Tax relief offered to
Leasing companies have been offered relaxation in payment of tax in
view of the prevailing recession in the country.
Under Circular No 16 of the Securities and Exchange Commission of
Pakistan (SECP), dated Sept 9, '99, payment of one fifth of the tax accruing for '98-99,
would be considered full compliance of the liability under IAS-12.
A committee formed under M. Khalil Mian, chairman Policy Board, SECP,
has recommended the following: In view of the present recession, compliance to IAS-12 in
strict terms may result in unnecessary distortion of their operating results as in case of
leasing companies, if fresh leases are equal to the leases expiring, practically there is
no deferred tax liability till a company ceases to operate.
The IAS-12 requires the companies to raise full provision for deferred
tax on pro-rata basis or come with other reasonable basis by June 30, 2002. This date has
already been extended to June 30, 2003 by the Institute of Chartered Accountants of
No WT one expired NTN card
Central Board of Revenue has directed all banks and financial
institutions not to demand Withholding Tax from the persons whose NTN cards have expired.
Through a Circular No 17 of 1999, dated Sept 9, 1999 the Income Tax
department says instances have been brought to the notice of the CBR where banks and
financial institutions have demanded withholding tax under section 50 (2B) of the Income
Tax Ordinance, 1979, from the persons holding National Tax Number (NTN) on the ground that
their NTN certificate or card had expired.
PS awaits Rs629m excise duty refund
Pakistan Steel (PS) is awaiting refund of excise duty amounting to
Rs629 million, from the Central Excise Department, paid on billets and slabs but the
department is reluctant to release the amount.
Pakistan Steel, in a letter to Chairman Central Board of Revenue (CBR)
and Collector Central Excise, has referred to the judgment of the Sindh High Court which
has decreed in favour of PS for refund of Rs629 million.
ECC okays Wapda-IPPs agreements
The Economic Coordination Committee of the Cabinet (ECC) approved the
Memorandums of Understanding (MoUs) signed by Wapda with six IPPs on tariff reduction in
order to resolve the two-and-a-half years old dispute.
Wapda has signed an agreement with six IPPs to reduce their tariff by
four percent to 20 percent with certain conditions, the sources said.
The ECC which, met here with Finance Minister Ishaq Dar in the chair,
considered the report of the committee constituted for resolution of dispute with IPPs
with regard to tariff reduction and all other issues.
The MoUs show that Wapda would gain $ 455 million over the originally
negotiated deal in 1994 dollar terms.
These six IPPs are Southern Electric Power Company (Sepcol), Habibullah
Coastal Power Company, Saba Power Company, Japan Power Company, Power Generation System
Limited and Altern Energy Limited.
Foreign firm for deletion of safeguards
A US-based agro bio-technological multinational firm, Monsanto has
asked Pakistan to delete a clause of the proposed Intellectual Property and Breeders
Rights (IPBR) Act offering safeguards against negative impacts of transgenic seed
Monsanto is known for genetically engineered farm varieties of various
crops and promises to make huge investment in farm sector.
Sources disclosed that the issue came up for discussions with concerned
official of the ministry of food, agriculture and livestock (MINFAL) at a meeting with the
representatives of the firm on Aug 31.
Turkish firm withdraws $149m claim
A painful thorn between the National Highway Authority (NHA) and
Turkish firm Bayindir Holdings which is constructing the Islamabad-Peshawar section of the
Motorway has been removed as it has withdrawn its US $149 million claim for the loss of
profit it had incurred following the cancellation of the contract in January 1994.
The matter was "amicably settled" on Wednesday last (Sept.1)
as Bayindir representatives and NHA officials sorted things out. However, the end to the
ungainly situation was made possible by Bayindir's decision to withdraw the claim.
An award for the 28 m claim for expenses has also been settled but the
amount has not been disclosed by either NHA or Bayindir.
Gia Jilani, Area General Manager and CEO of Bayindir in Pakistan told
in a mood of elation that a "dark chapter" had been closed.
Financial Rules may be amended
General Financial Rules (1932) are being amended to create the
provision for outsourcing the functions of federal revenues receipts compilation,
reporting and reconciliation to Citibank, a private foreign bank.
According to reliable sources, the amendment has been necessitated as
GFR of 1932, and Supplementary Financial Rules were in the way of awarding the outsourcing
contract to private parties.
The government last week reportedly directed the CBR to cooperate fully
with the Citibank to help create within itself the required capacity for the intended
outsourcing functions so that it could qualify for the contract.
Habib Bank Ltd. is also a contender for the job. But the Citibank is
slated to win the contract because of its accesss to top decision makers in Lahore.
The Citibank has already been provided the following information to
understand the working of the entire processing of the functions to be outsourced: Daily
Revenue Receipts Report (RRR) compilation; Receipts Analysis Input (RAI); Revenue Analysis
based software Development Programme (RADP); and Revenue Reconciliation Assistance (RRA)
which is a permanent feature at PRAL for reconciliation connectivity between
Officials said that Citibank took only about 10 days to glean these
records and reported to the CBR that it was ready to make presentations to all the four
tax collecting wings: Income Tax, Sales Tax, Central Excise Duty and Customs.