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Category: Taxation

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  • Advance tax exempted on sale of immovable properties on holding period of above five years

    Advance tax exempted on sale of immovable properties on holding period of above five years

    KARACHI: The Federal Board of Revenue (FBR) has exempted the advance tax on sale of immovable property subject to the property is held for above five years.

    The officials of Federal Board of Revenue (FBR) said that advance tax under Sub-Section (1) of Section 236C of Income Tax Ordinance, 2001 would not be collected if the immovable property is held for a period exceeding five years.

    Under Sub Section 1 of Section 236C of the Income Tax Ordinance, 2001, 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:

    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.

    (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.

    According to the ordinance the advance tax rate on sale of immovable properties is one percent of the gross amount of the consideration received. However, the tax rate shall be two percent if a person is not appearing on the Active Taxpayers List.

  • SBP abolishes fee on tax payment through alternate delivery channels

    SBP abolishes fee on tax payment through alternate delivery channels

    KARACHI: The State Bank of Pakistan (SBP) has announced to abolish the fee on payment of government taxes and duties through Alternate Delivery Channels (ADCs) and Over-the-Counter (OTC) from January 1, 2020.

    A statement issued on Saturday said that presently, the taxpayers pay Rs.10 to Rs.50 per transaction for payment of taxes through ADCs depending on the amount of tax paid, and Rs.50 per transaction for the payments through OTC.

    This fee will be borne by SBP instead of taxpayers from January 1, 2020. The change has been notified through SBP FD Circular No.4 of 2019 dated December 27, 2019.

    The decision is part of SBP efforts to promote digital payments and is likely to attract larger number of taxpayers towards digital payment of government taxes and duties.

    The mechanism for online collection of taxes and duties was introduced in March 2018 in collaboration with Federal Board of revenue (FBR) with the primary objective of taxpayers’ facilitation. The tax payers can pay their taxes from the convenience of their homes or offices using internet/mobile banking facilities, through 14000 plus ATMs or any of the 15000 plus branches of commercial banks across the country. So far Rs.346 billion has been collected through this mechanism. The collections through the ADCs/OTC modes are likely to grow exponentially as the awareness about the mechanism improves.

    SBP is also running an awareness campaign to familiarize the taxpayers, tax bar associations, chambers of commerce, clearing and forwarding agents and business community at large about the ADC and OTC payment mechanisms.

    Seminars and awareness sessions are being arranged across the country through the field offices of SBP Banking Services Corporation. The first such seminar was held in Karachi on December 26, 2019, which was attended by corporate taxpayers, representatives from chamber of commerce, trade associations, commercial banks, tax bars and audit firms.

    The participants appreciated SBP efforts for promotion of digital payments and said that such sessions are critically important for enhancing public awareness and allaying their fears and apprehensions about digital payments.

  • Return filing due date Dec 31 for all taxpayers

    Return filing due date Dec 31 for all taxpayers

    KARACHI: The income tax return filing date for tax year 2019 is December 31, 2019 for all types of taxpayers, which is unusual considering past years.

    The taxpayers including salaried individuals, business individuals, association of persons (AOPs), final taxpayers, companies falling under special tax year, corporate entities whose financial year ending June 30.

    The filing of annual returns by all the types of taxpayers is unusual as during past years the return filing date paused around December 15 to give ample space and time for corporate entities to file their returns.

    The filing date for salaried individuals, business individuals, AOPs and corporate entities having special tax year was September 30, 2019. While, the filing of annual return for tax year 2019 for companies is December 31, 2019.

    The FBR granted four extensions to taxpayers who were required to file their returns by September 30, 2019 and extended up to December 31, 2019.

    The return filing reached to 2.73 million for tax year 2018. The FBR received around 1.8 million returns for tax year 2019 by December 13, 2019. Therefore, FBR required around one million returns during December 13 to December 31 to reach the return filing number of last tax year.

