kpk finance bill finance bill 2017.pdfmaqbool haroon shahid safdar & co. chartered accountants...

KPK FINANCE BILL 2017

MAQBOOL HAROON SHAHID

SAFDAR & CO.

CHARTERED ACCOUNTANTS

www.mhssco.com

KHYBER PAKHTUNKHWA BILL HIGHLIGHTS- 2017

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MAQBOOL HAROON SHAHID SAFDAR & CO.


KHYBER PAKHTUNKHWA FINANCE BILL 2017 This memorandum has drafted to portray the significant changes which have been proposed

to be incorporated in Khyber Pakhtunkhwa Finance Bill 2017. These changes are mainly

relating to Khyber Pakhtunkhwa Sales Tax on Services Act 2012,

We have prepared this commentary for benefit, information and guidance of our prestigious

clients both local and foreign clients doing services business in Khyber Pakhtunkhwa,

Pakistan and it is available at our website http://www.mhssco.com.

These changes proposed in Khyber Pakhtunkhwa Finance Bill 2017 will be generally be

applicable from 1st July, 2017 until and unless specified.

The notes specified in this document are based on Finance Bill 2017. This finance bill shall

be published as Finance Act 2017 as and when enacted.

The memorandum is aimed at providing general guidance with the objective of keeping our

clients and staff abreast of the changes in the aforementioned laws. MHSS accepts no duty of

care or liability for any loss occasioned to any person acting in this publication. The readers

are therefore advised to seek professional advice before exercising any judgment,

interpretation of any legal provision and acting there upon.

http://www.mhssco.com/


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AMENDMENT OF WEST PAKISTAN ACT No. V OF 1958---

In the West Pakistan Urban Immovable Property Tax Act, 1958 (W.P Act No. V of 1958)

For existing Schedule-1, the Scheduel-1 specified in Appendix-1 to this Act shall be substituted; and

S#

Category

Rate of tax for areas of Provincial headquarter as notified by Gov. (per annum) (Rs)

Rate of tax at Divisional headquarter (per annum) (Rs)

Rate of tax in suburban areas of Divisional headquarter (per annum) (Rs)

Rate of tax at District headquarter (per annum) (Rs)

Rate of tax at District other than District Headquarter (per annum) (Rs)

A

B

C

Town ships

Other than Town ships

Town ships


Town ships


Town ships


1 Up to 5 Marlas (other than self-occupied)

1500

1300

1100

1300

1100

800

500

600

500

400

300

2 Exceeding 5 Marlas but not exceeding 10 Marlas

2500

2400

2200

2400

2200

1400

1100

1200

1100

900

700


3300

3100

3000

3100

3000

1600

1500

1600

1500

900

800


4800

4700

4500

4700

4500

2500

2300

2500

2300

1300

1000


15000

13500

12000

13500

12000

7500

4500

6000

3000

2250

1500


3




2250

0

21000

18000

21000

15000

12000

9000

7500

4500

4500

3000


30000

27000

24000

27000

24000

21000

18000

15000

12000

9000

6000

8 Exceeding 40 Marlas

45000

37500

30000

37500

30000

22500

18000

15000

12000 9000 6000

PART ‘B’ Building acquired for the use by Government, Semi-Government, Non-Government Organization, Development Financial Institutions, private commercial organization, guest houses, hostels or by Banks shall be assessed and taxed twenty percent of the actual annual rent. In case building other than exempted under section 4 of the Act, which are owned and occupied by such organization, tax shall be levied on the assessed annual rental value of such buildings on the rate prescribed herein before. PART ‘C’ Tax on properties let out on rent, lease or other arrangement and not in use of their registered owners will be double of the above, except for the category-1 (up to 5 marlas) EXPLAINATION: Categorization of area in Provincial Headquarter into Category “A”, “B” or “C” shall be by way of notification by the Local Government & Rural Development Department, to be notified from time to time. In Divisional and District Headquarters. Townships are approved Townships and include those areas, which are declared so by Local Government & Rural Development Department from time to time. In Schedule-II,-

• At S.No.7 for the figure “15000” and “7500” the figure “22,500” and “11,250” shall respectively

be substituted and • At S.No.7A for the figure “15,000” the figure “20,000” shall be substituted.

AMENDMENT OF KHYBER PAKHTUNKHWA ACT No. IV OF 1990---

In the Khyber pakhtunkhwa Finance Act, 1990 (Khyber pakhtunkhwa Act No. IV of 1990), in section 7,

for the existing Table, the “Table” specified in Appendix-II to this Act shall be substituted.


