Islamabad, Pakistan – In a bid to provide relief to businesses during these challenging times, the Federal Board of Revenue (FBR) announced on Tuesday the extension of the last date for the payment of sales tax and federal excise duty (FED) for the month of February 2020.
(more…)Category: Taxation
Stay updated on taxation news, tax laws, FBR policies, compliance, audits, income tax, sales tax, and fiscal developments in Pakistan.
-
FBR appeals taxpayers pay duty, taxes to help government fight against coronavirus
The Federal Board of Revenue (FBR) has issued a call to taxpayers, urging them to pay their duties and taxes promptly to support the government’s efforts in combating the coronavirus pandemic. This appeal, made in a statement on Tuesday, emphasizes the crucial role of tax revenue in bolstering the country’s resources during these challenging times.
(more…) -
ECC approves Rs75 billion for repayment of tax refunds
ISLAMABAD: Economic Coordination Committee of (ECC) the Cabinet on Monday approved Rs75 billion for Federal Board of Revenue (FBR) for the repayment of tax refunds.
Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired a special meeting of the ECC, which approved Rs75 billion for FBR to enable them to payback the sales tax and income tax refunds, duty drawbacks and customs duties which is due for the last 10 years.
The amount shall help approximately 676,055 beneficiaries by improving their liquidity position.
ECC also approved the supplementary grant of Rs30 billion to Ministry of Commerce to payback duty drawbacks to textile exporters in the current financial year to improve their liquidity position when their businesses are experiencing a slowdown due to worldwide outbreak of corona epidemic.
The special ECC meeting was met to fulfill the necessary requirements for different relief measures already announced by the Prime Minister for the public due to the ongoing Corona Virus Pandemic.
ECC approved the fiscal stimulus package of Rs1.2 trillion with main components as follows:
ECC approved Supplementary Grant of Rs100 billion for the “Residual/Emergency Relief Fund” in terms of article 84(a) of the constitution of Islamic Republic of Pakistan for provision of funds for mitigating the affect of COVID-19.
The special Package for providing relief to the poor through cash assistance under the Ehsaas Program was also approved by the ECC.
The package shall provide cash grants to 12 million families under the regular “kafalat program” and Emergency Cash Assistance on the recommendation of the district administration.
The assistance will be provided for four months and besides the BISP beneficiaries it will be one time dispensation, the cash will be provided either in one installment of Rs12,000 through Kafalat partner banks i.e Bank Alfalah and Habib Bank Limited after biometric verification or it may be provided in two installments of Rs6000/- each.
The Poverty Alleviation Division was asked to present both options with feasibilities.
The partner banks may be asked to make arrangements through branchless banking networks to disburse cash. Rs 72.9 billion of additional funds through technical supplementary grant would be given to BISP under “Ehsaas Cash Assistance Package in Response to COVID-19” Pandemic.
After Ministry of Industries and Production presented a comprehensive proposals regarding the targeting parameters , implementation mechanism, cash assistance per family per month and financial phasing of the program, ECC approved Rs200 billion of cash assistance for the daily wagers working in the formal industrial sector and who had been laid off as a result of COVID-19 outbreak.
It was estimated that around three million workers will fall in this category and they will have to be paid a minimum wage of Rs.17500 per month.
The estimated cost of this provision for daily wagers comes around to Rs52.5 billion a month.
The provincial labour departments shall ensure the delivery of assistance to the laborers while the provision of funds shall be the responsibility of the federal government.
ECC directed that immediate consultation with the provincial labor departments(mentioned under the provincial rules of business) may be carried out for providing timely assistance to those who are in need.
ECC approved Rs50 billion for Utility Stores Corporation to provide essential food items to the vulnerable section of the society at subsidized rates.
USC has prepared an initial plan to deliver 9 essential food items @ Rs 3000 for a family of 2+4 people through Pakistan Post Foundation Logistics Division.
USC has further planned to procure essential items within 2-3 weeks. It was directed that USC may engage with BISP to obtain data for targeted assistance and again come back to the ECC for a detailed proposal for reaching out to the poor families for the effective use of this package before making any expenditure from this amount.
ECC also allowed to reduce different taxes and duties on import and supply of different food items for alleviating the adverse impact of COVID -19 on different sections of the society.
Rate of advance tax on the import of different pulses was reduced to 0 percent from 2 percent. individuals and associations of persons providing tea, spices, dry milk and salt to USC without a brand name will pay 1.5 percent withholding tax instead of 4.5 percent.
