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.

POS retailers to get refunds automatically: Tariq Mustafa

KARACHI: Tariq Mustafa Khan, Chief Commissioner Inland Revenue, Regional Tax Office (RTO) Karachi has said that retailers who installed Point of Sales (POS) will gain refunds automatically.

“The retailers will also not subject to audit,” he said while speaking with office bearers of Karachi Chamber of Commerce and Industry (KCCI) on Thursday.

“POS, which was currently for business falling under Tier-I, will gradually be installed all over the country with a view to save the economy from tax evasion”, he added.

READ MORE: All shopkeepers to install POS machines: CTO Chief

President KCCI Muhammad Idrees, Senior Vice President Abdul Rehman Naqi, Vice President Qazi Zahid Hussain, Chairman of Special Committee for Small Traders Majeed Memon, Chairman GST/ SRB Subcommittee Shoaib Ahmed Faridi, Chairman Federal Taxation Subcommittee Hilal Ahmed Sheikh, KCCI Managing Committee Members and others were also present at the meeting.

Chief Commissioner RTO explained that any shopkeeper who comes under the purview of seven conditions defined for Tier-I will have to fulfil the POS condition.

“Shopkeepers must come out of fear as they will be fully protected in case of any illegal action. Our doors are always open and you can visit my office anytime for assistance without seeking appointment,” he assured and advised shopkeepers to submit written complaints in case they were being victimized, ill-treated or blackmailed by any officer of his department. Action will be taken by initiating investigation within 24 hours with a view to create a taxpayers’ friendly environment.

READ MORE: FBR posts officials at retail outlets for sales monitoring

“Whoever has received notices pertaining to POS, his business must be falling in any of the seven categories defined in Tier-I. We don’t want to close down your business. This system is purely for the benefit of businesspeople hence, maximum number of people must become part it,” he said.

Appreciating President KCCI’s suggestion, he agreed that his department’s team will hold awareness sessions not only at KCCI but also at respective markets. “It is not only the responsibility of Muhammad Idrees to support and facilitate shopkeepers but ours as well,” he added.

Tariq Mustafa Khan, while congratulating KCCI Office Bearers on assuming charge of Chamber’s affairs appreciated all the efforts being made to highlight the problems pertaining to POS and other taxation issues.

READ MORE: Point of sale machines allowed tax credit

Speaking on the occasion, President KCCI Muhammad Idrees stated that to properly and effectively implement POS system on Tier-I Retailers without troubling the shopkeepers, the field formation teams need to play a more proactive role while awareness has to be raised amongst shopkeepers who currently stand unguided and were reluctant to seek assistance mainly due to existing negative perception about tax authorities. “The past practices of field formation officers are discouraging shopkeepers to integrate with FBR via POS which requires attention”, he added.

He also pointed out that Gul Plaza was not an airconditioned mall but due to inevitable requirement at the basement, some shopkeepers have installed air conditioners and similar was the case at some other malls as well hence, all such shops should not be held responsible for failing to comply with POS condition as these cannot be treated under Tier-I.

Muhammad Idrees further argued that all laws being devised by FBR including POS system remain confined to business community of Karachi only at initial phase whereas it appears that the rest of the country stands exempted.

READ MORE: CTO Karachi seals three retail shops on POS failure

He advised Chief Commissioner to hold awareness sessions at KCCI for shopkeepers of markets and malls and these sessions must also be organized at relevant markets as well so that misunderstandings and grievances could be dealt as people were largely unaware to such an extent that they were even not aware that shopkeepers can also get rebate under POS.

He said that taxpayers were being harassed by issuing notices for monitoring and audit of multiple tax years and were compelled to comply to these notices within a short period of merely 4 to 5 days. In this regard, he proposed that field formations should be restricted from initiating proceedings of multiple years while adequate time period has to be prescribed under the law which should be provided to taxpayers for responding to a particular notice.

He sought Chief Commissioner’s support in improving the business climate, rationalizing taxation and reducing cost of doing business so that the country could be brought to the level of realizing its true economic potential.

