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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 to impose penalty on withholding agent for not submitting taxpayers’ information

    FBR to impose penalty on withholding agent for not submitting taxpayers’ information

    ISLAMABAD: Federal Board of Revenue (FBR) will impose penalty on withholding agents for failure in submitting withholding statement or information of taxpayers for the period July – December 2019.

    The last day for filing withholding statement electronically was January 31, 2020. Most of the withholding agents had filed the statements as per requirement. However, some of them are still non-compliant and will be liable to fine and penalty, FBR sources said on Monday.

    As per Section 182 of Income Tax Ordinance, 2001, where any person fails to furnish a statement as required under Section 115, 165, 165A of 165B within the due date. “Such person shall pay a penalty of Rs5,000 if the person had already paid the tax collected or withheld by him within the due date for payment and the statement is filed within 90 days from the due date for filing the statement and, in all other cases, a penalty of Rs2,500 for each day of default from the due date subject to a minimum penalty of Rs10,000.”

    The FBR officials said that under Section 165 of the Income Tax Ordinance, 2001, every person collecting tax or deducting tax from a payment shall furnish to the commission a biannual statement in the prescribed form setting out:

    (a) the name, Computerized National Identity Card Number, National Tax Number and address of each person from whom tax has been collected under Division II of this Part or Chapter XII or the Tenth Schedule or to whom payments have been made from which tax has been deducted under Division III of this Part or Chapter XII or the Tenth Schedule in each half-year

    (b) the total amount of payments made to a person from which tax has been deducted under Division III of this Part or Chapter XII or the Tenth Schedule in each half-year

    (c) the total amount of tax collected from a person under Division II of this Part or Chapter XII or the Tenth Schedule or deducted from payments made to a person under Division III of this Part or Chapter XII or the Tenth Schedule in each half-year; and

    (d) such other particulars as may be prescribed:

    Provided that every person as provided in sub-section (1) shall be required to file withholding statement even where no withholding tax is collected or deducted during the period.

    Explanation.— For the removal of doubt, it is clarified that this sub-section overrides all conflicting provisions contained in the Protection of Economic Reforms Act, 1992 (XII of 1992), the Banking Companies Ordinance, 1962 (LVII of 1962), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the regulations made under the State Bank of Pakistan Act, 1956 (XXXIII of 1956), if any, on the subject, in so far as divulgence of information under section 165 is concerned.

    (2) Every prescribed person collecting tax under Division II of this Part or Chapter Xll or the Tenth Schedule or deducting tax under Division III of this Part of Chapter Xll or the Tenth Schedule shall furnish statements under sub-section (l) as per the following schedule, namely:-

    (a) in respect of the half-year ending on the 30th June, on or before the 31st day of July; and

    (b) in respect of the half-year ending on the 31st December, on or before the 31st day of January.

    (2A) Any person who, having furnished statement under sub-section (1) or sub-section (2), discovers any omission or wrong statement therein, may file a revised statement within sixty days of filing of statement under sub-section (1) or sub-section (2), as the case may be.

    (2B) Notwithstanding anything contained in this section, the Commissioner as he deems lit may by notice in writing require any person, collecting or deducting tax under this Ordinance, to furnish a statement for any period specified in the notice within such period of time as may be specified in the notice.

    (3) Board may prescribe a statement requiring any person to furnish information in respect of any transactions in the prescribed form and verified in the prescribed manner.

    (4) A person required to furnish a statement under sub-section (1), may apply in writing, to the Commissioner for an extension of time to furnish the statement after the due date and the Commissioner if satisfied that a reasonable cause exists for non-furnishing of the statement by the due date may, by an order in writing, grant the applicant an extension of time to furnish the statement.

    (5) The Board may make rules relating to electronic furnishing of statements under this section including,-

    (a) mandatory electronic filing of statements; and

    (b) determination of eligibility of the data of such statements and e-intermediaries, etc.

    (6) Every person deducting tax from payment under section 149 shall furnish to the Commissioner an annual statement in the prescribed form and manner.

  • Criminal proceedings to be initiated for taking bribe

    Criminal proceedings to be initiated for taking bribe

    KARACHI: Federal Board of Revenue (FBR) is determined to eliminate corrupt practices in the official matters in Inland Revenue and Pakistan Customs and decided to take action against officials taking bribe or financial benefits for giving favor someone.

    FBR officials told PkRevenue.com that vigilance teams of tax authorities were observing the day to day affairs of field offices and also examining complaints against tax officials regarding their workings.

