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 says file income tax return before expiry date to avoid three-year jail term

    FBR says file income tax return before expiry date to avoid three-year jail term

    ISLAMABAD: Federal Board of Revenue (FBR) has said that non-filers of income tax returns may face jail term up to three years.

    The FBR in its ongoing campaign for return filing for tax year 2019, said on Thursday that non-filing of income tax return is an offence and besides other fine and penalties the non-compliant taxpayer may face imprisonment for one to three years.

    The FBR asked the persons having taxable income to file their annual return by September 30, 2019.

    Explaining the benefit of filing returns, the FBR said that the person filing the return within due date would be added to Active Taxpayers List (ATL).

    The advantage of inclusion into ATL, the return filer within the due date will not pay 100 percent increase in withholding tax.

    The FBR further said that the late filing of return i.e. beyond September 30 will attract fine and penalty as well.

    It said that the return filing has been made easier for salaried persons. The salaried persons may file their income tax returns through their smart phones by downloading TaxAssan application.

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    FBR urges taxpayers for return filing by due date to get ATL status

  • Inland Revenue offices to remain open till midnight on Sept 30 for tax collection

    Inland Revenue offices to remain open till midnight on Sept 30 for tax collection

    ISLAMABAD: All the offices of Inland Revenue will remain open till 12:00 midnight on September 30, 2019 for the collection of duty and taxes and facilitate income tax return filing.

    The Federal Board of Revenue (FBR) on Thursday issued an office order directing all the chief commissioners of Large Taxpayers Units (LTUs)/Regional Tax Offices (RTOs) and Corporate RTOs to observe extended working hours till 12:00 midnight on Monday September 30, 2019 to facilitate the taxpayers in payment of duties and taxes and filing of income tax returns and statements.

    The chief commissioners have also been asked to establish liaison with State Bank of Pakistan (SBP) and authorized branches of National Bank of Pakistan to ensure transfer of tax collection by these branches on September 30, 2019 to the respective branches of SBP on the same date.

  • FBR urges taxpayers for return filing by due date to get ATL status

    FBR urges taxpayers for return filing by due date to get ATL status

    KARACHI: Federal Board of Revenue (FBR) on Thursday urged individuals/companies to file their annual returns by due date in order to get their names into Active Taxpayers List (ATL).

    According to recent changes to Income Tax Ordinance, 2001 only return filers by due date are eligible to get their names into the ATL. The last date for filing income tax returns for tax year 2019 is September 30, 2019 for all taxpayers, other than companies having financial year between July to June.

    The FBR said that the following are liable to submit income tax return:

    — All registered taxpayers having National Tax Number (NTN).

    — Anyone charged to tax in the last two years.

    — Persons (salaried, businessmen and others) with annual income of Rs400,000 or more.

    — All companies (whose tax period ends between July 1 to December 31).

    — Owners of Land (500 square yards or more) or flat within municipal limits, cantonment or Islamabad Capital Territory.

    — Owners of Land (500 square yard or more) or flat (with covered area of 2000 square feet or more) in urban area.

    — Commercial or industrial electricity connection holders with annual bill over Rs0.5 million.

    — Owners of vehicles (1,000CC and above)

    — Welfare institutions or Non-Profit Organizations (NPOs) defined in Section 2(36) of Income Tax Ordinance, 2001.

    — Members of Chambers of Commerce and Industry or any trade or business association of any market committee or any professional body.

    –Resident individuals with foreign income of US $ 10,000 or more/having foreign assets of US$100,000 ore more.

    The FBR said that in order to facilitate salaried persons it had already launched a mobile phone application. The salaried persons can file their returns through mobile application in few easy steps.

  • Transfer of funds through misdeclaration included into punishable offences

    Transfer of funds through misdeclaration included into punishable offences

    KARACHI: Federal Board of Revenue (FBR) has included illegal transfer of funds through mis-declaration into the list of punishable offences.

    The FBR issued Customs Act, 1969 updated June 30, 2019 incorporating changes brought through Finance Act, 2019.

    The customs officials said that a new section 32C was introduced to Customs Act, 1969 through Finance Act, 2019 for including misdeclaration of value for illegal transfer of funds into or out of Pakistan as punishable offence under the customs law.

    Section 32C: Mis-declaration of Value for illegal transfer of funds into or out of Pakistan.

    (1) Without prejudice to any action that may be taken under this Act or any other law for the time being in force, if any person overstates the value of imported goods or understates the value of exported goods or vice versa, or using other means including short-shipment, over-shipment, with a view to illegally transferring funds into or out of Pakistan, such person shall be served with a notice to show cause within a period of two years from the date of detection of such mis-declaration as to why penal action shall not be initiated:

    Provided that if goods have not been cleared from customs, such goods shall also be liable to be seized:

    Provided further that a team consisting of Additional Collector, duly assisted by an expert in the relevant field and an officer of State Bank of Pakistan (SBP) as specified, shall submit a report in writing with evidence for the Chief Collector. The said report shall also be furnished to the SBP for action, if any, under the law regulated by SBP.

    (2) Any proceedings under this section, shall not be initiated, without the explicit approval of Board.

    The customs officials said that if any person commits offence under this section then such person shall be liable to penalty not exceeding two hundred thousand rupees or three times the value of goods in respect of which such offence is committed whichever is greater; and such goods shall be liable to confiscation.

    Further, upon conviction by a special judge the offender shall be liable to imprisonment for a term not exceeding five years and to a fine which may extend up to one million rupees.

  • Resident having foreign income above $10,000 required to file return, wealth statement

    Resident having foreign income above $10,000 required to file return, wealth statement

    KARACHI: A resident person having foreign income of above $10,000 is required to income tax return and wealth statement from tax year 2019 and onwards.

    According to officials of Federal Board of Revenue (FBR) the income tax return and wealth statement filing had been made mandatory for a Pakistani individual having foreign income above $10,000 or having foreign assets above $100,000.

    The officials said that the law was introduced through Finance Act, 2018 and from tax year 2019 such persons are required to file their income tax returns.

    Through Finance Act, 2018, Section 116A was inserted to Income Tax Ordinance, 2001, which stated:

    Section 116A: Foreign income and assets statement.

    (1) Every resident taxpayer being an individual having foreign income of not less than ten thousand United States dollars or having foreign assets with a value of not less than one hundred thousand United States dollars shall furnish a statement, hereinafter referred to as the foreign income and assets statement, in the prescribed form and verified in the prescribed manner giving particulars of—

    (a) the person’s total foreign assets and liabilities as on the last day of the tax year;

    (b) any foreign assets transferred by the person to any other person during the tax year and the consideration for the said transfer; and

    (c) complete particulars of foreign income, the expenditure derived during the tax year and the expenditure wholly and necessarily for the purposes of deriving the said income.

    (2) The Commissioner may by a notice in writing require any person being an individual who, in the opinion of the Commissioner on the basis of reasons to be recorded in writing, was required to furnish a foreign income and assets statement under sub-section (1) but who has failed to do so to furnish the foreign income and assets statement on the date specified in the notice.

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  • FATC Cell established at FBR Chairman office

    FATC Cell established at FBR Chairman office

    ISLAMABAD: A cell of Financial Action Task Force (FATF) has been established at the office of Chairman, Federal Board of Revenue (FBR) Headquarter, Islamabad to ensure timely completion of FATF related issues, a notification said on Wednesday.

    The FATF CELL will serve as focal point for all activities related to FBR’s compliance to FATF issues.

    The FATF Cell shall:

    i. Make periodical reports/papers/briefs for discussion in the FATF related meetings.

    ii. Coordinate with FATF Cell at Intelligence and Investigation (I&I) FBR, Islamabad and all other agencies related to FATF action plan.

    iii. Conduct research and compile reports for effective improvement of the FATF Cell working in FBR HQ.

    iv. Any other task assigned from time to time.

    The FBR further said that the following officers have been transferred / posted at FATF Cell with immediate effect and until further orders:

    01. Syed Asad Raza Rizvi, Pakistan Customs Service (PCS) BS-20 has been transferred to Chief, FATF Cell, FBR Headquarters, Islamabad from the post of Director, Directorate of Intelligence and Investigation-FBR, Multan.

    02. Muhammad Waqas Hanif, Inland Revenue IRS/BS-19 has been transferred and posted as Secretary, FATF Cell, FBR, HQ, Islamabad from the post of Additional Director, Directorate General of I&I, IR, Islamabad.

    03. Muhammad Asif (PCS/BS-19) has been transferred and posted as Secretary, FATF Cell, FBR, HQ, Islamabad from the post of Additional Director, FATF Cell, Directorate General of Intelligence and Investigation, FBR, Islamabd.

  • FBR detects huge gap in indirect revenue collection; launches sales tax, federal excise monitoring

    FBR detects huge gap in indirect revenue collection; launches sales tax, federal excise monitoring

    ISLAMABAD: Federal Board of Revenue (FBR) has launched monitoring of sales tax and federal excise duty following huge gap detected in indirect revenue collection.

    “There appear to be a big gap between actual collection of sales tax / federal excise and its true potential,” the FBR said in a communication sent to all Chief Commissioners of Inland Revenue.

    The FBR said that in order to bridge the gap numerous amendments were made in Sales Tax Act, 1990 and Federal Excise Act, 2005 through Finance Act, 2019.

    Now administrative measures are required to be strengthened / implement the policy corrections/

    The FBR directed the field formations to adopt the following steps in addition to their regular actions:

    01. Immediate action on non-files of July and August 2019, especially where the registered persons have filed their sales tax returns for the tax periods of May and June 2019. In addition, desk audit of the registered persons who filed returns for the month of July and August 2019 to be conducted especially those who were previously included in five reduced / zero rated sectors.

    02. Monitoring of registered persons paying sales tax under Eighth Schedule of the Sales Tax Act, 1990 especially in those cases where registered persons are supplying at reduced rate.

    03. Sectoral analysis/reports must be made by the field formations having jurisdiction over a specific sector, and these reports should be shared with the FBR as well as other field formations having jurisdiction over same sectors. Any success stories be identified.

    04. The registered persons dealing in third schedule items should be specifically monitored to ensure the sales tax is being paid on the retail price.

    05. Printing of retail price has to be ensured and price lists of all such products have to be obtained from the manufactured/importers filing in Third Schedule to compared with the printed prices of products supplied in market.

    06. Monitoring of stock position as on June 30, 2019 filed by the manufacturers/importers of goods which have been included in Third Schedule to ensure that supply is made and tax is charged on retail price.

    07. Timely filing of sales tax/federal excise returns along with all the annexure should be ensured. It has been observed that the registered persons do intentionally skip some annexures while filing the returns.

    08. Analysis of Annexure J showing the sale, production and stock must be at regular basis.

    09. Special focus should be made on those cases which have piled up massive carry forward and are only paying sales tax under Section 8B of the Sales Tax Act, 1990.

    10. FBR instructions / SOP for revision of the Sales Tax Returns should be followed in letter and spirit.

  • Late return filers may get ATL status after payment of surcharge

    Late return filers may get ATL status after payment of surcharge

    ISLAMABAD: Persons, who fail to file their income tax return by due date, may be included into the Active Taxpayers List (ATL) after payment of surcharge.

    Inclusion in ATL is mandatory to avail reduced rate of withholding tax. Through Finance Act, 2019 the rates of withholding tax have been increased 100 percent for those persons who have either failed to file annual return or filed return after due date.

    This means only those individuals or companies will get ATL status who filed their annual income tax returns by due date.

    The FBR said that a person’s name will be part of the current ATL, if the Tax Return filed pertains to the Tax year of the relevant ATL.

    For example, to be part of the ATL published on 1st March 2018, a person must have filed a Tax return for the Tax year 2017.

    Similarly, to be a part of the ATL published on 1st March 2019, a person must have filed a Tax Return for the Tax year 2018.

    Restriction on including a person’s name on ATL, if the person has not filed Tax Return by the due date specified by Income tax authorities was introduced through Finance Act, 2018.

    For example, to be part of the ATL published on 1st March 2019, a person must file a Tax Return by the specified due date for the Tax year 2018.

    However, through Finance Act, 2019 a person’s name can be part of ATL, even if the person has filed Tax Return after the due date specified by Income Tax authorities.

    Furthermore, a surcharge for placement on ATL after due date of filing of Tax Return will be charged as under:

    Company Rs20,000

    Association of Persons: Rs10,000

    Individuals: Rs1,000

    The FBR said a that company or an AOP shall be included in the ATL, whose return is not to be filed due to incorporation or formation after 30th day of June relevant to the Tax year pertaining to the ATL.

    Joint account holders as an entity shall be deemed to be part of ATL if any of the persons in the joint account have met the criteria of being included in the ATL.

    Bank account held in the name of a minor shall be considered part of ATL if the parents, guardians of the minor or any person who has deposited money in minor’s account are deemed to have met the criteria of being included in the ATL.

    The FBR said that the late filers of Income Tax Return for Tax Year 2018 can pay “Surcharge for ATL” as defined under section 182(A) of Income Tax Ordinance 2001 by clicking on Tax Payment Nature “Misc” head in the PSID.

    Only after the payment of surcharge will the name of the late filer become part of ATL.

  • FBR launches simplified wizard for income tax return filing

    FBR launches simplified wizard for income tax return filing

    KARACHI: Federal Board of Revenue (FBR) has introduced a simplified wizard based income tax return filing mechanism to its Tax Asaan mobile application.

    This feature will help taxpayer to proceed step by step utilizing interactive questions for return filing, even familiarizing the taxpayer with the various issues related to tax and giving the best possible experience to file IT Return.

    The FBR said that the wizard based solution takes care of Salaried Individual Income Tax Return for resident/non-Resident taxpayers.

    The mobile application enables the taxpayer to draft the return offline giving them freedom and flexibility to file their return at their own convenience anywhere and at any time however to perform calculations and in order to submit the IT Return, internet connectivity is required by the application.

    The FBR said that Tax Asaan is available for both Android and iOS platforms for free download and gets installed on one tap. Once installed, you can find the application icon under your mobile Apps list. Simply tap on the application icon to get started and view the home screen as shown below:

    Signing On

    “Income Tax Return’ module can only be used after successful login. Registered user can Sign-In to application by using their valid account credentials to file Income Tax Return.

    Following are the steps to login/Sign-In Tax Asaan mobile application:

    Click on the hamburger button provided on the top right corner of the home screen to view the main menu. The application will load a left panel with list of all available features along with the option to sign-in.

    Tap on “Sign in” option from the left panel to navigate to the Sign in screen as shown below:

    Enter “User Name” and “Password” then click on Login button to sign in as shown below:

    Please note that you will need to use Login ID and Password as that of Iris. If you are not registered with FBR on Iris then use Iris Web portal for New Registration.

    Income Tax Return

    On successful sign in, the registered user name will appear on left panel replacing the “Sign In” option along with the available option of “Income Tax Return” for the signed in user as shown below:

    User can reach Income Tax Return page either from click on “Income tax Return” menu option from the left panel or can directly click on “Income Tax Return” tile from main dashboard as shown below:

    Income Tax Return for Resident Pakistani Taxpayers
    After successful login to Tax Asaan mobile application, follow these easy steps to file Income Tax Return:

    Tap on Income Tax Return tab, Application will redirect user on Income Tax Return year selection page as shown below:

    Click on any of the provided Tax year options shown on the screen to file income tax return for the selected tax year. Application will mark the tax year selection by highlighting the tax year and will redirect user on resident status screen as shown below:

    Click on “Resident” (or “Non-Resident”) tile to select the desired category, application will load sources of income page as residence status selection as shown below:

    To enter data under relevant source of income click on desired source tile i.e. “I have salary” as shown below:

    [Please note that in case no source of income or to skip this step enable the check provided as “I don’t have any source of income” and click continue to move to next step.]

    As soon as taxpayer click on any of the provided source of income options, the application will redirect taxpayer on data entry page of selected source as shown below:

    Enter details in provided fields and click “Ok”, application will save provided data and redirect user back to source of income page. You can add data against multiple source of income by repeating the same process and selecting each source of income one by one. Once you add data under any source of income, the application will load edit and delete option to modify or remove the data entered under that category / source as shown below:

    To edit data added under the specific source of income click on edit button, the application will redirect taxpayer on edit source of income information page. Similarly you can edit or delete specific records under the source by using the edit option provided in front of each record added as shown below:

    To delete all information under a specific source of income click on delete button as shown below, the application will remove all records added under the selected source.

