PRO 12-07-2012_Layout 1 7/14/2012 4:43 AM Page 1
Saturday, 14 July, 2012
FBR admits missing collection target by Rs 32b ISLAMABAD
T
Online
HE Federal Board of Revenue (FBR) has officially admitted its failure to achieve annual collection target of Rs.1952 billion set for financial year 2011-12 as it has collected Rs.32 billion less amount then its target. FBR spokesman Riffat Shaheen said that the tax authority has collected rs.1,920 billion during fiscal year 201112 against its set target of rs.1,952 billion which shows Rs.32 billion shortfall. She said Federal Board of Revenue could not announce collection date officially so far due to books adjustments which in routine takes 10 to 15 days but it would be released in next two to three days. “Credit should be given to tax authorities for crossing the sociological fig-
Japan hosting Pakistan investment seminars in 3 cities ISLAMABAD
faulter taxpayers with the sole aim to achieve annual tax collection target of Rs.1952 billion the FBR also announced amnesty schemes in May 2012 which did not help at large the tax authorities to get its overambitious target of revenue set for fiscal year 2011-12. According to an official tax collection target of rs.1,952 billion was of course much difficult, tough and steep decline in revenues is being witnessed, however, FBR has left no stone un-
ure of Rs.1900 billion revenue collection,” she said, adding that tax collection target did not revise even a single time throughout the financial year 2011-12 whereas it was revised 3 times as compare to last fiscal year. Riffat Shaheen said despite depressive economic situation in the country tax authority collected Rs.1920 billion what she termed a great achievement for Federal Board of Revenue. In order to get billion of rupees from de-
turned to reach its nearest. Independent economists have said that the government missed annual revenue collection target set for the 2011-12 due to challenges ranging from militancy to energy. According to them FBR tax collection target of Rs1952 billion was a non-starter even with the collection of Rs1588 billion in 2010-11. “Tax authorities were insisting throughout the year for achieving its target despite the fact that economy was growing with only 3 per cent then how it was possible for FBR to get its set target,” they added. It may be recalled that during current fiscal year 2010-11, nation had witnessed a baffling situation when on June 30, 2011, the then Chairman FBR Salman Siddique claimed that the collection surpassed the target and collected Rs1, 590 billion, but the irony of fate was that it was proven incorrect.
Introduction of Islamic dirham, dinar urged to get rid of usury
Online
ISLAMABAD
Ambassador of Japan to Pakistan, Mr. Hiroshi Oe on Friday said Japan considers Pakistan as a major development partner and the two countries will continue to support each other as true friends. Japan will continue to provide financial and technical assistance to Pakistan as we believe that this country has a great potential for the future. There are spectacular development and investment opportunities in various fields as few countries are gifted with such natural and human resources, the Ambassador said. Ambassador Hiroshi Oe said this while talking to Chairman FPCCI Standing Committee on Diplomatic Affairs Chairman Sheikh Humayun Sayeed who called on him. Chairman Media FPCCI Malik Sohail, Chairman Coordination Atif Akram Sheikh and First Secretary Takashi Shimokyoda were also present on the occasion. “Pakistan is facing difficult challenges which will be over soon,” he said adding that he will continue to strive to deepen mutual understanding through economic, educational, cultural and political exchanges. Hiroshi Oe said that increasing population and negative perception is a problem that should be tackled on urgent basis. Sixty Japanese companies are operating in Pakistan, 1400 in Thailand and around 400 in India, he added. He informed Japan Government is hosting investment seminars for Pakistan by end August, in Tokyo, Osaka and Nagoya. A delegation of Japanese Chamber of Commerce will start exploring opportunities in Karachi, Lahore and Islamabad from 16th July. The delegation will also meet President Zardari besides meeting different senior officials in a meeting at the Ministry of Commerce, they envoy said. In October, another trade mission is coming to Pakistan comprising representatives of main Japanese companies who will visit Karachi, Islamabad, Sialkot and Lahore. At the occasion, Sheikh Humayun Sayeed said that Japan is an important friend whose role in development of different sectors is laudable.
