Latest news with #InfrastructureDevelopmentCess
Business Recorder
02-07-2025
- Business
- Business Recorder
KPRA collects Rs51.56bn, surpassing target by Rs4.56bn
PESHAWAR: The Khyber Pakhtunkhwa Revenue Authority (KPRA) has successfully collected Rs 51.56 billion against the target of Rs. 47 billion assigned to it by the provincial government for the financial year 2024-25. Despite the overall economic situation, the Authority has shown a growth of 37% in the fiscal year 2024-25 as compared to the collection of the financial year 2023-24, according to an official statement here on Tuesday. As per the details shared by the KPRA media wing, the Authority has collected Rs40.3 billion from the sales tax on services, and Rs11.26 billion from the Infrastructure Development Cess (IDC). The Authority worked on broadening its tax net and took its registered taxpayers' count to more than 25,100 by the end of this year, which also played a key role in the revenue collection growth. Director General KPRA, Fouzia Iqbal, appreciated the efforts and dedication of the KPRA staff in achieving the revenue targets set for the financial year 2024-25. She expressed gratitude to the Chief Minister Khyber Pakhtunkhwa, Ali Amin Gandapur, and Advisor to CM on Finance, Muzzammil Aslam, for their continued guidance and support which played a vital role in KPRA's success. She extended her heartfelt appreciation to the taxpayers of KPRA for their consistent trust and cooperation. 'Our taxpayers are the cornerstone of our revenue system. Their compliance and commitment have made this unprecedented achievement possible,' she said. Copyright Business Recorder, 2025
Business Recorder
01-07-2025
- Business
- Business Recorder
Traders reject imposition of 2pc IDC on export from KP
PESHAWAR: Traders expressed outcry over enforcement of 2 per cent Infrastructure Development Cess (IDC) on export from Khyber Pakhtunkhwa and feared the export tax will adversely hamper economic growth and regional trade. Despite the prolonged anti-IDC campaign and dialogue by business leaders with relevant authorities, even reservations conveyed in upper house of the parliament, the Government of Khyber Pakhtunkhwa enforced 2 percent export tax under Infrastructure Development Act from July 01, next and make it part of the finance bill and budget documents 2025-26. It is noted to mention here that the provincial government has imposed 2 percent export tax through Infrastructure Development Act 2022, which is continuously implemented by making it part of Finance Bill/budget documents of every fiscal year. On the other hand, the Business community vigorously campaigned against IDC and proactively took up this issue with authorities and every forum at central and provincial level. Export process has already been slowed down from Khyber Pakhtunkhwa as business community/ exporters preferred to shift their consignments to Islamabad and other provinces to prevent huge financial losses, in wake of enforcement of 2 percent IDC on export, reports say. The Federating Units (provinces) are competent to levy cess on goods/services produced, brought into or taken out of the province. Provincial governments have already levied IDC on imports and are collecting the same through Customs computerised system for the past over one decade, experts say. They added the provinces under the Constitution appear to have power to levy an IDC on transportation, carriage or movement of goods for imports to or exports from the province. However, they stated in order to encourage exporters and to increase exports, duties/taxes are usually not levied on exports as it might have an adverse effect on exports and the flow of foreign exchange into the country. Traders categorically reject implementation of 2 per cent export tax by the provincial government and stated that export tax would negatively impact exports from the province. They furthermore said KP export cess will undermine the competitiveness of Pakistan's exports. A large number of vehicles-loaded with essential food items were entered on regular basis in city and other parts of the province, after the imposition export tax. The prices of daily use items will go up instantly, said Shakeel Ahmad Saraf, president of the Peshawar Small Traders and Small Industries (PST&SI). He said price-hike will directly affect the already inflation-stricken people of the province. Exports cannot be taxed, and they should be incentivised 'if we are serious about the progress of the country and the prosperity of the people of Pakistan,' he remarked. 'Exports are vital to the country. All governments need to support this national effort,' he said. Businessmen recommended the federal government convince KP province through the Council of Common Interests for the exemption of exports from direct and indirect provincial levies. Like the consignments routed through KP, this additional cost will now apply to all exports via Balochistan to Afghanistan and Central Asia, as well as Iran, Turkiye and beyond, traders say. 'Exports are vital to the country. All governments need to support this national effort,' Shakeel Saraf remarked. He urged the provincial government to review its decision and take it back immediately. Small traders will soon decide future course of action against export tax, if the government didn't pay heed to their demands, he warned. Copyright Business Recorder, 2025
