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.

CNIC condition on purchases above Rs50,000 applies from tomorrow

ISLAMABAD: The condition of Computerized National Identity Card (CNIC) on purchases above Rs50,000 shall apply from tomorrow (February 01, 2020) as relaxation provided to small traders is expiring today.

The Federal Board of Revenue (FBR) and representatives of traders’ associations on October 30, 2019 reached on an agreement under which the application of CNIC information was deferred till January 31, 2020.

Through Finance Act, 2019, it was made mandatory that a registered person making a taxable supply shall issue a serially numbered tax invoice at the time of supply of goods containing the following particulars, in Urdu or English language, namely: –

(a) name, address and registration number of the supplier;

(b) name, address and registration, number of the recipient and NIC or NTN of the unregistered person, as the case may be, excluding supplies made by a retailer where the transaction value inclusive of sales tax amount does not exceed rupees fifty thousand, if sale is being made to an ordinary consumer.

Explanation. – For the purpose of this clause, ordinary consumer means a person who is buying the goods for his own consumption and not for the purpose of re-sale or processing.

The condition of CNIC or NTN was made mandatory from August 01, 2019.

However, on opposition from small traders the government after an agreement on October 30, 2019, postponed the applicability of CNIC till January 31, 2020.

The FBR on October 04, 2019 issued definition / rules related to condition of CNIC.

The FBR said that keeping in view the problems reported by the registered persons is ensuring proper identity of the buyer to fulfil the requirement of reporting NTN/NIC of the buyer in terms of section 23 of the Sales Tax Act, 1990, it is directed that the NIC/NTN of the buyer with respect to taxable supplies to an unregistered person shall be deemed to have been reported in good faith by the supplier provided that:

(a) The tax invoice complies with the requirements of section 23(b) of the Act.

(b) Payment made by or on behalf of the unregistered purchaser of the amount of the tax invoice, inclusive of sales tax and applicable further tax, is deposited into the supplier’s declared business bank account.

(c) The NIC provided by the purchaser is found authenticated by the National Data and Registration Authority (NADRA).

(d) The NIC/NTN provided is not of the employee of the seller or of his associates as defined under the Income Tax Ordinance, 2001.

The issuance of a show cause notice to a registered person being a seller on account of any matter arising out of the NIC provided by a purchaser shall not be made without the prior approval of the Member (IR-Operations), FBR after providing an opportunity to be heard.

January 31, 2020
FBR links 5,783 POS of retailers with online system

ISLAMABAD: Federal Board of Revenue (FBR) has integrated 5,783 Point of Sales (POS) of 286 retailers so far with the hectic efforts of field formation, FBR spokesman said on Thursday.

The spokesman said that the system had been made fully functional. The entries made through POS have been directly received by the FBR through online system.

In order to create linkage with the FBR online system, retailers are required to download a software which is available on the FBR’s official website.

Once the software is downloaded and activated the transactions made by a retailer appeared on FBR system and stored in its database, the spokesman added.

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.

POS integration is mandatory for all tier-1 retailers irrespective of the items they are dealing in.

All tier-1 retailers whether dealing in textile and leather items or any other item are required by law to integrate their POSs with FBR’s system.

The rate of sales tax for items sold by integrated retailers shall be the same as for all other suppliers as provided under the Sales Tax Act, 1990.

Only exception is for locally manufactured textile and leather items, which if sold by integrated retailers are subject to concessionary rate of 14 percent, and if sold by any other supplier are subject to 17 percent standard sales tax.

January 30, 2020
FBR invites suggestions for phasing out tax exemption, concessions

ISLAMABAD: Federal Board of Revenue (FBR) has invited suggestions from business community and other stakeholders for elimination of tax exemption and concessions.

The FBR on Thursday issued a notification for inviting income tax proposals for budget 2020/2021.

The FBR invited proposals from the stakeholders for phasing out tax concessions and exemptions.

It said that the FBR is currently engaged in the formulation of proposals for the Finance Bill 2020. In order to benefit from the collective wisdom of all the stakeholders for the improvement of tax policy, proposals have been invited for the upcoming budget 2020/2021.

The FBR said that input/suggestions in the following areas shall be appreciated as a genuine contribution towards framing or a broad based and workable tax policy:

i. Broadening of tax base for a wider participation in revenue generation efforts;

ii. Taxation of real income on progressive basis;

iii. Phasing out of tax concessions and exemptions;

iv. Removal of tax distortions and anomalies;

v. Facilitation of taxpayers and ease of doing business;

vi. Promoting equity in taxation by introducing measures where incidence of tax is higher or affluent classes.

The FBR asked all the stakeholders to send their proposals by February 07, 2020.

January 30, 2020
FBR asks customs to provide clearance details of commercial importers

KARACHI: Federal Board of Revenue (FBR) has directed customs authorities to provide details of commercial importers who made clearance during first half of current fiscal year.

The FBR sources on Thursday said that the collector of customs is required to collect income advance tax at the rate specified as withholding agent from commercial importers.

Under the law withholding agents are required to provide details of persons whose tax was deducted.

The sources said that the customs authorities as per the law to provide details of all those persons whose tax had been deducted at clearance stage on January 31, 2020.

The sources said that transactions made by commercial importers were very important for broadening of tax base.

Previously, the tax deducted at import stage was final tax and commercial importers were escaped from many questioning.

Through Finance Act, 2018, a minimum tax regime was introduced for commercial importers but due to strong lobby the amendment was withdrawn through Supplementary (Second Amendment) Act, 2019.

Through Finance Act, 2019 the minimum tax was reintroduced for commercial importers and ship breakers for tax collected at import stage.

The intention of legislature to promote documentation of economy by abolishing final tax regime is a positive step.

However, the policy should be implemented consistently to avoid unnecessary confusion, which affects the decision making of the business community.

FBR sources said that it was estimated huge amount of undocumented money was involved in payment of imports. The sources said that the commercial importers would file complete income tax returns and declaration of assets for tax year 2020.

They further said that the FBR and its field offices now can select cases of commercial importers for conducting audit and ask source of money for making payments against imports.

January 30, 2020
Return filing must for persons own immovable property above 500 square yards or 1000CC vehicle: FBR

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday said that return filing is must for persons own immovable property above 500 square yards or 1000CC motor vehicles.

The FBR in a statement said that as per Income Tax Ordinance, 2001 all those individuals who owned 500 square yards or 1000CC motor vehicles are required to file annual income tax returns.

The FBR reminded persons falling within the requirement of the law to must file their returns for tax year 2019 by January 31, 2020.

The FBR extended the last date for return filing for tax year 2019 up to January 31, 2020. The FBR said that people should avail this opportunity in order to avoid harsh penal action.

As per Section 114 of Income Tax Ordinance, 2001 following class of persons or companies are required to file their annual income tax returns:

(a) every company;

(ab) every person (other than a company) whose taxable income for the year exceeds the maximum amount that is not chargeable to tax under this Ordinance for the year; or

(ac) any non-profit organization as defined in clause (36) of section 2;

(ad) any welfare institution approved under clause (58) of Part I of the Second Schedule;

(b) any person not covered by clause (a), (ab), (ac) or (ad) who,—

(i) has been charged to tax in respect of any of the two preceding tax years;

(ii) claims a loss carried forward under this Ordinance for a tax year;

(iii) owns immovable property with a land area of five hundred 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;

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

(v) owns a flat having covered area of two thousand square feet or more located in a rating area;

(vi) owns a motor vehicle having engine capacity above 1000 CC;

(vii) has obtained National Tax Number; or

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

(ix) is a resident person 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; or

(x) every resident person being an individual required to file foreign income and assets statement under section 116A.

January 29, 2020
FBR urges return filing for tax broadening

ISLAMABAD: Federal Board of Revenue (FBR) has urged people to file their income tax returns for broadening of tax base.

In a tweet on Wednesday, the FBR said that individuals having annual income above Rs400,000 are required to file their income tax returns for tax year 2019.

