news story Archives - Page 8 of 9 - RIAA Barker Gillette

RIAALAW and Barker Gillette LLP merge to give global reach

Posted on July 26, 2016 - 1:31 pm by riaabgmanager

Having worked closely for many years, the decision was made to formalise the relationship between the two firms and bring together their vast experience and expertise, providing a coordinated and legal service.

RIAALAW brings expertise to the alliance in project finance, M&A, banking and corporate finance, intellectual property, international trade, and dispute resolution, with a specific industry focus on energy, telecommunications, infrastructure, mining and healthcare sectors.

Barker Gillette LLP, incorporating Lewis McMullan Jacobs, is a high-profile London-based practice with specific expertise in corporate and commercial; dispute resolution and commercial litigation; commercial and residential property; employment law; private client; family law; and regulatory, serious fraud and business crime.

Together they give clients a highly personal, formidably resourced legal capability in several jurisdictions.

Global Reach Picture (B0903430xB762D) (2)

Income tax exemption limit to be increased

Posted on July 4, 2016 - 12:58 pm by riaabgmanager

In a major development, the government has decided to enhance the basic income tax exemption limit to Rs 500,000 from the existing Rs 400,000 for the salaried class in the budget for the financial year 2016-17, Dawn has learnt. Last time, the exemption threshold was increased to Rs 400,000 from Rs 350,000 in the 2012-13 budget. A well-placed source in the Federal Board of Revenue (FBR) told Dawn that significant changes were also proposed in income tax slabs. The relief will be mostly given to the salaried class in lower brackets.

The source said the government was also considering introducing two new laws for declaration of foreign assets and control of foreign exchange. One of the laws will provide legal cover to the people who have not yet declared their overseas income and assets. At present there is no law which binds a person to declare foreign assets. The source said the draft law on voluntarily declaration of assets will be part of the budget. About 20 countries, including the US, Britain and India, have such laws to document overseas assets of their nationals.

Asked about the legality of undeclared assets, the source said the government in consultation with opposition parties would have to come up with some amnesty scheme. However, the source added, it would be difficult for the government to announce the scheme in the budget because of deadlock over the Panamagate issue. The undisclosed overseas assets to be covered in the proposed law will be immovable such as property. The proposed law — Undisclosed Foreign Income and Assets Bill 2016 — has already been vetted by the law division. It has been proposed to allow whitening of undeclared foreign assets of Pakistani nationals at a tax rate of 15pc without payment of any penalty.

Some tax officials are of the opinion that the government can extend the scheme to non-public office holders. According to the draft law, in case of non-declaration of assets held outside the country, the assets of equivalent value in Pakistan should be forfeited under the provisions of the law, along with other severe penalties. The other law proposes an amendment to the Foreign Exchange Regulation Act (FERA) to get hold of the black money held abroad. Under a new section proposed to be inserted in FERA, if a person holds any foreign exchange, foreign security or any immovable property outside the country, the equivalent value of property in Pakistan can be seized by following a prescribed procedure.

The amendment was proposed to get hold of a person who is holding assets in a tax haven in violation of FERA. The power of seizure under FERA is in addition to the penal action under the Income Tax Ordinance 2001. The FBR will also put in place a tool box of measures to arrest the outflow from the country of untaxed money and assets which will include a close coordination with the State Bank of Pakistan and monitoring of outward remittances, the source said.

Source: Dawn: Income tax exemption limit to be increased

Non-resident companies: FBR issues separate procedures/conditions

Posted on July 4, 2016 - 12:51 pm by riaabgmanager

The FBR has amended Rule 80B of Income Tax Rules, 2002 through an SRO.466(I)/2016 issued here on Thursday. The FBR has issued separate procedures/conditions for non-resident companies (having no Permanent Establishment in Pakistan) and a non-resident company having Permanent Establishment in Pakistan. According to the new procedure, a non-resident company having Permanent Establishment in Pakistan, required to be registered shall provide name of company; business address; accounting period; phone No of business; principal business activity; address of principal place of business; registration number and date of the branch with the Securities Exchange Commission of Pakistan (SECP); name and address of principal officer or authorised representative of the company; authority letter for appointment of principal officer or authorised representative of the company cell phone of principal officer or authorized representative of the company and email address of principal officer or authorized representative of the company.

A non-resident company not having Permanent Establishment in Pakistan, required to be registered shall provide name or company; business address in the foreign country; name and nationality of directors or trustees of the company; accounting period; name and address of authorized representative of the company; authority letter for appointment of authorized representative of the company; cell phone of authorized representative of the company; email address of authorized representative of the company; principal business activity and tax registration or incorporation document from concerned regulatory authorities of the foreign country.

