The Impact! January, 2024 - Federal Income Tax - Federal Sales Tax - Provincial Sales Tax - Corporate Laws
P a g e | 1 Preamble: Riaz Ahmad, Saqib, Gohar & Co. Chartered Accountants is pleased to present herewith its monthly technical updates encompassing the broadened scope under the banner of “The Impact” for the month of January, 2024. This document aims to provide an update with respect to the changes in the Income Tax Ordinance, 2001 (the Ordinance), Sales Tax Act, 1990, Provincial Sales Tax on Services, Company Laws and related rules therein, introduced through various SROS/Circulars issued during the month of January, 2024. Disclaimer: This memorandum is prepared to the best of our knowledge and belief. It is intended to provide only a general outline of the matters covered in the document. It should neither be regarded as comprehensive nor sufficient for decision making purposes nor should it be used in place of professional advice. Riaz Ahmad, Saqib, Gohar & Co. Chartered Accountants does not accept any responsibility for any loss arising due to any action taken or not taken by the readers of this publication. Click here to download our android application for all the latest updates.
P a g e | 2 UPDATES PERTAINING TO FEDERAL SALES TAX LAWS – REQUIREMENT TO TRANSMIT SALES TAX INVOICES ELECTRONICALLY – SRO 28(I)/2024: The Federal Board of Revenue has through its SRO 28(I)/2024 dated January 10, 2024 placed a mandatory requirement on the following persons to transmit sales tax invoices electronically: a) All importers and manufacturers of fastmoving consumer goods; b) All wholesalers (including dealers), distributors of fast-moving consumer goods and c) All wholesalers-cum-retailers engaged in bulk import and supply of fast-moving consumer goods on wholesale basis. This electronic transmission of invoices would be carried out in terms of Rule 150Q of the Sales Tax Rules, 2006 and the persons required to transmit sales tax invoices electronically shall provide access to all electronic record in this regard for the purpose of sales tax audit. “This area intentionally left blank.” UPDATES PERTAINING TO PROVINCIAL SALES TAX LAWS – SINDH – GUIDELINES FOR COLLECTION AND PAYMENT OF SINDH SALES TAX BY COLLECTION AGENTS – CIRCULAR 01/2024: The Sindh Revenue Board has through its Circular No. 01/2024 issued guidelines pertaining to collection of Sindh sales tax by collection agents. Through its earlier notification dated September 27, 2023, the Sindh Revenue Board had designated banks and financial institutions remitting amount abroad as collection agents to collect Sindh sales tax against certain specified services. Thereafter, clarification was sought from various financial institutions seeking guidance regarding their responsibilities. Hence, this circular guides as under: The said guidelines require a bank or financial institution to collect Sindh sales tax at the rate of 13% against advertisement and market research agency. Moreover, the rate of collection for IT Services is 3%. This guideline also specified remittance and tariff codes in order bring more clarity for banks/financial institutions regarding which payment would be subject to tax collection.
P a g e | 3 Moreover, these banks/financial institutions are required to report the amount of tax deducted in Annexure-C of their Sindh Sales Tax Return with the prefix of “CA” prior to the document number to differentiate them from normal service invoices. UPDATES PERTAINING TO CORPORATE LAWS – REQUIREMENT TO MENTION UDIN ON AUDIT REPORTS – DIRECTION 02 OF 2024: The Securities and Exchange Commission of Pakistan has through its Direction 02 of 2024 directed Modaraba Companies, Modarabas and its auditors to ensure that their audit reports mention the Unique Document Identification Number issued from the portal of the Institute of Chartered Accountants of Pakistan. UDIN REQUIREMENT IN AUDITOR’S (REPORTING OBLIGATIONS) REGULATIONS, 2018 – SRO 09(I)/2024: The Securities and Exchange Commission of Pakistan has through its SRO 09(I)/2024 issued amendments in the Auditor’s (Reporting Obligations) Regulations, 2018. These amendments were previously issued as a draft for comments vide SRO 1481(I)/2023 dated October 18, 2023. The amendments include the insertion of the definition of a Unique Documents Identification Number (UDIN) and the requirement to publish the same on all audit reports issued under these regulations. “Document End.”
P a g e | 1 AGN International Ltd is a company limited by guarantee registered in England & Wales, number 3132548, registered office 24 Greville Street, London EC1N 8SS, United Kingdom. AGN International Ltd (and its regional affiliates; together "AGN") is a not-for-profit worldwide membership association of separate and independent accounting and advisory businesses. AGN does not provide services to the clients of its members, which are provided by Members alone. AGN and its Members are not in partnership together, they are neither agents of nor obligate one another, and they are not responsible or liable for each other's services, actions or inactions. Corporate Office: 5-Nasim C.H.S. Major Nazir Bhatti Road Off: Shaheed–e-Millat Road, Karachi. Tel.: (92-21) 34945427, (92-21) 34931736 Email: [email protected] Regional Offices: Lahore Building No. 35 – D / E, Ali Block, New Garden Town, Lahore. Tel.: (92-42) 35940246 – 8 Email: [email protected] Islamabad Office #3, 1st Floor, 96- W, Khyber plaza, Fazlul-Haq Road, Blue Area, Islamabad. Tel.: +92-051-2804245-6 +92-051-2540503 Email: [email protected] Peshawar TF-371, Dean’s Trade Centre, Saddar, Peshawar Cantt. Tel.: +92-091-5253201 Email: [email protected] A member of