    Sources in the FBR said that the return filing date would be extended further as filing huge number during remaining days was not possible. While FBR will announce return filing date for retailers under which a general relief may be granted to all the taxpayers.

    The FBR is eying around 3.5 million returns during tax year 2019. Therefore, in order to achieve this number the FBR will need to extend the filing date.

    The last date for filing the return for tax year was extended up to August 9, 2019. Therefore, the experts believe the FBR would continue to allow taxpayers to file their returns till the desired number is achieved.

  • Banks to observe extended working hours on Dec 31 to facilitate taxpayers

    Banks to observe extended working hours on Dec 31 to facilitate taxpayers

    KARACHI: State Bank of Pakistan (SBP) on Friday announced that banks will observed extended working hours to facilitate taxpayers in payment of duty and taxes on December 31, 2019.

    In order to facilitate the collection of government receipts / duties / taxes, it has been decided that authorized branches of National Bank of Pakistan (NBP) as well as field offices of SBP Banking Services Corporation (SBP-BSC) will observe extended banking hours up to 9:00 PM on December 31, 2019 (Tuesday).

    Accordingly, NBP branches will settle their transactions with respective SBP-BSC field offices on the same day i.e. December 31, 2019 for which purpose a special clearing has been arranged at 7:00 P.M. by the NIFT.

    All banks are, therefore, advised to keep their concerned branches open on December 31, 2019 (Tuesday) till such time that is necessary to facilitate the special clearing for Government transactions, the SBP said.

  • FBR issues procedure for verification of sales tax invoice

    FBR issues procedure for verification of sales tax invoice

    KARACHI: Federal Board of Revenue (FBR) has issued procedure for verification of sales tax invoices prepared by Tier-1 retailers.

    According to FBR officials the following procedure shall be adopted for the verification of sales tax invoices.

    — Customer visits the counter to pay for his/her shopping.

    — Counter Boy Prepares the Invoice.

    — Invoice is forwarded to FBR system for invoice number.

    — Fiscal Invoice is generated and stored in FBR Sale Data Controller and returns a fiscal invoice number to POS.

    — Point of Sale (POS) generate the QR Code for fiscal invoice.

    — The receipt is printed out from the POS and physically delivered to the customer.

    — Customer receives the printed fiscal invoice and verify it from FBR System using any of proposed mode.

    The officials said that

    Tier -I retailer as defined under Section 2(43A) of Sales Tax Act 1990 are required to integrate their sales with the FBR.

    Tier-1 retailer means:-

    A retailer operating as a unit of a national or international chain of stores.

    A retailer operating in an air conditioned shopping mall plaza or centre, excluding kiosks.

    Retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds rupees six hundred thousands.

    A wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers.

    A retailer whose shop measures one thousand square feet in the area or more.

    The officials said that the integrated supplier shall prominently display on each outlet a signboard bearing FBR’s official logo along with the text “Integrated with FBR” and also registration number of each POS verifiable through FBR verification services.

    Explaining the benefits of establishing integration with the FBR, the sources said that supplies of finished fabric and locally manufactured finished articles of textile and textile made ups and leather and artificial leather shall be entitled to reduced rate of 14 per cent subject to condition they have maintained 4 percent value addition during the last six months.

    Further, customers entitled to receive a cash back of up to 5 per cent of the tax involved in the manner and to the extent as may be prescribed.

    The penalty for non-compliance by the Tier-1 retailers, the sources said that under sub section (6) of section 8B of the Act, adjustable in put tax for whole of that tax period shall be reduced by 15 percent.

    Penalty as prescribed at serial No.(19) of the section 33 of the Act besides default surcharge under section 34 of the Act.

  • Return filed on CNIC basis to be treated as registered

    Return filed on CNIC basis to be treated as registered

    KARACHI: A person files income tax return on the basis of Computerized National Identity Card (CNIC) shall be treated as registered taxpayer on the day the person files income tax return.

