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  • FBR to impose penalty on withholding agent for not submitting taxpayers’ information

    FBR to impose penalty on withholding agent for not submitting taxpayers’ information

    ISLAMABAD: Federal Board of Revenue (FBR) will impose penalty on withholding agents for failure in submitting withholding statement or information of taxpayers for the period July – December 2019.

    The last day for filing withholding statement electronically was January 31, 2020. Most of the withholding agents had filed the statements as per requirement. However, some of them are still non-compliant and will be liable to fine and penalty, FBR sources said on Monday.

    As per Section 182 of Income Tax Ordinance, 2001, where any person fails to furnish a statement as required under Section 115, 165, 165A of 165B within the due date. “Such person shall pay a penalty of Rs5,000 if the person had already paid the tax collected or withheld by him within the due date for payment and the statement is filed within 90 days from the due date for filing the statement and, in all other cases, a penalty of Rs2,500 for each day of default from the due date subject to a minimum penalty of Rs10,000.”

    The FBR officials said that under Section 165 of the Income Tax Ordinance, 2001, every person collecting tax or deducting tax from a payment shall furnish to the commission a biannual statement in the prescribed form setting out:

    (a) the name, Computerized National Identity Card Number, National Tax Number and address of each person from whom tax has been collected under Division II of this Part or Chapter XII or the Tenth Schedule or to whom payments have been made from which tax has been deducted under Division III of this Part or Chapter XII or the Tenth Schedule in each half-year

    (b) the total amount of payments made to a person from which tax has been deducted under Division III of this Part or Chapter XII or the Tenth Schedule in each half-year

    (c) the total amount of tax collected from a person under Division II of this Part or Chapter XII or the Tenth Schedule or deducted from payments made to a person under Division III of this Part or Chapter XII or the Tenth Schedule in each half-year; and

    (d) such other particulars as may be prescribed:

    Provided that every person as provided in sub-section (1) shall be required to file withholding statement even where no withholding tax is collected or deducted during the period.

    Explanation.— For the removal of doubt, it is clarified that this sub-section overrides all conflicting provisions contained in the Protection of Economic Reforms Act, 1992 (XII of 1992), the Banking Companies Ordinance, 1962 (LVII of 1962), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the regulations made under the State Bank of Pakistan Act, 1956 (XXXIII of 1956), if any, on the subject, in so far as divulgence of information under section 165 is concerned.

    (2) Every prescribed person collecting tax under Division II of this Part or Chapter Xll or the Tenth Schedule or deducting tax under Division III of this Part of Chapter Xll or the Tenth Schedule shall furnish statements under sub-section (l) as per the following schedule, namely:-

    (a) in respect of the half-year ending on the 30th June, on or before the 31st day of July; and

    (b) in respect of the half-year ending on the 31st December, on or before the 31st day of January.

    (2A) Any person who, having furnished statement under sub-section (1) or sub-section (2), discovers any omission or wrong statement therein, may file a revised statement within sixty days of filing of statement under sub-section (1) or sub-section (2), as the case may be.

    (2B) Notwithstanding anything contained in this section, the Commissioner as he deems lit may by notice in writing require any person, collecting or deducting tax under this Ordinance, to furnish a statement for any period specified in the notice within such period of time as may be specified in the notice.

    (3) Board may prescribe a statement requiring any person to furnish information in respect of any transactions in the prescribed form and verified in the prescribed manner.

    (4) A person required to furnish a statement under sub-section (1), may apply in writing, to the Commissioner for an extension of time to furnish the statement after the due date and the Commissioner if satisfied that a reasonable cause exists for non-furnishing of the statement by the due date may, by an order in writing, grant the applicant an extension of time to furnish the statement.

    (5) The Board may make rules relating to electronic furnishing of statements under this section including,-

    (a) mandatory electronic filing of statements; and

    (b) determination of eligibility of the data of such statements and e-intermediaries, etc.

    (6) Every person deducting tax from payment under section 149 shall furnish to the Commissioner an annual statement in the prescribed form and manner.

  • NCCPL directs verification of stock investors through biometric

    NCCPL directs verification of stock investors through biometric

    KARACHI: National Clearing Company of Pakistan Limited (NCCPL) has issued guidelines to register / verify all investors of stock market through biometric system.

    The NCCPL on Monday issued communication to Pakistan Stock Exchange (PSX) to direct all authorized intermediaries (AI) and clearing members to register existing customers in Centralized Know Your Customer (CKO).

    The NCCPL said that in pursuance of provisions stipulated under clause 9.1 (x) of CKO Regulations 2017 and NCCPL Regulations clause 5.11, Authorized Intermediaries (AI) are required to register their existing Customers, in the KYC Database to obtain Unique KYC Number (UKN) and tagging of such UKNs with the relevant Authorized Intermediary within the time period notified by the CKO.

