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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.

  • FBR urged to massively reduce tax rates for return filers

    FBR urged to massively reduce tax rates for return filers

    KARACHI: The Federal Board of Revenue (FBR) has been urged to massively reduce the withholding tax rates for annual filers of income tax returns in order to ease burden on compliant taxpayers.

    Pakistan Business Council (PBC) in its proposals for budget 2022/2022 submitted to the FBR, recommended reduction in withholding tax rates for return filers.

    READ MORE: Commercial importers’ under invoicing destroying industry

    It said difference in withholding tax rate between filers and non-filers is nominal. Discrimination in tax treatment of filers and non-filers is commendable.

    “However, this has now become a revenue measure with no effort to use the data collected to increase documentation and broaden the tax base,” the PBC said.

    READ MORE: FBR’s database mining suggested for new taxpayers

    It recommended that the withholding tax regime should be simplified by reducing the number of withholding provisions.

    The current withholding tax guide available on FBR website is a 48-page document as of 2021, which clearly shows the complexity of the regime from compliance and ease of doing business aspects.

    READ MORE: PBC recommends restriction on cash above certain limit

    “There needs to be a significant distinction in the withholding income tax rates charged from non-filers as compared with the rates for filers. The rates of filers need to be reduced so that not only the burden of complaint taxpayers is reduced, but also the cost of doing business for non-complaint persons is increased.”

    Earlier, the PBC urged the tax authorities to monitoring under invoicing and mis-declaration by commercial importers as those are destroying local industry.

    READ MORE: FBR proposed to exempt withholding tax on telecom services

    It further said that information regarding values at which various custom check posts clear import consignments is not publicly available. This encourages unscrupulous importers to under-declare the value of consignments to evade government revenues.

    “Values at which import shipments are cleared through PRAL or CARE need to be publicly available,” the PBC recommended.

  • FBR surpasses collection target for July – April FY22

    FBR surpasses collection target for July – April FY22

    ISLAMABAD: The Federal Board of Revenue (FBR) has surpassed revenue collection target for the first 10 months (July – April) 2021/2022 (FY22) and collected Rs4.86 trillion, a statement said on Saturday.

    The provisional collection showed the FBR collected Rs4.86 trillion during the first ten months of the current fiscal year as against the target of Rs4.346 trillion. The FBR collected Rs239 billion above the revenue collection target.

    READ MORE: March collection up over 20% amid political unrest: FBR

    The revenue body also posted a growth of 28.6 per cent to collect Rs4.86 trillion during the period under review as compared with the revenue of Rs3.778 trillion in the corresponding months of the last fiscal year.

    READ MORE: FBR posts 30% revenue collection growth in 8MFY22

    The monthly collection showed an increase in collection of 25 per cent. The FBR collected Rs480 billion during April 2022 as compared with Rs383 billion in the same month of the last year.

    The FBR said that it had agreed to a target of Rs6.1 trillion with the International Monetary Fund (IMF). However, it was never made a target for revenue collection. The actual revenue collection target was Rs5.829 trillion for the fiscal year 2021/2022.

    READ MORE: FBR collects Rs2.92 trillion in first half of FY22

    The FBR would need Rs484.5 billion per month to achieve initial target of Rs 5.829 trillion and Rs 621 billion each in May and June to achieve revised target of Rs 6100 billion. The present government is determined to collect Rs.6100 in the current fiscal year.

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

  • Commercial importers’ under invoicing destroying industry

    Commercial importers’ under invoicing destroying industry

    KARACHI: Pakistan Business Council (PBC) has said massive under-invoicing especially by commercial importers is destroying domestic industry across the board.

    (more…)
  • FBR issues sales tax refund rules for tractor manufacturers

    FBR issues sales tax refund rules for tractor manufacturers

    ISLAMABAD: The Federal Board of Revenue (FBR) on Friday April 29, 2022 issued sales tax refund rules for agriculture tractor manufacturers.

    The FBR issued SRO 563(I)/2022 dated April 29, 2022 to insert new rules in the Sales Tax Rules, 2006.

