ISLAMABAD – The Federal Board of Revenue (FBR) issued a cautionary alert on Monday, raising concerns about the potential transportation of smuggled vehicles during a political rally organized by the Jamiat Ulema-e-Islam-Fazl (JUI-F).
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FBR reminds banks of providing complete information of account holders
ISLAMABAD: Federal Board of Revenue (FBR) has issued reminder to banks for complying with the certain regulatory regime and provide complete information of account holders.
Chairman Federal Board of Revenue (FBR) Syed Muhammad Shabbar Zaidi issued a letter to the Heads of all banks wherein reference to the earlier sent letter dated October 1, 2019 has been given and it has been stated that bank’s role is to act as a trustee/ custodian on behalf of the various customers for the acquisition of T-Bills, PIBs etc.
No information in this respect has been received so far.
This reminder letter is being written for the reason that FBR is obliged to ensure in order to comply with various regulatory requirements including those inducted by FATF that there is proper compliance of various regulatory environments.
There are indications in various cases, especially being those related to individuals that the amount held under these accounts are not appropriately disclosed in the individual personal income tax returns.
Chairman FBR has further stated that there are instances of ‘Bond Washing’ whereby the ‘interest accrued’ is transposed as capital gain to avoid withholding requirement on interest where State Bank of Pakistan is to act as withholding agent.
Chairman FBR has stated that such securities are acquired by persons other than banks by under ‘Investor Portfolio Securities’(IPS) system.
State Bank of Pakistan identifies the bonds and securities held by the bank as custodian or trustee of another entity including an individual.
It is for this reason that the amount is reflected as an off-balance sheet item in the records and financial statement of the bank.
It is important to note that since the investment remain off-balance sheet therefore it is highly important for the fiscal regulatory authority to ensure that all related fiscal aspect being disclosure of wealth and withholding as required under the law is assured.
Chairman FBR has again requested all the banks to provide the information as soon as possible.
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FBR bars officials from interacting with taxpayers; notification issued
ISLAMABAD: As per the directives of Syed Shabbar Zaidi, chairman, Federal Board of Revenue (FBR), an official notification has been issued on Monday to bar tax officials from direct interaction with taxpayers.
The official memorandum sent to offices of Inland Revenue and Pakistan Customs, the FBR said that the ban has been imposed keeping in view the prevailing perception of FBR and also to do away with fake communication from some quarters and to build the confidence level taxpayers.
It has been decided that no officer/official of the FBR Headquarters or its field formation will contact any taxpayer or businessman in any form i.e. physical visit, telephonic/mobile calls, SMS or email etc. except when legally authorized to do so. However, the authorized communication will only be made through legal notice or official communication with QR Code/Bar code, the FBR added.
The FBR said that the policy would come into force from November 01, 2019 and any officer/official found indulged in such activities would be proceeded under the Government Servant (Conduct) Rules, 1964 read with Government Servant (E&D) Rules, 1973.
The notification said that the directives would apply to all formations of FBR being Inland Revenue (Income Tax, Sales Tax and Federal Excise Duty) and Customs.
The FBR advised taxpayers, business community and trade bodies to assist in implementing the policy by reporting to FBR any contravention of these directives.
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Income tax return filing rises to record high of 2.66 million
ISLAMABAD: The income tax return filing has increased to record high of 2.66 million for tax year 2018, according to returns filed up to October 27, 2019 for the said tax year.
Officials of Federal Board of Revenue (FBR) attributed the record high to 100 percent higher withholding tax imposed on persons not appearing on Active Taxpayers List (ATL).
The official said that around 150,000 – 200,000 returns, which were filed manually, were still not added to the ATL. The addition of these returns will further increase the total number of filed returns for tax year 2018.
The FBR received around 1.84 million annual income tax returns for tax year 2017. This means the return filing registered 45 percent so far for tax year 2018.
Through Finance Act, 2019 the 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 0.16 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 officials 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.
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FBR may get trade details of past five years from customs clearing agents
In a bid to strengthen efforts against money laundering and enhance transparency in trade transactions, the Federal Board of Revenue (FBR) is reportedly considering a directive to customs clearing agents to furnish details of importers and goods declarations filed over the past five years.
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Purchase of assets made must through banking instruments
KARACHI: Federal Board of Revenue (FBR) has made mandatory purchase of assets of certain amounts through banking instruments, including crossed cheque or crossed pay order.
FBR sources said that in order to discourage undocumented economy the government had made changes in Income Tax Ordinance, 2001 through Finance Act, 2019.
A new Section 75A to the Income Tax Ordinance, 2001 has been inserted under which:
(1) no person shall purchase-
(a) immovable property having fair market value greater than five million Rupees; or
(b) any other asset having fair market value more than one million Rupees,
otherwise than by a crossed cheque drawn on a bank or through crossed demand draft or crossed pay order or any other crossed banking instrument showing transfer of amount from one bank account to another bank account.
(2) For the purposes of this section in case of immovable property, fair market value means value notified by the Board under sub-section (4) of section 68 or value fixed by the provincial authority for the purposes of stamp duty, whichever is higher.
(3) In case the transaction is not undertaken in the manner specified in sub-section (1),
(a) such asset shall not be eligible for any allowace under sections 22, 23, 24 and 25 of this Ordinance; and
(b) such amount shall not be treated as cost in terms of section 76 of this Ordinance for computation of any gain on sale of such asset.
