Taxpayer education one of FBR’s core functions: Member FATE

ISLAMABAD: Member Facilitation and Taxpayer Education (FATE) in the FBR Headquarters, Ms. Riffat Shaheen Qazi, said that we are planning to start detailed workshops and awareness raising programmes for university students regarding income and other tax laws and amendments made in these laws. Apart from large scale conferences being conducted in different chambers of commerce and FBR’s other organs, a specialist will also be a part of these conferences to help resolve the issues regarding tax policy, customs, income and sales tax and federal excise duty (FED).

In an exclusive interview with Customs Today, Member FATE Ms. Riffat Shaheen who is official spokesperson of FBR said that we provide facilitation at different levels including individual taxpayers, tax bars, chambers, clearing and forwarding agents and withholding agents. The major role of the department also includes the interaction with all departments of FBR which resolves their queries and problems mainly through mails, helpline and web. Its online system has been upgraded and the department deals with the grievances under Section 7 of FBR Act. The complainant or aggrieved party registers complaints with the concerned wing through proper channel by submitting all the required material so that their problems can be resolved at the earliest.

She said, “We strive to promote and mobilise the system by printing brochures as well as sending messages. We are proactive and responsive and for this purpose we update our website regularly. For the convenience and facilitation we work properly online along with GIZ (German NGO), where we arrange workshops for internal and external stakeholders on regular basis. In addition we will have extensive awareness campaigns this year.”

“One of the major issues we are facing is lack of communication between taxpayers and tax authorities. The middle men — advisors and consultants — are creating hurdles. There is a facilitation wing at every RTO including commissioner for facilitation. The taxpayer should directly approach the facilitation wing so that he/she can get relief on the spot. The taxpayer can approach the wing through web and phone,” she added.

Talking about FBR’s deficit in the first quarter’s revenue collection, she said that first quarter cannot give us the actual position as second and third quarters present the real picture of revenue collections because these months can be called months of real returns. We do facilitate the taxpayer if a taxpayer wants to make advance payments. After assessing the last year’s tax, he can be facilitated by installments but this facility is only provided to those taxpayers only who make advance tax payments and then the remaining amount is collected in the fourth and final quarter. The fourth quarter is basically the assessment quarter by FBR itself.

In answer to a query she pointed out the key role of FATE wing which is one of the most important departments of FBR since it organises advertisement campaigns, and is responsible for news and press releases for FBR.

She said that unregistered businesses which do not pay sales tax should go for registration as early as possible. Replying a query, she said the CREST and WeBOC systems launched by FBR are very effective and useful. But these systems sometimes develop errors which are resolved immediately. In this regard FBR has appointed a separate IT member for efficient working and elimination of errors in WeBOC and CREST. In addition to this FBR is now moving towards ITMs integrated system, she concluded.

Awarding MFN status to India to enhance Pakistani exports

SYED MOHAMMAD TAHIR

LAHORE: Awarding Most Favoured Nation (MFN) status to India would not only provide cheap items to end consumers but Pakistan would also get a huge market of 1.27 billion population for exports. Unless government does not take steps to build mega hydel projects like Kalabagh Dam, the country would not progress leaps and bounds.

These views were expressed by former LCCI President Irfan Qaiser Sheikh at his office while giving an exclusive interview to Customs Today team recently.

Irfan Qaiser said that there is no need to fear in awarding MFN status to India because ultimately it would be proved beneficial for Pakistan. There are only few sectors including pharmaceutical and automobile which are opposing to award MFN status to India otherwise, the fact is that we would capture a fast progressing economy of the world having over 1.27 billion population after signing preferential agreements.

Irfan Qaiser said that we have a very good experience of trade with China. China has become world’s second largest economy with a population of above 1.4 billion. Though, the balance of trade is in China’s favour, yet reality is that we got a huge market for our exports in the shape of China. It is basically our imperfection that we could not export to China according to our potential. However, it is a good omen that China has promised to help Pakistan in building economic corridor between Gwadar and Kashghar, he said, adding that with the establishment of this economic corridor, China would set up industrial zones in Pakistani territory keeping in mind the local cheap labour.

