ISLAMABAD: Federal Board of Revenue (FBR) updated Active Taxpayers List (ATL) on Monday and added around 42,000 taxpayers’ names since launch of new list.
(more…)Author: Faisal Shahnawaz
-
Income Tax Ordinance 2001: advance tax on electricity consumption
KARACHI: Power supply companies are required to deduct and collect advance tax from industrial and commercial consumers at rates specified.
According to updated Income Tax Ordinance, 2001 issued by Federal Board of Revenue (FBR), the Section 235 explained the rates of advance tax on consumption of electricity.
Section 235: Electricity consumption
Sub-Section (1): There shall be collected advance tax at the rates specified in Part-IV of the First Schedule on the amount of electricity bill of a commercial or industrial consumer.
Rate of collection of tax under section 235 where the gross amount of electricity bill
(a) does not exceed Rs. 400 Rs. 0 (b) exceeds Rs. 400 but does not exceed Rs. 600 Rs. 80 (c) exceeds Rs. 600 but does not exceed Rs. 800 Rs. 100 (d) exceeds Rs. 800 but does not exceed Rs. 1000 Rs. 160 (e) exceeds Rs. 1000 but does not exceed Rs. 1500 Rs. 300 (f) exceeds Rs. 1500 but does not exceed Rs. 3000 Rs. 350 (g) exceeds Rs. 3000 but does not exceed Rs. 4500 Rs. 450 (h) exceeds Rs. 4500 but does not exceed Rs. 6000 Rs. 500 (i) exceeds Rs. 6000 but does not exceed Rs. 10000 Rs. 650 (j) exceeds Rs. 10000 but does not exceed Rs. 15000 Rs. 1000 (k) exceeds Rs. 15000 but does not exceed Rs. 20000 Rs. 1500 (l) exceeds Rs. 20000. (i) at the rate of 12 per cent for commercial consumers;
(ii) at the rate of 5 per cent for industrial consumers.Sub-Section (2): The person preparing electricity consumption bill shall charge advance tax under sub-section (1) in the manner electricity consumption charges are charged.
Explanation.— For removal of doubt, it is clarified that for the purposes of this section electricity consumption bill referred to in sub-section (2) means electricity bill inclusive of sales tax and all incidental charges.
Sub-Section (3): Advance tax under this section shall not be collected from a person who produces a certificate from the Commissioner that his income during tax year is exempt from tax.
Sub-Section (4): Under this section, —
(a) in the case of a taxpayer other than a company, tax collected up to bill amount of three hundred and sixty thousand Rupees per annum shall be treated as minimum tax on the income of such persons and no refund shall be allowed;
(b) in the case of a taxpayer other than a company, tax collected on monthly bill over and above thirty thousand rupees per month shall be adjustable; and
(c) in the case of a company, tax collected shall be adjustable against tax liability.
Section 235A: Domestic electricity consumption
Sub-Section (1) There shall be collected advance tax at the rates specified in Division XIX of Part IV of the First Schedule on the amount of electricity bill of a domestic consumer.
The rate of tax to be collected under section 235A shall be-
(i) 7.5% if the amount of monthly bill is Rs. 75,000 or more; and
(ii) 0% the amount of monthly bill is less than Rs. 75,000.Explanation.— For removal of doubt, it is clarified that for the purposes of this section, electricity consumption bill referred to in sub-section (2) means electricity bill inclusive of sales tax and all incidental charges.
Sub-Section (2): The person preparing electricity consumption bill shall charge advance tax under sub-section (1) in the manner electricity consumption charges are charged.
Sub-Section (3): Tax collected under this section shall be adjustable against tax liability.
-
Pakistan emerges as ideal marked for investment
ISLAMABAD: Abdul Razak Dawood, Advisor to the Prime Minister on Commerce, Textile, Industries & Production on Sunday said that Pakistan has become a sought after destination for investment due to Government of Pakistan’s recently carved out investor friendly policies.
He was addressing at Pakistan – Qatar Trade and Investment Conference that was held in Qatar on March 10, 2019.
He also elaborated these policies of the government and lucrative incentives being provided to the foreign investors.