APP
Renowned Malaysian currency expert Sheikh Umar Ibrahim Vadillo has urged for introducing Islamic dirham and dinar in the economic system to get rid of usury (Riba). Addressing the students and researchers here in his lecture titled “Towards Just Monetary System: Introducing dirham and dinar currency” organized by Islamic Research Institute (IRI) in collaboration with International Institute of Islamic Economics and Shariah Academy, Sheikh Vadillo also urged the government of Pakistan to implement the system of dirham and dinar in the country. He said that the Muslim countries should adopt the system of gold and silver currency which would automatically devalue the US dollar. “It cannot be devalued by government decree, and unlike paper currency, it is an asset which does not depend upon anybody’s promise to pay”, he said adding that with use of gold and silver currency there would be zero inflation. Vadillo said all forms of paper assets including currency, bonds, shares, and even bank deposits are promises to repay money borrowed. Their value is dependent upon the investor’s belief that the promise will be fulfilled. “Gold is not like this. A piece of gold is independent of the financial system, and its worth can not be denied any time”, he added. Vadillo further said Dr. Mahatir Mohammad of Malaysia is also in favor of dinar and dirham system
and he asked the Muslim countries not to sell their precious oil to the world for US dollars but sell it for gold. Dr Masoom Yasinzai Rector International Islamic University said on the occasion that Islam is complete way of living and the Muslim Ummah can introduce new economic system that can be followed by the whole world as people across the world are fed up of the current prevailing so called economic systems. “The world tried socialism that collapsed, the world is now trying capitalism that is also about to collapse”, Dr. Masoom added.
Simple tax procedures will improve tax collection: iCCi ISLAMABAD Online
Islamabad Chamber of Commerce and Industry (ICCI) has urged the newly appointed Chairman Federal Board of Revenue, Ali Arshad Hakeem to take measures for simplifying the complex and complicated taxation procedures, which will help in improving the tax revenue for the country. Yassar Sakhi Butt, President ICCI made these remarks during a meeting at Chamber House. He said that the complicated tax procedures were creating troubles for the businessmen and FBR should facilitate taxpayers for making these procedures more simple and easy. He said that businessmen were facing many challenges due to multiple factors like energy outage, rising inflation and deteriorating law and order situation. Therefore, they should be facilitated to expand businesses as revenue collection lies in the promotion and growth of business activities. ICCI President was of the view that the solution to slow economic growth lies in the revival of progressive taxation policies and improved tax collection system. He urged the Government to broaden the tax net by bringing all the sectors into the tax net which were currently not being taxed and rendering a permanent revenue shortfall in the National Exchanger. He said that country’s tax-to-GDP ratio had since long been declining and ultimately it registered around 10 percent of the GDP during last fiscal year. ICCI President added that developed countries have tax-to- GDP ratio from 30 to 40 percent, most of the developing economies from 15 to 25 percent like in India; this ratio stands at 15 percent and Bangladesh at 14.5 percent. He urged the Chairman FBR to increase the tax-to-GDP ratio by overhauling the tax system and making the system justifiable and equitable. Yassar Sakhi Butt said indirect taxes currently account for more than 60 percent of the total revenues while direct taxes to GDP ratio was merely 2 percent which has been badly affecting consumer spending that is a key driver of economic growth. He said that proactive measures should be introduced to plug the leakages and loopholes in the prevailing tax system rather than adopting the policy of increasing the tax base through broadening the ratio of indirect taxes.
SECP, KSE meet to boost capital market KARACHI STAFF RePORT
A meeting of the Securities and Exchange Commission of Pakistan (SECP) headed by the chairman, commissioner and other senior officials of the SECP was held with the Board of Directors, management and senior members of the Karachi Stock Exchange. The meeting discussed important capital market development matters and measures for enhancing activity at the Exchange by supporting retail participation. The apex and front line regulators reviewed various international best practices for the overall growth of the market and deliberated upon areas of investor protection, expansion of market outreach, new product development in equity, debt and derivative segments, activation of leverage products for improved liquidity, effective risk management and market monitoring and surveillance etc. While highlighting recent reforms in
the market including revamping of Capital Gains Tax regime, introduction of revised Code of Corporate Governance and demutualization of stock exchanges, the SECP chairman emphasized upon the Exchange to take expeditious steps to put in effect already agreed scheme of arrangements for enhancing brokers’ capacity to execute business. Under the said scheme each active broker would be allowed an amount of Rs 50 million to be utilized against bank guarantee from the Clearing House Protection Fund as margins/collateral against their trades. It was, however, emphasized that in line with international best practices risk management needs to be consolidated and shifted to NCCPL with a settlement guarantee fund so as to support NCCPL to function as a central counter party. A committee of the stock exchanges and NCCPL was constituted to finalize necessary modalities for the same and submit its recommendations to the SECP. Fur-
ther to support liquidity in the market, generate healthy activity in leverage products like Margin Trading and Securities Lending and Borrowing, it was agreed that these products would be reviewed in detail to identify and address issues hindering the participation of investors. Also, to revive investors’ confidence and affectively address claims of investors pertaining to 2008 market situation, further
enhancement of contribution from IPF for each default and expulsion was recommended by the SECP for consideration of the Exchange’s Board of Directors. Other areas that were mutually agreed by the regulators include: Taking appropriate measures to promote intraday/day trading, following principles adopted internationally, that will assist in enhancing trading activity.