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Category: Taxation

Stay updated on taxation news, tax laws, FBR policies, compliance, audits, income tax, sales tax, and fiscal developments in Pakistan.

  • FBR urges return filing for tax broadening

    FBR urges return filing for tax broadening

    ISLAMABAD: Federal Board of Revenue (FBR) has urged people to file their income tax returns for broadening of tax base.

    In a tweet on Wednesday, the FBR said that individuals having annual income above Rs400,000 are required to file their income tax returns for tax year 2019.

    The FBR urged that persons having taxable income should play their part to broaden the tax base and become active taxpayers.

    The last date for filing income tax returns for tax year 2019 is January 31, 2020.

    The FBR has already extended the date from September 30, 2019 in order to facilitate the taxpayers in discharging their liabilities.

    The FBR will issue the Active Taxpayers List (ATL) for tax year 2019 on March 01, 2020. This list will carry the names of those taxpayers who file their returns for the said tax year.

    In case of non-filing of returns, taxpayers will liable to pay 100 percent additional withholding tax on various transactions.

  • FBR advised to allow sales tax refunds on local supplies

    FBR advised to allow sales tax refunds on local supplies

    KARACHI: Karachi Tax Bar Association (KTBA) on Tuesday advised Federal Board of Revenue (FBR) to allow sales tax refund to manufacturers making local supplies.

    The tax bar in a letter to FBR suggested in order to promote diversification of exports instead of relying solely on 5 export oriented sectors, you are requested to kindly issue necessary clarification/make necessary amendment to the effect that exporter-cum-manufacturers include all manufactures engaged in local as well export sales.

    The tax bar said that apart from five export oriented sectors, conditional facility for expeditious processing of sales tax refunds through FASTER system has been given to exporter-cum-manufacturers, however, as per Income Tax Circular no. 10 of 2008 dated August 27, 2008, the term exporter-cum-manufacturers means those manufacturers whose exports during the preceding year are more than 80 percent.

    The KTBA pointed out that input tax on fixed assets is adjusted against the minimum sales tax liability under section 8B of the Act only incase where other normal input tax [on goods / services] is less than 90 percent of the Output Tax, however, in case any unadjusted / unutilized input tax relating to fixed assets is carried forward to subsequent months than the same is treated at par with normal input tax and not being treated as input tax on fixed assets.

    Therefore it suggested that in order to allow fair treatment of input tax on fixed assets and in order to promote capital intensive investment, kindly direct concerned person to make necessary amendments in online sales tax return portal to treat input tax on fixed assets as part of the input tax on fixed assets even if the same is carried forward to subsequent months.

  • SRB suspends sales tax registration of M/s. Ability Logistics International

    SRB suspends sales tax registration of M/s. Ability Logistics International

    KARACHI: Sindh Revenue Board (SRB) has suspended sales tax registration of M/s. Ability Logistics International for failure to pay taxes and non-compliance of filing monthly returns.

    The SRB said that scrutiny of tax profile of the taxpayers showed that, it had failed to electronically file true and correct Sindh Sales Tax Return for the period October 2012 to December 2019.

    The provincial revenue authority said that the sales tax registration of the company had been suspended with immediate effect.

    The sales tax registration shall be revoked if the taxpayer takes remedial action by January 30, 2020. The remedial action should include to discharge sales tax liability along with default surcharge for the aforementioned periods and shall also deposit the same with the government of Sindh.

    Further, the logistic company is also required to electronically file true and correct monthly sales tax returns for the said tax periods.

    The provincial revenue body said that in case of non-satisfactory response or failure to take remedial measures on or before January 30, 2020, the case shall be further proceeding for cancellation of the registration with the SRB.

  • FBR issues list of software vendors for integrating big retailers’ sales

    FBR issues list of software vendors for integrating big retailers’ sales

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday issued list of vendors providing software for integrating sales of big retailers with the tax machinery.

    The FBR said that the list of vendors who have provided Point of Sales (POS) softwares to those retailers who have integrated their POSs with FBR.

    The list is in alphabetical order and the retailers may approach and engage any of them that they find suitable after due diligence.

