MAQBOOL HAROON SHAHID SAFDAR & CO. CHARTERED … · During July-March 2017-18, Foreign Portfolio Investment (FPI) increased to US$ 2,357 million compared to US$ - 631 million last

MAQBOOL HAROON SHAHID SAFDAR & CO.

CHARTERED ACCOUNTANTS 1

FINANCE ACT HIGHLIGHTS 2018




FINANCE ACT, 2018

This memorandum portrays the significant changes which have been introduced through Finance Act

2018 in different taxation laws. These changes are mainly relating to Income Tax, Sales Tax, Federal Excise

Duties, ICT (Tax on Services) and Custom duties. It also includes analysis of micro and macro-economic

characteristics of our country during the year 2017-2018.

We have prepared this commentary for benefit, information and guidance of our prestigious clients both

local and foreign clients doing business in Pakistan and it is available at our website

https://www.mhssco.com.

These approved changes will generally be applicable from 1st July 2018 until and unless specified.

The notes specified in this document are approved by National Assembly on 18 May, 2018 and shall be

published as Finance Act 2018.

The memorandum is aimed at providing general guidance with the objective of keeping our clients and

staff abreast of the changes in the aforementioned laws. MHSS accepts no duty of care or liability for any

loss occasioned to any person acting on the basis of this publication. The readers are therefore advised to

seek professional advice before exercising any judgment, interpretation of any legal provision and acting

thereupon.

https://www.mhssco.com/




SECTION A. BUDGET AT A GLANCE ....................................................................................................................................... 4

SECTION B. OVERVIEW OF THE ECONOMY ....................................................................................................................... 6

SECTION C. INCOME TAX ORDINANCE, 2001 ................................................................................................................ 19

SECTION D. TAX RATES FOR TAX YEAR 2019 ................................................................................................................ 49

SECTION E. SALES TAX ACT, 1990 ...................................................................................................................................... 50

SECTION F. FEDERAL EXCISE ACT, 2005 ......................................................................................................................... 66

SECTION G. CUSTOMS ACT, 1969 ........................................................................................................................................ 75

SECTION H. TAX REFORMS PACKAGE ............................................................................................................................... 86




SECTION A. BUDGET AT A GLANCE

Sources of Funds 2018-19 2017-18 Change

Rupees in Billion %

Net Revenue Receipts* 3,071 2,676 14.8

Net Capital Receipts 559 678 -17.6

Public Accounts Receipts 127 69 84.1

External Receipts 1,118 1,230 -9.1

Provincial Surplus 285 274 4.0

Bank Borrowings 1,015 586 73.2

Total 6,175 5,513 12.01

APPLICATION OF FUNDS 2018-19 2017-18 Change

Rupees in Billion %

General Public Service including others ** 3,923 3,451 13.7

Defense Affairs and Services 1100 999 10.1

Development Expenditure 1,152 1,063 8.4

Total 6,175 5,513 12.01

49%

12%

1%

22%

5%

11%

50%

9%2%

18%

5%

16%

2017-18

Net Revenue Receipts*

Net Capital Receipts

Public Accounts Receipts

External Receipts

Provincial Surplus

Bank Borrowings

63%

18%

19%

63%

18%

19%

2017-18

General Public Service including others**

Defense Affairs and Services

Development Expenditure




*NET REVENUE RECIEPTS 2018-19 2017-18 Change

Rupees in Billion %

Tax Revenue 4,889 4,147 17.9

Non-Tax Revenue 772 845 -8.6

Gross Revenue Receipts 5,661 4,992 13.4

Less: Provincial Share in Taxes 2,590 2,316 11.8

Total 3,071 2,676 14.8

GENERAL PUBLIC SERVICES AND OTHERS**

2018-19 2017-18 Change

Rupees in Billion %

General Public Service 3,586 3,132 14.5

Public Order and Safety 132 119 10.9

Environment & Social Protection 4 3 33.3

Health 14 13 7.7

Economic Affairs 81 81 0.0

Education Affairs 97 91 6.6

Recreation Culture & Religion 9 12 -25.0

Total 3,923 3,451 13.7

FBR Taxes

86%

Non-Tax Revenue

14%

General Public

Service

92%

Public Order and

Safety

3%

Environment &

Social Protection

0%

Health

0%

Economic Affairs

2%

Education Affairs

3%

Recreation Culture

& Religion

0%




SECTION B. OVERVIEW OF THE ECONOMY Pakistan economic growth for fiscal year 2017-18 has been recorded at 5.79 percent as compared

to last year’s economic growth of 5.37 percent being the highest in last thirteen years. The 5.79

percent growth is achieved on the back of recovery in the agriculture sector and better than

expected performance in the services sector along with consistent growth in industrial sector.

Fiscal deficit as a percent of GDP was confined at 2.3 percent for the period July-Dec 2017-18

against 2.5 percent in the same period of fiscal year 2016-17.

The NDA of the banking system observed an expansion of Rs. 1,243.7 billion (8.9 percent) during

July-March, FY2018 compared to Rs. 1,040.9 billion (8.8 percent) in the same period of last year.

Pick up in credit to the private sector, credit to Public Sector Enterprises (PSEs) and rise in

government borrowing from the banking system were the major causative factors of monetary

expansion during July-March, FY2018.

Inflation during July-March average at 3.78 percent as against 4.01 percent in the same period

last year on account of subdued food prices which offset the impact of rise of petroleum prices.

During July-March FY2018 exports increased by 13.1 percent and stood at US$ 17.1 billion as

compared to US$ 15.1 billion in July-March FY2017. Imports during the first nine months (July-

March 2016-17) increased from US$ 38.4 billion to US$ 44.4 billion, increased by 15.7 percent

compared with the same period last year. The trade deficit widened by 20.6 percent to US$ 22.3

billion in July-March FY2018 due to surged import bills.

The country’s total liquid FX reserves as on end-March FY2018, declined to US$ 17.95 billion of

which SBP US$11.78 billion and Commercial Banks US$ 6.17 billion. The average exchange rate

during July- March FY2018, at 110.4 to a dollar, was down marginally (5.24 percent) against last

year’s comparable average of 104.9. Pak rupee remain stable in first half of financial year and

fluctuated later on.

As at March 2018 gross public debt reached at Rs. 22,819.8 billion (66.3 percent of GDP)

compared to Rs. 19,633.8 (66.98 percent of GDP) billion as of March 2017, representing an

increase of 1,412.7 billion during first nine months of current fiscal year as compared with Rs.

1,729 billion during the same period last year. The Credit Rating of the country is remained stable

to B as compared to last year.

During July-March 2017-18, Foreign Portfolio Investment (FPI) increased to US$ 2,357 million

compared to US$ - 631 million last year.

National savings reached to 11.4 percent of GDP in FY2018 against 12.0 percent last year.

Domestic savings are recorded at 6.1 percent of GDP in outgoing fiscal year as compared to 6.6

percent of GDP last year.




The PSX-100 index which was at 46,565.29 level as on 30th June 2017 declined by 1,004.99 points

and remained at the level of 45,560.30 as on March 30, 2018 showing decline of 2.16 percent.

Market capitalization was Rs. 9,370.6 billion on March 3, 2018. During this period, the Index

touched its highest point at 47,084 on Aug 03, 2017, whereas its lowest point was at 37,919 on

December 19, 2017, the behavior might be linked to depreciation of Pakistani Rupee.

GROWTH AND INVESTMENT

Economy of Pakistan has continued the growth momentum as the GDP growth reached to 5.79

percent in 2017-18 against the growth of 5.37 percent registered last year. The economic growth

in outgoing fiscal year is highest in the last thirteen years, which is an indicator that there is a

strong turn around in economic activities of the country.

The current GDP of Pakistan is considered much below Pakistan’s potential, and is significantly

lower than other countries in the region especially Bangladesh and India which are growing at

the rate of 7 percent and 7.4 percent respectively as depicted in the graph below:

Industrial Sector contributes 20.91 percent in GDP; industrial sector recorded a growth of 5.80

percent as compared to 5.43 percent last year. During July-March FY2018, the Large-Scale

Manufacturing (LSM) registered an impressive growth of 6.24 percent as compared to 5.82

percent in the same period last year. For the current financial year, growth in electricity

generation and distribution was 1.84 percent in comparison to previous year growth of 5.82

percent.




3.04 percent and 9.13 percent respectively in current fiscal year as compared to growth of 5.43

percent and 9.84 percent in the previous year.

The Agricultural Sector accounts for 18.86 percent of GDP in current financial year as against

19.22 percent in the previous year. Agriculture Sector registered a growth of 3.81 percent against

the growth of 2.07 percent last year.




Services Sector has witnessed a growth of 6.43 percent in this fiscal year as compared to 6.46

percent last year. Finance and Insurance contributed positively by 6.13 percent. All components

of services contributed positively, as Wholesale and Retail Trade grew by 7.51 percent, Transport,

Storage and Communication by 3.58 percent, Housing Services by 4.0 percent, General

Government Services by 11.42 percent and Other Private Services by 6.15 percent.

The private consumption expenditure in nominal terms reached to 82.1 percent of GDP in FY 2018

as compared to 82.0 percent of GDP last year, whereas public consumption expenditures are 11.3

percent of GDP as compared to 12.4 percent last year.

INVESTMENT & NATIONAL SAVING

Total investment has reached to the level of Rs. 5,649 billion as compared to the Rs. 5,144 billion

last year, showing the growth of 18.26 percent in FY2018. Investment to GDP ratio has reached

to 16.4 percent in FY 2018. Fixed investments have increased to Rs. 5,099 billion as compared to

Rs. 4,633 billion last year, and recorded growth of 10.1 percent and fixed investment as

percentage of GDP is recorded at 14.8 percent. Private investment has registered a growth of 5.2

percent of total investment and private investment as percentage of GDP reached to 9.8 percent.




Public investment grew by 21.1 percent and as percentage of GDP it has increased from 4.1

percent to 5.0 percent.

National savings reached to 11.4 percent of GDP in FY2018 against 12.0 percent last year.

Domestic savings are recorded at 6.1 percent of GDP in outgoing fiscal year as compared to 6.6

percent of GDP last year.

During July-March FY2018, foreign direct investment received were US$ 2,631.1 million compared to US$ 2,522.3 million in the same period last year recording a growth of 4.31 percent.

In terms of sectors, the power sector attracted the highest net FDI of US$ 711.1 million in-line

with CPEC-related sectorial activity. Similarly, as infrastructure projects under CPEC in process, the construction sector saw net FDI of US$ 525.4 million. Oil & gas explorations attracted net FDI of 154.6 million. Investment under China Pakistan Economic Corridor (CPEC) is expected to be around US $60 billion by 2030.

FISCAL DEVELOPMENT

Overall, Pakistan’s fiscal position improved considerably given that the consolidated fiscal deficit that averaged 7.2 percent of GDP between FY2009 and FY2013 registered a decline to an average of 5.8 percent between FY2013 and FY2017. Overall, the fiscal deficit registered a persistent decline from 8.2 percent of GDP in FY2013 to 5.5 percent, 5.3 percent and 4.6 percent over the successive 3 years. However, during FY2017 the fiscal deficit increased to 5.8 percent against the revised target of 4.2 percent of GDP primarily due to low provincial surplus, a shortfall in FBR tax collection and increase in project loans on account of CPEC related activities.




Fiscal sector continued to perform well during the first half of current fiscal year as strong growth

in revenues relative to expenditures helped in containing the fiscal deficit to 2.3 percent of GDP

during first half of FY2018 as compared to 2.5 percent of the corresponding period last year.

CAPITAL MARKETS

FY-2018 witnessed an overall decline in the stock market indices by 1,004.9 points and witnessed

a slight decrease of about 2.16 percent since the inception of the year. Average daily value traded

in first nine months was Rs. 8.54 billion and average daily turnover was 192.25 million shares.

The PSX – 100 Index demonstrated an overall lower performance during this period from July

2017 – March 2018. The index touched its highest point at 52, 876.4 as on May 24, 2017 whereas,

its lowest point was at 37,919 as on December 19, 2017 depicting a decline of 7.1 percent.

The Market Capitalization stood at Rs. 9,370.6 billion on March 30, 2018 depicting a decline of 5.2

percent.

Some of the relevant statistics related to the Pakistan Stock Exchange are as follows:

Description 2014-15 2015-16 2016-17 2017-18 P

PSX – 100 Index Points (Month end June) 34,399 37,784 45,560.3 46,565.29

PSX – 100 Index – Growth % 16 9.8 23.2 -7.1

Aggregate Market Capitalization (Growth %) 5.7 2.3 25.5 -5.2

INFLATION

Inflation remained at 2.6 percent in FY2016 and increased to 4 percent in FY2017. Inflation during

July-March FY2018 has been reduced to 3.8 percent.

Food inflation have been estimated at 0.75 percent as compared to 1.42 percent in the same

period last year. The decreased in food inflation over the last year is due to moderate decrease in

prices of major consumable food items.




Non-food inflation have been estimated at 3.1 percent as compared to 2.6 percent in the same

period last year. The increase in food inflation over the last year is due to moderate increase in

prices of major consumable items.

Core inflation which is non-food & non-energy during July-March FY2018 is recorded at 5.4

percent as against 5.1 percent during the same period last year.

Description 2014-15 2015-16 2016-17 2017-18 P

CPI (Consumer Price Index) 4.8 2.8 4.0 3.8

Food Inflation 3.6 2.1 1.42 0.75

Non-food Inflation 5.7 3.3 2.60 3.14

SPI (Sensitive Price Index) 1.9 1.4 1.4 0.9

WPI (Wholesale Price Index) 0.03 -1.3 3.8 2.7

BALANCE OF PAYMENTS & RESERVES

The overall external account balance recorded US$ 4.37 billion during July-March FY2018

compared to US$ 1.61 billion during the same period last year, on the back of lower financial

inflows and increased international oil prices.

The exports target for FY2018 was set at US$ 23.09 billion. Growth in China and India last year

was supported by resurgent net exports and strong private consumption, respectively, while

investment growth slowed down.




Exports during July-February FY2018 reached to US$ 14.8 billion as compared to US$ 13.3 billion

in July- February FY2017, registered a remarkable growth of 11.6 percent.

The current account balance was increased by 50.5 percent during July-March FY2018 as

compared to last year (US$ 12.03 billion in FY2018 against US$ 7.99 billion). As a percentage of

GDP, it stood at 3.5 percent compared to 4.1 percent of the comparing period last year.

The monthly imports during July-March FY2018 witnessed rising trend. Import averaged US $ 4931 million per month. On average the monthly import increased by US $ 669 million per month. During July-March FY2018 import reached to US$44379 million as against US $ 38369 million, register a growth of 15.7 percent.




The overall trade deficit posted an increase of 170.69 percent during July-March FY2018. During

July-March FY 2018 exports increased by 12.4 percent and stood at US$ 18.2 billion as compared

to US$ 16.3 billion in July-March FY2017. The imports increased by 16.6 percent in July – March

FY2018 compared to last year.

Remittances are increased during July-March FY2018, the remittances remained US$ 14.61 billion

as compared to 14.10 billion last years.




The remittances registered a significant growth of 3.6 percent during July-March FY 2018 as

against the decline of 2.0 percent last year and reached to US$ 14.6 billion during first nine month

of current financial year as compared to 14.1 billion during the same period last year. The trend

will continue in coming months and is expected that the target of US$ 20.6 billion for FY 2018 is

likely to be achievable.

Total foreign exchange reserves reached to highest level to US$ 20.4 billion compared to US$

21.40 billion at end of June 2017.

Exchange rate remained at Rs. 110.4 per US$ during July-March FY2018, compared to Rs. 104.9

per US$ at end of June 2017. The Pak Rupee’s deprecation was around 5.24 percent during July-

March FY2018.




Services trade deficit increase by 33.66 percent during the first nine months of FY2018.

FOREIGN DIRECT INVESTMENT

Foreign investment picked up pace from last year’s level, both direct and portfolio investment

contributing to be gains. Net FDI inflow rose 4.4 percent to US$ 2.1 billion in July -March Fiscal

Year 2018, against US$2.0 billion of the same period last year.

In order to attract foreign investment in other sectors, Pakistan needs to improve its position in doing business as the country falls behind most of its regional peers.




Some of the relevant statistics related to balance of payments and foreign exchange reserves are

as follows:

PUBLIC DEBT

Public debt was recorded at Rs. 22,819 billion as at end December 2017, increased by 6.6 percent. Total public debt recorded an increase of Rs 1,413 billion during first six months of current fiscal year.

Domestic debt registered an increase of Rs 582 billion while government borrowing for financing fiscal deficit from domestic sources was Rs 412 billion, indicating an increase in government credit balances with the banking system during the period under review. Increase in external debt contributed Rs 830 billion to the public debt, while, government borrowing for financing fiscal deficit from external sources was Rs 384 billion. Therefore, the increase in external debt signifies both borrowings for financing fiscal deficit as well as revaluation losses due to Pak Rupee depreciation against US Dollar as well as appreciation of other currencies against US Dollar.




During July-December 2017-18, public debt servicing reached at Rs. 980 billion against the annual budgeted estimate of Rs. 1,689 billion. Public debt servicing consumed nearly 41 percent of total revenues during first half of current fiscal year fiscal year remaining at the same level recorded during the corresponding period last year.

External debt and Liabilities (EDL) stock was recorded at US$ 91 billion as at end of February

2018 out of which external public debt was US$ 69.3 billion. Moreover, external public debt

recorded an increase of US$ 4.4 billion in first half of fiscal year 2017-18.

Description 2014-15 2015-16 2016-17 P

2017-18 P

Domestic Currency Debt – Growth 11.7 9.8 8.23 3.9

Foreign Currency Debt – Growth 2.1 11.3 1.21 12.7

Foreign Currency Debt to Total Public Debt Ratio 29.8 30.75 30.61 32.35

Total Public Debt to GDP Ratio 63.3 67.7 67 66.3

Depreciation in Value of Rupee against US$ - % -3.0 -2.9 -0.5 5.24

International Credit Rating – S&P B- B- B B

New Guarantees issued as a percentage of GDP 0.6 0.7 1.2 0.2

TAXATION EXPENDITURES

Total Taxation expenditure for FY2018 have been estimated at Rs. 540.98 billion compared to Rs.

415.75 billion for the previous fiscal year representing an increase of 30.12 percent.

Expenditure in income tax contribute 11.42 percent to total expenditure whereas expenditure in

sales tax and custom duties account for 51.95 percent and 36.63 percent respectively.

Custom duties expenditures have been increased from Rs. 151.68 billion to Rs. 198.15 billion for

the fiscal year 2017-18 representing an increase of 31 percent.

Income tax expenditure represents a substantial increase of 341 percent as compared to last year

whereas sales tax expenditure has been increased to 12 percent.

Description 2014-15 2015-16 2016-17 P

2017-18 P

Income Tax 83.6 67.3 14.005 61.78

Sales Tax 478.4 207.3 250.06 281.05

Custom Duties 103.0 119.9 151.68 198.15

Total 665.0 394.5 415.75 540.98




SECTION C. INCOME TAX ORDINANCE, 2001 Salient features

Corporate tax rates for companies other than banking companies is further reduced by 1% for tax

year 2019 and each year will be further reduced by 1% till tax year 2023.

Tax rates for individuals are substantially reduced [Maximum rate of 15%]

Tax rates for AOP are reduced from 35% to 30%.

Tax rate of advance tax for non-filer on banking transactions reduced from 0.6% to 0.4%.

Tax on commercial importers changed to minimum taxation.

Non-filers will not be eligible for the registration of vehicles and immovable property valuing in

excess of Rs. 5 million.

Debit and credit card transactions outside Pakistan to be subjected to advance tax at 1% for filer

and 3% for non-filers.

Non-recognition of gain arising from gifts is restricted to gifts from a relatives only.

Gain arising to a non-resident company from disposal or alienation outside Pakistan of an asset

located in Pakistan will be treated as Pakistan source income and chargeable to tax at 15%.

Resident persons will be required to provide details for remittances in excess of Rs. 10 million in

any tax year.

Resident individual taxpayers are required to file foreign income and asset statement in case

where foreign income equal to or exceeds USD 10,000 or foreign assets of value USD 100,000 or

more otherwise penalty of 2% of value of such income or assets.

Tax deducted on payment against services to permanent establishment of non-residents to be

treated as minimum tax.

Relaxation on taxation of undistributed profits by way of:

a. Reduction of rate of tax from 7.5% to 5%;

b. Requirement of 40% distribution of profits is reduced to 20%;

c. Bonus shares are no longer be treated as profit distributed.

Restriction is imposed on the allowability of carry forward of depreciation and amortization

losses up-to 50% of taxable income of the taxpayer arising from income from business only.

The eligible period for investment in plant & machinery for availing tax credits under section 65B

B, 65D and 65E is extended to 30 June 2021.

Automatic selection of a case for audit where the return of income was not filed within due date

or extended date under section 214 D is withdrawn.

The Act introduced the concept of controlled foreign company whereby subject to certain

conditions, the income of a foreign company controlled by a resident person, would be taxable in

the hand of such resident persons.

Alternate Dispute Resolution, ADRC shall only hear the case after the withdrawal of appeals filed

by either party pending before any appellate authority and that the decision of the ADRC shall be

binding on both parties.

Withholding tax limits are enhanced in respect of sale of goods from Rs. 25,000 to Rs. 75,000 and

for services rendered from Rs. 10,000 to Rs. 30,000

Requirement of payment of 25% of the tax demand has been reduced to 10% to avoid tax recovery through attachment of bank accounts or recovery from third party.




