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pAkISTAN’S FIRST INDEpTH NEWSpApER ON CUSTOMS
Vol 1 Issue No. 46
Weekly
karachi, Tue Dec 31 - Mon Jan 06, 2014
Regd. No, MC-1381
Price rs. 50.00
INTRODUCING ITTMS
the potential of transit trade warrants immediate attention of the government to put in place an efficient transit trade management system, says Dar | SEE pAGE 02 | REFORMS INTAXATION SySTEM
HIGHERTAXREVENUETO OVERCOMEECONOMICCRUNCH – CoMMerCe MInISter KhurrAM DAStGIr –
the tax system should be shifted to fixed taxation with the categories A, B and C to avoid tax evasion, says Senator Jaffar Iqbal | SEE pAGE 06 | INClUDING ATT IN WEBOC
ISLAMABAD
MIAN SHAFQAT SAEED
All transit cargo and domestic clearance of import consignments would be done throughWeBoC from Jan 1, says Member Customs | SEE pAGE 03 | CARTOONS SpECIAl
| SEE pAGE 11 |
— Exclusive Customs Today photos
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inister for Commerce and Textile Engineer Khurram Dastgir said that the government is trying to widen the tax net to fend off Linancial crunch and all the people should play their due responsibility in this regard. The government has taken a number of practical steps to enhance exports of the country. Prime Minister Nawaz Sharif himself is visiting different countries to promote positive image of Pakistan to gain conLidence of foreign countries and potential investors while offering them safe investment opportunities in the country. That is why we are granted GSP Plus status by European Union. In an exclusive interview with Customs Today, the minister said that a number of technical and legal requirements were fulLilled during last several months to be-
come eligible for GSP Plus status. “In August 2013, our case was put forward and supported by Germany, UK and other countries and we are very thankful for their support. I also appreciate the role of Governor Punjab Chaudhry Sarwar because he used his contacts and links very efLiciently to lobbying for Pakistan’s GSP Plus status”, he added. He said, “Both the ministries performed very well after I took charge of these ministries and I tried my best to bring positive changes and all this happened due to my past experience as the Chairman of the Commerce Committee during the last regime. Now I possess all the expertise related to commerce.” Talking about increasing trade relations with India, the minister said, “We want to improve these ties but only on the basis of equality. We want to enhance such relations with other countries as well but for this we have to improve our law and order situation. We hope Pakistan will get back its image as a peaceful country in the comity of nations.”
I also appreciate the role of Governor Punjab to lobbying for GSP Plus status
Khurram Dastgir said, “The government is trying hard to increase exports but industrialists and exporters have to maintain the standard of their goods as per international standards. We are presenting and exhibiting our best goods in international trade fairs and we are getting positive results as well.” He said that several measures are being taken to ward off energy crisis on emergency basis and we hope we will succeed in our tenure to overcome this crisis. It will deLinitely be helpful to provide cheap electricity to industrialists as well as domestic consumers.” When asked about having two portfolios at a time, he smiled for a while and replied that he is trying his best to fulLil his responsibilities. He urged the youngsters to take full beneLit of Prime Minister’s Youth Business Loan Scheme and avoid any kind of shortcuts. Commenting on Customs Today, the minister congratulated the team of the newspaper and said that it is a good addition in the print media.
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ISLAMABAD
DeCeMBer 31 - JAnuArY 06, 2013
Finance Minister reconstitutes Economic Advisory Council
ISLAMABAD: Federal Minister for Finance Senator Muhammad Ishaq Dar has given the approval for the reconstitution of the Economic Advisory Council. With the Finance Minister in its chair the Advisory Council shall have 19 other members from different walks of life. The members also include Dr. Ishrat Husain, Dean and Director, Institute of Business Administration, Karachi; Dr. Ijaz Nabi, Dean School of Humanities, Social Sciences and Law, LUMS; Abid Hasan, Farooq Rahmatullah (Energy), Zubair Soomro, Banking, Shafqat Ali Jamoot, Agriculturist/Businessman and Arshad Zubairi.
FBR, EOBI, SECp sign MoU to facilitate businesses ISLAMABAD
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Memorandum of understanding (Mou) was signed by Chairman Federal Board of revenue (FBr), tariq Bajwa, Chairman employees old age Benefits Institution (eoBI), M. Ayub Sheikh, and Chairman Security exchange Commission of Pakistan (SeCP), tahir Mahmood in Islamabad to facilitate businesses in their registration with these organizations. the Mou envisages that registration of companies with one organization would mean that it would be valid for all the three organizations and they would no longer be required to register individually with each of the organization separately, said a statement. the Mou is a step towards simplification of procedures and efforts of the government to create conducive environment for business and investors and further improve the ease of doing business in Pakistan. the Finance Minister Senator Mohammad Ishaq Dar was also present on the occasion.