Irfan Qaiser further said that similarly Pakistanis are consuming expensive Indian items as these are being shipped through Mumbai to Dubai and then from Dubai to Karachi. The transportation expenses of these smuggled items increase up to 40 per cent because of extraordinary distance. If we could award MFN status to India, the end consumers in Pakistan would get these items at the cheapest rates as goods could be transported from New Delhi to Lahore consuming just eight hours, he claimed.

He said that majority of the businessmen in Pakistan do not have fear in their minds while trading with India. He said he is also importing raw material for his chemical factory from India and exporting value-added DOP production to India which is being used in making artificial leather. He claimed that though India has as many as 70 plants producing DOP but Indians are keen to purchase my whole production of DOP. Likewise, other traders are also doing businesses with Indians and are fetching valuable foreign exchange for the country, he added.

While criticising the incumbent government, Irfan Qaisar said that enhancing General Sales Tax (GST) from 16 percent to 17 percent is a bad decision as it has opened a floodgate of inflation in the country. The indirect taxes are being eliminated in the world whilst the ratios of indirect taxes have been increased in our country. While quoting an example, he said that Pakistanis are paying over 70 percent indirect taxes and 30 percent direct taxes while 70 percent direct taxes and 30 percent indirect taxes are imposed in most of the countries in the world, he claimed.

Irfan Qaisar further revealed that last year he had organised OIC ambassadors’ summit at Bhurban where all participating countries pledged to set up a trade secretariat that would help promote trade activities among OIC’s countries that are currently at their lowest ebb of 0.5 percent. He said that after his stepping down from the LCCI as President, the movement’s pace has decreased but still he is optimistic in establishing a mechanism for full-fledged trade among Muslim countries. He further revealed that as many as 28 ambassadors of Muslim world participated in the summit and showed their eagerness in establishing trade secretariat of Muslim countries.

While replying to a question, Irfan Qaiser Sheikh said that if we carefully estimate losses incurred by war on terror and energy crisis, the outcome would stun everyone. He said that regional countries are progressing at the rate of 8 to 9 percent of GDP but Pakistan is struggling hard to achieve 4 percent of GPD, he added.

Irfan Qaiser claimed that the calculation further revealed that from last 15 years, Pakistan has lagged behind almost 200 years as compared to regional countries. He said that the successive governments failed to anticipate country’s energy requirements and never tried to set up hydel power plants to generate even a single unit. Vested interested have created unfavourable circumstances among all provinces that they have put aside country’s interests and preferred to have their own interest. They did not ponder to build new mega dams to generate not only electricity but also irrigate barren lands of the country. He was of the view that building mega projects like Kalabagh and Bhasha Dams are inevitable for the rapid progress of the country. If incumbent government, he said, wanted to see country progressing like other regional countries, these mega dams have to be built on war footing, he added. He further said that Pakistan is losing over $4 billion annually because of energy crisis, adding that Pakistan is bearing colossal losses because of war on terror.

Irfan Qaiser suggested the government to build mega hydel power plants along with small and medium run-of-the-river hydel plants to generate cheap and environment-friendly electricity and move the economic wheel of the country smoothly so that Pakistan could be put on track of progress and prosperity soon, he concluded.

Industrial parks at Port Qasim to change economic landscape of Port City

KARACHI: Upcoming mega industrial zones especially Bin Qasim Industrial Park and Creek Industrial Park, with the booming industrial activity and creation of tremendous job opportunities, are bound to bring a positive socio-economic change in the port city Karachi.

Mohsin Syed, CEO of National Industrial Park (NIP) on the occasion of signing ceremony of an agreement with the KESC power supplies expressed the hope that Bin Qasim Industrial Part (BQIP) at Port Qasim would be a game changer for new industrial landscape of the metropolis and would play an important role in creating employment for the Karachiites, besides generating a huge chunk of revenue for the national exchequer.

