Pkrevenue.com

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 starts digital scrutiny of taxpayers’ information

    FBR starts digital scrutiny of taxpayers’ information

    ISLAMABAD: The Federal Board of Revenue (FBR) has established Tax Information Processing Unit (TIPU) for utilization of information available at multiple databases of the tax authorities.

    According to an office order issued on Monday, the FBR had embarked an ambitious plan for enhancing revenues, through efficient utilization power of IT for overall system improvement.

    “There is an emerging need for transforming existing raw data, available in multiple databases of the FBR, into meaningful insights, through which actionable steps may be suggested to field formation with regard to untapped revenue potential and potential leakages,” the FBR said.

    To realize the true potential of IT system, developed over years, it is imperative to engage a cross-functional team of professionals, available in FBR, who may perform following tasks, before generating meaningful insights from the datasets available in its IT systems: data mining; statistical analysis; data analytics; and MIS Reporting.

    The insights gained through data analysis may potentially generate actionable data which IR Operations Wing may convey to field offices, so that untapped revenue potential may be realized and potential leakages may be checked.

    The FBR said that in view of foregoing a cross functional TIPU had been established in IR Operations Wing, FBR manned by FBR’s regular workforce and temporary hiring of IT-experts, on need basis.

    The following officers are designated as domain team of the TIPU, under the supervision of Member IR Operatoins:

    a. Tariq Hussain Shaikh, Chief (IR&I)-Coordinator

    b. Ms. Rezwana Siddiqui, Chief (IR-Analysis)

    c. Zulfiqar Ali Gopang (S.S. IT)

    d. Naveed Afgan (Dy. Dir/Secy MIS)

    e. Syed Asif Jamil (AD/S.S

    f. Imran Ullah (AD-Audit)

    The FBR said that the TIPU would be operated IT experts, who would be hired on market-based salaries. The IT experts would design and develop IT modules, for data analytics.

  • Bilingual one-page income tax return form advised

    Bilingual one-page income tax return form advised

    KARACHI: Federal Board of Revenue (FBR) has been advised to make one-page simple income tax return form and that should be available in Urdu and English to facilitate taxpayers.

    In its proposals for budget 2020/2021, the Karachi Chamber of Commerce and Industry (KCCI) said that every year changes are made in income tax form and ironically, it becomes more confusing and difficult for the tax-payers to fill.

    It is particularly cumbersome for the Small and Medium Enterprises (SMEs) including individuals and Association of Persons (AOPs).

    The KCCI said that taxpayers have to seek assistance from consultants and pay large amount of fee only to comply with the requirements of tax return.

    Due to the changes every year, tax-payers have to wait for the new form to be issued by the FBR which takes a month or two after the new budget is approved.

    “The complicated form only helps the business of consultants and tax practitioners at the expense of compliant taxpayers,” the KCCI said.

    It is one of the reasons that many individuals prefer to stay out of tax regime and a deterrent to broadening of tax base.

    The Karachi Chamber proposed that separate income tax return forms for companies, AOPs, individuals and salaried class should be created.

    Forms for SMEs and individuals and retailers should be a simple one page form both in English and Urdu.

    Manual completion and filing should be allowed for individuals and SMEs in order to encourage documentation.

    Extreme penalties and charges should be avoided in case of late filing.

    Errors/short payment should be notified to registered person within two months of filing and correction of errors should be allowed to tax-filer for up to 3 months of filing without requirement of commissioner’s approval.

    The chamber said that incorporation of proposal will help in simplification of filing procedures and documentation. Besides it will also help in broadening of tax base and increase in number of filers.

    Further, it will save unnecessary expenses on fees of consultants and tax practitioners. It will eliminate corruption and harassment.

  • All income tax audit selections should bring under one provision

    All income tax audit selections should bring under one provision

    KARACHI: Federal Board of Revenue (FBR) has been urged to eliminate audit selection under various provisions of Income Tax Ordinance, 2001 for the confidence building of taxpayers.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2020/2021 submitted to the FBR, said that presently audit proceedings can be started u/s 177 as well as through balloting u/s 214C and like-wise enquiries can also be made by the Commissioner u/s 122(5A).

    There is a concept of a special audit panel u/s 177(11) as well.

    Sub-Section 7 is ambiguous and provides the Commissioner and his sub ordinates with a tool to harass, extort and victimize any taxpayer at will.

    The Commissioner can reopen the audit of any person or firm at will on unsubstantiated grounds.

