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Category: Taxation

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  • FBR grants tax exemption on donations to PM Corona Relief Fund

    FBR grants tax exemption on donations to PM Corona Relief Fund

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday exempted income tax on donations made to Prime Minister’s Corona Relief Fund.

    The FBR issued SRO 300(I)/2020 to make amendment to Second Schedule of Income Tax Ordinance, 2001 to allow exemption from whole of income tax on donations made to PM Corona Fund.

    The FBR also granted exemption from minimum tax to the donations made towards the Prime Minister’s COVID-19 Pandemic Relief Fund – 2020.

    The FBR also exempted the withholding tax deduction on non-cash banking transactions made by taxpayers not on the Active Taxpayers List (ATL) under Section 236P of the Income Tax Ordinance, 2001.

    Further, Section 151, Section 231A and Section 231AA will also not apply to donations made to the Prime Minister Corona Relief Fund.

  • FBR asks exporters to provide IBAN for duty drawback transfer

    FBR asks exporters to provide IBAN for duty drawback transfer

    ISLAMABAD: Federal Board of Revenue (FBR) has asked exporters to provide their IBAN of their bank account numbers for direct transfer of customs duty drawback.

    The FBR said that it has devised a centralized system of online payment of customs duty drawback directly in the bank account of the exporters.

    For this purpose, FBR has required from the exporters to update their WEBOC profile and provide IBAN of the same bank account whose details are already available in WEBOC profile of the exporters to receive Custom Duty Drawback.

    FBR has required the information to be provided as soon as possible to avail electronic transfer facility for Customs Duty Drawback payments.

  • FBR drafts rules for online income monitoring of services sector

    FBR drafts rules for online income monitoring of services sector

    ISLAMABAD: Federal Board of Revenue (FBR) will make it mandatory for providers of services to install electronic fiscal device (EFD) for real-time monitoring and collection of income tax.

    The FBR issued SRO 296(I)/2020 on Thursday to unveil draft rules for various services sectors to share online data of transactions in order to determine their income and subsequent contribution of income tax.

    Through the SRO the FBR proposed amendment to Income Tax Rules, 2002 and invited comments from stakeholders within seven days before making the rules part of the statute.

    The FBR proposed a new Chapter VIIA to the Income Tax Rules, 2002 namely ‘Online Integration of Businesses.’ All the companies operating in the country shall require installing EFD. In case other than company the taxpayers shall require to install the device operating in eight major cities, which included: Karachi, Lahore, Islamabad, Rawalpindi, Faisalabad, Multan, Peshawar, and Gujranwala.

    Through the proposed amendment, the FBR is intending to make it mandatory the installation of EFD for services, included:

    01. Restaurants;

    02. Hotels, motels, guest houses, marriage halls, marquees, clubs, including race clubs.

    03. Inter-city travel by road.

    04. Courier Services and cargo services.

    05. Services provided for personal care by beauty parlors, clinics and slimming clinics, body massage centers, pedicure centers, including cosmetic and plastic surgery by such parlors/clinics.

    06. Medical practitioners and consultants.

    07. Pathological laboratories, medical diagnostic laboratories including X-Ray, CT Scan, M.R. Imaging etc.

    08. Hospitals or medical care centers providing medical consultation, hospitalization or other ancillary services.

    09. Health clubs, gyms, physical fitness centers, and body or sauna massage centers.

    10. Photographers.

    11. Accountants.

    12. Pharmacies.

    According to the rules, the services provider has been defined as integrated enterprise. Such kind of service provider is required to install such fiscal electronic device and software.

    Through the device, following tasks will be performed:

    Receive, record, analyze and store fiscal data;

    Format fiscal data into fiscal invoices or bills;

    Transmit the fiscal data to the board’s computerized system through secure means; and

    Print invoice or bills.

    The FBR said that every transactions made through EFD shall be recorded by a CCTV camera and the recording shall be retained for a period of at least three months.

    In case ancillary services or sale of goods are made from notified establishment, the transactions shall also be recorded and the invoice or bill issued in the same manner. Such data shall also be communicated to the board’s computerized system in the same manner.

  • Sales tax on services exempted on construction services

    Sales tax on services exempted on construction services

    LAHORE: Punjab Revenue Authority (PRA) has exempted the sales tax on services rendered by construction industry till June 30, 2020.

    The provincial authority issued a notification dated April 02, 2020 and allowed zero percent sales tax on services provided by construction sector for next three months.

    However, this exemption from tax is available with condition that no input tax adjustment will be granted.

    Previously, the industry was allowed reduced rate of five percent and one percent without input tax credit/adjustment in respect of government civil works and sixteen percent with input tax credit/adjustment for others.