1. DEFINITIONS

[SECTION 2]

i. FEE FOR OFFSHORE DIGITAL SERVICES ARE DEFINED TO TAX IN PAKISTAN

[Section 2(22B)]

From past three to four years, Pakistan has entered into various international agreements for

preventing profit shifting and safeguard our tax base. Being signatory to these international

agreements, Pakistan is plugging many anti abuse measures in domestic tax laws. These

measures, beside others, also include the taxation of offshore digital services. Previously the non-

residents who were providing such offshore digital services were availing the current loopholes

to avoid payment of tax in Pakistan whereas the resident s were being taxed. Thus, for the purpose

of including offshore digital services into scope of tax law, Finance Act 2018 has introduced a

new definition under sub section (22B) of section 2 of Income Tax Ordinance, 2001 in the

following manner:

“FEE FOR OFFSHORE DIGITAL SERVICES” means any consideration for providing or rendering services by a nonresident person for online advertising including digital, advertising space, designing, creating, hosting or maintenance of websites, digital or cyber space for websites, advertising, e-mails, online computing, blogs, online content and online data, providing any facility or service for uploading, storing or distribution of digital content including digital text, digital audio or digital video, online collection or processing of data related to users in Pakistan, any facility for online sale of goods or services or any other online facility.

ii. DEFINITION OF FILER INCLUDE FILERS OF AJ&K & GILGIT BALTISTAN [sub section (23A) of Section 2]

As per subsection 2 of section 1 of Income Tax Ordinance, 2001, Income Tax Ordinance, 2001 extends to whole of Pakistan except areas such as AJ&K and Gilgit-Baltistan. Now persons from these self-governed areas conducting various businesses/transactions within the territories of Pakistan and were charged high rate of tax due to being non-filler as their names do not appear on Active Tax Payer List maintained by FBR. Thus, for the purpose of providing relief to such persons who are filling income tax returns in AJ&k and GB, Finance act 2018 has amended the definition of filler by insertion of words “AJ&K Council Board of Revenue or Gilgit-Baltistan Council Board of Revenue.”

Now the Filler means a tax payer whose name appears in the Active tax payer list issued by Federal Board of Revenue or AJ&K Council Board of Revenue or Gilgit Baltistan Council Board of Revenue.

iii. EXCLUSION OF BONUS SHARES FROM THE DEFINITION OF INCOME [Section 2(29)]

Presently, the receipt of bonus shares by shareholders of companies is treated as income under sub section 29 of section 2 and thus subject to withholding tax under section 236 M and 236 N of ITO, 2001. However, these provisions were quite discouraging in nature that companies, being less inclined towards issue of bonus shares, could not ensure capital maintenance.

Now the act has amended the definition of “INCOME” by excluding the receipt of bonus shares along with withdrawal of withholding income tax section 236M & 236N. Pursuant to this change, the bonus shares issued by companies will no more be treated as income of shareholders nor these will be subject to withholding income tax.




iv. DEFINITION OF PERMANENT ESTABLISHMENT OF NON-RESIDENT PERSON [Sub section (41) of section 2]

The Act has introduced different amendments in the definition of “PERMANENT ESTABLISHMENT” in relation to a person by further clarifying about an agent who acts in Pakistan on behalf a non-resident person.

After amendment, clause e(i) will be read as:

(e.) A person, acting in Pakistan on behalf of the person (hereinafter referred to as Agent) if that agent

(i) has and habitually exercises an authority to conclude contracts on behalf of the other person or habitually concludes contracts or habitually plays the principal role leading to the conclusion of contracts that are routinely concluded without material modification by the person and these contracts are:

a. in the name of the person; or b. for the transfer of the ownership of or for the granting of the right to use property

owned by that enterprise or that the enterprise has the right to use; or c. for the provision of services by that person; or”;

Explanation: For removal of doubt, it is clarified that an independent agent acting in the ordinary course of business does not include a person acting exclusively or almost exclusively on behalf of the person to which the agent is an associate.

The act also approves addition of new clause (g) which is as under:

A fixed place of business that is used or maintained by a person if the person or an associate of a person carries on business at that place or at another place in Pakistan and:

i. that place or other place constitutes a permanent establishment of the person or an associate of the person under this sub-clause; or

ii. business carried on by the person or an associate of the person at the same place or at more than one place constitute complementary functions that are part of a cohesive business operation.

Explanation: For the removal of doubt, it is clarified that:

A. the term “cohesive business operation” includes an overall arrangement for the supply of goods, installation, construction, assembly, omission, guarantees or supervisory activities and all or principal activities are undertaken or performed either by the person or the associates of the person; and

B. supply of goods includes the goods imported in the name of the associate or any other person, whether or not the title to the goods passes outside Pakistan.

The above amendment is very important as offshore supplies made by head office abroad, or parent or associated undertaking of foreign company is now liable to tax as it would be treated as Permanent establishment in Pakistan. However, this provision does not apply where Pakistan has signed tax treaty with any country as Tax treaties overrides the local laws so in such case, provisions of relevant tax treaty will apply.




2. SUPER TAX FOR REHABILITIATION OF TEMPROROILY DISPLACED PERSONS

[SECTION 4B]

Earlier Super tax imposed on banking companies and other taxpayer having income of Rs. 500 million

or above is charged at the rate of 4% and 3% respectively for tax year 2016 and 2017 only. Various

organizations have demanded its abolition to reduce the effective tax rate. In order to encourage,

motivate and increase the affordability of Companies and to make them part of optimal economic

growth, super tax is to be continued for the financial year 2017-18 but the rate to be reduced by 1%

per year from financial year 2018-19 for both banking and non-banking companies. As a part of it, the

Finance act, 2018 amend the said levy to be further extended up till Tax Year 2020, further the act

reduced the rate of super tax by 1% for each successive Tax year.

3. TAX ON UNDISTRIBUTED PROFITS

[SECTION 5A]

Keeping in view the protection of interest of shareholders as well as future investment needs of the

Companies through retention of Corporate profit, the Finance Act 2018 seeks changes in “TAX ON

UNDISTRIBUTED PROFITS” for every public company (other than Schedule Bank or Modaraba) by

reducing the rate of tax from 7.5% to 5% of its accounting profit before tax for a tax year which derives

profit but does not distributes at least twenty percent of its after tax profits within six months

through cash. Before this proposal said percentage was forty percent. Moreover, act has also limit the

distribution of cash shares only and has excluded the distribution of bonus shares.

Further in Finance Act 2018 the tax applicable under this section is also excluded from the ambit of

final tax regime.

4. TAX ON CERTAIN PAYMENTS TO NON-RESIDENT

[SECTION 6]

The Finance Act 2018 impose tax on payment of “FEE FOR OFFSHORE DIGITAL SERVICES” to every

Non-Resident person.

Prior to this change, this section covers only payments of Royalty and Fee for Technical Services to

every non-resident.

Rate of tax on such fee for offshore digital services is @ 5 % of the gross amount by amending Division

IV Part I, First Schedule to the Ordinance.

5. GENERAL PROVISIONS RELATING TO TAXES IMPOSED UNDER SECTIONS 5, [5A, [5AA], 6, 7, 7A

[and 7B] [SECTION 8]

The Finance Act 2018 amend the section 8 by excluding the section 5A from the ambit of Final Tax

Regime. It means that the tax applicable on undistributed profits would cover under the Normal Tax

Regime.

6. CAPITAL GAINS

[SECTION 37]

The Finance Act 2018 amend section 37 (4A) (a), by which the said sub section would be read as

“Where the capital asset become the property of the person under a gift from a relative as defined in

sub section 5 of section 85, the FMV of the asset on the date of its transfer or acquisition by the person




shall be treated to be the cost of the asset”. So, there will be no gain or loss will arise from the transfer

of capital asset in case of gift from relative.

7. EXCLUSION OF BONUS SHARES FROM THE SCOPE OF “INCOME FROM OTHER SOURCES”

[SECTION 39]

Under the Finance Act 2018, income arising from issuance of bonus shares would be excluded from

Income from Other Sources.

8. EXEMPTIONS AND TAX CONCESSIONS IN THE SECOND SCHEDULE

[SECTION 53(2)]

Under section 53(2), Board (FBR) is empowered to make amendments in Second Schedule with the

approval of Federal Minister-in-charge who was pursuant to the approval of the Economic

Coordination Committee of Cabinet (ECCC).

Finance Act 2018 simplify the process by introducing the amendment that now Board is empowered

to make amendments in Second Schedule with the approval of Federal Government may only, instead

of Minister-in-charge.

9. CARRY FORWARD OF BUSINESS LOSSES

[SECTION 57(4) & (5)]

The Finance Act 2018 separate the business loss and depreciation loss. In this regard, previously

depreciation loss and other losses falling under this class (Initial allowance, first year allowance) was

allowed to be adjusted for unlimited time unless fully adjusted without any limit on the amount of

that adjustment from taxable income. But now Act has amended that the depreciation loss shall be

adjusted only up to 50% of that balance taxable income and remaining would be adjusted in

succeeding years in the same manner.

Example: 1

Taxable income of succeeding tax year Rs. 100 m

-Business loss of previous tax year (Rs. 20)

Balance Taxable income Rs. 80

Balance taxable income available for set off against depreciation loss: 50% (Rs. 40)

Remaining Taxable income chargeable to tax Rs. 40

Note for Depreciation

Accumulated Depreciation Loss Rs. 60

Portion of balance taxable income allowed to be adjusted

against current year income (Rs. 40)

Remaining loss to be carry forward for unlimited number of years Rs. 20




10. TAX CREDIT FOR INVESTMENT IN SHARES AND INSURANCE

[SECTION 62(2)]

The Finance Act 2018 calculate the amount of a person’s tax credit for investment in shares allowed

for a tax year in the following manner whereby changes shall be made to Component C of the formula:

(A/B) x C

Where:

A is the amount of tax assessed to the person for the tax year before allowance of any tax credit

B is the person’s taxable income for the tax year; and

C is the lesser of:

the total cost of acquiring the shares/sukuks, or the total contribution or premium paid

by the person in the year;

twenty per cent of the person’s taxable income for the year; or

TWO million rupees (Enhanced from 1.5 Million).

11. TAX CREDIT FOR INVESTMENT

[SECTION 65B]

Finance Act 2018 extend the availability of tax credit on investment in the purchase and installation

of Plant & Machinery for extension, expansion or balancing, modernization and replacement of the

plant and machinery already installed therein, from 30.06.2019 to 30.06.2021.

12. TAX CREDIT FOR NEWLY ESTABLISHED INDUSTRIAL UNDERTAKINGS

[SECTION 65D]

The Finance Act 2018 extend the availability of tax credit on “company incorporation and setting up

of new industrial undertaking from 30.06.2019 to 30.06.2021.

13. TAX CREDIT FOR INDUSTRIAL UNDERTAKINGS ESTABLISHED BEFORE THE FIRST DAY OF JULY,

2011

[SECTION 65E]

The Finance Act 2018 extend the availability of tax credit on investment with new equity raised

through issuance of new shares in the purchase and installation of plant and machinery for an

industrial undertaking for the purpose of expansion of the plant and machinery already installed

therein or for undertaking a new project, from 30.06.2019 to 30.06.2021.

14. NON-RECOGNITION RULES

[SECTION 79]

The Finance Act 2018 approves that disposal of assets in form of GIFT should be restricted only to

relatives (ancestor/ descendant of any of the grandparents, adopted child, spouse including spouse of

associate) in order to get fall in non-recognition rule. May it be added here that term relative is defined

in section 85(5) of the Ordinance as under:




(5) In this section, ―relative in relation to an individual, means —

(a) an ancestor, a descendant of any of the grandparents, or an adopted child, of the individual, or of a

spouse of the individual; or

(b) a spouse of the individual or of any person specified in clause (a).

15. TAX CREDIT FOR CERTAIN PERSONS

[SECTION 100C]

Through Finance Act 2018, any income which is derived from profit on debt from microfinance

banks and applied for religious or charitable purposes and is actually applied or finally set

apart for application thereof, shall be given 100 percent tax credit of tax payable. Before this

proposal, this credit was allowed to profit on debt from scheduled banks only.

16. OFFSHORE SUPPLIES MADE PART OF PAKISTAN SOURCE INCOME OF NON-RESIDENT PERSON

[SECTION 101]

Through finance Act 2018, Pakistani source business income of a non-resident person also includes: Import of goods, whether or not the title to the goods passes outside Pakistan, if the import is part of an overall arrangement for the supply of goods, installation, construction, assembly, commission, guarantees or supervisory activities and all or principal activities are undertaken or performed either by the associates of the person supplying the goods or its permanent establishment, whether or not the goods are imported in the name of the person, associate of the person or any other person.

Explanation: For the removal of doubt, it is clarified that where the income is subject to taxation under sections 5A, 5AA, 6, 7 and 7A, the income shall not be chargeable to tax under the head income from business.”

Through finance Act 2018, in line with introduction of definition of offshore digital services, income of non-resident from said services shall also be Pakistan source income if it is

a. paid by a resident person, except where the fee is payable in respect of services utilized in a

business carried on by the resident outside Pakistan through a permanent establishment; or b. borne by a permanent establishment in Pakistan of a non-resident person.

17. GAIN ON DISPOSAL OF ASSETS OUTSIDE PAKISTAN BY NON-RESIDENT COMPANY:

[SECTION 101A]

As a part of implementation of anti-abuse measures, Finance Act 2018 insert the following new

section into Income Tax Ordinance to ensure the taxation of offshore indirect transfers. (taxation of

gains arising on disposal of assets located in Pakistan and transferred to non-residents through sale

of shares indirectly). Said section read as under:

101A. Gain on disposal of assets outside Pakistan.

(1) Any gain from the disposal or alienation outside Pakistan of an asset located in Pakistan of a non-resident company shall be Pakistan-source




(2) The gain under sub-section (1) shall be chargeable to tax at the rate and in the manner as specified in sub-section (10). (3) Where the asset is any share or interest in a non-resident company, the asset shall be treated to be located in Pakistan, if:

(a) the share or interest derives, directly or indirectly, its value wholly or principally from the

assets located in Pakistan; and

(b) shares or interest representing ten per cent or more of the share capital of the non-resident company are disposed or alienated.

(4) The share or interest, as mentioned in sub-section (3), shall be treated to derive its value principally from the assets located in Pakistan, if on the last day of the tax year preceding the date of transfer of a share or an interest, the value of such assets exceeds one hundred million Rupees and represents at least fifty per cent of the value of all the assets owned by the non-resident company. (5) Notwithstanding the provisions of section 68, the value as mentioned in sub-section (4) shall be the fair market value, as may be prescribed, for the purpose of this section without reduction of liabilities. (6) Where the entire assets by the non-resident company are not located in Pakistan, the income of the non-resident company, from disposal or alienation outside Pakistan of a share of, or interest in, such non-resident company shall be treated to be located in Pakistan, to the extent it is reasonably attributable to assets located in Pakistan and determined as may be prescribed. (7) Where the asset of a non-resident company derives, directly or indirectly, its value wholly or principally from the assets located in Pakistan and the non-resident company holds, directly or indirectly, such assets through a resident company, such resident company shall, for the purposes of determination of gain and tax thereon under sub-section (8) or, as the case may be, sub-section (9), shall furnish to the Commissioner within sixty days of the transaction of disposal or alienation of the asset by the non-resident company, the prescribed information or documents, in a statement as may be prescribed: Provided that the Commissioner may, by notice in writing, require the resident company, to furnish information, documents and statement within a period of less than sixty days as specified in the notice. (8) The person acquiring the asset from the non-resident person shall deduct tax from the gross amount paid as consideration for the asset at the rate of ten percent of the fair market value of the asset and shall be paid to the Commissioner by way of credit to the Federal Government through remittance to the Government Treasury or deposit in an authorized branch of the State Bank of Pakistan or the National Bank of Pakistan, within fifteen days of the payment to the non-resident. (9) The resident company as referred to in sub-section (7) shall collect advance tax as computed in sub-section (10) from the non-resident company within thirty days of the transaction of disposal or alienation of the asset by such non-resident company: Provided that where the tax has been deducted and paid by the person acquiring the asset from the non-resident person under sub-section (8), the said tax shall be treated as tax collected and paid under




this sub-section and shall be allowed a tax credit for that tax in computing the tax under sub-section (10). (10) The tax to be collected under sub-section (9) shall be the higher of:

(a) 20% of A, where A = fair market value less cost of acquisition of the asset; or (b) 10% of the fair market value of the asset.

(11) Where tax has been paid under sub-section (8) or (9), no tax shall be payable by the non-resident company in respect of gain under sub-section (8) of section 22 or capital gains under section 37 or 37A. (12) Where any gain is taxable under this section and also under any other provision of this Ordinance, the said gain shall be taxable under other provision of the Ordinance.

18. TRANSACTIONS BETWEEN ASSOCIATES

[SECTION 108]

Prior to Finance Act 2018, clause (b) of sub-section (3) of section 108, the requirement for the tax

payer entering into transactions with associates was required to keep and maintain all country by

country reports, now the tax payer shall also furnish such reports to the board.

19. RECHARACTERIZATION OF INCOME AND DEDUCTIONS

[SECTION 109]

Section 109 of the Ordinance empower a Commissioner to recharacterize any transaction which is

undertaken as a part of tax avoidance scheme. For this purposes, Tax avoidance scheme was defined

as “any transaction where one of the main purposes of a person in entering into the transaction is the

avoidance or reduction of any person‘s liability to tax under this Ordinance”.

Through Finance Act 2018, Tax authorities are now empowered to re-characterize income arising from corporate structures that does not have an economic or commercial substance or was created as part of the tax avoidance scheme. Newly added sub section 109(1)(d) states that: (d) from tax year 2018 and onwards disregard an entity or a corporate structure that does not have an economic or commercial substance or was created as part of the tax avoidance scheme.

Moreover, a new sub section 3 is inserted which states that:

"(3) Reduction in a person's liability to tax as referred to in sub-section (2) means a reduction, avoidance or deferral of tax or increase in a refund of tax and includes a reduction, avoidance or deferral of tax that would have been payable under this Ordinance but are not payable due to a tax treaty for the avoidance of double taxation as referred to in section 107."

This addition of sub section 3, reveals that now Commissioner Inland revenue can recharacterize income of a person whereby said person is availing benefit of tax reduction, tax avoidance, deferral of tax or increase in a refund through using benefits of tax treaty.




It is a settled position in Pakistan that in case of any conflict between the provisions of an Agreement for avoidance of double taxation and prevention of fiscal evasion (referred as Double Tax Treaty) and the domestic tax law, then the provisions of the Treaty override the domestic law. Section 109 of the Ordinance provides conditions where the Commissioner can recharacterise transactions solely entered into for tax avoidance purposes. The amendment has been proposed in section 107 to the effect that recharacterisation will not be ineffective on account of treaty override provisions. This amendment effectively means that the substance of the transaction will form the basis of taxation and no rescue shall be available on the basis of a structure designed to avail treaty benefits. 20. CONTROLLED FOREIGN COMPANY-A NEW SECTION

[SECTION 109A]

By way of amendment through Finance Act 2018, following new section is inserted:

109A. Controlled foreign company:

(1) There shall be included in the taxable income of a resident person for a tax year an income attributable to controlled foreign company as defined in sub-section (2). (2) For the purpose of this section, controlled foreign company means a non-resident company, if:

(a) more than fifty percent of the capital or voting rights of the non-resident company

are held, directly or indirectly, by one or more persons resident in Pakistan or more than forty percent of the capital or voting rights of the nonresident company are held, directly or indirectly, by a single resident person in Pakistan;

(b) tax paid, after taking into account any foreign tax credits available to the non-

resident company, on the income derived or accrued, during a foreign tax year, by the non-resident company to any tax authority outside Pakistan is less than sixty percent of the tax payable on the said income under this Ordinance;

(c) the non-resident company does not derive active business income as defined

under subsection (3); and (d) the shares of the company are not traded on any stock exchange recognized by

law of the country or jurisdiction of which the non-resident company is resident for tax purposes. (3) A company shall be treated to have derived active income if:

(a) more than eighty percent of income of the company does not include income from

dividend, interest, property, capital gains, royalty, annuity payment, supply of goods or services to an associate, sale or licensing of intangibles and management, holding or investment in securities and financial assets; and (b) principally derives income under the head “income from business” in the country or jurisdiction of which it is a resident.

(4) Income of a controlled foreign company is an amount equal to the taxable income

of that company determined in accordance with the provisions of this Ordinance




as if that controlled foreign company is a resident taxpayer and shall be taxed at the rate specified in Division III of Part I of the First Schedule.

(5) The amount of attributable income under sub-section (1) for a tax year shall be

computed according to the following formula, namely:

A x (B/100) Where -

A. is the amount of income of a controlled foreign company under sub-section (2); and

B. is the percentage of capital or voting rights, whichever is higher, held by the person, directly or indirectly, in the controlled foreign company.

(6) The amount of attributable income shall be treated as zero, if the capital or voting rights of the resident person is less than ten percent.

(7) Income of a controlled foreign company shall be treated as zero, if it is less than ten

million Rupees. (8) The income of a controlled foreign company in respect of a foreign tax year, as

defined in sub-section (9), shall be determined in the currency of that controlled foreign company and shall, for purposes of determining the amount to be included in the income of any resident person during any tax year under the provisions of this section, be converted into Rupees at the State Bank of Pakistan rate applying between that foreign currency and the Rupee on the last day of the tax year.

(9) Foreign tax year, in relation to a non-resident company, means any year or period

of reporting for income tax purposes by that non-resident company in the country or jurisdiction of residence or, if that company is not subject to income tax, any annual period of financial reporting by that company.

(10) The income attributable to controlled foreign company under sub-section (1) and

taxed in Pakistan under this section shall not be taxed again when the same income is received in Pakistan by the resident taxpayer.

(11) Where tax has been paid by the resident person on the income attributable to

controlled foreign company and in a subsequent tax year the resident person receives dividend distributed by the controlled foreign company, after deduction of tax on dividend, the resident person shall be allowed a tax credit equal to the lesser of:

(i) Foreign tax paid, as defined in sub-section (8) of section 103, on dividends; and (ii) Pakistan tax payable, as defined in section 103, for the tax year in which the

dividend is received by the resident taxpayer.