    Following is the list of vendors:

    ABUZAR CONSULTANCY, Karachi, 021-32005755

    AWA SOFTWARE, Karachi, (021) 34973694

    COMPUTER INFORMATION SERVICES PVT LTD, Karachi, 021-34521329

    CONFIZ LIMITED, Lahore, (042) 35717906, Zainulabidin 0321-4711101, Hamid Rasheed 0333-4741004, Faheem Karachi 0322-4566589

    DELTA SOFT, Faisalabad, 041-8721577, 0301 7104466

    DEVELOPER ZONE, Mobile, 0306 5619198

    DYNEXCEL , Faisalabad, (041) 8500733

    EZEE TECH TARIQ JAMIL, Mobile, 0321-4012074

    EZI SOLUTION, Mobile, 0321 4598991

    G. Tech, Karachi , Muhammad Ahsan Naeem 0323-8023327

    GENTEC, Karachi, (021) 34167766

    HISAAB.PK, Mobile, 0300 8296954

    INTELLECT SOLUTIONS, Karachi, 021-35651576-7

    IPOS, Mobile, 0333 5413847

    ITRESOURCES, Mobile, 0306 2450000

    ITSTECHWORLD.COM, Mobile, 0321-647-2001

    LUMENSOFT, Lahore, (042) 111 290 290, Abdul Jabbar 0346-7999797

    MAALIK CREATIVE ENGINEERS, Islamabad/RWP, (051) 2204040

    MAALIK CREATIVE ENGINEERS, Islamabad/RWP, (051) 2204040

    MAISON CONSULTING, Mobile, 0321 8450197

    MANTAQ SYSTEMS, Lahore, (042) 32116687

    MB COMMUNICATION, Islamabad/RWP, (051) 5700111

    MIANTECH, Mobile, 0311 5679955

    MILESTONE, Karachi, (021) 35148294

    MILLENIUM SOFTWARE, Karachi, 02132582001-4

    MTECH, Mobile, 0306 8512354

    NETTECH, Islamabad/RWP, 051-8356632

    NETTECH TECHNOLOGY, Islamabad/RWP, 051-8356632

    NUBIT SOFTWARE (PVT) LTD, Karachi, (021) – 32428197

    PAKISTANWEBHOST, Mobile, 0334 5662119

    RETAIL PRO INTERNATIONAL, LLC, Mobile, 0345-888-7875

    Sidat Haider Murshid Asociates, Lahore, 042-35789725

    SOFTWORLD, Mobile, 0321 9436268

    SOLUTION XPERT, Mobile, 0333 8112161

    SULEMAN SWEETS, Mobile, 0333 8112161

    System Plus, Lahore, (042) 37184805

    SYSTEMS LIMITED, Lahore, (042) 111 797 836, Imran Khan 0313-5289270

    TECHNOSYS, Mobile, 0334 396 8215

    TECHNOSYS , Karachi, (021) 34325117

    TMR Consulting Pvt Ltd, Islamabad, Munawar 0324-4235028

    TRIOBYTE, Mobile, 0333 3490585

    UNICON INTERNATIONAL PVT LTD., Karachi, (021) 5071161-65

    UNIVERSAL NETWORK SYSTEMS, Karachi, (021) 34327917

    WASEELA, Islamabad/RWP, (051) 111 962 962

    YEHPOS, Islamabad/RWP, 051-8356632

    YY TECH, Karachi, (021) 35346500

  • FBR warns legal action against non filers

    FBR warns legal action against non filers

    KARACHI: Federal Board of Revenue (FBR) on Monday warned persons having taxable income to file their annual returns for tax year 2019 otherwise tax authorities will initiate legal proceedings.

    The FBR issued reminder for persons having taxable income but so far unable to file their annual returns for tax year 2019.

    The FBR said that the last date for filing income tax returns is January 31, 2020. It said that filing of income tax return is mandatory for all persons with annual income of Rs400,000 or more.

    The tax body warned that in case individual/company fails to file their returns by due date, the FBR will assess the applicable tax without serving any notice.

    It highlighted the disadvantages of not filing or late filing the returns as those persons would not be part of Active Taxpayers List (ATL).

    The FBR said that non appearance on ATL the withholding tax will be charged at double rates.

    Further, the FBR will initiate legal action that may result into imprisonment of one to three years. Besides, fine will be charged on late submission of income tax returns.

