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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.

  • NCCPL to collect capital gain tax on March 29

    NCCPL to collect capital gain tax on March 29

    KARACHI: The National Clearing Company of Pakistan Limited (NCCPL) on Tuesday said that it will collect Capital Gain Tax (CGT) on disposal of shares for February 2019 on March 29, 2019.

    The aggregate amount of CGT arising on disposal of shares at Pakistan Stock Exchange for the period February 01, 2019 to February 28, 2019, would be collected on Friday, March 29, 2019 through respective settling banks of the clearing members, along with refund or adjustments on the basis of amount collected up to previous month, the NCCPL said.

    All clearing members have been directed to ensure requisite amount in their respective settling bank’s account.

    Further, the aggregate amount of CGT arising on trading of future commodity contracts at Pakistan Mercantile Exchange for the period February 01, 2019 to February 28, 2019, would also be collected from the Pakistan Mercantile Exchange on Friday, March 29, 2019.

    Necessary details and reports for the period have already been made available.

    Moreover, the aggregate amount of CGT arising on redemption of units of open end mutual funds have also been finalized for the period February 01, 2019 to February 28, 2019. Necessary details and reports have already been made available in the CGT System.

    Clearing Members, Pakistan Mercantile Exchange and Mutual Funds are hereby requested to verify the investor wise details of capital gain or loss and tax thereon, if any, through reports/downloads.

    The NCCPL warned that in case of none or partial collection of CGT, necessary action would be taken in accordance with the Rules and NCCPL Regulations.

  • FBR extends last date for submitting customs proposals for budget 2019/2020

    FBR extends last date for submitting customs proposals for budget 2019/2020

    ISLAMABAD: Federal Board of Revenue (FBR) has extended the last date for submitting customs related budget proposals for 2019/2020.

    In a notification to all chambers and association, the FBR said that the board issued a letter on January 25, 2019 for submitting customs proposals for budget 2019/2020.

    The proposals would cover three areas i.e. changes in Customs Tariff rates, Rules/Procedures and Customs Act, 1969.

    The FBR said that to enable the Customs Wing of the FBR to properly process and evaluate each proposal, three separate formats had been attached to the letter for preparing the proposals on MS Excel Sheets.

    The FBR said that while formulating the proposals, provision of the existing customs tariff rates/law may carefully be studied/consulted.

    Wherever required the proposal may be supported with the statistical data etc. so that it is not dropped on account of any such infirmity.

    In case of local manufacturer claiming tariff protection on its finished products or concession o its raw materials, complete given annexure as well, without which it would not be possible to process these types of proposals.

    It is requires that the proposals may be sent to the FBR by March 25, 2019.

    The government is scheduled to announce the budget 2019/2020 in the first week of June 2019.

  • Advance tax on electronic media, cable operators

    Advance tax on electronic media, cable operators

    KARACHI: Electronic media and cable operators are required to pay adjustable advance tax at the time of obtaining new license or renewal of license.

    According to updated Income Tax Ordinance, 2001 issued by the Federal Board of Revenue (FBR), Pakistan Electronic Media Regulatory Authority (PEMRA) shall collect the advance tax at the time of issuance of licence for distribution services or renewal of the licence to a licencee under Section 236F of the Ordinance.

    Section 236F: Advance tax on cable operators and other electronic media

    Sub-Section (1): Pakistan Electronic Media Regulatory Authority, at the time of issuance of licence for distribution services or renewal of the licence to a licencee, shall collect advance tax at the rates specified in Division XIII of Part IV of the First Schedule.

