An attempt by a businessman to suppress sales chargeable to tax in order to reduce tax liability shall be taxed under the head of income from business, according to the Finance Act 2020 recently passed by the National Assembly.
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Finance Act 2020: taxpayers given deadline of December 31 to update profile
ISLAMABAD: Federal Board of Revenue (FBR) has given taxpayers a deadline of December 31, 2020 to complete their profile through online system otherwise their name will be removed from active taxpayers list (ATL).
The National Assembly approved the new amendment of taxpayers profiling through new section 114A to Income Tax Ordinance, 2001.
Section 114A: Taxpayer’s profile:
Sub-section 1: Subject to this ordinance, the following persons shall furnish a profile, namely:
(a) Every person applying for registration under section 181;
(b) Every person deriving income chargeable to tax under the head, “income from business”;
(c) Every person whose income is subject to final taxation;
(d) Any non-profit organization as defined in clause (36) of Section 2;
(e) Any trust or welfare institution; or
(f) Any other person prescribed by the Board [FBR].
Sub-section 2: A taxpayer’s profit:-
(a) Shall be in the prescribed form and shall be accompanied by such annexures, statements or documents as may be prescribed;
(b) Shall fully state, in the specified form and manner, the relevant particulars of –
(i) Bank accounts;
(ii) Utility connections;
(iii) Business premises including all manufacturing, storage or retail outlets operated or leased by the taxpayer;
(iv) Types of businesses; and
(v) Such other information as may be prescribed;
(c) Shall be signed by the person being an individual, or the person’s representative where section 172 applies; and
(d) Shall be filed electronically on the web as prescribed by the Board [FBR].
Sub-section 3: A taxpayer’s profile shall be furnished:-
(a) On or before the 31st day of December 2020 in case of a person registered under Section 181 before the 30the day of September, 2020; and
(b) Within ninety days registration in case of a person not registered under section 181 before the 30th day of September,2020.
Sub-Section 4: A taxpayer’s profile shall be updated within ninety days of change in any of the relevant particulars of information as mentioned in clause (b) of sub-section (2).
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Nausheen Amjad removed from post of FBR chairperson
ISLAMABAD: The government on Saturday removed the chairperson of Federal Board of Revenue (FBR) Ms. Nausheen Javaid Amjad and assigned look after charge to another senior officer of Pakistan Customs Service (PCS) with immediate effect.
Ms. Nausheen Javaid Amjad was assigned the post of FBR chairperson on April 08, 2020 after the resignation of Syed Muhammad Shabbar Zaidi, who served as FBR Chairman from private sector during May 10, 2019 to April 08, 2020.
Sources said that the removal of Ms. Nausheen was linked to the tax profile of wife of Justice Qazi Faiz Essa. The sources said that Ms. Nausheen had not compromised the integrity of tax department.
The Establishment Division on Saturday issued a notification and assigned additional charge of the post of FBR Chairman to Muhammad Javed Ghani, a BS-22 officer of PCS, presently posted as Member, FBR, for a period of three months or till the posting /appointment of a regular incumbent, whichever is earlier, with immediate effect.
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FBR extends date for retail outlet integration up to August 31
ISLAMABAD: Federal Board of Revenue (FBR) on Friday extended date for retailers to integrate their Point of Sale (POS) up to August 31, 2020.
The last date for integrating the POS for Tier-1 retailers was June 30, 2020.
The FBR said that only those retailers can integrate their POS by August 31 who submit their intention to RTOs/LTUs by August 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.
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. However, the date was extended in order to give opportunity to big retailers to make compliance.
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.
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Finance Act 2020: Commissioner empowered to cancel exemption certificate
ISLAMABAD: A commissioner of Inland Revenue has been authorized to cancel or modify exemption certificate issued automatically by online system IRIS.
Through Finance Act, 2020 amendment has been made to Section 153 of Income Tax Ordinance, 2001.
As per the amendment the commissioner of Inland Revenue of Federal Board of Revenue (FBR) is required to issue certificate to taxpayer within prescribed time frame. However, if application is filed by taxpayer and commissioner fails to take action than the IRIS will automatically issue certificate to the taxpayer.
However, the commissioner is empowered to modify or cancel the certificate on reasonable ground.
The amendment in this regard is as:
“Provided that the Commissioner shall issue certificate for payment under clause (a) of sub-section (1) without deduction of tax within fifteen days of filing of application to a public company listed on a registered stock exchange in Pakistan if advance tax liability has been discharged.
“Provided further that the Commissioner shall be deemed to have issued the exemption certificate upon the expiry of fifteen days to the aforesaid public listed company and the certificate shall be automatically processed and issued by Iris:
“Provided also that the Commissioner may modify or cancel the certificate issued automatically by IRIS on the basis of reasons to be recorded in writing after providing an opportunity of being heard.”
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FBR exempts customs duty on oxygen gas, cylinder import
In response to the ongoing COVID-19 pandemic, the Federal Board of Revenue (FBR) announced on Wednesday an exemption from customs duty on the import of oxygen gas and oxygen gas cylinders. This measure aims to ensure the availability of these essential supplies as the country battles the spread of the virus.