    Refund to Agricultural Tractor Manufacturers

    READ MORE: FBR transfers senior IR officers in major reshuffle

    390. Application.— (1)This Chapter shall apply to existing and future refund claims as filed by the registered agricultural tractor manufacturers engaged in supply of agricultural tractors.

    (2) The provisions of these rules shall apply only if the incidence of tax sought to be refunded has not been passed on to the consumers.

    39P. Definition.— In this chapter, unless there is anything repugnant in the subject or context,-

    (a) “agricultural tractor” means a tractor used by farmers or growers engaged in production of agricultural produce through tractor; and

    READ MORE: IR offices to observe extended working hours for collection

    (b) “eligible person” means manufacturer of agricultural tractors who supplies tractors to a person holding a valid proof of land holding such as agriculture pass book and copy of record of rights of agricultural land duly verified from Provincial Land Revenue Authorities.

    39Q. Condition on supplies of agricultural tractors.— Only eligible persons shall qualify for availing reduced rate under the Sr. No. 25 of Table-1 of the eighth schedule to the Sales Tax Act, 1990.

    39R. Filing of refund application.—The eligible person shall file a refund claim through STARR/RCPS system and refund application to the Commissioner Inland Revenue having jurisdiction, along with the following documents, namely:—

    (a) a copy of tax paid and e-filed sales tax return;

    (b) an undertaking affirming the genuineness of refund as per Sales Tax Act, 1990 and relevant rules made thereunder;

    (c) a revolving bank guarantee valid for at least one hundred and twenty days issued by a scheduled bank, to the satisfaction of the Commissioner Inland Revenue having jurisdiction of an amount not less than the average monthly refund claim during last twelve months; and

    (d) name, CNIC of buyers along with valid proof of land holding, ledger of already purchased agricultural tractors against each buyer.

    39S. Pre-refund audit.— Where the processing officer or the officer-in-charge is of the opinion that any further inquiry or audit is required in respect of refund claim or for any other reason to establish genuineness and admissibility of the claim, he may make or cause to make such inquiry or audit as deemed appropriate, after seeking approval from the concerned Additional Commissioner and inform the refund claimant accordingly. Audit under this rule shall be completed within thirty days of initiation of the proceedings.

    39T. Refund of input tax.— The refund of admissible excess input tax shall be allowed and issued within seven days of the completion of proceedings initiated under rule 39S and in case no pre-refund audit is conducted, within fifteen days of filing of the refund claim. In any case the refund of admissible excess input tax under these rules shall not be processed through FASTER module.

    39U. Filing of complete refund claim.— Within fifteen days of the sanctioning of refund, the eligible person shall file a complete refund claim along with the requisite supportive documents prescribed under Chapter V of the Sales Tax Rules, 2006.

    39V. Post Refund Audit.— Post refund audit of the refund claims processed under these rules shall be carried out by the concerned division based on the documents submitted by the eligible person and any other relevant documents called by the concerned officer to ascertain the admissibility and genuineness of the refund processed and issued under rule 39T. The proceedings under this rule shall be concluded within sixty days of filing of a complete refund claim by the refund claimant under rule 39U.

    39W. Cost Audit.— In order to determine that the incidence of excess input tax claimed as refund under these rules by an eligible person has not been passed on to the consumers,

    (a) annual cost audit will be conducted by a Cost Accountant authorized by the Board; and

    (b) cost audit for a tax year shall be conducted on the basis of twelve sales tax returns for the tax year, documents filed for refund under these rules, and any other documents called by the Cost Accountant.

    39X. Amount if found inadmissible.— In case any amount already sanctioned and paid is found inadmissible, the same shall be recovered within seven days of completion of proceedings initiated under rule 39V by encashing the bank guarantee to the extent of adjudged liabilities.

    39Y. Section 8B not applicable.— The provisions of sub section (1) of section 8B of the Sales Tax Act, 1990 shall not be applicable on refund claims of admissible excess input tax filed under these rules.

    39Z. Repeal.— The refund claims of Recognized Agricultural Tractor Manufacturers Rules, 2012 are hereby repealed.”

