The Federal Board of Revenue (FBR) has taken a significant step towards enhancing tax transparency by releasing income tax return forms for Association of Persons (AOPs) for the tax year 2022.
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FBR issues salary return form for tax year 2022
The Federal Board of Revenue (FBR) has taken a significant step in facilitating tax compliance by issuing income tax return forms specifically tailored for salaried individuals for the tax year 2022.
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Tampering PSW data to attract 4-year jail sentence
KARACHI: About four years jail term has been prescribed for tempering data of Pakistan Single Window (PSW).
According to Finance Act, 2022 certain amendments have been made to Customs Act, 1969 to prescribed fine and penalty for attempting to tamper or making unauthorized entry to the online data of PSW.
According to the Finance Act, 2022:
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Offence: If any person makes or attempts to make unauthorized access to information, data or personal details of registered user of Pakistan Single Window system or systems connected or ancillary thereto;
Penalty: Imprisonment which may extend up to six months or with fine which may extend to one hundred thousand rupees or with both.
Offence: If any person makes or attempts to make unauthorized copy, transmission or cause to transmit any data, information or detail in relations to Pakistan Single Window system or systems connected or ancillary thereto;
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Penalty: Imprisonment which may extend upto six months or with fine which may extend to one hundred thousand rupees or with both.
Offence: If any person makes unauthorized interference, or attempt to interfere, damage or attempt to damage any part of whole of the Pakistan Single Window system or data or system connected to or ancillary thereto;
Penalty: Imprisonment which may extend to three years or fine which may extend to five hundred thousand rupees or with both.
Offence: If any person makes or attempts to make use of any information system, device or data to make any illegal claim or title or cause any person to part with property or to enter into any express or implied contract or intent to commit fraud by any input, alteration, deletion or suppression of data, resulting in unauthentic data with the intent that such data be considered or acted upon for legal purpose, as if it were authentic in relations to Pakistan Single Window system or Systems connected or ancillary thereto;
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Penalty: Imprisonment which may extend to four years or fine which may extend to one million rupees or with both.
Offence: If any person uses, makes, supplies, retains, obtains device, system or software for offences under section 13 of the Pakistan Single Window Act, 2021 (III of 2021);
Penalty: Imprisonment which may extend to six months or with fine which may extend to one hundred thousand rupees or with both.
Offence: If any person obtains, sells, process, uses or transmits another person’s Unique User Identifier or makes an attempt thereof without authorization;
Penalty: Imprisonment which may extend to four years and fine which may extend to one million rupees or with both.
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Offence: If any person tampers with or attempts to tamper with, alters, reprogrammes any Pakistan Single Window system or system connected or ancillary thereto for unauthorized use;
Penalty: Imprisonment which may extend to four years and fine which may extend up to one million rupees or with both and any devices or systems used in offence shall be liable to confiscation.
Offence: If any person writes, offers, makes available, distributes or transmits a malicious code or abets in the same, with intent to cause harm to Pakistan Single Window system or data resulting in or intending to result in corruption, destruction, alteration, suppression, theft or loss to the Pakistan Single Window system or data, or any attempt thereof.
Penalty: Imprisonment for a term which may extend to four years and fine which may extend to five million rupees or with both.
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Pakistan allows duty exemption on coal import from Afghanistan
ISLAMABAD: Pakistan has allowed exemption of customs duty on import of coal from Afghanistan.
The country’s apex revenue authority i.e. Federal Board of Revenue (FBR) issued SRO 968(I)/2022 to exempt customs duty on import of certain items, including coal from Afghanistan.
Earlier this week Prime Minister Muhammad Shehbaz Sharif approved the import of super-critical quality coal from Afghanistan in Pakistani rupee instead of dollars to help generate low-cost electricity in the country.
READ MORE: Govt. may exempt customs duty in emergency situation
The prime minister, chairing a meeting to improve the mechanism for transportation of Afghan coal, expressed concerns over the rising price of coal in the international market.
He said the rise in coal price was also one of the reasons behind the generation of expensive electricity by the coal power plants operating in the country.
He viewed that the import of Afghan coal in Pakistani currency would save the foreign exchange.
The prime minister was told that the import of Afghan coal – initially for Sahiwal and Hub power plants – would save around $2.2 billion annually.
