Pkrevenue.com

Category: Top stories

Find top stories in this section. Pakistan Revenue brings you the latest and most important news from Pakistan and around the world, keeping you informed with key updates and insights.

  • Tax Return becomes invalid on depriving refund adjustment: PTBA

    Tax Return becomes invalid on depriving refund adjustment: PTBA

    KARACHI: Pakistan Tax Bar Association (PTBA) has declared that deletion of column to deny refund adjustment made the income tax return invalid.

    In a letter sent to Asim Ahmed, Chairman, Federal Board of Revenue (FBR) on Thursday, the PTBA apprised about the burning issue due to which the legal fraternity, taxpayers and other stake holders are very much perturbed that is with regard to deletion of tab previously available in the return to claim “adjustment of earlier refunds against the taxpayer of the current year”.

    READ MORE: FBR notifies statutory tax rates for salaried persons

    President PTBA Rana Munir Hassain said that the adjustment of refund against the payable tax is a fundamental right of a taxpayer a row for adjustment of earlier refunds before calculating net payable tax was always provided in the return forms.

    He said that the proposed draft amendments in Income Tax Rules, 2002 through SRO 820(I)/2022, dated 21st June, 2022 (regarding draft Income Tax Return for the Tax Year 2022 for Ind/AOP/Cos) was issued in pursuance of section 237(3) of the Income Tax Ordinance, 2001, whereas, the row bearing code 92101 regarding “refund adjustment of other year(s) against demand of the current year was appearing” was provided therein as per past.

    READ MORE: FBR slaps additional customs duty at 35% on motor vehicles

    Subsequently, after lapse of statutory period of seven days, the final version of the Income Tax Return for the Tax Year 2022 was introduced through SRO.978(I)/2022 dated 30th June 2022, whereby, part-II-V was added in the Second Schedule, after Part II in the Income Tax Rules, 2002.

    In the said final version, in the computation tab, the row as appearing against code 92101 is as under;

    “refund adjustment of other year(s) against demand of this year”

    The notified return which is part of the rules is now a valid return for all the purposes including deemed assessment order u/s 120(1) of the Ordinance.

    Uploaded return electronically on IRIS, presently, having no column for adjustment of refund adjustment of other year(s), cannot be termed as “prescribed form of return” therefore, if filed, will not be a valid return in the eyes of law as under section 114(2)(a) a return is to be furnished in the prescribed form.

    READ MORE: Tax exemption granted to donations for PM flood relief fund

    It is also pertinent to mention here that the deletion of refund adjustment, row is against the fundamental rights, due process of law, whereas, the taxpayers have been deprived from their legitimate right as guaranteed by the constitution of Islamic Republic of Pakistan.

    In the light of the above facts, the apex tax bar urged the FBR chairman to look into the matter personally and take necessary action on priority basis and restore the row “refund adjustment of the other year(s) against demand of this year” enabling the taxpayer and tax fraternity to file their Income Tax Returns for the Tax Year 2022 within stipulated time.

    READ MORE: Pakistan raises Regulatory Duty to 100 % on motor vehicle import

  • Pakistani Rupee falls for 4th day; dollar climbs up to Rs219.14

    Pakistani Rupee falls for 4th day; dollar climbs up to Rs219.14

    KARACHI: Pakistani Rupee (PKR) fell for the fourth consecutive day against the US dollar on Thursday as interbank foreign exchange market ended at Rs219.14.

    The rupee lost 76 paisas to end at Rs 217.14 to the dollar from previous day’s closing of Rs218.38 in the interbank foreign exchange market.

    Currency experts said that the rupee was under immense pressure due to massive demand for import payments and rising oil prices in the international market.

    READ MORE: Dollar gains for third day, ends at PKR 218.38

    Besides, political noise was also rising due to cases filed against country’s biggest party chairman Imran Khan.

    The rupee has witnessed decline during all four trading days of the ongoing week.

    Currency experts said that shortage of dollar for import payment impacted the rupee value. Further decline in foreign exchange reserves also resulted a panic in the market.

