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Category: Taxation

Pakistan Revenue delivers the latest taxation news, covering income tax, sales tax, and customs duty. Stay updated with insights on tax policies, regulations, and financial developments in Pakistan.

  • Customs unfolds bid to clear mobile phones on passengers’ stolen information

    Customs unfolds bid to clear mobile phones on passengers’ stolen information

    KARACHI: Pakistan Customs has unfolded a bid to steal the data of air travelers for the purpose of mobile phone registration with the Pakistan Telecommunication Authority (PTA).

    According to the details the customs staff posted Jinnah International Airport (JIAP), Karachi detained a person, who was fraudulently obtained data of air travelers including passport numbers for clearing mobile phones at customs stage and for clearing PTA restriction.

    As per regulations only PTA certified mobile phones are allowed to have active connection in Pakistan. In this regard passengers arriving from abroad are allowed to clear one mobile phone without payment of duty and taxes. However, more than one phone will attract levy.

    Details revealed that customs authorities recovered around 63 mobile phones from a passenger namely Muhammad Umar arriving from an international flight.

    The accused passenger entered details of passengers into the PTA system to get cleared the mobile phones without duty and taxes. The accused passenger managed to get clearance from the PTA for those 63 mobile phones.

    This was confirmed by Muhammad Faisal, Deputy Collector of Pakistan Custom.

    The customs official said that the authorities had lodged an FIR against the accused for smuggling cell phones and stealing information of passengers.

    Faisal said that the accused had indulged in clearing mobile phones by entering details of passengers including CNICs, flight number and passport numbers etc.

    The accused in his statement said that many travel agencies were involved in this scam.

    The customs official said that PTA had been requested to introduce bio-metric system for the clearance of mobile phones.

  • FBR requested to extend date for filing sales tax return

    FBR requested to extend date for filing sales tax return

    KARACHI: Federal Board of Revenue (FBR) has been urged to extend the date for filing monthly sales tax returns as public holidays announced by the government for Eid holidays coincide with the return filing due dates.

    A letter has been sent on Friday to FBR Chairman Syed Muhammad Shabbar Zaidi for urgent consideration and for extension of time for e-filing of sales tax annexure ‘C’ and sales tax returns for the tax period May 2019.

    The Pakistan Tax Bar Association (PTBA) in its letter to FBR chairman informed that the last date for e-filing of sales tax annexure ‘C’ of sales tax returns and filing of sales tax return for the month May 2019 is June 10, 2019 and June 15, 2019, respectively. However, due to Eid Holidays due from June 04 to June 08, 2019, all the business houses will remain closed.

    The PTBA further said that the first word day after Eid and weekly holidays shall be June 10, 2019 which will be the last day of filing of Annexure “C”. Therefore it would not be practically possible to submit annexure “C” and Sales Tax Return in time.

    In view of above, the PTBA requested to extend the last date of e-filling of Sales Tax annexure “C” and e-filling of sales tax return up to June 18, 2019 for the tax period May 2019 to facilitate the taxpayers to fulfill their legal obligations properly.

  • PTBA urges FBR to extend date for filing income tax returns

    PTBA urges FBR to extend date for filing income tax returns

    KARACHI: Pakistan Tax Bar Association (PTBA) on Saturday urged Federal Board of Revenue (FBR) to extend the last date for filing income tax returns for Tax Year 2018 up to June 30, 2019 considering the recently launched tax amnesty scheme.

    In a letter to FBR Chairman Syed Muhammad Shabbar Zaidi, the PTBA informed that the Asset Declaration Ordinance, 2019 was announced on May 16, 2019 and the last date for filing declaration is June 30, 2019.

    The PTBA urged the FBR chairman to extend the last date for filing of return of income and statement of final taxation for individuals, Association of Persons (AOPs) and companies (other than public limited companies quoted on stock exchange) to June 30, 2019.

    The last date was already extended by the FBR till April 30, 2019 through Circular No. 03/2019 dated March 31, 2019.

    The apex tax bar said that the extension would encourage the new taxpayers to bring their house in order and come into the mainstream of economic activities by availing the benefit to become active taxpayers.

  • Chemical merchants advocate FTR continuation for commercial importers

    Chemical merchants advocate FTR continuation for commercial importers

    KARACHI: Chemical merchants have strongly advocated continuation of Final Tax Regime (FTR) for commercial importers in the upcoming budget.

    In a statement issued on Saturday Shahid Vaseem, Chairman, Pakistan Chemicals & Dyes Merchants’ Association (PCDMA), said that because commercial importers pay 6 percent advance non-adjustable tax at import stage, whereas industrial importers of same raw material pay only 5.5 percent adjustable/refundable advance tax or avail tax exemption certificate facility, therefore it was not justified to withdraw Final Tax Regime (FTR) from Commercial importers without giving them options of claiming tax refund and facility for issuance of Tax exemption certificate if excess tax is already paid at import stage.