Individuals and AoP receiving payments from USC for supplying ghee, sugar, pulses, and wheat flour shall be charged 1.5 percent withholding tax instead of 4.5 percent earlier. ACD (additional customs duty) @ 2 percent on soya bean oil, canola oil, palm oil and sunflower oil (and on these four oil seeds) has also been exempted.
ECC was briefed SBP is working on payment of claims worth Rs49 billion out of which around 40 billion will be paid by June 2020.
ECC approved supplementary grant of Rs6 billion for Pakistan Railways to meet its expenses. Pakistan Railways has suspended its passenger train services around the country since 19-3-2020.
The approved amount shall be utilized for paying salaries to 70,000 employees, repairs, paying for utilities and performing disinfectant sprays on platforms and inside trains for proving safe journey to the passengers.
Currently Pakistan Railways is earning only 1/6th of its monthly income through coal freight and the rest is suspended.
-
Budget Strategy: No amnesty schemes; individual tax threshold to be lowered for broadening of tax base
ISLAMABAD: The government has prepared budget strategy under which no more amnesty scheme will be offered in future. Meanwhile, the tax threshold to broaden the tax base.
The medium term budget strategy paper 2020/2023 released by the ministry of finance stated that the government will increase the share of direct taxes in revenues by enforcing real-income based income tax, to be achieved by broadening of tax base.
Documentation of the economy to increase taxation in wholesale and retail, real estate and speculation businesses is also a priority. “Amnesty schemes will no longer be offered, and exemptions will be curtailed. Income tax slabs will be rationalised, and thresholds will be lowered to broaden tax base.”
Gradual phasing out of final tax regime will help in taxing real income. Through amendments in tax law, simplification of laws and regulations, and improvement in tax administration, a legal basis will be provided to risk-based audit system.
Taxpayer facilitation measures include awareness campaign and taxpayer education facilitation. Investments in IT based customer relationship management system, support lines, emails and website will be strengthened.
Measures will also be taken to encourage voluntary compliance through facilitation measures and increasing certainty of detection and enforcement of law.
Proper targeted awareness campaign through official media houses, using commercial media means will be carried out.
FBR is effectively using Information Technology support for efficient detection, monitoring and facilitation of the tax regime. Data on foreign bank accounts of Pakistani citizens is being received and analyzed to detect tax evasion.
IT based databank regarding foreign bank accounts will be established. Tracking and tracing system for collection of Federal excises duty on cigarettes has commenced with the issuance of licenses. Electronic monitoring of production and sales of various sectors will also commence in due course of time.
Installation of point-of-sale (PoS) integration on all Tier-I retailers has been enforced since 15 December 2019.The online integration of the prescribed registered persons with PoS will be enforced through effective monitoring. FBR is developing IT strategy for this.
The recently launched app “Tax Asaan” will be improved and more features will be introduced to make it user friendly. Introduction of Corporate Income Tax (CIT) reform will result in fewer exemptions and crediting schemes.
The practice of issuing new preferential tax treatments or exemptions will be discontinued so that tax exemptions as a tool for philanthropy and social, investment and export promotion are discouraged.
Exemptions will be phased out except basic food and nutrition items and provisions of health sector. Harmonization between Federal and Provincial taxation regimes is to be achieved by removing duplication of taxation and introducing uniform laws and procedures.
The constitution assigns income taxes (except for agriculture income), the General Sales Tax on goods, customs duties, federal excises, and the capital gains tax to the federal level to be collected by the Federal Board of Revenue (FBR).
While, GST on services, tax on professions, Agricultural Income Tax, Motor Vehicle Tax, Urban Immovable Property Tax, and other taxes related to real estate (e.g. stamp duty, Capital Value Tax) are assigned to the provinces.
This arrangement fragments Pakistan into five tax jurisdictions in the services sector, with consequences such as double taxation, cascading effects of taxes and high compliance burden.
Work on a unified tax portal with standardised forms that will enable taxpayers to file and pay federal and provincial taxes with less cost and compliance time will be completed.
In 2020-2021, FBR will be working on removal of structural anomalies in the taxation regime such as anomalies from SROs (Statutory Regulatory Orders) / aligning certain SROs with the main statute and Rules, Simplified tax returns and forms.
-
FBR seeks exemption for its officials during coronavirus lockdown
ISLAMABAD: Federal Board of Revenue (FBR) on Monday sought exemption for its officials during lockdown to prevent spread of coronavirus pandemic.
In a circular the FBR said that in view of the COVID-19 pandemic, the federal and provincial governments had introduced various measures to contain the spread of the virus, which included lockdowns across the country.
The FBR said that the personnel of essential services and few other agencies had been exempted from these lockdowns.
