Lahore court rules FBR's new tax rates for late filers not applicable to old transactions

Morning! It’s Breast Cancer Awareness Month, and tomorrow is National Mammography Day.

Pro tip: If you want to ensure your mom actually goes for her test and not make excuses, promise her a shopping spree afterward.

We’ll be accepting your thanks in the form of referrals to your friends/colleagues about Itla 🙃.

In this week’s edition:

🎟️ FTC is protecting our wallets

💸 Looks like procrastination isn’t so bad

🎩 Google might have to break up… with itself

💔 We were busy surviving, and banks were busy thriving

- The Itla Squad 💼

Business

Global 🌎️

FTC = our new bestie

It’s not a good day to be a sneaky-product-manager as the U.S. Federal Trade Commission (FTC) has enough of their sleazy ways to empty our pockets with their confusing app/web flows for cancelling subscriptions.

The FTC just introduced a new rule called "click-to-cancel" to help people easily cancel unwanted subscriptions and memberships. This rule is meant to cut out the confusing steps that companies often use to make it tough to stop services you don’t want anymore.

Key takeaways:

• Companies must let you cancel subscriptions as easily as you sign up.

• Businesses have to get your clear permission before charging for auto-renewals or switching free trials to paid plans.

• They need to tell you when free trials or special offers will end.

Moving ahead: This rule is part of the Biden administration’s "Time is Money" initiative to tackle issues for consumers in various industries. We, Pakistanis, will keep losing our money on this for now 🙂 

TLDR: The FTC has introduced a new "click-to-cancel" rule to simplify the process of canceling unwanted subscriptions and memberships, aiming to remove the confusing hurdles companies often use. This rule requires businesses to allow easy cancellations, obtain clear consent before charging for auto-renewals or switching free trials to paid plans, and inform customers when free trials or special offers are ending.

What else is new in news

✶The Delhi Pollution Control Committee has banned all firecrackers—this means no making, storing, selling, or using them—until January 1, 2025. This includes online sales too.

Local 🇵🇰

Looks like procrastination isn’t so bad

Sometimes the lazy bird gets the worm.

The Lahore High Court (LHC) just decided that new higher taxes for late income tax filers cannot be applied to past transactions (in contrast to what FBR decided). The court also instructed the Federal Board of Revenue (FBR) to create a group of ‘experts’ to help develop clearer tax laws to avoid future legal issues. Ouch.

Key takeaways:

• The LHC ruled that late filing taxes don’t apply to returns filed before 2024.

• New tax rates were set: 4% for regular filers, 8% for late filers, and 10% for non-filers on property sales.

• Despite higher rates, tax collection dropped by 7% in the first three months of the fiscal year, totaling Rs48 billion.

Moving ahead: As of mid-October, the FBR received about 4.4 million income tax returns, which is still lower than the total from the previous year. It will be interesting to see how this spans out.

TLDR: The Lahore High Court ruled that new income tax rates for late filers cannot be applied to past property transactions. The FBR has experienced a 7% drop in withholding tax collections despite raising rates. Moving forward, the FBR should improve its drafting practices and reassess tax policies to boost real estate growth and collection efforts.

News Flash

✶ The Punjab Revenue Authority (PRA) is issuing notices in Lahore to see if they are registered and paying taxes.

Tech

Global 🌎️

No ‘happily ever after’ for Google

A judge ruled that Google is a monopolist, meaning it has too much control over the search market (it controls 90% of searches in the U.S.) so the U.S. government is considering to split Google up into smaller companies (much like AT&T), ultimately changing how how people find information online.

Key takeaways:

• The government might separate Google’s search engine from its other products like Android, Chrome, and the Google Play Store, to ensure fair competition.

• Google pays billions (around $26.3 billion in 2021) to companies like Apple to be the default search engine, and this practice is being questioned. The government might require a “choice screen” on devices, allowing users to choose their preferred search engine instead of automatically using Google.

• There are worries that Google’s power could affect the artificial intelligence market, leading to rules that protect other companies.

Moving ahead: The potential breakup of Google is an important moment for U.S. laws about fair competition in technology and will also set a precedent for other tech giants having ‘monopolistic’ tendencies.

TLDR: A judge ruled that Google is a monopolist, controlling 90% of U.S. searches. In response, the U.S. government is considering breaking it up into smaller companies to promote fair competition. This could lead to changes in how users find information and use search engines.

What else is new in news

✶ India's government will allocate spectrum—radio frequencies needed for communication—for satellite broadband, without holding auctions.

This decision follows Elon Musk's criticism of Mukesh Ambani's auction proposal. The satellite market is expected to grow to $1.9 billion by 2030. Musk's Starlink supports this method, while Ambani's Reliance argues for auctions to ensure fair competition.

Local 🇵🇰 

While we all were fighting for our lives, the banks were having a party

In recent years, Pakistan's banks have made big profits because the government has been borrowing more money to meet its financial needs. This increased borrowing often results in higher interest rates, which helps banks earn more (because they can lend out money at higher interest rates than they pay to customers).

At the same time, there’s a positive trend: digital payments are growing quickly. The latest Annual Payment Systems Review (PSR) by the State Bank of Pakistan shows that more people are using digital transactions, changing how people in Pakistan manage their money.

Key takeaways:

• In FY24, digital payments made up 13.4% of the total value and 52.4% of all transactions, rising from just 2.6% and 16.9% in FY20.

• Mobile banking is now the most popular way to pay, handling over 1.12 billion transactions worth Rs46.3 trillion. Mobile banking grew by 95.1% in value and 70% in volume.

• Internet banking processed 223.2 million transactions worth Rs23.5 trillion, increasing by 30% in volume.

• E-commerce volumes increased by 25.5% to 39.9 million but remained below the FY22 level of 45.5 million.

• The Raast payment system handled Rs3.9 trillion through 116.8 million peer-to-peer transactions, a huge jump of 198% and 130% year-on-year.

• A large 87.1% of digital transactions came from non-card payments, highlighting a shift toward fund transfers.

Moving ahead: Pakistan's banking sector is shifting toward digital payments, with strong growth in mobile and internet banking (let’s hope the banking sectors use some of these profits in bettering their very shitty banking apps..)

TLDR: Pakistan's banks are benefiting from increased government borrowing and higher interest rates, leading to more people using their existing funds. Digital payments are on the rise, making up 13.4% of total value and 52.4% of transactions in FY24. Mobile banking is the most popular method, with over 1.12 billion transactions.

Tech tour of news

✶The U.S. firm NERA has been picked to help the Government of Pakistan with its 5G spectrum auction, offering the lowest bid of $0.750 million. NERA will help create policies to boost telecom infrastructure and broadband access as Pakistan aims to finish the auction by April 2025.

More interesting Itla (اطلاع) we consumed:

🎬 The best part about watching shows? The exciting journeys that the main characters go through and the limited series Maid on Netflix has one of the most powerful and moving journey for its protagonist. Plus, it has some of the most stunning visuals of what it's like to struggle with mental-hardship/depression.