Tag: FBR

FBR, Pakistan’s national tax collecting agency, plays a crucial role in the country’s economy. Pakistan Revenue is committed to providing readers with the latest updates and developments regarding FBR activities.

Pakistan enforces austerity measures to save public money

KARACHI: Pakistan government has enforced austerity measures for the fiscal year 2022/2023 for saving public money and create space for development expenditures.

The Federal Board of Revenue (FBR) on Friday circulated a notification of the ministry of finance related to austerity measures.

READ MORE: Pakistan’s forex reserves drop to $15.61 billion

According to the finance ministry that the federal cabinet in a meeting held recently approved the austerity measures.

The federal government enforced the following austerity measures:

1. There shall be complete ban on:

READ MORE: SBP’s monetary policy tightening appropriate: IMF

(i) Purchase of all types of vehicles from current and development budget except utility vehicles such as ambulances, busses for educational institutions, solid waste vehicles, etc.;

(ii) Creation of new posts except those required for development projects;

(iii) Treatment abroad at government expenses;

(iv) Appointment of contingent paid / daily wages staff except for development projects;

(v) Purchase of office furniture except for development projects;

(vi) Purchase of machinery and equipment including air conditioners, microwave, fridge, photocopier, etc.;

(vii) Official visits abroad by government functionaries where the Pakistan government funding is involved except obligator visits;

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(viii) Official lunches/dinners/hi-tea except for foreign delegations;

(ix) Periodical, magazines, newspapers, etc.

2. Principal Accounting Officers shall ensure that:

(i) Consumption of utilities shall be reduced by 10 per cent;

(ii) Existing entitlement for petroleum products for government functionaries should be reduced by 30 per cent;

(iii) Avoidable travel should be curtailed by promoting use of Zoom / video links;

(iv) Vacant / redundant / non-productive posts should be abolished.

READ MORE: Gas price hike report baseless: Musadiq Malik

3. In addition to above, federal government has further decided that:

(i) The use of petroleum products by vehicles of ministries would be slashed by 40 per cent and security vehicles of cabinet members would be reduced by 50 per cent;

(ii) VVIP cavalcades’ expenses would be reduced without compromising security.

The federal government urged the provincial government should also adopt such austerity measures.

July 15, 2022
Tax officials directed to submit asset declarations

ISLAMABAD: The government has directed all tax officials of Federal Board of Revenue (FBR) to submit their declaration of assets for the year ending June 30, 2022 by July 15, 2022.

The FBR in this regard referring a letter of the Establishment Division, on Thursday intimated all the heads of Inland Revenue Service (IRS) and Pakistan Customs Service (PCS).

READ MORE: KTBA seeks date extension for filing statement, tax returns

According to the establishment division letter the declaration of assets and liabilities for the year ending July 30, 2022 are required to be submitted by all the officers / officials of the FBR by July 15, 2022.

READ MORE: KTBA recommends separate tax fraud proceedings

Furthermore, all the officers of IRS and PCS and all concerned serving under respective tax offices and customs stations have been directed to submit their declaration of assets and liabilities for the year ending on June 30, 2022 latest by July 15, 2022. A certificate to this effect may also be provided to the FBR Headquarter by July 25, 2022.

READ MORE: FBR urged to remove irritants in sales tax refund

The FBR warned all the offices that non-compliance of the instructions tantamount to misconduct it terms of the Government Servants (Conduct) Rules, 1964 and therefore conginzable under the Government Servants (Efficiency & Discipline) Rules, 1973.

READ MORE: Unified sales tax law for all tax authorities sought

July 14, 2022
KTBA seeks date extension for filing statement, tax returns

Karachi Tax Bar Association (KTBA) on Thursday urged the Federal Board of Revenue (FBR) to extend date for filing statement and returns.

KTBA President Syed Rehan Hasan Jafri in a letter sent to FBR Chairman Asim Ahmad requested to extend the date of filing quarterly income tax withholding statement and monthly sales tax return for June 2022 up to July 31, 2022.