FBR, in this last quarter of the financial year, through its multiple field formations (Inland Revenue/Customs) across the country is making all out efforts to consolidate and ensure maximum revenue collection, the FBR said.
Needless to say, money/funds are urgently required by the federal and provincial governments to wage this war against the coronavirus pandemic.
The revenue body said in these circumstances, it is imperative that all field offices of FBR, engaged in revenue collection remain open and are fully operational.
However, due to the lockdowns enforced through the country, the officers and staff are unable to reach their offices and perform their duties.
This has therefore, critically effected the operational preparedness of this organization and is also adversely affecting the revenue collection.
The FBR asked all relevant federal and provincial agencies to exempt from lockdown the officers/staff of FBR who are in possession of permission letters from their respective chief commissioner-IR / Chief Collector Customs/Heads of Operational offices to reach their offices in order to perform their duties.
-
FBR extends time limit to 25 days for GD filing
KARACHI: Federal Board of Revenue (FBR) on Monday extended time limit for filing goods declaration to facilitate traders and importers, who were facing difficulties due to lockdown.
The FBR extended the time limit for filing of goods declaration from the existing 10 days of arrival of goods to further 15 days (total 25 days) for all Import General Manifest (IGMs) filed between March 17, 2020 and April 07, 2020.
The FBR said that the customs collectorates across the country were operating normally, however, on account of the ongoing lockdown by provincial governments to address the prevailing pandemic of COVID-19, the importers and clearing agents were facing hardship in filing of goods declaration within the time limit prescribed under Customs Act, 1969.
The consequent penalty on this account is causing undue hardship to the traders as the circumstances for late filing, which was beyond their control.
The FBR said that it had received requests from the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Karachi Chamber of Commerce and Industry (KCCI) for extension in the time limit for filing of goods declaration.
-
Commissioner (Appeals) barred from issuing adverse orders
LAHORE: Punjab Revenue Authority (PRA) has barred commissioner appeals from issuing any adverse order against taxpayers, who failed to appear due to lockdown for prevention of coronavirus.
The PRA in an office order dated March 25, 2020 said that in view of the prevailing circumstances in the wake of coronavirus spread, no adverse orders may be passed due to non-appearance of any party, lawyer or authorized representatives, as the case may be, fixed for hearing before the Commissioner (Appeals), Punjab Revenue Authority with immediate effect and till further orders.
In another office order, the PRA said that in order to facilitate the taxpayers, lawyers, chartered accountants and tax consultants/authorized representatives because of the closure of office due to coronavirus outbreak, it has been urged upon the taxpayers to file their appeals before the Commissioner (Appeals), Punjab Revenue Authority electronically.
For this purpose, the taxpayers may submit their appeals through emails at [email protected]
The taxpayers have also been advised that the appeals may be filed/sent through courier or mail as well.
-
Date for sales tax payment may not to be extended
ISLAMABAD: Federal Board of Revenue (FBR) has said it will not extend the date for sales tax payment beyond March 31, 2020.
The FBR spokesman said that the date was extended for duty and tax payment in order to facilitate taxpayers amid outbreak of coronavirus and subsequent lockdown.
Through a notification on March 18 the FBR extended the last date for submission of sales tax and federal excise return for the tax period of February 2020.
The FBR extended the date of submission of sales tax and federal excise return up to March 25 for the tax period of February 2020, which was due on March 18, 2020.
The FBR on March 24 issued another circular to further extend the date for submission of sales tax and federal excise returns along with annexures for the tax period of January 2020 and February 2020.
The FBR allowed extension return filing date for January 202 up to April 15, 2020. This return was due on February 18, 2020 and was extended up to February 28, 2020.
For the month of February 2020, the date for payment of sales tax and federal excise duty has been extended up to March 03, 2020 which was due on March 15, 2020.
The submission of sales tax and federal excise return has been further extended up to April 15, 2020, which was due on March 18, 2020 and it was extended up to March 25, 2020.
-
Customs agents take measures for trade facilitation amid coronavirus lockdown
KARACHI: Karachi Customs Agents Association (KCAA) has taken various measures to facilitate trade during ongoing lockdown related to prevent spread of coronavirus. The managing committee of the KCAA has taken several measures for the redressal of grievances being faced by the members.
(more…) -
FBR may extend date for Tier-1 retailers POS integration
ISLAMABAD: Federal Board of Revenue (FBR) is likely to extend the last date for big retailers to integrate their point of sales (POSs) with the online system of the tax system owing to ongoing lockdown to prevent spread of coronavirus, sources said on Wednesday.
(more…)