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Govt comes up with integrated transit trade management system: Dar he potential of transit trade through Pakistan warrants immediate attention of the government to put in place a robust and efficient transit trade management system that is capable of providing maximum facilitation to Pakistan’s trading partners as well as countering the threat of illegal trade by strengthening Customs controls. this was stated by Minister of Finance Ishaq Dar while addressing the Integratedtransittrade Management Conference organized by Federal Board of revenue. he said that for Central Asia and Afghanistan the routes through Pakistan are most feasible for trade as other directions involve long distances, lack of infrastructure or prohibitive climate and topography. he added that the integration of our transport corridor with that of Central Asian regional economic Cooperation (CAreC) road transport network would provide seamless connectivity to Pakistani ports at Karachi and Gawadar.this would ultimately
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Member Accounts khawaja Tanveer Ahmed, Member IR Operations Muhammad Ashraf khan and Chief Collector Customs MCC lahore lutfullah Virk.
contribute to the economy of the region. “to achieve its goals of better connectivity with neighbouring countries and expansion of trade links, the government has announced the initiative of economic Corridor which aims to build a high quality modern expressway linking Gwadar with Kashgar as a modern equivalent of ancient silk route.the economic Corridor will open up countless economic opportunities for Pakistan from China to Central Asia. In addition, an Mou with the Afghan Government has been signed to connect Pakistan with Afghanistan through a reliable rail and road network,” said Dar. he also said,“the government realizes that future economic growth depends on the development and modernization of transport & logistics infrastructure. It is the government’s vision to develop transport corridors that open up new areas, facilitate trade and give benefits to maximum people for uplifting their socio-economic condition.” —CT Report
DG I&I Customs Riaz khan
FBR establishes project directorate for ITTMS: Bajwa Br Chairmantariq Bajwa has said that a project directorate on the Integratedtransittrade Management System at FBr headquarters is established to provide a solo-point of contact for development partners, tax management and other stakeholders for smooth implementation of the project. he said this while addressing a conference on Integratedtransittrade Management. he said that four major things have emerged from the discussions and brainstorming during the conference. Firstly, he said, support and willingness of the donors and development partners has been witnessed which he appreciated. Secondly, he said, the conference has given a very clear message that the lead role in the integrated transit trade management would be of FBr.the Board has a major role in the management of transit trade and its lead would be taken by the Customs authorities.thirdly, he said, an interministerial co-ordination committee would be established for smooth implementation of the proposed system.the main office of the committee would be established at FBr house and head of the interministerial co-ordination committee would be FBr Chairman. Fourthly, he said, a project directorate is immediately needed to ensure timely implementation of the proposed system. In this regard, FBr would make directorate functional immediately. on the conclusion of the conference, FBr will develop a paper
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on the‘Integratedtransittrade Management System’and present it to the government for approval, he maintained. he said the FBr wanted to ensure digital mapping of documents filed by the importers and exporters to ensure comparison of the cargo details at the time of entry and exit. through cargo scanning, the Customs department would be able to electronically transmit its images from entry to exit Collectorates. In this regard digital mapping of the documents is necessary for comparison of the transit cargo. Supporting the establishment of Joint Border Customs Stations, tariq Bajwa stated that such stations would be instrumental in checking smuggling of goods across the border. the implementation of electronic Data Interchange (eDI) connectivity and its effective utilisation would expedite clearance of the transit goods destined to Afghanistan. the eDI with Afghanistan has been developed by FBr. —CT Report
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DeCeMBer 31 - JAnuArY 06, 2013
WHT on laden weight reduced to Rs 2
ISLAMABAD: Federal Board of Revenue has reduced the rate of withholding tax of the laden weight for the period from July 1, 2012 to November 17, 2013 in case of goods transport vehicles owners. In this regard, FBR has issued SRO.1064 (I)/2013 according to which the rate of tax shall be reduced to Rs 2 per kilogram for the above mentioned period.
