Tag: Compliance

  • FBR grants importers, wholesalers direct access to digital invoicing

    FBR grants importers, wholesalers direct access to digital invoicing

    The Federal Board of Revenue (FBR) has granted permission to importers, manufacturers, and wholesalers/dealers/distributors of fast-moving consumer goods to seamlessly integrate their electronic invoicing system with the FBR’s digital invoicing platform, eliminating the requirement for licenced integrators.

    The clarification, issued by the FBR, states that starting from February 1, 2024, entities involved in the import, manufacturing, wholesale, and distribution of fast-moving consumer goods must electronically transmit sales tax invoices.

    To ease the process for registered individuals, the FBR emphasises that until licenced integrators are officially designated, those notified under S.R.O. 28 of Sales Tax should integrate their electronic invoicing system with the FBR’s digital platform, readily accessible on the FBR’s website.

    The FBR has outlined specific categories of registered persons obligated to electronically transmit sales tax invoices, as per rule 150Q of Notification No. 1525(1)/2023 under Chapter XIV of the Sales Tax Rules 2006. This directive is effective February 1, 2024.

    Notably, the mentioned registered persons may request an extension for compliance by submitting an application to the Commissioner of Inland Revenue with jurisdiction, citing plausible reasons. In the context of this notification, “fast-moving consumer goods” refers to consumer goods supplied in retail markets based on daily consumer demand, excluding durable goods, according to the FBR’s definition.

  • FBR restructuring: Govt plans to separate Customs and revenue collection system

    FBR restructuring: Govt plans to separate Customs and revenue collection system

    Caretaker Finance Minister Dr Shamshad Akhtar has announced that the government is implementing significant restructuring measures within the Federal Board of Revenue (FBR) to eliminate apparent conflicts of interest in tax collection and enhance overall performance. 

    Speaking at the Future Summit organised by the Nutshell Group, she outlined the action plan for restructuring Pakistan’s tax administration, emphasising the crucial aspect of strengthening the internal governance of the FBR. 

    One notable decision involves separating customs from the revenue collection mechanism. Customs will focus on tracking smuggling and related activities, while revenue collection will remain the exclusive mandate of the FBR. 

    Akhtar noted that a formal notification for this change will be issued next week, with additional notifications expected for further FBR restructuring initiatives. 

    Discussing FBR reforms, Akhtar highlighted the adoption of innovative digital technologies to broaden the tax base, minimise the tax policy and compliance gap, and increase tax collection. 

    The government aims to reduce the share of the shadow economy by more effectively identifying non-filers and those under-reporting incomes or business activities. 

    Furthermore, Akhtar revealed plans to separate the tax policy and revenue division, making it an independent entity reporting directly to the Minister of Finance. 

    According to Brecorder, this move aims to eliminate perceived conflicts of interest in tax collection, emphasising the need for fair, equitable, and productive tax policy design. 

    Collaboration with the National Database and Registration Authority (NADRA) is also underway to upgrade data systems, with a technical committee chaired by NADRA and FBR chairpersons established for this purpose. 

    The overall objective is comprehensive tax administrative reforms and increased efficiency in revenue collection. 

  • PSX asks companies to explain significant changes in share prices

    PSX asks companies to explain significant changes in share prices

    The compliance department of the Pakistan Stock Exchange (PSX) has contacted five listed companies seeking clarification on a “substantial” change in their share prices between March 16 and April 13. One of the companies contacted is Pakistan Services Ltd (PSEL), which owns and manages the chain of Pearl Continental hotels in Pakistan. PSEL has a free-float of 60 per cent, with the company’s sponsors controlling only 40 per cent of the shareholding while the rest is available to the public for trading.

    PSX Head of Listed Companies Compliance, Hafiz Maqsood Munshi, sent a letter to PSEL on April 20 stating that “The PSX has observed that the price in the shares of PSEL has decreased substantially during the period from March 16 and April 13”. According to the prevailing Securities Act, listed companies are required to promptly disclose any unusual movement in the price or volume of its traded securities to the general public. If the company observes any such matter or development, it must share the details with the public. Otherwise, the company should issue a statement of the fact that it’s not aware of any such matter or development.

    The share price of PSEL was Rs1,720.50 at the close of the March 15 session, dropping to Rs800.10 apiece by the end of the April 13 session, showing a decrease of 53.5 per cent in less than a month. The PSX has directed PSEL to provide, “at the earliest”, the reason or any material information that may have resulted in the substantial decrease in its price during the period under consideration.

    Capital market regulators across the world keep an eye on any sudden share price movements to protect small investors from fraud. Listed companies are required to share any new development that may have a material impact on its stock price with the public immediately. This regulatory requirement is aimed at preventing insider trading, which involves buying and selling of shares by someone with non-public but material information about the stock undergoing a sharp change in its price or trading volume.

    The PSX also contacted Tandlianwala Sugar Mills Ltd (TSML), a producer and seller of white crystalline sugar and ethanol with a free-float of only 5 per cent, to explain the substantial increase in its share price between March 16 and April 13. TSML had no trading on March 15 or 16, with a closing price of Rs67.03 apiece on March 17. Its share price rose 50.3 per cent to Rs100.79 a share by the end of April 13.

    According to Dawn, the PSX compliance department contacted Towellers Ltd, a manufacturer and exporter of textile make-ups, garments and towels, which saw its share price rise from Rs183 on March 15 to Rs291.16 on April 13, up 59.1 per cent in the period under review. The PSX asked Khairpur Sugar Mills Ltd, a seller of sugar and by-products with just 5 per cent of free-float, to explain why its share price rose from Rs46.22 on March 15 to Rs72 on April 13, reflecting an increase of 55.7 per cent in about a month.

    Lastly, the stock exchange sought an explanation for the substantial share price increase from Metropolitan Steel Corporation Ltd, which makes ribbed bars, wire rods, bailing hoops, wires, transmission towers and cold profiles. The steel maker’s share had no trading on March 15, with a closing rate of Rs22.19 on March 16. Its closing rate on April 12 was Rs35 apiece, which shows the increase in the stock rate was 57.7 per cent over the period under review. The shares of the company were not traded on April 13.