Day: September 17, 2021

Federal Minister for Planning and Development Asad Umar has dispelled the impression that the pace of work on the CPEC [China-Pakistan Economic Corridor] projects has been slowed down, reaffirming that major work of the projects has been completed by the current government.

Addressing a hurriedly called news conference on Friday, the Minister said two major sectors — power and infrastructure — in the first phase of CPEC were the main focus.

“Power projects with an installed capacity of 3,340-MW were completed during the previous government, while 5,864-MW power projects have been completed during the current government’s tenure,” he said. Apart from it, he added, work on another 1,824 MW project was also recently started and would complete after the tenure of this government.

Speaking about the infrastructure and road sector, the Minister informed the media persons that the PML-N [Pakistan Muslim League-Nawaz] government completed 394-KM long motorways and highways under CPEC, while the current government had so far completed 413 kilometers of the motorways and highways.

Asad Umar said the PML-N government totally ignored the ‘Western Corridor’ that was the heart of CPEC. He underlined that the Gwadar-Hoshab road was completed by the previous government, while the Hakla-Dera Ismail Khan Motorway, which was initiated by the PML-N government, was completed by the current government, and it would be operational in the next month. Apart from these two projects, he maintained, the previous government could not reach even the initial approval stage of any of the road projects on the Western Alignment.

The Minister said the Zhob-D. I. Khan road (210-KM) was approved and a loan application was submitted, while negotiations for the loan were in process. Similarly, he added, the contractor of the Zhob-Queta project had been mobilized and the PC-1 of the Quetta-Khuzdar road was approved. He underlined that funding for this project had already been allocated under the Public Sector Development Program (PSDP) 2021-22.

Dilating on the CPEC projects, he highlighted that the current government completed 67% work of the 110-KM Khuzdar-Basima road and the rest of it will be completed soon. He said the 146-KM Hoshab-Awaran road project had also been approved and a contractor had been mobilized. He underlined that the Hoshab-Awaran project was an integral part of the CPEC central alignment that connected the port city of Gwadar with Sindh. “In fact, real work on Western Corridor of CPEC was started during PTI government,” said Asad Umar, adding that it did not wait for the Chinese investment and started work on the projects with its own resources under PSDP.

Asad Umar said the government was also starting work on connecting roads to the Western Alignment. The Peshawar-D. I. Khan Motorway project was one such project which was recently approved, he informed. He held that the 460-KM Karachi-Quetta-Chaman road was also approved. One of its portions, he explained, will be completed by the government itself, while the other sections of this project will be constructed under a public-private partnership. The Minister asserted that these connecting roads and the Western Alignment were being built to take maximum benefit of the opportunities in Afghanistan as peace and stability will hopefully prevail in the country.

He said, “after completion of the first phase, we were entering in the second and very important phase of CPEC, under which the investment would come to a range of sectors including industrialization, agriculture, livestock, science and technology, and other social development sectors.”

He remarked that before the current government, there was not a single operational Special Economic Zone (SEZ) under CPEC. However, he maintained, two SEZs namely Allama Iqbal Industrial Zone in Faisalabad and Rashakai in Khyber Pakhtunkhwa were so far made operational in this government, while another SEZ named Dhabeji will soon be functional once the Sindh government select a contractor for it.

Asad Umar said that agriculture was an important sector in Pakistan, adding that China had vast experience in this sector and it could potentially help Pakistan strengthen the sector. So far, eight important initiatives in the agriculture sector have been approved through CPEC under which the Chinese will help Pakistanis to develop, he concluded.

Source: Pro Pakistani

President has promulgated Tax Laws (Third Amendment) Ordinance 2021 to legally bound the National Database and Registration Authority (NADRA) to share Pakistani citizens’ data with the Federal Board of Revenue (FBR) for broadening of the tax base.

The government has given ample powers to the Federal Board of Revenue (FBR) to disable mobile phones/SIMS, disconnect electricity and gas of non-filers of income tax returns under the new set of enforcement measures taken to expand the tax base.

The President has promulgated the Tax Laws (Third Amendment) Ordinance 2021 to also given powers to the FBR to discontinue gas and electricity connections of persons, including tier-1 retailers who are either not registered, or if registered, not integrated in terms of section 3(9A) of the Sales Tax Act 1990.

The FBR has been empowered to issue an Income Tax General Order in respect of persons who are not appearing on ATL but are liable to file a return under the provisions of this Ordinance. The Income Tax general order may entail any or all of the following consequences for the persons mentioned therein: Disabling of Mobile Phones or Mobile Phone Sims; discontinuance of electricity connection; and the discontinuance of gas connection.

Under the new Tax Laws (Third Amendment) Ordinance 2021, the National Database and Registration Authority shall, on its motion or upon application by the Board, share its records and any information available or held by it, with the Board, for broadening of the tax base or carrying out the purposes of this Ordinance.

The NADRA may submit proposals and information to the Board to broaden the tax base and identify in relation to any person, whether a taxpayer or not. The Board may use and utilize any information communicated to it by the NADRA and forward such information to an Income Tax authority having jurisdiction in relation to the subject matter regarding the information, who may utilize the information.

