Tokyo, Islamabad ties cordial: Ishaq Dar

ISLAMABAD: Minoru Kiuchi, Japanese Parliamentary Vice Minister for Foreign Affairs called on Finance Minister Ishaq Dar.

Welcoming the Japanese vice minister, Senator Ishaq Dar termed the relationship between the two countries as close and cordial. He thanked Japan for extending assistance in time of need and support for development projects in Pakistan.

Senator Ishaq also thanked Japan for supporting the recently concluded IMF programme with Pakistan. Dar said the depth of relationship between the two countries is not reflected in the current volume of trade which stands at $579 million. He stressed the need to explore avenues to further enhance bilateral trade and economic relations between Islamabad and Tokyo.

Japanese Vice Minister Minoru Kiuchi said that Prime Minister Shinzo Abe attaches great importance to the region especially Pakistan. Japan, he said views the region as a potential emerging economic region which can contribute towards the world economy.

The vice minister said that since the establishment of the diplomatic relations in 1952, both the countries have enjoyed good relations. Japan he said recognizes that the political and economic stability of Pakistan is significant for the prosperity of this region. He further said that the investors in Japan have high expectations from the present government in Pakistan and lauded the consolidation of democracy in the country.

Minoru Kiuchi, Japanese Parliamentary Vice Minister for Foreign Affairs reciprocated the views of Senator Ishaq Dar that there was an ample room to expand and strengthen economic relations between the two countries.

The senator said that Prime Minister Nawaz Sharif has a vision to transform the economy of Pakistan and make it one of dynamic emerging economies of the world. In this connection he alluded to the manifesto of PML-N which clearly lays down a roadmap and a strategy to being out the country from its present economic problems and put it on a path of sustainable growth.

The prime minister, Dar said has been focusing to overcome the challenges faced in the energy sector as well as improvement in law and order in the country. In this connection he informed the Japanese vice minister that an All Parties Conference had unanimously come out with a resolve to address the law and order situation in the country.

Dilating on the economic agenda of the present government, Senator Ishaq Dar said that our manifesto stipulates enhancing economic relations with other countries based on the principle of “trade not aid”. The meeting was also attended by senior officials of the Ministry of Finance.

IMF delegation meets Ishaq Dar

ISLAMABAD: A four member delegation of International Monetary Fund comprising Mr. Jafar Mojarrad, Executive Director, Masood Ahmed, Director IMF, Mr. Jaffrey Franks, Mission Chief IMF and Mr. Mansoor Dailami, Senior Representative IMF called on Finance Minister Senator Mohammad Ishaq Dar at his office.

During the meeting which was held in a very cordial atmosphere both sides resolved that the purpose of the programme was to put Pakistan’s economy in a dynamic emerging market.

The IMF delegation congratulated the Finance Minister on the successful conclusion of the programme and said that the IMF would continue to work with Pakistan and augment its efforts through the entire process.

Mr. Jaffar Mojarrad said that IMF recognized the difficult economic situation faced by Pakistan and appreciated the hard decisions taken by the present government even before starting negotiations with IMF. This he said signalled the seriousness of purpose of the present government.

The IMF delegation was of the opinion that already Pakistan is witnessing the benefits of entering into a programme as international donors felt comfortable.

The IMF delegation informed the Finance Minister that there was a lively discussion when the programme was put on the agenda of the board and members evinced keen interest and support for the programme. This programme could be a turning point for the transformation of Pakistan’s economy, the delegation hoped.

Senator Ishaq Dar said that the July-August 2013 figures for tax revenue showed a growth of 20% as compared to two and a half percent in the last year, FBR he said had already issued notices to 10935 new assesses, there was a current account surplus of 46 million dollars in July 2013, growth of 9% in exports and record remittance of 1.4 billion dollars in July 2013. He said that he was encouraged by these results and confident that the targets set out by the government would be achieved as “things are shaping up”.

In response to an offer made by IMF delegation for technical assistance Senator Ishaq Dar thanked the IMF for the offer.

Senator Ishaq Dar said that despite inheriting a fragile economy because of the inactions on the part of previous government, the present government had taken hard decisions to stabilize the economy and introduce structural reforms

The Finance Minister expressed the confidence that both the sides will work actively in future as well. The meeting was also attended by Chairman FBR and seniors officials of Ministry of Finance and Economic Affairs Division.

PTAA wants postponement of new tax form

ISLAMABAD: The Pakistan Tax Advisers Association (PTAA) has asked the Federal Board of Revenue (FBR) to postpone the draft amended income tax return form till 2014 as the form likely be finalised on Tuesday.

