71 out of 84 sugar mills declared losses in FY19: FBR chief

[Shahzaz ud din]

71 out of 84 sugar mills declared losses in FY19: FBR chief
By
Shahzad Paracha
-
June 18, 2019
1
2444

• ‘FBR has agreed to reduce withholding tax for registered sugar dealers’

ISLAMABAD: In a briefing to the Senate’s Standing Committee on Finance on Tuesday, Federal Board of Revenue Chairman Shabbar Zaidi disclosed that out of the total 84, as many as 71 sugar mills declared losses in the last fiscal year (FY2018-19).

He said that the argument of the sugar mills that “most of them are running in losses” was not acceptable to the FBR.

However, he added, the department has agreed to reduce withholding tax and minimum tax for those sugar dealers who would get themselves registered with the FBR.

“After the introduction of the Finance Bill 2019, the sugar industry representatives came to the FBR to discuss their taxation and documentation issues. The sugar dealers sought waivers from registration but the FBR rejected this demand,” he informed. “In case of registration of sugar dealers, the withholding tax applicable on fast-moving consumer goods (FMCG), as well as minimum tax, would be reduced.”

He informed the committee that the FBR was seriously working on a “weak area” i.e. Commissioner (Appeals).

“Aggrieved taxpayers usually go to the forum of Commissioner (Appeals) for redressal of their complaints, but if the said position is not independent, then there is no purpose of the appeals filed by the taxpayers,” he added.

Meanwhile, the 16th meeting of the National Assembly’s Standing Committee on Finance, Revenue and Economic Affairs was held under the chairmanship of MNA Asad Umar.

The committee expressed its apprehensions about the amendments proposed by the government in Section 16 of Anti-Money Laundering (Amendment) Bill, 2019, with regard to the powers assigned to the investigating officer or any other officers of the agencies mentioned in subsection (2) of section 24 of the AML Act, 2010.

The committee once again directed the Ministry of Finance to propose maintainable alternative suggestions in light of the queries made by the committee members.

While considering the Foreign Exchange Regulation (Amendment) Bill, 2019, the State Bank of Pakistan senior director informed the committee that foreign exchange policy and operations in Pakistan were governed under the provisions of Foreign Exchange Regulation Act (FERA), 1947, which empowers the SBP to regulate inflows and outflows the foreign exchange. However, he added, the SBP does not have explicit powers under FERA, 1947 to issue any regulation/instruction regarding the inland movement of foreign currencies.

The committee recommended the SBP to prepare a comprehensive presentation on the implementation procedure of the said bill before enactment by the parliament. Members were also concerned that the quantum of foreign currency was not defined in the bill.

The FBR chairman briefed the committee on the salient futures of the amnesty scheme launched by the government. He stated that asset declarations date of the said scheme would not be extended beyond 30th June.

 

[khail007]

All 71 sugar mills to be audited by independent international auditors and those found lying should be confiscated and auctioned the owners should be sent to jail for at least 10 years and heavily fined. It will set an example for other liars.

 

[Yaseen1]

All 71 sugar mills to be audited by independent international auditors and those found lying should be confiscated and auctioned the owners should be sent to jail for at least 10 years and heavily fined. It will set an example for other liars.

International audit firms not audit private companies as audit fees is high and only public listed companies are mostly audited by big4 firms Recently Ey ernst young has decided to move out of Pakistan due to lack of good clients and low profits in Pakistan and it is expected other top 3 audit firms will also leave Pakistan so there will be no franchise of top firms in Pakistan in future.

 

[valkyr_96]

International audit firms not audit private companies as audit fees is high and only public listed companies are mostly audited by big4 firms Recently Ey ernst young has decided to move out of Pakistan due to lack of good clients and low profits in Pakistan and it is expected other top 3 audit firms will also leave Pakistan so there will be no franchise of top firms in Pakistan in future.

any notice?

 

[Yaseen1]

https://profit.pakistantoday.com.pk...gm_D-idBOppu3WOVbMnosehDo8_caNR7NYV3p7sCqWWb4

any notice?

 

[B.K.N]

All 71 sugar mills to be audited by independent international auditors and those found lying should be confiscated and auctioned the owners should be sent to jail for at least 10 years and heavily fined. It will set an example for other liars.

Sugar Mills are actually running in losses

 

[The Accountant]

International audit firms not audit private companies as audit fees is high and only public listed companies are mostly audited by big4 firms Recently Ey ernst young has decided to move out of Pakistan due to lack of good clients and low profits in Pakistan and it is expected other top 3 audit firms will also leave Pakistan so there will be no franchise of top firms in Pakistan in future.

