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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.

  • FBR simplifies tax rules to facilitate SMEs

    FBR simplifies tax rules to facilitate SMEs

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday issued simplified tax rules for facilitation of small and medium enterprises (SMEs).

    FBR has changed the rules to facilitate Small and Medium Enterprises to enhance exports through Notification No. 1002(I)/2019 dated 06.09.2019 which has introduced amendments in original Notification 327(I)/2008 dated 28.03.2008.

    This is in line with the directives of the Prime Minister of Pakistan to simplify the tax laws and to automate the business processes to bring transparency in the system.

    In order to implement this vision, FBR under the leadership of Shabbar Zaidi, Chairman, has simplify this export scheme and provided new incentives for the business community.

    The Small and Medium Enterprise Units working under this scheme is the largest export promotion scheme presently being used by the export sector.

    Besides introducing amendments in the Export Oriented Units Scheme, the Federal Board of Revenue has also automated these processes in the computerized clearance system WeBOC. This will further reduce human interaction and create business friendly environment.

    According to the details, the retention period of plant, machinery and capital goods is reduced from 10 years to 5 years.

    This will help export industry to keep abreast of latest developments and trendsin the technology.

    If plant, machinery and capital goods are sold or otherwise disposed of before the expiration of five, then different slabs of duty and taxes are introduced whereas after five years disposal of such plant and machinery is allowed without payment of duty and taxes.

    Similarly, disposal mechanism of spares and replacement parts have been provided and now these parts are allowed to be disposed offafter three years.

    To address delays in processing, tiers of administration have been reduced. Now Regulatory Authority is created and the powers have been devolved to Additional Collectorfor grant, revalidate or amend EOU licenses.

    In the new scheme, if there are any problems, the businessman can approach Chief Collector of Customs for redressal of their grievances.

    In order to alleviate the burden of getting the analysis card issued from Input Output Coefficient Organization (IOCO) or Engineering Development Board (EDB) against each license, now if ratio in the analysis certificate is similar to the ratio determined in the previous year, then the Regulatory Authority will issue the license without seeking recommendations from IOCO/EDB.

    Moreover, the provision for issuance of the provisional analysis certificate has also been provided in the Export Oriented Unit Rules in case of delay caused by IOCO/EDB so that the processes of the Export Oriented Units may not get hurt.

  • Prime minister directs FBR to monitor officials during market visits

    Prime minister directs FBR to monitor officials during market visits

    ISLAMABAD: Prime Minister Imran Khan on Thursday directed Federal Board of Revenue (FBR) to monitor its officials during their visit to different markets.

    Chairing a briefing on the performance and reforms in the FBR, the prime minister directed the revenue body to ensure the on-spot-recording of all of their officials interactions during visits to different markets.

    The prime minister said the elimination of corruption from the FBR and its reformation was the government’s priority.

    The revival of public trust in the FBR would also help broaden the tax net, he believed, said a PM Office statement.

    Briefing the prime minister about the performance of the FBR during the previous fiscal year, Chairman FBR Shabbar Zaidi said the board had collected Rs 579 billion revenue till August of the current fiscal, witnessing an increase by 14.65 percent.

    It was informed that this year, the number of filers had also increased by more than 783,000 taking the total number of the filers from 1,514,817 in 2017 to 2,561,099 this year.

  • Procedure to get income tax registration for return filing

    Procedure to get income tax registration for return filing

    KARACHI: The income tax return filing by salaried persons, business individuals and Association of Persons (AOPs) is due on September 30, 2019. In order to file return one should get income tax registration.

    Following is the procedure for obtaining income tax registration as issued by the Federal Board of Revenue (FBR).

    The first step of filing your Income Tax Return is to register yourself with Federal Board of Revenue (FBR).

    For Income Tax Registration Individual can register online through Iris Portal

    Whereas, the principal officer of AOP and Company needs to visit Regional Tax Office (RTO)

    Taxpayer Registration basics

    Some important facts about Registration

    An individual, a company and an association of persons (AOP) or foreign national shall be treated as registered, when they are e-enrolled on the Iris portal.

    E-Enrollment with FBR provides you with a National Tax Number (NTN) or Registration Number and password.

    In case of individuals, 13 digits Computerized National Identity Card (CNIC) will be used as NTN or Registration Number.

