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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.

  • COVID levy on wealth of individuals, AOPs under consideration

    COVID levy on wealth of individuals, AOPs under consideration

    ISLAMABAD: In order to generate revenue in the wake of coronavirus pandemic the government is considering to impose COVID levy, which may be on the wealth of individuals and Association of Persons (AOPs), sources said.

    The sources said that the levy may be collected up to one percent of Rs100 million wealth declared by individuals / AOPs.

    The government may introduce this levy through Finance Bill, 2020.

    However, in case the income tax liability is more than the proposed levy then the chargeability of tax may under normal tax regime.

    Further, this levy may not be imposed on corporate entities.

    The COVID tax may be imposed as was introduced through Income Support Levy in 2013.

    The sources said that the revenue collection of the Federal Board of Revenue (FBR) was adversely affected due to coronaviurs. They said that in the present scenario the government was not intending to burden the taxpayers, especially business concerns, through introduction of new taxes.

    However, through this levy may be utilities for the support the efforts to combat against the pandemic.

    The sources said that the estimated amount to be generated through this levy was may be around Rs30 billion.

  • FBR starts payment of income tax refunds

    FBR starts payment of income tax refunds

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday started payment of income tax refunds directly to the bank accounts of those taxpayers who have provided their IBAN.

    FBR sources said that the FBR had received Rs10 billion from the finance division for the payment of income tax refunds. The FBR issued cumulative up to Rs5 million to a taxpayer.

    The FBR explained term cumulative as the total amount of refund in respect of a taxpayer (for the tax year 2014 to 2019) duly processed and sanctioned under the law.

    The release of income tax refunds is under Prime Minister’s relief package in order to reduce impact of the coronavirus on businesses.

    Under the prime minister package an amount of Rs100 billion has been allocated for the payment of claims under sales tax, income tax and duty drawback.

    FBR sources said that so far around Rs58 billion, including income tax refunds, had been disbursed to the claimants.

    The business community was not happy with the decision to put restriction on disbursement of income tax refunds.

    It is most unfortunate and disappointing to know that FBR has put ceiling of Rs. 5 million (cumulative of 5 years).

    This has closed the access to even those business entities which have cumulated tax refunds of even one rupee more than Rs. 5 million in 5 years from 2014-15 to 2018-19income tax refunds.

    Nisar said that the said ceiling instructions issued by FBR is discriminatory and strongly asked Finance Ministry to instruct for releasing of at least Rs. 5 million income tax refunds to all businessmen regardless of level of their income tax refunds accumulation in the last 5 years.

    He said that the apex body is of the view that Ministry of Finance should also consider to release half of the accumulated income tax refunds to help in economic revival exercise under taken by the government.

  • FBR decides opening IR offices on Saturdays as coronavirus spreads rapidly

    FBR decides opening IR offices on Saturdays as coronavirus spreads rapidly

    ISLAMABAD: Federal Board of Revenue (FBR) has decided to open its field offices on Saturdays to meet monthly target of Rs415 billion despite rapid spread of coronavirus, which already claimed lives of tax officials.

    The FBR on Thursday issued a notification directing all chief commissioners of Large Taxpayers Units (LTUs), Regional Tax Offices (RTOs) and Corporate RTOs to observe Saturdays as normal working hours till June 30, 2020.

    “In order to enhance the efforts to meet the assigned revenue target of Rs415.5 billion for the current month [June 2020], all field offices will remain open on the Saturdays with effect from June 06, 2020 till June 30, 2020,” the notification said.

    FBR sources said that at least three tax officials had died of coronavirus during the past two days. Islah ud Din, Assistant Commissioner, RTO Quetta died on coronavirus on June 04, 2020. While, two other officials of RTO Faisalabad also lost their lives due to the pandemic.

    The sources said that there were many cases in field offices some were tested positive and others were yet to gone through the test.

    It is also worth mentioning that during past 10-15 days the cases were rapidly increased in the country.

    First corona case was reported in Pakistan during February 2020 and then the Sindh province was the first to impose lockdown on March 23, 2020. This resulted in halt of business activities and subsequent affected the revenue collection efforts.

    The revenue collection in May 2020 registered 31 percent decline to Rs227 billion as the collection was Rs330 billion in same month last year.

