Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • CCIR given special role for taxpayer grievance redressal

    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.

  • Valuation procedure for undeclared motor vehicles

    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

    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.

  • Valuation of immovable property identified as concealed asset

    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

    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

    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

    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

    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.

  • FBR gets details of buyers, sellers of immovable properties

    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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  • ECC approves $150 million for COVID vaccine purchase

    ECC approves $150 million for COVID vaccine purchase

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Friday approved an amount of $150 million for the purchase of the COVID-19 vaccine.

    Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the Economic Coordination Committee of the Cabinet here at Islamabad.

    Minister for Industries and Production Hammad Azhar, Minister for Economic Affairs Khusro Bakhtiar, Adviser to the PM on Institutional Reforms and Austerity Ishrat Hussain, SAPM on Petroleum Nadeem Babar and SAPM on Revenue Dr. Waqar Masood, also participated in the meeting.

    The ECC evaluated a proposal submitted by the Ministry of National Health Services, Regulations & Coordination and approved, in principle, the provision of technical supplementary grant of $150 million for the purchase of the COVID-19 vaccine.

    Ministry of Health briefed the ECC that this shall be the first phase of procurement and the amount of vaccine will suffice for the most vulnerable 5 percent of the population i.e. the health workers and the population above the age of 65 years; around 10 million people would be provided a vaccine cover under the above arrangement.

    The ECC further directed the Ministry of National Health Services to discuss the proposal with WB and other donors in coordination with Economic Affairs Division so that they could assist in providing financial facility for the procurement of the vaccine during the first phase and for the procurement of additional quantities in future as needed.

    The forum also directed the Ministry of NHS to draw a holistic proposal regarding the pricing and risk mitigation mechanism for the procurement of the COVID-19 vaccine for provision on a wider scale, in consultation with the relevant stake holders.

    The ECC approved the request of the Economic Affairs Division to proceed with the formal request for availing the G-20 Debt Relief for the extended period i.e January-June 2021; approval of the Federal Cabinet would be required for signing of the bilateral debt service suspension agreements.

    The ECC also approved two technical supplementary grants for “Initiating the Process of Retrenchment of Pakistan Steel Mills Employees (PSM)” for an amount of Rs.19.656 billion and “Prime Minister’s Special Package to Implement SKILLS FOR ALL Strategy as Catalyst for TVET Sector Development in Pakistan for Rs. 500 million.

    Another Rs. 689.3 million were also approved as budget re-appropriation for National Information Technology Board (NITB) for fulfilling its various requirements during the meeting. ECC also approved the proposal by the Ministry of Energy/ Petroleum Division for the allocation of 2.25 MMCFD gas from Umair -1 to M/s OGDCL for sale to M/s Engro at a mutually agreed and negotiated price, under a Gas Sale and Purchase Agreement subject to initiation of Field Development Plan and Development and Production Lease.

    The ECC was also briefed on the status of wheat import through Trade Corporation of Pakistan. Ministry of National Food Security and Research briefed the forum on the provision of additional 340,000 MT of Wheat, a tender was floated on 11-10-2020; the bids were opened on 18-10-2020 and lowest bid was accepted. The total quantity to be imported is now 2.248 MMT.