February 3, 2022
FBR freezes accounts of top banker for tax recovery

The Federal Board of Revenue (FBR) has taken stringent action against a top banker by attaching three of his bank accounts for tax recovery.
(more…)

February 3, 2022
FBR postpones new property valuation till February 28

ISLAMABAD: The Federal Board of Revenue (FBR) on Wednesday postponed the implementation of new and revised valuation of immovable properties till February 28, 2022.

The FBR said that new and revised valuation tables of immovable properties issued on December 01, 2021 would remain in abeyance till February 28, 2022 and those valuation tables would be re-notified on March 01, 2022.

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 on December 01, 2021 issued fresh and upward revised valuation tables for immovable properties located in 40 major cities of the country.

READ MORE: FBR issues new, revised tables of property valuation

The revenue body decision to defer the implementation came after several complaints received by the FBR those were pertaining to high valuation in the new tables.

The complaints were lodged by stakeholders including real estate agents and town developers, who pointed out extraordinary rise in property rates in the latest valuation tables.

The FBR issued detailed instructions to the tax offices on the procedure to be adopted to review the anomalies in the property rates and rationalize the same.

READ MORE: FBR’s new, old valuation tables for Karachi properties

Accordingly, it has been decided to review and revisit the notified valuation tables wherever overvaluation or undervaluation is pointed out by a stakeholder.

The FBR asked all the Chief Commissioners Inland Revenue (CCIRs) to constitute Valuation Review Committees (VRCs), and notify them by December 10, 2021.

Any stakeholder having any reservations about valuations may lodge a representation before VRC by December 15, 2021. Chief Commissioners will undertake consultative process with the stakeholders and engage SBP’s approved valuers for determination of values, which could be either more or less than the lately notified valuations.

To issue the fresh and revised valuation tables, the FBR exercised its powers vested in the Income Tax Ordinance, 2001. The aim was to bring the FBR values at par with the fair market values.

However, certain objections from stakeholders highlighted anomalies and aberrations in the newly notified valuation tables. Although, the notified valuations have been arrived at by FBR Field Formations through a rigorous consultative process and wherefore have largely been well-received, yet the possibility of error cannot be ruled out, and the same cannot be taken as carved in stone.

The VRCs shall decide upon the representations by January 10, 2022, and forward the same to FBR for notification. All recommendations made by VRCs vis-à-vis revaluations shall be re-notified on January 15, 2022, which shall come into force on January 16, 2022. In the meantime, SRO No.1534-1572(I)/2021 dated 01.12.2021 are held in abeyance to allow registration of the in-process transactions.

February 2, 2022
FBR explains amendments to Customs Act 1969

ISLAMABAD: The Federal Board of Revenue (FBR) has issued explanation of amendments in the Customs Act, 1969 made through Finance (Supplementary) Act, 2022.

The FBR issued Customs Circular No. 01 of 2022 to explain the changes.

Power to determine the customs value:

Under Section 25A of the Customs Act, 1969, both the Collector of Customs and the Director Valuation were authorized to determine the Customs Value of imported or exported goods on his own motion or on a reference made to him by any person after following the methods laid down in Section 25 of the Customs Act 1969. However, in order to being uniformity, the role of Collector of Customs has been omitted and now the powers under section 25A have been entrusted with the respective Director of Customs Valuation to bring standardization in the process of fixation of values of goods.

READ MORE: PTBA demands date extension for filing sales tax return

Review of the value determined:

The post of Member Customs (Policy) and the Director General of Customs Valuation are both administrative in nature. Therefore, on the principle of natural justice, amendment has been made in section 25D so that appeal against the decision of DG valuation should not lie before the Member Customs (Policy) and should be taken up at judicial fora to redress the grievances.

READ MORE: All shopkeepers to install POS machines: CTO Chief

Checking of goods declaration by the Customs:

Limiting the checking of goods declaration within three years of its clearance under Sub-section (1) of Section 83 of the Customs Act, 1969 is uncalled for as the time limit aspect has already been dealt under Section 32 of the Customs Act, 1969. Accordingly, section 80 has been amended.