It may be noted that National Industrial Park Management Company signed an MoU with the KESC for supply of 4 MW power to the NIP for meeting the initial requirement of Bin Qasim Industrial Park (BQIP) project to ensure sustained growth of economy and industrial sector in the city. The NIP is intended to build its own grid station with the increase of power demand and for strengthening the power supply after appropriate arrangement by the KESC.

Besides generating a huge chunk of revenue for the exchequer, these industrial parks would also help transfer the technology with the arrival of foreign investment in these parks.

A new Japanese motorcycle manufacturer was all set to bring in Foreign Direct Investment (FDI) of $150 million in this park. This venture would create 45,000 jobs and promote ancillary industries. The project would lead to transfer of technology in manufacturing of motorcycles and the company would set up exclusive training centres for developing skills and capacity of vendors.

Syed said that the Park was being developed with a focus on provision of salient features integral to an industrial park. It would accommodate those clusters with linkages to the existing Down-Stream Industrial Estate with medium and small scale industries based on plastic sector, electronics and food and beverage production units.

He remarked that BQIP was the largest project being developed by the NIP on 930 acres land of Pakistan Steel. After completion it would match with any state-of-the-art industrial zone, providing best infrastructure facilities at par with international standards which will easily cater to the business needs of medium and large enterprises, he added.

He appreciated the KESC support and expressed gratitude to the KESC’s new management for their efforts towards ensuring uninterrupted power supply to industrial sector and assuring their best support in future.

Speaking about NIP’s Korangi Creek Industrial Park (KCIP) project where arrangements of setting up of 48 MW power plant is in its final stages, he proudly announced that five companies have already started construction of their manufacturing plants at the land allotted to them while three others were all set to break the ground. Construction of these industrial units which include consumer, food & pharmaceutical, garments/textile, light engineering, packaging and printing will take the city of Karachi into a new era of economic prosperity.

As soon as the industrial units established at the KCIP start production, this industrial zone alone will start contributing Rs. 40 billion annually to GDP and provide approximately 30,000 direct and 180,000 indirect employments. The project designed by Jurong Singapore, renowned internationally for their expertise is being developed at an estimated cost of Rs. 3.3 billion which will have an investment opportunity of Rs. 20 billion.

Efficient ports are lifeline of economy: Capt. Haleem Siddiqui

KARACHI: The efficient ports are the lifeline of the economy by virtue of their key role for the promotion of trade and industry and thus contributing significantly in growth of economies around the world, said Capt. Haleem A. Siddiqui, Chairman Marine Group of Companies, in an exclusive interview with Customs Today.

Capt. Haleem A. Siddiqui who is always confident about economic potential of the country and has achieved a number of milestones in his professional career which gave new impetus to the emerging business houses in Pakistan.

His outstanding achievements include the prestigious development of a well-equipped and modern container terminal i.e. Pakistan International Container Terminal (PICT) at Karachi Port.

The container handling operations and quality cargo facilitation speaks itself about the amount of passion and efforts he put in to develop this landmark project which can be described as second to none in the port facilitation services.

The terminal developed by Marine Group of Companies offers modern and deep berths in Pakistan with a planned draft of 13.5 meters and ensures to maintain the sanctioned depth even during monsoon. PICT with its substantial spare yard space on the East Wharf for additional yard handling capacity makes the handling operation more impressive where latest container scanning and radiation detection facility makes the operation well secured, while the terminal works round the clock. Strengthened with handling capacity of over 750,000 TEUs per annum, the terminal supplements its operations with the availability of on-site rail link to up-country.

The upcoming “Dirty Cargo Terminal” at Port Qasim is bound to play an eye catching role in resolving the nasty issue of power shortage as well as reducing cost of power generation which is the major concern of every citizen in Pakistan.

Actually the Dirty Cargo would be a dedicated terminal for handling coal which is destined to be future of power generation in Pakistan, said Capt. Haleem Siddiqui.

The terminal which is likely to go into operation by early 2015 has become the focal point of all major power producing companies which have already gone into contract signing with the bulk cargo terminal.

