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Category: Taxation

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  • FBR recommended to reduce record retention period to three years

    FBR recommended to reduce record retention period to three years

    KARACHI: Federal Board of Revenue (FBR) has been recommended to reduce the time limit to past three years for retention of sales tax record.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2020/2021 submitted to the FBR, highlighted the issue of Section 24 of Sales Tax Act, 1990, which required retention of record and document for six years.

    The KCCI said that the long time period only allows the officers of Inland Revenue to blackmail and harass the tax payers by issuing demands from closed accounts as far back as 6 years.

    The negative impact of such provision is that the revenue officials spend more time in fishing for discrepancies in old records instead of focusing their efforts on broadening of tax base.

    The KCCI proposed that the period retention of record and documents be reduced to 3 years, which is an established practice worldwide for all financial transactions.

    Regional Tax Offices (RTOs) and officers will have to work more on identifying new tax-payers instead of fishing in old records and create demand.

    The period of 6 years is counter-productive for revenue generation and renders the RTOs inefficient.

    In this era of computerization where all the transactions of the registered persons are cross verified instantaneously by the FBR, and the audits are conducted without any delay, the period of maintenance of records and documents should be reduced from 6 to 3 years.

  • Customs auction of vehicles to be held on June 04 at ASO Headquarter

    Customs auction of vehicles to be held on June 04 at ASO Headquarter

    KARACHI: Pakistan Customs has announced auction of used vehicles to be held on June 04, 2020 at Anti-Smuggling Organization (ASO), East Wharf, Karachi.

    Following vehicles will be presented for the auction:

    01. Used Toyota Lexus Car – Reg No. UC-868 -Model-2006-(As per seat Belt), Chassis: JTHBG 963905034702 / Engine EMH-3 GR-FE158467 – 3485 cc.

    02. Used Toyota Harrier Jeep – Reg.No-JAA-454 – Model-1998 – 2999cc, Chassis No-MCU-10-0013510 – Engine No- IMZ-FE6688090.

    03. Used Toyota Mark-II Saloon Car / Reg. No-BBL-708 / Model-2000 / 1800 HP, Chassis No-JZX110-6000922 / Engine No-1JZ-075010

    04. Used Toyota Land Cruiser Jeep – P.White Reg.No. LZN-888 – Model – 1999 – 4663 CC, Chassis No-UZJ 100-0081129 / Engine No- 2 UZ-0132269.

    05. Used Toyota Hilux Surf Jeep – Reg. No. CJ-4242 (Sindh) – Model-1990 – 2446 CC, Chassis No LN130-0026273 / Engine No. 2L-2264058

    06. Used Nissan X-Trail 5 Door Jeep – Pearl White Reg. No. GR-621 – Model-2005 (As per seat Belt Model-2000), Chassis No. NT 30-100374 – Engine No. QR 20 (DE)

    07. Used Toyota Land Cruiser Jeep – ( Petrol ) White Reg. No. BF-5933 – Model-1995 – 4476 CC, Chassis No. FZJ 80-0109507 / Engine No.

    08. Used Mercedes Benz Saloon Car (AG) – Reg.No. # AB 1001, Chassis No-WDB1240312B476728

    09. Used Toyota Hilux Surf Heep – Reg,No. UU-691 – Modle – 1992 – 240CC., Chassis – LN130-7022502 –

    Engine No-3244904

    10. Used Toyota Mark-X Car Reg. No. AQD-567 – Model-2006 – 2499 cc, Chassis # GRX120-3018594 Engine # 4 GR-FSE

    11. Used Toyota Hilux Surf Jeep Reg. # BC-4942 (Sindh) – Model-1993 – 3000 cc, Chassis # KZN130-9021488 – Engine # 1KZ-0040092

    12. Used Mercedes Saloon Car Reg # ZA-030 (Islamabad) – Model-2000 – 3200cc – Colour White, Chassis # WDB1704652F205019 Engine # 1234567

    13. Used Honda Hybrid Saloon Car Reg # AAP-669 (Quetta) – Model-2006 – 1300 cc, Chassis # FD3-1004625 Engine # LDA-1304637

    14. Used BMW Saloon Car ( 320i ) Reg # AAQ-687 (Quetta) – Model-2005 – 1995 cc, Chassis # WBAVA76080NK19520 Engine # A629H507N46B20BA

