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 transfers 37 Commissioners of Inland Revenue

ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday notified transfers and postings of 37 Commissioners of Inland Revenue Service (IRS) in BS-19-20 with immediate effect under further orders.

Following officers have been transferred and posted by the FBR:

01. Dr. Shahid Siddiq Bhatti (Inland Revenue Service/BS-20) has been transferred and posted as Director, Directorate of Internal Audit (Inland Revenue), Lahore from the post of Commissioner, (Zone-VII) Corporate Regional Tax Office, Lahore.

02. Mehmood Hussain Jafari (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-VII) Corporate Regional Tax Office, Lahore from the post of Director, Directorate of Law, Lahore.

03. Dr. Muhammad Sarmad Qureshi (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-IV) Corporate Regional Tax Office, Lahore from the post of Commissioner, (Zone-II) Regional Tax Office II, Lahore.

04. Imtiaz Ali Solangi (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-VI) Corporate Regional Tax Office, Karachi from the post of Commissioner, (IP/TFD) Corporate Regional Tax Office, Karachi.

05. Muhammad Irfan Raza (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-I) Large Taxpayers Unit, Lahore from the post of Director, Directorate of Internal Audit (Inland Revenue), Lahore.

06. Dr. Shah Khan (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue Inland Revenue (Appeals), Peshawar from the post of Commissioner, (Corporate Zone) Regional Tax Office, Peshawar.

07. Ms. Shazia Abid (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-IV) Regional Tax Office II, Karachi from the post of Commissioner, (Zone-IV) Large Taxpayers Unit, Karachi.

08. Amjad Farooq (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-II) Large Taxpayers Unit, Lahore from the post of Commissioner, (Zone-III) Large Taxpayers Unit, Lahore.

09. Sajjad Taslim Azam (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Jhang Zone) Regional Tax Office, Faisalabad from the post of Commissioner, (Zonve-V) Regional Tax Office II, Lahore.

10. Muhammad Jamil Bhatti (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue Inland Revenue (Appeals-III), Lahore from the post of Commissioner, Regional Tax Office, Sialkot.

11. Ms. Hina Akram (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-I) Regional Tax Office II, Karachi from the post of Commissioner, (Zone-II) Corporate Regional Tax Office, Karachi.

12. Ms. Farhat Qayum (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (City Zone) Regional Tax Office, Rawalpindi from the post of Director, Directorate of Internal Audit (Inland Revenue), Islamabad.

13. Adnan Inamullah Khan (Inland Revenue Service/BS-20) has been transferred and posted as Director, Directorate of Internal Audit (Inland Revenue), Rawalpindi from the post of Commissioner, (City Zone) Regional Tax Office, Rawalpindi.

14. Muhammad Khalid Malik (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (WHT) Regional Tax Office, Sargodha from the post of Commissioner, (Lyallpur Zone) Regional Tax Office, Faisalabad.

15. Maqsood Jahangir (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-IV) Large Taxpayers Unit, Islamabad from the post of Commissioner, (Zone-IV) Corporate Regional Tax Office, Karachi.

16. Ahsan Raza Ch. (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-II) Regional Tax Office, Sargodha from the post of Commissioner, (Jhang Zone) Regional Tax Office, Faisalabad.

17. Ms. Irum Sarwar (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Chenab Zone) Regional Tax Office, Faisalabad from the post of Commissioner, (WHT) Regional Tax Office, Faisalabad.

18. Muhammad Anwar (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Corporate Zone) Regional Tax Office, Faisalabad from the post of Commissioner, (Zone-I) Regional Tax Office, Gujranwala.

19. Muhammad Naveed Akhtar (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (HRM) Large Taxpayers Unit, Lahore from the post of Commissioner, Inland Revenue (Appeals-III), Lahore.

20. Muhammad Majid (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-II) Regional Tax Office II, Lahore from the post of Commissioner, (Zone-I) Large Taxpayers Unit, Lahore.