21. UNEXPLAINED INCOME OR ASSETS

[SECTION 111]

Through finance Act 2018, following amendments are made, with regard to amount;

credited in a person’s books of accounts or




person has made any investment or is the owner of any money or valuable article or a person has incurred any expenditure or any person has concealed income or furnished inaccurate particulars of income

and person is unable to explain the resource or explanation given is not reasonable, these amounts shall be included in his income. In this regard Act approved that;

The amounts referred above shall be included in the person’s income chargeable to tax: i. in the tax year to which such amount relates if the amount representing investment, money,

valuable article or expenditure is situated or incurred in Pakistan or concealed income is Pakistan-source; and

ii. in the tax year immediately preceding the tax year in which the investment, money, valuable article or expenditure is discovered by the Commissioner and is situated or incurred outside Pakistan and concealed income is foreign-source.

Further explanation paragraph is inserted hereafter: For the removal of doubt, it is clarified that where the investment, money, valuable article or expenditure is acquired or incurred outside Pakistan in a prior tax year and is liable to be included in the income of tax year 2018 and onwards on the basis of discovery made by the Commissioner during tax year 2019 and onwards and the person explains the acquisition of such asset or expenditure from sources relating to tax year in which such asset was acquired or expenditure was incurred, such explanation shall not be rejected on the basis that the source does not relate to the tax year in which the amount chargeable to tax is to be included. Foreign remittances though normal banking channel: It is stated in salient features published with finance act, 2018 that Prior to the promulgation of the Income Tax (Amendment) Ordinance, 2008 a person was not required to explain the nature as well as the source of any amount of foreign exchange which is remitted from outside Pakistan through normal banking channels and subsequently encashed into Pakistani Rupees by any scheduled bank. In order to discourage whitening of untaxed money and legitimizing tax evaded incomes through this conduit, amendment has been made in section 111(4) of the Ordinance whereby persons would be required to explain the source of investment if the amount of foreign remittances in a year exceeds Rs.10 million received after July 01, 2018

22. RETURN OF INCOME

[SECTION 114]

A resident person being an individual required to file foreign income and assets statement under

section 116A is also liable to file income tax return.”

A return of income shall be accompanied with a foreign income and assets statement as required under section 116A.”

23. FOREIGN INCOME AND ASSETS STATEMENT

[SECTION 116A]

Through finance Act 2018, following new section is inserted:

Statement of Foreign income and assets. –




Under the said section, every resident taxpayer being an individual having foreign income of not less than ten thousand United States dollars or having foreign assets with a value of not less than one hundred thousand United States dollars shall furnish a statement of foreign income and assets containing:

a. the person’s total foreign assets and liabilities as on the last day of the tax year;

b. any foreign assets transferred by the person to any other person during the tax year and the consideration for the said transfer; and

c. complete particulars of foreign income, the expenditure derived during the tax year and the expenditure wholly and necessarily for the purposes of deriving the said income.

In addition to above requirement of filling, The Commissioner has been given power to require a tax payer by notice to file statement of foreign income and assets

24. METHOD OF FURNISHING RETURNS AND OTHER DOCUMENTS.

[SECTION 118]

Foreign source income and assets statement filing is made compulsory where salary income for the

tax year is five hundred thousand rupees or more, the taxpayer shall file return of income

electronically in the prescribed form and it shall be accompanied by the proof of deduction or

payment of tax and wealth statement as required under section 116 or a foreign income and assets

statement under 116A, if applicable.]

25. BEST JUDGEMENT ASSESSMENTS

[SECTION 121 (3)]

Best judgment assessment under section 121 can be made within two years from the end of the tax year in which notice to file return of income has been issued to a person for one or more of the last ten completed tax years. Earlier time limitation for best judgment assessment was five years.

26. APPEAL TO THE APPELLATE TRIBUNAL [SECTION 131 (5)]

Where recovery of tax has been stayed under this section, such stay order shall cease to have effect on expiration of the said period of one hundred and eighty days following the date on which the stay order was made and the Commissioner shall proceed to recover the said tax.

27. ALTERNATIVE DISPUTE RESOLUTION [SECTION 134 A]

For section 134A, the following shall be substituted, namely: “134A. Alternative Dispute Resolution. (1) Notwithstanding any other provision of this Ordinance, or the rules made thereunder, an

aggrieved person in connection with any dispute pertaining to: a) the liability of tax against the aggrieved person, or admissibility of refunds, as the case

may be;




b) the extent of waiver of default surcharge and penalty; or c) any other specific relief required to resolve the dispute, may apply to the Board for the

appointment of a committee for the resolution of any hardship or dispute mentioned in detail in the application, which is under litigation in any court of law or an Appellate Authority, except where criminal proceedings have been initiated or where interpretation of question of law is involved having effect on other cases.

(2) The Board may, after examination of the application of an aggrieved person, appoint a committee, within sixty days of receipt of such application in the Board, comprising:

(i) an officer of Inland Revenue not below the rank of a Commissioner; (ii) person to be nominated by the taxpayer from a panel notified by the Board comprising:

a. senior chartered accountants and senior advocates having experience in the field of taxation; and

b. reputable businessmen as nominated by Chambers of Commerce and Industry: Provided that the taxpayer shall not nominate a Chartered Accountant or an advocate if the said Chartered Accountant or the advocate is or has been an auditor or an authorized representative of the taxpayer; and

(iii) a retired Judge not below the rank of District and Sessions Judge, to be nominated through consensus by the members appointed under (i) and (ii) above.

(3) The aggrieved person, or the Commissioner, or both, as the case may be, shall withdraw

the appeal pending before any court of law or an Appellate Authority, after constitution of the committee by the Board under sub-section (2).

(4) The committee shall not commence the proceedings under sub-section (5) unless the

order of withdrawal by the court of law or the Appellate Authority is communicated to the Board:

Provided that if the order of withdrawal is not communicated within seventy five days of the appointment of the committee, the said committee shall be dissolved and provisions of this section shall not apply.

(5) The Committee appointed under sub-section (2) shall examine the issue and may, if it deems necessary, conduct inquiry, seek expert opinion, direct any officer of the Inland Revenue or any other person to conduct an audit and shall decide the dispute by majority, within one hundred and twenty days of its appointment:

Provided that in computing the aforesaid period of one hundred and twenty days, the period, if any, for communicating the order of withdrawal under sub-section (4) shall be excluded.

(6) The recovery of tax payable by a taxpayer in connection with any dispute for which a Committee has been appointed under sub-section (2) shall be deemed to have been stayed on withdrawal of appeal up to the date of decision by the Committee.

(7) The decision of the committee under sub-section (5) shall be binding on the

Commissioner and the aggrieved person. (8) If the Committee fails to decide within the period of one hundred and twenty days under

sub-section (5), the Board shall dissolve the committee by an order in writing and the matter shall be decided by the court of law or the Appellate Authority which issued the order of withdrawal under sub-section (4) and the appeal shall be treated to be pending




before such court of law or the Appellate Authority as if the appeal had never been withdrawn.

(9) The Board shall communicate the order of dissolution to the court of law or the Appellate

Authority and the Commissioner. (10) The aggrieved person, on receipt of the order of dissolution, shall communicate it to the

court of law or the Appellate Authority, which shall decide the appeal within six months of the communication of said order.

(11) The aggrieved person may make the payment of income tax and other taxes as decided

by the committee under sub-section (5) and all decisions, orders and judgments made or passed shall stand modified to that extent.

(12) The Board may prescribe the amount to be paid as remuneration for the services of the

members of the Committee, other than the member appointed under clause (i) of sub-section (2).

(13) The Board may, by notification in the official Gazette, make rules for carrying out the purposes of this section.

28. RECOVERY OF TAX FROM PERSONS HOLDING MONEY ON BEHALF OF A TAXPAYER [SECTION 140 (1)]

Commissioner shall not issue notice of recovery under section 140 to the taxpayer where the appeal has been filed by taxpayer and Commissioner (Appeals) has not decided the case and the taxpayer has paid ten percent (10%) of the amount of tax due. Earlier taxpayer was required to pay twenty five percent (25%) of the amount of tax due.

29. ADVANCE TAX PAID BY THE TAXPAYER [SECTION 147]

I. Finance Act 2018 add a new proviso in sub-section (4) to calculate the component A of the formula which narrates as:

“A is the taxpayer‘s turnover for the quarter”. The new proviso states as “Where the taxpayer fails to provide turnover or the turnover for the quarter is not known, it shall be taken to be one-fourth of one hundred and ten percent of the turnover of the latest tax year (1/4th of 110% of the turnover) for which a return has been filed;"

II. The Act clarified that taxpayers who are required to pay advance tax on the basis of estimation of 50% of tax due in the second quarter and remaining 50% equally in next 2 quarters would also include the Banking Company.

III. The Act has further clarified that payment of advance tax at reduced rate at any time before the last installment is due on the basis of estimation duly approved by the commissioner do not applicable on banking companies.

IV. Finance Act further adds a proviso to sub-section (6) which narrates as;




“An estimate of the amount of tax payable shall contain turnover for the completed quarters of the relevant tax year, estimated turnover of the remaining quarters along with reasons for any decline in estimated turnover, documentary evidence of estimated expenses or deductions which may result in lower payment of advance tax and the computation of the estimated taxable income of the relevant tax year:

Provided further that the Commissioner is not satisfied with the documentary evidence provided or where an estimate of the amount of tax payable is not accompanied by details mentioned in the first proviso, the Commissioner may reject the estimate after providing an opportunity of being heard to the taxpayer and the taxpayer shall pay advance tax according to the formula contained in sub-section (4)."

30. IMPORTS [SECTION 148]

Finance Act 2018 has amended subsection 108(8) of the Ordinance whereby Commercial importers of goods where goods are sold in the same condition as they were when imported. Thus commercial importers are now liable to minimum income tax and this subsection further states that the minimum tax payable under this clause shall be five percent of the import value as increased by customs duty, sales tax and federal excise duty. For Example: Tax collection rate at the time of import is @ 5.5% from a corporate commercial importer (8% for non-filer), in such case, the importer shall calculate and pay its normal tax liability or minimum tax @ 5% of import value; whichever is higher. Moreover, the reduced rate of 1% (1.5% for non-filer), for designated buyer of LNG to import LNG, on behalf of government, has been made available to every person importing LNG.

31. PAYMENTS TO NON-RESIDENTS [SECTION 152]

I. Every banking company or a financial institution remitting outside Pakistan an amount of fee for offshore digital services, chargeable to tax under section 6, to a non-resident person on behalf of any resident or a permanent establishment of a non-resident in Pakistan shall deduct tax from the gross amount paid at the rate of 5%”

II. Further, tax deducted by prescribed persons from payments made to permanent establishment in Pakistan of a non-resident for the rendering of or providing of services would minimum Tax. In this regard, if services are rendered in respect of freight forwarding services, air cargo services, courier services, manpower outsourcing services, hotel services, security guard services, software development services, IT services and IT enabled services as defined in clause (133) of Part I of this Schedule, tracking services, advertising services (other than by print or electronic media), share registrar services, engineering services, car rental services, building maintenance services, services rendered by Pakistan Stock Exchange Limited and Pakistan Mercantile Exchange Limited, “inspection, certification, testing and training services then all provision of Income Tax ordinance, 2001 regarding these sector would mutatis mutandis apply.

III. The Finance Act 2018 has also approved if any person making payment to non-resident without deducting tax should furnish to commissioner a notice in writing, however, ITO has specific some instances by which person is not required to file the said notice. One of them is substituted by proposing that:




If the person is making payment on account of an import of goods where title to the goods passes outside Pakistan and is supported by import documents, except where:

i. the supply is made in connection with the overall arrangement for the supply of goods,

installation, construction, assembly, commission, guarantees or supervisory activities and all or principal activities are undertaken or performed either by the associates of the person supplying the goods or its permanent establishment, whether or not the title passes outside Pakistan and whether or not the goods are imported in the name of the associate or any other person; or

ii. the supply is made by a resident person or a Pakistan permanent establishment of a

nonresident person in connection with the overall arrangement as referred above.

32. PAYMENTS FOR GOODS, SERVICES AND CONTRACTS [SECTION 153]

Under the existing law, Income tax is required to be deducted on payment for services rendered exceeding Rs. 10,000 and on sale of goods exceeding Rs. 25, 000 under above stated section. Considering inflation over the years, the threshold for tax deduction is enhanced to Rs. 30, 000 on payment for services rendered and to Rs. 75, 000 on payment for sale of goods.

Moreover, Act has also approved that Individuals and AOP’s having turnover of Rs. 50 Million or above in a Tax Year are obliged to act as withholding agents whilst making payments for goods, services and contracts under section 153 of the Income Tax Ordinance, 2001. Builders and Developers have now specifically been included in the ambit of withholding tax agents for the purpose of section 153 of the Ordinance regardless of the quantum of their turnover.

Individuals and AOP’s become liable to act as withholding agents under section153 of the Income Tax Ordinance, 2001 if their annual turnover exceeds Rs. 50 Million per annum. Such persons are not prepared to discharge their obligations as a withholding tax agent immediately upon crossing the 50 Million thresholds for turnover during the currency of a tax year. In order to provide relief, persons crossing the threshold of turnover of Rs. 50 Million during a Tax Year shall be obliged to discharge their obligations as a withholding tax agent in the succeeding tax year

33. FURNISHING OF INFORMATION BY BANKS

[SECTION 165A]

Finance Act 2018 amended that banking company should provide to the board a list of persons

containing particulars of cash withdrawals exceeding fifty thousand Rupees in a day and tax

deductions thereon for filers and non-filers, aggregating to Rupees one million or more during each

preceding calendar month, earlier there was no such condition.

The Act has also approved to provide the list of persons who have made bank deposits aggregating

Rupees ten million or more during the preceding calendar month, previously said amount was one

million.

In the same way, Limit on list of payments made through bills raised against credit card bills is

increased from one hundred thousand rupees to two hundred thousand rupees.




34. CREDIT FOR TAX COLLECTED OR DEDUCTED

[SECTION 168]

For the purpose of taxation of Joint Venture or AOP, section 92 of the Income Tax Ordinance states that in case of joint venture of companies, income of the company from AOP will be taxed in the hand of each member company. However, there is no relevant provisions of withholding of taxes exist which are in line with section 92 of Supra. Now the Act has approved that Where a company is a member of an association of persons which is taxed in accordance with section 92 and an amount of tax has been collected or deducted from an association of persons, the company shall be allowed a tax credit, in respect of tax collected or deducted from the association of persons, according to the following formula, namely:

(A/B) x C Where:

A. is the amount of share of profits before tax received by the company as a member from the association of persons;

B. is the taxable income of the association of persons; and C. is the amount of tax withheld in the name of the association of persons.

In this regard, the Finance Act 2018 has further clarified that no tax credit shall be allowed for any tax collected or deducted from an association of persons in respect of an amount for which credit has been allowed as above to a company being a member of the association

35. AUDIT

[SECTION 177]

Prior to Finance Act 2018, the Board was eligible to appoint a special audit panel which is comprise

of two or more members which could be an officer of Inland Revenue, firm of chartered accountants

and firm of cost and management accountants for the purpose of audit u/s 177. Board may also

appoint a foreign expert or specialist along with above mentioned persons to conduct an audit

including a forensic audit.

The Finance Act 2018 has added the following new clause;

A tax audit expert deployed under an audit assistance programme of an international tax organization

or a tax authority outside Pakistan. Provided that in case the member is not an officer of Inland

Revenue, the person shall only be included as a member in the special audit panel if an agreement of

confidentiality has been entered into between the Board and the person, international tax

organization or a tax authority, as the case may be.”

36. PENALTIES

[SECTION 182]

The Finance Act 2018 amended sub section (1) serial no. 1A and added new serial no. 1AAA after

serial no. 1AA and entries relating thereto in columns (2), (3) and (4), are:




1A. Where any person fails to furnish a statement as required under section 115, 165, or 165A 2, 165A or 165B within the due date.] Such

Such person shall pay a penalty of five thousand Rupees if the person had already paid the tax collected or withheld by him within the due date for payment and the statement is filed within ninety days from the due date for filing the statement and, in all other cases, a penalty of Rs. 2500 for each day of default from the due date subject to a minimum penalty of Rs. 10,000.” shall be substituted.

165

1AAA. Where any person fails to furnish a foreign assets and income statement within the due date.

Such persons shall pay a penalty of 2 percent of the foreign income or value of the foreign assets for each year of default

116A.

37. RETURN NOT FILED WITHIN DUE DATE

[SECTION 182A]

The Finance Act, 2018 added a new section i.e. Section 182A whereby a person fails to file a return of income under section 114 by the due date or by the date as extended by the Board or extended by the Commissioner such person shall not be entitled to be included in the active taxpayers' list for the year for which return was not filed within the due date.

“Explanation. For the removal of doubt, it is clarified that the provisions of this section shall apply from tax year 2018 and onwards for which the first Active Taxpayers List is to be issued on first day of March, 2019 under Income Tax Rules, 2002.”

The act further explains that section 182A shall apply from tax year 2018 and onwards for which the first Active Taxpayers List is to be issued on first day of March, 2019. It means that any person who has filed return for tax year 2017 but not filed or late filed return for tax year 2018 will remain in active tax payers list until February 28th, 2019.

Further, such delinquent taxpayer would not be allowed to carry forward any loss for that tax year. This Act also seeks to establish a new directorate by introducing concept of Directorate General of Broadening of Tax Base.

38. AUTOMATIC SELECTION OF CASES OF AUDIT DUE TO DELAY IN FILING OF TAX RETURNS –

PROVISION WITHDRAWN

[SECTION 216]

Apropos to newly inserted provision of section 182A of the Ordinance, Finance Act has deleted

section 214D, whereby, cases of late filers were automatically selected for audit owing to audit

incapacity of FBR.




39. DISCLOSURE OF INFORMATION BY A PUBLIC SERVANT

[SECTION 216]

The Finance Act 2018 added that public servant could make disclosure of any such particulars to

National Database and Registration Authority for the purpose of broadening of the tax base. Further,

nothing shall prevent Board from publishing with the prior approval of the Government (Earlier it

was Federal Minister in charge) any such particulars as are referred to in that sub section.

40. SERVICE OF NOTICES AND OTHER DOCUMENTS

[SECTION 218]

A notice shall be treated to have been served on the taxpayer if it is served on the individual

electronically in the prescribed manner.

41. BAR OF SUITS IN CIVIL COURTS

[SECTION 227]

No suit or other legal proceedings shall be brought in any Civil Court against any order made or any

notice issued and no prosecution, suit or other proceedings shall be made against any person for

anything which is in good faith done or intended to be done under the Ordinance or any rules or orders

made or any notices issued thereunder.

Explanation: For the removal of doubt, it is clarified that Civil Court includes any court exercising

power of the civil court.”

42. RESTRICTION ON PURCHASE OF CERTAIN ASSETS

[SECTION 227C]

After section 227B, the above mentioned new section is inserted which states that:

i. Any application for booking, registration or purchase of a new locally manufactured motor

vehicle or for first registration of an imported vehicle shall not be accepted or processed

by any vehicle registering authority of Excise and Taxation Department or a manufacturer

of a motor vehicle respectively, unless the person is a filer.

ii. Any application or request by a person to any authority responsible for registering,

recording or attesting transfer of any immovable property, exceeding five million

rupees, for registering or attesting the transfer shall not be accepted or processed by such

authority, unless the person is a filer.

43. DIRECTORATE GENERAL OF IMMOVABLE PROPERTY

[SECTION 230F]

After section 230E new section shall be inserted with following explanation; -

i. The Directorate-General of Immovable Property, (hereinafter referred to as Directorate-

General in this section, shall consist of a Director General and as many Directors, Additional

Directors, Deputy Directors and Assistant Directors and such other officers as the Board may,

by notification in the official Gazette, appoint.




ii. The Directorate-General may, subject to the provisions and conditions as may be prescribed,

initiate proceedings for the acquisition of property for the reasons and purposes specified in

Sub-section (4).

iii. The proceedings under sub-section (3) shall be initiated, where the Directorate-General, on

the basis of valuation made by it, has reason to believe that any immovable property of a fair

market value has been transferred by a person, hereinafter referred to as the transferor, to

another person, hereinafter referred to as the transferee, for a consideration which is less

than the fair market value of the immovable property and that the consideration for such

transfer as agreed to between the transferor and transferee has been understated in the

instrument of transfer for the purposes of ─

(a) The avoidance or reduction of withholding tax obligations under this Ordinance;

(b) Concealment of unexplained amount referred to in sub-section (1) of section 111

representing investment in immovable property; or

(c) Avoidance or reduction of capital gains tax under section 37.

44. COLLECTION OF TAX BY A STOCK EXCHANGE REGISTERED IN PAKISTAN

[SECTION 233A]

The Finance Act 2018 amend that advance tax collected by a stock exchange registered in Pakistan

from the persons mentioned in the above stated section shall be adjustable tax. Previously said tax

falls under Final tax regime.

45. COLLECTION OF ADNAVCE TAX BY EDUCATIONAL INSTITUTIONS

[SECTION 236I]

The Finance Act 2018 made amendment in sub section (3) of section 236I which will be read as under

now;

(3) Advance tax under this section shall not be collected from a person on an amount which is paid by

way of scholarship or where annual fee does not exceed two hundred thousand rupees.

46. TAX ON SALE OF CERTAIN PETROLEUM PRODUCTS

[SECTION 236HA]

The Finance Act 2018 added this after section 236H, explaining the following:

i. Every person selling petroleum products to a petrol pump operator or distributer, where such

operator or distributer is not allowed a commission or discount, shall collect advance tax on

ex-depot sale price of such products. The rate of collection of tax under section 236HA shall be

0.5% of ex-depot sale price for filers and 1% for non-filers.

ii. The tax deductible under sub-section (1) shall be a final tax on the income arising from the sale

of petroleum products to which sub-section (1) applies.