Provisional determination of liability:

Corporate guarantee is the instrument in which the guarantor is the entity or the individual submitting the guarantee whereas in case of bank guarantee or pay order the issuing bank is the guarantor. In order to secure government revenue “Corporate Guarantee” has been omitted from section 81 of the Customs Act, 1969, retaining only bank guarantee and pay order for the purpose.

READ MORE: FBR notifies transfers of BS-17-19 customs officers

Appeals to the Appellate Tribunal:

The powers of Member (Customs Policy) with regard to hearing of appeals against the decision/order of DG valuation has been withdrawn. Now, instead of filing appeal before the Member Customs (Policy) against the order/decision of DG Valuation, Section 194A has been amended so that the aggrieved party may file appeal before the Appellate Tribunal.

Reference to High Court

The amendment in this section 196 is the consequential effect of the amendment proposed in Section 25D of the Customs Act, 1969, whereby the powers of Member (Customs Policy) with regard to hearing of appeals against the decision/order of DG valuation have been omitted/withdrawn.

READ MORE: FBR posts 30% growth to collect Rs3.35 trillion

February 2, 2022
Tarin launches automated currency declaration system

ISLAMABAD: Finance Minister Shaukat Tarin launched automated currency declaration system at Federal Board of Revenue (FBR) Headquarter here on Tuesday.
(more…)

February 2, 2022
PTBA demands date extension for filing sales tax return

ISLAMABAD: Pakistan Tax Bar Association (PTBA) on Tuesday demanded the tax authorities to extend the last date for filing sales tax return for the month of December 2021 because taxpayers have failed to make compliance due to technical issues on the IRIS portal.

The PTBA in a letter to the chairman of Federal Board of Revenue (FBR) informed about the glitches in filing the sales tax return or National Sales Tax Return and urged to extend the date for filing the monthly return for the period December 2021 up to February 15, 2022.

READ MORE: FBR further extends date for filing sales tax return

The actual cutoff date for filing sales tax return for December 2021 was January 18, 2021. However, due to problems on the national tax portal, the FBR extended the date twice; first extended up to January 24, 2022 and later it was further extended up to January 28, 2022.

Rana Munir Hussain, President, PTBA in its letter to the FBR chairman appreciated the initiative of single sales tax return for all federal and provincial taxpayers. However, at the same time he pointed out some challenges pertaining to IRIS system, which are still creating difficulty/issues due to the newly introduced IRIS module.

The PTBA received many request from its affiliated tax bars to take up the matter with FBR for extension in time for filing of Sales Tax Return for the Tax Period December-2021. All these written as well as verbal requests are revolving around the IRIS module technical issues, slow response of the system, errors and glitches on the part of FBR being faced by the taxpayers as well as professional/legal fraternity while filing Sales Tax Return through IRIS, without removing the pointed out inter alia, filing of correct sales tax returns is not possible, with the request to take up this matter on priority basis and matter in detail, is being discussed hereunder:

Name of Person is appearing instead of business name, whereas a business is registered instead of person under the sales tax law, which is creating hardship to identify the person/business entity.

Exclusion from 8B is not available where 80% sales of goods have been made under 3rd Schedule of the Sales Tax Act, 1990.

Withholding Sales Tax (WHST) credit is not available.

Revised return Tab is not available.

Sales Tax Rate for vehicle below 1000CC @ 12.5% is not available.

Registration Number editing facility is not available, which leads to deletion and re-entry of data/invoice.

Sales tax return filed by the individual taxpayer, where entries have been made through NTN, input credit to buyer is not available, which is causing hardship to file the return.

Sales or purchase invoices are not in chronological order (invoice number & date), which is difficult task to verify/re-check/reconcile the shuffled data/invoices.

Figures are shown in decimal numbers, which creates confusion at the time of calculating liability or verify the data/invoices.

Annexure-F is calculating double VAT (value Addition charged at import stage to commercial importer) or giving double credit of VAT, which will result into loss to National Exchequer.