    NTN or Registration Number for AOP and Company is the 7 digits NTN received after e-enrollment.

    These credentials allow access to Iris portal, the online Income Tax system, which is only way through which online Income Tax Return can be filed.

    Requirements before Registration

    An individual needs to ensure that the following information is available before starting e-enrollment.

    Requirements of e-enrollment for an individual are as follows:

    CNIC/NICOP/Passport number

    Cell phone number in use

    Active e-mail address

    Nationality

    Residential address

    Accounting period

    In case of business income

    business name

    business address

    Principal business activity

    Name and NTN of employer in case of salary income

    Address of property in case of property income

    Principal Officer of Company and AOP needs to ensure that the following information is available before starting e-enrollment

    Following particulars are required for registration:

    Name of company or AOP

    Business name

    Business address

    Accounting period

    Business phone number

    E-mail address

    Cell phone number of principal officer of the company or AOP

    Principal business activity

    Address of industrial establishment or principal place of business

    Company type, like public limited, private limited, unit trust, trust, NGO, society, small company, modaraba or any other

    Date of registration

    Incorporation certificate by Securities and Exchange Commission of Pakistan (SECP) in case of company

    Registration certificate and partnership deed in case of registered firm

    Partnership deed in case firm is not registered

    Trust deed in case of trust

    Registration certificate in case of society

    Name of representative with his CNIC or NTN

    Following particulars of every director and major shareholder having 10% or more shares in case of company or partners in case of an AOP, namely:-

    Name

    CNIC/NTN/Passport and

    Share %

    Requirements for Registration of Non-Resident Company having permanent establishment in Pakistan shall furnish the following particulars:

    Name of company

    Business address

    Accounting period

    Phone number of business

    Principal business activity

    Address of principal place of business

    Registration number and date of the branch with the Securities and Exchange

    Commission of Pakistan (SECP)

    Name and address of principal officer or authorized representative of the company

    Authority letter for appointment of principal officer or authorized representative of the company

    Cell phone number of principal officer or authorized representative of the company and

    Email address of principal officer or authorized representative of the company

    Non-Resident Company not having permanent establishment in Pakistan shall furnish the following particulars:

    Name of company

    Business address in the foreign country

    Name and nationality of directors or trustees of the company

    Accounting period

    Name and address of authorized representative of the company

    Authority letter for appointment of authorized representative of the company

    Cell phone number of authorized representative of the company

    Email address of authorized representative of the company

    Principal business activity and

    Tax Registration or incorporation document from concerned regulatory authorities of the foreign country

    Registration process

    Online Registration

    Online registration is available only for:

    Individual and not for Association of Person or Company;

    Before starting online registration, the Taxpayer must have:

    Read User Guide;

    A computer, scanner and internet connection;

    A cell phone with SIM registered against their own CNIC;

    A personal email address belonging to them;

    Scanned pdf files of:

    Certificate of maintenance of personal bank account in his own name;

    Evidence of tenancy / ownership of business premises, if having a business;

    Paid utility bill of business premises not older than 3 months, if having a business.

    Online registration is available at Iris

    Registration at Facilitation Counters of Tax Houses

    Registration at Facilitation Counters of Tax Houses is available for all:

    Individual, Association of Person and Company;

    Income Tax and Sales Tax;

    For Registration of an Individual, the Individual must:

    Personally go to any Facilitation Counter of any Tax House;

    Take the following documents with him:

    Original CNIC;

    Cell phone with SIM registered against his own CNIC;

    Personal Email address belonging to him;

    Original certificate of maintenance of personal bank account in his own name;

    Original evidence of tenancy / ownership of business premises, if having a business;

    Original paid utility bill of business premises not older than 3 months, if having a business.

    For Registration of an AOP, anyone of the Members / Partners must:

    Personally go to any Facilitation Counter of any Tax House

    Take the following documents with him:

    Original partnership deed, in case of Firm;

    Original registration certificate from Registrar of Firms, in case of Firm.

    CNICs of all Members / Partners;

    Original letter on letterhead of the AOP signed by all Members / Partners, authorizing anyone of the Members / Partners for Income / Sales Tax Registration;

    Cell phone with SIM registered against his own CNIC but not already registered with the FBR;

    Email address belonging to the AOP;

    Original certificate of maintenance of bank account in AOP’s name;

    Original evidence of tenancy / ownership of business premises, if having a business;

    Original paid utility bill of business premises not older than 3 months, if having a business.

