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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 directs withholding agents to clearly mention CNIC of non-ATL persons

    FBR directs withholding agents to clearly mention CNIC of non-ATL persons

    KARACHI: Withholding agents have been directed to clearly mention the Computerized Identity Card Number (CNIC) of persons whose amounts have been withheld under various transactions.

    The withholding agents have been directed to provide CNIC particularly those persons who are not appearing on the Act Taxpayers List (ATL).

    Sources in Federal Board of Revenue (FBR) said that withholding agents will submit biannual statement related to transactions for the period July – December 2019 during this month.

    The FBR officials said that the withholding agents will clearly specify the names, CNIC or any other identification of such persons in the withholding statement so that legal provisions to enforce return can come into effect.

    Where a withholding agent is of the opinion that hundred percent increased tax is not required to be collected on the basis that the person was not required to file return, the withholding agent shall furnish an intimation to the Commissioner setting out the basis on which the person is not required to file return.

    The Commissioner shall accept or reject the contention on the basis of existing law. In case the Commissioner fails to respond within thirty days, permission shall be deemed to be granted to not deduct tax at hundred percent increased rate.

    Where the person’s tax has been deducted or collected at hundred percent increased rate and the person fails to file return of income for the year for which tax was deducted, the Commissioner shall make a provisional assessment within sixty days of the due date for filing of return by imputing income so that tax on imputed income is equal to the hundred percent increased tax deducted or collected from such person and the imputed income shall be treated as concealed income.

    The provisional assessment shall be of no effect if the person files return within forty five days of completion of provisional assessment and the provisions of the Ordinance shall apply accordingly.

    Where return is not filed within forty five days of provisional assessment, it shall be treated as final assessment and the Commissioner shall initiate penalty proceedings for concealment of income.

  • Income tax return filing hits new record high

    Income tax return filing hits new record high

    KARACHI: Income tax return filing has increased to a new record high of 2.76 million as people making compliance to avoid 100 percent additional tax on persons not appearing on Active Taxpayers List (ATL).

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  • Uniform income tax rate applied on dividend income

    Uniform income tax rate applied on dividend income

    ISLAMABAD: The income tax rates on dividend income on various shares of companies have been increased to make an uniform rate applicable for tax year 2020 and onwards.

    Sources in Federal Board of Revenue (FBR) said that the various rates of dividend rates had been uniformed at 15 percent.

    Prior to budget 2019/2020 dividend income is not part of income under normal tax regime and is subject to separate taxation. The standard rate of tax on dividend income is now 15 percent.

    The previous tax rate of 7.5 percent on dividend received on shares of a company set up for power generation or on shares of a company supplying coal exclusively to power generation projects has been increased to 15 percent.

    Further, tax rate of dividend which was charged at 25 percent for persons receiving dividend from companies which enjoy exemption of tax on income or where no tax is payable due to availability of tax credits or due to brought forward business or depreciation losses.

    Previously the rate of tax on dividend received by a person from a mutual fund was 10 percent and 12.5 percent. Persons those were receiving dividend from stock fund is also taxed 12.5 percent.

    Furthermore dividend received by a person from a development REIT scheme was reduced by 50 percent of the normal rate.

    Now all these rates are being enhanced to 15 percent, the FBR said.

    For withholding tax on dividend also a standard rate of 15 percent is being applied for persons receiving income.

  • FBR upgrades data entry operators to BS-14

    FBR upgrades data entry operators to BS-14

    ISLAMABAD: Federal Board of Revenue (FBR) has upgraded the post of Data Entry Operators (DEOs) to BS-14 from BS-12 following the approval of the finance ministry.

    The FBR on Tuesday issued an office order stating that in pursuance of Finance Division letter dated December 17, 2019 wherein to standardize the pay scale of DEOs the Finance Division had given concurrence to the upgradation of the post of Data Entry Operators from BS-12 to BS-14 under the federal government as per NOC contained in Establishment Division letter dated September 23, 2019; the post of DEOs of Inland Revenue Department in the field formations and FBR Headquarters stands upgraded to BS-14.

    The competent authority is pleased to appoint all incumbent DEOs (BS-12) to the upgraded post of DEO (BS-14) with effect from December 17, 2019.

