3.5 percent WHT exemption: oil ..

he Federal Board of Revenue has granted exemption of 3. 5 percent withholding tax to certain categories of taxpayers including oil tankers and purchasers of agricultural produce and reduced rate of withholding tax up to one percent on steel melters under section 153 (1) (a) of the Income Tax Ordinance 2001.

153(1)(a) of the Income Tax Ordinance, 2001 against cash payments made for meeting the incidental expenses of a business trip to the crew of Oil Tanker. The rate of exemption is 3. 5 percent in the said case of oil tankers. According to sources, the steel melters have also been allowed to deduct withholding tax at reduced rate of one percent under section 153(1)(a) of the Income Tax Ordinance, 2001 on account of local purchases of steel scrap. The said benefit is granted subject to fulfilment of condition to opt Sales Tax Special Procedure and filing of tax returns under the Special Procedure scheme. The rate of withholding tax has been reduced from 3. 5 to one percent. Through the notification, sources said that any purchase of agricultural produce directly purchased from grower has been exempted from provisions of withholding tax under section 153(1)(a) of the Income Tax Ordinance, 2001. Besides this specific exclusion from provision of Section 21(L) of the Income Tax Ordinance, 2001 has also been allowed to purchaser of agricultural produce meaning thereby payments made in cash shall also be treated as admissible deduction against the statutory inadmissibility under section 21(L). As per SRO. 787(I)/2011, the provisions of clause (I) of section 21 and clause (a) of sub section (1) of section 153 shall not apply where agricultural produce is purchased directly from the grower of such produce, subject to provision of a certificate by the grower to the withholding agent in the prescribed format. The certificate to be filed by the grower of agricultural produce would specify the CNIC Number of the person who has sold agricultural produce. The information would also include name of agricultural produce like wheat, rice, cotton, sugarcane etc. The quantity, total price and land identification would also be submitted in the form. The notification further said that the provisions of clause (a) of sub section (1) of section 153 shall not apply only in case of cash payments made for meeting the incidental expenses of a business trip to the crew of oil tanker. This exemption shall not apply in case of any other payments made by owners of oil tankers. The withholding tax under clause (a) of sub section (1) of section 153 shall be deductible at one percent on local purchase of steel scrap by those steel melters who have opted under Sales Tax Special Procedures and are compliantly filing returns under the said scheme, the notification added.

In this connection, the FBR has issued an SRO. 787(I)/2011 here on Wednesday. Sources told Business Recorder here on Wednesday that the owners of oil tankers have been granted exemption from provisions of withholding tax under section

Foreign exchange marketForeign exchange market

The foreign exchange market (forex, FX, or currency markets) is a worldwide decentralized over-the-counter financial market for the trading of currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.

The primary purpose of the foreign exchange is to assist international trade and investment, by allowing businesses to convert one currency to another currency. For example, it permits a US business to import British goods and pay Pound Sterling, even though the business's income is in US dollars. It also supports speculation, and facilitates the carry trade, in which investors borrow low-yielding currencies and lend (invest in) high-yielding currencies, and which (it has been claimed) may lead to loss of competitiveness in some countries.

In a typical foreign exchange transaction, a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market began forming during the 1970s when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.

The foreign exchange market is unique because of

its huge trading volume, leading to high liquidity;
its geographical dispersion;
its continuous operation: 24 hours a day except weekends, i.e. trading from 20:15 GMT on Sunday until 22:00 GMT Friday;
the variety of factors that affect exchange rates;
the low margins of relative profit compared with other markets of fixed income; and
the use of leverage to enhance profit margins with respect to account size.
As such, it has been referred to as the market closest to the ideal of perfect competition, notwithstanding currency intervention by central banks. According to the Bank for International Settlements,[3] as of April 2010, average daily turnover in global foreign exchange markets is estimated at $3.98 trillion, a growth of approximately 20% over the $3.21 trillion daily volume as of April 2007. Some firms specializing on foreign exchange market had put the average daily turnover in excess of US$4 trillion.