    In view of above, all Authorized Intermediaries are hereby notified to register their existing Customers (i.e existing customers registered through NCSS UIN database before June 17, 2019) in the KYC Database and obtain UKN latest by May 31 2020.

    Further, Clearing Members still not yet admitted as AI shall be required to get them registered as AI and also required to register their customers in CKO by May 31, 2020.

    For the purpose of facilitating the Authorized Intermediaries, step wise key elements of the existing Customer registration process under CKO have been briefly explained below;

    1. AI shall be required to carry out Biometric Verification of the Customer (Applicable on individual customer only).

    2. AI is required to submit online KYC form of the existing customer via KYC Information System. Moreover, hard copy of KYC Form as prescribed under Annexure II, III and IV of the CKO Regulations, 2017 in signed form shall be required for all Types of Customers.

    3. In case of joint account holder(s), the AI shall be required to carry out Biometric Verification and proceed with KYC Application Form for each account holder separately.

    4. After submission of KYC Application Form electronically in KIS, AI will be required to submit hard copy of original KYC Application Form and Supporting Documents to CKO within 5 working days as per existing practice. The supporting documents may also be submitted through the upload functionality made available in the KIS.

    5. CKO will initiate necessary processing and complete its verification within 10 working days from the date of receipt of KYC Application Form along with all the required supporting documents.

    6. Upon such verification, CKO will approve KYC Application Form in KIS and Unique KYC Number (UKN) will automatically be generated for such Customer in KIS.

    7. After issuance of UKN, CKO will obtain confirmation from corporate Customer, foreign individuals and foreign corporate Customers for the issuance of UKN within 15 working days in accordance with the Regulations.

    8. In case of any discrepancy found in KYC form, AI will be required to remove it within 10 working days.

    9. Customers registered with multiple AIs will be required to complete their KYC process with all AIs one by one. If their KYC process is not completed with the AI through whom the process was first initiated, such customers shall not be allowed to initiate their KYC process with the other AIs.

    The NCCPL warned that failure to comply the above mentioned clause within stipulated time shall lead to necessary action in accordance with clause 9.1 (v) of CKO Regulations, 2017 and clause 5.11 of NCCPL Regulations whereby UIN tagging of the Customer with such Authorized Intermediary/Clearing Member shall be blocked and trading through such client code shall be restricted.

    However, pending transactions of such customers will be settled through respective Securities Broker in NCSS. Moreover, squaring-up of open positions in all Markets including Leveraged Markets and selling of Securities held in the sub-account(s) will be allowed.

    For complete details please refer clause 5.11 of NCCPL Regulations and clause 9.1 of CKO Regulations, 2017.

    For any further queries or concerns, please feel free to contact the Customer Support Services of your respective locations.

  • Cabinet to announce major relief in prices

    Cabinet to announce major relief in prices

    ISLAMABAD: The federal cabinet in its meeting scheduled for Tuesday, February 12, 2020 will announce major relief in prices of basic food items, Prime Minister Imran Khan announced on Sunday.

    The prime minister in its tweet message said that the government would come up with various measures to reduce the prices of basic food items in the upcoming federal cabinet meeting scheduled on Tuesday.

    “I understand the difficulties ordinary people including salaried class are confronting and have decided, come what may, my government will be announcing various measures that will be taken to reduce prices of basic food items for the common man in Cabinet on Tuesday,” the prime minister tweeted.

    He said at the same time all the relevant government agencies had launched an in-depth probe into the flour and sugar price hikes.

    “The nation should rest assured that all those responsible will be held accountable and penalized,” the prime minister remarked.

  • Criminal proceedings to be initiated for taking bribe

    Criminal proceedings to be initiated for taking bribe

    KARACHI: Federal Board of Revenue (FBR) is determined to eliminate corrupt practices in the official matters in Inland Revenue and Pakistan Customs and decided to take action against officials taking bribe or financial benefits for giving favor someone.

    FBR officials told PkRevenue.com that vigilance teams of tax authorities were observing the day to day affairs of field offices and also examining complaints against tax officials regarding their workings.

    In order to effectively check misuse of authority to gain financial benefit, new provisions have been introduced through Finance Act, 2019 in all the relevant statutes to prescribe rules for initiating criminal proceedings against officers and officials of the FBR who deliberately commit acts or fail to act for personal benefits.

    Similar action would also be taken against persons who offer bribes or other financial benefits to the tax employees, the sources said.

    The laws have been introduced through Section 156A Customs Act, 1969, Section 33A Sales Tax Act, 1990 and Section 216A Income Tax Ordinance, 2001 for taking against corrupt practices of officials.

