Author Topic: FEDERAL BUDGET  (Read 14260 times)

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Offline asim.786

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FEDERAL BUDGET
« Reply #39 on: June 04, 2016, 04:37:53 PM »
Is there any news about FED is it increased or static ?
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FEDERAL BUDGET
« Reply #39 on: June 04, 2016, 04:37:53 PM »

Offline Dehan

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« Reply #40 on: June 04, 2016, 04:42:30 PM »
"Suno sab ki, laiken Dehan apna apna"

Offline asim.786

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« Reply #41 on: June 04, 2016, 04:58:38 PM »
Is there any news about FED is it increased or static ?


U can check it from the below link:
http://www.fbr.gov.pk/budget2016-17/SalientFeatures/Salient%20Features_2016_Final%20at%2009.10%20am.pdf

There was news/ rumour  of  FED increase on paint industry
But not mentioned in it is FED increase on paint industry  or not
What impact on Akzo n Berger paint
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Offline Adnan

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FEDERAL BUDGET
« Reply #42 on: June 04, 2016, 08:33:37 PM »
Is there any news about FED is it increased or static ?


U can check it from the below link:
http://www.fbr.gov.pk/budget2016-17/SalientFeatures/Salient%20Features_2016_Final%20at%2009.10%20am.pdf

There was news/ rumour  of  FED increase on paint industry
But not mentioned in it is FED increase on paint industry  or not
What impact on Akzo n Berger paint

As far as i can interpret, budget is Neutral to Positive for paint industry. I could not see any negative thing in budget. Increase in PSDP budget and development of roads is positive for paint producers.

Offline Dehan

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"Suno sab ki, laiken Dehan apna apna"

Offline Rao Paras

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FEDERAL BUDGET
« Reply #44 on: June 05, 2016, 02:29:59 AM »
Is there any news about FED is it increased or static ?


U can check it from the below link:
http://www.fbr.gov.pk/budget2016-17/SalientFeatures/Salient%20Features_2016_Final%20at%2009.10%20am.pdf

There was news/ rumour  of  FED increase on paint industry

I think tax imposed at imported paints , as reported on media. Confirm it plz.
If tax imposed on imported paints, then Berger may be benificery
But not mentioned in it is FED increase on paint industry  or not
What impact on Akzo n Berger paint


Offline Omer The Researcher

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FEDERAL BUDGET
« Reply #45 on: June 05, 2016, 09:35:57 AM »
budget is not bad but cgt increased on non filers is a dampening as most of the small investors r non filers second tax on bonus shares r still there.... apart from this it was industry friendly budget 



Offline sanwar

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« Reply #46 on: June 05, 2016, 10:35:01 AM »
budget is not bad but cgt increased on non filers is a dampening as most of the small investors r non filers second tax on bonus shares r still there.... apart from this it was industry friendly budget

Just want to  mention first that I am not supporter of the current government... If we do not have better people running the government, it is fault of the silent majority who are always criticizing but they do not bother to vote the people they feel right...
Having said that I must say that not filing taxes is crime when one is enjoying nationality of any country... unless these non-filers are addressed/cornered at every level, the minor filers will continue to suffer the burden... let us hope and pray that at least the people who are enjoying profits on trading at PSX realize that not filing taxes is equivalent to stealing/sin and they become filers and contribute to this nation...

Offline Oddest

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« Reply #47 on: June 05, 2016, 10:48:03 AM »
Red is coming