    For Registration of a Company, the Principal Officer must:

    Personally go to any Facilitation Counter of any Tax House

    Take the following document with him:

    Incorporation Certificate of the Company;

    CNICs of all Directors;

    Original letter on letterhead of the company signed by all Directors, verifying the Principal Officer and authorizing him for Income Tax / Sales Tax Registration;

    Cell phone with SIM registered against his own CNIC but not already registered with the FBR;

    Email address belonging to the Company;

    Original certificate of maintenance of bank account in Company’s name;

    Original evidence of tenancy / ownership of business premises, if having a business;

    Original paid utility bill of business premises not older than 3 months, if having a business.

    Modification of Income Tax Registration

    Income Tax Registration of a person can be modified after discovering any change or omission in any information, particulars, data or documents associated with the registration of the person.

    Person would have to file a modification form of registration in Iris to change the relevant particulars.

    The Commissioner will grant or refuse the requested modification of the person after examining the modification form of registration and making any inquiry deemed necessary.

    Person can within thirty (30) days of the decision regarding modification file a representation before the Chief Commissioner.

    Chief Commissioner will decide on the merits of the representation filed.

  • Pakistan, Saudi Customs to exchange intelligence based information

    Pakistan, Saudi Customs to exchange intelligence based information

    ISLAMABAD: The customs authorities of Pakistan and Saudi Arabia have agreed to further explore intelligence based information to strengthen mutual cooperation.

    A five-member delegation of Saudi Customs Authority visited Federal Board of Revenue (FBR), to discuss various matters of mutual interest and assistance, a statement said on Tuesday.

    The Saudi Customs delegation was headed by Muhammad AlNuaim, Deputy Governor of Security Affairs. Pakistani side was headed by Shabbar Raza Zaidi, Chairman, FBR.

    Muhammad Javed Ghani, Member (Customs-Policy), Jawwad Uwais Agha (Member-Operations) and other senior officers of Pakistan customs also participated in the meeting.

    Both sides shared their experiences in law enforcement domain and further explored avenues of future cooperation in following areas of mutual interest:

    1. Exchange of Information, on real time basis, between both countries regarding values of goods originating from both countries;

    2. Exchange of intelligence based information to effectively control illicit flow of currency;

    3. Development of authorized economic cooperation program between both countries;

    4. Profiling of advance passenger information;

    5. Cooperation between Saudi Customs and Pakistani Customs in order to arrest the senders and recipients of drugs;

    6. Exchange of post seizure and arrest investigations;

    7. Designation of contact officers for mutual cooperation;

    8. Capacity building for automation/harmonization of customs procedures.

    It was underscored that the menace of narcotics, smuggling and under invoicing/over invoicing are the primary sources of illicit financial flows (IFFs) which is inherently a global phenomenon.

    It was mutually agreed that no country can cope with these cross border challenges without ensuring international cooperation.

    Therefore, there is a dire need for both brotherly countries to support each other by all possible means of cooperation through international forums as well as Customs to Customs Cooperation under Mutual Assistance Agreements.

    AlNuaim expressed that the Saudi government give great value to its brotherly relations with the government of Pakistan.

    He informed that the Saudi government has recently introduced new monetary limits on currency which so far are not well known to the visitors from Pakistan.

    He requested to share this information by launching a public awareness campaign in this regard.

    Javed Ghani, Member (Customs-Policy) ensured cooperation and informed that the control of currency smuggling is one of the prime priorities of present regime.

    Therefore, declaration of currency has now been made mandatory and FBR has taken various legal and administrative actions to improve interdictory regime against currency smuggling.

    Jawwad Uwais Agha gave brief details of the National Single Window (NSW) and told the delegates that this initiative provides a complete framework for intra agency cooperation in Pakistan.

    The delegation was apprised that at national level, Risk Based Mitigation Secretary (RBMS) has been evolved after taking due input from all stake holder agencies including Federal Investigation Agency (FIA), Anti Narcotics Force, Airport Security Force and Pakistan Customs.

