Pkrevenue.com

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.

  • Amendment sought in incentive to Greenfield industry

    Amendment sought in incentive to Greenfield industry

    KARACHI: The Federal Board of Revenue (FBR) has been urged to amend provisions related to incentive to Greenfield industrial undertaking.

    According to proposals for budget 2022/2023 presented by Karachi Tax Bar Association (KTBA), incentive had been defined under Section 2(27A) of Income Tax Ordinance, 2001 related to Greenfield industrial undertaking.

    READ MORE: FBR invites Sales Tax proposals for budget 2022/2023

    The definition of Greenfield was introduced by Finance Act, 2020 through introduction of section 2(27A). One of the conditions to qualify as a Greenfield Industrial undertaking is that it is using any process or technology that has not earlier been used in Pakistan and subjecting this with requirement to get approval from Pakistan Engineering Board.

    READ MORE: FBR invites income tax proposals for budget 2022/2023

    The tax bar said the incentive is though enshrined in the books yet it is not practically availed due to onerous requirement relating to novel technology.

    The KTBA proposed to delete the condition relating to use of any process and technology not earlier used in Pakistan under this definition. “This condition is impracticable in an economy like Pakistan which in still in process of adopting new technology and has no research and development of its own to bring new technical expertise.”

    READ MORE: Budget 2022/2023 to be presented in first week of June

    Abolishing this requirement would create opportunities for local businessmen to acquire technology from developed world and lay foundation for industry and manufacturing.

    This can also result in import substitution which is much needed for our country, the tax bar suggested.

    READ MORE: MoC invites tariff proposals for budget 2022/2023

  • Tax slabs reduction may be considered: FBR chairman

    Tax slabs reduction may be considered: FBR chairman

    KARACHI: Dr. Muhammad Ashfaq Ahmed, chairman, Federal Board of Revenue (FBR) on Tuesday said reduction in income tax slabs may be considered.

    Addressing the business community at Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said that existing income tax slabs were implemented after due consideration.

    Earlier, the business community pointed out high number of tax slabs in the Income Tax Ordinance, 2001.

    READ MORE: Withholding tax should be on income: FBR Chairman

    Commenting on requirement of Computerized National Identity Card (CNIC) on transactions, he said this condition was introduced three years ago. The FBR has gathered bulk of information due to this condition. Further, many cases of using fake CNICs for making transactions were also reported, he added.

    The FBR chairman said that retailers had positively responded to integration of Point of Sales (POS) in Karachi. “Many issues will be resolved with improvement in supply chain,” he added.

    The business community raised the issues of audit notices. Dr. Ashfaq said that action would be taken if audit notices were not responded. “The audit notices should be responded with documentary evidence,” he said.

    READ MORE: UAE favorite hiding for Pakistan assets: Dr. Ashfaq

    About the tax laws, he said that foreign companies investment in Pakistan are unaware about our domestic laws, he said and assured that the FBR would facilitate both local and foreign investors to understand tax laws.

    Earlier, Anjum Nisar, Chairman, Businessmen Panel (BMP) said that delay in tax refunds create liquidity issues for industries. He said if taxpayers delays in compliance then he is subject to penalty and surcharges. Similarly, this should be apply to tax officials, he added.

    Irfan Iqbal Sheikh, President FPCCI, put forward the concerns and complaints of the business, industry and trade community of Pakistan to the Federal Board of Revenue during the detailed visit of its Chairman, Dr. Ashfaq Ahmed; along with the top brass of FBR.

    READ MORE: FBR explains cash discount under sales tax laws

    FPCCI President said that excessive and unsubstantiated tax notices; maladministration and corrupt elements; requirement of buyers’ CNIC copy; huge backlog of refund cases; double taxation; misuse of erstwhile FATA & PATA exemptions; higher rates of corporate, sales and withholding taxes; mandatory POS integration with FBR; multiplicity of income tax slabs and SRO culture are the major impediments in reforming the taxation system and broadening of the tax base.

    Irfan Iqbal Sheikh added that 29 percent corporate tax and 17 percent sales tax are too high for economic growth, industrialization and employment generation; and, rates of these taxes should be gradually and progressively brought down. He elaborated that no country of the world has ever progressed in the absence of industrialization; while commending the recently announced industrial growth package of the federal government.

    READ MORE: FBR amends fresh property valuations for Islamabad

    Engr. M.A. Jabbar, VP FPCCI, emphasized that we have to do away with the notice manufacturing practices of the taxation machinery as that prohibits the new taxpayers to register themselves into the system to avoid unnecessary regulatory interferences.