READ MORE: KTBA recommends separate tax fraud proceedings

The KTBA informed the FBR chairman that as business of the whole country was closed due to the Eid holidays from July 08, 2022 to July 12, 2022 whereas the last date for filing the Quarterly Statements under the Income Tax Ordinance, 2001, and Monthly Sales Tax Return under the Sales Tax Act for the Tax Period of June 2022 is due on the 20th July, 2022 and the 15th July, 2022 and the 18th July, 2022 respectively.

READ MORE: FBR urged to remove irritants in sales tax refund

Due to the holidays, few working days are left to feed and put all the data entries in the Quarterly Statement and Monthly Sales Tax Return which may kindly be extended looked into for the sake of facilitation on the genuine taxpayers of the country who are working on behalf of the FBR as withholding agents and contributing a huge amount into the exchequer without any compensation as their legal obligation.

READ MORE: Unified sales tax law for all tax authorities sought

The tax bar urged the FBR to extend the date of filing the quarterly income tax withholding statement and monthly sales tax return for the tax period of June 2022 till July 31, 2022 in order to enable the taxpayers to complete the work and to facilitate them to make compliance.

READ MORE: Proposals for recovery of sales tax on bad debts

July 14, 2022
Defacing sales tax invoice declared as offence

KARACHI: Defacing sales tax invoice has been declared as an offence under Sales Tax Act, 1990 as amendment has been made through Finance Act, 2022.

The defacing of sales tax invoice will attract penalties as well as imprisonment.

READ MORE: FBR to collect 3% further tax on supply to inactive taxpayer

According to explanation of amendments made through Finance Act, 2022, issued by PwC A. F. Ferguson, defacing the prescribed invoice number or the barcode or QR code has been introduced as an offence subject to levy of penalty of higher of Rs 500,000 or 200 per cent of the amount of tax involved.

Upon conviction by a Special Judge, a simple imprisonment for a term which may extend to two years, or with additional fine which may extend to two million rupees, or with both may also be imposed.

READ MORE: FBR starts online monitoring sales of jewelers

Any person who abets commissioning of such offence has also been made liable, upon conviction by a Special Judge, to simple imprisonment for a term which may extend to one year, or with additional fine which may extend to two hundred thousand rupees, or with both.

Certain penalties were introduced through Tax Laws (Third Amendment) Ordinance, 2021 on failure of Tier-1 retailers to register and integrate business which have now been ratified in the Act.

READ MORE: Tax concessions to pilots withdrawn

The Finance Act, 2022 also amended laws related to powers of the FBR regarding initiating criminal proceedings.

The powers of the FBR to prescribe rules for initiating criminal proceedings against any specified authority for willful or deliberate acts/omissions resulting in personal benefits and undue advantage to authority, person or taxpayer have been withdrawn. Earlier, the FBR was empowered to this effect through Finance Act, 2019.

READ MORE: Pakistan grants tax exemption to charitable organizations

July 14, 2022
FBR to collect 3% further tax on supply to inactive taxpayer

KARACHI: The Federal Board of Revenue (FBR) will collect three per cent further sales tax on supply made to a person not an active taxpayer.
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July 14, 2022
FBR starts online monitoring sales of jewelers

KARACHI: The Federal Board of Revenue (FBR) has started online monitoring the sales of jewelers after amendment made through Finance Act, 2001.

READ MORE: Tax concessions to pilots withdrawn

According to tax experts at PwC A. F. Ferguson & Co. said that the scope of definition of the term ‘Tier-1 retailer’ has been enhanced to include a person engaged in supply of articles of jewelry or parts thereof, of precious metal excluding a person whose shop area measures 300 square feet in area or less.

Consequently, such persons are now required to integrate their retail outlets with FBR’s computerized system for real-time reporting of sales to avoid disallowance of input tax by 60 per cent.

READ MORE: Pakistan grants tax exemption to charitable organizations

Further, supply of locally manufactured articles of jewelry, or parts thereof, of precious metal or of metal clad with precious metal by such person will be chargeable at 3 per cent subject to the condition that no input tax adjustment shall be allowed.