    They said that the government on August 20 withdrew the ban on import of luxury and non-essential items, which was imposed on May 18, 2022.

    READ MORE: Dollar climbs up to PKR 217.66 at interbank closing

    The government had imposed the ban in the wake of depleting foreign exchange reserves and falling value in the rupee against the dollar.

    The government lifted the ban at a time when both the indicators deteriorated.

    After the ban the rupee fell to historic low of Rs239.94 to the dollar on July 28, 2022.

    Pakistan’s foreign exchange reserves have increased by $52 million by week ended August 12, 2022. The foreign exchange reserves of the country have recorded at $13.613 billion by week ended August 12, 2022 as compared with $13.561 billion a week ago i.e. August 05, 2022.

    The country’s foreign exchange reserves hit all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $13.615 billion.

    READ MORE: Dollar jumps to PKR 216.66 amid political crisis

    The official foreign exchange reserves of the State Bank witnessed an increase of $67 million to $7.897 billion by week ended August 12, 2022 as compared with $7.83 billion a week ago.

    The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021. Since then the official reserves of the SBP declined by $12.249 billion.

    Previously, the rupee made gain on reports of renewal of Saudi financial assistance helped to improve sentiments in the currency market. Further decline in international oil prices also helped the rupee to make gain.

    READ MORE: Rupee gains 30 paisas to dollar at closing on August 19, 2022

    Besides, the tight monitoring of the State Bank of Pakistan (SBP) had eased the pressure on exchange rate.

    It is worth mentioning that the foreign exchange reserves of the country depleted massively.

  • FBR notifies statutory tax rates for salaried persons

    FBR notifies statutory tax rates for salaried persons

    The Federal Board of Revenue (FBR) has notified the statutory rates of income tax for salaried persons during Tax Year 2023.

    In order to implement the rate of tax for salaried persons, the FBR issued Income Tax Ordinance, 2001 updated up to June 30, 2022. The following table is enacted for the taxation of salaried taxpayers for the Tax Year 2023:

    READ MORE: FBR slaps additional customs duty at 35% on motor vehicles

    Taxable IncomeRate of Tax
    Up to Rs600,0000%
    Rs600,001 –1,200,0002.5% of amount exceeding Rs600,000
    Rs1,200,001 –2,400,000Rs15,000 + 12.5% of amount exceeding Rs1,200,000
    Rs2,400,001 –3,600,000Rs165,000 + 20% of amount exceeding Rs2,400,000
    Rs3,600,001 –6,000,000Rs405,000 + 25% of amount exceeding Rs3,600,000
    Rs6,000,001 –12,000,000Rs1,005,000 + 32.5% of amount exceeding Rs6,000,000
    Amount exceeding Rs12,000,000Rs2,955,000 + 35% of amount exceeding Rs12,000,000

    The rate of tax in the table above are applicable where the income of an individual chargeable under the head ‘salary’ exceeds seventy-five per cent of his/her taxable income.

    It is pertinent to mention that Finance Minister Dr. Miftah Ismail on floor of the House while presenting the federal budget 2022/2023 announced massive relief for salaried persons.

    According to the budget speech of the finance minister, the basic threshold of taxable salary is proposed to be enhanced to Rs1.2 million from the Rs600,000 for salaried individuals.

    READ MORE: Tax exemption granted to donations for PM flood relief fund

    “This would pass tens of billions of rupees benefit to salaried people. This will generate a positive economic cycle whereby this money would get transferred to the businesses as the disposable income of salaried people increases therefore ultimately, the government will benefit through the thriving of the business, the creation of more jobs, and tax revenues in the future,” according to the budget speech.

    However, the government withdrew the proposal and revived the exempt income to Rs600,000 while approving the Finance Act, 2022 from the National Assembly.

