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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.

  • Tax slabs increased for rental income from properties

    Tax slabs increased for rental income from properties

    KARACHI: The government has revised tax slabs for rental income from property to eight from five.
    Experts at Deloitte Pakistan Chartered Accountants said that the Finance Bill 2019, proposed the increase in the number of tax slabs from five to eight.
    Three new tax slabs are proposed for income exceeding Rs4,000,000 to match the maximum rate with that of the individual tax rates.
    Rates of tax on income from property, based on the finance bill, shall be as follows:
     

    S. No. Gross Amount of Rent Rate of Tax
    1.Where the gross amount of rent does not exceed Rs.200,000.Nil
    2.Where the gross amount of rent exceeds Rs.200,000 but does not exceed Rs. 600,000.5 per cent of the amount exceeding Rs. 200,000.
    3.Where the gross amount of rent exceeds Rs.600,000 but does not exceed Rs. 1,000,000.Rs. 20,000 plus 10 per cent of the amount exceeding Rs. 600,000.
    4.Where the gross amount of rent exceeds Rs.1,000,000 but does not exceed Rs. 2,000,000.Rs. 60,000 plus 15 per cent of the amount exceeding Rs. 1,000,000.
    5.Where the gross amount of rent exceeds Rs.2,000,000 but does not exceed Rs. 4,000,000.Rs. 210,000 plus 20 per cent of the amount exceeding Rs. 2,000,000.
    6.Where the gross amount of rent exceeds Rs.4,000,000 but does not exceed Rs. 6,000,000.Rs. 610,000 plus 25 per cent of the amount exceeding Rs. 4,000,000.
    7.Where the gross amount of rent exceeds Rs.6,000,000 but does not exceed Rs. 8,000,000.Rs. 1,110,000 plus 30 per cent of the amount exceeding Rs. 6,000,000.
    8.Where the gross amount of rent exceeds Rs. 8,000,000.Rs. 1,710,000 plus 35 per cent of the amount exceeding Rs. 8,000,000.
  • FBR proposes massive increase in valuations of Lahore immovable properties

    FBR proposes massive increase in valuations of Lahore immovable properties

    ISLAMABAD: Federal Board of Revenue (FBR) has proposed massive increase in valuations of immovable properties in Lahore to be effective from July 01, 2019.

    The FBR about two days back issued valuation tables of immovable properties in 18 cities of Pakistan. The FBR invited comments and suggestions on the proposal from the stakeholders before implementing those by July 01, 2019.

    A cursory look on the proposed valuation of immovable properties in Lahore suggested that the FBR was planning to generate a sizeable revenue from sales and purchase of immovable properties during next fiscal year.

    The increase in valuation is not uniform as it was done by the FBR by increase valuation by 20 percent through SROs issued in February 2019.

    The FBR now proposed locality based increase in valuation and the increase may be over 100 percent increase on the existing valuations.

    The comparative valuations of immovable properties in Lahore are given below so readers can measure the quantum of increase:

    In the proposed valuation the FBR given separate valuation of commercial and residential immovable properties. Besides, a new concept of valuation of immovable properties has been introduced for properties up to five years and properties above five years old.

  • Sindh adds 13 new services to provincial sales tax

    Sindh adds 13 new services to provincial sales tax

    KARACHI: The Sindh government has included 13 new services for the collection of sales tax from July 01, 2019.

    According to PwC A F Ferguson Chartered Accountants following services are proposed to trigger Sindh Sales Tax (SST) effective July 1, 2019:

    1. Renting of machinery, equipment, appliances and other tangible goods.

    2. Indoor sports and games center.

    3. Services provided or rendered by cab aggregator and owners or drivers of motor vehicles using the cab aggregator services.

    4. Warehouses or depots for storage or cold storages.

    5. Training services.

    6. Actuarial services.

    7. Services of mining of minerals and allied ancillary services

    8. Site preparation and clearance, excavation and earth moving and demolition services

    9. Waste collection, transportation, processing and management services

    10. Vehicle parking and valet services

    11. Electric power transmission services

    12. Insurance agents

    13. Tailoring and stitching services by fashion designers.

    For the purpose of taxing new services, certain definitions are proposed in the Finance Bill 2019.