Customs clearance
FBr has envisaged a wide-ranging plan to expand the tax base, improve resource enlistment and increase tax-to-GDP ratio in the current fiscal year. According to the FBr's quarterly review, taking into consideration the various fiscal challenges, FBr has embarked upon various strategies to broaden the tax base and enhance resource mobilization.this step would improve the tax to GDP ratio from 8.5 per cent in previous fiscal year to 9.5 per cent in one financial year. Moreover, a target of 0.7 per cent increase in the next two fiscal years is a major goal which would further improve tax to GDP ratio and bring the country at par the competing/emerging economies. In order to achieve these goals, FBr is fully committed to broaden its tax base and improve tax administration significantly. For broadening of tax base several initiatives have been taken and some are under study. Initially the objective is to incorporate 300,000 new taxpayers. In this regard 49,440 notices have already been issued, and a total of 100,000 notices will be issued by June 30, 2014. Similarly, a detailed plan for outreach program including provisional assessment, collection procedures, penal actions and prosecution proceedings has been chalked out. In order to remove distortions and discrimination in tax structure and to abolish unnecessary concessions a plan for tariff rationalisation and Sros reduction is being chalked out. A Committee headed by Chairman, FBr would submit the plan by December 31, 2013. SinceVAt is primarily a tax based on value addition at source, and exports are zero-rated, there is an inbuilt need for the documentation of transactions involved in entire supply chain.While textiles caters is for major exports of Pakistan, various intermediary manufacturing and processing activities are largely carried out in the unorganised and undocumented sector.this gap is filled by fake invoicing to inflate refunds and suppress local supplies, consequently the refund issue assumed staggering intensity and emerged as a big challenge for the VAt administration in Pakistan. In order to resolve these issues FBr has successfully prepared and implemented Computerised risk Based evaluation of Salestax (CreSt), FBr said.the FBr said that the introduction of an e-filing process accessible to taxpayers for income tax, sales tax and excise at e-FBr portal has been ensured. Customs modernisation reforms are being introduced, aiming at simplifying, standardising and automating customs clearance procedures supported with strong post-clearance audit controls. online connectivity of Customs posts has been developed. risk management principles have been adopted and aVehicle and Containertracking System for monitoring transit trade is now in place.the Afghan Pakistantransit trade Agreement 2010 has replaced the 1965 agreement, with better controls and enhanced facilitation, FBr maintained. —CT Report
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Afghan transit cargo goes under WeBOC: Member Customs ISLAMABAD
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ember Customs of Federal Board of Revenue Nisar Muhammad has said that all transit cargo movement and domestic clearance of import consignments would be done through Web-Based One Customs (WeBOC) clearance system from January 1, 2014. He said this at Integrated Transit Trade Management System conference organised by the FBR. Nisar said that we are moving towards one customs clearance system. The FBR is also trying to facilitate domestic clearances through the WeBOC. Syed Tanveer Ahmed, head of Directorate of Reforms and Automation (Customs) informed the conference about the working of WeBOC. He also explained that functions of the WeBOC and plan to fully implement the system across the country. The Member Customs said that the FBR will do necessary legislation in the customs law in the next federal budget to facilitate the Customs clearance under the new system. Prominent ofLicials of Customs department present at the conference. Naeem Khan, Collector of Model Customs Collectorate Peshawar while speaking at the conference said that the Customs department is not fully equipped with developed Lighting force to effectively tackle the issue of smuggling. There is a need to
— Exlusive Customs Today photo
FBrplanningto broadentaxbase
make legislative and administrative changes to ensure unity of command to prevent smuggling at borders. There is also lack of coordination among Customs and law enforcement agencies which needs to be improved to check cross border illicit trade. Zahoor Raja Collector of MCC Quetta informed the conference that if we compare all border stations, Chaman has the least facilities despite heavy transportation of transit cargo to Afghanistan. Almost 400-500 trucks cross the Chaman border regularly, but there is only one scanner for this purpose.
We are moving towards one customs clearance system, says Nisar Muhammad
Tariq Huda Collector, MCC Preventive, Karachi explained in detail about the limitation of human resource during Customs clearance processes at Karachi. The lack of human resource and technical staff for effectively running scanners is required at ports. He also highlighted methodology to overcome these issues. Chief Collector of Customs Lahore Lutfullah Virk shared his experience about the clearance of consignments through Wagah border. He also highlighted the positive role of the Pak-India Customs liaison committee for speedy clearance of consignments.
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Freight trains start showing progress after 3 years
KARACHI: For the first time in three years, five freight trains left Karachi in a single day for northern destinations. Earlier an acute shortage of locomotives had forced the railways administration to suspend all cargo trains from Karachi. Addition of 15 rehabilitated locomotives to Pakistan Railways fleet in September this year has helped improve punctuality of passenger trains and ensured operation of at least two freight trains daily from Karachi. Suspension of passenger trains and availability of locomotives resulted in restoration of freight service of four trains daily.
tax amnesty scheme for new investors announced ederal Board of revenue has notified a tax incentive package for new investors under which the source of investment would not be asked if it is made on or after the 1st day of January, 2014, and commercial production commences on or before the 30th day of June, 2016 in Greenfield industrial projects. through an Sro 1065(I)/2013, the FBr has notified immunity from penalties, default surcharge and audit for dormant taxpayers, non-ntn holders and ntn holders not filing their income tax returns. the concessions shall not apply to investment made in arms and ammunition, explosives, fertilisers, sugar, cigarettes, aerated beverages, cement, textile spinning units, flour mills, vegetable ghee and cooking oil manufacturing. As per the Sro, the immunity from penalties, default surcharge and audit would be available to an individual, holding an ntn who files a return by February 28, 2014, of the tax years from 2008 to 2012, for which returns have not been field. Provided that for each of the tax year, a minimum tax of rs 20,000 on the basis of taxable income is paid by the taxpayer.the taxpayer shall not be entitled to claim any adjustment of withholding tax collected or deducted under the ordinance. the immunity from penalties, default surcharge and audit would be available to an individual, if the individual files return or returns, as prescribed for this clause, by February 28, 2014 for any or all of the tax years from 2008 to 2012 and has not filed any return for the last five years; is not an ntn holder as on november 28, 2013; declare taxable income for the year which exceeds the amount on the basis of which, tax payable is rs 25,000 or more and has paid the tax. —CT Report