  • FBR transfers senior IR officers in major reshuffle

    FBR transfers senior IR officers in major reshuffle

    ISLAMABAD: The Federal Board of Revenue (FBR) has transferred senior officers of Inland Revenue Service (IRS) following change of its chairman.

    The new government appointed Asim Ahmad as FBR chairman, who assumed the charge on April 27, 2022. Asim replaced Dr. Muhammad Ashfaq Ahmed.

    After this key transfer, the FBR made major reshuffle by notifying transfers and postings of senior IRS officers.

    READ MORE: IR offices to observe extended working hours for collection

    The FBR notified transfers of the following officers of BS-19 and BS-20:

    01. Aqeel Ahmed Siddiqui (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue, Benami Zone-III, Karachi from the post of Commissioner Inland Revenue (Appeals-V), Karachi.

    The officer will assume charge after charge relinquishment of Najeeb Ahmad Memon, proceeding on NMC w.e.f 09.05.2022.

    02. Adnan Inamullah Khan (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue, (WHT) Regional Tax Office, Islamabad from the post of Commissioner, (WHT) Regional Tax Office, Sargodha.

    03. Ms. Humaira Maryam (Inland Revenue Service/BS-20) has been transferred as Commissioner Inland Revenue, (Audit-I) Corporate Tax Office, Lahore from the post of Commissioner, (Legal) Corporate Tax Office, Lahore.

    The officer will assume charge of the post on charge relinquishment of Ms. Laila Ghafoor, proceeding on NMC w.e.f 09.05.2022.

    READ MORE: Asim becomes 32nd FBR chairman

    04. Dr. Erfa Iqbal (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue, (Legal) Corporate Tax Office, Lahore from the post of Chief, (Legal-II) Legal-IR Wing Federal Board of Revenue (Hq), Islamabad.

    05. Zulfiqar Ahmad (Inland Revenue Service/BS-20) has been transferred and posted as Chief, Admin Pool Federal Board of Revenue (Hq), Islamabad from the post of Commissioner, (Enforcement) Large Taxpayers Office, Islamabad.

    06. Naeem Babar (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue, (Enforcement-II) Corporate Tax Office, Lahore from the post of Commissioner, (Chenab Zone) Regional Tax Office, Faisalabad.

    The officer will assume charge of the post on charge relinquishment of Ms. Iram Shabbir, proceeding on study leave w.e.f 15.05.2022.

    07. Ms. Shabana Mumtaz (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue, (Enforcement) Large Taxpayers Office, Islamabad from the post of Commissioner, (Legal) Large Taxpayers Office, Islamabad.

    08. Saleem Akhtar (Inland Revenue Service/BS-20) has been transferred and posted as Chief (IMC), Federal Board of Revenue (HQ), Islamabad from the post of Commissioner, (Zone-I) Regional Tax Office, Sargodha.

    09. Mohy ud Din Ismail (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue AEOI Zone, Islamabad from the post of Commissioner, (ICTO Zone) Regional Tax Office, Islamabad.

    10. Rehan Safdar (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue, (Lyallpur Zone) Regional Tax Office, Faisalabad from the post of Commissioner, (WHT) Regional Tax Office, Faisalabad.

    READ MORE: POS service fee issue hampers sales tax return filing

    The officer is also assigned the additional charge of the post of Commissioner-IR (WHT), Regional Tax Office, Faisalabad, as per Rules.

    11. Sajjad Azhar (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue, (Legal) Large Taxpayers Office, Islamabad from the post of Commissioner, (WHT) Regional Tax Office, Islamabad.

    12. Abdul Hameed Shaikh (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Appeals-V), Karachi from the post of Chief, (IR-Formations) Inland Revenue Operations Federal Board of Revenue (Hq), Islamabad.

    13. Ms. Sajida Kausar (Inland Revenue Service/BS-20) has been transferred and posted as Chief, Admin Pool Federal Board of Revenue (Hq), Islamabad from the post of Commissioner Inland Revenue AEOI Zone, Islamabad.