    Under Section 216A of Income Tax Ordinance, Proceedings against authority and persons shall be taken as under.

    (1) Subject to section 227, the Board shall prescribe rules for initiating criminal proceedings against any authority mentioned in section 207 and officer of the Directorates General mentioned in Part II and Part III of Chapter XI including any person subordinate to the aforesaid authorities or officers of the

    Directorates General who willfully and deliberately commits or omits an act which results in undue benefit or advantage to the authority or the officer or official or to any other person.

    (2) Where proceedings under sub-section (1) have been initiated against the authority or officer or official, the Board shall simultaneously intimate the relevant Government agency to initiate criminal proceedings against the person referred to in sub-section (1).

    (3) The proceedings under this section shall be without prejudice to any other liability that the authority or officer or official or the person may incur under any other law for the time being in force.

  • Tax collection from salary of executives, directors jumps up by 85%

    Tax collection from salary of executives, directors jumps up by 85%

    KARACHI: The collection of income tax has registered sharp growth of 85 percent on salary received by executives/directors of companies.

    The unprecedented growth has been witnessed due to changes in salary tax slabs introduced through Finance Act, 2019.

    The collection of income tax has increased to Rs3.1 billion during first seven months (July – January) 2019/2020 as compared with Rs1.667 billion in the same period of the last fiscal year.

    Sources in Large Taxpayers Unit (LTU) Karachi, a collecting office of Federal Board of Revenue (FBR), said that the higher tax rates on the salary income received by executives and directors of companies revised through the Finance Act, 2019 resulted in improved tax revenue under this head.

    They said that the tax slab was increased to 35 percent on the salary income above Rs75 million.

    The tax officials also attributed the increase in tax revenue to effective monitoring and audit of executives /directors of companies.

    They said that previously directors of companies avoid taxes by taking advantage of tax laws.

    The salary income has been explained in section 12 of Income Tax Ordinance, 2001.

    Salary.— (1) Any salary received by an employee in a tax year, other than salary that is exempt from tax under this Ordinance, shall be chargeable to tax in that year under the head “Salary”.

    (2) Salary means any amount received by an employee from any employment, whether of a revenue or capital nature, including —

    (a) any pay, wages or other remuneration provided to an employee, including leave pay, payment in lieu of leave, overtime payment, bonus, commission, fees, gratuity or work condition supplements (such as for unpleasant or dangerous working conditions);

    (b) any perquisite, whether convertible to money or not;

    (c) the amount of any allowance provided by an employer to an employee including a cost of living, subsistence, rent, utilities, education, entertainment or travel allowance, but shall not include any allowance solely expended in the performance of the employee’s duties of employment;

    (d) the amount of any expenditure incurred by an employee that is paid or reimbursed by the employer, other than expenditure incurred on behalf of the employer in the performance of the employee’s duties of employment;

    (e) the amount of any profits in lieu of, or in addition to, salary or wages, including any amount received —

    (i) as consideration for a person’s agreement to enter into an employment relationship;

    (ii) as consideration for an employee’s agreement to any conditions of employment or any changes to the employee’s conditions of employment;

    (iii) on termination of employment, whether paid voluntarily or under an agreement, including any compensation for redundancy or loss of employment and golden handshake payments;

    (iv) from a provident or other fund, to the extent to which the amount is not a repayment of contributions made by the employee to the fund in respect of which the employee was not entitled to a deduction; and

    (v) as consideration for an employee’s agreement to a restrictive covenant in respect of any past, present or prospective employment;

    (f) any pension or annuity, or any supplement to a pension or annuity; and

    (g) any amount chargeable to tax as “Salary” under section 14.

    (3) Where an employer agrees to pay the tax chargeable on an employee’s salary, the amount of the employee’s income chargeable under the head “Salary” shall be grossed up by the amount of tax payable by the employer.

    (4) No deduction shall be allowed for any expenditure incurred by an employee in deriving amounts chargeable to tax under the head “Salary”.

    (5) For the purposes of this Ordinance, an amount or perquisite shall be treated as received by an employee from any employment regardless of whether the amount or perquisite is paid or provided —

    (a) by the employee’s employer, an associate of the employer, or by a third party under an arrangement with the employer or an associate of the employer;

    (b) by a past employer or a prospective employer; or

    (c) to the employee or to an associate of the employee or to a third party under an agreement with the employee or an associate of the employee.

  • No claim of compensation against customs officials

    No claim of compensation against customs officials

    KARACHI: An owner of goods has not entitled for claiming compensation from customs officials for any damage done during lawful detention.

