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Category: Taxation

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  • Pakistan improves ranking by 31 positions in ease of trading across border index: FBR

    Pakistan improves ranking by 31 positions in ease of trading across border index: FBR

    ISLAMABAD: Pakistan has improved its ranking by 31 positions (from 142nd to 111th) on the rank of trading across border index, according to a statement issued by the Federal Board of Revenue (FBR) on Tuesday.

    The FBR made trading across borders easier by focusing three crucial areas: enhancing the integration of various agencies in the Web-Based One Customs (WEBOC) electronic system; reducing the number of documents required for import / export clearances; enhancing capacities of Pakistan Customs officials for playing pro-active role in smoothly regulating border trade.   

    Climbing up the ladder in Trading Across Border Index has enabled Pakistan in jumping up 28 places – from 136th to 108th – in World Bank’s (WB)’s ‘Ease of Doing Business 2020’ and securing a place among the top 10 countries have done the most in the corresponding / past year to improve the ease of doing business in their countries.

    This milestone has led Pakistan to be the sixth global reformer and first in South Asia that has brought ease in doing business for the national / international trade.

    It is important to note that border facilitation is amongst the top priority areas as per the comprehensive policy laid down by the Government. Concerted efforts by Pakistan Customs, under FBR, led to impressive performance in terms of compliance to the provisions of World Trade Organization (WTO)’s Trade Facilitation Agreement; hence, complementing Pakistan’s rise in Trading Across Border Index. 

    Pakistan Customs has pursued implementation of effective customs controls so that compliant trade is thoroughly facilitated, while lesser / non-compliant trade is diverted to detailed scrutiny. This strategy worked well, as conceived by Pakistan Customs, and has gone a long way in reducing the dwell time (at the borders / ports) for imports / exports in Pakistan by increasing the percentage of clearances through Green Channel.

    For instance, the time required for documentary compliance to effect exports has been reduced from 55 hours to 24 hours, and the time required for overall border compliance to effect exports has also been reduced from 75 hours to 24 hours.

     Similarly, the time required for documentary compliance to effect imports has been reduced from 143 hours to 24 hours, and the time required for overall border compliance to effect imports has also been reduced from 120 hours to 24 hours.

    In order to further improve Pakistan’s position in Trading Across Border criterion, Federal Board of Revenue is pursuing simultaneous completion of Regional Improvement of Border Services (RIBS) and Pakistan Single Window.

    Regional Improvement of Border Services (RIBS) is being implemented at Torkham, Chaman, and Wahga and is the Flagship program that aims at improving border-crossing facilities which are key transit points to Afghanistan and India.

     Pakistan Single Window, on the other hand, would integrate online at least 46 departments / agencies in Pakistan and would make trading across border a hassle free and seamless operation.

  • Sales Tax Refund: FBR team to brief taxpayers on filing Annexure-H

    Sales Tax Refund: FBR team to brief taxpayers on filing Annexure-H

    KARACHI: A team of Federal Board of Revenue (FBR) will brief taxpayers about the procedure for filing Annexure-H which is mandatory for filing sales tax refunds.

    According to a circular, a technical committee of the FBR is scheduled to organize workshop/Webinar for orientation of SME manufacturers-cum-exporters and commercial exporters and tax consultants with regards to FASTER and procedure of filing of Annexure H on Wednesday January 20, 2021.

    The FBR team will brief how to file annexure H for smooth refund.

    Small and commercial exporters have been urged to join the workshop through Zoom meeting.

    https://us02web.zoom.us/j/8083005875?pwd=ZktTS2YrOE5oM2FTTzYwd2c5Q3NVUT09

    Annexure-H is a statement for providing stock position by taxpayers along with monthly sales tax return.

    The FBR from July 01, 2019 introduced expeditious payment of sales tax refunds within 72 hours subject to the true filing of Annexure – H.

    As per the Rules, refund will be treated as having been filed only after filing of Annexure H of the Sales Tax return, for which deadline of 120 days has been prescribed in the Rules and the same can be extended for a period of 60 days on the basis of approval from the Commissioner.

  • FBR obtains transaction information of stock members, brokers from NCCPL

    FBR obtains transaction information of stock members, brokers from NCCPL

    The Federal Board of Revenue (FBR) is set to gain direct access to transaction information of members, brokers, and investors within Pakistan’s equity market.

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  • FBR chairman visits Karachi to boost revenue collection

    FBR chairman visits Karachi to boost revenue collection

    ISLAMABAD: The Chairman of Federal Board of Revenue (FBR) Muhammad Javed Ghani to hold meetings with senior officials of Inland Revenue and Pakistan Customs on Monday January 18, 2021 to discuss measures to boost revenue collection during second half of the current fiscal year.

