Pakistan warned against delaying anti-tax evasion measures

ISLAMABAD: Pakistan’s top tax machinery is delaying honouring its international commitments to prevent tax evasion and the setting up of offshore accounts for stashing ill-gotten wealth.

The Organisation of Economic Cooperation and Development (OECD) has warned Pakistan that it may lose the right to receive information on a reciprocal basis from other 104 signatories if its implementation of the required measures has deficiencies.

In September 2016, Pakistan signed the Convention on Mutual Administrative Assistance in Tax Matters, which paved the way for the exchange of information regarding offshore accounts. The need for signing the convention arose in the wake of the Panama Papers case.

One of the major conditions for the implementation of the convention was the setting up of six automatic exchanges of information (AEOI) zones across the country.

An official source told Dawn that the AEOI zones were already established. But a team from the OECD secretariat that visited Pakistan in July suggested measures in terms of the arrangements of data safeguards. It was suggested that record rooms be established in each AEOI zone to ensure confidentiality and data safeguard.

The OECD team was expected to visit Pakistan soon to check the status of the guidelines’ implementation and assessment of the AEOI zones. “We have not received any tentative dates of their visit so far,” the source added.

However, in case the measures are found deficient, Pakistan will not receive information regarding its residents’ bank accounts and assets in 104 countries. However, Pakistan is bound to share information automatically with all these countries in any case.

As per the original plan, systems should have been in place and started receiving information from domestic banks for the period from July 1 to Dec 31.

According to the source, one of the reasons is the delay in the release of funds for the establishment of AEOI zones. “Senior management of the Federal Board of Revenue (FBR) was busy with the case of Finance Minister Ishaq Dar,” the source said, adding that the pace of work at the FBR was affected following the filing of a reference in the National Accountability Bureau (NAB) against Mr Dar.

The source said the FBR chairman was seeking permission even in small cases from Mr Dar, who was apparently preoccupied with his case, and that led to further delays in many crucial decisions. “There are many important proposals, which are facing similar implementation delays,” the source said.

Under the convention, information will be exchanged about those non-residents who open their banks accounts in Pakistan in July-December. There is no cash limit for bank accounts of non-residents during this period.

Contrary to this, bank accounts of non-resident individuals that were opened in Pakistan prior to July 1 with more than $10,000 will also be shared with OECD treaty members.

The FBR has already notified the rules for the implementation of the convention. The deadline for sharing information with OECD treaty members for the six-month period was up to September 2018. Information-sharing by OECD treaty members follows calendar year. Pakistan will receive full-year information by September 2019 in case Islamabad complies with OECD standards while collecting information from domestic banks. This means a delay of another year.

Pakistan will be bound to share information of non-residents with OECD treaty members within nine months of the completion of calendar year.

The adoption of common reporting rules in 104 countries will enable each member to discover undetected tax evasion. These rules will also enable governments to recover tax revenue lost to non-compliant taxpayers.

Published in Dawn, October 8th, 2017

Wheat stocks hit historical peak of 9m tonnes

KARACHI: The country’s wheat stocks have swelled to a record nine million plus tonnes.

As per flour millers’ data, substantial wheat stocks have accumulated due to carryover stocks of previous years.

Wheat consumption in Pakistan stands at 23m tonnes per annum.

Pakistan has been reaping bumper wheat crop — between 25-26m tonnes — for the last two years. However, this huge stock now appears to be a liability keeping in view consumption and unfeasible export potential.

Currently, the Punjab food department holds 6m tonnes of the commodity, followed by 1.7m tonnes by Sindh, 1.4m tonnes by Pakistan Supply and Storage Corporation (Passco) and 200,000-300,000 tonnes by Khyber Pakhtunkhwa and Balochistan food departments.

“Our wheat stocks are at a historical high but it does not auger well for consumers and exports,” Central Chairman Pakistan Flour Mills Association (PFMA), Chuadhry Ansar Jawed said.

Pakistan cannot take benefit from the huge stocks due to high support price of Rs1,300 per maund (equivalent to over $300 per tonne) while global prices hovers between $150-170 per tonne, he said.

“Consumers are paying more for different flour varieties due to higher support price while millers also adjust flour price depending on the open market rate of wheat,” he added.

