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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.

  • Valuation of concealed assets for income tax recovery

    Valuation of concealed assets for income tax recovery

    KARACHI: Federal Board of Revenue (FBR) shall conduct valuation for the purpose of income tax recovery on those assets which were identified as concealed.

    According to Income Tax Rules, 2002, the valuation of concealed assets as under Section 111 of Income Tax Ordinance, 2001 would be taken as:

    (1) The valuation of immovable property for the purposes of section 111 shall be taken to be-

    (a) the fair market value of immovable property shall be the value notified by the Board under sub-section (4) of section 68 of the Income Tax Ordinance, 2001, in respect of area or areas specified in the said notifications;

    (b) if the fair market value of any immovable property of any area or areas has not been determined by the Board in the notification referred to in sub-section (4) of section 68, 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; and

    (c) in the case of agricultural land, the value shall be equal to the average sale price of the sales recorded in the revenue record of the estate in which the land is situated for the relevant period or time;

    (d) if in a case sale price recorded in the instrument of sale of any property is higher than the fair market value as determined under clauses (a), (b) and (c), the applicable price shall be higher of the two; and

    (e) in the case of sale price of any auctioned property or the fair market value as determined under clauses (a), (b) and (c), the higher price shall be applicable.

    (2) For the purposes of section 111 and subject to sub-rule (2), the value of motor cars and jeeps shall be determined in the following manner, namely:-

    (a) the value of the new imported car or jeep shall be the C.I.F. value of such car or the jeep, as the case may be, plus the amount of all charges, customs-duty, sales tax, levies, octroi fees and other duties and taxes leviable thereon and the costs incurred till its registration;

    (b) the value of a new car or jeep purchased from the manufacturer or assembler or dealer in Pakistan, shall be the price paid by the purchaser, including the amount of all charges, customs-duty, sales tax and other taxes, levies, octroi, fees and all other duties and taxes leviable thereon and the costs incurred till its registration;

    (c) the value of used car or jeep imported into Pakistan shall be the import price adopted by the customs authorities for the purposes of levy of customs-duty plus freight, insurance and all other charges, sales tax, levies octroi, fees and other duties and taxes leviable thereon and the costs incurred till its registration.

  • FBR’s helpline receives 24,270 complaints in December

    FBR’s helpline receives 24,270 complaints in December

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday said that its helpline received 24,270 complaints so far in December 2019.

    “Out of these complaints, most of the complaints were disposed without any delay. Only some complaints of technical nature took a little time in disposal,” the FBR said.

    Likewise, the number of complaints sent through E-mail was 11447. Out of these, 7126 complaints were addressed immediately, the rest 4321 were resolved after seeking assistance from concerned Wings, the FBR added.

    The FBR said its helpline is a free, fast & reliable service that is committed to provide the very best service to the public.

    FBR’s Helpline not only educates the public but also provides them a forum through which the public can put forward their queries and seek resolution to most of their issues via phone, email or website.

    Helpline team has been at the forefront in resolving issues that come up from time to time such as payment of Surcharge for ATL, guidance for newly launched Online Sales Tax Registration application, guidance for newly launched Biannual Income Tax Withholding Statement, guidance for ST Returns launched for the new financial year.

    The Helpline is providing services to the public in two shifts. Furthermore, the Helpline representatives are providing all possible support to the Taxpayers in ensuring that they are easily able to navigate various Transactional portals such as Income Tax portal (Iris) etc.

    FBR Helpline utilizes international standard Customer Relationship Management (CRM) System, which ensures availability of three (3) tier support lines ensuring that FBR Helpline promptly resolves Taxpayer issues.

    The FBR said that taxpayers are provided a case number for each complaint lodged and resolution of the case is ensured within 24 hours of the complaint lodged.

    Cases of complex nature which require legal and technological modification in the system are resolved within 3 days of the lodged complaint.

    The FBR is committed towards bringing about a Service Oriented Culture– geared towards resolving challenges faced by investors and taxpayers, helping to improve the Ease of Doing Business (EoDB).

    “FBR understands its responsibilities as a Partner in Progress- where its sole responsibility isn’t just to collect taxes but also ensure that it provides the very best service; ushering in a tax compliant culture while providing the necessary tools for economic growth,” the statement said.

    FBR Helpline can be reached through phone (051-111-772-772) and email ([email protected]), plus complaints can also be lodged through the website (www.fbr.gov.pk).