READ MORE: Rate of customs duty in Pakistan on imports
The FBR allowed duty exemption on import of following goods: Description (Pakistan Customs Tariff)
Other Coal (2701.1900)
Bituminous coal (2701.1200)
Talc (2526.1010)
Marble (Crude or roughly trimmed) (2515.1100)
Plants & parts of plants (including seed & fruit) (1211.9000)
Seeds of cumin neither crushed nor grounded (0909.3100)
Sulphur of all kinds, other than sublimed sulphur (2503.0000)
Yams (Dioscorea spp.) (0714.3000)
Containers (including containers for the transport of fluids) (8609 0000)
The FBR said that the SRO would take effect from July 01, 2022.
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Pakistan opens return filing portal for tax year 2022
ISLAMABAD: Pakistan on Friday opened the income tax return filing portal for tax year 2022. The return filing portal will remained available till September 30, 2022, as three months are statutory time period for filing income tax return.
Salaried persons, business individuals, Association of Persons (AOPs) and Companies having special account year will file the income tax return during this period.
The Federal Board of Revenue (FBR) issued SRO 978(I)/2022 to notify finalized income tax return form for the tax year 2022.
Following are the categories of taxpayers who required to file income tax return for tax year 2022 under Income Tax Ordinance, 2001:
Section 14 of Income Tax Ordinance, 2001 has explained in detail about persons whom the annual return filing is mandatory. According to the Section:
READ MORE: Who needs to file Tax Year 2022 return in Pakistan?
114. Return of income. — (1) Subject to this Ordinance, the following persons are required to furnish a return of income for a tax year, namely:–
(a) every company;
(ab) every person (other than a company) whose taxable income for the year exceeds the maximum amount that is not chargeable to tax under this Ordinance for the year; or
(ac) any non-profit organization as defined in clause (36) of section 2;
(ae) every person whose income for the year is subject to final taxation under any provision of this Ordinance;
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(b) any person not covered by clause (a), (ab), (ac) or (ad) who,—
(i) has been charged to tax in respect of any of the two preceding tax years;
(ii) claims a loss carried forward under this Ordinance for a tax year;
(iii) owns immovable property with a land area of five hundred 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;
(iv) owns immoveable property with a land area of five hundred square yards or more located in a rating area;
(v) owns a flat having covered area of two thousand square feet or more located in a rating area;
(vi) owns a motor vehicle having engine capacity above 1000 CC;
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(vii) has obtained National Tax Number; or
(viii) is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees five hundred thousand;
(ix) is a resident person registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan; or
(x) is a resident person being an individual required to file foreign income and assets statement under section 116A.
(c) persons or classes of persons notified by the Board with the approval of the Minister in-charge.
(1A) Every individual whose income under the head ‘Income from business’ exceeds rupees three hundred thousand but does not exceed rupees four hundred thousand in a tax year is also required to furnish return of income from the tax year.
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SRB collects Rs153.5 billion tax in FY22
KARACHI: The Sindh Revenue Board (SRB) has collected Rs153.5 billion tax for the fiscal year 2021-22. The growth of collection stands at 20% from the last year’s collection of Rs128.1 billion.
SRB collected the excess amount of Rs3.5 billion as the assigned target was collection of Rs150 billion
READ MORE: SRB collects Rs132 billion as services tax in 11 months
The said amount comprises of Rs145.3 billion collected under the head of Sindh Sales Tax on Services whereas Rs8.2 billion under the Sindh Workers Welfare Fund / Sindh Workers Profit Participation Fund.
Thus, SRB exceeded the assigned target of Rs150 billion by Rs3.5 billion. Moreover, the growth over last year’s collection of Rs128.1 billion stands at 20%.
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The growth achieved by SRB is significant keeping in the view the fact that in the year 2021-22 no amnesty scheme was announced in order to establish a robust culture of tax compliance. Whereas in the past such schemes resulted in an additional revenue of approx. 2 to 3 billion.
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The Chairman Sindh Revenue Board appreciated the exemplary performance shown SRB employees, the cooperation extended by the taxpayers their representatives bodies and the unabated support of the Chief Minister and Government of Sindh.
READ MORE: SRB implements verification system for utility invoices
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LTO Karachi surpasses FY22 collection target
KARACHI: Large Taxpayers’ Office (LTO) Karachi surpasses the target of revenue collection of Rs.1,595 billion during the fiscal year 2021-2022.
The LTO, Karachi has collected Rs.146 billion excess amount, as it was assigned the target of Rs.1,449 billion for the fiscal year 2021-2022.
READ MORE: LTO Karachi collects Rs1.4 trillion July – May
The LTO Karachi has also surpassed the budgetary target fixed at Rs.170 billion during the month June 2022, by collecting a massive amount of Rs.196 billion in all taxes.