No effect of debit or credit note is allowing the IRIS system (sales return shall be reported in Annexure-C (reduction in sales/sales tax payable), whereas purchase return shall be reported in Annexure-A (reduction in purchase/input tax credit).

Printing of return on three pages instead of one page (without annexures), a sheer wastage of national resources and loss of foreign exchange due to use of imported paper.

Printing of return without annexures is useless.

In the light of the aforesaid facts and legal exposition, the date of filing of Sales Tax Return for the Tax Period December-2021, the PTBA said, and demanded to extend the date up to 15th day of February 2022.

READ MORE: KTBA highlights anomalies in single sales tax return

February 1, 2022
All shopkeepers to install POS machines: CTO Chief

KARACHI: Dr. Aftab Imam, Chief Commission Inland Revenue, Corporate Tax Office (CTO) Karachi on Tuesday said that installation o Point of Sale (POS) machines to be extended to all types of shopkeepers.

Although installation of Point of Sales (POS) machines is currently mandatory for bigger stores/ shops falling under Tier-1 retailers. “But eventually, every shopkeeper will have to get the POS machines installed at their premises which was the only way to ensure that all the taxes being generated from sales were directly being submitted to the national exchequer,” he added.

READ MORE: FBR posts officials at retail outlets for sales monitoring

He was speaking at a meeting with office bearers of Karachi Chamber of Commerce and Industry (KCCI).

Dr. Aftab Imam said in order to quickly process the Sales Tax Returns being submitted in huge quantities every month by the taxpayers, a state-of-the-art IDEA software has been introduced at the Inland Revenue Department where the pilot run was going on smoothly hence, it was being expected that this software will be fully launched in July 2022.

READ MORE: Point of sale machines allowed tax credit

He invited KCCI’s delegation to visit IR department to witness the performance of IDEA software which would make things easier and help in dealing with the problems being faced by taxpayers in submitting sales tax refunds.

He informed that in order to improve the functioning of IR department, all the recruitments were now strictly being done purely on the basis of merit so that competent and hardworking workforce could be created which should facilitate the taxpayers instead of creating problems.

Chairman Businessmen Group & Former President KCCI Zubair Motiwala, who joined the meeting via Zoom, pointed out that many issues mostly pertaining to issuance of notices have been lying pending at numerous offices of the IR department which need to be resolved on priority. Huge number of notices including Withholding Tax Notices and Audit Notices were being issued to taxpayers without any justification which was a very serious issue hindering government’s ease of doing business policy, he said, and suggested that instead of seeking entire data and documentation from taxpayers, FBR should only collect information about any suspicious/ missing transactions without disturbing the entire flow.

READ MORE: CTO Karachi seals three retail shops on POS failure

He said that although taxpayers have been regularly submitting all the documentations on monthly basis yet the FBR officials without taking the already submitted documentation into consideration, demand the same documents again and any failure or delay in doing so creates a lot of problems for taxpayers who find themselves stuck up in a web of harassment. “To deal with these kinds of issues, it is really necessary to adopt state-of-the-art and completely flawless IT solutions as per international standards which would reduce human interaction and help in minimizing the incidents of harassment”, he added.

President KCCI Muhammad Idrees, in his remarks, suggested that FBR should focus on other cities as well because it seems that the current policies were being implemented in Karachi only which, despite so many odds and challenges, continues to contribute more than 65 percent revenue to the national exchequer yet, the business community of this city was being compelled to face notices and go through harassment. “Instead of squeezing the business community of Karachi, uniform policies have to be devised and effectively implemented all over the country”, he added and advised that tax collecting authority should initiate market-based awareness sessions which will be fully facilitated by KCCI.

READ MORE: PM appealed restoring gas to Karachi industrial zones

While appreciating the sincerity of Chief Commissioner towards promptly resolving the grievances being faced by the business community, Muhamad Idrees mentioned that a particular case, which was pending since last six months, was instantly resolved within one day as soon as it was brought to the notice Dr Aftab Imam who always tries his best to get other cases referred by KCCI resolved as well which pertain to any other department.