    The tax is payable within the provincial jurisdiction by construction services and services provided by contractors of building (including water supply, gas supply and sanitary works), roads and bridges, electrical and mechanical works (including air conditioning), horticultural works, multi-discipline works (including turn-key projects) and similar other works but, excluding:

    (i) where the tax is otherwise paid by registered persons as property developers, builders or promoters for building construction; or

    (ii) where the construction work is funded under an agreement of foreign grant-in-aid or involves construction of consular buildings; or

    (iii) residential construction projects where the covered area does not exceed 10,000 square feet for a house and 20,000 square feet for an apartment except where construction services are provided to construct more than one house or more than one apartment building.

    Explanation- Notwithstanding the rate of five percent fixed in column 4, the following further reduced rates shall be applicable:

    (a) one per cent for all services specified at S.No.14 without input tax credit or adjustment to the extent of Government civil works including those of cantonment boards involved in the ongoing development schemes and projects launched during Financial Year 2016-17 and funded under the Annual Development Plan of the Punjab Government or funded through foreign loans where the negotiations were finalized after 1st of July 2016 or funded under Public Sector Development Program of the Federal Government or funded by the Cantonment Boards; and

    (b) zero per cent for all services specified at S.No.14 without input tax credit/adjustment to the extent of Government civil works including those of cantonment boards involved in the ongoing development schemes and projects launched prior to Financial Year 2016-2017 and funded under the Annual Development Plan of the Punjab Government or funded through foreign loans where the negotiations were finalized as on 1st of July 2016 or funded under Public Sector Development Program of the Federal Government or funded by Cantonment Boards.

  • Nausheen Amjad assumes as 27th FBR chairperson

    Nausheen Amjad assumes as 27th FBR chairperson

    ISLAMABAD: Ms. Nausheen Javaid Amjad, BS-22 officers of Inland Revenue Service (IRS) on Wednesday assumed the charge of 27th chairperson of Federal Board of Revenue (FBR).

    A notification issued by the FBR, stated that in pursuance of Establishment Division’s Notification No. 34/1/2018-E-I, dated 08.04.2020, Ms. Nausheen Javaid Amjad, a BS-22 officer of Inland Revenue Service has relinquished the charge of the post of Member (Admn), Federal Board of Revenue (HQ), Islamabad w.e.f 08.04.2020 and assumed the charge of the post of Chairperson, Federal Board of Revenue (HQ), Islamabad on the same date.

    Details of Chairperson, CBR/FBR:

    1)Ms. Nausheen Javaid Amjad08.04.2020
    2)Syed Muhammmad Shabbar Zaidi10.05.201908.04.2020
    3)Mr. Mohammad Jehanzeb Khan29.08.201810.05.2019
    4)Ms. Rukhsana Yasmin02.07.201829.08.2018
    5)Mr. Tariq Mahmood Pasha04.07.201702.07.2018
    6)Dr. Muhamad Irshad19.01.201730.06.2017
    7)Mr. Nisar Muhammad Khan17.11.201518.01.2017
    8)Mr. Tariq Bajwa02-07-201317.11.2015
    9)Mr.Ansar Javed10-04-201330-06-2013
    10)Mr. Ali Arshad Hakeem10-07-201209-04-2013
    11)Mr. Mumtaz Haider Rizvi21.01.201210-07-2012
    12)Mr. Salman Siddique24.12.201021.01.2012
    13)Mr. Sohail Ahmad18.05.200924.12.2010
    14)Mr. Moinuddin Khan02.01.199806.11.1998
    15)Mr. Hafeezullah Ishaq11.11.199602.01.1998
    16)Mr. Shamim Ahmed28.08.199611.11.1996
    17)Mr. Alvi Abdul Rahim13.07.199528.08.1996
    18)Mr. Sajjad Hasan24.07.199103.10.1991
    19)Mr. Ahadullah Akmal16.08.1990 24.07.1991
    20)Mr. Ghulam Yazdani Khan22.01.198911.08.1990
    21)Syed Aitezazuddin Ahmed20.08.198802.01.1989
    22)Mr. I.A. Imtiazi11.08.198520.08.1988
    23)Mr. Fazlur Rahman Khan14.12.198011.08.1985
    24)Mr. N.M. Qureshi12.11.197514.12.1980
    25)Mr. M. Zulfiqar01.10.197412.11.1975
    26)Mr. Riaz Ahmad17.11.197330.09.1974
    27)Mr. M. Zulfiqar11.10.197117.11.1973
  • Punjab Tax Relief Package: Many sectors granted exemption till June 30

    Punjab Tax Relief Package: Many sectors granted exemption till June 30

    LAHORE: The government of Punjab has granted exemption from sales tax on services to many sectors in order to dilute effects of coronavirus.