    The chartered accountants said that no definitions have been proposed for ‘services of mining of mineral and allied & ancillary services in relation thereto’ and ‘electric power transmission services’.

    In the definition of training services, exclusion is proposed for ‘coaching or training of sports’ which is apparently for promotion of sports.

  • Withholding agents to be liable to pay tax on failure to deduct Sindh sales tax

    Withholding agents to be liable to pay tax on failure to deduct Sindh sales tax

    KARACHI: The Sindh government has proposed legislation to make withholding agents responsible to pay tax on which he fails to deduct or fails to deposit deducted amount to provincial kitty.

    The Sindh Finance Bill 2019 proposed that the withholding agent is personally liable if he either fails to deduct tax or having deducted tax fails to deposit the tax in the government treasury which is revocable along with default surcharge, according to a commentary on Sindh Budget 2019/2020 released by PwC A F Ferguson Chartered Accountants.

    They said that it may be noted that Section 47(1B) already provides for collection of any tax short withheld or collected from the withholding agent which has been challenged in courts on various grounds.

    “Hence, the apparent purpose of bringing the said provision within Section 13 in this Finance Bill may also be examined in that context,” they said.

    The government while imposing liability on withholding agents needs to cover a situation where the person from whom tax was not deducted has already paid the tax before initiation of recovery from the withholding agent.

    In such situation, there should be no recovery of principal amount of tax from the withholding agent who failed to deduct the tax from the payment.

    A clarification to this effect is required to be inserted by way of an explanation so that such amendment would avoid unnecessary litigation as to the double recovery of tax from the withholding agent as well from the registered service provider, they said.

  • Sindh tax on online taxi service creates anomaly

    Sindh tax on online taxi service creates anomaly

    KARACHI: The levy on online taxi services introduced by Sindh government has created an anomaly as those taxi services not connected to ‘cab aggregator’ will remain outside the ambit of this tax, tax experts said.

    The Sindh Finance Bill 2019 has proposed to tax services of the “Cab Aggregator” including the services provided or rendered by the owners or drivers of the motor vehicle using the cab aggregator services.

    The rate of tax is 13 per cent on total consideration for providing or rendering such services from July 1, 2019 onwards.

    The bill also defines “cab aggregator” to mean a person who is an aggregator or operator or intermediary or online marketplace who canvasses or solicits or facilitates passengers for travel by motor vehicles like tax, cab, car, van, motor cycle and rickshaw, and who connects the passenger or the intending passenger to a driver of any of the aforesaid motor vehicles through telephone cellular phone, internet, web-based services or GPS or GPRS-based services, electronic or digital means, whether or not he charges or collect any fee, fare, commission, brokerage or other charges or consideration for providing or rendering such services.

    “The aforesaid insertion in taxable services has created an anomaly whereby motor vehicles, like taxi, cab, car, van, motor cycle and rickshaw not connected to a cab aggregator will remain outside the ambit of such tax,” said PwC A F Ferguson Chartered Accountants in a commentary on Sindh Budget 2019/2020.

    They said that it appears that the aforesaid services will become uncompetitive compared to services of cabs, taxi, rickshaw etc. which are not connected to a cab aggregator.

    “Due to complex nature of operations, special procedure rules for chargeability and collection of tax on such services is required to be introduced separately,” they added.

  • FBR displays assets information of people on its portal

    FBR displays assets information of people on its portal

    ISLAMABAD: Federal Board of Revenue (FBR) has made public the information of assets and transactions of people on its official portal in order to aware people to understand their responsibility for paying taxes.

    The FBR posted the information of asset inquiry at https://iris.fbr.gov.pk/public/txpAILogin.xhtml so people can access to the database about what the FBR had information about them.

    The access to database has been made secured with login and password. A person can access to the information by providing CNIC number.

