The Sindh Revenue Board (SRB) has taken stringent action against a stock broker firm M/s. Reliance Securities Limited, suspending its sales tax registration due to a failure to fulfill tax payment obligations and non-compliance with filing monthly returns.
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FBR issues withholding tax rates for sale, purchase of immovable properties
KARACHI: Federal Board of Revenue (FBR) has notified withholding tax rate for active and non-active taxpayers at the time of sale and purchase of immovable properties as amended through Finance Act, 2019 and applicable from July 01, 2019.
The FBR said that every person registering, recording or attesting or transfer including local authorities, housing authorities, housing society cooperative society and registrar or properties shall collect withholding tax under Section 236C of Income Tax Ordinance, 2001 from seller of immovable
property at the time of registering, recording or attesting the transfer.The withholding tax rate shall be one percent of gross amount of the considering received in case of active taxpayer, who filed their income tax return within due date.
Persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the
Ordinance), i.e 2 percent of the gross amount of the consideration received.The tax shall be minimum tax if property is acquired and disposed off within the same tax year; Otherwise adjustable.
Advance tax, under this section, is not be collected if the immovable property is held for a period exceeding five25 years.
The FBR said that every person registering, recording or attesting or Transfer including local authorities, housing authorities, Housing Society, Co-operative Society and registrar or properties shall collect adjustable withholding tax from the purchaser of immovable properties at the time of registering, recording of immovable properties under Section 236K of Income Tax Ordinance, 2001.
Under Section 236K(1) the tax rate shall be one percent of the fair market value for active taxpayers.
Persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e 2 percent of the fair market value.
Advance Tax on payment of installment in respect of purchase of allotment of immovable property where transfer is to be effected after making payment of all installments Under Section 236K (3) the tax rate shall be one percent of the fair market value.
Persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e 2 percent of the fair market value.
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Withholding Tax Card: Non-ATL to pay up to 30pc tax on profit from bank deposits, saving schemes
ISLAMABAD: Federal Board of Revenue (FBR) has issued withholding tax card for tax year 2019/2020 effective from July 01, 2019 under which persons receiving profit from bank deposits or investment in national saving schemes shall pay up to 30 percent, if not on the Active Taxpayers List (ATL).
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Withholding Tax Card: Tax rates on salary income
KARACHI: Federal Board of Revenue (FBR) has issued withholding tax card for tax year 2019/2020 effective from July 01, 2019 under which every employer paying salary to employees above threshold income shall deduct withholding tax.
According to official documents made available to PkRevenue.com, the FBR said that every person responsible for paying salary to an employee shall deduct tax from the amount paid under Section 149 of Income Tax Ordinance, 2001.
As per Finance Act, 2019, the provisions of newly inserted 10th schedule of the Income Tax Ordinance, 2001 shall not apply on tax deducted under section 149. Under the Tenth Schedule the withholding tax so collected shall be increased by 100 percent in case of persons not appearing on the Active Taxpayers List (ATL).
As per Finance Act, 2019, the salary slabs as well as tax rates have been revised with effect from 01.07.2019. As such all withholding tax agents disbursing salary are required to implement the revised tax rates from the same date.
Following are the salary slabs and rates on annual salary income:
1. Where taxable income does not exceed Rs. 600,000: the tax rate shall be 0 percent
2. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000: the tax rate shall be 5% of the amount exceeding Rs. 600,000
3. Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 1,800,000: the tax rate shall be Rs. 30,000 plus 10% of the amount exceeding Rs. 1,200,000.