    READ MORE: Pakistan raises Regulatory Duty to 100 % on motor vehicle import

    Haider Ali Patel, former president of Karachi Tax Bar Association (KTBA) in a recent presentation on the Finance Act, 2022 stated that the revised rates in respect of salaried taxpayers had been enacted with the change in maximum rate of tax from 32.5 per cent to 35 per cent.

    He stated that the enacted tax rates have taken away the proposed tax relief sought to be provided to the individuals belonging to lower salaried class.

    READ MORE: Pakistan amends laws to tax retailers

    “On the other hand, the tax incidence has been increased considerably for the individuals belonging to higher salary brackets,” he added.

    Patel presented the following table provides the increase / decrease in the tax incidence of salaries taxpayers from tax liability of the tax year 2022 to tax year 2023 and also the tax liability calculated as per the proposed Finance Bill, 2023:salary tax difference

  • Dollar gains for third day, ends at PKR 218.38

    Dollar gains for third day, ends at PKR 218.38

    KARACHI: The US dollar continued to make gain against the Pakistani Rupee (PKR) for third consecutive day on Wednesday and ended at Rs218.38 in interbank foreign exchange market.

    The exchange rate recorded 72 paisas decline in rupee value to end at Rs218.38 from previous day’s closing of Rs217.66 in the interbank foreign exchange market.

    READ MORE: Dollar climbs up to PKR 217.66 at interbank closing

    The rupee has witnessed decline during all three trading days of the ongoing week.

    Currency experts said that shortage of dollar for import payment impacted the rupee value. Further decline in foreign exchange reserves also resulted a panic in the market.

    They said that the government on August 20 withdrew the ban on import of luxury and non-essential items, which was imposed on May 18, 2022.

    The government had imposed the ban in the wake of depleting foreign exchange reserves and falling value in the rupee against the dollar.

    READ MORE: Dollar jumps to PKR 216.66 amid political crisis

    The government lifted the ban at a time when both the indicators deteriorated.

    After the ban the rupee fell to historic low of Rs239.94 to the dollar on July 28, 2022.

    Pakistan’s foreign exchange reserves have increased by $52 million by week ended August 12, 2022. The foreign exchange reserves of the country have recorded at $13.613 billion by week ended August 12, 2022 as compared with $13.561 billion a week ago i.e. August 05, 2022.

    The country’s foreign exchange reserves hit all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $13.615 billion.

    READ MORE: Rupee gains 30 paisas to dollar at closing on August 19, 2022

    The official foreign exchange reserves of the State Bank witnessed an increase of $67 million to $7.897 billion by week ended August 12, 2022 as compared with $7.83 billion a week ago.

    The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021. Since then the official reserves of the SBP declined by $12.249 billion.

    Previously, the rupee made gain on reports of renewal of Saudi financial assistance helped to improve sentiments in the currency market. Further decline in international oil prices also helped the rupee to make gain.

    Besides, the tight monitoring of the State Bank of Pakistan (SBP) had eased the pressure on exchange rate.

    It is worth mentioning that the foreign exchange reserves of the country depleted massively.

    READ MORE: Pakistani Rupee eases against dollar; Interbank ends at Rs214.88

  • Tax exemption granted to donations for PM flood relief fund

    Tax exemption granted to donations for PM flood relief fund

    ISLAMABAD: The federal government on Tuesday granted tax exemptions to donations made for Prime Minister’s Flood Relief Fund 2022.

    The Federal Board of Revenue (FBR) issued SRO 1590(I)/2022 dated August 23, 2022 to exempts deduction of tax under various provisions of Income Tax Ordinance, 2001.

    According to the SRO an amendment has been made into Part 1 of the Second Schedule of the Income Tax Ordinance, 2001 that any income derived from The Prime Minister’s Flood Relief Fund, 2022 has been exempted from income tax with effect on and from August 5, 2022.

    Furthermore, an amendment has been made to Part IV of the Second Schedule under which minimum tax under Section 113 of the Income Tax Ordinance, 2001 shall not apply to the flood relief fund.

    In the same part of the schedule a new clause 120 has been inserted under which Section 151 related to profit from debt shall not apply to the relief fund with effect on and from August 5, 2022.