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Security forces to provide monthly details of confiscated smuggled goods to FBR
ISLAMABAD: Security forces engaged in anti-smuggling activities to submit monthly seizure report to Federal Board of Revenue (FBR).
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FBR imposes up to seven percent additional customs duty
ISLAMABAD: Federal Board of Revenue (FBR) has started preparation for achieving revenue collection target for fiscal year 2020/2021 as it massively increased additional customs duty up to 7 percent from July 01, 2020.
The FBR issued SRO 572(I)/2020 on Tuesday for levying additional customs duty at different rates of two percent, four percent and seven percent.
The FBR provisionally collected Rs3.957 trillion for fiscal year 2019/2020. As per budget documents the FBR has been assigned to collect Rs4,963 billion during the fiscal year 2020/2021, which is around 25 percent higher than collection of fiscal year 2019/2020..
The government while presenting the budget 2020/2021 had claimed that the budget was tax free and it had not levied any duty and tax in order to provide relief to the masses amid outbreak of coronavirus.
However, as per the notification additional customs duty at two percent has been imposed on goods imported under tariff slabs of zero percent, three percent and 11 percent.
Another rate of four percent additional customs duty has been levied on goods imported under tariff slab of 16 percent.
While the rate additional customs duty at seven percent has been applied on goods imported under tariff slab of 20 percent and above.
However, import of edible crude oil which are subject to import at higher tariff slab, the additional customs duty shall be charged at the rate of two percent, the FBR said.
The FBR further said that additional customs duty would not be applicable on the goods imported under concessionary regime for exporters.
Further, the additional customs duty shall also not be applicable on the contractors and services companies for offshore projects.
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FBR surpasses fiscal year 2019/2020 collection target
ISLAMABAD: Federal Board of Revenue (FBR) has surpassed revenue collection target of Rs3,907 billion for fiscal year 2019/2020, which was significantly lower due to coronavirus adverse impact on the economy.
FBR official spokesman on Tuesday said that the tax authorities had surpassed the downward revised target of Rs3,907 billion and collected Rs3,957 billion be Tuesday evening.
The spokesman said that the gross collection of the FBR also recorded above Rs4,000 billion for the first time in the history. The collection is considerably high considering the adverse impact of coronavirus.
The collection in the month of June 2020 also recorded at Rs411 billion by 3:00PM on June 30, 2020 as against the June target of Rs398 billion.
It is important to note that the FBR had lost around 30 officials due to the pandemic, which also included a grade 22 officer Muhammad Zahid Khokhar.
The FBR praised its officials for their dedication toward revenue collection despite threat of COVID.
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FBR grants Rs30 billion as tax concession to new business entities
ISLAMABAD: Federal Board of Revenue (FBR) has granted Rs30 billion as initial allowance to new business entities during fiscal year 2019/2020.
The concession of allowance has been granted under Section 23 of Income Tax Ordinance, 2001.
As per Section 23 the allowance has been granted as:
Section 23. Initial allowance.—
Sub-Section (1): A person who places an eligible depreciable asset into service in Pakistan for the first time in a tax year shall be allowed a deduction (hereinafter referred to as an “initial allowance”) computed in accordance with sub-section (2), provided the asset is used by the person for the purposes of his business for the first time or the tax year in which commercial production is commenced, whichever is later.
Sub-Section (2): The amount of the initial allowance of a person shall be computed by applying the rate specified in Part II of the Third Schedule against the cost of the asset.
[The rate of initial allowance under section 23 shall be 25 percent for plant and machinery.]
Sub-Section (3): The rules in section 76 shall apply in determining the cost of an eligible depreciable asset for the purposes of this section.
Sub-Section (4): A deduction allowed under this section to a leasing company or an investment bank or a modaraba or a scheduled bank or a development finance institution in respect of assets owned by the leasing company or the investment bank or the modaraba or the scheduled bank or the development finance institution and leased to another person shall be deducted only against the leased rental income derived in respect of such assets.
(5) In this section, “eligible depreciable asset” means a depreciable asset other than —
(a) any road transport vehicle unless the vehicle is plying for hire;
(b) any furniture, including fittings;
(c) any plant or machinery that has been used previously in Pakistan; or
(d) any plant or machinery in relation to which a deduction has been allowed under another section of this Ordinance for the entire cost of the asset in the tax year in which the asset is acquired.
The FBR granted a sum of Rs36.43 billion as allowances including the initial allowance during fiscal year 2019/2020.
Under Section 23A an amount of Rs335 million has been granted as first year allowance under the head of industrial undertaking set up in specified rural and under developed areas or engaged in the manufacturing of cellular mobile phones.
An amount of Rs477 million has been granted concessions under Section 60 of the Income Tax Ordinance, 2001 for persons paying Zakat.
The FBR granted concession of Rs2.45 billion under Section 60A for persons paying Workers’ Welfare Fund. Another amount of Rs2.72 billion has been granted as allowance under Section 62B for persons paying workers’ participation fund.
An amount of Rs285 million has been granted as allowance under Section 60C for individuals paying profit or share in rent and share in appreciation for value of house on loan by banks etc.
The FBR granted Rs154 million as deductible allowance for education expenses under Section 60D.