4. Where taxable income exceeds Rs. 1,800,000 but does not exceed Rs. 2,500,000: the tax rate shall be Rs. 90,000 plus 15% of the amount exceeding Rs. 1,800,000
5. Where taxable income exceeds Rs. 2,500,000 but does not exceed Rs. 3,500,000: the tax rate shall be Rs. 195,000 plus 17.5% of the amount exceeding Rs. 2,500,000
6. Where taxable income exceeds Rs. 3,500,000 but does not exceed Rs. 5,000,000: the tax rate shall be Rs. 370,000 plus 20% of the amount exceeding Rs. 3,500,000
7. Where taxable income exceeds Rs. 5,000,000 but does not exceed Rs. 8,000,000: the tax rate shall be Rs. 670,000 plus 22.5% of the amount exceeding Rs. 5,000,000
8. Where taxable income exceeds Rs. 8,000,000 but does not exceed Rs. 12,000,000: the tax rate shall be Rs.1,345,000 plus 25% of the amount exceeding Rs. 8,000,000
9. Where taxable income exceeds Rs. 12,000,000 but does not exceed Rs.30,000,000: the tax rate shall be Rs. 2,345,000 plus 27.5% of the amount exceeding Rs. 12,000,000
10. Where taxable income exceeds Rs. 30,000,000 but does not exceed Rs.50,000,000: the tax rate shall be Rs. 7,295,000 plus 30% of the amount exceeding Rs. 30,000,000
11. Where taxable income exceeds Rs. 50,000,000 but does not exceed Rs.75,000,000: the tax rate shall be Rs. 13,295,000 plus 32.5% of the amount exceeding Rs. 50,000,000
12. Where taxable income exceeds Rs.75,000,000: the tax rate shall be Rs. 21,420,000 plus 35% of the amount exceeding Rs 75,000,000″;
The FBR said that every person responsible for making payment for directorship fee or fee for attending board meeting or such fee by whatever name called under Section 149(3) of Income Tax Ordinance, 2001 shall collect 20 percent of gross amount paid.
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Withholding Tax Card: non-ATL persons to pay 30pc tax on dividend income
KARACHI: Federal Board of Revenue (FBR) has issued withholding tax card for tax year 2019/2020 effective from July 01, 2019 under which person not appearing on the Active Taxpayers List (ATL) shall pay up to 30 percent on dividend income.
According to documents made available to PkRevenue.com, the FBR said that every person paying dividend shall collect withholding tax under Section 150 of the Income Tax Ordinance, 2001 at the time the dividend is actually paid.
The following rates shall be applicable for tax year 2019/2020:
(a) In the case of dividend paid by Independent Power Purchasers (IPPs) whereas such dividend is a pass through item under an Implementation Agreement or Power Purchase Agreement or Energy Purchase Agreement and is required to be reimbursed by Central Power Purchasing Agency (CPPA-G) or its predecessor or successor entity:
The tax rate shall be 7.5 percent and in case persons not appearing in the ATL the applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 15 percent.
(b) In cases other than mentioned at (a) above the tax rate shall be 15 percent and if persons not appearing in the Active Taxpayers’ List the rate of tax required to be deducted/collected, as the case may be, is to be increased by 100 percent of the above (as specified in the First Schedule to the Income Tax Ordinance, 2001 (updated as per Finance Act, 2019), i.e. 30 percent.
The FBR further said that special purpose vehicle, company shall collect withholding tax under Section 150A of Income Tax Ordinance, 2001 from Sukuk holders on payment of gross amount of return on investment.
On Payment of return on investment in Sukuks:
a) In case the Sukuk- holder is a company, the tax rate shall be 15 percent and if persons not appearing in the Active Taxpayers’ List the applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 30 percent.
b) In case the Sukuk – holder is an individual or an association of person, if the return on investment is more than one million, the tax rate shall be 12.5 percent and if persons not appearing in the Active Taxpayers’ List then the applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 25 percent.
c) In case the Sukuk – holder is an individual and an association of person, if the return on investment is less than one million, the tax rate shall be 10 percent and if persons not appearing in the Active Taxpayers’ List then the applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 20 percent.