Lolz ... who told you that ?

Brig 4 audit firms audit all type of clients except for AFF who avoid taking textile and sugar client due to lack of governance irrespective of being public or private ...

I myself have done audit of multiple private companies ...

Regarding EY. It is an entirely different issue dont spread false news. The issue in Pakiatan's Ford rhodes sidhat hyder is repeesentative of EY but EY global is not satisfied with the quality control review specially of some partners. So either EY will demerge from ford rhodes sidhat hyder and there will be a split of the firm or otherwise some of the senior partners that owns the equity and brand name fird rhodes sidhat hyder has to go ...

Its a matter of organizational ownership and quality

 

[Yaseen1]

https://profit.pakistantoday.com.pk...gm_D-idBOppu3WOVbMnosehDo8_caNR7NYV3p7sCqWWb4

Lolz ... who told you that ?

Brig 4 audit firms audit all type of clients except for AFF who avoid taking textile and sugar client due to lack of governance irrespective of being public or private ...

I myself have done audit of multiple private companies ...

Regarding EY. It is an entirely different issue dont spread false news. The issue in Pakiatan's Ford rhodes sidhat hyder is repeesentative of EY but EY global is not satisfied with the quality control review specially of some partners. So either EY will demerge from ford rhodes sidhat hyder and there will be a split of the firm or otherwise some of the senior partners that owns the equity and brand name fird rhodes sidhat hyder has to go ...

Its a matter of organizational ownership and quality

Private companies having less profit avoid high audit fees and big4 firms audit fees is high, if company is incurring loss and is near breakeven it may hire big4 for consultancy and advisory but for audit they will prefer other small firm to bear less audit expenses.There are many reasons why ey moving out of Pakistan and one reason is it not get good number of clients to earn enough audit fees as they are not complying with proper framework and not want high quality audit due to lack of funds clients are willing to provide to audit firm for this purpose and there is possibility that other big3 firms may follow this
https://profit.pakistantoday.com.pk...gm_D-idBOppu3WOVbMnosehDo8_caNR7NYV3p7sCqWWb4

 

[tarrar]

Working directly under corrupt political influence or most of them are owned by corrupt politicians.

 

[The Accountant]

https://profit.pakistantoday.com.pk...gm_D-idBOppu3WOVbMnosehDo8_caNR7NYV3p7sCqWWb4

Private companies having less profit avoid high audit fees and big4 firms audit fees is high, if company is incurring loss and is near breakeven it may hire big4 for consultancy and advisory but for audit they will prefer other small firm to bear less audit expenses.There are many reasons why ey moving out of Pakistan and one reason is it not get good number of clients to earn enough audit fees as they are not complying with proper framework and not want high quality audit due to lack of funds clients are willing to provide to audit firm for this purpose and there is possibility that other big3 firms may follow this
https://profit.pakistantoday.com.pk...gm_D-idBOppu3WOVbMnosehDo8_caNR7NYV3p7sCqWWb4

Who told you private companies has less profits? Not all the private companies has less profits. Khaadi is a private limited having profits in billions.

Regarding EY re-read the first para of article you shared:

Ernst & Young, the global accounting and professional services firm that goes by its brand name EY, is re-evaluating its relationship with its Pakistani partner Ford Rhodes Sidat Hyder, which includes the possibility that EY will sever its ties with its local partner altogether.

So its nothing to do with business or portability in Pakistan but a dispute between local firm partners and EY partners. If you go back into history EY and Sidhat Hyder were two different that got merged but now they are again evaluating to get separated.

The statement about fee is writers own view and has nothing to do with reality. Recently AFF gave Audit to all senior partners of the firm. How many businesses in the country can afford to give Audi to all the directors of the company ? None

I have seen financials of these firms and they are minting money like no other business so the claim that EY is going to exit Pakistani market is nothing but stupid and has no basis.

I am from the profession so I know it very well.

 

[Cash GK]

International audit firms not audit private companies as audit fees is high and only public listed companies are mostly audited by big4 firms Recently Ey ernst young has decided to move out of Pakistan due to lack of good clients and low profits in Pakistan and it is expected other top 3 audit firms will also leave Pakistan so there will be no franchise of top firms in Pakistan in future.

Nah nah. We should do audit ...we should not allow these n leage and ppp mafia..around 70 percent belongs to them

 

[Fawadqasim1]

Nah nah. We should do audit ...we should not allow these n leage and ppp mafia..around 70 percent belongs to them

Absolutely

 

[Imran Khan]

Everyone is in loss

 

[ps3linux]

Who told you private companies has less profits? Not all the private companies has less profits. Khaadi is a private limited having profits in billions.