    The FBR explain the procedure to file income tax returns. It said that an individual should login to IRIS with username and password; click on declaration tab after login; select tax year; select the form for relevant category; click on verification after entering details such as salary slip, bank statement, utility bill, tax statement, expenditure and assets etc.

  • FBR directs education institutions to provide details of persons paying annual fee above Rs200,000

    FBR directs education institutions to provide details of persons paying annual fee above Rs200,000

    ISLAMABAD: Federal Board of Revenue (FBR) has directed educational institutions to provide details of persons paying annual fee above Rs200,000 in next three days.

    Sources in FBR said that educational institutions including schools, colleges, universities, tuition centers, technical institutions etc. had been asked to provide details of parents or individuals paying annual fee above Rs200,000 by January 31, 2020.

    The educational institutions have been directed to provide complete details of persons paying fees, which should include, name, address, CNIC amount of fee and tax deducted/withheld for the tax year 2020.

    The sources said that the educational institutions would provide the details along with their biannual withholding statement due on January 31, 2020.

    They said that under Section 236I of Income Tax Ordinance, 2001 educational institutions are required to collect withholding tax at five percent on gross amount of fee from person paying fee.

    The section read as:

    “236I. Collection of advance tax by educational institutions.— (1) There shall be collected advance tax at the rate specified in Division XVI of Part-IV of the First Schedule on the amount of fee paid to an educational institution.

    (2) The person preparing fee voucher or challan shall charge advance tax under sub-section (1) in the manner the fee is charged.

    (3) Advance tax under this section shall not be collected from a person on an amount which is paid by way of scholarship or where annual fee does not exceed two hundred thousand rupees.

    (4) The term ‘fee’ includes, tuition fee and all charges received by the educational institution, by whatever name called, excluding the amount which is refundable.

    (5) Tax collected under this section shall be adjustable against the tax liability of either of the parents or guardian making payment of the fee.

    (6) Advance tax under this section shall not be collected from a person who is a non-resident and,—

    (i) furnishes copy of passport as an evidence to the educational institution that during previous tax year, his stay in Pakistan was less than one hundred eighty-three days;

    (ii) furnishes a certificate that he has no Pakistan-source income; and

    (iii) the fee is remitted directly from abroad through normal banking channels to the bank account of the educational institution.”

    The rate of collection of tax under section 236I shall be 5 percent of the amount of fee.

  • FBR monitors immovable property transactions to enforce fair market values

    FBR monitors immovable property transactions to enforce fair market values

    KARACHI: Federal Board of Revenue (FBR) is monitoring transactions of immovable properties to check sales and purchases on fair market value, sources told PkRevenue.com.

    The sources said that the FBR had reduced the withholding tax rate to one percent from July 01, 2019 to be collected from purchaser of immovable properties. However, this rate should be two percent in case the buyer is not listed on the Active Taxpayers List (ATL).

    The sources said that the tax offices had been asked to monitor the transaction of immovable properties under the new rates with true declaration of amount.

    The sources said that the FBR was fully aware about the size of undeclared money invested in the real estate business. Therefore, the monitoring was started. However, comprehensive data of buyers and sellers will be provided by withholding agents to the FBR by January 31, 2020.

    The sources said that the withholding agents for immovable transactions are those persons registering, recording or attesting or transfer including local authorities, housing authorities, Housing Society, Co-operative Society and registrar or properties.

    They said that tax offices would start massive crackdown after receiving the data from withholding agents.

    They said that people were not declaring true values of immovable properties at the time of registration or transfer, which was causing massive loss to national exchequer.

    They further said that by concealing the true amount, buyers and sellers were also promoting black economy.

    The sources said that withholding agents would provide details of buyers and sellers, including names, addresses, CNICs, declared value and amount of tax withheld.

    The FBR sources the tax authorities would examine the mode of payment and compare the declared value with the prices prevailed in the open market.

    They said that after conducting examination the tax authorities would ask buyers and sellers of immovable properties to file income tax returns, in case those persons were not in the tax net.

  • FBR chairman praises customs for working professionally

    FBR chairman praises customs for working professionally

    ISLAMABAD: Syed Shabbar Zaidi, Chairman, Federal Board of Revenue (FBR) has praised Pakistan Customs for working professionally and innovatively.