This terminal was originally designed to deal with 9 million tons of capacity but the growing demand for coal has encouraged the management to enhance its capacity from 9 million tons to 12 million tons.

The project being developed with the financial support of the World Bank will be a unique project as it is being supported by an exclusive cargo track from Karachi to up-country for supplying coal to the power generating units across the country through the fast rail track. The bulk cargo terminal supported by cargo train is going to set an example for the private sector’s potential in Pakistan.

Attaching a great amount of hope and confidence in the economic future of Pakistan despite all persisting odds faced by the country, Haleem was quite optimistic about the economic future of the country. He strongly recommended that private sector in Pakistan should be given preference in the privatization of ill-performing government owned units, because our own people have the ability to do wonders, he remarked.

 

Relaxing customs rules only way to prosperity: President ICCI

ISLAMABAD: President Islamabad Chamber of Commerce and Industry (ICCI) Zafar Bakhtawari has said only a few countries have made their position significant on economic horizon of the world and amongst them the most outstanding are Singapore and Dubai.

“These two countries are small but only because of their trade plans they have achieve esteem in the economic world. And the most important factor behind in achieving this status is that these countries have adopted easy customs rules or even no customs duty. If we have to put Pakistan on the road of prosperity, we should at least follow these simple rules regarding customs duty.”

He said that Pakistan enjoyed a unique geographical importance and it could become a transit trade corridor by facilitating regional countries through Gwadar and could become an economic giant by riding on its regional value like Singapore and Dubai.

“What is needed initially is to make busies friendly policies and reducing customs duties up to minimum except where is a need to protect our local industry.” The ICCI chairman pointed out that European Union (EU), a block of more than 25 countries, was enjoying a zero custom duty on the internal movements of goods within the zone. He said by adapting such measures European economy had shown an amazing development. He said the ASEAN block was also following these lines and 10 countries in this block had also developed a free market economy and were reaping rewards.

“Presently it is not possible for a single country to safeguard its economic interests alone. So there is a need that Pakistan should take initiative to make such regional block. It is unfortunate that SAARC and ECO (Economic Corporation Organisation) have failed due to lack of interest by the stakeholders.”

Bakhtawari said there was not any substantial change in the existing customs duty tariffs by the new government. On increase in sales tax which has an indirect effect on every business especially imports and exports, he said that sales tax was the tax which would replace the custom duty in future.

He said the increase in sales tax from 16% to 17% was not a big change considering the economic state of the country. He said the businesses were more affected by the worst energy crises, adjustment of Rs 500 billion circular debts.

“If one considers all the facts, 1% increase in the sales tax is justified and not a big change but at the same time. But the government should decrease GST gradually upto 10% by decreasing it one percent every year as soon as the economy becomes stable. This one percent increase will definitely affect everybody but current circumstances in Pakistan demand that everybody should pay his share to economy.”

Bakhtawari terming the budget business friendly said the tax relief on export processing zone from 5 years to 10 years would help grow the economy of Pakistan. “The government has announced to create an industrial zone and induction of Gwadar port in economic zone indicates that the idea of generating the economic corridors through Pakistan is materialising.”

He said the he believed that inclusion of Gwadar in the special economic zone, which would be tax free and would be considered tax holiday, be beneficial for Chinese investors in Pakistan. “China is interested in Gwadar for the reasons that it can make oil refinery there and can meet the future requirement of oil through Gwadar by rail tracks and road links, which has already been discussed by Chinese Pakistani premiers in last meeting.”

Answering a question about the major exports of Pakistan, Bakhtawari said the textile was considered as the top export of the country and Pakistan’s 60 percent export was based on textile industry. However he lamented the fact that Pakistan was still lagging far behind in access to international market because the customs duties are far heavy in Pakistan on textile as compared to Bangladesh and a country like Bangladesh, which has no cotton production, was exporting more textile than Pakistan.

