Category: Taxation

Stay updated on taxation news, tax laws, FBR policies, compliance, audits, income tax, sales tax, and fiscal developments in Pakistan.

Zeeshan Merchant elected KTBA president for second consecutive term

KARACHI: Muhammad Zeeshan Merchant has been elected as president of Karachi Tax Bar Association (KTBA) for the second consecutive time in the elections of the bar held on Thursday.

Merchant secured 401 votes for the slot of president. The other candidate Muhammad Imtiaz Zubairi could get only 141 votes.

It is pertinent to mention that it was the first time in the past 20 years that the KTBA members were casting their votes for all the slots.

Merchant has been elected as the president of the KTBA for the second consecutive term for the year 2021. He already served on the same portfolio for the year 2020.

He was contesting for the presidentship of the KTBA from the platform of United Panel. All the candidates of the United Panel have been elected with a big margin.

Muhammad Memood Bikiya has been elected vice president.

Syed Faiq Raza Rizvi, Shiraz Khan and Haris Tufail have been elected for the slot of honorary general secretary, librarian and honorary joint secretary, respectively.

The successful members of the executive committee are included: Asim Rizwani Sheikh, Abdul Wahab, Irfan Ghafoor, Muhammad Mustafa Rahim, Raeel Fatima, Syed Ejaz Ahmed Jafry, Saud ul Hasan and Atif Nawaz.

March 12, 2021
FBR criticized for restricting servicing of tax notices through electronic means

KARACHI: Karachi Tax Bar Association (KTBA) has criticized the tax authorities for restricting the service of tax notices to electronic means.
(more…)

March 11, 2021
100 percent income tax credit proposed for IT sector: FBR

Federal Board of Revenue (FBR) announced on Wednesday a proposal to expand the range of tax concessions for income derived from the export of software, IT services, and IT-enabled services.
(more…)

March 10, 2021
FBR processes first batch of automated income tax refund payment

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday processed first batch of income tax refund payment through automated system.

Member IR (Operations) inaugurated Centralized Income Tax Refund Office (CITRO) by processing the first batch of income tax refund claims for payment through dedicated VPN tunnel established between FBR and State Bank of Pakistan (SBP).

This is indeed another milestone achieved by the organization through incessant efforts of Member IR Operations and Member IT of FBR, a statement said.

This system would eliminate human interaction between tax authority and taxpayers as well as ensure quick relief to business community.

The FBR said that in line with the vision of the Prime Minister to provide maximum facilitation to the taxpayers and under the guidance of Chairman FBR, the CITRO has been established at FBR in order to facilitate taxpayers by releasing income tax refund payments directly into their bank accounts in an expeditious and transparent manner. This would work in an end-to-end automated manner.

FBR is in process of enhancing this automation process to the next level by creating linkages between all federal and provincial departments as well as large numbers of withholders so that verification and processing of refund claims can also be made in a machine-enabled environment.

March 10, 2021

FBR inducts 14 fresh chemical examiners in customs department

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday inducted 14 fresh chemical examiners (BS-16) in the Customs department.

The FBR said that consequent upon the recommendations of Federal Public Service Commission (FPSC), Islamabad vide letter No.F.4-140/2019-R(FS-I), dated 18.01.2021 and having accepted the terms and conditions of appointment contained in the offer of appointment letter No.1(44)/2018-Cus-III dated 25.01.2021, the following candidates are hereby appointed as Deputy Assistant Chemical Examiner (BS-16) in the Customs Department under the Federal Board of Revenue:-

