The Federal Board of Revenue (FBR) has introduced a significant policy shift through the Finance Bill 2020, proposing the automated scrutiny of all income tax returns, which may signal the end of the Universal Self-Assessment Scheme (USAS) in Pakistan.
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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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KTBA advises FBR to suspend notices amid alarming rise in COVID cases
KARACHI: Karachi Tax Bar Association (KTBA) has advised Federal Board of Revenue (FBR) to suspend notices for various tax matters with immediate effect considering the alarming increase in cases of COVID-19 in the country.
The KTBA in a letter to FBR chairperson sent on Friday, informed that the bar members were receiving notices issued by the tax officials right in the month of June when the COVID-19 pandemic was in its worst phase in the country, and the city of Karachi is passing through its hardest times.
The grim situation at hand, in terms of helplessness and number of deaths of both taxpayers and the tax officers, cannot possibly be remained devoid of any mindful sight.
It is rather what today has the fullest attention of everyone concerned and the FBR as the tax regulator cannot simply be an exception. It cannot keep shooting notices mindlessly to the taxpayers for tax compliance when the taxpayers or their counselors cannot even reach their offices these days. The Bar equally feels compassionately about officers. “You must be aware of the deaths of tax officials posted at LTU, Karachi and at Regional Tax Office, Karachi due to Coronavirus.”
Around 160,000 coronavirus positive cases have been registered in the country out of which, almost 55,000 are in Sindh. Among the cities of Sindh, Karachi is at the top with 45,000 plus cases.
Keeping the above in view, the number of notices being issued these days is beyond ones comprehension. The members, like other service providers (shops, markets and manufacturing units are an exception), are largely not operating from their offices and are working from home, which has its own limitations. As such, in these testing times, it is not humanly possible for our members to respond to the notices issued for various proceedings discuss below.
Even otherwise responding to these notices is not possible without provision of details/ information by clients/ taxpayers who are also suffering from the short comings discussed above. On the other hand, IRIS still has its own limitations.
Any assignment created especially in ‘completed tasks’ cannot be replied via IRIS. Even if a notice can be responded to via IRIS, attachments containing details beyond a specific size are not acceptable by IRIS i.e. not every notice can be responded to via IRIS.
This would mean that bar members have to come to the tax office for making the compliance. Under the present scenario of infections (tax offices are not immune from this), this poses a great threat for the visitors.
What has been observed that as a matter of fact, the notices, which are being issued can broadly been categorized under the following categories:
(i) Audit notices for the Tax Years 2015 to 2019
(ii) Audit notices for the TY 2014 including notices for making amendment under section 122(5) of the Income Tax Ordinance, 2001
(iii) Monitoring of withholding tax
(iv) Set-aside proceedings
(v) Appeal effect proceedings
For Audit notices relating to the Tax Years 2015 to 2019, the bar is of the view that there should not arise any issue of getting barred due to any time limitation. As such, these proceedings can well be taken up at a later stage as well, say after two to three months when gravity of the spread of Coronavirus will be subsided.
The notices for monitoring of withholding tax are again not poised with any time limitation issue.
As for the notices related to the set aside and appeal effect proceedings, it would be advisable to seek an advice from the Ministry of Law as to any possible waiver from the application of calculation of limitation period under the Income Tax Ordinance, 2001 read with Section 4 of the Limitation Act, 1908 for these extra ordinary days; alternatively, some moratorium should be asked for. This will be in utter necessity for saving precious lives from any jeopardy due to any insensitivity.
The tax bar urged the FBR to suspend the notices at least till the end of July 2020. Further that no adverse action would be taken on the notices already issued.
This is acutely necessary to defuse the tension in the atmosphere and for instilling the much-needed confidence in the taxpayers of the country towards the single most pivotal federal tax regulator of the country.
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So far 30 FBR officials die of coronavirus
ISLAMABAD: So far 30 officials of Federal Board of Revenue (FBR) have died of coronavirus, including a BS-22 officer of customs service.
This was disclosed by FBR in a statement issued on Friday.
It said that the FBR arranged a eulogy in remembrance of martyred officers and staff due to coronavirus / Covid-19.
On this occasion, Secretary Finance Naveed Kamran Baloch, Chairperson FBR Nausheen Javaid Amjad and other senior officers and officials of FBR participated in the eulogy.
Prayers were offered for the departed Muhammad Zahid Khokhar, a Pakistan Customs grade-22 officer and other officers and officials of FBR.
A special tribute was also paid by the participants on the services of the martyred officers and staff for the organization and country, who continued to work for the collection of revenue despite outbreak of corona virus throughout the country.