The FBR urged that persons having taxable income should play their part to broaden the tax base and become active taxpayers.

The last date for filing income tax returns for tax year 2019 is January 31, 2020.

The FBR has already extended the date from September 30, 2019 in order to facilitate the taxpayers in discharging their liabilities.

The FBR will issue the Active Taxpayers List (ATL) for tax year 2019 on March 01, 2020. This list will carry the names of those taxpayers who file their returns for the said tax year.

In case of non-filing of returns, taxpayers will liable to pay 100 percent additional withholding tax on various transactions.

January 29, 2020
FBR issues list of software vendors for integrating big retailers’ sales

ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday issued list of vendors providing software for integrating sales of big retailers with the tax machinery.

The FBR said that the list of vendors who have provided Point of Sales (POS) softwares to those retailers who have integrated their POSs with FBR.

The list is in alphabetical order and the retailers may approach and engage any of them that they find suitable after due diligence.

Following is the list of vendors:

ABUZAR CONSULTANCY, Karachi, 021-32005755

AWA SOFTWARE, Karachi, (021) 34973694

COMPUTER INFORMATION SERVICES PVT LTD, Karachi, 021-34521329

CONFIZ LIMITED, Lahore, (042) 35717906, Zainulabidin 0321-4711101, Hamid Rasheed 0333-4741004, Faheem Karachi 0322-4566589

DELTA SOFT, Faisalabad, 041-8721577, 0301 7104466

DEVELOPER ZONE, Mobile, 0306 5619198

DYNEXCEL , Faisalabad, (041) 8500733

EZEE TECH TARIQ JAMIL, Mobile, 0321-4012074

EZI SOLUTION, Mobile, 0321 4598991

G. Tech, Karachi , Muhammad Ahsan Naeem 0323-8023327

GENTEC, Karachi, (021) 34167766

HISAAB.PK, Mobile, 0300 8296954

INTELLECT SOLUTIONS, Karachi, 021-35651576-7

IPOS, Mobile, 0333 5413847

ITRESOURCES, Mobile, 0306 2450000

ITSTECHWORLD.COM, Mobile, 0321-647-2001

LUMENSOFT, Lahore, (042) 111 290 290, Abdul Jabbar 0346-7999797

MAALIK CREATIVE ENGINEERS, Islamabad/RWP, (051) 2204040

MAALIK CREATIVE ENGINEERS, Islamabad/RWP, (051) 2204040

MAISON CONSULTING, Mobile, 0321 8450197

MANTAQ SYSTEMS, Lahore, (042) 32116687

MB COMMUNICATION, Islamabad/RWP, (051) 5700111

MIANTECH, Mobile, 0311 5679955

MILESTONE, Karachi, (021) 35148294

MILLENIUM SOFTWARE, Karachi, 02132582001-4

MTECH, Mobile, 0306 8512354

NETTECH, Islamabad/RWP, 051-8356632

NETTECH TECHNOLOGY, Islamabad/RWP, 051-8356632

NUBIT SOFTWARE (PVT) LTD, Karachi, (021) – 32428197

PAKISTANWEBHOST, Mobile, 0334 5662119

RETAIL PRO INTERNATIONAL, LLC, Mobile, 0345-888-7875

Sidat Haider Murshid Asociates, Lahore, 042-35789725

SOFTWORLD, Mobile, 0321 9436268

SOLUTION XPERT, Mobile, 0333 8112161

SULEMAN SWEETS, Mobile, 0333 8112161

System Plus, Lahore, (042) 37184805

SYSTEMS LIMITED, Lahore, (042) 111 797 836, Imran Khan 0313-5289270

TECHNOSYS, Mobile, 0334 396 8215

TECHNOSYS , Karachi, (021) 34325117

TMR Consulting Pvt Ltd, Islamabad, Munawar 0324-4235028

TRIOBYTE, Mobile, 0333 3490585

UNICON INTERNATIONAL PVT LTD., Karachi, (021) 5071161-65

UNIVERSAL NETWORK SYSTEMS, Karachi, (021) 34327917

WASEELA, Islamabad/RWP, (051) 111 962 962

YEHPOS, Islamabad/RWP, 051-8356632

YY TECH, Karachi, (021) 35346500

January 28, 2020
FBR warns legal action against non filers

KARACHI: Federal Board of Revenue (FBR) on Monday warned persons having taxable income to file their annual returns for tax year 2019 otherwise tax authorities will initiate legal proceedings.