    14. Murtaza Siddique Khan (Inland Revenue Service/BS-19) has been transferred and posted as Chief, (OPS) (SPR&S-I) Strategic Planning Reforms & Statistics Federal Board of Revenue (Hq), Islamabad from the post of Additional Commissioner, Regional Tax Office, Gujranwala.

    15. Fazli Malik (Inland Revenue Service/BS-19) has been transferred and posted as Commissioner Inland Revenue, (OPS) (Chenab Zone) Regional Tax Office, Faisalabad from the post of Additional Commissioner, Regional Tax Office, Peshawar.

    16. Basit Saleem Shah (Inland Revenue Service/BS-19) has been transferred and posted as Chief, (OPS) (IR-Formations) Inland Revenue Operations Federal Board of Revenue (Hq), Islamabad from the post of Additional Director, Directorate General of Intelligence & Investigation (Inland Revenue), Islamabad.

    The officer is also assigned the additional charge of the post of Chief (OPS) (Analysis), Inland Revenue Operations, FBR (HQ), Islamabad, as per Rules.

    17. Muhammad Asif (Inland Revenue Service/BS-19) has been transferred and posted as Commissioner Inland Revenue, (OPS) (WHT) Regional Tax Office, Sargodha from the post of Additional Director, Addl. Directorate of Internal Audit (Inland Revenue), Peshawar.

    READ MORE: IR officers’ bid to deny tax refund adjustment criticized

    18. Pervez Ahmad Shar (Inland Revenue Service/BS-19) has been transferred and posted as Commissioner Inland Revenue, (OPS) (WHT) Regional Tax Office, Bahawalpur from the post of Additional Commissioner, Regional Tax Office, Sukkur.

    19. Ms. Adeela Yusuf Khan (Inland Revenue Service/BS-19) has been transferred and posted as Chief, (OPS) (Reforms) Reforms & Modernization Federal Board of Revenue (Hq), Islamabad from the post of Additional Director, Addl. Directorate of Internal Audit (Inland Revenue), Rawalpindi.

    20. Attique-ur-Rehman Mughal (Inland Revenue Service/BS-19) has been transferred and posted as Commissioner Inland Revenue, (OPS) (Jhang Zone) Regional Tax Office, Faisalabad from the post of Additional Commissioner, Large Taxpayers Office, Lahore.

    21. Tauqeer Ahmad (Inland Revenue Service/BS-19) has been transferred and posted as Chief, (OPS) (POS) Inland Revenue Operations Federal Board of Revenue (Hq), Islamabad from the post of Additional Commissioner, Large Taxpayers Office, Islamabad.

    22. Rehmatullah Khan Durrani (Inland Revenue Service/BS-19) has been transferred and posted as Commissioner Inland Revenue, (OPS) (Zone-II) Regional Tax Office, Quetta from the post of Additional Commissioner, Regional Tax Office, Sukkur.

    23. Ihsan Ullah (Inland Revenue Service/BS-19) has been transferred and posted as Additional Commissioner Inland Revenue, Regional Tax Office, Islamabad from the post of Additional Commissioner, Regional Tax Office, Rawalpindi.

    24. Qadir Nawaz (Inland Revenue Service/BS-19) has been transferred and posted as Additional Commissioner Inland Revenue, Regional Tax Office, Faisalabad from the post of Additional Commissioner, Corporate Tax Office, 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 place of posting.

  • IR offices to observe extended working hours for collection

    IR offices to observe extended working hours for collection

    The Federal Board of Revenue (FBR) has issued a directive for the extension of working hours at Inland Revenue (IR) offices on April 29 and 30, 2022 (Friday and Saturday) for revenue collection.

    (more…)
  • FBR’s database mining suggested for new taxpayers

    FBR’s database mining suggested for new taxpayers

    KARACHI: Federal Board of Revenue (FBR) has been suggested for mining its database in order to identifying new taxpayers and ease burden on the existing taxpayers.

    The Pakistan Business Council (PBC) in its proposals for budget 2022/2023 submitted to the FBR, said that the country had low taxpayer base which resulted in reliance on the existing taxpayers.