“So far, 30 employees of FBR have embraced martyrdom due to Covid-19. These officers and officials worked at FBR HQ and its Field Offices,” it said.
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FBR exempts sales tax on import of 61 medical equipments
ISLAMABAD: Federal Board of Revenue (FBR) on Friday announced sales tax exemption on import of 61 medical equipments, which are important to fight against COVID-19.
The FBR issued SRO 555(I)/2020 to grant exemption on the medical equipments for a period of three months. Previously, the FBR granted exemption on various medical equipments through SRO 237(I)/2020 dated March 20, 2020.
Following goods are exempted from whole of sales tax at import stage:
01. Real-time PCR system (standard 96-well plate and
0.2ml tubes format, 5 channel)
02. Biosafety Cabinet
03. Auto Clave 50 Liter Capacity
04. Multi channel pipette (0.5-10 pi)
05. Single channel pipette a) 2 pi b) 10 pi c) 200 pi d) 1000 pi
06. Muti channel pipette 20-200 ml
07. Vacuum fold
08. Micro Centrifuge (Non-refrigerated, Rotor capacity: 12 x 1.5 / 2.0 ml vessels, 2 x PCR strip, Max. speed: 12,100 x g (13,400 rpm))
09. PCR Cabinet (FIEPA filter system, UV and white light)
10. Real-time PCR kit for the detection of Coronavifus (SARS-CoV2)
11. Viral RNA Extraction Kit and machine (Automatic Extractors)
12. VTM (Viral Transport Medium)
13. Dr Oligo Synthesizer
14. Refrigerator/freezer (-20 °C)
15. Vortex Machine
16. Refrigerated Centrifuge Machine (Rotor capacity 1.5ml x 24 max. speed 14000 rpm)
17. UPS (6 KVA)
18. Tyvek Suits
19. N-95
20. Biohazard Bags (18 Liters)
21. PARR (Powdered Air Purifying respirators)
22. Multimode ventilator with air compressor
23. Vital sign monitor with 2IBPand ETco2 two Temp.
24. ICU motorized patient bed with side cabinet and over bed table
25. Syringe infusion pump
26. Infusion pump
27. Electric suction machine
28. Defibrillator
29. X-Ray Mobile Machine
30. Simple Nebulizer
31. Ultrasound machine
32. Noninvasive BIPAP
33. ECG Machine
34. Pulse Oximeters
35. Ripple mattress
36. Blood gas analyzer
37. AMBU Bag
38. Nitrile Gloves
39. Latex Gloves
40. Goggles
41. Face Shields
42. Gum Boots
43. Mackintosh bed sheets
44. Surgical Masks
45. Air Ways
46. Diaflow
47. Disposible Nebulizer Mask Kit
48. EGG Electrodes
49. ETT Tube (Endotracheal Tubes) All sizes
50. Humidifier Disposable Flexible
51. IV Cannula all sizes
52. IV Chambers
53. Oxygen Recovery Kit
54. Padded Sheets
55. Stomach Tube
56. Stylet for Endotracheal Tube
57. Suction Tube control valve
58. Tracheostomy Tube 7, 7.5, 8
59. Ventilator Circuit
60. Ventury Masks
61. Disposable shoes cover (water proof)
This notification shall take effect from the June 20, 2020 and shall remain effective for a period of three months.
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No date extension for sales tax payment, return filing: FBR
The Federal Board of Revenue (FBR) issued a clear and unequivocal statement on Friday, dispelling any rumors of an extension in the filing of sales tax and federal excise returns.
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FBR urged to extend date for tax amnesty payment
KARACHI: Karachi Tax Bar Association (KTBA) has urged Federal Board of Revenue (FBR) to extend the date for making payment for amnesty scheme declarants.
The KTBA in a letter to FBR chairperson on Thursday pointed out that the due date of payment of tax under section 6 of the Assets Declaration Ordinance, 2019 (“ADO, 2019”), which in terms of section 6 of the ADO was June 30, 2019.
A declarant was also provided with an option to pay the tax on deferred payment basis in installment till the date of June 2020.
This late payment, however, had to be made along with default surcharge at the rates given in Clause (2) of the Schedule to the ADO, 2019.
The KTBA said that the maximum rate of default surcharge is 40 percent which would apply if the tax payment is made by 30 June 2020.
The ongoing circumstances in the wake of current pandemic of COVID-19 which, undisputedly, has affected the life and business of every individual, adversely and taxpayers are no exception.
The fall out of the cessation of business activities in the last three (03) months due to intermittent lockdown orders has effected every ones’ taxpaying capacity as well.
