ISLAMABAD: The ministry of commerce has said that only those importers, who are on the Active Taxpayers List (ATL) of Sales Tax issued by the Federal Board of Revenue (FBR), are eligible to import white sugar on concessional rate of tax.
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FBR allows monthly salary up to Rs25,000 paid in cash as business expense
ISLAMABAD: Federal Board of Revenue (FBR) has allowed monthly salary up to Rs25,000 per employee paid in cash as business expense after amendment made to Income Tax Ordinance, 2001.
The FBR on Thursday issued Income Tax Circular No. 03 to explain changes made to Income Tax Ordinance, 2001 through Finance Act, 2020.
The FBR said that section 21(m) of the Ordinance previously disallowed expenditure on account of monthly salary against business income if it was paid in excess of threshold of Rs 15,000 per month per employee and payment was made otherwise than through crossed cheque or direct transfer of funds to the employees bank account.
The FBR said that the Finance Act, 2020, had increased this threshold to Rs25,000 per month per employee for payment of salary otherwise than through crossed cheque or direct transfer of funds to the employees bank account.
The FBR further explained that Section 21(l) of the Ordinance does not allow deduction against business income if claim of a business expenditure exceeds Rs50,000/- under a single account head in aggregate and payment is made otherwise than through crossed banking instrument, online transfer of payment or credit card from business account of the taxpayer.
However, this inadmissibility of deduction did not apply if a single transaction on account of such business expenditure remained at Rs. 10,000/- or below.
“Finance Act, 2020 has increased these thresholds from Rs. 50,000 to Rs. 250,000/- and from Rs.10,000/- to 25,000/-respectively,” the FBR added.
However, the FBR said that expenditure on account of utility bills is allowed against business income under section 20 of the Ordinance.
“A new clause (p) has been added to Section 21 to disallow it if it is incurred in excess of certain limits and is in violation of certain conditions as may be prescribed by the FBR,” It added.
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Filing income tax return mandatory for FTR taxpayers: FBR
ISLAMABAD: Federal Board of Revenue (FBR) has said that filing annual income tax return is mandatory for taxpayers falling under final tax regime (FTR).
The FBR on Thursday issued Income Tax Circular No. 03 of 2020 to explain major changes to Income Tax Ordinance, 2001 through Finance Act, 2020.
The FBR said that prior to the Finance Act, 2020 persons subject to the final tax regime were obliged to file statement of final taxation under section 115(4) of the Ordinance.
This section has now been omitted since final tax regime has been phased out for most of the transactions.
“However, any person whose income is still subject to final tax regime, is now obligated to file normal income tax return and allied documents under the newly inserted clause (ae) in sub-section (1) of section 114 of the Ordinance,” the FBR said.
The FBR further added that an enabling provision has also been inserted in clause (a) of sub-section (2) of section 114 of the Ordinance whereby the Board had been empowered to prescribe different returns for different classes of income or persons including persons subject to final taxation.
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Tax return form not finalized so far as less than a month for deadline
ISLAMABAD: Federal Board of Revenue (FBR) has yet to finalize income tax return form for tax year 2020 as less than one month is remaining for return filing due date.
The due date for filing income tax returns is September 30, 2020 for tax year 2020. By this date salaried persons, Association of Persons (AOPs) and companies falling under special financial year are required to file their annual income tax returns.
As per interpretation of tax experts the FBR should issue the tax return form on July 01 every year to give taxpayers three-month time to file their returns.
This year, as usual, the FBR has already delayed two months in issuing the final draft of income tax return form. This delay may result in extension in time for filing the annual return.
The FBR on August 19, 2020 issued draft income tax return form for tax year 2020 for taking input from stakeholders to finalize the return form. So far the FBR is failed to finalize the return despite lapse of around half a month.
The FBR invited comments on the draft income tax return form within seven days from the date of issuance of SRO 745(I)/2020.
It is pertinent to mention that the FBR is estimating half a million income tax return during next couple of years. Tax experts said that timely issuance of return form may help the FBR to achieve its desired number of return filers.
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Project launched to promote tax culture through educational institutions
ISLAMABAD: Federal Board of Revenue (FBR) and Federal Directorate of Education (FDE) have signed a agreement to promote tax culture in the country through educational institutions.
A special signing ceremony of Letter of Understanding (LoU) between FDE and FBR held on Wednesday in Ministry of Federal Education and Professional Training Islamabad.
Ceremony was observed by Federal Minister Shafqat Mahmood, Parliamentary Secretary Wajija Akram Khan, Chairman FBR Javed Ghani, Federal Secretary Farah Hamid Khan, Additional Secretary Mohyuddin Ahmed Wani, Director General Federal Directorate of Education, Zia Batool and senior officers of the FBR.
The LoU is aimed to promote tax culture and tax awareness in all educational institutions of Federal Directorate of Education.