47. ADVANCE TAX ON PURCHASE OR TRANSFER OF IMMOVAVLE PROPERTY

[SECTION 236K]

The Finance Act 2018 has prescribed to recover the tax on purchase of immovable property from all of

the person who are purchasing the plots on lump sum or on installment. Previously there was a

confusion, whether tax would be deducted from the persons who are purchasing the plots on

installment or not. Now the Finance Act 2018 has clarified the matter by stating that the persons

responsible for collecting payments in installments for purchase or allotment of any immovable

property where the transfer is to be affected after making payment of all installments, shall at the time

of collecting installments collect from the allotee or transferee advance tax at the existing rate.

48. BONUS SHARES ISSUED BY COMPANIES QUOTED ON STOCK EXCHANGE

[SECTION 236M]

The Finance Act 2018 omit this section whereby withholding tax has been withdrawn on bonus shares

issued to the shareholders by every Company quoted on stock exchange.

49. BONUS SHARES ISSUED BY COMPANIES NOT QUOTED ON STOCK EXCHANGE

[SECTION 236N]

The Finance Act 2018 omit this section whereby withholding tax has been withdrawn on bonus shares

issued to the shareholders by every Company quoted on stock exchange.

50. ADVANCE TAX ON PERSONS REMITTING AMOUNTS ABROAD THROUGH CREDIT CARD OR

DEBIT CARD OR PREPAID CARD

[SECTION 236Y]

Finance Act 2018 has added this section. Now every banking company shall collect advance tax, at the

time of transfer of any sum remitted outside Pakistan, on behalf of any person who has completed a

credit card transaction, a debit card transaction, or a prepaid card transaction with a person outside

Pakistan. The rate of tax to be deducted under section 236Y shall be 1% of the gross amount remitted

abroad for filers and 3% for non-filers. The advance tax collected under this section shall be

adjustable.

51. VALIDATION

[SECTION 241]

The Finance Act 2018 classify the existing provision of this section as subsection (1) and to add new

subsection i.e. subsection (2), explanation of newly added subsection is as follows;

Notwithstanding any omission, irregularity or deficiency in the establishment, or conferment of

powers and functions, of the Directorate-General (Intelligence and Investigation), Inland Revenue

and authorities specified in section 230, all orders passed, notices issued and actions taken in

exercise or purported exercise of the powers and functions of the Commissioner under this

Ordinance by the Directorate-General (Intelligence and Investigation), Inland Revenue or the

authorities specified in section 230 shall be deemed to have been validly passed, issued and taken

under this Ordinance.




1. RATES OF TAX [FIRST SCHEDULE]

RATE OF TAX FOR SALARIED INDIVIDUALS, BUSINESS INDIVIDUALS AND AOPS

The rate of tax for every Individual (Salaried and business) prescribed in the Division I of part I of the

first schedule; as under:

Taxable Income Rate of Tax

Where the taxable income does not exceed Rs. 400,000 0%

Where the taxable income exceeds Rs. 400,000 but does not exceed Rs. 800,000

Rs. 1,000

Where the taxable income exceeds Rs. 800,000 but does not exceed Rs. 1,200,000

Rs. 2,000

Where the taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,400,000

5% of the amount exceeding

Rs.12,00,000

Where the taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 4,800,000

Rs. 60,000 + 10% of the amount exceeding

Rs.24,00,000

Where the taxable income exceeds Rs. 4,800,000 Rs. 300,000 + 15% of the amount exceeding

Rs.48,00,000

Provided that where the taxable income exceeds eight hundred thousand rupees the minimum tax payable

shall be two thousand rupees.

Rates of tax imposed on the taxable income of every AOP shall be set out in the following table:

Taxable Income Rate of Tax Where the taxable income does not exceed Rs. 400,000 0% Where the taxable income exceeds Rs. 400,000 but does not exceed Rs.1,200,000

5% of the amount exceeding Rs. 400,000

Where the taxable income exceeds Rs. 1,200,000 but does not exceed Rs.2,400,000


Rs.1,200,000 Where the taxable income exceeds Rs. 2,400,000 but does not exceed Rs.3,600,000






Rs.4,800,000 Where the taxable income exceeds Rs. 6,000,000 Rs. 880,000 + 30% of

the amount exceeding Rs. 6,000,000




CORPORATE TAX

The rate of tax for companies for the tax year 2019 is reduced as under:

Corporate Tax TY 2018 TY 2019 TY 2020 TY 2021 TY 2022 TY 2023

and ondward

Tax rate 30% 29% 28% 27% 26% 25%

*In the Act, rate of corporate tax would decrease by 1% per year up to Tax year 2023 and after that tax

rate of 25% would prevail constantly.

The rate of tax for small companies for the tax year 2019 is reduced as under:

Corporate Tax TY 2018 TY 2019 TY 2020 TY 2021 TY 2022 TY 2023

and ondward

Tax rate 25% 24% 23% 22% 21% 20%

RATE OF SUPER TAX

The rate of Super tax is decreased as prescribed in the Division IIA of Part I of First Schedule as under:

PERSON Tax Year 2018 Tax Year 2019 Tax Year 2020 Tax Year 2021

Banking Company 0 % 4 % 3% 2%

Person other than a banking company, having income equal to or exceeding Rs. 500 million

3 % 2% 1% 0%

Provided that in case of a banking company, super tax for tax year 2019 shall be payable, on estimate

basis, by thirtieth day of June, 2018.

RATE OF TAX ON OFFSHORE DIGITAL SERVICES

The rate of tax for Offshore Digital Services for the tax year 2019 shall be 5% as prescribed in the Division

IV of Part I of First Schedule.

RATE OF TAX ON IMPORTING COAL/LNG

The rate of tax for importing Coal for the tax year 2019 prescribed in the Table 1 of Part II of First Schedule

as under.

IMPORT UNDER SEC 148 FILER NON-FILER Persons importing coal 4% 6%

The expression “Designated buyer of LNG on behalf of Government of Pakistan, to import LNG” against S.

No. 1, in column 2, for entry no. (vii) is replaced by “Persons importing LNG”.




RATE OF TAX ON DIVIDEND

The rate of tax and withholding on dividend is decreased as prescribed in the Division I of Part III of First

Schedule as under:

25% withholding tax rate on Filer Company is reduced to 15% on dividend received from money market

fund, income fund or REIT Scheme or any other fund.

The rate of tax on dividend received by a company from a collective investment scheme, REIT Scheme or

a mutual fund, other than a stock fund, shall be taxed at the rate of 15% for tax year 2015 and onwards

instead of 25%.

Provided also that if a Developmental REIT Scheme with the object of development and construction of

residential buildings is set up by thirtieth day of June, 2020, tax imposed on dividend received by a person

from such Developmental REIT Scheme shall be reduced by fifty percent for three years from the date of

setting up of the said scheme.

Fourth proviso is extended as “the rate of tax on dividend received by an individual, from a Rental REIT

Scheme shall be 7.5%.

PAYMENTS FOR GOODS AND CONTRACTUAL SERVICES

The rate of tax and withholding on sale of goods and contractual services for non-filer is increased as

prescribed in the Division III of Part III of First Schedule as under:

NON-FILER PERSON TY 2018 TY 2019 Company sale of goods 7 % 8% Other than company sale of goods 7.75 % 9% Company under contractual services 12 % 14% Other than company under contractual services 12.5 % 15%

RATE OF TAX ON GATHERING AND FUNCTIONS

The rate of tax for gathering and function for the tax year 2019 prescribed in the Division XI of Part IV of

First Schedule as under:

RATE CITIES 5% of the bill ad valorem or Rs. 20,000 per function, whichever is higher

For Islamabad, Lahore, Multan, Faisalabad, Rawalpindi, Gujranwala, Bahawalpur, Sargodha, Sahiwal, Shekhurpura, Dera Ghazi Khan, Karachi, Hyderabad, Sukkur, Thatta, Larkana, Mirpur Khas, Nawabshah, Peshawar, Mardan, Abbottabad, Kohat, Dera Ismail Khan, Quetta, Sibi, Loralai, Khuzdar, Dera Murad Jamali and Turbat.

5% of the bill ad valorem or Rs. 10,000 per function, whichever is higher

For cities other than those mentioned above”;

ADVANCE TAX ON SALE OF CERTAIN PETROLIUM PRODUCTS

The rate of collection of tax for sale of certain petroleum products under section 236HA is 0.5% for fillers

and 1% for non-filer of ex-depot sale price as prescribed in Division XVA of Part IV of First Schedule.




RATE OF TAX ON BANKING TRANSACTION

The rate of tax on banking transaction for non-filer shall be 0.4% (previously it was 0.6%) as prescribed

in the Division XXI of Part IV of First Schedule.

TAX ON AMOUNT REMITTED ABROAD THROUGH CREDIT, DEBIT OR PREPAID CARDS

The rate of tax under section 236Y for gross amount remitted abroad is 1% for filer and 3% for non-filer

as prescribed in Division XXVII of Part IV of First Schedule.

2. EXEMPTIONS FROM TOTAL INCOME

[SECOND SCHEDULE PART I]

The Finance Act 2018 approves the following amendments second schedule of ITO.

EXEMPTION ON SPECIFIED ALLOWANCES

Clause (39A)

Where any amount paid as kit allowance, ration allowance, special messing allowance, SSG allowance,

Northern Areas compensatory allowance, special pay for Northern Areas and height allowance to the

Armed Forces personnel shall be exempt from tax.

INCOME FROM FUNDS

Clause (57)

The Finance Act 2018 exempt the income of the following funds:

Khyber Pakhtunkhwa Retirement Benefits and Death Compensation Fund.

Khyber Pakhtunkhwa General Provident Investment Fund. (xvii) Khyber Pakhtunkhwa Pension

Fund.

PAYMENT OF DONATION

[CLAUSE 61]

Through Finance Act 2018, payment of donation to the following institute would be exempt from total

income;

(xlvi) Pakistan Sweet Home, Angels and Fairies Place.

(xlvii) Al-Shifa Trust Eye Hospital.

(xlviii) Aziz Tabba Foundation.

(xlix) Sindh Institute of Urology and Transplantation, SIUT Trust and Society for the Welfare of SIUT.

(l) Sharif Trust.

(li) The Kidney Centre Post Graduate Institute.

(lii) Pakistan Disabled Foundation

(lii) Sardar Trust Eye Hospital, Lahore.




EXEMPTION FROM INCOME TAX

Clause (66)

Income of following organization/institution are exempted from income tax.

(xlii) SAARC Energy Centre.

Third Pakistan International Sukuk Company Limited”

(xliii) Pakistan Bar Council.

(xliv) Pakistan Centre for Philanthropy.

(xlv) Pakistan Mortgage Refinance Company Limited

(xlvi) Aziz Tabba Foundation.

(l) Al-Shifa Trust Eye Hospital

(li) Saylani Welfare International Trust.

(lii) Shaukat Khanum Memorial Trust.

(liii) Layton Rahmatullah Benevolent Trust

(liv) The Kidney Centre Post Graduate Training Institute

(lv) Pakistan Disabled Foundation.

(lvi) Forman Christian College

(lvii) Habib University Foundation.

(lviii) Begum Akhtar Rukhsana Memorial Trust Hospital.

(lix) Al-Khidmat Foundation.

(lx) Dawat-e-Islami Trust

(Ixi) Sardar Trust Eye Hospital, Lahore.

EXEMPTION ON PROFIT ON DEBT

Clause (90A)-New clause

The Finance Act inserted this new clause which states that “where income tax exemption is granted to any

profit on debt derived by any person on bonds issued by Pakistan Mortgage Refinance Company to

refinance the residential housing mortgage market, for a period of five years with effect from the 1st day

of July, 2018.

INCOME OF MODARABA COMPANY

Clause (100)

Income of a Modaraba company would be exempt except the income from trading and manufacturing,

previously said clause has only excluded the trading income of Modaraba companies.

TRANSFER OF CAPITAL ASSET

Clause (110C)

The Finance Act 2018 inserted new clause namely (110C) which states that any gain by a person on

transfer of a capital asset, being a bond issued by Pakistan Mortgage Refinance Company to refinance the

residential housing mortgage market, during the period from the 1st day of July, 2018 till the 30th day of

June, 2023 shall be exempt.




EXEMPTION TO OIL REFINERY COMPANIES

Clause (126BA)

After clause (126B) a new clause (126BA) is inserted where, Income tax exemptions has been granted to

the profits & gains derived by a refinery set up between the 1st day of July, 2018 and the 30th day of June,

2023 with minimum 100,000 barrels per day production capacity for a period of twenty years beginning

in the month in which the refinery is set up or commercial production is commenced, whichever is later.

Exemption under this clause shall also be available to existing refineries, if:

(a) existing production capacity is enhanced by at least 100,000 barrels per day

(b) the refinery maintains separate accounts for income arising from aforesaid additional

production capacity

(c) the refinery is a deep conversion refinery

EXEMPTION TO SOFTWARE EXPORT AND INFORMATION TECHNOLOGY SECTOR

Clause (133)

Exemption available to IT Sector till 30th day of June, 2019 is extended to 30th day of June 2025.

[SECOND SCHEDULE, PART II]

EXEMPTION FOR THE LAHORE ORANGE LINE METRO TRAIN PROJECT

Clause (24AA)

A new clause (24AA) is added after clause (24A), where the rate of tax, under section 152 in the case of

M/S CR-NORINCO JV (Chinese Contractor) as recipient, on payments arising out of commercial contract

agreement signed with the Government of Punjab for installation of electrical and mechanical (E&M)

equipment for construction of the Lahore Orange Line Metro Train Project, is 6% of the gross amount of

payment.

[SECOND SCHEDULE PART III]

INCOME FROM OTHER SOURCES IN RESPECT OF YIELD ON INVESTMENT

[Clause 6]

Profit on investment in Shuhada Family Welfare Account is taxed at the rate of 10%.

TAX PAYABLE BY FOREIGN FILM MAKERS

[Clause 7]

The amount of tax payable by foreign film-makers from making films in Pakistan shall be reduced by fifty

percent on income from film-making in Pakistan.

TAX PAYABLE BY RESIDENT FILM MAKERS

[Clause 8]

The amount of tax payable by resident companies deriving income from film-making shall be reduced by

seventy percent on income from film-making.




TAX ON PROFIT AND GAINS FROM LOW COST HOUSING PROJECT

[Clause 9]

The tax payable on profits and gains derived by a person from low cost housing projects shall be reduced

by fifty percent. The reduction in tax liability under this clause shall apply to such project which is:

(a) owned and managed by a company formed for operating the said project and registered under

the Companies Act, 2017 (XIX of 2017) and having its registered office in Pakistan; and

(b) not formed by the splitting up, or the reconstruction or reconstitution, of a business already in

existence or by transfer to a new business of any machinery or plant used in a business which was

being carried on in Pakistan at any time before the commencement of the new business;

(c) a low cost housing project under which the maximum sale price of a single housing unit is two

and a half million rupees.

[SECOND SCHEDULE PART IV]

PROFIT ON DEBT

[Clause 1A]

New exemption under section 46(2) on profit on debt on the securities issued by Third Pakistan

International Sukuk Company Ltd.

WITHHOLDING OF INCOME TAX ON SERVICES

[Clause 11E]

The Finance Act 2018 inserted a new clause namely (11E) which states that withholding provision of

income tax shall not apply to payments received by Sui Southern Gas Company Limited and Pakistan LNG

Terminal Limited from Sui Northern Gas Pipelines Limited on account of re-gasification charges.

DIVIDEND INCOME

[Clause 12A]

The provisions of section 150 shall not apply to dividend paid to Transmission Line Projects under

Transmission Line Policy 2015.

PROFIT ON DEBT

[Clause 36A]

The provisions related to withholding of income tax on profit on debt would not applicable to Shuhada

Family Welfare Account

WITHHOLDING OF INCOME TAX ON IMPORT

[Clause 56]

In clause (56), in sub-clause (ia), for the expression "Bakri Trading Company Pakistan (Private) Limited,

Overseas Oil Trading Company (Private) Limited" the expression "Bakri Energy (Private) Limited" shall

be substituted.

WITHHOLDING OF INCOME TAX ON IMPORT BY COMMERCIAL IMPORTER

[Clause 56B]

Since 1992, the commercial importers are subject to tax on presumptive tax basis. Under that system, tax

collected at source at the import stage is considered as a final tax liability in respect of income from such




imports. Now these imports are being treated under minimum tax regime. Pursuant to the change from

final tax regime to minimum tax, the option for normal tax regime available to importers under clause

(56B) of Part IV of Second Schedule has also been withdrawn.

MINIMUM INCOME TAX ON COMPANIES OPERATING TRADING HOUSES

[Clause 57]

Minimum tax on companies operating trading houses would be 0.5% up to 2021.

EXEMPTION FROM WITHHOLDING OF INCOME TAX ON IMPORT

[Clause 60AA]

The provisions of section 148 of the Income Tax Ordinance, 2001, shall not apply for import of

construction materials or goods up to a maximum of 10,898,000 million rupees imported by China State

Construction Engineering Corporation (M/s CSCEC) for construction of Sukkur-Multan section of Karachi-

Peshawar Motorway project of National Highway Authority under CPEC.

DEEMED NON-PROFIT ORGANIZATION

[Clause 63]

The Act has approved to include Lahore University of Management Sciences, Lahore in the Non-profit

organization.

WITHHOLDING OF INCOME TAX ON SPECIFIED SERVICES UNDER CLAUSE 94

[Clause 94]

If a company being a filer rendering the services in respect of inspection, certification, testing and training

then he would be required to pay the tax at the rate of 2% after fulfilling the requisite conditions stated in

the said clause. Furthermore, The Finance Act 2018 has extended the applicability of this clause up till

2019.

TAX ON PROFIT ON DEBT

[Clause 103]

Withholding provisions regarding income tax would not be applicable under section 151 on to yield or

profit on investment in Bahbood Savings Certificate or Pensioner’s Benefit Account, provided that tax on

the said yield or profit on debt would be paid at the rates applicable to Individuals and AOP, but in no case

it would be more than 10%.

TAX ON UNDISTRIBUTED RESERVES

[Clause 104]

Provision regarding tax on undistributed reserves shall not apply to a company where a restriction has

been imposed on distribution of dividend on account of an agreement with the Government of Pakistan.

SELECTION OF AUDIT UNDER SECTION 177 AND 214C

[Clause 105]

The provisions of section 177 and 214C shall not apply to a person whose income tax affairs have been

audited in any of the preceding three tax years, provided that the Commissioner may select a person under

section 177 for audit, with approval of the Board.




SECTION D. TAX RATES FOR TAX YEAR 2019

1 Upto Rs.400,000 0% Nature of Payement Section Filer

TAX RATES FOR THE TAX YEAR 2018-2019

TAX RATES FOR INDIVIDUAL MINIMUM TAX

(Division I, Part 1 of the First Schedule) 2018 2019

Non-Filer Filer Non-Filer

1.25% of Turnover

3 Rs.800,001 to Rs. 1,200,000 Rs.2,000Oil Marketing Companies, Refineries, SSGCL, SNGPL, PIA,

Poultry Industry and Dealer or Distributor of Fertilizer113 0.5% of Turnover 0.5% of Turnover

2 Rs.400,001 to Rs. 800,000 Rs.1,000Individual & AOP [having annual turnover Rs.10 Million

or more] and Companies113 1.25% of Turnover

0.2% of Turnover

5 Rs.2,400,001 to Rs. 4,800,000Rs. 60,000 + 10% of the amount

exceeding Rs 2,400,000Motorcycles Dealers 113 0.25% of Turnover 0.25% of Turnover

4 Rs.1,200,001 to Rs. 2,400,0005% of the amount exceeding Rs

1,200,000

Distributors of Pharma, Fast Moving Consumer Goods,

Cigrattes, Petroleum Agent, Rice Mills/Dealers and Flour

Mills

113 0.2% of Turnover

Imports of edible oil and packing material (Other than

Above)148(8) 6.00% 9.00% 6.00% 9.00%

6 Exceeding Rs. 4,800,000Rs. 300,000 + 15% of the amount

exceeding Rs 4,800,000

Imports of edible oil and packing material (Comapanies &

Industrial Undertaking)148(8) 5.50% 8.00% 5.50% 8.00%

Services (Companies) 153(1)(b) 8.00%

Nature of Payement Section Filer Non-Filer Filer Non-Filer

14.50% 8.00% 14.50%

Imports of Remultiple Steel, Potassic Fertilizer, Urea,

Gold, Cotton, LNG & Manufacturers under

SRO.1125(1)2011

148 1.00% 1.50% 1.00% 1.50%

Imports Commercial covered under SRO.1125(1)2011 148 4.50%

Imports of Pulses 148 2.00% 3.00% 2.00% 3.00%

3.00% 4.50% 3.00%

6.50%Imports of Ships by Ship Breakers 148 4.50% 6.50% 4.50%

7.50% to

25%

7.50% to

25%

Import (Other Than Above) 148 6.00% 9.00% 6.00%

7.50% to

25%7.50% to 25%

9.00%

Profit on Debt Exceeding Rs. 500,000 (Other than

companies)151 10.00% 17.50% 10.00%

10.00%Profit on Debt upto Rs. 500,000 (Other than companies) 151 10.00% 10.00%

Dividend 150

10.00%

Sale by Distributor of fast moving consumer goods

(Other)153(1)(a) 2.50% 2.50% 2.50%

2.00%

9.00%

Sale of Rice, Cotton seed and edible oil 153(1)(a) 1.50% 1.50% 1.50% 1.50%

Sale of goods (Other Than Companies) 153(1)(a) 4.50% 7.75% 4.50%

Sale by Distributor of fast moving consumer goods

(Companies)153(1)(a) 2.00% 2.00% 2.00%

4.00% 7.00%

Contract by Non-Resident 152(1)(A) 7.00%

4.00% 8.00%TAX RATE (2019)

Royalty or Fee for Technical Services by Non-Residents 152(1) 15.00% 15.00%

7.00%

7.50% 15.00%

2.50%

Contracts (Other than Companies)

Person other than banking

company have income equal

to 500 million or more

3% 2%

(Division IIA ,Part 1 of the First Schedule)

(Division VIII, Part 1 of the First Schedule)

Irrecpective of holding period allotement

covered U/S 236C (4)0.00% 0.00%

Local Supply to Textile, Carpets, Leather, Surgical and

Sports Goods Sectors, Cigrattes and Pharmaceutical 153(1)(a) 1.00% 1.00% 1.00% 1.00%

12.00% 7.00% 12.00%

Sale of goods (Companies) 153(1)(a)

Exports 154 1.00% 1.00% 1.00%

12.00% 7.00% 14.00%

153(1)(c) 7.50% 12.50%

Services of Stiching, Dying, Printing, Embroidery,

Washing, Sizing and Weaving to Exporters153(2) 1.00% 1.00% 1.00% 1.00%

Contracts (Sports Persons) 153(1)(c) 10.00% 10.00% 10.00%

Contracts (Companies) 153(1)(c)

Prize & Winnings 156 15% to 20% 25.00% 15% to 20% 25.00%

Indenting Commission 154(2) 5.00% 5.00% 5.00% 5.00%

Advertizing Commissions 233 (1) 8.00% 16.00% 8.00% 16.00%

17.50% 12.00% 17.50%

Advertising agents 233 (1) 10.00% 15.00%

Commission on petroleum products 156A 12.00%

10.00% 15.00%

15.00% 12.00% 15.00%

Advance Tax on Bonus shares issued by Listed Companies 236M 5.00% 5.00%

Holding period is more than [03] Year

acquired before (01-07-2016)0.00% 0.00% CNG Stations on Gas Bills 234A 4.00% 6.00%

0.00% 0.00%

Advance Tax on Bonus shares issued by Non-listed

Companies236N 5.00%

Holding period is upto [03] Year acquired

before (01-07-2016)5.00% 5.00% Brokerage and Commission (Other Than Above) 233 (1) 12.00%

8.00%

Higher of

5% or

20,000

Advance Tax on functions and gatherings (for major

cities)236D 5.00% 5.00%

Higher of 5%

or 20,000

5.00%Higher of 5%

or 10,000

Higher of

5% or

10,000

REDUCTION FOR TEACHERS AND RESEARCHER

[Clause (1)(2), Part III of the Second Schedule]

40% reduction in tax for full time Teacher and Researcher employed in Non-

Profit education or research institution's recognized by HEC or employees of

government training and research institutions.