Highlighting the recent economic stability and progressive on-going economic activities in the wake of CPEC; he stated: “Pakistan has emerged as an ideal market for investment.”
Furthermore, he was of the view that improved security situation has also motivated foreign investors for their safe investments in Pakistan.
He stated that trade volume between Pakistan and Qatar can be enhanced through increased business engagements.
He encouraged Qatari investors to invest in Pakistan mainly in the areas related with real estate, hospitality, petro-chemical, food & agriculture etc.
Qatari Minister of Commerce and Industry Ali Bin Ahmed Al-Kuwari welcomed Pakistani delegates and told that there were approximately 1450 companies mutually owned by businessmen from both sides.
He further added that Qatari side is ready to invest in Pakistan and is open to provide a platform to the Pakistani investors to use their market for business both inside and outside Qatar.
He expressed his desire to further the relationship of both sides in trade and investment through regular business exchanges, trade expose and official engagements.
Haroon Sharif, Chairman, Board of Investment made a brief presentation highlighting the potential areas of investment in Pakistan.
He reiterated Prime Minister Imran Khan’s statement that it is the best time for investment in Pakistan and the opportunity shall not be missed.
Yousef Al-Jaidah, Chief Executive Officer of Qatar Financial Center shed light on the new emerging belt initiative which includes countries like Turkey, Kuwait, Iraq, Qatar, Oman, Malaysia and Pakistan.
He stated that this initiative will further enhance the trade and investment ties amongst these countries.
Pakistan Ambassador to the State of Qatar Syed Ahsan Raza Shah was also present on the occasion.
The conference was followed by business to business (B to B) meetings of the businessmen participating from both sides.
-
Late filers may be allowed for Active Taxpayers List
KARACHI: Federal Board of Revenue (FBR) may allow taxpayers who filed their returns after due date to have their names on Active Taxpayers List (ATL).
FBR sources said that the finance ministry had asked the revenue body to review the issue. The ministry of finance had received many representations on the issue.
The government through Finance Act, 2018 introduced Section 182A of Income Tax Ordinance, 2001 to restrict late filers of income tax to appear on ATL for tax year 2018.
The ATL for the tax year 2018 issued by the FBR on March 01, 2010 showed around 1.6 million return filers by due date for salaried class, business individuals and corporate entities i.e. December 15, 2018 and December 31, 2018.
The last ATL for tax year 2017 issued by the FBR had shown around 1.84 million active taxpayers on the list. This means the FBR has lost around 240,000 active taxpayers on the list.
Pakistan Tax Bar Association (PTBA), the apex tax bar of the country, urged the FBR to delete this section as this would result in discouraging potential taxpayers to become filers.
“It will be another disaster like the provision of Section 214D of the Ordinance, which created huge pendency of tax audt cases approximately 1.2 million and finaly the government created facility for the existing taxpayers by introducing Section 214E of the Ordinance for disposal / closure of such cases in the Finance Supplementary (Amendment) Act, 2018.”
Related Stories
PTBA calls for including late filers into Active Taxpayers List by deleting Section 182A -
Income Tax Ordinance 2001: advance tax on cash withdrawal
KARACHI: Every banking company is responsible for deducting and collecting a certain percentage of tax on cash withdrawal on Rs50,000 per day from an account.
Since passage of Finance Supplementary (Second Amendment) Bill, 2019 from the parliament, the tax is no more on withdrawal by a filer of income tax return.
Therefore, this tax is only be deducted on withdrawal by non-filer of income tax return at the rate of 0.6 percent on cash withdrawal of Rs50,000 per day.
The tax is deducted under Section 231 of Income Tax Ordinance, 2001.
Section 231A: Cash withdrawal from a bank.—Sub-Section (1): Every banking company shall deduct tax at the rate specified in Division VI of Part IV of the First Schedule, if the payment for cash withdrawal, or the sum total of the payments for cash withdrawal in a day, exceeds fifty thousand rupees.
“Explanation.- For removal of doubt, it is clarified that the said fifty thousand rupees shall be aggregate withdrawals from all the bank accounts in a single day.”
