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.

Tax rates on transfer of motor vehicles during TY22

The rates of income tax on transfer of motor vehicles during tax year 2022 to be applicable under Second Schedule of Income Tax Ordinance, 2001.

The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

Following are the rates of income tax transfer of motor vehicles on that shall be applicable during tax year 2022 under Section 231B:

(1) The rate of tax under sub-sections (1) and (3) of section 231B shall be as set out in the following table:–

TABLE

S. No.	Engine capacity	Tax
(1)	(2)	(3)
1.	upto 850cc	Rs. 7,500
2.	851cc to 1000cc	Rs. 15,000
3.	1001cc to 1300cc	Rs. 25,000
4.	1301cc to 1600cc	Rs. 50,000
5.	1601cc to 1800cc	Rs. 75,000
6.	1801cc to 2000cc	Rs. 100,000
7.	2001cc to 2500cc	Rs. 150,000
8.	2501cc to 3000cc	Rs. 200,000
9.	Above 3000cc	Rs. 250,000

2) The rate of tax under sub-sections (2) of section 231B shall be as follows:–

S. No.	Engine capacity	Tax
(1)	(2)	(3)
1.	upto 850cc	–
2.	851cc to 1000cc	5,000
3.	1001cc to 1300cc	7,500
4.	1301cc to 1600cc	12,500
5.	1601cc to 1800cc	18,750
6.	1801cc to 2000cc	25,000
7.	2001cc to 2500cc	37,500
8.	2501cc to 3000cc	50,000
9.	Above 3000cc	62,500

Provided that the rate of tax to be collected shall be reduced by 10% each year from the date of first registration in Pakistan.

(3) The rate of tax under sub-section (2A) of section 231B shall be as follows:—

TABLE

S. No.	Engine capacity	Tax
(1)	(2)	(3)
1.	Up to 1000cc	Rs. 50,000
2.	1001cc to 2000cc	Rs.100,000
3.	2001cc and above	Rs.200,000”

(Disclaimer: The text of the above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

Withholding tax rates on transfer of motor car ownership

October 27, 2021

Tax rates on telephone users during tax year 2022

The rates of income tax on telephone users for tax year 2022 to be applicable under Section Schedule of Income Tax Ordinance, 2001.

The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

Following are the rates of income tax on telephone users that shall be applicable during tax year 2022 under Section 236:

The rate of tax shall be 10 per cent of the exceeding amount of bill in case of a telephone subscriber (other than mobile phone subscriber) where the amount of monthly bill exceeds Rs1000.

The tax rate shall be 10 per cent for tax year 2022 and 8 per cent onwards of the amount of bill or sales price of internet pre-paid card or prepaid telephone card or sale of units through any electronic medium or whatever form in the case of subscriber of internet, mobile telephone and pre-paid internet or telephone card.

Following is the text of Section 236 of Income Tax Ordinance, 2001:

236. Telephone and internet users.- (1) Advance tax at the rates specified in Division V Part IV of the First Schedule shall be collected on the amount of –

(a) telephone bill of a subscriber;

(b) prepaid cards for telephones;

(c) sale of units through any electronic medium or whatever form; and

“(d) internet bill of a subscriber; and

(e) prepaid cards for internet.”

(2) The person preparing the telephone or internet bill shall charge advance tax under sub-section (1) in the manner telephone or internet charges are charged.

(3) The person issuing or selling prepaid cards for telephones or internet shall collect advance tax under sub-section (1) from the purchasers at the time of issuance or sale of cards.

(3A) The person issuing or selling units through any electronic medium or whatever form shall collect advance tax under sub-section (1) from the purchaser at the time of issuance of sale of units.

(4) Advance tax under this section shall not be collected from Government, a foreign diplomat, a diplomatic mission in Pakistan, or a person who produces a certificate from the Commissioner that his income during the tax year is exempt from tax.

Tax rates on usage of phone, internet for 2021-2022

(Disclaimer: The text of the above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

Tax rates on electricity consumption during TY 2022

October 27, 2021

Tax rates on electricity consumption during TY 2022

The rates of income tax on electricity for tax year 2022 to be applicable under Second Schedule of Income Tax Ordinance, 2001.