    In meeting with PCDMA memebers and leading importers of industrial Raw Materials, Chairman PCDMA, said that assessed value for calculation of customs levies of an industrial raw material whether it is imported by industrial importer or commercial importer; remains same either on the basis of valuation ruling (if available), international scan (if available) or custom data; therefore, chances of under-invoicing eliminated on import of industrial raw materials.

    Shahid Vaseem said in his opinion by imposing similar rate of sales tax on industrial raw materials will also eliminate the issue of imports by non-genuine industrial importers and excess imports by the genuine industrial importers, who just import big volumes of industrial raw materials to sale in market at huge profit due to less rate of tax and in some cases got extra ordinary benefits of various SROs. Which resulted in loss of billions of rupees to government revenue.

    Shahid Vaseem demanded the Government to provide a level-playing field for commercial importers who are importing industrial raw material and supply these essential raw materials to industries in SME segment. At import stage commercial importers are paying 17+3= 20 percent sales Tax as compared to 17 percent only, if same items are imported directly by industrial importers, this renders our customer industries in SME segment un-competitive in local as well as export markets, thereby eliminating job opportunities and hurting exports of value-added goods.

    He explained that 3 percent Additional Sales Tax on import of Industrial Raw Materials if imported by Commercial Importers is irrational and unjustified, because 3 percent ADDITIONAL Sales Tax can only be applied if the Value Addition on raw material is assumed 17.65 percent, which is not possible because there is no process of value addition involved and no inputs such as Land, Buildings, Machinery, Labor, Electricity and Gas etc. are used by commercial importers of same industrial raw materials.

    On the contrary the value addition by manufacturers is assumed as 10 percent only and the GST is charged at the rate of 1.7 percent despite all the above inputs.

    He claimed that by implementing same rate of taxes and extending benefits of various SROs to commercial importers, similar to the industrial importers of Raw materials for one year will result in significant drop in import volume by the industrial importers, which will prove the misuse of reduce tax facility by the industrial importers and will provide opportunity to the government to identify non-genuine industrial importers who are only existing for importing raw materials for commercial sales.

  • Ministry opposes suggestions to allow commercial import of used cars

    Ministry opposes suggestions to allow commercial import of used cars

    ISLAMABAD: The ministry of industries and production has opposed the suggestions to allow commercial import of used and old motor cars into Pakistan.

    In an office memorandum, the ministry said that a meeting was held earlier this month with the car dealers federation to analyse suggestions to devise import and re-export of used vehicles policy 2019/2029 wherein it was unanimously observed that the dealers were interested in commercial import of used/old cars.

    The ministry said that as for the investment plan of $3.2 billion, the same seems irrational as importers do not plan to build any manufacturing facilities in near future. The Engineering Development Board (EDB) has therefore opined that proposed plan will negatively affect existing OEMs, new entrants and auto part manufacturers.

    The ministry further said that it is important to consider that Auto Development Policy (ADP) 2016-2021 has attracted investment of more than $1.3 billion so far from foreign investors who are at various stages of setting up their projects.

    Under ADP 2016/2021, fifteen new investors have been granted Greenfield status and under Brownfield category two closed down units have been revived, the existing OEMs are enhancing their capacities, their production and other new entrants are expected to start their production/complete their manufacturing facilities shortly. As per business plans, few new entrants have planned to export as well.

    “In view of above, allowing commercial import for domestic market would be against the spirit of Automotive Development Policy 2016/2021, which was prepared in consultation with Board of Investment, FBR and Ministry of Commerce etc.”

    It is also pertinent to point out that import of used cars would be at odds with the relevent import policy provision, hence it is requested to reject the proposal.

  • Banks assure providing details of Benami account holders to FBR

    Banks assure providing details of Benami account holders to FBR

    ISLAMABAD: The commercial banks have assured the Federal Board of Revenue (FBR) of providing details of Benami account holders for the purpose of broadening of tax base and documentation of economy.

    An important meeting was held on Thursday of all chief financial officers with Syed Muhammad Shabbar Zaidi, chairman, FBR.

    The CFOs of all commercial banks assured complete cooperation to the FBR chairman in providing details of account holders in order to broaden the tax base.

    The participants of commercial banks included Chief Financial Officers of Allied Bank, United Bank, Habib Bank and others.

    They assured their full cooperation to the Chairman FBR and welcomed his appointment as Chairman FBR.

    The Chairman FBR thanked the Chief Financial Officers.

    FBR sources said that the meeting was important related to next review of Financial Action Task Force (FATF) on Pakistan.

    It is learnt that huge amount of money laundering was done through Benami bank accounts besides those were also used for tax evasion.

    The FBR chairman has already made it clear that the current amnesty scheme is the last opportunity for people having undeclared income and assets.