Sr#	FPSC Roll #	Name of the Candidates	Place of posting
1	921	Muhammad Waqas Ahmad	Model Customs Collectorate of Appraisement & Facilitation-West, Karachi
2	79	Arif Ali	Model Customs Collectorate of Appraisement & Facilitation-West, Karachi
3	548	Hafiza Fatima Yasin	Model Customs Collectorate of Appraisement & Facilitation-West, Karachi
4	742	Sajjad Ali	Model Customs Collectorate of Appraisement & Facilitation-West, Karachi
5	490	Ali Qasim	Model Customs Collectorate of Appraisement & Facilitation-West, Karachi
6	1105	Shakeel Khan	Model Customs Collectorate of Appraisement & Facilitation-West, Karachi
7	586	Maham Naeem	Model Customs Collectorate of Appraisement & Facilitation-West, Karachi
8	965	Taimoor Tawseen	Model Customs Collectorate of Appraisement & Facilitation-West, Karachi
9	563	Husna Sarfraz	Model Customs Collectorate of Appraisement & Facilitation-East, Karachi
10	306	Sobia Noreen	Model Customs Collectorate of Appraisement & Facilitation-East, Karachi
11	1093	Rashid Menhas	Model Customs Collectorate of Exports (Port Muhammad Bin Qasim), Karachi
12	1151	Shah Khalid	Model Customs Collectorate of Exports (Port Muhammad Bin Qasim), Karachi
13	118	Ghulam Rasool	Model Customs Collectorate of Exports, Customs House, Karachi
14	927	Noman Saleem	Model Customs Collectorate of Exports, Customs House, Karachi

The FBR said that their seniority will be maintained in order of merit assigned by Federal Public Service Commission (FPSC) and in accordance with the Civil Servants (Seniority) Rules, 1993. Other terms and conditions of their service will be the same as already conveyed vide FBR letter dated January 25, 2021.

The officers have been advised to join the concerned Customs field formation mentioned against their names immediately but not later than March 26, 2021.

March 10, 2021

FBR asks taxpayers to update profile for avoiding penal action

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday asked taxpayers to update their profile by March 31, 2021 to avoid penal action.

The FBR said: “Statutory deadline for furnishing/updating of taxpayers’ profile under section 114A of the Income Tax Ordinance, 2001 is March 31, 2021. Please update your profile before the deadline in order to avoid penal consequences under the law.”

Updating profile by all the taxpayers registered under Section 181 of the Income Tax Ordinance, 2001 and other conditions specified by the Federal Board of Revenue (FBR) is a mandatory requirement under Section 114A of the Ordinance.

Through Finance Act, 2020, the Section 114A was introduced to make the updating profile mandatory for following persons:

(a) every person applying for registration under section 181;

(b) every person deriving income chargeable to tax under the head, “Income from business”;

(c) every person whose income is subject to final taxation;

(d) any non-profit organization as defined in clause (36) of section 2;

(e) any trust or welfare institution; or

(f) any other person prescribed by the Board.

The FBR explained the newly introduced section as: “Complexity of return forms is an embodiment of the complexity of tax law. Nevertheless, there is a dire need to simplify return forms without compromising on data required to verify accuracy of the declared version.”

The FBR said that instead of endeavoring to obtain all the relevant information in the income tax return, a new section has been added wherein taxpayers profile may be prescribed in order to capture data relevant to the taxpayer.

It said that persons who are already registered before September 30, 2020 and are deriving business or incomes subject to final taxation, trusts, welfare institutions, non-profit organizations and such other persons prescribed by the FBR are proposed to file a profile on or before December 31, 2020, which is not extended up to March 31, 2021.

Persons who obtain their registration after September 30, 2020 are proposed to furnish such profile within 90 days of registration. In case of any change in particulars of information, such persons shall update their profile within 90 days of the change in particulars. The profile contains information relevant to income regarding bank accounts, utility connections, business premises including all manufacturing, storage or retail outlets operated or leased by the taxpayer, types of businesses and such other information as may be prescribed by the FBR.

The FBR said that if a person fails to furnish or update a taxpayer’s profile within the due date or time period as extended by the FBR under Section214A, such person shall not be included in the active taxpayers list for the latest tax year ending prior to the aforesaid due date or extended date.

However, upon filing or updating the profile, such persons shall be allowed to be placed on the active taxpayers list upon payment of surcharge which is Rs20,000 in the case of a company, Rs10,000 in the case of an association of persons and Rs1,000 in the case of an individual.