Business Recorder
16-06-2025
- Business
- Business Recorder
Collection of ST on services: KPRA registers 27.3pc growth
PESHAWAR: Khyber Pakhtunkhwa Revenue Authority (KPRA) has registered a growth of 27.3% in collection of Sales Tax (GST) on Services as compared to last fiscal year while Infrastructure Development Cess increased by 115%. By the end of the year, total collections by KPRA are expected to reach PKR 50.7 billion. In the first 10 months of FY 2024–25 (July to April), KPRA collected PKR 42.1 billion, showing strong performance, said a white paper on the budget for financial year 2025-26. The Khyber Pakhtunkhwa Revenue Authority (KPRA) was set up under the KP Finance Act, 2013 as an independent body to collect Sales Tax on Services and other provincial taxes. Over the years, KPRA has become an important institution on helping the province increase its own source revenues (OSR), bring more services under the tax net, and support better delivery of public services. This year, KPRA also expanded its tax base through the KP Finance Act, 2024. New sectors were added like healthcare, passenger transport, health insurance, and digital services. Tax rates were increased for restaurants and wedding halls, and the Cess rate was doubled and applied to exports and transit trade. These steps have helped improve collections and brought KPRA in line with modern tax practices. The following table highlights KPRA's revenue performance over recent fiscal years: Collection in FY 2023-24 is exclusive of the reimbursement of an amount of Rs. 4.1Bn received to the province from FBR on account of Cross Input Tax Adjustment. In the current FY no amount has been reimbursed from FBR. In FY 2024-25 (Jul-Apr), KPRA achieved a remarkable 27.3% growth in Sales Tax on Services (STS) collections and a 115% increase in Infrastructure Development Cess (IDC) reflect KPRA's concerted efforts in expanding the tax base, strengthening compliance, and implementing targeted enforcement measures. Tax Reforms and Sectoral Expansions As part of its reform agenda, KPRA introduced new taxable service sectors through the KP Finance Act, 2024, incorporated into the Second Schedule of the KP STS Act, 2022. These sectors and their revenue contributions include: Rationalizing tax rates for wedding halls – (Total Growth 40%) Increasing tax rate on Restaurants to 6% – (Total Growth 21%) Health Care Services – 30 Million Additional Digital Initiatives Transition from traditional return filing to the IRIS system, with the adoption of a Single Sales Tax Return (SSTR) for sectors like Oil & Gas and Microfinance Banks. Deploying the Restaurant Invoice Management System (RIMS) to enhance tax administration efficiency. Leveraging the existing provisions within the KP STS Act to encourage reporting of tax evasion, fostering a culture of accountability. Leveraging social media platforms to conduct awareness sessions, educating taxpayers on compliance requirements and benefits. Sourcing data from statutory bodies such as SECP, NADRA, and PTA to improve taxpayer identification and compliance monitoring. Implementing a Risk-Based Audit and focus on high-risk areas. Finalizing an MoU with the FBR and other provinces for data sharing, despite ongoing deliberations over discrepancies in the draft agreement. Consensus is expected soon, enabling seamless collaboration and enhanced revenue oversight. KPRA aims to invest in capacity building for its workforce, equipping them with advanced tools and trainings to handle emerging challenges in tax administration. This includes fostering partnerships with international organizations to adopt global best practices in revenue management. Copyright Business Recorder, 2025
Business Recorder
02-06-2025
- Business
- Business Recorder
Budget 26: Govt looking to boost export of ‘made in Pakistan' mobile phones, say assemblers
