Listed firms to find amendments hard to implement: expert

A senior charted accountant has said that amendment in holding annual meeting within three months instead of existing four months will create lot of problems for public listed companies.
In comment a charted accountant Mustaq Ahmed Vohra commenting on Finance Bill 2007 said that preparation and printing of audited accounts with lot of disclosure, confirmations and verification will be a big problem for the companies.
Regarding Import section 148, he said that for commercial importers rate of tax reduced from 6 percent to 5 percent. The manufacturers will not be issued exemption certificate from commissioner on import of machinery and raw material.
The manufacture cum export is exempted from applicability of withholding tax vide clause 56 of Part IV of second schedule. The term exporter has not been explained. Otherwise manufacturers will have to pay substantial amount of advance tax and may result in refunds. Withholding tax paid by manufacturers on import of raw material and machinery is not final tax liability.
A confusion of large import houses, which fulfil certain conditions (not specified yet) shall be entitled to claim such tax as advance tax unlike the commercial importers. Lot of confusion will prevail in determining the final tax and landed cost valuation.
About payment for goods and services section 153, he pointed out that (a) rendering of services to exporters for dying, stitching, printing, embroidery, washing sizing and weaving has now been brought under normal tax. However the rate of withholding taxes on above services has not been specified.
(b) The cotton ginners will deposit tax themselves on amount receivable payment to ginners will be made on production of evidence of deposit of withholding tax.
(c) Withholding tax deducted against payments for sale and goods and execution of contract by a public company will not be final tax.
However sale of good by AOP or individual and tax withheld therein will be treated as final tax liability. This facility was withdrawn in year 2005. Facility of PTR is now being allowed to individual and AOP only.
(d) Persons receiving payment without NTN or CNIC liable to extra two- percent tax has been withdrawn. This will effect documentation of economy and lack of data bas.
Regarding Export Section 154, he said that all exporters direct or indirect would be liable to withholding tax of one percent. Indenting commission by export industrial agent in Pakistan at the rate of 5 percent will be treated final discharge.
About tax credit of investment in shares, he said a person other than company acquiring new shares including new NIT, tax credit is allowed at the average rate of tax on the investment made up to Rs 300,000. Regarding wealth statement, he said that individual declaring income above Rs 500,00 of current tax year is required to file wealth statement.
About advance tax on purchase of motor car, he said that withholding tax at the rate of 5 percent would be withheld by car manufacturers at the time of sale of car.
He said that the tax collected on electric bill would not be adjustable except for companies. Rates of taxes on salaries and non-salaries remain the same. However senior citizens over 60 years of age will get 50 percent rebate of tax payable if taxable income is less than Rs 400,000. Whereas full time researchers, teachers of a recognised institution are entitled to 75 percent reduction in tax payable on salary.
About tax on import of machinery and raw materials, he said that one percent tax has been imposed on import of capital goods and raw material (other than polyester filament yarn exclusively for its own use) Withholding tax at the rate of 2 percent is applicable on edible oil, energy sever lamps and pesticides.