The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

Following are the rates of income tax on electricity consumption shall be applicable during tax year 2022 under Section 235:

Electricity Consumption

(1) The rate of collection of tax from commercial and industrial consumers from gross amount of bills shall be as set out in the following Table, namely:—

TABLE S. No	Gross amount of Bill	Tax
1	upto Rs. 500	Rs. 0
2	exceeds Rs. 500 but does not exceed Rs. 20,000	10% of the amount
3	exceeds Rs.20,000	Rs. 1950 plus 12% of the amount exceeding Rs.20,000 for commercial consumers Rs. 1950 plus 5% of the amount exceeding Rs.20,000 for industrial consumers

(2) The rate of tax to be collected on domestic electricity consumption shall be—

(i) zero percent the amount of monthly bill is less than Rs.25,000; and

(ii) 7.5% if the amount of monthly bill is Rs. 25,000 or more;

The rates of tax for domestic users under Section 235 have been amended and additional tax has been imposed on domestic electricity consumers. For further details please visit following link:

Domestic electricity consumers to pay 35% additional AIT

(Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

Tax rates on motor vehicles during tax year 2022

October 27, 2021

ATIR directs FBR to depute competent officers

The Appellate Tribunal Inland Revenue (ATIR) has issued a directive to the Federal Board of Revenue (FBR), urging the deputation of competent officers to represent tax cases during hearings.
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October 26, 2021

Tax rates on motor vehicles during tax year 2022

The rates of income tax on motor vehicles for tax year 2022 to be applicable under Second Schedule of Income Tax Ordinance, 2001.

The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

Following are the rates of income tax on motor vehicles shall be applicable during tax year 2022:

Rates of collection of tax under section 234,—

(1) In case of goods transport vehicles, tax of two rupees and fifty paisa per kilogram of the laden weight shall be charged.

(1A) In the case of goods transport vehicles with laden weight of 8120 kilograms or more, advance tax after a period of ten years from the date of first registration of vehicle in Pakistan shall be collected at the rate of twelve hundred rupees per annum;

(2) In the case of passenger transport vehicles plying for hire with registered seating capacity of—

S.No.	Capacity	Rs per seat per annum
(i)	Four or more persons but less than ten persons.	50
(ii)	Ten or more persons but less than twenty persons.	100
(iii)	Twenty persons or more.	300

(3) In case of other private motor vehicles shall be as set out in the following Table, namely:-

S. No.	Engine capacity	Tax
(1)	(2)	(3)
1.	upto 1000cc	Rs. 800
2.	1001cc to 1199cc	Rs. 1,500
3.	1200cc to 1299cc	Rs. 1,750
4.	1300cc to 1499cc	Rs. 2,500
5.	1500cc to 1599cc	Rs. 3,750
6.	1600cc to 1999cc	Rs. 4,500
7.	2000cc & above	Rs. 10,000

(4) where the motor vehicle tax is collected in lump sum,

S. No.	Engine capacity	Tax
(1)	(2)	(3)
1.	upto 1000cc	Rs. 10,000
2.	1001cc to 1199cc	Rs. 18,000
3.	1200cc to 1299cc	Rs. 20,000
4.	1300cc to 1499cc	Rs. 30,000
5.	1500cc to 1599cc	Rs. 45,000
6.	1600cc to 1999cc	Rs. 60,000
7.	2000cc & above	Rs. 120,000

Tax rates on petroleum products during tax year 2022

October 26, 2021

Tax rates on petroleum products during tax year 2022

The Federal Board of Revenue (FBR) has unveiled the income tax rates applicable to petroleum products for the tax year 2022 under the Second Schedule of the Income Tax Ordinance, 2001.
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October 26, 2021
Tax rates on brokerage and commission in tax year 2022

The Federal Board of Revenue (FBR) has released the income tax rates applicable to brokerage and commission for the tax year 2022, as outlined in the Second Schedule of the Income Tax Ordinance, 2001.
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October 26, 2021
KTBA highlights issues in implementing digital payments

KARACHI: Tax practitioners have said that implementing digital payments mode for corporate entities is not possible due to various difficulties.

Karachi Tax Bar Association (KTBA) in a letter sent on Monday to the Muhammad Ashfaq Ahmed, Chairman, Federal Board of Revenue (FBR), informed that a provision of digital payment was introduced through Tax Laws (Third Amendment) Ordinance, 2021. This provisions is scheduled to implement from November 01, 2021.

Muhammad Zeeshan Merchant, President, KTBA said that the condition is remarkably in contradiction with other modes of payment through banking channels, which is historically remained in practice and is widely accepted under the provisions of the Income Tax Ordinance, 2001.

“We feel that this provision of law is antibusiness; sans due diligence and is incorporated without taking the stakeholders into confidence,” he said.

Additionally, it is not practical for many business houses, he added.

A summary explaining certain situations (and by no means a complete synopsis) is given below:

(a) You will appreciate that it is normal business practice that in lieu of advance delivery of goods, the buyer tenders its payment by way of post-dated cheques, which is normally accepted by the other party and is inherently a secured way of making the payment. We are afraid that this law of “digital mode of payment” is surely going to hamper the business activities, as it does not cater the situation and solution of such transactions.

(b) Normally, it is a practice that, the port terminal charges, wharfage charges, charges for clearance of delivery orders etc., are paid in advance through crossed cheques or pay-orders. We understand that presently, the businesses, including but not limited to Port Terminal Operators and Shipping Lines, are unaware and are not ready for implantation of this “digital mode of payment”. In our view, it needs a rigorous awareness campaign for them.