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47pc lawmakers are non-taxpayers: FBR ISLAMABAD
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orty seven percent of the country’s elected legislators from the national assembly and four provincial assemblies all together did not pay income tax and 12 percent of these members do not even have a National Tax Number, according to FBR data. Furthermore, out of 680 members who declared their incomes in their nomination papers, 25 percent have been identiLied as showing lower earnings to FBR for tax deduction as compared to what they declared to the Election Commission of Pakistan. A report reveals scores of top guns in the national and provincial assemblies found falling in the category of non-taxpayers, non-NTN holders, or who Liled false declarations of incomes and taxes. Out of 1,070 members of all the assemblies, 342 belong to the National Assembly, the only authorized institution to impose federal taxes. However, the present assembly has 30 MNAs who are still not registered for NTN while they themselves exercise the voting right for imposing taxes. There are 240 MNAs who declared their income. Whereas, 201 lawmakers said they had made tax payments. The study found that declarations of 53 MNAs were contradicted by FBR data. A comparison of information in nomination papers of 240 MNAs with FBR data found 90 cases with inconsistencies. Many prominent politicians submitted conLlicting income statements to the ECP and FBR. Out of a total of 372 MPAs in the Punjab Assembly, 169 or 43 percent are non-taxpayers. However, the number
might be higher than this as the record of only 351 lawmakers could be accessed. There is no tax record of 19 MPAs while claims of 53 MPAs that they pay tax has been denied by FBR and 43 MPAs do not even have an NTN. The declared income of 51 MPAs is also different from FBR record. Punjab Assembly has 182 lawmakers who claimed to
have paid their income tax liabilities. However, FBR record did not support the claims of 53 MPAs. The Punjab Assembly has 235 MPAs who declared their income. A comparison of the nomination papers with FBR data noted similarity in 184 cases and discrepancy in 51 cases. 169 MPAs, according to record submitted by them, pay zero tax. The report reveals that out of the 168 members of the Sindh Assembly at least 59 members of the Sindh Assembly have not paid any tax in 2012 while 15 do not even have National Tax Number. Record of Live MPAs could not be examined. There are 104 lawmakers in Sindh Assembly who said they had paid their income tax, but the record identiLied at least 40 cases where details given in nomination papers were disputed by FBR data. Sindh Assembly has 119 MPAs who declared their incomes in their nomination papers. The report disclosed that out of 124
Nontaxpaying MNAs are in all the assemblies and belong to all of the major political parties
members of KPK Assembly, 81 did not pay any tax in 2012. In total, the KPK Assembly has 31 MPAs without NTNs which means that 25 percent legislators do not have NTN. Only 36 members of the provincial assembly have claimed they had paid taxes whereas the record of seven was not available. The KP Assembly has 36 members who declared that they had no outstanding income tax liabilities on the dates Lixed by ECP. However, crossmatching with FBR data found out that at least in 17 cases such declarations were not correct. More than half of Balochistan MPAs including eight members of the provincial cabinet have not paid any income tax. The latest study revealed that out of 65 members of the provincial assembly, only 21 MPAs claimed that they had paid income tax while 36 did not. The record of another eight MPAs is not available.
Anothermilstoneachieved!
Customs Today Urdu website launched 1. Dynamic CBM Calculator 2. HS Code Search 3. Tracks Shipments Online 4. Currency Converter 5. World Clock 6. live Vessels Map 7. Distance Calculator 8. Units Converter now we have uploaded all the valuation rulings which are even not uploaded on FBr website or any other website. uploading of all valuation rulings till date aims at facilitating importers and customs agents, one of the most important segments of our community. In short, CUSTOMSTODAy.COM is a powerful, reliable and influential medium of communication that the customs community as well as general readers depend on it for the latest news and information.You can access Customstoday online 24/7.
LAhore
RAHIl yASIN
www.customstoday.com ustomstoday, the only newspaper focussing on the customs community in Pakistan, has achieved another milestone in a short span with launching of its urdu website.We have taken this initiative while keeping in view the interest of a large portion of the Customs community of urdu readers. the Customs community is an important part of the taxation machinery which generates the revenue needed by the government to run its affairs.the customs community comprises customs officers, importers, exporters, customs clearing agents and, at a wider level, people impacted by the government's trade policy, customs rules and regulations and Sros.While launching urdu website of Customstoday, we have tried our best to cover all the sections and segments like our english website and provide all the reference material, links & gadgets, valuation rulings and Sros here as well. through this introductory section in our newspaper, we keep our readers informed about all the updates being made on our
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website. our team of It experts and designers made it happen to design a wonderful urdu website of Customstoday.through eye-catching colour scheme and breathtaking icons for gadgets, we have given a fabulous look to our website.We have already
updated all the reference material like Sros, Pakistan Customs tariff, IGM, eGM and Shipping Companies list.We have also carefully updated all the relevant gadgets to be very useful for importers and exporters on our website including:
For feedback and comments to further improve the website would be highly welcomed. For contact: webmaster@customstoday.com.pk
— Exclusive Customs Today photo
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In an exclusive interview with Customs Today, Senator Jaffar Iqbal said that the credit definitely goes to pMl-N government because Sajjad kamran is the Member of parliament in the European Union and he played a vital role in pursuing the case of pakistan. Of course, the role of Governor punjab Chaudhry Muhammad Sarwar remained very crucial for lobbying for pakistan with the support of prime Minister Nawaz Sharif and Finance Minister Ishaq Dar.
