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Category: Taxation

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  • CGT on disposal of securities to be collected on Feb 10

    CGT on disposal of securities to be collected on Feb 10

    KARACHI: The collection of capital gain tax (CGT) on disposal of securities for the month of December 2021 will be made on February 10, 2022, a statement said on Tuesday.

    The National Clearing Company of Pakistan Limited (NCCPL) in a communication sent to Pakistan Stock Exchange (PSX) and the Pakistan Mercantile Exchange Limited (PMEX), said that the aggregate amount of CGT arising on disposal of shares at Pakistan Stock Exchange for the period December 01, 2021 to December 31, 2021, would be collected on Thursday February 10, 2022 through respective settling banks of the clearing members.

    READ MORE: NCCPL informs about amended CGT rates to investors

    All clearing members have been advised to ensure requisite amount in their respective settling bank’s account.

    Further, the aggregate amount of CGT arising on trading of future commodity contracts at Pakistan Mercantile Exchange for the period December 01, 2021 to December 31, 2021, would also be collected from the Pakistan Mercantile Exchange on Thursday February 10, 2022.

    Clearing Members and Pakistan Mercantile Exchange have been asked to verify the investor wise details of capital gain or loss and tax thereon, if any, through reports/downloads.

    “In case of none or partial collection of CGT, necessary action would be taken in accordance with the Rules and NCCPL Regulations,” it added.

    READ MORE: CGT rates on disposal of securities during Tax Year 2022

  • FBR posts 30% growth to collect Rs3.35 trillion

    FBR posts 30% growth to collect Rs3.35 trillion

    ISLAMABAD: The Federal Board of Revenue (FBR) has collected Rs3.35 trillion during the first seven months (July – January) 2021/2022 with a growth of over 30 per cent, a statement said on Monday.

    The FBR issued provisional numbers of collection made during first seven months of the current fiscal year. The revenue body collected Rs2.571 trillion in the corresponding months of the last fiscal year.

    READ MORE: FBR eyes Rs6 trillion collection in current fiscal year

    The seven months collection also surpassed the target of Rs3.09 trillion.

    The net collection for the month of January, 2022 realized Rs430 billion representing an increase of 17.2 per cent over Rs 367 billion collected in January, 2021. These figures would further improve before the close of the day and after book adjustments have been taken in to account.

    READ MORE: Annual sales tax collection from imports climbs up 27%

    On the other hand, the gross collections increased from Rs 2,705 billion during July, 2021 to January, 2022 to Rs 3,533 billion in current Financial Year July, 2021 to January, 2022, showing an increase of 30.6 per cent Likewise, the amount of refunds disbursed was Rs 182 billion during July, 2021 to January, 2022 compared to Rs 134 billion paid last year, showing an increase of 35.9 per cent.

    READ MORE: FBR identifies 1,284 retailers for POS integration

    It is pertinent to mention that FBR has introduced a number of innovative interventions both at policy and operational level with a view to maximize revenue potential through digitization, transparency, and taxpayers’ facilitation.

    This has not only resulted in ensuring the ease of doing business but also translated in a healthy and steady growth in revenue collection. Likewise, the incumbent top leadership of FBR has launched a new culture of clean taxation with a clear focus on collecting only the fair tax and not holding up refunds which are due to be paid. This has not only fast tracked the process of bridging the trust deficit between FBR and Taxpayers but also ensured the much needed cash liquidity for business community.

    READ MORE: FBR may issue special procedure under sales tax law

    That’s precisely why, for the first time ever in the country’s history, FBR continues to surpass its assigned revenue targets despite challenges and price stabilization measures adopted by the government.

  • FBR notifies transfers of BS-17-19 customs officers

    FBR notifies transfers of BS-17-19 customs officers

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday notified transfers and postings of officers of Pakistan Customs Service (PCS) in BS-17 to BS-19 with immediate effect until further orders.

    The FBR notified transfers and postings of following customs officers:

    READ MORE: FBR transfers BS-18 to BS-20 IRS officers

    01. Fahad Ali Chaudhry (PCS/BS-19) has been transferred and posted as SA to chief collector of Customs (North), Customs House, Islamabad from the post of additional director, directorate of internal audit – North (Customs), Islamabad.

    02. Sajid Khan (PCS/BS-17) has been transferred and posted as assistant collector, collectorate of customs enforcement, Dera Ismail Khan from the post of Assistant Collector, Collectorate of Customs, Appraisement, Peshawar.

    READ MORE: FBR transfers 36 Customs officers in BS-17 to BS-19

    03. Muhammad Bakht Jamshaid Baryar (PCS/BS-17) has been transferred and posted as assistant director, directorate of IPR Enforcement (South) Karachi from the post of assistant director, Directorate General of Risk Management, Karachi.

    04. Anees Ali Syed (PCS/BS-17) has been transferred and posted as Assistant Collector, Collectorate of Customs Enforcement, Dera Ismail Khan from the post of Assistant Director, Directorate of IPR Enforcement (South) Karachi.

    05. Salman Ahmed (PCS/BS-17) has been transferred and posted as Assistant Director, Directorate of Transit Trade (HQ), Karachi from the post of Assistant Collector, Collectorate of Customs Appraisement (West), Custom House, Karachi.

    READ MORE: FBR notifies transfers of IRS officers in BS-19-20

    06. Ms. Maryam Jamila (PCS/BS-17) has been transferred and posted as assistant collector, collectorate of customs enforcement, Multan from the post of Assistant Collector, Collectorate of Customs Sambrial, Sialkot.

    07. Shahzad Ali (PCS/BS-17) has been transferred and posted as Assistant Director, Directorate General of Risk Management, Karachi from the post of Assistant Collector, Collectorat of Customs Appraisement (East), Custom House, Karachi.

    08. Shahzad Akhtar Mahmood (PCS/BS-17) has been transferred and posted on promotion as Assistant Director, Directorate of IPR Enforcement (North) Islamabad from the post of superintendent, collectorate of customs enforcement, Lahore.

    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 places of posting.

    READ MORE: FBR announces transfers of senior tax auditors

  • SRB implements verification system for utility invoices

    SRB implements verification system for utility invoices

    KARACHI: The Sindh Revenue Board (SRB) has implemented online verification system for invoices issued by utility companies.

    The SRB in a communication issued on Monday stated that STRIVe (Sales Tax Real-time Invoice Verification) System has been implemented for Sindh Sales Tax return filing since July, 2019.

    READ MORE: KTBA identifies anomaly in SRB’s appellate system

    However, keeping in view taxpayers’ demand, the system was not made applicable to the invoices issued by utility companies such as electricity / gas distribution companies and telephone / telecom companies.

    Since, considerable time has elapsed and other tax administrations such as FBR and other provincial sales tax authorities have long ago implemented STRIVe for utility invoices, SRB has decided to discontinue the practice of allowing input tax adjustment against manual entry of utility invoices.

    READ MORE: SRB extends last date for payment, filing return

    Accordingly, it is intimated that starting from Sindh sales tax returns for the tax period February, 2022, to be filed in March 2022, the input tax against utility invoices (i.e. electricity, gas and phone / telecom services) shall only be allowed if the supplier / utility company has declared such supplies / services specifically in the name of Sindh registered person in the respective monthly tax returns submitted with Federal Board of Revenue.

    READ MORE: Dr. Wasif Memon appointed as SRB chairman

    It is added that the input tax deduction / adjustment, so availed, shall be subject to admissibility criteria as laid down in or under the Sindh Sales Tax on Services Act, 2011.

    READ MORE: SRB invites proposals for Budget 2022-2023

  • FBR implements new property valuations on February 01

    FBR implements new property valuations on February 01

    ISLAMABAD: The Federal Board of Revenue (FBR) will apply the new valuation tables for immovable properties in major cities of the country from February 01, 2022.

    The FBR on December 01, 2021 issued fresh and updated valuation tables for around 40 major cities of the country. However, the FBR deferred the implementation of the new valuations of immovable properties till January 15, 2022 and further deferred till January 31, 2022.

    The FBR on December 01, 2021 issued fresh and upward revised valuation tables for immovable properties located in 40 major cities of the country.

    READ MORE: FBR issues new, revised tables of property valuation

    The revenue body decision to defer the implementation came after several complaints received by the FBR those were pertaining to high valuation in the new tables.

    The complaints were lodged by stakeholders including real estate agents and town developers, who pointed out extraordinary rise in property rates in the latest valuation tables.

    The FBR issued detailed instructions to the tax offices on the procedure to be adopted to review the anomalies in the property rates and rationalize the same.

    Accordingly, it has been decided to review and revisit the notified valuation tables wherever overvaluation or undervaluation is pointed out by a stakeholder.

    READ MORE: FBR’s new, old valuation tables for Karachi properties

    The FBR asked all the Chief Commissioners Inland Revenue (CCIRs) to constitute Valuation Review Committees (VRCs), and notify them by December 10, 2021.

    Any stakeholder having any reservations about valuations may lodge a representation before VRC by December 15, 2021. Chief Commissioners will undertake consultative process with the stakeholders and engage SBP’s approved valuers for determination of values, which could be either more or less than the lately notified valuations.

    To issue the fresh and revised valuation tables, the FBR exercised its powers vested in the Income Tax Ordinance, 2001. The aim was to bring the FBR values at par with the fair market values.

    However, certain objections from stakeholders highlighted anomalies and aberrations in the newly notified valuation tables. Although, the notified valuations have been arrived at by FBR Field Formations through a rigorous consultative process and wherefore have largely been well-received, yet the possibility of error cannot be ruled out, and the same cannot be taken as carved in stone.

    The VRCs shall decide upon the representations by January 10, 2022, and forward the same to FBR for notification. All recommendations made by VRCs vis-à-vis revaluations shall be re-notified on January 15, 2022, which shall come into force on January 16, 2022. In the meantime, SRO No.1534-1572(I)/2021 dated 01.12.2021 are held in abeyance to allow registration of the in-process transactions.

  • FBR invites income tax proposals for budget 2022/2023

    FBR invites income tax proposals for budget 2022/2023

    The Federal Board of Revenue (FBR) has extended an invitation to stakeholders, including businesses, experts, and the general public, to contribute their insights and proposals for income tax improvements in preparation for the budget of 2022/2023.

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  • PTBA criticizes third-party audit of taxpayers

    PTBA criticizes third-party audit of taxpayers

    Pakistan Tax Bar Association (PTBA) has expressed concerns over decisions of the authorities to conduct audit of taxpayers through external auditors.

    In a statement, the apex tax bar of the country, expressed concerns over the decision taken by the Federal Board of Revenue (FBR) regarding the assignment of cases of Income Tax, Sales Tax and Federal Excise Duty to the third-party auditors for conducting audit of the taxpayers’ affairs.

    READ MORE: PTBA highlights taxation problem of NPOs, Trust

    The PTBA said that the cases of those taxpayers were selected for audit, who had filed the returns of income tax and sales tax voluntarily. “Conducting third party audit of such taxpayers will result to open doors of corruption.”

    Additional cost of which will have to be borne by the taxpayers, who are already on tax role and paying their taxes voluntarily.

    READ MORE: PTBA declares implementing digital payment not practical

    PTBA President Rana Munir Hussain in the statement said: “It will also increase the cost of doing business, which will lead to increase in inflation.”

    The FBR decision will also give a negative message to the general public that either the field formation of the FBR is not trustworthy or incompetent. “The FBR should also take lesson from its past decision/experience when the same idea was failed badly.”

    The decision for referring the audit to third parties will also be conflict of interest as most of the audit firms appearing on the panel of the FBR are also engaged in tax practice.

    READ MORE: Extend date for return filing till Dec 31, PTBA asks FBR

    “The FBR instead squeezing the taxpayers, who are already on the tax role, should focus on the recovery of due tax from 25 million persons who admittedly are earning millions of rupees but contributing nothing to national exchequer.”

    Further, the PTBA said that there was not need to promulgate the Finance Supplementary Act, 2022. “It will adversely affect the financial position of general public and increase the cost of living of common men, those are already suffering due to the pandemic and will further increase the inflation in the country.”

    READ MORE: FBR authorized to appoint special panels for tax audit

  • Monitoring of GLT plants must to plug tax evasion

    Monitoring of GLT plants must to plug tax evasion

    Experts believe that unchecked tobacco processing in green leaf threshing (GLT) plants is the root cause of massive tax evasion in tobacco sector.

    “At times when Pakistan is struggling to increase revenue, Government’s indifference towards tax evasion is incomprehensible,” according to an expert.

    Tobacco industry is one of the five industries which cause a loss of more than Rs310 billion annually to the national exchequer through tax evasion and illegal trade, yet the authorities are not serious enough to take stringent actions against tax theft.

    “The market share of illegal tax-evading tobacco companies has reached 40 per cent causing a loss of Rs80 billion annually and strict enforcement of national laws is needed to prevent damage to the national treasury from the illicit sale of cigarettes,” the expert added.

    Supervising the entire supply chain of the cigarette industry is a difficult task in which there is a possibility of corruption due to human intervention. This difficulty can be alleviated by monitoring the green leaf threshing phase of tobacco.

    The Federal Board of Revenue (FBR) provides legal authority for monitoring of green leaf threshing plants under SRO 1149 (I) 2018. However, over the last four years, this SRO has not yet been fully implemented to eliminate tax evasion from the cigarette industry.

    A report by the Federal Tax Ombudsman (FTO) pointed out that there is a significant difference between the tax record and the Pakistan Tobacco Board’s statistics.

    According to the FTO, the inspection by the Commissioner Inland Revenue, Regional Tax Office, Peshawar, proved that lack of effective monitoring of GLT plants caused a loss of Rs40 billion in taxes to the national exchequer during 2017-18 and 2018-2019.

    The FTO has recommended the FBR to implement real-time and verifiable issuance of invoices, blocking all types of post-seizure verifications or data fudging / forgery. The FTO has also recommended the FBR to immediate implementation of Rule 89 especially sub-rules (2) and (3) read SRO 1149 (1) dated 18th September 2018.

    According to the experts, the lack of supervision of threshing plants is the basis of tax evasion of billions of rupees annually by the cigarette industry in Pakistan. The non-implementation of SRO 1149 (I) 2018 despite the lapse of four years is serious negligence.

    The experts advised that supervising 10 green leaf threshing plants is easier than monitoring over 60 cigarette factories and more than 2 million retailers in Pakistan.

    The experts said that authorities should take a more systematic approach during 2022 with regards to track and trace system, to ensure tax evasion is converted into tax paid.

  • Regulatory duty on motor vehicles increased to 50%

    Regulatory duty on motor vehicles increased to 50%

    In a bid to curb the escalating import bill and foreign exchange outflow, the Federal Board of Revenue (FBR) unveiled a significant surge in regulatory duty on the import of new motor vehicles.

    (more…)
  • Services tax on forex companies under provincial ambit

    Services tax on forex companies under provincial ambit

    Islamabad, January 21, 2024 – The Federal Board of Revenue (FBR) issued a clarification in response to recent news reports, asserting that the tax collection on services provided by foreign exchange companies falls under the jurisdiction of provinces.

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