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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.

  • Draft MoU for sharing taxation data sent to China

    Draft MoU for sharing taxation data sent to China

    ISLAMABAD: Pakistan has sent draft Memorandum of Understanding (MoU) to China for sharing taxation data between the two countries.

    Federal Board of Revenue (FBR) Chairman Syed Muhammad Shabbar Zaidi on Monday sent the draft Memorandum of Understanding (MoU) on cooperation between FBR and China’s State Administration of Taxation in order to share taxation data between both the countries.

    A statement said that the draft MoU has been sent through a letter addressed to Pakistan’s Ambassador in China Ms Naghmana A. Hashmi.

    In this regard, Pakistan’s Ambassador in China has been authorized to sign the MoU on behalf of FBR.

    The FBR chairman in his letter has stated that the signing of the MoU will enable the Taxation Authorities of both the countries to share data and learn from each other’s best practices.

    The MoU will promote improvement in trade and investment in both countries.

  • FBR notifies revision in exemption regime under sales tax laws

    FBR notifies revision in exemption regime under sales tax laws

    ISLAMABAD: Federal Board of Revenue (FBR) has issued changes brought through Finance Act, 2019 in exemption regime under Sixth Schedule of the Sales Tax Act, 1990.

    Following changes have been made in Table-1 of the Schedule:

    i. Exemptions at the existing serial numbers 2,3, and 72, relating to meat, fish, poultry meat etc. have been amended to clearly provide that these exemptions also apply to products specified thereunder even if these products are packed.

    ii. Under serial number 19, the products of milling industry, as sold in retail packing bearing brand names, have been excluded from purview of exemption, however, wheat and meslin flour shall remain exempt even if so packed or sold under a brand name. Redundant PCT Heading 1102.1000 has also been omitted.

    iii. Serial numbers 36 and 37 pertaining to Gold and Silver, in unworked condition, have been omitted. Gold and Silver have been placed in the 8th schedule and chargeable to sales tax at the reduced rate of 1%. Gold and Silver have also been excluded from the purview of minimum value-addition tax of@ 3% at import stage under Twelfth Schedule.

    iv. The expression “excluding electricity and natural gas” has been added in serial number 52A relating to exemption on goods supplied to specified hospitals. Now, such hospitals are no more eligible for exemption on supplies of electricity and gas.

    v. The exemption at serial number 85, as available to fat filled milk, has been restricted to such milk as is not sold in retail packing under a brand name or a trademark. Such packed and branded fat filled milk now shall be subject to 10% sales tax under Eighth Schedule.

    vi. In view of doing away with the special procedure for steel industry, the exemption available to vessels / ships for breaking at serial number 95 has been omitted. Vessels imported for breaking up are now taxable at 17%. Field formations of Customs should ensure chargeability of sales tax on import of vessels since 1st July, 2019.

    vii. New serial number 151 has been added. This is a transposition of exemption under SRO 1212(I)/2018 which now has been rescinded and which provided exemption on supplies made within the tribal areas. In the transposed form, it allows further exemption on imports of industrial input including plant and machinery imported by industrial units located within tribal areas. These exemptions on imported inputs / plant and machinery shall be available subject to security mechanism specified under this serial.

    viii. Newly added serial 152 provides exemption on supplies of electricity as made to all consumers in tribal areas. However, this exemption shall neither be available to industries established after 31st May, 2018, nor to any steel and ghee /oil industries.

    ix. Through new serial number 153, imports and supplies by manufacturers of steel billets, ingots, ship plates, bars and other long re-rolled profiles, have been exempted. In lieu of this exemption, federal excise duty has been imposed on these items in sales tax mode.

    In Table-2, relating to local supplies, two changes have been made:

    (i) Exemption under serial number 16 shall not be available to ginned cotton, as the same has been subjected reduced rate of 10% in Eighth Schedule, at newly inserted serial number 65 in Table 1.

    (ii) The exemption to cottonseed oil has been provided at serial number 25.