Section 231AA: Advance tax on transactions in bank
Sub-Section (1): Every banking company, non-banking financial institution, exchange company or any authorized dealer of foreign exchange shall collect advance tax at the time of sale against cash of any instrument, including Demand Draft, Pay Order, CDR, STDR, SDR, RTC, or any other instrument of bearer nature or on receipt of cash on cancellation of any of these instruments.
Sub-Section (2): Every banking company, non-banking financial institution, exchange company or any authorized dealer of foreign exchange shall collect advance tax at the time of transfer of any sum against cash through online transfer, telegraphic transfer, mail transfer or any other mode of electronic transfer.
Sub-Section (3): The advance tax under this section shall be collected at the rate specified in Division VIA of Part IV of the First Schedule, where the sum total of payments for transactions mentioned in sub-section (1) or sub-section (2) as the case may be, exceed twenty-five thousand rupees in a day.
-
New tax amnesty scheme to be considered: Asad Umar
Finance Minister Asad Umar announced on Saturday that the government is contemplating the implementation of a new tax amnesty scheme, driven by proposals received from the business community.
(more…) -
Rupee gains 20 paisas on foreign inflows
KARACHI: Pak Rupee gained 20 paisas against US dollar in open market on Saturday on reports of foreign inflows from friendly countries.
The buying and selling of dollar was recorded at Rs138.30/Rs138.80 from previous day’s closing of Rs138.50/Rs139.00 in cash free market.
Currency experts said that the signing of financing between State Bank of Pakistan (SBP) and Abu Dhabi Fund for Development (ADFD) for deposit of $2 billion helped the local currency to gain.
They further said that the local currency would strengthen during the next week owing to foreign inflows.
-
SBP signs $2bn deposit pact with ADFD
KARACHI: State Bank of Pakistan (SBP) has signed $2 billion deposit agreement with Abu Dhabi Fund for Development, a statement said on Saturday.
The agreement for the placement of the second tranche of US$ 2.0 billion by Abu Dhabi Fund for Development (ADFD) with the State Bank of Pakistan (SBP) has been signed between the SBP and the ADFD. These funds are expected to be received shortly by SBP.
It may be recalled that the first tranche of US$ 1.0 billion has already been received by SBP in January 2019.
-
Legislation to encourage tax non-compliance
KARACHI: All efforts of tax collecting agency in broadening of tax base will be in vain due to changes introduced to tax laws by the present government, which allows non-compliant taxpayers to make transactions.
The government through Finance Supplementary (Second Amendment) Bill, 2019, which was passed by the national assembly, allowed non-filers of income tax returns to purchase locally assembled motor vehicles of any engine capacity.
Though the decision was made to generate more revenue through high rate of withholding tax for non-filers but this would discourage compliant taxpayers.
Whereas through Finance Act, 2018 a Section 182A late filers of income tax returns have been deprived of appearing on the Active Taxpayers List (ATL), which is mandatory for availing reduced withholding tax rates applicable on various transactions for compliant taxpayers.
In a realistic approach if the government allowed late filers, who filed their returns after due date, to appear on the ATL then more people would file their returns in order to purchase motor vehicles as it has been done in the case of purchasing immovable properties.
Another change brought through Finance Supplementary (Second Amendment) Bill, 2019 was allowing commercial importers into Final Tax Regime (FTR).
It is surprising that business community belonging to industrial associations strongly proposed bringing commercial importers into the FTR from minimum tax regime, where tax rates are comparatively lower.
It is obvious that the commercial importers do not want to declare their transactions and want to stay remain out of audit proceedings.
The government has already allowed several concessions and exemptions to industrial sector, especially the export sector for importing raw material.
Allowing commercial importers an audit free regime when the country is facing challenges of money laundering will be problematic.
It is pertinent to mention here that associations of foreign investors and multinational companies do not want relaxation to commercial importers and termed it would be counterproductive for documentation of economy.
-
Weekly Review: market to stay range bound
KARACHI: The equity market to stay range bound during next week after end of results season and ease in tension between Pakistan and India.
(more…)