    (1) The rate of tax to be collected under section 236F in the case of Cable Television Operator shall be as follows:—

    License Category as provided in PEMRA RulesTax on License FeeTax on Renewal
    HRs. 7,500Rs. 10,000
    H-IRs. 10,000Rs. 15,000
    H-IIRs. 25,000Rs. 30,000
    RRs. 5,000Rs. 12,000
    BRs. 5,000Rs. 40,000
    B-1Rs. 30,000Rs. 35,000
    B-2Rs. 40,000Rs. 45,000
    B-3Rs. 50,000Rs. 75,000
    B-4Rs. 75,000Rs. 100,000
    B-5Rs. 87,500Rs. 150,000
    B-6Rs. 175,000Rs. 200,000
    B-7Rs. 262,500Rs. 300,000
    B-8Rs. 437,500Rs. 500,000
    B-9Rs. 700,000Rs. 800,000
    B-10Rs. 875,500Rs. 900,000

    (2) The rate of tax to be collected by Pakistan Electronic Media Regulatory Authority under section 236F in the case of IPTV, FM Radio, MMDS, Mobile TV, Mobile Audio, Satellite TV Channel and Landing Rights, shall be 20 per cent of the permission fee or renewal fee, as the case may be.

    “(3) In addition to tax collected under paragraph (2) Pakistan Electronic Media Regulatory Authority shall collect tax at the rate of fifty per cent of the permission fee or renewal fee, as the case may be, from every TV Channel on which foreign TV drama serial or a play in any language, other than English, is screened or viewed.”

    Sub-Section (2): The tax collected under sub-section (1) shall be adjustable.

    Sub-Section (3): For the purpose of this section, “cable television operator” “DTH”, “Distribution Service”, “electronic media”, “IPTV”, “loop holder”, “MMDS”, “mobile TV”, shall have the same meanings as defined in Pakistan Electronic Media Regulatory Authority Ordinance, 2002 (XIII of 2002) and rules made thereunder.

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  • Asad Umar reviews revenue collection, broadening of tax base

    Asad Umar reviews revenue collection, broadening of tax base

    KARACHI: Finance Minister Asad Umar on Monday reviewed the revenue collection progress and ongoing drive of broadening of tax base at a meeting with senior officials of Federal Board of Revenue (FBR).
    The meeting was attended by Member Inland Revenue Operations Ms. Seema Shakil, Member Customs Operations Agha Jawad, Chief Commissioners Inland Revenue and Chief Collectors of Pakistan Customs.
    Ms. Seema Shakil updated the finance minister about revenue collection and performance of Inland Revenue besides giving details of ongoing campaign for broadening of tax base.
    She apprised the finance minister about the difficulties in the way of taking harsh action against tax evaders.
    The sources said that the finance minister issued directives for taking harsh measures against tax evaders including high profile cases.
    He also assured all logistic support to FBR officials in taking actions against influential persons.


    Member Customs Operations Agha Jawad also briefed the finance minister about the working of customs clearance. The member said that transparency had been ensured in the clearance process in order to facilitate genuine taxpayers.
    The member pointed out high volume of smuggled betel nut.
    The finance minister directed to evolve a tariff mechanism for betel nut.
    The finance minister directed both the wings of FBR to ensure facilitation of taxpayers and focus on tax evaders.

  • FBR adds over 114,000 return filers to ATL

    FBR adds over 114,000 return filers to ATL

    ISLAMABAD: Federal Board of Revenue (FBR) has added over 114,000 return filers to Active Taxpayers List (ATL) following the grant of extension in filing income tax returns for Tax Year 2018 up to March 31, 2019.

    The FBR issued weekly updated ATL 2018 on Monday, which showed the number of active taxpayers increased to 1.75 million.

    The FBR issued first ATL 2018 on March 01, 2019 which had carried 1.6 million taxpayers in the list.

    The appearance of ATL is mandatory for availing reduced rate of withholding tax rate and other benefits available only to return filers.

    Through Finance Act, 2018, a section 182A was inserted to Income Tax Ordinance, 2001 which barred the late filers to appear on the ATL.

    Therefore, the ATL issued on March 01, 2019 only those taxpayers were included who filed their returns by December 15, 2018 in case of salaried persons, business individuals and companies with special years and December 31, 2018 for companies with normal tax year.

    However, the FBR last week extended the last date for filing income tax returns for all classes of taxpayers. Hence, those taxpayers who have filed their returns after December 15 or December 31 became eligible for ATL.

