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Category: Taxation

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  • Pakistan enhances income tax rates for banks

    Pakistan enhances income tax rates for banks

    ISLAMABAD: Pakistan has enhanced tax rates for banks through amendments introduced through Finance Act, 2022.

    In this regard the apex tax agency of the country, i.e. Federal Board of Revenue (FBR) on Thursday issued Income Tax Circular No. 15 of 2022/2023 to explain important amendments made to Income Tax Ordinance, 2001 through Finance Act, 2022.

    READ MORE: Declaring beneficial owner made mandatory for companies, AOPs

    The FBR said that tax rates for banking companies are enhanced as explained hereunder:

    The taxable income arising from additional income of banking companies earned from additional investment in Federal Government securities for tax year 2020 and 2021 was taxable at the rate of 37.5 per cent instead of rates provided in Division II of Part I of First Schedule of the Income Tax Ordinance, 2001.

    READ MORE: Pakistan reintroduces capital value tax on motor vehicles

    This provision was further amended through Finance Act, 2021, whereby income attributable to investment in the Federal Government securities of banking companies was made taxable on the basis of advances to deposit ratios at graduated tax rates of 40 per cent, 37.5 per cent and 35 per cent, if ratio was up to 40 per cent, 40-50 per cent and above 50 per cent respectively.

    The Finance Act, 2022 has introduced enhanced rates of tax on taxable income of banks attributable to investment in Federal Government securities.

    READ MORE: Customs duty exemption, concession granted

    The enhanced rates for tax year 2022 are 55 per cent, 49 per cent and 35 per cent if gross advances to deposit ratio was upto 40 per cent, 40-50 per cent or above 50 per cent respectively.

    For tax year 2023, and onwards tax rates will be 55 per cent, 49 per cent and 39 per cent if gross advances to deposit ratio is up to 40 per cent, 40 -50 per cent or above 50 per cent respectively.

    The changes have been incorporated by substituting sub-rule (6A) of rule 6C of Seventh Schedule to the Ordinance.

    READ MORE: Commodities’ illegal movement to be treated as smuggling

    The tax rate on income of banking companies has been enhanced to 39 per cent for tax year 2023 from current 35 per cent through amendment in Division II of Part I of First Schedule of the Ordinance.

    Additionally, the application of section 4B has been restricted up to tax year 2022 in case of banking companies.

  • Declaring beneficial owner made mandatory for companies, AOPs

    Declaring beneficial owner made mandatory for companies, AOPs

    ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday said that declaration of beneficial owner has been made mandatory for companies and Association of Persons (AOPs) under income tax laws.

    (more…)
  • Pakistan reintroduces capital value tax on motor vehicles

    Pakistan reintroduces capital value tax on motor vehicles

    KARACHI: The federal government of Pakistan has reinstated the Capital Value Tax (CVT) at a rate of one percent on the value of both locally manufactured and imported motor vehicles. This move marks the revival of a tax that was previously withdrawn in phases and ultimately abolished in 2020.

    (more…)
  • FBR to invite applications for 502 new posts in Inland Revenue

    FBR to invite applications for 502 new posts in Inland Revenue

    ISLAMABAD: The Federal Board of Revenue (FBR) has created 502 new posts in Inland Revenue filed formation and those will be filled through online applications, according to a notification issued on Tuesday.

    According to the notification the FBR would advertise for filling up 502 posts in BS-1 to 15 in seventeen (17) Inland Revenue field formations of FBR.

    READ MORE: FBR posts Ansari as Member Customs Operations

    As the applicants have to apply online through National Job Portal being maintained by National Information Technology Board (NITB.

    The FBR asked the NITB to complete necessary processes in their system for applying online by the candidates and convey their clearance to FBR, so that the Advertisement could be got published in the press by FBR, at the earliest.

    According to the general instructions the eligible candidates are advised to apply online through National Job Portal Link https://nip.gov.pk. No manual or hard copy of application will be accepted by any office. Candidates applying for more than one post should apply online for each post separately.

    READ MORE: Commodities’ illegal movement to be treated as smuggling

    Vacancies for BS-I to 5 shall ordinarily be filled on local basis in terms of Rule 16 of Civil Servants (Appointment, Promotion & Transfer) Rules, 1973, whereas vacancies for BS-6 to 15 shall be filled by appointment of persons domiciled in the respective province or region of each office strictly under Rule 15 of the aforesaid rules and instructions issued by the Establishment Division from time to time.

    Candidates will be required to bring original documents (Educational, domicile and Experience Certificate etc) alongwith one set of all attested copies of documents at the time of test/interview.