Large Taxpayers Office, Karachi has shown remarkable achievement by collecting Revenue at Rs.1,595 billion in all taxes during the period July 2021 – June 2022 as against Rs.1,124 billion collected previous year showing an overall growth of 42 percent vis-à-vis overall collection made during the same period last year.
READ MORE: LTO Karachi posts 41% collection growth in 10 months
Overall budget target assigned to LTO Karachi by the Federal Government for the period July 2021 to July 2022 was Rs.1,449 billion against which LTO Karachi has achieved Rs.1,595 billion which is Rs.146 billion in excess of the assigned target.
During the month of June 2022, Large Taxpayers Office, Karachi (Federal Board of Revenue) has also surpassed budgetary target fixed at Rs.170 billion by collecting gigantic Rs.196 billion (all taxes) against the target fixed by the Government.
READ MORE: LTO Karachi surpasses Rs1 trillion mark in 8MFY22
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FBR nears to achieve revenue collection target for 2021/2022
KARACHI: Pakistan’s apex tax agency has almost achieved the revenue collection target of Rs6.1 trillion for fiscal year 2021/2022.
According to FBR sources the revenue collection has crossed the ambitious mark of Rs6 trillion by midday of June 28, 2028. “The FBR needs another Rs100 billion to surpass the revised upward revenue collection target for the outgoing fiscal year,” a senior FBR official said.
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The actual revenue collection target for the FBR was Rs5.9 trillion. However, under the IMF program and excellent revenue collection performance throughout the year, the revenue collection target was revised upward to Rs6.1 trillion.
The sources said that the FBR is likely to surpass the collection target by today (June 28, 2022) evening as only Rs100 billion is left to achieve the target.
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The FBR has further two days i.e. June 29 and June 30 to finish the fiscal year 2021/2022.
According to the Rs6 trillion breakup of revenue collection made available, the FBR collected Rs2.21 billion as income tax; Rs2.77 trillion as sales tax; Rs320 billion as federal excise duty; Rs1.01 trillion as customs duty.
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The gross collection of the FBR till Midday of June 28m 2022 comes at Rs6.305 trillion. The revenue body granted an amount of Rs305 billion as refunds that makes the net revenue collection at Rs6 trillion.
The sources said that the FBR has achieved around 98.3 per cent of the target so far. The comparative numbers with the last fiscal year, the revenue collection targets in income tax, sales tax, federal excise duty and customs duty has been achieved as 98 per cent, 98 per cent, 95 per cent and 102 per cent, respectively.
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All tax proposals of IT sector accepted: FBR
ISLAMABAD: The Federal Board of Revenue (FBR) has said all pressing demands of IT sector have been accepted in the budget 2022/2023.
In a statement issued on Monday, the FBR has taken an exception to a statement issued by Pakistan Software Houses Association (P@SHA) dated June 25, 2022.
It has reported some facts regarding the exemptions/tax incentives / facilitation given to the IT and IT enabled export services through the Federal Budget 2022, tabled in the National Assembly on June 10, 2022.
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Clarifying its position, FBR has stated that in the wake of the Budget, some important meetings were held with the representatives of IT sector through Pakistan Software Export Board (PSEB) and also with Federal Minister for IT, Syed Amin-Ul-Haque, and his team. During these meetings, almost all the key demands of the IT Sector were thoroughly deliberated and largely agreed.
FBR has further clarified that the amended Finance Bill will incorporate some tangible measures to facilitate the exporters of IT and IT enabled services. Almost all the pressing demands of the IT Sector have been accepted. The same have been announced in the speech by the Federal Finance Minister on 24th June, 2022 on the floor of the National Assembly.
These include the following six key concessions:
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i) The sector has been provided a reduced tax rate of 0.25% on their export proceeds which is a quarter of the 1% export tax rate provided to all other exporters of goods.
ii) The sector has been removed from tax credit regime to simplify the tax filing system and to remove hassles of compliance that were earlier required to make them eligible for 100% tax credit to claim tax exemption.
iii) The requirements of filing of Withholding Tax Statements and Sales Tax return have been liberalized for the sector and only those who are required under the law will file WHT Statements or the Sales Tax Returns. For individuals having turnover up to Rs. 100 m per year there is no requirement to file WHT Statement or to deduct tax.
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iv) The definition of IT and IT enabled services as provided under the Income Tax Ordinance, 2001 has been liberalized by expanding its scope by making suitable amendments and all inclusive, and “not limited to” definition has been provided.
v) IT and IT enabled services exporters have been provided the facility of obtaining Sales Tax refund in respect of any Sales Tax that has been paid as their input on computers, laptops, stationary other items etc. This facility is not available under the Provincial Sales Tax Law.
vi) The demand of the IT Sector of reviving tax exemption for Venture Capital Fund has been accepted and a new provision has been created for providing Income Tax Exemption to the Venture Capital Fund for three years.
