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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.

  • Duty drawback payment to be made on FIFO basis

    Duty drawback payment to be made on FIFO basis

    ISLAMABAD: Federal Board of Revenue (FBR) has said that payment of duty drawback will be paid on First-in First-out (FIFO) basis taking into account the date of filing of claim.

    The FBR on Thursday issued SRO 714(I)/2020 to issue rules for processing duty drawback claims.

    The FBR said that comprehensive audit of duty drawback payments would be carried out by the Directorate General of Post Clearance Audit 9pcA) of the FBR.

    Any recovery detected by the PCA may be deducted from the next duty drawback claim of the exporter besides initiating recovery proceedings under the recovery rules.

    According to the rules a consolidated discrepancy report would be sent by the Collectorate to State Bank of Pakistan (SBP) on monthly basis. “The SBP shall also send a scroll of all the duty drawback payments made to the exporters,” the FBR added.

    For calculation amount of customs duties paid at the time of import, past six months import data may be used taking the average quantity or value of each class or description of the materials, including packing materials, from which a particular class or description of goods is ordinarily produced or manufactured. Average exchange rates of the same period may be taken into consideration.

    The average amount of customs duties paid on imported materials used in the manufacture of components, intermediate of semi-finished products which are exported as such or further used for manufacture of goods shall be taken into account for the purpose of calculation of duty drawback.

    The average amount of customs duties paid at the effective rate on the imported input materials shall be calculated for the last six months import data.

    The average freight on board (FOB) value of each class or description of the goods exported during the last six months may be taken into consideration for the class or description of goods for which export drawback rates are being determined.

    The FBR said that the duty drawback as may be admissible shall be part of the process of assessment of cargo for export and the amount so admissible to the exporter shall be computed and processed by Customs Computerized System on sale proceeds amount repatriated into the country and Form-E settlement from the commercial bank.

  • New mechanism of case settlement introduced for taxpayers facilitation: FBR

    New mechanism of case settlement introduced for taxpayers facilitation: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday said that a new mechanism of settlement of cases has been introduced to facilitate taxpayers. The FBR said that before Finance Act, 2020, a taxpayer aggrieved with an assessment order could file an appeal before the appellate authority and the same time could also avail alternate dispute resolution mechanism.

    (more…)
  • Tax incentive package: over 4,800 projects of construction industry to get registration

    Tax incentive package: over 4,800 projects of construction industry to get registration

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday said that it had received overwhelming response to construction industry package and over 4,800 projects have prepared drafts to get registration in the IRIS system.

    (more…)
  • Withholding tax rates on registration, transfer of motor vehicles updated

    Withholding tax rates on registration, transfer of motor vehicles updated

    ISLAMABAD: Federal Board of Revenue (FBR) has updated withholding tax rates on registration and transfer of motor vehicles for tax year 2021.

    The FBR updated the withholding tax card 2020-2021 (up to June 30, 2020) incorporating amendments made to Income Tax Ordinance, 2001 through Finance Act, 2020.

    The withholding tax rate under Section 231B on private motor vehicles

    Under this section motor vehicle registration authority shall collection withholding tax from persons getting new locally manufactured motor at the time of vehicle transferred in their name at the time of registration of new motor vehicle.

    The withheld tax shall be adjustable against liability.

    The tax rate shall be increased by 100 percent for persons not appearing on the Active Taxpayers List (ATL).

    The withholding tax rates under this section shall be:

    Engine CapacityFor ATLFor Non-ATL
    Up to 850CCRs7,500Rs15,000
    851CC to 1000CCRs15,000Rs30,000
    1001CC to 1300CCRs25,000Rs50,000
    1301CC to 1600CCRs50,000Rs100,000
    1601CC to 1800CCRs75,000Rs150,000
    1801CC to 2000CCRs100,000Rs200,000
    2001CC to 2500CCRs150,000Rs300,000
    2501CC to 3000CCRs200,000Rs400,000
    Above 3000CCRs250,000Rs500,000

    Withholding tax under Section 231B(1A)

    Every leasing company, scheduled bank, investment bank development finance institution, non-banking finance institution, MODARBA (Sharia compliant or under conventional mode) shall collect withholding tax from lessee at the time of lease.