  • FBR constitutes market committees at 17 RTOs

    FBR constitutes market committees at 17 RTOs

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday constituted market committees within the jurisdiction of 17 Regional Tax Offices (RTOs) to resolve the issues of small traders and retailers.

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  • No tax on cash withdrawal from banks on active taxpayers: FBR

    No tax on cash withdrawal from banks on active taxpayers: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday said that there is no tax on cash withdrawal from banks for those whose names are on the Active Taxpayers List (ATL).

    Otherwise, the withholding tax rate on cash withdrawal is 0.6 percent for persons not appearing on the ATL.

    In order to ensure names on ATL, taxpayers are required to file their annual income tax returns. The FBR urged the taxpayers to avail the extended the last date for filing income tax returns for tax year 2019, which is December 31, 2019.

    The FBR said that in case of enlistment in the ATL, the taxpayers shall have following benefits:

    — Almost half of the withholding tax as compared with the inactive taxpayers

    — 5.5 percent tax on imports (raw material)

    — 6 percent tax on imports (commercial)

    — 15 percent tax on dividends

    — 10 percent tax on bank and savings scheme profit worth up to Rs0.5 million and 15 percent on above Rs0.5 million

    — 4.5 percent tax on sale of goods by persons except companies

    — 10 percent tax on provision of services by persons except companies

    — 7.5 percent tax on contract executed by person except companies

    — 15 percent tax on prize bonds money of prize bonds

    — 12 percent tax on commission

    — Annual token fee of vehicles from Rs800 to Rs10,000

    — Withholding tax on vehicle registration from Rs7,500 to Rs250,000

    — No tax on cash withdrawal of more than Rs50,000 from banks

    — No tax on bank transactions (cross cheque, pay order, demand draft etc.)

    — One percent tax on purchase of property

    — 10 percent tax on sale by auction

    — Tax on mobile phone import from Rs70 to Rs200

    — 10 percent tax deduction for payment against advertisement to non-resident person

    The FBR said that in case of no enlistment in the ATL, the following tax rates are applicable:

    — Almost double tax rates

    — 11 percent tax on imports (raw material)

    — 12 percent tax on imports (commercial)

    — 30 percent tax on dividends

    — 20 percent tax on bank and savings scheme profit worth up to Rs0.5 million and 30 percent on above Rs0.5 million

    — 9 percent tax on sale of goods by persons except companies

    — 20 percent tax on provision of services by person except companies

    — 15 percent tax on contract executed by person except companies

    — 30 percent tax on prize money of prize bonds

    — 24 percent tax on commission

    — Annual token fee of vehicles from Rs1,600 to Rs20,000

    — Withholding tax on vehicle registration from Rs15,000 to Rs500,000

    — 0.6 percent tax on cash withdrawal of more than Rs50,000 from banks

    — 0.6 percent tax on bank transactions (cross cheque, pay order, demand draft etc.)

    — 2 percent tax on purchase of property

    — 20 percent tax on sale by auction

    — Tax on mobile phone import from Rs140 to Rs400

    — 20 percent tax deduction for payment against advertisement to non-resident person

    The FBR said that those persons failed to file their return then the tax authorities would assess the applicable tax without serving any notice. Further, legal action will be taken resulting into imprisonment of one to three years.

    The FBR also said that late income tax return filers will pay fine.

    The FBR said that the filing of income tax returns is mandatory for all persons with annual income of Rs400,000 or more.

  • FBR needs to collect Rs2,198 billion in first half of current fiscal year

    FBR needs to collect Rs2,198 billion in first half of current fiscal year

    KARACHI: Federal Board of Revenue (FBR) is required to collect Rs2,198 billion during first half of the current fiscal year as per revised performance criteria of International Monetary Fund (IMF).

    The revenue collecting agency has failed to achieve the first quarter performance criteria.

    According to Country Report Pakistan released by IMF on Monday the actual performance criteria for revenue collection was Rs2,367 billion during first half (July – December) of current fiscal year, which has been revised downward by Rs169 billion to Rs2,198 billion.

    This shows that the FBR will need to collect Rs590 billion in the month of December 2019 to achieve the revised performance criteria.

    The FBR’s provisional collection during first five months (July – November) 2019/2020 was Rs1,608 billion.

    As per IMF documents the FBR failed to achieve the first quarter (July – September) 2019/2020 target of Rs1,071 billion and its collection was at Rs964 billion.