    In order to effectively check misuse of authority to gain financial benefit, new provisions have been introduced through Finance Act, 2019 in all the relevant statutes to prescribe rules for initiating criminal proceedings against officers and officials of the FBR who deliberately commit acts or fail to act for personal benefits.

    Similar action would also be taken against persons who offer bribes or other financial benefits to the tax employees, the sources said.

    The laws have been introduced through Section 156A Customs Act, 1969, Section 33A Sales Tax Act, 1990 and Section 216A Income Tax Ordinance, 2001 for taking against corrupt practices of officials.

    Under Section 216A of Income Tax Ordinance, Proceedings against authority and persons shall be taken as under.

    (1) Subject to section 227, the Board shall prescribe rules for initiating criminal proceedings against any authority mentioned in section 207 and officer of the Directorates General mentioned in Part II and Part III of Chapter XI including any person subordinate to the aforesaid authorities or officers of the

    Directorates General who willfully and deliberately commits or omits an act which results in undue benefit or advantage to the authority or the officer or official or to any other person.

    (2) Where proceedings under sub-section (1) have been initiated against the authority or officer or official, the Board shall simultaneously intimate the relevant Government agency to initiate criminal proceedings against the person referred to in sub-section (1).

    (3) The proceedings under this section shall be without prejudice to any other liability that the authority or officer or official or the person may incur under any other law for the time being in force.

  • Tax collection from salary of executives, directors jumps up by 85%

    Tax collection from salary of executives, directors jumps up by 85%

    KARACHI: The collection of income tax has registered sharp growth of 85 percent on salary received by executives/directors of companies.

    The unprecedented growth has been witnessed due to changes in salary tax slabs introduced through Finance Act, 2019.

    The collection of income tax has increased to Rs3.1 billion during first seven months (July – January) 2019/2020 as compared with Rs1.667 billion in the same period of the last fiscal year.

    Sources in Large Taxpayers Unit (LTU) Karachi, a collecting office of Federal Board of Revenue (FBR), said that the higher tax rates on the salary income received by executives and directors of companies revised through the Finance Act, 2019 resulted in improved tax revenue under this head.

    They said that the tax slab was increased to 35 percent on the salary income above Rs75 million.

    The tax officials also attributed the increase in tax revenue to effective monitoring and audit of executives /directors of companies.

    They said that previously directors of companies avoid taxes by taking advantage of tax laws.

    The salary income has been explained in section 12 of Income Tax Ordinance, 2001.

    Salary.— (1) Any salary received by an employee in a tax year, other than salary that is exempt from tax under this Ordinance, shall be chargeable to tax in that year under the head “Salary”.

    (2) Salary means any amount received by an employee from any employment, whether of a revenue or capital nature, including —

    (a) any pay, wages or other remuneration provided to an employee, including leave pay, payment in lieu of leave, overtime payment, bonus, commission, fees, gratuity or work condition supplements (such as for unpleasant or dangerous working conditions);

    (b) any perquisite, whether convertible to money or not;

    (c) the amount of any allowance provided by an employer to an employee including a cost of living, subsistence, rent, utilities, education, entertainment or travel allowance, but shall not include any allowance solely expended in the performance of the employee’s duties of employment;

    (d) the amount of any expenditure incurred by an employee that is paid or reimbursed by the employer, other than expenditure incurred on behalf of the employer in the performance of the employee’s duties of employment;

    (e) the amount of any profits in lieu of, or in addition to, salary or wages, including any amount received —

    (i) as consideration for a person’s agreement to enter into an employment relationship;

    (ii) as consideration for an employee’s agreement to any conditions of employment or any changes to the employee’s conditions of employment;

    (iii) on termination of employment, whether paid voluntarily or under an agreement, including any compensation for redundancy or loss of employment and golden handshake payments;

    (iv) from a provident or other fund, to the extent to which the amount is not a repayment of contributions made by the employee to the fund in respect of which the employee was not entitled to a deduction; and

    (v) as consideration for an employee’s agreement to a restrictive covenant in respect of any past, present or prospective employment;

    (f) any pension or annuity, or any supplement to a pension or annuity; and

    (g) any amount chargeable to tax as “Salary” under section 14.

    (3) Where an employer agrees to pay the tax chargeable on an employee’s salary, the amount of the employee’s income chargeable under the head “Salary” shall be grossed up by the amount of tax payable by the employer.

    (4) No deduction shall be allowed for any expenditure incurred by an employee in deriving amounts chargeable to tax under the head “Salary”.