    He was addressing at an event to celebrate World Customs Day at Custom House, Islamabad.

    The chairman praised customs for working very professionally and innovatively and engaging the Customs administrations of the leading trade partners of Pakistan for social, economic, and environmental development and protection of Pakistan.

    He said that Pakistan Customs has achieved milestones in ensuring social, economic, and environmental development and safety for the people of Pakistan.

    He stated that, in addition to existing automated (WeBOC) system, Customs has initiated a project namely WeBOC-GLO and Pakistan Single Window for updating and modernizing the system keeping in lines with international best practices prevalent around the world for facilitating and securing trade.

    He stated that, in addition to these initiatives, Customs has implemented Advance Passenger Information System (APIS), Global Travelers Assessment System (GTAS). At the end of his speech, while felicitating the officers and officials of Pakistan Customs on this important occasion, he expected them to continue to strive for greater professionalism in line with international best practices and transform the organization into a business friendly, forward looking and a partner in the economic development of Pakistan.

    He emphasized that customs’ efficiency can be improved best with alignment of its operations with internationally recognized/recommended practices.

    He also underscored that customs’ role now is more of facilitation and regulatory.

    International Customs Day is celebrated by 183 Customs Administrations of the World on 26th January of every year under the auspices of the World Customs Organization (WCO) that has chosen the theme “Customs fostering sustainability for People, Prosperity, and the Planet” for this year (i.e. 2020).

    The purpose being to urge upon the customs administrations world over to attach requisite priority to this theme and make practical arrangements to ensure tangible achievements in this regard.

    Member (Customs Policy), in his address to the officers and officials of Pakistan Customs, highlighted the milestones, especially during the last one year, in fostering sustainability for people (who represents society), for prosperity (which represents economic gains), and for the planet (which represent environment in Pakistan and the world).

    He referred to the enforcement tools like National Customs Enforcement Network (nCEN) which Pakistan Customs has installed.

    With nCEN, Pakistan Customs is included in the club of 35 customs administrations in the world,/ who are using nCEN and now Pakistan is the seventh country in the Asia-Pacific region where nCEN is operational.

    He further stated that, by streamlining its operations, Pakistan Customs has achieved a milestone in increasing its ranking by thirty one (31) positions in the ‘Trading across border’ Index.

    This has also significantly contributed to Pakistan’s improvement in East of Doing Business Index by twenty eight (28) positions.According to him, Pakistan Customs developed model Customs, Mutual Assistance Agreements and MoUs, which included all the required provisions to have cooperation from other/important customs administrations in this arena.

    To this effect, Pakistan Customs finalized the draft agreements and MoUs in consultation with all the ministries and departments in Pakistan and have sent the same for finalization (and signing) to USA, European Union (EU), Russia, Hong Kong, Singapore, Iran, Saudi Arabia, Tajikistan and Afghanistan. Moreover, significant headway has been made regarding Green Corridor and other Customs initiatives with China.

    At the end of his speech, he congratulated the officers and officials of Pakistan Customs and the International community on the occasion of International Customs Day and hoped to work in close coordination with them to achieve the common objective of sustainable future where social, economic, and environmental needs are at the heart of viable actions.

    After the speeches, destruction ceremony was held wherein Chairman FBR, Syed Shabbar Zaidi and the Member Customs-Policy, Mr. Muhammad Javed Ghani inaugurated destruction of seized contraband goods and items by setting those on fire.

    International Customs Day was also attended by a big number of the Customs officers and officials, representatives of the industry/business community, and the media persons.

  • Dr. Hafeez asks Customs to focus on improving perception

    Dr. Hafeez asks Customs to focus on improving perception

    KARACHI: Pakistan Customs should prioritize perception of the organization as its name is attached with the country, Dr. Abdul Hafeez Shaikh, Advisor to Prime Minister on Finance, Revenue and Economic Affairs, said on Sunday on the occasion of International Customs Day.

    He said that the Customs had made great achievement. However, along with efficiency the perception is also important, he added.

    The advisor said that the customs authorities should ensure maximum facilitation to trade and business so they feel comfortable in paying duty and taxes.