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  • Adjustment of expenses allowed against property income

    Adjustment of expenses allowed against property income

    ISLAMABAD: The Federal Board of Revenue (FBR) has said that adjustment of expenses on property income has been allowed if a taxpayer opted to pay income tax under the head of individual income.

    Sources in FBR said that through Finance Act, 2016, a dual tax treatment was introduced for property income of individuals/A0Ps and companies.

    Individuals and AOPs had to pay fixed amount of tax on gross rentals at the rates specified in Division VIA of Part-I of First Schedule.

    However, certain deductions were allowable for computing property income in case of a company.

    A new sub-section (7) was added to Section 15A through Finance Act, 2019 to enable Individuals/A0Ps to opt for normal tax regime and claim deductions against gross rentals as provided in the law.

    But that option was available only to those individuals and AOPs who derived income from property in excess of Rs.4 million.

    The Finance Act, 2020 has removed this condition by making amendment in sub-section 7 of section 15A.

    Now all individuals/A0Ps are allowed to claim deductions against gross rental income if they opt to pay tax at rates given in Divisions I of Part-I of First schedule to the Ordinance.

    Furthermore, deduction in respect of administration and collection charges under clause (h) of Section 15A has been reduced from 6% to 4% of the rent chargeable to tax.

  • Transfer of foreign assets required to be declared in annual return

    Transfer of foreign assets required to be declared in annual return

    ISLAMABAD: A person makes transaction or transfer of foreign assets during a tax year is required to declare the same in annual return.

    Officials in the Federal Board of Revenue (FBR) said that according to Income Tax Ordinance, 2001 a person having foreign assets or foreign income is required to file annual return of income and wealth statement.

    The law also makes mandatory for the person to declare any foreign assets transferred to any other person during the tax year and the consideration for the said transfer.

    Section 116A of the Income Tax Ordinance, 2001 explains the return filing requirement for a person having foreign income and assets statement.

    Section 116A. Foreign income and assets statement.

    (1) Every resident taxpayer being an individual having foreign income of not less than ten thousand United States dollars or having foreign assets with a value of not less than one hundred thousand United States dollars shall furnish a statement, hereinafter referred to as the foreign income and assets statement, in the prescribed form and verified in the prescribed manner giving particulars of—

    (a) the person’s total foreign assets and liabilities as on the last day of the tax year;

    (b) any foreign assets transferred by the person to any other person during the tax year and the consideration for the said transfer; and

    (c) complete particulars of foreign income, the expenditure derived during the tax year and the expenditure wholly and necessarily for the purposes of deriving the said income.

    (2) The Commissioner may by a notice in writing require any person being an individual who, in the opinion of the Commissioner on the basis of reasons to be recorded in writing, was required to furnish a foreign income and assets statement under sub-section (1) but who has failed to do so to furnish the foreign income and assets statement on the date specified in the notice.

  • Committee may recommend reduction in withholding tax provisions

    Committee may recommend reduction in withholding tax provisions

    ISLAMABAD: A committee constituted to simplify taxation procedures may recommend a reduction in the number of withholding tax provisions and measures for enhancing the revenue collection.

    Sources in the Federal Board of Revenue (FBR) said that a technical committee was constituted on September 17, 2020, for simplification of all taxation procedures.

    They said that the committee likely to submit its recommendations during next month for incorporation into the budget.

    The committee was assigned to propose measures to reduce the dependence on withholding taxes, minimum tax, advance tax, etc.

    According to the terms of reference (TOR), the committee would identify distortion, anomalies, and inequalities in the taxation system which cause difficulties for taxpayers, or discourage investment, industrialization, and documentation, and propose solutions.

    Further, the committee is also required to propose measures for simplification of all taxation procedures, in a manner that does not compromise revenue collection and documentation.

    The committee is also required to propose measures for improvement in the temporary importation and manufacturing bond schemes in order to enhance their scope and facilitate direct and indirect exporters throughout the value chain.

    The committee has been asked to propose remedies for issues relating to adjustment of input tax paid against services subjected to sales tax by the provinces.

    Meanwhile, the committee shall also identify issues hindering the smooth processing of refund claims through the FASTER system.

  • Criteria for selection, conduct of income tax audit

    Criteria for selection, conduct of income tax audit

    Islamabad: The Federal Board of Revenue (FBR) has adopted a criteria for selection and conduct of income tax audit under Section 214C of the Income Tax Ordinance, 2001.

    The criteria have been explained under updated Income Tax Rules, 2002, tax officials said.

    Selection and conduct of audit.-

    (1) This rule shall apply to selection of cases for audit by the FBR under section 214C of the Income Tax Ordinance, 2001 (XLIX of 2001).

