The Federal Board of Revenue (FBR) has initiated the process for the upcoming fiscal year’s budget by inviting customs-related proposals for the financial year 2022/2023 from various stakeholders, including business chambers and associations.
(more…)Category: Budget
This is parent category of budgets presented by Pakistan government. Here you will find year-wise federal and provincial budgets.
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SRB invites proposals for Budget 2022-2023
KARACHI: Sindh Revenue Board (SRB) has invited proposals for budget 2022/2023 from stakeholders by January 21, 2022.
The SRB said it was in process of formulating budgetary proposals for provincial budget 2022-2023 in relation to taxation and procedural provisions of Sindh Sales Tax on Services Act, 2011, the Sindh Sales Tax on Services Rules, 2011, the Sindh Sales Tax Special Procedure (Withholding) Rules, 2014, the Sindh Sales Tax Special Procedure (Transport or Carriage of Petroleum Oil through Oil Tankers) Rules, 2018 and the Sindh Sales Tax Special Procedure (Services provided or rendered by cab aggregator and the services provided or rendered by the owners or drivers of the motor vehicles using the cab aggregator service) Rules, 2019 and the various notifications issued under the Act 2011.
READ MORE: Sindh Revenue Board announces tax incentive package
The SRB said that it was policy of the board to consult all chambers, associations, groups, stakeholders and taxpayers before finalizing the budget proposals.
“With this end in view, SRB requests all persons (including the chambers of commerce and industry, business councils, trade associations, tax bars, Institution of Chartered Accountants, Institute of Cost and Management Accountants, taxpayers, etc.) to send their written proposals latest by Friday, January 21, 2022.
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Finance Act, 2021: Taxpayers given three months to update business bank accounts
ISLAMABAD: Declaring business bank accounts has become mandatory from July 01, 2021 otherwise a monetary penalty would be imposed. However, taxpayers have been given to update their registration profile along with business bank accounts up to September 30, 2021.
According to the Finance Act, 2021 a new definition has been included in the Income Tax Ordinance, 2001 in which business bank account means a bank account utilized by the taxpayer for business transaction declared to the Commissioner through original or modified registration form prescribed under section 181.
A Section 114A has been inserted through the Finance Act, 2021 under which every taxpayer will require to declare to the Commissioner the bank account utilized by the taxpayer for business transactions.
Business bank account shall be declared through original or modified registration form prescribed under section 181.
The Finance Act 2021 further imposed monetary penalty for not declaring the business bank account. Where any person fails to declare business bank account(s), in his registration application or fails to amend his registration profile to declare existing business bank account(s) willfully: Such person shall pay a penalty of Rs. 10,000 for each day of default since the date of submission of application for registration or date of opening of undeclared business bank account whichever is later:
Provided that if penalty worked out as aforesaid is less than Rs.100,000 for each undeclared bank account, such person shall pay a penalty of Rs.100,000 for each undeclared business bank account:
Provided further that this provision shall be applicable from the first day of October, 2021 during which period the taxpayer may update their registration forms.
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Third-party to conduct audit of 15 million potential taxpayers: Shaukat Tarin
Finance Minister Shaukat Tarin announced on Tuesday that the government is set to launch Universal Self-Assessment, a third-party approach, for auditing 15 million potential taxpayers.
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National Assembly approves budget, finance bill 2021
ISLAMABAD: The National Assembly on Tuesday approved federal budget 2021-2022 and Finance Bill 2021.
After over a two-week long debate, the National Assembly on Tuesday passed the federal budget with a total outlay of Rs 8.487 trillion, with around 19 percent additional allocations as compared to last year’s Rs 7.137 trillion.
The Finance Bill 2021-22 was moved before the parliament by Finance Minister, Shaukat Tarin, which was passed with majority vote.
Some amendments in the bill proposed by the Members of National Assembly were accommodated by the house, whereas some others were rejected.
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National Assembly may pass Finance Bill 2021 on June 29
ISLAMABAD: The National Assembly will meet on Tuesday June 29, 2021 in which Shaukat Fayaz Ahmed Tarin, Minister for Finance and Revenue to move the Finance Bill 2021 with certain amendments for approval from the house.
A notification issued by the National Assembly Secretariat stated that the assembly will meet on Tuesday June 29, 2021 at 11:30AM.
Finance Minister Shaukat Tarin to move that a bill to give effect to the financial proposals of the federal government for the year beginning on the first day of July 2021 and to amend certain laws [The Finance Bill, 2021], be taken into consideration at once.
“Further, the finance minister to move that a bill to give effect to the financial proposals of the federal government for the year beginning on the first day of July, 2021 and to amend certain laws [The Finance Bill, 2021], be passed,” according to the notification.
