Pkrevenue.com

Day: June 14, 2020

  • Bank account details made mandatory for registered taxpayers

    Bank account details made mandatory for registered taxpayers

    ISLAMABAD: All registered taxpayers are required to update their profile by providing details of bank accounts otherwise they will be excluded from Active Taxpayers List (ATL).

    The Finance Bill, 2020 has proposed amendment to insert Section 114A to the Income Tax Ordinance, 2001 to make the mandatory for all taxpayers to update their profile.

    According to budget commentary issued by PwC A. F. Ferguson Chartered Accountants, all existing registered taxpayers as well as those who will obtain registration by September 30, 2020 will be required to file and update their tax profile by December 31, 2020 whereas other taxpayers will be required to file and update their profiles within 90 days of registration.

    Furthermore, with regard to any changes in such profile, the updating is required to be made within 90 days of such change.

    Failure to file and update tax profiles in the above manner and within the prescribed dates could result in a taxpayer’s exclusion from active taxpayers list. However, such persons can be included back in active taxpayers list by filing the requisite information and paying the prescribed amount of surcharges.

    Following is the proposed new Section 114A to Income Tax Ordinance, 2001:

    “114A. Taxpayer’s profile.— (1) Subject to this Ordinance, the following persons shall furnish a profile, namely:—

    (a) every person applying for registration under section 181;

    (b) every person deriving income chargeable to tax under the head, “income from business”;

    (c) every person whose income is subject to final taxation;

    (d) any non-profit organization as defined in clause (36) of section 2;

    (e) any trust or welfare institution; or

    (f) any other person prescribed by the Board.

    (2) A taxpayer’s profile—

    (a) shall be in the prescribed form and shall be accompanied by such annexures, statements or documents as may be prescribed;

    (b) shall fully state, in the specified form and manner, the relevant particulars of—

    (i) bank accounts;

    (ii) utility connections;

    (iii) business premises including all manufacturing, storage or retail outlets operated or leased by the taxpayer;

    (iv) types of businesses; and

    (v) such other information as may be prescribed;

    (c) shall be signed by the person being an individual, or the person’s representative where section 172 applies; and

    (d) shall be filed electronically on the web as prescribed by the Board.

    (3) A taxpayer’s profile shall be furnished,—

    (a) on or before the 31st day of December, 2020 in case of a person registered under section 181 before the 30th day of September, 2020; and

    (b) within ninety days registration in case of a person not registered under section 181 before the 30th day of September, 2020.

    (4) A taxpayer’s profile shall be updated within ninety days of change in any of the relevant particulars of information as mentioned in clause (b) of sub-section (2).”

  • Filing annual tax return made mandatory for FTR taxpayers

    Filing annual tax return made mandatory for FTR taxpayers

    ISLAMABAD: The filing of annual income tax return has been made mandatory for taxpayers falling under Final Tax Regime (FTR).

    The Finance Bill, 2020 has proposed amendment to Section 114 of Income Tax Ordinance, 2001.

    A new clause (ae) has been inserted to Section 114 to make it mandatory for persons falling under FTR to file annual income tax returns.

    After proposed amendment the clause a of Section 114 shall be read as:

    (Note amendment in red)

    114. Return of income. — (1) Subject to this Ordinance, the following persons are required to furnish a return of income for a tax year, namely:–

    (a) every company;

    (ab) every person (other than a company) whose taxable income for the year exceeds the maximum amount that is not chargeable to tax under this Ordinance for the year; or

    (ac) any non-profit organization as defined in clause (36) of section 2;

    (ad) any welfare institution approved under clause (58) of Part I of the Second Schedule;

    (ae) every person whose income for the year is subject to final taxation under any provision of this Ordinance;

  • Tax amendments to property income introduced

    Tax amendments to property income introduced

    ISLAMABAD: Finance Bill, 2020 has proposed many changes to taxation of property income for tax year 2021.

    According to commentary of PWC A. F. Ferguson Chartered Accountants, prior to amendments made through Finance Act, 2019, rental income of non-corporate persons was taxed on a presumptive basis not allowing any deductions and allowances.

    The Finance Act, 2019 introduced an option for non-corporate persons deriving rental income exceeding Rs 4 million for taxation on net income basis at the applicable rate.

    The ceiling of Rs. 4 million for entitling this regime is now proposed to be done away.

    As a result, all non-corporate persons with rental income can now opt to be taxed at par with corporate persons.

    In case rental income is computed on net income basis, certain specific deductions are allowed, such as repair allowance, financial charges, insurance premium, local taxes, etc.

    In addition to these specific deductions, all other expenditure wholly and exclusive incurred for the purpose of rental income including administration and collection chares, etc. is allowed subject to a threshold of 6 percent of gross rentals.

    The threshold of 6 percent is now proposed to be reduced to 2 percent.

  • Process for automated scrutiny of income tax returns introduced

    Process for automated scrutiny of income tax returns introduced

    ISLAMABAD: An automated scrutiny of income tax returns has been introduced to Income Tax Ordinance, 2001 through Finance Bill, 2020.