21. Muhammad Shaukat Hayat Cheema (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-I) Large Taxpayers Unit,
Islamabad from the post of Commissioner, (East Zone) Regional Tax Office, Islamabad.

22. Khaliq Farooq Mian (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (WHT) Regional Tax Office, Sialkot from the post of Commissioner, (WHT) Regional Tax Office, Gujranwala.

23. Muhammad Asghar Khan Niazi (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Rahim Yar Khan Zone) Regional Tax Office, Bahawalpur from the post of Commissioner, (Zone-I) Regional Tax Office, Abbottabad.

24. Dr. Muhammad Aslam Mari (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-II) Corporate Regional Tax Office, Karachi from the post of Commissioner, (Zone-I) Regional Tax Office II, Karachi.

25. Lal Muhammad Khan (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-IV) Regional Tax Office III, Karachi from the post of Commissioner, (WHT) Regional Tax Office (RTO) II , Karachi.

26. Zafar Rafiq Siddiqui (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-V) Corporate Regional Tax Office, Karachi from the post of Commissioner, (Zone-IV) Regional Tax Office III, Karachi.

27. Ch. Javed Anwar (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (WHT) Regional Tax Office, Gujranwala from the post of Commissioner, (Corporate Zone) Regional Tax Office, Faisalabad.

28. Muhammad Ali (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-I) Regional Tax Office III, Karachi from the post of Commissioner, (Zone-II) Regional Tax Office, Sukkur. The officer will join his duties at his new place of posting w.e.f 01.09.2019. i.e. the date when Hasnain Brohi (IRS/BS-20) proceeds on Ex-Pakistan leave.

29. Muhammad Tariq Jamal Khattak (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Corporate Zone) Regional Tax Office, Peshawar from the post of Commissioner, Inland Revenue (Appeals), Peshawar.

30. Shabih-ul-Aijaz (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-III) Large Taxpayers Unit, Lahore from the post of Commissioner, (HRM) Large Taxpayers Unit, Lahore.

31. Abdul Hameed Anjum Arayn (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (WHT) Regional Tax Office II, Karachi from the post of Chief, (Legal Wing) Federal Board of Revenue (Hq), Islamabad.

32. S. Jaffar Raza Kazmi (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-IV) Corporate Regional Tax Office, Karachi from the post of Commissioner, (Zone-IV) Regional Tax Office II, Karachi.

33. Jamshed Fakhri Dahir (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-III) Large Taxpayers Unit, Islamabad from the post of Commissioner, (Zone-IV) Corporate Regional Tax Office, Lahore.

34. Abdul Qadir Shaikh (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-III) Corporate Regional Tax Office, Karachi from the post of Commissioner, Inland Revenue (Appeals-II), Karachi.

35. Jibran Masroor (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-V) Regional Tax Office II, Lahore from the post of Commissioner, (WHT) Regional Tax Office, Sialkot.

36. Muhammad Aslam (Cost Accountant/BS-20) has been transferred and posted as Chief (Cost Accounting), Corporate Regional Tax Office, Lahore from the post of Chief (Cost Accounting), Regional Tax Office, Multan.

37. Asif Rasool (Inland Revenue Service/BS-19) has been transferred and posted as Commissioner Inland Revenue (OPS) (Sahiwal Zone) Regional Tax Office, Sahiwal from the post of Commissioner, (OPS) (IP/TFD/HRM) Regional Tax Office, Sahiwal.

The FBR said that the officers who are drawing performance allowance prior to issuance of this notification shall continue to draw this allowance on the new place of posting.

August 20, 2019
Officers of DG Special Initiatives given powers

ISLAMABAD: Federal Board of Revenue (FBR) has authorized powers to perform functions to the officers of the Directorate General of Special Initiatives.

The FBR issued SRO 940(I)2019 on Tuesday in this regard.

The Director General of the directorate has been given powers and authority of a Chief Commissioner Inland Revenue.

The director general has been authorized powers under Sections 176, 178, 179 of the Income Tax Ordinance, 2001.

The functions to work by the DG are:

(i) adopting innovative ways to find high net worth individuals and generate data which can readily translate into revenue.

(ii) coordination with departments of government, semi-government, local government, autonomous bodies, authorities and private bodies to find innovative avenues for generation of integrated data to generate revenue for the government.

(iii) any initiative for system based generation of revenues for FBR.

(iv) Any other initiative assigned by the Chairman FBR or Member Inland Revenue – Operations.

The FBR has also authorized powers and functions of Director, Additional Director and Deputy/Assistant Director of the Directorate.

August 20, 2019
Sales tax registration number is mandatory on invoices: SRB

KARACHI: Sindh Revenue Board (SRB) has said that mentioning Sindh Sales Tax Registration Number (SNTN) on sales invoices is mandatory for persons registered with the provincial revenue body.

The SRB issued Circular No. 4/2019 on Tuesday and said it had received several enquiries from the taxpayers, registered with Sindh Revenue Board as service providers in terms of the provisions of sections 24, 24A and 24B of the Sindh Sales Tax on Services Act, 2011, about the requirement to mention Sales Tax Registration Number (STRN) on the sales tax invoices issued by the service providers to their customers/clients/service recipients.

The levy, payment and collection of Sindh sales tax on services in Sindh Province is governed by the provisions of the Sindh Sales Tax on Services Act, 2011 and the rules and notification issued thereunder.

Under rule 29(1) of the Sindh Sales Tax on Services Rules, 2011, all SRB-registered taxpayers/service providers are required to issue serially-numbered sales tax invoices to its customers/clients/service recipients containing the following particulars:-

(i) Name, address and SNTN (Sindh Sales Tax Registration Number) of the service provider;

(ii) Name, address and NTN or SNTN or CNIC number of the service recipient;

(iii) Serial number and date of issue of the tax invoice;

(iv) Description, tariff heading and other details of the service provided;

(v) Value exclusive of Sindh sales tax;

(vi) Rate of Sindh sales tax;

(vii) Amount of Sindh sales tax; and

(viii) Value inclusive of Sindh sales tax

For the purposes of registration under the Sindh Sales Tax on Services Act, 2011, Sindh Revenue Board issues a SNTN (by prefixing alphabet “S” to the NTN of the person/business enterprise) which is the unique identification of every SRB-registered taxpayer/service provider. Neither the Sindh Sales Tax on Services Act, 2011 nor the rules made thereunder recognize any sales tax registration other than SNTN.

No other registration number is issued/generated by the Sindh Revenue Board either. In compliance with the requirement of the aforesaid rule 29(1), all sales tax invoices issued in relation to the provision of taxable services have to mention the “SNTN”, as issued by the SRB.

August 20, 2019
FBR sacks senior auditor on corruption charges

ISLAMABAD: Federal Board of Revenue (FBR) has sacked a senior tax auditor on the charges of corruption and misconduct.

In an office order issued on Tuesday, the FBR said that disciplinary proceedings under Government Servants (Efficiency & Discipline) Rules, 1973 were initiated against Mian Muhammad Ibrahim, Senior Auditor (BS-16) (under suspension), Regional Tax Office, Islamabad vide Charge Sheet No.2(95)/2009-IR-III dated 21.02.2017.

Tauqir Ahmad, the then Additional Commissioner, Regional Tax Office, Rawalpindi was appointed as Inquiry Officer to conduct inquiry on account of various acts of omission and commission committed by the accused officer; constituting “Misconduct” and “Corruption”.

The Inquiry Officer submitted inquiry report dated 23.10.2017 according to which the charges of “Misconduct” & “Corruption” stand established against the accused officer.

A Show Cause Notice dated 11.12.2017 was issued to the accused officer by the Authorized Officer and in response, he submitted his defence / written reply. Opportunity of personal hearing was provided to the accused officer by the Authorized Officer, which was availed on 30.10.2018.