    The actual revenue collection target for current fiscal year was Rs5,550 billion. However, the indicative target as per IMF documents has also been revised downward to Rs5,238 billion.

    The FBR has to raise revenue collection to Rs3,520 billion by March 2020 in order to ensure the desired target for current fiscal year.

    As per IMF documents: “Tax revenue is now expected to be 0.5 percent of GDP lower than originally expected: while domestic collection is envisaged to remain strong, growing by over 25 percent y-o-y over FY 2020, growth in trade-related tax revenues is expected to remain subdued as declining imports continue to weigh on collections—more than 40 percent of total tax revenue in Pakistan is collected at the import stage.”

    The FBR has been given revised Indicative Targets for end December 2019 including net tax collection to recognize the faster than expected external adjustment negatively impacting customs revenue, besides net accumulation of tax refund arrears to capture the authorities plan to reflect the end-June stock of tax refund arrears.

  • Tax return filing hits new record at 2.73 million

    Tax return filing hits new record at 2.73 million

    KARACHI: The income tax return filing touches to a new record high of 2.73 million as people making compliance to avoid 100 percent additional tax on persons not appearing on Active Taxpayers List (ATL).

    The income tax return filing increased to 2.73 million on the basis of returns filed till December 22, 2019 for tax year 2018.

    Sources in Federal Board of Revenue (FBR) attributed the record increase in return filing to the amendment to Income Tax Ordinance, 2001 through Finance Act, 2019.

    In the last budget 2019/2020 a new Tenth Schedule was inserted to Income Tax Ordinance, 2001 under which persons not appearing on ATL would liable to pay 100 percent more withholding tax on certain transactions.

    The ATL for tax year 2018 issued on March 01, 2019 in which 1.59 million names were appeared of those taxpayer, who filed their returns by due date.

    However, later the FBR granted extension in date for filing returns due to introduction of a tax amnesty scheme.

    The extension for filing income tax returns for tax year 2018 was granted up to August 09, 2019.

    The return filing up to August 09, 2019 for tax year 2018 jumped up to 2.5 million from 1.59 million returns, which were part of the first ATL issued March 01, 2019.

    The insertion of Tenth Schedule to Income Tax Ordinance, 2001 speed up the return filing by taxpayers in order to avoid higher tax rate on certain transactions.

    Previously, people filing their annual income tax returns after due date were not allowed to appear on the ATL. However, another provision was added to the main statute under which persons by paying penalty can include their name to ATL.

    Therefore, since August 09, 2019 the FBR received around 230,000 tax returns for tax year 2018 till December 22, 2019.

    The FBR will issue ATL for tax year 2019 on March 01, 2020 and till then the prevailing ATL will be applicable for the purpose of withholding tax rates on certain transactions.

  • Benami properties with known sources not to attract penal action

    Benami properties with known sources not to attract penal action

    KARACHI: A person having known source of income for a property and keeps in someone else name will not attract penal action under Benami Transaction laws, sources in Federal Board of Revenue (FBR) said.

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  • Final tax regime for certain amount under Income Tax Ordinance

    Final tax regime for certain amount under Income Tax Ordinance

    KARACHI: Federal Board of Revenue (FBR) has defined final tax regime for certain income with certain conditions explained under Income Tax Ordinance, 2001.

    Following are the income falling under Final Tax Regime under the Ordinance:

    Section 5: Tax on dividends

    Section 6: Tax on certain payments to non-residents.—

    Section 7: Tax on shipping and air transport income of a non-resident person.

    Section 5AA: Tax on return on investments in sukuks.

    Section 7A: Tax on shipping of a resident person.

    Section 7B: Tax on profit on debt.

    The Section 8 of the Ordinance explained the scheme and terms and conditions
    General provisions relating to taxes imposed under sections 5, 6 and 7
    (1)-Subject to this Ordinance, the tax imposed under Sections 5, 5AA, 6, 7, 7A and 7B shall be a final tax on the amount in respect of which the tax is imposed and—

    (a) such amount shall not be chargeable to tax under any head of income in computing the taxable income of the person who derives it for any tax year;

    (b) no deduction shall be allowable under this Ordinance for any expenditure incurred in deriving the amount;

    (c) the amount shall not be reduced by —

    (i) any deductible allowance; or

    (ii) the set off of any loss;

    (d) the tax payable by a person under section 5, 5A, 5AA, 6, 7, 7A and 7B shall not be reduced by any tax credits allowed under this Ordinance; and

    (e) the liability of a person under section 5, 6 or 7 shall be discharged to the extent that —

    (i) in the case of shipping and air transport income, the tax has been paid in accordance with section 143 or 144, as the case may be; or

    (ii) in any other case, the tax payable has been deducted at source under Division III of Part V of Chapter X.