Offline MZ

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FEDERAL BUDGET
« Reply #48 on: June 05, 2016, 11:37:11 AM »
Fertilizers – Positive: The government has announced a set of measures specifically aimed at providing respite to the farmers and improving the performance of the agriculture sector. This in turn would bode very well for the whole fertilizer manufactures that will benefit from higher farmer demand for urea and DAP. The reduction in GST from 17% to 5% on urea translates into an impact of PRs180-200/bag. Due to the reduction in GST, effective urea prices for farmers will decline to ~PRs1550-1600/bag, which will be reduced further to PRs1400/bag through a subsidy on urea consumption. Total burden of PRs36bn will be equally borne by the federal government and provincial governments. Apart from that it has been announced that the subsidy on di-ammonium phosphate (DAP) would continue which is expected to lead to a decline in prices from current ~PRs2850 to PRs2500. We estimate that the total amount for DAP would be ~PRs8-10bn. Since no change has been announced on GIDC on feed tariff, we expect the incentives to improve off-take and earnings for all urea and DAP manufacturers. Furthermore, higher farmer liquidity due to elimination of 7% GST on pesticides, availability of enhanced agriculture credit and reduction in tariff for tube wells would further reduce input costs for the farmer and encourage adequate fertilizer application in the upcoming months. We expect this to lead to a significant reduction in current urea inventory levels. However, since the policies are effective from 1’Jul-16, buying may be subdued in this month. The government has allocated PRs7bn subsidy for urea imports for FY17 as only PRs5bn was Futilized in the last fiscal year.
Cements – Positive: The government has jacked up its target for development spending by 20% as progress on many projects under China Pakistan Economic Corridor accelerates. The higher PSDP, largely dominated by infrastructure and construction project, will set the stage for yet another year of strong double-digit growth in cement offtake. Other favorable measures include reduction in custom duty from 5% to 3% and increased custom duty for the import of clinker to 11%.We believe cement companies will be able to comfortably pass on the impact of higher FED (increased to PRs1000/ton from ~PRs420/ton) to end product prices (net impact on prices of 5-5.5%).
Textiles – Positive: Extension of relief measures announced in the last budget like reduced Export Refinance Rates and Long Term Refinance rate, continuation of duty drawback at various rates on textile products and exemption of custom duty on import of machinery. The government has yielded a major demand of textile and other export sector and brought them to no-tax, no-refund policy for GST; hence, relieving the sector from the hassle of going through tax refund process. Furthermore, the government has promised to refund stuck-up GST claims by Aug-16. The simplification of tax process on raw material and energy consumption will result in direct relief on balance sheet (reduced working capital, hence low borrowing) and profit (reduced financial charges). Contrary to pre-budget expectation, the government has not reduced the levy on gas or promised any major benefit on early surrender of export proceeds.
Autos – Neutral: We believe the proposal of 3% advance tax to be collected by the financial institutions at the time of financing/leasing of the vehicle could be slightly negative for financing-backed sales (approx. 35%-40% of total industry sales). However several pro-agriculture income measures suggest demand from rural areas should gain traction in FY17. Removal of 10% RD on import of bead wire should be positive for tyre manufacturers (GTYR). Apart from this, as expected the long term auto policy recommendations have been incorporated in the FY17 budget.
Banks – Neutral: Unlike last year, this year’s budget has proved to be largely neutral for the banking sectors. The imposition of 4% super tax on bank’s earnings will likely chip off bank’s earnings by 6.1% in CY16. The government’s drive to broaden the tax net via increasing cost of non-compliance in the form of withholding tax on banking transaction or cash withdrawal may impact bank’s asset growth, and deposit mix. The government targets to raise PRs452bn funds from banks for deficit financing target which may account for up to ~43% of likely asset growth in FY17; hence, the need to grow advances to place expected asset addition remains.
Power – Neutral: Reduced subsidy burden (down 33% YoY) and focus on increasing transmission and distribution network coupled with addition of electricity generation capacity bode well for the sector. However, the government has stopped short of announcing any framework for reducing the existing stock of circular debt. The imposition of super tax will also be applicable on IPPs, in our view.
Oil & Gas – Neutral: Targeted Petroleum Levy amount is set at PRs150bn, up 11% YoY which is broadly in-line with demand growth in retail fuels, hence, implying the petroleum levy will remain unchanged in 2017. Further unwinding of power sector subsidy is positive step and will likely improve cash flow outlook though the actual implementation of the measure remains to be seen. Interestingly, GIDC for feedstock gas for fertilizer remains unchanged so does overall target of GIDC of PRs145bn. There is no budgetary measure which can directly impact E&P companies. Non-event for refining as increase in custom duty on petroleum prices is likely to be a pass-through.
Steel-Neutral to Negative: The government has hinted at increasing the GST imposed on consumption of electricity for steel producers. However, we await clarity on quantum of increase (current rate of GST is PRs9/kwh). Meanwhile, steel producers will benefit from reduction in custom duty from 5% to 3% on the import of scrap.
Consumers – Negative: We believe the recent budget would have a negative impact on dairy producers such as Engro Foods and Nestle. The government has removed zero-rated status of the milk products and placed it in “tax exempted” category. Although no GST has been imposed on final milk products, the change may make the sector ineligible from claiming refund on sales tax paid on inputs. Furthermore, government has levied 25% regulatory duty on powdered milk products which is expected to affect brands such as Nestle’s Everyday and Efoods’ Tarang. We await further clarity from management regarding their strategic response to these changes before giving any estimate of impact on the earnings of the firms. The government has also continued with its tradition of increased FED on cigarettes and aerated water (carbonated water). A set of changes have been proposed to reduce the customs duty from 5% to 2% on livestock and poultry. However, the government has simultaneously proposed an increase in GST on ingredients of poultry feed from 5% to 10%.
Insurance – Negative: The increase in tax rate for dividend income and capital gains will likely hurt earnings of both life and general insurance companies. Based on dividend income and capital gains booked in 2015, we estimate the impact of 10%-15% for Adamjee Insurance, New Jubilee Insurance and New Jubilee Life insurance. That said, the government has announced tax credit for life/health insurance and start of health insurance policy for poor with target of PRs9bn premium in 2015 which will have positive impact on sector growth.

