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 collects Rs960 billion in first quarter: Shabbar Zaidi

ISLAMABAD: The Federal Board of Revenue (FBR) has collected Rs960 billion in the first quarter of current fiscal year 2019/2020, which is about 90 percent of the target for the quarter, Syed Shabbar Zaidi, Chairman, FBR said on Monday.

In a message on social media, he said that tax collection up to 90 percent of highly aggressive target for quarter ended September 30, 2019 has been achieved.

“Collection is Rs 960 billion. Some more positive adjustment is expected. Furthermore this amount excludes refunds of past years of Rs15 billion,” the chairman said.

The chairman said that collection from domestic sources had been increased by 25 percent. He said that the imports had been contracted by $3 billion during the period.

He said that the contraction of import had impacted the revenue by Rs125 billion. The chairman said that if this amount added the revenue collection then the target would have been met.

September 30, 2019
FBR extends return filing date up to October 31

ISLAMABAD: Federal Board of Revenue (FBR) has extended the last date for filing income tax returns and wealth statements for tax year 2019 up to October 31, 2019, according to a notification issued on Monday.

The FBR issued Circular No. 14/2019 to extend the last date for filing income tax returns from September 30, 2019 to October 31, 2019.

The FBR said that the individuals and association of persons who were required to file their income tax returns and statements of final taxation for the tax year 2019, which were due on September 30, 2019, but failed to file their income tax returns / statements, are hereby allowed to file their returns/statements by October 31, 2019.

The FBR further said that the companies which were required to file returns of total income/statements of final taxation for the tax year 2019, which were due on September 30, 2019 but failed to file their income tax returns/statements, though have paid 90 percent of the admitted tax liability, are hereby allowed to file their returns/statements by October 31, 2019.

September 30, 2019
FBR may extend return filing date due to delayed issuance of forms

ISLAMABAD: Federal Board of Revenue (FBR) may extend the date for filing income tax returns and wealth statements for tax year 2019 due to delay in issuance of return forms and considering problems faced by taxpayers in filing returns.

The last date for filing annual income tax returns is September 30, 2019 for salaried persons, business individuals, Association of Persons (AOPs) and companies having special financial year.

The FBR uploaded the draft return form for tax year 2019 on August 23, 2019 through SRO 951(I)/2019 and then issue the final notification of Income Tax return 2019 of Individuals, Salaried Individuals & AOPs, September 02, 2019 through SRO 979 of 2019.

This shows lapse of statuary period of two months (62 days) and it was all due to the negligence of the FBR, Pakistan Tax Bar Association (PTBA) said in a letter sent to FBR chairman on September 27, 2019.

The PTBA said that on September 27, 2019 FBR issued manual income tax return form vide SRO 1160 of 2019 dated 27th September which is still not available on Excel format, so the small volume taxpayers could file their returns of income for the year 2019 within stipulated time.

The tax bars in the country have pointed out discrepancies due to which the filing of income tax returns was seriously affected:

i. Return / Statement of Final Taxation for Individuals, Salaried Individuals and AOPs is forcibly accompanied with Wealth Statement, which is a separate requirement under Section 116 of the Income Tax Ordinance, 2001;

ii. Non-residents are not able to file their income tax return without Wealth Statement and details of personal expense which is not binding upon them as per statue;

iii. Tax return of a Salaried Individual still lacking certain details of assets/liabilities in Wealth Statement which is not in accordance with section 116 of the Ordinance;

iv. There is a single field/ column for foreign income only contrary to the requirements of section 103(8) read with section 104 of the Ordinance that provides computation of foreign income/ loss and adjustment and carry forward of losses;

v. There is no option to declare foreign income with their respective heads of income and instead only figure sums it all which does not give the fair picture of the foreign income;

vi. Tax on income from Pensioners Benefit /Behbood Certificates account is not being properly worked out.

vii. IRIS system is not calculating accurate tax on the income above Rs. 1,200,000/- in certain cases.

The FBR may also extend the last date for filing the income tax returns as it had received small amount of returns by September 29, 2019 as against last year’s returns of around 2.5 million.

Tax experts said that if FBR could able to receive around 0.5 million returns by September 30, 2019 even then it would be shortfall of 2 million returns.

The experts believed that due to steps toward broadening of tax base by the FBR it is expected that more returns would be filed for tax year 2019.

They said that as per law and statutory time period for filing of income tax return is Ninety (90) days under section 118 of the Income Tax Ordinance, 2001 read with rule 34 of the Income Tax Rules, 2002 while on the contrary only (28) days have been given here between September 02 and September 30, 2019 for online filing and only (1) one working day available for manual filing.