It shall serve to define and detail the terms & conditions to foster positive taxation culture serve and awareness among students and teachers through different sets of activities, skills and experiential learning for making them responsible citizen.
Federal Board of Revenue will educate and train two hundred twenty thousand students & seven thousands & five hundred teachers through taxation syllabus, training sessions and seminars.
Federal Board of Revenue (FBR) shall provide experiential learning opportunities, on and off campus for personal and professional development of the students and Teachers.
Federal Board of Revenue is prime institution of the country which collects tax from businesses and individuals, scrutinize tax crimes and money laundering by applying highest standards of courtesy, integrity and professionalism.
Federal Directorate of Education shall arrange tax awareness campaigns and walks in coming months all over the Islamabad capital territory.
Federal Minister Shafqat Mahmood applauded the initiative and urged the provinces to follow this practice. Federal Education Minister has stated, we are introducing such reforms through syllabus for students and teachers, which have never been observed in the history of the country, before.
The project will ensure improved personal and professional knowledge, attitude and skills of the students & teachers through core values of respect for law, the life and property of self and others by strictly following the Federal Board of Revenue.
LoU was inked by Director General Federal Directorate of Education (FDE) Zia Batool and Chief (FATE) Federal Board of Revenue Ayesha Farooq.
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FBR notifies rules to launch authorized economic operator program
ISLAMABAD: Federal Board of Revenue (FBR) has notified rules to launch Authorized Economic Operator (AEO) program to improve trade and business environment in the country.
The AEO was launched by inserting Section 212A was inserted in the Customs Act, 1969 through the Finance Act, 2018.
The FBR now issued AEO rules vide SRO 798 (I) /2020 dated August 28, 2020.
FBR has also constituted AEO Approval Committee in this regard which is finalizing the request of applicants. Software for business process and WeBOC modules for AEO programme has already been developed and is ready for launch at present.
The FBR intend to start Pilot project of the AEO programme at MCC Port Qasim (Exports) Karachi in October, 2020, which will be later on extended to import sector as well.
The World Customs Organization’s (WCO) Authorized Economic Operator (AEO) Programme is one of the pillars of WCO’s Framework of Standards to secure and facilitate trade (SAFE).
The programme is widely acknowledged as a key driver for a solid customs-business partnership; secure, transparent and predictable trading environment; and in a wider context of economic growth.
Accredited AEOs can enjoy several trade facilitation benefits including expedited processing and release of shipments, mutual recognition of AEO status by customs administrations, financial guarantee waivers, and self assessment.
AEOs include inter alia manufacturers, importers, brokers, carriers, consolidators, intermediaries, exporters, ports, airports, terminal operators, integrated operators, warehouses and distributors.
The government has a Category ‘C’ commitment to provide additional trade facilitation measures related to import, export or transit formalities and procedures, to authorized operators. Pakistan currently ranked 108 out of 190 economies, based on World Bank’s Ease of Doing Business score, making it a less attractive country for potential investors.
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FBR revenue collection growth flat at Rs593bn in first two months of FY21
ISLAMABAD: The growth in revenue collection by Federal Board of Revenue (FBR) was remained flat at Rs593 billion during July – August of current fiscal year FY21 as compared with Rs582 billion in the corresponding month of the last fiscal year.
However, the FBR on Monday said that it had surpassed the revenue collection target of Rs551 billion by Rs42 billion during the months under review.
The FBR said that to redress the hardships of the business community caused by Covid-19, refunds to the tune of Rs30.6 billion have been disbursed collectively in the first two months of current fiscal year, as compared to refunds of Rs11 billion during first two months of the last fiscal year.
Sales Tax refunds are being issued under centralized and automated system called FASTER which is clearing refunds to exporters within 72 hours for the first time as committed by the government.
FBR is also engaging with trade and industry to mitigate their genuine grievances. FBR is proactively reaching out to Trade and Industry and resolving their issues.
FBR has also launched an unprecedented crackdown on corruption dismissing and suspending 76 officers and officials since July 2020.
In post COVID-19 pandemic scenario, the economic activities are now being revived through multiple economic stimuli and reliefs granted in the budget FY-2020-21.
Hectic efforts were put up by Customs field formations in respect of collection of duty and taxes which was otherwise a daunting task owing to post COVID-19 pandemic economic constraints, Muharram’s holidays and heavy rain fall in Karachi which is the epicenter of country’s revenue collection.
This heavy rainfall badly affected the customs clearance of imported cargo during the last week of this month and resultantly the revenue collection.
According to the official figure, total customs duty collected during first two months of current FY-2020 is Rs. 92 billion. Sales tax collection at import stage is on lower side as compared to the corresponding period of the previous year owing again to heavy rain fall in Karachi.
Furthermore, exemption granted in respect of Additional Customs Duty (ACD) on more than 1600 tariff lines in budget FY 2020-21, also subsequently resulted into decrease in sales taxable value.