Source: Business Recorder: FBR issues separate procedures/conditions

CGT on securities increased for non-filers

Posted on July 4, 2016 - 12:48 pm by riaabgmanager

The government has increased the capital gains tax (CGT) rate on disposable securities for the non-filers, while rates are kept unchanged for the filers.

The Finance Bill says the capital gains tax rate will remain at 15% on securities held for less than a year, while non-filers will pay at the rate of 18%. “In case holding period of securities is more than a year but less than two-year, CGT would be imposed at 12.5% for filers and at 16% for non-filers,” it added. Where the holding period of securities is more than two years, but the security was acquired on or after 1 July 2012, capital gains tax will be 7.5% for filers and 11% for non-filers. There will be no capital gains tax on securities acquired before 1 July 2012.

The government has also imposed a CGT of 5% on filers and non-filers on future commodity contracts entered into by the members of the Pakistan Mercantile Exchange. Capital gains derived from the sale of immovable property are fixed at 10% where the holding period of immovable property is up to five years; there will be no CGT on properties held for more than five years.

Source: The News: CGT on securities increased for non-filers

Rules for shareholders’ protection fund approved

Posted on July 4, 2016 - 12:47 pm by riaabgmanager

The government has approved the rules to set up and operate a centralised customer protection compensation fund by the securities exchanges for customers, a statement said on Tuesday. The statement said the federal government approved the draft Customers Compensation Fund (Establishment and Operation) Rules, 2016, framed under the Securities Act, 2015. The Securities and Exchange Commission of Pakistan (SECP) also drafted the ‘Centralized Customer Protection Compensation Fund Regulations, 2016’, to give effect to the rules.

The draft regulations and rules have been notified in the official gazette, and have also been placed on the SECP’s to seek public comments thereon latest by June 21 and July 6, respectively. “These draft rules and regulations have been framed to provide for the establishment and operation of a centralized customer protection compensation fund by the securities exchanges for customers of securities brokers,” the statement said. “The fund shall be established as a trust to compensate customers of defaulter brokers. This arrangement shall ensure that assets of the fund are kept segregated from assets of the securities exchanges. In order to keep the fund at sustainable levels the sources of contributions to the fund have been identified along with the manner of utilisation of the fund in cases of defaults.”

The SECP said the framework envisages the fund to be administered by trustees, “who are fit and proper to ensure that only capable individuals manage the fund.” “The rules have been framed after detailed study of international best practices and IOSCO (International Organization of Securities Commissions) principles for investor protection,” it said.

Source: The News: Rules for shareholders’ protection fund approved

Wheeling of electricity: Nepra approves regulations

Posted on July 4, 2016 - 12:44 pm by riaabgmanager

According to Nepra’s Wheeling of Electric Power Regulation 2016, a generation company can sell its electricity to Bulk Power Consumer (BPC) at any location in the country. The consumers will be required to pay the cost of transporting of electricity (wheeling) for using NTDC/DISCO system, in addition to the cost of generation, to be mutually agreed between the generator and BPCs.  Nepra’s spokesperson said that notification of Nepra Wheeling of Electric Power Regulations 2016 is an important milestone towards opening the market to small and medium sized generators which will encourage them to sell electricity to their potential buyers. DISCOs at the same time will be required to maintain and improve their service quality to retain their customers while they would also financially benefit by receiving wheeling charges paid by the generation companies. With the involvement of private sector generators at transmission and distribution levels, not only the economy will get a positive boost, it is expected that the load demand on the system will be reduced considerably, enabling DISCOs to reduce load shedding, the spokesperson added.

The “wheeling” or “wheeling services” means the use of the distribution system of the Disco for the transport of electric power. Official sources told The News, the wheeling meters with technical specification specified by the Disco will be installed at entry and exit points of DISCOs to measure the electrical power entering and exiting the Disco network. Now many BPCs, including real estate projects and industrial zones, can easily get uninterrupted power supply from a Genco that falls in the Disco jurisdiction.

Notification of Nepra Wheeling of Electric Power Regulations 2016 is an important milestone towards opening the market to small and medium size generators which will encourage them to sell electricity to their potential buyers. Discos at the same time will be required to maintain and improve their service quality to retain their customers while they would also financially benefit by receiving wheeling charges paid by the Gencos.

With the involvement of private sector generators at transmission and distribution levels, not only the economy will get a positive boost, it is expected that the load demand on the system will be reduced considerably, enabling Discos to reduce load shedding. One of the key features of the regulations is the facilitation of dedicated transmission/distribution infrastructure. Under this concept where technical limitations do not allow generation company, using Discos/transmission company’s network, it may construct a dedicated transmission or distribution system through its own expense to supply electric power to its authorised consumer.