September 30, 2019
Importer to pay KIBOR+3pc on timely payment failure

KARACHI: An importer in case of failure to pay import duty or other taxes within specified time then the importer shall be liable to pay surcharge at the rate of KIBOR + 3 percent on the due charges.

According to Customs Act, 1969 updated June 30, 2019 issued by Federal Board of Revenue (FBR), the KIBOR means Karachi Inter Bank Offered Rate prevalent on the first day of each quarter of the financial year.

According to the Customs Act, 1969, under Section 21A the FBR is allowed to defer collection of customs duty. However, where deferment of customs duties is allowed by the FBR, a surcharge not exceeding KIBOR plus three percent per annum shall also be payable on the deferred amount from such date and in the manner as the FBR may be rules prescribed.

Similarly, under Section 80 related to clearance of goods for home consumption, the act explained that where the owner fails to pay import duty and other charges within 10 days from the date on which the time same has been assessed under Section 80 or 80, he shall be liable to pay surcharge at the rate of KIBOR plus three percent on import duty and other charges payable on suchg goods.

Section 86 related to submission of post-dated cheque and indemnity bond, the FBR said:

When any such application has been made in respect of any goods, the owner of the goods to which it relates shall furnish an indemnity bond and post-dated cheque equivalent to the duty assessed under section 80 or section 81 or reassessed under section 109 on such goods,-

(a) to observe all the provisions of this Act and the rules in respect of such goods;

(b) to pay on or before a date specified in a notice of demand all duties, taxes, rent and charges payable in respect of such goods together with surcharge on the same from the date so specified at the rate of KIBOR plus three per cent per annum or such other rate as is for the time being fixed by the Board; and

(c) to discharge all penalties incurred for violation of the provisions of this Act and the rules in respect of such goods.

The Section 202A related to levy of surcharge, explained that notwithstanding anything contained in this Act and without prejudice to any other action that may be taken thereunder, if any person fails to pay the arrears within the prescribed time, he shall, in addition to the arrears, be liable to pay surcharge at the rate of KIBOR plus three per cent per annum, of the total amount of arrears.

September 30, 2019
FBR asks people to check transactions details, file income tax returns

KARACHI: Federal Board of Revenue (FBR) on Sunday urged people to file their annual returns on the basis of information, which is already possessed by the revenue authority.

The FBR said that it had information of those people who had made transactions and paid withholding taxes. These information are included: bank accounts, assets, foreign travels, payment for utility bills etc.

The revenue body advised people to check their transactions on information portal of the FBR and file their annual returns by mid-night of September 30, 2019 in order to avoid penal action.

The FBR officials said that the information had been obtained from withholding agents and fed into the main database of the revenue body.

They said that several transactions made by persons including immovable property purchase of certain covered area, motor vehicles above 1,000 CC etc are required to file annual income tax returns.

In case those persons, whose information already with the FBR, have failed to file their returns then the tax officials would initiate legal proceedings and mandatory return filing.

The FBR said that the persons who want to know their transactions on the FBR portal then they should visit the FBR website and create an account to login and fetch information.

The FBR warned people to file their income tax returns as the last date for tax year 2019 is September 30, 2019. Otherwise the FBR will take stern action against non-compliant persons.

September 29, 2019
FBR explains benefits of timely filing income tax returns

ISLAMABAD: Federal Board of Revenue (FBR) has explained benefits of filing annual income tax returns for tax year 2019 by due date i.e. September 30, 2019.

The FBR in its ongoing campaign for encouraging people to file their income tax returns by due date highlighted advantages of filing by due date and also pointed out disadvantages of non-compliance.

The FBR said that for not filing the return by due date the person/company will be charged withholding tax at double rates; FBR will assess the applicable tax without serving any notice; legal action will be taken resulting into imprisonment of one to three years; fine will be charged on late submission of income tax return.

By filing the income tax returns by due date i.e. September 30, a person/company shall be enlisted to Active Taxpayers List (ATL). The following are the benefits of ATL enlistment:

— Almost half of the withholding tax as compared with the inactive taxpayers

— 5.5 percent tax on imports (raw material)

— 6 percent on imports (commercial)

— 15 percent tax on dividends

— 10 percent tax on bank and saving scheme profit worth up to Rs0.5 million and 15 percent on above Rs0.5 million

— 4.5 percent tax on sale of goods by persons except companies

— 10 percent tax on provision of services by persons except companies

— 7.5 percent tax on contracts executed by person except companies

— 15 percent tax on prize money of prize bonds

— 12 percent tax on commission

— Annual token fee of vehicles from Rs800 to Rs10,000

— Withholding tax on vehicle registration from Rs7,500 to Rs250,000

— No tax on cash withdrawal of more than Rs50,000 from banks

— No tax on bank transactions (cross cheque, pay order, demand draft etc.)