    Screening tests and skills tests (where required) will be conducted as per recruitment policy of the Federal Government. Besides screening test for the post of Sepoy, physical fitness i.e. height and chest of the candidates at the requisite standard, shall also be mandatory.

    READ MORE: Special tax regime for pharma sector introduced

    The contract employees (85-1 to 15), who were appointed under the Family Assistance Package for the families of Government employees, who died while in service, may also apply online for any of the above post, if they desire so, subject to their eligibility.

    10% quota for women, 5% quota for minorities (non-Muslims) and 2% quota for disabled persons shall also be strictly observed by each office as per Government instructions. Disabled persons will have to submit a Certificate as proof of disability, duly issued by recognized Social Welfare Board/office or other authorized Government organization, at the time of test/interview.

    The FBR reserves the right not to fill any vacancy or to reduce the number of vacancies, if the circumstances so warranted at the time of final selection.

    READ MORE: Defacing sales tax invoice declared as offence

    The candidates working in Public Sector Departments/Organizations shall have to submit Departmental Permission Certificates from the respective employers at the time of test/interview, failing which they will not be allowed to participate in test/interview process.

    In addition to 05 years general upper age relaxation by the Government, further upper age relaxation shall be restricted up to the following categories of candidates, as per relevant rules/policy of the Federal Government.

    Minimum and Maximum age shall be calculated on the closing date of receipt of applications.

    Information provided in the online Application Form will be verified. In case of any false or forged information, FBR reserves the right to cancel candidature of any candidate at any stage (even after employment, if so revealed later) and to initiate legal action against the applicant.

    Only short-listed candidates will be called for test/ interview. All the candidates will be allowed to appear in the test/interview on provisional basis, subject to detailed scrutiny of their eligibility as per relevant criteria.

    No TA/ DA will be admissible for the Test/ Interview.

    The candidates may apply online within 15 days from the date of publication of this Advertisement in the press. Applications received after 15 days of publication of Advertisement will not be entertained.

  • FBR posts Ansari as Member Customs Operations

    FBR posts Ansari as Member Customs Operations

    The Federal Board of Revenue (FBR) has undertaken a reshuffle in the senior echelons of the Pakistan Customs Service (PCS), announcing the transfer and posting of officers in the BS-21 cadre with immediate effect until further orders.

    (more…)
  • FBR imposes major penalty on Customs appraising officer

    FBR imposes major penalty on Customs appraising officer

    ISLAMABAD: The Federal Board of Revenue (FBR) has imposed major penalty of ‘compulsory retirement from service’ upon a customs appraising officer on the charges of misconduct and inefficiency.

    According to a notification issued on Monday, the FBR said that disciplinary proceedings under Government Servants (Efficiency & Discipline) Rules, 1973 were initiated against Nihal Kazim, Appraising Officer (BS-16), Collectorate of Customs Appraisement (West), Karachi through a charge sheet issued on October 29, 2019.

    READ MORE: Tariq Ghani posted as Director Intelligence IR Karachi

    Ms. Rabel Khokhar, Assistant Collector, the then Collectorate of Customs Appraisement, Customs House, Karachi was appointed as Inquiry Officer to conduct inquiry on account of various acts of omission and commission committed by the accused officer constituting “Inefficiency” and “Misconduct”.

    The Inquiry Officer submitted Inquiry Report dated January 29, 2020, according to which the charges of “Inefficiency” and “Misconduct” were established against the accused officer.

    A Show Cause Notice dated July 17, 2020 was issued to the accused officer and in response, he submitted his defence reply and also appeared for personal hearing before the Collector/Authorized Officer on August 11, 2020.

    READ MORE: FBR transfers BS-19, BS-20 Customs officers

    After considering the inquiry report, reply of the accused to the Show Cause Notice and his oral submissions during the personal hearing with the Authorized Officer, the accused officer has been found guilty of “Inefficiency” and “Misconduct”.

    The Authorized Officer/ Collector recommended imposition of major penalty upon the accused. The Member (Admn/HR) / Authority before deciding the case afforded an opportunity of personal hearing to the accused on zoom/ telephone phone due to his illness on June 23, 2022.

    The Member (Admn), FBR being “Authority” in this case, after having carefully considered case record, inquiry report, verbal submissions of the accused during hearing and recommendations of the Authorized Officer/ Collector has found no solid evidence and merits in the stance of the accused for his prolonged un-authorized absence from duty for three years.

    READ MORE: Senior Customs officers transferred from Multan

    Accordingly, the Member (Admn/ HR) / Authority has observed that the charges of “Inefficiency” and “misconduct” under Rule-3(a)&(b) of Civil Servants (E&D) Rules, 1973 stand established against the accused.

    The Authority has, therefore, imposed major penalty of “Compulsory Retirement from Service” upon Nihal Kazim, Appraising Officer (BS-16), Collectorate of Customs Appraisement (West), Karachi under Rule 4(1)(b)(ii) of the Civil Servants (E&D) Rules, 1973. Moreover, his period of absence from duty i.e. November 20, 2016 till date is treated as Extra Ordinary Leave (EOL) and the excess amount drawn as pay and allowances is to be recovered from pensionary benefits.

    READ MORE: FBR transfers additional collectors, directors of Customs

    He will have a right to file appeal against this Order to the Appellate Authority under Civil Servants (Appeals) Rules, 1977 within a period of 30 days from the date of communication of this Notification.

  • SBR extends date for e-filing tax return

    SBR extends date for e-filing tax return

    KARACHI: The Sindh Revenue Board (SRB) has extended the date for e-filing (electronic filing) of sales tax return and payment of sales tax on services for the month of June 2022.

    The provincial revenue authority on Monday issued a circular for extension in the last date for e-deposit of Sindh Sales Tax for the tax period June 2022 and for e-filing of tax return for the tax period June 2022.

    READ MORE: SRB collects Rs153.5 billion tax in FY22

    According the circular, the SRB permitted the registered persons, including the withholding agents covered by the provisions of the Sindh Sales Tax Procedure (Withholding) Rules, 2014, to:

    READ MORE: SRB collects Rs132 billion as services tax in 11 months

    i. e-deposit the amounts of Sindh Sales Tax for the tax period June 2022 on or before Thursday July 21, 2022;

    ii. e-file their returns for the tax period June 2022 on or before Monday July 25, 2022.

    Sources said that the SRB extended the date for making payment of sales tax on services and for filing return in order to facilitate the taxpayers.

    READ MORE: Sindh integrates 56 restaurants for online tax monitoring

    They said that stakeholders approached the SRB for giving reasonable time to make compliance the mandatory requirement.

    The stakeholders were of the view that due to long holidays on account of Eid ul Adha, very few days were left to comply with the statutory requirement.

    It is important to note that the government had announced holidays from July 8, 2022 to July 12, 2022 on account of Eid ul Adha.

    READ MORE: Tax officials barred from direct freezing bank accounts

  • Customs duty exemption, concession granted

    Customs duty exemption, concession granted

    KARACHI: The Finance Act, 2022 has amended provisions of Customs Act, 1969 to grant exemption and concessions from customs duty.

    Following are the exemptions and concessions of customs duty:

    Exemption of Customs Duty and Additional Customs Duty

    READ MORE: Commodities’ illegal movement to be treated as smuggling

    Customs Duty (CD) leviable on the import of following categories of items / sectors is exempted for incentivizing the respective sectors:

    – Machinery and capital goods for mechanization of farming including machinery pertaining to irrigation, drainage, harvesting, plant protection etc.

    – Specified raw materials used for manufacturing of LED lights, LED bulbs (including parts thereof) and brush ware.

    – 26 Active Pharmaceutical Ingredients for incentivizing Pharmaceutical manufacturers.

    – Raw materials for manufacture of first aid bandages.

    READ MORE: Special tax regime for pharma sector introduced

    – Membranes for filtering / purifying water.

    – The drug ‘Grafalon’ and gadget ‘Irisvision’.

    – Raw materials of Ivy leaves extract powders.

    – Motor spirit.

    – Cinematographic equipment imported during the period commencing on the 1st July, 2018 and ending on the 30th June, 2023.

    – Bullet proof vehicles and jammers imported by Federal Government, Provincial Government or such states and territories as are or may be included in Pakistan.

    READ MORE: Defacing sales tax invoice declared as offence

    – Smartphones including those in CKD/SKD condition (subject to certain conditions prescribed for import of CKD/SKD units).

    In addition to CD, Additional Customs Duty (ACD) is also exempted on import of the following goods:

    – Raw materials imported by paper sizing industry and chlorinated paraffin wax industry and manufacturers of aluminum conductor composite cores.

    – Stamping foils for manufacturing of optic fiber cables.

    – Aluminum paste and powder imported by the Coating industry.

    – Guts, bladders and stomachs of animals.

    Reduction in Customs Duty and Additional Customs Duty

    CD leviable on import of following goods is reduced:

    – Specified categories of other woven fabrics and artificial flowers / foliage of other materials imported by manufacturers of footwear.

