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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 announces reduction in sales tax rates on petroleum products

    FBR announces reduction in sales tax rates on petroleum products

    ISLAMABAD: Federal Board of Revenue (FBR) has announced reduction in sales tax rates on supply of petroleum products in order to ensure availability of fuel at lower rates.

    The FBR issued SRO 807(I)/2021 dated June 26, 2021 for notifying the reduction in sales tax on petroleum products.

    According to the SRO the sales tax rate on kerosene oil has been reduced to 6.7 per cent from 9.15 per cent. Similarly, sales tax on light diesel oil has been reduced to 0.2 percent from 2.74 per cent.

    However, the sales tax rates on petrol and high diesel oil has been kept unchanged at 17 per cent.

    The government on June 15, 2021 announced increase in prices of petroleum products for next fortnight, which are as follows: MS (Petrol) has been increased by Rs2.13 from Rs108.56 to Rs110.69 per liter, High Speed Diesel was increased by Rs1.79 from Rs110.76 to Rs112.55 per liter, Kerosene (SKO) was increased by Rs1.89 from Rs80.00 to Rs81.89 per liter and Light Diesel Oil was increased by Rs2.03 from Rs77.65 to Rs79.68 per liter.

    FBR sources said that the sales tax rate has been reduced because the government had not passed on the actual increase in petroleum products prices to the general public.

  • IR offices to remain open till midnight of June 30 for collection of duty, taxes

    IR offices to remain open till midnight of June 30 for collection of duty, taxes

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday said that the offices of Inland Revenue (IR) will observe extended working hours and remain open till mid-night on June 30, 2021 for collection of duty and taxes.

    In an official notification the FBR directed all tax offices to observe extended working hours till 12:00 midnight on Wednesday June 30, 2021 to facilitate the taxpayers in payment of duty and taxes.

    The FBR directed the chief commissioners of Inland Revenue to establish liaison with the State Bank of Pakistan (SBP) and authorized branches of the National Bank of Pakistan (NBP) to ensure transfer of tax collection by these branches on June 30, 2021 to the respective branches of the SBP on the same date so as to account for the same towards the collection for the month of June 2021.

    In another notification, the SBP asked banks to observe extended hours for collection of duty and taxes.

    The SBP said that SBP-BSC offices and NBP branches would observe extended banking hours till 8:00 PM on June 30, 2021 for collection of government duties and taxes.

    The clearing instruments, collected by SBP-BSC offices and NBP branches till 8:00 PM for payment of government taxes shall be lodged in special clearing to be arranged through NIFT at 8:00PM on June 30, 2021.

    The SBP said that the NIFT shall arrange special clearing for same day clearing of payment instruments collected till 8:00PM on June 30, 2021. NIFT shall submit final returns to SBP-BSC offices for settlement by 10:00PM, same day.

    M/s. 1Link shall arrange to provide the batches of Alternate Deliver Channels (ADCs) transactions executed till 12:00 AM on June 30, 2021 by 9:00 AM on July 01, 2021 to SBP for settlement.

    In order to eliminate the issue of spillover receipts, the NBP shall ensure that no instrument concerning government receipts, lodged in aforesaid office hours, shall remain unattended at any NBP branch and shall be settled in the value date of June 30, 2021 through special clearing.

  • FBR directs timely disposal of pension, retirement cases

    FBR directs timely disposal of pension, retirement cases

    ISLAMABAD: The Federal Board of Revenue (FBR) on Friday directed the field formation to ensure timely disposal of pension and retirement cases otherwise the officers concerned will be responsible for any lapse.

    An official notification issued by the FBR stated that it is observed with serious concern that field formations while forwarding / submitting retirement cases / pension papers for the approval / signatures of competent Authority don’t follow the procedures of the Government and FBR’s instructions issued on the subject from time to time.

    In some cases pension papers of officers / officials are received after their date of retirement. This at times causes embarrassment to the department.

    The Pension Rules for Civil Servants stipulate the procedure and stages for disposal of pension cases (refer to S.No. 53 & 54 “A manual of pension procedures”).