ISLAMABAD
FAIZA ISRAR
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haudhry Mohammad Jaffar Iqbal, Senator of ruling party PML-N and an important member of Senate’s Standing Committee on Commerce, has said that granting of GSP Plus status proves that international community has complete trust over Pakistan and especially the present government. Although this initiative was taken by the previous government but it is also a fact that the PML-N government stepped up its efforts after coming into power to translate this dream into reality. In an exclusive interview with Customs Today, Senator Jaffar Iqbal said that the credit deDinitely goes to PML-N government because Sajjad Kamran is the Member of Parliament in the European Union and he played a vital role in pursuing the case of Pakistan. Of course, the role of Governor Punjab Chaudhry Muhammad Sarwar remained very crucial for lobbying for Pakistan with the support of Prime Minister Nawaz Sharif and Finance Minister Ishaq Dar. After GSP Plus Status, it is for sure exports of the country would be increased up to $2 billion. Answering to a question, the Senator said that at this crucial juncture, energy crisis has to be dealt with practical measures to get full beneDit of GSP Plus as the previous regimes ignored this important sector due to their shotterm policies. It is the top most priority of the current government to overcome the energy crisis through coal, gas and alternate sources and paying of circular debt in the short term but policies have also been chalked out to rid of this crisis on long term basis. Import of gas for industry and domestic users would also be helpful in this regard. He said that being the Member of Standing Committee of Commerce in Senate, I can say that this GSP Plus status may not endow with huge
proDits initially but presenting our products in international markets will start producing better results with the passage of time. Shedding light on the performance of the Commerce Ministry, he said that the ministry has to play very progressive role to promote and enhance trade activities. “I have suggested for enhancing the accountability to such extent that Pakistani ambassadors and attachés to different countries should also be held answerable before standing committees as they are deputed to promote Pakistan and its image in foreign countries”. He said that other things being ignored by successive governments include discontinuity of policies and lack of departmental structure of organizations and sometimes mishandling of projects by rapid transfers and postings. He said that 14% of the total exports of Pakistan are meant to USA but deterioration of the industry and discontinuity of policies badly affected exports of the country. He said, “A policy takes minimum of three years to get fully implemented. For last 6 years, the tax-to-GDP ratio was calculated at 2.9percent and this year it is improved to 5.9 percent. Similarly revenue collection raised by 17%.” He said, “In this regard, I have suggested to the government that the tax system should be shifted on Dixed taxation with the categories A, B and C in which the large industry should fall under category A, small and medium in B and the shopkeepers under C. Tax should be collected from them as per the categories as this system can avoid tax evasion.” He said that we are also not exploiting the major source of foreign investment by neglecting overseas Pakistanis which are remitting 10 to 12 billion dollars every year. We should provide them better facilities to transfer their money through legal channels as this step can raise foreign remittances up to 15 billion dollars per annum. He said that basically we are a consumer economy and it seems difDicult to curtail our imports like China but there should be a restriction on imports of luxury items and only those items should be imported which are required for fulDilling basic needs. Youth business loan program would prove to be a one major source of encouragement to the small and medium entrepreneurs and the scheme reDlects the vision of Prime Minister Nawaz Sharif to promote trade and industry in the country. We have other programs as well to promote trade and industry including establishing Gwadar as a business and trade hub, he aconcluded.
