, ensuring that all businesses involved in the transport of goods and passengers adhere to the same tax obligations. The announcement of these tax rates is expected to impact the financial planning of foreign shipping and air transport companies operating in Pakistan. As these companies adjust to the new tax regime, they will need to factor in these rates when calculating their operating costs and pricing strategies for services offered in the country. The FBR’s initiative to clarify and enforce these tax rates highlights the government’s ongoing efforts to enhance revenue collection from foreign entities while maintaining a fair and transparent tax system. This measure is likely to be closely monitored by stakeholders in the shipping and air transport industries as they navigate the implications of these new tax obligations.

Date: 2024-08-21

Details: Karachi, August 20, 2024 – The Federal Board of Revenue (FBR) has recently outlined the income tax rates applicable to payments made to non-residents during the tax year 2024-25. These details are part of the updated Income Tax Ordinance, 2001, which has been revised and enforced as of June 30, 2024. The ordinance provides clear guidance on the tax obligations for both individuals and businesses making payments to non-residents for various services. Key Provisions Under Section 6 Section 6 of the Income Tax Ordinance focuses specifically on tax obligations related to certain payments made to non-residents. This section is crucial for businesses and individuals engaging in international transactions, especially those involving services provided by foreign entities. 1. Taxable Payments: According to Section 6, a tax is imposed on all non-resident persons receiving Pakistan-source income from royalties, fees for offshore digital services, money transfer operations, card network services, payment gateway services, interbank financial telecommunication services, or technical services. The tax rate is specified in Division IV of Part I of the First Schedule of the ordinance. 2. Tax Calculation: The tax is computed based on the gross amount of the payments mentioned in the subsection. This means the tax is levied on the total payment without allowing any deductions for expenses or costs incurred in generating the income. 3. Exemptions and Special Cases: Certain exceptions are outlined in the ordinance: o Permanent Establishment: If the property or service related to the payment is connected with a permanent establishment in Pakistan of the non-resident, the tax under this section does not apply. For instance, if a non-resident provides technical services through a permanent office in Pakistan, the payment might not be subject to this tax. o Exempt Royalties and Fees: Any royalty or fee for technical services exempted under other provisions of the ordinance is also not subject to tax under Section 6. 4. Business Income Attribution: For Pakistani-source royalties or fees that are exempt due to a connection with a permanent establishment, the income is treated as business income attributable to that establishment. This income is then subject to the applicable corporate tax rates instead of the withholding tax rates. Rate of Tax on Payments The FBR has specified the tax rates applicable to different types of payments made to non-residents: • Royalties and Technical Services: A tax rate of 15% is imposed on the gross amount of any royalty or fee for technical services. • Other Services: For all other types of services, a 10% tax rate is applied. These rates are crucial for businesses operating in Pakistan and engaging in transactions with foreign entities, as failure to comply with these tax requirements can lead to penalties and additional liabilities. Conclusion The updated Income Tax Ordinance provides clarity on the tax obligations for payments to non-residents, ensuring that Pakistan-source income is appropriately taxed. Businesses and individuals making such payments must carefully consider these provisions to remain compliant with the law. As international transactions become increasingly common, understanding and adhering to these tax obligations is essential for maintaining good standing with the FBR and avoiding any legal complications.

Date: 2024-08-20

Details: ISLAMABAD: Islamabad High Court (IHC) has issued a show cause notice to the Commissioner-Inland Revenue (IR) Corporate Tax Office, Islamabad for filing false statements before the IHC in a matter of implementation of orders passed by Federal Tax Ombudsman (FTO). It is reliably learnt that a strict order has been passed by IHC in a contempt of court petition against FBR Commissioner, CTO, Islamabad, to appear in person on August 29, 2024. IHC order states “Let a show-cause notice be issued to respondent (Muhammad Faisal Mushtaq Dar, CIR, Islamabad), to appear in person and explain to the Court as to why contempt proceedings should not be initiated against him for making a false representation in Writ Petition and for failure to submit to the Court that the recommendation made by FTO in order to revisit the order passed under section 120(4) has not been complied with”. When contacted tax lawyer Waheed Shahzad Butt, who represented the case of the company, told Business Recorder that earlier in this case appellate tribunal inland revenue (ATIR) observed that it is fundamental that all statutes be applied with fairness and justice, and public functionaries are constitutionally mandated to act in a just and fair manner. The CTO is involved in deceiving tax system and circumventing the course of justice in violation of the directions of the Chief Justice of IHC in tax refunds matters. Unfortunately, in the instant case CIR, Add-CIR and ACIR blatantly disregard the binding judgments of the Apex Court without any fear of accountability. There is no room for “unfettered discretion” in the fiscal laws of this country, and arbitrary exercise of discretionary powers must be invalidated Tax Department made a false representation to the Court on the basis of which the petition was disposed of. Petitioner stated that a complaint filed before the FTO, which was decided, in which it was recorded that the petitioner had filed its tax return for the tax year 2018 and subsequently directed the Tax Department to revisit its order passed under section 120. Copyright Business Recorder, 2024

Date: 2024-08-20

Details: Islamabad, August 20, 2024 – The Federal Board of Revenue (FBR) has issued fresh instructions for the submission of Performance Evaluation Reports (PERs) for all employees of the Inland Revenue Service and Pakistan Customs Service. The new directives, released on Tuesday, emphasize the strict adherence to specific deadlines and underscore the importance of timely submissions for the smooth functioning of promotion processes and other administrative matters. In an official communication, the FBR mandated that all employees, including those in field formations, must submit their PERs according to the following timelines: • Reporting Officer: By July 20. • Countersigning Officer: By July 31. The FBR highlighted that, despite repeated reminders and instructions issued over time, these deadlines have not been consistently followed. The failure to meet these deadlines has led to significant delays in the evaluation of officers due for promotion, mandatory training for promotion, or postings abroad, as their performance cannot be assessed judiciously without up-to-date PERs. Serious Notice of Non-Compliance Taking serious notice of the situation, the FBR has instructed all officers and officials under various administrative controls to strictly adhere to the aforementioned deadlines. The competent authority has issued further guidance for officers expected to reach superannuation. In such cases, the officers must submit their PERs within the following timeframes: • Reporting Officer: Within 20 days after the date of superannuation. • Countersigning Officer: Within 15 days after the period specified for the Reporting Officer. For these cases, the Countersigning Officer is required to submit the PERs to the Employee Relations Management (ERM) section of the FBR within 15 days of receiving them. Ensuring Compliance and Accountability To ensure compliance with these directives, the FBR has introduced a new requirement: all officers must submit a “Certificate of Initiation of PER” to the ERM section on the same day they submit their PERs to their respective Reporting Officers. This certificate will serve as a record for future reference and will help ensure that the deadlines are being met without fail. The FBR has also warned that any undesirable consequences arising from non-compliance with the timelines will be the responsibility of the respective officer. Unless there is an emergency beyond control, failure to meet the deadlines will be construed as “Inefficiency” under the Efficiency and Discipline (E&D) Rules 2020. In such cases, the inefficiency will be recorded in the personal dossier of the concerned officer and will be dealt with according to the relevant rules. Certification Requirement for Retiring Officers Furthermore, the FBR has directed that officers reaching their superannuation from now onwards must submit a certificate along with their pension papers. This certificate must confirm that no PER, in the capacity of either Reporting or Countersigning Officer, is pending with them. The new instructions by the FBR reflect its commitment to maintaining a rigorous evaluation process for its employees. By enforcing these deadlines, the FBR aims to streamline its operations and ensure that all administrative procedures, including promotions and postings, are conducted efficiently and without unnecessary delays.

Date: 2024-08-20

Details: KARACHI, August 20, 2024 – The Federal Board of Revenue (FBR) has announced updated tax rates on dividend income for the tax year 2024-25, as per the amendments made to the Income Tax Ordinance, 2001, updated on June 30, 2024. These changes are poised to impact various categories of dividend recipients, from individual investors to large corporate entities. The taxation of dividend income is governed by Section 5 of the Income Tax Ordinance, 2001. Under this section, a tax is imposed on every person receiving a dividend from a company, subject to the specified rates detailed in Division III of Part I of the First Schedule. Key Provisions of Section 5: Tax on Dividends 1. Tax Rate Application: The tax on dividend income is calculated by applying the relevant rate to the gross amount of the dividend received. However, dividends that are exempt under the Ordinance are not subject to this tax. 2. Tax Rates for Different Dividend Sources: o Independent Power Producers (IPPs): A tax rate of 7.5% is levied on dividends paid by IPPs, where such dividends are a pass-through item under an Implementation Agreement, Power Purchase Agreement, or Energy Purchase Agreement. These dividends are reimbursed by the Central Power Purchasing Agency (CPPA-G) or its successor entities. o Mutual Funds and Real Estate Investment Trusts (REITs): The general tax rate for dividends received from mutual funds and REITs is set at 15%. However, if the mutual fund derives 50% or more of its income from profit on debt, the tax rate increases to 25%. o REIT Schemes and Special Purpose Vehicles (SPVs): Dividends received by a REIT scheme from an SPV are exempt from tax, while a 35% tax rate applies to dividends received by others from an SPV as defined under the Real Estate Investment Trust Regulations, 2015. o Other Companies: A 25% tax rate is imposed on dividends received from a company where no tax is payable by that company due to income exemptions, carry forward of business losses, or claims of tax credits under the relevant parts of the Ordinance. Implications for Taxpayers These updated rates are designed to ensure that the tax system remains equitable, reflecting the varying risk profiles and income sources of different entities. The FBR’s move to clarify and update these rates underscores the government’s commitment to streamlining tax processes while ensuring compliance with the broader objectives of fiscal policy. Taxpayers are advised to review these changes carefully, particularly those involved in the power generation, mutual funds, and real estate sectors, as these areas have seen notable adjustments. Ensuring accurate compliance with the new tax rates will be critical to avoid any potential penalties or issues with tax filings for the 2024-25 fiscal year.

Date: 2024-08-19

Details: Karachi, August 19, 2024 – The Karachi Tax Bar Association (KTBA) has raised concerns over ambiguities in the income tax collection mechanism for sales within the supply chain, as stipulated under the Finance Act, 2024. In a detailed letter addressed to Hameed Ateeq Sarwar, Member Inland Revenue Policy at the Federal Board of Revenue (FBR), KTBA President Zyed Zafar Ahmed pointed out that the recent amendments have broadened the scope of income tax collection, extending it to all sectors of the economy, compared to the previous requirement which was limited to twenty-two specific sectors. The letter specifically highlights that Sections 236G and 236H of the Income Tax Ordinance, 2001, which govern the collection of income tax on sales, have now become applicable to all sectors of the economy. This change affects manufacturers, commercial importers, distributors, and dealers, creating a series of challenges and ambiguities for both tax professionals and businesses. Direct Sales to End Consumers KTBA has outlined several specific scenarios where the application of these provisions remains unclear. The first scenario involves direct sales to end consumers by manufacturers or commercial importers. According to KTBA, when a sale is made directly to the end consumer, rather than to a dealer, distributor, wholesaler, or retailer, the provisions of Sections 236G and 236H should not apply. The association argues that the intention of these sections is to cover transactions within the supply chain and not direct-to-consumer sales, thus seeking clarification from the FBR on this matter. Sales to Businesses for Own Consumption Another area of ambiguity involves sales made to businesses for their own consumption rather than for resale. The KTBA letter explains that when a business purchases goods for internal use, and not for further trading within the supply chain, such transactions should be exempt from the advance tax collection requirements under Sections 236G and 236H. The association contends that businesses, in this context, act as the end consumer and therefore should not be subject to the same tax obligations as those involved in the resale process. Contract Manufacturing The issue of contract manufacturing also presents complications. In many industries, products are manufactured by toll manufacturers or contract manufacturers based on the specifications and brand requirements of another party. KTBA highlights that both the party contracting the manufacturing and the toll manufacturer are considered manufacturers under the law. Consequently, the association argues that the advance tax collection provisions should not apply to sales made by contract manufacturers to the principal manufacturer. Instead, the tax obligation should commence when the principal manufacturer sells the goods onward. Supplies to Non-Registered Persons Lastly, KTBA raises concerns about the applicability of Sections 236G and 236H in cases where goods are supplied to persons not registered as dealers, distributors, or wholesalers. The association’s position is that such transactions should not trigger the advance tax collection requirements, as the provisions are intended to regulate transactions within the formal supply chain. Request for Clarification The KTBA has urged the FBR to provide clear guidance on these issues, emphasizing that such clarification is essential to resolving the ambiguities and ensuring proper compliance. The association has also offered to make a detailed presentation to the FBR to further discuss these concerns and seek a resolution. The KTBA’s letter underscores the need for a more precise interpretation of the new tax provisions to avoid unnecessary complications for businesses and ensure the smooth implementation of the Finance Act, 2024. As businesses grapple with the expanded tax obligations, the KTBA’s request for clarification from the FBR highlights the importance of clear and unambiguous tax regulations in fostering a fair and predictable business environment.

Date: 2024-08-18

Details: Karachi, August 18, 2024 – The Federal Board of Revenue (FBR) has unveiled the latest position on the super tax applicable for the tax year 2024-25, in accordance with the Income Tax Ordinance, 2001, updated up to June 30, 2024. The super tax, imposed under Section 4C of the Income Tax Ordinance, 2001, targets high-income individuals and entities, reflecting the government’s continued efforts to increase revenue through progressive taxation measures. Overview of Section 4C – Super Tax on High-Earning Persons The super tax under Section 4C is applicable from the tax year 2022 onwards. It is imposed at varying rates specified in Division IIB of Part I of the First Schedule of the Income Tax Ordinance, targeting the income of individuals and entities falling within specific income brackets. The definition of “income” for the purpose of this tax is comprehensive, including: 1. Profit on Debt, Dividends, Capital Gains, Brokerage, and Commission: These are direct income sources subject to the super tax. 2. Taxable Income Excluding Brought Forward Losses: Taxable income under Section 9 of the Ordinance, excluding any brought forward depreciation and business losses. 3. Imputable Income: As defined under clause (28A) of Section 2, excluding income mentioned in the first category. 4. Income Computed Under Specific Schedules: This includes income computed under the Fourth, Fifth, Seventh, and Eighth Schedules of the Ordinance, excluding brought forward depreciation, amortization, and business losses. Tax Rates for Various Income Brackets The FBR has specified the super tax rates under Section 4C, which are tiered based on income levels: 1. Income Not Exceeding Rs. 150 Million: No super tax is applicable for this bracket from the tax year 2023 onwards. 2. Income Between Rs. 150 Million and Rs. 200 Million: A 1% super tax is applicable. 3. Income Between Rs. 200 Million and Rs. 250 Million: A 2% super tax is imposed. 4. Income Between Rs. 250 Million and Rs. 300 Million: The tax rate is 3%. 5. Income Between Rs. 300 Million and Rs. 350 Million: A 4% super tax is levied. 6. Income Between Rs. 350 Million and Rs. 400 Million: The tax rate increases to 6%. 7. Income Between Rs. 400 Million and Rs. 500 Million: An 8% super tax is applicable. 8. Income Exceeding Rs. 500 Million: The highest super tax rate of 10% is applied. Special Provisions and Industry-Specific Rates The FBR has also outlined specific provisions for certain industries and sectors. For the tax year 2022, entities involved in industries such as airlines, automobiles, beverages, cement, chemicals, cigarettes and tobacco, fertilizers, iron and steel, LNG terminals, oil marketing, oil refining, petroleum and gas exploration, pharmaceuticals, sugar, and textiles are subjected to a 10% super tax if their income exceeds Rs. 300 million. Additionally, banking companies are also subject to a 10% super tax if their income exceeds Rs. 300 million, but this rate applies from the tax year 2023 onwards. Compliance and Payment Procedures Taxpayers liable to pay the super tax must comply with the procedures outlined in the Income Tax Ordinance. The tax is payable on the date and in the manner specified in Section 137(1) of the Ordinance. If the taxpayer fails to pay the due tax, the Commissioner has the authority to determine the tax payable through an order in writing, followed by issuing a notice of demand specifying the tax amount and the time frame for payment. In cases of non-compliance, the Commissioner is empowered to recover the tax payable under sub-section (1) through the provisions of Part IV, X, XI, and XII of Chapter X, as well as Part I of Chapter XI of the Ordinance. The provisions of Section 147 also apply to the tax payable under this section, ensuring stringent enforcement of the super tax collection. Implications for Taxpayers and Revenue Generation The updated super tax structure is part of the FBR’s broader strategy to enhance revenue collection by targeting high-income individuals and entities. This move is expected to generate significant additional revenue for the government, particularly from sectors that have shown robust profitability in recent years. Taxpayers falling within the specified income brackets are urged to carefully review the updated provisions and ensure timely compliance to avoid penalties. The FBR has also indicated that it may introduce further rules and regulations to facilitate the implementation of Section 4C, which will be notified through official gazette notifications. The introduction of the super tax reflects the government’s commitment to progressive taxation, where higher earners contribute more towards the country’s fiscal needs. As the FBR continues to refine its tax policies, businesses and individuals are encouraged to stay informed and adapt to the evolving tax landscape.

Date: 2024-08-16

Details: ISLAMABAD: The Federal Board of Revenue (FBR) has sought asset details of all Grade-17 to 22 officers of Inland Revenue Service and Pakistan Customs Service, it is learnt. This is a legal requirement for the tax officials to submit details of assets with the FBR on an annual basis. The declarations are kept confidential with the FBR, but the FBR chairman can access the details of assets of these officials. The deadline of assets declarations has already expired in July 2024. When asked whether the new FBR chairman has sought details of assets of these officials, a senior FBR official told Business Recorder that it is an annual exercise and no specific instructions have been issued by the FBR chairman. Sources informed that tax authorities have directed the FBR Member Administration to furnish assets details of all IRS and customs officers. At the same time, reshuffling of tax officials of Inland Revenue Service and Pakistan Customs Service is also expected in coming days. Presently, the workforce of the FBR comprises over 20,000 employees in BS-17 to BS-22 with 1,275 officials in Inland Revenue Service and around 600 officials in Pakistan Customs Service. Sources said that the officers of Inland Revenue Service and Customs submit their assets details along with income tax returns every year. On the other hand, the officers of other cadres of civil services rarely file income tax returns as well as asset details with the Establishment Division despite the fact the human resource department issue directions to all departments on start of every fiscal year. Every year, the FBR obtained Declaration of Assets and Liabilities from all the officers of Inland Revenue Services (IRS) and Pakistan Customs Services (PCS) by the end of fiscal year. A per Establishment Division’s office memorandum, under Rule 12 of the Government Servant (Conduct) Rules, 1964 and administrative instructions issued by the Establishment Division from time to time, the Declaration of Assets and Liabilities are required to be submitted by all the officers/officials of the FBR. Copyright Business Recorder, 2024

Date: 2024-08-16

Details: ISLAMABAD: The Senate Standing Committee on Housing and Works discussed the recent hike in taxes from 43 per cent to 63 per cent, which is believed to have played a significant role in the lack of investor interest in the recent auction of commercial plots. The committee was chaired by Senator Nasir Mehmood, where the committee reviewed the progress of ongoing projects and addressed various challenges. During the session, the Director General of FGEHA provided updates on the development of Sectors F-12 and G-12, revealing that an award of 7.23 million per kanal was announced on April 23, 2023. He also highlighted complications with landowners in Sectors F-14 and F-15, stating that weekly hearings are being held and that Sector F-12 will be launched once the Supreme Court delivers its judgment. The progress and challenges in Sectors G-13 and G-14 were also discussed. The committee members scrutinised the details of the commercial plot auction held on August 7, 2024. It was noted that during its 31st meeting on January 31, 2024, the Executive Board of FGEHA approved a proposal to divide a 13-kanal plot from the Federal Government Employees Housing Foundation (EHFPRO) project into three smaller plots to maximise revenue in line with current market trends. Despite extensive advertising efforts, including below-the-line promotions, the slow progress of the project and heavy taxation deterred potential investors, leading to an unsuccessful auction. Senator Khalida Ateeb expressed concern over the ineffective results despite substantial advertising expenditures, while Chairman Senator Nasir Mehmood urged the formulation of a pragmatic strategy to overcome the current stagnation and achieve progress. The committee also discussed the illegal occupation of Pak PWD land in Murree by the TMA Murree (Punjab Government), which is part of a 36-kanal project. Officials reported that legal action has been initiated and that the matter has been brought to the prime minister’s attention for swift resolution. Additionally, Senator Saifullah Abro inquired about officers on deputation and the actions taken against those involved in misconduct. The Minister for Housing and Works assured that appropriate measures are being implemented and that the list of officers would be shared with the committee. Lastly, the committee addressed a query from Senator Raja Nasir regarding the allocation of religious spaces, such as Imam Bargahs, in FGEHA sectors. Officials affirmed that religious sanctity is upheld during the allocation process. The chairman directed that clear rules and laws be established to ensure the sanctity of all religious communities is respected in future allocations. The meeting was attended by several senators, including Muhammad Aslam Abro, Khalida Ateeb, Saifullah Sarwar Khan Nyazee, Husna Bano, Hadiyatullah Khan, Saifullah Abro, and Raja Nasir Abbas, as well as the minister and secretary of Housing and Works, the Director General of the Federal Government Employees Housing Authority (FGEHA), and senior officials from the ministry and FGEHA. Copyright Business Recorder, 2024

Date: 2024-08-16

Details: August 16, 2024 Karachi, August 16, 2024 – In a move aimed at alleviating the pressures faced by businesses amid widespread internet issues, the Federal Board of Revenue (FBR) has announced an extension for the filing of sales tax returns for July 2024. The new deadline, previously set for August 18, 2024, has been pushed to August 23, 2024, according to a notification issued today by the FBR. The decision comes as a response to ongoing internet disruptions that have significantly hampered digital access and efficiency across Pakistan. The IT sector, already grappling with connectivity challenges, has reported substantial delays and difficulties, making timely compliance with tax regulations a formidable challenge for many businesses. The FBR’s extension aims to address these issues by granting additional time for taxpayers to complete their online submissions. As the filing process for sales tax returns is exclusively managed through digital platforms, the slow internet speeds have created a substantial barrier, impacting numerous businesses’ ability to meet the original deadline. Tax experts have reacted positively to the FBR’s decision. They argue that the extension is a critical step in ensuring that businesses are not unduly penalized for circumstances beyond their control. “The FBR’s decision to extend the deadline is a commendable move that will undoubtedly help in restoring the confidence of taxpayers,” said Ahmed Khan, a leading tax consultant. “This gesture acknowledges the real-world challenges faced by businesses and demonstrates the FBR’s commitment to supporting the economic environment.” The extension is expected to ease the burden on businesses struggling to adapt to the current digital constraints. With additional time, companies will be better positioned to navigate the complexities of the online filing system without the added pressure of meeting the original deadline. This extension also highlights the ongoing need for robust infrastructure improvements to support the digital economy. As Pakistan continues to transition to more technology-driven processes, the reliability of internet services remains a crucial factor in the efficiency of administrative operations. The FBR’s proactive approach in adjusting deadlines to accommodate technical difficulties underscores a broader commitment to fostering a more manageable and supportive tax compliance environment. As businesses prepare for the extended deadline, the focus now shifts to ensuring that necessary infrastructure improvements are prioritized to prevent similar issues in the future. The new deadline for the submission of July 2024 sales tax returns is now August 23, 2024, providing a much-needed respite for taxpayers navigating the current digital landscape.

Date: 2024-08-16

Details: Karachi, August 16, 2024 – The Federal Board of Revenue (FBR) has rolled out comprehensive guidelines to assist taxpayers in fulfilling their income tax obligations, emphasizing the importance of timely payments as a national duty. Taxpayers are advised to log into the e-File system through the FBR portal, utilizing the same credentials used for the Iris system. Upon successful login, users should navigate to the “e-Payments” tab, which serves as the gateway to creating an income tax payment slip. To initiate the process, taxpayers should follow these steps: 1. Access the e-Payments Tab: After logging in, click on the “Create Payment” option under the e-Payments tab. 2. Select Income Tax Annual Return: This option will lead you to the Income Tax e-Payment page. 3. Generate Payment Slip (PSID): On the e-Payment page, taxpayers need to: o Choose the relevant tax year. o Enter the amount of tax due. o Select the preferred mode of payment. o Click the “Create” button at the bottom of the page. Once these steps are completed, the e-Payment slip (PSID) is successfully generated. Taxpayers can choose their nearest city from a drop-down list to determine where the payment slip will be deposited. The PSID can then be printed and deposited at any National Bank of Pakistan (NBP) or State Bank of Pakistan (SBP) branch in the selected city. The FBR has also made available manuals for detailed directions on how to make e-payments. After the tax payment is made, a Computerized Payment Receipt (CPR) is generated within 24 hours and reflected in the Iris system. Payment Deadlines and Penalties The FBR reminded taxpayers that income tax payments must be made on or before the designated due date. Failure to meet this deadline will result in penalties, default surcharges, or both. Non-compliance can lead to severe consequences, including a fine or imprisonment for up to one year, or both. Alternative Payment Channels To enhance convenience, the FBR has also introduced Alternate Delivery Channels (ADC) for tax payments. Taxpayers can utilize ATMs and internet banking services to make their payments. A user guide is available for those opting to use ADCs, ensuring a smooth payment process. Surcharge Payment for Active Taxpayers List (ATL) For those who missed the Income Tax Return deadline for Tax Year 2020, a surcharge payment option under Section 182(A) of the Income Tax Ordinance 2001 is available. Taxpayers can pay the surcharge by selecting the “Misc” head in the PSID. Only after the surcharge payment will the taxpayer’s name be included in the Active Taxpayers List (ATL). The FBR’s clear and detailed guidelines aim to simplify the tax payment process, encouraging compliance and ensuring that all taxpayers fulfill their obligations efficiently.

Date: 2024-08-14

Details: Islamabad, August 14, 2024 – In a move aimed at simplifying tax compliance, the Federal Board of Revenue (FBR) has introduced a streamlined procedure for sales tax registration. This new process is designed to facilitate taxpayers, making it easier and more efficient to register for sales tax using the Iris Portal. Taxpayers can now log in to the Iris Portal using their existing credentials and navigate to the registration section. Here, they can select Form 14(1) (Form of Registration filed voluntarily through Simplified) under the Sales Tax category. The system will then prompt them to provide essential details, which vary depending on whether the applicant is an individual, an Association of Persons (AOP), or a company. For individuals, the registration type—whether as a Manufacturer or Non-Manufacturer—must be specified. For AOPs or companies, the applicant must provide the CNIC of the member, director, or principal officer, along with the registration type. Additionally, all applicants are required to furnish their bank account details, including a bank account certificate issued in the business’s name. Business details are also mandatory, including the name of the business, acquisition date, capacity, and business activity. For businesses with multiple branches, details of all branches must be provided. The FBR also requires GPS-tagged photographs of the business premises, as well as registration or consumer numbers for gas and electricity, accompanied by pictures of the utility meters. Manufacturers must submit GPS-tagged photographs of their machinery and industrial electricity or gas meters. Upon submitting the required information and documents, the system will automatically register the applicant for sales tax. Detailed guidance on this process is available through the Iris Portal. Following registration, applicants are required to visit a NADRA e-Sahulat Centre within 30 days for biometric verification. Failure to complete this step or a failed verification will result in the applicant’s removal from the Sales Tax Active Taxpayer List. NADRA e-Sahulat Centers are widely available to facilitate this process. For manufacturers, the FBR may conduct post-verification checks through field offices or authorized third parties. If any document is found to be non-genuine or incorrect, the applicant will be given 15 days to provide the correct information. Failure to comply will result in removal from the Active Taxpayer List. Additionally, the FBR has made sales tax registration accessible via the Iris Mobile Application, “Tax Asaan.” The detailed registration procedure is available within the app, offering further convenience for taxpayers. This initiative underscores the FBR’s commitment to modernizing tax procedures and enhancing taxpayer convenience through digital innovation.

Date: 2024-08-14

Details: August 14, 2024 Karachi, August 14, 2024 – The Federal Board of Revenue (FBR) has reported a remarkable 70% surge in advance tax collection from electricity bills during the fiscal year 2023-24. This increase is largely attributed to the escalating electricity tariffs, which have been a source of concern for both industrial and residential consumers across Pakistan. The data driving this surge comes primarily from the Large Taxpayers Office (LTO) in Karachi, which is a key tax collection arm of the FBR. The LTO Karachi holds jurisdiction over large-scale companies and high-net-worth individuals, making it a pivotal player in the country’s tax collection efforts. According to sources within the FBR, LTO Karachi successfully collected PKR 26 billion as advance tax on electricity bills in the fiscal year 2023-24. This is a substantial increase compared to the PKR 15.30 billion collected during the corresponding period of the previous fiscal year. This sharp rise underscores the impact of the government’s fiscal policies and the adjustments made in response to economic challenges. The significant increase in tax collection from electricity bills is a direct result of rising power tariffs. Over the past several months, both industries and citizens have been grappling with soaring electricity bills. This spike in energy costs is largely a consequence of the government’s commitment to comply with the International Monetary Fund (IMF) directives aimed at reducing the circular debt crisis. However, the steep rise in electricity bills has led to growing concerns about the affordability of power, particularly among residential consumers and smaller industries. Many have found it increasingly difficult to cope with the financial burden, with monthly power bills often exceeding their payment capacities. The situation has sparked widespread criticism and raised questions about the sustainability of such fiscal measures. The FBR’s advance tax collection is conducted under Section 235 of the Income Tax Ordinance, 2001, as updated till June 30, 2024. The recent surge in tax revenue is a reflection of the additional financial burden passed on to consumers, which includes charges such as capacity payments, fuel adjustment charges, and both monthly and quarterly adjustments. For commercial and industrial consumers, the withholding tax on electricity bills is calculated as follows: • Gross bill amount up to PKR 500: Exempt from withholding tax. • Gross bill amount exceeding PKR 500 but not exceeding PKR 20,000: Tax rate is 10% of the bill amount. • Gross bill amount exceeding PKR 20,000: o Commercial consumers: Tax rate is PKR 1,950 plus 12% of the amount exceeding PKR 20,000. o Industrial consumers: Tax rate is PKR 1,950 plus 5% of the amount exceeding PKR 20,000. For domestic electricity consumption, the tax rates are as follows: • Monthly bill less than PKR 25,000: Zero percent tax. • Monthly bill of PKR 25,000 or more: 7.5% tax. The significant surge in tax collection reflects the government’s efforts to enhance revenue through existing channels. However, it also highlights the growing strain on consumers who are struggling to manage the rising costs. The FBR’s achievement in tax collection is a double-edged sword; while it bolsters the government’s fiscal position, it also intensifies the financial pressures on the populace.

Date: 2024-08-14

Details: Karachi, August 13, 2024 – The Pakistan Tax Bar Association (PTBA) has voiced serious concerns regarding the functioning of the Appellate Tribunal Inland Revenue (ATIR), highlighting issues that threaten to undermine the tribunal’s credibility and the broader tax system. In a letter addressed to Azam Nazeer Tarar, Minister of Law and Justice, the PTBA detailed a series of grievances from lawyers and tax practitioners, pointing to troubling practices within the ATIR that are eroding taxpayer trust. The PTBA’s letter paints a grim picture of the current state of the ATIR, describing a pattern of behavior that calls into question the integrity of the tribunal. Complaints have been pouring in from legal professionals regarding the tribunal’s handling of cases, with specific concerns about the conduct of the benches, disregard for binding orders, and unethical practices during proceedings. One of the most concerning issues raised by the PTBA is the passing of orders without any reference to the documentary evidence presented or the submissions made during hearings. This practice, they argue, undermines the very foundation of a fair trial and compromises the tribunal’s role in ensuring impartial adjudication. The PTBA’s observations suggest that the tribunal is nearing dysfunctionality. According to the letter, proceedings often start late, with some cases only being heard after noon, and in certain instances, tribunal members fail to show up altogether. Such delays not only frustrate taxpayers and their representatives but also cast a shadow over the tribunal’s commitment to timely justice. Moreover, the PTBA has highlighted that orders from the tribunal are either not received for extended periods or are non-speaking, meaning they lack detailed reasoning. There are also allegations that decisions are being made based on factors other than merit, further eroding confidence in the tribunal’s impartiality. The PTBA has also drawn attention to the implications of the Tax Laws Amendment Act, 2024, which has made the ATIR the first appellate forum for certain cases. Given the tribunal’s current state, the PTBA warns that taxpayers are rapidly losing trust in the appellate process, a development that could have far-reaching consequences for Pakistan’s tax revenue collection system. The association’s letter emphasizes that the growing trust deficit between taxpayers and the government, fueled by the tribunal’s perceived inefficiencies, could jeopardize the entire tax system. The PTBA stresses that if these issues are not addressed promptly, the situation could lead to a significant decline in taxpayer compliance, further straining the country’s already challenged revenue collection efforts. In light of these grave concerns, the PTBA has urged the Minister of Law and Justice to intervene immediately. They have called for the formation of an oversight committee to thoroughly investigate the issues plaguing the ATIR. Additionally, the PTBA has requested that the process of appointing new tribunal members be expedited on a war footing. They argue that any delay in this regard will only worsen the situation, depriving taxpayers of their fundamental right to a fair trial and natural justice. The PTBA’s letter serves as a wake-up call for the government, highlighting the urgent need for reforms to restore faith in the tax appellate system. Without swift and decisive action, the association warns, the integrity of Pakistan’s tax system could be irreparably damaged, with far-reaching consequences for the country’s economy.

Date: 2024-08-14

Details: ISLAMABAD: The global consulting firm, McKinsey & Company Tuesday informed that data sharing among key stakeholders was under way to ultimately compile a high-quality data to identify non-filers and those dodging the system to evade income tax, sales tax and customs duty. The first meeting of the Task Force on Digitalization of Federal Board Revenue was held here on Tuesday at FBR Headquarters which was chaired by Minister of State for Finance and Revenue Ali Pervez Malik and co-chaired by DG C41, Major General Syed Ali Raza. The meeting was also attended by Chairman FBR Rashid Mahmood Langrial, Members and other senior officers of the Board along-with Task Force members including, among others, Mr. Ghazi Akhtar from Lotte Akhtar Beverages Ltd, Asif Peer from Systems Ltd, Amir Malik, CEO PRAL, Tania Aidrus and Gohar Marwat Project Officer, NADRA, while Waqas-ul-Hasan and Fareed Zafar joined the meeting virtually. According to the sources, a new documentation law as well as enhancement of the powers of National Database and Registration Authority (NADRA) would also be considered to achieve the ultimate objective of FBR’s digitalization. The provinces would be approached by the NADRA to provide complete tax data to facilitate digitization for enhancing tax base. The NADRA would hold meetings with provinces to access their capability for providing the requisite data. The NADRA would specify categories of data to the provided by all provinces, sources added. In his opening remarks, State Minister for Finance said that Prime Minister of Pakistan has constituted the Task Force to submit recommendations to completely digitize all the systems of FBR. ‘If the country needs to transition to a more inclusive and sustainable growth then end-to-end-digitization of FBR is imperative’, stated the State Minister. He explained that the ultimate goal of Task Force is to formulate such policy interventions which can improve efficacy of FBR to further build up revenue stream for the country. Speaking on the occasion, DG C41 said that the end result of reform agenda of the Government is to increase tax-to-GDP ratio of the country for enhanced revenue generation. He emphasized upon focusing on implementing the various initiatives to achieve fruitful results. Chairman FBR said that the Revenue Division is committed to maximize revenue through implementation of data automation and software solutions and impressed upon committee members to come up with practical recommendations to achieve the given task. He stressed the need for integration of systems and deployment of new systems to modernize the tax agency enabling it to achieve its future targets. On the occasion, Ali Malik from the consulting firm McKinsey gave a comprehensive presentation on the progress that has been made towards digitization of FBR. He explained that the firm is focusing on two major areas. First is the overall digitization of FBR and the second is to identify and implement quick wins. It was further informed that data sharing among key stakeholders was underway to ultimately compile a high quality data to identify non-filers and those dodging the system to evade their taxes. It was also told that four wins in the areas of income tax, sales tax, customs duty and collections have been identified based on global experience and data available within FBR. This was followed by a detailed discussion on Terms of References (TORs) of the Task Force which included data sharing both vertically with the provinces and horizontally across Ministries, supply chain automation, Track & Trace System through integrated system, restructuring of PRAL and trade data sharing interface with trading partners. It was agreed that there is a need to devise a robust data sharing mechanism for sharing of real time data among major stakeholders to identify the potential taxpayers for broadening of tax base. The meeting emphasized that the use of latest technological interventions and automation of FBR systems can lead towards a more formalized and documented economy for sustained economic development of the country. The Task Force decided to co-opt members from SECP, State Bank, Ministries of Commerce and Foreign Affairs, and invite them in future meetings. Four Working Groups were also set up to further deliberate upon Terms of References assigned to each Working Group. Gohar Ahmed Khan, Ghazi Akhtar (to be supported by Ziad Bashir) Asif Peer and Ms. Tania Aidrus (to be supported by Ghazi Akhtar) were made convenors of these Working Groups. The Working Groups will prepare draft recommendations in their respective areas and share the same in the next meeting of the Task Force to be held on August 21, 2024. Copyright Business Recorder, 2024

Date: 2024-08-13

Details: ISLAMABAD: The Pakistan Tax Bar Association (PTBA) has asked the Minister for Law and Justice to intervene and form an oversight committee to stop the further deterioration of working of Appellate Tribunal Inland Revenue (ATIR) - the first stage of appeal. In a letter to Minister for Law and Justice Azam Nazeer Tarar, the PTBA raised serious grievance in respect of ATIR. The PTBA has noted with concern that the tribunal has nearly become dysfunctional, depriving taxpayers of their fundamental right of fair trial at the first stage of appeal. According to the PTBA, the bar is writing to the minister regarding the complaints they are receiving regularly from their member bars and their members in respect of ATIR regarding the case proceedings, conduct of the benches, non-acceptance of binding orders, unethical practices and the order passed without any reference of the documentary evidences presented and submission made during the course of hearing. The PTBA stated that the observations/complaints the bar is receiving indicate a troubling pattern of behavior that undermines the integrity of the tribunal and erodes public trust which comprise the tribunal’s role in ensuring fair and impartial adjudication. Tax tribunal has nearly become dysfunctional, they start proceedings after 10:30am and in some cases after 12 noon and at times the member(s) just do not show up. Orders are either not received for a long time or non-Speaking orders are passed or orders passed based on consideration other than merit, the PTBA said. After the Tax Laws Amendment Act, 2024, the Tribunal has become the first Appellate Forum for certain cases and due to the circumstances as mentioned, taxpayers have nearly lost trust in the Tribunals and the trust deficit with the government is increasing every other day which will jeopardize the entire tax revenue collection and tax system. The PTBA urged the Minister for Law and Justice to intervene and form an oversight committee to look into this matter and also request to expedite the new member’s appointment process on war footing, any delay in this regard will further deteriorate the Appellate forum and the taxpayer will deprive with their fundamental right of the fair trial and natural justice. “Your (Minister for Law and Justice) early intervention is highly appreciated. We are available at any point of time, if any audience is required in this context,” the PTBA added. Copyright Business Recorder, 2024

Date: 2024-08-12

Details: Karachi, August 12, 2024 – Millat Tractors Limited (MTL) raised a critical red flag on Monday, warning that the ongoing ambiguity in General Sales Tax (GST) regime could compel the company to halt its production activities. The stark warning came through an official communication with the Pakistan Stock Exchange (PSX), revealing the severity of the situation facing the prominent tractor manufacturer. In its statement, MTL addressed recent media reports suggesting a halt in the company’s production of tractor parts. The company clarified that it has not yet ceased operations, and any such move will be formally communicated to the stock exchange. However, the crux of the issue lies in the unresolved GST complexities affecting the company’s financial health. MTL outlined that the GST on tractors is currently set at 10%, whereas the GST on all input raw materials stands at 18%. This discrepancy has led to a persistent and unresolved stream of refund claims, which the Federal Board of Revenue (FBR) has yet to address with a definitive mechanism for processing these refunds. As a result, MTL is grappling with significant operational challenges. The company revealed that it has sought clarification from the FBR to alleviate the situation. Despite continuing operations, MTL’s activities are significantly constrained, with sales and bookings restricted primarily to agricultural loan customers. This limitation has led to an accumulation of Completely Built Units (CBUs) and an increasingly squeezed working capital. “MTL is currently operating under these strained conditions, but the situation is precarious. If the FBR’s delay in providing clarity persists, we may have no option but to consider a production shutdown,” the company stated. The uncertainty surrounding the GST regime not only impacts MTL but also raises concerns about the broader implications for the manufacturing sector in Pakistan. As the company awaits a resolution, the market will be closely watching for any further developments that could signal a potential halt in operations or other drastic measures. MTL’s warning underscores the pressing need for regulatory clarity and timely intervention to support the manufacturing sector and prevent disruptions that could have far-reaching economic consequences.

Date: 2024-08-12

Details: Islamabad, August 12, 2024 – The Federal Board of Revenue (FBR) has recently released a comprehensive guide explaining the basics of sales tax to help taxpayers navigate the complexities of registration and filing. This initiative aims to ensure that taxpayers have a clear understanding of sales tax laws, thereby facilitating compliance and reducing errors in tax returns. According to the FBR, having a fundamental grasp of sales tax processes is crucial for anyone involved in taxable activities. By understanding key concepts, taxpayers can ensure that they perform their duties efficiently and in accordance with legal requirements. Sales Tax, as defined by the FBR, is a tax imposed by the Federal Government under the Sales Tax Act, 1990. It applies to the sale and supply of goods, as well as to goods imported into Pakistan. Additionally, the Federal Government levies sales tax on services under The Islamabad Capital Territory (Tax on Services) Ordinance, 2001. Input and Output Tax: A Brief Overview The FBR explained that Input Tax refers to the tax paid by a registered person on taxable goods and services purchased or acquired. This includes sales tax paid on imports. On the other hand, Output Tax is the sales tax charged and levied on the sale or supply of goods or services that are subject to sales tax. Scope of Sales Tax The FBR highlighted that sales tax applies to a wide range of goods and services. Specifically, all goods are taxable unless they are explicitly exempted under section 13 of the Sales Tax Act, 1990, as detailed in the Sixth Schedule. The term “goods” for sales tax purposes encompasses all movable property, excluding actionable claims, money, stocks, shares, and securities. Imports into Pakistan All goods imported into Pakistan are subject to sales tax at the time of import, with the exception of those goods that are explicitly exempted under section 13 of the Sales Tax Act, 1990, as listed in the Sixth Schedule. Exempt Goods Under the Sales Tax Act, 1990, certain goods are exempt from sales tax. These exemptions are clearly outlined in the Sixth Schedule. Additionally, other exemptions may be granted through various notifications (SROs) issued by the Government under section 13 of the Act. The FBR’s detailed explanation is part of its ongoing efforts to simplify the tax system and assist taxpayers in fulfilling their obligations. By providing this essential information, the FBR aims to foster a more informed and compliant taxpayer base across Pakistan.

Date: 2024-08-11

Details: August 11, 2024 Karachi, August 11, 2024 – In a move that is likely to raise eyebrows, the Federal Board of Revenue (FBR) has extended tax concessions worth a staggering Rs 41 billion to the power sector for the tax year 2024. Official data reveals that a substantial portion of this tax break, amounting to Rs 30.25 billion, has been granted in the form of income tax credit to electric power generation projects. This credit is applicable to projects established in Pakistan on or after July 1, 1988, subject to specific conditions outlined in Clause 132 of Part I of the Second Schedule of the Income Tax Ordinance, 2001. Furthermore, the FBR has extended tax concessions worth Rs 10.75 billion under the sales tax laws. This benefit is available on machinery, equipment, and spare parts used for the initial installation, expansion, or modernization of power generation projects fueled by hydel, oil, gas, coal, nuclear, or renewable energy sources. Importantly, this concession extends to projects that entered into implementation agreements with the government before January 15, 2022. The power sector, particularly Independent Power Producers (IPPs), has long been a subject of debate due to the generous incentives it enjoys, including substantial capacity charge payments. The additional tax concessions of Rs 41 billion underscore the significant financial support extended to these companies. Critics argue that such substantial tax breaks to the power sector come at the expense of the broader taxpayer and could contribute to the country’s fiscal challenges. They contend that the government should prioritize alternative methods to support the energy sector while ensuring a fair distribution of the tax burden. As the country grapples with economic difficulties, the rationale behind these tax concessions is likely to face scrutiny. The government may be called upon to justify the policy decision and demonstrate its alignment with broader economic objectives.

Date: 2024-08-11

Details: August 11, 2024 Islamabad, August 11, 2024: The Federal Board of Revenue (FBR) has decisively quashed rumors swirling on social media about the alleged taxation of the prize money awarded to Arshad Nadeem, Pakistan’s golden athlete and the gold medalist at the Paris Olympics 2024. These rumors, which gained traction online, have been dismissed by the FBR as entirely baseless and misleading. Reports had surfaced suggesting that the FBR was preparing to levy taxes on the prize money received by Arshad Nadeem following his historic win. However, the FBR has categorically denied these claims, stressing that such misinformation is both “misleading and disturbing” and does not reflect the government’s stance. In an official statement, the FBR expressed profound respect and admiration for Arshad Nadeem, whose remarkable achievement has brought immense pride to Pakistan. His gold medal in the men’s javelin at the Paris Olympics marks a historic moment, ending a 40-year drought for Pakistan at the Games. The FBR underscored that Arshad Nadeem is not just an athlete but a national hero who has elevated Pakistan’s image on the global stage. “It is clarified at the outset that Arshad Nadeem is our National Hero who has not only elevated Pakistan’s image worldwide but has brought unparalleled joy to the entire Pakistani nation by winning a Gold Medal after 40 years in the Olympics,” the FBR stated, dismissing any speculation about taxing his prize money. Moreover, the FBR confirmed that there is no withholding tax on the prize money awarded to Arshad Nadeem. The government, in conjunction with the FBR, is committed to ensuring that his income remains exempt from taxation long before he is required to file his tax return in September 2025. This clear and firm stance is intended to put all rumors to rest and reassure the public and media alike. The FBR’s clarification has been met with relief and approval from many, particularly those who have been celebrating Arshad Nadeem’s groundbreaking victory. As the first Pakistani athlete in decades to secure an Olympic gold medal, Nadeem has become a symbol of national pride. The government’s prompt action to debunk any negative speculation about his prize money further highlights its dedication to supporting and honoring the nation’s sports heroes. Arshad Nadeem’s Olympic triumph, marked by a stunning 92.97-meter throw in the men’s javelin final, not only shattered records but also ended Pakistan’s 32-year wait for Olympic success. His victory has set a new benchmark for Pakistani athletes and reinforced the nation’s commitment to nurturing and celebrating its sporting talent.