    The FBR said that once a person logged in he would able to view the information including assets and transactions made by him through various sources.

    FBR sources said that the purpose of displaying the information was to ensure people that the tax authorities had sufficient information to take harsh measures against non-compliant taxpayers.

    The sources said that if a person believes that any asset or transactions does not belong to him then he should contact the FBR for the rectification.

    The FBR asked those people having undeclared assets and money to avail the Asset Declaration Scheme on or before June 30, 2019 in order to avoid action by tax authorities.

    It also said that the information at its website was posted so people should not have confusion about future course of action by the FBR.

  • FBR increases goods declaration processing charges by 100 percent

    FBR increases goods declaration processing charges by 100 percent

    KARACHI: Federal Board of Revenue (FBR) has increased services charges by 100 percent for processing each goods declaration (GD) through customs computerized system.

    The FBR issued SRO 637(I)/2019 to amend its previous SRO 1053(I)/2011 dated November 16, 2011 and enhanced the service charges to Rs500 from Rs250 for processing each GD under the Pakistan Customs Computerized System.

    On May 07, 2013 another SRO 388(I)/2013 was issued to levy Rs24,000 per GD as service charges for processing of US and NATO led ISAF cargo under Web Based One Customs (WeBOC).

    The said service charges shall be increased 10 percent annually and for this purpose the date of commencement as mentioned in the Customs General Order 10 of 2012 shall be reckoned as reference date.

  • FBR to implement new valuations of immovable properties from July 01

    FBR to implement new valuations of immovable properties from July 01

    ISLAMABAD: Federal Board of Revenue (FBR) has issued draft valuation of immovable properties for various cities, which will be applicable from July 01, 2019.

    The FBR issued the draft valuation tables for various cities for views and comments and asked the stakeholders to submit their input / feedback by June 30, 2019.

    The new revised rates are intended to be applicable from July 01, 2019.

  • FBR to launch crackdown against benami properties from three major cities

    FBR to launch crackdown against benami properties from three major cities

    ISLAMABAD: Federal Board of Revenue (FBR) will launch major crackdown against Benami assets from three major cities including Islamabad, Karachi and Lahore, a statement said on Friday.

    It said that The Benami Transactions (Prohibition) Act, 2017 has become operative since March, 2019. Federal Board of Revenue is the focal authority under this Act. The matter of proper implementation of Benami Transactions (Prohibition) Act, 2017 will be monitored by the Chairman.

    Administrative structure has been set up to implement the Benaami Act-2017. In this regard, an Adjudicating Authority is being formed and Benaami Zones are being established which will become effective very soon. Initially Benaami Zones will be established in three big stations Karachi, Lahore and Islamabad.

    A person can avail Assets Declaration Ordinance- 2019 before 30th June if he has not declared the Benaami properties yet. In case of non-compliance, he will be held accountable under Banaami Act-2017.

    Ms. Nausheen Javaid Amjad, Member Taxpayers Audit, FBR (HQ), Islamabad is the National Coordinator for implementation of Benami Transactions (Prohibition) Act, 2017.

  • Owners of undeclared 13,193 luxury vehicles warned of harsh punishment

    Owners of undeclared 13,193 luxury vehicles warned of harsh punishment

    KARACHI: Federal Board of Revenue (FBR) has warned the owners of luxury motor vehicles of harsh punishment in case they are remained non compliant and failed to declare these vehicles under Asset Declaration Scheme.

    In this regard the Regional Tax Office (RTO)-II Karachi has obtained details of 13,193 luxury vehicles from Excise and Taxation department Sindh.

    The owners of such vehicles have been living luxurious life without paying due taxes. The break up is under: Hilux/Vigo 9230; Land Cruisers 1605; Prado 1970; Audi 45; Mercedes Benz 272; and BMW 71.

    The owners have been informed by the RTO-II regarding the opportunity provided by Assets Declaration Ordinance 2019 to disclose such vehicles and other undeclared or Benami Assets by the June , 2019 to avoid confiscation and imprisonment up to seven years.