    Related Posts

    FBR issues new withholding sales tax rates on supplies

  • Non-ATL person to pay 10pc withholding tax for offshore digital service

    Non-ATL person to pay 10pc withholding tax for offshore digital service

    ISLAMABAD: Persons not appearing in the Active Taxpayers’ List (ATL) shall pay 10 percent as withholding tax on payment of fee for offshore digital service to non-resident person under Section 152(1C) of Income Tax Ordinance, 2001.

    The Federal Board of Revenue (FBR) issued withholding tax card for tax year 2020 effective from July 01, 2019. The FBR said that tax shall be deducted on remittance outside Pakistan, of fee for off-shore digital services , chargeable to tax u/s 6, to a non-resident person on behalf of any resident or a permanent establishment of a non-resident in Pakistan.

    A banking company or financial institution shall collect withholding tax under this section from non-resident persons at the time the amount is actually paid at 5 percent of the gross amount.

    The FBR said that persons not appearing in the Active Taxpayers’ List: The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 10 percent of the gross amount.

    The FBR said that tax will be deducted from Non-resident on any payment of insurance premium or re-insurance to a non-resident person under Section 52(1AA) of Income Tax Ordinance, 2001 at 5 percent of gross amount by every person making the payments from non-resident person at the time the amount is actually paid.

    The FBR further said that tax will be deducted under Section 152 (1AAA) on payments for advertisement services from non-resident person relaying from outside Pakistan.

    The tax shall be collected by every person making payment non-resident at the time the amount is actually paid. The tax rate shall be 10 percent of the gross amount. Persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e. 20% of the gross amount.

  • FBR issues new withholding sales tax rates on supplies

    FBR issues new withholding sales tax rates on supplies

    ISLAMABAD: Federal Board of Revenue (FBR) has announced new rates of withholding sales tax after abolishing Sales Tax Special Procedure (Withholding) Rules, 2007.

    The FBR said that as Sales Tax Special Procedure (Withholding) Rules, 2007, have been rescinded, the rates of withholding and exclusions for the same have been provided in newly inserted Eleventh Schedule, as provided in amended section 3(7) of Sales Tax Act, 1990, effective from July 01, 2019, as under:

    Table

    S.No.Withholding agentSupplier categoryRate or extent of deduction
    (1)(2)(3)(4)
    1(a) Federal and provincial government departments; autonomous bodies; and public sector organizations

     

    (b) Companies as defined in the Income

    Tax Ordinance, 2001 (XLIX of 2001)

    		Registered personsl/5th of Sales Tax as shown on invoice
    2(a) Federal and provincial government departments; autonomous bodies; and public sector organizations

     

    (b) Companies as defined in the Income

    Tax Ordinance, 2001 (XLIX of 2001)

    		Person registered as a wholesaler, dealer or distributor1/10th of Sales Tax as shown on invoice
    3Federal and provincial government departments; autonomous bodies; and public sector organizationsUnregistered personsWhole of the tax involved or as applicable to

     

    supplies on the basis of gross value of supplies

    4Companies as defined in the Income Tax Ordinance, 2001 (XLIX of 2001)Unregistered persons5% of gross value of supplies
    5Registered persons as recipient of advertisement servicesPerson providing advertisement servicesWhole of sales tax applicable
    6Registered persons purchasing cane molasses.Unregistered personsWhole of sales tax applicable

    The rates for withholding or deduction by the withholding agent shall not be applicable on following goods and supplies:

    (i) Electrical energy;

    (ii) Natural gas;

    (iii) Petroleum products as supplied by petroleum production and exploration companies, oil refineries, oil marketing companies and dealers of motor spirit and high speed diesel;

    (iv) Vegetable ghee and cooking oil;

    (v) Telecommunication services;

    (vi) Goods specified in the Third Schedule to the Sales Tax Act, 1990;

    (vii) Supplies made by importers who paid value addition tax on such goods at the time of import; and

    (viii)  Supplies made by an Active Taxpayer as defined in the Sales Tax Act, 1990 to another registered persons with exception of advertisement services.