  • SRB suspends sales tax registration of Multinet Pakistan

    SRB suspends sales tax registration of Multinet Pakistan

    KARACHI: Sindh Revenue Board (SRB) has suspended sales tax registration of M/s. Multinet Pakistan (Pvt.) Limited for defaulting tax payment and non-compliance in filing monthly sales tax return.

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  • ICAP proposes restricting powers of Directorate General Intelligence and Investigation

    ICAP proposes restricting powers of Directorate General Intelligence and Investigation

    KARACHI: Institute of Chartered Accountants of Pakistan (ICAP) has proposed restricting powers of Directorate General of Intelligence and Investigation (I&I) as multiple powers of tax authorities are causing hardship for taxpayers.

    The ICAP in its tax proposals for budget 2019/2020 said that the Federal Board of Revenue (FBR) through SRO 115 (I)/2015 dated February 09, 2015 conferred upon the Directorate General (Intelligence and Investigation), Inland Revenue, the powers of the Chief Commissioner/Commissioner:

    — to exercise powers and perform functions under Sections 174, 175, 176, 177 (other than power to initiate audit), 178, 179, 180, 181, 182, Part III, Part XI of Chapter X, Sections 205 and 221; and

    — to investigate Suspicious Transactions Reports (STRs) or other assets of persons or classes of persons impounded by any department or agency of the Federal or Provincial government and prepare/transmit reports to respective RTOs or LTUs for the purpose of application of Section 111 and for taking appropriate action under the Income Tax Ordinance, 2001.

    The ICAP recommended that the law should be amended so that the authority of Director General Intelligence and Investigation is exercised only to investigate Suspicious Transactions Reports (STRs) or other assets of persons or classes of persons impounded by any department or agency of the Federal or Provincial government and prepare / transmit reports to respective RTOs or LTUs for the purpose of application of Section 111 and for taking appropriate action under the Income Tax Ordinance, 2001 and should not exercise the powers under various sections of the Ordinance.

    The creation of parallel authorities for the purpose of sections 174, 175, 176, 177, 178, 179, 180, 181, 182, Part III, Part XI of Chapter X, Sections 205 and 221 is causing problems to the taxpayers.

  • PTBA suggests reducing record retention time to five years under Sindh tax laws

    PTBA suggests reducing record retention time to five years under Sindh tax laws

    KARACHI: Pakistan Tax Bar Association (PTBA) has submitted budget proposals 2019/2020 to Sindh Revenue Board (SRB) suggesting to reduce time limit for retaining records to 5 years from 10 years.

    The apex tax bar said that under present legislation a taxpayer is required to retain records for a period of 10 years and show-cause notices may be issued within a period of 8 years from the date of relevant tax period.

    This is in excess of the statute of limitation provided under the Sales Tax Act and Income Tax Ordinance. It will not only put excess burden on the taxpayer, but also disincentivizes the tax authorities from taking timely action.

    It is therefore recommended that the time period for retention of records and assessment of tax should be reduced to five years.

    This would save taxpayers from practical difficulties and unnecessary burden while pushing the tax authorities to take more timely action.

    The PTBA also highlighted the issue that no input tax is allowed to be claimed on goods or services acquired prior to six months preceding the date of commencement of the provision of taxable services by a taxpayer.

    Therefore it is recommended that such restriction should be eliminated.

    Giving rationale to the suggestions, the PTBA said that any bar on admissibility of input tax borne by the taxpayer prior to six months preceding the commencement of provision of taxable services is against the basic principal of VAT. It is also not justifiable in case of a long term projects.

    Regarding assessment order, the apex tad bar said that it can be amended by a tax officer on the basis of any subsequent information, etc.

    “Such powers are arbitrary and unjust and may open the doors for harassment and corruption.”

    The PTBA suggested that the taxpayer should first be confronted with a show-cause notice with substantial reasons and definite information/evidence(s) that warrant reopening or amending the assessment order.

    “Further, the powers to amend any assessment order should only be vest with the Commissioner or Board only.”

    This recommendation would introduce transparency in the tax system for revision of shut and close transactions and provide justice to the taxpayer.

    The PTBA further pointed out that the tax officer is empowered to ask for any information from a taxpayer without specifying the reason or nature of the case being investigated by him.

    Scope of Section 52(1) should be restricted to specific parties and transactions which are within the jurisdiction of Sindh and are specifically identified by the tax officer instead of fishing and roving enquiries.

    This promotes equity and natural justice and avoids harassment and unnecessary proceedings.

  • Monitoring of Withholding Tax: FBR launches mega operation against textile, sugar companies for tax evasion

    Monitoring of Withholding Tax: FBR launches mega operation against textile, sugar companies for tax evasion

    ISLAMABAD: Federal Board of Revenue (FBR) has launched mega crackdown against textile and sugar sectors for suppressing sales and evading tax by issuing fake and flying invoices.

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