Latest news with #TaxLawsAmendmentBill
Express Tribune
30-04-2025
- Business
- Express Tribune
NA panel dilutes tax bill 2024
The National Assembly Standing Committee on Finance on Wednesday adopted a softer version of a bill to ban purchases of cars, investment in stocks and properties beyond a certain value by ineligible persons but linked its approval by the National Assembly with budget. Headed by PPPP MNA Syed Naveed Qamar, the committee instructed that the modified version of the Tax Laws (Amendment) Bill 2024 be included in the Finance Bill 2025. The committee further decided that the modified bill's approval will be secured from the National Assembly along with next fiscal year's budget. Unlike in the past when the National Assembly standing committee on Finance was not allowed to discuss the Finance Bill, this time the committee would go through the new taxation proposals after changes in the rules. The modified version is quite different from the original bill proposed by the Federal Board of Revenue. It exempts a major segment of the society from the applicability of the law. The definition of the eligible persons has been expanded and the list of the assets that can be used to justify the purchase has been enlarged. The committee decision came on the recommendation of a sub-committee in which PTI's Usama Mela and MNA Jawed Hanif played important roles. The government had introduced the Tax Laws Amendment Bill in the National Assembly to ban economic transactions by the ineligible persons – the ones who do not have sufficient declared cash equivalent resources to buy a property. According to the proposed legal amendment, a person cannot buy a property until the assets declared in his last year's tax returns are sufficient for the purchase or the person will submit a new statement to disclose the source of buying the property. The FBR has not yet developed a real time safe technological solution where the buyer is required to file the declaration. The FBR had proposed Section 114C as an additional layer of declaration and the FBR still had the legal authority to verify those assets, once the purchaser submitted its income and wealth statement every year. There are two significant amendments by the standing committee. According to a change in the proposed Section 114C, the new law cannot be implemented without determining the value threshold by the federal government. The "property transactions conducted by common citizens and the lower- and middle-income class, particularly first-time buyers or those purchasing their primary residential property, are not impacted" by the new legislation. The definition of the eligible persons has also been expanded by including the immediate family members' assets to justify the purchase. Importantly, the definition of "sufficient resources" has also been enlarged by adding local and foreign currencies, fair market value of gold, net realised value of stocks, bonds, receivables or any other cash equivalent assets as may be prescribed". The barter transactions have also been allowed to settle the value of one plot against another plot. In the past, the government had also imposed withholding taxes to encourage people to become tax filers. But people have been filing the tax returns just for the sake of undertaking a property transaction and the FBR seemed satisfied with only getting an extra amount of taxation instead of going after them for not fully paying their taxes on actual incomes. It was also decided that even if Section 114C was passed in the budget; it would not come into effect until the exemption value was notified by the federal government. The committee also amended the clause related to the immediate family members and introduced the definition of dependent children instead of using the terms son and daughter. The non-resident Pakistanis and the listed companies will be exempted from filing the additional information disclosure. Some of the members of the committee had in the past expressed reservations about relaxing these definitions. The committee's decision will exclude 95% people from the purview of the new amendments and it means that there can never be true documentation in Pakistan," said MNA Jawed Hanif Khan in February this year. ZTBL turns around The National Assembly expressed reservations against the government's decision to sell the Zarai Taraqiati Bank Limited despite it having been turned around and being the only specialised bank that serves the under-privileged farming community. The committee decided to raise the matter of the ZTBL privatisation in the National Assembly to put pressure on the government to drop the transaction. The ZTBL's listing in the privatisation programme has stopped the progress on the new information technology programmes and we cannot even hire a person despite pressing needs, the ZTBL president Tahir Yaqoob Bhatti informed the standing committee. Being a three-time former privatisation minister I can sense that the bank's privatization cannot happen in the next two years and there is no rationale to stop the important work at the bank, remarked Syed Naveed Qamar.
Express Tribune
12-02-2025
- Business
- Express Tribune
Relief for realty sector as NA panel defers new law
The National Assembly Standing Committee on Finance on Tuesday delayed the approval of an amendment bill which proposed a ban on the purchase of properties without upfront disclosure of the source of the money for buying the asset. The delay in the approval of the Tax Laws Amendment Bill provided a major relief to the realty sector that could now undertake property transactions without the requirement of upfront disclosure of the source of the purchase. The committee decision came on the recommendation of a sub-committee. As a result, transactions such as buying a car or investing in the stock market could also be undertaken without upfront disclosing the source of the purchases. Headed by Syed Naveed Qamar of the Pakistan Peoples Party (PPP), the committee adopted a report of its sub-committee, which had recommended "deferring the proposed new section 114C until the Federal Board of Revenue (FBR) finalised the necessary technological changes in its online systems and applications". The government had introduced the Tax Laws Amendment Bill in the National Assembly to ban economic transactions by the ineligible persons – the ones who do not have sufficient declared cash equivalent resources to buy property. Bilal Kayani of the Pakistan Muslim League-Nawaz (PML-N) chaired the sub-committee meeting, which proposed a number of amendments to the bill, including deferment of the immediate implementation of the new clause, regarding the restrictions on the property transactions. According to the proposed legal amendment, a person cannot buy a property until the assets declared in his last year's tax returns are sufficient for the purchase or the person will submit a new statement to disclose the source of buying the property. The FBR has not yet developed a real time safe technological solution where the buyer is required to file the declaration. "We feel that section 114C should not be approved by the Standing Committee until the technological changes are made and a demonstration is given to the committee about its accuracy