  • Imported consumer items to be cleared on declared retail prices: FBR

    Imported consumer items to be cleared on declared retail prices: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) has said that the consumers items falling under mandatory retail price print will be assessed at declared retail price at clearance stage instead of determination through customs value.

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  • Pakistan Customs deploys staff for round the clock operation at Torkham border

    Pakistan Customs deploys staff for round the clock operation at Torkham border

    ISLAMABAD: Pakistan Customs has deployed additional staff at Torkham border to activate round the clock operation to facilitate trade, a statement said on Friday.

    It said that in compliance with the directions of Prime Minister of Pakistan, the Pakistan Customs has deputed additional staff at Torkham border to facilitate trade and expedite clearance of baggage and cargo.

    In this regard, the Advisor to the Prime Minister on Establishment matters Arbab Shezad had convened meetings to address the matter on war footing, accordingly Dr. Jawwad Uwais Agha, Member Customs (Operations), Federal Board of Revenue, Islamabad has deployed a large number of customs personnel to cater to the urgent requirements at Torkham Customs.

    While elaborating FBR’s seriousness, Chairman FBR Syed Shabbar Zaidi said that the exports and Transit to Afghanistan bear much promise for expansion of the customs operations at Torkham and the customs department being the premier agency has put its teams in place to brace upto this situation.

    Chairman further informed that around 12 thousand passengers traverse across this border station daily and their facilitation and baggage clearance is an area being addressed by Customs, besides around 300 empty containers (after offloading their cargo in Afghanistan) are also sent back daily from the Afghan side.

    To implement the directions, 54 customs personnel consisting of Superintendents, Appraisers, Inspectors and other supporting staff have been withdrawn from other formations and deployed at Model Customs Collectorate of Appraisement Peshawar for Torkham.

    Although the customs formations are badly short in strength and request for creation of different posts is under consideration of Finance Department, however in order to give compliance to the directions of Prime Ministers Advisor on Establishment and the urgent need for expansion of the operations at Torkham, the Member (Customs Operations) has made all efforts and withdrawn customs staff for deployment in order to facilitate and expand the trade at Torkham.

    The customs clearance will be managed through three shifts. The day and night customs clearance operations will greatly facilitate the import and export at Torkham leading to significant reduction of transport charges and fast movement of trade.

    As a prelude the customs operations have already been expanded starting from 7.00 A.M. in the morning till 9.00 pm, since the past two months. The senior Customs Operations hierarchy have paid visit to Torkham to ensure launch of these operations in the coming days.

    The connecting requirements for equipments and support apparatus are being placed on ground through the cooperation of Khyber Pakhtunkhwa government.

    The said operations for round the clock are going to be started shortly for which formal ceremony will also take place in the presence of federal government high ups and FBR administration.

  • FBR notifies transfers, postings of BS-20 IRS officers

    FBR notifies transfers, postings of BS-20 IRS officers

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday notified transfers and postings of BS-20 officers of Inland Revenue Service (IRS) with immediate effect and until further orders.

    The FBR notified transfers and postings of following officers:

    01. Syed Syedain Raza Zaidi (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Appeals-III) Karachi from the post of Commissioner, (Zone-V) Corporate Regional Tax Office, Karachi. He will assume charge of post of Commissioner, Appeal-III, Karachi on proceeding of Hyder Ali Dharejo to NMC.

    02. Javaid Iqbal (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Appesls-III) Islamabad from the post of Commissioner, Inland Revenue (Appeals-I), Islamabad.

    03. Sajjad Akbar Khan (Inland Revenue Service/BS-20) is currently posted as Commissioner, Inland Revenue (Appeals-I), Karachi. He will hold additional Charge of post of CIR (Appeals-II), Karachi in addition to his own duties.

    04. Muhammad Javaid Badar (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Appeals) Faisalabad from the post of Commissioner, (Rahimyar Khan Zone) Regional Tax Office, Bahawalpur.

    05. Rafique-ur-Rehman Memon (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Appeals-IV) Karachi from the post of Director, Directorate of Immovable Property (South), Karachi. He will assume the charge of post of Commissioner Appeals-IV, Karachi on proceeding of Dr. Tauqeer Irtiza to NMC.