Sale of goods (Listed and manufacturer Companies) 153(1)(a) 4.00% 7.00% 4.00%

PAYMENT/DEDUCTION ON INCOME FROM PROPERTY U/S 15 & 155 FOR IND. & AOP

(Division VIA, Part 1 of the First Schedule) & (Dision V, Part III of the First Schedule)

WEALTH STATEMENT AND RECONCILIATION U/S 116

Rs.1,000,000 to Rs.2,000,000Rs. 60,000 + 15% of gross amount

exceeding Rs. 1,000,000

Rs. 60,000 + 15% of gross amount exceeding

Rs. 1,000,000

2018 2019

Upto Rs. 200,000 NIL NIL

Rs.200,000 to Rs.600,0005% of gross amount exceeding Rs.

200,000

WORKER WELFARE FUND

(Dision V, Part III of the First Schedule)

2% of WWF shall be paid by industrial establishments, who's income during the

tax year is Rs.500,000 or more and shall be entitled to claim deductible

allowance for the amount paid as WWF in a tax year .

The rate of Tax to be Deducted under section 155, in case of company shall be 15% for filer and 17.5% for non-filer of Gross Amount of Rent.

Filing of Wealth statement along with reconciliation statement U/S 116 is

compulsory for all individual tax payer.

Exceeding Rs. 2,000,000Rs. 210,000 + 20% of gross amount

exceeding Rs. 2,000,000


Rs. 2,000,000

DEDUCTION ON INCOME FROM PROPERTY U/S 155 FOR COMPANIES

Filing of foreign income and asset statement along with return of income is

compulsory for individual who earns 10,000$ or is the owner of foreign assets

having a value of 10,000$ or more.

5% of gross amount exceeding Rs. 200,000

Rs.600,000 to Rs.1,000,000Rs. 20,000 + 10% of gross amount

exceeding Rs. 600,000


Rs. 600,000

TAX RATES FOR AOP

(Division I, Part 1 of the First Schedule)

1 Upto Rs.400,000 0%

2 Rs.400,001 to Rs. 1,200,0005% of the amount exceeding Rs

400,000









Exceeding Rs. 6,000,000Rs. 880,000 + 30% of the amount


CAPITAL GAIN ON DISPOSAL OF IMMOVABLE PROPERTY

Banking Company 4% 3%

TYPE TAX RATE (2018)

SUPER TAX FOR COMPANIES

Small Company 25% 25%

TAX RATES FOR COMPANIES

TAX RATE (2018) TAX RATE (2019)

Banking Company 35% 35%

Public and Private Company 30% 29%

10.00%

2.00%

1.50%

1.50%

1.00%

NA

10.00%

2.00%

1.50%

1.50%

1.00%

NA

17.50%

2.00%

12.00%

15.00%

1.00%

0.40%

1.00%

10.00%

17.50%

15.00% 15.00%

Services (Other Than Above)

Transport Services

Electronic & Print Madia Advertising Services

(Companies)

Electronic & Print Madia Advertising Services (Others)

Services to Textile, Carpets, Leather, Surgical & Sport

Goods

153(1)(b)

153(1)(b)

153(1)(b)

153(1)(b)

153(1)(b)

Advance Tax on Banking Transactions by Non-filers 236P

17.50%

2.00%

12.00%

15.00%

1.00%

0.40%

ADJUSTABLE TAX

FOREIGN INCOME AND ASSET STATEMENT U/S 116A

FINAL DISCHARGE OF TAX

2018 2019

Import (Companies & Industrial Undertaking) 148 5.50% 8.00% 5.50% 8.00%

Advance Tax on functions and gatherings (for other

cities)236D 5.00%

0.00%5.00% 0.00%

6.00% 4.00%

(Division II, Part 1 of the First Schedule)

TYPE

Holding period upto [01] Year acquired on

or after (01-07-2016)10.00% 10.00%


or after (01-07-2016)7.50% 7.50%


or after (01-07-2016)5.00% 5.00%

Irrecpective of holding period allotement

covered U/S 236C (4)0.00% 0.00%


or after (01-07-2016)10.00% 10.00%

REDUCTION FOR SENIOR CITIZEN / DISABLE PERSON

[(1 B) Division I, Part 1 of the First Schedule]

50% reduction in tax to disable persons holding National Database Registration

Authority's CNIC or a Tax payer having age of 60 Years or above, where regular

income is upto Rs. 1,000,000/- from all sources, except income covered in Final

Tax Regime.

Holding period is more than [03] Year

acquired on or after (01-07-2016)0.00% 0.00%


or after (01-07-2016)5.00% 5.00%


or after (01-07-2016)7.50% 7.50%




SECTION E. SALES TAX ACT, 1990

Salient Features

Rate of further tax is increased from 2% to 3%.

The powers of the Federal Government to issue notifications under various sections of the Sales

Tax Act, 1990 are restored from the Board.

Audit shall only be conducted once in every three years.

Default surcharge is fixed at 12% per annum. Previously it was KIBOR plus 3% per annum.

Alternate Dispute resolution, ADRC shall only hear the case after the withdrawal of appeals filed


binding on both the parties.

Recovery of arrears of tax, Automatic stay in case where appeal is pending before the Commission

Inland Revenue (Appeals), is allowed on payment of 10% of the amount of tax due whereas the

previous condition was payment of 25% of the amount of tax due.

In order to align with the provisions of Special Economic Zone Act, 2012, exemption is granted on

import of plant and machinery.

Rate of further tax on zero rated domestic supplies of finished goods covered under SRO 1125 is

reduced to 1%.

The rate of sales tax on import and supply of finished articles of leather and textile sector is proposed to be increased to 9% from 6%;

The rate of sales tax for steel sector is being increased to Rs. 13 per unit of electricity consumed. The Standard rate of sales tax proposed on import and supplies of furnace oil;

SRO 1125(I)/2011, dated 31.12.2011 is being amended to provide rate of further tax @1% on local supply of finished fabric.

Sale tax rate is reduced to 3% on all fertilizers across the board Sales tax is reduced to 5% on agricultural machinery from existing rate of 7%; Sales tax is reduced to 5% on supply of natural gas to fertilizer plants from existing rate of 10%;




1. FURTHER TAX ON SUPPLIES TO UNREGISTERED PERSONS

[SECTION 3(1A)]

Further tax is levied on persons who are liable to be registered in sales tax but are not registered.

Previously, the rate of further tax charged on the supply to unregistered persons was subject to the further

tax at the rate of two percent (2%). The Finance Act 2018 increase the rate of further tax from the existing

two percent (2%) to three percent (3%).

2. AUTHORITY FOR REVISION OF TAX RATES

[SECTION 3(2)(b)]

The Federal Board of Revenue was authorized to change in tax rates, manner of payment in respect of any

taxable goods with the approval of the Federal Minister-in-charge. However, this power of the board has

been removed through The Finance Act 2018. These powers are now rest with the Federal Government

instead of the board.

3. AUTHORITY TO DECIDE LIABILITY OF PERSON TO PAY TAX

[SECTION 3(3A)]

The Federal Board of Revenue was authorized to specify the goods in respect of which the liability to pay

tax shall be of the person receiving the supply. However, this power of board has been removed by the

Finance Act 2018. These powers are now rest with the Federal Government instead of the board.

4. AUTHORITY TO SPECIY GOODS TO BE TAXED AT EXTRA RATE

[SECTION 3(5)]

The Federal Board of Revenue was authorized to specify the goods on which the extra tax was levied and

charged. The board was also authorized to prescribe rules for the mode of levy, charge and payment of

such extra tax. However, the Finance Act 2018 remove this authority from the board and vest this

authority with the Federal Government.

5. AUTHORITY TO NOTIFY GOODS FOR ZERO RATING

[SECTION 4(c)]

Federal Government shall be in charge of notifying goods to be taxed at zero rate. Previously the Board

was empowered for such purpose with approval of Federal Minister-in-charge.

6. AUTHORITY TO ALLOW INPUT ADJUSTMENT

[SECTION 7(3)(4)]

The Federal Board of Revenue was authorized to allow a registered person to deduct input tax paid by

him from the output tax however, the Finance Act 2018 remove this authority from the board and vest

this authority with the Federal Government.

7. AUTHORITY TO LEVY TAX ON SPECIFIED GOODS ON VALUE ADDITION

[SECTION 7A (1)(2)]

The Federal Board of Revenue was authorized to notify minimum value addition required to be declared

by certain persons or categories of persons, and to waive the requirement of audit or scrutiny of records




if such minimum value addition is declared. However, the Finance Act 2018, remove this authority from

the board and vest this authority with the Federal Government.

8. AUTHORITY TO DECIDE TAX CREDIT NOT ALLOWED

[SECTION 8(b)]

The Federal Board of Revenue was authorized to specify goods and services for which tax input tax paid

shall not be adjustable against output tax payable however, the Finance Act 2018 remove this authority

from the board and vest this authority with the Federal Government.

Furthermore, the Finance Act 2018 inserted a new clause in section 8 after clause (I) which disallows tax

credit on import of scrap of compressors.

9. ASSESSMENT GIVING EFFECT TO AN ORDER

[SECTION 11(B)]

Through Finance Act 2018 a new section 11B is inserted. The section is intended to empower the

Commissioner or officer of Inland Revenue to issue the assessment order for the sales tax liability in

accordance with the order passed by the Appellate Authorities including Commissioner (Appeals),

Appellate Tribunal, High Court and Supreme Court with in a period of one year after the date of order by

the Appellate Authority. The section 11B reads as follow;

“11B. Assessment giving effect to an order– (1)

Except where sub-section (2) applies, where, in consequence of, or to give effect to, any finding or

direction in any order made under Chapter-VIII by the Commissioner (Appeals), Appellate

Tribunal, High Court or Supreme Court an order of assessment of tax is to be issued to any

registered person, the Commissioner or an officer of Inland Revenue empowered in this behalf

shall issue the order within one year from the end of the financial year in which the order of the

Commissioner (Appeals), Appellate Tribunal, High Court or Supreme Court, as the case may be,

was served on the Commissioner or officer of Inland Revenue.

(2) Where, by an order made under Chapter-VIII by the Appellate Tribunal, High Court or Supreme

Court, an order of assessment is remanded wholly or partly and the Commissioner or

Commissioner (Appeals) or officer of Inland Revenue, as the case may be, is directed to pass a new

order of assessment, the Commissioner or Commissioner (Appeals) or officer of Inland Revenue,

as the case may be, shall pass the new order within one year from the end of the financial year in

which the Commissioner or Commissioner (Appeals) or officer of Inland Revenue, as the case may

be, is served with the order: Provided that limitation under this sub-section shall not apply, if an

appeal or reference has been preferred against the order passed by Appellate Tribunal or a High

Court.”

10. AUTHORITY TO EXEMPT TAXABLE SUPPLIES

[SECTION 13(2)(a)]

Previously, The Federal board of Revenue was authorized to exempt any taxable supplies wholly or partly

whenever circumstances demand to take immediate action, however, the Finance Act 2018 removed this

power of board and vested this authority with Federal Government.




11. AUDIT TO BE CONDUCTED ONCE IN THREE YEARS

[SECTION 25(2)]

Audit under section 25(2) shall be only conducted once in every three years. There has been a general and

genuine complaint of taxpayers for repetitive selection for tax audits. A corrective measure has been

approved whereby a composite audit, covering Income Tax, Sales Tax and Federal Excise, shall be

undertaken not more than once in three years.

12. DIRECTORATE GENERAL (INTELLIGENCE AND INVESTIGATION), INLAND REVENUE

[SECTION 30A]

There were certain ambiguities regarding the jurisdiction of the Directorate General (Intelligence and

Investigation) Inland Revenue which are now addressed by inserting the new sub section under the

section 30A. The sub section 2 of section 30A intends to empower the Federal Board of Revenue to specify

the functions, jurisdictions and powers of the Directorate General and its officers. The sub-section reads

as follows;

“(2) The Board may, by notification in the official Gazette, –

(a) specify the functions and jurisdiction of the Directorate General and its officers; and

(b) confer the powers of authorities specified in section 30 upon the Directorate General and

its officers.”

13. RATE OF DEFAULT SURCHARGE

[SECTION 34(1)(a)]

The rate of default surcharge is changed from KIBOR plus three percent to twelve per cent (12%) per

annum.

14. POWER OF CHIEF COMMISSIONER TO POST OFFICER OF INLAND REVENUE

[SECTION 40B]

The power of Chief Commissioner to post officer of Inland Revenue to the premises of registered persons

is omitted by Finance Act 2018.

15. ALTERNATIVE DISPUTE RESOLUTION

[SECTION f]

Section 47A, which defines the role of the Alternate Dispute Resolution function, is substituted. The

composition, legal status and time period related to the Alternate Dispute Resolution is revamped. The

period for the constituting the Alternate Dispute Resolution Committee and the time period for its

recommendation will increase by the substitution of the section 47A. Furthermore, the decision of the

ADR Committee was not binding for the parties previously which is now binding for both parties. i.e. Board

and the Tax payer. The new section reads as follows;




“47A. Alternative dispute resolution. (1) Notwithstanding any other provision of this Act, or the

rules made thereunder, an aggrieved person in connection with any dispute pertaining to:

(a) the liability of tax against the aggrieved person, or admissibility of refunds, as the case may

be;

(b) the extent of waiver of default surcharge and penalty; or

(c) any other specific relief required to resolve the dispute, may apply to the Board for the

appointment of a Committee for the resolution of any hardship or dispute mentioned in detail

in the application, which is under litigation in any Court of Law or an Appellate Authority,

except where criminal proceedings have been initiated or where interpretation of question of

law is involved having effect on other cases.

(2) The Board may, after examination of the application of an aggrieved person, appoint a

Committee, within sixty days of receipt of such application in the Board, comprising:

(i) an officer of Inland Revenue not below the rank of a Commissioner;

(ii) a person to be nominated by the taxpayer from a panel notified by the Board

comprising:

a. senior chartered accountants and senior advocates having experience in the field

of taxation; and

b. reputable businessmen as nominated by Chambers of Commerce and Industry;

and

(iii) a retired Judge not below the rank of District and Sessions Judge, to be nominated

through consensus by the members appointed under (i) and (ii) above.

(3) The aggrieved person, or the Commissioner, or both, as the case may be, shall withdraw the

appeal pending before any Court of Law or an Appellate Authority, after constitution of the

Committee by the Board under sub-section (2).

(4) The Committee shall not commence the proceedings under sub-section (5) unless the order

of withdrawal by the Court of Law or an Appellate Authority is communicated to the Board:

Provided that if the order of withdrawal is not communicated within seventy five days of the

appointment of the Committee, the said Committee shall be dissolved and provisions of this

section shall not apply.

(5) The Committee appointed under sub-section (2) shall examine the issue and may, if it deems

necessary, conduct inquiry, seek expert opinion, direct any officer of the Inland Revenue or

any other person to conduct an audit and shall decide the dispute by majority, within one

hundred and twenty days of its appointment:

Provided that in computing the aforesaid period of one hundred and twenty days, the period,

if any, for communicating the order of withdrawal under sub-section (4) shall be excluded.




(6) The recovery of tax payable by a taxpayer in connection with any dispute for which a

Committee has been appointed under sub-section (2) shall be deemed to have been stayed on

withdrawal of appeal upto the date of decision by the Committee.

(7) The decision of the committee under sub-section (5) shall be binding on the Commissioner

and the aggrieved person.

(8) If the Committee fails to decide within the period of one hundred and twenty days under sub-

section (5), the Board shall dissolve the Committee by an order in writing and the matter shall

be decided by the Court of Law or the Appellate Authority which issued the order of

withdrawal under sub-section (4) and the appeal shall be treated to be pending before such a

Court of Law or the Appellate Authority as if the appeal had never been withdrawn.

(9) The Board shall communicate the order of dissolution to the Court of Law or the Appellate

Authority and the Commissioner.

(10) The aggrieved person, on receipt of the order of dissolution, shall communicate it to the

Court of Law or the Appellate Authority which shall decide the appeal within six months of

the communication of said order.

(11) The aggrieved person may make the payment of sales tax and other taxes as decided by

the Committee under sub-section (5) and all decisions, orders and judgments made or passed

shall stand modified to that extent.

(12) The Board may prescribe the amount to be paid as remuneration for the services of the

members of the Committee, other than the member appointed under clause (i) of sub-section

(2).

(13) The Board may, by notification in the official Gazette, make rules for carrying out the

purposes of this section.”

16. RECOVERY OF ARREARS OF TAX

[SECTION 48]

Commissioner Inland Revenue can grant stay over the proceedings for recovery of tax if twenty five

percent (25%) of the disputed demand has been paid by the Taxpayer. The Finance Act 2018 reduce the

amount of tax for automatic stay from the existing twenty five percent (25%) to ten percent (10%) of the

tax demand.

17. RECTIFICATION OF CERTAIN TERMS

[SECTION 58]

The Finance Act 2018 has replaced the expression of “Companies Ordinance, 1984 (XLVII of 1984)”, with

the expression “Companies Act, 2017 (XIX of 2017)”.




18. POWERS TO DELIVER CERTAIN GOODS WITHOUT PAYMENT OF TAX

[SECTION 60]

The Federal Board of Revenue was authorized to deliver certain goods without payment of tax to

registered importers and manufacturers-cum exporters. However, the Finance Act 2018 has removed the

power of the board. These powers are now rest with the Federal Government instead of Board.

19. POWER OF BOARD TO EXEMPT THE TAX NOT LEVIED OR SHORT LEVIED AS A RESULT OF GENERAL

PRACTICE

[SECTION 65]

The Federal Board of Revue was authorized to exempt tax not levied or short levied as a result of general

practice. However, the Finance Act 2018 has removed the power of the board. These powers are now rest

with the Federal Government instead of the Board.

20. POWER TO PRESCRIBE SPECIAL PROCEDURE

[SECTION 71]

The Federal Board of Revue was authorized to prescribe special procedure for scope and payment of tax,

registration, book keeping and invoicing requirements and returns in respect of such supplies as may be

specified therein. However, the Finance Act 2018 has removed the power of the board. These powers are

now rest with the Federal Government instead of Board.

21. VALIDATION OF PREVIOUSLY ISSUED NOTICES, PASSED ORDERS AND ORDERS TAKEN

[SECTION 74A]

The section 74A of the Sales Tax Act 1990 validated the issued notifications and orders before the

introduction of the Finance Act, 2017. The finance Act validated the notifications and orders before the

introduction of the Finance Act 2018, thus validating the notifications and orders issued within the last

financial year. Furthermore, the Act validate the orders passed, notices issued and actions taken by the

Directorate General (Intelligence and Investigation) without regard to any omission, irregularity or

deficiency in the establishment. The sub-section (2) reads as follows;

(1) “Notwithstanding any omission, irregularity or deficiency in the establishment of or conferment

of powers and functions on the Directorate General (Intelligence and Investigation), Inland

Revenue and authorities specified in section 30A, all orders passed, notices issued and actions

taken, before commencement of the Finance Act, 2018, in exercise or purported exercise of the

powers and functions of the officers of Inland Revenue under this Act by the Director General

(Intelligence and Investigation), Inland Revenue or the authorities specified in section 30A shall

be deemed to have been validly passed, issued and taken under this Act.”

22. AMMENDMENTS THAT ARE ENFORCED THROUGH FUTURE STATUTORY REGULATORY ORDERS

Zero rating on imports of potato is being granted for 200,000 metric tons imported during the

three months from May-2014 to July-2014.




