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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.

  • FBR monitors tax refund repayments to ensure transparency

    FBR monitors tax refund repayments to ensure transparency

    ISLAMABAD: Federal Board of Revenue (FBR) has initiated the monitoring to ensure transparency in repayment of tax refunds.

    An office order circulated to all Regional Tax Offices (RTOs) and Large Taxpayers Units (LTUs), the FBR said that the prime minister had announced relief package for the industry which included tax refunds of Rs100 billion to industrial sector.

    The FBR said that presently huge amount of sales tax refund claims were laying pending for replication/processing in each RTO/LTU.

    The revenue body further said that in this emergency situation the genuine businesses/industries need liquidity to pay salaries to their employees.

    The FBR directed the tax offices to process the sales tax refund claims immediately on urgent basis and sanction the admissible amount to the refund claimant as per law.

    The FBR directed Chief Commissioner of RTOs/LTUs to monitor the process in order to maintain transparency and fairness.

    The chief commissioners have also been directed to report the refund release to FBR on daily basis.

  • Rs100 billion released for tax refunds, duty drawback repayments

    Rs100 billion released for tax refunds, duty drawback repayments

    ISLAMABAD: In a bid to alleviate liquidity challenges faced by the industry, particularly in the aftermath of the COVID-19 pandemic and subsequent lockdowns, the government of Pakistan has disbursed a substantial amount of Rs 100 billion for the repayment of tax refunds and duty drawbacks.

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  • FBR notifies rules for third party recovery of defaulted amount

    FBR notifies rules for third party recovery of defaulted amount

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday notified rules for third-party recovery of defaulted amount.

    The FBR issued SRO 274(I)/2020 dated April 02, 2020 to implement the draft rules released on February 14, 2020 through SRO 111(I)/2020.

    Through the SRO the FBR amended the Income Tax Rules, 2002 and introduced a new chapter “Recovery of Tax From Persons Holding Money on Behalf of a Taxpayer.”

    As per the rules the tax authorities have be empowered to recover tax from a defaulter through third party, who owes money to the defaulted taxpayer.

    The FBR is facing huge revenue shortfall for achieving this revenue collection target. Therefore, the tax machinery may apply all possible ways to recovery outstanding amount.

    The Section 140 explains the procedure of recovery through third party.

    Section 140: Recovery of tax from persons holding money on behalf of a taxpayer

    Sub-Section (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;

    (c) holding or who may hold money on account of some other person for payment to the taxpayer; or

    (d) having authority of some other person to pay money to the taxpayer, to pay to the Commissioner so much of the money as set out in the notice by the date set out in the notice:

    “Provided that the Commissioner shall not issue notice under this sub-section for recovery of any tax due from a taxpayer if the said taxpayer has filed an appeal under section 127 in respect of the order under which the tax sought to be recovered has become payable and the appeal has not been decided by the Commissioner (Appeals), subject to the condition that ten per cent of the said amount of tax due has been paid by the taxpayer.”

    Sub-Section (2): Subject to sub-section (3), the amount set out in a notice under sub-section (1) —

    (a) where the amount of the money is equal to or less than the amount of tax due by the taxpayer, shall not exceed the amount of the money; or

    (b) in any other case, shall be so much of the money as is sufficient to pay the amount of tax due by the taxpayer.

    Sub-Section (3): Where a person is liable to make a series of payments (such as salary) to a taxpayer, a notice under sub-section (1) may specify an amount to be paid out of each payment until the amount of tax due by the taxpayer has been paid.

    Sub-Section (4): The date for payment specified in a notice under sub-section (1) shall not be a date before the money becomes payable to the taxpayer or held on the taxpayer’s behalf.

    Sub-Section (5): The provisions of sections 160, 161, 162 and 163, so far as may be, shall apply to an amount due under this section as if the amount were required to be deducted from a payment under Division III of Part V of this Chapter.

    Sub-Section (6): Any person who has paid any amount in compliance with a notice under sub-section (1) shall be treated as having paid such amount under the authority of the taxpayer and the receipt of the Commissioner constitutes a good and sufficient discharge of the liability of such person to the taxpayer to the extent of the amount referred to in such receipt.

    Sub-Section (10): In this section, “person” includes any Court, Tribunal or any other authority.

  • FBR extends date for integration of Tier-1 retailers

    FBR extends date for integration of Tier-1 retailers

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday extended the date for integration of Point of Sale (POS) by high volume retailers up to April 30, 2020.