    The following will be treated as registered person under Income Tax Rules, 2002:

    (1) An individual having CNIC required to file return of total income manually shall be treated as registered under sub-section (4) of section 181 on the day he files the return manually.

    (2) An individual having CNIC required to e-file return of total income shall be treated as registered, when the individual is e-enrolled.

    (3) A company, an association of persons (AOP) or foreign national shall be treated as registered when the company, AOP or the foreign national, is e-enrolled.

    (4) An individual having CNIC who failed to file return, shall be registered by the Commissioner having jurisdiction on the basis of CNIC or NICOP when he is satisfied after providing opportunity to be heard that the income of the individual is taxable and is required to file return of income.

    (5) An individual not having CNIC and required to file return of total income manually shall be registered in the same manner as specified in sub-rules (1) and (4), either on application by the individual or if Commissioner is satisfied that income of individual is taxable after providing opportunity to be heard.

    (6) A company, an AOP or foreign national shall be treated as registered as per sub-rule (3), if the Commissioner, having jurisdiction over the company, an AOP or foreign national, is satisfied after providing opportunity to be heard that the company, the AOP or foreign national requires registration.

  • FBR notifies transfer, postings of 26 IRS officers in BS-17-20

    FBR notifies transfer, postings of 26 IRS officers in BS-17-20

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday notified transfers and postings of 26 officers of Inland Revenue Service (IRS) from BS-17 to BS-20 with immediate effect until further orders.

    The FBR notified transfers and postings of following officers:

    01. Mehmood Hussain Jafari (Inland Revenue Service/BS-20) on return from NMC, has been transferred Commissioner Inland Revenue (Zone-II) Regional Tax Office II, Lahore.

    02. Dr. Muhammad Sarmad Qureshi (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-IR, (Zone-IV) Corporate Regional Tax Office, Lahore.

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

    04. Ms. Fiza Batool (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-IR, (Zone-I) Regional Tax Office II, Lahore.

    05. Muhammad Taqi Qureshi (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-I) Regional Tax Office II, Lahore from the post of Commissioner-IR, (Zone-I) Regional Tax Office, Sargodha.

    06. Muhammad Majid (Inland Revenue Service/BS-20) has been transferred and posted as Chief, (Taxpayers Audit) Federal Board of Revenue (Hq), Islamabad from the post of Commissioner-IR, (Zone-II) Regional Tax Office II, Lahore.

    07. Tariq Bakhtiar (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (IP/TFD/HRM) Regional Tax Office, Peshawar from the post of Commissioner-IR, (Mardan Zone) Regional Tax Office, Peshawar.

    08. Irfan Aziz (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Mardan Zone) Regional Tax Office, Peshawar from the post of Commissioner-IR, (IP/TFD/HRM) Regional Tax Office, Peshawar.

    09. Najeeb Qadir (Cost Accountant/BS-20) has been transferred and posted as Cost Accountant, Large Taxpayers Unit, Islamabad from the post of Chief , (TPA-II) Federal Board of Revenue (Hq), Islamabad.

    10. Mirza Imtiaz Ahmed (Inland Revenue Service/BS-19) has been transferred and posted as Commissioner Inland Revenue (OPS) (IP/TFD/HRM) Large Taxpayers Unit, Islamabad from the post of Chief, (OPS) (TPA-I) Federal Board of Revenue (Hq), Islamabad.

    11. Babar Nawaz Khan (Inland Revenue Service/BS-19) has been transferred and posted as Additional Commissioner Inland Revenue Regional Tax Office, Faisalabad from the post of Additional Commissioner-IR, Corporate Regional Tax Office, Lahore.

    12. Ashfaq Ahmad (Inland Revenue Service/BS-19) has been transferred and posted as Additional Commissioner Inland Revenue Regional Tax Office, Islamabad from the post of Additional Commissioner-IR, Regional Tax Office II, Lahore.