 

TARIQ BAJWA LIKELY TO IMPART NEW IMPETUS TO FBR

FAIZA ISRAR AND SYED MUHAMMAD TAHIR

The Federal Board of Revenue (FBR) – the anchor of Pakistan’s economic ship – has a new captain in the person Tariq Bajwa, a public servant with a long and distinguished record of service in the finance and revenue sectors. It is hoped that with the induction of Tariq Bajwa, there will be a distinctive positive change in the performance of FBR which has repeatedly failed to achieve its revenue targets in the last few years.

Mr Tariq Bajwa has had an illustrious career in public service spanning more than three decades. He brings to the job a wealth of professional knowledge, expertise and experience which will be of tremendous help to him in fulfilling the onerous responsibilities of his new challenging assignment.

Mr Tariq Bajwa has a distinguished academic record.  He did his LLB from the University of Punjab and holds an MPA degree from Kennedy School of Government, Harvard University, USA. His professional expertise is Public Policy Formulation and Implementation with specialization in public and corporate finance. Financial planning, management and administration are his forte.

During more than 33 years of public service, he has held important positions in various government departments and handled a number of sensitive assignments with distinction.  Before joining the Punjab government, Mr Tariq Bajwa served as Joint Secretary, the Ministry of Industries and was associated with a number of high profile projects  to speed up the industrialization process in the country.

Since joining the Punjab government in September 2010, Mr Tariq Bajwa has been the sheet anchor of the Finance Department in Punjab. During the last three years he has played a key role in formulating budgetary proposals and estimates as per the policy guidelines of the government and public sector development needs. How crucial a role he has been playing is clear from the fact that that despite frequent reshuffle of higher bureaucracy he has not been moved from the Finance Department.

As an able and devoted civil servant known for hard work and honesty, Mr. Tariq Tariq Bajwa earned the trust of Chief Minister Nawaz Sharif who kept him on board in conceiving and implementing a number of  vital Punjab government projects in the energy, transport, service reform and other sectors. When Shahbaz Sharif visited Turkey last year to solicit Turkish investment in the energy sector, Mr Tariq Bajwa was appointed the focal person for discussing project financing with Turkey’s EXIM Bank and finalizing related matters.

It is pertinent to mention here that former Caretaker Punjab Chief Minister Najam Sethi paid rich tributes to Tariq Bajwa saying that his positive attitude had changed his concept about a finance secretary. He said that Tariq Bajwa had extended full cooperation to him at every stage and adopted measures for the benefit of the common man, adding that Provincial Secretary Finance was a kind hearted person and his cooperation in social sector programmes had been commendable. He also expressed  satisfaction over the robust financial position of the province.

Prime Minister Nawaz Sharif decision to induct  Tariq Bajwa as FBR Chairman shows his concern over the dismal record of the  country’s main revenue collection machinery. FBR once again missed the annual revenue collection target by huge margin of Rs 430 billion during the financial year from July 2012 to June 2013 despite imposing new taxes worth billions of rupees.

The FBR has provisionally collected taxes worth Rs1,940 billion during the last financial year 2012-13.  FBR has been struggling to achieve the revenue collection target and revised it several times. The budgetary target of Rs2,381 billion was revised downward to Rs2,191 billion for 2012-13 and further slashed to Rs2,050 billion and then to Rs2007 billion.  In a bid to achieve the revenue target, three tax amnesty schemes were announced, but FBR failed to achieve the  revised target of Rs2007 billion.

The appointment of Tariq Bajwa as FBR Chairman is clearly a part of Prime Minister Nawaz Sharif’s plan to bring in a team of competent, dedicated and honest bureaucrats to run the affairs of country. It is hoped that Tariq Bajwa would be given a free hand  in collecting Rs2,475 billion tax target for financial year 2013-14.  Given his past record, Tariq Bajwa is sure to give a new sense of direction to FBR and provide the kind of leadership needed  to achieve the desired results.

Foreign shipping lines get containers’ rent at will

SYED MOHAMMAD TAHIR

There is no doubt that businessmen and industrialists are considered to be the cogs of a country’s economy as they keep capital of their respective countries circulated and business activities hustle and bustle. That was why they have always been given special status in developed countries. Even they are made ambassadors in foreign countries but unfortunately, this community is striving hard in Pakistan for their very survival since they are being wrinkled instead of giving incentives to make their businesses flourish further.