KASB

Offline rsuleman

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FEDERAL BUDGET
« Reply #49 on: June 05, 2016, 12:23:00 PM »
budget is not bad but cgt increased on non filers is a dampening as most of the small investors r non filers second tax on bonus shares r still there.... apart from this it was industry friendly budget
Just want to  mention first that I am not supporter of the current government... If we do not have better people running the government, it is fault of the silent majority who are always criticizing but they do not bother to vote the people they feel right...
Having said that I must say that not filing taxes is crime when one is enjoying nationality of any country... unless these non-filers are addressed/cornered at every level, the minor filers will continue to suffer the burden... let us hope and pray that at least the people who are enjoying profits on trading at PSX realize that not filing taxes is equivalent to stealing/sin and they become filers and contribute to this nation...
I agree with you the ethical aspect highlighted by you.
On the other hand the authorities are also making the not filing uneconomical, by increasing the difference in applied rates of WHT, between filer and non-filer.
Those who are avoiding the filing of tax return, for economic reason only, need to make a comparison of the total tax outlay between filing and non-filing, under the emerging circumstances. There is a possibility that such people find that the filing the return is more economical now than not filing it.
Therefore, it is advisable that an opinion of a tax consultant is sought to find the tax exposure in the two cases in specific circumstances of an individual and make a decision accordingly. 
Keep an open mind to new ideas. But, ALWAYS do your own homework and use common sense to figure out what's best in your situation.

Offline MZ

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FEDERAL BUDGET
« Reply #50 on: June 05, 2016, 01:24:37 PM »

    The PML-N led government unveiled their fourth budget on June 3, 2016 centered on the revival of (1) the agriculture and the exports sectors and (2) growth.
    The industrial sector has also been provided extension in tax credits for Greenfield Industrial Undertakings, BMRs, establishment of new industry and expansion of existing plants.
    The total outlay of the budget has been set at Rs4,895bn (9% YoY higher), with total resource mobilization of Rs4,442bn (4% YoY higher).
    The government has set a GDP growth target of 5.7% for FY17 compared to 4.7% achieved in FY16. We believe the growth target set is ambitious and we expect GDP growth to clock in at 5.2% in FY17.
    Government is expecting to close FY16 with a fiscal deficit of 4.3%, and has set a target of 3.8% for FY17.
    In order to achieve fiscal discipline, the government has proposed to increase cost of non-compliance with tax laws by continuing/enhancing its policy of differential taxation for filers and non-filers.
    Apart from increasing the cost of non-compliance, the government has (1) extended Super Tax for another year, (2) taxed Builders and Land Developers and (3) enhanced/introduced FED and Sales Tax on certain sectors.
    We believe the budget, while being pro agriculture and pro-growth, will test market resilience with more negatives (bourse & sector specific) than positives (sector specific).
    We are of the view that Fertilizers and Textiles have emerged as key gainers. Focus on construction of highways in development plan will favor Attock Petroleum Limited (APL), while removal of custom duty on bead wire is likely to attract attention to General Rubber and Tyre (GTYR).  On the other hand, we can expect pressure on Insurance, Steel and the Dairy sectors.
JS

Offline roadkashehzada

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FEDERAL BUDGET
« Reply #51 on: June 05, 2016, 01:42:59 PM »
if I am making money and am a non filer that means i m a thief. either i should bear extra cost or should file my tax return. no justification of evading tax