Date: 2024-08-10

Details: KARACHI: Federal Tax Ombudsman (FTO) Dr. Asif Mahmood Jah (HI, SI) has announced quick action on the complaints of taxpayers of the country and have assured to provide justice in 4-6 weeks. He said that the FTO office has the authority to take action against maladministration & malpractices of the FBR and we ensure that our decisions are implemented by FBR in true spirit. Speaking at a meeting of SITE Association of Industry, he said that backlash from the FBR on registering complaint to FTO is also overseen by the FTO office and to ensure that there is no such backlash to taxpayer, a Notification has already been issued. He informed the members that FTO office has received more than 8000 complaints last year, out of which, 90pc were resolved and decisions were implemented. The FTO office keeps proper tracks of all complaints. With the efforts of FTO office, refunds worth 17.8 billion were paid to taxpayers by the FBR. It is indeed an honour that the honourable President of Pakistan has ratified 510 decisions, out of 590 of the FTO. He informed the members that own motion action has already been taken by the FTO on SRO-350 related issues. We are also taking Own Motion Action on goods accumulated on ports on accounts of payment of custom duty. On this occasion, the honourable Federal Tax Ombudsman also announces to nominate an Advisor from SITE Association of Industry. SITE President Muhammad Kamran Arbi welcomed the honourable FTO to the Association and thanked him for sparing time to visit the Association. He presented brief introduction of SITE area Karachi and highlighted its contribution in the industrial sector and the national economy. He remarked that Dr. Asif Mahmood Jah is the only bureaucrat who has been conferred both Hilal-e-Imtiaz and Sitara-e-Imtiaz which speaks high of his capabilities and outstanding performance. He said that there is much lack of trust between the taxpayers and the tax collecting authorities. The taxpayer in particular, is reluctant to contact tax collecting authorities even for a genuine concern due to miscues of authority by them. SMEs cannot afford to employ high paid staff for tax returns and compliance matters. Chief Coordinator Saleem Parekh welcomed the honourable FTO and thanked him for visiting the Association. In his brief speech, he requested the honourable FTO to take action against the officer issuing high amount recovery notices by misusing his authority. He added that after such notice is issued, the matter ends in corruption. Former President Jawed Bilwani welcomed the statement of honourable FTO that 90pc complaints have been decided in favour of taxpayers and added that it is clear evidence of maladministration of the FBR. He said that Dr. Asif Mahmood Jah is the first FTO who belongs to FBR and as such, he is in a better position to addresses issues related to FBR. He stressed the need to completely do away with manual processing of refunds as FBR has all the data & record electronically available and concluded that only by reducing human interaction, bad practices can be controlled. He remarked that since FBR has real-time audit system, there should be no need for audit. Former President Tariq Yousuf said that it seems that government is continuously negating industrialization in the country. He requested the honourable FTO to make bad laws accountable and also make those who are found misusing authority accountable first which will start cleaning our system at all levels. Riaz Uddin, Chairman of Taxation sub-committee of the Association on this occasion, gave comprehensive presentation to the honourable FTO on tax related issues being faced by the taxpaying industries of SITE area, Karachi. He in particular briefed the honourable FTO on the issues related to sales tax refunds which are deliberately delayed & denied by the FBR authorities against the given timeline of 45-days. Giving reference of various sections of the Income tax Ordinance and Sales Tax Act, he highlighted various issues which create problems for the taxpayers and ultimately, result in blockage of refunds. Riaz Uddin prayed the honourable FTO to Redress complaints of tax maladministration promptly, justly, fairly and independently and play the crucial role to rectify the injustice currently being done to the honest taxpayers, by way of the inaction and maladministration of FBR. He suggested that the Honourable FTO may take own motion on systemic maladministration and pandemic issues, propping up every now and then, Conduct surprise and schedule inspections of Tax Offices sounding bad reputation. He concluded that FTO is the only ray of hope for the industrial taxpayers who can control maladministration in FBR and requested the FTO to utilize powers to initiate prompt inquiries, on FTO’s own motion, pertaining to impending issues. Prominent among those who attended the meeting were VP Muhammad Farhan Ashrafi, Abdul Rasheed, Ex-VP KCCI Haris Agar, Abdul Kadir Bilwani, Naveed Wahid, Hussain Moosani, Haris Shakoor, Rizwan Lakhany, Junaid Rehman, Junaid Nawab, Muhammad Riaz Dhedhi and others. Copyright Business Recorder, 2024

Date: 2024-08-10

Details: Karachi, August 10, 2024 – Pakistan has granted a sales tax exemption on the import of gold under the entrustment scheme. The Federal Board of Revenue (FBR) announced the tax exemption, which has been introduced through the Finance Act, 2024. The exemption is part of broader changes made to the Sixth Schedule of the Sales Tax Act, 1990. The entrustment scheme, initially introduced on September 2, 2013, allows for the export of jewelry and related articles made from imported precious metals. These metals are supplied as partial advance payment by foreign buyers, with the quantity to be used, including wastage, specified for the manufacturing of the jewelry to be exported. This scheme was designed to support Pakistan’s jewelry export sector by facilitating the import of precious metals for use in manufacturing, thus promoting the industry’s growth. The sales tax exemption now granted is expected to further incentivize the export of jewelry by reducing the cost burden on manufacturers and exporters. The FBR has clarified that the exemption applies specifically to the gold imported under this scheme, ensuring that the precious metal used in the creation of export-bound jewelry is not subject to the usual sales tax. This move is likely to benefit exporters by lowering production costs and enhancing their competitiveness in the global market. Industry experts have welcomed the decision, noting that it aligns with the government’s broader objective of boosting exports and supporting local industries. The exemption is expected to stimulate activity in the jewelry manufacturing sector, potentially leading to increased exports and foreign exchange earnings for the country. The changes made to the Sixth Schedule of the Sales Tax Act, 1990, reflect the government’s ongoing efforts to create a more favorable environment for exporters and to address the challenges faced by key sectors of the economy. As the new tax exemption takes effect, stakeholders in the jewelry industry are optimistic about the potential for growth and expansion. The FBR’s decision is seen as a positive step towards fostering a more robust export sector, with the entrustment scheme playing a central role in achieving this goal.

Date: 2024-08-10

Details: Karachi, August 10, 2024 – The Federal Board of Revenue (FBR) has announced a significant increase in the sales tax rate on imported computers and laptops for the tax year 2024-25. The new tax rate, which has doubled from the previous year, is set to impact the cost of these essential electronics in Pakistan. Under the Finance Act, 2024, the sales tax on imported computers has been increased to 10%, up from the previous 5%, the FBR said. This change applies to both computers and laptops and is outlined in the Eighth Schedule of the Sales Tax Act, 1990. The FBR’s decision to double the sales tax rate is part of a broader effort to enhance revenue generation and address fiscal challenges. The revised tax rates are expected to have a significant impact on the import and pricing of computers and laptops, which are crucial for education, business, and personal use. The increase may lead to higher costs for consumers, as importers and retailers adjust their pricing strategies to accommodate the new tax burden. In addition to the changes in sales tax on computers, the FBR has also introduced several other modifications through the Finance Act, 2024, particularly in the Eighth Schedule. Key changes include: • Imported LPG and Textile/Leather Supplies: The import of Liquefied Petroleum Gas (LPG) and supplies from integrated outlets of textile and leather articles have been moved into the standard tax regime. This shift is due to the omission of serial numbers 58 and 66 in Table-1 of the Eighth Schedule. • Medicaments: The reduced sales tax rate of 1% on medicaments, previously classifiable under Chapter 30 of the First Schedule to the Customs Act, 1969, has been withdrawn. These items will now be subject to the standard sales tax rate of 18%. • Other Goods: Several items that were previously exempt from sales tax, such as specified stationery, tractors, oil cake, poultry and cattle feed, various seed meals, vermicelli, and sheer mal, have now been made liable to a reduced sales tax rate of 10%. The FBR’s announcement has sparked discussions among industry stakeholders, with concerns about the potential impact on both consumers and businesses. As the new tax rates come into effect, all eyes will be on how the market adjusts to these changes in the coming months.

Date: 2024-08-09

Details: Sohail Sarfraz Published 8 minutes ago ISLAMABAD: The Federal Board of Revenue (FBR) has established a check post of Inland Revenue officers at district Battargram- Silk/Karakoram road to tariff areas of Abbottabad. In this regard, the FBR has issued a notification here on Thursday. The FBR has issued SRO to establish check posts with mobile squads on the routes originating from tax-exempt areas. The check post has been established under Section 40B of the Sales Tax Act. According to SRO 1193(I)/2024, the mobile squad of Inland Revenue officers would intercept goods on which duties and taxes have not been paid while coming from non-tariff areas to tariff areas of Pakistan. The conveyance carrying goods supplied from the tax-exempt areas shall be accompanied by such documents in respect of the goods carried as may be prescribed under sales tax rules. In the absence of the prescribed documents or any discrepancy in such documents, the goods so carried shall be seized along with the vehicle carrying the goods by the officer as aforesaid under proper acknowledgment, the FBR said. The notices to the owner of the goods and the vehicle to show cause against imposition of penalty shall be issued within 15 days of the seizure. The “tax-exempt areas” means Azad Jammu and Kashmir, Gilgit-Baltistan, Border Sustenance Markets and former Tribal Areas as defined in Article 246 of the Constitution and such other areas as may be prescribed, the FBR added. In 2022, the FBR had established 16 Inland Revenue check posts with mobile teams on the routes originating from tax-exempt areas of Azad Jammu and Kashmir, Gilgit-Baltistan and erstwhile tribal areas to check documents of goods coming from these areas. Through Finance Act, 2024 exemption available to ex-FATA/PATA (import/ supply of goods and supply of electricity) has been retained till June 30, 2025. Copyright Business Recorder, 2024 NON-COMPLIANCE WITH EIMS: PRA INITIATES CRACKDOWN Recorder Report Published 8 minutes ago LAHORE: Punjab Revenue Authority (PRA) has launched a crackdown on establishments failing to install the mandated Electronic Invoice Monitoring System (EIMS). Following directives from Chairman PRA Nauman Yusuf, more than 100 restaurants have been issued show-cause notices for non-compliance. Additionally, the PRA has issued warnings to restaurants that have installed the system but fail to issue receipts. This measure aims to enforce the proper use of the system and prevent potential revenue leakages. Copyright Business Recorder, 2024

Date: 2024-08-08

Details: Recorder Report Published 43 minutes ago KARACHI: Federal Tax Ombudsman Dr. Asif Mahmood Jah has announced the establishment of a help desk at the Korangi Association of Trade and Industry (KATI) to address the tax issues faced by industrialists. The initiative aims to increase awareness among the public and business community about the Federal Tax Ombudsman (FTO) services. Dr. Jah made these remarks while addressing industrialists at KATI. Dr. Jah highlighted that the FTO is mandated to resolve complaints within 60 days, with recent decisions averaging 38 days. He emphasized the independence and authority of the FTO, whose decisions can only be appealed to the President of Pakistan. Of the 550 appeals filed with the President, 490 decisions by the FTO were upheld. In 2021, the FTO resolved a refund complaint amounting to Rs.17.8 billion. Since taking office, Dr. Jah has increased the number of regional offices to improve public access to the FTO. He cited the swift resolution of complaints from 800 individuals regarding sales tax on vehicles, resulting in refunds totaling Rs.55 million. Dr. Jah assured taxpayers that they can report complaints without fear, and no unwarranted notices or audits would be issued. KATI President Johar Qandhari highlighted the increasing harassment of industrialists and the business community by FBR officials through unjustified notices and audits. He noted the difficulties in filing tax returns due to the slow FBR system and the arbitrary withholding of refunds, exacerbating capital shortages for industrialists. Qandhari pointed out the growing number of complaints to the FTO, indicating worsening taxpayer issues. Deputy Patron-in-Chief Zubair Chhaya criticized the government’s failure to expand the tax net, instead burdening existing taxpayers with additional taxes. He expressed concern that the recent budget increases would lead to more complaints to the FTO. Chhaya stressed the need to document more of the economy, which currently stands at only 30%. Senator Abdul Haseeb Khan emphasized the need for greater public and business awareness of the FTO’s role. He attributed decreased internal and external investment to loopholes in the tax system. Standing Committee Chairman Tariq Malik praised Dr. Jah’s efforts, noting a significant increase in the number of resolved complaints—from over 2,000 in 2021 to more than 8,000—attributed to Dr. Jah’s diligent work and the business community’s trust. The event saw participation from KATI President Johar Qandhari, Deputy Patron-in-Chief Zubair Chhaya, Senator Abdul Haseeb Khan, Senior Vice President Nighat Awan, Vice President Muslim Mohammadi, Standing Committee Chairman Tariq Malik, and other notable figures from FTO including Dr. Faiz Elahi Memon, Badruddin Qureshi, Dr. Fazal Mohammad Abrejo, Gul Rehman, Abid Mehmood, Shahid Nawaz and a large number of industrialists and members. Copyright Business Recorder, 2024

Date: 2024-08-08

Details: August 8, 2024 Karachi, August 8, 2024: In a bid to enhance tax compliance, the Federal Board of Revenue (FBR) has introduced significant changes to the sales tax audit process. The new measures, outlined in Sales Tax Circular No. 3, aim to make audits more targeted and effective. The FBR has revamped Section 25 of the Sales Tax Act, 1990, granting Commissioners broader authority to initiate audits. Going forward, the decision to audit a taxpayer will be based on a comprehensive analysis of records, including sales tax and Federal Excise Duty returns, income tax filings, withholding statements, financial statements, and third-party information. This strategic approach is intended to ensure that audits are conducted based on solid evidence rather than arbitrary selection. A key departure from previous practices is the requirement for Commissioners to provide clear and specific reasons for selecting a taxpayer for audit. Mere verification of input tax, output tax, refund claims, or compliance with legal provisions will no longer suffice. Instead, the FBR will focus on identifying specific risk factors that warrant closer scrutiny. This move aims to enhance transparency and fairness in the audit selection process, ensuring that only those taxpayers who exhibit suspicious activity are subject to audits. The tax authorities have also clarified that the Commissioner’s power to order an audit is independent of the Board’s authority under Section 72B of the Sales Tax Act. This means that the FBR can initiate audits without relying solely on the provisions of Section 72B. This dual mechanism is expected to streamline the audit process and reduce delays caused by bureaucratic hurdles. Once an audit is initiated, the officer conducting the audit will have the power to examine all relevant records and documents. If necessary, the officer can issue an order under Section 11E after providing the taxpayer an opportunity to be heard. This ensures that taxpayers have a chance to present their case and address any discrepancies identified during the audit. In cases where taxpayers fail to cooperate by providing required information or documents, the officer can resort to best judgment assessments. This provision acts as a deterrent against non-compliance and encourages taxpayers to be forthcoming with their records. The FBR’s move is seen as a strong signal of its intent to crack down on tax evasion. By introducing these measures, the tax authority aims to improve tax collection and ensure a level playing field for all taxpayers. The targeted audit approach is expected to enhance voluntary compliance as taxpayers become more aware of the increased scrutiny. Overall, the FBR’s new audit measures represent a significant step towards strengthening Pakistan’s tax infrastructure, with the dual goals of enhancing revenue collection and promoting compliance among taxpayers.

Date: 2024-08-08

Details: Karachi, August 8, 2024 – The Karachi Tax Bar Association (KTBA) has urged the Federal Board of Revenue (FBR) to update the Income Tax General Order (ITGO) on a weekly basis to remove the names of individuals who have filed their income tax returns. This request was made in a letter sent on Thursday to Mufeeza Iqbal, Member IT (Information Technology) at the FBR, by KTBA President Syed Zafar Ahmed. In the letter, KTBA highlighted a pressing issue faced by taxpayers: despite filing their income tax returns, their names continue to appear on the ITGO, leading to unnecessary complications. The KTBA emphasized the need for a more efficient system that promptly reflects the status of return filers, ensuring they are not penalized unfairly. The concern arises from ITGO 01 of 2024, which was issued by the FBR on April 29, 2024. Under Section 114(b) of the Income Tax Ordinance 2001, this order directed the Pakistan Telecommunication Authority (PTA) and all mobile operators to block or disable the SIM cards of 506,670 individuals by May 15, 2024. These individuals were identified as non-filers for the Tax Year 2023, making them liable under Section 114 of the Income Tax Ordinance, 2001. KTBA President Syed Zafar Ahmed pointed out that when a person files their income tax return for the Tax Year 2023, their mobile SIM is typically restored within 24 to 48 hours, either automatically or through communication with their telecom operator. However, the issue lies in the fact that even after the return has been filed and the SIM restored, the individual’s name remains on the ITGO. This creates confusion and potential challenges for return filers who have complied with their tax obligations. The KTBA argued that just as the Active Taxpayer List (ATL) is updated on a weekly basis, the ITGO should also be refreshed regularly to exclude the names of individuals who have duly filed their income tax returns. Such an update would ensure that compliant taxpayers are not subject to the restrictions imposed by the order, particularly the disabling of their mobile phone services. The association’s call for weekly updates to the ITGO is aimed at fostering a more efficient and taxpayer-friendly system, reducing the administrative burden on both the taxpayers and the FBR. By implementing this change, the FBR would not only streamline its processes but also reinforce trust among taxpayers, who rely on timely and accurate updates to reflect their compliance with tax laws.

Date: 2024-08-07

Details: ISLAMABAD: The Federal Board of Revenue (FBR) has empowered the Chief Commissioners (Inland Revenue) to review the orders of blacklisting and suspension of sales taxpayers. Explaining the enforcement provisions of the Finance Act 2024, the FBR informed that prior to Finance Act, 2024, the order of suspension and blacklisting were appealable orders before the Appellate Tribunal Inland Revenue (ATIR). The order of suspension along-with order of blacklisting passed by the Commissioner has now been made liable to review by the Chief Commissioner either on his own motion or on receipt of request/application from the registered person. The Chief Commissioner may after making such inquiry as deemed necessary, modify the order after providing an opportunity of being heard to the registered person, the FBR added. The FBR further explained that the section 11E has been introduced to recover tax not levied, short levied or erroneously refunded either through a deliberate act or due to inadvertence. Section 11E empowers an officer of Inland Revenue not below the rank of Assistant Commissioner to issue a showcause notice to recover tax not paid, short paid, claim of input/refund not admissible or to recover refund not due. The FBR clarified that the criminal proceedings have been separated from civil liability by bringing amendment in sections 33 and 37A of the Sales Tax Act, 1990. The words “tax evaded or sought to be evaded” have been introduced in these sections through Finance Act, 2024 whereby criminal prosecution proceedings may be initiated irrespective and independent of the civil liability at any time before initiating or concluding the civil liability proceedings by a sales tax authority. Offences relating to tax fraud at Serial No 11 and 13 of Section 33 have been made liable to more stringent punishments. Any person who commits, causes to commit or attempts to commit tax fraud or abets or connives in commissioning of a tax fraud shall be liable, upon conviction by a Special Judge to imprisonment for a term which may extend upto five years if the tax evaded or sought to be evaded is upto five hundred million and above, and which may extend to ten years if the tax evaded or sought to be evaded is one billion and above and fine which may extend to an amount equal to the amount of tax evaded or sought to be evaded. The same punishment applies for any person who submits a false or forged document to any officer, who destroys, alters, mutilates or falsifies the records, or who knowingly or fraudulently makes a false statement, false declaration, false representation, false personification, gives any false information or issues or uses a forged or false document, the FBR added. Copyright Business Recorder, 2024

Date: 2024-08-07

Details: Karachi, August 7, 2024 – The Federal Board of Revenue (FBR) successfully garnered approximately Rs 12 billion through the imposition of withholding tax on cash withdrawals from banks in the fiscal year 2023-24. This substantial collection highlights the effectiveness of the FBR’s measures in ensuring compliance and expanding the tax base. Sources within the FBR revealed that this significant sum was collected from banks registered with the Large Taxpayers Office (LTO) in Karachi. The withholding tax on cash withdrawals has proven to be a crucial revenue stream for the FBR, serving as a robust mechanism to encourage individuals with taxable income to file their annual tax returns. Initially, the withholding tax provision on cash withdrawals was rescinded through the Finance Act, 2021. However, recognizing its pivotal role in revenue generation and tax compliance, legislators reinstated the provision. The reintroduction was executed through the Finance Act, 2023, by incorporating Section 231AB into the Income Tax Ordinance, 2001. According to Section 231AB, every banking company is mandated to deduct an advance adjustable tax at a rate of 0.6% on cash withdrawals from individuals whose names do not appear on the active taxpayers’ list. This tax is applicable when the cumulative amount of cash withdrawals in a single day exceeds fifty thousand rupees. The section explicitly clarifies that the threshold of fifty thousand rupees encompasses all cash withdrawals made in a single day. The FBR’s renewed focus on withholding tax aims to broaden the tax net and ensure equitable tax compliance. By targeting non-filers and leveraging the banking system, the FBR has taken a strategic step towards enhancing revenue collection and fostering a culture of tax responsibility. The reintroduction of this tax provision is a testament to the FBR’s commitment to fortifying Pakistan’s fiscal framework. The substantial revenue collected underscores the importance of maintaining stringent tax measures and continuous adaptation of the tax code to meet evolving economic realities.

Date: 2024-08-07

Details: Karachi, August 7, 2024 – The Federal Board of Revenue (FBR) has been granted significant new powers to fix the value of items listed under the Third Schedule of the Sales Tax Act, 1990. This development, introduced through the Finance Act, 2024, is expected to enhance the FBR’s ability to regulate and ensure accurate taxation of imported goods and taxable supplies. The FBR outlined these changes in Sales Tax Circular No. 3, which provides detailed explanations of the amendments made through the recent Finance Act. One of the key provisions highlighted is the amendment to the first proviso of clause (46) of section 2 of the Sales Tax Act. This clause now explicitly empowers the FBR to determine the value of supply for any imported goods or taxable supplies specified under the Third Schedule, particularly those subject to sales tax at the rate of 18% of the retail price, as per clause (a) of sub-section (2) of section 3 of the Act. Prior to this amendment, the FBR had the authority to fix the value of supply for any imported goods or class of supplies if it deemed necessary. However, the recent changes have broadened this power, allowing the FBR to set different values for various classes or descriptions of the same type of imported goods or supplies. This new authority ensures that the FBR can address discrepancies in valuation and prevent potential revenue losses due to underreporting or undervaluation of goods. An example of how this power might be exercised is seen in the case of imported tea, a Third Schedule item. According to Sales Tax General Order (STGO) No. 104 of 2019, the FBR had previously specified that the importer of tea must pay sales tax on the retail price, which could not be less than 130% of the imported value of the goods, inclusive of assessed customs duties, excise duty, and other applicable taxes, excluding sales tax. This regulation ensured that the retail price reflected a fair and accurate value for taxation purposes. With the new amendment, the FBR’s ability to fix the value of supply for Third Schedule items is further solidified. If the FBR deems it necessary to fix the value of imported items under this schedule, the sales tax may now be calculated at 130% of the value set by the FBR. This value would include customs duty, federal excise, and other applicable taxes, again excluding sales tax. The balance of the sales tax, based on the actual retail price, would be payable by the importer when filing their sales tax return. The amendment is seen as a critical step towards ensuring greater accuracy in the valuation of taxable goods, particularly those that are prone to price manipulation or undervaluation. By empowering the FBR to set these values, the government aims to secure its revenue base while promoting fairness and transparency in the taxation process. Tax experts and industry stakeholders are closely watching how the FBR will implement these new powers. The expectation is that this move will not only strengthen tax compliance but also deter practices that undermine the integrity of the sales tax system. Businesses dealing in Third Schedule items are advised to stay updated on any further notifications or general orders from the FBR that may specify new valuations. The FBR has committed to working with industry players to ensure a smooth transition to this new regime and to address any concerns that may arise during its implementation. The Finance Act, 2024, and the subsequent amendments are part of a broader strategy by the government to enhance the effectiveness of tax administration and ensure a more robust revenue collection framework. The FBR’s enhanced powers to fix the value of Third Schedule items mark a significant advancement in this ongoing effort.

Date: 2024-08-07

Details: Karachi, August 7, 2024 – The Federal Board of Revenue (FBR) has announced the imposition of stringent penalties related to sales tax violations. The new measures were detailed in Sales Tax Circular No. 3, which elaborates on amendments to the sales tax laws introduced through the Finance Act, 2027. A significant update involves the separation of criminal proceedings from civil liability in cases of sales tax evasion. This amendment, incorporated into sections 33 and 37A of the Sales Tax Act, 1990, now allows for criminal prosecution to proceed independently of civil liability assessments. This change means that tax authorities can initiate criminal proceedings at any stage, regardless of whether civil liability proceedings have been started or concluded. The FBR has also introduced harsher punishments for tax fraud. According to the amendments, any individual who commits, attempts, or abets tax fraud will face severe consequences. Specifically, under Serial Nos. 11 and 13 of section 33, individuals found guilty of tax fraud could face imprisonment for up to five years if the tax evaded is up to five hundred million rupees. For tax evasion amounts exceeding one billion rupees, the prison term could extend to ten years. Additionally, the offenders could be fined up to the amount of tax evaded. The same stringent punishments apply to individuals who engage in related fraudulent activities. These include submitting false or forged documents to tax officers, destroying or falsifying records, making false statements or declarations, and issuing or using forged or false documents. The FBR emphasized that these measures are crucial for maintaining the integrity of the tax system and deterring fraudulent practices. “The amendments aim to create a robust mechanism to tackle tax evasion and fraud. Separating criminal proceedings from civil liability ensures that wrongdoers face consequences irrespective of ongoing civil cases,” stated an FBR spokesperson. This move by the FBR underscores the government’s commitment to strengthening tax enforcement and ensuring compliance. The introduction of such severe penalties is expected to act as a significant deterrent against tax evasion and fraud, ultimately contributing to a more transparent and accountable tax system. Taxpayers are urged to comply with the sales tax regulations and maintain accurate records to avoid the severe repercussions outlined in the new amendments. The FBR is also set to launch awareness campaigns to educate taxpayers about these changes and their implications. The Finance Act, 2027, has thus introduced a transformative shift in the tax landscape of Pakistan, with the FBR taking decisive steps to curb tax evasion and enhance compliance.

Date: 2024-08-07

Details: Karachi, August 7, 2024 – The Federal Board of Revenue (FBR) has announced a significant redefinition of the “time of supply” under sales tax law, as stipulated in the Finance Act, 2024. This change is expected to have wide-reaching implications for businesses and taxpayers across Pakistan. In a detailed explanation provided through Sales Tax Circular No. 3, the FBR outlined the amendments made to section 2(44)(a) of the Sales Tax Act, 1990. Prior to the enactment of the Finance Act, 2024, the time of supply was defined as the moment goods were delivered or made available to the recipient. This definition has now been expanded to capture additional scenarios that affect the liability to pay sales tax. The revised definition states that the obligation to pay sales tax on goods will now arise at either the time when the goods are delivered or made available to the recipient or when any payment is received by the supplier in respect of that supply, whichever occurs first. This dual criterion ensures that sales tax liability is triggered not only by the physical delivery of goods but also by the receipt of payment. “This amendment aims to close loopholes and ensure timely collection of sales tax,” a FBR official said. “By linking the liability to the earlier of delivery or payment, the FBR is working to enhance the efficiency and effectiveness of tax collection.” The change is part of a broader effort by the FBR to tighten regulatory compliance and improve the fiscal framework. Businesses are now required to adjust their accounting and operational practices to comply with this new regulation. This may involve changes to invoicing processes, payment tracking, and delivery documentation to ensure that sales tax is calculated and paid promptly. The Finance Act, 2024, with its comprehensive amendments, reflects the government’s commitment to strengthening the tax system and boosting revenue collection. The FBR’s move to redefine the time of supply is a strategic step towards reducing tax evasion and ensuring a more consistent flow of tax revenues.

Date: 2024-08-07

Details: Islamabad, August 7, 2024 – The government on Wednesday appointed Rashid Mahmood, a BS-21 officer of the Pakistan Administrative Service, as the chairman of the Federal Board of Revenue (FBR). Mahmood, previously serving as the Secretary of the Power Division, has been appointed to the FBR position with immediate effect. Mahmood takes over from Amjad Zubair Tiwana, who resigned about a week ago before reaching the age of superannuation. As the 40th chairman of the FBR, Mahmood is expected to steer the organization through significant challenges, including achieving the ambitious revenue collection targets set for the current fiscal year. The appointment of Mahmood comes at a critical juncture for the FBR, as the government emphasizes the need for substantial revenue generation to meet economic goals. The FBR’s target for this fiscal year is notably high, reflecting the government’s intent to enhance tax revenue to fund development projects and manage fiscal deficits. In addition to meeting revenue targets, Mahmood faces the complex task of broadening the tax base. This involves identifying and bringing more taxpayers into the formal economy, which has been a persistent issue for Pakistan. Enhancing tax compliance and reducing evasion will be crucial to expanding the tax base and increasing overall revenue. Digitalization of the FBR is another significant challenge Mahmood will need to address. Modernizing the FBR’s operations through digital solutions is essential for improving efficiency, transparency, and taxpayer services. This includes the implementation of advanced IT systems for tax collection, monitoring, and enforcement, which can streamline processes and reduce administrative burdens. During his tenure as Secretary of the Power Division, Mahmood was known for his efforts in improving governance and operational efficiency. His experience in managing complex administrative tasks and driving reforms will be instrumental in his new role at the FBR. The outgoing chairman, Amjad Zubair Tiwana, had made notable strides in enhancing the FBR’s performance during his tenure. Tiwana’s resignation has been met with mixed reactions, with some appreciating his efforts to increase revenue collection and others pointing out the ongoing challenges that remain. The business community and economic analysts will be closely watching Mahmood’s strategies and initiatives as he assumes his new role. His ability to navigate the multifaceted challenges of revenue collection, tax base expansion, and digital transformation will be key to the FBR’s success in the coming years.

Date: 2024-08-07

Details: August 7, 2024 Karachi, August 7, 2024 – The Federal Board of Revenue (FBR) has announced a reduction in the Federal Excise Duty (FED) on air tickets for passengers holding labour visas. Effective immediately, the FED on such tickets will be reduced to a fixed rate of Rs 5,000 per ticket, a substantial relief for those embarking on international journeys from Pakistan to Gulf Cooperation Council (GCC) countries. The announcement came through the issuance of SRO 1191(I)/2024 by the FBR, outlining the specifics of the revised duty structure. According to the notification, the reduced FED will apply to passengers whose passports bear a labour visa duly verified by the Protector of Emigrants under the Bureau of Emigration and Overseas Employment. This move is anticipated to benefit a large segment of Pakistani workers employed in the GCC region, who frequently travel between Pakistan and their host countries. High FED Rates Introduced Earlier This relief measure follows the introduction of significantly higher FED rates on international air tickets through the Finance Act, 2024. The revised FED rates, which came into effect from July 1, 2024, were seen as burdensome, particularly for those traveling for employment purposes. The FED rates introduced for various categories of international air tickets were as follows: • Club, Business, and First-Class Air Tickets: o IATA Traffic Conference Area 1 (including North, Central, South America, and surrounding areas): Rs 350,000 o IATA Traffic Conference Area 2:  Middle East and Africa: Rs 105,000  Europe: Rs 210,000 o IATA Traffic Conference Area 3 (including Far East, Australia, New Zealand, and Pacific Islands): Rs 210,000 The substantial FED rates had sparked concerns among frequent travelers, especially those traveling for employment in the Middle East, where the cost of travel is a significant factor in their financial planning. The reduction to Rs 5,000 per ticket for labour visa holders is expected to alleviate some of these concerns. Positive Impact on Overseas Pakistanis The reduction in FED is seen as a strategic move to support overseas Pakistanis, particularly those working in the GCC countries. This demographic constitutes a significant portion of Pakistan’s labour force abroad and plays a crucial role in the country’s economy through remittances. By lowering the cost of air travel, the FBR aims to provide financial relief to these workers, acknowledging their contribution to the national economy. The initiative has been welcomed by various stakeholders, including representatives from the Bureau of Emigration and Overseas Employment. They highlighted that the move would not only reduce travel costs but also encourage more Pakistani workers to seek employment opportunities abroad, further boosting remittance inflows. Implementation and Verification To ensure the benefit is exclusively available to eligible passengers, the FBR has stipulated that the labour visa must be printed on the passport and verified by the Protector of Emigrants. This verification process is crucial to prevent any misuse of the reduced FED rate and ensure that it reaches the intended beneficiaries. The reduced FED on air tickets is expected to have a positive ripple effect on the economy. By making international travel more affordable for labour visa holders, it is anticipated that more workers will be able to travel back and forth, maintaining their employment and continuing to support their families through remittances.

Date: 2024-08-06

Details: Hamid Waleed LAHORE: An appellate tribunal has directed the Federal Bureau of Revenue (FBR) to guide officers towards its mission and create an environment conducive to businesses. It added that it is crucial to address the conduct of tax officials who misuse the national exchequer, which can lead to significant waste of taxpayers’ money in futile litigation. According to details, a non-resident UAE-based company filed income tax returns within the specified time frame and claimed refundable taxes for services, imports, banks, utilities, etc. However, the department initiated income tax audit proceedings, and after examining and analyzing the records and considering the relevant laws, a significant income tax demand was created against the company. The department maintained that the taxpayer was filing returns under the incorrect assumption that WHT deducted at the import stage and for services was an adjustable/refundable income tax, whereas the same was final tax liability. It further pointed out that the taxpayer was not operating as an “industrial undertaking’ but as a service provider, making WHT on services provided a final tax. However, the taxpayer stressed that the department’s stance was flimsy, biased, patently illegal, and vindictive. The relevant appellate forum held that Section 170 in conjunction with Section 120 of the ITO allowed for refunds based on an assessment order issued by the commissioner on the day the return was furnished. If an amount was paid in excess of the chargeable tax determined in the assessment order, it can be claimed as a refund under subsection (1) of Section 170. Section 170 grants the commissioner the power to verify whether the claimed refund is supported by evidence but does not suggest that the Commissioner can question the correctness of a return that has attained the status of an assessment order by the fiction of law, it added. It further maintained that the Commissioner cannot go beyond the assessment order while exercising jurisdiction under section 170 of the ITO. If the Commissioner believes the tax deducted should be treated as final tax, he should assume jurisdiction under Section 122 of the Ordinance by issuing a show cause, the forum stressed. According to the forum, the refunding authorities are limited to verifying refund documents and ensuring tax payment to the federal treasure. They cannot discuss the taxpayer’s business or determine whether the income is presumptive or whether WHT is final, adjustable, or minimum. Copyright Business Recorder, 2024

Date: 2024-08-06

Details: Karachi, August 6, 2024 — The Large Taxpayers Office (LTO) Karachi, the Federal Board of Revenue’s (FBR) largest tax collection unit, has achieved a significant victory by attaching bank accounts for recovery of Rs 575 million from a renowned builder. The attachment of the builder’s bank account for the recovery, highlighting the LTO Karachi’s commitment to enforcing tax compliance. The builder, known for selling a prominent property in Karachi, had failed to pay the applicable taxes on the profit from the sale. This omission led to an audit by the LTO Karachi, which scrutinized the taxpayer’s records for the fiscal year 2021. Following the audit, a demand notice was issued to the builder, requiring payment of the outstanding tax amount. Rather than complying with the notice, the builder sought relief through the Appellate Tribunal, which granted a stay on the payment. However, this stay expired on August 4, 2024, with no further appeals pending. With the legal stay no longer in effect, the LTO Karachi was able to proceed with the recovery process. Sources within the FBR revealed that the bank accounts of the builder were attached for the recovery, a decisive action that would enable the LTO Karachi to reclaim the owed amount. This operation underscores the LTO Karachi’s effective enforcement strategies and its role in ensuring that high-profile taxpayers meet their financial obligations. The attachment for recovery of Rs 575 million not only reflects the efficiency of the LTO Karachi but also serves as a stern reminder to other major taxpayers about the importance of fulfilling tax liabilities. The LTO Karachi’s action is part of a broader effort by the FBR to enhance tax compliance and tackle significant cases of tax evasion. In recent times, the LTO Karachi has intensified its focus on major taxpayers, leveraging audits and legal measures to recover unpaid taxes and strengthen the national revenue system. The recovery from the builder is a testament to the agency’s commitment to ensuring that all taxpayers, regardless of their stature, adhere to their fiscal responsibilities. The LTO Karachi’s attachment of bank accounts in this case illustrates its crucial role in the FBR’s tax collection efforts and sets a precedent for future enforcement actions against tax defaulters.

Date: 2024-08-05

Details: ISLAMABAD: Federal Investigation Agency (FIA) has issued another notice to Mir Badshah Khan Wazir Member Inland Revenue (Operation) Federal Board of Revenue (FBR) to appear before the FIA in the matter of tax refunds to large taxpayer companies by the officials of Large Taxpayer Office (LTO) Lahore. According to second notice issued by the FIA to the FBR Member, whereas, it appears that the Member is acquainted with the facts/circumstances of enquiry that is under probe under Federal Investigation Act, 1974 r/w Chapter-XIV of the Code of Criminal Procedure 1898. The notice said that the noted inquiry is under probe in this agency on the allegations of corruption, kickbacks bribery, corrupt practices, misconduct, illegal approval of tax refunds to large taxpayer companies etc. by the officers/officials of LTO Lahore In this regard, FBR Member was called upon (in person through notices u/s 160 CrPC but the Member failed to appear on July 26, 2024. Therefore, the Member is once again called upon to appear in person) before the FIA Office, Anti-Corruption Circle, Lahore on August 5 (Monday) without fail, and explain his position, FIA notice said. FBR Member is further required to bring original CNIC and the following record/Information in his possession or with respect to above said matter, so as to clarify his position vis a-vis probe The record included summary of Large Taxpayer Companies of LTD Lahore in which refund have been issued; list of all moveable/Immoveable assets within Pakistan (Properties, Investments or accounts held directly or indirectly by him, his spouse or family and any other information/record pertaining to above said matter, FIA notice added. It is pertinent to mention that FIA had summoned FBR officers, including Member IR Operations, in refund issued to large companies. The FBR Member had submitted a written reply to the first notice of the FIA. In recent past, the FBR had suspended officers after speed money issue surfaced in this refund case. Later, Lahore High Court (LHC) has barred FIA from taking coercive measures against the FBR officers who have been summoned in tax refund cases. Copyright Business Recorder, 2024

Date: 2024-08-05

Details: Karachi, August 5, 2024 – In a decisive move to combat tax evasion and bolster revenue integrity, the Federal Board of Revenue (FBR) has significantly broadened the definition of sales tax fraud. Announced through Circular No. 3 of Sales Tax on Monday, the updated guidelines under the Finance Act, 2024, bring numerous acts and omissions into the ambit of tax fraud. The newly defined parameters are aimed at tightening controls and ensuring that all forms of tax evasion are addressed effectively. According to the FBR, the revised definition now encompasses a wide range of fraudulent activities, reflecting a more comprehensive approach to curbing tax malpractices. Under the updated regulations, the definition of tax fraud includes: • Suppression of Taxable Sales/Receipts: Deliberately not reporting or underreporting sales or receipts to evade tax liabilities. • False Claims of Input Tax Credit: Illegitimately claiming tax credits for inputs not genuinely received or used. • Uninvoiced Supply of Taxable Goods: Providing taxable goods without issuing a tax invoice, undermining tax collection mechanisms. • Issuance of False Tax Invoices: Issuing invoices without actual goods supply to wrongfully claim input tax credits or refunds. • Evasion through Undue Input Tax Credit: Engaging in practices to wrongfully obtain tax credits or refunds by other means. • Delayed Tax Deposits: Failing to deposit collected taxes within three months of the due payment date. • Creation of False Records: Generating or using fake financial records or documents to evade taxes or claim inadmissible refunds, using various methods. • Tampering with Evidence: Altering or destroying documents and evidence necessary for tax compliance. • Dealing with Confiscatable Goods: Handling goods that are subject to confiscation under tax laws. • Unregistered Taxable Supplies: Making taxable supplies without appropriate sales tax registration. • Intentional Tax Losses: Engaging in actions specifically designed to cause a loss of tax revenue. The FBR has made it clear that these acts or omissions will be deemed intentional unless the accused can prove otherwise. This shift places the burden of proof on individuals to demonstrate that their actions were not intended to commit tax fraud. The expanded definition reflects the FBR’s commitment to a more rigorous enforcement of tax laws and is expected to enhance the agency’s ability to detect and penalize fraudulent activities. By addressing a broader spectrum of tax fraud scenarios, the FBR aims to protect public revenue and ensure a fair tax system. The enhanced measures are part of the FBR’s broader strategy to modernize tax administration and address persistent issues of evasion and non-compliance. As these changes take effect, businesses and individuals alike will need to adapt to the stricter regulatory environment and ensure that their tax practices are fully compliant with the new standards.

Date: 2024-08-05

Details: Karachi, August 5, 2024 – In a significant move to modernize and streamline the tax system, the Federal Board of Revenue (FBR) has unveiled new provisions aimed at digitizing the supply chain. Announced on Monday, these changes are part of the Sales Tax Act, 1990, and come in the wake of the Finance Act, 2024. The FBR’s Circular No. 3, issued today, outlines the key updates introduced under the recent Finance Act. These reforms are designed to enhance efficiency and compliance within the tax framework by leveraging digital technology. One of the major changes is the introduction of the term ‘Licensed Integrator,’ defined under a new clause (15A) in Section 2 of the Sales Tax Act. A Licensed Integrator is essentially an entity authorized by the FBR to provide electronic invoicing systems. These systems are crucial for integrating registered persons, ensuring that all transactions are processed in a standardized, electronic format. In conjunction with this, a new provision, serial No.25AA, has been added to Section 33 of the Act. This new addition outlines penalties for Licensed Integrators who fail to meet integration requirements. This move underscores the FBR’s commitment to enforcing compliance and maintaining the integrity of the digitization process. Additionally, Section 23 of the Sales Tax Act has been revised to mandate that certain registered persons issue electronic invoices. This requirement will be subject to conditions and restrictions as set by the FBR. This change aims to ensure that all relevant transactions are captured electronically, reducing the scope for errors and fraud. Further reforms include the addition of new sub-sections (4) and (5) to Section 40C of the Sales Tax Act. These amendments grant the FBR the authority to require specific individuals or classes of individuals to integrate their electronic invoicing systems with the FBR’s Computerized System. This integration will facilitate real-time reporting of sales, enhancing transparency and efficiency in tax reporting. The FBR’s latest reforms are expected to have a transformative impact on the tax landscape, making it easier to track and manage transactions while reducing manual processing errors. As businesses adapt to these new requirements, the aim is to foster a more transparent and efficient tax system that benefits all stakeholders involved. The FBR’s proactive approach to supply chain digitization marks a significant step forward in modernizing Pakistan’s tax administration, aligning it with global standards and improving overall economic efficiency.

Date: 2024-08-05

Details: Karachi, August 5, 2024 – The Federal Board of Revenue (FBR) has announced a significant increase in the number of active taxpayers in Pakistan, reaching 5.23 million for the tax year 2023. This surge reflects the success of recent initiatives aimed at broadening the tax base. According to official data released on Monday, the number of active taxpayers has risen sharply from 3.35 million at the launch of the Active Taxpayers List (ATL) on March 1, 2024. The latest update, based on income tax returns filed up to August 4, 2024, highlights a remarkable increase of 1.88 million active taxpayers over the past five months. FBR officials attribute this rise to stringent measures implemented under the new Budget 2024, which have effectively encouraged non-compliant taxpayers to fulfill their tax obligations. “The significant growth in active taxpayers is a clear indicator of the effectiveness of our recent strategies and reforms,” an FBR source stated. “Our efforts to expand the tax net and improve compliance are yielding positive results.” The FBR has been updating the ATL on a weekly basis, and the current numbers reflect ongoing efforts to enhance tax collection and compliance. The government aims to boost the number of active taxpayers to 10 million, which would help widen the tax net and improve the tax-to-GDP ratio. This ambitious goal underscores the government’s commitment to enhancing fiscal responsibility and economic stability. Looking ahead, the FBR anticipates that the number of active taxpayers for the tax year 2024 will see further growth, thanks to recent changes in the income tax statute. These changes include increased penalties for non-filers and late filers, which are expected to incentivize more individuals and businesses to comply with tax regulations. The deadline for filing income tax returns for the tax year 2024 is September 30, 2024. The FBR encourages all taxpayers to file their returns by this date to avoid penalties and contribute to the country’s economic development. Overall, the surge in active taxpayers is a promising development for Pakistan’s tax system, reflecting both the effectiveness of recent reforms and the increasing willingness of citizens to meet their tax obligations. The FBR continues to work towards expanding the tax base and improving fiscal transparency, with the goal of strengthening the nation’s financial foundation.

Date: 2024-08-04

Details: The Federal Board of Revenue (FBR) has released a detailed procedure for taxpayers to seamlessly file their income tax returns for the tax year 2024. Logging into Iris: The Digital Gateway The primary platform for filing income tax returns is the Iris portal, the FBR said. New taxpayers will need to register before proceeding. Those already registered can log in using their National Tax Number (NTN) or Registration Number and password. For those who have forgotten their password, the FBR has provided a password reset option. Once logged in, taxpayers can change their password for added security, the FBR advised. Completing the Return and Wealth Statement To successfully submit an income tax return, taxpayers must complete both the Return of Income form and the Wealth Statement. The FBR has introduced video tutorials and a Knowledge Base portal to guide taxpayers through the process. A crucial step is reconciling the Wealth Statement. The increase or decrease in wealth must match the difference between income and expenses, according to the FBR. Special Considerations for Salaried Individuals To simplify the process for salaried individuals, the FBR has introduced Declaration form 114(I). This form is applicable to those whose salary constitutes more than 75% of their total income. Revising Returns and Record Keeping Taxpayers have the option to revise their income tax returns within five years of the original filing date. Wealth statements can also be revised before receiving a notice from the FBR. It’s important to note that taxpayers must retain income tax return records for six years. Protecting Taxpayer Information The FBR emphasizes that personal information provided during the tax filing process is confidential and will not be shared with anyone except tax officials. Non-compliance with tax filing obligations can result in penalties and prosecution. Disclaimer: This information is based on the official FBR website. For accurate and up-to-date details, please visit the FBR’s official portal.

Date: 2024-08-04

Details: Understanding the fundamentals of income tax in Pakistan is crucial for individuals and businesses alike before embarking on the process of registration and filing returns. This article provides a basic overview of key concepts to help you navigate the tax landscape. Taxable Income: What You Actually Pay Tax On The amount you pay tax on is called taxable income. This is calculated by subtracting eligible donations and specific allowances from your total income. Total Income: The Sum of Your Earnings Total income is a comprehensive figure representing all your earnings from various sources. It’s the starting point for determining your tax liability. Heads of Income: Where Your Money Comes From The Income Tax Ordinance, 2001 categorizes income into five main heads: • Salary: Income from employment. • Income from Property: Earnings from property ownership. • Income from Business: Profits generated from business operations. • Capital Gains: Profit from selling assets. • Income from Other Sources: Income not covered by the above categories. Residency Status: Where You Belong for Tax Purposes Your residency status determines how your income is taxed. Individuals are generally considered residents if they spend a certain amount of time in Pakistan. Companies and associations have different residency criteria based on control and management location. Pakistan vs. Foreign Income: Where You Earn Matters Income earned within Pakistan is typically taxed as Pakistan source income, while income from outside the country is foreign source income. Tax rules differ for each. Key Terms: Understanding the Jargon • Person: Includes individuals, companies, associations, and government entities. • Company: A legal entity with a broader definition encompassing various organizations. • Association of Persons: Partnerships, Hindu undivided families, and other groups. • Tax Year: The 12-month period for which taxes are calculated, usually aligned with the financial year. Conclusion Navigating the tax system can be complex, but understanding these basic concepts is a solid starting point. While this article provides a foundational overview, it’s essential to consult detailed tax laws or seek professional advice for specific situations. By grasping these fundamentals, you can approach your tax obligations with greater confidence.