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Founder & Chairman Zulfiqar Ali editor Nasim Ahmed executive editor Rahil yasin editor@customstoday.com.pk For advertising & subscription marketing@customstoday.com.pk +92-322-3370002 www.customstoday.com Phones: 042-35781643-4, Fax: 042-35781645 Address: 627, Siddiq trade Centre, Gulberg, Lahore
EDITORIAl
Non-tax paying ruling elite
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t has long been known that our parasitic ruling elite are not in the habit of paying taxes. they make tall claims about representing the people, they enjoy all the perks and privileges of power and they exercise their right of vote to impose tax on the poor people. But when it comes to fulfill their own tax obligation to the state, they play truant from law. now a study has been published which shows in glaring details how our MnAs and MPAs cheat the exchequer, and how they tell lies about their income and taxes paid or not paid. According to this study, of the 1,070 legislators sitting in the national and provincial assemblies about 500, or 47 percent, did not pay any income tax and 12 percent of them do not have even a national tax number. the non-taxpaying MnAs belong to all the major parties. PML-n has 54 nontax paying MnAs, while, PtI has 19. It is indeed a paradox that Imran Khan who does not tire of condemning the looters of national wealth has his own party full of defaulters. PPP, MQM and JuI have their own ‘fair’ share of non-tax payers. About 550 members declared tax payments in their nomination papers but, according to FBr, they either exaggerated their tax amounts or paid zero tax. About 200 of them showed lower earnings to reduce their tax obligation. the MnAs whose declarations were contradicted by FBr include some big names like PML-n chief Mian nawaz Sharif, PtI chairman Imran Khan, PtI VC Shah Mehmood Qureshi, MQM’s Dr Farooq Sattar, Maulana Fazlur rahman and PPP’s Shazia Marri. Many prominent politicians also submitted conflicting income statements to the eCP and FBr. they include PPP’s Makhdoom Amin Fahim, Ch nisar Ali Khan, Imran Khan and Pervez elahi. the provincial assemblies mirror the goings-on at the national Assembly level. As many 169 MPAs of the Punjab Assembly, or 43 percent of the total, pay zero tax. there is no tax record of another 23 MPs, while the claims of 53 MPAs that they pay tax have been denied by the FBr. 43 MPs do not even have an ntn. At least 59 members of the Sindh Assembly did not pay any tax in 2012, while 15 do not even have national tax numbers. It is a startling fact that in KPK, out of 124 Assembly members, 81 did not pay any tax in 2012. According to the FBr record, Chief Minister Pervez Khattak himself did not pay any tax. this is a deplorable state of affairs, indeed. It is shameful that elected members exercise their voting right for imposing taxes on the people but they themselves don’t pay any tax. It boggles one’s mind to know that former Sindh minister for excise and taxation, Abdul rauf Siddiqui, does not have an ntn. Similarly, the finance minister of KPK, Sirajul haq, does not have a national tax number. What can we expect from such an Assembly? A contesting candidate signs an undertaking in the nomination papers and as per law, any mis-declaration can lead to his disqualification. now that it has been proved with facts and figures that a majority of our elected representatives have lied and mis-declared about their contribution to the national exchequer, do they deserve to sit in the Assembly?
Only a powerful EAC can fix economic problems ISLAMABAD
SM HAIDER
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ith constitution of Economic Advisory Council (EAC) placed by Finance Minister Ishaq Dar, the government seems serious to take different independent economists and divergent voices into conLidence in the process of formulating policies to Lix the economic problems. One thing should be made crystal clear that the economy of Pakistan could not run with the approach of status quo so the government would have to make basic structural changes in the different sectors of the economy for achieving the desired results. The improvement in taxation structure is dire need of the hour and the country’s fiscal woes cannot be overcome with existing flawed taxation system where more reliance is on indirect taxes and the rich are enjoying all kinds of exemptions and concessions.
With the Finance Minister in its chair the Advisory Council shall have 19 other members from different walks of life. They are Dr. Ishrat Husain, Dean and Director, Institute of Business Administration, Karachi, Dr. Ijaz Nabi, Dean, School of Humanities, Social Sciences and Law, LUMS, Abid Hasan, Farooq Rah-
Zaidi, Muslahuddin, PIDE, Mr. Furrukh Saleem, Dr. Abid Qayyum Suleri, SDPI, Saqib Sherani, Qazi Azmat Essa CEO, Pakistan Poverty Alleviation Fund, Chairman Board of Investment, Governor SBP and Chairman FBR. As a matter of fact, the EAC was not a new idea as successive governments had established such fo-
PPP-led regime, the EAC was used to get inputs from economists and researchers on eve of budget making process only and in many instances their suggestions were ignored or partially accepted because of strong vested groups. The previous regime had also placed Revenue Advisory Council (RAC) as well but it remained un-
the previous regime had also placed revenue Advisory Council (rAC) as well but it remained unable to make any dent for moving towards improvement in the country’s taxation system. It should be expected that the government will authorize this forum with clear-cut objectives for improving the country’s economy on sustained basis. matullah (Energy), Zubair Soomro, Banking, Mr. Shafqat Ali Jamoot, Agriculturist/Businessman, Arshad Zubairi, Business Recorder, Farrakh Qayyum, Dr. Sania Nishtar, CEO, Heart File, Dr. Ashfaq Hassan Khan, Dean & Professor(Economics), NUST, Akbar
rums but never gained full beneLits. Now this time, the government should do something different as the EAC should not be treated as a debating forum but it should be given powers to make a difference in policy formulation. During the tenure of previous
able to make any dent for moving towards improvement in the country’s taxation system. It should be expected that the government will authorize this forum with clear-cut objectives for improving the country’s economy on sustained basis.
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DeCeMBer 31 - JAnuArY 06, 2013
SC orders pQA authorities to get rid of illegal appointees
KARACHI: The Supreme Court of Pakistan has directed Port Qasim Authority (PQA) to remove illegal appointees within a month. A three-member bench led by Chief Justice Tassaduq Hussain Jillani resumed the hearing of the petition of Abdul Jabbar Memon who contended that in the former regime, appointments in PQA were made in violation of the rules and regulations. The bench said in its order that the govt had acknowledged that 890 illegal appointments were made in PQA and directed concerned authorities to remove all illegal appointees in a month.
Goods transporters finally compensated for 2007 mayhem kARACHI: Federal Minister Ishaq Dar and Chief Minister Sindh Syed Qaim Ali Shah addressing cheque distribution ceremony among transporters whose vehicles were burnt in Dec 27, 2007 incident.
