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[Lion Heart]

Details of un-registered buyers: Karachi LTU issues controversial notices to big companies

Large Taxpayers Unit (LTU) Karachi has issued notices to big companies and corporate entities seeking details of their un-registered buyers retrospectively and encompassing the period 2010-11, which is totally against the provisions of SRO821(I)/2011, applicable from January 2012.

It is learnt on Wednesday that a number of sales taxpayers registered with LTU Karachi, were served with the notices contending that sales tax return of the units for the period ended June 2011 have been reviewed and element of sales to un-registered person were found, accordingly they were required to furnish details of National Tax Number (NTN) and other particulars of such buyers under section 176 of the Income Tax Ordinance 2001.


In case of non-compliance, the LTU Karachi has cautioned that penal action will be taken against the non-compliant taxpayers under section 182 of the Income Tax Ordinance 2001.

The show cause notices of the LTU Karachi have also directed the taxpayers to provide complete addresses and other particulars of un-registered buyers and distributors etc.

Commenting on notices of LTU Karachi, Arshad Shehzad, a prominent sales tax expert of Karachi told Business Recorder here on Wednesday that issuance of notices by LTU Karachi has sparked new debate over controversial notification 821.

The FBR has implemented the SRO.821(I)/2011 from January 2012, but the LTU Karachi has directed the corporate sector registered with them to provide details of their un-registered buyers for the period of July 1, 2010 to June 30, 2011.

Legally, the SRO.821(I)/2011 for the documentation of the un-registered buyers cannot be enforced retrospectively.

The SRO.821(I)/2011 has been implemented from January 2012 to be applicable on the sales tax returns to be filed in February 2012.

Mandatory provision for furnishing NTN/ CNIC of unregistered buyers were recently made part of the sales tax law through notification 821(I)/2011 dated 6th September 2011.

The said notification was overwhelmingly criticised by the trade and industry, thus thereafter forced the government to hold the notification in abeyance till December 31, 2011.

The implementation of the notification is yet not decided and generally there are perception for it's extension till next Finance Bill.

When the Karachi based tax experts was questioned about such notices, he replied that under such situation where government is in the process of dialogue with trade and industry for bringing some modalities to tap the un-registered segment of the tax net, issuance of these sorts of notices may directly hurt the efforts of the policy makers.

He was in the view that legally under the Sales Tax Act, the sales tax payers are not obliged prior to issuance of notification 821(I)/211 to report details of NTN, CNIC or any other particulars of such buyers who are not registered.

[Lion Heart]

Rizvi assumes charge as FBR chairman

ISLAMABAD: Prime Minister Yousaf Raza Gilani has approved the promotion of Mumtaz Haider Rizvi, a BS-21 officer of Customs and Excise Group, presently posted as Member Customs, Federal Board of Revenue (FBR) to BS-22. Rizvi is posted as Member Customs by upgrading the post to BS-22. He is also assigned the additional charge of the post of FBR chairman with immediate effect, an official statement issued by Prime Minister Secretariat said on Monday. After the retirement of the former Chairman Salman Siddique, the post of FBR chairman was vacant and FBR Strategic Planning Member Mehmood Alam was holding additional charge of FBR chairman. staff report

[Amin Khan]

CGT collection : Taxman visits NCCPL
Our Equities Correspondent | Business | From the Newspaper
5 hours ago

KARACHI, Feb 14: A senior official of the Federal Board of Revenue (FBR) visited the National Clearing Company of Pakistan Limited (NCCPL) on Tuesday to study NCCPL’s systems and mechanism being deployed for computing and deducting the Capital Gains Tax (CGT).

“The visit has been a consequent step to the finance minister’s approval to the SECP proposal on revamping CGT that was submitted to the FBR last month,” an official at the regulatory body said.

The market received the news with a tinge of optimism since it symbolised a step forward to the implementation of SECP proposals relating to CGT. Besides the ‘no-question on funds invested in stocks till 2014’ and the rate to remain unchanged for two years, the proposals specified NCCPL as the collecting agent of CGT for FBR.

“The finance minister had approved all the proposals of the SECP during his visit to the KSE last month in regard to the CGT implementations,” said a stock broker on Tuesday.

Yet he said that the FBR had made no independent statement on their acceptance, despite the regulators assertion that the “taxmen were aboard”. The Tuesday event lent credence to the regulators’ earlier claims.

A SECP official said that in terms of the proposal “to provide ease of calculation and documentation to individual investors, the NCCPL will act as a withholding agent to deduct and deposit the CGT from investors’ transactions”.

He affirmed that the NCCPL, SECP, FBR and other relevant capital market service providers were working out the exact details so that necessary legal and operational changes could be made by the target date of April 1, 2012.

The NCCPL during its presentation on Tuesday briefed FBR on its operational and legal infrastructure and capabilities to undertake the envisaged role.

The NCCPL’s IT-intensive set-up would allow system based computation of CGT without human involvement.

Under the proposed mechanism, the NCCPL would compute and deduct CGT for every investor by constructing an inventory portfolio based on its unique identification number.
(DAWN)

[fasee]

The government is planning to launch a new revenue mobilization project for the FBR Friday - Feb 17, 2012 | 09:51:11 | 20 of 23
The government is planning to launch a new revenue mobilization project for the FBR, with the WB technical assistance of US$3mn for continuation of tax reforms to raise revenue collection by improving effectiveness, accountability and transparency of tax machinery through institutional changes in the FBR.

[fasee]

FBR reiterates its tax collection target of PkR1.95tr for FY12 Thursday - Feb 16, 2012 | 10:52:18 | 19 of 23
FBR has reiterated its tax collection target of PkR1.95tr for FY12 and in this regard will strictly monitor the tax collection targets from LTUs and RTUs.

[Amin Khan]

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