    13. Khawar Siddique (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Commissioner Inland Revenue Large Taxpayers Unit, Lahore from the post of Deputy Commissioner-IR, Regional Tax Office II, Lahore.

    14. Muhammad Naeem Ahmad (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Commissioner Inland Revenue Large Taxpayers Unit, Lahore from the post of Deputy Commissioner-IR, Regional Tax Office II, Lahore.

    15. Umer Zeb Khan (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Commissioner Inland Revenue Regional Tax Office, Faisalabad from the post of Deputy Commissioner-IR, Corporate Regional Tax Office, Lahore.

    16. Asim Naseer (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Commissioner Inland Revenue Regional Tax Office, Islamabad from the post of Deputy Commissioner-IR, Corporate Regional Tax Office, Lahore.

    17. Khan Shahzeb Bashir (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Commissioner Inland Revenue Large Taxpayers Unit, Lahore from the post of Deputy Commissioner-IR, Corporate Regional Tax Office, Lahore.

    18. Ali Noor (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Commissioner Inland Revenue Large Taxpayers Unit, Lahore from the post of Deputy Commissioner-IR, Corporate Regional Tax Office, Lahore.

    19. Khalil Ahmed Qaiser (Inland Revenue Service/BS-17) has been transferred and posted as Assistant Commissioner Inland Revenue Regional Tax Office II, Lahore from the post of Assistant Commissioner-IR, Regional Tax Office, Bahawalpur.

    20. Ali Ahsan Warraich (Inland Revenue Service/BS-17) has been transferred and posted as Deputy Commissioner Inland Revenue Regional Tax Office, Faisalabad from the post of Deputy Commissioner-IR, Corporate Regional Tax Office, Lahore.

    21. Muhammad Adnan (Inland Revenue Service/BS-17) has been transferred and posted as Deputy Commissioner Inland Revenue Regional Tax Office, Islamabad from the post of Deputy Commissioner-IR, Corporate Regional Tax Office, Lahore.

    22. Qasim Raza Chadhar (Inland Revenue Service/BS-17) has been transferred and posted as Second Secretary, (IT Wing) Federal Board of Revenue (Hq), Islamabad from the post of Assistant Commissioner-IR, Regional Tax Office, Sargodha.

    23. Wazir Ahmed Khushik (Inland Revenue Service/BS-17) has been transferred and posted as Assistant Commissioner Inland Revenue Large Taxpayers Unit, Karachi from the post of Assistant Commissioner-IR, Regional Tax Office II, Karachi.

    24. Muhammad Siddique (Inland Revenue Service/BS-17) has been transferred and posted as Assistant Commissioner Inland Revenue Regional Tax Office, Faisalabad from the post of Assistant Commissioner-IR, Regional Tax Office II, Lahore.

    25. Muhammad Nadeem Asad (Inland Revenue Service/BS-17) has been transferred and posted as Assistant Commissioner Inland Revenue Regional Tax Office, Faisalabad from the post of Assistant Commissioner-IR, Regional Tax Office II, Lahore.

    26. Syed Abaid ur Rehman (Inland Revenue Service/BS-17) has been transferred and posted as Assistant Commissioner Inland Revenue Regional Tax Office, Sargodha from the post of Assistant Commissioner-IR, Regional Tax Office II, Lahore.

    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 urged to resolve input adjustment on payment made through BOAD

    FBR urged to resolve input adjustment on payment made through BOAD

    KARACHI: Karachi Tax Bar Association (KTBA) on Thursday urged Federal Board of Revenue (FBR) to resolve the input adjustment issue on payment made through Bill of Additional Duty (BOAD).

    The KTBA in a letter informed the FBR that it had highlighted the matter through communications dated November 27, 2013 and June 23, 2014, respectively whereby the issue of non-adjustment of input tax, paid through challan of BOAD was highlighted that a registered person remained unable to claim its input sales tax against the output sales tax.