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  • Preventive auctions confiscated vehicles on March 19

    Preventive auctions confiscated vehicles on March 19

    KARACHI: Model Customs Collectorate (MCC) Preventive has announced public auction of confiscated vehicles on March 19, 2019 to be held at State Warehouse, Ghasbandar, East Wharf, Karachi.

    The following vehicles will be presented for auction:

    01. Mitsubishi Pajero Jeep, GS-200, Model 1994, Chassis No. Reg. GS-2000/V46-4034794

    02. Lexus Car, Model 2006, 3450CC, Chassis No. JTHBG963905034702

    03. Toyota Premio Car VVT, Reg. No. AAH-747, Model 2007, Chassis No. ZZT240-0140149

    04. Toyota Harrier Jeep, Reg. No. JAA-454, Model 1998, 2999CC, Chassis No. MCU-10-0013510

    05. Toyota Hilux Surf, Reg No. CP-0693, Model 1990, 2958CC, Chassis No. LN-130-0009771

    06. Honda Saloon Accord Car, Reg. No. BFT-418, Model 2003, 1990CC, Chassis No. LC7-3006339

    07. Toyota Land Cruiser Parado, Reg. No. BD-9380, Model 1998, 2657CC, Chassis No. RZI-90-0002888

    08. Toyota Hilux Surf SSR-X-3.0, Reg No. BD-8045, 2962CC, Chassis No. KZN-130-9048116

    09. Mercedes Benz (AG), Fake Reg. No. AB-1001, 2999CC, Chassis No. WDB1240312B4767728

    10. Toyota Mark-II Saloon Car, Reg. No. BBL-708, Model 2000, 1800HP, Chassis No. JZX110-6000922

    11. Toyota Hilux Surf, Reg. No. BD-1688, Model 1994, Chassis No. LN-130-0123784

    12. Honda Accord, Reg. No, AUX-934, Model 2004, Chassis No. CL7310078

    13. Mercedes Benz Car, Model 2001, 2000CC, Chassis No. WDB2037452A272217

    14. Toyota Axio-X car, Reg. No. BFE-068, 1496CC, Model 2007, Chassis No. NZE-141-6028039

    15. Toyota Primo Car, Reg. No. AAM-095, Model 2005, 1794CC, Chassis No. ZZT-240-5039822

    16. Honda Civic Saloon Car, Reg. No. AAM-988, Model 2007, Chassis No. FD-31001100

    17. Toyota Land Cruiser Jeep, Reg. No. BG-1131, Model 1989, 3431CC, Chassis No. BJ 60-023765

    18. Toyota Corolla Car, Model 2015, Reg. No. BDE-852, Chassis No. NZE170R4016729

    19. Toyota Crown Saloon Car, Model 2004, Reg. No. BHK-012, Chassis No. GRS182-5014910

    20. Toyota Saloon Car XE- Model 1999, 1500CC, Cassis No. AE-100-5171778

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  • Income Tax Ordinance 2001: amended advance tax rates on marriages, functions

    Income Tax Ordinance 2001: amended advance tax rates on marriages, functions

    KARACHI: Federal Board of Revenue (FBR) has updated advance tax rates on marriages and functions through latest amendment to Income Tax Ordinance, 2001.
    The national assembly recently approved Finance Supplementary (Second Amendment) Act, 2019 and advance tax rate for functions and gathering has been updated.
    The advance tax is collected under following section of the Ordinance.
    Section 236D: Advance tax on functions and gatherings
    Sub-Section (1): Every prescribed person shall collect advance tax at the rate specified in Division XI of Part IV of the First Schedule on the total amount of the bill from a person arranging or holding a function in a marriage hall, marquee, hotel, restaurant, commercial lawn, club, a community place or any other place used for such purpose.
    Sub-Section (2): Where the food, service or any other facility is provided by any other person, the prescribed person shall also collect advance tax on the payment for such food, service or facility at the rate specified in Division XI of Part IV of the First Schedule from the person arranging or holding the function.
    Sub-Section (3): The advance tax collected under sub-section (1) and sub-section (2) shall be adjustable.
    Sub-Section (4): In this section,—
    (a) “function” includes any wedding related event, a seminar, a workshop, a session, an exhibition, a concert, a show, a party or any other gathering held for such purpose; and
    (b) “prescribed person” includes the owner, a lease-holder, an operator or a manager of a marriage hall, marquee, hotel, restaurant, commercial lawn, club, a community place or any other place used for such purpose.
    The rate of tax to be collected under each sub-sections (1) and (2) of section 236D shall be 5%;
    Provided that the rate for the function of marriage in a marriage hall, marquee, hotel, restaurant, commercial lawn, club, a community place or any other place used for such purpose shall be as set out in the Table below:─