  • IR barred from arresting women on tax default

    IR barred from arresting women on tax default

    KARACHI: The offices of Inland Revenue are prohibited for arresting women on charge of tax default. Besides, the offices also cannot arrest a minor.

    According to Income Tax Rules, 2002 there is prohibition against arrest of woman or minor.

    The commissioner of Inland Revenue shall not order the arrest or detention in the civil prison of: a woman; or any person who, in his opinion, is a minor or of unsound mind.

    The rules also envisaged certain conditions on IR officers regarding entry into dwelling house for arresting tax defaulter.

    For the purpose of making an arrest under these rules,-

    (a) no dwelling house shall be entered after sunset and before sunrise;

    (b) no outer door of a dwelling house shall be broken open unless such dwelling house or a portion thereof is in the occupancy of the defaulter and he or any other occupant of the house refuses or in any way prevents access thereto; but, when the person executing any such warrant has duly gained access to any dwelling house, he may break open the door or any room or apartment if he has reason to believe that the defaulter is likely to be found there; and

    (c) no room, which is in the actual occupancy of a woman who, according to the custom of the country, does not appear in public shall be entered into unless the officer authorized to make the arrest has given notice to her that she is at liberty to withdraw and has given her reasonable time and facility for withdrawing.

    In case of illness of a tax defaulter the commissioner can release by cancelling the warrant for the arrest.

    Release on ground of illness.-

    (1) At any time after a warrant for the arrest of a defaulter has been issued, the Commissioner may cancel it on ground of the serious illness of the defaulter.

    (2) Where a defaulter has been arrested, the Commissioner may release him if, in the opinion of the Commissioner of Tax, he is not in a fit state of mind to be detained in the civil prison.

    (3) Where a defaulter has been committed to the civil prison, he may be, released therefrom by the Commissioner on the ground of the existence of any infectious or contagious disease or on the ground of his suffering from any illness.

    (4) A defaulter released under this rule may be re-arrested, but the period of his detention in the civil prison shall not in the aggregate exceed that authorized by rule 164.

  • Valuation to be issued to plug loopholes in sales tax collection on imported consumer goods

    Valuation to be issued to plug loopholes in sales tax collection on imported consumer goods

    KARACHI: Federal Board of Revenue (FBR) to issued sales tax valuation in order to plug revenue leakages on imported consumer items, sources said.

    The sources said that the FBR had identified massive misdeclaration and under invoicing on imported consumer items falling under Third Schedule of Sales Tax Act, 1990.

    In the latest budget 2019/2020, an amendment was introduced to Sales Tax Act, 1990 under which printing of retail price was made mandatory on imported consumer goods.

    The measure was introduced to end the assumed prices in order to recover sales tax on fixed retail prices on imported items.

    The law has been applicable since July 01, 2019 but due to difficulties faced by importers of such goods the FBR allowed relief in declaration without printing of retail prices subject to some conditions.

    The FBR issued Sales Tax General Order (STGO) on August 07, 2019 that the retail price, if not printed at import stage, can be printed at the port of import.

    According to the STGO: “If that is also not possible, the importer shall undertake to print the retail price after clearance of goods and shall pay sales tax on retail price which shall not be less than 130 percent of the customs value increased by assessed customs duties, excise duty and other applicable taxes and charges excluding sales tax.”

    The sources said that tax offices in Karachi conducted survey and found the selling price of imported consumer items was much higher than the declared value at customs clearance stage.

    They said that the finding of the survey had been sent to the FBR headquarters for taking further action.

    The printing of retail prices is mandatory for importers on items such as tea, juices, perfumes, household electrical goods, including air conditioners, refrigerators, deep freezers, televisions, recorders and players, electric bulbs, tube-lights, electric fans, electric irons, washing machines and telephone sets. These items shall also include house hold gas appliance, including cooking range, ovens, geysers and gas heaters.

    Besides items such as foam mattresses, paints, lubricating oils, storage batteries, tyers, motor cycles and auto rickshaws have also been included in the regime of printed retail prices.

    The sources said that as per latest development the FBR had decided to issue valuation of such imported consumer goods in order to realize correct sales tax at import stage.