    Dr. Ashfaq Ahmed, Chairman FBR, expressed his willingness to have policy deliberations over FPCCI’s demand of reducing audit period to three years from the current six years. He also apprised the session that FBR has performed exceedingly well despite the debilitating economic conditions arising out of COVID-19 pandemic and have collected record taxes. He also expressed his optimism that FBR can soon achieve a Tax-to-GDP ratio of 12 per cent.

  • Withholding tax should be on income: FBR Chairman

    Withholding tax should be on income: FBR Chairman

    Karachi, March 14, 2022 – The Chairman of the Federal Board of Revenue (FBR), Dr. Muhammad Ashfaq Ahmed, emphasized the need for a shift in the approach to withholding tax (WHT), suggesting that it should be levied on income rather than transactions. He made these remarks during an address at the Karachi Chamber of Commerce and Industry (KCCI) on Monday.

    (more…)
  • Adjustment restrictions hamper return filing by retailers

    Adjustment restrictions hamper return filing by retailers

    Retailers falling under Tier-1 have informed the Federal Board of Revenue (FBR) that they were unable to file monthly sales tax returns due to denial of adjustment by IRIS portal.

    A number of retailers jointly sent a letter to FBR chairman apprising about unfavorable behavior of IRIS Portal by denying adjustment against credit notes issued by Tier-1 retailers.

    READ MORE: FBR announces winners of third POS invoice draw

    The retailers drew attention of the FBR chairman towards Section 9 of the Sales Tax Act, 1990 read with Rule 20 of the Sales Tax Rules, 2006, tax invoice issued by a registered person can be amended/modified/cancelled through issuance of credit note as a result of cancellation of supply of return of goods or a change in the nature of supply or change in the value of the supply.

    They highlighted that sales made by Tier-1 retailers, as defined in clause 43A of Section 2 of the Sales Tax Act, 1990, to the end consumers are integrated with the FBR computerized system for real time reporting of sales in line with the Rules.

    READ MORE: FBR identifies 1,421 retailers for tax integration

    The FBR chairman has been informed that in case of sales return, credit note (sales return invoice) is issued by Tier-1 retailers in accordance with the relevant provisions of the Sales Tax Act, 1990. “IRIS portal of the FBR is also accepting this position and accepting credit notes issued by Tier-1 retailers, however, surprisingly, sales tax adjustment, relating to credit notes, which have been allowed in one month are being added back in sales tax liability of the next month in the IRIS based sales tax return.”

    The retailers said: “… this practice of the sales tax return portal is strictly against the law.”

    READ MORE: FBR makes rules for sealing retail outlets

    They said that if such illegal restrictions are imposed on Tier-1 retailers, who have invested huge amounts in hardware as well as software for integration of sales tax reporting with the FBR, how would it be possible for the FBR to attract other retailers to get themselves registered with the FBR. “Instead of appreciating the efforts of Tier-1 retailers, they are being denied their legal and legitimate right of sales tax adjustment on credit notes.”

    Due to serious flaw in the online sales tax return filing portal, a majority of Tier-1 retailers are still unable to file sales tax return for the month of January 2022 onward.

    The FBR chairman has been urged to direct concerned authorities to resolve the issue at the earliest to enable Tier-1 retailers to submit their sales tax return.

    READ MORE: POS invoice verification for prize scheme surges by 63%

  • UAE favorite hiding for Pakistan assets: Dr. Ashfaq

    UAE favorite hiding for Pakistan assets: Dr. Ashfaq

    Dr. Muhammad Ashfaq Ahmed, the Chairman of the Federal Board of Revenue (FBR), has drawn attention to the United Arab Emirates (UAE) as a preferred destination for parking offshore undisclosed funds by Pakistan nationals.

    (more…)
  • FBR explains cash discount under sales tax laws

    FBR explains cash discount under sales tax laws

    ISLAMABAD: The Federal Board of Revenue (FBR) has explained cash discount related to invoices issued through Point of Sale (POS) by Tier-1 retailers.

    The FBR explained through an official note dated March 17, 2022 that cash discount has been allowed in the form of reduction of prices in seasonal sales / sales and the consideration in money is received after cash discount has been allowed.

    It is clarified that the value of supply for sales tax purpose is the actual value received in monetary terms excluding the amount of sales tax and not the gross value. “Hence, the sales tax will be calculated and charged on the actual or discounted price accordingly,” the FBR added.

    The FBR previously issued clarification in this regard through the official order dated October 13, 2021 on the standardized format of the sales tax invoice notified through SRO 1006(I)/2021 dated August 09, 2021.