    Under RBMS, a totally new institutional apparatus has been setup with a dedicated Directorate, namely, Cross Border Currency Movement (CBMC) within the Directorate General of Customs Intelligence & Investigation to address the risks of cash smuggling.

    This measure has turned out very successful as in FY 2018-2019 total 487 million rupees were seized under its intelligence sharing against 157 million rupees in the FY 2017-2018.

    The Saudi delegation appreciated these efforts and showed keen interest in the project of National Single Window, National Targeting Centre and Advance Passenger Information Systems (APIS).

    Both sides unanimously agreed that there exists huge scope for enhanced cooperation between both the countries which will help them to address a wide range of problems originating from currency smuggling, narcotics and mis-declarations.

  • User manual in Urdu language for income tax registration

    User manual in Urdu language for income tax registration

    KARACHI: Federal Board of Revenue (FBR) has issued user manual in Urdu language for income tax registration.

    The FBR anticipates large number of new taxpayers will file tax returns for tax year 2019.

    The user guideline will help new return filers to get registration in steps.

    Following is the registration procedure for new taxpayer:

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  • Floating rate of PIBs to be auctioned: SBP

    Floating rate of PIBs to be auctioned: SBP

    KARACHI: State Bank of Pakistan (SBP) on Tuesday announced that floating rate of Pakistan Investment Bonds (PIBs) will be auctioned.

    The central bank sand that it had issued detailed guidelines on May 07, 2018 through a notification under which details of Floating Rate PIBs have been specified.

    Government of Pakistan (GOP) has decided that Floating Rate PIBs may also be auctioned as re-opening of previously issued Floating Rate PIBs.

    The re-opening auction mechanism of Floating Rate PIBs will be as under:

    Re-opening auctions of Floating Rate PIBs will be conducted through uniform price competitive bidding auction process.

    PDs will submit competitive bids in terms of price (up to four decimal points).

    The cut-off price, at which GOP decides to accept bids, in the re-opening auction will apply uniformly to all accepted bids.

    Coupon rate on Floating Rate PIBs offered in re-opening auctions will be the same as determined in the first auction of respective issue of the bond and reset at the start of each coupon period, in accordance with instructions issued vide DMMD Circular no 16 of 2019.

    The successful bidders will make the settlement on settlement date at the amount calculated as per accepted price plus accrued interest for the number of days lapsed since start of the coupon period based on respective coupon rate.

    All other auction rules and procedures will remain the same.

    All other instructions on the subject will remain unchanged.

  • Countdown begins for tax year 2019 return filing

    Countdown begins for tax year 2019 return filing

    KARACHI: Federal Board of Revenue (FBR) has given less than a month to taxpayers for filing income tax return and wealth statements for tax year 2019.

    The FBR on Monday issued finalized income tax return forms form salaried persons, business individuals and Association of Persons (AOPs).

    The last date for filing income tax returns and wealth statement for such segments of taxpayers is September 30, 2019.

    The last date for filing of income tax returns by salaried persons has been amended through Finance Act, 2019 to September 30, 2019 from August 31, 2019.

    These taxpayers have a time of 28 days to comply with the statutory requirement under Section 118 of Income Tax Ordinance, 2001.

    Corporate entities having accounting year ending any time between the first day of January and the thirtieth day of June are required to file income tax returns on or before the thirty-first day of December next following the end of the tax year to which the return relates.

    In any other case, on or before the thirtieth day of September next following the end of the tax year to which the return relates.

    However, the corporate returns are still in draft format and FBR likely to issue finalized return form for companies by this week.

    According to Income Tax Ordinance, 2001 every resident taxpayer being an individual filing a return of income for any tax year shall furnish a wealth statement and wealth reconciliation statement for that year along with such return:

    It also explained that every member of an association of persons is also required to furnish wealth statement and wealth reconciliation statement for the year along with return of income of the association.

    For tax year 2019, every resident taxpayer being an individual having foreign income of not less than ten thousand United States dollars or having foreign assets with a value of not less than one hundred thousand United States dollars shall furnish a statement, hereinafter referred to as the foreign income and assets statement, in the prescribed form and verified in the prescribed manner giving particulars of—

    (a) the person’s total foreign assets and liabilities as on the last day of the tax year;

    (b) any foreign assets transferred by the person to any other person during the tax year and the consideration for the said transfer; and

    (c) complete particulars of foreign income, the expenditure derived during the tax year and the expenditure wholly and necessarily for the purposes of deriving the said income.