    15. Used BMW Car ( 735i ) Reg # YG-455 ( Islamabad ) – Model-2003 – Colour Black, Chassis # WBAGL42050DD81475

    16. Used Toyota Crown Royal Saloon Car Reg # AZS-383 – Model-2013 – Colour Silver, Chassis # AWS210-6030122

    17. Used Toyota Hilux Surf Jeep Reg # WAG – 871 (Quetta) – Model-1996 – 2700 cc, Chassis # KZN185-0033706 Engine # 1KZ-0347330

    18. Used Toyota AQUA Car Reg # ADT-722 – Model-2012, Chassis # NHP10-2060843

    19. Used Nissan X-Trail Jeep Reg # WAJ-910 ( Quetta ) – Model-2004, Chassis # NT30-132366

    20. Used Toyota Mark-X car Reg # Fake-SP-046-A – Model-2005 – 2500 cc, Chassis # GRX120-3006864

    21. Used Toyota Land Cruiser VX Jeep Reg # BC-3498 – Model-1993, Chassis # JT111TJ-800701495

    22. Used Toyota Hilux Surf Jeep ( Petrol ) Reg. # BF-0150 – Model-1996, Chassis # VZN185-0024837

    23. Used Toyota Hilux Surf Jeep ( Petrol ) Reg. # BF-1429 – Model-1996, Chassis # RZN185-0006433

  • Notice can be sent to any person requiring declaration of assets of spouse, minor children

    Notice can be sent to any person requiring declaration of assets of spouse, minor children

    A Commissioner Inland Revenue of the Federal Board of Revenue (FBR) has been vested with substantial powers under the Income Tax Ordinance, 2001, to scrutinize the asset details of individuals, including those pertaining to their families, by issuing notice.

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  • FBR allows repayment of customs duty on import of plastic raw material

    FBR allows repayment of customs duty on import of plastic raw material

    ISLAMABAD: Federal Board of Revenue (FBR) has allowed repayment of customs duty at Rs5.42 per kilogram on import of raw material for manufacturing of plastic goods meant for export.

    The FBR on Tuesday issued SRO 461(I)/2020 to amend SRO 212(I)/2009 to allow repayment of export duty on import of raw material.

    Through the instant SRO the FBR allowed duty drawback on import of 10 different raw material for the manufacturing of plastic goods at the rate of Rs5.42 per kilogram.

    The FBR allowed duty drawback on export of manufactured products from May 20, 2020. The FBR said that repayment of custom duty shall be paid on manufacturing of 100 percent goods including packaging materials used in the goods meant for export such as bottles, jars, vials, containers, droppers and the like.

    The conditions for the facility prescribed in the actual SRO is that:

    — the manufactured goods are exported out of Pakistan and an application for repayment of customs–duties is presented to the proper officer of Customs within two hundred and ten days of such exportation or within one hundred and eighty days from the date of realization of foreign exchange as shown on Bank Credit Advice issued in accordance with the current directive of the State Bank of

    Pakistan; and

    — the exporter makes a declaration on the goods declaration filed under section 131 of the Customs Act, 1969 (IV of 1969) and on other export documents for his claim for repayment of the customs–duties paid on the imported raw materials used in the production or manufacture of the goods being exported.

  • FBR advised tracing unregistered persons instead collecting further tax

    FBR advised tracing unregistered persons instead collecting further tax

    KARACHI: Federal Board of Revenue (FBR) has been urged to trace unregistered persons instead collecting three percent further sales tax on local supplies.

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  • Above 120,000 income tax returns added to ATL during lockdown

    Above 120,000 income tax returns added to ATL during lockdown

    ISLAMABAD: The tax authorities have received above 120,000 income tax returns since launch of new Active Taxpayers List (ATL) on March 01, 2020 and during ongoing lockdown to prevent spread of coronavirus, according to updated list issued June 01, 2020.

    The updated ATL for tax, around 120,000 taxpayers filed their annual returns for tax year 2019 since March 01, 2020.

    The number of active taxpayers increased to over 2.65 million as of May 31, 2020 from 2.53 million returns as shown in new ATL for tax year 2019.

    The FBR updates ATL every week and on an average the revenue body receives around 20,000 returns per week. However, due to lockdown in the country after the outbreak of coronavirus the number of financial transactions had fallen drastically.