  • FBR to impose penalty for not printing retail price on imported goods

    FBR to impose penalty for not printing retail price on imported goods

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday said that printing of retail price on imported consumer items is mandatory and any violation by importer/manufacturer will attract fine and penalty.

    Through recent Tax Laws (Second Amendment) Ordinance, 2019, penalty has been introduced for importers and manufacturers violating the provision of printing retail price.

    The FBR said that it had received queries from various Customs Clearing Agents and Customs Collectorates regarding application of newly inserted Serial No.26 in Section33 of the Sales Tax Act, 1990, related to penalty.

    In this regard it is clarified that at import stage the mechanism of clearing of goods already defined in STGO 103 of 2019 is to be followed.

    The STGO recognizes that in some situations, the printing of retail price is not possible and allows clearance of goods on payment of Sales Tax in the manner as provided therein subject to furnishing of an undertaking that the retail price shall be duly printed.

    Therefore, the provisions of the STGO be followed by the Customs Authorities.

    However, the aforesaid undertaking shall mention that the importer shall print the retail price within ten days of release/clearance of the consignment and intimate the Commissioner concerned for inspection before further supply.

    However, if inspection is not made within ten days after intimation the importer/manufacturer will be free to supply in the market.

    The newly inserted penal provisions shall be invoked if the manufacturer/importer violates the undertaking or is otherwise non-compliant with requirement of retail price taxation.

  • LTU Karachi collects Rs688 billion in first half

    LTU Karachi collects Rs688 billion in first half

    KARACHI: Large Taxpayers Unit (LTU) Karachi has collected Rs688 billion during first six months (July – December) of 2019/2020 as against Rs598 billion in the corresponding period of the last fiscal year, showing 15 percent growth, a statement said on Tuesday.

    So far as December 2019 is concerned, LTU Karachi collected Rs160 billion as compared with Rs144 billion in the same month of the last year.

    The rise in collection has been attributed to various tax facilitation and enforcement projects during the last six months by the LTU Karachi.

    The unit issued Rs17.8 billion as sales tax refunds during the period in order to effectively address liquidity problems of the manufacturing sector.

    In ongoing Broadening of Tax Base (BTB), the LTU Karachi retrieved data of unregistered commercial and industrial gas consumers and shared with the territorial regional tax offices for issuance of notices and registering the non-filers on income tax returns. This effort resulted in substantial increase in return filers.

    The statement said that pursuing proactive policy of Federal Board of Revenue (FBR), various steps had been taken for the purpose of early disposal of litigation cases pending with the courts. On this account, senior officers have been specifically deployed for assistance of the High Court of Sindh for early disposal of cases.

    The LTU Karachi said that strong enforcement as well as on site monitoring of production had been steadily reinforced and the exercise had brought growth in revenue especially in sugar and cement sectors.

    The unit further said that strong internal accountability mechanism had been strengthened at Chief Commissioner Secretariat, whereby activities of officers and staff were being personally monitored by the Chief Commissioner himself.

    All major taxpayers of LTU Karachi were actively engaged and appreciated for their substantial revenue contribution. In order to educate and enlighten the taxpayers regarding new tax measures and procedures, numerous taxpayer education and facilitation seminars were held during this period.

    These endeavors brought significant improvement in taxpayer’s voluntary compliance besides creating congenial atmosphere between taxpayers and tax collectors.

  • Profit on debt above Rs36 million to be treated as normal tax

    Profit on debt above Rs36 million to be treated as normal tax

    KARACHI: The rate of tax on profit on debt above Rs36 million shall be treated as normal tax rate, tax officials said on Tuesday.

    Sources in Federal Board of Revenue (FBR) said that the tax rates were revised through Finance Act, 2019.

    The revised tax rates for profit on debt not exceeding Rs 5 million have be increased from 10 percent to 15 percent, between Rs5 million and Rs25 million tax rates have been increased from 12.5 percent to 17.5 percent and from Rs25 million to Rs36 million tax rates are being increased from 15 percent to 20 percent.

    The rate of advance withholding tax on payment of profit on debt has also been enhanced from 10 percent to 15 percent.