PTAA Chairman Javed Iqbal Qazi said that the FBR should extend the last date for submission of returns by at least 75 days to compensate the taxpayers. He said that the taxpayers and legal fraternity should not be ‘punished’ as the FBR did not discharge its duty in time.

The last date for submission of income tax return is September 30. The draft return form was issued on August 26 to seek comments from the taxpayers within 15 days.

The chairman said that the changes, made in section 114 and 116 of the income tax ordinance through Finance Act 2013, could not be applied retrospectively for tax year 2013. So the amendments pertain to tax year 2014 and not 2013, he added.

No understanding with IMF on devaluation of rupee: Dar

ISLAMABAD: Finance Minister Ishaq Dar has categorically stated that there is neither any explicit nor implicit understanding with the IMF on the devaluation of rupee.

Speaking at the launch of the Sixth Annual Report of the Institute of Public Policy, Beacon House National University on Monday, the Finance Minister said that the issue of adjustment of rupee dollar parity was not even discussed. He urged the economic experts to refrain from issuing such speculative statements.

He said that Pakistan had to enter into the programme with IMF at a time when it was going through one of the most difficult economic phases in its history. He said that they had to approach IMF to beef up the dwindling Foreign Exchange Reserves as well as fulfill national obligations.

The Finance Minister said that he was grateful to the IMF for understanding Pakistan’s difficult economic situation and avoiding making unreasonable demands.

He reiterated that the commitments made by the government with the IMF would be met as they are in the interest of Pakistan and its economic future. He pointed out that Standard & Poor’s and Moody’s have given a positive outlook on Pakistan after a long time and the Overseas International Chambers of Commerce, which conducts regular surveys on business confidence, has raised its index for Pakistan from a negative of 34 to a positive of 2.

Mr Ishaq Dar said the World Bank and Asian Development Bank have agreed to recommence their support to Pakistan after a lapse of three years.

He said the outcomes of the reforms have been encouraging and during the month of July and August, FBR collected taxes to the tune of Rs 280 billion, which is 20 percent higher than the amount collected over the same period last year.

 

FBR endeavors to curb menace of corruption on PM directives

KARACHI: Curbing the menace of corruption is on top of the agenda of the present government. Prime Minister Mian Nawaz Sharif recently issued directives to Revenue Division and Federal Board of Revenue to conduct proper screening and strict scrutiny to purge the lines of corrupt and inefficient elements in their ranks. After these firm directives, Revenue Division and FBR gave clear directions to the officers and staff working under their administrative control to perform their assigned duties professionally. FBR Chairman Tariq Bajwa also stressed this point last week in a press briefing saying that there would be zero tolerance on corruption among FBR officers, adding that the Board took decision to suspend two officers of Customs in Karachi.

Similarly, Member Customs also held a number of meetings in Islamabad and Karachi with chief collectors, collectors, additional collectors, deputy collectors and assistant collectors, and called for making an effective strategy to eradicate corruption from the department and enhance efficiency of the officials.

After these recent developments, Customs Department is strictly following these directives and has started fight against corruption to unearth old frauds and prevent potential frauds in future.

According to details, Customs Intelligence detained 3 containers on 16 August (Friday) near Pakistan International Container Terminal (PICT). After initial investigation, it found that the containers were cleared without examination by mis-declaration of GDs (Goods Declarations) mentioned with different items including artificial ornaments, toilet soaps, fairness creams, towels, cosmetics, hosiery products & other items and booked on the name of A to Z company and H A Karim International.

Sources revealed that a self-proclaimed clearing agent Mian Tahir played a vital role in order to clear these consignments. In the meantime, R & D Department of Customs opened 15 recovery cases from July to August against these importers having GD Nos: 7724, 7720, 7712, 7715, 7718, 9141, 9153, 9136, 9130, 9150, 9142, 9147, 9155, 9159 and 9163.

Sources in Customs House, Karachi told our correspondent that Mian Tahir had close links with Assistant Collector Aftab Ahmed and cleared around 43 GDs in just two months i.e. (July and August) by using Aftab’s WeBOC ID and password.

Unlike before, now Customs Department has started taking notice against its own ‘corrupt’ officials. When contacted Model Customs Collectorate (MCC) Appraisement said that it has issued an order of “off-duty” against its own Assistant Collector Aftab Ahmed and an inquiry has been initiated against Appraisers Jam Akram and Rasheed Khan.

