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.
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday explained the amendment of Federal Excise Duty (FED) on imported and locally manufactured vehicles through Finance Supplementary (Second Amendment) Act, 2019.
The FBR said that Serial Number of Table 1 of the First Schedule to the FED Act, 2005 had been amended and duty of the imported motor vehicles of 1800 cc to 3000cc had been enhanced to 25 percent ad valorem.
Further, a new Serial Number 55A has been inserted whereby rate of federal excise duty has been enhanced to 30 percent ad valorem on import of motor cars, SUVs and other motor vehicles of cylinder capacity of 3000cc of above (other than those vehicles as designed for the transport of 10 or more persons.
The FBR said that federal excise duty on locally manufactured cars SUVs etc. of engine capacity exceeding 1700CC and above at 10 percent ad valorem had also been introduced.
ISLAMABAD: Federal Board of Revenue (FBR) has assigned Broadening of Tax Base (BTB) Zones to initiate cases against Benami properties and directed to submit challan within 120 days.
The FBR on Wednesday said Benami Transactions (Prohibition) Rules, 2019 have been enforced with immediate effect and BTB zones of Inland Revenue Service have been assigned the duty to establish cases against Benami properties and submit challan to Adjudication Authority within 120 working days.
After Implementation of Benami Transactions (Prohibition) Rules, 2019.The Federal Board of Revenue (FBR) has clarified that a Benami property means any property which is subject matter of Benami transaction and also includes proceeds from such property.
Benami transaction encompasses where a property is transferred to, or is held by, a person and the consideration for such property has been provided, or paid by, another person ( the trustees and wife, children, brother or sister to whom property has been transferred from known resources will be excluded);
A transaction or arrangement in respect of a property carried out or made in a fictitious name; or a transaction or arrangement in respect of a property where the owner of the property is not aware of, or denies knowledge of, such ownership; or a transaction or arrangement in respect of a property where the person providing the consideration is not traceable or is fictitious.
The potential types of Benami properties include plots, houses, shopping plazas, shops, housing schemes, bank accounts, vehicles, business shares, jewellery, foreign currency, legal documents and intangible properties having financial value.
During this period, sale, purchase and transfer of property will be banned till further orders.
Appeal against the decision of Adjudication Authority can be lodged with the Federal Tribunal and after the decision of the Federal Tribunal such properties will be confiscated and sold out by the federal government.
Furthermore, if the crime of Benami transactions proved, criminal proceedings will be initiated against accused persons and where proven guilty, rigorous imprisonment of one year to seven years can be awarded to such persons. Similarly, persons providing false and baseless information can also be sentenced to rigorous imprisonment of six months to five years.
In this regard, the whistleblowers will be entitled to a cash reward for providing credible information leading to detection of Benami property or transaction. If property is worth Rs.2,000,000 or less, five percent of price of Benami property will be given to informer.
If property’s worth is more than Rs.2,000,000 or 5,000,000, four percent of Benami property will be given to informer and where the value of property will be more than Rs.5,000,000, three percent of Benami property will be given to informer.
It is clarified that this reward will be given only if the information provided is of value and FBR doesn’t already have it and the information was not available in public records and appeal against confiscation of property has attained finality.
KARACHI: Federal Board of Revenue (FBR) has made manufacturers responsible for collecting advance tax on sales to distributors, dealers and wholesalers.
The tax has been imposed under Section 236G of Income Tax Ordinance, 2001.
Section 236G: Advance tax on sales to distributors, dealers and wholesalers
Sub-Section (1): Every manufacturer or commercial importer of electronics, sugar, cement, iron and steel products, fertilizer, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector, at the time of sale to distributors, dealers and wholesalers, shall collect advance tax at the rate specified in Division XIV of Part IV of the First Schedule, from the aforesaid person to whom such sales have been made.
The rate of collection of tax under section 236G shall be as follows:-
Category of Sale
Rate of Tax
Filer
Non-Filer
Fertilizers
0.7 percent
1.4 percent
Other than Fertilizers
0.1 percent
0.2 percent
Sub-Section (2): Credit for tax collected under sub-section (1) shall be allowed in computing the tax due by the distributor, dealer or wholesaler on the taxable income for the tax year in which the tax was collected.
