ISLAMABAD: The Federal Board of Revenue (FBR) has taken a significant step by extending the warehousing period for already in-bonded goods up to July 31, 2020.
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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.
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Taxpayers need to update profile to ensure active status
ISLAMABAD: Taxpayers are mandatorily required to update their profit in order to keep their name in the Active Taxpayers List (ATL), sources in Federal Board of Revenue (FBR) said.
Amendment has been made to Income Tax Ordinance, 2001 through Finance Act, 2020, which is approved by the National Assembly.
A new sub-section 2 has been included to Section 182A of the Ordinance, to make it mandatory for taxpayers to update their profile on the FBR’s online system in order to ensure their names are on the ATL.
The new sub-section is read as:
“(2) Where a person fails to furnish or update a taxpayer’s profile within due date or time specified in sub-section (3) of Section 114A or within the date as extended by the Board (FBR) under Section 214A, such person shall not be included in the active taxpayers’ list for the latest tax year ending prior to the aforesaid due date or extended date:
“Provided that without prejudice to any other liability under this ordinance, such person shall be included in the active taxpayers’ list upon filing the taxpayers’ profile after the due date or extended date, if the person pays surcharge at Rupees –
(a) twenty thousand in case of a company;
(b) ten thousand in case of an association of persons; and
(c) one thousand in case of an individual.”
Through the Finance Act, 2020 fine and penalty have also been prescribed:
Any person who is required to furnish or update a taxpayer’s profit but fails to furnish or update within the due date: such a person shall pay a penalty of Rs2500 for each day of default from the due date subject to a minimum penalty of Rs10,000.
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Period for filing withholding tax statement reduced
ISLAMABAD: Withholding agents are required to file statement of deduction and collection on quarterly basis instead bi-annual.
The change has been brought through Finance Act, 2020 by amending section 165 of the Income Tax Ordinance, 2001.
Sources in Federal Board of Revenue (FBR) said that the change was brought on the proposal of business community as submission of record bi-annual was creating difficulties.
The withholding statement was required to file on monthly basis. However, through Finance Supplementary (Second Amendment) Act, 2019 the relevant law was amendment and it was made on bi-annual basis.
And now it is again reduced to quarterly basis through Finance Act 2020.
The FBR sources said that the withholding statement is required to be submitted on:
(a) in respect of quarter ending on the 31st day of March, on or before the 20th day of April;
(b) in respect of quarter year ending on the 30th day of June, on or before the 20th day of July;
(c) in respect of quarter ending on the 30th day of September, on or before the 20th day of October; and
(d) in respect of quarter ending on or before the 31st day of December, on or before the 20th January.
The FBR sources said that the withholding agents would provide following details of persons whose tax were deducted along with the statement, which would include:
(a) the name, Computerized National Identity Card Number, National Tax Number and address of each person from whom tax has been collected under Division II of this Part or Chapter XII or the Tenth Schedule or to whom payments have been made from which tax has been deducted under Division III of this Part or Chapter XII or the Tenth Schedule in each quarter.
(b) the total amount of payments made to a person from which tax has been deducted under Division III of this Part or Chapter XII or the Tenth Schedule in each quarter.
(c) the total amount of tax collected from a person under Division II of this Part or Chapter XII or the Tenth Schedule or deducted from payments made to a person under Division III of this Part or Chapter XII or the Tenth Schedule in each quarter; and
(d) such other particulars as may be prescribed:
Provided that every person as provided in sub-section (1) shall be required to file withholding statement even where no withholding tax is collected or deducted during the period.
Explanation.— For the removal of doubt, it is clarified that this sub-section overrides all conflicting provisions contained in the Protection of Economic Reforms Act, 1992 (XII of 1992), the Banking Companies Ordinance, 1962 (LVII of 1962), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the regulations made under the State Bank of Pakistan Act, 1956 (XXXIII of 1956), if any, on the subject, in so far as divulgence of information under section 165 is concerned.
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FBR promotes 29 officials to post of assistant private secretary
ISLAMABAD: Federal Board of Revenue (FBR) has notified promotions of 29 steno-typists (BS-14) to the post of Assistant Private Secretary (BS-16).