    READ MORE: PBC recommends restriction on cash above certain limit

    “The number of taxpayers needs to be significantly increased – the narrow taxpayer base is leading to greater pressure on the existing taxpayers.”

    There is need to document the economy and provide level playing field to the formal sector.

    READ MORE: FBR proposed to exempt withholding tax on telecom services

    The PBC suggested mining of FBR’s database to identify new taxpayers and those not fully discharging their liabilities.

    The FBR has got access to financial data in various forms including the monthly statements submitted by withholding tax / collecting agents as per various sections. Information as per Statement under sections 165A, 165B, 175A of Income Tax Ordinance, 2001 and NADRA, FIA, Bureau of Immigration and Overseas Employment records are also available.

    READ MORE: Zero rate tax demanded for pharmaceutical API imports

    “This can be a start to bringing new taxpayers in the net. In addition, the FBR has also collected data about tax paid by non-filers on vehicles, immovable property and on gains made in the Stock Market,” it added.

    Earlier, the PBC also recommended restriction on use of cash above certain limit. “Restrictions on use of cash above a certain limit would also assist,” the PBC said.

    READ MORE: OICCI recommends tax amendment for FMCG

  • PBC recommends restriction on cash above certain limit

    PBC recommends restriction on cash above certain limit

    KARACHI: Pakistan Business Council (PBC) has recommended use of cash above certain limit in order to document the economy.

    In its proposals for budget 2022/2023 submitted to Federal Board of Revenue (FBR), the PBC recommended that the use of cash in the economy should be discouraged.

    READ MORE: FBR proposed to exempt withholding tax on telecom services

    “Restrictions on use of cash above a certain limit would also assist,” the PBC said.

    The transit treaty with Afghanistan has been misused through diversion of goods to Pakistan.

    The Afghan Transit Trade Agreement has expired, with the evolving situation in Afghanistan, Pakistan needs to look to renegotiate the treaty with clauses putting in quantitative and qualitative restrictions on what can transit, insist on letters of credit, charge duty and General Sales Tax (GST) on import which would only be refunded to the Afghan government on exit, track and monitor containers, strengthen inspection of empty containers returning to Pakistan and make physical controls along the border stronger.

    READ MORE: Zero rate tax demanded for pharmaceutical API imports

    “The civil and military authorities need to be on the same page to do this,” the council recommended.

    Electronic Data Interchange with key trading partners should be deployed to check under-invoicing of imports. The provinces have little incentive to check smuggling as customs duty and GST evaded are federal taxes and do not hurt their revenues.

    READ MORE: OICCI recommends tax amendment for FMCG

    Provinces may be incentivized to conduct raids on shops that deal in smuggled goods. Positive lessons from the success of cell phone registration with Pakistan Telecom Authority (PTA) and Urdu language labelling requirement for imported food items can be applied to other smuggling prone goods.

    READ MORE: FBR urged to review minimum tax for OMCs, refineries

  • FBR makes tax stamps mandatory for fertilizer bags

    FBR makes tax stamps mandatory for fertilizer bags

    ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday made tax stamps mandatory for packing and supply of fertilizer bags.

    The FBR issued Sales Tax General Order (STGO) No. 15 of 2022 to implement track and trace system under SRO 250/2019 related to fertilizer bags.

    The FBR said that the provisions of Section 40C (2) of the Sales Tax Act, 1990 read with Rule 150ZF of the Sales Tax Rules, 2006 mandate the revenue body to notify the date for the implementation of Electronic Monitoring of production and sales of goods in the manner prescribed in the law on all manufacturing sites of notified sectors.

    READ MORE: FBR directed to bring entire sugar supply chain into tax net

    The board further said in exercise of the powers conferred under Section 40C(2) of the Sales tax Act, 1990 and Rule 150ZF of the Sales Tax Rules, 2006 it is hereby notified that no fertilizer bag shall be allowed to be removed from a production site, factory premises or manufacturing plant or import station without affixation of tax stamps/Unique Identification Markings (UlMs) with effect from July 01, 2022, which are to be obtained/procured from FBR’s Licensee M/s. AJCL/MITAS/Authentix Consortium.

