ISLAMABAD: The filing of income tax return has reached a record high of 2.95 million, according to the updated Active Taxpayers List (ATL) issued by Federal Board of Revenue (FBR) on Monday.
(more…)Author: Mrs. Anjum Shahnawaz
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CCIR given special role for taxpayer grievance redressal
ISLAMABAD: Chief Commissioners of Inland Revenue (CCIR) have been assigned special role for redressal of taxpayers’ grievances and attached the task as key performance indicator.
In an official note sent to all Regional Tax Offices (RTOs), the FBR authorized the CCIRs with quasi-official role of Inland Revenue Ombudsman in their respective jurisdictionally assigned territories vis-à-vis their own taxpayers – both existing and potential, and start resolving their grievances on a war footing.
The chief commissioners have been directed to ensure that they were the first point of contact for all existing and potential taxpayers for resolution of their problems and plaints, and ensure that even if a taxpayer has ever to go seeking redressal elsewhere, it is only after he has failed in getting the due relief from the Inland Revenue Ombudsperson at his doorsteps.
“In future, the Chief Commissioner’s role as Inland Revenue Ombudsperson would be a key indicator of his performance, and it would reflect adversely on his efficacy as a tax administrator if the number of complaints emanating from his jurisdiction and lodged elsewhere does not drastically come down over the next few months.”
The FBR further directed the CCIRs that they must widely publicize it in their respective jurisdiction so as to attract and internalize maximum complaints lodged by their taxpayers.
“This significant administrative shift needs to be optimally leveraged to salvage image of the service, restore confidence citizen’s trust in the system, and maximize revenue collection in a wholesome manner,” the FBR said.
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Valuation procedure for undeclared motor vehicles
The Federal Board of Revenue (FBR) has outlined a detailed procedure for the valuation of motor vehicles identified as undeclared or concealed assets in the Income Tax Rules, 2001.
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FBR explains fair market value of property, assets
ISLAMABAD: Federal Board of Revenue (FBR) explained fair market value, which is the price which the property or asset would ordinarily fetch on sale or supply in the open market at that time.
The FBR issued Income Tax Ordinance, 2001 (updated up to June 30, 2020) which explains the fair market value through Section 68.
Following is the text of Section 68 of the Ordinance, explaining the fair market value:
Section 68. Fair market value.—
(1) For the purposes of this Ordinance, the fair market value of any property or rent, asset, service, benefit or perquisite at a particular time shall be the price which the property or rent, asset, service, benefit or perquisite would ordinarily fetch on sale or supply in the open market at that time.
(2) The fair market value of any property or rent, asset, service, benefit or perquisite shall be determined without regard to any restriction on transfer or to the fact that it is not otherwise convertible to cash.
(3) Where the price “other than the price of immoveable property” referred to in sub-section (1) is not ordinarily ascertainable, such price may be determined by the Commissioner.
(4) Notwithstanding anything contained in sub-sections (1) and (3), the Board may, from time to time, by notification in the official Gazette, determine the fair market value of immovable property of the area or areas as may be specified in the notification.
(5) Where the fair market value of any immovable property of an area or areas has not been determined by the Board in the notification referred to in sub-section (4), the fair market value of such immovable property shall be deemed to be the value fixed by the District Officer (Revenue) or provincial or any other authority authorized in this behalf for the purposes of stamp duty.
(6) In respect of immovable property—
(i) component A of the formula in sub-section (2) of section 37;
(ii) “consideration received” as mentioned in Division X of Part IV of First Schedule;
(iii) “value of immovable property” as mentioned in Divisions XVIII of Part IV of the First Schedule; and
(iv) valuation for the purposes of section 111,shall not be less than the fair market value as determined under sub-section (4) or (5).
Explanation.—(1)For the removal of doubt, it is clarified that the fair market value as determined under sub-section (4) or(5) shall be for carrying out the purposes of this Ordinance only.
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Valuation of immovable property identified as concealed asset
ISLAMABAD – The Federal Board of Revenue (FBR) has issued determinations regarding the valuation of immovable properties identified as concealed or undeclared assets under Section 111 of the Income Tax Ordinance, 2001.