The regulations on wheeling will go a long way in creating a competitive market which will benefit the consumers and all the stakeholders in the power sector of Pakistan. Discos are liable to offer non-discriminatory open access to its distribution and inter-connection services to the applicants. The Disco shall enter into a wheeling agreement with the applicant within 30 days of the acceptance of the application and a copy of the agreement shall be submitted to Nepra within seven days of execution of the agreement. The wheeler of power shall have the option of renewal after expiration of the original term of the agreement.

A Genco may construct a dedicated distribution system from its own expense to supply electrical power to its authorised bulk power purchasers (BPCs). Such dedicated distribution system shall be handed over to Disco for ownership, maintenance and operation. However, the cost incurred by the generation company for setting up the distribution system will be recovered by the generation company through the wheeling charges. The Disco shall not connect such dedicated distribution system to its other distribution network without the consent of Genco.

The Disco shall acknowledge the receipt of the application within three days of the receipt of the application if the same is complete and contains the requisite information for processing the application: provided that any application which is incomplete or is not accompanied by the required information shall be returned within three days of filing thereof, identifying in writing the deficiencies in the application and the applicant shall be given a reasonable time to re submit the application.

Source: Business Recorder

Excessive tax deducted from non-filers: law may be amended to allow adjustment

Posted on July 4, 2016 - 12:41 pm by riaabgmanager

It is learnt that the proposed amendment is in line with the order passed by the Lahore High Court (LHC) wherein LHC ordered for adjustment of extra tax deducted by applying rates of non-filer to a petitioner. This amendment will ultimately encourage non-filers to become filer by filing their tax returns.

LHC’s order came in response to petition filed by a tax lawyer Waheed Shahzad Butt challenging the collection of enhanced rates of income tax by treating his status as Non-Filer (Inactive) on the Active Taxpayer List i.e. ”ATL” issued by FBR. Later on the Federal Government proposed a vital amendment in the law and a new sub section (4) has been proposed to be inducted in Section 169 of the Income Tax Ordinance, 2001 which states “Where the tax collected or deducted is final tax under any provision of the Ordinance and separate rates for filer and non-filer have been prescribed for the said tax, the final tax shall be the tax rate for filer and the excess tax deducted or collected on account of higher rate of non-filer shall be adjustable.”

Source: Business Recorder – Excessive tax deducted from non-filers: law may be amended to allow adjustment

Investors discouraged: NEPRA proposes cut in solar, wind power tariffs

Posted on July 4, 2016 - 12:40 pm by riaabgmanager

The National Electric Power Regulatory Authority (Nepra) has recommended a significant reduction in solar and wind power tariffs that may discourage future investment in renewable energy resources. The recommendation came after member tariff from Punjab, Khawaja Naeem, completed his tenure in Nepra. Taking a suo motu notice, the regulator has proposed a cut of Rs1.44 per unit in the tariff for solar power projects in Balochistan. The new price will be Rs9.45 per unit. It has also proposed a reduction of Rs1.53 per unit for solar projects in Punjab that will take the tariff to Rs10 per unit.

For wind power plants, Nepra proposed a hefty tariff reduction of Rs4.10 per unit. The new tariff will be Rs8.60 per unit. It has decided to set per megawatt cost of solar power at $1.8 and per megawatt cost of wind power at $1.93. Nepra also took the opinion of different experts who suggested that the tariffs should be reduced. Now, it has sought comments of stakeholders including the Ministry of Water and Power. It will announce its decision after holding a hearing.

Last year, foreign investors had warned the government and power regulator that they would stop work on solar power projects worth billions of dollars because of the cut in tariff. Prospective foreign investors, who have planned to establish solar energy projects in Pakistan, are increasingly worried over the proposed reduction in tariff – the high rate of which was a major incentive for them. They are also uncertain whether their projects would see the light of day, though they have invested millions of dollars in feasibility studies and acquired letter of intent from the government.

Source: The Tribune: Investors discouraged: NEPRA proposes cut in solar, wind power tariffs

Cross-adjustment of input tax

Posted on July 4, 2016 - 12:35 pm by riaabgmanager

The Federal Board of Revenue (FBR) has conveyed to provinces that the provincial authorities can also review corresponding provisions in their respective laws in response to the Finance Bill 2016 amendment to disallow cross-adjustment of input tax against provincial services.

Sources told Business Recorder here on Saturday that Chairman FBR Nisar Muhammad Khan made these remarks during a recent meeting of the FBR with the Punjab Revenue Authority (PRA) to discuss and resolve the issue as highlighted by the Minister for Finance, Government of Punjab.

Moreover, the FBR has rejected the provincial interpretation regarding capital gains taxation on the sale of immovable property through the Finance Bill 2016. The FBR responded that omitting the phrase “on capital gains” from S. No 50 of the Federal Legislative List in the Constitution only removes capital value tax on immovable property from the purview of federal legislative powers. Capital gains are globally treated as income, and taxes on capital gains are also treated as income taxes. As per the constitution, all taxes on income, except agricultural income, are within the competence of federal legislature, the FBR added.