    The provincial government announced tax relief package to fight COVID-19 through a notification issued on April 02, 2020.

    According to a notification issued by Punjab Revenue Authority (PRA) the tax exemption has been granted through amendments brought into the Second Schedule to the Punjab Sales Tax on Services Act, 2012.

    The PRA said that zero percent without input tax adjustment has been allowed to hotels, motels and guest houses. However, this exemption has been granted to non-corporate, non-franchise and non-chain business. Meanwhile, 16 percent sales tax on service shall remained applicable for others.

    The zero percent tax without input tax adjustment has also been allowed to:

    Marriage halls and lawns (by whatever name called) including pandal and shamiana services.

    Catering services (including all ancillary / allied services such as floral or other decoration, furnishing of space whether or not involving rental or equipment and accessories).

    However, 16 percent sales tax on services shall applicable on clubs including race clubs and their membership services including services, facilities or advantages, for a subscription or any other amount to their member.

    For life insurance and health insurance businesses, the PRA announced zero percent without input tax adjustment. While, sixteen percent of gross minimum paid shall be applicable for other insurance services.

    Zero percent tax without input tax adjustment has been granted to services provided by digital platform. But the rate of 16 percent shall remain applicable for others.

    The following services have been allowed zero percent sales tax on services without input tax adjustment under serial number of Second Schedule:

    14. Construction services and services provided by contractors of building (including water supply, gas supply and sanitary works), roads and bridges, electrical and mechanical works (including air conditioning), horticultural works, multi-discipline works (including turn-key projects) and similar other works

    18. Services provided for personal care by beauty parlors, salons, clinics, slimming clinics, spas (including saunas, Turkish baths and Jacuzzi) and similar other establishments

    24. Services provided by other consultants (by whatever name called or treated, whether as consultant or otherwise) including human resource and personnel development services, exhibition or convention services[including provision of space, equipment, accessories and other allied services], event management services (whole range and variety of their services regardless of separate or individual classification thereof), valuation services, evaluation services (including competency and eligibility testing services), certification, verification and equivalence services, market research services, marketing or sales services (including marketing agencies and on line marketing or sales services), surveyors services, training or coaching services (other than general education services) and credit rating services.]

    25. Services provided by tour operators[and travel agents including all their allied services or facilities] (other than Hajj and Umrah).

    32. Services provided by property dealers[and realtors].

    35. Services provided in respect of rent-a-car[(including renting of all categories of vehicles meant for transportation of persons)

    36. Services provided by car/automobile dealers

    43. Services provided in specified fields such as health care, gym, physical fitness, indoor sports, games,[amusement parks, arcades and other recreation facilities,]and body or sauna massage etc.

    44. Services provided by laundries and dry cleaners

    45. Services provided by cable TV operators.

    66. Services in respect of treatment of textile, leather but not limited to Dyeing services, Edging and cutting, cloth treating, water proofing, Embroidery, Engraving, Fabric bleaching, Knitting, Leather staining, Leather working, Pre-shrinking, Color separation services, pattern printing and shoe making services.

    67. Apartment house management, real estate management and services of rent collection.

    68. (i) Medical consultation/ visit fee exceeding Rs.1,500per consultation/ visit of doctors, medical practitioners and medical specialists.(ii) Bed/ room charges of hospitals exceeding Rs.6,000/-per day per bed / room.

    The PRA said that the notification shall remain effective for a period from its publication till June 06, 2020 (both days inclusive) and on and from July 01, 2020, the amendments shall cease to have effect and the position obtaining prior to this notification shall stand restored.

  • FBR issues SROs for reducing rate of duty, taxes

    FBR issues SROs for reducing rate of duty, taxes

    ISLAMABAD: The Federal Board of Revenue (FBR) has issued concessionary Statutory Regulator Orders (SROs) for reduction in duty and tax rate for import of pulses and edible oil/seeds.

    The FBR issued two different SROs i.e. SRO 287(I)/2020 and SRO 288(I)/2020 to allow concession of duty and taxes on domestic supply and import of goods.

    Through SRO 287(I)/2020 the government has allowed exemption from withholding income tax on import of pulses till June 30, 2020.

    Similarly, through SRO 288(I)/2020 the FBR also withdrew additional customs duty imposed on import of pulses. This additional customs duty shall not be levied till June 30, 2020.