    The KTBA informed through the instant letter that the these paid challans of BOAD were still not available in the uploadable format in the system due to which the issue was still persist.

    The tax bar pointed out that the issue had been duly addressed at the WeBOC system already and the PRAL through its communication on December 05, 2013 intimated that the provision for the requested adjustment had been made available for payment made through WeBOC system in the online sales tax return portal.

    A similar mechanism should be devised and put in place for the adjustment of sales tax paid through BOAD for challans paid through One Customs as well, which has been held pending for a considerable time period for the last five years.

    The issue needs to be addressed and resolved, the KTBA said.

  • Sindh Excise impounds 250 vehicles in campaign against tax defaulters

    Sindh Excise impounds 250 vehicles in campaign against tax defaulters

    KARACHI: Sindh Excise and Taxation Department has impounded 250 vehicles in its ongoing campaign against tax defaulting motor vehicles, a statement said on Thursday.

    Documents of around 450 vehicles have also been confiscated for various reasons. The department also recovered Rs4.4 million as provincial tax in this exercise, which will continue till January 02, 2020.

    As many as 7043 vehicles have been checked during the first two days of Road Checking Campaign of the excise department, Sindh, against tax defaulting vehicles under the direction of the provincial minister for Excise and Taxation & Narcotics Control and Parliamentary Affairs Mukesh Kumar Chawla.

    During the campaign so far 250 vehicles were seized for various reasons the documents of 450 vehicles were also confiscated and in total tax and penalty amounted to over Rs 4.4 million was collected.

    According to the details, 1999 vehicles were checked in Karachi, 1884 vehicles in Hyderabad, 1115 in Sukkur, 987 in Larkana, 680 in Mirpur Khas and 378 vehicles in Shaheed Benazirabad.

    For various reasons, papers of 180 vehicles in Karachi, 105 in Hyderabad, 31 in Sukkur, 66 in Larkana, 28 in Mirpur Khas and 40 in Shaheed Benazir Abad were confiscated while Rs 7825 in Karachi, Rs 1308638 in Hyderabad, Rs 616937 in Sukkur, Rs 1125696 in Larkana, Rs 500647 in Mirpur Khas and Rs 850737 in Shaheed Benazirabad were collected in the form of taxes and fines.

    Meanwhile the Minister for Excise and Taxation & Narcotics Control and Parliamentary Affairs, Mukesh Kumar Chawla, in a statement issued here on Thursday, has said that the road checking campaign for tax collection from the owners of tax defaulting vehicles will continue till January 2 and the owners of tax defaulting vehicles should deposit their taxes in a timely manner to avoid any unpleasant situation on the roads.

    “Timely payment of taxes is our national duty, and in doing so, we prove ourselves as a law abiding citizen,” he concluded.

  • FBR pays Rs11 billion refunds through FASTER system

    FBR pays Rs11 billion refunds through FASTER system

    ISLAMABAD: Federal Board of Revenue (FBR) has paid sales tax refunds worth Rs11 billion through its newly introduced online system since July 01, 2019.

    In a statement issued on Thursday, the FBR said that it had issued refunds through Fully Automated Sales Tax e-Refund (FASTER) system without human intervention worth Rs11 billion against claims of Rs15 billion.

    While clarifying a news report, the FBR said that the issue of liquidity problems due to imposition of Sales Tax on previously zero rated sectors was raised in the standing committee.

    The FBR acknowledged the issue and explained that in first 6 months, a total of Rs98 billion refunds have been issued as opposed to Rs31 billion in last year.

    Most of these refunds have been given to exporters including encashment of refund bonds issued last year.

    It was also emphasized that if the government on one hand has brought the export oriented sector under VAT regime, it has heavily facilitated the sectors by providing sizable subsidy on gas and electricity despite a very narrow fiscal space available to it.

    So the perception conveyed by the news item is a bit misleading and the Federal Government and FBR are trying to provide maximum facilitation to businesses in a collaborative and consultative process.