After considering the inquiry report, reply of the accused to the Show Cause Notice and his oral submissions during the personal hearing with the Authorized Officer, the accused officer has been found guilty of “Misconduct” and “Corruption” under Rule 3(b)&(c) of the Government Servants (E&D) Rules, 1973.

Now therefore, Member (Admn), being the Authority in this case, after having considered all aspects of the case and the recommendations of the Authorized Officer has imposed major penalty of “Removal from Service” upon Mian Muhammad Ibrahim, Senior Auditor (BS-16) under Rule 4(1)(b)(iii) of the Government Servants (Efficiency & Discipline) Rules, 1973 with immediate effect.

August 20, 2019
FBR explains tax treatment on foreign controlled entity by resident Pakistani

ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday explained treatment of tax on foreign controlled entity by a resident Pakistani.

The FBR issued Circular No. 13/2019 for explaining the Section 109A of Income Tax Ordinance, 2001.

The FBR said that a new section 109A had been introduced through Finance Act, 2018, which is effective from July 01, 2018. “Return for tax year 2019 will be the first year when provision of this section will become applicable.”

This section states the taxable income of resident person shall include income attributable to a “Controlled Foreign Company.”

The FBR said that in ordinary sense, income of a foreign company owned by a Pakistani resident is taxable in Pakistan only when such income is received from the non-resident entity.

Section 109A(1) of the Ordinance is a deeming provision which essentially creates legal fiction resulting in following exceptions:

(a) Corporate veil is pierced and income of a company is deemed to be the income of controlling entity; and

(b) income is taxed in the year it is earned not when it is actually received. This is the consequence of the first action because when corporate veil is pierced the income becomes taxable when earned.

Explaining the CFC, the FBR said that in order determine that a foreign company is a controlled foreign company either of the two conditions regarding control of the resident over foreign company has to be fulfilled:

(i) more than fifty percent of the capital or voting rights of the non-resident company are held, directly or indirectly, by one or more persons resident in Pakistan; or

(ii) more than forty percent of the capital of the voting rights of the non-resident company are held, directly or indirectly, by a single resident person in Pakistan.

However, a foreign entity which fulfills either of the above condition, cannot be treated as a CFC if:

(i) the shares of the company are traded on any stock exchange recognized by law of the country or jurisdiction of which the non-resident company is resident for tax purpose;

(ii) the non-resident company derives active business income as defined under Sub-Section (3) of Section 109A; and

(iii) tax paid, after taking into account any foreign tax credits available to the non-resident company, on the income derived or accrued, during a foreign tax year, by the non-resident company to any tax authority outside Pakistan is less than sixty percent of the tax payable on the said income under the Ordinance.

The FBR further explained the concept of active business income: It said that ‘Active Income’ for the purpose of exclusion from CFC regime requires simultaneous fulfillment of two conditions:

(i) cumulative income from dividend, interest, property, capital gains, royalty, annuity payment, supply of goods or services to an associate, sale or licensing of intangibles and management, holding or investment in securities and financial assets is less than 20 percent of the total income of the said company; and

(ii) principal source of the company is under the head ‘income from business’ in the country or jurisdiction of which it is a resident.

The FBR said that the term ‘direct control’ refers to direct ownership of capital or voting right in the foreign entity. However, the term ‘indirect control’ is very wide in its connotation. “It includes indirect control by a company through subsidiary companies in which the resident person holds capital or voting rights but also includes other companies in which the resident person exercises control through ownership of capital or voting rights.”

Regarding ‘attributable income’ under Section 109A(1) of the Ordinance the FBR said that it is in the hand of resident person. The taxable income is income generated by a controlled company that should have been taxed ‘when earned’ instead of ‘when distributed.’

The attributable income of the resident person shall be determined by comparing the percentage of control (whether direct or indirect) held by the said person over the CFC.