    Customs officials said that in case any consignment is detained lawfully and during detention any damage occurred to the goods unintentionally then the owner of goods cannot claim compensation for such damage.

    They said that Section 216 of Customs Act, 1969 explained as:

    Section 216: No compensation for loss or injury except on proof of neglect or willful act

    No owner of goods shall be entitled to claim from any officer of customs compensation for the loss of such goods or for damage done to them at any time while they remain or are lawfully detained in any custom-house, customs area, wharf or landing place under the charge of any officer of custom, unless it be proved that such loss or damage was occasioned by gross negligence or willful act of such officer.

    Section 214: Remission of duty and payment of compensation to the owner in certain cases

    Where, on prosecution by the owner of any goods, an officer of customs is convicted of an offence connected with the removal of such goods from the warehouse without payment of duty, the whole of the duty on such goods shall be remitted, and, the Collector of Customs, shall, in accordance with the rules, pay to the owner due compensation for the damage caused to the owner by such offence.

    Section 215: Service of order, decision, etc

    Any order or decision passed or any summons or notice issued under this Act shall be served-

    (a) by tendering the order, decision, summons or notice or sending it by registered post or the courier service or by any other mode of transmission subject to acknowledgement receipt to the person for whom it is intended or to his agent; or

    (b) if the order, decision, summons or notice cannot be served in any manner provided in clause (a), by affixing it on the notice board of the custom-house; or

    (c) in case of electronic orders, decisions, notices or summons, when these have been sent to the recipient from the Customs Computerized System.

  • PBS rules out fudging in inflation figures

    PBS rules out fudging in inflation figures

    ISLAMABAD – The Pakistan Bureau of Statistics (PBS) categorically rejected allegations of fudging in inflation figures, addressing concerns raised in some sections of the electronic and print media.

    (more…)
  • FBR organizes event to aware people about POS

    FBR organizes event to aware people about POS

    LAHORE: Federal Board of Revenue (FBR) has organized an event at Packages Mall, Lahore to create awareness among people about the Point of Sale (Linked Invoicing System) of FBR, a statement said on Saturday.

    The objective of this event was to apprise the people and the retailers about the installation and utility of Point of Sales (POS) machines at big retail outlets.

    Designated officers of FBR HQ led by Chief, Facilitation & Taxpayers Education Tehmina Aamer and included Secretary FATE Alam Zaib Khan and Secretary PR Adnan Akram Bajwa participated in the program.

    Lot of people showed keen interest in the activities of the program and appreciated the steps taken by FBR on Point of Sales (Linked Invoicing System).

    The people were informed as to how they could verify about their paid taxes through Tax Aasaan application. The retailers were convinced to get their businesses linked with Point of Sales Linked Invoicing system. The flyers containing information about Point of Sales and gifts were distributed to the people on the occasion.

  • Sensitive price inflation increases by 17.58pc

    Sensitive price inflation increases by 17.58pc

    KARACHI: The prices of essential items have registered 17.58 percent increase by week ended February 06, 2020 when compared with corresponding week last year, according to data released by Pakistan Bureau of Statistics (PBS).

    According to the data the combined Sensitive Price Indicator (SPI) increased by 17.58 percent by week ended February 06, 2020 as compared with the week ended February 07, 2019.

    As per the data the highest inflation for the period under review was recorded at 19.99 percent for the expenditure group ranging between Rs22.889 and Rs29.517.

    While the SPI was recorded at 16.18 percent for the period for expenditure group up to Rs17,732.

    The PBS computes the weekly SPI with base 2015-16= 100 covering 17 urban centers and 51 essential items for all expenditure groups.

  • FBR amends guidelines for performance allowance of BS-01-14 tax officials

    FBR amends guidelines for performance allowance of BS-01-14 tax officials

    KARACHI: Federal Board of Revenue (FBR) has delegated powers to head of respective field formations of approving performance allowance of BS-1 to BS-14.

    The FBR issued Circular No. 01/2020 dated February 06, 2020 and modified Guidelines for Performance Allowance -2015.

    The following amendment has been made to the Guidelines for Performance Allowance-2015 with immediate effect:

    “The power to process and finalize selection of officials of BS-1 to BS-14 for IJP Performance Allowance of officials is delegated to the respective heads of field formations. However, all the cases of litigation and arrears demand shall continue to be dealt at FBR HQ by the respective Wing.”

    The FBR said that in the light of above decision of the Board-In-Council’s meeting held on January 24, 2020, the IJP selection process and finalization of IJP cases with respect to BS-01-14 employees of field formations will rest with concerned field formation.

    Under the approval of respective head of field office such cases shall be processed and finalized keeping in view Guidelines for Performance Allowance -2015 under intimation to the board.