The penalty for non-filers has been increased to Rs. 1,000/- per day of default. The government has increased the amount of penalty for tier-1 retailers who are not integrated with the FBR. The government has also imposed an additional advance tax on the rates ranging from 5 percent to 35 percent on professionals using domestic electricity connections. The professionals covered accountants, lawyers, doctors, dentists, health professionals, engineers, architects, IT professionals, tutors, trainers, and other persons engaged in the provision of services.

The government has also enhanced Extra Tax rates on industrial and commercial gas and electricity connections to unregistered persons. The government has granted sales tax zero-rating to fat-filled milk, including those sold in retail packing under a brand name or a trademark, and also withdrawn exemption on import of fruit from Afghanistan. Any expenditure in excess of Rs. 0.25 million by the corporate sector to be inadmissible if not paid through digital mode. The salaries in excess of Rs. 25,000/- per month if paid through digital mode to be admissible expense along with paid through other banking channels.

Under the Ordinance, the reduced rate of 16 percent sales tax would be applicable on supplies made by POS integrated outlets where payment is made through digital mode; reduced rate of 14 percent on remeltable scrap imported by steel melters; reduced rate of 5 percent on import of electric vehicles on CBU condition and reduced rate of 16.9 percent sales tax on business to business transactions, where payment is made through digital mode. Moreover, the government has excluded steel and edible oil sectors from the charge of Further Tax u/s 3(1A) of the Sales Tax Act, 1990.

The government has introduced an enabling provision for making facilitator of the online marketplace as a withholding agent under Eleventh Schedule to the Sales Tax Act, 1990, and the requirement of integration for specified persons to integrate the invoice issuing machines with the Board’s Computerized System.

Through the Tax Laws (Third Amendment) Ordinance 2021, the government has introduced a mechanism of appeal against the order of Director General Valuation by amending section 25D. An appeal may be filed with Member (Customs Policy). Further appeal may be filed with the High court against the order of Member (Customs Policy). Consequential changes in sections 194A and 196 are also proposed. The mechanism of reassessment of already assessed GD is proposed to be streamlined. The corporate guarantee is to be included in the definition of security instrument for provisional clearance. This will facilitate and avoid high financial costs for industrial importers.

The Ordinance has granted an exemption to certain raw materials for auto-disabled syringes and exemption on import of POS machines granted to all persons.

The government has also clarified that the remittance through Money Service Bureaus (MCBs), Exchange Companies (ECs), and Money Transfer Operators (MTOs) such as Western Union, Money Gram, and Ria Finance or other like entities shall be deemed to constitute foreign exchange remitted from outside Pakistan through normal banking channels, Ordinance added.

Source: Pro Pakistani

The taxation policies toward the tobacco industry in Pakistan need to be based on real evidence, covering facts and figures about the share of illicit and smuggled products in the Pakistani market.

This was the crux of a discussion by trade experts during a webinar titled, ‘Illicit, Illegal or Smuggled Tobacco Products in Pakistan – Deconstructing Tobacco Industry’s Narratives’, organized by the Sustainable Development Policy Institute (SDPI) on Friday.

On the occasion, Additional Collector Pakistan Customs, FBR, Dr. Karam Elahi, highlighted the issues concerning the tobacco industry. He asserted that one of the major problems facing the country’s economy was the lack of written documentation and the same applied to the tobacco industry. He suggested that there should be tobacco control in the country. He said that political consensus should be developed to come up with the right tax policies to respond to challenges in the industry.

Country Lead, The Union, Mr. Khurram Hashmi was of the opinion that it was high time to revisit the existing debate around the industry, keeping in view the well-being of the people. Besides, he said, coordination among stakeholders should be improved to build a joint narrative about the tobacco industry and taxation issues.

While presenting facts and figures about illicit tobacco trade in Pakistan, Executive Director, The Initiative, Dr. Amina Khan asserted that regular and timely information on tobacco users of Pakistan could help make key policy decisions pertaining to the industry and the taxation issues. She said there were several measures that could be taken to stop and discourage tax evasion in the industry. She stressed the need for a track and trace system and upstream omg the enforcement, using the IOCO [Input Output Co-efficient Organization] ratio to respond to various loopholes.

Earlier, Mr. Waseem Janjua, a senior researcher at SDPI, highlighted that there were various narratives about the illicit trade and share in taxation by tobacco companies, but most of such narratives were not based on truth. He concluded that one in every six packs consumed in Pakistan could be illicit, whereas tobacco companies tended to misguide the government about the facts to influence taxation policies.

Senior analyst, Mr. Waseem Saleem, was of the view that “we have a complex market of tobacco.” He suggested that all the factors pertaining to illicit trade and smuggling and their impacts on the industry should be thoroughly analyzed for the right policy measures.

Earlier, Syed Ali Wasif Naqvi, Senior Research Associate SDPI, presented an overview of the tobacco industry and taxation policy in Pakistan.

Source: Pro Pakistani