READ MORE: New tax rates on car registration from July 01, 2022

Consequently, failure to integrate with Board’s computerized system for real-time reporting of sales will not result in disallowance of input tax since the input tax adjustment is otherwise barred.

However, a penalty up to Rs 1 million will be imposed if business is not integrated and if the non-integration continues after a period of two months, business premises may be sealed till such integration.

READ MORE: Finance Act 2022 notifies tax rates on disposal of securities

July 12, 2022
Simplified tax regime for shopkeepers implemented

KARACHI: The Federal Board of Revenue (FBR) has implemented a simplified tax regime from shopkeepers and small retailers.

Through the Finance Act, 2022 important amendments have been made to Income Tax Ordinance, 2001.

READ MORE: Pakistan withdraws tax amnesties for industrial promotion

Tax experts at PwC A. F. Ferguson & Co. explained that for other than Tier – 1 retailers and specified service providers, a ‘final tax’ has been levied on the basis of gross amount billed for commercial electricity connections at the following rates:

Where the amount does not exceed Rs. 30,000: the tax shall be Rs3,000

READ MORE: Pakistan expands tax exemptions under foreign treaties

Where the amount exceeds Rs. 30,000 but does not exceed Rs. 50,000: the tax shall be Rs5,000

Where the amount exceeds Rs. 50,000 but does not exceed Rs. 100,000: The tax shall be Rs10,000

Specified retailers and service providers through Income Tax General Order: the tax shall be Rs200,000

READ MORE: Capital gains tax revamped on disposal of immovable properties

The aforesaid tax shall be collected by the electricity companies through monthly bills in addition to withholding tax under section 235 of the Income Tax Ordinance, 2001.

However, in case sales tax is collected from such retailers through electricity bills under section 3(9) of Sales Tax Act, 1990, the sales tax will constitute discharge of tax liability under this section and thus no tax will be charged/ collected along with electricity bills.

READ MORE: Tax on deemed income arising from capital assets in Pakistan

The Federal Government is empowered to issue income tax general order for implementing this scheme and to specify service providers eligible for this regime.

July 10, 2022

Pakistan makes amendments to baggage rules

ISLAMABAD: The apex revenue collecting agency of Pakistan on Wednesday issued a draft to amend baggage rules.

The Federal Board of Revenue (FBR) issued SRO 985(I)/2022 to propose amendments to the Baggage Rules, 2006.

The draft proposed to substitute Rule 3 of the Baggage Rules, 2006. According to the substituted rule:

3. Allowance for Pakistani nationals not availing transfer or residence: The following shall be various allowances for the Pakistani nationals not availing transfer of residence, namely:

A. Items of personal use allowed duty-free on any visit:

(i) personal wearing apparel and clothing accessories;

(ii) one laptop computer; and

(iii) any other item except mobile phone, following allowances shall be admissible:

S. No.	Stay Abroad	Value of Duty Free allowance
(1)	(2)	(3)
(i)	Upto thirty days	Upto four hundred US Dollars (USD 400)
(ii)	Between thirty to sixty days	Upto eight hundred US Dollars (USD 800)
(iii)	More than sixty days	Upto twelve hundred US Dollars (USD 1200)

B. Purchases from a Duty Free Shop:

Duty free allowance of the aggregate value upto one hundred US dollars in case the goods are purchased from one of the duty free shops in Pakistan within sixty days of the arrival, and provided that the stay abroad of the passenger is more than sixty days.

The draft also recommended to substitute Rule 4 of the Baggage Rules, 2006, which is:

4. Allowance for Pakistani nationals availing transfer of residence:

A. Duty Free Allowance:

(i) personal household goods generally used by a family.

(ii) second hand or used professional equipment in use of a registered Pakistani practitioner during stay abroad, having proof of registration in the country abroad and duly recognized by the concerned regulatory authority or association:

Provided that an inspection certificate from an internationally recognized inspection agency in the exporting countries to the effect that such equipment is free from bacteria and other material injurious to human health, is furnished at the time of import of the equipment.