    READ MORE: FBR to collect 3% further tax on supply to inactive taxpayer

    – High-density fiber (HDF) boards of wood or other ligneous materials

    – Specified fibers of polypropylene.

    – Through the Finance Bill, CD was proposed to be reduced on 10 categories of direct and reactive dyes. Such reduction in CD has now been restricted to 6 categories through the Act.

    In addition to CD, ACD, leviable on import of following goods is also reduced:

    – Direct and reactive dyes.

    – Glycerol crude and Glycerol for the coating industry.

    – Goods pertaining to Aluminum, polymers of ethylene, Biaxially Oriented Polypropylene (BOPP) used by the packing industry.

    – Adhesive, Epoxide resins, Filter media/ paper, Non-woven fabric media and Steel plates / sheets of prime quality imported by manufacturers of filters, other than automotive.

    – Organic composite solvents and thinners imported by manufacturers of Dibutyl Orthophthalates.

    – Plywood, veneered panels & similar laminated wood, poly (methyl methacrylate) and cyanoacrylate.

    – Flavoring powders for food preparation for snacks manufacturers.

  • Commodities’ illegal movement to be treated as smuggling

    Commodities’ illegal movement to be treated as smuggling

    In a move to tighten control over the illegal movement of essential commodities, the Finance Act, 2022, has expanded the definition of smuggling.

    (more…)
  • Tariq Ghani posted as Director Intelligence IR Karachi

    Tariq Ghani posted as Director Intelligence IR Karachi

    ISLAMABAD: The Federal Board of Revenue (FBR) on Friday transferred and posted Tariq Ghani, a BS-20 officer of Inland Revenue Service (IRS) as Director, Directorate General of Intelligence and Investigation, IR, Karachi with immediate effect.

    Through a notification, the FBR transferred and posted following officers of IRS from BS-17 to BS-20:

    READ MORE: FBR transfers BS-19, BS-20 Customs officers

    01. Asem Iftikhar (Inland Revenue Service/BS-20) has been transferred and posted as Director, (HQ) Directorate General of Intelligence and Investigation (Inland Revenue), Islamabad from the post of Director General (OPS), Directorate General of Digital Invoicing and Analysis, Islamabad. The officer has been also assigned the additional charge of the post of Director, Intelligence and Investigation (IR), Islamabad and Director (Regulation), DNFBPs, Islamabad, as per rules.

    02. Abdul Rehman Bullo (Inland Revenue Service/BS-20) has been transferred and posted as Director, Directorate of Intelligence & Investigation (Inland Revenue), Hyderabad from the post of Director, Director of Intelligence and Investigation (IR), Karachi.

    READ MORE: Senior Customs officers transferred from Multan

    03. Dr. Tariq Ghani (Inland Revenue Service/BS-20) has been transferred and posted as Director, Directorate of Intelligence & Investigation (Inland Revenue), Karachi from the post of Commissioner, Audit-III Medium Taxpayers office, Karachi. The officer has also been assigned the additional charge of the post of Director (Regulations), DNFBPs, Karachi as per rules.

    04. Behzad Anwar (Inland Revenue Service/BS-20) has been posted as Director, Directorate of Intelligence and Investigation (Inland Revenue), Lahore on return from leave.

    READ MORE: Islamabad Customs chief transferred ahead budget

    05. Ms. Rabia Yaseer Durrani (Inland Revenue Service/BS-19) has been transferred and posted as Additional Director, Directorate General of Intelligence and Investigation (Inland Revenue), Islamabad from the post of Additional Commissioner, Large Taxpayers Office, Islamabad.

    06. Muhammad Fiaz Hussain (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Commissioner Inland Revenue, Corporate Tax Office, Islamabad from the post of Deputy Director, Directorate General of Intelligence and Investigation (Inland Revenue), Islamabad

    07. Ms. Muntaha Saleem (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Director, Directorate General of Intelligence and Investigation (Inland Revenue), Islamabad from the post of Deputy Commissioner, Corporate Tax Office, Islamabad.

    READ MORE: FBR transfers additional collectors, directors of Customs

    08. Sajid Ali (Inland Revenue Service/BS-17) has been transferred and posted as Assistant Director, Directorate General of Intelligence and Investigation (Inland Revenue), Islamabad from the post of Assistant Commissioner, AEOI Zone, Islamabad.

    The FBR said that the officers who are drawing performance allowance prior to issuance of this notification shall continue to draw this allowance on the new place of posting.

    The above named officers have been asked to send charge Relinquishment/Assumption to FBR immediately after Relinquishment/Assumption of charge for record and further necessary action.