Date: 2024-08-04

Details: Islamabad, August 4, 2024 — The government is exploring options to provide income tax relief to the salaried class. The move comes as the coalition government faces mounting pressure from the ongoing sit-in by the Jamaat-e-Islami (JI) in Rawalpindi against inflated electricity bills and high taxes. Addressing the federal cabinet meeting earlier today, Prime Minister Shehbaz Sharif emphasized the coalition government’s commitment to reducing electricity bills to alleviate the financial burden on the masses. He, however, urged that the issue should not be politicized. Sources said that the government is considering various strategies to reduce direct taxes for salaried individuals earning up to Rs100,000 per month. The proposed relief, estimated at Rs40 billion, aims to support low-income groups. Discussions are underway to potentially divert funds from the development budget to facilitate this relief. The sources also mentioned that the International Monetary Fund (IMF) would be consulted to ensure the proposed measures align with the country’s financial commitments. This step is crucial as the National Assembly recently passed a challenging national budget on June 28, targeting a tax revenue of 13 trillion rupees ($46.66 billion) for the fiscal year starting July 1. This represents an approximately 40% increase from the current year, aimed at bolstering Pakistan’s case for a new IMF rescue deal. The tax target comprises a 48% rise in direct taxes and a 35% increase in indirect taxes over revised estimates from the previous year. Additionally, non-tax revenue, including petroleum levies, is projected to grow by 64%. Key sectors such as textiles, leather products, and mobile phones will see an 18% tax hike. There is also an increase in capital gains tax from real estate, and workers will face higher direct taxes on their income. Despite these tax hikes, there is a glimmer of hope as the Consumer Price Index (CPI)-based inflation recorded an 11.1% year-on-year decrease in July 2024. This is down from 12.6% in June 2024 and a significant drop from 28.3% in the corresponding month last year, according to data released by the Pakistan Bureau of Statistics (PBS) on Thursday. The current political and economic landscape is tense, with the JI’s protest highlighting public frustration over rising living costs. The government’s potential tax relief measures are seen as an attempt to ease this burden. However, the success of these measures depends on balancing fiscal responsibility with the need to provide immediate relief to the populace. As the coalition government navigates these challenges, it remains to be seen how effectively it can implement these tax relief measures without derailing its broader economic objectives. The upcoming discussions with the IMF will likely play a pivotal role in determining the feasibility and scope of the proposed relief.

Date: 2024-08-03

Details: LAHORE: The Lahore Tax Office (LTO) failed to deduct tax on transfer from construction work in progress (CWIP) to fixed assets, as no payment was made, said sources. According to details, the Commissioner Inland Revenue (Appeals -l) had deleted the demand regarding non-deduction of tax levied under the heading of transfer from CWIP to fixed assets against a chemical firm. However, the concerned Commissioner termed it unjustified and argued that the default surcharge is a mandatory levy and hence cannot be deleted and to be imposed in a scenario where tax was not deducted as per law. He further maintained that the previously passed order is bad in law and against the facts of the case, as the taxpayer was rightly charged with the tax as the taxpayer failed to furnish supporting evidence of the declared results before the Assessing Officer. However, the taxpayer company provided the appellate forum with a letter and stated that reply with evidence was duly made to the assessing officer through the said letter. Without taking into consideration the reply made the tax was levied on the taxpayer, it maintained. Additionally, copy of ledgers, income tax return and accounts financial statement were also submitted by the company. The appellate tribunal held that for the issue of deletion of the tax amount arising from transfer of CWIP to fixed assets, the department rightfully deleted the charge as the transfer from CWIP to fixed assets was made without any payment, henceforth, no deduction is necessary. It was further held that on the issues of tax deletion under the heads of packing material, consumed stores & spare and advances to supplier, the produced copies of the ledger by the taxpayer company indicates that wherever tax was applicable was duly deducted and deposited. In addition thereto, the ATIR held that the produced copy of the income tax return reflects that there was a substantial amount of refund, due to which default surcharge cannot be levied. Therefore, the departmental Appeal was rejected by the appellate tribunal. Copyright Business Recorder, 2024

Date: 2024-08-03

Details: Karachi, August 3, 2024 – The Federal Board of Revenue (FBR) has reported a staggering 492% increase in the collection of withholding tax on foreign payments made through debit and credit cards during the fiscal year 2023-24. The Large Taxpayers Office (LTO) Karachi revealed that the collection soared to Rs 4.7 billion, up from Rs 785 million in the preceding fiscal year. According to sources within the FBR, this significant rise in tax collection is attributed to the stringent measures enforced by the LTO Karachi, which required banks registered with the office to deduct withholding tax on foreign payments made through debit and credit cards. This requirement is in accordance with Section 236Y of the Income Tax Ordinance, 2001, introduced through the Finance Act of 2022. Section 236Y mandates that “every banking company shall collect advance tax at the time of transfer of any sum remitted outside Pakistan on behalf of any person who has completed a credit card, debit card, or prepaid card transaction with a person outside Pakistan at the rate specified in Division XXVII of Part IV of the First Schedule.” This collected advance tax is adjustable against the taxpayer’s annual tax liability. The withholding tax rates for amounts remitted abroad through credit or debit cards stand at 5% for individuals listed on the Active Taxpayers List (ATL) and 10% for those not on the ATL, as per the updated rates effective until June 30, 2024. The massive jump in tax collection reflects the effectiveness of the new tax regulations and the compliance of banking institutions. The surge also underscores the growing volume of foreign transactions made by Pakistani residents through debit and credit cards, highlighting an increasing trend towards digital and online international spending. The FBR’s initiative to tighten the tax net around foreign remittances through debit and credit cards aims to curb tax evasion and enhance the country’s revenue collection. The increased tax revenue is expected to support the government’s fiscal policies and contribute to economic stability. As the government continues to introduce reforms to broaden the tax base and improve compliance, the surge in withholding tax collection from foreign payments through credit cards serves as a promising indicator of the success of these measures. It also sets a precedent for future tax policy enhancements aimed at increasing transparency and accountability in financial transactions.

Date: 2024-08-03

Details: Karachi, August 3, 2024 – The Federal Board of Revenue (FBR) has broadened the reach of the capital value tax (CVT) to include residential houses and farmhouses starting from the tax year 2024-25. This move comes as part of the Finance Act, 2024, which aims to enhance revenue collection and bring more properties within the tax net. According to the FBR, the Finance Act, 2024, has modified Section 8 of the Finance Act, 2022, to levy CVT on farmhouses and residential houses located within the Islamabad Capital Territory. A new proviso to sub-section (1) of section 8 has been added to ensure that the CVT on these properties is levied, charged, collected, and paid based on the area of the farmhouse and residential house, irrespective of their value. In further detail, the FBR explained that two new clauses, (ab) and (ac), have been inserted into sub-section (2) of section 8, thereby expanding the CVT’s scope to encompass farmhouses and residential houses within Islamabad Capital Territory. These clauses designate these properties as assets subject to the CVT. Sub-section (4) of section 8 outlines the method of CVT collection and payment. Amendments to clause (g) of sub-section (4) specify that owners of farmhouses and residential houses within the Islamabad Capital Territory must pay the CVT when their income tax return for the tax year is due. The FBR has also revised the first schedule to Section 8 of the Finance Act, 2022, to stipulate the CVT rates for farmhouses and residential houses. The rates are as follows: 1. Rs 500,000 for farmhouses with an area between 2,000 and 4,000 square yards, and Rs 1,000,000 if the area exceeds 4,000 square yards. 2. Rs 1,000,000 for residential houses with an area between 1,000 and 2,000 square yards, and Rs 1,500,000 if the area exceeds 2,000 square yards. The FBR believes this expansion of the CVT will enhance tax compliance and revenue generation by bringing more high-value properties into the tax fold. The new CVT measures are part of the government’s broader strategy to increase tax revenues and reduce the budget deficit. However, this move has garnered mixed reactions from property owners and real estate experts. Some property owners argue that the expanded CVT places an additional financial burden on them, especially those who own large residential properties or farmhouses in Islamabad. They express concerns about the timing of these measures, given the economic challenges faced by many due to inflation and rising living costs. On the other hand, some real estate analysts view the expanded CVT as a necessary step towards broadening the tax base and ensuring that high-value property owners contribute a fair share to the national exchequer. They argue that the tax revenue generated from these properties can be utilized for public welfare projects and infrastructure development within the Islamabad Capital Territory. The FBR’s expansion of the CVT to residential houses and farmhouses marks a significant shift in Pakistan’s property tax landscape. As the new regulations take effect, property owners and investors will need to navigate these changes and ensure compliance to avoid penalties. The coming months will reveal the impact of these measures on the real estate market and overall tax revenue.

Date: 2024-08-02

Details: Karachi, August 2, 2024 – The Federal Board of Revenue (FBR) has announced the introduction of progressive tax rates on the sale and purchase of immovable property, effective from July 1, 2024. This change, brought about through the Finance Act, 2024, aims to create a more equitable tax structure for property transactions. Under the new regulations, the rates of advance income tax on the sale of immovable property are based on the gross amount of consideration received. The revised rates are as follows: 1. For property transactions where the gross amount of consideration received does not exceed Rs 50 million, the tax rate is set at 3%. 2. For transactions where the gross amount of consideration received exceeds Rs 50 million but does not exceed Rs 100 million, the tax rate is 3.5%. 3. For transactions where the gross amount of consideration received exceeds Rs 100 million, the tax rate is 4%. Similarly, the FBR has applied progressive tax rates on the purchase value of immovable property based on its fair market value. The new rates are: 1. For properties with a fair market value not exceeding Rs 50 million, the tax rate is 3%. 2. For properties with a fair market value exceeding Rs 50 million but not exceeding Rs 100 million, the tax rate is 3.5%. 3. For properties with a fair market value exceeding Rs 100 million, the tax rate is 4%. The FBR stated that these adjustments are designed to ensure a fairer tax system and to increase compliance among property buyers and sellers. By implementing progressive tax rates, the FBR aims to balance the tax burden more effectively across different segments of property transactions. Tax experts have noted that this move will likely encourage transparency in property transactions, as the tax rates are directly linked to the transaction value. This could lead to a reduction in underreporting of property values, a common issue in the real estate sector. The revised tax rates are part of a broader strategy by the FBR to enhance revenue collection and streamline tax administration. Property buyers and sellers are advised to familiarize themselves with the new rates and ensure accurate reporting of transaction values to avoid potential penalties.

Date: 2024-08-02

Details: Karachi, August 2, 2024 – The Federal Board of Revenue (FBR) has announced new restrictions on Inland Revenue (IR) Commissioners, limiting their authority to issue 100% exemption certificates on payments made to non-residents. This significant change comes in the wake of the amendments introduced through the Finance Act, 2024. Previously, under sub-section (4) of Section 152 of the Income Tax Ordinance, 2001, IR Commissioners were empowered to allow certain recipients to make payments without deduction of tax or with a reduced rate of tax. This applied to recipients with a Permanent Establishment in Pakistan or those receiving payments where the tax deductible was not the minimum. However, the recent amendments have curtailed this authority. The FBR clarified that the Commissioners can no longer issue certificates that completely exempt the tax deduction. They are now restricted to issuing reduced rate certificates, but the reduction cannot exceed 80% of the rate specified in Division II of Part III of the First Schedule of the Income Tax Ordinance, 2001. This move is aimed at ensuring a more consistent and fair application of tax laws across the board. In a similar vein, changes have been made to sub-section (4) of Section 153. Previously, IR Commissioners could issue certificates for recipients to receive payments without any tax deduction or with a reduced rate, where the tax deductible was not the minimum. The amendment has now substituted this provision, restricting the Commissioners from issuing certificates without tax deduction. Instead, they can only issue reduced rate certificates, with the reduction capped at 80% of the rate specified in Division III of Part III of the First Schedule. The FBR emphasized that these changes are designed to enhance tax compliance and ensure a more equitable tax system. By limiting the scope of tax exemptions, the FBR aims to increase the tax base and improve revenue collection. Tax experts believe that this change will have a significant impact on non-residents and entities with Permanent Establishments in Pakistan, who previously benefited from the 100% exemption certificates. The new restrictions will require these entities to reassess their tax planning strategies and potentially face higher tax liabilities.

Date: 2024-08-02

Details: Karachi, August 2, 2024 – The Federal Board of Revenue (FBR) has announced it will soon disclose the values of imported goods for the purpose of collecting advance income tax. This move is in line with amendment made through the Finance Act, 2024, which mandates the FBR to establish the minimum value of goods for the collection of advance tax under Section 148 of the Income Tax Ordinance, 2001. As per the Circular No. 1 of 2024-25, the FBR explained the Collector of Customs is required to collect advance tax from every importer on the value of goods at the rate specified in the Income Tax Ordinance, 2001. This collection process is to be conducted under the provisions of the Customs Act, 1969, where applicable, ensuring a streamlined approach. The value of goods, as defined in sub-section (9) of Section 148, refers to the value determined under the Customs Act, 1969. This includes the ad valorem duty increased by customs duty, federal excise duty, and sales tax payable on the import of goods. However, for goods taxed at retail price under the Third Schedule of the Sales Tax Act, 1990, the value is defined as the retail price increased by the sales tax payable on the import and taxable supply of such goods. Through the Finance Act, 2024, a new sub-section (6A) has been introduced in Section 148. This empowers the FBR to determine the minimum value of goods for advance tax collection via notification in the official Gazette. Additionally, Clause (c) has been added to sub-section (9), which stipulates that the value of goods will be the minimum value notified by the FBR under sub-section (6A), as if the goods were subject to ad valorem duty, inclusive of customs duty, federal excise duty, and sales tax payable on the import. The FBR’s initiative to announce the values of imported goods aims to bring clarity and uniformity to the tax collection process. Importers will now have a clearer understanding of the minimum values applicable, ensuring compliance and aiding in the efficient collection of advance income tax. This regulatory update is expected to have significant implications for importers and the broader trade sector. The standardized valuation process will likely reduce disputes and streamline tax collection, enhancing revenue generation for the government. In conclusion, the FBR’s forthcoming announcement marks a critical step towards refining the taxation framework for imported goods. Importers are advised to stay informed about the upcoming notification and prepare for the adjustments in the tax collection process.

Date: 2024-08-02

Details: Karachi, August 2, 2024 – The Federal Board of Revenue (FBR) has clarified the changes to the capital gains tax (CGT) regime on securities as implemented through the Finance Act, 2024. The FBR issued Circular No. 1 of 2024-25 to detail these modifications, providing comprehensive insights into the updated tax structure. Prior to the enactment of the Finance Act, 2024, the capital gains on the disposal of securities were taxed at varying rates depending on the holding period. Specifically, for securities acquired on or after July 1, 2022, the CGT was set at 15% for a holding period not exceeding one year. This rate decreased progressively, becoming zero for holding periods beyond six years. For securities acquired between July 1, 2013, and June 30, 2022, the tax rate was 12.5%, and for those acquired before July 1, 2013, the rate was zero. The Finance Act, 2024 has not altered the CGT rates for securities acquired before July 1, 2024. The tax rate remains 12.5% for securities acquired between July 1, 2013, and June 30, 2022, and zero for those acquired before July 1, 2013. For securities acquired from July 1, 2022, to June 30, 2024, the CGT rates based on the holding period are as follows: • 15% for holding periods less than one year, • 12.5% for holding periods exceeding one year but not more than two years, • 10% for holding periods exceeding two years but not more than three years, • 7.5% for holding periods exceeding three years but not more than four years, • 5% for holding periods exceeding four years but not more than five years, • 2.5% for holding periods exceeding five years but not more than six years, • 0% for holding periods exceeding six years. Significant changes have been introduced for securities acquired on or after July 1, 2024. The Finance Act, 2024, has standardized the CGT rate at 15%, regardless of the holding period, for individuals and Association of Persons (AOPs) who are listed on the Active Taxpayers List (ATL) at both the acquisition and disposal dates. For individuals and AOPs not on the ATL at the time of acquisition and disposal, the tax rate will follow Division I, Part I of the First Schedule of the Income Tax Ordinance, 2001, with a minimum rate of 15%. For companies not listed on the ATL at acquisition and disposal, the applicable tax rate is 29%, as specified in Division II, Part I of the First Schedule. The Finance Act, 2024 also revised the CGT deduction rates for mutual funds, collective investment schemes, and REIT schemes. For individuals and AOPs, the rate on stock funds and other funds has increased from 10% to 15%. For companies, the rate for stock funds has similarly risen from 10% to 15%. Additionally, for stock funds where dividend receipts are less than capital gains, the tax deduction rate has been elevated from 12.5% to 15%. The FBR’s clarification of the CGT regime aims to streamline tax compliance and ensure a consistent application of tax laws. These updates are part of the broader efforts to enhance revenue collection and provide clarity to taxpayers. In summary, the Finance Act, 2024 introduces significant updates to the CGT regime on securities, with a focus on progressive taxation and ensuring compliance. Taxpayers are encouraged to familiarize themselves with the new regulations and adjust their financial planning accordingly. The FBR’s detailed circular provides a comprehensive guide to the updated tax rates and is a crucial resource for all stakeholders involved in securities transactions.

Date: 2024-08-02

Details: Islamabad, August 2, 2024 – Chairman Federal Board of Revenue (FBR) Malik Amjed Zubair Tiwana administered the oath to the newly elected office bearers of the Management Board of IRS Officers Association (IRSOA) on Friday. The newly elected board comprises Waseem Hayat Bajwa as President; Naib Ali Pathan, Senior Vice President; Ms. Nafeesa Satti, Executive Vice President; Ali Saleh Hayat Kalyar, Secretary General; Ghulam Mustafa Dogar, Joint Secretary; Sohail Anjum, Press Secretary; Ms. Riffat Aziz, Treasurer; and Muhammad Zarar Irshad, Coordinator. Following the oath-taking ceremony, President IRSOA Waseem Hayat Bajwa addressed the challenges faced by IRS officers and proposed solutions to enhance the department’s efficiency and capacity. He emphasized the pressing issue of inadequate human resources in comparison to the population and number of taxpayers. He pointed out that countries like the UK, US, Canada, and Japan have a tax workforce four times larger than that of FBR, despite having populations less than half of Pakistan’s. To address this disparity, Bajwa proposed filling 3,200 vacancies in BS (1 to 15), recruiting 1,500 to 2,000 new inspectors, and creating 100 to 125 new positions in BS 20 & 21. He also highlighted the limited outreach of FBR, which has fewer than 100 offices across the country compared to Japan’s 525 offices, including 100 in Tokyo alone. Bajwa suggested establishing 145 District Tax Offices nationwide, complete with the necessary infrastructure, human resources, and logistics. Bajwa also touched on the issue of slow career progression, particularly in BS 19 to 21. He recommended upgrading six CCIRs from BS 20 to 21, establishing four new directorates for Anti-Money Laundering, creating 50 to 60 BS-20 positions in district tax offices, six BS-20 positions for CIR (Appeals), and 75 BS-21 positions for 100 benches of the IRS Tribunal. Furthermore, Bajwa highlighted that FBR employees are the lowest paid among all service groups, receiving only a frozen performance allowance of 20% of their basic pay, whereas other federal and provincial service groups receive 150% additional pay. He argued that FBR employees, who are responsible for collecting trillions of rupees in taxes, should be compensated on par with officers of other groups. Bajwa also pointed out that only 0.43% of revenue is spent on FBR, the lowest in the world. He suggested that international best practices dictate that tax authorities should receive 1.5% to 2.5% of revenue. He noted that the Punjab Revenue Authority receives 2% of its revenue targets. Bajwa proposed financial autonomy for FBR with a single-line budget of up to 1.5% of revenue targets, providing the fiscal space needed to improve working conditions and streamline operations. Member PR, Mr. Bakhtiar Muhammad, expressed best wishes for IRSOA’s efforts to promote the welfare of IRS officers and pledged support for enhancing service conditions in coordination with IRSOA.

Date: 2024-08-01

Details: Karachi, August 1, 2024 – The Federal Board of Revenue (FBR) has elaborated on the penalties for non-compliance introduced through the Finance Act, 2024. These amendments to the Income Tax Ordinance, 2001, are aimed at enhancing tax compliance and ensuring stricter adherence to tax laws. The FBR highlighted that prior to the Finance Act, 2024, there were no penalties or prosecution measures for individuals who discontinued their business and failed to file a return, even in response to a notice issued by the concerned commissioner. To address this, the Finance Act, 2024, has inserted serial 1B to Section 182 of the Income Tax Ordinance. This new provision states that if a business is discontinued and the taxpayer fails to file a return in response to a notice, a penalty will be imposed. The penalty will be the higher of 0.1% of the tax payable for the tax year for each day of default or Rs 1,000 per day of default, subject to a minimum penalty of Rs 10,000 for individuals and Rs 50,000 for other persons. Additionally, the Finance Act, 2024, has introduced serial 3A under Section 182, prescribing penalties for non-compliance with Section 99B. According to this provision, if a trader fails to register or pay advance tax under the Tajir Dost Special Procedure, 2024, their shop will be sealed for seven days on the first default and for twenty-one days for each subsequent default. A new penalty under serial 10A has been established for non-compliance with Section 114B. If any person fails to comply with an income tax general order issued by the FBR within 15 days, they will face a penalty of Rs 50 million for the first default and Rs 100 million for each subsequent default. This penalty is applicable from a date to be notified by the FBR. To address non-compliance with Section 37(6), serial 12A has been introduced. This provision targets individuals who fail to pay tax at the time of making payment as consideration for shares or at the time of registration of shares by the Securities and Exchange Commission of Pakistan (SECP) or by the State Bank of Pakistan (SBP), whichever is earlier. Such individuals will be subject to a penalty equal to 50% of the amount of tax involved. The FBR also noted measures to address the filing of blank documents or annexures along with returns. Through the insertion of serial 35 in Section 182, a penalty has been introduced for companies, including banking companies and associations of persons (AOP), for submitting blank or incomplete documents. The penalty for such non-compliance is Rs 500,000 or 10% of the tax chargeable on the taxable income, whichever is higher. These amendments reflect the FBR’s commitment to enforcing tax laws more rigorously and ensuring greater compliance among taxpayers. By imposing stringent penalties for non-compliance, the FBR aims to deter tax evasion and enhance the integrity of the tax system. The FBR encourages all taxpayers to familiarize themselves with these new provisions and ensure timely and accurate filing of their tax returns to avoid the substantial penalties outlined in the Finance Act, 2024.

Date: 2024-08-01

Details: August 1, 2024 Islamabad, July 31, 2024 –The Federal Board of Revenue (FBR) has surpassed its tax target for July 2024, collecting Rs 659.2 billion against the target of Rs 656 billion. This milestone, announced in a statement on Wednesday, marks a promising start to the financial year 2024-25. Despite issuing refunds totaling Rs 77.9 billion, the FBR managed to exceed its target. The breakdown of the collections is as follows: Rs 300.2 billion from Income Tax, Rs 307.9 billion from Sales Tax, Rs 37.4 billion from Federal Excise Duty, and Rs 91.7 billion from Customs Duty. This accomplishment highlights the FBR’s robust performance amid the country’s ongoing economic challenges. The agency’s ability to meet and exceed the monthly tax target underscores the commitment and efficiency of its officials. The FBR’s success in July is particularly significant given the broader economic difficulties Pakistan is currently facing, including high inflation, currency depreciation, and fiscal deficits. The FBR’s dedication to its revenue collection goals, despite these challenges, is a testament to the effectiveness of its strategies and the hard work of its personnel. The organization’s ability to maintain its focus and deliver results is crucial for Pakistan’s economic stability. Effective tax collection helps ensure the government has the necessary funds to invest in essential public services and infrastructure, fostering overall economic growth. This strong start to the financial year bodes well for the FBR’s future targets and efforts. The continued focus on efficient tax collection and administration will be crucial in supporting Pakistan’s economic stability and growth. The FBR has emphasized the importance of broadening the tax base and improving compliance among taxpayers to sustain and enhance revenue collection. The performance in July sets a positive tone for the rest of the financial year, showcasing the potential for achieving higher revenue targets and contributing to the country’s financial health. By meeting and surpassing its targets, the FBR not only secures vital revenue for the government but also builds confidence in its capability to manage and enhance tax collection mechanisms. Moving forward, the FBR aims to build on this momentum by implementing further reforms and technological advancements in tax administration. These efforts include expanding the use of data analytics to identify and target non-compliant taxpayers, enhancing the ease of filing returns, and continuing to improve the transparency and efficiency of the tax collection process. Overall, the FBR’s achievement in July is a promising indicator of its potential to drive significant revenue growth for Pakistan, supporting the government’s broader economic objectives and contributing to the nation’s financial well-being.

Date: 2024-07-31

Details: Karachi, July 31, 2024 –The Federal Board of Revenue (FBR) has eliminated the holding period concept for immovable properties acquired on or after July 1, 2024. This change marks a substantial shift in the taxation of real estate transactions within Pakistan. As per the Finance Act, 2024, capital gains arising from the disposal of immovable property within Pakistan will now be subject to a flat tax rate. Previously, the tax rate on capital gains varied based on the property’s holding period, with different rates applicable depending on how long the property was held before being sold. This created a complex structure that often led to confusion among taxpayers and required meticulous record-keeping to ensure compliance, according to Circular No. 1 of 2024-25 issued by the FBR. Under the new rules, the FBR said individuals and associations of persons (AOPs) appearing on the Active Taxpayers List (ATL) at the time of property disposal will be taxed at a 15% rate. Those not on the ATL will be subject to higher rates specified in the First Schedule. However, the minimum tax rate for individuals and AOPs has been set at 15%. This uniformity in tax rates aims to streamline the process and make it easier for taxpayers to calculate their liabilities. For properties acquired before July 1, 2024, the existing holding period-based tax structure will continue to apply. This means that any capital gains realized from these properties will still be taxed based on the duration for which the property was held, maintaining the old regime for those investments. The FBR’s decision is expected to simplify tax calculations for property transactions while potentially increasing government revenue. By removing the holding period concept, the FBR aims to reduce administrative burdens and encourage more transparent and straightforward real estate dealings. However, the impact on the real estate market remains to be seen. Some experts believe that the flat tax rate could stimulate property transactions, as sellers would no longer be incentivized to hold onto properties for extended periods to benefit from lower tax rates. This could lead to increased liquidity in the market, potentially driving up real estate activity. On the other hand, there are concerns about how this change might affect property values. A flat tax rate, regardless of the holding period, might lead to short-term fluctuations in property prices as the market adjusts to the new regime. Additionally, investors who previously relied on long-term holding strategies to minimize their tax liabilities may need to reassess their investment approaches. The FBR’s move is seen as part of broader efforts to reform Pakistan’s tax system, making it more efficient and taxpayer-friendly. As the country navigates these changes, stakeholders in the real estate sector will be closely monitoring the effects on market dynamics and overall economic activity.

Date: 2024-07-31

Details: Karachi, July 31, 2024 – The Federal Board of Revenue (FBR) has announced that exporters must now pay a 2% income tax to withholding agents. This tax is divided into two parts: a 1% minimum tax and a 1% adjustable advance tax. Until June 30, 2024, exporters were only required to pay a 1% withholding tax, which was their final tax liability. However, the Finance Act, 2024 has introduced significant changes, bringing exporters into the regular tax regime. The FBR explained that the Finance Act, 2024 introduced a new provision, sub-section (6C), in Section 147 of the Income Tax Ordinance, 2001. According to this provision, withholding agents specified in Section 154 must now deduct or collect tax at the rate of 1% at the time of the realization of foreign exchange proceeds, the sale or export of goods, payments to indirect exporters, or the clearing of goods. This 1% is in addition to the tax already collected or deducted under Section 154. Thus, withholding agents will collect a total of 2% tax on export proceeds: a 1% minimum tax under Section 154 and a 1% adjustable advance tax under sub-section (6C) of Section 147, the FBR added. Officials at the FBR said that this change aims to ensure that exporters contribute more fairly to the tax system and aligns their tax obligations with those of other taxpayers in the country. By bringing exporters into the normal tax regime, the FBR hopes to increase transparency and compliance in the export sector, ultimately boosting tax revenue. Exporters must now prepare for this additional tax obligation and ensure proper documentation and compliance to avoid any penalties or issues with the FBR. The new tax structure will require exporters to adjust their financial planning and accounting practices to accommodate the 2% tax collection by withholding agents. FBR official said that these changes signify the government’s efforts to strengthen the tax system and ensure that all sectors contribute appropriately to the national revenue. Exporters, being a crucial part of the economy, are now subject to more stringent tax regulations, which are expected to enhance tax collection and support the country’s economic growth.

Date: 2024-07-31

Details: Karachi, July 31, 2024 – The Federal Board of Revenue (FBR) has empowered commissioners of Inland Revenue (IR) to inquire about foreign assets held by residents, as part of its efforts to enhance tax compliance and transparency. This FBR is detailed in Circular No. 1 of 2024-25, explaining key income tax amendments introduced through the Finance Act, 2024. According to the FBR, the new provisions under sub-section (2) of Section 116 of the Income Tax Ordinance mandate every resident individual filing a return of income to submit a wealth statement and a wealth reconciliation statement for the relevant tax year along with their return. This requirement is aimed at ensuring comprehensive disclosure of both domestic and foreign assets and liabilities. Sub-section (1) of Section 116, through clauses (a) and (b), empowers the commissioner to issue a written notice to any individual, requiring them to furnish a wealth statement in the prescribed form, according to the FBR. This statement must include detailed particulars of the individual’s total assets and liabilities, as well as those of their spouse, minor children, and other dependents. The latest amendments now explicitly include foreign assets and liabilities within this reporting requirement. Additionally, an important clarification has been added: assets of the spouse are to be included in the wealth statement only if the spouse is financially dependent on the individual. This ensures that only relevant and accurate information is captured, preventing unnecessary reporting of independent spouses’ assets. The empowerment of commissioners to inquire about foreign assets reflects the FBR’s commitment to curbing tax evasion and ensuring that residents fully disclose their global financial holdings. This move is expected to bring more transparency to the financial affairs of Pakistani residents and improve the integrity of the tax system. By broadening the scope of the wealth statement to include foreign assets and liabilities, the FBR aims to capture a complete picture of a taxpayer’s financial status, making it harder for individuals to conceal assets abroad. This is particularly significant in light of global efforts to enhance financial transparency and combat tax evasion through international cooperation and information exchange agreements. The new regulations are part of a broader strategy to strengthen the tax framework in Pakistan, ensuring that all taxable assets are accurately reported and taxed accordingly. This will not only increase tax revenues but also promote fairness and equity in the tax system by ensuring that individuals with significant foreign holdings contribute their fair share.

Date: 2024-07-31

Details: Karachi, July 31, 2024 – The Federal Board of Revenue (FBR) has announced a significant exemption for individuals holding a National Identity Card for Overseas Pakistanis (NICOP) from penalties imposed for non-filing of income tax returns. The FBR clarified that the Finance Act of 2024 introduced new restrictions on individuals who fail to file their income tax returns despite being listed in the income tax general order. According to the FBR, when a person fails to file a return even after receiving a notice under sub-section (4) of Section 114 of the Income Tax Ordinance, 2001, the FBR has the authority to issue an income tax general order against them. Before the implementation of the Finance Act, 2024, those issued with an income tax general order faced penalties such as the disabling of their mobile phones or SIM cards and the discontinuation of their electricity or gas connections. However, the new act introduces an additional penalty: restrictions on foreign travel from Pakistan for those who remain non-compliant after receiving a notice to file their returns. In a move to provide relief to certain groups, the FBR has specified that this travel restriction will not apply to several categories of individuals. Exemptions include: • Citizens holding a NICOP • Minors • Students • Individuals traveling abroad for Hajj or Umrah • Other specific classes of persons as notified by the FBR The FBR’s decision to exempt NICOP holders acknowledges the unique circumstances of overseas Pakistanis, who may face challenges in complying with domestic tax filing requirements due to their international locations and commitments. By providing this exemption, the FBR aims to balance the enforcement of tax compliance with the practical realities faced by overseas citizens. The new policy underlines the FBR’s commitment to broadening the tax base and ensuring that all eligible taxpayers fulfill their obligations. However, it also demonstrates flexibility and consideration for the Pakistani diaspora, which plays a vital role in the country’s economy through remittances and investments. The exemption for overseas Pakistanis and other specified groups reflects an effort to make tax regulations more inclusive and practical. It aims to alleviate undue burdens on those who contribute to the economy from abroad while maintaining a robust framework for tax compliance within the country. Overall, the FBR’s updated regulations through the Finance Act, 2024, signify a balanced approach to enhancing tax compliance, providing necessary exemptions, and ensuring that penalties for non-compliance are fair and considerate of the diverse circumstances of all Pakistani citizens.

Date: 2024-07-31

Details: Karachi, July 31, 2024 – Pakistan has introduced stricter tax rules for non-residents with substantial business activities within the country. This initiative, driven by the Federal Board of Revenue (FBR), aims to capture a larger share of revenue from global entities benefiting from the Pakistani market. The FBR issued Circular No. 1 of 2024-25 to elaborate on the recent amendments to the Income Tax Ordinance, 2001. The most notable change pertains to Section 101, which specifies the geographical source of income. This revision is crucial in determining the tax liabilities of non-residents operating in Pakistan. Under the new rules, the FBR clarified that the income of a non-resident will be computed based on amounts sourced from Pakistan. Specifically, Section 101(3) now stipulates that business income of a non-resident is considered Pakistan-source if it is linked directly or indirectly to any business connection in the country. This includes any form of economic activity that generates revenue within Pakistan’s borders. To provide further clarity, new definitions have been added to Section 101 through sub-sections (3A) and (3B). These amendments define “business connection in Pakistan” to include significant economic presence. This term encompasses transactions involving goods, services, or property with any individual or entity in Pakistan. For instance, the provision of data or software downloads to users in Pakistan now falls under this category. If the total payments from such transactions in a tax year exceed a prescribed threshold, they are classified as significant economic presence, making the non-resident liable for taxes in Pakistan. Moreover, the new rules address the modern digital economy by including systematic and continuous business activities or digital interactions with users in Pakistan under the umbrella of significant economic presence. This means that even if a non-resident does not physically operate from Pakistan, their digital business operations can still be subject to Pakistani taxes. This includes: • Agreements for such transactions signed outside Pakistan; • Non-residents lacking a physical residence or place of business in Pakistan; and • Services rendered remotely by non-residents to Pakistani customers. These changes underscore Pakistan’s commitment to adapting its tax laws to the evolving global economic landscape. By targeting non-residents with significant economic activities in the country, the FBR aims to ensure that all entities benefiting from Pakistan’s market contribute their fair share to the national exchequer. This move is expected to generate additional revenue for the country and level the playing field for local businesses competing with international players.

Date: 2024-07-30

Details: Recorder Report Published about 5 hours ago LAHORE: Federal Tax Ombudsman (FTO) Dr Asif Mahmood Jah has observed that a total of 3451 lots are awaiting disposal in the Customs department while 555 lots are pending under litigation. While pointing out that pendency was spread out all over the Customs stations countrywide, he has held that an alarming pendency in disposal of confiscated goods was leading to clogging and congestion at the port areas as well as at Customs State warehouses. He passed these remarks regarding large quantities of goods (like currency, gold, silver, precious stones, antiques, arms & ammunition, fire crackers narcotics, cigarettes, liquor, banned drugs, acetic anhydride, medicines, chemicals, obscene films and literature and other goods which are health/environmental or social hazards or unfit for human consumption and are lying country wide in various Customs State Warehouses. According to him, non-application of the Customs laws, procedures and CGOs is causing unnecessary delay in disposal of confiscated goods tantamount to maladministration. He has instructed the Federal Board of Revenue (FBR) to direct the Member Customs (Ops) and Director General l&l Customs, FBR to issue immediate directions to the Collectors/Directors concerned to completely eliminate this huge pendency and dispose of or destroy such goods ripe for disposal/destruction. It may be noted that Para/Sr Nos 34, 36 and 36A of CGO 12/2002 dated 15.06.2002 clearly provides a precise, established and comprehensive mechanism for disposal of seized/confiscated goods, narcotic and other items seized/confiscated by the Customs department and other agencies. He lamented that the Customs authorities on one hand are not disposing these goods under the relevant provisions of laws and rules thus leading to their pilferage and replacement. Moreover, the Customs authorities are not disposing of these goods as required under the law, due to neglect, inattention and inefficiency, contrary to law and falls within the ambit of maladministration as defined under Section 2(3) of the FTO Ordinance, 2000. Copyright Business Recorder, 2024

Date: 2024-07-30

Details: July 30, 2024 Karachi, July 30, 2024 – In a bid to ensure timely compliance with income tax filing requirements, the Federal Board of Revenue (FBR) has announced the imposition of higher withholding tax rates on late filers and non-filers. This significant change has been enacted through amendments in the Finance Act, 2024. The FBR released Circular No. 1 of 2024-25 of Income Tax, which elaborates on crucial amendments made to the Income Tax Ordinance, 2001. The Finance Act, 2024 has expanded the scope of Section 100BA and the Tenth Schedule of the Ordinance to include additional categories of taxpayers subject to higher withholding taxes. Prior to these amendments, Section 100BA of the Income Tax Ordinance, 2001, outlined higher withholding tax rates for individuals not listed in the Active Taxpayers List (ATL). However, the recent changes have broadened this provision to target those who, despite appearing in the ATL, have failed to file their income tax returns by the specified deadlines. Specifically, the amendment to Section 100BA and the introduction of Rule 1A in the Tenth Schedule now categorize taxpayers into two distinct groups for the application of higher withholding tax rates. The first group comprises individuals not appearing in the ATL at the time of a transaction. The second group includes those who are listed in the ATL but have not filed their returns within the due date specified in Section 118 of the Income Tax Ordinance, 2001, or within any extensions granted under Sections 119 or 214A. The FBR’s decision to implement these changes aims to promote punctual tax filing and broaden the tax base by penalizing late filers. The move is expected to enhance revenue collection and encourage more taxpayers to comply with deadlines, thereby contributing to the overall economic stability of the country. Tax experts have noted that this measure underscores the FBR’s commitment to enforcing tax compliance. “By imposing higher withholding taxes on late filers and non-filers, the FBR is sending a strong message about the importance of timely tax compliance,” said one industry analyst. “This will likely lead to an increase in the number of individuals who adhere to filing deadlines.” In summary, the FBR’s recent amendments to the Income Tax Ordinance, 2001, as enacted through the Finance Act, 2024, signify a robust effort to enforce tax compliance. By targeting late filers and non-filers with higher withholding tax rates, the FBR aims to streamline the tax filing process, increase revenue, and support Pakistan’s fiscal health.

Date: 2024-07-30

Details: July 30, 2024 Karachi, July 30, 2024 – The Federal Board of Revenue (FBR) has introduced significant changes to the tax exemption policies for Associations of Persons (AOPs) through amendments in the Finance Act, 2024. The new regulations, outlined in Circular No. 1 of 2024-25, amend the Income Tax Ordinance, 2001, marking a shift in the tax landscape for AOPs. Previously, the FBR said AOPs enjoyed a tax exemption on the share of a member’s income provided that the AOP itself had paid tax on its total income. However, the Finance Act, 2024, has introduced a crucial amendment to this policy. Specifically, a new proviso has been added to sub-section (1) of Section 92 of the Income Tax Ordinance, 2001, which stipulates that the tax exemption on the share of an AOP member will no longer apply if certain conditions are not met, the FBR added. According to the latest amendment, AOPs with a turnover of Rs 300 million or more will now be required to meet additional compliance requirements to qualify for tax exemption. The key condition is that such AOPs must submit their financial statements, which need to be audited by a firm of Chartered Accountants or Cost and Management Accountants. These firms must be recognized under the Chartered Accountants Ordinance, 1961, or the Cost and Management Accountants Act, 1966, respectively, according to the FBR. The FBR’s move aims to enhance transparency and accountability within AOPs, particularly those with substantial turnovers. By mandating audits from reputable accounting firms, the FBR seeks to ensure that AOPs maintain accurate and reliable financial records, thereby reducing opportunities for tax evasion and enhancing the overall integrity of the tax system. The introduction of this amendment is expected to impact a significant number of AOPs operating in various sectors. These organizations will need to reassess their financial reporting practices and engage with certified auditors to comply with the new regulations. This change aligns with the broader objectives of tax reform and enforcement under the current fiscal policies. Tax experts and stakeholders are anticipated to scrutinize these amendments closely, as they represent a notable shift in tax exemption policies for AOPs. The FBR’s efforts to tighten regulatory requirements reflect its ongoing commitment to improving tax compliance and governance in the country. For more detailed information and guidance on how these changes may affect specific AOPs, stakeholders are encouraged to consult the full text of Circular No. 1 of 2024-25 and engage with tax professionals.

Date: 2024-07-30

Details: July 30, 2024 Karachi, July 30, 2024 – The Federal Board of Revenue (FBR) has announced a significant update in the taxation process for acquiring shares, following the amendments introduced through the Finance Act, 2024. Previously, individuals acquiring shares of a company were required to deduct tax at a rate of 10% based on the fair market value of the shares from the gross amount paid. This process was focused on ensuring that tax obligations were met only after the payment was made for the shares. Under the new regulations, the tax deduction process has been revised to streamline compliance and enhance efficiency. As per the updated rules, the person acquiring the shares must now deduct tax from the gross amount paid or payable at the time of payment or at the time of registration of shares, whichever occurs earlier. This means that the 10% tax on the fair market value of the shares must be deposited by the acquirer even if the payment for the shares has not yet been made, as long as the shares are registered in the acquirer’s name. The adjustment aims to address delays in tax collection that have historically been associated with share transactions. By mandating the tax deduction and deposit at the earlier of payment or registration, the FBR seeks to ensure more timely and accurate tax collection. This proactive approach is designed to mitigate potential compliance issues and expedite the revenue collection process. The new provision is expected to impact the timing of tax deductions and may necessitate changes in financial planning for both buyers and sellers of shares. It underscores the FBR’s commitment to tightening regulatory oversight and ensuring that tax obligations are fulfilled in a timely manner. For companies and investors, this change emphasizes the importance of adhering to updated tax regulations and adjusting transaction processes accordingly. These amendments are part of broader efforts to reform the tax system and improve overall revenue collection. The FBR’s updated guidelines reflect a strategic move to reinforce compliance and streamline tax processes in the financial transactions of companies and investors.

Date: 2024-07-30

Details: Karachi, July 30, 2024 – The Federal Board of Revenue (FBR) has issued comprehensive tax guidelines for builders and developers in light of the amendments introduced through the Finance Act, 2024, to the Income Tax Ordinance, 2001. These guidelines aim to streamline the taxation process and provide clarity on the tax obligations for builders and developers in Pakistan. The FBR issued Circular No. 01 of 2024-25 of Income Tax, which explains the significant amendments made to the Income Tax Ordinance, 2001, through the Finance Act, 2024. One of the key changes is the introduction of Section 7F, specifically addressing the taxation of builders and developers. Key Provisions of Section 7F Taxable Profit Rates: • Construction and Sales of Buildings: The taxable profit is set at 10% of the gross receipts from activities involving the construction and sale of residential, commercial, or other buildings. • Development and Sales of Plots: The taxable profit is set at 15% of the gross receipts from activities involving the development and sale of residential, commercial, or other plots. • Combined Activities: For activities involving both construction and sales of buildings and development and sales of plots, the taxable profit is set at 12% of the gross receipts. The tax shall be imposed on the taxable profit at the rates specified in Division I or Division II, as applicable, for such persons. Scope of Section 7F The FBR clarified that the provisions of Section 7F apply exclusively to activities related to the construction and sale of residential, commercial, or other buildings and the development and sale of residential, commercial, or other plots. Income from any other sources or heads is excluded from the purview of this section. Builders and developers, when explaining the nature and source of any credited amount, investment, money, or valuable articles owned, or funds from which expenditures were made, shall be allowed to take credit up to the amount of taxable profit under this section. Credit for amounts exceeding the taxable profit can only be taken if the taxable income under Section 9 of the Income Tax Ordinance, 2001, exceeds the taxable profit, and tax has been paid on such taxable income at the specified rates in Division I or II of Part I of the First Schedule of the Income Tax Ordinance, 2001. Entities established by an Act of Parliament, a Provincial Assembly, or a Presidential Order for the benefit of their employees or specific housing projects are excluded from the purview of Section 7F. Advance Tax Liability According to sub-section (1) of Section 147 of the Income Tax Ordinance, 2001, individuals deriving income subject to tax under sections 5, 6, and 7, salary income subject to tax deduction at source, and income subject to final tax are not required to pay advance tax. However, Section 7F is not included in the exclusion from payment of advance tax in sub-section (1) of Section 147. Therefore, builders and developers falling under Section 7F must fulfill their advance tax liability on taxable profit for a tax year in four quarterly advance tax installments. Given that the advance tax liability for the tax year 2025 is expected to be higher than the liability computed under sub-section (4), builders and developers must estimate their advance tax liability as per the provisions of sub-section (4) of Section 147. The advance tax for a quarter will be computed by applying the rates specified in Division I or II of Part I of the First Schedule to quarterly taxable profit, calculated as a percentage of gross receipts: 10% for construction and sales activities, 15% for development and sales activities, and 12% for combined activities. The due dates for payment of quarterly advance tax for individuals and AOPs/companies will remain the same as specified in sub-sections (5) and (5A) of Section 147 of the Income Tax Ordinance, 2001. Furthermore, the provisions of sub-sections (7) to (10) of Section 147 will apply mutatis mutandis to quarterly advance tax payable under this section. Submission of Computation Statement Builders and developers are required to submit a statement of computation on each due date for the quarters, specifying the computation of advance tax based on taxable profit for each quarter, the gross amount of receipts either in cash or deposited in the bank, and details of business bank accounts. This statement must be duly certified by a Chartered Accountant or a Cost and Management Accountant. These guidelines and the detailed explanation provided by the FBR are expected to facilitate compliance and ensure a more structured tax payment process for builders and developers, ultimately contributing to the broader goal of increased transparency and efficiency in the tax system.

