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Category: Taxation

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  • FBR, PBA to discuss, resolve access to bank accounts

    FBR, PBA to discuss, resolve access to bank accounts

    KARACHI: Federal Board of Revenue (FBR) and Pakistan Bankers Association (PBA) will discuss and resolve the matter pertaining to information of bank account holders.

    Senior officials at Large Taxpayers Unit (LTU) Karachi said at a press briefing on Wednesday.

    They said that the matter of obtaining financial transactions by account holders had been stayed by the court of law for the past many years.

    However, in the latest hearing on November 07, 2019 the court directed the FBR and PBA to find out solution and present in the next hearing i.e. November 21, 2019, they said.

    Through Finance Act, 2013 Section 165A was inserted to Income Tax Ordinance, 2001 making it mandatory for banks to provide details of transactions made by their account holders.

    As per law the banks are bound to provide details of account holders, included: a list of persons making cash withdrawal of Rs50,000 per day or over Rs1 million in a month; deposits of Rs10 million in a month; credit card payment of Rs250,000 per month; persons receiving profit on debt above Rs500,000 in a year.

    The laws in Income Tax Ordinance, 2001 have superseded other laws including Banking Companies Ordinance, 1962; the Protection of Economic Reforms Act, 1992; the Foreign Exchange Regulation Act, 1947 etc. yet the banks were not providing the details on the grounds of various excuses.

    It is interesting to note that Chairman FBR held many meetings with banks during past three months but the matter was still unresolved.

    FBR chairman Syed Shabbar Zaidi recently asked the banks to provide details of those individuals who invested in government securities through banks.

    The LTU officials said that the issue would be resolved soon and banks would start transmitting details of financial transactions made by bank account holders.

    Pakistan has large undocumented economy and undisclosed money is believed to be parked in banking system.

  • LTU Karachi identifies unregistered 100,000 commercial gas connection holders

    LTU Karachi identifies unregistered 100,000 commercial gas connection holders

    KARACHI: The Large Taxpayers Unit (LTU) Karachi on Wednesday said that it has identified over 100,000 persons having commercial gas connections but not registered with the Federal Board of Revenue (FBR).

    This was disclosed by chief commissioners of LTU Karachi at a press conference. The media interaction is part of the strategy to update about performance of tax machinery.

    Zulfiqar Memon and Girdhari Mal, the chief commissioners of the LTU Karachi, informed that the persons had been identified through data verification obtained from Sui Southern Gas Company Limited (SSGCL) and available record from tax offices.

    They said that the FBR would enforce mandatory sales tax registration on those commercial gas connection holders.

    About measures against tax evasion, they said that in the first four months of current fiscal year the unit examined financial records of companies and issued notices to around 10 companies for concealing Rs100 billion. They said that one company alone evaded Rs23 billion.

    The LTU officers said that the unit registered growth of 16 percent in revenue collection during first four months of current fiscal year. The revenue collection of the unit was Rs402.16 billion during July – October 2019/2020 as compared with Rs346.86 billion in the corresponding period of the last fiscal year.

    They attributed the revenue growth to the recent reforms initiative by the government. They said that the reforms had resulted in economic activities and subsequently rise in revenue collection.

    Sector wise major revenue contributor was banking sector followed by refineries, oil marketing companies and textile etc.

    The LTU Karachi has jurisdiction over 5,056 big turnover units. As per criteria the LTU Karachi will have jurisdiction over a company having over Rs400 million turnover or Rs20 million as tax contribution in a year.

    Talking about the recent reforms initiatives by the government including proposed formation of Pakistan Revenue Authority (PRA), the officials said that the filed units were not against the government plan.

    However, they said, the FBR chairman had assured to address grievances of tax employees related to reform program.

  • FBR notifies transfers, postings of IR officers

    FBR notifies transfers, postings of IR officers

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday announced transfers and postings of Inland Revenue (IR) officers in BS-18-20 with immediate effect and until further orders.

    The FBR notified transfers and postings of following officers:

    01. Sajjad Taslim Azam (Inland Revenue Service/BS-20) is presently posted as Commissioner-IR, (Jhang Zone) Regional Tax Office, Faisalabad. He is assigned the additional charge of the post of Commissioner-IR (IP/TFD/HRM), RTO, Faisalabad in addition to his own duties.

    02. Muhammad Saleem (Inland Revenue Service/BS-19) has been transferred and posted as Commissioner Inland Revenue (OPS) (IP/TFD/HRM) Regional from the post of Tax Office, Multan Commissioner-IR, (OPS) (IP/TFD/HRM) Regional Tax Office, Faisalabad.