— One percent tax on purchase of property

— 10 percent tax on sale by auction

— Tax on mobile phone import from Rs70 to Rs200

— 10 percent tax deduction for payment against advertisement to non-resident person.

The FBR also highlighted drawback in shape of double rate of tax on following transactions in case of not filing return by due date:

— Almost double tax rate

— 11 percent tax on imports (raw material)

— 12 percent on imports (commercial)

— 30 percent tax on dividends

— 20 percent tax on bank and saving scheme profit worth up to Rs0.5 million and 30 percent on above Rs0.5 million

— 9 percent tax on sale of goods by persons except companies

— 20 percent tax on provision of services by persons except companies

— 15 percent tax on contracts executed by person except companies

— 30 percent tax on prize money of prize bonds

— 24 percent tax on commission

— Annual token fee of vehicles from Rs1600 to Rs20,000

— Withholding tax on vehicle registration from Rs15,000 to Rs500,000

— 0.6 percent tax on cash withdrawal of more than Rs50,000 from banks

— 0.6 percent tax on bank transactions (cross cheque, pay order, demand draft etc.)

— Two percent tax on purchase of property

— 20 percent tax on sale by auction

— Tax on mobile phone import from Rs140 to Rs400

— 20 percent tax deduction for payment against advertisement to non-resident person.

September 28, 2019
FBR attaches Benami properties worth Rs4 billion; issues 104 notices

ISLAMABAD: Federal Board of Revenue (FBR) on Friday said that it has attached Benami properties worth Rs4 billion in 15 cases.

“Properties having worth Rs. 4 billion including bank accounts, shares and land in 15 cases have already been attached.”

The FBR said that one out of the above mentioned 15 cases, involving 7,128 Kanals of land having worth of Rs. 700 million was attached. Reference in this case is pending for adjudication.

The FBR said that in pursuance of prime minister’s directive, FBR Anti Benami Zones have started a country wide exercise to gather information of Benami properties from Provincial Revenue/ Development Authorities, ICT Administration. Senior officers of these Authorities have been given a briefing on Benami laws along with guidelines for identification and reporting of all such properties.

FBR Anti Benami Directorate is currently investigating 79 Beneficial Owners having104 Benami properties, out of which 58 are located in Karachi, 18 in Lahore and 28 in Islamabad.

Summons have been issued to buyers and sellers of these properties, the FBR added.

September 28, 2019
FBR issues instructions for filing income tax returns, wealth statement

ISLAMABAD: Federal Board of Revenue (FBR) on Friday issued manual for filing income tax return and wealth statement for tax year 2019.

The FBR issued SRO 1160(I)/2019 dated September 27, 2019 to notify instructions for filing annual income returns and wealth statement.

The FBR also issued manual paper return forms for individuals. The form has been issued just three days ahead of due date.

The FBR made amendment to SRO 979(I)/2019 dated September 02, 2019 through the latest SRO.

The instructions issued for filing in return form and wealth statement, the FBR said:

The following persons are required to furnish a return of income for a tax year:

(a) Every company;

(b) Every person (other than a company) whose taxable income for the year exceeds PKR 400,000;

(c) Every non-profit organization as defined in clause (36) of section 2;

(d) Every welfare institution approved under clause (58) of Part I of the Second Schedule;

(e) Every person who has been charged to tax in respect of any of the two preceding tax years;

(f) Every person who claims a loss carried forward under this Ordinance for a tax year;

(g) Every person who owns immovable property with a land area of two hundred and fifty square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;

(h) Every person who owns immoveable property with a land area of five hundred square yards or more located in a rating area;

(i) Every person who owns a flat having covered area of two thousand square feet or more located in a rating area;

(j) Every person who owns a motor vehicle having engine capacity above 1000 CC;

(k) Every person who has obtained National Tax Number;

(l) Every person who is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees five hundred thousand;

(m) Every person who is registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan;

(n) Every individual whose income under the head Business exceeds PKR 300,000 but does not exceed PKR 400,000 in a tax year.

(o) Every individual & AOP deriving property income exceeding Rs. 200,000

According to the general instructions, the FBR said that the following errors / omissions shall render a Return invalid & make the taxpayer a non-filer & liable to penalty under section 182(1):

(a) Return on which CNIC is missing or incorrect or invalid;

(b) Return on which mandatory fields marked by * are empty;

(c) Return which is not signed by the Taxpayer or his Representative (as defined in section 172 of the Income Tax Ordinance, 2001);

(d) Return which is not filed in the prescribed Form;

(e) Return which is not filed in the prescribed mode.