The first issue concerns the deletion of provincial sales tax from the definition of ”input tax” in the Sales Tax Act 1990. During the meeting, Chairman, FBR, explained the reason for the proposed deletion of the clause. Tax authorities informed provincial authorities that MoUs were signed with the provincial revenue authorities to settle cross-input tax adjustments. But these Memoranda of Understandings (MoUs) were being rendered ineffective because one province is insisting on irrational reconciliation parameters through which input adjustments worth a few thousand rupees only get reconciled against adjustments of Rs 30 b. Accordingly, it was decided to propose to omit a related clause allowing cross-adjustment of input tax. He also highlighted that the provinces could review corresponding provisions in their respective laws, as the sources quoted the Chairman FBR as saying.

The Punjab Revenue Authority (PRA) Chairman stated that the proposed amendment would affect the businesses. Therefore, the same may be reconsidered. He maintained that if the omission is carried out as proposed, PRA would also review the corresponding clauses of its law. He, however, maintained that the omission should not affect the past adjustments made and that FBR should finalise the settlement process as was underway. The FBR Chairman assured that the reconciliation process would be completed and efforts would be made to finalise the same in July 2016.

The second issue concerns the advance tax under proposed section 236W from provincial sales tax registered persons. On the said issue, the PRA Chairman stated that the proposed new section was a harsh measure and it would have a cascading effect. He maintained that FBR has all the provincial data available through Pakistan Revenue Automation Limited (PRAL) and can collect the proposed tax directly. He also expressed apprehension that in the event of some lapse in the required collection, FBR authorities may resort to some coercive measures, as has been observed in the past.

The FBR Member (SPR&S) informed that the proposed measure was only for non-filers and that the tax to be collected was adjustable. He maintained that FBR would consider providing in the law that no coercive measure be taken against the collecting agent for the proposed section. The Chairman, FBR, assured PRA that their reservations have been noted and the same will be duly discussed. On the insistence of the PRA Chairman, he agreed to propose an alternative mechanism for collecting income tax from the service providers registered with the provincial revenue authorities by making suitable amendments in the Finance Bill, which will absolve the provincial revenue authorities from the proposed role of withholding agent. However, this proposal would be subject to the approval of the Federal Government.

Source: Business Recorder

Speak to Mayhar Kazi today regarding your cross-adjustment of input tax queries.

Proposed Benami Act Provisions not apply to deals made in names of spouses, kin: FBR

Posted on July 4, 2016 - 12:31 pm by riaabgmanager

According to the brief Federal Board of Revenue (FBR) submitted to the National Assembly Standing Committee on Finance, the proposed bill restricts the right of any person who is claiming to be the real owner to recover such property. In addition, no person would be able to retransfer such property to the beneficial owner. The FBR stated that the problem of property held Benami has been causing concern to the tax authorities and past practice and experience shows that Benami transactions have often been resorted for furthering illegal or questionable objects, including the evasion of taxes. The assets, which are taken through illegally-earned money, can be used for evasion of material amounts of taxes or something more serious like financing terrorism.

  The proposed legislation for regulation of the Benami transactions was initiated in 2008 by the Ministry of Finance; however the legislation could not materialise. The proposal has also been forwarded by Tax Reform Committee (TRC) in the consultative process of collecting budget proposals. Moreover there is a realisation that the Benami Transactions (Prohibition) Act is in operation in neighbouring country (India), while Pakistan is two decades late on the issue, the FBR said. The FBR stated that the legislation defines the Benami transaction as an arrangement where property is held by a person (other than in fiduciary capacity) on behalf of another person who has paid for it; or the transaction is made for a property in a fictitious name; or the owner of the property is not aware of or denies knowledge of such ownership. The Bill prohibits all persons from entering into Benami transactions. Any property held in “Benami” would he confiscated by the federal government. Once a property is confiscated, all rights as well as title of such property would vest completely with federal government and no compensation would be payable.

  The proposed legislation would not be applicable retrospectively and it would be applicable to those transactions which will be executed after the said legislation will come in to force. Any person aggrieved by an order of the Adjudicating Officer would have the right to appeal to the Federal Appellate Tribunal proposed to be headed by a serving or retired Judge of a High Court. Appeal against the orders of the Tribunal would lie before the High Court. In addition to that, Special Courts will be established for trial of an offence punishable under the proposed legislation, FBR added. The bill would strengthen the law through empowering provisions prohibiting holding property as Benami and restricting the right to recover or transfer property held in Benami. The bill would also establish Adjudicating Authority, set up Appellate Tribunal and specify the penalty for entering into a Benami transaction and provisions for confiscation of Benami properties, it added.

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