    (5) For the purposes of this Ordinance, an amount or perquisite shall be treated as received by an employee from any employment regardless of whether the amount or perquisite is paid or provided —

    (a) by the employee’s employer, an associate of the employer, or by a third party under an arrangement with the employer or an associate of the employer;

    (b) by a past employer or a prospective employer; or

    (c) to the employee or to an associate of the employee or to a third party under an agreement with the employee or an associate of the employee.

  • FBR organizes event to aware people about POS

    FBR organizes event to aware people about POS

    LAHORE: Federal Board of Revenue (FBR) has organized an event at Packages Mall, Lahore to create awareness among people about the Point of Sale (Linked Invoicing System) of FBR, a statement said on Saturday.

    The objective of this event was to apprise the people and the retailers about the installation and utility of Point of Sales (POS) machines at big retail outlets.

    Designated officers of FBR HQ led by Chief, Facilitation & Taxpayers Education Tehmina Aamer and included Secretary FATE Alam Zaib Khan and Secretary PR Adnan Akram Bajwa participated in the program.

    Lot of people showed keen interest in the activities of the program and appreciated the steps taken by FBR on Point of Sales (Linked Invoicing System).

    The people were informed as to how they could verify about their paid taxes through Tax Aasaan application. The retailers were convinced to get their businesses linked with Point of Sales Linked Invoicing system. The flyers containing information about Point of Sales and gifts were distributed to the people on the occasion.

  • FBR amends guidelines for performance allowance of BS-01-14 tax officials

    FBR amends guidelines for performance allowance of BS-01-14 tax officials

    KARACHI: Federal Board of Revenue (FBR) has delegated powers to head of respective field formations of approving performance allowance of BS-1 to BS-14.

    The FBR issued Circular No. 01/2020 dated February 06, 2020 and modified Guidelines for Performance Allowance -2015.

    The following amendment has been made to the Guidelines for Performance Allowance-2015 with immediate effect:

    “The power to process and finalize selection of officials of BS-1 to BS-14 for IJP Performance Allowance of officials is delegated to the respective heads of field formations. However, all the cases of litigation and arrears demand shall continue to be dealt at FBR HQ by the respective Wing.”

    The FBR said that in the light of above decision of the Board-In-Council’s meeting held on January 24, 2020, the IJP selection process and finalization of IJP cases with respect to BS-01-14 employees of field formations will rest with concerned field formation.

    Under the approval of respective head of field office such cases shall be processed and finalized keeping in view Guidelines for Performance Allowance -2015 under intimation to the board.

  • Educational institutions share information of persons paying annual fee above Rs200,000

    Educational institutions share information of persons paying annual fee above Rs200,000

    KARACHI: Educational institutions have provided details of persons paying over Rs200,000 annual fee to Federal Board of Revenue (FBR).

    Sources in the FBR said that the educational institutions had provided the details of persons paying annual fee of above Rs200,000 along with the withholding tax statement for the period July – December 2019.

    They said that the educational institutions are required to provide details of persons paying fees including their names, address, CNIC and amount tax withheld.

    The sources said that being withholding agents the educational institutions are required to file withholding statements biannually. The withholding statement for the period July – December 2019/2020 was due on January 31, 2020.

    The educational institutions are required to withholding tax under Section 236I of Income Tax Ordinance, 2001.

    Section 236I: Collection of advance tax by educational institutions.

    (1) There shall be collected advance tax at the rate specified in Division XVI of Part-IV of the First Schedule i.e. five percent on the amount of fee paid to an educational institution.

    (2) The person preparing fee voucher or challan shall charge advance tax under sub-section (1) in the manner the fee is charged.

    (3) Advance tax under this section shall not be collected from a person on an amount which is paid by way of scholarship or where annual fee does not exceed two hundred thousand rupees.

    (4) The term “fee” includes, tuition fee and all charges received by the educational institution, by whatever name called, excluding the amount which is refundable.

    (5) Tax collected under this section shall be adjustable against the tax liability of either of the parents or guardian making payment of the fee.

    (6) Advance tax under this section shall not be collected from a person who is a non-resident and,—

    (i) furnishes copy of passport as an evidence to the educational institution that during previous tax year, his stay in Pakistan was less than one hundred eighty-three days;

    (ii) furnishes a certificate that he has no Pakistan-source income; and

    (iii) the fee is remitted directly from abroad through normal banking channels to the bank account of the educational institution.”