    Under sub-Section 4 of Section 177, any person employed by a firm to conduct audit function may be authorized by the Commissioner to exercise powers under sections 175 and section 176.

    The chamber said that the revenue collection through such recovery proceedings is hardly Rs.92 billion whereas the costs due to litigation, involvement of entire tax collection machinery and declining number of tax filers, is far more than the collection.

    Multiple Audits under various provisions have eroded the trust of tax-payers in the FBR. RTOs and LTUs. Audit functions under various provisions have created confusion and complexity in tax regime.

    Such provisions are also prone to misuse and a source of harassment.

    The KCCI proposed that all Audit functions should be brought under one provision of Income Tax Ordinance rather than various over-lapping provisions with clear and well defined parameters.

    Audit Parameters should be transparent and open to taxpayers.

    Further, Sub-Section 7 may be deleted.

    Powers of the Commissioner and sub-ordinate officials should be curtailed to restore the trust of taxpayers and encourage broadening of tax-base.

    Such Audits should be restricted to specific queries or objections and call for relevant document only rather than opening and re-opening a comprehensive audit every time.

    The chamber said that it will bring transparency and clarity to Audit functions and rules governing the same.

    Prevent harassment to tax payers and abuse of powers by Inland Revenue officials. Broaden tax base by restoring confidence in the system.

  • FBR records 31 percent decline in May collection

    FBR records 31 percent decline in May collection

    ISLAMABAD: Federal Board of Revenue (FBR) has recorded 31 percent decline in revenue collection during May 2020 owing to halt in economic activities after lockdown imposition.

    According to provisional figures released by the FBR on Sunday, the tax authorities collected Rs227 billion in May 2020 as compared with Rs330.1 billion collected in the same month of the last fiscal year.

    The massive fall in revenue collection has been attributed to halt in business activities due to lockdown which was imposed to stop spread the coronavirus.

    FBR spokesman in a statement said that despite lockdown in the country the revenue body collected Rs3,518 billion during July – May 2019/2020 as compared with Rs3,266 billion in the corresponding period of the last fiscal year.

    The revenue collection for the current fiscal year has been reduced to Rs3,908 billion from actual target of Rs5,500 billion initially set for the current fiscal year.

    The spokesman said that the FBR so far collected around 90 percent of the assigned target of Rs3,908 billion.

  • FBR discontinues manual payment of income tax refunds

    FBR discontinues manual payment of income tax refunds

    ISLAMABAD: Federal Board of Revenue (FBR) has discontinued manual issuance of income tax refunds with immediate effect to ensure transparency.

    The release of income tax refunds will be carried out electronically, said an office order of the FBR dated May 29, 2020.

    The FBR is going to disburse income tax refunds directly to bank accounts of claimants. In this regard, the finance ministry released an amount of Rs10 billion for payment of income tax refunds, official sources said on Saturday.

    The finance ministry initially provided the fund of Rs10 billion to the FBR for sanctioning of income tax refunds to taxpayers.

    The FBR decided to liquidate amount of Rs5 million claims out of the fund. Pending income tax refunds already prepared and kept in draft mode in Iris by the relevant officers where the amount of Rs5 million (cumulatively) has to be liquidated at this stage.

    The FBR further explained that cumulatively means 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 FBR further directed the chief commissioners that bank-wise (with IBAN numbers) taxpayers-wise lists of cases ripe for the sanctioning of income tax refunds up to Rs5 million should be dispatched by May 31, 2020.

    The FBR said that since the entire process of refund issuance under Prime Minister’s COVID-19 Package had to be carried out electronically, by disbursal of refunds through the AGPR, therefore, no manual issuance of income tax refunds is allowed till further orders.

  • FBR recommended CNIC condition on sale of above 10 tola gold

    FBR recommended CNIC condition on sale of above 10 tola gold

    KARACHI: Federal Board of Revenue (FBR) has been urged to fix the condition of Computerized National Identity Card (CNIC) on purchase of around 10 Tola or above of gold.

    Karachi Chamber of Commerce and Industry (KCCI) in proposals for budget 2020/2021 submitted to FBR, said that during last two years, prices of gold has sharply increased and the amount of Rs.50,000 is quite irrational and unfair due to high value of precious metal.

    Only 7 grams gold jeweler will cost more than Rs.50,000, the KCCI said.