Date: 2024-07-29

Details: ISLAMABAD: A company being assessed at Large Taxpayer Office (LTO) Lahore has informed the Federal Investigation Agency (FIA) that relevant tax officials have never demanded any gratification from the company for issuance of its two income tax refunds amounting to Rs 233 million. The said company falling under the jurisdiction of Large Taxpayer Office (LTO) Lahore has shared its experience to the FIA regarding allegation of corruption in issuance of refund being investigated and has clarified that no gratification whatsoever was either demanded or paid when in April 2024 two refund of over Rs 130 and Rs 103 million was sanctioned by Commissioner LTU, Lahore and later when amount of Rs.103 million was credited in its bank account by the FBR. In this regard, the company has addressed a letter to the Deputy Director, Anti Money Laundering Cell, FIA, Lahore. According to the letter of the company, it has been widely reported in the national press and the social media that FIA has summoned the Member Operations, FBR to joint inquiry into allegations of corruption, kickbacks, bribery, and illegal approval of tax refunds by Large Taxpayer Office Lahore in the last five years. Since our company has been issued refund of Rs.103 million therefore it has been considered imperative that its experience is shared with the investigating agency to arrive at just conclusion. The relevant law and procedure of issuance of refund are that taxpayer electronically files refund application. The concerned assessing officer is required to pass an order within 60 days of filing of application to accept, curtail or reject the refund claim. The refund order under section 170(4) is issued by the assessing officer after getting approval in writing by the concerned Commissioner. Then refund order is forwarded to the FBR and FBR electronically transfer refund amount in the given bank account of the taxpayer. Whereas the company refund application for Tax Year 2022 was not processed by the assessing officer within the prescribed time and when many fallow up visits and reminders failed the company had to file a writ petition No.21973/2023 before Lahore High Court and court vide its order dated 03.04.2023 directed the FBR to decide the application within 30 days. However, FBR also did nothing and the company had to file a contempt of court application No.Crl.Org. 1916-W of 2024 and the honourable court issued notice to the Chairman FBR to explain his position. Only then FBR moved and treated the writ as a representation under section 7 of the FBR Act and the Chairman held a hearing on 18.01.2024. After hearing a letter dated 06.02.2024 was issued by the FBR to the Chief Commissioner, LTO Lahore directing the concerned Commissioner to pass the refund order within 30 days. Only thereafter refund other under section 170(4) sanctioning refund of Rs.130 million was passed on 08.04.2024. Whereas under similar facts and circumstances refund order for Tax Year 2021 was passed on 29.04.2024 sanctioning refund of Rs.103 million. In both years refund claims were arbitrarily curtailed on the pretext of pending claim of tax credit under section 65D though there is none. The refund of Rs.103 million sanctioned later on 29.04.2024 has been credited by the FBR in the bank account of the company on 08.07.2024 whereas refund of Rs.130 sanctioned earlier on 08.04.2024 has not been credited by the FBR though FBR is burdening itself with compensation for delayed refund in this Tax Year. The refund claims of other tax Years are pending with the assessing officer and after surfacing of under inquiry speed money scandal in May 2024 refund processing has been halted altogether to the disadvantage of the taxpayers. The company further said that it is hereby affirmed that neither any gratification was demanded at any stage nor was offered/paid but getting income tax refund is almost a mission impossible in very genuine refund claims of leading taxpayers being assessed in Large Taxpayers Office across the country and not merely at Lahore. Withholding refund to achieve budgetary targets is mindset from top to bottom. For a meaningful result of the investigation in addition to details of issued refunds the details of pending refund claims at LTO be called for to ascertain the factual position, it added.

Date: 2024-07-29

Details: Karachi, July 29, 2024 – The Federal Board of Revenue (FBR) has announced July 31, 2024, as the deadline for shopkeepers and retailers to make the first monthly payment of advance tax under the Tajir Dost Scheme. This simplified tax initiative aims to ease the tax burden on small retailers and shopkeepers by allowing them to pay their income tax liabilities in monthly installments. The Tajir Dost Scheme was launched for the tax year 2024, with the first payment due on July 31, 2024. Following this, retailers and shopkeepers are required to pay monthly advance tax by the 15th of each month. The scheme, introduced through SRO 457(I)/2024 on March 30, 2024, was implemented on July 22, 2024, via SRO 1064(I)/2024, which modified the Tajir Dost Special Procedure. The FBR has identified 42 major cities where this scheme will be applicable, setting tax rates based on the estimated income from different localities. The latest notification introduces significant changes to ensure that only eligible shopkeepers and retailers benefit from the new tax rates. For instance, retailers or shopkeepers who filed their income tax return for the tax year 2023 before March 30, 2024, and whose advance tax liability under section 147 exceeds the computed advance tax under this special procedure for the tax year 2025 and onwards, are not eligible for the scheme, according to the FBR. Additionally, the scheme excludes shopkeepers with a shop size of 100 square feet or less in a residential area or those whose income is exempt under any provision of the Income Tax Ordinance. The advance tax payable on indicative income will be calculated at the rates provided in Division I of Part I of the First Schedule to the Income Tax Ordinance, 2001, for the relevant tax year, as specified in Schedule – II. A reduction of 25% in advance tax is applicable if the installments for the succeeding months are paid in a lump sum or if a non-filer for the tax year 2023 files a return and pays tax on their income equal to or more than the tax on indicative income computed in Schedule – II of this procedure, the FBR said. For small shop owners, the FBR has specified that any person owning a shop of 50 square feet or less in a commercial area, or a makeshift shop, kiosk, or small shop measuring not more than 5×3 square feet, will be liable for a fixed advance tax of PKR 1,200 per annum. However, this provision does not apply to commercial areas listed in Schedule – III, where advance tax will be paid as specified in Schedule – II. This initiative is part of the FBR’s broader efforts to streamline tax collection and improve compliance among small retailers and shopkeepers. The FBR hopes that by simplifying the tax payment process and offering installment options, more businesses will be encouraged to comply with their tax obligations, ultimately increasing the overall tax revenue. With the deadline approaching, shopkeepers and retailers are urged to ensure timely payment of their advance tax to avoid any penalties and to take full advantage of the Tajir Dost Scheme.

Date: 2024-07-29

Details: Karachi, July 29, 2024 – Mehmood ul Hasan Awan, General Secretary of the Karachi Customs Agents Association (KCAA), announced that for the first time in KCAA’s history, a virtual meeting was held on July 27, 2024, between the Karachi Customs Agents Association and the Chattogram Customs Agents Association. Representatives from the Chattogram Customs Agents Association attended the meeting, including Quazi Mahmud Imam (Bilu), General Secretary; Md. Altaf Hossain Chowdhury (Bachchu), 1st Vice President; and Mohammad Saifuddin, Finance Secretary. During the meeting, the Chattogram Customs Agents Association shared their rules and regulations, highlighting international best practices adopted in their processes. They noted that upfront payment of customs duties and taxes is not required at the time of filing Goods Declarations. Approximately 80% of customs clearance is conducted through Green and Yellow channels, with only 20% of consignments requiring inspection. The Chattogram representatives also emphasized that shipping companies and freight forwarders provide better services due to existing shipping laws and regulations. They mentioned that the Customs Act had been updated in 2023, replacing the 1969 version. Both associations agreed on several points for joint cooperation to streamline processes and rectify malpractices in the industry: 1. Regional Cooperative Body: The KCAA proposed the creation of a regional cooperative body, similar to SAARC, for mutual development. It was also decided that other SAARC members would be consulted. 2. Communication: Both associations mutually agreed to form a WhatsApp group to share recent developments and facilitate better communication. Mehmood ul Hasan Awan congratulated the Chattogram Customs Agents Association on their 50th Anniversary. The CCAA invited the KCAA delegation to celebrate this milestone in October 2024. Both associations assured that they would work together to facilitate trade between Pakistan and Bangladesh in the future. This historic meeting marks a significant step towards enhancing cooperation and improving customs clearance processes between Karachi and Chattogram. By sharing best practices and updating regulations, both associations aim to boost efficiency and reduce bureaucratic hurdles in customs operations. The formation of a regional cooperative body and the establishment of a communication channel through WhatsApp are expected to foster closer ties and enhance the sharing of knowledge and experiences. This collaboration promises to streamline customs procedures and bolster trade relations, benefiting the economies of both countries. The virtual meeting between the Karachi Customs Agents Association and the Chattogram Customs Agents Association has laid the groundwork for future cooperation, aiming to improve customs clearance processes and facilitate trade. The collaborative efforts and shared vision of both associations are poised to bring about positive changes in the customs industry.

Date: 2024-07-29

Details: Karachi, July 29, 2024 – Mehmood ul Hasan Awan, General Secretary of the Karachi Customs Agents Association (KCAA), announced that for the first time in KCAA’s history, a virtual meeting was held on July 27, 2024, between the Karachi Customs Agents Association and the Chattogram Customs Agents Association. Representatives from the Chattogram Customs Agents Association attended the meeting, including Quazi Mahmud Imam (Bilu), General Secretary; Md. Altaf Hossain Chowdhury (Bachchu), 1st Vice President; and Mohammad Saifuddin, Finance Secretary. During the meeting, the Chattogram Customs Agents Association shared their rules and regulations, highlighting international best practices adopted in their processes. They noted that upfront payment of customs duties and taxes is not required at the time of filing Goods Declarations. Approximately 80% of customs clearance is conducted through Green and Yellow channels, with only 20% of consignments requiring inspection. The Chattogram representatives also emphasized that shipping companies and freight forwarders provide better services due to existing shipping laws and regulations. They mentioned that the Customs Act had been updated in 2023, replacing the 1969 version. Both associations agreed on several points for joint cooperation to streamline processes and rectify malpractices in the industry: 1. Regional Cooperative Body: The KCAA proposed the creation of a regional cooperative body, similar to SAARC, for mutual development. It was also decided that other SAARC members would be consulted. 2. Communication: Both associations mutually agreed to form a WhatsApp group to share recent developments and facilitate better communication. Mehmood ul Hasan Awan congratulated the Chattogram Customs Agents Association on their 50th Anniversary. The CCAA invited the KCAA delegation to celebrate this milestone in October 2024. Both associations assured that they would work together to facilitate trade between Pakistan and Bangladesh in the future. This historic meeting marks a significant step towards enhancing cooperation and improving customs clearance processes between Karachi and Chattogram. By sharing best practices and updating regulations, both associations aim to boost efficiency and reduce bureaucratic hurdles in customs operations. The formation of a regional cooperative body and the establishment of a communication channel through WhatsApp are expected to foster closer ties and enhance the sharing of knowledge and experiences. This collaboration promises to streamline customs procedures and bolster trade relations, benefiting the economies of both countries. The virtual meeting between the Karachi Customs Agents Association and the Chattogram Customs Agents Association has laid the groundwork for future cooperation, aiming to improve customs clearance processes and facilitate trade. The collaborative efforts and shared vision of both associations are poised to bring about positive changes in the customs industry.

Date: 2024-07-28

Details: Islamabad, July 28, 2024 – Business individuals are required to file their annual returns for the tax year 2024 based on the tax rates updated until June 30, 2024, as released by the Federal Board of Revenue (FBR). The FBR, through amendments in the Finance Act, 2024, revised the income slabs for business individuals and Association of Persons (AOPs), effective from July 1, 2024. There has been some confusion among taxpayers falling under the category of business income regarding the correct entries for their annual returns by September 30, 2024. However, it is important to note that the return filing for the tax year 2024 will use the income slabs updated up to June 30, 2024. Income Tax Rates for Return Filing 2024: 1. Where taxable income does not exceed Rs. 600,000: 0% o Taxpayers in this bracket are exempt from paying any income tax. 2. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 800,000: o Tax rate: 7.5% of the amount exceeding Rs. 600,000. 3. Where taxable income exceeds Rs. 800,000 but does not exceed Rs. 1,200,000: o Tax rate: Rs. 15,000 + 15% of the amount exceeding Rs. 800,000. 4. Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,400,000: o Tax rate: Rs. 75,000 + 20% of the amount exceeding Rs. 1,200,000. 5. Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,000,000: o Tax rate: Rs. 315,000 + 25% of the amount exceeding Rs. 2,400,000. 6. Where taxable income exceeds Rs. 3,000,000 but does not exceed Rs. 4,000,000: o Tax rate: Rs. 465,000 + 30% of the amount exceeding Rs. 3,000,000. 7. Where taxable income exceeds Rs. 4,000,000: o Tax rate: Rs. 765,000 + 35% of the amount exceeding Rs. 4,000,000. The updated tax rates aim to bring more clarity and fairness to the taxation process for business individuals and AOPs. The revision in the income slabs is part of the government’s broader tax reform agenda aimed at improving tax compliance and increasing revenue collection. Finance Minister Muhammad Aurangzeb emphasized the importance of including the untaxed and under-taxed segments of the economy in the tax net. He highlighted that achieving certainty and ease of tax collection is essential for economic stability. The government’s efforts to reform the Federal Board of Revenue (FBR) are expected to play a significant role in enhancing revenue collection and facilitating taxpayers. Aurangzeb also assured that the government is committed to placing less financial burden on the lower-income class while facilitating the business community. The refund of claims worth 68 billion rupees so far demonstrates the government’s dedication to supporting businesses. Taxpayers are encouraged to carefully review the updated tax rates and ensure accurate entries in their annual returns to avoid any discrepancies. The FBR’s amendments and the government’s continued efforts to simplify the tax processes aim to create a more transparent and efficient tax system for all. As the tax filing deadline approaches, business individuals and AOPs must stay informed about the updated tax rates and ensure timely and accurate filing of their returns for the tax year 2024.

Date: 2024-07-28

Details: Karachi, July 27, 2024 – The Federal Board of Revenue (FBR) has announced the new income tax rates on electricity consumption for the fiscal year 2024-25. The updated rates are part of the amendments made to the Income Tax Ordinance, 2001 through the Finance Act, 2024. These changes are aimed at enhancing the collection of withholding income tax under the specified rates in Division IV of Part-IV of the First Schedule of the Income Tax Ordinance, 2001. Electricity Consumption Rates for Commercial and Industrial Consumers The FBR has specified the rate of tax collection from commercial and industrial consumers based on the gross amount of their electricity bills. The following table outlines the applicable rates: S. No Gross Amount of Bill Tax 1 Up to Rs. 500 Rs. 0 2 Exceeds Rs. 500 but does not exceed Rs. 20,000 10% of the amount 3 Exceeds Rs. 20,000 Rs. 1950 plus 12% of the amount exceeding Rs. 20,000 for commercial consumers Rs. 1950 plus 5% of the amount exceeding Rs. 20,000 for industrial consumers Electricity Consumption Rates for Domestic Consumers For domestic electricity consumption, the rates are as follows: • Zero percent if the amount of the monthly bill is less than Rs. 25,000. • 7.5% if the amount of the monthly bill is Rs. 25,000 or more. Detailed Explanation under Section 235 of the Income Tax Ordinance, 2001 The withholding tax on electricity consumption is comprehensively detailed under Section 235 of the Income Tax Ordinance, 2001. The key points are summarized below: 1. Advance Tax Collection: o Advance tax shall be collected at the rates specified in Division IV of Part-IV of the First Schedule on the amount of the electricity bill for commercial, industrial, or domestic consumers. o Domestic consumers whose names appear on the Active Taxpayers’ List are exempt from this provision. 2. Billing and Tax Collection: o The entity preparing the electricity bill shall charge the advance tax as part of the overall electricity consumption charges, inclusive of sales tax and all incidental charges. 3. Exemptions: o Advance tax shall not be collected from individuals who provide a certificate from the Commissioner indicating their income is exempt from tax, have discharged advance tax liability under section 147, or whose entire income is subject to final tax or minimum tax regimes under other provisions of the Ordinance. 4. Adjustments and Minimum Tax: o For non-corporate taxpayers, tax collected up to an annual bill amount of Rs. 360,000 shall be treated as the minimum tax on their income, with no refunds allowed. o Tax collected on monthly bills exceeding Rs. 30,000 for non-corporate taxpayers shall be adjustable. o For companies, all collected tax shall be adjustable against their tax liability. These new tax rates are designed to streamline tax collection and ensure compliance across different consumer categories. The FBR’s updated income tax rates on electricity consumption reflect a comprehensive approach to broadening the tax base and enhancing revenue collection. This move is expected to have significant implications for all electricity consumers, especially those in the commercial and industrial sectors, as they will need to account for these additional costs in their financial planning for the year. For further details, consumers are encouraged to review the full text of the Finance Act, 2024 and the updated provisions of the Income Tax Ordinance, 2001.

Date: 2024-07-27

Details: A comparison... Sohail Sarfraz Published about 2 hours ago ISLAMABAD: The incidence of tax on the salaried class in Pakistan is three times higher than in India. A comparison of tax structure of salaried class between Pakistan and India has been issued by the Pakistan Business Council (PBC). The comparative chart (Pakistan-India) revealed that annual tax in Pakistan is Rs 30,000 as compared to Indian Rs (INR) 10,050 in cases where annual salary in Pakistan is Rs 1,200,000 against Indian annual salary of Rs 360,360. The tax in Pakistan is Rs 120,000 on annual income of Rs 1,800,000 as compared to Indian tax in PKR 40,050 on annual salary in INR 540,541. Fear comes alive: all salaried persons earning over Rs50k a month to bear higher taxation in FY25 In Pakistan, tax is Rs 230,000 on an annual salary of Rs 2,400,000. The Indian tax in Pak rupee comes to Rs 73,500 on annual income of INR 720,721. The annual tax in Pakistan is Rs 380,000 on an annual income of Rs 3,000,000 as compared to Indian tax in Pak rupee 133,500 on annual salary in INR 900,901. The tax on annual salary of Rs 3,600,000 in Pakistan comes to Rs 550,000 as compared to Indian tax in Pak rupee 207,000 on annual salary in INR 550,000. In Pakistan, tax is Rs 945,000 on annual salary of Rs 4,800,000. The Indian tax in Pak rupee comes to Rs 427,200 on an annual income of INR 945,000. The annual tax in Pakistan is Rs1,365,000 on an annual salary of Rs 6,000,000 as compared to Indian tax in Pak rupee 767,700 on annual salary in INR 1,365,000. The tax in Pakistan is Rs 1,785,000 on annual salary of Rs 7,200,000 as compared to Indian tax in Pak rupee 1,127,700 on annual salary in INR 2,162,162. The annual salary in Pakistan is Rs 8,400,000 on which tax has been calculated at Rs 2,205,000. In India, Indian tax in Pak rupee 1,487,700 would be paid on an annual salary of INR 2,522,523. The tax on annual salary of Rs 9,600,000 in Pakistan comes to Rs 2,625,000 as compared to Indian tax in Pak rupee 1,847,700 on annual salary in INR 2,882,883. The annual salary in Pakistan is Rs 10,800,000 on which tax has been calculated at Rs 3,349,500. In India, Indian tax in Pak rupee 2,207,700 would be paid on an annual salary of INR 3,243,243. Copyright Business Recorder, 2024

Date: 2024-07-27

Details: Recorder Report Published about 2 hours ago ISLAMABAD: The increase in income tax rates for salaried class will incentivize non-compliance and undermine the government’s ability to raise its revenue and broaden its tax collection base. According to the newest edition of PRIME Plus, the quarterly economic review by the Policy Research Institute of Market Economy, no serious attempt has been made to eliminate the persistent fiscal deficit by curbing unnecessary expenditures, and this is most reflected in the expansion of the public sector development fund. The higher tax incidence on private salaried individuals and businesses will curb disposable income and diminish economic activity further. According to the report, monetary expansion was higher than real growth, causing inflation. At the same time, the announcement of salary increases for the public sector contrasts with policy goals of managing inflation and will result in the unequal distribution of inflationary pressures amongst the population. Furthermore, private sector borrowing has been declining due to the high cost of borrowing, and manufacturing sector output continues to be subdued amidst higher utility and input prices. The report also notes that supply-side bottlenecks remained unaddressed, especially those related to the Ease of Business in the country. Concessionary measures to industry are largely in the form of import substitution frameworks and will prove ineffective in the development of internationally competitive businesses. The report points out that Pakistan remains an unattractive destination for foreign investors and despite improvements in the current account balance, external financial pressures are continuing to mount. Copyright Business Recorder, 2024 TAXPAYERS FACE PROBLEMS AT E-SAHULAT CENTRES Muhammad Ali Published about 2 hours ago KARACHI: The Sales tax registered taxpayers are encountering difficulties in obtaining biometric verification from NADRA e-Sahulat centres, as required under SRO 350(I)/2024. According to SRO 350(I)/2024, issued on March 7, 2024, individuals, Association of Persons (AOPs), and single-member companies registered for sales tax must undergo annual biometric re-verification every July. However, taxpayers were informed by NADRA e-Sahulat centres that they were unable to process their requests due to integration issues with the FBR system, the complainants said. They said that the common error message “CNIC does not exist” has left many taxpayers concerned about meeting the July 31, 2024 deadline. Failure to complete the verification process could result in inability to file monthly sales tax returns without obtaining permission from their respective jurisdiction’s Commissioner, they added. While the business community generally supports the measure as a means to combat fake invoices and improve compliance, they highlighted several issues with the implementation. FBR has addressed some concerns but further modifications are needed, they said and urged the board to resolve these technical issues promptly to ensure smooth compliance with the new regulations and avoid potential disruptions in tax filing processes. Copyright Business Recorder, 2024

Date: 2024-07-27

Details: July 27, 2024 Karachi, July 27, 2024 – The Federal Board of Revenue (FBR) has implemented new, streamlined methods for taxpayers to verify their active status, which is essential for availing tax benefits. Individuals and businesses can now easily confirm their eligibility through several accessible channels. Online Verification: The most convenient method for verifying active taxpayer status is through the Active Taxpayers List (ATL) available on the FBR’s official website. This online portal offers a direct and efficient way to check one’s status, ensuring that taxpayers can quickly ascertain their eligibility. SMS Verification: For those who prefer a faster alternative, the FBR has introduced SMS-based verification. This method allows taxpayers to verify their status with a simple text message: • Individuals: Type “ATL (space) 13-digit CNIC” and send to 9966. • Associations of Persons (AOPs) and Companies: Type “ATL (space) 7-digit NTN” and send to 9966. • Individuals in Azad Jammu and Kashmir (AJK): Type “AJKATL (space) CNIC (without dashes)” and send to 9966. • AOPs and Companies in AJK: Type “AJKATL (space) 11-digit NTN (without dashes)” and send to 9966. Downloading the ATL: Taxpayers can also download the ATL directly from the FBR’s website. It’s important to note that, following amendments to the Income Tax Ordinance 2001 through the Finance Act 2018, the Active Taxpayers List of AJK is now considered equivalent to the ATL (Income Tax). This update simplifies the process for AJK taxpayers, ensuring their compliance status is recognized seamlessly. These multiple verification options underscore the FBR’s commitment to enhancing taxpayer convenience and transparency within the tax administration process. By offering various methods, the FBR aims to accommodate different preferences and ensure that all taxpayers have easy access to their status information. The introduction of these streamlined verification methods is part of the FBR’s broader effort to improve the efficiency of tax administration and compliance. By making it easier for taxpayers to verify their status, the FBR hopes to encourage greater participation in the tax system and ensure that more individuals and businesses can benefit from tax incentives. The FBR continues to monitor and update its systems to provide better services to taxpayers. These efforts are aimed at fostering a more transparent and user-friendly tax environment in Pakistan.

Date: 2024-07-26

Details: The salaried class in Pakistan is paying up to 9.4 times more tax than in neighboring India, revealed Pakistan Business Council (PBC), the country’s largest private sector advocacy platform on Thursday. “For two countries with almost the same cost of living, income tax on salaried employees in Pakistan is up to 9.4 times that in India,” said the PBC in a post on social media platform X, while sharing data of income tax slabs in the two countries. The development comes after the Pakistani government, running short of liquidity, imposed further taxes on the salaried class in the Budget 2024-25 presented on June 12. In the Finance Bill 2024, the government has increased tax liability for all income groups that earn more than Rs50,000. Islamabad says it wants to generate an additional Rs70 billion in taxes from this group. While the government did not touch the income tax exemption threshold – which still stood at Rs50,000 – liability increased across all other levels of salaries. For example, a person earning Rs100,000 a month will now pay Rs2,500 a month, up from the earlier level of Rs1,250 – showing 100% increase. It also imposed a 10% surcharge on those whose total incomes go beyond Rs10 million during a fiscal year, on top of the higher rate of taxes. On the other hand, the Indian government, in its bid to boost consumption, cut income tax rates for some citizens in its budget announcement this Tuesday. The government revised a system introduced under which annual income between 0.3 million Indian rupees and 0.7 million Indian rupees will now attract a 5% tax rate as compared to income between 0.3 million Indian rupees and 0.6 million Indian rupees earlier. The PBC, which has previously voiced against the Pakistani government latest budgetary measures, compared the taxable deductions between Pakistan and India in its post-Thursday. The PBC data showed that salaried persons earning up to Rs1.2 million a year will be liable to pay Rs30,000 in taxes in Pakistan, as compared to Rs3,018 in India, i.e. a difference of Rs26,982 or 8.9 times. Similarly, salaried persons earning Rs1.8 million a year will pay Rs120,000 in taxes in Pakistan, as compared to only Rs12,027 in India, showing a 9 times increase. Meanwhile, salaried persons earning Rs2.4 million a year will pay Rs230,000 in tax liability in Pakistan, in comparison to only Rs22,072 in taxes in India, showing a difference of Rs207,928 or 9.4 times between the two countries, revealed the data. The PBC argued that taxed employees in Pakistan certainly do not get better value for their contribution. “Our tax system is far from equitable,” it said. The salaried class in Pakistan has already been protesting against the increase in taxation on the salaried group. Finance Minister Muhammad Aurangzeb has said that relief would be provided to the salaried group, but when it was ‘possible’. With the staff-level agreement for a three-year programme now reached, many believe any relief is still some time away.

Date: 2024-07-26

Details: July 26, 2024 Karachi, July 26, 2024 – The Sindh government has announced a significant exemption of sales tax on services rendered by construction companies, subject to specific conditions, in a move aimed at stimulating the construction sector and facilitating growth. According to the Sindh Revenue Board (SRB), the standard rate of sales tax on construction services is 15% for tax year 2024-25. However, the provincial government has introduced reduced rates and exemptions to benefit the sector under certain conditions. The Sindh government has granted exemptions on sales tax for construction services in the following cases: 1. Small-scale Construction Work: Construction work undertaken by individuals or entities whose annual turnover does not exceed 4 million rupees in a financial year is exempt from sales tax. 2. Special Zones and Diplomatic Buildings: Construction and development work related to Export Processing Zones (EPZ), Special Economic Zones (SEZ), and diplomatic and consular buildings are exempt from sales tax. 3. Private Residential Houses: The construction of independent private residential houses, other than residential units covered by tariff headings 9807.0000 or 9814.3000, with a total covered area not exceeding 10,000 square feet, is also exempt. 4. Low-Cost Housing Projects: Construction services related to low-cost affordable public housing projects sponsored and funded by the Federal Government or the Government of Sindh are exempt from sales tax. This exemption applies provided the houses are built on plots up to 125 square yards or apartments/flats with a covered area not exceeding 900 square feet. Additionally, the SRB outlined that construction services taxed at the standard rate of 15% require the registered person to electronically submit an election or option in Form “C” by the prescribed due date to opt for this rate under the Special Procedure prescribed under Rule 42B of the Sindh Sales Tax on Services Rules, 2011. The Sindh government has also introduced a reduced sales tax rate of 8% on construction services, but this comes with the condition that input tax credit/adjustment will not be available. Furthermore, a reduced rate of 5% has been granted under the following conditions: 1. Government Civil Works: Construction services related to government civil works where the expenditure is paid from the expenditure budget of the Federal Government, Provincial Government, Local Government, or Cantonment Board are taxed at a reduced rate of 5%. 2. No Input Tax Credit: Input tax credit/adjustment is not available under this reduced rate. This move by the Sindh government aims to encourage growth in the construction sector by easing the tax burden on specific construction activities and projects, particularly those that contribute to affordable housing and public infrastructure development. Stakeholders in the construction industry are expected to benefit significantly from these exemptions and reduced rates, potentially leading to increased construction activities and economic development in the region.

Date: 2024-07-26

Details: July 26, 2024 Karachi, July 26, 2024 – The Sindh Revenue Board (SRB) has announced the imposition of a 15% sales tax on services provided by call centers for the tax year 2024-25. This move follows recent updates to the working tariff for call centers as per the amendments introduced through the provincial Finance Act, 2024. According to the SRB, the standard sales tax rate for call center services is now set at 15%. However, businesses in the call center sector have the option to avail of a reduced sales tax rate of 3%, subject to specific conditions outlined by the SRB. To benefit from the reduced rate, registered call centers must electronically submit an election or option in Form “L” as per Rule 42J of the Sindh Sales Tax on Services Rules, 2011. Additionally, businesses opting for this reduced rate must note that input tax credit or adjustment will not be available under this scheme. The SRB also introduced an exemption from sales tax for certain call center services. Services exported and delivered by registered call centers to clients outside Pakistan will be exempt from sales tax. To qualify for this exemption, the value of the export must be received in foreign exchange through banking channels into the business bank accounts of the registered call center exporting the services. Furthermore, the transaction must be reported to the State Bank of Pakistan in accordance with the procedures prescribed by the State Bank. This new tax regime aims to streamline the taxation process for call centers and ensure compliance with the provincial tax regulations. The imposition of the standard rate and the provision for a reduced rate reflect the SRB’s approach to balance revenue generation with support for the service sector. The introduction of the 15% sales tax and the conditional reduced rate of 3% is expected to impact the operational costs for call centers. Businesses in the sector will need to adapt to these changes by updating their financial and compliance practices accordingly. The changes in sales tax regulations will require call centers to closely monitor their tax obligations and reporting processes. The option to elect for a reduced rate could offer some relief, but the absence of input tax credit might affect cost structures for many companies. For export-oriented call centers, the exemption provides a significant advantage, potentially enhancing competitiveness in international markets. Adhering to the prescribed procedures for foreign exchange and reporting will be crucial for leveraging this exemption. The SRB’s new tax measures for call centers mark a notable shift in the taxation landscape for the sector, aiming to enhance regulatory compliance while providing avenues for tax relief under specific conditions.

Date: 2024-07-26

Details: Ali Ahmed | BR Web Desk Published July 25, 2024 Updated July 26, 2024 After posting a detailed chart showing how Pakistan’s salaried class is paying up to 9.4 times more tax than in India, the Pakistan Business Council (PBC) apologised for its mistake and said the tax burden on this side of the border is 3 times higher than in the neighbouring country. It had earlier said that for two countries with almost the same cost of living, income tax on salaried employees in Pakistan is up to 9.4 times that in India. The development comes after the Pakistani government, running short of liquidity, imposed further taxes on the salaried class in the Budget 2024-25 presented on June 12. In the Finance Bill 2024, the government has increased tax liability for all income groups that earn more than Rs50,000. Islamabad says it wants to generate an additional Rs70 billion in taxes from this group. While the government did not touch the income tax exemption threshold – which still stood at Rs50,000 – liability increased across all other levels of salaries. For example, a person earning Rs100,000 a month will now pay Rs2,500 a month, up from the earlier level of Rs1,250 – showing 100% increase. It also imposed a 10% surcharge on those whose total incomes go beyond Rs10 million during a fiscal year, on top of the higher rate of taxes. On the other hand, the Indian government, in its bid to boost consumption, cut income tax rates for some citizens in its budget announcement this Tuesday. The government revised a system introduced under which annual income between 0.3 million Indian rupees and 0.7 million Indian rupees will now attract a 5% tax rate as compared to income between 0.3 million Indian rupees and 0.6 million Indian rupees earlier. The PBC, which has previously voiced concerns against higher taxation, compared the deductions between Pakistan and India in its post on Thursday. The PBC had also argued that taxed employees in Pakistan certainly do not get better value for their contribution. “Our tax system is far from equitable,” it had said. The salaried class in Pakistan has already been protesting against the increase in taxation on the salaried group. Finance Minister Muhammad Aurangzeb has said that relief would be provided to the salaried group, but when it was ‘possible’. With the staff-level agreement for a three-year programme now reached, many believe any relief is still some time away. THE STORY, ORIGINALLY PUBLISHED JULY 25, 2024, WAS UPDATED ON JULY 26, 2024 TO INCORPORATE THE ERROR MADE BY THE PBC.

Date: 2024-07-25

Details: Hamid Waleed Published about an hour ago LAHORE: The tax department remained unsuccessful in taxing the amount transferred by a beverage company to Workers Profit Participation Fund (WPPF), said sources. The department had created an additional demand of millions of rupees on account of WPPF coupled with interest besides other additions for the assessment year 2001-02. The Commissioner appeals confirmed the same but the tribunal deleted the addition made under section 25(c) of the repealed Income Tax Ordinance while observing that companies falling under section 2(c) of the Companies Profits (Workers Participation) Act, 1968 were allowed to use funds for their business operations and the income from such funds including capital gains was exempt from levy of tax, due to be granted through a special law. The beverage company secured its interest by agitating that deduction made on account of WPPF does not fall within the ambit of section 25(c) because the companies are allowed to use WPPF for its business but the income arising out of the same was declared to be exempt under the Companies Profits (Workers Participation) Act, 1968. According to the preamble of the Act, the company representative maintained, it was enacted to provide for participation of workers of companies and section 2 of the Act deals with investment of funds whereas section 9 clearly provides an exemption on income of the funds including capital gain through special law. Also, the transferred amount to the WPPF does not fall within the definition of trading liability, which means buying and selling of goods and services. Therefore, the transferred amount could not be termed as arising out of a trader/trading. Rather, the same is a statutory liability. The appellate forum maintained that the transferred amount was granted and exemption under the Companies Profits (Workers Participation) Act, 1968, which is a special law and takes precedent over the general law. If the Income Tax Ordinance is given more weight over the special law, it would not help the department’s stance because the transferred amount to the WPPF was not a trading liability and thus did not attract the provisions of section 25(c) of the Ordinance, it added. Copyright Business Recorder, 2024

Date: 2024-07-25

Details: Sohail Sarfraz Published about an hour ago ISLAMABAD: The Federal Tax Ombudsman (FTO) has expressed serious concern over delay in the release of an imported Mercedes Benz, as Customs department refused to accept manufacturing date of used vehicle for assessment of duties/taxes. In this regard, the FTO has issued an order against Collectorate of Customs Appraisement (East), Karachi. The complaint was filed in terms of Section 10(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance), against Collectorate of Customs Appraisement (East), Karachi, for consideration of manufacturing date of vehicle as per manufacturing company for assessment of duty/taxes. The department should have kept all the above narrated facts and legal provisions in view and should have contacted the Actual Manufacturers of the impugned vehicle i.e. Mercedies Benz, Germany, instead of simply relying upon the info provided by their local agent viz Shahnawaz (Pvt) Ltd and on vin-info.com an independent website while “Oasis” is reportedly the official website). Briefly, a used vehicle, Mercedes Benz, was shipped from UK on July 17, 2023, consigned to Khatoon, which, arrived at Karachi Port on August 13, 2023. On 07.08.2023, a letter was already being issued to Shahnawaz (Pvt) Ltd, Karachi, by Collectorate of Customs Appraisement (East), Karachi, for supply of Import Trade price (ITP) for the said vehicle. It replied, mentioning the total value as $99,447 and date of production as March 2022. The clearing agent approached the office of Shahnawaz Ltd with the plea that the said vehicle is 2021 manufactured as well as few extra options are mentioned which are not fitted in the vehicle but they refused to make any changes. So, the complainant emailed a complaint to their principles Mercedes Benz Daimler along with proof of their claim, who forwarded the complaint to their Middle East regional office. Shahnawaz respond through an email mentioning that they oversaw a few options which brought the total Import Trade Price (ITP) value down to $ 96,833 but still mentioned the date of production as March 2022. Shahnawaz Ltd are taking the date of shipment/delivery to Mercedese Benz UK dealer as the date of production. According to the CGO14/2005, the assessment can only be made from the date of production and not from the date of shipment/delivery to the Mercedes Benz dealer. Hence, Shahnawaz is deliberately not mentioning the actual date of production just to discourage the import of used Mercedes Benz vehicles. Another factory document known as Certificate of Conformity (CCC) was issued and placed in the vehicle right after the vehicle leaves the factory. The year of manufacture on this CCC document was mentioned as 2021. In view of supra, it is evident that the issue of manufacturing date of the subject vehicle is a unique case in view of temporary closure of manufacturing process due to COVID lock down and remains the core issue of the subject complaint. Therefore, the department should either have accepted the Certificate of Conformity (CoG) as sufficient evidence provided by the Complainant or should have approached the concerned manufacturing unit of the company i.e. Mercedes Benz, Germany, for verification and confirmation of manufacturing date of the said vehicle instead of simply relying upon the challenged information provided by the local agent. This confirms an unjust and discriminatory decision making by the department due to its neglects, inattention, delay, incompetence and inefficiency and is tantamount to maladministration, the FTO order stated. The FTO has recommended the FBR to direct Collector of Customs Appraisement (East) to verify the certificate of conformity issued by the manufacturer i.e. Mercedes Benz under Article 6 of EU Council Directive No.92/53 which clearly states the date of manufacturing as March 25, 2021, directly from the manufacturing company; i.e., Mercedes Benz, Germany, as soon as possible but not later than 30 days, in case the verification is not made within the given timeline by the department, the documentary evidence of Certificate of Conformity (CCC) issued by the manufacturer, be used for determination of the year of manufacturing and the assessment be made accordingly, as per law, the FTO order added. Copyright Business Recorder, 2024

Date: 2024-07-25

Details: Ahmed Malik Published about an hour ago KARACHI: The business community in Pakistan has expressed its deep concerns over the unintended consequences of Customs SRO 450(1)/2001 Subrule 664(q), which allows shipping companies to collect unsubstantiated/prejudiced charges, contravene shipping laws and contradict existing international agreements, governing maritime cargo transportation. The business community has requested the Secretary Revenue Division FBR and Chief Collector of Customs (Enforcement) Port to immediately initiate a review process for Rule 664(q) and convene a meeting with stakeholder, including business representatives to discuss the concerns and recommend revisions to address the issue. According to the business community, there is a lack of transparency in customs shipping rules, alleged rule is claimed to have been created without consulting the business community, a major stakeholder. These objections raise concerns about the fairness and transparency of the customs rule. Business communities are seeking a review of the rule to ensure it aligns with international standards and protects their interests. That’s a good explanation of the Carriage of Goods by Sea Act, 1925 (COGSA) and its connection to the Hague Rules, how it relates to the concerns about Customs Rule SRO 450(1)/2001 sub rule 664(q). The Hague Rules established a framework and set a baseline for the responsibilities of carriers (shipping companies) and the rights of shippers (businesses). This framework includes provisions for carriers to collect “freight” which covers charges related to the transport goods. However, business community argues the potential conflict with Customs Sub Rule 664(q) that allows shipping companies to collect charges beyond what’s outlined in The Hague Rules and potentially the Bill of Lading (which incorporates the terms of the COGSA). This raises concerns about the legality and fairness of these additional charges. If access and compare the Customs Rules, the specific wording of Sub Rule 664(q), compare it with the applicable articles of the Hague Rules (particularly Articles III) there’s a clear contradiction and irregularity. When business communities raising concerns about the customs rule, emphasizes that The Hague Rules are an international standard and that Sub Rule 664(q) should not undermine or weaken the established framework for carrier charges. Pakistan’s obligation by signing the UN Convention on the Carriage of Goods by Sea (Hamburg Rules) in 1978, Pakistan has committed to upholding its provisions. This includes the clause mentioned, which nullifies any provision in a contract or document (like the so-called customs sub rule 664(q) that challenge/damage or undermines the Hamburg Rules. If Sub Rule 664(q) allows shipping companies to levy charges that are not permitted under the Hamburg Rules, it could be considered null and void under the dispute of the convention. Business advocating against Sub Rule 664(q) emphasize that Pakistan’s commitment to the Hamburg Rules takes precedence over any conflicting domestic regulations. Businesses further argue that Sub Rule 664(q) needs to be reviewed to ensure it complies with the Hamburg Rules and protects the rights of businesses under the international convention. Sub Rule 664(q) sets a condition and allows shipping agents or carriers to collect additional charges beyond freight, but only if those charges are mentioned in a published tariff of explicitly written on the Bill of Lading (B/L). International rules classify Bill of Lading, international conventions like The Hague Rules state that the B/L takes dominance in case of discrepancies with a carrier’s tariff. There is huge Ambiguity in Sub Rule 664(q) the “notified or published tariff” in Sub Rule 664(q) creates ambiguity. Business conflict that published tariff alone is sufficient for collecting additional charges, even if not mentioned on the B/L. This contradicts the international principle of the B/L prevailing. There’s a danger that shipping companies might rely on their published tariffs to justify charges not explicitly mentioned on the B/L, leading to unexpected costs for businesses. Further, businesses claim that Sub Rule 664(q) is meant for FOB or for exports shipments, not for C&F, CY/CY bills of ladings, where importers in fact pay all charges at POL upto Karachi port CY. Unexpected charges due to Sub Rule 664(q) can strain importers’ budgets and disrupt their operations. Businesses suspect shipping agents are exploiting the ambiguity in Sub Rule 664(q) to impose illegitimate charges on importers under the guise of “notified / published tariffs.” These charges lack transparency and justification. Importers seek clear regulations that prevent shipping agents from withholding security deposits and ensure the return of bank payment orders in full and intact. Business Communities are deeply concerned about the practice of untruthfully “dirty, oily & damaged container charges” brutally unethical, solely based on made-up reports at the port of discharge (POD). This system is inclined to unfairness as container damage can occur during transit or at the port of loading (POL). To promote transparency and accountability in container handling, businesses propose the legal framework, Mandate the requirement for Examination of Insured Risks (EIR) reports from both the POL and POD. These reports must be accompanied by dated photographs that clearly depict the container’s condition at each location, including photographs from both ports will help establish a clear timeline and pinpoint where the damage (if any) might have occurred. This will prevent business from being unfairly charged and increased transparency in container handling. Business Communities are deeply concerned about the unintended consequences of Customs Rule 664(q). To address these issues, recommend the Secretary Revenue Division FBR and Chief Collector of Customs (Enforcement) Port to immediately initiate a review process for Rule 664(q), convene a meeting with stakeholder, including business representatives to discuss the concerns and recommend revisions. The goal is to formulate clear, well-organized customs regulations that facilitate trade while upholding security standards. Copyright Business Recorder, 2024

Date: 2024-07-25

Details: July 25, 2024 Karachi, July 25, 2024 – The Federal Board of Revenue (FBR) has implemented stringent penalties for sales tax fraud, signaling a robust crackdown on offenders under amended legislation. This move, introduced through the updated Sales Tax Act, 1991 as amended by the Finance Act of 2001, aims to deter fraudulent activities and ensure compliance with tax regulations across Pakistan. According to the revised provisions, individuals found guilty of committing, causing, or attempting to commit tax fraud will face severe consequences. The penalties stipulate a fine of twenty-five thousand rupees or one hundred percent of the evaded tax amount, whichever is higher. In addition to financial penalties, perpetrators could also be subject to imprisonment upon conviction by a Special Judge. The length of imprisonment varies based on the magnitude of tax evasion: • Up to five years if the evaded tax amount is less than one billion rupees. • Up to ten years if the evaded tax amount is one billion rupees or more. Furthermore, offenders may face fines equivalent to the evaded tax amount, or a combination of fines and imprisonment, as determined by the judicial process. The FBR emphasized that individuals who aid, abet, or conspire in the commission of tax fraud will also be held accountable under the law. Such accomplices, upon conviction by a Special Judge, could face imprisonment for up to five years if the evasion involves less than one billion rupees. For amounts equal to or exceeding one billion rupees, the penalty could extend up to ten years of imprisonment, accompanied by fines matching the evaded tax amount or as determined by the court. These stringent measures underscore the FBR’s commitment to combatting tax evasion and ensuring fairness in revenue collection. By imposing harsh penalties, the FBR aims to safeguard public funds and maintain trust in Pakistan’s taxation system. The revised penalties are designed not only to punish offenders but also to serve as a deterrent against future fraudulent activities. Industry experts and legal analysts have welcomed the FBR’s proactive stance, noting that the strengthened penalties reflect a necessary step towards enhancing compliance and deterring fraudulent practices in the business community. They anticipate that the enforcement of these measures will contribute to a more transparent and accountable tax regime, fostering a conducive environment for economic growth and investment in Pakistan. As the FBR begins implementing these penalties, stakeholders are encouraged to ensure full compliance with tax laws and regulations to avoid severe legal repercussions. The FBR remains vigilant in monitoring tax compliance and stands ready to take further action against any instances of fraud or non-compliance that undermine the integrity of Pakistan’s tax system.

Date: 2024-07-25

Details: July 25, 2024 Karachi, July 25, 2024 – The Federal Board of Revenue (FBR) has announced new sales tax rates on imported mobile phones, effective immediately. The revised tax structure, introduced through amendments in the Finance Act of 2024, aims to regulate the import and sale of mobile phones in Pakistan. Under the updated Sales Tax Act, 1990, the FBR has delineated specific tax rates based on the value and condition of imported mobile phones. Notably, a 25% ad valorem sales tax will be imposed on completely built unit (CBU) mobile phones valued over $500 at the time of import or registration (IMEI) number by Cellular Mobile Operators (CMOs). This higher tax rate is intended to encourage local manufacturing and reduce reliance on imported goods. For CBU mobile phones valued at $500 or below, a standard sales tax of 18% will apply. Additionally, mobile phones imported in Completely Knocked Down (CKD) or Semi Knocked Down (SKD) condition, regardless of their value, will also attract an 18% sales tax. This uniform tax rate on locally manufactured phones aims to support domestic production initiatives. According to the FBR’s notification, the liability to pay taxes varies based on the category of goods: • Cellular Mobile Operators (CMOs) are responsible for paying taxes on specified goods as listed in Table-I. • Importers bear the tax liability for goods listed in columns (3) and (4) of Table-II. • Local manufacturers are mandated to pay taxes on goods specified in column (5) of Table-II. The payment of taxes under this new schedule will follow the timeline specified in section 6 of the Sales Tax Act, 1990, ensuring adherence to legal and procedural guidelines. This policy shift by the FBR is expected to have profound implications on the mobile phone market in Pakistan. It aims to balance revenue generation with promoting local industry growth, aligning with broader economic strategies aimed at reducing import dependence and fostering domestic manufacturing capabilities. Industry experts have already begun analyzing the potential effects of these tax reforms. While some anticipate a temporary disruption in the availability and pricing of imported mobile phones, others foresee long-term benefits for local manufacturers and consumers, including potential job creation and technological advancement. As stakeholders adapt to these regulatory changes, the FBR remains committed to monitoring their impact closely. Continued dialogue between the government, industry leaders, and consumer advocates will be crucial in navigating the evolving landscape of Pakistan’s mobile phone market under these new tax regulations.