“It has become quite difficult for the taxpayers to make the payment of tax as per the proviso discussed above, by 30 June 2020,” the KTBA said.
In this connection, on behalf of our members, we would suggest that the following may be considered:
1. the due date of payment of tax may be extended up to 31 December 2020 without increasing the rate of default surcharge further
AND
2. allow adjustment from tax refund, if any, available to the taxpayer, against the aforesaid payment.
The measures will not only repose confidence to the taxpayers but will also show the resolve of the FBR to address a genuine issue.
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FBR notifies promotion of 49 IRS officers to BS-19
ISLAMABAD: Federal Board of Revenue (FBR) on Thursday notified promotion of 49 officers of Inland Revenue Service (IRS) to BS-19 with immediate effect.
The FBR notified promotion of 41 officers from BS-18 to BS-19 on regular basis and other eight officers have been promoted from BS-18 to BS-19 on acting charge basis.
The following BS-18 officers of Inland Revenue Service are promoted to BS-19 on regular basis with immediate effect :
1. Muhammad Asfandyar Janjua
2. Naveed Khan
3. Syed Salahuddin Gillani
4. Azhar Jehangir
5. Muhammad Aamir Ilyas
6. Qadir Nawaz
7. Ms. Sadia Akmal
8. Ms. Sadia Ali Akram
9. Muhammad Ali Khan
10. Ms. Amra Sarwar
11. Ms. Arooj Mehwish Rizvi
12. Asad Aziz
13. Ms. Saba Rehmat
14. Ms. Neelam Ifzal
15. Karim Baksh Bughio
16. Mrs. Saima Kenan Khan
17. Husnain Ahmad Hali
18. Kashif Hafeez
19. Inayat Malik
20. Akhtar Abbas
21. Jamil Ahmad
22. Muhammad Masood Ahmed Gorsi
23. Kamran Ullah
24. Laiq Zaman
25. Naseebullah
26. Naseer Ahmed
27. Mrs. Safia Naseer
28. Muhammad Sajid Ahmad
29. Zubair Khan
30. Ms. Sadia Iftikhar
31. Tarique Aziz
32. Rashid Javaid Rana
33. Nasir Khan
34. Muhammad Farooq Anwar
35. Khawar Siddique
36. Syed Zubair Shah
37. Abdul Rauf
38. Tariq Javed
39. Tauqeer Ahmed Sujra
40. Ms. Amina Batool
41. Ms. Kiran Maqsood
The FBR said that the officers at Sr. Nos. 07, 14, 24 and 32 will actualize their promotion from the date of their return from deputation and joining FBR (Hq), Islamabad.
The officer at Sr. No. 08 is promoted subject to completion of satisfactory PERs, without any adverse entry/remarks, for the period 01.07.2018 to 30.06.2019. The officer at Sr. No. 19 is promoted subject to completion of satisfactory PERs, without any adverse entry/remarks, for the period 01.07.2018 to 31.03.2019.
The officer at Sr. No. 25 is promoted subject to completion of satisfactory PERs, without any adverse entry/remarks, for the period 28.03.2019 to 30.06.2019 and will actualize his promotion from the date of his return from deputation and joining FBR (Hq), Islamabad.
The officers already working in BS-19 on acting charge basis or on OPS basis as Additional Commissioner / Additional Director / Secretary FBR (HQ), Islamabad shall actualize promotion at their present place of posting. For actualization of promotion in BS-19 on regular basis of the remaining officers, transfer / posting order shall be notified separately and they shall actualize accordingly.
Following BS-18 officers of Inland Revenue Service are appointed in BS-19 on acting charge basis with immediate effect:-
1. Mrs. Sabah Fahad
2. Zeeshan Asif
3. Ms. Saba Ijaz
4. Syed Mashkoor Ali
5. Shahzad Ali Khan
6. Muhammad Imran
7. Soban Ahmad
8. Ms. Hira Nazir
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FBR promotes 14 customs officers to BS-19
ISLAMABAD: Federal Board of Revenue (FBR) on Thursday announced promotion of 14 officers of Pakistan Customs Service (PCS) from BS-18 to the post of Additional Collectors BS-19 on regular basis with immediate effect.
Following officers have been promoted to BS-19:
1. Ali Raza Turabi
2. Dr. Imran Rasool Khan
3. Muhammad Hassan Farid
4. Ghulam Hyder Mahesar
5. Muhammad Nauman Tashfeen
6. Moeen Afzal Ali
7. Junaid Usman Akram
8. Rana Irfan Shaukat
9. Saad Ata Rabbani
10. Wajid Zaman
11. Zakir Muhammad
12. Ihsanullah Shah
13. Ammara Durrani
14. Muhammad Qasim Khokhar
The FBR said that the officers who are already working in BS-19 on OPS basis will actualize their promotion against these posts.