    Highlighting the impact, the KCCI said that the customers will deal directly with unorganized sector / workshops

    – Mostly undocumented jewelers benefit from requirement of CNIC for purchases above Rs.50000/-

    – Will encourage under reporting of transactions

    – Will result in loss of taxes to government

    The chamber therefore proposed that the issue may been seen realistically and condition of NIC be imposed on purchase of 10 tolas or more.

    It will boost official business activities and will also generate and promote economic activities besides generating revenue for the government as well.

  • FBR advised to withdraw powers of freezing bank accounts for tax recovery

    FBR advised to withdraw powers of freezing bank accounts for tax recovery

    KARACHI: Federal Board of Revenue (FBR) has been advised to withdraw powers of tax officials related to freezing bank accounts for tax recovery.

    Karachi Chamber of Commerce and Industry (KCCI) in its budget proposals for 2020/2021 submitted to the FBR highlighted provisions of Income Tax Ordinance, 2001 regarding accessing bank accounts for tax recovery.

    Under Section 140 of the Income Tax Ordinance, 2001 which deals with recovery of tax from persons holding money on behalf of a taxpayer.

    — (1) For the purpose of recovering any tax due by a taxpayer, the Commissioner may, by notice, in writing, require any person –

    (a) owing or who may owe money to the taxpayer; or

    (b) holding or who may hold money for, or on account of the taxpayer.

    This provision and further access to information on a bank accounts under other provisions of law, have been counterproductive and led to a flourishing cash economy, the KCCI said.

    It said that there were many innovative ways been evolved by businesses similar to the blockchain and local hundi system.

    Such provisions only affect the registered businesses while the entire unregistered sector is immune from such laws and a coercive approach.

    Banks are also suffering with decline in deposits and transactions which used to be conducted through the system. It is evident from a slowdown in economic activities, the chamber said.

    It is better to do way with such anti-growth and anti-business policies and laws. Powers to access the bank accounts of registered persons and to freeze account should be withdrawn through Finance Bill 2020.

    Access may only be limited to accounts of unregistered persons, but account may not be blocked or frozen.

    Commissioner should only be authorized to obtain information about the funds in accounts and should be authorized to seek clarification as to the nature of transactions and sources of funds. Such persons may be brought into the tax-net.

    The Karachi Chamber said that the proposed amendments would provide relief to the registered persons and restore confidence in banking system and would encourage official transactions.

    Besides, it would help in bringing unregistered persons into the tax-regime.

    Stimulate economic activities and growth. Increase bank deposits which may be used for lending to industry.

  • FBR suggested to abolish further sales tax on fulfilling CNIC condition

    FBR suggested to abolish further sales tax on fulfilling CNIC condition

    KARACHI: Federal Board of Revenue (FBR) has been proposed to abolish further sales tax in case taxpayers fulfil condition of Computerized National Identity Card (CNIC).

    (more…)
  • Mandatory training courses for promotions to be completed through tele-teaching

    Mandatory training courses for promotions to be completed through tele-teaching

    ISLAMABAD: The mandatory training courses for promotion of government officers including from Federal Board of Revenue (FBR) will be held online considering COVID-19 pandemic, a notification said.

    In this regard National School of Public Policy (NSPP) informed that all the courses of NSPP i.e. 112th National Management Course (NMC), 27th Senior Management Courses (SMC) and 29th Mid-Career Management Course (NCMC) have been redesigned keeping in view the prevailing health emergency on account of of COVID-19.

    “Remaining training activities will be completed through remote tele-teaching mode by using Zoom/Skype and e-portal of respective courses,” it said.

    “These essentially comprise of Simulation Exercise, Case Studies, Analysis Papers, Topical Discussions and Research Papers particularly related to the foreign study tour of the respective country assigned to different participants of NMC.”

    The notification said that the courses had been rescheduled by reducing the duration of three weeks of NMC, five weeks of SMC and three weeks of MCMC respectively subject to the slight modifications by the respective NIMs made keeping in view the activities completed before the suspension of the courses.

    The participants have been asked to join the 112th NMC, 27th SMC and 29th MCMC respectively with effect from June 01, 2020 through e-portal of the respective unit.

  • Massive increase in penalty amount on the cards for violating tax laws

    Massive increase in penalty amount on the cards for violating tax laws

    Tax authorities are considering a significant increase in monetary penalties for violations of general provisions of income tax laws. According to sources within the Federal Board of Revenue (FBR), the Large Taxpayers Unit (LTU) Karachi has submitted proposals for the budget 2020/2021, suggesting an increase in fines and penalties from the current Rs5,000 to Rs50,000.

    (more…)