Regarding EY re-read the first para of article you shared:

Ernst & Young, the global accounting and professional services firm that goes by its brand name EY, is re-evaluating its relationship with its Pakistani partner Ford Rhodes Sidat Hyder, which includes the possibility that EY will sever its ties with its local partner altogether.

So its nothing to do with business or portability in Pakistan but a dispute between local firm partners and EY partners. If you go back into history EY and Sidhat Hyder were two different that got merged but now they are again evaluating to get separated.

The statement about fee is writers own view and has nothing to do with reality. Recently AFF gave Audit to all senior partners of the firm. How many businesses in the country can afford to give Audi to all the directors of the company ? None

I have seen financials of these firms and they are minting money like no other business so the claim that EY is going to exit Pakistani market is nothing but stupid and has no basis.

I am from the profession so I know it very well.

I have seen accounts of these small companies from two other perspectives the lending side and the financial planning side which are both supported by bank statements, cash receipts, property documents the sheer volume of financial under reporting is so much that I had concluded that our actual GDP is at least 4 times the one reported by SBP, if its saying that our GDP is $280 billion multiply it with a factor of 4 and you get something close to real GDP.

Besides I have always been of the opinion that no business can operate continuously while making losses, if you look at the accounts of these sugar mills they are in loss for decades so how come they are still operational, being an ACA/FCA you would understand without injection of more equity its not possible to keep the business afloat and yet you see nothing of the sorts happening in the accounts.

Even if there is equity/capital injection where is that money coming from, I mean who could be so idiot as to keep a loss making entity operating of course those operating under fauji/shaheen foundation, AWT and Askari platforms are an exception. Reminds me of a pea brained retired general being MD of one shoe making unit making tall claims about his unit and comparing their quality with my Clarks.

There is another aspect for them to be in losses and yet operational, a challenge rather find out about the refunds of any of these units and you ll understand what I mean.

Another aspect, the by-product ethanol is 90% export item find out where it goes, correlate it with production capacity you ll be amazed that how these bast*rds are screwing the country.

Another point unless one knows about how much an audit firms charges claims should not be made, auditor remuneration is mentioned in the quarterly accounts of companies and they are peanuts.

And not many know about the parallel illegal investment exchange which is being run by this sugar mafia through hypothecation of sugar inventory more on this point I can only elaborate some other time, I know so many people who have invested billions upon billions in this grey channel.

 

[The Accountant]

I have seen accounts of these small companies from two other perspectives the lending side and the financial planning side which are both supported by bank statements, cash receipts, property documents the sheer volume of financial under reporting is so much that I had concluded that our actual GDP is at least 4 times the one reported by SBP, if its saying that our GDP is $280 billion multiply it with a factor of 4 and you get something close to real GDP.

Besides I have always been of the opinion that no business can operate continuously while making losses, if you look at the accounts of these sugar mills they are in loss for decades so how come they are still operational, being an ACA/FCA you would understand without injection of more equity its not possible to keep the business afloat and yet you see nothing of the sorts happening in the accounts.

Even if there is equity/capital injection where is that money coming from, I mean who could be so idiot as to keep a loss making entity operating of course those operating under fauji/shaheen foundation, AWT and Askari platforms are an exception. Reminds me of a pea brained retired general being MD of one shoe making unit making tall claims about his unit and comparing their quality with my Clarks.

There is another aspect for them to be in losses and yet operational, a challenge rather find out about the refunds of any of these units and you ll understand what I mean.

Another aspect, the by-product ethanol is 90% export item find out where it goes, correlate it with production capacity you ll be amazed that how these bast*rds are screwing the country.

Another point unless one knows about how much an audit firms charges claims should not be made, auditor remuneration is mentioned in the quarterly accounts of companies and they are peanuts.

And not many know about the parallel illegal investment exchange which is being run by this sugar mafia through hypothecation of sugar inventory more on this point I can only elaborate some other time, I know so many people who have invested billions upon billions in this grey channel.

You are absolutely right. The kind of under reporting we have is phenomenal. Let me tell you one of my own personal experiences. In last budget government brought a provision to integrate our retail POS systems with FBR to share live sales data with FBR of each POS machine. The penalty of not integrating was 50% higher output sales tax. but to surprise me, one of the major player of the industry (who also happens to be a religious brand of the industry) refused to integrate. So unless he was slashing half of its official sales, there is no way he could have opt for not integrating with FBR. Here we are talking about formal corporate sector. Now imagine how much embezzlement opportunities are there who are dealing with informal sector of farmers.

By the way I am still ACA, but soon to become FCA within few months.