    It is worth mentioning that additional 120,000 income tax returns have been filed after the due date. The due date for filing income tax returns for tax year 2019 was February 28, 2020.

    As per law it was mandatory for individuals, Association of Persons (AOPs) and corporate entities to file annual return in order to avail reduced rates of withholding tax on certain transactions.

    Filing return after due date a person is required to pay surcharge in order to appear on ATL besides paying late filing penalty.

    The sources said changes in law through Finance Act, 2019 were also compelling to file their returns. Through Finance Act, 2019, Tenth Schedule was inserted to Income Tax Ordinance, 2001 under which a person not appearing on the ATL would be liable to pay 100 percent additional withholding tax while making certain transactions.

    Prior to this change the persons not filing income tax returns were liable to pay enhanced rate of withholding tax.

    Previously, the law provides for the concept of a non-filer and stipulates higher withholding rates for the same which were adjustable at the time of filing of income tax return.

    A senior FBR official said that such tax regime had created a misconception that a non-filer can go scot free by choosing not to file income tax return.

    The measure are meant to increase the number of filers, however over time the focus shifted to raising additional revenue only.

    The measure had not achieved the desired results as the regime did not provide for any legal framework to ensure filing of return by such non-filers, the official said.

    In order to remove the aforesaid misconception, the concept and the term of ‘non-filer’ was abolished from the statute, the official added.

  • Sindh Revenue Board announces tax incentive package

    Sindh Revenue Board announces tax incentive package

    KARACHI: Sindh Revenue Board (SRB) has announced tax incentive scheme and waived up to 100 percent penalty amount on payment of outstanding amount, said a statement on Monday.

    The SRB said that acceding to the request of the taxpayers, associations and tax bars, the provincial revenue authority, had issued tax incentive package, which provides substantial benefits and relief to the taxpayers, service providers and withholding agents, in return of their tax compliance, under the Sindh Sales Tax on Services Act, 2011.

    The package includes exemption of up to 100 percent of the amount of default surcharge, total remission of penalties and immunity from arrest and prosecution if the taxpayer deposits:

    1. the liability of the arrears of tax (as outstanding on May 31, 2020) plus zero percent of the amount of default surcharge thereon between June 01, 2020 and June 15, 2020;
    2. the liability of arrears tax (as outstanding on May 31, 2020) plus five percent of the amount of default surcharge thereon between June 16, 2020 and June 22, 2020; and
    3. the liability of arrears of tax (as outstanding on May 31, 2020) plus 10 percent of amount of default surcharge between June 23, 2020 and June 30, 2020.

    The SRB said that in case where no tax liability is outstanding but only the arrears of amounts of penalty and/or default surcharge are outstanding, tax incentive package allows the remission of 95 percent of the amount of such penalty and 90 percent of the amount of such default surcharge, if the balance of the amounts of penalty and default surcharge are deposited during the period from June 01, 2020 to June 30, 2020.

    The provincial revenue authority advised all taxpayers, service providers and withholding agents to avail the benefits of the tax incentive package which shall expire at the close of June 30, 2020.

    The incentives announced through the notification provide and opportunity to the taxpayers to get substantial waiver of their liability to pay penalties and default surcharge by depositing the outstanding amounts of tax liabilities during the period the said notification is valid.

    The SRB further said that the package may also help in resolution of disputes pending in litigation, appeals, adjudication or audit.

  • LTU Karachi auditor awarded ‘removal from service’

    LTU Karachi auditor awarded ‘removal from service’

    ISLAMABAD: Federal Board of Revenue (FBR) has awarded major penalty of ‘removal from service’ on an auditor (BS-18) posted at Large Taxpayers Unit (LTU) Karachi for inefficiency and misconduct.

    A notification issued on Monday, the FBR said that disciplinary proceedings against Ghulam Fareed Pario, Assistant Director (Audit) (BS-18), Large Taxpayers Unit, Karachi were initiated under the Government Servants (Efficiency & Discipline), Rules 1973 on account of Inefficiency and Misconduct for his unauthorized absence from duty.

    The unauthorized absence from duty was borne out of record, the Authorized Officer i.e. Member (Admn) issued a direct Show Cause Notice to the accused.

    The accused officer submitted reply to the show cause notice on September 03, 2019 through email and courier.