    As per the aforesaid rules, action on the pension papers of a civil servant should be initiated one year before a Government servant is due to retire, so that pension may be sanctioned a month before the date of his retirement.

    Similarly, the Establishment Division’s Instructions, (conveyed to all ministries / departments, vide letter No. 330/RP/2016- WO(P) dated 12.05.2017) also emphasise that “the retirement Notifications / office orders of the retiring officers/officials shall be issued at least one year before retirement on  attaining the age of superannuation”.

    All Additional Commissioners / Deputy Commissioners, Additional Directors / Deputy Directors (HQ) are personally liable for timely submission of pension cases as per procedure / instructions issued by the Government.

    In view of the above, the officers have been directed to ensure that cases of all officers / officials under your control retiring by 30.06.2022 are processed by 15.07.2021 positively. ADCIR / DC (HQs) shall personally be held responsible for any lapse in this regard.

  • Investors allowed carry forward capital losses on disposal of securities

    Investors allowed carry forward capital losses on disposal of securities

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday allowed investors of Pakistan Stock Exchange (PSX) to carry forward capital losses for calculation of capital gain tax.

    In this regard the FBR issued SRO 801(I)/2021 to make amendment in the Income Tax Rules, 2002.

    The FBR previously issued draft rules through SRO 639(I)/2021 dated June 01, 2021 for seeking feedback from stakeholders.

    As per the SRO a substitution in sub-rule (3) of Rule 13D of the Income Tax Rules, 2002 has been made. According to the amendment:

    (3) Capital loss arising on disposal of listed securities in tax year 2019 and onwards that has not been set off against the gain of the person from disposal of listed securities chargeable to tax during the tax year shall be carried forward to the following tax year and set off only against the gain of the person from disposal of listed securities chargeable to tax but no such loss shall be carried forward to more than three tax years immediately succeeding the tax year for which the loss was first determined.

    In Rule 13N, the substitution in sub-rule (7), as:

    (7) Capital loss arising on disposal of listed securities in tax year 2019 and onwards that has not been set off against the gain of the person from disposal of listed securities chargeable to tax during the tax year shall be carried forward to the following tax year and set off only against the gain of the person from disposal of listed securities chargeable to tax but no such loss shall be carried forward to more than three tax years immediately succeeding the tax year for which the loss was first determined.

    A new sub-rule after the sub-rule 7 has been inserted, which is:

    (7A) Capital loss arising on disposal of listed securities in tax year 2019 and onward shall be carried forward to a subsequent tax year for setting off, in the manner prescribed as follow:

    (a) The setting off of eligible capital loss carried forward from previous tax year(s) shall be made by National Clearing Company of Pakistan Limited (NCCPL) under this rule, only in respect of a taxpayer whose name appear or appeared in the Active Taxpayers List (ATL) pertaining to the tax year to which such loss pertains as witnessed by the ATL available on FBR’s website after updation for the tax year to which such loss pertains;

    (b) adjustment of carried forward capital loss(es) shall be made on monthly basis by the NCCPL from the first month of updation of ATL for the tax year and on first-in first-out (FIFO) basis;

    (c) The NCCPL may requisition date wise position of ATL in respect of particular taxpayer from Information Technology (IT) Wing of the FBR as and when required;

    (d) At the end of relevant tax year, NCCPL shall maintain tax year-wise balance of unexpired carried forward capital losses separately identifiable for computation of limitation period for each ta year; and

     (e) The manner of adjustment of capital loss carried forward from previous tax years will be in accordance with illustration given in clause (zf) of Rule 13P.

  • General Sales Tax on wheat bran taken back: FBR

    General Sales Tax on wheat bran taken back: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday said that the proposal of 17 percent sales tax on wheat bran has been taken back.

    In a statement, the FBR said that in order to boost the present government’s drive to keep inflation under control and to give maximum relief to the business community, General Sales Tax (GST) on wheat bran proposed to be enhanced to 17 percent in the Finance Bill is also being taken back.

    The FBR further clarified that the table prescribing tax rates for minimum tax on turnover basis has been substituted in the Finance Bill-2021 to provide relief to retailers of Fast Moving Consumer Goods (FMCG) including flour mills and refineries.

