Section 236O of the Income Tax Ordinance, 2001 outlines specific authorities exempted from the obligation to pay advance tax.
(more…)Author: Faisal Shahnawaz
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Dr. Alvi opens property exhibition for UAE based NRPs
KARACHI: Pakistan President Dr. Arif Alvi has inaugurated a property exhibition for the UAE based Non-Resident Pakistanis (NRPs) arranged by Pakistani banks offering Roshan Digital Account (RDA), in partnership with builders and developers, to showcase their products being offered under RDA.
The president expressed the hope that Non-Resident Pakistanis (NRPs) living in UAE would take maximum advantage of the State Bank’s Roshan Apna Ghar scheme and use it to fulfill their and their families’ housing needs in Pakistan, according to a statement issued by the State Bank of Pakistan (SBP) on Saturday.
Abdul Razak Dawood, Advisor to Prime Minister on Commerce, Textile, Industries & Production and Investment was also present at the occasion.
The exhibition was attended by a large number of Pakistanis, various UAE based Pakistani associations, Senior State Bank of Pakistan (SBP) management, Presidents/CEOs of commercial banks, UAE and Pakistan based property developers, and Pakistan’s Embassy officials in UAE.
Appreciating the vast potential of UAE based NRPs, President Dr. Arif Alvi said Pakistanis living in the UAE have significantly contributed towards development and economic growth of UAE and most of them regard UAE as their second home. He said that UAE is a major destination for Pakistani workers and their contribution in remittances is significant.
He observed that SBP, with the active support of commercial banks, has provided NRPs a unique opportunity to buy a home that hitherto, had been a very difficult task for various reasons. He felt satisfied that finally an end-to-end digital process had made it possible for NRPs. He shared his thoughts divulging on various strengths as a nation that Pakistanis should be proud of.
In his welcome address, Governor SBP, Dr. Reza Baqir expressed his heartfelt gratitude to President Dr. Arif Alvi for sparing time and inaugurating the exhibition. He said that SBP has been able to introduce RDA and Roshan Apna Ghar following the vision of Prime Minister Imran Khan to integrate the NRPs with the country’s economy.
Recounting the massive success of RDA, the Governor elucidated that RDA has proved to be a huge success and become a household name connecting over 250,000 NRPs under one umbrella besides attracting over USD2.5 billion since its launch in September last year.
Adding further, he said that the overwhelming success of RDA and Naya Pakistan Certificates (NPCs) speak volumes of the immense popularity of the incumbent regime in the hearts and minds of NRPs.
He said it has been a priority of the government and SBP to resolve the issues of NRPs living across the globe, as they fully understand their potential for lifting the country’s economy. He said that international organizations were appreciating the economic growth of the country despite odds.
He noted that economy was heading in right direction and the unprecedented increase in foreign exchange reserves is an expression of confidence of overseas Pakistanis in the government’s economic policies.
Speaking on the occasion, Abdul Razaq Dawood assured the audience that economy is heading in the right direction and maintaining a healthy growth path. He especially mentioned textile and cement sector where growth trends are remarkable, while automobile, consumer goods and food and likes are following similar trend.
Dawood said that country’s exports growth has already picked up and he is confident that it will keep the momentum and grow further this year.
He also mentioned SBP’s Temporary Economic Refinance Facility (TERF) for helping industry expand and modernize, besides SBP’s various initiatives for facilitating the public at large.
Roshan Apna Ghar is an initiative of SBP for Non Resident Pakistanis (NRPs) to buy, build or renovate their homes in Pakistan through their own investment or bank financing.
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Advance tax on purchase of immovable property
Section 236K of Income Tax Ordinance, 2001 has explained the advance tax on purchase or transfer of immovable property.
The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.
Following is the text of Section 236K of Income Tax Ordinance, 2001:
236K. Advance tax on purchase or transfer of immovable property.—(1) Any person responsible for registering, recording or attesting transfer of any immovable property shall at the time of registering, recording or attesting the transfer shall collect from the purchaser or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule.
Explanation,—For removal of doubt, it is clarified that the person responsible for registering, recording or attesting transfer includes person responsible for registering, recording or attesting transfer for local authority, housing authority, housing society, co-operative society, public and private real estate projects registered/governed under any law, joint ventures, private commercial concerns and registrar of properties.
(2) The advance tax collected under sub-section (1) shall be adjustable:
Provided that if the buyer or transferee is a non-resident individual holding a Pakistan Origin Card (POC) or National ID Card for Overseas Pakistanis (NICOP) or Computerized National ID Card (CNIC) who has acquired the said immovable property through a Foreign Currency Value Account (FCVA) or NRP Rupee Value Account (NRVA) maintained with authorized banks in Pakistan under the foreign exchange regulations issued by the State Bank of Pakistan, the tax collected under this section from such persons shall be final discharge of tax liability for such buyer or transferee.