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Withholding Tax Card: Tax rates on imports of goods for ATL, non-ATL persons
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Withholding Tax Card: Tax rates on imports of goods for ATL, non-ATL persons
KARACHI: Federal Board of Revenue (FBR) has issued withholding tax rates on imports of goods for persons appearing on Active Taxpayers List (ATL) and for persons not on ATL under Section 148 of Income Tax Ordinance, 2001 for tax year 2019/2020 effective from July 01, 2019.
According to documents made available to PkRevenue.com the FBR said that the collector of customs shall collect the withholding tax rate at the prevailing rates from persons on the Active Taxpayers List (ATL) and double amount of tax from those persons, who are not on the ATL.
The FBR said that 1 percent of the import value increased by Custom duty, sales tax and federal excise duty shall be collected. And in case persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 2 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
Tax to be collected from every importer of goods on the value of goods.
1 (i) Industrial undertaking importing remeltable steel (PCT Heading 72.04) and directly reduced iron for its own use;
(ii) Persons importing potassic of Economic Coordination Committee of the Cabinet’s decision No. ECC-155/12/2004 dated the 9th December, 2004
(iii) Persons importing Urea;
(iv) Manufactures covered under Notification No. S.R.O 1125(I)/2011 dated the 31st December, 2011 and importing items covered under S.R.O 1125(I)/2011 dated 31st December, 2011.
(v) Persons importing Gold; and
(vi) Persons importing Cotton
(vii) Persons importing LNG.
Minimum Tax [Section 148(7)]
The tax required to be collected under this section shall be minimum tax on the income of importer arising from the imports subject to sub-section (1) of this section and this sub-section shall not apply [i.e Adjustable] in the case of Import of:a. Raw material, plant, equipment & parts by an industrial undertaking for its own use;
b. [motor vehicle] in CBU condition by manufacturer of motor vehicle].
c. Large import houses as defined / explained in 148(7)(d)
d. A foreign produced film imported for the purposes of screening and viewing]
The tax collected under this section at the time of import of ships by ship-breakers shall be minimum tax. [Section 148(8A)]
Industrial undertaking importing Plastic raw material (PCT Heading 39.01 to 39.12) for its own use, the tax rate shall be
1.75 percent of the import value as increased by Custom-duty, sales tax and federal excise duty
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 3.5 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
2. Persons importing pulses shall pay 2 percent of the import value as increased by Custom-duty, sales tax and federal excise duty.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 4 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
3. Commercial importers covered under Notification No. S.R.O 1125(I)/2011 dated the 31st December, 2011 and importing items covered under S.R.O 1125(I)/2011 dated the 31st December, 2011, shall pay 3 percent of the import value as increased by custom-duty sales tax and federal excise duty.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 6 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
Commercial Importer importing Plastic raw material (PCT Heading 39.01 to 39.12) for its own use shall pay 4.5 percent of the import value as increased by Custom-duty, sales tax and federal excise duty.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 9 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
4. Persons importing coal shall pay 4 percent.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 8 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
5. Persons importing finished pharmaceutical products that are not manufactured otherwise in Pakistan as certified by the Drug Regulatory of Pakistan, shall pay 4 percent.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 8 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
6. Ship breakers on import of ship shall pay 4.5 percent.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 9 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
7. Industrial undertakings not covered under S.No 1 to 6 shall pay 5.5 percent.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 11 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
8. Companies not covered under S. Nos. 1 to 7 shall pay 5.5 percent.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 11 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
9. Persons not covered Under S.Nos1 to 8 shall pay 6 percent.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 12 percent of the import value increased by Custom –duty, sales tax and federal excise duty.
On Import of Mobile Phones by any Person (individual, AOP, Company) :
C&F Value of Mobile Phone (in USD ($) ) Tax (in Rs)
1. Up to $30 the tax rate shall be Rs. 702. Exceeding $30 & up to $100 the tax rate shall be Rs. 730
3. Exceeding $100 & up to $200 the tax rate shall be Rs. 930
4.Exceeding $200 & up to $350 the tax rate shall be Rs. 970
5.Exceeding $350 & up to $500 the tax rate shall be Rs. 3,000
6.Exceeding $500 the tax rate shall be Rs. 5,200.