    S. No.Rate of tax 
    015% of the bill ad valorem or Rs20,000 per function, whichever is higherFor Islamabad, Lahore, Multan,Faisalabad, Rawalpindi, Gujranwala, Bahawalpur, Sargodha, Sahiwal, Shekhurpura, Dera Ghazi Khan, Karachi, Hyderabad, Sukkur, Thatta, Larkana, Mirpur Khas, Nawabshah, Peshawar, Mardan, Abbottabad, Kohat, Dera Ismail Khan, Quetta, Sibi, Loralai, Khuzdar, Dera Murad Jamali and Turbat.
     
    025% of the bill ad valorem or Rs10,000 per function, whichever is higherFor cities other than those mentioned above.

    Through Finance Supplementary (Second Amendment) Act, 2019, the following amendment has been inserted:
    “Provided further that the rate for the function of marriage in a marriage hall, marquee or a community place with the total function area less than 500 square yards or, in case of a multi-stories premises, with the largest total function area on one floor less than 500 square yards, shall be 5 percent of the bill ad valorem or Rs5,000 function whichever is higher.”
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  • Filing annual return: large number to benefit from date extension

    Filing annual return: large number to benefit from date extension

    KARACHI: A large number of taxpayers may file their annual income tax returns while taking advantage of date extension up to March 31, 2019, tax manager said.

    The Federal Board of Revenue (FBR) recently extended the last date for filing income tax return for tax year 2018 up to March 31, 2018, which was December 15, 2018 for salary, business individuals, taxpayers falling in final tax regime and companies having special tax year.

    Similarly, the date was also extended for corporate units up to March 31, 2019, whose last date was December 31, 2018.

    The tax managers said that due to burden and restrictions on non-filers under Income Tax Ordinance, 2001 a huge number of individuals and companies would file their income tax returns for tax year 2018 to appear on Active Taxpayers List (ATL).

    They said that the non-filers have been restricted in purchasing immovable properties over Rs40 million and registration of imported motor vehicles.

    Further, the non-filers are also required to pay higher percent of withholding tax on various transactions. The non-filers in the recent mini-budget allowed to purchase and register new locally assembled motor vehicles. However, the withholding tax rates on non-filers have been increased by 50 percent.

    The ATL issued by FBR on March 01, 2019 for tax year 2018 carried list of 1.59 million active taxpayers. In contrast the ATL for the tax year 2017 had carried 1.84 million active taxpayers, which showed about 240,000 taxpayers were not on the new list.

    With the extension of date up to March 31, 2019 the return filers would not require to pay penalty and also become eligible for appearing on the ATL.

    To some estimates the recent date extension by the FBR around 250,000 to 300,000 more returns would be added to the current active taxpayers list.

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  • Income Tax Ordinance 2001: advance tax on sale, purchase of immovable properties

    Income Tax Ordinance 2001: advance tax on sale, purchase of immovable properties

    KARACHI: Adjustable advance tax is applicable for filers and non-filers of income tax return on sales and purchase of immovable properties to be collected at the time of transaction.