    He said that the revenue collection was important and Custom had key role in it. He asked the customs authorities to ensure revenue collection in order to make Pakistan independent economically.

    Pakistan should make efforts for promoting business and tourism. He said that such service delivery should be adopted as per expectation of people inside Pakistan and coming from abroad.

    He assured the Pakistan Customs that government would provide all necessary support in terms of human resource and technology advancement.

    On the occasion, Dr. Agha Jawwad, Member Customs (Operation) said that around 182 countries of the world are celebrating the customs day.

    He said that as per slogan for this year the Customs had extended facilities to trade and business.

    He said that the customs had invoked provisions of Intellectual Property Rights and destroyed around Rs7-10 billion worth counterfeit and fake goods during last one year.

    Jawwad further said that Pakistan Customs had signed MoUs with 35 countries for exchange of information.

  • Tax collection increases by 93% on salary income of executives, directors

    Tax collection increases by 93% on salary income of executives, directors

    KARACHI: The tax collection from salary income of companies’ directors has increased by 93 percent during first six months of current fiscal year.

    According to Large Taxpayers Unit (LTU) Karachi, the major revenue arm of Federal Board of Revenue (FBR), the tax collection increased to Rs2.7 billion during first half (July – December) of current fiscal year as compared with Rs1.4 billion in the corresponding period of the last fiscal year.

    The tax officials of LTU Karachi attributed the increase in tax revenue under this head to revision in salary slabs in the budget 2019/2020 which is effective from July 01, 2019.

    They said that the tax slab was increased to 35 percent on the salary income above Rs75 million.

    The tax officials also attributed the increase in tax revenue to effective monitoring and audit of executives /directors of companies.

    They said that previously directors of companies avoid taxes by taking advantage of tax laws.

    The salary income has been explained in section 12 of Income Tax Ordinance, 2001.

    Salary.— (1) Any salary received by an employee in a tax year, other than salary that is exempt from tax under this Ordinance, shall be chargeable to tax in that year under the head “Salary”.

    (2) Salary means any amount received by an employee from any employment, whether of a revenue or capital nature, including —

    (a) any pay, wages or other remuneration provided to an employee, including leave pay, payment in lieu of leave, overtime payment, bonus, commission, fees, gratuity or work condition supplements (such as for unpleasant or dangerous working conditions);

    (b) any perquisite, whether convertible to money or not;

    (c) the amount of any allowance provided by an employer to an employee including a cost of living, subsistence, rent, utilities, education, entertainment or travel allowance, but shall not include any allowance solely expended in the performance of the employee’s duties of employment;

    (d) the amount of any expenditure incurred by an employee that is paid or reimbursed by the employer, other than expenditure incurred on behalf of the employer in the performance of the employee’s duties of employment;

    (e) the amount of any profits in lieu of, or in addition to, salary or wages, including any amount received —

    (i) as consideration for a person’s agreement to enter into an employment relationship;

    (ii) as consideration for an employee’s agreement to any conditions of employment or any changes to the employee’s conditions of employment;

    (iii) on termination of employment, whether paid voluntarily or under an agreement, including any compensation for redundancy or loss of employment and golden handshake payments;

    (iv) from a provident or other fund, to the extent to which the amount is not a repayment of contributions made by the employee to the fund in respect of which the employee was not entitled to a deduction; and

    (v) as consideration for an employee’s agreement to a restrictive covenant in respect of any past, present or prospective employment;

    (f) any pension or annuity, or any supplement to a pension or annuity; and

    (g) any amount chargeable to tax as “Salary” under section 14.

    (3) Where an employer agrees to pay the tax chargeable on an employee’s salary, the amount of the employee’s income chargeable under the head “Salary” shall be grossed up by the amount of tax payable by the employer.

    (4) No deduction shall be allowed for any expenditure incurred by an employee in deriving amounts chargeable to tax under the head “Salary”.

    (5) For the purposes of this Ordinance, an amount or perquisite shall be treated as received by an employee from any employment regardless of whether the amount or perquisite is paid or provided —

    (a) by the employee’s employer, an associate of the employer, or by a third party under an arrangement with the employer or an associate of the employer;

    (b) by a past employer or a prospective employer; or

    (c) to the employee or to an associate of the employee or to a third party under an agreement with the employee or an associate of the employee.