Offline rsuleman

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FEDERAL BUDGET
« Reply #52 on: June 16, 2016, 02:47:59 PM »
Group taxation relief: Government under pressure to withdraw proposed restrictions
By Shahbaz Rana
Published: June 16, 2016
ISLAMABAD: The government appears to be under immense pressure to withdraw proposed restrictions on the relief of group taxation, which analysts say, if passed by the National Assembly, may result in delisting of companies from capital markets and could compromise transparency.
In budget 2016-17, the federal government has proposed to impose restrictions on big businesses, limiting their relief in taxation on inter-corporate dividend income and the right to exchange group’s losses with profits of the subsidiaries. The proposal is aimed at generating over Rs4 billion in additional taxes for the Federal Board of Revenue (FBR).
However, analysts and lobby groups of big firms say that damages will be far greater than the additional revenue FBR will generate. They say it will encourage fragmentation in big firms.
There is a pressure on the government to withdraw these restrictions in the budget windup speech, which the finance minister is expected to give on either Thursday or Friday. The holdup in the speech is being caused by the delay in finalisation of budget recommendations by Senate Standing Committee on Finance.
However, Finance Minister Ishaq Dar told The Express Tribune that he has not yet made any decision whether to withdraw the proposed restrictions.
The Overseas Investors Chamber of Commerce and Industry (OICCI) has also written a letter to the finance minister, requesting him to review the decision, along with various other lobby groups who are pushing for these measures to be discarded.
The concept of group taxation and group relief was introduced in the Finance Act 2007 through amendments in section 59-B following a detailed study carried out by a Task Force led by the then Chairman FBR.
This was an important initiative for Pakistan’s taxation system and economy aimed at streamlining the group ownership structure and centralising the cross-company ownership structure to make the corporate sector international competitive.
 “The fear is that these restrictions will discourage corporatisation,” said PTI’s Member National Assembly Asad Umar during a meeting of National Assembly Standing Committee on Finance.
The OICCI has proposed that the amendments that have hit this group relief hard should be withdrawn and that tax exemption on inter-corporate dividends should continue. If the government does not reverse its decision, sister companies will pay the dividend tax twice.
The OICCI wrote that imposing restrictions is a case of levying more taxes on the compliant tax sector and defeats the whole purpose of encouraging formation of large entities with resources to promote diverse investment in the country.
It also said that the proposal, to restrict the right to surrender losses within a group to the percentage holding of the group in the entity surrendering the losses, is not in line with the concept of group taxation under the international acceptable norms. This is a major deviation from the present scheme and should therefore not be implemented, it added.
The FBR has also disallowed depreciation and business losses in post-tax holiday period, which will also erode profits of the companies.
In yet another hit on the big companies’ profits, the federal government has proposed changing the income tax calculation method for collecting super tax from big businesses and high net worth individuals, imposed to meet financing needs of temporarily displaced persons (TDPs) and the security establishment.
The government has disallowed adjusting business losses and cost of depreciation of plants and machinery against the company’s current year’s income. This change in definition would generate an extra Rs10 billion, increasing the total super tax collection to roughly Rs35 billion.
Published in The Express Tribune, June 16th, 2016.

http://tribune.com.pk/story/1123727/group-taxation-relief-government-pressure-withdraw-proposed-restrictions/
Keep an open mind to new ideas. But, ALWAYS do your own homework and use common sense to figure out what's best in your situation.

Offline Farzooq

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Re: FEDERAL BUDGET
« Reply #53 on: June 12, 2019, 01:14:31 PM »
Pakistan Budget Review- June 12, 2019

A Stitch in Time Saves Nine

Blueprint of the FY20 Budget

Blue print of the FY20 Budget demonstrates a key objective of the government, that is, to achieve macroeconomic stabilization via revenue mobilization along with wider documentation of the economy.
 

1)   Limit the Primary Deficit to 0.6% of GDP to meet the prior conditions of the IMF

a)   Increase the Tax Revenue to PKR 5.55trn, a growth of ~35% YoY

      i.  Eliminate zero rating for five export oriented sectors,

     ii.  Increase in additional custom duty from 2% to 4% and 7% on slabs of 16% and 20%, respectively

    iii.  Restoration of Normal Tax Regime for steel sector

    iv.  Higher income tax rates on salaried and non-salaried persons,

     v.  Increase GST on Sugar to 17%,

    vi.  Impose higher FED on Cement, Autos and Cigarettes,

   vii.  Streamline taxation regime for the Real Estate Sector,

  viii.  Levy higher taxes on income from debt investments and dividends from power generation companies, and

    ix.  Impose higher tax rate on rental incomes.

b)  Increase Non-Tax Revenue via Privatization of government entities like NPPMCL (National Power Parks Management Company Limited)

c)   Reduce expenditure for running civil government by 6% from PKR 460bn to PKR 431bn.