    The revenue body said that representations from the taxpayers and bar councils were received seeking further clarification of the ‘trade discount’.

    It said that value of supply as per section 2 (46) of the Sales Tax Act, 1990 in respect of taxable supply means the consideration in money which the supplier receives from the recipient for that supply but excluding the amount of tax.

    In the previous explanation dated October 13, 2021, the FBR clarified that the discount if any to be given by a retailer has to be depicted on the invoice horizontally i.e. from left to right.

    READ MORE: Trade discount should be displayed on invoice: FBR

    “The captions such as total, sales tax, discount allowed appearing at the bottom of the invoice are standalone notations and do not necessarily add or subtract one another.”

  • FBR amends fresh property valuations for Islamabad

    FBR amends fresh property valuations for Islamabad

    ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday made changes to property valuation tables for the capital city.

    The FBR issued SRO 428(I)/2022 dated March 15, 2022 to a make amendment in the SRO 342(I)/2022 dated March 02, 2022.

    Through the latest SRO the FBR withdrew the property valuation tables for DHA Phase 1 – 5 and DHA Valley for both residential and commercial plots.

    READ MORE: FBR re-notifies valuation of immovable properties

    The following entries in the valuation tables have been deleted for residential immovable properties:

    62DHA Phase 1Any size30,000
    63DHA Phase 2Any size35,000
    64DHA Phase 2 ExtnAny size8,264
    65DHA Phase 3Any size16,529
    66DHA Phase 4Any size9,917
    67DHA Phase 5Any size19,835
    68DHA ValleyAny size8,264

    Similarly, following entries in the valuation tables have been deleted for commercial immovable properties:

    171DHA Phase 1Commercial plot23,900
    172DHA Phase 2Commercial plot22,200
    173DHA Phase 2 ExtnCommercial plot9,183
    174DHA Phase 3Commercial plot9,183
    175DHA Phase 4Commercial plot9,183
    176DHA Phase 5Commercial plot18,365
    177DHA ValleyCommercial plot2,755

    The FBR on December 01, 2021 issued fresh and updated valuation tables for around 40 major cities of the country. However, the FBR deferred the implementation of the new valuations of immovable properties till January 15, 2022 and further deferred till January 31, 2022. The FBR once again deferred the implementation on the valuation table till February 28, 2022.

    The revised tables of valuation of immovable properties have been issued and implemented on March 02, 2022.

    READ MORE: FBR allows 20-year old house value to open plot

  • FBR announces winners of third POS invoice draw

    FBR announces winners of third POS invoice draw

    ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday announced winners of third balloting of invoices issued through Point of Sale (POS) of retailers.

    According to the FBR, the bumper prize of Rs1,000,000 has been awarded to Nasreen Akhtar on the invoice issued by Save Mart.

    READ MORE: FBR announces prize winners in second POS invoice balloting

    The FBR announced winners of two second prizes of Rs500,000 each to Muhammad Sajid Aslam on the invoice issued by New Haji Super Store and Raheel Shahbaz on the invoice issued by Rahat Bakers.

    Similarly, the four winners of third prize amounting Rs250,000 each are Muhammad Shahid ur Rehman, Shahbaz Ahmad, Gul Niaz Bibi and Furqan.

    The FBR conduct computerized balloting of invoices issued by Tier-1 retailers on every 15th day of a month. This was third draw as it was started in January 15, 2022.

    The FBR encouraged people to actively participate in the balloting to win prizes after buying from POS integrated retailers.

    READ MORE: FBR announces winners of first POS prize draw

    The FBR previously issued a procedure for participating in the prize scheme.

    The revenue body said that the customers of the integrated tier-1 retailers, whose names and CNICs are notified through random computerized draw shall be entitled to prizes in respect of their purchases from the integrated tier-1 retailers.

    The customers shall verify the electronically generated invoice of integrated retailers either through the “tax asaan” application or by sending SMS to number 9966.

    READ MORE: Prize scheme on invoices issued by retailers

    The application shall notify the customer regarding the status of the invoice either as “verified” or “unverified”.

    In case of a verified invoice, the customer shall furnish one time, the following detail to the online system, namely:- Name; CNIC; and Mobile number.

    Names and CNICs of the customers shall be included in the random computerized draw upon fulfillment of the requirement.

    In case of an unverified invoice, the customer shall report the same through the system. The Board shall conduct inquiry and take appropriate action under the relevant provisions of law.