    Under SRO 250/2019 it has been made mandatory for goods to be affixed with tax stamps, banderoles, stickers, labels, barcodes, etc.

    READ MORE: IR officers’ bid to deny tax refund adjustment criticized

    It said that every package, including a tin, container or bottle, of the specified goods whether manufactured or imported shall be affixed or printed a tax stamp, banderole, sticker, label, barcode etc.

    Provided that in respect of such specified goods which are exempt or meant for export tax stamps shall not be required to be affixed thereon, but shall be clearly, legibly and indelibly marked as “Exempt Goods” or “For Export”, as the case may be.

  • FBR directed to bring entire sugar supply chain into tax net

    FBR directed to bring entire sugar supply chain into tax net

    ISLAMABAD: President of Pakistan, Dr. Arif Alvi has directed the Federal Board of Revenue (FBR) to bring entire supply chain of sugar sector into to tax net.

    Dr Arif Alvi directed the tax authorities to bring into the tax net the unregistered wholesalers, dealers or distributors of sugar buying huge quantities from sugar mills to broaden the tax base, according to a press statement issued on Monday April 25, 2022.

    READ MORE: President Alvi retains major penalty on NAB official

    The President observed that despite making huge monetary transactions and the availability of their data with FBR, these unregistered buyers of sugar largely remained outside the tax net and were evading the prime national responsibility of paying taxes.

    He passed these directions while upholding a decision of the Federal Tax Ombudsman (FTO) directing FBR to bring unregistered buyers of sugar in bulk into the tax net to improve the collection of sales tax and reporting compliance within 90 days.

    As per details, FTO had initiated an Own Motion investigation against the failure of FBR to bring into the tax net the unregistered buyers of sugar from M/s Naudero Sugar Mills (Pvt) Ltd.

    READ MORE: President Alvi directs bank to refund unfair recovery

    The FTO observed that non-NTN holders had been buying huge quantities of sugar from sugar mills and their data was fully accessible by the FBR but this huge potential for tax collection remained unutilized.

    In its report, the FTO highlighted that during the last four years sugar worth Rs 2.7 billion was supplied by the said mills to various unregistered buyers, only three buyers held NTN, and FBR had not paid due attention to broadening the tax base.

    It further observed that this low hanging fruit had not yet been harvested and despite making huge monetary transactions, unregistered buyers of sugar remained outside the tax net.

    READ MORE: President Alvi rejects FBR plea in maladministration cases

    The FTO underscored that unregistered persons were easily identifiable because sugar mills were required to maintain records of supplies made during the tax period and issue tax invoices indicating names, addresses, description, quantity, values of goods, CNIC or NTN of persons to whom the supplies were made under the Sales Tax Act of 1990.

    Based on these findings, FTO had directed the Chief Commissioner, Large Taxpayers’ Office, Karachi to enforce compliance after obtaining data of unregistered persons from the sugar mills.

    The FBR filed a representation with the President against this order of FTO. President Dr Arif Alvi disposed of the matter with the observations that FBR’s field formations were not vigilant in collecting information related to unregistered buyers and were content with just whatever was being submitted in the monthly sales tax returns of mills.

    READ MORE: Dr. Alvi orders action over misconduct with 82-year taxpayer

    He regretted that the data of unregistered buyers was not being examined for the purpose of broadening the tax net. He noted that FBR’s field formations held jurisdiction over sugar mills and could secure the complete particulars of all buyers by proper and timely analysis of withholding statements.

    Serious negligence and inefficiency on part of the field formations of FBR in the discharge of its duties was tantamount to maladministration, he added.

    He observed that FTO’s recommendations were only a reiteration of the duty of FBR to strictly deal with unregistered sugar dealers to bring them under the tax net.

    READ MORE: Dr. Alvi rejects banker’s plea in woman harassment case

    He directed that FTO’s recommendations must be applied to the entire sugar sector to increase compliance with taxes and to enrol those who were escaping the prime national responsibility of paying taxes.

    The President disposed of FBR’s representation with the direction to submit a comprehensive implementation report to FTO within 60 days.