KArAChI
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inister for Finance Ishaq Dar has awarded rs 246.5 million as reimbursement to goods transporters in a ceremony held at Chief Minister house Sindh. Six years earlier the goods transporters suffered heavy losses to their vehicles burnt during the protest against assassination of former Prime Minister Benazir Bhutto on December 27, 2007. the goods transporters have had numerous strikes to pressurize government to compensate their losses. the latest strike continued for more than 10 days during which the entire port activities came to a standstill. During the previous government’s term former president Karachi Chamber of Commerce and Industry Mohammad haroon Agar had asked to resolve genuine problems of transporters.
— Exclusive Customs Today photos
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Consequently current President of KCCI Abdullah Zaki also urged the government to immediately negotiate with representatives of goods carriers. Following the demands by the business community, KCCI and transports, the federal government at last has agreed to compensate. Abdullah Zaki has expressed his gratitude to the government, particularly the Federal Finance Minister Ishaq Dar for resolving the longstanding issues of goods transporters. he also appreciated united Goods transporters Alliance for accepting KCCI’s request to consider reducing their demands. he also welcomed the relevant Sro issued by FBr on reducing the rate of withholding tax to rs 2 per kilogram of the laden weight. Federal Finance Minister and Sindh Chief Minister Syed Qaim Ali Shah have also paid tribute to President KCCI, Abdullah Zaki and his team for playing a leading role in resolving the issues of Goods transporters by facilitating negotiations between all stakeholders.
kARACHI: Dignitaries attending wedding ceremony of son of Federal Minister Khawaja Muhammad Asif.
RAWAlpINDI: Federal Minister Ahsan Iqbal cutting ribbon to inaugurate the new library at rawalpindi Medical College.
kARACHI: KCAA President Iftikhar Sheikh, KCAA General Secretary Faisal Mushtaq and other office-bearers in a group photo after a luncheon meeting organized by KCAA at its group office in honour of journalists.
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DeCeMBer 31 - JAnuArY 06, 2013
21.5pc growth in WHT collection registered
ISLAMABAD: Federal Board of Revenue has witnessed 21.5 per cent increase in withholding tax collection from salaried class during the first quarter of current fiscal year against the corresponding period of previous fiscal year. According to FBR quarterly report of first quarter of the current fiscal year, withholding tax collection from salaries stood at Rs 12.137 billion against Rs 9.989 billion in same period of previous fiscal year. The withholding tax has been the major contributor to gross income tax collection.
MCC Port Qasim puts in place proper mechanism to check under-invoicing he Model Customs Collectorate (MCC) of Port Muhammad Bin Qasim is making all-out efforts to achieve the revenue target set by Federal Board of revenue (FBr). this was stated by a senior official of MCC Muhammad Port Bin Qasim on condition of anonymity while talking to Customs today at his office. he informed this scribe that the entire team of MCC Port Bin Qasim is trying hard to facilitate the trade activities, adding that the officials are ensuring provision of facilities to importers and exporters alike. he admitted that the 100 percent implementation becomes difficult when the officials facilitate the traders, however; the Customs officials are endeavoring to facilitate importers and exporters. “Whenever, the Collectorate gets a complaint from any trader, the authorities concerned try to address the matter in a stipulated time frame”, he asserted. to a query, he said that the MCC Muhammad Bin Qasim is going to check the cases of mis-declaration, tax evasion and under-invoicing on weekly basis with proper surveillance. “Proper audit trial is also there to verify or detect the cases of revenue shortfall and the team of the Collectorate is working on it efficiently”, he added. to a query, the senior official ruled out the menace of corruption in the Collectorate and said that the MCC Muhammad Bin Qasim was collecting the revenue according to the rules and laws of Pakistan Customs. replying to another question, he maintained that the Collectorate does not find any leakage in the system and revenue collection was up to the mark. —CT Report
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FIR against clearing agency nvestigation & Prosecution Cell of Model Customs Collectorate, Customs house Lahore has registered an FIr against Masers Corvet net Works and M S & Company, a clearing agency for misrepresenting value of imported equipment to evade customs duty. According to details, the business concerns evaded rs 832,582 on import of rs 4.2 million consignment of four networking equipment of 164 kg from uAe. the business owner declared the goods under WeBoC system at $10,012 instead of $38,281, a source said, adding that total value in Pak rupees of the imported equipment was rs 4,234,242 while its tax value was rs 832,582. the incident took place at the air freight unit and the Customs officials lodged FIr under various sections of Customs Act 1969. —CT Report
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WRITE TO US yOUR GRIEVANCES: through CUSTOMS TODAy platform HElp DESk, now you have chance to DIRECTly write your problems to top govt. functionaries. If you have any grievances, queries, questions or suggestions, you can write in this section as it provides easiest access to you to approach Customs and revenue authorities. WHO can write in this section? Importers & exporters, Customs Agents, Chambers of Commerce, trade Associations and Customs officers TO WHOM you can write? honourable PM, Minister/Secretary for Finance & revenue, Minister/Secretary for Ports and Shipping, FBr Chairman, Member Customs and Chairperson Senate/national Assembly Standing Committee on Finance & revenue. Send your letters at: letters@customstoday.com.pk