    (2) The following steps shall be followed for selection of cases for audit through a computer ballot on random and parametric selection basis for tax years mentioned therein, namely:-

    (a) data of all returns (e-filed and manually filed) shall be utilized as a basic data;

    (b) the Board shall decide the cases of persons or classes of persons which are to be excluded from audit selection and such exclusions shall be publicized each year through FBR’s web-portal for information, prior to the process of balloting or selection;

    (c) cases falling under exclusions shall be identified and such cases shall be excluded from the data to be used for balloting;

    (d) the data of the remaining cases shall be utilized for computer ballot for audit selection;

    (e) for each tax year cases for audit shall be selected in accordance with the predetermined percentage, to be publicized through FBR’s web-portal, and prior to the balloting process, each year;

    (f) immediately after computer ballot, the lists of selected case shall be generated and placed on FBR’s web-portal;

    (g) the whole balloting system for audit selection shall be based only on the NTNs/ CNICs of the filers;

    (h) the NTNs and CNICs of the cases selected for audit shall be communicated to concerned RTOs and LTUs as per their respective jurisdictions;

    (i) for the purpose of selection of cases on parametric basis, risk parameters for persons or classes or persons to be used for balloting, wherever necessary, shall be determined by the Board, as under:-

    (A) risk parameters for persons or classes of persons to be used for balloting shall be determined by the Board;

    (B) audit selection parameters may be based upon the following:-

    (I) financial ratios for the year viz a viz the history of the case;

    (II) financial ratios viz a viz industrial, sectoral or national ratios;

    (III) industrial comparisons or bench marks;

    (IV) quantum of losses or refunds beyond certain thresholds; or

    (V) compliance history; and

    (j) computer balloting process in both categories of selection for audit shall be held in the presence of representatives from Chambers of Commerce and Industries and representatives of Tax Bar Associations.

    (3) The cases selected for audit by the Board shall be processed and the Commissioner Inland Revenue concerned shall issue intimation letter to the taxpayer about the selection of his case for audit with the following details:-

    (a) section under which selection has been made;

    (b) tax year for which the case has been selected for audit;

    (c) mode of selection whether random or parametric;

    (d) compliance requirements on the part of taxpayer e.g.-

    (i) provision of prescribed books of accounts;

    (ii) supporting information and documents, etc;

    (iii) computerized data, access to computerized data or provision of attested hard copies of computerized data.

    (4) On completion of examination of books of accounts, data or information under this rule the discrepancies, if found, shall be intimated to the taxpayer for obtaining taxpayers’ explanation, in the form of audit report, seeking taxpayer’s explanation on these points.

    (5) Explanations of the taxpayer, where found not acceptable, shall be intimated to the taxpayer, through a notice under section 122(9) of the Income Tax Ordinance, 2001 about the amendment in assessment along with the rationale or basis of such amendment and necessary amendment in assessment order shall be passed under section 122 of the said Ordinance after affording adequate opportunity of hearing to the taxpayer.”

  • FBR promotes Customs officers to BS-18

    FBR promotes Customs officers to BS-18

    Islamabad: Federal Board of Revenue (FBR) on Friday notified promotion of officers of Pakistan Customs Service (PCS) from BS-17 to BS-18.

    The following BS-17 officers of Pakistan Customs Service are promoted to BS-18 on regular basis with immediate effect:-

    1. Nawabzada Kamran Khan Jogezai

    2. Ubaidullah

    3. Farhat H. Khan

    4. Ali Mohtashim Minhas

    5. Muhammad Hamza Lak

    6. Abeer Javaid

    7. Sadaf Noor Elahi

    8. Quratulain Ramay

    9. Umair Zahid

    10. Syeda Sadaf Ali Shah

    11 . Shah Samad Hamadani

    12. Akmal Shahzad

    13. Saleem Tahir

    14. Ameer Ahmad

    The FBR said that the officers may actualize their promotions at their present place of posting.

    The officers, who are drawing performance allowance, will continue to draw the same after promotion.

    Through another notification the FBR said that officers Pakistan Customs Service from BS-17 to BS-18 were considered for promotion by the Departmental Promotion Committee on December 31, 2020.

    The committee recommended the following officers for promotion subject to completion of satisfactory missing Performance Evaluation Reports (PERs) mentioned against each without adverse remarks.-

    Malik Muhammad Ahmed 01.07.2019 to 15.02.2020

    All Asad  01.10.2019 to 30.06.2020

    Shakeel Ahmed 01.07.2019 to 30.06.2020

    Mustafa Zamir 01.07.2018 to 02.02.2019

    Ms. Asma Javed Paracha 01.07.2019 to 30.06.2020 2.

    The promotion of above named officers shall be notified on meeting the said condition, the FBR added.

  • FBR invites customs proposals for budget 2021/2022

    FBR invites customs proposals for budget 2021/2022

    The Federal Board of Revenue (FBR) has opened the floor for customs duty proposals as part of the preparations for the federal budget for the fiscal year 2021/2022.

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