The Federal Board of Revenue (FBR) has extended an invitation to stakeholders, including businesses, experts, and the general public, to contribute their insights and proposals for income tax improvements in preparation for the budget of 2022/2023.
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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.
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Monitoring of GLT plants must to plug tax evasion
Experts believe that unchecked tobacco processing in green leaf threshing (GLT) plants is the root cause of massive tax evasion in tobacco sector.
“At times when Pakistan is struggling to increase revenue, Government’s indifference towards tax evasion is incomprehensible,” according to an expert.
Tobacco industry is one of the five industries which cause a loss of more than Rs310 billion annually to the national exchequer through tax evasion and illegal trade, yet the authorities are not serious enough to take stringent actions against tax theft.
“The market share of illegal tax-evading tobacco companies has reached 40 per cent causing a loss of Rs80 billion annually and strict enforcement of national laws is needed to prevent damage to the national treasury from the illicit sale of cigarettes,” the expert added.
Supervising the entire supply chain of the cigarette industry is a difficult task in which there is a possibility of corruption due to human intervention. This difficulty can be alleviated by monitoring the green leaf threshing phase of tobacco.
The Federal Board of Revenue (FBR) provides legal authority for monitoring of green leaf threshing plants under SRO 1149 (I) 2018. However, over the last four years, this SRO has not yet been fully implemented to eliminate tax evasion from the cigarette industry.
A report by the Federal Tax Ombudsman (FTO) pointed out that there is a significant difference between the tax record and the Pakistan Tobacco Board’s statistics.
According to the FTO, the inspection by the Commissioner Inland Revenue, Regional Tax Office, Peshawar, proved that lack of effective monitoring of GLT plants caused a loss of Rs40 billion in taxes to the national exchequer during 2017-18 and 2018-2019.
The FTO has recommended the FBR to implement real-time and verifiable issuance of invoices, blocking all types of post-seizure verifications or data fudging / forgery. The FTO has also recommended the FBR to immediate implementation of Rule 89 especially sub-rules (2) and (3) read SRO 1149 (1) dated 18th September 2018.
According to the experts, the lack of supervision of threshing plants is the basis of tax evasion of billions of rupees annually by the cigarette industry in Pakistan. The non-implementation of SRO 1149 (I) 2018 despite the lapse of four years is serious negligence.
The experts advised that supervising 10 green leaf threshing plants is easier than monitoring over 60 cigarette factories and more than 2 million retailers in Pakistan.
The experts said that authorities should take a more systematic approach during 2022 with regards to track and trace system, to ensure tax evasion is converted into tax paid.
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Regulatory duty on motor vehicles increased to 50%
In a bid to curb the escalating import bill and foreign exchange outflow, the Federal Board of Revenue (FBR) unveiled a significant surge in regulatory duty on the import of new motor vehicles.
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Services tax on forex companies under provincial ambit
Islamabad, January 21, 2024 – The Federal Board of Revenue (FBR) issued a clarification in response to recent news reports, asserting that the tax collection on services provided by foreign exchange companies falls under the jurisdiction of provinces.
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FBR issues updated rates of duty, taxes on mobile phones
ISLAMABAD: The Federal Board of Revenue (FBR) has issued the updated applicable rates of duty and taxes for clearance of mobile phones.
The FBR said that following rate of duty and taxes for the clearance of mobile phones shall be applicable during (2021-2022) (with passport applied within 60 days of arrival in Pakistan):
READ MORE: FBR collects mobile phone tax, PTA clarifies
Mobile Phones having cost and freight (C&F) value up to $30, the rate of duty and tax has been fixed at Rs430.
Mobile Phones having C&F value above $30 and up to $100, the rate of duty and tax has been fixed at Rs3,200.
Mobile Phones having C&F value above $100 and up to $200, the rate of duty and tax has been fixed at Rs9,580.
Mobile Phones having C&F value above $200 and up to $350, the rate of duty and taxes shall be Rs12,200 + 17 per cent Sales Tax Ad Valorem.
READ MORE: FBR increases income tax to 15% on cellular services
Mobile Phones having C&F value above $350 and up to $500, the rate of duty and tax shall be Rs17,800 + 17 per cent Sales Tax Ad Valorem.
Mobile Phones having C&F value above $500, the rate of duty and tax shall be Rs27,600 + 17 per cent Sales Tax Ad Valorem.
Rate of duty and taxes on mobile phones 2021/2022 (Applied with CNIC):
Mobile Phones having C&F value up to $30, the rate of duty and tax has been fixed at Rs550.
READ MORE: FBR issues new FED rates on motor vehicles
Mobile Phones having C&F value above $30 and up to $100, the rate of duty and taxes has been fixed at Rs4,323.
Mobile Phones having C&F value above $100 and up to $200, the rate of duty and tax has been fixed at Rs11,561.
Mobile Phones having C&F value above $200 and up to $350, the rate of duty and tax shall be Rs14,661 + 17 per cent Sales Tax Ad Valorem.
Mobile Phones having C&F value above $350 and up to $500, the rate of duty and tax shall be Rs23,420 + 17 per cent Sales Tax Ad Valorem.
READ MORE: Banks to share business account details to FBR
Mobile Phones having C&F value above $500, the rate of duty and tax shall be Rs37,007 + 17 per cent Sales Tax Ad Valorem.