    03. Sahibzada Umar Riaz (Inland Revenue Service/BS-19) has been transferred and posted as Secretary, (IR Operations Wing) Federal Board of Revenue (Hq), Islamabad from the post of Additional Commissioner-IR, Regional Tax Office II, Lahore.

    04. Abdul Rehman Khilji (Inland Revenue Service/BS-19) has been transferred and posted as Additional Commissioner Inland Revenue Large Taxpayers Unit, Karachi from the post of Additional Commissioner-IR, Corporate Regional Tax Office, Karachi.

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

    06. Ms. Birjees Fayyaz (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Commissioner Inland Revenue Large Taxpayers Unit, Karachi from the post of Deputy Commissioner-IR, Regional Tax Office II, Karachi.

    07. Shah Bahar (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Commissioner Inland Revenue Large Taxpayers Unit, Islamabad from the post of Deputy Commissioner-IR, Regional Tax Office, Islamabad

    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.

  • Complete list of withholding tax rates for tax year 2020

    Complete list of withholding tax rates for tax year 2020

    ISLAMABAD: Following is the complete list of withholding tax rates applicable for tax year 2020. The rates have been updated by the Federal board of Revenue (FBR) till June 30, 2019.

    The withholding tax card also included the 100 percent higher tax rates for persons not on the Active Taxpayers List (ATL).

  • FBR officials warned of disciplinary action for non-observance of office timings

    FBR officials warned of disciplinary action for non-observance of office timings

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday warned of disciplinary action to its officers and officials for not observing office timing.

    A circular issued by the FBR stated that the authority had notices with great concern that some officers/officials of FBR Headquarters and its field formations were not observing office timings.

    “FBR HQ is consistently advising in the past to observe the office timings, however, complaints are being still received for non-observance of office timing.”

    The FBR directed all the officers/officials of FBR HQ and its field formations to strictly observe the notified office timings and facilitate the public, otherwise, strict disciplinary action would be taken against delinquents under E&D Rules, 1973.

  • Applicable withholding sales tax rates on various supplies

    Applicable withholding sales tax rates on various supplies

    KARACHI: Federal Board of Revenue (FBR) has notified withholding sales tax rates to be deducted / collected on various supplies by withholding agents.

    The FBR recently updated Sales Tax Act, 1990 and updated sales tax rates to be collected on various supplies under sub-section 7 of section 3 of the Act.

    The tax shall be withheld by the buyer at the rate as specified in the Eleventh Schedule, by any person or class of persons as withholding agent for the purpose of depositing the same, in such manner and subject to such conditions or restrictions as the Board may prescribe in this behalf through a notification in the official Gazette.

    Following rate of withholding sales tax shall be applicable:

    01. 1/5th of Sales Tax as shown on invoice to be collected from registered persons by (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)

    02. 1/10th of Sales Tax as shown on invoice to be collected from person registered as a wholesaler, dealer or distributor by (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)

    03. Whole of the tax involved or as applicable to supplies on the basis of gross value of supplies from unregistered persons by Federal and provincial government departments; autonomous bodies; and public sector organizations

    04. 5 percent of gross value of supplies from unregistered persons by companies as defined in the Income Tax Ordinance, 2001 (XLIX of 2001)

    05. Whole of sales tax applicable from person providing advertisement services by registered persons as recipient of advertisement services

    06. Whole of sales tax applicable from unregistered persons by registered persons purchasing cane molasses.

    The rates for withholding or deduction by the withholding agents not applicable to 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.

  • Prime minister forms committee to resolve tax challenges for construction industry

    Prime minister forms committee to resolve tax challenges for construction industry

    ISLAMABAD: Prime Minister Imran Khan on Monday constituted a committee for formulation of proposals to resolve challenges of federal and provincial taxes faced by construction industry.

    The committee will be headed by Naya Pakistan Housing Authority Chairman Lt Gen (R) Anwar Ali Haider.

    The prime minister was chairing a high level meeting regarding the revival and promotion of construction sector. The meeting was briefed in detail about the challenges faced by the sector.

    According to state news media the prime minister highlighted the significance of construction sector in boosting economic activities and said the present government had given a lot of importance to the sector, which would help realize the project of five million housing units.

    The meeting was attended by Punjab Chief Minister Usman Buzdar, Khyber Pakhtunkhwa Chief Minister Mehmood Khan, Punjab Finance Minister Makhdoom Hasham Jawan Bakht, Punjab Housing Minister Mian Mehmood-ur-Rasheed, Balochistan Finance Minister Zahoor Ahmad Bulaidi, FBR Chairman Syed Shabbar Zaidi, Board of Investment Chairman Syed Zubair Haider Gilani, Planning Commission Deputy Chairman Jahanzeb Khan, Naya Pakistan Housing Authority Chairman Lt Gen (R) Anwar Ali Haider and senior federal and provincial governments’ officers.