For instance, traders and industrialists have to pay different taxes from the very initial stage of raw material import to value-added items sale to end consumers. Transportation of raw material or finished products is also an issue which every trader and industrialist have to face.

Nouman Impex Chief Executive Mohammad Haroon Arora said that foreign shipping lines extort money from businessmen who import goods and use their containers especially in north zone of the country. These shipping companies keeping in mind the limited access and resources of local businessmen, demand containers’ rent at their will and are reluctant to give sufficient time to send back these containers at company’s Karachi offices.

It is a matter of grave concern that on the one hand, the government does not provide conducive environment and does not extend helping hand to local businessmen while on the other hand, shipping lines companies are plundering country’s precious foreign exchange by inflicting colossal container’s rent on per day basis.

In this regard, Mohammad Haroon suggested that the government should advice foreign shipping lines managers to give at least 20 days to traders for unloading imported goods rather than just seven days. He was of the view that these shipping companies would have no option but to accept this demand of the government. If shipping companies accept these demands, precious foreign exchange in the tune of millions of dollars can be saved, he added.

While answering a query, Mohammad Haroon said that transportation of containers from Karachi to upward country is also a big problem that should be addressed immediately. He said as Pakistan Railways hadn’t enough freight trains, importers have to rely on road service. He said that the transport fare of a container from Karachi up to Lahore of around 25 to 30 tons weight costs a trader worth Rs 125,000 which was two years ago around Rs 75,000 on the back of fuel charges, dollar-rupee parity and labour cost. He was of the view that this transportation problem can be solved amicably if the government takes steps to form a transport pool that could be used for the transportation of containers across the country, he said adding that though high-ups of Pakistan Railways have pledged that they would provide freight coaches and locomotives to traders on priority basis but it seems difficult that the promises would come into realisation in near future. However, Prime Minister Nawaz Sharif’s recent visit to China and signing of MoUs in different sectors including rehabilitation of Pakistan Railways has elevated the hopes of resolving transportation problems in the country.

Mohammad Haroon showed his serious concern over the non-availability of uniformity on Customs duties on import items. Currently, traders across the country are paying different rates on their same imports consignment. With the uniformity in rates, he claimed, the government would get more revenue as loopholes in evaluating duties would decrease and importers of different cities could avoid of paying dissimilar Customs duties on same cargos.

While giving more detail of traders’ problems, Haroon further revealed that if a trader complains that Customs official concerned has not evaluated tax properly and there is a significant difference of evaluation in the eyes of grieved importers, the case is referred to court where traders have to submit Pay Orders as tax that assessed by ‘ignorant’ Customs official instead of submitting bank cheques. As fate of the case could hang in balance for a period of even one year so a large chunk of business capital remained stuck up in these courts. The pity is that no one in high-ups of judiciary or Customs Department realises that when lion’s share of working capital of a trader would become idle, how business activities would be flourished in the country? It is an open secret that circulating money is better than idle investment not only for traders but also for the government.

In this regard, Haroon suggested the government to once again allow traders to submit cheques rather than Pay Orders in court, he added.

While giving detail of his business, Haroon said that his entity M/s Nouman Impex, deals exclusively in the import of artificial leather and leather made products, various types of fabrics and complete range of shoes manufacturing material, polyester staple fiber, non-woven interlining, quilts, filter paper and tennis ball fibers in the form of raw material to supply them to small and medium range factories and units in the country.

While concluding, Haroon said that the government should take steps to make economy of the country sound by improving law and order situation, creating conducive atmosphere for local investors and business-friendly environment for industrialists, he said adding that the government should also take steps to make foolproof arrangements for the smooth flow of cargo consignment from Karachi to upward country and mitigate the menace of extortion (Bhata) in sensitive areas of Sindh so that business activities could be enhanced in the country.