Existing rate of further tax at 2% on zero rated domestic supplies of finished goods covered under

SRO 1125 is reduced to 1%.

Packing material input adjustment is now allowed to five export-oriented sectors covered under

SRO 1125.

The rate of sales tax on import and supply of finished articles of leather and textile is increased to

9%. However, the previous rate of 6% shall be applicable to all branded outlets which will be

integrated with FBR online system.

Pakistani foam manufacturers are exempted from extra tax and further tax at 2%.

Value addition tax withdrawn on import of second hand worn clothing and footwear.

Value addition tax of 3% chargeable on import of LNG under Rule 58B of the Sales Tax Special

Procedure Rules, 2007 is waived.

The rate of sales tax for steel sector is enhanced to Rs. 13 for existing Rs. 11 per unit of electricity

consumed.

The scope of services taxable is enhanced under the Islamabad Capital Territory (Tax on Services)

Ordinance, 2001.

ZERO RATING OF GOODS

[FIFTH SCHEDULE]

The Finance Act 2018 approved that the following goods and raw material, packing materials, sub-

components, components, sub assembles and assemblies imported or purchased locally for manufacture

of said goods shall be included in the fifth schedule in order to be chargeable to sales tax at the rate of zero

percent:

“(xx) Colour in sets (PCT heading 3213.1000).

(xxi) Writing, drawing and marking inks (PCT heading. 3215.9010 and 3215.9090)

(xxii) Erasers (PCT heading 4016.9210 and 4016.9290)

(xxiii) Exercise books (PCT heading 4820.2000)

(xxiv) Pencil sharpeners (PCT heading 8214.1000)

(xxv) Geometry boxes (PCT heading 9017.2000)

(xxvi) Pens, ball pens, markers and porous tipped pens (PCT heading 96.08)

(xxvii) Pencils including colour pencils (PCT heading 96.09)”.;




3. EXEMPTIONS

SIXTH SCHEDULE [TABLE-1]

Import and supply of following items have been exempted from levy of sales tax through insertion of

following entries in table 1 under section 13(1):

Sr. No.

Description Heading/Sub heading No.

137. Paper weighing 60 g/m2 for printing of Holy Quran imported by Federal or Provincial Governments and Nashiran-e-Quran as per quota determined by IOCO

4802.5510

138. Fish Feed Respective Heading

139. Fans for dairy farms 8414.5990 140. Bovine semen 0511.1000 141. Preparations for making animal feed 2309.9000 142. Promotional and advertising material including technical literature,

pamphlets, brochures and other give-aways of no commercial value, distributed free of cost by the exhibitors

9920(3)

143. (i) Hearing aids (all types and kinds) (ii) Hearing assessment equipment; (a) Audiometers (b) Tympanometer (c) ABR (d) Oto Acoustic Omission

9937

144. Liquefied Natural Gas imported by fertilizer manufacturers for use as feed stock

2711.1100.;

145. Plant, machinery, equipment including dumpers and special purpose motor vehicles, if not manufactured locally, imported by M/s China State Construction Engineering Corporation Limited (M/s CSCECL) for the construction of Karachi – Peshawar Motorway (Sukkur – Multan Section) and M/s China Communication Construction Company (M/s CCCC) for the construction of Karakorum Highway (KKH) Phase-II (Thakot - Havellian Section) subject to the following conditions: (i) That the exemption under this serial number shall only be available

to contractors named above;

(ii) That the equipment and construction machinery imported under this serial number shall only be used for the construction of the respective allocated projects;

(iii) That the importer shall furnish an indemnity bond, in the prescribed

manner and format as set out in Annex-A, at the time of import to the extent of sales tax exempted under this serial number on consignment to consignment basis;

(iv) That the Ministry of Communications shall certify in the prescribed manner and format as set out in Annex-B that the imported

Respective heading




equipment and construction machinery are bonafide requirement for construction of Sukkur – Multan Section (392.0 km) of Karachi – Peshawar Motorway or for the construction of Karakorum Highway(KKH) Phase-II - Thakot to Havellian Section (118.057 km) as the case may be;

(v) For the clearance of imported goods through Pakistan Customs Computerized System the authorized officer of the Ministry shall furnish all relevant information, as set out in Annex-B, online against a specific user ID and password obtained under section 155D of the Customs Act, 1969 (IV of 1969). In Collectorates or Customs stations where the Pakistan Customs Computerized System is not operational, the Director Reforms and Automation or any other person authorized by the Collector in this behalf shall enter the requisite information in the Pakistan Customs Computerized System on daily basis, whereas entry of the data obtained from the customs stations which have not yet been computerized shall be made on weekly basis;

(vi) That the equipment and construction machinery, imported under this serial number, shall not be re-exported, sold or otherwise disposed of without prior approval of the FBR. In case goods are sold or otherwise disposed of with prior approval of FBR the same shall be subject to payment of duties as may be prescribed by the FBR;

(vii) In case the equipment and construction machinery, imported under this serial number, is sold or otherwise disposed of without prior approval of the FBR in terms of para (vi) above, the same shall be subject to payment of statutory rates of sales tax as were applicable at the time of import;

(viii) Notwithstanding the condition at para (vi) and (vii) above, equipment and construction machinery, imported under this serial number, may be surrendered at any time to the Collector of Customs having jurisdiction, without payment of any sales tax, for further disposal as may be prescribed by the FBR;

(ix) The indemnity bond submitted in terms of para (iii) above by the importer shall be discharged on the fulfillment of conditions stipulated at para (vi) or (vii) or (viii) above, as the case may be; and

(x) That violation of any of the above-mentioned conditions shall render the goods liable to payment of statutory rate of sales tax leviable on the date of clearance of goods in addition to any other penal action under relevant provisions of the law.

146. Equipment, imported by M/s China Railway Corporation to be furnished and

installed in Lahore Orange Line Metro Train Project subject to the following conditions:

(a) That the equipment imported under this serial number shall only be used in the aforesaid Project;

Respective

heading




(b) That the importer shall furnish an indemnity bond, in the prescribed manner and format as set out in Annex-C to this serial number, at the time of import to the extent of sales tax exempted under this serial number on consignment to consignment basis;

(c) That the Punjab Mass Transit Authority, established under the Punjab

Mass Transit Authority Act, 2015 (ACT XXXIII of 2015), hereinafter referred as the Regulatory Authority, shall certify in the prescribed manner and format as set out in Annex-D to this serial number that the imported equipment is bona fide requirement of the Project under the Contract No. PMA-CR-NORINCO-OL, dated 20.04.2015, hereafter referred as the contract, signed between the Regulatory Authority and CR-NORINCO;

(d) In the event a dispute arises whether any item is entitled to exemption

under this serial number, the item shall be immediately released by the Customs Department against a corporate guarantee, valid for a period of six months, submitted by the importer. A certificate from the Regulatory Authority duly verified by the Transport and Communication Section of the Ministry of Planning, Development and Reform, that the item is covered under this serial number shall be given due consideration by the Customs Department towards finally resolving the dispute;

(e) For the clearance of imported equipment through Pakistan Customs

Computerized System the authorized officer of the Regulatory Authority shall furnish all relevant information, as set out in Annex-D to this serial number, online against a specific user ID and password obtained under section 155D of the Customs Act, 1969 (IV of 1969). In Collectorates or Customs stations where the Pakistan Customs Computerized System is not operational, the Director Reforms and Automation or any other person authorized by the Collector in this behalf shall enter the requisite information in the Pakistan Customs Computerized System on daily basis, whereas entry of the data obtained from the customs stations which have not yet been computerized shall be made on weekly basis;

(f) That the equipment, imported under this serial number, shall not be re-

exported, sold or otherwise disposed of without prior approval of the Federal Board of Revenue (FBR). In case goods are sold or otherwise disposed of with prior approval of FBR the same shall be subject to payment of sales tax as may be prescribed by the FBR;

(g) in case the equipment, imported under this serial number, is sold or

otherwise disposed of without prior approval of the FBR in terms of condition (f), the same shall be subject to payment of statutory rates of sales tax as were applicable at the time of import;

(h) notwithstanding the condition (f) and (g), equipment imported under

this serial number may be surrendered at any time to the Collector of Customs having jurisdiction, without payment of any sales tax, for further disposal as may be prescribed by the FBR;




(i) The indemnity bond submitted in terms of condition (b) above shall stand discharged on submission of a certificate from the Regulatory Authority to the effect that the equipment has been installed or consumed in the said Project. In case the equipment is not consumed or installed in the project the indemnity bond shall be discharged on fulfillment of conditions stipulated at (f) or (g) or (h), as the case may be; and

(j) That violation of any of the above conditions shall render the goods

liable to payment of statutory rate of sales tax leviable on the date of clearance of goods in addition to any other penal action under relevant provisions of the law.

Explanation. For the purpose of this provisions, “equipment” shall mean machinery, apparatus, materials and all things to be provided under the contract for incorporation in the works relating to Lahore Orange Line Metro Train Project.

147. Goods supplied to German Development Agency (Deutsche Gesellschaft für Internationale Zusammenarbeit) GIZ

Respective Heading

148. Imported construction materials and goods imported by M/s China State Construction Engineering Corporation Limited (M/s CSCECL), whether or not locally manufactured, for construction of Karachi-Peshawar Motorway (Sukkur- Multan Section) subject to fulfilment of same conditions, limitations and restrictions as are specified under S. No. 145 of this table, provided that total incidence of exemptions of all duties and taxes in respect of construction materials and goods imported for the project shall not exceed ten thousand eight hundred ninety-eight million rupees including the benefit of exemption from duties and taxes availed before 30th June, 2018 under the provisions of The Sales Tax Act, 1990, the Customs Act, 1969,the Federal Excise Act, 2005 and the Income tax Ordinance, 2001 and notifications issued thereunder

Respective heading”;

149 Micro feeder equipment 8437.8000.’’,.

In Table-2 of Sixth Schedule, after the serial number 22, the following new serial numbers 23 and shall be

added, namely:

In Table-3 of Sixth Schedule, after the omitted serial number 16, the following new serial numbers and

shall be added, namely:

S. No. Description PCT Heading

“23. Match boxes Respective heading

S. No.

Description PCT Heading

Conditions

“17. Machinery, equipment, raw materials, components and other capital goods for use in building, fittings, repairing or refitting of ships, boats or floating structures imported by Karachi Shipyard and Engineering Works Limited.

Respective heading

Nil




REDUCE RATE OF SALES TAX

[EIGHTH SCHEDULE (TABLE-1)]

Different agricultural equipment and machinery including seeding or planting equipment, irrigation, drainage and agrochemical equipment, harvesting, threshing and storage equipment, post-harvest handling and processing & miscellaneous machinery was subject to sales tax at a rate of seven percent (7%). The Act reduce the rate to the existing seven percent (7% to five percent (5%). Furthermore, decrease of sales tax rate from 10% to 5% for natural gas (if supplied to fertilizer plants for use as feed stock in manufacturing of fertilizer) is approved. The extract of the approved eighth schedule to the Act is presented below;

Sr. No

Description Rate of Sales Tax Rate of Sales Tax

26. Tillage and seed bed preparation equipment: i. Rotavator

7% 5%

18. The following parts for assembling and manufacturing of personal computers and laptops:

If imported by manufacturers and assemblers of computers and laptops, registered with and certified by Engineering Development Board in accordance with quota determined by IOCO

(i) Bare PCBs 8534.0000 (ii) Power Amplifier 8542.3300 (iii) Microprocessor/ Controllers 85.42 (iv) Equipment for SMT Manufacturing 8486.2000 (v) Laptop batteries 8506.5000 (vi) Adopters 8504.4020 (vii) Cooling fans 8414.5190 (viii) Heat sink 7616.9920 (ix) Hard Disk SSD 8471.7020 (x) RAM/ROMS 8471.7060

and 8471.7090

(xi) System on Chip/FPGA-IC 85.42 (xii) LCD / LED Screen 8528.7211 (xiii) Motherboards 8534.0000 (xiv) power supply 84.73 (xv) Optical Drives 8471.7040 (xvi) External Ports 8536.2090 (xvii) Network cards 8517.6990 (xviii) Graphic cards 8471.5000 (xix) wireless cards 8517.6970 (xx) micro phone 8518.3000 (xxi) Trackpad 8471.6020

19. Plant and machinery, except the items listed under Chapter 87 of the Pakistan Customs Tariff, imported for setting up of a Special Economic Zone (SEZ) by zone developers and for installation in that zone by zone enterprises, on one-time basis as prescribed in the SEZ Act, 2012 and rules thereunder subject to such condition, limitations and restriction as a Federal Board of Revenue may impose from time to time.

9917(2) Nil”;




ii. Cultivator iii. Ridger iv. Sub soiler v. Rotary slasher

vi. Chisel plow vii. Ditcher

viii. Border disc ix. Disc harrow x. Bar harrow

xi. Mould board plow xii. Tractor rear or front blade

xiii. Land leveller or land planer xiv. Rotary tiller xv. Disc plow

xvi. Soil-scrapper xvii. K.R.Karundi

xviii. Tractor mounted trancher xix. Land leveller xx. Laser Land leveler

27. Seeding or planting equipment including

i. Seed-cum-fertilizer drill (wheat, rice barley, etc.)

ii. Cotton or maize planter with fertilizer attachment

iii. Potato planter iv. Fertilizer or manure spreader or broadcaster v. Rice transplanter

vi. Canola or sunflower drill vii. Sugarcane planter

7% 5%

28. Irrigation, drainage and agro-chemical application equipment:

i. Tubewells filters or strainers ii. Knapsack sprayers

iii. Granular applicator iv. Boom or field sprayers v. Self propelled sprayers

vi. Orchard sprayer

7% 5%

29. Harvesting, threshing and storage equipment: i. Wheat thresher

ii. Maize or groundnut thresher or sheller iii. Groundnut digger iv. Potato digger or harvester v. Sunflower thresher

vi. Post hole digger vii. Straw balers

viii. Fodder rake ix. Wheat or rice reaper x. Chaff or fodder cutter

7% 5%




xi. Cotton picker xii. Onion or garlic harvester

xiii. Sugar harvester xiv. Tractor trolley or forage wagon xv. Reaping machines

xvi. Combined harvesters xvii. Pruner/shears

30. Post-harvest handling and processing & miscellaneous machinery: i. Vegetables and fruits cleaning and sorting or

grading equipment ii. Fodder and feed cube maker equipment

7% 5%

43. Natural gas

10%

5%

Liquid Natural Gas (LNG), lithium iron phosphate batteries and various fertilizer related goods are taxed at reduced rates. The Finance Act 2018 approved, after the omitted serial no 49, following serials introduced;

S. No.

Description

Heading Nos. of the First Schedule to the Customs Act, 1969 (IV of 1969)

Rate of Sales Tax

Condition

“50. LNG/RLNG 2711.1100 12% Import thereof 51. RLNG 2711.2100 12% Supply thereof 52. Fertilizers (all types) Respective heading 2% Nil 53. The following

cinematographic equipment imported during the period commencing on the 1st day of July, 2018 and ending on the 30th day of June, 2023.

5% Subject to same limitations and conditions as are specified in Part-1 of Fifth Schedule to the Customs Act, 1969 for availing 3% concessionary rate of customs duty on the import of these equipment.”;

(i) Projector 9007.2000

(ii) Parts and accessories for projector

9007.9200

(iii) Other instruments and apparatus for cinema

9032.8990

(iv) Screen 9010.6000

(v) Cinematographic parts and accessories

9010.9000

(vi) 3D Glasses 9004.9000 (vii) Digital Loud Speakers

8518.2200

(viii) Digital Processor 8519.8190




(ix) Sub-woofer and Surround Speakers

8518.2990

(x) Amplifiers 8518.5000 (xi) Audio rack and termination board

7326.9090 8537.1090

(xii) Music Distribution System

8519.8990

(xiii) Seats 9401.7100 (xiv) Recliners 9401.7900 (xv) Wall Panels and metal profiles

7308.9090

(xvi) Step Lights 9405.4090 (xvii) Illuminated Signs 9405.6000 (xviii) Dry Walls 6809.1100 (xix) Ready Gips 3214.9090

54. lithium iron phosphate battery (Li-Fe-PO4)

8506.5000 12% Nil

55. Fish babies/seedlings Respective Headings

5% Nil

56. Potassium Chlorate (KCLO3)

Respective Headings

17% along with

rupees 40 per

kilogram

Import and supply thereof. Provided that rate of rupees 40 per kilogram shall not apply on imports made by and supplies made to organizations under the control of Ministry of Defence Production.

57 Rock phosphate Respective Headings

10% If imported by fertilizer manufacturers for use in the manufacturing of fertilizers.

To facilitate the process of transmission line projects being carried on under the Standard Implementation Agreement, the import and supply of the capital goods related to the Transmission Line Projects shall be charged at the reduced rate of ten percent (10%). For this purpose, in Table-2 of the Eighth Schedule to the Act, after serial number 8, new serial number 9 is introduced which is presented below:

S. No.

Description PCT

Heading Conditions

“9 Capital goods otherwise not exempted, for Transmission Line Projects.

Respective heading

The concession will be available in respect of those Transmission Line Projects which are being executed under Standard Implementation Agreement under Policy Framework for Private Sector Transmission Line Projects, 2015 and Projects Specific Transmission Services Agreement. Provided that sales tax charged under this provision shall be non-adjustable and non-refundable. “.

ISLAMABAD CAPITAL TERRITORY (TAX ON SERVICES) ORDINANCE, 2001

The scope of services taxable under the Islamabad Capital Territory (Tax on Services) Ordinance, 2001

is enhanced.




SECTION F. FEDERAL EXCISE ACT, 2005

The powers of the Federal Government to issue notifications under various sections of the Federal

Excise Act, 2005 are restored which are presently vested with the Board.

Concept of appeal effect order is introduced whereby Commissioner or the Officer Inland Revenue

shall be required to issue the order within one year from the year end of the financial year in

which the appellate order was served to the Commission or the Officer Inland Revenue.

The rate of duty on cement and tobacco are enhanced. Enhancement in rate of Federal Excise Duty on cement from Rs.1.25 per kg to Rs.1.50 per kg. Audit shall be conducted once in every three years.

Default surcharge is fixed at 12% per annum. Previously it was KIBOR plus 3% per annum.

Alternate Dispute resolution, ADRC shall only hear the case after the withdrawal of appeals filed


binding on both the parties.

Recovery of arrears of tax, Automatic stay in case where appeal is pending before the Commission

Inland Revenue (Appeals), is allowed on payment of 10% of the amount of tax due whereas the

previous condition was payment of 25% of the amount of tax due.

Mobile hand set levy introduced ranging from zero to five thousand rupees on smart phones.

Health levy on tobacco is introduced @10% per kg on every purchase including manufacturers of

cigarettes.




DUTIES SPECIFIED IN THE FIRST SCHEDULE TO BE LEVIED

[SECTION 3: SUB-SECTION 1 OF CLAUSE C]

Presently the clause (c) of sub –section (1) empowers board with the approval of Federal Minister-in-charge to specify such goods for the purpose of levy of excise duty as are produced or manufactured in the non-tariff areas and are brought to the tariff areas for sale or consumption therein. Now these powers are withdrawn from the Board and it will be vested with Federal Government

[SECTION 3: SUB-SECTION 4 AMENDED] Presently sub-section (4) of section 3 empowers Board with the approval of the Federal Minister-in-charge may levy and collect duty on any class or classes of goods or services by notification in the official Gazette at such higher or lower rate or rates as may be specified in such notification. Now these powers are withdrawn from the Board and it will be vested with Federal Government.

DEFAULT SURCHARGE

[SECTION 8] Presently in accordance with Section 8 Default surcharge is chargeable on Non-payment of FED, incorrect refund claim, adjustment or duty drawback @ KIBOR + 3 % Per annum. Finance Act 2018 amend default surcharge rate as 12 % Per annum of duty due, refund of duty or drawback.

ASSESSMENT GIVING EFFECT TO AN ORDER

[SECTION 14B] Finance Act 2018 has introduced a new section 14B after section 14A. This section is being introduced to

facilitate the taxpayers by removing unnecessary disputes in quantification of tax liability pursuant to

appeal order passed by Commissioner-IR (Appeals), Appellate Tribunal-IR, High Court or Supreme Court

of Pakistan.

The said section 14 B (1) states that if an assessment or amendment is to be made on the instructions of

any appellate authority then the Commissioner or an officer of inland revenue empowered in this behalf

shall issue the order within 1 year from the end of the financial year in which commissioner is served

with the appellate order.

Further sub section (2) provides that where direct relief is provided in an appellate order, the

Commissioner shall issue appeal effect order within 1 year of the date the commissioner is served with

the appellate order.

Provided that limitation under this sub-section shall not apply if an appeal or reference has been preferred

against the order passed by Appellate Tribunal or a High Court.

EXEMPTIONS

[SECTION 16]

Presently sub-section (2) of section 16 empowers Board with the approval of the Federal Minister-in-charge to grant exemptions. Now these powers are withdrawn from the Board and it will be vested with Federal Government.




APPOINTMENT OF FEDERAL EXCISE OFFICERS AND DELEGATION OF POWERS

[SECTION 29]

Through an amendment, the board is empowered to:

(i) specify the functions and jurisdiction of the Directorate General and its officers; and (ii) confer the powers of authorities specified in section 30 upon the Directorate General and its

officers;”

DEPOSIT, PENDING APPEAL, OF DUTY DEMANDED OR PENALTY LEVIED

[SECTION 37]

Presently provision stipulates that commissioner Inland Revenue or any officer of Inland Revenue subordinate to him shall not issue notice for recovery purpose, if taxpayer has filed an appeal under section 33 and 25% of said tax has been paid. Finance Act 2018 has reduced the condition of deposit of duty of 25% to 10%. ALTERNATIVE DISPUTE RESOLUTION

[SECTION 38]

The Finance Act 2018 has amend the existing provision of Act as under: 38. Alternative dispute resolution. (1) Notwithstanding any other provision of this Act, or the rules

made thereunder, an aggrieved person in connection with any dispute pertaining to:

(a) the liability of duty against the aggrieved person, or admissibility of refunds, as the case may be;

(b) the extent of waiver of default surcharge and penalty; or (c) any other specific relief required to resolve the dispute, may apply to the Board for the

appointment of a Committee for the resolution of any hardship or dispute mentioned in detail in the application, which is under litigation in any Court of Law or an Appellate Authority, except where criminal proceedings have been initiated or where interpretation of question of law is involved having effect on other cases.