Further, a penalty for non-filing or not updating of profile is also proposed at the rate of Rs2,500 for each day of default subject to minimum penalty of Rs10,000.

March 10, 2021
FBR adds 116,801 names to active taxpayers list

ISLAMABAD: Federal Board of Revenue (FBR) has added around 116,801 taxpayers to the updated Active Taxpayers List (ATL) for tax year 2020 issued on Monday.

The FBR updates the ATL on every Monday on a weekly basis. The revenue body issued new ATL for tax year 2020 on March 01, 2021. The recent list is the first update to the new ATL.

The total number of active taxpayers in the new ATL – 2020 issued a week was 2,178,463. The weekly updated ATL issued on March 08, 2021 is carrying names of around 2,295,264 active taxpayers.

The appearance of taxpayers’ name on the ATL guarantees exemption from withholding tax on various transactions and reduction of withholding tax rate.

The FBR includes names of only those taxpayers, who file their annual returns within due date or it was extended by commissioner appeals on the basis of request filed by the taxpayers.

However, late filers can also enlist their names on the ATL after payment of surcharge.

March 9, 2021
Mismanagement causes financial losses to traders

KARACHI: Karachi Customs Agents Association (KCAA) on Monday said that mismanagement by container terminal and shipping line caused non-clearance and huge financial losses to importers.

Karachi Customs Agents Association (KCAA) in a statement said that traders (Importers) are facing loss of millions of rupees due to non-clearance of 73 import consignments because of mismanagement of Pakistan International Containers Terminal Ltd and Shipping Company/Agent M/s. Sharaf Shipping Agency (Pvt) Ltd.

According to Import General Manifest (IGM) 90/2021, the vessel Segara Mas V-2100W had to berth at PICT on 24^th February 2021 but amazingly PICT by claiming non availability of space turned the vessel towards SAPT, whereas 73 GDs had already been filed by the traders and paid duties and taxes worth million of rupees accordingly.

Upon berthing at South Asia Pakistan Terminal Ltd (SAPT) another IGM 101/2021 was lodged by the shipping agent due to which 73 consignments have not been cleared yet. In this regard the General Secretary Mr. Mehmood ul Hasan Awan informed that the shipping company was well aware that 73 index of VIR 90/2021 has been claimed vide Goods Declaration filed by the traders & customs agents.

In these circumstances, the shipping company should discharge cargo / containers of 73 claimed Index at PICT and all other consignments should be discharged at SAPT if it was necessary. M/s. Sharaf Shipping Agency in collaboration with PICT deliberately shifted vessel to SAPT to get additional cost from the traders on account of demurrage and container detention charges.

The management of Pakistan International Containers also illegally keeps consignments outside its Bonded Area and do not provide facilities to examine the consignment to facilitate trade.

March 8, 2021
Taxpayers require to update profile by March 31 to avoid exclusion from ATL

ISLAMABAD: Taxpayers are required to update their profile by March 31, 2021 to avoid exclusion their names from Active Taxpayers List (ATL).

The last date for updating the profile was December 31, 2020. However, it was extended up to March 31, 2021.

Updating profile by all the taxpayers registered under Section 181 of the Income Tax Ordinance, 2001 and other conditions specified by the Federal Board of Revenue (FBR) is a mandatory requirement under Section 114A of the Ordinance.

Through Finance Act, 2020, the Section 114A was introduced to make the updating profile mandatory for following persons:

(a) every person applying for registration under section 181;

(b) every person deriving income chargeable to tax under the head, “Income from business”;

(c) every person whose income is subject to final taxation;

(d) any non-profit organization as defined in clause (36) of section 2;

(e) any trust or welfare institution; or

(f) any other person prescribed by the Board.

The FBR explained the newly introduced section as: “Complexity of return forms is an embodiment of the complexity of tax law. Nevertheless, there is a dire need to simplify return forms without compromising on data required to verify accuracy of the declared version.”