Section 236H: Advance tax on sales to retailers
Sub-Section (1): Every manufacturer, distributor, dealer, wholesaler or commercial importer of electronics, sugar, cement, iron and steel products, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector, at the time of sale to retailers, “and every distributor or dealer to another wholesaler in respect of the said sectors”, shall collect advance tax at the rate specified in Division XV of Part IV of the First Schedule, from the aforesaid person to whom such sales have been made.
The rate of collection of tax under section 236H on the gross amount of sales shall be as follows:-
Category of sale
Rate of tax
Filer
Non-Filer
(1)
(2)
(3)
Electronics
1 percent
1 percent
Others
0.5 percent
Sub-Section (2): Credit for the tax collected under sub-section (1) shall be allowed in computing the tax due by the retailer on the taxable income for the tax year in which the tax was collected.
Section 236HA: Tax on sale of certain petroleum products
Sub-Section (1): Every person selling petroleum products to a petrol pump operator or distributor, where such operator or distributor is not allowed a commission or discount, shall collect advance tax on ex-depot sale price of such products at the rate specified in Division XVA of Part IV of the First schedule.
The rate of collection of tax under section 236HA shall be 0.5 percent of ex-depot sale price for filers and 1 percent for non-filers.
Sub-Section (2): The tax deductible under sub-section (1) shall be a final tax on the income arising from the sale of petroleum products to which sub-section (1) applies.
KARACHI: Sindh Revenue Board (SRB) has suspended sales tax registration of M/s. Cyber Internet Services (Private) Limited for making short payment on telecom services.
The SRB on Tuesday said that the services provided or rendered in respect of telecommunication including internet and bandwidth services are chargeable to the sales tax under the provincial law.
M/s. Cyber Internet Services (Private) Limited is registered with the SRB since August 04, 2011.
The SRB said that as per invoices services provided to end consumers of internet services from registered person, it has been observed that the registered person is charging/collecting/depositing Sindh sales tax at lower rate of tax or inappropriate rate of tax i.e. 15.6 percent despite the fact that internet or bandwidth services are chargeable to the Sindh sales tax at 19.5 percent.
As per the description given on one of the invoice, the registered person has billed the consumer for 10 Mbps internet services package for the month of March 2019 but has charged sales tax of Rs312 on value of taxable services of Rs1.999 (sales tax at 15.6 percent) whereas the applicable rate of tax is 19.50 percent.
“This is serious violation of provisions of Sindh Sales Tax Act, 2011.”
Considering the violation, the SRB suspended the sales tax registration of the company with immediate effect.
However, the provincial revenue authority has given opportunity to the company to take remedial action by April 02, 2019 including submitting the summary of tax collected and charged lower than applicable tax rate in case of telecommunication services from July 2011 till February 2019.
In case of non-satisfactory response or failure to take remedial measures as suggested on or before April 02, 2019, the case would be further proceeded for cancellation of registration with SRB, the board warned.
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.
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.
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 Rules
Tax on License Fee
Tax on Renewal
H
Rs. 7,500
Rs. 10,000
H-I
Rs. 10,000
Rs. 15,000
H-II
Rs. 25,000
Rs. 30,000
R
Rs. 5,000
Rs. 12,000
B
Rs. 5,000
Rs. 40,000
B-1
Rs. 30,000
Rs. 35,000
B-2
Rs. 40,000
Rs. 45,000
B-3
Rs. 50,000
Rs. 75,000
B-4
Rs. 75,000
Rs. 100,000
B-5
Rs. 87,500
Rs. 150,000
B-6
Rs. 175,000
Rs. 200,000
B-7
Rs. 262,500
Rs. 300,000
B-8
Rs. 437,500
Rs. 500,000
B-9
Rs. 700,000
Rs. 800,000
B-10
Rs. 875,500
Rs. 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.
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.
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.
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:
