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 notifies new chapter for sales tax withholding rules

ISLAMABAD: Federal Board of Revenue (FBR) has notified a new chapter for deduction and deposit of sales tax withholding on taxable goods and services.

The rules shall apply from today or July 01, 2019.

The FBR issued SRO 698(I)/2019 to amend Sales Tax Rules, 2006 to include Chapter XIV-D regarding withholding of sales tax by recipient of supply.

Following is the text of rules notified by the FBR through the SRO.

“150ZZH. Application.— (1) This chapter shall apply to taxable goods and services as are supplied to the withholding agents as specified in the Eleventh Schedule to the Act, for the purpose of deduction and deposit of sales tax persons registered as exporters.

(2) This chapter shall also apply to services on which federal excise duty is payable in sales tax mode, and the ones specified in the Schedule to the Islamabad Capital Territory (Tax on Services) Ordinance, 2001 (XLII of 2001).

(3) Withholding agent, in case of supplies to Federal or Provincial Government departments, includes the accounting office which is responsible for making payment against the purchases made by a government department.

150ZZI. Responsibility of a withholding agent.--(1) The withholding agent, intending to make purchases of taxable goods, shall indicate in an advertisement or notice for this purpose that the sales tax to the extent as provided in this Chapter shall be deducted from the payment to be made to the supplier.

(2) A withholding agent, other than a recipient of advertisement services, shall deduct an amount as specified in the Eleventh Schedule to the Act and make payment of the balance amount to him as per illustration given below,–

ILLUSTRATION (in case 1/5th of sales tax amount is to be deducted)

Value of taxable supplies excluding sales tax: Rs. 1000

Sales tax chargeable @ 17%: Rs. 170

Sales tax to be deducted by the withholding Agent: Rs. 34 (i.e. Rs. 170 / 5)

Sales tax payable by the withholding agent to the supplier: Rs. 136 (i.e. Rs. 170-Rs.34)

Balance amount payable to the supplier by the withholding agent: Rs. 1136 (i.e. Rs. 1000 + Rs.136)

Provided that the withholding agent shall not be entitled to reclaim or deduct the amount of tax withheld from such persons as input tax.

(3) A person who receives advertisement services, in case the sales tax amount is not indicated on the invoice received, he shall deduct sales tax at the applicable rate of the value of taxable services from the payment due to the service provider.

(4) Where the purchases are made by a government department, the following procedure shall be observed, namely:–

(a) the Drawing and Disbursing Officer (DDO) preparing the bill for the accounting office shall indicate the amount of sales tax withheld as illustrated above. The accounting office shall adopt the procedure as indicated below:

(i) in case of purchases made by a department under the Federal Government, the office of the Accountant General of Pakistan Revenue shall account for the amount deducted at source during a month under the Head of Account “B02341-Sales Tax” and send an intimation to the Chief Commissioner, Regional Tax Office, Islamabad, by the 15th of the following month;

(ii) in case of purchases by departments under provincial or district governments, the Accountant General of the province or the District Accounts Officer, as the case may be, shall credit the amount deducted at source during a month to the head of account “GI2777-Sales Tax Deductions at Source under rule 40 & 40A of Chapter Miscellaneous of Sales Tax (Withholding) Rules, 2007”. Cheque for the amount will be prepared by the Accountant General or the District Accounts Officer, as the case may be, in the name of Commissioner having jurisdiction by debit to the aforesaid head of account and sent to the Commissioner by the 15th of the following month; and

(iii) where the purchases are made by the departments falling in purview of Military Accountant General, the MAG shall account for the amount deducted at source during a month under the Head of Account “B0234l-Sales Tax” and send intimation to the Chief Commissioner, Regional Tax Office, Rawalpindi, by the 15th of the following month. The amount so deducted at source shall be reported by MAG office to AGPR through civil exchange accounts; and

(b) the concerned Drawing and Disbursement Officer shall prepare the return in the form as set out in STR-28 for each month and forward the same to the Commissioner having jurisdiction by the 15th of the following month.

(5) In case of purchases, not covered by sub-rule (4) or sub-rule (6), the sales tax deducted at source shall be deposited by the withholding agent in the designated branch of National Bank of Pakistan under relevant head of account on sales tax return-cum-payment challan by 15th of the month following the month during which the purchase has been made. The return-cum-payment challan shall be prepared and deposited with the bank in triplicate and the bank shall send the original to the Commissioner of Sales Tax having jurisdiction, return the duplicate to the depositor and retain the triplicate for its own record:

Provided that a single return-cum-challan can be filed in respect of all purchases for which the payment has been made in a month.

(6) In case the withholding agent is also registered under the Sales Tax Act, 1990, or the Federal Excise Act, 2005, he shall deposit the withheld amount of sales tax along with return filed for the month in which the purchase was made in the manner as provided in Chapter II, along with other tax liability:

Provided that in case the withholding agent is not registered for sales tax or federal excise duty but holds a national tax number assigned under the Income Tax Ordinance, 2001 (XLIX of 2001), he shall file the return, as set out in STR-28, electronically and deposit the amount deducted at source in the manner as provided for persons filing returns electronically under rule 18:

Provided further that any other withholding agent may also opt to file the prescribed return electronically and deposit the deducted amount in the manner as provided in this sub-rule.

(7) The withholding agent shall furnish to the Commissioner of Sales Tax having jurisdiction all such information or data as may be requested by him for carrying out the purposes of these rules.

(8) A certificate showing deduction of sales tax shall be issued to the supplier by the withholding agent duly specifying the name and registration number of supplier, description of goods and the amount of sales tax deducted.

150ZZJ. Responsibility of the registered supplier.— (I) The registered supplier shall issue sales tax invoice as stipulated in section 23 of the Sales Tax Act, 1990, in respect of every taxable supply made to a withholding agent.

(2) The registered supplier shall file monthly return as prescribed in Chapter II, taking due credit of the sales tax deducted by the withholding agent, in the manner as prescribed in the return.

150ZZK. Responsibility of the Commissioner.—(1) The Commissioner shall keep a list of all withholding agents falling in his jurisdiction and monitor payment of tax deducted by withholding agents falling in his jurisdiction and shall also ensure that the return prescribed under these rules is filed.

(2) The Commissioner shall ensure that the return received from the bank is duly fed in the computerized system as referred to in clause (5AA) of section 2 of the Sales Tax Act, 1990.

(3) The Commissioner shall periodically ensure that the suppliers mentioned in the return filed by the withholding agents, as fall under his jurisdiction, are filing returns under Chapter II, and are duly declaring the supplies made to withholding agents.

150ZZL. Exclusions.-The provisions of this Chapter shall not apply to the supplies
of the following goods and services if made by a registered person, namely:-

(i) electrical energy;

(ii) natural gas;

(iii) petroleum products as supplied by petroleum production and exploration companies, oil refineries, oil marketing companies and dealers of motor spirit and high speed diesel];

(iv) telecommunication services;

(v) goods specified in the Third Schedule to the Sales Tax Act, 1990 (VII of 1990), and the goods on which federal excise duty is payable in sales tax mode on the basis of retail price;

(vi) supplies made by commercial importers who paid value addition tax on such goods at the time of import as prescribed under Twelfth Schedule to the Act, and

(vii) Supplies made by an active taxpayer as defined in the Sales Tax Act, 1990 to another registered person with the exception of advertisement services.”

This Notification shall take effect on and from the 1st day of July, 2019.

July 1, 2019
FBR amends sales tax rules to implement automated registration system

ISLAMABAD: Federal Board of Revenue (FBR) has amended Sales Tax Rules 2006 to implement automated sales tax registration system.

The FBR issued SRO 698(I)/2019 to amend Rule 5 of Sales Tax Rules, 2016. The amendment has been made in Rule 5 for sub-rule (2) to (9), the following shall be substituted, namely:

“(2) The applicant having NTN or income tax registration shall, using his login credentials, upload following information and documents-

(a) bank account certificate issued by the bank in the name of the business;

(b) registration or consumer number with the gas and electricity supplier;

(c) particulars of all branches in case of multiple branches at various locations;

(d) GPS-tagged photographs of the business premises; and

(e) in case of manufacturer, also the GPS-tagged photographs of machinery and industrial electricity or gas meter installed.

(3) On furnishing above documents, the system shall register the applicant for sales tax.

(4) After registration, the applicant or his authorized person shall visit e-Sahulat Centre of NADRA within a month for bio-metric verification. In case of failure to visit or failure of verification, the registered person’s name shall be taken off the sales tax Active Taxpayer List.

(5) In case of manufacturer, the Board may require post-verification through field offices or a third party authorized by the Board.

In case, the field office, during scrutiny after the registration, finds that any document provided is non-genuine or fake or wrong, it may request through the system, to provide the missing document, in fifteen days, failing which the registered person shall be taken off from the sales Active Taxpayer List, subject to approval of the Member (IR-Operations), FBR.”

The automated sales tax registration will be applicable from July 01, 2019.

June 30, 2019
IR officers posted to initiate proceedings in Benami cases

ISLAMABAD: Federal Board of Revenue (FBR) has notified the names of members for adjudicating authorities under Benami law and posted officers of Inland Revenue to initiated proceedings in Benami cases.

The following officers have been notified for the adjudicating authority under Benami Transactions (Prohibition) Act, 2017.

1. Jamil Ahmad (Retired PAS/BS-22), Chairperson

2. Muhammad Tanvir Akhtar (Retired IRS/BS-21), Member

3. Khaqan Murtaza (PAS/BS-21), Member

The FBR also transferred and posted following officer of Inland Revenue Service (IRS) to Benami Zones (I, II & III) established under Benami Transactions (Prohibition Act) 2017 are made with immediate effect and until further orders:

1. Hassan Zulfiqar (IRS/BS-20) has been transferred from the post of Commissioner-IR (Appeals-I), Islamabad and posted as Commissioner-IR/ Approving Authority (Benami Zone-I)

2. Muhammad Fiaz Hussain (IRS/BS-18) has been transferred from the post of Deputy Commissioner-IR, RTO, Islamabad and posted as Deputy Commissioner-IR/ Initiating Officer (Benami Zone-I)

3. Hasham Khalid Malik (IRS/BS-17) has been transferred from the post of Assistant Commissioner-IR RTO, Islamabad and posted as Assistant Commissioner-IR/ Administrator (Benami Zone-I)

4. Khalid Khan (IRS/BS-20) has been transferred from the post of Commissioner-IR (Zone-I), Corporate RTO, Lahore and posted as Commissioner-IR/ Approving Authority (Benami Zone-II)

5. Salman Naveed (IRS/BS-18) has been transferred from the post of Deputy Commissioner-IR (BTB Zone), RTO-II, Lahore and posted as Deputy Commissioner-IR/ Initiating Officer (Benami Zone-II)

6. Asim Raza (IRS/BS-18) has been transferred from the post of Deputy Commissioner-IR (BTB Zone), RTO-II, Lahore and posted as Deputy Commissioner-IR/ Initiating Officer (Benami Zone-II)

7. Rudar Amjad (IRS/BS-17) has been transferred from the post of Assistant Commissioner-IR, Corporate RTO, Lahore and posted as Assistant Commissioner-IR/ Administrator (Benami Zone-II)

8. Syed Shakil Ahmad (IRS/BS-20) has been transferred from the post of Commissioner-IR (Zone-II), LTU-II, Karachi and posted as Commissioner-IR/ Approving Authority (Benami Zone-III)

9. Syed Bilal Mahmood Jafri (IRS/BS-18) has been transferred from the post of Deputy Commissioner-IR (BTB Zone), RTO-II, Karachi and posted as Deputy Commissioner-IR/ Initiating Officer (Benami Zone-III)

10. Syed Mashkoor Ali (IRS/BS-18) has been transferred from the post of Deputy Commissioner-IR (BTB Zone), RTO-II, Karachi and posted as Deputy Commissioner-IR/
Initiating Officer (Benami Zone-III)

11. Razi Ul Haq Qureshi (IRS/BS-17) has been transferred from the post of Assistant Commissioner-IR, RTO-III, Karachi and posted as Assistant Commissioner-IR/Administrator (Benami Zone-III)

The FBR said that the officers, who are drawing performance allowance prior to the issuance of this notification, shall continue to draw the said allowance on their upgraded posts.

Related Stories

FBR notifies adjudicating authorities for Benami cases

June 30, 2019
FBR issues uniform 17pc sales tax rates for petroleum products

ISLAMABAD: Federal Board of Revenue (FBR) on Sunday issued uniformed sales tax rates for petroleum products effective from July 01, 2019.

To implement the sales tax rates for petroleum products from July 01, 2019 the FBR issued SRO 700(I)/2019 on Sunday.

In the earlier SRO 602(I)/2019 dated May 31, 2019, the FBR fixed the sales tax rate included: petrol 13 percent; high speed diesel oil, 13 percent; kerosene oil 17 percent; and light diesel oil at 17 percent.

The FBR sources said that the sales tax rates have been increased on the two major products including petrol and high speed diesel oil, which are main revenue spinner.

The FBR has been given Rs5,550 billion target for fiscal year 2019/2020, which is apparently an impossible target on the back of weak economic conditions and lower manufacturing output.

June 30, 2019
FBR notifies adjudicating authorities for Benami cases

ISLAMABAD: Federal Board of Revenue (FBR) has notified adjudication authorities for Benami cases with immediate effect. The adjudication authorities have been set up at Karachi, Lahore and Islamabad.

The FBR issued a notification on Saturday stating that consequent upon approval of the federal government and in pursuance of Section 6 of Benami Transactions (Prohibition Act) 2017, adjudication authorities are hereby established and notified at Karachi, Lahore and Islamabad with immediate effect.

Section 6 of the Benami Transactions (Prohibition Act) 2017 explained the adjudicating authority as:

01. The federal government shall, by notification, in the official gazette, appoint one or more adjudicating authorities to exercise jurisdiction, powers and authority conferred by or under this Act.

02. Adjudicating authority shall consist of a chairperson and at least two other members.

03. A person shall not be qualified for appointment as the chairperson or a member of the adjudicating authority, unless that person:

a. is or has been a member of the Inland Revenue Service and has held the post of Chief Commissioner Inland Revenue or equivalent post in that service; or

b. is or has been a member of any federal service and has held the post of additional secretary or equivalent post in that service.

The chairperson and the other members of the adjudicating authority shall be appointed by the federal government in such a manner as may be prescribed.

The federal government shall appoint the senior most member to be the chairperson of the adjudicating authority.

June 30, 2019
New values of steel products fixed for sales tax payment

ISLAMABAD: Federal Board of Revenue (FBR) has notified new valuations for steel products for the purpose of collecting sales tax from July 01, 2019.

The FBR on Saturday issued SRO 697(l)/2019 to fix the following values of locally produced goods specified in the Table below, for the purpose of payment of sales tax on ad valorem basis, at the rate as applicable to specified in sub-section (1) of section 3 of the Sales Tax Act, 1990.

1. Steel bars: Rs83,000 per metric ton

2. Steel Billets: Rs74,000 per metric ton

3. Steel Ingots/bala: Rs72,000 per metric ton

4. Ship plates: Rs72,000 per metric ton

5. Other re-rollable iron & steel scrap: Rs47,000 per metric tons

In case the value of supply of the goods specified in this notification is higher than the values fixed herein, the value of goods shall be the value at which the supply is made.

The FBR said that the SRO would take effect on and from the 1st day of July, 2019.

June 30, 2019
FBR increases up to 28.34 percent retail value of CNG for sales tax collection

ISLAMABAD: Federal Board of Revenue (FBR) has enhanced the consumer value of CNG by 28.34 percent for collection of sales tax from July 01, 2019.

The FBR issued SRO 690(I)/2019 to notify the consumer value of CNG for the purpose of charging of sales tax from CNG stations by gas transmission and distribution companies.

The FBR increased the consumer value of CNG to Rs69.57 per kilogram for Region-I, which included Khyber Pakhtunkhwa, Baluchsitan and Potohar Region (Rawalpindi, Islamabad, and Gujar Khan. The increase in consumer value is around 7.36 percent for this region as compared with the previous rate of Rs64.80 per kilogram.

However, the FBR increased the consumer value of CNG by 28.34 percent for Region – II to Rs74.04 per kilogram from Rs57.69 per kilogram.

The Region – II is included: Sindh and Punjab excluding Potohar Region.

Large Taxpayers Unit (LTU) Karachi two years back presented a draft amendment, which stated:

“Notification in exercise of powers under subsection (8) of section 3 for value of supply of CNG to CNG consumers as per prevailing market price in the same way as it is being issued in case of sale of petroleum product every month.

“Board [FBR] may kindly issue the notification in exercise of powers under subsection (8) of section 3 for value of supply of CNG to CNG consumers as per prevailing market price in the same way as it is being issued in case of sale of petroleum products to avoid huge loss of monthly sales tax revenue.”

The LTU Karachi said that the Gas Transmission and Distribution Company charges sales tax from CNG stations @ 17 percent of the value of supply to the CNG consumers as notified by the Board from time to time in terms of section 3(8) of the Sales Tax Act, 1990.

Board accordingly vide its SRO No. 236(I)/2014 dated 31-03-2014, had notified the value of supply to the CNG consumers as the total value added cost of CNG as notified by the OGRA.

The latest notification issued by OGRA is dated 31.08.2015 which fixed the maximum CNG price as follows:

Region Value Added Cost GST

@ 17%
Maximum

CNG Sale Price

I 64.80 11.02 Rs. 75.82
II 57.69 9.81 Rs. 67.50

On 21-12-2016, OGRA deregulated the CNG sector in Pakistan, and directed the CNG station operators/associations to fix the rates themselves, as per market demand.

This caused in an instant increase in the rates of CNG which jumped from Rs. 67.50 per kg in the Southern Region to Rs.79 overnight.

However, the Gas distribution companies are charging sales tax on the previously issued notification of OGRA dated 31-08-2015.

As a result, the CNG stations are collecting sales tax on maximum CNG sales price at Rs79 per kg from the end consumers where as the Government is getting sales tax from the Gas distribution companies on maximum retail price at Rs67.50, incurring a loss of sales tax revenue of Rs1.67 per kg.

This loss of sales tax revenue of Rs.1.67 per kg is being collected from end consumers and pocketed by CNG stations.

CNG retail price per kg on which SSGC is collecting GST (Rs.) GST @ 17%(Rs) CNG prevailing market retail price (Rs) GST @ 17% (Rs) Loss in sales tax revenue per kg(Rs)
67.50 9.81 79.00 11.48 1.67

The per month loss to the government revenue comes to be Rs75 million only in the case of SSGCL as the average monthly sale of Gas to the CNG stations by SSGCL is 50 million kgs of gas.

Similarly the loss in case of SNGPL which caters more than three times of CNG stations is fairly high.

June 29, 2019
FBR restricts sale of duty free imported motor vehicles, machinery for Thar Coal Field

ISLAMABAD: Federal Board of Revenue (FBR) has imposed restriction on selling the duty free imported goods for machinery and motor vehicles for Thar coal field.

In order to impose restrictions the FBR on Saturday issued SRO 673(I)/2019 to amend SRO 268(I)/2015 dated April 02, 2015.

The FBR allowed exemption from whole of customs duty on import of coal mining equipment and machinery including vehicles for site use, if not manufactured locally, imported for Thar Coal Field.

Through the latest SRO, the FBR said that the goods shall not be sold or otherwise disposed of without prior approval of the FBR.

“In case such goods are sold or otherwise disposed of after ten years of importation thereof, the same shall be subject to payment of duties and taxes as prescribed by the FBR.”

In case these goods are sold or otherwise disposed of without prior approval of the FBR or before the period of ten years from the date of importation thereof, the same shall be subject to payment of statutory rates of duties and taxes as were applicable at the time of import.