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Banks provide statements of account holders to tax authorities
ISLAMABAD – Banks are obligated to furnish statements of deposits and withdrawals of account holders to the Federal Board of Revenue (FBR).
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Weekly Review: investors may shy away on rising COVID cases
KARACHI: The rising cases of COVID and fear of complete lockdown to keep investors away from venturing in the market during coming days.
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Rules drafted to empower customs freeze smuggled assets
ISLAMABAD: Federal Board of Revenue (FBR) has drafted rules to empower customs officials to trace and freeze assets acquire by any person through proceeds of smuggling.
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SBP announces incentives for banks to finance low cost housing
KARACHI: The State Bank of Pakistan (SBP) on Friday amended regulations to incentivize banks for financing low cost and affordable housing.
A statement said that the central bank is constantly providing enabling regulatory environment to promote housing and construction finance.
This is an important sector that has significant economic linkages with other sectors in the economy and the current level of credit provision in this sector is at a very low level of less than 1 percent of GDP which is much lower than in other similar countries and in the region.
To support the provision of finance to this sector and especially facilitate affordable housing, SBP has now announced five regulatory relaxations to incentivize banks for financing low cost and affordable housing.
Firstly, the definition of low cost housing finance used in the current regulations for banks has been aligned with definition used under Government Markup Subsidy Facility for Housing Finance eligible under Tiers I & II of housing finance.
Specifically, in the SBP regulations, the value of housing unit has been increased from Rs 3 million to Rs 3.5 million with maximum loan size increased from Rs 2.7 million to Rs 3.15 million. Consequently, the incentive for low cost housing finance will increase for banks as they will not only be able to enjoy markup subsidy facility by the Government but the regulatory incentives under low cost housing finance by SBP as well.
Current regulations and banking practices require banks to obtain documentary evidence of income. Provision of this information is difficult for people generating income from informal sources which are generally in low income segments.
In order to facilitate financing for this segment, State Bank is urging the banks to use alternate methods to identify income sources and assess the credit worthiness of the borrower.
The 2nd and 3rd type of relaxations are being given to facilitate financing for this segment. Accordingly, under 2nd relaxation, banks have been exempted from the requirement of using ‘verifiable income’ for the purpose of calculating Debt Burden Ratio (DBR) in case of low cost housing finance where banks are using income proxies and where income of borrower is not verifiable.
Resultantly, borrowers with ‘non-verifiable income,’ estimatedby banks using income proxies, will also become eligible to avail low cost housing finance.
Thirdly, banks have also been exempted from the requirement of observing DBR, in case of low cost housing finance, where banks are using repayment surrogates like rent, utility bills, telcos bills, etc. to assess repayment capacity of borrower. Hence, borrowers without verifiable or non-verifiable income will become eligible to avail low cost housing finance.
Fourthly, banks have been exempted from the requirement of Internal Credit Risk Rating System for the low cost housing finance till September 30, 2022 as their current systems do not specifically cater for low cost housing finance.
Accordingly, borrowers of low cost housing finance who cannot avail financing due to banks internal credit rating criteria will now become eligible if the bank is otherwise satisfied. This time barred relaxation will provide banks to develop their Internal Credit Risk Rating Systems for low cost housing finance.
Finally, in order to provide comfort to the borrowers who have liquid securities or already have a housing unit, banks have been allowed to extend housing finance for purchase/construction of a residential property by accepting existing residential property or liquid securities in lieu of equity contribution for housing finance at the time of calculations of Loan to Value ratio.
Financing bank will create its lien on existing residential property/liquid securities in addition to mortgage of residential property being financed.
It is expected that the above regulatory incentives would provide further impetus to SBP’s on-going efforts to accelerate housing and construction finance in Pakistan. It is reminded that banks have already been given mandatory targets of 5 percent of their private sector advances as housing and construction finance by December 31, 2021.
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FBR gets details of buyers, sellers of immovable properties
The Federal Board of Revenue (FBR) is employing a comprehensive approach to enhance tax compliance by obtaining crucial information on buyers and sellers of immovable properties through provincial registrars.
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