(3) Any person responsible for collecting payments in installments for purchase or allotment of any immovable property where the transfer is to be effected after making payment of all installments, shall at the time of collecting installments collect from the allotee or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule:
Provided that where tax has been collected along with installments, no further tax under this section shall be collected at the time of transfer of property in the name of buyer from whom tax has been collected in installments which is equal to the amount payable in this section.
(4) Nothing contained in this section shall apply to a scheme introduced by the Federal Government, or Provincial Government or an Authority established under a Federal or Provincial law for expatriate Pakistanis:
“Provided that the mode of payment by the expatriate Pakistanis in the said scheme or schemes shall be in the foreign exchange remitted from outside Pakistan through normal banking channels.”
(Disclaimer: The text of the above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)
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Advance tax collection by educational institutes
Section 236I of Income Tax Ordinance, 2001 tells about the collection of advance tax by educational institutes.
The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.
Following is the text of Section 236I of Income Tax Ordinance, 2001:
236I. Collection of advance tax by educational institutions.— (1) There shall be collected advance tax from a person not appearing on the active taxpayers’ list at the rate specified in Division XVI of Part-IV of the First Schedule on the amount of fee paid to an educational institution.
(2) The person preparing fee voucher or challan shall charge advance tax under sub-section (1) in the manner the fee is charged.
(3) Advance tax under this section shall not be collected from a person on an amount which is paid by way of scholarship or where annual fee does not exceed two hundred thousand rupees.
(4) The term “fee” includes, tuition fee and all charges received by the educational institution, by whatever name called, excluding the amount which is refundable.
(5) Tax collected under this section shall be adjustable against the tax liability of either of the parents or guardian making payment of the fee.
“(6) Advance tax under this section shall not be collected from a person who is a non-resident and,—
(i) furnishes copy of passport as an evidence to the educational institution that during previous tax year, his stay in Pakistan was less than one hundred eighty-three days;
(ii) furnishes a certificate that he has no Pakistan-source income; and
(iii) the fee is remitted directly from abroad through normal banking channels to the bank account of the educational institution.”
Advance tax collected by educational institutes
The rate of collection of tax under section 236I shall be 5% of the amount of fee.
(Disclaimer: The text of the above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)
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Advance tax on sales to retailers
Section 236H of Income Tax Ordinance, 2001 explains the advance tax on sales to retailers.
The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.
Following is the text of Section 236H of Income Tax Ordinance, 2001:
236H. Advance tax on sales to retailers.— (1) Every manufacturer, distributor, dealer, wholesaler or commercial importer of pharmaceuticals, poultry and animal feed, edible oil and ghee, auto-parts, tyres, varnishes, chemicals, cosmetics, IT equipment, electronics, sugar, cement, iron and steel products, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector, at the time of sale to retailers“, and every distributor or dealer to another wholesaler in respect of the said sectors”, shall collect advance tax at the rate specified in Division XV of Part IV of the First Schedule, from the aforesaid person to whom such sales have been made.
(2) Credit for the tax collected under sub-section (1) shall be allowed in computing the tax due by the retailer on the taxable income for the tax year in which the tax was collected.
(Disclaimer: The text of the above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)
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Taxpayers urged to file tax returns by October 15
ISLAMABAD: The Federal Board of Revenue (FBR) on Saturday urged the taxpayers to avail extended date and file their returns for tax year 2021 by October 15, 2021.
In a statement the FBR once again urged all the taxpayers, both old and new, to make the most of one-time extension of 15 days granted for filing of Income Tax Returns till October 15, 2021.
Therefore, they are advised to file their returns without delay as the given deadline is already fast approaching.
It is further reiterated that the timely filing of income tax returns would also save them from the hassles of system issues which may occur due to extraordinary traffic at the portal on the last day.
However, FBR has enhanced the capacity of its IT System to ensure that the IRIS software is properly working, round the clock.
The FBR believes in facilitation of taxpayers and accords top priority to resolve their issues. The extension in date for filing of return till October 15, 2021 was also aimed at alleviation of their hardships.
It is further reaffirmed that the extension given on September 30 was only due to the fact that FBR’s IT System got overloaded and since that has been fixed now and no more extension will be allowed beyond October 15, 2021.
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Single sales tax portal to start functioning by month-end
ISLAMABAD: The single sales tax portal is likely to start functioning by end of October 2021 to facilitate taxpayers falling under all federal and provincial revenue jurisdictions.
In a statement, the Federal Board of Revenue (FBR) said that building further on its ongoing drive for digitization and automation of various processes involved in revenue collection, the FBR had developed “Single Sales Tax Portal” to facilitate the taxpayers and ensure the ease of doing business.