“These goods shall, however, be allowed to be transferred to the other entitled projects of the sector, with prior approval of the FBR, subject to payment of duties and taxes, if applicable.”

The re-export of these goods may also be allowed subject to prior approval of the Chief Collector of Customs.

June 29, 2019
FBR imposes up to 7 percent additional customs duty

ISLAMABAD: Federal Board of Revenue (FBR) has imposed up to seven percent additional customs duty on items falling under tariff slab of 20 percent and higher slabs.

The FBR issued SRO 670(1)/2019 on Saturday stated that in supersession of its Notification No. SRO 630(1)/2018, dated the May 24, 2018, the federal government approved to levy additional customs duty on import of goods specified in the First Schedule to the said Act, at the rate of-

(i) two per cent on goods falling under tariff slabs of 0 percent, 3 percent and 11 percent;

(ii) four per cent on goods falling under tariff slab of 16 percent; and

(iii) Seven per cent on goods falling under tariff slab of 20 percent and higher slabs including slabs of specific rates.

The FBR said that the value of goods for purpose of this levy shall be the value as determined under section 25 or section 25A of the said Act.

The additional customs duty shall not be levied on the following, namely: –

(i) import of seeds and spores for sowing (PCT 0904.2120, 1006.1010,
1209.0000);

(ii) import under Chapter 31 of First Schedule of the Customs Act,1969
(IV of 1969);

(iii) import of goods classifiable under PCT codes, 52.01, 52.03, 9501.3000, 5503.1100, 5503.1900, 5503.3000, 5503.4000, 5503.9000, 5504.1000, 5504.9000, 5506.1000, 5506.3000, 5506.4000, 5506.9000 and 5507.0000;

(iv) import of goods classifiable under PCT codes 2902.3000, 2914.1200, 2915.1290, 2933.9990, 3202.1000, 3202.9010, 3202.9090, 3204.1100, 3204.1300, 3207.1090, 3208.1090, 3208.9090, 3403.9910, 3506.9110, 3506.9190, 3812.3900, 3906.9020, 4005.1090, 4005.9900, 8453.2000, 9606.2920 and 9606.2990;

(v) plant and machinery used in manufacturing or production of goods as is classifiable under Chapter 84 and 85 of the First Schedule to the Customs Act, 1969 (IV of 1969);

(vi) import under PCTs 8517.1211 and 8517.1219

(vii) import under Chapter 99 of First Schedule of the Customs Act, 1969

(IV of 1969);

(viii) import under Fifth Schedule to the Customs Act, 1969 (IV of 1969)
excluding;

(a) serial numbers 30, 32, 33 and 35 of table of Part-l,

(b) serial numbers 20 to 28, 30, 60, 96, 102, 108 to 118 of Table of Part Ill; and

(c) Serial numbers 29 to 51, 66 to 85, 109 to 115, 117 to 126, 128 to 155 and 157 to 169 of Table-A, Sr. No. 4 to 9, 11 to 14, 19 to 21 of Table-B and Sr. No.1 to 47 of Table-C of Part VII

(ix) import under the Baggage Rules, 2006;

(x) import under sub-chapters 3 and 7 of chapter XII and chapter XV of Customs Rules, 2001;

(xi) import under Notification No.SRO.577(I)/2005 dated 6th June, 2005;

(xii) import under Notification No.SRO.565(1)/2006 dated 5th June, 2006;

(xiii) import under Notification No.SRO.693(I)/2006 dated 1st July, 2006;

(xiv) import under Small and Medium Enterprises and Export Oriented Units Rules, 2008;

(xv) import under temporary importation scheme vide S.R.O. 492(1)/2009, dated the 13th June, 2009; and

(xvi) imports under condition (vii) of SRO 678(1)/2004, dated the 7th August, 2004, by the Exploration and Production Companies, their contractors and service companies for offshore projects only.

The FBR said that this notification shall take effect from July 1, 2019.