The market is abuzz with reports of another good crop by March/April next year. Good weather has so far proved beneficial for impressive wheat harvest in the last two years and per acre yield has also increased.

Out of the 9m tonnes wheat stocks, the provincial governments are likely to issue 3-3.5m tonnes of the commodity to flour mills.

“Due to sizable stocks and availability of wheat in the open market, wheat issuance to millers by provincial food departments has been delayed by almost three months,” Mr Ansar said.

Millers are likely to start wheat procurement from the governments by December instead of September/October, he added.

The time period of wheat procurement from Sindh food department by the millers would run for almost three months while Punjab would sell wheat to millers for four months.

Around 50 per cent of the wheat stock is lying in open while the remaining has been stored in government godowns.

Amid higher stocks, prospects of wheat exports still appear bleak in view of low price forecast in world markets.

The flour millers have requested the government for granting $170 per tonne rebate to compete with low prices in world markets.

He said old rebate claims of genuine exporters amounting to billions of rupees have not been paid by the government.

“Even at the rebate of $170 per tonne, we cannot expect to make sizable wheat exports as low world wheat price forecast will remain a major obstacle,” the PFMA chief said.

The government, he said, should devise a new export policy for at least two years for sea and land routes after consulting stakeholders for disposing surplus wheat which would otherwise rot.

The subsidy should be revised after six months keeping in view world market prices, he added.

Mr Ansar said Punjab government has asked wheat growers to grow different crops like canola in the cultivation area of wheat for which growers would get an incentive of Rs 5,000 per acre. Sindh government should also introduce a similar package, he added.

“80-90 per cent of subsidy and incentives schemes of Sindh government were marred by corruption,” he alleged.

The Sindh government has purchased some 400,000 tonnes of soft, poor quality wheat from low producing areas of Punjab at very less prices.

Most of the quantity of low grade wheat has been dumped into godowns in Karachi. This year millers are again expected to buy sub-standard wheat, he claimed.

The PFMA on record had protested the move of Sindh food department in the last two years but this year millers in Sindh would not lift soft wheat at any cost, Mr Ansar warned.

Strong demand for cotton keeps prices firm

KARACHI: Strong de**mand for quality cotton kept prices firm on Saturday.

Interestingly, higher arri*val of phutti (seed cotton) did not dent cotton prices.

Due to peak season for the textile industry, there was rush of buyers who were keen to replenish their cotton inventories. It was encouraging that the flow of quality cotton also remained high. Phutti arrival is at its peak since picking in almost all cotton growing districts of Punjab is in full swing.

However, phutti arrival from lower Sindh, where cotton sowing took place earlier, is nearing an end and a number of ginning factories have also closed down.

ADVERTISEMENT

Despite a glut, the prices of phutti remained on the higher side — indicating that off-take of cotton was equally high.

According to estimates, world cotton production would be much higher than last year.

On Saturday, world leading cotton markets closed firm, with New York cotton recovering its recent losses. The Indian cotton market also stood steady. The Chinese market remained closed.

The following major deals were reported to have transpired on ready counter: 800 bales, Shahdadpur, at Rs5,500 to Rs5,800; 800 bales, Shahpur Chakar, at Rs5,975 to Rs6,000; 1,400 bales, Nawabshah, at Rs5,975 to Rs6,000; 1,600 bales, Sakrand, at Rs6,050 to Rs6,075; 2,000 bales, Khairpur, at Rs6,100 to Rs6,150; 1,600 bales, Saleh Pat, at Rs6,150 to Rs6,200; 1,000 bales, Rohri, at Rs6,150 to Rs6,200; 1,000 bales, Mian Channu, at Rs6,200; 1,000 bales, Mianwali, at Rs6,100 to Rs6,200; 1,200 bales, Khanewal, at Rs6,150; 800 bales, Bahawalnagar, at Rs6,125 to Rs6,140; 600 bales, Faqirwali, at Rs6,100; and 800 bales, Burewala, at Rs6,150.

Published in Dawn, October 8th, 2017

__________________
“What we need in this country today is more courage and more belief in the things that we have.”- Thomas J. Watson

Economic Coordination Committee takes sweeping measures to tackle growing deficits

ISLAMABAD: The government decided on Friday to impose regulatory duties on up to 250 items, expanded the incentive package for exporters and increased the commission of dealers and oil marketing companies (OMCs) on the sale of petrol by 33 paisa per litre.