(iii) any other item (excluding mobile phones) of the value not exceeding fifteen hundred US dollars; and

(iv) weapon of non-prohibited bore for the personnel of armed forces, customs, police or any other law enforcement agency.

B. Purchases from a duty free shop:

Duty free allowances of the aggregate value upto fifteen hundred US dollars in case the goods are purchased from one of the duty free shops in Pakistan within sixty days of the arrival.

The draft rules amended table in Rule 5 of the Baggage Rules, 2006.

5. Special allowances for Foreign Exchange Remittance Card holders.— In addition to the allowances hereinbefore provided, the duty credit as specified in the Table below shall be admissible to a Pakistani national holding Foreign Exchange Remittance Card (FERC) once in a calendar year. The duty credit can also be utilized for the unaccompanied baggage or any purchase from one of the duty free shops. The duty credit under this scheme shall not be utilizable on import of vehicles.

The proposed amended table is as follow:

(1)	(2)	(3)	(4)
S.NO.	TYPE OF FERC	AMOUNT REMITTED THROUGH NORMAL BANKING CHANNEL (in US $ or equivalent foreign currency)	DUTY CREDIT IN PAKISTANI RUPEES
1.	Silver	2500 or more	20,000
2.	Silver Plus	5000 or more	40,000
3.	Golden	10,000 or more	60,000
4.	Golden Plus	25,000 or more	100,000
5.	Platinum	50,000 or more	200,000

The draft also recommended to substitute Rule 6 of the Baggage Rules, 2006, which is:

6. Allowance for foreign nationals and tourists: The following allowance shall be admissible to foreign national and tourist, namely:

(i) personal wearing apparel and clothing accessories; and

(ii) any other item (excluding mobile phones) of the value not exceeding eight hundred US dollars.

July 7, 2022

101 retailers given July 10 as deadline for integration

ISLAMABAD: The Federal Board of Revenue (FBR) has issued a list of 101 retailers and directed them to integrate by July 10, 2022 otherwise action will be taken as per law.

The FBR issued Sales Tax General Order (STGO) No. 1 of 2023 related to Tier-1 retailers for integration with FBR’s Point of Sale (POS) system.

READ MORE: FBR issues list of 113 retailers for mandatory integration

The Finance Act, 2019 added sub-section (6) to section 8B of the Sales Tax Act, 1990 whereby a Tier-1 Retailers who did not integrate its retail outlet in the manner prescribed under sub-section (9A) of section 3 of the Sales Tax Act, 1990 during a tax period, its adjustable tax for that period would be reduced by 15 per cent. The figure of 15 per cent has been raised to 60 per cent vide Finance Act, 2021.

In order to operationalize this important provision of law, a system-based approach has been adopted whereby all Tier-1 Retailers who are liable to integrate but have not yet integrated, with effect from July-2021 (Sales Tax Returns filed in August, 2021) are to be dealt with as per the procedure laid down in STGO No/ 1 of 2022 issued on August 3, 2021.

READ MORE: RTO-II Karachi seals electronics shop for integration failure

Vide the instant Sales Tax General Order, a list of 101 identified Tier-1 Retailers has been placed on FBR’s web portal allowing them to integrate with FBR’s system by July 10, 2022 an the procedure of exclusion from this list of 101 identified Tier-1 Retailers shall apply as laid down in STGO 17 of 2022 dated May 13, 2022.

Upon filing of Sales Tax Return for the month of June, 2022 for all hereby notified Tier-1 Retailers not having yet integrated, their input tax claim would be disallowed as above, without any further notice or proceedings, creating tax demand by the same amount.

READ MORE: RTO-II Karachi seals Baklava Palace for integration failure

July 6, 2022
FBR notifies companies return forms for tax year 2022

The Federal Board of Revenue (FBR) in Pakistan has officially released the income tax return forms for companies for the tax year 2022, signaling the commencement of the annual tax filing season.
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July 4, 2022