June 29, 2019
Income from Dubai-based properties declarable, not taxable in Pakistan: FBR

KARACHI: Federal Board of Revenue (FBR) has said that income generated from Dubai-based properties is declarable but not chargeable to tax in Pakistan.

Replying to query raised by business community at a seminar organized by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Asset Declaration Ordinance, 2019, said a statement on Friday.

In a query about rental income originated from Dubai-based properties IR CRTO team replied that double taxation treaty overwrote the domestic law and the UAE clearly stated that tax on rental income is charged by the country where income is originated hence rental income from Dubai-based properties are declarable but not chargeable in Pakistan.

During the awareness session, the IRS CRTO team led by its Chief Commissioner Shafqat Ali Kehar and consisting of Maqsood Jehangir, Commissioner IR Zone-IV, CRTO and Kashif Hafeez, Additional Commissioner IR Zone IV CRTO Karachi, made a multimedia presentation and elaborated salient features of the Assets Declaration Ordinance, 2019 and gave replies to various queries, ambiguities etc., as raised by the participants.

Regarding a query on Power of Attorney, it was replied that all immovable properties, which were transferred on power of attorney, would be declared as Benami property under the ADO, 2019 as the objective of the Scheme was to allow inclusion of non-documented economy in taxation system and to promote economic revival and growth by encouraging tax compliance.

The IR Team informed, “ADO, 2019 has been announced with the aim not to generate revenue but to document the economy in the background of Financial Action Task Force (FATF); revival and growth of economy through tax compliance.

The Team added, “ADO, 2019 is also applicable in undisclosed Assets and expenditures and sales and provides immunity from proceeding Under Section 111 of ITO 2011; the deadline will not be extended beyond 30-06-2019 ; tax can be paid in installment subject to default surcharge; Gold Jewelry, bearer prize bonds, securities, etc., are not required to declare, open plots, local immovable property etc., can be declared at higher cost of acquisition or 150 percent of FBR value or 150 percent of DC Value ; availability of carry forward facility of stock on 30-06-2018 to 2018-19 etc.

Engr. Daroo Khan Achakzai, President (FPCCI) hailed the Asset Declaration Ordinance (ADO), 2019 and termed it as a right step in the right direction with the objective to bring the tax evaders under the tax net; enhancing the country’s revenue base; documentation of economy; arresting the size of ever increasing black economy; mobilize resources and to bring dead assets in the mainstream of economy and make them functional.

He recalled that during the past six years, tax-to-GDP ratio has hovered between 9 percent in 2013-14 and 11.4 percent in 2017-18 to 10.8 percent in the current year 2018-19

The FPCCI Chief hoped that the government efforts to raise tax-to-GDO ratio to 12.6 percent in the next year (2019-20); documentation of economy and broadening of tax base would yield fruitful results as no economy can function without sufficient revenue collection and its thin tax base consisting of about two million assessees or 1 percent of total population has resulted in higher tax rates which provides sufficient incentive for tax evasion and corruption.

The FPCCI President informed that the ADO, 2019 had granted special treatment to the real estate sector and appealed to take advantage of tax amnesty scheme and document benami/ undeclared/ under-declared property and concede assets against concessionary tax payments.

The participants expressed their problem in filing of asset declarations due to non / partial functioning of FBR’s portal (IRIS).

They proposed for allowing Provisional Declaration of Assets by 30th June, 2019 and elaborated that the Scheme was announced only 45 days ago and as such the declarants who are not in a position to deposit cash due to liquidity crunch and filed declaration before 30-06-2019 may be treated as provisional and the assessees may be allowed to deposit the cash in bank accounts within 90 days.

They also proposed that at least 15 days may be allowed to incorporate or feed the declaration data in relevant Income Tax and Sales Tax Returns / profiles particularly when IRIS is not fully operationals and as such it will not affect at all the last date of declaration of assets.

June 29, 2019

CNG retail price per kg on which SSGC is collecting GST (Rs.)	GST @ 17%(Rs)	CNG prevailing market retail price (Rs)	GST @ 17% (Rs)	Loss in sales tax revenue per kg(Rs)
67.50	9.81	79.00	11.48	1.67