Persons not appearing in the Active Taxpayers’ List :
The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e.C&F Value of Mobile Phone (in USD ($) ) Tax (in Rs)
1. Up to $30 the tax rate shall be Rs. 140
2. Exceeding $30 & up to $100 the tax rate shall be Rs. 1,460
3. Exceeding $100 & up to $200 the tax rate shall be Rs. 1,860
4.Exceeding $200 & up to $350 the tax rate shall be Rs. 1,940
5.Exceeding $350 & up to $500 the tax rate shall be Rs. 6,000
6.Exceeding $500 the tax rate shall be Rs. 10,400.
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FBR probes concealment in land, immovable property purchases
ISLAMABAD: Federal Board of Revenue (FBR) has obtained data of land and immovable property transactions from provincial registrar offices and started proceedings against those who concealed the actual amount to purchase the assets.
FBR sources said that the data had been obtained on the basis of withholding tax deduction by the property registrars. The sources said that the FBR was probing the lower values declared by the purchasers against the fair market values.
The FBR is also probing those people who have such immovable properties where filing of income tax returns is mandatory.
As per Section 114 of Income Tax Ordinance, 2001 following persons are required to annual income tax returns:
— owns immovable property with a land area of two hundred and fifty square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;
— owns immovable property with a land area of five hundred square yards or more located in a rating area;
— owns a flat having covered area of two thousand square feet or more located in a rating area.
The sources said the FBR has been allowed to investigate transactions of past six years.
The sources said that the FBR through Finance Act, 2018 notified Directorate General of Immovable Property for determination of fair market values and authorized this directorate with immense powers.
The Directorate-General may, subject to the provisions and conditions as may be prescribed, initiate proceedings for the acquisition of property for the reasons to believe that any immovable property of a fair market value has been transferred by a person, hereinafter referred to as the transferor, to another person, hereinafter referred to as the transferee, for a consideration which is less than the fair market value of the immovable property and that the consideration for such transfer as agreed to between the transferor and transferee has been understated in the instrument of transfer for the purposes of ─
(a) the avoidance or reduction of withholding tax obligations under this Ordinance;
(b) concealment of unexplained amount referred to in sub- section (1) of section 111 representing investment in immovable property; or
(c) avoidance or reduction of capital gains tax under section 37.
The sources said that the FBR had extended the filing of income tax returns for tax year 2018 up to August 2, 2019 to facilitate persons to file their returns, especially in those cases where immovable properties had been purchased but not declared.
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Immovable property cannot be purchased without bank account: FBR
ISLAMABAD: Federal Board of Revenue (FBR) has barred purchase of immovable property by any persons making payment without banking channels.
FBR sources told PkRevenue.com that in this regard amendment had been made to Income Tax Ordinance, 2001 in this regard.
The sources said that amendment had been made to Income Tax Ordinance, 2001 which explained that immovable property valuing more than Rs5 million and other assets more than Rs1 million cannot be transferred without a bank accounts.
The new section introduced through Finance Act, 2019 is reproduced as under:
“75A. Purchase of assets through banking channel.
(1) Notwithstanding anything contained in any other law, for the time being in force, no person shall purchase—
(a) immovable property having fair market value greater than five million Rupees; or
(b) any other asset having fair market value more than one million Rupees, otherwise than by a crossed cheque drawn on a bank or through crossed demand draft or crossed pay order or any other crossed banking instrument showing transfer of amount from one bank account to another bank account.
(2) For the purposes of this section in case of immoveable property, fair market value means value notified by the Board under sub-section (4) of section 68 or value fixed by the provincial authority for the purposes of stamp duty, whichever is higher.