    The prime minister said the promotion of construction sector was the government’s foremost priority, adding since around 40 industries were allied with it, the promotion of construction sector besides developing those industries would also create job opportunities for youth.

    The meeting discussed in detail various proposals regarding the provision of bank loans, uniform implementation of taxes and promotion of public-private partnerships for the construction sector.

    The prime minister was briefed about the problems faced by the builders, contractors, developers and real estate businesses, especially, the ratio of federal and provincial taxes, difficulties in the provision of capital from banks, problems regarding registration, other official procedures and corruption.

    Other members of the committee included the Federal Board of Revenue (FBR) chairman, Governor State Bank, Punjab finance minister, provincial chief secretaries and other relevant officers.

    The prime minister directed the committee to submit a strategy along with recommendations to address the problems about taxes, provision of loans from banks and other difficulties faced by the construction sector within the next 24 hours.

  • Return filing hits new peak of 2.676 million on ATL conditions

    Return filing hits new peak of 2.676 million on ATL conditions

    ISLAMABAD: The condition of 100 percent higher withholding tax rates for persons not appearing on Active Taxpayers List (ATL) increased the income tax return filing for tax year 2018 to a new peak of 2.676 million by November 10, 2019.

    According to weekly ATL for tax year 2018 issued by Federal Board of Revenue (FBR) on Monday the number of return filers increased to 2.676 million till November 10, 2019 as compared with 2.667 million till returns filed as on November 03, 2019.

    So far the return filing grew by 45.43 percent in tax year 2018 when compared with 1.84 million returns received by the FBR for tax year 2017.

    The appearance of taxpayers on ATL guarantees the lower rate of withholding tax to be collected on various transactions.

    Through Finance Act, 2019 Tenth Schedule was introduced to Income Tax Ordinance, 2001 under which persons not appeared on the ATL, even filed the return, would liable to pay 100 percent more withholding tax amount.

    The FBR issues ATL on every year on March 01 on the basis of return filed by taxpayers by due date for relevant tax year.

    The FBR issued latest ATL on March 01, 2019 on the basis of returns filed for tax year 2018. Since the date for filing returns extended up to August 09, 2019 for tax year 2018, the names of those return filers were added to the updated ATL.

    By August 09, 2019 the number of return filers was increased to 2.5 million. However, additional 0.167 million returns were been filed after payment of late filing surcharge.

    The FBR in an explanatory note said that restriction on including a person’s name on ATL, if the person has not filed Tax Return by the due date specified by Income tax authorities was introduced through Finance Act, 2018.

    However, through Finance Act, 2019 a person’s name can be part of ATL, even if the person has filed Tax Return after the due date specified by Income Tax authorities, the FBR said.

    Furthermore, it added, a surcharge for placement on ATL after due date of filing of Tax Return will be charged at Rs1,000 from individuals, Rs10,000 from Association of Persons (AOPs) and Rs20,000 from companies.

    FBR sources said that people were filing their income tax returns for tax year 2018 along with late surcharge, despite the due date for tax year 2019 had been prescribed, for avoiding 100 percent withholding tax rates.

    They said that the current ATL would remain applicable till February 29, 2020 as new ATL on the basis of return filed for tax year 2019 would be issued on March 01, 2020.

  • Tax rules for computation of profits, gains of insurance business

    Tax rules for computation of profits, gains of insurance business

    KARACHI: Federal Board of Revenue (FBR) has issued updated rules for the computation of profits and gains of the insurance business under Income Tax Ordinance, 2001.

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  • FBR receives information of car buyers from withholding agents

    FBR receives information of car buyers from withholding agents

    ISLAMABAD: Federal Board of Revenue (FBR) has received information of persons who purchased motor vehicles during tax year 2019.

    The tax authorities will cross check the sale or purchase of motor vehicles through income tax returns for tax year 2019, which can be filed by November 30, 2019.

    The FBR sources said that the tax authorities had received information of persons who purchased motor vehicles 1,000 CC and above.

    A person is required to file income tax returns if he purchases a motor car in a tax year irrespective of his taxable income falls below or above the threshold.

    The sources told PkRevenue.com that the FBR received the information car manufacturers, dealers of motor vehicle, registration authorities, bank and leasing companies.

    They said that these withholding agents are required to furnish withholding statements, which must contain information of sales or lease of motor vehicles.

    The withholding agents have provided details of persons included: name, NTN/CNIC, registration number of the motor vehicle, motor vehicle make/model/engine capacity/year of manufacture, date of first registration of vehicle in Pakistan, registered capacity/laden weight of the vehicle, ex-factory price of motor vehicle.