  • Tax payable reduced to half on income from low cost housing projects

    Tax payable reduced to half on income from low cost housing projects

    KARACHI: The Federal Board of Revenue (FBR) has announced a significant tax incentive to promote affordable housing in Pakistan. According to official sources, the income tax on profits and gains earned by a person from low-cost housing projects shall be reduced by 50 percent.

    (more…)
  • Anti-Benami transactions rules notified as per law: FBR

    Anti-Benami transactions rules notified as per law: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday said that Benami Transactions (Prohibition) Rules, 2019 has been issued in accordance with the law.

    The FBR issued a rebuttal on a news item published in a daily on February 5, 2020 about the issuance of Benami Transactions (Prohibition) Rules, 2019.

    FBR has explained that Benami Transactions (Prohibition) Rules, 2019 under Benami Transactions (Prohibition), Act, 2017 were notified through SRO. 326(l)/2019 dated 11th March, 2019 by Dr. Hamid Ateeq Sarwar, Additional Secretary (IRS/BS-21 Officer).

    He is also holding the charge of Member (IR-Policy), FBR (HQ) since 4th December, 2018 vide FBR’s Notification No. 2236-IR-I/2018.

    It is further clarified that all the Members of FBR hold the ex-officio rank of Additional Secretary as per Establishment Division’s Notification dated March 18, 1987.

    It is pertinent to mention at the time of issuance of instant SRO Mohammad Jehanzeb Khan (BS-22 officer of PAS) was holding the charge of Chairman, FBR / Secretary Revenue Division.

    After final vetting of Benami Transactions (Prohibition), Rules 2019 by Law & Justice Division and approval of the same by Cabinet Committee for Disposal of Legislative Cases (CCLC), the Summary containing the Benami Transactions (Prohibition) Rules, 2019 was moved by Mohammad Jehanzeb Khan Chairman, FBR / Secretary Revenue Division for the approval of Federal Cabinet.

    The whole process of issuance of SRO and initiation of Summary for approval of Federal Cabinet is in legal conformity.

  • Shabbar Zaidi still chairman, to resume charge after leave: FBR

    Shabbar Zaidi still chairman, to resume charge after leave: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday said that Syed Shabbar Zaidi is still Chairman of the FBR but he is on leave.

    While clarifying new reports about the vacancy of office of Chairman, FBR, Dr. Hamid Ateeq Sarwar, Spokesperson for the FBR / Member (IR-Policy) clarified that Syed Muhammad Shabbar Zaidi, Chairman, FBR is on medical leave and he will assume the charge of Chairman, FBR as soon as he gets medically fit.

    However, the position of Chairman, FBR during the leave period of Syed Muhammad Shabbar Zaidi is not lying vacant and Ms. Nausheen Javaid Amjad (IRS/BS-22 Officer) is holding the Look After Charge of the Chairperson, FBR as notified by FBR’s Notification No. 0184-IR-I/2020 dated January 31, 2020.

  • FBR conducts audit of all refund cases

    FBR conducts audit of all refund cases

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday said that the tax machinery conducts audit of all refund cases.

    “It is baseless to assume that FBR does not conduct the scrutiny. The processing of the case may take time but it is certain that all refund cases are audited,” the FBR said.

    In this regard, the FBR issued a clarification on the news aired on electronic media about the issuance of fake refunds.

    FBR has explained that two processes are being used to deal with refund cases.

    The first is the processing of refunds through automated system for the exporters.

    In this process, the audit of the refund is conducted after the issuance of refunds.

    The other system of refund issuance has been devised for the taxpayers not associated with the export sector.

    The refunds issued through this mode are called the “carry forward refunds.” Such refunds are issued once in a year. The audit is conducted before the issuance of such refunds.

    FBR has clarified that taxpayers involved in presenting the wrong invoices are dealt strictly and recovery is made from them.

    Moreover, penalty and default surcharge is also imposed to curb this practice.

    Sometimes, the audit process of refunds takes longer period of time which may cause problem of liquidity for the exporter, in case of delayed issuance of refunds.

    To avert liquidity crunch for the businesses, the refunds are issued and the scrutiny is conducted afterwards.

    There are certain inbuilt checks within the system to match the input claim by one person with output claim by another person.

    To avoid revenue loss, FBR has almost resolved the issue of fake invoices. Sometimes, it becomes a little cumbersome and lengthy to check the flying invoices but the scrutiny is conducted in all the cases. FBR has computer analytics system of CREST.