In addition, it also allowed private OMCs and dealers to charge the commission of their choice on diesel sales.

These decisions were taken at a meeting of the Economic Coordination Committee (ECC) of the cabinet presided over by Prime Minister Shahid Khaqan Abbasi.

The ECC also agreed to issue sovereign guarantees worth Rs39 billion for a coal power project and allocated additional 12 million kilograms of surplus tobacco to all companies and dealers on a pro rata basis. It extended the applicability of the reduced rate of 0.4 per cent withholding tax on banking transactions by non-filers up to December.

ADVERTISEMENT

Import discouragement
To discourage imports, the committee imposed 5-25pc regulatory duties on about 250 items. This may yield about Rs20-25bn in revenue to the government besides having a positive impact on the balance of payments, an official said.

Detailed lists of import items will be announced separately after the exclusion of a few sensitive items, like Christmas trees, having negligible financial impact. The objective is to discourage non-essential consumer items in view of an increasing trade imbalance through higher duties, non-tariff barriers and a hike in benchmark import rates.

Diesel price floated; duties slapped on 240 items; 50pc export rebate to be paid upfront

The official said that about 230-240 items, like shampoos, second-hand cars, tyres, mobile phones, electronic goods other than computers, tiles and garments, would attract additional duties. Almost one-third of such items related to the agriculture sector, fruits and pulses. Benchmark import prices have also been proposed to be increased on some imported items while others will be discouraged through non-tariff barriers.

Diesel deregularised
Despite strong opposition from the Oil and Gas Regulatory Authority (Ogra) and Federal Board of Revenue (FBR), the committee decided to withdraw Ogra’s power to fix the price of high-speed diesel (HSD) and empowered OMCs and dealers to fix their own margins and retail prices.

An official of the Petroleum Division said it is for the first time that the government has given up the power to fix the HSD price even though it will review the decision after three months to examine the market response.

Simultaneously, it allowed a 33 paisa per litre increase in the sale margin for petrol. Of this, the margin of OMCs was increased by 14 paisa per litre and that of dealers by 19 paisa per litre.

The committee also decided that OMCs would add fuel marker in HSD within six months at the depot stage to avoid adulteration while Ogra would develop a mechanism to monitor the OMCs’ commercial stock position, dealers’ inventory system and fuel marker system.

Export package
In order to promote exports, the ECC approved a proposal under which 50pc of the incentive package for exporters for eligible textile and non-textile sectors would be provided on the same terms that applied from January to June without any condition of increment.

The rebate ranged between 5pc and 7pc, but was previously linked to 10pc growth. But half of the rebate will now be paid upfront at the time of export. The remaining rebate will be provided if the exporter achieves an increase of 10pc or more in exports over the last year’s corresponding period.

An additional 2pc drawback will be provided for exports to non-traditional markets, like Africa, Central America, South America and Australia. Besides, expeditious settlement of payment claims by the State Bank of Pakistan (SBP) was also approved.

The decision will have about Rs60-70bn impact during the current year out of the Rs180bn export package announced by former premier Nawaz Sharif last year.

Sovereign guarantees
The meeting also provided a provisional approval of the issuance of sovereign guarantees for Rs39bn for the construction of two coal power plants of 660 megawatts each in Jamshoro, subject to a third-party evaluation, especially pertaining to the demand-and-supply situation.

The ECC extended the period of the provision of subsidy to agricultural tube well consumers in Balochistan until Dec 31, subject to the commitment of past payments by stakeholders on the same terms and conditions as approved earlier by the committee on June 17, 2015.

The approval is linked with a comprehensive review of the solarisation of tube wells to be undertaken on a priority basis.

Published in Dawn, October 7th, 2017

__________________
“What we need in this country today is more courage and more belief in the things that we have.”- Thomas J. Watson

Banks play their part but remain shy of innovation

THE State Bank of Pakistan (SBP) is pushing banks quite aggressively to keep doing what is required of them to help Pakistan achieve the SDGs. Conventional and Islamic banks as well as microfinance institutions are trying to behave accordingly.