In a notification issued on Friday (July 10) the FBR notified promotions of following officials:
01. Aurangzeb, RTO, Peshawar
02. Waseem Iqbal, RTO, Islamabad
03. Sulaiman Ahmed, RTO, Islamabad
04. Allah Ditta, RTO, Rawalpindi
05. Syed Shafqat Abbas, RTO, Gujranwala
06. Iftikhar Ahmad Naseer, RTO, Gujranwala
07. Syed Riaz Ahmad, RTO, Gujranwala
08. Muhammad Abbas, RTO, Gujranwala
09. Shabbir Ahmed, CRTO, Lahore
10. Muhammad Yousaf, CRTO, Lahore
11. Bashir Ahmed, RTO, Sargodha
12. Muhammad Feroz, RTO, Sargodha
13. Zia Rasool, RTO, Multan
14. Saeed Ahmad, RTO, Bahawalpur
15. Muhammad Ahmed, RTO, Bahawalpur
16. Nasir Ali Khan, RTO, Hyderabad
17. Muhammad Shafique, RTO, Hyderabad
18. Muhammad Abid, CRTO, Karachi
19. Syed Ghufran Ahmed, CRTO, Karachi
20. Zuhair Ahmed, CRTO, Karachi
21. Abdul Shakoor Awan, CRTO, Karachi
22. Shafiq ur Rehman, CRTO, Karachi
23. Ms. Shahla Riaz, CRTO, Karachi
24. Syed Riffat Farid Nizami, CRTO, Karachi
25. Munawar Ali, CRTO, Karachi
26. Anisur Rehman, CRTO, Karachi
27. Ms. Kausar Jehan, CRTO, Karachi
28. Hussain Ahmed, CRTO, Karachi
29. Syed Qamar ul Hassan, CRTO, Karachi
The FBR said that the promotion would take effect from the date of their joining, subject to the condition that no disciplinary proceedings are pending against them.
The FBR further said that the officials would be on probation for a period of one year, extendable for further period not exceeding one year, provided that if no order is issued by the day following the termination of probationary period, the appointment shall be deemed to be held until further orders.
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FBR empowered to recover income tax on sectoral benchmark basis
ISLAMABAD: The officials of Federal Board of Revenue (FBR) have been authorized to recover income tax on sectoral benchmark ratio basis where a taxpayer fails to provide record or required details.
The concept of sectoral benchmark ratios has been introduced through Finance Act 2020 for making recovery of unexplained income by taxpayers. In this regard an amendment has been made to Section 177 of Income Tax Ordinance, 2001.
A new subsection 2AA has been introduced to Section 177, under which, where a taxpayer
(a) has not furnished record or documents including books of accounts;
(b) has furnished incomplete record or books of accounts; or
(c) is unable to provide sufficient explanation regarding the defects in records, documents or books of accounts,
Is shall be construed that taxable income has not been correctly declared and the commissioner shall determine taxable income on the basis of sectoral benchmark ratios prescribed by the FBR.
An explanation has been added to sub-section, stating that the expression ‘sectoral benchmark ratios’ means standard business sector ratios notified by the board on the basis of comparative cases and includes financial ratios, production ratios, gross profit ratio, net profit ratio, recovery ratio, wastage ratio and such other ratios in respect of such sectors as may be prescribed.
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FBR issues draft rules for allowing reduced income tax rate on import of raw materials
ISLAMABAD: Federal Board of Revenue (FBR) has issued draft rules for grant of concessional tax rate on import of raw materials and capital goods by manufacturers and exporters.
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Fee for filing tax appeals increased substantially
ISLAMABAD: A substantial increase has been made to fee amount for filing appeal against an assessment order. The increase has been made part of statute through Finance Act, 2020.
Officials at Federal Board of Revenue (FBR) said that an amendment to sub-section 4 of the Section 127 of Income Tax Ordinance, 2001 has been made through Finance Act, 2020. Prior to this amendment the fee amount of Rs1,000 was prescribed for all taxpayers for filing appeal.
However, through the amendment the prescribed fee shall be Rs5,000 in case of company and Rs2,500 in case of other than a company.
The fee for filing appeal in other than assessment cases has also been increased. The fee in case of company has been increased to Rs5,000 from Rs1,000. In case of other than company the fee amount has been increased to Rs1,000 from Rs200.
Another amendment has been made to section 131 of the Income Tax Ordinance, 2001 regarding fee for filing appeal before appellate tribunal.
Prior to the amendment an amount of Rs2,000 was prescribed as fee for filing appeal. However, post amendment the prescribed fee shall be Rs5,000 in case of a company and Rs2,500 in case of other than a company.
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FBR to adopt new measures to achieve Rs4,963 billion collection target
ISLAMABAD: Federal Board of Revenue (FBR) has decided to take new enforcement and administrative measures to achieve revenue collection target of Rs4,963 billion assigned for current fiscal year.
The federal government in the latest budget assigned FBR to collect Rs4,963 billion during 2020/2021, which is 25 percent higher than the collection of Rs3,957 billion collected during 2019/2020.
In order to achieve the revenue collection target of current fiscal year the FBR chairman directed chief commissioners and chief collectors to submit their proposals and suggestions for taking new administrative and enforcement measures.