This watershed development of the Single Tax Portal developed by FBR is the outcome of various rounds of negotiations between FBR and the provincial revenue authorities.
The FBR has already offered this portal to the provincial revenue authorities in order to facilitate the taxpayers through one-link facility. The portal is in the final stages of testing and is likely to be launched by the last week of October, 2021.
It is pertinent to mention that till now, Sales Tax registered persons had to file their monthly Sales Tax returns separately to every tax jurisdiction where they conducted business, such as FBR, Sindh Revenue Board, Punjab Revenue Authority, Khyber Pakhtunkhwa Revenue Authority and Balochistan Revenue Authority. Some of the taxpayers had to file returns with revenue authorities of Azad Jammu & Kashmir and Gilgit-Baltistan.
This was a cumbersome task, which often led to complications and disputes over jurisdiction.
Single Sales Tax Portal will also help in simplification of the tax procedures. It will enable the taxpayers to save time and effort, and reduce their compliance costs. By minimizing data entry, it also addresses the issues of data and calculation errors.
The system will automatically apportion input tax adjustment as well as tax payments across the sales tax authorities. Through this system, officers of all revenue authorities will be able to make better informed decisions about matters related to Sales Tax.
The single portal system is a significant milestone towards taxpayers’ facilitation and a big leap forward towards harmonization of taxes between the Federal Government and the provinces.
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FBR receives 1.86 million tax returns for TY2021
ISLAMABAD: The Federal Board of Revenue (FBR) has received 1.86 million returns of income for tax year 2021 up to September 30, 2021.
This was disclosed at a meeting of Board-in-Council held recently.
The Board-in-Council meeting appreciated the comprehensive print and electronic media campaign launched by the FATE Wing which helped FBR receive massive number of 1.86 million returns September 30, 2021 generating tax of Rs39 billion with the returns.
This was fifth Board-in-Council meeting of the FBR, which was held under the chairmanship of Dr. Muhammad Ashfaq Ahmed, Chairman FBR.
The Board-in-Council members deliberated upon the decent growth of 38.3 per cent in revenue collection for the first quarter (July-September) of the current FY 2021-22 and conveyed their appreciation for the field formations.
The net revenue collection of Rs. 1,395 billion, exceeding the set target for the first quarter, has also been appreciated by the prime minister.
The Board-in-Council also devised a robust strategy to keep the same momentum of revenue collection in the second quarter starting (October to December) of the current Financial Year.
They expressed their strong resolve to collect substantial revenue in the second quarter and thus exceed target set for this period.
The members, particularly, mentioned about the impact created by the videos of national heroes and renowned celebrities appealing the general public through social media to file their returns within due date.
They thanked all the national heroes for their valued support in making this campaign highly successful. The members also lauded the initiative of FATE Wing to use all cellular companies for SMS outreach to the people to file their tax returns.
Furthermore, the Board-in-Council also decided to speed up the measures required to broaden the tax base, document the economy through POS and fast track implementation of Track and Trace System on Tobacco, Sugar, Fertilizers, Cement, Beverages, Petroleum and Pharmaceutical sectors.
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KIBOR rates on October 08, 2021
KARACHI: State Bank of Pakistan (SBP) on Friday issued the following Karachi Interbank Offered Rates (KIBOR) on October 08, 2021.
Tenor BID OFFER 1 – Week 7.23 7.73 2 – Week 7.26 7.76 1 – Month 7.31 7.81 3 – Month 7.71 7.96 6 – Month 8.06 8.31 9 – Month 8.36 8.86 1 – Year 8.59 9.09 -
Advance tax on sales to distributors, dealers, wholesalers
Section 236G of Income Tax Ordinance, 2001 defined rates of advance income tax on sales to distributors, dealers and wholesalers.
The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.
Following is the text of Section 236G of Income Tax Ordinance, 2001:
236G. Advance tax on sales to distributors, dealers and wholesalers.— (1) Every manufacturer or commercial importer of pharmaceuticals, poultry and animal feed, edible oil and ghee, auto-parts, tyres, varnishes, chemicals, cosmetics, IT equipment, electronics, sugar, cement, iron and steel products, fertilizer, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector, at the time of sale to distributors, dealers and wholesalers, shall collect advance tax at the rate specified in Division XIV of Part IV of the First Schedule, from the aforesaid person to whom such sales have been made.
Advance tax on sale to distributors, dealers or wholesalers.
The rate of collection of tax under section 236G shall be as set out in the following table namely:-
TABLE S.No. Category of Sale Rate of Tax (1) (2) (3) 1. Fertilizers 0.7% 2. Other than Fertilizers 0.1% (2) Credit for tax collected under sub-section (1) shall be allowed in computing the tax due by the distributor, dealer or wholesaler on the taxable income for the tax year in which the tax was collected.
(Disclaimer: The text of the above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)