“If you look at our activities in these two years (since the launch of the goals), you’ll notice that the central bank is doing everything it can to help the nation meet the SDGs,” says a senior central banker.

“We’ve done a lot for SDGs. (Our supportive activities include) taking new initiatives, revamping old programmes and enabling banks to go for financial inclusion, poverty alleviation, women empowerment, green banking, lending for sustainable growth and innovative financing.”

The SBP has already launched the Credit Guarantee Scheme for Small and Rural Enterprises and the Technical Assistance Fund besides issuing detailed guidelines for Microcredit Guarantee Facility. It is also facilitating financially inclusive government-to-person (G2P) payments and promoting innovative rural and agricultural finance.

These initiatives are enabling conventional and Islamic banks, as well as microfinance institutions, in reaching out to the under-served segments of agricultural borrowers (including female farmers) and hitherto ignored small and medium enterprises (SMEs).

For agriculture and SME sector, the central bank is now setting more detailed lending targets for banks that should help us meet SGDs like poverty eradication, food safety, women empowerment, inclusive and sustainable economic growth and decent work for all.

In the last two years both agricultural and SME lending has seen growth. In 2014-15, gross agricultural lending of banks stood around Rs516 billion which rose past Rs598bn in 2015-16 and then soared to Rs704.5bn in the last fiscal year. Qualitatively, agricultural credit outreach also increased from 2.01 million in FY15 to 2.4m in FY16 and to 3.27m in FY17.

The stock of outstanding SME financing went up from about Rs261bn in FY15 to Rs297.5bn in FY16 and then shot up to Rs367bn in FY17. The number of SME borrowers also increased from 152,495 in FY15 to 164,734 in FY16 and to 176,847 in FY17.

The pace of increase, both in volumes of agricultural and SME lending and respective borrowers, is quite encouraging though there is still a need to accelerate it to ensure speedy job creation and fostering inclusive growth.


Banks, Islamic banks and microfinance institutions are not only lending additional and more inclusive loans to the agriculture sector and SMEs but have also been making green loans and diversifying their product base. That should help attain SDGs like promoting inclusive and sustainable industrialisation.

Under the Green Pakistan Programme aimed at developing forest infrastructure in the country and improve forestry economic management, banks have an ideal opportunity to accelerate their green financing, more so as the World Bank has offered $100m to the government to make the programme a success.

Last month, the Asian Development Bank urged member-states to create of a 20-year Green Financing Catalysing Facility as a green financing vehicle. Banks can participate in setting up such vehicles and lend generously for environment-friendly projects under public-private partnership, senior bankers say. At present, banks’ green financing is mostly limited to loaning for clean energy projects.

“Financial inclusion plays a pivotal role in the community that we live in. We believe that by doing things the right way, banks can be a powerful force for good in society” — Shazad Dada, CEO of Standard Chartered Bank

Banks’ massive consumer financing, particularly in the past two years, is also expected to help Pakistan attain loftier SDGs like ensuring healthy life and promoting well-being for citizens, achieving gender equality, ensuring quality education and promoting learning opportunities for all, bankers say.


Growing housing finance, energy and physical infrastructure financing by banks (mostly related to China-Pakistan Economic Corridor) should also go a long way in enabling Pakistan to meet key SDGs. “But for banks, except for targeted lending, there isn’t much to show how they’re contributing to meeting SDGs even though all banking activities in one way or the other make this contribution,” says a senior executive of one of the top five banks.

Financial inclusion is a must for meeting a number of SDGs. One key indicator for financial inclusion is the number of bank accounts, which rose to about 46.5m in December 2016 from around 43.4m in December 2015 — an increase of 3.1m in a year. Another indicator could be the total number of active microfinance borrowers that rose from 3.6m in 2015 to 4.2m in 2016, according to Microfinance Network’s yearly review.

The number of women borrowers also jumped from 2m in 2015 to 2.3m in 2016.

Challenges remain, however, as not all banks are tapping into lending opportunities. Moreover, not all of them are offering banking facilities to unbanked areas.

Microfinance institutions have made the most noticeable contribution in serving the unbanked and under-banked people. But they still have a long way to go to make any significant impact on a large section of poor population.

Bank financing of governmental welfare programmes that target women, youth development and empowerment often remain ineffective due to the lack of professional approach of the political guardians of such programmes. This makes it difficult to attain several SDGs.