Member Customs Nisar Muhammad Khan seems very optimistic about the performance of FBR and Customs Department and is highly convinced that FBR is now heading towards right direction under the competent and proficient leadership of its chairman Tariq Bajwa.

Mr Nisar, while talking to Customs Today about the case of tax evasion by the importers, said that the case would be investigated as per law. Expressing his complete satisfaction, he said that now all the departments are working efficiently. Any act against the rules and regulations would not be tolerated, he added.

Commenting on the above-mentioned case of tax evasion, DG Investigation & Intelligence Riaz Khan told Customs Today that there is no room for corrupt elements. Everybody is equal before law and no one is above the law. We are working for betterment of Pakistan. Our department is also working in that direction, he added.

When contacted the spokesperson of Customs Intelligence Department confirmed that in the wake of credible information, the regional office at Karachi intercepted and seized 3×40 containers of miscellaneous items imported by H.A Karim International and A to Z company. The consignments were cleared through yellow channel without examination. Assessment Officer initially marked that multiple items were declared without proper specification, description, size, material, origin, brand, packing, quality and net weight etc,.

He said that the examination request was rejected by Assistant Collector (Assessment) Aftab Ahmed Khan and GDs were completed and assigned to gate out while the same containers were intercepted and detained by the Directorate. He also confirmed lodging of FIR against the culprit.

Director Customs Intelligence & Investigation Manzoor Hussain Memon is striving hard and taking a number of initiatives to curb the menace of corruption to reduce the tax evasion and increase the revenue for the exchequer.

When contacted to get details about the above-mentioned case, Manzoor Hussain Memon confirmed that the Customs Intelligence has written a letter to Federal Board of Revenue in order to get permission to involve the Assistant Collector in the ongoing investigation.

“The Intelligence officers are carrying out investigation into the matter without any pressure, however; phone calls of some influentials are being received,” the Director added.

Giving details about the recent operation of the Directorate of Customs Intelligence & Investigation, Additional Director Customs I&I, Mumtaz Khoso informed Customs Today that the Customs Intelligence and Investigation has detained three containers of importers Sheikh Khurram Shahzad (owner A to Z) and Azfar Javed (owner H A Karim International).

Khoso confirmed that among the detained containers, two belonged to A to Z company and third H A Karim International.

“During joint investigation, it was revealed that 33 different items were present in first container, 40 in the second container and 52 different items found in third container. However; the Goods Declarations (GDs) displayed 18 different items in first container, 16 in second and 20 in third container,” Additional Director Customs I&I disclosed.

Providing the details of complete breakup of the duty obtained and tax evaded, the Additional Director informed that on first container duty of Rs 4.63 lakh was submitted instead of Rs 34 lakh, on second container the tax levy of Rs 4.34 lakh was submitted instead of Rs 27 lakh and on third container, the duty of Rs 4.67 lakh was submitted instead of Rs 35 lakh.

He further informed that 7 other containers of these two importers are under examination by the Model Customs Collectorate (MCC) East.

On just three containers, these importers have evaded Rs 82 lakh and seven more containers are detained for investigation, if they are proved to have evaded duty on these 7 containers too then it is possible they had been evading duty on their imported goods for several years which could open doors for further investigation into the case and take Customs Department to unearth the scam.

“We have registered 2 FIRs against the accused namely Khurram Shaikh and Azfar Javed involved in the case for evading huge tax levy, adding that these importers belonged to Islamabad and Rawalpindi,” he added.

“Valuation ruling has also been violated in such cases and the Customs Intelligence is investigating the matter”, he added.

Khoso further said that the Customs Intelligence has already completed seizer procedure in the matter.

“We have two main priorities in the said case as per the directives of high-ups that is to recover the evaded tax levy and arrest the culprits involved in it”, Additional Director Customs I&I revealed.

“We have clear directives from the top brass of FBR and Customs Department to eliminate the corrupt practice”, he asserted.

He further informed that the investigation is going on smoothly and it is hoped that the procedure would be completed within 30 days.

“We have also clear directives in order to eradicate such mafia, causing huge losses to national exchequer”, he maintained.

When contacted Assistant Collector Aftab Ahmed, who is involved in the case, said that he is “off-duty” now and could not comment over the said matter.

One of the office-bearers of Karachi Customs Agents Association (KCAA) said that Mian Tahir is not a listed clearing agent and even not enrolled with Association.

“Mian Tahir did not visit the office of KCAA ever in his career and persons like him by disguising them as clearing agents are tarnishing the image of clearing agents as well as the Association”, he added.