    It further said that the provisions of Section 236 of Income Tax Ordinance, 2001 shall not apply on the amount donated through SMS to the Prime Minister’s Flood Relief Fund, 2022 with effect on and from August 5, 2022.

    The FBR issued another SRO 1589(I)/2022 dated August 23, 2022, under which the federal government exempted the federal excise duty leviable on any donation received in Prime Minister’s Flood Relief Fund, 2022. “The notification shall take effect on and from August 5, 2022,” the FBR added.

    The Finance Division on August 5, 2022 issued a notification to establish Prime Minister’s Flood Relief Fund 2022.

    According to the notification: “It has been decided to establish / open with immediate effect a Fund to be known as ‘Prime Minister’s Flood Relief Fund 2022’ for collective national effort to meet the challenge of providing relief and rehabilitation to the affected population due to excessive rains and floods across the country.

    It said that all proceeds and payments for the fund will be received at all branches of State Bank of Pakistan (SBP), all treasuries and branches of National Bank of Pakistan (NBP) and all other scheduled banks.

    The fund may receive donations from both domestic, international donors and contributions from abroad which will be received at all the branches of above referred banks where such branches are existing. In other foreign countries contributions will be received at Pakistan missions and remitted to the State Bank of Pakistan which would prescribe necessary procedure for their accounting.

  • Pakistan raises Regulatory Duty to 100 % on motor vehicle import

    Pakistan raises Regulatory Duty to 100 % on motor vehicle import

    Pakistan has increased the regulatory duty on imported motor vehicles from 90% to 100%. The decision, communicated through the issuance of SRO 1571(I)/2022 by the Federal Board of Revenue (FBR), comes as part of the government’s efforts to stabilize the balance of payments and manage the outflow of foreign exchange.

    (more…)
  • Dollar climbs up to PKR 217.66 at interbank closing

    Dollar climbs up to PKR 217.66 at interbank closing

    KARACHI: The US dollar rose for the second straight day against the Pakistani Rupee (PKR) on Tuesday and ended at Rs217.66 at interbank foreign exchange market.

    The exchange rate recorded a decline of one rupee to end at Rs217.66 to the dollar from previous day’s closing of Rs216.66 in the interbank foreign exchange market.

    READ MORE: Dollar jumps to PKR 216.66 amid political crisis

    It was second straight day of the week when the dollar made gain against the local currency.

    Currency experts said that ongoing political crisis pressured the demand for the greenback during the day.

    A day earlier, the government lodged an FIR against PTI chairman Imran Khan for threatening institutions. Further unconfirmed report suggested that the government attempted to arrest the former prime minister, which aggravated the security situation in the country.

    READ MORE: Rupee gains 30 paisas to dollar at closing on August 19, 2022

    The currency experts said that besides, falling foreign exchange reserves and higher demand for import payments also resulted in devaluation of rupee value.

    The rupee recorded all-time low of Rs239.94 against the dollar on July 28, 2022.

    Previously, the rupee made gain on reports of renewal of Saudi financial assistance helped to improve sentiments in the currency market. Further decline in international oil prices also helped the rupee to make gain.

    Besides, the tight monitoring of the State Bank of Pakistan (SBP) had eased the pressure on exchange rate.

    It is worth mentioning that the foreign exchange reserves of the country depleted massively.

    READ MORE: Pakistani Rupee eases against dollar; Interbank ends at Rs214.88

    Pakistan’s foreign exchange reserves have increased by $52 million by week ended August 12, 2022. The foreign exchange reserves of the country have recorded at $13.613 billion by week ended August 12, 2022 as compared with $13.561 billion a week ago i.e. August 05, 2022.

    The country’s foreign exchange reserves hit all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $13.615 billion.

    READ MORE: Dollar ends losing streak against Pakistani Rupee; closes at Rs214.88

    The official foreign exchange reserves of the State Bank witnessed an increase of $67 million to $7.897 billion by week ended August 12, 2022 as compared with $7.83 billion a week ago.