The FBR said that instead of endeavoring to obtain all the relevant information in the income tax return, a new section has been added wherein taxpayers profile may be prescribed in order to capture data relevant to the taxpayer.

It said that persons who are already registered before September 30, 2020 and are deriving business or incomes subject to final taxation, trusts, welfare institutions, non-profit organizations and such other persons prescribed by the FBR are proposed to file a profile on or before December 31, 2020, which is not extended up to March 31, 2021.

Persons who obtain their registration after September 30, 2020 are proposed to furnish such profile within 90 days of registration. In case of any change in particulars of information, such persons shall update their profile within 90 days of the change in particulars. The profile contains information relevant to income regarding bank accounts, utility connections, business premises including all manufacturing, storage or retail outlets operated or leased by the taxpayer, types of businesses and such other information as may be prescribed by the FBR.

The FBR said that if a person fails to furnish or update a taxpayer’s profile within the due date or time period as extended by the FBR under Section214A, such person shall not be included in the active taxpayers list for the latest tax year ending prior to the aforesaid due date or extended date.

However, upon filing or updating the profile, such persons shall be allowed to be placed on the active taxpayers list upon payment of surcharge which is Rs20,000 in the case of a company, Rs10,000 in the case of an association of persons and Rs1,000 in the case of an individual.

Further, a penalty for non-filing or not updating of profile is also proposed at the rate of Rs2,500 for each day of default subject to minimum penalty of Rs10,000.

March 7, 2021
KTBA recommends daily update of ATL file; banks not relying on online verification

KARACHI: Karachi Tax Bar Association (KTBA) has advised the Federal Board of Revenue (FBR) to update Active Taxpayers List (ATL) on daily basis instead weekly as banks were not relying on the online verification of the active taxpayers for purpose of withholding tax deduction.

The KTBA on Saturday said that many taxpayers are making payment of surcharge U/s.182A of the Income Tax Ordinance, 2001 (Ordinance) for inclusion of their names in the ATL and upon the payment the status of taxpayer is immediately updated in the ATL on the web portal.

However, the excel file available on the FBR web portal of is not being updated which is causing severe problems to the taxpayers as far as withdrawals from banks are concerned.

“The banks are not relying on the online verification available on the web portal of FBR,” the KTBA said.

The KTBA suggested that the excel file (lists) available on the web portal of FBR is updated on daily basis and the banks are also informed to rely on the online verification before withholding deducting the tax on banking transactions in order to facilitate the taxpayers.

The tax bar said that it had received many complaints that where manual extensions were filed/submitted and where no reply was received (whether granted or refused) and the returns were filed within the time applied for; the names of such taxpayers are also not appearing in the ATL though such cases are liable to be treated as filed within the time allowed.

The KTBA advised that where taxpayers have filed the manual extensions within time and where the returns have been filed within the time applied for, the names of such taxpayers should be included in the ATL and the ATL be updated immediately without payment of surcharge as prescribed U/s.182A of the Ordinance.

There are several instances where the taxpayers have opted rightly to file their returns, in time, manually (paper returns) as they were legally not bound to file their returns electronically, their names are also not appearing in the ATL for which we are being informed by our members continuously. We feel that the manual returns have not been digitized and such taxpayers are facing severe problems due to non-appearance of their names in the ATL.

The tax bar suggested that where taxpayers have rightly filed/submitted their returns manually (paper turns), the names of such taxpayers should be included in the ATL forthwith for their facilitation.

The KTBA also received complaints from members and have also noticed that there are instances where extension applications have been submitted via IRIS within time and the same are appearing in the outbox of IRIS unattended by the concerned Commissioners and the returns have also been filed within the time applied for but their names are not appearing in the ATL.

The tax bar said that there is no fault of the taxpayers who have filed the extensions in time that remains unattended and the returns have also been filed within the time applied for.

It suggested that where taxpayers have applied for extensions on IRIS in time, whose applications have remained unattended and the returns have been filed within the time, the names of such taxpayers should also be included in the ATL forthwith for their facilitation

March 6, 2021