    For this purpose a new sub-section 2A has been inserted to Section 120 of Income Tax Ordinance, 2001 through the Finance Bill, 2020.

    The new sub-section 2A is as:

    “(2A) A return of income furnished under sub-section (2) of section 114 shall be processed through automated system to arrive at correct amounts of total income, taxable income and tax payable by making adjustments for—

    (i) any arithmetical error in the return;

    (ii) any incorrect claim, if such incorrect claim is apparent from any information in the return;

    (iii) disallowance of any loss, deductible allowance or tax credit under Parts VIII, IX and X respectively of Chapter III; and

    (iv) disallowance of carry forward of any loss under clause (b) of sub-section (1) of section 182A:

    Provided that no such adjustments shall be made unless a system generated notice is given to the taxpayer specifying the adjustments intended to be made:

    Provided further that the response received from the taxpayer, if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such notice, adjustments shall be made.

    Provided also that where no such adjustments have been made within six month of filing of return, the amounts specified in the return as declared by the taxpayer shall be deemed to have been taken as adjusted amounts on the day the return was filed and the taxpayer shall be intimated automatically through IRIS.”;

    A new sub-section 7 has also been introduced in the section, which states:

    (7) For the purposes of this section,—

    (a) “arithmetical error” includes any wrong or incorrect calculation of tax payable including any minimum or final tax payable.

    (b) “an incorrect claim apparent from any information in the return” shall mean a claim, on the basis of an entry, in the return,—

    (i) of an item, which is inconsistent with another entry of the same or some other item in such return;

    (ii) regarding any tax payment which is not verified from the collection system; or

    (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction.”

  • Resident ship owners to pay tonnage tax at US 75 cents

    Resident ship owners to pay tonnage tax at US 75 cents

    ISLAMABAD: A Pakistan resident ship owning company shall pay tonnage tax of an amount equivalent to US 75 cents per ton, as proposed through Finance Bill, 2020.

    A new clause (c) has been inserted in Section 7A of Income Tax Ordinance, 2001 through Finance Bill, 2001 to levy the tax on resident ship owning company.

    “(c) A Pakistan resident ship owning company registered with the Securities and Exchange Commission of Pakistan after the 15th day of November, 2019 and having its own sea worthy vessel registered under Pakistan Flag shall pay tonnage tax of an amount equivalent to seventy five US Cents per ton of gross registered tonnage per annum.”

    The application of tax has been extended up to June 30, 2023 by amending sub-section 2.

    Before amendment the section is read as:

    7A. Tax on shipping of a resident person.—(1) In the case of any resident person engaged in the business of shipping, a presumptive income tax shall be charged in the following manner, namely:—

    (a) ships and all floating crafts including tugs, dredgers, survey vessels and other specialized craft purchased or bare-boat chartered and flying Pakistan flag shall pay tonnage tax of an amount equivalent to one US $ per gross registered tonnage per annum; and

    (b) ships, vessels and all floating crafts including tugs, dredgers, survey vessels and other specialized craft not registered in Pakistan and hired under any charter other than bare-boat charter shall pay tonnage tax of an amount equivalent to fifteen US cents per ton of gross registered tonnage per chartered voyage provided that such tax shall not exceed one US $ per ton of gross registered tonnage per annum:

    Explanation.—For the purpose of this section, the expression “equivalent amount” means the rupee equivalent of a US dollar according to the exchange rate prevalent on the first day of December in the case of a company and the first day of September in other cases in the relevant assessment year.

    (2) The provisions of this section shall not be applicable after the 30th June, 2020.

  • FBR allows Rs9.4 billion regulatory duty exemption on vehicle import

    FBR allows Rs9.4 billion regulatory duty exemption on vehicle import

    ISLAMABAD: Federal Board of Revenue (FBR) has allowed exemption from regulatory duty to the tune of Rs9.4 billion on import of vehicles during outgoing fiscal year.

    According to official documents, the revenue body granted exemption from regulatory duty under SRO 640(I)/2018 and SRO 1265(I)/2018 on import of vehicles by new entrants.

    The FBR allowed regulatory duty exemption of Rs6.46 billion under SRO 1265(I)/2018. The FBR issued details of the exemption of regulatory duty under this SRO granted under Para 2 of SRO for import under SRO678-2004, Fifth Schedule, Chapter 99, SRO 492-2009, 565-2006, import of vehicles by new entrants.

    Another amount of Rs2.93 billion granted as exemption from regulatory duty under SRO 640(I)/2018. Giving description, the FBR said that exemption of RD was given under Para 2 of the SRO for imports under SRO 678-2004, Fifth Schedule, Chapter-99, SRO 492-2009, 565-2006, import of Vehicles by new entrants, etc.  

  • Main focus to pay back Rs2,900 billion international loans during next fiscal year: Hafeez Shaikh

    Main focus to pay back Rs2,900 billion international loans during next fiscal year: Hafeez Shaikh

    ISLAMABAD: The main focus of the government during next fiscal year to pay back international loans of Rs2,900 billion, said Dr. Abdul Hafeez Shaikh, Advisor to Prime Minister on Finance, at post budget conference on Saturday.

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