Fiscal adjustments remain key problem for five years: report ISLAMABAD
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he effective sales tax rate is very low because of exemptions, and huge input adjustments. This has been speciLically noted in a paper prepared by Umar Wahid, Chief Strategic Planning Reforms & Statistics FBR and Zafar-ul-Hassan, Chief Planning Commission on ‘Structural Reforms to Boost Economic Growth’ contained in the FBR’s quarterly report. The report said that Liscal adjustment has remained the key problem area for the last Live years as the Liscal deLicit averaged 6.6 percent of GDP per annum. Half hearted reforms in tax administration and policy, power sector, restructuring public sector entrepreneurs and governance remained major bottlenecks towards improving Liscal situation. Tax and expenditure slippages and problems in Linancing the deLicit remained the hallmark of Liscal situation and as a result tax-to-GDP ratio fell from 11.1 per cent in 2007-08 to 9.3 per cent in 2012-13. Provincial tax collection stagnated at around 0.5pc of GDP. Tax-to-GDP ratio actually fell from 10.3 per cent in 2007-08 to 8.5 per cent in 2012-13. Pakistan yields one of the world's lowest tax-to-GDP ratios and ranks 115th out of 179 countries. The tax administration and structure is planned to be reformed to contribute adjustment to the tune of 0.7 percentage points each year by reforming existing tax system. The multiple rates are applied on sales tax - (0%, 5%, 7%, 16%, 19.5% and 3% additional tax on commercial importers). Effective Sales Tax rate is 3.6pc which is very low because of exemptions, and huge input adjustments. With irregular structure, almost onefourth of the entire tax collection or more than 25 per cent comes from POL at various
stages. In customs tariff, 54 per cent of tariff lines have different tariff rates for different importers through SROs. Around 86 per cent of tariff lines are affected by an SRO in one way or the other and 44 per cent of the value of imports affected by SROs. Tax gap is almost half of the actual tax collection, according to the paper. The reforms are aimed at de-politicising the recruitment, transfer and postings in the FBR which must be based upon merit. This will enhance administrative efLiciency. Another area of concern remained the tracking of non-Lilers who enjoy decent living and huge ability to pay. This is weakening the overall writ of the government and cause of institutional degeneration which has also impacted the functional and operational efLiciency of the country in recent past
and efforts are underway to make FBR a vibrant organisation. However, FBR alone could not make headway in boosting revenues substantially unless it is not equipped with effective legislation. The structure and the legal framework governing the taxation need to be reviewed by the parliament. The international best practices, technology and political will could play an important role in restructuring the taxation environment. The SRO culture has detrimental effect on competitive environment and nurturing entrepreneurship. This is retarding economic growth and by bringing those in normal tariff lines could help enable to raise revenues. Taxation policy has to be complemented by other macroeconomic policies as it is just a small component of the big pie, paper added.
Appeal to withdraw sales tax on security services To,
The Federal Finance Minister, Islamabad Respected Sir,
I would like to draw your attention towards a serious issue confronting by business community pertaining to imposition of sales tax on security services. It is an entirely unjustified act to impose sales tax on security services, as it will further swell up woes of traders, affecting business activities. It is the prime responsibility of the government to ensure security to the lives and properties of the citizens but the government has failed to do so, leaving no other option for the business community but to hire private security guards, resulting in additional expenses on security, whereas the
imposition of GST on security services would further exacerbate the situation. The government should help and facilitate the business community instead of imposing such levies and taxes on this important segment of society. I request to the government to withdraw this tax which is creating difficulties for the business community yet the businessmen are trying their best to continue their businesses in extremely unfavorable circumstances. I hope the government would take appropriate steps towards redressal of the grievances of the traders by withdrawing sales tax on security services. Yours Sincerely, Abdullah Zaki, President KCCI, Karachi
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CArtoonS SPeCIAL
DeCeMBer 31 - JAnuArY 06, 2013
Amir Marwat assumes charge as DG post Clearance Audit
Islamabad: Amir Muhammad Khan Marwat, officer of Pakistan Customs Service, has assumed the charge of the upgraded post of Director General (BS-22) Directorate General of Post Clearance Audit, Islamabad. He relinquished the charge of the post of Director General, Directorate General of Customs Valuation, Karachi (BS-21) w.e.f 20.12.2013. Meanwhile, Ms. Yasmin Saud, officer of Inland Revenue Service, has assumed the charge of the upgraded post of Member (HRM) (BS-22) FBR (Hq), Islamabad.
“I haven’t found anything wrong with your books yet, but it’s Ok for you to go ahead and worry a bit longer.”
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Published by M. F. riaz, off. 91, 3rd Flr, Gul Plaza, M.A. rd., Karachi, for Customs today and Printed at Dhoom Printing Press Masheer Mahal Building, off: I. I. Chundrigar road, Karachi