    The FBR sources said that same collection position would prevail during June 2020 as most of the collection was to be received of May 2020. The entire month of May was also under lockdown besides long holidays for Eid-ul-Fitr.

    The FBR collected Rs518 billion in June 2019. If consider 31 percent decline in June as well the collection for June 2020 may be at Rs358 billion.

    The FBR collected Rs3,518 billion during July – May 2019/2020 as compared with Rs3,266 billion collected in the corresponding period of the last fiscal year, showing growth of 7.7 percent.

  • FBR officials treat taxpayers as criminal using search powers

    FBR officials treat taxpayers as criminal using search powers

    KARACHI: Business community has resented the use of powers related to search by Inland Revenue officers and treating registered taxpayers as criminal.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2020/2021 demanded amending such provisions to avoid such misuse of powers.

    The KCCI while highlighting provision Section 40 of Sales Tax Act, 1990, said that the officers of Inland Revenue at their discretion and opinion may obtain a warrant from the magistrate and conduct searches of the premises of registered persons at any time.

    The search made under sub-section (1) shall be carried out in accordance with the relevant provisions of the Code of Criminal Procedure, 1898 (V of 1898).

    The chamber said that the officials are treating registered persons as criminals.

    Powers to enter and search any place gives immense powers to officers of Inland Revenue. Such powers can be misused for harassment and extortion of tax payers.

    The law also does not define the “place” which can be search, therefore it may include homes and personal residences of tax payers.

    The chamber proposed that the provisions should be amended to prevent misuse.

    “No searches should be made without prior notice in writing to the registered person. No searches may be conducted outside the working hours and holidays or immediately prior to holidays.”

    The proposed amendment shall alleviate fears of the business persons and it will also encourage new tax-payers and curtail discretionary powers.

  • Proposed powers for reopening past 10 years tax cases rejected

    Proposed powers for reopening past 10 years tax cases rejected

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Wednesday said it will oppose any move to grant powers to tax officials regarding opening cases of past 10 years.

    (more…)
  • FBR recommended to reduce record retention period to three years

    FBR recommended to reduce record retention period to three years

    KARACHI: Federal Board of Revenue (FBR) has been recommended to reduce the time limit to past three years for retention of sales tax record.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2020/2021 submitted to the FBR, highlighted the issue of Section 24 of Sales Tax Act, 1990, which required retention of record and document for six years.

    The KCCI said that the long time period only allows the officers of Inland Revenue to blackmail and harass the tax payers by issuing demands from closed accounts as far back as 6 years.

    The negative impact of such provision is that the revenue officials spend more time in fishing for discrepancies in old records instead of focusing their efforts on broadening of tax base.

    The KCCI proposed that the period retention of record and documents be reduced to 3 years, which is an established practice worldwide for all financial transactions.

    Regional Tax Offices (RTOs) and officers will have to work more on identifying new tax-payers instead of fishing in old records and create demand.

    The period of 6 years is counter-productive for revenue generation and renders the RTOs inefficient.

    In this era of computerization where all the transactions of the registered persons are cross verified instantaneously by the FBR, and the audits are conducted without any delay, the period of maintenance of records and documents should be reduced from 6 to 3 years.

  • Notice can be sent to any person requiring declaration of assets of spouse, minor children

    Notice can be sent to any person requiring declaration of assets of spouse, minor children

    A Commissioner Inland Revenue of the Federal Board of Revenue (FBR) has been vested with substantial powers under the Income Tax Ordinance, 2001, to scrutinize the asset details of individuals, including those pertaining to their families, by issuing notice.

    (more…)
  • FBR allows repayment of customs duty on import of plastic raw material

    FBR allows repayment of customs duty on import of plastic raw material

    ISLAMABAD: Federal Board of Revenue (FBR) has allowed repayment of customs duty at Rs5.42 per kilogram on import of raw material for manufacturing of plastic goods meant for export.

    The FBR on Tuesday issued SRO 461(I)/2020 to amend SRO 212(I)/2009 to allow repayment of export duty on import of raw material.

    Through the instant SRO the FBR allowed duty drawback on import of 10 different raw material for the manufacturing of plastic goods at the rate of Rs5.42 per kilogram.

    The FBR allowed duty drawback on export of manufactured products from May 20, 2020. The FBR said that repayment of custom duty shall be paid on manufacturing of 100 percent goods including packaging materials used in the goods meant for export such as bottles, jars, vials, containers, droppers and the like.

