Pkrevenue.com

Category: Budget 2021-2022

  • Framing sales tax rules for e-commerce recommended

    Framing sales tax rules for e-commerce recommended

    KARACHI: Tax practitioners have suggested the Federal Board of Revenue (FBR) for framing rules to bring e-commerce under sales tax laws.

    The tax practitioners under the umbrella of Karachi Tax Bar Association (KTBA) discussed upcoming budget 2021/2022 and proposed a comprehensive rules for e-commerce under sales tax laws.

    It is discussed that e-commerce of goods as well as services has gained significant momentum particularly in post COVID era. Through digital platforms, large number of vendors/service providers from informal economy can reach customers without setting up proper business structure.

    It is difficult not only for the tax authorities to capture such activity but also for the compliant taxpayers who want to discharge their obligations under the tax laws.

    Therefore, it is suggested that relevant provisions be amended, and detailed rules be framed for ecommerce in line with global best practices core features of which are:

    — Digital platforms, due to their control on the transactions, should be held responsible for collection and payment of sales tax where the vendor is unregistered

    — Small vendors earning revenue below 5 Million be exempted from getting registration under the Act

    — Appropriate provision for exemption from withholding tax should also be introduced

  • FBR urged to prescribe time limit for audit conclusion

    FBR urged to prescribe time limit for audit conclusion

    The Karachi Tax Bar Association (KTBA) has called upon the Federal Board of Revenue (FBR) to institute a definitive time limit for concluding audit proceedings in sales tax cases.

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  • FBR deputes IR officers for budget preparation

    FBR deputes IR officers for budget preparation

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday assigned the services of following officers of Inland Revenue (IR) with Member (IR-Policy) with immediate effect and until further orders for ongoing Budget exercise and for preparation of Finance Bill, 2021-2022.

    Shabih-ul-Aijaz (IRS/BS-20) presently posted as Commissioner-IR (Audit-II), Large Taxpayers Office, Lahore.

    Taudeer Ahmad (IRS/BS-19) presently posted as Additional Commissioner-IS, Large Taxpayers Office, Islamabad.

    Munir Ahmed Chaudhry (IRS/BS-19) presently posted as Additional Commissioner-IR, Medium Taxpayers Office, Karachi.

    The officers are directed to report to Member (IR-Policy) on morning of 07.05.2021 for  preparation of presentation on budget proposals 2021-22 for the Honorable Minister for Finance and Revenue on 7th, 8th and 9th May, 2021.

  • ICAP presents proposals for budget 2021/2022

    ICAP presents proposals for budget 2021/2022

    ISLAMABAD: Institute of Chartered Accountants of Pakistan (ICAP) on Thursday presented proposals for budget 2021/2022 to Shaukat Tarin, minister for finance and revenue.

    ICAP Vice President Ashfaq Tola called on the Federal Minister for Finance and Revenue, Shaukat Tarin here at the Finance Division to present proposals on Model Federal Budget 2021-2022.

    SA PM on Revenue Dr Waqar Masood Khan and Ali Latif, Vice President ICAP were also present during the meeting.

    The Finance Minister welcomed the Vice President ICAP Ashfaq Tola and discussed the proposals by the ICAP team for the economic growth and development of the country.

    The Minister lauded the professional insight of the members of the ICAP and their valuable contribution.

    The Vice President ICAP briefed the Minister about the sector-wise Budget Proposals prepared by the Advisory Committee of the ICAP for the first time.

    The Model Budget Paper included recommendations for widening the tax net, increasing per capita income, managing the non-tax income, measures on domestic and foreign debt management and rationalizing the pension expenditure.

    The Vice President also appreciated the housing initiative of the federal government to boost economic activity and suggested ways & means to extend the outreach.

    The Finance Minister commended the efforts made by ICAP’s Advisory Committee in working out the Budget proposals and reiterated firm commitment for formulation of a growth-oriented budget by following a participatory approach.

    The underlying rationale is to take all stakeholders on board for evolving consensus and coming up with innovative ideas to overcome economic challenges. The VP ICAP felicitated the Finance Minister on assuming new responsibilities and extended invite to be a Chief Guest at ICAP webinars and also presented the Coffee Table Book on the occasion.

  • Withholding agents should be allowed filing separate statements for salary cases

    Withholding agents should be allowed filing separate statements for salary cases

    KARACHI: Tax practitioners have urged the Federal Board of Revenue (FBR) to allow withholding agents to file separate statements for salary and other than salary cases.

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  • WTO tariff heading proposed for sales tax on services

    WTO tariff heading proposed for sales tax on services

    KARACHI: Tax practitioners have urged the Federal Board of Revenue (FBR) to adopt tariff headings of World Trade Organizations (WTO) for effectively impose sales tax services.

    Tax practitioners under the umbrella of Karachi Tax Bar Association (KTBA) held a pre-budget 2021/2022 conference and discussed issues of sales tax on services.