Posting / Transfer of the remaining officers will be notified separately, and they shall actualize accordingly.
The officers who were drawing performance allowance prior to issuance of this notification shall continue to draw this allowance on their promotion.
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Key points of amnesty scheme for real estate sector
KARACHI: The federal government has made amnesty granted to real estate sector to the part of Finance Bill, 2020 in order to get approval from the Parliament.
Deloitte Yousuf Adil Chartered Accountants in their budget explanations said that to stimulate investment in real estate and construction sector, a no-questions-asked amnesty has been introduced.
Under this amnesty the Federal Board of Revenue (FBR) has been restrained from asking question related to source of investment made into the real estate / construction business.
Both previous and current federal governments have launched tax amnesty schemes in 2018 and 2019, albeit the scope of this scheme is limited to investment made in construction sector only.
The proponent of this particular amnesty scheme argues that this would act as a catalyst to increase economic activity in the country thereby improving employment opportunities as number of sub-sectors and small and medium size industries are associated with construction industry.
The newly introduced scheme provides immunity from the provisions of section 111 of the Ordinance , and no questions will be asked regarding source of funds from investors making capital investment in new construction projects in the form of money or land, either as an individual, as an association of persons or a company, subject to conditions as explained below.
For individuals:
Monetary: Investor shall open a new bank account and deposit such amount in it on or before the 31st day of December, 2020
Land: Investor shall have the ownership title of the land at the time of commencement of the Tax Laws (Amendment) Ordinance, 2020
Corporate shareholder / Partner:
Monetary: Such amount shall be invested through a crossed banking instrument deposited in the bank account of such association of persons or company, as the case may be, on or before the 31st day of December, 2020
Land: Such land shall be transferred to such association of persons or company, as the case may be, on or before the 31st day of December, 2020. Provided that the person shall have the ownership title of the land at the time of commencement of the Tax Laws (Amendment) Ordinance, 2020
Registration: The Company or AOP shall be a single object company duly registered under the Companies Act, 2017 or Partnership Act, 1932 as the case may be.
Additional conditions to be met:
• Prescribed IRIS form shall be submitted by the person making investment.
• The investments made shall be wholly utilized in a project.
• Grey structure in case of builders and landscaping in case of developers have been completed on or before September 30, 2022, and duly certified by NESPAK or respective map approving authority.
• Further, for land developer, the following additional conditions should be met;
- 50 percent of plots have been booked for sale and 40 percent of sale proceeds thereof have been received by September 30, 2022 as duly certified by specified chartered accountancy firm.
- 50 percent of the project roads have been laid up to sub-grade level as duly certified by NESPAK.
• The value or price of the land or building shall be higher of
a) 130 percent of FBR assessed fair market value; or
b) At the option of person making investment, lower of the value determined by at least two independent SBP approved valuers.
Exclusion
The following incomes or persons are excluded from the relief provided under the amnesty scheme:
Holder of public office, benamidar or his spouse or dependents; or
Public Listed Company, real estate investment trust or any company whose income is exempt under the Ordinance.
Proceeds of crime including money laundering, terror financing excluding tax evasion.
Restriction of Ownership Changes
• Under the new amnesty, no change in ownership shall be allowed for incomplete projects except where 50 percent cumulative cost on the project has been incurred as certified by prescribed Chartered Accountants firm, with the exception of legal transmission to heirs.
• Inclusion of partners or shareholders after December 31, 2020 is permissible; however, such investors shall not be eligible to avail tax amnesty.
Amnesty to the purchaser
Provisions of section 111 shall also not apply to:
the first purchaser of a building or a unit in the building in respect of the purchase price both in case of new project or existing incomplete project where payment is routed through crossed banking instrument between the date of registration of project with the FBR and September 30, 2022.The purchaser of plot for building construction where the purchase, the payment thereof and commencement of construction has been made on or before December 31, 2020 subject to construction completion by September 30, 2022 and subject to registration of such purchaser with FBR on IRIS portal.
Thus no questions would be asked from the purchaser of building or plot regarding source of funds who complies with the above mentioned conditions.
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FBR to take action against amnesty declarants on failure to make payment
The Federal Board of Revenue (FBR) in Pakistan issued a stern warning on Tuesday, stating that it would invoke provisions related to concealed assets if declarants under the amnesty scheme failed to pay their outstanding dues by June 30, 2020.
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