    The withheld tax shall be adjustable.

    The tax rate shall be 4 percent of the value of motor vehicle on leasing of motor vehicle to persons not appearing in the Active Payers’ List.

    The withholding tax rates under Section 231B (2)

    Motor Vehicle Registration Authority shall collect withholding tax from person transferring the ownership / registration at the time of transfer.

    The withheld tax shall be adjustable against the liability.

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

    Engine CapacityFor ATLFor Non-ATL
    Up to 850CCRs0Rs0
    851CC to 1000CCRs5,000Rs10,000
    1001CC to 1300CCRs7,500Rs15,000
    1301CC to 1600CCRs12,500Rs25,000
    1601CC to 1800CCRs18,750Rs37,500
    1801CC to 2000CCRs25,000Rs50,000
    2001CC to 2500CCRs37,500Rs75,000
    2501CC to 3000CCRs50,000Rs100,000
    Above 3000CCRs62,500Rs125,000

    The withholding tax rates under Section 231B (3)

    Manufacturer of motor vehicle shall collect withholding tax from purchaser at the time of sale of vehicle.

    The withheld tax shall be adjustable against tax liability.

    The withholding tax rates under Division VII, Part IV of First Schedule of the Income Tax Ordinance, 2001 are as follow:

    Engine CapacityFor ATLFor Non-ATL
    Up to 850CCRs7,500Rs15,000
    851CC to 1000CCRs15,000Rs30,000
    1001CC to 1300CCRs25,000Rs50,000
    1301CC to 1600CCRs50,000Rs100,000
    1601CC to 1800CCRs75,000Rs150,000
    1801CC to 2000CCRs100,000Rs200,000
    2001CC to 2500CCRs150,000Rs300,000
    2501CC to 3000CCRs200,000Rs400,000
    Above 3000CCRs250,000Rs500,000
  • FBR notifies rules to implement new tax regime for imported goods

    FBR notifies rules to implement new tax regime for imported goods

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday notified rules to implement new taxation regime on import of goods, which was introduced through Twelfth Schedule of Income Tax Ordinance, 2001.

    The FBR issued SRO 715(I)/2020 to notify the rules for implementation of new tax rates on import of goods.

    Through Finance Act, 2020 new 12th Schedule was introduced for rationalizing tax on imports by shifting from person-specific rates to goods specific rates cascaded according to  the  type of  goods,  with  tax  at 1 percent  for  capital  goods,  2 percent  for  raw  materials  and 5.5 percent  for  finished  goods  irrespective  of  status  of  the  importer.

    However,  the prevailing  concessional  rates  on  certain  items  such  as  remeltable  scrap  of  iron and  steel,  potassic  and  urea  fertilizers,  LNG,  Gold,  Cotton,  goods  that  were importable  by  manufacturers  under  the  rescinded  SRO  1125(I)/2011  dated 31.12.2011, mobile phones etc. are being maintained.

    The provisions of the new rules introduced to Income Tax Rules, 2002 will apply to addition, omission or amendment of entries in the Twelfth Schedule and application of reduced rate on goods falling under Part III of the schedule imported by persons as raw material for its own use.

    A three-member committee headed by Member Inland Revenue Policy, FBR has been constituted under the new rules. The other two members shall comprise of Member Inland Revenue Operations and Member Taxpayers Audit.

    The committee has been empowered to add in the Twelfth Schedule of the Ordinance any entry or omit any entry therefrom or amend any entry therein.

    Further, the chairperson of the committee may, suo motor or an application of a taxpayer being an importer of such goods, place a matter before the committee by way of convening a meeting including a virtual meeting or by way of circulation which shall decide the matter within sixty days.

    The FBR also issued procedure for import under an exemption certificate and a reduced rate certificate.

  • Withholding sales tax regime streamlined

    Withholding sales tax regime streamlined

    ISLAMABAD: Federal Board of Revenue (FBR) has streamlined sales tax withholding regime for compelling sales tax return filing and realizing full revenue on sale/purchase.

    The FBR issued Circular No. 01 dated August 06, 2020 to explain changes made to Sales Tax Act, 1990 through Finance Act, 2020.