Amir Sheikh (owner of A to Z Hosiery) and ‘relative’ of accused Khurram Sheikh (owner of A to Z company) told Customs Today that he has nothing to do with these frauds.

When contacted, Khurram Sheikh (owner of A to Z company) and main accused in the case said that detaining of their containers seems to be a tactic to pressurize them, he added.

Customs Today team at Karachi and Islamabad chased this investigative story at length to dig into details of what steps FBR and Customs high-ups are taking to avoid hefty losses to the exchequer through frauds in lieu of the directives of Prime Minister Nawaz Sharif.

 

 

 

 

 

 

 

 

 

 

 

FBR Board-in-Council approves audit plan

ISLAMABAD: Federal Board of Revenue (FBR) on Friday approved audit plan for income tax and sales tax under which thousands of taxpayers will be selected through random balloting by next week.

“FBR’s Board-in-Council has approved an audit plan for selecting 5 percent taxpayers’ through random balloting,” Chairman FBR Tariq Bajwa confirmed on Friday.

Instead of parameters-based audit, FBR took decision to hold audit on the basis of random balloting. The parameters-based audit was always challenged into different courts on different grounds so the FBR took conscious decision to avoid plunging into any legal battle.

Earlier, the Board-in-Council of FBR considered audit plan for selecting thousands of cases of Income Tax and Sales Tax for audit purposes.

“The audit is meant to create deterrence,” said one member of FBR and added that it would not give jumpstart to revenue collection. “We want to complete assessments till March 2014 so that we can materialize revenues in the current fiscal year,” added the official.

FBR had been facing difficulties to enforce audit plan in an effective manner from last several years because it was challenged into different courts on the basis of certain lacunas in the plan.

FBR has been facing a difficult task for achieving highly challenging tax collection target of Rs 2,475 billion in the current fiscal year compared to a collection of Rs 1936 billion in the last financial year. FBR will have to achieve a growth of over 28 percent in the ongoing fiscal for displaying its desired target.

FBR has already started sending notices to potential non-filers in a bid to broaden narrowed tax base. The government has made commitment with the IMF that the tax-to-GDP ratio will be increased by 5 percent in next five year tenure of PML (N) government.

“The bank access will be used carefully to broaden tax base,” said the official and added that the land transaction record of big giants was in the process of collection from all available avenues to find out new taxpayers.

FBR has planned to send 100,000 notices in the current fiscal year and so far these notices have been sent to around 30,000 people all over the country.

FBR had so far collected Rs 290.5 billion in first two months and few days of September 2013, registering a growth of just 17 percent compared to the same period of the last financial year.

This challenging task will become harder in the second and third quarter of the current financial year as FBR had performed well during the same period last year.

“In order to ensure effectiveness of the audit plan, FBR also decided to exclude certain areas from audit exercise such as salaried class, all those sectors where final tax liability is charged as audit of these sectors would not impact revenue side positively. So we decided to drop these sectors consciously in order to avoid wastage of time,” said the sources.

To track down progress on issued audit notices, FBR has already placed Tax Audit Management System (TAMS), enabling tax authorities to avoid misuse of any audit notice.

Govt determined to implement Vision 2025: Ahsan Iqbnal

ISLAMABAD: Federal Minister for Planning and Development Ahsan Iqbal said that Pakistan can face water crisis if concerted measures are not taken to tackle this issue.

Ahsan Iqbal stated this while chairing a consultative workshop on vision 2025, arranged by the world’s leading management consultancy firm McKenzie & Company, at the Ministry of Planning, Development and Reforms.

The federal minister in his opening remarks said, “Focus of our fundamental challenge is implementation of 2025 plan on execution and delivery. We have to rigorously implement what is good for our country. It is our desire to develop vision 2025 on the basis of the people’s wisdom and broad-based ownership. Today development is not a rocket science; right things done at right time bring right results”.

He explained, “We have recently witnessed Pakistan’s first democratic transition which means that Pakistan is heading towards political stability which is one of the non-economic prerequisites of development,” adding  that the other main issues were peace and solidarity, which could not be achieved so far.

The minister said that political instability inflicted a heavy cost to the country in the past which was even greater than corruption. He informed the audience, “In 1960s, Pakistan was thought to be the next rising star of Asia, after Japan, with exports size twice to South Korea. But later on due to lack of continuity of policies and political instability, we lost the race”.

“Our focus is mobilising indigenous resources. Pakistan’s tax base will be widened and investments will be encouraged. Our country’s location provides us great opportunity for harnessing potential of regional trade. For this purpose, the government is planning to upgrade infrastructure”, he added.