Oil above $61 ahead of OPEC meeting

Oil prices edged lower but hovered above $61 a barrel Monday in Asia as investors eyed an OPEC meeting this week and weighed evidence of a global economic recovery.
Trading was light because U.S. markets are closed Monday for Memorial Day.
Benchmark crude for July delivery was down 35 cents to $61.32 a barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange. On Friday, the contract rose 62 cents to settle at $61.67.
Oil has rallied on investor optimism that the worst of the global economic downturn is over. Traders will get fresh data to mull this week when the U.S. releases a consumer confidence index for May and reports on sales of existing and new homes last month.
In Asia, there are signs that the drop in exports has bottomed, although the outlook remains murky.
Investors will also be looking for evidence of increased demand as the U.S. summer driving season begins.
“The $60 level implies that we’re going to have a V-shaped recovery in the global economy, and there’s really very little evidence of that,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.
“In the near-term, the rhetoric about post-Memorial Day driving activity may provide support, but eventually fundamentals will re-exert themselves in the market,” he said.
The Organization of Petroleum Exporting Countries meets on Wednesday in Vienna to discuss a possible production cut that would add to 4.2 million barrels a day of output reductions the cartel has announced since September.
OPEC leaders this year have said they want the price of crude at $70 a barrel, and most analysts say the recent jump to above $60 from below $35 in March will keep the group from any further production cuts.
“We don’t expect any changes in output targets,” Shum said. “The price is too high to cut.”In other Nymex trading, gasoline for June delivery was steady at $1.84 a gallon and heating oil fell 0.72 cent to $1.53 a gallon. Natural gas for June delivery dropped 2.5 cents to $3.49 per 1,000 cubic feet.
In London, Brent prices slid 29 cents to $60.49 a barrel on the ICE Futures exchange. Posted by graadil at 3:10 PM 0 comments Monday, May 18, 2009Taxpayers foreign assets: FBR has authority to investigate ISLAMABAD: The Federal Board of Revenue (FBR) has legal authority to investigate assets held outside Pakistan, depending on whether the tax authorities have sufficient evidence of unexplained assets under Income Tax Ordinance 2001. Sources told Business Recorder on Saturday that if the assets purchased outside Pakistan have not been declared in the wealth statement, it is difficult to check the source or extent of investment. Without authentic evidence, it is impossible to assess the source of investment.
However, the most important issue during the entire exercise is to determine the resident status of the taxpayer. This alone would form the basis for investigating any Pakistani with assets abroad. Resident status means a person who has lived in Pakistan or stayed in Pakistan for 183 days or more in one fiscal year under Income Tax Ordinance 2001.
Under relevant clause on exchange of information under the Avoidance of Double Taxation Convention, the department can ask tax authorities of other countries (bilateral agreement) to provide taxpayer profile or information about a Pakistani living abroad. Based on this information, the income tax department can probe assets abroad. If the source of investment has not been explained by the taxpayer, the department is legally empowered to convert the equal amount of foreign currency into Pak rupees and adding this amount to his income chargeable to tax.
Sources said that the taxpayers have to declare income earned outside Pakistan in their income tax returns and such income earned abroad is liable to tax provided the status of these taxpayers is of resident person in Pakistan. Presently, there is no wealth tax on fixed assets as the relevant wealth tax law was repealed.
The assets, whether purchased locally or abroad, could be probed in case the source of investment for purchasing assets is unexplained under section 111 of the Income Tax Ordinance 2001. In case assets purchased abroad have not been declared in the wealth statement, it is not possible for the department to add this to his income.
In the past, the department tried to access information about Pakistanis making huge investments in the real estate business in United Arab Emirates (UAE). The exercise was done to pinpoint potential Pakistani investors who are out of the tax net. However, the department was unable to proceed against such Pakistanis due to weak enforcement. The provisions of Income Tax Ordinance of 2001 are weak, almost non-existent, especially with respect to international money transfers. The exercise was not successful because of the legal provisions being insufficient and ineffective, sources added.
Explaining section 111, analysts said that the concept behind its provisions was to bring into account under the chargeability of such incomes that either have no source or a taxpayer fails to explain its sources or the assets are recorded below transactional value actually transacted. In this way, it is the taxation of income, which is either consciously or by fiction concealed/avoided from the tax authorities. The section 111 has been drafted to cater this situation.
Sources said that if a Pakistani is doing business in the UK and earning income/profit abroad, he would be liable to declare such profit in the income tax returns. Under Income Tax Ordinance, he has to declare world income in Pakistan. However, the status of the taxpayer as a resident must be determined before chargeability of tax.
There are two scenarios of taxation of unexplained income and assets under income tax laws: (i) if a taxpayer has, say, paid tax in UK, he has to declare his income and tax paid to the UK tax department and has to declare the tax paid in the income tax return filed in Pakistan. Under the Avoidance of Double Taxation Convention inked with the UK, if a person has paid the tax in UK, he will be entitled to claim its credit in Pakistan; in the presence of Avoidance of Double Taxation agreement, if a person has paid tax in UK and subsequently declared his income in Pakistan, he can claim credit in Pakistan. He would inform the department that he has paid tax in UK for claiming credit in Pakistan; (ii) in case there is no treaty on Avoidance of Double Taxation with a specific country, the taxpayer has to pay additional tax in Pakistan even if he has paid the due tax abroad.
When asked about foreign assets declarations by top government officials, tax experts said that the President, Prime Minister and MNAs have to file their income tax returns. Under section 114 of the Income Tax Ordinance 2001, every person having taxable income is required to file returns. Similarly, every resident person is required to file wealth statement if his income is more than Rs 5 lakh per year under section 116 of the Ordinance 2001.
Thus, the President, Prime Minister and MNAs have to declare assets including foreign assets. They have to file statements of assets and liabilities to the government inclusive of assets belonging to spouse and dependent children. The question arises whether the top government functionaries are declaring foreign assets in their respective wealth statements or these statements are not being filed by them, experts added.