    Under Section 114 of Income Tax Ordinance, 2001 following persons are required to furnish a return of income for a tax year, namely:–

    (a) every company;

    (ab) every person (other than a company) whose taxable income for the year exceeds the maximum amount that is not chargeable to tax under this Ordinance for the year;

    (ac) any non-profit organization as defined in clause (36) of section 2;

    (ad) any welfare institution approved under clause (58) of Part I of the Second Schedule;

    (b) any person not covered by clause (a), (ab), (ac) or (ad) who,—

    (i) has been charged to tax in respect of any of the two preceding tax years;

    (ii) claims a loss carried forward under this Ordinance for a tax year;

    (iii) owns immovable property with a land area of two hundred and fifty square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;

    (iv) owns immoveable property with a land area of five hundred square yards or more located in a rating area;

    (v) owns a flat having covered area of two thousand square feet or more located in a rating area;

    (vi) owns a motor vehicle having engine capacity above 1000 CC;

    (vii) has obtained National Tax Number; or

    (viii) is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees five hundred thousand;

    (ix) is a resident person registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan; or

    (x) every resident person being an individual required to file foreign income and assets statement under section 116A.

    (1A) Every individual whose income under the head ‘Income from business’ exceeds rupees three hundred thousand but does not exceed rupees four hundred thousand in a tax year is also required to furnish return of income from the tax year.

    (2) A return of income –

    (a) shall be in the prescribed form and shall be accompanied by such annexures, statements or documents as may be prescribed;

    (b) shall fully state all the relevant particulars or information as specified in the form of return, including a declaration of the records kept by the taxpayer;

    (c) shall be signed by the person, being an individual, or the person’s representative where section 172 applies;

    (d) shall be accompanied with evidence of payment of due tax as per return of income;

    (e) shall be accompanied with a wealth statement as required under section 116; and

    (f) shall be accompanied with a foreign income and assets statement as required under section 116A.

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  • FBR issues first batch of e-refund

    FBR issues first batch of e-refund

    ISLAMABAD: The first payment through Fully Automated Sales Tax e-Refund (FASTER) module, against the refund claims for the tax period July, 2019, has been made on Monday September 02, 2019, and the State Bank of Pakistan has confirmed the credit of the refund amount in the bank account of the claimant, said a press release issued by Federal Board of Revenue (FBR).

    It is highlighted that only nine refund claims of five exporter-oriented sectors were received by Friday, the 30th August, 2019, and the payment has been made against the claim that was cleared by the risk management system of FASTER module.

    It is added that the number of refund claims received is not significant. FBR encourages the exporters to submit their claims in form Annex-H at the earliest so that their claims can be processed and paid.

    In consequence of rescission of SRO 1125(I)/2011 dated 31.12.2011, which allowed zero-rating of inputs of five export-oriented sectors, Federal Board of Revenue had committed with the exporters of the said sectors, i.e. textiles, leather, carpets, sports goods and surgical goods, that refunds shall be paid to them within 72 hours of filing of refund claim.

    FBR has earlier clarified that submission of Annex-H, which is a form in the monthly sales tax return, shall be treated as submission of refund claim.

    For this purpose, FBR has developed a new IT module known as FASTER (Fully Automated Sales Tax e-Refund) and the same has been operationalized.

    This module shall process claims of exporters of five export-oriented sectors for the tax period July, 2019, and onwards.

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  • FBR issues final return forms tax year 2019 for salary persons, business individuals

    FBR issues final return forms tax year 2019 for salary persons, business individuals

    The Federal Board of Revenue (FBR) has taken a significant step towards concluding the tax assessment process for the year 2019 by issuing the final return forms for salaried individuals, business entities, and Associations of Persons (AOPs).

    (more…)
  • FBR explains treatment of duty, taxes on goods imported under foreign trade agreements

    FBR explains treatment of duty, taxes on goods imported under foreign trade agreements

    The Federal Board of Revenue (FBR) has provided comprehensive details regarding the taxes for goods imported under trade agreements with foreign countries.

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