He opined that tax was a by-product of a vibrant economy and efforts for increasing tax collection can only yield desirable results through sustainable growth in economic activities. The measures taken through Supplementary Finance Bill will have a significant impact on the poor and middle-class segments due to increase in prices of consumer goods.

“The 17 percent GST imposed on formula milk, enhancement of tax from 5 percent to 12.5 percent on imported vehicles, 17 percent increase in prices of mobile phones exceeding $200 and Sales Tax on import of raw material which has also been increased from 5 per cent to 10 per cent while withdrawal of exemptions worth Rs31 billion will prove counterproductive to the economic growth and business development,” he added.

He further stated that it was very unfortunate that FBR has been allowed to freeze banks accounts of the businessmen and can enter any premises. “Such discretionary powers to tax officials were fueling corruption in the system. Such measures should only be taken after the businessman is proven guilty and should not be used as a tool to harass businessmen.”

Muhammad Idrees further pointed out that taxpayers were being harassed by issuing notices for monitoring and audit of multiple tax years and they were being compelled to comply to these notices in short period of time of merely 4 to 5 days.

“Hence, I propose that the field formations should be restricted from initiating proceedings of multiple years at once. Also, some minimum time period should be prescribed under the law which should be provided to taxpayers for responding to a particular notice,” Muhammad Idrees said, “To make the tax mechanism more efficient, unnecessary powers of FBR should be curtailed, audit process should be reformed and laws should be passed for harassment by minimizing person to person contact.”

February 1, 2022
FBR posts 30% growth to collect Rs3.35 trillion

ISLAMABAD: The Federal Board of Revenue (FBR) has collected Rs3.35 trillion during the first seven months (July – January) 2021/2022 with a growth of over 30 per cent, a statement said on Monday.

The FBR issued provisional numbers of collection made during first seven months of the current fiscal year. The revenue body collected Rs2.571 trillion in the corresponding months of the last fiscal year.

READ MORE: FBR eyes Rs6 trillion collection in current fiscal year

The seven months collection also surpassed the target of Rs3.09 trillion.

The net collection for the month of January, 2022 realized Rs430 billion representing an increase of 17.2 per cent over Rs 367 billion collected in January, 2021. These figures would further improve before the close of the day and after book adjustments have been taken in to account.

READ MORE: Annual sales tax collection from imports climbs up 27%

On the other hand, the gross collections increased from Rs 2,705 billion during July, 2021 to January, 2022 to Rs 3,533 billion in current Financial Year July, 2021 to January, 2022, showing an increase of 30.6 per cent Likewise, the amount of refunds disbursed was Rs 182 billion during July, 2021 to January, 2022 compared to Rs 134 billion paid last year, showing an increase of 35.9 per cent.

READ MORE: FBR identifies 1,284 retailers for POS integration

It is pertinent to mention that FBR has introduced a number of innovative interventions both at policy and operational level with a view to maximize revenue potential through digitization, transparency, and taxpayers’ facilitation.

This has not only resulted in ensuring the ease of doing business but also translated in a healthy and steady growth in revenue collection. Likewise, the incumbent top leadership of FBR has launched a new culture of clean taxation with a clear focus on collecting only the fair tax and not holding up refunds which are due to be paid. This has not only fast tracked the process of bridging the trust deficit between FBR and Taxpayers but also ensured the much needed cash liquidity for business community.

READ MORE: FBR may issue special procedure under sales tax law

That’s precisely why, for the first time ever in the country’s history, FBR continues to surpass its assigned revenue targets despite challenges and price stabilization measures adopted by the government.

January 31, 2022
FBR notifies transfers of BS-17-19 customs officers

ISLAMABAD: Federal Board of Revenue (FBR) on Monday notified transfers and postings of officers of Pakistan Customs Service (PCS) in BS-17 to BS-19 with immediate effect until further orders.

The FBR notified transfers and postings of following customs officers:

READ MORE: FBR transfers BS-18 to BS-20 IRS officers

01. Fahad Ali Chaudhry (PCS/BS-19) has been transferred and posted as SA to chief collector of Customs (North), Customs House, Islamabad from the post of additional director, directorate of internal audit – North (Customs), Islamabad.