    The FBR said that Eleventh Schedule provides for withholding agents to deduct tax at the time of purchase from both registered and unregistered persons.

    The categories of withholding agents include Federal and Provincial Government departments, companies, public sector organizations and autonomous bodies.

    However, it has been noticed that most of the registered suppliers whose tax has been withheld do not usually file their sales tax returns and resultantly, fail to pay their remaining amount of 4/5th tax in case 1/5th of the tax involved is withheld by the purchaser as aforementioned.

    To enforce returns by the such suppliers and payment of remaining tax involved, the whole concept of withholding has now been linked to the supplier (withholdee) being on the ATL list of the FBR or otherwise.

    The persons other than Active Taxpayers shall be given the same treatment as was previously accorded to unregistered persons i.e. government and public sector enterprises shall deduct whole of the tax involved in case of supplies made by persons other than those on ATL and the companies shall deduct 5 percent of gross value of supplies on supplies by such persons. This aims at promoting return filing and documentation culture in the country.

  • FBR admits Rs232 billion payable as income, sales tax refunds

    FBR admits Rs232 billion payable as income, sales tax refunds

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday admitted to pay an amount around Rs232 billion as sales tax and income tax refunds to taxpayers.

    The FBR disclosed the amount of payable refunds at a meeting that was chaired by Dr. Abdul Hafeez Shaikh, Adviser to the Prime Minister on Finance and Revenue.

    Muhammad Hammad Azhar, Federal Minister of Industries and Production, Muhammad Azam Khan Swati, Minister of Parliamentary Affairs, Abdul Razak Dawood, Adviser for Commerce, Textile and Investment, Naveed Kamran Baloch,  Faizullah Kamoka, Secretary Finance and Chairman FBR Muhammad Javed Ghani were also present in the meeting.

    Dr. Muhammad Ashfaq Ahmed, Member (IR-Operaions), FBR made a presentation on the issue of refunds.

    “The meeting was informed that a total of Rs142 billion of Sales Tax refunds were pending and Rs90 billion of Income Tax refunds were due for payment.”

    The Member also informed the Ministers that export sector had been prioritized and an unprecedented amount of Rs.106 billion had been released to them. It was also explained that during 2020, fresh inflows and refund claims had matched the outflows and a total amount of refund released under the head Sales Tax was Rs.154 billion.

     In order to further facilitate the business community and to resolve their day to day issues on priority, it was advised that a technical committee having representatives of the business community be formed to examine and resolve faster refund related issues. It was also decided that there will be facilitation committees at field office level so that businessmen are able to have their issues resolved at local level.

    It was also decided that a complaint cell be constituted where businessmen lodge their complaints and the complaint cell may pursue the complaints for resolution.

    FBR was also advised to increase its public outreach and hold frequent meetings / media conferences and video conferences with trade associations to hear their viewpoint and issues relating to tax matters.

    It was noted that withholding tax regime increased the cost of doing business and FBR was advised to examine reducing the regime in the coming budget.

    Similarly the legal provisions relating to capping input tax adjustment at 90percent of payable tax in terms of section 8B of the Sales Tax Act were also proposed to be examined in the forthcoming budget exercise.

    Discussing the tax refunds, FBR was advised to focus on pending refunds of both export and non-export sector to give a business stimulus and easy cash flows in the post Covid scenario.

    Further enhancing the stimulus package, FBR was advised to pay Income Tax refunds up to Rs50 million each within one week for which FBR will be provided funds by the Finance Division.

    In order to ensure steady disbursement of refunds, it was also proposed that FBR may examine creating a refund fund from where Income Tax refunds relating to previous years may be paid in routine without hurting collection till the time all the pending refunds are liquidated.

    In juxtaposition to speedy regular disbursal of refunds with faster running in automated mode the importance of post refund audit to counter menace of flying invoices was proposed.

    FBR’s efforts on zero tolerance against corruption were appreciated and FBR was advised to highlight its good initiates including fight against corruption on media as well as on its websites.

  • FBR gets PM’s nod for action against senior officers

    FBR gets PM’s nod for action against senior officers

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday said that it has initiated action against two senior officers for involvement in irregularity and corruption after taking approval from the Prime Minister.