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Sr.No. Description of Tax payers Proposed rates (Rs)

1 (i) All persons engaged in any profession, trade, calling or employment, other than those specifically mentioned hereinafter, in the Khyber Pakhtunkhwa Province, whose monthly income or earning

(a) When exceeds Rs.3,000 but not exceeds Rs. 10,000

(b) When exceeds Rs.10,000 but not exceeds Rs. 20,000

(c) When exceeds Rs.20,000 but not exceeds Rs. 50,000

(d) When exceeds Rs.50,000 but not exceeds Rs. 100,000

(e) When exceeds Rs.100,000 but not exceeds Rs. 200,000

(f) When exceeds Rs.200,000 but not exceeds Rs. 500,000

Exempted 330 435 600 800 1,000

(ii) Employees of Federal and Provincial Government Drawing pay in Basic Scales

(a) BS-1 to 4

(b) BS-5 to 12

(c) BS-13 to 16

(d) BS-17

(e) BS-18

(f) BS-19

(g) BS-20 and above

Exempted

100

200

300

500

1,000

2,000

2 All limited companies, Modarbas, Mutual Funds and any other body corporate with paid up capital and reserves in the preceding year, whichever is more

(a) When not exceeding Rs.10 million

(b) When exceeds Rs.10 million but not exceeds Rs. 25 million

(c) When exceeds Rs.25 million but not exceeds Rs. 50 million

(d) When exceeds Rs.50 million but not exceeds Rs. 100 million

(e) When exceeds Rs.100 million but not exceeds Rs. 200 million

(f) When exceeding Rs.200 million

27,000

36,000

50,000

75,000

95,000

100,000


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3 Persons, other than companies, owing factories, commercial establishment, private

education, institution and private hospitals having the following commercial establishment

(a) Any commercial establishment/factories having 10 or more employees which have not been otherwise explicitly given in this table.

(b) Private clinics & hospitals having up to 10 employees.

(c) Private clinics, hospitals having employees more than 10 but not

more than 50

(d) Private clinics & hospitals having more than 50 employees

(e) Private medical colleges

(f) Private engineering institutes having degree programs

(g) Private business education institutes

• Having up to 100 students • Exceeding 100 students

(h) Private law colleges

(i) Private education institution including professional and technical

institution other than specified at e, f ,g & h charging monthly fee not exceeding 1000 per student

(j) Private education institution including professional and technical

institution other than specified at e, f ,g & h charging monthly fee exceeding Rs. 1000 but not exceeding Rs. 2000 per student

(k) Private education institution including professional and technical

institution other than specified at e, f ,g & h charging monthly fee exceeding Rs. 2000 but not exceeding Rs. 5000 per student

(l) Private education institution including professional and technical

institution other than specified at e, f ,g & h charging monthly fee exceeding Rs. 5000 per student

10,000

10,000

50,000

100,000

100,000

100,000

70,000 100,000

100,000

5,000

7,000

20,000

100,000

4 Holding of import or export license assessed to income tax in the preceding year with annual turnover-

(a) When not exceeding Rs. 50000

(b) When exceeding Rs. 50000

4,000

5,000

5 Clearing agent licensed or approved as custom house agents.

10,000


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6 Travel agents

(a) IATA travel agents approved

(b) Non-IATA approved

(c) Hajj and tour operator

15,000

8,000

15,000

7 Restaurants/Guests houses liable to Sales Tax

15,000

8 Professional caterers

15,000

9 Wedding halls/lawns (irrespective of their nomenclature)

30,000

10 Advertisement agencies

10,000

11 Doctors

(a) Specialists

(b) Non Specialists including medical practitioners, Hakeem`s, Homeopaths etc.

(c) Dentists

20,000

10,000

15,000

12 Diagnostic and Therapeutic Centers’’ including pathological and chemical laboratories’’

(a) Located at Divisional Head Quarter

(b) Located at other places

20,000

7,000

13 Contractors, Suppliers and Consultants who, preceding financial year supplied to the Federal or any Provincial Government or any local authority in the District, Goods, Commodities or rendered services of the value

(a) When exceeding Rs. 10000 but not exceeds Rs. 0.5 million

(b) When exceeding Rs. 0.5 million but not exceeding Rs. 1 million

(c) When exceeding Rs. 1.50 million but not exceeding Rs. 2.5 million

(d) When exceeding Rs. 2.5 million but not exceeding Rs. 10 million

(e) When exceeding Rs. 10 million but not exceeding Rs. 25 million

(f) When exceeding Rs. 25 million but not exceeding Rs. 50 million

(g) When exceeding Rs. 50 million

4,000

5,000

7,000

18,000

25,000

30,000

100,000

14 Petrol/Diesel/CNG filling station

12,000


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15 All establishment including video shops, real estate shops/ agencies, card dealers, and net cafes assessed or not assessed to income tax in the preceding financial year.

5,000

16 Chartered Accountants with and independent audit practice and excluding those who are employed in companies not owned by them.