    [Please note that the system will not show edit/delete buttons for a source if there is NO record added under the selected category.]

    After adding all information for the source of income click on “continue” button to move on next step for return filing as shown below:

    [Please note that you can go back to previous step i.e. source of income page by using back button.]

    Next step after adding source of income is to add Tax deductions. Click on desired option to enter tax deductions detail as shown below:

    Application will redirect user on details page of selected tax deduction option i.e. Vehicle Token as shown below:

    Add details of tax deduction under selected option. You can click on “Add Another” button to add multiple records. After adding details click on “Back” button to go back to the tax deductions main page. You can add data against multiple tax deduction options by repeating the same steps. you can click on “Save and Back” button to move back to Tax Deductions page.

    After adding all details under tax deductions, click on “Continue” button to move on to the next step for filing tax return as shown below:

    Application will redirect user on “Wealth Statement” page as shown below:

    Tap on Assets icon, Application will redirect the tax payer to Assets Declaration page as shown below:

    Click on “Net Assets Previous Years” icon to enter net worth of your Assets for previous years, the application will open following page:

    Enter Net amount (in PKR) of previous year assets in provided field for Amount.

    Click on OK button to add the amount, the application will redirect taxpayer back to assets declaration screen.

    Edit and Delete buttons will now appear below “Net Assets Previous Years” icon as shown below:

    In order to edit the saved details click on Edit Button below Net Assets Previous Years icon the application will redirect tax payer to Edit Net Assets Previous Years page.

    Edit the amount as needed and to save the updates click on OK button.

    To cancel the updated details click on Cancel Button.

    To delete all the saved details click on Delete button below Net Assets Previous Years icon.

    Click on Inflows icon to enter net worth of your Assets for current year, the application will open following page:

    Enter Net amount (in PKR) of Inflows in Text field labelled Amount.

    Click on OK button to add the amount, the application will redirect taxpayer back to assets declaration screen.

    Just like “Assets” click on “Expenses” icon to add details of expenses as shown below:

    Application will redirect user on add expenses page. Add the total amount of expenses for the selected Tax year and click “OK” button to save the value as shown below:

    After adding details of Assets and expenses, click on Continue button to reconcile assets. Application will load reconciliation page as shown below:

    [Please note that if application load reconciliation error then click on back button to edit and correct assets record in order to remove error and process again.]

    On successful reconciliation, click on continue button to move to next step for filing return. Application will redirect user on declaration screen as shown below:

    Click on “Submit” button to submit return. Please note that once submitted, you will not be able to do any further modification in return. On successfully submitting return application will redirect user on return summary report with a success message as shown below:

    You can also view the summary at any stage (during Return preparation) by Clicking the icon.

    Income Tax Return for Non-Resident Pakistani Taxpayers

    To file Income Tax Return as Non-resident taxpayer, the process of return filing will remain same as of resident taxpayer. Only the tax payer has to select the option as “Non-resident” from the application screen after selection of Tax Year as shown below:

    [Please note the all steps of return filing are pre-configured and will appear accordingly as per user’s selected option.]

    View Income Tax Return Summary

    Tax payer can view the summary of all entered information in income tax return at any time or step during the return filing process. To view return summary, click on the expand options icon on top left corner of the screen as shown below:

    Attach Payments

    In case the taxpayer has some income tax due i.e. payable at the time of reconciling Assets, then application will redirect user on “Attach Payments” screen before submitting the return as shown below:

    Taxpayer can attach multiple CPRs against the due amount however application will only allow taxpayer to submit return after attaching CPRs equivalent or greater than the due tax amount.

    Special Instructions for ERROR Correction

    In case user is unable to view all menu options in left panel or only “Sign In” option is listed in left panel then there must be some issue with the internet connectivity. To resolve this error, check internet connectivity and Close and Re-Run Tax Asaan mobile application.

    Reporting

    This system does not support any reporting capability right now however users can only view information specific to provided NTN/Registration Numbers as per available inquiry features in Tax Asaan mobile application.

  • Income tax return filing must for person owns above 1000CC motor vehicle

    Income tax return filing must for person owns above 1000CC motor vehicle

    KARACHI: A person owns a motor vehicles having engine capacity above 1000CC is mandatorily required to filing of income tax return for tax year 2019.

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