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Tax officials given arrest powers on concealment above Rs200 million; changes made to Finance Bill 2021
ISLAMABAD: The government has reviewed the proposal related to power of tax officials to arrest persons under criminal proceedings for concealment of income.
The power to make arrest may be restricted to concealment of Rs200 million and above, sources in Federal Board of Revenue (FBR) said.
Through Finance Bill 2021, it is proposed to substitute the Section 203 which at present deals with procedure of appeal against the order of a Special Judge.
The Bill proposed to substitute section 203A which provides that an authorized officer may arrest a person as per the provisions of the Code of Criminal Procedure, 1898 on the basis of material evidence and he has a reason to believe that person has committed an offence of concealment of income or an offence warranting prosecution.
Further, where a person commits an offence, the Chief Commissioner with the prior approval of the Board either before or after the institution of any proceedings for recovery of tax, compound the offence if such person pays the tax due along with such default surcharge and penalty.
Accordingly, existing section 202 is proposed to be deleted from the statute.
If the person suspected of committing an offence or concealment is a company, every director or officer of that company whom the authorized officer has reason to believe that he is personally responsible for actions of the company contributing to offence or concealment of income or any offence, shall be liable to arrest.
Provided that any arrest shall not absolve the company from the liabilities of payment of tax, default surcharge and penalty.
The sources said that the after this proposal the business community strongly reacted and termed it immense discretionary powers to the tax authorities.
The government realizing the sensitivity of the situation made changes it its actual proposal and now the power of tax officials has be restricted in those cases where concealment is abve Rs200 million.
The government will present the Finance Bill 2021 after making certain changes before the Parliament for approval.
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FBR to confiscate goods without brand licensing
In a bid to enhance regulatory oversight and combat counterfeiting, the proposal to make brand licensing mandatory for manufacturers of specified goods has been put forward. In the event of non-compliance, the Federal Board of Revenue (FBR) is poised to be empowered with the authority to confiscate such items.
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Tax amendments made for income of salaried persons, individuals
KARACHI: The Finance Bill, 2021 has proposed certain amendments in Income Tax Ordinance, 2001 related to income of salaried persons and business individuals.
According to a presentation made at post budget 2021/2022 webinar of Karachi Tax Bar Association (KTBA) the major changes proposed through the Finance Bill 2021, are:
— Interest income above Rs5 million taxable at normal rates (previously Rs. 36 million); withholding @15 percent (previously 10 percent) for interest income below Rs. 500,000.
— Exemption for medical allowance / reimbursement withdrawn, which needs to be reconsidered.
— Interest income distributed by Provident Fund above Rs. 500,000 taxed @ 10 percent – conflict with 6th Schedule needs to be addressed.
— Rental income taxable at normal rate.
— No tax on transfer of assets via gift / inheritance etc. to non-resident relatives.
— Giftee allowed to claim FMV of gifted assets, after a holding period of 2 years.
— Individuals have been made a withholding agent for payment of commission (having turnover of Rs. 100 million).
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Final tax regime allowed for export of services
KARACHI: The Finance Bill 2021 has proposed a final tax regime for export of IT and IT enabled services.
According to commentary on budget 2021/2022 released by KPMG Taseer Hadi & Co. currently, tax deduction on foreign proceeds from export of goods are taxed at 1 percent which is considered as final tax.
The Finance Bill proposes similar taxation regime for following specified services:
—Export of IT and IT enabled services where tax credit under section 65F is not available;
—Services or technical services rendered outside Pakistan or exported from Pakistan;
—royalty, commission or fees derived by a resident company from a foreign enterprise in consideration for the use outside Pakistan of any patent, invention, model, design, secret process or formula or similar property right, or information concerning industrial, commercial or scientific knowledge, experience or skill made available or provided to such enterprise;
—construction contracts executed outside Pakistan; and
—other services rendered outside Pakistan as notified by the Board from time to time.
The tax deductible will be final tax subject to following conditions:
(i) Income tax return has been filed;
(ii) withholding tax statements for the relevant tax year have been filed;
(iii) sales tax returns under Federal or Provincial laws have been filed, if required under the law; and
(iv) no credit for foreign taxes paid shall be allowed.
The Bill also proposes an option for taxation under Normal Tax Regime which is to be exercised every year at the time of filing of income tax return.
The Bill proposes while explaining the nature and source of any amount, investment, money, valuable article, expenditure, referred to in section 111, a taxpayer takes into account any source of income under this section, he shall not be entitled to take credit of a sum that can be reasonably attributed to the business activity under this section.