15,000

17 Vehicle Service Station

8,000

18 Transporters/Transport companies

(a) Within Provincial Headquarters limits

(b) Others

3,000

2,000

19 Member of Stock Exchange

5,000

20 Money Changer


(b) Others

10,000

5,000

21 Health Fitness Centers/Gymnasium


(b) Others

2,000

1,000

22 Jewelers 1,000

23 Departmental Stores 10,000

24 Electronics Goods Stores 1,000

25 Cable Operators 10,000

26 Printing Presses 1,000

27 Pesticides Dealers 1,000

28 Tobacco Whole sellers 2,000

29 Whole Sale Dealer/agency holder 10,000

30 Chemist/Druggist/Medical Store 10,000

31 Tailor Shops (a) Shalwar Qameez+wastecoat

(b) Shalwar Qameez+wastecoat+pent shirt

5,000

10,000

AMENDMENTS IN THE KHYBER PAKHTUNKHWA ACT No. XXI OF 2013 In the Khyber Pakhtunkhwa Finance Act, 2013 (Khyber Pakhtunkhwa Act No. XXI of 2013), in First

Schedule, after existing entry “9803.3000”, the following new entry shall be added, namely:

“9803.4000 Ride hailing services”


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PARTNERS

MUHAMMAD MAQBOOL, FCA

Fellow member of Institute of Chartered Accountants England & Wales,

Canada and Pakistan. He also graduated as Master of Commerce from

University of Punjab in 1979. He has been senior partner in Qamar-ul-Islam &

Co., and Sadat Hyder Qamar & Company (Chartered Accountants)

He is Senior Partner of MHSSCo.

Professional Experience and Achievements:

He has 22 years’ accountancy experience in the field of Financial Consultancy, System Consultancy, Audit,

Corporate and Taxation matters. He has rich experience of handling a large number of national and

international consultancy assignments.

Presently, he is council member of ICAP. He was Vice Present of ICAP. He was Past President of Association

of Pakistan Institute of Public and Finance Accountants (1995), Chairman Education and Training

Committee of ICAP (1994-96) and represented ICAP on International forums.

MALIK HAROON AHMAD, FCA

Fellow Member of Institute of Chartered Accountants of Pakistan. He also

graduated as Bachelor of Commerce from University of Punjab in 1994. He

worked in the capacity of Senior Manager–Tax Ford Rhodes Sidat Hyder &

Company (Chartered Accountants), a member firm of Ernst & Young

International, one of the big accountancy firms in the world.


He has 16 years’ experience in the field of consultancy especially Taxation matters, Audit and Corporate.

During his service, he gained diversified experience of corporate tax planning, counseling and benefit

optimization, handling matters relating to Capital Value tax, Provincial Professional Tax, Corporate Asset

Tax. He supervising a large team of employees (around 150) working in the fields of Corporate

Compliance Services, Internal Control development and Re engineering Services, Audit & Assurance,

Accountancy assignments.

He is also Life time member of Lahore Tax Bar Association. He is a writer of three books published by the

Professional Business Publications [PBP], Emile Wolf International United kingdom. He is writer of

Articles on different issues in the Newspapers and Magazines. He is also interviewed as tax expert in TV

shows on different taxation issues.


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SHAHID MEHMOOD SHAKER, FCA

Fellow Member of Institute of Chartered Accountants of Pakistan. He

qualified as Chartered Accountant in June 2003. He also qualified his MBA in

finance in the year 1999. He worked as a partner in Qadeer and Company,

Chartered Accountants (from February 2005 – September 2009) and also

worked as CFO in Ayesha Textile Mills Limited (from September 2002-

February 2005).


He has 5 years’ experience in the field of consultancy especially Audit, System development and System

Evaluation assignments. He has very rich experience of conducting various assignments in External audit

as well as Internal Audit section specially assignments relating to Financial Institutions, Textile sector,

Construction companies, Steel Sector, Leather Sector, Rice Sector, Sugar, Power Sector etc.

He is presently assigned the task to prepare opinions on different aspects of corporate laws and foreign

currency exchange control regulations.

MUHAMMAD SAFDAR, FCA

Fellow Member of Institute of Chartered Accountants of Pakistan (ICAP). He did his Bachelors from University of Punjab in 1997. He started his career in 2005 as proprietor of Muhammad Safdar & Co. Chartered Accountant. Professional Experience and Achievements: He is experience and expert in the areas of Financial Advisory, Feasibility studies, Corporate restructuring, Tax planning, Compliance Services, Audit and Assurance Services. He is also working as advisor to the Board of a number of industrial undertakings.

He was also a visiting faculty member of University of Punjab.


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Large Number of Chinese Clients Infrastructure Chemicals

Energy, Utilities & Mining Hospitality & Leisure Entertainment & Media

Engineering Companies Forest, Paper & Packaging Government & Public Services

Transformers Manufacturers Food & Agriculture Industrial Manufacturing

Contracting Companies Metals Pharmaceuticals & Life Sciences

Dairy Farms & Processing Retail & Consumer Hospitals

Information Technology Pesticides Transportation & Logistics

Mobile Phone Manufacturers Automotive Non-profit Organizations

Corporate Compliance Audit and Assurance Services Human Resource Services

Registrations Internal Control Development & Re-engineering

Legal Services

Accounting & Book Keeping Tax Compliances & Advisory Services Business & Financial Consulting

Lahore Islamabad Clients Contact person

Karachi Clients Contact Person

Address: 71- C3 Gulberg III, Lahore. Email: [email protected] [email protected] [email protected] Tel: +92 42 35759501-3 +92 334 7557441 +92 322 4727709

+92 42 35772421

Fax: +92 42 3575 9504

INDUSTRIES

SERVICES

MHSS Clients

CONTACT US

kpk finance bill finance bill 2017.pdfmaqbool haroon shahid safdar & co. chartered accountants...

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