The FBR issued reminder for persons having taxable income but so far unable to file their annual returns for tax year 2019.

The FBR said that the last date for filing income tax returns is January 31, 2020. It said that filing of income tax return is mandatory for all persons with annual income of Rs400,000 or more.

The tax body warned that in case individual/company fails to file their returns by due date, the FBR will assess the applicable tax without serving any notice.

It highlighted the disadvantages of not filing or late filing the returns as those persons would not be part of Active Taxpayers List (ATL).

The FBR said that non appearance on ATL the withholding tax will be charged at double rates.

Further, the FBR will initiate legal action that may result into imprisonment of one to three years. Besides, fine will be charged on late submission of income tax returns.

The FBR explain the procedure to file income tax returns. It said that an individual should login to IRIS with username and password; click on declaration tab after login; select tax year; select the form for relevant category; click on verification after entering details such as salary slip, bank statement, utility bill, tax statement, expenditure and assets etc.

January 27, 2020
FBR directs education institutions to provide details of persons paying annual fee above Rs200,000

ISLAMABAD: Federal Board of Revenue (FBR) has directed educational institutions to provide details of persons paying annual fee above Rs200,000 in next three days.

Sources in FBR said that educational institutions including schools, colleges, universities, tuition centers, technical institutions etc. had been asked to provide details of parents or individuals paying annual fee above Rs200,000 by January 31, 2020.

The educational institutions have been directed to provide complete details of persons paying fees, which should include, name, address, CNIC amount of fee and tax deducted/withheld for the tax year 2020.

The sources said that the educational institutions would provide the details along with their biannual withholding statement due on January 31, 2020.

They said that under Section 236I of Income Tax Ordinance, 2001 educational institutions are required to collect withholding tax at five percent on gross amount of fee from person paying fee.

The section read as:

“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 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.”

The rate of collection of tax under section 236I shall be 5 percent of the amount of fee.

January 27, 2020
FBR monitors immovable property transactions to enforce fair market values

KARACHI: Federal Board of Revenue (FBR) is monitoring transactions of immovable properties to check sales and purchases on fair market value, sources told PkRevenue.com.

The sources said that the FBR had reduced the withholding tax rate to one percent from July 01, 2019 to be collected from purchaser of immovable properties. However, this rate should be two percent in case the buyer is not listed on the Active Taxpayers List (ATL).

The sources said that the tax offices had been asked to monitor the transaction of immovable properties under the new rates with true declaration of amount.

The sources said that the FBR was fully aware about the size of undeclared money invested in the real estate business. Therefore, the monitoring was started. However, comprehensive data of buyers and sellers will be provided by withholding agents to the FBR by January 31, 2020.

The sources said that the withholding agents for immovable transactions are those persons registering, recording or attesting or transfer including local authorities, housing authorities, Housing Society, Co-operative Society and registrar or properties.

They said that tax offices would start massive crackdown after receiving the data from withholding agents.

They said that people were not declaring true values of immovable properties at the time of registration or transfer, which was causing massive loss to national exchequer.

They further said that by concealing the true amount, buyers and sellers were also promoting black economy.

The sources said that withholding agents would provide details of buyers and sellers, including names, addresses, CNICs, declared value and amount of tax withheld.

The FBR sources the tax authorities would examine the mode of payment and compare the declared value with the prices prevailed in the open market.

They said that after conducting examination the tax authorities would ask buyers and sellers of immovable properties to file income tax returns, in case those persons were not in the tax net.

January 26, 2020