2)   Promote economic growth, increase industrialization and job creation

•   Allocate funds for procurement of land for Naya Pakistan Housing Scheme,

•   Allot 40% higher Federal PSDP allocation from PKR 500bn to PKR 701bn,

•   Impose higher tax rate on investment in Government Securities for banks to potentially increase lending to private sector,

•   Exempt custom duty on import of raw materials for various industries, and

•   Continue exemption of custom duty on import of plant and machinery.

3)   Promote exports to increase foreign currency inflow, generate employment and economic growth

•   Continue grant of subsidized loans i.e. LTFF and ERF,

•   Supply of energy i.e. electricity (Usd 7.5/KWh) and gas (USD 6.5/mmbtu) at subsidized rates to be continued for exporters,

•   Extend the DLTL incentive for the upcoming years given an objective to triple textile exports with a focus on value addition,

•   Automate GST refunds to improve liquidity of export oriented sectors,

•   Streamline FBR processes related to import and export to reduce time and procedures for assistance of exporters, and

•   Reduce customs duty on import of raw materials for export oriented sectors.

4)   Discourage imports to reduce pressure on foreign currency reserves

•   Increase additional custom duty from 2% to 4% and 7% on slabs of 16% and 20%, respectively,

•   Provide incentives for import substitution of oil seeds to reduce reliance on imported edible oil, and

•   Increase spending on agricultural research to increase production of cotton while improving quality.

5)   Increase documentation of the economy to enhance tax collection while complying with the requirements of the FATF (Financial Action Task Force)

•   Enlarge tax net and increase the number of tax payers to 4mn by utilizing the NADRA database,

•   Enhance FBR real estate valuation to 85% of market values,

•   Withdraw of Amnesty for legalizing the difference between DC value and FBR Value at 3%,

•   Increase capital gains from income arising out of sale of property at normal tax rates,

•   Restrict purchase of property only through banking instrument,

•   Prosecute non-filing of income tax return,

•   Change Final Tax into Minimum Tax for Certain Persons,

•   Treat receipt of gift as normal income,

•   Reduce limit for not explaining source of investment through foreign remittance from PKR 10mn to PKR 5mn,

•   Charge 5% Additional sales tax on unregistered electricity and gas consumers whose bill exceeds PKR 15,000/month,

•   Integrate Tier 1 POS with FBR to reflect actual sales and enhance taxation from wholesale and retail trade and document the whole chain, and

•   Incentivize documentation in the retail sector.

6)   Increase pro-poor spending to reduce the impact of macroeconomic adjustment

•   Increase allocation for social protection to PKR 191bn,

•   Increase in BISP allocation to PKR 180bn from PKR 119bn,

•   Introduce Kamyaab Jawaan Program with an intention to support young entrepreneurs and provide them loans worth PKR 100bn,

•   Increase subsidy on electricity for lifeline users to PKR 251bn, safeguard them from higher cost of utility, and

•   Increase the minimum wage to PKR 17,500/month to dilute the impact of inflation.

7)   Equities to be preferred asset class

•   Completely documented transactions for real estate sector to be settled through banking instruments to bring them at par with investment in equities in terms of KYC requirements. Previously real estate was the preferred asset class for High Net Worth Individuals due to lax requirements of disclosure and documentation along with lower FBR and DC valuations.

•   Higher taxation on capital gains (100% - Yr 1, 75% from Yr 2 till Yr 10) earned on sale of immovable properties compared to equities is expected to attract investors towards equities. Income from Real Estate will now be taxed at Normal applicable tax rates (respective tax rates for individuals and companies).

•   Increase in tax rates on rental income from 20% to a maximum of 35%.

•   Higher taxes on profit from debt securities including increase in withholding tax from 10% to 15% and higher final taxes (up to 35%).

•   Equities now have the most attractive taxation regime. 15% tax on capital gains arising out of sale of shares and 15% tax on dividends.
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