    The last date for integrating the POS for Tier-1 retailers was March 31, 2020.

    The FBR said that only those retailers can integrate their POS by April 30 who submit their intention to RTOs/LTUs by April 20, 2020.

    FBR sources said that the decision had been taken due to lockdown in the many parts of the country in order to prevent spread of coronavirus the business activities had become stand still.

    They said that big outlets and shopping plazas are observing closure during the lockdown and many of those big retailers would not able to make compliance.

    Previously, the FBR on March 09, 2020 extended the date of online integration of Tier-1 retailers.

    The FBR said that it had condoned the time limit as provided in Sales Tax Rules, 2006 up to March 31, 2020, for online integration of tier-1 retailers’ POSs with board’s computerized system for real-time reporting of sales.

    However, this permission is subject to condition that the teir-1 retailers should furnish in writing their willingness to integrated all their POSs in terms of the rules to respective Regional Tax Offices (RTOs)/Large Taxpayers Units (LTUs) by March 15, 2020.

    The deadline was expired on December 15, 2019 which was given by the FBR to tier-1 retailers to integrate their POSs with the FBR online system.

    All tier-1 retailers are required to integrate all their POSs with FBR’s computerized system.

    Tier-1 retailer is defined in section 2(43A) of the Sales Tax Act, 1990, to be a person who falls in any of the following categories:

    (a) a retailer operating as a unit of a national or international chain of stores;

    (b) a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks;

    (c) a retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rupees twelve hundred thousand;

    (d) a wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers; and

    (e) a retailer, whose shop measures one thousand square feet in area or more

  • FBR sanctions Rs56 billion sales tax refunds through FASTER

    FBR sanctions Rs56 billion sales tax refunds through FASTER

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday said that an amount of Rs56 billion was paid as sales tax refunds to improve liquidity of exporters.

    The FBR shared information about refund claims sanctioned through FASTER (Fully Automated Sales Tax e-Refund) system developed for quick processing of refunds due to exporters.

    Since July 2019, Refund Claims amounting to Rs. 59 billion have been filed and FBR has sanctioned Rs. 56 billion, which comes to around 95 percent of the claimed amount.

    During the month of March, FBR has sanctioned refunds of Rs. 25 billion approximately to exporters.

    FASTER is a fully automated system which uses a Risk Management System for processing Sales Tax Refunds without human interference. FASTER is operational for the tax periods July and onwards.

    FBR strives to make timely payment of Refunds to exporters so that they don’t face any liquidity issue.

  • FBR asks terminal operators to allow 15-day free time for imported cargo

    FBR asks terminal operators to allow 15-day free time for imported cargo

    The Federal Board of Revenue (FBR) has urged terminal operators to provide an additional 15-day free period for imported cargo at the port area, exempting it from demurrage and detention charges, in response to the ongoing coronavirus lockdown.

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  • FBR further extends sales tax payment date up to April 12

    FBR further extends sales tax payment date up to April 12

    Islamabad, Pakistan – In a bid to provide relief to businesses during these challenging times, the Federal Board of Revenue (FBR) announced on Tuesday the extension of the last date for the payment of sales tax and federal excise duty (FED) for the month of February 2020.

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  • FBR appeals taxpayers pay duty, taxes to help government fight against coronavirus

    FBR appeals taxpayers pay duty, taxes to help government fight against coronavirus

    The Federal Board of Revenue (FBR) has issued a call to taxpayers, urging them to pay their duties and taxes promptly to support the government’s efforts in combating the coronavirus pandemic. This appeal, made in a statement on Tuesday, emphasizes the crucial role of tax revenue in bolstering the country’s resources during these challenging times.

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  • Budget Strategy: No amnesty schemes; individual tax threshold to be lowered for broadening of tax base

    Budget Strategy: No amnesty schemes; individual tax threshold to be lowered for broadening of tax base

    ISLAMABAD: The government has prepared budget strategy under which no more amnesty scheme will be offered in future. Meanwhile, the tax threshold to broaden the tax base.

    The medium term budget strategy paper 2020/2023 released by the ministry of finance stated that the government will increase the share of direct taxes in revenues by enforcing real-income based income tax, to be achieved by broadening of tax base.