    According to updated Income Tax Ordinance, 2001 issued by Federal Board of Revenue (FBR) the tax shall be collected under Section 236C and Section 236K of the Ordinance, which are as follow:

    Section 236C: Advance Tax on sale or transfer of immovable Property
    Sub-Section (1): Any person responsible for registering, recording or attesting transfer of any immovable property shall at the time of registering, recording or attesting the transfer shall collect from the seller or transferor advance tax at the rate specified in Division X of Part IV of the First Schedule:

    “The rate of tax to be collected under section 236C shall be 1% of the gross amount of the consideration received for filers and 2% of the gross amount of the consideration received for non-filers.”

    Explanation,—For removal of doubt, it is clarified that the person responsible for registering, recording or attesting transfer includes person responsible for registering, recording or attesting transfer for local authority, housing authority, housing society, co-operative society and registrar of properties.

    Provided that this sub-section shall not apply to a seller, being the dependant of a Shaheed belonging to Pakistan Armed Forces or a person who dies while in the service of the Pakistan Armed Forces or the service of Federal or Provincial Government, in respect of first sale of immovable property acquired from or allotted by the Federal Government or Provincial Government or any authority duly certified by the official allotment authority, and the property acquired or allotted is in recognition of or for services rendered by the Shaheed or the person who dies in service.

    Sub-Section (2): The Advance tax collected under sub-section (1) shall be adjustable:

    Provided that where immovable property referred to in sub-section (1) is acquired and disposed of within the same tax year, the tax collected under this section shall be minimum tax.

    Sub-Section (3): Advance tax under sub-section (1) shall not be collected if the immovable property is held for a period exceeding three years.

    Section 236K: Advance tax on purchase or transfer of immovable property

    Sub-Section (1): Any person responsible for registering, recording or attesting transfer of any immovable property shall at the time of registering, recording or attesting the transfer shall collect from the purchaser or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule.

    The rate of tax to be collected under section 236K shall be:-

    S. NoPeriodRate of Tax
    01Where value of immovable property is up to Rs4 millionZero percent
    02Where the value of immovable property is more than Rs4 millionFiler 2 percent
    Non-filer 4 percent

     
    Explanation,—For removal of doubt, it is clarified that the person responsible for registering, recording or attesting transfer includes person responsible for registering, recording or attesting transfer for local authority, housing authority, housing society, co-operative society and registrar of properties.

    Sub-Section (2): The advance tax collected under sub-section (1) shall be adjustable.

    Sub-Section (3): Any person responsible for collecting payments in installments for purchase or allotment of any immovable property where the transfer is to be effected after making payment of all installments, shall at the time of collecting installments collect from the allotee or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule.

    Sub-Section (4): Nothing contained in this section shall apply to a scheme introduced by the Federal Government, or Provincial Government or an Authority established under a Federal or Provincial law for expatriate Pakistanis:

    “Provided that the mode of payment by the expatriate Pakistanis in the said scheme or schemes shall be in the foreign exchange remitted from outside Pakistan through normal banking channels.”

  • Car imports fall by massive 38.34 percent after strict checks on concessionary schemes

    Car imports fall by massive 38.34 percent after strict checks on concessionary schemes

    KARACHI: The import of motor cars has sharply declined by 38.34 percent during first eight months of current fiscal year due to certain government checks on preventing misuse of allowed schemes.

    The import of motor cars in Completely Built Unit (CBU) condition was at $202.9 million during July – February 2018/2019 as compared with $329.06 million in the corresponding period of the last fiscal year, according to Pakistan Bureau of Statistics (PBS).

    Industry experts attributed the decline mainly to restriction imposed on non-filers in registering imported cars with provincial motor vehicle authorities.

    The experts further said that the condition of arranging foreign exchange for payment of customs duty had also discouraged the imports of cars.

    The import of cars fell even more sharply when compared the imports of $9.47 million in February 2019 as compared with $37 million in the same month of the last year.

    The experts said that the import of cars had been allowed under three different schemes such as gift scheme, transfer of resident scheme and baggage scheme for Pakistanis living abroad.

    However, these schemes were grossly misused which resulted huge loss of foreign exchange.

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