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FBR eyes Rs6 trillion collection in current fiscal year
ISLAMABAD: Dr. Ashfaq Ahmed, Chairman, Federal Board of Revenue (FBR) on Wednesday hoped that the revenue collection for the current fiscal year will increase to Rs6 trillion – surpassing the target of Rs5.83 trillion.
“Our revenue target is Rs 5.830 trillion which is expected to increase till Rs6 trillion by June 2022. We have collected Rs 300 billion more revenue than our target till December 31,” Dr. Ashfaq said.
READ MORE: DG Customs Valuation powers strengthened
He expressed his hope that this year, the FBR would achieve all its revenue targets and would further play its role in the country’s economy.
The FBR chief hinted for achieving revenue target of Rs 8 trillion by 2023 as it would set the country’s economy in a new direction.
He said that Prime Minister Imran Khan has his own vision for revenue collection and economic development in the country, in which, achieving revenue target of up to Rs 8 trillion is one of top priorities.
READ MORE: Tax imposed to protect domestic entertainment industry
Chairman expressed these views while talking to the journalists here.
Replying to a question, he said that Pakistan Customs was the protector of economic borders of the country and that they have always been playing its role for trade promotion.
He said that Pakistan Customs was playing its best role in enforcing trade laws at Chaman and Torkham borders.
He said that transparent trade brought prosperity and development in the country.
READ MORE: FBR slaps sales tax at 17% on supply of food stuff
He vowed that, “we would digitalize every FBR’s agency”.
He said that FBR currently has the largest data portal which is in a dire need of digitization.
This data can be very important in the trade and economic development of the country.
He said that at present, the role of FBR was very important in all three trade corridors including Chaman and Torkham, which would be strengthened with China Pakistan Economic Corridor (CPEC).
READ MORE; FBR enhances tax rates on motor vehicle registration
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DG Customs Valuation powers strengthened
ISLAMABAD: The powers of Director General Customs Valuation have been strengthened through amendments made through Finance (Supplementary) Act, 2022.
The powers of Customs Collector to determine customs valuation have been withdrawn through Finance (Supplementary) Act, 2022.
Sources in Federal Board of Revenue (FBR) on Tuesday said that through the Finance (Supplementary) Act, 2022 amendment had been made in Section 25A of the Customs Act, 1969.
READ MORE: Tax imposed to protect domestic entertainment industry
Prior to the amendment the power to determine the customs value was with the collector of customs and the director of customs valuation.
The collector of customs was given power to determine the valuation through Finance Act, 2021. However, after only six months the legislators had abolished the power of customs collector.
Following the latest amendment the power to determine the customs valuation is now with the Director General of Valuation.
READ MORE: FBR slaps sales tax at 17% on supply of food stuff
Another important amendment has been made to Section 25D of the Customs Act, 1969 through Finance (Supplementary) Act, 2022. Prior to the amendment, the Section 25D allowed an aggrieved person to file an appeal before the Member Customs (Policy) against the value determine by the Director General Valuation.
READ MORE; FBR enhances tax rates on motor vehicle registration
Through the Finance (Supplementary) Act, 2022, the proviso in the Section 25D has been omitted so that appeal against the decision of Director General Valuation should not be filed before the Member Customs (Policy) and should be taken up at an appropriate judicial forum to redress the grievances.
The supplementary act further provided that an order passed in revision by the Director General Customs Valuation under section 25D, provided that such appeal shall be heard by a special bench consisting of one technical member and one judicial member.
READ MORE: FBR increases income tax to 15% on cellular services
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FBR collects mobile phone tax, PTA clarifies
In response to the recent surge in taxes and duties on the registration of cellular mobile devices and handsets, the Pakistan Telecommunication Authority (PTA) issued a clarification on Monday, emphasizing that the applicable duty and taxes are solely collected by the Federal Board of Revenue (FBR).
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FBR further extends date for filing sales tax return
ISLAMABAD: Federal Board of Revenue (FBR) on Monday further extended the last date for filing sales tax and federal excise return for the month of December 2021 up to January 28, 2022.
The FBR issued an office order to further extend the date of payment and filing of sales tax and federal excise return for the tax period of December 2021. Previously, the FBR issued an office order on January 17, 2022 to extend the date.
The taxpayers are required to file their sales tax returns for the month of December 2021 through the Single Sales Tax Portal.
READ MORE: FBR launches sales tax return filing through single portal
The FBR on December 27, 2021 issued a notification under which it directed the taxpayers to file their sales tax returns for month of December 2021 through Single Sales Tax Portal.
The payment of sales tax and federal excise duty, which was due on January 15, 2022 had been extended up to January 21, 2022. The FBR further extended the date for payment up to January 25, 2022.
READ MORE: Power of the Board and Commissioner to call for records
Similarly, the last date for filing sales tax and federal excise return for the month of December 2021 was due on January 18, 2022, which was extended up to January 24, 2022. The FBR further extended the date for filing the return for the month of December 2022 up to January 28, 2022.
The single portal for sales tax returns has been launched to facilitate taxpayers, promote ease of doing business and reduce compliance cost.
The FBR said that through this portal, sales tax registered persons shall be able to file a single sales tax return instead of having to file separate returns to the FBR and each of the different provincial sales tax authorities.
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Tax imposed to protect domestic entertainment industry
The Federal Board of Revenue (FBR) has introduced taxes on foreign-produced TV dramas and advertisements as part of its efforts to safeguard and promote the domestic media industry.
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