(2)The Board may, after examination of the application of an aggrieved person, appoint a Committee, within sixty days of receipt of such application in the Board, comprising: (i) an officer of Inland Revenue not below the rank of a Commissioner; (ii) a person to be nominated by the taxpayer from a panel notified by the Board comprising:

a. senior chartered accountants and senior advocates having experience in the field of taxation; and

b. reputable businessmen as nominated by Chambers of Commerce and Industry; and (iii) a retired Judge not below the rank of District and Sessions Judge, to be nominated

through consensus by the members appointed under (i) and (ii) above.

(3) The aggrieved person, or the Commissioner, or both, as the case may be, shall withdraw the appeal pending before any Court of Law or an Appellate Authority, after constitution of the Committee by the Board under sub-section (2).

(4) The Committee shall not commence the proceedings under sub-section (5) unless the order

of withdrawal by the Court of Law or an Appellate Authority is communicated to the Board:




Provided that if the order of withdrawal is not communicated within seventy five days of the appointment of the Committee, the said Committee shall be dissolved and provisions of this section shall not apply.

(5) The Committee appointed under sub-section (2) shall examine the issue and may, if it deems necessary, conduct inquiry, seek expert opinion, direct any officer of the Inland Revenue or any other person to conduct an audit and shall decide the dispute by majority, within one hundred and twenty days of its appointment: Provided that in computing the aforesaid period of one hundred and twenty days, the period, if any, for communicating the order of withdrawal under sub-section (4) shall be excluded.

(6) The recovery of duty payable by a taxpayer in connection with any dispute for which a Committee has been appointed under sub-section (2) shall be deemed to have been stayed on withdrawal of appeal upto the date of decision by the Committee.

(7) The decision of the committee under sub-section (5) shall be binding on the Commissioner and the aggrieved person.

(8) If the Committee fails to decide within the period of one hundred and twenty days under sub-section (5), the Board shall dissolve the Committee by an order in writing and the matter shall be decided by the Court of Law or the Appellate Authority which issued the order of withdrawal under sub-section (4) and the appeal shall be treated to be pending before such a Court of Law or the Appellate Authority as if the appeal had never been withdrawn.

(9) The Board shall communicate the order of dissolution to the Court of Law or the Appellate Authority and the Commissioner.

(10) The aggrieved person, on receipt of the order of dissolution, shall communicate it to the Court of Law or the Appellate Authority which shall decide the appeal within six months of the communication of said order.

(11) The aggrieved person may make the payment of federal excise duty and other taxes as decided by the Committee under sub-section (5) and all decisions, orders and judgments made or passed shall stand modified to that extent.

(12) The Board may prescribe the amount to be paid as remuneration for the services of the members of the Committee, other than the member appointed under clause (i) of sub-section (2).

(13) The Board may, by notification in the official Gazette, make rules for carrying out the purposes of this section.

ACCESS TO RECORDS AND POSTING OF EXCISE STAFF, etc

[SECTION 45] Sub section (2) is amended and now Commissioner is empowered in the following manner: “Provided that if a commissioner on the basis of material evidence, has reason to believe that a registered person is involved in evasion of duty, he may, by recording the reason in writing, post an officer of inland




revenue to the premises of such registered person to monitor production, removal or sale of goods and the stocks position or maintenance of records.” AUDIT

[SECTION 46] Audit shall only be conducted once in every three years. There has been a general and genuine complaint

of taxpayers for repetitive selection for tax audits. A corrective measure has been approved whereby a

composite audit, covering Income Tax, Sales Tax and Federal Excise, shall be undertaken not more than

once in three years.

VALIDATION

[SECTION 47C]

Presently it comprises of only one subsection which is preceded by inserting another subsection (2) namely: Notwithstanding any omission, irregularity or deficiency in the establishment of or conferment of powers and functions on the Directorate General (Intelligence and Investigation), Inland Revenue and authorities specified in clause (a) of sub-section (2) of section 29 of this Act, all orders passed, notices issued and actions taken in exercise or purported exercise of the powers and functions of the Officers of Inland Revenue under this Act by the Director General (Intelligence and Investigation), Inland Revenue or the authorities specified in clause (a) of sub-section (2) of section 29 of this Act shall be treated to have been validly passed, issued and taken under this Act.”; HEALTH LEVY ON TOBACCO: The Finance Act 2018 collect Health Levy from every person purchasing tobacco including manufacturers of cigarettes at the rate of ten rupees per kilogram of tobacco by Pakistan Tobacco Board or its contractors,

at the time of collecting Cess on tobacco, directly or indirectly.

Previously Existing Approved Sr.

Description of goods

PCT Code

Rate of FED

Sr.


PCT Code

Rate of FED

Locally Produced Cigarettes if their on pack printed retail price exceeds Rs. 4,500 per 1,000 cigarettes.

Rs. 3,740 per 1,000 Cigarettes

Locally Produced Cigarettes if their on pack printed retail price exceeds Rs. 4,500 per 1,000 cigarettes.


9 24.02 9 24.02




Previously Existing Approved

Sr. Description of goods

PCT Code

Rate of FED Sr.


PCT Code

Rate of FED

Locally Produced Cigarettes if their on pack printed retail price exceeds Rs. 2,925 per 1,000 cigarettes but does not exceeds Rs. 4,500 per 1,000 cigarettes.


Locally Produced Cigarettes if their on pack printed retail price exceeds Rs. 2,925 per 1,000 cigarettes but does not exceeds Rs. 4,500 per 1,000 cigarettes.


10 24.02 10 24.02

Locally Produced Cigarettes if their on pack printed retail price does not exceed Rs. 2,925 per 1,000 cigarettes

Rs. 800 per 1,000 Cigarettes

Locally Produced Cigarettes if their on pack printed retail price does not exceed Rs. 2,925 per 1,000 cigarettes

Rs. 800 per 1,000 Cigarettes

10a 24.02

10a 24.02

FED ON CEMENT:

Federal Excise Duty on cement is being increased from Rs 1.25 per kg to Rs 1.50 per kg

Previous Existing Approved

Sr.


PCT Code

Rate of FED

Sr.


PCT Code

Rate of FED

Portland cement, aluminous cement, slag cement, supersulphate cement and similar hydraulic cements, whether or not colored or in the form of clinkers\

Rs. 1.25 per Kg

Portland cement, aluminous cement, slag cement, supersulphate cement and similar hydraulic cements, whether or not colored or in the form of clinkers\

Rs. 1.50 per Kg

13 25.23 13 25.23




MOBILE HANDSET LEVY:

There shall be levied a mobile handset levy on smart phones on different categories viz:

Sr. Category of smart phone Rate of levy per set in rupees

1 When import value of handset (including duties and taxes) does not exceed 10,000/-

Nil

2 When import value of handset (including duties and taxes) exceeds Rs. 10,000/- but does not exceed Rs. 40,000/-

1,000

3 When import value of handset (including duties and taxes) exceeds Rs. 40,000/- but does not exceed Rs. 80,000/-

3,000

4 When import value of handset (including duties and taxes) exceeds Rs. 80,000/-

5,000

FEDERAL EXCISE ACT SCHEDULE-SUMMARIES

SUMMARY OF THIRD SCHEDULE

TABLE-1

S.NO Description of Goods Tariff Headings 22.Newly Inserted

Equipment, whether or not locally manufactured, imported by M/s China Railway Corporation to be furnished and installed in Lahore Orange Line Metro Train Project subject to the following conditions: (a) that the equipment imported under this serial number shall only be used in the aforesaid Project; (b) that the importer shall furnish an indemnity bond, in the prescribed manner and format as set out in Annex-A to this serial number, at the time of import to the extent of sales tax exempted under this serial number on consignment to consignment basis; (c) that the Punjab Mass Transit Authority, established under the Punjab Mass Transit Authority Act, 2015 (ACT XXXIII of 2015), hereinafter referred as the Regulatory Authority, shall certify in the prescribed manner and format as set out in Annex-B to this serial number that the imported equipment is bona fide requirement of the Project under the Contract No. PMA-CR-NORINCO-OL, dated 20.04.2015, hereafter referred as the contract, signed between the Regulatory Authority and CR-NORINCO; (d) in the event a dispute arises whether any item is entitled to exemption under this serial number, the item shall be immediately released by the Customs Department against a corporate guarantee, valid for a period of six months, submitted by the importer. A certificate from the Regulatory Authority duly verified




by the Transport and Communication Section of the Ministry of Planning, Development and Reform, that the item is covered under this serial number shall be given due consideration by the Customs Department towards finally resolving the dispute. (e) for the clearance of imported equipment through Pakistan Customs Computerized System the authorized officer of the Regulatory Authority shall furnish all relevant information, as set out in Annex-B to this serial number, online against a specific user ID and password obtained under section 155D of the Customs Act, 1969 (IV of 1969). In Collectorates or Customs stations where the Pakistan Customs Computerized System is not operational, the Director Reforms and Automation or any other person authorized by the Collector in this behalf shall enter the requisite information in the Pakistan Customs Computerized System on daily basis, whereas entry of the data obtained from the customs stations which have not yet been computerized shall be made on weekly basis; (f) that the equipment, imported under this Notification, shall not be re-exported, sold or otherwise disposed of without prior approval of the Federal Board of Revenue (FBR). In case goods are sold or otherwise disposed of with prior approval of FBR the same shall be subject to payment of sales tax as may be prescribed by the FBR; (g) in case the equipment, imported under this serial number, is sold or otherwise disposed of without prior approval of the FBR in terms of condition (f), the same shall be subject to payment of statutory rates of sales tax as were applicable at the time of import; (h) notwithstanding the condition (f) and (g), equipment imported under this serial number may be surrendered at any time to the Collector of Customs having jurisdiction, without payment of any sales tax, for further disposal as may be prescribed by the FBR; (i) the indemnity bond submitted in terms of condition (b) above shall stand discharged on submission of a certificate from the Regulatory Authority to the effect that the equipment has been installed or consumed in the said Project. In case the equipment is not consumed or installed in the project the indemnity bond shall be discharged on fulfillment of conditions stipulated at (f) or (g) or (h), as the case may be; and (j) that violation of any of the above conditions shall render the goods liable to payment of statutory rate of sales tax leviable on the date of clearance of goods in addition to any other penal action under relevant provisions of the law. Explanation. For the purpose of this provisions, “equipment” shall mean machinery, apparatus, materials and all things to be provided under the




contract for incorporation in the works relating to Lahore Orange Line Metro Train Project.

23. New inserted

Imported construction materials and goods imported by M/s China State Construction Engineering Corporation Limited (M/s CSCECL), whether or not locally manufactured, for construction of Karachi Peshawar Motorway (Sukkur-Multan Section) subject to fulfilment of same conditions, limitations and restrictions as are specified under S. No. 145 of Table-1 of Sixth Schedule to the Sales Tax Act, 1990, provided that total incidence of exemptions of all duties and taxes in respect of construction materials and goods imported for the project shall not exceed ten thousand eight hundred ninety-eight million rupees.

Respective Headings

TABLE-2

Exemption from federal excise duty on commission paid by State Bank of Pakistan and its subsidiaries to banking companies for handling banking services of Federal or Provincial Governments. Surprisingly such exemption is not mentioned in Finance Act 2018. It means that this exemption will be notified through a separate SRO later.




SECTION G. CUSTOMS ACT, 1969 Salient Features

Additional custom duty is increased from 1% to 2%.

Powers of the Federal Government to issue notifications under customs law and regulations are

restored.

The Chief Collector is now empowered to take over imported goods.

Import of duty-free paper for printing Holy-Quran allowed.

Custom Duty on electric vehicle kits reduced from 50% to 10%. Exempted import of solar panels

from the condition of 'local manufacturing' extended till 30th June, 2019. Levy of RD @ Rs.175/set

on CKD/SKD kits of mobile phones.

Custom Duty on raw materials and inputs reduced for promotion of exports.

Custom Duty on Multi-ply and Aluminum foil reduced from 20% to 18% for Liquid Food

Packaging Industry.

Exemption of 5% Custom Duty on specified LED parts and components for manufacturers of LED

lights and Levy of 2% RD on LED bulb & Tubes, Energy Saving Bulbs & Tube to protect local

industry.

Custom Duty on finished rooms reduced from 20% to 10% for setting up new hotels/motels.

Concessionary import of vintage cars and jeeps at fix duty/taxes of US$ 5,000 allowed. For Electric

Vehicles, Custom Duty is proposed to be reduced from 50% to 25% and 15% RD exempted.

Custom Duty on Optical fiber, Cable filling compound, Polybutylene, Fiber reinforced plastic and

Water blocking/swellable tape reduced to 5% along with reduced RD on Optical Fiber Cables from

20% to 10%.

Custom Duty on specified equipment used in cinemas reduced to 3%.

Exemption of 16% Custom Duty on charging stations for electric vehicles.

Reduction of concessionary rate of Custom Duty from 10% to 5% on silicon electrical steel sheets

for manufacturing transformers.




1. Increase of additional Customs Duty

Additional Custom duty rate is increased from 1% to 2%

2. Printing and Preservation of Holy Quran

Considering the importance of Holy Quran, Finance Act 2018 standardize printing and preservation of Holy Quran, import of duty free paper weighing 60 g/m2 is allowed besides extending this facility to Nashir-e-Quran registered with the government.

3. Dairy Sector and Animal Feed

To support dairy sector, Custom Duty exempted on bovine semen, and preparations for making animal feed reduced from 10% to 5% and import of fans for corporate dairy farmers allowed at concessionary rate of 3%.

4. Local Manufacturing of Optical Fiber Cables

To encourage local manufacturing of Optical Fiber Cables, Custom Duty on input materials i.e.,

Optical fiber (20%), Cable filing compound (11%), Polybutylene (20%), Fiber reinforced plastic

(20%) and Water blocking/ swellable tape (11%) reduced to 5% besides reduction of RD on

Optical Fiber Cables from 20% to 10%.

5. Power to use data exchange information for determination of customs value [25AA]

The Finance Act 2018 has inserted a new section “25AA” after section 25A, which states that “Any information or data, available under clause (b) of sub-section (1) of section 219A, may be utilized for the purpose of assessment including valuation”.

6. False statement, error, etc.

[32]

Coercive measures will not be initiated in case full amount of short paid duty, taxes or other charges are paid voluntarily prior to initiation of audit inquiry or investigation.

7. Refund to be claimed within one year

[33]

The Finance Act 2018 has inserted a new sub-section “3A” after sub-section (3) namely:

The claim filed under this section shall be disposed of within a period not exceeding one hundred and twenty days from the date of filing of such claim: Provided that the said period may, for reasons to be recorded in writing, be extended by the Collector of Customs for a period not exceeding ninety days.

8. Provisional release of imported goods

[83B]

The Finance Act 2018 added a new section after section 83 which states that:




Where any offence is detected in respect of imported goods which are not liable to confiscation or needed for evidence at a later stage, the Collector of Customs may, on written request of owner of the goods, allow release of 5 the same on payment of duty, taxes or other charges and furnishing bank guarantee or pay order against the amount of any penalty or fine which may be imposed on such goods.

9. Appeals to Collector (Appeals)

Finance Act 2018 has introduced a new section 193A (3) which states that:

(2A) The Collector (Appeals) may, for a period not exceeding thirty days, stay recovery of duty and taxes on filing of appeal and after affording opportunity of being heard to the officer of the concerned Collectorate or Directorate.

10. Authorized economic operator program

The Finance Act has inserted a section 212A whereby the Federal Government may, by notification in the official Gazette, devise authorized economic operator programme to provide facilitations relating to secure supply chains of imported and exported goods through simplified procedures with regard to regulatory controls applicable thereon. The Board may, with approval of the Federal Government, prescribe rules on matters pertaining to authorized economic operator programme.

11. Savings

Through Finance Act, following new sub-section has been inserted after sub-section (1) in section 221A, namely;

Notwithstanding any order or judgment of any court, a High Court and the Supreme Court, the regulatory duty already levied, collected and realized in exercise of any powers under this Act, before the commencement of the Finance Act, 2018 and after the commencement of the Finance Act, 2017, shall be deemed to have been validly levied, collected and realized under this Act, in exercise of the powers conferred on the commencement of the Finance Act, 2018, and where any such regulatory duty has not been levied, collected or realized, the same shall be recoverable in accordance with the provisions of this Act.




REDUCTION IN CUSTOMS DUTY

Following changes has been made in the duty structure of items discussed herein:

Items Rate

Old New

Multi-ply and Aluminum foil for Liquid Food Packaging Industry. 20 18

Finished rooms (Pre-fabricated structures) for setting up of new hotels/motels. 20 10

Growth promoters premix, vitamin premix, Vitamin B12 and Vitamin H2 for poultry sector 10 5

Acetic Acid from 20 16

Plasters 16 11

Film of ethylene from for Liquid Food Packaging industry 20 16

Carbon Black (rubber grade) 20 16

Concessionary rate for silicon electrical steel sheets for manufacturing transformers 10 5

Coils of aluminium alloys used in manufacturing of aluminium beverage cans 16 8

Import of coal, across the Board, 5 3

Import of Fire fighting vehicles 30 10

Electric Vehicles 50 25

Medium Density Fiber 16 11

Corrective glasses 11 3

Lithium iron phosphate battery 11 8

preparations for making animal feed 10 5

Optical fiber 20 5

Cable filing compound 11 5

Polybutylene 20 5

Fiber reinforced plastic 20 5

Water blocking/ swellable tape 11 5

Import of fans for corporate dairy farmers allowed at concessionary rate of 3%.

CD on specified equipment used in cinema industry reduced to 3%.

Concessionary import of vintage or classic cars and jeeps at fix duty/taxes of US$ 5,000.

TARIFF RATIONALIZATION

New PCT codes created for Radial tyres, CKD/SKD kits for home appliances, CKD / SKD of Mobile Phone,

Semi-automatic washing machines, Petrol Generating sets, Kerosene based mineral oils, Relays, Fuses,

Gear pumps and Turbo chargers for vehicles, Electric conductors, Light fittings with fixed/fitted

LED/SMD, , Refrigerated out door cabinet designed for insertion of electric and electronic apparatus,

Digital/Processed Printing Inks, DOTP (Di-Octyl Terephthalate) and Pigments and preparations based

thereon.

INCREASE IN CUSTOMS DUTY

Customs duty is increased in following cases:




- Double-sided tape from 3% to 11%. - Soya bean oil from Rs. 9050/MT & Rs.10200/MT to RS.12000/MT and RS. 13200/MT

respectively.

- Aluminum auto parts scrap from 30% to 35%

- Di-octyl Terephthalate (DOTP) from 3% to 20%. - Additional customs duty from 1% to 2% - To protect domestic manufacturers, rickshaw tyres from 11% to 20%.

EXEMPTION FROM CUSTOMS DUTY

Exemption from customs duty is granted on following items:

- CD exempted on bovine semen

- 3 % CD on Micro Feeder Equipment used for food fortification

- 5% CD on Tasigna (an anti-cancer medicine)

- 16% CD on Charging stations for electric vehicles

- 5% CD on Specified LED parts and components for manufacturers of LED lights

- 3% CD on Tanned hides in wet state.

- Exemption regarding import of solar panels from the condition of local manufacturing is further

extended till 30 June 2019.

WITHDRAWALS IN CUSTOMS DUTY

Withdrawal from customs duty is granted on following items:

- 11% CD on acrylic tow.

- Withdrawal of CD on two catalysts for use by PTA industry i.e. Hydrogen Bromide (11%) and

Palladium-on-carbon (3%)

- For promotion of exports, CD on raw materials / inputs (104 PCTs) withdrawn and (28 PCTs)

reduced.

LEVY / INCREASE OF REGULATORY DUTY

Regulatory duty is increased as under:

- 2% on LED bulb & Tubes, Energy Saving Bulbs & Tube to protect local industry.

- 5% on Medium Density Fiber.

REDUCTION IN REGULATORY DUTY

Regulatory duty is reduced as under:

- 20% to 10% on Optical Fiber Cables.

EXEMPTION FROM REGULATORY DUTY

Exemption from regulatory duty is granted on following items:

- 15% on Electric Vehicles

REVIEW OF REGULATORY DUTY

- Levy of 30% RD on export of waste & scrap of copper.

- Review of RD on non-essential and luxury items.

- 10% RD levied on CKD/SKD kits of specified Home Appliance




- Levy of RD @ Rs.175/set on CKD/SKD kits of mobile phone

In the First Schedule, in the Table, in column (1), the following amendments shall be made, namely:-

(a) Before PCT code “04.07”, the following new PCT codes and the entries relating thereto in

column (1), (2), (3) and (4), shall be inserted, namely:-

“03.04 Fish fillets and other fish meat (whether or not minced), fresh, chilled or frozen.