    Furthermore, the separate rates mentioned above would be applicable for profit on debt up to Rs.36 million and for amounts exceeding Rs36 million the profit on debt will be made part of the total income and taxed at normal rates.

    Previously the profit on debt is taxed separately and is not part of the income in normal tax regime.

    The tax rates were 10 percent, 12.5 percent and 15 percent for slabs up to five million rupees, between five million to twenty five million rupees and above twenty five million rupees, respectively.

    The FBR sources said that due to changes the tax collection under this head registered phenomenal growth during first six months of current fiscal year. The sources estimated that the collection from profit on debt had been increased by around 150 percent during July – December of 2019/2020.

    The sources said that persons not appearing on Active Taxpayers List (ATL) are also liable to pay around 30 percent as withholding tax.

    The FBR collects profit on debt under Section 7B and Section 151 of Income Tax Ordinance, 2001.

    The sources said that high interest rates attracted investment towards deposits of banking system. This factor has also contributed the high growth of tax from profit on debt.

  • Determination of fair market value explained

    Determination of fair market value explained

    KARACHI: The fair market value of assets shall be the value of property in open market at the time of purchase, sources in Federal Board of Revenue (FBR) said.

    The FBR sources said that Section 68 of Income Tax Ordinance, 2001 explained the methodology for determining the fair market value.

    Section 68: Fair market value

    Sub-Section (1): For the purposes of this Ordinance, the fair market value of any property or rent, asset, service, benefit or perquisite at a particular time shall be the price which the property 2[or rent], asset, service, benefit or perquisite would ordinarily fetch on sale or supply in the open market at that time.

    Sub-Section (2): The fair market value of any property or rent, asset, service, benefit or perquisite shall be determined without regard to any restriction on transfer or to the fact that it is not otherwise convertible to cash.

    Sub-Section (3): Where the price “other than the price of immoveable property” referred to in sub-section (1) is not ordinarily ascertainable, such price may be determined by the Commissioner.

    Sub-Section (4): Notwithstanding anything contained in sub-sections (1) and (3), the Board may, from time to time, by notification in the official Gazette, determine the fair market value of immovable property of the area or areas as may be specified in the notification.

    Sub-Section (5): Where the fair market value of any immovable property of an area or areas has not been determined by the Board in the notification referred to in sub-section (4), the fair market value of such immovable property shall be deemed to be the value fixed by the District Officer (Revenue) or provincial or any other authority authorized in this behalf for the purposes of stamp duty.

    (6) In respect of immovable property—

    (i) component A of the formula in sub-section (2) of section 37;

    (ii) consideration received as mentioned in Division X of Part IV of First Schedule;

    (iii) value of immovable property as mentioned in Divisions XVIII of Part IV of the First Schedule; and

    (iv) valuation for the purposes of section 111,shall not be less than the fair market value as determined under sub-section (4) or (5).

    Explanation.—(1)For the removal of doubt, it is clarified that the fair market value as determined under sub-section (4) or(5) shall be for carrying out the purposes of this Ordinance only.

    (2) It is further clarified that for the purposes of clauses (i) to (iv) of this sub-section if the fair market value determined under sub-section (4) or (5) is different than the auction price the applicable price shall be the higher of the two.

  • Another key FBR official granted 12-day leave

    Another key FBR official granted 12-day leave

    The Federal Board of Revenue (FBR) is once again in the spotlight as another key official, Ms. Seema Shakil, a BS-21 officer of Inland Revenue Service, has been granted a 12-day leave.

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  • No rift in economic team: FBR

    No rift in economic team: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) has strongly rebuffed the reports about rifts in government economy team and due to this the chairman of the revenue authority is on leave.

    The FBR in a statement on Monday said that FBR chairman Shabbar Zaidi is on a two weeks leave which is going to end this Friday.

    He is likely to resume office on Monday and his first day business will include Prime Ministers interaction with all Pakistan traders.

    The leave of Chairman FBR was necessisated by his annual medical check up in Karachi and some family commitments.

    The Chairman as a part of economic team of the prime minister enjoys full confidence of the Prime Minister and his Advisor on Finance.

    “Any rumours of any sort of rift in the economic team are utterly incorrect,” the FBR said.