Date: 2024-07-25

Details: July 25, 2024 Lahore, July 25, 2024 – The Federal Board of Revenue (FBR) has established fixed income tax rates based on the value of shops located in various areas of Lahore. This move aims to streamline tax collection from shopkeepers and retailers across the city. The FBR, through SRO 1064(I)/2024, has notified these fixed rates of income tax for shopkeepers and retailers, based on the value of their retail outlets or shops in different areas. Lahore is one of 42 cities for which the FBR has notified valuation tables and fixed income tax rates. These rates have been issued under the Tajir Dost Scheme, which is designed to facilitate and encourage tax compliance among traders. The indicative values and corresponding income tax rates for leading areas in Lahore are detailed below: S.No City Area Indicative Income Tax on Indicative Income (PKR) Monthly Advance Tax (PKR) 1 Lahore AABKARI ROAD, DATA GUNJ BUKSH TOWN 1,000,000 60,000 5,000 2 Lahore AALIA TOWN MEHMOOD BOOTI NEW, SHALIMAR TOWN 680,000 12,000 1,000 3 Lahore ABADI MUSALA MOUZA MUSALA, Allama Iqbal Town 680,000 12,000 1,000 4 Lahore ABADI SHAH FARIDABAD, SAMANABAD TOWN 1,000,000 60,000 5,000 5 Lahore ABBOTT ROAD, DATA GUNJ BUKSH TOWN 1,000,000 60,000 5,000 6 Lahore ABDALI ROAD, DATA GUNJ BUKSH TOWN 680,000 12,000 1,000 7 Lahore ABDALIAN COOP SOCIETY, Allama Iqbal Town 1,000,000 60,000 5,000 8 Lahore ABDUL KAREEM ROAD(QILA GUJAR SINGH), DATA GUNJ BUKSH TOWN 680,000 12,000 1,000 9 Lahore ABDUL QAYYUM ROAD (BELA BASTI RAM), RAVI TOWN 1,000,000 60,000 5,000 10 Lahore ABDUL SATTAR ROAD (BELA BASTI RAM), RAVI TOWN 1,000,000 60,000 5,000 11 Lahore ABDULLAH GARDEN, WAGHA TOWN 680,000 12,000 1,000 12 Lahore ABDULLAH PARK, SHALIMAR TOWN 680,000 12,000 1,000 13 Lahore ABID GARDEN ABADI MUSALA, Allama Iqbal Town 680,000 12,000 1,000 14 Lahore ABID TOWN JOGEENPURA, Allama Iqbal Town 680,000 12,000 1,000 15 Lahore ABU BAKAR ROAD BADAMI BAGH (BELA BASTI RAM), RAVI TOWN 680,000 12,000 1,000 For complete detail regarding areas of Lahore and income tax rates visit FBR’s official website. These fixed rates are part of the FBR’s broader strategy to ensure tax compliance and increase revenue collection from the retail sector. By providing clear and fixed tax rates, the FBR aims to simplify the tax process for shopkeepers and reduce ambiguities in tax liabilities. The implementation of these rates is expected to enhance tax compliance among retailers and shopkeepers, contributing to the overall tax revenue of the country.

Date: 2024-07-25

Details: July 25, 2024 Karachi, July 25, 2024 – The Sindh Revenue Board (SRB) has issued updated sales tax rates for services provided by professionals and consultants for the tax year 2024-25. The new rates, effective after amendments made through the provincial Finance Act, 2024, aim to streamline the tax structure and clarify applicable rates and exemptions. According to the SRB: 1. Medical Practitioners and Consultants: o Standard Rate: A standard sales tax rate of 15% applies to services rendered by medical practitioners and consultants. o Reduced Rate: A reduced rate of 3% is available for services other than those classified under the tariff heading 9842.0000, which pertains to cosmetic and plastic surgery. However, input tax credit/adjustment is not admissible at this reduced rate. o Exemptions: Services provided by medical practitioners and consultants, except those involving cosmetic and plastic surgery, are exempt from tax if the consultation/visit fee does not exceed Rs. 3,000 per consultation/visit. 2. Legal Practitioners and Consultants: o Standard Rate: Legal services are subject to a standard sales tax rate of 15%. o Reduced Rate: A reduced rate of 8% is also available, but input tax credit/adjustment is not admissible. 3. Accountants and Auditors: o Standard Rate: Services provided by accountants and auditors are taxed at a standard rate of 15%. o Reduced Rate: A reduced rate of 8% is applicable to accounting and auditing services, with the stipulation that input tax credit/adjustment is not admissible. o Exemptions: Services exported and delivered by registered accountants and auditors outside Pakistan are exempt from sales tax, provided the export value is received in foreign exchange through banking channels into the business bank accounts of the registered person and reported to the State Bank of Pakistan as prescribed. The SRB’s issuance of these tax rates provides clarity for professionals and consultants regarding their tax obligations for the upcoming tax year. The differentiation between standard and reduced rates, along with specific exemptions, aims to support various professional services while ensuring compliance with tax regulations. These updates are part of the SRB’s ongoing efforts to enhance the tax framework within Sindh, making it more transparent and easier for taxpayers to understand their liabilities. Professionals and consultants are encouraged to review these rates carefully to ensure accurate tax filing and compliance. Stakeholders can access the detailed notification on the SRB’s official website for further information on the applicable tax rates and conditions for exemptions.

Date: 2024-07-24

Details: Sohail Sarfraz Published about an hour ago ISLAMABAD: The monthly tax of shops located in posh areas like Jinnah Super (Market F-7) Islamabad has been fixed at Rs 60,000. The amended Tajir Dost Special Procedure, 2024, issued by the Federal Board of Revenue (FBR) revealed that there are other shops, which were required to pay Rs 45,000 as monthly tax. The monthly advance tax on shops in Super Market, Sector F-6, (Ground Shop), Islamabad has been fixed at Rs 60,000 per month. The shops in other floors of the same market would pay tax of Rs 30,000 per month. The shops located at MA Jinnah Road, Karachi, Market Quarters and Karachi Marriot Road would pay Rs 60,000 per month. The Sectors A, B and C Bahria Enclave and Sector H, G, Islamabad has been fixed at Rs 60,000 per month. According to the FBR, the Melody Market, Islamabad, backside shops will pay monthly fixed tax of Rs 45,000. The fixed tax of Rs 60,000 would be paid by each shop located at ground floors, Melody Market. The shops at Bath Island facing Khayaban-e-Iqbal Road, Karachi would pay monthly fixed tax of Rs 60,000. The shops of Bhori Bazaar, Burns Road and Bombay Bazaar would pay monthly fixed tax of Rs 60,000. The FBR will charge Rs 60,000 fixed tax from shops located in Clifton Quarters excluding Shireen Jinnah Colony and Clifton Block-I. The monthly fixed tax of Rs 45,000 would be paid by shops of Commissioner Society and Humayun Street (DHA phase VII extension and VIII-extension). The fixed monthly tax of Rs 60,000 would be paid by shops located at Defence Housing Authority Phase I, II, III, IV, V, VI, VII, VIII; Karachi Defence Housing Authority Phase VII Extension, Phase VIII Extension (excluding Commissioner Society and Humayun Street) and Karachi Defence Officers Housing Scheme, Malir. The shops at II Chundrigar Road and Dehli Mercantile, Karachi would pay monthly tax of Rs 60,000. The monthly fixed tax rate would be Rs 60,000 for shops located in Joria Bazaar, Karachi and Junna Market, KDA Officers Housing Society, Karachi, KDA Scheme No 1 and 1A, Karachi and Kagzi Bazaar. The monthly fixed tax of Rs 45,000 would be paid by shops located in Karachi Administrative Cooperative Housing Society Karachi and Cooperative Housing Society. In Lahore, fixed tax of Rs 60,000 would be paid by shops located at Shahalam Gate (E-Ward), Ravi Town. The fixed tax of Rs 30,000 would be paid by shops at Montgomery Road, Data Gunj Buksh Town. The shops located at Rangmahal Main (E-Ward), Ravi Town would pay monthly tax of Rs 60,000. In Sialkot, shops located in Al-Fatah Market on Main Road, Daska; Bank Road (Front), Daska, Sialkot; Sialkot Bano Bazaar, Sialkot and Sialkot Bansanwala Bazaar will pay fixed tax of Rs 20,000 per month. The monthly fixed tax of Rs 30,000 would be paid by Main Bazaar Daska on Main Road, Daska, Sialkot. The shops located at Adam Ji Road, Rawalpindi will pay fixed tax of Rs 60,000 per month. In Faisalabad, fixed tax of Rs 45,000 would be paid by the shops located at Faisalabad City Chak No 212 RB, Block Karkhana Bazar and Montogomery Bazar Remaining Commercial, City, Faisalabad; Faisalabad City Chak No 212 RB, Block Montogomery Bazar and Jhang Bazar Circular Road, City, Faisalabad; Faisalabad City Chak No 212 RB, Block Montogomery Bazar and Jhang Bazar GoleKaryana/Lakarwala, City, Faisalabad and Faisalabad City Chak No 212 RB, Block Montogomery Bazar and Jhang Bazar Remaining Commercial, City, Faisalabad and Faisalabad City D-Ground, D-Ground Peoples Colony Shop in Big D-Ground Peoples Colony, City, Faisalabad. Copyright Business Recorder, 2024

Date: 2024-07-24

Details: CHINA AT STAKE? Sohail Sarfraz Published about 2 hours ago ISLAMABAD: The Federal Board of Revenue’s tax collection of over Rs 3 billion per annum from imports from China is at stake as Chief Court Gilgit Baltistan has stopped FBR from collecting sales tax/income tax from Sost Border. The Collectorate of Customs (Gilgit Baltistan) has written a letter to the FBR on restraining order on collection of sales tax and income tax on import stage by Chief Court – Gilgit Baltistan. According to the communication of the Collector of Customs to the FBR, Chief Court – Gilgit Baltistan on July 20, 2024, in writ petition number 201 of 2024, has passed an ex-parte restraining order at admission stage without issuing notices to the FBR and other respondents: “to not collect sales tax, income tax and additional sales tax from importers and exporters at Sost Dry Port, declaring that Gilgit Baltistan is exempt from these taxes. Data revealed that the sales tax and income tax at the import stage at Sost Dry Port were collected last year equal to Rs 2.798 billion and Rs 0.979 billion respectively, according to the Collector of Customs. The Sales Tax Act 1990 and Income Tax Ordinance 2001 have not been extended to Gilgit Baltistan as per Gilgit-Baltistan Constitution Order 2018 and its predecessor constitutional orders. However, under Constitution Order 2018, the Prime Minister is empowered to do so. The issue has long historic background since 1981, in fact Income Tax Ordinance 2001 was extended to Gilgit Baltistan in 2012 and later withdrawn as a result of discussions and decisions in FBR and Prime Minister office. The matter involves important constitutional issues, if the Board reaches to conclusion that the subject restraining order needs to be contested in the court then it is proposed that the Board may hire a constitutional lawyer from Islamabad, as no suitable lawyer is available here. In such a situation, the office of Attorney General of Pakistan may also be engaged if deemed necessary, Collector of Customs added. The order of the Chief Court Gilgit Baltistan revealed that admittedly, the territory of Gilgit Baltistan is exempted from imposition of all kinds of taxes, which has already been decided in a plethora of judgements. The points raised by the petitioners (importers and exporters associations) need further consideration. Hence petition is admitted for regular hearing. In the meantime, the FBR is restrained from collection/deduction of income tax, sales tax and additional sales tax from the importers and exporters of Gilgit Baltistan on import stage at Sost Station, order of the Chief Court Gilgit Baltistan added. Copyright Business Recorder, 2024

Date: 2024-07-24

Details: Sohail Sarfraz Published about 2 hours ago ISLAMABAD: The Federal Board of Revenue (FBR) has not found appropriate to initiate action against any of the tax officials who were placed at the “admin pool” in May-July 2024. As per details, the FBR had placed more than four dozen senior Inland Revenue Service (IRS) and Customs officers at “admin pool” in April and July this year on the reports of intelligence agencies. The officials on “Admin Pool” are not under suspension, but they are not allowed to do any kind of official work. Later, the office-bearers of the Officers Association of Pakistan Customs Service and the Interim Committee of the Inland Revenue Service had conveyed their concerns to the FBR about the placement of senior most officers of both services on the “Admin Pool” which was rejected by the tax authorities. Sources said that the FBR placed those Customs officers at the admin pool who were waiting for postings for the last two to three years. Interestingly, the FBR, on a pick and choose policy, transferred one senior officer of grade 20 of IRS from Islamabad to another station who won numerous cases for the department involving tax over Rs 20 billion and whose one assessment order passed against a financial institution and withholding tax audit strategy were also shared by the FBR among all field formations for replication and guidance. Sources said the FBR had started work on preparing a new transfer policy, but this has not been notified due to unknown reasons. Sources claimed that some officers, who were not involved in any sort of wrongdoings, decided to challenge admin pool placement in courts. They opined that the department should also share intelligence agencies reports with us in order to challenge the alleged corruption charges. When contacted, the FBR sources, on the condition of anonymity, said that the government is suffering huge revenue loss on account of transfer of dozens of senior officials to Admin Pool. These officials are regularly taking salary but contributing nothing to the FBR. Instead, junior officials have been promoted to replace slots of these senior Admin Pool officials. So far, the FBR has not found any concrete evidence of corruption against these officials. This is evident from the fact that the FBR has not issued any charge sheets to these officials or initiated disciplinary proceedings against them. The officials on the Admin Pool have not been served with any show cause notices. Apparently, there were issues of refunds in few cases, but statements of allegations need to be served to corrupt tax officials, if any, they added. Sources well-aware of the developments further revealed that delay in action against these officials is only due to the reason that the officials have not been confronted with any credible evidence of corruption for issuing charge sheets to them. As a result of delay, the FBR has failed to get benefits from the experience of these tax officials, which were labelled as corrupt tax officials without providing them any opportunity to explain their position, the officials added. Copyright Business Recorder, 2024

Date: 2024-07-24

Details: July 24, 2024 Karachi – Members of the newly formed Salaried Class Alliance staged a protest in Karachi on Tuesday, July 22, 2024, denouncing the increased tax burden imposed on salaried individuals in the recently unveiled budget. Despite the scorching heat, the group gathered at the Karachi Press Club to voice their concerns, highlighting the growing financial pressures faced by Pakistan’s salaried population. The protest coincided with other demonstrations by teachers and those affected by power outages, underscoring the broader economic challenges confronting the country. This collective unrest points to a deepening crisis, as various segments of society feel the strain of the government’s fiscal policies. The alliance criticized the government’s decision to increase taxes on salaried individuals while offering little relief to the struggling middle class. They emphasized the disproportionate impact of inflation, high energy costs, and increased taxation on their livelihoods. Protestors expressed their frustration with the government’s fiscal approach, arguing that it fails to address the root causes of economic hardship and instead places an undue burden on those who are already struggling to make ends meet. Protestors called upon the government to reconsider the tax hikes and provide tangible support to the salaried class. They warned of potential mass migration if the situation does not improve, as the middle class is increasingly burdened with rising expenses and limited opportunities. This threat of a brain drain could have long-term negative implications for the country’s economic stability and growth. The Finance Act 2024 has significantly increased the tax liability for individuals earning more than Rs50,000 per month. The government aims to generate an additional Rs70 billion in revenue through these measures. However, critics argue that the burden disproportionately falls on the salaried class, exacerbating their financial hardships. Many believe that the government should instead focus on broadening the tax base and ensuring that wealthier individuals and corporations pay their fair share. A spokesperson for the Salaried Class Alliance stated, “We are not against paying taxes, but the current tax regime is unfairly targeting the salaried class. The government needs to create a more balanced and just system that considers the economic realities of the middle class.” The alliance has vowed to continue its advocacy efforts and explore legal avenues to address the concerns of salaried individuals. The protest in Karachi is just one of many actions planned by the Salaried Class Alliance, as they seek to amplify their message and push for meaningful change. The group is calling for a nationwide dialogue on tax reform, urging the government to listen to the voices of its citizens and implement policies that foster economic growth and stability for all. As the situation develops, it remains to be seen how the government will respond to the mounting pressure from the salaried class and other affected groups. The coming weeks are likely to be crucial in determining the future direction of Pakistan’s economic policies and their impact on the nation’s workforce.

Date: 2024-07-24

Details: July 24, 2024 Islamabad, July 24, 2024 – The Large Taxpayers Office (LTO) Karachi has once again asserted its dominance in revenue collection for the Federal Board of Revenue (FBR), amassing a remarkable Rs 2.53 trillion during the fiscal year 2023-24. This substantial contribution underscores LTO Karachi’s pivotal role in bolstering the nation’s fiscal health. According to sources within the FBR, LTO Karachi’s impressive collection accounted for 27 percent of the total national revenue, including customs duty, for the fiscal year 2023-24. When focusing on land taxes, LTO Karachi’s contribution was even more significant, comprising 31 percent of the total land tax collection during the period under review. As the FBR’s largest revenue-generating branch, LTO Karachi demonstrated a robust 27 percent increase in net collection for FY24, compared to approximately Rs 2 trillion collected in the previous fiscal year. This notable growth highlights the efficiency and effectiveness of LTO Karachi in revenue generation. LTO Karachi’s gross collection for FY24 reached an impressive Rs 2.70 trillion, marking a 30 percent increase from Rs 2.08 trillion in the previous year. This figure includes tax refunds and adjustments amounting to Rs 170 billion, reflecting LTO Karachi’s commitment to maintaining a balanced and fair taxation system. A detailed breakdown of the collections reveals significant growth across various tax categories. The collection of direct taxes saw a substantial 45 percent increase, reaching Rs 1.4 trillion in FY24 compared to Rs 958 billion in the previous fiscal year. Within the direct taxes category, income tax collection was particularly noteworthy, achieving a remarkable 48 percent growth during the fiscal year under review. Sales tax collection also experienced growth, with a 7 percent increase pushing the net collection past the Rs 1 trillion mark in FY24, up from Rs 935 billion in the previous year. This growth is especially commendable given the drastic reduction in imports, which are a major source of sales tax revenue for LTO Karachi. The office’s ability to surpass the Rs 1 trillion benchmark despite lower import volumes highlights its adept management and strategic tax collection practices. Under the federal excise duty (FED) category, LTO Karachi registered an impressive 40 percent growth, collecting Rs 137 billion in FY24, compared to Rs 97.41 billion in the previous fiscal year. This significant increase underscores the office’s capacity to enhance FED collection efficiently. LTO Karachi’s performance is a testament to its strategic initiatives and robust operational framework, which have enabled it to consistently drive revenue growth. The office’s success is not only a reflection of its internal capabilities but also an indication of its critical role in the broader economic landscape of Pakistan.

Date: 2024-07-23

Details: July 23, 2024 Karachi, July 23, 2024 – The Sindh government has announced a conditional sales tax exemption for services provided by beauty parlors and beauty clinics, according to the Sindh Revenue Board (SRB). The SRB, the provincial revenue collecting agency, issued a working tariff for the tax year 2024-25, detailing the conditions under which these exemptions apply. Details of the Sales Tax Exemption The sales tax exemption applies to the following services: 1. Hair Cutting, Hair Dressing, Hair Dyeing, and Shaving: o Providers of these services are exempt from sales tax provided they do not offer any other beauty treatments, beauty care, or related services typically offered by beauty parlors or clinics. 2. Beauty Parlors or Clinics and Slimming Clinics with Turnover Below Rs. 2.5 Million: o Services rendered by beauty parlors, beauty clinics, and slimming clinics whose annual turnover does not exceed Rs. 2.5 million are exempt from sales tax. Conditions for Exemption However, the SRB specified several conditions under which the exemption would not apply: 1. Location: o Beauty parlors, clinics, and slimming clinics located within the premises of hotels, motels, guest houses, or clubs whose services are liable to tax are not eligible for the exemption. 2. Franchise Status: o Franchisers or franchisees do not qualify for the exemption. 3. Multiple Outlets: o Businesses with branches or more than one outlet in Sindh are not eligible. 4. Utility Bills: o If the total utility bill (electricity, gas, and telephone) exceeds Rs. 25,000 in any month during a financial year, the exemption does not apply. Standard and Reduced Sales Tax Rates The SRB has maintained the standard sales tax rate at 15% for services provided by beauty parlors, beauty clinics, and slimming clinics. However, a reduced rate of 10% is available under the condition that input tax credit or adjustment is not admissible. Further Reduced Rate with Additional Conditions The Sindh government has introduced an additional reduced sales tax rate of 5%, subject to stringent conditions: 1. Electronic Submission: o The registered person must electronically submit their election or option in Form “B” as per rule 42C of the Sindh Sales Tax on Services Rules, 2011. 2. POS Machine Installation: o The registered person must install a Point of Sale (POS) machine for the electronic issuance of invoices or receipts and ensure that all such machines are linked with the SRB web portal (e.srb.gos.pk) to the satisfaction of the SRB. 3. Electronic Invoicing: o All tax invoices, bills of charges, or receipts must be issued electronically through the POS system of the registered person. No paper or non-electronic invoices are permitted. 4. No Input Tax Credit/Adjustment: o Input tax credit or adjustment shall not be admissible under this reduced rate. Implications for Beauty Parlors and Clinics The conditional exemption and the varying tax rates aim to provide some relief to smaller businesses while ensuring that larger and more established entities contribute fairly to the provincial revenue. By enforcing conditions such as electronic invoicing and POS machine installations, the SRB aims to enhance transparency and reduce tax evasion. Businesses in the beauty industry must carefully assess their compliance with the new regulations to benefit from the exemptions and reduced rates. The SRB’s focus on digital compliance measures reflects a broader trend towards modernizing tax administration and ensuring better oversight.

Date: 2024-07-23

Details: July 23, 2024 Karachi, July 23, 2024 – The Sindh Revenue Board (SRB) has notified new sales tax rates for services related to immovable property for the tax year 2024-25. The adjustments come as a result of amendments made through the provincial Finance Act, 2024, aiming to streamline the tax structure and increase compliance. The updated sales tax rates for services related to immovable property are as follows: 1. Purchase or Sale or Hire of Immovable Property: o Standard rate: 15% o Reduced rate: 10% (However, input tax credit/adjustment is not admissible) 2. Services Provided by Property Dealers: o Standard rate: 15% o Reduced rate: 10% (However, input tax credit/adjustment is not admissible) 3. Renting of Immovable Property Services: o Standard rate: 15% o Reduced rate: 3% (However, input tax credit/adjustment is not admissible) A significant exemption has been made for renting of immovable property services provided to individuals whose income does not exceed the maximum amount that is not chargeable to tax under the Income Tax Ordinance, 2001. This measure is designed to provide relief to low-income individuals and ensure that the tax burden is equitably distributed. The SRB’s move to update the sales tax rates is seen as an effort to enhance revenue collection while also providing certain reliefs to specific segments. By allowing reduced rates without the admissibility of input tax credit, the board aims to simplify the tax process and reduce the scope for tax evasion. These changes are expected to have a significant impact on the real estate sector in Sindh. Property dealers and individuals involved in the purchase, sale, or renting of immovable property will need to adjust their financial planning and accounting practices to comply with the new rates. Tax experts suggest that while the updated rates may initially pose a challenge for compliance, they will ultimately lead to a more transparent and efficient tax system. The SRB is likely to issue further guidelines and clarifications to assist taxpayers in understanding and implementing these changes. The provincial government’s focus on revising tax rates reflects its broader strategy to enhance fiscal stability and ensure sustainable development. As the new tax year unfolds, stakeholders in the real estate market will be closely monitoring the impact of these changes on their operations and profitability.

Date: 2024-07-23

Details: July 23, 2024 Islamabad, July 22, 2024 – The Federal Board of Revenue (FBR) on Monday released valuation tables for the collection of income tax from shopkeepers and retailers located in 42 major cities of Pakistan. The new tax rates, notified through SRO 1064(1)/2024, aim to streamline tax collection under the Tajir Dost Scheme. The latest notification amends the previous SRO 457(I)/2024, issued on March 30, 2024. Significant changes have been introduced to ensure that only eligible shopkeepers and retailers benefit from the new tax rates. According to the FBR, retailers or shopkeepers who filed their income tax return for the tax year 2023 before March 30, 2024, and whose advance tax liability paid under section 147 exceeds the computed advance tax under this Special Procedure for the tax year 2025 and onwards, are not entitled to the new scheme. Additionally, shopkeepers with a shop size of 100 square feet or less in a residential area or those whose income is exempt under any provisions of the Income Tax Ordinance are also not eligible for the Tajir Dost Scheme. The advance tax payable on indicative income will be computed at the rates provided in Division I of Part I of the First Schedule to the Income Tax Ordinance, 2001, for the relevant tax year and as specified in Schedule – II. Furthermore, the advance tax payable under sub-paragraph (1) shall be reduced by 25% if the person pays the installments for the succeeding months in lump sum or if the person who has not filed an income tax return files one for the tax year 2023 and pays tax on their income equal to or more than the tax on indicative income computed in Schedule – II of this procedure. For small shop owners, the FBR has specified that any person owning a shop of 50 square feet or less in a commercial area, or owning a makeshift shop, kiosk, or small shop measuring not more than 5×3 square feet, shall be liable for a fixed advance tax of PKR 1,200 per annum. However, this provision does not apply to commercial areas specified by the Board in Schedule – III, where advance tax will be paid as specified in Schedule – II. The list of 42 cities that qualify for the Tajir Dost Scheme is as follows: 1. Abbottabad 2. Attock 3. Bahawalnagar 4. Bahawalpur 5. Chakwal 6. Dera Ismail Khan 7. DG Khan 8. Faisalabad 9. Ghotki 10. Gujranwala 11. Gujrat 12. Gwadar 13. Hafizabad 14. Haripur 15. Hyderabad 16. Islamabad 17. Jhang 18. Jhelum 19. Karachi 20. Kasur 21. Khushab 22. Lahore 23. Larkana 24. Lasbela 25. Lodhran 26. Mandi Bahauddin 27. Mansehra 28. Mardan 29. Mirpurkhas 30. Multan 31. Nankana 32. Narowal 33. Peshawar 34. Quetta 35. Rahim Yar Khan 36. Rawalpindi 37. Sahiwal 38. Sargodha 39. Sheikhupura 40. Sialkot 41. Sukkur 42. Toba Tek Singh The Tajir Dost Scheme is designed to facilitate small retailers and shopkeepers in complying with their tax obligations while providing relief through a simplified tax regime. The FBR’s initiative aims to enhance tax collection efficiency and broaden the tax base by encouraging voluntary compliance. By introducing these valuation tables, the FBR hopes to address the concerns of small retailers and shopkeepers who often find the tax filing process cumbersome. The simplified procedure and reduced tax rates for eligible participants are expected to motivate more businesses to formalize their operations and contribute to the national exchequer. The FBR has also emphasized that the new valuation tables and tax rates are part of its ongoing efforts to reform the tax system in Pakistan. By making the tax regime more accessible and transparent, the FBR aims to foster a culture of tax compliance and reduce the informal economy’s size. Retailers and shopkeepers are encouraged to review the new valuation tables and understand their tax liabilities under the Tajir Dost Scheme. The FBR has made the details available on its official website and through various public notices to ensure that all stakeholders are well-informed about the changes. In conclusion, the FBR’s release of the new tax valuation tables for retailers in 42 cities marks a significant step towards tax reform and improved compliance. The Tajir Dost Scheme’s simplified approach is expected to benefit small businesses and contribute to a more robust and transparent tax system in Pakistan.

Date: 2024-07-22

Details: July 22, 2024 Karachi, July 22, 2024 – The Sindh government has announced a 15% sales tax on services provided by travel agents and tour operators for the tax year 2024-25. This decision, formalized through the provincial Finance Act, 2024, marks an increase in the sales tax rates for these services. Travel Agents: The sales tax rate on services provided by travel agents is now set at 15%. However, the government has introduced a provision allowing travel agents to opt for a reduced sales tax rate of 5%. This reduced rate comes with the condition that the input tax credit or adjustment will not be admissible. This measure is intended to offer some relief to travel agents while ensuring compliance with the new tax regulations. Tour Operators: Similarly, tour operators will also be subject to a 15% sales tax on their services. A reduced rate of 5% is available to tour operators under the same condition that the input tax credit or adjustment is not admissible. Additionally, the Sindh government has provided an exemption from sales tax on services related to Hajj and Umrah tour packages. This exemption aims to support the significant number of pilgrims traveling for these religious duties by reducing their financial burden. The introduction of these tax rates reflects the Sindh government’s effort to streamline tax collection and increase revenue. By offering a reduced tax rate option, the government aims to balance the need for revenue with the operational challenges faced by travel agents and tour operators. Industry stakeholders have expressed mixed reactions to the new tax rates. Some travel agents and tour operators are concerned about the impact on their businesses, particularly those that cannot benefit from the reduced rate due to the forfeiture of input tax credits. On the other hand, the exemption for Hajj and Umrah services has been welcomed as a positive step, acknowledging the importance of these religious journeys for many citizens. The new tax rates are effective immediately, and travel agents and tour operators are advised to review the amendments and ensure compliance to avoid penalties. The Sindh government has reiterated its commitment to improving tax administration and providing a conducive environment for business operations within the province.

Date: 2024-07-22

Details: July 22, 2024 Karachi, July 22, 2024 – The Sindh Revenue Board (SRB) has announced new sales tax rates for advertisement services for the tax year 2024-25. The rates were issued following amendments made through the provincial Finance Act, 2024. The notification includes specific rates for various types of advertisement services. The standard sales tax rate for most advertisement services has been set at 15%. However, certain exemptions apply to encourage public welfare messages and support local media. Below are the detailed sales tax rates and exemptions: 1. General Advertisement: 15% o Exemptions:  Advertisements financed out of funds provided by a Government under grant-in-aid agreements.  Advertisements conveying public service messages related to the polio eradication program by UNICEF. 2. Advertisement on T.V.: 15% 3. Advertisement on Radio: 15% 4. Advertisement on Closed Circuit T.V.: 15% 5. Advertisement in Newspapers and Periodicals: 15% o Exemption: Advertisements in newspapers and periodicals published in Sindh. 6. Advertisement on Cable T.V. Network: 15% 7. Advertisement on Poles: 15% 8. Advertisement on Billboards: 15% 9. Other Advertisements (including those on the web or internet): 15% o Exemption: Advertisements on the websites of newspapers and periodicals published in Sindh. The SRB’s decision to specify these rates and exemptions is seen as a balanced approach to ensure revenue generation while promoting public welfare initiatives and supporting local media outlets. The exemptions for advertisements related to polio eradication by UNICEF and those funded by the government under grant-in-aid agreements reflect the provincial government’s commitment to public health and education. Additionally, the exemption for advertisements in newspapers and periodicals published in Sindh aims to support the local print media industry, which has been facing financial challenges in recent years. By exempting these publications from sales tax on advertisements, the SRB hopes to provide them with much-needed relief and encourage the dissemination of information within the province. The new tax rates are effective immediately and apply to all advertisement services provided during the tax year 2024-25. Businesses and advertisers are advised to comply with these rates to avoid penalties and ensure smooth operations. The SRB has also urged stakeholders to review the amendments in the Finance Act, 2024, to fully understand the implications of the new tax regime. This notification is part of the SRB’s broader efforts to streamline tax collection processes and enhance revenue generation for the province. The board has reiterated its commitment to transparency and efficiency in tax administration, aiming to create a conducive environment for business growth and economic development in Sindh.

Date: 2024-07-22

Details: July 22, 2024 The Federal Board of Revenue (FBR) has opened its online portal for filing annual income tax returns for the tax year 2024. As the deadline approaches, taxpayers must be aware of the necessary documents to avoid penalties. The FBR has set a return filing deadline of September 30, 2024, for salaried persons, business individuals, Association of Persons (AOPs), and companies with a special accounting year. Meanwhile, companies with an accounting year from July to June have until December 31, 2024, to file their returns. Before starting the return filing process, taxpayers should gather all required documents to ensure a smooth and complete submission. According to tax experts, the following documents are essential for different categories of taxpayers: For Salaried Individuals 1. Salary Income Certificate or Tax Deduction Certificate: This certificate, typically provided by the employer, details the salary earned and the tax deducted at source. It is a crucial document for accurately reporting income and taxes paid. 2. Evidence of Other Sources of Income: Salaried persons should include documents evidencing any additional income sources, such as rental income. This ensures all income streams are reported, preventing discrepancies and potential penalties. 3. Certificates of Profit on Investments: These certificates detail any income earned from investments such as fixed deposits, mutual funds, or savings accounts. Including these ensures that investment income is accurately reported. For Business Individuals, AOPs, and Companies 1. Income from Business Details: This includes comprehensive records of sales, purchases, stocks, salaries, utilities, rent, petrol expenses, and other business-related expenses. Maintaining detailed and accurate records is crucial for correctly determining taxable income and allowable deductions. 2. Income from Property: Documents related to rental income, such as lease agreements and rent receipts, should be included. This ensures that property income is accurately reported and taxed accordingly. 3. Income from Other Sources: Any additional income sources, such as dividends, interest, or other investments, should be documented and included in the return. Proper documentation prevents omissions and potential issues with the FBR. 4. Income from Securities: Details of any income earned from securities, such as stocks and bonds, should be included. This ensures that all investment income is accurately reported. Importance of Accurate Documentation Accurate documentation is critical in the return filing process. It ensures that all income is reported correctly and that taxpayers can claim all eligible deductions, ultimately reducing the tax liability. Inaccurate or incomplete documentation can lead to discrepancies, resulting in potential penalties or audits by the FBR. Steps to File the Income Tax Return 1. Gather Required Documents: Ensure that all necessary documents are collected and organized before starting the return filing process. This includes salary certificates, investment certificates, business income details, and property income documents. 2. Access the FBR Online Portal: Log in to the FBR’s online portal using the provided credentials. The portal is designed to facilitate the return filing process, offering step-by-step guidance and support. 3. Fill in the Required Information: Enter all relevant information accurately, ensuring that it matches the details in the gathered documents. This includes income from various sources, deductions, and any other relevant financial information. 4. Review and Submit: Carefully review the completed return to ensure all information is correct and complete. Once satisfied, submit the return through the online portal. Keep a copy of the submitted return and the confirmation receipt for future reference. Filing income tax returns accurately and on time is crucial to avoid penalties and ensure compliance with tax regulations. By gathering the necessary documents and following the outlined steps, taxpayers can confidently navigate the return filing process for 2024. Staying informed and organized is key to a smooth and hassle-free tax filing experience.

Date: 2024-07-21

Details: July 21, 2024 Karachi, July 21, 2024 – The National Clearing Company of Pakistan Limited (NCCPL) has announced updated capital gains tax (CGT) rates as mandated by the Finance Act, 2024. The NCCPL, which collects taxes on behalf of the Federal Board of Revenue (FBR), has outlined the new rates applicable from July 1, 2024, for income generated within Pakistan’s capital markets. Updated CGT Rates The NCCPL’s notification includes detailed CGT rates based on the holding period of securities and whether the investors are listed on the Active Taxpayer List (ATL). The rates are as follows: Securities Acquired Before July 1, 2013: • ATL Investors: 0% • Non-ATL Investors: 0% Securities Acquired Between July 1, 2013, and June 30, 2022: • ATL Investors: 12.5% • Non-ATL Investors: 12.5% Securities Acquired Between July 1, 2022, and June 30, 2024: • Holding Period Does Not Exceed One Year: o ATL Investors: 15.0% o Non-ATL Investors: 15.0% • Holding Period Does Not Exceed Two Years: o ATL Investors: 12.5% o Non-ATL Investors: 12.5% • Holding Period Exceeds Two Years but Does Not Exceed Three Years: o ATL Investors: 10.0% o Non-ATL Investors: 10.0% • Holding Period Exceeds Three Years but Does Not Exceed Four Years: o ATL Investors: 7.50% o Non-ATL Investors: 7.50% • Holding Period Exceeds Four Years but Does Not Exceed Five Years: o ATL Investors: 5.00% o Non-ATL Investors: 5.00% • Holding Period Exceeds Five Years but Does Not Exceed Six Years: o ATL Investors: 2.50% o Non-ATL Investors: 2.50% • Holding Period Exceeds Six Years: o ATL Investors: 0.00% o Non-ATL Investors: 0.00% Securities Acquired On or After July 1, 2024: • ATL Investors: 15.0% • Non-ATL Investors: Rates as specified in the First Schedule, Part 1, Division 1 for individuals and association of persons, and Division II for companies. The rate for individuals and associations of persons shall not be less than 15% in any case. Additional CGT Rates for Corporates: • A CGT rate of 29% will be applied to corporates not listed on the ATL unless they submit the necessary documentation regarding their status as a small company to the NCCPL. Commodity Contracts on PMEX: • For future commodity contracts entered into by members of the Pakistan Mercantile Exchange (PMEX): o ATL Investors: 5.00% o Non-ATL Investors: 5.00% Mutual Funds (MUFAP): • Stock Funds: o Individual, Association of Persons, and Company: 15.0% • Other Funds: o Individual and Association of Persons: 15.0% o Company: 25.0% • Securities Acquired On or Before June 30, 2024, with a Holding Period Exceeding Six Years: o ATL Investors: 0% o Non-ATL Investors: 0% Implementation and Compliance The updated CGT rates emphasize the government’s commitment to streamline tax collection and enhance revenue from capital market activities. Investors and corporates are urged to comply with the new rates to avoid any legal or financial repercussions. The NCCPL will continue to work closely with the FBR to ensure efficient and accurate tax collection, providing necessary support to investors for compliance. The NCCPL’s notification of updated CGT rates marks a significant step towards refining Pakistan’s tax regime in the capital markets. By aligning the CGT rates with the Finance Act, 2024, the government aims to foster a transparent and efficient tax system that supports economic growth while ensuring fair taxation. Investors are advised to stay informed and adhere to the updated rates to contribute to the nation’s fiscal stability and development. (Note: Please Visit FBR’s official website for accurate rates)

Date: 2024-07-21

Details: July 21, 2024 Karachi, July 21, 2024 – The Federal Board of Revenue (FBR) has set an ambitious target to elevate Pakistan’s tax-to-GDP ratio to 11.50 percent within the next three years. This initiative aims to significantly improve from the current 8.73 percent recorded for the fiscal year 2023-24. According to official documents, the Pakistan government has tasked the FBR, the country’s apex tax agency, with enhancing the tax-to-GDP ratio based on federal tax collections. By fiscal year 2026-27, the goal is to achieve a ratio of 11.50 percent. To achieve this, the government has set a substantial revenue collection target for the fiscal year 2024-25 at Rs 12.70 trillion. This represents a notable increase from the Rs 9.25 trillion collected in the fiscal year 2023-24. If met, this target would elevate the tax-to-GDP ratio to 10.45 percent for the current fiscal year. Looking ahead, the FBR has projected tax collection targets of Rs 15.56 trillion for the fiscal year 2025-26 and Rs 18.05 trillion for the fiscal year 2026-27. The composition of the projected tax collection for 2026-27 includes Rs 7.67 trillion from direct taxes, Rs 2.21 trillion from customs duties, Rs 6.85 trillion from sales tax, and Rs 1.32 trillion from federal excise duty. The FBR’s strategy to achieve these ambitious targets involves several key measures. These include broadening the tax base by bringing more businesses and individuals into the tax net, improving tax compliance through stricter enforcement and use of technology, and streamlining tax administration to reduce evasion and increase efficiency. Additionally, the FBR plans to enhance its audit capabilities and increase the use of data analytics to identify and target high-risk areas. This approach is expected to not only boost revenue but also ensure a fairer tax system where all taxpayers contribute their due share. The FBR’s efforts are part of a broader economic reform agenda by the Pakistan government aimed at stabilizing the economy, reducing fiscal deficits, and ensuring sustainable growth. By increasing the tax-to-GDP ratio, the government hopes to generate sufficient revenue to fund essential public services, infrastructure projects, and social programs. However, achieving these targets will not be without challenges. The FBR will need to address issues such as tax evasion, a large informal economy, and public resistance to increased taxation. Effective implementation of reforms and sustained political support will be crucial for success. The FBR’s aim to boost the tax-to-GDP ratio to 11.50 percent over the next three years represents a significant step towards improving Pakistan’s fiscal health. While ambitious, this goal is achievable with comprehensive reforms, improved compliance, and robust enforcement strategies. The success of this initiative will play a critical role in ensuring the country’s economic stability and growth.

Date: 2024-07-21

Details: July 21, 2024July 21, 2024 Karachi, July 21, 2024 – The Federal Board of Revenue (FBR) has adopted artificial intelligence (AI) as a pivotal tool to detect non-compliance in the country’s tax system, according to official sources. This move is part of the federal government’s broader strategy to digitize all processes at the FBR across various tax streams, aiming to minimize human contact while ensuring efficiency and transparency. The integration of AI into the digital processes is expected to significantly enhance the FBR’s ability to identify non-compliance, thereby expanding the tax base. The FBR has engaged an international consulting firm to implement a two-pronged strategy, focusing on both immediate gains and a medium to long-term agenda. Several initiatives are currently underway: 1. Synchronized Withholding Administration and Payment System (SWAPS): An API is being developed to ensure simultaneous payments to vendors and the FBR, allowing real-time verification of Advanced Tax Liability (ATL) status. 2. Point of Sales (PoS): Over 9,000 Tier-1 Retailers with 29,459 PoS machines have been integrated with the FBR’s portal. This integration allows seamless auto-population of data in Sales Tax Returns, simplifying the compliance process. The PoS system is also being implemented on the income tax side for the services sector. 3. Track and Trace System (TTS): TTS has been deployed in the tobacco, sugar, fertilizer, and cement sectors. This system tracks the movement of products throughout the supply chain, ensuring transparency and accountability in these key industries. 4. Digital Invoicing: Launched in November 2023, the digital invoicing initiative aims to integrate supply chains from imports and manufacturing to the final consumer. This initiative will facilitate the auto-population of tax returns, reducing the burden on businesses and improving accuracy. These initiatives are part of a comprehensive digitization drive aimed at leveraging the latest technology to facilitate taxpayers and enhance the efficiency of the taxation system. New areas are continually being identified for fast-track implementation. Compliance Risk Management The federal government plans to ensure compliance with tax laws through a comprehensive compliance risk management system. This system will encompass controls and procedures for managing risks in taxpayers’ records related to registration, filing of returns and statements, accurate reporting, and on-time payment of taxes and duties. This will be achieved through extensive use of data analytics and machine learning algorithms. Enhancing Outreach of Tax Machinery A key priority for the government is to broaden and deepen the tax base. To this end, 140 District Tax Offices (DTOs) have been established at the district level by the FBR to trace and register new taxpayers. Retail and Real Estate Sector Taxation The government is aiming to bring the retail sector into the tax net with a scheme for retailers set to launch in FY25. Additionally, the taxation of the real estate sector is being revamped through a combination of policy and administrative measures. Enhancing Cost of Non-Compliance The government is committed to strengthening the enforcement mechanism by curbing smuggling and tax evasion. The cost of non-compliance is being increased with substantially higher tax rates for non-filers. Horizontal Equity in Taxation To provide a level playing field for various businesses and sectors, the government is eliminating distortions, exemptions, and special treatments for certain taxpayers. In summary, the FBR’s integration of AI into its processes represents a significant step towards modernizing Pakistan’s tax system. By leveraging advanced technology, the FBR aims to improve compliance, enhance transparency, and ultimately increase revenue collection. The government’s commitment to digitization and risk management underscores its dedication to creating a more efficient and fair taxation environment.

Date: 2024-07-20

Details:

Hamid Waleed Published about 3 hours ago

LAHROE: District Accounts Offices (DAOs) have informed the Federal Tax Ombudsman (FTO) that the FBR field formations have never issued any guidelines /instructions with regard to adjustment of taxes withheld from the salaried persons.

It was observed during investigation by the FTO office that all of the salaried persons are subjected to excess tax deductions u/s 149 at the stage of deduction at source, despite the fact that they fully qualify the benefit under Clause (2) of Part Ill of Second Schedule to the Income Tax Ordinance, 2001.

All the DAOs are unanimous in opinion that presently the tax is being withheld through automated SAP system which only provides for monthly deduction on salary at average rate and final adjustment is made during the month of each June.

The SAP system has been configured by AGPR and FBR and adopted by the AG Punjab. Accordingly, the DAOs have expressed their inability to make any adjustment in the deductible taxes even if the salaried individuals provide the detail of tax deducted under various other withholding sections of the Ordinance.

The FTO had called for information from DAOs Multan, Khanewal, Muzaffargarh, D. G. Khan, Layyah and Rajanpur based on the complaints of academic teachers regarding excess tax deductions and subsequent ordeal faced by the taxpayers and hardships faced by salaried taxpayers.

According to an order issued by the FTO office, it is observed that the current withholding procedure of tax deduction is in vogue at DAOs level. It is not in conformity with the intent of the legislature as laid down under Section 149 of the Ordinance.

The FTO has directed that the FBR, AGPR, and AG Punjab to ensure changes in the SAP module enabling it to allow adjustment of tax deducted under various provisions of the Ordinance and tax credits, enabling the salaried individuals /pensioners for timely credit and to circumvent long process of refund issuance in terms of Section 170 of the Ordinance. It has also required from the FBR to evolve a sound monitoring mechanism to ensure that the facility is not misused at withholding stage.

Copyright Business Recorder, 2024

Date: 2024-07-20

Details:

N H Zuberi Published about 3 hours ago

KARACHI: Keeping in view the perpetually intensifying hardships being suffered by small traders, industrialists, exporters, salaried class, daily wagers and many other segments due to harsh taxation measures, unbridled discretionary powers to FBR and unbearably high energy tariffs, President Karachi Chamber of Commerce & Industry (KCCI) Iftikhar Ahmed Sheikh vociferously appealed the government to revisit all the highly unjust taxation measures and bring down gas and electricity tariffs which were leading to descending exports, closure of small businesses as well as industries and subsequent retrenchment of employees, besides bringing a large number of small businesses and industries at the verge of bankruptcy.

“The alarming situation calls for extensive relief measures on war-footing basis to ensure that the wheels of industry continue to spin otherwise, our beloved country, which is already fighting hard for economic survival, would be plunged into the darkness of anarchy as the jobless and poor segment of society with empty stomachs will have no other choice but to come out on streets which would trigger a host of other issues and unmanageable challenges for the government,” warned Iftikhar Sheikh in a statement issued here on Friday.

While referring to his recent meetings and discussions with a large number of traders and industrialists who have been constantly complaining about the repercussions of all-time high cost of doing business,

Iftikhar Sheikh said, “We have never seen so many complains, demotivation and depression in the history of Karachi Chamber as ever day, we hear someone looking forward to either shutting down his business or curtailing production activities and go for layoffs which is really disheartening and a matter of grave concerns as widespread closure of industries would only lead to further amplifying the economic crises.”

Terming the imposition of 2.5 percent advance income tax on unregistered retailers under the Finance Act, 2024 as yet another arm-twisting tactic, he said that this move would put entire fast-moving consumer goods (FMCG) sector into the role of withholding agents which must be immediately withdrawn. Around 60 to 70 percent of goods supplied by FMCG sector to the unregistered retailers have been returned back to the manufacturers in outright defiance of the government’s latest measures which, KCCI members complain, would raise cost of goods, plummet sales and give a devastating blow to demand.