    Documentation of the economy to increase taxation in wholesale and retail, real estate and speculation businesses is also a priority. “Amnesty schemes will no longer be offered, and exemptions will be curtailed. Income tax slabs will be rationalised, and thresholds will be lowered to broaden tax base.”

    Gradual phasing out of final tax regime will help in taxing real income. Through amendments in tax law, simplification of laws and regulations, and improvement in tax administration, a legal basis will be provided to risk-based audit system.

    Taxpayer facilitation measures include awareness campaign and taxpayer education facilitation. Investments in IT based customer relationship management system, support lines, emails and website will be strengthened.

    Measures will also be taken to encourage voluntary compliance through facilitation measures and increasing certainty of detection and enforcement of law.

    Proper targeted awareness campaign through official media houses, using commercial media means will be carried out.

    FBR is effectively using Information Technology support for efficient detection, monitoring and facilitation of the tax regime. Data on foreign bank accounts of Pakistani citizens is being received and analyzed to detect tax evasion.

    IT based databank regarding foreign bank accounts will be established. Tracking and tracing system for collection of Federal excises duty on cigarettes has commenced with the issuance of licenses. Electronic monitoring of production and sales of various sectors will also commence in due course of time.

    Installation of point-of-sale (PoS) integration on all Tier-I retailers has been enforced since 15 December 2019.The online integration of the prescribed registered persons with PoS will be enforced through effective monitoring. FBR is developing IT strategy for this.

    The recently launched app “Tax Asaan” will be improved and more features will be introduced to make it user friendly. Introduction of Corporate Income Tax (CIT) reform will result in fewer exemptions and crediting schemes.

    The practice of issuing new preferential tax treatments or exemptions will be discontinued so that tax exemptions as a tool for philanthropy and social, investment and export promotion are discouraged.

    Exemptions will be phased out except basic food and nutrition items and provisions of health sector. Harmonization between Federal and Provincial taxation regimes is to be achieved by removing duplication of taxation and introducing uniform laws and procedures.

    The constitution assigns income taxes (except for agriculture income), the General Sales Tax on goods, customs duties, federal excises, and the capital gains tax to the federal level to be collected by the Federal Board of Revenue (FBR).

    While, GST on services, tax on professions, Agricultural Income Tax, Motor Vehicle Tax, Urban Immovable Property Tax, and other taxes related to real estate (e.g. stamp duty, Capital Value Tax) are assigned to the provinces.

    This arrangement fragments Pakistan into five tax jurisdictions in the services sector, with consequences such as double taxation, cascading effects of taxes and high compliance burden.

    Work on a unified tax portal with standardised forms that will enable taxpayers to file and pay federal and provincial taxes with less cost and compliance time will be completed.

    In 2020-2021, FBR will be working on removal of structural anomalies in the taxation regime such as anomalies from SROs (Statutory Regulatory Orders) / aligning certain SROs with the main statute and Rules, Simplified tax returns and forms.

  • PCDMA urges FBR to withdraw notices amid coronavirus lockdown

    PCDMA urges FBR to withdraw notices amid coronavirus lockdown

    KARACHI: Commercial importers have resented to the notices sent by Federal Board of Revenue (FBR) despite realizing severe economic crisis amid lockdown in the country to control spread of coronavirus.

    Pakistan Chemicals & Dyes Merchants Association (PCDMA) chairman and former director Karachi Stock Exchange Amin Yousuf Balgamwala in a statement on Monday demanded to waive all notices including income tax, sales tax, WHT and all proceeding in this regard for two months due to the worst economic crisis, as due to coronavirus pandemic, all the business activities have stopped and commercial importers are already facing huge financial crises.

    Balgamwala said we are surprised on receiving FBR notices, as whole country is lockdown for prevention of coronavirus pandemic, so chairman FBR to issue directives to chief commissioner and all RTOs to stop harassment to commercial importers, so that import activities could be restored after the lockdown period.

    “If wheel of trade and industry will continue to rotate, will create more opportunities for employment as the country develops,” he said

    PCDMA chairman further said that if all notices including income tax, sales tax, WHT and other proceeding not stopped for at least 2 months then the textile industry will be badly affected which is the backbone of the domestic economy as commercial importers are the largest means of providing raw materials to the textile industry to continue production activities.

    Amin Yusuf Balgamwala also demanded to defer the condition of the CNIC on the sale of goods to unregistered persons for six months so that the business community, especially small traders should be protected from destruction.