and effectiveness," said Kayani. The committee adopted the sub-committee report and deferred the matter till June. It gave two-month for the development of the software to the FBR. "It seems that there is a consensus to give relief to the real estate sector," FBR Chairman Rashid Langrial said. Langrial had conceived the new proposal after it emerged that the FBR did not have the post-transaction capacity to verify the source of buying the asset. The post-transaction success rate after the purchase of the property was only 3%, according to the FBR. Kayani said that the Section 114C was an additional layer of declaration and the FBR still had the legal authority to verify those assets, once the purchaser submitted its income and wealth statement every year. The Minister of State for Finance Ali Pervaiz Malik said that the non-filers were used as revenue spinner sources. The minister agreed that the FBR did not take any action despite having the entire data of their transactions. People have been filing the tax returns just for the sake of undertaking a property transaction and the FBR seemed satisfied with only getting an extra amount of taxation instead of going after them for not fully paying their taxes on actual incomes. "By blocking the economic transactions, the government will be adversely affecting the economy and the Section 114C is a completely flawed legislation, said Nafeesa Shah of the PPP It was also proposed that the economic transactions by poor; lower-middle income group and the first time buyers of a property should also be exempted from upfront questioning. The committee did not propose a certain limit of exemption threshold for not filing the upfront statement of the source of purchase. It recommended that the power to determine such exemption threshold should rest with the federal government, instead of the FBR. "The federal government may determine the value threshold for transactions affected by this restriction to ensure that property transactions conducted by common citizens and the lower- and middle-income classparticularly first-time property buyers or those purchasing their primary residential property-are not impacted," according to the committee's decision. It was also decided that even if Section 114C was passed in the budget; it would not come into effect until the exemption value was notified by the federal government. The committee also amended the clause related to the immediate family members and introduced the definition of dependent children instead of using the terms son and daughter. The standing committee expanded the definition of cash equivalent assets by including cash denomination, local and foreign currency, fair market value of gold, net realisable value of stocks, bonds, receivables or any other cash equivalent assets. It also decided to introduce the option of barter transactions, the use of capital assets for the purchase of property as part of assets that could be used to buy the property. The non-resident Pakistanis and the listed companies will be exempted from filing the additional information disclosure, according to the new proposed amendment. "The committee's decision will exclude 95% people from the purview of the new amendments and it means that there can never be true documentation in Pakistan," said MNA Jawad Hanif Khan.
Express Tribune
27-01-2025
- Business
- Express Tribune
Below-expectation results drag down PSX
KARACHI: Pakistan Stock Exchange (PSX) on Monday exhibited bearish activity on the back of a slump in global equities and weak crude oil prices. Adding to the market trouble included the uncertainty surrounding talks between the government and Pakistan Tehreek-e-Insaf (PTI), monetary policy decision by the State Bank of Pakistan (SBP) later in the day and concerns over the proposed Tax Laws Amendment Bill. Despite a promising start, when the KSE-100 index surged to the intra-day high of 716 points, the market reversed course, closing down by 1,360 points, or 1.18%, at 113,520.32. Weaker-than-expected earnings from Mari Petroleum, among other factors, dampened investor sentiment, contributing to the negative momentum. However, despite the downturn, there was cautious optimism among analysts that a potential rate cut could revive interest. Ahsan Mehanti of Arif Habib Corp commented that stocks turned bearish amid a slump in global equities and weak global crude oil prices. He added that uncertainty over the outcome of talks between the government and PTI, the SBP's policy rate decision to be announced later in the day and worries over the proposed Tax Laws Amendment Bill, which restricts non-filers from making stock purchases, played the role of catalysts in the bearish activity. At the close of trading, the benchmark KSE-100 index recorded a decrease of 1,360.16 points, or 1.18%, and settled at 113,520.32. In its review, Topline Securities stated that the market opened on a positive note, with the index touching an impressive intra-day high of 716 points. However, the momentum was short-lived as bears swiftly took charge. The index plunged to the intra-day low of 1,398 points before closing at 113,520, marking a decline of 1,360 points, or 1.18%, it said. The negative trend could largely be attributed to weaker-than-expected financial results of Mari Petroleum, which dampened investor sentiment. The company reported earnings per share (EPS) of Rs9.3, with no cash payout, which came in below market expectations and contributed significantly to the bearish activity, Topline said. The brokerage house said that Pakistan Oilfields declared 2QFY25 results, where the company posted EPS of Rs26.7, taking 1HFY25 earnings to Rs35.7 per share, along with cash dividend of Rs25 per share. JS Global analyst Muhammad Hasan Ather commented that the KSE-100 index saw a significant dip, mainly led by uncertainty about the monetary policy committee decision and a few below-expected results. Despite the downtrend, there was optimism that a substantial rate cut could positively impact market sentiment. Investors were looking forward to the results season, expecting significant dividends from some banks and fertiliser firms, Ather added. Ali Najib of Insight Securities remarked that the PSX resumed the week on a positive note, however, selling headwinds compelled the benchmark index to lose earlier gains. The main culprit behind Monday's pessimism was Mari Energy, which reported EPS of Rs9.3 for 2QFY25, significantly below street expectation of Rs12.5, with no dividend. Post-result announcement, the stock lost more than 8% and pulled the index down by 375 points, Najib observed. Later, he added, the SBP announced a reduction of 100 basis points in its policy rate that reached 12%. Overall trading volumes decreased to 494 million shares compared with Friday's tally of 632 million. Shares of 442 companies were traded. Of these, 97 stocks closed higher, 298 fell and 47 remained unchanged. Sui Southern Gas Company was the volume leader with trading in 51.65 million shares, falling Rs4.39 to close at Rs39.53. It was followed by Cnergyico PK with 50.7 million shares, falling Rs0.14 to close at Rs7.57 and WorldCall Telecom with 29.1 million shares, falling Rs0.06 to close at Rs1.73. Foreign investors bought shares worth Rs385.7 million.