He was of the view that small traders as well as industrialists were already battling hard for survival but they were getting totally hopeless with each passing day due to excessively high gas and electricity tariffs which have to be rationalized at any cost. “Although the lawmakers have been assuring from time to time to bring down the electricity tariffs but, instead of doing so, the electricity tariff stays at an unbearably high level of 18 cents/ kWh to date whereas fixed charges have also been enhanced to Rs1,250 while gas was being supplied at a whopping tariff of Rs3,000 per MMBtu”, he said while asking that how a business of small trader or even an industrialist would remain active at such a high cost mainly fuelled by energy tariffs?

Copyright Business Recorder, 2024

Date: 2024-07-20

Details:

July 20, 2024

Karachi, July 20, 2024 – The Sindh Revenue Board (SRB) has announced the sales tax rates on telecom services for the tax year 2024-25, maintaining a consistent rate across various services.

The statutory rates for telecom services, as outlined by the SRB for the upcoming fiscal year, stand at 19.5% for a comprehensive range of services.

The SRB’s decision to set a uniform tax rate of 19.5% on all telecom services is in line with the rates from the previous fiscal year, ensuring stability and predictability for businesses and consumers alike. This rate applies to several key telecom services, including telecommunication, telephone, and internet services, among others.

Telecommunication and Telephone Services

The SRB said telecommunication services, which encompass various forms of telephone services such as fixed line voice, wireless, cellular, and video telephone services, are all subject to the 19.5% sales tax. This also includes specific services like wireless local loop telephone services, payphone cards, and prepaid calling cards. Essential services like voice mail, messaging services (including SMS and MMS), and shifting or changing of telephone connections also fall under this tax rate, according to the SRB.

Bandwidth and Internet Services

Bandwidth services, which are critical for data transmission and connectivity, are uniformly taxed at 19.5%. This includes copper line-based, fiber-optic based, co-axial cable-based, microwave-based, and satellite-based services. Internet services, which are pivotal for both personal and business communications, including email, dial-up, and broadband services (DSL, fiber-optic, co-axial cable, wireless, and satellite-based), are also subject to the 19.5% tax.

The SRB has ensured that all forms of internet and data services on WLL and cellular mobile networks are taxed at the same rate. This uniform taxation also extends to data communication network services (DCNS), covering various mediums such as copper lines, co-axial cables, fiber-optic, wireless, radio, and satellite-based services.

Value-Added Services and Others

Value-added data services, including virtual private network (VPN) services and digital signature services, are taxed at 19.5%. Other specified telecommunication services, such as audio text, teletext, trunk radio, and paging services, also fall under the same tax bracket. Additionally, tracking and alarm services, including vehicle tracking, burglar, and security alarm services, are included.

The SRB’s consistent tax rate of 19.5% across these varied services ensures a streamlined and straightforward tax structure, which can aid in compliance and administration. For consumers and businesses utilizing these services, the clarity in taxation can help in budgeting and financial planning for the coming fiscal year.

This comprehensive taxation approach by the SRB reflects an effort to maintain a balanced fiscal policy while ensuring that essential telecommunication services remain accessible and affordable. As the tax year 2024-25 unfolds, the uniform tax rate will play a significant role in the economic dynamics of the telecom sector in Sindh.

Date: 2024-07-20

Details: July 20, 2024 Karachi, July 20, 2024 – The Sindh government has imposed a 15 percent sales tax on services rendered by restaurants across the province. The Sindh Revenue Board (SRB) announced the new working tariff for the tax year 2024-25, reflecting amendments introduced through the provincial finance act of 2024. This new tax measure affects all restaurant services, including those provided by establishments located in hotels, motels, guest houses, and farmhouses. However, the Sindh government has introduced a reduced rate of sales tax at 8 percent for specific scenarios. The reduced rate applies to restaurant services where payments are made via debit or credit cards, mobile wallets, or QR scanning. Notably, input tax credit or adjustment will not be permissible under these conditions. The SRB’s notification also highlights exemptions from this sales tax for certain restaurants. Specifically, restaurants with a turnover not exceeding 2.5 million rupees in a financial year are exempt from the sales tax, provided they do not meet certain criteria. The exemption does not apply to: 1. Restaurants that are air-conditioned at any point during a financial year or those located within air-conditioned shopping malls or plazas. 2. Establishments within the buildings, premises, or precincts of hotels, motels, guest houses, farmhouses, or clubs whose services are already liable to sales tax. 3. Restaurants providing services within the premises, precincts, halls, or lawns of hotels, motels, guest houses, farmhouses, marriage halls, or clubs subject to sales tax. 4. Franchisers or franchisees. 5. Restaurants with multiple branches or more than one outlet in Sindh. 6. Establishments with total utility bills (gas, electricity, and telephone) exceeding Rs. 40,000 in any month during a financial year. The imposition of this tax is part of the Sindh government’s broader strategy to enhance provincial revenues and streamline tax compliance. By introducing a differentiated tax structure, the government aims to encourage digital payments and ensure greater transparency in transactions. The new tax regime is expected to have a mixed impact on the restaurant industry, with smaller establishments benefiting from the turnover-based exemptions while larger, more established businesses face the full 15 percent rate. Restaurant owners and stakeholders in Sindh are now required to align their accounting and payment systems with the new tax regulations. The SRB has urged all affected businesses to ensure timely compliance to avoid penalties and disruptions in their operations. As the province navigates these fiscal changes, the long-term effects on consumer behavior and the hospitality sector’s growth remain to be seen.

Date: 2024-07-19

Details:

Rizwan Bhatti Published about an hour ago

KARACHI: Fruit and Vegetable exporters urged the federal government for resumption of the fixed tax regime to support the farmers and ensure food security in the country.

Patron-in-Chief Pakistan Fruit and Vegetable Exporters, Importers and Merchants Association (PFVA) Waheed Ahmed has written a letter to Prime Minister Shehbaz Sharif as a follow up of meeting held with exporters earlier this month in Karachi, and highlighted issues, being faced by the fruit and vegetable exporters and also proposed its solution to enhance the exports.

In the letter to PM, Waheed Ahmed pointed out that the supply chain of Fruits and Vegetables is highly disorganized and exporters purchase Fruits & Vegetables from third parties, which mainly don’t even have their bank account. In addition, the growers, mostly smaller having agriculture land up to 25 acres don’t have bank accounts.

Accordingly, in any case, exporters have to pay to the growers through cash cheque, which either they get enchased themselves or pass on to someone to whom they owe payments. While, the thousands of contractual and seasonal labour, engaged for packing the export consignments of Kinnow, Mango, Onion & Potato, are also paid wages in cash.

In this situation it would be impossible for the exporters to provide money trail, while submitting Income Tax returns. Therefore, PFVA has proposed that a new “advance tax” shall be abolished and the fixed tax regime shall continue to support the export sector.

He mentioned that R&D is the need of hours but totally ignored in the budget. Pakistan’s Kinnow exports significantly dropped from $220 million to $110 million. Sufficient funds are required for R&D to develop new varieties like seedless Kinnow, improve quality and enhance the per acre yield production.

Waheed mentioned that the change of climate is emerging as big challenge for the export sector and has already impacted on production (yield/acre) of Kinnow and mango and thus food security will assume a national issue in near future if serious efforts are not made right now.

As a result of this impact, farmers will not be able to get good prices for their efforts and thus they may lose the interest in growing fruits and vegetables leading to deepening issues of food security. It is therefore imperative to have some funds in the budget for climate change, he requested. As China has made outstanding progress in agriculture development, Pakistan must benefit from Chinese expertise in the horticulture sector to enhance the exports, he suggested.

He has informed that the Fruits & Vegetables sector has shown good progress by enhancing its exports and strongly anticipates multiplying the existing export volume to manifolds provided the government restore the fixed tax regime for the exports sector and allocate sufficient funds for R&D. The export of this sector may drop significantly if the suggestions given by the exporters are not taken seriously and prompt action initiated accordingly”, he warned.

PFVA has urged the Prime Minister to take these issues on high priority and initiate necessary actions for future growth of this sector having tremendous export potential.

Date: 2024-07-19

Details:

Zaheer Abbasi Published about 2 hours ago

ISLAMABAD: Prime Minister Shehbaz Sharif has directed the Law Division to increase the number of Appellate Tribunals to 100 for speedy disposal of tax cases, involving Rs3.2 trillion, besides an increase in the number of Appellate Tribunals in Customs cases.

The prime minister issued these directives during a review meeting regarding reforms and digitisation in the Federal Board of Revenue (FBR) presided over by him on Thursday.

Sharif has also directed to improve the tax refund system after he was informed that Rs800billion fraud was caught in tax refunds during the last four months.

The prime minister further directed to prepare a dashboard for evaluating the performance of Tax Appellate Tribunals.

He said that no delay in payment of sales tax refunds would be tolerated and directed that an immediate strategy should be made for the return of illegal refunds made in the past regarding sales tax.

The meeting was briefed about an eight-week digitisation process being supervised by McKinsey, a consultant of international repute. The premier was informed that positive results of FBR digitisation have started to emerge.

The meeting was informed that 83,579 tax-related cases worth Rs3.2 trillion are pending in various courts and tribunals and various steps have been taken to resolve tax cases by the current government so far. The meeting was further told that during the last four months, 63 cases worth about Rs44 billion have been disposed of by various courts and4.9 million taxpayers have been identified by using modern technology. The premier directed that of these 4.9 million people, the rich and wealthy should be brought into the tax net on a priority basis and no additional burden should be placed on the poor.

The meeting was informed that from April 1, 2024, 150,000 retailers have been registered through the FBR (trader-friendly) Tajir-Friendly mobile phone application.

The prime minister directed that consultation with retailers should be continued to make this system more efficient.

He also directed to fully digitise Fraud Detection and Investigation Department of FBR and wanted to formulate a strategy for bringing all ongoing reform projects in FBR under a centralised system. He directed to hire the latest technology and best manpower regarding digitisation of FBR and assured that there would be no delay in providing funds for upgrading the customs system but the FBR should immediately come up with a strategy for software design and implementation of the new system.

The prime minister also directed to submit proposals regarding reforms in the Pakistan Revenue Automation Authority (PRAL).

The prime minister was told that the implementation of the Integrated Transit Trade Management System (ITTMS) project to start from October 2024 and under ITTMS, one window facilitation centres of international standard are being established at the Pak-Afghan borders of Torkham and Chaman.

He was further informed that preparation of the Customs Automated Entry-Exit System (AEES) has been initiated and AEES will be a state-of-the-art scanning technology based system that will be linked to web-based One Customs and Pakistan Single Window.

The meeting was informed that initially, AEES will be implemented at all four ports of Karachi, airports of Karachi, Multan and Peshawar and the prime minister directed that to also implement the AEES system in Gwadar port.

The meeting was told that for the convenience of taxpayers, a single sales tax return system is being introduced with implementation from the telecom sector. The FBR will be connected with revenue authorities across the country through a single sales tax.

The prime minister directed that a single sales tax system to be implemented for every taxpayer by October 2024. The prime minister deplored unnecessary delay in many projects of FBR regarding reforms is very unfortunate.

The meeting was attended by the Federal Ministers for Economic Affairs Ahad Khan Cheema, Finance and Revenue Mohammad Aurangzeb, Law and Justice Azam Nazeer Tarar, Information and Broadcasting Attaullah Tarar, Minister of State for Finance Ali Parvez Malik, and Deputy Chairman Planning Commission Jahanzeb Khan.

Prime Minister’s Coordinator Rana Ehsan Afzal, Chairman FBR Malik Amjad Zubair Tiwana and relevant senior government officials also participated in the meeting.

Date: 2024-07-18

Details:

July 18, 2024

Islamabad, July 18, 2024 – Prime Minister Shehbaz Sharif disclosed today that a massive tax refund fraud amounting to Rs 800 billion has been uncovered over the past four months, highlighting the success of the Federal Board of Revenue’s (FBR) digital transformation efforts.

Chairing a crucial meeting in Islamabad focused on FBR reforms and digitalization, Prime Minister Shehbaz emphasized the positive impact of these measures on the tax refund system, as reported by Radio Pakistan. He pledged further improvements to ensure efficiency and transparency. “Reforms within the FBR are pivotal in boosting revenue,” he stated during the session.

Expressing concern over delays in implementing crucial reform projects, Prime Minister Shehbaz lamented the setbacks and urged swift action to address pending tax-related cases. The meeting revealed that a staggering 83,579 cases involving Rs 3.2 trillion are currently pending in various courts and tribunals across the country. Recent efforts under the current administration have resolved 63 cases amounting to Rs 44 billion.

Advanced technology has played a pivotal role in identifying 4.9 million potential taxpayers capable of contributing to the national exchequer. Prime Minister Shehbaz instructed authorities to prioritize bringing these individuals into the tax net without imposing additional burdens on the less privileged.

Highlighting recent achievements, officials reported that 150,000 retailers have been registered via a trader-friendly mobile application since April. Prime Minister Shehbaz emphasized ongoing consultations with retailers to enhance the system’s efficiency. He further directed the expansion of appellate tribunals to 100, aimed at expediting case resolutions, particularly in customs-related matters.

In a bid to strengthen oversight and enforcement, Prime Minister Shehbaz called for the full digitalization of the Fraud Detection and Investigation Department within the FBR. He stressed the necessity of centralizing ongoing reform initiatives under a unified framework to streamline operations and enhance accountability.

As the government intensifies efforts to combat financial misconduct and bolster revenue streams, Prime Minister Shehbaz underscored the imperative of maintaining transparency and efficiency across all levels of tax administration. The revelations from today’s meeting mark a significant step forward in the government’s commitment to fiscal integrity and economic stability

Date: 2024-07-17

Details:

FBR Issues Tax Rates for Business Individuals and AOPs

July 17, 2024

Karachi, July 17, 2024 – The Federal Board of Revenue (FBR) has announced the new tax rates for business individuals and Association of Persons (AOPs) as per the amendments made through the Finance Act, 2024. These updated rates are effective from July 1, 2024, and are applicable for the tax year 2025.

According to the FBR, the revised tax rates apply to the income of every individual and AOP, excluding salaried individuals. This amendment aims to bring more clarity and fairness to the taxation process for non-salaried entities and to ensure equitable tax collection from diverse income groups.

The FBR said the tax structure is designed to be progressive, with higher income brackets being taxed at higher rates. The details are as follows:

• Taxable income up to Rs. 600,000 will not be taxed, maintaining a 0% rate.

• For income exceeding Rs. 600,000 but not surpassing Rs. 1,200,000, a 15% tax rate will be applied to the amount exceeding Rs. 600,000.

• Income between Rs. 1,200,001 and Rs. 1,600,000 will incur Rs. 90,000 plus 20% of the amount exceeding Rs. 1,200,000.

• Earnings from Rs. 1,600,001 to Rs. 3,200,000 will be taxed at Rs. 170,000 plus 30% of the amount exceeding Rs. 1,600,000.

• For income between Rs. 3,200,001 and Rs. 5,600,000, the tax rate is Rs. 650,000 plus 40% of the amount exceeding Rs. 3,200,000.

• Income above Rs. 5,600,000 will attract a tax of Rs. 1,610,000 plus 45% of the amount exceeding Rs. 5,600,000.

An additional provision has been made for AOPs that are professional firms prohibited from incorporating by any law or the rules of their regulating body. For these AOPs, the maximum tax rate, which is 45% for other entities, will be reduced to 40%.

The FBR emphasized that these changes are part of a broader strategy to enhance the transparency and efficiency of the tax system in Pakistan. The aim is to ensure that high-earning business individuals and AOPs contribute a fair share of taxes, thereby supporting the country’s fiscal stability and development goals.

Tax professionals have highlighted the importance of understanding these new rates and the impact they will have on tax planning for business individuals and AOPs. The FBR has provided detailed guidelines and resources on its website to assist taxpayers in navigating these changes effectively.

This move by the FBR is seen as a crucial step towards creating a more balanced and robust tax regime in Pakistan, fostering compliance and ensuring a fair distribution of the tax burden across different income groups.

Date: 2024-07-17

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July 17, 2024

Karachi, July 17, 2024 – The Federal Board of Revenue (FBR) has officially announced the amended salary tax rates as enacted through the Finance Act, 2024. These revisions are set to take effect from July 1, 2024, and will be applicable for the tax year 2025.

According to sources within the FBR, the new tax rates target individuals whose income from salary constitutes more than 75 percent of their total taxable income. This strategic amendment aims to create a more structured and equitable taxation framework.

The revised tax rates are structured as follows:

• For individuals with a taxable income up to Rs. 600,000, the tax rate remains at 0%.

• For those earning between Rs. 600,001 and Rs. 1,200,000, a 5% tax is imposed on the amount exceeding Rs. 600,000.

• Individuals with taxable incomes between Rs. 1,200,001 and Rs. 2,200,000 will be taxed Rs. 30,000 plus 15% of the amount exceeding Rs. 1,200,000.

• For taxable incomes ranging from Rs. 2,200,001 to Rs. 3,200,000, the tax rate is set at Rs. 180,000 plus 25% of the amount exceeding Rs. 2,200,000.

• Those earning between Rs. 3,200,001 and Rs. 4,100,000 will face a tax rate of Rs. 430,000 plus 30% of the amount exceeding Rs. 3,200,000.

• For individuals with taxable incomes exceeding Rs. 4,100,000, the tax imposed is Rs. 700,000 plus 35% of the amount exceeding Rs. 4,100,000.

These changes are part of a broader initiative by the FBR to streamline tax collection and ensure a fair distribution of tax burdens. By targeting high-income earners and those with significant salary-based income, the government aims to enhance revenue collection while promoting economic equity.

Tax experts have noted that these amendments reflect the government’s ongoing efforts to reform the taxation system. The focus is on increasing compliance and reducing tax evasion, which has historically plagued the country’s fiscal structure. The updated tax rates are expected to bring in substantial revenue, which will be crucial for funding various development projects and public services.

The FBR has urged all taxpayers to familiarize themselves with the new rates and ensure timely compliance. Detailed guidelines and explanatory notes have been made available on the FBR’s official website to assist taxpayers in understanding and implementing these changes.

As the tax landscape continues to evolve, individuals and businesses are advised to stay informed and seek professional advice to navigate the complexities of the new taxation regime effectively. The implementation of these revised tax rates marks a significant step towards achieving a more balanced and efficient tax system in Pakistan.

Date: 2024-07-16

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July 16, 2024

ISLAMABAD, July 16, 2024 (PkRevenue.com) – The Federal Board of Revenue (FBR) has announced a significant milestone, revealing that the number of active taxpayers for the tax year 2023 has surpassed 5 million.

This development, reported in the weekly Active Taxpayers List (ATL) updated up to July 15, 2024, marks an increase of 80,000 new active taxpayers in just a week.

The surge represents a remarkable rise from the initial ATL for 2023, which listed 3.35 million active taxpayers when it was first launched on March 1, 2024. The FBR attributes this growth to a series of strategic initiatives designed to enhance tax compliance across Pakistan.

A key driver of this achievement has been the FBR’s robust campaign targeting non-filers. Central to this effort was the threat to block mobile phone SIM cards of individuals who failed to file tax returns. Implemented as part of the 2024-25 budget measures, this approach has proven effective in compelling previously non-compliant taxpayers to fulfill their fiscal responsibilities.

A pivotal moment in this compliance drive was the issuance of Income Tax General Order No. 1 on April 29, 2024. This directive mandated telecommunications companies to block SIM cards of individuals who had not filed income tax returns and wealth statements for 2023. The impact was immediate and significant, affecting over half a million non-filers and serving as a compelling incentive for compliance.

The FBR’s stringent stance forms a critical component of its broader strategy to expand Pakistan’s tax base, essential for improving the country’s tax-to-GDP ratio – a key indicator of fiscal health and economic efficiency. By linking tax compliance with mobile connectivity, the FBR has effectively incentivized taxpayers to regularize their status. Being on the ATL not only avoids SIM card disruptions but also qualifies individuals for reduced tax rates on financial transactions, further encouraging compliance.

Despite these advancements, challenges persist in achieving comprehensive tax coverage relative to Pakistan’s population of 240 million. To tackle these issues, the FBR continues to ramp up awareness campaigns, streamline tax procedures, and bolster digital infrastructure to facilitate easier compliance.

FBR officials emphasize that proactive measures are crucial in fostering a robust compliance culture, vital for Pakistan’s fiscal stability and sustainable economic growth. By embedding such a culture, the FBR aims to create a predictable environment conducive to economic planning and development.

With the ATL now accessible to the public, transparency is upheld, promoting greater participation in the tax framework and fostering citizen trust in a fair taxation system where compliance yields tangible benefits.

The surge in active taxpayers underscores Pakistan’s progress in tax compliance, driven by strategic policies and regulatory measures aimed at broadening the tax base and ensuring fiscal discipline in the nation’s economic landscape.

Date: 2024-07-16

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July 16, 2024

ISLAMABAD, July 16, 2024 – The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to conduct a detailed withholding tax (WHT) audit of commercial banks to address potential revenue leakage.

In a recent order issued by the FTO office, the FBR has been advised to replicate the audit exercise conducted by the Large Taxpayer Office (LTO) Lahore across other field formations that oversee commercial banks in Pakistan. This initiative aims to identify and rectify gaps within the banks’ withholding tax systems.

The FTO emphasized the importance of a thorough analysis and review of the current withholding tax monitoring mechanisms. It recommended that the FBR suggest corrective measures to maximize revenue generation. One significant recommendation includes providing field formations with access to banks’ software for real-time monitoring and corrective actions. Implementing this recommendation might require amendments to existing laws and regulations.

The FTO highlighted the critical need for improvements in the software used by banks for monitoring purposes. The department should have access to this software and conduct periodic detailed audits to detect and correct any errors or deficiencies. Enhancing the banks’ software would significantly streamline the monitoring mechanisms, making the process more efficient and effective.

Additionally, the FTO suggested that the FBR issue clarifications for common errors or mistakes detected during withholding audits. This would benefit all taxpayers and help ensure compliance within 90 days.

Contrary to the department’s assertion, the FTO pointed out that the current strategy for withholding taxes is not sufficiently robust. While conducting audits under section 161 of the Income Tax Ordinance, 2001, for all banks each year might be beneficial in the short term, it is not a sustainable long-term solution. The FTO argued that detailed audits, by their nature, are limited to a small number of cases and serve primarily as a deterrent rather than a significant revenue generator.

Given the vast number of transactions and extensive records, it is impractical for officers to scrutinize each transaction due to time constraints and human limitations. Therefore, the FTO proposed developing an advanced automated system to minimize user errors and enable tax authorities to efficiently and promptly pinpoint discrepancies.

This proposed automated system aligns with best international practices and is essential for ensuring a robust and effective tax compliance framework. The FTO’s recommendations underscore the need for significant advancements in the monitoring and auditing processes of withholding taxes to safeguard revenue and enhance fiscal discipline in Pakistan’s banking sector.

Date: 2024-07-15

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July 15, 2024

Lahore, July 15, 2024 – In a significant move, the Federal Tax Ombudsman (FTO) has clarified the regulations for overseas Pakistanis regarding vehicle importation. The ruling specifies that expatriates can import vehicles under the baggage scheme, transfer of residence scheme, and gift scheme, provided they adhere to a newly enforced two-year interval.

Two-Year Limit and New Safeguards

The decision, delivered by FTO Dr. Asif Mahmood Jah, asserts that overseas Pakistanis can import vehicles only if they haven’t imported, gifted, or received a vehicle in the past two years through the Import Policy Order (IPO) 2022. This interval is designed to prevent the exploitation of import privileges and ensure the system’s integrity.

Addressing Passport Misuse

To tackle the issue of circumventing the two-year limit by obtaining new passports, the FTO has mandated a robust verification system. FTO Advisor Dr. Waqar Ch. Arain announced that the Director of Reforms & Automation in Karachi has been tasked with developing a mechanism to track import history across multiple passports used by the same individual. This measure is intended to close loopholes and enforce compliance.

Background of the Ruling

The ruling follows a complaint against the Chief Collector of Appraisement (South) in Karachi and the Director of Reforms & Automation. The grievance underscored delays in vehicle clearance for overseas Pakistanis and the potential misuse of immigration data. The FTO’s intervention aims to address these concerns and streamline the import process.

Previous System and the Gap

Under the previous system, the Web-Based Customs Management System (WeBOC) restricted the submission of import declarations (GDs) on the same passport number within two years. However, individuals could bypass this restriction by acquiring a new passport, leading to repeated imports within the restricted period.

New Safeguards and Future Implications

The FTO’s directive includes additional checks within the WeBOC system for any new passports presented by importers. These checks ensure that the vehicle importation complies with the two-year limit established by the IPO. The implementation of these safeguards is expected to prevent the misuse of the system and promote fairness.

Overall Impact

This ruling provides crucial clarity for overseas Pakistanis regarding vehicle imports under the specified schemes. The enhanced safeguards within the WeBOC system will prevent abuse and ensure a more equitable process. This measure is anticipated to streamline operations and foster trust in the regulatory framework governing vehicle imports.

Date: 2024-07-14

Details:

Recorder Report Published July 14, 2024

LAHORE: A delegation of traders, led by Khalid Pervez, visited the Lahore Chamber and met with President of Lahore Chamber, Kashif Anwar. The delegation expressed their concerns about the changes in the sales tax system introduced in the Finance Act.

The participants included President of Lahore Stationery Association Urdu Bazaar Jameel Fazil, Secretary Information Mahboob Iqbal, Chairman Muhammad Raza, Vice President Abdullah Khan, and others.

The delegates stated that the changes introduced in the current Finance Act would have a significant impact on businesses and business costs, leading to increased prices of these items. The business community has strongly protested and demanded that educational materials be exempted from taxes to avoid an increase in educational expenses.

They mentioned that imposing taxes on educational materials would significantly increase educational costs, placing an additional financial burden on students and parents.

The delegates noted that business conditions are already under pressure, and sales rates have dropped to very low levels. If such taxes are imposed, it will become challenging to conduct business, forcing many traders to close their businesses.

It is noteworthy that the Finance Act 2024 has introduced significant changes in the sales tax system, affecting various stationery items. Previously exempt items under the Sixth Schedule, such as writing ink, drawing ink, erasers, exercise books, pencil sharpeners, geometry boxes, pens, markers, and pencils (including colored pencils), will now be subject to a 10% sales tax. Additionally, extra taxes will be applied under sections 236G and 236H.

The tax deduction rate for filers will be 0.5%, while non-filers will be subject to a 2.5% tax. Those with a tax deduction amount exceeding PKR 100,000 will be required to register under the Sales Tax Act 1990. Filers can make purchases up to PKR 20 million without sales tax registration, while the limit for non-filers is PKR 4 million.

LCCI President Kashif Anwar stated that the Lahore Chamber stands by its business community in every way and is raising the voice of traders to the corridors of power. He emphasized that it is the state’s responsibility to maintain health, education, and law and order, and that providing maximum facilities to the business community is essential for economic development. He acknowledged that the country is under economic pressure but urged the government to reconsider the tax on education and withdraw it immediately.

Kashif Anwar appreciated the Punjab government’s efforts for students but appealed for making education more affordable. He stressed that children cannot progress without education, and while focusing on skill development and increasing literacy rates, such taxes and laws will impact segments of society already burdened by inflation.

The President of Lahore Chamber highlighted that the ongoing wave of inflation in the country has significantly increased the costs of electricity, gas, essential items, and business operations. He stated that the traders demand a review of these taxes on education and that the system should continue as before to provide relief to the business community during these challenging times. He assured that he would raise the traders’ voices on every forum.

Date: 2024-07-14

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July 14, 2024

Karachi, July 14, 2024 – The recently enacted Finance Act 2024 has introduced significant penalties for failing to file income tax returns on time. This stringent measure aims to enforce compliance and boost revenue collection.

Under the new amendment to the Income Tax Ordinance, 2001, the Finance Act 2024 outlines severe monetary penalties for individuals and entities that do not submit their income tax returns as required by sub-section (3) of Section 117 of the Income Tax Ordinance, 2001, within the specified deadline.

According to the amendment, the penalty for late filing will be the greater of:

1. 0.1% of the tax payable for the respective tax year for each day of default, or

2. Rs 1,000 per day of default.

Additionally, the Finance Act 2024 stipulates a minimum penalty threshold to ensure that even minor delays incur substantial fines. For individuals, the minimum penalty is set at Rs 10,000, while for all other cases, including businesses and corporations, the minimum penalty is Rs 50,000.

This new regulation underscores the government’s commitment to tightening tax compliance and ensuring timely submission of tax returns. The hefty penalties are designed to serve as a deterrent against late filing, encouraging taxpayers to adhere to deadlines more diligently.

The Federal Board of Revenue (FBR) has urged taxpayers to take note of these new penalties and ensure timely filing of their tax returns to avoid hefty fines. The FBR has also announced that it will launch an awareness campaign to educate taxpayers about the new penalties and the importance of timely compliance.

Tax experts have advised taxpayers to be proactive in their tax planning and return filing to avoid facing these significant penalties. They recommend early preparation and submission of tax returns to prevent any last-minute issues that could result in penalties.

The implementation of the Finance Act 2024 is part of a broader strategy by the government to enhance tax compliance, reduce evasion, and increase the tax base. By imposing these stringent penalties, the government aims to create a culture of timely tax compliance and strengthen the country’s financial position.

As the new fiscal year progresses, taxpayers are advised to stay informed about their obligations and the implications of the Finance Act 2024 to ensure they remain in compliance with the updated tax laws.

Date: 2024-07-14

Details:

July 14, 2024

Karachi, July 14, 2024 – Pakistan has introduced measures through the Finance Act 2024 to capture significant economic presence by non-resident entities in Pakistan, aiming to close tax avoidance loopholes and broaden the tax base.

Tax experts at KPMG Taseer Hadi & Co. explain that previously, a non-resident’s business income was considered Pakistan-sourced if it was linked to any ‘business connection in Pakistan.’ The new law expands this definition to include ‘significant economic presence.’

Significant economic presence is defined in the Act as follows:

1. Transactions involving goods, services, or property carried out by a non-resident with any person in Pakistan, including the provision of data or software downloads, if the aggregate payments during the tax year exceed a prescribed amount set by the Federal Board of Revenue (FBR).

2. Systematic and continuous business solicitation or digital interaction with users in Pakistan, regardless of:

o Whether the transaction agreements are signed in Pakistan,

o Whether the non-resident has a physical presence or business operations in Pakistan,

o Whether the services are physically rendered in Pakistan.

Only the income attributable to these specified transactions or activities will be deemed to arise from a business connection in Pakistan.

“The new provisions are a significant step towards capturing the digital and economic activities of non-residents who have substantial interactions with Pakistan,” noted a KPMG expert. “This change ensures that non-residents contributing economically through digital means are brought into the tax net, aligning Pakistan’s tax framework with global trends in digital taxation.”

The Act aims to address the challenges posed by digital businesses and their tax obligations. By broadening the definition of business connections, the government seeks to ensure fair tax contribution from non-resident entities benefiting from the Pakistani market.

The introduction of these rules reflects Pakistan’s commitment to strengthening its tax regime and curbing tax avoidance practices. It aligns with international efforts to address the tax challenges posed by the digital economy, ensuring that non-resident businesses engaging with Pakistani users or earning significant revenue from the country contribute their fair share of taxes.

As Pakistan adapts to the evolving global tax landscape, these measures mark a proactive approach in enhancing tax compliance and revenue collection. Non-resident businesses are now required to reassess their operations and tax obligations in light of these new regulations, ensuring alignment with Pakistan’s tax laws.

The Finance Act 2024 represents a crucial step in modernizing the country’s tax system, emphasizing the importance of economic presence in determining tax liabilities and fostering a fairer taxation environment.

Date: 2024-07-14

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July 14, 2024

Karachi, July 14, 2024 – The Federal Tax Ombudsman (FTO) has uncovered a significant problem with the withholding tax system for leased vehicles in Pakistan. This issue can lead to double taxation and denial of rightful tax credit for individuals and businesses leasing cars.

The Problem: Wrongful Credit and Double Tax

The crux of the issue lies in the way withholding tax, a form of advance tax, is applied to car purchases through banks or leasing companies. While the tax is deducted at the source (the car manufacturer) and deposited with the government, the credit for this tax is mistakenly given to the leasing company, not the actual lessee (the person leasing the car).

This creates a double whammy for the lessee:

• Denied Credit: They don’t receive the tax credit they’re entitled to against their annual tax liability.

• Double Taxation: When the lease ends and they go to register the car, the registration authority may charge them the withholding tax again, as they don’t recognize the initial payment made through the leasing company.

The FTO’s Investigation and Findings

The FTO launched an investigation based on observations of discrepancies in tax credit records. They found that car manufacturers were depositing the withholding tax in the name of the leasing company, even though the lessee ultimately bears the financial burden. This practice, according to the FTO, constitutes “maladministration” by the Federal Board of Revenue (FBR), the national tax agency.

FTO Recommendations for FBR

To address this issue, the FTO has recommended a two-pronged approach for the FBR:

1. Credit to the Lessee: Establish a mechanism to ensure the withholding tax credit goes to the lessee’s account. This can involve requiring manufacturers to record and report lessee details along with tax payments. Additionally, car manufacturers should be mandated to provide a certificate to the lessee documenting the tax paid in their name. This certificate would be accepted by the registration authority as proof of payment, preventing double taxation.

2. Digital Integration: Implement a digital system that integrates data from car manufacturers, leasing companies, and registration authorities. This system would verify the withholding tax payment and ensure it’s credited to the correct lessee.

Impact and Future Steps

The FTO’s findings and recommendations aim to streamline the tax system for leased vehicles, ensuring fairness and preventing financial burden for lessees. The FBR’s response to these recommendations will be crucial in determining the effectiveness of the proposed solutions.

This situation also highlights the importance of clear communication and coordination between different entities involved in the car purchase and registration process.

Date: 2024-07-14

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July 14, 2024

Karachi, July 14, 2024 – Officials of the Federal Board of Revenue (FBR) has said that the export of services will continue to be subject to the final tax regime in Pakistan.

This decision comes despite significant changes introduced by the Finance Act, 2024, which shifted the export of goods from the final tax regime to the normal tax regime.

According to the FBR officials, a final tax rate of 0.25% applies to exports of computer software, Information Technology (IT) services, and IT-enabled services by individuals and entities registered with the Pakistan Software Export Board (PSEB). This measure aims to encourage the growth of Pakistan’s burgeoning IT sector while maintaining a streamlined tax process for these exports.

For other service exports, a final tax rate of 1% is applicable. The FBR has specified several categories under this regime, which include:

• Services or Technical Services Rendered Outside Pakistan or Exported from Pakistan: These are services provided by Pakistani entities to foreign clients, either conducted overseas or delivered from within Pakistan.

• Royalty, Commission, or Fees: This includes income derived by resident companies from foreign enterprises as consideration for the use of intellectual property or proprietary knowledge. Such payments cover a wide range of intangible assets, including patents, designs, secret processes, formulas, and other industrial, commercial, or scientific information.

• Construction Contracts Executed Outside Pakistan: Companies engaged in construction projects outside the country fall under this category, reflecting Pakistan’s growing role in international construction and engineering services.

• Foreign Commission Due to an Indenting Commission Agent: This pertains to commissions earned by Pakistani agents for facilitating transactions between foreign buyers and sellers.

• Other Services Rendered Outside Pakistan: The FBR also includes other service exports as notified by the board, ensuring comprehensive coverage of various service sectors.

The decision to maintain the final tax regime for service exports underscores the government’s strategy to provide tax certainty and reduce compliance burdens for exporters. By keeping the tax rates relatively low and straightforward, the FBR aims to foster a conducive environment for service exporters to thrive in the global market.

Officials emphasized that these tax measures are part of a broader effort to enhance Pakistan’s export competitiveness and attract foreign investment. The IT sector, in particular, is seen as a critical driver of economic growth, and the 0.25% final tax rate for IT exports is expected to bolster the industry’s expansion.

The announcement reaffirms its commitment to supporting the export sector while ensuring a fair and efficient tax system. As Pakistan continues to integrate more deeply into the global economy, these tax policies will play a pivotal role in shaping the country’s export landscape.

Date: 2024-07-12

Details:

Sohail Sarfraz Published 45 minutes ago

ISLAMABAD: Tax advisers have approached the Federal Board of Revenue (FBR) chairman against the arbitrary tax demands and ex-parte orders passed by the Inland Revenue officers against the business community till June 30, 2024.

In this regard, Javed Iqbal Qazi, advocate Supreme Court of Pakistan has written a letter to the FBR chairman here on Thursday.

According to the tax adviser, Inland Revenue Officers have raised arbitrary tax demands and issued ex-party orders to meet assigned targets by June 30, 2024. These cases are related to recovery, demands, audit and cases remanded back from Commissioner Appeals and Appellate Tribunals etc.

“We have been informed by our various members throughout the country that ex-parte orders have been passed by various Inland Revenue officers in the month of June wherein the notices were duly complied submitting the response manually after obtaining acknowledgement and also e-filed through e Portal,” he said.

On examination of the orders, it has been found that the assessing officers did not consider the official replies filed either through IRIS or manually and passed ex-party orders on the ground that no response have been submitted; thus, creating huge tax demand.

The FBR chairman should call report from all the Chief Commissioners of Inland Revenue of Pakistan regarding ex-party orders passed by the Inland Revenue Officers u/s 122(5) or (5A) of the Income Ordinance and take appropriate action where the reply has been submitted but orders passed ex-party in order to create arbitrary demand. This will surely improve the working of FBR and create confidence between the taxpayers and the FBR.

Inland Revenue officers are not performing their duties on merit but are raising arbitrary demands as per their whims, conjecture and surmises and the taxpayers are being punished and merit is being denied to them, Qazi stated.

The FBR chairman should take appropriate measures for the improvement of the FBR working and better collection of tax so as to develop confidence with the taxpayer.

Date: 2024-07-12

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July 12, 2024

Islamabad: The Federal Board of Revenue (FBR) is set to announce a new, simplified tax system tailored for traders, shopkeepers, and retailers in 42 Pakistani cities. This initiative aims to replace the existing complex square-footage based tax system with a more straightforward flat tax rate determined by shop location and category.

Under the proposed plan, the FBR has developed valuation tables for markets in these cities, categorizing shops into three groups: high-end (prime locations), medium-sized, and small (less affluent areas). Each category will have a corresponding indicative income level, an estimated annual tax amount, and a fixed monthly tax installment. This approach is designed to make tax compliance simpler for smaller businesses.

For example, a trader operating in a market where the indicative annual income is Rs. 600,000 would be required to pay an annual tax of Rs. 1,200, which translates to a monthly installment of Rs. 100. This move from a square-footage-based system to a location-based tax is intended to alleviate the burden on small business owners by providing a clearer and more manageable tax structure.

The FBR has shared draft calculations with trader representatives in all 42 cities and scheduled meetings for today, July 12th, between Regional Tax Offices (RTOs) and trader representatives to discuss the proposed tax amounts. These discussions will focus on the indicative income levels and the estimated monthly installments.

Following these meetings, the RTOs and trader representatives will finalize their recommendations and submit them to the FBR board. The FBR is expected to issue final notifications outlining the new system by early next week. This new tax system is part of the FBR’s broader efforts to streamline the tax filing process for small businesses, making it more transparent and easier to comply with.

The implementation of this location-based flat tax system represents a significant shift in Pakistan’s tax policy. It is designed to reduce the administrative burden on traders and retailers, who have long struggled with the complexities of the current system. By basing tax rates on shop location and category, the FBR aims to create a more equitable tax environment that reflects the actual earning potential of businesses in different areas.

In summary, the FBR’s proposed tax system promises to simplify tax compliance for traders and retailers across 42 cities in Pakistan. With the upcoming discussions and finalizations, this initiative could pave the way for a more efficient and manageable tax system that benefits both the government and the business community. The final implementation is keenly awaited and is expected to bring about significant positive changes in the tax landscape for small businesses in Pakistan.

Date: 2024-07-11

Details:

Recorder Report Published July 11, 2024

PESHAWAR: The Khyber Pakhtunkhwa Revenue Authority (KPRA) has successfully collected Rs41.77 billion against the target of Rs.35 billion assigned to it by the provincial government for the financial year 2023-24.

Despite the overall economic situation, the Authority has shown a growth of 37% in the fiscal year 2023-24 as compared to the collection of the financial year 2022-23 in which the total collection was Rs30.6 billion.

It is worth mentioning that KPRA’s revenue collection increased fourfold in the past five years, according to a statement here on Wednesday.

As per the details shared by the KPRA media wing, the Authority has collected Rs36 billion from the sales tax on services, and Rs5.77 billion from the Infrastructure Development Cess (IDC).

The Authority worked on broadening its tax net and took its registered taxpayers’ count to more than 22,800 by the end of this year, which also played a key role in the revenue collection growth.

Director General KPRA Fouzia Iqbal appreciated the efforts of the KPRA staff for achieving their targets. She thanked the Chief Minister Khyber Pakhtunkhwa Ali Amin Gandapur and Advisor to CM on Finance Muzzammil Aslam for their support and guidance which helped the KPRA to achieve its targets. She also paid tribute to the taxpayers of KPRA for their trust and compliance with KPRA. “Taxpayers are our stakeholders; we value and appreciate their support and contribution. Without their support and trust the target could not have been achieved. We expect the same level of compliance and assistance in the coming years and assure them full support from my team KPRA in making tax payments and its related matters easier for them,” she said.

She also lauded the tireless efforts of the KPRA team in surpassing the targets. “It is a proud moment for all of us that we have not only achieved our targets but surpassed them with a staggering Rs6.7 billion.

It all became possible due to the team efforts,” she said, adding that they are determined to work with the same passion to achieve the targets assigned to KPRA for the year 2022-23.

“If we work with the same dedication and continue with the same approach then I am sure that we will surpass the next year’s target as well and will continue on our path towards making the Khyber Pakhtunkhwa self-reliant,” she said.

Date: 2024-07-11

Details:

July 11, 2024

Prime Minister Shehbaz Sharif chaired a significant meeting on Thursday, focusing on eliminating corruption within Pakistan Customs while enhancing operational efficiency through advanced technology.

Highlighting the critical role of customs in the nation’s economy, Prime Minister Shehbaz stressed the need for comprehensive reforms within the Federal Board of Revenue (FBR) and complete digitization to bolster economic security.

During the session, Prime Minister Shehbaz directed officials to ensure rigorous enforcement of customs duties, utilizing artificial intelligence (AI) and state-of-the-art equipment to streamline operations and eliminate unnecessary obstacles. He underscored the importance of third-party audits to monitor the effectiveness of reform initiatives across the FBR and other relevant departments, advocating for centralized oversight of all projects.

Emphasizing enhanced revenue generation, Prime Minister Shehbaz instructed the establishment of a dedicated project management unit to spearhead reforms within the customs sector. He also emphasized the resolution of issues related to mis-invoicing and under-invoicing, which threaten local industries, urging officials to safeguard Pakistan’s economic interests.

Furthermore, Prime Minister Shehbaz called for the implementation of a robust regulatory framework to govern the operations of the shipping industry, ensuring transparency and efficiency. He specifically highlighted the need for a third-party audit of the web-based one-customs system (WeBOC), pivotal in enhancing customs operations.

During the briefing, officials reported that Pakistan Customs had achieved full automation, integrating modern AI-based systems with the expertise of international consultants to drive reform. Notably, approximately 72.4% of import and export processes were streamlined through the green channel, contributing significantly to operational efficiency. Moreover, Pakistan Customs reported an impressive Rs 240 billion increase in revenue collection through effective valuation controls from July 2023 to June 2024, marking an 80% rise from the previous year.

The meeting was attended by key federal cabinet members including Ahad Khan Cheema, Muhammad Aurangzeb, and Ali Pervaiz Malik, alongside Deputy Chairman of Planning Commission Jahanzeb Khan, Attorney General Mansoor Awan, PM’s Coordinator Rana Ehsan Afzal, Member of National Assembly Barrister Aqeel Malik, and FBR Chairman Zubair Tiwana, among other senior officials.

In conclusion, Prime Minister Shehbaz Sharif’s directives underscored a comprehensive approach to reforming Pakistan Customs, enhancing transparency, and maximizing revenue collection through strategic enforcement and technological innovation. The government’s commitment to combating corruption and promoting economic stability through effective customs management remains steadfast, setting a robust agenda for future reforms in the sector.

Date: 2024-07-10

Details:

July 10, 2024

Karachi, July 10, 2024 – The Federal Board of Revenue (FBR) has responded to concerns raised by taxpayers, businesses, and tax professionals regarding complications arising from SRO 350(I)/2024, a regulation impacting sales tax return filing.

The FBR’s IT Wing issued an official communication addressing specific issues. One major concern involved sales tax returns becoming locked after the filing deadline due to automatic deletion of purchase invoices and input tax. This deletion occurs when corresponding suppliers fail to file their own returns by month’s end.

The FBR clarified that this is not a malfunction caused by SRO 350, but rather an intentional measure to curb the creation and transmission of fake input tax claims, which the regulation aims to prevent. The communication emphasizes, “If the system is auto-deleting the invoices which have corresponding input tax, then it is working correctly. Auto-deletion and recomputed liability shall remain in place even if the supplier files a return after the last day of the month.”

Another point of contention was provisional returns due to non-filing by state-owned gas and electricity companies, Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL). The FBR communication highlights that the Operation Wing addressed this concern through a June 4th, 2024 notification. This notification relaxes the rule that previously made returns provisional solely due to outstanding returns from SNGPL and SSGCL for the same month. The FBR communication requests that this relaxation be applied retroactively.

A third concern involved negative figures in Annexure F (detailing input tax adjustments) caused by automatic invoice deletion. The FBR communication acknowledges that registered persons manually populate consumption figures in Annexure F. To address this, they propose making Annexure F editable after the system removes invoices and input tax, allowing for adjustments to consumption figures.

Finally, the communication tackles the issue of provisional returns for distributors, wholesalers, and retailers dealing with third-schedule items (products where tax is collected from the end consumer). The FBR communication proposes a relaxation where such businesses can file provisional returns claiming input tax on invoices from manufacturers of third-schedule items, even if the manufacturer hasn’t filed their return for the same period. This relaxation would not apply to invoices from other registered persons.

The FBR’s communication aims to clarify the implementation of SRO 350 and address concerns raised by stakeholders. The proposed measures aim to ensure a smoother tax filing process while maintaining the integrity of the system.

Date: 2024-07-10

Details:

July 10, 2024

Lahore, July 10, 2024 The Lahore Tax Bar Association (LTBA) has raised concerns about the challenges faced by businesses in filing sales tax returns following the implementation of a new regulation, SRO 350(I)/2024.

In a letter sent to the Federal Board of Revenue (FBR) Chairman, Malik Amjad Zubair Tiwana, on Wednesday, the Lahore Tax Bar Association highlighted the complexities arising from a rule amendment introduced by SRO 350. The amendment, implemented in March 2024, stipulates that a buyer’s sales tax return is considered provisional until the corresponding seller files their return for the same period by the end of the month.

According to the Lahore Tax Bar Association, this rule creates a domino effect. If a seller fails to file their return, the FBR’s IRIS Portal automatically removes invoices from the buyer’s Annexure A (a section detailing purchases with input tax credit). Consequently, the buyer’s input tax claim, which reduces their overall tax liability, is negatively affected.