The FBR sought the proposals for increasing revenues and plugging loopholes.
All chief commissioners and chief collectors have been asked to furnish their proposals by July 15, 2020.
It is worth mentioning that the FBR was assigned Rs5,550 billion revenue collection target during fiscal year 2019/2020 however due to slow economic activities early in the fiscal year and adverse impact on economy due to coronavirus the revenue collection significantly declined.
Later considering the situation the FBR was assigned the reduced collection target of Rs3,907 billion, which was surpassed by more than Rs50 billion.
Despite the achievement of revenue collection target the FBR chairperson Ms. Nausheen Javaid Amjad was removed from the post and Muhammad Javaid Ghani was assigned additional charge of the post of FBR chairman.
Sources in the FBR said that the administrative and enforcement measures would only work when a regular chairman has been appointed.
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Assessment oversight committees formed to settle taxpayers’ cases
ISLAMABAD: Assessment oversight committees have been formed at all tax offices of Inland Revenue in order to settle the cases of taxpayers in expeditious manner, officials at Federal Board of Revenue (FBR) said.
The committees have been formed following amendment made to Income Tax Ordinance, 2001 through Finance Act, 2020, which was recently approved by the National Assembly.
The committee shall comprise the following tax authorities having jurisdiction over the taxpayer, namely:
(a) the Chief Commissioner Inland Revenue;
(b) the Commission Inland Revenue; and
(c) the Additional Commissioner Inland Revenue.
A new section 122D has been inserted to Income Tax Ordinance, 2001 for agreed assessment in certain cases.
Under this section where as taxpayer, in response to a notice under sub-section of Section 122, intends to settle his case, he may file offer of settlement in the prescribed form before the assessment oversight committee in addition to filing reply to the commissioner.
The committee after examining the offer may call for the record of the case and after affording opportunity of being heard to the taxpayer, may decide to accept or modify the offer of the taxpayer through consensus and communicate its decision to the taxpayer.
Where the taxpayer is satisfied with the decision of the committee:
(a) the taxpayer shall deposit the amount of tax payable including any amount of penalty and default surcharge as per decision of the committee;
(b) the commissioner shall amend assessment in accordance with the decision of the committee after tax payable including any amount of penalty and default surcharge as per decision of the committee has been paid;
(c) the taxpayer shall waive the right to prefer appeal against such amended assessment; and
(d) no further proceedings shall be undertaken under this ordinance in respect of issues decided by the committee unless the tax has not been deposited by the taxpayer.
According to the amendment, where the committee has been able to arrive at the cons or where the taxpayer is not satisfied with the decision of the committee, the case shall be referred back to the commissioner for decision on the basis of reply of the taxpayer in response to notice under section 122 notwithstanding proceedings or decision, if any, of the committee.
This section shall not apply in cases involving concealment of income or where interpretation of question of law is involved having effect on other cases.
Further, the FBR may make rules regulating the procedure of the committee and for any matter concerned with, or incidental to the proceedings of the committee.
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Finance Act 2020: wealth statement cannot be revised after five years
ISLAMABAD: A wealth statement cannot be revised after the expiry of five years from the date of filing of income tax return, officials at Federal Board of Revenue (FBR).
The amendment has been approved by the National Assembly by passing the Finance Act, 2020. The amendment has been introduced in sub-section 3 of Section 116 to Income Tax Ordinance, 2001.
The sources said that under Income Tax Ordinance, 2001 taxpayers had already been allowed to revise their wealth statement by providing reasons for the revision and before any notice issued by a tax office in this regard.
However, through amendment Commissioner Inland Revenue has been empowered to declare the revised wealth statement if he found any ill intention of the taxpayer.
According to the amendment: “Provided that where the commissioner is of the opinion that the revision under this sub-section is not for the purpose of correcting a bona fide omission or wrong statement, he may declare such revision as void through an order in writing after providing and opportunity of being heard.”
An explanation has also been included through amendment which said: “For the removal of doubt it is clarified that wealth statement cannot be revised after the expiry of five years from the due date of filing of return of income for the tax year.”
A taxpayer is required to file wealth statement under Section 116 along with annual income tax return by providing particulars included:
(a) the person’s total assets and liabilities as on the date or dates specified in such notice;
(b) the total assets and liabilities of the person’s spouse, minor children, and other dependents as on the date or dates specified in such notice;
(c) any assets transferred by the person to any other person during the period or periods specified in such notice and the consideration for the transfer;
(d) the total expenditures incurred by the person, and the person’s spouse, minor children, and other dependents during the period or periods specified in the notice and the details of such expenditures; and
(e) the reconciliation statement of wealth.