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It is pertinent to mention that the above exemptions and tax facilitations to boost exports of IT and IT enabled services were agreed and discussed in the meetings with the Federal Minister for IT, Syed Amin-Ul-Haque, and the representatives of the PSEB. It appears that the above statement given by P@SHA is on account of lack of information about the outcome of the decisions taken by the Honorable Finance Minister in that meeting and announced accordingly.
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Pakistan’s salaried class unhappy over new tax changes
ISLAMABAD: The salaried class in Pakistan is in shock over the recent changes announced by the government and revert its decision to exempt income of salaried persons up to Rs1.2 million.
The government on June 10, 2022 presented the federal budget 2022/2023 announced major tax relief for salaried class by enhancing threshold from Rs600,000 to Rs1.2 million. Besides, the government also proposed to reduce the number of income slabs.
Through the Finance Bill, 2022 the government on June 10, 2022 proposed the following rates of tax on salary income:
READ MORE: Pakistan reduces salary tax slabs to 7 in budget 2022/23
Salary income slabs and tax rates proposed through Finance Bill, 2022:
S# Taxable Income Rate of Tax (1) (2) (3) 1. Where taxable income does not exceed Rs. 600,000 0 2. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000 Rs. 100 3. Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,400,000 7% of the amount exceeding Rs. 1,200,000 4. Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,600,000 Rs. 84,000 + 12.5% of the amount exceeding Rs. 2,400,000 5. Where taxable income exceeds Rs. 3,600,000 but does not exceed Rs. 6,000,000 Rs. 234,000 + 17.5% of the amount exceeding Rs. 3,600,000 6. Where taxable income exceeds Rs. 6,000,000 but does not exceed Rs. 12,000,000 Rs. 654,000 + 22.5% of the amount exceeding Rs. 6,000,000 7. Where taxable income exceeds Rs. 12,000,000 Rs. 2,004,000 + 32.5% of the amount exceeding Rs. 12,000,000.” However, the government has taken a big U-turn and now proposed amendment to the Finance Bill, 2022 and decided to withdraw the exempt income threshold.
As per sources the government has proposed revision in salary tax rates for tax year 2023 effective from July 01, 2022. The following is the proposed rates for next tax year:
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01. Where taxable income tax does not exceed Rs600,000: the tax rate should be zero.
02. Where taxable income exceeds Rs600,000 but does not exceed Rs1,200,000: the tax rate should be 2.5 per cent of the amount exceeding Rs1,200,000.
03. Where taxable income exceed Rs1,200,000 but does not exceed Rs2,400,000: the tax rate should be Rs15,000 + 12.5 per cent of the amount exceeding Rs1,200,000.
04. Where taxable income exceeds Rs2,400,000 but does not exceed Rs3,600,000: The tax rate should be Rs165,000 + 20% of the amount exceeding Rs2,400,000.
05. Where taxable income exceeds Rs3,600,000 but does not exceed Rs6,000,000: the tax rate should be Rs405,000 + 25 per cent of the amount exceeding Rs3,600,000.
06. Where taxable income exceeds Rs6,000,000 but does not exceed Rs12,000,000: the tax rate should be Rs1,005,000 + 32.5 per cent of the amount exceeding Rs6,000,000.
07. Where taxable income exceeds Rs12,000,000: the tax rate should eb Rs2,955,000 + 35 per cent of the amount exceeding Rs12,000,000.
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The existing rate of income tax on the salary persons for tax year 2022 (July 01, 2021 – June 30, 2022) is as follow:
(2) Where the income of an individual chargeable under the head “salary” exceeds seventy-five per cent of his taxable income, the rates of tax to be applied shall be as set out in the following table, namely:—
1. Where taxable income does not exceed Rs. 600,000: 0%
2. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000: 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: 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: 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: 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: 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 exceeds Rs. 8,000,000: 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 exceeds Rs. 12,000,000: 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 exceeds Rs. 30,000,000: 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 exceeds Rs. 50,000,000: 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 exceeds Rs. 75,000,000: Rs. 13,295,000 plus 32.5% of the amount exceeding Rs. 50,000,000
12. Where taxable income exceeds Rs. 75,000,000 Rs. 21,420,000 plus 35% of the amount exceeding Rs. 75,000,000.
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