    It is discussed that all the service sales tax laws contain their own list of taxable services, which are couched in such a way that there are many entries with overlapping scope which lead to interpretational issues.

    Further all the provincial laws envisage origin as well as destination principle for levying tax on service- double taxation Proposal.

    It is recommended that the government should co-ordinate to promulgate negative list approach and specify place of supply rules at earliest.

    It is suggested: “WTO tariff heading for services may also be adopted.”

    It is discussed that despite lapse over ten years, since promulgation of 18th Constitutional Amendment, disputes regarding jurisdiction and basis for levying the sales tax are still unresolved.

    A lot of unnecessary litigation on such issues has piled up.

    National Tax Council has been announced to resolve such issues, however, no tangible results till date.

    It is proposed that the governments should resolve jurisdictional disputes at earliest.

  • Tax fraud cases should be investigated through special directorate

    Tax fraud cases should be investigated through special directorate

    KARACHI: Tax practitioners have discussed sales tax matters at a pre-budget seminar and recommended that tax fraud cases should be investigation through a special directorate.

    Members of Karachi Tax Bar Associations (KTBA) in the pre-budget seminar discussed various issues pertaining to sales tax laws.

    They highlighted the issue where jurisdiction for audit and adjudication of cases involving tax fraud as well as routine audit and assessments lies with the same officer. Further, the two proceedings require different type of skill set and approach.

    It is also discussed that same officer is responsible for conducting audit and adjudication- KTBA also filed petition in SHC seeking segregation of same which still pending

    Lack of segregation, results in inefficiency and undue harassment of law compliant taxpayer, as officers invariably include allegation of tax fraud in almost every show cause notice, the members discussed.

    They proposed for the budget 2021/2022 that cases of tax fraud should be investigated and adjudicated by a Special Directorate to be set up for this purpose.

    Further, concerned officer exercising jurisdiction over a taxpayer, if has determined that taxpayer is involved in suspicious/criminal activity the case should be turned over to the Special Directorate.

    Function of conducting audit and assessment of tax/adjudication should also be separated

    Detailed framework / rules should be prescribed after consultation with all the stakeholders.

  • Corporate tax rate should be brought down to 25pc

    Corporate tax rate should be brought down to 25pc

    KARACHI – Tax practitioners gathered at a pre-budget seminar organized by the Karachi Tax Bar Association (KTBA) have urged the government to consider reducing the corporate tax rate to 25 percent in the upcoming budget for 2021/2022.

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  • FBR advised to use withholding statements for identifying new taxpayers

    FBR advised to use withholding statements for identifying new taxpayers

    KARACHI: Tax practitioners have advised the Federal Board of Revenue (FBR) to examine withholding statements and extract information of persons not paying taxes and not filing their annual returns.

    The members of Karachi Tax Bar Association (KTBA) in their pre-budget 2021/2022 seminar urged the FBR for mining of its database to identify new taxpayers & those not fully discharging their liabilities

    FBR should extract information from withholding statements, details of government supplies and maintain a database of above third party information, according to a presentation made by Haider Patel, former president, KTBA.

    He further suggested that relevant organizations, departments, institutions including utility companies, banks, NADRA and information obtained related to offshore transactions should submit prescribed information on quarterly basis to the FBR.

    The FBR has been further advised effective enforcement for compliance of filing of Return of Income under section 114 of Income Tax Ordinance, 2001.

  • FBR advised to simplify withholding tax regime on imports

    FBR advised to simplify withholding tax regime on imports

    KARACHI: Federal Board of Revenue (FBR) has been urged to simplify the withholding tax regime on imported goods under Section 148 of the Income Tax Ordinance, 2001.

    Overseas Investors Chamber of Commerce and Industry (OICCI) in its proposals for budget 2021/2022 urged to FBR to simplify the withholding taxes on goods at the import stage.

    It suggested that the criteria for obtaining exemption under Section 148 of the Income Tax Ordinance, 2001 should be based on discharge of advance tax liability as per section 147 of the Income Tax Ordinance, 2001 and clause 72B of the part 1 of the second schedule should be restored.

    Raw materials imported at the rate of 5.5 percent withholding tax should not be subject to minimum taxation. This anomaly should be clarified by FBR at the earliest.

    Procedure for application of reduced rate of 2 percent on import of raw material for own use which are not covered under Part II of Twelfth Schedule is highly cumbersome and should be simplified.

    Section 148 (1) of the Ordinance to amended via the following insertion:

    “Provided that the Commissioner shall issue exemption certificate/ certificate of non-deduction / collection of advance tax at source at import stage within fifteen days of filing of application to exempt entities upon verification:

    Provided further that the Commissioner shall be deemed to have issued the exemption certificate upon the expiry of fifteen days to the aforesaid company and the certificate shall be automatically processed and issued by Iris”.