And as banks remain shy of designing tailor-made banking products, certain good opportunities remain untapped thus affecting the pace of work on meeting SDGs.

“For example, banks can make a great contribution towards meeting SDGs if they start financing, under public-private partnership, large-scale civic projects for more efficient water distribution and solid waste management in mega cities, muses an official of the Sindh government.

Start-up financing that can help in meeting key SDGs, including job creations and women empowerment, also gets very little attention from banks and most successful tech start-ups continue to arrange finance from abroad.

Published in Dawn, The Business and Finance Weekly, September 25th, 2017

__________________
“What we need in this country today is more courage and more belief in the things that we have.”- Thomas J. Watson

Sir i am from lahore Punjab and did not received the interview letter...
Name M. Fahad Shahzad Khan
Roll 44504
Case NOf4 277c/2016-R
serial number ???

ASSALAM O ALAIKUM! Sir SAMMAR. Sir I am currently doing a job in school education department punjab but at the time of interview I forgot to mention it and the clerk didn't ask me whether I am employed or not. Is it ok or will it cause any problem if I am finally selected as IIR.

One important point I got this job in August 2017 after I sent the required documents to FPSC in April.

issued
Ordinance is issued by the president. Bill is introduced in lower house (parliament) and after being approved becomes the Act. Rules are by framed by the department and are about the procedure.

Wa Alaikum Assalam,
You don't need to to worry. It is perfectly fine if you did not mention it.

candidates who still hv not received letter...
what should they do?

Candidate No 1:

Today My interview in Quetta center, 2 p.m ,
When i Was entering the room of interview, A staff member of commission commented, You (means me jamal) look like a commissioner already as for his opinion.
As i entered a person by name Farooq Ahmad member of the panel told me to have a set on a chair before the panel and they felt don't need to introduce myself before them.
At first the person commented in a critical way on my CGPA as i have 2.57 (68% marks in my MBA degree) and he started by saying, let to check you. he asked about my family and wanted to know about my priorities in life. i dealt with it in a good way and noticed his satisfaction and asked one question about management and strategic management. He referred me to the commissioner for further.
The commissioner asked about withholding taxes and about the time of filing withholding statements by agents, and also asked who these withholding agents are and what they do. He further asked about sales tax and filing of sales tax return and income tax return.
After Mr Khattak asked questions and i am quoting his statement, China is doing trade, India is doing trade and both are running through trade deficit and Indian trade deficit is increasing year by year but they (indian) continue to expand trade to compete china although their trade deficit is increasing. as it is an open statement and i explained it in a well organized way and compared it with united states and also inform them about deficit balance as it is not so much deteriorating for economy as we all are perceiving and also told them that india wants to increase their market share by employing dumping strategy as was utilized by Chinese in their economy. Mr khattak further questioned me which was related to Pashtu, Urdu and english literature, the question was about pashtu poet Khushal khan khattak, Mirza ghalib and sheikhs spare as famous people in their respective background and he further added why as a people of our time in our respective languages and backgrounds we couldn't provide sons/daughters like Khushall, Ghalib and sheikhs spare?
It was almost a general interview with some specifications and i had a wonderful time with them and they were very polite and friendly. Further i am not an artist of discussion to draw the whole picture of the process. overall it was a nice interview and i was able to defend myself and make them satisfied.

Candidate No 2:

So finally it happened... 10.10.2017 centre Quetta
Not up to ma expectation...
It was like they have been exhausted...
Fpsc's member was a bit harsh ... tried to compressed me through different questions related to my subjects
Questions was about management
Job related
Depreciation
Amortization
Communication role in business
And poets name who's mother toung was not urdu

Candidate No 3:

My interview at Karachi center.
Intro
What is the concept of women empowerment in islam.
What is minimum tax
what is skill development
Difference b/w human development and skill development.
Rate of tax on company
Advance tax and example
taxable income
Further more 2 to 3 questions that i am unable to recall.
thank you

__________________
“What we need in this country today is more courage and more belief in the things that we have.”- Thomas J. Watson

Can someone explain in brief:
Final tax regime (FTR)
Normal tax regime(NTR)
Advance tax regime(ATR)