    The conditions for the facility prescribed in the actual SRO is that:

    — the manufactured goods are exported out of Pakistan and an application for repayment of customs–duties is presented to the proper officer of Customs within two hundred and ten days of such exportation or within one hundred and eighty days from the date of realization of foreign exchange as shown on Bank Credit Advice issued in accordance with the current directive of the State Bank of

    Pakistan; and

    — the exporter makes a declaration on the goods declaration filed under section 131 of the Customs Act, 1969 (IV of 1969) and on other export documents for his claim for repayment of the customs–duties paid on the imported raw materials used in the production or manufacture of the goods being exported.

  • Above 120,000 income tax returns added to ATL during lockdown

    Above 120,000 income tax returns added to ATL during lockdown

    ISLAMABAD: The tax authorities have received above 120,000 income tax returns since launch of new Active Taxpayers List (ATL) on March 01, 2020 and during ongoing lockdown to prevent spread of coronavirus, according to updated list issued June 01, 2020.

    The updated ATL for tax, around 120,000 taxpayers filed their annual returns for tax year 2019 since March 01, 2020.

    The number of active taxpayers increased to over 2.65 million as of May 31, 2020 from 2.53 million returns as shown in new ATL for tax year 2019.

    The FBR updates ATL every week and on an average the revenue body receives around 20,000 returns per week. However, due to lockdown in the country after the outbreak of coronavirus the number of financial transactions had fallen drastically.

    It is worth mentioning that additional 120,000 income tax returns have been filed after the due date. The due date for filing income tax returns for tax year 2019 was February 28, 2020.

    As per law it was mandatory for individuals, Association of Persons (AOPs) and corporate entities to file annual return in order to avail reduced rates of withholding tax on certain transactions.

    Filing return after due date a person is required to pay surcharge in order to appear on ATL besides paying late filing penalty.

    The sources said changes in law through Finance Act, 2019 were also compelling to file their returns. Through Finance Act, 2019, Tenth Schedule was inserted to Income Tax Ordinance, 2001 under which a person not appearing on the ATL would be liable to pay 100 percent additional withholding tax while making certain transactions.

    Prior to this change the persons not filing income tax returns were liable to pay enhanced rate of withholding tax.

    Previously, the law provides for the concept of a non-filer and stipulates higher withholding rates for the same which were adjustable at the time of filing of income tax return.

    A senior FBR official said that such tax regime had created a misconception that a non-filer can go scot free by choosing not to file income tax return.

    The measure are meant to increase the number of filers, however over time the focus shifted to raising additional revenue only.

    The measure had not achieved the desired results as the regime did not provide for any legal framework to ensure filing of return by such non-filers, the official said.

    In order to remove the aforesaid misconception, the concept and the term of ‘non-filer’ was abolished from the statute, the official added.

  • LTU Karachi auditor awarded ‘removal from service’

    LTU Karachi auditor awarded ‘removal from service’

    ISLAMABAD: Federal Board of Revenue (FBR) has awarded major penalty of ‘removal from service’ on an auditor (BS-18) posted at Large Taxpayers Unit (LTU) Karachi for inefficiency and misconduct.

    A notification issued on Monday, the FBR said that disciplinary proceedings against Ghulam Fareed Pario, Assistant Director (Audit) (BS-18), Large Taxpayers Unit, Karachi were initiated under the Government Servants (Efficiency & Discipline), Rules 1973 on account of Inefficiency and Misconduct for his unauthorized absence from duty.

    The unauthorized absence from duty was borne out of record, the Authorized Officer i.e. Member (Admn) issued a direct Show Cause Notice to the accused.

    The accused officer submitted reply to the show cause notice on September 03, 2019 through email and courier.

    After having examined the relevant record and written defence, the authorized Officer concluded that willful absence from duty of Ghulam Fareed Pario, Assistant Director (Audit) (BS-18) LTU Karachi w.e.f.16.05.2019 stood established and recommended to the Authority for imposition of major penalty of “Dismissal from Service”.

    The Secretary Revenue Division, being the Authority in this case, provided opportunity of personal hearing to the accused on 18.10.2019 which also remained unavailed.

    Now therefore, Secretary Revenue Division, being authority in this case, after having considered all aspects of the case and imposed major penalty of “Removal from Service” upon Ghulam Fareed Pario.