(c) Furthermore, we feel that the similar issues are likely to arise and are to be faced by the Companies for making payments to the growers of various agricultural crops such as sugar cane, rice, cotton, wheat etc. We feel that a rigorous campaign is also required for the recipients of such payments.

(d) Moreover, in our view this “digital mode of payment” is also impractical and is likely to affect the business transactions in the cases where petty cash payments, in aggregate exceed millions of rupees, which cannot be made digitally.

(e) Furthermore, we understand that various banks have fixed their own limitation on the quantity of making digital/online payments in a day and have also fixed the threshold of the amount and they do not allow to exceed the threshold limit fixed by them. In our view, this also needs a proper campaign without which the implementation of the law is not possible.

The KTBA said that the tax authorities would come across with the other impediments on the subject in times to come.

We strongly believe that, unless there is a wide off the mark in conventional banking transaction, this move is likely to create lots of trouble for the Corporate Sector.

It is, therefore, suggested that the mandatory condition of “digital mode of payment” for Companies as envisaged U/s. 21 (la) of the Income Tax Ordinance, 2001, be allowed to run simultaneously with other conventional modes of payments for at least a year so that their business is not affected and is smoothly run till they are aware of this change in the mode of payment.

FBR suspends credit notes against unregistered supplies

October 25, 2021
Engro Fertilizers awarded for largest taxpayer

Engro Fertilizers has been recognized as the largest tax paying company in the fertilizer sector. Engro Fertilizer is Pakistan’s premier seed-to-harvest solutions provider.

Engro Fertilizers has been recognized as the largest tax paying company in a ceremony held at the Aiwan-e-Sadr.

Nadir Qureshi, CEO of Engro Fertilizers, received the award from the Honorable President Dr. Arif Alvi, who was the chief guest on this occasion.

According to Nadir Qureshi, “For over 50 years, Engro Fertilizers has remained committed to serving the farmers of Pakistan with world-class products and solutions. Our contributions to the community and the national exchequer are a testament to our philosophy of doing good while doing well. We fully support the Government’s vision of transforming the agricultural landscape and improving the well-being of the farmers of Pakistan.”

He added: “the fertilizer industry in Pakistan operates at the highest level of transparency, with all companies listed and contributing high tax revenues to the Government. Our sector is the only sector whose contributions in taxes to the national exchequer are almost entirely equal to the income provided to the shareholders of fertilizer companies. This makes the Government of Pakistan an equal partner in the earnings of the fertilizer sector.”

Qureshi appreciated the Government for enabling the domestic fertilizer sector to provide adequate and affordable supply of urea to farmers in Pakistan, despite the steep rise in international prices. Continued support from the Government will ensure farmer well-being and even higher tax contributions from the fertilizer industry. He stated that the fertilizer industry of Pakistan is internationally competitive and can thrive in a fully deregulated environment, even without any gas subsidies.

The local industry has always provided farmers in Pakistan with urea at prices below international and is currently delivering a discount of circa Rs 5000/bag compared to the global market.

Through import substitution, the fertilizer sector will contribute more than $3 billion towards reducing the trade deficit in 2021. As a result of the significantly lower prices, the local fertilizer industry will save farmers from an additional burden of Rs 363 billion in 2021 as well.

The ceremony was organized by the Rawalpindi Chamber of Commerce and Industry (RCCI) and Federal Board of Revenue (FBR) to appreciate the contribution of leading taxpayers and business institutions in the development of economy, while also highlighting the government’s efforts to facilitate the taxpayers.

The event was also attended by the Federal Minister for Privatization Muhammad Mian Soomro, senior FBR and government officials, President RCCI Nadeem Rauf and other prominent business personalities.

October 25, 2021
Tax rates on prize and winnings during tax year 2022

The income tax rates on prize and winnings for tax year 2022 to be applicable under Section Schedule of Income Tax Ordinance, 2001.

The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

Following are the rates of income tax on prize and winnings:

(1) The rate of tax to be deducted under section 156 on a prize on prize bond or cross-word puzzle shall be 15 per cent of the gross amount paid.

(2) The rate of tax to be deducted under section 156 on winnings from a raffle, lottery, prize on winning a quiz, prize offered by a company for promotion of sale, shall be 20 per cent of the gross amount paid.

Following is the text of Section 156 of the Income Tax Ordinance, 2001:

156. Prizes and winnings.—(1) Every person paying prize on a prize bond, or winnings from a raffle, lottery, prize on winning a quiz, prize offered by companies for promotion of sale, or cross-word puzzle shall deduct tax from the gross amount paid at the rate specified in Division VI of Part III of the First Schedule.

(2) Where a prize, referred to in sub-section (1), is not in cash, the person while giving the prize shall collect tax on the fair market value of the prize.

(3) The tax deductible under sub-section (1) or collected under sub-section (2) shall be final tax on the income from prizes or winnings referred to in the said sub-sections.

(Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

Tax rates on income from property during tax year 2022

October 24, 2021