The FBR officials said that any person who purchases immovable property having fair market value greater than rupees five million through cash or bearer cheque then such person shall pay a penalty of five percent of the value of property determined by the Board under sub-section (4) of section 68 or by the provincial authority for the purpose of stamp duty, whichever is higher.
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Tourists allowed temporary import of vehicles
KARACHI: Tourists visiting Pakistan are allowed to import vehicles temporarily with certain conditions under Customs Rules 2001.
According to the customs rules, a tourist who imports a vehicle against carnet-de-passage or a bank guarantee may be given delivery thereof by the officer-in-charge of the Customs station of entry without payment of customs-duties for its retention in Pakistan for a period of three months.
However, such tourist is required to make a declaration at the Customs-station of entry to the effect that he will not constructively or substantially transfer the ownership of the vehicles to any other person during his stay in Pakistan:
Provided that if it is not practicable for the tourist to export such vehicle within the said period and he makes an application to the Federal Board of Revenue (FBR) before the expiry of that period to this effect, the FBR may extend that period not exceeding three months:
Provided further that if the same vehicle re-enters Pakistan within one year after its exit, whether in the name of the same tourist (non-Pakistani) or in the name of somebody else (non-Pakistani) temporary release shall not be allowed against carnet-de-passage or a bank guarantee for more than fourteen days except for vehicles operated by recognized foreign tour agencies which shall be allowed re-entry within one year for a period not exceeding three months at one point of time.
Where the export of such vehicle is not possible on grounds of health of the importer, or in circumstances beyond his control, or because of an accident in which the vehicle is involved, the FBR may extend the period not exceeding six months, in which case a fresh bank guarantee shall be furnished if the existing bank guarantee does not cover the period of extension:
Provided that if the importer wishes to retain such vehicle beyond period for which permission for retention has been allowed, he shall obtain an import permit from the Ministry of Commerce and shall pay the Customs-duties and taxes leviable thereon on the date of its import.
If a tourist imports a vehicle for passage through Pakistan to a foreign destination, the officer-in-charge of the Customs-station of entry may, in the absence of carnet-de-passage or a bank guarantee, allow the vehicle to pass through Pakistan without payment of customs duties under escort form the Customs station of entry to the Customs-station of exit on payment of escort charges to be determined by the respective Collector.
The particulars of the vehicle so allowed to pass through Pakistan shall be endorsed on the passport of the importer.
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Sales tax officers authorized to attach immovable property of defaulters
KARACHI: Federal Board of Revenue (FBR) has authorized officers of Inland Revenue to attach immovable property of a sales tax defaulter for recovery of amount.
According to Rule 112 of Sales Tax Rules, 2006, attachment of the immovable property of the defaulter shall be made, by the recovery officer, by an order prohibiting the defaulter from transferring or subjecting the property to a charge in any manner and prohibiting all persons from taking any benefit under such transfer or charge.
In order to attach immovable property, a copy of the order of attachment shall be served on the defaulter.
The FBR said that the order of attachment shall be proclaimed on or adjacent to the property attached by affixing a copy of order of attachment at a conspicuous place and a copy of the same shall also be affixed at the notice board in the office of the Recovery Officer.
Sale and proclamation of sale
(l) The Recovery Officer may direct that any immovable property, which has been attached, or such portion thereof, as may be necessary to satisfy the demand note, shall be sold if the amount due is not otherwise recoverable.
(2) Where an immovable property is ordered to be sold, the Recovery Officer shall cause a proclamation to be made in the same manner as provided in rule104.
Contents of proclamation of sale
(1) A proclamation of sale of immovable property shall be drawn after proclamation of attachment and shall specify therein the time and place of sale and also specify—
(a) the location of property to be sold;
(b) as fairly and accurately as possible, the revenue or rent, if any, assessed upon the property or any part thereof; and
(c) the Government due for the recovery of which the sale is ordered.
(2) The proclamation may also specify any other thing which the Recovery Officer considers material for a purchaser to know in order to judge the nature and value of the property.
No sale of immovable property shall, without the consent in writing of the defaulter, take place until after the expiration of thirty days from the date on which copy of the proclamation of sale was affixed on the property or in the office of the recovery officer, whichever is later.
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Preventive Karachi announces auction of used vehicles on Oct 29
The Model Customs Collectorate (MCC) Preventive, Karachi, has declared an auction of used vehicles scheduled to take place on October 29, 2019, at various locations.
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FBR receives 0.92 million income tax returns by Oct 25
ISLAMABAD: Federal Board of Revenue (FBR) received 0.92 million income tax returns for tax year 2019 by October 25, 2019, Syed Shabbar Zaidi, Chairman, FBR said on Friday.
He said that the income tax return filing has registered growth of 58 percent so far. According to data of Pakistan Revenue Automation Private Limited (PRAL) the FBR had received 0.585 million income tax returns for the tax year 2018 as of October 25, 2018.
The chairman said that the FBR had received 332,818 additional income tax returns for tax year 2019 so far.
The last date for filing income tax returns for tax year 2019 is October 31, 2019 as it was already extended for one month from September 30, 2019.
The income tax return filing for tax year 2019 has increased to above 2.6 million.