The Lahore Tax Bar Association argues that while SRO 350 aims to improve tax compliance, it disrupts the smooth functioning of the supply chain, particularly for businesses that both buy and sell to each other. This can lead to delayed filing of returns, financial strain, and operational inefficiencies.

“It’s crucial to address this promptly to ensure tax compliance doesn’t hinder business operations,” the Lahore Tax Bar Association emphasized.

The association further highlighted a technical issue with the IRIS Portal. The system doesn’t allow adjustments to Annexure A and F (sections detailing purchases and input tax adjustments) beyond the provisional filing period. This means any unsubmitted purchase invoices are automatically removed from Annexure A at month’s end, reducing the overall purchase value and consequently the input tax adjustments claimable in Annexure F.

This technical glitch creates a negative net purchase value in Annexure F, while the sales value remains unchanged. This discrepancy prevents the filing of final returns and triggers error messages within the IRIS Portal.

The Lahore Tax Bar Association reports that attempts to resolve the issue at local tax offices have been unsuccessful. Tax authorities are reportedly demanding payment of inflated tax liabilities generated by the system, despite a significant portion of these businesses dealing in third-schedule products, where sales tax is collected from the end consumer and eventually refunded.

The Lahore Tax Bar Association urged Chairman Tiwana for immediate intervention. They argue that current regulations place a heavy burden on compliant businesses due to the non-compliance of others, which contradicts legal principles and fairness.

“Taking timely action to rectify this situation would be greatly appreciated and alleviate the hardships faced by taxpayers grappling with the implications of SRO 350(I)/2024,” the Lahore Tax Bar Association concluded in their letter.

Date: 2024-07-10

Details:

July 10, 2024

Karachi, July 10, 2024 – The Inland Revenue Service Officers Association (IRSOA) has vehemently condemned the recent actions of the Federal Board of Revenue (FBR) regarding the transfer of senior officers to an administrative pool.

On Wednesday, the IRSOA issued a statement expressing strong disappointment with the FBR’s posting notification. The notification assigned 16 senior Inland Revenue Service (IRS) Commissioners to the administrative pool, a move the IRSOA considers particularly unjust given these officers’ exceptional contributions to surpassing budgetary targets and revenue collection.

The IRSOA highlighted the significant efforts of IRS officers in exceeding the fiscal year 2023-2024’s revenue target of Rs. 9200 billion, achieved despite a challenging economic climate and political environment. The statement emphasizes that the FBR’s decision to transfer these officers without proper justification has not only demotivated the affected individuals but also casts serious doubt on the fairness and impartiality within the organization.

The association argues that these officers have played a crucial role in maintaining fiscal stability and ensuring that the government meets its revenue goals. Their reassignment to administrative roles is viewed as a punitive measure that undermines their hard work and dedication.

The IRSOA strongly condemns this action, which has caused considerable distress and demotivation among field-level officers. The association emphasizes that established procedures exist for addressing any alleged wrongdoing against an officer through disciplinary proceedings. Any actions taken outside of these established procedures constitute a violation of fundamental rights.

“We urge the authorities to carefully re-evaluate this decision and ensure that our officers are treated fairly,” said the IRSOA Secretary. “Their dedication and hard work deserve recognition, not baseless criticism and demotion.”

The association’s statement further criticized the lack of transparency in the decision-making process, asserting that such actions could have long-term negative implications for the morale and efficiency of the revenue service. The IRSOA called on the FBR to provide a clear rationale for the transfers and to engage in dialogue with the affected officers to address their concerns.

The IRSOA’s condemnation of the FBR’s actions highlights the need for fair and transparent practices within the organization. The association’s call for a re-evaluation of the decision underscores the importance of recognizing and rewarding the hard work of IRS officers, who play a vital role in the nation’s economic stability.

Date: 2024-07-10

Details:

Sohail Sarfraz Published about 4 hours ago

ISLAMABAD: The Directorate General of Customs Valuation Karachi has revised customs values on the import of solid surface materials or solid surface sheets structure from China, Korea and USA.

The imported products are Counter Top Sheets/Artificial Stone Sheets/Artificial Marble Sheets/Solid Surface Sheets/Cast Acrylic Sheets of Acrylic Polymers & Unsaturated Polyesters.

According to the ruling (1891 of 2024) issued by the directorate, the customs values were determined vide Valuation Ruling No.1679/2022. A complaint in Federal Tax Ombudsman (FTO) was filed and accordingly Directorate General of Customs Valuation was directed to dispose of the complainant’s application after providing him the opportunity of hearing for the determination of customs values of Counter Top Sheets/Artificial Stone Sheets/Artificial Marble Sheets/Surface Sheets/Cast Acrylic Sheets of Acrylic Polymers & Unsaturated Polyesters. Therefore, an exercise was initiated by the Directorate to determine the same.

During the meeting, the representatives of M/s Engineering Services argued that their imported goods i.e. Counter Top Sheets/Artificial Stone Sheets/Artificial Marble Sheets/Solid Surface Sheets of Unsaturated Polyesters do not fall under the ambit of existing HS codes as mentioned in the VR on the basis of constituent raw material. Moreover, they contested that the market prices of their goods (composed of significant percentage of unsaturated polyesters primarily) are much lower than those made up of Acrylic polymers. Therefore, the classification needs modification keeping in view the composition of goods in question. Representative of M/s Prisma Tech (Pvt) Ltd; a local manufacturer of the said product also agreed with the same. For this purpose, Ninety days’ data has also been retrieved and the same has been scrutinized. Subsequently, market inquiry has been conducted and examined.

For the assessment of duties and taxes, the new customs values have been determined on the import of Counter Top Sheets/Solid Surface Sheets/Artificial Marble Sheets/Artificial Stone Sheets/Cast Acrylic Sheets of Acrylic Polymers (Corian) for assessment of duties and taxes at the import stage.

Date: 2024-07-09

Details:

Recorder Report Published about an hour ago

KARACHI: Malik Khuda Bakhsh, Convener of the FPCCI’s Energy Standing Committee and a senior leader in the petroleum and CNG sector, said that the government should seriously work on expanding the tax net to improve economic matters, as relying on existing taxpayers alone will not meet government targets.

In a recent meeting with Finance Minister Muhammad Aurangzeb, it became clear that the Finance Minister is committed to expanding the tax net, but the FBR bureaucracy needs to play an active role.

Malik Khuda Bakhsh emphasized that the government needs to develop the capacity to repay loans, and as long as the economy remains import-based, the government will have to return to lenders. Increasing exports is essential in the current situation to bring valuable foreign exchange into the country.

While commenting on the detailed briefing received during Prime Minister Muhammad Shehbaz Sharif’s visit to Karachi Port Trust, Port Qasim Authority, and National Shipping Corporation, he said that Prime Minister is striving to improve Pakistan’s defense, foreign, and economic affairs. The entire nation, including the business community, supports him in this mission.

Malik Khuda Bakhsh stated that to increase Pakistan’s exports, it is crucial that exporters can promptly deliver their consignments to the ports. To ensure uninterrupted delivery of goods to Karachi Port Trust, it is essential to keep Lyari Expressway open for cargo traffic 24 hours a day. He expressed satisfaction with the announcement that Malir Expressway will also be connected to the port, and the capacity for goods transportation via rail will be increased.

Malik Khuda Bakhsh further stated that the development of ports in Karachi will boost exports through the value addition industry. He mentioned that Pakistan provides the most suitable route for maritime trade for Central Asian states, which have shown great interest in using Pakistan’s ports. With modern systems and easy access to ports, Pakistan can earn billions of dollars in foreign exchange.

It is necessary to install modern scanners at ports, reduce clearance time at Port Trust and Port Qasim, consult stakeholders for private sector development, ease of doing business, and facilitate investors.

Date: 2024-07-09

Details:

July 9, 2024

Karachi, July 9, 2024 – The Pakistan Business Council (PBC) has raised significant concerns regarding recent amendments to the Sales Tax Rules, 2006, introduced through SRO 350(I)/2024 by the Federal Board of Revenue (FBR).

In a letter addressed to the Member Inland Revenue – Operations of FBR, the PBC highlighted severe challenges faced by sales tax registered persons since the implementation of these amendments.

The crux of the issue lies in the treatment of sales tax returns under the new provisions. According to SRO 350(I)/2024, sales tax returns filed by buyers of taxable goods are deemed provisional in the IRIS Portal until the respective seller files their return for the same tax period by the due date. If the seller fails to file a return or submits an invalid or incomplete one, the provisional return of the buyer is automatically finalized. This finalization leads to the deletion of input tax entries related to purchases from non-compliant suppliers from the buyer’s return.

“This automated process adversely affects compliant taxpayers,” stated the PBC. The sudden disallowance of input tax due to the non-compliance of suppliers places significant financial strain on buyers, impacting their working capital and operational capabilities. It forces them into a payable position, disrupting their financial planning and business operations.

Furthermore, the IRIS Portal’s technical limitations prevent adjustments in Annexure A and F of provisional returns after the end of the month. Unsubmitted purchase invoices are automatically removed from Annexure A, reducing the value of purchases and corresponding input tax adjustments in Annexure F. This anomaly causes the net value of purchases to turn negative in Annexure F, leading to submission errors when filing final returns.

“The inability to submit final returns due to technical issues exacerbates the difficulty of doing business in the current macroeconomic environment,” lamented the PBC. They emphasized that such constraints are unjust and contradict the principles of fair business practice and justice under the law.

Moreover, the PBC underscored that the ripple effect of non-compliance by one entity impacts the sales tax returns of all associated parties, disrupting the entire supply chain. This cascading effect further exacerbates the operational challenges faced by compliant taxpayers.

In light of these pressing issues, the PBC urged the Member FBR for immediate intervention to resolve these issues promptly. They emphasized that compliant taxpayers should not bear the brunt of non-compliance by others and called for corrective measures to align with the spirit of justice and equity in taxation.

The PBC’s letter reflects growing frustration within the business community over regulatory hurdles that hinder operational efficiency and financial stability. As stakeholders await a response from the FBR, the outcome of these deliberations will be crucial in determining the future ease of doing business in Pakistan.

Date: 2024-07-09

Details:

July 9, 2024

Karachi, July 9, 2024 – The Karachi Chamber of Commerce and Industry (KCCI) has urged the Federal Board of Revenue (FBR) to promptly resolve the ongoing issues related to SRO 350 (I)/2004, which have been a source of significant concern for the business community.

In a formal letter to the FBR, KCCI President Iftikhar Ahmed Sheikh highlighted the unresolved complications arising from the SRO, noting that it has caused considerable anxiety among businesses. He emphasized the necessity for the FBR to reassess the SRO in collaboration with relevant stakeholders to mitigate its adverse impacts.

“The situation is critical,” said Sheikh. “Even essential utility providers like SSGC and K-Electric struggle to file their sales tax returns due to SRO 350’s complexities.”

Sheikh explained that SRO 350 establishes a dependency between the tax return filing of buyers and the compliance of suppliers. This dependency creates a systemic risk where non-compliance by suppliers can disrupt the entire supply chain, potentially jeopardizing operations across various sectors.

Additionally, the SRO mandates the submission of balance sheets, which may conflict with previously submitted data, adding another layer of complexity and potential disruption to compliance procedures. Businesses are particularly concerned about this requirement due to its perceived intricacies and the potential for inconsistencies.

“The lack of a registration system at the initial export stage for products such as livestock, meat, fish, vegetables, and fruits makes it impossible for filers to submit details about registered persons for sales tax returns,” Sheikh warned. “Further delay in addressing SRO 350 could halt exports of these critical products.”

The KCCI President further underscored the uncertainty and ambiguity surrounding sales tax return filing deadlines and the imposition of unreasonable liabilities. These challenges, he noted, are particularly burdensome for businesses already struggling with economic difficulties.

Sheikh called on FBR Chairman Malik Amjed Zubair Tiwana to engage directly with the KCCI to discuss these pressing issues. He suggested that if an in-person visit was not feasible, an urgent online meeting should be arranged to address the critical concerns raised by the business community.

The KCCI’s appeal underscores the broader challenges faced by Pakistani businesses in navigating regulatory complexities and underscores the urgent need for reform and clarity. The resolution of issues related to SRO 350 is seen as a crucial step in ensuring the smooth operation of businesses and maintaining the flow of exports, which are vital to the country’s economy.

In summary, the Karachi Chamber of Commerce and Industry’s demand for the Federal Board of Revenue to address the complications of SRO 350 reflects a critical need for regulatory clarity and cooperation. The business community hopes that the FBR will take swift and decisive action to resolve these issues, thereby fostering a more conducive environment for economic activity and growth.

Date: 2024-07-09

Details:

July 9, 2024

Karachi, July 9, 2024 – The Finance Act 2024 has introduced significant changes, imposing limitations on the Federal Board of Revenue (FBR) regarding the issuance of assessment notices. This move aims to streamline tax processes and provide clarity to taxpayers.

The act has added a new Section 11G to the Sales Tax Act of 1990, establishing a defined timeframe for issuing and processing show cause notices and assessment orders.

Key Provisions of Section 11G

Section 11G, titled “Limitation for Assessment,” sets forth specific guidelines:

1. Issuance of Show Cause Notices: Notices under Sections 11D to 11F must be issued within five years from the end of the financial year in which the relevant date occurs.

2. Issuance of Assessment Orders: Orders under Sections 11D, 11E, and 11F must be issued within 120 days from the issuance of a show cause notice. This period can be extended by the Commissioner for up to 90 days, provided the reasons for the extension are documented.

3. Exclusions from the Time Limit: The specified period excludes the time during which proceedings are adjourned due to stay orders, Alternative Dispute Resolution (ADR) proceedings, or adjournments requested by the taxpayer, up to a maximum of 60 days.

Defining the Relevant Date

The term “relevant date” is crucial in determining the timelines for assessment. It refers to:

• The date of payment of sales tax or charge under Section 6.

• The date of payment for goods or services subject to tax withholding under subsection (7) of Section 3.

• The date of erroneous refund of sales tax or charge.

Implications for Taxpayers and the FBR

The introduction of these limitations is expected to bring greater certainty and predictability to the tax assessment process. Taxpayers will benefit from knowing the specific timelines within which the FBR must act, reducing the prolonged uncertainty often associated with tax assessments. For the FBR, these provisions necessitate a more efficient and timely handling of tax matters.

The Finance Act 2024 represents a significant step towards improving the tax administration system in Pakistan. By setting clear deadlines and conditions for issuing assessment notices, the act aims to enhance transparency and efficiency in tax collection, benefitting both taxpayers and the FBR.

Date: 2024-07-08

Details:

July 8, 2024

Islamabad, July 8, 2024 – The Federal Board of Revenue (FBR) has reported a significant milestone, with nearly 5 million active taxpayers recorded for the tax year 2023 as of July 7, 2024.

According to the latest weekly Active Taxpayers List (ATL) released on Monday, the total number of active taxpayers has surged to 4.92 million, reflecting returns filed up to July 7, 2024. This marks an increase of 80,000 new active taxpayers within the week between July 1 and July 7 alone.

This surge represents a notable rise from the initial Active Taxpayers List (ATL) for 2023, which listed 3.35 million active taxpayers when launched on March 1, 2024. The FBR attributes this growth to a series of strategic initiatives aimed at enhancing tax compliance across Pakistan.

Central to this achievement is the FBR’s aggressive campaign targeting non-filers, highlighted by the threat to block mobile phone SIM cards of individuals failing to file tax returns. Implemented as part of the 2024-25 budget measures, this approach has proven effective in compelling previously non-compliant taxpayers to meet their fiscal obligations.

A pivotal moment in this compliance drive was the issuance of Income Tax General Order No. 1 on April 29, 2024. This directive mandated telecommunications companies to block SIM cards of individuals who had not filed income tax returns and wealth statements for 2023. The impact was significant, affecting over half a million non-filers and serving as a compelling incentive for compliance.

The FBR’s stringent stance forms a critical component of its broader strategy to expand Pakistan’s tax base, essential for improving the country’s tax-to-GDP ratio – a key indicator of fiscal health and economic efficiency. By linking tax compliance with mobile connectivity, the FBR has effectively incentivized taxpayers to regularize their status. Being on the ATL not only avoids SIM card disruptions but also qualifies individuals for reduced tax rates on financial transactions, further encouraging compliance.

Despite these advancements, challenges persist in achieving comprehensive tax coverage relative to Pakistan’s population of 240 million. To tackle these issues, the FBR continues to ramp up awareness campaigns, streamline tax procedures, and bolster digital infrastructure to facilitate easier compliance.

FBR officials emphasize that proactive measures are crucial in fostering a robust compliance culture, vital for Pakistan’s fiscal stability and sustainable economic growth. By embedding such a culture, the FBR aims to create a predictable environment conducive to economic planning and development.

With the ATL now accessible to the public, transparency is upheld, promoting greater participation in the tax framework and fostering citizen trust in a fair taxation system where compliance yields tangible benefits.

The surge in active taxpayers underscores Pakistan’s progress in tax compliance, driven by strategic policies and regulatory measures aimed at broadening the tax base and ensuring fiscal discipline in the nation’s economic landscape.

Date: 2024-07-08

Details:

July 8, 2024

Karachi, July 8, 2024 – The Finance Act of 2024 has granted new powers to Inland Revenue (IR) officers in Pakistan, significantly enhancing their authority to recover unpaid or underpaid taxes from individuals and businesses.

This legislative change aims to bolster tax compliance and close loopholes that have previously allowed some taxpayers to evade their fiscal responsibilities.

This increased authority stems from the incorporation of section 11E into the Sales Tax Act of 1990. The new provision empowers IR Assistant Commissioners and above to take decisive action in several scenarios where tax evasion or discrepancies are suspected. Specifically, the IR officers can intervene in situations where:

• Tax has not been levied at all, potentially due to collusion or deliberate evasion.

• An IR officer suspects, based on audits or other investigations, that a taxpayer has failed to pay or underpaid their sales tax.

• Taxpayers have claimed ineligible input tax credits or refunds.

• Taxpayers have received tax refunds to which they were not rightfully entitled.

Upon identifying such discrepancies, the IR officer is required to issue a show-cause notice to the taxpayer. If the taxpayer fails to provide a satisfactory explanation, the officer can then issue an order to determine the amount of unpaid or underpaid tax, inadmissible input tax or refund, or unlawful refund obtained. Additionally, the officer is empowered to impose penalties and default surcharges as outlined in sections 33 and 34 of the Sales Tax Act, 1990.

Furthermore, the new provision grants IR officers the authority to disallow input tax claims on goods or services if the taxpayer cannot produce reasonable justification, such as receipts, invoices, or other documentation supporting the transaction. This measure is intended to ensure that only legitimate transactions are eligible for tax credits, thereby preventing fraudulent claims.

In cases where no tax was initially levied, the recoverable amount will be determined as a tax fraction of the supply value. This approach ensures that the tax recovery is proportional to the value of the goods or services supplied, maintaining fairness in the tax system.

The expansion of IR officers’ powers is part of a broader effort by the Pakistani government to strengthen tax collection mechanisms and increase revenue. By empowering IR officers to take more proactive and stringent measures against tax evasion, the government hopes to address potential loopholes that have previously allowed some taxpayers to avoid their obligations. This move is expected to enhance compliance, increase tax revenues, and contribute to the overall fiscal health of the country.

Date: 2024-07-06

Details:

Recorder Report Published about an hour ago

LAHORE: Expressing serious concerns over the Finance Act 2024, the value-added textile exporters have urged the government to revisit the shift from Final Tax Regime (FTR) to the standard taxation in the new Budget FY25, as the exporters are considering to shut the industry or moving the business abroad.

In a joint meeting of the Pakistan Hosiery Manufacturers & Exporters Association (PHMA) and Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA), also attended by the industry representatives from Lahore, Sialkot and Faisalabad, the participants said that several industrial units have announced to shut their business, indicating decline in the country’s export mainly due to high production cost amidst huge taxation, high fuel, electricity and gas tariffs.

PHMA senior vice chairman Amanullah Khan, former chairman Shehzad Azam Khan, Naseer Butt, Shafique Butt, RGMEA Central Chairman Mubashar Naseer Butt, Regional Chairman Ahmad Hanif, former chairman Ijaz Khokhar and Khawaja Bilal spoke on the occasion.

PHMA SVC Amanullah Khan pointed out that the exporters have been brought under the normal tax regime, creating harassment issues, while a 1% turnover tax on exports will still apply as a minimum tax. At the end of the year, additional taxes will be collected under the normal tax regime, which is not acceptable.

“Exporters will face a 1% advance income tax, collected by specific withholding agents at the time of export income realization.”

The taxation burden has hindered the industry, resulting in lowering output with ever soaring costs. The government has levied the exports sectors with a huge taxation up to 42 percent but shunned a mechanism to make refunds.

He highlighted that the country currently has 12 million NTN holders, but due to the complex tax system, only 4.5 million have filed their returns, which is a significant concern for the government, indicating a need to simplify the tax system. He said that income tax commissioners, who used to issue complete exemption certificates under the old law for exempted income, can now grant a maximum exemption of only up to 80%, which is the serious concern for the exporters.

PHMA North Zone SVC observed that the FTR offers transparent mechanism for taxing export proceeds electronically irrespective of profit or loss on realization of their export proceeds. He said that this imprudent tax measure has been taken not with an intention to enhance revenue but to open up the doors of corruption and harassment in the hands of FBR. He stated that the decision to eliminate zero-rating on local supplies under Export Facilitation Scheme will have highly adverse effects on export. He said that removal of zero-rating on local supplies to registered exporters will compel the exporters to claim refunds of Sales Tax from FBR which is lengthy process contrary to the spirit of EFS. He said that already, billions of rupees Sales Tax Refunds are stuck-up with the government. Therefore, this adverse Finance Act must be revisited, he demanded.

Amanullah Khan said that the new Finance Act has increased fines and duties, creating many challenges for the exporters, making it clear that the export industry is not afraid of paying taxes and duties, but these should be determined based on ground realities and the convenience of the exporters. Instead of imposing additional taxes on those who are already paying taxes, the tax net should be expanded. He pointed out that it’s essential to understand why people avoid coming into the tax net. Those willing to join the tax net may also refrain due to existing issues, stating that policy inconsistencies are creating numerous problems for the value-added textile industry.

Date: 2024-07-06

Details:

Sohail Sarfraz Published about an hour ago

ISLAMABAD: The Federal Board of Revenue (FBR) Friday conveyed to the Ministry of Energy that the Section 236H (2.5 percent advance tax on sales to retailers) of the Income Tax Ordinance 2001 is not applicable to petrol pumps of Oil Marketing Companies (OMCs).

The dealers/retail outlets of OMCs fall under the purview of Final Tax Regime which is final discharge of tax liability by the dealers/retail outlets of OMCs, the FBR added.

According to a legal clarification issued to the Director General Oil, Ministry of Energy (Petroleum Division) here, the FBR has clarified that the provisions of the tax collection under section 236H of the Income Tax Ordinance 2001 is not applicable on dealers and retail outlets of Oil Marketing Companies.

The FBR stated that refer to OM received from Ministry of Energy (Petroleum Division) seeking clarification from FBR in order to exclude Oil Marketing Companies (OMCs) from the applicability of section 236H.

The perusal of the subject letter revealed that dealers/retail outlets (Petrol Pumps) works on fixed dealer margin which is regulate by government of Pakistan and it is a price regulated sector.

At present tax is being collected under section 156A of the Income Tax Ordinance, 2001 (the Ordinance) which is full and final discharge of their liability.

Through Finance Act 2024, the scope of section 236H ibid is extended to all the sectors of economy and therefore, petroleum dealers/retail outlets are facing undue hardship due to the said amendment in the Ordinance. Hence, the Directorate General Oil sought the clarification.

In view of the above explained position, it is clarified that the provisions of tax collection under section 236H ibid are not applicable on dealers/retail outlets of OMCs as the income of such person fall under the purview of Final Tax Regime in terms of section 169 of the Ordinance and it is final discharge of tax liability by the dealers/retail outlets of OMCs, the FBR added.

Date: 2024-07-06

Details:

Recorder Report Published about an hour ago

ISLAMABAD: Health advocates Friday expressed deep concern over the government’s decision to maintain current cigarette tax rates in the federal budget (2024-25).

A session organized by the Society for the Protection of the Rights of the Child (SPARC) and the Social Policy and Development Centre (SPDC) highlighted the negative implications for public health and revenue generation here on Friday.

Chief Guest Murtaza Solangi, Former Federal Minister for Information and Broadcasting, stated that the federal budget (2024-25) missed a critical opportunity to generate substantial revenue through increased cigarette taxes. This revenue could have been invested in public health, easing the economic burden on our healthcare system. Instead, maintaining current tax rates benefits cigarette manufacturers without additional excise tax contributions, undermining tobacco control efforts and worsening the public health crisis caused by tobacco use.

He further added that we must advocate for policies that prioritize public health and urge the government to implement measures that balance revenue generation with health objectives.” Managing Director of SPDC, Muhammad Asif Iqbal, said, “The government’s decision to spare the cigarette industry from any tax hike, despite the need to generate additional revenue to address the fiscal deficit, is concerning.

He said the FED revenue target of Rs324 billion for 2024-25 from Cigarette industry is unrealistically high without an increase taxes on cigarette sector and even with estimates suggesting a shortfall of over Rs100 billion. The Finance Act 2024’s changes benefit cigarette manufacturers by allowing price increases without additional excise tax revenue.

The government should adopt a dual approach of increasing the FED rate and implementing regulations to combat the illegal cigarette trade. Effective tobacco control policies should leverage higher cigarette taxes as a tool to discourage tobacco use and promote public health.”

Renowned tobacco control activist Malik Imran Ahmed, Country Head Campaign for Tobacco Free Kids added, the increase in the FED price tier thresholds benefit the cigarette manufacturing firms, allowing them to increase consumer prices without any additional contribution to excise tax revenue. This approach not only undermines our efforts towards tobacco control but also risks exacerbating the public health crisis caused by tobacco consumption.

Date: 2024-07-06

Details:

Muhammad Ali Published about an hour ago

KARACHI: The Directorate of Post Clearance Audit (PCA) South has “exposed” a large-scale tax fraud worth millions of rupees against a Karachi-based textile unit. The company is accused of misusing three exemption licenses under manufacturing bond, DTRE, and EFS regimes.

According to the details, Sheeraz Ahmed, Director PCA on the instructions of Dr Zulfikar Ali Chaudhry, Director General of PCA, has investigated the allegations of misusing export facilitation regime by the accused textile company.

Initial scrutiny of customs, sales tax, and income tax data revealed significant discrepancies, leading to a physical inspection of the factory premises on July 2, 2024.

The inspection confirmed the illegal removal of 494 metric tons of Polyester DTY/ FDY Yarn, valued at Rs 187 million. This yarn was imported through 21 EFS Goods Declarations (GDs), 7 Manufacturing Bond (MB) GDs, and 1 DTRE GD. The unlawful removal resulted in an evasion of duty and taxes amounting to Rs 125 million.

The accused importer initially claimed the missing goods were with vendors in Faisalabad and Lahore. However, he failed to provide any supporting evidence when given the opportunity, raising suspicions of local market sales of exempt goods.

The audit team’s factory visit revealed a glaring mismatch between the installed machinery and the exported goods. While only yarn-texturing machines were found on-site, many out of service, the company had reportedly exported finished items like garments, suits, fabrics, and various household items under DTRE, MB, and EFS regimes.

On June 4, 2023, PCA South filed an FIR for fiscal fraud under Section 32A against the accused proprietor and her husband. The investigation has also expanded to probe potential money laundering activities due to the inconsistency between the volume of yarn imports and the importer’s financial standing, official sources said.

The accused are currently at large, with two PCA teams deployed to track their whereabouts. All sea and land customs export collectorates have been alerted to prevent any flying exports through misdeclaration by the accused textile unit, they informed.

As this investigation unfolds, it serves as a stark reminder of the need for stringent oversight and accountability in the country’s export sector to maintain economic integrity and ensure compliance with trade regulations along with level playing field to the genuine exporters.

Date: 2024-07-05

Details:

Hamid Waleed Published about 5 hours ago

LAHORE: Taxpayers from sugar industry have challenged the power of Commissioner Inland Revenue (CIR) to make a random selection of sales tax returns for audit, terming it arbitrary as well as a roving and fishing inquiry into their tax affairs.

According to sources, the CIR had issued notices under Sales Tax Act Excise Act allegedly on the scrutiny of the returns filed under the self-assessment regime. In some cases, the department had not even conducted scrutiny of the returns and selected cases for the audit purposes.

The taxpayers were of the view that the Commissioner cannot issue notice without assigning reasons. They further contended that the notices were not only based on mala fide and arbitrary approach but also issued mechanically on or about the same time to all of them.

They further maintained that the CIR does not have power to make a random selection for audit and any such power vests only with the FBR. In some cases, they added, the CIR had selected returns for audit for a second time within a period of three years, which is prohibited by the law. In addition, the department had also proceeded to select returns for audit for consecutive tax years in one go, which is again not the spirit of the law.

The department, on the other hand, maintained that audit was the most effective tool to assess the veracity of the tax return filed under the self-assessment regime and the taxpayers are provided with remedies once adverse order is passed against them.

The department also dispelled the impression that notices were issued arbitrarily, saying that they were issued after examining the tax returns filed by the millers. Since sales tax, unlike income tax, is not out of the pocket of the sugar mills, therefore, no reason was requited to be assigned to the taxpayers for access to record or documents.

However, the relevant appellate forum maintained that the notices were of no legal effect because they were issued by the CIR while failing to disclose reasons for selecting the returns for audit.

Date: 2024-07-05

Details:

Sohail Sarfraz Published about 5 hours ago

ISLAMABAD: In a major reshuffling on Thursday, the Federal Board of Revenue (FBR) has transferred and posted 78 officials of Inland Revenue Service and Pakistan Customs Group (BS-19/20) including 16 IR officials (BS-20) and 11 Customs officials (BS20) have been placed on “Admin Pool”.

In this regard, the FBR has issued four notifications here on Thursday.

It is learnt that the FBR will place more officials on Admin Pool in phases.

In April 2024, the FBR had transferred and posted top 22 Inland Revenue officials of BS-20 to BS-22.These included 13 key Members/director generals of the Board and two chief commissioners Inland Revenue who were transferred as members (Admin Pool).

As per details, the FBR has given new assignments to 51 officers of Pakistan Customs Service (BS-19-20) on Thursday. These officials included Collectors of Customs, Directors Customs intelligence, Chief FBR and other customs officials.

The FBR has transferred 16 Inland Revenue Service officers to Admin Pool. Among 16 IR officials, most of them were posted as Commissioners in the field formations.

Similarly, the department also placed 11 Pakistan customs officers to Admin Pool. These officials have been given post of Chief (Admin Pool), Federal Board of Revenue (HQ), Islamabad.

Through another notification, the FBR has transferred Customs Intelligence Officer, Directorate of Intelligence & Investigation, FBR, Quetta and Superintendent, Directorate of Cross Boarder Currency Movement, Islamabad to the FBR (Admin Pool).

Total number of officials of IRS and Pakistan Customs placed on Admin Pool stood at 29 including two BS-16 Customs officers.

According to the notification, Fayyaz Anwar (Pakistan Customs Service/BS-20, Member (Legal & Accounting-Customs), (OPS) Federal Board of Revenue (Hq), Islamabad has been given new assignment as Director General (OPS), Directorate General of Law & Prosecution, Islamabad (Stationed at Lahore).

Chief Collector customs Peshawar Saeed Akram has been posted as Member legal and Accounting FBR.

Chief FBR Muhammad Jamil Nasir Khan has been posted as Chief Collector Customs Peshawar. Fayaz Rasool (Pakistan Customs Service/BS-20, Director, Directorate General of Customs Valuation, Karachi has been assigned to work as Collector, Collectorate of Customs Appraisement, Port Muhammad Bin Qasim, Karachi.

Collector Samriyal Saima Aftab has been transferred to director Transit Trade Lahore.

Chief FBR Yousaf Haider Orakzai (Pakistan Customs Service/BS-20) has been given new assignment as Director, Directorate of Cross Border Currency Movement, Islamabad. Director Customs Intelligence Islamabad has been transferred to Chief Tariff and Trade FBR.

Zeb Gul Shabbir (Pakistan Customs Service/BS-20) has been given new assignment as Collector, Collectorate of Customs, Islamabad International Airport, Islamabad. The officer is also assigned the look after charge of the post of Director, Directorate General of Reforms and Automation-Customs (Technology Services), Islamabad.

Date: 2024-07-05

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July 5, 2024

Karachi, July 5, 2024 – The Finance Act, 2024, has empowered the officers of Pakistan Customs to seek assistance from the Intelligence Bureau (IB) for resolving particular cases.

This move aims to bolster the capabilities of customs officials in combating smuggling, tax evasion, and other related offenses by leveraging the expertise and resources of the IB.

The newly granted powers are a result of amendments made to Section 7 of the Customs Act, 1969. The updated Section 7 now mandates that Customs officers from various federal and provincial government departments, including the Intelligence Bureau, Inland Revenue, Police, National Highways and Pakistan Motorway Police, Civil Armed Forces, Border Military Police (BMP), Provincial Levies, Khasadar Force, and land-revenue collection officers, are required to assist customs officers in the discharge of their duties.

The amended Section 7 of the Customs Act, 1969, now reads as follows:

“Section 7 – Assistance to the officers of customs. All officers of Federal and Provincial Governments, including Inland Revenue, Police, Intelligence Bureau, National Highways and Pakistan Motorway Police, Civil Armed Forces, Border Military Police (BMP), Provincial Levies, Khasadar Force, and officers engaged in the collection of land-revenue are hereby empowered and required to assist the officers of customs in the discharge of their functions under this Act. The provision of assistance so requested shall be binding.”

This amendment is expected to enhance the efficiency and effectiveness of Pakistan Customs by enabling a more coordinated approach to enforcement activities. The inclusion of the Intelligence Bureau, known for its intelligence-gathering and investigative prowess, is particularly noteworthy. This collaboration is anticipated to bring a higher level of scrutiny and expertise to customs operations, aiding in the identification and prosecution of complex smuggling and tax evasion cases.

The move is part of a broader effort by the Pakistani government to strengthen enforcement mechanisms and improve revenue collection. By facilitating inter-agency cooperation, the government aims to create a more robust and integrated framework for addressing financial crimes.

Overall, the Finance Act, 2024, marks a pivotal step in empowering Pakistan Customs with the necessary tools and support to fulfill their mandate effectively. The collaborative efforts of various governmental departments, especially the Intelligence Bureau, are poised to play a crucial role in enhancing the integrity and efficiency of customs operations across the country.

Date: 2024-07-05

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July 5, 2024

Islamabad, July 5, 2024 – Prime Minister Shehbaz Sharif, emphasizing the government’s priority of digitizing the taxation system to prevent tax evasion worth billions of rupees, directed the concerned authorities on Friday to promptly establish a dashboard to monitor the ongoing digitization and the implementation of reforms.

Chairing a meeting to review the Federal Board of Revenue’s (FBR) reform process, Prime Minister Shehbaz instructed the authorities to integrate taxable non-filers into the tax net and revoke the discretionary powers of customs appraisers. He demanded an implementation report from the FBR chairman within 24 hours.

During the briefing on FBR’s digitization, it was revealed that 4.5 million taxable individuals, previously not part of the tax net, have been identified through the digitization process. The meeting was informed that following the government’s initiatives, over 300,000 additional individuals have filed their tax returns within a few weeks. Moreover, refunds of 4,000 companies have been halted over the last two weeks due to the detection of under-invoicing and fraudulent sales tax refunds.

Prime Minister Shehbaz Sharif asserted that tax evaders, along with the officers and staff facilitating them, would face strict punishment. He stressed that those plundering the public treasury would not be spared. Additionally, taxpayers who fulfill their obligations timely would be duly acknowledged.

Prime Minister Shehbaz announced the installation of state-of-the-art scanners at seaports to ensure transparency and curb corruption within the system. He also called for a comprehensive report detailing the extent of tax evasion and measures to prevent it.

Highlighting his commitment to introducing an internationally standard taxation system in Pakistan, Prime Minister Shehbaz called for the engagement of reputed professionals and experts in formulating tax policies. He also sought a comprehensive strategy on FBR’s digitization and reforms, along with set targets for the next meeting.

The meeting was attended by Federal Ministers Muhammad Aurangzeb and Ahad Khan Cheema, Minister of State Ali Pervaiz Malik, PM’s Coordinator Rana Ehsan Afzal, FBR Chairman, CEO of Pakistan Business Council Ehsan Malik, CEO of Karandaz Waqasul Hassan, and other senior officials. Dr. Shamshad Akhtar, Naveed Andrabi, Asif Pir, and Ali Malik participated via video link.

The prime minister’s directive to create a dashboard for monitoring digitization represents a significant step towards enhancing the efficiency and transparency of Pakistan’s taxation system. By identifying and integrating millions of taxable individuals who were previously outside the tax net, the government aims to broaden the tax base and ensure a more equitable distribution of the tax burden.

Furthermore, the crackdown on fraudulent activities, such as under-invoicing and forged sales tax refunds, underscores the government’s commitment to combating corruption and ensuring that all taxpayers comply with their obligations. The installation of advanced scanners at seaports is expected to play a crucial role in this regard, preventing illicit activities and promoting a culture of transparency.

Prime Minister Shehbaz’s call for international-standard taxation reforms and the involvement of experts reflects a forward-looking approach, aimed at modernizing the country’s tax administration and aligning it with global best practices. The upcoming comprehensive strategy and set targets for FBR’s digitization will be pivotal in driving these reforms forward.

In conclusion, the government’s focus on digitizing the taxation system, coupled with stringent measures against evasion and corruption, marks a decisive move towards fiscal responsibility and economic stability. The successful implementation of these reforms will not only enhance revenue collection but also foster a more transparent and accountable tax system in Pakistan.

Date: 2024-07-05

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July 5, 2024

Karachi, July 5, 2024 – Pakistan is taking a significant step towards combating money laundering in foreign trade with the establishment of a new directorate within the Pakistan Customs department.

This initiative, empowered by a recent amendment to the Customs Act, 1969 through the Finance Act, 2024, aims to strengthen Pakistan’s defenses against illegal financial activities.

The newly formed Directorate General of Combating Trade Based Money Laundering (TBML) will be led by a Director General and staffed with dedicated professionals, including Directors, Additional Directors, and support personnel. Their primary focus will be on scrutinizing financial transactions related to import and export activities.

This move comes after years of Pakistan’s ongoing efforts to curb money laundering through import payments and prevent the illegal outflow of foreign currency. The recent inclusion of exporters under the normal tax regime in the Finance Act, 2024, signifies a major step in this direction. This policy compels exporters to provide a complete record of their transactions to the tax authorities, enhancing transparency and accountability.

The urgency for such measures is underscored by a 2019 framework issued by the State Bank of Pakistan (SBP) on combating money laundering through foreign trade. The framework highlights the growing vulnerability of international trade to money laundering and terrorist financing activities. Criminals exploit legitimate trade transactions to disguise illicit transfers by employing methods like under-invoicing, over-invoicing, manipulating shipment quantities, and obscuring the true nature of goods or services involved.

The establishment of the TBML Directorate signifies Pakistan’s commitment to establishing a robust regulatory framework to mitigate these risks. This specialized unit will be equipped to identify and investigate suspicious financial activities within trade transactions.

The success of this initiative hinges on effective collaboration between the TBML Directorate, the Federal Board of Revenue (FBR), and other relevant authorities, including the State Bank of Pakistan and law enforcement agencies. Enhanced information sharing and coordinated efforts will be crucial in deterring and disrupting money laundering attempts through foreign trade channels.

This development is a positive step for Pakistan’s financial system and its integration with the global economy. By tackling money laundering, Pakistan fosters a more transparent and secure trade environment, attracting legitimate businesses and investors while safeguarding national security interests.

Date: 2024-07-05

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Former caretaker minister also advocates lowering key interest rate

BR Web Desk Published July 5, 2024

Former caretaker minister for Commerce and Industries Dr Gohar Ejaz has urged the government to provide tax relief to the salaried class, and lower the rate to a maximum of 15%.

Taking to social media platform X on Friday, the industrialist raised concerns over measures taken by the government in the budget for fiscal year 2024-25.

“In this budget Rs13 trillion is being targeted to be collected as taxes from all of us against collection of Rs9.3 trillion (in the previous fiscal year). Out of projected tax, Rs7.5 trillion will go to provinces as per the 18th Amendment,” said Gohar.

“Sadly, the country will be paying over Rs9.8 trillion interest to banks at 20%. I ask my government why are we keeping interest rate at 20% when year-on-year inflation is 12% in June because of higher benchmark inflation of last year June,” Gohar questioned.

“We are all ready to pay taxes for the best future of our country. We must bring interest rate to 12% and spend this savings of Rs4 trillion from this interest cost by giving relief to salaried families,” he said, urging the government to charge maximum tax of 15% on salaried class.

Imposition of further taxes on salaried group to ‘accelerate brain drain’ in Pakistan: PBC

The remarks from the former caretaker minister come after the government increased tax liability for all persons earning more than Rs50,000 a month in Budget 2024-25.

Gohar said tax relief to salaried class will allow the domestic economy to grow. It will “give more buying power to them to spend in our economy which will bring more indirect tax revenue for the government and let them live their lives respectably,” he said.

Pakistan’s salaried group has seen taxation burden increase massively over the last few years as the government looks at what many call ‘soft targets’. In its attempt to increase tax-to-GDP ratio, it has often come under criticism for taxing Pakistan’s formal sectors and not going after informal sectors enough.

Moreover, the industrialist on Friday was of the view that the only way for Pakistan to pay off its foreign debt is not by taking more debt from friendly countries and other banks but to make industry and exports viable.

“We can pay foreign debt only by creating exports from agriculture, services and industry. Please come out of this mindset of taking more loans to pay existing loans.

“This budget is not in anyway the way forward for Pakistan,” he concluded.

Date: 2024-07-04

Details:

Rizwan Bhatti Published 4 minutes ago

KARACHI: Exporters have warned that export of fruit and vegetables may face a declining trend due to imposition of additional taxes on export proceeds as it will increase the financial burden on exporters and farmers, making it more challenging for them to compete in the global market.

In a letter to Prime Minister Shahbaz Sharif and Finance Minister Muhammad Aurangzeb, Shaikh Imtiaz Hussain President Pakistan Agricultural and Horticultural Forum (PAHF) has called for immediate withdrawal of new additional taxes imposed on exports in the budget FY25 and restoration of fixed tax regime to compete in the world market.

Imtiaz expressed serious concern regarding the recent imposition of taxes under Section 154. On behalf of the stakeholder of the agricultural sector, he has highlighted the negative impacts of this decision and requested reconsideration to facilitate the exporters.

He said taxing export income at corporate tax of 29 percent and applicable super tax will directly hit the exports of the country. Previously, exporters were paying one percent of export processed and it was full and final tax for the exporters.

The new tax regime will have adverse effects of the new additional taxes on export and will further burden the already struggling exporters of fresh fruits and vegetables, he warned.

He also expressed concerns over the recently introduced Section 25AB, which imposes non-bailable penalties for suspected tax fraud.

“This intention to curb tax evasion may raise several issues and there is risk of misuse and potential harassment is significant without stringent safeguards. Innocent individuals and businesses could be unfairly targeted, causing severe distress,” Imtiaz said.

Moreover, harsh penalties may deter legitimate investments, undermining investor confidence and harming economic growth. In addition, non-bailable penalties also contradict the principles of justice and fairness, eroding public trust in our legal system, he added.

He has urged the Prime Minister and Finance Minister for reconsideration of Section 25AB and requested for alternative measures to combat tax fraud that do not carry the same risks.

President PAHA mentioned that agriculture is the backbone of Pakistan’s economy and contributes significantly to GDP and provides employment to a large segment of the population.

Exporting agricultural produce not only helps in earning valuable foreign exchange but also supports the livelihoods of countless farmers and their families. The imposition of additional taxes on export proceeds will undoubtedly increase the financial burden on exporters and farmers, making it more challenging for them to compete in the global market, he said.

He said that the decision to impose these taxes may have been influenced by the demands of the IMF as part of their conditions for financial assistance. However, it is essential to balance such external demands with the needs and well-being of our local economy and citizens. Instead of imposing additional taxes, which may stifle growth and competitiveness, the government should consider alternative measures that could help meet IMF requirements without harming the export sector, he suggested.

The federal government must re-evaluate the decision of imposing taxes on the export sector to reduce the burdens on exporters so they can continue to support their vital contributions to Pakistan’s economy, Imtiaz concluded.

Date: 2024-07-04

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AFP Published July 4, 2024

KARACHI: Pakistan’s tax authority, the Federal Board of Revenue (FBR), said Thursday it has blocked 210,000 SIM cards of users who have not filed tax returns in a bid to widen the revenue bracket.

Only 5.2 million people of the more than 240 million population filed income tax returns in 2022.

The FBR passed the edict in April and has since sent orders to the Pakistan Telecommunications Authority (PTA) to block the connections of 210,000 SIM cards, with 62,000 of them later restored, according to the board’s data.

“We have unblocked the SIMs of those who have paid their taxes,” FBR public relations official Bakhtiar Muhammad said.

Blocking mobile SIMs: explore alternative strategies to enhance tax collection, GSMA urges FBR

“Nobody voluntarily comes up and pays taxes. We have to make ways for the people to pay their taxes.”

Pakistan has more than 192 million cellphone subscribers and four telecommunications service providers, according to the PTA.

Pakistanis must register a SIM card with their national identity number, which is often used for multiple connections.

Blocking SIMs of non-filers: FBR decides to summon telcos’ operators

“Access to telecom services is a basic human right and essential for many other fundamental services, including access to information, education, and emergency services,” an official at one of the four telecommunications companies told AFP on the condition of anonymity.

“We are in dialogue with the authorities, convincing them to use technology to help increase tax collection, as abrupt measures could disrupt the provision of these critical services.”

Not stopped from blocking SIM cards: FBR only barred from taking coercive steps against telcos: IHC

The South Asian country is struggling to increase its pitifully low revenue base but is hampered by a largely undocumented economy.

The government has been pushing for more loans from the International Monetary Fund (IMF) to help balance its books but the lender wants Islamabad to do more to mobilise its own resources.

“This is an absurd move. Not everyone who has SIMs earns enough to fall under the tax-paying category,” Fareiha Aziz, a digital rights activist, told AFP.

“People’s livelihoods are tied to their phones. This is an overreach.”

The four telecommunications companies warned in a letter to the ministry of information technology in June that the new tax measures against non-tax filing cellphone users were “impractical” and “non workable” and would scare away foreign investment.

Tauseef Gilani, a 66-year-old businessman in Islamabad, said the novel move was going too far.

“Whatever income I earn, it’s my responsibility to contribute back to society,” Gilani said.

“However, blocking SIMs is unjust – it infringes upon freedom of expression and violates rights.”