(3) In case the transaction is not undertaken in the manner specified in sub-section (1),—
(a) such asset shall not be eligible for any allowance under sections 22, 23, 24 and 25 of this Ordinance; and
(b) such amount shall not be treated as cost in terms of section 76 of this Ordinance for computation of any gain on sale of such asset.”
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FBR increases up to 28.34 percent retail value of CNG for sales tax collection
ISLAMABAD: Federal Board of Revenue (FBR) has enhanced the consumer value of CNG by 28.34 percent for collection of sales tax from July 01, 2019.
The FBR issued SRO 690(I)/2019 to notify the consumer value of CNG for the purpose of charging of sales tax from CNG stations by gas transmission and distribution companies.
The FBR increased the consumer value of CNG to Rs69.57 per kilogram for Region-I, which included Khyber Pakhtunkhwa, Baluchsitan and Potohar Region (Rawalpindi, Islamabad, and Gujar Khan. The increase in consumer value is around 7.36 percent for this region as compared with the previous rate of Rs64.80 per kilogram.
However, the FBR increased the consumer value of CNG by 28.34 percent for Region – II to Rs74.04 per kilogram from Rs57.69 per kilogram.
The Region – II is included: Sindh and Punjab excluding Potohar Region.
Large Taxpayers Unit (LTU) Karachi two years back presented a draft amendment, which stated:
“Notification in exercise of powers under subsection (8) of section 3 for value of supply of CNG to CNG consumers as per prevailing market price in the same way as it is being issued in case of sale of petroleum product every month.
“Board [FBR] may kindly issue the notification in exercise of powers under subsection (8) of section 3 for value of supply of CNG to CNG consumers as per prevailing market price in the same way as it is being issued in case of sale of petroleum products to avoid huge loss of monthly sales tax revenue.”
The LTU Karachi said that the Gas Transmission and Distribution Company charges sales tax from CNG stations @ 17 percent of the value of supply to the CNG consumers as notified by the Board from time to time in terms of section 3(8) of the Sales Tax Act, 1990.
Board accordingly vide its SRO No. 236(I)/2014 dated 31-03-2014, had notified the value of supply to the CNG consumers as the total value added cost of CNG as notified by the OGRA.
The latest notification issued by OGRA is dated 31.08.2015 which fixed the maximum CNG price as follows:
Region Value Added Cost GST @ 17%
Maximum CNG Sale Price
I 64.80 11.02 Rs. 75.82 II 57.69 9.81 Rs. 67.50 On 21-12-2016, OGRA deregulated the CNG sector in Pakistan, and directed the CNG station operators/associations to fix the rates themselves, as per market demand.
This caused in an instant increase in the rates of CNG which jumped from Rs. 67.50 per kg in the Southern Region to Rs.79 overnight.
However, the Gas distribution companies are charging sales tax on the previously issued notification of OGRA dated 31-08-2015.
As a result, the CNG stations are collecting sales tax on maximum CNG sales price at Rs79 per kg from the end consumers where as the Government is getting sales tax from the Gas distribution companies on maximum retail price at Rs67.50, incurring a loss of sales tax revenue of Rs1.67 per kg.
This loss of sales tax revenue of Rs.1.67 per kg is being collected from end consumers and pocketed by CNG stations.
CNG retail price per kg on which SSGC is collecting GST (Rs.) GST @ 17%(Rs) CNG prevailing market retail price (Rs) GST @ 17% (Rs) Loss in sales tax revenue per kg(Rs) 67.50 9.81 79.00 11.48 1.67 The per month loss to the government revenue comes to be Rs75 million only in the case of SSGCL as the average monthly sale of Gas to the CNG stations by SSGCL is 50 million kgs of gas.
Similarly the loss in case of SNGPL which caters more than three times of CNG stations is fairly high.
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FBR proposes phenomenal increase in valuation of Karachi immovable properties
ISLAMABAD: Federal Board of Revenue (FBR) has proposed to phenomenal increase in valuation for commercial and residential immovable properties in Karachi for the purpose of collection of income tax.
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