- Fresh or chilled fillets of tilapias (Oreochromis spp.), catfish (Pangasius spp., Silurus spp., Clarias spp., Ictalurus spp.), carp (Cyprinus spp., Carassius spp., Ctenopharyngodonidellus, Hypophthalmichthys spp., Cirrhinus spp., Mylopharyngodonpiceus, Catlacatla, Labeo spp., Osteochilushasselti, Leptobarbushoeveni, Megalobrama spp.), eels (Anguilla spp.), Nile perch (Latesniloticus) and snakeheads (Channa spp.):

0304.3100 Tilapias (Oreochromis spp.) 20

0304.3200 Catfish (Pangasius spp., Silurus spp., Clarias spp., Ictalurus spp.) 20

0304.3300 Nile perch (Latesniloticus) 20

0304.3900 Other 20 Fresh or chilled fillets of other fish:

0304.4100 Pacific salmon (Oncorhynchusnerka, Oncorhynchusgorbuscha, Oncorhynchusketa, Oncorhynchustschawytscha, Oncorhynchuskisutch, Oncorhynchusmasou and Oncorhynchusrhodurus), Atlantic salmon (Salmosalar) and Danube salmon (Huchohucho)

20

0304.4200 Trout (Salmotrutta, Oncorhynchusmykiss, Oncorhynchusclarki, Oncorhynchusaguabonita, Oncorhynchusgilae, Oncorhynchus apache and Oncorhynchuschrysogaster)

20

0304.4300 Flat fish (Pleuronectidae, Bothidae, Cynoglossidae, Soleidae, Scophthalmidaeand Citharidae)

20

0304.4400 Fish of the families Bregmacerotidae, Euclichthyidae, Gadidae, Macrouridae, Melanonidae, MoridaeandMuraenolepididae

20

0304.4500 Swordfish (Xiphiasgladius) 20

0304.4600 Toothfish (Dissostichus spp.) 20

0304.4700 Dogfish and other sharks 20

0304.4800 Rays and skates (Rajidae) 20

0304.4900 Other 20

Other, fresh or chilled:

0304.5100 Tilapias (Oreochromis spp.), catfish (Pangasius spp., Silurus spp., Clarias spp., Ictalurus spp.), carp (Cyprinus spp., Carassius spp., Ctenopharyngodonidellus,Hypophthalmichthys spp., Cirrhinus spp., Mylopharyngodonpiceus, Catlacatla, Labeo spp., Osteochilushasselti, Leptobarbushoeveni, Megalobrama spp.), eels (Anguilla spp.), Nile perch (Latesniloticus) and snakeheads (Channa spp.)

20




0304.5200 Salmonidae 20

0304.5300 Fish of the families Bregmacerotidae, Euclichthyidae, Gadidae, Macrouridae, elanonidae, Merlucciidae, MoridaeandMuraenolepididae

20

0304.5400 Swordfish (Xiphiasgladius) 20

0304.5500 Toothfish (Dissostichus spp.) 20

0304.5600 Dogfish and other sharks 20

0304.5700 Rays and skates (Rajidae) 20

0304.5900 Other 20

Frozen fillets of tilapias (Oreochromis spp.), catfish (Pangasius spp., Silurus spp., Clarias spp., Ictalurus spp.), carp (Cyprinus spp., Carassius spp., Ctenopharyngodonidellus, Hypophthalmichthys spp., Cirrhinusspp., Mylopharyngodonpiceus,Catlacatla, Labeo spp., Osteochilushasselti, Leptobarbushoeveni, Megalobrama spp.), eels (Anguilla spp.), Nile perch (Latesniloticus) and snakeheads (Channa spp.):

0304.6100 Tilapias (Oreochromis spp.) 20 0304.6200 Catfish (Pangasius spp., Silurus spp., Clarias spp., Ictalurus spp.) 20

0304.6300 Nile perch (Latesniloticus) 20 0304.6900 Other 20

Frozen fillets of fish of the families Bregmacerotidae, Euclichthyidae, Gadidae, Macrouridae, Melanonidae, Merlucciidae, Moridae and Muraenolepididae:

0304.7100 Cod (Gadusmorhua, Gadusogac, Gadusmacrocephalus) 20

0304.7200 Haddock (Melanogrammusaeglefinus) 20 0304.7300 Coalfish (Pollachiusvirens) 20 0304.7400 Hake (Merluccius spp., Urophycis spp.) 20 0304.7500 Alaska Pollack (Theragrachalcogramma) 20 0304.7900 Other 20

Frozen fillets of other fish:

0304.8100 Pacific salmon (Oncorhynchusnerka, Oncorhynchusgorbuscha, Oncorhynchusketa, Oncorhynchustschawytscha, Oncorhynchuskisutch, Oncorhynchusmasou and Oncorhynchusrhodurus), Atlantic salmon (Salmosalar) and Danube salmon (Huchohucho)

20

0304.8200 Trout (Salmotrutta, Oncorhynchusmykiss, Oncorhynchusclarki, Oncorhynchusaguabonita, Oncorhynchusgilae, Oncorhynchus apache andOncorhynchuschrysogaster)

20

0304.8300 Flat fish (Pleuronectidae, Bothidae, Cynoglossidae, Soleidae, ScophthalmidaeandCitharidae)

20

0304.8400 Swordfish (Xiphiasgladius) 20 0304.8500 Toothfish (Dissostichus spp.) 20 0304.8600 Herrings (Clupeaharengus, Clupeapallasii) 20

0304.8700 Tunas (of the genus Thunnus) skipjack or stripe-bellied bonito (Euthynnus (Katsuwonus) pelamis)

20

0304.8800 Dogfish, other sharks, rays and skates (Rajidae) 20 0304.8900 Other 20




Other, frozen: 0304.9100 Swordfish (Xiphiasgladius) 20 0304.9200 Toothfish (Dissostichus spp.) 20 0304.9300 Tilapias (Oreochromis spp.), catfish (Pangasius spp., Silurus spp.,

Clarias spp., Ictalurus spp.), carp (Cyprinus spp., Carassius spp., Ctenopharyngodonidellus,Hypophthalmichthys spp., Cirrhinus spp., Mylopharyngodonpiceus, Catlacatla, Labeo spp., Osteochilushasselti, Leptobarbushoeveni, Megalobrama spp.), eels (Anguilla spp.), Nile perch (Latesniloticus) and snakeheads (Channa spp.)

20

0304.9400 Alaska Pollack (Theragrachalcogramma) 20 0304.9500 Fish of the families Bregmacerotidae, Euclichthyidae, Gadidae,

Macrouridae, Melanonidae,Merlucciidae, MoridaeandMuraenolepididae, other than Alaska Pollack (Theragrachalcogramma)

20

0304.9600 Dogfish and other sharks 20 0304.9700 Rays and skates (Rajidae) 20 0304.9900 Other 20”;

(b) against PCT Code “1507.1000”, in column (4), for the figure “12,000”, the figure “10,550”

shall be substituted;

(c) against PCT Code “1507.9000”, in column (4), for the figure “13,200”, the figure “11,700” shall be substituted;

(d) after PCT code “2520.1010”, the following new PCT code and the entries relating thereto

in columns (1), (2), (3) and (4), shall be inserted, namely:-

“2520.1020 Anhydrite 3”;

(e) for the PCT Code “2710.1919” and the entries relating thereto in columns (1), (2),(3) and

4, the following shall be substituted, namely:

“2710.1919 Other 20”;

(f) after PCT code “2915.2100”, the following new PCT codes and the entries relating thereto

in columns (1), (2), (3) and (4), shall be inserted, namely:

“2915.3600 Dinoseb (ISO) acetate 16

2915.3940 Methyl acetate 16”;

(g) after PCT code “3204.2000”, the following new PCT code and the entries relating thereto


“3206.4930 Pigmentsand preparations based on hexacyanoferrates (ferrocyanides and ferricyanides)

11”;

(h) for the PCT Code “3919.1010” and the entries relating thereto in columns (1), (2),(3) and

(4), the following new PCT codes and the entries relating thereto in columns (1), (2),(3) and (4), shall be substituted, namely:




“3403.1120 Of a kind used in the paper or like industries 16

3403.1139 Other 16

3403.1190 Other 16

3403.9120 Of a kind used in the paper or like industries 16

3403.9139 Other 16

3403.9190 Other 16

3824.4000 Prepared additives for cements, mortars or concretes 16

3824.6000 Sorbitol other than that of subheading No. 2905.44 16

3904.2100 Non-plasticised 16

3905.1900 Other 16

3906.9010 Cyanoacrylate 16

3906.9020 Acrylic binders 16

3919.1010 Double sided tape 11

3920.7100 Of regenerated cellulose 16

3920.7300 Of cellulose acetate 16

3920.9100 Of poly(vinyl butyral) 16 3920.9200 Of polyamides 16

3920.9300 Of amino resins 16”;

(i) after PCT code“4818.9000”, the following new PCT codes and the entries relating thereto


“5204.1100 Containing 85 % or more by weight of cotton 16

5204.1900 Other 16

5204.2010 For sewing 16

5204.2090 Other 16”;

(j) after PCT code“5309.2900”, the following new PCT codes and the entries relating thereto

in columns (1), (2), (3) and (4), shall be inserted, namely:- “5901.1000 - Textile fabrics coated with gum or amylaceous

substances, of a kind used for the outer covers of books or the like

16

5901.9090 Other 16

5904.9000 Other 16

5906.9100 Knitted or crocheted 16 5906.9900 Other 16

5907.0000 Textile fabrics otherwise impregnated, coated or covered; painted canvas being theatrical scenery, studio back- cloths or the like.

16

6006.1000 Of wool or fine animal hair 16

6006.2110 Unbleached 16




6006.2120 Bleached 16

6006.2200 Dyed 16

6006.2300 Of yarns of different colours 16

6006.2400 Printed 16


6006.3120 Bleached 16

6006.3200 Dyed 16


6006.3400 Printed 16


6006.4120 Bleached 16

6006.4200 Dyed 16


6006.4400 Printed 16

6006.9090 Other 16’’:

(k) against PCT Code “7602.0010”, in column (4), for the figure “35”, the figure “30” shall be

substituted;

(l) for PCT Code “8415.9091”, the following PCT code and the entries relating thereto in columns (1), (2), (3) and (4) shall be substituted, namely:-

“8415.9091 For use with air conditioning machines of PCT headings 8415.2010 and 8415.2090

35”: and

(m) for the PCT Codes “8418.1110, 8418.1190, 8418.1910 and 8418.1990”, the PCT codes

8419.1110, 8419.1190, 8419.1910 and 8419.1990”, shall be substituted;

(n) after PCT code“9405.9900”, the following new PCT code and the entries relating thereto in column (1), (2), (3) and (4), shall be inserted, namely:

“9606.1000 Press- fasteners, snap- fasteners and press- studs and parts therefor

16

9606.2200 Of base metal, not covered with textile material 16

9606.2920 Buttons 16

9606.2990 Other 16

9606.3010 Button moulds and other parts of buttons 16

9607.2000 Parts 16”; and

10. in the Second Schedule, in the FIFTH SCHEDULE to the Customs Act, 1969 (IV of 1969), the following amendments shall be made, namely:

(a) in Part-I, in the Table, against serial number 33 in column(1), in column (2), for the expression “Fire-fighting vehicles”, the expression “New Fire-fighting vehicles manufactured as such by OEMs” shall be substituted;




(b) in Part-III, after serial number 30, in column (1), the following new serial number and the entries relating thereto in columns (1), (2), (3), (4) and (5) shall be inserted and the existing S. Nos. from 31 to 107 shall be renumbered as S.Nos. 32 to 110 :

“31 Unground 2510.1000 0% If imported by the Phosphatic Fertilizer Industry, notified by the Ministry of Industries.”; and

(c) in Part-VII

(i) in Table-A, in column (1), for serial number 57 and the entries relating thereto in columns (2),(3) and (4), the following shall be substituted, namely:-

“57 Other jet fuels 2710.1914 0”; and

(ii) in Table-B, in column (1), after serial number 21,the following new serial number

and the entries relating thereto in columns (1), (2), (3), (4) and (5) shall be inserted and the existing S. Nos. from 22 to 35 shall be renumbered as S.Nos. 29 to 42:-

“22 Of a kind used in motor cars of heading 87.03 and vehicles of sub-headings 8703.2113, 8703.2193, 8703.2195, 8703.2240, 8703.2323, 8703.3223, 8704.2190, 8704.3130, 8704.3190 (cut to size and shaped)

5703.2020 15 Nil

23 Other for motor cars and vehicles 5703.2030 15 Nil 24 Other 5703.2090 15 Nil 25 Of a kind used in vehicles of heading

87.03 and vehicles of sub-headings 8703.2113, 8703.2193, 8703.2195, 8703.2240, 8703.2323, 8703.3223, 8704.2190, 8704.3130, 8704.3190 (cut to size and shaped)

5703.3020 15 Nil

26 Other for motor cars and vehicles 5703.3030 15 Nil 27 Other 5703.3090 15 Nil 28 Tiles, having a maximum surface area

of 0.3 m2 5704.1000 15 Nil”.”




SECTION H. TAX REFORMS PACKAGE The Tax Reforms Package was introduced by Federal Government on April 08, 2018. The measures of this

Tax Reforms Package have now been incorporated in four Act. The summary of these Act is as follows:

1) VOLUNTARY DECLARATION OF DOMESTIC ASSETS ACT 2018

Under this Act, every company, Association of Persons and all citizens of Pakistan wherever they may be,

except for, the public office holders as defined in the Act, their spouses and dependent children, can make

declaration for undisclosed income and domestic assets except the assets against which any criminal

proceedings are pending in any court of law. The local assets declared shall be charged at the following

rates:

SR # Assets Rate

1 Foreign currency held in foreign currency accounts in Pakistan as on march 31, 2018 and en-cashed in equivalent Pak Rupees

2%

2

Foreign currency held in foreign currency account in Pakistan as on march 31, 2018 which is invested in government securities for 5 years in us dollar denominated bonds with 6 monthly profit payments in equivalent rupees (rate of return being 3% per annum) and payable at maturity in equivalent rupees.

2%

3 All other assets 5%

The declaration should be made after April 10, 2018 but on or before June 30, 2018.

2) FOREIGN ASSETS (DECLATATION AND REPATRIATION) ACT 2018

Under this Act, all citizens of Pakistan wherever they may be, except for, holders of public office as defined

in the Ordinance, their spouses and dependent children, may declare their foreign assets except where

criminal proceedings are pending in any court of law in respect of such assets. Foreign assets declared

under this Act shall be chargeable to tax at the following rates:

SR # Assets Rate 1 Liquid assets not repatriated 5% 2 Immovable assets outside Pakistan 3%

3 Liquid assets repatriated and invested in Government securities for 5 years in US dollars denominated bonds with 6 monthly profit payments in equivalent Rupees (rate of return 3% per annum) and payable at maturity in equivalent Rupees

2%

4 Liquid assets repatriated 2%

The declaration and repatriation should be made after April 10, 2018 but on or before June 30, 2018.

3) INCOME TAX (AMENDMENT) ACT 2018

Major highlights of amendments are as under:

• Foreign remittance exceeding Rs. 10 Million during one tax year will be subject to tax.

• New section (116 A) inserted which requires that every resident taxpayer having foreign income equal

to or in excess of US$ 10,000 or having foreign assets with a value of US$ 100,000 or above to furnish




an annual statement. Failure to file the said statement will result in a penalty @ 2% of value of foreign

income or asset.

• Tax exemption limits of annual income is as under:

o Individual Annual income is exempt up to 1.2 M

o AOP Annual income is exempt up to 0.4 M

4) ECONOMIC REFORMS (AMENDMENT) ACT 2018

Under this act, no cash shall be allowed to be deposited in foreign currency account of a citizen of Pakistan

resident in Pakistan unless the account holder is a filer as defined in the Income Tax Ordinance, 2001. This

provision is applicable from April 08, 2018.




PARTNERS

MUHAMMAD MAQBOOL, FCA

Fellow member of Institute of Chartered Accountants England

& Wales, Canada and Pakistan. He also graduated as Master of

Commerce from University of Punjab in 1979. He has been

senior partner in Qamar-ul-Islam & Co., and Sadat Hyder

Qamar & Company (Chartered Accountants)

He is Senior Partner of MHSSCO.

Professional Experience and Achievements:

He has 22 years’ accountancy experience in the field of Financial Consultancy, System Consultancy, Audit,

Corporate and Taxation matters. He has rich experience of handling a large number of national and

international consultancy assignments.

Presently, he is council member of ICAP. He was Vice Present of ICAP. He was Past President of Association

of Pakistan Institute of Public and Finance Accountants (1995), Chairman Education and Training

Committee of ICAP (1994-96) and represented ICAP on International forums.

MALIK HAROON AHMAD, FCA

Fellow Member of Institute of Chartered Accountants of

Pakistan. He graduated as Bachelor of Commerce from

University of Punjab in 1994. He worked in the capacity of

Senior Manager–Tax Ford Rhodes Sidat Hyder & Company

(Chartered Accountants), a member firm of Ernst & Young

International, one of the big accountancy firms in the world.


He has 24 years’ experience in the field of consultancy especially Taxation matters, Audit and Corporate.

During his service, he gained diversified experience of corporate tax planning, counseling and benefit

optimization, Handling matters relating to Capital Value tax, Provincial Professional Tax, Corporate Asset

Tax. He supervising a large team of employees (around 200+) working in the fields of Corporate

Compliance Services, Internal Control development and Re Engineering Services, Audit & Assurance,

Accountancy assignments.

He is also Life time member of Lahore Tax Bar Association. He is a writer of three books published by the

Professional Business Publications [PBP], Emile Wolf International United Kingdom. He is writer of

Articles on different issues in the Newspapers and Magazines. He is also interviewed as tax expert in TV

shows on different taxation issues.




SHAHID MEHMOOD SHAKER, FCA

Fellow Member of Institute of Chartered Accountants of Pakistan. He

qualified as Chartered Accountant in June 2003. He also qualified his

MBA in finance in the year 1999. He worked as a partner in Qadeer and

Company, Chartered Accountants (from February 2005 – September

2009) and also worked as CFO in Ayesha Textile Mills Limited (from

September 2002- February 2005).


He has 15 years’ experience in the field of consultancy especially Audit, System development and System

Evaluation assignments. He has very rich experience of conducting various assignments in External audit

as well as Internal Audit section specially assignments relating to Financial Institutions, Textile sector,

Construction companies, Steel Sector, Leather Sector, Rice Sector, Sugar, Power Sector etc.

He is presently assigned the task to prepare opinions on different aspects of corporate laws and foreign

currency exchange control regulations.

MUHAMMAD SAFDAR, FCA

Fellow Member of Institute of Chartered Accountants of Pakistan (ICAP). He did his Bachelors from University of Punjab in 1997. He started his career in 2005 as proprietor of Muhammad Safdar & Co. Chartered Accountant. Professional Experience and Achievements: He is experience and expert in the areas of Financial advisory, Feasibility studies, Corporate restructuring, Tax planning, Compliance Services, Audit and Assurance Services. He is also working as advisor to the Board of a number of industrial and commercial undertakings. He was also a visiting faculty member of University of Punjab.




*







Large Number of Chinese Clients Infrastructure Chemicals

Energy, Utilities & Mining Hospitality & leisure Entertainment & Media

Engineering Companies Paper & packaging Government & Public Services

Transformers Manufacturers Food & Agriculture Industrial Manufacturing

Contracting Companies Metals Pharmaceuticals & Life Sciences

Dairy Farms & Processing Retail & Consumer Hospitals

Information Technology Pesticides Transportation & Logistics

Mobile Phone manufacturers Automotive Nonprofit Organizations

Real estate and Housing Societies Advertising Textile & apparel

Waste Management Company Education Certification & training Companies

Cement Plant Contractors Oil Drilling Companies Gas Processing Plant Contractors

Importers Exporters Steel Manufacturers

MHSS is an independent member firm of United Consulting & Corporate Services (UC&CS)

America in Pakistan. UC& CS America is a network of firms which was founded 22 years ago in

Mexico City. According to the IAB World Survey 2017, UC&CS America is the 23rd largest firm

globally and 6th largest firm in Latin America.

MHSS is an independent member firm of UC&CS Global in Pakistan. UC& CS Global is an

Association of Independent Firms in all over the World which was founded 11 years ago in Mexico

City. According to the IAB World Survey 2017, UC&CS Global is the 18th largest association

globally, ranked at number one in Latin America and ranked at number 21 in Europe and Asia

Pacific.

INDUSTRIES

MHSS Clients

INTERNATIONAL AFFILIATION




Business Registrations:

All types of Companies (Private), (Public), (Listed)

Foreign Company, Branch Office, Liaison Office, Joint Venture

Partnership, Non-for Profit, NGO, Trust

Trade Mark, Patient, Copyright, Brand

Registration with Board of Investment (BOI), Chamber of Commerce

Registration with FBR, WEBOC

Listing of Companies on Pakistan Stock Exchange

Legal Services of drafting of Business Agreements

Advice on Social Security, PESI, EOBI, Pension Fund, Gratuity Fund and Provident Fund

Obtaining approvals/permissions/sanctions /registrations from Regulatory Authorities

Business mergers, de-mergers, acquisition and disposals matters

Taxation Services:

Advice on legal structure and Government policies

Withholding Income Tax and withholding sales tax compliances

Preparation and filing of monthly Sales Tax Returns (FBR) and Provincial Revenue Authorities.

Preparation and filing of monthly Withholding Tax Statements.

Filing of Annual Income Tax Return under the requirement of Income Tax Ordinance

Compliance of Legal & Tax notices and tax exemptions matters

International taxation issues

Providing opinions on transactions from a domestic law and tax treaty point of view

Tax planning, tax support and all types of corporate tax matters

Audit and Assurance Services:

Business Advisory Services:

Feasibility studies

Business valuations

Business process & internal controls review

Budgeting & forecasting

Project evaluation

Physical verification of assets

Litigation support and disputes

Supply chain management

Standard operating procedures (SOP)

Gap analysis

Software Services

ERP Solution for Manufacturing, Construction, Steel and many other manufacturing concerns [BE Tech]

Point of Sale (POS) Solution [Safasha Retail Pro]

Implementation of Off the shelf Accounting Software

Human Resource Services

Business Retainership Services

SERVICES




Documents

MAQBOOL HAROON SHAHID SAFDAR & CO. CHARTERED … · During July-March 2017-18, Foreign Portfolio Investment (FPI) increased to US$ 2,357 million compared to US$ - 631 million last