Certain other exclusion have also been prescribed by law which are:

(i) Income of a controlled foreign company shall be treated as zero, if it is less than ten million rupees.

(ii) If direct/indirect capital or voting right held by the resident person is less than 10 percent in the foreign entity.

August 20, 2019
FBR asks banks to provide details of government securities investment

ISLAMABAD: Federal Board of Revenue (FBR) has asked banks to provide details of additional investment made into the government securities during the tax year 2019.
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August 20, 2019
General education not taxable under training services: SRB

KARACHI: Sindh Revenue Board (SRB) on Monday said that general education services are not taxable under ‘training services’ which is introduced through Sindh Finance Act, 2019.

The provincial revenue authority issued clarification on the issued after receiving objections from the stakeholders for explaining the training services.

The SRB said; “The general education services like pre-primary, primary, elementary, secondary (matric), higher secondary (intermediate), general certificate of secondary education, international general certificate of secondary education, college or university education (leading to degrees like BA, BSC, B.S, B.Com, BBA, BE, Bed, B Tech, LLB, MBBS, MA, MSc, MS, MCS, M Com, MBA, M Ed, LLM, M Phil, MCPS, FCPS, PhD, special education for handicapped children and education under the adult literacy program are not taxable as training services of tariff heading 9848.000 of the Second Schedule to the Sindh Sales Tax on Services Act, 2011.”

Earlier, Deloitte Yousf Adil, Chartered Accountants urged the SRB for clarification regarding applicability of Sindh Sales Tax on education related activity under Tariff Heading 9848.000 (training services).

The chartered accountants firm said that through the Sindh Finance Act, 2019, the training services had been brought to tax net under the tariff heading of 9848.000 with effect from July 01, 2019.

Through notification issued July 01, 2019, the rate of Sindh Sales Tax on training services had been reduced to five percent with not input tax adjustment.

The chartered accountants firm pointed out that there was confusion regarding chargeability of SST on education related services provided or rendered by schools, colleges, institutes and universities as chartered by the government or related bodes such as Higher Education Commission etc.

The chartered accountants firm had urged the provincial revenue authority to clarify the scope of tariff heading specifically keeping the scenario of general education services.

August 19, 2019
Sindh Excise collects Rs5.7 billion in July 2019

KARACHI: The Sindh Excise Department has reported an impressive collection of Rs5.7 billion under various tax heads, including infrastructure cess, motor vehicles, properties, etc., for the month of July 2019.
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August 19, 2019
Commerce ministry extends date for submitting DLTL claims

KARACHI: The ministry of commerce has extended the last date for submission /resubmission of claims of Drawback of local Taxes and Levies (DLTL).

The State Bank of Pakistan (SBP) on Monday informed banks that the commerce ministry extended the date for claiming DLTL.

The central bank said that in terms of Commerce Division, Ministry of Commerce & Textile’s letter F.No. 5(2)/2017-SO(M&I) dated July 30, 2019, it has been decided to extend the deadline for submission/ resubmission of claims from claimants to Authorized Dealers (ADs) under Para 1(4)(a) and 1(4)(d) of the subject Order till August 15, 2019.

Further, the deadline for submission of the claims from ADs to the field offices of State Bank of Pakistan – Banking Services Corporation (SBP-BSC) shall be August 30, 2019.

Likewise, the last date for submission of incremental claims from exporters to ADs under Para 1(4)(b) of the subject Order, shall be October 16, 2019 and from ADs to SBP-BSC October 31, 2019.

August 19, 2019
Auction of confiscated vehicles to be held on August 20 at ASO Headquarters

KARACHI – The Model Customs Collectorate (MCC) Preventive has officially announced the upcoming auction of a large number of confiscated vehicles. The event is scheduled to take place on August 20, 2019, at the Anti-Smuggling Organization (ASO) Headquarters, located at NMB Wharf, Ghass Bandar, East Wharf, Karachi.
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August 19, 2019