    06. Dr. Muhammad Idrees (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Appeals) Sargodha from the post of Commissioner, (Zone-II) Regional Tax Office, Sargodha.

    07. Muhammad Faisal Mushtaq Dar (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Appeals-I) Islamabad from the post of Commissioner, (WHT Zone) Regional Tax Office, Sargodha.

    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.

  • FBR issues withholding tax rates on commercial, industrial electricity consumers

    FBR issues withholding tax rates on commercial, industrial electricity consumers

    KARACHI: Federal Board of Revenue (FBR) has issued withholding tax rates to be collected from electricity consumers of commercial and industrial.

    According to Withholding Tax Card for tax year 2020 applicable from July 01, 2019, the power utility preparing electricity bills shall collect withholding tax under Section 235 of Income Tax Ordinance, 2001 from commercial and industrial consumers along with payment of electricity consumption on charges.

    The FBR issued following withholding tax rates on electricity consumption by commercial and industrial consumers”

    If monthly bill does not exceeds Rs400 the rate of withholding tax shall be zero.

    Exceeds Rs. 400 but does not exceed Rs. 600 the rate of withholding tax shall be Rs80.

    Exceeds Rs. 600 but does not exceed Rs. 800 the rate of withholding tax shall be Rs100.

    Exceeds Rs. 800 but does not exceed Rs. 1000 the rate of withholding tax shall be Rs160.

    Exceeds Rs. 1000 but does not exceed Rs. 1500 the rate of withholding tax shall be Rs300.

    Exceeds Rs. 1500 but does not exceed Rs. 3000 the rate of withholding tax shall be Rs350.

    Exceeds Rs. 3000 but does not exceed Rs. 4,500 the rate of withholding tax shall be Rs450.

    Exceeds Rs. 4500 but does not exceed Rs. 6000 the rate of withholding tax shall be Rs500.

    Exceeds Rs. 6000 but does not exceed Rs. 10000 the rate of withholding tax shall be Rs650.

    Exceeds Rs. 10000 but does not exceed Rs. 15000 the rate of withholding tax shall be Rs1000.

    Exceeds Rs. 15000 but does not exceed Rs. 20000 the rate of withholding tax shall be Rs1500.

    Exceeds Rs20000:

    (i) The tax shall be at the rate of 12 percent for commercial consumers;

    (ii) The tax shall be at the rate of 5 percent for industrial consumers.

    The FBR said that the tax shall:

    (i) Adjustable In case of company.

    (ii) In case of other than company tax collected on Rs, 360000 amount of annual bill will be minimum tax.

    (iii) in case other than company tax collected on amount over and above Rs 30000/- of monthly bill will be adjustable

    (i) Minimum Tax for CNG Stations.

    The FBR said that power utilities are required to collect adjustable withholding tax under Section 235A from domestic consumers along with payment of electricity consumption on charges.

    The tax shall be collected at 7.5 percent if the amount of monthly bill is Rs75,000 ore more. However, tax shall not be collected if the amount of monthly bill is less than Rs75,000.

  • No tax imposed on motorcycles, auto rickshaws: FBR

    No tax imposed on motorcycles, auto rickshaws: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday said that it has not imposed any tax on motorcycles and auto rickshaws.

    “The new circulating about imposition of tax on motorcycle and auto rickshaws by FBR is baseless and false, the FBR clarified and strongly refuted this baseless news.

    The FBR clarified that no change or increase in tax has been levied on motor vehicles under section 231B and 234 of Income Tax Ordinance-2001.

    Further, there is no suggestion under consideration to levy tax on Motorcycle and Auto Rickshaws.

    “The tax is levied only on cars as per Income Tax Ordinance-2001,” the FBR said.

    The government is working to provide facilities to the less income segment of the society.

  • FBR establishes FATF cell

    FBR establishes FATF cell

    The Federal Board of Revenue (FBR) has established a dedicated cell to oversee compliance with actions mandated by the Financial Action Task Force (FATF).

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