Individuals deriving income under the head Property, Capital Gains & Other Sources (excluding Salary / Business) & Income subject to fixed / final tax have to file one page Return in IT-1B Form with Annex-A, Annex-F & Wealth Statement if required to be filed.

Individuals deriving income under the head business or falling under Final Tax Regime (FTR) such as Commercial Importers, Exporters, Contractors, etc. have to file two page Return in IT-2 Form with Annex-A, Annex-B, Annex-F & Wealth Statement if required to be filed. Annex C, Annex-D & Annex-E are required only where Depreciation / Amortization, Admissible / Inadmissible Deductions & Minimum Tax Chargeable / Option out of Presumptive Tax Regime are involved.

Individuals, including members of AOPs or directors of Companies must file Wealth Statement.

Taxpayers may file Return of Total Income / Statement of Final Taxation & Wealth Statement through the following modes:

Electronically at FBR Portal (https://iris.fbr.gov.pk/infosys/public/txplogin.xhtml) which is mandatory for all Companies, AOPs, Sales Tax Registered Persons, Refund Claimants, Individuals having income under the head Salary and Individuals declaring taxable income of one million and more or turnover or receipts exceeding fifty million.

However, all others are also encouraged to electronically file Return; Manually on paper at Taxpayer Facilitation Counter of the respective Regional Tax Office. Paper Return Form can be downloaded from FBR Website http://www.fbr.gov.pk.

Taxpayers may seek guidance through the following modes:

By calling Helpline 0800 00 227, 051 111-227-227

By visiting the nearest Taxpayer Facilitation Centre (TFC), list of which can be downloaded from FBR website at http://www.fbr.gov.pk

Tax can be paid in any authorized branch of NBP & SBP at any time before filing of return. List of authorized braches of NBP & SBP can be downloaded from http://www.fbr.gov.pk.

Only Foreign Income (Not Loss) should be declared.

Only Agriculture Income (Not Loss) should be declared.

Tax Credits include Tax Credits for the following:

Share in Taxed Income from AOP;

Charitable Donations u/s 61;

Investment in Shares of Public Companies listed on a Stock Exchange in Pakistan (only for Original Allottee other than a Company) u/s 62;

Life Insurance Premium (only for Resident Individual deriving income from Salary / Business) u/s 62;

Contribution to Approved Pension Fund (only for Pakistani Individual registered with FBR / NADRA deriving income from Salary / Business) u/s 63;

Annex-E Taxpayers wanting to opt out of Final Tax Regime (FTR) u/c (56B), (56C), (56D), (56E), (56F), (56G), Part IV, Second Schedule, must file Annex-E.

Annex-F: Only Personal / Household (Non-Business) expenses should be declared.

Annex-F: Expenses borne by more than one person must be declared in total by each person.

For example, if in one family more than one member is contributing to expenses or if more than one family is living jointly & within each family more than one member is contributing to expenses, total expenses under each head must be declared by each member of each family filing his wealth statement & then contribution by other family members be deducted to arrive at own contribution.

Instructions related to Wealth Statement

If rows provided in any segment are inadequate, additional rows may be inserted.

All assets must be delared at cost, including ancillary expenses.

If an asset is acquired under a Hire Purchase Agreement, total price should be declared as asset under the appropriate head & balance payable amount should be declared as liability.

If Wealth Statement is filed for the first time, separate Reconciliation Statement must be filed for each previous year.

Equipment, Plant, Machinery (Non-Business) must be declared with description, for example, Generator, Tubewell, Harvestor, Tractor, Trolley, etc.

Assets created, whether in Pakistan or abroad, in the name of spouse(s), children & other dependents should be declared only if acquired by them with funds provided by you (Benami Assets).

A separate column for assets held outside Pakistan has been added wherein any/all assets held abroad are to be declared at cost in Pak Rupee Value.

September 27, 2019
FBR to launch new audit framework next week: Shabbar Zaidi

Syed Shabbar Zaidi, Chairman of the Federal Board of Revenue (FBR), revealed on Friday that a new audit framework is set to be introduced next week, aiming to streamline tax procedures and enhance ease of compliance for taxpayers.
(more…)

September 27, 2019
Inland Revenue offices to remain open on September 28

Islamabad, September 27, 2019 – The Federal Board of Revenue (FBR) has announced that the offices of Inland Revenue will remain open on Saturday, September 28, 2019.
(more…)

September 27, 2019