    The words, “flour mills” could not be mentioned inadvertently in the table which was an error and had been noted and would be rectified in the amended bill.

    This would mean that the minimum tax applicable on flour Mills would remain at 0.25 per cent of the turnover instead of 1.25 per cent as being generally interpreted.

  • Rules for computation of profit and gains for SMEs

    Rules for computation of profit and gains for SMEs

    ISLAMABAD: Rules have been issued for computation of profit and gains of Small and Medium enterprises (SMEs). The SMEs shall be required to register with the Federal Board of Revenue (FBR) on its IRIS web portal.

    The SMEs are also given option to register with Small and Medium Enterprises Development Authority on its SME registration portal (SMERP).

    There shall be following two categories of small and medium enterprises and tax on their taxable income shall be computed at the tax rates given in the table below:

    Category – 1: Where annual business turnover does not exceed Rs100 million, the tax rate shall be 7.5 per cent of taxable income

    Category – 2: Where annual turnover exceeds Rs100 million but does not exceed Rs250 million, the tax rate shall be 15 per cent of taxable income

    The Finance Bill 2021 proposed definition of Small and Medium enterprises as:

    —a person who is engaged in manufacturing as defined in clause (iv) of sub-section (7) of section 153 of the Ordinance; and

    —his business turnover in a tax year does not exceed two hundred and fifty million rupees.

    Subject to a condition that if annual business turnover of a small and medium enterprise exceeds two hundred and fifty million rupees, it shall not qualify as small and medium enterprise in the tax year in which annual turnover exceeds that turnover or any subsequent tax year.

    The Bill proposes a new section read with Fourteenth Schedule which shall deal with the computation and payment of tax for small and medium enterprises (SMEs) for tax year 2021 and onward as per the procedure laid down.

    Option for final tax regime

    —The small and medium enterprises may opt for taxation under final tax regime at the rates given in the table below

    Category – 1: Where annual business turnover does not exceed Rs100 million, the rate of tax shall be 0.25 per cent of gross turnover

    Category – 2: Where annual business turnover exceeds Rs100 million but does not exceed Rs250 million

    —Option under this rule shall be exercised at the time of filing of return of income and option once exercised shall be irrevocable for three tax years. The provisions of section 177 and 214C shall not apply to SME who opts for taxation under Final Tax Regime.

    SMEs that opt for taxation under normal law may be selected for tax audit through risk based parametric computer ballot under section 214C of the Ordinance if its tax to turnover ratio is below tax rates specified in these rules.

    The cases selected under audit of this rule shall not exceed 5 per cent of the total population of SMEs whose tax to turnover ratio is below tax rates given in these rules.

  • FBR makes huge seizure of smartphones, drives at Islamabad Airport

    FBR makes huge seizure of smartphones, drives at Islamabad Airport

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday made a huge seizure of smartphones and drives worth Rs50 million at Islamabad International Airport.

    A FBR spokesman said that in line with the vision of Prime Minister and due focused approach against the menace of smuggling, FBR has seized 10 cartons and 06 bags lying unclaimed on a conveyer belt at Islamabad International Airport.

    The bags contained 25 Apple Macbooks, 235 Apple iPhones, 09 LG Thinq V50 smartphones, 200 SanDisk drives, 94 Lexar SSD drives, 217 SSD drives of difference brands, 40 Lexar SD RAMs, 20 Apples watches (Series 6), 30 Apple Air pods, 04 Apples iPad Pro (5th Generation), 12 Apple iPad (8th Generation), 10 Apple power adapters, 05 Apple USB Power adapters, 03 Apple HD TV devices,05 Honey Well dome cameras, 07 used cameras and other miscellaneous goods having market value of Rs.50 million.

    FBR will continue its counter smuggling drive to support local industry and to play its role in economic growth of the country.

  • Tax Maloomat captures assets, bank account details of 53 million citizens

    Tax Maloomat captures assets, bank account details of 53 million citizens

    ISLAMABAD: The Tax Maloomat (information) – a program launched by the Federal Board of Revenue (FBR) has captured details of 53 million citizens who have made transactions and withholding tax was deducted.