02. Sajid Khan (PCS/BS-17) has been transferred and posted as assistant collector, collectorate of customs enforcement, Dera Ismail Khan from the post of Assistant Collector, Collectorate of Customs, Appraisement, Peshawar.

READ MORE: FBR transfers 36 Customs officers in BS-17 to BS-19

03. Muhammad Bakht Jamshaid Baryar (PCS/BS-17) has been transferred and posted as assistant director, directorate of IPR Enforcement (South) Karachi from the post of assistant director, Directorate General of Risk Management, Karachi.

04. Anees Ali Syed (PCS/BS-17) has been transferred and posted as Assistant Collector, Collectorate of Customs Enforcement, Dera Ismail Khan from the post of Assistant Director, Directorate of IPR Enforcement (South) Karachi.

05. Salman Ahmed (PCS/BS-17) has been transferred and posted as Assistant Director, Directorate of Transit Trade (HQ), Karachi from the post of Assistant Collector, Collectorate of Customs Appraisement (West), Custom House, Karachi.

READ MORE: FBR notifies transfers of IRS officers in BS-19-20

06. Ms. Maryam Jamila (PCS/BS-17) has been transferred and posted as assistant collector, collectorate of customs enforcement, Multan from the post of Assistant Collector, Collectorate of Customs Sambrial, Sialkot.

07. Shahzad Ali (PCS/BS-17) has been transferred and posted as Assistant Director, Directorate General of Risk Management, Karachi from the post of Assistant Collector, Collectorat of Customs Appraisement (East), Custom House, Karachi.

08. Shahzad Akhtar Mahmood (PCS/BS-17) has been transferred and posted on promotion as Assistant Director, Directorate of IPR Enforcement (North) Islamabad from the post of superintendent, collectorate of customs enforcement, Lahore.

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

READ MORE: FBR announces transfers of senior tax auditors

January 31, 2022
FBR implements new property valuations on February 01

ISLAMABAD: The Federal Board of Revenue (FBR) will apply the new valuation tables for immovable properties in major cities of the country from February 01, 2022.

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 on December 01, 2021 issued fresh and upward revised valuation tables for immovable properties located in 40 major cities of the country.

READ MORE: FBR issues new, revised tables of property valuation

The revenue body decision to defer the implementation came after several complaints received by the FBR those were pertaining to high valuation in the new tables.

The complaints were lodged by stakeholders including real estate agents and town developers, who pointed out extraordinary rise in property rates in the latest valuation tables.

The FBR issued detailed instructions to the tax offices on the procedure to be adopted to review the anomalies in the property rates and rationalize the same.

Accordingly, it has been decided to review and revisit the notified valuation tables wherever overvaluation or undervaluation is pointed out by a stakeholder.

READ MORE: FBR’s new, old valuation tables for Karachi properties

The FBR asked all the Chief Commissioners Inland Revenue (CCIRs) to constitute Valuation Review Committees (VRCs), and notify them by December 10, 2021.

Any stakeholder having any reservations about valuations may lodge a representation before VRC by December 15, 2021. Chief Commissioners will undertake consultative process with the stakeholders and engage SBP’s approved valuers for determination of values, which could be either more or less than the lately notified valuations.

To issue the fresh and revised valuation tables, the FBR exercised its powers vested in the Income Tax Ordinance, 2001. The aim was to bring the FBR values at par with the fair market values.

However, certain objections from stakeholders highlighted anomalies and aberrations in the newly notified valuation tables. Although, the notified valuations have been arrived at by FBR Field Formations through a rigorous consultative process and wherefore have largely been well-received, yet the possibility of error cannot be ruled out, and the same cannot be taken as carved in stone.

The VRCs shall decide upon the representations by January 10, 2022, and forward the same to FBR for notification. All recommendations made by VRCs vis-à-vis revaluations shall be re-notified on January 15, 2022, which shall come into force on January 16, 2022. In the meantime, SRO No.1534-1572(I)/2021 dated 01.12.2021 are held in abeyance to allow registration of the in-process transactions.

January 30, 2022