Pakistan's mobile phone assemblers claim the federal and provincial governments will announce a policy in the upcoming budget 2025-26 aiming to boost phone exports. This is to maintain the balance of trade which is likely to widen in the wake of surge in imports from the US in the aftermath of trade talks between Islamabad and Washington, according to several experts that Business Recorder spoke to. One leading domestic mobile phone assembler told Business Recorder on the condition of anonymity that the government is working to announce a rebate on export of mobile phones in the upcoming budget, scheduled to be announced on June 10. More luxury items set to attract sales tax in upcoming Pakistan budget Separately, Muhammad Idrees Memon, a former president of Karachi Electronic Dealers Association (KEDA), told Business Recorder that the federal and provincial governments are designing a policy similar to the Export Facilitation Scheme (EFS) which will incentivise the export of 'made in Pakistan' mobile phones. Both federal and provincial governments were approached to confirm the development. They were yet to reply by the time of filing this story. Memon, who is also a former president of Karachi Chamber of Commerce and Industry (KCCI), said the Sindh government and KCCI are currently in talks about removing or reducing the Infrastructure Development Cess (IDC) on the import of mobile parts (CKD/completely knocked down) for those manufacturers who want to export their products. The IDC is being collected in the range of 1.81% to 1.85% on imports at the provincial level. He also said the Sindh government will finish working on the export package for mobile phone exporters 'over the next two to three days (by Wednesday)' and announce it in the budget. 'The Punjab government has already agreed to a similar export package. The ministry of finance, ministry of commerce, Federal Board of Revenue (FBR) and Engineering Development Board (EDB) all are supporting us,' he said. He said Sindh Chief Minister Murad Ali Shah, and PPP ministers and members of the provincial assembly including Mukash Kumar Chawla and Dharejo are working with KCCI leadership to design an EFS-like product to promote and support the phone exports to help partially controlling the likely increase in balance of trade. He added that Pakistan is considering increasing imports of products including cotton and edible oil from the US to avoid President Trump's proposal to double tariff to 29% on imports from Pakistan. Once the provincial government finalizes its tax incentives for exports then the federal government will also join the export package in the making, Memon said. 'There is huge potential and Pakistan can earn a significant amount of foreign exchange through exporting 'made in Pakistan' phones,' Memon said. He said Pakistan is already exporting mobile phones to Middle Eastern countries including Dubai, but the volume of the trade is insignificant. Almost all the Chinese phones - about two dozen brands - available in the country are being assembled locally. Memon said Pakistan is importing 100% raw material (parts/CKD) for mobile assembling in the country at present. The removal of IDC on imports would enable manufacturers to add value to the products and earn a handsome amount on their exports. In addition to this, this would also help create a new employment generation and promote 'made in Pakistan' products across the globe. China looking to move export base to Pakistan Meanwhile, Aamir Allawala, CEO, Transsion Tecno Electronics, said that Chinese companies are interested in moving their export base to Pakistan due to availability of labour at a lower cost and to mitigate its risk associated with global trade war. 'Pakistan labour cost is only $140 per month compared with $800 in China,' he told Business Recorder. Almost all leading Chinese brands have already set up their factories in Pakistan including Xiaomi, OPPO, Vivo, Tecno, Infinix, Itel, realme, Redmi and ZTE. 'Pakistan can become a hub of export of Chinese brands to markets in Africa, Central Asia and Middle East. 'There is a huge potential on the table. The government should sit together with the local industry and chart a five year forward to take advantage of the changing global trends,' he said. Pakistan is now assembling almost all global brands of mobile phones locally, increasing the 'made in Pakistan' production to 95% of the local demand, while the share of imported phones (finished products) has reduced to merely 5%. The domestic production is saving around 15-20% in foreign exchange, as local assemblers are still importing almost all mobile phone parts from foreign manufacturers. According to Pakistan Bureau of Statistics' (PBS) data, the import of mobile phones (CKD/CBU) dropped 14% to $1.2 5 billion in the first 10 months of FY25 compared to $1.46 billion in the same period of the last year.