    Through SRO 287(I)/2020 the rate of tax under Section 153 shall be at 1.5 percent in case of a person, other than a company, as a recipient of payment for goods supplied to Utility Stores Corporation of Pakistan. The tax rate shall be applied on the gross amount of payment in respect of supply of tea, spices, salt, dry milk, sugar, pulses, wheat flour and ghee for the period commencing from the date of issuance of the notification till June 30, 2020.

  • Nausheen Amjad appointed FBR chairperson

    Nausheen Amjad appointed FBR chairperson

    ISLAMABAD: Ms. Nausheen Javaid Amjad, a BS-22 officer of Inland Revenue Service (IRS) has been appointed as the chairperson of Federal Board of Revenue (FBR) and a notification will be issued shortly, sources said on Monday.

    Ms. Nausheen has been appointed as the chief of revenue body on the recommendations of senior tax officers. A vacuum was created after Shabbar Zaidi went on leave for an indefinite period.

    She was serving as acting chairperson since January 31, 2020 after Shabbar Zaidi was granted leave on health grounds.

    Last week a summary for the cabinet was sent for the appointment of FBR chairman.

    Selection Committee for selection of senior officers has unanimously recommended that Ms. Nausheen Javaid Amjad presently posted as Member (Admin) FBR may be appointed as Chairperson FBR.

    Syed Muhammad Shabbar Zaidi, Chartered Accountant, was appointed as Chairman FBR, on May 10, 2019 for a period of two years, on honorary / pro bono basis.

    In view of the above, Establishment Division proposed the following:

    1. The honorary / pro bono appointment of Syed Muhammad Shabbar Zaidi, as Chairman FBR may be terminated with immediate effect.

    2. Ms. Nausheen Javaid Amjad (BS-22/IRS) presently posted as Member (Admin), may be transferred and appointed as chairperson FBR with immediate effect.

  • FBR extends suspension of customs officials

    FBR extends suspension of customs officials

    ISLAMABAD: Federal Board of Revenue (FBR) has extended the suspension period for further three months in case of two customs officials.

    Through a notification, the FBR extended the suspension period of the following inspectors BS-16 of Model Customs Collectorate (Enforcement and Compliance), Lahore for further period of three months with effect from March 30, 2020:

    01. Muzaffar Hussain, Inspector

    02. Khalid Pervaiz Bhutta, Inspector

    Both the customs officials were suspended on December 30, 2019 for inefficiency and misconduct.

  • Immunity under Section 111 is Tax Amnesty

    Immunity under Section 111 is Tax Amnesty

    KARACHI: Granting immunity from Section 111 of Income Tax Ordinance, 2001 is an amnesty, senior tax officials at Federal Board of Revenue (FBR) said. This section of the ordinance deals with unexplained income or assets. This section is powerful tool against concealed or black money.

    This was made part to the ordinance as deterrence against tax evasion. However, respective governments frequently granted immunity from this section to classes of persons to whiten their ill-gotten money at the cost of genuine taxpayers.

    PTI’s ruling government, which was very vocal against amnesty schemes and its chairman and sitting Prime Minister Imran Khan in the past on many occasion vowed to tighten noose around tax evaders instead giving such amnesties.

    In contrast the PTI government in its less than two years granted a general amnesty in 2019 and now is going to grant blanked amnesty to construction sector despite realizing it was parking lot for black money.

    It is lamentable the ministry of finance late last month issued Medium Term Budget Strategy Paper for year 2020-2023 in which it is clearly written: “Amnesty schemes will no longer be offered, and exemptions will be curtailed.”

    Prime Minister Imran Khan on April 03, 2020 announced a package for construction industry and said: “those investing in the construction sector during the year 2020, would not be asked any queries about the source of their income.”

    The story not ends here as the government is going beyond and reverting its decision and announced a fixed tax regime for builders and developers. The fixed tax regime is disaster for taxation system and in the last budget the government itself reinstated minimum tax regime in order to realize income tax from true income.

    The Medium Term Budget Strategy Paper 2020/2023 also pointed out eliminating the final tax regime. “Gradual phasing out of Final Tax Regime will help in taxing real income,” it added.

    Prior to Finance Act, 2019, persons involved in certain transactions were not required to pay tax on their actual income. Instead, the tax collected or deducted on such transactions was treated as their final tax liability.

    “Since the tax deducted was final tax, therefore, such persons were not subjected to detailed scrutiny through audit,” according to Income Tax Circular 09 of 2019.

    It further said the actual tax potential from such transactions is not realized due to presence of final tax regime.

    Tax experts believed that the government was considered only one sector for granting amnesty and allowing immunity from questioning source of income. Granting such amnesty to a particular sector is against fundamental right and may be challenged in the court of law.