    An official report revealed that the FBR’s Maloomat (tax profiling system), that was launched on its web portal, had contained data of 53 million citizens, giving access to the filers and non-filers to the information about their assets and bank accounts.

    The report further said that FBR had utilized data obtained from DISCOs and gas companies:

    More than 650,000 notices have been issued on the basis of data obtained from DISCOs and in lieu of these notices 129,541 returns have been enforced so far, it added.

    In order to develop 360 degree view of tax payers, data sources like banks, vehicles and real estate transactions have been captured and a Data Bank has been developed. Based on this data bank, notices to more than 200,000 high net-worth un-registered persons have been issued.

    The report further said that number of income tax return filers for Tax Year 2020 has crossed 3.0 million.

    The FBR launched Tax Asaan – a mobile phone application – which provides for basic verification features like ATL, Online NTN/STRN inquiry, exemption certificates and sales tax registration.

    The FBR has embarked on a plan to integrate all sales outlets of tier-1 retailers with FBR’s central computerized system.

    The FBR successfully signed an agreement with traders. The market committees shall not only resolve contentious issues but also ensure registration of un-registered traders.

    The FBR has decided to implement Track and Trace System for specified goods/ products i.e. Tobacco, Cement, Sugar, Fertilizer and Beverages imported into or manufactured in Pakistan.

  • Retailers accepting debit, credit cards payment to be treated as Tier-I

    Retailers accepting debit, credit cards payment to be treated as Tier-I

    ISLAMABAD: The Federal Board of Revenue (FBR) will bring more retailers into sales tax ambit after the proposal made through Finance Bill, 2021 related to Tier-I retailers.

    Tier-I retailers are commonly known for having huge volume sales and operating in a mall, air conditioned environment etc.

    Sources in the FBR said that retailer receiving payment through debit card and debit card would also qualify for Tier-I retailers.

    KPMG Taseer Hadi & Co. Chartered Accountants in its commentary on Budget 2021/2022 stated that the Section 2(43A) of Sales Tax Act, 1990 provides threshold limit and qualification criteria for tier-1 retailers.

    The Finance Bill now proposes to enhance the qualification criteria of tier-1 retailers by following additions

    – Retailers of furniture whose shop measures two (2) thousand square feet or more.

    – Retailer operating an online market place supplying goods through e-commerce platform, whether the goods are owned by him or not.

    – A retailer who has acquired point of sale for accepting payment through debit or credit cards from banking companies or any other digital payment service provider authorized by State Bank of Pakistan.

    The Bill further proposes to do away with on incentive of the cash back, up to five percent of the tax involved, to customers of Tier-1 retailer who have integrated their retail outlets with the Board’s computerized system for real-time reporting of sales.

  • No withholding tax on cash withdrawal from July 01

    No withholding tax on cash withdrawal from July 01

    ISLAMABAD: Banks shall not collect/deduct withholding tax on cash withdrawal from July 01, 2021 subject to approval of the Finance Bill by the National Assembly.

    The Finance Bill 2021 proposed abolishing levy of withholding tax on cash withdrawals from banking system.

    The withholding tax on cash withdrawal was imposed through Finance Act, 2005 in order to bring persons having taxable income but out of tax net.

    Initially the withholding tax was imposed at withdrawal of Rs25,000 on all persons making such transaction at 0.5 percent. However, through Finance Act, 2012 this threshold was increased to Rs50,000.

    Later, the withholding tax rate was reduced for income tax return filer to 0.3 percent and for non-filer it was increased to 0.6 percent.

    Through Finance Supplementary (Second Amendment) Act, 2019 the withholding tax on return filer at the rate of 0.3 percent was abolished and non-filers were required to pay 0.6 percent on making cash withdrawal above Rs50,000 per day.

    Now through Finance Bill 2021 proposed to abolish the 0.6 percent withholding tax on persons not on the Active Taxpayers List (ATL) or non-filers.

    The changes proposed through Finance Bill 2021 will be applicable from July 01, 2021 subject to the approval from the National Assembly.