Business Recorder
02-06-2025
- Business
- Business Recorder
Budget 26: Govt looking to boost mobile phone export, say assemblers
Pakistan's mobile phone assemblers claim the federal and provincial governments will announce a policy in the upcoming budget 2025-26 aiming to boost phone exports. This is to maintain the balance of trade which is likely to widen in the wake of surge in imports from the US in the aftermath of trade talks between Islamabad and Washington, according to several experts that Business Recorder spoke to. A leading domestic mobile phone assembler told Business Recorder on the condition of anonymity that the government is working to announce a rebate on export of mobile phones in the upcoming budget, scheduled to be announced on June 10. More luxury items set to attract sales tax in upcoming Pakistan budget Separately, Muhammad Idrees Memon, a former president of Karachi Electronic Dealers Association (KEDA), told Business Recorder that the federal and provincial governments are designing a policy similar to the Export Facilitation Scheme (EFS) which will incentivise the export of 'made in Pakistan' mobile phones. Both federal and provincial governments were approached to confirm the development. They were yet to reply by the time of filing this story. Memon, who is also a former president of Karachi Chamber of Commerce and Industry (KCCI), said the Sindh government and KCCI are currently in talks about removing or reducing the Infrastructure Development Cess (IDC) on the import of mobile parts (CKD/completely knocked down) for those manufacturers who want to export their products. The IDC is being collected in the range of 1.81% to 1.85% on imports at the provincial level. He also said the Sindh government will finish working on the export package for mobile phone exporters 'over the next two to three days (by Wednesday)' and announce it in the budget. 'The Punjab government has already agreed to a similar export package. The ministry of finance, ministry of commerce, Federal Board of Revenue (FBR) and Engineering Development Board (EDB) all are supporting us,' he said. He said Sindh Chief Minister Murad Ali Shah, and PPP ministers and members of the provincial assembly including Mukash Kumar Chawla and Dharejo are working with KCCI leadership to design an EFS-like product to promote and support the phone exports to help partially controlling the likely increase in balance of trade. He added that Pakistan is considering increasing imports of products including cotton and edible oil from the US to avoid President Trump's proposal to double tariff to 29% on imports from Pakistan. Once the provincial government finalizes its tax incentives for exports then the federal government will also join the export package in the making, Memon said. 'There is huge potential and Pakistan can earn a significant amount of foreign exchange through exporting 'made in Pakistan' phones,' Memon said. He said Pakistan is already exporting mobile phones to Middle Eastern countries including Dubai, but the volume of the trade is insignificant. Almost all the Chinese phones - about two dozen brands - available in the country are being assembled locally. Memon said Pakistan is importing 100% raw material (parts/CKD) for mobile assembling in the country at present. The removal of IDC on imports would enable manufacturers to add value to the products and earn a handsome amount on their exports. In addition to this, this would also help create a new employment generation and promote 'made in Pakistan' products across the globe. Meanwhile, Aamir Allawala, CEO, Transsion Tecno Electronics, said that Chinese companies are interested in moving their export base to Pakistan due to availability of labour at a lower cost and to mitigate its risk associated with global trade war. 'Pakistan labour cost is only $140 per month compared with $800 in China,' he told Business Recorder. Almost all leading Chinese brands have already set up their factories in Pakistan including Xiaomi, OPPO, Vivo, Tecno, Infinix, Itel, realme, Redmi and ZTE. 'Pakistan can become a hub of export of Chinese brands to markets in Africa, Central Asia and Middle East. 'There is a huge potential on the table. The government should sit together with the local industry and chart a five year forward to take advantage of the changing global trends,' he said. To recall,Pakistan is now assembling almost all global brands of mobile phones locally, increasing the 'Made in Pakistan' production to 95% of the local demand, while the share of imported phones (finished products) has reduced to merely 5%. The domestic production is saving around 15-20% in foreign exchange, as local assemblers are still importing almost all mobile phone parts from foreign manufacturers. According to Pakistan Bureau of Statistics' (PBS) data, the import of mobile phones (CKD/CBU) dropped 14% to $1.2 5 billion in the first 10 months of FY25 compared to $1.46 billion in the same period of the last year.