    READ MORE: FBR launches prize scheme for POS customers

    The computerized draw for the prizes shall be held in the first week of every month at the FBR Headquarters and the invoices of the immediately preceding month shall be entered in the draw.

    Draw winners shall be required to perform biometric verification, at the nearest e-sahulat facility of NADRA and submit a scanned copy on the “tax assan” application. After successful biometric verification, winners shall be required to provide their IBAN through a “tax asaan” application.

    The total prize money and the denomination of the prizes shall be decided on month to month basis by the Board.

  • Asem Iftikhar posted as DG Digital Invoicing, Analysts

    Asem Iftikhar posted as DG Digital Invoicing, Analysts

    ISLAMABAD: The Federal Board of Revenue (FBR) on Friday transferred Asem Iftikhar, a BS-20 officer of Inland Revenue Service (IRS) to the post of Director General, Directorate General of Digital Invoicing and Analysis.

    The FBR notified transfers and postings of Inland Revenue officers in BS-18 to BS-20 with immediate effect and until further orders.

    READ MORE: FBR transfers IRS officers BS-17 to BS-20

    Following IRS officers have been transferred:

    01. Asem Iftikhar (Inland Revenue Service/BS-20) has been transferred and posted as Director General (OPS), Directorate General of Digital Invoicing and Analysis, Islamabad from the post of Chief, (Admin Pool) Federal Board of Revenue (Hq), Islamabad.

    02. Hassan Zulfiqar (Inland Revenue Service/BS-20) has been transferred and posted as Chief, (Legal-III) Legal-IR Wing Federal Board of Revenue (Hq), Islamabad from the post of Chief, (Legal-II) Legal-IR Wing Federal Board of Revenue (Hq), Islamabad.

    READ MORE: FBR notifies transfer, posting of BS-19 IRS officers

    03. Asif Haider Orakzai (Inland Revenue Service/BS-19) has been transferred and posted as Chief, (OPS) (WHT) Directorate General of Withholding Taxes Federal Board of Revenue (Hq), Islamabad from the post of Chief, (OPS) (Legal-III) Legal-IR Wing Federal Board of Revenue (Hq), Islamabad.

    04. Faisal Asghar (Inland Revenue Service/BS-19) has been transferred and posted as Commissioner-IR (OPS), Inland Revenue (Appeals-I), Faisalabad from the post of Additional Commissioner, Corporate Tax Office, Lahore.

    READ MORE: FBR transfers Sardar Khwaja as Member Audit

    05. Ms. Saima Munawar (Inland Revenue Service/BS-18) has been transferred and posted as Additional Commissioner Inland Revenue, (OPS) Regional Tax Office, Lahore from the post of Additional Director, (OPS) Addl. Directorate of Internal Audit (Inland Revenue), Quetta.

    06. Ms. Sadeea Nadeem (Inland Revenue Service/BS-18) has been transferred and posted as Additional Director, (OPS) Addl. Directorate of Internal Audit (Inland Revenue), Multan from the post of Additional Commissioner, (OPS) Regional Tax Office, Multan.

    The FBR said the officers who are drawing performance allowance prior to issuance of this notification shall continue to draw this allowance on the new place of posting.

    READ MORE: FBR transfers BS-20 IRS officers in major reshuffle

  • Tax collection from property purchase climbs up 24%

    Tax collection from property purchase climbs up 24%

    ISLAMABAD: The collection of advance tax from purchase of immovable properties climbed up by 24 per cent during first half of the current fiscal year.

    According to official data released by Federal Board of Revenue (FBR), the collection of advance tax on purchase / transfer of immovable property increased to Rs27.7 billion during first half (July – December) of fiscal year 2021/2022 as compared with Rs22.36 billion in the corresponding half of the last fiscal year.

    READ MORE: FBR registration made mandatory for housing projects

    The FBR collects advance income tax on purchase or transfer of immovable property under Section 236K of the Income Tax Ordinance, 2001. Under this Section any person responsible for registering, recording or attesting transfer of any immovable property shall at the time of registering, recording or attesting the transfer shall collect advance tax from purchaser or transferee at the rate of one per cent of the fair market value.

    READ MORE: Advance tax on purchase of immovable property

    The collection of withholding tax from income from property also recorded an increase of 12 per cent during the first half of the current fiscal year.

    The FBR collected withholding tax amounting Rs14.90 billion on income from property during first half (July – December) of 2021/2022 as compared with Rs13.32 billion in the corresponding half of the last fiscal year.

    The authorities collect withholding tax on income from property under Section 155 of the Income Tax Ordinance, 2001.

    READ MORE: Income tax on rental immoveable property