Date: 2024-07-03

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July 3, 2024

Karachi, July 3, 2024 – The Sindh Revenue Board (SRB) has implemented a reduced rate of 3% sales tax on services provided by hospitals for rooms and beds, effective from July 1, 2024.

This decision, outlined in a recent circular issued by the SRB, aims to streamline tax regulations related to healthcare services under the Sindh Sales Tax on Services Act, 2011.

According to the circular, the Sindh Budget 2024-25 introduced budgetary measures that classify services provided or rendered by hospitals and clinics as taxable services. Initially, all services offered by hospitals and clinics were exempt from Sindh sales tax (SST), as per a notification issued on July 29, 2024. However, services related to the provision of rooms and beds for indoor and day-care patients are now subject to a reduced sales tax rate of 3%. This applies specifically when the charges for such rooms and beds exceed Rs 25,000 per day, inclusive of any fixed charges.

The SRB emphasized that the procedures for the collection and payment of sales tax on these services are specified in Rule 42K of the Sindh Sales Tax on Services Rules, 2011, as amended by a notification dated June 29, 2024. This rule outlines the requirements for e-registration, invoicing, charging, collecting, and depositing the sales tax amounts by hospitals and clinics. Additionally, it mandates hospitals and clinics to act as ‘collection agents’ for services provided by medical practitioners and consultants within their premises.

Hospitals and clinics offering taxable services subject to the 3% sales tax rate are advised to strictly adhere to the provisions of the Act, 2011, and the rules prescribed therein. Compliance with these regulations is essential to ensure smooth implementation and adherence to tax obligations.

This regulatory adjustment by the SRB reflects efforts to enhance tax compliance within the healthcare sector while ensuring equitable treatment across different service categories. The introduction of a reduced sales tax rate on specific healthcare services aims to balance fiscal responsibility with the need to support essential healthcare infrastructure.

As hospitals and clinics navigate these new tax requirements, stakeholders are encouraged to familiarize themselves with the amended rules and comply diligently. The SRB continues to monitor and refine tax policies to support economic growth while maintaining transparency and accountability in tax administration.

Date: 2024-07-03

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July 3, 2024

Karachi, July 3, 2024 – The Finance Act, 2024, has introduced significant penalties for utility providers failing to comply with the Income Tax General Order (ITGO). The government has recommended a penalty of up to Rs 100 million for non-compliance.

According to sources within the Federal Board of Revenue (FBR), the penalty amount has been reduced from the initial proposal made through the Finance Bill 2024. Originally, the bill proposed penalties for individuals and entities failing to comply with ITGO requirements issued by the FBR. These requirements pertain to individuals not appearing on the active taxpayers’ list but who are still liable to file returns under the Income Tax Ordinance, 2001, within 15 days of the issuance of the ITGO.

Initially, the proposed penalty was Rs 100 million for the first default and Rs 200 million for each subsequent default. However, the Finance Act, 2024, has revised these amounts, reducing the financial burden while retaining the punitive measures to ensure compliance. The revised penalties are as follows:

• Rs 50 million for the first default

• Rs 100 million for each subsequent default

This change in penalty structure reflects the government’s approach to balance strict enforcement with a more pragmatic penalty framework. The revised penalties aim to enforce compliance without imposing excessively harsh financial penalties that could potentially disrupt utility services.

Furthermore, the Finance Act stipulates that the imposition of these penalties will be effective from a date notified by the FBR. This provision allows for a period of adjustment for utility providers to align their operations with the new compliance requirements.

The introduction of these penalties underscores the government’s commitment to enhancing tax compliance and broadening the tax base. By targeting utility providers, the FBR aims to ensure that all liable entities contribute to the national revenue as required by law. This move is part of broader efforts to improve tax administration and curb tax evasion.

Utility providers are now tasked with ensuring they have robust systems in place to comply with ITGO requirements promptly. The penalties serve as a deterrent against non-compliance and encourage timely submission of tax returns.

The FBR’s focus on compliance through the Finance Act, 2024, highlights the importance of maintaining an accurate and up-to-date taxpayer list. By enforcing these measures, the government seeks to create a fairer tax system where all eligible entities meet their tax obligations.

As the effective date approaches, utility providers are urged to review their compliance procedures and take necessary steps to avoid the hefty penalties outlined in the Finance Act, 2024.

Date: 2024-07-03

Details:

Recorder Report Published 15 minutes ago

LAHORE: Federal Tax Ombudsman (FTO) Dr Asif Mahmood Jah has expressed strong concerns over the repeated thrashing of the same issue to delay refund claims triggered by the taxpayer’s request and termed it a classic example of maladministration on the part of the tax department.

“It is a typical case of maladministration when the department has already discussed and thrashed out an issue, but still the same is being subjected to further queries leading to delaying the issuance of a refund,” he stressed.

According to details, the taxpayer is a private limited company deriving income from the manufacturing of other electrical equipment.

The department amended u/s 122(1) in the 2020 tax year by creating a refund of Rs 8,513,309. However, the department issued no refund even after a lapse of more than seven months.

The taxpayer approached the FTO, but the department maintained that the genuineness of the claim was yet to be verified. The department further mentioned having consulted customs data.

However, the FTO pointed out in his order that it is not understandable what other customs data is yet to be scrutinized by the department after the release of goods by the Customs after due diligence.

It is a typical case of maladministration that an issue has already been discussed and thrashed out. However, still the same is being subjected to further queries, leading to delaying the issuance of refund, the FTO stressed.

According to the FTO, The taxpayer was confronted by the department to provide documentary evidence concerning the addition of fixed assets. The taxpayer company had declared an addition of fixed assets in the income tax return for the tax year 2020.

The balance declared during the tax year was duly recorded in the fixed asset register. The addition was made through proper banking channels and can be traced through GDs and purchase invoices. A copy of GDs and purchase invoices were provided for consideration, which was also verified during the audit proceedings.

Finally, the FTO issued a clear directive to the concerned CIR Zone-IV, CTO, Lahore to promptly dispose of the taxpayer’s refund claim.

Date: 2024-07-03

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July 3, 2024

Karachi, July 3, 2024 – The Sindh government has issued updated motor vehicle tax rates under the Sindh Finance Act, 2024. These new rates, applicable from July 1, 2024, aim to standardize the tax regime for both imported and locally manufactured vehicles, reflecting the government’s strategy to balance revenue generation with promoting local automotive industries.

Key Updates on Tax Rates

Imported Vehicles:

1. Engine Capacity 3000cc and Above: Owners of imported motor cars and jeeps with an engine capacity of 3000cc and above will now be required to pay a tax of Rs 450,000 at the time of registration.

2. Engine Capacity 2000cc to 2999cc: For vehicles with an engine capacity ranging between 2000cc and 2999cc, the tax rate is set at Rs 275,000.

3. Engine Capacity 1500cc to 1999cc: Vehicles in this category will incur a tax of Rs 100,000.

Locally Manufactured or Assembled Vehicles:

1. Engine Capacity 2000cc and Above: For locally manufactured or assembled motor cars and jeeps with an engine capacity of 2000cc and above, the tax rate is Rs 50,000.

2. Engine Capacity 1500cc to 1999cc: For this category, the specifics of the tax rate have not been detailed in the initial release.

Implications and Reactions

The revision in tax rates is part of a broader fiscal strategy aimed at increasing the provincial revenue and promoting local manufacturing. By setting a significantly lower tax rate for locally manufactured or assembled vehicles compared to imported ones, the Sindh government is making a clear push towards supporting the domestic automotive industry.

Car buyers and industry stakeholders have mixed reactions to these updates. While local manufacturers welcome the move as a boost to their sales and market share, consumers eyeing imported vehicles express concerns over the higher financial burden. This policy shift is anticipated to influence purchasing decisions, potentially driving up demand for locally produced cars.

Dealers and automobile experts suggest that the increased tax rates on imported vehicles could also have a ripple effect on the overall market, potentially leading to higher resale values for used cars within these categories. However, they caution that the full impact will only become clear as the market adjusts to the new rates.

Date: 2024-07-02

Details:

Recorder Report Published about 3 hours ago

LAHORE: The Punjab Revenue Authority (PRA) has achieved a significant milestone in revenue collection during the Financial Year 2023-24 by collecting over Rs 239 billion which is likely to increase after final settlement of civil accounts thus showing an impressive growth of 20% if compared with the total revenue collection at Rs 200.1 billion during Financial Year 2022-23.

This is a great achievement as it is the highest-ever collection by any provincial revenue authority if compared with the rest of three provincial revenue authorities of the country and even by the PRA itself. The PRA spokesperson further added that total collection of PRA is comprised of Punjab Sales Tax on Services at Rs 223.4 billion against the Rs 191.2 billion during the corresponding period last year showing 17% growth, Punjab Workers Welfare Fund at Rs 10.2 billion reflecting 92% growth if compared with Rs 5.3 billion during last year and Punjab Infrastructure Development Cess (PIDC) at Rs 5.5 billion if compared with 3.5 billion last year which also exhibited impressive growth at 55%.

During the last month of Financial Year 2023-24 i.e. June 2024, the PRA collected notable Rs 32.7 billion compared to Rs 28.2 during the last year thus showing growth at 16% if compared with June 2023. During the month of June, 2024, PSTS was collected at Rs 29 billion reflecting 9% increase, PWWF at Rs 3 billion reflecting growth at 150% and PIDC at Rs 629 million which is 83% higher than Rs 344 million collected during June last year.

According to the spokesperson of PRA, the Authority, under the leaderships of Punjab Finance Minister Mujtaba Shuja ur Rahman and PRA Chairperson Dr Javed Iqbal Sheikh is persistently striving upon increasing the own source revenue of the province of Punjab despite all challenges mainly arising out of economic meltdown during Financial Year 2023-24.

The spokesperson further added that PRA accounts for around 66% of Punjab’s Own Source Revenue (OSR) is determined to maximize the provincial revenue through its dedicated team and cooperation of taxpayers in fulfilling their obligations through timely payment of taxes.

The strategy of PRA to achieve the target for the next year i.e. Financial Year 2024-25 includes broadening of tax base through effective use of Information Technology, integration of data bases with other organisations, data sharing with other organisations like FBR and other provincial departments, automation of its business processes, taxpayer facilitation and education, training of its workforce and expansion of PRA. The impressive revenue collection figures reflect the efficiency and effectiveness of PRA’s strategy in ensuring compliance to the tax statute while fostering a conducive environment for economic growth in Punjab.

Date: 2024-07-01

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KARACHI: The Inland Revenue Service Officers Association (IRSOA) has lauded the Federal Board of Revenue (FBR) for achieving remarkable tax collection results in the fiscal year 2023-24.
In a statement released on Sunday evening, IRSOA extended heartfelt congratulations to the entire FBR family for surpassing revenue collection targets despite significant challenges.
The IRSOA highlighted the resilience and dedication of the FBR, describing it as the country’s primary financial support system. This year, FBR exceeded the annual target of Rs. 9.252 trillion by an additional Rs. 54 billion, achieving a total collection of Rs. 9.306 trillion. This accomplishment is particularly noteworthy given the economic disturbances and severe resource constraints faced during the period.
IRSOA emphasized the undercompensated nature of FBR employees, noting that they are among the lowest paid within the civil service groups. Despite earning far below living wages, these employees are tasked with collecting revenue in the trillions. The association pointed out that international best practices suggest tax authority expenditures range from 1.5% to 2.5% of the revenue achieved. In stark contrast, FBR’s expenditure stands at a mere 0.43%.
The statement also underscored the disparity in human resources (HR) and infrastructure between FBR and tax authorities in more digitized nations. For example, while countries like the UK and Japan employ HR ranging from 40,000 to 50,000, FBR operates with significantly fewer personnel. Moreover, Pakistan, with a population of 240 million, has only 110 FBR tax offices. In comparison, Tokyo alone has 100 tax offices, and Japan has a total of 550.
Despite these constraints, FBR has set an ambitious target of Rs. 12.9 trillion for the next fiscal year, 2024-25. The IRSOA stressed the importance of addressing the challenges faced by FBR to further strengthen the institution and enable it to continue making historical achievements.
IRSOA’s congratulatory message reflects the appreciation and recognition of FBR’s efforts and accomplishments. The association’s call for better resources and support for FBR highlights the need for systemic improvements to sustain and enhance the country’s revenue collection capabilities. As Pakistan navigates its economic challenges, the success of FBR will play a crucial role in stabilizing and advancing the national economy.

Date: 2024-07-01

Details:

July 1, 2024

Islamabad, July 1, 2024 – Finance Minister Muhammad Aurangzeb praised the Federal Board of Revenue (FBR) on Monday for exceeding the tax collection target for the fiscal year 2023-24.

The commendation came during a meeting at the FBR Headquarters, where Finance Minister Aurangzeb, along with FBR Chairman Malik Amjed Zubair Tiwana and Board Members, reviewed the year’s revenue achievements. Minister of State for Finance and Revenue, Ali Pervez Malik, participated in the meeting via video link from Lahore.

In a statement issued by the FBR, Finance Minister Aurangzeb lauded the team’s remarkable performance in collecting Rs. 9,311 billion, surpassing the set revenue target. This achievement highlights the efficiency and dedication of the FBR in meeting the government’s fiscal objectives.

Aurangzeb expressed his confidence in the FBR’s capabilities and emphasized the Board’s crucial role in driving the government’s economic and fiscal policies. “The FBR’s success in exceeding the annual revenue target is a testament to its robust performance, despite facing numerous challenges,” he stated.

Minister of State Ali Pervez Malik also commended the FBR team for their outstanding efforts. He acknowledged the difficulties encountered throughout the year and applauded the Board’s resilience and commitment to surpassing the revenue goals.

To celebrate this significant accomplishment, Finance Minister Aurangzeb, accompanied by Chairman Tiwana and Board Members, participated in a cake-cutting ceremony. This gesture symbolized the collective effort and dedication of the FBR in achieving and exceeding the revenue collection target for FY2023-24.

The meeting highlighted the government’s ongoing commitment to strengthening the FBR and supporting its initiatives aimed at enhancing revenue collection, digitization, and economic documentation. Finance Minister Aurangzeb underscored the importance of these initiatives in ensuring sustainable economic growth and fiscal stability.

The FBR’s success in surpassing the FY24 tax target is seen as a positive indicator of Pakistan’s economic resilience and the effectiveness of its tax administration reforms. The government aims to build on this momentum by continuing to support the FBR’s efforts in improving tax compliance and broadening the tax base.

With the fiscal year coming to a close, the government’s focus remains on implementing strategic measures to further enhance the efficiency and effectiveness of the FBR. The emphasis on digitization and economic documentation is expected to play a pivotal role in achieving these goals, ensuring that the FBR remains a key driver of Pakistan’s fiscal policy.

As the country looks ahead, the government’s commitment to fiscal discipline and robust revenue collection remains unwavering. The FBR’s exemplary performance in FY2023-24 sets a strong precedent for future endeavors, reinforcing the importance of efficient tax administration in achieving economic stability and growth.

Date: 2024-07-01

Details:

July 1, 2024

Islamabad, July 1, 2024 – The Federal Board of Revenue (FBR) announced on Monday a significant increase in the number of active taxpayers, which has risen to 4.84 million based on returns filed for the tax year 2023 by June 30, 2024.

This marks a notable surge from the 3.35 million active taxpayers listed in the initial Active Taxpayers List (ATL) for 2023 launched on March 1, 2024.

The FBR attributes this increase to several key initiatives, including a recent campaign targeting non-filers by threatening to block their mobile phone SIM cards. This aggressive approach, coupled with measures introduced in the 2024-25 budget, has effectively encouraged compliance among those who had previously not filed their tax returns.

A significant catalyst in this compliance drive was the issuance of Income Tax General Order No. 1 on April 29, 2024. This directive mandated telecommunications companies to block the SIM cards of individuals who failed to file income tax returns and wealth statements for the year 2023. This order, impacting over half a million non-filers, has proved to be a powerful motivator for many to regularize their tax status.

The FBR’s hardline stance is part of a broader strategy aimed at expanding Pakistan’s tax base, which is essential for improving the country’s tax-to-GDP ratio. This ratio is a crucial indicator of fiscal health and economic efficiency. By linking tax compliance with mobile connectivity, the FBR has effectively incentivized taxpayers to ensure their status is regularized. Being on the ATL not only prevents the inconvenience of disabled SIM cards but also qualifies individuals for reduced tax rates on various financial transactions, further promoting compliance.

Despite these advancements, the gap between the active taxpayer base and Pakistan’s total population of 240 million highlights the ongoing challenges in achieving comprehensive tax coverage. To address these issues, the FBR is intensifying its outreach through awareness campaigns, simplifying tax procedures, and enhancing digital infrastructure to facilitate compliance.

FBR officials assert that these proactive measures are fundamental to fostering a robust compliance culture, essential for Pakistan’s fiscal stability and sustainable economic growth. By embedding such a culture, the FBR aims to provide a more predictable environment for economic planning and development.

With the ATL now publicly accessible, the FBR aims to uphold transparency and encourage greater participation in the tax framework. This transparency is intended to foster trust among citizens and promote a fair taxation system where compliance yields tangible benefits.

As the deadline for SIM blocking approaches, the FBR continues to strive for higher compliance rates, crucial for the country’s broader economic stability and advancement. The recent measures and strategic initiatives are expected to result in significant improvements in tax compliance, thereby contributing to Pakistan’s economic prosperity.

This surge in active taxpayers underscores the impact of the FBR’s innovative approach to tax enforcement and the importance of continued efforts to expand the tax base. By maintaining and building upon these initiatives, Pakistan can look forward to a more stable and robust economic future.

Date: 2024-07-01

Details:

July 1, 2024

Karachi, July 1, 2024 – In a significant move aimed at regulating the tobacco industry, the Finance Bill, 2024 has proposed an increase in the retail price for different tiers of cigarettes manufactured in Pakistan.

This proposal includes a restructuring of the duty rates for locally produced cigarettes, ensuring that brands are retained within their respective tiers despite the price hike. The proposed changes are as follows:

1. High-Priced Cigarettes: For locally produced cigarettes with an on-pack printed retail price exceeding Rs 12,500 per 1,000 cigarettes, the rate of duty will be Rs 16,500 per 1,000 cigarettes. This is an increase from the previous threshold of Rs 9,000 per 1,000 cigarettes.

2. Low-Priced Cigarettes: For locally produced cigarettes with an on-pack printed retail price not exceeding Rs 12,500 per 1,000 cigarettes, the rate of duty will be Rs 5,050 per 1,000 cigarettes. Previously, this applied to cigarettes priced up to Rs 9,000 per 1,000 cigarettes.

Additionally, the Finance Bill 2024 has introduced a reduction in the minimum price restriction. Through the Finance Act 2024, the minimum price restriction has been reduced from 60% of the retail price to 55%.

This change is particularly relevant for cigarettes falling under the high-priced category, as outlined in Serial No. 9 of the proposed duty structure.

These measures are part of a broader strategy to regulate the tobacco industry, control consumption, and increase revenue from tobacco sales. By raising the federal excise duty (FED) rates and adjusting the price thresholds, the Finance Bill aims to discourage excessive smoking, especially among the youth and low-income groups, while simultaneously boosting government revenue.

The restructuring of the duty rates and the adjustment of the minimum price restriction reflect the government’s commitment to public health and economic stability. This approach balances the need to control tobacco consumption with the necessity of maintaining a steady flow of revenue from one of the country’s significant tax contributors.

Overall, the proposed changes are expected to have a substantial impact on the tobacco market in Pakistan, influencing both consumer behavior and industry practices. As these measures take effect, it will be crucial to monitor their outcomes to ensure they achieve the desired public health and economic objectives.

Date: 2024-07-01

Details:

July 1, 2024

Karachi, July 1, 2024 – In a reversal from its initial proposal, the Pakistani government has announced an extension of reduced sales tax rates for locally manufactured hybrid electric vehicles. This move aims to incentivize the production and adoption of environmentally friendly automobiles.

Initial Exclusion Proposed in Budget 2024-25

The original Budget 2024-25, presented through the Finance Bill, 2024, proposed excluding hybrid electric vehicles from the reduced sales tax regime. Industry experts and environmental advocates expressed concern over this proposal, highlighting its potential to discourage the production and purchase of these fuel-efficient vehicles.

Course Correction Through Finance Act

The recently passed Finance Act, 2024, amends the initial proposal. Fortunately, locally manufactured hybrid electric vehicles will continue to benefit from reduced sales tax rates until June 30, 2026. This policy revision is expected to provide a significant boost to the domestic hybrid electric vehicle market.

Reduced Tax Rates by Engine Capacity

The revised tax structure offers tiered sales tax rates based on engine capacity:

• Locally manufactured hybrid electric vehicles with engines up to 1800 cc will enjoy a reduced sales tax rate of 8.5%.

• Vehicles with engines ranging from 1801 cc to 2500 cc will benefit from a reduced sales tax rate of 12.75%.

Promoting Environmental Sustainability and Local Manufacturing

The extension of reduced sales tax rates is seen as a positive step towards promoting environmental sustainability in Pakistan. Hybrid electric vehicles offer significant fuel efficiency advantages compared to conventional gasoline-powered cars, thereby reducing greenhouse gas emissions. Additionally, this policy encourages the growth of the domestic hybrid electric vehicle industry, potentially creating jobs and boosting the local economy.

Looking Ahead: Continued Support for Eco-Friendly Vehicles

The government’s revised stance on hybrid electric vehicle sales tax reflects a growing commitment to environmental protection and fostering a domestic green automotive sector. While the long-term tax structure for these vehicles remains to be seen, the current extension offers a welcome incentive for both manufacturers and consumers interested in adopting eco-friendly transportation solutions.

Date: 2024-07-01

Details:

July 1, 2024

Lahore, July 1, 2024 – The Punjab Revenue Authority (PRA) has achieved a significant milestone by collecting over Rs 239 billion in tax revenue during the Financial Year (FY) 2023-24.

This figure is expected to rise further after the final settlement of civil accounts. Compared to the Rs 200.1 billion collected in FY 2022-23, this represents a growth of 20%.

A PRA spokesperson confirmed this news to the media on Monday, highlighting that this is the highest collection ever achieved by any provincial revenue authority in Pakistan, surpassing both other provincial authorities and even PRA’s own previous records.

The breakdown of the total collection reveals strong growth across various tax categories:

• Punjab Sales Tax on Services (PSTS): Rs 223.4 billion (up 17% from Rs 191.2 billion last year)

• Punjab Workers Welfare Fund (PWWF): Rs 10.2 billion (reflecting a substantial 92% increase compared to Rs 5.3 billion)

• Punjab Infrastructure Development Cess (PIDC): Rs 5.5 billion (demonstrating impressive growth of 55% from Rs 3.5 billion)

The positive trend continued in June 2024, the last month of FY 2023-24. PRA collected Rs 32.7 billion during this period, a 16% increase from Rs 28.2 billion collected in June 2023.

A closer look at June’s figures reveals:

• PSTS collection reached Rs 29 billion, reflecting a 9% increase.

• PWWF saw a significant 150% growth, with Rs 3 billion collected.

• PIDC collection rose by 83% to Rs 629 million, compared to Rs 344 million in June 2023.

The spokesperson attributed this success to the leadership of Punjab Finance Minister Mujtaba Shujaur Rehman and PRA Chairperson Dr. Javed Iqbal Sheikh. They acknowledged the challenges faced during FY 2023-24, particularly the economic downturn, but emphasized PRA’s persistent efforts to increase Punjab’s own source revenue.

As a major contributor to Punjab’s finances, PRA accounts for approximately 66% of the province’s Own Source Revenue (OSR). The authority remains committed to maximizing provincial revenue through a dedicated team and by encouraging taxpayers to fulfill their obligations by paying taxes on time.

Looking ahead to FY 2024-25, PRA’s strategy to achieve its target includes:

• Utilizing information technology effectively to broaden the tax base.

• Integrating databases with other organizations.

• Sharing data with entities like the Federal Bureau of Revenue (FBR) and other provincial departments.

• Automating business processes.

• Facilitating and educating taxpayers.

• Investing in workforce training.

• Expanding PRA’s reach.

The impressive revenue collection figures stand as a testament to the effectiveness of PRA’s strategy. By ensuring compliance with tax laws and fostering a business-friendly environment, PRA is contributing to economic growth in Punjab.

Date: 2024-06-30

Details:

Islamabad, June 30, 2024 – The Federal Board of Revenue (FBR) announced on Sunday that it has surpassed its tax collection target for the fiscal year 2023-24 by Rs 54 billion, achieving a total collection of Rs 9.306 trillion.
This accomplishment exceeds the assigned target of Rs 9.252 trillion and is anticipated to increase further following the reconciliation of figures.
The FBR’s revenue collection demonstrated a significant 30 percent growth compared to the previous fiscal year. This impressive performance was attributed to historic collection figures throughout the financial year. The FBR added Rs 2,142 billion to its revenue compared to last year’s collection of Rs 7.164 trillion, including Rs 1,183 billion collected in June 2024 alone. This achievement is particularly noteworthy given the reduction in imports from $55 billion to $53 billion, necessitating a greater reliance on domestic taxes.
Structural Improvements and Policy Shifts
In addition to surpassing the annual target, Pakistan’s tax system saw significant structural improvements, largely due to the active involvement of the Prime Minister and Finance Minister. This progress reflects a strategic policy shift emphasizing domestic resource mobilization, increased direct taxation on the wealthy, and facilitation of businesses and exporters through prompt refund issuance.
• Under the Prime Minister’s directives, the FBR disbursed refunds totaling Rs 469 billion during FY 2023-24, a 42 percent increase from the Rs 331 billion disbursed in FY 2022-23.
• The government’s focus on direct taxes played a crucial role in achieving the revenue target, with direct taxes contributing 47 percent to the total revenue collection.
• Domestic taxes saw substantial improvement, with the FBR collecting Rs 6.128 trillion in domestic taxes and Rs 3.178 trillion in import taxes, marking a 37 percent growth in domestic taxes and an 18 percent growth in import taxes despite the compression in imports.
Breakdown of Revenue Collection
For FY 2023-24, the FBR collected Rs 4.528 trillion in income tax, a 38.4 percent increase from the Rs 3.270 trillion collected during the same period last year. Under the head of sales tax, Rs 3.098 trillion was collected compared to Rs 2.593 trillion the previous year. The collection under the head of Federal Excise Duty (FED) amounted to Rs 576 billion, up from Rs 370 billion, while customs duty revenue reached Rs 1.104 trillion, compared to Rs 931 billion last year.
Commitment and Future Prospects
Despite numerous challenges, the dedication and commitment of FBR officers and officials to achieving their revenue targets were evident. The economic growth of Pakistan is closely linked to the successful achievement of these targets, and the FBR’s workforce remains determined to continue delivering strong performance in the coming years.

Looking ahead, the FBR is poised to meet the revenue collection targets for FY 2024-25, with a renewed commitment to serve the nation and support its economic objectives. The structural improvements and policy shifts implemented in the past year provide a solid foundation for future successes and continued growth in Pakistan’s revenue collection efforts.

Date: 2024-06-30

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Karachi, June 30, 2024 – The Federal Board of Revenue (FBR) has introduced a new tax regime for builders and developers through the Finance Act, 2024, aiming to streamline taxation in the real estate sector.
According to details outlined in the Finance Act, 2024 and commentary provided by A. F. Ferguson & Co., builders and developers will now be subject to specific tax rates based on their activities:
1. Construction and Sale of Buildings: Builders and developers involved in the construction and sale of residential, commercial, or other buildings will be taxed at a rate of 10% on their taxable profits from these activities.
2. Development and Sale of Plots: For those engaged in the development and sale of residential, commercial, or other plots, the applicable tax rate stands at 15%.
3. Combined Income: If a builder or developer derives income from both construction and sale of buildings as well as development and sale of plots, a composite tax rate of 12% will apply on their taxable profits from these combined activities.
The Act specifies that taxpayers must accurately account for the nature and source of credited amounts or investments, ensuring that no credits are claimed in excess of taxable profits computed under the prescribed rates. However, if actual taxable income exceeds the computed taxable profits, taxpayers can claim credits for the excess income, subject to payment of taxes at normal rates applicable.
Importantly, builders or developers established under specific legislative acts, provincial assemblies, or presidential orders, engaged in activities benefiting employees or involved in planning, developing, and regulating housing and ancillary facilities in notified areas, are exempt from this tax regime.
“This new tax framework aims to bring clarity and fairness to the taxation of builders and developers,” commented a spokesperson from A. F. Ferguson & Co., emphasizing the Act’s role in promoting transparency and accountability in the real estate sector.
The introduction of these tax provisions reflects the government’s efforts to enhance revenue collection from the real estate sector while promoting sustainable development and compliance with tax laws. It also seeks to discourage undocumented transactions and promote a level playing field among builders and developers operating in Pakistan.

Date: 2024-06-30

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Karachi, June 30, 2024 – The Sindh Revenue Board (SRB) has achieved a remarkable feat by surpassing its revenue collection target for the fiscal year 2023-24, demonstrating a significant 28% growth in tax collection compared to the previous fiscal year.
In an official statement released on Sunday, SRB announced that it had exceeded its revenue target by collecting Rs 237 billion during the fiscal year ending June 2024. This achievement not only surpasses the assigned target of Rs 235 billion but also marks the highest-ever revenue collection in any single month since SRB’s inception 14 years ago, with Rs 28 billion collected in June 2024 alone.
The impressive growth of 28% from Rs 185 billion collected in the fiscal year 2022-23 underscores SRB’s effective tax administration amidst challenging economic conditions, including a sluggish 1.21% GDP growth in the service sector and recent tax-free budgets. Despite these challenges, SRB’s proactive measures and strategic planning have led to this substantial increase in revenue.
“This accomplishment highlights the dedication and resilience of the SRB team,” remarked a spokesperson for SRB, expressing gratitude to taxpayers for their support and confidence. The board also acknowledged the unwavering support of the Government of Sindh in achieving these milestones, emphasizing the collaborative effort that contributed to surpassing the fiscal targets.
SRB reaffirmed its commitment to continue its mission of revenue generation for the welfare and development of the people of Sindh. The board’s success not only boosts confidence in its ability to effectively manage tax revenues but also bodes well for the economic health of the province. It reflects a positive outlook amidst prevailing economic challenges, showcasing SRB’s pivotal role in sustaining fiscal stability.
The stellar performance of SRB in surpassing fiscal targets and achieving significant revenue growth sets a benchmark for effective tax administration in Pakistan. It also signifies a robust economic outlook for Sindh in the upcoming fiscal years, fostering optimism among stakeholders about continued economic resilience and growth prospects.

Date: 2024-06-30

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KARACHI: Expressing his resentment over the lack of civic facilities in Karachi, former chairman of the Federal Board of Revenue (FBR) Shabbar Zaidi has called for making the city the capital of the country for its economic development.
He was speaking during a session on Offshore Assets of Pakistani Citizens, organized by the Pakistan Institute of International Affairs (PIIA) at the institute’s library hall here on Saturday.
Shabbar said Pakistanis hold assets worth $200 billion outside the country.
According to him, $150 billion worth of Pakistani assets are overseas. He emphasized that owning assets abroad is not inherently wrong, noting that $50 billion worth of assets were generated by Pakistanis from abroad, which is legal.
However, he pointed out that $100 billion of these overseas assets should be scrutinized. Zaidi highlighted that the total assets of Pakistanis abroad are equivalent to the country’s total debts. Furthermore, he claimed that the owners of $100 billion worth of these assets cannot provide a money trail.
Zaidi also noted a shift in the pattern of overseas property investments. Until 2000, Pakistanis primarily invested in properties in Canada, the US and the UK. Post-2000, a significant number of properties have been developed in Dubai.
Shabbar revealed that Pakistanis possess significant overseas accounts and have established numerous trusts owned by Pakistani companies.
He pointed out that many individuals who do not wish to reside in Pakistan have substantial overseas assets inherited from their families, which they often do not declare, leading them to criticize the country.
He discussed the issue of commissions on purchasing plant and machinery, emphasizing that both commissions and bribe money taken by politicians are frequently parked abroad. This practice, Zaidi argued, is a key factor in the destruction of industrial development banks in Pakistan, contributing to the country’s economic woes.
He said Nawaz Sharif’s government introduced moneychangers, facilitating untraceable dollar transfers.
Zaidi explained that these moneychangers provided dollars without requiring identification, allowing individuals to deposit these dollars into foreign currency accounts and transfer them abroad. This system operated without scrutiny as no one inquired about the origin of the capital being transferred.
“Since 1992, most money in Dubai has gone out in dollars through the same moneychanger,” Zaidi added. Former FBR chairman said he granted amnesty in 2018 because they had no choice. “I wanted to bring the assets on record and was substantially successful,” he said. “The Supreme Court couldn’t take any action in its suo motu notice.”
He said the government imposed a wealth tax on these assets and drove people away, saying that as promised, wealth tax should not have been imposed because the government received a good response and substantial foreign assets were declared.
Reflecting on Pakistan’s economic trajectory since its inception, former FBR chairman lamented the country’s misfortunes, attributing its challenges more to internal factors than external influences.
“If Pakistan doesn’t manage its foreign assets well, then Pakistan will have no chance. We must manage these assets to move forward,” he added.
Shabbar commented on Karachi’s development, noting the absence of a mass transit system hindering its progress. He questioned as to why the Sindh government seeks funds from the federal government for mass transit?
Zaidi pointed out that no Prime Minister of Pakistan has stayed overnight in Karachi for nine years. He criticized both the federal and Sindh governments for Karachi’s mismanagement, stating that Pakistan Steel is closed and PIA has been relocated to Islamabad.
Regarding the federal budget, he criticized the lack of strictness in tax collection from retailers. He mentioned that jewelers are paying an annual tax of three lakhs. He highlighted that 40 tons of gold enters Pakistan annually, yet not a single ton is legally imported. “Who brings this new gold and where does it come from?” he questioned.
Zaidi proposed dividing Pakistan’s four provinces into 10 for better governance. He also suggested improving trade relations with India. Additionally, he emphasized that until new provinces are formed, the finance bill should be approved by the Senate.
Copyright Business Recorder, 2024

Date: 2024-06-29

Details:

Some amendments part of the final budget

Reuters | BR Web Desk Published June 28, 2024

ISLAMABAD: Pakistan’s parliament on Friday passed the government’s tax-heavy finance bill for the coming fiscal year ahead of more talks on a new bailout with the International Monetary Fund (IMF) as it seeks to avert a debt default for an economy growing at the slowest pace in South Asia.

The government presented the tax-loaded budget two weeks ago, drawing sharp criticism from the opposition parties and other business entities that expressed concern over rising government expenditures and little fiscal room for economic growth.

Finance Minister Muhammad Aurangzeb moved the finance bill in parliament, which was endorsed by the ruling alliance led by Prime Minster Shehbaz Sharif. Pakistan Muslim League-Nawaz (PML-N), the party in command at the centre, saw its main coalition partner, the Pakistan Peoples Party, disagree with some of the budgetary measures before announcing its support earlier this week.

Meanwhile, addressing the National Assembly, the finance minister said that the country’s economic indicators are moving in the right direction.

“Our current account deficit has decreased significantly, the fiscal deficit is under control, while currency has stabilised,” said Aurangzeb.

“Inflation rate, which is dynamic in nature, has lowered from 38% to 11%. The economy has stabilised, and we are continuing with this stability to achieve further growth.”

He reiterated that the tax-to-GDP ratio cannot remain at current 9.5%. “It is completely unsustainable”, he said, “and we need to increase it to 13% in the coming three years”.

“If it was up to me, I would have immediately ended the category of non-filers,” he said.

“But we have taken important steps for next year, and have increased tax rates to punitive levels so that a non-filer is compelled to pay taxes,” he added.

Govt ought to have consulted us before budget presentation: Bilawal

Speaker Sardar Ayaz Sadiq announced the passage of the bill in a live TV telecast.

Policymakers have set a challenging tax revenue target of Rs13 trillion ($46.66 billion) for the year starting July 1, up about 40% from the current year, in the national budget presented on June 12.

The budget is an important step towards taking onboard the IMF, which is engaged with Pakistan for a possible loan programme of $6 billion to $8 billion.

The rise in the tax target is made up of a 48% increase in direct taxes and a 35% hike in indirect taxes over revised estimates for the current year.

Non-tax revenue, including petroleum levies, is seen increasing by a whopping 64%.

The tax would increase to 18% on textile and leather products as well as mobile phones besides a hike in the tax on capital gains from real estate. Workers will also get hit with more direct tax on income.

Opposition parties, mainly parliamentarians backed by the jailed former Prime Minister Imran Khan, rejected the budget, saying it will be highly inflationary.

Pakistan has projected a sharp drop in its fiscal deficit for the new financial year to 5.9% of gross domestic product (GDP), from an upwardly revised estimate of 7.4% for the current year.

Pakistan’s central bank has also warned of possible inflationary effects from the budget, saying limited progress in structural reforms to broaden the tax base meant increased revenue must come from hiking taxes.

The upcoming year’s growth target has been set at 3.6% with inflation projected at 12%.

Date: 2024-06-28

Details:

Recorder Report Published June 28, 2024

KARACHI: Sindh Chief Minister Syed Murad Ali Shah on Thursday assured the Sindh Assembly that new taxation will not hurt the poor while opposition wanted the failing power distribution companies should be sent packing.

In concluding speech during seventh sitting for the budget 2024-25 debate, Murad told the house that his government is growing its tax net but poor will not see any impacts, pledging to complete the maximum number of uplift projects next fiscal year.

Besides, paying compassions of Rs1 million to families of each citizen, who was killed in armed robberies in street crimes, he said that the government is also set to solve all other issues, which Karachi is grappled for a long-run including water problem.

Expressing affection for the metropolis, he said that “Karachi is also my city and its development is dearer to me.” The government intends to expand its tax base, he said that any private schools charging over Rs500,000 annually will come under the taxation radar.

Taxes, he said, collected from the highly-charging academia will be transferred to the Sindh Education Department to invest in the government-run schools. Similarly, he said that expensive hospitals, which charge bed fee up to Rs25000 a day and doctors with over Rs3000 fee will pay the tax.

The Jinnah Hospital, he said, will soon see a third cyber knife functional by this October, adding that the government’s children hospital in Korangi provides better services than those in the private sector. The government has also opened robotic surgery in the SIUT, which treats patients from countrywide.

The chief minister claimed that his government poured in funds to spread out a web of roads across the province, saying that he has also sought a custody of Lyari Express from the federal government to run heavy traffic. He said that his government has also done projects in the sports sector with setting up 22 youth development centers.

He told the assembly that the government has completed some 3580 uplift projects over the past five years, complaining that the federal rule between 2018 and 2022 did not assign a single development scheme to Sindh.

The NHA is building road infrastructure across the country, except his province, he said that the federal government has yet to pay up to Rs55 billion to Sindh. He also sought the opposition help for Karachi development, announcing to complete the Hub canal project within a year.

He also pledged that his government will complete the K4 water project. On guarding the environment, Murad said that Sindh leads it with $22 million spending. He also announced to develop the world’s largest housing scheme.

For Karachi, he said over 100 MGD water supply will be made in a year. The opposition did not table any cut motions to force the government to reduce the budget allocations. However, the house voted to a supplementary budget of Rs213.164 billion.

Earlier, Ali Khurshidi, the opposition leader resumed his budget speech in the house, which he had left off the other, asking the government to seek a solution to the failing power distribution companies for their long-hours outages.

He said that these companies should leave Sindh if they cannot provide electricity to the consumers. He spelled out water scarcity as the “biggest” problem for Karachi. He said that city receives only 400 MGD water while it needs 1,200 MGD. The public want a solution to their problems, he added.

He also lashed out at K-Electric for its collective punishment system, which it uses by carrying out power cuts indiscriminately against all consumers, even those paying them timely bills. He also questioned about the development of Karachi circular railways.

He asked the government for its taxation, saying that even taxes are piling up but the public are unable to receive gas, water and other amenities. He also highlighted issues in education, health and land grabbing in the city. The house is set to vote on Sindh Finance Bill on Friday to pass the budget as well.

Date: 2024-06-28

Details:

June 28, 2024

Islamabad, June 28, 2024 – Finance Minister Mohammad Aurangzeb emphasized the necessity of broadening Pakistan’s tax base by incorporating retailers and the real estate sector into the tax net.

Speaking on Friday, Aurangzeb underscored the government’s commitment to curbing tax evasion and enhancing revenue collection from these pivotal sectors.

Highlighting specific measures, Aurangzeb reaffirmed that certain essential sectors would continue to benefit from tax exemptions. Medical surgery equipment, educational materials including school books and printing supplies, as well as items from the former Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATAs), would remain exempt from taxes.

During a session in the National Assembly discussing the budget for 2024-25, Aurangzeb addressed concerns about tax exemptions, particularly regarding health standards. He stressed that while exemptions were crucial for health and education during challenging economic conditions, tax relief could not extend to packaged milk that did not meet required health standards.

Turning to broader economic strategies, the Finance Minister outlined efforts to rebalance tax burdens and provide relief across various sectors. Notably, tax exemptions were extended to sectors such as agriculture, fertilizers, and certain categories within the education sector to alleviate financial pressures.

Aurangzeb articulated ambitious fiscal goals, aiming to elevate Pakistan’s tax-to-Gross Domestic Product (GDP) ratio from its current 9.5% to 13%. He underscored that achieving this target was crucial for the country’s self-reliance and for progressing towards the conclusion of the International Monetary Fund (IMF) program.

In pursuit of these objectives, Aurangzeb emphasized the government’s commitment to modernizing and digitizing the Federal Board of Revenue (FBR) to streamline tax collection processes. He affirmed that the era of non-filers evading taxes would end, with every individual and entity expected to contribute their fair share to national revenue.

Acknowledging the importance of strategic sectors in Pakistan’s economic growth, Aurangzeb highlighted record allocations in the budget for 2024-25 aimed at bolstering Information Technology and Agriculture. These investments are intended to foster innovation, productivity, and sustainable development across these critical domains.

As Pakistan navigates economic challenges and strives for fiscal stability, Aurangzeb’s proposals and assurances signal a proactive approach to enhancing revenue streams while safeguarding essential sectors through targeted tax policies.

Date: 2024-06-28

Details:

June 28, 2024

Karachi, June 28, 2024 – The State Bank of Pakistan (SBP) announced on Friday the bank timings for the collection of duty and tax during the last three days of the fiscal year 2024-25.

To facilitate taxpayers in the payment of government duties and taxes through Alternate Delivery Channels (ADCs) and over-the-counter facilities, all banks will observe extended banking hours on June 28th, 29th, and 30th, 2024.

According to the SBP, on Friday, June 28, 2024, all commercial banks will remain open from 9:00 a.m. to 6:00 p.m. On Saturday, June 29, 2024, branches that typically operate on Saturdays will observe the same hours, from 9:00 a.m. to 6:00 p.m. On Sunday, June 30, 2024, these branches will further extend their hours from 9:00 a.m. to 10:00 p.m.

During these three days, the SBP said that the National Institutional Facilitation Technologies (NIFT) will collect instruments related to government receipts and payments from bank counters at 6:00 p.m. on Friday and Saturday, and at 10:00 p.m. on Sunday. These instruments will be processed through Special Clearing the following day. NIFT will provide the clearing fate by 1:00 p.m. on June 29th and 30th, and by 10:00 a.m. on July 1st, 2024.

For the purpose of the FY 2023-24 closing exercise on July 1st, 2024, the SBP and Pakistan Real-time Interbank Settlement Mechanism (PRISM) will operate under the value date of June 30, 2024. Banks are advised to treat June 29th and 30th as working days in their systems to enable the settlement of special clearings as per the specified schedule.

To eliminate the issue of spillover of tax receipts, banks must ensure that no instrument related to government receipts, lodged during the specified office hours, remains unattended at branch counters. All such instruments must be processed in the special clearing with the value date of June 30, 2024, the SBP added.

Additionally, the SBP has instructed banks to keep their relevant branches open on June 28th, 29th, and 30th, 2024, as long as necessary to facilitate the special clearings for government transactions handled by NIFT.

These measures aim to ensure a smooth and efficient process for the collection of government duties and taxes at the close of the fiscal year. The extended hours and special clearings are intended to provide taxpayers with ample opportunity to meet their fiscal obligations and to avoid any delays or complications in the closing of the fiscal year.

The SBP’s directive reflects its commitment to maintaining fiscal discipline and supporting the government’s revenue collection efforts as the country transitions into the new fiscal year.

Date: 2024-06-28

Details:

Sohail Sarfraz Published about an hour ago

ISLAMABAD: The Federal Board of Revenue (FBR) has granted license to M/s Haball (Pvt) Ltd, Karachi for the purpose of integration of electronic invoicing.

According to the notification issued by the FBR’s Directorate of Digital Initiatives, the FBR had invited Expressions of Interest (E0Is) on March 10, 2024 for award of license to prospective licensees for integration of electronic invoicing under Chapter XIV-BB of the Sales Tax Rules, 2006 as amended vide SRO 1788(1)/2023 and Chapter VITA, Online Integration of Businesses, of the Income Tax Rules, 2002 as amended vide SRO 428(1)/2024.

In response to the Board’s advertisement for submission of E0Is, 38 applications were received. The designated Licensing Committee (Committee) constituted for the purpose examined the applications and supporting documents viz-a-viz the required criteria and recommended that license may be granted to M/s Haball (Pvt) Ltd., Karachi.

Rule 150Z0ZK (Sub-rule 5) of Sales Tax Rules, 2006 as amended vide SRO No. 1788(1)/2023 dated December 11, 2023 provides that “The licensing committee shall grant the license to the recommended companies with the approval of Member Digital Initiatives and shall publish list of licensees.”

Since the designated Committee has already given its recommendations and Member Digital Initiatives, FBR has approved the recommendations for grant of license to the qualified company, ie, M/s Haball (Pvt) Ltd. (NTN 7623346) as provided in the Rule referred above, license for the purpose of integration of electronic invoicing under Chapter XIV-BB of the Sales Tax Rules, 2006 as amended vide SRO 1788(1)/2023 and Chapter VIIA, Online Integration of Businesses, of the Income Tax Rules, 2002 as amended vide SRO428(1)/2024 is hereby granted to the said company. The license thus granted will be published on the FBR’s Website for record and information, the FBR added.

Date: 2024-06-28

Details:

Recorder Report Published about an hour ago

KARACHI: Sindh Chief Minister Syed Murad Ali Shah on Thursday assured the Sindh Assembly that new taxation will not hurt the poor while opposition wanted the failing power distribution companies should be sent packing.

In concluding speech during seventh sitting for the budget 2024-25 debate, Murad told the house that his government is growing its tax net but poor will not see any impacts, pledging to complete the maximum number of uplift projects next fiscal year.

Besides, paying compassions of Rs1 million to families of each citizen, who was killed in armed robberies in street crimes, he said that the government is also set to solve all other issues, which Karachi is grappled for a long-run including water problem.

Expressing affection for the metropolis, he said that “Karachi is also my city and its development is dearer to me.” The government intends to expand its tax base, he said that any private schools charging over Rs50,000 annually will come under the taxation radar.