Section 202 of the Income Tax Ordinance, 2001, updated up to June 30, 2021, now allows the Chief Commissioner, with the prior approval of the Board, to compound offences either before or after the institution of proceedings.
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Institution of prosecution proceedings
The Federal Board of Revenue (FBR) has been granted enhanced authority to initiate prosecution proceedings under Section 201 of the Income Tax Ordinance, 2001.
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New penalty regime introduced for non-filing tax returns
The Federal Board of Revenue (FBR) has introduced new penalty regime introduced for non-filing tax returns in order to encourage documentation.
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NADRA’s computation to be treated as assessment: FBR
ISLAMABAD: Federal Board of Revenue (FBR) has said that computation of income and assets prepared by the National Database Registration Authority (NADRA) shall be treated as assessment.
The FBR in explanation to Tax Laws (Third Amendment) Ordinance, 2021 said that a new section 175B has been inserted in the Income Tax Ordinance, 2001 aiming to broaden the tax base through collaboration between NADRA and FBR.
Sub-section (1) of section 175B mandates NADRA to share its records or any other information available or held by it, on its own motion or upon application by the Board.
Sub-section (2) thereof allows NADRA to compute indicative income and tax liability on the basis of various expenses, receipts, assets, properties and liabilities etc. using artificial intelligence, mathematical or statistical modeling or any modern methods.
The FBR may forward such information to the concerned tax authorities having jurisdiction in connection to the subject matter relating to the information, who may utilize the information for the purpose of levy of tax.
The indicative income and tax liability shall be communicated to the person to whom it relates. Such person shall have the option to pay tax as prescribed. In case of failure to pay such liability within stipulated
timeframe, the tax authority shall take action under the provisions of the Ordinance on the basis of the Indicative Income so computed.
If the person against whom the liability has been determined under sub-section (4) of the newly inserted section pays such liability, such payment shall be construed to be an amended assessment order under section 120 or 122(1) or 122(4) as the case may be.
Board is also vested with the powers to make rules for the purposes of subsections (4) and (5) to prescribe the extent of installments, and any relief regarding the penalty and default surcharge, and time limits.
To provide an enabling environment for the joint mechanism the restrictions on provision of information in terms of section 198 have been done away with and the said section is now omitted.
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FBR rebuts currency smuggling to Afghanistan
ISLAMABAD: Federal Board of Revenue (FBR) strongly rebutted the reports of currency smuggling from Pakistan to Afghanistan.
In a statement issued on Friday, the FBR categorically rebutted the unfounded, malicious intent and misleading in content propaganda being advanced by some irresponsible elements that there was a huge flight of dollars from Pakistan.
It is further clarified that previously the bilateral trade between Pakistan and Afghanistan was carried out in US Dollars but now the same is being conducted in Pak Rupees (PKR).
Furthermore, FBR has taken very stringent enforcement measures at the Airports to eliminate the possibility of any such an unethical practice.
Pakistan Customs has made it mandatory for all passengers flying out of the country to undergo thorough personal scrutiny and 100 per cent declaration of currency through an automated process in order to ward off this nefarious illegal activity. This leaves the little possibility of the subject undesirable practice.
It is most likely that Chairman FBR and Member (Customs Operations) will visit the Pak-Afghan border to oversee the functioning of the above mechanism on the ground.
It is further reiterated that this transparent and efficient mechanism being adopted at all the airports across Pakistan is facilitating the smooth and easy movement of outbound passengers, thus significantly reducing their time and cost.
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Prosecution for offence by companies, AOPs
Section 200 of Income Tax Ordinance, 2001 has explained the prosecution for offence by companies or association of persons (AOPs).
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 is the text of Section 200 of Income Tax Ordinance, 2001:
200. Offences by companies and associations of persons. — (1) Where an offence under this Part is committed by a company, every person who, at the time the offence was committed, was –
(a) the principal officer, a director, general manager, company secretary or other similar officer of the company; o
(b) acting or purporting to act in that capacity,
shall be, notwithstanding anything contained in any other law, guilty of the offence and all the provisions of this Ordinance shall apply accordingly.
(2) Where an offence under this Part is committed by an association of persons, every person who, at the time the offence was committed, was a member of the association shall be, notwithstanding anything contained in any other law, guilty of the offence and all the provisions of this Ordinance shall apply accordingly.
(3) Sub-sections (1) and (2) shall not apply to a person where –
(a) the offence was committed without the person’s consent or knowledge; and
(b) the person has exercised all diligence to prevent the commission of the offence as ought to have been exercised having regard to the nature of the person’s functions and all the circumstances.
(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.)
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Non-filers get ready for suspension of phone, gas, power
The Federal Board of Revenue (FBR) in Pakistan has issued a stern warning to individuals who failed to file their annual tax returns by September 30, 2021.
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FBR not to ask source of remittances sent through ECs
ISLAMABAD: Federal Board of Revenue (FBR) on Thursday said that tax authorities will not ask source of foreign exchange not exceeding Rs5 million remitted through exchange companies (ECs) or money transfer operators.
The FBR issued explanation to the Tax Laws (Third Amendment) Ordinance, 2021. The revenue body said Section 111(4) of Income Tax Ordinance, 2001 provides exclusion from unexplained income or assets to any amount of foreign exchange remitted from outside Pakistan through normal banking channels not exceeding Rs5 million en-cashed into rupees by a scheduled bank.
The amendment through insertion of an explanation has now also treated remittances through Money Service Bureaus (MCBs), Exchange Companies (ECs) and Money Transfer Operators (MT0s) or other similar entities as foreign exchange remitted from outside Pakistan through normal Banking channels.
After a formal clarification from SBP, Circular No. 05 of 2022 was issued by the Board.
Through this amendment the FBR’s clarification has now been made part of legislation to facilitate foreign remittance and align the law with innovations that have taken place in the banking industry.
Through the Circular No. 05 of 2022, the FBR has withdrawn all the appeals pertaining to income tax exemption on inward foreign remittances.
“In order to win the trust of the taxpayers and spare the public resources for more productive use elsewhere, all departmental appeals filed on the strict sensu interpretation of the law, be withdrawn immediately, and no further appeals be filed if one all fours of this clarification,” according to the circular.
Further, all circulars and instructions issued on the matter previously issued stand rescinded, the FBR added.
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Draft rules issued for Uzbekistan-Pakistan transit trade
ISLAMABAD, April 17, 2025 — The Federal Board of Revenue (FBR) has taken a major step to enhance regional trade by issuing draft rules for the Uzbekistan-Pakistan Transit Trade (UPTT) mechanism. These regulations aim to formalize and streamline the movement of goods between Pakistan and Uzbekistan, promoting cross-border trade through efficient logistics and transparent customs procedures.
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Abetment in tax matters to be offence
Section 199 of the Income Tax Ordinance, 2001, updated up to June 30, 2021, now explicitly outlines that knowingly and willfully aiding, abetment, assisting, inciting, or inducing another person to commit an offense under the ordinance is a punishable offense, carrying the risk of a fine or imprisonment for a term not exceeding three years, or both.
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