    After having examined the relevant record and written defence, the authorized Officer concluded that willful absence from duty of Ghulam Fareed Pario, Assistant Director (Audit) (BS-18) LTU Karachi w.e.f.16.05.2019 stood established and recommended to the Authority for imposition of major penalty of “Dismissal from Service”.

    The Secretary Revenue Division, being the Authority in this case, provided opportunity of personal hearing to the accused on 18.10.2019 which also remained unavailed.

    Now therefore, Secretary Revenue Division, being authority in this case, after having considered all aspects of the case and imposed major penalty of “Removal from Service” upon Ghulam Fareed Pario.

  • FBR starts digital scrutiny of taxpayers’ information

    FBR starts digital scrutiny of taxpayers’ information

    ISLAMABAD: The Federal Board of Revenue (FBR) has established Tax Information Processing Unit (TIPU) for utilization of information available at multiple databases of the tax authorities.

    According to an office order issued on Monday, the FBR had embarked an ambitious plan for enhancing revenues, through efficient utilization power of IT for overall system improvement.

    “There is an emerging need for transforming existing raw data, available in multiple databases of the FBR, into meaningful insights, through which actionable steps may be suggested to field formation with regard to untapped revenue potential and potential leakages,” the FBR said.

    To realize the true potential of IT system, developed over years, it is imperative to engage a cross-functional team of professionals, available in FBR, who may perform following tasks, before generating meaningful insights from the datasets available in its IT systems: data mining; statistical analysis; data analytics; and MIS Reporting.

    The insights gained through data analysis may potentially generate actionable data which IR Operations Wing may convey to field offices, so that untapped revenue potential may be realized and potential leakages may be checked.

    The FBR said that in view of foregoing a cross functional TIPU had been established in IR Operations Wing, FBR manned by FBR’s regular workforce and temporary hiring of IT-experts, on need basis.

    The following officers are designated as domain team of the TIPU, under the supervision of Member IR Operatoins:

    a. Tariq Hussain Shaikh, Chief (IR&I)-Coordinator

    b. Ms. Rezwana Siddiqui, Chief (IR-Analysis)

    c. Zulfiqar Ali Gopang (S.S. IT)

    d. Naveed Afgan (Dy. Dir/Secy MIS)

    e. Syed Asif Jamil (AD/S.S

    f. Imran Ullah (AD-Audit)

    The FBR said that the TIPU would be operated IT experts, who would be hired on market-based salaries. The IT experts would design and develop IT modules, for data analytics.

  • Bilingual one-page income tax return form advised

    Bilingual one-page income tax return form advised

    KARACHI: Federal Board of Revenue (FBR) has been advised to make one-page simple income tax return form and that should be available in Urdu and English to facilitate taxpayers.

    In its proposals for budget 2020/2021, the Karachi Chamber of Commerce and Industry (KCCI) said that every year changes are made in income tax form and ironically, it becomes more confusing and difficult for the tax-payers to fill.

    It is particularly cumbersome for the Small and Medium Enterprises (SMEs) including individuals and Association of Persons (AOPs).

    The KCCI said that taxpayers have to seek assistance from consultants and pay large amount of fee only to comply with the requirements of tax return.

    Due to the changes every year, tax-payers have to wait for the new form to be issued by the FBR which takes a month or two after the new budget is approved.

    “The complicated form only helps the business of consultants and tax practitioners at the expense of compliant taxpayers,” the KCCI said.

    It is one of the reasons that many individuals prefer to stay out of tax regime and a deterrent to broadening of tax base.

    The Karachi Chamber proposed that separate income tax return forms for companies, AOPs, individuals and salaried class should be created.

    Forms for SMEs and individuals and retailers should be a simple one page form both in English and Urdu.

    Manual completion and filing should be allowed for individuals and SMEs in order to encourage documentation.

    Extreme penalties and charges should be avoided in case of late filing.

    Errors/short payment should be notified to registered person within two months of filing and correction of errors should be allowed to tax-filer for up to 3 months of filing without requirement of commissioner’s approval.

    The chamber said that incorporation of proposal will help in simplification of filing procedures and documentation. Besides it will also help in broadening of tax base and increase in number of filers.

    Further, it will save unnecessary expenses on fees of consultants and tax practitioners. It will eliminate corruption and harassment.