    In a statement the tax authority said that it had decided to take action against irregularity, corruption and inefficient elements present in the organization.

    Since July, so far 26 officers and 19 officials have been suspended whereas three employees have been dismissed from service.

    “Besides, permission has also been sought from the Prime Minister to initiate action against two senior officers.”

    Those suspended included employees of Model Customs Collectorate Quetta, Peshawar, Hyderabad, Gwadar, Karachi, Directorate of Transit Trade Peshawar and Directorate of Intelligence and Investigation IR Hyderabad whereas the dismissed employees were posted in Regional Tax Office, Faisalabad.

    FBR is determined to rid the organization of corrupt and inefficient elements. Prompt action will be taken against the officers and officials found involved in irregularity and inefficiency. The image of the organization will be raised and the perception of the taxpayers and people about the organization will be improved so that the taxpayers’ can pay their due taxes in time without any hesitation and suspicion thinking that their paid taxed would be utilized on the progress of the country and welfare of the people.

    An Integrity and Performance Management Unit (IPMU) has been established in FBR to address the complaints of the taxpayers against any employee.

    The complainant can send his complaint through telephone, e-mail and letter which will be scrutinized and investigated by senior officers.

    FBR will continue to put its efforts to raise revenue for the Government and will strive to achieve the objectives of the organization at all costs.

  • IRS bureaucracy shaken

    IRS bureaucracy shaken

    ISLAMABAD: Federal Board of Revenue (FBR) has shaken the Inland Revenue bureaucracy and around 97 senior officials were transferred, sources said on Monday.

    According to the sources around 83 officers of BS-20 out of the total 97 were part of this major reshuffle.

    The sources said that BS-20 is the key post and usually this official grade had portfolio of Commissioner Inland Revenue.

    The FBR so far issued four notifications i.e. one on August 08, 2020 and three more on August 10, 2020 to make changes in the IR bureaucracy.

    The sources said that usually when a new chairman assume the charge the posting transfers were normal.

    It is important to note that Ms. Nausheen Javaid Amjad, a BS-22 officer of IRS was removed from the post of FBR Chairperson on July 04, 2020 after severing only four months on this key post.

    Muhamamad Javed Ghani, BS-22 officer of Pakistan Customs Service (PCS) has been given additional charge of FBR chairman for a period of three months on July 07, 2020.

    It is surprising to see a large number of posting and transfers in Inland Revenue Service (IRS) especially for the key posts of BS-20 when the FBR has not full-time chairman.

    Following are the postings and transfers orders issued by the FBR.

    01. 1406-IR-I/2020 dated August 08, 2020

    02. 1408-IR-I/2020 dated August 10, 2020

    03. 1410-IR-I/2020 dated August 10, 2020

    04. 1420-IR-I/2020 dated August 10, 2020

  • Non-ATL to pay 0.6pc withholding tax on cash withdrawal

    Non-ATL to pay 0.6pc withholding tax on cash withdrawal

    ISLAMABAD: Federal Board of Revenue (FBR) has said that 0.6 percent withholding tax shall be collected on cash withdrawal of Rs50,000 each day by persons not on the Active Taxpayers List (ATL).

    The FBR updated withholding tax card 2020-2021 after incorporating amendments to Income Tax Ordinance, 2001 made through Finance Act, 2020. The FBR issued the withholding tax card updated up to June 30, 2020.

    The withholding tax rates on cash withdrawal from banking companies shall remain same for tax year 2021 (2020-2021).

    According to the withholding tax card every banking company shall collect/deduct withholding tax from account holders withdrawing cash. The tax shall be deducted at the time the cash is withdrawn.

    The withholding tax on cash withdrawal was introduced in year 2005 by inserting Section 231A to the Income Tax Ordinance, 2001.

    Under this section the banks are required to collect 0.6 percent of cash withdrawn above Rs50,000 per day.

    It has been clarified by the FBR that the said Rs50,000 shall be aggregate withdrawals from all the bank accounts in a single day.

    There were two different tax rates for filers and non-filers of income tax returns were applicable on the cash withdrawn from banking system.

    However, in order to ease burden on the compliant tax payers through Finance Act, 2019 the amendments were made and the tax rate is now only those persons who are not on the ATL.