    The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021. Since then the official reserves of the SBP declined by $12.249 billion.

  • Pakistan amends laws to tax retailers

    Pakistan amends laws to tax retailers

    ISLAMABAD: Pakistan on Monday revised laws to impose tax on retailers after suspending fixed tax scheme. President Arif Alvi has signed the bill namely Tax Laws (Second Amendment) Ordinance, 2022 to promulgate the revised taxation on the retailers.

    Through the immediate ordinance, amendments have been made to Sales Tax Act, 1990 under which retailers are required to pay sales tax through electricity bill.

    READ MORE: FBR allows tax refund deducted through electricity bills

    The retailers/shopkeepers are now required to pay 5 per cent of the electricity bill is amounting up to Rs20,000.

    The rate of tax is not applicable on the Tier-1 retailers as a separate mechanism for charging sales tax is in vogue.

    The sales tax rate shall be 7.5 per cent in case the electricity bill is above Rs20,000.

    The amendments have been applicable from July 01, 2022. This means the retailers have to pay the tax on their electricity bill issued for the month of July 2022.

    A commissioner of Inland Revenue, Federal Board of Revenue (FBR) has been authorized to issue order to the electricity supplier regarding exclusion of a person who is either a Tier-1 retailer or not a retailer.

    READ MORE: Pakistan decides to roll back fixed tax scheme

    According to the latest ordinance, notwithstanding anything contained in this Act, the Federal Government may, in lieu of or in addition to the tax under sub-section (9), by notification in the official Gazette, levy and collect such amount of tax at such rates and from such date as it may deem fit, from retailers, other than those falling in Tier-1, through their monthly electricity bill, and may also specify the mode, manner or time of payment of such tax:

    Provided that different rates or amounts of tax may be specified for different persons or class of persons.

    The ordinance also amended Income Tax Ordinance, 2001 and introduced special provision relating to payment of tax through electricity connections.

    READ MORE: FTO investigates tax collection through electricity bills

    It said that notwithstanding anything contained in the Ordinance, a tax shall be charged and collected from retailers other than Tier-I retailers as defined in the Sales Tax Act, 1990 (VII of 1990) and specified service providers on commercial electricity connections at the rates specified in the income tax general order issued in terms of sub-section (2).

    Sub-Section (2): For the purposes of this section, the Federal Government or the Board with the approval of the Minister in-charge pursuant to the approval of the Economic Coordination Committee of the Cabinet may, issue an income tax general order to-

    (a) provide the scope, time, payment, recovery, penalty, default surcharge, adjustment or refund of tax payable under this section in such manner and with such conditions as may be specified;

    (b) provide the collection of tax on the amount of bill or on any basis of consumption, in addition to or in lieu of advance tax collectible under sub-section (1) of section 235, at such rates or amounts, from such date and with such conditions as may be specified;

    READ MORE: Withdrawal of sales tax through electricity bills demanded

    (c) provide record keeping, filing of return, statement and assessment in such manner and with such conditions as may be specified;

    (d) provide mechanism of collection, deduction and payment of tax in respect of any person;

    (e) include or exempt any person or classes of persons, any income or classes of income from the application of this section, in such manner and with such conditions as may be specified; and

    (f) provide that tax collected under this section shall in respect of such persons or classes of persons be adjustable, final or minimum, in respect of any income to such extent and with such conditions as may be specified.

    The provisions of sub-section (1) of section 235 shall apply to the persons as specified therein unless specifically exempted under the income tax general order issued under sub-section (2).

    The provisions of section 100BA and rule 1 of the Tenth Schedule shall not apply to the tax collectible under this section unless specifically provided in respect of the person or class of persons mentioned in the income tax general order issued under sub-section (2).”

  • Pakistan implements new amendments to tax laws

    Pakistan implements new amendments to tax laws

    In a move aimed at enhancing revenue generation during the current fiscal year, Pakistan has implemented new amendments to both direct and indirect tax laws.

    (more…)