In line with the vision and directives of the honorable Prime Minister of Pakistan to curb the menace of smuggling, the Federal Board of Revenue (FBR) vigorously launched a countrywide counter-smuggling drive.
The FBR accordingly directed its field formations to make all out efforts to intensify anti-smuggling activities.
In pursuance of the aforesaid directions, Pakistan Customs has initiated massive anti-smuggling operations throughout the country and across all terrains that have led to significant seizures of smuggled goods.
During the month of August 2020 alone, Customs seized smuggled goods worth Rs. 3.95 Billion as compared to Rs 2.1 Billion in August 2019, thus showing an increase of 87.3%. These seized goods included fabrics, cigarettes, foreign currency, POL products, auto parts, foodstuff, narcotics and other miscellaneous goods.
Moreover, mega seizures of luxury vehicles, gold, and betel nuts were also effected during the same period. The Customs formations at Quetta, Peshawar and Multan have seized smuggled goods worth Rs. 1.6 Billion, while most of the remaining goods were at Karachi, Lahore and Islamabad from raids on godowns wherein smuggled goods were stored.
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FBR launches action against suspicious transactions to comply FATF requirement
ISLAMABAD: Federal Board of Revenue (FBR) has launched action against suspicious transactions to curb money laundering in order to meet the requirement of Financial Action Task Force (FATF).
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FBR issues list of businesses located in eight cities for mandatory income tax integration
ISLAMABAD, July 5, 2023 – The Federal Board of Revenue (FBR) has issued a directive mandating the online integration of businesses located in eight major cities across Pakistan under the income tax laws. This measure is part of the FBR’s ongoing efforts to improve tax compliance and streamline revenue collection.
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Exemption to Greenfield Industry: FBR amends sales tax rules
ISLAMABAD: Federal Board of Revenue (FBR) has notified rules for processing application to avail sales tax exemption on greenfield industry.
The FBR issued SRO 777(I)/2020 to amend Sales Tax Rules 2006 and said that a registered person applying for approval of its industrial undertaking as “Greenfield Industry”, as defined in sub-clause (12A) of section 2 and for exemption under Serial No.150 of the Table –I of Sixth schedule to the Sales Tax Act 1990, shall make an application electronically to the Commissioner Inland Revenue having jurisdiction in the form prescribed in Annexure-I along with documents prescribed in Annexure-II of this Chapter.
The registered person shall also submit a hard copy of the prescribed application to the Commissioner Inland Revenue for the purposes of approval under sub-clause (12A) of section 2 and Serial No.150 of Table-I of Sixth Schedule to the Sales Tax Act, 1990 along with all the documents required under this Chapter.
Processing of applications by the Commissioner
(1) On receipt of an application under rule 158B, the Commissioner Inland Revenue may make such inquiries or call for such further information or documents as deemed necessary.
(2) After scrutiny of the application and the documents annexed thereto, the Commissioner Inland Revenue shall, forward the application to the Engineering Development Board, Government of Pakistan hereinafter referred to as “EDB” in this Chapter, for seeking its expert opinion as to whether the process or technology being employed by the said industrial undertaking is or is not already under use in Pakistan.
(3) Upon receipt of application forwarded by Commissioner Inland Revenue, the EDB shall process the same within the time stipulated by him and communicate its expert opinion / findings with regard to the query raised in sub-rule (2) tothe Commissioner Inland Revenue.
Approval of the application:
(1)After completion of all the formalities, the Commissioner Inland Revenue may, through an order in writing, approve the industrial undertaking for the purposes of sub-clause (12A) of Section 2 of the Act.
(2) The Commissioner Inland Revenue may, after recording the reasons in writing, refuse to grant approval for the purposes of sub-clause (12A) of Section 2 of the Act.
Finalization of Applications. The Commissioner Inland Revenue shall finalize the applications filed under Rule 158B within fifteen days of its receipt.
Appeal against decision of a Commissioner Inland Revenue. Any registered person dissatisfied with the decision of the Commissioner Inland Revenue under Rule 158D may prefer an appeal within sixty days of the receipt of the order to the Appellate Tribunal Inland Revenue under section 46 of the Act.
Procedure for generation and transmission of exemption certificate in the WeBOC. — (1)In case of grant of approval as “Greenfield Industry”, the exemption certificate shall be generated automatically by the IRIS on the basis of the approval as Greenfield industry granted by the Commissioner Inland Revenue.
The exemption certificate shall be automatically transmitted from IRIS to WeBOC as per existing procedure.
Procedure for availing sales tax exemption on import of plant and machinery:
(1) The registered person shall upload a copy of the order of approval as Greenfield Industry already issued by the Commissioner Inland Revenue in WeBOC at the time of preparations of Goods Declaration for the imported plant and machinery.
(2) The registered person shall claim in the Goods Declaration the exemption from sales tax on the imported plant and machinery as per Serial No. 150 of Table-1 of the Sixth Schedule to the Sales Tax Act 1990.